Congress Leaders To Meet With Obama As Budget Cuts Begin (Bloomberg)
Democrats and Republicans are in a standoff over how to replace the cuts totaling $1.2 trillion over nine years, $85 billion of which would occur in the remaining seven months of this fiscal year. Republicans reject Democrats’ call for higher taxes on top earners to replace part of the spending reductions. “Middle-class families can’t keep paying the price for dysfunction in Washington,” Obama said in a statement yesterday. The president has until 11:59 p.m. to issue the order officially putting the cuts into effect. “How much more money do we want to steal from the American people to fund more government?” Boehner said at a news conference in Washington yesterday. “I’m for no more.” The White House meeting follows the Senate’s rejection yesterday of a pair of partisan proposals to replace the spending reductions. No additional congressional action is planned before the start of the cuts, to be split between defense and non-defense spending.
Fiscal Pain to Be Parceled Out Unevenly (WSJ)
Economies in and around the nation’s capital are likely to feel the most pain. Federal spending accounts for about a fifth of the economic output of Washington, D.C., Maryland and Virginia, according to the Pew Center on the States. Other areas likely to be hit hard are Hawaii and Alaska, which have a heavy military presence, and states such as New Mexico, Kentucky and Alabama, which have major defense operations or substantial military contracting.
Struggling Groupon Ousts Its Quirky CEO (WSJ)
Mr. Mason didn’t return calls for comment. In a memo to employees that was by turns tongue-in-cheek and rueful, he said, “After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding—I was fired today.”
‘Girls’ Gone Under (NYP)
“Girls Gone Wild” founder Joe Francis has put his video empire into bankruptcy in a bid to wiggle out of some $16 million in debt — most of it owed to casino magnate Steve Wynn. Wynn’s camp claims Francis owes closer to $30 million, including $2 million for unpaid gambling debts and $7.5 million in defamation damages. Wynn first hauled Francis to court to get him to pay the $2 million debt he racked up during a 2007 gambling binge. He sued again for defamation after Francis blabbed to gossip site TMZ that Wynn threatened to kill him and bury him in the desert. Wynn won two defamation awards for $7.5 million and $20 million, although the latter wasn’t listed in the Chapter 11 filing. Michael Weaver, a spokesman for Wynn Las Vegas, said the judgments are against Francis “personally” and not the company. “Consequently, these recent bankruptcy filings by the GGW companies will not slow our efforts to collect on our judgments against Mr. Francis,” he said.
New York Investigating Bank of America for Mortgages (Reuters)
Bank of America said in a securities filing on Thursday that the New York State Attorney General was investigating the bank over its purchase, securitization and underwriting of home loans.
SEC Scrutinizing Chesapeake Energy (WSJ)
The SEC notified Chesapeake in December that it was stepping up an informal inquiry into Aubrey McClendon’s ability to invest in wells that the company drills, the company disclosed in a regulatory filing. The agency has issued subpoenas for information and testimony to Chesapeake, the country’s second-largest natural-gas producer.
Mornings Not For Erin Burnett, Demanding Sizable Buyout (NYP)
Erin Burnett made her morning-show debut yesterday on CNN with Chris Cuomo for Pope Benedict XVI’s last day on the job. But it doesn’t mean she’s going to end up there permanently, sources tell The Post’s Michael Shain. It seems Burnett is digging in her high heels and refusing the new morning assignment. She has a clause in her contract that requires CNN to air her show in prime time. If new boss Jeff Zucker wants her to get up at 4 a.m., Erin is demanding a sizable chunk of cash — more than her $2.5 million salary — to buy her out of the prime-time clause. Insiders say Zucker believes she should be grateful she’s being offered a marquee job and he has started to look elsewhere for an anchor to partner with Cuomo. Burnett is telling her staff she doesn’t want to go to the morning. “What she means is she doesn’t want to go at the old price,” sniffed a source.
Druckenmiller Sees Storm Worse Than ’08 as Retirees Steal (Bloomberg)
Druckenmiller, 59, said the mushrooming costs of Social Security, Medicare and Medicaid, with unfunded liabilities as high as $211 trillion, will bankrupt the nation’s youth and pose a much greater danger than the country’s $16 trillion of debt currently being debated in Congress. “While everybody is focusing on the here and now, there’s a much, much bigger storm that’s about to hit,” Druckenmiller said in an hour-long interview with Stephanie Ruhle on Bloomberg Television’s Market Makers. “I am not against seniors. What I am against is current seniors stealing from future seniors.” Druckenmiller said unsustainable spending will eventually result in a crisis worse than the financial meltdown of 2008, when $29 trillion was erased from global equity markets. What’s particularly troubling, he said, is that government expenditures related to programs for the elderly rocketed in the past two decades, even before the first baby boomers, those born in 1946, started turning 65.
Lloyds CEO Links Bonus To Stake Sale (WSJ)
Chief Executive António Horta-Osório said he is “very confident” U.K. taxpayers will get their money back, referring to the stake of about 40% the government took in the bank following a series of bailouts at the height of the crisis. He requested that his £1.49 million ($2.26 million) bonus only be paid if the government sells at least a third of its holdings in Lloyds at a share price above 61 pence. The average buy-in price for the U.K. government was 63.1 pence, according to U.K. Financial Investments, a body that manages the government’s stake in Lloyds.
Unemployment Worsens In Euro Zone (WSJ)
Eurostat, the European Union’s statistics agency, said 11.9% of the euro zone’s workforce was unemployed in January, the highest percentage for the 17 countries that make up the currency bloc since records began in 1995. The figure is higher than the jobless rate of 11.8% in December.
Wilbur Ross: Italy Has Choice Of ‘Two Clowns’ (CNBC)
…in the wake of the unresolved Italian election, the WL Ross chairman said he’s worried the next leader of the economically-troubled nation is a choice of two clowns — former Prime Minister Silvio Berlusconi and comedian Beppe Grillo. “One, an acknowledged clown, and one may be inadvertent clown. And until that gets resolved, there’s a great danger that the nice reforms that Mr. Monti put in will just get rolled back.”
Truck crashes on I-80 in Reno, spilling Heinz ketchup ‘everywhere’ (RGJ)
A tractor trailer carrying thousands of bottles of Heinz ketchup crashed on Interstate 80 near the Robb Drive overpass this afternoon, spilling its red contents onto the freeway and snarling traffic in the process. “I have red everywhere on the highway,” said Sgt. Janay Sherven with the Nevada Highway Patrol. “No bodies, no people, just ketchup.” There were no injuries in the accident, which happened when the driver of the semi-truck likely overcorrected to avoid another car while traveling eastbound, she said. The truck hit the center median and then knocked over a light pole that slashed open the left side of the trailer. As a result, thousands of bottles and cans of ketchup were splattered onto the road like a bad horror movie. ‘“The scene looks pretty bad as far as color goes,” Sherven said.