Archive for June, 2009

Fed’s Yellen: rates could be near zero for years (Reuters)

Tuesday, June 30th, 2009 | Finance News

U.S. benchmark lending rates could stay near zero for a couple of years based on the amount of slack now in the economy, San Francisco Federal Reserve Bank President Janet Yellen said on Tuesday.

"My staff has looked at 12 different ways to calculate the output gap," and every one points to a large gap between current and potential output, Yellen told reporters after a speech in San Francisco.

Bets in futures markets on a rate increase as soon as late 2009 are "jumping the gun," she said.

The jobless rate is likely to continue climbing this year, and the moment the recession ends is "not the right time to take away the punchbowl," said Yellen.

She added that views circulating that the Fed risks triggering some kind of hyper-inflation by not rushing to raise interest rates are "misplaced."

Yellen is a voting member of the Federal Open Market Committee in 2009.

(Reporting by Ros Krasny; Editing by Jan Dahinten)


Retailer Tesco mulls bid for British bank: report (AFP)

Tuesday, June 30th, 2009 | Finance News

Britain's biggest retailer Tesco is a potential bidder for nationalised bank Northern Rock, which the government is reportedly considering selling later this year, The Times newspaper has reported.

It said the supermarket chain had shown "provisional interest" in buying the bank, which was taken into public ownership last year after it ran into severe funding problems because of the international credit crunch.

The Times has previously reported that the government is looking to sell the bank later this year, and on Wednesday suggested the intention was to offload it before the next general election, due by June 2010.

Virgin has also expressed an interest, the newspaper reported.

A Tesco spokesman said the report was "pure speculation".

And a spokesman for the Treasury department said: "Any decision will be taken in the best interests of financial stability and of the taxpayer.

"Our only focus is our discussions with the European Commission around the restructuring of Northern Rock and the implementation of Northern Rock's new mortgage lending."


Gannett laying off 1,000 as ad sales slide: report (Reuters)

Tuesday, June 30th, 2009 | Finance News

Gannett Co. Inc Co, which owns top-selling newspaper USA Today, is laying off more than 1,000 staff to try and combat persistent declines in revenue, the Wall Street Journal reported on Tuesday.

The cuts will come from the company's Community Publishing division, which groups more than 80 local dailies, the newspaper citing a person familiar with the company's thinking as saying.

The Wall Street Journal added that it was unclear precisely how many jobs will be lost, but cited the source as saying it will be under 2,000.

Shares in Gannett, which posted a 60 percent drop in quarterly earnings when it reported first-quarter results in April, held steady in after-hours trade.

The U.S. newspaper industry is struggling as the recession prompts advertisers to slash budgets and readers go online for their news.

At USA TODAY, advertising sales plummeted 33.5 percent in the first quarter.

(Reporting by David Lawsky; Editing by Christian Wiessner)