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Thursday, December 31, 2009


Most Asian markets close year with gains
Asian share markets mostly gained Thursday, although trading was thin and many markets were closed or ended trading early. Australia's S&P/ASX 200 climbed 0.8% to gain 31% during 2009, New Zealand's NZX 50 added 0.3% to rise 20% for the year and Singapore's Straits Times Index gained 0.6% to soar 64.5% during the year. Hong Kong's Hang Seng Index advanced 1.8% to close the year with a 52% gain, while Taiwan's Taiex added 0.9% and China's Shanghai Composite rose 0.5%. Markets in Japan, Thailand, the Philippines, Indonesia and South Korea were closed. The Wall Street Journal (31 Dec.)

U.S. to inject $3.8 billion into GMAC, become majority owner
The U.S. Treasury plans to inject an additional $3.8 billion into GMAC Financial Services, mostly to shore up its home-mortgage operations. The money will bring the government's investment to $17.2 billion, providing 56.3% ownership. GMAC said most of the latest injection will go toward its residential-mortgage business, including a restructuring of its money-losing ResCap unit. The Detroit News (30 Dec.)

Commission to tackle exploding U.S. debt gains support
U.S. lawmakers are warming to President Barack Obama's idea of creating a commission to deal with the ballooning national debt. The proposal got a boost last week when the Senate acted to raise the debt limit to a record $12.4 trillion. Government budget analysts said legislation to create a commission likely will be in Obama's next budget request or attached to the next bill to increase the debt limit. The Washington Post/The Fiscal Times (31 Dec.)

Wall Street gets through year of crisis, rally
This year has been a long, bumpy and winding road for U.S. equity markets. They took a severe hit from the financial crisis, then got back half of what they lost in the stock market rally that followed. As the year ends, the Standard & Poor's 500 sits almost 25% higher than where it was when 2009 began. As for the decade, the index is 23% lower than where it stood 10 years ago. The New York Times (30 Dec.)

Outlook remains uncertain for municipal bond insurance market
Heading into 2010, the outlook for the municipal bond insurance market remains uncertain. More than 57% of new issuance were insured bonds in 2005, but that figure is sharply lower this year, according to Thomson Reuters. Assured Guaranty, however, is still writing new insurance and is optimistic about the market's future. Meanwhile, other firms are striving to enter the market. The Bond Buyer (free content) (12/31)

Mortgage bonds expected to slump after record rally
As the Federal Reserve ends its unprecedented program of buying $1.25 trillion in mortgage bonds, the market is expected to slump and interest rates on new home loans likely will increase. However, William Cunningham, global head of credit strategies and fixed-income research at State Street's investment division, said the Fed's exit is not likely to drive mortgage rates up dramatically. Bloomberg (12/31)

NYC's Stuyvesant Town development is denied $1.5B in TALF funds
Stuyvesant Town/Peter Cooper Village in New York will not get $1.5 billion in TALF funding as Tishman Speyer and BlackRock, the beleaguered development's owners, had hoped. It was one of three requests turned down by the Federal Reserve Bank of New York, which approved 55 other applications. New York Post (12/26)

U.S. allowed to continue import duties on Chinese steel
The U.S. gained approval to continue imposing duties on some types of steel from China that received subsidies from the Chinese government. The U.S. International Trade Commission said steel imports from China have either harmed or threaten to harm the U.S. steel industry. U.S. companies and the United Steelworkers union said government-backed loans and discounts on raw materials gave Chinese steel producers an unfair advantage. Los Angeles Times/The Washington Post (31 Dec.)

Analysis: Women soon to become majority of U.S. workers
The economic empowerment of women might be the most important social change in modern history. Restricted only a generation ago to low-status and often menial jobs, women are heading some of the biggest and most powerful corporations in the world, including Areva in France and PepsiCo in the U.S. Participation of women in the workforce has been growing for some time, and a symbolic threshold is approaching. Early in 2010, the number of women employed in the U.S. is expected to exceed 50% of the workforce. The Economist (30 Dec.)

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