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MUFG to buy 10-20% of Morgan StanleyMitsubishi UFJ said on Monday it has agreed to take a stake of between 10 and 20 per cent in Morgan Stanley, in a deal potentially worth $9bn, becoming the latest Japanese bank to benefit from the turmoil in western financial markets.Source: FT.com - US homepage | 22 Sep 2008 | 1:46 pm Stocks open lower on bailout uncertaintyNEW YORK (Reuters) - Stocks opened down on Monday, led lower by bank shares on uncertainty about the details of the proposed $700 billion financial sector bailout.Source: Reuters: Business News | 22 Sep 2008 | 1:40 pm Stocks open lower on bailout uncertainty (Reuters)
Source: Yahoo! News: Business | 22 Sep 2008 | 1:40 pm Darling to pledge action on economyThe chancellor promises action on weaknesses in the financial system in his speech to the Labour Party conference.Source: BBC News | Business | World Edition | 22 Sep 2008 | 1:39 pm Legg Mason denies it plans to go privateBOSTON (Reuters) - Asset manager Legg Mason Inc said on Monday it was not looking to go private, denying a report in The New York Post.Source: Reuters: Business News | 22 Sep 2008 | 1:38 pm Morgan Stanley in 20% stake saleJapanese banking giant Mitsubishi UFJ Financial Group says it will buy a stake in the troubled Wall Street investment group Morgan Stanley.Source: BBC News | Business | World Edition | 22 Sep 2008 | 1:32 pm Financial crisis: Alistair Darling admits Britain will fall into dangerous debtAlistair Darling broke a major taboo a few weeks ago by acknowledging the full scale of the economic crisis, which is as threatening as any for 60 years.Source: Telegraph Business | 22 Sep 2008 | 1:32 pm Microsoft and HP OK big buybacksMicrosoft on Monday announced yet another plan to buy back $40 billion worth of shares.Source: Business and financial news - CNNMoney.com | 22 Sep 2008 | 1:31 pm Day Trader Alert: Ciena (CIEN)Ciena Corporation (NASDAQ: CIEN) is seeing a positive direction in its shares this morning after it has been cored to the bone. Despite its sector woes in telecom equipment and fiber optics, Barron’s called the stock a bargain this weekend on the convergence issues which Cisco and others have been touting for years. This appears to be a value call with shares trading at under 10-times earnings, but keep in mind that analysts are looking for 2009 earnings p[er share to be less than that of 2008. Shares are nearly 80% off of 52-week highs with a 52-week trading range of $9.52 to $49.55. Shares are up almost 9% at $12.25 right before the open. Jon C. Ogg Source: 24/7 Wall St. | 22 Sep 2008 | 1:28 pm Fortune's 100 fastest-growing companiesSource: Business and financial news - CNNMoney.com | 22 Sep 2008 | 1:27 pm Goldman, Morgan Stanley to become regulated banksMitsubishi UFJ, Japan's largest bank, said it planned to take a 10%-20% stake in Morgan Stanley, after the Fed gave the green light to Goldman Sachs and Morgan Stanley to become regulated banksSource: FT.com - US homepage | 22 Sep 2008 | 1:23 pm Here comes $500 crudeMatt Simmons is as perplexed as anyone that it has fallen to him to take on OPEC, Exxon, the Saudis, and all the other misguided defenders of conventional wisdom in the oil patch. Why should one investment banker with a penchant for research be required to point out what he regards as the obvious - that from here on out, oil supplies can't meet demand, and if we don't act soon to solve this crisis, World War III could be looming?Source: Business and financial news - CNNMoney.com | 22 Sep 2008 | 1:22 pm H-P Jumps In On Buybacks (HPQ)
Jon C. Ogg Source: 24/7 Wall St. | 22 Sep 2008 | 1:20 pm Metals Stocks: Gold rises as massive rescue plan pressures dollarGold futures rise more than 2% Monday, as a $700-billion government plan to rescue the financial sector pressures the U.S. dollar lower, increasing gold’s appeal as an alternative investment.Source: MarketWatch.com - Top Stories | 22 Sep 2008 | 1:19 pm Microsoft ups dividend, boosts share buybackNEW YORK (Reuters) - Microsoft Corp plans to buyback up to $40 billion of its own stock, and raised its quarterly dividend by 18 percent, the software maker said on Monday.Source: Reuters: Business News | 22 Sep 2008 | 1:16 pm Futures Movers: Crude futures rise on hopes for multibillion-dollar U.S. bailoutCrude-oil futures gain more than 1%, boosted by hopes that the U.S. government’s proposed $700-billion bailout plan will stabilize the struggling financial sector and bolster economic growth.Source: MarketWatch.com - Top Stories | 22 Sep 2008 | 1:15 pm MUFG says to buy 10-20 percent stake in Morgan StanleyTOKYO (Reuters) - Mitsubishi UFJ Financial Group, Japan's largest bank, said on Monday it planned to take a stake of up to one-fifth in U.S. investment bank Morgan Stanley as part of a strategic alliance.Source: Reuters: Business News | 22 Sep 2008 | 1:14 pm Bailout or Not, Credit Will Be Crunched (Today From Barron's)Special Report: Don't exhale yet; the credit crunch has only just begun.Source: SmartMoney.com | 22 Sep 2008 | 1:12 pm Financial crisis: Alistair Darling tells Labour conference Government borrowing will soarAlistair Darling, the Chancellor, has announced he is to sharply increase Government borrowing amid growing fears over the state of the public finances.Source: Telegraph Business | 22 Sep 2008 | 1:12 pm Financial crisis: Alistair Darling tells Labour conference Government borrowing will soarAlistair Darling, the Chancellor, has announced he is to sharply increase Government borrowing amid growing fears over the state of the public finances.Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 Sep 2008 | 1:12 pm Nomura to buy Lehman units: sourcesRead full story for latest details.Source: Business and financial news - CNNMoney.com | 22 Sep 2008 | 1:11 pm Indications: Microsoft, Morgan Stanley help stock futures off lowsU.S. stock futures turned mixed Monday as Microsoft said it would spend up to $40 billion buying back its own stock and reports emerged that Morgan Stanley was going to sell a stake of itself to an overseas lender, helping to combat the lack of detail on a government plan to buy up troubled assets.Source: MarketWatch.com - Top Stories | 22 Sep 2008 | 1:09 pm Nike on Buybacks: Just Do It (NKE)
Nike shares are up over 2% pre-market at $65.20. Its 52-week trading range is $51.50 to $70.60. Jon C. Ogg Source: 24/7 Wall St. | 22 Sep 2008 | 1:08 pm Morgan Stanley to raise $9bn in deal with Mitsubishi UFJ$Mitsubishi UFJ, Japan’s largest megabank, is poised to pay least $9 billion ($£4.8 billion) for a stake of up to 20 per cent in Morgan Stanley, the troubled Wall Street lender.Source: Latest Business News from Times Online | 22 Sep 2008 | 1:07 pm First Industrial and the California State Teachers' Retirement System Extend Joint Venture AgreementsVenture Terms Extended Through 2018 CHICAGO, Sept. 22 /PRNewswire-FirstCall/ -- First Industrial Realty Trust, Inc. (NYSE: FR), a leading provider of industrial real...Source: Infocious RSS raw feed - channel BNewsBusiness | 22 Sep 2008 | 1:07 pm G7 pledges to cooperate to end market turmoilThe G7 group of finance ministers and central bank governors of the wealthiest industrial countries hold a teleconference on Monday morning and agree to take "whatever actions may be necessary" to ensure the stability of the international financial system.Source: MarketWatch.com - Top Stories | 22 Sep 2008 | 1:07 pm Oil rallies as rescue plan developsOil prices rallied Monday as investors were encouraged by the $700 billion Wall Street bailout plan.Source: Business and financial news - CNNMoney.com | 22 Sep 2008 | 1:05 pm Investment banks convert as bailout debate begins (Reuters)
Source: Yahoo! News: Business | 22 Sep 2008 | 1:03 pm Investment banks convert as bailout debate beginsNEW YORK (Reuters) - Goldman Sachs and Morgan Stanley sought shelter with the Federal Reserve to survive a financial storm that destroyed their rivals as Wall Street braced for a week of political wrangling over a proposed $700 billion bailout for troubled banks.Source: Reuters: Business News | 22 Sep 2008 | 1:02 pm MUFG says to buy 10-20 percent stake in Morgan Stanley (Reuters)
Source: Yahoo! News: Business | 22 Sep 2008 | 1:01 pm Earnings Watch: Updates, advisories and surprisesA roundup of the latest corporate earnings reports and what companies are saying about future quarters.Source: MarketWatch.com - Top Stories | 22 Sep 2008 | 1:01 pm CarMax 2Q earnings plunge on weak vehicle sales (AP)AP - Auto retailer CarMax Inc. said Monday its second-quarter earnings plunged 78 percent as a weak economy and high gasoline prices eroded its sales.Source: Yahoo! News: Business | 22 Sep 2008 | 1:00 pm NewsWatch: Microsoft, Morgan Stanley help stock futures off lowsU.S. stock futures turned mixed Monday as Microsoft said it would spend up to $40 billion buying back its own stock and reports emerged that Morgan Stanley was going to sell a stake of itself to an overseas lender, helping to combat the lack of detail on a government plan to buy up troubled assets.Source: MarketWatch.com - Top Stories | 22 Sep 2008 | 1:00 pm Beacon Equity Issues Technical Trade Alerts on Market Movers: UNCO, GM, LVLT, ETEL, FNSR, MRVCDALLAS, Sept. 22 /PRNewswire/ -- BeaconEquity.com announces the availability of Trade Alerts on stocks making news today. Investors can view all of the daily...Source: Infocious RSS raw feed - channel BNewsBusiness | 22 Sep 2008 | 1:00 pm Dorel to present at CIBC investor conference in MontrealEXCHANGES TSX: DII.B, DII.A MONTREAL, Sept. 22 /PRNewswire-FirstCall/ - Dorel Industries Inc. (TSX: DII.A, DII.B) will participate in the CIBC 7th...Source: Infocious RSS raw feed - channel BNewsBusiness | 22 Sep 2008 | 1:00 pm American Creditors Outraged that Argentine President Cristina Kirchner's Defiance Hurts New York EconomyCristina's Contempt Causes New York to Lose Tens of Millions in Tax Revenue NEW YORK, Sept. 22 /PRNewswire-USNewswire/ -- Today, American Task Force ArgentinaSource: Infocious RSS raw feed - channel BNewsBusiness | 22 Sep 2008 | 1:00 pm GVSU Administrator Named Vice President of Development for The Imagine FundEAST LANSING, Mich., Sept. 22 /PRNewswire/ -- Diane Purgiel, a former Director of Gift Planning for Grand Valley State University in Allendale, has been named Vice...Source: Infocious RSS raw feed - channel BNewsBusiness | 22 Sep 2008 | 1:00 pm Dreier LLP Announces Class Action Lawsuit Against Hansen Natural Corp. (HANS)NEW YORK, Sept. 22 /PRNewswire/ -- Dreier LLP ( href="http://www.dreierllp.com">www.dreierllp.com ) announces that a class action lawsuit was commenced in the U.S....Source: Infocious RSS raw feed - channel BNewsBusiness | 22 Sep 2008 | 1:00 pm Fannie Mae RedemptionWASHINGTON, Sept. 22 /PRNewswire-FirstCall/ -- Fannie Mae (NYSE: FNM) will redeem the principal amounts indicated for the following securities issues on the redemption...Source: Infocious RSS raw feed - channel BNewsBusiness | 22 Sep 2008 | 1:00 pm Elite IR Launches Investor Relations Firm for Asian Companies Listed in U.S.HONG KONG, Sept. 22 /Xinhua-PRNewswire/ -- Ms. Nancy Chen, former partner of CCG Elite, announces the official launch of Elite Investor Relations, "Elite IR"....Source: Infocious RSS raw feed - channel BNewsBusiness | 22 Sep 2008 | 1:00 pm Life-Time Poly-Millwork Acquires Custom Decorative Mouldings Polyurethane Division, Forming a New Leader in Polyurethane Millwork Building ProductsThe combined company provides one of the most diverse and feature-rich lines of polyurethane millwork for both exterior and interior construction, while maintaining the high levels of...Source: Infocious RSS raw feed - channel BNewsBusiness | 22 Sep 2008 | 1:00 pm ComEd's George Williams Elected to Underwriters Laboratories' Board of TrusteesNORTHBROOK, Ill., Sept. 22 /PRNewswire/ -- Underwriters Laboratories (UL) today announced that George Williams has been elected to UL's board of trustees.Source: Infocious RSS raw feed - channel BNewsBusiness | 22 Sep 2008 | 1:00 pm McAfee to acquire Secure ComputingMcAfee Inc. moves to beef up its computer-security business, unveiling a plan to buy Secure Computing Corp.Source: MarketWatch.com - Top Stories | 22 Sep 2008 | 12:58 pm Before the Bell: Goldman Sachs, Morgan Stanley, Microsoft in the spotlightU.S. stock market futures came off lows Monday after Microsoft announced a $40 billion share buyback and Morgan Stanley reportedly agreed to sell a minority stake to Mitsubishi UFJ.Source: MarketWatch.com - Top Stories | 22 Sep 2008 | 12:55 pm Microsoft announces $40bn buy-backShares in Morgan Stanley rose in pre-market trading as Mitsubishi UFG, Japan's largest bank, said it planned to buy a stake of up to 20 per cent. The move follows news that Morgan Stanley and Goldman Sachs are to abandon their investment bank model and become traditional bank holding companiesSource: FT.com - US homepage | 22 Sep 2008 | 12:52 pm G7 nations welcome U.S. bank bailoutPARIS (Reuters) - Group of Seven nations welcomed the $700 billion U.S. markets bailout plan on Monday but there was no sign that other governments saw any need to follow Washington in setting up rescue packages of their own.Source: Reuters: Business News | 22 Sep 2008 | 12:48 pm Microsoft's $40 Billion Stock Buyback (MSFT)
The company has announced it has authorized debt financings of up to $6 Billion and has established a commercial paper program under that of $2 Billion. The company has also boosted its dividend by 18% up to $0.13 per quarter. Shares were up on the AAA rating from S&P, which has effectively been shared now by Moody's as part of the plan, but shares are now up 5% at $26.40 in pre--market trading. Its 52-week trading range is $23.50 to $37.50.
Jon C. Ogg Source: 24/7 Wall St. | 22 Sep 2008 | 12:47 pm Nomura up on talk of Lehman buyShares in Japanese bank Nomura gain 10% as speculation grows that it is buying the Asian arm of Lehman Brothers.Source: BBC News | Business | World Edition | 22 Sep 2008 | 12:40 pm Traders Bristle at Changes AfootStocks headed toward a lower open after Goldman and Morgan's planned change of status.Source: SmartMoney.com | 22 Sep 2008 | 12:34 pm Nomura grabs Lehman's Asia businessTOKYO/HONG KONG (Reuters) - Japan's Nomura Holdings has reached a deal to buy the Asian operations of Lehman Brothers, a source said on Monday, outbidding other banks seeking to scoop up Lehman's Asia group on the cheap.Source: Reuters: Business News | 22 Sep 2008 | 12:33 pm New iPhone sales to hit 5 million - analystSource: Business and financial news - CNNMoney.com | 22 Sep 2008 | 12:32 pm London shares mark time as investors await details of US bailoutLondon shares were flat in late-morning trading, as investors awaited details of a massive US bailout for financial companies.Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 Sep 2008 | 12:30 pm London shares mark time as investors await details of US bailoutLondon shares were flat in late-morning trading, as investors awaited details of a massive US bailout for financial companies.Source: Telegraph Business | 22 Sep 2008 | 12:30 pm Alitalia given four days to secure rescue planItaly's civil aviation authority has given warning that Alitalia's licence would be suspended and its planes grounded "within three or four days" unless a rescue deal was reached.Source: Latest Business News from Times Online | 22 Sep 2008 | 12:23 pm Microsoft Scores AAA Rating From S&P (MSFT)
This might not have been anything more than noise just a few years ago. But in a world where stable cash flows and stable finances are everything, the software giant may have just won a score. S&P Calls its portfolio vertically integrated and diverse with numerous leadership positions and a minimal financial risk over many geographies. It also cited strong barriers to entry despite technology having many other risks. S&P further noted, "...Microsoft will maintain the technical, managerial, and financial wherewithal to adapt to industry transitions as successfully as it has in the past..." As far as addressing mergers, S&P believes that Microsoft will have very few large acquisition possibilities from a regulatory stance because of its dominance in so many areas.
Jon C. Ogg Source: 24/7 Wall St. | 22 Sep 2008 | 12:20 pm Nomura to buy Lehman's European assetsNomura, the Japanese securities group, has beaten Barclays to be chosen as the preferred bidder for Lehman Brothers' European equities and mergers advisory business, potentially saving at least 700 jobs.Source: Latest Business News from Times Online | 22 Sep 2008 | 12:19 pm Nomura Grabs Lehman's Asia BusinessJapans Nomura Holdings has reached a deal to buy the Asian operations of Lehman Brothers, outbidding other banks seeking to scoop up the Asia group.Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 Sep 2008 | 12:18 pm Sizing up the economic threatHelping Main Street or sticking it to Main Street?Source: Business and financial news - CNNMoney.com | 22 Sep 2008 | 12:16 pm Darling vows tougher British bank regulationsBritain’s finance minister pledges Monday to do 'whatever it takes' to stabilize the nation’s troubled financial sector, promising tougher regulations are on the way.Source: MarketWatch.com - Top Stories | 22 Sep 2008 | 12:09 pm Lowe's (LOW) Set To Curb New Store Plans
According to The Wall Street Journal Citigroup analyst Deborah Weinswig expects Lowe's to open 75 new stores next year for 4.5% growth in retail-square footage, down from 120 stores opening this year to generate about 8% growth. Lowe's had previously said it expected to open 135 to 145 new stores each year. Home Depot (HD) has been more drastic in cutting its store growth but that's been at least partly motivated by the company's focus on improving its existing operations before it expands. But investors wonder: in the long run, the success of any new stores Lowe's and Home Depot opens will have nothing to do with where the economy is in 6 or 12 months, and might these well-capitalized companies do well to take advantage of tough conditions for competitors and desperate landlords to open stores at bargain prices, and then ride out the tough times? A new study showing that companies that cut research and development expenditures during tough times tend to provide significantly lower long-term returns to their shareholders. Wall St. wonders if there's a similar effect for companies that curb store openings. Zac Bissonnette Source: 24/7 Wall St. | 22 Sep 2008 | 12:05 pm Goldman, Morgan to become holding companiesIn yet another extraordinary development for Wall Street, the Federal Reserve says late Sunday night that venerable investment banks Goldman Sachs and Morgan Stanley will become bank holding companies, subjecting themselves to stricter federal oversight.Source: MarketWatch.com - Top Stories | 22 Sep 2008 | 12:05 pm We're All Banks NowThe investment bank, which created unprecedented wealth in the last two decades and helped make the United States the world's financial capital, died at home in New York on Sunday night from injuries sustained in the credit crunch. It was 75 years old. Morgan Stanley, meanwhile, has also reached a deal with Mitsubishi UFJ Financial Group that will allow the bank, Japan's biggest, to buy as much as 20 percent of the firm. That, and the move to bank-holding status, certainly renders the recent merger talks with Wachovia Bank moot. As part of its transition, its Utah industrial bank will be converted into a national bank. Rumor Sourcing of the Day Seeds of Lehman's Destruction The End of Lehman Source: Portfolio.com: Top 5 | 22 Sep 2008 | 12:00 pm EU renews India WTO drinks caseThe European Union renews a World Trade Organization complaint about India's import tariffs on wine and spirits.Source: BBC News | Business | World Edition | 22 Sep 2008 | 11:55 am MBIA says can fund potential termination paymentsNEW YORK (Reuters) - Bond insurer MBIA said on Monday it would have enough resources to fund potential termination payments related to investment contracts if rating agencies downgraded the notes of its subsidiary MBIA Insurance Corp.Source: Reuters: Business News | 22 Sep 2008 | 11:52 am Testing your iPhone coolnessIf you're still racking your brain trying to think of pre-meeting small talk - about the weather, say, or "The Game" - help has arrived.Source: Business and financial news - CNNMoney.com | 22 Sep 2008 | 11:52 am Banks must raise capital now on recent rally: Friedman(Reuters) - Banks and thrifts must raise capital now to take advantage of the recent rally in share prices, said analyst Paul Miller, who believes that the Bush administration's $700 billion bailout plan for Wall Street will not benefit banks' capital levels as much as expected.Source: Reuters: Business News | 22 Sep 2008 | 11:45 am Financials remain under pressure in LondonLondon markets were little changed as the financial sector continued to turn up surprises for wary investors who, after Friday's euphoric rally, returned on Monday to sell stocks with exposure to banks...Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 Sep 2008 | 11:38 am How to sell in a lousy economyDespite a spate of negative economic indicators, these top salespeople haven't missed a step.Source: Business and financial news - CNNMoney.com | 22 Sep 2008 | 11:36 am Banks Lowering Consumers' Credit-Card Limits (Deal of the Day)Market chaos has many banks reducing credit lines on consumers' credit cards.Source: SmartMoney.com | 22 Sep 2008 | 11:32 am Top Pre-Market Upgrades & Downgrades (AB, ABFS, CNY, DKX, BEN, KMT, ODFL, OTTR, PZN, RJF, JOE, TROW, YRCW)These are not all of the research calls affecting shares of stock, but these are some we have our eyes on this Monday:
Jon C. Ogg Source: 24/7 Wall St. | 22 Sep 2008 | 11:27 am US banks make shock status switchThe last two major US investment banks change their status, in a bid to survive the ongoing upheaval in the financial sector.Source: BBC News | Business | World Edition | 22 Sep 2008 | 11:04 am Nomura to buy Lehman's Asia businessLehman Brothers Asian business will be snapped up by Japanese bank Nomura, it emerged, as London-based staff awaited news of a bid for parts of the European operations.Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 Sep 2008 | 11:01 am Nomura to buy Lehman's Asia businessLehman Brothers’ Asian business will be snapped up by Japanese bank Nomura, it emerged, as London-based staff awaited news of a bid for parts of the European operations.Source: Telegraph Business | 22 Sep 2008 | 11:01 am More XL rescue flights this weekSome 38,000 remaining tourists stranded by the collapse of holiday company XL are to be flown home this week.Source: BBC News | Business | World Edition | 22 Sep 2008 | 10:57 am USA Per Capita Bailout CostsThe $700 billion financial system bailout has so far acted to stabilize the financial markets. That part is hard to debate. The long term effects, the path, and the implications are of course up for debate. The questions impacting many discussions this weekend were what the real costs would be and whether or not these institutions should be allowed to fail. So one issue we wanted to consider, was what exactly does this translate to on a per individual in the U.S. In 2006, there were over 133.9 million tax returns for individuals and the total number of tax returns including corporations, employment taxes, and more came to over 168.8 million. We decided to use the larger number of 168.8 million as a representation for the entire tax system rather than just individuals since the larger number of roughly $2.5 Trillion collected was only about half of the total collections from individuals. After all, we are all in the same soup on bailouts here. $700 Billion translates to roughly $4,147.00 per filer. If you wanted to use just the individual tax filings, you would come up with over $5,200.00 cost per individual income tax filing. That is the price per filer of saving Fannie Mae, Freddie Mac, AIG, Bear Stearns, Lehman, Countrywide, and other failed financial institutions via assisted mergers and other bailouts. We haven't even gotten to the other failures which are waiting in the wings. Dare we add in the $600 per individual or $1,200.00 per couple tax rebate stimulus checks that went out this year? We have also discussed that the entire package could even reach $1 trillion and even the notion of $2 trillion. These numbers are starting to look astronomical on a per capita basis. Before long, it might even add up to real money. Jon C. Ogg Source: 24/7 Wall St. | 22 Sep 2008 | 10:54 am Yell suspends dividend to clear £3.7bn debtYell Group, the heavily indebted publisher of Yellow Pages, is suspending dividends until its £3.7 billion debt mountain has been reduced to more manageable levels.Source: Latest Business News from Times Online | 22 Sep 2008 | 10:53 am Europe buoyed by banks and oil groupsEuropean markets were mixed on Monday as investors weighed the impact on the financial sector of the news that the surviving two US investment banks had become regulated banks.The Federal Reserve said...Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 Sep 2008 | 10:48 am Costs take shine off gold profitRussia's second largest gold miner sees first half profits fall as higher costs offset the strong price of the precious metal.Source: BBC News | Business | World Edition | 22 Sep 2008 | 10:39 am AIG's ex-CEO refuses $22 million severance payout: report(Reuters) - American International Group Inc's former Chief Executive Robert Willumstad has rejected a $22 million severance payment, the Wall Street Journal reported, citing a person familiar with the decision.Source: Reuters: Business News | 22 Sep 2008 | 10:34 am Wolseley cuts jobs after profits fall by 77%Wolseley, the construction materials group, today attempted to reassure investors that it is still trading "well within" its borrowing covenants after annual pre-tax profit plunged by 77.1 per cent.Source: Latest Business News from Times Online | 22 Sep 2008 | 10:29 am China stock market bounces backChina's main share index soars by almost 8% after government moves to revive investor confidence.Source: BBC News | Business | World Edition | 22 Sep 2008 | 10:25 am AIG's ex-CEO refuses $22 million severance payout: report (Reuters)
Source: Yahoo! News: Business | 22 Sep 2008 | 10:23 am GM (GM) Dives Into Its Line Of Credit--Running On Empty
GM is pursuing the "get it while the gettin's good" approach to capital management. With the credit markets tight and GM's fiscal health in rapid deterioration, the company wanted to take out the money now rather than wait a few months and find out it's no longer available. The Wall Street Journal reports that "GM's cash position has been dwindling in recent quarters. The auto maker says it needs between $11 billion and $14 billion on hand to fund day-to-day operations. As of the end of June, GM had $21 billion available, excluding $5 billion in untapped credit lines. Given the about $1.2 billion-a-month rate at which GM has been burning through cash this year, Wall Street has begun to worry about its liquidity." That brings us to GM's latest plan for raising capital: tap the taxpayer. General Motors, Ford (F) and Chrysler have been in Washington lobbying for $50 billion in low-interest loans to help the sinking auto industry stave off its demise -- of course they say the money is needed to make Detroit a leader in fuel-efficient cars, but I'll believe that when I see it. It goes without saying that shares of General Motors are a risky long-term bet -- any company that is diving into its credit lines while it burns $1.2 billion a month is in trouble. But will GM get its bailout? Probably, because lawmakers would look woefully hypocritical if they hand out billions to save struggling investment banks and then claim to be free market-proponents when it comes to the auto industry. But if GM needs a government handout to survive, the shares probably aren't worth buying: kind of like lending money to people in line at the welfare office. Source: 24/7 Wall St. | 22 Sep 2008 | 10:15 am Business leaders attack government's failure to address economic problemsThe government has failed to tackle Britain's economic problems, a group of business leaders said, calling for a "new direction" in policy.Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 Sep 2008 | 10:14 am Business leaders attack government's failure to address economic problemsThe government has failed to tackle Britain's economic problems, a group of business leaders said, calling for a "new direction" in policy.Source: Telegraph Business | 22 Sep 2008 | 10:14 am Pushing The Bailout To $2 Trillion
Since the bill was sent up to Capitol Hill as the weekend began, members of Congress have asked that individual mortgages be propped up under the legislation. Paulson has requested that foreign banks with US operations be included. Some representatives and senators want executive compensation at bailout targets curtailed In a move which could push the value of the assistance program well above $1 trillion, Paulson is considering casting an extremely wide net of salvation. According to Bloomberg, "The change to potentially allow purchases of instruments such as car loans, credit-card debt and other devalued assets may force an increase in the size of the package as the legislation proceeds through Congress." The terms "increase in size" lacks the hyperbole to describe the size of the tent that will be erected if everyone's interests are included. The sad part of this mess, is that the money required today to fix this system, which has too many moving and broken parts will still be inadequate. One of the most obvious and frequently mentioned problems with the new the Paulson-Bernanke reconstruction is that as banks sell mortgage-backed paper below market, they will be forced to write down the assets and take new, and perhaps significant charges. That will cause losses, probably into the tens of billions of dollars. To offset this, the financial firms will have to raise more money, dilute shareholders, and drive down their stock prices further. What was meant to save the system could undermine it, especially if banks cannot find the new investment they need. Sovereign funds have sworn off investing in US banks. If the mortgages of every man, woman, and child are to be saved along with their credit card debt and car loans, and new bank losses are to be financed as well, the size of the pool of capital required could move closer to $2 trillion. If housing prices, at the core of the disintegration of the system, do not rise, even this amount of medicine won't save the patient. Douglas A. McIntyre Source: 24/7 Wall St. | 22 Sep 2008 | 10:08 am Prokhorov buys half of Renaissance CapitalRenaissance Capital, Russia's largest investment bank, is selling a 50 per cent stake to the cash-rich Onexim Group, controlled by oligarch Mikhail Prokhorov, following the most turbulent week in Russia's...Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 Sep 2008 | 10:02 am Alistair Darling promises not to increase taxesAlistair Darling today pledged there would be no tax increases despite the need to increase public borrowing to support Britain through the current economic crisis.Source: Latest Business News from Times Online | 22 Sep 2008 | 10:00 am FSA seeks B&B 'white knights'The UK's financial regulator is thought to have sounded out potential "white knights" for Bradford & Bingley as part of its contingency planning in the event that Britain's biggest buy-to-let lender...Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 Sep 2008 | 9:52 am Dollar slips amid US fiscal worriesThe dollar lost ground on Monday amid fears over the US fiscal position following the US government's plan to create a $700bn fund to buy toxic assets from banks and thereby ease the credit squeeze.Analysts...Source: Infocious RSS raw feed - channel BNPaperBusiness | 22 Sep 2008 | 9:41 am Financial crisis: Alistair Darling promises not to raise taxesThe Chancellor has promised voters they will not face bigger tax bills as the Government battles the effects of the credit crisis.Source: Telegraph Business | 22 Sep 2008 | 9:30 am Shares in London drop in early tradingShares in London and Europe fell in early trading following a record one-day rise on Friday as investors awaited details of the US rescue package.Source: Telegraph Business | 22 Sep 2008 | 8:40 am Alitalia may lose licence to flyItaly's civil aviation authority threatens to withdraw Alitalia's operating licence unless it submits a turnaround plan.Source: BBC News | Business | World Edition | 22 Sep 2008 | 8:31 am Nomura grabs Lehman's Asia business (Reuters)
Source: Yahoo! News: Business | 22 Sep 2008 | 8:10 am Retiring where the jobs areRich Ortiz, 60, has spent the past 30 years training and certifying technicians, including the team at Rocketdyne that developed the space shuttle. He now teaches 26 different technical certification courses at aerospace and defense giant Pratt & Whitney in Los Angeles.Source: Business and financial news - CNNMoney.com | 22 Sep 2008 | 8:10 am Wolseley hit by housing downturnProfits at building materials giant Wolseley slump 77% after its business is hit by the US and UK housing slowdown.Source: BBC News | Business | World Edition | 22 Sep 2008 | 7:29 am Asian markets surge in response to US bailoutMarkets across Asia opened strongly in response to the enormous bailout package from the United States at the end of last week.Source: Telegraph Business | 22 Sep 2008 | 7:20 am Financial crisis comparable to terrorism, Alistair Darling tells Labour Party conferenceThe world economic crisis must be fought like the war on terrorism, the Chancellor is preparing to say.Source: Telegraph Business | 22 Sep 2008 | 7:20 am Fed jumps in for Wall St. againA banking barrier will fall for Morgan Stanley and Goldman Sachs. Meanwhile, Democrats seek more fund oversight.The Federal Reserve took another big step late Sunday to reshape Wall Street and end the era of goliath investment banks, even as Congressional Democrats worked to put their imprint on the Treasury Department's unprecedented $700-billion plan to shore up the economy. Source: L.A. Times - Business | 22 Sep 2008 | 7:00 am 'Lakeview Terrace' is No. 1 at weekend box officeSamuel L. Jackson's cop thriller can't arrest the overall slide in ticket sales. 'Burn After Reading' is still hot.A bad cop bullied his way to the top of the weekend box office as a menacing Samuel L. Jackson in Sony Pictures' "Lakeview Terrace" overcame Lionsgate's "My Best Friend's Girl." Source: L.A. Times - Business | 22 Sep 2008 | 7:00 am Bailout may give housing market some breathing roomThe rescue plan for the banking system doesn't directly address the slide in property values, but it could set the stage for recovery.The government's $700-billion plan to bail out the banking system may calm panicked financial markets, but its real value may be in buying time to address the root problem: the continuing slide in housing values. Source: L.A. Times - Business | 22 Sep 2008 | 7:00 am Bonds may help get state economy movingGov. Schwarzenegger hopes transit and building project bond issues will create jobs.Two years ago, California voters approved the sale of nearly $43 billion in state bonds for housing, transportation, education and water projects. Today, the borrowing is beginning to pay off, one job at a time. Source: L.A. Times - Business | 22 Sep 2008 | 7:00 am U.S. awaits markets' verdict on bailoutThe federal government now has thrown nearly everything it has into reversing the credit crisis and stabilizing financial markets.Source: L.A. Times - Business | 22 Sep 2008 | 7:00 am Gale Banks Engineering pushes to make vehicles more powerful, fuel efficientHigh fuel prices have many business owners worried about their rising expenses and customers who have far less money to spend.Source: L.A. Times - Business | 22 Sep 2008 | 7:00 am Disaster preparation training aimed at small businessesClasses can help companies cope with emergencies before police and fire personnel arrive.Local emergency responders are offering disaster preparation training priced just right for small-business owners: It costs little or nothing. Source: L.A. Times - Business | 22 Sep 2008 | 7:00 am Tim Manners' 'Relevance': a critique of what is wrong with advertisingAdvertisers have never encountered an open space they didn't consider a possible advertising medium.Source: L.A. Times - Business | 22 Sep 2008 | 7:00 am G7 backs 'extraordinary' US plan to end crisisThe Group of Seven (G7) leading economies today said they “strongly welcome” the US Government's $700 billion ($£379 billion)plan to bail out the American banking system amid political wrangling over whether UK and mainland European companies should be included in the deal.Source: Latest Business News from Times Online | 22 Sep 2008 | 6:45 am Mergers expected as Goldman Sachs, Morgan Stanley give up investment bank statusGoldman Sachs and Morgan Stanley gave up their cherishd investment banking status to enable them to survive the current financial storm that US authorities aim to tackle with a $700bn (£400bn) bailout plan.Source: Telegraph Business | 22 Sep 2008 | 6:08 am Nomura clinches Lehman's Asia armNomura is set to acquire the flagship Asian arm of Lehman Brothers, the collapsed US investment bank, which spans investment banking, fixed income and equities operationsSource: FT.com - US homepage | 22 Sep 2008 | 6:03 am Currency: Dollar races up against greenbackThe New Zealand dollar raced up as higher-yielding currencies benefited from US authorities' proposed US$700 billion ($1.06 billion) bailout of the financial system. By 8am the NZ dollar was at a three-week high against the greenback,...Source: New Zealand Herald - Business | 22 Sep 2008 | 5:53 am PM: US free trade deal could be worth $1b a yearA United States decision to enter multilateral free trade negotiations with New Zealand is a "major step forward" that could be worth up to a billions dollars a year for the local economy, Prime Minister Helen Clark says. US officials...Source: New Zealand Herald - Business | 22 Sep 2008 | 5:45 am Wachovia merger talks on holdTalks between Wachovia and Morgan Stanley, which began this week after the Morgan Stanley's share price plunged on concerns over its ability to survive the crisis, have now been put on "indefinite hold"Source: FT.com - US homepage | 22 Sep 2008 | 4:55 am Indian bank to open branch in AucklandBank of Baroda, an Indian bank, wants to set up in New Zealand. The Reserve Bank of New Zealand said today that it had received an application from the bank but declined to comment further on it. Earlier National Business Review...Source: New Zealand Herald - Business | 22 Sep 2008 | 4:38 am Fed now will regulate Goldman, Morgan as banking firmsSource: L.A. Times - Business | 22 Sep 2008 | 3:46 am Tensions mount over bail-outA high-stakes game of political poker was under way in Washington on Sunday as Congress prepared to vote this week on a plan to create a $700bn fund to buy toxic assets from banks and thereby ease the credit squeezeSource: FT.com - US homepage | 22 Sep 2008 | 2:47 am Asia, NZ markets jump higherThe New Zealand sharemarket has leapt ahead today following the announcement that US authorities were proposing a US$700 billion ($1.03 trillion) bailout of finance markets. Just before 3pm, the benchmark NZSX-50 index was up 72points...Source: New Zealand Herald - Business | 22 Sep 2008 | 2:00 am Hohn's Battle FatigueIn June, publicity-shy hedge fund manager Christopher Hohn told investors in his Children's Investment Fund Management (U.K.) he was tiring of the kind of high-profile proxy fights that saw him butt heads with managements of ABN Amro, railroad giant CSX, and German stock market Deutsche Börse. Now, in a rare interview, he explains why."It has been very profitable for us, but it is unpredictable and expensive. Just look at CSX. We've already spent over a year trying to effect change and paid out more than $10 million in legal fees on the proxy fight," Hohn told Institutional Investor's Alpha magazine. "While we're not going to rule out taking an activist stance on existing investments, like Deutsche Börse, we are going to be more cautious about it when we look at making new investments, because, quite frankly, activism is hard." (Read the entire interview here). The magazine says Hohn is feeling the effects of "battle fatigue" and rethinking his mission. "This has been a brutal period for long-biased investors like us, who have limited hedges, and it is painful to lose money," says Hohn of his TCI's many fights. "I think the key for us is to maintain our core philosophy of long-term investing. As long as we still believe in our positions, we won't let the markets change our minds." The magazine reports the CSX battle has taken a toll on Hohn that's more than just financial—it has shaken his faith in corporate democracy. "I think Chris has had second thoughts about activism, because the fight with CSX has become this exhausting, all-consuming thing," says hedge fund veteran Richard Elden, currently a principal in Chicago-based Lakeview Investment Manager. The battle with the company's combative management has gone from Jacksonville, Florida, where CSX is based; to Washington where Hohn's associate Snehal Amin had to testify before the House Subcommittee on Railroads about the firm's motives; to New York, where Hohn took the stand in Federal court about TCI's common investment strategy with another fund, 3G Capital Partners. And despite a relatively favorable ruling that the funds should have operated more openly, Hohn was stung by the experience. Until the clashes with CSX and Japanese power company, J-Power, Hohn was confident in his ability to wear down opponents and win allies among investors, but these protracted battles have seemed to make Hohn ready to take a less bare-knuckle approach. "Buffett has always said that he looks for good management teams, because they're easier to work with," Hohn tells the magazine. "We've often done just the opposite. We've frequently looked for excellent companies with underperforming management—Deutsche Börse, Euronext, CSX. Activism has been profitable for us, but it's getting much harder: The political and regulatory environment is changing." Still, he made money on CSX, which was trading around $35 a share in 2006 when he launched his assault and had risen to as high as $71 before coming in at $58 in mid-September. Deutsche Börse has been a different story. The company has stubbornly bucked the trend to break up or spin off its three main businesses, and Hohn has spoken about needing to find a way to capitalize on the value of Deutsche Börse's subsidiaries. But if Hohn can't mobilize other shareholders to back the argument, he'll find himself locked in another draining proxy battle, which he clearly doesn't want. Hohn appears to be operating under no illusions now about the risks he runs in waging wars he cannot win—and he is tired of disgruntled chief executives lobbying politicians to block his progress. "The current political and regulatory environment has become dangerously passive, and shareholders are already the worse off for it," he says. "Just look at the boards of Citigroup, Merrill Lynch, and UBS: You could argue that they have utterly failed their shareholders in the current financial crisis—but their boards are still very much intact." Related Links AIG Saved Spy Business Ripping Out a Hedgie Source: Portfolio.com: Top 5 | 22 Sep 2008 | 2:00 am It's a Small-Business WorldIt was billed as the first face-to-face encounter between top economic advisers for the presidential candidates to spell out the make-or-break issues for entrepreneurs and small-business owners, but Wall Street derailed it. The Economic Advisers McCain vs Obama: The Lehman Responses Obama's Economic Tour Source: Portfolio.com: Top 5 | 22 Sep 2008 | 2:00 am Strategic Finance penalised $20,000 for breaking sharemarket rulesStrategic Finance has been censured and ordered to pay a $20,000 penalty after it was found to have disclosed material information to other parties before telling the market through NZX. Strategic said it accepted it breached the...Source: New Zealand Herald - Business | 22 Sep 2008 | 1:00 am High-risk, big-bucks era wanes on Wall StreetAs once-freewheeling firms lie dead or damaged, the industry may change how it thinks and does business.Ever since corporate raiders, multibillion-dollar buyouts and the catchphrase "Greed is good" burst into the national consciousness in the 1980s, Wall Street has been a larger-than-life economic and cultural force in America, with its top professionals both exalted and condemned as "masters of the universe" who orchestrated mega-mergers and led opulent lives. Source: L.A. Times - Business | 22 Sep 2008 | 12:48 am NZ dollar races up against greenbackThe New Zealand dollar raced up as higher-yielding currencies benefited from US authorities' proposed US$700 billion ($1.06 trillion) bailout of the financial system. By 8am the NZ dollar was at a three-week high against the greenback,...Source: New Zealand Herald - Business | 22 Sep 2008 | 12:00 am Cost of sending money to Pacific to be cutThe Government is to add a regulation to reduce the cost of sending money to Pacific countries. Prime Minister Helen Clark and Pacific Islands Affairs Minister Winnie Laban today said Cabinet had approved a new regulation under...Source: New Zealand Herald - Business | 21 Sep 2008 | 11:57 pm Bus travel still growing, says InfratilAucklanders and Wellingtonians are continuing to switch to public transport, says Infratil, the parent company of NZ Bus. In it latest figures the company says that in August Auckland saw an increase of 6 per cent across the board...Source: New Zealand Herald - Business | 21 Sep 2008 | 11:30 pm Need to know: Kwik-fit ... Royal Dutch Shell ... NokiaEconomicsSource: Latest Business News from Times Online | 21 Sep 2008 | 11:22 pm Europe's MPs push for hedge fund transparencyThe European Parliament will support calls tomorrow for Europe-wide legislation aimed at making the inner workings of hedge funds and private equity more transparent.Source: Latest Business News from Times Online | 21 Sep 2008 | 11:00 pm Economy takes back seat in first US presidential debateBarack Obama and John McCain will face each other for the first time in a presidential debate this week even as the financial upheaval from Wall Street to Washington turns once-solid policy positions into treacherously shifting ground.Source: Latest Business News from Times Online | 21 Sep 2008 | 11:00 pm U.S. SEC to make public some short positions (Reuters)
Source: Yahoo! News: Business | 21 Sep 2008 | 10:40 pm Obama targets Wall Street greedBarack Obama, casting himself as the defender of Main Street in the face of the folly and greed of Wall Street, is drawing ahead of John McCain in the race for the White House, according to opinion pollsSource: FT.com - US homepage | 21 Sep 2008 | 10:40 pm Nasdaq takes aim at LSE listingsNasdaq OMX, the transatlantic exchange group, plans to set up a listings venue in London in direct competition with the London Stock Exchange for initial public offeringsSource: FT.com - US homepage | 21 Sep 2008 | 10:31 pm Pakistan braced for new wave of violencePakistan's intelligence and security officials warned that the suicide bombing at Islamabad's Marriott hotel, which killed at least 53 people, could be the start of a wave of attacksSource: FT.com - US homepage | 21 Sep 2008 | 10:29 pm GE Capital to cash in on real-estate lendingGeneral Electric's financial-services arm is extending its push into corporate and commercial real-estate debt to capitalise on the dearth of rival lenders in these marketsSource: FT.com - US homepage | 21 Sep 2008 | 10:03 pm Weaker banks may still foldA sweeping United States Government plan to buy up to US$700 billion ($1.06 trillion) in bad mortgages may not be enough to save some banks, which experts say may have to absorb big losses if they sell their troubled assets. The...Source: New Zealand Herald - Business | 21 Sep 2008 | 10:00 pm Fonterra slow to speak on milk scandal - PMFonterra was too slow to speak out over the poison milk scandal in China, Prime Minister Helen Clark said today. The first identified contaminated milk powder in China was sold by New Zealand dairy giant Fonterra's Chinese joint...Source: New Zealand Herald - Business | 21 Sep 2008 | 9:00 pm Lesser of EvilsWall Street is experiencing what it must feel like to file for personal bankruptcy: It's painful, it's a little humiliating, but, damn, it will feel good not to have that debt hanging over me anymore. I can move on with my life and promise to be smarter with my finances.On the brink of collapse, the troubled U.S. financial system could be about to wipe the slate clean with an unprecedented proposal from the Treasury Department. Treasury secretary Hank Paulson unveiled the details presented to Congress over the weekend, which essentially amount to this: Give me $700 billion, and I'll take care of the toxic waste that's corrupting so many bank balance sheets. While Wall Street cheered the news late last week, few in Washington or on Wall Street are celebrating the development. It's risky, it's expensive, and it's not going to be easy. But it's hard to argue that the alternative—letting the U.S. and global economies continue to spiral downward for some unknown period of time—was the better choice. Taxpayers have every right to be irked. The request calls for raising the national debt ceiling from $10.6 trillion to $11.3 trillion. Largely unregulated, Wall Street raked in the money when credit was easy, creating the markets and the mess that remained after the housing market collapsed. And now the government is bailing them out at the expense of the American public. The banks get to move forward, while the cash-strapped working class gets saddled with the long-term expenses from bailing them out. The crisis has so far claimed the lives of two investment banks and forced another into the arms of a giant commercial bank. But it's far from certain that Wall Street will emerge from this chapter with any newfound self-reform. When the next new risky creative type of financing is developed, bankers will most certainly eat it up with reckless abandon as always. And why not? If it fails, Paulson's plan seems to suggest, Uncle Sam will help us out. But Paulson's plan will not be a panacea. By buying up the troubled assets, the government will essentially force the banks into selling them, which will create huge losses on their books. Moreover, as Felix Salmon points out, there are many questions about just how these assets will be priced. Banks still hold these assets not because they can't sell them, but because they are unwilling to sell them at the deeply discounted prices being offered for them. Will this really only cost $700 billion? It's anyone's guess. Remember how little Congress expected the Iraq war to cost in 2003. All this means we will continue to experience some short-term pain. Executives at Morgan Stanley and Goldman Sachs, the last two remaining independent investment banks, reportedly continued to weigh their options over this weekend. It's far from clear that Paulson's bailout will enable them to move forward as independent firms. (Update:Sunday night, the Federal Reserve announced that Morgan and Goldman would become bank holding companies. For more, read here.) The Dow may have surged on Thursday and Friday, but the markets will likely continue to experience volatility in the months to come. Moreover, while Democrats and Republicans have so far appeared to be in unison on this matter, there are no guarantees this will sail through Congress by the end of this week as Paulson hopes. It's a monumental request, and it shouldn't be rushed through without some serious questioning. And of course, the execution of this plan will be the responsibility of a new administration and potentially a new Treasury Secretary. Nobody ever said starting over would be easy. Related Links Wall Street Huddles for Safety Wall Street Requiem World Turned Upside Down Source: Portfolio.com: Top 5 | 21 Sep 2008 | 7:00 pm
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