Oil rises on talk of auto bailout, stimulus

Oil rises on talk of auto bailout, stimulus

NEW YORK (CNNMoney.com) -- Oil prices rebounded from a nearly 4-year low Monday as U.S. automakers neared a deal that would keep them out of bankruptcy and President-elect Barack Obama pledged to stimulate the economy of the world's largest oil consumer.

U.S. crude for January delivery rose $2.23 to $43.04 a barrel after settling at $40.81 Friday, the lowest close since Dec. 10, 2004.

Congressional Democrats and the White House reached a tentative agreement late Friday that could keep troubled automakers out of bankruptcy court through March, and prevent the disintegration of a large section of the U.S. economy, according to congressional sources.

Government support for the auto industry could certainly help, but "it's a temporary Band-Aid," said Phil Flynn, senior market analyst with Alaron Trading in Chicago.

Oil prices will be hard pressed to turn significantly higher unless they can rise back above $45.90 a barrel, cautioned Flynn.

In total, the U.S. auto industry employs about 2 million people nationwide, according to the Center for Automotive Research, which includes workers at General Motors (GM, Fortune 500), Ford (F, Fortune 500) and Chrysler, as well as dealers and parts manufacturers.

As the economy falters, consumers and businesses use less petroleum-based fuel, which drives down the price of oil.

House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., issued statements this weekend that they would call the lame duck Congress back to Washington to vote on backing the auto industry.

"The U.S. auto industry is a critical part of our economy and we are encouraged by Speaker Pelosi's statement that Congress is expected to act next week," said Ford in a statement.

Concern about the waning worldwide economy's effect on oil demand has driven prices down more than $100 a barrel since hitting a record $147.27 this summer.

U.S. stimulus: In the U.S., Obama said his administration would ramp up spending on infrastructure, energy programs and school construction projects to create jobs and stimulate the economy.

"We understand that we've got to provide a blood infusion to the patient right now to make sure that the patient is stabilized. And that means that we can't worry short term about the deficit," he said in an appearance on NBC's "Meet the Press."

The possibility of infrastructure spending in the U.S., along with a steep discount in crude futures, may set the stage for a possible turnaround in 2009, according to James Cordier, founder of brokerage OptionSellers.com.

"There's a bit of light shining through the cracks," said Cordier, who believes a fair price for crude is around $50 a barrel.

Global stimulus: India, one of the world's rapidly expanding economies, pledged Sunday to provide an additional $4 billion on infrastructure, tax cuts and other stimulus measures. more

Standard Chartered embarks on £1.78bn rights issue

Standard Chartered embarks on £1.78bn rights issue

Standard Chartered has announced plans to raise £1.78 billion in a rights issue.

Existing shareholders will be able to buy 30 shares for every 91 shares held at a price of 390 pence a share, representing a 48.7% discount on the company’s closing price on Friday 21st November.

According to the emerging markets bank, the fundraising will strengthen its position in the current economic uncertainty and allow it take advantage of opportunities that may present themselves in the global financial services sector.

The group, which is listed in London and Hong Kong, has reported that existing shareholder, Temasek, will be subscribing in full to the issue of new shares. The Singaporean sovereign wealth fund already holds a 19% stake in the business. more

Clinton Is Said to Accept Offer of Secretary of State Position

Clinton Is Said to Accept Offer of Secretary of State Position

By PETER BAKER and HELENE COOPER
Published: November 21, 2008
WASHINGTON — Hillary Rodham Clinton has decided to give up her Senate seat to become secretary of state in the Obama administration, making her the public face to the world for the man who dashed her own hopes for the presidency, confidants of Mrs. Clinton said Friday.


The accord between the two leading figures of the Democratic Party was the culmination of a weeklong drama that riveted the nation’s capital. President-elect Barack Obama and Mrs. Clinton fought perhaps the most polarizing nomination battle in decades, but in recruiting her for his cabinet, Mr. Obama chose to turn a rival into a partner, and she concluded she could have a greater impact by saying yes than by remaining in the Senate.

Her selection is still to be formalized and will not be announced until after Thanksgiving. It would be yet another direction in the unlikely journey of a onetime political spouse in Arkansas who went on to build a political base of her own and become a symbol of achievement to many women.

The role, though a supporting one, would make her one of the most influential players on the international stage, and it would represent at least one more act for one of the nation’s most prominent public families, as former President Bill Clinton would also become an ad hoc member of the Obama team.

The sometimes awkward dance between Mr. Obama and Mrs. Clinton in the eight days since he invited her to Chicago for a meeting culminated in a telephone call on Thursday. Before the call, Mrs. Clinton was skeptical about the prospect of joining the cabinet, said her confidants, who insisted on anonymity to discuss the situation. But Mr. Obama addressed her concerns about access, personnel and other issues, leading her to conclude she should take the job, they said.

“She’s ready,” one of Mrs. Clinton’s confidants said. The first meeting in Chicago “was so general” that she needed to have a better sense of how she would fit into Mr. Obama’s administration, and the call helped her “just getting comfortable” with the idea of working together, the confidant said.

Mr. Obama’s advisers said that although no offer had been formally accepted, her nomination was “on track” and would probably be announced after the holiday. Mrs. Clinton’s Senate office broke a week of silence to acknowledge the talks but cautioned that they had not been made final. more

Merkel's Opel Offer Slammed

Merkel's Opel Offer Slammed

The German government's offer to come to the rescue of carmaker Opel has come in for hefty criticism, particularly from within Chancellor Merkel's own party. Meanwhile Opel says it is reducing production for next year and cutting back to a 30-hour week in most plants.
hey say that if America sneezes, the world catches a cold. Now, it seems that if US auto giant General Motors has influenza then its European subsidiary Opel is going to straight to the German government for the aspirin.

On Monday Berlin agreed to consider extending loan guarantees to Opel so that it can insulate itself from the troubles at its parent company in Detroit. While Chancellor Angela Merkel was careful to insist that any such move would be a special case, the plans are already coming under fire. Some politicians from within her own party have attacked any hint of a bailout, with some arguing that German taxpayers should not be helping out what is essentially a US company.

Merkel met with Opel executives on Monday after they asked for a loan guarantees of around €1 billion ($1.26 billion) to ensure liquidity if Detroit-based GM files for bankruptcy. The entire US car industry is pleading for a government aid package of around $25 billion to weather the current problems wrought by the worst economic situation in decades.more

In Germany, where the auto industry is one of the biggest employers, some are concerned that any state aid to Opel could flow across the Atlantic to prop up its US parent company. Others worry that bailing out one company or one sector could have a snowball effect with troubled firms automatically turning to the state when the going gets tough.more

Deutsche Bank hires Mike Gelhard

Deutsche Bank hires Mike Gelhard

Story link: Deutsche Bank hires Mike Gelhard

Deutsche Bank, Germany’s largest bank, has announced the appointment of Mike Gelhard as the firm’s new MD and global co-head of Emerging Markets Corporate Credit and Special Situations.

He joins Deutsche Bank from investment bank UBS where he covered Latin America and Asia as head of High Yield and Distressed Credit Trading...

Oceanic Bank aims to enhance savings culture in Nigeria

Story link: Oceanic Bank aims to enhance savings culture in Nigeria

Oceanic Bank International plc is to try and bolster the savings culture in Nigeria with the introduction of Oceanic Save More And Win Big Promo, which could enrich customers by up to N100m.

The Central Bank of Nigeria has frequently complained of too much cash being outside the formal market, and as a result has encouraged banks to develop unique measures that would help promote small savers to deposit cash and thereby reduce the amount of money that exists outside the banking sector.

FSCS puts Icesave customers at risk of fraud

FSCS puts Icesave customers at risk of fraud

The Financial Services Compensation Scheme (FSCS) is being criticised for opening the door to fraudsters because of the way in which it is handling compensation claims of UK account holders with Icesave.

The 230,000 people who have deposited a combined £4.5 billion in the failed bank have been told they will receive two emails from the FSCS.

The first will explain the process by which their money will be repaid and the second will give instructions on how to log on to an existing Icesave account and transfer the cash.

Under the Banking Code, communication with customers by email is permitted but banks do not encourage this method of contact because criminals constantly produce fraudulent emails containing fraudulent website links.

Criminals could therefore already be working out ways to entrap Icesave customers and steal their cash by sending out emails directing them to a spurious link.

According to website security firm, First Cyber Security, research by APACS, the UK payments body, reveals that 18% of people are at risk of selecting a website address from an email and giving their personal information to a fraudster.

First Cyber director, David Holman, comments that it is easy to set up a copy of an authentic website and send out mass emails that consumers could believe to be authentic.