America's central bank kept interest rates on hold last night for the first
time in almost a year, leaving its benchmark Federal Funds rate at 2 per
cent, and gave warning that inflation will continue to rise. Source: Latest Business News from Times Online | 26 Jun 2008 | 6:22 pm
U.S. stocks on Thursday started steeply lower, amid a negative tone set by Goldman Sachs Group Inc.’s downgrade of U.S. brokers and cautious outlooks from Research In Motion Ltd., Nike Inc. and Oracle Corp.
Today's selling does not look orderly like it has on many other down days this year. The drop is across almost every sector and most widely-traded shares. Much of it is out of proportion with the news. GM (GM) is off 11% today to $11.43. Anyone who watches the car industry much must have known that car sales would be bad this year. Gas is too high and consumer income is too low. The stock traded above $21 a month ago. GE (GE), one of the most admired companies in the world, is down 2% to $27.49, near its 52-week...
BOSTON (Reuters) - Oracle Corp shares fell as much as 4 percent on Thursday on concerns that the company's growth was slowing after the software maker issued a sales forecast that disappointed Wall Street.
BANGALORE (Reuters) - Citigroup Inc may suffer $8.9 billion of write-downs in the second quarter, resulting in a loss and possibly its second dividend cut this year, and investors should bet the largest U.S. bank's shares will fall, Goldman Sachs & Co said on Thursday.
Reuters - Stocks opened sharply lower on
Thursday, prompted by worries about heavy losses in the banking
sector and disappointing outlooks from technology companies
including Research In Motion .
NEW YORK (Reuters) - Stocks opened sharply lower on Thursday, prompted by worries about heavy losses in the banking sector and disappointing outlooks from technology companies including Research In Motion .
Discover Financial Services reports 12% growth in second-quarter profit, but the crediit-card issues also says it raised its cushion for loan losses as a result of ongoing turbulence in credit markets.
Stocks struggled Thursday morning after Goldman Sachs cut ratings on investment banks, two tech companies disappointed investors and oil prices jumped more than $3 a barrel.
Oracle Corp. posts a 27% increase in quarterly profit despite a sluggish U.S. economy, but the company's disappointing outlook for its current quarter sends shares lower.
Navios Maritime Acquisition Corporation (NYSE: NNA.U) has priced its IPO of 22,000,000 units at a price of $10.00 per unit for aggregate gross proceeds of $220,000,000. Each unit represents one share of common stock and one warrant to buy a share of stock at $7.00. J.P. Morgan and Deutsche Bank were the joint book-running managers and S. Goldman Advisors LLC acted as the co-manager for the IPO. If you check the filing dates and details we covered on this one, you might determine this was the fastest SPAC or Blank Check IPO in history. Navios Maritime Holdings Inc. (NYSE: NM)...
Uruguay says it may have found a natural gas field that would change it from an importer to an exporter of gas. Source: BBC News | Business | World Edition | 26 Jun 2008 | 1:37 pm
Dear Annie: I was hired a few months ago into the newly created position of vice president of customer service at a medium-sized company, and I have to admit I am stumped. Since I got here, every time I propose a change that I think would serve customers better (without costing much, if anything), my employees tell me, "We can't do that because it isn't in the rulebook."
Reuters - Citigroup Inc may suffer $8.9
billion of write-downs in the second quarter, resulting in a
loss and possibly its second dividend cut this year, and
investors should bet the largest U.S. bank's shares will fall,
Goldman Sachs & Co said on Thursday.
SEATTLE (Reuters) - Sensing the start of a personal computer revolution, Bill Gates dropped out of Harvard University in 1975 to start Microsoft Corp and pursue a vision of a computer on every desk and in every home.
NEW YORK (MarketWatch) -- Crude-oil futures rose nearly 3% Thursday, as weakness in the U.S. dollar and comments from OPEC's president bolstered energy prices.
(Reuters) - Goldman Sachs downgraded General Motors Corp to "sell" from "neutral," and added the stock to its "Americas Sell List," saying the main risks for the automaker included likely equity dilution, dividend cut and cash burn.
AP - The economy turned in a better but still subpar performance in the first three months of this year, mostly spurred by stronger sales of U.S. products overseas.
Oil rallied Thursday after the dollar failed to respond to a Federal Reserve decision to hold interest rates steady and a government report showed only a small improvement in the U.S. economy.
In what could mark the beginning of a hostile takeover attempt, Anheuser-Busch reportedly plans to reject InBev’s unsolicited $46 billion bid and instead offer up it own plan to boost its share price.
NEW YORK (MarketWatch) -- Shares of Research In Motion slide nearly 9% in premarket trading, a day after the wireless device maker signaled that future earnings may come under pressure as it ramps up spending to sustain its breakneck growth rate.
NEW YORK (MarketWatch) -- Shares of General Motors slid nearly 8% in premarket trading Thursday after the automaker's rating was downgraded at Goldman Sachs.
LONDON (MarketWatch) -- Bank of England Gov. Mervyn King on Thursday underlined the "balancing act" faced by the rate-setting Monetary Policy Committee as it weighs growing inflation pressures against signs of an economic downturn.
NEW YORK (Reuters) - Lennar Corp , the second-largest U.S. home builder, on Thursday reported a smaller quarterly net loss on lower expenses, but the results were worse than expected as deliveries and new orders tumbled.
Reuters - The economy grew slightly faster
than initially thought in the first quarter, while the job
market remained sluggish last week, according to U.S. data
released on Thursday.
WASHINGTON (Reuters) - The economy grew slightly faster than initially thought in the first quarter, while the job market remained sluggish last week, according to U.S. data released on Thursday.
Goldman Sachs said it lowered its rating on the U.S. broker industry because of continued deterioration of the banking industry and the prospect of a lengthy recovery.
If one ETF for covering the global trend towards wind power wasn't enough, we have the announcement of a second wind energy ETF. Invesco's (NYSE: IVZ) PowerShares Capital Management ETF unit has announced the anticipated listing of a global wind energy portfolio. The new ETF is PowerShares Global Wind Energy Portfolio will trade under the "PWND" stock ticker on NASDAQ. This ETF is based on the NASDAQ OMX Clean Edge Global Wind Energy Index that tracks manufacturers, developers, distributors, installers and users of energy derived from wind sources. Just on June 18 we ran a piece describing the The First...
Bets are running high that next week's report on June sales for the Big Three automakers will be horrible - down as much as 25%. Shares in General Motors and Ford have fallen sharply as the companies whack tens of thousands of pickups and SUVs out of their production schedules to keep inventories under control.
US stocks were set for a sharply lower start after a series of disappointing earnings results reignited fears that a mix of sluggish domestic growth and rising input costs are hurting corporate profits while analyst downgrades thumped the financial sector. Source: FT.com - US homepage | 26 Jun 2008 | 1:06 pm
Sequenom, Inc. (NASDAQ: SQNM) has priced its public secondary offering of 5,500,000 shares of common stock at a price of $15.50 per share, and underwriters have a 30-day option to purchase up to an additional 825,000 shares of common stock t cover over-allotments. Lehman Brothers and UBS Investment Bank were the joint book-running managers and co-managers for were listed as Leerink Swann, Lazard Capital Markets, Oppenheimer, and Rodman & Renshaw. All of the shares are being offered by Sequenom and the net proceeds from the offering are earmarked for the development of diagnostic tests for use on its MassARRAY system...
Mervyn King, Governor of the Bank of England, today attempted to calm
expectations of a sudden rush in interest rate rises as it emerged nearly
half of the Monetary Policy Committee admitted to discussing an increase in
borrowing costs. Source: Latest Business News from Times Online | 26 Jun 2008 | 12:58 pm
Discover says its profit in the second quarter rose 12 percent after the credit card company saw record volumes in its third-party payments business. The Riverwoods, Ill.-based company's Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Jun 2008 | 12:50 pm
New filings for unemployment benefits held steady last week but were still at a high level, pointing to a cooler jobs market. The Labor Department, in a new report Thursday, says new... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Jun 2008 | 12:50 pm
Wall Street is headed for a lower opening after the government issued a stronger-than-expected reading on first-quarter economic growth and said unemployment claims remained unchanged last... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Jun 2008 | 12:45 pm
WASHINGTON (Reuters) - The economy grew at an upwardly revised 1.0 percent annual rate in the first three months of 2008, helped by stronger consumer spending and exports, a Commerce... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Jun 2008 | 12:41 pm
The economy turned in a better _ but still subpar _ performance in the first three months of this year, mostly spurred by stronger sales of U.S. products overseas. The 1 percent... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Jun 2008 | 12:38 pm
The economy turned in a better _ but still subpar _ performance in the first three months of this year, mostly spurred by stronger sales of U.S. products overseas. The Commerce... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Jun 2008 | 12:34 pm
CHICAGO (Reuters) - ConAgra Foods Inc on Thursday posted higher quarterly profit, helped by results from the commodities trading and merchandising unit that it sold earlier this week.
- Fourth Mutual Fund Wholly Managed by Institutional Capital LLC - CHICAGO, June 26 /PRNewswire/ -- MainStay Investments, the retail distribution arm of New York Life Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Jun 2008 | 12:30 pm
- Bicycle parts and accessories company second largest in U.S. - PTI known for innovation and strong brands EXCHANGES TSX: DII.B, DII.A MONTREAL, June 26... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Jun 2008 | 12:30 pm
VANCOUVER, June 26 /PRNewswire-FirstCall/ - Luna Gold Corp. (TSXV-LGC) ("Luna" or the "Company") is pleased to announce assay results from the first ... Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Jun 2008 | 12:30 pm
Xinhua Finance Media Limited (NASDAQ: XFML) has been a troubled stock of late. The Chinese news agency has been plagued with problems, scandal, and controversy almost since day one after its IPO. The company has tried many new initiatives to stabilize the company and to alleviate concerns. Actions announced today may do more than anything else as these were insiders acquiring shares of stock in the company. Below is a brief summary: Ms. Bush (CEO) purchased 50,000 ADSs at an average price of $2.25 on 23 June, 2008. Mr. Olson (independent director) purchased 100,000 ADSs at an average price of...
Synchronoss Technologies, Inc. (NASDAQ: SNCR) has announced that its ConvergenceNow platform has been selected for the activation and lifecycle management of Time Warner Cable's (NYSEL TWC) triple play offering for online transactions. While financial terms weren't formally disclosed, Synchronoss will support the online activation and provisioning of triple play services for Voice, High-speed Internet and Video, as well as other offerings. If any company needed a new large customer it was Synchronoss. The company has been plagued of late by issues surrounding the iPhone sign-ups and others in a contracting industry. As of yesterday, shares were down more than 75%...
Harriet Harman sets out plans to allow firms to discriminate in favour of female and ethnic minority candidates. Source: BBC News | Business | World Edition | 26 Jun 2008 | 12:02 pm
Bank of England governor Mervyn King tells MPs he is confident inflation will fall to the government's 2% target. Source: BBC News | Business | World Edition | 26 Jun 2008 | 12:02 pm
These are ten of the individual analyst calls we are looking at from Wall Street this Thursday morning: Capstone Turbine Corp. (NASDAQ: CPST) started as Buy at Broadpoint Capital. Check Point Software (NASDAQ: CHKP) raised to Overweight at Lehman Brothers. Comp Vale Do Rio (NYSE: RIO) started as Overweight at Lehman Brothers. Corinthian Colleges (NASDAQ: COCO) Raised to Overweight from Equalweight at Lehman Brothers. Entergy (NYSE: ETR) Cut to Neutral from Buy at Banc Of America. General Motors (NYSE: GM) downgraded to Sell from Neutral at Goldman Sachs. Integrated Device Tech (NASDAQ: IDTI) Raised to Neutral from Underperform at Merrill...
Some of the City's most powerful institutional shareholders issued a withering
attack on Bradford & Bingley today over the mortgage bank's "unacceptable"
treatment of investors in its £400 million rescue capital-raising. Source: Latest Business News from Times Online | 26 Jun 2008 | 11:56 am
These are some of the calls in the financial sector that are impacting shares at major financial companies this Thursday morning: Barclays (NYSE: BCS) Raised to Overweight at Morgan Stanley. Citigroup (NYSE: C) downgraded to the CONVICTION SELL LIST at Goldman Sachs. City National (NYSE: CYN) Raised to Outperform at Keefe Bruyette & Woods. Goldman Sachs Group (NYSE: GS) Cut to Market Perform from Outperform at Wachovia. Jon C. Ogg June 26, 2008
Shares in Fortis plunged on Thursday after the Belgo-Dutch bancassurer outlined a combination of measures to strengthen its capital base by 8.3bn.The group is placing new shares worth 1.5bn at a price... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Jun 2008 | 11:46 am
The bank became the latest financial services group to raise fresh equity as it announced plans to raise €1.5bn through a share placing and scrapped its interim dividend amid 'challenging' conditions Source: FT.com - US homepage | 26 Jun 2008 | 11:46 am
Tesco, Britain's largest supermarket chain, was today accused of using slave
labour after an investigation found that an Indian textile factory the UK
company sources goods from pays staff just 16p an hour. Source: Latest Business News from Times Online | 26 Jun 2008 | 11:42 am
WASHINGTON (Reuters) - Federal Reserve Vice Chairman Donald Kohn said on Thursday that rising energy and food prices have hit headline inflation, but this has only seeped into inflation expectations by a little bit so far.
Tesco recalls a significant number of cans of beans and sausages amid fears that plastic could be found inside. Source: BBC News | Business | World Edition | 26 Jun 2008 | 11:34 am
Microsoft is pushing hard to stop Google from teaming up with Yahoo now that the software giant has given up on acquiring the tarnished Internet portal. But antitrust lawyers and technology analysts outside the case don't think Ballmer & Co. has much of a prayer at stopping the deal from going through.
Pyongyang submitted a long-overdue declaration of its plutonium-based nuclear programme, prompting the US to start removing North Korea from its list of state sponsors of terrorism Source: FT.com - US homepage | 26 Jun 2008 | 11:13 am
DSG International stoked fears about the depth of the consumer slowdown in the UK after revealing that profits last year were wiped out offering little in the way of comfort for this year's results.Banks... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Jun 2008 | 11:08 am
Shares in Regent Inns, the owner of pub chain Walkabout, plunged this morning after the group issued a profits warning and said that takeover talks are off. Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Jun 2008 | 11:05 am
Shares in Regent Inns, the owner of pub chain Walkabout, plunged this morning after the group issued a profits warning and said that takeover talks are off. Source: Telegraph Business | 26 Jun 2008 | 11:05 am
GCap, the commercial radio group behind Capital 95.8 and Classic FM, has been
fined a record £1.1 million by Ofcom, the media regulator, for manipulating
phone-in quizzes to stop prizes from being won too quickly. Source: Latest Business News from Times Online | 26 Jun 2008 | 10:57 am
The dollar came under pressure on Thursday as traders reacted to the Federal Reserve's comments following its decision to keep US interest rates on hold.Traders said the dollar lost ground since the statement... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Jun 2008 | 10:49 am
InBev moved to quash questions on Wednesday about whether it could raise funds for its ambitious $46bn (23bn) unsolicited takeover bid for rival brewer Anheuser-Busch even as it became increasingly likely... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Jun 2008 | 10:45 am
InBev moved to quash questions about whether it could raise funds for its ambitious $46bn unsolicited takeover bid for rival brewer Anheuser-Busch even as it became increasingly likely that the maker of Budweiser beer would reject the bid as too low Source: FT.com - US homepage | 26 Jun 2008 | 10:45 am
The Fed sat still yesterday. It could not decide which was worse, inflation or the slowing economy. It tried to play Solomon and offered to cut the baby in two. It did not see that the mother that wanted the child most was the bearer of inflation. The European Central Bank sees things differently. Among its members the consensus seems to be that inflation is the more troubling problem. According to the FT, "Jean-Claude Trichet, the president of the European Central Bank, earlier expressed fresh concern about inflation and wage growth, strengthening expectations that the ECB would raise its main...
Standard Chartered said on Thursday its first-half trading had been "very strong" but warned that the "economic horizon is increasingly uncertain". Peter Sands, chief executive of the emerging markets-focused... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Jun 2008 | 10:40 am
Reuters - Federal Reserve Vice Chairman Donald
Kohn said on Thursday that rising energy and food prices have
hit headline inflation, but this has only seeped into inflation
expectations by a little bit so far.
Three years ago, rating firms like Moody's were talking about the chances that one of the "Big Three" automakers might have to file Chapter 11. That seems like a long time ago. The cause for concern at that point was the cost base at domestic car companies. Employment, retirement, and pension expenses were way too high. Detroit did a good job of solving that problem. It has cut billions of dollars from operating costs by squeezing suppliers, operating more efficient plants, and firing tens of thousands of people. Its new UAW agreements allowed the companies to drop expenses further. The...
The London Stock Exchange unveiled a pan-European equities trading platform in a joint venture with Lehman Brothers to fight rivals that are eroding its market share Source: FT.com - US homepage | 26 Jun 2008 | 10:24 am
The London Stock Exchange on Thursday unveiled a new, pan-European equities trading platform in a joint venture with Lehman Brothers to fight rivals that are eroding its market share.The move is the first... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Jun 2008 | 10:24 am
Sony announces its strategy to make its television and video game operations profitable in the current year. Source: BBC News | Business | World Edition | 26 Jun 2008 | 10:13 am
European equity markets slid on Thursday as banks were hit by news that Belgian-Dutch lender Fortis was to shore up its finances with additional calls for cash from shareholders.By mid morning the FTSE... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Jun 2008 | 10:13 am
Sony on Thursday announced an aggressive sales push in big emerging markets, saying it would double revenues from the so-called BRICs countries Brazil, Russia, India and China to Y2,000bn in the next... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Jun 2008 | 9:48 am
Dutch-Belgian bank Fortis unveils plans to increase its solvency by 8bn euros ($12.5bn; £6.3bn). Source: BBC News | Business | World Edition | 26 Jun 2008 | 9:38 am
UniCredit, the Italian bank, on Thursday announced 9,000 job cuts in western Europe but presented what it called a two-tier business strategy for the next three years and forecast "dynamic growth" in central... Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Jun 2008 | 9:35 am
The Co-operative group, Britain’s largest mutual retailer, said today it will
give £38.1million to its customers under its dividend scheme – almost double
last year’s pay out - as profits soared 35 per cent. Source: Latest Business News from Times Online | 26 Jun 2008 | 9:21 am
Research in Motion, the maker of BlackBerry devices, saw its shares slide as much as 11pc in New York after its outlook paled in the face of Apple's latest iPhone. Source: Telegraph Business | 26 Jun 2008 | 9:20 am
Unicredit is to cut jobs in Western Europe as it expands in fast-growing east and central Europe. Source: BBC News | Business | World Edition | 26 Jun 2008 | 8:42 am
DSG International, owner of Currys and PC World, sees annual profits fall by 30% after a "challenging" year. Source: BBC News | Business | World Edition | 26 Jun 2008 | 8:08 am
Flat demand in its home market hits Nike shares, despite strong sales in the rest of the world. Source: BBC News | Business | World Edition | 26 Jun 2008 | 7:17 am
A meat firm supplying Tesco is accused of "Dickensian employment practices" by not paying staff for toilet breaks. Source: BBC News | Business | World Edition | 26 Jun 2008 | 7:12 am
DSG International, the owner of Currys and PC World, today revealed a £192.68
million full-year loss after the company was forced to spend £341.3 million
to restructure its flailing Italian business. Source: Latest Business News from Times Online | 26 Jun 2008 | 7:09 am
The Belgian-Dutch Bank Fortis said today it is accelerating its mammoth
fundraising plans raising an immediate €1.5 billion (£1.2 billion) and
scrapping its interim dividend this year. It said: “current exceptional
circumstances necessitate these exceptional measures”. Its shares fell 6.9
per cent in Brussels trading this morning. Source: Latest Business News from Times Online | 26 Jun 2008 | 6:51 am
The New Zealand dollar barely blinked today despite what was expected to be a horror current account deficit that printed even worse than anticipated.
The deficit of $2.16 billion for the March quarter compared to the median forecast... Source: New Zealand Herald - Business | 26 Jun 2008 | 5:39 am
PHILADELPHIA (Reuters) - Anheuser-Busch Cos Inc plans to reject InBev NV's unsolicited $46.3 billion takeover offer, saying it undervalues the company, a source familiar with the situation said on Wednesday.
Reuters - Anheuser-Busch Cos Inc
plans to reject InBev NV's unsolicited $46.3 billion
takeover offer, saying it undervalues the company, a source
familiar with the situation said on Wednesday.
A fall in the amount New Zealand earned on its investment abroad was the key factor behind a worse than expected current account performance in the March quarter.
Data published by Statistics New Zealand (SNZ) today show the current... Source: New Zealand Herald - Business | 26 Jun 2008 | 3:00 am
High level discussions have been held with a consortium of management and other parties about the potential sale of Strategic Finance, parent company Allco HIT says.
No formal agreements had been entered into. Further notification... Source: New Zealand Herald - Business | 26 Jun 2008 | 2:10 am
It's a truism in business that one man's loss is often another man's gain.
Whilst the subprime mortgage market has seen many casualties over the past twelve months, one noted American billionaire sees opportunity amongst the debris.
Warren... Source: New Zealand Herald - Business | 26 Jun 2008 | 12:40 am
The US Supreme Court slashed to $500m the $2.5bn punitive damages the Exxon Mobil Corporation had been ordered to pay for the 1989 Exxon Valdez disaster in Alaska – the worst oil spill in the nation's history Source: FT.com - US homepage | 26 Jun 2008 | 12:08 am
Three major lenders have put up their mortgage rates as the cost of fixed-rate deals continued to rise. Source: Telegraph Business | 26 Jun 2008 | 12:01 am
Marks & Spencer investors should vote against the appointment of Sir Stuart Rose as executive chairman at the group's general meeting next month, one of the UK's largest shareholder bodies has recommended Source: Telegraph Business | 26 Jun 2008 | 12:01 am
Troubled bank tight-lipped after talks break down over £400m rescue plan, agitating investors and prompting calls of foul play. Source: Telegraph Business | 26 Jun 2008 | 12:01 am
WS Atkins, Britain's biggest engineering consultancy, has reported a 31pc rise in annual profits despite being affected by the collapse of Metronet. Source: Telegraph Business | 26 Jun 2008 | 12:01 am
Motorists could see fuel prices rise to £1.47 a litre over the summer after a warning from the head of Opec that the cost of oil is to increase sharply to between $150 and $170 a barrel. Source: Telegraph Business | 26 Jun 2008 | 12:01 am
ILVA, the furniture retailer which lost £2.33 for every £1 spent in its stores last year, has collapsed into administration. Source: Telegraph Business | 26 Jun 2008 | 12:01 am
The Federal Reserve indicated growing fears about inflation relative to growth, but stopped short of saying that it saw inflation as the dominant risk Source: FT.com - US homepage | 25 Jun 2008 | 11:42 pm
A recovery in US software sales and a stronger performance from some of its newer businesses helped Oracle beat Wall Street expectations Source: FT.com - US homepage | 25 Jun 2008 | 11:25 pm
BP has been accused of secretly working with the Kremlin to force its Russian
joint venture partners in TNK-BP to sell their stake to Gazprom. Source: Latest Business News from Times Online | 25 Jun 2008 | 11:00 pm
A senior Scottish banker - it may even have been Sir Fred Goodwin, of Royal
Bank of Scotland - once said that it was important not to panic, but if you
were going to panic, make sure you are the first to do so. Sir Fred
certainly seems to have taken the advice. The RBS rights issue is well into
the open sea. HBOS and Bradford & Bingley are still on the slipway. Any
attempt at a rights issue by Barclays was probably never going to be
seaworthy. Source: Latest Business News from Times Online | 25 Jun 2008 | 11:00 pm
BlackBerry subscriber numbers surged by 2.3m in the first quarter and Research in Motion's profits more than doubled, but shares were marked sharply lower as the outlook fell short of some analysts' expectations Source: FT.com - US homepage | 25 Jun 2008 | 10:55 pm
Just as Bank of America was winning approval to take ownership of Countrywide, Illinois and California filed lawsuits against the mortgage lender for allowing borrowers to take on loans beyond their means. Jeff Tyler reports. Source: Marketplace | 25 Jun 2008 | 10:45 pm
Zimbabwe's neighbours increased diplomatic pressure on President Robert Mugabe as the former South African president broke years of silence to describe the crisis as a 'tragic failure of leadership' Source: FT.com - US homepage | 25 Jun 2008 | 10:40 pm
A 7c rise by embattled Fletcher Building helped the sharemarket into positive territory in early trading today.
Fletcher, which has halved in value from its peak last year, was up 7c to 672.
The benchmark NZSX-50 was up 13 points... Source: New Zealand Herald - Business | 25 Jun 2008 | 10:32 pm
New Zealand Superfund has been increasing its holding in Auckland International Airport because its manager Morrison & Co thinks the stock is cheap.
NZ Superfund and Infratil, the infrastructure investor also managed by Morrison... Source: New Zealand Herald - Business | 25 Jun 2008 | 10:30 pm
The amount and value of company floats on the Australian Securities Exchange slumped dramatically in the first half of the 2008 calendar year as investors shunned risk.
That trend is expected to continue through the remainder of... Source: New Zealand Herald - Business | 25 Jun 2008 | 10:15 pm
AP - Countrywide Financial Corp.'s shareholders cleared the way Wednesday for the company to be taken over by Bank of America Corp., even as officials in two states filed lawsuits claiming the distressed mortgage lender misled borrowers into taking on risky home loans. Source: Yahoo! News: Business | 25 Jun 2008 | 10:02 pm
The US Federal Reserve has held interest rates steady and voiced greater concern about inflation, taking a small step down a road toward higher borrowing costs.
The decision by the US central bank, announced at the end of a two-day... Source: New Zealand Herald - Business | 25 Jun 2008 | 10:00 pm
As it prepares to celebrate the 50th anniversary of its animated classic Sleeping Beauty, Disney must be wondering if slain dragons, evil fairies, and princesses roused from slumber are enough to capture the attention of today's generation of tech-ready toddlers and multitasking tweens.
The answer, it seems, is: "Not quite."
The proof comes in its October 7 release of its Sleeping Beauty platinum-edition disc, the very first of Disney's animated movies to be available on Blu-ray, a format that will allow for youngsters to not only watch the movie but interact with other viewers.
Bob Chapek, president of Walt Disney Studios Home Entertainment unit, points out that today's young moviegoers think nothing of text messaging and multitasking even from the theater.
Disney's response: If you can't beat them, join them. Sleeping Beauty may be considered a timeless classic, but that hasn't stopped the House of Mouse from building in "movie chat" functions akin to AOL's Instant Messenger, so groups of users can chatter remotely via a scrolling message box in the corner of the TV screen.
The company also tossed in "movie mail" that allows anyone with a webcam to record a greeting—a birthday message and a marriage proposal were the two examples shown to reporters—and splice the message into a favorite.
If that doesn't keep them busy enough, a "movie challenge" contest lets viewers compete against one another in real-time, online trivia games.
Using any of these features earns fans "rewards" points, which can be exchanged for merchandise, avatars, or exclusive trailers for new Disney flicks.
This fall marks the first time the Blu-ray technology, which Disney adopted in 2004, will be available on any of its vast store of beloved animated films.
But it won't end there.
Within a year or so, Chapek said, the technology will have evolved enough so kids watching a Hannah Montana concert will be able to zoom in on the star's shoes, "click" on them with a remote control, purchase the very same pair and have them shipped home—all, of course, with accumulated rewards points.
NEW ORLEANS—A giant white tent in the middle of some swamMetadatapy scrubland seems an odd locale for a Fortune 500 company to convene its annual meeting. But in the fight between CSX and two hedge funds seeking to force their way on to the railroad giant's board of directors, it was just the latest stop on the line.
For more than a year, The Children's Investment Fund, or TCI, headed by London financier Christopher Hohn, and 3G Capital Partners, have been accumulating large stakes in CSX with an eye toward seating its own bloc of directors, something CSX has steadfastly sought to prevent.
Today the financial scrum touched down on a lonely stretch of road on the outskirts of New Orleans, where CSX shareholders gathered at the company's Gentilly rail yard to consider the hedge funds' nominees. Though CSX spokesman Garrick Francis maintained the out-of-the-way setting was simply meant to highlight CSX's efforts to rebuild coastal rail lines in the wake of Hurricane Katrina, the fact that shareholders had to follow miles of printed signs to find the yard wasn't lost on the two hedge funds' representatives.
"This place doesn't even show up on G.P.S.," groused Jonathan Gasthalter, a lawyer representing TCI.
Despite such navigational challenges, it was a relatively full tent with investors, company reps, lawyers, and reporters.
For all the drama, the finale was anticlimactic. CSX declared the vote "too close to call" and proposed reconvening the meeting on July 25 at its headquarters in Jacksonville, Florida, to certify the vote. TCI, who is confident it has the votes to place at least two directors on the board, called that a stalling tactic by the company, which is trying to blunt TCI's effort in litigation.
One shareholder, D.J. Brightly, a self-confessed "railroad buff" traveled from New Jersey for the meeting, drawn, he said, by all the publicity surrounding the proxy fight between CSX and the hedge funds. Brightly said he supported management. "They've turned it around. Dividends are up. Common sense tells you that if CSX was so poorly run, why would these guys come along and try to take it over?"
For their part, the funds criticized the time and expense CSX management has gone through to block what they view as a reasonable request from two major shareholders. "Look around," said Gasthalter gesturing at the cavernous tent interior, which featured a refreshment bar, track lighting, and easy-listening music piped in via massive stereo speakers. "I'll bet their spending five grand an hour just to air-condition this thing." (CSX declined to place a price tag on the event.)
Against the background thrum of the AC, CSX chief executive Michael Ward took to a stage flanked by two oversize video screens and called the meeting into session at around 10am. After running through the strong uptick in the company's financial performance in 2007, he surrendered the floor briefly to Snehal Amin, a founding partner of TCI. As Amin approached a microphone in the aisle, a spotlight lit him up like an airplane on final approach.
TCI's intent, Amin stated, was not to take over CSX but to use its expertise and the millions of dollars in research it had done on the rail business to institute a "new era" and make CSX into the best railroad in the world. Their five nominees, Amin said, brought more than 65 years of experience in the transportation business to the table. Not to be outdone, CSX's Ward noted that the company's nominees brought over 155 years of experience. Of course, that was for a full slate of 12.
As the voting opened and the meeting wore on with presentations on everything from projected efficiency increases to a Katrina slide show, Amin and his team (all of whom sported red lanyards on their meeting credentials) grew increasingly agitated. Confident they had the votes, they called for a close to voting, but Ward was having none of it.
"Our understanding is shareholders have questions, and until we can get the questions answered, we have a duty to keep the vote open," said Ward from the stage, rebuffing an attempt by Amin to interrupt from the floor (oddly, standing at the microphone was about the only place, including the Porta-John, where Amin wasn't shadowed by a burly, smooth-pated, bodyguard)."
"They're stalling, and it's fucking outrageous, and you can quote me on that," said Marc Weingarten, a partner in the New York office of Schulte Roth & Zabel who represents TCI, during one late morning break.
Nearby former Louisiana Senator John Breaux, who sits on CSX's board, took a more sanguine view while grabbing a quick bite at the refreshment bar. "All this is not needed or necessary," said Breaux, referring to the hedge funds' push. "The company is doing well." Breaux, now one of Washington's premier lobbyists, said Congress would "certainly have to take a look" at any effort by the hedge funds to gain control of CSX. "It's a national security issue involving the transport of military equipment," he noted.
That was certainly the view of Charles Heimerdinger, a shareholder and retired Air Force sergeant, who, in a moment worthy of Lou Dobbs, took the mic to blast the Brits for trying to steal a genuine piece of Americana. "You blokes better watch out. We already helped save you from the Huns twice!"
More prosecutions over the auditing standards in failed finance companies are likely following the successful case against two chartered accountants who signed off the books for the first firm to hit the wall.
National Finance... Source: New Zealand Herald - Business | 25 Jun 2008 | 10:00 pm
The ongoing finance company meltdown gathered pace yesterday as yet another property-focused lender, Dorchester Pacific Finance, threw in the towel, saying it would ask investors to approve a "deferred repayment plan".
Dorchester,... Source: New Zealand Herald - Business | 25 Jun 2008 | 9:00 pm
It meets secretly and doesn't even publicly disclose its schedule. It won't officially comment on whom it's investigating.
But like it or not, the Senate Ethics Committee is back in the public spotlight as it begins to investigate the special-loans-for-Senators scandal revealed on Portfolio.com earlier this month.
After Portfolio.com reported that the troubled mortgage lender Countrywide Financial appeared to have set aside some of its own criteria in making loans to a pair of prominent Democratic senators, attention quickly turned to the Senate Ethics Panel.
Four days after Portfolio.com named the senators—Kent Conrad of North Dakota, who chairs the Budget Committee, and Chris Dodd, of Connecticut, who chairs the Banking Committee—a private group called Citizens for Responsibility and Ethics in Washington filed a formal complaint and called for an investigation.
Such a move almost always triggers a preliminary investigation, and the ethics committee chairwoman, Barbara Boxer of California, told the Washington Post that one is underway. "A complaint has been filed, and we are, as we always do, looking at that," she said.
While the committee won't officially say whom it is investigating, both Dodd and Conrad have vowed to cooperate fully. Conrad's office told Portfolio.com today that it had yet to hear from the committee but reiterated that it will cooperate fully. A source familiar with the details says the committee has not yet contacted Dodd's office, either.
Other fallout from the scandal continues.
Earlier this week, Boxer and John Cornyn of Texas, the ranking Republican on the ethics panel, proposed requiring members of Congress to include mortgage information on their public financial-disclosure statements. They wanted it included as an amendment to the $300 billion housing-bailout bill that is wending its way through Congress.
Cornyn and Boxer have said that all six members of the ethics panel back the amendment; not surprisingly, both Dodd and Conrad support the idea too. But Cornyn's office said that Dodd and the other manager of the housing bill, Richard Shelby of Alabama, the banking committee's ranking Republican, have refused to allow the amendment to be added because they say it's not germane to the bill.
Whether the amendment will come to a vote this week remains in some doubt.
In the House, a group of 28 Republicans asked Speaker Nancy Pelosi last week to look into the issue, but she dismissed the problem as a Senate matter. Wednesday, another group of House Republicans wrote to Representative Barney Frank, the chairman of the Financial Services Committee, to investigate and subpoena records from Countrywide—which is run by Angelo Mozilo and is being taken over by Bank of America—to find out if more members got a special deal.
That leaves the investigation in the hands of Boxer and Cornyn, a political odd couple.
Boxer is a California liberal whose daughter was once married to Hillary Clinton's brother. (The two are now divorced.) Cornyn is a white-haired conservative former judge from Texas who is one of George W. Bush's closest allies in the Senate.
While Cornyn and Boxer have publicly advocated their amendment to provide full disclosure on mortgages, neither is discussing the Dodd-Conrad case per se, as is customary.
Others members of the committee are Ken Salazar of Colorado and Mark Pryor of Arkansas, both Democrats and former state attorneys general; as well as two Republicans, Pat Roberts of Kansas and Johnny Isakson of Georgia.
The ethics panel has a range of tools at its disposal as it moves forward. It could investigate the matter and issue a letter dismissing the case. It could reprimand a senator or encourage the entire Senate to take up censure or dismissal.
Such moves are quite rare, however. The committee unanimously recommended the expulsion of Senator Robert Packwood of Oregon amid an investigation of sexual misconduct in 1995 after determining that he'd edited some documents and diaries sought by the panel and had refused to give over others. Packwood resigned before he could be ejected from the Senate.
In 2002, the panel "severely admonished" New Jersey Democrat Robert Torricelli for receiving illegal gifts from a campaign contributor. Torricelli, who was seeking reelection that year, dropped out of the race.
If history is any guide, the ethics panel could take several months to complete an investigation. The committee took 10 months to resolve a complaint about Louisiana Republican David Vitter after he was linked to a prostitution ring.
In that case, the committee concluded that the alleged transgression had occurred before Vitter had arrived in the Senate and thus was out of its jurisdiction.
While the panel moved more quickly on the matter of Senator Larry Craig and his arrest in an airport men's room, this is likely to be a slow probe, experts said.
First, the ethics panel must determine if the special mortgages that Dodd and Conrad received constitute a "gift" as narrowly defined by Senate ethics rules.
If it is proven that a V.I.P. mortgage meets the Senate's definition of a gift, then there's the matter of determining whether the two veteran Democrats knew or should have known that they were receiving such a benefit.
Justice David Souter wrote the Supreme Court opinion that cut the punitive damages in the Exxon Valdez spill to $500 million from $2.5 billion, and it is a surprisingly good read.
Supreme Court opinions often tend toward abstractions, but Souter begins by reminding us of the harrowing facts of March 24, 1989, when a 900-foot supertanker used by Exxon to carry crude oil from the end of the Trans-Alaska Pipeline to the lower 48 states grounded on Bligh Reef, spilling millions of gallons of crude oil into Prince William Sound:
"Its captain was one Joseph Hazelwood, who had completed a 28-day alcohol treatment program while employed by Exxon, as his superiors knew, but dropped out of a prescribed follow-up program and stopped going to Alcoholics Anonymous meetings."
Souter continues, reviewing the evidence presented at the trial: "Witnesses testified that before the Valdez left port on the night of the disaster, Hazelwood downed at least five double vodkas in the waterfront bars, an intake of about 15 ounces of 80-proof alcohol..."
Yet the most important language in the decision may be found in a single footnote.
Andrew Frey, one of the nation's top Supreme Court advocates, who filed a brief in the case on behalf of the American Petroleum Institute, points to footnote 28 as a sign that the court will apply a one-to-one ratio when it comes to punitive damages in virtually all cases.
Footnote 28 cites a 2002 Supreme Court decision involving State Farm—a case argued and won by Frey himself, and the last major previous pronouncement from the court on punitive damages. State Farm said that a one-to-one ratio is appropriate in "all but the most exceptional cases," Souter observed.
So if Exxon Valdez is not exceptional, then what is?
In the footnote, Souter notes that the recovery of $500 million by the Exxon Valdez class member was "substantial. In this case, then, the constitutional outer limit may well by 1:1."
Frey contends: "What they have done here is they have tried to adopt a general rule of thumb."
Indeed, Souter's opinion gives a lengthy treatise on the history of punitive damages, a much broader examination of the subject than the maritime law question presented in the case. He notes that the modern doctrine of punitive damages dates back to at least 1763, and continues from there, in a history that also contrasts American law to practice in Canada and Australia.
Souter notes: "American punitive damages have been the target of audible criticism in recent decades," and observes: "The real problem, it seems, is the stark unpredictability of punitive awards."
And so now, it seems, Corporate America has a number it can rely on: It is one-to-one.
J.B. Howard, the deputy attorney general of the state of Maryland, who wrote a brief on behalf of 34 states, is not happy about that. "We think the court failed to appreciate the egregiousness of Exxon's conduct," he said.
For Howard, and for many people watching the case, the justices failed to make a ruling on the main point in the case. They split four-to-four on whether, under maritime law, the agent of a captain at sea could be held accountable for his actions, if the agent did not countenance those actions.
At issue was an 1818 ruling in a case called the Amiable Nancy, which involved a ship captain who took to pirating while out at sea.
Justice Samuel Alito, who owns a large stake in ExxonMobil stock, did not participate in the case. (He sold part of those holdings earlier this month, according to financial disclosures.)
The even split means that a previous decision from a federal appeals court found that Exxon should be liable for Hazelwood's conduct, even though it did not officially send him out to sea while drunk.
"It's unfortunate," says John Kimball, a New York partner at Blank Rome and specialist in maritime law who teaches admiralty law at New York University School of Law. "Here we have a decision that is in many ways a disappointment. The lower courts are now going to have to grapple with that."
Still, Howard, of the Maryland attorney general's office, is happy that the Ninth Circuit ruling stands: The states filed their amicus out of the very real fear that a ruling for Exxon, which was pressing for a ruling under the Amiable Nancy that no punitives should lie for Hazelwood's actions, would put shoreline states at a very real risk going forward.
And the court had some good news for environmentalists: It rejected Exxon's claim that the Clean Water Act "preempted" any claim for punitive damages under what is known as common law (meaning judge-made law).
The case is a win for Walter Dellinger of O'Melveny & Myers and a loss for Jeffrey Fisher, a professor at Stanford Law School who also argued Kennedy v. Louisiana, the child-rape case decided by the Court today.
One of the biggest names in aviation has developed a jet engine that is more efficient, less polluting and cheaper to use than almost everything else in the sky, and it could revolutionize an industry facing skyrocketing fuel prices and mounting pressure to clean up its act.
Pratt & Whitney has spent the better part of two decades developing the geared turbofan engine that burns 12 to 15 percent less fuel than other jet engines and cuts carbon dioxide emissions by 1,500 tons per plane per year. It's being called one of the most exciting developments commercial aviation has seen in years, and it was a hot topic at the Eco-Aviation Conference, where the aviation industry spent two days charting the course to a greener future.
"It's technology like that geared turbofan that's going to drive fuel efficiency forward for this industry in the short and medium term," says Earnest Arvi of the Arvi Group. "Alternative fuels show great potential, but they're decades away."
Pratt & Whitney was just one of the heavy hitters at the conference, an unprecedented gathering that underscored the severity of the issues the industry faces. With airline passenger growth rates and aircraft emissions expected to double by 2020 and 2030, respectively, the pressure is on to address those problems quickly. The conference saw a lot of talk -- and a little green-washing -- about developing alternative fuels to replace jet fuel, easing airport pollution, and building greener aircraft to replace the industry's aging fleet. Nearly 1,000 planes flown by domestic carriers will be more than a quarter of a century old by 2015, and Boeing officials have said that more than 10,400 new planes will be needed in the coming decades and making them as green as possible will go a long way toward reducing commercial aviation's carbon footprint.
That's why Pratt & Whitney has so much to brag about with its geared turbofan, which significantly advances jet-engine technology. Current jet engines have fans that suck air into the combustion chamber, where it is compressed, mixed with fuel, and ignited. Then it's blown through a turbine, generating thrust. It works, but it's inefficient because the fan is connected to the engine and turns at the same speed as the turbine. Fans work best at low speed, while turbines work best at high speed.
Pratt & Whitney solved that problem with a gearbox that lets the fan and turbine spin independently. The fan is larger and it spins at one-third the speed of the turbine, creating a quieter, more powerful engine the company says requires less fuel, emits less C02 and costs 30 percent less to maintain. Pratt & Whitney has been torture-testing the engines, and its engineers have simulated more than 40,000 takeoffs and landings.
The company's VP of Technology and Environment, Alan Epstein, says the engine will not only cut CO2 emissions, but will also reduce nitrogen-oxide emissions, noise and -- ultimately -- ownership costs. "For the next generation of single-aisle aircraft, there's no question that engine performance will be key," he says. "Both economically and environmentally, this engine will deliver significant benefits."
The industry seems to agree and is lining up behind the engine, which Pratt & Whitney expects to have in regular service by 2013. It's already slated for jets currently being developed by Mitsubishi and Bombardier.
Pratt & Whitney isn't the only firm developing greener aircraft. Airbus is dabbling in alternative fuels and researching ways of recycling more than 6,000 planes slated for retirement during the next 20 years. Boeing is dabbling with hydrogen fuel cells and investing in algal fuels while pushing lighter planes like its 787 Dreamliner. Boeing says composite materials make up nearly 50 percent of the plane, which can carry as many as 330 people, making it far lighter than other planes its size. It is 20 percent more fuel-efficient and produces 20 percent fewer emissions than similarly sized aircraft, company officials say. Boeing is betting composite construction will bring huge improvements in fuel economy and emissions to commercial aviation.
Further gains could come from improving the nation's outdated air traffic control system, something nearly everyone at the conference said must happen. The current system is based on radar technology that dates to World War II, and plans to replace it with a satellite system known as NextGen are at a standstill while FAA reauthorization is stalled in Congress. But the industry has several other ideas, from allowing flights through military airspace to widespread adoption of a quieter, more efficient landing technique called continuous descent approach. Industry experts say adopting such steps could significantly reduce fuel consumptions and delays. The International Air Traffic Association says cutting just one minute from every commercial flight would save more than 1.9 million tons of fuel and 6.3 million tons of CO2 annually.
The air travel industry has taken a lot of heat for being slow to address its environmental impact, and some say parts of the eco-conference were just slick PR. But even some critics say the fact the industry is discussing environmental stewardship shows it's finally getting serious about the issue -- if only because doing so is in its best interest. "Climate change could mean fewer coastal vacation destinations, inaccessible airports and a general economic malaise that cuts travel spending," says Liz Barratt-Brown of the Natural Resources Defense Council. "Looked at in that context, you could argue that the aviation sector has the most to lose from global warming."
Reuters - Securities regulators proposed
weaning investors and Wall Street institutions from
over-reliance on credit ratings, part of changes to the rating
industry prompted by the subprime mortgage crisis. Source: Yahoo! News: Business | 25 Jun 2008 | 6:41 pm
It's difficult talking to kids about managing an inheritance, but wealth management firm GenSpring aims to make an otherwise tough conversation into a game. Sean Cole reports. Source: Marketplace | 25 Jun 2008 | 6:13 pm
Countries that were once mainstays for foreigners looking to adopt are starting to cut back on the practice, meaning heartbreak for prospective parents and hard times for adoption agencies. Jennifer Collins reports. Source: Marketplace | 25 Jun 2008 | 6:13 pm
Medicare is preparing to make medical supply companies compete against each other on prices. But as host Bob Moon learns from New York Times business columnist David Leonhardt, there may be a fight ahead. Source: Marketplace | 25 Jun 2008 | 6:13 pm
Barack Obama's campaign is breaking new ground by negotiating with national TV networks to carry his campaign ads. Host Bob Moon talks with Ad Age's Ira Teinowitz about how the strategy might affect the election. Source: Marketplace | 25 Jun 2008 | 6:13 pm
The mortgage crisis was the last thing many American homeowners wanted, but commentator David Frum argues there may be a silver lining to the dark clouds hanging over the housing market. Source: Marketplace | 25 Jun 2008 | 6:13 pm
Chrysler hopes to counter lagging car sales by offering wireless Internet connections in its 2009 models, a plan that's got safety advocates shaking their heads. Ashley Milne-Tyte reports. Source: Marketplace | 25 Jun 2008 | 6:13 pm
When we look back on the 2008 economy, will it be the year of two halves: first half recession, second half inflation?
Based on the language in the Federal Reserve's statement today announcing that it will leave short-term interest rates unadjusted at 2 percent, it's certainly a possibility.
But for now, anyway, the risk of inflation does not seem to be so great that it's putting pressure on Federal Reserve chairman Ben Bernanke to raise rates soon, in spite of the speculation building that he will.
"The committee expects inflation to moderate later this year and next year," the Fed statement said. "However, in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high."
"The Committee will continue to monitor economic and financial developments and will act as needed to promote sustainable economic growth and price stability."
Many economists believe the Fed could raise rates by the end of the year as it shifts its policymaking from recession suppression to inflation deflation.
The rapid rise in energy costs and food prices is cause for worry that the core inflation figure could exceed the Federal Reserve's so-called "comfort zone" of 1 percent to 2 percent. Although the core number excludes oil and food, pricing pressures from those sectors could likely spill over to the rest of the economy.
A hike in interest rates later this year would suggest that the Fed is confident that the worst of the financial crisis is over and that the economy has skirted a prolonged period of recession.
Earlier this month, Bernanke said "the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."
But there is still evidence that this economic downturn is far from over. There appears to be no sign that the housing market is anywhere near the bottom, and the credit market remains tight as the world's biggest banks continue to work through their bloated balance sheets.
The Fed acknowledged these concerns again in its statement today.
Warren Buffett, chairman of Berkshire Hathaway, told Bloomberg today that he believes the economy will likely remain in a period of stagflation for quite a while. Stagflation occurs when the economy contracts at the same time inflation rises.
There are many faces in the gallery of subprime culprits: aggressive mortgage brokers and investment banks pushing mortgage-backed securities out the door among them.
Some have pointed fingers at the credit-rating agencies like Moody's, Fitch Ratings and Standard & Poor's. Their AAA ratings for securities that eventually went bust, along with their reluctance to downgrade until it was too late, provided a false sense of security to investors, and helped create the bubble that burst last summer.
Today, the Securities and Exchange Commission proposed regulations that could vastly diminish the role of credit-rating agencies in financial markets in the long run. The proposals follow measures outlined earlier this month that are aimed at addressing issues of conflicts of interest, transparency, and disclosure at the rating agencies.
The latest proposals would water down and rewrite regulations that require some fund managers and banks to consider the assessment of the rating agencies when buying short-term debt and other financial instruments, allowing them to rely instead on other measures for due diligence.
"Over the last three decades, we have embedded [the use] of credit ratings into our rule books," said Paul Atkins, an S.E.C. commissioner. "Recent events have awakened us to the unintended consequences of our behaviors.
"Credit ratings have become a crutch," he said. "Credit ratings are opinions. They are no substitute for investors making informed decisions."
The S.E.C. chairman, Christopher Cox, noted that "events of recent months have had a profound effect on our economy and our markets, and they have galvanized regulators and policymakers... to re-examine every aspect of the regulatory framework governing credit-rating agencies."
He acknowledged the criticism by some that the "official recognition of credit-rating agencies... may have played a role in encouraging over-reliance on ratings."
"It should go without saying that it should be neither the purpose nor the effect of any S.E.C. rule to discourage investors from paying close attention to what credit ratings actually mean," he said.
At the meeting, S.E.C. staffers said they had identified some 44 rules and forms referencing credit-rating agencies, and recommended eliminating any mention of them in 11, changing the wording—in many cases to allow investors to seek alternative means of achieving due diligence requirements—in 26, rules and leaving the language unchanged in just six.
Among the most significant proposed changes is a measure that would allow U.S. money-market funds to buy short-term debt without considering the ratings, instead requiring a money-market fund's board of directors to determine that each security "presents minimal credit risks," and is "sufficiently liquid to meet reasonably foreseeable redemptions." No more than 10 percent of investments could be held in illiquid securities.
Other regulations would allow investment advisers in certain cases that are currently required to rely on ratings before greenlighting some transactions, to make their own assessments of whether a security meets specific credit and liquidity requirements.
The largest significance, however, may be symbolic, some experts say.
Jerome Fons, a former managing director of Moody's Investor Services and principal at the investment consultancy Fons Risk Solutions of New York, had been harshly critical of earlier proposals of the S.E.C. to address problems with the credit-rating agencies.
Just last week, he said he was "not convinced there is any real desire to drastically reform or remake the industry."
Today, however, "I'm almost eating my words," he said.
"If they go through with these proposals, it's the right direction. I think this will improve the competitive landscape. And if somebody with a better mousetrap comes along, the market will be the decider."
But other longtime observers were less impressed.
Joshua Rosner, managing director of Graham Fisher & Co., a financial research consultant, said many of the proposed changes discussed so far are largely cosmetic and will do little to restore confidence in the agencies needed to end the credit crunch.
"It will take every country's bank supervisors, every state's insurance commissioners, and every country's pension supervisors working to achieve a global reduction in the use of ratings," he said. "It's an admirable goal, but I don't think it can be achieved in the short term."
What's really needed is legislation that would change the way the rating agencies operate, he says. When the rating agencies find a structure finance model is not working, for instance, they change the model, but do not go back and re-rate securities graded under the old models.
"At this point there is no indication in the U.S. is understanding the issue deeply enough, or looking for much more than" a cosmetic solution, he says.
Many investors, he says, will continue to rely on the rating agencies, because "you have time constraints whether to participate or not in a deal, investors don't have time to look for reams of data," he said.
Fons also played down the immediate impact on the business of the agencies.
"Their businesses are already hurting," he said. "They're not likely to lobby too hard against these proposals. Right now they need to improve their image and improve investor confidence and lobbying against reform is not the way to do it. If rating agencies can regain investor confidence they will want to use them voluntarily."
Ed Sweeney, a spokesman for S&P, said, "S&P supports the S.E.C.'s efforts to bring greater transparency, stability and confidence to the capital markets, and we look forward to reviewing the proposed rules and providing our comments to the S.E.C. during the commentary period."
Symbian co-founder Nokia announced Monday night that it is buying the 52 percent of the software maker that it doesn’t already own and releasing its mobile operating system under an open source license.
With that move, Symbian joins two other major platforms -- the Google-backed Android operating system and Apple's OS X iPhone -- that give programmers tools for creating and deploying software for smartphones.
The Symbian OS dominates the world market, with about 60 percent of the installed base among smartphones. According to Nokia, more than 200 million phones currently in use worldwide are running Symbian software. But Symbian trails in the United States, where Research in Motion, Palm, Windows Mobile -- and now the iPhone -- are the major players.
Nokia uses Symbian software across its range of mobile devices, primarily with the extremely popular S60 interface. Other handset companies also use some variety of the Symbian operating system, including Sony Ericsson, Motorola and NTT DoCoMo.
"Nokia could, if they found inside the corporation the resolve to do so, come out with the definitive open platform," said Bruce Perens, an open source advocate and CEO of Kiloboot. "They would have a platform of the type we haven't seen since the original Palm. When that was dominant, there were 16,000 applications available to install. The question is, can they find the corporate resolve?"
The prospect of thousands of mobile apps -- instead of the few dozen typically available through most wireless carriers -- is something new in the wireless world. And the 6 million iPhones sold to date show that mobile users like having open, unfettered access to web applications and online content.
In short, what matters to handsets now is not so much features, graphics chips and innovative interfaces -- though those do help. What's critical is an easy-to-use development platform that enables programmers to create a wide range of software quickly and easily, so that they can give consumers the content and the software they demand.
Android (whose first handsets are expected later this year) is clearly aimed at that goal. And while it's not open source, Apple has built a complete developer ecosystem around the iPhone, including everything from development tools to a store (which will open next month) for selling finished applications.
That's a significant shift from just a year ago, when programming tools for handsets were specialized and difficult to use, and carriers and handset manufacturers alike kept a tight rein on mobile application deployment.
To support the new open source project, Nokia is establishing the Symbian Foundation, a collective of hardware and software companies that have pledged to donate code and resources to Symbian's development. Phone makers Motorola and Sony Ericsson are on board, contributing software from their UIQ project, a touchscreen interface for Symbian. Japanese carrier NTT DoCoMo has pledged support and is contributing its Symbian interface, MOAP(S). Other supporters include AT&T, Samsung and Texas Instruments.
"Establishing the foundation is one of the biggest contributions to an open community ever made," said Olli-Pekka Kallasvuo, CEO of Nokia, somewhat hyperbolically. But it is true that Nokia has, at one stroke, created an enormous open-source ecosystem, thanks to the huge number of Symbian phones already in use.
Nokia's move is a defensive one, of course. The Symbian Foundation plan is strikingly similar to Google's plan with the Open Handset Alliance, a collective of industry players who have come together to build and nurture the Android open source mobile operating system. On the carrier side, Google has NTT DoCoMo, Sprint Nextel and T-Mobile on board. On the hardware side, HTC, LG, Motorola and Samsung have signed on to support Android.
Nokia says it is even taking a Google-like approach to rolling out the open source code. It will release components of its code under an open source license at first, with the full OS to follow "over the next two years." Right now, Nokia says, it intends to release Symbian under the Eclipse Public License (EPL) 1.0.
But not everyone is convinced that open source operating systems are the way to go.
"With the success of Apple's and RIM's models, we would have thought traditional handset vendors would develop and maintain similar proprietary OS models," said Tavis McCourt, a Morgan Keegan analyst. "We view this move as a long-term positive for the smartphone vendors that own their own OS (RIM, Apple and, soon, Palm)."
And it's still too soon to tell which mobile platform will win out. Symbian has the advantage of a large installed base; Android will benefit from the pure innovation seen when developers take a "sky's the limit" approach to building a new OS. And Apple provides a complete, turnkey approach to software sales via its iTunes App Store, which may appeal to consumers.
One thing's for sure: The floodgates are opening, and the coming year will see an explosion of mobile software for a wide range of smartphones.
Executives of Barclays would like to assure everyone that everything is just fine at Britain's fourth-largest bank. The trouble is, investors these days need a bit more evidence than a promise.
Barclays announced this morning that it will raise $8.9 billion from a group of international investors. It will use the funds to shore up its reserves and invest in expanding its business.
The investors include Qatar Investment Authority, Singapore's Temasek Holdings, China Development Bank, Tokyo's Sumitomo Bank, and Challenger, which is the investment firm for Qatar's royal family. Existing Barclays shareholders are also invited to participate in the stock offering.
As Jesse Eisinger noted in the current issue of Condé Nast Portfolio, big cash calls such as this one shouldn't necessarily please existing shareholders. After all, issuing more stock as Barclays is doing will dilute the value of existing shares. Analysts expect this $9 billion offering will diminish their earnings-per-share forecasts by as much as 24 percent.
Moreover, as Paul Murphy notes on the Financial Times'Alphaville blog, plenty of questions went unanswered on the conference call with Barclays executives this morning.
For starters, Barclays has not been as forthcoming as its U.K. or U.S. counterparts with details about how it's valuing its balance-sheet assets. The bank has had far fewer write-downs than other major banks, and skeptics wonder if there will be more bad news to come.
If Barclays used the same valuation marks that its competitor Royal Bank of Scotland uses, Murphy notes, some analysts believe the bank would need to raise nearly twice what it announced this morning.
Moreover, it continues to use its year-end 2007 ratios to defend its capital strength, even though it has admitted that conditions deteriorated this year.
Over at BreakingViews, Jeffrey Goldfarb notes that Barclays' "bravado" seems misplaced: "[I]t is seeking higher ground by claiming there is no reason to show its hand to rivals—or to investors. Barclays' top brass thinks they should be showing faith. They haven't, as shares have fallen 40 percent so far this year."
Despite the skepticism, however, Barclays' shareholders did get a bit of relief with today's news, as its stock rose more than 6 percent. Still, it's a long way back up from a 40 percent fall.
Reuters - Stocks opened sharply lower on
Thursday, prompted by worries about heavy losses in the banking
sector and disappointing outlooks from technology companies
including Research In Motion .
Reuters - Citigroup Inc may suffer $8.9
billion of write-downs in the second quarter, resulting in a
loss and possibly its second dividend cut this year, and
investors should bet the largest U.S. bank's shares will fall,
Goldman Sachs & Co said on Thursday.
AP - The economy turned in a better but still subpar performance in the first three months of this year, mostly spurred by stronger sales of U.S. products overseas.
Reuters - The economy grew slightly faster
than initially thought in the first quarter, while the job
market remained sluggish last week, according to U.S. data
released on Thursday.
Reuters - Federal Reserve Vice Chairman Donald
Kohn said on Thursday that rising energy and food prices have
hit headline inflation, but this has only seeped into inflation
expectations by a little bit so far.
Reuters - Anheuser-Busch Cos Inc
plans to reject InBev NV's unsolicited $46.3 billion
takeover offer, saying it undervalues the company, a source
familiar with the situation said on Wednesday.