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Heard in Davos 2009: Dispatches from the Conference

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  Thursday, 29 Jan 2009 | 4:51 AM ET

Could the SEC also Follow the UK's Lead?

Posted By: Kim Khan
"If it looks like a bank and quacks like a bank, we've got to capitalize it as a bank," FSA Chairman Lord Adair Turner tells CNBC. »Read more
  Wednesday, 28 Jan 2009 | 5:07 PM ET

Stocks Rally to the Finish, Led by Banks

Posted By: Cindy Perman
Stocks ended at session highs Wednesday, led by banks, amid enthusiasm for this so-called "bad bank" plan and as the $825 billion stimulus package neared approval. »Read more
  Wednesday, 28 Jan 2009 | 5:02 PM ET

The Quick and the ShamWow

Posted By: Allen Wastler

Want to point out a couple of cool things with our blogs this week.

One is pretty usual ... Darren Rovell doing a wild and fun ... and informative ... contest in his SportBiz blog. All hail the ShamWow .

The other is a new one for us. Becky Quick of Squawk Box fame is blogging for us out of Davos this week. She isn't one of our usual bloggers, but boy, she is natural. You can find her stuff here . Some of it is serious, but most of it is neat little behind the scenes stuff. The whole pedometer saga is priceless.

She rocks. Hope you folks out there think she rocks too.

»Read more
  Wednesday, 28 Jan 2009 | 4:01 PM ET

Stocks Hold Gains After Fed Comments

Posted By: Cindy Perman|CNBC.com

Stocks held onto a nearly 200-point gain Wednesday after the Federal Reserve issued its statement on the economy.

The Fed held its target for short-term interest rates between 0 and 0.25 percent, as expected, and said that it was prepared to buy long-term Treasury Securities if necessary. The Fed noted that credit was "extremely tight," an escalation from just "tight" in its last statement.

What really juiced stocks today was anticipation of the Obama administration's $825 billion economic stimulus plan and the so-called "bad bank" plan, which set banks off like a bottle rocket.

Citigroup and Bank of America soared more than 10 percent each amid hope that help is on the way for the battered sector as the Obama administration is said to be close to finalizing a “bad bank” plan to mop up banks' toxic assets.

Rounding out the Dow's top three was JPMorgan , which gained more than 7 percent.

Wells Fargo shares surged nearly 20 percent as the bank reported a surprise loss but maintained its dividend and said it doesn't need any more bailout fundsto help it absorb Wachovia bank.

The Financial Select SPDR exchange-traded fund gained more than 8 percent as traders looked for the sector to get a big boost.

>>Why is the market so focused on bank stocks?

>> Track S&P Financial-Sector Leaders

Investors were enthused about the gigantic stimulus plan, which is said to be close to $900 billion now. The House of Representatives is slated to vote on the plan today. If it clears the House, then Senate leaders could begin working on their version.

Early earnings showed a mixed bag, with companies reporting lower profits but investors looking for positive nuggets amid the gloom.

AT&T reported its profit dropped, hurt by one-time fees to get the exclusive rights to be the sole iPhone carrier and more customers cutting off their land lines.

This came a day after Verizon met its earnings target but reported a slowdown in its wireless business.

Boeing reported an unexpected loss as its results were hurt by a strike and delays for its new 747 jumbo jet.

Legg Mason posted a bigger-than-expected lossas withdrawals from its funds soared and the asset manager took charges related to its wealth-management division. But the second-largest publicly traded U.S. asset manager said it is "aggressively" cutting costs.

After the bell on Tuesday, Yahoo beat Wall Street expectations, helped by cost cuts, but warned the bleak advertising market is going to hurt sales going forward. Sun Microsystems also topped forecasts with a smaller-than-expected loss.

Political and business leaders from around the globe gathered at the World Economic Forum in Davos, Switzerland, to discuss the state of the economy and the potential road to recovery.

>> Check out CNBC's full coverage of Davos , including our Heard on the Mountain blog .

In economic news, mortgage applications fell to November levels after a tick higher in interest rates discouraged potential home buyers. The news came during a modestly positive week for housing, with previous reports showing a gain in home buying and a drop in prices that was a bit less than analysts expected.

Still to Come:

WEDNESDAY: Davos Economic Forum begins; Fed decision on interest rates; Earnings from Pfizer, Boston Scientific, Qualcomm and Starbucks
THURSDAY: Weekly jobless claims; durable-goods orders; new-home sales; Earnings from Altria, Amazon, Broadcom, Colgate-Palmolive, Ford, Eli Lilly and Wyeth
FRIDAY: Q4 GDP; consumer sentiment; Earnings from Chevron, ExxonMobil, P&G and Honeywell

Send comments to cindy.perman@nbcuni.com .

»Read more
  Wednesday, 28 Jan 2009 | 12:01 PM ET

Long Roads, Hubris, Oil and Beer

Posted By: Kim Khan

It takes several turns around the Congress Center to get the pulse of the meeting, but you can get into the groove fairly quickly after that. You relearn how to look at name tags instead of faces and pick up the whit badges that discern delegates and VIPs from the ordinary working press.

The mood is more serious that last year, but not more somber. A few intense discussions were drawing in participants from around the center in between session, although the requisite numbers were propped up at the Plenary Bar—a notable meeting spot.

One thing looks clear and that's that whatever can be done to solve the current crisis is going to take time.

A few buzz phrases: "multi-year plan," "not anytime soon," "it will get worse," "a long road."

Here's a snapshot of this afternoon action in the corridors and lounges:

Who Has a Monopoly on Hubris?

Stephen Roach, chairman of Morgan Stanley Asia, and New York Times financial columnist Floyd Norris (in the elite white-badge category, yet still a journalist) discussing another bad day to be a banker and whether it is the East or the West that feels more of a sense of entitlement to rule the economic world.

Doors Are Locked, Sorry

They're not kidding when they talk about demand for information at the seminars. Arcelor Mittal Chief Financial Officer Aditya Mittal was not allowed into a session after it had started, which ignited a flurry of headless-chicken like activity from personal assistants.

Mittal hurried out of the open area of the center, but don't worry, as a member of one of the world's wealthiest families he probably has somewhere nice to crash.

Brewing Reality

The big consolidation wave in the brewing industry is naturally going to slow down in the current climate, but it's the smaller companies looking for a buyer that have to face the sticker shock, SABMiller CEO Graham Mackay said.

Prices haven't adjusted to the reality that the buyers are facing, Mackay said. Demanding ten to 13 times earnings before interest, taxes, depreciation and amortization—based on trailing earnings—just aren't justifiable, he said, adding that it's not just cash deals facing problems.

"If you've got a stock price at seven and someone wants ten for their company, that's hard to justify to shareholders," he said.

Remember Oil?

In middle of all the conversations about banks and finance there was an oasis of academia discussing what the real price of oil is and where was the recent low points?

The group included two people from MIT, Daniel G. Nocera, The Henry Dreyfus Professor of Energy and Professor of Chemistry and Ernest Moniz, Co-Director of the Laboratory for Energy and the Environment.

More From CNBC.com

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  • "The US Banking System is Insolvent": Dr. Doom

  • Complete Coverage from Davos

  • »Read more
      Wednesday, 28 Jan 2009 | 11:10 AM ET

    Stocks Take Off as Banks Surge

    Posted By: CNBC.com

    Stocks shot out of the gate Wednesday as lawmakers prepared to move ahead on an $825 billion economic stimulus plan and banks got a boost from this so-called "bad bank" plan.

    Citigroup and Bank of America soared more than 10 percent each amid hope that help is on the way for the battered sector as the Obama administration is thought to be close to finalizing a “bad bank” plan to mop up banks' toxic assets.

    Rounding out the Dow's top three was JPMorgan , which gained more than 7 percent.

    Wells Fargo shares surged nearly 20 percent as the bank reported a surprise loss but maintained its dividend and said it doesn't need any more bailout fundsto help it absorb Wachovia bank.

    The Financial Select SPDR exchange-traded fund gained more than 8 percent as traders looked for the sector to get a big boost.

    >> Bank Stocks Soar: Track Them Here

    Investors were also enthused about the gigantic stimulus plan, which is said to be close to $900 billion now. The House of Representatives is slated to vote on the plan today. If it clears the House, then Senate leaders could begin working on their version.

    Early earnings showed a mixed bag, with companies reporting lower profits but investors looking for positive nuggets amid the gloom.

    AT&T reported its profit dropped, hurt by one-time fees to get the exclusive rights to be the sole iPhone carrier and more customers cutting off their land lines.

    This came a day after Verizon met its earnings target but reported a slowdown in its wireless business.

    Boeing reported an unexpected loss as its results were hurt by a strike and delays for its new 747 jumbo jet.

    Legg Mason posted a bigger-than-expected lossas withdrawals from its funds soared and the asset manager took charges related to its wealth-management division. But the second-largest publicly traded U.S. asset manager said it is "aggressively" cutting costs.

    After the bell on Tuesday, Yahoo beat Wall Street expectations, helped by cost cuts, but warned the bleak advertising market is going to hurt sales going forward. Sun Microsystems also topped forecasts with a smaller-than-expected loss.

    Investors also looked to a key policy meeting of the Federal Open Market Committee for more action to stem the credit crisis.

    Rate cuts aren't an option anymore, so the focus will shift to any alternative action the Fed hints at in its statement, such as printing money.

    The FOMC is due to issue the statement at 2:15 pm ET.

    Political and business leaders from around the globe gathered at the World Economic Forum in Davos, Switzerland, to discuss the state of the economy and the potential road to recovery.

    >> Check out CNBC's full coverage of Davos , including our Heard on the Mountain blog .

    In economic news, mortgage applications fell to November levels after a tick higher in interest rates discouraged potential home buyers. The news came during a modestly positive week for housing, with previous reports showing a gain in home buying and a drop in prices that was a bit less than analysts expected.

    Still to Come:

    WEDNESDAY: Davos Economic Forum begins; Fed decision on interest rates; Earnings from Pfizer, Boston Scientific, Qualcomm and Starbucks
    THURSDAY: Weekly jobless claims; durable-goods orders; new-home sales; Earnings from Altria, Amazon, Broadcom, Colgate-Palmolive, Ford, Eli Lilly and Wyeth
    FRIDAY: Q4 GDP; consumer sentiment; Earnings from Chevron, ExxonMobil, P&G and Honeywell

    Send comments to cindy.perman@nbcuni.com .

    »Read more
      Wednesday, 28 Jan 2009 | 9:08 AM ET

    Time for Burger King to Cater

    Posted By: Kim Khan

    If an army travels on its stomach, it's not surprising that the Davos army can be drawn by scents of comestibles.

    »Read more
      Wednesday, 28 Jan 2009 | 7:39 AM ET

    Infosys CEO Wants Innovation, More Veggie Options

    Posted By: CNBC.com

    Infosys CEO Kris Gopalakrishnan is guest blogging for CNBC at WEF. Here are some of his thoughts he related to us as the event gets underway, including what he hopes to see from the sessions, what his company discloses on banks and what he hopes to see at the buffet table.

    What Can WEF Achieve this Year?

    The world has completely changed from last year. Clearly after Sept. 15 it's a different world with economic turmoil.

    This provides an opportunity for us to look at what the things are that we need to do in three areas.

    1. Crisis of confidence. How do we restore trust, confidence in institutions so that economic activity can come back?

    In this regard, I also believe we have to look at how companies embrace values. Regulators can only do so much.

    2. Defining success. If it's defined only in financial terms, then you will have these situations repeating in the future. The solution includes society, it includes the environment, it includes a balance between short-term and long.

    3. The concept of risk itself. In some sense it's related to the second outcome of success. Risk will have to be defined better, with an understanding of the implications from a long-term perspective.

    Innovations are necessary for creating new business. But if the long-term implications are going to be negative we need to protect ourselves.

    What are the ways we can protect ourselves from the negative implications of innovation?

    What's New this Year?

    I am a vegetarian, so I hope there will be more choices available to vegetarians.

    Also, it's good for the environment. Vegetarians use less carbon and I'm happy to be a vegetarian. Also this year there is more participation from political leaders. It's going to be interesting.

    »Read more
      Wednesday, 28 Jan 2009 | 7:33 AM ET

    Not Gloom, but 'Now What?': Alcatel-Lucent CEO

    Posted By: CNBC.com

    Alcatel-Lucent CEO Ben Verwaayen is guest blogging for CNBC.com. Here are some of his thoughts related to us on the first day at Davos, including the shift from chit-chat to note- taking, the presence of Russia and China and if executives really travel here touting cost cuts.

    »Read more
      Wednesday, 28 Jan 2009 | 7:18 AM ET

    Alcatel-Lucent Talks about What to Expect from WEF

    Posted By: CNBC.com

    "If Davos wouldn't be there we'd have to invent it, given the circumstances we're in. This is a time when we need every mind that we can find, we need to have minds working together from all different walks of life? everybody should join forces," Ben Verwaayen, CEO of Alcatel-Lucent, told CNBC.com.

    »Read more

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