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West Palm Beach (HedgeCo.net) – President Barack Obama’s $838 billion stimulus plan was approved by the U.S. Senate as part of a plan of action the Senate hopes will revive the collapsing US economy.
$100 billion is to be alotted to hedge funds or other investors, giving them incentive to purchase so-called toxic assets. President Obama welcomed the 61-37 vote as "good news. It’s a good start."
Outlining a few details of how the administration would spend the remaining $350 billion of the $700 billion bank bailout program, Treasury Secretary Timothy Geithner separately announced a new public-private partnership to help strengthen banks.
"Critical parts of our financial system are damaged," Geithner said. "The financial system is working against recovery and that’s the dangerous dynamic we need to change."
In a related government commitment of financial support, the Federal Reserve broadened a program designed to boost resources for consumer credit and small business loans – from $200 billion up to $1 trillion. Additionally, Obama has campaigned to include funds for school construction in the bill.
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Greenville News – Two key leaders of South Carolina’s Legislature said Friday they would have problems agreeing to accept some of the federal stimulus money passed by the U.S. House if Gov. Mark Sanford decides not to ask for it.
U.S. Rep. Jim Clyburn of Columbia, House majority whip, included a provision that would allow state legislators to bypass governors to seek the money if a governor doesn’t request the funding. Sanford opposes the stimulus plan because he believes it will simply add more debt to a government mired in borrowing.
Reuters – U.S. President Barack Obama‘s $825 billion stimulus plan cleared its first Congressional hurdle as the Federal Reserve eyed more extreme measures to ease credit market strains, boosting Asian stocks despite deep skepticism that a global slowdown can be reversed quickly.
Signs of corporate distress were still obvious regardless of the passage of Obama’s bill through the House of Representatives, the first big legislative success of his new presidency.
Sony Corp followed fellow Japanese electronics maker Canon Inc with a dismal quarterly profit report on Thursday as the fallout grows from a global crisis which has already cost trillions of dollars and threatens millions of jobs.
New York (HedgeCo.Net) – In his first press conference since winning the presidential election, Barack Obama discussed ways to tackle the economic crisis while describing the “enormity of the task that lies ahead.”
In the wake of what looks to be a pending recession, Obama talked about his focus on job production and the extension of unemployment benefits. He also talked about ways of helping the faltering auto industry and other small businesses, as well as possibly tweaking his tax plan to help more low and middle income families.
“I think the plan that we’ve put forward is the right one, but, obviously, over the next several weeks and months, we’re going to be continuing to take a look at the data and see what’s taking place in the economy as a whole,” Obama explained.
He did mention that a good majority of his first year may in fact be spent on reviving the troubled economy.
“Immediately after I become president I will confront this economic crisis head-on by taking all necessary steps to ease the credit crisis, help hardworking families and restore growth and prosperity,” Obama stated.
Before the news conference, Obama and Vice-Presidential elect Joe Biden met with the transition economic advisory board, where they discussed ways to stabilize the sinking economy. Although Obama did state that President Bush would be handling the situation for the days leading up to January 20, he did reinforce his belief that “a new president can have an enormous impact.”
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
New York Times Blogs – After pouring money into Barack Obama’s campaign, what can hedge funds and their executives expect from the new president?
If history is any exmaple, says FINAlternatives, they shouldn’t expect a cuddly relationship.
Mr. Obama didn’t appear sympathetic to the industry on the campaign trail, the publication noted, calling John McCain the candidate of “Joe the Hedge Fund Manager,” a riff on McCain’s pledge to serve the “Joe the Plumbers” of the U.S.
And during his time in the Senate, FINAlternatives noted, Mr. Obama sponsored a bill that would have required hedge fund managers to set up anti-money laundering programs supervised by the Treasury Department. (The Treasury abandoned a similar proposal last week).
The president-elect has also backed tax proposals that increase the burden on hedge funds and private equity shops, the publication said.
