Posts Tagged ‘people

16
Mar

Dodd Lays Out Details of Financial Overhaul Bill

By alfredlester Closed
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WASHINGTON — Senate Democrats, with the backing of the Obama administration, took a big step forward on Monday toward adopting the most sweeping overhaul of financial regulations since the Depression, calling on Republicans to join them to adopt the measure in the thick of an election year.

Exactly 18 months since Lehman Brothers filed for bankruptcy, setting in motion a financial crisis that required a federal bailout of unprecedented scope, the chairman of the Senate Banking Committee laid out a bill that aims to ensure stability for the financial system; close regulatory loopholes that had allowed excessive risk-taking; and protect consumers from the kinds of abusive loans that brought down the housing market.

The bill would enshrine Washington’s role in policing Wall Street, creating a nine-member council, led by the Treasury secretary, to detect systemic risks to the markets and placing the Federal Reserve in charge of all of the nation’s largest and most interconnected financial institutions.

The banking committee chairman, Christopher J. Dodd, Democrat of Connecticut, noted that negotiators from the two parties were not far apart when he announced last week that Democrats would proceed with their own bill.

“We will have financial reform adopted this year in the Congress of the United States,” Mr. Dodd said.

Even so, the measure’s prospects remained far from certain.

The major flashpoints will include, among other things, the scope of authority for a new Consumer Financial Protection Bill to be established within the Fed; the scope of exemptions under new rules governing the trade of derivatives; and the mechanism by which the government could seize and dismantle a large company on the verge of failure.

Another provision is one intended to curb Wall Street’s influence over the Federal Reserve Bank of New York. Its president would be appointed by the president of the United States, not by a board that includes representatives of member banks business card design.

Mr. Dodd estimated that there was substantial bipartisan agreement on 9 of the bill’s 11 titles, the exceptions being consumer protection and corporate governance.

The bill “reflects an awful lot of work that has gone on between Democrats and Republicans on this committee,” Mr. Dodd said, taking pains to praise the top Republican on the committee, Senator Richard C. Shelby of Alabama, and another member, Senator Bob Corker of Tennessee, who had spearheaded Republican negotiations in recent weeks.

The bill quickly attracted praise from observers — if not lawmakers — on both sides of the aisle.

“This will ensure that large financial institutions face the same resolution process as small banks and eliminate the possibility of future government bailouts,” said Sheila C. Bair, a Republican who is chairwoman of the Federal Deposit Insurance Corporation.

Elizabeth Warren, a Harvard law professor who is chairwoman of the Congressional Oversight Panel that oversees the Troubled Asset Relief Program, said in a statement, “Despite the banks’ ferocious lobbying for business as usual, Chairman Dodd took an important step today by advancing new laws to prevent the next crisis. We’re now heading toward a series of votes in which the choice will be clear: families or banks.”

Douglas J. Elliott, a former investment banker and now a fellow at the Brookings Institution, said the proposal appeared to “represent a major improvement to the status quo, but political compromises significantly diminish its effectiveness compared to an ideal set of reforms.”

Dodd Lays Out Details of Financial Overhaul Bill

02
Mar

Dividends on the rise after worst-on-record year

By alfredlester Closed
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CHICAGO (MarketWatch) — After 2009 saw companies slashing or eliminating dividend payouts left and right, many American firms are beginning to cautiously reinstate — or even raise — theirs in this period of assumed recovery.

While shareholder payouts still lag versus 2008’s, more than a dozen of the S&P 500 have raised or initiated a dividend this year, while only two have decreased or suspended them. And the firms now offering higher payouts represent a wide range of industries, from Coca-Cola to Tiffany and P.F. Chang’s to T. Rowe Price .

And there could be more to come.

“We expect dividend payments to rebound in 2010, including those from the financial sector, as dividends are reinstated, since some companies now have both the ability and incentive to pay dividends,” said Jeffrey Kleintop of LPL Financial Research. “In the current environment, a boost to the dividend payment may signal more confidence in sustained growth by business leaders than their guidance on the earnings outlook, helping to lift stock prices along with the dividend payout.”

That comes after an especially rough spell as “the past two years have been tough on dividends,” Kleintop added. “In fact, 2009 marked the worst year on record for dividends since 1955, resulting in a 21% decline in dividends per share for the S&P 500 companies as a whole.”

In 2008 and 2009, 32 S&P 500 companies suspended their dividends, while only 11 initiated them, but 49 have raised or initiated dividends so far this year. One of the latest is Qualcomm , which announced late Monday that that its quarterly dividend would increase almost 12% to 19 cents a share.

‘2009 marked the worst year on record for dividends since 1955.’

Jeffrey Kleintop, LPL Financial Research

“The strength of our business model is enabling significant investments in our strategic business initiatives while returning capital to stockholders,” said Paul Jacobs, chief executive of the wireless-technologies firm, in announcing the hike. “Since commencing this program in 2003, we have returned $12.6 billion to our stockholders through a combination of dividends and stock repurchases payday advance online.”

For the month of February alone and for all reporting issues — not just the S&P 500 — dividend increases are up 29% from February 2009, although they’re still down 42% from February 2008, noted Howard Silverblatt, senior analyst at S&P Indices.

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“February is typically a good month, and this one has come through,” he said. “Actual cash payments are still down year-over-year, but at least it’s starting to go back up.” He added that he expects it will “most likely [be] 2012-13 until we reach 2008 levels.”

For the S&P 500, “it is the best month in two years, with a very impressive three-month run,” he continued. “I expect more good news, but not as much of it over the next few months; I also expect reductions to start next month.”

Josh Peters, editor of Morningstar’s DividendInvestor, said dividends “really bottomed out last summer after a spate of cutting we hadn’t seen since the Great Depression,” including one from Dow Chemical , for the first time in 97 years. At the same time, he noted that some of the mote stable consumer-focused companies, like McDonald’s and General Mills , “continued to raise theirs even during the crash.”

But over the last couple of months, “we have seen less-traditional payers deciding to raise their dividends,” including retailers, restaurant chains and tech firms, he said. “And assuming we don’t tip back into a double-dip recession, we should continue to see more dividend increases than cuts.”

Many companies will have to do so just to stay competitive against other issues in the stock market, he said, especially as more and more Baby Boomers near retirement.

“They have learned that stock prices don’t just go up, and they will want the reliable income,” Peters said. “Compared to 10 years ago, the idea of trying to live off capital gains is truly frightening.”

Dividends on the rise after worst-on-record year

28
Feb

James River Coal 4th-quarter loss narrows

By alfredlester Closed
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RICHMOND, Va. – Coal mining company James River Coal Co. said Friday that its fourth-quarter loss narrowed, but the company said its results were hurt by lower rates of production at its mines.

The company also put out 2010 guidance that came up short of analyst expectations.

James River Coal said it lost $3.2 million, or 12 cents per share, compared to a loss of $33.6 million, or $1.26 per share, in the year-earlier quarter.

The company sold $149.5 million worth of coal during the quarter, up from $140.8 million in the 2008 fourth quarter. But company executives said that they were forced to reduce production because of soft coal markets business cards.

Analysts surveyed by Thomson Reuters expected earnings of 44 cents per share on sales of $175.4 million.

For 2010, the company projects earnings of $1.70 to $2.25. That is below the analyst consensus view of $2.93 per share.

James River Coal earned $51 million, or $1.85 per share, for all of 2009.

Shares of the company fell $1.09, or 6.4 percent, to close at $15.91.

James River Coal 4th-quarter loss narrows

26
Feb

A.I.G. Reports a Loss and Increases Its Reserves

By alfredlester Closed
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The American International Group, the insurance giant, said Friday that it lost about $11 billion last year, and cited a rebound in annuities sold by its renamed life insurance companies as a bright spot.

The insurer’s year-end result was a small fraction of the record-breaking loss of $61.7 billion that it reported for 2008, when its large derivatives portfolio blew up, leading to a government bailout. Most of the 2009 loss came from a fourth-quarter charge taken to reflect that its bailout had been restructured — a one-time charge that A.I.G. has been warning about for months. The charge was not connected with the company’s core insurance operations.

But a big part of the loss was directly related to its insurance activity — A.I.G. increased its reserves on the advice of its outside actuaries. The move seemed to vindicate a study by the Sanford C. Bernstein research firm last November, which found a big shortfall in A.I.G.’s reserves for its property and casualty businesses. Those businesses have been renamed Chartis and are expected to be A.I.G.’s backbone.

Insurance companies set aside reserves to pay claims that they anticipate, and when they have to strengthen inadequate reserves, they take money from earnings. The Bernstein analyst, Todd R. Bault, had predicted that A.I.G. would have to “take some kind of a reserve charge” before it could offer Chartis’s shares to investors, as part of the company’s plans to restructure and pay back its government bailout.

For the fourth quarter alone, A.I.G. lost $8.87 billion, or $65.51 a share. That compared with a loss of $458.99 a share in the period a year ago. Analysts surveyed by Thomson Reuters forecast a loss of $3.94 a share.

A.I.G. said that $2.7 billion of its loss, on a pretax basis, came from increasing its reserves. Much of the increase took place in the fourth quarter, after an annual study showed a deficit in the amounts needed to pay workers’ compensation and other commercial claims that are gradually coming due on policies sold in 2002 and earlier.

Mr. Bault had reported that A.I.G.’s reserves seemed inadequate for its workers’ compensation and other types of insurance where claims take a long time to develop. But he said the deficit appeared to be much larger, estimating it at $11.9 billion. A.I.G. said the increase in reserves left Chartis with a surplus of $27 billion, 4 percent more than its surplus in 2008.

The chief executive, Robert Benmosche, said in a statement: “Our team has made great progress during the year in executing our strategic restructuring plan.”

In addition to strengthening the insurance companies, he cited the progress made in winding down A.I.G.’s derivatives business, and “positioning certain businesses for sale.”

A.I.G. has announced that it will sell shares in its biggest international life insurance company, the American International Assurance Company Ltd online pay day loans., on the Hong Kong stock exchange sometime this year. It has also been negotiating the sale of another large international life insurance company, known as Alico, to MetLife. The talks have proceeded slowly because of questions about a possible tax liability and who would pay it.

The first $25 billion in proceeds from those two transactions are to go to the Federal Reserve Bank of New York, to pay back part of the cost of rescuing A.I.G.

Already, A.I.G. had replaced $25 billion of rescue debt to the New York Fed with $25 billion of equity, an investment which will pay off when the sales of the two foreign life insurers go through. The debt-for-equity swap lightened A.I.G.’s debt burden, averting a credit downgrade that loomed in the first quarter of 2009, when the company announced its disastrous 2008 results.

The company said $5.2 billion of its year-end pre-tax loss was the result of eliminating the $25 billion of debt to the Fed. It has been carrying the lending commitment as an asset on its balance sheet, but was able to speed up the amortization of the so-called commitment asset, leading to the $5.2 billion pre-tax charge.

In addition, A.I.G. paid the New York Fed $5.2 billion of interest on its rescue loans over the course of 2009.

Another big factor in A.I.G.’s losses for 2009 was the pending sale of yet another foreign life insurance company, the Nan Shan Life Insurance Company, of Taiwan. Although the sale has not yet closed, A.I.G. said it had recognized a $2.8 billion pretax loss on the sale in the fourth quarter.

In his statement, Mr. Benmosche said his team was “increasingly confident in how we see the mix of A.I.G.’s businesses over the long term.”

He said the “nucleus” would consist not only of Chartis but of “a strong U.S. life and annuity operation and several other businesses,” which he did not identify. In the months immediately after A.I.G.’s rescue, its interim chief executive, Edward Liddy, had spoken of selling the company’s domestic life insurance companies.

Since then, the life insurance companies have been renamed and at least some of them have emerged as significant sources of cash for A.I.G. Mr. Benmosche cited in particular a subsidiary once called A.I.G. Annuity, which last year reverted to the name it used before A.I.G. acquired it, Western National.

Under the new name, Western National has reclaimed its former position as the largest seller of single-premium fixed annuities in banks. Some banks had suspended the sales immediately after the bailout, but in the second half of 2009 the sales were resumed. Demand was strong because the annuities, which are not insured by the F.D.I.C., have offered customers more interest than similar bank deposits.

A.I.G. Reports a Loss and Increases Its Reserves

13
Feb

Euro Hovers Near Nine-Month Lows

By alfredlester Closed
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HONG KONG — European leaders’ declaration of support for Greece may have helped ease global worries of a debt default, but it did little to lift the euro, which hovered around nine month lows against the dollar on Friday.

Any gains in the currency shared by 16 European countries were undermined by lingering concerns about the fragile finances of several nations in the euro zone, analysts said.

The euro has sagged sharply against the dollar and the yen since January, as worries about a potential debt default by Greece began to surface.

At the start of this year, a euro bought around $1.45 and 133 yen; by midday in Asia on Friday, it bought only $1.37, and 122.5 yen.

Friday’s levels were a touch lower than Thursday’s — despite the European support for Greece — meaning the single currency remains around its weakest level against the U.S. currency since May last year. The last time the euro was at such levels against the yen was a year ago.

Stock markets, too, took only limited comfort from Thursday’s news out of Brussels, which was little more than a statement from European leaders to aid Greece during its debt crisis, if needed. Leaders offered no details on what that support would entail.

The main stock market indexes in the Asia-Pacific region were mixed, with muted rises in Japan, Hong Kong and Australia, and equally limited falls in South Korea.

The Nikkei 225 index in Tokyo was 0.9 percent higher by early afternoon. The Hang Seng in Hong Kong and the Straits Times index in Singapore gained about 0.3 percent, and the benchmark index in Australia edged up 0.1 percent In South Korea, the Kospi index slipped 0 free credit scores.3 percent by around noon.

On Thursday, the Dow Jones industrial average gained 105.81 points, or 1.05 percent, to close the day at 10,144.19. European markets ended Thursday mixed.

“Yesterday’s news on Greece did not actually provide much more than had been widely expected. The market was hoping for more specifics, so the reaction is now quite muted,” said Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong.

Activity across much of the region was also dampened ahead of the Lunar New Year holiday, which will shut much of the region — notably China, Hong Kong, Singapore and Taiwan — on Monday.

“Risk appetite should gradually resume — unless we get massive violence in the streets of Greece,” Mr. Kowalczyk added, referring to worries that the Greek government’s efforts to reduce its deficit will be constrained by mass popular opposition.

Striking civil servants brought public services to a halt across Greece on Wednesday, in a largely peaceful one-day protest against the tough austerity measures that officials have said are necessary to stave off a mounting financial crisis. A much broader strike is planned for Feb. 24. “Feb. 24 will be a day to watch,” Mr. Kowalczyk said.

Better-than-expected news Thursday from the closely-watched U.S. jobs market failed to set spark strong gains. The number of Americans filing first-time unemployment claims fell by more than expected last week.

Euro Hovers Near Nine-Month Lows

06
Feb

Earnings Preview: Lorillard Inc.

By alfredlester Closed
Categories: blog, economic, market, money and world
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RICHMOND, Va. – Lorillard Inc., the nation’s third-biggest cigarette company, reports its fourth-quarter results before the stock market opens Monday.

WHAT TO WATCH FOR: Any sign the maker of Newport cigarettes is losing market share loss among menthols or gaining in the discount segment — and any sign that cigarette volumes are rebounding from sharp drops in volume experienced industrywide in 2009 due to a federal tax hike.

Analysts believe the Greensboro, N.C., company continues to have the industry’s best outlook for profit margin, price per pack and volume.

Despite the Food and Drug Administration’s pending study on the public health impact of menthol, the segment continues to grow as the rest of the cigarette market shrinks. A scientific committee being organized by the FDA must study and issue a report on the public health impact of menthol cigarettes.

The top two U.S. cigarette companies — No. 1 Philip Morris USA, owned by Richmond, Va business cards.’s Altria Group Inc., and No. 2 Reynolds American Inc., based in Winston-Salem, N.C. — are ramping up efforts to grab some of the menthol market away from Lorillard.

Lorillard is working to grow its Maverick discount brand as the weak economy and high unemployment have caused some consumers to switch to lower-priced brands.

WHY IT MATTERS: As demand for cigarettes continues to fall, any rebound in volumes could signal consumers are adjusting to April’s 62-cents-per-pack federal tax hike, which most cigarette makers accompanied with price hikes.

WHAT’S EXPECTED: Analysts polled by Thomson Reuters on average expect Lorillard to earn $1.51 per share on revenue of $1.23 billion.

LAST YEAR’S QUARTER: Lorillard reported profit of $1.53 per share on revenue of $1.09 billion.

Earnings Preview: Lorillard Inc.

24
Jan

India carmaker Maruti profit triples

By alfredlester Closed
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NEW DELHI (AFP) – India's biggest carmaker Maruti Suzuki said Saturday its quarterly net profit more than tripled as it announced plans to increase capacity to maintain its dominance of the domestic market.

Maruti, majority owned by Japan's Suzuki Motor Corp, said net profit during the fiscal third quarter soared to 6.88 billion rupees (149 million dollars) from 2.14 billion rupees a year earlier.

The performance, fuelled by cheap loans and a reviving domestic economy, beat analyst expectations that profit for the three months to December would be around 5.8 billion rupees.

"This has been a good quarter," said Maruti's chief financial officer Ajay Seth, as he announced the company would expand capacity to defend its market leadership position from global rivals and meet increasing domestic demand.

A host of vehicle makers from General Motors to Renault and Toyota have unveiled plans for car launches in India to grab a larger slice of the fast-growing market and counter sluggish demand in developed countries.

India is now Asia's third-largest car market, outstripped only by China and Japan, and is one of the few countries where automobile sales are rapidly increasing. Car sales jumped 19 percent last year to 1.43 million units.

Maruti, which sells about one in two cars in the country, said sales jumped 62.5 percent to 73.34 billion rupees.

Seth said Maruti planned to invest 17 billion rupees to make 250,000 more cars each year from April 2012, increasing total capacity from one million units.

The expansion would take place at Maruti's plant at Manesar near the Indian capital.

Seth said Maruti could further ramp up capacity "if there is a need later no fax cash advances."

The car manufacturer attributed the profit increase partly to government stimulus measures aimed at helping the industry ride out the global economic slump.

The measures have put more money into the hands of India's growing middle class.

"Favourable conditions in the domestic market supported by the government's stimulus package and ease of automobile finance helped achieve good sales," the company said in a statement.

Nearly four-fifths of cars in India are bought using loans.

The central bank has cut interest rates to record lows to cushion the impact of international financial slump.

Maruti's domestic sales in the quarter jumped by 38 percent to 218,910 units while exports soared by 167 percent to 39,116 vehicles, spurred by European government incentives to scrap ageing vehicles.

Seth said the company was "cautiously optimistic" about sales volumes in the fourth quarter but added rising commodity prices would put pressure on profit margins.

"We also have to keep in mind interest rates may rise (as the domestic economy recovers) and it is important that government incentive measures stay in place" to help keep the market buoyant, he told AFP.

Passenger car sales are forecast to reach two million this year and are expected to triple in the next decade, boosted by higher incomes in the country of 1.2 billion people, according to industry estimates.

India carmaker Maruti profit triples

21
Jan

Fed defends actions in AIG case, invites inquiry

By alfredlester Closed
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WASHINGTON (Reuters) – Federal Reserve officials on Tuesday launched a vigorous defense of their dealings with American International Group (AIG.N), calling for a Congressional audit and denying any inappropriate action with respect to payments the bailed-out insurer made to banks.

Fed Chairman Ben Bernanke invited a full Congressional audit of the U.S. central bank's dealings with AIG and the New York Fed turned over 250,000 pages of documents to a House committee that has scheduled a hearing on the matter next week.

The U.S. House of Representatives Oversight and Government Reform Committee is investigating whether the New York Fed improperly limited public disclosures about payments to banks to unwind $62.1 billion in AIG credit default swaps.

In a lengthy memo posted on its website, the New York Fed contested a number of basic points that had been reported earlier after a batch of emails was released by a lawmaker that appeared to show the New York Fed counseled AIG not to reveal it was paying banks 100 cents on the dollar on credit default swaps it had written.

The New York Fed said it was "incorrect" to say that as a result of its actions, AIG did not tell the Securities and Exchange Commission that it was paying banks including Goldman Sachs Inc (GS overnight pay day loans.N) 100 cents on the dollar for swaps contracts.

AIG, in filings with the SEC, said the securities were being bought by letting banks retain collateral and by making cash payments that — taken together — roughly equaled the full value of the swaps, the Fed said.

The New York Fed also disputed charges that it leaned on AIG not to make required disclosures to regulators about the transactions.

"Some have … suggested that the (New York Fed) pressured AIG not to make required disclosures about material elements of the Maiden lane III transactions," the Fed said, referring to the special entity it set up to fund the rescue of AIG swaps contracts.

"This is also incorrect," the New York Fed asserted.

The central bank further denied that it was as a result of pressure from it that AIG sought to keep the names of the counterparties under wraps.

When pressed to disclose the names by the SEC, AIG sought confidentiality, fearing those firms and others might sever businesses ties over a breach of trust, the New York Fed said.

Fed defends actions in AIG case, invites inquiry

08
Jan

Mixed Data in Britain Prompts Bank to Keep Rates Unchanged

By alfredlester Closed
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PARIS — The Bank of England held steady on interest rates and monetary stimulus Thursday amid mixed signals on the economic recovery in Britain, while separate data showed the moderate rebound in the euro area progressing.

The British central bank’s monetary policy committee voted unanimously to leave the benchmark interest rate at 0.5 percent and to keep its program for asset purchases, enacted as an unorthodox means of stimulating demand, at £200 billion, or $319 billion. The bank had expanded the asset-purchasing plan in November for a third time but chose to leave it unchanged last month.

The bank said in a statement that it expects the asset purchases “to take another month to complete,” and that “the scale of the program will be kept under review.”

Analysts had expected the central bank to remain cautious and wait another month before making any policy shift.

By contrast, some other countries have already started to scale back emergency stimulus packages.

The central bank of Switzerland said in December that it would stop buying corporate bonds. The European Central Bank has also announced plans to scale back its extraordinary fund auctions, while the Federal Reserve is expected to begin draining liquidity from the U.S. financial system this year.

In Britain, most of the central bank purchases have been British government bonds, or gilts. The bank is expected to complete the last of these purchases before its meeting next month, by which time it will have new data available, including fourth-quarter G.D.P. numbers.

Those numbers are expected by economists to show that the economy returned to positive growth, having entered recession in the spring of 2008 no faxing payday loan.

Britain has lagged its rivals in coming out of recession. The economies of France, Germany and the United States all started growing again during the third quarter of last year.

Meanwhile, in a report released Thursday, the European Commission said economic sentiment in the 16 countries using the euro improved in December, with both consumer and industrial confidence rising modestly.

The European Commission’s economic sentiment indicator rose to 91.3 in December from 88.8 in November. This was above the consensus forecast of 90. Economists said the numbers were consistent with an ongoing but moderate recovery.

German industrial orders were up 0.2 percent on the month in November, the Economy Ministry said. That followed a 1.9 percent decline in October.

Consumer-related data from the region, however, were softer.

Another release showed that retail sales in the region fell by 1.2 percent in November following a 0.2 percent rise in October.

The recent economic data from Britain have also been mixed.

British house prices rose 1 percent in December, ending the year 1.1 percent higher than at the end of 2008, according to the mortgage lender Halifax.

The Society of Motor Manufacturers said Thursday new car sales in Britain rose last month 39 percent from a year earlier as government incentives bolstered demand.

At the same time, consumer confidence fell in December, the Nationwide mortgage lender said Wednesday.

Mixed Data in Britain Prompts Bank to Keep Rates Unchanged

Hot News: Wall Street trades mixed as investors await key employment data

04
Jan

Wall St rises on higher oil, data on tap

By alfredlester Closed
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NEW YORK (Reuters) – U.S. stock index futures pointed to a higher open on Monday on a jump in crude oil prices and ahead of data expected to show expansion in the manufacturing sector.

On the first trading day of the year, investors are awaiting November construction spending data and the Institute for Supply Management's manufacturing index for December, which analysts forecast will rise from the prior month.

"An improvement in the datapoints will be another confirmation of the evidence that we've been getting stronger," said Edward Riley, chief executive of Riley Asset Management in Boston.

"Also, people tend to put more weight on data that comes out in the beginning of the year, so this could have an out-sized influence on trading."

Russia had halted supplies to Belarussian refineries after failing to resolve an oil pricing dispute, according to traders, but on Monday, the Belarus state oil firm said Russian oil was flowing normally to European Union customers via Belarus. February crude futures gained 2.1 percent to a two-month high.

Also helping commodities was a weak U.S. dollar, which fell 0.5 percent against a basket of currencies (.DXY).

S&P 500 futures rose 7.3 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract paydayloans. Dow Jones industrial average futures added 67 points and Nasdaq 100 futures gained 20.50 points.

Shares of Chesapeake Energy Corp (CHK.N) gained 5.7 percent to $27.35 in premarket trading after Total SA (TOTF.PA) agreed to pay $2.25 billion for a 25 percent stake in Chesapeake's Barnett Shale gas fields.

U.S. Federal Reserve Chairman Ben Bernanke said Sunday that vigorous financial regulations would have been the best way to restrain the housing bubble that helped cause the deep recession, but said policymakers can no longer rule out monetary policy to curb the buildup of risk.

Overseas markets traded higher, with both European and Japanese shares hitting 15-month highs.

U.S. markets were closed Friday for New Year's Day. On Thursday, stocks fell, with the three major indexes down about 1 percent. For 2009, the Dow gained 19 percent, the S&P rose 24 percent, and the Nasdaq added 44 percent.

(Editing by Jeffrey Benkoe).

Wall St rises on higher oil, data on tap

02
Jan

Time Warner and Fox Reach a Cable Deal

By alfredlester Closed
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The News Corporation and Time Warner Cable struck a deal just in time for the Sugar Bowl.

The two companies said Friday evening that they had agreed on new terms for a contract covering Fox stations in New York, Los Angeles, Orlando and other markets, averting a blackout of the weekend’s college bowl games in millions of homes. They did not disclose the terms.

The deal between the News Corporation and Time Warner caps weeks of sparring over the price that the cable company — and by extension its customers — should pay to watch Fox, ahead of an end-of-the-year contract expiration.

Analysts had expected that the deal would set a new high-water mark for local TV stations that want sizable subscriber fees in exchange for so-called retransmission rights.

In tense negotiations with Time Warner Cable, Fox had demanded about a dollar a subscriber per month, far more than other stations have received. Time Warner Cable thought 30 cents was more reasonable, said people briefed on the talks who insisted on anonymity because the specifics of the talks were confidential.

Most likely, the two companies reached a compromise on the price, but both refused to comment Friday on the figure.

“We’re pleased that, after months of negotiations, we were able to reach a fair agreement with Time Warner Cable — one that recognizes the value of our programming,” said Chase Carey, the president of News Corporation, in a statement.

Time Warner Cable’s president, Glenn Britt, called it a “reasonable deal.”

Meanwhile, customers of another major cable operator, Cablevision, were reminded Friday of what can happen when carriage talks break down. The Food Network and HGTV were unexpectedly removed from Cablevision’s lineups in New York, New Jersey and Connecticut shortly after the stroke of midnight, sending angry customers to their keyboards and phones to demand answers. Cable and satellite operators pay media firms for the right to carry channels, and those fees are reflected in customers’ bills.

Cable operators have historically resisted paying directly for the right to retransmit stations, but they have softened their stance in recent years, and some stations now receive between 10 cents and 40 cents a month per subscriber.

Fox asserted it deserved more. Rupert Murdoch, the News Corporation chairman, has positioned the company as a leader in “creating an economic template for the future.” Every cent represents millions of dollars in monthly revenue.

Analysts say the Fox station group’s aggressive stance could benefit other broadcasters. In a report last month, analysts at UBS said the current dispute was “likely a harbinger of things to come as consumers have more alternatives to cable than ever before,” giving programmers more leverage in negotiations easy payday loans.

The big fee for Fox was part of a larger package of News Corporation channel renewals, which put cable channels like FX at similar risk of vanishing from Time Warner Cable systems, at least temporarily.

Fee negotiations are usually conducted discreetly, and deals are often completed close to their deadlines without viewers ever knowing. But Fox’s clash with Time Warner Cable broke out in public in November when the cable operator started a campaign to hold the line on programmer fee increases.

Some networks, it said on its Web site, “are trying to boost their bottom line by squeezing cable TV viewers like you — and threatening to pull the plug on popular shows if we don’t roll over.”

Networks say the fee increases are a matter of survival — or at least are necessary to keep producing quality programming.

Time Warner Cable representatives traveled to Los Angeles for talks with News Corporation early in the week. Under pressure from the government and from viewers to stave off a blackout, representatives for both sides met in a conference room on the Fox studio lot at 10 a.m. Pacific time on Thursday, and talks continued through Friday evening, said an executive briefed on the talks who was not authorized to speak publicly.

The Fox negotiators had the option to pull the plug after the contract expired early Friday morning, but they decided to keep talking.

On the other side, the Food Network and HGTV outage affected about 3.1 million subscribers in the New York metropolitan area on Friday. The owner of the popular channels, Scripps Networks, says it deserves more cash for them. “The distribution rates Cablevision pays for Food and HGTV are among the lowest in the industry,” said Kenneth W. Lowe, the chief executive of Scripps Networks Interactive.

According to the research firm SNL Kagan, distributors pay about 8 cents on average for Food Network and 13 cents for HGTV. Scripps was believed to be asking for about triple that amount, or roughly 25 cents for Food and 40 cents for HGTV.

Cablevision took a hard line in its own statement Friday, saying that it had “no expectation of carrying” Scripps’s programming again, “given the dramatic changes in their approach to working with distributors to reach television viewers.”

Scripps’s contracts with Time Warner Cable also expired on Dec. 31, but those two companies continued talking into the new year without an interruption in programming.

Time Warner and Fox Reach a Cable Deal

30
Dec

Panel Rejects French Carbon Tax

By alfredlester Closed
Categories: all, blog, market, money and news
Tags: , , , ,

BRUSSELS — France’s Constitutional Council has rejected a tax on carbon emissions strongly backed by President Nicolas Sarkozy that was to take effect Friday. But his ruling conservative party said the measure would be redrafted so it could be passed into law next year.

The council ruled late Tuesday that the bill contained too many exemptions for polluters, broke with past practices and threatened to make tax collection unfair.

The ruling is a blow to Mr. Sarkozy, who has sought to burnish his green credentials by holding international talks next year to seek agreement on emission cuts following the Copenhagen climate conference. Environmental groups have said they expect the talks to be held in Paris.

The Copenhagen conference, which ended without a timetable to reach a binding global agreement to curb greenhouse gas emissions, represented a humiliation for European Union leaders seeking to lead global efforts to tackle climate change.

Mr. Sarkozy said he strongly favored the tax, scheduled to go into force on the first day of the new year, as a way to shift France onto a low-carbon path and modify the way the state collects revenue.

The tax was set at €17 for each ton of carbon dioxide.

Members of opposition Socialist party, many of whom said the tax would damage citizens’ purchasing power, said the defeat was personal one for Mr. Sarkozy because he had cultivated an image of aggressively on fighting emissions on the international stage but was unable to put in place workable policies at home.

Members of the French Green party said the defeat would force the government to come forward with a bill that would be more effective in helping to curb France’s contribution to global warming.

A number of Scandinavian countries already have similar taxes, which raise the cost of fuel for motorists and for household heating.

But in its ruling, the French council said the tax was flawed because it would have primarily raised the cost of fuel for vehicles and heating even though there are many other sources of emissions cash advance to savings account.

Senior members of Mr. Sarkozy’s party immediately said the government would amend the text of the bill, taking into account the objections of the council, and present a new text for approval by the country’s council of ministers on Jan. 20.

But it remains unclear how the bill could be modified to meet the demands of the council without fierce objections from French industry.

A move to subject heavy industries to the tax would be opposed by French companies that already complain the costs of doing business in the country make it difficult for them to compete in Europe and elsewhere.

France has backed efforts to introduce an E.U.-wide carbon tax that could overcome some of those objections. But many countries like Britain strongly oppose moving such fiscal decision-making from national capitals to Brussels.

Mr. Sarkozy also has promoted so-called border taxes at the E.U.’s frontiers to protect the competitiveness of European industry. But those taxes could provoke a trade war with key partners like China and the United States.

The European Union has operated an Emissions Trading System since 2005 that requires large polluters like cement manufacturers, steelworks and electricity utilities to hold a certain quota of permits to emit greenhouse gases.

Those companies must buy additional permits if they exceed their quota.

But the price of those permits has never been high enough for long enough to push utilities to adopt lasting changes. The French carbon tax was envisaged as a means to nudge industry toward systemic change by pushing up the cost of using products and services based on fossil fuels.

Panel Rejects French Carbon Tax

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