Sunday, January 30, 2011

Goldman Sachs boosts pay for Blankfein, 4 others Goldman Sachs boosts base salary for CEO Blankfein to $2M; $1.85M for 4 other top executives

NEW YORK (AP) -- Goldman Sachs Group Inc. has more than tripled the salary of CEO Lloyd Blankfein to $2 million, and also granted raises to four other top executives.

The investment bank said in a Securities and Exchange Commission filing on Friday that its board's compensation committee set the new base salary for Blankfein, effective Jan. 1. His previous salary had been $600,000.

The committee set salaries at $1.85 million for four other executives. They are Chief Operating Officer Gary Cohn; Chief Financial Officer David Viniar and Vice Chairmen Michael Evans and John Weinberg.

The filing didn't elaborate on the reasons for the raises. The salaries don't include other forms of compensation the executives can receive, such as stock options.

US, Europe wary of Egypt protest contagion: analysts

US, Europe wary of Egypt protest contagion: analysts


PARIS (AFP) – The United States and Europe are raising pressure for democratic reform in Egypt but face a tricky task amid fears that the violent unrest there could spread far beyond its borders, analysts say.

The United States on Sunday raised pressure on Egypt's long-time President Hosni Mubarak, its closest ally in the Arab world, to make reforms. Secretary of State Hillary Clinton called for an "orderly transition" to democracy.

Denis Bauchard of the French International Relations Institute (IFRI) said US President "Barack Obama has taken the lead, calling for political reform, without sparing Mubarak, and that's quite smart."


Clinton went further on Sunday, saying that Mubarak's move to name his first ever vice-president and a new premier was not nearly enough to answer the concerns of his people.

"We're trying to promote an orderly transition and change that will respond to the legitimate grievances of the Egyptian people which the protests are all about," Clinton told CBS television news.

She urged the government and the military "to do what is necessary to facilitate that kind of orderly transition," apparently implying that Mubarak, who has ruled for nearly 30 years, should not run in September's presidential polls.

Britain, France and Germany also spoke out jointly on Saturday over the street clashes that have left at least 125 people dead.

"We urge President Mubarak to embark on a process of transformation which should be reflected in a broad-based government and in free and fair elections," the three countries said in a statement.

Previously, the Europeans and Americans had acted with "great caution" that was tantamount to "support for the regime", said Didier Billion, an expert at Institute for International and Strategic Relations (IRIS) in Paris.

"One of the lessons here is that we need to be on the right side of history in these countries," said US Senator John McCain, who lost his 2008 White House bid to Obama.

"We need to do a better job of emphasising and arguing strenuously for human rights," he said on the CNN news channel.

"You can't have autocratic regimes last forever. The longer they last, the more explosive the results."

Paris had also taken a cautious line during similar unrest in its former colony Tunisia, not turning against authoritarian president Zine El Abidine Ben Ali until after he was driven out.

The Tunisian uprising set a precedent for the region that has now recurred in Egypt -- a bigger, more strategically important country.

Another IRIS analyst, Pascal Boniface, said Tunisia created a "generic model" for challenging authoritarian governments, which could be reprised "in Africa, Asia, anywhere repressive powers dominate and appear worn out".

Obama made a key speech in Cairo in 2009, shortly after his election, pledging to reach out to the Arab world.

Since then however, optimism has waned amid setbacks to US efforts for Israeli-Palestinian peace.

Now the stakes are high for the United States in managing the crisis in its top regional ally Egypt. Kuwait and Saudi Arabia have backed Mubarak.

"Egypt remains a major pawn in the Middle East," said Billion. The West fears "a domino effect if Mubarak falls, with a protest movement that could grow across the world."

With long-time leaders such as Mubarak, Libya's Moamer Kadhafi, Ali Abdallah Saleh of Yemen and numerous leaders in sub-Saharan Africa racking up decades in power, observers see potentially historic change looming.

"The African continent is at a special moment in its history, with 22 presidential and legislative elections due in the coming year," said one senior French official who asked not to be named.

"It is not a good time for dictators," he added. "This could be contagious."

Egypt's Mubarak faces crisis, protest defies curfew

CAIRO (Reuters) – President Hosni Mubarak, clinging on despite mass popular demands for an end to his 30-year rule, met on Sunday with the generals who may hold the keys to Egypt's future, but in Cairo protesters defied a curfew.

As his key ally the United States called for an "orderly transition," Mubarak's disparate opponents, including the banned Muslim Brotherhood, rallied behind retired international diplomat Mohamed ElBaradei to lead possible talks with the army on organizing a handover of power to a national unity coalition.

"I ask of you patience, change is coming in the next few days," Baradei told thousands of demonstrators on Cairo's Tahrir Square after dark. "You have taken back your rights and what we have begun, cannot go back."

He added: "We have one main demand -- the end of the regime and the beginning of a new stage, a new Egypt."

"The people want the regime to fall!" thousands chanted as troops looked on patiently from their U.S.-built battle tanks.

Baradei, 68, won a Nobel peace prize as head of the United Nations' nuclear body. Though little known to many Egyptians, he had hoped to run in a presidential election in September.

U.S. Secretary of State Hillary Clinton told Fox News: "We want to see an orderly transition so that no one fills a void.

"We also don't want to see some takeover that would lead not to democracy but to oppression and the end of the aspirations of the Egyptian people."

For a week, since Egyptians inspired by the overthrow of the aging strongman in Tunisia began a push for change, it has been unclear who might emerge as an alternative to Mubarak and, more widely, to the military class which has run Egypt since 1952.

MUSLIM BROTHERHOOD

A senior figure in the Muslim Brotherhood, the banned Islamist group that has long seemed the strongest single force against Mubarak, said it backed ElBaradei as negotiator.

The Brotherhood has stayed in the background although several of its senior officials have been rounded up. The government has accused it of planning to exploit the protests.

Some of its leaders walked free from jails on Sunday.

As many as 10,000 people protested in Tahrir Square, a rallying point in the center of Cairo, to express anger at poverty, repression, unemployment and corruption -- themes that are rumbling across the Arab world after first Tunisia and now the most populous Arab state Egypt have been plunged in unrest.

As the curfew started and was ignored, warplanes and helicopters flew over the square. By late afternoon more army trucks appeared in a show of military force but no one moved.

"Hosni Mubarak, Omar Suleiman, both of you are agents of the Americans," shouted protesters, referring to the appointment on Saturday of intelligence chief Suleiman as vice president, the first time Mubarak has appointed a deputy in 30 years of office.

It was the position Mubarak, 82, held before he become president and many saw the appointment as ending his son Gamal's long-predicted ambitions to take over and as an attempt to reshape the administration to placate reformists.

Mubarak held talks with Suleiman, Defense Minister Mohamed Hussein Tantawi, Chief of Staff Sami al-Anan and others.

Clearly those in Tahrir Square did not wish to see Mubarak's ruling structure replaced by a military line-up featuring his closest associates. "Mubarak, Mubarak, the plane awaits," they said. There was also a big protest in Alexandria.

SHOCKWAVES AROUND MIDDLE EAST

The turmoil, in which more than 100 people have died, has sent shock waves through the Middle East where other autocratic rulers may face similar challenges, and unsettled financial markets around the globe as well as Egypt's allies in the West.

In Tunisia, the detonator of the regional movement, an exiled Islamist leader was welcomed home by thousands on Sunday. In Sudan, Egypt's southern neighbor, police beat and arrested students taking part in anti-government protests in Khartoum.

In Egypt, the military response to the crisis has been ambivalent. Troops now guard key buildings after police lost control of the streets, but have neglected to enforce a curfew, often fraternizing with protesters rather than confronting them.

It remains to be seen if the armed forces will keep Mubarak in power, or decide he is a liability to Egypt's national interests, and their own. It was also unclear if Mubarak had decided to talk with the generals or if he was summoned by them.

It was Tunisian generals who persuaded former President Zine al-Abidine Ben Ali to flee last month after weeks of protests.

In Suez, on the canal, one senior local officer, Brigadier Atef Said said his troops would give protesters a free voice:

"We will allow protests in the coming days," he told Reuters. "Everyone has the right to voice their opinion."

The crisis deepened on Sunday after police had disappeared from the streets. Egyptians faced lawlessness on the streets with security forces and citizens trying to stop looters.

Through the night into Sunday, Cairo residents armed with clubs, chains and knives formed vigilante groups to guard neighborhoods from marauders after the unpopular police force withdrew following the deadly clashes with protesters.

Security sources said police would be back on Monday.

TANKS SPRAYED WITH SLOGANS

In surreal scenes, soldiers from Mubarak's army stood by tanks covered in anti-Mubarak graffiti: "Down with Mubarak. Down with the despot. Down with the traitor. Pharaoh out of Egypt."

Asked how they could let people scrawl anti-Mubarak slogans on their mostly American-made vehicles, one soldier said: "These are written by the people, it's the views of the people."

Egypt's armed forces -- the world's 10th biggest and more than 468,000-strong -- have been at the heart of power since army officers staged the 1952 overthrow of the king. It benefits from about $1.3 billion a year in U.S. military aid.

The army appears to be showing restraint and there is no talk at this time about halting U.S. aid to Egypt, Clinton said.

The government has interfered with Internet access and mobile phone signals to try and disrupt demonstrators' plans.

On Sunday, it ordered pan-Arab channel Al Jazeera to shut down and cut off its local broadcasts.

The tumult was affecting Egypt's tourist industry and the United States and Turkey said they were offering evacuation flights Other governments advised people to leave Egypt.

The United States and European powers were busy reworking their Middle East policies, which have supported Mubarak, turning a blind eye to police brutality and corruption in return for a bulwark against first communism and now militant Islam.

Israeli Prime Minister Benjamin Netanyahu said Israel was closely watching events in Egypt, the first Arab country to sign a peace treaty with the Jewish state in 1979.

"This is the Arab world's Berlin moment," said Fawaz Gerges of the London School of Economics, comparing the events to the fall of the Berlin Wall in 1989. "The authoritarian wall has fallen, and that's regardless of whether Mubarak survives."

(Additional reporting by Dina Zayed, Marwa Awad, Shaimaa Fayed, Sherine El Madany, Yasmine Saleh, Alison Williams and Samia Nakhoul in Cairo, Alexander Dziadosz in Suez, Arshad Mohammed in Washington and Peter Apps, Angus MacSwan and William Maclean in London; Writing by Peter Millership, editing by Alastair Macdonald)

Wednesday, January 26, 2011

How recession change us

AP Source: Ally Financial meets with banks on IPO AP Source: Ally Financial meets with investment bankers this week to choose team for IPO

AP Source: Ally Financial meets with banks on IPO

AP Source: Ally Financial meets with investment bankers this week to choose team for IPO


DETROIT (AP) -- A person briefed on the matter says Ally Financial Inc. is meeting with investment bankers this week to choose the team that will handle the initial public stock offering for the former financing arm of General Motors.

Ally is now 74 percent owned by the U.S. government because of a $17.2 billion bailout during the financial crisis. The government is hoping to get some of its money back with an IPO.

The person says bankers are making presentations to Ally on Wednesday and Thursday to get the underwriting business. The person says banks will make suggestions about the size and timing of any stock offer. The person did not want to be identified because the plans are not public.

General Motors declares quarterly dividend General Motors declares quarterly dividend of about 64.7 cents per share

DETROIT (AP) -- General Motors says its board is declaring a quarterly dividend of about 64.7 cents per share on its Series B mandatory convertible junior preferred stock.

The dividend will total $64.7 million. It is payable March 1 to those who own stock as of Feb. 15.

The automaker sought bankruptcy protection in 2009 and accepted nearly $50 billion in government help. The new GM had an initial public offering of stock in November.

Its global sales grew 12 percent last year, and it turned a $4.2 billion profit in the first nine months of the year. Financial results for the final three months of 2010 aren't in yet, but more profit is expected.

Dow breaks through 12,000, first time since 2008 Dow Jones industrial average trades above 12,000 for the first time since June 2008

Dow breaks through 12,000, first time since 2008

Dow Jones industrial average trades above 12,000 for the first time since June 2008


NEW YORK (AP) -- The Dow Jones industrial average broke through 12,000 for the first time in two and half years Wednesday but edged lower in afternoon trading.

Investors were encouraged by President Barack Obama's call to overhaul taxes on businesses and a jump in new home sales in December. The gains were held back by weak profit forecasts from Boeing Co., Xerox Corp. and other big names.

Obama said in his State of the Union address late Tuesday that he wanted to close corporate tax loopholes and use the additional revenue to lower tax rates on businesses for the first time in 25 years.

That change would be popular with business leaders from both political parties. The U.S. has some of the highest corporate tax rates in the industrialized world.

"If he can take steps to simplify the tax codes, be it for individuals or corporations, I think it would be a lot easier to do business," said Jack Ablin, chief investment officer at Harris Private Bank.

The Dow Jones industrial average rose 7, or 0.1 percent, to 11,984 in afternoon trading. It went as high as 12,020 earlier. The last time the Dow traded above or closed above 12,000 was in June 2008.

Boeing was the worst performer of the 30 stocks in the Dow average. Boeing fell 3.3 percent after saying its 2011 profit would be hurt by delays to its new 787 aircraft and higher pension expenses.

Xerox fell 8 percent. The company issued a weak earnings forecast and said its longtime chief financial officer, Lawrence A. Zimmerman, was retiring.

Eastman Kodak Co. fell 8.2 percent. The company's income fell 95 percent on weaker revenue from its camera business and lower royalties from digital imaging.

The Standard & Poor's 500 index rose 7, or 0.6 percent, to 1,298. The last time the S&P index closed above 1,300 was Aug. 28, 2008.

The Nasdaq composite index rose 22, or 0.8 percent, to 2,742.

The Commerce Department reported that new home purchases rose 17.5 percent in December compared with November. Despite the strong one-month jump, new home sales for all of 2010 fell to the lowest level on records going back 47 years.

Bond prices fell, sending their yields higher. The yield on the 10-year Treasury note rose to 3.40 percent from 3.34 percent late Tuesday.

Later in the day, the Federal Reserve will release a statement from its latest policy meeting. It's not expected to announce any changes to interest rates or the Fed's $600 billion bond-buying program.

Toyota recalls 1.7 million cars for fuel leaks In latest hit to quality image, Toyota recalls 1.7 million cars because of possible fuel leaks

Toyota recalls 1.7 million cars for fuel leaks

In latest hit to quality image, Toyota recalls 1.7 million cars because of possible fuel leaks


TOKYO (AP) -- Toyota recalled nearly 1.7 million cars worldwide Wednesday for possible fuel leaks, the latest in a ballooning number of quality problems that could further tarnish the company's reputation in the United States.

The recalls are mostly in Japan, but include Lexus IS and GS luxury sedans sold in North America. That's where the world's No. 1 car company faces the biggest challenges in winning back customer trust.

U.S. dealers will inspect cars to see if loose fuel pressure sensors caused leaks. There were no accidents suspected of being caused by those problems, according to Toyota. The car maker has received 77 complaints overseas, 75 of them in North America, and more than 140 in Japan.

The latest quality hitch follows a spate of recalls that began in late 2009, mostly in North America, which now cover more than 12 million cars and trucks. The recalls involve defective floor mats and gas pedals that get stuck, some of them suspected of causing unintended acceleration.

Wednesday's recalls come exactly one year after Toyota stopped selling eight models in the U.S. because of unintended acceleration problems. The sales suspension affected 60 percent of Toyota's lineup in the U.S., and was the first of four sales halts last year. .

Koji Endo, auto analyst with Advanced Research Japan Co. in Tokyo, said the newest recalls will cost Toyota about 20 billion yen ($240 million), but won't hurt its earnings much.

"But there is that perception of here we go again, and that hurts Toyota's image, especially in North America," he said.

The biggest damage to Toyota's image has been in the U.S. where its response to safety problems was seen as slow. The company's U.S. sales lagged last year despite an industry recovery. Some believe that Toyota's relentless drive for growth hurt quality.

The company has lost some potential U.S. customers: A survey done by consumer website Edmunds.com showed that 17.9 percent of all car shoppers last month were considering a Toyota, a 3.8 percent point drop from a year earlier. That drop in consideration could be blamed on Toyota's recalls, as well as its aging lineup.

"Toyota needs to overcome not just the PR damage sustained by last year's recalls, but also the reality that many of its models are stale," said Jessica Caldwell, director of pricing and industry analysis for Edmunds.

Toyota has stayed popular in Japan, partly because government incentives for green vehicles sent sales of its Prius gasoline-electric hybrid booming.

The company is likely trying to be aggressive with recalls and so the latest one is not a sign that quality is taking another dive at the company, Endo said.

To help respond to customer complaints and investigate quality concerns quickly, the company recently opened two new field offices, in Houston and Jacksonville, Fla. It plans to open another in Denver by the end of the first quarter, and already has offices in New York and San Francisco. The offices are part of Toyota's plan to improve global quality and communication within the company.

In the latest recalls, the largest number of the affected vehicles was in Japan at nearly 1.3 million -- the second-largest auto recall in that nation's history. It involved two different problems.

In one of the problems announced Wednesday, an improper installation of a sensor to measure fuel pressure may cause the device to loosen as a result of engine vibrations, and possibly cause fuel to leak, the company said. That problem also affects 280,000 Lexus cars sold abroad, most in North America.

Included under that recall are the 2006 through 2007 Lexus GS300/350, 2006 through early 2009 Lexus IS250, and 2006 through early 2008 Lexus IS350 sold in the U.S.

Lexus dealers will inspect the vehicles for fuel leakage and will tighten the sensor, if nothing is leaking. If a leak is confirmed, the gasket between the sensor and the delivery pipe will be replaced, it said.

That same problem was also found in the Crown and Mark X models sold in Japan.

The second problem, which affects 141,000 Avensis sedans and station wagons sold in Europe, and New Zealand, was caused by irregular work on the fuel pipe, which may cause cracks and fuel leakage, Toyota said.

That problem was also found in 16 models sold in Japan, including the Noah subcompact, RAV4 sport-utility vehicle and Wish cars.

Toyota also recalled 6,000 trucks made by group company Daihatsu Motor Co., which were sold under the Toyota brand in Japan, for a problem with a metal part connecting a spare tire to the bottom of the truck. The tire could come loose and fall on the road, Toyota said.

Chief Executive Akio Toyoda, the grandson of the automaker's founder, has vowed to regain trust and respond quicker to customer needs.

Toyota shares fell nearly 2 percent to close at 3,400 yen ($41) in Tokyo.