Everyone Comes to Bank of America's Aid (BAC)

Source: 24/7 Wall St. | 6 Feb 2009 | 2:38 pm

Economic Report: Payrolls plunge by 598,000, the most in 34 years

The fury of the recession intensifies in January, as the unemployment rate jumps to 7.6% and nonfarm payrolls falls by the largest amount in 34 years.

Source: MarketWatch.com - Top Stories | 6 Feb 2009 | 2:37 pm

Wall Street shrugs off job losses

U.S. stock futures remained in positive territory Friday, even as the government revealed that the U.S. economy lost well over half a million jobs in January.
Source: Business and financial news - CNNMoney.com | 6 Feb 2009 | 2:36 pm

Dick Bove: "Fears [About Bank of America] make no sense whatsoever"

Adorable woodland creature Dick Bové says Bank of Amerillwide is a buy. So shut up about "failure," cause that's never gonna happen. Also, Ken Lewis is "the best operating manager of any bank in the United States"

Bank of America (BAC): Fighting for Credibility

• Bank of America's stock is now selling at 0.28x expected 2009 revenues; 6.9x expected 2009 earnings; 0.19x stated book value; 0.50x tangible book value. Its market capitalization is 3.4% of its total deposits and 1.7% of its assets.

• These numbers are clear, investors believe that this bank is about to fail and be nationalized by the United States government. If they believed that it would continue as an operating entity it is unlikely that the bank would be selling at such a low value.

• One reason for this conviction, on the part of investors, is Bank of America's acquisition of Merrill Lynch. It is felt that either the company did not do the appropriate due diligence before making this acquisition, or that the company lacked the ability to understand how bad Merrill's problems were. In either case a lose/lose situation.

• Management is now fighting back. In an article in today's Wall Street Journal it is reported that the United States coerced Bank of America into buying Merrill against management's will. This article could only have come from an interview with Bank of America's management. The point to investors is "we knew what was going on but we had no choice."

• This, to some extent, alleviates the questions concerning management's competence. It does not take away the belief on the part of investors that the company's woes are so significant that it will fail.

• From my perspective these fears simply make no sense whatsoever. In the fourth quarter, Bank of America's deposits rose by almost a net $9 billion. Its loan loss provision was $8.5 billion but 27% of this was a reserve build and the whole amount was a non-cash charge. It took close to $8 billion in losses related to securities. The portion that was non cash in nature may have been as high as 75%.

• The point is that this bank is cash flow positive. It is not in danger of failure. Plus, the United States is now committed to keep it in business.

• Plus, for the record, I have always believed and continue to believe that Ken Lewis may be the best operating manager of any bank in the United States. Moreover, I continue to think that this company has $5 per share in earnings power.

• In the current environment whereby investors are fixated on tangible common equity adjusted for potential losses, it is impossible to present an opposite view. However, I repeat tangible common equity has no meaning. It is cash flows and asset values that determine the value of a bank and despite some hefty loan losses; Bank of America is a
strong buy on this basis.

Source: Dealbreaker | 6 Feb 2009 | 2:31 pm

Killer car deals out there...somewhere

With auto sales at their lowest levels in 26 years, getting a good deal should be a breeze. But even with deep discounts and generous incentives, what one dealer will charge - compared to another - would still surprise you.
Source: Business and financial news - CNNMoney.com | 6 Feb 2009 | 2:30 pm

Toyota losses mount (Reuters)

Reuters - Toyota, the world's top carmaker, said its losses were ballooning as world car sales drop, while truckmaker Volvo swung to a fourth-quarter loss and Italy readied aid for the ailing industry.

Source: Yahoo! News: Business | 6 Feb 2009 | 2:30 pm

Toyota losses mount

TOKYO/PARIS (Reuters) - Toyota, the world's top carmaker, said its losses were ballooning as world car sales drop, while truckmaker Volvo swung to a fourth-quarter loss and Italy readied aid for the ailing industry.
Source: Reuters: Business News | 6 Feb 2009 | 2:30 pm

Currencies: Dollar mixed after dismal jobs data; focus turns to Washington

The British pound on Friday takes the limelight away from the employment report, with sterling up for a second day after the country’s central bank cut its key interest rate to 1%.

Source: MarketWatch.com - Top Stories | 6 Feb 2009 | 2:29 pm

Financial Stocks: Stocks rise as investors position for stimulus, bank plans

Financial stocks rise early Friday, as investors are betting that a combination of an expected deal on a huge government stimulus package and a Monday announcement from the Treasury about a new bank bailout plan will be good for the sector.

Source: MarketWatch.com - Top Stories | 6 Feb 2009 | 2:27 pm

Metals Stocks: Gold rises as U.S. jobless rate rises to 16-year high

Gold futures approach $920 an ounce, as economic data showing a higher-than-projected U.S. unemployment rate spark safe-haven buying. Palladium and copper pace early gains in a broadly higher metals segment.

Source: MarketWatch.com - Top Stories | 6 Feb 2009 | 2:24 pm

Bond Report: Treasurys mostly lower after payrolls report

Treasurys were slightly lower, pushing yields on longer-dated debt up, after the economy lost more jobs last month than economists were bracing for, raising concerns that Congress will issue more debt to combat the recession.

Source: MarketWatch.com - Top Stories | 6 Feb 2009 | 2:19 pm

Wall Street set to open higher (Reuters)

Reuters - Stocks headed for a higher open on Friday as investors bet news of the deepest cut in U.S. nonfarm payrolls in 34 years last month would spur Washington to act quickly on delivering an economic stimulus.

Source: Yahoo! News: Business | 6 Feb 2009 | 2:17 pm

Wall Street set to open higher

NEW YORK (Reuters) - Stocks headed for a higher open on Friday as investors bet news of the deepest cut in U.S. nonfarm payrolls in 34 years last month would spur Washington to act quickly on delivering an economic stimulus.
Source: Reuters: Business News | 6 Feb 2009 | 2:17 pm

Wall Street set to open higher (Reuters)

Reuters - Stocks headed for a higher open on Friday as investors bet news of the deepest cut in U.S. nonfarm payrolls in 34 years last month would spur Washington to act quickly on delivering an economic stimulus.

Source: Yahoo! News: Stock Markets News | 6 Feb 2009 | 2:17 pm

Oil falls towards $39 as U.S. job losses mount

LONDON (Reuters) - Oil fell $2 a barrel toward $39 on Friday after news of more job losses in the United States heightened the prospect for still weaker demand in the world's biggest oil consumer.
Source: Reuters: Business News | 6 Feb 2009 | 2:15 pm

JP Morgan Said General Electric (GE) Triple-A Rating Not Sustainable And Dividend Will Likely Be Cut

JP Morgan commented on General Electric (NYSE: GE), saying the triple-A credit rating is not sustainable and the dividend will likely be cut. The firm also cut their estimates and price target from $13 to $9.

The firm said fundamental pressures continues to mount on GE's earnings stream, especially at GE Capital.

Read more...

Source: 24/7 Wall St. | 6 Feb 2009 | 2:14 pm

2 Helmerich rigs hit by work stoppage in Venezuela

NEW YORK, Feb 6 (Reuters) - Helmerich & Payne said two of its eleven rigs in Venezuela were hit by work stoppages by a local union.
Source: RSS feed - channel BNewsBusiness | 6 Feb 2009 | 2:13 pm

U.S. unemployment rate jumps to 7.6%

The economy appears to be in a freefall, with jobs disappearing at an accelerating rate and the unemployment rate already reaching 7.6%, the government said today -- worse than most economists had expected...
Source: RSS feed - channel BNPaperBusiness | 6 Feb 2009 | 2:12 pm

No simple way out for TARP takers

Goldman Sachs wants to give back the $10 billion it received from the government last year. But it may not be that simple.
Source: Business and financial news - CNNMoney.com | 6 Feb 2009 | 2:11 pm

Biogen profit rises, but Tysabri falls short

BOSTON (Reuters) - Biogen Idec Inc said on Friday that fourth-quarter earnings rose 3 percent, but sales of its multiple sclerosis drug Tysabri fell short of expectations, and the company's shares dropped 5 percent before the market opened.
Source: Reuters: Business News | 6 Feb 2009 | 2:11 pm

London Markets: U.K. stocks extend gains after U.S. data, led by banks

U.K. stocks extended gains on Friday in the wake of data showing nearly 600,000 jobs lost in the U.S., with banks in particular putting in a strong showing.

Source: MarketWatch.com - Top Stories | 6 Feb 2009 | 2:11 pm

Job loss: Worst since December '74

Employers slashed another 598,000 jobs off of U.S. payrolls in January, taking the unemployment rate up to 7.6%, according to the latest government reading on the nation's battered labor market.
Source: Business and financial news - CNNMoney.com | 6 Feb 2009 | 2:10 pm

US unemployment rate reaches 7.6%

The US economy lost 598,000 non-farm jobs during January, figures show, as unemployment hits a 16-year-high.
Source: BBC News | Business | World Edition | 6 Feb 2009 | 2:08 pm

U.S. job losses accelerate

WASHINGTON (Reuters) - U.S. employers slashed 598,000 jobs in January, the deepest cut in payrolls in 34 years and the jobless rate shot up to 7.6 percent, according to a Labor Department report on Friday that underlined a deepening recession.
Source: Reuters: Business News | 6 Feb 2009 | 2:08 pm

U.S. job losses accelerate (Reuters)

Reuters - U.S. employers slashed 598,000 jobs in January, the deepest cut in payrolls in 34 years and the jobless rate shot up to 7.6 percent, according to a Labor Department report on Friday that underlined a deepening recession.

Source: Yahoo! News: Business | 6 Feb 2009 | 2:08 pm

Indications: U.S. stock futures advance after landmark job losses

U.S. stock futures started advancing Friday in the aftermath of data showing the worst drop in monthly employment in 34 years.

Source: MarketWatch.com - Top Stories | 6 Feb 2009 | 2:08 pm

US economy sheds 598,000 jobs

The US economy lost more than half a million jobs in January for the third month running. The number of jobs lost last month reached 598,000, while the unemployment rate - 4.4 per cent before the credit crisis - jumped to 7.6 per cent in January, its highest level since 1992
Source: Financial Times - US homepage | 6 Feb 2009 | 2:07 pm

Wall Street shrugs off January job losses of 598K (AP)

AP - Wall Street was set for a higher open Friday, as investors looked past another bleak jobs report and hung their hopes on an economic stimulus plan getting approved.

Source: Yahoo! News: Stock Markets News | 6 Feb 2009 | 2:07 pm

Earnings Watch: Updates, advisories and surprises

A roundup of the latest corporate earnings reports and what companies are saying about future quarters.

Source: MarketWatch.com - Top Stories | 6 Feb 2009 | 2:01 pm

Biogen says Tysabri goals "difficult" to achieve

BOSTON, Feb. 6 (Reuters) - Biogen Idec Inc backed off its previous forecast that 100,000 patients would be on its multiple sclerosis drug Tysabri by the end of 2010 and reported a new case of the brain...
Source: RSS feed - channel BNewsBusiness | 6 Feb 2009 | 2:01 pm

NewsWatch: Payrolls plunge by 598,000, the most in 34 years

The fury of the recession intensifies in January, as the unemployment rate jumps to 7.6% and nonfarm payrolls falls by the largest amount in 34 years.

Source: MarketWatch.com - Top Stories | 6 Feb 2009 | 2:00 pm

UPDATE 2-Satyam suitor backs away; new chairman appointed

* Board member Kiran Karnik appointed new Satyam chairman
Source: RSS feed - channel BNewsBusiness | 6 Feb 2009 | 1:55 pm

UPDATE 1-Allis-Chalmers cuts 235 jobs

Feb 6 (Reuters) - Oil services company Allis Chalmers Energy Inc announced a slew of cost cutting measures, including eliminating 235 jobs in the United States, reducing certain day rates and employee...
Source: RSS feed - channel BNewsBusiness | 6 Feb 2009 | 1:55 pm

PREVIEW-Mexico's Telmex seen posting drop in quarterly net

* Likely net profit drop as competition and economy weigh
Source: RSS feed - channel BNewsBusiness | 6 Feb 2009 | 1:55 pm

7.6 Percent: You Feeling That?

The U.S. unemployment numbers for January are in, and my, my, my. We're at 7.6 percent joblessness, up from 7.2 in December.

That's 7.6 percent of the American workforce waking up today with no clear way to provide for themselves and their families, no clear sense of where or when they'll work next, no clear sense of when this will get better or which resume will finally do the trick. The Bureau of Labor Statistics writes, "Payroll employment has declined by 3.6 million since the start of the recession in December 2007; about one-half of this decline occurred in the past 3 months."

Ian Shepherdson's take, after the jump:

Shepherdson, chief U.S. economist for High Frequency Economics, runs the numbers, and adds a little spice:

January payrolls fell 598K, worse than the consensus -540K. The unemployment rate jumped to 7.6% from 7.2%, above the consensus, 7.5%. Earnings rose 0.3%, a tenth more than expected.

Another horrific report, showing job losses across the economy. Manuf jobs down a huge 207K - that's a 1.6% drop in one month -construction down 111K, retail down 45K, business services down 121K. The only private sector gain was in education and health.

Household survey employment fell 1.239 million, the worst since records began in 1948. Only a dip in participation prevented an even bigger rise in the unemployment rate. The strength in wages, up 3.9% y/y, won't last. It reflects the lagged effect of the rise in inflation last year. Wage gains will soon plunge. If ever there were an economy in need of stimulus, this is it.

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Source: NPR Blogs: Planet Money | 6 Feb 2009 | 1:53 pm

Sharp swings to quarterly loss, plans to cut 1,500 contract jobs

Headed toward its first annual loss in nearly 60 years, Japan’s Sharp plans to cut positions among contract workers and will likely trim its dividend.

Source: MarketWatch.com - Top Stories | 6 Feb 2009 | 1:52 pm

Ken Lewis Not Down With Meetings That Keep Him At Work Past Happy Hour

Which you already knew, but it's nice to see him go the extra mile to put it in print. Also, the Bank of Amerwillwide board is apparently up to get down with $2/share (kidding?) and the acquisition of a third asbestos company (suggest one today). Per the Journal:

Last week, Mr. Lewis went before his directors in Charlotte for "the longest board meeting in anyone's memory," he told employees in a memo. "The board unanimously endorsed our business model, strategic direction and the team. The burden of execution and accountability, as always, rests squarely on our shoulders to vindicate their confidence in us."

Source: Dealbreaker | 6 Feb 2009 | 1:48 pm

US companies slash 600,000 jobs in January

American companies made the steepest cuts to staff numbers in 34 years last month by axing nearly 600,000 workers in January.
Source: Latest Business News from Times Online | 6 Feb 2009 | 1:46 pm

Reliance to get three drillships from Transocean

MUMBAI, Feb 6 (Reuters) - India's Reliance Industries , which is soon to start producing gas from a deep-sea block off India's east coast, will take delivery of three drillships from Transocean , the driller's...
Source: RSS feed - channel BNewsBusiness | 6 Feb 2009 | 1:43 pm

UPDATE 2-Biogen 4th-qtr profit rises; Tysabri falls short

*Sees 2009 non-GAAP EPS above $4.00, GAAP EPS above $2.80
Source: RSS feed - channel BNewsBusiness | 6 Feb 2009 | 1:41 pm

US unemployment rate rockets

The US economy lost more than half a million jobs in January underlining the need for President Obama's 900bn stimulus plan.
Source: Telegraph Finance | 6 Feb 2009 | 1:39 pm

Employers slash 598,000 jobs in Jan., most since '74

Recession-battered employers eliminated 598,000 jobs in January, the most since the end of 1974, and catapulted the unemployment rate to 7.6 percent. The grim figures were further proof that the nation's...
Source: RSS feed - channel BNPaperBusiness | 6 Feb 2009 | 1:39 pm

Serious, WTF Was The Deal With Stan O'Neal's Office? You Can Tell Me, I Ain't Gonna Rat You Out

I know the whole John Thain (MER)- Ken Lewis (BAC) rumble in the Bronx seems realer than a $35,000 commode but you know full well it's not official until Geoffrey Raymond chimes in. Blissfully, that time has come. Above, "The Enumerated Thain." As in the past, the artist, in his infinite wisdom, would like Dealbreaker readers to offer their two cents, for annotation on the canvas. Whatever you'd like to say to Mr. Thain, say here. Raymond is also currently accepting bids for the piece, though you'll have some stiff competition from Ken Lewis, who's said to be an interested buyer.

Source: Dealbreaker | 6 Feb 2009 | 1:37 pm

After 7.6% Unemployment, Double-Digit Risks Now Look Real

Source: 24/7 Wall St. | 6 Feb 2009 | 1:31 pm

Delphi seeks to end health benefits for retirees (AP)

AP - Troubled auto parts supplier Delphi Corp. has asked a bankruptcy judge to allow it to cancel health care and life insurance benefits for current and future salaried retirees, citing the steep downturn in the overall auto industry in recent months.
Source: Yahoo! News: Business | 6 Feb 2009 | 1:28 pm

Layoffs Watch '09: BAC

From the front lines:

BofA ETS Principal Desk was let go. The desk that actually made money (as opposed to who they purchased). Ask Henry Mulholland at ML to explain this logic.

Source: Dealbreaker | 6 Feb 2009 | 1:15 pm

Madoff whistleblower gives SEC new tips

Harry Markopolos, the fraud investigator who was repeatedly rebuffed by the Securities and Exchange Commission in his efforts to blow the whistle on Bernard Madoff, Thursday presented SEC Inspector General David Kotz with evidence of two new potential cases of investment fraud.
Source: Business and financial news - CNNMoney.com | 6 Feb 2009 | 1:12 pm

RPC proves resilient in the downturn

Packaging group RPC has shown resilience in the downturn helped by a low oil price the euro's strength and continuing demand from food companies.
Source: Telegraph Finance | 6 Feb 2009 | 1:08 pm

Toyota delivers blow to car industry with ballooning losses

The motor industry showed further signs of weakness on Friday with Toyota revealing ballooning losses and Volvo also losing money.
Source: Telegraph Finance | 6 Feb 2009 | 1:08 pm

Stephanomics

Things are complicated. Just follow the money
Source: BBC News | Business | World Edition | 6 Feb 2009 | 1:04 pm

UPDATE 1-Glaxo pays up to $450 mln for Idenix AIDS drug

* Deal gives Glaxo access to Phase II once-a-day NNRTI drug
Source: RSS feed - channel BNewsBusiness | 6 Feb 2009 | 1:00 pm

RPT-UPDATE 5-News Corp posts biggest quarterly loss on writedown

* Q2 EPS ex-items 12 cents vs Wall Street view 19 cents
Source: RSS feed - channel BNewsBusiness | 6 Feb 2009 | 12:57 pm

Live Nation, Ticketmaster deal may be rocky

WASHINGTON, Feb 5 (Reuters) - Merger talks between Ticketmaster Entertainment Inc and Live Nation , creating a music industry powerhouse, could hit rough antitrust waters even as Ticketmaster faces a...
Source: RSS feed - channel BNewsBusiness | 6 Feb 2009 | 12:54 pm

Baugur's UK unit placed into administration

BG Holding which hold stakes in retailers including Hamleys enters administration following a High Court ruling.
Source: Telegraph Finance | 6 Feb 2009 | 12:42 pm

Carl Icahn Goes After Biogen Idec (BIIB)

Source: 24/7 Wall St. | 6 Feb 2009 | 12:38 pm

Julius Baer confirms trading incident

ZURICH (Reuters) - Swiss bank Julius Baer , confirmed on Friday it had suffered a "minor trading incident" last year as its shares slid sharply on news of an anonymous letter to Swiss authorities claiming that employees hid losses.
Source: Reuters: Business News | 6 Feb 2009 | 12:36 pm

Julius Baer confirms trading incident (Reuters)

Reuters - Swiss bank Julius Baer , confirmed on Friday it had suffered a "minor trading incident" last year as its shares slid sharply on news of an anonymous letter to Swiss authorities claiming that employees hid losses.

Source: Yahoo! News: Business | 6 Feb 2009 | 12:36 pm

Obama unveils economic panel of experts

Barack Obama is set to announce the make-up of his new Economic Recovery Advisory Board, which will include Jeffrey Immelt, the chief executive of General Electric, and Martin Feldstein, a Harvard economics professor.
Source: Latest Business News from Times Online | 6 Feb 2009 | 12:29 pm

Top Pre-Market Analyst Upgrades (CAVM, COST, EVVV, MET, SE, TOT)

These are some of the top pre-market analyst upgrades and downgrades we are seeing from Wall Street this Friday morning with more than two hours until the open:

• Cavium Networks (CAVM) Started as Buy at Piper Jaffray.
• CostCo Wholesale (COST) Raised to Buy at UBS.
• EV3 (EVVV) Started as Overweight at Thomas Weisel.
• MetLife (MET) Raised to Buy at B of A Merrill Lynch.
• Spectra Energy (SE) Raised to Hold from Underperform at Jefferies.
• Total S.A. (TOT) Raised to Buy at Citigroup.

Jon C. Ogg
February 6, 2009

Source: 24/7 Wall St. | 6 Feb 2009 | 12:27 pm

Bankers' pay: What countries are doing

The financial crisis has left bankers' pay and bonuses under intense scrutiny. Here are the approaches so far taken in major financial centres.
Source: Telegraph Finance | 6 Feb 2009 | 12:25 pm

Scottish and Southern cuts prices

Scottish and Southern Energy says it will cut prices for electricity and gas customers from 30 March.
Source: BBC News | Business | World Edition | 6 Feb 2009 | 12:24 pm

Top Pre-Market Analyst Downgrades (LNT, CNP, ESLR, FORR, IFF, LTM, LQDT, NTRS, OPXT, REG)

These are the top analyst downgrades and negative research calls we have seen on Wall Street this Friday with more than two hours until the market opens:

• Alliant Energy (LNT) Cut to Neutral at Baird.
• CenterPoint (CNP) Cut to Hold at Jefferies.
• Evergreen Solar (ESLR) Cut to Neutral at Piper Jaffray.
• Forrester Research (FORR) Cut to Market Perform at William Blair.
• International Flavors (IFF) Cut to Underweight at KeyBanc.
• Life Time Fitness (LTM) Cut to Market Perform at Morgan Keegan.
• Liquidity Services (LQDT) Cut to Perform at Oppenheimer.
• Northern Trust (NTRS) Cut to Market Perform at KBW.
• Opnext (OPXT) Cut to Perform at Oppenheimer.
• Regency Centers (REG) Cut to Neutral at JPMorgan.

Jon C. Ogg
February 6, 2009

Source: 24/7 Wall St. | 6 Feb 2009 | 12:24 pm

European, Asian stocks rise amid US stimulus hopes (AP)

AP - European and Asian stock markets climbed Friday, with Hong Kong's benchmark up more than 3 percent, amid hopes massive U.S. stimulus measures will mitigate the worst global slowdown in decades. Investors were also waiting for key jobs data from the U.S. later in the day.

Source: Yahoo! News: Stock Markets News | 6 Feb 2009 | 12:13 pm

Time for Geithner to show his cards

The Obama administration is about to face its first significant financial test.
Source: Business and financial news - CNNMoney.com | 6 Feb 2009 | 12:13 pm

Sharp Q3 in red, sees first ever annual loss

TOKYO (Reuters) - Japanese electronics maker Sharp Corp swung to a quarterly loss, battered by steep price falls for flat panel TVs and a firmer yen, and warned on Friday it would post its first ever annual operating loss.
Source: Reuters: Business News | 6 Feb 2009 | 12:12 pm

Opening Bell: 02.06.09

Madoff Hits Where It Hurts Most: Swiss Bankers (Bloomberg)
"The waitlist at Geneva's Michelin two-star restaurant Domaine de Chateauvieux evaporated after Bernard Madoff's Dec. 11 arrest, along with about 10 billion Swiss francs ($8.5 billion) the city's banks and funds had invested with him.

Bankers canceled six-month-old reservations for holiday parties of a dozen or more, said restaurant manager Esteban Valle. Sales of 5,900-franc aluminum-titanium Zai Spada skis have slumped, and a decline in landings by private jetliners at Geneva International Airport accelerated last month."

Nothing For Something (Reuters)
The US Government got hosed from an investment perspective on AIG and Citi, but both were necessary. Without intervention on behalf of the two banks liquidity would have completely evaporated such that there wouldn't be a need for a stimulus plan at all: there's some things you just can't crawl back from. But, there's always going to be a downside, and there's always going to be people who bitch, moan and yawl about the downside (mostly because their intelligence is such that that's where their capacity ends.)

"The Congressional Oversight Panel report said the Treasury overpaid financial institutions by about $78 billion in its capital injections last year through the Troubled Asset Relief Program.

It paid $254 billion in 2008 in return for stocks and warrants worth $176 billion under the Troubled Asset Relief Program.

[...]

The report showed that the Treasury got the worst deal on second-round investments in American International Group for $40 billion and Citigroup for $20 billion under special aid programs tailored for the two institutions.

For each $100 spent on these two companies. the Treasury received securities worth $41, the report concluded."

Deutsche Bank Sees Cap As Recruiting Plus (FT)
There's going to be a keep your head down mentality in the American banking culture for the next 2/3 years which the Deutsche are seeing as a plus:

"If you are only going to be able to pay a $500,000 bonus, I think talent will be happy to work for us. At the end of the day, this is a people business, about who has the best talent," Ackermann said.

Source: Dealbreaker | 6 Feb 2009 | 12:08 pm

News Corp posts steep loss on writedown

NEW YORK (Reuters) - Rupert Murdoch's News Corp posted its biggest ever quarterly net loss, after taking an $8.4 billion writedown for the value of its Dow Jones acquisition, broadcasting licenses and other assets.
Source: Reuters: Business News | 6 Feb 2009 | 12:08 pm

Global stocks climb despite earnings gloom (AFP)

AFP - Asian and European stock markets rose Friday as investors shrugged off gloomy company results to concentrate on overnight Wall Street gains and a huge US economic stimulus plan, traders said.

Source: Yahoo! News: Stock Markets News | 6 Feb 2009 | 12:08 pm

Aon earnings beat Wall Street view

NEW YORK (Reuters) - Aon Corp , the largest global insurance brokerage by assets, said on Friday that net income fell sharply in the fourth quarter, hurt by restructuring and acquisition costs, but earnings before special items rose, beating Wall Street's expectations.
Source: Reuters: Business News | 6 Feb 2009 | 12:06 pm

Aon earnings beat Wall Street view (Reuters)

Reuters - Aon Corp , the largest global insurance brokerage by assets, said on Friday that net income fell sharply in the fourth quarter, hurt by restructuring and acquisition costs, but earnings before special items rose, beating Wall Street's expectations.
Source: Yahoo! News: Business | 6 Feb 2009 | 12:06 pm

German industrial output plunges

German industrial output sees a record fall in December, after a sharp contraction in manufacturing activity.
Source: BBC News | Business | World Edition | 6 Feb 2009 | 12:05 pm

Sarkozy defends plans for economy

French President Nicolas Sarkozy defends his plans to revive the economy, saying state aid for banks has cost nothing.
Source: BBC News | Business | World Edition | 6 Feb 2009 | 11:53 am

Have your say: Should the New Star brand disappear?

New Star's new owners want your help to decide on a new name.
Source: Telegraph Finance | 6 Feb 2009 | 11:51 am

Weak economy hits British Airways

BA makes a loss of £70m in the nine months to 31 December, bruised by further economic weakness and the weak pound.
Source: BBC News | Business | World Edition | 6 Feb 2009 | 11:49 am

More companies going bust

The number of firms going bust in England and Wales rises by 220% because of the recession, official figures show.
Source: BBC News | Business | World Edition | 6 Feb 2009 | 11:49 am

Q?A: Why do bankers get paid so much?

The banking system was pulled back from total collapse in the autumn by a large injection of public money. So the debate over bonuses which always rages when they are paid out at this time of year is more furious than ever. Why do bankers and traders get paid such large bonuses and how can companies kept afloat by the government justify paying them?
Source: Telegraph Finance | 6 Feb 2009 | 11:48 am

U.S. explores converting stakes in banks: reports

(Reuters) - U.S. officials are examining ways to convert government stakes in banks into ordinary shares as banks accumulate losses, the Financial Times said, citing people close to the discussions.
Source: Reuters: Business News | 6 Feb 2009 | 11:47 am

US watchdog attacks bail-out plan

The US treasury paid $78bn too much during its rescue of financial institutions last year, says a Congressional watchdog.
Source: BBC News | Business | World Edition | 6 Feb 2009 | 11:47 am

Obama to name experts for economic panel

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 6 Feb 2009 | 11:44 am

Index futures point to higher Wall Street open (Reuters)

Reuters - Futures for the Dow Jones industrial average, the Nasdaq 100 and the S&P 500 share indexes are up 0.2 percent to 0.5 percent, pointing to a higher start on Wall Street.
Source: Yahoo! News: Stock Markets News | 6 Feb 2009 | 11:33 am

Is Chrysler Near The End? Management Press Dealers To Order More Cars

Source: 24/7 Wall St. | 6 Feb 2009 | 11:23 am

Truckmaker Volvo cautious on 2009

Swedish lorry maker AB Volvo sees falling demand hit its fourth quarter earnings, and does not see an upturn taking place in the first half of this year.
Source: BBC News | Business | World Edition | 6 Feb 2009 | 11:16 am

UK manufacturing declines sharply

Manufacturing output declined at its fastest rate since 1981 in December, underscoring the fragile state of the UK economy, official figures show.
Source: BBC News | Business | World Edition | 6 Feb 2009 | 11:12 am

Give your basement an extreme makeover

Though Beth and Ken Wilson's 5,000-square-foot, four-bedroom home in Union, Ky. wasn't exactly cramped when they bought it in 2005, they yearned for a space that could accommodate the passions of their two oldest sons (their three boys are now 17, 12 and 2) yet allow adults to enjoy activities too. So shortly after they purchased the home, the couple decided to turn the house's dark, mostly unfinished 2,000-square-foot basement into a livable lower level.
Source: Business and financial news - CNNMoney.com | 6 Feb 2009 | 11:10 am

Toyota sees first annual net loss since 1950

TOKYO -- Toyota, the world's largest automaker, sank into the red for the October-December quarter and acknowledged Friday it was heading for its first annual net loss since 1950 because of plunging global...
Source: RSS feed - channel BNPaperBusiness | 6 Feb 2009 | 11:06 am

TARP Funds Were Badly Invested, Unless They Kept Banks In Business

It is wonderful to watch boobs look back at history. It takes great skill to examine details and miss the obvious.

The Congressional Oversight Panel which is reviewing how well TARP money was spent by the Treasury says taxpayers got a raw deal.

According to Bloomberg, the panel says that the deficit between what Treasury invested and what it got was about $78 billion. The news service reports "'From day one, it’s been apparent that Treasury’s interest leaned more favorably toward that of the bank’s, with taxpayers as simply an afterthought,' said Representative Scott Garrett." It is the kind of logic that the public should expect from a Congressman from New Jersey, "The Garden State."

Two things stand out about the $78 billion figure. The first is that no one knows what the Treasury got for TARP money. The value may not be evident for years and will be based on the worth of the banks which got the money and their underlying assets.

The other and more important issue is what would have happened if the banking system had collapsed for lack of TARP funds. It is easy to forget that the bill to create the fund was rushed though Congress because of fear that the credit crisis was about to cause irreparable harm to the financial system. Subsequent developments at Citigroup (A) and Bank of America (BAC) would tend to support that point of view.

The money that the Treasury put into the banking system is not just valuable for what it bought the government. It is valuable for what it saved taxpayers if circumstances had gotten much worse.

Douglas A. McIntyre

Source: 24/7 Wall St. | 6 Feb 2009 | 11:02 am

Oil dips to $40 a barrel

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 6 Feb 2009 | 11:01 am

No Car Company Will Ever Outperform Toyota (TM)

Source: 24/7 Wall St. | 6 Feb 2009 | 10:44 am

Bigger push for smaller stimulus

Tens of billions smaller and more precisely targeted.
Source: Business and financial news - CNNMoney.com | 6 Feb 2009 | 10:29 am

Who Hired All The People Who Are Getting Laid Off?

Some of the companies that need to let people go have lost such a large portion of their sales that they have virtually no choice but to cut staff. That certainly holds true for GM (GM) and United Airlines (UAUA).

There are a number of firms which are looking at 2009 and making prophylactic layoffs. They reasonably assume that their business prospects will get worse, but, in some cases not much worse.

The number of layoffs at companies which are still in relatively good shape raises the question of why the people were hired in the first place. If these jobs had not been open, the employees might have sought work in more stable parts of the economy.

The head of IBM (IBM) told some of his US workers that they would be fired, but could stay with the company if they were willing to move to India. IBM is generously offering to pay their relocation expenses, but doesn't answer the obvious question of why the people were hired in the US in the first place. IBM just had a record quarter and forecast a strong 2009. Even though this company is fat and happy due to its robust sales, it must have decided that it had been overzealous in its hiring.

ConocoPhillips (COP) is another company that is firing 4% of its staff. Oil prices are down, but the company is hardly likely to have staffed up for $140 crude. Although revenue at the company fell in in the fourth quarter, for the year COP sales increased to $281 billion from $187 billion in 2007. Profits for 2008 were more than $16 billion.

Not long ago, AT&T (T) fired almost 18,000 people. Last year, AT&T had solid growth in its cellular and broadband operation. Its landline business is shrinking, but that has been going on for a long time. Revenue for 2008 was up 4% to $124 billion. The telephone company expects further growth this year. Who hired 18,000 people? Did AT&T really need them, or was it a case of over-staffing because the economy was doing so well in 2006?

As the mass layoffs that are part of the daily news increase, economists and analysts will begin to ask how all of those people came to be employed in the first place. Recent data show that jobs cuts actually increase productivity, at least to a point. At some successful companies, it appears that adding personnel was just poor expense management

Douglas A. McIntyre.30

Source: 24/7 Wall St. | 6 Feb 2009 | 10:27 am

Temasek's chief Ho Ching replaced by exBHP boss Chip Goodyear

Temasek said Chief Executive Officer Ho Ching will step down after almost seven years at the helm of Singapore's 130bn £89bn stateowned investment company.
Source: Telegraph Finance | 6 Feb 2009 | 9:54 am

UK company collapses up 124% in three months

The number of companies filing for administration jumped by nearly 125 per cent in the final three months of last year as the financial crisis and the sharp economic downturn took its toll.
Source: Latest Business News from Times Online | 6 Feb 2009 | 9:45 am

How much does vehicle breakdown cover cost?

As drivers count the cost of this week's snow the importance of adequate breakdown cover should finally be uppermost in their minds.
Source: Telegraph Finance | 6 Feb 2009 | 9:43 am

A run for his money: England cricketer Michael Vaughan talks cash

Yorkshire cricketer Michael Vaughan OBE captained England for fiveandahalf years including leading England to glory over Australia in the 2005 Ashes series.
Source: Telegraph Finance | 6 Feb 2009 | 9:34 am

AQ Khan freed by Pakistan high court

Abdul Qadeer Khan, Pakistan's best known nuclear scientist, has been released from effective house arrest, five years after being placed in detention for his alleged role in sharing nuclear know-how and technology with Iran, Libya and North Korea
Source: Financial Times - US homepage | 6 Feb 2009 | 9:23 am

BA falls to loss and warns of further cuts

British Airways reported a loss for its third quarter and in the first nine months, and warned the deficit would deepen for the full year.The airline said on Friday it was reviewing "every aspect of the...
Source: RSS feed - channel BNPaperBusiness | 6 Feb 2009 | 8:54 am

BA freezes pay amid a £70 million pre-tax loss

British Airways has frozen pay rises for its 43,000 staff after reporting a £70 million pre-tax loss for the first nine months of its financial year as the weak economy and the decline in sterling hit profits at the flag carrier.
Source: Latest Business News from Times Online | 6 Feb 2009 | 8:39 am

Ho Ching to step down as head of Temasek

SINGAPORE, Feb 6 - Singapore state investor Temasek Holdings said on Friday its chief executive Ho Ching will step down and be replaced by former BHP Billiton CEO Chip Goodyear on Oct. 1.Ho Ching, wife...
Source: RSS feed - channel BNPaperBusiness | 6 Feb 2009 | 8:38 am

Scottish & Southern cuts energy bills

Scottish & Southern Energy (SSE) has become the second British energy utility to cut fuel prices for its customers in the face of heavy pressure from consumers group after a fall in wholesale prices.
Source: Latest Business News from Times Online | 6 Feb 2009 | 8:21 am

Toyota sees wider losses as sales slide

The world's biggest carmaker forecast a far bigger full-year loss than it had flagged just six weeks ago as it struggles to cut production fast enough to match a sharp drop in global sales.
Source: Financial Times - US homepage | 6 Feb 2009 | 8:16 am

Toyota sees wider losses as sales slide

Toyota Motor warned on Friday that its expected loss for the financial year to March would be three times larger than it had previously forecast.The Japanese carmaker, which like its rivals around the...
Source: RSS feed - channel BNPaperBusiness | 6 Feb 2009 | 8:16 am

News Corp. reports net loss of $6.4 billion

Rupert Murdoch says the fiscal second-quarter results for his media giant "are a direct reflection" of the recession. ...
Source: RSS feed - channel BNPaperBusiness | 6 Feb 2009 | 8:00 am

At Barneys sale, resistance is futile

Pent-up consumerism is released as shoppers flock to the half-yearly event at Barker Hangar in Santa Monica. Roxie...
Source: RSS feed - channel BNPaperBusiness | 6 Feb 2009 | 8:00 am

Network-owned TV stations won't pull analog plug early

The Big Four say they'll delay switching to digital-only broadcasts until after the recently approved four-month extension expires. ...
Source: RSS feed - channel BNPaperBusiness | 6 Feb 2009 | 8:00 am

U.S. unemployment claims soar above 600,000

Also, productivity growth doubles, normally a good sign. But this time, experts say, it means businesses are rapidly shedding jobs. ...
Source: RSS feed - channel BNPaperBusiness | 6 Feb 2009 | 8:00 am

India's Stock-Market Regulators Probe Satyam Fraud (Time.com)

Time.com - A high-court ruling has cleared the way for securities investigators to question Satyam officials over the company's $1 billion accounting scandal
Source: Yahoo! News: Stock Markets News | 6 Feb 2009 | 7:55 am

RBS axes seven directors in boardroom shake-up

Shares in Royal Bank of Scotland (RBS), the part-nationalised banking group at the centre of a growing bonus row, rose by 6.3 per cent today after it announced the departure of seven non-executive directors.
Source: Latest Business News from Times Online | 6 Feb 2009 | 7:47 am

Senate to resume US stimulus battle

Democratic leaders will on Friday resume efforts to pass the proposed US fiscal stimulus after renewed warnings from Barack Obama about the urgency of action to revive the faltering economy
Source: Financial Times - US homepage | 6 Feb 2009 | 6:55 am

SocGen rogue trader Jerome Kerviel blames his bosses

Jerome Kerviel, the French trader accused of losing almost €5 billion (£4 billion) at Société Générale, has blamed his actions on his managers.
Source: Latest Business News from Times Online | 6 Feb 2009 | 6:34 am

US hires advisers on auto restructuring

The US government has retained two law firms with extensive bankruptcy experience and the investment bank Rothschild to advise officials on the taxpayer-backed restructuring of General Motors and Chrysler, a person with direct knowledge of the work said
Source: Financial Times - US homepage | 6 Feb 2009 | 2:39 am

In Brief - Thursday

Cubic (CUB), a defense and transportation company, said Q1 EPS climbed 33% to 53 cents, a dime better than estimates. Revenue gained 21% to $225...

Source: Investor's Business Daily: BUSINESS | 6 Feb 2009 | 2:14 am

GE chief warns on US depression threat

The US economy is suffering its steepest downturn since at least the 1970s and could descend into a depression, Jeff Immelt, General Electric's chief executive, warned
Source: Financial Times - US homepage | 6 Feb 2009 | 1:48 am

SEC, Treasury not discussing suspending fair value rule (Reuters)

Reuters - The U.S. Treasury Department and the Securities and Exchange Commission are not discussing the suspension of a controversial fair value accounting rule blamed for billions of dollars in bank losses, a source familiar with matter said on Thursday.
Source: Yahoo! News: Stock Markets News | 6 Feb 2009 | 1:29 am

US explores converting stakes in banks

US officials are examining ways gradually to convert the government stakes in banks into ordinary shares as banks accumulate losses, according to people close to the discussions
Source: Financial Times - US homepage | 6 Feb 2009 | 12:51 am

After The Close - Thursday

THORATEC (THOR), a maker of cardiovascular devices, said Q4 EPS rose 4% to 16 cents ex items, beating views by 2 cents. Sales rose 34% to $86 mil....

Source: Investor's Business Daily: BUSINESS | 6 Feb 2009 | 12:15 am

Rising Prices And New Mines Drive Growth For Canadian Gold Miner

Gold is looking shiny from a couple of angles.

Source: Investor's Business Daily: BUSINESS | 6 Feb 2009 | 12:15 am

Apartment Investors' New Task: Preserve Capital As Jobs Vanish

Until recently, multifamily housing investments had been doing better than retail property, hotels and offices. And a lot better than houses and...

Source: Investor's Business Daily: BUSINESS | 6 Feb 2009 | 12:15 am

Business Briefs - Thursday

Glaxo hurt by rising R&D expenses. The U.K.-based drugmaker's Q4 profit fell 9% to $1.46 bil, missing expectations, as sales grew 15.7% to...

Source: Investor's Business Daily: BUSINESS | 6 Feb 2009 | 12:15 am

Trends & Innovations - Thursday

Recession helps cut auto deaths

Source: Investor's Business Daily: BUSINESS | 6 Feb 2009 | 12:15 am

Need to know: Zavvi closures ... BG Group rises ... Yell down

View video and Need to Know interactive heatmap
Source: Latest Business News from Times Online | 6 Feb 2009 | 12:00 am

Jean-Claude Trichet needs to follow Britain's lead

The Bank of England's interest-rate cut on Thursday was described by some economists as timid. But at least it did something. The European Central Bank did nothing at all.
Source: Latest Business News from Times Online | 6 Feb 2009 | 12:00 am

Union outrage as Ford cuts 850 jobs and freezes pay

Ford could face strike action over plans to cut 850 jobs and freeze pay, the country's biggest union said on Thursday. The company, which makes engines and Transit vans in the UK, said that it had to cut up to 500 jobs from its Southampton Transit van factory by May and 350 staff jobs throughout the country. A three-year pay deal, offered in November, needed “re-evaluation”.
Source: Latest Business News from Times Online | 6 Feb 2009 | 12:00 am

News Corp posts $6.4bn quarterly loss

News Corp swung to a net loss of $6.4bn in the last quarter as an $8.4bn non-cash writedown of its television, newspaper and information services divisions underscored the severity of the economic downturn's impact on the global media sector
Source: Financial Times - US homepage | 5 Feb 2009 | 11:47 pm

TPG cuts distressed funding

The US buy-out group is scaling back the fund it raised to invest in distressed financial companies – a move highlighting the different strategies that private equity firms are employing in response to the banking crisis
Source: Financial Times - US homepage | 5 Feb 2009 | 11:31 pm

Wall Street Journal to cut 2 dozen newsroom jobs (AP)

AP - The Wall Street Journal, one of the last major U.S. daily newspapers to avoid deep cuts to its news gathering operations amid a historic industry downturn, is trimming about two dozen newsroom jobs.
Source: Yahoo! News: Stock Markets News | 5 Feb 2009 | 11:24 pm

Wall Street Journal to cut 2 dozen newsroom jobs (AP)

AP - The Wall Street Journal, one of the last major U.S. daily newspapers to avoid deep cuts to its news gathering operations amid a historic industry downturn, is trimming about two dozen newsroom jobs.
Source: Yahoo! News: Business | 5 Feb 2009 | 11:24 pm

Write-Offs: 02.05.09

$$$ The comp crackdown and shareholder rights [The Deal]

$$$ Fail of the Week: Grassley/Levin Hedge Fund Regulation Act [1-2]

$$$ Look out Marketwatch says equities are the new bird flu. [NG]

Source: Dealbreaker | 5 Feb 2009 | 10:55 pm

How the major market indexes fared (AP)

AP - Investors placed bets on retail and technology stocks Thursday after several companies posted better-than-expected sales and profit reports.

Source: Yahoo! News: Stock Markets News | 5 Feb 2009 | 10:54 pm

Health care a safe haven now, but for how long? (AP)

AP - Investors who sought refuge in health care have reason to feel less queasy than most in a sick economy where no industry has been recession-proof.
Source: Yahoo! News: Business | 5 Feb 2009 | 10:38 pm

Fail.

Since the end of the day quickly approaches, we happily present to you some dense academic work that points out a few new nuances on something you probably already intuitively knew about securitization. Alea picks up on an interesting paper that will take you there:

...as a result, statistical default model fitted in a low securitization period breaks down in the high securitization period in a systematic manner: it underpredicts defaults for borrowers for whom soft information is more valuable (i.e., borrowers with low documentation, low FICO scores and high loan-to-value ratios). We rationalize these findings in a theoretical model that highlights a reduction in lenders' incentives to collect soft information as securitization becomes common, resulting in worse loans being issued to borrowers with similar hard information characteristics

The Failure of Models that Predict Failure: Distance, Incentives and Defaults [Alea]

Source: Dealbreaker | 5 Feb 2009 | 10:24 pm

Mario Cuomo Compares Obama to Abraham Lincoln

Source: Bloomberg - All Podcasts | 5 Feb 2009 | 10:22 pm

Grail Advisors Registers Two New ETFs

Source: Bloomberg - All Podcasts | 5 Feb 2009 | 10:16 pm

Appeals Judge Posner Says U.S. Is in a Depression

Source: Bloomberg - All Podcasts | 5 Feb 2009 | 10:07 pm

JPMorgan's Lee Sees 4% U.S. GDP Growth By End of Q3

Source: Bloomberg - All Podcasts | 5 Feb 2009 | 9:56 pm

I'm Having A Hard Time Finding A Metric To Measure All This Déjà Vu

The thing about this production of "Theater of the Absurd" is that the first act never seems to end.

A Senate committee put off its vote on Representative Hilda Solis's nomination as labor secretary, one day after her husband paid to settle tax liens.

Welcome to the big leagues, gang!

Solis Nomination Vote Delayed After Tax Issue Arises [Bloomberg]

Source: Dealbreaker | 5 Feb 2009 | 9:56 pm

Stores see January sales fall; Wal-Mart posts rise (AP)

AP - Shoppers passed by the jewelry counter in January, delayed buying their favorite perfume and even skimped on buying clothes for their growing kids. If they looked at status handbags, they put them back on the shelf and walked away.

Source: Yahoo! News: Business | 5 Feb 2009 | 9:52 pm

Carly Fiorina Weighs in on CEO Perks

Carly Fiorina weighs in on the Obama administration’s executive pay cap of $500,000. Via CNN:

I don’t think (the pay cap) is the answer, although it is an understandable reaction. It’s arbitrary: Why not $400,000 or $600,000? It’s incomplete. It only applies to institutions that will receive more government assistance going forward. And it doesn’t strengthen our economy when government decides how much each job is worth. In America we leave that job to markets.

So what’s the answer? To strengthen transparency, all aspects of CEO pay and perks should be fully disclosed on a regular basis. This should include airplanes, cars, golf-club memberships, bonuses, stock options, retirement plans and salaries — in short everything that a common-sense person would consider part of a CEO reward package.

To strengthen accountability, all aspects of CEO compensation should be voted on by shareholders on an annual basis.

Ultimately, it is the owners of a company who must determine whether a CEO’s rewards are justified by a CEO’s performance. And because the American taxpayer is now a partial owner in many companies, the government can get a vote as well — in some cases a very sizeable vote.

In addition, “clawback provisions,” which require a CEO to return compensation to shareholders if promised results aren’t delivered, should be standard fare.

She makes some valid points, but I can’t look beyond the notion of Carly Fiorina, who boasts one of the worst reputations of any former CEO, talking about what any “common-sense person would consider part of a CEO reward package.” She needs to stick to talking about superdelegates and conservative backlashes.

Source: Business Pundit | 5 Feb 2009 | 9:48 pm

Spotted: Andrew Madoff Working Hard For The Money (/Fish)

From the mailbag:

Andrew Madoff is in Houston at NAPE (North American Prospect Expo), a giant conference for oil & gas companies and lenders to network and put deals together, and he is raising money. He is making the rounds looking for financial backers to develop some oil & gas properties in texas and approached our booth (NY & Houston based private equity) and spoke with us for about 15 minutes about his opportunities. The expo has an older-texan crowd and no one seems to have recognized him.

Source: Dealbreaker | 5 Feb 2009 | 9:13 pm

Critchley Discusses Deaths of Great Philosophers

Source: Bloomberg - All Podcasts | 5 Feb 2009 | 9:07 pm

Second Verse, Same As The First

We had to check the date on this Bloomberg post very, very carefully to make sure it wasn't off by a year. It is not:

Fannie Mae, the mortgage-finance company under U.S. government control, will loosen rules for homeowners seeking to lower their loan payments by refinancing.

Fannie Mae will drop some credit-score requirements, reduce income-documentation standards and waive the need for appraisals in some cases, according to a notice yesterday to lenders posted on the Washington-based company's Web site. The changes apply to loans that the company owns or guarantees. (Emphasis ours).

The interesting thing about waking up every morning in a different Kafka piece is trying to guess which morning you are in Der Gruftwächter. This seals it. It is today.

Fannie Mae to Loosen Rules for Home-Loan Refinancing [Bloomberg]

Source: Dealbreaker | 5 Feb 2009 | 8:52 pm

Eurozone rates to fall further

European borrowing costs have further to fall as economic woes mount, the European Central Bank made clear, as the Bank of England cut rates by half a percentage point
Source: Financial Times - US homepage | 5 Feb 2009 | 8:44 pm

Productivity Up

Today, the Bureau of Labor Statistics announced that productivity in the non-farm business sector rose by 3.2% in the fourth quarter of 2008. Sounds like good news? Maybe not.

The reason, as the BLS explains it, is that the total number of hours worked fell faster than the total economic output. Something economist Howard Rosen warned us about when we talked to him about furloughs on the podcast. The above chart is based on BLS data that tracks indices for productivity and compensation (all were 100 in 1992).

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Source: NPR Blogs: Planet Money | 5 Feb 2009 | 8:14 pm

No Seats In Baltimore

Benet writes from Maryland:

The husband and I got one of those rare things -- a childless night on Friday. We live outside of Baltimore and decided to do dinner at a casual dining establishment. I didn't think we'd have any problem getting in, considering how everyone is allegedly cutting back on things like dinner out.

First, we went to Red Robin, where there was an hour wait and the bar was packed. We drove over to Glory Days Grill - same thing. We ended up snagging 2 seats at the bar at a completely full Applebee's. I chatted with the manager and he said they have actually seen business increase since the holidays. They have some value items and specials on the menu, which he said has helped. Who knew??

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Source: NPR Blogs: Planet Money | 5 Feb 2009 | 7:58 pm

Kubarych Says U.S. Unemployment Will Reach 8.5%

Source: Bloomberg - All Podcasts | 5 Feb 2009 | 7:49 pm

Keynes Biography

I am still shocked at how many people have been so angry at me and Alex for our biography of Keynes.

Look: the guy is a complicated and, sometimes, difficult personality. He had some disgusting views. To me, it's obvious that that is worth commenting on. It doesn't automatically disqualify his theories. But it's not irrelevant.

Anyway, many have asked us what they should read to judge the man themselves.

The only choice (as far as I know) is Robert Skidelsky's excellent, lovely, totally readable biography of Keynes.

I think the abridged version (at a hefty 1000+ pages) is fine. No need to read the full 3-volumes unless you really, really want to.

I'd be eager to hear what other people think of the man. The book made me dislike Keynes more than I expected I would. Too snobby, narrow-minded, elitist. Although he was clearly charming at times and brilliant. Others tell me they love the man portrayed in the book.

What do you think?

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Source: NPR Blogs: Planet Money | 5 Feb 2009 | 7:44 pm

Airport offer complete

Auckland Airport said its sale of $50 million of retail bonds is now completely subscribed. The bonds are direct, unsecured, unsubordinated debt obligations of the airport and mature in 2014. "Once again we are pleased at...
Source: New Zealand Herald - Business | 5 Feb 2009 | 7:30 pm

Madoff's Miserable Millionaires

The names of thousands of Bernard Madoff’s apparent clients were made public late Wednesday in a 162-page filing with the U.S. Bankruptcy Court in Manhattan. But not everybody who lost money in the alleged $50 billion Ponzi scheme is on the list.

One name not in the filing is movie producer Arnon Milchan's. Condé Nast Portfolio has learned that the Israeli-born billionaire, whose film credits include Pretty Woman and Fight Club, lost at least $18 million with Madoff. In a story due out in its upcoming March issue,due out February 17, Condé Nast Portfolio reveals Milchan’s name and shows how Madoff made inroads into the entertainment industry. Milchan declined to comment.

Last year, Milchan was ranked No. 358 on Forbes magazine's billionaires list, which noted that he had enjoyed "a stellar year thanks to savvy currency trades and unlikely blockbusters" produced by his company, New Regency. Notably, the 2007 film Alvin and the Chipmunks, which New Regency made for $70 million, grossed $358 million worldwide.

According to Forbes, Milchan celebrated that windfall by leaping off the 709-foot-tall Bloukrans Bridge in South Africa, the world's highest commercially operated bungee jump.

The 13,000-name list filed yesterday in federal bankruptcy court doesn't mention Milchan. Nor does it appear to include thousands of customers who invested with Madoff through so-called feeder funds or through international banks. One self-described victim, actress Zsa Zsa Gabor, has stated publicly she lost money but doesn't appear on the list, for example.

The list, however, is peppered with trusts and funds with nondescript names.

One explanation for the missing names may be that the list, though marked “Customers,” is less a client list than a mailing list. One of Madoff’s lawyers, Ira Lee Sorkin, is named on the list. But when reached by Reuters on Thursday, he raised the possibility that it was simply a mailing list (while declining to say if he had invested with Madoff).

The list, which was put together by AlixPartners LLC, a firm assisting the trustee in reviewing books and records, was just one of five filed with the court this week. The others are labeled "Vendors," "Employees," "Brokers/Dealers," and "Other Parties."

Among the thousands of people the document lists as Madoff customers are U.S. Sen. Frank Lautenberg, talk-show host Larry King, actors John Malkovich and Kevin Bacon, imprisoned class-action lawyer Melvyn Weiss, former Dodgers pitcher Sandy Koufax, and the late music mogul Ahmet Ertegün.

Other names of interest that appeared on the Customers list are those of Madoff’s wife, Ruth; his sons, Mark and Andrew; and his brother, Peter; plus the World Trade Center developer Larry Silverstein; J. Ezra Merkin, the money manager; the Wilpon family, owner of the New York Mets baseball team; former Mets' second baseman Tim Teufel; John Denver Concerts Inc. and John Denver Enterprises Inc.; and the actress Barbara Bach.

Bacon, Merkin, and the Wilpon family have previously confirmed their losses with Madoff.

Related Links
Madoff Trustee Finds $950 Million
Where's Markopolos's Blog?
10 Questions to Ask Your Fund-of-Funds Manager



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

Ruskin Says Weaker Currencies Are Seeing `No Pain'

Source: Bloomberg - All Podcasts | 5 Feb 2009 | 6:53 pm

Tower sets rate

Listed insurer and fund manager Tower said the coupon interest rate on a proposed offer of five-year bonds will be 8.5 per cent. Tower plans to raise at least $80 million from the sale of the bonds to pay debt and fund working...
Source: New Zealand Herald - Business | 5 Feb 2009 | 6:30 pm

U.S. accuses three in insider trading scheme (Reuters)

Reuters - A hedge fund manager, a brokerage trader and a financial adviser were charged on Thursday with insider trading in the stock of supermarket chain Albertsons Inc, reaping total profits of about $7.5 million, according to court documents.
Source: Yahoo! News: Stock Markets News | 5 Feb 2009 | 6:24 pm

Subsidies give textiles a thread of hope

The U.S. textile industry was on the brink of collapse a few years ago when Chinese imports were flooding the market. But subsidies in the current Farm Bill have put the industry a cut above foreign competitors. Leoneda Inge reports.
Source: Marketplace | 5 Feb 2009 | 6:00 pm

Did China cause the U.S. recession?

There is a lot of blame to go around for the U.S. recession. Some people are pointing their fingers at China. Bob Moon speaks with Marketplace reporter Scott Tong about why.
Source: Marketplace | 5 Feb 2009 | 5:59 pm

Low sales lead to a lift in liquidation

Consumer spending is down, leaving stores with a lot of unsold inventory. So retailers are unloading those items to companies that specialize in liquidating merchandise, and business for inventory cleaners is booming. Joel Rose reports.
Source: Marketplace | 5 Feb 2009 | 5:59 pm

Cut mortgage rates to build economy

President Obama's stimulus package is full of lots of proposals to boost our economy. Commentator R. Glenn Hubbard says one cost-effective and easy way to lead us to recovery is lowering mortgage rates.
Source: Marketplace | 5 Feb 2009 | 5:59 pm

Sen. Conrad: Stimulus is mixed bag

North Dakota's Democratic Sen. Kent Conrad says he's not satisfied with the current proposals in the stimulus package. Bob Moon talks with the Senate Budget Committee chairman about what he thinks it's missing.
Source: Marketplace | 5 Feb 2009 | 5:59 pm

Mr. Clean goes from kitchen to car wash

Mr. Clean is getting a second job. Procter & Gamble is planning to expand its Mr. Clean Car Wash franchise nationwide. But is it that a good idea in this recession? Mitchell Hartman reports.
Source: Marketplace | 5 Feb 2009 | 5:58 pm

Is the Dow a good market indicator?

The Dow Jones Industrial Average includes a number of companies whose stocks haven't exactly been stable -- Bank of America and General Motors to name a couple. With all that volatility, is it really an accurate representation of the overall market? Jeremy Hobson reports.
Source: Marketplace | 5 Feb 2009 | 5:58 pm

Ports of Auckland volumes down

The volume of containers handled by Ports of Auckland, seen as a leading indicator of the economy, fell in January from the same month a year ago. The port handled 46,673 containers in January, down 4.7 per cent on the same month...
Source: New Zealand Herald - Business | 5 Feb 2009 | 5:30 pm

Shoot the Zombies, Mr. President!

For all of his apparent savvy, President Obama doesn't seem to be willing to grasp the historical moment. His plans are incremental, timid, and full of compromise. In short, he is sucking and I'm beginning to lose faith.

1. Treasury officials are mulling a disastrous "bad bank" proposal. The "single-payer" solution to the financial crisis — in other words the obvious, fairest, cheapest, and simplest plan — is nationalization, but it seems not to be even on the table.

2. The inevitable and expected infighting is already happening.

3. The stimulus plan lacks for boldness and is being larded up with ridiculous provisions from a know-nothing Congress.

4. The Executive compensation provisions are pathetic and empty symbolism.

5. The administration is acting as if it thinks it's supposed to be "mediators between the two parties rather than leaders of the Democratic party."

6. Obama has empowered the Republicans, who then offer "solutions" of the sort we see in Point 3...

6a. ...and allowed Republicans to engage in their usual unadulterated intellectual dishonesty...

6b. ...while Obama gives away his bargaining chips for free.

What is going on?

I think it's simple. The Obama administration says it recognizes that we are in a crisis. It says that failing to act boldly could lead to a catastrophe. It says we need to change the rules of Washington. It says it understands that the ideologies of Reaganism have failed us and are no longer relevant.

But President Obama has failed to take this to heart. Where are the actions to match the words? Wall Street and the financial industry are bankrupt — both literally and intellectually. The Republicans are bankrupt.

These are zombie institutions: They are walking and talking and creating havoc. But they are not alive to the desperate state of the country and they are not functioning as constructive parts of the solution.

It's time to put some bullets in the heads of the zombies and take control. Related Links
44, Day Three
44, Day One
Top Tech Policy People to Watch



Source: Portfolio.com: Top 5 | 5 Feb 2009 | 5:30 pm

Unemployment Offices Under Water

The Washington Post reports that area unemployment offices are having a hard time keeping up with the growing the number of claims. According to the Post, unemployment insurance claims increased nearly 84 percent statewide from December 2007 to December 2008.

"We know what this means for people. They are out here waiting for their money," said Joseph P. Walsh, acting director of the District's Employment Services Department. "But when you have the kind of unprecedented increases in unemployment insurance claims, your compliance numbers will turn on a dime."

The Washington area isn't the only place having problems. Both Seattle and Michigan recently expanded the hours of their unemployment call centers to meet increased demand. Have you had a problem filing for unemployment lately? Hit the comments please.

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Source: NPR Blogs: Planet Money | 5 Feb 2009 | 5:24 pm

What's A City Without Its Paper?

Our colleague, David Folkenflik, had a piece on Morning Edition today about what happens to a town when its newspaper shuts down. The future of the media is something we've gotten a lot of questions about and we've looked at the economic angle on the podcast. Folkenflik's story takes a different approach, with a look at the changing way we get our news.

"You lose a sense of community," Pazniokas says. "If everybody is looking at dozens or hundreds of different news sources, you don't have the common point of reference that -- not to be corny -- [is] an important part of democracy and community."

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Source: NPR Blogs: Planet Money | 5 Feb 2009 | 4:56 pm

Milligan Says Global Inflation Will Slow Through 2009

Source: Bloomberg - All Podcasts | 5 Feb 2009 | 4:55 pm

Roberts Sees Retailers Slowly Running Out of Cash

Source: Bloomberg - All Podcasts | 5 Feb 2009 | 4:52 pm

Exclusive Yellowstone Club Gets Bailed Out

The economic downfall is hammering the elite contingent of society once again (Madoff did today’s first honors), with the possible sale of the ridiculously-priced Yellowstone Club near Yellowstone National Park. The Canadian Press reports:

The Yellowstone Club, an exclusive haven for the ultrarich now under federal bankruptcy protection, could be sold for $100 million to a Boston financial firm. Documents filed by club attorneys show an affiliate of CrossHarbor Capital Partners LLC has agreed to pay $30 million in cash and $70 million in a promissory note for the 5,300 hectare club near Yellowstone National Park.

That $175-million investment comes up far short of prior appraisals of the club, which has been valued at anywhere from $310 million to $780 million.

The club counts Dan Quayle and Bill Gates among its 340 members, yet had been only partially developed when it fell more than $400 million in debt last year. An attorney for creditors still owed money by the club said Wednesday that he was reviewing the CrossHarbor offer.

Thomas Beckett with the Unsecured Creditors Committee said any deal would have to protect members who ponied up deposits of $250,000 to $300,000 to join the club. It also would need to repay the dozens of local contractors and other vendors still owed money.

You know there’s something amiss when the country club has to be bailed out.

Source: Business Pundit | 5 Feb 2009 | 4:50 pm

Bell Says U.S. Markets Should `Bottom Out' in 6 Months

Source: Bloomberg - All Podcasts | 5 Feb 2009 | 4:50 pm

Unemployment Time Machine

Harvard's Ken Rogoff commented to us recently that when you're in the middle of a recession, it never seems like it will end. We pulled up this story from the New York Times in 1983. Unemployment had risen to 10.8%.

Today's figures showed the impact of a recession that is now the longest since World War II. The average unemployment rate for 1982 was 9.7 percent, the highest since 1941. For December, 12,036,000 people were out of work, up slightly from November and the most since 1933. There were 99,093,000 people working, down just slightly from November.

The number of discouraged workers, people who have given up looking for jobs, reached 1.8 million, the most since the Government began compiling the statistic in 1967. And the average period a worker was jobless edged up to 18 weeks, the longest since the 1940's.

New Calls for Jobs Bill

The unemployment rates in New York City, New York State and New Jersey declined for the month. (Page 25.) The 10.8 national percent rate for December, the highest since 1940, reignited calls for special jobs legislation on Capitol Hill. ''The time for crossing our fingers and waiting for a recovery is over,'' Thomas P. O'Neill Jr., the Speaker of the House, said in a statement that called for President Reagan to drop his opposition to the legislation. The President reaffirmed his opposition to such jobs bills at his news conference this week.

"It is still too high,'' Larry Speakes, the deputy White House Press secretary, said in comments on the unemployment numbers. ''The Administration is making every effort to see that it comes down. We anticipate it coming down in the coming year and we continue to work toward that end.''

Unemployment did finally drop the next year, pretty quickly. You can take a look at the numbers here, just plug in the years you want to see.

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Source: NPR Blogs: Planet Money | 5 Feb 2009 | 4:43 pm

Senate Passes $15,000 Home Buyer Tax Credit

It could be a good time to buy new digs. The Senate yesterday passed a new home buyer tax credit allotting buyers up to $15,000 in tax credits. The New York Times reports:

The Senate on Wednesday voted to expand the economic stimulus package with a tax credit for homebuyers of up to $15,000, a provision championed by Republicans as addressing a root cause of the recession.

The tax break for homebuyers, which the Senate approved by voice vote without opposition, was the second amendment in two days intended to encourage consumers to make major purchases. The tax credit would give buyers 10 percent of the price of a primary residence bought within one year, up to $15,000, and is intended to stabilize plummeting home prices, which caused a wave of foreclosures and led to the near collapse of the financial system as Wall Street firms wrote down billions in mortgage-backed assets.

With Wednesday’s additions, the cost of the Senate package has climbed well above $900 billion — the limit that Mr. Obama has set for the final legislation. Intense negotiations seemed likely over how to reduce the price tag.

Times are good for people with money to spare.

Source: Business Pundit | 5 Feb 2009 | 4:38 pm

Contact departure

Contact Energy, New Zealand's biggest publicly traded power generator, said chief financial officer Kim Josling will take a role at majority shareholder Origin Energy next month. A process has begun to find a replacement for Josling,...
Source: New Zealand Herald - Business | 5 Feb 2009 | 4:30 pm

Madoff Client List Includes Rich and Famous

The UK Guardian reports on the recently released Madoff client list, which includes quite a few rich and famous people:

A list of the many thousands of people who invested with Bernard Madoff has been released, including several prominent British society figures and a number of well-known Americans from the world of politics, sport and Hollywood.

The 162-page roll call of potential victims of Madoff’s alleged $50bn (£34.3bn) fraud was published late last night. Among the 13,567 individuals, trusts and private bank accounts is the name John G Malkovich, although there is no confirmation that this is indeed the famous actor.

Names include family trusts belonging to the Kissinger family, and the American actor, Barbara Bach (pictured left), the wife of the ex-Beatles drummer Ringo Starr – although again there is no confirmation that this is the former Bond girl.

The list also includes John Denver Concerts and John Denver Enterprises, Sandy Koufax – one of America’s greatest baseball pitchers – and Frank Lautenberg, senator for New Jersey. Fred Wilpon, owner of the New York Mets baseball team, is one of many names to appear multiple times.

Find the complete 13,567-person list here.

Ouch.

Source: Business Pundit | 5 Feb 2009 | 4:27 pm

Burned Blue Chip investors to get case heard in court

Around 250 Blue Chip investors being forced to buy apartments they don't want are to get their day in court. The case of 30 representative investors is to be heard at a six-week High Court trial starting in May. A total of 250...
Source: New Zealand Herald - Business | 5 Feb 2009 | 4:00 pm

Economists dismiss unexpected increase in employment figures

Economists are discounting an unexpected rise in employment in the December quarter and still forecast a steep rise in unemployment this year as the recession deepens. While the unemployment rate at 4.6 per cent was close to the...
Source: New Zealand Herald - Business | 5 Feb 2009 | 4:00 pm

South Korean firms keen to invest in NZ

South Korean companies are eyeing the investment potential of prime New Zealand resources as both countries prepare to start bilateral free trade negotiations. South Korean Foreign Minister Yu Myung-hwan, who recently held talks...
Source: New Zealand Herald - Business | 5 Feb 2009 | 4:00 pm

Media : APN finds a buyer for web assets

APN News & Media has sold its New Zealand online business directory Finda.co.nz to industry giant Yellow. The sale includes Finda, Wises Maps, menus.co.nz, UBD and apndata. A Yellow spokeswoman said Finda.co.nz would continue...
Source: New Zealand Herald - Business | 5 Feb 2009 | 4:00 pm

Stock takes : Going for broke

Much as one might tune in (briefly) to a professional wrestling show or Fox News on television for the bracing sense of wonderment that comes from being exposed to a set of values that seem to be as far from one's own as it is possible...
Source: New Zealand Herald - Business | 5 Feb 2009 | 4:00 pm

Interest rate fall leads to loss for AMP NZ Office Trust

New Zealand's biggest commercial landlord has suffered a bottom-line profit drop, hit by rapidly changing interest rates. AMP NZ Office Trust yesterday announced a net after-tax loss of $4.9 million in the six months to December,...
Source: New Zealand Herald - Business | 5 Feb 2009 | 4:00 pm

Indicator: Empty Shelves

Susan Stresser sends this picture from the final days at Cub Foods in Madison, Wisconsin. Earlier this year, the supermarket chain's parent company told the Green Bay Press-Gazette it was closing almost 50 of its underpreforming stores nationwide.

Twitter pal @olevia sends news of eminent demise of Frisbee's Market, a Kittery landmark and family business dating back to 1828. The store's owners were forced into Chapter 7 bankruptcy this week, but say they're still hoping "Batman flies in to the rescue," that or a wealthy investor.

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Source: NPR Blogs: Planet Money | 5 Feb 2009 | 3:31 pm

The Money-Go-Round

Related Links
Defending TARP
The Great Financial Flip-Flop
Saving Citi



Source: Portfolio.com: Top 5 | 5 Feb 2009 | 1:00 pm