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President-elect Barack Obama’s economic stimulus package will include hundreds of billions of dollars worth of tax breaks for individuals and businesses, according to a transition official and Democratic aides.

Obama is asking that tax cuts make up 40 percent of a stimulus package, the people say. The measure may be worth as much as $775 billion, a Democratic aide says, meaning tax cuts may constitute more than $300 billion of the legislation.

The dollar today rose to the highest level in almost three weeks against the euro and also surged against the yen on speculation that the Obama plan would help the U.S. economy recover from recession.

Making tax cuts such a large part of the stimulus may help win support from congressional Republicans. Senate Minority Leader Mitch McConnell, a Kentucky Republican, said his party would support an immediate middle-class tax cut as part of any stimulus package.

“Republicans, by and large, think tax relief is a great way to get money to people immediately,” McConnell said yesterday on ABC’s “This Week.”

The plan would attempt to boost consumer demand by spending $140 billion on tax breaks worth $500 for individuals and $1,000 for couples, according to a House Democratic aide. The change would come by altering tax-withholding rules, rather than through a rebate check as with the previous stimulus plan enacted last year, so that workers would see an immediate increase in their take-home pay.

The $500 tax credit would apply to the first $8,100 of wages, meaning a worker who earns $24,400 a year and is paid twice a month would get about $60 extra per paycheck for four months.

Business Tax Breaks

For businesses, the aide said, lawmakers will use similar measures they’ve employed in past stimulus bills, such as allowing companies to get refunds for taxes paid in any or all of the past five years by deducting losses they’ve incurred now; those losses can currently only be carried back two years.

Congress is also likely to include incentives such as accelerated depreciation to encourage companies to buy equipment now rather than defer such investments. The plan also attempts to combat joblessness by offering companies tax breaks for hiring more workers, the aide said cash advance no fax.

The tax provisions are also likely to repeal the alternative minimum tax on municipal bonds issued to build airport runways, sewer systems and other privately run facilities that benefit the population at large, another aide said. Congress is unlikely to enact a new round of incentives for U.S.-based multinational corporations to repatriate foreign earnings at a discounted tax rate as urged by business groups such as the Chamber of Commerce, that aide said.

Accelerated Tax Breaks

Many of the business tax incentives would be accelerated so that any dollar written off now would not be able to be claimed in future years, the aide said. That would reduce the long-term impact of the tax cuts on the federal budget deficit.

Obama is slated to meet today with congressional leaders from both parties to discuss the plan. Democrats said Congress probably won’t be able to complete work on the plan by January 20, the day of the inauguration, as some had hoped.

“It’s going to be very difficult to get a package put together that early,” said House Majority Leader Steny Hoyer in an interview on “Fox News Sunday.” “We want to do this right.” He said he expects the House to pass the bill by the end of the month and get the legislation through the Senate and signed into law in February.

Urgency

Senate Majority Leader Harry Reid, in an interview yesterday on NBC’s “Meet the Press,” downplayed the importance of what he called a “false” deadline. “The urgency of this, everyone knows about — but I’m not going to have some false deadline,” Reid said. “It’ll take as much time as it needs to get done.”

Obama has called on lawmakers to quickly pass legislation to prop up the economy, which is in its worst slump in decades and could deteriorate further without significant fiscal stimulus. Economists surveyed by Bloomberg last month projected gross domestic product would shrink in the fourth quarter by 4.3 percent, the biggest decline since 1982.

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As 2009 approaches, plummeting oil prices have sent the price of gasoline to the lowest level in nearly five years, according to a daily survey of gas station credit card swipes.

Gas prices fell for the tenth consecutive day Monday, according to motorist group AAA. Regular unleaded fell to an average of $1.619 a gallon, the lowest since gas hit $1.617 a gallon in January 2004.

Prices are down nearly $2.50, or more than 60%, since hitting a record average high of $4.114 a gallon this July. Prices have plummeted along with the price of crude oil, the main ingredient in gas, as the current economic has crisis intensified and threatened demand for petroleum-based fuels.

Oil has shed more than $100 a barrel since July.

"When you have the price for the raw material drop over $100 a barrel, that’s why you see the price of gasoline drop," said AAA spokesman Troy Green.

In the United States, the world’s largest oil consumer, citizens drove 100 billion fewer miles during the 12-month period between November 2007 and October 2008 compared with the prior year, according to the U.S. Department of Transportation.

And crude demand in China fell 3 payday cash advances.2% in November compared to the prior year due to lower imports and a decline in refinery usage, according to estimates compiled by Reuters.

Gas may continue to sell at record lows heading into 2009 unless economic activity shows some sign of recovery, according to Green.

Usually gas prices rise in the spring as Americans take to the road.

"Will the economy be in such bad shape that we don’t see that typical runup?" posed Green.

State prices: Prices remained above $2 a gallon in only two states Monday: Alaska ($2.518) and Hawaii ($2.332).

Gas was cheapest in Missouri at $1.419 a gallon on average, and sold for less than $1.50 on average in ten states.

Diesel: Meanwhile the price of diesel fuel, which is used in most trucks and commercial vehicles, fell to $2.435 on average Monday.

The AAA figures, compiled by Oil Price Information Services, are state-wide averages based on credit card swipes at up to 100,000 service stations across the nation. 

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Japan’s economy may shrink at an annual 6.5 percent pace this quarter, Bank of America Corp. said after reports last week showed industrial production and exports posted the biggest declines on record.

Gross domestic product in the three months ending Dec. 31 will decline more than the 2.7 percent previously predicted, said Tomoko Fujii, head of Japan economics and strategy at Bank of America in Tokyo.

Companies from Toyota Motor Corp. to Sony Corp. idled plants and fired workers this quarter as recessions in the U.S. and Europe caused sales of cars and televisions to collapse. The global slump is spreading to developing markets including Asia, the destination for about half of Japanese exports.

“External demand has vanished all of a sudden,” said Fujii. “Almost every industrialized nation is in a recession. Even in China, growth is slowing sharply.”

A 6.5 percent annualized contraction would be the steepest since the first quarter of 1998, when the Asian financial crisis and a sales-tax increase led to a 7.5 percent decline. The world’s second-largest economy shrank in each of the past two quarters, entering the first recession since 2001 no teletrak payday loan.

Factory output plunged 8.1 percent in November from October, the most since comparable data were first kept 55 years ago. Exports slid an unprecedented 26.7 percent from a year earlier.

Consumers at home are unlikely to pick up the slack. Household confidence is at a record low and the government has indicated it doesn’t plan to add to two stimulus packages it has yet to implement.

“Japan needs further economic measures as demand from abroad is totally lacking and will probably decline further in the first quarter,” Fujii said.

Finance Minister Shoichi Nakagawa told the Financial Times that the government has no immediate plans to draft another stimulus, saying its priority is to carry out measures announced since October. The plans, which include spending about 10 trillion yen ($110 billion) on employment and aid for households, still await parliamentary approval.

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When the Chrysler plant in Newark, Del., shut its doors on Dec. 19, more than 1,000 workers there suddenly joined the ranks of the unemployed.

At least they will be able to get unemployment insurance.

Most jobless workers can’t.

Across the United States, only 37 percent of workers who lose their jobs typically collect unemployment benefits, according to U.S. Labor Department statistics.

They often miss out because they didn’t earn enough while working, or their work history was not continuous enough to make them eligible under state unemployment laws — usually written in the pre-computer era when tracking payrolls was much slower.

"I think it’s a shock to people that the safety net is in such sad shape," said Maurice Emsellem, co-policy director at the National Employment Law Project, a pro-worker organization advocating for the bill. "A lot of people fall through the cracks."

At a time when the recession is a year old and the number of unemployed has risen to 10.3 million, there is a real question about where federal unemployment dollars should go.

Should they be sent directly to states’ strained employment trust funds, enabling states to keep from raising unemployment taxes on already beleaguered employers? Or should they go to expanding eligibility, supporting states whose policies provide help to more people, who in turn will spend their benefits and boost the economy?

Last year, that approach became part of a federal bill — the Unemployment Insurance Modernization Act — passed in the House, but not the Senate, although then-Sen. Barack Obama was a sponsor.

Advocates like Emsellem always try to expand benefits in tough times, said Douglas J. Holmes, president of the National Foundation for Unemployment Compensation and Workers’ Compensation, a Washington business group. It would be better to skip the debate and ship the money to the state trust funds quickly, he said. "Federal money is not designed to dictate benefits state by state."

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Those who fall through the cracks tend to be low-wage, part-time, seasonal or new workers — not like the 1,000 autoworkers laid off in Delaware.

"Although low-wage workers were almost 2

OTTAWA–In a precedent-setting judgment, the Supreme Court of Canada has written that executives who run a company have a primary duty to do what is best for the corporation, not necessarily its shareholders or its bondholders.

Canada’s top court has ruled against the idea that the interests of shareholders supersede other stakeholders in a corporation, such as investors who have bought bonds.

The clarifications governing corporate law in Canada come from a 76-page written judgment on a decision the court made in June, when it gave the go-ahead on the planned privatization of BCE Inc., owner of Bell Canada.

Both the written reasons – and the original ruling – were unanimous, giving greater clarity to the rights of directors and stakeholders of corporations.

The court noted that, in most cases, the interests of the corporation and its investors and creditors were identical, but as was the case with BCE’s proposed acquisition by a group of investors headed by the Ontario Teachers’ Pension Plan, sometimes conflicts arise.

"Directors may find themselves in a situation where it is impossible to please all stakeholders," the court said.

"In each case, the question is whether, in all the circumstances, the directors acted in the best interests of the corporation, having regard to all relevant considerations, including, but not confined to, the need to treat affected shareholders in a fair manner."

The written ruling will bring no comfort to BCE, or shareholders who stood to benefit from the $42.75 per share sale price. It comes just over a week after the $52 billion leveraged buyout collapsed because of volatile credit markets and the impact of the North American recession.

The written reasons, nevertheless, were called important by Michael Gans, a partner with Blake, Cassels & Graydon LLP, for clarifying points of confusion that arose from an earlier decision the Quebec Court of Appeal cited to rule against the acquisition bad credit pay day loans.

In that case, the Quebec court found BCE’s directors did not give adequate consideration to how the deal would impact bondholders. Bondholders had argued that BCE would be crippled by taking on $34 billion in debt and that the value of their bonds would be diminished.

Gans said the Supreme Court found BCE had considered the effect on bondholders but decided the directors were acting in the best interest of the corporation.

"If you are a director of a Canadian corporation, you can feel good about this judgment, because it gives you significant leeway to do your job as long as you do so in a reasonable and informed manner," he said.

Gans said the top court made clear Canadian law differs from the U.S., where judgments have placed shareholders at the top of the totem pole in a contest of interests.

"There is no principle that one set of interests – for example the interests of shareholders – should prevail over another set of interests," the court wrote.

"Everything depends on the particular situation faced by the directors and whether … they exercised business judgment in a responsible way."

The ruling will likely be used to clarify the relationships of corporate executives, shareholders and bondholders in future mergers, bankruptcies or hostile takeovers when stakeholder interests collide.

In June, the Supreme Court had approved the "plan of arrangement" – dismissing a challenge from bondholders that their interests had not been protected – but given the time constraints issued no reasons for its decision.

That ruling appeared to clear the last hurdle to the world’s largest leveraged buyout … until the size of the debt proved a bridge too far.

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Federal Finance Minister Jim Flaherty said Monday that no specific action by any one government can make the global economic crisis disappear but that Canada will continue to do its part.

Flaherty, who spoke to reporters after an event in Toronto, said Canada's government will continue to fulfill its obligations to stimulate its economy under an agreement by the Group of Seven most industrialized nations to try to reinvigorate the world economy.

He also said he has received input from the opposition Bloc Québécois about the budget he is preparing, but has not received proposals from the Liberals or the New Democratic Party, the two other opposition parties fast pay day loans. During a political crisis last week that threatened to bring down the Conservative government, the government asked the opposition for ideas on stimulating the economy.

The three opposition parties recently signed a coalition agreement that has the potential to topple the Conservatives from power.

But the government managed to win a rare suspension of Parliament last week and avoided being ousted by the coalition, which said the government's economic plan is inadequate.

Flaherty is scheduled to deliver a budget on Jan. 27.

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European services shrank at a record pace in November, increasing pressure on the European Central Bank to cut interest rates further this week.

Royal Bank of Scotland Group Plc’s services index dropped to 42.5 from 45.8 in October, remaining below the expansion- threshold of 50 for a sixth straight month. The final reading is the lowest in the survey’s 10-year history and falls short of an initial estimate of 43.3 published Nov. 21. Economists forecast a decline to 43.3, according to the median of 31 estimates in a Bloomberg survey. The index is based on a survey of purchasing managers by Markit Economics in London.

Europe’s economy fell into its first recession in 15 years in the third quarter after the worst financial crisis since the Great Depression pushed up borrowing costs, eroded confidence and hurt demand for exports. Slowing inflation is giving the ECB room to cut rates further as policy makers across the globe seek to limit the economic damage from the financial turmoil online payday loans.

“The extremely weak November service-sector purchasing managers’ survey exerts significant extra late pressure on the ECB to deliver a deep interest-rate cut on Thursday,” said Howard Archer, chief European economist at IHS Global Insight in London.

The ECB has cut its benchmark rate by 100 basis points, or a full percentage point, to 3.25 percent since early October and signaled more reductions are ahead. The central bank will probably cut its key rate by half a percentage point this week, a survey of economists shows. That would be the third reduction since early October.

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Call them resigned or defeatist, but two leading risk managers are already sure of one lesson from the crisis ravaging the global financial system: in one way or another, it’s happened before and it’ll happen again.

“For at least 10 to 15 years, people will remember this very painful experience, take it to heart and balance risk versus return more realistically,” said John Rowe, London-based executive vice president for SunGard, a financial software maker.

“But I say to my younger colleagues: don’t assume this is the last one. If you’re young enough you’ll see the next one,” said Rowe, who used to oversee market risk at Bank of America.

Leaders of the Group of 20 developed and emerging economies have ordered financial supervisors to conduct a root-and-branch review of the shortcomings in regulation and oversight that spawned the credit crisis and still-deepening global slump.

Speaking on a recent visit to Beijing, Rowe saw no need for supervisors to become heavy-handed. But, he said, they should require banks to demonstrate they have the capacity to process their trades from start to finish and value them daily.

“And they should say ‘if you can’t show us, we’ll get real tough’,” he said. “It would slow the pace of innovation to some significant extent, but it wouldn’t completely handcuff the process.”

Even then, Rowe said the best pricing and risk management tools struggle to capture “tail risk” — statistically improbable confluences of events that have materialized with alarming frequency during the crisis, bringing many banks to their knees free credit report.

“People have been too inclined to put complete faith in the scientific certainty of the numbers that come out of all these complicated systems and abandon a certain amount of common sense.

“Part of the problem is not derivatives or risk systems. It’s human psychology at fault here. We’ve met the enemy and it’s us.”

BE HUMBLE

Nikolaus von Bomhard, the chief executive of Munich Re (MUVGn.DE: Quote, Profile, Research, Stock Buzz), the world’s largest reinsurer, thinks he may have already spotted the next market land mine: before long, the availability of too much cheap cash will once more cause risk to be underpriced.

The appetite for risk may have faded for now, but von Bomhard said he suspected this was just a fad.

“Excess liquidity will sooner or later become an issue again,” he said in an interview at the weekend.

“One or two years out, it will take a lot of discipline to take the liquidity out and not fall into the trap again of chasing yield and disregarding risk.”

As for the claims side of Munich Re’s business, von Bomhard agreed with Rowe that managing risk is as much about trying to understand human nature and technological change as it is about analyzing actuarial tables. 

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Thomson Reuters Corp (TRIL.L: Quote, Profile, Research, Stock Buzz) (TRI.TO: Quote, Profile, Research, Stock Buzz) reported stronger-than-expected quarterly results as gains in its professional division more than offset slowing growth in the business that serves financial institutions, sending its shares up as much as 5.5 percent.

The news and information publisher, which was formed by Thomson Corp’s purchase of Reuters Group Plc in April, did not provide financial forecasts for 2009, but affirmed its 2008 outlook for revenue and operating profit margin.

“If you look at our average monthly net sales, they’re positive again through October and positive in the third quarter,” Chief Executive Thomas Glocer said in a phone interview. “If you want to start thinking about growth for next year, that’s a good thing.”

The company’s London shares were up 3.72 percent at 1,117 pence in late trading after trading as high as 1,135 pence.

The London shares are down nearly 30 percent since the stock began trading in April.

Third-quarter net income was $380 million, or 46 cents a share, compared with $2.97 billion or $4.61 per share a year ago. Excluding nonrecurring items, discontinued operations and other items, profit was 48 cents a share, beating the average analyst forecast of 34 cents, according to Reuters Estimates.

Pro forma revenue rose 8 percent to $3.33 billion, topping Wall Street forecasts of $3 short-term cash loans.24 billion. Pro forma figures assume the Thomson Reuters deal had closed on January 1, 2007.

“The numbers look slightly ahead,” said Alex DeGroote, a media analyst at Panmure Gordon in London, adding that Thomson Reuters was “not too bearish on ‘09 markets growth potential.”

Thomson Reuters stood by its forecast for 2008 revenue growth of 6 to 8 percent excluding currency effects, and affirmed its forecast for an underlying operating profit margin of between 19 and 21 percent.

“NOT DISCRETIONARY GOODS”

The company raised its forecast for 2008 free cashflow margin to between 13 percent and 15 percent of revenue, excluding synergy and integration costs.

“We went out in February and said, in a company where there were a million moving pieces moving into an awful market, we would do 6-8 percent growth,” Glocer said.

“The fact that we don’t have to change that is a very good thing. Ditto the margin,” he said.

“Our products are not discretionary goods,” he added on a conference call, reiterating that the markets division, which serves financial institutions, could see positive growth in 2009.

Organic revenue growth at the markets division was 5 percent in the third quarter, slowing from 7 percent in the second quarter. 

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Canadian Satellite Radio Holdings Inc. reported its annual net loss narrowed and revenues rose as the Toronto company continued to grow its satellite radio business.

The company, known as XM Canada (TSX: XSR), said Thursday it lost $74.3 million or $1.55 a share for the year ended Aug. 31. That compared with a net loss of $84.6 million or $1.78 a share for fiscal 2007.

In fiscal 2006, XM Canada lost $102.7 million.

Annual revenues rose to $39.5 million from $21.2 million.

For the fiscal fourth quarter, total revenues rose by 72 per cent to $11.8 million.

While the company is still posting big losses, CEO Michael Moskowitz said its business strategy "is working and we are making great progress towards generating long-term sustainable growth and profitability."

“XM Canada had a very successful year capped by two consecutive quarters of positive cash and our first ever quarter of pre-marketing adjusted operating profit,” Moskowitz said in a statement cheapest cash advance.

“Revenue nearly doubled due to our strong import automotive sales, a significant improvement in automotive conversion and growth from both the retail and wireless sectors.

"Top line revenue growth, together with our sharp focus on maximizing the return on investment, has significantly strengthened our financial performance and cash position. We are confident we can operate our business without having to raise additional capital.”

In Thursday trading on the TSX, XM Canada shares fell 35 cents to $1.05, a drop of 25 per cent.

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