In testimony before Congress, the Fed chief laid out a strategy by which the Fed will soak up the unprecedented liquidity in the U.S. financial system. He said he’ll focus on raising rates, especially those the Fed pays on reserve balances held by depository institutions. Bernanke said he may also employ reverse repurchase agreements—that is, selling securities held by the Fed, with an agreement to buy them back later.

The trick will be to sop up excess liquidity without stifling what seems to be a nascent recovery. Bernanke said there’s little prospect the Fed will raise rates anytime soon from their near-zero level. He noted that rising levels of unemployment could still choke consumer spending, with attendant harm to the economy’s overall health.

Source: BusinessWeek

A New Boss for Freddie Mac

The troubled mortgage giant named mutual-fund manager Charles Haldeman Jr. as its new CEO, following the suicide of its finance chief, David Kellermann, in April, and the resignation of CEO David Moffett in March. Interim CEO John Koskinen will return to his role as nonexecutive chairman when Haldeman takes over, probably in August. Haldeman left Putman Investments in June after steering the company through the aftermath of a scandal as CEO. He was replaced as CEO in 2008 less than a year after Power Financial bought Putnam.

Source: Bloomberg

Exelon Bags a Bid

Exelon ended its attempt to acquire NRG Energy after NRG shareholders overwhelmingly reelected four directors, rejecting Exelon’s slate of nominees. The Exelon candidates had backed its $7.8 billion hostile takeover offer. Exelon had boosted its offer by 12% recently but NRG still spurned it as inadequate. A deal would have created a utility giant with the nation’s largest fleet of nuclear plants.

Source: Wall Street Journal

Apple Looks Crisp

Apple’s (AAPL) fiscal third-quarter earnings report, due after markets close on July 22, will likely surpass Wall Street analysts’ expectations, advancing the argument made by chipmaker Intel (INTC) this month that spending on computer equipment is snapping back. New market research forecasting record third-quarter Macintosh sales, combined with Apple historical proclivity toward issuing conservative guidance for its upcoming quarters, are leading Wall Street analysts to look for a surprisingly strong report. For the third quarter ended June 27, analysts expect Apple to report sales of $8.2 billion and earnings of $1.16 per share. A year ago, Apple reported $7.5 billion in sales and $1.08 in per-share profit. A strong report would make Apple the latest tech company to exhibit strength that could point to a recovery in technology spending, especially among consumers.

Source: BusinessWeek

Magna, RHJ, and Beijing Auto Final Three Bidders for Opel

General Motors has received its three final offers for its German Opel unit. Canadian auto parts manufacturer Magna, Germany’s preferred bidder, is facing rival offers from RHJ International SA and Beijing Automotive Industry Holding Co.

Source: Bloomberg

Health Care Reform Drafters Reap Industry Money

Senate Finance Committee chairman Max Baucus (D – Mont.) and other lawmakers closely involved in health care reform have been huge recipients of insurance company, hospital and health care firm donations. The sector gave nearly $170 million to federal lawmakers in the last two years, 54% to Democrats, while Baucus’s political committees received $1.5 million.

Source: Washington Post

Swiss Banks Snub U.S. Clients

As the IRS pressures Swiss banking giant UBS to release information on 52,000 U.S.-based clients as part of an ongoing tax fraud investigation, a number of smaller Swiss banks are starting to refuse business from U.S. account holders.

Source: Wall Street Journal

CIC Buys Diageo Stake

Sovereign wealth fund China Investment Corp has bought a 1.1% stake in Diageo drinks group. After facing criticism at home for paper losses following earlier investments in Morgan Stanley and Blackstone, the fund has quietly started purchasing again and recently bought shares in a Canadian miner, an Australian property firm as well as increased its stake in the now cheaper-priced Morgan Stanley.

Source: Financial Times

Oil’s Outlook Is Hard to Refine

Amid the near-term uncertainty for the global economy, energy traders continue to position themselves for the future. But what does the future hold? Predictions are all over the map. Estimates range from a low of $40 to a high of $80.

Source: BusinessWeek