WASHINGTON (Reuters) - U.S. health care costs are likely to claim a bigger share of household spending in years to come, pressuring the government to absorb more health care costs, Federal Reserve Chairman Ben Bernanke said on Monday.
Japanese car maker Honda begins the first commercial production of a hydrogen fuel-cell powered vehicle. Source: BBC News | Business | World Edition | 16 Jun 2008 | 2:15 pm
NEW YORK (Reuters) - Sirius Satellite Radio's planned acquisition of rival XM Satellite Radio Holdings Inc appeared on Monday to draw closer to consummation after a key U.S. regulator expressed support for the 16-month-old deal, driving up both companies' shares.
NEW YORK (MarketWatch) -- Gold futures rallied more than 2% Monday, as weakness in the U.S. dollar and surging oil prices boosted demand for the precious metal.
Financial stocks tilt lower as American International Group replaces its CEO but Lehman Bros. makes early gains in the wake of its second-quarter financial results.
UK High Street clothing firm Primark fires three Indian suppliers because they used child labour to finish goods. Source: BBC News | Business | World Edition | 16 Jun 2008 | 1:53 pm
NEW YORK (MarketWatch) -- U.S. stocks head lower as crude-oil futures hit another record high and a gauge of manufacturing in the New York region drops unexpectedly, while Lehman Brothers Holdings Inc. posts its first loss as a public company.
Shares in U.K. hedge fund manager BlueBay Asset Management slumped around 20% Monday after the group warned a sharp decline in performance fees means it will miss earnings expectations.
NEW YORK (MarketWatch) - Lehman Bros. Holdings Inc said write-downs on soured debt securities and bad trading results led to a loss of $2.8 billion, or $5.14 a share, the Wall Street firm's first quarterly deficit since it went public in 1994.
Reuters - Stocks opened lower on Monday after
oil prices surged to a record near $140 a barrel and a report
showed New York state manufacturing contracted more than
expected.
NEW YORK (Reuters) - Stocks opened lower on Monday after oil prices surged to a record near $140 a barrel and a report showed New York state manufacturing contracted more than expected.
LONDON (Reuters) - Corn prices surged to a record high on Monday and looked set to climb further as widespread flooding in a key producing region, the U.S. Midwest, helped to heighten concern about tight supplies, dealers said.
A measure of manufacturing in New York State fell in June for the second consecutive month, according to a report by the Federal Reserve Bank of New York.
Reuters - Investment bank Lehman Brothers
Holdings Inc posted a quarterly loss of $2.8 billion on
Monday, matching its forecast, after recording massive trading
and hedging losses.
NEW YORK (Reuters) - Investment bank Lehman Brothers Holdings Inc posted a quarterly loss of $2.8 billion on Monday, matching its forecast, after recording massive trading and hedging losses.
Boardwalk Pipeline Partners LP (NYSE:BWP) announced that it has signed a 10-year binding agreement with Chesapeake Energy (NYSE:CHK) for natural gas transportation on Boardwalk's new Fayetteville Lateral pipeline. The pipeline is expected to begin operations in the third quarter and reach its phase-one capacity of 800 million cf/d during the first quarter of 2009. Full capacity of 1.3 billion cf/d is expected in 2010. Originally targeted at a capacity of 1.2 billion cf/d, the deal with Chesapeake will require additional compression facilities and further approval from the FERC. Boardwalk stock dropped more than $3.00 last week after its follow-on offering...
AP - As the American economy slowed to a crawl and stockholders watched their money evaporate, CEO pay still chugged to yet more dizzying heights last year, an Associated Press analysis shows. Source: Yahoo! News: Business | 16 Jun 2008 | 1:34 pm
The Wall Street bank said it was taking steps to restore its 'credibility' as it reported its first loss since going public in 1994, largely in line with its earlier warning Source: FT.com - US homepage | 16 Jun 2008 | 1:34 pm
Oil prices hit a record $139.89 a barrel in trade in New York, despite a Saudi pledge to increase output. Source: BBC News | Business | World Edition | 16 Jun 2008 | 1:30 pm
A surge in the price of oil to a fresh record high and a downbeat manufacturing survey from the New York state bank weighed on the outlook for the opening Source: FT.com - US homepage | 16 Jun 2008 | 1:29 pm
Wall Street stocks were set for a lower start on Monday as investors digested news that AIG's had replaced its chief executive and a survey that showed manufacturing activity in New York State contracted... Source: Infocious RSS raw feed - channel BNPaperBusiness | 16 Jun 2008 | 1:29 pm
LONDON (Reuters) - Oil surged to a new record high on Monday of nearly $140 a barrel, propelled by weakness in the U.S. dollar which offset the bearish impact of plans by Saudi Arabia to boost output.
McClatchy posted disastrous advertising revenue numbers for May. Total ad sales at the company fell 16.6%. Total revenue was down.15.1%. With the top line falling that fast, it is hard to say how long the company can last as an independent entity. Online advertising was up a modest 12.9%, not nearly enough to offset disappearing print revenue. Total classified advertising fell 27.4%. McClatchy also announced that it would cut 10% of its workforce, roughly 1,400 employees. By some miracle, McClatchy CEO Gary Pruitt will keep his job. He made the comment that "We have been transitioning steadily and successfully from...
WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke does not intend to raise interest rates because he is more worried about soaring oil prices slowing global growth than he is about their firing inflation, the Washington Post said on Monday.
Light, sweet crude for July delivery hit a trading record of $139.89 a barrel on Monday on the New York Mercantile Exchange, a dramatic surge analysts attributed to the weakening dollar. Source: Infocious RSS raw feed - channel BNPaperBusiness | 16 Jun 2008 | 1:17 pm
McClatchy says it will cut 10 percent of its workforce in a move to save $70 million a year as the newspaper publisher continues to struggle to attract advertising dollars. Sacramento, Source: Infocious RSS raw feed - channel BNewsBusiness | 16 Jun 2008 | 1:15 pm
McClatchy says it will cut 10 percent of its workforce in a move to save $70 million a year as the newspaper publisher continues to struggle to attract advertising dollars. Sacramento, Source: Infocious RSS raw feed - channel BNewsBusiness | 16 Jun 2008 | 1:15 pm
Landry's Restaurants, Inc. (NYSE: LNY) has announced that it has entered into a definitive agreement with Fertitta Holdings, Inc. Fertitta has agreed to acquire all outstanding common stock for $21.00 per share in cash. This represents a premium of approximately 37% over the closing share price of the Company's common stock on April 3, 2008. This was the last day before disclosure of the revised offer made by Mr. Fertitta to acquire the company. The total value of the transaction is approximately $1.3 billion, which includes approximately $885.0 million of debt. Fertitta is a newly formed entity wholly owned by...
Crude oil prices jumped to a new record of $139.89 a barrel as hopes that a plan by the Saudi government to increase daily production would reduce prices was overshadowed by fresh dollar weakness and a production outage in the North Sea Source: FT.com - US homepage | 16 Jun 2008 | 1:14 pm
NEW YORK (Reuters) - A gauge of manufacturing in New York state contracted in June for the fourth time in five months, the New York Federal Reserve said in a report on Monday that also painted a mixed picture on inflation.
The United States and South Korea said Monday that high-level talks meant to resolve a crisis in Seoul over renewing imports of American beef would continue. The announcement of more... Source: Infocious RSS raw feed - channel BNewsBusiness | 16 Jun 2008 | 1:07 pm
U.S. stocks headed for a lower opening Monday after a decline in regional manufacturing and rising oil prices stirred fresh concerns about the health of the economy. Light, sweet crude Source: Infocious RSS raw feed - channel BNewsBusiness | 16 Jun 2008 | 1:07 pm
Oil futures are hitting a new milestone near $140 a barrel, a dramatic surge analysts attributed to the weakening dollar. Light, sweet crude for July delivery rose to a trading record... Source: Infocious RSS raw feed - channel BNewsBusiness | 16 Jun 2008 | 1:07 pm
Oil prices rose to record levels close to $140 a barrel as traders brushed aside reports that Saudi Arabia's plans to boost production to bring down crude from record levels and to ease political pressure... Source: Infocious RSS raw feed - channel BNPaperBusiness | 16 Jun 2008 | 1:03 pm
Introduces Exclusive Suite of Checking, Check Cards and Credit Card Products AUSTIN, Texas, June 16 /PRNewswire/ -- In response to fans' deep-rooted passion for... Source: Infocious RSS raw feed - channel BNewsBusiness | 16 Jun 2008 | 1:03 pm
Lehman Brothers Holdings Inc. posted a nearly $3 billion loss Monday, after the nation's fourth-largest investment bank was hurt by wrong- way hedging and trading positions. The... Source: Infocious RSS raw feed - channel BNewsBusiness | 16 Jun 2008 | 1:02 pm
Lehman Brothers says it recorded a second-quarter loss of $2.8 billion, as the nation's fourth-largest investment bank suffered from wrong-way hedging and trading positions. The... Source: Infocious RSS raw feed - channel BNewsBusiness | 16 Jun 2008 | 1:00 pm
ATLANTA, June 16 /PRNewswire-FirstCall/ -- Global Payments Inc. (NYSE: GPN), a world leader in electronic transaction processing services, announced today that United... Source: Infocious RSS raw feed - channel BNewsBusiness | 16 Jun 2008 | 1:00 pm
Talks to try to end the Shell fuel tanker drivers' row are taking place, as fuel supplies come under pressure. Source: BBC News | Business | World Edition | 16 Jun 2008 | 12:58 pm
Shares of Barclays on Monday surged after the UK's third largest bank confirmed that it has an equity issue "under active consideration", but said that all options to improve its capital ratio were still... Source: Infocious RSS raw feed - channel BNPaperBusiness | 16 Jun 2008 | 12:51 pm
Shares in the UK bank surged as it confirmed that all options to improve its capital ratio were being considered and said that group profit before tax in May was 'well ahead of the monthly run rate for 2007' Source: FT.com - US homepage | 16 Jun 2008 | 12:51 pm
Reuters - Dissident Yahoo Inc
investor Eric Jackson on Monday urged fellow shareholders to
vote for a board comprising five existing directors and four
nominees from billionaire investor Carl Icahn's slate.
SAN FRANCISCO (Reuters) - Dissident Yahoo Inc investor Eric Jackson on Monday urged fellow shareholders to vote for a board comprising five existing directors and four nominees from billionaire investor Carl Icahn's slate.
Shares in BlueBay Asset Management, the London-based hedge fund, tumbled by as
much as 19 per cent this morning after its management warned that its
full-year pre-tax profit will be lower than previous forecasts. Source: Latest Business News from Times Online | 16 Jun 2008 | 12:47 pm
Corn prices rose to an all-time high today as flooding in the US, the world’s
biggest exporter of the grain, hit crops, fuelling concerns over the rising
cost of food. Source: Latest Business News from Times Online | 16 Jun 2008 | 12:33 pm
Lehman Brothers' second quarter was indeed ugly, but there were no new surprises from the preliminary results announced last week.
The battle for the firm is trying to persuade Wall Street that Lehman can win back its credibility and that its chief executive, Richard Fuld, is the man to do that.
Fuld acknowledged as much, saying in the earnings release that "We have begun to take the necessary steps to restore the credibility of our great franchise and ensure that this quarter's unacceptable performance is not repeated."
If that mission fails, then what?
Rob Cox and Antony Currie on Breakingviews.com over the weekend said that Lehman should start thinking about life after Fuld. But such a transition would be very difficult. "That's partly because it's not clear who from its ranks could fill Fuld's wing tips. Much of the firm's success derives from an almost cabal-like culture that, while successful at adopting and integrating recruits from elsewhere on Wall Street, is a product of Fuld's management style."
For the quarter, Lehman recorded a loss of $2.8 billion, or $5.14 per share, compared with $1.27 billion, or $2.21 per share, in the quarter a year ago. It was Lehman's first quarterly loss as a public company since it was spun off from American Express in 1994.
Lehman is also raising an additional $6 billion in new capital to help shore up its balance sheet.
After the ouster on Thursday of chief operating officer Joseph Gregory and chief financial officer Erin Callan, Lehman was finally able to halt a slide in its stock, which has plunged this year. On Friday, the shares rose 14 percent.
South Korean construction workers join truck drivers in their strike, the latest sign of unrest over the rising cost of fuel in Asia. Source: BBC News | Business | World Edition | 16 Jun 2008 | 12:28 pm
European shares trod water on Monday morning, as food groups fell on a UBS downgrade sending major European food producers south. The benchmark pan-European FTSE Eurofirst 300 index edged lower at 1,265... Source: Infocious RSS raw feed - channel BNPaperBusiness | 16 Jun 2008 | 12:19 pm
European shares trod water on Monday morning, as food groups fell on a UBS downgrade sending major European food producers south. The benchmark pan-European FTSE Eurofirst 300 index edged lower at 1,265... Source: Infocious RSS raw feed - channel BNPaperBusiness | 16 Jun 2008 | 12:19 pm
The war of words between BP and its Russian partners reached a crescendo today
as Mikhail Fridman accused the UK oil giant's chairman, Peter Sutherland, of
using Nazi tactics and "Goebbels propaganda". Source: Latest Business News from Times Online | 16 Jun 2008 | 12:13 pm
NEW YORK (Reuters) - The world's biggest insurer, American International Group Inc, replaced CEO Martin Sullivan on Sunday after it suffered two quarters of record losses from risky mortgage bets and its share price more than halved over the past year.
MOSCOW, June 16 - Suleiman Kerimov, Russia's eighth-richest man, sold 68 per cent of precious metals miner Polymetal in a $2bn deal transferring ownership to two Russian businessmen and Czech investment... Source: Infocious RSS raw feed - channel BNPaperBusiness | 16 Jun 2008 | 12:02 pm
Inflation in the eurozone has a climbed to a record level of 3.7% in May amid higher food and fuel costs, figures show. Source: BBC News | Business | World Edition | 16 Jun 2008 | 11:58 am
The South Korean economy could grind to a halt over the coming days amid calls
for a series of crippling “domino strikes” aimed at closing down the
country’s biggest industries. Source: Latest Business News from Times Online | 16 Jun 2008 | 11:45 am
Clean Diesel Technologies, Inc. (Nasdaq:CDTI) has announced a strategic license agreement with Hilite International, Inc., a supplier of automotive powertrain components headquartered in Cleveland. The company also has design and manufacturing facilities in North America, Europe and Asia. This agreement is a worldwide, non-exclusive agreement which enables Hilite to license Clean Diesel's ARIS airless injection technology for selective catalytic reduction control of vehicle oxides of nitrogen emissions in global original equipment manufacturer markets. Hilite chose to incorporate Clean Diesel's SCR and EGR-SCR technologies into its own portfolio of SCR technologies to enable their customers to optimize fuel efficiency while minimizing...
Reuters - Corn prices surged to a record high on
Monday and looked set to climb further as widespread flooding
in a key producing region, the U.S. Midwest, helped to heighten
concern about tight supplies, dealers said.
The collapses of two Bear Stearns hedge funds last year were the first crashes in the credit crisis' yearlong slow-motion highway pileup. The funds, which at one point had more than $20 billion in assets, largely securities that were tied to mortgages, lost its investors $1.6 billion.
After a long investigation, federal prosecutors in the Brooklyn are now close to seeking indictments in their investigation of the funds' collapse, Kate Kelly of the Wall Street Journalreports.
According to lawyers with interest in the case, the former managers of the fund, Ralph Cioffi and Matthew Tannin, could be charged with securities fraud within the next week, Kelly reports.
The investigation by the U.S. attorney's office in Brooklyn is part of a nationwide effort by the Justice Department, F.B.I., and Internal Revenue Service into whether crimes were committed when the subprime-mortgage market collapsed.
One of the main fronts of the inquiry is disclosure and whether there was any intentional deception along the food chain in the selling and securitizing of mortgages and in investments tied to those securities.
In the case of the Bear funds, their implosion came weeks after their managers had given an upbeat outlook.
But it is hard to see how the managers' rose-tinted glasses, or even incompetence, can be criminal, absent evidence of tampering with investors' funds. That hedge funds take big risks and can blow up should be no surprise to anyone. There were no criminal investigations into Amaranth Advisors and Long-Term Capital Management.
And as the collapse of Bear Stearns itself showed, a slowness to react to the credit crisis was not limited to just its hedge fund managers. (For a narrative on how Bear collapsed in March, click here.)
So the criminal inquiry may be one-upmanship by federal prosecutors, trying to be the first with a headline-generating big case.
Yves Smith of Naked Capitalism says for that reason, it should be Bear (now part of J.P. Morgan Chase) that should be investigated:
"Never attribute to malice that which can be explained by incompetence. Although the details may prove otherwise, I find it plausible that Cioffi and Tannin were slow to recognize that subprime was terminal, and Bear did an incompetent job of supervising them. And if that's the case, it's Bear, and not the two managers, who should be the focus of the investigation."
These are ten of the analyst calls we are focusing on early this Monday morning: AGCO Corp. (NYSE: AG) Raised to Outperform from Market Perform at Wachovia. AT&T (NYSE: T) & Verizon (NYSE: VZ) Cut to Neutral from Buy at UBS. GameStop (NYSE: GME) Raised to Neutral from Sell at Goldman Sachs. General Electric (NYSE: GE) Cut to Neutral from Outperform at JPMorgan. Invitrogen (NASDAQ: IVGN) cut to Neutral from Buy at Banc of America. Pilgrims Pride (NYSE: PPC) Cut to Neutral from Outperform at Credit Suisse. SanDisk (NASDAQ: SNDK) Raised to Market Perform from Underperform at JMP Securities. SunPower...
Majestic Wine admitted today that the price of wine is set to rise by a
further 10 per cent this year after the strength of the euro has added as
much as £1 to a standard bottle in recent weeks. Source: Latest Business News from Times Online | 16 Jun 2008 | 11:27 am
Eurozone inflation has been revised up to the highest level for 16 years and a European Central Bank official has warned that rising wage costs could add increasingly to the pressures created by soaring oil prices Source: FT.com - US homepage | 16 Jun 2008 | 11:06 am
London equities were steady on Monday, with banking stocks higher after Barclays confirmed it was considering plans to raise funds from existing investors.The FTSE 100 was flat at 5,804.2 during the first... Source: Infocious RSS raw feed - channel BNPaperBusiness | 16 Jun 2008 | 11:04 am
London's iconic black cabs will soon look a little different after it was announced that a new eco-friendly model will be hitting the capital's roads this summer. Source: Telegraph Business | 16 Jun 2008 | 11:02 am
London's iconic black cabs will soon look a little different after it was announced that a new eco-friendly model will be hitting the capital's roads this summer. Source: Infocious RSS raw feed - channel BNPaperBusiness | 16 Jun 2008 | 11:02 am
Banking group Barclays says it is "actively considering" selling shares to investors to raise cash. Source: BBC News | Business | World Edition | 16 Jun 2008 | 10:54 am
Primark, the cut price clothing chain, has dumped three of its Indian
suppliers after discovering that the companies have been using child labour
to finish clothes sold on high streets across the UK. Source: Latest Business News from Times Online | 16 Jun 2008 | 10:26 am
Deutsche Telekom (DT) is set to sell the new Apple (AAPL) iPhone for $1.54 to push demand. The sale will come with a large subscriber commitment to monthly use and an equally large bill. The sell-off in Apple shares on Friday was their third down day in a row. The CEO of Google (GOOG), Eric Schmidt, said that competition between the search engine company and Apple would not force him to quit Steve Jobs' board of directors. Reuters writes that AT&T (T) may have given up too much in its new 3G iPhone deal with Apple because it will be...
A Malaysian palm oil firm is to begin growing rice to tackle shortages of the crop and help meet record demand. Source: BBC News | Business | World Edition | 16 Jun 2008 | 10:20 am
Nationwide Building Society, the UK's second largest mortgage lender, today
signalled that the mortgage squeeze is far from over as it ramped up rates
yet again by up to half a percentage point. Source: Latest Business News from Times Online | 16 Jun 2008 | 10:17 am
IBM (IBM) is doing something important and will probably make money at it to boot. According to The Wall Street Journal, "Tokyo Ohka Kogyo Co. will work with IBM to develop processes and equipment for the production of thin-film photovoltaic solar cells that convert sunlight into electricity." The thin-film technology is cheaper to produce and should sell for much less that current technology. That means that the price point for solar energy will come down and its ability to compete with oil product like gas will improve markedly. Good for them. "IBM, We Bring Good Things To Living, We Bring...
China has shrugged off the global economic downturn to report rapidly growing
industrial-production output on the back of rising exports. Source: Latest Business News from Times Online | 16 Jun 2008 | 10:11 am
Cisco (CSCO) sees an explosion of online video use. Most analysts think that this has already happened, but the router company says otherwise. Since they make their money from hardware which manages much of the internet, the prediction may be self-serving. According to The Wall Street Journal, Cisco "is projecting a sixfold jump in Internet traffic between 2007 and 2012, as online video becomes the biggest driver of global data communications." The prediction is flawed in several respects. First among them is that YouTube and its video-sharing peers are not growing as fast as they once were. Watching user-created content...
Sony (SNE) is about to launch it new "Angel of Death" program online. It hopes the trick will get people to buy the DVD of the show down the road. Content companies now release this kind of programming without putting it on to TV or into theaters. The "junk" content makes more money that way. It is cheap to produce and would not hold up the the tastes of people who go to the movies to see "Shrek III". The launch has one flaw, and perhaps a fatal one. According to The Wall Street Journal, "The series will be released...
Martin Sullivan, the CEO of AIG (AIG), was sent to the guillotine yesterday. The beheading of financial company chiefs is now so commonplace that crowds don't even gather anymore to witness the practice. As the media points out, Sullivan worked at the insurance company since he was 17 years old. That gave him three decades to absorb the firm's culture and learn its complexities. Sullivan was a convenient dupe. He will be replace by Robert Willumstad, who has been AIG's chairman and used to work at high levels at Citigroup (C). The knock against Sullivan is that he and his...
Shares in Barclays rose almost 12pc this morning after it admitted that it was looking at options to raise cash, ending weeks of speculation that it would make such a move in the wake of the credit crisis.. Source: Telegraph Business | 16 Jun 2008 | 8:40 am
A new report largely ducks from naming and shaming countries both in the West and Africa, the BBC's Martin Plaut says. Source: BBC News | Business | World Edition | 16 Jun 2008 | 8:26 am
Barclays said this morning that it was "actively" looking at options to raise new capital, after weeks of speculation that it would act to shore up its balance sheet in the wake of the credit crisis.. Source: Telegraph Business | 16 Jun 2008 | 7:50 am
Barclays, the UK bank, confirmed today that it is seeking to raise what is
understood to be up to £4 billion through a rights issue, which would
underwritten by some of the world's biggest sovereign wealth funds. Source: Latest Business News from Times Online | 16 Jun 2008 | 7:20 am
SCS Upholstery, the beleaguered furniture chain, has appointed Ernst & Young's corporate finance team on a financial restructure as it looks to raise cash to safeguard its future. Source: Telegraph Business | 16 Jun 2008 | 7:20 am
AIG replaced Martin Sullivan, its embattled chief executive, with Bob Willumstad, the veteran banker who is the insurer's chairman, in an effort to put an end to one of the worst crises in the company's 89-year history Source: FT.com - US homepage | 16 Jun 2008 | 6:53 am
Insurer American International Group, reeling from record losses, fires its chief executive Martin Sullivan. Source: BBC News | Business | World Edition | 16 Jun 2008 | 6:01 am
The New Zealand dollar remained steady today after a disappointing weekend for currencies .
The kiwi dollar traded quietly and closed virtually unchanged at US75.06c compared to Friday's close of US75.02c.
Over the weekend the... Source: New Zealand Herald - Business | 16 Jun 2008 | 5:43 am
Reuters - The world's biggest insurer, American
International Group Inc , replaced CEO Martin Sullivan
on Sunday after it suffered two quarters of record losses from
risky mortgage bets and its share price more than halved over
the past year.
Vector will be able to go shopping once it sells its Wellington lines network, but there's no obvious target on the list, shareholders have been told.
At a special meeting called to approve the $785 million sale to Hong Kong's... Source: New Zealand Herald - Business | 16 Jun 2008 | 3:00 am
Babcock & Brown Ltd, the Australian investment firm which lost half its value last week on debt concerns, said on Monday that a market capitalisation clause in its debt facility did not constitute breach of covenant.
Last week,... Source: New Zealand Herald - Business | 16 Jun 2008 | 2:00 am
The New Zealand sharemarket made a solid start to the week, after getting close to lows hit two years ago on Friday.
Helping the market up today were gains by leading companies Contact Energy and Fletcher Building.
Fletchers... Source: New Zealand Herald - Business | 16 Jun 2008 | 1:14 am
Barclays could this week reveal that it has raised about £4bn in fresh capital from a group of sovereign wealth funds as it becomes the latest UK bank to tap investors in the wake of the global credit crisis. Source: Telegraph Business | 16 Jun 2008 | 12:01 am
Bank of England Governor Mervyn King may have to write four letters of explanation to the Chancellor as the inflation rate stays well above target into 2009, Britain's biggest business lobby group warned, as it slashed its forecast for UK economic growth. Source: Telegraph Business | 16 Jun 2008 | 12:01 am
Rising food, gas, electricity and petrol bills are forcing pensioners to put off their retirement or consider going back to work, according to a new survey. Source: Telegraph Business | 16 Jun 2008 | 12:01 am
Rio Tinto will today unveil a $370m (£190m) investment in driverless trains as the company details its plans to boost production at its Australian iron ore operations by almost 50pc. Source: Telegraph Business | 16 Jun 2008 | 12:01 am
Roger Parry is bored with the big boys and finds turning around a tiddler such as Media Square more rewarding Source: Telegraph Business | 16 Jun 2008 | 12:01 am
A usual spring lift in United States market conditions has not eventuated this year, wood products company Tenon says.
In fact, a longer winter and late spring arrival had exacerbated the expected difficult housing market conditions.
The... Source: New Zealand Herald - Business | 16 Jun 2008 | 12:00 am
With the 400-megawatt Otahuhu B power station back in service and recent rain over the southern hydro lake catchments, spot electricity prices avoided a spike up in the past week.
The daily average electricity spot market price... Source: New Zealand Herald - Business | 15 Jun 2008 | 11:00 pm
HBOS was under pressure from shareholders last night to provide more details
about its exposure to struggling British housebuilders after a company that
formed one of the bank’s big investments called in restructuring experts. Source: Latest Business News from Times Online | 15 Jun 2008 | 11:00 pm
Brussels is to unveil 'targeted regulatory measures' for credit rating agencies operating in Europe over the next few months in response to anger over their role in promoting the sale of complex structured investments Source: FT.com - US homepage | 15 Jun 2008 | 9:33 pm
Investors who backed US financial companies' drive to raise much-needed capital are sitting on nearly $10bn in paper losses amid a continued slump in the sector's shares Source: FT.com - US homepage | 15 Jun 2008 | 9:32 pm
New Zealand's biggest commercial office company is responding to power supply concerns by encouraging its tenants to step up their energy savings.
AMP NZ Office Trust (ANZO) said non-essential lighting - such as facade and artwork... Source: New Zealand Herald - Business | 15 Jun 2008 | 9:30 pm
Collapsing banks and constricting credit markets have compelled many newly risk-averse investors to scurry for the sidelines. But not Eric Rosenfeld and his merry band of 50 angel investors in Portland, Oregon.
His Oregon Angel Fund recently raised about $2 million—more than twice as much as it did last year—and is eagerly scouting for promising young tech companies to invest in. "We see more checks being written, more companies being financed," said Rosenfeld, who is also a managing partner of Capybara Ventures, a Portland venture capital fund.
Rosenfeld and his fellow angels—private high net-worth individuals who fund start-ups and small companies—are hardly alone. Despite limits on their ability to cash out their investments—a downturn in initial stock sales, tighter credit at banks, and a decline in mergers and acquisitions—many angels say they are still willing to invest.
The Angel Capital Association recently surveyed 145 angel group leaders to ask whether they believed the number of investments and amount of funding would increase this year; nearly 55 percent of respondents said yes.
Speaking for themselves, association members said the number was even higher. About 81 percent said their group intended to invest in three to nine companies this year, compared with 77.5 percent the year before. A full 12 percent said they planned to make 10 or more investments in 2008, almost double the number in 2007.
What's more, the total being invested by the estimated 258,000 angel investors in the country is growing, albeit at a slower pace. The number grew 1.8 percent, to $26 billion in 2007, according to the Center for Venture Research in Durham, New Hampshire. And the number of entrepreneurial ventures that received funding in 2007 went up 12 percent, to 57,120.
Those figures, of course, were from before the recent credit crunch. There is no data for 2008, but Jeffrey Sohl, director of the Center for Venture Research, said the amount of angel money invested this year should be comparable to 2007.
At the same time, angels are also treading more carefully—asking tougher questions, choosing later-stage companies, or investing smaller amounts. And they're more likely to invest in businesses and industries with track records of success.
Still, becoming an angel remains an attractive alternative for many wealthy investors, particularly because the usual alternative investments, like stocks and bonds, are less welcoming these days. And many angels say that they still see plenty of investing going on.
John May, managing director of the New Vantage Group, a Vienna, Virginia, firm that runs several angel groups, for example, said that deal size at his organizations is the same or bigger than in the past—and members are itching for more opportunities.
Take James Hunt. A member of Active Angel, one of May's groups, Hunt already has stakes in about 12 companies, and plans to invest "less than $100,000" in another five or so companies this year.
Ian Sobieski, managing director of the investment group Band of Angels, in Menlo Park, California, said he generally makes one to two investments a year and expects to do the same in 2008. Band members put money in 12 to 14 new companies in each of the past four years.
In some cases, angels say they're investing because they haven't taken much of a hit or don't have their cash tied up in previous deals. In others, they're looking for alternative places to put their money.
"The stock market isn't that attractive. Real estate isn't that attractive. Bonds aren't that attractive," says Rosenfeld. "Angel investing offers people a different option."
They also tend to take modest positions. Sobieski said that most angels only invest a tiny part of their total portfolio—no more than 5 percent—in new ventures.
Many angels also get a boost from organized angel funds like Rosenfeld's. His two-year-old enterprise pools $25,000 to $50,000 contributions from members and invests in about four companies each year.
Other groups, like Active Angel, also aggregate money from members, but investors are allowed to opt out of investments they don't like.
In either case, there's safety in numbers, since fellow angels help with due diligence on companies and tend to seat one of their own on the board. "I know there are extremely competent investors who are watching out for my interests," says Hunt.
While not new, spreading the risk through pools also encourages more angels to stay in the hunt for the next big thing in parlous times like these. Many, of course, are doing so more cautiously than before. Average total deal size in 2007 dropped to $450,000 from $500,000 in 2006, according to the Center for Venture Research.
They're also most likely to invest in what they consider to be "surefire" areas, including green technology, and Web 2.0 applications like social networking sites.
In addition, safer, established businesses are attracting more interest, especially those run by founders with previous entrepreneurial success.
Dave Nelsen, C.E.O. of TalkShoe, a three-year-old business that allows social network users to talk online, raised more than $400,000 in March from two angel groups. His background in starting, running, and selling CoManage, a telecommunications business, helped to open doors. "I had a track record for building a company and raising money, and that's what really helped us," he says.
When angels do look at start-ups, they are raising their standards. Former Google executive David Scacco, for example, invested in 10 firms and said he expects to do about the same in 2008—with a difference. "I'm holding them to a higher bar," he says.
That means considering only businesses with at least a working prototype or, in the case of Web enterprises, those that can show increases in the number of users.
Recently, for example, Scacco said he turned down a suitor with what he considered to be an interesting social networking application, because it wasn't up and running; as recently as last year, Scacco added, he wouldn't have been deterred by the fact the service hadn't launched yet.
Scacco said he also spends more time questioning companies, meeting three or four times with managers over a period of three or four weeks, compared with the two or so get-togethers he held before. And he conducts more of his own market research.
It also helps if a business already has a prominent backer. Early this year, Gregg Smith, C.E.O. of Acuity Mobile, a two-year-old company that provides marketing messages on cell phones, closed on a major round of funding.
While he can't reveal the total amount, 25 percent of it came from two angel groups and the rest from Navteq, a Chicago-based digital mapmaker. One angel group made its offer contingent on Navteq's public commitment. The other waited until after the deal was actually signed.
Ultimately, as financing for new ventures from private equity plummets, angels expect to be in an increasingly stronger bargaining position. Angels report asking for such favorable terms as additional equity if certain goals aren't met or more warrants to buy shares at a specified price.
It's not surprising, then, that a majority of angels anticipate that the quantity and quality of deals will increase this year, according to the Angel Capital Association. Says Greg Baszucki, an angel in Portola Valley, California, "If the market goes down, it will be great—a great opportunity."
That is, of course, as long as they choose the right companies.
Maybe Martin Sullivan, like the other big-name financial bosses that have been tossed into the mortgage market volcano, just wasn't tough enough.
Sullivan may have been an affable lifer at American International Group, which he joined at the tender age of 17, but like so many other C.E.O.'s, didn't ask the hard questions of underlings who led him into a credit default swap position that became a $20 billion sinkhole.
A few of them, former chief financial officer Steven Bensigner and financial products boss Joseph Cassano, paid with their jobs, but they left behind a staggering giant where morale is as frayed as the balance sheet.
Now Sullivan has paid with his as the A.I.G. board met Sunday and named Robert Willumstad C.E.O. after weeks of lobbying by dissident shareholders and angry directors such as Eli Broad.
Willumstad was C.O.O. and president at Citigroup and played a key role at its Travelers' division. Steven Bollenbach was named lead director.
The battle-hardened pair will be pressed to turn A.I.G. around as the real estate market and the prospects for financial firms remain shaky. The shares are down more than 50 percent in the past year, to a nearly 11-year low.
Sullivan enjoyed the fruits of the mortgage business. In 2006, the first full year after he took A.I.G.'s reins, the firm's profit hit $14 billion, while the financial products unit—the one responsible for the mortgage-derivatives business—saw a 47 percent increase in operating income, to $949 million, from the year before.
Sullivan didn't ask, or at least didn't ask hard enough, how those numbers were hit. After promising late last year that the company understood its exposure, all he delivered in 2008 was a string of large write-downs to A.I.G.'s credit-swap portfolio.
Maybe he was too busy worrying about the specter of his famous predecessor, Hank Greenberg. Ousted in 2005 amidst an Eliot Spitzer crusade and accounting scandal, Greenberg still sat atop Starr International, A.I.G.'s largest shareholder, and made a hobby of criticizing the firm's management at many levels. Last month, he said the company was "in crisis."
But Greenberg wasn't alone. In May, Broad, along with fund managers Shelby Davis and Bill Miller, said that "significant and immediate changes at both the management and board level are clearly called for."
Sullivan sparked the ire of investors when he began backtracking from a December meeting at which he told investors he was confident in how the firm managed its credit default swap holdings. By May, however, the firm had racked up $20 billion in write-downs on those derivative positions and is now being investigated by the Securities and Exchange Commission and the Department of Justice for overstating the value of its credit default swap contracts.
Like Chuck Prince at Citigroup, Sullivan's failing was that he was a mere functionary when a true visionary was needed—both to deal with Greenberg and to grasp and manage the complexities of the firm's balance sheet. As Felix Salmon pointed out last week, the best defense a Sullivan flak could muster up was the company had filed audited financial statements during his tenure.
Sullivan joins Citigroup chief Chuck Prince, Merrill Lynch boss E. Stanley O'Neal, Morgan Stanley president Zoe Cruz, and Lehman Brothers C.F.O. and C.O.O. Erin Callan and Joe Gregory as high-profile financial C.E.O.'s who have lost their jobs in the subprime-mortgage meltdown.
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Reuters - Stocks opened lower on Monday after
oil prices surged to a record near $140 a barrel and a report
showed New York state manufacturing contracted more than
expected.
Reuters - Investment bank Lehman Brothers
Holdings Inc posted a quarterly loss of $2.8 billion on
Monday, matching its forecast, after recording massive trading
and hedging losses.
Reuters - Dissident Yahoo Inc
investor Eric Jackson on Monday urged fellow shareholders to
vote for a board comprising five existing directors and four
nominees from billionaire investor Carl Icahn's slate.
Reuters - Corn prices surged to a record high on
Monday and looked set to climb further as widespread flooding
in a key producing region, the U.S. Midwest, helped to heighten
concern about tight supplies, dealers said.
Reuters - The world's biggest insurer, American
International Group Inc , replaced CEO Martin Sullivan
on Sunday after it suffered two quarters of record losses from
risky mortgage bets and its share price more than halved over
the past year.