OPEC May Cut Output Again; McClatchy Cans 1,600; Malaysia May Quadruple Stimulus; Public Transportation Ridership at 52-Year High; AIG Warned Feds of "Catastrophic" Collapse; Wells Fargo Shares Rise on Buffett Comments; Capital One Cuts Dividend 87%
The Organization of Petroleum Exporting Countries (OPEC) needs to cut its oil output by an additional 800,000 barrels a day, the group's secretary-general, Abdalla el-Badri, said yesterday (Monday). OPEC will also lower its 2009 demand forecast to a drop of 1 million barrels a day in 2009, a boost from its earlier forecast of 600,000 barrels a day, Bloomberg reported.
Newspaper chain McClatchy Co. (MNI) yesterday (Monday) said it will cut 1,600 jobs, about 15% of its workforce. "The effects of the current national economic downturn make it essential that we move even faster to realign our workforce and make our operations more efficient," said Chairman and Chief Executive Gary Pruitt, who will take a 15% pay cut as well, Reuters reported.
Seeking to avoid recession, Malaysia may introduce measures that will quadruple the size of a previously announced $8 billion stimulus plan. "We seriously need a bold and decisive policy action with more aggressive fiscal and monetary measures," Azrul Azwar Ahmad Tajudin, an economist at Bank Islam Malaysia Bhd. in Kuala Lumpur, told Bloomberg.
Americans used public transportation an estimated 10.7 billion times in 2008, the highest level of ridership in 52 years, according to the American Public Transportation Association. "Where many of the other indicators in our economy are down, public transit is up," APTA Vice President Rosemary Sheridan told Reuters.
American International Group Inc. (AIG) warned of a "catastrophic" collapse -worse than the demise last year of Lehman Brothers Holdings Inc. (OTC: LEMQ) - when it appealed to the Federal Reserve and Treasury for its fourth federal bailout last week, Bloomberg reported. AIG told regulators its collapse might cripple money-market funds, force European banks to raise capital, cause competing life insurers to fail, and wipe out the U.S. taxpayers' stake in the firm.
Wells Fargo & Co. (WFC) shares rose in trading yesterday (Monday) as billionaire investor Warren Buffett said the fourth-largest U.S. bank will emerge "better than ever" from the nation's credit crisis, Reuters reported. Berkshire Hathaway Inc, (BRK.A, BRK.B) was Wells Fargo's largest investor at the end of 2008, with a 7.2% stake. Buffett said Wells Fargo is benefiting from low benchmark interest rates by being able to borrow at low cost.
Capital One Financial Corp. (COF) said yesterday (Monday) that it is reducing its quarterly dividend to 5 cents a share from 37.5 cents beginning in the second quarter, Reuters reported. The company blamed an increase in credit card losses and a dismal economic outlook for cutting its quarterly dividend 87% to save $500 million annually.