Wednesday, December 9, 2009

Quick Notes For the Day - December 9

Treasury extends bailout program to October 2010 - By David Lawder - Reuters - "Treasury Secretary Timothy Geithner on Wednesday moved to extend the government's $700 billion bailout fund into October 2010 and pledged to deploy no more than $550 billion of it."

Britain to Impose a 50% Tax on Banker Bonuses - Chancellor of the Exchequer Alistair Darling said in his annual pre-budget report (outlines budget and deficits) that he wanted to give the banks a choice since all benefited directly or indirectly from massive government aid. "They can use their profits to build up their capital base. But if they insist on paying substantial rewards, I am determined to claw money back for the taxpayer," he said. Essentially, any bonuses above 25,000 pounds would be taxed at 50%.

Industry and banker associations in the UK immediately opposed the idea. Richard Lambert,director general of the Confederation of British Industry, said the threat of top bankers leaving the U.K. is real. "A headline-grabbing tax on bankers' bonuses may have populist appeal, but the government needs to take care not to put the U.K.'s financial services sector at a comparative disadvantage internationally," Lambert said in a statement. Meanwhile, Angela Knight, chief executive of the British Bankers' Association, stated, "The U.K.'s banks have already agreed to observe pay restraints where bonuses are mostly deferred and paid in shares. We are already well ahead of the other G20 countries in doing this." "Only concerted international agreements will succeed in reforming remuneration in the financial sector," she added.

Oil Down After Data - The Energy Information Administration reported crude inventories fell 3.8 million barrels in the week ended Dec. 4, . Gasoline inventories, however, rose 2.2 million barrels, as more gasoline was produced than what's needed. Distillate stockpiles, which include heating oil and diesel, also rose 1.6 million barrels. Crude fell since refiners used more oil to produce petroleum products while crude imports declined.

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