WSF Headline Roundup - 1/7/09 - Ezra Merkin toast at GMAC?; IRS relief to taxpayers; Alcoa cuts; Cheap oil over?; Satyam Chairman resigns over falsified documents; Apartment rents decline; Shopping mall vacancies @ 10 yr high

• GMAC’s Future as Bank May Not Include Ezra Merkin as Chairman
• IRS changes offer relief to delinquent taxpayers
• FSA mulls wider short selling disclosure rules
• Alcoa to Reduce Capacity By 18%, Cut 13,500 Workers
• Fed Policy Makers Saw ‘Substantial’ Risks to Economy
• Don't get used to cheap oil, analysts say
• Barclays to cut 400 technology jobs
• Cisco Intensifies Wooing of Entertainment Firms
• Satyam Chairman Resigns After Falsifying Accounts, Shares Fall
• Apartment rents show first decline in over 5 years
• U.S. Shopping Mall Vacancies Reach 10-Year High as Stores Fail

GMAC’s Future as Bank May Not Include Ezra Merkin as Chairman - Bloomberg

J. Ezra Merkin, whose hedge funds lost billions of dollars on investments with Bernard Madoff, may have to relinquish his post as chairman of GMAC LLC after the lender was bailed out by the federal government. 

To become a bank holding company and gain eligibility for federal funds, Detroit-based GMAC was required to form a new seven-member board led by an independent chairman, according to a Jan. 2 regulatory filing. That disqualifies Merkin, who was appointed to the position of non-executive chairman two years ago by then-majority-owner Cerberus Capital Management LP. 

Merkin, 55, presided over $7.9 billion of losses at GMAC during five quarters caused by defaults on subprime mortgages and a collapse in auto sales. He closed his $1.5 billion Gabriel Capital LP last month after disclosing losses tied to Madoff, who allegedly ran a $50 billion Ponzi scheme. Gabriel and two other Merkin funds, Ascot Partners LP and Ariel Fund Ltd., face lawsuits for investing with Madoff......

IRS changes offer relief to delinquent taxpayers - USA Today

The IRS unveiled a series of initiatives Tuesday aimed at helping people who can't pay their taxes because they're unemployed or experiencing other financial hardships.

As the economic downturn worsens, the IRS expects to see an increase in delinquencies among taxpayers who have ordinarily paid taxes on time, IRS Commissioner Doug Shulman said. Steps the IRS is taking:....

FSA mulls wider short selling disclosure rules - Reuters

The financial regulator is considering forcing investors to disclose short positions in all stocks, not just banks and insurers, it said on Wednesday.

The Financial Services Authority on Monday said its ban on short-selling financial stocks would end on January 16, but investors still need to disclose significant short positions on 34 banks and insurers until at least the end of June.

As part of that announcement, the financial watchdog said it would publish a separate consultation paper on its long-term plans for short selling.

One of those proposals is to extend the disclosure requirement to all UK stocks, a spokeswoman for the FSA said....

Alcoa to Reduce Capacity By 18%, Cut 13,500 Workers - Bloomberg

Alcoa Inc., the world’s largest aluminum maker, announced its third production cut in as many months and said it will reduce its global workforce by 13,500 in response to declining demand and prices. 

The moves will lower the company’s annual smelting capacity by about 750,000 metric tons, or about 18 percent, New York-based Alcoa said today in a statement. The company also will incur charges of as much as $950 million related to restructuring costs, impairments and worker dismissals, which amount to about 13 percent of Alcoa’s employees. 

“The news is pointing in the right direction, but we believe Alcoa has to take even more drastic action in cutting high-cost smelters,” Tony Robson, a Toronto-based analyst at BMO Capital Markets, said today in a telephone interview. “It’s an extremely tough metal to deal in right now with the majority of the world’s producers losing cash.” Robson rates the shares “market perform.”...

Fed Policy Makers Saw ‘Substantial’ Risks to Economy - Bloomberg

Federal Reserve policy makers saw “substantial” risks to the slumping economy last month as they cut the benchmark interest rate to a record low and pledged to expand emergency loans if necessary. 

Central bank officials believed “the economic outlook would remain weak for a time and the downside risks to economic activity would be substantial,” according to the minutes of the Dec. 15-16 Federal Open Market Committee meeting released today in Washington. The FOMC discussed setting an inflation target to discourage expectations that price increases will slow “below desired levels.” 

Fed Chairman Ben S. Bernanke has more than doubled the central bank’s balance sheet to $2.3 trillion in the past year while increasing loans to financial institutions reeling from $1 trillion in writedowns and losses. The New York Fed began buying mortgage-backed securities yesterday as part of a $500 billion program to bolster the U.S. housing market....

Don't get used to cheap oil, analysts say - AP via Sun Journal

All that money you're saving these days at the gas pump? You might want to put it in the bank.

The same cheap oil that's providing relief to drivers and businesses in an awful economy is setting the stage for another price spike, perhaps as soon as next year, that will bring back painful memories of last summer's $4-a-gallon gas.

The oil industry is scaling back on exploration and production because some projects don't make economic sense when energy prices are low. And crude is already harder to find because more nations that own oil companies are blocking outside access to their oil fields......

Barclays to cut 400 technology jobs - Reuters

Barclays is to cut just over 400 jobs in its technology departments, it said on Wednesday.

Barclays said a review of its IT operations will see about 158 permanent staff and 250 contractor positions go, mainly in Cheshire and London.

The bank said it would try to mitigate compulsory redundancies by releasing contractors, closing vacancies and offering staff the chance to apply for other jobs.

Cisco Intensifies Wooing of Entertainment Firms - Wall Street Journal

Cisco Systems Inc., stepping up its effort to court media and entertainment companies, is using the Consumer Electronics Show to deliver a high-profile service to manage social networks and to show off its first home audio system.

Plans to develop Cisco's EOS offering, for entertainment operating system, were first discussed at CES a year ago. At this year's show, Cisco is expected to announce the availability of the underlying software and service, which are designed to help media companies to build online communities....

Satyam Chairman Resigns After Falsifying Accounts, Shares Fall - Bloomberg

Satyam Computer Services Ltd. Chairman Ramalinga Raju resigned after announcing the company had falsified accounts and assets, sending shares of the Indian software-services provider tumbling in Mumbai. 

Satyam had 50.4 billion rupees ($1.04 billion) of “inflated” cash on its balance sheet at the end of Sept. 30, the Hyderabad-based company said in a release today. Raju, 53, unsuccessfully tried to sell two companies last month to Satyam in the “last attempt to fill the fictitious assets with real ones,” Hyderabad-based Satyam said in a statement sent to the Bombay Stock Exchange, citing the chairman......

Apartment rents show first decline in over 5 years - Reuters

Average rents for U.S. apartments fell in the fourth quarter, as a sharp economic downturn and rising unemployment left Americans unwilling to pay higher prices, according to data released on Wednesday.

Rents fell 0.4 percent in the final quarter of 2008, the first decline since early 2003, the study by real estate research firm Reis Inc found.

The vacancy rate rose to 6.6 percent, a level last seen in the first quarter of 2005, and up from 5.7 percent a year earlier.....

U.S. Shopping Mall Vacancies Reach 10-Year High as Stores Fail - Bloomberg 

Vacancies at U.S. malls and shopping centers approached 10-year highs in the fourth quarter, and are set to rise further as declining retail sales put more stores out of business, research firm Reis Inc. said. 

Regional mall vacancies rose to 7.1 percent last quarter from 6.6 percent in the third quarter. It was the highest vacancy rate since Reis began tracking regional malls in 2000, as well as the largest quarter-to-quarter jump in vacancies, according to New York-based Reis. 

More than a dozen retailers, including Circuit City Stores Inc., Linens ‘n Things Inc. and Sharper Image Corp., filed for bankruptcy protection in 2008 as the credit squeeze and recession drained sales. Vacancies will rise further until the job market recovers, housing prices stabilize and lending resumes, restoring consumer confidence, said Reis.....