January 2010

Asia Currencies Have Weekly Drop, Led by Won, on Lending Curbs in China

January 29, 2010

By Patricia Lui Jan. 30 (Bloomberg) — Asian currencies fell this week, led by South Korea’s won and the Philippine peso, on concern tighter lending controls in China will damp regional trade as worsening public finances in Greece curb demand for emerging- market assets. Investors pulled $608.5 million from funds investing in developing nations’ equities in the week ended Jan. 27, the first outflows in 12 weeks, according to EPFR Global. China’s banking regulator on Jan. 27 told banks to “reasonably control” loan growth, having earlier in the month ordered them to set aside more funds as reserves. India’s central bank yesterday lifted the cash-reserve ratio for banks by 75 basis points, more than economists forecast. “All these on-going concerns about Greece and China’s tightening are fueling risk aversion in Asian currencies,” said Joanna Tan , a regional economist at Forecast Singapore Pte. The won dropped 0.9 percent to 1,161.65 per dollar in Seoul, capping the biggest two-week slide since February, according to data compiled by Bloomberg. The Philippine peso sank 0.7 percent from Jan. 22 to 46.51, while Malaysia’s ringgit lost 0.3 percent to 3.4090. The MSCI Asia Pacific Index of shares slumped 4.5 percent, its worst weekly performance in 11 months. The People’s Bank of China earlier this month increased banks’ reserve requirements for the first time since June 2008 and has also guided bill yields higher at auctions this year, helping cool lending in the world’s fastest-growing major economy. The reserve ratio may be raised again after next month’s Lunar New Year holiday, the Shanghai Securities News reported today, citing unidentified people. Greek Debt The cost of protecting Greece’s debt against default rose to a record this week after the country’s budget deficit ballooned to almost 13 percent of gross domestic product in 2009, more than four times the European Union’s limit. The European Commission said Jan. 27 that Greece hasn’t done enough to narrow the gap. “We did have a nice rally in emerging Asian stock markets since March of last year and maybe they’re due for a little correction,” said David Cohen , director of Asian forecasting at Action Economics in Singapore. “Markets have seen some fallout from the problems in Greece.” Global funds sold $478 million more Korean shares than they bought this week through yesterday, trimming net purchases for the year to $606 million. Foreigners were also net sellers of equities in India, Indonesia, Taiwan and Thailand this week, according to latest figures from their stock exchanges. Safe Havens Favored “It’s more risk aversion from equities and partly a safe-haven bid back to the dollar,” said Faizal Yussof , a currency trader at KAF Investment Bank Bhd. in Kuala Lumpur. “If China contracts, I don’t think the rest of the world has any chance to put in a good recovery.” Malaysia’s central bank said on Jan. 26 that borrowing costs cannot be kept “too low” for too long as economic growth strengthens, prompting some economists to predict it may begin raising interest rates as early as March. Policy makers need to “normalize” interest rates, central bank Governor Zeti Akhtar Aziz said today. Bangko Sentral ng Pilipinas on Jan. 28 raised the so- called rediscounting rate, one of the interest rates it charges lenders for borrowing money, by half a percentage point to 4 percent and announced plans to review the amount of reserves commercial banks must hold with a view to an increase. Its benchmark interest rate was kept at a record- low 4 percent for a fifth straight meeting. Monetary Tightening The Reserve Bank of India yesterday increased its cash- reserve ratio to 5.75 percent from 5 percent, more than the half-point increase forecast by all but two of the 25 economists in a Bloomberg survey. Governor Duvvuri Subbarao said India’s economic growth could “gain momentum” over the next year and “reinforce” inflationary pressures. India’s rupee slid 0.1 percent to 46.1782 this week against the dollar, marking a third straight decline. Singapore’s dollar fell 0.2 percent to S$1.4072 and Thailand’s baht dropped 0.5 percent to 33.19. Taiwan’s dollar and China’s yuan were little changed at NT$31.99 and 6.8268, respectively. To contact the reporters on this story: Patricia Lui at Plui4@bloomberg.net ;

Read the full article →

Consumers Played Role in U.S. 5.7% Growth Surge Along With Manufacturers

January 29, 2010

By Carlos Torres Jan. 30 (Bloomberg) — The surge in U.S. economic growth in the fourth quarter depended on more than manufacturing and investment. Households also played their part. Gross domestic product grew at a 5.7 percent annual rate from October through December, more than anticipated and the strongest performance since the third quarter of 2003, figures from the Commerce Department yesterday showed. Consumer spending rose at a 2 percent pace after increasing 2.8 percent the previous three months, reflecting a slowdown in auto sales . Spending cooled after the government’s cash-for-clunkers plan expired in August, ending rebates on trade-ins of older vehicles. Excluding autos, consumer spending increased at a 3 percent rate last quarter, the most in three years, indicating the biggest part of the economy was gaining speed. “There was some genuine pickup in momentum over the second half of last year that was slightly obscured by ‘cash for clunkers,’” said Samuel Coffin , an economist at UBS Securities LLC in Stamford, Connecticut. “There will be no huge venting of pent-up demand, but continued momentum” in spending. The increase is being fueled by growing incomes rather than a decrease in savings, signaling household purchases can keep expanding in coming months. Amazon.com Inc. is among companies projecting better times ahead as the world’s largest economy emerges from the recession. Economists anticipated the economy would expand at a 4.8 percent pace in the last three months of 2009, according to the median of 84 estimates in a Bloomberg News survey. Consumer spending, which accounts for about 70 percent of the economy, was projected to grow at a 1.8 percent pace. 2009 Slump For all of 2009, the economy shrank 2.4 percent, the worst single-year performance since 1946. Household purchases dropped 0.6 percent last year, the biggest decrease since 1974. Spending excluding autos picked up from a 1.6 percent gain in the third quarter and a 0.7 percent drop in the previous three months, according to Bloomberg News calculations. Yesterday’s report showed pay for those still employed grew. Incomes rose at a 4 percent pace in the last three months of 2009, the most since the second quarter of 2008. Wages and salaries climbed 2.2 percent, the best performance in two years. Amazon.com , the world’s largest Internet retailer, said on Jan. 28 that sales may rise as much as 43 percent in the first quarter compared with the same time last year, beating analysts’ estimates. The Seattle-based company’s shares more than doubled last year. Shares Fall Stocks dropped yesterday, depressed by disappointing results at technology companies including Microsoft Corp. The Standard & Poor’s 500 Index fell 1 percent to close at a two- month low of 1,073.87. Efforts to rebuild inventories and gains in business spending on new equipment provided the biggest boosts to growth last quarter, the Commerce Department report showed yesterday. Stockpiles dropped at a $33.5 billion annual pace following a $139.2 billion decline the previous three months. Inventories declined at a record $160.2 billion pace in the second quarter. The smaller slide added 3.4 percentage points to GDP. Purchases of equipment and software increased at a 13 percent pace in the fourth quarter, the most since 2006, yesterday’s report showed. The gain helped offset a 15 percent drop in commercial construction, leaving total business investment up 2.9 percent over the past three months. ‘Sustainable’ Recovery “We are getting on to something that is pretty sustainable,” said Bruce Kasman , chief economist at JPMorgan Chase & Co. in New York, who correctly forecast the gain in GDP. “Both consumers and businesses are beginning to increase spending. To get validation, we need to see a return in hiring, which we think we are going to get over the next few months.” Rising investment is boosting sales at companies including Intel Corp. and may help bring the jobless rate down from close to a 26-year high as employers add staff to meet demand. Intel, the world’s largest chipmaker, posted its biggest quarterly revenue in more than a year last quarter, a sign the computer industry has emerged from last year’s global recession. President Barack Obama said the GDP report “affirms the progress” being made because of government actions to pull the nation out of a recession. “There’s still a big hole we have to fill,” Obama said yesterday after touring a small manufacturing company in Baltimore. An additional boost is needed from tax breaks for small businesses that should be part of legislation from Congress, he said. The U.S. has lost 7.2 million jobs since the start of the recession in December 2007, the most of any slowdown in the post-World War II era. The jobless rate held at 10 percent in December. To contact the reporter on this story: Carlos Torres in Washington at ctorres2@bloomberg.net

Read the full article →

Cantor Fitzgerald & Co. Further Expands Its Global Credit/High Yield and Distressed Sales Business Cantor Fitzgerald & Co.

January 29, 2010

Cantor Fitzgerald & Co. announced the addition of several new experienced professionals to its Debt Capital Markets business, underscoring its commitment to meeting clients needs. New professionals we have brought on board include: James Mitchell,

Read the full article →

Japan’s Five-Year Bond Yields Drop For Third Week as Deflation Lingers

January 29, 2010

By Yasuhiko Seki Jan. 30 (Bloomberg) — Japan’s five-year notes rose for a third week as a government report showing deflation extended to a 10th month boosted the appeal of government debt. Yields touched the lowest in almost four weeks, as Japanese stocks slumped on concern the global recovery is losing momentum, damping demand for higher-yielding assets. Central bank Governor Masaaki Shirakawa yesterday said it’s important to maintain an accommodative financial environment, signaling policy makers are in no hurry to raise interest rates. “Deflationary pressure remains intact, while there is a risk that the economic recovery will come to a standstill,” said Seiji Shiraishi , chief economist in Tokyo at HSBC Securities Japan Ltd., a unit of Europe’s largest bank by market value. “Bond yields will stay low.” Five-year yields fell 1.5 basis points this week to 0.49 percent at Japan Bond Trading Co., the nation’s largest interdealer debt broker. The 0.5 percent security due December 2014 gained 0.71 yen to 100.047 yen. The yield dropped to 0.48 percent yesterday, the lowest since Jan. 5. Ten-year bond futures for March delivery gained 0.28 this week to 139.51 on the Tokyo Stock Exchange. Ten-year yields declined one basis point to 1.315 percent. The Nikkei 225 Stock Average slid 3.7 percent this week and the broader Topix index slumped 4.2 percent, the biggest weekly decline since October. Bonds advanced as the statistics bureau said yesterday consumer prices excluding fresh food dropped 1.3 percent in December, after falling 1.7 percent in November. The decline in prices came as other reports showed industrial production rose and the unemployment rate declined. ‘Prepared to Act’ “The bank is prepared to act swiftly and decisively should concerns that financial market stability might be hampered reemerge,” Shirakawa said yesterday in Tokyo. Japanese bond yields are low despite the nation’s fiscal situation because they are set by people’s expectations for growth and inflation, he said. The central bank left its benchmark rate unchanged at 0.1 percent on Jan. 26 and said it remained committed to fighting deflation as gains in the yen threaten to stunt the recovery. “The BOJ may introduce additional easing should contingency risks including further appreciation of the yen emerge,” said Takeshi Minami , chief economist in Tokyo at Norinchukin Research Institute Ltd. “A strong belief that the BOJ won’t hike interest rates for the next few years will continue to serve as a key buffer for any declines in bonds.” Debt Sales The gain in bonds this week was tempered on speculation the nation’s ballooning debt will reduce demand at a 10-year debt sale next week. “Growing concerns over fiscal risk may push up bond yields,” said Eiji Dohke , chief strategist in Tokyo at UBS Securities Japan Ltd., one of the 23 primary dealers that are required to bid at the government’s debt auctions. Sales of new bonds may climb to 51.3 trillion yen ($569 million) in the year starting April 2011, according to a Finance Ministry document. That would be a 16 percent increase from next fiscal year’s projected 44.3 trillion yen. Standard & Poor’s on Jan. 26 cut its outlook for Japan’s AA credit rating to “negative” from “stable,” saying Prime Minister Yukio Hatoyama lacks a plan to rein in the world’s largest debt burden. To contact the reporter on this story: Yasuhiko Seki in Tokyo at Yseki5@bloomberg.net

Read the full article →

First Citizens Expands in California as Six More U.S. Banks Are Shut Down

January 29, 2010

By Dakin Campbell Jan. 29 (Bloomberg) — First Citizens Bancshares Inc. , the North Carolina-based lender with $18.5 billion in assets, expanded its West Coast operations as the number of U.S. bank collapses climbed to 180 since 2007. First Citizens acquired First Regional Bank of Los Angeles, the Federal Deposit Insurance Corp. said in a statement on its Web site . Six lenders with total assets of $5.53 billion failed, according to the FDIC. “This is a perfect extension for our company,” Barbara Thompson, a spokeswoman for First Citizens, said in a phone interview from Raleigh, North Carolina. Southern California “is an area we have been in with our subsidiary bank and we see a lot of potential in that market.” The lender’s IronStone Bank already operates branches in the region, she said. Last year, First Citizens acquired Temecula Valley Bank, based in the California town of the same name, and Lacey, Washington-based Venture Bank. The FDIC, which is anticipating bank failures to cost the insurance fund $100 billion through 2013, is seeking to contain the fallout from the worst financial crisis since the Great Depression. The agency aims to expand its workforce from 7,010 in 2009 to 8,563 this year. Today’s actions cost the fund $1.86 billion, the FDIC said. “A lot of banks were spawned in a period over the last 10 years and in order to grow their business they went after the most profitable loan growth they could find, which meant higher risks,” said Frederic H. Dickson , chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. “This is a good cleansing process.” Sharing Losses First Citizens added $2.2 billion in assets and $1.9 billion in deposits, the FDIC said. The lender will share losses with the FDIC on $2 billion of the assets. In other collapses today, Premier American Bank of Miami bought its second lender in as many weeks. The newly formed bank, backed by Bond Street Holdings LLC, a Naples, Florida- based investment firm, acquired Immokalee, Florida-based Florida Community Bank, the FDIC said. The following table lists the banks seized. Asset and deposit figures are in millions of U.S. dollars. To contact the reporter on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net

Read the full article →

CREW- Miami, FIU partner on UCREW

January 29, 2010

th, 2010 MIAMI – CREW-Miami (Commercial Real Estate Women), in partnership with the Florida International University Department of Finance and Real Estate, announces the launch of UCREW, an educational program designed to provide undergraduates with an

Read the full article →

‘Help Wanted’ Signs Start to Reappear

January 29, 2010

NEW YORK CITY-The silver lining amid the still-cloudy hiring picture in commercial real estate is the rising number of opportunities related to workouts, acquisitions of distressed properties and asset management, says Anthony , founder of SelectLeaders.

Read the full article →

Sullen Republicans Sit Through Obama Stand-Up: Margaret Carlson

January 29, 2010

Commentary by Margaret Carlson Jan. 29 (Bloomberg) — By the time President Barack Obama delivered the State of the Union, much of the drama had been leeched away. As with the Super Bowl, the pre-game run-up dwarfs the event itself. The press tells the president what he “has to do” in what’s always the “speech of his life.” The anchors, Diane, Katie, and Brian, went for lunch and doled out morsels from their doggie bag the rest of the afternoon. Other authorized tidbits were dished to favored scribes. Unauthorized ones were dished to lesser journalists by lesser aides wanting to feel in the middle of things. A diligent reporter could practically have written the 71-minute speech by the time Speaker Nancy Pelosi had her moment of high honor and distinct privilege. The remaining drama is all in the demeanor of the president and that of his audience. Obama was cool without being cold, with touches of acute frustration that stopped short of sounding malaise alarms. He shed his usual oratorical cadence to be chatty and informal. There were moments of ironic detachment when he acknowledged that the right side of the aisle — which actually was to his left — just wasn’t buying a thing he said, even when he was spooning ice cream. As for the chamber, Republicans won the award for most sullen party in a closer contest than you might have expected. The only consistent thought rippling across the room was, “How does this cut for my re-election?” After three kicks in the shins in elections during the past three months, Democrats are more uneasy than Republicans about the midterms. Eye on Independents Obama was careful not to speak down to Republicans, mindful to speak up to independents, who thought he’d have this partisanship thing worked out by now. And he was conscious of not letting himself or his party off the hook. He noted that he’d had political setbacks, “and some of them were deserved.” He admonished congressional Democrats that they enjoy the largest majority in decades. “People expect us to solve some problems, not run for the hills.” Although his spine was stiff and his brain fully engaged, Obama clung throughout to his big-hearted delusion that we can all get along. For most of the evening, Republicans did what they could, at least in mime, to prove him wrong. Unlike last time, Republicans realized they were sitting in the U.S. Capitol, not in the boisterous bleachers at a ballgame. The independents they’ve been attracting in recent elections don’t like rowdiness. There were no homemade signs, no boos, no obvious napping. Alito’s Mouth The closest thing to a “You lie” moment came from strange quarters. The quiet and decorous Justice Samuel Alito shook his head in disbelief, mouthing the words “not true,” when the president dressed down the Supreme Court for overturning a century of law to allow unlimited amounts of money from corporations to flow into our politics. While acting more mature, Republicans showed no shift from being the Party of No, even when Obama reeled off programs they like — new nuclear power plants, offshore oil drilling, tax credits, an emphasis on jobs over health-care reform, and a spending freeze. When Obama said the freeze wouldn’t go into effect until next year, Republicans rustled in their seats, particularly the perpetually orange-tanned House minority leader, John Boehner , whose body language said, That’s just what we expect from you undisciplined Democrats. Noticing, Obama ad-libbed, “That’s how budgeting works.” Not even his list of tax cuts moved the GOP. Obama’s audience was as tough as the one Jay Leno will face when he replaces the deposed Conan O’Brien . “I thought I’d get some applause on that one” he lamented. Sound of Silence The Republicans’ reticence bordered on perilous when, by their silence, they appeared not to agree with Obama’s bare- knuckled statement that “we all hated the bank bailout.” It was a good half hour before he brought up health care, pledging to see it through but without offering a road map to a conclusion. It was enough to hearten wavering Democrats. Yesterday Pelosi said she had the votes in the House to pass the Senate bill, if there were promises in blood that the bad parts would be fixed. The speech reminded us of the earnest, problem-solving technocrat Obama is. It was easy to forget him while the uninspiring Senator Max Baucus seemed to be running the country as Obama’s designated health czar. Inadvertently perhaps, Republicans reminded us why Obama, with majorities in both houses, can’t get anything done. Watching them sitting stone-faced in their seats, like the board of a country club sizing up an aspiring member, it all became perfectly clear. ( Margaret Carlson , author of “Anyone Can Grow Up: How George Bush and I Made It to the White House” and former White House correspondent for Time magazine, is a Bloomberg News columnist. The opinions expressed are her own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Margaret Carlson in Washington at mcarlson3@bloomberg.net

Read the full article →

Corzine Is in Talks to Teach Economics or Government at Rutgers University

January 29, 2010

By Terrence Dopp Jan. 29 (Bloomberg) — Former New Jersey Governor Jon Corzine is in talks to teach at Rutgers University, his spokesman said in a telephone interview. Corzine may be an instructor of economics or government on a part-time basis for the state university in New Brunswick, said the spokesman, Josh Zeitz. Ruth Mandel , director of the school’s Eagleton Institute of Politics , said discussions have centered on him teaching there as part of the Rutgers Program on the Governor that examines the history and role of the office. “He is himself the product of a state university and he thinks it’s important that a former governor has a long-standing relationship with them,” Zeitz said. Corzine, 63, the former chairman of Goldman, Sachs & Co. , also is exploring private-sector opportunities, Zeitz said. He declined to elaborate on those talks. The one-term Democrat was defeated by Republican Chris Christie in the November election as voters rejected his handling of a U.S. economic slump that left the state facing an $8 billion budget deficit. Christie, 47, took office Jan. 19. Mandel said the Eagleton project examining governors began talks with Corzine last year about preserving papers and other records of his administration. After the election, the school made the overture about the position, she said. Governor’s Program The Eagleton project seeks to promote research and discussion of the nation’s governors and has begun archiving records from New Jersey executives starting with Brendan Byrne, a Democrat who left office in 1983, according to its Web site . “The possibility of doing some teaching is certainly part of the discussion,” Mandel said. “There are no courses on the books yet or anything that’s set.” The Illinois-born son of a farmer and schoolteacher, Corzine graduated from the University of Illinois at Urbana- Champaign in 1969 and received his Master of Business Administration from the University of Chicago in 1973. Corzine moved to New Jersey after he was recruited to be a bond trader in 1975 by New York-based Goldman. He became chairman and CEO in 1994 and left the firm in 1999. Corzine was elected to the U.S. Senate the following year and became governor in 2006. He currently lives in Hoboken. “He would be a wonderful asset to their faculty,” said Senator Raymond Lesniak , a Democrat from Elizabeth and 1971 Rutgers graduate who wasn’t aware of Corzine’s discussions with the school. “The guy is a former governor and he was chairman of one of the world’s largest financial institutions. That experience brings a tremendous amount of knowledge for the students of Rutgers.” Corzine would follow other New Jersey ex-governors into academia if he joins the Rutgers faculty. Former Governor James McGreevey taught law and ethics at Kean University in Union after leaving office in 2004, while former Governor James Florio , a Democrat who served one term in the early 1990s, has taught at Rutgers. To contact the reporter on this story: Terrence Dopp in Trenton, New Jersey, at tdopp@bloomberg.net

Read the full article →

Ford Says January Sales Climbed at Least 10% on Purchases by Fleet Buyers

January 29, 2010

By Keith Naughton Jan. 29 (Bloomberg) — Ford Motor Co. said its U.S. sales rose at least 10 percent in January as optimism about the economy spurred business customers to boost vehicle purchases. Deliveries to so-called fleet buyers jumped by more than 50 percent from a year earlier, helping offset a drop of 1 percent to 2 percent among individuals, George Pipas , the company’s sales analyst, said today. Total sales increased by a double-digit percentage, he said, without giving a figure. Improving demand among commercial customers adds to evidence that automakers are shaking off their worst sales slump since 1982. While discounts for bulk purchases make those sales less profitable than those to retail buyers, an economic rebound would herald a recovery for the entire U.S. auto market. “There’s no question the worst is behind us and we are in a period of expansion,” Pipas told reporters at Ford headquarters in Dearborn, Michigan. “But it is not likely to be linear.” The decline in so-called retail purchases by individual buyers this month was the result of automakers’ year-end sales and consumers in December taking advantage of tax deductions for 2009 on new vehicles, he said. “There’s likely some payback in January,” Pipas said. The company’s $1,000 rebate offer for owners of Toyota Motor Corp. vehicles won’t boost Ford’s costs, Pipas said. The effect of Toyota’s recall and sales freeze on eight U.S. models is “hardly visible” in January sales results, he said. Targeting Toyota Owners Ford isn’t able to tell yet whether its marketing campaign will attract many Toyota owners, Pipas said. On average, Ford dealers get about 6 percent of their trade-in vehicles from Toyota owners, he said. The U.S. automaker is providing its dealers with “millions” of dollars in added advertising money, the sales analyst said. “Consumers might just say, ‘For the next few weeks I’m just going to sit tight,’” Pipas said. “You’re not going to pay out that money unless somebody switches.” Ford fell 57 cents, or 5 percent, to $10.84 at 4:03 p.m. in New York Stock Exchange composite trading . The shares are up 8.4 percent this year after rising more than fourfold in 2009. The seasonally adjusted annual sales rate , a benchmark of industry health, climbed to the mid-10 million range this month from 9.6 million a year earlier, Pipas said. That was a slower pace than the 11.2 million for December, when automakers staged an end-of-the-year marketing push. U.S. sales slumped to 10.4 million in 2009 from 13.2 million in 2008, according to researcher Autodata Corp., after averaging 16.8 million last decade through 2007. Ford will gain market share for the month, Pipas said. The automaker sold 93,041 cars and light trucks in January 2009, accounting for 14.2 percent of the U.S. market, according to Woodcliff Lake, New Jersey-based Autodata. ‘Steadily Increased’ General Motors Co. and Ford, the two largest U.S. automakers, may post the biggest gains for January among major manufacturers, Brian Johnson , a Barclays Capital analyst in Chicago, wrote in a research note today. “After a slow start to the year, industry sales of light vehicles appear to have steadily increased throughout January, amid an improvement in consumer confidence,” he wrote. “We anticipate overall January industry sales to be up by 13 percent.” GM yesterday forecast a January sales increase of at least 10 percent for the U.S. industry. Michael DiGiovanni , executive director of product, portfolio and brand strategy for the Detroit-based automaker, told reporters the percentage gain would be in double digits, without giving a figure. To contact the reporter on this story: Keith Naughton in Dearborn, Michigan, at Knaughton3@bloomberg.net

Read the full article →

Tesla Motors, Palo Alto Electric Carmaker, Plans IPO of Up to $100 Million

January 29, 2010

By Michael Tsang Jan. 29 (Bloomberg) — Tesla Motors Inc., the maker of electric sports cars, filed for an initial public offering of shares worth as much as $100 million. The Palo Alto, California-based company run by Elon Musk didn’t disclose in its filing with the Securities and Exchange Commission today how many shares it plans to sell, at what price range or whether its owners intend to sell stakes in the IPO. The company, which makes the electric Roadster, said it may use the proceeds to help pay for spending on factories and equipment, which it estimates may cost as much as $125 million this year. Tesla said it may also use a portion of the IPO proceeds to fund possible acquisitions. The company said it doesn’t have agreements or commitments for specific purchases. Electric cars have been touted by U.S. policy makers including President Barack Obama as a component of the nation’s efforts to reduce oil use and cut dependence on foreign sources. Tesla received a $465 million loan from the U.S. Energy Department on Jan. 21 for factories to make electric vehicles and parts. The low-cost loan was made under a program aimed at speeding production and sales of highly fuel-efficient autos. Tesla will use the IPO and government loan to set up a factory in southern California to assemble the Model S electric sedan and a power-train manufacturing site in Palo Alto. “Obviously, they’re taking advantage of all of the green buzz,” said Joe Phillippi , president of AutoTrends Consulting in Short Hills, New Jersey. “Tesla has to get its sedan launched.” The automaker hired New York-based Goldman Sachs Group Inc., Morgan Stanley, JPMorgan Chase & Co. and Deutsche Bank AG in Frankfurt as lead underwriters for the sale. To contact the reporter on this story: Michael Tsang in New York at mtsang1@bloomberg.net .

Read the full article →

Summers Says Dollar to Play Key Role in Financial System for a `Long Time’

January 29, 2010

By Mike Dorning Jan. 29 (Bloomberg) — White House economic adviser Lawrence Summers said the dollar will play a central role in the international financial system for “a long time to come.” Summers, speaking at the World Economic Forum in Davos, Switzerland, said the U.S. must pursue economic policies that will support the “fundamentals” of the currency, including reducing budget deficits. President Barack Obama announced in his State of the Union speech Jan. 27 that he would freeze domestic discretionary spending over three years and appoint a bipartisan commission to recommend ways to reduce the deficit. Summers, 56, director of the White House’s National Economic Council, also defended Obama’s plan to impose new rules on bank size and risk, saying they would not interfere with financial institutions’ ability to serve customers. “The policy is a constraint on purely proprietary trading. It is not a constraint on doing business with customers,” Summers said. “It does not by definition therefore interfere with their ability to serve their customers.” Obama announced last week that he would seek to bar banks from owning or sponsoring hedge funds and private equity funds, as well as engaging in so-called proprietary trading that’s not related to clients. Bank stocks in the U.S. and elsewhere fell after Obama made public his support for the idea, which has been championed for more than a year by his adviser Paul Volcker , a former Federal Reserve Board chairman. Summers said the new proposal was not a significant break from the approach the administration has previously pursued in overhauling financial regulation. “This is not some new thunderbolt,” he said. To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net .

Read the full article →

Federal Reserve, Bankers in Davos: Week in Review

January 29, 2010

Jan. 29 (Bloomberg) — “ Federal Reserve Weighs Interest on Reserves as New Policy Rate ” leads a selection of top stories from Bloomberg News in the past week. Fed policy makers are considering adopting a new benchmark interest rate to replace the one they’ve used for the last two decades. Fed officials voted Jan. 27 to leave rates near zero . Click the VIDEO tab above for an interview earlier this month with Thomas Hoenig, the member of the Federal Open Market Committee who dissented from the panel’s pledge to keep rates “exceptionally low” for an “extended period.” Click here for news and interviews from the World Economic Forum meeting in Davos, Switzerland. Apple Inc. Chief Executive Officer Steve Jobs introduced the iPad tablet computer in San Francisco and said the device will go on sale in the U.S. in March. The video pick of the week is an interview with European Central Bank council member Axel Weber, who discussed the bank’s exit strategy, monetary policy and the risk of a sovereign default in Greece. Click on the VIDEO tab above, and read the story here . Following is a selection of other top stories from the past week, chosen by senior editors at Bloomberg News. Moynihan, Gruebel, Ackermann Plot Response to Regulators in Davos Jan. 29 (Bloomberg) — Brian Moynihan, Oswald Gruebel and Josef Ackermann, leaders of some of the world’s biggest banks, met during the World Economic Forum in Davos, Switzerland, to plot how to reassert their influence with regulators and governments. Paying Big Bonuses Exposes Wall Street’s CEO Succession Failure Jan. 27 (Bloomberg) — Eight days before Christmas, Kenneth D. Lewis took the stage for his last public act as chief executive officer of Bank of America Corp. Hundreds of his workers watched from red velvet seats in Charlotte, North Carolina’s McGlohon Theater, a former Baptist church with tall stained-glass windows and a Byzantine dome. Greek Bonds Show Waning Investor Faith It Will Avoid Bailout Jan. 29 (Bloomberg) — Greece is losing the confidence of bondholders that it will reduce the largest budget deficit in the European Union amid increased speculation that the country won’t be able to meet its debt obligations. Also see “ EU Has No Greek ‘Plan B;’ Finance Chief Pledges Cuts .” Toyota Falls as Widening Recalls, Sales Halt Tarnish Reputation Jan. 28 (Bloomberg) — Toyota Motor Corp., the world’s largest carmaker, fell in Tokyo as it expanded a U.S. recall by more than 1 million vehicles to 5.35 million, adding to concerns its reputation for quality may be permanently tarnished. Also see “ Toyoda Shrinks Carmaker to Regain Quality Control ” and “ Toyota’s U.S. Dealers May Lose $2.47 Billion a Month .” Japan’s Ratings Outlook Cut on Lack of Hatoyama Plan Jan. 26 (Bloomberg) — Japan’s sovereign credit rating outlook was lowered by Standard and Poor’s on concern Prime Minister Yukio Hatoyama’s administration lacks a plan to rein in the world’s largest debt load. Harvard Star-Gazer Sasselov Maps Space Frontier From Davos Jan. 26 (Bloomberg) — Some 5,000 light-years from this week’s World Economic Forum and the worst earthly economic crisis since the Great Depression, astronomer Dimitar Sasselov is charting the New Frontier for investment capital over a bespoke iPhone app that connects with a planet called Sheila. The five most-read opinion columns from the past week: 1. Ten Stocks I Wouldn’t Touch With a 10-Foot Pole: John Dorfman 2. Goldman Parachute Awaits Geithner to Ease Fall: Caroline Baum 3. Blankfein Avoids Apology as London Risks Suicide: Mark Gilbert 4. Banker Brothel Escapes Obama’s Populist Attack: David Reilly 5. The Pelosi Fed Is the Dollar’s Worst Nightmare: Caroline Baum The top 10 most-read stories on Bloomberg.com for the past week (excluding daily market coverage): 1. Fed Weighs Interest on Reserves as New Policy Rate 2. Wall Street Firms Cut Pay, ‘Buckling’ to Washington 3. Apple’s Jobs Unveils $499 Tablet Device Named IPad 4. WEF Chief Security Officer Dies in Probable Suicide 5. Fed Keeps ‘Extended Period’ Pledge; Hoenig Dissents 6. Stunned Wall Street Firms Don’t Want War With Obama 7. Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds 8. Fed May Take Risk MBS Program End Won’t Hurt Housing 9. U.S. Economy: Existing Home Sales Fell in December 10. U.S. Growth Jumps 5.7%, Fastest Pace in Six Years # # -0- Jan/29/2010 18:51 GMT

Read the full article →

Tesla IPO On The Way

January 29, 2010

NEW YORK — Electric car manufacturer Tesla Motors Inc. said Friday it plans to sell stock to the public. The company, based in Palo Alto, Calif., did not disclose in a filing with the Securities and Exchange Commission specifically how much it plans to raise though it listed $100 million as a placeholder figure. The actual amount it raises could be higher. Tesla also did not give a date for when it plans to launch the IPO, nor did it say how many shares it would sell or at what price. A Tesla IPO has been widely anticipated. The company has garnered attention for its high-end Roadster, an all-electric sports car that retails for $109,000. The two-door Roadster is the only model Tesla currently sells, but the company plans to start selling a four-door sedan, the Model S, in 2012. The Model S is slated to go for $49,900 when including a federal tax credit. That car is designed to travel as far as 300 miles on a three- to five-hour charge. The company has not been profitable. Since its founding in 2003, it has lost $236.4 million, according to its filing. During the first nine months of 2009, it lost $31.5 million. The company said it has $106.5 million in cash as of Sept. 30. Tesla said it has sold 937 Roadsters as of Dec. 31. The company has 10 stores in U.S. and Europe and disclosed plans to double that by end of the year. The company said it hopes to have 50 stores “within the next several years. Tesla disclosed some of its biggest stakeholders in its filing. CEO Elon Musk, 38, a co-founder of PayPal and chairman of spaceship developer Space Exploration Corp., is the biggest shareholder by far with more than 81 million shares in the company. Venture capital and other investment firms make up the bulk of Tesla’s other large investors. They include Blackstar Investco LLC, Al Wahada Capital Investment LLC and affiliates of VantagePoint Venture Partners and Valor Equity Partners. To help it build the Model S, the Department of Energy agreed to extend Tesla a $465 million loan last June. That money came from a pool Congress set aside in 2007 to help automakers develop fuel-efficient technology. Ford Motor Co., Nissan Motor Co. and other carmakers have also received loans from the fund. Tesla’s loan could give the government a stake in the automaker when it goes public. According to the filing, the Energy Department received warrants to purchase more than 9 million shares of Tesla when the loan closed on Jan. 20. David Minlow, president of the IPO research firm IPOfinancial.com, called Tesla’s intent to go public a “warning shot across the bow” of the automotive industry. But he cautioned that the company is not yet making a profit and will have to show investors it can produce cars on a large scale. “I don’t believe that just the sex appeal of the product and the name that goes with it is going to automatically convert into blind optimism on the part of investors,” Minlow said. Several high profile investment banks are underwriting the offering, including Goldman Sachs & Co., Morgan Stanley, J.P. Morgan and Deutsche Bank Securities.

Read the full article →

Dennis Santiago: Pondering Moving Credit Card Debt

January 29, 2010

For most consumers the closest one ever gets to the world of finance orbits will involve two things. The mortgage and one’s credit card(s). This story is about the credit card. One of the fairly common questions arriving in the Move Your Money asks about whether it’s also a good idea to move one’s credit card account. Credit cards, or more precisely revolving unsecured debt, is a form of lending where a bank takes the extraordinary chance of extending you credit based on the statistical probability that you can and will pay your debts. The system makes it’s money on two ends of the candle. When you buy something with a credit card the merchant pays a processing fee on each and every purchase. The amount varies depending on the payment processor. This front end cost permeates all of merchandizing as any business person who takes this form of payment will attest. Your purchases then go into your credit card balance and if you pay it off immediately the system has still made it’s money from your contribution to net cash movement within the economy. If you carry a balance, the bank earns interest from it’s unsecured loan to you. These rates can vary from favorably low to strangely high. if you are late on a payment, the credit card issuer furthers earns fees and penalties from you. These are designed to hurt to the point that a rational person will tend to avoid such events to the extent possible. That’s the nominal plan. Those strangely high interest rates are driven by the fact that credit card lending is a business that — by it’s very nature – is beset by risks. There are built-in loses that are part of the business. Fighting fraud costs a lot of technology just in case you’ve been under a Rip van Winkle blanket and haven’t noticed the extent to which the industry now goes to find and eliminate identity theft as quickly as possible. Quite frankly, I fully expect to see more of the biometric technology presently used for military security become part of the electronic money landscape at some point. Struggling economies also increase loss rates and what we’ve been going through in this country does relect in the numbers. U.S. Bank Issued Credit Cards Period # of Issuers Unsecured CRCD Balance Annualized Gross Defaults Loss Given Default, % Unused Commitments 200909 1,598 $392,973,995 1,034.6 bp 92.33% $3,284,033,122 200906 1,632 $398,232,789 992.3 bp 92.18% $3,394,681,251 200903 1,671 $403,071,544 893.7 bp 91.64% $3,536,204,333 200812 1,705 $444,636,764 567.6 bp 87.47% $3,932,540,761 200809 1,739 $411,627,114 583.4 bp 86.47% $4,387,088,355 200806 1,775 $396,047,252 604.2 bp 85.74% $4,505,530,798 200803 1,811 $386,853,839 593.3 bp 84.68% $4,498,291,240 200712 1,829 $422,481,246 444.2 bp 83.04% $4,468,170,745 200709 1,863 $384,539,907 475.5 bp 83.62% $4,335,767,215 200706 1,890 $372,853,337 481.6 bp 82.52% $4,206,027,192 200703 1,909 $354,169,276 515.4 bp 82.55% $4,082,267,768 200612 1,942 $384,979,758 414.6 bp 81.61% $3,930,025,290 amounts in $1000′s unless specified. Notice that the amount of unsecured credit balance outstanding really doesn’t change that much over time. It’s around $400 billion, roughly 1/2 the amount of checking account deposits in the banking system as a whole. All those commercials enticing you move your balances from one issue to another are about to make total sense to you. It’s a zero sum game. The issuers are trying to get as much of your credit card balance under their tent because maximizing assets under management means more interest earnings per operating period. What will moving your balances do? Well let’s look at the market split between big and little banks. Credit Cards in Larger Banks Over $65 Billion Assets Period # of Issuers Unsecured CRCD Balance Annualized Gross Defaults Loss Given Default, % Unused Commitments 200909 20 $268,088,996 1,070.4 bp 93.19% $2,094,538,588 200906 17 $269,898,120 1,005.4 bp 93.04% $2,166,232,535 200903 20 $271,633,757 897.5 bp 92.65% $2,248,489,873 200812 21 $295,786,978 550.3 bp 87.51% $2,573,530,573 200809 19 $281,226,426 552.1 bp 86.41% $2,848,660,449 200806 20 $270,393,711 582.1 bp 85.46% $2,910,749,620 200803 18 $263,837,123 568.2 bp 83.98% $2,887,563,170 200712 17 $285,303,358 457.0 bp 84.45% $2,839,759,737 200709 17 $261,475,251 490.1 bp 84.51% $2,737,686,278 200706 15 $253,170,089 485.8 bp 83.75% $2,668,453,751 200703 15 $239,230,226 527.3 bp 83.77% $2,633,607,895 200612 16 $262,438,291 437.7 bp 83.70% $2,569,052,530 amounts in $1000′s unless specified. versus, Credit Cards in Smaller Banks Under $65 Billion Assets Period # of Issuers Unsecured CRCD Balance Annualized Gross Defaults Loss Given Default, % Unused Commitments 200909 1,578 $124,884,999 957.8 bp 90.27% $1,189,494,534 200906 1,615 $128,334,669 964.7 bp 90.31% $1,228,448,716 200903 1,651 $131,437,787 885.8 bp 89.53% $1,287,714,460 200812 1,684 $148,849,786 602.1 bp 87.41% $1,359,010,188 200809 1,720 $130,400,688 650.7 bp 86.58% $1,538,427,906 200806 1,755 $125,653,541 651.8 bp 86.27% $1,594,781,178 200803 1,793 $123,016,716 647.1 bp 86.00% $1,610,728,070 200712 1,812 $137,177,888 417.8 bp 79.83% $1,628,411,008 200709 1,846 $123,064,656 444.7 bp 81.54% $1,598,080,937 200706 1,875 $119,683,248 472.6 bp 79.86% $1,537,573,441 200703 1,894 $114,939,050 490.6 bp 79.83% $1,448,659,873 200612 1,926 $122,541,467 365.1 bp 76.24% $1,360,972,760 amounts in $1000′s unless specified. The above means that 2/3rd’s of the interest and fees income from the U.S. credit card market goes to roughly 20 larger banks. Should that infuriate you? Maybe, maybe not. The jury’s still out for me on this one. On the one hand, those 20 large institutions are also the ones who — by necessity — are spending the most on advancing the state of the art of fraud prevention. That’s actually a mission critical “privatized” national investment being made right now. If these issues are not resolved the future of electronic money WILL (not a maybe) be threatened. My personal worry is that 20 innovators mostly doing the same things might not be enough for such a national interest priority. Spreading the balances would tend to make the fraud solutions misson more important to more banks. Necessity still being the true mother of invention, this might accelerate the process as more banks invest in alternative technology approaches to securing their credit cards. Ideally, it sparks a new contest for banks to retain credit card customers by offering them a more risk free services solution. That in turn means the cost of doing business lessens for those banks that can offer superior fraud protected cards and we should see both interest and fees drop commensurately. If you were hoping for an emotional argument from me on this one, it ain’t coming. I do believe the issue here is more strategic than that. In the meantime, default rates on this nearly static balance have risen considerably in the last few years. Today’s math lesson is that a basis point is 1/100th of a percent. By September of 2009 the default rate on credit cards was above 1,000 basis points. That’s over 10 percent of these credit card loans faltering. Doubling the loss rate on your business is enough to make anyone unhappy and there’s no lack of sharing the misery when it comes to credit cards. Most notable is the fact that unused commitments, basically the amount of credit limit extended to consumers by the industry is shrinking. From a peak of $4.5 trillion in June 2008, it’s come down a dramatic 27 percent to around $3.3 trillion as of last September. That’s a real hit measuring how much the convenience of swipe to pay has been hurt in this country. These effects look to be impacting both big and small credit card issuers equally and that’s a sign that this is a systemic economic phenomenon and not an advantage to one strata versus another within an industry issue. That my friends is what the academic concept of a “credit crunch” means to ordinary folk.

Read the full article →

Video: Jeremy Siegel Says Sub-$70 Oil Could Spur Stock Advance: Video

January 29, 2010

Jan. 29 (Bloomberg) — Jeremy Siegel, professor of finance at the Wharton School at the University of Pennsylvania and Michael Gurka of Empower Global Funds talk with Bloomberg’s Matt Miller, Carol Massar and Julie Hyman about the outlook for stocks and President Barack Obama’s plan to regulate banks. (Source: Bloomberg)

Read the full article →

Raymor Announces Approval of a Private Investment Offer of $6,500,000 and Reorganization by the Court

January 29, 2010

MONTREAL, QUEBEC–(Marketwire – Jan. 29, 2010) – Raymor Industries Inc. (“Raymor” or the “Corporation”) (TSX VENTURE: RAR) is pleased to announce that the Superior Court of Quebec has approved on January 27, 2010 an offer contained in a letter dated December 4, 2009, providing the details of a proposed private investment (the “Transaction”) by Georges Durst, Rolland Veilleux and another investor who joined the buying group (collectively, the “Buyer”), to invest $6,500,000 in Raymor and related restructuring transactions, including the cancellation of the issued and outstanding common shares of Raymor for no consideration.

Read the full article →

Govt. weighs ICSC accelerated-depreciation proposal

January 29, 2010

An ICSC proposal that would enhance depreciation benefits for investors could help jump-start commercial real estate markets and reduce lender losses, proponents say. Under the proposal, commercial real estate investors who provide new equity to a

Read the full article →

Community Capital Corp. Reports Operating Results (10-Q/A)

January 29, 2010

of Business Operations: A significant portion of our loan portfolio is comprised of loans secured by either commercial real estate or single family homes that are under construction. As of September 30, 2009, $177.6 million, or 29.5% of our total loans,

Read the full article →

Finish Line Board Elects New Director Mark S. Landau

January 29, 2010

a member of the investment committee at Goldenbridge Advisors in New York, a venture that invests in commercial real estate debt

Read the full article →

Ben Protess: Congressman to AIG: Show Us Your E-mail

January 29, 2010

You might imagine that by now the public would know every last cause and consequence of the government’s $180 billion bailout of insurance giant American International Group. The AIG deal has been the subject of dozens of public hearings (including a confrontational one this week), an inspector general’s report last fall and a recent congressional subpoena that produced some 250,000 documents. But many people inside and outside the government believe the whole story has yet to be told. Among them is Rep. Steve Israel (D-N.Y.), who this week introduced a bill that he said would “get to the bottom of the AIG collapse.” Israel’s Financial Crisis Public Disclosure Act would require the Treasury Department to obtain and publicly release all internal AIG e-mail related to the current financial crisis. Treasury would put the results online for citizens and journalists to examine. “My bill will force AIG to publicly open company e-mails from top employees so we can find out what they were thinking as they made decisions that wrecked our economy,” Israel said in a statement. The Investigative Fund previously reported on calls for AIG’s trustees to make public a decade’s worth of AIG’s e-mail and internal accounting documents. Experienced fraud investigators, including former New York Governor Eliot Spitzer and University of San Diego Law School professor Frank Partnoy, have made that request. So far the trustees – appointed by the Federal Reserve Bank of New York, which made the original decision to bail out AIG – are resisting the idea. Most recent scrutiny of the bailout has centered on the Fed’s decision to use about $24 billion in government money to help AIG settle deals with big banks. AIG had sold the banks insurance on risky mortgage investments. When the insured investments soured, AIG owed billions to Goldman Sachs, among others. Instead of honoring the insurance, AIG used taxpayer funds to buy the mortgage investments from the banks at 100 cents on the dollar, even though they were worth much less. Rep. Darrell Issa of California, the ranking Republican on the Committee on House Oversight and Government Reform, recently released e-mails showing that the New York Fed kept details of these payouts secret while now-Treasury Secretary Timothy Geithner was in charge of the New York Fed. Rep. Ed Towns (D-N.Y.), chairman of the oversight committee, ultimately subpoenaed the New York Fed for all documents related to the payouts, including Geithner’s e-mail and phone logs. The documents showed Geitner approved the full payouts, but did not suggest he was involved in concealing them. E-mails show that some Fed officials questioned the decision to pay the banks in full. One document also indicated that Goldman had approached AIG about tearing up the insurance contracts months before the government got involved. Still, for all this congressional digging, much remains unknown about the causes of AIG’s collapse and we surely haven’t heard the last revelation.

Read the full article →

Beth Pinsker: Bank of America Website Down

January 29, 2010

If you’ve been trying to log onto Bank of America’s web site today, with no luck, it’s not your imagination or your computer’s fault — B of A’s Web site is down. Or at least it was at the time of this writing — and had been throughout much of Friday morning and the early afternoon. To read more, go to Walletpop.com .

Read the full article →

Research and Markets: 2010 Global Real Estate Report

January 29, 2010

- (Business Wire) Research and Markets (http://www.researchandmarkets.com/research/b8b2f6/2010_global_real_e) has announced the addition of the “2010 Global Real Estate Report” report to their offering. The 64 page 2010 Global Real Estate Report provides

Read the full article →

Secret Banking Cabal Emerges From AIG Shadows: David Reilly

January 29, 2010

Commentary by David Reilly Jan. 29 (Bloomberg) — The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. After this week’s congressional hearing into the bailout of American International Group Inc. , you have to wonder if those folks are crazy after all. Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials. We’re talking about the Federal Reserve Bank of New York , whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny. The New York Fed is in the hot seat for its decision in November 2008 to buy out, for about $30 billion, insurance contracts AIG sold on toxic debt securities to banks, including Goldman Sachs Group Inc. , Merrill Lynch & Co., Societe Generale and Deutsche Bank AG , among others. That decision, critics say, amounted to a back-door bailout for the banks, which received 100 cents on the dollar for contracts that would have been worth far less had AIG been allowed to fail. That move came a few weeks after the Federal Reserve and Treasury Department propped up AIG in the wake of Lehman Brothers Holdings Inc. ’s own mid-September bankruptcy filing. Saving the System Treasury Secretary Timothy Geithner was head of the New York Fed at the time of the AIG moves. He maintained during Wednesday’s hearing that the New York bank had to buy the insurance contracts, known as credit default swaps, to keep AIG from failing, which would have threatened the financial system. The hearing before the House Committee on Oversight and Government Reform also focused on what many in Congress believe was the New York Fed’s subsequent attempt to cover up buyout details and who benefited. By pursuing this line of inquiry, the hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve. This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank. Geithner’s Bosses The New York Fed is one of 12 Federal Reserve Banks that operate under the supervision of the Federal Reserve’s board of governors, chaired by Ben Bernanke . Member-bank presidents are appointed by nine-member boards, who themselves are appointed largely by other bankers. As Representative Marcy Kaptur told Geithner at the hearing: “A lot of people think that the president of the New York Fed works for the U.S. government. But in fact you work for the private banks that elected you.” And yet the New York Fed played an integral role in the government’s bailout of banks, often receiving surprisingly free rein to act as it saw fit. Consider AIG. Let’s take Geithner at his word that a failure to resolve the insurer’s default swaps would have led to financial Armageddon. Given the stakes, you might think Geithner would have coordinated actions with then-Treasury Secretary Henry Paulson . Yet Paulson testified that he wasn’t in the loop. “I had no involvement at all, in the payment to the counterparties, no involvement whatsoever,” Paulson said. Bernanke’s Denials Fed Chairman Bernanke also wasn’t involved. In a written response to questions from Representative Darrell Issa , Bernanke said he “was not directly involved in the negotiations” with AIG’s counterparty banks. You have to wonder then who really was in charge of our nation’s financial future if AIG posed as grave a threat as Geithner claimed. Questions about the New York Fed’s accountability grew after Geithner on Nov. 24, 2008, was named by then-President- elect Barack Obama to be Treasury Secretary. Geither said he recused himself from the bank’s day-to-day activities, even though he never actually signed a formal letter of recusal. That left issues related to disclosures about the deal in the hands of the bank’s lawyers and staff, rather than a top executive. Those staffers didn’t want details of the swaps purchase to become public. New York Fed staff and outside lawyers from Davis Polk & Wardell edited AIG communications to investors and intervened with the Securities and Exchange Commission to shield details about the buyout transactions, according to a report by Issa. That the New York Fed, a quasi-governmental body, was able to push around the SEC, an executive-branch agency, deserves a congressional hearing all by itself. Later, when it became clear information would be disclosed, New York Fed legal group staffer James Bergin e-mailed colleagues saying: “I have to think this train is probably going to leave the station soon and we need to focus our efforts on explaining the story as best we can. There were too many people involved in the deals — too many counterparties, too many lawyers and advisors, too many people from AIG — to keep a determined Congress from the information.” Think of the enormity of that statement. A staffer at a body with little public accountability and that exists to serve bankers is lamenting the inability to keep Congress in the dark. This belies the culture of secrecy obviously pervasive within the New York Fed. Committee Chairman Edolphus Towns noted during the hearing that the bank initially refused to disclose even the names of other banks that benefited from its actions, arguing this information would somehow harm AIG . ‘Penchant for Secrecy’ “In fact, when the information was finally released, under pressure from Congress, nothing happened,” Towns said. “It had absolutely no effect on AIG’s business or financial condition. But it did have an effect on the credibility of the Federal Reserve, and it called into question the Fed’s penchant for secrecy.” Now, I’m not saying Congress should be meddling in interest-rate decisions, or micro-managing bank regulation. Nor do I think we should all don tin-foil hats and start ranting about the Trilateral Commission . Yet when unelected and unaccountable agencies pick banking winners while trying to end-run Congress, even as taxpayers are forced to lend, spend and guarantee about $8 trillion to prop up the financial system, our collective blood should boil. ( David Reilly is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: David Reilly at dreilly14@bloomberg.net

Read the full article →

Obama, Alito Dis Each Other in Free Speech Brawl: Ann Woolner

January 29, 2010

Commentary by Ann Woolner Jan. 29 (Bloomberg) — Whether you think it outrageous or terrific that the U.S. Supreme Court last week ruled corporate funds can pay for political ads, or if you don’t much care, there is humor to be mined in a flap the decision created this week. The case is about free speech in politics, right? But when President Barack Obama slammed the decision during his State of the Union speech, conservatives (who mostly like the ruling) ripped him for speaking so freely. Free speech has its limits, even in politics, it would seem. And yet, following a Republican tradition, ex-President George W. Bush talked down the federal bench all the time. It was a campaign theme for him to trash “activist judges.” Apparently it’s fine for presidents or candidates to excoriate rulings when the justices aren’t in the same room. But it’s an appalling breach of decorum for the president to do it right to the justices’ faces. Never before had a president used this constitutionally mandated and, now, nationally televised speech to do so. Why, it’s downright rude. Six of the nine justices, all of them robed, occupied seats roughly beneath Obama’s nose, in full view of the cameras. As is their custom, they sat there stone-faced throughout the talk to show that they are above the partisan fray. When Obama delivered lines that brought Democrats or even Republicans in the chamber to their feet in thunderous applause, the justices hardly even blinked. All the justices sat expressionless. All, save one. Alito’s Creased Brow When Obama predicted the ruling would “open the floodgates for special interests,” Justice Samuel Alito pulled his chin in, closed his eyes, shook his head “no” and creased his brow. Then he mumbled something which, to untrained lip readers such as myself, looked like “that’s not true.” Whatever he said, his head shaking made clear he thought the president had said something wrong. However inaudible, it was the judicial equivalent of Representative Joe Wilson shouting “You lie” when Obama addressed Congress in September on health care. So while the right slammed Obama for speaking his mind, the left took out after Alito for mouthing his. That was “a serious and substantive breach of protocol,” Glenn Greenwald wrote for Salon. It “only further undermines the credibility of the court” for a justice to show himself to be so partisan. Court Precedent Isn’t it a tad late to worry about that? We don’t know exactly which part of Obama’s remarks Alito was reacting to. It could have been the claim that the ruling eviscerated 100 years of law. Or it might have been the part about floodgates opening for special interests. In any case, the 5-4 ruling didn’t completely overturn a century’s worth of restrictions. But it did throw out what had been the practice for decades under federal law and court precedent. Whether last week’s ruling will open floodgates of corporate spending is anyone’s guess. No question that companies and, presumably, unions can now run pre-election ads. And they no longer have to form political action committees and seek contributions from individuals to do it. They can pour corporate funds into political advertising if they want, though they still can’t contribute directly to a candidate’s campaign fund. And this brings us to yet another twist. Conservatives define a judicial activist as a judge who legislates from the bench, who tosses out perfectly good laws simply because he doesn’t like them. Showing Disdain That is exactly what the conservative wing of the court, plus swing voter Anthony Kennedy , did when it ruled in the election case last week. The justices showed disdain, not the much-heralded deference, to elected lawmakers who held hearings and found facts and hammered away for years to fashion the law that five justices so cavalierly set aside. And the court did it even though no one asked it to. Not content with the mundane task of answering a narrow question, the justices stretched to reverse practices that neither side had complained about. And they threw out precedent, too, which they aren’t supposed to do so casually. How much more activist can you get? This is the opposite of judicial restraint. Change in Composition As the court’s dissenters pointed out, the only thing that had changed between the time of the court’s previous rulings on the topic and the latest one was the composition of the court. Let’s see. They must be talking about Bush’s two appointees, which were his answer to judicial activism. Ha! But that’s not all, as the infomercials say. While on the subject of campaign finance, let’s recall that candidate Obama pledged to forgo private contributions in favor of public funding for his campaign but changed his mind when he realized he could get more money from donors. Isn’t it funny that he now wants laws to restrict corporate financing of elections? So while I think Obama was confrontational during his speech and Alito thin-skinned, the irony of it all makes the whole thing amusing. To top it off, one of Obama’s supposed goals in the speech was to try to ease partisan sniping, to become a balm during these contentious times. What a hoot. But come to think of it, it isn’t especially funny. ( Ann Woolner is a Bloomberg News columnist. The opinions expressed are her own.) Click on “Send Comment” in sidebar display to send a letter to the editor. To contact the writer of this column: Ann Woolner in Atlanta at awoolner@bloomberg.net .

Read the full article →

Tuberculosis Cut in HIV Patients With Vaccine Drawn From Dirt-Dwelling Bug

January 29, 2010

By Simeon Bennett Jan. 29 (Bloomberg) — An experimental vaccine based on a germ found in soil cut tuberculosis infections among people with HIV, the first time a shot has been shown to reduce cases of the most common AIDS-related cause of death in poor nations. The shots reduced TB infections by 39 percent in patients who received them compared with those who got a placebo, according to a study published online by the journal AIDS today. The trial was stopped early, partly because of the clear effect of the vaccine, the study said. Tuberculosis and HIV are a lethal combination , each speeding the other’s progress, according to the World Health Organization. The only existing TB vaccine — the Bacillus Calmette-Guérin, or BCG , shot, which has been used to protect newborns since 1921 — has “minimal or no protective effect” on adults, researchers led by Charles von Reyn at Dartmouth Medical School said in the study. “Development of a new vaccine against tuberculosis is a major international health priority, especially for patients with HIV infection,” von Reyn and colleagues said in a statement . Tuberculosis has plagued man since prehistoric times. It infects about 8.8 million people and kills 1.7 million each year, according to the WHO. Medicines used to battle the bacterium are increasingly failing because the airborne bug has mutated, spawning strains that aren’t defeated by even the most powerful antibacterial drugs. Immune Response The vaccine is based on a disarmed form of Mycobacterium vaccae. The germ has been shown in previous studies to boost the immune response to TB in patients who were vaccinated as children with the BCG shot. Von Reyn and colleagues recruited 2,013 HIV patients in Tanzania who received BCG when young. They received five doses of the vaccine over a year, then were monitored every 3 months for a median of 3.3 years. Among those who got the vaccine, 33 were infected with TB, compared with 52 given a placebo. A further trial of a three-dose course should be considered, the authors said. Marketing rights to the vaccine are owned by closely held Immodulon Therapeutics Ltd. The London-based company will work with the Aeras Global TB Vaccine Foundation , based in Rockville, Maryland, to improve manufacturing methods for the vaccine to produce larger quantities of the shots for further research and use, according to the statement. The study was sponsored by the U.S. National Institutes of Health. To contact the reporter on this story: Simeon Bennett in Singapore at sbennett9@bloomberg.net

Read the full article →

Bill, Melinda Gates Pledge $10 Billion to Develop Vaccines for the Poor

January 29, 2010

By Phil Serafino and Yuriy Humber Jan. 29 (Bloomberg) — Bill and Melinda Gates said their foundation will commit $10 billion over the next decade to help develop vaccines for the world’s poorest countries, a project that may save the lives of 8.7 million children. The initiative aims to vaccinate 90 percent of children in developing nations, including new immunizations for pneumonia and severe diarrhea, the foundation said in a statement today. The funding is in addition to $4.5 billion that the charity already pledged to vaccine research and delivery. Governments and the private sector need to contribute more money as well, Gates said. “Here is where you can take a donation and really map it, see it saving lives,” Bill Gates , the co-founder and former chief executive officer of Microsoft Corp., said at a news conference in Davos, Switzerland, the site of the World Economic Forum this week. Gates’s Seattle-based charity, the world’s biggest, has made health care for the poor the focus of its work in an effort to tackle infectious diseases like AIDS, malaria and tuberculosis. The foundation has helped fund GlaxoSmithKline Plc ’s research into a malaria vaccine and has contributed to Sanofi-Aventis SA’s work on a shot for dengue fever. The foundation used a model developed at the Johns Hopkins Bloomberg School of Public Health to project the impact of vaccines on childhood deaths over the next decade. Vaccinations By vaccinating 90 percent of the population in developing countries, the deaths of about 7.6 million children under the age of 5 could be prevented in the next decade, according to the Gates foundation. An additional 1.1 million lives would be saved by the introduction of a malaria vaccine beginning in 2014, the foundation said. The United Nations will pay an average of about $2.94 a shot this year for a vaccine against five deadly childhood diseases, officials said in November. Four companies make the five-in-one shots — Crucell NV , Glaxo, Panacea Biotec Ltd and Sanofi’s Shantha Biotechnics. The shots are given to children in their first year of life to protect against Haemophilus influenzae type B, hepatitis B , tetanus, diphtheria, and pertussis. Glaxo wants to file for regulatory approval by early 2012 for its malaria vaccine, Chief Executive Officer Andrew Witty said last week. The foundation has spent $200 million developing the shot, while the company has invested $300 million, Alexandra Harrison, a Glaxo spokeswoman, said in an interview. ‘Transformative’ The Gates announcement “is transformative for research into diseases of the developing world,” Jean Stephenne , the head of Glaxo’s biologicals unit, said in an e-mailed statement today. “After clean water, vaccines are the most effective public- health intervention that can be offered in these countries.” The foundation is part of the GAVI Alliance , a health partnership from the private and public sectors that was formed 10 years ago at the World Economic Forum to reduce the price of vaccines for people in poor nations. “Investments in global immunization have yielded an extraordinary return,” Julian Lob-Levyt , the alliance’s chief executive officer, said in the statement. The alliance has saved 5 million lives by increasing access to vaccines, he said. “The potential to make bigger strides in the coming decade is even more exciting.” The Bloomberg School of Public Health, located in Baltimore, is named for New York Mayor Michael Bloomberg , founder and majority owner of Bloomberg News parent Bloomberg LP. Other charities have teamed up with vaccine manufacturers to develop immunizations for diseases that mostly strike the poor. Merck & Co. and The Wellcome Trust in September formed a not-for- profit venture in India that aims to create new immunizations and make existing vaccines more effective in the developing world. To contact the reporter on this story: Yuriy Humber in Davos at yhumber@bloomberg.net ; Phil Serafino in Paris at pserafino@bloomberg.net

Read the full article →

McConnell Backs Commission to Focus on Spending Cuts, Not Increasing Taxes

January 29, 2010

By Lorraine Woellert Jan. 29 (Bloomberg) — Senate Republican Leader Mitch McConnell endorsed a deficit-cutting commission that would focus only on reducing spending, including on Medicare and Social Security, and take any tax increases off the table. “Looking at the entitlements, all of them, is important,” McConnell, of Kentucky, said in an interview on Bloomberg Television’s “Political Capital With Al Hunt ” airing this weekend. He said the government “has been on a spending spree” and called President Barack Obama ’s proposed freeze on discretionary spending “tepid.” “The problem we have is not because we tax too little,” McConnell said while ruling out tax increases. “We need to look at spending across the board, and a spending-reduction commission might well be the best way to go.” Obama said he’ll use his executive power to create a panel to examine potential tax increases as well as spending cuts, subject to congressional approval, after the Senate on Jan. 26 rejected a bipartisan plan to set up a similar panel. McConnell helped defeat the legislation, which was offered by Budget Committee Chairman Kent Conrad , a North Dakota Democrat, and Senator Judd Gregg , a New Hampshire Republican. Obama’s proposed discretionary spending freeze doesn’t include national security-related agencies and would affect only about one-eighth of all federal spending. On Jan. 28, the Senate voted to increase the federal debt limit by $1.9 trillion, to $14.3 trillion. Terror Trial On lawmakers’ efforts to move the trial of Sept. 11 terror suspect Khalid Sheikh Mohammed out of lower Manhattan, McConnell said he should be tried at the U.S. prison at Guantanamo Bay, Cuba. The Obama administration is considering new locations for the trial after lawmakers and New York officials objected to the Manhattan venue. New York Mayor Michael Bloomberg said today he talked with “high level” officials in the Obama administration, telling them it “would be better to do it elsewhere,” and “they understand and they’re trying to do something.” He has pegged the cost at about $1 billion. Bloomberg is the founder and majority owner of Bloomberg News parent Bloomberg LP. McConnell predicted that political opposition would force Obama to change the trial location. “They’re going to have to,” he said. “Now you’ve got the mayor, you’ve got the New York members of Congress backing away from positions they’d previously advocated.” Ill-Timed Tax On the economy, McConnell said Obama’s proposed tax on big banks and other financial institutions is ill-timed. “If you want to get the economy going again, it strikes me if you look at the first year of this administration and this Congress, what it will be mostly known for is advocating tax increases, running up astonishing debts and to some extent rattling the market,” McConnell said. “That’s not a great way to begin to get us out of this economic slowdown.” He said he’d be “more open” to such a tax if it were applied to all recipients of aid under the Troubled Asset Relief Program. “The administration chooses to leave out automobile companies, presumably because they’re unionized,” McConnell said. Responding to the president’s State of the Union plea to Republicans to compromise on a health-care bill, McConnell said a Democratic plan to push legislation through will be “a pretty tough sell.” Democrats are considering circumventing Republican opposition by having the House pass the Senate’s version and then using a parliamentary maneuver, known as budget reconciliation, to modify the bill with simple majorities in both chambers. Massachusetts Election The Jan. 19 special-election victory of Republican Scott Brown in Massachusetts deprived Democrats of the 60-vote supermajority they need to defeat Republican delaying tactics in the Senate. McConnell said lawmakers must sit down in a public meeting to negotiate differences over the legislation. Republicans want to cut the bill’s cost and limit malpractice lawsuits against doctors and hospitals. “There are a number of things that we ought to be able to do by addressing the problem, which Republicans believe is the cost,” McConnell said. “We don’t think it’s a good idea to have the government in effect take over one-fifth of the economy. And we do know for sure the American people are not interested in that.” Debt Limit The Senate’s decision to increase the federal debt limit by $1.9 trillion would be enough to accommodate borrowing for the rest of 2010, lawmakers say. The House will take up the measure next week. The increase is more than twice as much as any of the four debt-limit increases lawmakers approved in the past two years. This year’s deficit is projected to reach $1.35 trillion, or about 9 percent of the economy. “The whole budget needs to be looked at,” McConnell said. McConnell said Republicans will have “a good election” in November, stopping short of predicting the party would win enough seats to gain control of the Senate. “I don’t know what’s going to be the environment nine months from now, but if the election were held today we’d have a very good election, and that’s what we’re hoping for,” McConnell said. Republicans would need to pick up 10 seats in order to take control of the Senate. At least 10 senators have announced their intention not to run, including four Democrats. To contact the reporter on this story: Lorraine Woellert in Washington at lwoellert@bloomberg.net .

Read the full article →

Molinaro Said to Pull Out of Pali Talks on Possible Braver Stern Merger

January 29, 2010

By Yalman Onaran

Read the full article →

Pentagon Is Seeking to Sell Taiwan Missiles, Vessels Valued at $6 Billion

January 29, 2010

By Tony Capaccio and Viola Gienger Jan. 29 (Bloomberg) — The U.S. Defense Department today proposed to sell Taiwan weapons, helicopters and ships valued at about $6.4 billion, a move that may complicate the Obama administration’s plans to improve ties with China. The proposal includes advanced Lockheed Martin Corp. Patriot missiles at a cost of $2.8 billion, UH-60 Blackhawk helicopters costing $3.1 billion made by United Technologies Corp. , and Boeing Co. Harpoon missiles at a cost of $37 million. The proposal doesn’t grant a long-standing request from Taiwan to buy Lockheed F-16 fighters. The Pentagon notified Congress today of the proposal, and lawmakers have 30 days to object to the sale. Massachusetts Democrat John Kerry , chairman of the Senate Foreign Relations Committee, called the proposed sale “prudent” and said he doesn’t expect any objection from Congress. The U.S. provides armaments to the island nation for its self-defense under the 1979 Taiwan Relations Act, irritating China so much that it cut off military talks after the last sale was announced in October 2008. President Barack Obama’s administration has sought China’s cooperation on Iran, North Korea and climate change, and defense talks resumed in July. China ‘Firmly Opposed’ China is “firmly opposed” to the proposed sale , said Wang Baodong , a spokesman for the Chinese Embassy in Washington. The sale would violate three communiqués that outline understandings between the two nations, Wang said in a telephone interview. “I believe my government will once again request the U.S. side to correct this wrong action to avoid damaging bilateral relations and cooperation between the two sides.” The State Department called in a Chinese Embassy official this morning to notify him of the planned announcement, U.S. administration officials said. China’s opposition isn’t surprising, the officials told reporters on condition of anonymity. Still, the sale probably won’t have a significant effect on the broader relationship because of the range of interests the U.S. and China share, they said. China considers Taiwan a renegade province that should be reunited with the mainland by force if necessary. The U.S. pledge to help Taiwan bolster its defenses aims to balance the long-held American opposition to full independence from China. U.S. officials have long encouraged the two sides to negotiate a resolution. China’s Buildup U.S. officials have expressed concern repeatedly in recent years that China hasn’t been clear about its intentions in undertaking a massive military modernization. China appears to be developing systems aimed at countering U.S. influence in the region with their potential to target bases, ships and planes, according to officials and a Defense Department report last March. The report also said China “is capable of increasingly sophisticated military action against Taiwan.” The mainland had increased its force of mobile short-range missiles based in garrisons opposite Taiwan to as many as 1,150 in September 2008, from as many as 790 in late 2005, according to the report. The administration officials who briefed reporters today defended the planned sale, saying it meets Taiwan’s urgent needs in the face of China’s military modernization while also giving the island’s leaders the confidence to proceed with dialogue aimed at improving ties with the mainland. The sale also demonstrates that the administration will stand by U.S. commitments to partner countries, the officials said. Other Items The sales package proposed to Taiwan includes 60 sets of communications terminals that would allow Taiwanese pilots, sailors and ground troops to exchange instant messages and images of potential Chinese threats. The terminals are valued at $340 million and will be provided by a company selected in a competition, the Pentagon said. Pentagon officials for years have said Taiwan needs to improve its integration of land, air and sea forces with new technology. In addition, the Pentagon proposes transferring to Taiwan two U.S. Osprey-class mine hunting vessels and sonar equipment. Upgrade work valued at $105 million will be provided by a U.S. company selected in a competition. The vessels will be provided by a U.S. company selected in a competition, the Pentagon said. Earlier Sales Today’s proposal follows one in October 2008 for $6.46 billion in weapons, including Patriot anti-missile systems made by Bethesda, Maryland-based Lockheed, and Apache helicopters supplied by Chicago-based Boeing. President George W. Bush approved a range of weapons sales to Taiwan in April 2001, saying the U.S. would do “whatever it took to help Taiwan defend” itself against a Chinese attack. Taiwan received $18.3 billion in U.S. weapons under the Foreign Military Sales program from 1950 to 2006, according to data on the Web site of the Defense Security Cooperation Agency. Under the foreign military sales program, the Pentagon acts as an agent between defense contractors and foreign buyers. Once Congress allows the sales to proceed, the proposals become firm orders only after Taiwan signs contracts with the Pentagon or the companies. To contact the reporters on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net ; Viola Gienger in Washington at vgienger@bloomberg.net .

Read the full article →

Pali’s Merger Talks With Braver Stern, Former Bear CFO Molinaro Break Down

January 29, 2010

By Yalman Onaran

Read the full article →

Davos Dispute Escalates as Policy Makers, Bankers Square Off on Regulation

January 29, 2010

By Simon Kennedy and Christine Harper Jan. 29 (Bloomberg) — Policy makers pushed back at bankers who have warned of excessive and uncoordinated attempts to toughen financial regulation as they jostled for control of an industry that required an unprecedented government bailout. Bank chief executive officers, led by Josef Ackermann of Deutsche Bank AG , are scheduled to meet privately tomorrow with finance ministers and central bankers to keep talks on track and assert their influence on the penultimate day of the World Economic Forum annual meeting in Davos, Switzerland. “Government had to become substantially involved and in that context there is an obligation for those who benefited to carefully consider their obligations,” Lawrence Summers , director of the White House National Economic Council, said today in Davos. “There have been productive discussions, but in some areas, there has been a reluctance to do all that can be done.” Financiers, surprised by President Barack Obama’s embrace last week of a plan to restrict proprietary trading and investing at banks, have argued in Davos that such efforts undermine global cooperation and could jeopardize economic recovery. Officials, including U.K. Chancellor of the Exchequer Alistair Darling and U.S. Congressman Barney Frank , countered that banks shouldn’t argue against reforms. “The big banks, if they think they’re in a position to stop the regulation, they’re deluding themselves,” said Frank, a Massachusetts Democrat who chairs the House Financial Services Committee. “They have no political support.” Bonus Tax Darling, who last month imposed a 50 percent tax on bonuses paid to bankers for 2009, suggested that banks should stay out of the public eye and focus on lending. “It’s in their interest to get off the front pages and do what they’re supposed to do — provide credit to the economy,” Darling said. Obama’s unilateral endorsement of the proposal to limit banks’ size and risk-taking has added impetus to international regulatory efforts, say officials including Swiss National Bank President Philipp Hildebrand , Bank of International Settlements General Manager Jaime Caruana and Hector Sants , chief executive officer of the U.K.’s Financial Services Authority. “If you’re looking specifically at the Volcker-Obama proposal around trading, I actually think that’s helpful,” Sants said. “We’re beginning to see convergence on how we address the too-big-to-fail problem in terms of diminishing the probability of failure.” Saving the System Hildebrand, addressing Credit Suisse AG clients as they ate a lunch of “Zurich style” sliced veal in mushroom sauce today, warned that the free-market system could come under threat unless both sides show the public soon that they’re serious about reform. “We’re jointly in a fight to preserve a market-based financial system,” he said. Bank chief executive officers, including Ackermann and Bank of America Corp.’s Brian T. Moynihan , met in Davos to discuss how to play a bigger role in the regulatory discussion. Ackermann disputed the notion that there was tension between bankers and regulators. “We are having more and more constructive dialogue with regulators,” he said. “We have been advancing reforms. We have changed compensation structures. It’s time to stop the blame.” Moynihan said in an interview that much of the discussion among bankers at a meeting yesterday was about tactics, such as who the executives should approach and when. He said the bankers were concerned that too much regulation could hamper economic growth and that conflicting national approaches need to be avoided. “Both the banks and the regulators think they hold all the cards,” said Harvard Economics Professor Kenneth Rogoff. “The bankers think that when the storm passes nothing will have changed and they can go back to business as usual. Regulators think banks have completely lost the political capital and are ignoring public opinion.” To contact the reporter on this story: Simon Kennedy in Davos at skennedy4@bloomberg.net ; Christine Harper in Davos at charper@bloomberg.net

Read the full article →

U.S. Stocks Drop as Concern Over Technology Earnings Overshadows GDP Data

January 29, 2010

By Nikolaj Gammeltoft and Elizabeth Stanton Jan. 29 (Bloomberg) — U.S. stocks fell, dragging the Standard & Poor’s 500 Index to a three-month low, as disappointing results at technology companies offset government data showing the economy grew at the fastest pace in six years. Microsoft Corp. helped lead technology shares to the biggest drop among 10 groups as Chief Financial Officer Peter Klein said the company has yet to see a recovery in spending on enterprise software. SanDisk Corp., the biggest maker of flash- memory cards, slid 12 percent after its sales forecast fell short of some estimates. The S&P 500 fell for three straight weeks for the first time since July and capped its biggest monthly loss since last February. The S&P 500 slid 1 percent to 1,073.87 at 4:08 p.m. in New York. The Dow Jones Industrial Average fell 53.13 points, or 0.5 percent, to 10,067.33. The Nasdaq Composite Index lost 1.5 percent to 2,147.35. “Expectations have really been high,” said David Chalupnik , who oversees $8 billion as head of equities at First American Funds in Minneapolis. “Earnings have been coming out very strong, but it hasn’t been able to drive the market higher. The best example is Microsoft. They report very good numbers and the stock is down today.” The S&P 500 , which capped its third straight weekly drop, has tumbled 6.6 percent from a 15-month high on Jan. 19 after President Barack Obama called for limits on risk-taking by banks and China moved to restrict lending and cool economic growth. Stocks fell yesterday after Qualcomm Inc. lowered its sales forecast and speculation mounted Greece won’t be able to finance its budget deficit. January Barometer The index is down 3.7 percent year-to-date in its first monthly decline since October and the biggest since it plunged 11 percent last February. The performance of the S&P 500 in January is a reliable predictor of how it will do during the year, according to the Stock Trader’s Almanac. Before last year, when the index dropped 8.6 percent in January and rose 23 percent for the year, the so- called January barometer registered only five major errors since 1950, according to the almanac. The S&P 500 rose as much as 1.1 percent earlier after fourth-quarter economic growth and a gauge of business performance in January beat projections. The Commerce Department said the economy grew at a 5.7 percent rate in the fourth quarter, compared with a median forecast of 4.8 percent in a Bloomberg survey of economists. The Institute for Supply Management-Chicago Inc. said its business barometer climbed to 61.5 from 58.7 in December. The median forecast was for a drop to 57.2. Recovering Economy The U.S. economy is recovering from its longest recession since the Great Depression, caused by bank losses stemming from the collapse of the subprime mortgage market. S&P 500 profits are estimated to have risen 76 percent in the fourth quarter from the year-earlier period for the first increase since the second quarter of 2007, ending a record nine-quarter slump. Microsoft, the world’s largest software maker, fell 3.4 percent to $28.18 and was the biggest drag on the S&P 500. Fiscal second-quarter profit and revenue topped analyst estimates as consumers stepped up personal computer purchases during the last three months of 2009. Apple Inc. lost 3.6 percent to $192.06 in a second day of declines after introducing its iPad tablet computer. SanDisk, the biggest maker of flash-memory cards for digital cameras and mobile phones, fell 12 percent to $25.42 for its steepest decline in almost a year. The company anticipates sales of $875 million to $950 million in the first quarter, Chief Financial Officer Judy Bruner said yesterday on a conference call with analysts. The average estimate in a Bloomberg survey is $931 million. ‘Negative Nabobs’ S&P 500 companies that have released results posted an estimated combined profit of $16.83 a share, according to Bloomberg data. That compares with a loss of 9 cents a share in the year-ago quarter, according to S&P. Of the 196 companies in the S&P 500 that have reported earnings since Jan. 11, 156 have beaten analysts’ estimates, according to Bloomberg data. “The negative nabobs are just wrong,” said William Smead , chief executive officer of Smead Capital Management in Seattle, which oversees $170 million. “These companies are all so lean that as the economy surprises to the upside, the earnings power is going to be incredible.” To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net Elizabeth Stanton in New York at estanton@bloomberg.net

Read the full article →

U.S. Stocks Drop as Concern Over Technology Earnings Overshadows GDP Data

January 29, 2010

By Nikolaj Gammeltoft and Elizabeth Stanton Jan. 29 (Bloomberg) — U.S. stocks fell, dragging the Standard & Poor’s 500 Index to a three-month low, as disappointing results at technology companies offset government data showing the economy grew at the fastest pace in six years. Microsoft Corp. helped lead technology shares to the biggest drop among 10 groups as Chief Financial Officer Peter Klein said the company has yet to see a recovery in spending on enterprise software. SanDisk Corp., the biggest maker of flash- memory cards, slid 12 percent after its sales forecast fell short of some estimates. The S&P 500 fell for three straight weeks for the first time since July and capped its biggest monthly loss since last February. The S&P 500 slid 1 percent to 1,073.87 at 4:08 p.m. in New York. The Dow Jones Industrial Average fell 53.13 points, or 0.5 percent, to 10,067.33. The Nasdaq Composite Index lost 1.5 percent to 2,147.35. “Expectations have really been high,” said David Chalupnik , who oversees $8 billion as head of equities at First American Funds in Minneapolis. “Earnings have been coming out very strong, but it hasn’t been able to drive the market higher. The best example is Microsoft. They report very good numbers and the stock is down today.” The S&P 500 , which capped its third straight weekly drop, has tumbled 6.6 percent from a 15-month high on Jan. 19 after President Barack Obama called for limits on risk-taking by banks and China moved to restrict lending and cool economic growth. Stocks fell yesterday after Qualcomm Inc. lowered its sales forecast and speculation mounted Greece won’t be able to finance its budget deficit. January Barometer The index is down 3.7 percent year-to-date in its first monthly decline since October and the biggest since it plunged 11 percent last February. The performance of the S&P 500 in January is a reliable predictor of how it will do during the year, according to the Stock Trader’s Almanac. Before last year, when the index dropped 8.6 percent in January and rose 23 percent for the year, the so- called January barometer registered only five major errors since 1950, according to the almanac. The S&P 500 rose as much as 1.1 percent earlier after fourth-quarter economic growth and a gauge of business performance in January beat projections. The Commerce Department said the economy grew at a 5.7 percent rate in the fourth quarter, compared with a median forecast of 4.8 percent in a Bloomberg survey of economists. The Institute for Supply Management-Chicago Inc. said its business barometer climbed to 61.5 from 58.7 in December. The median forecast was for a drop to 57.2. Recovering Economy The U.S. economy is recovering from its longest recession since the Great Depression, caused by bank losses stemming from the collapse of the subprime mortgage market. S&P 500 profits are estimated to have risen 76 percent in the fourth quarter from the year-earlier period for the first increase since the second quarter of 2007, ending a record nine-quarter slump. Microsoft, the world’s largest software maker, fell 3.4 percent to $28.18 and was the biggest drag on the S&P 500. Fiscal second-quarter profit and revenue topped analyst estimates as consumers stepped up personal computer purchases during the last three months of 2009. Apple Inc. lost 3.6 percent to $192.06 in a second day of declines after introducing its iPad tablet computer. SanDisk, the biggest maker of flash-memory cards for digital cameras and mobile phones, fell 12 percent to $25.42 for its steepest decline in almost a year. The company anticipates sales of $875 million to $950 million in the first quarter, Chief Financial Officer Judy Bruner said yesterday on a conference call with analysts. The average estimate in a Bloomberg survey is $931 million. ‘Negative Nabobs’ S&P 500 companies that have released results posted an estimated combined profit of $16.83 a share, according to Bloomberg data. That compares with a loss of 9 cents a share in the year-ago quarter, according to S&P. Of the 196 companies in the S&P 500 that have reported earnings since Jan. 11, 156 have beaten analysts’ estimates, according to Bloomberg data. “The negative nabobs are just wrong,” said William Smead , chief executive officer of Smead Capital Management in Seattle, which oversees $170 million. “These companies are all so lean that as the economy surprises to the upside, the earnings power is going to be incredible.” To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net Elizabeth Stanton in New York at estanton@bloomberg.net

Read the full article →

Transaction Fee On Haiti Donation Leads College Student To Create Anti-Wachovia Facebook Page

January 29, 2010

Several days after 21-year-old Heather Lynn used her Wachovia debit card to donate $10 to Yele Haiti ‘s earthquake fund, she noticed on her online billing statement that the bank had deducted a 3% “international service fee” from the donated amount. Since the four major credit card companies had waived their transaction fees on donations to Haiti, Lynn says, she assumed that Wells Fargo, Wachovia’s parent company, had done the same. “I called customer service to ask if they were waiving fees like Visa and Mastercard did for Haiti relief funds, but the unsympathetic customer service representative said ‘No,’” Lynn told HuffPost. “I just don’t understand how a bank can make a profit from a tragedy, let alone get away with it.” Lynn, an art major at Old Dominion University in Norfolk, Va., immediately moved all her money to the Bank of Hampton Roads, a local community bank, and created a Facebook page to raise awareness of Wachovia’s policy. The page, called “Wachovia = Fail,” attracted more than 200 “fans” in a week and a slew of comments from people who are angry over Wachovia’s ways of business. “I was really surprised at the response,” said Lynn. “People seem really pissed off about it.” Michael Klosterman, a spokesman for Wells Fargo, defended the bank’s response to the Haiti disaster, saying the money it donated to Haiti more than makes up for their transaction fees. “We have given $100,000 to the American Red Cross, and on January 19 we pledged an additional $250,000 to support the non-profits in Florida that are mobilizing the relief efforts,” Klosterman said. “We decided that donating a sum of money would be quicker and more beneficial than waiving transaction fees because the funds would get to the people quicker. It would take the equivalent of $35 million in transactions to raise the amount of money we actually donated.” Regardless, the bank may still lose some customers. Judging by the response to Lynn’s “Wachovia = Fail” Facebook page, a lot of people are frustrated with the bank for reasons having nothing to do with Haiti. “I left 11 dollars in their bank,” commented one angry Facebooker. “Now they want to bill me for 40 bucks more for leaving it. I’m not surprised they are trying to cash in on Haiti donations. SCUM!”

Read the full article →

Distress Investors Say Real Estate Offers Best Opportunities in 2010

January 29, 2010

Institutional and hedge fund investors in distressed debt say real estate offers the greatest opportunities for investment this year, according to a new survey, the North American Distressed Debt Market Outlook 2010. Commercial real estate, in particular

Read the full article →

Video: Zandi, Harris Discuss Outlook For U.S. Recovery, Jobs: Video

January 29, 2010

Jan. 29 (Bloomberg) — Ethan Harris, head of North America economics at Bank of America Merrill Lynch, and Mark Zandi, chief economist at Moody’s Economy.com, talks with Bloomberg’s Carol Massar, Michael McKee and Matt Miller about the outlook for the U.S. economy. (This is an excerpt of the full interview. Source: Bloomberg)

Read the full article →

Nancy F. Koehn: Rebooting Households: The View from Davos

January 29, 2010

The World Economic Forum is in full throttle in Davos, Switzerland this week. There are the usual list of heavy-hitters and loads of conversations about the world’s most pressing challenges and the importance of global cooperation and cross-national creativity in meeting them. Yet, in all the bustle of power and celebrity amassed there at 5,118 feet of elevation, there is considerably less attention being paid to how individual households–income earners, consumers, potential entrepreneurs–are rethinking and rebuilding and what it means for economic and social welfare. Let’s roll the tape backward to try to understand what is happening to families. Between mid-2007 and early 2009, household net worth in the United States fell more than 20 percent as real estate prices declined and the stock market imploded. Following right on the heels of the 2008 financial crisis was a wide, deep recession which quickly begat 10 percent unemployment. Although the stock market has staged a robust recovery beginning in the second quarter of 2009 and housing prices have slowed their declines, unemployment is not expected to abate for a long time. Ironically, the lean, efficient supply chains created over the last 15 years by companies worldwide, particularly U.S. companies, are partly to blame. The very efficiency that helped fuel the prosperity of the mid-1990s and mid-2000s has come back to bite families and thus consumers in the form of “sticky” unemployment and (much) more volatility in the traditional job markets. As 2010 opens, households globally have less wealth, fewer employment prospects with established institutions, and in many cases, reduced social welfare benefits, as cash-starved governments and non-profits curtail assistance. All of this has come at individual families harder and faster than in past recessions. So, how are households responding to this socioeconomic shock and awe? What are they doing, as Bono (who is a Davos regular) might say, to reboot themselves? We see early indications that families are “taking back the financial night,” to gain more control and security for themselves through their own agency and apart from government and corporations. For example, the personal savings rate in the United States has jumped from an average of 2.5 percent over the past 10 years to as high as 6.5 percent in May 2009. Personal savings rates often increase with the onset of the recession, but relative to earlier downturns , this is a bigger bump up, and it will likely last well into the recovery as households begin to create safety nets they can control. In the wake of so many organizations dropping the responsibility ball, trust is especially important right now for American families. As consumers, families are looking to brands–new and established–that are worthy of their hard-earned dollars and their trust (think Apple, Hyundai or McDonald’s). They are using the Internet–more intensively than in the past–to help define value. They are using it to create a more communal, active aspect to consumption. Individuals from all walks of life are deliberately participating in social networking resources, consumer-feedback and rating sites, product blogs and other online locations where they can find guidance, information, and, at times, self definition about what to buy and why. They are also increasingly using the Internet to tell companies what they (really!) think of them. Consumer activism is no longer the sole province of dedicated organizations. With families trying to reclaim the power they feel they’ve recently lost, consumer activism will become a much bigger force on the global stage. One of the most important potential responses on the part of households to the economic shocks of the past two years is entrepreneurship. Historically, entrepreneurial innovation has been a very powerful engine of macroeconomic growth, technological breakthroughs and job creation. Consider Marshall Field, Cyrus McCormick, and Gustav Swift, each of whom came from relative obscurity to found businesses that–in the midst of the economic turbulence of the late 19th century–revolutionized retailing, farming and meatpacking respectively and helped make Chicago one of the nation’s preeminent cities. In our own time, the Information and Biotech Revolutions were ignited largely through entrepreneurial agency. Much of the continued green revolution in alternative energy sources will doubtlessly unfold on the backs of individual entrepreneurs now working in all kinds of garages. At this critical inflection point for the United States, what can be done to light the kindling of entrepreneurial initiative among American families? If we start with young people, we can look for inspiration to the Network for Teaching Entrepreneurship (NFTE), an organization that works with schools and communities to help youth in low-income neighborhoods build their skills and unlock their entrepreneurial creativity. Each year, the NFTE sponsors a national business-plan contest in which students put forth their own concepts and practical models for new enterprises (Last year, 24,000 entrants submitted plans). Or consider the Center for Women in Enterprise (CWE), a New-England based organization dedicated to helping women start their own businesses. CWE offers workshops, training sessions and networking events for women at all stages of the entrepreneurial cycle–from the earliest glimmer of an idea to raising money to managing growth and cash flow. If we look farther afield, there is Kiva, the online microlender created by an entrepreneurial family–Matt and Jessica Jackley–to connect small lenders all over the world with promising entrepreneurs in developing countries. Almost five years after its founding, Kiva has helped raise more than $100 million to fund 239,000 entrepreneurs. Most of this money went to enterprising individuals in regions like Africa, but last year, Kiva opened its services to U.S. entrepreneurs as well. These three organizations–each of which came out of the private sector–are forces of (credible) hope and change. Each starts from the premise that the unleashing of individual possibility and responsibility is a critical road to our collective well-being. And each is focused on targeted action now to help fuel the fire of entrepreneurship. As the high-level conversations at Davos continue this week, government officials and other participants would do well to consider what is happening to families, the central unit of economic and social welfare, and how public institutions can help unlock the entrepreneurial power that exists around all those kitchen tables.

Read the full article →

Larry Summers’ Davos Speech: Obama’s Top Economic Adviser Adamant Reform Is Coming

January 29, 2010

DAVOS, Switzerland — Confronting bankers head on, President Barack Obama’s top economic adviser told them Friday to put their customers first and insisted the U.S. government would push through new banking reforms despite pressure from lobbyists. “Our challenge now is to put in place a new system,” said Lawrence H. Summers, telling a crowd at the World Economic Forum that the reforms wouldn’t last forever but should be able to protect a generation from banking excesses. Summers, the top U.S. official in Davos this year, said there needed to be rules restraining how risky these banks can become. His session came after three days of complaints from senior officials in the banking industry that governments – and the U.S., in particular – risked choking off growth with a glut of new financial regulations. The level of anxiety among financiers at the new populist push was reflected in a series of closed-door meetings at Davos on the subject of the regulation proposals, and bankers and financial regulators were expected to meet again Saturday on the forum’s sidelines to discuss a range of issues, officials said. Summers was adamant that “we are going to put in place a set of reforms that will make a real difference.” He said banks should be aware of their obligations to their communities in making lending decisions and to contain risk, especially when they benefit from taxpayer support after getting into trouble. He also questioned the bank’s “paying out bonuses in large quantities.” The impact of government support for the banks has been far-reaching, he said. “Half a trillion dollars of market value exists today that would not have existed” if the government hadn’t acted. He said Obama’s proposed banking fees did not stem from populist pressure for revenge. “Our focus is not on trying to pick a fight with anyone but getting the economy rolling again,” he said. Summers didn’t appear to engage his audience of business leaders at their annual gathering in the Swiss Alps, and looked more like he was talking to American voters at home. He lamented the current situation in Washington where there are three banking lobbyists per member of Congress, saying it raises questions when some of them are even pushing for financial institutions to be able to jack up credit card rates without letting customers know. Banks must accept new constraints on their activities, he said. “They need to think very carefully about their obligations to their customers,” Summers said. He also welcomed the latest figures showing strong economic growth in the U.S., but said now is not the time to celebrate. The 5.7 percent increase in fourth-quarter growth that came under Obama’s economic policies has helped “moved the economy back from the brink of depression,” but the figure does not mean that “we are in any position to pop any champagne corks” or be satisfied. Joaquin Almunia, EU competition commissioner, supported Summers. “I fully agree with the objectives and with the way he has explained the need for financial regulations to avoid the imbalances and the accumulations of risk that brought about this crisis,” he said. Summers’ session was generally well received, though there were a number of empty seats in the crowd as some top executives left after the preceding debate featuring Google CEO Eric Schmidt. Summers tone “makes a businessman more comfortable,” said Francisco Rubiralta, CEO of Spanish steel company Celsa. Manuel Teehankee, a Philippine trade envoy, said Summers may have helped ease business tensions even as the U.S. seemed to be proposing something akin to the Depression-era Glass-Steagall Act, which separated commercial from investment banking in a bid to limit speculation. Most of the Glass-Steagall restrictions were repealed by Congress and President Bill Clinton in 1999. “I think it calms the general public, and the middle class that the lobby, or the Davos elite, won’t stem the tide of financial reform,” Teehankee said. “He’s making clear Washington’s commitment to substantial financial reform, in a reasonable way.” ___ Associated Press reporter Bradley S. Klapper contributed to this report. _____ To see more about the World Economic Forum or discuss the topics being talked about, go to AP’s World Economic Forum discussion page at http://bit.ly/amY7Sp

Read the full article →

Dave Johnson: America’s Competitors Will Use Supreme Court Ruling To Block Our Green Jobs Effort And Close Our Factories

January 29, 2010

It’s not personal, it’s business. The Supreme Court recently ruled 5-4 that George Bush will be President corporations can spend unlimited amounts in elections to support or oppose candidates. Corporations! Since there are no restrictions on the citizenship of the owners of corporations foreign companies and governments now have a direct way to manipulate our laws and regulations. Outside interests have been influencing American opinion for decades, but have not before this been able to directly support or oppose candidates. The Washington Times , Fox News, and other corporations with significant foreign ownership already work full-time to turn American public opinion against our own government. “Free trade” advocacy groups with funding from outside our borders work to get us to open our markets to imports that close our factories, outsource our jobs, lower our standard of living and drive us into ever-increasing debt. We have seen this with “grassroots” lobbying on important issues like climate change, trying to make people think that the science is a “hoax”: see Grassroots’ Opposition to Clean Energy Reform Bankrolled by Foreign Oil, Petro-Governments . But this new ability to directly support or oppose candidates offers a vastly more effective and immediate way for America’s competitors to achieve their goals . What will they go after first? Of course a top goal of our competitors is to take down our manufacturing capacity — the foundation of a country’s economic power. And, of course, this is exactly what is happening. Oil countries are already planning strategies to use this ruling to block our alternative energy and green jobs efforts. According to Think Progress : For instance, Saudi Arabia has already signaled that the progressive effort to build a clean energy American economy is its ” biggest threat “: Saudi Arabia’s economy depends on oil exports so stands to be one of the biggest losers in any pact that curbs oil demand by penalizing carbon emissions. “It’s one of the biggest threats that we are facing,” said Muhammed al-Sabban, head of the Saudi delegation to U.N. talks on climate change and a senior economic adviser to the Saudi oil ministry. Climate talks posed a bigger threat, Sabban said, and subsidies for the development of renewable energy were distorting market economics in the sector, he said.” Presumably because of the Citizens United ruling, Saudi Arabian-owned subsidiaries operating in the United States can now spend unlimited amounts advocating the defeat of candidates who support clean energy legislation. According to a ThinkProgress investigation , foreign-oil backed lobbyists in America are already instigating efforts to kill clean energy legislation. What are we doing about it? What is our plan? Every other country has economic/industrial policies, but for one reason or another the American public has been persuaded that America should not have an economic/industrial policy of our own. We’re bombarded with propaganda that says having a plan would be government – that We, the People thing – “interfering” with “the market.” This ideology is like an anchor on our country, holding us back from progress . We must rally and take back control of our democracy and our future. This Supreme Court decision must be countered with immediate legislation or it means the loss of so many things that we value. And we must develop an economic/manufacturing policy for our country’s future. This time it’s personal. This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture as part of the Making It In America project. I am a Fellow with CAF.

Read the full article →

Market Leader to Release Results February 25

January 29, 2010

KIRKLAND, Wash., Jan. 29, 2010 (GLOBE NEWSWIRE) — Market Leader, Inc. (Nasdaq:LEDR) today announced it will host a conference call and live Webcast to discuss fourth quarter and year-end financial results on Thursday, February 25, 2010 at 4:30 p.m. Eastern time. To listen to the live conference call, please dial 719-325-4908. A live Webcast of the call will be available from the Investor Relations section of the company’s Web site at http://www.marketleader.com. An audio replay of the call will also be available to investors beginning at 7:30 p.m. Eastern Time on February 25 through midnight Eastern Time on February 25 by dialing 719-457-0820 and entering the passcode 1395432#.

Read the full article →

Amy Davidsen: The Answer is Clean Energy Jobs. (No, really)

January 29, 2010

In his first State of the Union, Obama provided his answer for the economy’s woes: clean energy jobs. “We can put Americans to work today building the infrastructure of tomorrow,” Obama said — “building clean energy facilities” and “manufacturing clean energy products.” To achieve this, he called on our government to pass a “comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.” But the idea of investing in a clean energy infrastructure — energy that will increase our energy security, boost the economy and help avoid dangerous climate change, has somehow become controversial in our country. A monumentally important issue lost amidst bickering over hacked emails and modest short term costs. And while the notion of rebuilding traditional infrastructure is accepted on both sides of the aisle as a tried and true method of putting people to work during a recession, the notion of building a cleaner, more efficient energy infrastructure is scandalous. Tell us we can create jobs building a new road, and we applaud. Tell us we can create jobs building clean energy, and we scoff. How did we get here? Why do we doubt our ability to build a clean energy infrastructure and clean energy jobs? Take the issue of climate change and clean energy out of its confused political context, and the economic benefits are surprisingly simple. It’s about energy efficiency savings and jobs. A recent study by McKinsey found that the US could save $1.2 trillion by 2020, by investing $520 billion in energy efficiency improvements, like ‘sealing leaky ducts and replacing inefficient household appliances.’ And a recent study by the Universities of Berkeley, Illinois and Yale estimates that with comprehensive climate and energy policies in place, the US would gain at least 900,000 jobs sealing those ducts and manufacturing those appliances. These jobs would not only be on the coasts — they’d be in our manufacturing base in the Midwest as well. A new report by The Climate Group and The University of Michigan (using economic research from Deloitte) estimates that comprehensive climate and energy policies could create over 100,000 jobs in the Midwest by 2015 from the manufacture of wind turbine components, hybrid powertrains and advanced batteries alone. That’s three of the fifteen low-carbon technologies that the Midwest has a competitive advantage in. But the fact is that it doesn’t matter what we think. The reality of a changing global energy infrastructure will exist, whether we believe in it or not. And if we, for the first time in our nation’s history, decide to take a pass on greater efficiency, innovation and energy security, others will happily take the torch from us. The effort to build the infrastructure of tomorrow is already well underway in China, which already supplies 40% of the world’s solar PV technology and is set to become the world’s leading manufacturer of wind turbines. Our lingering doubts have left the fate of US climate and energy policy in jeopardy. We need to recapture our faith in our own ability to innovate and grow before the opportunity is lost. Amy Davidsen is the US Executive Director of The Climate Group, an international, non-profit organization whose goal is to help government and business set the world economy on the path to a low-carbon, prosperous future. Their new report American Innovation: Manufacturing Low Carbon Technologies in the Midwest can be found here .

Read the full article →

Bank Of America Website DOWN: 2010 Outage Affects Online Banking

January 29, 2010

Is the Bank of America website down for you? You’re not alone. In fact, people have been having problems with the Bank of America website all day, raising fears it may have been the victim of a cyber attack . The timing has made the problem even greater, as thousand try to log in to check their accounts before the end of the month (Monday is Feb. 1) and pay end-of-the-month bills. Business Insider notes that the company’s Twitter account has downplayed the issue, insisting the site works but is only having problems for some people. That account, @BofA_Help , has been assuring people via replies that its tech team is hard at work to address the problem. Some bloggers are already weighing in with their disgust. One blog even claims B of A is having an “online PR crisis” by not properly relaying information and informing consumers. This isn’t the first time Bank of America website has gone down. It happened in September 2008 , April 2007 , and back in February 2001 .

Read the full article →

Google At Davos Is Like ‘A Successful And Secretive Nation’

January 29, 2010

Google is not a country. Eric Schmidt– who would be prime minister if it was –kept repeating the point at a briefing he gave at Davos this afternoon. They didn’t have a police force, they didn’t have jails, they didn’t have their own prosecutors. Only once did he slip and say : “Nevertheless we have to secure our borders.” In other respects Google is not unlike many other countries (Britain, say) which turn up at Davos with half the cabinet.

Read the full article →

Google At Davos Is Like ‘A Successful And Secretive Nation’

January 29, 2010

Google is not a country. Eric Schmidt– who would be prime minister if it was –kept repeating the point at a briefing he gave at Davos this afternoon. They didn’t have a police force, they didn’t have jails, they didn’t have their own prosecutors. Only once did he slip and say : “Nevertheless we have to secure our borders.” In other respects Google is not unlike many other countries (Britain, say) which turn up at Davos with half the cabinet.

Read the full article →

Sonoran Lifestyle Real Estate Opens Foreclosure Resource Center

January 29, 2010

Sonoran Lifestyle Real Estate professionals have in-depth knowledge of home and condominium inventory in Fountain Hills, AZ, Scottsdale AZ, Show Low, AZ, and Pinetop-Lakeside, AZ, including ways to add distressed sale properties as

Read the full article →

Video: Eric Dezenhall Says Toyota Must Explain Recall to U.S.: Video

January 29, 2010

Jan. 29 (Bloomberg) — Eric Dezenhall, chief executive officer of Dezenhall Resources, talks with Bloomberg’s Mark Crumpton, Julie Hyman and Greg Miles about Toyota Motor Corp.’s record recall of vehicles in the U.S. Sudden acceleration of Toyota vehicles has been linked to 19 deaths in the past decade, according to Energy and Commerce Committee Chairman Henry Waxman. His panel plans a hearing Feb. 25, following a Feb. 4 hearing by the House Committee on Oversight and Government Reform. (Source: Bloomberg)

Read the full article →

Small Business Tax Credit: See The DETAILS Of Obama’s Hiring Credit

January 29, 2010

This morning, as President Obama visits a small business in Baltimore to unveil a temporary tax credit to encourage the hiring of new employees, The Agenda would like to fill you in on the details. The initiative, which would require Congress’s assent, is more generous than earlier versions that have floated around Washington, and it’s tailored more specifically for small businesses.

Read the full article →

Small Business Tax Credit: See The DETAILS Of Obama’s Hiring Credit

January 29, 2010

This morning, as President Obama visits a small business in Baltimore to unveil a temporary tax credit to encourage the hiring of new employees, The Agenda would like to fill you in on the details. The initiative, which would require Congress’s assent, is more generous than earlier versions that have floated around Washington, and it’s tailored more specifically for small businesses.

Read the full article →

London-Based Placement Agent Expands Into U.S.

January 29, 2010

Extract not available.

Read the full article →

← Previous Entries

Next Entries →