Four major banks failed Fed's stress tests

Four banks failed at least one of four criteria in the test:
Citigroup, Suntrust Banks, Ally Financial and the insurance giant
Metlife.

The Federal Reserve said 15 of the 19 largest U.S. banks would remain
healthy even in a crisis that saw the markets plummet and the
unemployment rate rise above 13 percent. The results of the stress
tests, which were released earlier than planned, show the scope of the
recovery of the nation's financial system since it nearly collapsed in
2008.

Fed considers new form of quantitative easing

The Federal Reserve is considering a new kind of bond-buying program
that would simultaneously try to limit inflation, according to a
report in the WSJ.

The Fed would print new money to buy long-term mortgage or Treasury
bonds but effectively tie up that money by borrowing it back for short
periods at low rates.

U.S. GDP growth revised up to 3% in fourth-quarter

The U.S. economy grew 3% in the fourth quarter, faster than original
reading, the government reported Wednesday Increase in commercial
construction and consumer spending couple with lower imports
contributed to the higher growth.

The increase was the fastest in a year and a half, according to
revised Commerce Department data. Economists projected GDP growth
would be revised down to 2.7% from an initial reading of 2.8%.

Real final sales in the U.S., which exclude imports and inventories,
rose 1.1% instead of 0.9% as originally reported. Inventories, a major
source of fourth-quarter growth, totaled $54.3 billion instead of $56
billion as initially reported.

Inflation as measured by the consumer PCE index rose 1.2% in the
fourth quarter, or by 1.3% on a "core" basis if food and energy are
excluded.

Real disposable income climbed 1.4% in the fourth quarter, compared
with an earlier reading of 0.8%. The personal savings rate was 4.5%,
up from an initial estimate of 3.7%.

Facebook: the biggest internet IPO

With $5 billion initial public offering, Facebook would make it the biggest U.S. Internet IPO in history, topping the debut of its arch-rival Google Inc.

Facebook filed late Wednesday its much-anticipated IPO filing, setting the stage for what's expected to be the biggest public trading debut for an Internet company since 2004 when Google went public in a $1.7 billion IPO.

The social networking giant Facebook's IPO would also mark a high point in the rapidly growing social networking market, underscored last year by the public trading debuts of such players as LinkedIn (the professional networking site) and (Zynga Inc.) the social gaming company.

The IPO of Facebook also would rank among the top 10 biggest overall in U.S. history of U.S.-based companies. That list is led by Visa Inc., whose 2008 IPO was worth $17.9 billion, followed by General Motors in 2010 at $15.8 billion, AT&T Wireless Group in 2000 at $10.6 billion and Kraft  in 2001 at $8.7 billion, according to S&P Capital IQ.

U.S. economy is healing

The U.S. economy grew at a modest 2.8 percent rate in the final three months of last year, the fastest since spring 2010 and was the third straight quarter that growth has accelerated.

 

Americans spent more on cars and trucks, and companies built up their stockpiles. But growth in the fourth quarter and all of 2011 was held back by the biggest annual government spending cuts in four decades.

 

The Commerce Department says the economy grew just 1.7 percent last year, roughly half of the growth in 2010 and the worst since the recession.

Fed is likely to leave interest rate near zero through 2014

The Federal Reserve said Wednesday that it was likely to leave short-term interest rates at near zero levels at least through late 2014. The Fed is pushing out its easy-monetary policy even further into the future than previously indicated.

An interest-rate forecast is a historic step for the Fed, the latest in a series of moves under Chairman Ben S. Bernanke to increase transparency and communications with the public.

Policymakers at the central bank acknowledged the recent improvements in the economy but said that they expected economic growth over coming quarters to be modest and the unemployment rate, currently 8.5%, to decline only gradually. The Fed committee repeated its concern that strains in global financial markets continue to pose significant downside risks to the economic outlook.

Since August, the Fed had said it was likely to keep the federal funds rate at near zero at least through mid-2013. The federal fund rate broadly influences rates on loans for businesses and consumers.

Google users has to agree to new privacy policy

Google announced Tuesday that it will require all of its users to agree to a new privacy policy that will integrate user data across 60 Google products including Gmail, YouTube and search. The policy will also encompass information, including location data, collected on mobile devices. Users will not be allowed to opt-out. It will take effect March 1.

According to Google privacy director Alma Whitten said that “if you're signed in, we may combine information you've provided from one service with information from other services. In short, we'll treat you as a single user across all our products, which will mean a simpler, more intuitive Google experience."