Iraqis go to polls amid tight security

Iraqis voted amid tight security in provincial elections that will be a key indicator of how much progress the country has made as it attempts to move beyond the years of conflict and sectarian violence
Source: Financial Times - US homepage | 31 Jan 2009 | 11:51 am

Brown urges cooperation to rebuild global economy

Gordon Brown today urged countries to co-operate to help end the global economic crisis, and warned against protectionism and fear.
Source: Latest Business News from Times Online | 31 Jan 2009 | 11:27 am

Obama pledges mortgage help with new financial plan (Reuters)

Reuters - President Barack Obama promised on Saturday to help lower Americans' mortgage costs with a new plan, coming soon, that would revive the financial system and "get credit flowing again."

Source: Yahoo! News: Business | 31 Jan 2009 | 11:07 am

Auto Review: 2009 Ford Escape Hybrid: Delightful runabout for all your errands

For many, the idea of having what seems like 6,000 errands to do is perfectly feasible. For doing them, direct your eyes toward the 2009 Ford Escape Hybrid -- a delightful little runabout that will make those errand days more enjoyable.

Source: MarketWatch.com - Top Stories | 31 Jan 2009 | 11:01 am

Go government, boo business in Davos

Forget big business, this year politicians seem to have all the answers. The forum in this Swiss Alpine hamlet is flooded every year with business leaders, and their solutions to all of...
Source: RSS feed - channel BNewsBusiness | 31 Jan 2009 | 10:48 am

Davos turns to trade amid fears of protectionism

World leaders looking for hope amid recessionary gloom turned their attention Saturday to a long-stalled global trade deal, increasingly seen as a necessary bulwark against the rising...
Source: RSS feed - channel BNewsBusiness | 31 Jan 2009 | 10:28 am

Lagarde warns crisis could provoke social unrest

Christine Lagarde, the French Finance Minister, today warned that the global economic crisis could provoke “social unrest” and echoed Gordon Brown’s caution against countries opting for protectionism to fight the downturn.
Source: Latest Business News from Times Online | 31 Jan 2009 | 10:25 am

Politics, oil declines ignite Venezuela elections

It's election time in election-loving Venezuela, which is perhaps only rivaled by California in its zeal for referendums, and President Hugo Chavez is giving the people a second chance to decide whether he should be allowed to run for office again … and again.

Source: MarketWatch.com - Top Stories | 31 Jan 2009 | 10:00 am

French minister says crisis could cause 'social unrest'

French Finance Minister Christine Lagarde warned Saturday that the world economic crisis could provoke "social unrest." "Social unrest and protectionism are the two major risks of the...
Source: RSS feed - channel BNewsBusiness | 31 Jan 2009 | 9:56 am

Roche confident of success in Genentech bid: paper

ZURICH, Jan 31 (,Reuters) - Swiss drugmaker Roche is confident that it will succeed in its bid for U.S. biotechnology group Genentech Inc , the Swiss drugmaker's chairman was quoted as saying in comments released on Saturday.
Source: Reuters: Business News | 31 Jan 2009 | 9:20 am

Roche confident of success in Genentech bid: paper (Reuters)

Reuters - Swiss drugmaker Roche is confident that it will succeed in its bid for U.S. biotechnology group Genentech Inc , the Swiss drugmaker's chairman was quoted as saying in comments released on Saturday.

Source: Yahoo! News: Business | 31 Jan 2009 | 9:20 am

Roche confident of success in Genentech bid: paper

ZURICH, Jan 31 (,Reuters) - Swiss drugmaker Roche is confident that it will succeed in its bid for U.S. biotechnology group Genentech Inc , the Swiss drugmaker's chairman was quoted as...
Source: RSS feed - channel BNewsBusiness | 31 Jan 2009 | 9:20 am

Roche confident of success in Genentech bid -paper

ZURICH, Jan 31 (,Reuters) - Swiss drugmaker Roche is confident that it will succeed in its bid for U.S. biotechnology group Genentech Inc , the Swiss drugmaker's chairman was quoted as saying in comments...
Source: RSS feed - channel BNewsBusiness | 31 Jan 2009 | 9:15 am

DAVOS-UPDATE 1-Brazil's Petrobras says no oil delays in 2009

DAVOS, Switzerland, Jan 31 (Reuters) - The head of Brazil's state-run energy company Petrobras said there would be no project delays in 2009, bucking a wider trend, and that production was about 2.4 million...
Source: RSS feed - channel BNewsBusiness | 31 Jan 2009 | 9:04 am

TABLE-Sun Pharmaceutical Ind Q3 profit up 28 pct

(Versus the same period a year earlier, in billion rupees unless stated)
Source: RSS feed - channel BNewsBusiness | 31 Jan 2009 | 8:13 am

GDP slides 3.8%, worst since 1982

An inventory buildup promises another poor showing in the current quarter. Obama launches a task force to aid the middle class. ...
Source: RSS feed - channel BNPaperBusiness | 31 Jan 2009 | 8:00 am

Staying in stocks a test of sanity

One month into the new year and the stock market already finds itself in a deep hole.
Source: RSS feed - channel BNPaperBusiness | 31 Jan 2009 | 8:00 am

Roche makes hostile bid for Genentech

The $42.1-billion offer is lower than expected and considered by some a tactic to force negotiations with the biotech company. ...
Source: RSS feed - channel BNPaperBusiness | 31 Jan 2009 | 8:00 am

Children's product sellers get 1-year reprieve on lead testing

The Consumer Product Safety Commission votes to hold off on some requirements that would have forced many firms to spend tens of thousands of dollars to check toys, clothing and other goods. ...
Source: RSS feed - channel BNPaperBusiness | 31 Jan 2009 | 8:00 am

L.A. Times to lay off 300, consolidate sections

As ad revenue drops, stand-alone California pages will merge into main news, meaning one daily press run can be eliminated. Changes will begin the week of March 2. ...
Source: RSS feed - channel BNPaperBusiness | 31 Jan 2009 | 8:00 am

Fewer fans are splurging on Super Bowl bashes

Many recession-wary Americans are scaling back spending on party goods and food. Allen Channel's house is usually...
Source: RSS feed - channel BNPaperBusiness | 31 Jan 2009 | 8:00 am

2008 last hurrah for oil profits?

Exxon and Chevron report their best years ever. But analysts say the earnings gusher could dry up in '09. Despite...
Source: RSS feed - channel BNPaperBusiness | 31 Jan 2009 | 8:00 am

Freddie Mac to keep borrowers in foreclosed homes

Mortgage holders will be allowed to stay on as renters. Freddie Mac, the government-sponsored mortgage finance...
Source: RSS feed - channel BNPaperBusiness | 31 Jan 2009 | 8:00 am

PRESS DIGEST - Washington Post Business - Jan. 31

WASHINGTON, Jan 31 (Reuters) - The Washington Post included the following items on the front page of its business section on Jan. 31. Reuters has not verified these stories and does not vouch for their...
Source: RSS feed - channel BNewsBusiness | 31 Jan 2009 | 6:57 am

China issues citizens coupons to boost spending

With traditional bonuses drying up, many are reluctant to shop for the New Year holiday. With layoffs spreading...
Source: RSS feed - channel BNPaperBusiness | 31 Jan 2009 | 6:45 am

DAVOS-Brazil's Petrobras says no output delays in 2009

DAVOS, Switzerland, Jan 31 (Reuters) - Petrobras Chief Executive Jose Sergio Gabrielli said on Saturday any delays to oil projects would not affect Brazil's 2009 output target and the country would pump...
Source: RSS feed - channel BNewsBusiness | 31 Jan 2009 | 6:29 am

Ray Beauchemin's Letters from Abu Dhabi: Abu Dhabi looks to the sun to go green

ABU DHABI (MarketWatch) -- My walk to work on Saturday mornings takes me by three- and four-story apartment blocks and three- and four-story single-family villas, some of which are landscaped and others that have been given over to nature. Giving a lawn over to nature in North America is an invitation to weeds and clover. Here, it's an invitation to sand. Heck, there's a lot of uninvited sand here, too. It sticks to our windows; it covers our cars.

Source: MarketWatch.com - Top Stories | 31 Jan 2009 | 5:01 am

Stocks to Watch: Stocks in focus for Monday

Among the companies whose shares are expected to see active trade in Monday's session are Anadarko Petroleum Corp., Aflac Inc. and Humana Inc.

Source: MarketWatch.com - Top Stories | 31 Jan 2009 | 5:01 am

Market Snapshot: Bad bank debate may help stocks cast off chill; jobs, autos loom

Progress creating a government structure to absorb banks' rotten assets could provide some relief next week for the stock market, which otherwise faces a tough lineup of woeful corporate outlooks, plunging auto sales and big job losses.

Source: MarketWatch.com - Top Stories | 31 Jan 2009 | 5:01 am

Liquor sales slump -- with the exception of whiskey

Bourbons, and especially the premium brands, are seeing continued growth as sales of other distilled liquors have sagged, particularly at the end of 2008. ...
Source: RSS feed - channel BNPaperBusiness | 31 Jan 2009 | 4:19 am

US economy slumps as world crisis tightens grip

The global economic crisis tightened its grip on the United States which posted its worst contraction in 26 years as grim jobs and earnings data emerged from Japan and Europe. Amid the...
Source: RSS feed - channel BNewsBusiness | 31 Jan 2009 | 4:16 am

Nigerians can sue US drugs firm

A US court allows Nigerian families to sue drugs giant Pfizer in the US, over its alleged role in a drugs testing scandal.
Source: BBC News | Business | World Edition | 31 Jan 2009 | 3:19 am

Sputtering Wall Street awaits Obama stimulus (AFP)

AFP - Wall Street kicks off the month of February with confidence still shaky and investors hoping for a quick government stimulus to counter the worst recession in decades.

Source: Yahoo! News: Stock Markets News | 31 Jan 2009 | 3:17 am

Economy, bank woes drag market to worst January ever

NEW YORK (Reuters) - Stocks closed out their worst January ever with another slide on Friday after data showed the economy contracted at the fastest pace in nearly 27 years in the fourth quarter.
Source: Reuters: Business News | 31 Jan 2009 | 1:52 am

Daschle's tax records under fire

The Senate Finance committee will meet Monday to review the tax records of former Sen. Tom Daschle, President Barack Obama's nominee for secretary of Health and Human Services who, according to sources, didn't pay taxes on a car and driver he had been loaned.
Source: Business and financial news - CNNMoney.com | 31 Jan 2009 | 1:50 am

Taxing Times: New deadline for year-end tax forms may delay early-bird filers

Whether you plan to file early or late, MarketWatch's Early-Bird Tax Guide this weekend can help you get your ducks in a row now.

Source: MarketWatch.com - Top Stories | 31 Jan 2009 | 1:29 am

Small companies 'shedding staff'

Small and medium-sized manufacturers are laying off staff at the fastest rate since the early 1990s, says the CBI.
Source: BBC News | Business | World Edition | 31 Jan 2009 | 1:22 am

3 banks fail in 3 different states

Three regional banks were closed Friday, bringing the total number of failed banks this month to six, as the financial crisis continues to take a toll on small banks nationwide.
Source: Business and financial news - CNNMoney.com | 31 Jan 2009 | 1:20 am

Super Bowl ad game on even in off economy

It may be "game on" in an off economy but the Super Bowl - typically the ad industry's annual showcase of its best and most expensive work - does not seem to be feeling the pinch.

Source: MarketWatch.com - Top Stories | 31 Jan 2009 | 1:20 am

CNN Money Summit: Your questions answered

As part of the first-ever CNN Money Summit, we asked readers and viewers about their pressing economic questions. Then we got experts to weigh in.
Source: Business and financial news - CNNMoney.com | 31 Jan 2009 | 1:17 am

After horrid January, stocks eye stimulus

NEW YORK (Reuters) - Investors are hoping swift action on an economic stimulus plan will boost Wall Street next week after its worst January ever.
Source: Reuters: Business News | 31 Jan 2009 | 1:17 am

After horrid January, stocks eye stimulus (Reuters)

Reuters - Investors are hoping swift action on an economic stimulus plan will boost Wall Street next week after its worst January ever.

Source: Yahoo! News: Stock Markets News | 31 Jan 2009 | 1:17 am

Business Briefs - Friday

Vytorin worries weigh on Schering. The drugmaker fell 4.8% to 17.56 after Leerink Swann cut it to market perform from outperform, saying sales of...

Source: Investor's Business Daily: BUSINESS | 31 Jan 2009 | 1:04 am

Obama Stimulus Plan Encourages Paperless Health Care Records

Government dollar signs for health care technology point 19traight ahead, though the road could stretch on for a while.

Source: Investor's Business Daily: BUSINESS | 31 Jan 2009 | 1:04 am

In Brief - Friday

Owens-Illinois (OI), a maker of glass containers, fell 7.6% to 19 after KeyBanc cut its '09 EPS estimate to $3, below views for $3.59. KeyBanc...

Source: Investor's Business Daily: BUSINESS | 31 Jan 2009 | 1:04 am

Trends & Innovations - Friday

Researchers create cyborg insect

Source: Investor's Business Daily: BUSINESS | 31 Jan 2009 | 1:04 am

An Appetite For Reduction

Even in tough times, people have to eat. Unfortunately for the restaurant business, they don't have to eat out.

Source: Investor's Business Daily: BUSINESS | 31 Jan 2009 | 1:04 am

Ex-Fannie Mae programmer says not guilty of virus (Reuters)

Reuters - A 35-year-old computer programer pleaded not guilty on Friday to charges that he planted a computer virus designed to destroy all the data on 4,000 Fannie Mae computer servers the day he was fired from the company.
Source: Yahoo! News: Business | 31 Jan 2009 | 12:54 am

Maxam hedge fund sues auditors over Madoff losses

NEW YORK (Reuters) - Maxam Absolute Return Fund LP, a hedge fund, on Friday said it filed a lawsuit against auditors Goldstein Golub Kessler LLP and McGladrey & Pullen LLP to recover losses suffered by its investors in investments held by Bernard L. Madoff Investment Securities LLC.
Source: Reuters: Business News | 31 Jan 2009 | 12:53 am

Icahn, Black Bear to nominate Amylin directors

LOS ANGELES (Reuters) - Biotechnology company Amylin Pharmaceuticals Inc on Friday said it was notified of two plans to nominate directors to the company's board: one by entities associated with investor Carl Icahn and another from shareholder Black Bear Fund I.
Source: Reuters: Business News | 31 Jan 2009 | 12:48 am

Want cash to start a biz? Avoid the scams

Grants for small companies are almost as rare as unicorns. Here's how to protect yourself against fraud.
Source: Business and financial news - CNNMoney.com | 31 Jan 2009 | 12:47 am

Stocks' January drop isn't welcome sign for 2009 (AP)

AP - It's been an unusually cold January on Wall Street.

Source: Yahoo! News: Stock Markets News | 31 Jan 2009 | 12:39 am

US set for 'big bang' financial clean-up

The Obama administration is gearing up for a 'big bang' announcement next week that will combine its bank clean-up with measures to reduce homes foreclosures and probably steps to jump-start credit markets
Source: Financial Times - US homepage | 31 Jan 2009 | 12:19 am

Latin American Markets: Brazil finishes lower; Mexico edges up but loses for the month

Brazilian shares slip, with pressure on mining giant Companhia Vale do Rio Doce following its plans for a $1.6 billion assets purchase, while Mexican shares break through losses that followed a report that U.S. economic activity shrank to its lowest levels since the 1980’s.

Source: MarketWatch.com - Top Stories | 31 Jan 2009 | 12:16 am

Steelers in Super Bowl may bring luck to investors (Reuters)

Reuters - Win or lose on Sunday, having Pittsburgh in the Super Bowl could be a good luck charm for the U.S. stock market, according to a light-hearted analysis done to coincide with the biggest NFL game of the year.
Source: Yahoo! News: Stock Markets News | 31 Jan 2009 | 12:11 am

Wall Street suffers worst January

Wall Street suffers its worst January on record as a barrage of bad economic data continues to shake investors' confidence.
Source: BBC News | Business | World Edition | 31 Jan 2009 | 12:10 am

Threat of job losses hangs over bmi as airline reneges on pay rise promise

Bmi, the UK’s second-largest airline, has broken a promise to 5,000 staff that it would honour a pay increase this year and has also warned of possible redundancies.
Source: Latest Business News from Times Online | 31 Jan 2009 | 12:00 am

Obama prepares to unveil plan to rescue US banking industry from $2 trillion hole$

President Obama is preparing to unveil a rescue plan for Wall Street next week which will dig the world’s biggest banking industry out of a $2 trillion hole.$
Source: Latest Business News from Times Online | 31 Jan 2009 | 12:00 am

John Duffield out as Henderson takes over New Star in £115m deal

John Duffield finally parted company with New Star yesterday after the struggling asset manager that he created, listed and ultimately steered into financial difficulties, was sold to Henderson Group, an investments rival, for £115 million in cash and shares. Mr Duffield, who is not expected to return to a quoted fund manager, will leave New Star when the deal is completed in April. Howard Covington, chief executive, and the independent directors will also depart.
Source: Latest Business News from Times Online | 31 Jan 2009 | 12:00 am

Record 9.6% fall in output sparks fear for Japan's future

The depth of the downturn in Japan, the world's second-largest economy, emerged yesterday with industrial production showing a record 9.6 per cent decline last month and unemployment up by 0.5 per cent to a three-year high of 4.4per cent.
Source: Latest Business News from Times Online | 31 Jan 2009 | 12:00 am

Need to know: Misys helped by US ... Serco venture ... Boeing's biofuel

View video and Need to Know interactive heatmap
Source: Latest Business News from Times Online | 31 Jan 2009 | 12:00 am

Thousands poised for 8p-a-month mortgages as lenders caught out by base rate cuts

The 8p-a-month mortgage is set to become a reality for thousands of borrowers next week because of over-generous loan terms offered by banks and building societies in the benign era just before the credit crunch hit.
Source: Latest Business News from Times Online | 31 Jan 2009 | 12:00 am

Foreign exchange trader who lost Allied Irish Bank unit $700m is released$

John Rusnak, the trader who lost Allied Irish Bank nearly $700 million in one of the most notorious frauds of the past decade, has been released from prison, The Times has learnt.$
Source: Latest Business News from Times Online | 31 Jan 2009 | 12:00 am

Tesco dresses up its internet presence to boost the sales of own-brand clothing

Tesco plans to launch a new own-brand clothing website to take on internet fashion retailers such as Asos. The supermarket chain said that the site will sell thousands of items and could be operating in time to stock this autumn's ranges.
Source: Latest Business News from Times Online | 31 Jan 2009 | 12:00 am

Regulators close 3 more small U.S. banks

WASHINGTON (Reuters) - U.S. bank regulators closed small banks in Utah, Florida and Maryland on Friday, bringing the total of U.S. bank failures this year to six.
Source: Reuters: Business News | 30 Jan 2009 | 11:59 pm

After Hours: Tech stocks edge higher after day-session losses

Technology stocks tick higher following rough going during the day as investors digest more poor financial results and find little comfort from the better-than-expected reading on quarterly U.S. economic activity.

Source: MarketWatch.com - Top Stories | 30 Jan 2009 | 11:57 pm

Regulators close three more banks as failure list grows

Federal regulators closes three banks in a single day Friday, as the ongoing credit crisis shows no signs of abating.

Source: MarketWatch.com - Top Stories | 30 Jan 2009 | 11:42 pm

Worst January ever for Dow, S&P 500

The Dow Jones industrial average and Standard & Poor's 500 finished their worst January ever Friday as investors eyed abysmal reports on economic growth and quarterly earnings.
Source: Business and financial news - CNNMoney.com | 30 Jan 2009 | 11:41 pm

Stocks stumble as investors fear worsening economy (AP)

AP - Wall Street ended its worst January ever by stumbling again over the banking system and the economy.

Source: Yahoo! News: Stock Markets News | 30 Jan 2009 | 11:41 pm

Job cuts top 100,000 for the week

In a brutal week for the job market, an assortment of companies across various industries announced more than 100,000 job cuts.
Source: Business and financial news - CNNMoney.com | 30 Jan 2009 | 11:39 pm

White House, Senate take aim at Wall St pay

WASHINGTON (Reuters) - The White House pledged action against "irresponsible" bonuses for executives at bailed-out Wall Street companies as a Democratic senator unveiled legislation to limit their compensation to $400,000 a year.
Source: Reuters: Business News | 30 Jan 2009 | 11:37 pm

California's cash crunch: IOUs coming

The world's eighth largest county is on the verge of issuing IOUs.
Source: Business and financial news - CNNMoney.com | 30 Jan 2009 | 11:34 pm

Merrill paying $1M fine in settlement with SEC (AP)

AP - Merrill Lynch on Friday agreed to pay a $1 million civil fine to settle with federal regulators who accused the company of misleading pension consulting clients and failing to disclose conflicts of interest in recommending the use of its affiliated services.
Source: Yahoo! News: Stock Markets News | 30 Jan 2009 | 11:32 pm

US Republican party picks first black chairman

Michael Steele pledged to revive the Republican party outside its southern heartland after winning election as the first African-American chairman of the Republican National Committee
Source: Financial Times - US homepage | 30 Jan 2009 | 11:27 pm

Dealbreaker Seeks A New Writer (or Writers)

Greetings, DealBreaker readers. My name is David Lat, and I'm the managing editor of Breaking Media, parent company of this fine site (as well as Above the Law and Fashionista).

Back in October, we mentioned we were looking for an additional writer (or writers). In case you were wondering, we've not yet filled the position. Because Bess and Equity Private have been doing such an excellent job -- January will be a record month for DealBreaker in terms of traffic -- we haven't felt much pressure on this front. If it ain't broke, don't fix it.

But we are once again thinking of hiring more talent, given how the site is thriving (and how many Wall Streeters might be looking for new jobs right now). Would you be interested (or would you know anyone who might be)?

This is a full-time position, with standard benefits -- health insurance, a 401(k), abuse from anonymous commenters. If you're looking to transition from Wall Street to writing, this is an excellent opportunity.

If you'd like to apply for this position, please email us at jobs at dealbreaker dot com (subject line: "DealBreaker Writer Application"). Please describe yourself and your background, what you have to offer DealBreaker, and your vision for the site. Feel free to include a résumé, a writing sample, a link to your own blog (if you have one), or any other information relevant to evaluation of your application.

Separately, we're thinking about hiring a part-time writer or writers to cover the world of accounting, with a focus on the Big Four. If this opportunity interests you, please email us also at jobs at dealbreaker dot com (but with this subject line: "Accounting Writer Application").

Thanks for your interest. We look forward to hearing from you.

Source: Dealbreaker | 30 Jan 2009 | 11:21 pm

Write-Offs: 01.30.09

$$$ Egret-smuggler pleads not guilty. [FINalternatives]

$$$ Spitzer Madams' Fortunes: One Goes Up, the Other Goes Down [NYP]

$$$ Jobs of the Day: Morgan Stanley needs an equity research associate. [DB Career Center]

Source: Dealbreaker | 30 Jan 2009 | 11:17 pm

Motley Fool's Gardners Say Time Horizon Crucial to Investing

Source: Bloomberg - All Podcasts | 30 Jan 2009 | 11:16 pm

GM could face U.S. bailout tax hit, seeks changes

WASHINGTON (Reuters) - General Motors Corp could face a multibillion-dollar tax hit under its $13.4 billion federal bailout, a scenario the automaker faces just weeks before it must file a restructuring plan with the government.
Source: Reuters: Business News | 30 Jan 2009 | 11:13 pm

GM could face U.S. bailout tax hit, seeks changes (Reuters)

Reuters - General Motors Corp could face a multibillion-dollar tax hit under its $13.4 billion federal bailout, a scenario the automaker faces just weeks before it must file a restructuring plan with the government.

Source: Yahoo! News: Business | 30 Jan 2009 | 11:13 pm

Kerzner Says Plans for Las Vegas Hotel Are `On Hold'

Source: Bloomberg - All Podcasts | 30 Jan 2009 | 11:12 pm

Blackburn Says Start Recovery with Tax Reductions

Source: Bloomberg - All Podcasts | 30 Jan 2009 | 11:09 pm

Economy, bank woes drag market to worst January ever (Reuters)

Reuters - Stocks closed out their worst January ever with another slide on Friday after data showed the economy contracted at the fastest pace in nearly 27 years in the fourth quarter.

Source: Yahoo! News: Stock Markets News | 30 Jan 2009 | 11:06 pm

Economy, bank woes drag market to worst January ever (Reuters)

Reuters - Stocks closed out their worst January ever with another slide on Friday after data showed the economy contracted at the fastest pace in nearly 27 years in the fourth quarter.

Source: Yahoo! News: Business | 30 Jan 2009 | 11:06 pm

How the major market indexes fared (AP)

AP - Stocks slumped for a second straight day Friday as investors, already on edge about the worsening economy, were further rattled by a report that Washington's plans to help banks may have hit a snag.

Source: Yahoo! News: Stock Markets News | 30 Jan 2009 | 10:58 pm

How the major market indexes fared (AP)

AP - Stocks slumped for a second straight day Friday as investors, already on edge about the worsening economy, were further rattled by a report that Washington's plans to help banks may have hit a snag.

Source: Yahoo! News: Business | 30 Jan 2009 | 10:58 pm

No More Than The President Of The United States

On further reflection, we aren't so opposed to "fairing up" executive compensation to be more in line with our national executive. Senator Claire McCaskill might be on to something here.

Let's see here...

Cash Compensation:
Salary: $400,000

Cash Subtotal: $400,000

Room and Board:
55,000 square foot mansion, in historic Washington, D.C.: @ $100/sqft: $5,500,000/yr
Personal Chef / Kitchen Staff: $300,000 / year
Other Servants / Attendants: $500,000 / year

Subtotal: $6,300,000

Discretionary Use Of Private Aircraft:
(One of 2 Boeing 747-200Bs "Air Force One"):
Annual Costs: 120 hours @ $65,000/hr: $7,800,000
Annual Costs: 700 hours @ $65,000/hr: $45,500,000

Helicopter Fleet:
Annual Costs: 50 hours @ $5200/hr: $260,000

Aircraft Subtotal: $8,060,000
Aircraft Subtotal: $45,760,000

Other Personnel:
Personal Driver On Retainer (Defensive Tactical Driving Trained) @ $300/day $109,500
Personal Body Guards 35 @ $500/day $6,387,500
Use Of Personal Car 60 days @ $2000/day $120,000

Personnel Subtotal: $6,617,000

Annual Benefits Total: $59,077,000

Four Years of Same: $236,308,000

Pension And Related Benefits:
Present value of Pension Benefits ($200,000 per year): $2,251,556

Total Benefits: $238,559,556

Average Annual Benefits: $59,639,889

Also, think we need to strongly consider "pay for performance" here. This is a lot of compensation and I think clawbacks if the executive fails to pull us out of this recession are called for. I propose we institute a temporary "efficiency in government court" empowered to enforce pay for performance in the executive branch. The time to reward these employees for non-performance is over. Some accountability needs to be put in place. We won't have them kicking sand in the face of taxpayers any longer.

Source: Dealbreaker | 30 Jan 2009 | 10:55 pm

AT&T freezes 120,000 salaries

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 30 Jan 2009 | 10:54 pm

Bonus Watch '09: BAC

Numbers came out today for most groups at Bank of Amerillwide, including capital markets and investment banking, with debt portfolio management coming next week.

- First year associates: 10k stub

-2nd/3rd year associates, VPs, MDs: down 75-80 percent, across the board, with associates to principals in global structured products receiving zero (and some MDs receiving basically zero); Conduit group-- which had a record year-- got zero; Real estate syndications got zero.

*We're reminded that structured finance got zero last year as well. Give it up for just base, no bonus for 24 straight months and counting!

Source: Dealbreaker | 30 Jan 2009 | 10:28 pm

GDP sees biggest drop in 27 years

WASHINGTON (Reuters) - The U.S. economy shrank at its fastest pace in nearly 27 years in the fourth quarter, government data showed on Friday, sinking deeper into a recession that the White House said demands urgent action.
Source: Reuters: Business News | 30 Jan 2009 | 10:11 pm

GDP sees biggest drop in 27 years (Reuters)

Reuters - The U.S. economy shrank at its fastest pace in nearly 27 years in the fourth quarter, government data showed on Friday, sinking deeper into a recession that the White House said demands urgent action.

Source: Yahoo! News: Business | 30 Jan 2009 | 10:11 pm

VIX Index Advances 5.2% to Close at 44.84

Source: Bloomberg - All Podcasts | 30 Jan 2009 | 10:03 pm

Julian Discusses Long-Term Strategy for ETF Investments

Source: Bloomberg - All Podcasts | 30 Jan 2009 | 10:02 pm

They'll Drink to That

Move over, microbreweries. Micro-distilleries are bellying up to the bar.

While still popular, microbrewed beer is no longer the novelty it once was. Handcrafted vodka, brandy, whiskey, gin, bourbon and rum—on the other hand—are still rare, with distinctive flavors and in growing demand.

The limited-quantity spirits are gradually showing up on store shelves, as craft distilleries spread across the country. Not coincidentally, Colorado—well-known for its enormous batch of microbreweries—is among the states leading the new micro-rush with more than a dozen craft distilleries, most of them producing vodka.

Standing out among the newcomers is Stranahan’s Colorado Whiskey, which is putting out 1,500 bottles a week from an 8,000-square-foot industrial space a couple blocks north of Coors Field in Denver.

“Colorado needed a whiskey—it’s that kind of state,” says Stranahan’s manager and founder, Jess Graber. “The cowboys weren’t out here drinking vodka.”

The whiskey is distributed throughout Colorado and in 34 other states, plus Japan and The Netherlands. Total sales have reached 60,000 bottles a year, he said.

The small-batch whiskey, which is sold in 750-milliliter bottles for $54.95, is becoming so popular that Graber says he’s planning to double production this year.

He calls Stranahan’s Colorado Whiskey the first and only “Colorado-born premium whiskey” that uses unique, patent-pending distilling techniques. The result is a whiskey with a bourbon amber-red color, but a lighter, smoother taste.

“It’s the only whiskey like it in the world,” Graber says of his creation, which was years in the making. In fact, he says, “I have been conducting practical experiments with distillation since 1972.”

Apparently he’s not the only one taking what used to be a hobby to the marketplace. Bill Owens, head of the California-based American Distilling Institute trade organization, said that six years ago, “I couldn’t find 60 of them … in the whole country. Now there are 156 craft distilleries.”

He said the states with the largest numbers are Colorado, California and Michigan—all places where microbreweries took off in a big way as well.

Owens said most small-batch distilleries are making vodka, because it’s the easiest, but “the future is brown spirits” such as whiskey and brandy.

He also cautions any newcomers that “there’s a lot of misinformation out there,” and it’s not a quick or easy business to start.

Adding to that is the fact that while people can “practice” at home making beer or wine, it’s illegal to make spirits at home.

Why is that law still on the books?

“It’s the moonshine mythology,” Owens says. “It’s just part of the culture” that puts a bad light on “making crazy spirits under the moon.”

But he said the micro-distillery trend is here to stay, in part because microbreweries paved the way not only in terms of entrepreneurship but because they brought small-batch equipment to the marketplace.

Plus, Owens says, “There’s a tremendous pride in making something from scratch.”

 Stranahan’s Colorado Whiskey was launched with just such a sense of pride in December 2002, Graber said, with himself as majority owner plus 10 investors—family and friends. Distillation started in March 2004, and the first bottle sold in May 2006.

Last year, the company was “running in the black” for the first time, Graber said.

Stranahan’s recently added a second product—a whiskey called Colorado Snowflake, since “no two snowflakes are alike,” Graber says. Snowflake, which sells for $75 a bottle, is aged differently than Stranahan’s regular whiskey, which “adds a new dimension,” he says.

Prior to getting into the whiskey business, Graber was a building contractor in the Roaring Fork Valley of western Colorado, where he also served as a volunteer fireman. It was the latter that led to a fateful meeting in ill-fated circumstances—which eventually led to Stranahan’s founding.

A barn fire in Woody Creek left the structure destroyed, but introduced the barn’s owner—George Stranahan, owner of Flying Dog Brewery—to Graber. The two found they had something in common in crafting alcoholic beverages, and Flying Dog was the first to make mash for Graber’s whiskey.

As for Stranahan’s whiskey ingredients, Graber isn’t exaggerating when he says they’re all Rocky Mountain. The barley’s grown in Colorado, Wyoming, Utah, Idaho and Montana. Oskar Blues Brewery’s Longmont facility now makes the mash. The water used in the distilling comes from Eldorado Springs.

The distilling process isn’t all that different from the oldtime way of making moonshine, albeit with more precision and safety procedures. Stranahan’s Colorado Whiskey is aged for two to four years in charred, American white oak barrels in a temperature- and humidity-controlled warehouse. Then more Eldorado Springs water is added to take it down to 94 proof (a bit higher than usual, as most whiskeys are 80 proof).

The downtown Denver facility currently is bottling six barrels of whiskey a week—nearly 320 gallons.

But as Gruber looked over the hundreds of barrels in the nearly filled warehouse, he said, “Expansion is a priority. We’re getting very crowded.”

 

Related Links
You Can Can Craft Beer
Sweet Wheat
Revolution in a Bottle



Source: Portfolio.com: Top 5 | 30 Jan 2009 | 10:00 pm

Japan's NEC to lose 20,000 jobs

Japanese electronics giant NEC says it will be cutting 20,000 jobs worldwide by March 2010, as Hitachi loses up to 7,000.
Source: BBC News | Business | World Edition | 30 Jan 2009 | 9:56 pm

Breaking down the bad bank plan

The latest plan to stop the bleeding in the financial markets is to bundle up the bad assets and deposit them into a "bad bank." Marketplace's senior editor Paddy Hirsh explains the plan.
Source: Marketplace Money | 30 Jan 2009 | 9:49 pm

Finding the value in vintage

Classic style seems to be one of the few things able to beat inflation and financial slumps. Marketplace's Eve Troeh discovers that the old things lying around her house can mean lots of new money.
Source: Marketplace Money | 30 Jan 2009 | 9:49 pm

Clearing up 2008 tax questions

Many people have questions about how to reconcile such a dramatic economic year as they put together their tax returns for 2008. Host Tess Vigeland asks tax expert Frank Degan to clear up some of the confusion.
Source: Marketplace Money | 30 Jan 2009 | 9:49 pm

Day in the Work Life: Brewer

On this week's "A Day in the Work Life," we grab a cold one with Luther Paul, head brewer at Lakefront Brewery.
Source: Marketplace Money | 30 Jan 2009 | 9:49 pm

Getting Personal

Host Tess Vigeland and economics editor Chris Farrell answer listener questions about retirement savings, 529 plans, financial education, early investing and reversing bad habits.
Source: Marketplace Money | 30 Jan 2009 | 9:49 pm

When businesses go bankrupt

With corporate bankruptcies in the news, what happens to your health care coverage if your whole company goes belly up? Host Tess Vigeland asks Kiplinger's Kimberly Lankford.
Source: Marketplace Money | 30 Jan 2009 | 9:49 pm

Feeling the bite of COBRA

COBRA allows former employees to pay to continue their health care coverage after they've left their job. But as Sally Herships reports, the costs of the program can make it difficult for some families to see the benefits.
Source: Marketplace Money | 30 Jan 2009 | 9:49 pm

Straight Story: A new life for old ideas

Financial pundits are quick to say that the current crisis has changed everything, but Marketplace's economics editor Chris Farrell says we shouldn't be so eager to throw out the rule book.
Source: Marketplace Money | 30 Jan 2009 | 9:49 pm

Aid for the 'home rich but cash poor'

With retirees living longer, it's harder to make ends meet with savings and Social Security. Marketplace's Jeremy Hobson explains how reverse mortgages let retirees use the value of their home to help pay the bills.
Source: Marketplace Money | 30 Jan 2009 | 9:49 pm

FHA offers home buyers a leg up

Many potential buyers feel they don't have the credit or cash to get into the real estate market. But as Marketplace's senior business correspondent Bob Moon reports, an old lending program could give them the help they need.
Source: Marketplace Money | 30 Jan 2009 | 9:49 pm

Make Way For The Overseer!

Germany and Britain called on Friday for a global economic watchdog with strengthened powers to prevent rather than react to financial crises that can spiral into worldwide recession.

Cooperation amongst international financial institutions has failed to ward off the worst financial crisis in decades and a new charter should be forged, German Chancellor Angela Merkel told the World Economic Forum in this Swiss ski resort.

"This may even lead to a U.N. Economic Council, just as the Security Council was created after the Second World War," she said.

Will Russia and China get a veto?

Germany, UK urge global economic overseer [Reuters]

Source: Dealbreaker | 30 Jan 2009 | 9:48 pm

New York - the next housing bust?

The Masters of the Universe have been dethroned. Now the question is just how much Wall Street's meltdown is going to hurt the city of New York and, by extension, its high-priced housing market.
Source: Business and financial news - CNNMoney.com | 30 Jan 2009 | 9:46 pm

Who needs a big raise? SEC staffers

Here's a simple idea to prevent Wall Street meltdowns from happening again in the future, brought to you courtesy of the World Economic Forum in Davos: Start paying regulators much, much better.
Source: Business and financial news - CNNMoney.com | 30 Jan 2009 | 9:39 pm

Earnings Season, Ford's Cash Burn, Super Bowl XLIII

Source: Bloomberg - All Podcasts | 30 Jan 2009 | 9:35 pm

TSX finishes week in broad-based decline (Reuters)

Reuters - Toronto's main stock index fell more than 1 percent on Friday in broad-based weakness, as economic worries weighed on nearly all sectors.
Source: Yahoo! News: Stock Markets News | 30 Jan 2009 | 9:17 pm

The 52-Week Low Club (RF)(SNV)(IP)(FITB)(CENX)

Source: 24/7 Wall St. | 30 Jan 2009 | 9:05 pm

Bank Of Amerillwide Will Shut Down Your Job-Seeking, Knowledge-Seeking, Socializing Asses

To: Global Investment Banking, Global Markets Group, Registered Global Commercial Banking & Global Product Solutions Associates, and Registered Technology & Operations Support Partners

From: GCIB Compliance & Operational Risk Management and GCIB Legal

Subject: Compliance Advisory - Block of Social Networking Sites, Wikis and Blogs

Source: Dealbreaker | 30 Jan 2009 | 9:05 pm

On the Ball: Sunday's Super Bowl, Coaching in the NFL

Source: Bloomberg - All Podcasts | 30 Jan 2009 | 9:04 pm

Germany plans individual 'bad banks'

The toxic assets of troubled German banks will be spun off into separate 'bad banks', instead of a national one, under a new government plan
Source: Financial Times - US homepage | 30 Jan 2009 | 8:55 pm

Ponzi Schemes Hard to Detect at Firms Not Registered at SEC

Source: Bloomberg - All Podcasts | 30 Jan 2009 | 8:53 pm

Your Asses: Possibly Capped

Pay and bonuses for executives at companies receiving federal bailouts would be limited in total to the U.S. president's $400,000 salary, and a court would be created to restrain their "massive self-indulgences," under legislation introduced by two senators.

"We have a bunch of idiots on Wall Street that are kicking sand in the face of the American taxpayer" by taking multimillion-dollar bonuses, said Democratic Senator Claire McCaskill of Missouri. Her proposed $400,000 pay cap for executives would cover salary, bonuses and stock options.

Bill Would Cap Salaries at Companies Taking Bailout [Bloomberg]

Source: Dealbreaker | 30 Jan 2009 | 8:52 pm

Regulators Vote Down Capital Relief for Life Insurers

Source: Bloomberg - All Podcasts | 30 Jan 2009 | 8:50 pm

Hear: Obama Tests Keynes

Today on Planet Money:

-- Justin Ritchie of Charlotte, North Carolina, bought the living room set pictured above from a Craiglist ad. The seller, he says, was a Bank of America employee who decided now would be a good time to return to India.

-- When Super Bowl 43 is finished, the host city of Tampa can expect to count up a $150 million boost to its economy. But economist Philip Porter of the University of South Carolina tells Mike Pesca there's no way that's true.

-- President Barack Obama says that only government can pull America out of a recession this severe. Obama calls his plan for stimulus spending of well more than $800 million a new idea, but Adam Davidson and Alex Blumberg say this kind of public spending relies on an old theory. John Maynard Keynes wrote it up in 1936 -- and this recession marks its first real-world test.

Bonus: Results of our Name the Crisis poll, after the jump.

The name of the crisis is:

PONZICONOMY!!!!!

True confession: I voted for Economageddon, but wanted Great Recession to win.

Download the podcast; or subscribe. Intro music: The Gorillaz' "Dare." Find us: Twitter/ Facebook/ Flickr.

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Source: NPR Blogs: Planet Money | 30 Jan 2009 | 8:43 pm

Motley Fool's Gardners Say Take Emotion Out of Stock Choices

Source: Bloomberg - All Podcasts | 30 Jan 2009 | 8:41 pm

U.S. business group opposes "Buy American" plan

WASHINGTON (Reuters) - A top U.S. business group stepped up efforts on Friday to kill a "Buy American" provision that has angered U.S. trading partners, and the White House said it was reviewing its position on the measure.
Source: Reuters: Business News | 30 Jan 2009 | 8:40 pm

U.S. business group opposes "Buy American" plan (Reuters)

Reuters - A top U.S. business group stepped up efforts on Friday to kill a "Buy American" provision that has angered U.S. trading partners, and the White House said it was reviewing its position on the measure.

Source: Yahoo! News: Business | 30 Jan 2009 | 8:40 pm

Obama calls recession a disaster

President Obama calls the recession a "continuing disaster" for the US and urges immediate action.
Source: BBC News | Business | World Edition | 30 Jan 2009 | 8:40 pm

US officially in recession as economy shrinks 3.8pc

The US economy suffered its weakest three months for 27 years at the end of 2008 as the global recession reduced output and quelled demand.
Source: Telegraph Finance | 30 Jan 2009 | 8:39 pm

Exxon and Chevron made 6m an hour amid record profits

Exxon Mobil and Chevron the two biggest oil companies in the world made a combined profit of almost 6m £4.1m an hour in the final quarter of 2008.
Source: Telegraph Finance | 30 Jan 2009 | 8:37 pm

Honda's four-month break begins

Staff at Honda in Swindon begin a four-month break from work as an extended shutdown takes effect.
Source: BBC News | Business | World Edition | 30 Jan 2009 | 8:30 pm

Davos Man is unsuited to the new world

"I'd like to congratulate Stephen Green" says Tony Blair leaning across the stage towards the HSBC chairman. "We must congratulate him for being one of the few bankers willing to come out in daylight hours."
Source: Telegraph Finance | 30 Jan 2009 | 8:21 pm

Banker warns of risk of political interference

The bail-outs of Citigroup and Bank of America could distort the market if the US lenders succumb to political pressure when making lending decisions, a senior executive at JPMorgan Chase has warned
Source: Financial Times - US homepage | 30 Jan 2009 | 8:19 pm

US Treasury rethinks 'bad bank' plan

The US Treasury may drop its plan to buy up all of the major financial institutions' toxic assets in favour of a twopartscheme aimed at preventing further falls in the value of banks themselves.
Source: Telegraph Finance | 30 Jan 2009 | 8:19 pm

Top SEC officials to testify at Madoff hearing (Reuters)

Reuters - Five top Securities and Exchange Commission officials are expected to testify at a Congressional hearing into why regulators missed Bernard Madoff's alleged $50 billion fraud.
Source: Yahoo! News: Stock Markets News | 30 Jan 2009 | 8:16 pm

Morgan Stanley and Goldman Sachs mull more job cuts

Morgan Stanley and Goldman Sachs are considering fresh job cuts as the focus on controlling costs within the banking sector intensifies.
Source: Telegraph Finance | 30 Jan 2009 | 8:13 pm

Julian Robertson Stays Very Bearish, With Picks (GS, V, MA, PTY, PCN)

Source: 24/7 Wall St. | 30 Jan 2009 | 8:04 pm

Brunswick spinners in hot water for putting the P into PR

Source: Telegraph Finance | 30 Jan 2009 | 8:03 pm

Exxon again sets profits record

The oil and gas group, the world's largest company by market capitalisation, said it would continue its share buybacks in the first quarter of 2009 at an only slightly lower rate than last year
Source: Financial Times - US homepage | 30 Jan 2009 | 7:53 pm

Santander presses clients on Madoff offer

The Spanish bank has given its clients 48 hours to accept or reject its offer of partial repayment for losses incurred from investments made with alleged fraudster Bernard Madoff
Source: Financial Times - US homepage | 30 Jan 2009 | 7:51 pm

Charlie Gasparino Is Hearing Things About The Good Bank/Bad Bank Plan

Lots and lots of things (and stuff). Some of it conflicting, some not. All of it fluid. Sayeth Gasparino:

I can't remember the Treasury Department bailing out Steve Cohen and Art Sandberg. They're bailing out Citigroup and Bank of America and the bailout plan they have on the table right now, at least one that's been recently teed up in the press which is essentially this aggregator bad bank where you buy all the bad assets between $1 and 2 trillion. It's been leaked out they're looking to do this.

This thing, according to sources, telling CNBC, this thing is now officially been put on hold. It's hit a major snag. They can't figure out how exactly to make it work. It was the same problem back in September when we broke the story about the TARP when the market went up 500 points because it makes great conceptual sense. If the government cancome in and buy up all the bad stuff off the balance sheets of all the big banks. If this stuff can trade up it's worth 50 cents on a dollar and not 22 cents on the dollar. Everybody's happy.

Making that thing work has proven very difficult. The Treasury Department, the FDIC and the Feds recently, the last couple of days, have been having meetings with senior CEOs at the major Wall Street firms to price the stuff sold to this aggregator bank. You know, they're more confused now than ever before. The feeling I get, at least these talks are ongoing. There was talk about a meeting this weekend with all the CEOs to try to do this thing. I heard that. That is not happening, at least as of 10 minutes ago. No meeting called. No way Wall Street expects that meeting to be called. They can't figure out how to make this thing work. The pricing is at issue. If you hold the stuff, Wall Street holds it on the balance sheet, they can mark it up to their model 50 cents on the dollar. Or they sell it, the market says it's 22 cents on the dollar. If the government buys it at 22 cents, most of the banks would take major losses. We'll be back to where we were a couple of weeks ago. If the government buys it at 50 cents on the dollar, the taxpayer could be taking it on the chin. That's the problem we have here. While they may shelve this aggregator bank, they may come up with some other alternative like insurance or some sort of guarantees on this stuff blanket across the board.

Source: Dealbreaker | 30 Jan 2009 | 7:49 pm

Has Lewis' Time Come?

We suppose that just by asking the question the Financial Times seems to think so. To wit:

There is a popular cry for Ken Lewis to do a far, far better thing than he has ever done. But why should the boss of Bank of America's head roll? There are two thrusts to the argument. The first is retrospective: Mr Lewis should be punished for inadequate due diligence before buying Merrill Lynch, which lost $15.3bn last quarter and sent BofA's shares tumbling. The second argument looks ahead: Mr Lewis has so inflamed employee passions at both BofA and Merrill that he can no longer lead the combined bank.

Well fine. If the court of Bank of American Merrilwide can vote on it, so can Dealbreaker.

Bank of America's CEO [The Financial Times]

Source: Dealbreaker | 30 Jan 2009 | 7:45 pm

MDC agrees to join Mugabe government

Zimbabwe's opposition has bowed to pressure and agreed to join a national unity government with Robert Mugabe in a last-ditch effort to halt a humanitarian catastrophe
Source: Financial Times - US homepage | 30 Jan 2009 | 7:21 pm

Could Britain become another Iceland?

Critics are questioning Britain's second multibillion-pound bailout of its banks. Some say another bailout is unnecessary and could make the U.K. the next Iceland -- a bankrupt nation. Stephen Beard reports.
Source: Marketplace | 30 Jan 2009 | 7:19 pm

Leaders in Davos discuss politics, trust

World leaders converged in Davos, Switzerland, this week for the World Economic Forum. But there was one notable absence -- the United States. Kai Ryssdal speaks with Bloomberg's Tom Keene about the happenings in Davos.
Source: Marketplace | 30 Jan 2009 | 7:18 pm

Weekly Wrap: From bad to worse

The GDP number was pretty bad and things could get worse. Kai Ryssdal talks about the GDP and nationalization with Portfolio.com's Felix Salmon and The Atlantic's Meghan McArdle.
Source: Marketplace | 30 Jan 2009 | 7:18 pm

Program to help foreclosed borrowers

In an effort to slow evictions resulting from the housing crisis, Freddie Mac is starting a new program to let homeowners and tenants stay in foreclosed homes. Will private lenders follow suit? Nancy Marshall Genzer reports.
Source: Marketplace | 30 Jan 2009 | 7:18 pm

Gordon Brown's pledge to create 'British jobs for British workers' is another regret

Gordon Brown was always going to regret his pledge to create: "British jobs for British workers".
Source: Telegraph Finance | 30 Jan 2009 | 7:17 pm

Musical toothbrushes could be EMI's saviour

EMI the music group behind Lily Allen had to pay £125m in interest payments in the six months to September 30 and suffered a loss of £155m but insists that musical toothbrushes and computer games will help revive its fortunes.
Source: Telegraph Finance | 30 Jan 2009 | 7:04 pm

5 Steps to Fix the Banks

As the liquidity crisis continues, the problem is clear—it's the solution that remains opaque.

The problem with the U.S. banking system is simple: It's largely insolvent. Banks have far too little capital to supply the credit needed to finance recovery let alone growth.

The insolvency problem is centered around so-called "toxic" or troubled assets that banks hold in great amount and which are today worth far less than cost—generally securitized residential home loans.

But the problem of insolvency is centered around toxic assets only in the sense that the problem of a burning house is "centered" around the place the fire started.

As Congressman Henry Steagall said the last time we faced a severe depression, once a fire is raging, the most important issue is how to put it out—not to locate the point of origin.

The United States must provide "rescue capital" to its banks and needs to do so now because private capital markets cannot. However, rescue capital should be provided only on terms that maximize the prospect of recovering it along with a full and fair return. Governmental capital must not be provided to subsidize current investors in these institutions or to relieve the institutions themselves from past errors.

How then can we swiftly recapitalize the banking system? Here are five simple principles that should guide the effort:

1. If a bank is nearing insolvency (or is already insolvent) and seeks rescue capital from the government, that capital should be provided only on terms at least as favorable to taxpayers as those that a stable and thriving private capital market would demand. In other words, we should insist on terms at least as favorable as those that private investors typically demand to refinance an imperiled business trying to avoid liquidation in normal economic circumstances.
   
   If new capital is not available to banks from private sources, including importantly rights offerings addressed to their incumbent shareholders, then the rescue capital provided by government must obtain at least the rights and preferences that fresh capital routinely receives in workouts.



2. These structural terms are well understood and certainly include:
   
   
   • Full and preferential recovery of all new capital along with a risk-adjusted rate of return before anything is paid to incumbent or "dead" capital
   
   
   • Governance controls and rights giving the new capital a super-majority of seats on the board of directors that shifts to the providers of the new money the right to control the hiring, firing and compensation of executives and, in particular, the CEO and senior leadership team and
   
   
   • The right of the board to sell or merge the business with a "times-money" liquidation preference in favor of new capital.
   
   There is no basis for providing fresh capital to imperiled banks without these traditional and routine terms.



3. The government should not acquire toxic or troubled assets at above-market prices. Doing so is perverse. Such a policy provides new risk capital in direct proportion to the recipient's past foolish investment decisions.
   
   Buying mortgage-backed securities at a premium to market, for example, is payment for error—the banks with the largest holdings of the worst assets and their incumbent investors get a larger subsidy than do those that resisted such assets. That makes no sense and not only creates moral hazard—it celebrates it.



4. Rescue finance under these standard terms is far superior to formal nationalization or receivership when that means assuming total direct operating control of institutions as complex as, say, Citibank or Bank of America—especially if the goal is to immediately empower those institutions to lend again.
   
   The government has its hands full and, in any event, lacks any comparative advantage in managing vast and complex financial institutions. The board of each bank rescued should hire, motivate and compensate independent senior executives, not government employees, to run the bank.



5. There must be a clear and immutable deadline for banks to seek governmental rescue finance. The rescue program must force the banks immediately to come to terms with their financial condition and end the appearance of solvency which leads to dangerous "last period" problems and, in any event, doesn't provide needed liquidity.
   
   If an imperiled bank cannot obtain the capital it needs from the private market it must seek rescue capital from the government right now—say in the 60 to 90 days following the launch of a rescue finance program. After that, insolvency means seizure and liquidation or forced merger, all without prospect of any financial recovery for incumbent investors.
   
   This mandatory pressure is designed to avoid banks trying to hang on in the hope things will somehow work out for their investors. We need well-capitalized banks to create liquidity and we need them now.

If the government follows these simple principles we may be able to create a solvent banking system swiftly enough to prevent a long depression. If we succeed, the U.S. and its citizens get repaid fully for the risk taken before incumbent investors recover anything.

These are the standard terms, and we have no time to waste.Related Links
The Urgent Financial Crisis Facing Obama
Why Nationalization is the Best Alternative
The Right Kind of Bailout



Source: Portfolio.com: Top 5 | 30 Jan 2009 | 7:00 pm

Roche launches hostile bid for Genentech

Swiss pharmaceutical group appeals directly to shareholders in $42bn move to buy the 44 per cent of the Californian biotech group's shares it does not already own
Source: Financial Times - US homepage | 30 Jan 2009 | 6:58 pm

IPO FILING: OpenTable

Source: 24/7 Wall St. | 30 Jan 2009 | 6:52 pm

Exxon's pumping profit in downturn

Exxon Mobil's fourth-quarter earnings fell 33% from a year ago, but it still reported a record profit for 2008. What's it doing that other companies aren't? Sam Eaton reports.
Source: Marketplace | 30 Jan 2009 | 6:49 pm

House GOP explains 'no' stimulus vote

House Republicans, none of whom voted for President Obama's stimulus plan, are mounting a campaign to defend their positions as pressure from critics and constituents builds. Jeremy Hobson reports.
Source: Marketplace | 30 Jan 2009 | 6:49 pm

GDP numbers signal more slowdown

The U.S. economy suffered its biggest slowdown in more than 25 years, according to last quarter's GDP figures. And with inventory piling up and consumers slow to buy new things, the outlook's not good. Mitchell Hartman reports.
Source: Marketplace | 30 Jan 2009 | 6:49 pm

Tony Tyler: plane speaking from a merger sceptic

Hong Kong's chief pilot tells Alistair Osborne why an airline can be part of Oneworld without doing a deal with BA
Source: Telegraph Finance | 30 Jan 2009 | 6:44 pm

Davos is all a twitter with Wen and Vlad

William Lewis the Editor of The Daily Telegraph discusses his week at the World Economic Forum in Davos.
Source: Telegraph Finance | 30 Jan 2009 | 6:43 pm

Amazon Sales Jump 18 Percent Despite a Retail Slump (NewsFactor)

NewsFactor - Brick-and-mortar stores may have had a terrible 2008, but Amazon thrived. The giant online retailer said its sales in the fourth quarter were up 18 percent to $6.7 billion, compared to $5.67 billion in the same quarter a year ago.
Source: Yahoo! News: Business | 30 Jan 2009 | 6:34 pm

Honda cuts outlook for fourth time

Slumping sales and strong yen set to push carmaker into $3.7bn operating loss in current quarter as it slashes production in effort to cut inventory
Source: Financial Times - US homepage | 30 Jan 2009 | 6:29 pm

Wouldn't Sallie Have Been Better?

From Breitbart:

The Justice Department says it foiled a plot by a fired Fannie Mae contract worker in Maryland to destroy all the data on the mortgage giant's 4,000 computer servers nationwide.

The U.S. Attorney's Office says 35-year-old Rajendrasinh Makwana, of Glen Allen, Va., is scheduled for arraignment Friday in U.S. District Court in Baltimore on one count of computer intrusion.

U.S. Attorney Rod Rosenstein says Makwana was fired Oct. 24.

Rosenstein says that on that day, Makwana programmed a computer with a malicious code that was set to spread throughout the Fannie Mae network and destroy all data this Saturday.

Feds allege plot to destroy Fannie Mae data [Breitbart] via Zerohedge.

Source: Dealbreaker | 30 Jan 2009 | 6:02 pm

Coal is Hot (ACI, CNX, BTU)

This morning's quarterly and annual results from Arch Coal, Inc. (NYSE:ACI) have kept the coal fires burning. Arch reported EPS of $2.45 on net income of $354.3 million for the year. Annual revenues hit $2.98 billion. Analysts had been anticipating $2.42 EPS on $2.97 billion in revenues.

The quarterly results were also stirring. Revenues hit $729.9 million and EPS was $0.44. Analysts expected EPS of $0.39 and revenues of $713.9 million. However, compared with 2007, EPS was off by $0.12/share, and that was disappointing. The stock is down almost 5% in early trading.

The other thing putting pressure on the share price is the outlook for 2009. Arch, like Peabody Energy Corp. (NYSE:BTU,) expects a softer market for coal in 2009. Customer stockpiles are high, the economy is weak, and other fuels, especially natural gas, are cheap. Arch estimated that power generators finished 2008 with a 59-day supply of coal. That's higher than Peabody's estimated 56-day supply estimate.

In other news from the coal producers, Citigroup raised CONSOL Energy Inc. (NYSE:CNX) to 'buy' this morning, following yesterday's earnings report. CONSOL, like Arch and Peabody Energy Corp. (NYSE:BTU), sold a lot of coal at higher prices in 2008. No surprises there.

The company published production targets of 65 million tons of coal and 85 billion cubic feet of natural gas in 2009. It did not specify a capital spending budget, saying that it would "adopt a cautious approach to capital expenditures and cash management."

CONSOL noted that it had committed and priced nearly 64 million tons of 2009 production. The average realized price for those tons is $61.56/ton. That's almost $10/ton better than the fourth quarter average per ton of $51.88.

The three companies' shares opened higher this morning, but only CONSOL has managed to maintain a very slight upside. The good news in coal was expected; the outlook for 2009 is weaker

Paul Ausick.

Source: 24/7 Wall St. | 30 Jan 2009 | 5:52 pm

Smith International Sinks on (SII, SLB, HAL, BHI, WFT)

Smith International, Inc. (NYSE:SII) led the parade of oil field services stocks downhill yesterday. Smith opened Thursday more than $1.50/share lower than Wednesday's close and finished the day even lower. Schlumberger Limited (NYSE:SLB), Baker Hughes Inc. (NYSE:BHI), Halliburton Company (NYSE:HAL), and Weatherford International Ltd. (NYSE:WFT) all followed suit.

Smith reported soft fourth quarter and full year results yesterday. Non-GAAP EPS amounted to $1.00 on income from continuing operations of $218.6 million and revenue of $3.06 billion. Analysts were expecting EPS of $1.02 on revenue of $3.04 billion.

The company's CFO noted that Smith has "one of the best cash flow downturn profiles in our industry. Over the coming quarters, we would expect to generate significant free cash flow as the business contracts...." She didn't explain what that means, exactly, but one could interpret it to mean that as economic conditions worsen, Smith will perform better. Sure, we'll buy that.

Paul Ausick

Source: 24/7 Wall St. | 30 Jan 2009 | 5:43 pm

Solar Shines (SPWRA, FSLR)

SunPower Corporation (NASDAQ:SPWRA, SPWRB) reported strong earnings after markets closed yesterday, and the shares opened almost $4/share higher this morning. Shares are up more than 12% currently.

Analysts had expected SunPower to record revenue of $396.8 million and non-GAAP EPS of $0.57. The company came in with revenue of $401 million and non-GAAP EPS of $0.70. SunPower said than 2009 non-GAAP revenues would be in the range of $1.6-$2.0 billion, and fully diluted EPS would be in the range of $2.20-$2.80. Analysts estimates for 2009 are revenues of $1.88 billion and EPS of $2.64, about the midpoint of SunPower's own projections.

SunPower's solid report boosted competitor First Solar, Inc. (NASDAQ:FSLR) as well this morning. Still, First Solar shares are off 52-week highs by about 56%, and SunPower stock is off nearly 70% in the same time period.

The companies are looking to get a boost from the US government's economic stimulus package. Because the details of that package are still murky, recovery in share prices is cautious. But since November, the trend line is slightly up.

SunPower noted that it is "encouraged by the commitment" of the new President and the new Congress to renewable energy. That's all well and good, but that and $4 will get you a tall latte.

Paul Ausick

Source: 24/7 Wall St. | 30 Jan 2009 | 5:36 pm

Depression bound

Will the US learn the lessons of the l930s?
Source: BBC News | Business | World Edition | 30 Jan 2009 | 5:27 pm

Does A Nobel Prize Help?

Steve Chu, the physicist and Nobel laureate who will be running the Department of Energy has some tough economic challenges ahead, finding a way to make renewable energy affordable among them.

I've talked to him a couple times over the years and Chu seems wisely skeptical of miracle cures.

When researches claimed a while back that they had made a laser pulse move faster than the speed of light, I called him up. Chu was quick to testify that this was a silly parlor trick:

"OK, it's surprising for a little while, but after the dust settles, you have to ask, 'Did we learn any new science?' or, 'Is it going to be good for anything?' And I can answer at least the first part. We did not learn any new science."

That story is here. Chu recently told NPR there is no hiding from global warming.

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Source: NPR Blogs: Planet Money | 30 Jan 2009 | 5:25 pm

Missing the Tiger

Lean times beckon for Dublin after the boom years
Source: BBC News | Business | World Edition | 30 Jan 2009 | 5:24 pm

Indicator: GPA Vs. Job Leads

Aaron writes:

I am on the college recruiting team for a large manufacturing company in the Midwest. Last Tuesday, I staffed my company's booth at Iowa State University's spring engineering career fair.

I met a very charismatic student with an impressive resume: Suma Cum Laude with a 3.98 GPA in engineering.

He had done three internships with large, reputable companies, was involved in a myriad of extracurricular activities, had studied abroad and had a substantial senior project. Normally this kind of student has his pick of top jobs. I spoke with him after the career fair, to find that he only had found two leads.

Nobody is hiring and I really feel for the college graduates. They invested heavily in their educations, only to have the rug pulled out from under them.

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Source: NPR Blogs: Planet Money | 30 Jan 2009 | 5:03 pm

Norway sells 'unethical' shares

Norway's state investment fund blacklists US firm Textron, owner of planemaker Cessna, and Canadian mining firm Barrick Gold.
Source: BBC News | Business | World Edition | 30 Jan 2009 | 4:50 pm

Porsche scales back worker hours

Germany's Porsche becomes the latest car company to cut back its worker hours amid falling global demand.
Source: BBC News | Business | World Edition | 30 Jan 2009 | 4:11 pm

Aiming high to get best returns

This time last year you could get an 8.25 per cent annual return just by parking your money in the bank. Eight months after Reserve Bank governor Alan Bollard began slashing the official cash rate bank deposit rates are down to...
Source: New Zealand Herald - Business | 30 Jan 2009 | 4:00 pm

Liam Dann : We're behaving like whingers

When exactly did New Zealand become a nation of whingers? When it comes to climbing mountains, chasing a rugby ball or fighting in the trenches we pride ourselves on being as tough as they come. Why then, when it comes to financial...
Source: New Zealand Herald - Business | 30 Jan 2009 | 4:00 pm

Real estate market wooing investors

Low fixed-term deposit returns from banks and falling house prices might drive investors to consider becoming landlords. Andrew King of the Auckland Property Investors Association said rental property was a realistic alternative...
Source: New Zealand Herald - Business | 30 Jan 2009 | 4:00 pm

We can ride it out: Bollard

While caution is natural in times like these "we should also be watchful for the opportunities and mindful of the risks of defeatism", Reserve Bank Governor Alan Bollard says. In his annual speech to the Canterbury Employers Chamber...
Source: New Zealand Herald - Business | 30 Jan 2009 | 4:00 pm

Brian Gaynor: Nathans story as ugly as it gets

The Nathans Finance story is a shocker, an absolute scandal. It is arguably even worse than Bridgecorp and Hanover Finance because investors' money has disappeared into thin air, mostly overseas, whereas at least the latter two lent...
Source: New Zealand Herald - Business | 30 Jan 2009 | 4:00 pm

NZ dollar could 'drop below US40c'

The New Zealand dollar's fall in the aftermath of Thursday's 150 basis point cut in official interest rates steepened yesterday with the currency dropping below the US51c mark for the first time in six years. But ANZ chief economist...
Source: New Zealand Herald - Business | 30 Jan 2009 | 4:00 pm

Elders signs up big US wool carpet deal

Rural services company Elders has signed a deal with a major United States carpet retailer to supply it directly with New Zealand strongwool. It says the move is specifically designed to boost abysmal wool prices. It is also...
Source: New Zealand Herald - Business | 30 Jan 2009 | 4:00 pm

New homes at lowest level in 20 years

The number of new buildings planned in New Zealand is continuing to fall. New homes being authorised slumped to the lowest level in more than 20 years last month. Building statistics show there were 1127 housing unit (including...
Source: New Zealand Herald - Business | 30 Jan 2009 | 4:00 pm

Clinton enjoys Putin's economic change of tack

Former US President Bill Clinton must have thought he'd heard it all. But in a new era of billion-dollar bailouts, state control of the economy and bank nationalisation, he discovered an unexpected champion of liberal markets:...
Source: New Zealand Herald - Business | 30 Jan 2009 | 4:00 pm

High value coal sale may be last

Pike River Coal's first export coal shipment will go to Japan in April this year at a healthy price but future shipments may not be so shiny. Forty thousand tonnes of the first shipment will be sold at US$300 ($587) per tonne, according...
Source: New Zealand Herald - Business | 30 Jan 2009 | 4:00 pm

This Week’s Links

Spiegel on the rise of wind power in India.

AdAge covers India’s reaction to Slumdog Millionaire.

Saturday mail delivery might be another recessionary victim (via PEHub).

24/7 Wall Street has released its list of the Web’s 25 Best Financial Blogs.

The Harvard Business Review lists the breakthrough innovations of 2009.

Source: Business Pundit | 30 Jan 2009 | 3:13 pm

Piper Jaffray Downgrades Under Armour (UA) to Sell on Valuation; Timing Difficult For Expansion

Piper Jaffray & Co. downgraded Under Armour (NYSE: UA) from neutral to sell. Its lowered its price target by $1 to $16, citing near term headwinds for domestic discretionary spending and deteriorating gross margin.

Piper's analyst says, "We believe in the long term growth prospects for UA; however, near term headwinds for domestic discretionary spending coupled w/ gross margin deterioration from unfavorable mix and premium price point product does not justify the current multiple on our est. for earnings in FY09."

Read more....

Source: 24/7 Wall St. | 30 Jan 2009 | 2:06 pm

Incredible Shrinking Economy

Today's Planet Money is brought to you by the number 3.8.

That's the annualized percentage rate by which the American economy shrank in the last three months of 2008. Gross domestic product, or GDP, fell by less than expected in the fourth quarter. GDP is the sum of all the goods and services produced in this country -- as Adam Davidson likes to say, every cup of coffee bought and every house sold and every last widget made.

MarketWatch says the GDP number would have been worse, except that the government counted "an unwanted buildup of goods on store shelves as growth."

NPR's Jim Zarroli reports that the economy as a whole grew by 1. 8 percent last year, but much of that happened in the first six months.

Deflation-watchers, check the Employment Cost Index. Ian Shepherdon of High Frequency Economics says it rose .5 percent in the fourth quarter, the smallest increase in nearly a decade. He writes:

"Clearly, the steep rise in unemployment and massive pressure on margins is already squeezing costs, and the process has much further to run. The labor market will be a source of disinflation pressure for the foreseeble future."

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Source: NPR Blogs: Planet Money | 30 Jan 2009 | 2:03 pm

Big Oil Gets Sober On Earnings & Revenues (XOM, CVX)

Source: 24/7 Wall St. | 30 Jan 2009 | 1:54 pm

What Happens To GDP Now? It Moves Down More Sharply

The government reported that fourth quarter GDP contracted at an annual rate of 3.8%.That does not approach the 7.8% in the second quarter of 1980 or the 10.4% post-war record set in the first quarter of 1958. The consensus estimate among analysts was for a 5.4% drop.

The fourth quarter number was helped somewhat by a build-up in inventories. Real final sales for domestic product, which excludes inventories, decreased 5.1% in the fourth quarter. This is the biggest drop since 1980.

One of the concerns that economists probably have is whether some of the effects of consumer spending and corporate investments have slipped into the current quarter. If so, that will have to be added to GDP contraction which is already almost certainly much worse than in Q4. Based on early statistics about consumer confidence, employment, real estate prices, and capital spending a GDP contraction in the range of 10% should not be a surprise.

Thirty companies laid off almost 200,00 people in January. Tens of thousand of smaller firms which the credit crisis is likely to hurt badly probably let workers go at a much more rapid pace. The ranks of the unemployed may have rises by nearly one million people this month.

If the joblessness situation is that grim, the price of homes is likely to be falling even more sharply than last year and more mortgages are headed under water. Default and foreclosure rates are bound to jump higher. Consumer confidence, which is already remarkably bad, will be exacerbated by the number of people out of work and the lack of credit to buy even the most essential items.

Jobs and consumer confidence are Siamese twins. Retail sales in the last two months of 2008 have already confirmed that. Consumer consumption likely plummeted after the holidays. Store closings and retail industry layoffs are signs that the shoppers who did not show up in the fourth quarter are staying away now.

Because the recession has already moved to most parts of Europe and much of Asia, the demand for US exports has dropped sharply. That also undermines business output and job creation. Businesses which count on overseas consumption get the air taken out of their sales.

The fourth quarter GDP number may have been a little better than expected. Joblessness and a bleeding off of some of that overstocked inventory spell a historic drop for Q1.

Douglas A. McIntyre

Source: 24/7 Wall St. | 30 Jan 2009 | 1:50 pm

The Seen and the Unseen at Davos

When you come to Davos, you experiences the seen and the unseen. You take notice of visible figures, notable commentary, physical marketing, and the surrounding environment. Then there is the unseen—the tone and undercurrent of the event. This is my fifth year attending Davos, and there are clear differences this year versus those previous.

Unlike other years where a number of key issues have been discussed and a variety of figures have been represented, this year there is a focus on the global financial crisis, the one issue that has left no individual or economy unscathed. What is not visible is the celebrity factor—this year the premier of China is more noticed, where in past years it has been Brad and Angelina. This is a good development given the seriousness and the urgency of the issues facing the global economy.

While the celebrity element is missing, and along with that any sense of frivolity, there are certain visible figures and campaigns that have dominated attention here at Davos.
 
Premier of China Wen Jiabao's session was packed and his message was heard by all—he highlighted the major financial force China has become and the rapid pace at which it has prospered despite these challenging times.
 
Another government here at Davos that has been extremely visible is Mexico. Aside from the many Mexico signs and banners throughout the resort town on buses and snow capped hilltops, the Mexican delegation at Davos is focused on highlighting their political agenda and the impact global economic conditions will have on their economy. Mexico is continuing a broad-reaching visibility campaign of global magnitude focused on raising awareness of its economic, cultural, and political agendas.

Despite the change in mood at Davos this year, a positive sign has been a shared sense of global economic and social responsibility, which is unseen but still palpable. I am grateful to have encountered so many government officials, heads of state, and CEOs to share our insights and hear theirs. The cooperation of the public and private sector is even more important.
Related Links
China Cautions the U.S. at Davos
Obama Snubs Davos
Putin Shows Dell the Love in Davos



Source: Portfolio.com: Top 5 | 30 Jan 2009 | 1:30 pm

Top Pre-Market Analyst Downgrades (ALL, AZN, ETFC, FITB, JNPR, QCOM, RF, RYAAY, SEPR, HOT, TKR, TWC, TROW, UA, VE, ZNT)

These are some of the many pre-market downgrades and negative calls we have seen from Wall Street analysts this Friday morning:
Allstate (ALL) Cut to Underweight at JPMorgan.
AstraZeneca (AZN) Cut to Hold at Citigroup.
E*TRADE (ETFC) Cut to Underperform at Raymond James.
Fifth Third (FITB) Cut to Market Perform at Bernstein.
Juniper Networks (JNPR) Cut to Neutral at Piper Jaffray.
Qualcomm (QCOM) Cut to Hold at Societe Generale.
Regions Financial (RF) Cut to Market Perform at Bernstein.
Ryanair (RYAAY) Cut to Hold at Citigroup.
Sepracor (SEPR) Cut to Sell at Piper Jaffray.
Starwood Hotels (HOT) Cut to Perform at Oppenheimer.
Timken (TKR) Cut to Hold at KeyBanc.
Time Warner Cable (TWC) Cut to Sell at Collins Stewart.
T. Rowe Price (TROW) Cut to Underweight at JPMorgan.
Under Armour (UA) Cut to Sell at Piper Jaffray.
Veolia Environnement (VE) Cut to Sell at Citigroup.
Zenith National Insurance (ZNT) Cut to Market Perform at FBR; Cut to Perform at Oppenheimer.
Jon C. Ogg
January 30, 2009

Source: 24/7 Wall St. | 30 Jan 2009 | 1:01 pm