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With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world.
Volt MPG to Hit Triple Digits; Citi Details TARP Spending; Soros: U.S. Economy Has Bottomed; CIT Again On the Cusp of Bankruptcy, Again; Huron Under Investigation by the SEC; Madoff Aide Pleads Guilty
- General Motors Corp. (NYSE: GRM) said yesterday (Tuesday) that its Chevrolet Volt is expected to achieve city fuel economy of 230 miles per gallon, based on development testing. The Volt is powered by an electric motor and battery pack with a 40-mile range. After that, a small internal combustion engine kicks in to generate electricity for a range of up to of 300 miles. "From the data we've seen, many Chevy Volt drivers may be able to be in pure electric mode on a daily basis without having to use any gas," said GM Chief Executive Officer Fritz Henderson.
- Under pressure to disclose how it is using its taxpayer-funded bailout, Citigroup Inc. (NYSE: C) yesterday (Tuesday) released a report detailing how it has allocated more than $50 billion of capital. The bank indicated that it had already put $15.1 billion of the money to work and approved an additional $35.7 billion for future projects for a total of $50.8 billion in funds committed. Among Citigroup's new initiatives is $4 billion to lend for municipal letters of credit and $2 billion for mortgage originators.
- Billionaire financier George Soros said yesterday (Tuesday) that the U.S. economy has hit bottom and the current quarter will see positive growth due to the government's stimulus spending, Reuters reported. "I think it (the stimulus) has made a difference, the economy has actually bottomed and I think we are facing a positive quarter, and I think that is largely due to the stimulus," he said in an interview with Reuters Television in New York.
- Shares of CIT Group Inc. (NYSE: CIT) fell nearly 20% yesterday (Tuesday) on fears the troubled lender could be forced into bankruptcy. CIT in July arranged $3 billion in secured financing with a group of bondholders. At that time, CIT commenced a cash tender offer for its $1 billion of floating senior notes due Aug. 17 outstanding. "If the pending tender offer is not successfully completed, and the company is unable to obtain alternative financing, an event of default under the provisions of the credit facility would result and the company could seek relief under the U.S. Bankruptcy Code," the company said.
- Huron Consulting Group Inc. (Nasdaq: HURN) is being investigated by the Securities and Exchange Commission (SEC) for acquisition-related payments, Reuters reported. A board audit committee earlier this month discovered shareholders of four businesses that Huron acquired between 2005 and 2007 redistributed portions of their acquisition-related payments among themselves and to certain Huron employees.
- Frank DiPascali, the finance chief at Bernard Madoff's investment advisory business, yesterday (Tuesday) pleaded guilty to helping his boss carry out a $65 billion Ponzi scheme, Bloomberg reported. "I knew I was participating in a fraudulent scheme," DiPascali told U.S. District Judge Richard Sullivan. "I knew everything I did was wrong, and it was criminal, and I did it knowingly and willfully. I accept complete responsibility for what I did. I apologize to every victim and to my family and the government. I am very, very, very sorry."