Today's Headlines

Bloomberg:

- Almost 70 percent of Chinese readers rated U.S. President Barack Obama’s inaugural address “a masterpiece,” in an online poll by the country’s biggest Web portal. Make that a censored masterpiece. The Chinese version of Obama’s speech posted by Sina.com, with poll questions embedded at the top, did not contain a reference to fighting Communism nor a paragraph about leaders who keep power by silencing dissent.

- Hedge-fund investors withdrew a record $152 billion in the fourth quarter as the industry posted its worst returns in almost two decades, according to Hedge Fund Research Inc. Global assets dropped to $1.4 trillion at the end of the year, the same level as 2006 and $525 billion less than a peak of $1.93 trillion in June, the Chicago-based firm said in a statement today.

- A proposed change to bankruptcy law to allow judges to reduce homeowners’ mortgages may boost the capital needs of banks and insurers by hundreds of billions of dollars, First Pacific Advisors LLC’s Julian Mann said. The issue, identified by investors such as Mann and analysts at JPMorgan Chase & Co., stems from language buried in the more than one hundred pages of prospectuses for many “prime jumbo” and “Alt-A” home-loan securities. Some of the contracts state that bankruptcy-related losses greater than an amount sometimes as little as $100,000 get allocated equally among all investors in bonds backed by the loan pools, rather than lower-ranking debt first. Holders such as banks and insurers of senior classes may see their payments cut or interrupted, potentially forcing writedowns and ratings downgrades. That, in turn, could raise their capital needs.

- China’s economy faces an “extremely sharp” slowdown this year that will trail most economists’ growth forecasts, according to Balestra Capital’s Ryan Atkinson. Declining electricity output and tumbling exports are two signals China’s economic growth may slow to as low as 2% in 2009, said Atkinson, chief market analy6st at the NY-based hedge-fund manager. That compares with the 7.9% expansion forecast by economists in a Bloomberg survey.

- Brad Golding, manager of CRC Income Products Short Only Fund, more than doubled his investors’ money in 2008. They responded by pulling most of their cash from the Christofferson, Robb & Co. hedge fund in the final two months of the year. Assets in the Short Only fund declined to $35 million at year-end from as much as $145 million on Oct. 31, according to a letter to clients from Golding, 44. The drop reflects how the global credit crunch has buffeted even top-performing fund managers as potential clients shun risk-taking while current investors seek to raise cash.

NY Times:

- Police Departments Look for More Fuel-Cutting Cars.

Finextra.com:

- Continuing to provide index solutions that better meet the changing needs of the investing public, Standard & Poor's Index Services today announced the launch of the S&P CDS U.S. Indices. The Indices are designed to measure the performance of the approximately $29 trillion(1) (notional) Credit Derivatives Market.

Morningstar:

- The Morningstar 1000 Hedge Fund Index lost 10.3% in the fourth quarter of 2008 and 22.2% for the year, wiping out the last two years of gains. The index bounced back slightly after extreme market illiquidity and volatility in January and March, but since May, hedge funds have been on a steady decline. Massive losses in September and October of 7.9% and 9.8%, respectively, quashed any hope of salvaging the year, even though it ended on a positive note - December posted a 2.1% gain.

Journal Register:

- The new Obama administration circulated a draft executive order Wednesday that calls for closing the controversial detention center at Guantanamo Bay within a year and halting any war crimes trials in the meantime. While some of the detainees currently held at Guantanamo would be released, others would be transferred elsewhere and later put on trial under terms to be determined. There are an estimated 245 detainees currently held at Guantanamo, out of some 800 who were sent there during the Bush administration. The order circulated as the judge in one war crimes case agreed to Obama's request to suspend proceedings pending a 120-day review.

Boston Globe:

- Boston City Hall, the public library, and police headquarters are joining an energy-management network that will pay the city to reduce the buildings' electricity use during peak demand times, officials are expected to say today. Under the contract with EnerNOC Inc., a Boston-based company that helps customers manage electricity usage, the city also will have access to software that will allow it to analyze and streamline electricity use, potentially further reducing costs.

Crain’s NY Business:

- Avon Products Inc.(AVP) may be better positioned to withstand economic weakness than other cosmetics makers, an analyst said Tuesday.

Miami Herald:

- What if you didn't have a separate work computer to deal with anymore? Instead, you and your co-workers would use personal laptops to access work files and software -- without having to download anything on your computer. It's part of the workplace future that Citrix Systems(CTXS) and Intel(INTC) are working to make a reality.

Silicon Alley Insider:

- Apple(AAPL) Earnings Preview: How Are Sales? How Is Steve?

Reuters:
- Hours after taking office, U.S. President Barack Obama ordered military prosecutors in the Guantanamo war crimes tribunals to ask for a 120-day halt in all pending cases and a judge granted the request on Wednesday in the case against a young Canadian. When defence lawyers did not oppose the move, a judge froze the proceedings against Canadian Omar Khadr, who was captured at age 15 and is accused of murdering a U.S. soldier with a grenade during a firefight in Afghanistan. Another judge was expected to rule as early as Wednesday in the death penalty case against five prisoners accused of plotting the September 11 hijacked plane attacks that killed nearly 3,000 people. Obama's order to the prosecutors was issued several hours after his swearing-in on Tuesday and if all the continuances are granted it would halt proceedings against 21 prisoners.

- Oil demand may never return to growth in the United States, Europe and parts of Asia, easing the strain on long-term supplies and prices as emerging countries burn ever more fuel. The surge in oil to a record near $150 a barrel last year heightened concern the world will run out of crude and supply will start to dwindle -- a theory known as "peak oil". Now a deepening recession and oil price collapse have raised the issue of whether demand, not supply, is nearing its peak. "There is a reasonable likelihood that OECD oil demand has peaked," said Peter Davies, former chief economist at BP Plc who was in charge of preparing BP's annual Statistical Review of World Energy, a standard reference work.