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Ford, UAW Cut Deal; UBS Posts $18 Billion 2008 Loss; JPMorgan CEO Sees 'Modest Signs' of Recovery; China Investment up 26.5% in Jan. & Feb.; Hedge Fund Redemptions Slow; Stanford Takes the Fifth; Fancy Hotel Gigs Over for AIG; LIBOR Increases
- Ford Motor Co. (F) said an agreement with the United Auto Workers Union will save an estimated $500 million per year in operating savings. The deal will also cut average wages and benefits to about $55 per hour this year, Reuters reported.
- Swiss bank UBS AG (UBS) posted an $18 billion loss in 2008, and said its outlook for 2009 is "extremely cautious." "Citibank was saying yesterday that it had exhausted all skeletons in the cupboard and was only left with profits," Roger Nightingale, global strategist at Pointon York Ltd. in London, said in a Bloomberg Television interview. "UBS today said it probably still has some skeletons."
- Jamie Dimon, Chief Executive of JPMorgan Chase & Co. (JPM), said he sees "modest signs" of an economic recovery, pointing to active bond markets. Dimon, speaking at a U.S. Chamber of Commerce economic conference, also threw his support behind a plan to create a U.S. systemic risk regulator, Reuters reported.
- Redemptions from hedge funds slowed in February even as stocks worldwide tumbled amid signs a global recession is deepening, Bloomberg reported. Investors pulled a total of $11 billion, or about a third less than they did in January, after the industry lost about $400 billion from its peak in June to December through market losses and withdrawals, a preliminary Eurekahedge Pte report showed. The February figures were based on 41% of funds that disclosed estimates to the Singapore-based research firm.
- Allen Stanford, the billionaire Texan accused of an $8 billion fraud by U.S. securities regulators, plead to fifth amendment privelege and refused to cooperate in the government's probe, a court filing showed yesterday (Wednesday), Reuters reported. He refused to testify or provide physical evidence to the investigation conducted by the U.S. Securities and Exchange Commission. The government agency has charged Stanford with operating a long-running fraud involving high-yield certificates of deposit. He is also accused of misappropriating $1.6 billion in investor funds.
- A ban on luxury California hotel retreats and strict limits on pay are the order of the day for executives of bailed-out U.S. insurance giant American International Group (AIG), according to new guidelines put into effect recently. AIG is subject to a new employee expense handbook, a special governance committee, and strict limits on executive pay, according to a letter from Federal Reserve Chairman Ben Bernanke to Senator John Kerry, D-MA, that was obtained by Reuters on Tuesday.
- The cost of borrowing dollars is rising, as the London Interbank Offered Rate, or LIBOR, that banks say they charge each other for three-month loans remained at 1.33% yesterday (Wednesday), up from this year's low of 1.08% on Jan. 14, the British Bankers' Association said. Short-term borrowing costs are increasing as banks hoard cash and governments struggle to loosen credit markets after financial firms reported almost $1.2 trillion of writedowns and losses since the start of 2007, Bloomberg reported.