US unveils $1tn toxic asset plan

The US has announced details of a plan to buy up to $1 trillion (£686bn) worth of toxic assets to help repair banks' balance sheets.

The "Public-Private Investment Programme" will purchase the troubled mortgages and securities that have been at the root of the credit crunch.

The Treasury has committed $75bn to $100bn to the programme and said the private sector would also contribute.

Investors welcomed the news, with stocks rising in Europe and Asia.

The Treasury said the plan would help the financial system recover.

US banks still hold many mortgage-related assets that they cannot value or sell.

Having so many of so-called toxic assets on their books has made them reluctant to lend, causing the financial system to freeze up, and pushing the economy further into recession.

Sony Ericsson braced for losses

Sony Ericsson has said that it expects to make a loss in the first three months of this year as sales continue to suffer in the economic downturn.

The company predicts a net loss before tax of between 340m euros (£320m; $466m) and 390m euros for the quarter.

Both retailers and distributors are cutting their stock, said the firm.

Other mobile phone firms have also seen sales fall as demand slows. Earlier this week, Nokia said that it would shed 1,700 jobs due to poor sales.

And previously mobile phone giant Motorola said it would cut 4,000 jobs, roughly 6% of its workforce, to reduce costs.

Sony Ericsson said it was likely to ship around 14 million phones during the first quarter.

It is due to announce its full quarterly results on 17 April.

Oil price soars above 50 dlrs on US Fed plan

Oil prices jumped above USD 50 after the Federal Reserve moved to inject another trillion dollars into the US financial system to boost the world's biggest economy.

New York's main futures contract, light sweet crude for delivery in April, ended USD 3.47 higher from yesterday's close to USD 51.61 per barrel, topping USD 50 for the first time in four months.

In early trading, the contract surged to USD 52.25 - the highest level since 28th November, 2008.

Brent North Sea crude for May delivery rose USD 3.01 to 50.67 in London after breaching USD 51.

Analysts attributed the price jump to Wednesday's announcement by the US Federal Reserve that it would pump USD 1.15 trillion into the financial system. The move also has pulled down the US dollar against key currencies.

"You need to put this action in the context of what has happened in the last few weeks in the market. There has been a shift in market sentiment," said Constanza Jacazio of Barclays Capital.

"From a market where demand was the only driver of price action and sentiment, there seems to have been a shift in a more balanced view," he said.

Crude futures had slid on Wednesday on news of a larger-than-expected increase in US energy reserves that highlighted weak American energy demand, but trimmed losses after news of the Fed plan.

Nineteen US states go after AIG

Nineteen US states are demanding that insurance giant AIG reveal details of bonuses paid to executives, so they can take steps to recover the funds.

This comes after New York Attorney General Andrew Cuomo said AIG had given him such a list on Thursday.

The US House of Representatives has passed a bill to levy a tax of 90% on the big bonuses paid to people working at firms that have received state aid.

The $165m (£114m) of bonuses have caused outrage across the US.

US President Barack Obama has denounced such bonuses, while even AIG boss Edward Liddy has described them as "distasteful".

AIG has taken $170bn in aid from the US government.

French aid prompts Renault move

French carmaker Renault is to shift some car production back to France after the guarantee of state aid.

Renault will take the production of its Clio Campus model to the Paris suburbs from Slovenia, creating 400 jobs, a French government minister said.

But the European Commission has demanded clarification about the plan, saying it may be protectionist.

France last month agreed to give Renault and Peugeot Citroen loans in return for keeping French plants open.

The plan to offer both Renault and Peugeot Citroen 3bn euros ($4bn; £2.8bn) sparked a row over protectionism after President Nicolas Sarkozy suggested that the money should not be used to rescue French-owned factories in Eastern Europe.

Luc Chatel, a junior minister for industry, announced Renault's decision in a local radio interview.

European concerns

EU Competition Commissioner Neelie Kroes told the BBC she was highly surprised and was seeking urgent clarifications. Ms Kroes said she received a pledge from Mr Chatel just a few weeks ago that the state bail-out for French car firms would not be linked to moving jobs to France.

If the aid proves to be conditional on this, Ms Kroes said it would be illegal under EU rules and should be paid back.

BBC correspondent, Oana Lungescu, said the clash comes at a pivotal point.

"This row couldn't have come at a worse moment for the EU, just as leaders meeting in Brussels are calling on the US and others to tackle the global crisis by avoiding all forms of protectionism," she said.

But Renault has defended its plans, saying its Slovenia factory was at full capacity and that the move to the Flins faciility in Paris would allow Renault to cope with additional orders.

In 2008, the French government said it would give consumers 1,000 euros if they traded in cars older than 10 years for a low-emission car.

'Increased production'

Renault spokeswoman Natalie Bourette said the move will not see job losses at Renault's Slovenian plant, which makes the Twingo and Clio models, but would rather be used as an opportunity to ramp up Slovenian production of the Twingo.

"Novo Mesto [the Slovenian plant] has no more available capacity, which is why we took the decision," she said.

Renault's claims were backed up by French President Nicolas Sarkozy.

"This is not about cutting jobs in Slovenia," he said.

"It doesn't take a single job from our Slovenian friends and it increases jobs for Flins," he added.

Meanwhile, Renault anticipates it will produce 8,000 Clio Campuses in Flins between June and October. Flins mostly produces the newer Clio III model.

Carmakers in Europe and beyond have been hit hard by the economic downturn.

Renault last month reported a steep fall in profits and abandoned its targets for 2009, blaming an economic crisis "of massive proportions". Sales in Europe were down more than 7%, it said.

OPEC Ministers agree to leave existing output targets unchanged

OPEC Ministers agreed to leave existing output targets unchanged, but promised to enforce those curbs more strictly and said they would meet again at the end of May.

The decision reflected concern for the world economy and a belief production curbs so far have begun to take away some of the over-supply from oil markets, the Organization of the Petroleum Exporting Countries said in a communiquéé after the nearly five-hour conference.



OPEC spokesman Omar Ibrahim told a news conference in Vienna that the conference therefore emphasized its commitment to comply fully with its decision of December 2008.



Ministers from the 12-member producers' club had repeatedly said their focus was better compliance with deals in place since September to lower targets by 4.2 million barrels per day.



OPEC adherence has been estimated at roughly 80 percent.

Obama 'outraged' at AIG bonuses

US President Barack Obama has expressed anger at $165m (£116m) bonuses pledged to executives of bailed-out insurer AIG, calling the payments "an outrage".

"It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165m in extra pay," he said.

He has told Treasury Secretary Timothy Geithner to "pursue every single legal avenue" to block the bonuses.

White House spokesman Robert Gibbs later said AIG's next bailout payment could be altered to protect taxpayers.

He did not say how this could be achieved, but analysts say the government could reduce the payment - which is $30bn - by $165m, in order to force AIG to account for the bonuses in another way.

'Play by rules'

AIG announced the bonus payouts on Sunday.

In a speech which was intended to launch initiatives to help small businesses deal with the economic crisis, President Obama strongly criticised the company.

"All across the country, there are people who work hard and meet their responsibilities every day, without the benefit of government bailouts or multimillion-dollar bonuses," he said.

"And all they ask is that everyone, from Main Street to Wall Street to Washington, play by the same rules."

The $165m was payable to executives by Sunday and part of a larger total payout reportedly put at $450m.

New York Attorney General Andrew Cuomo now says he has issued legal papers demanding that AIG reveal the names of those receiving the bonuses - something which he says the firm has refused to do.

"When a company pays funds that the company effectively doesn't have, it's akin to a looting of a company," he said.

AIG has not yet commented on the legal move, but a spokeswoman said the firm was "in ongoing contact" with the attorney general.

Google in court over Vuitton row

Lawyers for Google are to appear in the European Court of Justice in a row over the search engine's use of trademarks.

LVMH, the company behind Louis Vuitton luggage and other brands, has accused Google of selling search words such as Vuitton to the highest bidder.

Web users searching for its products will see adverts for rivals or firms selling counterfeit goods, LVMH argues.

Google appealed to Brussels after a French court ruled against it. The web giant says it does respect trademarks.

No outcome is expected for several months.

Trademark case

This case comes as criticism grows about the dominance of Google, says BBC technology correspondent Rory Cellan-Jones.

"Some comes from rivals like Microsoft - but there's also concern from media firms and from privacy campaigners about a firm which has a huge share of online advertising, and knows an awful lot about millions of web users."

In 2005, Google lost an appeal against a court ruling over trademark infringement brought about by two French travel companies.

A lawsuit was filed after Google users searching for the two French companies - Luteciel and Viaticum - found themselves directed instead to rival sponsored links.

Google's failure to follow an order quickly enough triggered a 75,000-euro fine.

LVMH has been active in efforts to protect its brand online.

In June last year, a French court ordered auction site eBay to pay 40m euros to LVMH for allowing online auctions of fake copies of its goods.

LVMH had said eBay's French site had not done enough to stop the sale of counterfeit bags and perfumes, under brands including Louis Vuitton, Christian Dior and Givenchy.

Nokia to cut 1,700 jobs worldwide

Nokia, the world's largest mobile phone maker, has announced plans to shed 1,700 jobs worldwide as part of a major cost-cutting drive.

Phone sales have been hit hard by the economic downturn and the company said in January that it would cut costs by 700m euros ($910m; £647m).

The job cuts will be across a number of departments, including marketing, development and support functions.

"Nokia continues to seek savings in operational expenses," the group said.

'Big numbers'

"Altogether, these plans will affect approximately 1,700 employees globally. Where applicable, Nokia will start consultations with employee representatives about these plans," it added.

Nokia employs about 125,000 people globally.

"The number of employees we have to reduce is 1,700," confirmed Arja Suominen at Nokia.

She said about 700 jobs will go in Finland, with the US and the UK the next hardest hit.

"We are making very small changes in a large number of countries, but when you count them together you come to very big numbers," she explained.

Further details will be announced once negotiations with employees have begun, she added.

For the final three months of 2008, Nokia made a profit of 576m euros, down almost 69% from 1.84bn euros during the same period in 2007.

The company blamed the poor results on the global economic slowdown that is affecting people's ability to buy new mobile phones.

Oil prices down in Asian trade

Oil prices were lower in Asian trade on Friday following an overnight rally ahead of OPEC's weekend meeting to discuss output levels, analysts said.

New York's main futures contract, light sweet crude for April, dipped 34 cents to USD 46.69 a barrel.



Brent North Sea crude for delivery in April declined 33 cents to USD 44.76.



Analysts said the market was looking to the Organisation of the Petroleum Exporting Countries (OPEC) meeting in Vienna on Sunday to discuss whether to slash production.



The cartel pumps about 40 percent of the world's crude supplies.



"Most industry specialists seem to anticipate another cut but we are not convinced there is a consensus yet among the cartel members," said Julian Jessop, chief economist of London-based research house Capital Economics.


"Even if OPEC does cut quotas by the 500,000 barrels per day that some expect, the impact on prices should be limited. For a start, by far the greater issue is the weakness on the demand side," he said.

China 'can boost stimulus plan'

China is ready to introduce new economic stimulus measures "at any time", Premier Wen Jiabao has said.

He said there was enough "ammunition" to add to the 4tn yuan ($586bn; £421bn) package already announced.

He was speaking at the end of China's annual parliamentary session - the only time he takes questions from reporters.

Although Mr Wen said he expected China and the rest of the world to be better off in 2010, he said the government was ready to face tougher times.

"We have prepared contingency plans to handle greater difficulties," he said.

"We have prepared enough ammunition and we can launch new economic stimulus policies at any time."

Opening the annual session of the National People's Congress nine days ago, Mr Wen had said that this year would be the most difficult China has faced this century.

Confidence needed

He said confidence was "more important than gold or money" in overcoming the world's financial troubles.

"Only when we have confidence can we have courage and strength, and only when we have courage and strength can we overcome difficulties."
But Mr Wen said he was worried about the safety of the huge amount of China's foreign-exchange reserves invested in US government bonds.

"I'd like to take this opportunity here to implore the United States... to honour its words, stay a credible nation and ensure the safety of Chinese assets," he said.

Almost half of China's $2tn in currency reserves is thought to be invested in US treasury bills and other government-affiliated notes.

"We are extremely interested in developments in the US economy," Mr Wen said.