China's $585 Billion Stimulus Package Boost Markets

China unveiled a long-anticipated $585 billion stimulus package to keep its economy growing at a fast clip even as the global economy slows down. The larger-than-expected stimulus plan will increase investments in affordable housing, rural roads, and railways.

Asian stocks rallied on the news of China’s stimulus package. The Shanghai composite index rose 7.3% while the Hong Kong’s benchmark Hang Seng Index rose 3.4%. In Japan, the Nikkei 225 share average closed up 5.8%, even though private sector machinery orders fell 10.4% in the third quarter.

Source: BusinessWeek, MarketWatch

AIG Gets New, Bigger Bailout

The U.S. government scrapped its $123 billion bailout of American International Group after the original bailout package failed to stabilize the insurance giant. The Treasury Department is expected to announce Monday, when AIG reports third quarter earnings, that it will now give AIG a $150 billion rescue package.

Source: Wall Street Journal

Treasury Dept Changes Tax Policy to Give Banks Windfall

In mid-September, the Treasury Department changed an obscure provision of the tax code to allow tax shelters arising in corporate mergers, which could give banks a windfall of up to $140 billion. Tax experts say that the Treasury Department did not have the authority to change the tax code.

Source: Washington Post

Obama to Review Bush’s Executive Orders

President-elect Barack Obama will make an “across-the-board” review of President George W. Bush’s executive orders from the ban on stem cell research to lifting restrictions on oil and gas drilling. Obama will also push ahead with a middle-class tax cut by an average of $1,000 each for 95% of working Americans.

Source: Chicago Tribune

MGM to Show Films on YouTube

Metro-Goldwyn-Mayer Studios will allow YouTube to show certain films and TV programs in their entirety in exchange for advertising revenues. While YouTube has jumped ahead of rivals to become the world’s largest online video web site, Hollywood studios and advertising dollars have preferred to go to rival Hulu. YouTube is now trying to make friends with Hollywood and catch up to Hulu.

Source: Variety

Citi in Talks to Buy a Bank

Citigroup is in talks to acquire a regional U.S. bank less than a month after walking away from acquiring Wachovia. The identity of the bank could not be determined.

Source: Wall Street Journal

NRG Rejects Exelon’s $6.1 Billion Bid

Power producer NRG Energy rejected an unsolicited $6.08 billion takeover bid from utility company Exelon Corp which would have created the largest power producer in the U.S. However, NRG does not rule out a merger down the road, saying that it was ready to do a deal under more favorable terms.

Source: Reuters

DHL Parent to Cut Jobs in the U.S.

Germany’s Deutsche Post is expected to cut up to 13,000 jobs at its DHL Express operations in the U.S. as part of a plan to curtail the company’s operations in the U.S. Deutsche Post’s U.S. DHL operations are on track to lose $1.6 billion this year from competition, rising fuel prices, and other factors.

Source: Los Angeles Times

Rio Tinto, Fortescue Cut Iron Ore Output

Rio Tinto will cut iron ore output by 10% due to reduced demand from Chinese steelmakers. Separately, Fortescue also it is shutting down its port and mine processing plant in Pilbara for 10 days earlier than scheduled, reducing iron ore production by 10% this year.

Source: The Australian

Iranian Economists Criticize Ahmadinejad’s Economic Policies

A group of 60 Iranian economists published an open letter saying that Iran is in dire economic straits and must change course. The letter also criticized President Mahmoud Ahmadinejad’s “tension creating” foreign policy that has “scared off foreign investment and inflicted heavy damage” on the economy.

Source: IranVNC

Barack Obama Inspires Baby Names

In the past week, there have been a surge of babies given the names “Barack,” “Obama,” “Michelle,” “Malia,” and “Sasha” as either first or middle names in not just the U.S., but also in Kenya. Naming babies after new presidents has been an American tradition, but the custom faded during the Watergate scandal. Barack Obama’s election to the presidency may reverse that falling trend.

Source: New York Times

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