My finance view

Two years ago anyone uttering the words “state” and “regulation” in the same sentence would have been sneered at in high-powered banking circles gathered by the ski slopes of Davos.

Now, more than 18 months into the biggest financial upheaval in the last eighty years, those bank executives that still have jobs are preparing to swallow large doses of regulatory medicine to help cure a crisis they are accused of causing.

With bank lending still frozen, the world sliding into recession and more than 300,000 financial jobs already gone, policymakers are replacing bankers in the driving seat at this year’s World Economic Forum (WEF) to discuss short- and long-term solutions to the sector’s woes.

“Two years ago nobody could see the problems and the risks,” said Marc Weil, head of EMEA Financial Services at consultancy firm Oliver Wyman, which is publishing a report on the state of the global financial services industry this week.

“It is clear now that the financial services industry is like no others and anyone that poses systemic risks needs tighter regulation.”

This may include greater balance sheet transparency, higher bank capital requirements and a co-ordinated effort to bring banks back toward what they used to know best: lending.

“But it is inappropriate to say we went from the Wild West of capitalism to something resembling the Soviet Union. We never had a complete free market,” Weil added.

The WEF may enable leaders such as British Prime Minister Gordon Brown, European Central Bank President Jean-Claude Trichet and EU Internal Market Commissioner Charlie McCreevy to swap notes on financial regulation ahead of key Group of Seven and Group of 20 meetings fast payday loans.

“We see an expanded room for regulatory oversight. There may be additional activities that have not fallen under the scope of regulators. It may be more a case of regulating the activity rather than who someone is,” said Bernd Jan Sikken, co-author of a WEF report on the future of the global financial sector.

Other financial leaders attending include Hu Xiaolian, Deputy Governor of China’s central bank, and Japanese Finance Minister Shoichi Nakagawa and International Monetary Fund’s First Deputy Managing Director John Lipsky.

Notably missing will be company executives, regulators and policymakers from the United States, where newly elected President Barack Obama is pushing through a giant $835 stimulus package to jump-start the economy.

PAST MISTAKES

The WEF will also offer decision-makers an opportunity to learn lessons from past mistakes.

One panel is set to analyze the 36 hours that followed the sudden collapse of U.S. investment bank Lehman Brothers in September, when more than $600 billion was burned during an unprecedented downward spiral on global markets.

Persistent instability in financial markets since the first round of state interventions that followed Lehman’s collapse showed that pumping cash into banks, arranging forced mergers or even outright nationalizations were not enough to mend the troubled banking sector. 

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As gas prices spiked last year, American motorists responded by driving less.

Motorists drove 112 billion fewer miles during the 13-month period between November 1, 2007 and November 30, 2008 compared with the year-prior period, the U.S. Department of Transportation said Thursday.

The average price of a gallon of gas on Nov. 1, 2008, was $2.46, compared to $2.91 a year prior, according to AAA. In the interim, gas prices skyrocketed to record highs, reaching $4.11 a gallon in mid-July.

Driving volume posted its steepest monthly drop in November since 1971, the DOT reported. Americans drove 5.3% less, or 12.9 billion fewer miles, compared with November 2007.

The steepest drop off in driving was reported in the South Atlantic region, with 6.4% fewer miles traveled in November 2008 compared to the same time a year prior payday loan.

Among states, the biggest drop off in driving was recorded in Rhode Island, where motorists drove 11.6% fewer miles in November 2008 over the same month a year earlier.

Overall, the decline in driving in steeper among rural motorists than urban drivers.

Average gasoline prices rose for the ninth day in a row Thursday, to $1.85 a gallon from $1.84 the day before, according to AAA.

Gas prices have increased by 23.3 cents, or 12.5%, since the start of 2009. But a gallon of gas is down 38.5% since it reached $3.01 a gallon a year ago.  

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Barack Obama took office on Tuesday with bank shares tumbling, the car sector teetering and a world economy in tatters, and the new U.S. president vowed to meet the daunting challenges.

The first African-American to become U.S. president swore to preserve, protect and defend the Constitution against a backdrop of a deep economic downturn, a trillion dollar federal deficit and fears of more bank losses.

His aides vowed to go to work immediately, armed with the authority to spend the second half of the $700 billion financial rescue plan and a proposed stimulus package of $550 billion in spending and $275 billion in tax cuts.

“That we are in the midst of crisis is now well understood,” the new president said, mentioning war, a battered economy and sagging confidence.

“Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America — they will be met,” he said upon taking the oath.

Obama is riding a wave: A CBS News/New York Times poll showed 79 percent of Americans are optimistic about the next four years. At the same time, George W. Bush leaves the White House as one of the most unpopular presidents in history, with his approval rating at 22 percent.

“The inauguration is crystallizing all expectations that the U.S. economy will be the first to recover from the recession,” said Marco Annunziata, global chief economist at UniCredit, Italy’s second-biggest bank, in London.

But that did not help the Dow faxless payday advance.DJI, which was down about 2 percent at midday, extending its losses for the year to more than 7 percent. .N

Shares in major U.S. banks were down double digits after State Street Corp (), the world’s biggest institutional asset manager, posted rising unrealized losses in its commercial paper program and investment portfolio.

State Street stock plummeted 50 percent while Citigroup (), Bank of America (), JPMorgan Chase & Co () and Wells Fargo () were all battered.

Europe’s banking index fell to a 14-year low on fears that lenders will need more state help to raise capital as recession bites and bad debts rise. Shares in Lloyds () dropped 31 percent and Barclays () fell 17 percent.

On Monday, Britain threw its troubled banks a second multibillion-pound lifeline in three months and gave its central bank approval to pump cash into the ailing economy because interest rates were close to zero.

“After yesterday’s carnage, the smoke is still hanging over the market,” says Justin Urquhart Stewart, director at Seven Investment Management. .EU

Concerns about the British banking sector pushed the British pound below $1.39 for the first time since June 2001.

European shares .FTEU3 fell 2 percent despite a better-than-expected ZEW analyst and investor sentiment index report in Germany. The monthly poll of economic sentiment by the ZEW economic think tank rose to -31.0 from -45.2 in December. 

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Toyota Motor Corp (), the world’s largest car maker, said it would cut production at several North American plants over the next few months in a bid to halve its inventory of vehicles.

Toyota shares gained nearly 3 percent in Tokyo, outperforming the overall market.

Automakers are grappling with slumping sales in the mature markets of North America, Europe and Japan as well as slowing sales in emerging markets such as India, China and Russia amid a spreading global recession.

Toyota’s announcement followed a newspaper report that Nissan Motor Co () would move production of its key subcompact to Thailand from Japan as part of a structural overhaul to cut costs.

Nissan announced further production cuts in Japan on Thursday and a source said it would post an operating loss in the financial year to March 31.

Toyota, which has warned it will post its first ever annual operating loss this business year, said its inventory of North American-built vehicles was 80-90 days, having doubled in the past year. It hopes to cut it by half in the second quarter.

Toyota said last week it would halt production at its Japanese plants for 11 days in February and March.

“The current inventory level is a record high for Toyota, though the market slump is unprecedented so rising inventories are unavoidable,” said Okasan Securities analyst Yasuaki Iwamoto.

“Sales are falling 30-40 percent every month, and this pace of fall is unheard of for either Toyota or the overall industry,” he said faxless payday loans. “Automakers have to cope with it through production cuts as quickly as possible.”

The industry downturn has caused inventories to build up even for Toyota, which is known for running lean and cost-efficient production where parts are delivered in a “just in time” system to be installed in vehicles on the assembly line.

It had already reduced North American production of its best-selling cars, including the Camry and Corolla sedans, and suspended work on a new plant in Mississippi that was due to start producing the popular Prius hybrid car from 2010.

UNPRECEDENTED SLUMP

A relentless sales slide and the yen’s sharp rise led Toyota to forecast its first-ever annual operating loss in December and prompted the company’s 2,200 general managers to voluntarily commit to buying its cars by the end of the business year.

Toyota’s sales in the United States, its key market, fell 37 percent in December.

“This is a tough environment, and it may continue for a while,” Jim Wiseman, vice president of external affairs for Toyota Motor Engineering & Manufacturing North America, said in a statement. 

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DETROIT — General Motors Corp., a wounded company living on cash borrowed from the government, didn’t behave like one on Monday as it unveiled ambitious plans to research and assemble lithium-ion batteries in Michigan and picked a Korean company to supply the cells to power the Chevrolet Volt electric car.

But a top executive raised the prospect that GM will need more federal loans later in the year if the U.S. auto market doesn’t improve, saying the company presented a worst-case scenario to the government last year that would require $18 billion in loans, $4.6 billion more than the amount granted.

The battery factory, to be opened somewhere near Detroit, will employ more than 100 people and be highly automated as it takes cutting-edge lithium-ion cells imported from LG Chem Ltd. of South Korea and welds them into battery packs for the Volt and other next-generation vehicles from GM.

GM also announced the creation of a 31,000-square-foot battery lab, the largest in the country run by an automaker, at its Warren technical center.

An existing facility that straddles the border between Detroit and the tiny enclave of Hamtramck will assemble the Volt, so southeastern Michigan is the likely front-runner to land the battery factory as well.

The Volt is designed to plug into a standard wall outlet and travel 40 miles on battery power alone. After that, a small internal-combustion engine kicks in to generate power for the car. The car is set to go on sale late next year at a price expected from $30,000 to $40,000.

Monday’s announcement at the North American International Auto Show in Detroit was fresh evidence that GM expects to survive the recession and thrive, even as Chief Operating Officer Fritz Henderson raised the prospect of federal loans beyond the $13 payday loans.4 billion already granted to the company.

Henderson wouldn’t speculate on what would cause GM to seek more money, but he said GM submitted a "downside scenario" in December that would require a total of $18 billion.

The battery announcement was among the biggest news from the Detroit show Monday, where Toyota Motor Corp. ramped up the competition in hybrid gas-electric vehicles by showing off the next generation Prius, the top-selling hybrid in the U.S.

The 2010 Prius gets an average of 50 miles to the gallon, four more than the current model, which is the most fuel-efficient vehicle ranked by the Environmental Protection Agency.

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 Gallery: See a photo gallery of new cars from Detroit.

Honda Motor Co. on Sunday unveiled a new version of the Insight to compete with the Prius, and Ford Motor Co. has a hybrid Fusion due out in spring.

Also Monday, California startup Fisker Automotive debuted a production version of its $80,000 plug-in Fisker Karma. The company also unveiled a convertible version, the Karma S, which it expects to build in 2011.

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LAS VEGAS — Despite a lot of talk about the impact of a global economic crisis, top consumer electronics manufacturers on Wednesday trotted out their key lineup additions for this year, promising to deliver those things consumers still are craving.

Many new products and initiatives focus on convenience, easier ways to connect to a wide range of entertainment options, and environmental friendliness.

Companies are offering easier ways to return electronics items that have reached the end of their usefulness, while also offering new products aimed at making previous models obsolete.

Among the products unveiled at the show so far:

Sharp has melded two high-demand items: the LCD television and the Blu-ray Disc player. The smallest of the sets features a 32-inch screen, while the largest features a 52-inch screen. The AQUOS BD series television/player should hit the market in February, with the cheapest model starting around $1,099.

Everyone wants to know which TVs are selling the best. TV makers such as Sharp say one of the strongest categories is the smaller range — around 30 inches.

Sharp executive Bob Scaglione talked about how the company (and the entire industry) has spent the past couple of years focusing on making flat panel TVs bigger and thinner. Not this year.

"We are deeply aware of the times we live in," Scaglione said.

Toshiba is promoting advancements in its Regza LCD models. These are the pricier sets in Toshiba’s lineup, with a host of new features, including better volume control and stronger picture enhancements.

But there’s another aspect of these TVs that seem to fit a theme that’s fast emerging here: The ability of consumers to have more control over all of the forms of entertainment they enjoy: television, dvds, downloaded movies, MP3 files and Internet content.

LAS VEGAS TRADE SHOW

 UPDATES: Get the latest from the show

It’s interesting to watch what seems to be a race to replace the home computer. Will it be the cell phone or the television that does it in? Maybe a combination of the two?

LG Electronics officially revealed its new wrist phone, the LG-GD910. It features 3G compatibility, touch screen interface and video calling. You can text with it and use blue tooth devices. Just don’t expect to do a lot of heavy viewing on this device, which features a rather small (1 fast personal short loans.43-inch) screen. It should be available later this year, though only in Europe initially.

The Meade ETX-LS telescope promises to eliminate one of the great hassles of astronomy. You know, the one where you actually have to find stuff in the sky. The ETX-LS does it for you. Set it up in your backyard and it automatically will scan the sky. Want to see Jupiter? Just type that into the keypad and you get to see Jupiter, assuming it’s actually visible at the time. Price: $1,299.

The Pacemaker is a handheld music lab. It has a 60 gb hard drive, two "turntables" and a mixer for $550. he manufacturer says anyone can take it out of the box and push a button and it seamlessly blends the music together like a real DJ. It should hit the stores this spring.

3D TV Panasonic’s U.S. boss, Yoshi Yamada, talked about the company’s belief in 3D technology, particularly in the home television market.Yamada said Panasonic is working with other major industry players to develop an accepted standard that will allow 3D technology for television sets to go mainstream. Yes, you’d have to sit in your living room, wearing those glasses to get the full effect. Products could hit the market by 2010, he said.

Indoor hunting? The Duck Hunter (expected to sell for $29.99 this spring) features a small, mechanical duck that can fly for 30 seconds. Or until it has been hit three times by an infrared pistol.

A new radio by Blaupunkt and Miroamer will let you listen to Internet music stations in your car — so long as you have a mobile phone with bluetooth ability. The signal streams to your phone and to the radio through a blue-tooth connection. Expect it in the second half of the year.

The Eclipse AVN726E and AVN4430, in a partnership with TomTom, are at or near the top end of GPS navigational units. They’ll also operate as a radio and DVD player and can be used with satellite radio or high definition radio. And you can play your iPod through them.

WowWee, the maker of mobile webcam Rovio, is offering a lighter version of the unusual toy. This one is shaped sort of like a softball on steroids, but looks like something out of a science fiction movie. Unlike the Rovio, which can be controlled essentially from anywhere via the Internet, the SpyBall is more of a localized toy and can be operated through a video-game system or home wifi network. "You can torment your dog, chase your brother or sister and spy on your parents," said Steve Hardy of WowWee. It should hit the market in time for next Christmas at $149.

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Gas prices increased for the third straight day Friday, to an average of $1.626 for a gallon of regular unleaded gas, according to motorist group AAA. That’s nearly a one-cent jump from the previous day’s average of $1.618.

The price of gas is down by nearly 20 cents from the prior month’s average of $1.803, and prices are off by nearly 47%, or $3.052 from this time a year ago.

Prices have plummeted along with the price of crude oil, the main ingredient in gas. Oil has shed more than $100 a barrel since July, and gas prices have followed suit, sinking by more than 60%, or nearly $2.50 since reaching a July high of $4.114 a gallon.

Motorists are driving fewer miles and buying less gas in reaction to the weakening economy. Americans drove 100 billion fewer miles during the 12-month period between November 2007 and October 2008 compared with the prior year, according to the U.S. Department of Transportation.

And gas consumption was down 3.2% in 2008 when compared to a similar length of time in 2007, according to the MasterCard Spending Pulse report, which tracks national retail sales.

For the week ending Dec. 26, U.S. gas consumption fell by 2.9%, according to data from the MasterCard Spending Pulse report.

Robert Sinclair, AAA spokesman for the New York area, projected a "strong drop" in vehicle sales "with greater emphasis on fuel economy with diesels having more prominence." He said Americans are less likely to buy SUVs when gas prices are cheap, out of the expectation that prices could rise again.

"America is a very different place now," said Sinclair no fax cash advance. "People are faint out of fear of what the future holds."

State prices: Prices remained above $2 a gallon in only two states on Friday: Alaska ($2.521) and Hawaii ($2.304). Gas was cheapest in Missouri at $1.395 a gallon on average, and sold for less than $1.50 on average in 11 states.

Out of major U.S. cities, Anchorage, Alaska, has the highest average gas prices, at $2.342 a gallon, according to GasBuddy.com, a service that lets motorists post local fuel prices online. St. Louis, Mo., has the lowest average, at $1.321.

Diesel: The price of diesel fuel, which is used in most trucks and commercial vehicles, fell to an average of $2.411 on Friday.

Ethanol: The price of E85, an 85% ethanol blend made primarily from corn, increased by a cent to an average of $1.470 a gallon in Friday’s survey, according to AAA. E85 can be used in place of regular gas in specially configured "flex-fuel" vehicles, but it is not readily available in some states.

The AAA figures are state-wide averages based on credit card swipes at up to 100,000 service stations across the nation. GasBuddy prices are averages of local regular unleaded gasoline prices that about 700,000 volunteer gas prices spotters have posted online. Individual drivers may see lower fuel prices in different areas of each state.

CNNMoney.com staff writer Aaron Smith contributed to this report.  

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