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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.
AOL Goes It Alone; Citi to Pay Back TARP Funds; Jim Rogers: Audit, Then Abolish The Fed; Goldman Sachs Adopts "Say on Pay" Policy; GE Gets Contract for World's Largest Wind Farm; Weekly Jobless Claims Rise, Trade Gap Narrows; Gold Bounces Back; U.S. Households' Net Worth Gains in Q3
- The AOL Inc. (NYSE: AOL) and Time Warner Inc. (NYSE: TWX) marriage officially ended yesterday (Thursday), as AOL began trading on the New York Stock Exchange (NYSE) as a separate company. The "new" AOL is focused on generating ad revenue from a network of Web sites that include a lot of original and some syndicated content, as well as serving ads to Web publishers, pitting it squarely against juggernauts like Google Inc. (Nasdaq: GOOG), Yahoo Inc. (Nasdaq: YHOO) and Microsoft Corp. (Nasdaq: MSFT). AOL shares fell in their first day of trading, declining 0.63% to close at $23.52.
- Citigroup Inc. (NYSE: C) is talking with U.S. government officials to pay back $20 billion of the $45 billion in bailout funds under the Troubled Asset Relief Program (TARP), people familiar with the matter told The Washington Post. The bank's efforts follow Bank of America Corp.'s (NYSE: BAC) announcement earlier this week that it repaid all of its $45 billion in TARP funds. The big banks' exit from TARP frees them from the shackles of limited executive compensation as imposed by the Obama administration's "Pay Czar," Ken Feinberg.
- Famed commodities investor Jim Rogers says the U.S. Federal Reserve should be audited and then abolished, backing up a belief of U.S. Rep Ron Paul, R-TX, Rogers told Yahoo Inc.'s (Nasdaq: YHOO) Tech Ticker. The Fed is "the only institution in the world I know of that doesn't expect to be audited," said Rogers, adding that "it's incomprehensible to me these people are saying they have no reason to be audited – they must have done something wrong, must have something to hide."
- Hoping to avert heat from pending "say on pay" legislation in Washington, the top 30 executives at Goldman Sachs (NYSE: GS) will receive their bonuses this year in a special form of company stock. Execs receiving the shares would not be able to sell them for five years, the banking giant said yesterday (Thursday). Still, the announcements cover a miniscule number of Goldman's almost 32,000 employees, and it doesn't cover the company's top revenue generators. Additionally, the Goldman's board of directors approved a "say on pay" policy, which will give shareholders an advisory vote on executive compensation. "We believe our compensation policies are the strongest in our industry and ensure that compensation accurately reflects the firm's performance and incentivizes behavior that is in the public's and our shareholders' best interests," said Chairman and Chief Executive Officer Lloyd Blankfein.
- General Electric Co. (NYSE: GE) won a $1.4 billion contract to supply Caithness Energy LLC with large turbines for the world's largest wind farm to be located in Oregon, the company said. GE will supply 338 2.5-megawatt turbines in 2011 and 2012 and provide 10 years of operational service and maintenance on the wind farm, called Shepherds Flat. Construction is expected to be finished in 2012 and will provide enough power for about 235,000 homes and avert the emission of 1.5 million tons of greenhouse gases that fossil fuel would normally produce, GE said.
- New claims for unemployment benefits in the United States unexpectedly rose last week, jumping 17,000 to 474,000, the Labor Department said. The rise was attributed to seasonal layoffs in industries such as construction and a rebound in applications that were held back during the Thanksgiving holiday week. Analysts were expecting claims to rise to by 460,000, Reuters reported. Meanwhile, the Commerce Department said the trade deficit fell 7.6% to $32.9 billion in October, as a weak dollar helped exports. Analysts were expecting the gap to widen to about $36.8 billion.
- Japan's version of the "Cash for Clunkers" program unfairly excludes autos built in the United States, Detroit's "big three" automakers said in a letter yesterday (Thursday) to the U.S. Trade Representative, the Detroit Free Press reported. "We urge the U.S. government to make clear that it cannot tolerate this outright discrimination, particularly at a time when it has provided substantial direct financial support for Japanese automakers in this market," said a letter written by the American Automotive Policy Council, which includes Ford Motor Co. (NYSE: F), Chrysler Group LLC and General Motors Corp. (NYSE: GRM). The group noted that almost half of the autos sold under the American version of the $3 billion Cash for Clunkers program were made in Japan.
- Gold futures for December delivery yesterday (Thursday) rebounded 0.5% to settle at $1,125.70 an ounce on the New York Mercantile Exchange (NYMEX) after falling for the four previous sessions. "Gold will increasingly take the role of a shelter from … hyperinflation that will be the most likely outcome of these crises," Martin Hennecke, associate director at Tyche Group Ltd. told MarketWatch.com. "Metal is not just a dollar hedge, but going forward, will more likely take a much more significant role of being a hedge against the uncertainties and rising inflation risks of all of the world's major currencies."
- Net worth for households gained 5% to an estimated $53.4 trillion in the third quarter, the U.S. Federal Reserve said yesterday (Thursday), marking the second consecutive quarter of growth. The gains came as U.S. stock holdings rose almost 17% to $7.4 trillion, according to the Fed's quarterly flow of funds report.