A round-up of today's other stories in brief
Downgrade on cards as Spain's debt costs rise
Spanish 10-year bonds declined, pushing yields close to their highest in two weeks, after Spain's borrowing costs rose at its last debt sale for this year amid mounting concern over the country's credit quality.
Moody's Investors Service said on Wednesday it may downgrade Spain's credit rating, citing the cost of rescuing its banks. "The cost of funding for Spain rose significantly at this auction," said Luca Cazzulani, a senior fixed-income strategist at UniCredit SpA in Milan. "That reflected perceived deterioration of credit quality of Spain and that's not going to bode well for their bonds." Spanish 10-year yields rose two basis points to 5.54 per cent at 4pm in London.
$111.3m bonuses for Goldman chiefs
Goldman Sachs Group’s top executives will get about $111.3 million (€84 million) in stock next month in a delayed payout from last year, as Wall Street prepares for lower bonuses.
Chief executive Lloyd Blankfein (56) is poised to receive about $24.3 million in January, based on the closing share price on December 14th, while president Gary Cohn (50) will get about $24 million, company filings show.
The payouts, far lower than the $67.9 million bonus to Mr Blankfein for 2007 and the $66.9 million to Mr Cohn, reflect a 24 per cent decline in the stock’s value since it was granted at $218.86.
Within a year of the 2007 bonuses being approved, Goldman Sachs took $10 billion of US bailout funds, converted to a bank and was borrowing as much as $35.4 billion a day from Federal Reserve emergency programmes. – (Bloomberg)
Construction and building down 5.7%
Building and construction activity fell in the third quarter of the year, with output down by 5.7 per cent, new data shows.
The main sectors influencing the negative figure were civil engineering, which saw output decline by 11.8 per cent compared to the preceding quarter, and residential building which dipped 12.2 per cent.
However, non-residential building recorded an increase of 5 per cent quarter on quarter.
The data also indicated a 5.9 per cent drop in the value of production for all the building and construction.
On an annual basis, the volume index of output in the sector fell by 31.2 per cent, while value fell 29.9 per cent. This was driven by a fall of almost 39 per cent in residential building and more than 28 per cent in civil engineering work. The non-residential sector fell by 27.7 per cent.
This compares to a decrease in the year to the third quarter of 3.6 per cent in the EU27, with the UK rising 8 per cent, Poland increasing 7.7 per cent and Lithuania up 6.7 per cent. Spain recorded a larger decrease than Ireland, at 35.5 per cent.
US rescue to cost less than 1% GDP
The direct cost for the US government's financial crisis rescue efforts will total less than 1 per cent of gross domestic product, considerably less than past systemic crises, according to US treasury secretary Timothy Geithner.
Mr Geithner told a bailout watchdog group the treasury expected to earn a positive return on its remaining investments in banks, automakers, credit markets and American International Group as part of the $700 billion Troubled Asset Relief Programme (Tarp).
"The cost of Tarp is likely to be no greater than the amount spent on the programme's housing initiatives," Mr Geithner told the congressional oversight panel.
He said the direct financial cost of Tarp was once estimated at $350 billion by the congressional budget office but was now "likely to cost a fraction of that amount". He cited a new CBO estimate of $25 billion.
The Treasury's most recent all-in cost estimate is about $30 billion. – (Reuters)
