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Home prices plunge record 18.2 percent

NEW YORK (Reuters) - Home prices plunged a record 18.2 percent in November from a year earlier as the country's housing market remains in the throes of a deep recession, according to an index from Standard & Poor's.

Prices in 20 metropolitan areas tracked by S&P fell 2.2 percent from October as housing continues to suffer from a huge supply of unsold homes, tighter lending standards and record foreclosures.

The drop in prices on a month-over-month basis was slightly steeper than expectations, based on a Reuters survey of economists.

However, the annual rate of decline for the Standard & Poor's/Case-Shiller composite index for 20 cities was not as steep as economists had expected.

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NY financier arrested in purported $400 million scam

NEW YORK (Reuters) - Authorities on Monday arrested the chief executive of a private New York financing firm on suspicion of running a purported Ponzi scheme that attracted $400 million in investments, U.S. law enforcement officials said.

Nicholas Cosmo, head of Agape World Inc on New York's Long Island, was said to provide commercial bridge loans, but was instead operating a traditional Ponzi scheme in which early investors are paid with the money of new clients, officials said.

"Nicholas Cosmo took the advice of an attorney and complied with an arrest warrant," said Al Weissmann, spokesman for the U.S. Postal Inspection Service, which is investigating Agape World and Cosmo along with the FBI.

Another law enforcement official, said agents had visited Cosmo's office on Monday expecting to arrest him, but he was not there.

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Oil falls 5 percent on weak U.S. economic data

NEW YORK (Reuters) - Oil fell nearly 5 percent on Tuesday after bleak economic data from top energy consumer the United States stirred demand concerns.

U.S. consumer confidence slipped to a record low in January, a survey showed on Tuesday, as governments around the world offered further help to banks and industries battered by the financial crisis. [nT114397]

U.S. home prices, meanwhile, plunged a record 18.2 percent in November from a year earlier as the housing market remained in the throes of a deep recession, Standard & Poor's data showed on Tuesday.

U.S. crude traded down $2.27 to $43.46 a barrel by 12:16 p.m. EST, while London Brent crude fell $2.42 to $44.54 a barrel.

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Obama tells Citibank To Ditch plans for $50 Million Private Jet

The high-flying execs at Citigroup caved under pressure from President Obama and decided today to abandon plans for a luxurious new $50 million corporate jet from France.

The decision came 24 hours after the banking giant, which was rescued by a $45 billion taxpayer lifeline, defended buying the state-of-the-art Dassault Falcon 7X -- one of nine to be flying in U.S. skies -- as a smart business deal.

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Lehman Brothers' Richard Fuld 'sold' mansion to wife for $100

The disgraced chief executive of Lehman Brothers transferred ownership of a $14 million Florida mansion to his wife for $100 in a possible attempt to move assets beyond the reach of infuriated investors of the collapsed bank.

Richard Fuld, who led the 158-year-old investment bank to its demise last September, sold the beach-front house to his wife, Kathleen, for $100 (£72) on November 10, according to Marin County real estate records.

The couple had previously jointly owned the Jupiter Island property, which was valued at $13.75million when they bought it in March 2004.

Cityfile.com, the New York website that uncovered the secret sale, speculated: “Could Fuld be worried about the flurry of lawsuits from incensed shareholders and creditors?”

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Target to Cut 1,100 Jobs

Retail chain Target (TGT Quote - Cramer on TGT - Stock Picks) Tuesday became the latest U.S. company to announce layoffs in hopes of cutting costs.

The Minneapolis-based retailer said the planned workforce reduction will affect 9% of its headquarters population, including the elimination of 600 employees and 400 open positions in the Twin Cities area. Additionally, Target will close a distribution center in Little Rock, Ark., which currently employs 500 workers, before the end of the year.

Target said it has experienced weaker-than-expected sales, which is pressuring earnings performance. Combined with the outlook for continued difficult economic conditions well into 2009, the company said it is taking a more conservative approach to business planning.

"We are clearly operating in an unprecedented economic environment that requires us to make some extremely difficult decisions to ensure Target remains competitive over the long-term," President and CEO Gregg Steinhafel said in a company statement.

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[The Helper]

House OKs $819B stimulus bill in win for Obama

WASHINGTON (AP) - In a swift victory for President Barack Obama, the Democratic-controlled House approved a historically huge $819 billion stimulus bill Wednesday night, filled with new spending and tax cuts at the core of the young adminstration's revival plan for the desperately ailing economy. The vote was 244-188.

"We don't have a moment to spare," Obama declared at the White House as congressional allies hastened to do his bidding in the face of the worst economic crisis since the Great Depression.

The vote sent the bill to the Senate, where debate is expected to begin as early as this week on a companion measure already taking shape. Democratic leaders have pledged to have legislation ready for Obama's signature by mid-February.

A mere eight days after Inauguration Day, Speaker Nancy Pelosi said Tuesday's events heralded a new era. "The ship of state is difficult to turn," said the California Democrat. "But that is what we must do. That is what President Obama called us to do in his inaugural address."

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Russia and China blame crisis on debt binge

DAVOS, Switzerland (Reuters) - China and Russia blamed debt-fueled consumption on Wednesday for massive financial collapse and called for global cooperation to repair the world economy.

"The existing financial system has failed," Putin told business and political leaders holding their annual World Economic Forum in this Swiss ski resort.

Growth was based on greed where one center printed money without respite and consumed wealth, and another manufactured cheap goods and saved money, he said.

His clear swipe at the United States was echoed by Chinese Premier Wen Jiabao, who said the bad macroeconomic policies and unsustainable growth models of some countries "characterized by prolonged low savings and high consumption" were primary reasons for the crisis.

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[The Helper]

Macy's cuts 7,000 jobs, slashes dividend

NEW YORK (Reuters) - Macy's Inc said on Monday it would slash about 7,000 jobs and cut its quarterly dividend as it forecast earnings for fiscal 2009 that fell far below Wall Street expectations, sending its shares down 4 percent.

The department store operator said it took the steps to counter what it expects will be a very tough retail market this year, and that it would plan conservatively despite efforts by the U.S. government to build an economic stimulus package.

Macy's expects these initiatives, which also include integrating its divisions into one unit, to reduce its previously planned expenses by about $400 million per year starting in 2010, and $250 million in part of 2009.

"We just believe that this is a time when nothing should be considered a sacred cow," Chief Executive Terry Lundgren said in a conference call following the announcement.

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Morgan Stanley plans up to 4 percent in job cuts

NEW YORK (Reuters) - Morgan Stanley (MS.N) plans to cut about 3 percent to 4 percent of its work force, or up to 1,880 people, as it battles with spiraling costs and slowing business, according to a person familiar with the matter.

The cuts will mostly be in back-office jobs, which entail processing trades, since it trimmed front-office traders and bankers last year, the source said, adding that none of the cuts will come from the bank's network of financial advisers.

Morgan Stanley declined comment.

It had a total of 46,964 employees at the end of November, according to a filing with the U.S. Securities and Exchange Commission.

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GM to offer buyouts to all hourly employees

NEW YORK – General Motors Corp. will offer buyouts to all of its hourly employees, a spokesman confirmed Tuesday, as the troubled automaker continues to slash costs.

GM spokesman Tony Sapienza said the buyouts will mainly target GM's 22,000 retirement-eligible hourly employees, though any union employee can take the offer.

News of the buyouts first broke on Monday. A union official told The Associated Press then that GM would offer $20,000 in cash and a $25,000 car voucher for workers who retire early and those who simply leave the company. The official spoke on condition of anonymity because workers were not yet notified of the packages.

Sapienza confirmed that the offer will consist of a car voucher and a one-time cash payment, though declined to offer more details, saying that employees will be informed of the specifics of the offer on Friday. However, he said the latest offer would be less generous than previous buyouts.

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Record 19 Million U.S. Homes Stood Vacant in 2008

Feb. 3 (Bloomberg) -- A record 19 million U.S. homes stood empty at the end of 2008 and homeownership fell to an eight-year low as banks seized homes faster than they could sell them.

The number of vacant homes climbed 6.7 percent in the fourth quarter from the same period a year ago, the U.S. Census Bureau said in a report today. The share of empty homes that are for sale rose to 2.9 percent, the most in data that goes back to 1956. The homeownership rate fell to 67.5 percent, matching the rate in the first quarter of 2001.

The worst U.S. housing slump since the Great Depression is deepening as foreclosures drain value from neighboring homes and make it more likely owners will walk away from properties worth less than their mortgages. About a third of owners whose home values drop 20 percent or more below their loan principal will “hand the keys back to the bank,” said Norm Miller, director of real estate programs for the School of Business Administration at the University of San Diego.

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US car sales fall below China’s for first time

Annualised US car sales slipped below 10m last month – and were less than China’s for the first time – in spite of steep discounts offered by carmakers and government efforts to ease lending.

General Motors’ monthly sales of cars and light trucks fell by 49 per cent last month, Chrysler’s by 55 per cent and Ford Motor’s by 40 per cent, including vehicles made by Volvo, its Swedish premium brand.

“This is the first time in history that China has surpassed the US,” said Michael DiGiovanni, GM’s head of global sales and industry analysis.

GM estimated the overall annualised selling rate for cars at 9.8m in the US in January, compared with 10.3m in December, and less than China’s estimated selling rate of 10.7m last month.

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Wynn Resorts cuts salaries, work week to save cash

LAS VEGAS – Wynn Resorts Ltd. said Tuesday it is cutting wages for all salaried workers at its Wynn Las Vegas casino and reducing work weeks for full-time hourly employees in an effort to save about $75 million to $100 million a year.

As the economic downturn keeps would-be gamblers at home, casino operators have struggled to cut costs and shore up their cash positions. Wynn said the new initiatives also include eliminating 2009 bonus accruals and suspending its 401(k) matching contributions.

"We will make decisions that protect and preserve the stability of the employees and allow the company to optimize its performance," said Steven A. Wynn, chairman and chief executive, in a statement.

Wynn Resorts said its balance sheet remains strong, with more than $1 billion of cash on hand and only $375 million worth of debt due to be repaid over the next two years.

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Japan's Panasonic to cut 15,000 jobs, shut plants

TOKYO – Panasonic Corp. said Wednesday it will slash as many as 15,000 jobs and shut 27 plants worldwide, joining a slew of major Japanese companies announcing deep cuts as the global slowdown batters the world's second-largest economy.

The world's largest maker of plasma display TVs also announced a net loss for the October-December quarter and lowered its forecast for the fiscal year through March to a net loss of 380 billion yen ($4.2 billion), its first annual loss in six years.

Panasonic blamed the dismal results on the global slowdown set off by the U.S. financial crisis, the rapid surge of the yen and sudden price drops. Sales slid in a wide range of products, including flat-panel TVs, DVD recorders, microwaves, lamps and semiconductors, it said.

The Osaka-based manufacturer plans to cut the jobs — half of which will come in Japan — by the end of March 2010. They amount to about 5 percent of its 300,000-strong global work force.

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Time Warner swings to 4Q loss on hefty writedown

NEW YORK – Time Warner Inc. reported a fourth-quarter loss, hurt by a $24.2 billion writedown for its cable, publishing and AOL assets.

The New York-based media and entertainment company posted a loss of $16.03 billion, or $4.47 per share, compared with profit of $1.03 billion, or 28 cents per share, a year ago.

Quarterly results were dragged down $4.70 per share mostly due to the $24.2 billion writedown.

Time Warner had anticipated the writedown, predicting in January that it would record an operating loss for the fourth quarter and the full year.

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McDonald's To Open 175 New Stores In China

NEW YORK -- McDonald's China plans to set up 175 new outlets and create more than 10,000 jobs this year in China despite the global economic downturn, the state-run Xinhua news agency reported Wednesday. McDonald's has yet to confirm the addition of new stores, which Xinhua said was "the largest of its kind ever made by McDonald's across the world." The report didn't say where in China the new stores would be set up or offer further details. According to Agence France-Presse, Chinese state media previously reported that McDonald's planned to open 150 outlets in China in 2009.

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Moscow abandons bail-outs for bank aid

Russia signalled a change in its policies to fight the financial crisis on Wednesday, indicating that it would switch from bailing out individual companies to supporting the economy through the banking sector.

Moscow also plans huge budget cuts in an attempt to limit its fiscal deficit – rejecting pressure to follow the US and other western countries to try to stimulate the economy with a big boost in public borrowing.

The proposals suggest that Moscow is losing hope it can stave off the crisis with public spending and is instead battening down the hatches for what might be a prolonged recession.

The plans also indicate that the authorities are not giving in to public demands for a quick-fix response and are ready to resist pressure for money from cash-strapped oligarchs.

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US Treasury in plans for record debt sale

The US Treasury on Wednesday opened the floodgates of government bond issuance, revealing plans for a record debt sale in February and more frequent auctions in the months to come.

The announcement came amid growing fears about US government deficits and sent the yield on the benchmark 10-year Treasury note rising to 2.95 per cent, up from just over 2 per cent at the end of December.

The rise in Treasury yields has been pushing mortgage rates higher, complicating efforts to revive the economy. The US Federal Reserve said last week it was “prepared to” buy Treasuries if that would be a “particularly effective” way of reducing private borrowing costs.

“The Fed has to be troubled by the fact that mortgage rates have been rising and the buying of Treasuries by the Fed may come sooner than the market expects,” said William O’Donnell, UBS strategist.

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Anybody who buys these things are idiots. They will never see a dime back. It might keep the economy afloat for a little while but there is no WAY my kids are going to be able to pay back this debt. If we can't borrow it we are going to print it and that is even scarier.

 

[The Helper]

Retail sales lower, but Wal-Mart bucks trend

ATLANTA (Reuters) - Wal-Mart Stores Inc bucked a trend of lower January sales reported by many other U.S. retailers on Thursday, but said it would no longer issue monthly sales forecasts in a new sign of concern over the economy.

Wal-Mart's U.S. sales at stores open at least a year rose 2.1 percent, excluding gasoline -- better than Wall Street estimates of a 1.1 percent rise -- as shoppers stocked up on necessities. The company's shares rose 2.3 percent in trading before the market opened.

But the world's biggest retailer said it would no longer issue monthly sales forecasts because of volatile consumer trends and instead would give forecasts on a 13-week basis, four times a year.

With the January results, retailers were expected to post a 2.3 percent decline, representing their worst monthly same-store sales performance since Thomson Reuters began tracking the data in 2000. Excluding Wal-Mart, the drop was forecast to be 5.7 percent.

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