The US Treasury Department has given itself free rein in deciding the rescues of companies in the finance and auto sectors, according to two Treasury statements published this week.
The Treasury on Friday released guidelines for its Targeted Investment Program (TIP), part of emergency legislation enacted in early October to ease a credit crunch from the worst global financial meltdown since the Great Depression.
In the statement, the Treasury outlined the principles of the program under which it rescued ailing banking giant Citigroup on November 23.
Under TIP, the Treasury said it would determine the eligibility of participants and the allocation of resources "on a case-by-case basis."
"Treasury may invest in any financial instrument, including debt, equity, or warrants, that the secretary of the Treasury determines to be a troubled asset, after consultation with the chairman of the board of governors of the Federal Reserve System and notice to Congress," the department said.
Among the criteria in determining a financial firm's eligibility is "whether the institution is sufficiently important to the nation's financial and economic system that a loss of confidence in the firm's financial position could potentially cause major disruptions to credit markets ... or lead to similar losses of confidence or financial market stability that could materially weaken overall economic performance."
Wednesday, the Treasury Department posted on its website a description of its Automotive Industry Financing Program, justifying after the fact its decision to lend a combined 13.4 billion dollars in TARP funds to embattled automakers General Motors and Chrysler to stave off their imminent collapse.
"The objective of this program is to prevent a significant disruption of the American automotive industry that poses a systemic risk to financial market stability and will have a negative effect on the real economy of the United States," it said.
Similar to its approach to the finance industry, the Treasury said it would determine eligibility of participants in the program on a case-by-case basis.
The Treasury announced on December 19 a massive rescue of cash-strapped GM and Chrysler, facing a threat of imminent bankruptcy that could create economic chaos and throw millions out of work across the country.
Source: Agencies
Showing posts with label 2008-2009. Show all posts
Showing posts with label 2008-2009. Show all posts
Saturday, January 3, 2009
Wednesday, December 24, 2008
Google staff will not get bonus this year
Google Inc, owner of the world’s most-used search engine, is giving employees mobile phones instead of cash gifts this year as it reins in costs during the recession, according to a person familiar with the matter.
About 85 per cent of workers will get a handset powered by Google’s Android operating system as a holiday gift, said the person, who asked not to be identified. Google handed out $1,000 cash gifts to most employees last year.
Chief executive officer Eric Schmidt said last month that Google is seeking to control expenses and add fewer jobs as the global slump curbs online advertising growth. T-Mobile USA Inc began marketing the G1 Android phone in October, offering many of the same features as Apple Inc’s iPhone, including Web browsing.
The holiday gift is separate from the performance bonus handed out by the company, the person said.
“The current economic crisis requires us to be more conservative about how we spend our money,” Mountain View, California-based Google said in an internal memo that was posted on technology industry blog Valleywag.
The memo lists 17 countries where the phone won’t work, including Brazil, Russia, India and China. Employees in those countries will receive about $400, the cash value of the phone, Google said in the memo.
Krista Bessinger, a Google spokeswoman, didn’t return a call seeking comment.
Ad spending
Google, which offers employee benefits such as free gourmet lunches and massages, has clamped down on costs as the recession squeezes online ad revenue. Douglas Anmuth, an analyst at Barclays Capital in New York, lowered his forecast for US Internet ad spending last week by 11 per cent to $25.1 billion in 2009.
Google added 519 workers in the third quarter, compared with 2,130 in the same period a year earlier. Google said last month it would reduce the use of contract workers. At the end of the quarter, the company had more than 20,000 regular employees, up from almost 11,000 at the end of 2006.
Technology companies throughout Silicon Valley and beyond are grappling with a slowing economy, forcing them to cut workers and roll back other expenses. Printer and computer maker Hewlett-Packard Co. is freezing salaries to lower expenses, people with knowledge of that decision said. Technology services company Unisys Corp said yesterday it was cutting about 4.5 per cent of its workforce and halting some pay raises.
Half of chief information officers are looking to cut consulting-services costs, 35 per cent want to reduce computer and server expenses, and 23 per cent are seeking savings on software, according to a Goldman Sachs Group Inc survey.
Source: Agencies
About 85 per cent of workers will get a handset powered by Google’s Android operating system as a holiday gift, said the person, who asked not to be identified. Google handed out $1,000 cash gifts to most employees last year.
Chief executive officer Eric Schmidt said last month that Google is seeking to control expenses and add fewer jobs as the global slump curbs online advertising growth. T-Mobile USA Inc began marketing the G1 Android phone in October, offering many of the same features as Apple Inc’s iPhone, including Web browsing.
The holiday gift is separate from the performance bonus handed out by the company, the person said.
“The current economic crisis requires us to be more conservative about how we spend our money,” Mountain View, California-based Google said in an internal memo that was posted on technology industry blog Valleywag.
The memo lists 17 countries where the phone won’t work, including Brazil, Russia, India and China. Employees in those countries will receive about $400, the cash value of the phone, Google said in the memo.
Krista Bessinger, a Google spokeswoman, didn’t return a call seeking comment.
Ad spending
Google, which offers employee benefits such as free gourmet lunches and massages, has clamped down on costs as the recession squeezes online ad revenue. Douglas Anmuth, an analyst at Barclays Capital in New York, lowered his forecast for US Internet ad spending last week by 11 per cent to $25.1 billion in 2009.
Google added 519 workers in the third quarter, compared with 2,130 in the same period a year earlier. Google said last month it would reduce the use of contract workers. At the end of the quarter, the company had more than 20,000 regular employees, up from almost 11,000 at the end of 2006.
Technology companies throughout Silicon Valley and beyond are grappling with a slowing economy, forcing them to cut workers and roll back other expenses. Printer and computer maker Hewlett-Packard Co. is freezing salaries to lower expenses, people with knowledge of that decision said. Technology services company Unisys Corp said yesterday it was cutting about 4.5 per cent of its workforce and halting some pay raises.
Half of chief information officers are looking to cut consulting-services costs, 35 per cent want to reduce computer and server expenses, and 23 per cent are seeking savings on software, according to a Goldman Sachs Group Inc survey.
Source: Agencies
Saturday, December 20, 2008
Will oil, gas spending drop in 2009?
Global spending on oil and gas exploration and production will shrink 12 per cent to $400 billion in 2009 as the steep slide in energy prices and tight credit markets reverse a six-year trend of rising budgets, analysts at Barclays Capital said on Friday.
Those spending cuts threat to curtail growth in oil and gas output, potentially supporting energy prices that have been in a freefall since hitting peaks in July. A steady stream of energy companies have been announcing budget cuts for 2009 as the price of oil slumped this week to its lowest levels in 4-1/2 years, and Barclays said that could be pushing spending even lower than its report showed.
Another analyst agreed, saying companies were being prudent during the economic crunch to protect cash reserves they had built up during the four-year run-up in energy prices. "My guess is the (report) is probably overstating what is going to be spent," said analyst James Halloran of National City Private Client Group, which manages $26 billon in assets.
Analysts said that while the drop in spending threatens to slow down growth in world energy production, the impact depends on how the smaller budgets are used. "It may be that a combination of higher utilization of more efficient rigs and lower costs of drilling will equal or more than compensate for the decline in the absolute amount of capital devoted to upstream expenditures," said Edward Morse, chief economist at LCM Commodities.
He added that oil firms may be negotiating with their suppliers and contractors to lower project costs. The soft energy market has also darkened the world oil supply picture by leading OPEC to announce three rounds of cuts that would trim 4.2 million barrels per day of oil production, or 5 percent of global output.
Spending in the United States is expected to show the sharpest drop, falling 26 percent to $79 billion from the 2008 mark of $106 billion, Barclays analysts James Crandell and James West said in their semiannual report based on a survey of oil and gas companies.
In the United States, Chesapeake Energy, the largest US natural gas producer, is expected to cut spending by 51 percent, the analysts said, while Devon Energy is likely to cut by 44 percent, EOG Resources by 34 percent and SandRidge Energy by 78 percent.
Oil prices peaked above $147 a barrel in July, but have tumbled more than 75 percent since then to trade near $35.75 a barrel as economic weakness hits fuel demand. Shares of oilfield service companies face the greatest risks from the cuts in spending, since it is their drilling rigs, maintenance operations and other activities that energy producers reduce when budgets are slashed.
But those stocks have already been battered, Halloran said, and may see only a limited impact from new reports of spending cuts. The Philadelphia Oil Service index, which includes companies like Schlumberger Ltd, Halliburton Co and Transocean Ltd, has fallen 68 percent since July.
Still, the Barclays analysts said they recommended shares of Weatherford International, Halliburton, Cameron International, Oceaneering International, Tidewater, Dril-Quip, Core Laboratories NV as the best sector bets.
Regions under pressure
Overall, companies' Canadian spending budgets will fall 23 percent to $22 billion, the lowest level since 1999. Husky Energy is likely to cut its spending 47 percent in Canada, while Devon's budget there will fall 71 percent, Talisman Energy by 47 percent and EnCana Corp by 16 percent.
Spending in the United States by Exxon Mobil, the world's largest publicly traded oil company, is likely to drop 17 percent, or $450 million, to $2.15 billion, while its Canadian budget will shrink 14 percent to $375 million. Its spending elswhere will rise 14 percent to $14.98 billion.
The overall drop in spending outside North America is expected to be a more moderate 6 percent to $300 billion. Russia, the UK North Sea, Saudi Arabia and Venezuela were expected to see some of the sharpest spending declines, while the rest of the Middle East, North Africa and Mexico were likely to post increases.
In 2008, spending rose about 22 percent globally, the analysts said. The analysts said the budget forecasts were based on average prices of $58 per barrel for oil and $6.35 per thousand cubic feet for natural gas.
Source; Agencies
Those spending cuts threat to curtail growth in oil and gas output, potentially supporting energy prices that have been in a freefall since hitting peaks in July. A steady stream of energy companies have been announcing budget cuts for 2009 as the price of oil slumped this week to its lowest levels in 4-1/2 years, and Barclays said that could be pushing spending even lower than its report showed.
Another analyst agreed, saying companies were being prudent during the economic crunch to protect cash reserves they had built up during the four-year run-up in energy prices. "My guess is the (report) is probably overstating what is going to be spent," said analyst James Halloran of National City Private Client Group, which manages $26 billon in assets.
Analysts said that while the drop in spending threatens to slow down growth in world energy production, the impact depends on how the smaller budgets are used. "It may be that a combination of higher utilization of more efficient rigs and lower costs of drilling will equal or more than compensate for the decline in the absolute amount of capital devoted to upstream expenditures," said Edward Morse, chief economist at LCM Commodities.
He added that oil firms may be negotiating with their suppliers and contractors to lower project costs. The soft energy market has also darkened the world oil supply picture by leading OPEC to announce three rounds of cuts that would trim 4.2 million barrels per day of oil production, or 5 percent of global output.
Spending in the United States is expected to show the sharpest drop, falling 26 percent to $79 billion from the 2008 mark of $106 billion, Barclays analysts James Crandell and James West said in their semiannual report based on a survey of oil and gas companies.
In the United States, Chesapeake Energy, the largest US natural gas producer, is expected to cut spending by 51 percent, the analysts said, while Devon Energy is likely to cut by 44 percent, EOG Resources by 34 percent and SandRidge Energy by 78 percent.
Oil prices peaked above $147 a barrel in July, but have tumbled more than 75 percent since then to trade near $35.75 a barrel as economic weakness hits fuel demand. Shares of oilfield service companies face the greatest risks from the cuts in spending, since it is their drilling rigs, maintenance operations and other activities that energy producers reduce when budgets are slashed.
But those stocks have already been battered, Halloran said, and may see only a limited impact from new reports of spending cuts. The Philadelphia Oil Service index, which includes companies like Schlumberger Ltd, Halliburton Co and Transocean Ltd, has fallen 68 percent since July.
Still, the Barclays analysts said they recommended shares of Weatherford International, Halliburton, Cameron International, Oceaneering International, Tidewater, Dril-Quip, Core Laboratories NV as the best sector bets.
Regions under pressure
Overall, companies' Canadian spending budgets will fall 23 percent to $22 billion, the lowest level since 1999. Husky Energy is likely to cut its spending 47 percent in Canada, while Devon's budget there will fall 71 percent, Talisman Energy by 47 percent and EnCana Corp by 16 percent.
Spending in the United States by Exxon Mobil, the world's largest publicly traded oil company, is likely to drop 17 percent, or $450 million, to $2.15 billion, while its Canadian budget will shrink 14 percent to $375 million. Its spending elswhere will rise 14 percent to $14.98 billion.
The overall drop in spending outside North America is expected to be a more moderate 6 percent to $300 billion. Russia, the UK North Sea, Saudi Arabia and Venezuela were expected to see some of the sharpest spending declines, while the rest of the Middle East, North Africa and Mexico were likely to post increases.
In 2008, spending rose about 22 percent globally, the analysts said. The analysts said the budget forecasts were based on average prices of $58 per barrel for oil and $6.35 per thousand cubic feet for natural gas.
Source; Agencies
Subscribe to:
Posts (Atom)