Emerging Markets Report: Russian stock markets remain on hold

Russia’s financial markets remain in flux Thursday as a halt in stock trading on the country’s major exchanges continues, according to published reports.

Source: MarketWatch.com - Top Stories | 18 Sep 2008 | 1:25 pm

Liquidity boost set to lift Wall Street at open (Reuters)

Reuters - Stocks were poised to open higher on Thursday, helped by a coordinated push by the world's leading central banks to pump billion of dollars into global financial markets to thaw the credit freeze.

Source: Yahoo! News: Business | 18 Sep 2008 | 1:22 pm

Central banks turn on funding taps to tackle market squeeze (Reuters)

Reuters - The world's top central banks joined forces on Thursday to throw a multi-billion dollar lifeline to global markets in a dramatic effort to free up bank-to-bank lending, frozen by the upheavals on Wall Street.

Source: Yahoo! News: Business | 18 Sep 2008 | 1:20 pm

Futures Movers: Crude futures' gains carry over into a second session

Crude-oil futures make further gains, moving higher after the world’s biggest central banks inject additional liquidity into the financial system and as the dollar loses ground.

Source: MarketWatch.com - Top Stories | 18 Sep 2008 | 1:19 pm

Status on Companies Raising Cash (ORA, TCBI, VRTX, OTTR)

Source: 24/7 Wall St. | 18 Sep 2008 | 1:18 pm

Corrections: Lloyds TSB to buy rival HBOS for $22.2 billion

On Sept. 18 a MarketWatch report gave the incorrect name for one of HBOS' banking divisions. The correct name of the unit is the Bank of Scotland. See corrected story.

Source: MarketWatch.com - Top Stories | 18 Sep 2008 | 1:13 pm

Metals Stocks: Gold climbs another $30 after $70 spike on Wednesday

The rally in gold extends into a second session as the turmoil in financial markets led the Fed and five other central banks to take further efforts to get money markets moving again.

Source: MarketWatch.com - Top Stories | 18 Sep 2008 | 1:09 pm

BA pension scheme deficit widens

There has been an increase in the deficit of the main pension scheme for staff at British Airways.
Source: BBC News | Business | World Edition | 18 Sep 2008 | 1:07 pm

Hurricane Ike takes bite out of DuPont, Rohm & Haas

Hurricane Ike storm damage at facilities in the Houston area causes DuPont and Rohm & Haas to declare Thursday that they will be unable to meet some of their contractual obligations to customers.

Source: MarketWatch.com - Top Stories | 18 Sep 2008 | 1:07 pm

CORRECT: Lloyds TSB to buy rival HBOS for $22.2 billion

U.K. bank Lloyds TSB said Thursday it’s going to buy HBOS for 12.2 billion pounds ($22.2 billion) in a deal backed by British authorities as a way to bring stability back to financial markets.

Source: MarketWatch.com - Top Stories | 18 Sep 2008 | 1:07 pm

FedEx quarterly profit falls 22% on fuel costs

FedEx's first-quarter profit falls 22% despite volume growth, as global economic weakness and higher fuel prices eat into the shipping company’s bottom line.

Source: MarketWatch.com - Top Stories | 18 Sep 2008 | 1:07 pm

Oil hovers around the $100 benchmark

Oil prices rose Thursday, passing the $100-a-barrel mark, as the chaos on Wall Street motivated investors to move out of stocks an into safer investments, such as oil, gold and Treasurys.

Source: Business and financial news - CNNMoney.com | 18 Sep 2008 | 1:05 pm

Lloyds TSB deal for HBOS: FTSE rebounds after three-day fall

The FTSE 100 rebounded from the steepest three-day fall in six years as the market welcomed Lloyds TSB's acquisition of HBOS.
Source: Telegraph Business | 18 Sep 2008 | 1:03 pm

A new way to find online videos

Source: Business and financial news - CNNMoney.com | 18 Sep 2008 | 1:00 pm

NewsWatch: U.S. stock futures rise with WaMu, Morgan Stanley on block

The financial crisis headed into its fourth day on Thursday, as Washington Mutual and Morgan Stanley were on the block and the Federal Reserve led a coordinated effort to inject $180 billion into the financial system.

Source: MarketWatch.com - Top Stories | 18 Sep 2008 | 1:00 pm

Central banks flood credit markets with liquidity

The Federal Reserve and other major central banks announce plans to inject huge amounts of liquidity into the financial system in a bid to thaw frozen short-term money markets.

Source: MarketWatch.com - Top Stories | 18 Sep 2008 | 12:54 pm

U.S., Euro firms eye Constellation Energy

Constellation Energy Group draws interest from a number of American and European buyers as the S&P component moves to sell all or part of itself to stave off a terminally fatal debt downgrade, according to a published report on Thursday.

Source: MarketWatch.com - Top Stories | 18 Sep 2008 | 12:52 pm

Liquidity moves lift mood on Wall St

US stocks were set for a higher start, suggesting a co-ordinated move by the world's main central banks to inject dollar liquidity into money markets offered rattled investors some reassurance
Source: FT.com - US homepage | 18 Sep 2008 | 12:52 pm

Citigroup unlikely to proceed with WaMu deal: report (Reuters)

Reuters - Citigroup Inc is unlikely to proceed with a possible deal involving savings and loan company Washington Mutual Inc , the Wall Street Journal said on Thursday, citing one person familiar with the situation.

Source: Yahoo! News: Business | 18 Sep 2008 | 12:51 pm

Capstone Turbine Changes Tune In Securities Sales (CPST)

Source: 24/7 Wall St. | 18 Sep 2008 | 12:51 pm

Why SanDisk should hold out

Samsung is going in for the kill but flash memory is a boom-bust business and SanDisk's fortunes will inevitably revive.

Source: Business and financial news - CNNMoney.com | 18 Sep 2008 | 12:50 pm

Jobless claims rise on delayed Gustav data

WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless benefits rose unexpectedly by 10,000 last week, as the first wave of job losses from Hurricane Gustav rolled in after reporting delays in Louisiana, the Labor Department reported on Thursday.

Source: Reuters: Business News | 18 Sep 2008 | 12:45 pm

Thousands face axe in HBOS merger

Lloyds TSB releases details of its £12.2bn ($22.2bn) takeover of HBOS, a deal that will create a new UK banking giant.
Source: BBC News | Business | World Edition | 18 Sep 2008 | 12:45 pm

Stocks set to cheer banks' move

Stocks were poised to rise at the open Thursday as central banks around the world acted to calm markets shaken by the U.S. financial crisis.

Source: Business and financial news - CNNMoney.com | 18 Sep 2008 | 12:45 pm

The Pres. Candidates on Taxes, Housing and Health Care (SmartMoney Magazine)

Where the candidates stand on taxes, the housing crisis and health care coverage.

Source: SmartMoney.com | 18 Sep 2008 | 12:44 pm

Jobless claims on the rise

The number of out-of-work Americans who signed up for jobless benefits rose last week, the government reported Thursday, surprising economists who expected fewer claims.

Source: Business and financial news - CNNMoney.com | 18 Sep 2008 | 12:43 pm

Washington Mutual is for sale: sources

NEW YORK (Reuters) - Washington Mutual Inc , the giant U.S. savings and loan beleaguered by mortgage losses, has put itself up for sale, sources familiar with the matter said on Wednesday.

Source: Reuters: Business News | 18 Sep 2008 | 12:42 pm

Alitalia "hanging by a thread" on decision day

ROME (Reuters) - Italy's labour minister said liquidation of Alitalia was a "very real risk" later on Thursday when an investor group offering to revive the dying airline was due to make its final decision.

Source: Reuters: Business News | 18 Sep 2008 | 12:41 pm

Russia floods markets with cash in shutdown

Russia's battered stock exchanges remained closed today as President Dmitri Medvedev ordered the Government to pour billions of pounds into saving the financial system.
Source: Latest Business News from Times Online | 18 Sep 2008 | 12:25 pm

FedEx profit meets Wall St view

DETROIT (Reuters) - Package delivery company FedEx Corp reported quarterly profit in line with estimates, but said earnings had been hurt by challenging global economic conditions and high fuel prices.

Source: Reuters: Business News | 18 Sep 2008 | 12:25 pm

Russia injects $19.5bn to restore markets

Russia's president said that the country would spend $19.59bn to support and stabilise its financial markets as share trading on its two main exchanges remained shut, with trading to resume on Friday. The government also announced plans to slash export duties on oil and refined products in order to free up $5.5bn worth of liquidity from oil companies
Source: FT.com - US homepage | 18 Sep 2008 | 12:25 pm

Clock ticking on deal for Lehman's Asia group

HONG KONG/TOKYO (Reuters) - Lehman Brothers staff in Asia remain in the dark about the fate of their business, with the clock ticking on any deal with a potential buyer.

Source: Reuters: Business News | 18 Sep 2008 | 12:23 pm

Stock futures rise on liquidity boost, deal talk

NEW YORK (Reuters) - Stock index futures rose on Thursday, helped by a coordinated push by the world's leading central banks to pump billion of dollars into global financial markets to thaw the credit freeze.

Source: Reuters: Business News | 18 Sep 2008 | 12:23 pm

Morgan Stanley in talks as fear grips financials

HONG KONG/LONDON (Reuters) - Morgan Stanley topped the list of major financial firms scrambling to find a buyer, while central banks rushed in $180 billion of extra liquidity to bring some calm to panicked stock and money markets.

Source: Reuters: Business News | 18 Sep 2008 | 12:16 pm

Extra funds pumped into markets

Global central banks pump billions of dollars into the money markets in a co-ordinated move to try to keep funds flowing.
Source: BBC News | Business | World Edition | 18 Sep 2008 | 12:10 pm

Euro stocks up, Asia's down as central banks act

FRANKFURT, Germany -- European stocks halted three days of losses in early afternoon trading Thursday, rising slightly after a concerted effort by central banks to pump billions more U.S. dollars into troubled money markets and limit the global financial crisis. Asian markets fell.

Source: L.A. Times - Business | 18 Sep 2008 | 12:08 pm

GM thinks beyond the Volt

The applause hasn't died down for the new Chevrolet Volt, but General Motors is already planning where the technology for its first electric car can go next.

Source: Business and financial news - CNNMoney.com | 18 Sep 2008 | 12:02 pm

Hit the Panic Button

With fear paralyzing the global money markets, the world’s leading central banks are riding to the rescue, announcing that they will pump in huge amounts of U.S. dollars into the system.

More than $180 billion will be made available to banks for short-term financing, under a coordinated effort among the Federal Reserve, the European Central Bank, the Bank of Japan, the Bank of England, the Bank of Canada, and the Swiss National Bank.

The Fed also says that it taking steps in order to be better able to transfer dollars to foreign banks. While the crisis of confidence has gripped nearly all money markets, the stress in dollar-denominated markets has been particularly acute in recent days.

In a joint statement, the banks said: “These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets. The central banks continue to work together closely and will take appropriate steps to address the ongoing pressures.”

The tidal wave of money quickly steadied markets around the world. Stock markets in Asia and then Europe turned higher.

More important, the overnight interest rates that banks charge each, which had spiked higher in recent days, fueling the crisis, retreated today.

The question is how long can market stay calm. 

The fear that another big financial institution will collapse is still very much with us, as is the fear that there is more toxic debt in the system to be discovered -- a realization illustrated by the announcement on Tuesday by a “safe” large money-market fund that investors might lose money because of a write-down of Lehman Brothers securities that were held by the fund.

There is a reason for the fear in the market, even if that fear is now feeding on itself.

Another reason not to be too encouraged by the joint central bank action is that the central banks have shown themselves to be largely impotent in wresting with the 14-month crisis.

"Markets know that central banks don't own a magic bullet, otherwise they would have used it already," Sean Callow, currency strategist at investment firm Westpac, told the BBC.

John Jansen on the Across the Curve blog says: “Volatility will not end suddenly but will diminish over time. So expect the same forces which have assaulted the markets recently to buffet the markets once again today. The winds of change blow slowly and it is too soon to expect the market to turn placid.”

Related Links
The Fed Turns Up the Tap
The Abstract: Jackson Hole Symposium Papers
Even More Power for the Fed?


Source: Portfolio.com: Top 5 | 18 Sep 2008 | 12:00 pm

RIM steps up pace in Asia amid U.S. slowdown

MUMBAI (Reuters) - Research in Motion Ltd will add new carriers in fast-growing emerging markets, and does not yet see an adverse impact from a widening global financial crisis, its...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Sep 2008 | 11:55 am

BoC to buy stake in Rothschild bank

Bank of China is set to acquire a 20 per cent stake in a French financial services company controlled by a leading member of the Rothschild family.People familiar with the matter said that the landmark...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Sep 2008 | 11:48 am

Central banks turn on funding taps to tackle market squeeze

FRANKFURT/TOKYO (Reuters) - The world's top central banks joined forces on Thursday to throw a multi-billion dollar lifeline to global markets in a dramatic effort to free up bank-to-bank lending, frozen by the upheavals on Wall Street.

Source: Reuters: Business News | 18 Sep 2008 | 11:46 am

Analysis: How serious is the financial crisis for Asia?

There's a joke doing the rounds in Shanghai asking what the difference is between Chinese and American banks.
Source: Telegraph Business | 18 Sep 2008 | 11:45 am

Analysis: How serious is the financial crisis for Asia?

There's a joke doing the rounds in Shanghai asking what the difference is between Chinese and American banks.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Sep 2008 | 11:45 am

Lloyds seals $22 billion rescue deal for HBOS

LONDON (Reuters) - Lloyds TSB sealed a rescue takeover of HBOS Plc on Thursday to create a dominant British mortgage and savings bank in a $22 billion deal helped through by the government.

Source: Reuters: Business News | 18 Sep 2008 | 11:40 am

Morgan Stanley in talks as fear grips financials (Reuters)

Reuters - Morgan Stanley topped the list of major financial firms scrambling to find a buyer, while central banks rushed in $180 billion of extra liquidity to bring some calm to panicked stock and money markets.

Source: Yahoo! News: Business | 18 Sep 2008 | 11:38 am

Euro stocks up, Asia's down as central banks act

European stocks halted three days of losses in early afternoon trading Thursday, rising slightly after a concerted effort by central banks to pump billions more U.S. dollars into troubled...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Sep 2008 | 11:32 am

ECB, Fed, others pump billions into money markets

The world's major central banks banded together on Thursday to inject as much as $180 billion into money markets in a bid to stave off the growing global financial crisis. The Federal...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Sep 2008 | 11:30 am

Early Bird Pre-Market Analyst Upgrades & Downgrades (ADTN, EYE, HOC, INCY, PTR, CEG, KSS, VNO, WFMI)

These are some of the early bird analyst calls we are seeing in stocks this Thursday morning which could impact shares:

• ADTRAN (ADTN) Raised to Outperform at Baird.
• Advanced Medical Optics (EYE) Started as Overweight at Thomas Weisel.
• Constellation Energy (CEG) Cut to Hold at Citigroup.
• Holly Corp. (HOC) Raised to Buy at Goldman Sachs.
• Incyte Corp. (INCY) Started as Buy at Goldman Sachs.
• Kohl's (KSS) Cut to Hold at Citigroup.
• PetroChina (PTR) Raised to Outperform at Credit Suisse.
• Vornado Realty Trust (VNO) Cut to Market Perform at Wachovia.
• Whole Foods (WFMI) Started as Underperform at FBR.

Jon C. Ogg
September 18, 2008

Source: 24/7 Wall St. | 18 Sep 2008 | 11:27 am

Russian markets closed until Friday

Russia ordered its main stock exchanges closed for another day Thursday as President Dmitry Medvedev called for pouring 500 billion rubles ($20 billion) into financial markets in an effort...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Sep 2008 | 11:25 am

GE CDS spreads show irrational liquidity fears: analyst

(Reuters) - The cost of insuring the debt of General Electric Capital Corp, the finance arm of General Electric Co , has widened to unprecedented levels indicating heightened liquidity...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Sep 2008 | 11:24 am

GE CDS spreads show irrational liquidity fears: analyst

(Reuters) - The cost of insuring the debt of General Electric Capital Corp, the finance arm of General Electric Co , has widened to unprecedented levels indicating heightened liquidity fears, but these fears appear "irrational," an analyst at Deutsche Bank said.

Source: Reuters: Business News | 18 Sep 2008 | 11:24 am

Yemen arrests 30 after US embassy bombing

Yemeni authorities have arrested 30 people suspected of belonging to al-Qaeda following an attack on the heavily fortified US embassy in Sanaa, a security source said
Source: FT.com - US homepage | 18 Sep 2008 | 11:22 am

Government to push Lloyds-HBOS deal through

Lloyds TSB said on Thursday it expected annual savings of "significantly in excess of 1bn" from its 12.2bn takeover of HBOS by 2011, but said it had yet to decide on how many job losses would be involved...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Sep 2008 | 11:17 am

Government to push Lloyds-HBOS deal through

Lloyds said it expected annual savings of 'significantly in excess of £1bn' from its £12.2bn takeover of HBOS by 2011, but it had yet to decide on how many job losses would be involved
Source: FT.com - US homepage | 18 Sep 2008 | 11:17 am

Darling seeks bank job assurances

The chancellor raises concern for Scottish jobs after Lloyds TSB unveiled details of its takeover of HBOS.
Source: BBC News | Business | World Edition | 18 Sep 2008 | 11:08 am

B&Q firm faces 'very tough times'

B&Q-owner Kingfisher warns it is facing "very tough times", despite unveiling better-than-expected profits
Source: BBC News | Business | World Edition | 18 Sep 2008 | 11:07 am

Central banks act to calm markets

The world's main central banks on Thursday unveiled large-scale emergency injections of dollar liquidity in an attempt to halt the escalating global financial market crisis.The US Federal Reserve announced...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Sep 2008 | 11:07 am

Central banks act to calm markets

The US Federal Reserve is making available $180bn in extra funding to be pumped into overnight and longer-term money markets following the dramatic escalation of tensions following the collapse of Lehman, the rescue of AIG and the continuing crisis on Wall Street
Source: FT.com - US homepage | 18 Sep 2008 | 11:07 am

Central bank moves cheer markets

Markets regain some poise, taking heart from news that the world's top central banks have taken steps to calm credit markets.
Source: BBC News | Business | World Edition | 18 Sep 2008 | 11:01 am

Bank deal halts share sell-off in London

London equities mounted a steady recovery on Thursday as investors joined regulators and politicians in welcoming news of Lloyds TSB's 12.2bn bid for HBOS. The FTSE 100, which fell below 5,000 for the...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Sep 2008 | 11:01 am

Financial Advisors at Merrill Lynch and Morgan Stanley Are Assessing Their Employment Options, Says The Law Offices of Patrick J. Burns, Jr., P.C.

BEVERLY HILLS, Calif., Sept. 18 /PRNewswire/ -- The recent takeover of Merrill Lynch (Merrill) by Bank of America and takeover over talk concerning Wachovia possibly...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Sep 2008 | 11:00 am

ProLogis Releases New Research Report on Central and Eastern Europe's Emerging Logistics Infrastructure

- Continued Investment in a World-Class Transportation Network is Bringing the Central and Eastern Region Closer to Economic Parity with Western Europe - DENVER, Sept....
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Sep 2008 | 11:00 am

[video] Kevin Kroger, President and COO of Puradyn Filter Technologies, Inc. Discusses Puradyn's Relationship With Avis Budget Group on WallSt.net's 3-Minute Press Show

PARSIPPANY, N.J., Sept. 18 /PRNewswire-FirstCall/ -- Puradyn Filter Technologies, Inc. (OTC Bulletin Board: PFTI), a company that designs, manufactures and markets the...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Sep 2008 | 11:00 am

EU tells Jagger it wants retail satisfaction

Veteran rock star Sir Mick Jagger helps the EU to prepare new guidelines to simplify internet shopping.
Source: BBC News | Business | World Edition | 18 Sep 2008 | 10:58 am

Oil rises as investors eye US financial turmoil

Concerns over deepening turmoil in the U.S. financial system sent oil prices higher Thursday as investors turned away from equities in favor of commodities. Unrest in oil-rich Nigeria also...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Sep 2008 | 10:58 am

Stocks head for higher open after Wednesday's rout

Wall Street headed for a higher open Thursday after the previous session's massive rout that sent investors fleeing stocks in response to the bailout of insurer American International Group
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Sep 2008 | 10:57 am

Clock ticking on deal for Lehman's Asia group (Reuters)

Reuters - Lehman Brothers staff in Asia remain in the dark about the fate of their business, with the clock ticking on any deal with a potential buyer.

Source: Yahoo! News: Business | 18 Sep 2008 | 10:56 am

Mortgage lending falls by 12% to 16-year low

The flow of money into Britain's housing market is rapidly dwindling to a trickle, according to figures from the Council of Mortgage Lenders (CML), which this morning reported that Britons borrowed £21.8 billion in August to buy homes, 12 per cent less than in the previous month.
Source: Latest Business News from Times Online | 18 Sep 2008 | 10:56 am

Russia trading halted amid stock crisis

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 18 Sep 2008 | 10:56 am

Nano car factory row 'to resume'

Protests over a plant which is to make the world's cheapest car look set to resume in India's West Bengal state.
Source: BBC News | Business | World Edition | 18 Sep 2008 | 10:55 am

Moscow tries to stem market panic

Moscow's stock markets remain closed, as the government tries to stem a plunge in share prices and restore confidence.
Source: BBC News | Business | World Edition | 18 Sep 2008 | 10:47 am

Mortgage lending slumps in August

Mortgage lending continued its downward spiral in August, according to the latest figures from mortgage lenders.
Source: BBC News | Business | World Edition | 18 Sep 2008 | 10:38 am

Google (GOOG) Defies The Authorities

Google (GOOG) told regulators who do not like its program to sell search advertising for Yahoo! (YHOO) to go to hell. Antitrust authorities in the US and EU have expressed concerns that having the two largest search companies in America working together will raise ad prices. There are a number of economic precedents to show that their concerns are valid.

Google is taking the calculated risk that the authorities will drop their investigation. It is also risking angering them, which may substantially hurt its position.

According to the AP, Google CEO Eric Schmidt said he isn't willing to wait very much beyond an Oct. 11 deadline spelled out in the companies' contract. The man may be right. Yahoo! needs the money now that it has turned down an offer from Microsoft (MSFT). The portal company has to be able to make the case to shareholders that it can bring in stunning profits as a standalone company. With the Google deal delayed waiting for regulatory decisions, Yahoo!'s situation gets worse.

Yahoo!'s trouble may be the best argument in favor of the partnership with Google. Yahoo!'s search share in the US is now below 20%. It is no longer much of a force in that market. Without Google's help, it might fall into a pit and never get out.

Google can raise rates without a link-up with Yahoo!. Google has 70% of the search market in America. Hooking up with a weak sister may make it money, but its does not improve its leverage on what it charges advertisers.

That is Google's case, and it is sticking to it.

Douglas A. McIntyre

Source: 24/7 Wall St. | 18 Sep 2008 | 10:36 am

European banks lifted by liquidity measures

European shares snapped a three-day losing run after joint action by global central banks to pump liquidity into money markets and thaw an interbank lending freeze. In late morning trade, the pan-European...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Sep 2008 | 10:23 am

Asia shares stage late recovery

Many Asian stock markets regained losses on Thursday as six central banks provided massive amounts of liquidity to the world's financial system to counteract the panic caused by the collapse and takeovers...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Sep 2008 | 10:21 am

Asia shares stage late recovery

Many Asian stock markets regained losses on Thursday as six central banks provided liquidity to the world's financial system to counteract the panic caused by struggling financial institutions on both sides of the Atlantic.
Source: FT.com - US homepage | 18 Sep 2008 | 10:21 am

Suspending Short Selling Entirely?

There are two compelling arguments against suspending short selling completely, even if it is for only a brief period. The first is that a free market allows investors to make money by betting that stocks will go down. Why should the bulls be allowed to make all of the profits unchecked by those willing to take the other side of the gamble?

The second argument is that a hiatus on short selling could cost shorts billions of dollars as investors see stocks rise after putting good money into the proposition that they will fall.

The government has not had a problem with ending or temporarily amending a number of rules in the hope that it can save the financial system.

The SEC has already said that naked short selling will be ferreted out and punished. It makes no mention of the fact that naked shorting has always been illegal. What was bad before is still bad. Repeating the admonition does not make a difference.

Earlier this year, the SEC was willing to curtail short activity in some financial stocks for a period of time.

John Mack, who has had the good fortune of running almost every company on Wall St., said from his office at Morgan Stanley (MS) that panic and rumors from short sellers where driving his stock down. It was clearly a self-serving statement, but that does not make it any less less true.

A number of regulators and financial executives believe that rumors from short sellers helped bring down Lehman Brothers (LEH) and damage the share price of AIG (AIG).

The federal government has already made the decision to go beyond anything it has done in 80 years to insure that the US financial system does not dissolve into a miasma. Some traders believe that the actions are draconian and perhaps illegal. But, the body that makes the laws would argue that it cannot break them.

If the SEC, the Fed, and Treasury want to act in concert to arrest the attacks on the shares of financial companies, they can suspend short selling for a predetermined period. Investors can still sell the stocks, but they cannot bet ahead that they will go down.

If the government is going to effectively seize control of certain free market systems, it might as well go all the way.

Douglas A. McIntyre

Source: 24/7 Wall St. | 18 Sep 2008 | 10:19 am

Central Banks Unite to Aid Global Money Markets

The Federal Reserve and other central banks massively escalated assistance offered to global money markets.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Sep 2008 | 10:09 am

A Lesson From Russia: Close The Markets

Most Americans think that closing the markets for a day or two is the action of socialists and not an appropriate way to deal with the current credit debacle.

Nevertheless, the Russians like the idea and will shutter their markets until Friday. The government there has also put $70 billion into the financial system to improve liquidity. Tomorrow morning, the world will get to see whether the action helped.

If the Fed and Treasury are willing to take actions that undermine a free market system, closing the exchanges is an appropriate way to settle the panic down. On top of bailouts of AIG (AIG), Fannie Mae (FNM), and Freddie Mac (FRE), the Fed has offered several hundred billion dollars worth of loans at its bank and brokerage window.

A broad group of central banks from around the globe said today that they will provide another $180 billion to improve market liquidity in the hope that increasing access to capital will help alleviate a shortage of dollars. The theory is that this shortage has been driving financial stocks to multi-decade lows.

There is a large school of government officials and bank executives that believe that rampant speculation and short selling are causing a moment-to-moment panic which is destroying a system without giving thought to the consequences.

What would closing the US market for one day do? It would increase the already heavy hand that the federal government has placed upon market capitalization and the survival of some companies. The acts of socialism are already present.

But, closing the markets could have a second, more salutary effect. It might make traders stop and think, regroup for a moment, and reflect on whether making money from short-term trading is worth destroying the underlying system.

Douglas A.McIntyre

Source: 24/7 Wall St. | 18 Sep 2008 | 9:57 am

Lloyds confirms takeover of UK mortgage lender

Source: Business and financial news - CNNMoney.com | 18 Sep 2008 | 9:47 am

The hottest tech job in America

It looks like a scene from an old episode of "The X-Files": As a red-tailed hawk circles overhead and a wild pronghorn sheep grazes in the distance, a dozen people in dark sunglasses move methodically through a vast field of golden barley, eyes fixed to the ground, GPS devices in hand. They're searching for bodies.

Source: Business and financial news - CNNMoney.com | 18 Sep 2008 | 9:36 am

Central Bank Action Reverses Market Slides

For the time being, the move by central banks to add $180 billion to the financial systems to improve liquidity at large banks and brokerages seems to be working.

The Hang Seng, which was down over 7% closed flat. Markets in Europe are rising and shares in RBS (RBS) are up almost 10%. Shares in troubled HBOS are up 47%.

Futures for US markets are rising 1% to 2% ahead of the open.

Douglas A. McIntyre

Source: 24/7 Wall St. | 18 Sep 2008 | 9:34 am

Attacking The Wrong Problem: Huge Help For Banks, Nothing For Mortgages

The Fed and a number of other large central banks will put $180 billion into the markets to improve liquidity. Policy makers ``continue to work together closely and will take appropriate steps to address the ongoing pressures,'' a joint release from the agencies said.

Putting more dollars into the system may help some firms, at least short term. The Hang Seng index, which was down over 7% early in its session ended flat.

The critical question is whether the government actions attack the root cause of the trouble or merely help the largest financial institutions to stay in business.

Dumping capital into the system and saving companies like AIG (AIG) is a "from the top down" approach. It attacks problems once they have festered at huge institutions. The bailout solves the surface problem of liquidity, but does almost nothing to address the root issue. As a matter of fact, it may erode the recovery of the most critical portion of the crisis, the housing market.

Until falling home sales begin a reversal, the system-wide trouble of leverage at banks, insurance companies, and brokerage firms will grow. If the value of the asset creating the fulcrum is dissolving, nothing which rests on it can rise.

The Commerce Department reported yesterday that starts of new homes fell 6.2% to a seasonally adjusted annual rate of 895,000, the lowest in 17 years. Building permits for single- and multiple-family dwellings fell 8.9% to a 26-year low of 854,000 annualized units.

The combined total of the capital put into AIG, Fannie Mae (FNM), and Freddie Mac (FRE) could easily top $200 billion. The market caps of the 10 largest financial companies in the US have dropped more than $700 billion in the last year. There is no accurate figure of how much the Fed has loaned banks at low rates through its "window", but what is certain is that the paper the agency has taken is not worth $1 on $1. Now, central banks will add another $180 billion to the lake of capital meant to "save" the system of large global financial institutions.

The extreme pressure ripping at the US economy will have to be addressed from the bottom up. Having the Fed give money to banks may help them rebuild their balance sheets, but these banks are not pushing that capital into the larger financial system and it is certainly not going to increase the number of mortgages.

The problem with the financial infrastructure is granular, and for that reason it cannot be negated by saving the largest banks. If the homeowner is not "saved" the balance of the system cannot be healed.

Douglas A. McIntyre

Source: 24/7 Wall St. | 18 Sep 2008 | 9:28 am

Central bank liquidity move hits yen

The yen fell against the dollar and the euro on Thursday as global central banks announced co-ordinated action to ease liquidity tension in the world's money markets.Worries over the health of the global...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Sep 2008 | 9:27 am

European Markets Are Up, but Asian Slide Continues

European stocks opened slightly higher, after another slide in Asia, as sentiment was helped by a massive central bank fund injection and a major deal in Britain.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Sep 2008 | 8:44 am

Why down may be the new up

Feeling gloomy? That may be a good sign. Widespread pessimism often suggests that better times are ahead. (After all, once you hit bottom, the only way to go is up.)

Source: Business and financial news - CNNMoney.com | 18 Sep 2008 | 8:43 am

Gold price rises 10% as investors flee to safety

Market turmoil sent gold on a rollercoaster ride in Asia today, rising more than 3 per cent after Wednesday's extraordinary leap in the price of bullion before later slipping back.
Source: Latest Business News from Times Online | 18 Sep 2008 | 8:29 am

US Fed injects $180bn to stabilise global markets$

Staff fears over HBOS merger | Bad habits led HBOS to terminal ward | Fear stalks the banks | Brown's gamble | Japan releases £13bn to stem Asia market | Banking crisis will hit us all
Source: Latest Business News from Times Online | 18 Sep 2008 | 8:12 am

Lloyds TSB deal for HBOS: Thousands of jobs set to go

Thousands of jobs are set to go when Lloyds TSB completes its £12.2bn rescue of HBOS as the new bank, which will be Britain’s biggest, faces Britain's first recession in two decades.
Source: Telegraph Business | 18 Sep 2008 | 8:10 am

China vows to overhaul dairy industry

China has vowed to overhaul its "chaotic" dairy industry in the wake of a toxic milk scandal that has killed three infants and made thousands more ill, as worried parents flocked to hospitals to have their children examined
Source: FT.com - US homepage | 18 Sep 2008 | 8:09 am

Russian exchanges closed for third day to stem panic-selling

Trading on the Russian stock market remained suspended for a third day after the worst plunge in share prices since the 1998 financial crisis.
Source: Telegraph Business | 18 Sep 2008 | 8:01 am

Media Digest 9/18/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, Morgan Stanley (MS) is in merger talks with several firms.

Reuters says HSBC (HBC) may be a possible buyer for Morgan Stanley.

Reuters reports that Washington Mutual (WM) is being auctioned off.

Reuters reports that the Fed is not likely to change rates this year.

Reuters reports that the SEC is tightening rules on short sales.

Reuters reports that the head of Wells Fargo (WFC) is looking for acquisitions.

The Wall Street Journal reports that the Fed and European central banks will announce a coordinated effort to shore up money markets.

The Wall Street Journal reports that Washington Mutual got the green light from its largest investor to restructure or sell the bank.

The Wall Street Journal reports that Samsung faces challenges for its bid for Sandisk (SNDK) even if the US company accepts the offer.

The Wall Street Journal reports that home building fell to 1991 levels.

The Wall Street Journal reports that Nortel (NT) sharply lowered its forecasts.

The Wall Street Journal says that United (UAUA) is underwater more than $500 million on its full hedges.

The Wall Street Journal reports that Yahoo! (YHOO) is testing a new homepage.

The Wall Street Journal reports that the current crisis is the worst since the 1930s and there is no end in sight.

The Wall Street Journal reports that Russia announced a $70 billion aid package to help its free-falling markets.

The Wall Street Journal reports that Thomson Reuters putting a hire freeze on in its markets division.

The Wall Street Journal reports that the first Google (GOOG) cellphones will sell for $199.

The Wall Street Journal reports the ad spending may fall due to the current financial crisis.

The Wall Street Journal reports the CNBC ratings are up during the credit crisis.

The New York Times reports that federal aid for Detroit seems likely.

The New York Times reports that a House committee wants to interview Lehman (LEH) CEO Fuld on the collapse of his firm.

The New York Time reports that Asia companies and countries are rethinking investing in the US.

The New York Times writes that JP Morgan (JPM) is being questioned by a Senate committee on its oil trades.

The New York Times says that Google (GOOG) will not delay its Yahoo! (YHOO) deal even if regulators need more time to examine it.

The FT reports that Russian shares have lost $700 billion in value in recent months.

Bloomberg writes that the SEC will require hedge funds to disclose their short positions.

Bloomberg reports that Morgan Stanley is losing hedge fund clients

Douglas A. McIntyre

Source: 24/7 Wall St. | 18 Sep 2008 | 7:54 am

Morgan Stanley in talks with Wachovia

Morgan Stanley is in preliminary merger talks with Wachovia, the troubled regional lender, and also in close contact with China Investment Corporation in an effort to avoid becoming the next victim of the credit crunch
Source: FT.com - US homepage | 18 Sep 2008 | 7:53 am

Russian stock market still shut after plunge: market official (AFP)

AFP - Trading on the Russian stock market was suspended for a third day on Thursday after the worst plunge in share prices since the 1998 financial crisis, a market spokesman told AFP.

Source: Yahoo! News: Business | 18 Sep 2008 | 7:29 am

Asia Markets 9/18/2009 (SNE)(TM)

Markets in Asia were sharply lower.

The Nikkei fell 2.2% to 11,489. Sony (SNE) hit a five year low. Honda (HMC) dropped sharply.

The Hang Seng was off over 5% to 16,742. Industrial & Commercial Bank of China dropped as much as 11%. Industrial & Commercial Bank of China also sold off.

The Shanghai Composite was down 1.7% to 1,896.

Data frorm Reuters

Douglas A. McIntyre

Source: 24/7 Wall St. | 18 Sep 2008 | 7:17 am

Lloyds TSB seals £12.2bn HBOS deal

Leading institutional shareholders in HBOS have threatened to block Lloyds TSB's £12.2bn rescue bid for the embattled lender. Their opposition comes despite Government support for the deal amid fears that HBOS risks collapse without a rescue.
Source: Telegraph Business | 18 Sep 2008 | 7:10 am

HBOS - Lloyds TSB merger likely to push up mortgage rates

Mortgage experts said the creation of such a big player would be bad for competition in the market, causing rates to increase.
Source: Telegraph Business | 18 Sep 2008 | 7:10 am

Soaring price of gold deters buyers in Jewelry District

It's turning into a ghost town, says one discouraged merchant. With investors seeking refuge in the precious metal, the price jumps Wednesday to $846.60 an ounce.

Merchants in downtown Los Angeles' Jewelry District gritted their teeth Wednesday as the price of gold soared $70.10 an ounce -- the highest-ever one-day gain in dollars -- and dashed even slim hopes that the struggling economy hadn't wiped out all customers.

Source: L.A. Times - Business | 18 Sep 2008 | 7:00 am

Tech won't be shielded from financial-sector fallout

Share prices of most of the technology bellwethers closed down Wednesday as the U.S. stock market continued to digest the troubling financial news of recent days: Lehman Bros. Holdings Inc. filing for bankruptcy protection, the feds bailing out insurance giant American International Group Inc., Bank of America Corp. picking up Merrill Lynch & Co. for a fraction of its value, and other banks rumored to be in buyout talks.

Source: L.A. Times - Business | 18 Sep 2008 | 7:00 am

Some AIG units in California could fetch high bids

The firm's profitable businesses in the state include 21st Century Insurance and International Lease Finance, which owns more than 950 commercial airliners.

Bargain hunters could snag some good deals by buying parts of troubled American International Group Inc.'s profitable subsidiaries in California and around the world, market analysts predicted Wednesday.

Source: L.A. Times - Business | 18 Sep 2008 | 7:00 am

Washington Mutual is looking for a buyer

U.S. reportedly wants to broker a deal to avoid straining FDIC.

Written off by Wall Street investors, Washington Mutual Inc. put itself on the auction block Wednesday, looking for a buyer strong enough to absorb the huge mortgage loan and credit card losses racked up by the nation's largest savings and loan.

Source: L.A. Times - Business | 18 Sep 2008 | 7:00 am

SEC cracks down on short selling

The panel's chairman proposes that big investors publicly report such bets on a daily basis.

After another day of plummeting stock prices, the Securities and Exchange Commission late Wednesday announced a new effort that could curb "short selling" -- bets on lower prices.

Source: L.A. Times - Business | 18 Sep 2008 | 7:00 am

State warms to greenhouse gas emissions plan

The Air Resources Board touts economic benefits in its analysis, but business groups say companies would be forced to flee.

Few dispute that reducing planet-heating greenhouse gas emissions is a good idea. But fewer still know how much it will cost.

Source: L.A. Times - Business | 18 Sep 2008 | 7:00 am

Financial crisis likely to linger for car, home buyers

The Federal Reserve's refusal to lower interest rates this week means the lending environment won't get any easier, experts say.

The crisis in the financial markets could make it even tougher to get loans to buy cars or houses, and the Federal Reserve didn't make things any easier by declining to lower interest rates this week.

Source: L.A. Times - Business | 18 Sep 2008 | 7:00 am

Sales up, prices down as foreclosures flood Southern California home market

Repossessed properties will soon account for more than half of all sales, experts predict.

So many foreclosed homes are for sale in Southern California that these distressed properties will soon dominate the market, forcing prices down even further.

Source: L.A. Times - Business | 18 Sep 2008 | 7:00 am

Asian markets tumble to three-year low

Asian stock markets tumbled to three-year lows as credit markets seized up and fears grew that more financial companies will collapse.
Source: Telegraph Business | 18 Sep 2008 | 6:31 am

Lloyds TSB confirms £12.2bn rescue deal for HBOS

Lloyds TSB today unveiled the terms of its agreed £12.2 billion rescue of HBOS as it moved to stabilise the financial markets and help bail out Britain's banking system.
Source: Latest Business News from Times Online | 18 Sep 2008 | 6:23 am

Financial crisis deepens amid fear of continued stock dive

Wall St. tumbles again as global credit freezes up and more faltering firms seek saviors.

The global financial crisis deepened Wednesday as stock prices cratered and credit markets seized up, teetering financial institutions sought salvation in buyouts and government officials scrambled to find a way out of the mess.

Source: L.A. Times - Business | 18 Sep 2008 | 5:49 am

Currency: Dollar gains on US, Australia

The New Zealand dollar rose during another tumultuous day on financial markets globally but no one was too upbeat about it given the circumstances. United States dollar weakness was the dominant theme as the fragility of the US...
Source: New Zealand Herald - Business | 18 Sep 2008 | 5:36 am

Watchful Fed weighs up its options

As financial stress intensified, so did the likelihood that the Federal Reserve could be forced to fight back either with a dramatic increase in liquidity support and currency swap lines or an embarrassing U-turn on interest rates
Source: FT.com - US homepage | 18 Sep 2008 | 4:26 am

10 Things Your Private Investigator Won't Tell You (10 Things)

Today's PI trolls the Internet more than the urban jungle -- and possibly keeps tabs on you.

Source: SmartMoney.com | 18 Sep 2008 | 3:36 am

10 Things Your Private Investigator Won't Tell You (10 Things)

Today's PI trolls the Internet more than the urban jungle -- and possibly keeps tabs on you.

Source: SmartMoney.com | 18 Sep 2008 | 3:33 am

10 Things Your Private Investigator Won't Tell You (10 Things)

Today's PI trolls the Internet more than the urban jungle -- and possibly keeps tabs on you.

Source: SmartMoney.com | 18 Sep 2008 | 3:32 am

Latest updates: Financial Turmoil

16.21- HONG KONG: The blue-chip Hang Seng index has fallen more than 7 per cent today, falling 1350 points to 16287. The index last traded at that level in July 2006. 16.13-SHANGHAI: China's benchmark Shanghai Composite Index...
Source: New Zealand Herald - Business | 18 Sep 2008 | 3:25 am

NZ Shares: Market loses 3.5 pc in dramatic day

The New Zealand sharemarket finished the day down 3.5 per cent today as global markets tumbled with concern mounting about banking and financial firms in the United States. The NZX 50 index dropped 111 points to 3,158.92. The three...
Source: New Zealand Herald - Business | 18 Sep 2008 | 2:00 am

Why don't they just print more money?

An idiot's guide to the credit crisis. It is an age old question. As budding economists we all ask it of our parents some time around the age of 7 or 8. Why don't they just print some more money? We are quickly told why that doesn't...
Source: New Zealand Herald - Business | 18 Sep 2008 | 1:30 am

Nats and Labour trade blows on economic crisis

As markets continue to decline Labour and National are trading blows over which party would be better to guide New Zealand through the economic storm. Finance Minister Michael Cullen today welcomed the comments of former National...
Source: New Zealand Herald - Business | 18 Sep 2008 | 1:30 am

The media thrives on excitement, but dullness is the secret of investing

It is a measure of this extraordinary week that stories which would normally hold the front page barely make the news list. You would have needed sharp eyes to spot that the oil price fell to less than $90 a barrel on Tuesday. And you would have searched in vain for much news of a 20pc slump in Moscow's benchmark index on the same day.
Source: Telegraph Business | 18 Sep 2008 | 1:20 am

In Brief - Wednesday

Google (GOOG), the tech giant, will sell its first phone powered by its Android software for $199, according to published reports. Wireless...
Source: Investor's Business Daily: BUSINESS | 18 Sep 2008 | 12:42 am

Trends & Innovations - Wednesday

Companies reach out via Twitter
Source: Investor's Business Daily: BUSINESS | 18 Sep 2008 | 12:42 am

Business Briefs - Wednesday

SanDisk soars after snubbing offer. The maker of flash data storage surged 39% to 20.92 after it rejected a $5.85 bil takeover offer late Tue....
Source: Investor's Business Daily: BUSINESS | 18 Sep 2008 | 12:42 am

After The Close - Wednesday

SURMODICS (SRDX), a maker of coatings for medical devices, said drugmaker Merck (MRK) plans to end a collaboration deal established last year. It...
Source: Investor's Business Daily: BUSINESS | 18 Sep 2008 | 12:42 am

Generic-Drug Firm Making Hay With Knockoff Allergy Medications

Allergy drugs Claritin and Zyrtec don't need doctors' orders anymore.
Source: Investor's Business Daily: BUSINESS | 18 Sep 2008 | 12:42 am

Keep mortgage terms short, says bank

Following last week's half a percentage point cut to official interest rates, the ANZ bank is advising mortgage borrowers to keep their borrowing at relatively short terms. The bank expects the Official Cash Rate (OCR) to be down...
Source: New Zealand Herald - Business | 18 Sep 2008 | 12:25 am

Morgan Stanley and Wachovia in $44bn merger talks

By James Quinn
Source: Telegraph Business | 18 Sep 2008 | 12:20 am

Investors balk at £12bn HBOS rescue

Leading institutional shareholders in HBOS have threatened to block Lloyds TSB's £12.2bn rescue bid for the embattled lender. Their opposition comes despite Government support for the deal amid fears that HBOS risks collapse without a rescue.
Source: Telegraph Business | 18 Sep 2008 | 12:20 am

Fonterra: This is as bad as it gets

The Chinese milk powder scandal is as bad as it gets for a food company, an emotional Fonterra chief executive said yesterday. Andrew Ferrier's comment came after China's health minister said contaminated milk formula had killed...
Source: New Zealand Herald - Business | 18 Sep 2008 | 12:00 am

Marrying Your Financial Lives (Marriage)

When you get married, you don't just get your spouse's good looks and fancy car, but also his or her financial history.

Source: SmartMoney.com | 17 Sep 2008 | 11:29 pm

Love & Money: The Second Time Around (Now What?)

Second marriages can mean tricky financial issues. Here's how to keep them from coming between you and spouse No. 2.

Source: SmartMoney.com | 17 Sep 2008 | 11:28 pm

I do. (However ...) (Marriage)

Prenuptial agreements aren't just for zillionaires (or even just for men) anymore. Here's why you need one, what you should ask for and what the courts will uphold.

Source: SmartMoney.com | 17 Sep 2008 | 11:27 pm

They'll Never Know: Eight Hidden Ways to Cut Wedding Costs (Marriage)

We asked wedding planners for their best ideas on how to save on the big day. The guests won't suspect a thing.

Source: SmartMoney.com | 17 Sep 2008 | 11:26 pm

10 Things the Wedding Industry Won't Tell You (Marriage)

From caterer kickbacks to wedding-cake rip-offs, here's what your wedding planner just might "forget" to mention.

Source: SmartMoney.com | 17 Sep 2008 | 11:26 pm

The Six Financial Mistakes Couples Make (Marriage)

Do you and your sweetheart wrangle over money? Here are the most common problems -- and some solutions.

Source: SmartMoney.com | 17 Sep 2008 | 11:25 pm

Banks for sale

Until yesterday, many people still viewed the unprecedented disruption to the financial system as a series of remote events affecting overpaid bankers who worked for unfamiliar, mostly American, companies. Yesterday, the attempted rescue by Lloyds TSB of Halifax Bank of Scotland, Britain's biggest savings bank, brought the story firmly home to the British high street. There can no longer be any doubt that the financial crisis will affect us all, and is likely to unleash a destabilising recession.
Source: Latest Business News from Times Online | 17 Sep 2008 | 11:00 pm

Virgin Atlantic in the fray as bidding war for Gatwick begins

BAA, the owner of London's three leading airports, succumbed to regulatory pressure yesterday and put Gatwick up for sale.
Source: Latest Business News from Times Online | 17 Sep 2008 | 11:00 pm

US bailout bill puts focus on worst-case scenarios

The bailout bill facing US taxpayers from Washington's frantic efforts to prop up America's floundering financial institutions is growing ever larger as the drive to underpin a system in danger of meltdown becomes more desperate. While the firefighters of the US Federal Reserve and the US Treasury focus on stemming the financial conflagration on Wall Street, the mounting cost of forestalling disaster is intensifying anxiety for officials and markets.
Source: Latest Business News from Times Online | 17 Sep 2008 | 11:00 pm

Woolworths announces cutbacks after record loss

The new chief executive of Woolworths plans to close the company’s final-salary pension scheme, cut jobs and sell stores after the ailing high street retailer reported a record £100 million half-year loss yesterday.
Source: Latest Business News from Times Online | 17 Sep 2008 | 11:00 pm

Banks: it's easy to get burnt in times such as these

We are witnessing the biggest fire sale of financial companies since the Depression. Some buyers will make fortunes. Some may get badly burnt.
Source: Latest Business News from Times Online | 17 Sep 2008 | 11:00 pm

Bankers Speed Date

The urge to merge is spreading faster in the U.S. financial sector than a bad case of the stomach flu.

After the market's brutal 450-point drop Wednesday, several rumors shot through the financial headlines, sending some shares sharply higher. Morgan Stanley has reportedly reached out to Wachovia for a possible combination, and Washington Mutual has officially put itself on the auction block, with Citigroup and Wells Fargo emerging as potential suitors.

No one, it seems, is safe anymore.

Morgan Stanley and Goldman Sachs both defended their models as investment banks yesterday, when each released better-than-expected quarterly results. The market didn't listen, however, and shares of each of the last two independent Wall Street firms were pummeled in Wednesday's trading session.

As this financial crisis unfolds, it's beginning to look like any highly leveraged firm will not survive without a partnership with a deposit-banking institution. A Morgan Stanley-Wachovia merger would leave Goldman Sachs as the last man standing, which is not a place that any storied banker wants to be.

Such a combination is also difficult to swallow, however. Wachovia is saddled with worthless assets from its ill-timed acquisition of the mortgage giant Golden West. And Morgan Stanley is facing its own set of problems during this crisis, as lending between financial institutions has virtually frozen.

As for Washington Mutual, it has remained top of the list of "who's next to fall" all week. It is the nation's largest savings and loan, and concerns over its survival have prompted a sharp sell-off in its share price.

Goldman Sachs, which has reportedly been advising the troubled bank for months, has aggressively sought potential suitors in recent days. So far, Citigroup and Wells Fargo have expressed interest, according to the Wall Street Journal.

Investors welcomed the news of a potential savior for the firm. In after-hours trading, Washington Mutual shares rose nearly 10 percent.

Under normal circumstances, it would be weeks before we would see any kind of finalized merger offer between institutions of this size and reach. But as the markets have learned in recent days, this environment is anything but normal. If a $50 billion merger can come together over part of the weekend, as Bank of America's deal for Merrill did, anything is possible.


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Source: Portfolio.com: Top 5 | 17 Sep 2008 | 10:00 pm

HBOS reaches merger deal with Lloyds TSB: reports (AFP)

AFP - HBOS, Britain's biggest mortgage lender, has reached a deal to merge with its rival Lloyds TSB, media reports said Wednesday, after the lender's shares plummeted for a third day running.

Source: Yahoo! News: Business | 17 Sep 2008 | 9:02 pm

Schaeffer's Salome Watching ETFs for Market Direction

Source: Bloomberg - All Podcasts | 17 Sep 2008 | 8:54 pm

VIX Index of U.S. Stock Option Prices Advances 19.5% to 36.22

Source: Bloomberg - All Podcasts | 17 Sep 2008 | 8:50 pm

Kiwi dollar gains on US and Aussie

The New Zealand dollar gained on the United States and Australian currencies overnight, against the background of a generally weaker greenback. By 8am the kiwi was buying US66.35c, having peaked around US66.85c overnight from US65.99c...
Source: New Zealand Herald - Business | 17 Sep 2008 | 8:30 pm

Gossip' s Terrific Twos

The ratings are heating up for Gossip Girl, the teen drama about a gossip blog that follows the kids at a Manhattan prep school, just in time for it to add buzz to the new lineup the struggling CW network rolls out October 5.
 
With record-breaking audiences so far this season, the once troubled network now has a bona fide hit on its hands—and a solid shot at generating respectable ratings gains across the network.
 
"Gossip Girl has hit the opposite of a sophomore slump. It's hitting a sophomore rise," says Jason Maltby, president of national broadcast for MindShare, an ad-buying agency. "That's key, because it's now the flag of the network."
 
This past Monday, the show delivered a series high of 3.7 million viewers, topping the previous record for the season two premiere on Labor Day. And this week, thanks to a strong lead-in from Gossip Girl, the aging One Tree Hill—currently in its sixth season on the air—delivered its best performance in the CW's target demographic in almost two years.
 
Overall, the network won the night in women 18 to 34, adults 18 to 34, and women 18 to 49, and had the best Monday in its history.
 
90210, another high-profile gamble for the CW, delivered the network's best-ever Tuesday when it premiered on September 2. Despite viewer fall-off from the first episode, 90210 grew its target demographics and audience size between episodes two and three, which aired last night to 3.3 million viewers.
 
"If the CW's core strategy is to provide an alternative broadcast network for younger females—and its pitch is that it delivers to that underserved segment—it's gotta be pretty happy," says Maltby, who credits Gossip Girl with a positive "ripple effect" across the CW's programming slate.
 
The CW is no doubt hoping those ripples turn into waves by Sunday, October 5, when the network premieres its all-new Sunday night: four new shows across five hours, developed by Media Rights Capital, an entertainment finance company based in New York and Los Angeles.  
 
It's all a far cry from last year, when the CW, founded in 2006, was plagued with problems. There was the scuffle over the decision to get rid of Friday night's ratings smash SmackDown, part of an effort to streamline the CW's appeal to young women—a group far more likely to watch Serena and Blair duking it out on 5th Avenue than sweaty men doing the same on a wrestling mat.
 
More important, the network failed to develop a hit show, despite the huge promotional muscle thrown behind Gossip Girl, which performed anemically in its first season. The show averaged an audience of about 2 million, never mustering more than 2.6 million fans for a show—and even that was only for the series premiere.
 
Then, in an ill-advised gambit meant to gin up more viewers, the CW decided to stop running episodes of the show online. Predictably, instead of invigorating fans, it just pissed them off.
 
Now, the network appears to be on safer footing than at any point since its founding two years ago, using the building blocks of one successful show to help promote another. Teasers for Privileged, another of the network's new fall offerings, were woven into the 90210 premiere, and last summer CW entertainment president Dawn Ostroff said that the Sunday night shows would be heavily promoted throughout the rest of the week's lineup.
 
"At the very least what they had to do this season was reverse those huge slides that they took last year," says David Scardino, a TV programming analyst for R.P.A., an advertising agency in Santa Monica, California. Between the network's first and second seasons, ratings were down throughout the week and off by as much as 50% on Sunday nights, a "total disaster," says Scardino.
 
Now, although he approves of the network's Monday through Thursday night lineups, Scardino says he is disappointed that Fridays at 9 p.m. are just repeats of America's Next Top Model. And he believes that a successful Sunday is key to the CW's continued success.
 
The promotional campaign for the all-new Sunday night has already begun. Scardino likes the chances of the show slotted in at 8 p.m., Valentine best—it's especially female-friendly, and going up against Sunday night's testosterone-laden menu of football and Fox cartoon shows, could perform well.
 
"That seemed on paper like it had the best shot at hanging around," says Scardino. With a little help from Gossip Girl, its chances just got a lot better.Related Links
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Source: Portfolio.com: Top 5 | 17 Sep 2008 | 8:30 pm

Hello, Bhutan? It's capitalism calling

The tiny Asian kingdom of Bhutan has had cell phones for just a few years, and a choice of providers for only a few months. Now its people are experiencing what happens when a company competes for their business. Lisa Napoli reports.
Source: Marketplace | 17 Sep 2008 | 8:03 pm

NFL doesn't like how profits line up

National Football League Commissioner Roger Goodell is warning that the league won't be bringing in as much money as originally predicted. Terry Lefton at the Sports Business Journal got his hands on the commissioner's memo. He talks with Kai Ryssdal.
Source: Marketplace | 17 Sep 2008 | 8:03 pm

Slowdown raises product-safety worry

In China, three babies have died and more than 6,000 have suffered kidney damage from tainted infant formula. With Chinese factories feeling the pressure of the global economic slowdown, it could be a sign of things to come. Scott Tong reports.
Source: Marketplace | 17 Sep 2008 | 8:03 pm

More government won't solve this crisis

Commentator David Frum sees the point some are making about the credit crisis -- that what's needed to fix things is the strong hand of government. But he strongly disagrees.
Source: Marketplace | 17 Sep 2008 | 8:03 pm

Where does bailout money come from?

The government's been throwing cash around willy-nilly to bail out Bear Stearns, AIG and Fannie and Freddie. Where's all that money coming from? And how often can Bernanke and Paulson keep going back to that well? John Dimsdale reports.
Source: Marketplace | 17 Sep 2008 | 8:03 pm

Few signals given before sudden turns

In the year-and-a-half since Fed Chairman Ben Bernanke said the credit crisis would be contained, the markets have kept a mostly cautious stance. But a couple of weeks ago things changed -- and not for the better. Bob Moon reconstructs the course of events.
Source: Marketplace | 17 Sep 2008 | 8:03 pm

How'd we get in this mess? A look back

Kai Ryssdal takes us back to the point at which the financial markets' problems began -- five years ago when the Fed made it cheap to borrow money and Wall Street took advantage, devising complicated investment schemes that hid their high risk.
Source: Marketplace | 17 Sep 2008 | 8:03 pm

Wall St tumbles 4pc after AIG bailout

NEW YORK -Stocks plunged Wednesday by more than 400 points, the second steep drop this week, as investors remained worried about chaos in the US financial market even after the government forged an extraordinary $85 billion rescue...
Source: New Zealand Herald - Business | 17 Sep 2008 | 8:00 pm

Wall Street Under Siege

The market is writing the obituary for the investment bank, even if that obituary may be so premature that even Bloomberg has not released it by accident.

But the reality can be found on any Bloomberg terminal today: The stock prices of the two remaining investment-banking majors, Morgan Stanley and Goldman Sachs, are getting hammered.

Their stocks plummeted despite the fact that both firms reported solid earnings on Tuesday. Morgan Stanley is down 30 percent, while Goldman's shares are down 20 percent.

In an email to Morgan Stanley employees today, C.E.O. John Mack said "there is no rational basis for the movements in our stock or credit default spreads."

"What's happening out there?" he wrote, the Wall Street Journal’s Deal Journal blog reported. "It's very clear to me—we're in the midst of a market controlled by fear and rumors, and short sellers are driving our stock down."

The selling, however, is not simply fear and panic, sparked by those evil short sellers. Financing costs are rising, and that will make life for Wall Street, which is already difficult, even more so.

As Felix Salmon noted earlier, "there's very little trust in equities as a store of value any more—certainly not in leveraged companies, anyway."

The publicly traded investment bank is a relatively modern institution and it may be approaching its expiration data, as Megan Barnett has described.

Both Morgan Stanley and Goldman Sachs have made their cases on why each should remain independent. But the most compelling argument is this: There are very few attractive alternatives, if at all.

The obvious solution would be to merge with a big commercial bank. The New York Times' DealBook blog reports late today that Morgan Stanley has been considering a merger with Wachovia. Under its new chief executive, Robert Steel, Wachovia has been widely thought to be looking for partner. The Charlotte, North Carolina-based bank has been hard hit by the deep slump in the housing market. Nearly half its mortgage lending is in California and Florida, two states with some of the highest foreclosure rates in the nation.

But Wachovia does offer a sizable balance sheet and the list of other possible bank partners is not very long.

A foreign bank looking for an opportunity to gain a world-class investment banking business in one stroke would make the most sense. HSBC is a global giant but despite investing hundreds of millions of dollars, it is still an also-ran in investment banking. Another foreign giant, Royal Bank of Canada, the biggest bank in that country, reportedly took a look at Lehman Brothers. The Canadian market offers little room to grow, and Royal Bank of Canada has long been seen as having ambitions to expand southward.

Back home, some analysts have speculated that an institutional banking company like State Street or Bank of New York Mellon could make a good fit with either Morgan Stanley or Goldman Sachs.

In the past, some have hoped for a marriage of Morgan Stanley and J.P. Morgan Chase, reuniting the House of Morgan, but that is unlikely after its acquisition of Bear Stearns.

Still, as Antony Currie points out on Breakingviews.com: "Belonging to a larger institution is no guarantee of safety— especially if retail banks' own holdings of real estate assets cause more problems or if a worsening economy lands them with losses on other types of consumer debt."

David Viniar, the chief financial officer of Goldman Sachs, noted on the earnings conference call that for trading businesses like Goldman, a bank offers little help in the way of funding.

"I think the answer is there would be some small portion of our business that would probably be able to be funded by bank deposits, but most of the business that we're in could not be funded by banks," he said, according to a transcript on Seeking Alpha.

Goldman was the last of the big Wall Street partnerships to go public, in a 1999 initial public offering, but going to the past is not an option. The stock market has become a proxy for the confidence that traders and investors have in an investment firm; going private would shake whatever trust remains.

And a merger between Goldman and Morgan would be a recipe for disaster. Each firm thinks it is the elite of the Street and takes pride in its distinctive culture. The civil war that nearly tore up the inside of Morgan Stanley before Phil Purcell quit as chief executive would pale in comparison with the intra-firm strife a merger would unleash.

Related Links
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Source: Portfolio.com: Top 5 | 17 Sep 2008 | 8:00 pm

Historian James O'Donnell Describes the Ruin of Rome

Source: Bloomberg - All Podcasts | 17 Sep 2008 | 7:02 pm

Adam Bennett: Fed rescue to cost as much as New Zealand's GDP

Barely a couple of days after letting Lehman Brothers slide into oblivion, the US Federal Reserve is to tip the equivalent of New Zealand's annual economic output into insurer American International Group to ensure its survival. US...
Source: New Zealand Herald - Business | 17 Sep 2008 | 7:00 pm

Poole Says U.S. Was `Right' Not to Bailout Lehman

Source: Bloomberg - All Podcasts | 17 Sep 2008 | 6:48 pm

BAA puts Gatwick up for sale

The second largest airport in the UK is to be sold by BAA in response to pressure from the Competition Commission, which is preparing to call for the break-up of the UK airports group
Source: FT.com - US homepage | 17 Sep 2008 | 6:41 pm

Short Circuiting the Shorts

Worried that rising panic in financial markets is encouraging naked short sellers and increasing pressure on the remaining investment banks, the Securities and Exchange Commission moved to curb the practice of investors selling stock they don't possess.

The new regulations don't ban short selling, but do require that anyone engaged in the practice to settle their trades within three days. They also expand the ban to all stocks; previously, the S.E.C. had adopted other limits only on investment banks.

The commission also made clear that it is illegal for short sellers to mislead or lie to brokers about whether they have arranged to borrow the shares they use in their trades.

"These several actions today make it crystal clear that the S.E.C. has zero tolerance for abusive naked short selling," commission chairman Christopher Cox said. He described the targeted practices as "unlawful manipulation."

The commission said it imposed the three-day settlement rule because of reports that many short sellers — investors who sell borrowed shares, betting on a price drop before they must repurchase and return the securities — were dragging out settlement of their trades to as long as 10 business days.

That is believed to make it easier to short stocks in greater volume, increasing the pressure on stocks in companies who traders suspect to be in financial trouble. A falling share price can hurt companies' credit ratings by making it appear that it's cost of capital is rising.

In such cases, heavy short selling can become a self-fulfilling prophecy, even for financially sound companies.

The rules, which take effect at 12:01 a.m. Thursday, were welcomed by many.

"This wholesale naked short selling that has occurred has been atrocious," Jon C. Ogg wrote on the blog 24/7 Wall Street. "When you gamble in Las Vegas they make you put your bet on the table rather than yell out numbers to the dealer with no proof you can cover your wager.

"There are exceptions," he added, "but what has been going on lately has to stop."Related Links
Chris Cox: Put Up Your Dukes!
Handicapping the Next Nominees at the S.E.C.
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Source: Portfolio.com: Top 5 | 17 Sep 2008 | 5:30 pm

Sack Sees Room for Fed to Cut Rates as Inflation Eases

Source: Bloomberg - All Podcasts | 17 Sep 2008 | 4:37 pm

Welcome to the Impasse

Bear Stearns, Fannie Mae, Freddie Mac, A.I.G., and…who's next? Washington Mutual? There will most certainly be another government bailout of a private sector failure, but no one seems to know how or when this ugly chapter in U.S. finance will end.

"The question is, and it's just a question, is, 'Are we at the point where the private market has made so many bad decisions and is so depressed that it can't get out from under?'" Barney Frank, chairman of the House Financial Services committee, asked this week.

Frank's committee plans hearings next week to attempt to answer that question, but judging by last night's $85 billion federal rescue of A.I.G. and today's turmoil surrounding Morgan Stanley and Washington Mutual, we already know the answer. It's a resounding yes.

In recent days, policy wonks and legislators have floated the idea of resurrecting the Resolution Trust Corporation, the agency formed by the government to unwind hundreds of insolvent savings and loans in the early 1990s. Funded by Congress, the unit helped to liquidate the assets of more than 700 thrifts over a six-year period. Once the job was done, the agency was absorbed by the Federal Deposit Insurance Corporation.

It's a smart answer to today's crisis that's hobbled by one major obstacle. With seven weeks until the election, we simply can't get another R.T.C. when we need it.

Washington's failure to regulate these overleveraged institutions is now trumped by its failure to provide a fix due to poor timing on the calendar.

Until now, the Federal Reserve has fulfilled the role of rescuer by exercising an emergency power that it was granted after the Great Depression. In certain circumstances, it can loan money to any company or individual that can't otherwise borrow funds.

But just how long these extreme circumstances will continue to cripple large financial institutions is anyone's guess, and the Fed was never meant to be the only answer to a long-term, systemic problem such as the one the mortgage crisis has created.

There is one group of huge losers in all this, no matter how you slice it: taxpayers. Now, it's time to weigh whether it would pose more of a burden to fund a new agency to help solve the problems or to continue using taxpayer money through the Federal Reserve.

Moreover, with each massive government bailout, more and more struggling homeowners wonder where their bailout money is. It's hard for average Americans to understand how the bankruptcy of A.I.G. might have impacted them, but they understand perfectly well how they can no longer afford their monthly mortgage payments.

Both presidential candidates are calling for more regulation of the financial markets that got us into this mess.  It's hopeful that the next president sees that as a priority, but it's unfortunate that the fix is so far out on the horizon.

By the time a new administration and a new Congress hammers out a regulatory framework for this crisis, Lehman Brothers will be long forgotten.

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Source: Portfolio.com: Top 5 | 17 Sep 2008 | 3:30 pm

Fed Takes Control of AIG With $85 Billion Bailout

Source: Bloomberg - All Podcasts | 17 Sep 2008 | 3:10 pm

Goldman Raised to `Outperform' at Wachovia on `Pricing Power'

Source: Bloomberg - All Podcasts | 17 Sep 2008 | 1:35 pm

The Fund to Save the World

A new American financial conglomerate has emerged virtually overnight, and if it should run into trouble, Washington won't be able to help.

Because it is Washington.

Adding to its portfolio of mortgage-finance companies, the government has taken control of American International Group, the world's largest insurance company by assets.

The Federal Reserve is lending $85 billion in return for a 79.9 percent stake in the company. The two-year loan will carry an interest rate of Libor plus 8.5 percentage points, a punitive rate. (Libor, the London Interbank Offered Rate, is a common short-term lending benchmark.)

It is a revolutionary, unprecedented move by the federal government, and it starkly illustrates the depth and breadth of a credit crisis that has shaken the global financial system to its core. It is a move that will certainly provoke much political debate, especially in an election year.

For one, the U.S. government does not regulate insurance companies. It is left to the states, creating a big gaping hole in the federal financial regulatory framework, a hole that the industry has fought to keep for years. Indeed, it is not immediately clear that the Fed has access to the collateral backing the loan to the parent company, as the states would have first claim to the assets of the insurance subsidiaries they regulate.

The Fed, as it did in the case of Bear Stearns, justified its intervention by a clause in its charter that allows it to take such actions in "unusual and exigent circumstances."

And the A.I.G. takeover is very different than the rescues of Bear Stearns, Fannie Mae, and Freddie Mac. Bear was a loan, and Fannie and Freddie were arguably quasi-government creatures anyway. But in A.I.G., taxpayers are buying a stake in a company with a $1 trillion balance sheet, a global presence, and all sorts of unknown risks.

We are in the era of the Paulson Doctrine, says Roger Ehrenberg on his Information Arbitrage blog.

"In the short run, the Paulson Doctrine helps the markets. It creates the liquidity-driven optionality only available through the U.S. Government's philanthropy, protecting against wholesale liquidations that could further depress asset prices and start a daisy chain of events leading to a radical marking down of assets globally."

Is this a good thing? For the short term, yes, he says, if only because the U.S. is the debtor to the world and needs to persuade China and Japan and others to keep buying our dollar-denominated debt.

For while the A.I.G. intervention will be criticized as a bailout for the rich, it may be primarily a move to calm the rich and powerful overseas. And the reaction from foreign markets and investors has been generally positive today.

A collapse of the insurance company could have created financial instability throughout the world and would have driven foreign investors away from the U.S., deepening the crisis here.

Nearly every big bank in the world has some degree of exposure to A.I.G. In its sale of credit default swaps, the insurer is a counterparty to countless banks, hedge funds, and other financial institutions.

An A.I.G. bankruptcy could have cost the financial industry $180 billion, estimated RBC Capital Markets, Bloomberg News reported. The company provided insurance on more than $441 billion of fixed-income investments held by the world's biggest institutions, including $57.8 billion in securities tied to subprime mortgages.

Indeed, the Fed said in its statement about the intervention that it determined that "in current circumstances, a disorderly failure of A.I.G. could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth, and materially weaker economic performance."

A.I.G. said, "We believe the loan, which is backed by profitable, well-capitalized operating subsidiaries with substantial value, will protect all A.I.G. policyholders, address rating-agency concerns and give A.I.G. the time necessary to conduct asset sales on an orderly basis."

A.I.G.'s chief executive, Robert Willumstad, the former Citigroup executive who only recently replaced Martin Sullivan, will himself be ousted and replaced by Edward Liddy, a former C.E.O. of Allstate.

This is a short-term intervention. The credit crisis is strangling the economy now, and action is needed. Two years from now, the housing market may start showing signs of life, and taxpayers could profit from the government's equity stake.

Still, it is a gamble. Taxpayers can only hope that Washington will be better as a financial manager than it has been as a watchdog.

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Welcome to the Impasse
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Source: Portfolio.com: Top 5 | 17 Sep 2008 | 12:00 pm