Bloomberg:
- Goldman Sachs Group Inc.(GS), one of the biggest recipients of funds from the U.S. bailout of American International Group Inc., was seen by the public as favored by regulators, according to an internal Federal Reserve Bank of New York e-mail. The public perception was a reason to reject a December 2008 media request for the names of securities purchased from banks during AIG’s rescue, according to the e-mail released yesterday. If the names of the assets were released, the banks, including Goldman Sachs, would be identified as beneficiaries, New York Fed employee Danielle Vicente wrote in the Dec. 4, 2008, e-mail to Fed counsel James Hennessy. “A major U.S. counterparty was Goldman, which has already been seen as favored by the Fed/Treasury in the public’s eye,” Vicente wrote. Regarding the non-U.S. banks, “it would be hard to sell the public on U.S. funds to buy foreign entities out of AIG risk.” Another reason that Vicente said the New York Fed wanted details of the payments withheld: The banks got 100 cents on the dollar for real-estate linked assets, called collateralized debt obligations, that had declined in value. “Counterparties received par -- which is politically sensitive -- but necessary given the economics of the deals,” Vicente wrote. “That’s something you just can’t explain in a press release because it involves understanding of why the deals don’t have isolated risks (for example, I believe one counterparty had shorted AIG risk in order to balance their AIG exposure on the CDS deals, so tearing up the trades left them exposed with no hedge, etc.)” Also yesterday, Goldman Sachs board member Stephen Friedman was asked about his tenure as New York Fed chairman and his purchase of Goldman Sachs shares while in that role. Friedman, who spent a career at Goldman Sachs, said the bank didn’t gain any unfair advantage because of his involvement. Friedman, 72, was asked whether Goldman Sachs encourages employees to work for government agencies. “What there has been over the years is a certain tradition that you work here, you try to do well for yourself and your family and then you give back and you do public service,” Friedman said. “For many years this was regarded as a very constructive and positive thing. Recently it’s gone the other way and people are thinking, ‘Is there some ulterior motive?’”
- Billionaire investor George Soros said China’s stock market is “overheating” and policy makers should seek to temper its gains. “Right now, the Chinese market is overheating and they have to slow it down,” Soros said in an interview with Bloomberg Television today at the World Economic Forum’s annual meeting in Davos, Switzerland. “It remains to be seen how successful they are.” The founder of the $25 billion hedge-fund firm Soros Fund Management LLC said there is “no attractive alternative” to the dollar, noting the U.K. is in “worse shape” than the U.S. and the euro has its “own problems.” His concern about the value of Chinese stocks reflects the results of this month’s poll of investors and analysts who are Bloomberg subscribers, which showed 62 percent of respondents view China as a bubble. Three out of 10 investors said the country posed the greatest downside risk, ranking it the second- riskiest market behind the European Union.
- Ford Motor Co.(F) posted 2009 net income of $2.7 billion, ending three straight annual losses, and forecast a 2010 pretax operating profit as Chief Executive Officer Alan Mulally reaped the benefits of his recovery plan. Fourth-quarter earnings were $868 million, or 25 cents a share, compared with a year-earlier net loss of $5.98 billion, or $2.51, Ford said today. Excluding one-time costs, profit was 43 cents a share, beating analysts’ estimates, and the shares rose. The full-year profit was Mulally’s first since coming from Boeing Co. in 2006. Dearborn, Michigan-based Ford gained U.S. market share for the first year since 1995 with new models such as the revamped Taurus sedan while the predecessors of General Motors Co. and Chrysler Group LLC reorganized with federal aid. “Ford is well along the road in their turnaround,” said John Wolkonowicz, an analyst at IHS Global Insight in Lexington, Massachusetts. “They did it without government help and by themselves. That’s giving them the highest consideration and public acceptance they’ve had in decades.”
- The euro dropped to the lowest level against dollar and yen in more than six months as Greece’s and Portugal’s budget crises spurred a retreat from riskier assets. The common currency fell against most of its major counterparts including the pound as the cost to insure Greece’s sovereign debt rose to a record. The yen climbed against the Norwegian krone and Brazilian real as investors sought refuge from European budget turmoil. “There’s definitely fear of systemic risk within the euro zone right now,” said Amelia Bourdeau, a currency strategist at UBS AG in Stamford, Connecticut. “We keep seeing more sovereign risk headlines about Greece and Portugal. That pushes the euro lower.”
- Potash Corp. of Saskatchewan Inc.(POT), the world’s largest producer of its namesake crop nutrient, said fourth-quarter profit fell 69 percent because of lower demand and reduced prices. “Things are still fragile in that there is no inventory restocking going on,” Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc., said today in a telephone interview from Toronto. “Earnings at Potash in 2010 will be up, but the base in 2009 was very low. The stock is not for the faint-hearted.” MacDougall manages about $4 billion and owns Potash Corp. stock.
Wall Street Journal:
- The British university at the center of a controversy over stolen emails on climate change research broke the law by failing to comply with requests for raw data, U.K. authorities said. But the institution won't be prosecuted because the statute of limitations has expired. The U.K.'s Information Commisioner's Office, the ICO, said the emails show requests made to the University of East Anglia under the Freedom of Information Act were "not dealt with as they should have been under the legislation." It referred to a section of the act that makes it an offense for authorities to deliberately prevent the disclosure of information requested by the public. The findings are an embarrassment for UEA and its Climatic Research Unit, whose director Professor Phil Jones was forced to step down last month pending the outcome of an investigation into the leaked email affair. The review is being led by Sir Muir Russell, an eminent former civil servant. The exposure of the thousands of emails led to allegations that UEA researchers had manipulated data to bolster the argument for global warming and squelched the views of climate change skeptics. The affair blew up just days before the Copenhagen climate-change summit and cast a pall over international efforts to curb carbon dioxide emissions. But the ICO said too much time had elapsed for those involved to be prosecuted for breaching the Freedom of Information Act. Some of the messages discussed ways to decline such requests, on the grounds that the data was confidential or was intellectual property. In some of the exchanges, U.K. researchers asked foreign scientists to delete all emails related to their work for the 2007 report by the Intergovernmental Panel on Climate Change. In others, they discussed boycotting scientific journals that require them to make their data public.
CNBC:
Washington Post:
- Obama proposes tax increase on international corporations | 9:21 p.m.
"And to encourage these and other businesses to stay within our borders, it's time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America." Obama refers here to his plan to raise taxes on international corporations by more than $200 billion over the next decade, a proposal that went nowhere in Congress after he laid it out last year. The idea is unlikely to win approval in an election year, either, and even some of the most liberal Democrats, such as House Ways and Means Committee chairman Charles B. Rangel (D-N.Y.) say they would only consider such a big tax hike on business in the context of comprehensive tax reform.
The Business Insider:
- Meet The Wall Street Fat Cats The Democrats Are Hitting Up For Huge Cash.
- Goldman(GS) Studies 24 Housing Busts: Recoveries Always Weak, But Stocks Go Up Regardless.
- The Real iPad Revolution Is The A4 Chip That’s Running it.
- Jeff Zucker May Get The Boot.
The Detroit News:
- Michigan drivers will have to navigate bumpier roads in the next five years after the Michigan State Transportation Commission this morning slashed 243 road and bridge projects from the Michigan Department of Transportation's 2010-14 road program. The commission was forced to cut the projects due to continued declines in state gas tax revenues and the state's inability to match federal dollars beginning in 2011.
Washington Times:
- President Obama's pick to help oversee U.S. export controls for the Commerce Department is a lawyer and political supporter who has been providing export advice to Fortune 500 companies such as arms manufacturer Raytheon and aerospace giant Boeing. But while White House officials and members of Congress have lauded Kevin J. Wolf's experience for the Commerce job, his recent legal work effectively appears to bar him from potential matters involving dozens of companies. Mr. Obama's ethics rules, described by the White House as "the toughest of any administration in history," prohibit political appointees such as Mr. Wolf from "particular matters" involving former employers or clients. "Depending on his former clients, Mr. Wolf might have to recuse himself from many job duties and responsibilities in which they are involved," said Scott Amey, general counsel for the nonpartisan Project On Government Oversight. "If that's the case, I would be concerned that any real or apparent conflicts of interest would hinder his ability to serve taxpayers effectively."
SeekingAlpha:
- The really big news out of Apple(AAPL) this week though has to be the astonishing breakthrough the company has made in Asia. Asia as a per centage of profits, doubled to 20% in the last quarter. Sales in Taiwan and Japan were up several fold and in China, 200,000 legal iPhones have been activated. I say legal because several hundred thousand have been smuggled into the country. China Unicom (CHU) confirms that 70% of those buying an
Huffington Post:
Rassmussen:
Politico:
- President Barack Obama received thunderous applause from Democrats when he took aim at the big banks, George W. Bush’s administration and Republicans in Congress. But perhaps nothing gave House Democrats more satisfaction than when the president used his State of the Union speech to jab the Senate – where dozens and dozens of bills have stalled, a dynamic that has helped fuel voter frustration towards Washington and House Democratic anger towards their colleagues in the upper chamber. “As you know, the Republicans are the opposition but the Senate is the enemy,” Rep. Anthony Weiner (D-N.Y.) said. “The Senate, I think, was properly chided.”
- The Senate narrowly approved a $1.9 trillion increase in the federal debt ceiling Thursday after days of failed attempts to reach agreement on any long-term plan to rein in the trillion-plus-dollar deficits now facing the government. The 60-39 roll call split the chamber sharply along party lines and, at one level, represented a last gasp of the fading 60-vote supermajority enjoyed by Democrats prior to losing a seat in a Massachusetts special election last week. The House must next act on the measure, but Democrats are hoping for quick approval there, since the bill would mean that lawmakers don’t have to face another politically difficult debt vote before the November elections.
Washington Examiner:
Reuters:
- South Korea's KOGAS said on Thursday it would invest $1.05 billion in an Iraq oil project its consortium won a right to develop. The consortium, which is led by Russia's Gazprom and also includes Malaysia's Petronas and Turkey's TPAO, will invest a total of $3.52 billion to pump 170,000 barrels of oil per day from the Badrah oilfield in eastern Iraq, KOGAS said in a statement. The deal will allow KOGAS to secure 1 million barrels of oil a year.
Telegraph:
- Gold is now "the ultimate bubble", billionaire investor George Soros has declared, sparking fears that prices for the precious metal may soon suffer a tumble. Mr Soros, arguably the most famous hedge fund manager in history, warned that with interest rates low around the world, policymakers were risking generating new bubbles which could cause crashes in the future. In comments delivered on the fringe of the World Economic Forum, Mr Soros said: "When interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. The ultimate asset bubble is gold."
Financial Post:
- Gord Nixon, chief executive of Royal Bank of Canada, is warning that the effort by governments around the world to hammer out a set of standards for the financial services sector is starting to implode. The regulators and politicians who are supposed to be in charge have been following their own interests in recent weeks instead of working toward the common goal of preventing a repeat of the financial crisis, Mr. Nixon said in an interview with the Financial Post. Mr. Nixon praised Canadian regulators and government officials, saying they have done a good job of trying to steer the discussions in the right direction. He said the push to politicize the issue is mostly coming from the United States and Europe.
China News:
- China’s central bank raised deposit reserve requirement ratios for several commercial banks with “aggressive” mortgage loans, citing Liu Yihui, a research with the Financial Research Institute of the Chinese Academy of Social Sciences.