plus 4, Recession barely over: UK grows 0.1 pct in Q4 - CNBC

Recession barely over: UK grows 0.1 pct in Q4 - CNBC
Recession over, barely: UK grows 0.1 pct in Q4 - Forbes
Better Place gains $350 million for battery switching stations for ... - San Jose Mercury News
Verizon to cut more than 10,000 jobs - Financial Post
Regions narrows loss, but bad loans hurt results - CNBC

Recession barely over: UK grows 0.1 pct in Q4 - CNBC

Posted: 26 Jan 2010 07:12 AM PST

LONDON - Britain's worst recession since World War II is officially over — but only just.

Gross domestic product rose a feeble 0.1 percent in the final quarter of 2009, the Office for National Statistics reported Tuesday.

That was enough to officially end a grinding 18-month downturn that has seen 1.3 million people lose their jobs. Britain is the last of the major economies to return to growth after the global credit crunch.

But the figure fell short of expectations of a stronger 0.3 to 0.4 percent rise.

Capital Economics economist Jonathan Loynes said the figure, a first estimate that will be revised twice as more data is analyzed, was "a major blow to hopes that the U.K. economy had emerged decisively from recession."

The economy will be a major issue in Prime Minister Gordon Brown's bid to be releected in a general election that must be held by June. Tuesday's growth announcement had been much anticipated — leading the usually media-shy statistics office to hold a rare televised press conference in central London to announce the figure.

The statistics office's chief economist, Joe Grice, acknowledged that the first estimate, which is based on 40 percent of the data used to reach the final figure, could easily be revised up or down by around 0.1-0.2 percent.

A revision of a negative 0.2 percent in the next estimates, due at the end of February and March, would nix Britain's recovery from recession, but Grice declined to comment on the possibility of that outcome.

"We don't know on the evidence we have," he told reporters, noting his job was to analyse data as it became available, rather than make forecasts.

Hetal Mehta, senior economic advisor to the Ernst & Young ITEM Club said that the preliminary estimate appeared to be at odds with more upbeat survey data, including the expected positive impact of a yearlong reduction in sales tax on retail sales.

"There is a strong possibility that the Q4 figures will be revised up," Mehta said.

Loynes agreed that an upward revision was possible. But he said it wouldn't change the big picture of an economy operating far below pre-recession levels and major budget deficits looming.

"With household incomes under pressure, credit in short supply and a major fiscal squeeze looming, the path to a full recovery is going to be a long and bumpy one," he added.

Britain is the last of the major industrial countries to exit recession, with the French and the German economies returning to growth last summer.

It was hit particularly hard by the global credit crunch because of its huge banking and financial-services sector centered in London, which had to be propped up by the government's multibillion-pound bailout of major banks, and higher levels of personal debt among consumers. Like the U.S., it also faced a collapsed real estate bubble.

The fallout cost the country 100 billion pounds ($160 billion) in lost output as GDP shrank 6 percent over the 18 months of the downturn. Some 1.3 million people were laid off, unemployment rose as high as 7.9 percent and around 50,000 families had their homes repossessed.

Statistics office economist Grice said that the fourth quarter showed a uniform picture of small increases across the distribution, hotels and restaurants and government sectors.

Output of manufacturing and other production industries, which have had the deepest slump, rose by 0.1 percent, as did the services sector, which represents around 70 percent of the economy.

Economists had expected GDP to be supported by strong pre-Christmas sales as shoppers tried to beat an increase in the sales tax on Jan. 1, a government-sponsored vehicle scrappage program, the revival of exports and a slow recovery in the massive services sector.

IHS Global Insight economist Howard Archer said he now expected the economy to struggle to grow by more than 1 percent this year, adding that the Bank of England would likely keep interest rates at the current record low of 0.5 percent until the end of the year and possibly beyond.

The central bank's Monetary Policy Committee will take the GDP figures into account when it meets next week to discuss the level of interest rates and whether to extend its program of purchasing assets to boost the money supply.

The 200-billion-pound program is due to be completed by early February, just before the committee's meeting on Feb. 3-4.

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Recession over, barely: UK grows 0.1 pct in Q4 - Forbes

Posted: 26 Jan 2010 08:31 AM PST

LONDON --

Britain's worst recession since World War II is officially over - but a less than convincing return to growth leaves British Prime Minister Gordon Brown's Labour Party on shaky ground ahead of a general election.

Britain is already the last major economy to return to growth after the global credit squeeze, and economists warned of a bumpy road ahead after the Office for National Statistics reported Tuesday that gross domestic product rose a feeble 0.1 percent in the final quarter of 2009.

That first estimate on fourth-quarter growth was enough to officially end a grinding 18-month recession during which 1.3 million people lost their jobs, but fell short of expectations of a stronger 0.3 to 0.4 percent rise.

Over 2009 as a whole, the economy shrank by 4.8 percent, the worst yearly performance since records began in 1949.

The statistics office also acknowledged the possibility that the data could be revised downward in a planned second estimate and third final figure - although an upward change is more likely - which could negate the recession exit.

Even without that, Tuesday's announcement is unlikely to convince voters that Brown's Labour Party has a strong grip on the economy. An election must be held by the start of June.

The British pound dropped and gilt futures rose, factoring in the likelihood that the Bank of England will keep interest rates at record lows for some months and possibly extend its 200 billion pound ($325 billion) asset purchasing program to boost the money supply.

Treasury chief Alistair Darling has been saying for weeks that the British economy had started growing by the end of 2009 and, while he's been proved right, it was only by the skin of his teeth.

"Far from the quick recovery the chancellor has been praying for, the economy is only just staggering back into growth," said Vince Cable, the economy spokesman for the opposition Liberal Democrat party. "The British economy has had the economic equivalent of a heart attack and is still very weak."

Economists now expect Britain to struggle to reach 1 percent growth this year, a sharp contrast to new forecasts from the International Monetary Fund on Tuesday of world economic growth of 4 percent and U.S. growth of 2.7 percent.

Darling said "there is still a lot of uncertainty round the world" and more work to be done in Britain to aid recovery.

"Of course there will be further bumps along the road. Be in no doubt about that," Darling said after the release of the data, which was so keenly anticipated that the usually media-shy statistics office held a rare televised press conference to announce the figure.

"But I am confident that as long as we stick to the path that we have set ... that we are going to see recovery through that back into growth," he added.

Darling also seized the moment to bolster the government's position that it's too early to trim spending to get the country's ballooning budget deficit back under control. That's a key area of disagreement with the main opposition Conservative Party, which, currently well ahead in opinion polls, wants to curb spending much quicker to get a handle on the deficit.

But his cautious optimism wasn't shared by many voters at the sharp end of the downturn.

"I don't think we are out of a recession," said Kim Jamilly, 53, a London shop owner. "Look at the queues for social benefits, the rate of poverty, people in need of food and clothing."

Britain was hit particularly hard by the global credit crunch because of its huge banking and financial-services sector centered in London, which had to be propped up by the government's multibillion-pound bailout of major banks, and higher levels of personal debt among consumers. Like the U.S., it also faced a collapsed real estate bubble.

The fallout cost the country 100 billion pounds ($160 billion) in lost output as GDP shrank 5.9 percent from peak to trough. Some 1.3 million people were laid off, unemployment rose as high as 7.9 percent and around 50,000 families had their homes repossessed.

The statistics office's chief economist, Joe Grice, said that the fourth quarter showed a uniform picture of small increases across the distribution, hotels and restaurants and government sectors.

Output of manufacturing and other production industries, which have had the deepest slump, rose by 0.1 percent, as did the services sector, which represents around 70 percent of the economy.

But economists had expected GDP to be supported by strong pre-Christmas sales as shoppers tried to beat an increase in the sales tax on Jan. 1, a government-sponsored vehicle scrappage program and the revival of exports.

Grice said that the first estimate, which is based on 40 percent of the data used to reach the final figure, could easily be revised up or down by around 0.1-0.2 percent.

"We don't know on the evidence we have," he told reporters, noting his job was to analyze data as it became available, rather than make forecasts.

Hetal Mehta, senior economic advisor to the Ernst & Young ITEM Club, said that the preliminary estimate appeared to be at odds with more upbeat survey data, including the expected positive impact of a yearlong reduction in sales tax on retail sales.

"There is a strong possibility that the Q4 figures will be revised up," Mehta said.

Capital Economics economist Jonathan Loynes agreed that an upward revision was possible. But he said it wouldn't change the big picture of an economy operating far below pre-recession levels and major budget deficits looming.

"With household incomes under pressure, credit in short supply and a major fiscal squeeze looming, the path to a full recovery is going to be a long and bumpy one," he added.

Associated Press Writer Chelsea Arnold contributed to this story.

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Better Place gains $350 million for battery switching stations for ... - San Jose Mercury News

Posted: 26 Jan 2010 07:55 AM PST

With Silicon Valley taking a leading role in the global race to electrify the automobile industry, Better Place might come across as the tortoise to Tesla Motors' hare. Tesla zipped ahead with its sexy Roadster — but now Better Place has scored one of the biggest cleantech investments in history.

Better Place, focused on creating an infrastructure of robots and software to serve a future market of autos powered by "switchable batteries," announced Monday it had secured $350 million in second-round funding from a consortium led by banking giant HSBC to advance its global vision.

The deal valued Better Place at $1.25 billion, with HSBC acquiring about 10 percent of the company for $125 million. Two other finance giants, Morgan Stanley and Lazard Asset Management, also participated as new investors. The transaction, subject to a review by antitrust regulators, is expected to close early this year.

"Today marks the end of an extensive process with the outcome being a decision by one of the world's largest, most conservative banks, HSBC, to take the validating step of investing in a private company intent on bringing innovation to the trillion-dollar automotive and energy industries," Better Place founder Shai Agassi said in a news release.

Better Place, like Tesla, is headquartered in Palo Alto, inviting perceptions of a crosstown rivalry. But Aesopian analogies are misplaced, investors say, because the startups are taking different

tacks to the same revolutionary destination.

"They are complementary in every way," said Alan Salzman, CEO and managing director of VantagePoint Venture Partners, an early investor in both startups.

"Some people like to say Silicon Valley is trying to replace Detroit. Actually, we need Detroit. And we think Detroit needs us as well," said Mike Granoff, another early Better Place investor who also assumed a role within in the company as public policy advocate.

The funding was

announced in London, home to HSBC and much closer to Israel and Denmark. Those countries represent the proving grounds for Better Place and Renault, which are orchestrating a plan to provide both the mass production of electric cars and the infrastructure to support them. Better Place said plans remain on target to bring their technologies to market in late 2011.

Plans also call for the April introduction of a battery-powered taxi service in Tokyo, and rollouts of regional services in Australia and "select North American markets" after the deployments in Israel and Denmark. The ultimate goal is global overhaul of a system long dependent on petroleum.

As part of the HSBC investment, Kevin Adeson, the bank's head of global capital financing, is joining the Better Place board of directors, accentuating the bank's role as a strategic partner. "We expect the Better Place model to be widely adopted across many countries and cities, particularly in those markets with policies strongly favoring electric vehicle adoption," Adeson said in a news release.

Salzman said HSBC's value to Better Place exceeds its financial commitment: "Beyond the capital and validation, they bring a set of resources, networks, relationships and understandings. They will be an active working partner, not just a passive investor."

He singled out HSBC's prominence in China as potential boon to Better Place's ambitious agenda.

Granoff said Better Place is keeping pace with the four-year development timetable that Agassi, a former SAP executive, first unveiled in early 2008 when he announced an agreement with Renault and the nation of Israel. In February, Better Place is scheduled to open a showroom of sorts in Tel Aviv to demonstrate its battery-switching robots and allow visitors to drive electric cars on a test track.

Contact Scott Duke Harris at 408-920-2704.

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Verizon to cut more than 10,000 jobs - Financial Post

Posted: 26 Jan 2010 08:31 AM PST

Verizon Communications Inc., the second-largest U.S. phone company, plans to cut more than 10,000 jobs at its fixed-line unit this year after posting fourth-quarter sales that missed analysts' estimates.

The company plans to keep cuts at the same level as last year, when it reduced 13,000 positions, or about 9% of the unit's workforce, Chief Financial Officer John Killian said on a conference call Tuesday. The business had about 117,000 workers at year-end.

Sales rose 9.9% to US$27.1-billion, missing the US$27.3-billion average of estimates compiled by Bloomberg. Revenue at Verizon's fixed-line service dropped 3.9%, muting mobile- customer gains that beat some analysts' projections. High unemployment hurt sales to companies and damped growth at Verizon's FiOS Internet and TV service, said Christopher King, an analyst at Stifel Nicolaus & Co.

"The economy, first and foremost, we really see no signs of improvement there," said Baltimore-based Mr. King, who advises investors to buy the shares and doesn't own any. "I would have expected to see a little bit more signs of stabilization in the fourth quarter."

Verizon fell 18 cents to US$30.50 at 9:32 a.m. in New York Stock Exchange composite trading. The stock declined 2.3% last year.

The company had a net loss of US$653-million, or 23 cents a share, compared with a profit of US$1.24-billion, or 43 cents, a year earlier. It had a pretax expense of US$3-billion related to workforce reductions.

Excluding some costs, profit fell to 54 cents a share, matching analysts' projections.

Fixed-Line Slump

Sales to global enterprises declined 4.5% from a year earlier. The company has said that its fixed-line unit will recover alongside the unemployment rate, which reached a 26-year high in October, according to U.S. Labor Department data.

Consumers also appeared to cut back. Verizon added 153,000 subscribers each to its FiOS Internet and TV services, missing the 225,000 forecast by Todd Rethemeier, a New York-based analyst at Hudson Square Research.

Earlier this month, Verizon said 2009 earnings per share fell as much as 15 cents, signaling that fourth-quarter profit missed analysts' original estimates. The company coped with a higher pension expense and subsidized phones for new customers.

"It could be a while before there's any uptick in the trend in enterprise, and we're starting the year with a price cut in wireless," said Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York, who rates Verizon "underperform" and doesn't own the shares. "2010 looks like it's going to be another tough year."

Wireless Growth

Verizon Wireless, which the company co-owns with U.K.-based Vodafone Group Plc, added 1.2 million retail subscribers, beating its own goal. Brett Feldman, an analyst at Deutsche Bank Securities in New York, estimated 1 million contract-customer additions for the quarter.

Verizon is focused on building up the wireless business, which accounts for more than half of revenue. The company is adding new devices and cutting prices for some of its plans to encourage customers to buy subscriptions for data use. Verizon is the largest U.S. wireless-phone carrier and is second to Dallas-based AT&T Inc. in total phone customers.

Bloomberg.com

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Regions narrows loss, but bad loans hurt results - CNBC

Posted: 26 Jan 2010 07:12 AM PST

BIRMINGHAM, Ala. - Regions Financial Corp. on Tuesday posted a smaller fourth-quarter loss as the regional bank continued to deal with problem loans, and booked a loss on the sale of investment securities.

For the final three months of 2009, Regions said its loss narrowed to $606 million, or 51 cents per share. That compared with a loss of $6.24 billion, or $9.01 per share, in the 2008 fourth quarter, when the bank recorded a $6 billion goodwill impairment charge to reflect declining value in its banking reporting unit.

The per-share results reflect a 73 percent increase in the number of outstanding shares year over year.

Analysts polled by Thomson Reuters, on average, expected a loss of 34 cents per share.

"We are obviously not pleased with the fourth quarter loss," said Chairman and CEO Dowd Ritter. "But believe that we have taken the appropriate steps to reserve for credit-related problems, proactively improve operating efficiency, bolster our net interest margin, and strengthen customer service and relationships."

Shares fell 32 cents, or 4.9 percent, to $6.23 in morning trading.

Net interest income, or earnings from deposits and loans, fell 8 percent to $850 million, from $924 million in the 2008 fourth quarter.

Non-interest income, or money earned from fees and charges, rose about 2 percent to $718 million, from $702 million in the year-ago period. Regions said the results reflected a $96 million loss on the sale of investment securities, and a $71 million leveraged lease termination gain which was more than offset in taxes.

Regions increased its provision for loan losses — money set aside to cover souring loans — to $1.18 billion, from $1.15 billion, in the final quarter of 2008.

Nonperforming assets, or loans considered seriously past due, rose to $4.41 billion, from $1.72 billion a year earlier.

Net charge-offs, or loans written off as uncollectable, fell 13 percent to $692 million, from $796 million in the 2008 fourth quarter.

The bank opened 246,000 new accounts in the period, as deposits rose to $98.68 billion, from $90.90 billion, a year earlier.

For the year, the company's loss available to common shareholders was $1.26 billion, or $1.27 per share.

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