Daily rumors covering the global markets. Subscribe to the update feed here.
AIG Faces Growing Wrath Over Payouts
Troubled insurer American International Group Inc. (NYSE:AIG), now 80% owned by U.S. taxpayers, spent the weekend deflecting mounting criticism of how government funds have been funneled to various banks and used to pay employee bonuses at the business unit that almost sank the company.
Wells Fargo Chief Assails TARP, Calls Stress Test ‘Asinine’
Wells Fargo & Co. (NYSE:WFC) Chairman Richard Kovacevich criticized the U.S. for retroactively adding curbs to the Troubled Asset Relief Program, which he said forced the bank to cut its dividend, and called the administration’s plan for stress-testing banks “asinine.”
HSBC CFO says it won’t need U.K. bailout
Banking major HSBC Holdings (NYSE:HBC) won’t require a U.K. government bailout even if economic conditions deteriorate further, its chief financial officer said, according to a newspaper report Monday. The U.K.- and Hong Kong-listed bank was also unlikely to go back to shareholders for more capital, after raising $17.7 billion earlier this month through a rights share holding, CFO Douglas Flint said, according to a report in the South China Morning Post.
U.S. Industrial Production Fell in February for Fourth Month
Output at factories, mines and utilities dropped 1.4 percent last month, more than forecast, after a revised decline of 1.9 in January, the Federal Reserve said today in Washington. The amount of factory capacity is use slumped to 70.9 percent, matching the lowest level on record.
Barclays in Talks to Sell iShares, Has ‘Strong Start’
Barclays Plc is in talks to sell its iShares exchange-traded funds unit as the U.K.’s third- biggest bank tries to bolster capital without turning over a stake to the government. Barclays rose as much as 23 percent after the London-based bank disclosed the negotiations and said it had a “strong start” to 2009. IShares may be valued at about 2 billion pounds ($2.84 billion) based on its earnings and similar recent deals, estimated Alex Potter, an analyst at Collins Stewart Plc.
OPEC Holds Oil Output Steady
The decision shows the high-wire act the Organization of Petroleum Exporting Countries is having to perform as it faces the worst world-wide economic crisis in its almost half century of existence. On one hand, crude stocks are still high, meaning prices could stay lower than OPEC likes for months to come. On the other, pushing the price of oil too high could entrench the downturn and hinder an economic recovery.
Citigroup Nominates Four Board Members as Part of Revamp
Citigroup Inc. (NYSE:C), whose biggest shareholders may soon be U.S. taxpayers, nominated four new board members in a government-induced shakeup after the Obama administration orchestrated the bank’s third rescue attempt in five months.
Discover unveils $1.2 billion Treasury investment
Discover Financial Services (NYSE:DFS) said late Friday that it got a $1.2 billion investment from the Treasury Department after the credit card issuer transformed itself into a bank-holding company to gain access to government support. Discover said it sold 1,224,558 shares of its preferred stock to the U.S. Treasury, along with a 10-year warrant to purchase 20,500,413 shares of its common stock at $8.96 each.
Will Cisco’s Project California Rock the IT Sector?
It’s been a long time since servers were a sexy topic in tech circles. These powerful computers that run corporate data networks make up a market that was red-hot in the 1990s and has since settled into a plodding shoving match amid IBM (NYSE:IBM), Hewlett-Packard (NYSE:HPQ), Dell (NASDAQ:DELL), and Sun Microsystems (NASDAQ:JAVA). But the computing industry is once again buzzing over servers—this time from a new entrant, Cisco Systems (NASDAQ:CSCO).
Foreign Demand for Long-Term U.S. Assets Declined in January
International demand for long-term U.S. financial assets fell in January, reflecting sales of corporate and government agency debt and China’s smallest net purchase since June. Total net sales of long-term equities, notes and bonds totaled $43 billion, compared with buying of $34.7 billion in December, the Treasury said today in Washington. Including short- term securities such as stock swaps, foreigners sold a net $148.9 billion, after net buying of $86.2 billion the prior month.
Euro back above $1.30 for first time in three weeks
The euro broke through the $1.30 level for the first time since February and the British pound rallied on Monday, as investors sought out riskier trades and global stocks continued to advance. The dollar index which measures the U.S. currency against a trade-weighted basket of six currencies, declined to 86.708 from 87.250.
