Bloomberg:
S&P 500’s Worst Writedowns Signal Rally as Gap Widens
- The cost of borrowing in dollars for three months in London declined on speculation the Federal Reserve will cut interest rates tomorrow and central banks will keep offering cash to unlock credit. The London interbank offered rate, or Libor, that banks say they charge each other for such loans dropped five basis points to 1.87 percent today, the lowest level since September 2004, according to British Bankers’ Association data. The one-month dollar rate and prices in Asia also slid. “Rates are coming off due to an overall improvement in sentiment,” said Nizam Idris, a currency strategist at UBS AG in Singapore.
- A federal grand jury is investigating how a company that advised Jefferson County, Alabama, on bond deals that threaten to cause the biggest municipal bankruptcy in U.S. history, did similar work in New Mexico after making contributions to Governor Bill Richardson’s political action committees. The grand jury in Albuquerque is looking into Beverly Hills, California-based CDR Financial Products Inc., which received almost $1.5 million in fees from the New Mexico Finance Authority in 2004 after donating $100,000 to Richardson’s efforts to register Hispanic and American Indian voters and pay for expenses at the Democratic National Convention in 2004, people familiar with the matter said.
- The Illinois House of Representatives will consider impeaching Democratic Governor Rod Blagojevich after he was arrested by the FBI for trying to auction President-elect Barack Obama’s vacant Senate seat.
- OPEC should make a “sizable” cut in oil production at this week’s meeting because there are excess global stockpiles, OPEC Secretary-General Abdalla el- Badri said. The group expects Russia to help. Organization of Petroleum Exporting Countries President Chakib Khelil said all the group’s members support an output cut at the meeting in Oran, Algeria, adding that he’s confident Russia, the biggest non-OPEC producer, will act to support the effort to revive prices. Global stockpile levels are at 57 days of forward cover, five days more than the five-year average of 52 days, Khelil said. “Two million barrels below current demand is what you’d need to reduce stockpiles by five days,” said Ronald Smith, chief strategist at Moscow-based Alfa Bank. “Today’s comments point to a larger cut than previously expected.” “Stocks are very high, we have about 100 million barrels of oversupply in the market, we have to take them out,” El- Badri told reporters when he arrived at his hotel in Oran today. OPEC is “very pessimistic about demand” next year, Khelil said. Oil consumption will fall by 200,000 barrels a day in the first quarter of 2009, and a further 1.2 million barrels a day in the second quarter, before rising again in the second half of the year, he said. World oil demand is likely to fall by an average of 500,000 barrels a day next year because of high crude prices and slumping economies, the Centre for Global Energy Studies said in a report today.
- Crude oil fell $1.62 bbl. to $45.03, retreating from $50 a barrel in New York this morning, on speculation that OPEC production cuts may be insufficient to bolster prices as the global recession curbs fuel consumption.
- Russian Prime Minister Vladimir Putin is facing a rising tide of social discontent as the economy heads into recession after a decade-long boom driven by oil prices. Thirty-nine percent of Russians express growing dissatisfaction with the government, according to a November poll released today by the Moscow-based Public Opinion Foundation. In some regions, the level of public discontent is more than 50 percent, it said.
Wall Street Journal:
- Coca-Cola Co.(KO) is expected to launch a drink in the U.S. this week containing a natural, calorie-free sweetener, intensifying a race with PepsiCo Inc. to dominate a new generation of noncarbonated beverages. Coke is pushing ahead even though the Food and Drug Administration as of Sunday hadn't issued a formal blessing of the ingredient.
- An enforcement case 16 years ago gave the Securities and Exchange Commission its first shot at figuring out how Bernard Madoff could rack up favorable returns with such uncanny consistency. After that, it received repeated warnings from outside whistle-blowers and at least twice looked into Mr. Madoff's brokerage itself. Each time, it blew its chance. It was only last week, when Mr. Madoff allegedly confessed to his sons that he was running what amounted to a "giant Ponzi scheme," that the apparent $50 billion fraud came to light.
- In a tough year for General Electric Co.(GE), its energy-infrastructure unit has been a bright spot. Through September, revenue at the unit, which makes power-generation equipment, was up 28% from a year earlier, and operating profit was up 35%. But the recession, credit crisis and the plunging price of oil threaten that success. That will put the energy unit in the spotlight Tuesday when GE Chairman and Chief Executive Jeffrey Immelt takes to the stage used by "Saturday Night Live" at NBC headquarters in New York to brief investors on GE's outlook for 2009.
NY Times:
Politico, the upstart news source from Washington, and Reuters, the venerable wire service, have joined forces to offer articles to newspapers and sell advertising on the papers’ Web sites, the latest step in the rising competition among electronic news media to fill the void left by the shrinking print business.
- The epicenter of what may be the largest Ponzi scheme in history was the 17th floor of the Lipstick Building, an oval red-granite building rising 34 floors above Third Avenue in Midtown Manhattan. A busy stock-trading operation occupied the 19th floor, and the computers and paperwork of Bernard L. Madoff Investment Securities filled the 18th floor. But the 17th floor was Bernie Madoff’s sanctum, occupied by fewer than two dozen staff members and rarely visited by other employees. It was called the “hedge fund” floor, but federal prosecutors now say the work Mr. Madoff did there was actually a fraud scheme whose losses Mr. Madoff himself estimates at $50 billion.
LA Times:
- LA, Long Beach ports push projects despite rocky economy. The expansion would cut pollution, create jobs and prepare the complex for a shipping rebound, officials say.
The Detroit News:
- Ford Motor Co.(F) still hasn't launched the first V-6 version of its promised EcoBoost engine, but sources say the automaker already is putting the finishing touches on a 2.0-liter four-cylinder version of the economical motor, which they say is likely to debut on the Ford Fusion.
NY Post:
- Morgan Stanley's(MS) expected to ring up losses of about $1 billion when it reports its fiscal fourth-quarter earnings Wednesday.
USA Today:
- A growing number of homeowners are trying to make falling property values work for them by asking the government for a tax break.
Vedomosti:
- Moscow housing prices may fall 60% next year.
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Press Trust of India:
Toyota’s sales in India fell 48.5% in November to 2,087 vehicles from 4,056 a year ago.
Xinhua News:
- Companies owned by China’s central government have reported a combined 26% decline in net profit for the first 11 months on rising inventories and an increasing number of idled businesses.
The Jerusalem Post:
- The Jewish nonprofit world has been rocked by the securities fraud of Bernard Madoff, and the worst may be yet to come.
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