GM Bets On Garbage, Citi Faces More Subprime Flotsam

GM buys into a company that promises to make ethanol from agricultural and human waste. CNBC reports that Citibank could write down another $24 billion. And if you find yourself wishing for more news about Britney, the AP is on your side.

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GM buys into ethanol

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Citi might write down $24 billion

Citigroup could write down $24 billion in mortgage- and credit-related losses, lay off 20,000 employees, and cut its dividend, according to a CNBC report. Citigroup is also seeking to sell a $15 billion stake to largely foreign investors. (MarketWatch) Citigroup will unveil its plans Tuesday, when it reports fourth-quarter earnings. (CNBC.com) This quarter’s earnings reports from Citi and other financial giants are expected to be especially murky and unreliable, as complex home-mortgage-based securities leave bankers and analysts unsure of the value of bank holdings. “There is going to be a lot of confusion and debate,” said Frederick Cannon at brokerage Keefe, Bruyette & Woods. (BusinessWeek.com)

Fed raises rate-cut expectations

Federal Reserve Chairman Ben Bernanke and other Fed officials have signaled a more aggressive stance against recession risks, touting the need for “insurance” against a downturn. (Bloomberg) The statements, which boosted expectations of a 50-point rate cut at the Fed’s Jan. 28-29 meeting, are part of a move toward greater openness after months of criticism about mixed messages. The Fed has “more or less gotten to the right place,” said economist Stephen Stanley at RBS Greenwich Capital, but “it’s hard to parse out a center of gravity.” (The Wall Street Journal) The rate-cut expectations sent the U.S. dollar to a new low against the Swiss franc and a seven-week low against the euro early today. (Reuters)

AP amps up celebrity offerings

As it works to expand its entertainment offerings, the Associated Press is interested in “virtually everything involving Britney,” according to a leaked memo from Los Angeles bureau chief Frank Baker. The AP says its expansion of celebrity coverage is driven by demand from the more than 1,500 daily papers that subscribe to the venerable wire service. Although some media analysts say the move marks a sad day for journalism, AP sports and entertainment managing editor Lou Ferrera defended Baker. “If you’re an editor in L.A. and Britney Spears is in your backyard,” he said, “you want to know everything about that story.” (The New York Times, free registration)