WSF Headline Roundup - 1/6/09 - Treasury doles out $15B more; Dow to Sue Kuwait; JD Capital liquidating $1B fund; More hedge fund pain; Libor declines; Manhattan apartment sales drop in Q4

• Treasury invests $15B more in banks
• Dow to Take Action Against Kuwait on Halted Venture
• Hedge funds face more pain
• Hedge fund JD Capital liquidates Tempo Master fund
• Chrysler arm seeks to tap relief funding
• GM says China '08 sales up 6 pct but growth slows
• Merrill’s Brokerage Head Departs After Bank of America Purchase
• Dollar Libor Rates Resume Decline
• FSA to lift ban on short-selling but disclosure rule will remain
• Asset managers turn to corporate bonds
• Toyota to halt car production for 11 days
• Waterford talks with US groups on asset sale
• Manhattan Apartment Sales Drop for Fourth Quarter in Recession

Treasury invests $15B more in banks - CNNMoney.com

The Treasury Department said Monday it had invested $15 billion in another seven banks, including two companies that recently completed large takeovers of other banks.

Under the $700 billion Troubled Asset Relief Program, Treasury has allocated $250 billion for capital investments in banks. 

Treasury lends funds to banks in exchange for preferred shares, warrants, and high-paying dividends. The aim: to encourage strapped-for-cash financial institutions to lend more money and provide much-needed liquidity in the financial markets.....

Dow to Take Action Against Kuwait on Halted Venture - Bloomberg

Dow Chemical Co., the largest U.S. chemical maker, plans to pursue legal options against Kuwait for canceling a joint venture agreement and will seek a new partner to invest in its basic-plastics business. 

Other parties have approached Dow about acquiring an interest in the unit, the world’s largest maker of polyethylene plastic, Midland, Michigan-based Dow said today in an e-mailed statement. Dow said it will establish a formal process for securing a new venture and didn’t name the interested parties. 

Chief Executive Officer Andrew Liveris is trying to salvage his plan to gain access to low-cost raw materials and add more- profitable product lines after Kuwait last month canceled the venture, depriving Dow of cash it planned to use to acquire Rohm & Haas Co.....

Hedge funds face more pain - Financial Times

Hedge funds are suffering a New Year hangover of record proportions after an end-of-year rush to suspend or restrict withdrawals of money and the first of what is expected to be a wave of closures.

Funds from London managers GLG Partners, RWC Partners and Oceanwood Capital all introduced last-minute restrictions as the year ended, while Finnish fund Ilmatar on Monday said it would close.

Hedge funds are facing a meagre year after their worst 12 months on record left most needing to make back hefty losses before they begin earning performance fees. More than 150 – including funds from some of the biggest names in the industry, such as Tudor Investment Corp, Citadel, Cerberus Capital and Highbridge Capital – have limited redemptions.....

Hedge fund JD Capital liquidates Tempo Master fund - Reuters

Hedge fund firm JD Capital Management LLC is liquidating a roughly $1 billion fund that suffered heavy losses recently, the company's founder said on Monday.

"We are unwinding the Tempo Master fund," said J. David Rogers, a former Goldman Sachs executive. He said the fund, which invested roughly $1 billion, was exposed to what he called the "more troubled" spots of the market. People familiar with the fund said it lost more than 40 percent.

The portfolio is the latest in a string of casualties that occurred last year when the $1.5 trillion hedge fund industry suffered its worst returns in decades with the average fund losing roughly 23 percent, according to data from Hedge Fund Research.....

Chrysler arm seeks to tap relief funding - Financial Times

Chrysler’s financing unit is in talks with the US government to change its status in a way that will allow it to tap into the troubled assets relief programme and other sources of credit.

The Detroit carmaker, which received $4bn in government aid on Friday, said on Monday that Chrysler Financial first applied three years ago to be classified as an “independent lending corporation” and that the talks have recently intensified.....

GM says China '08 sales up 6 pct but growth slows - AP

General Motors Corp. said Tuesday its sales in China rose 6 percent to 1.09 million vehicles in 2008, but growth slowed as consumers held back amid an economic downturn.

GM is looking to China's booming auto market to drive global sales growth as demand in North America and other developed markets slump. In 2007, the Detroit-based automaker's China sales, including joint ventures, rose 19 percent.....

Merrill’s Brokerage Head Departs After Bank of America Purchase - Bloomberg

Merrill Lynch & Co. brokerage head Bob McCann announced plans to leave the company less than a week after Bank of America Corp. completed its acquisition of the securities firm. 

McCann, 50, a 26-year Merrill veteran based in New York, has been head of the brokerage business since 2003. He announced his departure yesterday in an internal memo from John Thain, head of Bank of America’s investment-banking and wealth-management business. Spokeswoman Selena Morris confirmed the memo. 

Bank of America Chief Executive Officer Kenneth Lewis called Merrill’s brokerage the “crown jewel” of the company when the deal was announced in September. Since then he has worked to try to prevent attrition of Merrill’s brokerage ranks to rival firms. The 16,850-broker unit outperformed Merrill’s investment-banking and money-losing trading businesses last year......

Dollar Libor Rates Resume Decline - Wall Street Journal

The cost of borrowing longer-term U.S. dollars in the interbank market resumed its downward path Tuesday, as risk appetite improved amid growing optimism over the U.S. Government's planned economic stimulus and tax-cut package.

Analysts at Royal Bank of Scotland said there had been a marked improvement in funding conditions and Libor rates looked set to fall further, while expectations of further monetary easing by central banks added to the positive tone.

Data from the British Bankers' Association showed three-month U.S. dollar Libor dropped to 1.41125% from Monday's fixing of 1.42125%, marking the lowest rate since June "04.

FSA to lift ban on short-selling but disclosure rule will remain - Daily Telegraph

A ban on the short-selling of financial shares will be lifted by the Financial Services Authority (FSA) this month, but compulsory disclosure will remain in place for a further six months, the regulator said.

The ban on short-selling the shares of 34 companies will be allowed to expire on January 16, after the temporary measure was introduced in September in an attempt to halt volatility in the financial markets. 

The regulator will extend rules that force short-sellers – investors who aim to profit by selling shares they have "borrowed" for a fee in the hope of buying them back cheaper at a later date – to disclose their positions until June 30.....

Asset managers turn to corporate bonds - Financial Times

High-grade corporate bonds are set to outperform other asset classes in 2009, fund managers and market strategists surveyed by the Financial Times have forecast. 

More than half those surveyed said high-quality corporate credit was trading at cheap levels and that this was the asset class most likely to see a rally in 2009.....

Toyota to halt car production for 11 days - Financial Time

Toyota on Tuesday said it would halt production at most of its domestic plants over an additional 11 days in February and March, highlighting the impact of the relentless decline in global demand.

Japan’s largest carmaker, which has been a benchmark for quality and efficiency, said it was cutting 18 shifts over 11 days, or the equivalent of 9 days worth of production at all 12 of its domestic facilities in those two months.....

Waterford talks with US groups on asset sale - Financial Times

Talks to salvage Waterford Wedgwood were under way with at least three US parties on Monday night after the owner of the historic crystal and porcelain brands was forced into receivership.

Lenders, led by Bank of America, called in their loans to the company, which can trace its roots back to 1759, after talks with a US private equity investor collapsed at the weekend.....

Manhattan Apartment Sales Drop for Fourth Quarter in Recession - Bloomberg

Manhattan apartment sales fell for the fourth straight quarter and prices for the most expensive apartments dropped for the first time since the recession began as the national housing slump hit the metropolitan area. 

Fourth-quarter transactions dropped 9.4 percent to 2,282 units from a year earlier, New York property appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said in a report today. While the overall median sales price rose 5.9 percent, luxury prices dropped 3.9 percent and the median for all resale apartments slid 3.6 percent. 

The U.S. recession that began in December 2007 and the global credit crisis have claimed at least three financial firms and may cost the city as many as 175,000 jobs. Finance jobs drive the Manhattan market. Employment at Wall Street investment banks accounted for almost 15 percent of the city’s total privately paid wages in the first quarter of 2006, according to the U.S. Bureau of Labor Statistics.....