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Trading Now

Wednesday, February 3, 2010


Obama pushes plan to boost small-business lending
Repeating many themes from his State of the Union address, U.S. President Barack Obama said at a town hall meeting in Nashua, N.H., that he wants to take $30 billion of bailout money repaid by big banks and use it to make it easier for small businesses to borrow for expansion and hiring. "We're going to start where most new jobs do -- with small businesses," Obama said. The Union Leader (Manchester, N.H.) (03 Feb.)

U.S. Treasury considers changing mortgage-modification test
The U.S. Treasury Department is looking into altering its "net present value" test, which is used to determine whether modifying a mortgage or foreclosing on the property would be more beneficial to the lender and bond investors. "We're looking at the NPV model to see whether there should be some changes" that would result in more mortgage-principal write-downs, said Seth Wheeler of the Treasury. "While no decisions have been made, no changes are imminent, we're certainly taking a very, very serious look." Bloomberg (02 Feb.)

Downturn drives U.S. manufacturers to radical transformation
The recession persuaded U.S. manufacturers to reconsider their business and do their own restructuring. Among household names going in a different direction are Dow Chemical, Intel and Whirlpool. Dow hopes to unload about $2 billion in production facilities for basic chemicals and shift into specialty chemicals, which it sees as a better profit potential. "The chemical industry is leaving the United States, and it won't be back," said Peter Huntsman, CEO at chemical producer Huntsman. The Wall Street Journal (03 Feb.)

*Dodd and Lieberman, Democratic Traitors and perfect together. Don't be surprised if you hear Dodd come out as an independent in October.
Sen. Dodd says White House proposal complicates regulatory reform
U.S. Sen. Christopher Dodd, chairman of the Senate banking committee, said he is in favor of the idea of limiting proprietary trading and ownership of hedge funds and private-equity divisions by major banks. However, the late proposal complicates lawmakers' effort to reform the financial regulatory system, he said. Dodd also said the announcement from the Obama administration "seemed to many to be transparently political." The Wall Street Journal (03 Feb.)

Volcker defends proposed ban on proprietary trading
In testimony before the Senate banking committee, Paul Volcker, former chairman of the Federal Reserve, pushed a proposed ban on proprietary trading by major banks. "What I want to get out of the system is taxpayer support for speculative activity," Volcker said. "I don't want my taxpayer money going to support somebody's proprietary trading." Financial Times (tiered subscription model) (2/3)

BP reports 70% increase in underlying profit for Q4
BP said its underlying profit in the fourth quarter was up 70%, but its profit for all of 2009 was down 45% from an all-time high of $25.6 billion in 2008. The company expects oil and gas production to decline this year, largely because of a slow economic recovery in the U.S. and Europe. Financial Times (tiered subscription model) (02 Feb.)

Chain-store sales increase 0.4% last week from year-earlier period
Data from the the International Council of Shopping Centers and Goldman Sachs show that retail sales at chain stores last week increased 0.4% in the U.S. compared with the same period last year. Michael Niemira, ICSC's chief economist, predicted that sales increased about 1% in January. Reuters (02 Feb.)

Analysis: Bank of Japan is pressed by finance chief to fight deflation
With a legislative election coming up in July and the government needing an economic recovery, Naoto Kan, Japan's finance minister, is likely to step up his call for a fight against deflation, according to The Economist. Kan said the Bank of Japan should to take a much stronger role in preventing prices from falling. He is a long-standing critic of bureaucracy that is beyond the reach of accountability and is widely viewed as an advocate of an inflation target that could be used to measure whether the central bank is succeeding, The Economist notes. The Economist (28 Jan.)

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