DECEMBER 18, 2009

Retail Sales Continue to Improve

Retail sales increased for the second consecutive month as November sales rose 1.3 percent after a 1.1-percent increase in October. Two of the main drivers were a 6-percent jump in gasoline station sales and a 1.6-percent increase in auto sales. Sales excluding autos and gas increased by 0.6 percent during November, highlighting the fact that other sectors also contributed to growth. Electronics, building materials and non-store retail sales also posted growth during the month as consumers took advantage of discounting to make purchases. The recent sales momentum could be a sign that consumer spending is firming during the holiday shopping season.

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DECEMBER 18, 2009

Senator Lisa Murkowski of Alaska said this week that she plans to file a disapproval resolution in the Senate to stop the U.S. Environmental Protection Agency from regulating greenhouse gas emissions under the Clean Air Act, according to SNL Energy. Murkowski argued that Congress should be given the time it needs to draft and debate climate change legislation rather than the EPA issuing new regulations. A disapproval resolution is referred to the committee of jurisdiction, which in this case will be the Senate Committee on Environmental and Public Works. If the committee does not favorably report the resolution within 20 calendar days, it may be discharged upon petition by 30 senators. Once a disapproval resolution is placed on the Senate calendar, it is then subject to expedited consideration on the Senate floor and not subject to filibuster.

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DECEMBER 18, 2009

Citigroup and Wells Fargo have reached agreement with the federal government to repay their bailout funding from the Troubled Asset Relief Program (TARP), according to the Financial Times. The two banks are the last two big lenders—out of the nine major banks that took bailout funds in October 2008—that have yet to repay TARP funds and remain subject to the strict limits on compensation and operations that accompanied last year’s government cash injections. TARP is a U.S. government initiative to purchase assets and equity from financial institutions to strengthen the financial sector as a result of the subprime mortgage crisis and capital markets turmoil.

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DECEMBER 18, 2009

This week the U.S. Energy Information Administration (EIA) published “The Annual Energy Outlook 2010,” which updates projections for U.S. energy consumption and production through 2035. The EIA projections “show that existing policies that stress energy efficiency and alternative fuels, together with higher energy prices, curb energy consumption growth and shift the energy mix toward renewable fuels,” said EIA Administrator Richard Newell. “However, assuming no new policies, fossil fuels would still provide about 78 percent of all the energy used in 2035.”

Key findings of the report, based on reference case projections that do not include the effects of potential future policies that have not yet become law and only include technologies that are commercially available or can reasonably be expected to become commercially available over roughly the next decade, included:

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DECEMBER 18, 2009

Last week the U.S. House approved legislation that places new restrictions on Wall Street and the activities of the nation’s largest banks, requires Federal Reserve monetary policy be subjected to audits and gives shareholders a say on the pay of top executives of financial firms, according to The New York Times.

The legislation, which is the most ambitious restructuring of federal financial regulations since the New Deal, is an attempt to thwart a replay of last year’s Wall Street failures that plunged the nation deep into recession. The measure creates a new agency to oversee consumer lending, establishes new rules for transactions that contributed to the meltdown and seeks to reduce the threat that one or two huge companies on the verge of collapse could bring down the entire U.S. economy.

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DECEMBER 4, 2009

Moody’s Investors Service announced in November that it has affirmed the debt ratings of CFC and maintained CFC’s stable rating outlook. CFC ratings affirmed by Moody’s were: senior secured debt at A1; senior unsecured debt at A2; subordinated debt at A3; and short-term debt at Prime-1.

“We are pleased that Moody’s recognizes the sound financial position of CFC and its members,” said CFC Governor and CEO Sheldon C. Petersen.

Moody’s Senior Vice President A.J. Sabatelle said, “The rating affirmation and maintenance of a stable rating outlook reflects the continued strength of CFC’s loan portfolio, its unique market position as the dominant lender to electric distribution cooperatives, the ability of CFC to continue producing margins consistent with its targeted adjusted TIER, adequate liquidity and the initiatives taken by CFC within the last year to reduce leverage over time.”

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