World Business News Headlines for September 7, 2008

Nationwide in talks over mergers

The Nationwide Building Society is in merger talks with two smaller rivals, the Derbyshire and Cheshire Building Societies.
Source: BBC News | Business | World Edition | 7 Sep 2008 | 12:05 pm

Nationwide Building Society set to merge with the Derbyshire and the Cheshire

Nationwide, Britain's biggest building society, is close to buying its rivals at both the Derbyshire and the Cheshire.
Source: Latest Business News from Times Online | 7 Sep 2008 | 11:58 am

Iran wants OPEC output cut to target quotas

Iran said on Sunday that OPEC members should cut output to the agreed target quotas in the face of falling oil prices, two days before the cartel meets in Vienna, state-run IRNA news agency
Source: Infocious RSS raw feed - channel BNewsBusiness | 7 Sep 2008 | 11:39 am

`Extremely dangerous' Hurricane Ike eyes Bahamas and Cuba

Hurricane Ike, a Category 4 storm, has prompted hurricane warnings in the Turks and Caicos Islands and parts of Cuba and the Bahamas, and may head into the warm, storm-driving, waters of the Gulf of Mexico.

Source: MarketWatch.com - Top Stories | 7 Sep 2008 | 11:27 am

Pakistan taps Zardari, Bhutto widower, as president

Pakistani lawmakers on Saturday named to the presidency Asif Ali Zardari, the widower of former Prime Minister Benazir Bhutto and a man who must overcome personal controversy while meeting a number of economic and political challenges, media reports say.

Source: MarketWatch.com - Top Stories | 7 Sep 2008 | 10:39 am

US Boeing workers strike over pay

Workers at the world's biggest aircraft manufacturer, Boeing, go on strike in the US.
Source: BBC News | Business | World Edition | 7 Sep 2008 | 10:02 am

Iran's inflation tops 27%

Iran's inflation hit 27.6 percent in the calendar month of Mordad that ended August 21, the central bank said Sunday, as Iranians were again battered by rising prices of basic foodstuffs...
Source: Infocious RSS raw feed - channel BNewsBusiness | 7 Sep 2008 | 9:24 am

Nevada Chemicals to be acquired at $13.37-share, 36% premium

Nevada Chemicals Inc. said late on Friday that it definitively agreed to be acquired by two companies for $13.37 a share.

Source: MarketWatch.com - Top Stories | 7 Sep 2008 | 9:13 am

US lenders 'face state takeover'

US officials plan to put troubled mortgage giants Freddie Mac and Fannie Mae under strict federal control, reports say.
Source: BBC News | Business | World Edition | 7 Sep 2008 | 8:58 am

Boeing machinists walk off the job as talks fail

NEW YORK/EVERETT, Washington (Reuters) - Boeing Co's 27,000-strong machinists' union walked off the job on Saturday after the plane maker failed to improve its contract offer following two days of emergency talks.

Source: Reuters: Business News | 7 Sep 2008 | 8:53 am

Regulators close down Nevada's Silver State Bank

State and federal regulators shut down Nevada's Silver State Bank. It was the 11th bank to fail in the U.S. so far this year.

Source: MarketWatch.com - Top Stories | 7 Sep 2008 | 8:19 am

WWE steps up push in Japan market

Posing proudly for a snapshot with a glittery championship belt, Seigi Nishiyama is among some 600 other sports fans packing a Tokyo theater who can't get enough of World Wrestling...
Source: Infocious RSS raw feed - channel BNewsBusiness | 7 Sep 2008 | 7:48 am

Prosecutor becomes figure in mortgage mess

LOS ANGELES (Reuters) - Thomas O'Brien, the U.S. Attorney for California's Central District, is emerging as a likely prosecutor in criminal cases expected from the U.S. mortgage meltdown.

Source: Reuters: Business News | 7 Sep 2008 | 7:34 am

AirAsia takes risks with expansion amid downturn

AirAsia, the region's biggest budget carrier, is making a risky bet. As soaring fuel prices have forced other airlines to cut back, shed jobs and ground planes, AirAsia is doing the...
Source: Infocious RSS raw feed - channel BNewsBusiness | 7 Sep 2008 | 7:32 am

Price increases push US soy beyond reach of poor

With the dollar a day he earns scrounging for scrap metal and paper, Jumadi can't buy his family beef or even chicken. But until now, the rail-thin scavenger could at least afford soy. ...
Source: Infocious RSS raw feed - channel BNewsBusiness | 7 Sep 2008 | 7:25 am

New industry offers cash to owners in exchange for a share in the future growth of their home's value

First of two parts

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

Medical pricing makes the head spin

It began with a dizzy spell. Before long, though, what really had my head spinning was the inscrutable way that healthcare providers and insurers put a dollar value on medical services -- and how that...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 7 Sep 2008 | 7:00 am

How I Made It: Lou Novak

In the San Fernando Valley, an homage to Elvis' Graceland

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

New industry offers cash to owners in exchange for a share in the future growth of their home's value

First of two parts
Source: Infocious RSS raw feed - channel BNPaperBusiness | 7 Sep 2008 | 7:00 am

What to do with a big inheritance

Dear Liz: My husband and I just inherited about $700,000 in a brokerage account. About $300,000 is in municipal bonds. The rest is in various mutual funds with some cash, corporate bonds and other, "alternative"...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 7 Sep 2008 | 7:00 am

How to determine your bank's financial health

A little digging will tell you whether it's a safe place for your cash

How can you tell whether your bank is in hot water?

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

Fall season is ripe for reevaluating your investment portfolio

How should you begin? Ask yourself: Would you still buy the shares you own in today's market? Fall is always a...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 7 Sep 2008 | 7:00 am

What to do with a big inheritance

Dear Liz: My husband and I just inherited about $700,000 in a brokerage account. About $300,000 is in municipal bonds. The rest is in various mutual funds with some cash, corporate bonds and other, "alternative" investments. In addition to the inheritance we have $400,000 in IRAs and SEP IRAs, as well as equity in our home. We are both semi-retired consultants who intend to keep working for at least five to 10 years.

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

How to determine your bank's financial health

A little digging will tell you whether it's a safe place for your cash How can you tell whether your bank is in...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 7 Sep 2008 | 7:00 am

Medical pricing makes the head spin

It began with a dizzy spell. Before long, though, what really had my head spinning was the inscrutable way that healthcare providers and insurers put a dollar value on medical services -- and how that leaves patients unable to determine a fair price for any treatment.

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

How I Made It: Lou Novak

The president of Playmates Toys Inc. abandoned work on a PhD in psychology years ago to pursue a business career. But the son of Polish Holocaust survivors never thought he'd land in the toy world.

The gig: President since 2001 of Playmates Toys Inc., whose 55 U.S. employees design and market toys manufactured by the Playmates Toys Ltd. branch in Hong Kong. The company went public in February after splitting from its 42-year-old parent, Playmates Holdings Ltd. of Hong Kong. Famous for producing toys based on the Disney princesses and on "The Land Before Time" and "Teenage Mutant Ninja Turtles" franchises, the company is working on products to coincide with the summer 2009 release of the latest "Terminator" and "Star Trek" films. Playmates, known for its action figures and dolls, is also trying to expand into youth electronics. "It's competitive," Novak said. "We have to do what Mattel does with one-tenth the resources."

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

In the San Fernando Valley, an homage to Elvis' Graceland

Source: Infocious RSS raw feed - channel BNPaperBusiness | 7 Sep 2008 | 7:00 am

Fall season is ripe for reevaluating your investment portfolio

How should you begin? Ask yourself: Would you still buy the shares you own in today's market?

Fall is always a good time to prune your investment portfolio, but this year it may be wise to prune early and deep.

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

Baghdad's current problem: regulating private power

Iraq's capital throbs to the hum of thousands of polluting generators, but now the authorities in Baghdad want to regulate the private power network that has developed amid the ruins of the
Source: Infocious RSS raw feed - channel BNewsBusiness | 7 Sep 2008 | 4:12 am

Economic Preview: Retail sales, producer-price data on tap

The markets are suffering, the economy is losing jobs and there’s concern that consumers may have lost their appetite for shopping.

Source: MarketWatch.com - Top Stories | 7 Sep 2008 | 4:01 am

Government plan for Fannie, Freddie to hit shareholders (Reuters)

Reuters - The U.S. government plans to take over Fannie Mae and Freddie Mac and all shareholders of the two mortgage giants will take a hit, an influential lawmaker said on Saturday.

Source: Yahoo! News: Business | 7 Sep 2008 | 3:24 am

Government plan for Fannie, Freddie to hit shareholders

WASHINGTON (Reuters) - The U.S. government plans to take over Fannie Mae and Freddie Mac and all shareholders of the two mortgage giants will take a hit, an influential lawmaker said on Saturday.

Source: Reuters: Business News | 7 Sep 2008 | 3:24 am

Robert Powell: Ten international stocks that will set you up for the long haul

BOSTON (MarketWatch) -- If it's good enough for Warren Buffett, it should be good enough for you. Or at least it should be if you are looking for an international stock that you can buy and hold for the long term, say from the time you get out of college till you retire.

Source: MarketWatch.com - Top Stories | 7 Sep 2008 | 2:34 am

Talks fail; machinists strike Boeing Co.

Striking Boeing Co. production workers hunkered down Saturday for what could be along, bruising battle with costly repercussions for both sides. Greeted by friendly honking from passing...
Source: Infocious RSS raw feed - channel BNewsBusiness | 7 Sep 2008 | 12:20 am

Nothing ventured...

Jenny Morel doesn't mince words when describing the state of New Zealand's venture capital industry. "It's dire", she exclaims during a rare quiet moment at her annual shindig for some of this country's best and brightest entrepreneurs....
Source: New Zealand Herald - Business | 7 Sep 2008 | 12:05 am

Who's who in NZ's VC industry

The purpose of venture capital funds is to give large loans to tiny businesses, in the hope they might grow into really massive ones. The reason entrepreneurs turn to such funds is that their ideas are so visionary they're unlikely...
Source: New Zealand Herald - Business | 7 Sep 2008 | 12:01 am

Sunday share tips: Could a recovery be in the starting gates?

It's been a difficult 12 months. Almost a year ago, in October 2007, the FTSE 100 stood at 6730.70 and the strength of the blue-chips appeared to suggest that Britain's biggest companies would be able to weather the storm of the credit crunch.
Source: Telegraph Business | 7 Sep 2008 | 12:01 am

Nationwide swoops on battered rivals

Nationwide, one of Britain's biggest mortgage lenders, is in advanced talks to merge with the Derbyshire Building Society in a move expected to kick-start consolidation of the £350bn industry, The Sunday Telegraph has learned.
Source: Telegraph Business | 7 Sep 2008 | 12:01 am

Wall Street star brings boutique bank to Europe

Ken Moelis, the former president of UBS and one of Wall Street's most seasoned deal makers, is to open a new office in London in his first foray outside the US.
Source: Telegraph Business | 7 Sep 2008 | 12:01 am

M&S boss joins Boris Johnson's London advisory board

The bosses of China Mobile, JP Morgan Chase and Marks & Spencer are to advise Boris Johnson on retaining London's status as one of the world's leading cities, the capital's mayor will announce today.
Source: Telegraph Business | 7 Sep 2008 | 12:01 am

Gordon Brown's housing plan wins no fans

Building societies look to merge as experts turn on Labour's housing plan, writes Edmund Conway.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 7 Sep 2008 | 12:01 am

Rate of start-ups plummets by a quarter in one year

The number of new companies being established in Britain has tumbled by a quarter as the British economy teeters on the brink of recession.
Source: Telegraph Business | 7 Sep 2008 | 12:01 am

Lord Bilimoria wants Cobra to expand

Lord Bilimoria, the Cobra Beer entrepreneur, is injecting part of his multi-million pound fortune into the company as part of its international expansion ahead of an eventual outright sale.
Source: Telegraph Business | 7 Sep 2008 | 12:01 am

End of the road for flexible friend as Barclaycard goes 'contactless'

Barclaycard is planning an aggressive expansion of its pioneering 'contactless' payment system to kick-start a revolution that it believes will sound the death knell for the plastic credit card.
Source: Telegraph Business | 7 Sep 2008 | 12:01 am

Woolworths to shake up executive rewards

The board of Woolworths, the high street chain which is facing a takeover bid from the retail entrepreneur Malcolm Walker, is to revamp its executive pay scheme following a slump in its share price.
Source: Telegraph Business | 7 Sep 2008 | 12:01 am

Google's 'Android' Dream phone to hit UK

A new front in Silicon Valley's fierce battle for technology supremacy will be opened in Britain before Christmas with the launch of Google's first mobile phone venture, write Mark Kleinman and Dominic...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 7 Sep 2008 | 12:01 am

Tories not yet ready to say goodnight, Darling

When will business start taking the Tories seriously? Certainly not after the week we've just had. Many in the wealth-creating area of the economy, who rely on their entrepreneurial instincts to thrive,...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 7 Sep 2008 | 12:01 am

Candys and Qataris out of step at Chelsea Barracks

The Qatari ruling family is considering terminating its business partnership with Candy & Candy, the luxury designers, on the £1bn development of Chelsea Barracks.
Source: Telegraph Business | 7 Sep 2008 | 12:01 am

Livingstones defy crunch with £230m dividend

The reclusive British property tycoons Ian and Richard Livingstone have banked £230m after granting themselves one of the largest dividends in British corporate history.
Source: Telegraph Business | 7 Sep 2008 | 12:01 am

Fan, Fred rescue cost: Think billions

If only it were the $64 million question. The taxpayer bill for rescuing Fannie Mae and Freddie Mac could turn out to be the $64 billion question. Or more - or less.

Source: Business and financial news - CNNMoney.com | 6 Sep 2008 | 11:01 pm

HM Revenue & Customs turns to City law firms to catch evaders

HM Revenue & Customs is planning to unleash some of the world’s most expensive lawyers on businesses and individuals suspected of evading tax.
Source: Latest Business News from Times Online | 6 Sep 2008 | 11:00 pm

Business secretary John Hutton plans for 1m ‘green collar’ jobs

THE business secretary, John Hutton, will tomorrow outline an ambitious vision for the future of British manufacturing, saying 1m “green collar” jobs could be created in low-carbon technology.
Source: Latest Business News from Times Online | 6 Sep 2008 | 11:00 pm

Record bail-out in US of Fannie Mae and Freddie Mac

THE US TREASURY will today announce a rescue of Fannie Mae and Freddie Mac, two giant American mortgage banks, in what is likely to be the biggest financial bail-out of recent history.
Source: Latest Business News from Times Online | 6 Sep 2008 | 11:00 pm

Dynasties back green giant

SOME of Britain’s most prominent business families have led a £57m fundraising to set up Europe’s largest venture-capital fund dedicated to clean technology and renewable energy.
Source: Latest Business News from Times Online | 6 Sep 2008 | 11:00 pm

John Kinnaird steps into Faith shoes

THE retail entrepreneur John Kinnaird is this weekend finalising a deal to buy struggling shoe company Faith, whose designs are worn by the likes of Denise Van Outen, Claudia Schiffer and Girls Aloud.
Source: Latest Business News from Times Online | 6 Sep 2008 | 11:00 pm

Power suppliers face fuel-poverty bill

THE government may force power generators such as Drax, British Energy and International Power into paying for part of the £1 billion fuel-poverty package it hopes to unveil this week.
Source: Latest Business News from Times Online | 6 Sep 2008 | 11:00 pm

Tough times ahead for the first dame of the LSE, Clara Furse

It was all going so well for Clara Furse, chief executive of the London Stock Exchange. She had seen off four potential bidders, seen the share price of her company touch 2,000p on New Year’s Eve - some 800p above the only formal offer that had been tabled by Nasdaq, a rival American exchange.
Source: Latest Business News from Times Online | 6 Sep 2008 | 11:00 pm

Plan to split Lehman Brothers as sale stalls

LEHMAN BROTHERS is preparing to split into two separately listed companies, as rescue talks between the beleaguered $11 billion ($£6.2 billion) investment bank and the Korea Development Bank appear to be running out of time.
Source: Latest Business News from Times Online | 6 Sep 2008 | 11:00 pm

Adviser David Stockman's alibi doesn’t add up

IT IS hard to see anything in America these days for the festoons of bunting and balloons in this febrile election season. So it is perhaps unsurprising that the next chapter in the fall of David Stockman has gone largely unnoticed.
Source: Latest Business News from Times Online | 6 Sep 2008 | 11:00 pm

Treasury plan won't help Fannie, Freddie shareholders: Frank

WASHINGTON (Reuters) - Fannie Mae and Freddie Mac shareholders, including preferred stockholders, will not fair well under a proposed U.S. Treasury takeover of the two housing finance...
Source: Infocious RSS raw feed - channel BNewsBusiness | 6 Sep 2008 | 9:49 pm

Treasury plan won't help Fannie, Freddie shareholders: Frank

WASHINGTON (Reuters) - Fannie Mae and Freddie Mac shareholders, including preferred stockholders, will not fair well under a proposed U.S. Treasury takeover of the two housing finance companies, House Financial Services Committee Chairman Barney Frank told Reuters on Saturday.

Source: Reuters: Business News | 6 Sep 2008 | 9:49 pm

Treasury plan won't help Fannie, Freddie shareholders: Frank (Reuters)

Reuters - Fannie Mae and Freddie Mac shareholders, including preferred stockholders, will not fair well under a proposed U.S. Treasury takeover of the two housing finance companies, House Financial Services Committee Chairman Barney Frank told Reuters on Saturday.
Source: Yahoo! News: Business | 6 Sep 2008 | 9:49 pm

How J.P. Morgan steered clear of the credit crunch

It was the second week of October 2006. William King, then J.P. Morgan's chief of securitized products, was vacationing in Rwanda. One evening CEO Jamie Dimon tracked him down to fire a red alert. "Billy, I really want you to watch out for subprime!" Dimon's voice crackled over King's hotel phone. "We need to sell a lot of our positions. I've seen it before. This stuff could go up in smoke!"

Source: Business and financial news - CNNMoney.com | 6 Sep 2008 | 9:40 pm

Boeing machinists walk off the job as talks fail (Reuters)

Reuters - Boeing Co's 27,000-strong machinists' union walked off the job on Saturday after the plane maker failed to improve its contract offer following two days of emergency talks.

Source: Yahoo! News: Business | 6 Sep 2008 | 9:37 pm

SBA Response to Hurricane Gustav

WASHINGTON, Sept. 6 /PRNewswire-USNewswire/ -- U.S. Small Business Administration Acting Administrator Sandy Baruah today announced that SBA's response to help...
Source: Infocious RSS raw feed - channel BNewsBusiness | 6 Sep 2008 | 9:37 pm

Rescue plan near for Fannie and Freddie

The US Treasury is expected to announce as soon as Sunday a rescue plan for Fannie Mae and Freddie Mac, the two struggling government-sponsored mortgage groups whose fate is key to the future of the US housing industry and financial markets
Source: FT.com - US homepage | 6 Sep 2008 | 9:33 pm

Fannie, Freddie blind to the bubble

Mortgage giants Fannie Mae and Freddie Mac _ despite their robust cadre of economists and mortgage experts _ failed to heed warnings that the most dramatic housing bubble in U.S. history...
Source: Infocious RSS raw feed - channel BNewsBusiness | 6 Sep 2008 | 9:16 pm

NewsWatch: Treasury set to bail out Fannie Mae, Freddie Mac

The Treasury Department is expected to announce as early as this weekend a plan to bail out and recapitalize collapsing home mortgage giants Fannie Mae and Freddie Mac in one of the biggest government rescues in U.S. history.

Source: MarketWatch.com - Top Stories | 6 Sep 2008 | 9:00 pm

Paulson readies the 'bazooka'

It took two months, but the bond market called Henry Paulson's bluff: The Treasury Secretary was widely expected this weekend to announce a plan to take Fannie Mae and Freddie Mac under government control.

Source: Business and financial news - CNNMoney.com | 6 Sep 2008 | 8:54 pm

Treasury set to bail out Fannie Mae, Freddie Mac

Source: MarketWatch.com - Top Stories | 6 Sep 2008 | 8:34 pm

Stocks to Watch: Stocks in focus for Monday

Monday will be a relatively quiet day as far as earnings go, but investors will have plenty to trade on as they mull over several major deals that are expected to take shape soon.

Source: MarketWatch.com - Top Stories | 6 Sep 2008 | 7:42 pm

Cheney accuses Russia of using 'blunt force'

The US vice president broadened his attack on Russia, directly challenging Vladimir Putin's view of history and warning that his government could 'not have it both ways' by using 'brute force' and still hoping to build economic progress
Source: FT.com - US homepage | 6 Sep 2008 | 5:39 pm

Union strikes Boeing

Workers are Boeing walked off the job on Saturday after nearly two days of around-the-clock talks failed to avert what could one of the nation's most disruptive strikes in more than a decade.

Source: Business and financial news - CNNMoney.com | 6 Sep 2008 | 4:46 pm

Zardari wins Pakistan's presidency

Asif Ali Zardari, the widower of assassinated former prime minister Benazir Bhutto, won Pakistan's presidential elections amid violence that killed at least 30 people and injured dozens
Source: FT.com - US homepage | 6 Sep 2008 | 4:22 pm

Boeing machinists walk off the job

Member of Boeing Co.'s largest labor group walk off the job after extended contract negotiations fail.

Source: MarketWatch.com - Top Stories | 6 Sep 2008 | 4:16 pm

Art safe bet for wily investors

The recent run of failing finance companies and the resulting public cynicism is stimulating investor interest in the international currency of art, jewellery and antiques, with auction houses reporting record prices while other markets...
Source: New Zealand Herald - Business | 6 Sep 2008 | 4:00 pm

Day of reckoning is nigh

Kiwis are drowning in debt, the Ministry of Economic Development has confirmed, as bankruptcies have hit an all-time high. The Official Assignee administered 3806 insolvency procedures in the 2008 financial year - up from 3593...
Source: New Zealand Herald - Business | 6 Sep 2008 | 4:00 pm

Sponsor has World at its feet

Corporate wardrobe manufacturer Deane Apparel will be fashion house World's primary sponsor at this year's Air New Zealand Fashion Week. World and Deane Apparel collaborated on the Deane designed by World collection, which was...
Source: New Zealand Herald - Business | 6 Sep 2008 | 4:00 pm

Beacon of light for wine buffs

An 80-room, five-star resort planned for Waiheke aims to make the island New Zealand's leading wine and food destination for wealthy tourists. This is the overarching vision of Brent Gibson - a Waiheke resident of 20 years and...
Source: New Zealand Herald - Business | 6 Sep 2008 | 4:00 pm

Family games help Xbox defy recession

The New Zealand video game industry is defying the recession, with sales increasing from $121,312,445 from June 2006 to May last year, to $145,662,181 from June 2007 to May this year. Tom Hunt, the Xbox product marketing manager...
Source: New Zealand Herald - Business | 6 Sep 2008 | 4:00 pm

Bernard Hickey : Will rules stop finance companies failing?

The horse has bolted and last week parliament passed legislation to close the barn door. The Reserve Bank Act has been amended so the central bank is now also the regulator of finance companies, building societies and credit unions,...
Source: New Zealand Herald - Business | 6 Sep 2008 | 4:00 pm

Martin Hawes : Commissions cloud sensible investment

Bill finally sold the business when he was 67. He had discussed selling up for years it had never been easy making money from the business but it was all he knew and he wasn't sure that he could invest well enough to give him the...
Source: New Zealand Herald - Business | 6 Sep 2008 | 4:00 pm

Bailout Nation

It looks like Hank Paulson was wrong about not having to use his bazooka; this weekend it gets fired right at the bosses of Fannie Mae and Freddie Mac and the investors foolhardy enough to have bought their shares.

Now that the Federal government’s rescue of the mortgage industry’s twisted siblings is assured, Paulson has a huge job ahead of him. Holding the chiefs of each company accountable for the debacle and temporarily soothing markets isn’t enough; the two companies must be transformed so they don’t again have to live off Washington’s largesse.

As the weekend began, reports said Paulson would be removing Fannie Mae Chief Executive Officer Daniel Mudd and Freddie Mac CEO Richard Syron from their jobs and putting the two companies into a conservatorship, where they would be removed from their jobs.

Friday, according to press reports, the Treasury Secretary and ex-Goldman Sachs CEO met with two executives and was joined by Federal Reserve Chairman Ben Bernanke, and the companies' new regulator, the Federal Housing Finance Agency.

Now, as outlined by the New York Times, the Journal and others, Treasury will be knocking off the top executives and the boards of the each company, wiping out holders of common stock, providing periodic payouts to the company to shore up its finances, and backing distressed mortgages. There was no estimate on how much money the government would be pumping into the companies.

In July, Paulson told the Senate Banking Committee that merely knowing Treasury has the authority to inject money would reassure the markets and preempt a government bailout of the pair or any other financial giant. "If you have a bazooka in your pocket and people know it, you probably won't have to use it," he boasted on Capitol Hill.

Last year at this time, Fannie and Freddie shares traded at over $60. Since then, investors have seen roughly 80 percent of their holdings evaporate en route to the single digits.

Syron and Mudd have been heavily criticized for ratcheting up the Fannie and Freddie lending machines, often getting involved in mortgage lending that fell outside of the historical guidelines by which the companies operated. Syron, especially, has been hit for being paid $38 million during the past three years.

Critics charge that as the U.S. housing market rallied, the bosses at Fannie and Freddie took on more risk, backing mortgages from less qualified borrowers and in larger amounts as property prices skyrocketed.

The swift demise of the U.S. real estate market—especially weakness in Southeast and West markets—left the twin GSEs in a financially precarious position.

In early August, Freddie reported a larger-than-expected loss of $821 million for the fourth quarter—the fourth straight losing quarter. It also said it expected to cut its dividend of 25 cents per share to 5 cents or less, illustrating again that its scramble to raise capital was far from over.

As their shares plummeted, the same overseas investors who once snapped up Fannie and Freddie bonds dumped them back on to the market—including the Bank of China, which has cut its debt holdings in the pair by more than a quarter, from nearly $11 billion at the end of June, according to the Financial Times last week.

Critics have long called for the pair to be totally privatized so the government wouldn’t be forced into bailing them out in the midst of a housing and economic crisis.

Source: Portfolio.com: Top 5 | 6 Sep 2008 | 4:00 pm

Top tips : What directors should do when the cash runs out

Mike Whale and Mark Lowndes, of Lowndes Associates' insolvency and restructuring team, advise what directors should do when the cash runs out. If a company can't pay its bills on time, are the directors personally liable? Yes....
Source: New Zealand Herald - Business | 6 Sep 2008 | 4:00 pm

Alitalia adviser to meet BA on rescue plan: report (Reuters)

Reuters - Alitalia's (AZPIa.MI) adviser will soon present its rescue plan for the airline to British Airways , considered by Italy as a possible foreign partner for the bankrupt airline, an executive told a newspaper.

Source: Yahoo! News: Business | 6 Sep 2008 | 3:44 pm

Alitalia adviser to meet BA on rescue plan: report

CERNBOBBIO (Reuters) - Alitalia's adviser will soon present its rescue plan for the airline to British Airways , considered by Italy as a possible foreign partner for the bankrupt airline, an executive told a newspaper.

Source: Reuters: Business News | 6 Sep 2008 | 3:43 pm

Boeing's (BA) Management Fails

Boeing (BA) management had to define its success this year by avoiding a strike by its machinists. The executives have already failed at getting the company's new flagship Dreamliner into production one time. In the process, they alienated a number of their key airline customers.

Boeing management also lost its bid for the new Air Force tanker plane. Northrop Grumman (NOC) got the contract and Boeing is trying to get it back. As the incumbent, Boeing should not have lost it in the first place.

Boeing played hard ball with the machinists. Its logic was that much higher wage and benefits deals would hurt the company down the road, if Boeing's revenue growth began to slow. The machinists correctly looked at the Boeing back orders of planes and said the argument was hog wash. Boeing has been making a lot of money, enough to go around.

What Boeing management has almost certainly succeeded in doing is putting the Dreamline at risk of more delays. If the strike goes on for any extended period, it is hard to imagine that the project can keep up with its time tables.

Boeing investors have already been keelhauled by the company. Its stock is down from a 52-week high of $107.15 to under $63.

Investors can now watch the shares trade much lower.

Douglas A. McIntyre

Source: 24/7 Wall St. | 6 Sep 2008 | 12:59 pm

Ford (F) Tries To Play Small Ball (TM)(GM)(HMC)

Ford (F) wants investors to think that there is profit in small cars. Since there is no money in SUVs and pick-ups, that is the company's only option. Gas prices are probably not going back to $2 a gallon.

The Ford PR machine ramped up recently making the case that the company could make a nifty margin on tiny vehicles which sell for under $20,000 a year. It will retool its factories to get cost-per-vehicle down.

According to The Wall Street Journal Jim Farley, Ford's global vice president for marketing and communication, said in a presentation to journalists here that the new Ford Fiesta, the company's latest stab at a small, global car, was "core to the DNA of the company and a catalyst" for necessary change.

Odd as it may seem, small cars are core to the DNA of Honda (HMC), Toyota (TM), Nissan, VW, and some divisions of GM (GM). Ford is racing to a segment of the vehicle market which is already extremely crowded and one where a number of its competitors have a significant head start. Toyota and Honda may be a half a decade out in front of Ford in the manufacturing and marketing of hybrids.

Ford's is also up against the "quality" road block. There is not much evidence that consumers put the company at the top of the food chain in customer satisfaction. As a matter of fact, Ford may be close to the bottom.

Ford owned the SUV and pick-up markets and it was a hell of a business for a long time. In the small sedan part of the industry, it is at the end of a long line.

Douglas A. McIntyre

Source: 24/7 Wall St. | 6 Sep 2008 | 12:37 pm

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