KeNo's Housing and Economic Portal: Monday January 16 Housing and Economic stories

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TOP STORIES:

Fed Report Says Fannie, Freddie Losses May Aid Housing Recovery - (www.bloomberg.com) A report from Federal Reserve Chairman Ben S. Bernanke called the weakness in the housing market a “significant barrier” to U.S. economic health and said Fannie Mae and Freddie Mac might have to bear greater losses to stoke a broader recovery. The study, delivered today to leaders of the Senate Banking and House Financial Services committees, noted “tension” between aiding the economy and minimizing losses of the failed government-sponsored enterprises, which depend on taxpayer aid for survival. “Some actions that cause greater losses to be sustained by the GSEs in the near term might be in the interest of taxpayers to pursue if those actions result in a quicker and more vigorous economic recovery,” according to the study.

Wall Street Journal report says Kodak might file for bankruptcy in coming weeks - (www.washingtonpost.com) An uncomfortable suspicion that an icon of American business may have no future pushed investors to dump stock in Eastman Kodak Co. Wednesday. The ailing photography pioneer’s shares fell to a new all-time low after the Wall Street Journal reported that Kodak is preparing for a Chapter 11 filing “in the coming weeks” should it fail to sell a trove of 1,100 digital-imaging patents. Analysts have said the patents could fetch $2 billion to $3 billion, but no takers have emerged since Kodak started shopping them around in July. In November, the 131-year-old company said it could run out of cash in a year if it didn’t sell the patents. Even as it looked to a future rooted in its emerging printer business, the company was reporting a third-quarter loss of $222 million — its ninth quarterly loss in three years — and it said its cash reserves had fallen 10 percent in three months.

Pepsi mulls 4,000 job cuts: report - (www.reuters.com) PepsiCo Inc is considering cutting about 4,000 jobs and reducing pension contributions in order to boost its earnings, the New York Post said, citing sources close to the situation. Pepsi currently offers a pension plan and a scheme where it matches contributions to 401(k) retirement savings accounts, and believes offering both is more generous than its peers, a source told the Post. Eliminating the 401(k) match would save Pepsi $75 million, according to the newspaper. The job cuts, amounting to a little more than 1 percent of the company's payroll, will include a modest number of workers at its Purchase, New York headquarters, the Post said. Pepsi employs about 300,000 workers globally, 2,000 of whom are in Purchase, according to the NY Post.

China’s Stocks Slide to Lowest Since March 2009 as Small Companies Plunge - (www.bloomberg.com) China’s stocks (IFB1) fell to the lowest level since March 2009 on concern the European debt crisis will curb exports and a potential cash crunch before the Chinese new year holidays may boost lending costs for small companies. China Cosco Holdings Co. (601919), Asia’s largest shipping line, dropped 4.4 percent after Luxembourg’s prime minister said the European Union is facing a recession of unknown scope. Ufida Software Co. plunged 8 percent, leading declines for technology stocks, the worst performing industry. Shanghai Pudong Development Bank Co. (600000) paced gains for lenders after the central bank refrained from selling three-month bills and investors speculated the central bank will cut lenders’ reserve requirements this month.

Star Wall Street Internet Analyst Was Fired From Hedge Fund For Refusing To Use Inside Information - (www.businessinsider.com) Anyway, here's one noteworthy detail in the Mahaney profile, one that can be tucked away in the "integrity wins in the end" file: Mr. Mahaney, age 46, spent the original dot-com bubble of the late '90s at Morgan Stanley as a junior analyst working with Mary Meeker, then a star Internet analyst. He then did a stint at hedge fund Galleon Group, whose founder was imprisoned after an insider-trading conviction. One person familiar with the matter says Mr. Mahaney was fired from Galleon for "not getting enough edge" on stocks. Catch that? Mahaney was fired from Galleon for "not getting enough edge." Know what the synonym for "edge" is in this case? "Information." So it seems reasonable to translate that sentence as: "Mahaney was fired for refusing to obtain and use the same illegal inside information as his boss Raj Rajaratnam." It sucks to be fired, for any reason. But if there's ever a situation that reveals that some things are worth getting fired for, this is it. Mahaney is now enjoying his reign as one of Wall Street's top Internet analysts.