January 2010

Bernanke May Have Harder Time Defending Fed’s Authority After Confirmation

January 29, 2010

By Scott Lanman Jan. 29 (Bloomberg) — Ben S. Bernanke , who won Senate approval for a second term as Federal Reserve chairman over a record number of opponents, may now have a tougher fight against threats to the central bank itself. Lawmakers are considering legislation to remove a shield from congressional audits of monetary policy and strip the Fed of bank-supervision powers, measures that Bernanke opposes. The debate over Bernanke’s performance has focused lawmaker attention on the powers of the institution, said Vincent Reinhart , a former Fed official. The scrutiny comes as politicians respond to voter anger over government bailouts of Wall Street firms, including the Fed’s role in rescues of American International Group Inc. and Citigroup Inc. “I can’t imagine that there will not be separate legislation or some piece of legislation that is the Federal Reserve Reform Act of 2010,” said Reinhart, who served as Bernanke’s monetary-affairs director until 2007. The Senate voted 70-30 yesterday to confirm Bernanke, 56, to a four-year term starting Feb. 1, after White House officials moved to shore up support that wavered last week. Bernanke received the most opposing votes by a Fed chairman since 1978, when the office first became subject to Senate confirmation. In 1983, Paul Volcker was confirmed for a second term by an 84-16 vote. Before 1978, the Senate voted to confirm members of the Fed’s Board of Governors, and the president picked the chairman from among them. ‘Public Distrust’ “The opposition to Bernanke isn’t about the guy,” said Reinhart, a resident scholar at the American Enterprise Institute in Washington. “It shows the public distrust of the institution.” U.S. stocks, bonds and the dollar would collapse if investors perceive Congress violating the independence of the policy-setting panel, former Fed Governor Laurence Meyer , now vice chairman of Macroeconomic Advisers LLC, has said. In a separate hearing this week, lawmakers criticized Treasury Secretary Timothy F. Geithner for his role in the $182.3 billion bailout of New York-based insurer AIG while he was serving as president of the New York Fed. Lawmakers including Sheldon Whitehouse , Democrat of Rhode Island, said Wall Street firms were the beneficiaries of the emergency actions that Bernanke and his supporters said were intended to rescue the wider economy. “If you’re the scorekeeper of our recovery, it looks like it can be summarized in the two-word phrase: Banks win,” Whitehouse, who voted against Bernanke, said yesterday. Measures to curb Fed independence may make the Fed more susceptible to pressure from Congress to keep interest rates low, said Bernanke supporters including Charles Schumer , a Democrat from New York. ‘Just Wait’ “If you don’t like monetary policy when the Fed does it, just wait until the politicians get their hands on it,” Schumer said yesterday. During his second term, Bernanke will also have to begin reversing a record monetary expansion without undercutting the recovery, said J. Alfred Broaddus Jr ., former president of the Richmond Fed. “If he moves prematurely, the risk is that the recovery, already pretty fragile, becomes damaged,” Broaddus said. “If he waits too long, the risk is that inflation expectations could build so you have an inflation problem all of a sudden.” The confirmation vote was a turnabout from last week, when the two top Senate Democrats withheld their support for Bernanke and other senators came out against him, raising chances of rejection and helping drive stocks lower. The Democratic Party’s loss of a seat in Massachusetts added to pressure on senators facing re-election. Party Votes In the confirmation vote, Democrats voted 47-11 in favor of Bernanke, while Republicans supported him by a 22-18 margin. Senator Christopher Dodd , who supports Bernanke, has criticized the Fed for lax banking supervision leading up to the crisis. “If I had been voting solely on the performance in ‘07, I would have voted against him,” said the Connecticut Democrat, who chairs the Senate Banking Committee. Dodd and Alabama’s Richard Shelby , the panel’s top Republican and a Bernanke opponent, both want to strip the Fed of bank-supervision powers. “We should seriously consider, and we’re talking about, taking the regulatory power away from the Fed, let them concentrate on monetary policy,” Shelby told reporters yesterday. “There’s a lot of unrest in the country, and a lot of people do not believe that the Fed should have been the central intervener in too-big-to-fail” financial firms. Call for Abolition In the House, Representative Ron Paul , a Texas Republican who has called for the abolition of the Fed, gathered more than 300 supporters and won passage last month of legislation to allow congressional investigators to audit Fed interest-rate decisions. Lawmakers are also aiming to reduce the influence of regional Fed presidents or gain more say over their appointments, which are currently made by private boards of directors and approved by Fed governors in Washington. “There are going to be additional constraints put on the Fed unless the administration leans hard to defend the Fed as an independent institution,” said Gregory Hess , a former Fed economist who’s now faculty dean at Claremont McKenna College in California. To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net .

Read the full article →

KKR Said to Raise $676 Million in Leveraged Loans for Pets at Home Buyout

January 29, 2010

By Patricia Kuo Jan. 29 (Bloomberg) — Kohlberg Kravis Roberts & Co. got 485 million pounds ($676 million) of leveraged loans for its buyout of U.K. retailer Pets at Home Ltd., two people familiar with the situation said. The acquisition debt represents about five times Pets at Home’s earnings before interest, tax, depreciation and amortization, or Ebitda, the people said. Nomura Holdings Inc., Calyon and KKR Capital Markets arranged the debt package, KKR said Jan. 27. Private equity companies are returning to the leveraged buyout market for the first time in more than two years after access to finance dried up during the credit crisis. Buyout firms announced $47.6 billion of takeovers in the second half of last year, up 50 percent from the first half, according to data compiled by Bloomberg. An external spokesman in London for KKR declined to comment. The Pets at Home funding comprises a 75 million-pound six- year term loan paying interest of 450 basis points over the London interbank offered rate; 245 million pounds of seven-year loans priced at 500 basis points over Libor; and a 30-million pound revolving credit due in six years with a spread of 450 basis points. There is also 135 million pounds of mezzanine debt. A basis point is 0.01 percentage point. KKR said this week it agreed to buy Handforth, England- based Pets at Home from Bridgepoint Capital Ltd. to tap the U.K.’s spending on feeding and housing cats, dogs and other domestic animals. Bridgepoint paid 230 million pounds for the chain six years ago. Debt used to fund European leveraged buyouts averaged as high as seven times the acquired companies’ Ebitda in the second half of 2007, up from about 5 times in 2004, according to Fitch Ratings. In a revolving credit, money can be borrowed again once it’s repaid; in a term loan, it can’t. To contact the reporter on this story: Patricia Kuo in London at pkuo2@bloomberg.net

Read the full article →

Chenault Will Get $2 Million Salary as American Express Chief, a 60% Raise

January 29, 2010

By Peter Eichenbaum Jan. 29 (Bloomberg) — Kenneth I. Chenault , chairman and chief executive officer of American Express Co. , received a 60 percent salary increase after the credit-card issuer was the top gainer last year in the Dow Jones Industrial Average. Chenault, 58, will be paid $2 million a year, up from $1.25 million, the New York-based lender said today in a regulatory filing. Raises for Chenault and other senior executives are effective Feb. 1. The compensation changes reflect the company’s shift from bonuses in favor of base salary increases, the filing said. American Express, which gained 118 percent last year, remained profitable throughout the recession as its largest competitors, JPMorgan Chase & Co . and Bank of America Corp. , posted 2009 credit-card losses totaling $7.78 billion. AmEx last week reported $710 million in fourth-quarter income from continuing operations. Vice Chairman Edward P. Gilligan , who took over consumer, small-business and network operations in a management restructuring announced Oct. 5, will receive $1.45 million in salary, up from $1.1 million. Group President Stephen J. Squeri , who heads global services, will get a $250,000 raise to $1 million. Chief Financial Officer Daniel T. Henry ’s salary will increase to $850,000 from $700,000, according to the filing. To contact the reporter on this story: Peter Eichenbaum in New York at peichenbaum@bloomberg.net

Read the full article →

U.S. Consumer Confidence Rises to Highest in Two Years Amid Fewer Job Cuts

January 29, 2010

By Vincent Del Giudice Jan. 29 (Bloomberg) — Confidence among U.S. consumers improved in January to the highest level in two years as the economic expansion prompted companies to limit job cuts. The Reuters/University of Michigan final index of consumer sentiment rose to 74.4 from December’s 72.5. The figure exceeded a preliminary reading for January of 72.8. Additional gains in sentiment that may help fuel purchases and sustain the recovery are dependent on job creation. Federal Reserve policy makers this week said that while consumer spending is expanding, it is partly being “constrained by a weak labor market.” “Signs of a recovery are becoming increasingly visible to consumers,” said Ryan Sweet , a senior economist at Moody’s Economy.com in West Chester, Pennsylvania. “We’re seeing some of the improvements in consumer confidence paying dividends to spending.” Still, “consumers are still nervous about their jobs because of the lack of hiring,” he said. The consumer sentiment index was forecast to rise to 73, according to the median of 58 economists surveyed by Bloomberg News. Estimates ranged from 70 to 74. Investors track the data because spending by consumers accounts for about 70 percent of the U.S. economy. Stocks rose after the report and separate figures showing faster economic growth in the fourth quarter and a stronger- than-anticipated Chicago purchasing managers’ survey. The Standard & Poor’s 500 Index increased 1 percent to 1,094.86 at 10:26 a.m. in New York. Fourth-Quarter Growth The Commerce Department earlier today said the world’s largest economy grew at a 5.7 percent annual rate in the final three months of 2009, the fastest pace in six years, as factories boosted production and companies invested in new equipment. Companies expanded in January at the quickest pace in more than four years as orders and employment increased. The Institute for Supply Management-Chicago Inc. said today its business barometer climbed to 61.5, the highest level since November 2005, from 58.7 last month. Readings greater than 50 signal expansion. The figure was higher than the median estimate of 57.2 in a Bloomberg survey. Further improvement in growth during the current quarter “should lead to positive job gains, our baseline forecast,” Joseph LaVorgna , chief U.S. economist at Deutsche Bank Securities Inc. in New York, said in a note to clients yesterday. “The turn in the labor market should have a powerful impact on consumer attitudes, and in turn the broader economy.” Sentiment Average The Michigan consumer sentiment index averaged 66.3 in all of 2009, compared with 63.8 in 2008. During the expansion that began in late 2001 and ended in December 2007, the index averaged 89. In today’s report, the University of Michigan’s measure of current conditions , which reflects Americans’ perceptions of their own finances and whether it’s a good time to buy big- ticket items such as cars and homes, rose to 81.1 this month from 78 in December. The preliminary measure was 81. The index of expectations six months from now, which more closely projects the direction of consumer spending, increased to 70.1 in January, the highest since September, from 68.9 last month. The preliminary gauge was 67.5. Fed policy makers, who met this week, said “economic activity has continued to strengthen and that the deterioration in the labor market is abating.” At the same time, unemployment close to a 26-year high, lower housing wealth and limited credit underscored the need for the central bankers to keep interest rates low. Interest Rates They repeated a pledge to keep the benchmark interest rate low for an “extended period.” The Fed held the overnight bank lending rate in a range near zero, where’s been for more than a year. Consumers in the survey said they expect an inflation rate of 2.8 percent over the next 12 months, compared with 2.5 percent in the December survey. Over the next five years, the figure tracked by Fed policy makers, Americans expected a 2.9 percent rate of inflation, up from 2.7 percent in the December survey and a January preliminary figure of 2.8 percent. Companies have slowed the rate of job cuts, with initial jobless claims holding below 500,000 since mid-November. First- time filings for unemployment benefits rose as high as 674,000 in March of last year. At the same time, employers have been hesitant to add to payrolls. Obama and Jobs President Barack Obama used his first State of the Union address two days ago to affirm his plan for new jobs. The economy has lost 7.2 million jobs since the recession began in December 2007, the most in the post-World War II era. Union Pacific Corp. , the U.S. railroad with the biggest locomotive fleet, may have reached the bottom of the industry freight slump and has “a chance for some growth” this year, Chief Executive Officer James Young said. “It’s going to be a longer recovery,” Young said in an interview on Jan. 21. “Until you see positive news on the jobs front, consumers are going to stay on the sidelines. And the chance of any strong recovery — I just don’t think it’s there.” To contact the reporter on this story: Vincent Del Giudice in Washington vdelgiudice@bloomberg.net

Read the full article →

Almunia Says EU Has No Greek Rescue Plan as Deficit Won’t Lead to Default

January 29, 2010

By Francine Lacqua and John Fraher Jan. 29 (Bloomberg) — European Union policy makers have no “plan B” to help Greece, the bloc’s top economic official said, and Greek Finance Minister George Papaconstantinou said he’s not aware of talks of a possible rescue. “There is no bailout problem,” Monetary Affairs Commissioner Joaquin Almunia said today in an interview with Bloomberg Television at the World Economic Forum’s annual meeting in Davos, Switzerland. “Greece will not default. In the euro area, default does not exist.” Greek bonds have slumped on speculation the country will need help from the EU to cut the region’s highest budget deficit and tame its rising debt. Prime Minister George Papandreou yesterday said Greece is being victimized by rumors in financial markets and he denied seeking to borrow from European partners. Papaconstantinou, in an interview today, said he has no knowledge of any EU bailout talks and promised deeper budget cuts if needed. French Finance Minister Christine Lagarde told reporters in Davos that Greece, while “not alone” in the euro area, must deliver on its budget-cut pledges. Almunia dismissed as “sensationalist” newspaper reports that the euro region was discussing options to bail out Greece. Officials in Berlin and Paris yesterday rejected reports that bailout talks were under way. ‘Special Case’ Economic imbalances such as the declining competiveness and rising budget deficit that are hurting Greece, are a grave concern and pose a threat to the euro, a Jan. 27 report prepared for EU finance ministers and obtained by Bloomberg shows. The study of divergences between EU economies calls Greece a “special” case among the countries most in need of “swift action” to improve their economies. Credit and currency markets underscore declining investor confidence in Greece. The euro weakened today to a six-month low of $1.3913 after dropping 2.4 percent so far this year. Greek government bonds are the world’s worst performers in January, losing 4.19 percent in local currency terms and extending their decline over the past three months to 10 percent, Bloomberg/EFFAS indexes show. Credit-default swaps tied to Greece trade at about the same levels as Dubai when it got a $10 billion bailout from Abu Dhabi in December. Germany views the situation “more or less calmly,” Finance Ministry spokesman Michael Offer told reporters in Berlin today. U.K. Chancellor of the Exchequer Alistair Darling told reporters in Davos that he didn’t expect the U.K. to assist Greece. “The euro-area has the primary responsibility for anything that might be happening,” he said. Gains, Losses Greek 10-year government bonds rose today, snapping three days of declines and sending the yield down 21 basis points to 6.94 percent. Two-year notes fell for a fourth day, pushing the yield up 24 basis points to 5.46 percent at 11:52 a.m. in London. EU finance ministers are set to approve next month a Jan. 14 Greek proposal to cut spending and raise revenue by about 10 billion euros ($14 billion) this year as part of a three-year plan adopted to bring the deficit within the EU limit of 3 percent of gross domestic product in 2012. “As the implementation of the package begins, and as we get the green light from the commission, as we think we’ll get next week, spreads will tighten and confidence will return,” Papaconstantinou said. “Greece has suffered and we’re suffering every day on the markets from this lack of credibility.” Greek Plan The plan aims to narrow the shortfall from 12.7 percent of output, more than four times the EU limit, to 8.7 percent this year. That reduction will be achieved even though the economy will contract 0.3 percent, the plan says. The deficit will shrink to 5.6 percent next year and 2.8 percent in 2012. “Greece has made some commitments,” France’s Lagarde said. Everyone will be “following and monitoring that there is delivery against that commitment. I have no doubt that this will actually take place.” Greek unions representing civil servants plan a strike for Feb. 10 to protest austerity measures in the plan, which includes a state-hiring freeze this year and a wage cap for public workers earning more than 2,000 euros a month. The plan calls for a 10 percent cut in benefits for state employees and in operating expenditures at all ministries. Greek tax collectors, who are key to the government’s plan to raise revenue though a crackdown on evasion, plan to approve four strikes at a meeting next week, union head Yannis Grivas said. Separately, a spokeswoman for the European Central Bank said there will not be a press conference today related to Greece, rejecting market speculation. To contact the reporter on this story: John Fraher at jfraher@bloomberg.net

Read the full article →

Stocks, Dollar Advance, Treasuries Decline After U.S. GDP Beats Forecasts

January 29, 2010

By Nikolaj Gammeltoft and Rita Nazareth Jan. 29 (Bloomberg) — Stocks rebounded and the dollar strengthened, while Treasuries fell, after the U.S. economy grew at the fastest pace in six years and companies from Amazon.com Inc. to Chevron Corp. posted higher-than-estimated results. The Standard & Poor’s 500 Index climbed 1 percent to 1,094.98 at 10:23 a.m. after slumping to an almost three-month low yesterday. Europe’s Dow Jones Stoxx 600 Index extended its rally to 1.4 percent after the U.S. data. The Dollar Index , which gauges the currency against six major U.S. trading partners, climbed to the highest since August. The yield on the 10-year Treasury note rose 4 basis points to 3.68 percent. The U.S. Commerce Department reported that gross domestic product grew at a 5.7 percent annual pace last quarter, higher than the median economist estimate in a Bloomberg survey. Of the 195 companies in the S&P 500 that have reported earnings since Jan. 11, 154 have beaten analysts’ estimates, according to Bloomberg data following a record nine-quarter earnings slump. “The economy is gaining traction,” said Thomas Nyheim , a money manager at Christiana Bank & Trust Co. in Greeneville, Delaware, which manages $4.7 billion. “We’ve got both GDP and corporate earnings beating expectations. The global scenario looks better, at least for today.” U.S. equities extended gains after the Reuters/University of Michigan index of consumer confidence and the Institute for Supply Management-Chicago Inc.’s business barometer both topped economist estimates. Asia Slips The MSCI Asia Pacific Index dropped 1.6 percent. Asian markets closed before the release of the U.S. GDP data. AU Optronics Corp., Taiwan’s largest maker of liquid-crystal displays, fell 5.7 percent in Taipei after posting an unexpected fourth-quarter loss. Advantest Corp., the world’s biggest maker of memory-chip testers, declined 10 percent in Tokyo after forecasting a wider-than-estimated full-year loss. In Europe, Bayerische Motoren Werke AG, the world’s largest luxury carmaker, rallied 3.9 percent after forecasting a profit this year and rising sales in the U.S., China and Germany. The S&P 500 trimmed its third straight weekly drop. Revenue growth hasn’t been fast enough to extend the S&P’s 500’s 60 percent rally since March. While profits since Jan. 11 beat analysts’ estimates by 12 percent, sales have exceeded forecasts by 1.4 percent, according to data compiled by Bloomberg. The benchmark gauge for U.S. equities has fallen 2.3 percent so far this year as U.S. President Barack Obama called for limits on risk-taking by banks and China moved to restrict lending to cool growth. Amazon.com, Chevron Amazon.com Inc. advanced 3.5 percent after saying quarterly sales may accelerate. Chevron, the second largest U.S. energy company, added as much as 1 percent. The yen dropped against all 16 major currencies, losing at least 1.2 percent against the Mexican peso, Brazilian real and South African rand. Greek 10-year bonds snapped three days of declines after European Union Monetary Affairs Commissioner Joaquin Almunia said in Davos, Switzerland, that the Mediterranean country will not default. The yield dropped 21 basis points to 6.95 percent, narrowing the premium investors demand to hold the debt instead of German bunds by 22 basis points to 374 basis points. The Bombay Stock Exchange Sensitive Index added 0.3 percent after the Reserve Bank of India raised its economic growth forecast while keeping benchmark interest rates unchanged. The MSCI Emerging Markets Index fell 0.4 percent, led by declines in liquid-crystal-display makers after AU Optronics Corp. posted an unexpected loss. Developing-nation equity funds lost $608.5 million in the week ended Jan. 27, the first net outflows in 12 weeks, on concern that China will raise interest rates to combat inflation, EPFR Global said. Copper fell 0.2 percent to $6,880 a metric ton in London, retreating for a fourth day, its longest losing streak since December. Gold for immediate delivery dropped 0.5 percent to $1,081.88 an ounce, also a fourth decline. Crude oil rose 0.9 percent to $74.33 a barrel in New York trading. To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net ; Rita Nazareth in New York at rnazareth@bloomberg.net .

Read the full article →

Stocks, Dollar Advance, Treasuries Decline After U.S. GDP Beats Forecasts

January 29, 2010

By Nikolaj Gammeltoft and Rita Nazareth Jan. 29 (Bloomberg) — Stocks rebounded and the dollar strengthened, while Treasuries fell, after the U.S. economy grew at the fastest pace in six years and companies from Amazon.com Inc. to Chevron Corp. posted higher-than-estimated results. The Standard & Poor’s 500 Index climbed 1 percent to 1,094.98 at 10:23 a.m. after slumping to an almost three-month low yesterday. Europe’s Dow Jones Stoxx 600 Index extended its rally to 1.4 percent after the U.S. data. The Dollar Index , which gauges the currency against six major U.S. trading partners, climbed to the highest since August. The yield on the 10-year Treasury note rose 4 basis points to 3.68 percent. The U.S. Commerce Department reported that gross domestic product grew at a 5.7 percent annual pace last quarter, higher than the median economist estimate in a Bloomberg survey. Of the 195 companies in the S&P 500 that have reported earnings since Jan. 11, 154 have beaten analysts’ estimates, according to Bloomberg data following a record nine-quarter earnings slump. “The economy is gaining traction,” said Thomas Nyheim , a money manager at Christiana Bank & Trust Co. in Greeneville, Delaware, which manages $4.7 billion. “We’ve got both GDP and corporate earnings beating expectations. The global scenario looks better, at least for today.” U.S. equities extended gains after the Reuters/University of Michigan index of consumer confidence and the Institute for Supply Management-Chicago Inc.’s business barometer both topped economist estimates. Asia Slips The MSCI Asia Pacific Index dropped 1.6 percent. Asian markets closed before the release of the U.S. GDP data. AU Optronics Corp., Taiwan’s largest maker of liquid-crystal displays, fell 5.7 percent in Taipei after posting an unexpected fourth-quarter loss. Advantest Corp., the world’s biggest maker of memory-chip testers, declined 10 percent in Tokyo after forecasting a wider-than-estimated full-year loss. In Europe, Bayerische Motoren Werke AG, the world’s largest luxury carmaker, rallied 3.9 percent after forecasting a profit this year and rising sales in the U.S., China and Germany. The S&P 500 trimmed its third straight weekly drop. Revenue growth hasn’t been fast enough to extend the S&P’s 500’s 60 percent rally since March. While profits since Jan. 11 beat analysts’ estimates by 12 percent, sales have exceeded forecasts by 1.4 percent, according to data compiled by Bloomberg. The benchmark gauge for U.S. equities has fallen 2.3 percent so far this year as U.S. President Barack Obama called for limits on risk-taking by banks and China moved to restrict lending to cool growth. Amazon.com, Chevron Amazon.com Inc. advanced 3.5 percent after saying quarterly sales may accelerate. Chevron, the second largest U.S. energy company, added as much as 1 percent. The yen dropped against all 16 major currencies, losing at least 1.2 percent against the Mexican peso, Brazilian real and South African rand. Greek 10-year bonds snapped three days of declines after European Union Monetary Affairs Commissioner Joaquin Almunia said in Davos, Switzerland, that the Mediterranean country will not default. The yield dropped 21 basis points to 6.95 percent, narrowing the premium investors demand to hold the debt instead of German bunds by 22 basis points to 374 basis points. The Bombay Stock Exchange Sensitive Index added 0.3 percent after the Reserve Bank of India raised its economic growth forecast while keeping benchmark interest rates unchanged. The MSCI Emerging Markets Index fell 0.4 percent, led by declines in liquid-crystal-display makers after AU Optronics Corp. posted an unexpected loss. Developing-nation equity funds lost $608.5 million in the week ended Jan. 27, the first net outflows in 12 weeks, on concern that China will raise interest rates to combat inflation, EPFR Global said. Copper fell 0.2 percent to $6,880 a metric ton in London, retreating for a fourth day, its longest losing streak since December. Gold for immediate delivery dropped 0.5 percent to $1,081.88 an ounce, also a fourth decline. Crude oil rose 0.9 percent to $74.33 a barrel in New York trading. To contact the reporters on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net ; Rita Nazareth in New York at rnazareth@bloomberg.net .

Read the full article →

Economy in U.S. Expanded at a 5.7% Annual Pace, Biggest Gain in Six Years

January 29, 2010

By Timothy R. Homan Jan. 29 (Bloomberg) — The economy in the U.S. expanded in the fourth quarter at the fastest pace in six years as factories cranked up assembly lines and companies increased investment in equipment and software. The 5.7 percent increase in gross domestic product, which exceeded the median forecast of economists surveyed by Bloomberg News, marked the best performance since the third quarter of 2003, figures from the Commerce Department showed today in Washington. Efforts to rebuild depleted inventories contributed 3.4 percentage points to GDP, the most in two decades. Manufacturers such as Intel Corp. may keep leading the recovery as increasing sales prompt companies to restock. A slowdown in consumer spending last quarter is a reminder that 10 percent unemployment is causing Americans to hold back, one reason why the Federal Reserve is keeping interest rates low and the Obama administration is proposing new plans to create jobs. “The economy is still healing and improving,” said John Silvia , chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who projected a 5.6 percent gain in GDP. “I think this is a sustainable recovery.” Stocks rose after the report. The Standard & Poor’s 500 Index climbed 1 percent to 1,094.90 at 10:23 a.m. in New York. Treasuries dropped, pushing the yield on the benchmark 10-year note up to 3.68 percent from 3.64 percent late yesterday. Confidence Rising Private reports released today showed confidence among U.S. consumers improved in January for a second month, and companies expanded this month at the fastest pace in more than four years as orders and employment increased. The economy was forecast to grow at a 4.7 percent annual pace, according to the median estimate of 84 economists in a Bloomberg News survey. Estimates ranged from gains of 3 percent to 7.5 percent. For all of 2009, the economy shrank 2.4 percent, the worst single-year performance since 1946. Consumer spending, which comprises about 70 percent of the economy, rose at a 2 percent pace, more than anticipated following a 2.8 percent increase in the previous three months. Economists projected a 1.8 percent gain, according to the survey median. Third-quarter purchases received a boost from the government’s auto-incentive program that offered buyers discounts to trade in older cars and trucks for new, more fuel- efficient vehicles. The plan expired in August. Households Household purchases dropped 0.6 percent last year, the biggest decrease since 1974. Increases in production last quarter stemmed the slide in inventories. 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. Today’s report showed purchases of equipment and software increased at a 13 percent pace in the fourth quarter, the most since 2006. The gain helped offset a 15 percent drop in commercial construction, leaving total business investment up 2.9 percent over the past three months. 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. ‘Robust’ Growth “My expectation for 2010 is that we’re going to see robust unit growth,” Chief Financial Officer Stacy Smith said in an interview this month. “The consumer segments of the market will stay pretty strong, and I do believe we’re going to see a resurgence in PC client sales.” A report yesterday showed companies ordered more capital goods such as machinery and computers in December, indicating business investment will keep expanding. The job market is one area where a rebound is still not evident. Payrolls fell by 85,000 last month after a 4,000 gain in November that was the first increase in almost two years. The U.S. has lost 7.2 million 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, the Labor Department said on Jan. 8. A jump in the number of discouraged workers leaving the labor market kept the rate from rising. President Barack Obama this week said job creation will be the “number one focus in 2010.” Speaking during his first State of the Union address, Obama called on Congress to deliver a new jobs bill to his desk. Fed’s Policy Fed policy makers, after their meeting this week, said the recovery is gaining strength and business investment “appears to be picking up.” They also repeated a pledge to keep the benchmark interest rate low for an “extended period.” The central bankers held the overnight lending rate between banks in the range near zero, where it has been for more than a year. In other areas of the economy, today’s report showed a smaller trade gap contributed 0.5 percentage point to fourth- quarter growth, while government spending was little changed, dropping at a 0.2 percent pace. Residential construction climbed at a 5.7 percent rate last quarter after expanding at a 19 percent pace in the previous three months. Inflation held below the Fed’s long-term forecast. The central bank’s preferred price gauge, which is tied to consumer spending and strips out food and energy costs, rose at a 1.4 percent annual pace following a 1.2 percent increase in the prior quarter. The GDP price gauge climbed at a 0.6 percent pace, less than the 1.3 percent median forecast of economists surveyed. Today’s GDP report is the first for the quarter and will be revised in February and March as more information becomes available. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

Read the full article →

Economy in U.S. Expanded at a 5.7% Annual Pace, Biggest Gain in Six Years

January 29, 2010

By Timothy R. Homan Jan. 29 (Bloomberg) — The economy in the U.S. expanded in the fourth quarter at the fastest pace in six years as factories cranked up assembly lines and companies increased investment in equipment and software. The 5.7 percent increase in gross domestic product, which exceeded the median forecast of economists surveyed by Bloomberg News, marked the best performance since the third quarter of 2003, figures from the Commerce Department showed today in Washington. Efforts to rebuild depleted inventories contributed 3.4 percentage points to GDP, the most in two decades. Manufacturers such as Intel Corp. may keep leading the recovery as increasing sales prompt companies to restock. A slowdown in consumer spending last quarter is a reminder that 10 percent unemployment is causing Americans to hold back, one reason why the Federal Reserve is keeping interest rates low and the Obama administration is proposing new plans to create jobs. “The economy is still healing and improving,” said John Silvia , chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, who projected a 5.6 percent gain in GDP. “I think this is a sustainable recovery.” Stocks rose after the report. The Standard & Poor’s 500 Index climbed 1 percent to 1,094.90 at 10:23 a.m. in New York. Treasuries dropped, pushing the yield on the benchmark 10-year note up to 3.68 percent from 3.64 percent late yesterday. Confidence Rising Private reports released today showed confidence among U.S. consumers improved in January for a second month, and companies expanded this month at the fastest pace in more than four years as orders and employment increased. The economy was forecast to grow at a 4.7 percent annual pace, according to the median estimate of 84 economists in a Bloomberg News survey. Estimates ranged from gains of 3 percent to 7.5 percent. For all of 2009, the economy shrank 2.4 percent, the worst single-year performance since 1946. Consumer spending, which comprises about 70 percent of the economy, rose at a 2 percent pace, more than anticipated following a 2.8 percent increase in the previous three months. Economists projected a 1.8 percent gain, according to the survey median. Third-quarter purchases received a boost from the government’s auto-incentive program that offered buyers discounts to trade in older cars and trucks for new, more fuel- efficient vehicles. The plan expired in August. Households Household purchases dropped 0.6 percent last year, the biggest decrease since 1974. Increases in production last quarter stemmed the slide in inventories. 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. Today’s report showed purchases of equipment and software increased at a 13 percent pace in the fourth quarter, the most since 2006. The gain helped offset a 15 percent drop in commercial construction, leaving total business investment up 2.9 percent over the past three months. 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. ‘Robust’ Growth “My expectation for 2010 is that we’re going to see robust unit growth,” Chief Financial Officer Stacy Smith said in an interview this month. “The consumer segments of the market will stay pretty strong, and I do believe we’re going to see a resurgence in PC client sales.” A report yesterday showed companies ordered more capital goods such as machinery and computers in December, indicating business investment will keep expanding. The job market is one area where a rebound is still not evident. Payrolls fell by 85,000 last month after a 4,000 gain in November that was the first increase in almost two years. The U.S. has lost 7.2 million 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, the Labor Department said on Jan. 8. A jump in the number of discouraged workers leaving the labor market kept the rate from rising. President Barack Obama this week said job creation will be the “number one focus in 2010.” Speaking during his first State of the Union address, Obama called on Congress to deliver a new jobs bill to his desk. Fed’s Policy Fed policy makers, after their meeting this week, said the recovery is gaining strength and business investment “appears to be picking up.” They also repeated a pledge to keep the benchmark interest rate low for an “extended period.” The central bankers held the overnight lending rate between banks in the range near zero, where it has been for more than a year. In other areas of the economy, today’s report showed a smaller trade gap contributed 0.5 percentage point to fourth- quarter growth, while government spending was little changed, dropping at a 0.2 percent pace. Residential construction climbed at a 5.7 percent rate last quarter after expanding at a 19 percent pace in the previous three months. Inflation held below the Fed’s long-term forecast. The central bank’s preferred price gauge, which is tied to consumer spending and strips out food and energy costs, rose at a 1.4 percent annual pace following a 1.2 percent increase in the prior quarter. The GDP price gauge climbed at a 0.6 percent pace, less than the 1.3 percent median forecast of economists surveyed. Today’s GDP report is the first for the quarter and will be revised in February and March as more information becomes available. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

Read the full article →

Americas Energy Company Files Super 8K — Appoints New President

January 29, 2010

KNOXVILLE, TN–(Marketwire – January 29, 2010) – Americas Energy Company-AECo ( OTCBB : AENY ) and Americas Energy Company, Inc. announced today that the merger between the two entities is now complete and the companies have filed their Super 8K on the EDGAR filing system. As part of the business combination, Mr. Leonard McMillan, former Chairman and CEO, has resigned and installed Mr. Chris Headrick as the current Chairman of the Board and President.

Read the full article →

Video: Obama Seeks $54 Billion in Nuclear-Power Loan Guarantees: Video

January 29, 2010

Jan. 29 (Bloomberg) — President Barack Obama, acting on a pledge to support nuclear power, will propose tripling loan guarantees for new reactors to more than $54 billion. Bloomberg’s Hans Nichols reports. (Source: Bloomberg)

Read the full article →

Video: Maki Sees `Substantial Decline’ in U.S. Jobless Rate: Video

January 29, 2010

Jan. 29 (Bloomberg) — Dean Maki, chief U.S. economist at Barclays Capital Inc., talks with Bloomberg’s Betty Liu about the outlook for the unemployment rate. Maki, speaking from New York, said the U.S. unemployment rate will fall to 9 percent by the end of 2010. He also discusses fourth-quarter economic growth, consumption and personal savings. The U.S. Commerce Department said the economy expanded at a 5.7 percent annual pace in the quarter, more than forecast. (Source: Bloomberg)

Read the full article →

Video: Kravis Discusses Obama’s Bank-Rules Plan, Impact on KKR: Video

January 29, 2010

Jan. 29 (Bloomberg) — Henry Kravis, co-founder of Kohlberg Kravis Roberts & Co., talks with Bloomberg’s Ryan Chilcote about U.S. President Barack Obama’s plan to ban banks from backing private-equity funds and its impact on KKR. (This is an excerpt of the full interview. Source: Bloomberg)

Read the full article →

Video: Weinberg Sees No Resurgence of Confidence in M&A Market: Video

January 29, 2010

Jan. 29 (Bloomberg) — Peter Weinberg, founding partner of Perella Weinberg Partners LP, talks with Bloomberg’s Erik Schatzker about the outlook for mergers and acquisitions. Weinberg, speaking from the World Economic Forum in Davos, Switzerland, also discusses public sentiment toward the banking industry and “conservatism” in the M&A market. (Source: Bloomberg)

Read the full article →

Video: Demand, Volatility Alter Global Oil Market Landscape: Video

January 29, 2010

Jan. 29 (Bloomberg) — Bloomberg’s Margaret Brennan reports on the outlook for the global oil market. (Source: Bloomberg)

Read the full article →

Octus Energy Adds Two Technology Executives to Its Management Team

January 29, 2010

DAVIS, CA–(Marketwire – January 29, 2010) – Octus, Inc. ( OTCBB : OCTI ), a leading smart energy efficiency company, today announced the addition of two technology industry executives to its management team, strengthening the company’s launch of the Octus Smart Energy Platform (OctusSEP). Joining the company are Dave Glende as Senior Manager, Smart Energy Services, and John Walter as Senior Manager, Smart Energy Products. “The convergence of energy efficiency technologies and intelligence, in concert with catalytic economic incentives and development of the smart grid, makes smart energy an increasingly compelling, hyper-growth market,” said Chris Soderquist, Octus CEO. “Dave Glende and John Walter bring a wealth of relevant, seasoned, hands-on experience to Octus to accelerate the commercialization of OctusSEP and spring innovation within the company.”

Read the full article →

Hidalgo Mining International Inc. (HMIT) Announces the Election of William Veve as President of the Company

January 29, 2010

NEW YORK, NY–(Marketwire – January 29, 2010) – Hidalgo Mining International ( PINKSHEETS : HMIT ), an innovative mining company headquartered in Port Washington, N.Y., announces that Mark Daniel Klok, President of the Company, has resigned as President. Mr. Klok’s resignation is effective January 29, 2010. Mr. William Veve, the Director of New Business Development for HMIT, has been elected the Company’s President effective January 29, 2010. Mr. Veve will bring his experience in the areas of corporate finance and strategic planning to further the Company’s success.

Read the full article →

Video: Silvia Says Economic Growth Continues at `Subpar’ Pace: Video

January 29, 2010

Jan. 29 (Bloomberg) — John Silvia, chief economist at Wells Fargo Securities LLC, talks with Bloomberg’s Betty Liu about U.S. fourth-quarter gross domestic product, which expanded at the fastest pace in six years as factories cranked up assembly lines to prevent inventories from plunging. GDP expanded 5.7 percent in the quarter, exceeding the median forecast of economists surveyed by Bloomberg News. (Source: Bloomberg)

Read the full article →

Video: Bernanke May Face Harder Fight Defending Fed’s Authority: Video

January 29, 2010

Jan. 29 (Bloomberg) — Ben S. Bernanke, who won Senate approval for a second term as Federal Reserve chairman over a record number of opponents, may now have a tougher fight against threats to the central bank itself. Bloomberg’s Lizzie O’Leary reports. (Source: Bloomberg)

Read the full article →

Video: Ivy League Talents Wittman, Lin on Verge of NBA Careers: Video

January 29, 2010

Jan. 29 (Bloomberg)– Two-time defending Ivy League champion Cornell (16-3, 2-0 in the Ivy League) plays Harvard (13-3, 2-0) at Newman Arena in Ithaca, New York. The game is unique in that it will feature two National Basketball Association prospects. Talent evaluators say Cornell’s Ryan Wittman and Harvard’s Jeremy Lin have a chance to make it in the NBA. Bloomberg’s Michele Steele reports. (Source: Bloomberg)

Read the full article →

Video: Economist Zentner Discusses U.S. Growth, Jobs Outlook: Video

January 29, 2010

Jan. 29 (Bloomberg) — Ellen Zentner, senior U.S. economist at Bank of Tokyo-Mitsubishi UFJ Ltd., talks with Bloomberg’s Deirdre Bolton about the outlook for the U.S. economy. Zentner sees a 2.5 percent growth rate for 2010. (This report is an excerpt. Source: Bloomberg)

Read the full article →

Video: FT’s Lex Columnist Rathbone on Obama’s Financial Plan: Video

January 29, 2010

Jan. 29 (Bloomberg) — John Paul Rathbone of the Financial Times’ Lex commentary team talks with Bloomberg’s Deirdre Bolton about the response from banking leaders to President Barack Obama’s financial regulatory overhaul plan, which is a major topic of discussion at this week’s World Economic Forum in Davos, Switzerland. (Source: Bloomberg)

Read the full article →

Video: Copetas Sees Google Davos Party With `Cast of Thousands’

January 29, 2010

Jan. 29 (Bloomberg) — Bloomberg’s A. Craig Copetas talks with Francine Lacqua about the party scene in Davos, Switzerland, as it plays host to the annual meeting of the World Economic Forum.

Read the full article →

Video: Harvard’s William George Sees Need for Global Regulator: Video

January 29, 2010

Jan. 29 (Bloomberg) — William George, a professor of management practices at Harvard Business School and former chief executive officer of Medtronic Inc., talks with Bloomberg’s Erik Schatzker about financial regulation. George, who is also a board member at Goldman Sachs Group Inc., also discusses public sentiment toward Goldman and the need to focus on job creation. They speak at the World Economic Forum in Davos, Switzerland. (Source: Bloomberg)

Read the full article →

Video: Randolph Says Greece Won’t Default on Debt Obligations: Video

January 29, 2010

Jan. 29 (Bloomberg) — Jan Randolph, head of sovereign risk at IHS Global Insight, talks with Bloomberg’s Scarlet Fu about the unlikelihood Greece will default on its debt. Randolph also discusses possible Chinese interest in purchasing Greek bonds and the need for Greece to restore its credibility. (Source: Bloomberg)

Read the full article →

TOA Technologies Hires Vicki Sewell as New Vice President of Customer Operations

January 29, 2010

Respected Executive to Enhance Client Services and Support for Industry Leading SaaS Vendor

Read the full article →

Video: Low Taxes, Lack of U.S. Crackdowns Add to Zug’s Appeal: Video

January 29, 2010

Jan. 29 (Bloomberg) — Bloomberg’s Erik Schatzker reports on Zug, Switzerland, a growing center for commodities markets. (Source: Bloomberg)

Read the full article →

Video: Leonsis Battles Over Washington Wizards’ Ownership: Video

January 29, 2010

Jan. 29 (Bloomberg) — Bloomberg’s Michele Steele reports on the Washington Wizards’ ownership dispute between former AOL Vice Chairman Ted Leonsis and the estate of former majority owner Abe Pollin. (Source: Bloomberg)

Read the full article →

Video: Thiam Says Prudential Will `Absolutely’ Expand in Asia: Video

January 29, 2010

Jan. 29 (Bloomberg) — Tidjane Thiam, chief executive officer of Prudential Plc, talks with Bloomberg’s Francine Lacqua about the company’s expansion plans for Asia. Thiam speaks at the World Economic Forum in Davos, Switzerland. (Source: Bloomberg)

Read the full article →

Video: Germanier Swaps `Miserable’ Bankers for Swiss Ski-Makers

January 29, 2010

Jan. 29 (Bloomberg) — Bloomberg’s Terrie Cooney reports on Benedikt Germanier, the former banker who swapped Wall Street for the Swiss Alps and now runs a ski manufacturer.

Read the full article →

Video: Moynihan Says BofA Clients Want Combination of Services: Video

January 29, 2010

Jan. 29 (Bloomberg) — Brian Moynihan, chief executive officer of Bank of America Corp., talks with Bloomberg’s Erik Schatzker about customer sentiment over the bank’s services. Moynihan, speaking from the World Economic Forum in Davos, Switzerland, said Bank of America customers are telling him they want a company that can offer both commercial and investment-banking services. Moynihan also discusses global regulation, lending and customer concerns over growth. (Source: Bloomberg)

Read the full article →

Video: Frank Says Banks `Deluded’ if They Resist Regulation: Video

January 29, 2010

Jan. 29 (Bloomberg) — U.S. Representative Barney Frank, a Massachusetts Democrat and chairman of the House Financial Services Committee, talks with Bloomberg’s Erik Schatzker about bank regulation. Frank, speaking at the World Economic Forum in Davos, Switzerland, also discusses the outlook for Federal Reserve Chairman Ben S. Bernanke’s second term. The Senate voted 70-30 to confirm the 56-year-old Bernanke. The opposing votes were the most since the chamber started confirming Fed chiefs in 1978. (Source: Bloomberg)

Read the full article →

Oil revenues expected to rebound strongly in 2010

January 29, 2010

Oil revenues expected to rebound strongly in 2010

Read the full article →

Oil revenues expected to rebound strongly in 2010

January 29, 2010

Oil revenues expected to rebound strongly in 2010

Read the full article →

Obama job drive earns plaudits

January 29, 2010

Obama job drive earns plaudits

Read the full article →

Obama job drive earns plaudits

January 29, 2010

Obama job drive earns plaudits

Read the full article →

U.S stocks close the week in red despite cheerful US growth…

January 29, 2010

U.S stocks close the week in red despite cheerful US growth…

Read the full article →

Global stocks slump

January 29, 2010

Global stocks slump

Read the full article →

US Senate OKs sanctions on Iran’s fuel suppliers

January 29, 2010

US Senate OKs sanctions on Iran’s fuel suppliers

Read the full article →

Majors fell slightly ahead of the U.S GDP

January 29, 2010

Majors fell slightly ahead of the U.S GDP

Read the full article →

Indian banks on track to Ppost 25% annual growth

January 29, 2010

Indian banks on track to Ppost 25% annual growth

Read the full article →

Pakistan Business Council to elect new board

January 29, 2010

Pakistan Business Council to elect new board

Read the full article →

U.S stocks gains slightly throughout the midday…

January 29, 2010

U.S stocks gains slightly throughout the midday…

Read the full article →

European stocks end week in green zone

January 29, 2010

European stocks end week in green zone

Read the full article →

Chevron Corp Financial Results

January 29, 2010

Chevron Corp Financial Results

Read the full article →

The federal currency is the winner!

January 29, 2010

The federal currency is the winner!

Read the full article →

The world’s leading economy expands the most in six years

January 29, 2010

The world’s leading economy expands the most in six years

Read the full article →

Genworth Financial Inc Results

January 29, 2010

Genworth Financial Inc Results

Read the full article →

U.S economy expected to show strong growth

January 29, 2010

U.S economy expected to show strong growth

Read the full article →

Microsoft Corp Earnings

January 29, 2010

Microsoft Corp Earnings

Read the full article →

← Previous Entries

Next Entries →