Recap: Britain balks as rest of E.U. forges fiscal pact

December 11, 2011

A landmark summit of the 27-nation European Union ended Friday with a pledge among the nations to work toward a new treaty binding them more closely together in a pact to save the euro. ¶ Only Britain bowed out. Prime Minister David Cameron, a Conservative who cherishes the pound and looks askance at heavy-handed European regulations in British affairs, vetoed the pact. The leaders of Germany and France, the anchors of the 17 nations that share the euro and the two largest E.U. economies, hailed the accord as a “breakthrough.” German Chancellor Angela Merkel declared herself indifferent to whether Britain signed. French President Nicolas Sarkozy was less delicate. “You can’t on the one hand ask not to be in the euro and at the same time wish to be part of all the decisions affecting a currency you don’t want, and often criticize,” he said.

Business

Billionaire Philip Falcone and his hedge fund , Harbinger Capital Partners, were notified that they may be sued by the SEC for alleged “violations of the federal securities laws’ anti-fraud provisions.” Falcone gained fame with bets against the U.S. subprime mortgage market.

Goldman Sachs plans to issue four certificates of deposit linked to stocks as record-low interest rates drive investor demand for the higher-yielding CDs. The structured CDs are the bank’s first.

MF Global’s customers can receive a $2.2 billion distribution, allowing them to recover 72 percent of what they lost when the brokerage failed, a judge ruled. Jon Corzine, the firm’s former chief executive, testified at a House Agriculture hearing last week that he didn’t know where $1.2 billion in missing customer money went. A bad bet on European bonds sank the fund.

HSBC sued the MF Global brokerage trustee to establish whether he or another person is the rightful owner of gold bars worth about $850,000 and silver bars underlying contracts between the brokerage and a client.

Bank of America agreed to pay $315 million to settle claims by investors that they were misled about mortgage-backed investments sold by its Merrill Lynch unit. The class-action lawsuit was led by the Public Employees’ Retirement System of Mississippi pension fund.

Verizon Wireless is blocking Google’s Wallet software from running on the new Samsung Galaxy Nexus, citing “security and user experience.” Verizon and rivals AT&T and T-Mobile are part of a consortium called ISIS that is planning its own payment system.

Toyota cut its profit forecast for this fiscal year by 56 percent after Thailand’s worst floods in decades disrupted output of Camry and Prius vehicles. “It’s acts of God after other acts of God,” one analyst said.

The European Commission, an antitrust watchdog, is investigating whether Apple helped five major publishing houses illegally raise prices for e-books when it launched its iPad tablet and iBookstore in 2010. Apple was the first retailer that allowed publishers to move to agency agreements, which let publishers set the price that online bookshops sell e-books to consumers. The Justice Department is also investigating.

McGraw-Hill, which owns ratings firm Standard & Poor’s, says it will cut 550 jobs at its education arm and freeze all employee pensions next year as part of $100 million in cuts it is making as it splits into two companies.

General Motors, weeks after ratifying a new labor contract with the United Auto Workers, said hourly union employees achieved vehicle-quality targets and will be eligible for about $12 million in bonuses, or $250 per worker.

Hewlett-Packard will turn its WebOS software into an open-source project, aiming to get outside developers to embrace the struggling operating system it acquired in last year’s $1.2 billion purchase of Palm.

Clearwire, the struggling cellular network operator, said it plans to offer $300 million worth of Class A shares in a new public offering, the latest step in a rescue plan to keep the company afloat. Sprint Nextel, Clearwire’s biggest investor, has agreed to buy a matching amount in Class B shares.

LivingSocial has raised $176 million more from investors. The new round, disclosed in an SEC filing, values the privately held company at more than $4 billion. (CEO Tim O’Shaughnessy is the son-in-law of Washington Post Co. Chairman Donald E. Graham.)

U.S. researchers have gained access to a database of 2.4 million chemical formulas and diagrams culled from 24 years’ worth of patent applications and medical journals. IBM created the database by extracting data from about 4.7 million patents from around the world and from 11 million biomedical journal abstracts.

Exxon Mobil expects to see more hybrids on the road, with gas-sipping models like the Toyota Prius making up half of all global vehicles by 2040. It predicts that energy demand will remain flat through 2040 in developed nations.

The average rate on the 30-year fixed-rate mortgage ticked down to 3.99 percent last week. Rates have been below 5 percent for all but two weeks this year. Yet 2011 could end as the worst for home sales in 14 years.

Hey, St. Nick. This one's for you: 44 percent of children 6 to 12 years old want an iPad as a holiday gift. The iPod Touch was second with 30 percent, followed by the iPhone at 27 percent, according to a Nielsen survey.

Deals

J.C. Penney acquired a 17 percent stake in Martha Stewart Living Omnimedia for $38.5 million as the department store chain seeks to revive sales with new mini stores dedicated to the brand.

Earnings

Toll Brothers’ fiscal fourth-quarter net income of $15 million was off 70 percent, partly because last year’s quarter was helped by a $59.9 million tax benefit.

Economy

The U.S. trade deficit narrowed in October by 1.6 percent to $43.5 billion, the lowest level of the year, reflecting a drop in imports that will help give the U.S. economy a lift. Purchases from overseas fell to the lowest level since April as the demand for petroleum fell.

U.S. consumer borrowing rose in October to $2.46 trillion, the highest level in two years, propelled by gains in debt such as auto and student loans.

Gold traders are more bullish as investors buy metal at the fastest pace in a year to protect their wealth from Europe’s escalating debt crisis. Holdings in exchange-traded products backed by gold rose 108.6 metric tons since October. The extra bullion is valued at $5.99 billion. Bullion rose 21 percent, to $1,715.30 an ounce, this year on the Comex and reached a record $1,923.70 in September.

Washington

U.S. government will end a $5 billion reinsurance program that helps companies such as AT&T pay health premiums for retirees younger than 65 because it’s almost out of money. Claims filed Dec. 31 will be rejected.

The Senate rejected dueling partisan proposals to slash federal payroll taxes for 160 million Americans, while House Republicans trotted out a new, more conservative, plan that sought to link the tax issue to other GOP priorities.

Senate Republicans blocked, by filibuster, the appointment of former Ohio attorney general Richard Cordray as director of the Consumer Financial Protection Bureau.

Transitions

Butter is selling on Norway’s top auction site at about four times the normal price: a 250-gram piece starts at around $13. Norwegians following a fad diet that emphasizes high fats and low carbs have consumed the country’s stockpile.

Apple’s founding document, signed on April 1, 1976, by Steve Jobs, Steve Wozniak and Ronald Wayne, is expected to fetch as much as $150,000 when it goes on auction this week at Sotheby’s.

— Compiled from The Post and news services

Ford Motor quarterly dividend

The auto giant declared its first payout to shareholders in more than five years. The dividend will be paid March 1. Ford earned $9.28 billion in the past two years after losing $30.1 billion from 2006 through 2008.

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