By Lydia DePillis
USA Today leads with Apple CEO Steve Jobs’ announcement that he will go on a six-month medical leave due to health problems that are “more complex than originally thought.” The Wall Street Journal and Washington Post lead with the dismal situation facing banks—especially Bank of America, which needs more cash to complete its purchase of Merrill Lynch—as fourth-quarter returns show the full extent of their losses. The Los Angeles Times leads with a look at how many firms are opting for broad-based salary cuts and mandatory furloughs rather than layoffs to stay afloat, hoping to get out of the gate quickly as the economy recovers.
The New York Times leads with news that as falling oil prices deflate his political clout, President Hugo Chávez of Venezuela is inviting Western oil companies to come back after he nationalized many of their oil fields in 2007. His preferred partners from Iran, China, and Belarus haven’t been able to reverse the country’s declining oil output, while the state-owned Petróleos de Venezuela has become increasingly dependent on foreign contractors like Halliburton to facilitate the more complex projects.
Wall Street became suddenly very concerned with Steve Jobs’ health, as the 53-year-old pancreatic cancer survivor announced in an e-mail to employees he would be temporarily relinquishing CEO duties to Chief Operating Officer Tim Cook. According to the Journal, Apple is staying tight-lipped about Jobs’ illness, which hasn’t made investors happy: The company’s stock dove 7 percent on news of the turnover. Both USAT and the Post’s articles read like obituaries. Sources tell the LAT that although Jobs says he’ll remain involved in major decision-making, this is really a way of transitioning to the next generation of leadership at Apple, with Cook as a leading contender for the top job.
Also rocking the tech world, the Journal reports that Microsoft may be planning a round of layoffs, although the number would be far fewer than the 15,000 that have been rumored in recent weeks. Google hasn’t announced major staffing cuts so far, although the company won’t be doing much hiring in the near future.
Turns out that Bank of America will need more bailout cash after all in order to close its acquisition of Merrill Lynch, which has lost 60 percent of its value since the sale agreement was announced last year. Bank of America CEO Kenneth Lewis had previously said that his company would not need federal help to purchase Merrill, but the company has so far received $25 billion and is expected to get more if Congress votes to release the second half of the bailout funds, which it may (or may not!) do as early as this week.
Meanwhile, congressional Democrats’ proposed stimulus package has grown to $850 billion—three times the size of early estimates in the wake of Barack Obama’s victory—including $300 billion in tax cuts. Final details will be released today, and President-elect Obama has asked that Congress pass a plan by the middle of next month.
The NYT fronts a look at one of the uglier sides of the housing bust: “foreclosure rescue companies” that charge consumers thousands of dollars upfront while doing little or nothing to help them keep their homes. And USAT reports that there are a lot to prey upon: A record 3 million houses foreclosed last year, up 81 percent from 2007.
As the Gaza offensive drags into its fourth week, an A1 NYT analysis shows that the Israeli incursion may have the opposite of its intended effect: Hamas is likely to survive in some form after the military operation ends, the paper says, while Fatah and its leader, Mahmoud Abbas, enjoy less and less support among Palestinians. Egypt sees a cease-fire on the horizon, perhaps in five or six days. Consternation over the high civilian death toll has continued to mount; half of the 1,000-plus Gazans killed to date were noncombatants.
Cabinet confirmation news is coming hot and heavy: Following tax-related hiccups in Timothy Geithner’s confirmation proceedings, Tom Daschle’s appointment to Health and Human Services has also hit the skids in committee hearings due to questions about his association with an education loan provider. Along with the still-nameless opening at Commerce, three Cabinet positions are likely to go unfilled by Inauguration Day, unless Republicans make trouble with Eric Holder’s nomination for attorney general. USA Today preens over its senatorial shoutout at hearings for EPA nominee Lisa Jackson, whom Sen. Barbara Boxer questioned about the paper’s investigation of toxic air pollution around schools. The Journal takes a look at the record of Obama’s pick to head the Securities and Exchange Commission, Mary Schapiro, saying she’s been timid as Wall Street’s brokerage account watchdog—the paper doesn’t quite fault her for missing the Madoff scandal and failing to avert the mortgage meltdown, but it wants to.
The real winner in confirmation hearings this week, the Journal notes, is the coal industry, with Jackson and Energy Department nominee Stephen Chu backpedaling on previous criticisms of the energy source.
Basically nothing is happening in Washington, D.C., as a security cordon closes around the city in advance of Inauguration Day. The effort will involve 20,000 police officers at a cost of $50 million to the city, plus the entirety of the federal government’s intelligence establishment. The Post highlights D.C.’s plans for its homeless people, who are being urged to stay in shelters as the city goes into lockdown. The balls aren’t even all that, grouses the (jaded?) LAT.
Military officials are saving some time by drawing up plans for a faster Iraq withdrawal in anticipation that Obama would reject the current ones as being too slow.
The NYT continues to puzzle over the Madoff mystery, this time focusing on the relationship between Bernie Madoff and his wife, Ruth. They dined alone together almost every night—did she really not know anything about her husband’s massive Ponzi scheme? And why did she feel the need to put her name on a kosher cookbook when Bernie loves pork sausage?