HEADLINE NEWS

S&P downgrades California's debt rating to A-minus
Standard & Poor's lowered its rating on California's $64 billion in general-obligation debt from A to A-minus and assigned it a "negative" outlook. The firm said it is worried that the state will run out of cash if California's "revenue and spending trajectories continue." Los Angeles Times (14 Jan.)

Obama's fee is expected to hit dozens of financial firms
Although President Barack Obama is set to announce today a fee levied on banks, some details about the charge have been revealed. Dozens of financial companies will be charged the fee to help recoup the cost of the Troubled Asset Relief Program. The Treasury now estimates the cost of TARP to be about $117 billion, an official said. "The tax will penalize the firms who repaid TARP with interest and those who never even accepted it to begin with," said Scott Talbott, senior vice president of government affairs at The Financial Services Roundtable. "It will decrease the availability of loans and limit economic recovery." Financial Times (tiered subscription model) (1/14)

Senate leaders strive to vote on Bernanke before his term ends
Senate leaders in the U.S. are trying to hold a confirmation vote before Federal Reserve Chairman Ben Bernanke's term ends Jan. 31. A delay in Bernanke's confirmation would probably lead to Vice Chairman Donald Kohn acting as chairman temporarily. "Bernanke is not the kind of person who would want to get into a legal battle over a few months, or maybe even a few weeks, awaiting Congress' decision," said Lyle Gramley, senior economic adviser to Soleil Securities and a former Fed governor. "He would be glad to defer to Don Kohn as acting chair for whatever period of time it took Congress to make up its mind." Bloomberg (14 Jan.)

Germany's 2009 data confirm worst recession since World War II
The German economy shrank 5% last year, the Federal Statistics Office said, significantly beating the 0.9% drop in 1975, the last time the country suffered a serious downturn after World War II. Last year's contraction was led by a 20% drop in business investment and a 14.7% decline in exports. The Times (London) (14 Jan.)

"Fragile" recovery appears in U.K. manufacturing
Industrial output in the U.K. increased 0.4% from October to November, indicating what analysts called a "fragile" recovery in manufacturing. The improvement was a 6% year-on-year decline, the best performance since September 2008, the Office for National Statistics said. Google/The Press Association (U.K.) (14 Jan.)

Beige Book shows jobless recovery is spreading across U.S.
Sluggish recovery is reaching more parts of the U.S. but not stimulating hiring, according to the Federal Reserve's Beige Book. The Fed said the job market is "soft" in most of report's 12 regions. In 10 of the districts, general economic conditions improved or activity increased, according to the report. Los Angeles Times (14 Jan.)

Almost 3 million U.S. homes received foreclosure notice in 2009
The number of U.S. homeowners behind on their mortgage payments reached an all-time high in 2009, with nearly 3 million households receiving at least one foreclosures notice, according to RealtyTrac. Nationwide, 2,824,674 properties, or one of every 45, were in default, a 21% increase compared with 2008. "As bad as the 2009 numbers are, they probably would have been worse if not for legislative and industry-related delays in processing delinquent loans," RealtyTrac CEO James Saccacio said. Reuters (14 Jan.)