Michael Dell and Facebook

Write something about Dell online, and chances are the company will know about it in an hour or so. Dis the company in a blog or a Facebook group, and someone from a crack response team may even chime in, if only to let everyone know that Dell cares.

Source: Business and financial news - CNNMoney.com | 5 Sep 2008 | 1:09 pm

US unemployment spikes to 5-year high

Fears about the health of the US economy were reignited after data showed that the unemployment rate spiked unexpectedly to 6.1 per cent – the highest in five years – as employers shed 84,000 positions in August, the eighth consecutive month of job losses
Source: FT.com - US homepage | 5 Sep 2008 | 1:09 pm

Jobless rate soars to 6.1%

The unemployment rate soared to a nearly five-year high in August, topping 6%, as employers trimmed jobs for the eighth straight month, according to the latest government reading Friday that came in weaker than forecasts.

Source: Business and financial news - CNNMoney.com | 5 Sep 2008 | 1:04 pm

Oil prices edge off their lows

Oil prices edged off their early morning lows Friday as market participants remained focused on how a global economic slowdown will chip away at demand for energy.

Source: Business and financial news - CNNMoney.com | 5 Sep 2008 | 1:03 pm

Nokia sees loss in share

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 5 Sep 2008 | 1:01 pm

Bank of America says ready to settle on auction rates

NEW YORK (Reuters) - Bank of America Corp, said it is ready to settle federal and state probes into the marketing of auction-rate securities, joining eight other companies that reached agreements.

Source: Reuters: Business News | 5 Sep 2008 | 1:01 pm

August jobless rate at 4-1/2 year high

WASHINGTON (Reuters) - The U.S. unemployment rate unexpectedly shot up to 6.1 percent in August, its highest in more than 4-1/2 years, as employers cut payrolls for an eighth straight month and labor markets showed signs of accelerating decline.

Source: Reuters: Business News | 5 Sep 2008 | 1:01 pm

US jobless rate near 5-year high

The US economy sheds 85,000 jobs last month, raising the jobless rate to a near five-year high.
Source: BBC News | Business | World Edition | 5 Sep 2008 | 1:00 pm

Gas guzzling temptation rises

Although it was a painful summer for most drivers, it could have been worse had Americans not cut back on their gasoline consumption. Now, as summer ends and gasoline prices fall, drivers may be tempted to resume their gas guzzling habits.

Source: Business and financial news - CNNMoney.com | 5 Sep 2008 | 12:57 pm

Stocks set for sharp drop

Stock futures were sharply lower Friday following a report showing unemployment surged to a five-year high in August as the economy continued to shed jobs.

Source: Business and financial news - CNNMoney.com | 5 Sep 2008 | 12:55 pm

Wall St set for losses after grim jobs data

Wall Street stocks were set for their longest losing streak since January after the US unemployment rate jumped to its highest for nearly five years
Source: FT.com - US homepage | 5 Sep 2008 | 12:54 pm

Pimco names El-Erian CEO; Thompson to retire

NEW YORK (Reuters) - Pacific Investment Management Co, the world's biggest manager of bond funds, named Mohamed El-Erian as its sole chief executive after co-CEO Bill Thompson retires at the end of the year.

Source: Reuters: Business News | 5 Sep 2008 | 12:52 pm

Jobless rate jumps to 5-year high of 6.1 percent

The nation's unemployment rate zoomed to a five-year high of 6.1 percent in August as employers slashed 84,000 jobs, dramatic proof of the mounting damage a deeply troubled economy is inflicting on workers and businesses alike.

Source: L.A. Times - Business | 5 Sep 2008 | 12:51 pm

Nokia stuns market with strong warning

The world's top mobile phone maker Nokia warned its market share would suffer because of the soft global economy, tough competition from rivals and a weak handset portfolio
Source: FT.com - US homepage | 5 Sep 2008 | 12:50 pm

Nokia warns on Q3 as rivals, economy take toll

HELSINKI (Reuters) - The world's top mobile phone maker Nokia warned on Friday that the soft global economy, tough competition from rivals and a weak handset portfolio would hit its market share in the third quarter.

Source: Reuters: Business News | 5 Sep 2008 | 12:49 pm

Nokia warns it's losing market share in third quarter

Shares of Nokia Corp. fall nearly 10% Friday after the world’s largest maker of mobile phones warns that its market share would decline sequentially in the third quarter and says the overall mobile-phone market would be hurt by weaker consumer spending in many regions.

Source: MarketWatch.com - Top Stories | 5 Sep 2008 | 12:49 pm

Unemployment Soars to 6.1% On Way to 8%

Source: 24/7 Wall St. | 5 Sep 2008 | 12:43 pm

Futures dive on bleak August jobs data

NEW YORK (Reuters) - U.S. stock futures sharply extended losses on Friday as a government report showed the U.S. economy shed 84,000 jobs in August, significantly more than economists had expected, and the unemployment rate climbed to a 4-1/2-year high.

Source: Reuters: Business News | 5 Sep 2008 | 12:43 pm

The Ratings Game: Merrill falls after Goldman downgrade

Shares of Merrill Lynch & Co. are down more than 5% in pre-trading Friday after Goldman Sachs downgrades the bank to sell from neutral. Goldman also adds Merrill to its Conviction Sell list, citing valuation and the likelihood of further write-downs.

Source: MarketWatch.com - Top Stories | 5 Sep 2008 | 12:42 pm

Before the Bell: Jobs data, Merrill Lynch, Dell, Altria, SanDisk in focus

U.S. stock market futures extended losses Friday after a bigger-than-expected decline in August nonfarm payrolls and a sharp jump in the unemployment rate, with a downgrade of Merrill Lynch adding to the pessimistic mood.

Source: MarketWatch.com - Top Stories | 5 Sep 2008 | 12:41 pm

Indications: U.S. stock futures drop on unemployment spike

U.S. stock futures dropped sharply on Friday as the economy shed more jobs than forecast and the unemployment rate spiked higher, with a broker’s recommendation to sell Merrill Lynch and a warning from Nokia also contributing to a pessimistic mood.

Source: MarketWatch.com - Top Stories | 5 Sep 2008 | 12:36 pm

5 Mistakes Home Buyers Make (Consumer Action)

Make one of these missteps and buying a new home will be a much costlier proposition.

Source: SmartMoney.com | 5 Sep 2008 | 12:30 pm

Economic Report: Jobless rate soars unexpectedly to 6.1% in Aug.

WASHINGTON (MarketWatch) - The unemployment rate soared to 6.1% in August, the highest rate in almost five years, as the economy took a turn for the worse.

Source: MarketWatch.com - Top Stories | 5 Sep 2008 | 12:30 pm

Nokia (NOK) Cries "Uncle" Who Will Take It Business?

Nokia (NOK) made a number of odd statements today, the net effect of which was to drive the firm's stock down 10%. For starters, it said its global market share in the third quarter would be below where it was in the second quarter. For some reason, it held to its prediction about market share being strong for the full-year 2008. If the company was wrong about the current quarter, why would it be right about what will happen next?

Beyond that, the world largest handset company, which has about 40% of the global market last quarter, said it still believes that overall demand for cell phones will grow modestly this year.

According to MarketWatch, "Nokia expects industry mobile device volumes in 2008 to grow 10% or more from the approximately 1.14 billion units it estimated for 2007."

The great mystery is who will pick up the market share that Nokia is losing? It is unlikely to be Motorola (MOT) which has been bleeding for almost two years. That leave the probable list of suspects at Sony Ericsson and Samsung.

Some one will do well in the cell phone industry this quarter but it is anyone's guess who that will be.

Douglas A. McIntyre

Source: 24/7 Wall St. | 5 Sep 2008 | 12:23 pm

Renewable energy's biggest wish

While politicians off all stripes are vying to be seen as saviors in the energy crisis, Congress isn't giving renewable energy investors the one thing they say would help the most - long-term tax credits.

Source: Business and financial news - CNNMoney.com | 5 Sep 2008 | 12:19 pm

Boeing workers frustrated, angry at strike delay

EVERETT, Washington (Reuters) - Less than a day after voting to strike, Boeing workers expressed frustration and anger on Thursday at the decision by union leaders to postpone a walkout and negotiate further with the company.

Source: Reuters: Business News | 5 Sep 2008 | 12:07 pm

Talks over Tata Nano car deadlock

Talks begin in the Indian city of Calcutta to try to end a row over the building of the world's cheapest car, the Tata Nano.
Source: BBC News | Business | World Edition | 5 Sep 2008 | 12:04 pm

A Deal Up to Snuff

At the moment, the only thing less popular than big mergers may be smoking.

Which is why a report that Altria Group, home of Marlboro and other cigarette brands, is in talks to buy UST, maker of Skoal and Copenhagen smokeless tobacco, gives such a kick.

Andrew Ross Sorkin and Andrew Martin of the New York Times report that Altria is in negotiations to buy UST for more than $10 billion, but they caution that the talks are at a delicate stage and could fall apart.

A deal would be Altria's first since it split off its international business in March. Earlier, it had spun off Kraft Foods.

Going further down tobacco road may seem curious at first glance: Cigarette use has been steadily dropping in the United States, falling at a 3 to 4 percent annual rate.

But diversification for cash-rich Altria is not an option. The market will penalize the value of the other businesses because of the potential liability from the U.S. tobacco business. For years, its former food and beverage businesses were undervalued, and, while it is still early, so were its international operations.

Smokeless tobacco is a natural extension for Altria, and it had been building its own presence in that market. UST is the leader in that market, with sales of nearly $2 billion last year.

Altria also bought John Middleton, a maker of cigars and pipe tobacco, last year.

A new administration next year in Washington may think otherwise, but Big Tobacco has arguably already taken its biggest hits in terms of regulation and legal liability. This may be why an investor like Nelson Peltz has recently built up stakes in several tobacco companies, including UST and Philip Morris International.

The next step now being considered by Congress would be to have the Food and Drug Administration regulate tobacco products.

By being bigger in tobacco, Altria, or Philip Morris USA, would have advantages of scale regardless of the regulatory environment.

 

 

Related Links
Altria 2: And What Business Are You In?
Setting the International Marlboro Man Free
Supremes Agree On Five Cases


Source: Portfolio.com: Top 5 | 5 Sep 2008 | 12:00 pm

Top Pre-Market Analyst Upgrades (HD, ILMN, MFE, NAV, OMX, VTA, VRNM, WAT)

These are some of the top upgrades or positive calls we are seeing from analysts this Friday morning:

• Home Depot (HD) Started as Outperform at FBR.
• Illumina (ILMN) Started as Overweight at Morgan Stanley.
• McAfee (MFE) Started as Buy at American Technology & Research.
• Navistar (NAV) Raised to Overweight at JPMorgan.
• OfficeMax (OMX) Started as Outperform at FBR.
• Van Kampe Dynamic Credit Fund (VTA) Started as Perform at Oppenheimer.
• Verenium (VRNM) Started as Buy at Lazard.
• Waters Corp. (WAT) Started as Overweight at Morgan Stanley.

Jon C. Ogg
September 5, 2008

Source: 24/7 Wall St. | 5 Sep 2008 | 11:59 am

Top Pre-Market Analyst Downgrades (AFFX, CLNE, MER, NTRS, SPLS, TU)

These are some of the top downgrades or cautious calls we are seeing from analysts this Friday morning:

• Affymetrix (AFFX) Started as Underweight at Morgan Stanley.
• Clean Energy (CLNE) Cut to Underperform at National Bank.
• Merrill Lynch (MER) Cut to Sell at Goldman Sachs.
• Northern Trust (NTRS) Cut to Sell at Sandler O'Neill.
• Staples (SPLS) Started as Underperform at FBR.
• Telus Corp. (TU) Cut to Neutral at UBS.

Jon C. Ogg
September 5, 2008

Source: 24/7 Wall St. | 5 Sep 2008 | 11:57 am

Samsung mulls buying SanDisk

Samsung Electronics Co., the world’s largest producer of flash-memory chips, said Friday it is considering buying U.S. chipmaker SanDisk Corp., but added that a decision has not yet been made.

Source: MarketWatch.com - Top Stories | 5 Sep 2008 | 11:54 am

Pakistan 'needs help' on economy

Pakistan needs a "substantial" injection of external funds if it is to stabilise its economy, an IMF official says.
Source: BBC News | Business | World Edition | 5 Sep 2008 | 11:46 am

Goldman Sachs Pans Merrill Lynch (MER, GS)

Source: 24/7 Wall St. | 5 Sep 2008 | 11:37 am

Samsung mulls SanDisk buy

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 5 Sep 2008 | 11:35 am

Commodities Corner: OPEC needs a floor and ceiling for oil stability

Major oil producers will have to feel for a floor and ceiling to guide their way in the dark as they work to find balance for an oil market that's seen the price of a barrel of crude drop by nearly 30% in two months.

Source: MarketWatch.com - Top Stories | 5 Sep 2008 | 11:31 am

London Markets: Royal Bank of Scotland, Barclays drop in lower London

Shares in London decline sharply again on Friday, with Royal Bank of Scotland and Barclays falling sharply amid fresh worries about the health of the U.S. banking sector.

Source: MarketWatch.com - Top Stories | 5 Sep 2008 | 11:30 am

Euro hits lowest against dollar since October 2007

The euro on Friday sank to its lowest level against the US currency since October 24, 2007, continuing its slide to hit a fresh low of 1.4196 dollars in early afternoon trade.
Source: Infocious RSS raw feed - channel BNewsBusiness | 5 Sep 2008 | 11:29 am

Currencies: Euro, British pound stabilize after rout

The euro and the British pound were little changed against the U.S. dollar Friday, stabilizing after a further rout against the greenback as traders moved to the sidelines ahead of key U.S. labor market data.

Source: MarketWatch.com - Top Stories | 5 Sep 2008 | 11:13 am

Assurant signs warranty accord with GE unit

Specialty insurer Assurant Inc. has agreed to acquire the warranty management business of General Electric Co.'s appliance and consumer electronics division. Under the formal accord with
Source: Infocious RSS raw feed - channel BNewsBusiness | 5 Sep 2008 | 11:12 am

Russia's MTS to sell iPhone

Source: Business and financial news - CNNMoney.com | 5 Sep 2008 | 11:11 am

Altria in advanced talks to buy UST for $10 bln: report

CHICAGO (Reuters) - Altria Group Inc is in advanced talks to buy Skoal and Copenhagen smokeless tobacco maker UST Inc for $10 billion, the New York Times reported on Friday, citing people close to the negotiations.

Source: Reuters: Business News | 5 Sep 2008 | 11:04 am

FTSE sinks further into bear market territory

Shares in London sank further in bear market territory on Friday as banks were once again under pressure because of mounting concerns about their sources of funding.The FTSE 100 lost a further 64 points,...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 5 Sep 2008 | 11:01 am

[video] Stocks Covered on This Week's Episode of WallSt.net's News Magazine: HCPC, EXOU, ALSE, COOL, ADG, CHKP, ADSK, BZP, EAG, CSCO

NEW YORK, Sept. 5 /PRNewswire-FirstCall/ -- WallSt.net's News Magazine is a half-hour television program that is scheduled to air on Sundays at 5:30 p.m. EDT (2:30...
Source: Infocious RSS raw feed - channel BNewsBusiness | 5 Sep 2008 | 11:00 am

Penn Treaty to Sell Agency Subsidiary

ALLENTOWN, Pa., Sept. 5 /PRNewswire-FirstCall/ -- Penn Treaty American Corporation (NYSE: PTA) today announced that it has entered into a non-binding letter of intent to...
Source: Infocious RSS raw feed - channel BNewsBusiness | 5 Sep 2008 | 11:00 am

Informa shares fall after it rejects takeover bid

Shares at Informa PLC, the London-based publisher of Lloyd's List maritime newspaper, fell 6 percent on Friday after the company rejected a reduced takeover bid from a private equity...
Source: Infocious RSS raw feed - channel BNewsBusiness | 5 Sep 2008 | 10:58 am

US stocks look to extend losses ahead of job data

Wall Street looked to extend its losses on Friday, with investors worried that the government's August jobs report will show that the economy is in recession. Investors are awaiting data
Source: Infocious RSS raw feed - channel BNewsBusiness | 5 Sep 2008 | 10:57 am

Columbia Bancorp to close mortgage business, cut jobs

(Reuters) - Columbia Bancorp , the holding company for Columbia River Bank, said it plans to close its mortgage banking division, affecting about 39 jobs, as it strives to cut costs amid a...
Source: Infocious RSS raw feed - channel BNewsBusiness | 5 Sep 2008 | 10:56 am

Columbia Bancorp to close mortgage business, cut jobs

(Reuters) - Columbia Bancorp , the holding company for Columbia River Bank, said it plans to close its mortgage banking division, affecting about 39 jobs, as it strives to cut costs amid a difficult mortgage market.

Source: Reuters: Business News | 5 Sep 2008 | 10:56 am

Foreign Buyers Start To Shift Though US Tech Wreckage

Samsung, one of the largest companies in South Korea, says it may want to buy US flash chip company Sandisk (SNDK). The US firm's stock has dropped from a 52-week high of $56.46 to under $14. If flash memory prices stop falling soon, the acquisition would be a great deal.

What appears to be happening now is that foreign money is turning from buying distressed US financial assets and moved its interests to tech. It could be persuasively argued that there is less risk in own American companies with hard assets and fixed customer bases than banks which could still face billion of dollars of write-offs. The great pools of capital sitting outside the US may be realigning their intentions.

It would be an understatement to say that a large number of US hardware and software operations are "on sale." Baidu (BIDU), a relative small internet company in China, has a market cap about half that of much largest online operation Yahoo! (YHOO). And, Baidu's shares trade near a 52-week low.

The value proposition becomes more pronounced with companies like Motorola (MOT). Its market cap is $20 billion and its handset division, which is shrinking, is worth much less than that. Samsung has 14% of the global market share in the cellphone business. Motorola has 13%. That piece of the worldwide market in on sale for next to nothing.

A look across the tech landscape in the US shows the detritus of over-leverage companies which pushed expansion into a slowing economy or ones that made bad M&A decisions. Corporations including AMD (AMD) and Sprint (S) sell for a tiny fraction of what they were worth two or three years ago.

Foreign money may be slow getting into the American tech industry, but it is likely to find bargains at the bottom of the pile.

Douglas A. McIntyre

Source: 24/7 Wall St. | 5 Sep 2008 | 10:53 am

Easyjet's passenger numbers rise

Easyjet says the number of passengers it flew in August this year rose 24% on August 2007.
Source: BBC News | Business | World Edition | 5 Sep 2008 | 10:52 am

Oil falls ahead of OPEC meeting

By midday in Europe, light, sweet crude for October delivery was down $1.39 to $106.50 a barrel in electronic trading on the New York Mercantile Exchange. The contract overnight fell...
Source: Infocious RSS raw feed - channel BNewsBusiness | 5 Sep 2008 | 10:48 am

Our daughter's money

You can't protect your kids from making financial mistakes, but you can provide them with the tools to learn fiscal responsibility on their own.

Source: Business and financial news - CNNMoney.com | 5 Sep 2008 | 10:48 am

Asia Markets: Indexes flirt with lows after a bad day, worse week

Asian markets fall sharply, with stocks taking a hit across the board after fresh worries about the health of the U.S. economy lead to a sell-off on Wall Street.

Source: MarketWatch.com - Top Stories | 5 Sep 2008 | 10:37 am

Hat Trick Beverages (HKBV) Receives Proposal to Merge With Italian Manufacturer

TORONTO, Sept. 5 /PRNewswire-FirstCall/ - Hat Trick Beverages Inc. (HKBV.PK) is pleased to announce that it has received an initial proposal to merge with a privately held...
Source: Infocious RSS raw feed - channel BNewsBusiness | 5 Sep 2008 | 10:30 am

BHP stops ore output after deaths

BHP Billiton suspends all iron ore production in Western Australia after the deaths of two workers in the space of ten days.
Source: BBC News | Business | World Edition | 5 Sep 2008 | 10:29 am

What Happens When Citigroup (C) Fails?

If the markets are to take bond guru Bill Gross at his word, the world's financial markets could go through a cataclysmic failure. The head of fixed income fund operation Pimco says that a rapid sale of assets by banks, brokers, and hedge funds will cause the credit system to collapse. Almost all of these companies need cash and none of them wants to be left holding the bag if housing and commercial markets go to pieces.

The unusually eloquent Gross recently wrote "This rarely observed systematic debt liquidation is what confronts the U.S. and perhaps even the global financial system at the current time. Unchecked, it can turn a campfire into a forest fire, a mild asset bear market into a destructive financial tsunami."

Gross wants the US Treasury to move into the market and buy distressed assets to stop the knife from falling.

The problem with the Gross program is that the US Treasury may be nearly broke. To get it "unbroke" tax-payers will have to be tapped for extra dollars. American citizens are not exactly flush with cash.

If the financial industry is forced to continue selling holdings at prices well below where they were set eighteen months ago, some of the nation's largest banks and brokerages are going to get into much deeper trouble. At some point, their ability to borrow money or sell equity will be deeply compromised. A panic will set in as investors realize that the huge firms may have more liabilities than assets.

Gross's worst case would mean that some operations like Citigroup (C), Merrill Lynch (MER), Wachovia (WB), and Lehman (LEH) might not make it as independent entities. If the Treasury is asked to make a series of rescues, the tax-payer will end up owning them. The problem is that he is stretched too thin to afford the down payment.

Douglas A. McIntyre

Source: 24/7 Wall St. | 5 Sep 2008 | 10:26 am

European shares extend losses

European stocks sank for the third consecutive session on Friday as investors sold banks and metals stocks amid growing jitters about the health of the global economy ahead of key US employment data. In...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 5 Sep 2008 | 10:20 am

Chavez takes over fuel transport

Venezuela's President Hugo Chavez approves a plan to take over the firms that distribute fuel to households and petrol stations.
Source: BBC News | Business | World Edition | 5 Sep 2008 | 10:14 am

GDF Suez to buy Dutch North Sea assets

Newly-formed French energy group GDF Suez said on Friday it was in exclusive talks to buy over 1bn worth of offshore oil and gas assets from a Dutch venture owned by Royal Dutch Shell and ExxonMobil.The...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 5 Sep 2008 | 10:11 am

Dollar feels pressure ahead of jobs data

The dollar gave back early gains on Friday as traders squared positions ahead to the US employment report later in the session.The US currency advanced strongly against the euro on Thursday as Jean-Claude...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 5 Sep 2008 | 10:09 am

Asia, Europe markets sink after Wall Street plunge

Asian stock markets plunged Friday in the wake of a sell-off on Wall Street amid mounting concerns about a slump the U.S. economy and its impact on the global economy. European shares also...
Source: Infocious RSS raw feed - channel BNewsBusiness | 5 Sep 2008 | 10:06 am

Yahoo!'s (YHOO) Five-Year Low To Get Lower, The Weakness Of The Internet No Longer Ignored

Yahoo! (YHOO) moved close to its five-year low yesterday, trading down at $17.75. It really has not been so long ago that Microsoft (MSFT) made its $33 bid for the portal company.

Yahoo!'s market cap is now down to $24 billion. By many estimates, its ownership in China online company Alibaba and Yahoo! Japan are worth $10 billion. That would put the value of Yahoo! itself at $10.

The analysis of Yahoo! without its overseas asset holdings has been done many times before.

The falling value of Yahoo! points to a more sinister trend. With the possible exception of Google (GOOG), most online firms are worth less than they were a year ago, two years ago, and perhaps five years ago. The market had always hoped that online advertising would grow at 25% or 30% a year. That forecast made sense. Americans spend as much time online as they do watching TV.

Ipso facto the internet should get as many advertising dollars as the networks do. But, they don't and perhaps they never will because, from a revenue standpoint, the internet has become its own worst enemy.

Measuring consumer behavior based on TV commercials, radio commercials, and even newspaper ads is nearly impossible. Does the man who sees the Ford commercial on his tube go to a dealership or the auto company's website? In most cases, no one knows.

The internet on the other hand may be the best direct response medium ever invented. Advertisements on websites are set up to solicit immediate action. The results from each online marketing campaign can be measured to an excruciating level.

As far as revenue goes, the internet has been constructed in a way that allows it to undermine its own best interests. What can be measured can be easily rejected.

No one likes a loser.

Douglas A. McIntyre

Source: 24/7 Wall St. | 5 Sep 2008 | 10:04 am

A Bail-Out For China's Biggest Bank, As Pimco Warns Global Markets Will Get Worse

Perhaps some day the Fed will run out of money. The equivalent is happening in China. The People’s Bank of China managed to put a truck-load of money into US mortgage-backed securities and paper issued by Fannie Mae (FNM) and Freddie Mac (FRE).

It is hard to be critical of the communist bankers since they made the same mistake as almost every large financial firm in the US and EU.

It is nice to be a big bank in China. The government is willing to lend a hand. According to The New York Times, "Most likely, the finance ministry would simply transfer bonds of other Chinese government agencies to the bank to increase its capital."

Perhaps it is a freak coincidence that bond king Bill Gross of Pimco said that the systematic sell-off of assets by financial firms could put the credit markets into a flat spin. Gross recently wrote "if we are to prevent a continuing asset and debt liquidation of near historic proportions, we will require policies that open up the balance sheet of the U.S. Treasury."

Gross may have been spending time with the financial ministers on the mainland.

Unfortunately, Gross may be panicky, but he is probably right. Financial institutions, including everything from commercial banks to hedge funds, need cash and do not want to be caught with holdings which could rapidly lose more value. In a race for the emergency exit all of the parties are getting bloodied.

Gross may have the right solution and it may be one that plays well in China. The government there has a large reserve of cash from years of running surpluses. Moving money into the People's Bank is a reasonable solution to offset bad investments.

Back in America, the Treasury has to eventually turn to the tax-payer to pick up more bullion. That is the same tax-payer who can no longer afford his house. The consequences of Gross's reasoning taken to their full extent are that the US working population is the last resort from keeping the global financial system from falling into pieces.

Truck drivers and waitresses get to save the world.

Douglas A. McIntyre

Source: 24/7 Wall St. | 5 Sep 2008 | 9:44 am

Goldman cuts Merrill to sell, sees fresh writedowns

(Reuters) - Merrill Lynch & Co , battered by more than $40 billion of write-downs tied largely to mortgages, will likely incur fresh write-downs, in addition to those assumed after its recent sale of repackaged debt to Lone Star Funds, said an analyst at Goldman Sachs, who cut the stock to a "sell."

Source: Reuters: Business News | 5 Sep 2008 | 9:43 am

Bill Gates and Seinfeld in bizarre $300m ad campaign for Microsoft

Microsoft has kicked off its long-awaited $300m ad campaign featuring the unlikely comedy duo of the software giant's geeky founder Bill Gates and deadpan sitcom star Jerry Seinfeld.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 5 Sep 2008 | 9:40 am

FTSE sinks further into bear territory

Shares in London sank further in bear market territory on Friday as banks were once again under pressure because of mounting concerns about their sources of funding.The FTSE 100 lost a further 64 points,...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 5 Sep 2008 | 9:33 am

One Laptop signs up with Amazon

Online retailer Amazon will help the One Laptop Per Child organisation with its plans to sell its XO laptop in the US.
Source: BBC News | Business | World Edition | 5 Sep 2008 | 9:23 am

Asian shares down for fifth straight day

Hong Kong's Hang Seng index closed below 20,000 for the first time since March 2007 as fears deepened about the global economy, the prospects for the US and effects on China.Shares across Asia Pacific...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 5 Sep 2008 | 9:20 am

Global stock markets still jumpy

Fears about a global economic slowdown continue to weigh on stock markets, with Japan's main share index falling nearly 3%.
Source: BBC News | Business | World Edition | 5 Sep 2008 | 9:09 am

Smoking ban hits JD Wetherspoon

The UK smoking ban and slow consumer spending knocks pub group JD Wetherspoon's full year pretax profits down 11%.
Source: BBC News | Business | World Edition | 5 Sep 2008 | 9:03 am

Slump hits Bentley car production

Four thousand staff at Crewe-based carmaker Bentley are going down to a three-day week as demand slumps.
Source: BBC News | Business | World Edition | 5 Sep 2008 | 8:30 am

Huge rise in the price of food

Supermarket food prices are soaring, with the price of key items rising at several times the rate of inflation, figures show.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 5 Sep 2008 | 8:30 am

Xstrata ups efforts to buy copper mine

Mining group Xstrata on Friday bought a 17.83 per cent stake in Indophil Resources for A$82m, potentially blocking a management buy-out of the Australian copper miner.Indophil's main asset is a 34 per...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 5 Sep 2008 | 8:14 am

Media Digest 9/5/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

Source: 24/7 Wall St. | 5 Sep 2008 | 7:52 am

Samsung considers buying SanDisk

Samsung Electronics said it was considering acquiring or forming a strategic alliance with SanDisk in a move to strengthen its dominance of the memory chip market
Source: FT.com - US homepage | 5 Sep 2008 | 7:42 am

Samsung considers buying SanDisk

SEOUL, Sept 5 - Samsung Electronics Co Ltd said on Friday it was considering "various opportunities" regarding SanDisk, in response to reports it was interested in bidding for the U.S. flash memory maker...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 5 Sep 2008 | 7:42 am

Dell plans to sell computer factories: report

(Reuters) - Dell Inc is trying to sell computer factories around the world in efforts to cut cost and improve profitability, the Wall Street Journal said.

Source: Reuters: Business News | 5 Sep 2008 | 7:12 am

Newcomer 'Bangkok Dangerous' will battle 4-week-old 'Tropic'

The adrenaline-charged thriller starring Nicolas Cage is expected to rake in $10 million and to lead the box office this weekend. It's the sole major release hitting the nation's multiplexes.

Both political parties have staged star-spangled, attack-filled conventions, ensuring a lively start to the fall election season. Pro football kicks off with a full schedule of games from Thursday through Monday, including rivalry match-ups that promise plenty of smash-mouth action.

Source: L.A. Times - Business | 5 Sep 2008 | 7:00 am

Toll Brothers swings to loss in third quarter

The luxury builder's CEO predicts a turnaround -- after the foreclosure inventory is sold.

Toll Bros. Inc. said Thursday that it swung to a loss in its fiscal third quarter as weak demand for new homes forced the luxury builder to mark down the value of its land and unsold homes.

Source: L.A. Times - Business | 5 Sep 2008 | 7:00 am

Dow plunges nearly 350 on troubling retail, unemployment news

Data show the economy is still weak and could worsen if foreign markets continue to fade. Investors now view falling commodity prices with fear.

Falling gasoline prices aren't enough to rescue the stock market from its funk.

Source: L.A. Times - Business | 5 Sep 2008 | 7:00 am

Online tools let parents peer into their kids' school day

What's he eating for lunch? Is she showing up for class? What subjects are they weak in? Software is helping unravel the mystery.

It's tough sending little Bobby or Suzy back to school. Parents may worry what kinds of teachers their children will encounter, whether they'll be as smart as their classmates and whether bullies will steal their lunch money. ¶ But technology is helping eliminate some of the guesswork about what happens after kids climb onto the bus. Increasingly common Web programs let parents track lunch-money spending, schoolwork habits and tardiness. ¶ "There's this black box -- a child goes away and comes home, what happened during this time?" said Shelley Pasnik, director of the nonprofit Center for Children and Technology in New York. "Now, new information and communications technology allows for the mystery of what transpires on any given day to unravel." ¶ The programs, from companies such as Pearson School Systems, Aries Technology Inc. and Horizon Software International, are gaining popularity as more parents demand transparency in schools, Pasnik said. ¶ This year the Los Angeles Unified School District signed a $9.9-million contract with Horizon, a Duluth, Ga., company that offers a program called MealpayPlus to let parents see what their children are eating for lunch. A district spokesman said the system would be ready to use at the beginning of the 2009-10 school year. ¶ Under the program, children would pay for their lunches in different ways, depending on the district, including through scan cards, personal identification numbers or even fingerprint scanners. Parents could go online and add money to their child's account through MealpayPlus. They could also flag foods that their child is allergic to and elect whether their child could buy only meals or could buy items not in the meal plan.

Source: L.A. Times - Business | 5 Sep 2008 | 7:00 am

Cellphone executive takes up a new calling

Cyriac Roeding completes a 6-week world tour in which he traveled to such places as Nepal and Brazil to witness how people use their mobile devices.

Most people take a vacation to get away from their jobs. Cyriac Roeding took a vacation for his job.

Source: L.A. Times - Business | 5 Sep 2008 | 7:00 am

August another disappointing month for retailers

Discounters such as Wal-Mart and some teen chains do well amid back-to-school shopping, but department stores and apparel retailers suffer as consumers scale back.

Consumers pummeled by high gasoline and food prices flocked to the nation's discount stores for the back-to-school season, leaving department stores and other sectors struggling throughout August.

Source: L.A. Times - Business | 5 Sep 2008 | 7:00 am

Kiwi dollar hammered again

The New Zealand dollar was hammered today but it was part of a global flight from risk. The NZ dollar dropped to US65.90c mid-morning for the first time in 22 months but made it back to US66.60c by 5pm. It was a big fall...
Source: New Zealand Herald - Business | 5 Sep 2008 | 5:22 am

McCain seizes on theme of 'change'

John McCain accepted the Republican presidential nomination by seeking to wrest the mantle of change from Barack Obama in a speech that mixed appeals to patriotism, criticism of Washington and a promise to work with political foes
Source: FT.com - US homepage | 5 Sep 2008 | 4:24 am

Huge plunge in Briscoe profits as shoppers keep wallets shut

Briscoe Group boss Rod Duke is betting that a change of government, lower interest rates and tax cuts will bring shoppers back. The owner of Briscoes Homeware, Rebel Sport and Living & Giving today reported a 70.6 per cent fall...
Source: New Zealand Herald - Business | 5 Sep 2008 | 3:08 am

BLOG: Mohamed El-Erian named sole CEO of bond giant Pimco

Source: L.A. Times - Business | 5 Sep 2008 | 2:20 am

Broadband plans push Telecom to suspend shares-for-dividend scheme

Telecom has halted its dividend reinvestment plan and on-market share buyback while it evaluates accelerating the delivery of broadband services. Telecom shares fell 3c to $3.09 around noon after the announcement. The shares are...
Source: New Zealand Herald - Business | 5 Sep 2008 | 2:00 am

Vector, Powerco's gas plans rejected by Commerce Commission

The Commerce Commission has given the thumbs down to undertakings from Vector and Powerco for their natural gas network. In 2005 the Minister of Energy placed the pair's gas pipeline under regulatory control, enforced by the commission. The...
Source: New Zealand Herald - Business | 5 Sep 2008 | 1:30 am

NZ dollar falls to 22-month low

The New Zealand dollar dropped below US66c for the first time in 22 months soon after 10am today as worries about the health of the global economy continued to weigh on the currency. The kiwi plunged through the early hours of...
Source: New Zealand Herald - Business | 5 Sep 2008 | 1:00 am

New NZX chairman under no illusions

The new chairman of NZX takes the reins at a challenging juncture in the New Zealand stock exchange's history, but remains optimistic about its long term prospects. Mergers and acquisitions law specialist Andrew Harmos was confirmed...
Source: New Zealand Herald - Business | 5 Sep 2008 | 12:30 am

Investors flee as fear factor swamps markets worldwide

Source: L.A. Times - Business | 4 Sep 2008 | 11:16 pm

Chrysler's Toyota alum has his share of opinions

Source: L.A. Times - Business | 4 Sep 2008 | 10:55 pm

NZ Shares: Market down after steep US decline

The New Zealand sharemarket started lower after Wall Street had its steepest decline in more than two months amid concerns about global growth and United States jobs. Around 10.15am the benchmark NZSX-50 index was down 22.19 points...
Source: New Zealand Herald - Business | 4 Sep 2008 | 10:40 pm

Beijing's caution scuppered bank bid

China Development Bank's plan to bid for Dresdner failed in large part because Chinese leaders refused to agree to the deal in time
Source: FT.com - US homepage | 4 Sep 2008 | 10:31 pm

BP sees future with Russian partners

BP expects to remain partners with the Alfa-Access-Renova group of Russian tycoons for years in spite of the dispute over their TNK-BP joint venture, the oil company said
Source: FT.com - US homepage | 4 Sep 2008 | 10:31 pm

What Good Is the Jobs Number?

When the Bureau of Labor Statistics reports Friday on how many jobs the economy gained or lost in August, there's one thing we can be sure of: A complete lack of agreement on what the numbers actually say about the health of the economy.

Even though businesses have been shedding jobs since December—and the unemployment rate has risen 1.3 percentage points since last March to 5.7 percent—a group of vocal economists, analysts, bloggers, and journalists have argued that the employment picture is even worse.

The reason, these critics say, is that the way government statisticians calculate how many jobs are created by new businesses and destroyed by dying firms is flawed and is no more than an educated guess.

The B.L.S. has two ways of calculating how many jobs are gained or lost each month. The method preferred by most economists is a survey of 150,000 businesses across the country. The problem here is that the bureau does not have a way of detecting when an entrepreneur has started a business (which creates jobs), or when an old firm has closed (taking jobs with it).

As a way around this, the B.L.S. introduced what it calls a birth-death model in 1999. It uses historical data and fancy equations to estimate the number of jobs added and lost by new and dying businesses. But the model typically spits out a positive number, leading critics to charge that it doesn't know how to handle a downturn.

This may well be true, but other data point to benefits from using the model.

Once a year, the B.L.S. releases a benchmark revision which is a much more accurate tabulation of the number of jobs in the country. This revision draws on records of the number of employees covered by unemployment insurance.

The B.L.S. says these records cover an impressive 98 percent of all nonfarm jobs. A revision based on this data is much more likely to reflect the real employment situation.


 Now, there is another metric showing bigger job losses than the payroll survey, and that's the second of the two B.L.S. methods mentioned above. The Current Population Survey, a monthly survey of 50,000 households carried out by the Census Bureau for the B.L.S., indicates that the economy has lost 828,000 jobs during the current downturn compared with the 463,000 the payroll survey shows.

But you won't find too many of these critics pointing to the household survey to support their argument. The reason?

Back when the economy was growing, the household survey detected much bigger job gains than the payroll survey. Since most critics can be described as perma-bears, they spent a good bit of time arguing that the household survey was bunk. Perhaps they think it would be unseemly to flip-flop to now say it's good.

But all of this is not to say that government statistics don't need improvement; they surely do. Even our current Federal Reserve chairman, Ben S. Bernanke, has thought so.

But his predecessor, former chairman Alan Greenspan, perhaps said it best in 1997, referring to another important data point, the gross domestic product:

"I think we are getting to the point...when we will have to move unless very clear evidence emerges that the expansion is easing significantly. I don't mean evidence that G.D.P. growth is moderating to 1¾ percent or whatever the forecast is. The G.D.P. is a nice number and it does have some relationship to the real world. I'm not terribly certain what it is, though everyone tells me it does."

Related Links
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Summer's Over. So's Your Job.
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Source: Portfolio.com: Top 5 | 4 Sep 2008 | 10:30 pm

Energy ETFs Pull Back on Dip in Oil (Daily ETF Wrap-Up)

Energy ETFs falter as investors continue to sell off crude oil.

Source: SmartMoney.com | 4 Sep 2008 | 10:09 pm

Travel brand packs and heads off into sunset

One of New Zealand's best known travel agency brands will disappear this weekend when Holiday Shoppe is rebranded Harvey World Travel. The Holiday Shoppe name has been around for 32 years but will no longer exist as of Monday,...
Source: New Zealand Herald - Business | 4 Sep 2008 | 10:00 pm

8 Stocks for Seekers of Small-Cap Values (Stock Screen)

A perfume maker is among the eight small-cap value stocks we like.

Source: SmartMoney.com | 4 Sep 2008 | 9:46 pm

Keep a Toe in Commodities Despite Pullback (ETF Focus)

There's good reason to maintain exposure to commodities despite a recent pullback.

Source: SmartMoney.com | 4 Sep 2008 | 9:41 pm

Internet Service Providers Invoke Web Usage Caps (Deal of the Day)

Internet service providers put caps on amount of bandwidth customers can use.

Source: SmartMoney.com | 4 Sep 2008 | 8:47 pm

Comcast Strikes Back Against F.C.C.

Comcast, the nation's largest cable company, sued the Federal Communications Commission on Thursday, challenging the regulator's authority to sanction it for violating government internet rules.

Comcast's lawsuit sets up a legal showdown over whether the F.C.C. has the power to enforce "network neutrality"—the principle that all Web traffic should be treated equally—or whether new legislation is needed by Congress to give it such authority.

The F.C.C. voted 3-2 last month to punish Comcast after concluding that the cable giant had run afoul of the agency's 2005 Internet Policy Statement, which made network neutrality official government policy.

Comcast has long argued that the F.C.C. lacks the authority to enforce that principle and, as widely expected, today formally took its case to the U.S. Court of Appeals in Washington, D.C.

"We filed this appeal in order to protect our legal rights and to challenge the basis on which the commission found that Comcast violated federal policy in the absence of pre-existing legally enforceable standards or rules," Comcast executive vice president David Cohen said in a statement.

---

• Comcast's petition can be found here.
• A timeline of the Comcast probe is here.

---

Even as it filed the lawsuit, Comcast said it intends to comply with the F.C.C. orders, which "essentially codify the voluntary commitments that we have already announced."

The company does not dispute that the F.C.C. has the authority to regulate internet service providers, but said "we are compelled to appeal because we strongly believe that, in this particular case, the commission's action was legally inappropriate and its findings were not justified by the record."

Unchallenged, the F.C.C. order would have set a precedent giving it the right to enforce its 2005 policy. Comcast says its suit is less about the particulars of its case, and more about the scope of F.C.C. authority moving forward.

Throughout the government probe, Comcast maintained that its actions amounted to "reasonable network management" designed to ensure that its network functions smoothly.

The company said it was forced to occasionally block peer-to-peer traffic, which it said took up a vastly disproportionate amount of its network and caused congestion, to the detriment of other users.

In March, facing intense F.C.C. and public pressure, Comcast said it would move to a "protocol agnostic" network-management approach. That would focus not on a particular type of network activity—such as peer-to-peer traffic—but rather on those users who consume the most bandwidth.

Network neutrality advocates, who have long battled Comcast over its network management practices, called Comcast's lawsuit against the F.C.C. predictable.

"We expected Comcast would appeal the commission's order," said Gigi Sohn, president and co-founder of Public Knowledge, a digital-advocacy group. "The company opposed it every step of the way, even as they failed to disclose their throttling of internet traffic. We believe the commission will prevail and the rights of internet users will be protected."

Ben Scott, policy director of Free Press, which filed the original complaint against Comcast last fall, said he wasn't surprised by Comcast's lawsuit, and expressed support for the F.C.C.

"Comcast's appeal is predictable—the cable giant has a long history of appealing any decision it doesn't like. The F.C.C. is well within its authority to protect the open internet, either by adopting rules or acting on complaints," Scott said.Related Links
The Comcast Internet Cap Debate
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Source: Portfolio.com: Top 5 | 4 Sep 2008 | 8:30 pm

Dow Falls 345 Points

Rising unemployment numbers, a decline in private payrolls and weak retail results sparked a selloff.

Source: SmartMoney.com | 4 Sep 2008 | 8:13 pm

Tech investor plans $100m fund to give start-ups a lift

Veteran technology investor Jenny Morel hopes to launch a new $100 million venture capital fund in a bid to revitalise what she claims is a moribund market for start-up businesses. A decade after she founded one of New Zealand's...
Source: New Zealand Herald - Business | 4 Sep 2008 | 8:00 pm

Banks reel as ECB redraws funding rules

Bank stocks in Europe and the UK fell sharply and the risk of owning their debt leapt after the European Central Bank declared a crackdown on abuses of its bank liquidity operations
Source: FT.com - US homepage | 4 Sep 2008 | 7:49 pm

Moscow forced to shore up rouble

Russia's central bank intervened heavily to support the rouble as analysts said $21bn of foreign capital might have been pulled out of the country as Moscow paid the price for its conflict with Georgia
Source: FT.com - US homepage | 4 Sep 2008 | 7:37 pm

L&M looks abroad for oil

L&M Petroleum, which is drilling for coal seam gas in Southland, is also aiming to join a drilling programme in California. The company said that it had agreed principal commercial terms to farm-in to Perth-based Salinas Energy's...
Source: New Zealand Herald - Business | 4 Sep 2008 | 7:30 pm

What the Candidates' Proposals Mean for Consumers (Consumer Action)

We break down the candidates' proposed fixes for gas prices, health care and housing.

Source: SmartMoney.com | 4 Sep 2008 | 7:28 pm

No Rush to Switch From GAAP Accounting (Ticked Off)

We're not opposed to the switch to global accounting rules, just don't rush it.

Source: SmartMoney.com | 4 Sep 2008 | 7:06 pm

Thriftiness boosts US lower-cost stores

Wal-Mart and other discount stores reap the benefits of a nervous US retail scene in the back-to-school season, while fashion outlets suffer falls in sales
Source: FT.com - US homepage | 4 Sep 2008 | 6:36 pm

3 Stocks to Watch: CIEN, PSS, HOV (Market Movers)

Ciena sees hard times ahead. Payless pays off. Hovnanian tries to find its way home.

Source: SmartMoney.com | 4 Sep 2008 | 6:15 pm

Seoul Salvation

Korea is home of the Hyundai and the Kia. It hopes to put a robot in each of its households by 2020. It boasts the world's first cloned dog.

So what does it want with our ailing assets on Wall Street?

A number of Korean entities have grabbed headlines in recent weeks as leaders at banks such as Lehman Brothers and Merrill Lynch travel the globe on a desperate hunt for cash.

Korea Development Bank, which was founded after the Korean War ended in 1954, has expressed interest in buying all or a part of Lehman Brothers. According to the Financial Times, the country's military pension fund has said it would be interested in joining K.D.B. in a Lehman investment.

A state-run distressed investment manager called Korea Asset Management is in talks with Merrill Lynch about taking some of its most troubled loans off its books, according to Bloomberg. So far, the two haven't been able to agree on pricing. Korea Investment Corporation, the country's sovereign wealth fund, owns a 7.4 percent stake in Merrill Lynch, going back for more in July after investing initially in January.

What does Korea see that the rest of the world doesn't? Perhaps Korea Asset Management's Lee Chol Hwi put it best in an interview with Bloomberg: "The U.S. market desperately needs capital. It's practically a buyer's market there."

That's right, folks. We're desperate. And Asian investors, who were the desperate ones just 10 years ago, are now regarded as our saviors.

Since the 1997 Asian financial crisis, Korea has cleaned itself up economically. It instituted government reforms and dismantled some of its corrupted conglomerates. Its economy has enjoyed robust growth in recent years, and its per capita G.D.P. is expected to surpass that of the United Kingdom, Germany, and France just five years after Korea hopes to have a robot in each household.

So Korea has clout—and money. But, so far, its interest in Lehman Brothers appears to be limited to a bit of hot air. The Korea Development Bank remains at the mercy of the country's financial regulators, who have expressed skepticism about a deal. Moreover, the bank isn't doing so well itself: Its net profit fell by half during the first half of this year, prompting the Korea Times to call it "old and reckless."

K.D.B.'s chief executive said the bank was considering forming a consortium of local commercial banks to buy Lehman, but the Korea Herald reports that local banks dismissed the idea. Even the Korean military pension fund, which indicated interest, has said that K.D.B. hasn't approached it about the deal.

As for Merrill, Bloomberg reports that Korea Asset Management and Merrill Lynch don't agree on the value of the bank's assets. Considering that Merrill just sold a bunch of loans to Lone Star Funds for the paltry price of 22 cents on the dollar, what kind of bargaining is Korea doing in these negotiations?

It appears that either Lehman's and Merrill's desperation hasn't hit levels low enough for Korea. Maybe Korea's real interest in buying Lehman amounts to little more than a tease.

As the weeks and months of this credit crisis unfold, Wall Street's desperation could intensify. But Seoul isn't likely to overtake New York anytime soon.

 

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Source: Portfolio.com: Top 5 | 4 Sep 2008 | 4:00 pm

Cheap Ways to Boost Your Home's Value (Consumer Action)

Inexpensive ways to put a little more cash in your pocket if you sell your home.

Source: SmartMoney.com | 4 Sep 2008 | 3:11 pm

House prices falling at fastest rate in 25 years

Home owners have been dealt a double-whammy of doom today, as figures showed that house prices were falling at the fastest rate in at least 25 years and the Bank of England failed to cut interest rates.
Source: Telegraph Business | 4 Sep 2008 | 1:58 pm

Mortgage rates fall back to where they were before credit crunch

Mortgage rates have fallen back to the level they were before the credit crisis sent the price of home loans soaring last year.
Source: Telegraph Business | 4 Sep 2008 | 1:20 pm

From Russia, Not With Love

For foreigners, this is how business now gets done in Russia: There is a long siege of hostilities supported by the Kremlin, followed by a peace that should leave investors uneasy.

Consider the truce that oil giant B.P. has reached with its partner TNK. After an eight-month dispute, the two companies have come an agreement over their Russian joint venture that shakes up its management but leaves B.P. with its 50 percent stake. The chief executive will leave by the end of the year, and more independent directors will be on the board. The two sides may also sell shares in the unit to the public, possibly as much as 20 percent.

The agreement comes after months of demands from the four oligarchs who controlled the Russian half that the joint venture's C.E.O. step down because he was favoring British shareholders.

The chief executive, Bob Dudley, an American, complained of a "sustained harassment." He had been forced to manage the venture from London after his visa was not renewed. Other foreign employees' visas were not renewed, and the chief financial officer quit.

The suspicious decision being made by the government followed similar strong-arm tactics that drove Royal Dutch Shell out of a project on Sakhalin and led to the takeover of the oil giant Yukos.

So now Dudley will step down, to be replaced by a Russian-speaking executive.

Having got what they want this time, does anyone really expect the oligarchs, with the Kremlin's blessing, to stop meddling in the future? Other standoffs may come in picking the next C.E.O. and choosing independent directors for the board.

Yet shares of B.P. are up sharply in London trading today. The Russian venture is crucial to B.P., accounting for nearly a fourth of its oil production.

It is "certainly positive to see a plan for cessation of hostilities, with B.P. preserving its 50 percent stake and an opportunity to release part of the value via an initial public offering,'' Ivor Pether at Royal London Asset Management told Bloomberg News.

"But it's hard to envisage who would qualify as an independent director."


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Source: Portfolio.com: Top 5 | 4 Sep 2008 | 1:00 pm

Bank of England keeps interest rates at 5pc

The Bank of England's Monetary Policy Committee has left interest rates unchanged despite the increasing threat of recession, because inflation has not yet peaked.
Source: Telegraph Business | 4 Sep 2008 | 12:00 pm

Whoops! Vital flaw in Government's home loans scheme

Debate rages on about whether our recession-minded Chancellor’s measures to help the home buyers are going to swing the housing market back on an upward track, or swing voters back to the Labour cause.
Source: Telegraph Business | 4 Sep 2008 | 11:40 am

UK homeowners lose £25,000 as house prices fall at fastest rate on record

UK homeowners have seen £25,000 wiped off the value of their property in the last year, according to Halifax, as house prices fall at the fastest rate on record.
Source: Telegraph Business | 4 Sep 2008 | 11:20 am