NEW YORK (Reuters) - Yahoo Inc on Tuesday disclosed a three-year plan that it says will keep it ahead of Wall Street forecasts and should convince investors that a takeover offer from Microsoft Corp undervalues the company.
LONDON (Reuters) - Ford Motor Co could announce the sale of its UK luxury brands Jaguar and Land Rover to India's Tata Motors in the middle of next week, after Tata secured funding for the deal, sources close to the deal said on Tuesday.
AP - Wholesale prices rose again in February as another hefty increase in energy costs offset falling food prices. Outside of food and energy, prices shot up at the fastest pace in 15 months.
NEW YORK (Reuters) - Stocks were set to open sharply higher on Tuesday, with financials set to rebound after quarterly earnings from Goldman Sachs Group Inc topped estimates.
WASHINGTON (Reuters) - U.S. Treasury Secretary Henry
Paulson said on Tuesday the U.S. economy had turned down
sharply but declined to label the situation a recession.
Lehman Brothers and Goldman Sachs both reported sharp falls in first-quarter profits, driven by writedowns on mortgage backed securities and leveraged loans, but beat expectations and saw their share prices jump Source: FT.com - US homepage | 18 Mar 2008 | 1:20 pm
A London court suspends an order freezing assets of Venezuela's state oil firm in a dispute with ExxonMobil. Source: BBC News | Business | World Edition | 18 Mar 2008 | 1:19 pm
Reuters - Goldman Sachs Group Inc on
Tuesday said first-quarter earnings fell by half after
recording more than $2.5 billion of losses on loans and other
assets, yet robust trading helped the bank exceed an anxious
market's reduced expectations.
NEW YORK (Reuters) - Goldman Sachs Group Inc on Tuesday said first-quarter earnings fell by half after recording more than $2.5 billion of losses on loans and other assets, yet robust trading helped the bank exceed an anxious market's reduced expectations.
U.S. stock futures rose early Tuesday, lifted by expectations that the Federal Reserve will aggressively cut rates at its regularly scheduled meeting today and ahead of earnings from Goldman Sachs and Lehman Brothers.
WASHINGTON (Reuters) - The flagging U.S. economy got more mixed news from its troubled housing sector on Tuesday, while evidence of inflation pressures continued to lurk in the producer pipeline.
Inflation at the wholesale level met most estimates in February, the Labor Department said Tuesday, but core inflation, which excludes food and energy, rose more than expected.
Lehman Brothers reported lower earnings Tuesday that topped forecasts, despite taking $1.8 billion in writedowns across its mortgage and loan portfolio.
Visa's initial public offering won't just be the largest in history if it prices as scheduled Tuesday night - it will also serve as a barometer of the very health of the U.S. financial system.
Lehman Brothers and Goldman Sachs say their profits more than halved in the first three months of 2008. Source: BBC News | Business | World Edition | 18 Mar 2008 | 12:57 pm
LONDON (Reuters) - A British judge has lifted a $12 billion freeze on Venezuelan assets awarded to U.S. oil major Exxon Mobil in a spat over a seized oil field.
Construction of a little more than 1 million new homes were started in February, according to a government report released Tuesday, topping economists' forecasts.
Reuters - Lehman Brothers Holdings Inc
said on Tuesday first-quarter earnings dropped 57 percent as
bond trading revenue plummeted but rising merger advisory
revenue helped the investment bank beat expectations.
US stock futures were lifted as Goldman Sachs and Lehman Brothers posted first-quarter results that topped analysts' estimates and investors awaited an expected cut in interest rates from the Federal Reserve Source: FT.com - US homepage | 18 Mar 2008 | 12:52 pm
Misys, the banking software group, said this morning that it will merge its
healthcare operations with the US firm Allscripts Healthcare Solutions. Source: Latest Business News from Times Online | 18 Mar 2008 | 12:50 pm
In another sign of troubles in the beleaguered housing industry, construction of new homes fell by a larger-than-expected amount last month. The Commerce Department reported Tuesday... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Mar 2008 | 12:49 pm
In another sign of troubles in the beleaguered housing industry, construction of new homes fell by a larger-than-expected amount last month. The Commerce Department reported Tuesday... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Mar 2008 | 12:48 pm
NEW YORK (Reuters) - Yahoo Inc on Tuesday released details of a three-year plan that aims to nearly double operating cash flow over the next three years to $3.7 billion and yield... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Mar 2008 | 12:45 pm
Even during these turbulent times on Wall Street, Goldman Sachs Group Inc. managed to turn in another quarter of better-than-expected first-quarter earnings.
Swiss chocolate maker Lindt and Spruengli on Tuesday posted record earnings for 2007 as it took a bigger bite of the market across all countries and segments. The group,... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Mar 2008 | 12:43 pm
Wholesale prices rose again in February as another hefty increase in energy costs offset falling food prices. Outside of food and energy, prices shot up at the fastest pace in 15 months. Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Mar 2008 | 12:42 pm
US Treasury boss Hank Paulson says the US is in a downturn as the Fed prepares to slash interest rates to 2%. Source: BBC News | Business | World Edition | 18 Mar 2008 | 12:40 pm
Air France-KLM and Alitalia were set to hold talks on Tuesday with unions at the loss-making Italian flag carrier after Rome gave the go-ahead for a takeover by the European giant. Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Mar 2008 | 12:38 pm
Wholesale prices rose again in February as another hefty increase in energy costs offset falling food prices. Outside of food and energy, prices shot up at the fastest pace in 15 months. Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Mar 2008 | 12:35 pm
Wholesale prices rose again in February as another hefty increase in energy costs offset falling food prices. Outside of food and energy, prices shot up at the fastest pace in 15 months. Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Mar 2008 | 12:33 pm
Investment bank Lehman Brothers says it earned $489 million during the quarter ending Feb. 29 because of record revenue from its investment management division. The earnings are 57... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Mar 2008 | 12:27 pm
NEW YORK (Reuters) - Investment bank Lehman Brothers Holdings Inc posted lower quarterly earnings on Tuesday, hurt by lower bond trading revenue. Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Mar 2008 | 12:26 pm
BMW's chief executive said he expects higher profits this year, despite the rising euro. Source: BBC News | Business | World Edition | 18 Mar 2008 | 12:21 pm
In these manic markets, perhaps it takes a maker of attention-deficit disorder drugs to get traders to sit up straight and take notice. U.K. drugmaker Shire has done just that.
It started last summer when borrowers with weak credit started defaulting on their mortgages. Last night, it brought down an 85-year-old pillar of Wall Street.
SHANGHAI (Reuters) - CITIC Securities, China's biggest listed brokerage, said on Tuesday it has decided to terminate its planned strategic cooperation with Bear Stearns, including a $1 billion investment in the U.S. bank, after the troubled bank was bought by JPMorgan.
Nationalised bank Northern Rock will cut about 2,000 jobs by 2011 as part of restructuring plans. Source: BBC News | Business | World Edition | 18 Mar 2008 | 12:07 pm
Reuters - U.S. Treasury Secretary Henry
Paulson said on Tuesday the U.S. economy had turned down
sharply but declined to label the situation a recession.
The Japanese government's latest nominee to be governor of the Bank of Japan is to be vetoed by the opposition. Source: BBC News | Business | World Edition | 18 Mar 2008 | 12:04 pm
Among the companies whose shares are expected to see active trade in Tuesday's session are the investment banks, Alliance Data, Allscripts, Cellcom, Dynavax, General Motors and its parts producers, Icahn Enterprises, Merck, and Wind River Systems.
U.S. stock futures climbed on Tuesday, with the Federal Reserve expected to make an aggressive rate reduction and with Lehman Brothers and Goldman Sachs set to argue why they’ll survive the credit crunch that claimed the independence of rival Bear Stearns.
European stocks bounced on Tuesday as the battered banking sector recovered some of its recent losses on hopes that the Federal Reserve will cut US interest rates aggressively, allowing the market some... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Mar 2008 | 11:59 am
With little college education and a sporadic work history, Jessica McGreevy was thrilled to join the red-hot real estate industry in late 2005, landing a receptionist job at a mortgage bank in a Long Island suburb about 45 miles east of New York City.
Shares of Delta Air Lines are off almost 3% in early trading Tuesday following a statement from its pilot union that it’s been unable to reach agreement on how to integrated its pilots with another major airline in the event of a merger.
London shares rebound, with financials in the lead, as investors temporarily shrug off asset write-down worries ahead of an expected rate cut from the U.S. Federal Reserve.
European stock markets recovered some poise on Tuesday, taking heart from calmer trade in New York and in Asia. The dollar moved off recent lows against the euro, but expectations of a full percentage... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Mar 2008 | 11:52 am
Northern Rock plans to cut about a third of its jobs and halve its mortgage book by 2011 as part of a restructuring program aimed at eventually returning the bank to the private sector.
Gold has solid value as a long-term investment even if it is knocked by a downward correction, according to Graham Birch, manager of the highly regarded BlackRock Merrill Lynch Gold & General Fund. Source: Telegraph Business | 18 Mar 2008 | 11:50 am
British consumers may be feeling the pinch of the credit crunch, but that has
not stopped them booking to go on holiday, Tui, the owner of First Choice
and Thomson Holidays said today. Source: Latest Business News from Times Online | 18 Mar 2008 | 11:37 am
UBS chairman Marcel Ospel saw his pay for 2007 slashed by 90 per cent after
the bank racked up $18.4 billion worth of writedowns on investments in risky
American mortgages.$ Source: Latest Business News from Times Online | 18 Mar 2008 | 11:33 am
Reuters - The U.S. Federal Reserve is
expected to slash interest rates by as much as a whole
percentage point at its policy meeting later on Tuesday as
investors warily await investment bank results that could
aggravate fears of a full-blown markets crisis.
WASHINGTON/LONDON (Reuters) - The U.S. Federal Reserve is expected to slash interest rates by as much as a whole percentage point at its policy meeting later on Tuesday as investors warily await investment bank results that could aggravate fears of a full-blown markets crisis.
Investors' nerves appear to have calmed in the wake of the Federal Reserve-backed emergency sale of Bear Stearns that averted a bankruptcy of the 85-year-old Wall Street firm.
After a scary start on Monday, U.S. stocks largely recovered. World markets are stable today.
Investors are now awaiting an additional boost from the Fed. The central bank is widely expected to reduce its benchmark interest rate by a full point, to 2 percent from 3 percent.
The steep rate cuts, the hundreds of billions of dollars in Treasury securities that the Fed is making available to banks, and the $30 billion financing for J.P. Morgan Chase to acquire Bear are the most aggressive actions ever taken by the central bank.
The risk for the Fed is that it may be using up all the weapons in its arsenal.
In its many efforts to combat the credit crisis, the Fed has committed as much as 60 percent of the $709 billion in Treasury securities on its balance sheet, Bloomberg News says.
And there is the danger that the Fed has set a precedent if there are other Bear Stearns about to erupt.
As Edmund Andrews says in the New York Times, "The biggest danger is damage to the Federal Reserve's credibility if it is seen as unwilling to let financial institutions face the consequences of their decisions."
Propping up banks and cutting rates to near zero? To cynical ears, that sounds a lot like the policies that marked Japan's decade-long economic malaise after its market bubble burst.
The pound extended its gains on Tuesday after robust UK inflation data prompted investors to trim expectations for a near-term cut in UK interest rates.The pound was hit hard on Monday, falling to a record... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Mar 2008 | 11:29 am
Bear Stearns employees, who own about 30% of the firm, and fund managers lost big when the Wall Street giant collapsed. Here's a look at some of the hardest hit.
Shares in London recovered some of their poise on Tuesday amid expectations of a full-point cut in US interest rates.After falling to its lowest level for more than two years on Monday on fears that other... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Mar 2008 | 11:27 am
Europe's biggest travel firm, TUI, says booking volumes are strong and predicts rising profit in 2008. Source: BBC News | Business | World Edition | 18 Mar 2008 | 11:25 am
Google has brushed off fears that a global economic downturn may hit its advertising revenues, claiming its broad base of customers will help it weather any storm. Source: Telegraph Business | 18 Mar 2008 | 11:20 am
A last-minute effort to avert a succession crisis at the Bank of Japan
collapsed today as the opposition party said it would block the Government’s
latest nomination for the new governor. Source: Latest Business News from Times Online | 18 Mar 2008 | 11:04 am
Asian shares regained some calm on Tuesday as bargain hunters picked up some beaten-down banking stocks, but investors remained wary about the next round of news out of the US, which limited any gains... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Mar 2008 | 10:59 am
Northern Rock, the Government-owned mortgage lender, today admitted it would
cut a third of its staff and reduce mortgage assets by half, leaving current
borrowers out in the cold when their deals expire. Source: Latest Business News from Times Online | 18 Mar 2008 | 10:55 am
Jérôme Kerviel, the Société Générale trader whose allegedly unauthorised trades cost the bank €4.9bn was released on bail by the appeal court in Paris Source: FT.com - US homepage | 18 Mar 2008 | 10:54 am
Jrme Kerviel, the Socit Gnrale trader whose allegedly unauthorised trades cost the bank 4.9bn was on Tuesday released on bail by the appeal court in Paris.Mr Kerviel, detained in the capital's La Sant... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Mar 2008 | 10:54 am
A French court orders the release of rogue trader Jerome Kerviel, accused of losing billions of euros. Source: BBC News | Business | World Edition | 18 Mar 2008 | 10:51 am
UK consumer inflation hit 2.5% in February, the sharpest rise in nine months, official figures show. Source: BBC News | Business | World Edition | 18 Mar 2008 | 10:05 am
A French appeals court ruled that Jrme Kerviel, the former trader Socit Gnrale has blamed for billions in losses, should be released from jail while an investigation continues. Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Mar 2008 | 9:54 am
Ron Sandler, boss of newly nationalised Northern Rock, will this week reveal plans to cut between 2,000 and 2,500 jobs as the stricken lender is shrunk in an attempt to repay its £25bn taxpayer loan within three years. Source: Telegraph Business | 18 Mar 2008 | 9:50 am
Tribune rating Tribune Co.'s credit rating was lowered one level to B- by Standard & Poor's, which said ad sales at the company's newspapers may de cline 10 percent this year. GM review GM is being... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Mar 2008 | 9:41 am
Despite wild swings between the highs and lows of the day of more than 300 points, Wall Street managed to avoid the carnage that was widely expected and actually carve out a slight gain. As the markets... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Mar 2008 | 9:41 am
Shares of Lehman Brothers tumbled as much as 40 percent yesterday as nervous investors raced to sell shares on fears that the Wall Street investment bank would meet the same fate as rival Bear Stearns... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Mar 2008 | 9:41 am
Madonna plans to give more than 250m Vodafone customers access to her new album ahead of its official release set for April 28th with Warner Music. Source: Telegraph Business | 18 Mar 2008 | 9:20 am
Jérôme Kerviel, the rogue trader who lost €4.9 billion (£3.8 billion), was
granted bail by a Paris court today in a ruling which represents a blow to
Société Générale and the French authorities. Source: Latest Business News from Times Online | 18 Mar 2008 | 9:13 am
So, where the hell do we start? It is very difficult indeed to get anything positive out of the Bear Stearns implosion! For those who love to hear about banker woes, a very short lesson in the consequences of the latest disaster on Wall Street should be sufficient. Source: Telegraph Business | 18 Mar 2008 | 9:00 am
Wen Jiabao, China's premier, expressed concern about the US and global economy and the fallout from the continuing weakness of the greenback against other currencies Source: FT.com - US homepage | 18 Mar 2008 | 8:27 am
Henry Paulson, the US Treasury Secretary, today admitted the American economy
was in a sharp decline but refused to label the situation a "recession".
His remarks came as Goldman Sachs and Lehman Brothers, two of Wall Street's
biggest investment banks, reported falling profits. Source: Latest Business News from Times Online | 18 Mar 2008 | 8:22 am
Reuters - Metro AG plans
to turn around its Real hypermarkets within two years and could
sell its Galeria Kaufhof department stores, the new chief
executive of Germany's largest retailer said on Tuesday. Source: Yahoo! News: Business | 18 Mar 2008 | 7:56 am
Telemundo makes a deal that will allow its shows to be broadcast in Mexico by Televisa.
Mexican entertainment giant Grupo Televisa unveiled an alliance with NBC Universal's Telemundo network that will allow Spanish-language television shows produced by Telemundo to play on Televisa's channels in Mexico.
Worried investors watch the dollar weaken further and wonder if U.S. moves can avert a worldwide financial collapse. Japan's traders in turmoil.
Stocks dropped worldwide Monday as investors fretted about the dollar's continuing fall and questioned whether the Federal Reserve's cut in lending rates and the buyout of Wall Street brokerage Bear Stearns Cos. would avert a global financial calamity.
A Stanford group aims to improve associates' work-life balance.
Stanford Law School students are among the nation's most sought-after legal graduates. Recruiters from top law firms woo them with promises of fancy offices, meaningful pro bono work and starting salaries as high as $160,000.
The package valued at $65 million includes a pension and stock options from 24 years with the utility parent.
Edison International Chairman and Chief Executive John E. Bryson, who led the utility parent through the disastrous energy market meltdown in 2000-01, will retire this summer with a pension plan and stock options that at the end of 2007 were worth almost $65 million.
Highly unusual intervention may put central bank's resources to the test
The Federal Reserve's extraordinary move to rescue a tanking investment giant and expand its emergency lending appeared to pay off Monday. Although most U.S. markets showed fresh signs of strain, none snapped, and while some banks and Wall Street firms saw their stocks pummeled, none collapsed.
Also a philanthropist and diplomat, he created a company that popularized the risky mortgages and was accused of abuses.
Billionaire Roland E. Arnall, whose widespread philanthropy and extraordinary political friendships stood in contrast to repeated investigations into alleged lending abuses at his giant subprime company, Ameriquest Mortgage Co., died Monday. The longtime Holmby Hills resident was 68.
High-profile Bear Stearns investors assail the Fed-brokered takeover by a rival. Lawsuits are likely.
JPMorgan Chase & Co.'s $2-a-share fire-sale grab of once mighty Bear Stearns Cos. provoked anger, bewilderment and fear Monday among Bear's shareholders and employees. In many cases, they are one and the same.
Worried about your tumbling portfolio? The worst decision is a rash one. Think long-term.
Amid a crashing U.S. dollar, a roller-coaster stock market, a massive takeover of one of the nation's largest brokerage firms and an economy teetering on the brink of recession, what's an individual investor to do? What should you expect in today's troubling market? Are there wise moves to make now? Some questions and answers:
Bankers and regulators scrambled to shore up confidence in financial markets as the sudden collapse of Bear Stearns heightened fears that the credit crunch would claim more victims Source: FT.com - US homepage | 18 Mar 2008 | 5:07 am
Port of Tauranga said today shipping services would be cut by 78 visits a year after a decision by heavyweights Hamburg Sud Trident and Maersk to merge their East Coast North America services.
Chief executive Mark Cairns said the... Source: New Zealand Herald - Business | 18 Mar 2008 | 2:45 am
Delta Air Lines pilots' top labour leader told senior executives that he had failed to find common ground with his counterparts at Northwest Airlines on a combined seniority list for their members, casting doubt on their merger prospects Source: FT.com - US homepage | 18 Mar 2008 | 2:04 am
There was no word today on what Crescent Capital Partners would do with its 19.7 per cent stake in Abano following the failure of its takeover bid on Friday.
Just under 18 per cent of Abano shareholders accepted Crescent's $5.20... Source: New Zealand Herald - Business | 18 Mar 2008 | 2:00 am
The Government's accounts are in better shape than previously thought after tax officials today admitted making a $600 million blunder.
The Government took a massive hit to its books in January, with figures for the first seven... Source: New Zealand Herald - Business | 18 Mar 2008 | 1:30 am
NEW YORK - Angry Bear Stearns shareholders have wasted no time in bringing legal claims following the company's stunning stock collapse and US$2 ($2.53)-a-share fire sale to JPMorgan Chase & Co.
At least one federal lawsuit in... Source: New Zealand Herald - Business | 18 Mar 2008 | 1:25 am
Local investors seem to be wary of placing their money with finance companies these days, and trading banks are reaping the benefits of this "flight to quality".
Two bond issues this month - one by ANZ and one by BNZ - are both... Source: New Zealand Herald - Business | 18 Mar 2008 | 1:20 am
Even the most successful investors can get it horribly wrong, as reclusive British tycoon Joe Lewis has just found out.
The septuagenarian British billionaire currency trader last year built a stake approaching 10 per cent in Bear... Source: New Zealand Herald - Business | 18 Mar 2008 | 1:10 am
Finance Minister Michael Cullen has warned a recession cannot be ruled out as the economy struggles against a weak housing market, drought and the international credit crunch.
The Bank of New Zealand warned at the weekend that... Source: New Zealand Herald - Business | 18 Mar 2008 | 1:00 am
The slump in the value of the dollar may be bad news for exporters but for anyone looking for a cheap holiday there has rarely been a better time to fly to the United States. Source: Telegraph Business | 18 Mar 2008 | 12:01 am
Muffins and smoothies are in, but in a sign of Britain's infatuation with the iPod and music downloads, the CD single is out. Source: Telegraph Business | 18 Mar 2008 | 12:01 am
Sources close to leisure group Whitbread have confirmed the company is in talks with the Dubai-based owners of rival Travelodge about a takeover of the budget hotel group. Source: Telegraph Business | 18 Mar 2008 | 12:01 am
It was bound to be a nailbiting day in financial markets yesterday. When a
phlegmatic City veteran such as Terry Smith tells the BBC's flagship Today
programme that he is more scared than he has ever been in a 34-year career,
you know it is going to be a lively day. In the event, the banks of the West
are all at least still standing so far in the wake of the Bear Stearns
implosion and rescue. Source: Latest Business News from Times Online | 18 Mar 2008 | 12:00 am
The chief executive of Wolseley, the world’s largest plumbing and building
materials supplier, gave warning of a “fragile” market ahead in Britain and
continental Europe as he announced a 72.5 per cent fall in first-half
profits. Source: Latest Business News from Times Online | 18 Mar 2008 | 12:00 am
President Bush and Gordon Brown tried desperately to persuade investors to
stay calm yesterday as the turmoil on the world markets threatened to upset
recent economic growth forecasts. Source: Latest Business News from Times Online | 18 Mar 2008 | 12:00 am
The New Zealand sharemarket looks to have shrugged off the jitters that struck global markets overnight.
Our market did start weaker, on a day when Wall Street ended with a mild recovery on the Dow.
However, the NZX-50 index... Source: New Zealand Herald - Business | 18 Mar 2008 | 12:00 am
The interim liquidator dealing with home construction company Balmoral Homes is urging the company's creditors to get in touch.
Almost 200 businesses are thought to be owed money by the Christchurch-based firm which went bust last... Source: New Zealand Herald - Business | 17 Mar 2008 | 11:30 pm
Vikram Pandit, Citigroup's chief executive, has placed John Havens, a close ally, in charge of the bank's investment banking and hedge funds business in a further attempt to stamp his authority on the company Source: FT.com - US homepage | 17 Mar 2008 | 10:55 pm
Canned, cooked chicken is the latest locally-produced addition to our supermarket shelves.
"Chop Chop!" brand chicken's unique proposition is that it comes fully cooked.
"This eliminates the risk of undercooking it, or of cross... Source: New Zealand Herald - Business | 17 Mar 2008 | 10:30 pm
The Iraq conflict will be five years old on Tuesday, and serious estimates suggest it will be, with the exception of the second world war, the most costly in US history Source: FT.com - US homepage | 17 Mar 2008 | 8:03 pm
CME Group is set to enhance its position as the world's biggest exchange after finalising a deal to buy Nymex for $9.4bn in cash and shares Source: FT.com - US homepage | 17 Mar 2008 | 7:01 pm
The government's long insider-trading prosecution of Qwest executives was extended Monday when a federal appeals court ordered a new trial for ex-C.E.O. Joseph Nacchio.
The 10th U.S. Court of Appeals, in Denver, said that the trial court judge erred when he forbid Nacchio's defense team to let one of their expert witnesses testify about the timing of the former C.E.O.'s share sales.
Prosecutors have accused Nacchio of knowingly selling tens of millions of dollars worth of Qwest stock in 2001 before publicly announcing that the regional telecommunications company's revenue and profit were beginning to flag.
A federal jury found Nacchio guilty on 19 of 42 counts against him in April 2007. The trial judge, Edward W. Nottingham, sentenced Nacchio last July to six years in federal prison, fined him $19 million, and ordered him to repay $52 million—the amount he allegedly reaped from illegal trading.
An appeals court freed Nacchio on bail pending his appeal. The same court today said Nacchio's retrial must be before a new judge.
In its opinion, the appeals court said Nottingham was wrong to have forbidden University of Chicago professor emeritus Daniel R. Fischel to testify as an expert witness in Nacchio's original trial. Instead, the judge ruled that he could testify only as a summary expert.
This limited Fischel, now a private economic consultant, to reciting the facts of Nacchio's share sales without drawing conclusions about them. Defense lawyers had wanted him to say that the pattern of Nacchio's share sales did not support the government's theory of insider trading.
The cheerful sound of bagpipes floated over from the jubilant Saint Patrick's Day parade a block away on Fifth Avenue. But for the beleaguered employees of Bear Stearns, they may just as well have been playing a funeral dirge.
Outside company headquarters at Madison Avenue and 46th Street, grim-faced employees stood in small groups smoking, while others hustled in and out of the 47-story building carrying takeout or typing on their BlackBerries. The somber sentiment of the men and women in suits couldn't have been more of a contrast to the cheerful—and sometimes drunk—green-shirted parade watchers clogging the sidewalks just a few feet away.
'We're taking it one day at a time," said one employee in client services who was on his cigarette break, tears welling up in his eyes. "What can you do?"
Few employees would give their names or even say what department they worked for. But their emotions were apparent in their words and body language.
"It’s as bad as it can get," said one employee in his 40s who typed away on his BlackBerry as he prepared to enter the building. "The mood is shitty."
One employee, a waiter in the executive dining room, said that very few executives showed up today and that he'd been told they were mostly in emergency meetings. "Usually, there are about 100 people in the dining room. Today there were probably about 30," the waiter said.
Massive layoffs of Bear's 14,153 employees are expected following the likely merger with J.P. Morgan, in everything from administrative to investment-banking services. Some current employees acknowledged that they are already putting out feelers for new jobs.
In addition to the pain from likely job loss, the company's workers are also reeling from a massive blow to their own stock portfolios, since many received part of their compensation in stock. Of all the major investment banks, Bear Stearns probably encouraged employee ownership the most; according to Bear's website, employees own an estimated one-third of the outstanding company stock. The value of those shares has plunged more than $5 billion in the last year.
"I lost my ass; hundreds of thousands of dollars were wiped out,” said one former high-producing broker for the company who still holds large amounts of Bear Stearns stock. "I got hurt big-time."
Across the street from Bear Stearns' headquarters, at Maggie's Place, celebrants drank in honor of Saint Patrick's Day. But not all were oblivious to the drama at the investment bank.
"My portfolio just took a huge hit. I owned a lot of Bear Stearns," said John Grogan, a reveler in a suit and tie who stood chugging a beer. "But yesterday is history, and tomorrow is another day. That’s why we have Saint Patrick's Day—to celebrate today."
The Federal Reserve faces pressure to cut interest rates by as much as a full percentage point or more at its scheduled policy meeting Source: FT.com - US homepage | 17 Mar 2008 | 6:58 pm
India's movie studios cranks out hundreds of films every year. To keep up with frenetic pace, some studios are cutting corners by stealing from American films. Rico Gagliano reports on the state of the silver screen in Mumbai. Source: Marketplace | 17 Mar 2008 | 6:14 pm
Senior executives from Yahoo! and Microsoft have met, signaling Microsoft's takeover deal may soon be worked out. Thousands of Yahoo! employees are left to wonder what will happen to their work environment after a takeover. Krissy Clark reports. Source: Marketplace | 17 Mar 2008 | 6:14 pm
Commentator and former Microsoft employee Scott Berkun says when you look past the stodgy corporate environment of Microsoft and the freewheeling Yahoo! culture, the two companies are more similar than they might like to admit. Source: Marketplace | 17 Mar 2008 | 6:14 pm
The collapse of Bear Stearns prompted the Fed to once again cut interest rates. Commentator and economist Andrew Samwick says whether you call it a bailout or a rescue, all Americans have a stake in the outcome. Source: Marketplace | 17 Mar 2008 | 6:14 pm
The Federal Reserve committed $30 billion in taxpayer money to guarantee the riskiest part of Bear's portfolio in the JP Morgan sale. Kai Ryssdal speaks to Bob Moon about whether the move could ultimately benefit taxpayers. Source: Marketplace | 17 Mar 2008 | 6:14 pm
Once one of the top investment banks on Wall Street, Bear Stearns was offered a mere $2 a share in a bailout deal offered by JP Morgan. Janet Babin reports on how the subprime crisis may have triggered the bank's dramatic fall. Source: Marketplace | 17 Mar 2008 | 6:14 pm
This day will go down in the history books as more than just the day that Bear Stearns blew up. It's also the day that Arthur Sulzberger, chairman of the New York Times Co., conceded.
The embattled media company announced it has reached a deal with a group of activist investors fighting for four seats on the New York Times' board. Sulzberger agreed to expand the board by two seats to make room for two of the investors' nominees. In exchange, the investors agreed to a cease-fire in its proxy battle.
Scott Galloway and James Kohlberg will be nominated by the board for voting during the shareholder meeting on April 22. Galloway, a business school professor and partner in the fund Firebrand Partners, spearheaded this proxy effort along with the hedge fund Harbinger Partners. Kohlberg, founder of the private equity firm Kohlberg & Co., was one of the four fund nominees.
The board will expand from 13 to 15 members, and public shareholders will be allowed to vote on five of them. The other nominees up for election will be Robert Denham, Thomas Middelhoff, and Doreen Toben.
Sulzberger's concession is significant if only because it so rarely happens. Last year, he vigorously fought back (and won) when other activist shareholders waged a proxy battle. He has remained stubbornly resistant to change, even while the share price of the New York Times has been steadily declining.
Harbinger and Galloway chose a more civilized approach to getting inside the boardroom—a tact that seems to have worked, at least in part. The funds built up a 19 percent stake in the company during the past several months, and they made no demands for changing the company's shareholder class structure, which gives the Sulzberger family more control than common shareholders. (For more on how the board votes work, see here.)
A person close to the hedge funds said today that they "feel great about" gaining access to the board. They decided that agreeing to two seats on an expanded board was more constructive than trying to remove people from the board altogether.
The investors wanted the New York Times to divest units that are outside of its core business and maximize its investments into digital media. It's worth noting that the two nominees that Sulzberger chose not to nominate each had extensive experience in internet businesses: Gregory Shove, a former AOL executive, and Allen Morgan, a longtime Silicon Valley venture capitalist.
It's unclear what this turn of events will mean for Harbinger's 19 percent stake in the company in the near term.
New York Times shareholders seemed unfazed by the first victory by an activist fund on their behalf. Its shares rose only slightly.
Perhaps they are preoccupied by an otherwise skittish day on the market. Or perhaps they believe that two outside voices in an increasingly crowded room of insiders will not have the impact they had hoped.
Investors are clearly pleased with the deal—J.P. Morgan shares have soared more than 10 percent today, while shares of other Wall Street banks are plunging.
Analysts almost universally applauded J.P. Morgan and its chief executive, Jamie Dimon. "Even with an estimated $6 billion in transaction costs, the deal economics look very compelling and from a strategic perspective, J.P.M. is getting several business lines from Bear that are very complementary to its investment bank," Citi analyst Keith Horowitz wrote in a report to clients this morning.
More than a few outlets have noted that Bear Stearns' headquarters in Manhattan, which the bank holds through a synthetic lease, is worth much more than the price tag for the entire bank.
J.P. Morgan expects Bear's operations to contribute roughly $1 billion to its earnings once the integration is complete—another figure that makes the $236 million price tag compelling.
Whatever clients that remained with Bear by the end of last week—hedge funds and other institutional clients were the bread and butter of its prime brokerage business—will be a welcome addition to J.P. Morgan's roster should they decide to stay (something J.P. Morgan should go to great lengths to encourage). More than two decades ago, Bear became one of the first banks to offer prime brokerage services, which includes everything from financing to trading and reporting for hedge fund clients. It remains one of the biggest providers of the lucrative services today.
In a clear effort to stave off further defections from Bear, J.P. Morgan's chief financial officer told investors that any parties in current transactions with Bear should now proceed with the "full faith and credit" of J.P. Morgan.
But the real price that J.P. Morgan is paying has less to do with Bear's assets and everything to do with its liabilities.
The analysts at Credit Sights broke it down in a report published this morning: Bear comes with about $33 billion worth of risky mortgage positions. But the deal included a $30 billion lending facility from the Federal Reserve, which discounts that exposure considerably. It also gives J.P. Morgan time to unwind its positions, instead of forcing them out in a fire sale.
J.P. Morgan is getting a sizable mortgage business with Bear Stearns, something it had previously said it wanted.
Citi's Horowitz noted that J.P. Morgan bankers are known for their strength in due diligence, which gives extra weight to its risk assessment of Bear's balance sheet. On the conference call, J.P. Morgan's William Winters said the bank had a team of 200 bankers dissecting Bear's books for three full days.
Credit Sights also noted that J.P. Morgan, by backing all of Bear's operating activities, has actually done itself a favor. As of September 30, 2007, J.P. Morgan had the most credit derivative exposure of any bank—nearly twice that of Citigroup, who had the next-biggest stake. J.P. Morgan, like other banks, "likely faced some risks from a major counterparty (Bear Stearns) potentially having to seek bankruptcy protection," the analysts wrote.
So what's next for J.P. Morgan, which had been expected to have a shopping spree this year in the banking sector? "In our view, the low price paid for Bear Stearns could leave J.P. Morgan with sufficient financial resources to make a bid for WaMu," the analysts wrote.
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If Bear Stearns is worth just $236 million this morning, about 90 percent less than what it was worth last week, what's Lehman Brothers' value? Or Merrill Lynch's?
It's the dawn of a new day for shareholders of the biggest Wall Street firms, and it's an ugly one. In a report published this morning, Oppenheimer analyst Meredith Whitney predicted that brokerage stocks could see half their value wiped away today.
The market is particularly concerned about the fate of Lehman Brothers, which said last week it plans to cut about 5 percent of its workforce. This morning, Moody's lowered its ratings outlook on Lehman debt from positive to stable. Credit default swaps on Lehman, which reflect the cost of protecting the bank's debt, soared this morning.
Lehman was also punished by a rumor that traders at DBS Group, one of the biggest banks in Southeast Asia, had been instructed to avoid transactions with Lehman. A later email went out reversing those instructions, according to the Wall Street Journal.
Investors will find out if the sell-off is warranted tomorrow, when Lehman is scheduled to report its first-quarter results.
Morgan Stanley, which has seen its shares fall more than 11 percent in premarket trading, will report earnings on Wednesday.
If there is another shoe to drop among the biggest brokerage firms, investors are rightly concerned that there may not be another white knight like J.P. Morgan. The Federal Reserve can't continue to finance $30 billion bailouts. Sovereign wealth funds were already burned by their foray into these stocks, and aside from J.P. Morgan, there are few possibilities in the private sector that seem likely to step in.
Edward Hadas at Breaking Views is alarmed by the grim outlook. "One path leads to multiple financial bankruptcies, debt deflation, and depression," he writes. "Another leads to the effective nationalization of much of the financial industry, with the risk of runaway inflation."
The nervousness was palpable following the weekend news that Bear Stearns has been sold in a fire sale, with the backing of the Federal Reserve. Asian and European markets were sharply lower, and the dollar tumbled, falling to 96 yen and nearing $1.60 to the euro.
The question on every one's mind: Will there be another domino to fall?
Perhaps not.
The U.S. market is down only modestly, recovering most of an opening slide. Shares of financial companies are down, but off their morning lows. Even Lehman Brothers, battered by fears that it might follow Bear in losing investors' confidence, is down only 9 percent.
Still, the wild swings in stocks are keeping investors on their toes. The Chicago Board Options Exchange Volatility Index, or VIX, surged today to its highest level in nearly three months. And as the experience of Bear has shown, things can change with incredible speed.
The current financial crisis is one that has no rule book. It perhaps best resembles the credit market turmoil in 1998, when the giant hedge fund Long-Term Capital Management teetered on the brink. A rescue by Wall Street banks (but not Bear Stearns, which walked away) organized by the Federal Reserve stemmed.
But Long-Term Capital was not a Wall Street bank with an 85-year history. So if Bear can disappear for a fraction of what its headquarters building is worth, won't there be others?
Edward Hadas on Breakingviews.com points to two other daunting issues:
Bear's demise will be certain to inspire others to reduce leverage and build up liquidity.
"But if everyone follows that precautionary strategy, asset prices will fall further, munching away at capital strength. What makes sense for each can be a disaster for all."
And where will all that money come from? he asks.
Still, a collapse and liquidation of Bear would have been much worse. And the role of the Fed was absolutely necessary to avoid that.
As Barry Ritholtz notes on the Big Picture blog, "Could J.P. Morgan really complete a thorough due diligence on all of Bear Stearn's crappy paper, leveraged risk, and counter-party obligations in two days? I doubt it. Hence, the $30B backstop from the Fed. Not quite free market capitalism, but definitely creative, and certainly destruction."
AP - Wholesale prices rose again in February as another hefty increase in energy costs offset falling food prices. Outside of food and energy, prices shot up at the fastest pace in 15 months.
Reuters - Goldman Sachs Group Inc on
Tuesday said first-quarter earnings fell by half after
recording more than $2.5 billion of losses on loans and other
assets, yet robust trading helped the bank exceed an anxious
market's reduced expectations.
Reuters - Lehman Brothers Holdings Inc
said on Tuesday first-quarter earnings dropped 57 percent as
bond trading revenue plummeted but rising merger advisory
revenue helped the investment bank beat expectations.
Reuters - Stock index futures stayed at higher
levels on Tuesday after stronger-than-expected data on housing
starts for February.
Reuters - U.S. Treasury Secretary Henry
Paulson said on Tuesday the U.S. economy had turned down
sharply but declined to label the situation a recession.
Reuters - The U.S. Federal Reserve is
expected to slash interest rates by as much as a whole
percentage point at its policy meeting later on Tuesday as
investors warily await investment bank results that could
aggravate fears of a full-blown markets crisis.