Blue chips rallied Monday afternoon, bouncing back after Friday's big drubbing, despite record gas prices and Lehman Brothers' big quarterly loss. But the Nasdaq slumped, with investors bailing out of a variety of tech shares.
Shares in mobile phone firm Safaricom surge as much as 60% after Kenya's biggest stock market flotation. Source: BBC News | Business | World Edition | 9 Jun 2008 | 3:23 pm
US investment bank Lehman Brothers is raising $6bn as it prepares to post a $2.77bn loss in the second quarter. Source: BBC News | Business | World Edition | 9 Jun 2008 | 3:19 pm
A Honeywell subisdiary is selling its aerospace fasteners and hardware distribution business to B/E Aerospace for $1.05 billion in cash and stock, the companies say.
NEW YORK (Reuters) - Lehman Brothers Holdings Inc on Monday sold $6 billion of stock and convertible securities to bolster its capital base as the company prepares to post a $2.77 billion quarterly loss after trading and hedging losses.
Hopes that bargain hunters might come to the rescue of the stricken US housing market rose after data showed that pending home sales unexpectedly increased by 6.3 per cent between March and April Source: FT.com - US homepage | 9 Jun 2008 | 3:13 pm
U.S. stocks are trading mostly higher, rebounding from a sell-off last week, as a steep drop in crude oil prices and an upbeat index on pending home sales provide some degree of relief to investors worried that surging oil prices will further weaken an already fragile economy.
Reuters - Pending sales of previously owned
U.S. homes unexpectedly rose in April to the highest level in
six months as foreclosed properties flooded the market and
drove prices sharply lower, a real estate trade group report on
Monday showed.
WASHINGTON (Reuters) - Pending sales of previously owned U.S. homes unexpectedly rose in April to the highest level in six months as foreclosed properties flooded the market and drove prices sharply lower, a real estate trade group report on Monday showed.
Energy stocks move higher, taking their cue from the broad market, as oil holds onto much of its record run Friday and retail gasoline prices sets a new high-water mark.
LONDON (Reuters) - Oil fell on Monday, but held close to record levels after the biggest one-day price gain in the history of the market left traders and analysts divided over the explanation.
CIT Group, a commercial finance company struggling to secure funding for billions of dollars of debt maturing this year, said it has secured $3bn of financing from Goldman Sachs Source: FT.com - US homepage | 9 Jun 2008 | 2:51 pm
NEW YORK, June 9 - CIT Group, a commercial finance company struggling to secure funding for billions of dollars of debt maturing this year, said on Monday it has secured $3bn of financing from Goldman... Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Jun 2008 | 2:51 pm
Lehman Brothers confirmed Monday much of the speculation that has swirled around the Wall Street firm in recent days, booking a $2.8 billion loss and announcing plans to raise $6 billion in fresh capital by selling stock.
Unemployment is likely to continue to rise as companies cut more jobs, according to a new index from a respected business research group released Monday.
In a sign that the U.S. housing market may gain some strength in coming months, an index of sales contracts on previously owned U.S. homes rises 6.3% in April from the prior month, says the National Association of Realtors.
(Reuters) - Krispy Kreme Doughnuts Inc posted a profit for the first quarter as the doughnut shop chain's turnaround efforts helped in trimming costs, sending its shares up more than 8 percent.
Reuters - The U.S. labor market declined in May
to the weakest in three-and-a-half years and is likely to
deteriorate further, the Conference Board said on Monday as it
launched a new leading indicator for employment. Source: Yahoo! News: Business | 9 Jun 2008 | 2:33 pm
NEW YORK (Reuters) - The U.S. labor market declined in May to the weakest in three-and-a-half years and is likely to deteriorate further, the Conference Board said on Monday as it launched a new leading indicator for employment.
Pier 1 has been trying to reinvent itself for years, and buying Cost Plus seems to be the best solution they can come up with? This rescue mission smacks of desperation.
The Kremlin cranks up the pressure on BP's Russian oil venture as Moscow prosecutors question staff. Source: BBC News | Business | World Edition | 9 Jun 2008 | 2:31 pm
As Apple prepares to launch the iPhone 2 on Monday, competitors like Palm and RIM are not worried. On the contrary, they are licking their chops, preparing for a surge in sales, even though Apple expects to sell millions of new iPhones worldwide.
"The way I look at it is there are 1.2 billion cellphones out there, and we're just scratching the surface," said Mike Laziridis, CEO of Research In Motion, which makes the BlackBerry, the iPhone's closest rival.
Steve Jobs is expected to announce the second version of the iPhone on Monday morning during a keynote speech kicking off Apple's annual Worldwide Developer's Conference.
The iPhone 2 has already been dubbed the "BlackBerry killer." It promises to be faster, slicker and cheaper, boasting features like fast 3-G networking, Exchange support and even carrier subsidies. If the rumors prove true, it will be the iPhone many buyers have been holding out for.
It's a standard line for companies to say they "welcome competition," but it's usually a throwaway meant to deflect attention from strategic vulnerabilities.
In the case of the iPhone, however, competitors earnestly have reason to welcome Apple to the market. Sales show that what's been good for Apple has been verrrry good for smartphone makers. Retail sales of the BlackBerry, for example, are up 38 percent in the year since the iPhone's introduction.
It didn't initially look that way. When the iPhone 2 rumors first surfaced, nervous investors sold off shares of RIM under the assumption that the company would get creamed by Apple. Instead, RIM's market share of smartphones in the United States has actually swelled from 35 percent in the fourth quarter of 2007 to 45 percent in the first quarter of 2008.
"The fact of the matter is this," said Pablo Perez-Fernandez, an analyst with Global Crown Capital. "There were a lot of BlackBerrys in those stores where iPhones were selling, and there were people who may not have thought about a smartphone before, wanted the iPhone, thought it was too expensive, and bought a BlackBerry instead."
And for smartphone makers like Palm, Nokia and RIM, Apple helped whet the market's appetite while they went in for the kill, helped by discounted prices and a choice in carriers.
Palm says the sell-through rate on smartphones over the last two quarters has climbed 21 percent to 833,000 units in the third (and most recent) quarter, from 686,000 in the previous quarter (although the sell-through rate was 689,000 in the first quarter).
"The Centro has played a critical role in moving our transformational efforts along at a fast pace," said Ed Colligan, CEO and president of Palm, in a March conference call. He added that more than 70 percent of Centro buyers are traditional cellphone users who are purchasing a smartphone for the first time.
"What the iPhone did was make it cool to use smartphones," said Ramon Llamas, an analyst with research firm IDC. "Before, you had the BlackBerry, which mostly just resonated with enterprise users or business people. Now, there's a whole new market of smartphone consumers . Before the phone came out, I actually asked guys from companies like Nokia and RIM how they were going to respond, and the answer was unanimous -- it was, 'Welcome to the party, hop in the pool, the water's fine'"
It's an odd phenomenon because it's not as though Apple invented the smartphone or any of its features – touch screen devices have been around for years and lots of mobile phones already had music capabilities on phones. What Apple did was package it -- and market it -- in a way that made it attractive to mainstream consumers.
"The fact that it looks cool and sexy has helped Apple, and has called attention to a portion of the market that had been under the radar for a lot of people," Llamas said.
In many ways, the iPhone's effect on the market can be compared to what the iPod did for MP3 players.
Before Apple rolled out the iPod, the portable audio market wasn't doing much. In 1999, there were really only a handful of MP3-player makers and unit sales were marginal. Just a couple years after Apple rolled out the iPod in 2001, an industry was born.
Total sales of MP3 players in the United States jumped from a paltry couple million (depending on whose data you use) up to tens of millions over the last few years, as less-expensive models have become readily available.
"The combination of Apple's iPod device and its iTunes Store for music downloads has energized the music industry," gushed a JupiterResearch report in 2003.
Now we'll have to see whether the iPhone will have the same effect on the smartphone market.
Wall Street stocks were largely flat on Monday morning as news of losses and a capital raising at Lehman Brothers and near record oil prices wiped out any hope of a significant bounce following Friday's... Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Jun 2008 | 2:27 pm
Wall Street stocks were largely flat as news of losses and a capital raising at Lehman Brothers and near record oil prices wiped out any hope of a significant bounce following Friday's dramatic sell-off Source: FT.com - US homepage | 9 Jun 2008 | 2:27 pm
Nokia (NOK) can't seem to get the message the consumers don't want pseudo Apple (AAPL) iPhones. The world's largest handset maker will release its new N96 super-sophisticated handset later this year. According to Reuters, "Nokia unveiled the N96 in February and it is seen as the successor to its top profit generator, the N95. It will come with 16 gigabytes of internal memory and is expected to retail around 550 euros ($870), excluding subsidies and taxes." With the 3G version of the iPhone about to hit the market, Nokia should stick to lower end handsets. Douglas A. McIntyre
Royal Bank of Scotland completed its historic 12bn rights issue on Monday despite a fall in the bank's shares last week.The bank confirmed at the open on Monday that 95.11 per cent of the shares offered... Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Jun 2008 | 2:24 pm
Gains for resource stocks struggled to pull London's FTSE 100 index higher on Monday afternoon, with the index flitting between positive and negative territory after a difficult morning hampered by fears... Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Jun 2008 | 2:18 pm
The cost of oil eases slightly after Friday's record-breaking price surge but analysts warn of further price escalation. Source: BBC News | Business | World Edition | 9 Jun 2008 | 2:17 pm
Reuters - The Dow Jones industrial average and
the S&P 500 index on Monday added to gains and the Nasdaq
trimmed its losses on a report showing pending home sales
unexpectedly rose in April.
NEW YORK (Reuters) - The Dow Jones industrial average and the S&P 500 index on Monday added to gains and the Nasdaq trimmed its losses on a report showing pending home sales unexpectedly rose in April.
Reuters - Lehman Brothers Holdings Inc
on Monday sold $6 billion of stock and convertible securities
to bolster its capital base as the company prepares to post a
$2.77 billion quarterly loss after trading and hedging losses.
An industry group says pending homes sales unexpectedly increased in April to the highest reading since October, but are still off more than 13 percent from a year ago. The National... Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Jun 2008 | 2:10 pm
COLUMBIA, S.C., June 9 /PRNewswire-USNewswire/ -- Companion Life Insurance Co. of Columbia, S.C., announced today that it has purchased Jacksonville, Fla.-based International... Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Jun 2008 | 2:10 pm
The dollar fell against the euro but rose versus the yen in European trading on Monday, after the US currency plunged last week on news of a jump in the US unemployment rate, dealers said. Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Jun 2008 | 2:09 pm
WASHINGTON, June 9 /PRNewswire-USNewswire/ -- RNC Press Secretary Alex Conant released the following statement today: (Logo: Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Jun 2008 | 2:07 pm
NEW YORK, June 9 /PRNewswire/ -- The Conference Board's new Employment Trends Index (ETI)(TM) fell in May, continuing a decline that began in July 2007 and... Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Jun 2008 | 2:06 pm
Meredith Whitney of Opperheimer covers financial stocks, but she clearly hates them. At least for the time being. She is no making the point that as MBIA (MBI) and Ambac (ABK) lose their "AAA" status, companies like Citigroup (C) and Merrill Lynch (MER) face greater write-downs. According to Bloomberg, the analyst said "Citigroup Inc., Merrill Lynch & Co. and UBS AG may post further writedowns of $10 billion on their debt holdings after the two biggest bond insurers were stripped of their AAA rankings." Even with bad news out of Lehman (LEH) today, Citigroup (C) is holding above $20. That...
BOISE, Idaho, June 9 /PRNewswire/ -- Albertson's LLC announced today that it has accepted an offer from Publix Super Markets, Inc. to purchase 49 of the ... Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Jun 2008 | 2:05 pm
MILWAUKEE, June 9 /PRNewswire/ -- Canada is all about authentic vacation experiences. And now travelers can have their companion fly absolutely free when they book their... Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Jun 2008 | 2:03 pm
LONDON (Reuters) - Corn prices rose to record highs on Monday and looked set to climb further as torrential rains threatened to reduce further U.S. crop prospects in a market already facing tight supplies and surging demand.
SEATTLE, June 9 /PRNewswire/ -- Wines of Washington Promotion, a Seattle interactive and integrated marketing agency, has launched a new, robust website for Barnard... Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Jun 2008 | 2:00 pm
PALO ALTO, Calif., June 9 /PRNewswire/ -- Palo Alto Investors, LLC, one of Silicon Valley's leading asset management firms, announced today that Dr. Anthony J. Yun,... Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Jun 2008 | 2:00 pm
DALLAS, June 9 /PRNewswire/ -- In response to the market's growing demand for natural proteins, Winn Meat Company has added renowned Meyer Natural Beef to its... Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Jun 2008 | 2:00 pm
The investment bank was forced to raise $6bn from investors as it plunged to a second quarter loss of $2.8bn as hedges failed and debt assets fell in value Source: FT.com - US homepage | 9 Jun 2008 | 1:49 pm
Lehman Brothers plunged to a loss of $2.8bn in the second quarter, the Wall Street bank said on Monday, as it outlined plans to strengthen its balance sheet by raising $6bn in common and preferred stock... Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Jun 2008 | 1:49 pm
Safaricom, the Kenyan mobile operator part-owned by Vodafone, saw its share price leap as much as 50 per cent during its first day of trading on Monday after it launched east Africa's biggest initial public... Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Jun 2008 | 1:47 pm
NEW YORK (Reuters) - McDonald's Corp , the world's largest restaurant chain, said on Monday that global sales at restaurants open at least 13 months rose 7.7 percent in May, helped by strong international sales.
The national average price for a gallon of gas set another record above $4.02 a gallon, while crude oil prices eased following a massive spike in the previous session.
Wholesale gas prices today rose through the £1 per therm threshold for the
first time, compounding fears that UK consumers are set for a fresh round of
fuel price hikes. Source: Latest Business News from Times Online | 9 Jun 2008 | 1:43 pm
NEW YORK (Reuters) - Carl Icahn on Monday fired off another letter savaging the board and management of Yahoo Inc for failing in its growth plan, the latest volley in an escalating proxy battle the billionaire investor has staged at the Internet company.
During May, UK producer prices grew at their fastest rate since records began in 1986, official figures show. Source: BBC News | Business | World Edition | 9 Jun 2008 | 1:29 pm
KUALA LUMPUR (Reuters) - Oil prices are likely to hit $150 a barrel this summer season, the global head of commodities research at Goldman Sachs said on Monday, as tighter supplies outweigh weakening demand.
This afternoon Apple C.E.O. Steve Jobs is expected to open this year's Worldwide Developers Conference by introducing the company's next generation of the iPhone.
In recent weeks, rumors have swirled as to what new features Apple has in store for the device: 3G wireless compatibility, G.P.S. technology, and video capabilities are widely anticipated. But consumers have come to expect a lot from Apple. Will a few new bells and whistles cut it to compete against BlackBerry's newest offerings?
Here are some features that we wish would appear on the next-generation iPhone—but probably won't.
SmartSend: Every one of us has at some point fired off an angry email in the heat of passion, only to instantly regret it. The next-generation iPhone should be able to edit your blowups with SmartSend technology. SmartSend would stall emails in your outbox that include inflammatory content such as "go ahead and fire me," "I never considered you a close friend anyway," and "frankly, we don't need your business."
All-in-one tools: Who hasn't been caught in meetings or cocktail parties without a Phillips-head screwdriver when they need one? Apple could easily incorporate Leatherman-style tools into the design of the iPhone, concealing handy instruments like a nail file, beard trimmer, toothpick, and, of course, a trusty penknife.
ESP calendar: What most of us really need is a calendar program that reminds you about the appointments that you forgot to write down, rather than those you remembered. The new iPhone should auto-populate a calendar with data hacked from your brain, maybe using WiFi or that fancy 3G network they keep going on about.
Excuse profiles: Ever told your boss that you're stuck in traffic when really you're still in bed? Maybe that lie would actually work if the iPhone had customizable excuse profiles to mask unwanted noises or add helpful new ones: road sounds, office noises, or static for those unbearable phone calls from mom.
Hands-free touchscreen: Apple has already shown us they can perfect touchscreen technology—big deal, we want more. How about an interface that works by mind control? That way you could browse your iPhone hands-free in the car, while typing on your laptop, or just for fun to impress your friends. If it worked in Carrie and Powder, it can definitely work for Apple.
iPal: Most iPhone users are busy people leading hectic lives, and the least Apple can do for $499 is provide you with a friend and confidant. The iPhone's iPal should know how to comfort you when you're down (automatically load laughing-baby clips from Youtube?) and be your wingman when you need a drinking buddy. Have you ever seen an iPhone after a few beers? Me neither, but I'd like to.
25-hour clock: The new iPhone should add an hour onto your day to give you an edge over all those BlackBerry users that always complain about how "there isn't enough time in the day." I haven't worked out the specifics, but I'm sure there's some sort of algorithm that can do this.
Lehman Brothers today revealed plans to raise $6 billion ($£3 billion) to boost
its capital base as the US investment bank admitted it will announce its
first quarterly loss, which is expected to reach $2.8 billion.$ Source: Latest Business News from Times Online | 9 Jun 2008 | 12:15 pm
Reuters - Corn prices rose to record highs on
Monday and looked set to climb further as torrential rains
threatened to reduce further U.S. crop prospects in a market
already facing tight supplies and surging demand.
The Chinese toy industry still has "weak links" in it despite progress in addressing safety concerns, an EU report finds. Source: BBC News | Business | World Edition | 9 Jun 2008 | 11:57 am
The chief executive of one of the UK's biggest brokers is set to be shown the
door by the end of the week as the slowdown in the mortgage sector worsens. Source: Latest Business News from Times Online | 9 Jun 2008 | 11:57 am
These are not all of the analyst calls affecting shares this morning, but these are ten that we are focusing on this Monday morning: AbitibiBowater (NYSE: ABH) started as Outperform at RBC Capital Markets. Eaton Corp. (NYSE: ETN) raised to Overweight at JPMorgan. Hess (NYSE: HES) Added to Goldman Sachs Conviction Buy List. Lincoln Electric (NASDAQ: LECO) started as Buy at Piper Jaffray. Louisiana-Pacific (NYSE: LPX) started as Underperform at RBC Capital Markets. Macrovision (NASDAQ: MVSN) raised to Buy at Piper Jaffray. Murphy Oil (NYSE: MUR) cut to Underweight at JP Morgan. Novo-Nordisk AS (NYSE: NVO) raised to Neutral at...
The number of Japanese firms going bust fell for the first time in five months in May, says a report claims. Source: BBC News | Business | World Edition | 9 Jun 2008 | 11:32 am
Speculation over the features of the new 3G iPhone is reaching fever pitch, as the world eagerly awaits the gadget's unveiling at Apple's Worldwide Developers Conference later today. Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Jun 2008 | 11:30 am
Legal documents are rarely page-turners, but an indicted lawyer in New Orleans may have just put out one of the most gripping legal thrillers in years.
James Perdigao, who is battling a 59-count criminal indictment that accuses him of stealing about $30 million from his former firm, has come out swinging with a 73-page civil-racketeering complaint that carries some explosive accusations of its own.
He paints his former firm as something akin to John Grisham's fictional Bendini Lambert & Locke and himself as the cocky yet naive Mitch McDeere, scapegoated by a corrupt system that protects its own.
"The snitch usually ends up in the ditch," Perdigao contends that one partner warned him, adding that shortly after that threat, he was "attacked by gunfire at his residence."
While Perdigao does not go so far as to claim outright that his law firm, Adams & Reese, tried to have him killed—that might be too "Grisham" to be believed—he does make plenty of other bold accusations. The boldest: that partners at the firm turned a blind eye when one well-heeled client in a jam schemed to bribe a U.S. attorney.
It should be noted that Perdigao's story lacks corroboration for his bold claims. He will have to produce some evidence soon enough if he wants to keep a judge from tossing out the complaint.
Adams & Reese has called the suit "the latest episode in Perdigao's continuing fantasy of blaming the government and our firm for his wrongdoing and lashing out at those who are holding him accountable for his actions."
But this is New Orleans, where outlandish yarns of greed and corruption can have the ring of truth. Indeed, more than 170 people have been indicted for public corruption in the Big Easy over the last six years.
As James Bernazzani, the special agent in charge of the F.B.I.'s New Orleans field office, has noted on more than one occasion, corrupt public officials in Louisiana tend to take things an additional step or two. They don't just skim the cream, he likes to say. They also "steal the milk, hijack the bottles, and look for the cow."
Controversy has also swirled around several of the people who figure prominently in Perdigao's complaint, helping to give it stronger legs than it might otherwise have had. Federal officials have been investigating contracts awarded during the term of former New Orleans Mayor Marc Morial, who served of counsel with Adams & Reese for about a year after leaving office. Although Morial has never been charged with a crime, his uncle, his aunt, and a close associate have each pled guilty to various charges of city corruption. Adams & Reese has reportedly been issued two subpoenas seeking information about Morial's work at the firm.
The former U.S. attorney at the center of Perdigao's bribery allegation is Eddie Jordan, who last November resigned as Orleans Parish District Attorney after a federal judge ordered the district attorney's office to pay a $3.7 million judgment related to accusations that Jordan, who is black, fired dozens of white employees after being elected to office in 2003. Around the same time, Jordan admitted that he gave shelter to a man wanted in connection with both an armed robbery and a shooting of a police officer. Jordan has said he didn't know that the suspect—who was one of his girlfriend's friends—was on the lam.
Also an integral player in Perdigao's narrative is Representative William Jefferson, Democrat from New Orleans, who gained fame during Hurricane Katrina for commandeering a National Guard unit to ferry him to his home to retrieve personal items. Jefferson is currently facing federal corruption charges over allegations that he solicited bribes in the Congressional dining room. An F.B.I. raid of his home turned up $90,000 stashed in his freezer. Jefferson has pled not guilty.
Against this backdrop, it doesn't sound so ludicrous when Perdigao claims that he watched a client—who was a key witness in the federal bribery trial of former Louisiana governor Edwin Edwards—"fill a bag with cash that had been hidden under some tiles next to the bathtub" in the man's penthouse, with plans to drop this money under some steps at Jefferson's humble abode.
Or that, rather than agreeing to call in the feds, a law partner might have encouraged Perdigao to go on the next bag drop instead, stating that he would then "have a multimillion-dollar client for life."
At least one other person besides Perdigao must sure hope it's true, with Edwards' appeal of his 2000 conviction in the riverboat-gambling extortion case generally resting on a belief that there is something shady about the deal prosecutors gave this witness.
Implicit in the bribery accusations was Perdigao's own hope that the U.S. attorney's Office of the Eastern District of Louisiana would be forced to recuse itself from trying the criminal case now staring him down.
But that now will not happen, with the judge in the case ruling on Friday against Perdigao's motion.
"This was a clear and unambiguous ruling, so the interruption in the criminal case is over, says U.S. Attorney Jim Letten, who in filings to the court characterized Perdigao's claims as "unsupported vitriol," "perfidy," "vacillations," "lies," and "hearsay malice" unfairly leveled against Perdigao's accusers and victims.
Letten notes in these filings that "in an abundance of caution" Perdigao's allegations against his office were "promptly referred" to an independent prosecutor from the Justice Department, adding with obvious annoyance that "Perdigao's mendacity with the facts is as disprovable as his mendacity with the law."
Unfortunately, these days the people of New Orleans may rightfully fear there is a bit of mendacity in even the truest-sounding statement, and a little truth in every lie.
As Brick says, responding to the heavy hang of lies that define Tennessee William's own bayou tale, Cat on a Hot Tin Roof, "You said it yourself, Big Daddy, mendacity is a system we live in."
Speculation over the features of the new 3G iPhone is reaching fever pitch, as the world eagerly awaits the gadget's unveiling at Apple's Worldwide Developers Conference later today. Source: Telegraph Business | 9 Jun 2008 | 11:30 am
The trickle of information coming from Lehman Brothers has burst into an out-of-control fire hose.
Lehman has stunned Wall Street by announcing that it expects a loss of $2.8 billion, or $5.14 per share, in the second quarter. The loss, the firm's first since it went public in 1994, is much wider than forecasts of $300 million and $400 million.
"Even David Einhorn probably wasn't expecting numbers that bad," says Felix Salmon.
The loss reflects a write-down of assets, trading losses, and losses on hedges. While having more diverse businesses than Bear Stearns, Lehman is still primarily a fixed-income trading house. Fixed income had net revenue (revenue minus interest expenses) of negative $3 billion, compared with net revenue of $1.9 billion in the quarter a year ago.
"How Lehman managed expectations so badly when they were out in the middle of a huge P.R. blitz is a big open question," notes Yves Smith on the Naked Capitalism blog.
Questions about how Lehman got this quarter so wrong will be certain to come up in a conference call this morning. This will be a do-or-die performance by Richard Fuld, Lehman's chief executive, to persuade the doubters that Lehman can survive on its down.
In a sign that Lehman does have its supporters, the firm also says that it plans to raise $6 billion through offerings of common and convertible preferred stock.
While Lehman did not disclose whether it has buyers lined up, Susanne Craig of the Wall Street Journalsays that the $80 billion New Jersey pension fund, which recently invested in Merrill Lynch, and C.V. Starr, controlled by Hank Greenberg, former chief executive of American International Group, will be among the investors.
The firm did highlight some positive results: Its liquidity pool increased to $45 billion from $34 at the end of the first quarter; gross leverage was reduced to 25 times equity from 31.7 times equity in the first quarter; and the firm reduced its exposure to mortgages and real estate investments by 15 to 20 percent.
Moody's Investors Service has lowered its rating outlook on the firm to "negative" from "stable."
Boeing says its 787 Dreamliner will make its first flight in the final three months of this year. Source: BBC News | Business | World Edition | 9 Jun 2008 | 11:17 am
Sterling rose sharply on Monday after data showed UK factory gate inflation hit a record high in May, putting pressure on the Bank of England not to cut interest rates. The Office for National Statistics... Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Jun 2008 | 11:15 am
India's Sensex share index closes down more than 3% on fears oil prices will push inflation into double-digits. Source: BBC News | Business | World Edition | 9 Jun 2008 | 11:14 am
Taylor Nelson Sofres' (TNS) £2.1 billion all-share merger with Germany's GfK
could be restructured to give the UK market research group's investors a
cash sweetener but may result in management control passing to the German
group. Source: Latest Business News from Times Online | 9 Jun 2008 | 11:12 am
Korean technology group Samsung launched a new touchscreen smartphone hours before Apple was expected to announce a new version of the iPhone. Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Jun 2008 | 10:57 am
Oil prices clung at $137 a barrel on Monday, falling back $1.50 dollar on the day after frantic buying on Friday pushed prices to a new record of almost $140 a barrel.Nymex July West Texas crude oil fell... Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Jun 2008 | 10:55 am
Oil prices clung at $137 a barrel on Monday, falling back $1.50 dollar on the day after frantic buying on Friday pushed prices to a new record of almost $140 a barrel Source: FT.com - US homepage | 9 Jun 2008 | 10:55 am
Brazil says it will launch a $200 billion sovereign fund with the money from all the oil it has found off-shore. Of course, none of that oil has been brought to the surface, but that is a detail. The FT writes that Brazil's finance minister said “The fund will start small but once the oil begins to come in it will grow quickly, to $200bn or $300bn in three to five years." The sovereign fund business is now so good that countries pre-announce their plans to get into it years in advance of having the money. It is akin to...
Several companies which hold most of the patents for super-fast wireless broadband technology WiMax have creating a patent pool to keep licensing fees down. Included in the new arrangement are Cisco (CSCO), Intel (INTC), Sprint (S), Alcatel-Lucent (ALU), Clearwire (CLWR), and Samsung. According to The Wall Street Journal, "They have scheduled a conference call Monday to announce an organization, the Open Patent Alliance, to gather rights to WiMAX-related patents." PC makers will get better deals for using the tech. Of course, none of this works if WiMax goes nowhere. So far, in the US, it has not made much progress....
Corn prices hit an all-time high overnight. There has been too much rain on the farms where it is raised in the US. The cost of the stuff is up 47% this year. Corn production is expected to be flat over the next 12 months. It did not have to turn out this way. Monsanto (MON) recently remarked that it could "develop seeds that would double the yields of corn, soybeans and cotton by 2030 and would require 30 percent less water, land and energy to grow." The fact of the matter is that Monsanto already has seeds which will...
Sam Zell took The Tribune Company private and probably regrets that every hour of every day. With the downturn in the industry, his huge debt load is like a boat anchor. Zell has announced huge cuts in the amount of newsprint his papers like the LA Times and Chicago Tribune will use. He will chop the number of editorial pages to 50% of each property's total. That means the home town newspaper is going to look very thin. Zell has more debt than most news chains, but public companies like McClatchy (MNI) and Gatehouse (GTS) are not far behind him....
Strong export growth helps Germany boost its trade surplus but analysts warns of weaker prospects ahead. Source: BBC News | Business | World Edition | 9 Jun 2008 | 9:45 am
Wal-Mart (WMT) seems to have signed an exclusive deal with rock band AC/DC for distribution of its new CD in the stores of the world's largest retailer. Apple (AAPL) won't be selling that album on iTunes. According to The Wall Street Journal "The AC/DC arrangement aims to replicate a successful strategy recently used by fellow classic-rockers the Eagles and Journey, both of whom in recent months have sold new albums exclusively at Wal-Mart." The record label companies can't do much to fight Apple. The electronics company controls too much of the digital music world because of its 150 million iPods...
The Bank of England is facing further pressure to control rising inflation
after it emerged that prices at the factory gate surged by 5.9 per cent
during May - the sharpest increase since 1991 and above an expected rise of
4.7 per cent. Source: Latest Business News from Times Online | 9 Jun 2008 | 9:25 am
Lehman (LEH) appears to have raised $6 billion from places like The New Jersey Division of Investment and Hank Greenberg's C.V. Starr fund. It is a nice chunk of change, but it is very bad news that the brokerage had to raise that much. According to The Wall Street Journal, Lehman's loss for the last quarter will be about $2.8 billion. Not so long ago, estimates were for that number to be $300 million. That leaves Wall St. wondering what the next shoe to drop will be. It is hard to imagine Lehman's losses could be eight times greater than...
Consumer confidence has slumped to a record low according to the British Retail Consortium, as rising costs and falling property values add to Britons fears that the UK is heading into a recession. Source: Telegraph Business | 9 Jun 2008 | 9:11 am
Informa is poised to become a takeover target after confirming it is in merger talks with fellow media and exhibitions group United Business Media. Source: Telegraph Business | 9 Jun 2008 | 8:30 am
According to Reuters, Lehman (LEH) is close to rasing $5 billion. Reuters writes that one Goldman analyst see oil at $150 this summer. Reuters reports that HP (HPQ) has settled its patenet litigation with Acer. The Wall Street Journal writes that several large investors are asking AIG's (AIG) board to improve senior management. The Wall Street Journal reports that the price of gas hit $4. The Wall Street Journal writes that LandSource filed for bankruptcy. The Wall Street Journal writes that bond markets are showing concern about inflation and slowing growth. The Wall Street Journal writes that Wal-Mart (WMT) is...
Shares in business media groups Informa and United Business Media (UBM) soared
in early trading this morning after merger talks were confirmed that would
create a business information group worth around £3.4 billion. Source: Latest Business News from Times Online | 9 Jun 2008 | 7:39 am
Royal Bank of Scotland (RBS) provided relief for investors and the
underwriters of its £12 billion rights issue this morning, confirming it had
received acceptances for just over 95 per cent of shares. Source: Latest Business News from Times Online | 9 Jun 2008 | 7:26 am
Willis Group is buying US rival Hilb Rogal & Hobbs (HRH) for $2.1 billion
($£1.1 billion) in the biggest deal between insurance brokers for a decade. Source: Latest Business News from Times Online | 9 Jun 2008 | 6:58 am
Your national team doesn't have to be sponsored by Carlsberg to fail to qualify for the Euro 2008 championship, but it helps. Source: Telegraph Business | 9 Jun 2008 | 6:45 am
Britons must steel themselves for a fall in living standards which could be as sharp and painful as in the 1970s, as the western world faces up to a new era of stagflation, a former Bank of England policymaker has warned. Source: Telegraph Business | 9 Jun 2008 | 6:15 am
Reuters - Oil prices are likely to hit $150
a barrel this summer season, the global head of commodities
research at Goldman Sachs said on Monday, as tighter
supplies outweigh weakening demand.
The London-based global insurance broker is to acquire a smaller rival in the US, kicking off what could be a wave of consolidation in the sector Source: FT.com - US homepage | 9 Jun 2008 | 4:07 am
ANZ bank's team of economists have today floated the idea of a temporary cut in petrol taxes to mitigate the "extreme" nature of the current squeeze on disposable income.
"While we would not normally condone tinkering with 'sin'... Source: New Zealand Herald - Business | 9 Jun 2008 | 1:25 am
Japan's Nikkei stock index fell 2.3 per cent on opening today, battered by surging oil prices and US inflation fears fed by the worst rise in unemployment for 22 years, with Canon Inc and other exporters hit by a weaker dollar.
Energy... Source: New Zealand Herald - Business | 9 Jun 2008 | 1:00 am
The value of residential building work fell 6.6 per cent in the March quarter.
The figures out today from Statistics New Zealand (SNZ) follow a fall of 2 per cent in the December quarter, and highlight the impact economic slowdown... Source: New Zealand Herald - Business | 9 Jun 2008 | 12:30 am
Informa is poised to become a takeover target after confirming it is in merger talks with fellow media and exhibitions group United Business Media. Source: Telegraph Business | 9 Jun 2008 | 12:01 am
Britain's biggest companies are being outpaced for the first time in six years by their European counterparts on the amount of cash they are generating for the economy. Source: Telegraph Business | 9 Jun 2008 | 12:01 am
The first thing you notice when you arrive in Vietnam is the thousands of scooters on the roads, buzzing around the odd car. Source: Telegraph Business | 9 Jun 2008 | 12:01 am
Retailer Postie Plus Group is reporting a 7.5 per cent fall in third quarter sales to $29.5 million.
That took sales for the nine months to the end of April to $95.3m, down 1.75 per cent from $97m in the corresponding period a... Source: New Zealand Herald - Business | 9 Jun 2008 | 12:00 am
They have never shrugged off their seedy image, the patina of shame that
welcomes, if that is the right word, a customer every time that he or she
comes through the door, and for a while times have been tough for America's
pawnbrokers. Source: Latest Business News from Times Online | 8 Jun 2008 | 11:00 pm
The New Zealand dollar is down against the euro and yen but is holding its own with the Australian and United States dollars.
The greenback fell against the euro as an unexpected surge in the US jobless rate revived fears of a... Source: New Zealand Herald - Business | 8 Jun 2008 | 10:55 pm
The Brazilian government plans to use revenues from newly discovered oil fields to create a sovereign wealth fund containing as much as $200bn-$300bn in the next three to five years, Guido Mantega, finance minister, has told the Financial Times Source: FT.com - US homepage | 8 Jun 2008 | 10:32 pm
Banks and investment banks whose health is crucial to the global financial system should have a unified regulatory framework with capital and liquidity requirements, according to the president of the Federal Reserve Bank of New York. Source: FT.com - US homepage | 8 Jun 2008 | 10:32 pm
A dramatic imbalance between the funding patterns of US and European banks might be fuelling the continued tensions in money markets, new research by central bank officials has found. Source: FT.com - US homepage | 8 Jun 2008 | 10:32 pm
Home equity loans are rapidly emerging as the next front of the credit crunch, as falling house prices and lax underwriting lead to growing losses for US regional banks that have huge portfolios of such loans on their balance sheets. Source: FT.com - US homepage | 8 Jun 2008 | 10:32 pm
The New Zealand sharemarket has levelled out this afternoon after starting the week with a thud, in the first day of trading after United States equities plunged.
Shortly after the sharemarket opened today, the benchmark NZSX-50... Source: New Zealand Herald - Business | 8 Jun 2008 | 10:25 pm
When talking about Fonterra's overseas expansion, most newspaper inches are devoted to China and South America - a developing world where New Zealand's professional farming polish can work up a good profitable shine.
And yet the... Source: New Zealand Herald - Business | 8 Jun 2008 | 8:00 pm
SAN FRANCISCO - Antagonistic investor Carl Icahn became a billionaire by bullying already distressed companies, but his harassment of Yahoo could leave him with a black eye - and a hole in his wallet - if he's wrong about... Source: New Zealand Herald - Business | 8 Jun 2008 | 7:00 pm
AP - That economic rebound in the second half of the year so many experts have predicted including Federal Reserve Chairman Ben Bernanke himself is starting to look dicey.
The Elliots have been farming Lammermoor Station for the past three generations and want to see their children do the same.
Tired of being battered by the crippling fluctuations in prices for the fine wool, sheep meat and beef... Source: New Zealand Herald - Business | 8 Jun 2008 | 5:00 pm
Organisers are tipping farmers will open their wallets at this week's New Zealand National Agricultural Fieldays despite a tough season for many sectors.
Fieldays general manager Barry Quayle says overall the mood at the show will... Source: New Zealand Herald - Business | 8 Jun 2008 | 5:00 pm
Reuters - Pending sales of previously owned
U.S. homes unexpectedly rose in April to the highest level in
six months as foreclosed properties flooded the market and
drove prices sharply lower, a real estate trade group report on
Monday showed.
Reuters - The Dow Jones industrial average and
the S&P 500 index on Monday added to gains and the Nasdaq
trimmed its losses on a report showing pending home sales
unexpectedly rose in April.
Reuters - Lehman Brothers Holdings Inc
on Monday sold $6 billion of stock and convertible securities
to bolster its capital base as the company prepares to post a
$2.77 billion quarterly loss after trading and hedging losses.
Reuters - Corn prices rose to record highs on
Monday and looked set to climb further as torrential rains
threatened to reduce further U.S. crop prospects in a market
already facing tight supplies and surging demand.
Reuters - Oil prices are likely to hit $150
a barrel this summer season, the global head of commodities
research at Goldman Sachs said on Monday, as tighter
supplies outweigh weakening demand.
AP - That economic rebound in the second half of the year so many experts have predicted including Federal Reserve Chairman Ben Bernanke himself is starting to look dicey.