Today's Headlines

Bloomberg:

- President-elect Barack Obama, looking to get his administration off to a fast start when he takes office next week, is drawing fire from members of his own party on Capitol Hill. Democratic criticism of the stimulus package and the nomination of Leon Panetta as intelligence chief shows lawmakers intend to flex their muscle.

- Bets against shares of Caterpillar Inc.(CAT) reached their highest level since April on doubts that the world’s largest maker of construction equipment will get a boost from President-elect Barack Obama’s public-works spending plan. Short interest in Peoria, Illinois-based Caterpillar rose 25 percent to 27.5 million shares from April 30 through Dec. 31 2008, according to New York Stock Exchange data released this week and compiled by Bloomberg.

- Democrats in Congress may cut the share of the economic stimulus package dedicated to tax cuts below the $300 billion or more that President-elect Barack Obama is asking for, House Ways and Means Committee Chairman Charles Rangel said.

- Man Group Plc, the largest publicly traded hedge-fund manager, said assets under management fell 21 percent in the last three months of 2008, more than expected, as it reduced leverage and wrote down Bernard Madoff investments.

- The most detailed proposal yet by industry and environmentalists to reduce U.S. greenhouse-gas emissions will call for raising the costs of new coal plants and rewarding nations for protecting forests. Rio Tinto Group(RTP), General Electric Co.(GE) and U.S. electricity producers will present the proposal tomorrow to a Congressional committee and recommend “urgent” action, according to a copy of the report by the 32-member coalition obtained by Bloomberg News.

- Panera Bread Co.(PNRA), the chain of 1,250 bakery-cafes, plans to take advantage of its debt-free balance sheet and the U.S. real-estate slump to open as many as two locations a week in 2009, Chief Executive Ronald Shaich said.

- Illinois Governor Rod Blagojevich called into session today the state Senate that may remove him from office.

- Brazil’s real may fall 10% against the US dollar this year and the central bank will cut its benchmark interest rate by as much as 4 percentage points because the economy is in a recession, CM Capital Markets said. “Growth is in a nosedive and the central bank is going to have to react,” Tony Volpon, the chief economist and strategist at CM Capital in Sao Paulo, said. Volpon says a collapse in industrial production is the strongest signal Brazil’s economy is now contracting. Industrial production fell 6.2% in November from the year-earlier period.

- As many as half of publicly traded commodity shipping lines may breach their loan covenants by April after a record collapse in hire rates, according to Royal Bank of Scotland Group Plc, the third-largest lender to the industry.

- Crude oil fell after a U.S. government report showed that stockpiles climbed to a 16-month high as fuel demand tumbled. Inventories at Cushing, Oklahoma, where oil that’s traded on Nymex is stored, climbed 2.5 percent to 33 million barrels last week, the highest since at least April 2004, when the department began keeping track of supplies there. “When you get a 6 million-barrel build in distillate during the dead of winter, you are looking at a grim demand picture,” said John Kilduff, senior vice president of energy at MF Global Inc. in New York.

Wall Street Journal:

- State and local governments would benefit from more than $160 billion in federal aid under a plan pushed by House Democratic leaders in negotiations over the economic-recovery package taking shape on Capitol Hill. The House has taken the lead on the issue in closed-door discussions on the broader recovery package, which is sought by President-elect Barack Obama and is expected to have an overall price tag approaching $800 billion.

- Walgreen Co.(WAG) plans to announce on Wednesday a network of pharmacies, in-store clinics and company health centers it will market to corporate and government employers nationwide. Under the drugstore chain's "Complete Care and Well-Being" program, participating employees at work would be able to get checkups, preventive care and other services, such as dentistry and optometry. Walgreen's Take Care health clinics would be available for basic services outside of business hours, and the chain would offer discounted prescriptions at Walgreen pharmacies. Retirees and employees' family members also would be eligible for the services.

NY Times:

- President-elect Barack Obama spent Tuesday evening at a dinner party with several prominent conservative columnists, including William Kristol and David Brooks of The New York Times, according to an Obama transition pool report.

- Gulf Arab governments' funds are billions of dollars poorer despite record oil prices because of losses in stocks and other investments, a report due out Wednesday said. The Council on Foreign Relations' paper also suggests that the world's largest such fund is considerably smaller than some earlier estimates have claimed.

San Francisco Chronicle:

- President Obama will end the 15-year-old "don't ask, don't tell" policy that has prevented homosexual and bisexual men and women from serving openly within the U.S. military, a spokesman for the president-elect said.

Washington Post:

- Regular mobile phone use does not appear to increase a person's risk of getting a type of cancer called melanoma of the eye, German researchers said on Tuesday. The study involving about 1,600 people detected no link between the time a person spent using a cell phone over about a decade and their chances of developing melanoma of the eye, they wrote in the Journal of the National Cancer Institute. The findings contradicted an earlier, smaller study by the same researchers that had raised concern about such a link.

Delta Farm Press:

- U.S. farmers and their commodity organizations won’t have to spend as much time defending farm programs from claims they’re no longer needed because of high grain prices this year. That’s about the only good news to come out of a crop outlook seminar held in conjunction with the American Farm Bureau Federation’s 90th annual meeting, which kicked off Sunday in San Antonio. After enjoying record high farm income in 2008 due, in part, to unheard of prices for corn, soybeans and wheat, farmers will probably see lower receipts for those commodities and for cotton, according to economists speaking at the seminar.

LA Times:

- As Barack Obama builds his administration and prepares to take office next week, his political team is quietly planning for a nationwide hiring binge that would marshal an army of full-time organizers to press the new president's agenda and lay the foundation for his reelection. The organization, known internally as "Barack Obama 2.0," is being designed to sustain a grass-roots network of millions that was mobilized last year to elect Obama and now is widely considered the country's most potent political machine. Organizers and even Republicans say the scope of this permanent campaign structure is unprecedented for a president. People familiar with the plan say Obama's team would use the network in part to pressure lawmakers -- particularly wavering Democrats -- to help him pass complex legislation on the economy, healthcare and energy. The plan could prompt tensions with members of Congress, who are unlikely to welcome the idea of Obama's political network targeting them from within their own districts. Already, Democratic Party officials on the state level worry that it could become a competing political force that revolves around the president's ambitions while diminishing the needs of down-ballot Democrats. Though the plan still is emerging, one source with knowledge of the internal discussion said the organization could have an annual budget of $75 million in privately raised funds. As described by one source knowledgeable with the discussions, the nonprofit arm would be used to help victims of natural disasters, but would do so under the Obama umbrella while continuing to build the overall network's massive e-mail database. Democratic lawmakers in Republican-leaning districts might resist voting for an Obama-backed global warming bill. In that case, the White House or DNC could use the new network for phone campaigns, demonstrations or lobbying trips to push lawmakers to stick with Obama. "You can pretty much target the list to people who haven't always voted with Democrats," said a House Democratic leadership aide familiar with the plan.

Boston Globe:

- Google Inc.(GOOG) is offering financial incentives to expand the sales network for the software it sells to businesses while restricting the use of a free alternative in its quest to make money on something besides Internet advertising. Under a new program to be unveiled Wednesday, Google will sell a package of e-mail, word processing and other office applications to third-party software resellers at a 20 percent discount in the United States. It will be up to the participating merchants whether the savings are passed along to their corporate customers, said Dave Girouard, who runs Google's business software division.

- Massachusetts Governor Deval Patrick announced yesterday a goal of building enough wind turbines in the state by 2020 to supply energy to 800,000 homes.

Reuters:
- Former Iowa Gov. Tom Vilsack said Wednesday he will promote renewable energy like biofuels and work for "more nutritious food produced in a sustainable way" if confirmed as U.S. agriculture secretary.

Financial Times:
- Oil companies and traders are storing enough oil in supertankers to supply the world for one day, in one of the most striking signs of supply outstripping demand as the impact of the economic crisis overshadows a string of Opec production cuts, the FT reported. According to Deutsche Bank’s oil trading desk “over 80m barrels of oil is now on floating storage”, double the industry assessment of about 40m-50m last month. Investment banks are joining oil companies and traders and entering into floating storage deals.

- Iran on Wednesday signed a $1.7bn worth of oil contract with China bypassing international sanctions over the country’s nuclear program. Jiang Jiemin, the president of CNPC, China’s largest oil and gas company, and the head of National Iranian Oil Company, Seifollah Jashnsaz, signed the contract to develop part of North Azadegan oil field.

TimesOnline:

- A tidal wave of discontent threatens China. The most famous Chinese dissident predicts the Government will be trapped between the angry poor and the powerful rich. China has a $2 trillion foreign currency reserve but it also suffers from a huge disparity between the rich and poor: while 0.4 per cent of the people hold 70 per cent of the wealth of the country, a fifth of the population - more than 300 million Chinese - have daily incomes of less than one dollar. This extreme concentration of wealth is a serious problem for the Chinese Government and threatens its grip on power.

Vedomosti:

- Russia may base their 2009 budget on $32 oil.

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Estado:

- Sao Paulo industrial output fell 14% in December.