The turmoil in the financial markets is a greater challenge to President Bush
than September 11 was. He faces a slowdown in the world’s most powerful
economic engine, a credit crisis of unknown limits and a regulatory system
whose antique tangles reflect the United States’ origins and the 1930s
financial trauma rather than the needs of the 21st century. Source: Latest Business News from Times Online | 28 Mar 2008 | 10:49 pm
J. C. Penney Company, Inc. (NYSE:JCP) has just revised its sales and earnings guidance for the first quarter. Of course it is to the downside. The guidance reflects incremental weakness in the consumer spending environment and sales through Easter have run well below expectations. JCPenney now sees a low-double digit comparable store sales decline for March and sees a high-single digit decline for the first quarter. It now sees earnings at approximately $0.50 per share. This is well below its prior guidance for both March and first quarter sales to decline low-single digits and first quarter earnings to be in...
Chesapeake Energy Corporation (NYSE: CHK) has priced a public secondary offering of 20 million shares of common stock at $45.75 per share. Before any overallotments and before fees, the net proceeds of this deal come to $915 million. Chesapeake announced this sale under a shelf registration just on Wednesday. The company intends to use net proceeds initially to repay outstanding debt under its revolving bank credit facility, which it notes may be re-tapped from time to time to fund its recently announced drilling and land acquisition initiatives. Deutsche Bank, Banc of America Securities, and Lehman Brothers were listed as the...
Maguire Properties (NYSE: MPG) announced that it is finalizing its review of strategic alternatives for preserving and enhancing value for stockholders. The review no longer includes an active pursuit of selling the company to an outside buyer. Current market conditions, the current credit markets woes, and the lack of any viable acquisition proposal from third parties are all part of the reason it has ended the quest to sell itself. The Special Committee will continue to focus on non-sale options to enhance liquidity, including the company's dividend policy. The Special Committee intends to recommend the payment of its preferred stock...
These are the top analyst calls we are looking at this Friday morning: Apartment Investment (NYSE: AIV) Cut To Neutral From Buy at UBS. Bed Bath & Beyond (NASDAQ: BBBY) Cut To Underweight from Neutral at JPMorgan. Davita (NYSE: DVA) Raised To Buy From Neutral at UBS. Lehman Brothers (NYSE: LEH) Raised To Buy From Hold at Citigroup. McDonald's (NYSE: MCD) Started At Overweight at Morgan Stanley. Oplink Communications (NASDAQ: OPLK) Cut To Sell From Neutral at Piper Jaffray. Perry Ellis (NASDAQ: PERY) Started At Buy at SunTrust. Starwood Hotels (NYSE: HOT) Cut To Market Perform from Outperform at Wachovia....
WASHINGTON (Reuters) - U.S. Treasury Secretary Henry Paulson said on Friday that an economic stimulus program that will put $168 billion into consumers' hands this year and next could help create hundreds of thousands of new jobs.
Air France-KLM stands by plans to cut Alitalia jobs as it tries to win the backing of Italian unions for its takeover. Source: BBC News | Business | World Edition | 28 Mar 2008 | 11:38 am
France tells shops to withdraw some Italian mozzarella cheese from sale amid a dioxins scare. Source: BBC News | Business | World Edition | 28 Mar 2008 | 11:37 am
Amid estimates that they will report billions of dollars in additional write-downs for the first quarter, the two largest U.S. banks by deposits are preparing for their post-subprime futures.
Citigroup has a new chief for its U.S. consumer business, David Enrich of the Wall Street Journalreports, whileBank of America has agreed to pay $28 million to David Sambol, the chief operating officer of Countrywide Financial, to stay on when the two companies merge.
Terri Dial, who runs the retail banking business of Lloyds TSB of Britain, will be Citi's new chief of U.S. consumer operations, succeeding Steven Freiberg, the Journal says. Freiberg will now run the bank's global credit-card business.
Dial, 58, was a highly regarded Wells Fargo executive when she joined Lloyds in 2005.
The Financial Times' Alphaville blog notes that the situation at Citi's consumer unit, a sluggish business plagued by rising defaults, is similar to what she stepped into at Lloyds.
Citi is also ousting the chiefs of its global finance and prime brokerage business. Nick Roe will replace Ali Hackett and Tom Tesauro, according to an internal memo, Reuters and Bloomberg News report.
The shakeup is part of Vikram Pandit's effort to overhaul troubled bank giant since he took over from Charles Prince as C.E.O. in December.
"For Pandit it's the case of a new broom sweeps clean,'' Rupert Della-Porta, the chief operating officer at Atlantic Equities in London, told Bloomberg News. "You should expect a rotation of people, and prime brokerage is an area that people are focusing on, including Citigroup.''
Bank of America, meanwhile, is facing a number of doubters about its planned $4 billion acquisition of Countrywide Financial, the largest mortgage lender in the country. Countrywide continues to suffer from mounting foreclosures and its faces criminal and regulatory investigations.
But of BofA is going full steam ahead. It has already announced that Sambol would be the chief of the combined mortgage businesses of the two companies, a move that Senator Charles Schumer, Democrat of New York, asked that Bank of America reconsider. Now, the bank has disclosed its incentive to keep Sambol.
According to a filing on Thursday with the Securities and Exchange Commission, Sambol will be due a $20 million bonus to be paid in two parts, on the first and second anniversaries of the merger.
He also gets $8 million in restricted stock in three installments. Sambol also gets to keep his Countrywide fringe benefits until the end of next year, which include use of a jet, car, country club dues and financial consulting services.
All in all, Sambol gets a much richer deal than Bank of America's chief executive, Ken Lewis, who received $20.4 million in compensation.
The sale of Clear Channel Communications, America's biggest radio station owner, has rambled and lurched along like some kind of pre-Wright Brothers flying machine -- a bicycle with flaps trying to get off the ground. At every step of the sale process that began when a deal was struck in November 2006, there has been turbulence. Just last month, Clear Channel settled a dispute with private equity firm Providence Capital to complete the purchase of its TV businesses.
Citigroup has hired Terri Dial, the boss of Lloyds TSB's retail bank, to run
its flagging US consumer business. Source: Latest Business News from Times Online | 28 Mar 2008 | 11:27 am
Electronic Arts Inc. says it’s amending its tender offer for Take-Two Interactive Software Inc. in light of the video-game publisher’s latest rejection of its bid.
Punch Taverns says it is withdrawing its proposal to merge with troubled pub chain Mitchell & Butlers. Source: BBC News | Business | World Edition | 28 Mar 2008 | 11:25 am
The Kenyan government launches a share flotation of the country's largest mobile phone network Safaricom. Source: BBC News | Business | World Edition | 28 Mar 2008 | 11:20 am
There is a one in three chance of the UK going into a recession over the next two years, a report says. Source: BBC News | Business | World Edition | 28 Mar 2008 | 11:16 am
David Sambol, former chief operating office at rescued Countrywide Financial
is to be paid $28 million ($£14 million) by the bank that rescued the sub-prime
lender to run the combined mortgage operations. Source: Latest Business News from Times Online | 28 Mar 2008 | 10:57 am
FRANKFURT (Reuters) - Stock index futures rose before the start of Wall Street trading on Friday, signaling a rebound from the previous session's losses, with banks likely to remain in focus and eyes also on economic data.
Speculation about the future of Germany’s Dresdner Bank is reignited after a report that its parent, insurance giant Allianz, is working on a three-way tie-up for the unit with Commerzbank and Deutsche Postbank.
Falling house prices, higher mortgage rates and declining consumer confidence undercut the British pound, sending sterling to a new all-time low against the euro.
U.S. stock futures advanced on Friday after the Federal Reserve released data showing that primary dealers didn’t apply for as much funding from the central bank as many had feared, with an upgrade of Lehman Brothers also boosting sentiment.
In 1968, there was a sad little man on the popular TV show "Laugh In" who ran for president. His name was Pat Paulsen. He probably did not get any votes. Whatever he policies are on Iraq, universal health, and the war on drugs, Henry Paulson, current Secretary of the Treasury, is as close to a president as the US has. George Bush spends most of his time overseas or cutting brush at his ranch. Paulson is dealing with the most immediate problem, and the most serious, the disintegrating economy. Since it may be the most pressing crisis to hit...
Reuters - The best way for central banks to
foster sustainable economic growth and prevent instability is
to keep inflation under control, Philadelphia Federal Reserve
President Charles Plosser said on Friday. Source: Yahoo! News: Business | 28 Mar 2008 | 10:36 am
Reuters - The best way for central banks to
foster sustainable economic growth and prevent instability is
to keep inflation under control, Philadelphia Federal Reserve
President Charles Plosser said on Friday. Source: Yahoo! News: Business | 28 Mar 2008 | 10:36 am
CAPE TOWN (Reuters) - The best way for central banks to foster sustainable economic growth and prevent instability is to keep inflation under control, Philadelphia Federal Reserve President Charles Plosser said on Friday.
Shares in Enterprise Inns climbed by almost 7 per cent in early trading on
hopes that a company restructuring would enable the pub group to become the
first to convert to tax-efficient Reit status. Source: Latest Business News from Times Online | 28 Mar 2008 | 10:30 am
Markets in Europe were slightly higher at 6.10 AM New York time. The FTSE rose .2% to 5,730. BHP Billiton (BHP) was up 1.9% to 1501. British Airways was off 3.3% to 239. The DAXX was up .1% to 6,587. Commerzbank was up 2.2% to 19.89. SAP (SAP) was up 1.6% to 31.79. The CAC rose .1% to 4,726. Sanofi-Aventis was up 2.3% to 48.12. ST Micro (STM) was up 1.4% to 6.76. Data from Reuters Douglas A. McIntyre
There was a great deal of hope expressed as oil moved back to $100 last week. It is laughable that people would be excited about $100 oil, but crude had moved over $110. The theory about the drop in prices was that an economic slowdown would cut demand. That does not take into account the sucking sound in China, India, and other developing nations which need more oil every day. It also skirts that issue of aging oil fields in the Middle East and Arctic Circle. It ignores the aging pipeline and refineries which may have to be replaced taking...
Reuters - A U.S. federal judge has temporarily
blocked a former senior Bear Stearns Cos executive from
jumping to Morgan Stanley and recruiting clients and
colleagues to follow him.
NEW YORK (Reuters) - A U.S. federal judge has temporarily blocked a former senior Bear Stearns Cos executive from jumping to Morgan Stanley and recruiting clients and colleagues to follow him.
European shares weakened a touch on Friday as automakers slipped with oil prices staying firm, though the losses were not enough to derail the week’s advance.
If at first you don't succeed, try, try again. Was this the motto for Long-Term Capital Management alumni?
It certainly seems that way. But perhaps it's time to find a new one.
It turns out that Long-Term Capital founder John Meriwether isn't the only survivor of the hedge fund that imploded spectacularly in 1998 who is having trouble surviving today. Eric Rosenfeld, a former Salomon Brothers trader who helped Meriwether start both L.T.C.M. and J.W.M. Partners, has his own troubled tale to tell, Portfolio.com has learned.
Rosenfeld parted ways with Meriwether to start his own fund last year. He reunited with L.T.C.M.'s former chief financial officer, Robert Shustak, and the fund's former controller, Bruce Wilson, to start Quantitative Alternatives L.L.C. in Rye Brook, New York.
The plan, according to reports, was to use statistical models for trading strategies much like those employed by the ill-fated L.T.C.M. It had hoped to start trading by the end of last year.
But that day would never come. The fund never got off the ground, and the three partners decided to fold the operation at the end of last year. But unlike the dramatic finale of L.T.C.M., Quantitative Alternatives exited the scene in silence.
"The capital-raising environment was very challenging," says Shustak, who was reached by phone in his new office at QFS Asset Management. "At the end of the year, we just decided it wasn't the right time to raise a new quantitative fund. We didn't feel it was appropriate."
No one knows about today's challenging environment better than Meriwether, who is now struggling to keep his nine-year-old hedge fund solvent, the Wall Street Journalreported yesterday. Meriwether started J.W.M. Partners with five other principals of L.T.C.M., including Rosenfeld, and its biggest fund is down 28 percent so far this year.
As for the defunct Quantitative Alternatives, Shustak declined to say how much money the trio raised before quietly calling it quits. He landed on his feet at QFS earlier this year, and Shustak says Wilson is now working for Third Point Partners, an activist fund run by the outspoken Daniel Loeb.
Rosenfeld, however, is still "exploring his different options," Shustak says. Efforts to reach Rosenfeld both at home and at the former offices of Quantitative Alternatives were unsuccessful.
So is there a Long-Term Capital curse? When two or more former L.T.C.M. traders enter the same room, does lightning strike?
Shustak doesn't think there's enough evidence that the shared experiences at L.T.C.M. have anything to do with the success or failure of a new joint venture.
And he has reason to hope that's true. One of the principals of QFS, Shustak's current firm, worked in the back office for L.T.C.M., according to his bio.
It is only a matter of time before some big American companies sue the banks and brokerages that ran the auction-rate markets. Their case will be that, in a market which has operated since 1985. the financial firms presented the paper as cash-equivalents. Getting in and out of the instruments was easy, and took, at the most, a few days. The banks walked on the market when its was clear that their balance sheets had been torn to pieces. In the auction-rate world they would take any imbalances in an auction onto their books and clear out the securities at...
Investors burned during this wretched first quarter can take comfort in this fact: many pros think stocks could do very well in the third and fourth quarters.
Part of the plan to fix the mortgage crisis is for Fannie Mae (FNM) and Freddie Mac (FRE) to buy more debt securities. To do that, they will need more capital, perhaps as much as $20 billion. According to Bloomberg ``That's the top end of the range,'' James Lockhart,director of the Office of Federal Housing Enterprise Oversight said, Even in this day and age of multi-billion bail-outs, that is a lot of money. The companies will have to sell stock or bonds to raise capital. The may push their share prices down again because of dilution. The federal government probably...
Mitsubishi Heavy Industries confirms the development of Japan's first home-grown passenger jet. Source: BBC News | Business | World Edition | 28 Mar 2008 | 9:40 am
Countrywide NYSE: CFC) chief operating officer David Sambol cannot get a job as a garbage man. He is viewed as being too closely tied to policies whereby his company made subprime mortgage loans to people who, in many cases, could not repay them. That helped lead the current default crisis. While Sambol should be drawn and quartered, he is, instead, getting a $28 million pay package to run Countrywide once it has been taken over by Bank of America NYSE: BAC). As Reuters points out "The amount, which vests over three years, is 37 percent higher than the $20.4 million...
John Lewis emerged today as one of the biggest winners from the Easter weekend
after reporting a huge sales jump at its department stores. Source: Latest Business News from Times Online | 28 Mar 2008 | 9:24 am
The state of Missouri and the U.S. Army Corps of Engineers have spent years tussling over water policy on the Missouri River. Now they are fighting over dirt. Corps officials want to... Source: Infocious RSS raw feed - channel BNewsBusiness | 28 Mar 2008 | 9:22 am
Japan is going ahead with plans to build its first passenger jet, after All Nippon Airways said that it had placed a conditional order with Mitsubishi Heavy Industries for up to 25 aircraft.The order was... Source: Infocious RSS raw feed - channel BNPaperBusiness | 28 Mar 2008 | 9:16 am
House prices fell by 0.6pc in March, the fifth consecutive monthly fall, according to Britain's biggest mortgage lender Nationwide. Source: Telegraph Business | 28 Mar 2008 | 9:13 am
House prices fell by 0.6pc in March, the fifth consecutive monthly fall, according to Britain's biggest mortgage lender Nationwide. Source: Infocious RSS raw feed - channel BNPaperBusiness | 28 Mar 2008 | 9:13 am
Asian shares bounced back on Friday from morning losses and looked set for their biggest weekly gain this year as investors seemed to decide recent declines were overdone. The MSCI Asia Pacific index was... Source: Infocious RSS raw feed - channel BNPaperBusiness | 28 Mar 2008 | 9:12 am
Britain's second-biggest pub group, Enterprise Inns, has lashed out at Chancellor Alistair Darling's £1.5bn tax hike on alcohol, announced in his first Budget earlier this month. Source: Telegraph Business | 28 Mar 2008 | 9:10 am
Britain's second-biggest pub group, Enterprise Inns, has lashed out at Chancellor Alistair Darling's 1.5bn tax hike on alcohol, announced in his first Budget earlier this month. Source: Infocious RSS raw feed - channel BNPaperBusiness | 28 Mar 2008 | 9:10 am
Rice prices jumped 30 per cent to an all-time high, raising fears of fresh outbreaks of social unrest across Asia where the grain is a staple food for more than 2.5bn people Source: FT.com - US homepage | 28 Mar 2008 | 9:06 am
Health officials have pushed back a deadline for national chain restaurants to put calorie counts on their menus in New York City outlets. The requirement was supposed to take effect... Source: Infocious RSS raw feed - channel BNewsBusiness | 28 Mar 2008 | 9:05 am
NEW YORK (Reuters) - Bank of America Corp said it has agreed to pay $28 million to Countrywide Financial Corp Chief Operating Officer David Sambol to induce him to run the merged companies' consumer mortgage operations.
The subprime mortgage meltdown has shaken the entire U.S. economy. But nowhere might the impact be as stark as Irvine, California, a planned community nestled between Los Angeles and San Diego.
London equities held steady on Friday, with deal activity among pub stocks attracting interest. The FTSE 100 started the session flat at 5,716.3, whilst the FTSE 250 lost 0.2 per cent to 9,965.5, easing... Source: Infocious RSS raw feed - channel BNPaperBusiness | 28 Mar 2008 | 8:56 am
Terri Dial, Lloyds TSB's head of retail banking, is being lined up to run Citigroup's global consumer operations as part of an ongoing overhaul of the US bank's senior management Source: FT.com - US homepage | 28 Mar 2008 | 8:50 am
Citigroup is set to appoint the head of Lloyds TSB's retail arm to run its global consumer operations as part of an ongoing overhaul of the US bank's senior management, people familiar with the situation... Source: Infocious RSS raw feed - channel BNPaperBusiness | 28 Mar 2008 | 8:50 am
A year after Swedish publishing giant Bonnier Group acquired Time Inc.'s Time 4 Media operation, unrest still reigns among the newcomers. According to people familiar with the situation, former Time Inc... Source: Infocious RSS raw feed - channel BNPaperBusiness | 28 Mar 2008 | 8:41 am
Google is suffering "paid-click" pains again. Shares of the Internet giant slipped after research firm comScore found that Google's paid-click growth - or the number of times people click on its ads -... Source: Infocious RSS raw feed - channel BNPaperBusiness | 28 Mar 2008 | 8:41 am
Even Eli Manning and his Super Bowl heroes can't stop America's credit crisis menace from spoiling their game. The Giants are the latest victims of the big money madness that's slowing financing down... Source: Infocious RSS raw feed - channel BNPaperBusiness | 28 Mar 2008 | 8:41 am
American International Group Inc., the world's largest insurer by assets, sued the company's former chief executive officer Maurice "Hank" Greenberg, claiming he "misappropriated" AIG shares worth $20... Source: Infocious RSS raw feed - channel BNPaperBusiness | 28 Mar 2008 | 8:41 am
Mapeley, the landlord to HM Revenue & Customs, revealed today that
takeover talks which could have led to an offer for the £450 million company
had collapsed. Source: Latest Business News from Times Online | 28 Mar 2008 | 8:28 am
Oil prices fall after it emerges that an attack on an Iraqi export pipeline was not as serious as earlier thought. Source: BBC News | Business | World Edition | 28 Mar 2008 | 8:28 am
House prices fell by 0.6pc in March, the fifth consecutive monthly fall, according to Britain's biggest mortgage lender Nationwide. Source: Telegraph Business | 28 Mar 2008 | 8:10 am
Punch Taverns, Britain's biggest pubs company, said today that it had dropped
its takeover attempt for the rival Mitchells & Butlers (M&B), the
owner of the All Bar One and Harvester chains, but said that it was still
considering a joint offer with a third party. Source: Latest Business News from Times Online | 28 Mar 2008 | 8:08 am
City workers who expose market manipulation could get immunity from prosecution, under Treasury plans. Source: BBC News | Business | World Edition | 28 Mar 2008 | 8:08 am
Reuters - Fannie Mae's and Freddie Mac's
regulator will allow the mortgage financiers to raise
as much as $20 billion in capital as part of an agreement that
lets them buy more debt securities, Bloomberg News said on
Friday.
NEW YORK (Reuters) - Fannie Mae's and Freddie Mac's regulator will allow the mortgage financiers to raise as much as $20 billion in capital as part of an agreement that lets them buy more Source: Infocious RSS raw feed - channel BNewsBusiness | 28 Mar 2008 | 7:54 am
NEW YORK (Reuters) - Fannie Mae's and Freddie Mac's regulator will allow the mortgage financiers to raise as much as $20 billion in capital as part of an agreement that lets them buy more debt securities, Bloomberg News said on Friday.
NEW YORK (Reuters) - Sen. Charles Schumer on Friday called for a rethinking of the U.S. financial regulatory system, perhaps moving toward a single regulator, following the collapse... Source: Infocious RSS raw feed - channel BNewsBusiness | 28 Mar 2008 | 7:52 am
NEW YORK (Reuters) - Sen. Charles Schumer on Friday called
for a rethinking of the U.S. financial regulatory system,
perhaps moving toward a single regulator, following the
collapse this month of Bear Stearns Cos .
Reuters - Sen. Charles Schumer on Friday called
for a rethinking of the U.S. financial regulatory system,
perhaps moving toward a single regulator, following the
collapse this month of Bear Stearns Cos .
NEW YORK (Reuters) - Citigroup Inc , the largest U.S. bank, plans to hire an outsider to take over its flagging U.S. consumer business, the Wall Street Journal said on Friday.
NEW YORK (Reuters) - Citigroup Inc , the largest U.S. bank, plans to hire an outsider to take over its flagging U.S. consumer business, the Wall Street Journal said on Friday. Source: Infocious RSS raw feed - channel BNewsBusiness | 28 Mar 2008 | 7:43 am
House prices are rising at the slowest rate for 12 years in a blow that could
force the Bank of England to bring forward an interest rate cut to April,
Britain’s second-biggest mortgage lender said today. Source: Latest Business News from Times Online | 28 Mar 2008 | 7:41 am
NEW YORK (Reuters) - U.S. incomes probably continued to grow at a moderate pace in February, according to a Reuters poll, while underlying inflation pressures are likely to have eased. Source: Infocious RSS raw feed - channel BNewsBusiness | 28 Mar 2008 | 7:34 am
NEW YORK (Reuters) - U.S. incomes probably continued to grow at a moderate pace in February, according to a Reuters poll, while underlying inflation pressures are likely to have eased.
TOKYO Japan's inflation rate climbed at its fastest rate in a decade in February and the jobless rate worsened to 3.9 percent under data released Friday, raising concerns about the... Source: Infocious RSS raw feed - channel BNewsBusiness | 28 Mar 2008 | 7:28 am
Vietnam is the latest rice-producing nation to limit exports against a backdrop of soaring global prices. Source: BBC News | Business | World Edition | 28 Mar 2008 | 7:18 am
HONG KONG (Reuters) - Citigroup, the largest U.S. bank struggling to recover from the credit crunch, tapped Nick Roe to be Head of Global Prime Finance, according to a company memo obtained Source: Infocious RSS raw feed - channel BNewsBusiness | 28 Mar 2008 | 7:15 am
ROME (Reuters) - Air France-KLM agreed to take on about 900 more employees of Alitalia's ground services unit than earlier planned as part of a new proposal to appease unions,... Source: Infocious RSS raw feed - channel BNewsBusiness | 28 Mar 2008 | 7:13 am
JOHANNESBURG (Reuters) - Mining group BHP Billiton will phase out annual business with Standard Bank in the first corporate spat brought on by South Africa's power crisis. Source: Infocious RSS raw feed - channel BNewsBusiness | 28 Mar 2008 | 7:08 am
WASHINGTON (Reuters) - The International Monetary Fund
board on Friday will recommend a landmark overhaul in the
voting power of member countries, with emerging economies
saying they will settle for less than they wanted.
The Air Resources Board substantially reduces the number of clean-air cars that big automakers will be required to sell in the next few years.
California's Air Resources Board voted Thursday to slash by 70% the number of emission-free vehicles that carmakers must sell in the state in coming years, a significant blow for environmentalists and transportation activists.
FAA says it will release results from its audit of maintenance records.
A monthlong flurry of airline inspections and flight cancellations is expected to wind down today as the Federal Aviation Administration wraps up the first stage of a sweeping inquiry into the way U.S. carriers are maintaining their aircraft.
Maintenance issues ground American, Delta planes, leading to flight cancellations.
The nation's aging airline fleets, already struggling with high fuel costs and growing passenger demand, delivered a further blow to travelers today as American Airlines and Delta Air Lines canceled more flights while planes were reinspected for compliance with federal maintenance rules.
The cable TV company was criticized for allegedly blocking BitTorrent software for watching video online.
After criticism for allegedly blocking a popular software program for watching video online, Comcast Corp. pledged Thursday not to discriminate against specific technology as it tries to keep increasing amounts of data flowing through its cable networks.
As rates for the service rise, a panel will debate a bill to eliminate costs charged by phone and cable companies offering voice-over-Internet service.
In California, where celebrities, billionaires and the rest of us prize a little privacy at home, the price of going unlisted is going up, big-time.
Many find their duty didn't prepare them for the kind of work they hoped it would.
Aboard the retired cruise ship Queen Mary -- a World War II veteran redeployed as a tourist attraction -- former members of the armed services Thursday got an extra ration of employment help.
Reuters - Bank of America Corp said it
has agreed to pay $28 million to Countrywide Financial Corp
Chief Operating Officer David Sambol to induce him to
run the merged companies' consumer mortgage operations.
The simmering political tensions in Tibet burst into the open in one of Lhasa's most important temples when a group of 30 young Buddhist monks interrupted a government-organised visit by journalists Source: FT.com - US homepage | 28 Mar 2008 | 2:16 am
Argentina's president says she will not negotiate with farmers striking over rising taxes until they end their protests. Source: BBC News | Business | World Edition | 28 Mar 2008 | 12:44 am
The New Zealand economy ended 2007 strongly, but the December quarter surge is widely expected to be the last hurrah for some time.
Figures published by Statistics New Zealand today show Gross Domestic Product grew 1 per cent in... Source: New Zealand Herald - Business | 28 Mar 2008 | 12:22 am
The Kupe Gas Project has announced plans to undertake a drilling exploration of the Momoho prospect.
The area is 6km south of the Kupe Gas Field, off the Taranaki Basin.
Kupe Gas Field director Peter Ashford said the well would... Source: New Zealand Herald - Business | 28 Mar 2008 | 12:20 am
Pontin's has been sold for £46m to a company controlled by Graham Parr, the entrepreneur who started his career as a Bluecoat at the holiday camps operator. Source: Telegraph Business | 28 Mar 2008 | 12:01 am
Iceland may see its credit rating cut if the country's banks are further battered by the global credit crisis, Standard & Poor's warned yesterday. Source: Telegraph Business | 28 Mar 2008 | 12:01 am
A mortgage crunch is now underway, analysts have warned, after new figures showed that half of all home loans taken out in recent months went to families sliding off cheap deals onto more expensive interest rates. Source: Telegraph Business | 28 Mar 2008 | 12:01 am
Property tycoon Robert Tchenguiz placed his Laurel pubs and restaurants business into administration yesterday - then immediately bought back the bulk of the estate from the administrator. Source: Telegraph Business | 28 Mar 2008 | 12:01 am
Dealmaking activity plunged in the first quarter of the year as turbulent credit markets made it difficult for private equity firms to pull off the same kind of audacious transactions that they were doing during the opening months of last year. Source: Telegraph Business | 28 Mar 2008 | 12:01 am
Hedge fund Man Group has said it expects to beat average profit forecasts for the year despite demands for higher deposits at its London brokerage offshoot MF Global. Source: Telegraph Business | 28 Mar 2008 | 12:01 am
The board of Independent News & Media has broken its silence on Irish telecoms billionaire Denis O'Brien, who owns over 22pc of the company, labelling him a "dissident shareholder". Source: Telegraph Business | 28 Mar 2008 | 12:01 am
Robert Tchenguiz, the embattled property tycoon, damped down fears over his
financial position last night by injecting more than £50 million into his
Laurel Pub Company as part of a rescue refinancing of the business. Source: Latest Business News from Times Online | 28 Mar 2008 | 12:00 am
A dispute erupted last night over the financing for a buyout of Clear Channel,
the radio and billboard giant, raising doubts about $130 billion ($£65
billion) of similar private equity deals in the pipeline. Source: Latest Business News from Times Online | 28 Mar 2008 | 12:00 am
Jimmy Cayne, a one-time travelling salesman who became a paper billionaire last year as chief executive of Bear Stearns, has sold his entire stake in the investment bank for a little more than $61m Source: FT.com - US homepage | 27 Mar 2008 | 11:24 pm
Jaap de Hoop Scheffer, Nato's secretary-general, has warned Vladimir Putin that next week's annual summit of the 26-member alliance must not be marked by another display from the Russian president of "unhelpful rhetoric" directed at the west Source: FT.com - US homepage | 27 Mar 2008 | 10:07 pm
The worldwide volume of mergers and acquisitions fell to its lowest level in four years in the first quarter of 2008 as the credit squeeze and market turmoil continues to put a brake on deal-making activity Source: FT.com - US homepage | 27 Mar 2008 | 10:07 pm
Rising numbers of Chinese companies are shunning the US dollar or devising ways to offset the impact of the falling currency as they confront rising labour and raw material costs at home Source: FT.com - US homepage | 27 Mar 2008 | 10:02 pm
AP - Big Wall Street investment companies have jumped all over the Federal Reserve's unprecedented offer to obtain emergency loans, borrowing more than doubled than in the program's debut week.
If at first you don't succeed, try, try again. Was this the motto for Long Term Capital Management alumni?
It certainly seems that way. But perhaps it's time to find a new one.
It turns out that Long Term Capital founder John Meriwether isn't the only survivor of the hedge fund that imploded spectacularly in 1998 who is having trouble surviving today. Eric Rosenfeld, a former Salomon Brothers trader who helped Meriwether start both L.T.C.M. and J.W.M. Partners, has his own troubled tale to tell, Portfolio.com has learned.
Rosenfeld parted ways with Meriwether to start his own fund last year. He reunited with L.T.C.M.'s former chief financial officer, Robert Shustak, and the fund's former controller, Bruce Wilson, to start Quantitative Alternatives LLC in Rye Brook, New York.
The plan, according to reports, was to use statistical models for trading strategies much like those employed by the ill-fated L.T.C.M. It had hoped to start trading by the end of last year.
But that day would never come. The fund never got off the ground, and the three partners decided to fold the operation at the end of last year. But unlike the dramatic finale of L.T.C.M., Quantitative Alternatives exited the scene in silence.
"The capital raising environment was very challenging," says Shustak, who was reached by phone in his new office at QFS Asset Management. "At the end of the year, we just decided it wasn't the right time to raise a new quantitative fund. We didn't feel it was appropriate."
No one knows about today's challenging environment better than Meriwether, who is now struggling to keep his nine-year old hedge fund solvent, the Wall Street Journal reported yesterday. Meriwether started J.W.M. Partners with five other principals of L.T.C.M., including Rosenfeld, and its biggest fund is down 28 percent so far this year.
As for the defunct Quantitative Alternatives, Shustak declined to say how much money the trio raised before quietly calling it quits. He landed on his feet at QFS earlier this year, and Shustak says Wilson is now working for Third Point Partners, an activist fund run by the outspoken Daniel Loeb.
Rosenfeld, however, is still "exploring his different options," Shustak says. Efforts to reach Rosenfeld both at home and at the former offices of Quantitative Alternatives were unsuccessful.
So is there a Long Term Capital curse? When two or more former L.T.C.M. traders enter the same room, does lightning strike?
Shustak doesn't think there's enough evidence that the shared experiences at L.T.C.M. have anything to do with the success or failure of a new joint venture.
And he has reason to hope that's true. One of the principals of QFS, Shustak's current firm, worked in the back office for L.T.C.M., according to his bio.
The NZ dollar spent most of the night trading in a range between US80.30c and US80.60c against a backdrop of steady European equity markets.
By 8am today the kiwi was buying US80.37c, slightly down from US80.50c at 5pm yesterday.
Bank... Source: New Zealand Herald - Business | 27 Mar 2008 | 9:10 pm
Banks sued by Clear Channel and its private equity partners over the collapse of a $19bn buy-out are pushing to move the case out of the Texas courts for fear they will receive a hostile reception in the media company's home state Source: FT.com - US homepage | 27 Mar 2008 | 9:03 pm
Any hope that there will be a deal other than J.P. Morgan Chase's $10-per-share stock offer for Bear Stearns should now be finally dashed.
James Cayne, the chairman and former chief executive of Bear Stearns, has sold 5.6 million shares of Bear for $10.84 a share, or about $60.1 million, on Tuesday.
It's quite a comedown for a man who was a billionaire about a year ago, when Bear's stock price was near $160. He had been among Bear's largest shareholders.
The Securities and Exchange Commission filing indicates that Cayne's wife sold 45,669 Bear shares.
Reuters - Athletic shoe retailer Finish Line
Inc posted a quarterly loss on Thursday as it booked
$81.5 million in costs related to its scuttled merger with
Genesco Inc . Source: Yahoo! News: Business | 27 Mar 2008 | 8:38 pm
NEW YORK - US stocks fell in volatile trade overnight as a revenue shortfall at Oracle Corp fueled a technology sector sell-off on concerns about a downturn in business spending.
Investors took the news from Oracle, seen as a bellwether... Source: New Zealand Herald - Business | 27 Mar 2008 | 8:34 pm
NEW YORK - Oil rose sharply overnight after a bomb attack on a major Iraqi crude pipeline slashed exports from the country's southern oil port for the first time in years.
US crude settled up US$1.68 to US$107.58 a barrel, boosting... Source: New Zealand Herald - Business | 27 Mar 2008 | 8:30 pm
The opening of the showcase £4.3bn Terminal 5 at Heathrow airport descended into chaos as mounting problems with the baggage system forced British Airways to turn away all passengers with check-in bags Source: FT.com - US homepage | 27 Mar 2008 | 8:03 pm
New Zealand dairy giant Fonterra has yet to enter any indicative offer for the Sydney-based Dairy Farmers cooperative.
The Australian Financial Review reported the NSW cooperative was set to draw up a shortlist of potential buyers,... Source: New Zealand Herald - Business | 27 Mar 2008 | 8:00 pm
The IOC has asked Beijing to promise not to delay transmissions of the games, after France raised concerns about Chinese television's censoring of Tibet protests at the torch-lighting ceremony in Greece Source: FT.com - US homepage | 27 Mar 2008 | 7:57 pm
The gap between what New Zealand spent abroad and what it earned narrowed over the last three months of last year, but banks are relying increasingly on short-term borrowing to fund the deficit.
Higher reliance on short-term funding... Source: New Zealand Herald - Business | 27 Mar 2008 | 7:30 pm
The European Commission said it had opened antitrust proceedings against Visa Europe over the interchange fees the company charges for cross-border consumer payment card transactions.
A European Union statement said Visa Europe... Source: New Zealand Herald - Business | 27 Mar 2008 | 7:30 pm
Investors dropped shares of Google like a hot potato this morning. The stock, which closed at $458.19 last night, was hovering around $445, when last we checked, and it traded as low as $441 earlier.
So why are Google shareholders' panties in a bunch? A comScore report suggests paid clicks (which measures the number of times people click on ads that are sponsored by advertisers) dropped 3 percent sequentially in February.
Although paid clicks were up 3 percent, year-over-year, that still represents a dramatic falloff from the 30 percent to 40 percent growth rates of 2007, according to Bernstein Research analyst Jeffrey Lindsay.
"We think that these earlier growth rates reflect Google's large search share gains over Yahoo and Microsoft at that time and also paid search's gains over display advertising . . . Now we believe the primary driver of Google's paid click growth is the fundamental shift of offline advertising to online," Lindsay wrote in a client note.
The comScore report suggests that the downturn in paid clicks in January wasn't an anomaly, and that paid clicks could continue to deteriorate. Still, ThinkEquity's William Morrison argues that it's something of a crock. He still expects a "solid quarter" despite weak paid click data.
Google Share Price
"Through the course of the quarter, we have spoken with more than 30 search engine marketers that we believe spend approximately $1 billion annually on paid search marketing, or approximately 10 percent of the U.S. search advertising market. While January 2008 was clearly a slow month for search advertising, according to our research, we believe that the market has rebounded in February and March," Morrison wrote in a client note. Related Links Google Wins One Google Gets Its Ad Deal. Google Gobbles Up DoubleClick
Shareholders of Thomson and Reuters yesterday approved Thomson's US$16.2 billion ($20.6 billion) cash and stock purchase of the news and information company. Source: New Zealand Herald - Business | 27 Mar 2008 | 6:30 pm
Now that Wall Street has taken a deep breath and relaxed over the fate of Bear Stearns, it apparently needs to start worrying about someone else.
Shares of Lehman Bothers have been battered today by rumors of a possible Bear-like run on the bank. A spokeswoman for Lehman denied that there was anything to the rumors and the stock, which was down by 10 percent earlier, recovered a bit by mid-afternoon, trading at $39, down 8 percent.
Earlier in the day, April options to sell Lehman at $30 were very active. As the headline on the Wall Street Journal's MarketBeat blog put it: "Your Weekly Scheduled Bank Stock Freak-Out"
Kerrie Cohen, a spokeswoman for Lehman Brothers, told Reuters, "There are a lot of rumors in the marketplace that are totally unfounded. We are suspicious that the rumors are being promulgated by short sellers of our stock that have an economic self-interest."
Lehman, which like Bear has been a huge player in the mortgaged-backed-securities business, has in recent weeks been very vocal in emphasizing that its liquidity position is much stronger than Bear's was.
Still, questions about Lehman persist. Jesse Eisinger last week gave a skeptical assessment about Lehman's balance sheet, noting that its leverage and assets rose in the first quarter. More troubling, Eisinger said, was that the firm changed the way it defines "tangible equity" or the hard assets that it has left over after subtracting its liabilities.
To be sure, when it comes to market worries, Lehman is not the only financial firm. Shares of Merrill Lynch were down 5 percent today after analysts forecast a lost for its first quarter.
A new agreement allowing more carriers to offer transatlantic flights is expected to bring thousands of additional American travelers to London's Heathrow Airport. And many Londoners are not too happy about it. Stephen Beard reports. Source: Marketplace | 27 Mar 2008 | 6:24 pm
School fight songs aren't all just team spirit and nostalgia. A lot of people are making money off of them, as Tanya Ott reports. Source: Marketplace | 27 Mar 2008 | 6:24 pm
Competition between Airbus and Boeing is often cast in nationalistic terms. But commentator Benjamin Barber says that in today's global economy, the idea that Boeing is American while Airbus is foreign is simply antiquated. Source: Marketplace | 27 Mar 2008 | 6:24 pm
Some of the biggest auto insurance companies are now offering discounts to a group that is typically the riskiest and most expensive to insure -- young drivers and their parents. Jeremy Hobson reports. Source: Marketplace | 27 Mar 2008 | 6:23 pm
YouTube, the online video pioneer, has rolled out a way to make tracking your Web-surfing interests and tendencies even easier. And advertisers are going to love it. Lisa Napoli reports. Source: Marketplace | 27 Mar 2008 | 6:23 pm
The price of oil jumped to $107.50 a barrel today after insurgents in Iraq blew up a crucial pipeline. Jeff Tyler reports on the pricing cause and effect. Source: Marketplace | 27 Mar 2008 | 6:23 pm
The Fed has pumped another $75 billion into the frozen credit markets with the first auction of loans to investment banks that it promised as part of the bailout of Bear Stearns. Will the effort restore confidence to the credit markets? Jill Barshay reports. Source: Marketplace | 27 Mar 2008 | 6:22 pm
An investigation into the subprime meltdown and the credit crunch has shed new light on how the wheels fell off the economy. And there's plenty of blame to go around. John Dimsdale shares the details with Kai Ryssdal. Source: Marketplace | 27 Mar 2008 | 6:22 pm
Shares edged higher in early trading today although top stock Telecom continued its southward journey.
US stocks ended lower as nervousness about further write-downs knocked down financial shares and weaker-than-expected revenue... Source: New Zealand Herald - Business | 27 Mar 2008 | 6:00 pm
Edgar Bronfman Jr.'s Warner Music Group has tapped industry veteran Jim Griffin to spearhead a controversial plan to bundle a monthly fee into consumers' internet-service bills for unlimited access to music.
The plan—the boldest move yet to keep the wounded entertainment industry giants afloat—is simple: Consumers will pay a monthly fee, bundled into an internet-service bill in exchange for unfettered access to a database of all known music.
Bronfman's decision to hire Griffin, a respected industry critic, demonstrates the desperation of the recording industry. It has shrunk to a $10 billion business from $15 billion in almost a decade. Compact disc sales are plummeting as online music downloads skyrocket.
Also on Portfolio.com: MySpace and Friends Need to Make Money The answer may lie in creating "social ads." Future Pop CDs are history. U.S. labels should look to Jin-Young Park if they hope to survive.
"Today, it has become purely voluntary to pay for music," Griffin told Portfolio.com in an exclusive sit-down this week. "If I tell you to go listen to this band, you could pay, or you might not. It's pretty much up to you. So the music business has become a big tip jar."
Nothing provokes sheer terror in the recording industry more than the rise of peer-to-peer file-sharing networks. For years, digital-music seers have argued the rise of such networks has made copyright law obsolete and free music distribution universal.
Bronfman has asked Griffin, formerly Geffen Music's digital chief, to develop a model that would create a pool of money from user fees to be distributed to artists and copyright holders. Warner has given Griffin a three-year contract to form a new organization to spearhead the plan.
Griffin says he hopes to move beyond the years of acrimonious record-industry litigation against illegal file-swappers, college students in particular.
"We're still clinging to the vine of music as a product," Griffin says, calling the industry’s plight "Tarzan" economics.
"But we're swinging toward the vine of music as a service. We need to get ready to let go and grab the next vine, which is a pool of money and a fair way to split it up, rather than controlling the quantity and destiny of sound recordings."
Warner Music Share Price
In the last year, the Recording Association of America, the industry group that represents the major labels, has sent 5,400 threatening letters to students at more than 150 schools, and reached settlements with more than 2,300 them. It has filed formal lawsuits against 2,465 others, who did not respond.
"I don't think we should be suing students and I don't think we should be suing people in their homes," says Griffin. "We want to monetize the anarchy of the internet."
Griffin says Warner Music is "totally committed to this." The fundamental issue, he says, is whether music consumers will buy songs and albums individually, or whether they will subscribe monthly to access a "universal" database of songs.
Will Tanous, Warner Music's communications chief, said Griffin's initiative is part of Warner's "ongoing effort to explore new business models in the music industry."
In recent weeks, major music industry players have signaled their interest in the "music as a service" model.
Apple is reportedly negotiating with the major record labels to offer consumers free access to the entire iTunes library in exchange for paying a premium for Apple hardware. Warner's plan would have consumers pay an additional fee—maybe $5 a month—bundled into their monthly internet-access bill in exchange for the right to freely download, upload, copy, and share music without restrictions.
Griffin says those fees could create a pool as large as $20 billion annually to pay artists and copyright holders. Eventually, advertising could subsidize the entire system, so that users who don't want to receive ads could pay the fee, and those who don't mind advertising wouldn't pay a dime.
"Ideally, music will feel free," says Griffin. "Even if you pay a flat fee for it, at the moment you use it there are no financial considerations. It's already been paid for."
While few of the plan's details have emerged, critics have begun their attacks.
David Barrett, engineering manager for peer-to-peer networks at Web content-delivery giant Akamai, says he's opposed to it on principle. Griffin's plan, he says, is tantamount to extortion, because it forces everyone to join.
"It's too late to charge people for what they're already getting for free," says Barrett. "This is just taxation of a basic, universal service that already exists, for the benefit a distant power that actively harasses the people being taxed without offering them any meaningful representation."
Griffin, who in 1994 was part of the team that made Aerosmith's "Head First" the first song available on the internet, goes to great pains to emphasize that the collective licensing plan is not "his" plan.
"This isn't my idea," says Griffin. "While I would gladly take the credit, blanket licensing has over 150 years of history behind it."
"Collective licensing is what people do when they lose control, or when control is no longer practical or efficient," Griffin says. "A pool of money and a fair way to split it up replaces control."
Griffin was quick to point out that the $5 figure is arbitrary.
"We negotiate in every place," Griffin says. "Clearly $5 per month would be an insane number in China or India. If you could get a nickel a month you could grow the business tenfold in those countries. In another country that had a high G.D.P., a nickel per month would be ridiculously cheap. So you negotiate. Fair is whatever you agree upon."
Griffin says Bronfman and Michael Nash, the company's digital-strategy chief, brought him into Warner to create an organization to negotiate collective licensing deals. But Griffin's ambitions extend far beyond just Warner Music.
"We're building a [as yet unnamed] company inside Warner that is not intended to be solely owned by Warner," Griffin says. "We hope all of the rights holders will come in and take ownership with us, and Warner will not control it. Our goal is to create a collective society for the digital age."
Meanwhile, critics have already attacked the plan as a kind of mandatory "culture tax."
"Jim will vehemently deny the 'tax' label," says Akamai's Barrett. "But it's a tax nonetheless. It'll be a government-approved cartel that collects money from virtually everyone—often without their knowledge—and failure to pay their tax will ultimately result in people with guns coming to your door.
"Jim's proposal does nothing but direct money to the very people that tried to prevent this future from coming to be," Barrett adds, "while further legitimizing the terror being waged in the courtrooms against their members."
Griffin dismisses such criticism.
"I understand what David is thinking, but I assure you, we have no such interest in government running this or having any part of it," he says.
Griffin says that in just the few weeks since Warner began working on this plan, the company has been approached by internet service providers "who want to discharge their risk."
"But more important than the risk for an I.S.P. is the marketing," Griffin says, drawing a comparison to Starbucks' marketing of "fair trade" coffee.
"I.S.P.'s want to distinguish themselves with marketing," Griffin says. "You can only imagine that an I.S.P. that marketed a 'fair trade' network connection would see a marketing advantage."
Gerd Leonhard, a respected music-industry consultant who has advised Sony/BMG, which recently announced plans for a flat-rate-subscription model for digital music, rejects Barrett's argument that the monthly fee amounts to a tax.
"This is not a tax," says Leonhard. "It's bundled into another charge."
"People should not be too harsh on Jim for trying to get the ball rolling," says Leonhard. "At this point, 96 percent of the population is guilty of some sort of infringement, whether they're streaming or downloading or sharing.
Brazil offers something that U.S. airlines can only envy: rising fares.
Airfares in Brazil, already 50 percent higher than comparable fares in the United States, are expected to rise 15 percent this year. Brazil is becoming an economic powerhouse, and more of its citizens are starting to fly.
Facing that kind of opportunity, David Neeleman, the founder of JetBlue, announced plans today to start a domestic airline in Brazil that will take on the two giants that dominate the market, TAM and Gol.
He says he has raised $150 million and that the airline plans to start next year, with as many as 76 Embraer aircraft by 2013.
"Our target market is the 150 million passengers who travel annually by long-distance bus as well as those who, for lack of a convenient alternative, don't travel at all," Neeleman said. "We respect TAM and Gol as well-run companies with deep pockets. We believe, however, that the Brazilian market is ready for a third major airline and that there is sufficient untapped potential to support all of us."
The name of the airline has yet to be decided. Neeleman has a website, www.voceescolhe.com.br, that invites would-be passengers to choose a name (in Portuguese, of course).
Neeleman was born in Brazil and lived there as a Mormon missionary. As a result, he is able to overcome Brazil's restrictions on foreign investment in airlines.
JetBlue has been a rare success story in U.S. aviation. But it had an embarrassing setback in February 2007, when an ice storm stranded hundreds of passengers at John F. Kennedy International Airport for many hours. Neeleman stepped down as chief executive in May, but remains as chairman.
In Brazil, he won't have to worry about ice storms.
Actually, it's a familiar face to the Crimson crowd. After an extensive search, Harvard has hired Jane Mendillo to oversee its $35 billion endowment.
Mendillo spent 15 years at Harvard Management Company before leaving in 2002 to manage the endowment for Wellesley College. During her five years at the women's school, the fund grew from $1 billion to $1.7 billion, and had annualized returns of 13.5 percent, according to an announcement by Harvard.
She returns to Harvard to run the country's largest university endowment, a position that was vacated by Mohamed El-Erian last year. El-Erian returned to the giant bond fund Pacific Investment Management Co.
Mendillo worked at Harvard from 1987 to 2002 in a number of different management positions. During most of that time, she worked under the legendary investment manager Jack Meyer.
When Meyer joined Harvard in 1990, the endowment was worth $4.7 billion. Under his oversight, aggressive fundraising efforts and more diversified investment strategies helped it grow to nearly $23 billion by the time he left in 2005. Meyer launched an investment strategy that's still paying off handsomely today—one that relies less on stocks and bonds and more on alternative investments like real estate and hedge funds.
He left to start his own investment firm with several of his top managers from Harvard after a firestorm erupted over the compensation packages of the fund's employees.
As a protégé of Meyer's, Mendillo should be a welcome sight to the endowment office, which has been without a leader during one of the most tumultuous market cycles in its history.
Comcast, the nation's largest cable company, said today that it will change its controversial network management practices and work with file-sharing services to address complaints that it unfairly blocks certain peer-to-peer traffic. But consumer groups weren't buying it.
The Federal Communications Commission is currently investigating Comcast over charges that it stifles legal peer-to-peer traffic on its network. Consumer groups and network-neutrality advocates have been pushing the F.C.C. and Congress to forbid Comcast to discriminate against legal traffic on its network.
Today's announcement is a stunning turnaround for a company that until just months ago denied it engaged in any Web blocking at all. After the Associated Press caught Comcast blocking certain traffic, the company was forced to admit that it "delays" certain peer-to-peer traffic, but it defended the practice as "reasonable network management."
Comcast said that by the end of 2008, its network-management policy will be "protocol agnostic"—meaning it will not favor one type of traffic over another—and will instead focus on users who consume the most bandwidth.
"This means that we will have to rapidly reconfigure our network-management systems, but the outcome will be a traffic-management technique that is more appropriate for today's emerging internet trends," Comcast chief technology officer Tony Werner said in a statement.
Comcast will also expand its network capacity to better accommodate rapidly increasing bandwidth consumption, said John Schanz, a Comcast Cable executive vice president.
"We plan to more than double the upstream capacity of our residential internet service in several key markets by year end 2008," Schanz said.
Comcast also said it had agreed to work with file-sharing service BitTorrent in an effort to address the best way to manage peer-to-peer traffic, one of the most bandwidth-intensive activities on the Web.
"Recognizing that the Web is richer and more bandwidth-intensive than it has been historically, we are pleased that Comcast understands these changing traffic patterns and wants to collaborate with us to migrate to techniques that the internet community will find to be more transparent," said Eric Klinker, BitTorrent's chief technology officer.
Meanwhile, consumer groups reacted warily to Comcast's about-face. Nicholas Reville, co-founder and executive director of the Participatory Culture Foundation, wasn't buying what Comcast was selling.
"Comcast is taking a page right out of the auto-industry playbook: Car companies deny the importance of global warming while using announcements of future technology to block meaningful environmental protections," said Reville. "Comcast can see that public demands for net-neutrality protections are growing—this announcement is a transparent attempt to distract from that debate."
"The announcement from Comcast and BitTorrent has absolutely nothing to do with the need for net-neutrality protections and BitTorrent certainly does not speak for other torrent technology companies," Reville added.
Gigi Sohn, president of consumer rights group Public Knowledge, called Comcast's agreement with BitTorrent "irrelevant," and said in a statement that it does not have "any bearing on the complaint and petitions pending before the Federal Communications Commission on what rights users have on the internet."
"The F.C.C. should continue to reinforce its principles of internet access and should continue to work for the benefit of consumers regardless of any particular arrangements made by the private sector," Sohn added.
Markham Erickson, executive director of the Open Internet Coalition, which lobbies for net neutrality, said that "despite the welcome news that Comcast and BitTorrent are working together, the F.C.C. still needs to reinforce these efforts by establishing the basic rules of the road for BitTorrent users and all internet consumers by defining permissible broadband network-management practices."
"Time and time again, when the telcoms and cable companies engage in discriminatory behavior against certain types of speech and content—as we've seen with AT&T, Verizon, and most recently with Comcast—a familiar pattern emerges," Erickson said.
"First, a spotlight gets focused on the bad behavior," he said. "Then, when exposed, the companies state such action is within their power as network operators. After that, the F.C.C. and Congress focus on these discriminatory acts, and finally, the companies do a U-turn and apologize.
"While it's always a positive step when these companies admit the error of their ways," added Erickson, "it's a bad way to run the internet."
Reuters - A U.S. federal judge has temporarily
blocked a former senior Bear Stearns Cos executive from
jumping to Morgan Stanley and recruiting clients and
colleagues to follow him.
Reuters - Fannie Mae's and Freddie Mac's
regulator will allow the mortgage financiers to raise
as much as $20 billion in capital as part of an agreement that
lets them buy more debt securities, Bloomberg News said on
Friday.
Reuters - Sen. Charles Schumer on Friday called
for a rethinking of the U.S. financial regulatory system,
perhaps moving toward a single regulator, following the
collapse this month of Bear Stearns Cos .
Reuters - Bank of America Corp said it
has agreed to pay $28 million to Countrywide Financial Corp
Chief Operating Officer David Sambol to induce him to
run the merged companies' consumer mortgage operations.
AP - Big Wall Street investment companies have jumped all over the Federal Reserve's unprecedented offer to obtain emergency loans, borrowing more than doubled than in the program's debut week.