Home Depot Inc., the largest U.S. home-improvement retailer, reported on Tuesday that fourth-quarter profit fell a sharper-than-expected 27% as operating costs rose. In a statement, Frank Blake, chairman and chief executive, called the 2008 industry outlook "challenging."
A closely watched gauge of German business sentiment posts an unexpected rise in February, driven by an improvement in current conditions but undercut by less sanguine expectations for the future.
Standard Chartered bank announces a large increase in profits and higher losses from risky investments. Source: BBC News | Business | World Edition | 26 Feb 2008 | 12:01 pm
Wall Street was poised to open mildly higher Tuesday following the previous session's rally inspired by optimism about the health of ailing bond insurers. But investors also will be... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Feb 2008 | 11:58 am
WASHINGTON (Reuters) - Efforts to save U.S. homeowners from foreclosure should not unduly alter the contracts behind troubled loans, a senior Treasury Department official said on Tuesday.
NEW YORK (Reuters) - Treasury officials have met executives from two of the world's largest sovereign wealth funds to discuss embracing a set of promises not to use their wealth for political advantage, the Wall Street Journal reported on Tuesday.
MUNICH (Reuters) - Yet more bad news is likely to come from the credit meltdown before things get better, private equity executives forecast on Tuesday.
MUNICH (Reuters) - Yet more bad news is likely to come from the credit meltdown before things get better, private equity executives forecast on Tuesday. Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Feb 2008 | 11:49 am
French President, Nicolas Sarkozy, has launched a scathing attack on Daniel
Bouton, Societe Generale's embattled chairman and chief executive, accusing
the bank's head of failing to full take responsibility for the €4.9 billion
loss made by "rogue trader", Jerome Kerviel. Source: Latest Business News from Times Online | 26 Feb 2008 | 11:48 am
Ferrovial, the Spanish company that bought the British airports operator BAA, reports falling profits. Source: BBC News | Business | World Edition | 26 Feb 2008 | 11:46 am
London Scottish Bank, which lends to lower-income families and operates a as
debt collector, has scrapped its dividend after falling £15.7 million into
the red last year amid soaring bad debts. The bank made a £15 million profit
the year before. Source: Latest Business News from Times Online | 26 Feb 2008 | 11:46 am
Reuters - Top home improvement retailer Home
Depot Inc reported lower quarterly profit on Tuesday as
the slumping U.S. housing market hurt sales. Source: Yahoo! News: Business | 26 Feb 2008 | 11:43 am
ATLANTA (Reuters) - Top home improvement retailer Home Depot Inc reported lower quarterly profit on Tuesday as the slumping U.S. housing market hurt sales. Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Feb 2008 | 11:43 am
ATLANTA (Reuters) - Top home improvement retailer Home Depot Inc reported lower quarterly profit on Tuesday as the slumping U.S. housing market hurt sales.
Buy a MegaRoll of Charmin bathroom tissue ("It's 4 Single Rolls in 1!"), and you will help save the planet. You can also score points for environmental responsibility by cleaning clothes with Tide Coldwater, or wrapping your baby's behind in Pampers.
The Home Depot Inc. said Tuesday its fourth-quarter profit fell more than 27 percent and a dour housing market contributed to the first annual sales decline for the world's largest home... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Feb 2008 | 11:37 am
Stocks looked set to extend the previous session's advance Tuesday as investors remained cheered by good news impacting bond insurers and braced for a batch of economic reports.
Swiss banking giant UBS is likely to face a frosty reception from shareholders at a Wednesday meeting to approve its capital injection, as calls for a break-up or restructuring continue to circulate amid fears that there may be yet more write-downs to come. The bank's seeking approval plans for an injection of 13 billion Swiss francs ($11.95 billion) from the government of Singapore and an investor in the Middle East. The plans have already proved unpopular among some shareholders, who fear their stakes will be diluted and want to take part directly in the financing.
Standard Chartered's operations in Asia have resulted in a 27 per cent surge
in annual profits to a record $4.04 billion ($£2.05 billion). The rise comes
despite a bigger writedown on high-risk assets. Source: Latest Business News from Times Online | 26 Feb 2008 | 11:23 am
Former Halliburton subsidiary KBR Inc. says fourth-quarter profit rose 65 percent largely from a tax benefit related to a 2006 asset sale. The Houston-based military contractor and... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Feb 2008 | 11:23 am
The FTSE 100 punched back through the 6,000 level on Tuesday amid a strong performance from the banking sector.Standard Chartered was the biggest riser, up 6.3 per cent to 16.79, after shrugging off the... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Feb 2008 | 11:21 am
Engineering services provider KBR says its fourth-quarter profit rose 65 percent on gas projects, Iraq-related work, and a tax benefit related to the company's 2006 production services... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Feb 2008 | 11:19 am
Reuters - U.S. stocks are expected to open up on
Tuesday, with investors studying inflation data for clues on
whether the Federal Reserve will continue to cut rates and
company results for any signs of a slowdown hitting earnings.
The Home Depot says its profit fell more than 27 percent in the fourth quarter on a slight increase in sales. The Atlanta-based company said it earned $671 million, or 40 cents a ... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Feb 2008 | 11:16 am
LONDON (Reuters) - U.S. stocks are expected to open up on Tuesday, with investors studying inflation data for clues on whether the Federal Reserve will continue to cut rates and company results for any signs of a slowdown hitting earnings.
Asian markets ended on a mixed note Tuesday after a volatile session saw indexes in Tokyo, Shanghai, Seoul, Singapore, Taipei, Jakarta and Bangkok waver between negative and positive territories.
Siemens announces plans to cut as many as 6,800 jobs at its enterprise communications division, part of a continuing restructuring of the German industrial conglomerate.
Reuters - U.S. home foreclosures for January
increased 57 percent from a year earlier, but the pace at least
temporarily subsided in response to private and government
efforts to help homeowners, RealtyTrac said. Source: Yahoo! News: Business | 26 Feb 2008 | 11:11 am
NEW YORK (Reuters) - U.S. home foreclosures for January increased 57 percent from a year earlier, but the pace at least temporarily subsided in response to private and government efforts to Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Feb 2008 | 11:11 am
NEW YORK (Reuters) - U.S. home foreclosures for January increased 57 percent from a year earlier, but the pace at least temporarily subsided in response to private and government efforts to help homeowners, RealtyTrac said.
Grupo Ferrovial SA, the Spanish builder that also owns U.K. airport operator BAA, reports a 49% drop in annual profit as higher refinancing costs, slower building growth and lower exceptional gains dent the bottom line.
Buy-to-let landlords are weathering the clampdown on mortgage lending amid the credit crunch better than homeowners in the wider market, according to latest data from the Council of Mortgage Lenders. Source: Telegraph Business | 26 Feb 2008 | 11:00 am
Fearing further falls in stock prices, China's market regulator warns companies against issuing new shares. Source: BBC News | Business | World Edition | 26 Feb 2008 | 10:56 am
Sony and Sharp agree a deal to work together to meet growing demand for flat-screen televisions. Source: BBC News | Business | World Edition | 26 Feb 2008 | 10:50 am
An unexpected rise in German business confidence gave the euro a spur on Tuesday as expectations of near term eurozone interest rate cuts faded.February's Ifo business climate index rose to 104.1 from... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Feb 2008 | 10:37 am
U.S. stock futures pointed to a third day of gains on Tuesday, ahead of wave of economic data as well as quarterly results from retailers including Home Depot and Target.
Price comparison group Moneysupermarket.com has unveiled a strong start to the year, as sales of credit cards and savings products offset its stalling mortgage and loans arm. Source: Telegraph Business | 26 Feb 2008 | 10:32 am
First Great Western, the train operator, is being forced to invest £29m in a raft of sweeping measures to improve the service it provides to customers after the Government described its performance as "unacceptable." Source: Telegraph Business | 26 Feb 2008 | 10:30 am
Sony and Sharp, two of Japan’s fiercest consumer electronic rivals, are to
join forces in a £2 billion Japanese factory producing liquid crystal
panels. Source: Latest Business News from Times Online | 26 Feb 2008 | 10:28 am
NEW YORK (Reuters) - MBIA Inc , the world's largest bond insurer, said it will stop guaranteeing asset-backed securities for six months and plans to split that business from its municipal bond unit, moves aimed at restoring stability in troubled credit markets.
WASHINGTON (Reuters) - Mortgage firms Fannie Mae and Freddie Mac would require their mortgage lending partners to have independent appraisals of home values under a deal being thrashed out with New York's attorney general, sources familiar with a draft deal said on late Monday.
Siemens AG said Tuesday it will reorganize its corporate telecom unit, a move that will cut 3,800 jobs and transfer another 3,000 to partners or other units. The company said in a... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Feb 2008 | 10:16 am
Oil prices fell Tuesday after rising in the previous session in a rally led by oil product futures. Cold weather across the U.S. Midwest and Northeast have helped push heating oil... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Feb 2008 | 10:13 am
South Africa's biggest mining union threatens to strike if any of its members lose jobs as a result of power cuts. Source: BBC News | Business | World Edition | 26 Feb 2008 | 10:00 am
Credit card company Egg is being asked to apologise to thousands of customers whose cards it cancelled. Source: BBC News | Business | World Edition | 26 Feb 2008 | 9:59 am
Mortgage and loan company London Scottish says it will end its lending operation to focus on debt collection. Source: BBC News | Business | World Edition | 26 Feb 2008 | 9:53 am
German business confidence unexpectedly rises in February, according to figures from the Ifo Institute. Source: BBC News | Business | World Edition | 26 Feb 2008 | 9:51 am
Most Asia Pacific shares rose for a second day on news that two of the world's biggest bond insurers, MBIA and Ambac, had retained their top credit ratings from Standard & Poor's, but nagging worries... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Feb 2008 | 9:51 am
Adviser-recommended annuities aren't always a red flag, but proceed with caution. Make sure you know what you're getting into before you buy in says Money Magazine's Walter Updegrave.
Jon Moulton, the controversial head of private equity firm Alchemy Partners, predicted the blow-up of some major private equity deals this year as the industry reaped the returns of previous excesses. Source: Telegraph Business | 26 Feb 2008 | 9:45 am
The credit crunch has failed to dent the confidence of Moneysupermarket.com,
the price comparison website that debuted on the London Stock Exchange in
July, just as markets went into a tailspin. The company has reported an
upbeat trading statement in its first full year's figures as a quoted
company. Source: Latest Business News from Times Online | 26 Feb 2008 | 9:36 am
Shares in Standard Chartered rose 4.6 per cent in early London trading as the bank announced a 27 per cent increase in pre-tax profits to $4.04bn (2.05bn) and offered a confident outlook for 2008. It was... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Feb 2008 | 9:35 am
Siemens cuts 6,800 jobs in its corporate telecoms unit as it restructures the division before selling it. Source: BBC News | Business | World Edition | 26 Feb 2008 | 9:32 am
Midsize SUVs are becoming safer, but side and rear impact crashes remain a weakness, according to recent testing by the Insurance Institute for Highway Safety.
The troubled First Great Western train company has been ordered to lay on more
drivers and carriages and to double the compensation to customers it has let
down or face losing its franchise. Source: Latest Business News from Times Online | 26 Feb 2008 | 9:23 am
At the moment the 6,000 level on the FTSE 100 seems to resemble our current government and its tax policies. Source: Telegraph Business | 26 Feb 2008 | 9:15 am
European equity markets were higher on Tuesday after financial stocks enjoyed further gains, backed up by a solid session in the US overnight.Financial services groups led the way after troubled US bond... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Feb 2008 | 9:11 am
Inchcape, the international car dealer, is eyeing significant expansion in Russia, China and eastern Europe after delivering record financial results for the sixth consecutive year.The UK-based company... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Feb 2008 | 9:02 am
Wheat prices set fresh records as concern grows about dwindling supplies of spring wheat. Source: BBC News | Business | World Edition | 26 Feb 2008 | 8:55 am
Hays, the recruitment group, on Tuesday reported a 22 per cent rise in half-year pre-tax profits to 123m as the company expanded internationally and people shifted jobs more frequently, boosting income... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Feb 2008 | 8:45 am
London equities extended gains on Tuesday, with optimistic comment on the UK housing market helping to lift the FTSE 100 back through the 6,000 mark. The benchmark index started the day 14 points stronger... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Feb 2008 | 8:37 am
Persimmon, Britain's biggest housebuilder, said that the two interest rate cuts since November are slowly starting to improve consumer sentiment, although it revealed its reservations were 19pc lower than this time last year. Source: Telegraph Business | 26 Feb 2008 | 8:22 am
The credit market turmoil that greeted Moneysupermarket.com as it floated last July has begun to affect its mortgage and loan business, the price comparison group said on Tuesday as it reported sharply... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Feb 2008 | 8:21 am
Persimmon on Tuesday offered what may be the first signs of a spring recovery in housebuyer confidence, as Britain's largest housebuilder by volumes said cancellation rates were returning to normal, visitor... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Feb 2008 | 8:13 am
The move is expected to lead to a reduction in the stakes that are held by major banks.
Credit card goliath Visa Inc. said Monday that it planned to raise as much as $18.8 billion in what would be the largest initial public offering in U.S. history.
The guild is backing a bill aimed at getting members a bigger cut of cable revenues.
With ratification of a hard-fought contract imminent, the Writers Guild of America has shifted its fight with movie and television studios to a new front: the state Legislature.
Wall Street reacts to hopeful signs about giant bond insurer MBIA and the sale of existing homes.
Stocks rallied Monday on hopes that troubled bond insurers will emerge from the sub-prime mortgage debacle on solid footing. The Dow Jones industrials rallied nearly 190 points.
The censorship action spreads the problem around the world.
Most of the world's Internet users lost access to YouTube for several hours Sunday after an attempt by Pakistan's government to block domestic access affected other countries.
California has adopted ambitious goals for alternative fuels and cutting greenhouse gas emissions -- and is calling on the masses to help.
Ben LeBeau pulled up to the Conserv Fuel station in Brentwood on a recent Friday and started filling the tank of his black Chevy Tahoe with a liquid rarely found in California -- E85, an alternative fuel made of 85% ethanol and 15% gasoline.
Judges would be allowed to rewrite mortgage terms under a Democratic plan. Critics fear rate hikes.
Over the opposition of the nation's lenders, Senate Democrats are seeking a change in the bankruptcy law that they say could keep hundreds of thousands of hard-pressed borrowers in their homes.
MBIA Inc., the world's largest bond insurer, held onto its top credit ratings from Standard & Poor's on Monday, quieting fears that downgrades by S&P would worsen the long-running credit crisis.
For access to Silicon Valley camaraderie and capital, you can't beat the informal Founders spread.
The Internet bubble of the late 1990s ended with a painful pop. When today's young entrepreneurs get together, the only bubbles they see are in their mimosas.
The difficulties in the housing market have forced a sharp reduction in the
forward order book at Persimmon, one of Britain's largest housebuilders,
with the volume of inquiries for new homes also sharply lower in the first
months of this year. Source: Latest Business News from Times Online | 26 Feb 2008 | 7:56 am
Reuters - The United Auto Workers began a strike
against auto parts maker American Axle & Manufacturing Holdings
Inc shortly after midnight on Tuesday after failing to reach
agreement on a new contract. Source: Yahoo! News: Business | 26 Feb 2008 | 7:18 am
DETROIT (Reuters) - The United Auto Workers began a strike against auto parts maker American Axle & Manufacturing Holdings Inc shortly after midnight on Tuesday after failing to reach agreement on a new contract.
The surge in the price of oil over the past year is set to unleash a tsunami of petrodollars onto financial markets, according to Morgan Stanley. Source: Telegraph Business | 26 Feb 2008 | 7:15 am
WASHINGTON (Reuters) - U.S. health-care spending will devour an expanding share of the U.S. economy during the next decade, almost doubling to about $4.3 trillion in 2017, government officials forecast on Tuesday.
VMware has struck a deal to install its virtualisation software on some servers shipped by Dell, Hewlett-Packard, IBM and other suppliers of computer equipment to big companies Source: FT.com - US homepage | 26 Feb 2008 | 5:27 am
Reuters - MBIA Inc , the world's largest
bond insurer, said it will stop guaranteeing asset-backed
securities for six months and plans to split that business from
its municipal bond unit, moves aimed at restoring stability in
troubled credit markets. Source: Yahoo! News: Business | 26 Feb 2008 | 1:31 am
US share prices staged a late rally after Standard & Poor's affirmed the top-notch credit ratings of beleaguered bond insurers MBIA and Ambac and said MBIA was no longer at risk of a downgrade Source: FT.com - US homepage | 26 Feb 2008 | 1:23 am
The CME Group, the world's biggest futures exchange, said that it was extending exclusive talks to buy Nymex, the New York exchange Source: FT.com - US homepage | 26 Feb 2008 | 1:17 am
Auckland International Airport shares were down 35c, or 12 per cent, to $2.48 in trading today on speculation a partial bid could be pulled after the Government moved to close a tax loophole.
The Canadian Pension Plan Investment... Source: New Zealand Herald - Business | 26 Feb 2008 | 12:15 am
The kiwi dollar may be at a record high today, but a leading economist says it may still have further giddy heights to scale in the coming months.
And the chief executive of one of New Zealand's main exporters said today he would... Source: New Zealand Herald - Business | 26 Feb 2008 | 12:10 am
Goals Soccer Centres, the operator of five-a-side football pitches, aims to expand overseas after netting a 42pc increase in profits last year. Source: Telegraph Business | 26 Feb 2008 | 12:01 am
The North American operation of Visa has announced plans to raise as much as
$18.8 billion ($£9.6 billion) from an initial public offering in New York in
what would be by far the biggest US flotation. Source: Latest Business News from Times Online | 26 Feb 2008 | 12:00 am
“When sorrows come, they come not single spies, but in battalions,” said
Claudius in Shakespeare's Hamlet. Stagflation hadn't been invented back in
the Bard's day, but, as with much of the man's insights, his description of
Ophelia's desperate condition might well serve as a useful piece of modern
economic analysis. Source: Latest Business News from Times Online | 26 Feb 2008 | 12:00 am
Marks & Spencer’s ready-made curries soon may grace India’s kitchens,
after the British retailer held talks with Reliance Industries about selling
its food range on the subcontinent.<br/>
<br/>
A source close to Reliance said that M&S was among a group of Western
brands that had discussed possible tie-ups with the Indian conglomerate.<br/>
<br/>
Reliance plans to build “seamless malls” - developments that will include
“shops within shops” and standalone boutiques – in large Indian cities,
including Bombay, Delhi and Bangalore, to appeal to India’s burgeoning
middle classes.<br/>
<br/>
M&S has been selling clothing in India since 2001 through a franchise
agreement with Planet Retail, an Indian retailer, but it is yet to make an
impression in the food market. Recent reports have suggested that John
Lewis, which runs the Waitrose super-market chain, is looking at
accelerating its Indian expansion, a move that could hasten M&S’s own
efforts.<br/>
<br/>
Reliance has also held talks with luxury marques, including Versace, Bulgari
and Cartier. The deals that emerge are likely to include joint ventures and
franchise arrangements.<br/>
<br/>
“We expect to have something substantial to announce in four to five months,”
the source said.<br/>
<br/>
India’s highly fragmented retail industry is estimated to be worth nearly
£200 billion a year and is expected to double in value by 2015. However, the
prospect of foreign chains entering the market has triggered political
concerns amid protests from independent retailers. It also remains unclear
whether consumers used to buying fresh produce will have an appetite for
processed food.<br/>
<br/>
The latest talks came after Reliance rebuffed partnership approaches from the
world’s three largest retailers – Tesco, Carrefour and Wal-Mart - to strike
out on its own. India, which is expected to post economic growth of nearly 9
per cent this year, represents a land of opportunity for Western businesses
in industries ranging from telecoms to banking. Reaping profits remains
challenging, however, as M&S learnt in December, when it was forced to
cut the price of adult clothing by up to a third to attract buyers.<br/>
<br/>
M&S said that it had cut prices to position itself as a mid-market
retailer in the eyes of Indian consumers, rather than a high-end brand.<br/>
<br/>
Under Indian regulations, M&S could own 51 per cent of a retail joint
venture in the country and it is thought to be looking for partners.<br/>
<br/>
In November, Stuart Rose, the group’s chief executive, unveiled <a href="http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article2799407.ece">a
fresh push into international markets</a>, which he expects will account for
around 20 per cent of revenue in five years, from less than 10 per cent now.
The group plans to enter China on a wholly owned basis and is seeking to
trade up to bigger formats of around 40,000 sq ft in India, with a focus on
Delhi, Bombay and Bangalore, he said. Source: Latest Business News from Times Online | 26 Feb 2008 | 12:00 am
Pyne Gould Corp, owner of finance company Marac, today reported its December half year net profit rose 23 per cent to $22.1 million.
The company said Marac was profiting from troubled times in the finance company industry that... Source: New Zealand Herald - Business | 26 Feb 2008 | 12:00 am
Investor's Business Daily - U.S. crude rose 42 cents to $99.23 a barrel as cold weather in the Northeast boosted demand for heating oil. Also, a senior Iranian oil official said oil supplies were ample and that OPEC had no reason to raise output. Industry consultant Petro-Logistics said OPEC oil supplies will fall by 200,000 barrels a day in Feb., as Saudi Arabia and Iran trim output on expectations of lower spring demand. Source: Yahoo! News: Business | 25 Feb 2008 | 11:43 pm
Fisher Funds has confirmed chief investment officer Warren Couillault is leaving the company.
His departure follows speculation of a rift between himself and managing director Carmel Fisher. The Business Herald reported this month... Source: New Zealand Herald - Business | 25 Feb 2008 | 11:30 pm
The sharemarket today failed to respond to a strong overnight performance that saw the Dow Jones industrial average jump over 1.5 per cent.
Auckland Airport shares fell 16c, or 5 per cent, to 267, on speculation the Canada Pension... Source: New Zealand Herald - Business | 25 Feb 2008 | 11:00 pm
Bay of Plenty Regional Council has raised $200 million of "cheap" cash without selling its controlling stake in the successful and regionally significant Port of Tauranga.
Buyers have been found for $200m of non-voting perpetual... Source: New Zealand Herald - Business | 25 Feb 2008 | 11:00 pm
North Korea has invited Eric Clapton to perform in Pyongyang in a highly unusual move that could see the English guitarist playing in the world's most isolated state next year Source: FT.com - US homepage | 25 Feb 2008 | 10:08 pm
After a monthlong trial and seven days of deliberations, a jury in Hartford, Connecticut, the nation's insurance capital, has returned a guilty verdict on charges against five former insurance executives, who were accused of inflating the balance sheet at American International Group through sham transactions in 2000 and 2001.
At the outset of the trial, observers speculated that the outcome of the case could depend on the ability of the federal prosecutors to keep the case simple—not an easy task, given that important testimony was to focus on terms such as "loss-portfolio transfer" and "mirror-image accounting."
Of course with Enron, the government won a highly technical case on charges involving convoluted off-the-balance-sheet partnerships, but that trial involved some high-profile villains.
"The government doesn't have to fear an accounting case," says Peter J. Henning, a professor at Wayne State University Law School and author of the White Collar Crime Professors Blog. "The challenge in this case was that you had a fairly technical transaction that didn't leap off the page as something that would be fraud."
General Reinsurance agreed to transfer $600 million in policies to A.I.G. and pay $500 million in premiums, making it appear A.I.G. could lose $100 million, in order to help with A.I.G.'s loss reserves. But secret side deals showed A.I.G. faced no risk in the transaction. "They were accommodating A.I.G.," says Henning.
The indictment listed 16 counts, including conspiracy, securities fraud, mail fraud, and making false statements to the Securities and Exchange Commission. "They really threw the book at them," Henning said.
At the trial, lawyers for the defendants (four former executives of Gen Re and one former executive of A.I.G.) said the deals were complicated—not necessarily "black and white." They also called attention to Warren Buffett, chairman of General Re's parent company, who approved the transaction, and Maurice "Hank" Greenberg, A.I.G.'s former chief executive, who was named as an unindicted co-conspirator.
The defense got some of the best and highest-priced legal talent, so it's not as if they were outmanned by the government.
Ronald Ferguson, General Re's former chief executive officer, was represented by Clifford Schoenberg of Cadwalader Wickersham & Taft. Elizabeth Monrad, General Re's former chief financial officer, was represented by Reid Weingarten, who had great success in gaining the acquittal of Mark Belnick, the former general counsel of Tyco International, but saw his client Bernie Ebbers, the former chief executive of WorldCom, convicted of crimes and given what amounts to a lifetime sentence.
Also convicted were former General Re executives Robert Graham and Christopher Garand, and Christian Milton, a former A.I.G. executive.
Schoenberg distributed a statement at the Hartford federal court on behalf of Ferguson and his team of executives, vowing an appeal. "This is a sad day, not only for Ronald Ferguson, but for our criminal justice system," the statement said. "The prosecutors somehow pulled the wool over the eyes of the jury who had no conversancy with the arcane vocabulary and customs and practices of the reinsurance industry."
Henning, for one, believes a prosecution of Greenberg is remote. None of the defendants testified at the trial, and all are sure to continue to rely on their high-priced legal teams for an appeal. But others disagree: Facing potential sentences that top 100 years, one of the defendants could flip, gain immunity, and testify before the grand jury.
Greenberg's lawyer, Robert Morvillo, has said his client believed the deal was "perfectly legitimate."
Such a defense could work, Henning says. "He will say, 'I told them to get it done right,' and ask, 'Why would I risk my entire career to dress up our balance sheet?' It's not a bad defense," he said.
AP - Lowe's Cos. reported Monday that fourth-quarter profit dropped by a third. But its shares rose after the nation's second-biggest home improvement retailer predicted that sales while still hurt by a soft housing market would improve slightly in 2008.
FT.com - US stocks staged their biggest rally this month after rating agency Standard & Poor's reaffirmed the triple-A ratings of troubled bond insurers Ambac and MBIA (NYSE:MBI). Source: Yahoo! News: Business | 25 Feb 2008 | 9:45 pm
Turners & Growers said today its December year net profit fell 17 per cent to $14 million mainly due to poor pipfruit returns.
Revenue from ordinary activities fell 6.4 per cent to $515m.
A dividend of 10 cents per share will... Source: New Zealand Herald - Business | 25 Feb 2008 | 9:45 pm
Laundry company Taylors Group has seen a 40 per cent drop in its interim net profit, despite a rise in revenue.
Net profit was $1.15 million for the six months to December , due to labour and energy costs, new plant and interest... Source: New Zealand Herald - Business | 25 Feb 2008 | 8:30 pm
Visa, the world's largest credit card network, said it hoped to raise up to $18.8bn in its long-awaited flotation, which will bring a badly needed financial boost to some of the US's biggest banks Source: FT.com - US homepage | 25 Feb 2008 | 8:22 pm
Prices of top-quality wheat jumped 25 per cent to a record high in their largest one-day increase as Kazakhstan – one of the largest grain exporters – said it would impose export tariffs to curb sales Source: FT.com - US homepage | 25 Feb 2008 | 8:18 pm
Opprobrium was poured on Hillary Clinton's campaign amid allegations that an aide had circulated a photograph showing Barack Obama dressed as a Somali Muslim elder Source: FT.com - US homepage | 25 Feb 2008 | 7:40 pm
Turners and Growers says its takeover offer for Kerifresh has now received acceptances for 49 per cent of the company's shares.
That gives the company over 50 per cent control, when adding its own 4.6 per cent stake, meeting the... Source: New Zealand Herald - Business | 25 Feb 2008 | 7:30 pm
French President Nicolas Sarkozy may kick advertisers out of French public television as part of his plan to create programming similar to that of the BBC. But broadcasters say they could lose revenue and audience share. John Laurenson reports. Source: Marketplace | 25 Feb 2008 | 6:53 pm
Commentator Charles Handy says American businesses' desire to keep getting bigger leads to bureaucracy over humanity. Instead, he says, companies should strive to do more with less. (One in a series.) Source: Marketplace | 25 Feb 2008 | 6:53 pm
More than 300 FEMA trailer residents have requested formaldehyde testing after experiencing respitory problems. FEMA claims the trailers were built according to Federal standards, but many believe those standards are not tough enough. Nancy Marshall Genzer reports. Source: Marketplace | 25 Feb 2008 | 6:53 pm
A U.S. energy bill will be phasing out incandescent bulbs in favor of alternatives like compact fluorescent lightbulbs, or CFLs. But not everyone thinks the new bulbs are ready to be given the green light. Joellen Easton reports. Source: Marketplace | 25 Feb 2008 | 6:53 pm
As food prices continue to rise, humanitarian food relief groups including the World Food Programme are feeling the squeeze. Host Kai Ryssdal speaks with Bob Bell from the relief group CARE on what his group is doing to combat high costs. Source: Marketplace | 25 Feb 2008 | 6:53 pm
Bank secrecy laws have helped make the European principality of Liechtenstein a tax haven. Now a secret list of account holders at a Lichtenstein bank has been sold to authorities in Germany and Britain. John Dimsdale reports. Source: Marketplace | 25 Feb 2008 | 6:52 pm
Many private equity groups look to invest in infrastructure. But the Service Employees International Union wants state pension funds to invest in public projects to stop the private companies from taking over. Stacey Vanek-Smith reports. Source: Marketplace | 25 Feb 2008 | 6:52 pm
Despite the credit crunch, credit card giant Visa filed the largest initial public offering in history. Jill Barshay reports why the company isn't affected by whether or not you pay your bill. Source: Marketplace | 25 Feb 2008 | 6:50 pm
Strategic Finance is not likely to be part of an asset sell-off announced by Australian listed investment company Allco Finance Group but its ultimate owner, Allco subsidiary Allco Hit, will be subject to a review.
Allco is a 36.1... Source: New Zealand Herald - Business | 25 Feb 2008 | 6:30 pm
Giving to charity has tax benefits. But some chief executives may be unfairly trying to increase the tax advantages in gifts to their family foundations.
That's the implication of research by David Yermack, a finance professor at New York University whose seminal research in 1997 helped unearth the option-backdating scandal nearly a decade later.
In a new study, Yermack finds that chief executives and chairmen of public companies have an uncanny ability to time large stock gifts to their own family foundations directly prior to big declines in share prices. For example, he found that four out of five stock gifts in the week before an earnings announcement were made right before a decline in the price of the stock.
Such gifts, which are exempt from insider-trading rules, typically come right after a run-up in a company's stock price and right before an abnormal 3 percent drop within the following 20 trading days. In comparison, other types of large charitable stock gifts—while also well-timed—come before a smaller 1 percent average drop in share prices.
Yermack's results were based on 155 gifts of more than $1 million made by C.E.O.'s and chairmen to their own family foundations between the middle of 2003, when the Securities and Exchange Commission first began requiring electronic filing for stock transfers, and 2005, the last year reliable data was available. Gifts of this type represented about 25 percent, or $728 million, of all gifts during the period. Yermack's sample included donations by Sandy Weill, Barry Diller, and Stan O'Neal, as well as executives at smaller companies.
Of course, the big question is how are these executives able to time their gifts so well?
Insider knowledge is one possibility. If executives know the company is about to release some bad news, they may legally gift stock at higher prices and in turn earn a higher tax benefit while still holding on to the voting power of the shares. That's because most family foundations are run by the executives themselves or close family members.
Evidence supporting this view is that 15 out of 18 donations made following earnings announcements came after the news was good.
Another explanation is that since stock gifts don't have to be reported for long periods after they have been made, executives may be backdating the donations.
This would require collusion on the part of both the foundation and the company. While there is no evidence that this has happened, it is also not difficult to imagine, given what emerged in the investigations into backdating.
A personal tax return claiming a charitable deduction based on backdated gifts "would likely represent tax fraud," says Yermack.
"The government could go after you for a fraudulent pattern of giving, but to date I've not been able to locate any such case ever having been brought," Yermack said at a seminar last week where the paper was presented.
Supporting the view of possible backdating, Yermack found that donations that had the longest gap between the reported gift date and the actual filing date were better-timed, potentially giving executives and their tax advisers a longer time period to tie the gift to.
This pattern did not hold true for other types of gifts. Timing was also better if gifts were larger or made in months other than December, the time when most tax-driven charitable giving takes place.
Yermack estimates that while most of the 90 chief executives and chairmen in his sample are playing by the rules, about 20 percent may be trying to game the system.
Spokesmen for the Internal Revenue Service and the Securities and Exchange Commission declined to comment on Yermack's findings.
A more relevant issue for shareholders is that these types of gifts represent valuable information, but because of the relatively lax electronic-filing requirements, by the time the news of a gift is publicly disclosed, any trading opportunity is likely to have passed.
"Just because the form is different doesn't mean the substance of what these rules are about should be different. The same kinds of restrictions should apply to gifts as to regular insider trading," said Eleanor Bloxham, president of the corporate governance consultancy Value Alliance.
The findings also highlight an interesting juxtaposition of motives on the part of these company executives. In the process of performing an ultimately charitable act, executives can't seem to help but practice a little tax dodging.
And for a chief executive with a multimillion-dollar pay package, the tax benefit would be of marginal value. Yermack estimates that anyone gaming the system would gain only $150,000 in extra tax benefits.
"It does strike me that when you try to regulate every single piece of something," Bloxham said, "somebody will find a way around it."
(See a chart on stock gifts to family foundations here.)
As spring approaches, talk grows of war—corporate war.
Some prominent challenges to company boards are being considered: at Motorola, the New York Times Co., even possibly at Take-Two Interactive, and of course, at Yahoo. Dissident shareholders and rival companies are seeking to gain representation or even control of companies' boards.
The foot soldiers of these battles are the proxy solicitation firms.
These firms, not unlike the campaign operatives for a presidential candidate, are working behind the scenes trying to win over the hearts and minds of the big voting blocks of shareholders.
"They are able to get behind the so-called Street name holders—shareholders who hold through brokerage firms—and they permit the combatants to shape their messaging and understand who really owns and has the power to direct voting," says Robert Profusek, head of the mergers department at Jones Day.
In the case of Microsoft and Yahoo, now is like the time before the Iowa caucuses or the New Hampshire primary. Just as Obama's and Clinton's operatives got involved for the long haul, this battle is doing the same. The solicitation firms are trying to assess the investor base, through regulatory filings and word of mouth.
Bruce Goldfarb, who specialized in M&A proxy fights at Georgeson Inc. and just launched his own firm, called Okapi Partners, says "The real goal of a proxy solicitation is to get investors to take action and actually cast their vote."
"The reality of a hostile situation is that everyone need to communicate with investors," says Goldfarb, who began his career as a lawyer at Cravath. "And the first step toward communicating with investors is finding out who the investors are."
Microsoft has hinted that it may wage a proxy battle for Yahoo's board if Yahoo continues to spurn its takeover offer. The key date is March 13, the deadline to nominate directors to Yahoo's board.
One arbitrageur, who spoke on the condition of anonymity, says he expects a "surprise" before March 13.
Surprise or not, the proxy solicitors will be ready.
It is a small and rarefied business. So it should come as no surprise that the two leading practitioners have landed on opposite sides in the battle between Microsoft and Yahoo. Microsoft, first out of the box, with its February 1 "bear-hug letter" offering Yahoo $44.6 billion in cash and stock, has turned to Innisfree M&A, while Yahoo is advised by MacKenzie Partners. The two proxy firms are essentially alter egos of their chief executives, Alan Miller and Dan Burch.
"It's a short list," says James Woolery, an M&A partner at Cravath, Swaine & Moore. "Most market observers would tell you that Burch and Miller are at the top of that list. In a hostile situation, the proxy solicitor role is crucial, and the information they provide is critical to the tactical decisions that need to be made."
Neither Burch nor Miller wanted to chat. But their personalities are illuminated in George Anders' 2003 book, Perfect Enough: Carly Fiorina and the Reinvention of Hewlett-Packard. A fair portion of the book is about the proxy campaign waged by Walter Hewlett, an heir to the H.P. legacy, against Fiorina's bid to combine the company with Compaq. As the book recounts, Wachtell, Lipton, Rosen & Katz, the New York law firm that specializes in takeover battles, had this quick bit of advice for Hewlett himself: "Sprint to hire Don Burch, before the other side does."
The Hewlett-Packard episode showed how the proxy solicitors can have an impact on the recommendation of Institutional Shareholder Services, the influential proxy-advisory service that can give a thumbs-up or a thumbs-down to a deal. "Part of our job is to work with our clients to communicate their position to I.S.S.," Goldfarb says.
Firms like MacKenzie and Innisfree may find themselves very busy these days. Electronic Arts made an unsolicited $2 billion cash offer to buy Take-Two Interactive Software, the publisher of the Grand Theft Auto videogame. E.A. made the offer public on Sunday after Take-Two's board rejected its offer of $26 per share as insufficient. Take-Two quickly reiterated its negative opinion of the deal, meaning another proxy fight may be in the offing.
Proxy solicitors are also being called on as shareholder activists put pressure on corporate boards. For instance, a pair of investors have announced plans to name their own slate of four directors at the New York Times Co., saying the current board hasn't responded aggressively enough to rapid changes in the media industry.
Americans may be using plastic less often, but Visa, the biggest credit-card network in the world, is charging full steam ahead to go public this year.
In a filing today, the company said it planned to sell 406 million Class A shares for $37 to $42 each. The offering's 15 underwriters, led by J.P. Morgan and Goldman Sachs, have an option to buy another 40.6 million shares. At the top end of its price range, that would make it an $18.8 billion initial public offering, the biggest I.P.O. ever in the United States, surpassing the $10.6 billion offer by AT&T Wireless in the boom market year of 2000.
Half of Visa is being sold to the public. The other half will be held by its member banks.
The incentive for an I.P.O. is clearly the performance of MasterCard's shares since it went public in May 2006. The stock made its debut at $39. On Friday, it closed at $203.48.
Visa processed $1.6 trillion in credit-card transactions in 2006, compared with $862 billion by MasterCard, according to the Nilson Report.
There is a new game being played in the videogame business.
Several months after Vivendi announced that it acquired a controlling stake in Activision in a deal to challenge its leading position, Electronic Arts is seeking to take over Take-Two Interactive, maker of Grand Theft Auto.
Electronic Arts, publisher of Madden NFL and Sims, disclosed on Sunday that it had made a $2 billion cash offer for Take-Two but that the board of Take-Two had rejected it. By going public with its offer, in what is known as a "bear hug letter," Electronic Arts, as Microsoft is attempting to do with Yahoo, is appealing directly to Take-Two's shareholders and possibly setting the stage for a hostile takeover.
Electronic Arts said that its offer of $26 per share in cash "represents a premium of 64 percent over Take-Two's closing stock price on February 15, the last trading day before E.A. sent its revised proposal to Take-Two."
Strauss Zelnick, chairman of Take-Two, said, "Electronic Arts' proposal provides insufficient value to our shareholders and comes at absolutely the wrong time given the crucial initiatives underway at the company."
Michael Pachter, an analyst with Wedbush Morgan Securities in Los Angeles, told Bloomberg News that "the price is more than fair." "E.A. is really stretching the limits of the value they can get out of the deal. I'm quite confused why Take-Two would reject it. I don't see anybody else stepping up."
Take-Two says that the Electronic Arts offer is "highly opportunistic" because it is being made before the release of the newest title in its crown jewel franchise, Grand Theft Auto IV, on April 29.
As a result, it says it is willing to talk to Electronic Arts after that release.
Herb Greenberg of MarketWatch points to another odd twist in the timing of recent events.
Take-Two, in a Securities and Exchange Commission filing earlier this month, proposed changes to its management deal with Zelnick Media, whose top executives run the company, including a grant of 600,000 restricted shares.
Those shares, however, will not vest immediately, Greenberg points out, if before Take-Two's next annual meeting, expected to be before April 1, a serious merger offer is made.
But that is exactly what happened, which Greenberg calls "beyond absurd," saying, "That's right: Take-Two received a rich and serious offer from a substantial company. It didn't disclose the offer, and hoped to keep it secret until at least after the annual meeting, when investors might have challenged the compensation package and attempts by the company to block the deal. Then, in a public filing, Take-Two in effect threatened E.A. not to make the offer public by giving Zelnick Media a chance to enrich itself, at the expense of shareholders, by granting restricted stock that will vest immediately if EA made the deal public."
Reuters - U.S. stocks are expected to open up on
Tuesday, with investors studying inflation data for clues on
whether the Federal Reserve will continue to cut rates and
company results for any signs of a slowdown hitting earnings.
AP - Lowe's Cos. reported Monday that fourth-quarter profit dropped by a third. But its shares rose after the nation's second-biggest home improvement retailer predicted that sales while still hurt by a soft housing market would improve slightly in 2008.