The laws of supply, demand and panic

Sunday, March 6, 2011; G02

Oil prices surged as Libya's bloody rebellion escalated and anxiety grew that the instability would trigger unrest in other oil-exporting nations, including Algeria, Oman, Yemen, Saudi Arabia and Nigeria. ¶ U.S. crude oil futures settled at $104.42 a barrel, their highest mark since September 2008. And Saudi Arabia raised output in response to Libya's disruption. Oil experts said there is enough oil in storage and spare capacity worldwide to meet short-term needs. ¶ Fed Chairman Ben S. Bernanke said the agency was prepared to respond if rising oil prices feed inflation. Gas prices set records in Europe and tipped past $4 a gallon in California. Economists warned higher prices could hurt the U.S. economic recovery.


Rajat Gupta, a former director of Goldman Sachs and Procter & Gamble, was accused by the SEC of passing insider information to Galleon's Raj Rajaratnam that allegedly led to $18 million in profits and avoided losses. Goldman Sachs CEO Lloyd C. Blankfein agreed to testify for the U.S. government at the Rajaratnam trial.

Warren Buffett told shareholders in his annual letter that Berkshire Hathaway has $38.2 billion in cash and equivalents and he's "itchy" for a major acquisition. Earnings rose 61 percent to $13 billion in 2010, boosted by the purchase of Burlington Northern Santa Fe. Berkshire also took a $1 billion write-down on distressed bonds.

NFL, players' union extended talks on a collective-bargaining agreement, delaying by at least a week the chance of a season-threatening lockout.

Twitter is in talks to sell a minority stake to a fund run by J.P. Morgan. The investment could value Twitter at more than $4 billion.

GM, pushing ahead with its turnaround, is speeding up restructuring of its Opel operation in Europe.

Steve Jobs, out on medical leave, made an unexpected appearance at Apple's launch of iPad2; said "competitors are just flummoxed" by the tablet.

Christian Dior fashion house dismissed star designer John Galliano after a video emerged apparently showing him making racially abusive remarks. Galliano apologized.

Massey Energy security chief was charged with obstructing the investigation of the 2010 blast in West Virginia that killed 29 miners.

AIG is pushing ahead with plans to cash out its stake in MetLife through public offerings that could raise $9 billion.

AT&T suffered a defeat as the Supreme Court ruled personal-privacy rights don't apply to corporations under the Freedom of Information Act. The telecom had sought to block disclosure of e-mails and documents provided to the Federal Communications Commission during a probe into whether it overbilled public schools in New London, Conn.

Academy Awards drew a television audience of 37.6 million people, down 9.9 percent from a year ago.

Las Vegas Sands said U.S. authorities are investigating compliance issues with antibribery laws at the casino company's Macau operations.


J. Crew Group won shareholder approval for a $3 billion buyout. Private-equity firms TPG Capital and Leonard Green & Partners will acquire the apparel retailer.

Ventas, health-care real-estate company, will acquire Nationwide Health for $5.8 billion. Demand for senior care is fueling acquisitions by health-care companies.


HSBC reported that it had more than doubled its profit in 2010, to $13.2 billion. It also warned that costs had climbed and that new equity rules could hurt future profit.

Live Nation Entertainment reported a wider fourth-quarter loss, $86.1 million against a loss of $29.7 million a year earlier. Ticket sales dropped 10 percent in 2010.


Private hiring helped propel the fastest job growth in a year in February as employers added 192,000 jobs. The jobless rate dipped to 8.9 percent; 13.7 million are out of work but looking.

White House proposed $6.5 billion more in spending cuts as Vice President Biden opened talks with congressional leaders aimed at averting a government shutdown.

Premier Wen Jiabao said China would lower its official economic growth target to 7 percent from 7.5 percent in an effort to contain inflation and restructure its economy.

New car sales climbed 11 percent, to 11.4 million, in 2010, as loans became available again; more than 859,000 borrowers with subprime credit bought cars in 2010. GM, Nissan and Toyota all reported higher sales in February as the industry posted a 27 percent gain overall.

Manufacturing gained momentum in U.S. and Europe in February.

Fed's beige book survey of regional economic conditions found that manufacturers are passing along higher commodities costs to consumers.

Wisconsin Gov. Scott Walker proposed cutting state spending over two years by $4.2 billion. The budget would eliminate 21,235 state jobs.

Ohio state senators supported a bill that would prohibit public-employee unions representing 400,000 state and local workers from bargaining over health benefits and pensions. Gov. John Kasich said he expects it to become law.

India, Singapore, Indonesia and Brazil are all issuing subsidies to offset rising food and fuel prices.

European Central Bank signaled an interest rate hike over inflation fears.


Ben S. Bernanke was relatively upbeat about the economy in two days of testimony on Capitol Hill, where he delivered his report on monetary policy.

U.S. Treasury froze $30 billion of Libyan leader Moammar Gaddafi's assets. President Obama signaled a willingness to intervene militarily in Libya's crisis, saying Gaddafi "has lost legitimacy to lead, and he must leave."

U.S. officials reportedly closed in on a settlement with U.S. banks accused of fraudulent foreclosure practices.

SEC voted to move ahead with new limits on bonuses for large brokers and investment advisers.

U.S. expanded its investigation of tax evaders to Israeli and Asian banks, after bringing charges against Swiss banks.

Interior Department approved the first new deepwater drilling permit in the Gulf of Mexico since the BP explosion. Noble Energy was granted permission to resume drilling in 6,500 feet of water of Louisiana's coast.

The South Korea free-trade deal's ratification by Congress was threatened by a stalemate between Obama and House Republicans, who want pacts with Korea, Colombia and Panama considered together.

- Compiled from The Washington Post and news services

$1.16 trillion Value of U.S. Treasury securities owned by China

The U.S. Treasury revised its estimate of foreign holdings of U.S. debt and increased China's stake to 42 percent of its reserves, up from 32 percent. The other major revision wasfor Britain, which holds $272.1 billion - or about half what was previously estimated.

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