Actual finance blog

Time Warner Inc. swung to a whopping fourth-quarter loss of $16 billion, or $4.47 per share, as the entertainment giant was impacted by a writedown on its assets.

A year ago, New York City-based Time Warner (NYSE: TWX), parent of time Warner Cable, had a profit $1.03 billion, or 28 cents per share.

The $24.2 billion writedown was tied to the company’s cable, publishing and AOL units.

Minus the write-offs, adjusted earnings were 23 cents per share cashadvance.

Time Warner Cable, the franchise provider for much of upstate New York including the Albany area, saw revenue rise by 8 percent to $4.4 billion. Time Warner Cable is in the process of being pared to a stand-alone business.

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For President Barack Obama, picking Senator Judd Gregg to be his commerce secretary would add another Republican to his administration, more credibility to his efforts to promote bipartisanship and an important ally for his economic-recovery plan.

Gregg — who is described by friends as a policy wonk — would be a player in Obama’s efforts to solve the biggest economic crisis since the Great Depression and would get a ticket out of his minority status in a rancorous Senate.

The three-term New Hampshire senator is the leading candidate for the commerce job, Obama’s only Cabinet post without a nominee, according to both White House and Republican officials. No final decision has been made, though an announcement is likely early this week.

Even though Gregg’s Senate voting record is much different than Obama’s, Democratic colleagues praised his possible selection for the Cabinet.

Obama is “lucky to get him,” said Senate Budget Committee Chairman Kent Conrad, a North Dakota Democrat.

“Judd and I don’t always agree, but I always respect his views and his opinions, because it doesn’t come from an ideological basis,” Conrad said in an interview. “This is a big gain for the Obama Cabinet and a big loss for the Senate.”

Republican Appointee

Gregg’s Senate colleagues are already preparing for his departure and working to figure out the logistics of his replacement. Adding another twist to the saga of governor- appointed Senate seats this year, New Hampshire’s Democratic governor, John Lynch, may end up choosing a Republican.

A career New Hampshire lawmaker, politics is in Gregg’s DNA: His father, Hugh Gregg, was a former governor of the state. Gregg, 61, never enjoyed working in the Senate as much as he did his two-year term as governor, friends said.

“Judd is the only person in the history of the state to serve on the Executive Council, in the House of Representatives, as governor and the Senate,” said Tom Rath, a Republican strategist from New Hampshire. “He is a genuine conservative but not one with a hard edge.”

Gregg, a tax-averse deficit hawk who has voiced concerns about the size and makeup of Obama’s stimulus package that may reach $900 billion, could become a critical voice in the administration to vouch for the president’s economic policies.

Financial Rescue

Last fall, then-candidate Obama, 47, spoke with Gregg during negotiations over the Treasury’s financial-rescue plan and the two talked before the Senate’s vote last month to release the second half of the $700 billion Troubled Asset Relief Program fund. Gregg was one of six Senate Republicans who voted to release the money.

If confirmed, he would be Obama’s third Republican Cabinet appointment. Ray LaHood, a former congressman from Illinois, was appointed to lead the Department of Transportation, and Defense Secretary Robert Gates is a holdover from the Bush White House.

By bringing in Gregg, however, Obama wouldn’t merely be bringing another Republican into his administration; he also may be taking one away from the Senate. One less Republican could in some cases provide a magic number for the Democrats to push through their legislative priorities.

If Lynch appoints a Democrat and if Democrat Al Franken prevails in the disputed Minnesota race, the party would hold a 60-vote majority in the Senate. That would allow Democrats — if they vote as a bloc — to overcome filibusters that can delay legislation indefinitely.

Filibuster

That kind of unity, however, may be hard to obtain on controversial matters my credit score. Democrats Ben Nelson of Nebraska, Mary Landrieu of Louisiana and Mark Pryor of Arkansas have all demonstrated voting patterns that don’t always follow their party’s line. Conversely, even with 59 Democratic senators, independent Republicans such as Susan Collins and Olympia Snowe of Maine and Arlen Specter of Pennsylvania have shown a similar propensity to break with their party on some issues. Thus, the notion of a filibuster-free Senate with 60 Democrats may be more myth than reality.

Gregg would insist that the governor replace him with a Republican, friends and colleagues said.

“Senator Gregg has assured me that if this were to happen, if it were to happen, it would not change the make-up of the Senate,” Minority Leader Mitch McConnell said yesterday on CBS’s “Face the Nation.”

New Hampshire Republicans speculate the most likely replacement would be Bonnie Newman, a close family friend who was also Gregg’s chief of staff when he was in the House. She was executive dean at Harvard University’s Kennedy School of Government in Cambridge, Massachusetts, from 2000-2005 and served in the administrations of former presidents Ronald Reagan and George H.W. Bush.

Replacements

Other Republican possibilities include Rath, former Representative Charles Bass, former Governor Walter Peterson and former State House Speaker Doug Scamman. Two Democratic House members are vying for the job, Representatives Carol Shea Porter and Paul Hodes.

In the Senate, Gregg has a voting record as an independent- minded fiscal conservative.

Gregg, who chaired the Senate Budget Committee from 2005 to 2007, has called for reining in government spending on Social Security and other federal entitlement programs. He helped champion a five-year, $39.7 billion package of cuts to such programs proposed by President George W. Bush during Gregg’s first year chairing the panel. In 2003, he voted against creation of a Medicare prescription drug program for seniors proposed by Bush.

Stem-Cell Research

He has parted with Bush on some social policies, including votes in favor of expansion of federal funding for embryonic stem-cell research, which the president opposed.

At the same time, he was a staunch supporter of Bush’s Iraq policy. Two years ago, he engineered a Senate vote on a resolution he authored keeping in place funding for U.S. troops in Iraq.

Gregg was a pivotal figure in negotiations over the $700 billion financial-rescue plan that passed the Senate late last year. After Alabama senator Richard Shelby, the top Republican on the Senate Banking Committee, declined to take part in the negotiations, Gregg was selected by McConnell to represent Senate Republicans at the bargaining table.

As commerce secretary, Gregg would lead a Cabinet department of 40,000 people, whose role is to boost the U.S. economy, compile economic data, monitor the weather and adjudicate trade complaints.

Obama’s first pick to lead the department, New Mexico Governor Bill Richardson, withdrew last month amid a federal investigation.

Gregg may bring some luck to Obama’s White House. In 2005, when he was chairman of the Budget Committee, Gregg won $853,492 playing the lottery. He let the machine choose his numbers when he bought $20 worth of tickets at a gas station in Washington.

“I guess it means I’m good with numbers,” he joked with a reporter.

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OTTAWA – Multibillion-dollar economic stimulus packages winding through the Canadian parliament and the United States Congress couldn’t come too soon for Canadian business leaders, who are putting off new investments in expectations of worse times ahead.

A new business confidence survey released Thursday by the Conference Board of Canada finds Canadian companies putting off expansions and equipment purchases that economists say are needed to improve productivity and turn the economy around.

Earlier this week, Finance Minister Jim Flaherty tabled a $40 billion stimulus package over two years that includes many of the measures businesses asked for, including attempts to revive commercial lending and an enriched tax writeoff on productivity-boosting new equipment purchases.

As well, Barack’s Obama US$819-billion stimulus plan scaled the first political hurdle in the U.S. Congress late Wednesday night.

The stimulus plans in both countries "will help cushion the downturn," said economist Sal Guatieri of BMO Capital Markets.

`But there appears to be a lot of backward momentum, so they are up against pretty stiff headwinds."

Although economists say the stimulus packages will help improve consumer confidence, the hard economic news has all been going the other way.

In the last two weeks, blue chip U.S. companies such as heavy equipment maker Caterpillar, technology giants Intel and Microsoft, metals producer Alcoa and corporate titans Boeing, Pfizer and Home Depot have announced tens of thousands of job cuts.

About 125,000 layoffs have been announced in January so far, and the U.S. economy is likely to continue to shed jobs for the rest of this year, even if the economic stimulus plan is approved.

The U.S. Labor Department said the number of Americans receiving unemployment benefits has reached an all-time high as layoffs spread throughout the economy. Many predict the jobless rate could hit 10 per cent or more.

In Canada, Equifax Canada reported Thursday that consumer bankruptcies are rising across the country, increasing by nine per cent to 109,000 by the end of November over the same period last year.

`Our latest data illustrates that the weaker economy coupled with high personal debt levels has led to an increasing number of consumers declaring bankruptcy," said Nadim Abdo, the consulting firm’s vice-president emergency payday loans.

Meanwhile, Statistics Canada said the Industrial Product Price Index declined 1.9 per cent and the Raw Materials Price Index fell 15.4 per cent in December from a month earlier, as petroleum prices continued to move sharply downward.

The decline in the industrial products index was its fourth straight monthly decrease, dropping 5.7 per cent from its peak last August.

Most economists believe that the first three months of 2009 will be the worst for the economy, contracting by as much as 4.8 per cent on an annual basis, in the Bank of Canada’s estimates.

But Canadian business leaders don’t see it that way. Close to 60 per cent of those polled by the Conference Board say they expect the economy to be even worse six months from now, as opposed to only 10 per cent who expect an improvement.

Only 24 per cent of respondents expect their financial position to improve, as opposed to 36 per cent who think it will get worse in the next six months.

The business confidence findings, the third worst ever recorded by the Conference Board, dovetail with the think-tank’s near-record low consumer confidence results, both obtained in surveys conducted earlier this month.

But what is most alarming is that businesses not only expect conditions to worsen, they say they are responding by cutting plans to expand and buy machinery and equipment, likely to further drag down the economy.

For the first time since the recession of the early 1990s, more companies are scaling back, rather than increasing, their capital investment plans.

More than 60 per cent of respondents said they were putting off purchasing new equipment or expanding plants because of weak market demand, while 34.5 per cent cited tight credit.

Even viable businesses complained they were finding it difficult to borrow money under acceptable conditions, the Ottawa-based think tank says.

`Faced with a progressively grimmer economic outlook, firms are significantly are significantly curtailing their investment intentions," said the think-tank.

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