Employees walk past a sign at Merril Lynch headquarters in New York in this file photo.

WASHINGTONG,
Jan. 30--The FBI is investigating 14 companies embroiled in the subprime mortgage crisis as part of a crackdown on improper lending. It did not identify the companies but said the investigation encompassed developers, subprime lenders and investment banks, BBC wrote.
FBI officials said the agency was looking at instances of accounting fraud and insider trading. The cases could lead to potential civil or criminal charges, the FBI said.
The FBI said it viewed mortgage fraud as an increasing threat to the national economy. It said that there had been 1,200 cases of mortgage fraud for the 2007 financial year compared with just 400 in 2006. The crisis in the subprime lending market has hit financial markets worldwide.
The FBI said it was investigating the cases with the US market regulator, the Securities and Exchange Commission. The SEC has opened about three dozen investigations into the collapse of the subprime market. Targets of the SEC probe include Swiss bank UBS and US banks Morgan Stanley, Merrill Lynch and Bear Stearns, Reuters news agency reported.
It was not clear whether any of these firms were involved in the FBI investigation.
The subprime market is focused on providing home loans to those with poor or limited credit histories. Many of these borrowers have been unable to keep up with payments and face losing their homes.
The wider crisis emerged as many of these mortgages were converted into financial instruments and sold on to investors including the big investment banks. Defaults on these loans caused a steep drop in the value of related investments and has led to more than $100bn of losses at banks worldwide.
Meanwhile, the House, seizing a rare moment of bipartisanship to respond to the US economy’s slump, overwhelmingly passed a $146 billion (99 billion euros) aid package Tuesday that would speed rebates of $600-$1,200 (406-812 euros) to most taxpayers.
The plan, approved 385-35 after little debate, would send at least some rebate to anyone with at least $3,000 (2,000 euros) in income, with more going to families with children and less going to wealthier taxpayers.

LONDON, Jan. 30--The leaders of Europe’s biggest economies have called on financial institutions to improve transparency in all their activities. UK Prime Minister Gordon Brown met his French, German and Italian counterparts at Downing Street to discuss the recent global market turmoil, BBC reported.
The leaders also called on the IMF and other bodies to monitor risks better. If the finance industry did not address their concerns, they said they would consider imposing regulatory measures.
“We need a better early warning system for the global economy,“ Brown told reporters. “We want the prompt and full disclosure of the write-offs that are now to take place as soon as possible; I think these are the immediate things people want to be done,“ Brown said.
Brown said credit rating agencies, that assess the risks of financial instruments, needed to increase investors’ understanding of complex products.
Brown met German Chancellor Angela Merkel, French President Nicolas Sarkozy and Italian Prime Minister Romano Prodi.
“We want the kind of capitalism that promotes entrepreneurship not speculation,“ said Sarkozy afterwards. “We can’t let this lack of transparency jeopardize growth.“
The leaders said in a statement that if financial institutions did not rapidly address their concerns, they were ready to introduce rules and regulations as an alternative to “market-led solutions“.
Merkel said that the lack of openness about the activities of some financial institutions had eroded trust and could lead to a rise in protectionism.
Consumer confidence is deteriorating across Europe as stock markets plummet and the Societe Generale rogue trader scandal makes headlines. And the US economy, a major destination for European exports, could be headed for a recession, some economists say.
Earlier, European Commission President Jose Manuel Barroso said on Tuesday that the European Commission would next month lower its Eurozone growth projections, but Europe is not facing a recession, AFP wrote.
The EU’s economy is “not completely immune“ to any downturn in the United States, but “nobody is speaking about a recession in Europe,“ he told a conference in Brussels. He conceded that “yes there is turbulence in the financial markets“ and that investor confidence had been hit but insisted that in Europe “there is no need to rush for the life boats“.

ZURICH, Switzerland, Jan. 30--Subprime-related problems at UBS AG deepened on Wednesday as the Swiss bank unveiled $4 billion in new writedowns in a surprise statement, dragging the embattled bank deep into the red for the year.
UBS posted a 12.5 billion Swiss franc ($11.45 billion) loss for the last three months of 2007 and a full-year loss of 4.4 billion francs. The bank had previously left open the possibility of a full-year loss, depending on its performance in the final quarter, Reuters wrote.
UBS is one of the hardest-hit banks worldwide from the credit crisis that has caused over $100 billion in losses, gashed balance sheets and forced some of the proudest institutions like UBS, Citigroup and Merrill Lynch into emergency capital-raising measures.
The surprise announcement adds to the sense of chaos in Western banking after Societe Generale last week shocked with a $7 billion loss it blamed on a lone trader--the worst trading loss in history by far.
The new writedowns bring the total writedowns from the sub-prime debacle to $18.4 billion at UBS and will likely increase pressure on chairman Marcel Ospel, who presided at the group during its push into risky US investments, to resign.
UBS shares were seen sharply lower in pre-market indications. “This is certainly not good,“ said analyst Georg Kanders at bank WestLB. “I had expected less.“
The group last month announced a 13 billion Swiss franc capital injection from Singapore and an unidentified Middle East investor and hopes to convince shareholders to approve the plan at an extraordinary meeting on Feb. 27.
UBS is now struggling to restructure its investment bank and repair its credibility after the staggering losses, which have pushed its shares 40 percent lower over the past year.

JOHANNESBURG, South Africa, Jan. 30--South Africa, which had forecast five-percent annual growth until the end of the decade, will struggle to hit half that figure owing to its electricity crisis, economists warned on Tuesday.
“It’s a question of if we can get the growth to 3 percent which, given the crisis the country finds itself in presently, I don’t think we will,“ said Mike Schussler, senior economist at Johannesburg-based brokerage T-Sec, AFP wrote.
“We may have to settle for at least 2 percent, depending on the severity of the crisis.“
Presenting his annual budget last February, South Africa’s veteran Finance Minister Trevor Manuel painted a rosy picture of the nation’s economic future, predicting growth would be at least 5 percent in the coming three years.
But while the government has yet to concede its plans have been blown off course, economists say the drastic shortage of power which has forced daily blackouts will inevitably lead to a smaller level of growth.
The country’s mining industry, the backbone of Africa’s biggest economy, has been crippled by the outages with gold, diamonds and platinum producers having to halt all but essential maintenance operations since last Friday.
According to a report in Tuesday’s Financial Times, mining company Rio Tinto is to review plans for a $2.7 billion (1.8 billion euro) aluminum smelter complex in South Africa as a result of the power shortages.
Dick Evans, head of Rio Tinto Alcan, Rio Tinto’s aluminum division, told the London-based daily that the company would not begin to spend “big money“ unless “we are absolutely convinced they can supply the electricity in the timeline we are working on“ in a sign of how investors are losing heart.
Razia Khan, Standard Chartered’s chief Africa analyst, said the crisis will have a “shock impact“ on economic growth and warned that the annual rate could fall as low as 2 percent “depending on how long-lasting the crisis is“.
“This is a supply-side shock that will affect not just mining, but manufacturing, retailing and other services--there is no economic sector that is immune so the economy will be negatively impacted for sure,“ she added.

New york, Jan 30--Oil prices climbed higher in Asian trade Wednesday ahead of an expected fresh cut in US interest rates, dealers said.
Prices were also getting support from expectations that OPEC will leave current production quotas unchanged when the 13-member oil group meets in Vienna on Friday for a crucial meeting about its output levels, they were quoted by AFP as saying.
In afternoon trade, New York’s main contract, light sweet crude for March delivery, rose 55 cents to $92.19 per barrel from its close of $91.64 Tuesday on the New York Mercantile Exchange.
Brent North Sea crude for March delivery was 41 cents higher at $92.41 per barrel.
Analysts expect the US Federal Reserve to cut interest rates again at the conclusion of a two-day policy meeting that began Tuesday. A decision was expected Wednesday at about 1915 GMT.
Whether the expected rate cut would shore up the US economy and prevent slowing energy demand would not be known immediately, said Justin Wilks, director of trading and operations with Global Commodities in Australia.
“The rate cuts take a few months to play into the market. We just have to wait and see,“ he said. “Definitely it would appear there is a bit of sentiment towards a possible US recession.“
“The view out there was the 0.75 percentage point cut we had last week looked a little bit panicky. They might follow up with another cut.“
The rate is currently 3.50 percent after last week’s emergency cut, a move aimed at calming global financial markets roiled by growing fears of a recession in the world’s biggest economy.
Oil traders are watching the Fed’s moves closely because the United States is the world’s largest energy user. A slowdown in US economic growth could dent oil demand.

QUITO, Ecuador,
Jan. 30--Ecuador will impose price controls on basic foods including rice, milk, corn, bananas, and flour, in a bid to stem creeping consumer costs, Agriculture Minister Walter Poveda said Tuesday.
“We’ve seen prices rise and rise for consumers. We think the state must intervene“, Poveda told Teleamazonas television, AP wrote.
The new controls will “protect consumers and producers, save and conserve harvests, and provide for a sustainable supply of exports“, he added, without detailing the scheme or when it would be introduced.
Although annual inflation was just 3.3 in 2007, Ecuador cannot allow food prices to reach levels seen in developed countries until its economy provides comparable jobs, Poveda said.
Leftist President Rafael Correa, a US-trained economist and ally of Venezuelan leader Hugo Chavez, has blamed rising food prices not on market forces, but on a conspiracy by businesses opposed to his government.
In Venezuela, price controls have prompted scattered shortages of sugar, meat and beans--something Chavez likewise blamed on businessmen and distributors.
Ecuador last implemented price controls on basic foods during the 1988-1992 government of President Rodrigo Borja.

SEOUL, South Korea, Jan. 30--South Korea’s Hyundai Motor Co. is planning to produce a low-cost mini car in India by 2011 to compete with locally produced vehicles such as Tata’s new Nano, a company executive said Wednesday.
The low-cost, fuel-efficient mini car models will be priced between 3.5 million Korean won ($3,700; 2,500 euros) and 5 million won, Cho Won-suk, executive vice president of Hyundai Motor’s Advanced Technology Center, told Dow Jones Newswires at an industry event, AP wrote.
Mumbai-based Tata Motors Ltd. recently unveiled the Nano-billed as the world’s cheapest car--and said it will go on sale for $2,500 (1,700 euros) by October.
Cho said no production of the mini-car is planned for South Korea.
Hyundai is the second-largest automaker in India, where small cars dominate the market. Maruti Suzuki Ltd., in which Japan’s Suzuki Motor Corp. owns a majority stake, is the market leader with about 50 percent share. Homegrown Tata Motors is third-biggest.
Hyundai is pushing to diversify its product portfolio with fuel-efficient cars, and plans to introduce a version of its Avante sedan powered by liquefied petroleum gas by 2009, said Cho.
The company also aims to introduce a sport utility vehicle and midsize sedans power by fuel cells by 2012, he said. It is targeting the launch of a hybrid car by 2020, he said.
Hyundai, together with its affiliate Kia Motors Corp., is the world’s sixth-largest carmaker by sales.

SAN FRANCISCO, USA, Jan. 30--It’s not a pleasant time to be a Yahoo Inc. employee or shareholder.
Hoping to snap out of a financial malaise, Yahoo is preparing to lay off as many as 1,000 workers in the Sunnyvale-based company’s biggest purge since it was scrambling to survive the dot-com bust seven years ago, AP wrote.
Cost-cutting like that normally makes investors happy, but Wall Street wasn’t in a celebratory mood late Tuesday after Yahoo reported a 23 percent drop in its fourth-quarter profit and provided a tepid outlook for 2008.
The one-two punch pounded Yahoo’s already sagging shares, hurling the stock 10 percent lower in extended trading. The backlash extends a decline that has obliterated $35 billion in shareholder wealth since the end of 2005, slashing Yahoo’s market value by more than 50 percent.
Unless Yahoo can bounce back soon, the company could face more pressure to find a buyer or make another dramatic move like hiring rival Google Inc. to run its search engine and generate more ad revenue. Microsoft Corp. has been mentioned as Yahoo’s most likely suitor, although more analysts are starting to question whether Yahoo’s deepening funk will scare off potential bidders.
Jerry Yang, a Yahoo co-founder who became chief executive seven months ago in an attempt to shake things up, remains confident better times are ahead as the company realizes the gains from recent acquisitions and ad partnerships.