January Surplus Shrinks 2013 U.S. Budget Deficit
WASHINGTON (AP) – The federal government reported a rare surplus for January and is on track to run the lowest annual deficit since President Barack Obama took office.
The Treasury Department said Tuesday that the government took in a surplus of $2.9 billion in January, helped by nearly $9 billion more in Social Security taxes. Last month Congress and the White House allowed a temporary cut in Social Security taxes to expire.
Through the first four months of the 2013 budget year, the deficit has grown $290.4 billion. That’s nearly $60 billion lower than the same period a year ago.
Likely Treasury Chief Lew Faces Early Budget Tests
WASHINGTON (AP) – The to-do list that awaits Jacob Lew, President Barack Obama’s choice to be Treasury secretary, is daunting.
Bridge disputes in Congress on taxes and spending. Shrink budget deficits. Manage tense economic ties with China. Press Europe to reduce debts while fighting a recession. Defend the U.S. financial overhaul law. Prevent a global currency war.
And those are just the obvious challenges.
S&P Parent Expects to Beat Gov’t Ratings Lawsuit
NEW YORK (AP) – Standard & Poor’s is prepared to spend years beating back a federal lawsuit that accuses the company of giving falsely high ratings to mortgage investments that helped trigger the financial crisis, executives said Tuesday.
The government may seek up to $5 billion — several years’ worth of profits for McGraw-Hill, it said in a civil complaint filed in Los Angeles federal court last week. The company believes the charges lack merit, but the case is likely to drag on for three or more years, general counsel Ken Vittor said on the call.
Despite what the company called “an outstanding year,” analysts on the call focused on its ability to fend off the lawsuit and maintain growth in the Standard & Poor’s Rating Services division.
CEO Of Scandal-Ridden U.K. Bank Sets New Tone
LONDON (AP) – Be honest. Or be gone. That’s the message from the new chief executive at Barclays, the British bank that paid a $453 million fine for manipulating a key global interest rate. As he tried to put a brave face on 3,700 new job cuts and growing financial losses, CEO Anthony Jenkins said Tuesday that ethics matter as much as a given quarter’s bottom line.
“Barclays is changing,” Jenkins told reporters at a news conference in London. “There will be no going back to the old ways of doing things.”
Jenkins has good reason to embrace the high road. Even though Barclays avoided a government bailout during the global financial crisis — unlike British peers like Royal Bank of Scotland and Lloyds — the lender has faced a string of scandals that are costing it billions of pounds.
Another Major Dell Shareholder Opposes $24.4b Sale
NEW YORK (AP) – A shareholder rebellion against Dell’s proposed $24.4 billion sale to its founder and other investors is gaining more support, fueling a belief that the struggling personal computer maker will have to wrangle a higher price to get the deal done.
Mutual fund firm T. Rowe Price joined the opposition Tuesday. Price and another shareholder, Southeastern Asset Management, believe that founder and CEO Michael Dell and the investment firm Silver Lake are seizing control and ending Dell Inc.’s 25-year history as a publicly held company on the cheap.
T. Rowe Price and Southeastern are the two largest independent shareholders and own nearly 13 percent of the company combined. Michael Dell has committed his 14 percent stake toward the deal. He is the only investor who owns more stock than either of the two.
G7 Seeks to Defuse Currency War Fears
NEW YORK (AP) – The Group of Seven leading industrial nations, which includes the U.S., Japan and Germany, warned Tuesday that volatile movements in exchange rates could adversely hit the global economy.
There have been increasing concerns around the world that countries might manipulate their exchange rates through their domestic economic policies in order to gain an edge. The process could spark a “currency war” — where countries compete against one another to get the lowest exchange rates.
The G-7 finance ministers and central bankers insisted they remained committed to exchange rates driven by the market — not government or central bank policies.