Berkshire’s Armor Cracks; JPMorgan Bags $5 Billion Selling Deriviates; Recordati Proposes Increased Divided; China May Double Stimulus This Week; Homes Sales Continue to Break Down

• After recording its worst financial results ever last year, Warren Buffet’s Berkshire Hathaway Inc. (BRK.A, BRK.B) announced it would cut manufacturing jobs and close facilities to buffer itself against the recession. “Berkshire’s operating companies have taken and will continue to take cost reduction actions in response to the current economic situation, including curtailing production, reducing capital expenditures, closing facilities and reducing employment to partially compensate for the declines in demand,” the firm said in a regulatory filing yesterday, Bloomberg reported.

• By trading over-the-counter fixed-income derivatives, JPMorgan Chase & Co. (JPM) generated $5 billion in profits last year, Bloomberg reported citing two sources. The unit was among the most profitable for the company.

• Italian pharmaceutical company Recordati SpA is targeting higher profits and revenue in 2009 and is proposing a 16% increase in its dividend, Reuters reported. “The sales in the first two months are substantially in line with the expectations for the entire year for revenues of about 750 million euros ($946 million), operating profit of about 155 million euros ($195 million) and net profit of about 105 million euros ($132 million),” the company said in a statement.

• China may announce plans to double its $585 billion (4 trillion yuan) economic stimulus this week, Bloombergreported. “It would be a terrific boon to confidence to announce it at the NPC,” Stephen Green, Shanghai-based head of China research at Standard Chartered Bank plc, told Bloomberg.

• With job losses mounting and consumer confidence flagging, new sales contracts on existing homes fell a seasonally adjusted 7.7% in January, the National Association of Realtors said yesterday (Tuesday).  That means the index is down 6.4% from a year ago, MarketWatch.com reported. In December, the pending home sales index rose 4.8%, compared with a prior estimate of a 6.3% gain. The index is based on signed sales contracts; the contracts typically are signed a month or two before the sale is closed, which is when the sales are included in the NAR’s existing-home sales report. “We expect similarly soft home sales in the near term, but buyers are expected to respond to much improved affordability conditions and from the $8,000 first-time buyer tax credit” in the stimulus package, said NAR Chief Economist Lawrence Yun said in a statement. Pending sales for January fell in the Northeast, the South and the Midwest, but did actually rise in the West, the NAR said.

Source: Global Investment News Briefs Wednesday, March 4, 2009