Dutch bank rescue shows Europe's problems continue

Dutch finance minister Jeroen Dijsselbloem said the rescue will increase government debt

LONDON (CNNMoney)

The Dutch government was forced to rescue SNS REALL to protect savers' deposits after the banking and insurance group racked up huge losses on real estate lending. Attempts to find a private buyer or investor failed.

"I therefore had to use the instrument of last resort, which is nationalization," said Finance Minister Jeroen Dijsselbloem, in a statement. "Nationalization would safeguard financial stability and prevent serious damage to the economy."

The government's intervention comes a day after two of Europe's biggest banks -- Santander and Deutsche Bank -- announced huge writedowns in a bid to reduce their exposure to the region's economic woes and move on from past mistakes.

More banks cleaned house Friday. Spain's second biggest lender BBVA reported a 44% drop in earnings in 2012 due to hefty real estate provisions and rival CaixaBank's earnings fell 78%. France's Credit Agricole announced a €2.7 billion impairment charge, including €852 million related to retail banking in Italy.

Related: Jury still out on eurozone - Draghi

While the investments of shareholders and subordinated creditors at SNS REALL will be wiped out, the rescue will still cost the Dutch state about €3.7 billion in capital injections and writedowns, pushing its budget deficit further above EU targets.

That will embarrass Dijsselbloem as he takes over as chairman of the group of finance ministers charged with policing fiscal policy among the 17 eurozone nations, and anger taxpayers who paid for a €40-billion bailout of the Dutch financial sector in 2008.

"I can well understand the aversion many people will feel because once again, a large sum of taxpayers' money is required," Dijsselbloem said. "This is why I want the private sector to contribute as much as possible."

A one-time levy of €1 billion will be imposed on Dutch banks in 2014 to help pay for the rescue.

Dijsselbloem said the EU needed to legislate to ensure that banks could be broken up more easily and that the cost of future rescues be borne largely by the private sector.

Related: Scandal at world's oldest bank

A working group led by European Central Bank governing council member Erkki Liikanen last October recommended separating investment and retail banking activities to protect taxpayers and savers.

But France has since countered with its own proposal that would stop short of forcing legal separation. So far, the EU has made only small steps toward a banking union -- agreement on a eurozone mechanism for winding up failing banks and protecting depositors is probably years away.

The EU, U.S. and U.K. are all discussing different ways to regulate banks to avoid costly bailouts in the future, leading some industry figures to warn that policymakers are creating unnecessary complexity, and potentially risk, with a confused approach.

UBS Chairman Axel Weber said last week the industry needed a global standard on the issue of separating customer deposits from trading activities.

First Published: February 1, 2013: 2:17 PM ET

14.44 | 0 komentar | Read More

Google stock hits all-time high

Click chart to see more information about Google's stock.

NEW YORK (CNNMoney)

Google's stock rose 2.6% to close at $775.60, topping the all-time high of $774.38 it reached in October 2012. The stock went as high as $776.60.

Google (GOOG, Fortune 500) has been the subject of a three-year European Union probe into its search business. Despite emerging scot free from a similar multi-year investigation in the United States last month, many industry analysts and antitrust experts had expected the European probe to be harder for Google to wriggle out of.

Antitrust laws are stricter in Europe, and Google maintains a 90% share of the search market there -- significantly higher than the two-thirds share it commands in the U.S.

The European Commission has only said that its reviewing Google's proposals that the company delivered to it on Friday, and no settlement has yet been reached. But if the solutions Google proposes are in any way similar to the voluntary concessions Google offered in the U.S., they won't have a noticeable impact on the company's business.

Google's stock has been on a tear during the past few months. The company continues to activate a million Android devices a day, has successfully expanded into the broadband, cable and wireless arenas and remains the dominant search engine. Despite more competition from Microsoft (MSFT, Fortune 500) and Facebook (FB), neither has yet threatened Google's top spot.

Google investors apparently also don't seem to be too nervous about any changes that ex-Googler Marissa Mayer might be making at Yahoo. Mayer left Google to become CEO of Yahoo (YHOO, Fortune 500) last year, and even though she has won praise for changes she's been making to try and turn around Yahoo, the company still has a long way to go before it challenges Google for the online advertising market lead.

The surging price of Google is also in stark contrast to the big decline in Apple (AAPL, Fortune 500). Shares of Apple have plunged more than 35% since hitting an all-time high last September.

Related story: 5 reasons why Google has its mojo back

But concerns remain about Google, particularly with its mobile business. The amount that advertisers pay Google for clicks has continued to slip, and Google keeps losing money on its Motorola unit.

Google CEO Larry Page has said that he doesn't expect the cost-per-click issue to be a "long-term problem," but he also hasn't indicated when he thinks this figure would be more closely aligned with overall click growth.

First Published: February 1, 2013: 1:14 PM ET

14.44 | 0 komentar | Read More

Auto makers post strong sales in January

NEW YORK (CNNMoney)

The world's major car makers reported strong U.S. sales for the month of January on Friday, providing further indication that demand for new vehicles that lagged amid the weak economic recovery in the past few years is starting to return.

January vehicle sales came in at a seasonally adjusted annual rate of 15.3 million, according to Autodata, up from 14.0 million a year ago.

General Motors (GM, Fortune 500) led the way among the top four U.S. automakers with 194,699 vehicles sold, up 16% versus a year prior. Ford (F, Fortune 500) had 166,501, a 22% gain. Toyota (TM) sold 157,725 vehicles, up 27% versus a year prior, and Chrysler Group had 117,331, a gain of 16%.

Related: Consumer Reports says Toyota and Ford are best-liked car brands

Sales remained in high gear in January even after a strong December. Overall, industry sales rose 13% in 2012 to 14.5 million, the biggest increase since 1984.

CNNMoney's Chris Isidore contributed reporting.

First Published: February 1, 2013: 1:24 PM ET

14.44 | 0 komentar | Read More

Dutch bank rescue shows Europe's problems continue

Dutch finance minister Jeroen Dijsselbloem said the rescue will increase government debt

LONDON (CNNMoney)

The Dutch government was forced to rescue SNS REALL to protect savers' deposits after the banking and insurance group racked up huge losses on real estate lending. Attempts to find a private buyer or investor failed.

"I therefore had to use the instrument of last resort, which is nationalization," said Finance Minister Jeroen Dijsselbloem, in a statement. "Nationalization would safeguard financial stability and prevent serious damage to the economy."

The government's intervention comes a day after two of Europe's biggest banks -- Santander and Deutsche Bank -- announced huge writedowns in a bid to reduce their exposure to the region's economic woes and move on from past mistakes.

More banks cleaned house Friday. Spain's second biggest lender BBVA reported a 44% drop in earnings in 2012 due to hefty real estate provisions and rival CaixaBank's earnings fell 78%. France's Credit Agricole announced a €2.7 billion impairment charge, including €852 million related to retail banking in Italy.

Related: Jury still out on eurozone - Draghi

While the investments of shareholders and subordinated creditors at SNS REALL will be wiped out, the rescue will still cost the Dutch state about €3.7 billion in capital injections and writedowns, pushing its budget deficit further above EU targets.

That will embarrass Dijsselbloem as he takes over as chairman of the group of finance ministers charged with policing fiscal policy among the 17 eurozone nations, and anger taxpayers who paid for a €40-billion bailout of the Dutch financial sector in 2008.

"I can well understand the aversion many people will feel because once again, a large sum of taxpayers' money is required," Dijsselbloem said. "This is why I want the private sector to contribute as much as possible."

A one-time levy of €1 billion will be imposed on Dutch banks in 2014 to help pay for the rescue.

Dijsselbloem said the EU needed to legislate to ensure that banks could be broken up more easily and that the cost of future rescues be borne largely by the private sector.

Related: Scandal at world's oldest bank

A working group led by European Central Bank governing council member Erkki Liikanen last October recommended separating investment and retail banking activities to protect taxpayers and savers.

But France has since countered with its own proposal that would stop short of forcing legal separation. So far, the EU has made only small steps toward a banking union -- agreement on a eurozone mechanism for winding up failing banks and protecting depositors is probably years away.

The EU, U.S. and U.K. are all discussing different ways to regulate banks to avoid costly bailouts in the future, leading some industry figures to warn that policymakers are creating unnecessary complexity, and potentially risk, with a confused approach.

UBS Chairman Axel Weber said last week the industry needed a global standard on the issue of separating customer deposits from trading activities.

First Published: February 1, 2013: 2:17 PM ET

14.44 | 0 komentar | Read More

Google stock hits all-time high

Click chart to see more information about Google's stock.

NEW YORK (CNNMoney)

Google's stock rose 2.6% to close at $775.60, topping the all-time high of $774.38 it reached in October 2012. The stock went as high as $776.60.

Google (GOOG, Fortune 500) has been the subject of a three-year European Union probe into its search business. Despite emerging scot free from a similar multi-year investigation in the United States last month, many industry analysts and antitrust experts had expected the European probe to be harder for Google to wriggle out of.

Antitrust laws are stricter in Europe, and Google maintains a 90% share of the search market there -- significantly higher than the two-thirds share it commands in the U.S.

The European Commission has only said that its reviewing Google's proposals that the company delivered to it on Friday, and no settlement has yet been reached. But if the solutions Google proposes are in any way similar to the voluntary concessions Google offered in the U.S., they won't have a noticeable impact on the company's business.

Google's stock has been on a tear during the past few months. The company continues to activate a million Android devices a day, has successfully expanded into the broadband, cable and wireless arenas and remains the dominant search engine. Despite more competition from Microsoft (MSFT, Fortune 500) and Facebook (FB), neither has yet threatened Google's top spot.

Google investors apparently also don't seem to be too nervous about any changes that ex-Googler Marissa Mayer might be making at Yahoo. Mayer left Google to become CEO of Yahoo (YHOO, Fortune 500) last year, and even though she has won praise for changes she's been making to try and turn around Yahoo, the company still has a long way to go before it challenges Google for the online advertising market lead.

The surging price of Google is also in stark contrast to the big decline in Apple (AAPL, Fortune 500). Shares of Apple have plunged more than 35% since hitting an all-time high last September.

Related story: 5 reasons why Google has its mojo back

But concerns remain about Google, particularly with its mobile business. The amount that advertisers pay Google for clicks has continued to slip, and Google keeps losing money on its Motorola unit.

Google CEO Larry Page has said that he doesn't expect the cost-per-click issue to be a "long-term problem," but he also hasn't indicated when he thinks this figure would be more closely aligned with overall click growth.

First Published: February 1, 2013: 1:14 PM ET

14.44 | 0 komentar | Read More

Auto makers post strong sales in January

NEW YORK (CNNMoney)

The world's major car makers reported strong U.S. sales for the month of January on Friday, providing further indication that demand for new vehicles that lagged amid the weak economic recovery in the past few years is starting to return.

January vehicle sales came in at a seasonally adjusted annual rate of 15.3 million, according to Autodata, up from 14.0 million a year ago.

General Motors (GM, Fortune 500) led the way among the top four U.S. automakers with 194,699 vehicles sold, up 16% versus a year prior. Ford (F, Fortune 500) had 166,501, a 22% gain. Toyota (TM) sold 157,725 vehicles, up 27% versus a year prior, and Chrysler Group had 117,331, a gain of 16%.

Related: Consumer Reports says Toyota and Ford are best-liked car brands

Sales remained in high gear in January even after a strong December. Overall, industry sales rose 13% in 2012 to 14.5 million, the biggest increase since 1984.

CNNMoney's Chris Isidore contributed reporting.

First Published: February 1, 2013: 1:24 PM ET

14.44 | 0 komentar | Read More

Ex-commodities firm chief sentenced to 50 years

Russell Wasendorf Sr., the former CEO of commodities trading firm Peregrine Financial, was sentenced to 50 years for stealing clients' funds.

NEW YORK (CNNMoney)

The sentence, imposed in a Cedar Rapids, Iowa, courtroom, was the maximum he was facing for his crimes.

Wasendorf pleaded guilty in September to embezzling $215.5 million from more than 13,000 customers of the commodities futures firm over the course of 20 years. He prepared false documents that inflated the value of his firm.

"The lengthy prison sentence imposed today is just punishment for a con man who built a business on smoke and mirrors," said Acting U.S. Attorney for the Northern District of Iowa Sean Berry.

Authorities said Wasendorf had admitted to the fraud in a note found following a July 2012 suicide attempt. The police found him about a mile and a half from his Cedar Falls, Iowa, headquarters in his Chevrolet Cavalier with a hose running from the tailpipe into the car. The firm, which operated PFGBest and had offices in Cedar Rapids and Chicago, filed for bankruptcy right after his suicide attempt.

"I have committed fraud," read the note, which was written to his wife and eventually led federal authorities to charge him with the crimes. "For this I feel constant and intense guilt. I am very remorseful that my greatest transgressions have been to my fellow man."

He said in the note that he had been the only one involved in the scheme. His son, Russell Wasendorf Jr., was also a executive at the firm.

Wasendorf was represented in court by the federal public defender's office, which asked for a reduced sentence at Thursday's hearing. He has been in federal custody since the time of his arrest. A month from his 65th birthday, Wasendorf's sentence essentially represents a life term.

First Published: January 31, 2013: 3:29 PM ET

14.44 | 0 komentar | Read More

Amazon back after rare site crash

According to data from Apica, Amazon's homepage went down at 2:32 p.m. and was back within 50 minutes.

NEW YORK (CNNMoney)

Around 2:30 p.m. ET, users began complaining that they weren't able to access Amazon.com's homepage. Some were able to get to other parts of Amazon's site, and the mobile app appeared to be unscathed. Amazon-owned properties like Zappos and IMDB were also unaffected.

Amazon (AMZN, Fortune 500) did not reply to a request for comment on the outage.

According to data from Web performance monitoring firm Apica, Amazon's homepage went down at 2:32 p.m. and was back within 50 minutes.

The outage was short, but it's extremely rare for Amazon.com to crash. Amazon depends on heavy e-commerce traffic, especially around the holidays, so it has famously massive server capacity to handle traffic spikes. Even a few minutes of downtime can cost the company millions.

Its powerful "elastic" infrastructure, called EC2, is designed to minimize downtime as much as possible. Amazon has so much spare server capacity, in fact, that it runs a sideline business, Amazon Web Services, hosting other websites. Amazon Web Services remained unaffected by Thursday's outage, according to Amazon's status dashboard.

It was a day of Internet glitches. Twitter also suffered intermittent outages for about three hours on Thursday.

First Published: January 31, 2013: 5:22 PM ET

14.44 | 0 komentar | Read More

Neigh it ain't so: Burger King finds horse meat at European supplier

Burger King finds horse meat at European supplier, but says the meat in question never made it to stores.

NEW YORK (CNNMoney)

Burger King announced Thursday that it had terminated its relationship with European supplier Silvercrest Foods after finding traces of horse meat in beef patties at a Silvercrest facility.

Silvercrest provided beef for Burger King restaurants in the United Kingdom, Ireland and Denmark. Burger King said that while samples of beef from restaurants in these countries showed no evidence of contamination, four samples from a Silvercrest plant in Ireland showed "very small trace levels of equine DNA."

Burger King (BKW) said the tainted product was never sold in restaurants, and appeared to have originated from a sub-contracted supplier in Poland.

"[W]e are deeply troubled by the findings of our investigation and apologize to our guests, who trust us to source only the highest quality 100% beef burgers," Burger King's vice president for global quality, Diego Beamonte, said in a statement.

Burger King spokeswoman Kristen Hauser said in an email that Burger King's U.S. restaurants don't use meat from Silvercrest.

"We have stringent and overlapping controls to ensure that the products we sell to our customers meet our strict quality standards," she said.

Related: Yum Brands hit by slower China sales

Ireland's Food Safety Authority said earlier this month that the products in question did not pose a safety risk. Ireland's Department of Agriculture said its own tests of the Polish meat imported by Silvercrest for burger production showed that it was roughly 4% horse.

U.K.-based grocery chain Tesco also announced earlier this month that it had discovered horse DNA in beef products sourced from Silvercrest, and had terminated its relationship with the supplier.

Paul Finnerty, CEO of Silvercrest parent ABP Food Group, said in a statement that the company had implemented a "total management change" at the facility where the horse meat was discovered, and had established "comprehensive DNA testing procedures" to address the issue going forward.

"We are proud of our excellent reputation for quality and service throughout Europe and are determined not to allow the Silvercrest incident overshadow what is a great business," Finnerty said.

First Published: January 31, 2013: 7:04 PM ET

14.44 | 0 komentar | Read More

Federal Reserve blames stalled economy on weather

NEW YORK (CNNMoney)

"Growth in economic activity paused in recent months, in large part because of weather-related disruptions and other transitory factors," the Federal Reserve's policymaking committee said in a statement Wednesday.

The report comes just hours after the Commerce Department said the U.S. economy contracted at the end of 2012, for the first time in three years.

The Fed made no major changes to its policies, opting to keep interest rates near zero. As it did in December, the Fed said it will probably keep rates low until the unemployment rate falls to 6.5% or inflation exceeds 2.5% a year.

Economists took the Fed's language as an encouraging sign that it's not too worried about the fourth quarter slump, and stocks largely shrugged off the news.

"In December, the Committee delivered an extraordinary open-ended promise to provide as much monetary policy stimulus as it takes to get labor markets, and therefore the economy, to accelerate convincingly," said Ellen Zentner, senior economist at Nomura. "After doing so, it is likely that the next several FOMC meetings will prove to be comparatively uneventful."

Related: Meet the Fed's newest voters

The central bank will also continue buying $40 billion a month in mortgage-backed securities and $45 billion a month in Treasuries. The hope is that those additional purchases will continue to push long-term interest rates even lower.

"Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative," the Fed statement said, repeating language from December's statement.

The Fed's loudest critics argue that the Fed's easing policies are unlikely to have an impact on the unemployment rate, which currently stands at 7.8%. Many also fear that as the Fed buys an unprecedented amount of bonds, it will eventually trigger rapid inflation and struggle to unload the assets in a timely manner.

Of the Fed's 12 voting members, only one disagreed with Wednesday's decision. Esther George, president of the Federal Reserve Bank of Kansas City, said she was concerned that the Fed's policies could "increase the risks of future economic and financial imbalances."

In a speech earlier this month, she warned that the Fed's stimulative policies could risk fueling an asset bubble in bonds or farmland, among other things.

First Published: January 30, 2013: 2:38 PM ET

14.44 | 0 komentar | Read More