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Circuit City's Turnaround Expert Still Under Schoonover, Big Mistake (CC)
The company said the board continues to pursue strategic alternatives for the company that offer the best possible results for its shareholders in the long term. The company keeps talking about delivering value to shareholders, yet we are only one operation among many who have shown that the only value created has been a negative value. Schoonover needs to recognize that if Marcum is really a great turnaround expert that Circuit City needs to can Schoonover and put Marcum in that role. Shares are up 6% at $1.91 in pre-market trading, yet this is a small victory as the 52-week trading range is $1.71 to $11.55 and this was north of $20.00 not even 2 years ago. Schoonover's efforts have done nothing but destroy shareholder value. He deserves much congratulations, at least he will the day he finally leaves.
Jon C. Ogg Source: 24/7 Wall St. | 19 Aug 2008 | 12:59 pm Wholesale inflation climbs againWASHINGTON (Reuters) - Wholesale prices took another unexpectedly steep jump in July and shot up at the fastest year-on-year rate in 27 years, according to a government report on Tuesday that was certain to fan fears about a potential surge in inflation.Source: Reuters: Business News | 19 Aug 2008 | 12:59 pm Homebuilding in US at 17-year lowThe number of US homes and apartments being built falls to the lowest level in more than 17 years, government figures show.Source: BBC News | Business | World Edition | 19 Aug 2008 | 12:57 pm Russia stages carefully-scripted withdrawalRussia staged a carefully-scripted troop pullback as NATO foreign ministers watched for signs of a withdrawal, while Moscow confirmed it had seized 20 Georgian soldiers from the port of Poti, saying they posed a security riskSource: FT.com - US homepage | 19 Aug 2008 | 12:54 pm Futures extend losses as core PPI tops estimatesNEW YORK (Reuters) - Stock index futures extended losses on Tuesday as a report showing that core producer prices rose at a faster-than-expected clip in July added to worries about the economy's health and the profit outlook.Source: Reuters: Business News | 19 Aug 2008 | 12:50 pm Newcrest Mining profit more than doublesAustralia’s largest gold miner Newcrest Mining Ltd. said Tuesday its annual profit more than doubled in fiscal 2008, helped by the acquisition of operations in Papua New Guinea.Source: MarketWatch.com - Top Stories | 19 Aug 2008 | 12:50 pm Earnings slide for Home Depot and StaplesHome Depot, the largest US home improvement chain, and Staples, the office supply store, reported falling earnings in their second quarters as the twin threats of the housing slump and the slowing economy cut into consumer and small business spendingSource: FT.com - US homepage | 19 Aug 2008 | 12:49 pm Indications: U.S. stock futures extend drop after PPI, building dataU.S. stock futures extended declines on Tuesday after housing starts dropped to a 17-year low and wholesale inflation rose more than forecast, underlying the twin tensions of faltering growth at the same time of rising prices.Source: MarketWatch.com - Top Stories | 19 Aug 2008 | 12:42 pm July housing starts down 11 percentWASHINGTON (Reuters) - Home building projects started in July fell 11 percent to the lowest annual rate in more than 17 years, while building permits tumbled 17.7 percent, the Commerce Department reported on Tuesday.Source: Reuters: Business News | 19 Aug 2008 | 12:41 pm Wholesale prices rise againWholesale prices increased more than expected in July, adding to growing fears about inflation, according to a government report released on Tuesday.Source: Business and financial news - CNNMoney.com | 19 Aug 2008 | 12:40 pm Target quarterly profit dropsNEW YORK (Reuters) - Target Corp reported a lower quarterly profit on Tuesday as shoppers passed over purchases of trendy clothes and home decor in favor of every-day necessities, hurting its margins.Source: Reuters: Business News | 19 Aug 2008 | 12:39 pm Target's Earnings Beat, Marred by Cards & Economy (TGT)
The good news is that the company modestly beat street estimates and modestly beat its own forecasts. The bad news is the company is continuing to refer to a weak and soft sales environment. To further illustrate this trend it saw gross margins drop 0.4% to 31.2%. The profitability of its credit card operations also fell by 65% down to $74 million as consumers are paying fewer bills. Also during the quarter, Target spent some $1.7 Billion to repurchase 33.8 million shares. Shares are waffling pre-market as they were indicated up modestly at $50.30 and then down modestly at $49.90 on thin trading volume which could easily go either way today.
Jon C. Ogg Source: 24/7 Wall St. | 19 Aug 2008 | 12:39 pm Before the Bell: Inflation data, Home Depot, Lehman Brothers in focusU.S. stock market futures dropped Tuesday after data showing inflation rising faster than expected and housing starts hitting their lowest level in 17 years.Source: MarketWatch.com - Top Stories | 19 Aug 2008 | 12:39 pm Economic Report: U.S. July PPI climbs by more-than-expected 1.2%U.S. producer prices increased by a bigger-than-expected 1.2% in July, the Labor Department reports.Source: MarketWatch.com - Top Stories | 19 Aug 2008 | 12:39 pm Economic Report: Single-family housing permits fall to 26-year low in JulyU.S. home builders sharply reduced the number of new homes started in July and dropped the number of new single-family permits to the lowest level in 26 years, the Commerce Department reports.Source: MarketWatch.com - Top Stories | 19 Aug 2008 | 12:30 pm iPODs overheat, Apple under pressureRead full story for latest details.Source: Business and financial news - CNNMoney.com | 19 Aug 2008 | 12:29 pm Saks reports wider 2Q loss (AP)AP - Luxury goods retailer Saks Inc. is reporting a wider-than-expected loss in the second quarter as its affluent shoppers cut back on apparel amid a slowing economy.Source: Yahoo! News: Business | 19 Aug 2008 | 12:28 pm Warning from Alliance & LeicesterAlliance & Leicester warns of "significant external risks" if Banco Santander's takeover is rejected by shareholders.Source: BBC News | Business | World Edition | 19 Aug 2008 | 12:25 pm Silver price boosts profits at miner FresnilloHigh silver and gold prices helped Fresnillo, the world's biggest silver producer, increase profits by nearly 50pc.Source: Telegraph Business | 19 Aug 2008 | 12:25 pm Staples results hurt by tough conditionsNEW YORK (Reuters) - Staples Inc , the U.S. office supply chain, said on Tuesday that tough market conditions hurt quarterly results and that its acquisition of Dutch rival Corporate Express would add slightly to 2008 earnings.Source: Reuters: Business News | 19 Aug 2008 | 12:23 pm Home Depot profit tumbles 24%Home Depot reported a 24% decline in profit Tuesday amid ongoing weakness in the home improvement and housing markets, but still managed to top analysts' expectations.Source: Business and financial news - CNNMoney.com | 19 Aug 2008 | 12:22 pm MarketWatch First Take: Nationwide slaps Bank of England with Irish expansionNationwide is expanding in Ireland and that's a wake-up call for the Bank of England.Source: MarketWatch.com - Top Stories | 19 Aug 2008 | 12:20 pm Lehman mulls asset-management sale - reportSource: Business and financial news - CNNMoney.com | 19 Aug 2008 | 12:09 pm German investor sentiment brightens in AugustAnalysts were more upbeat about Germany's growth prospects in August than economists expected but confidence was still well below average, a closely-watched survey out today shows.Source: Infocious RSS raw feed - channel BNPaperBusiness | 19 Aug 2008 | 12:08 pm German investor sentiment brightens in AugustAnalysts were more upbeat about Germany's growth prospects in August than economists expected but confidence was still well below average, a closely-watched survey out today shows.Source: Telegraph Business | 19 Aug 2008 | 12:08 pm Futures fall on credit, financial sector woes (Reuters)
Source: Yahoo! News: Business | 19 Aug 2008 | 12:06 pm Big Oil, big influenceAs angry voters spark a barrage of energy bills in Congress, the oil industry is spending record amounts of money protecting its interests.Source: Business and financial news - CNNMoney.com | 19 Aug 2008 | 12:05 pm Worst of financial crisis is still to come, ex-IMF chief Ken Rogoff warnsBanking shares across the world were hit after a stark warning from the IMF's former chief economist Kenneth Rogoff warned that the worst of the credit crisis is yet to come.Source: Telegraph Business | 19 Aug 2008 | 12:05 pm 24/7 Wall St. Most Overpaid CEO Of The Day: Amylin (AMLN) CEO Daniel M. Bradbury
During the last twelve months, shares in the company are off 40%. Yesterday, Federal regulators said they are working on a stronger label for a widely used diabetes drug marketed by Amylin Pharmaceuticals Inc. and Eli Lilly & Co. as deaths continue to be reported despite earlier government warnings. The stock is likely to stay down for a long time Douglas A. McIntyre Source: 24/7 Wall St. | 19 Aug 2008 | 12:04 pm Lehman faces loss, $4 billion writeoff: report (Reuters)Reuters - Lehman Brothers Holdings Inc may post a third-quarter loss and suffer about $4 billion in write downs, according to an analyst at J.P. Morgan Securities, who also said a sale of the company's Neuberger Berman business was unlikely.Source: Yahoo! News: Business | 19 Aug 2008 | 12:03 pm Lehman faces loss, $4 billion writeoff: report(Reuters) - Lehman Brothers Holdings Inc may post a third-quarter loss and suffer about $4 billion in write downs, according to an analyst at J.P. Morgan Securities, who also said a sale of the company's Neuberger Berman business was unlikely.Source: Reuters: Business News | 19 Aug 2008 | 12:03 pm Staples says weakness in North America hurting resultsStaples Inc. says its second-quarter sales will be weaker than anticipated due to growing weakness in the North American market.Source: MarketWatch.com - Top Stories | 19 Aug 2008 | 12:00 pm Which song best sums up the UK downturn?Brixton chief executive Tim Wheeler has compared the state of the commercial property market to the "apocalyptic" atmostphere of Bob Dylan's 1967 song, All Along the Watchtower. All the jokers and thieves...Source: Infocious RSS raw feed - channel BNPaperBusiness | 19 Aug 2008 | 12:00 pm Which song best sums up the UK downturn?Brixton chief executive Tim Wheeler has compared the state of the commercial property market to the "apocalyptic" atmostphere of Bob Dylan's 1967 song, All Along the Watchtower. All the jokers and thieves of the industy are contributing to a state of confusion where no one can "know what any of it is worth", he says.Source: Telegraph Business | 19 Aug 2008 | 12:00 pm Home Depot posts higher-than-expected profitATLANTA (Reuters) - Home Depot Inc, the world's largest home improvement retailer, reported higher-than-expected quarterly profit on Tuesday as it held down costs and consumers took on spring projects.Source: Reuters: Business News | 19 Aug 2008 | 11:55 am Home Depot profit drops 24%, but beats estimatesHome Depot Inc, the world’s largest home-improvement retailer, Tuesday stuck to its guidance for the year, even as second-quarter profit fell 24%, hurt by the fallout from the housing market’s collapse.Source: MarketWatch.com - Top Stories | 19 Aug 2008 | 11:55 am German goods in sharpest price gain since 1974A leap in the cost of goods leaving German factories fanned fears of spiralling inflation in Europe’s biggest economy today.Source: Latest Business News from Times Online | 19 Aug 2008 | 11:54 am Court case over MoD job cut plansA union challenges the terms on which the Ministry of Defence is said to be seeking to shed 5,000 civilian jobs.Source: BBC News | Business | World Edition | 19 Aug 2008 | 11:54 am Medtronic's profit rises, sales jumpMedtronic reports a slight gain in first-quarter earnings Tuesday, as the medical-products maker felt the effects of a staff cutback earlier this year and increasing sales of drug-coated stents.Source: MarketWatch.com - Top Stories | 19 Aug 2008 | 11:45 am Broadcom's Hot Spot (Today From Barron's)The chip maker's stock could rally 40% as it grabs a bigger slice of the smartphone market.Source: SmartMoney.com | 19 Aug 2008 | 11:44 am London Markets: Banks, property developers weigh on LondonAll but a handful of companies trade in the red on Tuesday in London, with property companies and banks leading the index down.Source: MarketWatch.com - Top Stories | 19 Aug 2008 | 11:41 am Early-Bird Analyst Upgrades & Downgrades (DKS, IDXX, MA, WIT, ACS, ADP, CHT, FMCN, NT, PTI, TSS)These are some of the upgrades and downgrades we are seeing from Wall Street this Tuesday morning:
Jon C. Ogg Source: 24/7 Wall St. | 19 Aug 2008 | 11:32 am Improving sentiment lifts euroThe euro strengthened slightly against the dollar in early trade on Tuesday, as a closely-watched survey on German investor sentiment showed a marked improvement from last month's all-time low.The single...Source: Infocious RSS raw feed - channel BNPaperBusiness | 19 Aug 2008 | 11:31 am China Wins VC Gold in 2Q08 as Investment Doubles to $1.37 Billion, Highest Quarterly Total Since 2003Source: Infocious RSS raw feed - channel BNewsBusiness | 19 Aug 2008 | 11:30 am Financials lead slide in Europe's sharesA fresh wave of financial jitters put European markets under pressure on Tuesday as banks and insurers lead the market down on worries about the health of the two titans of the US mortgage industry. At...Source: Infocious RSS raw feed - channel BNPaperBusiness | 19 Aug 2008 | 11:22 am GM to offer employee pricing to everyoneGeneral Motors Corp. on Tuesday will announce it is offering employee pricing to everyone as it tries to clear out its remaining inventory of 2008 vehicles.Source: Business and financial news - CNNMoney.com | 19 Aug 2008 | 11:19 am Stocks set for rough startStocks were poised for a tough start Tuesday as deepening worries about the financial sector and housing market balanced a further drop in oil prices.Source: Business and financial news - CNNMoney.com | 19 Aug 2008 | 11:18 am Beware the $7,500 'tax credit'Washington policy makers and housing industry insiders hope a new tax credit for first-time home buyers will get the moribund housing market moving again.Source: Business and financial news - CNNMoney.com | 19 Aug 2008 | 11:18 am Fannie, Freddie shares batteredShares of Freddie Mac and Fannie Mae on Monday suffered their worst day since a mid-July free fall and plunged to their lowest points in nearly two decades.Source: Business and financial news - CNNMoney.com | 19 Aug 2008 | 11:10 am Oil falls as storm threat easesBy midday in Europe, light, sweet crude for September delivery was down 54 cents at $112.33 after falling as low as $111.78 barrel earlier in electronic trading on the New York MercantileSource: Infocious RSS raw feed - channel BNewsBusiness | 19 Aug 2008 | 11:07 am Qantas finance chief resignsThe chief financial officer of Qantas announced his resignation on Tuesday, after he missed out on the top job at Australia's national carrier.News that Peter Gregg is stepping down came just three weeks...Source: Infocious RSS raw feed - channel BNPaperBusiness | 19 Aug 2008 | 11:06 am Motorola: Should Investors Redial? (SmartMoney Magazine)Motorola's handset business is in a lull. Should investors redial?Source: SmartMoney.com | 19 Aug 2008 | 11:05 am It's Not Easy Being Green (SmartMoney Magazine)Our portfolio of green stocks is up, but the past six months have shown it can be a rocky ride.Source: SmartMoney.com | 19 Aug 2008 | 11:04 am No Credit? No Problem! (SmartMoney Magazine)One firm profits from people who won't let a bad economy stand between them and a new TV.Source: SmartMoney.com | 19 Aug 2008 | 11:04 am How to Make Sure Your Money's Safe (SmartMoney Magazine)How to make sure your money's safe -- without keeping it under your mattress.Source: SmartMoney.com | 19 Aug 2008 | 11:04 am Off-Season Travel Tips (SmartMoney Magazine)Fifty percent off that oceanfront suite is sweet. But watch out for closed restaurants.Source: SmartMoney.com | 19 Aug 2008 | 11:04 am Economy Ready for a Rebound? (SmartMoney Magazine)Tax rebates and lower interest rates can boost stocks. You just have to know which ones.Source: SmartMoney.com | 19 Aug 2008 | 11:04 am Corporate Generosity or Forced Feeding? (SmartMoney Magazine)Workers still have too much of their employers' stock in their 401(k) accounts.Source: SmartMoney.com | 19 Aug 2008 | 11:04 am The Greatest Vintage Ever? (SmartMoney Magazine)The hype on 2005 French wines has reached, well, hyperdrive. Time to call in the tasters.Source: SmartMoney.com | 19 Aug 2008 | 11:04 am [video] Ed Braniff, CEO of Smart Energy Solutions, Inc. Discusses Partnership With InstallerNet on WallSt.net's 3-Minute Press ShowNEW YORK, Aug. 19 /PRNewswire-FirstCall/ -- Smart Energy Solutions, Inc. (OTC Bulletin Board: SMGY), a leading manufacturer of vehicle battery monitoring systems, today...Source: Infocious RSS raw feed - channel BNewsBusiness | 19 Aug 2008 | 11:00 am Financials under pressure after US fallsFears of further fall out from credit markets put pressure on London's financial sector in early trade, following sharp losses overnight for the US sector on Wall Street.By midday, the FTSE 100 was down...Source: Infocious RSS raw feed - channel BNPaperBusiness | 19 Aug 2008 | 11:00 am Boston Market(R) Brings More Choices and Better Meals for $5Company introduces $5 menu with classic rotisserie favorites GOLDEN, Colo., Aug. 19 /PRNewswire/ -- Boston Market is bringing something exciting to the $5 menu trend:Source: Infocious RSS raw feed - channel BNewsBusiness | 19 Aug 2008 | 11:00 am New, Improved Tax Climate Makes Ohio a Preferred Location for Business Development and Capital InvestmentTax reform reduces risk, helps businesses prosper COLUMBUS, Ohio, Aug. 19 /PRNewswire/ -- Business owners are choosing Ohio as a preferred location for business...Source: Infocious RSS raw feed - channel BNewsBusiness | 19 Aug 2008 | 11:00 am [video] John Barry, President & CEO of Bonds.com Group, Inc., Discusses Operating Results for Q2 2008 on WallSt.net's 3-Minute Press ShowBOCA RATON, Fla., Aug. 19 /PRNewswire-FirstCall/ -- Bonds.com Group, Inc. (OTC Bulletin Board: BDCG), a leading provider of services and solutions for the financial...Source: Infocious RSS raw feed - channel BNewsBusiness | 19 Aug 2008 | 11:00 am US stocks head for moderately lower openU.S. stocks headed for a moderately lower open Tuesday ahead of economic readings on home construction and inflation at the wholesale level as well as earnings reports from several...Source: Infocious RSS raw feed - channel BNewsBusiness | 19 Aug 2008 | 10:59 am Greencore Group plc - Interim ManagementDUBLIN, Ireland, Aug. 19 /PRNewswire-FirstCall/ -- Greencore Group plc ("Greencore" or "the Group") today issues the following Interim Management ...Source: Infocious RSS raw feed - channel BNewsBusiness | 19 Aug 2008 | 10:59 am 10 Things Millionaires Won't Tell You (10 Things)They might drive fancy cars, but they also hunt for discounts and worry about retirement.Source: SmartMoney.com | 19 Aug 2008 | 10:58 am Home Depot posts higher-than-expected profit (Reuters)
Source: Yahoo! News: Business | 19 Aug 2008 | 10:55 am Dollar mostly higher, gold fallsThe U.S. dollar was higher Tuesday morning against most major currencies in European trading. Gold prices fell. The 15-nation euro traded at $1.4652, down from $1.4697 late Monday in NewSource: Infocious RSS raw feed - channel BNewsBusiness | 19 Aug 2008 | 10:55 am Euro hits six-month dollar lowThe euro slid to a six-month low against the dollar on Tuesday amid concerns over a weaker eurozone, while the US currency fell versus the yen on fresh worries about the health of US...Source: Infocious RSS raw feed - channel BNewsBusiness | 19 Aug 2008 | 10:54 am Wienerberger brickmaker hit by 31% profit slumpThe world's biggest brickmaker has blamed a sharp downturn in profits on the collapse of the construction markets in the UK, the US and Germany.Source: Latest Business News from Times Online | 19 Aug 2008 | 10:52 am Venezuela takes over cement unitsVenezuela takes control of plants and offices belonging to Mexican cement firm Cemex as part of a nationalisation drive.Source: BBC News | Business | World Edition | 19 Aug 2008 | 10:48 am General Dynamics to buy jet servicerSource: Business and financial news - CNNMoney.com | 19 Aug 2008 | 10:43 am General Dynamics to buy Jet Aviation for $2.25 billion (Reuters)Reuters - General Dynamics Corp said it agreed to acquire Zurich-based Jet Aviation, a privately held provider of business-aviation services, for about $2.25 billion in cash.Source: Yahoo! News: Business | 19 Aug 2008 | 10:42 am General Dynamics to buy Jet Aviation for $2.25 billion(Reuters) - General Dynamics Corp said it agreed to acquire Zurich-based Jet Aviation, a privately held provider of business-aviation services, for about $2.25 billion in cash.Source: Reuters: Business News | 19 Aug 2008 | 10:42 am Another Strong Vote For Rising Oil Prices
Some experts are taking the long view and for many of them the likelihood that oil will move up is plain and simple. Dallas Federal Reserve Bank President Richard Fisher says that the case for huge increases in demand is unavoidable. According to the AP, Fisher said "If China used the same amount per capita as parsimonious Japan, Chinese consumption would total more than 18 billion barrels a year, an amount that dwarfs our country's 7.5 billion barrels." That would increase demand by a factor that OPEC and other exporting nations would not be able to handle. "Add that to new demand for oil stemming from India, the newest members of the European community, an increasingly prosperous Brazil and so on. For those trying to discern the long-term future of oil prices, this is considerable food for thought," he said. Who says oil won't go to $200 a barrel? Douglas A. McIntyre Source: 24/7 Wall St. | 19 Aug 2008 | 10:36 am Japan keeps interest rate on holdJapan holds interest rates at 0.5% amid concerns about inflation and signs of an economic slowdown.Source: BBC News | Business | World Edition | 19 Aug 2008 | 10:36 am Origin tells investors to reject £6.55bn bidThe war of words between BG Group of Britain and Australia's Origin Energy flared up again today as the two energy companies disputed the value of BG's £6.55 billion cash bid for Origin, the coal seam gas producer.Source: Latest Business News from Times Online | 19 Aug 2008 | 10:35 am Home Depot (HD) Says Housing Will Hold The Line
What was more important is that it held to its guidance for the rest of the year, a sign that the data from its retail outlets shows that spending on housing is not getting worse. That notion is contrary to much of what economists and analysts are predicting about home values and the capitulation of home owners faced with difficult conditions. While the information from Home Depot is not a perfect litmus test, it does say that consumers are willing to invest in their homes. That is almost certainly a sign that they feel housing prices will move back up soon or that they can improve the value of their homes by investing in them. The deep pessimism of homeowners may be overestimated. For its quarter ending August 3, Home Depot net income dropped 24% to $1.2 billion, or $.71 a share, with sales down 5% to $20.99 billion and same-store sales down 7.9%. The home improvement company did not move it guidance down one iota. For the year, the firm expects earnings per share from continuing operations to drop 24% and sales to fall 5%, in line with earlier guidance. Based on rising foreclosure rates and falling home prices it would have been logical to assume that HD would revise its view of the future down. As the largest retailer in its class, it should be the best bellwether of consumer sentiment about the health of the housing market for the rest of the year. Housing may not be in as much trouble as the conventional wisdom indicates. Douglas A. McIntyre Source: 24/7 Wall St. | 19 Aug 2008 | 10:27 am Chavez seizes foreign-owned cement plantsVenezuelan president Hugo Chavez has forcibly taken control of foreign-owned cement plants after failing to reach a deal to nationalise them.Source: Infocious RSS raw feed - channel BNPaperBusiness | 19 Aug 2008 | 10:24 am Chavez seizes foreign-owned cement plantsVenezuelan president Hugo Chavez has forcibly taken control of foreign-owned cement plants after failing to reach a deal to nationalise them.Source: Telegraph Business | 19 Aug 2008 | 10:24 am Babcock suspended ahead of board meetingSYDNEY, Aug 19 Shares in Australian investment firm Babcock & Brown tumbled by nearly a quarter on Tuesday on market speculation its chief executive had resigned and concerns about its funding position...Source: Infocious RSS raw feed - channel BNPaperBusiness | 19 Aug 2008 | 10:12 am Car Quality Drives Out Of Detroit (GM)(F)(HMC)(TM)
Part of the reason that investors thought GM (GM) and Ford (F) could come back was that their vehicles were as well built as their Japanese and European counterparts. The mirage of US car quality faded a bit with a new data from the University of Michigan's American Customer Satisfaction Index. The survey found that Lexus and BMW topped the list in customer satisfaction. They were followed by Toyota (TM) and Honda (HMC). Most Ford and GM products dropped down the list and Chrysler was at the bottom. The American car companies are scrambling to make smaller, more fuel-efficient vehicles which will put them in direct competition with the Japanese. Detroit may not be able to win the battle on a quality basis. That means the US firms are left with the chance to pick up market share only through offering lower prices. GM recently announced incentives across almost all of its brands. The margins on those cars will certainly drop. That should tend to increase the red ink at the company's North American operation, the segment of the company that it has to turn around. GM is undermining its own strategy. The haplessness in Detroit is quickly turning to hopelessness. The new customer satisfaction data is only hastening that process. Douglas A. McIntyre Source: 24/7 Wall St. | 19 Aug 2008 | 10:09 am Lehman looking at asset management sale: sourcesNEW YORK (Reuters) - U.S. investment bank Lehman Brothers Holdings Inc is considering options, such as selling all or part of its asset management unit, with an aim of reaching a deal by the time it releases third quarter earnings, sources said.Source: Reuters: Business News | 19 Aug 2008 | 10:01 am Rate setter warns on UK inflationA member of the Bank of England's MPC committee says in a newspaper article that inflation has to be controlled.Source: BBC News | Business | World Edition | 19 Aug 2008 | 10:00 am TDAmeritrade (AMTD), Oppenheimer (OPY), And Raymond James (RJF) Try To Dodge Auction-Rate Buy-Backs
The dog ate their homework. TDAmeritrade (AMTD), Oppenheimer (OPY), Raymond James (RJF), and several other discount brokers and financial firms have a novel and spurious defense. Since larger banks and brokerage companies made the market in auction-rates, the small investment houses were as much victims as their customers were. According to The Wall Street Journal, "The brokerages say they were merely sellers of auction-rate securities, which differentiate them from the investment banks that ran the auctions." The reasoning is a cynical disavowing of responsibility. It rests on the logic that the managements at firms like TDAmeritrade never read the fine print when they took on the right to sell auction-rates. In other words, they were morons and dupes. The argument is senseless. The smaller firms took on the risks and rewards of marketing auction-rates just as they do stocks, bonds, or mutual funds. Imagine Raymond James saying that it wants to blame Morgan Stanley (MS) for the poor performance of one of the MS mutual funds. If a Raymond James customer loses money in a fund managed by Morgan, all parties understood that there was some risk. And, Raymond James made a commission selling that investment to its customer.It would not ask Morgan to make the client whole. Oppenheimer and its peers knew exactly how the auction-rate markets worked. They almost certainly sold the paper to their clients as "cash equivalents". Now they would like to wash their hands of the matter. Ignorance is not an excuse, particularly when it is a facade. Douglas A. McIntyre Source: 24/7 Wall St. | 19 Aug 2008 | 9:49 am US bank 'to fail within months'A big US bank is likely to collapse within months as the global financial crisis worsens, a former IMF chief economist warns.Source: BBC News | Business | World Edition | 19 Aug 2008 | 9:46 am Alliance Trust promotes 'Katherine the Great'Alliance Trust has promoted chief investment officer Katherine Garrett-Cox, the fund manager who swapped the City for Dundee last year, to replace outgoing chief executive Alan Harden.Source: Latest Business News from Times Online | 19 Aug 2008 | 9:42 am Ten French troops killed in AfghanistanTen French soldiers, part of NATO's International Security Assistance Force (ISAF), have been killed in a major battle with the Taliban as NATO forces repelled an attack on a US base in the southeast of the countrySource: FT.com - US homepage | 19 Aug 2008 | 9:42 am Zimbabwe inflation rockets higherZimbabwe's rate of inflation surges above 11,250,000% as an economic crisis continues to grip the country.Source: BBC News | Business | World Edition | 19 Aug 2008 | 9:41 am Blast kills 23 in north west PakistanA suspected suicide bomber killed 23 people in northwest Pakistan, where violence poses a major test for the coalition government led by the party of slain former prime minister Benazir Bhutto, especially after the resignation of former army chief Pervez Musharraf as presidentSource: FT.com - US homepage | 19 Aug 2008 | 9:27 am Another Prediction A Large Bank Will Fail (LEH)(WB)(WM)
Someone a little closer to the action is predicting one of the large US banks will fail sometime before the end of the year. Former IMF chief economist Kenneth Rogoff sees the financial crisis getting much worse. According to Reuters, he said "We're not just going to see mid-sized banks go under in the next few months, we're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks." There may be some wisdom to his observation. The mortgage-related paper crisis appears to be getting much worse as housing default rates rise. Banks hold securities which are derivatives of credit card, home equity, and auto loan debt. The value of those is likely to fall. The failure rate of corporate "junk" debt will also rise as the economy gets worse and credit tightens. That will pull down the value of LBO paper. Based on stock price figures, the most likely candidates for disaster are Lehman (LEH), Wachovia (WB), and Washington Mutual (WM). If one of these does collapse no one knows what the Fed or Treasury will do. They may simply stand by and allow the stock prices of other banks and brokerages fall as fear about the viability of the entire system spreads. That may purge the sector of its most deeply troubled companies, but it will only leave a few strong institutions to pick up the mess. There may not be enough aid to go around. Douglas A. McIntyre Source: 24/7 Wall St. | 19 Aug 2008 | 9:20 am Financial sector weighs on Asia marketsStock markets in Asia Pacific fell on Tuesday led by the financial sector. Investors worried that economic growth would slow and profits would be reduced by continued turmoil related to the credit crisis...Source: Infocious RSS raw feed - channel BNPaperBusiness | 19 Aug 2008 | 8:50 am Russian denies buying world's most expensive houseRussia's fifth richest man denies reports that he has bought the world's most expensive home.Source: BBC News | Business | World Edition | 19 Aug 2008 | 8:38 am Xstrata suspends ferronickel mineThe world's fourth largest nickel producer, Xstrata, has shut down a ferronickel mining and processing operation in the Dominican Republic for at least four months, due to soaring input costs and lower...Source: Infocious RSS raw feed - channel BNPaperBusiness | 19 Aug 2008 | 8:27 am Brixton quotes Dylan to explain dire resultsBrixton Estates today unveiled a £237 million loss and resorted to the lyrics of Bob Dylan to describe the “apocalyptic” mindset of the UK commercial property market.Source: Latest Business News from Times Online | 19 Aug 2008 | 7:51 am Media Digest 8/19/2008 Reuters, WSJ, NYTImes, FT, Bloomberg
Reuters writes that bail-out concerns pushed down stocks in Fannie Mae (FNM) and Freddie Mac (FRE). Reuters reports that the former head economist of the IMF said a large US bank will fail. Reuters reports that GM (GM) has returned to aggressive incentives. The Wall Street Journal reports that some smaller brokerage firms are trying to fight buying back auction rate securites by saying that they were not part of the market which traded them. The Wall Street Journal writes that a Merck (MRK) trial to test Vioxx side effects was done mostly for marketing purposes. The Wall Street Journal reports that they way Nvidia (NVDA) is handling problems with some of its chips is upsetting critics. The Wall Street Journal reports that grain and soybean futures are rising again. The Wall Street Journal writes that the FDIC is pressuring other agencies to downgrade their ratings of commercial banks. The Wall Street Journal reports that Lowe's (LOW) net dropped due to problems in the housing market. The New York Times writes that it is harder than ever for big oil companies to find drilling prospects. The New York Times reports that Verizon (VZ) says it FiOS high speed product is more successful than expected. The New York Times reports that the FDA is working on a stronger label for a widely used diabetes drug, Byetta. The New York Times writes that Nymex shareholders approved a $8.3 billion takeover of CME. The New York Times reports that car buyers are becoming less satisfied with the quality of US brands. The FT reports that SageCrest, the US hedge fund, has filed for Chapter 11. The FT writes that BP said it had halted Caspian oil exports across the Caucasus altogether after a railway line in Georgia was damaged. Bloomberg reports that home-building in the US probably dropped to a 17-year low. Douglas A. McIntyre Source: 24/7 Wall St. | 19 Aug 2008 | 7:48 am Business newspaper roundup: August 19A glance at the financial pages of today's newspapersSource: Telegraph Business | 19 Aug 2008 | 7:27 am Monetary Policy Committee's Professor Tim Besley warns on pay dealsA renewed warning that inflation-busting pay deals will stoke inflation and force the Bank of England to keep interest rates higher, for longer, was issued today by Professor Tim Besley, the most hardline member of its rate-setting Monetary Policy Committee.Source: Latest Business News from Times Online | 19 Aug 2008 | 7:23 am Credit crunch may take out large US bank warns former IMF chiefThe deepening toll from the global financial crisis could trigger the failure of a large US bank within months, a respected former chief economist of the International Monetary Fund claimed today, fuelling another battering for banking shares.Source: Latest Business News from Times Online | 19 Aug 2008 | 7:06 am Gasoline prices fall to lowest levels since MayA gallon of self-serve regular drops 6.9 cents to an average of $3.740 nationally, while in California the price declines 8.1 cents to an average of $4.037.Gasoline prices have fallen to their lowest levels since May nationwide and in California, the Energy Department said Monday. Among the factors pushing prices down: falling demand and indications that Tropical Storm Fay would steer clear of Gulf of Mexico petroleum facilities. Source: L.A. Times - Business | 19 Aug 2008 | 7:00 am Southern California home sales jump 13.8% in JulyThe year-over-year increase, spurred by falling prices and foreclosures, is the first since September 2005. Los Angeles County sees a slight drop in sales.Southern California home sales rose last month for the first time in nearly three years, as steep discounts lured buyers back into a market where values have tumbled 31% over the last year. Source: L.A. Times - Business | 19 Aug 2008 | 7:00 am Chinese stock market's Olympic specialty: tumblingThe Shanghai index has fallen 15% since the Beijing Games opened, including a big hit Monday. Investors, who had hoped for a reversal of the year's downward trend, are angry.Many Chinese investors had hoped the Olympics would give a boost to their nation's sagging stock market. So far, just the opposite has happened. Source: L.A. Times - Business | 19 Aug 2008 | 7:00 am California bank stocks: The herd gets thinned againThere's no middle ground left in the field of California-based publicly traded banks.Source: L.A. Times - Business | 19 Aug 2008 | 7:00 am San Onofre nuclear power plant feeling regulatory pressureThe facility, rated among the worst overall performers in the U.S., aims to fix problems and head off increased oversight.San Onofre nuclear plant managers are scrambling to avoid stepped-up oversight from regulators and to resolve worker safety and operational problems that have put the facility's industry ratings significantly below its peers. Source: L.A. Times - Business | 19 Aug 2008 | 7:00 am UnionBanCal accepts sweetened buyout bid from Mitsubishi UFJDirectors of the San Francisco-based bank held out for a better offer -- and won. Shares soar.Corporate directors often are accused of being pushovers. But in the case of Union Bank, the directors pushed back at a lowball takeover offer from the Japanese corporate parent -- and won a hefty premium for shareholders. Source: L.A. Times - Business | 19 Aug 2008 | 7:00 am Fewer travelers likely to fly over Labor DayWith fares up and flight schedules slashed, the traditional summer holiday finale won't be as busy as last year.Higher air fares, fewer flights and a slumping economy seem to be keeping travelers closer to home for the Labor Day holiday. Source: L.A. Times - Business | 19 Aug 2008 | 7:00 am Electronic Arts lets $2-billion buyout offer for rival Take-Two expireElectronic Arts Inc. on Monday let its $2-billion hostile buyout offer for Take-Two Interactive Software Inc. expire.Source: L.A. Times - Business | 19 Aug 2008 | 7:00 am Stocks tumble on financial sector fears; Dow falls 180 pointsSpeculation of a federal takeover of Fannie and Freddie sparks a sell-off. Dow tumbles 180 points.Stocks fell sharply Monday as investors once again questioned when the financial sector would be able to turn itself around. The Dow Jones industrial average lost 180 points. Source: L.A. Times - Business | 19 Aug 2008 | 7:00 am Fuel bill hits Virgin Blue profitHigh jet fuel prices saw annual pre-tax profits at Virgin Blue, Australia's second-largest airline, fall by 55%.Source: BBC News | Business | World Edition | 19 Aug 2008 | 6:41 am New Los Angeles Times Publisher Eddy Hartenstein asserts independenceThe Southland native says he will have more latitude from Tribune bosses in Chicago.The Los Angeles Times' new publisher, Eddy Hartenstein, said Monday that the newspaper would operate with greater autonomy from its corporate parent in Chicago as it tried to reverse steep declines in circulation and revenue while overcoming the trauma of recent staff cuts. Source: L.A. Times - Business | 19 Aug 2008 | 5:46 am Large U.S. bank collapse seen aheadSINGAPORE (Reuters) - The worst of the global financial crisis is yet to come and a large U.S. bank will fail in the next few months as the world's biggest economy hits further troubles, former IMF chief economist Kenneth Rogoff said on Tuesday.Source: Reuters: Business News | 19 Aug 2008 | 5:07 am Lehman looking at asset management sale: sources (Reuters)
Source: Yahoo! News: Business | 19 Aug 2008 | 4:18 am Improvements across company boost PGG Wrightson resultPGG Wrightson Ltd posted an 80 per cent increase in annual net profit to $73.2 million on improvements across the board, and the company indicated a solid result this year. For the year ended June 30, profit excluding capital gains,...Source: New Zealand Herald - Business | 19 Aug 2008 | 1:36 am Fresh fears as Fannie and Freddie plungeFears about the financial system grew as money market liquidity tightened and sharp falls in the share prices of mortgage financiers Fannie Mae and Freddie Mac led the US stock market lowerSource: FT.com - US homepage | 19 Aug 2008 | 1:17 am After The Close - MondayFIRST SOLAR (FSLR), a solar modules maker, plans to expand its manufacturing and R&D operations in Perrysburg, Ohio, by next year's Q2, adding...Source: Investor's Business Daily: BUSINESS | 19 Aug 2008 | 12:50 am With New CEO, Company Hopes More Doctors Will Go ElectronicChange is considered a good thing for a firm that tries to get doctors to switch from paper to electronic health records and procedures.Source: Investor's Business Daily: BUSINESS | 19 Aug 2008 | 12:50 am Business Briefs - MondayPerrigo profit misses, sales beat. The generic drug maker said its Q4 EPS rose 62.5% to 39 cents ex items, missing views by 2 cents. Sales rose...Source: Investor's Business Daily: BUSINESS | 19 Aug 2008 | 12:50 am In Brief - MondayAmylin (AMLN), a biotech, and drug giant Eli Lilly expect a stronger FDA warning label for their diabetes drug after new deaths were reported...Source: Investor's Business Daily: BUSINESS | 19 Aug 2008 | 12:50 am Lehman examines Neuberger Berman sell-offLehman Brothers is holding exploratory talks with a variety of private-equity and strategic bidders about selling all or part of its asset management arm, Neuberger Berman, according to people familiar with the matterSource: FT.com - US homepage | 19 Aug 2008 | 12:48 am MoD axing staff on cheap, claims unionA trade union is accusing the Ministry of Defence of trying to get rid of 5,000 civilian defence staff "on the cheap" with the launch of a High Court action today to get improved terms.Source: Telegraph Business | 19 Aug 2008 | 12:01 am Investors may pull £18bn out of buy-to-let propertiesBeleaguered buy-to-let investors are set to pull £18bn out of the property market in the coming years, according to new research that underlines the problems facing the UK housing sectorSource: Telegraph Business | 19 Aug 2008 | 12:01 am Panmure Gordon sells 10pc stake to Gulf bank EFG-HermesMiddle Eastern investment bank EFG-Hermes has signed a deal to buy a strategic stake in London stockbroker Panmure Gordon.Source: Telegraph Business | 19 Aug 2008 | 12:01 am Germany acts to halt the 'giant locusts'Angela Merkel's government wants to keep control of the country's industrial base, writes Ambrose Evans-Pritchard.Source: Telegraph Business | 19 Aug 2008 | 12:01 am Producers' prices rise fastest in a quarter centuryHigher electricity costs drove up the prices paid and received by producers in the June quarter to the highest levels in more than quarter of a century. Figures out today from Statistics New Zealand show input prices - which measure...Source: New Zealand Herald - Business | 18 Aug 2008 | 11:41 pm AMP Office Trust profits from rising rentsRising rental income has helped the AMP NZ Office Trust (ANZO) lift full year operating profit after current tax 27 per cent to $52.2 million. ANZO chief executive Robert Lang said ANZO's rentals for the year to June 30 were 12.3...Source: New Zealand Herald - Business | 18 Aug 2008 | 11:14 pm Plan for anaerobic digesters in every town to recycle leftoversWaste-disposal units designed to turn leftover food into electricity and fertiliser could be built around every town and city as part of a scheme being considered by ministers.Source: Latest Business News from Times Online | 18 Aug 2008 | 11:01 pm Bradford & Bingley's chief Richard Pym sets sights on flawed mortgage dealRichard Pym, Bradford & Bingley's new chief executive, was formally confirmed in the job on a £3 million package yesterday and immediately vowed to grapple with an adverse contract that obliges the bank to buy flawed mortgages from GMAC.Source: Latest Business News from Times Online | 18 Aug 2008 | 11:00 pm BP to do away with nine-day fortnightBP is to scrap its nine-day fortnight for thousands of workers as part of a wide-ranging efficiency drive.Source: Latest Business News from Times Online | 18 Aug 2008 | 11:00 pm NZ Shares: Market slips as big trades reportedThe New Zealand sharemarket opened down, as large trades in some of the country's largest listed companies were reported. Sharebrokers said that shortly before the market opened trades of 25 million Telecom shares, 13.3 million...Source: New Zealand Herald - Business | 18 Aug 2008 | 10:48 pm Economy - Monday (Investor's Business Daily)Investor's Business Daily - Gov't-insured mortgages accounted for more than 29% of all loan applications in July vs. 8.4% a year earlier, said the Mortgage Bankers Assoc. The gov't market share hit a low of 5.8% 3 years ago. Demand for home loans backed by Federal Housing Administration has increased as private funding has dried up and the gov't has expanded the FHA's scope. FHA loans are insured by the gov't in the event of default, but the actual mortgages are made by major lenders.Source: Yahoo! News: Business | 18 Aug 2008 | 10:44 pm Nymex takeover wins approvalThe CME Group has won member approval for its $7.6bn takeover of Nymex, the New York energy exchange, creating a company that will dominate the US derivatives sector with control of 98 per cent of listed futuresSource: FT.com - US homepage | 18 Aug 2008 | 10:27 pm Expanded mobile market hits snagsMobile phone users face delays for better deals as NZ Communications sets back plans for a third network and Telecom reviews its new 3G network. The Minister of Communications, David Cunliffe, has called Vodafone and Telecom to...Source: New Zealand Herald - Business | 18 Aug 2008 | 10:00 pm Cuba looks at trimming social welfareA government official tells the FT that Cubans have been 'over-protected' by a system that subsidised food and limited wages – prompting labour shortages in key industriesSource: FT.com - US homepage | 18 Aug 2008 | 9:38 pm VIX Index of U.S. Stock Option Prices Advances 7.1 % to 20.98Source: Bloomberg - All Podcasts | 18 Aug 2008 | 9:25 pm Satara posts 30pc profit rise for half yearKiwifruit processor Satara Co-operative Group has posted a 30 per cent rise in first half net profit to $1.7 million. The company today said it was forecasting to pack 12.5m trays this year, a slight increase on the prior year,...Source: New Zealand Herald - Business | 18 Aug 2008 | 9:00 pm Worries over financials drag Wall St downWall Street stocks fell sharply as investors soured on financials, worrying about possible dilutive capital raising by Freddie Mac and Fannie MaeSource: FT.com - US homepage | 18 Aug 2008 | 8:36 pm El-Erian Says Banks Face Harder Time Raising CapitalSource: Bloomberg - All Podcasts | 18 Aug 2008 | 8:10 pm Kiwi dollar above US71c for first time 10 daysThe New Zealand dollar broke back above US71c for the first time in 10 days overnight but was flagging by the time the local market opened. Around 8am the kiwi was buying US70.95c, having climbed towards US71.60c earlier today...Source: New Zealand Herald - Business | 18 Aug 2008 | 8:00 pm Fannie and Freddie in the ToasterThe fear is that shares of Fannie Mae and Freddie Mac will become worthless if there is a government bailout. The way things are going, the government may not get a chance to act before the shares are at zero.For that fear flared up in a big way today: Shares of the two mortgage giants tumbled more than 22 percent, helping to drag down the broader stock market. Concerns that the two government-created companies lack sufficient capital to cover additional mortgage-related losses have been pounding their stocks for months. Fannie Mae is down more than 83 percent for the year, while its smaller brother, Freddie Mac, is down about 86 percent. Today's sell-off was apparently set off by an article by Jonathan Laing in Barron's, which contends that a recapitalization by the government—which would wipe out shareholders—looks increasingly inevitable. "An insider in the Bush administration tells Barron's Fannie and Freddie are being jawboned by the Treasury Department and their new regulator, the Federal Housing Finance Agency (F.H.F.A.), to raise more equity," Laing writes. "But government officials don't expect the agencies to succeed. For one thing, only a "capital raise" of $10 billion or more apiece would have any credibility. Yet, what common-stock investors would advance that kind of money to entities that have market capitalizations of $8.5 billion (Fannie) and $4 billion (Freddie), especially as the F.H.F.A. will use its new powers to boost dramatically the regulatory capital the G.S.E.'s must have in coming years?" Financial stocks fell sharply today, and the broad market indexes closed down 1.5 percent. "The stock market has been able to absorb a lot of bad news relatively well over the last few weeks," Jim Paulsen of Wells Capital Management told the Wall Street Journal. "But on a day like this, when you don't have new economic data coming out, none of that matters. People see the news and go back to focusing on their worst nightmares." There is a growing consensus that the endgame for the two companies is near. "We agree with the call for Treasury intervention and think it is very, very likely to happen before the end of the third quarter,'' Ajay Rajadhyaksha, the head of fixed-income strategy for Barclays Capital, told Bloomberg News. "Without government help, we think there is very little chance of Freddie completing a significant capital raising.'' A rescue of Fannie and Freddie would be necessary because of the crucial role the two play in the housing market. They are the two largest buyers of American mortgages, and hold nearly half of all mortgage-related debt, about $5 trillion. Related Links The July Curse Mortgage Brokers, RIP The End of Mortgage Brokers, Part 2 Source: Portfolio.com: Top 5 | 18 Aug 2008 | 8:00 pm More delays at Pike River mineDifficult tunnelling at Pike River's mine near Greymouth means it will not hit coal for a month. The final push to complete a 2.3km access tunnel through to the Brunner seam has hit more fractured rock than expected. It was...Source: New Zealand Herald - Business | 18 Aug 2008 | 7:30 pm Nato in display of unity over GeorgiaNato's 26 foreign ministers are determined to present a united front in expressing continued support for Georgia's membership of the western alliance and insisting that Russian troops complete a withdrawalSource: FT.com - US homepage | 18 Aug 2008 | 7:04 pm Can't afford gas? Try a 'commuter bike'One up side of high gas prices is that many people are choosing alternate and more environmentally friendly means of transportation. bicycling is on that list. Sean Cole reports on a bicycle hand made for commuters.Source: Marketplace | 18 Aug 2008 | 7:01 pm F&P Appliances shares plunge on profit warningShares in Fisher & Paykel Appliances plunged 11.5 per cent yesterday after it warned first half profit could halve as the whiteware maker struggles with high raw material prices, a slowing market and costs associated with its factory...Source: New Zealand Herald - Business | 18 Aug 2008 | 7:00 pm Campaign staffers and political tiesSen. John McCain's been getting heat for having lobbyists on his campaign staff. But commentator Jeff Birnbaum says it's becoming difficult to avoid hiring experts with connections.Source: Marketplace | 18 Aug 2008 | 6:59 pm Lobbyists to party up convention VIPsLobbyists aren't dumb. When a political convention is in town, it's time to party -- and to promote their causes -- by inviting all the Congress people and other convention VIPs. Jeremy Hobson asks, is that allowed?Source: Marketplace | 18 Aug 2008 | 6:58 pm Furniture maker brings jobs back to U.S.High gas prices aren't all bad. They've prompted furniture manufacturer Thomasville to localize manufacturing and give some Americans their jobs back. Dave DeWitt has more.Source: Marketplace | 18 Aug 2008 | 6:57 pm Mitsubishi raises bid for UnionBanCalMitsubishi Financial Group, Japan's largest bank, has raised its bid for California's second biggest bank. The deal could become the biggest takeover of a U.S. bank this year. Alisa Roth gets some prespective.Source: Marketplace | 18 Aug 2008 | 6:38 pm McDonald exits BNZKerry McDonald is to step down as a director and chairman of the Bank of New Zealand on November 7. John Waller, a non-executive director of the bank, had been appointed chairman designate and would take over when McDonald left,...Source: New Zealand Herald - Business | 18 Aug 2008 | 6:30 pm Olympic TV ads are golden for NBCNBC says the high ratings from the Beijing Olympics are proof that there's hope for TV networks. But will the success carry over once the games are over? Marketplace's Jeff Tyler has more.Source: Marketplace | 18 Aug 2008 | 6:26 pm Freddie and Fannie back in the newsOne report says Treasury officials are worried the mortgage giants won't survive without government help. Their true value of assets on their books is questoned too. Steve Henn reports.Source: Marketplace | 18 Aug 2008 | 6:24 pm What happens now in Pakistan?Pakistan is very important to American efforts to bring stability to Middle East economies, and President Pervez Musharraf's departure raises many concerns. Kai Ryssdal talks to an expert on Pakistan's economy.Source: Marketplace | 18 Aug 2008 | 6:10 pm Piling On GoldmanSince the credit crisis began, Goldman Sachs has been one of the safest bets in the financial sector.But it bears reminding that even the most secure building in a war-torn city is vulnerable to getting hit. And Goldman investors are now hearing that reminder loud and clear. In the past week, one Wall Street analyst after another has downgraded Goldman's outlook for the quarter and the year. Its shares are down 10 percent just in the past week. Today's 2 percent fall comes after the analyst who covers Goldman for Fox-Pitt cut his third-quarter estimate to $1.95 from $3.26. This follows downgrades last week by analysts at UBS, Oppenheimer, Deutsche Bank, and others. Nothing happened to spur the downgrades except that all of the Wall Street analysts seem to have concluded simultaneously that the weakness in global indexes is likely to impact Goldman more than anyone previously thought. While Goldman escaped much of the turmoil following the collapse of the mortgage market, it is more vulnerable than its peers to a collapse in global equities. Many major indexes around the world are down more than 20 percent. But the shine hasn't completely tarnished from Goldman's golden image. The firm is raking in fees from some of the biggest mergers so far this year, Dealbook notes. It's set to take in $40 million for advising Anheuser-Busch on its sale to InBev. It already received $46 million for advising Wrigley on its sale to Mars. And, despite the recent analyst downgrades and its slumping share price, Goldman has still managed to outperform its peers. In the past three months, Goldman's shares have fallen less than those of Merrill Lynch, Citigroup, J.P. Morgan, and Lehman. Its share decline matches Morgan Stanley's for the period. Goldman's quarter ends this month, and it will report earnings in mid-September. Wall Street analysts were wise to readjust their expectations for the bank, but it's not time to rip the yellow jersey off Goldman just yet. Related Links Job Security Fed: Wall Street Needs More Time The He Said, She Said Economy Source: Portfolio.com: Top 5 | 18 Aug 2008 | 5:30 pm Goldman Sachs Third-Quarter Estimate Cut at Fox-Pitt KeltonSource: Bloomberg - All Podcasts | 18 Aug 2008 | 2:07 pm
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The tug-of-war over oil prices has been going to the bears recently. Even with a storm near the Gulf of Mexico, crude moved down toward $112.
Nouriel Roubini, the NYU economist, has predicted the US is moving into its worst downturn since the Great Depression. He forecasts that hundreds of banks will fail. But, he is an "independent" on the outside looking in at the crisis in the banking and mortgage industries.
