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Ford Motor reported that its ongoing losses soared in the fourth quarter, but the company reiterated it still does not need the federal bailout already received by its two U.S. rivals.

Ford reported a net loss of $5.9 billion, or $2.46 a share, up from a loss of $2.8 billion in the same quarter a year ago.

For the full year, Ford lost $14.6 billion, and the company has now lost nearly $30 billion over the past three years.

Excluding special items, losses were $3.3 billion, or $1.37 a share. Analysts surveyed by Thomson Reuters were forecasting a loss of $1.30 a share on this basis.

Ford (F, Fortune 500) burned through $5.5 billion in cash during the quarter. That left the company with gross cash of $13.4 billion as of the end of 2008.

The company said it will burn through cash again this year, but added that it does not anticipate needing to receive federal help "barring a significantly deeper economic downturn or a significant industry event, such as the bankruptcy of a major competitor that causes disruption to the company’s supply base, dealers or creditors."

Instead, Ford said it will draw on its available credit lines to receive an additional $10.1 billion in cash on Feb. 3.

"Ford went to the credit markets two years ago when they were functioning normally and obtained the funding necessary - including our credit lines - to support our product transformation and restructuring," said Ford CEO Alan Mulally in a statement.

"Given the instability of the capital markets with the uncertain state of the global economy, we believe it is prudent to draw these credit facilities at this time," Mulally added.

Separately, the company’s Ford Credit arm confirmed that it was eliminating 1,200 jobs, or about 20% of its staff, due to lower sales. In addition to suffering from weak demand for vehicles, Ford also sold its Jaguar, Land Rover and Mazda brands last year.

Production cuts and weak sales ahead

Ford’s automotive operations reported a loss in every region but South America during the fourth quarter. Worldwide vehicle sales plunged 31% from a year ago, to 1.1 million. Total sales dropped 36%, to $29.2 billion, but they did top Wall Street’s consensus estimate of $27 billion.

Ford signaled it is expecting continued weak sales in the first quarter, as it trimmed its first quarter production plans by 30,000 vehicles, 7% below its previous guidance. It will now make only 400,000 cars and trucks during the quarter, down 42% from what it made during the first three months of 2008.

David Cole, chairman of the Center for Automotive Research, a Michigan think tank, said the sharp cuts in production at Ford and elsewhere are signs of an important change in thinking in the U low fee payday loans.S. auto industry that may allow them to ride out the current crisis.

"What we are seeing is a level of discipline to cut inventory that we have not seen before," said Cole. That could lead to higher prices for vehicles, as automakers no longer have to offer large cash-back offers and other inducements to move unsold vehicles.

"The quickest way to return to profitability is through reduced incentives," he said.

But Cole said that the outlook for sales remains grim for at least the next few months, and that the industry will need to see a second-half rebound if their turnaround plans are to be successful.

Healthier than its Big 3 rivals

Ford’s access to credit and cash on-hand puts it in a far better financial position than General Motors (GM, Fortune 500) and Chrysler LLC, who both needed loans from the federal government to avoid falling below the minimum cash level they needed to continue operations.

Ford had asked for a $9 billion line of credit from Congress at the same time GM and Chrysler were appealing for help last month. Congress did not approve such financial assistance, forcing the Treasury Department to step in and give the loans to GM and Chrysler late last year.

But the company did announce a slightly more conservative sales target for 2009. When it presented its turnaround plan to Congress in December, Ford said it expected 2009 U.S. industrywide sales of about 12.5 million vehicles, including medium- and heavy-duty trucks. On Thursday, the company said it now anticipates sales of between 11.5 million to 12.5 million vehicles this year.

"It’s very volatile," said chief financial officer Lewis Booth when asked during a conference call about the change in sales guidance. Mulally added that January sales were shaping up to be as bad as December, when industrywide sales tumbled 36% from a year earlier.

Ford also said it is continuing to take steps to reduce costs.

The company announced it had reached an agreement with the United Auto Workers union to eliminate the jobs bank, which guarantees nearly full pay for UAW members who lose their jobs.

Ford said management and the union are working on details of implementing that agreement. GM announced a similar deal Wednesday, and there were reports Monday that Chrysler had also reached such a deal with the UAW.

Asked about other negotiations with the union or creditors to cut costs, Mulally said Ford is in ongoing talks with all major "stakeholders" of the company and that he was "very pleased by the response." But he would not give more details about those negotiations. 

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When it comes to transparency, the world’s bankers won’t surrender without a fight.

Even with capitalism suffering its biggest crisis since the Great Depression — a meltdown born and nurtured in opaque markets from subprime mortgages to credit-default swaps — the bankers gathering with politicians in the Swiss resort of Davos this week may be unwilling to allow too much sunshine into the dark corners of their business.

“The financial system will kick back against transparency,” says Joseph Stiglitz, the Columbia University economist and Nobel Prize winner who’ll be in Davos.

“Those working in markets see information as power and money, so they depend on a lack of transparency for success,” says Stiglitz, who won his Nobel for research on information asymmetry — what happens when one party in a transaction has access to knowledge that others don’t.

The resistance may set up the ultimate test of strength between markets and governments, dictating the future of the world economy. As the global slump deepens, and President Barack Obama promises to exert a “watchful eye” over the financial system, the risk is new rules won’t be strong enough to stop banks repeating history and circumventing them.

Toothless

“Without teeth, the banks will roll right over this stuff in a couple of years,” said Roy Smith, a former partner at Goldman Sachs Group Inc. who has attended Davos in the past. “Wall Street’s filled with a lot of big guys. They know how the bread gets buttered, they know how to play the game.”

Bankers, once hailed as Masters of the Universe, return to the seminars and parties of the World Economic Forum’s annual meeting chastened by losses and writedowns that top $1 trillion. Deutsche Bank AG Chief Executive Officer Josef Ackermann, who said two years ago that many investment banks “have a very good future,” reported a record loss in the fourth quarter.

Some won’t be back at all. Former Merrill Lynch & Co. Chief Executive Officer John Thain, originally slated to be in Davos this week, lost his job on Jan. 22. A year after Lehman Brothers Holdings Inc. head Richard Fuld sat on a panel discussing sovereign wealth funds, his bank no longer exists.

Power Pendulum

Policy makers are now tightening their grip on the financial system. Timothy Geithner, Obama’s pick for Treasury Secretary, last week called for “comprehensive” regulatory changes. British Prime Minister Gordon Brown’s government has bought stakes across the banking industry and European Central Bank President Jean-Claude Trichet is pumping unlimited funds into the money markets.

“The pendulum of power has swung from financial institutions to politicians,” says Morgan Stanley Asia Chairman Stephen Roach, who was among the first to raise the specter of global recession at last year’s conference.

Obama will be represented by White House adviser and confidante Valerie Jarrett at the five-day conference, which starts tomorrow and is titled “Shaping the Post-Crisis World.” She will join Trichet, Brown and more than 2,500 other executives, officials and government leaders.

More Light

One of their main pushes will be to illuminate the murkier market practices that evolved during the boom. Banks pushed more and more of their investments off their balance sheets and beyond the reach of capital requirements paydayloans. At the same time, subprime mortgage loans were repackaged into derivatives and became toxic as rising interest rates sparked a wave of defaults.

Obama wants to strengthen capital requirements on mortgage securities and derivatives and force banks to better disclose the assets they hold. U.K. officials are pushing for similar measures and Trichet’s ECB is angling for a bigger role in monitoring banks.

One of the problems for governments is that new securities laws are often so complicated that legislators need help from industry to craft them.

“The complexity of the legislation works in the industry’s favor,” says Paul Mahoney, a regulation scholar at the University of Virginia. The thrust of new regulations might be against banks, “but when it gets time to get the details down on paper, they can have real influence.”

History

That problem is almost as old as finance itself. In the 1690s, the dawn of share trading in London, brokers turned a government crackdown on short selling to their advantage. They persuaded Parliament to include in the new rules a ceiling on the number of legal brokers to 100, effectively locking rivals out of the system.

Franklin Roosevelt’s Truth in Securities Act, signed into law in 1933, met a similar fate. Aiming for better disclosure in the aftermath of the 1929 Wall Street Crash, the law ultimately helped major banks by freezing the existing underwriting system in their favor, says Mahoney.

Financiers are already lobbying. While they acknowledge greater transparency has its virtues — they’ve accepted the idea of an additional regulator for derivatives — they want to preserve the potential for profits and warn that too much disclosure risks confusing markets.

“Flooding investors with a lot of disparate information can be misleading,” says Charles Dallara, managing director of the Institute of International Finance, who will be in Davos. His organization represents more than 300 financial companies.

Flashpoint

Another flashpoint is so-called fair-value accounting, which requires companies to record assets every quarter to reflect market value. The idea is to give investors a better estimate of a company’s worth.

Bankers such as William Rhodes, senior vice chairman at Citigroup Inc. and a Davos delegate, say the standard is unfairly punishing during times of turmoil when buyers are scarce and assets become difficult to price.

Lawmakers must also avoid “going overboard with regulation” of hedge funds, billionaire investor George Soros warned Congress in November. “It would be a grave mistake to add to the forced liquidation currently dislocating markets by ill-considered or punitive regulations.”

How much light is ultimately cast on finance will show how much power governments have won over the market and the economy. While Harvard professor Ken Rogoff says “there’s going to be a sea change in transparency to match the crisis,” Stiglitz is “not very optimistic.”

“Many in the financial industry are ethically challenged and that has to be realized,” says Stiglitz. “What you don’t know is the source of Wall Street’s profits. The next crisis will also be about ‘if only we knew’ too.”

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China’s economic slowdown, already the deepest in seven years, is set to worsen as the global recession pummels its exports, darkening the outlook for suppliers from Australia to Taiwan.

Gross domestic product will grow 6.3 percent this quarter from a year earlier, according to the median estimate of nine economists surveyed by Bloomberg News. The survey was conducted after yesterday’s report that the economy expanded 6.8 percent in the fourth quarter.

Recessions in the U.S., Europe and Japan have slashed demand for China’s electronics and textiles, forcing the closure of thousands of factories and throwing millions out of work. The slowdown is increasing pressure on policy makers to add to a 4 trillion yuan ($585 billion) stimulus package and cut interest rates to revive an economy that accounts for about a fifth of global growth.

“China’s economy is likely to slow further,” said Mark Williams, an economist at Capital Economics Ltd. in London who worked at the U.K. Treasury as an adviser on China from 2005 to 2007. “A strong recovery will depend on more aggressive action by the government, in particular to beef up its own contribution to the stimulus.”

China is also facing pressure from U.S. President Barack Obama to allow the yuan to strengthen. Timothy Geithner, Obama’s pick for Treasury secretary, said the president “believes that China is manipulating its currency.” The remarks, in response to questions from the Senate Finance Committee released yesterday, may presage a tougher line with China. Former Treasury Secretary Henry Paulson refrained from calling the country an illegal “manipulator.”

Miners Suffer

Companies from Australia’s BHP Billiton Ltd., the world’s largest mining company, to Taiwan Semiconductor Manufacturing Co., the world’s largest custom-chip maker, face declining earnings as China’s demand plunges.

BHP is closing a nickel mine and cutting 6,000 jobs around the globe because of weaker demand, largely caused by the slowdown in China, the world’s No. 1 consumer of metals.

“The Chinese boom that has supercharged the Australian economy over the past five to seven years is receding rapidly,” Australian Finance Minister Lindsay Tanner said yesterday. “That’s a big problem for Australia. It is part of a wider picture that is coming to bear throughout the world.”

Japan and South Korea posted record declines in exports to China last month, worsening the effect of plunging demand from the U.S. and Europe. China’s own exports declined by the most since 1999, triggering factory closures and job cuts.

‘Caught a Cold’

“China coughed and Korea caught a cold,” Oh Suk Tae, an economist at Citigroup Inc. in Seoul, said after the nation yesterday posted its biggest economic contraction since the Asian financial crisis. “We’re now going down because of China. It’s not our savior any more.”

South Korea’s economy shrank 5.6 percent last quarter, more than twice the expected pace. China is South Korea’s biggest export market pay day loans.

China’s economic slide will also trim its contribution to global growth, estimated at 19.5 percent by the International Monetary Fund in 2007, more than any other nation.

China’s economy grew 9 percent in 2008 after a 13 percent expansion in 2007 that pushed it past Germany to become the world’s third-biggest.

At home, rising unemployment and a widening gap between urban and rural incomes are political challenges for the ruling Communist Party, which has pledged more efforts to maintain social stability.

Urban Jobless

The official urban unemployment rate, which doesn’t include millions of migrant workers, jumped in the fourth quarter for the first time since 2003. A rate as high as the government’s 4.6 percent target for the year would be the worst since 1980.

“Could the economic situation become so bad in China that it threatens the regime itself?” Albert Edwards, a London-based global strategist for Societe Generale SA asked this month. “Of course it could, and clients should consider the implications of such an event.”

Edwards predicted the 1990s Asian financial crisis and in March 2007 said a U.S. recession would spur a bear market in equities.

Premier Wen Jiabao said this week that the government must work urgently this quarter to reverse the slowdown and maintain social stability amid a “very grim” outlook for jobs.

Weaker growth has hurt profits at companies from China Southern Airlines Co. to Aluminum Corp. of China, and a property market and construction slump will make it harder to revive the economy. China Vanke Co., the country’s largest publicly traded real-estate developer, said sales fell 14 percent in December from a year earlier.

‘Looks Fragile’

“Key demand drivers, including exports and domestic consumption, as well as profit growth, are now slowing, and they will continue to grind lower over the year,” said Stephen Green, head of China research at Standard Chartered Bank Plc in Shanghai. “Real estate still looks fragile, as does private investor sentiment.”

As well as the stimulus package, China has pressured state- owned banks to increase lending, reduced export taxes, stalled the yuan’s gains against the dollar to help exporters, and is adding support for 10 key industries, including tax cuts and subsidies for steel and autos.

China’s leaders “will do anything” to maintain an economic expansion of about 8 percent, the government’s target for creating jobs and maintaining stability, according to Huang Yiping, chief Asia economist at Citigroup Inc. in Hong Kong.

“This is not an economy that’s going to bounce back quickly,” said Ben Simpfendorfer, an economist at Royal Bank of Scotland Plc in Hong Kong.

He forecasts exports will slump 15 percent in the first half, dragging economic growth down to 5 percent this year.

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OPEC is fully enforcing its deepest ever oil supply curbs, which should be enough to boost prices that have slumped below $40 a barrel, the group’s president told Reuters on Tuesday.

In his first interview since assuming the post at the start of the month, Botelho de Vasconcelos also said the Organization of the Petroleum Exporting Countries was unlikely to meet before its scheduled gathering in Vienna on March 15.

“In March we will meet to evaluate the cuts agreed in December,” said Vasconcelos, who is also Angolan oil minister.

“But I think that if all the cuts are carried out within the established timeframe, there will be an impact in the market that will lead to a positive trend in terms of oil prices.”

Vasconcelos said oil had the potential to recover to $75 during 2009. U.S. crude has plunged more than $110 from a record high near $150 a barrel reached in the summer as the global economic slowdown eroded demand.

“I wouldn’t say prices are stabilizing, but the variation between the maximum and minimum price (of about $40-$50 for Brent) throughout the past month does not give any indication that an extraordinary meeting should be held,” he added.

CARRYING OUT CUTS

OPEC, which pumps about a third of the world’s oil, agreed last month to cut its output by 2 low fee payday advance.2 million barrels per day (bpd) from January 1 in a race to balance supply with rapidly declining demand for fuel.

“I believe all the cuts are being carried out although not all countries can comply with the agreed cuts on day one,” said the OPEC chief.

Angola, which joined OPEC in 2007, has done its part.

“We are working to comply with the agreed cuts,” said Vasconcelos. “As you know Angola is a country that is going through a national reconstruction. Oil revenues have an extremely important contribution to our development.”

Reuters reported last week that Angola was set to export 1.5 million bpd of crude in March, down from 1.6 million bpd in February due to shipment delays and OPEC supply cuts.

The African producer’s implied OPEC target from January 1 is 1.52 million bpd.

Angola’s government is relying on an oil price above $55 a barrel to carry out a record $42 billion spending plan in 2009.

The plan is aimed mostly at improving the lives of ordinary Angolans, most of whom live on less than $2 a day. 

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American agriculture uses fewer resources to produce more food, but as farmers scramble to meet growing global demand in coming years, agriculture could take a greater toll on waterways, soil and climate, according to a report released Monday.

The report, called "Field to Market," is part of an initiative to provide food producers with a better way to measure their impact on natural resources. It was put together by the Keystone Center, a Colorado-based not-for-profit that tries to come up with policy solutions for global problems.

Several organizations, from big agribusiness to conservation groups, contributed to the effort. Overall, they concluded that the production of corn, soybeans, cotton and wheat in the United States was becoming less harmful to the environment. Fertilizer, land, energy and water use has slowed from 1987 to 2007, while production increased, largely because of the emergence of new technologies, the report stated.

To prepare the report, the Keystone Center called on a diverse group of stakeholders — from food industry giants, such as Coca-Cola and Cargill, to conservation groups, such as The Nature Conservancy and the World Wildlife Fund. Monsanto and the National Corn Growers Association, both based in the St. Louis area, were among the members.

The group first got together about two years ago to address a looming global challenge. In order to feed itself, the world’s agriculture production will need to double by 2050. At the same time, food production will need to mitigate its environmental impact, including climate change.

"Agriculture is the dominant land use on Earth. An estimate in 2005 said that crop- and pastureland takes up a quarter of the Earth’s surface," said Michael Reuter of The Nature Conservancy. "We have to look at this very complex situation from a lot of perspectives."

The report issued Monday was described as a first step toward addressing the challenge of agricultural sustainability to evaluate productivity versus resource use fast payday loan no faxing. The authors studied government data and came up with measurements. The next step, they say, will be to look at the impact American agriculture has on water quality and biodiversity — a much more complicated task.

Ultimately, the group’s goal is to develop a "Sustainability Index" that will help food producers along the food chain measure sustainability and trends over time.

"We’re starting to develop tools that a farm can use to see how their efficiencies compare to other farmers," said Michael Doane of Monsanto, a member of the Keystone group. "We believe the comparisons will make them want to make changes."

Proponents of a more diversified approach to sustainable agriculture say the group has overemphasized the role technology has played in improving the sustainability of the American farm.

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Ferd Hoefner, policy director of the National Sustainable Agriculture Coalition, said the report’s emphasis on four commodities and on technology skews the picture.

"They’re looking at the technological fixes that have improved some resource indicators, rather than the revolution of a system that we need to farm in concert with the environment," Hoefner said.

Hoefner also noted that his group was not part of the report. "They don’t have the voice of the farmer represented," he said. "At least not the sustainable agriculture farmer we present."

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Lenovo Group, the world’s fourth-biggest PC maker, forecast a quarterly loss as China’s slowing economy hit sales, and said it will axe 2,500 jobs as part of a restructuring to cope with falling demand for computers.

Shares in the company, which bought IBM’s PC business for $1.25 billion in 2005 to put the Chinese brand on the global stage, slumped by more than a quarter, their biggest fall in 11 years.

“Lousy quarterly earnings were widely expected, especially from its major markets overseas, but a faster-than-expected slowdown in the Chinese economy worries investors,” said Conita Hung, head of equity research at Delta Asia Financial.

“The market had initially expected the China market to offset part of its bad performance overseas.”

Lenovo noted that weaker global demand by businesses for personal computers also dented sales as economic slowdown bites.

“Although the integration of the IBM PC business for the past three years was a success, our last quarter’s performance did not meet our expectations,” Chairman Yang Yuanqing said in a statement.

The company said it would consolidate its China and Asia Pacific organizations into a single Asia Pacific and Russia (APR) business unit, and will cut executive compensation, including merit pay and long-term incentives, by 30-50 percent.

Shares in Lenovo, ended 26 percent lower to close at HK$1.91 on Thursday after being suspended a day earlier 500 fast cash payday loans.

Bigger rival Dell announced plans on Thursday to cut around 1,900 of 3,000 jobs at its manufacturing plant in Ireland and move many of them to Poland as part of a $3 billion cost-cutting plan announced late last year.

LOSS COMING

Lenovo had posted a 78 percent drop in July-September net profit to $23.44 million, its worst performance since it bought the IBM business, and said on Thursday it would report a loss for the October-December quarter.

Earnings are expected to remain under pressure even after a restructuring as information technology hardware vendors see slower growth amid a tougher business environment.

“Although the cost saving plans are seen positive for long term growth, there’s no doubt the profit margin will be under pressure,” said Delta Asia’s Hung.

“As the current environment is much more difficult than before, it is our view that Lenovo needs more aggressive cost control measures,” analysts Jenny Lai and Evonne Weng wrote in a research note for CLSA, which rates Lenovo a sell.

Lenovo said the 2,500 jobs, around 11 percent of the workforce, would be lost in January-March and would help realize savings of $300 million for the year to end-March 2010. 

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BOSTON — Playing it safe paid off in 2008 for Tom Forester and David Ellison, two standout mutual fund managers in a year when winning meant losing less money than the competition.

Forester’s eponymous Forester Value Fund (FVALX) focused on stocks that typically do well in recessions to roughly break even for the year, declining just 0.82 percent through Tuesday — easily making it the top-performing large-cap value fund of the year, according to Morningstar Inc. data. The second-place Copley Fund was down nearly 17 percent, which was still well above the average decline in the category of 38 percent.

Ellison’s FBR Small Cap Financial Fund (FBRSX) also stood out in 2008, ranking No. 2 among financial sector funds. It shed just 10 percent of its value, easily beating the category’s average decline of 45 percent.

If the economy is poised to turn around, Forester and Ellison might do well to heed the contrarian investment maxim that yesterday’s winners are likely to be tomorrow’s losers.
But the two managers — both of whose funds carry Morningstar’s five-star ranking — aren’t yet ready to budge from the approaches that served them so well in 2008. Neither sees enough positive economic news to merit shifting from investments that typically do OK in recessions to those more likely to gain when conditions improve.

"I’ll probably be in some of the same stocks for the first six months or so of 2009," said Forester, whose recent success has drawn new clients and boosted his fund’s assets more than fivefold since the start of 2008, to $55 million. "And then as I see things getting better, I’m going to shift out of the real defensive things, and get more constructive on the more cyclical stocks that can grow quite well as we come out of this period."

The fund’s top five holdings as of Sept. 30 included Kraft Foods Inc., Johnson & Johnson and H.J. Heinz Co. — three companies that managed to outperform broader markets for the year, with their shares all losing less than 20 percent cash advance no fax. Other 2008 investments included Wal-Mart Stores Inc. and McDonald’s Corp., which draw budget-conscious consumers during hard times.

Forester also spent 2008 easing out of financial stocks with heavy exposure to the mortgage meltdown, and unloading energy holdings before skyrocketing oil prices reversed course.

While Forester used much of his fund’s cash holdings to snap up low-priced stocks in the third quarter, Ellison continues to keep plenty of money on the sidelines. About 40 percent of his $179 million fund’s assets are in cash, and Ellison said he doesn’t plan to use much of it until he sees signs that the slide in home prices and surge in job cuts are about to end.

The former bank teller has managed his small-banking specialty fund since its inception 12 years ago. While smaller banks generally weren’t as exposed to mortgage troubles as much as larger rivals, Ellison took pains to find the small banks with the least risk. Shares of his fund’s top holding, Paramus, N.J.-based Hudson City Bancorp., were up about 4 percent for the year.

Now, the key for both Ellison and Forester is figuring out when to adjust their strategies as markets eventually build momentum for an expected rebound.

Forester expects that to happen around mid-2009, when he hopes to move out of defensive stocks and into industrial and technology companies whose business tends to move in tandem with the economy.

Ellison is confident his small bank investment niche will continue to perform relatively well, but he doesn’t believe big profits are just around the corner for small banks. There are too many uncertainties in the economy, and currently low borrowing rates for everything from mortgages to auto loans will pressure all banks’ bottom lines. So for now, Ellison hopes to keep plenty of cash on the sidelines.

"I think unaffordable mortgages are still going to chew on the economy for a while," he said.

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