Consumer Confidence Hits All-Time Low

Despite expectations that consumer confidence is improving, confidence fell to a new low in December.

The Conference Board, a New York research firm, said consumer confidence for December was 38.0, compared with a revised reading of 44.7 in November. Economists surveyed by Dow Jones had expected consumer confidence to come in at 45.8 in December. The index is close to levels seen in the months following the 1990-1991 recession.

“The further erosion of the Consumer Confidence Index reflects the rapid and steep deterioration of economic conditions that occurred in the fourth quarter of 2008,” said Lynn Franco, director of the Conference Board Consumer Research Center, in a press release. “Declines in the Expectations Index appear to be moderating, but this index continues to hover at historical lows.”

Consumer expectations for the economy in the next six months also decreased in December to 43.8 from 46.2 in November.

“The overall economic outlook remains quite dismal for the first half of 2009, and only a modest recovery is expected in the second half, " said Franco.

In December, those claiming business conditions are "bad" increased to 46% from 40.6%, while those claiming business conditions are "good" declined to 7.7% from 10.1% in November. Consumers' assessment of the labor market was alsomore negative than in November. Those saying jobs are "hard to get" rose to 42% from 37.1% in November, while those claiming jobs are "plentiful" decreased to 6.2% percent from 8.7%.

Mounting layoffs in an already uncertain job market have continued to be at the forefront of consumers worries in recent months. In November, employers eliminated 533,000 jobs -- the most in 34 years -- according to data issued by the Labor Department earlier this month.

“What was particularly weak was the labor market sub component,” said Douglas Smith, chief economist for the Americas at Standard Chartered Bank. “Jobs are what’s weighing on everybody’s minds.”

Smith said people are worried about their jobs and their retirement portfolios, which is weakening confidence even with gas prices seeing a precipitous drop. “Gas prices usually boost confidence. This time around it simply shows how bad things must be.”

Smith said it hard to say if confidence will strengthen in the New Year, saying it depends on what happens on the job front.

The monthly Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. Despite the results of the survey the Dow Jones Industrial Average was recently trading up 25.01 to 8508.94.


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Dow Chemical Can Only Claim Kuwait Damages in Court - Source

KUWAIT--Dow Chemical (DOW) could in theory pocket hefty compensation for a scrapped joint venture in Kuwait, but the U.S. group would first have to prove in court that the Gulf state broke contract terms, oil sector sources said.

The OPEC member cancelled the $17.4 billion petrochemical venture with Dow on Sunday, less than a month after it signed
the deal. State-run Petrochemical Industries Co was to have paid Dow $7.5 billion for its stake in the project.

To claim a break-up fee, "Dow would have to prove in court that it had been damaged, and Kuwait's compensation would be
limited in that case to a maximum of $2.5 billion," a Kuwaiti oil official told Reuters on condition of anonymity.

Another oil official with knowledge of the deal confirmed this, adding that it was unclear whether Dow would take any
legal action against the world's seventh-largest oil exporter.

"The $2.5 billion is a cap for compensation in case Dow starts legal action and wins a court ruling proving we violated
the agreement, only then," the official said.

One of the officials said Dow and Kuwait were in dispute over whether the Gulf Arab state had been entitled to cancel the
deal shortly before its original start of January 1.

But analysts said they thought it was unlikely the company would chase a claim from Kuwait because it wanted to maintain
friendly business relations with Gulf states in what remains one of the world's fastest-growing regions.

Shares in Dow Chemical, which was not immediately available for comment, fell 19 percent on Monday as analysts said the
scrapping of the deal could endanger the company's planned $15.3 billion acquisition of specialty chemical manufacturer Rohm & Haas (ROH). However, the stock recouped 3 percent in premarket trade on Tuesday after the Financial Times quoted unnamed sources as saying Dow would still be able to tap a $13 billion bridge loan to pay for the takeover despite the loss of revenue from Kuwait.

The Gulf Arab state said it cancelled the project, which had met opposition in parliament, because the worsening of the
financial crisis made it no longer viable.

Dow said on Sunday it was "in the process of evaluating its options pursuant to the joint venture formation agreement." It
did not elaborate.

Analysts said Dow was under pressure to renegotiate the price of the Rohm deal -- which itself carries a termination fee
of $750 million -- to reflect the recent drop in the target company's share price. Both Dow and Rohm declined to comment.



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Rohm & Haas Says Dow Chemical Deal Still in Effect

PHILADELPHIA--Rohm & Haas Co. said its proposed acquisition is still in effect even though the Kuwaiti government has canceled a $17.4 billion joint venture with U.S. petrochemical company Dow Chemical Co.

On Sunday the Kuwait government said the joint venture, known as K-Dow Petrochemicals, was "very risky" due to the global financial crisis and low oil prices. The move came just days before the joint venture's Jan. 1, 2009 startup date.
Dow Chemical is also targeted to close on its $15.3 billion buyout of specialty chemicals maker Rohm & Haas early next year. Rohm & Haas shareholders approved the transaction on Oct. 29.

Late Sunday Rohm & Haas said the K-Dow joint venture is not a closing condition of its proposed acquisition by Dow Chemical.

Meanwhile, Dow Chemical said it was "extremely disappointed" with the Kuwaiti government's decision and was evaluating its options under the joint-venture agreement.

Dow, one of the world's largest chemical companies, and Kuwait's Petrochemical Industries Co., a subsidiary of the Kuwait Petroleum Corp., had hoped the joint venture would help them snag a larger share of the global chemicals market and boost profitability.

The project, in which Kuwait was to hold a $7.5 billion stake, had been criticized in the country as a waste of public funds, and lawmakers threatened to question the prime minister in parliament if it was launched.

But trouble for the joint venture mounted with a sharp drop in crude oil prices -- from mid-July highs of nearly $150 per barrel to under $40 currently. The declining oil prices have hit Kuwait and its oil-rich Gulf Arab neighbors hard. The Kuwaiti stock exchange has fallen by about 35 percent since the beginning of the year, and some investors have criticized the government for what they said was a lack of action to stave off the impact of the global meltdown.

Dow has also faced difficulties, announcing earlier this month that it was cutting about 11 percent of its work force, closing 20 plants and selling off several businesses to cut costs amid the financial downturn.

Insurers' Natural Disaster Losses Rise by 50% in 2008

BERLIN--Insurers' losses from natural disasters rose by about 50 percent in 2008, with Caribbean hurricanes Ike and Gustav powering the increase and climate change increasingly a factor, a leading reinsurer said Monday.

Munich Re AG said in an annual review that insured losses came in at $45 billion this year, up from nearly $30 billion in 2007. It said total economic losses, including losses not covered by insurance, leapt to some $200 billion from last year's $82 billion.
That increase was due in part to the devastating earthquake which hit China's Sichuan province in May. Munich Re said the quake caused overall losses of $85 billion -- by far the year's biggest -- but insured losses of only $300 million.

Munich Re said the year was marked by high losses from weather-related natural disasters, continuing a long-term trend.
"Climate change has already started and is very probably contributing to increasingly frequent weather extremes and ensuing natural catastrophes," board member Torsten Jeworrek said in a statement.

"These, in turn, generate greater and greater losses because the concentration of values in exposed areas, like regions on the coast, is also increasing further throughout the world."

The company noted that six named storms -- Dolly, Edouard, Fay, Gustav, Hanna and Ike -- reached the U.S. coast this year after two years in which the American mainland was largely spared.

The year's most expensive event for insurers was Hurricane Ike, which hit the Caribbean and the southern United States in September, causing insured losses of $15 billion. In second place was Gustav, which hit shortly before and caused losses of $5 billion.

In both cases, the overall losses were about twice the insured losses.

Munich Re said an unusually severe snow- and ice-laden cold spell in China in January and February, which badly hit roads, railways and electricity supplies, cost insurers $1.6 billion -- well short of the overall economic losses, which it estimated at $21.1 billion.
A winter storm that hit central Europe in early March cost insurers some $1.5 billion.

Munich Re said an unusually severe U.S. tornado season, with a total of 1,700 tornadoes, also proved costly. A series of tornadoes that killed 12 people in late May generated insured losses of more than $1.3 billion.

The year's deadliest disaster was Cyclone Nargis, which devastated coastal areas in Myanmar in early May, killing nearly 85,000 people. Munich Re put overall economic losses at $4 billion, but gave no figure for insured losses in the isolated country.

While they rose sharply for the second consecutive year, this year's insured losses were still well short of the $99 billion Munich Re recorded in 2005 -- when losses were swollen by claims from Hurricane Katrina in New Orleans.

The company said that year also saw a record overall economic loss of some $232 billion, adjusted for inflation.
Munich Re, a reinsurer, offers backup policies to companies writing primary insurance policies. Reinsurance helps spread risk so that the system can handle large losses from natural disasters.


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Madoff investor commits suicide

Brother: Madoff Suicide Investor Lost His Own Money

PARIS--The French financier who killed himself after losing more than $1 billion of his clients' investments to Bernard Madoff's alleged fraud also saw his own family's money disappear, his older brother told The Associated Press on Friday.

Rene-Thierry Magon de la Villehuchet and his business partner Patrick Littaye were "totally ruined," Bertrand Magon de la Villehuchet said in a telephone interview from his home on Paris' chic Place des Vosges.

Bertrand, 74, said his brother had "invested his own fortune" with Madoff -- up to several tens of millions of dollars -- along with money from friends and family.

Rene-Thierry, 65, was found dead at his desk in the New York office of Access International Advisors on Tuesday, both of his wrists slashed. A box cutter and a bottle of sleeping pills lay nearby. Police say it was a suicide.

Rene-Thierry had begun investing with Madoff three or four years ago and had a total of $1.4 billion invested with him when the scandal came crashing down, according to his brother.

"At first he thought he'd be able to get the money back. He was very determined. Gradually he realized he wouldn't be able to," Bertrand said.

"He trusted Madoff completely," he said.

Madoff, 70, was arrested Dec. 11 and allegedly told FBI agents he had masterminded a $50 billion Ponzi scheme that ensnared investors far and wide, from retirees to charities to the International Olympic Committee.

Madoff, a former chairman of the Nasdaq stock market, has since become one of the most vilified people in America.

Rene-Thierry's fund was among the biggest losers in the scheme, and one of a handful to get taken for more than $1 billion.

Famous names reported to have lost their investment with him include L'Oreal cosmetic empire heiress Lilliane Bettencourt, listed by Forbes as the world's richest woman. Bertrand declined to identify any of his brother's investors outside the family.

Bertrand said he spoke with his brother almost every day. "My brother was a man of simple tastes," he said. "He was a very modest man.

"A lot is being said about him, like that he flew in by helicopter to his chateau -- that's not true," Bertrand added.

Bertrand said he'll be joining class action lawsuits against Madoff and the Securities and Exchange Commission.

Rene-Thierry raised the money he placed with Madoff from friends and family. Bertrand said he lost 20 percent of his own savings in the scam.

Contrary to what some analysts say now, Bertrand said the returns on his investment with Madoff weren't too good to be true.

"Over four years my gain was 17 percent -- that's not crazy," he said.

The Magon de la Villehuchet family built its fortune in shipping during the 17th century according to Georges le Gorgeu, a historian in Plouer-sur-Rance, where the clan has owned a chateau for several hundred years.

The family was so rich and prominent that it loaned money to France's Sun King, Louis XIV, who ennobled them, le Gorgeu said. Many of Rene-Thierry's and Bertrand's aristocratic ancestors died on the guillotine during the French revolution, le Gorgeu said.

Rene-Thierry, who had married and had one sister, spent every August at the chateau, his brother said. In recent years he'd invested a considerable sum to renovate the chateau and protect its archives, which date back to 1200, le Gorgeu said.


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Amazon: 2008 Holiday Season Was 'Best Ever'

SEATTLE--Amazon.com Inc. (AMZN)said Friday that the 2008 holiday season was the online retailer's "best ever," with more than 6.3 million items ordered and 5.6 million units shipped during its peak day on Dec. 15.

Amazon's upbeat take on the holiday season bucked the drumbeat of generally dismal news from retailers. Holiday sales typically account for 30% to 50% of a retailer's annual total, but rising unemployment, home foreclosures, the stock market decline and other economic worries led many shoppers to slash their shopping budgets this year.

SpendingPulse -- a division of MasterCard Advisors that tracks total sales paid for by credit card, checks and cash -- said its preliminary data indicates that retail sales dropped between 5.5% and 8% this holiday season compared with last year. SpendingPulse said the decline was slightly less steep -- between 2% and 4% -- when auto and gas sales were excluded.

Earlier this month, Barclays Capital analyst Douglas Anmuth said Amazon's competitive position has actually strengthened during the downturn, as some brick-and-mortar retailers were forced to close stores and had difficulty obtaining inventory.
Based on the number of items ordered, Amazon said its holiday bestsellers included the Nintendo Wii, Samsung's 52-inch LCD HDTV, the Apple iPod touch and the Blokus board game.

In premarket trading, Amazon's shares jumped $2.85, or 5.5%, to $54.29 Friday morning.


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Oil Surges, Breaking 9-Day Lose Streak

Oil prices soared more than 6% on Friday after the United Arab Emirates joined Saudi Arabia in intensifying production cuts in line with OPEC’s announcement last week.

Light, sweet crude for February delivery jumped $2.36 to settle at $37.71 a barrel in electronic trading on the New York Mercantile Exchange as of 1:07 p.m. ET. On Wednesday, weak economic data helped push the contract down for the ninth straight day, with oil losing $3.63 to settle at $35.35. Trading was closed Thursday for the Christmas holiday.

The decision by the Organization of Petroleum Exporting Countries last week to slash daily output by a record 2.2 million barrels appears to be the first of a number of recent output cuts to halt oil’s downward spiral. The fact that two key OPEC members -- Saudi Arabia and the UAE -- seem to be abiding by the decision is important.

“It’s what they’re supposed to be doing, and signs are there that they’re going ahead with that,” said Tom Bentz, director and senior energy analyst at BNP Paribas Commodity Futures.

Another factor weighing on oil futures is the dense fog that prevented a number of ships from entering or exiting the Houston Ship Channel. As many as 40 ships have been affected by the fog, the U.S. Coast Guard told Reuters.

In other energy-related news, China National Offshore Oil Corp. and Taiwan’s CPC Corp. signed four oil cooperation agreements, according to the Xinhua News Agency.

The agreements included a modified contract on joint exploration and a transfer of a 30% stake of CNOOC's onshore Block 9 in Kenya to CPC, according to the report.


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FOXBusiness.com's Week in Review: Dec. 22-26, 2008

Monday, Dec. 22, 2008

This was another week of Madoff madness -- the affair revolving around money manager Bernard Madoff, who allegedly lost investors around $50 billion -- and it started off with more names on the list of victims of the scam. Tremont Holdings, owned jointly by Oppenheimer Funds and Massachusetts Mutual Life Insurance, revealed exposure, as did Access International Advisors and Ascot Partners.

FOX Business had an exclusive interviewwith the president of the United Auto Workers union, Ron Gettelfinger. He complained that workers were being unfairly singled out in the deal that was worked out between the Bush Administration and Chrysler and General Motors (GM) to supply the auto makers with life-saving loans. The UAW said it would try to renegotiate under Obama next year. Workers, under this deal, would face pay cuts to put their wages more on par with those working at foreign competitors’ factories in the U.S.

However, one of those competitors, Toyota (TM), is having trouble of its own. For the first time ever the vehicle manufacturer is projecting an operating loss for the fiscal year. With global demand down and a jump in the value of the Japanese yen, Toyota is forecasting a $1.66 billion loss.

Not wanting to miss out on all the bailout action, the commercial real estate industry is now looking for a handout, according to a Wall Street Journal report. Thousands of commercial properties are at risk of foreclosure right now and developers are looking for their own government bailout.

UAW's Gettelfinger: Others Must Step in


FOXBusiness.com’s Week in Review: Dec. 15-19, 2008
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UAW agrees to make sacrifices

Let in 'The Holiday' Magic

For those whose current financial situation makes even watching It’s a Wonderful Life and its depleted bank story a bit tough this year, I have a suggestion for light entertainment that is surprisingly rife with life lessons. It’s a movie called The Holiday that was written by Nancy Meyers and was released in 2006.

I’m not sure if it was the life coach, the writer or the optimist in me that liked it best, but the story and its undercurrent spoke to me so. It is truth-filled fiction and it takes place at this time of year, which is always so loaded with joy, sadness, promise, introspection and, if we let it in, even a touch of magic.

The story is about two women who have never met, Amanda (played by Cameron Diaz) and Iris (Kate Winslet), who switch homes for two weeks in December. Both are seeking escape from a broken relationship and so Amanda goes to the snowy English countryside and Iris finds herself in Amanda’s spacious home in sunny California.

Therein lies the first lesson – Sometimes there is nothing like a change of scenery to change your perspective. Yes, sometimes escapism is good.

As the movie progresses, Amanda meets Graham (played by Jude Law) and there comes a point where she has to make a decision about seeing him again. It sets up one of those moments in life where you can either take a chance or let an opportunity go. That’s lesson no. 2 – Take a chance on something risky because it just might go your way.

Meanwhile, in Los Angeles, Iris reaches out to an elderly neighbor and an enriching friendship develops. This third one’s a no-brainer, but sometimes we need reminding – Go out of your way to be kind, just because.

Simultaneously, Iris meets Miles (Jack Black) and thanks to the influence of the aforementioned neighbor, begins to establish a sweet rapport with him. Separately, but yet somehow together, they do what so many of us need to learn to do in this fourth lesson – Let go of unhealthy relationships, regardless of how difficult. To do this effectively, Iris learned a powerful bonus lesson – Cultivate gumption and it will take you far.

Back in snowy England, Amanda makes a sweeping assumption about Graham’s life based on a few circumstantial facts. She turns out to be wrong. So I reiterate what my college journalism professor said many times in lesson No. 6 – Don’t assume. It makes an ass of ‘u’ and ‘me.’

For all four main characters, there is a journey of self-awareness happening as the story unfolds. Each is expressed in very different ways. For example, Amanda hears a “this is your life” deep male voice set to music that frustrates her and prompts her into action. Lesson No. 7? Be self-aware and your life will be markedly more vivid and meaningful.

Despite all the logic and joy and pain that bring the film to its neat ending, there is that sense that the viewer has witnessed a miracle. That’s why the eighth lesson is simply this – Embrace magic.

I share all of this with some measure of humility, as my mother had been trying to get me to watch The Holiday for months before I finally relented. She compares Jude Law’s performance to a mischievous Steve McQueen. Since watching it, I’ve been surprised to hear the reactions of friends when I ask about it.

“Was Jude Law mesmerizing in that or what?” one friend asked, wide-eyed and smiling.

Yes, indeed.

This is a wonderful movie any time, but this particular year, in this particular season, it feels like an especially welcome antidote. Perhaps there’s one more lesson:

Watch what makes you feel fantastic, even for a few hours.

Nancy Colasurdo is a practicing life coach and freelance writer. Her Web site is www.nancola.com. Please direct all questions/comments to FOXGamePlan@gmail.com.


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Retailers Slash Prices in Last Effort to Boost Sales

NEW YORK--Bargain-hunters hit the stores early Friday to take advantage of drastic price cuts offered by retailers desperate to get rid of old merchandise and boost their less-than-cheery holiday sales.

Many retailers opened before 6 a.m., offering deals like 50% to 75% off on toys, furniture, electronics and clothing. J.C. Penney Co. Inc. (JCP)opened at 5:30 a.m. -- the earliest post-Christmas opening in the chain's history -- and offered customers more than 100 "doorbusters" until 1 p.m, including 75% off Christmas decorations. The chain even made wake-up calls to customers who signed up online.

Shoppers arrived at 6 a.m. the day after Christmas at Macy's Inc.'s (M)flagship store in Manhattan to take advantage of deeply discounted merchandise.

Lisa Gillespie, 42, was meeting her niece to buy her a Christmas present.

"She's 16 and I have no idea what she wants for Christmas," said Gillespie, who arrived early before the merchandise was picked over. She was looking in a bin full of purses marked 65 percent off and found one for $20.

"Even if I don't end up liking it, I can always bring it back," the Manhattan resident said. "These are crazy deals. I have eight coupons. We won't overshop, but we will shop."

Stores were hoping the discounts would entice shoppers to redeem gift cards and use cash from returning unwanted gifts to buy something new.

But with gift card sales down this holiday season and consumers looking to save money rather than spend it, even the big discounts may not be enough to save what looks to be one of the most dismal holiday shopping seasons in years.

Holiday sales typically account for 30% to 50% of a retailer's annual total. But shoppers cut back their spending this year as they struggled with job cuts, home foreclosures, portfolio losses and other economic woes. Strong winter storms during the holiday season also kept some would-be shoppers at home.

According to preliminary data from SpendingPulse -- a division of MasterCard Advisors that tracks total sales paid for by credit card, checks and cash -- retail sales fell between 5.5 percent and 8 percent during the holiday season compared with last year. Excluding auto and gas sales, retail sales fell between 2 percent and 4 percent, according to SpendingPulse.

A better indicator of how retailers fared will arrive Jan. 8, when major stores report same-store sales, or sales at locations open at least a year, for December.

Analysts have kept slashing their holiday estimates. Michael P. Niemira, chief economist at the International Council of Shopping Centers, expects that sales at established stores for November and December will fall 1.5 percent to 2 percent -- which would make it the weakest holiday season since at least 1969, when the index began.

With sales looking slim, retailers are hoping the day after Christmas this year will be reminiscent of another big shopping day.

"It has a Black Friday feel to it," said Tom Aiello, a spokesman for Sears (SHLD)and Kmart, likening the post-Christmas promotions to those found the day after Thanksgiving when retailers historically began to turn a profit for the year.

Sears stores were opening several hours early at 7 a.m. and offering doorbuster deals through noon, such as 60 percent off fleece or knit tops and 65% off all women's boots.

Kmart is cutting in half prices on necessities, such as fall and winter clothes for the family, and offering deals on seasonal decor.

Toys R Us said it is cutting prices by 60% on some brands the day after Christmas. And kids who didn't get the Hannah Montana doll they wanted may be able to find it for half off.

Other retailers such as Target (TGT) are pushing online deals, rather than in-store promotions, more heavily in the post-holiday period. Target said it is putting thousands of items on clearance and making them eligible for free shipping the day after Christmas.

Others, like Wal-Mart Stores (WMT), are waiting until the weekend to make markdowns on items such as televisions, office and home goods but say they will continue in-store promotions of the week.

Several retailers said they will continue or add new promotions in January, as experts predict the recession will carry into 2009.


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Initial Jobless Claims Soar to 26-Year High

WASHINGTON--New claims for unemployment benefits rose more than expected last week, the government said Wednesday, as layoffs spread throughout the economy, more evidence the labor market is weakening as the recession deepens.

The Labor Department reported that initial requests for jobless benefits rose to a seasonally adjusted 586,000 in the week ending Dec. 20, from an upwardly revised figure of 556,000 the previous week. That's much more than the 560,000 economists had expected.

That's also the highest level of claims since November 1982, though the work force has grown by about half since then.

A Labor Department analyst said auto-related layoffs were a factor in the increase.

The four-week average of initial claims, which smooths out fluctuations, increased to 558,000. That's the highest since December 1982, when the economy was emerging from a steep recession.

There was some improvement in the number of Americans continuing to seek unemployment benefits, which dropped slightly to 4.37 million from 4.39 million the previous week. Wall Street economists had expected the number to increase to 4.4 million.

Economists consider jobless claims a timely, if volatile, indicator of the health of the labor markets and broader economy. A year ago, initial claims stood at 353,000.

The elevated level of new jobless applications is just one of several signs that the labor market has deteriorated rapidly in recent months.

The Labor Department said earlier this month that employers cut a net total of 533,000 jobs in November, sending the unemployment rate to 6.7 percent, the highest in 15 years.

Mass layoffs are taking place in a wide range of industries. Industrial conglomerate Textron Inc. on Tuesday said it has cut 2,200 jobs, while technology services provider Unisys Corp. said Monday it will eliminate 1,300 jobs. Sovereign Bancorp Inc.'s bank unit said last week it is laying off 1,000 employees.


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Unisys to Cut 1,300 Jobs, Consolidate Plants

BLUE BELL, Pa.--Unisys Corp. said it will slash 1,300 jobs globally as part of an effort to cut costs by more than $225 million a year.

The technology services provider has struggled as demand for its services has waned due to tightening credit and curbed customer spending. In November Standard and Poor's said it was taking the company off its S&P 500 index.

Unisys said late Monday that the job cuts would continue into next year.

Aside from the work force reduction, Unisys said it was taking several other steps to lower its selling, general and administrative expenses and labor costs including consolidating plants, freezing most 2009 salary increases and suspending 401(k) matches, which totaled approximately $50 million a year.

Unisys anticipates the actions will lead to a fourth-quarter charge of $80 million to $85 million


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A Little Merry Christmas for Wall Street

It wasn't a "Santa Claus rally," but after five-straight sessions of losses, stocks found a little holiday cheer this Christmas Eve after a durable goods report -- a key sign of economic activity -- came in better than Wall Street's expectations.

Today's Markets

At the 1 p.m. preliminary close in New York, the Dow Jones Industrial Average gained 48.99 points, or 0.58%, to 8468.48, the S&P 500 gained 4.99 points, or 0.58%, to 868.15 and the Nasdaq Composite gained 3.36 points, or 0.22%, to 1524.90. The consumer-friendly FOX 50 rose 3.34 points, or 0.50%, to 669.49.

Of the 30 members of the Dow, the biggest sector to gain today were the financials led by Citigroup (C), Bank of America (BAC) and JPMorgan Chase (JPM). General Motors (GM) also rose more than 8% in trading.

Volume this Wednesday was very light, with a little less than 400 million shares traded during the shortened trading session. On normal trading days, an average of 1.4 billion shares are traded.

The New York Stock Exchange and Nasdaq closed early at 1 p.m. ET today. Trading will be closed on Christmas and will resume on Friday.

In the commodities markets, oil was lower by $1.26 to $37.73 a barrel. Gold gained by $11.20 to $849.30 a troy ounce.

While there was little in way of company-specific news, investors had a series of economic reports that showed some minor positive signs for the economy.

The U.S. Commerce Department said durable good orders, which are orders for expensive items meant to last more than three years, fell by 1% in November. That was much better than the decline of 3.1% expected by economists, according to Thomson Reuters.

However, orders for non-defense capital goods excluding aircraft, which are orders for business equipment and considered a good metric of the business economy, rose by 4.7% last month. Business equipment spending fell by 6.6% in October.

The labor market continued to show weakness, however. Initial jobless claims, which are people filing for unemployment benefits, rose by 30,000 to 586,000 for the week ending Dec. 20. Economists expected that initial jobless claims would rise by 4,000.

Continuing claims, which are people on unemployment benefits for more than one week, fell by 17,000 to 4.37 million people.

Company News

The Chicago Mercantile Exchange's (CME) Globex electronic trading platform was halted Wednesday morning, causing futures to partially freeze up for some time. The CMEGroup said a technical failure caused trading to stop, and they were investigating.

BlackBerry manufacturer Research in Motion (RIMM) filed a lawsuit against Motorola (MOT) on Wednesday, claiming that Motorola was blocking former employees from coming to work for RIMM. The companies had an agreement not to solicit each other's employees, but that agreement expired in August.

The New York Times Company (NYT) said advertising revenue dropped by 20.9% in November compared from a year ago.

Dow member Verizon Communications (VZ) said it won a $33.2 million lawsuit related to cybersquatting. The company sued OnlineNIC saying it "unlawfully registered at least 663 domain names that were either identical to or confusingly similar to Verizon trademarks." Verizon was awarded $50,000 per name.

Data Dump

The Commerce Department said consumer spending fell by 0.6% last month -- less than the 0.7% drop that economists had expected. Incomes fell by a worse-than-expected 0.2%.


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NYU Sues Merkin in Madoff Fallout

New York University has filed suit against financier J. Ezra Merkin for allegedly turning over his investment responsibilities to accused Ponzi-scheme mastermind Bernard Madoff and losing more than $24 million of the school’s money.

Named in the suit are Merkin and his Gabriel Capital LP fund and Ariel Fund Ltd.

Gabriel Capital is a $1.5 billion hedge fund that has already announced plans to liquidate due to losses related to the alleged Madoff scheme. In a letter to investors, Merkin said the fund lost 39% of its value this year through Nov. 30.

NYU had about $94 million invested in Ariel, which operated as a limited partnership with Merkin and Fortis Bank. Ariel and Fortis are also named as defendants.

“Without making disclosures in the quarterly reports to investors, and in the face of an extraordinary number of ‘red flags,’ Merkin, for years, simply turned over a substantial portion of Ariel’s funds to Madoff for management,” NYU alleged in the complaint filed yesterday in New York state court in Manhattan.

Before his arrest on Dec. 11, Madoff allegedly confessed to his sons that his investment firm was “a giant Ponzi scheme” and may have incurred losses of $50 billion, according to an FBI complaint.

He was released on $10 million bail after being charged and is currently on house arrest in his apartment on the Upper East Side of Manhattan.

Merkin’s lawyer Andrew Levander didn’t immediately return a call to FOX Business Network seeking comment. Madoff has been charged by federal prosecutors with one count of securities fraud and faces as much as 10 years in prison if convicted.

Merkin is chairman of GMAC LLC, the finance arm of General Motors Corp. (GM)that is 51% owned by Cerberus Capital Management LLC.


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Madoff investor commits suicide
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Five in the Red: Dow Loses 100 Points

In the final full trading day before Christmas, the Dow ended in negative territory on Tuesday, extending its losing streak to five amid the latest bearish economic and corporate news.

Today's Markets

The Dow Jones Industrial Average lost 100.28 points, or 1.18%, to 8419.49, the S&P 500 fell 8.48 points, or 0.97%, to 863.15 and the Nasdaq Composite slid 10.81 points, or 0.71%, to 1521.54. The consumer-friendly FOX 50 ended down 4.55 points, or 0.68%, to 666.15.

The markets were unable on Tuesday to shrug off the latest disappointing headlines as casino operator Las Vegas Sands (LVS) and corporate jet manufacturer Textron (TXT) released new job cuts and the government said new home sales slumped to 1991 levels in November and the economy shrank by 0.5% in the third quarter.

“We need something fundamentally to change in the economy to change the [market's selling] dynamic," NYSE trader Ted Weisberg told FOXBusiness.

While the markets have suffered another string of losses, they have come on relatively low volume ahead of the holidays, indicating a lack of conviction. The recent losses have also come without the panic-selling that became a staple of recent months as the Dow seemed to routinely lose more than hundreds of points per day. In contrast, the index is off by roughly 500 points over the past week, giving back much of its recent gains.

"It looked like the market was getting some leg up until the last few trading days but we just seem to be sliding backwards now," said Weisberg. “There’s always hope, but the fact is that I think we are going to limp until the end of the year.”

For the second day in a row, General Motors (GM) led the way down on the Dow, sliding further on concerns about the company's equity. Also, Bank of America (BAC) and Citigroup (C) fell sharply. On the upside, aluminum titan Alcoa (AA)and General Electric (GE) ended modestly higher.

The Nasdaq Composite closed with more modest losses. Shares of online auction site eBay (EBAY) and memory card makerSanDisk (SNDK) tumbled, offsetting gains from Google (GOOG) and search company Baidu.com (BIDU).

On the energy front, crude oil futures ended in the red for the eighth consecutive day as demand fears continue to decimate the commodity. The price of a barrel of crude closed down 93 cents, or 2.33%, to $38.98. The commodity has lost more than one-quarter of its value in December and is off by roughly 75% since hitting $145 a barrel in early July.

Gloomy Data Weigh on Markets

While the markets manage to avoid a selloff on the latest bleak economic figures, the new reports underscored the deteriorating economy.

At the forefront, the Commerce Department confirmed the nation's gross domestic product declined by 0.5% in the third quarter, a reading that economists had expected. The final third-quarter GDP reading comes as the U.S. is mired in what is already the longest recession in a quarter century. Still, some economists worry GDP may plunge by as much as 6% in the current quarter as the economy deteriorated further.

On the housing front, the National Association of Realtors said sales of existing home sales declined by a worse-than-expected 8.6% in November to a rate of 4.49 million units. Similarly, the Commerce Department said sales of new homes tumbled by 2.9% last month to a rate of 415,000 units -- the slowest pace in almost 18 years.

Despite all of that negative economic news, the University of Michigan/Reuters consumer sentiment index unexpectedly improved to 60.1 in December, well above the 56.0 reading economists forecasted.

Corporate Movers

Toyota (TM) President Katsuaki Wantanabe is expected to resign next year in a move tied to health problems of the auto maker's chairman, Fujio Cho, The Wall Street Journal reported. Wantanabe's expected resignation isn't related to a need for a change in strategic direction at the struggling auto giant, the newspaper reported.

American Express(AXP) received preliminary approval from the government to get an injection of $3.39 billion. AmEx, which became a bank holding company last month to gain access to the $700 billion rescue funds, will give the government preferred stock and warrants in exchange for the injection.

CIT Group (CIT) received a green light from the Treasury Department for a $2.33 billion investment. The injection comes a day after the Fed allowed the commercial finance company to transform into a bank holding company.

Circuit City (CC), the electronics retailer that filed for Chapter 11 bankruptcy protection last month, reportedly won approval from a bankruptcy court for $1.1 billion in reorganizing financing. According to Reuters, Circuit City said same-store sales at stores not slated to close fell by up to 50% since the filing.

IndyMac Bancorp, the collapsed California lender, may have been allowed to backdate a capital infusion months before it was seized by federal regulators, the Journal reported. The Treasury Department is reportedly investigating the Office of Thrift Supervision over the infusion that allowed the bank to remain classified as “well capitalized.”

Las Vegas Sands (LVS) slashed 500 jobs, including 10 managers, at its Venetian Macau casino project, the Journal reported. The casino operator also said it plans to cut staff working hours as it suspends construction activity, the newspaper reported.

Textron (TXT), the No. 1 global corporate jet manufacturer, slashed its fourth-quarter outlook and announced plans to cut 2,200 jobs due to the recession. The company also said it plans to stop lending to non-customers.

Micron Technology (MU) is expected to report a loss of 43 cents per share after Tuesday's closing bell.

World Markets

European indexes ended narrowly mixed as London's FTSE 100 closed 0.16% higher but France's CAC 40 slumped 0.73%.

In Asia, Japan's Nikkei 225 closed 1.57% higher overnight while Hong Kong's Hang Seng plunged 2.75%.


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Dollar General sales are up 12.4%

NY to Lose $178M in Tax Revenue From Execs Who Gave Up Bonuses

ALBANY, N.Y.--Gov. David Paterson said Friday that the loss of tax revenue from just six Goldman Sachs' (G)executives will cost New York $178 million.

The executives complied with the urging of New York Attorney General Andrew Cuomo and others who said in November that major Wall Street companies benefiting from federal bailouts shouldn't pay out the usual huge bonuses to executives.

Paterson says it is the right thing to do, but the result is a further hit to the fiscal crisis of state government.

"Things could go even more south in a big hurry," Paterson told reporters.

He said Wall Street firms receiving federal bailout did the right thing by forgoing bonuses to their executives, but that has had a devastating effect on New York's fiscal crisis because Wall Street taxes accounted for 30 percent of state revenue in the last fiscal quarter.

"I think it was the right urge," he said, but "the state lost $178 million in that moment."

The Democrat projects the current deficit and the 2009-10 deficit to be $15.4 billion right now, but said that could get worse. On Tuesday he proposed a mostly flat-growth 2009-10 budget, due April 1, of about $120 billion.

The decision by Goldman Sachs' top executives to forgo bonuses in 2008 forced other investment bank bosses to follow suit. Thousands of lower-tier brokers will still collect their hefty bonuses, however, because their employers don't want to lose their top talent.

Seven executives at Goldman Sachs Group Inc. (G), including Chief Executive Lloyd Blankfein, were to get no cash or stock bonuses for 2008. Blankfein received total compensation of $54 million last year, according to calculations by The Associated Press, making him the sixth-highest-paid CEO of a Standard & Poor's 500 company in 2007.

It's the first time top Goldman executives have not received bonuses since the 139-year-old investment bank went public in 1999.

Wall Street employees often receive up to 80 percent of their total compensation from year-end bonuses. Now those payments are attracting more scrutiny from lawmakers and consumer groups because taxpayers are footing the bill for the government's $700 billion financial bailout.

"This is a very, very difficult year for Americans," Paterson said. "But I don't think it has been fully realized ... it could theoretically become another depression, it is that difficult."

He said the state's spending has to be cut, and he needs the $4 billion in fee increases and narrow tax increases he proposed in his budget Tuesday, to keep bond raters from downgrading New York's credit rating. Tight and more expensive credit could further lead to a cash-flow problem.

"Then we will be on the brink of insolvency," he said.


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Market Winners & Losers: GM, Tenet Healthcare

The major indices remained relatively flat to end the week after a huge swing to the upside Friday morning, with news that General Motors (GM) and Chrysler will receive more than $17 billion from the government. As oil settled at $33 on the last day with January as the front-month contract, here are some of the day’s winners and losers.

Winners

General Motors Corp. (GM)

The big winner from the auto bailout, GM is set to receive billions to try to revamp sales and avoid bankruptcy. The auto maker saw shares rise 83 cents, or nearly 23%, to close at $4.49.

Darden Restaurants Inc. (DRI)

The Red Lobster and Olive Garden owner shocked investors as it saw November a big rise in sales, despite a less-than-favorable forecast from analysts. The stock gained nearly 20% Friday, up $4.74 to $28.72.

Micron Technology Inc. (MU)

The semiconductor producer cheered news that Hynix Semiconductor Inc. is cutting production as demand continues to slide. Shares rose 14.5%, or 38 cents, on Friday to end the week at $2.99.

LSI Corp. (LSI)

After lowering fourth-quarter guidance, the stock responded positively, gaining 44 cents, or 12.8%, to end the week at $3.88.

Office Depot Inc. (ODP)

A bright spot for the office supplies retailer; maybe some people needed pens for Christmas. The stock increased 29 cents, or 13.6%, to $2.79 on nearly 8.8 million shares traded.

Losers

Cintas Corp. (CTAS)

After releasing poor quarterly numbers Friday morning, the stock dropped significantly and failed to recover. It closed down $3.19, or 12.5%, to end the week at $22.35.

Weyerhaeuser Co. (WY)

An apparent cutback in use of timber and timber-related products has hit WY, which lost $3.51, or 9.45% on the day to close at $33.62.

M&T Bank Corp. (MTB)

Apparently the company’s acquisition of Provident Bankshares Corporation is not impressing people, as shares fell $3.76, or 6.3%, to end the week at $55.96.

Tenet Healthcare Corp. (THC)

The health-care facilities provider had news that it was cutting jobs in South Carolina, and the issues in that state can be felt across the country as growing economic pressures have hampered the company throughout much of the last quarter. The stock fell 6%, or seven cents, to $1.06.

Fluor Corp (FLR)

Citigroup lowered the company’s rating to sell, which didn’t help the stock -- it lost nearly 6%, or $2.79, to close at $45.26.

Market Winners & Losers: Equity Residential, E*Trade
Dana to cut jobs, close plants

FOXBusiness.com's Week in Review: Dec. 15-19, 2008

Monday, Dec. 15, 2008

The name of Bernard Madoff, a prominent money manager who now stands accused of fraud on the order of $50 billion, continued to dominate the news this week as more and more people and companies were added to the list of those affected by his scheme.

Not only private investors, but charities, prominent figures such as Steven Spielberg and U.S. Senators, and banks like HSBC and the Royal Bank of Scotland have all been victims.

Home values lost over $2 trillion so far in 2008, according to Zillow Real Estate Market reports. And 11.7 million homes now owe more on their mortgage than they’re actually worth.

Another report Monday showed that industrial production fell 0.6% in November. This wasn’t quite as bad as economists were expecting, though.

Nationwide Average Gas Price:
$1.67 a gallon

Oil prices moved upward on expectations of a production cut from the Organization of Petroleum Exporting Countries, the oil cartel, early in the day -- but settled down $1.77 to $44.52, in part due to those disappointing reports on home values and industry.

In a 5-4 split case, the U.S. Supreme Court gave the OK to lawsuits against tobacco companies for “deceptive marketing” of light cigarettes. The ruling said that smokers can sue cigarette companies for the way they market low tar and light cigarettes under state consumer protection laws.

However, those suing, said the court, will have to prove in that the marketing of these cigarettes violate those protection laws.

Online Retail Sales Surprise


Week in Review: Oct. 19-25, 2008
Tenn. tobacco is on pace for ‘excellent’ year

Flint, Mich. Mayor Says GM, Chrysler Deal May Be Set; Details Emerge About Chrysler's Plan for Viability

A potential deal involving General Motors (GM), Chrysler and private-equity firm Cerberus could be in the works, according to Flint, Mich., Mayor Donald Williamson.

During an interview with FOX Business Network, Williamson said a deal could involve GM giving an additional 41.8% stake in GMAC -- its financial unit -- to Cerberus, which would make the private equity company’s total investment in GMAC 91.8%. In return, GM wouldreceive Chrysler’s automotive business.

“I think they have the deal made,” said Williamson, citing conversations he has had with people involved in the discussions. “You will see that General Motors will own Chrysler.”

The government Friday gave the auto makers a short-term low-interest loan in a bid to shore up their capital position, but many analysts say major changes need to be made to keep the companies viable.

The two ailing auto makers -- which have been quickly going through capital -- would be able to cut costs as a combined company. According to Williamson, if the auto makers were forced to close their doors, it “would have been a complete disaster for America.”

On Friday afternoon, Cerberus said it will invest the first $2 billion of Chrysler Financial profits back into Chrysler's auto operations. The company believes the funding will support the $4 billion loan Chrysler is due to receive from the government as part of its rescue of the auto industry.

Still, the move comes with some strings attached. Cerberus said Chrysler must restructure its debt and reduce its labor costs to the level of its overseas rivals. Without those actions, Cerberus fears the auto maker will not be able to repay its government loan or achieve a solid level of viability.

Cerberus said it will facilitate by offering equity stakes in Chrysler to its unions and creditors.

The Associated Press contributed to this report.


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This Won’t Be the Last Loan

Time Can Be a Heck of a Gift

I have been seeing over and over a television commercial for a “cheese product” that shows a mother going through a grocery store with a little boy who appears to be about eight years old. As he trails her and her grocery cart, she is talking nonstop on her cell phone. I know I’m supposed to be focusing on how the “cheese product” is still a good buy in this ever-worsening economy, but every time I watch this ad I wonder how a mother could miss the opportunity to connect with her child for 15 minutes while shopping.

Time is of the essence, isn’t it?

That’s why I’m bringing you another collection of gift ideas with that theme. Last week I shared a list of possibilities from experts who had been featured in Game Plan over the last year. Following are additional suggestions that are all last-minute friendly, a bit thought-provoking, and at different points on the budget spectrum.

Stacy London, stylist and host of TLC’s What Not To Wear, gets us started with the notion of giving an endangered species the gift of time. She suggests adopting an animal or a whole family of polar bears, pandas, etc. through the World Wildlife Fund for fees ranging from $25 to $250.

In the time-well-spent category, Gene Arnold, known as the vitamin guru to the stars and inventor of ImmuGo wellness shots, donates thousands of dollars worth of healthy food from his Malibu business, The Vitamin Barn, to a homeless shelter in Los Angeles. Business owners might want to pick up on that theme and see what they have to offer an organization in need -- and take the time to make it happen.

Michael Corriero, executive director of Big Brothers Big Sisters of New York and a former New York Supreme Court Judge, thinks a meaningful gift would be to support a mentoring relationship between a New York City teen and his or her workplace mentor. This program is designed to expose urban youth to diverse workplace environments, encourage them to stay in school, pursue higher education and be inspired about their future careers. In essence, you’d be giving someone else the opportunity to invest their time in a teen. The cost to "Adopt a Match" is $750 for half a year. More information can be found on the BBBS Web site.

If your idea of quality time involves an athletic venue, Erica Boeke, author of GameFace, suggests giving tickets to an upcoming sporting event to a youngster in your life. It will give you some bonding time and, as Boeke points out, the chance to teach some of sport's great lessons to a young girl or boy in your life. Remember, that can range from a local college event to a minor league baseball game to a professional one, depending on your budget.

Laura Radensky, community liaison at Jewish Home Lifecare for the elderly, has witnessed firsthand what the gift of time does for that population.

“There is nothing more important to a human being, especially if they are elderly, homebound, or have lost most of their friends and family,” Radensky wrote. “Offering companionship on a regular basis is appreciated more than any gadget or clothing item. And the rewards of this gift are twofold. You feel great knowing that you brought joy and happiness to another person.

“One gift that can be of tremendous value is a monthly lunch date for someone who does not have the regular contact. Even a regularly scheduled phone call, as we have seen because some of our Jewish Home Lifecare volunteers do it, can be of great help. A bird feeder is also a wonderful on-going gift that can allow someone who remains at home to have further hours of pleasure. Some of our nursing home residents love to receive a packet of cards with get well or happy birthday messages with stamped and possibly pre-addressed envelopes, wrapped up with pretty ribbons.

“Finally,” Radensky wrote, “we have also participated in making recordings of stories by our clients and the results have been very heartwarming. Some of them have said that they spoke about memories from 30 or 40 years ago that were very precious to them but that they hadn't shared in that long. Others were sparked to talk to family about things they felt were important to pass down but had not thought to until someone approached them wanting to record them. One daughter tearfully spoke of how grateful her mother was before she died of cancer to be able to make some recordings and how pleased the daughter is now that she has these important memories of her mother. It is the type of thing that many of us say that we will do maybe one day, but presenting it as a gift with set dates and times for recording can make it happen.”

The overarching message here? Maybe it’s time to invest in time. As I watch the woman in the TV commercial and wish she would engage her little boy in conversation about his day at school, I think about my own life and where I could be more generous with my own time.

How about you?

Nancy Colasurdo is a practicing life coach and freelance writer. Her Web site is www.nancola.com. Please direct all questions/comments to FOXGamePlan@gmail.com.


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Polaroid Files for Chapter 11 Bankruptcy

Polaroid Corp. announced on Thursday that it has filed for Chapter 11 bankruptcy due to “apparent fraud acts” at its parent company, Petters Group Worldwide.

Polaroid, a consumer-electronics company that boasts it invented instant photography, said the restructuring process will not affect day-to-day operations, and said it has enough cash reserves to finance the reorganization, so it doesn’t expect to seek addition debtor-in-possession financing.

Polaroid said in its press release that “the founder of Petters Group and certain associates are currently under investigation for alleged acts of fraud that have compromised the financial condition of Polaroid and other entities owned by Petters Group,” noting that “Polaroid and its leadership team are not subjects of the ongoing investigation involving Petters Group.”

Petters Group founder Tom Petters stands accused by federal prosecutors of leading a $2 billion-plus fraud.

“We expect to continue our operations as normal during the reorganization and are planning for new product launches in 2009,” Polaroid CEO Mary Jeffries was quoted as saying in the press release.

Polaroid said it will continue to market and ship its products, and will continue to honor all warranties.

Jeffries said in the release that “Our operations are strong and during this process Polaroid will ship products to our retail partners, work with our suppliers and contract manufacturers to fulfill retailer demand, honor customer warranties and employees are expected to receive their regular paychecks without interruption.”

This is the second time in recent years that Polaroid has sought bankruptcy protection -- it also happened in 2001.

Petters Group has owned Polaroid since 2005. Also, an affiliated company, Petters Companies Inc., has financial ties to Polaroid through Petters Group Worldwide.


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An Ode to 2008

'Tis the month before New Year's and throughout the land
We pause to reflect, to see where we stand

To look where we've been and what lies ahead
and if our economy stays in the red.

We're in a recession, so we've been told,
Began last December when it was cold.

How did it start? Could we see it coming?
Was Greenspan to blame or was it the humming...

...Real estate market that came to a stop
Caused a GDP tumble, credit to drop

Bernanke misread it, then ran to catch up
To scurry to lead, to fill up the cup

Depleted as stocks fell off the cliff
All the while keeping an upper lip stiff

With Paulson on board he pushed for a rebate
To stimulate spending, but it wasn’t so great

Most went to savings, not to the store
Leaving the Congress to do lots more

Then came Bear Stearns, an investment bank crumbling
With it the entire house of cards tumbling

The Feds stepped in working a plan
For Chase to buy it, to do what they can

To settle the markets, but it unwound
When Freddie and Fannie both nearly drowned

So back to the Capitol, back up the Hill
Asking the Congress to dip into the till

For yet another Treasury dose of some help
Even though taxpayers were ready to yelp

And in the background an election race run
Primaries racing, campaigns undone

Gone were Thompson and Romney and Mayor Rudy
Leaving the only challenger Huckabee

But he wasn’t enough to stop John McCain
Who rode Straight Talk Express to a winning campaign

The Dems dropped Edwards, Richardson too
Leaving Clinton, Obama as the last two

Barack’s time was coming, only a matter of when
He finally would vanquish New York’s junior Sen.

Then Obama chose Biden as his running mate
McCain tapped Palin from the frozen state

The economy though was too much to overcome
When the voting was over, history won.

Confidence was slipping, consumers grew wary,
Profits plunged too; Wall Street was scary.

NASDAQ fell lower, the Dow too was dropping.
The Fed took some action: interest rate lopping.

But still the economy was the dominant force
With new strains on Wall Street to throw us off course

Lehman was thrown under the bus
With no understanding how much of a fuss

The demise of a legend would bring to the Street
Giving investors still colder feet

Bernanke and Paulson called for a TARP
The House first balked and threw out a har-

-poon to kill it until it was changed
Thinking the rescue was all arranged

But the plan was written in disappearing ink
Leaving our reps to ponder and think

About what they’d done and who was in charge
As auto makers tried to barge

Into the rescue, help us they said
If you don’t our industry’s dead

The Congress again took a pass
Leaving George W. Bush to step on the gas

To try to revive the faltering firms
Avoiding, he hoped, the spreading of germs

Now the Bushes are leaving, back off to Texas
No longer his syntax will be there to vex us

Obama arriving, with a new crew
His wife and his daughters -- and their little dog too!

The nation still though mired in recession
Looks back to Washington for a concession.

What can we see as we look to next year?
Recovery later? Recovery near?

It might take a while, testing our mettle
For markets to revive, to finally settle

What can we say to finish this rhyme?
Here's hoping we have a better '09

Mark Lieberman is the senior economist for the Fox Business Network. Prior to joining FOX, he served as first vice president and manager of economic analysis and research at Washington Mutual in New York. Before that, he served as senior vice president at Dime Savings Bank of New York (which was later acquired by Washington Mutual), where he specialized in credit and risk management. He is a member of the Executive Committee of the New York Association for Business Economics. He has a degree in Economics from the Wharton School of the University of Pennsylvania.

Monday, December 22Chicago Fed National Activity Index (Nov / 3 Mo Mov Avg)October actual: -1.06 / -2.09No November consensusTuesday, December 23GDP (3Q Final) (Q-Q Annualized)2Q Actual: UP 2.8%3Q Preliminary: DOWN 0.5%3Q Final Consensus: DOWN 0.5%Existing Home Sales (Nov)October actual: 4,980,000 DOWN 3.1% (Month-Month)November consensus: 4,900,000 DOWN 1.6% (Month-Month)New Home Sales (Nov)October actual: 433,000 DOWN 5.3% (Month-Month)November consensus: 420,000 DOWN 3.0% (Month-MonthUniversity of Michigan Consumer Sentiment (Dec Final)November Final Actual: 56.3December Preliminary Actual: 59.1December Final Consensus: 56.0Richmond Fed Survey (Nov)November actual: -38 DOWN 12No December consensusWednesday, December 24MBA Application Index (Week ended: December 19)Week Ended December 12: 841.4 UP 2.9%Four-week moving average: 641.7 UP 18.6%No December 19 consensusUnemployment Insurance Claims (Week Ended December 20)December 13 Actual: 554,000 DOWN 21,000December 20 Consensus: 550,000Four-week moving average: 543,750 DOWN 2,750No December 20 consensusDurable Goods (Nov)TotalOctober actual: DOWN 6.9%November consensus: DOWN 2.5%Ex-AutoOctober actual: DOWN 5.4%November consensus: DOWN 2.8%Personal Income and Consumption (Nov)Personal IncomeOctober actual: UP 0.3%November consensus: UP 0.1%Personal ConsumptionOctober actual: DOWN 1.0%November consensus: DOWN 0.7%PCE Core Inflation IndexOctober actual: 2.1% DOWN 0.2%November consensus: 2.0% DOWN 0.1%Thursday December 25CHRISTMAS HOLIDAYNo Data ReleasesFriday, December 26BOXING DAYNo Data Releases

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This Won't Be the Last Loan

Missed tonight's Cavuto? Catch "The Deal" right here on FOXBusiness.com

A bailout or a timeout?

We'll leave that for the experts to figure out.

For now, the auto companies don't much care.

They've got 17.4 billion bucks they desperately need.

And three months to prove this wasn't a desperate waste of time.

Welcome, everybody. I'm Neil Cavuto, and here's the deal:

The auto companies have their deal.

We're still scratching our heads what kind of deal.

$13.4 billion of that $17.4 billion is from that bank rescue dough.

So is it a "TARP" deal?

And we're told Treasury Secretary Hank Paulson wasn't for using that dough for this dough...But still he's the guy temporarily in charge of this.

That's because there's no car czar yet.

And that 90-day deadline for the industry to prove its viability or give the dough back hardly seems like a legitimate threat when you consider by that time, you've got a Democratic president and a much friendlier Democratic Congress as well.

So who's to say this isn't more like a bridge loan to say...Next month...When auto guys can look for another deal, maybe a better deal, maybe a lot better deal.

Seems like it'd be hard to top this one...

Where company bosses have to accept limits on their compensation... But union bosses do not.

No matter, it's money, for now, in the bank...And at the rate these guys are bleeding that money...Not long for that bank at all.


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Obama Preparing to Spend Up to $850B on Stimulus Package

WASHINGTON--President-elect Barack Obama is laying the groundwork for a giant economic stimulus package, possibly $850 billion over two years, in his first test of legislative give and take with Congress.

Obama's economic advisers are assembling a recovery plan and reaching out to members of Congress and their staffs.
Obama aides cautioned that they have not settled on a specific grand total. But they noted that economists from across the political spectrum have recommended spending similar or even larger amounts to jolt the worsening economy.

Despite the uncertainty, Obama got help Thursday from 20 progressive groups investing more than $4 million in advertising and other events to push moderate Democratic and Republican lawmakers to help pass the package. Whatever the details, the package should be on the new president's desk, ready for him to sign, the day he takes office on Jan. 20, members of the group said in a conference call.

"The main goal of this campaign is to avoid a filibuster in the Senate," said Brad Woodhouse, president of Americans United for Change.

House Speaker Nancy Pelosi, D-Calif., this week said Democrats were preparing their own recovery bill in the range of $600 billion, blending immediate steps to counter the slumping economy with longer-term federal spending that encompasses Obama's plan.

Senate Majority Leader Harry Reid, D-Nev., said Wednesday that Obama has indicated that Congress will get his recovery recommendations by the first of the year.

"He's going to get that to us very quickly, and so we would hope within the first 10 days to two weeks that he's in office, that is after Jan. 20, that we could pass the stimulus plan," Reid said. "We want to do it very quickly."

Obama's aides have said they hope to work with Republicans in writing the bill, particularly in the Senate, where the GOP could slow action if it chooses to. Woodhouse said the progressive groups are focusing on such Republican senators as Arlen Specter of Pennsylvania, Mel Martinez of Florida, Lisa Murkowski of Alaska, Charles Grassely of Iowa, George Voinovich of Ohio, Richard Lugar of Indiana and John Thune of South Dakota.

The package is expected to contain sweeteners for lawmakers of both parties.

Obama's plan would feature spending on roads and other infrastructure projects, making government buildings energy-efficient, building and renovating schools and adopting environmentally friendly technologies.

There also would be some form of tax relief, according to the Obama team, which is aware of the political difficulty of pushing such a large package through Congress, even in a time of recession. Any tax cuts would be aimed at middle- and lower-income taxpayers, and aides have said there would be no tax increases for wealthy Americans.

While some economists consulted by Obama's team recommended spending of up to $1 trillion over two years, a more likely figure seems to be $850 billion. There is concern that a package that looks too large could worry financial markets, and the incoming economic team also wants to signal fiscal restraint.

In addition to spending on roads, bridges and similar construction projects, Obama is expected to seek additional funds for numerous programs that experience increased demand when joblessness rises, one Democratic official said.

Among those programs are food stamps and other nutrition programs, health insurance, unemployment insurance and job training programs.

Obama advisers, including Christina Romer and Lawrence Summers, have been contacting economists in search of advice as they assemble a spending plan that would meet Obama's goal of preserving or creating 2.5 million jobs over two years.

Among those whose opinions Obama sought were Lawrence B. Lindsey, a top economic adviser to President George W. Bush during his first term, and Harvard professor Martin Feldstein, an informal adviser to John McCain and chairman of the Council of Economic Advisers under President Ronald Reagan.

Feldstein recommended a $400 billion investment in one year, Obama aides said, and Lindsey said the package should be in the range of $800 billion to $1 trillion. The aides revealed the discussions on condition of anonymity because no decisions had been reached.
"I do recommend $400 billion in year one and expect a similar amount in year two," Feldstein said in an e-mail. "The right amount depends on how it is used."
Obama aides also pointed to recommendations by Mark Zandi, the lead economist at Moody's Economy.com and an informal McCain adviser who has been proposing a $600 billion plan.

"I would err on the side of making it larger than making it smaller," Zandi said in an interview. "The size of the plan depends on the forecast -- the economic outlook -- and that is darkening by the day."

"Even a trillion is not inconceivable," he said.

Only one outside economist contacted by Obama aides, Harvard's Greg Mankiw, who served on Bush's Council of Economic Advisers, voiced skepticism about the need for an economic stimulus, transition officials said.

In February, Congress passed an economic stimulus bill costing $168 billion and featuring $600 tax rebates for most individual taxpayers and tax breaks for businesses. The upcoming effort would dwarf that earlier measure as well as a $61 billion stimulus bill the House passed just before adjourning for the elections. That measure died after a Bush veto threat and GOP opposition in the Senate.


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Market Winners & Losers: XL Capital, General Motors

Thursday saw oil reach lows not seen in over four years, as well as news of continued General Motors (GM) and General Electric (GE) troubles. The major indices were down 2.1% as the week nears an end.

Here are some of the session’s winners and losers:

Winners

Micron Technology Inc. (MU)

Shares of the chip maker rose more than 20% Thursday on news that a competitor is cutting production and that a rising cost in product will help in coming quarters. The stock last traded at $2.61, a gain of 44 cents.

XL Capital Ltd. (XL)

Rumors of a possible takeover helped shares climb 10.4% on the day. The stock closed at $3.93, gaining 37 cents on 24.4 million shares traded.

Coca-Cola Enterprises Inc. (CCE)

The soft drink manufacturer strengthened its full-year outlook based mostly on solid sales. The stock gained 89 cents, or 8.33%, closing at $11.58.

Discover Financial Services (DFS)

The company’s attempts to seek bank holding status to secure its credit line -- in addition to posting a profit in the third quarter -- helped the stock gain 68 cents, or 7.9%, on Thursday to $9.26.

Pepsi Bottling Group Inc. (PBG)

Benefiting from CCE’s success, PBG watched shares climb nearly 8%, or $1.51, on Thursday, to close at $21.01.

Losers

General Motors Corp. (GM)

After denying reports that it was currently in talks with Chrysler over a merger of its manufacturing operations, the stock fell 16% on the day. The stock closed at $3.66, a loss of 71 cents.

Federated Investors Inc. (FII)

The company followed suit with the sector, losing $3.17, or 16%, Thursday to finish at at $16.59.

Nabors Industries Ltd. (NBR)

As oil hit 4½-year lows, the land-drilling contractor watched shares fall nearly 16%, or $2.07. The stock closed at $10.92.

ENSCO International Inc. (ESV)

This was another stock hit by the falling price of crude. The offshore drilling contractor watched the stock drop $4.41, or 13%, on the day, closing at $27.62.

MEMC Electronic Materials Inc. (WFR)

MEMC was just one of many semiconductor manufacturers getting hit by falling commodity prices. Shares were down $1.05, or 13%, on Thursday to close at $14.52.


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Market Winners & Losers: Macy's, Omnicom

Despite the best efforts by OPEC to raise the price of crude, oil still managed to close right around $40 a barrel. At the same time, the Madoff case continues to unfold and the possibility of new tax cuts looms over New York. All of this -- and much more -- led the major indices to close down an average of nearly 1% Wednesday.

Here are some of the day’s winners and losers:

Winners

Macy’s Inc. (M)

With Christmas just days away, this retailer caught a break. The company renegotiated a $2 billion credit line, which helped its stock gain more than 18%, or $1.54, on the day. Shares last traded at $10.01.

Tesoro Corp. (TSO)

News of increased capital spending cuts helped the stock gain 12.3% Thursday. The stock last traded at $11.22, gaining $1.23.

Limited Brands Inc. (LTD)

This woman’s retailer was not hurt by the news that same-store sales were down 8%; its stock gained 84 cents, or 9.9%, to $9.34.

Wyndham Worldwide Corp. (WYN)

Despite a Deutsche Bank ratings cut, people are still impressed with the company’s attempts to cut back on its time share business. Shares were up 55 cents, or nearly 9%, Thursday, closing at $6.78.

ConAgra Foods Inc. (CAG)

After reporting revenue of $3.26 billion Wednesday morning, shares finished the day up just $1.20, or short of 8%, at $16.25.

Losers

Newell Rubbermaid Inc. (NWL)

You would think people would be trying to save leftovers during a recession, but apparently, that's not the case. Rubbermaid is drastically cutting its fourth-quarter earnings forecast because of volatility in the market and a drop in demand, which led to a loss of $360, or more than 27%, on the day. Shares last traded at $9.58.

Constellation Energy Group Inc. (CEG)

This was a bad day for the energy company as it cancelled a deal with Warren Buffett’s Berkshire Hathaway (BRK.A) in favor of a French energy company. Shares were down nearly 20%, losing $5.74 to close at $23.00.

Genworth Financial Inc. (GNW)

The small-cap financial company saw more than 29 million shares traded on Thursday. The stock closed down 36 cents, or 10.3%, at $3.13.

National City Corp. (NCC)

This regional bank has seen a negative backlash to its prime rate cut. NCC saw massive share volume a day after Federal Reserve policy makers cut the target rate. It closed at $1.78, a loss of 15 cents, or around 8%.

Omnicom Group Inc. (OMC)

It will be interesting to see how this stock will react to the Wednesday night reports about the auto makers extending the holiday idling of plants, as this advertiser’s problems stem from a lack of auto interaction. The shares were down 7.3%, or $2.16, closing at $27.60.

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Fed Hangover: Dow Falls 100

The markets suffered a late-day selloff on Wednesday as WallStreet gave back some of Fed Day's huge gains despite crude oil futures slumping to fresh 4 1/2-year lows.

Today's Markets

The Dow Jones Industrial Average lost 99.80 points, or 1.12%, to 8824.34, the S&P 500 fell 8.76 points, or 0.96%, to 904.42 and the Nasdaq Composite slid 10.58 points, or 0.67%, to 1579.31. The consumer-friendly FOX 50 dropped 9.98 points, or 1.41%, to 699.10.

The afternoon slide also came as Morgan Stanley (MS) disclosed a $2.2 billion quarterly loss -- news that came just a day after Goldman Sachs (GS) revealed its first losing quarter since going public in 1999.

"The market has basically been ignoring all the bad news out the last two weeks or so. Maybe they will be paying a bit more attention now," NSYEtrader David Henderson of Raven Securities told FOXBusiness.

Since hitting its lowest level in 3 1/2-years on November 20, the Dow has surged roughly 1200 points in the face of some of the gloomiest economic and corporate news seen this year. A day ago the Dow surged 360 points after the Fed slashed interest rates to a range of 0% to 0.25% -- the lowest level on record.

Bank of America(BAC) and Citigroup (C) led the way down on the benchmark index on Wednesday, offsetting solid gains for General Motors(GM)and Caterpillar (CAT).

"I think the market still has a reasonably positive tone to it, certainly in the short term. Perhaps these moments of weakness are not selling opportunities but buying opportunities," NYSE trader Ted Weisberg of Seaport Securities told FOXBusiness.

There weren't any major economic reports released Wednesday so the markets shifted their attention to the volatile price of crude oil, which briefly plunged below $40 a barrel even though OPEC announced its largest production cut in history. After slipping as low as $39.88, the price of a barrel of crude closed down $3.54 to $40.06.

The energy market failed to rally around OPEC's decision to slash output by 4.2 million barrels per day from September's level, a move made to combat the free falling price of crude. Instead, the energy market focused on more demand fears as a new oil inventory report from the government showed crude stockpiles rose by a larger-than-expected 525,000 barrels last week.

Transportation stocks benefited from the lower oil prices as railroaders like Union Pacific (UNP) and airlines such as Continental (CAL) ended sharply higher.

Some of the luster from the Fed move faded after Morgan Stanley (MS) disclosed much worse-than-expected results. Morgan lost $2.2 billion, or $2.24 a share, on revenue of $1.83 billion. Analysts forecasted much stronger results, predicting a loss of just 33 cents per share on $4 billion in revenue.However, shares of Morgan ended sharply higher, erasing earlier losses and giving the rest of the financial sector a boost.

Corporate Movers

Chrysler LLC’s financing arm warned it may need to halt loans used to stock dealership lots due to heavy withdrawals sparked by bankruptcy fears, The Wall Street Journal reported.

GMAC LLC, the financing arm of General Motors (GM), extended its debt exchange deadline for the fourth time. The offer, which has yet to draw the necessary demand, is part of GMAC’s efforts to become a bank-holding company and gain access to Fed rescue funds.

Citigroup (C) is facing increased scrutiny from regulators about the bank’s strategic direction and potential acquisitions, the Journal reported. Given that the U.S. is now Citi’s largest shareholder, the Fed and another banking regulator expect to have veto power over key strategic decisions, the newspaper reported.

General Mills (GIS), the breakfast cereal maker, topped expectations with earnings of $1.36 per share thanks to a 16% jump in baking products sales. The company also raised its 2009 earnings per share forecast.

Apple (AAPL) fell sharply after the tech heavyweight said CEO Steve Jobs won’t attend the upcoming Macworld show, sparking fears about his health. The news also prompted an Oppenheimer analyst to downgrade the stock to “perform.”

Aetna (AET) disclosed plans to slash 1,000 jobs, or 3% of its workforce before the end of 2008 due to the recession.

Macy’s (M) ended sharply higher after amending a credit agreement, a move aimed at “providing substantial liquidity…to weather the economic downturn.”

Constellation Energy (CEG) lost one-fifth of its market value after signing off on a deal to sell almost half of its nuclear power business to Electricite de France and slash its dividend by 60%. The sale scuttles a takeover effort by Warren Buffett’s MidAmerican Energy.

BNP Paribas, France’s largest bank by market cap, saw its shares plunge after disclosing an unexpected loss at its corporate and investment banking division.

ConAgra Foods (CAG) beat the Street with fiscal second-quarter earnings of 43 cents per share and still sees fiscal 2009 earnings exceeding expectations.

Global Markets

European indexes closed narrowly mixed as London's FTSE 100 advanced by 0.35% but Germany's DAXslumped 0.46%.

Asian markets ended in the green overnight, led by a 2.18% jump for Hong Kong's Hang Seng.


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