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BEIJING – The United States should not make a political issue out of the yuan, a Chinese central banker said on Friday, as the two countries lurched towards a potentially serious clash about Beijings currency regime.

Peoples Bank of China Vice Governor Su Ning was responding to a question about remarks on Thursday by US President Barack Obama, who called on China to move to a “more market-oriented exchange rate”.

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Washington – China remained the top holder in the ballooning US debt last year, revised data showed, after earlier indications it had been eclipsed by Japan drew speculation about Beijings motives.

Revised data released late Friday by the Treasury Department indicated that while China had cut back on its bond holdings, the level was still well above that of Japan.

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WASHINGTON – Marathon negotiations in the US Senate on financial regulatory reform were set to continue Sunday with a renewed focus on financial consumer protections after key Republicans rejected a compromise offer from the banking committee chairman.

Sources told Reuters Saturday night that neither Democrats nor Republicans had embraced an offer made on Friday by Democratic Senator Christopher Dodd to scale back President Barack Obamas proposed Consumer Financial Protection Agency (CFPA).

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WASHINGTON – Freddie Mac lost $7.8 billion in the final three months of last year, but the mortgage finance company didnt need a federal cash infusion for the third quarter in a row.

Freddie Mac, which has been controlled by federal regulators since September 2008, lost $2.39 a share, the company said Wednesday. The loss included $1.3 billion in dividends paid to the Treasury Department, which has an almost 80 percent stake in the McLean, Va., company.

The results were a marked improvement over the fourth quarter 2008 when Freddie lost $23.9 billion, or $7.37 a share.

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NEW YORK: US and European stocks eked out gains on Monday, lifted by defensive shares, while the euro edged up from 8-1/2-month lows despite persistent worries about the fiscal health of highly indebted nations in the euro zone.

A modest rebound on Wall Street helped pushed the euro to a session high above $1.37, although sentiment toward the single currency remained broadly negative, analysts said. US stocks edged higher after results at drugstore operator CVS Caremark Corp. and toy maker Hasbro Inc. topped expectations and both companies raised their outlooks. Rising defensive stocks such as drug makers helped European shares snap three days of losses, but worries about Greece and other debt-laden European countries kept gains in check.

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WASHINGTON – The governments response to the financial meltdown has made it more likely the United States will face a deeper crisis in the future, an independent watchdog at the Treasury Department warned.

The problems that led to the last crisis have not yet been addressed, and in some cases have grown worse, says Neil Barofsky, the special inspector general for the Troubled Asset Relief Program, or TARP. The quarterly report to Congress was released Sunday.

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DO hedge funds have an impact on energy trading?

While the answer might seem intuitive, the debate as to whether they actually do has come to resemble the medieval theological dispute about how many angels can dance on the head of the pin.

Because, like angels, many trades in energy futures are invisible, and it is often not possible to pinpoint where they take place.

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WASHINGTON: The federal budget deficit hit an all-time high for the month of December, and the red ink for the first three months of the current budget year is rising at a more rapid pace than last years record clip.

The massive tide of red ink, reflecting the continued fallout from a deep recession and a severe financial crisis, highlights the challenge facing President Barack Obama as he pledges to get control of runaway deficits.

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WASHINGTON: In a bid to toughen up on Wall Street, the Obama administration next month will ask Congress to impose a new tax on big financial firms, arguing they have to pay for sending the world's financial system into chaos. President Barack Obama on Thursday proposed fees of 15 basis points on so-called high-risk transactions of big banks and financial institutions who derive profits from trades in derivatives and other complex financial instruments.

Under current law, the president must submit a plan to Congress to recoup the Troubled Asset Relief Program, or TARP, losses by 2013 so that the program does not add to the national debt. The administration, through current Treasury Department accounting, estimates TARP is running a deficit of $117 billion.

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WASHINGTON: The Obama administration says it is removing the $400 billion financial cap it will provide to Fannie Mae and Freddie Mac to keep the mortgage giants from failing.

Treasury Department officials said the cap will be replaced with a flexible formula to ensure the companies can stand behind the billions of dollars in mortgage-backed securities they sell to investors. Since the financial crisis hit last year, the Fannie and Freddie have received $111 billion in government infusions.

In August, the administration projected the cost for rescuing Fannie and Freddie would total $170 billion. While most analysts believe the companies are unlikely to use the full $400 billion, the administration decided to remove the cap to eliminate any doubts. The amendments to these agreements announced today (Thursday) should leave no uncertainty about the Treasurys commitment to support these firms as they continue to play a vital role in the housing market during the current crisis, Treasury said in a statement.

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