GM to list on NYSE, TSX

Now that GM is turning a profit, it plans a triumphant return to the New York Stock Exchange and Toronto Stock Exchange after its initial public offering.

The IPO, intended to repay a portion of the automaker’s government bailout, has been dubbed “Project Dawn,” said the source, who declined to be named because preparations for the IPO remain private.

Before its 2009 bankruptcy, GM shares traded on the New York Stock exchange, and its return had been widely expected as the automaker begins to distance itself from its government-led restructuring and attracts private investors. Adding a stock listing in Toronto would underscore the role that the governments of Canada and Ontario played as junior partners to the U.S. Treasury in keeping GM from liquidation in bankruptcy.

The number of shares to be sold by the U.S. government, the governments of Canada and Ontario, the United Auto Workers union healthcare trust and other shareholders has not been determined. GM is not expected to issue new common stock in the IPO but plans to sell about $3 billion in mandatory convertible securities that convert into shares in the future

Dollar waves at 15-year low, but departs quickly

The dollar neared a 15-year low against the yen on Wednesday on fears the Federal Reserve could embrace more monetary easing to jolt a faltering recovery but it recouped its losses on better-than-expected U.S. jobs data.

Data showing U.S. private employers added more jobs than expected in July helped the dollar recover lost ground against the yen and also slowed recent gains in the euro, which hit a three-month high on Tuesday.

Private employers added 42,000 jobs in July, compared with a revised gain of 19,000 in June, the report by a payrolls processor ADP Employer Services showed on Wednesday.

The rise in hiring was slightly higher than an estimate from economists surveyed by Reuters for a gain of 40,000 private-sector jobs. The June ADP figure originally was reported as a gain of 13,000 jobs.

While above market expectations the gains still show the economy has not gained the job-creating momentum to pull the unemployment rate down from above nine percent.

Employment levels are considered key to a pickup in consumer spending and to boosting overall U.S. economic growth which has shown signs of weakness in recent months. Data last Friday showed U.S. economic growth slowed in the second quarter of this year.

Economists sometimes use the ADP report to narrow down their estimates for the U.S. Labor Department’s payrolls numbers due Friday, but it is not always accurate in predicting the outcome.

Know your Finance Reform: Too Big to Fail

“Too Big to Fail” Council

A 10-member council of regulators led by the treasury secretary monitor threats to the financial system.The council decides which companies are so big or interconnected that their failures could upend the financial system. Those companies would be subject to tougher regulation.

If such a company teetered, the government can liquidate it. The costs of taking such a company down would be borne by its industry peers.

The council could overturn new rules proposed by the consumer protection agency. That’s supposed to happen only to rules deemed a threat to the financial system.

Finance Reform 2010

The other day, I searched the Internet for a PDF file of the Finance Reform Bill that passed just this week. Thinking I would find a moderately sized document, I would print out a few pages and highlight some key concepts that people would be interested in.

The document was 1,336 pages long.

I will do my best to slog through it over the next week or two, so stay tuned to the Biz Blog to get your finance reform highlights.

Wall Street bill ready to go

It looks as though the Democrats in Congress are about to get the 60 votes they need to advance the broadest overhaul of US financial rules since the Great Depression.

Senator Harry Reid said he wants to hold a final vote later in the day and send the measure to Obama’s desk.

Republicans could delay the vote until Friday evening, but are unlikely to do so.

The House of Representatives has already approved the bill. The bill tightens regulations across the financial industry, an attempt to prevent a financial crisis like 2007-2009. The bill gives regulators greater power to dismantle firms, limits risky trading, and establishes new consumer protections.

It seems the Democrats are attempting to show voters they are willing to crack down on the financial industry. Early polls show the Republicans are set to make big gains in the November elections.

Recent polls have shown Obama’s approval rating taking a beating. This one is from Rasmussen Reports.

This does not bode well for Democrats and any measures they pass immediately before the election may be too little too late.

Stocks rally Tuesday

The long holiday weekend has breathed life into the stock market. Stocks have rallied on Tuesday. Investors went after shares hit when indexes down over 15% over the past two months.

Both the Dow and Nasdaq closed at an eight month low on Friday. The Dow Jones was up by 140 points or 1.5%. The Nasdaq composite was up 38 points, about 1.9%.

Gains were broad based, with 29 of 30 Dow shares rising, led by Caterpillar, Chevron, Hewlett-Packard, IBM, Microsoft, JPMorgan Chase, 3M and Wal-Mart Stores.

Progress from banks are helping to drive the recovery. Bank of America was up 2.5% and the KBW bank index was up 2.6%.

Obama urges regulations on Wall Street

Barack Obama spoke in New York in an attempt to hasten congressional approval of financial regulation reforms on Wall Street. Obama has taken a more hands-on approach than he did with health care reform, threatening veto if the bill is too watered-down.

There are five elements Obama considers essential to the legislation.

A system to protect the economy from a large firm’s failure.

Limiting the size of banks and what risks they can take.

Bringing more transparency to derivatives markets.

Creating more consumer financial protections.

Giving investors and pension holders more say in who manages companies.

Here’s the real deal.

Capitalism is only as strong as its consumers. Everything that Barack Obama does is motivated politically. Though one may think that means he considers the opinion of the people, it is just politics. The atmosphere of Washington D.C. is one wildly different than the rest of the country.

It is up to the American people to repair the economy. If someone is selling a product that no one wants to buy, they don’t deserve a government bailout. They need to find a better product.

Unfortunately, it seems as though a pattern has developed. Ignore something long enough and the government will do something about it. The American consumer has forgotten that they have control.

On one hand, these reforms may seem necessary, perhaps even a good thing. But, these reforms are another step toward socialism.

Socialism is any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods (Merriam-Webster Definition).

Goldman Sachs fights fraud

The SEC charged Goldman Sachs with fraud last week. They said the firm misled investors on a collateralized debt obligation. Goldman Sachs allegedly failed to disclose that Paulson & Co, a hedge fund, helped select loans and then bet against them.

Fabrice Tourre, the only individual named in the SEC’s case has agreed to testify and defend his actions at the Senate hearing. Goldman Sachs will not go down without a fight. The firm is contesting the claims. The CEO of Goldman Sachs, Lloyd Blankfein, also intends to speak publicly about the firm. He says the company has nothing to hide, and he intends to prove it.