Goldman Sachs Sees Danger In US Budget Cuts (FT)
The Republican plan to slash government spending by $61bn in 2011 could reduce US economic growth by 1.5 to 2 percentage points in the second and third quarters of the year, a Goldman Sachs economist has warned. The Goldman analysis also points out that a potential compromise deal with $25bn in spending reductions this year – a more likely scenario – would lead to a smaller drag on growth of 1 percentage point in the second quarter. Thereafter it would fade, with “negligible” impact on US output by the end of the year.
RBS Earnings Disappoint (MarketWatch)
RBS said it swung to a fourth-quarter profit of 12 million pounds ($19 million) from a loss of £765 million a year earlier. The net loss for the year shrank to £1.13 billion from £3.61 billion, but was still worse than the £700 million loss analysts had been expecting. The bank said total impairment losses for the quarter were £2.14 billion. The charges were down 31% compared to a year earlier, but were up by £188 million from the third quarter due to rising losses at its Ulster Bank unit.
Obama Vows to Put Pressure on Qaddafi, Sends Clinton for Talks (Bloomberg)
In his first remarks on the uprising that has split the North African country and prompted a deadly response from Libyan leader Muammar Qaddafi and his loyalists, Obama described “the suffering and bloodshed” as “outrageous” and said those responsible must be held accountable. “These actions violate international norms and every standard of common decency,” Obama said yesterday at the White House after meeting with Clinton.
JP Morgan Raises $1.2 Billion For Digital Growth Fund (WSJ)
According to a regulatory filing, J.P. Morgan’s asset management unit raised $1.22 billion for a fund called J.P. Morgan Digital Growth Fund LP.
Bonuses on Wall Street Declined 8% in 2010, N.Y.'s DiNapoli Says (Bloomberg)
“Cash bonuses are down, but that’s not an indicator of a weakness on Wall Street,” DiNapoli said yesterday in a statement. Wall Street is changing its compensation practices in response to regulatory reforms adopted in the aftermath of the greatest financial meltdown since the Great Depression. Past practices rewarded short-term gains at the expense of long-term profitability.”
Silver Lake Partners Starts Clean Energy Fund (Dealbook)
The private-equity firm, which focuses on investments in the technology industry, has started Silver Lake Kraftwerk, a unit that will take stakes in companies in the energy and resource sectors. The move highlights the popularity of “cleantech” businesses — companies that use technology to improve energy efficiency. Silver Lake’s partners in the new venture are Soros Fund Management, which will invest in the fund, and Adam Grosser, a West Coast technology executive and venture capitalist who will will run the business. Joining Mr. Grosser will be Cathy Zoi, who recently served as the Obama administration’s Acting Under Secretary for Energy and Assistant Secretary for Energy Efficiency and Renewable Energy.
Ex-Yanks Fight Wife Swap Film (NYP)
Former Yankee Mike Kekich is desperate to block Ben Affleck and Matt Damon's movie "The Trade," based on the huge scandal when he and fellow pitcher Fritz Peterson swapped wives in the 1970s. Die-hard Red Sox fan Affleck and his brother, Casey, are rewriting a second version of the script and have hired veteran sportswriters to help reach out to Yankees from that era. But Kekich, who's believed to have created a completely new life and family in New Mexico, is refusing to participate.
Buffett's Berkshire Hathaway Buoyed by Insurance 'Float' (WSJ)
Berkshire is likely to report improved fourth-quarter earnings and an increase in book value, a performance yardstick Mr. Buffett uses to measure the company's growth...Of importance, Berkshire's pool of funds from insurance—something known as "float"—could have swelled to roughly $67 billion at the end of 2010 from $63 billion a year earlier. It is poised to rise further in 2011 despite challenging insurance-market conditions amid the slow economy, analysts say.
GM Posts First Full Year Profit Since '04 (Reuters)
The automaker reported fourth-quarter net income of $510 million after paying dividends on preferred shares, or 31 cents per share, down from the pace of earnings in the first three quarters of 2010 on higher costs to launch new vehicles and a continuing drag from losses in its European operations. After adjusting for a loss of 21 cents per share on the purchase of preferred shares that had been held by the U.S. Treasury, adjusted earnings per share were 52 cents.
UK Court Orders Assange Extradited (WSJ)
A U.K. court ordered WikiLeaks founder Julian Assange be extradited to Sweden to face questioning about sexual assault allegations, dealing a serious blow to the document-leaking site and its founder. The decision ensures that Mr. Assange's efforts to build and promote WikiLeaks will be to some degree detoured in coming months by the possibility that he will face criminal sex charges.