Wednesday newspaper round-up: Fiscal cliff, Shell, Goldman Sachs
Fiscal cliff averted; drill ship runs aground; Goldman execs in cash grab
The US House of Representatives has voted to avert the the fiscal cliff, sparing most Americans from tax hikes and spending cuts that had threatened to plunge the economy into recession in 2013.
The financial compromise Bill, which was passed 257 – 167 after a chaotic, late night session in the Republican dominated House, will now move to President Obama’s desk for his signature, which is expected to come quickly.
The vote, which relied heavily on Democrats to win passage contained the first American income tax rise in two decades but leaves many budget issues unresolved before another fiscal deadline in about two months on the need to raise the federal borrowing limit. [The Times]
A large drill ship belonging to the oil company Shell has run aground off Alaska after drifting in stormy weather, company and government officials said. The ship, the Kulluk, broke away from one of its tow lines on Monday afternoon and was driven, within hours, on to rocks just off Kodiak Island, where it grounded at about 9pm Alaska time, officials said.
The 18-member crew had been evacuated by the coastguard late on Saturday because of risks from the ongoing storm. There was no known spill and no reports of damage, but the Kulluk had about 155,000 gallons of fuel on board, said coastguard commander Shane Montoya, the leader of the incident command team. [The Guardian]
Goldman Sachs chief executive Lloyd Blankfein and departing chief financial officer David Viniar both exercised restricted stock units on New Year’s Eve that delivered them $4.2m in cash apiece. Other executives, including vice-chairmen Michael Evans and John Weinberg, global head of human capital management Edith Cooper, chief of staff John Rogers, general counsel Greg Palm, global head of compliance Alan Cohen, and chief accounting officer Sarah Smith, also exercised restricted stock units that generated anywhere from $1.5m to $3.8m, according to filings with the US Securities and Exchange Commission. [The Telegraph]
A London-listed company’s plans to create the world’s first underwater goldmine on the Pacific seabed have hit the rocks. Nautilus Minerals’ problems come as China and Russia’s duel for riches at the bottom of the ocean intensifies. Nautilus was planning to mine gold, copper and silver under the Pacific Ocean but has run into conflict with its partner, the government of Papua New Guinea, about the cost of the project.
The company, part-owned by the Anglo American mining group, has put its Solwara 1 prospect on ice, laid off staff and postponed equipment orders, and is looking at taking its subsea mineral operations elsewhere. [The Guardian]
Britain will have to “acclimatise” to the “hard grind” of another year of squeezed wages, rising unemployment and low growth, leading economists warned, as the Government was accused of hoping “something just turns up” to deliver the recovery.
The majority of City economists polled by The Daily Telegraph reckon growth will undershoot the official 1.2% forecast this year, resulting in the fifth year in six of sub-1pc growth, with the Centre for Economics and Business Research warning of a 50% chance of a triple-dip recession. [The Telegraph]
After finishing 2012 on a high note, investors believe US equities are bound to extend last year’s run. Progress made in US fiscal negotiations, easing eurozone fears and recent supportive economic data from China and other developing nations may help set the stage for higher corporate profits and stock gains, analysts say.
“As we begin the new year, improved confidence is perhaps the result of strides made on many fronts,” says Jim Paulsen, chief investment strategist at Wells Capital Management. Mr Paulsen is forecasting that the benchmark S&P 500 will rise to record levels in the year to come, after notching an impressive 13.4% t gain in 2012 in spite of recession fears and a jump in global market volatility. [Financial Times]
The retail sector is “certain” to see further collapses and large swathes of stores closed this year, following a sharp jump in administrations in 2012. Deloitte, the accountancy firm, blamed the continued squeeze on household finances and the inexorable shift of spending to the internet for its gloomy forecast, predicting more chains would fold in the first quarter of this year. It said 194 retailers called in administrators last year, a 6% jump on 2011 and an 18%t leap on the previous year. [The Independent]