This is a tragic week as the earthquake shook Haiti and killed over 200 thousand people. It’s really sad and I hope that the people of Haiti recover quickly from this tragedy.
It was dull week for the market. C, FNM and OPC are not doing anything right now. I just hope that this market picks up and gives us a breathing room. I wish I could do some trading right now but I just don’t know which the winners are.
PORT-AU-PRINCE, Haiti – Haitians piled bodies along the devastated streets of their capital Wednesday after the strongest earthquake to hit the poor Caribbean nation in more than 200 years crushed thousands of structures, from schools and shacks to the National Palace and the U.N. peacekeeping headquarters. Untold numbers were still trapped. It seemed clear that the death toll from Tuesday afternoon's magnitude-7.0 quake would run into the thousands. France's foreign minister said the head of the U.N. peacekeeping mission was apparently among the dead. International Red Cross spokesman Paul Conneally said a third of Haiti's 9 million people may need emergency aid and that it would take a day or two for a clear picture of the damage to emerge. The United Nations said the capital's main airport was "fully operational" and that relief flights would begin Wednesday. Aftershocks continued to rattle the capital of 2 million people as women covered in dust clawed out of debris, wailing. Stunned people wandered the streets holding hands. Thousands gathered in public squares to sing hymns. People pulled bodies from collapsed homes, covering them with sheets by the side of the road. Passersby lifted the sheets to see if loved ones were underneath. Outside a crumbled building the bodies of five children and three adults lay in a pile. The United States and other nations — from Iceland to Venezuela — said they would start sending aid workers and rescue teams to Haiti on Wednesday as the start of a major emergency operation. The international Red Cross and other aid groups announced plans for major relief operations in the Western Hemisphere's poorest country. Many will have to help their own staff as well as stricken Haitians. Taiwan's Foreign Ministry said its embassy was destroyed and the ambassador hospitalized. Spain said its embassy was badly damaged. "Haiti has moved to center of the world's thoughts and the world's compassion," British Prime Minister Gordon Brown said. Tens of thousands of people lost their homes as buildings that were flimsy and dangerous even under normal conditions collapsed in the shaking. Nobody offered an estimate of the dead, but the numbers were clearly enormous.
- SHANGHAI – China's lavish bank lending spurred a recovery but also pumped up markets as speculators scooped up stocks and property and even dabbled in garlic, dried chilli peppers and luxury Pu'er tea. Now, China is reining in its spendthrift banks, shifting toward an exit strategy that aims to avoid a bust. After a brief slowdown a year ago, China's economy has bounced back rapidly, with growth forecast at 8.3 percent for this year. Yet the stimulus spending that led that revival — supported by more than 9 trillion yuan ($1.3 trillion) in new bank loans last year — has spurred speculation, raising alarm over a potential housing bubble. The stimulus has also propelled huge investments in industries already larded with overcapacity. On an average day in 2009 some 1,000 new industrial projects were launched, Standard Chartered bank economist Stephen Green estimates. The challenge now is to stave off inflation and ensure that the stimulus goes into productive investments rather than to speculators. To help curb those risks, Beijing late Tuesday increased the reserves that banks must hold by 0.5 percentage point, to 15 percent of their deposits. U.S. banks must hold 10 percent in reserve, though that requirement is based on only a fraction of their balance sheets. The surprise move followed reports that Chinese banks lent 600 billion yuan, or about $88 billion, in the first week of January — nearly double the total for all of December. "We need to guide rational investment to avoid speculation," Qi Ji, Vice Minister of Construction, told reporters in Beijing on Wednesday. Qi's bland comment belies concerns voiced by many prominent Chinese economists. In the state-run China Securities Journal on Monday, He Fan and Yao Zhizhong of the government-affiliated Chinese Academy of Social Sciences warned that without tighter controls the economy could grow an unsustainable 16 percent this year. If stimulus policies remain unchanged, "the economy is destined for serious overheating," they said. The resulting bust could derail growth and leave banks with massive holdings of bad loans.
- WASHINGTON (AP) -- Wall Street executives said Wednesday they underestimated the severity of the 2008 financial crisis and made poor decisions, while also defending their bonus and compensation practices to a skeptical commission investigating what caused the collapse. Americans are furious and "have a right to be" about the hefty bonuses banks paid out after getting billions of dollars in federal help, the commission's chairman told chief executives of four major banks. As the hearings opened before the Financial Crisis Inquiry Commission, Phil Angelides pledged "a full and fair inquiry into what brought our financial system to its knees." Brian Moynihan, chief executive and president of Bank of America, said compensation levels will be higher next year than they were in 2008, but not at levels before the financial meltdown. "We understand the anger felt by many citizens," he said. "We are grateful for the taxpayer assistance we have received." With Bank of America having repaid its bailout money, he said "the vast majority of our employees played no role in the economic crisis" and do not deserve to be penalized with lower compensation. Jamie Dimon, chief executive of JPMorgan Chase & Co., said most of his employees took "significant cuts in compensation" in 2008. He said his company would continue to pay people in a "responsible and disciplined manner" to attract and retain top talent. John Mack, chairman of Morgan Stanley, said the crisis was "a powerful wake-up call for this firm." He said he didn't take a bonus in 2009 and that his bank has overhauled its compensation practices to discourage "excessive risk-taking."
- BEIJING – Google's threat to pull out of China over censorship is a rare display of defiance in a system where foreign companies have long accepted intrusive controls to gain access to a huge and growing market. Dismayed by the prospect of a China without Google, visitors left flowers at its Beijing headquarters Wednesday as Web sites buzzed with words of support and appeals to stay. "I felt it's a pity and hope it will not withdraw from the Chinese market," said a man who left flowers at the building in the high-tech Haidian district and would give only his surname, Chang. "Google played a key role in the growth of our generation. The control (of the Internet) is excessive." In industries from automaking to fast food, companies have been forced to allow communist authorities to influence — and sometimes dictate — their choice of local partners, where to operate and what products to sell. Web companies have endured criticism for cooperating with a communist system that tightly controls information. Google Inc., Yahoo Inc., Microsoft Corp. and others have acceded to pressure to block access to politically sensitive material. "The Internet is like media, and the media are under tight government control, so that poses additional challenges for foreign Internet companies compared with, say, manufacturers of TV sets, mobile phones or autos," said Edward Yu, president of Analysys International, an Internet research firm in Beijing.
- WASHINGTON (AP) -- Retail sales unexpectedly fell in December, leaving 2009 with the biggest yearly drop on record and highlighting the formidable hurdles facing the economy as it struggles to recover from the deepest recession in seven decades. In another disappointing economic report, the number of newly laid-off workers requesting unemployment benefits rose more than expected last week as jobs remain scarce. Economists said the drop in retail sales in December underscored how tentative the economic remains given all the headwinds facing consumers. "We cannot expect a true turnaround in consumption until the jobs numbers improve significantly and consistently," Jennifer Lee, a senior economist at BMO Capital Markets, said in a research note. The Commerce Department said Thursday that retail sales declined 0.3 percent in December compared with November, much weaker than the 0.5 percent rise that economists had been expecting. Excluding autos, sales dropped by 0.2 percent, also weaker than the 0.3 percent rise analyst had forecast. For the year, sales fell 6.2 percent, the biggest decline on government records that go back to 1992. The only other year that annual sales fell was in 2008, when they slipped by 0.5 percent. The 0.3 percent decline in December was the first setback since September, when sales had fallen 2 percent. Sales posted strong gains of 1.2 percent in October and 1.8 percent in November, raising hopes that the consumer is starting to mount a comeback. A separate report showed that business inventories rose by 0.4 percent in November. It marked the second straight month that stockpiles have increased after a stretch of 13 monthly declines in inventories. The hope is that future sales gains will convince businesses to keep restocking, a development that will boost production and provide support for the recovery. In the jobs report, the Labor Department said new claims for unemployment insurance rose by 11,000 to a seasonally adjusted 444,000. Wall Street economists polled by Thomson Reuters expected an increase of only 3,000. The rise was partly a result of large seasonal layoffs in the retail, manufacturing and construction industries, a Labor Department analyst said. The second week of January usually sees the largest increase in claims, unadjusted for seasonal trends, during the year, the analyst said.
- TORONTO (Reuters) – The heads of Canada's four largest banks said on Thursday they remain focused on capital conservation because of uncertainty over global regulatory changes and the riskiness of making acquisitions. Gord Nixon, chief executive of Royal Bank of Canada, the nation's biggest bank, and Ed Clark, chief executive of Toronto Dominion Bank, the No. 2 bank, both said Canadian banks have strong capital levels compared with global rivals, but that there is no rush to spend it on acquisitions. "I don't think most Canadian bank CEOs are going to be rushing to burn through their capital until they have some certainty of (global rules)," Clark told investors at an RBC Capital Markets banking conference in Toronto. TD, which has focused its expansion strategy on the U.S. retail banking market, said it has mostly ruled out a blockbuster purchase in the United States. "We've always said, not that everything would absolutely have to be an FDIC (Federal Deposit Insurance Corp)-assisted deal, but it would have to be a small deal where we thought the catastrophic risk was estimable, so the idea that we would go out and do a big acquisition -- I just don't think it is in the cards." RBC's Nixon said the lack of mergers and acquisitions in financial services generally, particularly in the U.S. market, is due to a lack of clarity about asset values and risks. He said it is "almost irresponsible" to go out and invest in the current uncertain environment. Sabi Marwah, chief operating officer at Canada's third-largest lender, Bank of Nova Scotia, said there were only two areas that might offer the internationally focused bank the opportunity for a large acquisition: Mexico, where it already has a strong presence; and Canada, where it has a stake in CI Financial Corp. Bill Downe, CEO of Bank of Montreal, the nation's No. 4 bank, said there is no question that Canadian banks in general, and BMO in particular, are far better capitalized than global rivals. He said that puts BMO in a good position to expand as peers work to rebuild their cash reserves. BMO has focused its expansion goals on the U.S. Midwest. (Reporting by Andrea Hopkins; editing by Peter Galloway)
- NEW YORK (AP) -- Oil prices fell for the fifth straight day Friday, dipping below $79 a barrel as the dollar strengthened and forecasters saw milder winter weather ahead. Benchmark crude for February delivery slid 57 cents to $78.82 a barrel on the New York Mercantile Exchange. The weather outlook for the next 10 days calls for above average temperatures across nearly all regions of the U.S., which should temper demand for heating oil. Crude prices were pressured by a stronger dollar, making it more expensive for holders of foreign currencies to purchase oil, which is priced in U.S. dollars. Prices also fell on concerns about weak consumer demand. The Labor Department reported that inflation-adjusted wages fell 1.6 percent last year, the sharpest drop since 1990 and well below the 2.7 percent inflation rate for the year. That came on the heels of data released Thursday showing a drop in retail sales in December. In other Nymex trading in February contracts, heating oil fell 2.06 cents to $2.0623 a gallon and gasoline slid 1.52 cents to $2.0582 a gallon. Natural gas futures gained 7.5 cents to $5.663 per 1,000 cubic feet.
- SINGAPORE (AP) -- Singapore's exports jumped in December for the second straight month as global demand for the city-state's electronics surged. Exports excluding oil rose 26.1 percent from a year earlier to 13.2 billion Singapore dollars ($9.5 billion), according to Trade and Industry Ministry figures released Monday. The ministry said sales abroad rose a seasonally adjusted 1.7 percent from November. "The numbers reflect a solid rebound from the low levels of the first quarter last year," said David Cohen, an economist with consultancy Action Economics in Singapore. Electronics -- which account for 40 percent of non-oil exports -- rebounded strongly, rising 25.2 percent from a year earlier after falling 6.1 percent in November. Pharmaceuticals rose 76 percent while petrochemicals increased 64 percent, the ministry said. Singapore's economic recovery slowed last quarter as gross domestic product fell by an annualized seasonally adjusted 6.8 percent. The government expects the economy to grow up to 5 percent this year after contracting by 2.1 percent last year. The improvement in exports eases fears of a possible derailment of the global economic recovery, said Cohen. "The upward trajectory in exports from Singapore and other Asian economies is a sign that global demand is continuing to recover," he said. Non-oil exports rose 27 percent to Europe and 20 percent to China from last year, the ministry said. U.S. demand for non-oil products grew by 6 percent after falling nearly 13 percent in November.
- GENEVA (AP) -- Swiss Reinsurance Co. said Monday it transferred part of its U.S. life insurance business to American investor Warren Buffett's Berkshire Hathaway Inc. for 1.3 billion Swiss francs ($1.27 billion) to free up capital and invest it more profitably. The deal with billionaire Buffett, who already has a stake in Swiss Re, takes effect retroactively on Oct. 1, 2009. It has freed up 300 million francs ($292 million) in capital, Swiss Re said. The transaction known as "retrocession" means that Swiss Re transfers the business to another reinsurer -- Berkshire Hathaway. Reinsurance companies sell backup coverage to other insurers, spreading risk in the event of huge losses. The life insurance business had failed to meet Swiss Re's hurdle rate of 14 percent of returns, the company said. "This is a significant step forward in Swiss Re's strategy to increase capital efficiency," said Christian Mumenthaler, who heads the company's life and health department. "The transaction puts us in an excellent position to redeploy the capital at more attractive returns." The business had liabilities of around 1.9 billion francs, said Swiss Re. The total of Swiss Re's life insurance business in the United States amounted to roughly 6 billion francs in gross premiums last year. Swiss Re said it will continue doing the administration and reporting for the business in question. The reinsurer said it remains committed to life insurance in the United States. Shares in Swiss Re were down 1.4 percent at 49.40 francs ($48.14) on the Zurich exchange. Among previous deals with Buffett, Swiss Re had its property and casualty reserves reinsured with Berkshire last year to cover up to 5 billion Swiss francs in losses. Buffett's Omaha, Neb.-based company invested 3 billion Swiss francs ($2.6 billion) in Swiss Re last year with the possibility to convert the investment into conventional Swiss Re shares in 2012. This would allow Berkshire to control roughly one-quarter of Swiss Re. Berkshire owns several major insurance companies, including Geico and reinsurance giant General Re Corp. It owns a diverse mix of more than 60 businesses -- including furniture, jewelry, candy, natural gas and corporate jet firms.
- TOKYO (AP) -- Japan Airlines is expected to file for bankruptcy protection Tuesday, ending months-long speculation about its fate and launching a massive overhaul to shed the fat and inefficiency that hobbled Asia's biggest airline. With debts of 1.5 trillion yen ($16.5 billion) as of November, the carrier will go down in Japanese corporate history as one of its biggest failures. Its access to Asia, however, is a mouthwatering prize for foreign airlines. The tug-of-war between Delta Air Lines and American Airlines intensified even as bankruptcy loomed, with the latest media reports pointing to Delta as the eventual winner. The bankruptcy filing will most likely be immediately followed by a restructuring plan crafted by a government-backed corporate turnaround body. The government itself will offer assurances of support for the airline's rehabilitation and ongoing operations, the Nikkei financial daily said. Investors Monday braced for a seemingly inevitable removal of the airline's shares from the Tokyo Stock Exchange. The issue, which has lost more than 90 percent of its value over the last week, tumbled another 29 percent Monday to 5 yen. The company is now essentially worthless, with a market capitalization of about 13.7 billion yen ($150 million) -- the price of one Boeing 787 jet. It's a humbling outcome for Japan's once-proud flagship carrier, called JAL for short, which was founded in 1951 and spent its early years owned by the state. Along with Japan's economy, it expanded quickly in the decades after World War II and was privatized in 1987. But it soon became the victim of its own ambitions. When Japan's property and stock bubble of the 1980s burst, risky investments in foreign resorts and hotels undermined its bottom line. JAL also shouldered growing pension and payroll costs, as well as a big network of unprofitable domestic routes it was politically obligated to maintain. More recently, JAL's passenger traffic has slowed amid the global economic downturn, swine flu fears, competition from Japanese rival All Nippon Airways Co. and a spate of safety lapses that tarnished its image. It lost 131.2 billion yen ($1.4 billion) in the six months through September. Its four government bailouts since 2001 only exacerbated JAL's problems, officials now say.
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