MORNING BRIEFS

Feldstein: Recession likely to linger into next year
There is a good chance the U.S. will need to implement a second economic stimulus as the recession persists beyond this year, said economist Martin Feldstein, a member of President Barack Obama's Economic Recovery Advisory Board. The Harvard University professor said he does not know when the recession will end, but "the forecasts that it'll end later this year, I think, are too optimistic." Reuters (24 Mar.)

Troubled-asset plan might force banks to take large write-downs
The U.S. Treasury's plan for removing troubled assets from the balance sheets of banks will likely force those institutions, including Bank of America, Citigroup and Wells Fargo, to take substantial write-downs, analysts and executives said. The losses might force the banks to raise additional capital from investors or taxpayers. "The unspoken fear here is that selling off loan portfolios would lead to more government capital injections into major banks," one bank executive said. Financial Times (24 Mar.)

Groups, financial firms seek more guidance on fair-value rules
Business trade groups and financial-service firms are asking for additional guidance regarding mark-to-market accounting standards, which have been blamed for substantial write-downs by banks. The Financial Accounting Standards Board issued a couple of proposals that offer more flexibility on the controversial rules, but the groups said more clarity is needed. Reuters (24 Mar.)

S&P downgrades Berkshire Hathaway's ratings outlook
Berkshire Hathaway's ratings outlook was lowered from stable to negative by Standard & Poor's. The rating agency attributed the change to a drop in capital for Berkshire's insurance operations that came as a result of the stock market's decline. The Wall Street Journal (24 Mar.)

Asian markets drop as investors assess U.S. bank plan
Investors took a closer look Wednesday at the U.S. Treasury's plan to deal with banks' troubled assets and whether the plan will help pull the economy out of recession. "The enthusiasm surrounding the U.S. administration's bank plans has been pared back slightly amidst some doubts about its effectiveness," wrote Mitul Kotecha, Calyon's global head of foreign-exchange strategy. Tokyo's Nikkei 225 dropped 0.7%, while the MSCI index of Asia-Pacific stocks outside Japan shed 0.4%. International Herald Tribune/Reuters (25 Mar.)