Ten US banks fail 'stress tests'

Ten US banks fail 'stress tests'
08-05-2009

Ten of America's largest 19 banks need a combined US$74.6 billion of extra funds to boost their cash reserves.

That is the main finding of the so-called "stress tests" to see if the banks have sufficient capital to cope should the recession worsen. Bank of America is the most at risk, needing an additional US$33.9 billion.

"Our hope with today's actions is that banks are going to be able to get back to the business of banking," said US Treasury Secretary Timothy Geithner. Other banks that need more money include Wells Fargo, which is said to require US$13.7 billion, and GMAC, the financial arm of General Motors, which needs US$11.5 billion.

Citigroup requires an additional US$5.5 billion of funds, and Morgan Stanley has been told to find US$1.8 billion. Some of the banks have already indicated how they intend to raise the money they need by private means such as asset sales, rather than having to secure any additional government loans.

The 19 banks that were tested by Treasury Department and Federal Reserve officials account for two-thirds of the total assets of the US banking system, and more than half of the total amount of credit in the US economy. Mr Geithner said earlier that no US bank being screened by regulators was at risk of insolvency.

General Motors posts Q1 loss of US$6B

General Motors posts Q1 loss of US$6B
08-05-2009

General Motors, the largest United States car maker, has announced that it made a loss of nearly six billion US dollars in the first three months of the year.

The company said it had experienced a decline in revenue in all regions of the world.

Mainland carmaker may bid for Volvo

Mainland carmaker may bid for Volvo
08-05-2009

The mainland carmaker, Geely, is believed to have moved a step closer to buying Volvo. Bloomberg says the biggest privately-owned carmaker on the mainland visited Volvo's factory in Sweden and scrutinised its books last month, along with two other bidders.

The US company Ford owns Volvo. Ford is hoping to raise US$2-billion from the sale.

At the same time, the Wall Street Journal says Geely has submitted a separate bid to buy another Swedish carmaker - Saab - from General Motors.

NY Times threatens to close Boston Globe

NY Times threatens to close Boston Globe
05-04-2009

The New York Times has threatened to shut down the Boston Globe unless unions at the money-losing daily agree to pay cuts and other cost-saving measures, the newspapers reported.

The Times, citing a "person briefed on the talks," said the Times was seeking US$20 million in savings at the Globe, which was purchased by the Times for $1.1 billion in 1993.

The Globe reported that Times executives had met with union leaders at the Boston newspaper on Thursday and demanded concessions such as pay cuts, an end to pension contributions and the elimination of lifetime job guarantees.

Fiat to bid for Opel

Fiat to bid for Opel
05-05-2009

The chief executive of the Italian car manufacturer, Fiat, is to outline plans later today for a possible take-over of the rival carmaker, Opel, in a move intended to create a new European car giant.

The Fiat chief, Sergio Marchionne, is expected to propose to the German government a merger between his firm -- which is buying a stake in the US company, Chrysler -- and Opel, the German arm of General Motors

Forecast of higher mainland growth

Forecast of higher mainland growth
05-05-2009

A mainland government think-tank says the country's economy will grow by 7 percent in the second quarter of the year.

If that's correct, it would mean the economy had hit the bottom in the first quarter which grew at 6.1 percent - the slowest rate in ten years.

The State Information Centre predicted investments in fixed assets, such as factories and construction, would increase 27.6 percent from a year ago.

The projections suggest that the government's 4 trillion yuan spending package announced in last November was taking effect.

Obama seeks to close tax loophole

Obama seeks to close tax loophole
05-05-2009

President Obama has been giving details of his proposed changes to the US tax system. In one of the more contentious measures, Mr Obama wants to scrap provisions that allow companies to delay paying tax on profits made and reinvested abroad.

He said the practice deprived the US government of much-needed revenue, and also served as an incentive to companies to move jobs away from the US. However, the US Chamber of Commerce has opposed the measures, which, opponents argue, would raise corporate taxes to uncompetitive levels.

Berkshire operating profit down

Berkshire operating profit down
03-05-2009

Warren Buffett told a record crowd at a somber annual meeting of his Berkshire Hathaway Inc that first-quarter operating profit fell and the company's book value declined 6 percent, as the recession weighed on many of the company's businesses and investments.

Operating profit fell about 12 percent from a year earlier to $1.7 billion, as most of Berkshire's businesses were "basically down," Buffett told an estimated 35,000 people at the meeting in downtown Omaha.

The decline in book value results in part from falling stock prices and higher losses on derivatives contracts, and comes on top of a 9.6 percent decline last year, the biggest drop since Buffett began running the company in 1965.