Banks, experts eye possible ways around Obama fee
No sooner does Washington propose a new tax than an army of experts tries to figure out ways to avoid it.
That is already the case with U.S. President Barack Obama’s proposed fee on banks, designed to ensure that Wall Street banks pay up to $117 billion to reimburse taxpayers for the financial bailout: Bankers, lawyers and consultants are already considering ways to avoid paying the fee.
“This law could be a real boon for lawyers and consultants like me. There are tremendous opportunities for coming up with new mechanisms to avoid it,” said Bert Ely, a bank consultant in Alexandria, Virginia.
The fee idea has been public for only a matter of hours, so it is tough to say precisely how to avoid it. Final wording is a long way off as the proposal wends its way through the legislative process.
But there may be some ways to avoid the charge, which would target the biggest financial institutions and would be based on the size of their liabilities. [Read the full article]
Intel Corp’s (NasdaqGS:INTC – News) fourth-quarter results roared past Wall Street forecasts and it gave a bullish margin outlook on higher prices and firm demand for server chips, reinforcing hopes for a strong recovery in technology.
Intel, whose stock extended gains after rising 2.5 percent in regular trading, said on Thursday its gross profit margin in the fourth quarter rose to a record 65 percent. While it forecast a drop to 59 percent to 63 percent in the typically weaker current quarter, that still surpassed analysts’ average projection of 58.8 percent.
“That will alleviate a lot of the concerns people had over whether the surge in buying at the end of the year was one that was going to peter out,” said FTN Equity Capital Markets analyst Joanne Feeney. [Read the full article]
Economists surveyed by Thomson Reuters expect that consumer prices edged up a slight 0.2 percent in December while prices excluding food and energy rose by an even smaller 0.1 percent. The Labor Department will release the report at 8:30 a.m. EST Friday.
Many economists believe that for the year, when measured from December to December, consumer prices will post a moderate gain of 3.8 percent, compared with an increase of just 0.1 percent in 2008.
However, much of that acceleration reflects a big swing in energy prices. Core inflation, which excludes food and energy, likely rose by a modest 1.8 percent in 2009, little changed from the 1.7 percent increase of 2008. [Read the full article]
The Federal Reserve is expected to report that production at the nation’s factories, mines and utilities rose 0.6 percent last month, according to economists surveyed by Thomson Reuters. That would follow gains of 0.9 percent in July, 1.2 percent in August, 0.7 percent in September, 0.1 percent in October and 0.8 percent in November.
Many economists are hopeful that industrial production will continue to rack up increases in the months ahead — albeit probably at a slow pace — as the recovery solidifies.
Faced with rock-bottom inventories of goods, businesses at some point will need to replenish them. That would help boost production. Even the smallest rise in customer demand would likely force factories to bump up output because businesses’ stockpiles are thin, analysts say. [Read the full article]