Saturday, September 26, 2009

Noteworthy - Week of September 20th

The G-20 met in Pittsburgh, PA this week and agreed on a deal to coordinate economic policies; however, the deal does not include an enforcement mechanism. The group of 20 also came to a partial agreement on banking compensation and agreed to end energy subsidies but didn't set a deadline for the action. The U.S. was also able to persuade Europe to back a shift in the ownership of the IMF to the developing nations.

President Obama announced at the g-20 Summit on Friday that Iran is on a path toward global confrontation if it doesn't come clean with its nuclear activities when the two countries meet on October 1. Iran had admitted earlier that it had begun construction of a second enrichment facility but stated that it did not break the International Atomic Energy Agency rules in doing so. The U.S. and its allies had been watching the site for years.

Earlier in the week, the U.N. met in New York and adopted an antinuclear resolution targeting nations that use civilian nuclear technology for military purposes. Critics say that the measures are unenforceable. Notable speakers included: Libyan leader Moammar Gadhafi, who rambled incoherently at times during his first address at the U.N. in 40 years; Iranian president Mahmoud Ahmadinejad, who last week reiterated that the Holocaust is a myth, accused a small minority for causing trouble in the Middle East; Israeli Prime Minister Benjamin Netanyahu unleashed harsh words toward the U.N. for giving credence to Ahmadinejad by allowing him to speak while himself holding Nazi documents of the Holocaust; President Obama addressed the U.N. for the first time, called for a "new era of engagement" with the world. Critics lampooned the speech as one of the harshest toward Israel in their alliance as well as a weakening of the U.S. President's stance in world politics.

House Democrats, lead by Speaker Nancy Pelosi, continue to press for a public option in the health care reform bill.

Uncertainty about the strength of a global economic recovery is complicating the decision of when to end stimulus by central banks.

The Fed is looking at ways to rein in the flood of currency that it dumped on the market during the financial crisis without disrupting economic conditions. However, it extended the mortgage-purchase program this week, stating that consumer spending remains "constrained."

Lord Peter Mandelsohn, a leading international proponent of open markets, scrutinized foreign ownership of some British companies, stating that they might be a long-term disadvantage for the country. Mandelsohn's words come as Kraft is making a bid for Cadbury.

Long-term unemployment is taking its toll on citizens, making it tougher for them to find jobs and causing many to settle for union pensions and social security, rather than keep looking for work.

A vaccine that shows the first signs of preventing the spread of HIV is giving the health community hope that further breakthroughs aren't too far away.

Federal regulators said this week that banks and other institutions are facing $53 billion in losses on loans, triple that of the prior record set in 2002 and surpassing the total identified losses over the past eight years. The losses are expected to cause trouble for many banks, especially large regional institutions.

Credit-rating firms came under attack this week as lawmakers and regulators scrutinized their ratings process, after a former Moody's analyst came forward to state that inflated ratings continue within the firm.

The U.S. dollar was flat this week as risk-averse investors returned to it, briefly ending its decline.

U.S. bonds found earlier this year in Italy were, apparently, fake, according to a report by U.S. officials.

According to U.S. officials, the first al Qaeda cell in the U.S. since 9/11 has been discovered.

The U.S. is changing its approach toward Myanmar, enlisting a new set of sanctions and engagement policy in order to persuade the country's Junta to allow more democratic freedoms.

Three paper companies and the United Steelworkers filed an anti-dumping case against China and Indonesia this week.

The White House has delayed sending more troops to Afghanistan, as recommended by its appointed ground general there, in order to review its strategy.

The number of foreign-born residents of the U.S. declined this year for the first time since the 1970s.

The U.S. Air Force began its third attempt to buy $40 billion of tankers after controversy ended the two previous attempts.


Oil-trading firm Trafigura Beheer said that it has agreed to pay $48.7 million in compensation to the people of the Ivory Coast, who say they were made ill by waste dumped there in 2006.

The Americas:

Protests erupted in Honduras this week as former president Manuel Zelaya returned to the country via means of the Brazilian embassy.

The dramatic rise in cocaine production in Peru has escalated fears that the violence and corruption associated with the trade will derail one of the fastest-growing economies in Latin America.

Oaktree won a $1 billion investment commitment from the China Investment Corp, which the L.A.-based company plans to invest in distressed debt and fixed-income assets.

Dell agreed to purchase Perot Systems for $3.9 billion. The assets of Perot Systems employee and H. Ross Perot friend, Reza Saleh, were frozen this week as the SEC accused him of insider trading.

Holiday jobs look to be scarce this year as pessimism reins over the retail market.

Teen retailers are designing stores to cater to parents.

Intel sees the PC market stabilizing this year.

Bank of America and J.P. Morgan Chase plan to loosen their overdraft policies amid recent uproar over the fees imposed by banks. Officials, however, plan to push forward on fee restrictions that banks can charge their customers.

Citigroup plans to narrow its focus to six major U.S. cities and will reduce its overall consumer lending credit card and "jumbo" mortgages in the U.S. and focus on affluent customers.

In a step toward measuring how as perform on social networking sites, Facebook agreed to a deal to provide ad data to Nielson.

Veteran Pepsi executive Michael White, who led the company's acquisition of its two biggest independent bottlers, is retiring by the end of the year.

The IRS extending is deadline for U.S. citizens to declare their foreign assets.

Small investors are placing big bets on currency markets.

Sara Lee agreed to sell its international skin-care and deodorants businesses to Unilever for $1.9 billion in order to focus on its food and drink businesses.

Marvel Entertainment Chief Executive Ike Perlmutter received stock options for more than one million shares of stock (a benefit to him of $34 million) after a subordinate opened discussions with Disney, which ultimately led to a merger.

HP is using the downturn in the technology market to undercut rivals' prices in order to gain market share.

Blackstone Group LP is looking into a possible deal to buy Anheuser-Busch InBev NV's theme parks, which could fetch the alcohol beverage company between $2-5 billion.


Animosity toward the affluent is growing in China as the privileges of the sons and daughters of the rich become more apparent.

Computer makers such as Lenovo and HP are focusing on rural China as an area of growth.

L'Arc, a French themed casino owned by Macao casino magnate Stanley Ho, opened this week, driving casino shares in Hong Kong higher. Wynn Resorts is seeking to gain as much as $1.6 billion in its October IPO of its Macao assets.

Korean consumer sentiment is at a seven-year high. Strong department-store sales and mortgage demand has some believing that consumer habits there might be changing, as private consumption is expected to rise 4.2% this year.

South Korea will allow the sale of the iPhone there.

Long awaited South and North Korean reunions are set to begin this weekend with the hope that the program will bridge the two nations.

The Singaporean sovereign wealth fund said this week that they took in a $1.6 billion profit by selling 50% of their holdings in Citigroup earlier this month, benefiting from the U.S.'s bailout of the firm.


China's sovereign wealth fund, China Investment Corp., is becoming a large backer of natural-resources companies. The fund has bought billions of dollars worth of shares in companies during the past few months.

Chinese biggest steelmakers have given up hope on discounts for this year's iron ore prices and are now focusing on 2010 deliveries.


The European Commission approved a $80.7 million aid package from Poland for Dell to build a factory there.

Siemens issued an ultimatum to the seven former executives tied to the bribery scandal, as the company tries to put the past behind it.

Russia welcomed foreign investment in developing a giant Artic gas project.

U.K.-based Tesco launched a "green" grocery store near Palm Springs, California this week under its Fresh and Easy brand in an effort to try to make name for itself in the U.S. Walmart and other retailers are also trying the same approach.


Australia's mining industry is struggling to fill jobs amid a quicker-than-expected recovery in the commodity sector.

A dispute over nearly $15 billion in allegedly misappropriated government money in Brunei by the youngest brother of the sultan of Brunei appears to be nearing a resolution.


This week's Barron's "Up & Down Wall Street" by Alan Albelson.

Barron's review of this week's market news and its preview of next week's market events.

Commodities Corner

Insider Transactions

The Economist:

The Economist's review of this week's politics and business news.

The Economist's Economic and Financial Indicators:
Output, prices and jobs
The Economist commodity-price index
Asia GDP growth forecasts
Trade, exchange rates, budget balances and interest rates
Unemployment benefits

Et Cetera:

Russia's richest man, Mikhail Prokhorov, has agreed to buy an 80% share of the New Jersey Nets basketball team and a 45% stake in the Brooklyn, New York arena and nearby residential and commercial towers for $700 million.

Educators are ramping up efforts to counter social isolation that some students experience by attending online high school. Doctors are also looking into how online isolation affects students.

Irving Kristol Obituary

No comments: