DuPont names new CEO

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 23 Sep 2008 | 1:21 pm

Why the Chevy Volt won't save GM

Given the prolonged drum roll of publicity that accompanied the unveiling of the Chevrolet Volt electric vehicle last week, it isn't surprising that any number of onlookers got caught up in the enthusiasm. When people begin referring to it as a "game changer" and a "paradigm shift," it's time to inject a bracing dose of reality.

Source: Business and financial news - CNNMoney.com | 23 Sep 2008 | 1:18 pm

Urgent call for bailout

Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke stepped up their campaign for a $700 billion bailout of the nation's financial systems, saying immediate action is needed for the health of the U.S. economy.

Source: Business and financial news - CNNMoney.com | 23 Sep 2008 | 1:15 pm

Air Products Stumbles On The Way To Home (APD)

Source: 24/7 Wall St. | 23 Sep 2008 | 1:09 pm

Putting The Bailout On Hold

So far, Congress has not shown any inclination to buy into the Paulson-Bernanke proposal to give the Treasury a clean piece of legislation so that it can purchase up to $700 billion in toxic assets held by banks.

In testimony he will give to the Senate Banking Committee, Bernanke will say that "Action by Congress is urgently required to stabilize the situation and avert what could otherwise be very serious consequences for our financial markets and our economy."

While everyone from the banking industry to the House and Senate says that they agree, that is clearly not the case. Congress would like riders on the bill for executive compensation, mortgage relief, and provisions may be added for foreign banks and credit card loans.

Getting a simple program in place is becoming less and less likely.

What has emerged is that the Treasury is highly likely to use an auction system to purchase mortgage-related paper from banks. That will prevent aribitrary pricing which could expose the government to charges that it paid too much for the mistakes of bank managements. The bailout would become a gift, isolating financial companies from having to take new write-downs for the real value of the junk on their balance sheets.

One of the questions which is rarely asked is why the Fed does not call the bluff of Congress and say that the free market will be left to do the bidding. The action would have the power of either getting the legislature on board or throwing the entire problem into the lap of the private sector.

As Congress fights over who will be saved by the bill and who will not be. the size and scope of the global capital markets have been ignored.

The conventional wisdom is that the global financial system could not afford to buy up $700 billion in distressed paper. That may not be true. The size of soverign funds in Asia and the Middle East combined with the value of large private equity funds stretches into the trillions of dollars.

Abu Dhabi Investment Authority controls as much as $1 trillion. One fund among others which may be just as large.

The bank assets which are for sale will go at some fraction of their original value. If that number is to be set in an auction, the Treasury says it can make a fortune as the value of the assets appreciates in an improving economic and housing market. Because of this taxpayers may end up footing little if any of the costs of the bailout.

Sovereign funds and private capital determine what they will pay for their investments in a similar way. To keep from over-spending they make sure, to the extent that they can, that there are several bidders for any debt, equity, real estate, or company that they buy.

A global auction systems is already in place. It can put a fair, and probably very low value on US bank assets. The Treasury will do no different.

If the fighting in Washington goes on, the free market may handle the bailout by default. The beauty of that is it will probably work.

Douglas A. McIntyre

Source: 24/7 Wall St. | 23 Sep 2008 | 1:06 pm

Shares slide amid bail-out fears

Shares in Europe and Asia fall amid wrangling in the US over the massive $700bn financial bail-out plan.
Source: BBC News | Business | World Edition | 23 Sep 2008 | 1:00 pm

Paulson and Bernanke urge approval of bail-out

Hank Paulson, US treasury secretary, and Ben Bernanke, chairman of the Federal Reserve, urged Congress to rapidly approve their $700bn government intervention to rescue the US financial system from collapse.
Source: FT.com - US homepage | 23 Sep 2008 | 12:58 pm

Bernanke urges fast action from Congress

There’s an urgent need for Congress to ease financial-market stresses, Federal Reserve Chairman Ben Bernanke plans to tell U.S. lawmakers Tuesday, and the Fed supports the Treasury’s plan to buy bad assets off Wall Street’s books.

Source: MarketWatch.com - Top Stories | 23 Sep 2008 | 12:51 pm

US financial stocks set to open lower

US stocks were set for a lower start as Ben Bernanke warned Congress that urgent action was required to avert 'very serious consequences' for the American economy
Source: FT.com - US homepage | 23 Sep 2008 | 12:51 pm

DuPont prepares the way for a new CEO

E.I. DuPont de Nemours & Co. has taps Ellen Kullman for its next chief executive officer, replacing Charles Holliday Jr. when he steps down next year.

Source: MarketWatch.com - Top Stories | 23 Sep 2008 | 12:48 pm

S Africa shocked by Manuel resignation

South Africa's rand fell sharply on news of finance minister Trevor Manuel's resignation but recouped some of its losses after his spokeswoman said he was willing to serve under a new president
Source: FT.com - US homepage | 23 Sep 2008 | 12:47 pm

Unisys Looking For New Turnaround CEO (UIS)

Source: 24/7 Wall St. | 23 Sep 2008 | 12:45 pm

Metals Stocks: Gold futures fall back below $900 mark following Monday rally

Gold futures lose ground in early action, giving up some of their strong gains from the previous session, as the dollar stabilizes ahead of Capitol Hill testimony by the heads of the Treasury Department and the Federal Reserve.

Source: MarketWatch.com - Top Stories | 23 Sep 2008 | 12:44 pm

Longs remains cool to Walgreen's advances

Walgreen Co. hasn’t given up on a deal with Longs Drugs Stores Inc., but Longs says that it is remaining true to its original suitor, CVS Caremark Corp.

Source: MarketWatch.com - Top Stories | 23 Sep 2008 | 12:43 pm

Ernst & Young Ranks Among the Top 10 on Working Mother Magazine's 100 Best Companies

Listed among 100 Best Companies for Working Mothers for 11 years in a row and among the Top 10 for the past three years NEW YORK, Sept. 23 /PRNewswire/ --- Ernst...
Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Sep 2008 | 12:41 pm

Before the Bell: Senate hearing, Washington Mutual, Lennar in spotlight

U.S. stock futures drifted lower Tuesday before a Senate hearing that will feature Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson discuss the government's proposed $700 billion fund to buy up troubled assets.

Source: MarketWatch.com - Top Stories | 23 Sep 2008 | 12:40 pm

Lennar calls for government help for builders; loss narrows

Restructurings and other recent actions yield a narrower third-quarter loss for Lennar, but the company's home-building business continues to weaken as its chief executive issues a call for further government action to help the industry.

Source: MarketWatch.com - Top Stories | 23 Sep 2008 | 12:37 pm

Futures Movers: Oil futures give up some ground after historic leap

Crude-oil futures dropped nearly 2% early Tuesday, giving up a bit of ground after soaring more than $16 in the previous session, as traders worried that the proposed bailout plan for the U.S. financial sector may not be enough to avert an economic recession.

Source: MarketWatch.com - Top Stories | 23 Sep 2008 | 12:35 pm

Adap.tv Closes $13 Million in Series B Round of Funding

New Investor Spark Capital Leads Round with Additional Funding by Redpoint Venture and Gemini Israel Fund SAN MATEO, Calif., Sept. 23 /PRNewswire/ -- Adap.tv, creators...
Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Sep 2008 | 12:30 pm

Indications: U.S. futures drift lower before Senate hearing on bailout plan

U.S. stock futures edged lower Tuesday after the previous session’s rout, with Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson due to testify about the fine print of the $700 billion bank rescue package.

Source: MarketWatch.com - Top Stories | 23 Sep 2008 | 12:30 pm

Rosetta Genomics Announces Transfer of MicroRNA-based Liver Therapeutics Project With Isis Pharmaceuticals, Inc. to Regulus Therapeutics LLC

REHOVOT, Israel and JERSEY CITY, New Jersey, September 23 /PRNewswire-FirstCall/ -- Rosetta Genomics Ltd. (Nasdaq:ROSG), a leader in the development of microRNA-based...
Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Sep 2008 | 12:30 pm

Dorel names Home Furnishings Segment President

EXCHANGES TSX: DII.B DII.A MONTREAL, Sept. 23 /PRNewswire-FirstCall/ - Dorel Industries Inc. (TSX: DII.B DII.A) today announced the promotion of Norman...
Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Sep 2008 | 12:30 pm

ClearOne Announces Final Results of Tender Offer

SALT LAKE CITY, Sept. 23 /PRNewswire-FirstCall/ -- ClearOne (Nasdaq: CLRO) today announced the final results of its modified Dutch auction tender offer, which expired at...
Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Sep 2008 | 12:30 pm

Honeywell Develops Safer Ammonium Nitrate-Based Fertilizer; Receives SAFETY Act Designation from U.S. Department of Homeland Security

MORRIS TOWNSHIP, N.J., Sept. 23 /PRNewswire-FirstCall/ -- Honeywell (NYSE: HON) announced today it has developed a patented new technology to produce a highly-effective, safer...
Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Sep 2008 | 12:30 pm

The Board of Directors of Oberthur Technologies Will Review the Proposed Tender Offer Initiated by Francois-Charles Oberthur Fiduciaire

PARIS, September 23 /PRNewswire-FirstCall/ -- On September 22nd 2008, the Board of Directors of Oberthur Technologies has been informed of the terms and conditions of the
Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Sep 2008 | 12:28 pm

CenterPoint Outlines Its Own Hurricane Ike Costs (CNP)

Source: 24/7 Wall St. | 23 Sep 2008 | 12:27 pm

Google phone: Free e-mail?

Users of T-Mobile's Android phone would be able to get access to Gmail without paying extra for a data plan.

Source: Business and financial news - CNNMoney.com | 23 Sep 2008 | 12:25 pm

Lennar sales tumble 53%

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 23 Sep 2008 | 12:17 pm

Bernanke set to urge Congress to approve rescue

Ben Bernanke, chairman of the US Federal Reserve, will today urge the American Congress to take action and buy mortgage assets to help relieve the stress in the financial markets.
Source: Latest Business News from Times Online | 23 Sep 2008 | 12:13 pm

WHX Corporation Extends Expiration Date of Rights Offering to Thursday, September 25, 2008

Proceeds From The Rights Offering Expected To Be Approximately $149 Million WHITE PLAINS, N.Y., Sept. 23 /PRNewswire-FirstCall/ -- WHX Corporation (Pink Sheets: WXCP)
Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Sep 2008 | 12:07 pm

Rimfire and Northgate Commence Drilling at Boulevard, Yukon

VANCOUVER, Sept. 23 /PRNewswire-FirstCall/ - (All figures in Canadian dollars) Rimfire Minerals Corporation, TSX-V:RFM, is pleased to announce that in partnership with Northgate...
Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Sep 2008 | 12:00 pm

People Seeking Credit Counseling in August Earned $49,308 Annually, Nonprofit Agency Finds

Consumer Credit Counseling Service of Greater Atlanta cites rising unemployment, higher living costs ATLANTA, Sept. 23 /PRNewswire/ -- People seeking budget and debt ...
Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Sep 2008 | 12:00 pm

Troubled airline Alitalia uses newspaper advertisements to attract bidders

Advertisements to buy ailing Italian airline appear in four newspapers in a bid to lure buyers for the firm.
Source: BBC News | Business | World Edition | 23 Sep 2008 | 11:57 am

Lennar loss narrower than expected

NEW YORK (Reuters) - Lennar Corp posted a narrower-than-expected quarterly loss on Tuesday as the home builder reduced construction and administrative costs.

Source: Reuters: Business News | 23 Sep 2008 | 11:51 am

Lennar loss narrower than expected (Reuters)

Reuters - Lennar Corp posted a narrower-than-expected quarterly loss on Tuesday as the home builder reduced construction and administrative costs.

Source: Yahoo! News: Business | 23 Sep 2008 | 11:51 am

GSE oversight powers came too late: regulator

WASHINGTON (Reuters) - The U.S. Congress gave a new regulator for Fannie Mae and Freddie Mac stronger oversight powers too late to help steer the companies away from a government takeover, the chief regulator for the mortgage finance companies said on Tuesday.

Source: Reuters: Business News | 23 Sep 2008 | 11:47 am

GSE oversight powers came too late: regulator (Reuters)

Reuters - The U.S. Congress gave a new regulator for Fannie Mae and Freddie Mac stronger oversight powers too late to help steer the companies away from a government takeover, the chief regulator for the mortgage finance companies said on Tuesday.
Source: Yahoo! News: Business | 23 Sep 2008 | 11:47 am

Bernanke says global markets under "extraordinary stress"

WASHINGTON (Reuters) - Federal Reserve Chairman Ben Bernanke told the U.S. Congress Tuesday that financial markets are under severe stress and urged immediate action to buy up hundreds of billions of dollars worth of tainted mortgage assets.

Source: Reuters: Business News | 23 Sep 2008 | 11:47 am

War-hit nations head corrupt list

Iraq is ranked by Transparency International as one of the world's most corrupt countries in its annual global survey.
Source: BBC News | Business | World Edition | 23 Sep 2008 | 11:47 am

6 stocks to buy now

Source: Business and financial news - CNNMoney.com | 23 Sep 2008 | 11:38 am

Banks fall despite short-selling ban

A recent ban on short selling failed to halt the sell-off in the financial services sector in London on Tuesday as doubts about the effectiveness of a proposed $700bn US government rescue plan grew.Details...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Sep 2008 | 11:36 am

Behind Sallie Krawcheck's exit from Citi

Source: Business and financial news - CNNMoney.com | 23 Sep 2008 | 11:35 am

London Markets: Airlines, retailers, banks decline in downbeat London

The biggest one-day rise in oil prices in history weighs on airlines such as British Airways and retailers including Marks & Spencer in early trading in London on Tuesday, with banks also under pressure as hopes for an immediate end to their troubles fade.

Source: MarketWatch.com - Top Stories | 23 Sep 2008 | 11:35 am

10 bizarre and daring acts of salesmanship

Fortune's "The Art of Selling" special report continues with a look at how legends mastered the sales pitch - and raked in the revenues.

Source: Business and financial news - CNNMoney.com | 23 Sep 2008 | 11:33 am

Ryanair grounds 14 planes at Stansted

Ryanair, the cut-price Irish airline, is to ground 14 aircraft at Stansted airport this winter as it grapples with fuel costs and weakening consumer demand.
Source: Latest Business News from Times Online | 23 Sep 2008 | 11:33 am

The Bailout Battle

No one outside of the Treasury Department seems very enthusiastic about the $700 billion financial bailout. Nonetheless, the outlines of a plan are taking shape.

Treasury has yielded on three major issues insisted upon by Democratic leaders in Congress, spearheaded by the chairman of the House Financial Services Committee, Representative Barney Frank.

• An oversight board will monitor the program.
• Homeowners facing foreclosure will receive additional assistance.
• The Treasury will have the ability to take equity stakes in companies that seek assistance.

Henry Blodget on ClusterStock says the last point could prove to be very important. A program in Sweden in 1992 gave the government equity in exchange for giving capital to troubled banks.

"This bailout fixed the Swedish banking system, which was suffering from similar ailments. It did it quickly, avoiding a Japan-like scenario," he says. "And it ended up costing taxpayers very little" because the government benefited when the banks turned around, he adds.

Treasury Secretary Hank Paulson is still balking at demands that limits on executive pay be mandated for companies that take advantage of the "troubled asset relief program." Treasury contends that this would dissuade troubled companies from seeking assistance and selling their distressed mortgages and mortgage-backed securities to the government.

Yet the Wall Street Journal reports that "some lawmakers are looking to call Mr. Paulson's bluff, thinking that many institutions would find the choice between limits on executive pay and bankruptcy an easy one."

Today may be a turning point in the bailout as Paulson and Ben Bernanke, the chairman of the Federal Reserve, which has emerged as a superpower in the credit crisis, discuss the plan before the Senate Banking Committee.

Doubts about the program have weighed heavily on world markets, with a sharp sell-off on Wall Street Monday afternoon. Stocks in Asia and Europe were lower today: London fell more than 2 percent by midday, while Hong Kong ended down nearly 4 percent.

Still, the House could act on a bill as soon as tomorrow, with the Senate following soon afterward.  

"We have gotten closer," Representative Frank said late Monday, according to the Associated Press. "We're not there yet."

Related Links
Barney Frank's Opposition: It's Not Hank Paulson
Bad Cop, Bad Cop
Hank Paulson Gets It, Finally


Source: Portfolio.com: Top 5 | 23 Sep 2008 | 11:30 am

Air Products cuts outlook on Korean fire, hurricanes

Industrial gases firm Air Products and Chemicals lowered its fourth-quarter earnings view, citing a fire at a Korean facility, hurricanes, and other factors.

Source: MarketWatch.com - Top Stories | 23 Sep 2008 | 11:28 am

Pension scheme membership falls

The number of people paying into final salary pension schemes in the private sector fell again last year, government figures show.
Source: BBC News | Business | World Edition | 23 Sep 2008 | 11:27 am

Stock futures drop on bailout anxiety, banks (Reuters)

Reuters - Stock index futures fell on Tuesday as Federal Reserve Chairman Ben Bernanke said global financial markets remain under extraordinarily stress as Congress debates a proposed $700 billion financial system bailout.

Source: Yahoo! News: Business | 23 Sep 2008 | 11:27 am

Stock futures drop on bailout anxiety, banks

NEW YORK (Reuters) - Stock index futures fell on Tuesday as Federal Reserve Chairman Ben Bernanke said global financial markets remain under extraordinarily stress as Congress debates a proposed $700 billion financial system bailout.

Source: Reuters: Business News | 23 Sep 2008 | 11:27 am

Bernanke says global markets under "extraordinary stress" (Reuters)

Reuters - Federal Reserve Chairman Ben Bernanke told the U.S. Congress Tuesday that financial markets are under severe stress and urged immediate action to buy up hundreds of billions of dollars worth of tainted mortgage assets.

Source: Yahoo! News: Business | 23 Sep 2008 | 11:21 am

Microsoft, HP OK buybacks

Microsoft on Monday announced yet another plan to buy back $40 billion worth of shares.

Source: Business and financial news - CNNMoney.com | 23 Sep 2008 | 11:19 am

Gas prices: Down 9% from July high

Gas prices fell back, yet again, marking the sixth straight decline, according to a nationwide survey of credit card swipes at gasoline stations.

Source: Business and financial news - CNNMoney.com | 23 Sep 2008 | 11:11 am

Early Bird Analyst Upgrades (NLY, ATML, DWA, NVS, PRM, SSCC, SNWL)

These are not all of the upgrades and positive analyst calls on Wall Street this morning, but these are the ones we are focusing on early this Tuesday morning:

• Annaly Capital (NLY) Raised to Buy at Merrill Lynch.
• Atmel (ATML) Started as Buy at UBS.
• Dreamworks Animation SKG (DWA) Raised to Buy at Merrill Lynch.
• Novartis (NVS) Raised to Neutral from Underperform at Credit Suisse.
• Primedia (PRM) Raised to Neutral at JPMorgan.
• Smurfit-Stone Container (SSCC) Raised to Buy at Goldman Sachs.
• SonicWall (SNWL) Started as Outperform at Baird.

Jon C. Ogg
September 23, 2008

Source: 24/7 Wall St. | 23 Sep 2008 | 11:06 am

Circuit City CEO resigns amid troubles (AP)

AP - The chief executive at Circuit City Stores Inc. stepped down Monday and was replaced by a board member appointed to defuse a fierce proxy battle as the struggling electronics retailer steps up its turnaround effort.

Source: Yahoo! News: Business | 23 Sep 2008 | 11:05 am

Early Bird Analyst Downgrades (CHS, FIG, GE, MPEL, MTB, SNY, SLGN, STM, STI)

These are not all of the downgrades or negative analyst calls affecting stocks this Tuesday, but these are some of the highlights we have seen with over 2 and a half hours to the market open:

• Chico’s FAS (NYSE: CHS) Cut to Neutral at Piper Jaffray.
• Fortress Investment (NYSE: FIG) Cut to Market Perform at KBW.
• General Electric (NYSE: GE) Cut to Neutral at Merrill Lynch.
• Melco Crown Entertainment (NASDAQ: MPEL) Cut to Neutral at JPMorgan.
• M&T Bank (NYSE: MTB) Cut to Underperform at Baird.
• Sanofi-Aventis (NYSE: SNY) Cut to Underperform at Credit Suisse.
• Silgan Holdings (NASDAQ: SLGN) Cut to Neutral at Goldman Sachs.
• STMicroelectronics (NYSE: STM) Cut to Neutral at JPMorgan.
• SunTrust Banks (NYSE: STI) Cut to Neutral at Baird.

Jon C. Ogg
September 23, 2008

Source: 24/7 Wall St. | 23 Sep 2008 | 11:03 am

$700bn bail-out

What more is needed to solve the financial crisis?
Source: BBC News | Business | World Edition | 23 Sep 2008 | 10:57 am

Iraq strikes gas deal with Shell

Iraq agrees to set up a joint venture with Royal Dutch Shell to invest in the country's natural gas reserves.
Source: BBC News | Business | World Edition | 23 Sep 2008 | 10:43 am

Circuit City (CC) Falls Off The Earth As CEO Leaves

Circuit City (CC) sacked the CEO who ran the company for the past four years. Philip Schoonover held every important job at the retailer from chairman to CEO to president. He was ejected because the fortunes of the electronics retailer have continued to fall. The company's shares trade below $2. Their 52-week high was more than $9.

At its core, the problem that Schoonover faced was that Circuit City could not be fixed. He was on a fool's errand and was paid well for the pursuit.

Circuit City is one of a growing number of retailer which are too small or too poor to compete with the likes of Wal-Mart (WMT), Best Buy (BBY), CostCo (COST), and Target (TGT). These large companies have sucked all of the air out of the room. Shoppers are not likely to go to other discount stores, especially when there are so few shoppers to go around.

Circuit City is one of a large number of retailers that are not likely to survive the bad economy and their own lack of aggression and inventiveness. Sears (SHLD) is in the group. Macy's (M) may be as well.

Kicking out CEOs will not solve the problem at these weaker companies. They are what managements fear the most--companies which cannot be saved.

Douglas A. McIntyre

Source: 24/7 Wall St. | 23 Sep 2008 | 10:35 am

Tate & Lyle loses sweetener case

Tate & Lyle loses a court case to defend its Splenda artificial sweetener from Chinese manufacturers producing generic competitors.
Source: BBC News | Business | World Edition | 23 Sep 2008 | 10:29 am

Setback in retirement age battle

A challenge against employers' rights to make people retire at 65 has been rejected by the adviser to the European courts.
Source: BBC News | Business | World Edition | 23 Sep 2008 | 10:22 am

Channel 4 to slash £100m in costs and cut 15% of workforce

Channel 4 this morning announced plans to cut 15 per cent of its workforce and slash £100 million from its costs in an attempt to stave off unsustainable losses at the Big Brother broadcaster.
Source: Latest Business News from Times Online | 23 Sep 2008 | 10:21 am

Car Companies Want In On Rescue Plan (GM)(F)

The financial system is looking for a form of what theologians call "universal salvation". What began as a simple piece of legislation to get $700 billion into the banking industry by the government purchasing toxic assets has turned into a free-for-all to rescue everyone from mortgage holders to car companies.

By the end of the week the Treasury program could be so large that the agency will be handing out free pre-paid cellular calling cards and vouchers for fifty gallons of gas, gifts from the US government.

The banking bill has already been saddled with Congressional requests to limit executive pay at banks and provide help for homeowners. Foreign banks with US operations want in as well. So do thousands of small community banks.

The latest group trying to cut into the line is the US car companies. They have already been begging for Congress to give them $50 billion in loan guarantees to upgrade their factories. According to The Wall Street Journal, "Automobile-finance companies lead a growing list of liquidity-starved industries trying to get in on the huge government rescue plan targeted originally at cleaning up bad mortgage bets."

Fitch recently downgraded GM debt to CCC. Losses at GMAC have been rising. September auto sales are expected to be worse than they were in August which means that GM and Ford could each be in the red by more than $1 billion for the month.

It only took a day or two for the Treasury program to become all things to all people, a life raft for struggling industries and citizens who are down on their luck.

Of course, the burden of caring for all of these souls is too great. If the legislation's purpose is ransacked, it will be of no good to anybody.

Douglas A. McIntyre

Source: 24/7 Wall St. | 23 Sep 2008 | 10:16 am

Ask SmartMoney: College Savings, SUVs, Stock Buybacks (Ask SmartMoney)

What's the best way for me to help pay my grandson's college bills?

Source: SmartMoney.com | 23 Sep 2008 | 10:14 am

Bail-out politics

Should McCain cheer the Wall Street package?
Source: BBC News | Business | World Edition | 23 Sep 2008 | 10:12 am

Oil slips after record price spike

Oil prices retreated on Tuesday after a record one-day rise in the previous session while gold prices slipped below the $900 level and base metals weakened, under pressure from a recovery in the dollar...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Sep 2008 | 10:09 am

EU to slash more mobile charges

The European Commission outlines new cuts to mobile phone roaming costs, with texts included for the first time.
Source: BBC News | Business | World Edition | 23 Sep 2008 | 9:57 am

GIC eyes US distressed assets

The Government of Singapore Investment Corp, the sovereign wealth fund that has invested billions of dollars in UBS and Citigroup, said yesterday said it would not rule out investing more in western financial...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Sep 2008 | 9:56 am

Dollar rises after weak eurozone data

The dollar recovered some ground on Tuesday after a sharp sell-off in the previous session as weak economic data from the eurozone shifted investors' focus away from problems in the US. The eurozone manufacturing...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Sep 2008 | 9:53 am

Dollar up as focus shifts to Europe woes

The dollar recovered some ground on Tuesday after a sharp sell-off in the previous session as weak economic data from the eurozone shifted investors' focus away from problems in the US. The eurozone manufacturing...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Sep 2008 | 9:53 am

Now Anyone Can Own A Bank, A De Facto Win For Sovereign Interests (BAC)(C)(WB)(WFC)

Source: 24/7 Wall St. | 23 Sep 2008 | 9:47 am

Bristol-Myers raises ImClone bid

LOS ANGELES, Sept 22 - Bristol-Myers Squibb Co said on Monday it raised to $62 from $60 its per-share offer for the part of biotechnology company ImClone Systems that it does not already own. Bristol-Myers,...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Sep 2008 | 9:45 am

Asian markets lock in profits

Asia-Pacific equities fell on Tuesday, following Wall Street lower, as concerns over the final shape the US government-sponsored fund dragged down sentiment and led investors to lock in profits from the...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Sep 2008 | 9:38 am

Oil falls below $107 after record one-day surge

LONDON (Reuters) - Oil dropped $3 a barrel on Tuesday, weighed by doubts about the U.S. bailout plan and as investors booked profits after an historic one-day rise in the previous session.

Source: Reuters: Business News | 23 Sep 2008 | 9:30 am

London shares follow Wall St lower

London and European equities followed markets in New York and Asia lower as confidence was knocked after US authorities remained undecided over the details of a financial sector bail-out.Plans to create...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Sep 2008 | 9:28 am

WaMu persists in search for a buyer

Washington Mutual was under mounting pressure from regulators on Monday to reach a deal with prospective buyers as that would put the beleaguered US bank in stronger hands.The Office of Thrift Supervision...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Sep 2008 | 9:20 am

In A Moment Of Optimism Retailers Say Holiday Sales Will Be Bad (WMT)(SHLD)(CC)

Hope is a fine human emotion until it moves to lunacy. A psychosis of optimism has seized the retail industry. The National Retail Federation says that sales will rise only 2.2% this holiday season. That would make it the worst year in the last six.

According to Reuters, research firm TNS Retail Forward sees holiday sales falling to a 17-year low. Neither forecast bothers to look back to the early 1980s recession or the deep economic malaise of 1973 and 1974.

The retail industry faces two challenges this winter and neither of them will be overcome by slick merchandising or low-price discounts.

The average consumer is devoting an unprecedented amount of their income to fuel and food costs at the same time that they cannot lay their hands on credit to cover expenses. Commodities prices may be down a bit from earlier this year, but they are still near historic highs. The home heating oil season is about to begin and the effects of that could drive many homeowners to despair.

To compound the trouble, many people believe they will lose their jobs over the next few months, and, unfortunately, they are right.

The consumer does not have a dime, no matter how much he wants to buy his kids an iPod or his wife a new washer-dryer set. In some cases, he cannot even afford to drive to the store. Wal-Mart (WMT) may get a few shoppers, but the balance of retail outlets will not.

Another challenge comes from the significant number of rich people who are out of work. By the end of the year, tens of thousands of the nearly wealthy from the financial industry will be in bread lines. That rules out an improvement in sales of Mercedes, expensive handbags, flat-screen TVs, and high-end jewelry and clothing.

The negative cycle is about to turn back on itself. A tough retail season means the weakest outlets like Sears (SHLD) and Circuit City (CC) will begin to cut staff. None of those people will be shopping either.

Douglas A. McIntyre

Source: 24/7 Wall St. | 23 Sep 2008 | 9:11 am

Stocks Fall in Europe and Asia

European stocks followed Asia indexes lower as investors remained concerned about fallout from the financial bailout in the U.S. and despite some easing in the price of oil.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Sep 2008 | 8:41 am

Carpetright warns critical months key for profits

Lord Harris of Peckham's Carpetright has reinforced the gloom in the home furnishings market with a cautious and downbeat trading statement.
Source: Latest Business News from Times Online | 23 Sep 2008 | 7:53 am

Mitchells & Butlers provides cheer among gloom

Mitchells & Butlers, the pub operator that owns the All Bar One and Harvester chains, has put out an upbeat trading statement, reporting rises in like-for-like sales in the late summer. The company is benefiting from comparisons with the same period last year, which saw the first effects of the smoking ban in Egnland and Wales.
Source: Latest Business News from Times Online | 23 Sep 2008 | 7:17 am

Japan's biggest bank to buy 20% stake in Morgan Stanley

The investment by Mitsubishi UFJ Financial Group highlights the crucial role of Asia as the U.S. tries to restore health and confidence to its tottering financial system.

Major Asian banks that have pulled themselves from the depths of their own economic crisis of the 1990s are showing now just how crucial a role they may play as the U.S. tries to restore health and confidence to its tottering financial system.

Source: L.A. Times - Business | 23 Sep 2008 | 7:00 am

Stock prices and U.S. dollar plunge as oil soars

Anxiety mounts over the government's proposed $700-billion bailout. The Dow falls 372 points.

This wasn't the reaction to his $700-billion rescue plan that Treasury Secretary Henry M. Paulson was hoping for.

Source: L.A. Times - Business | 23 Sep 2008 | 7:00 am

White House presses for swift action by Congress on bailout

As turmoil continues on Wall Street, the Bush administration must accommodate Democratic demands.

Rushing to win quick congressional -- and public -- approval for its $700-billion bailout of the tottering financial system, the Bush administration moved toward compromises Monday that would have been inconceivable even a few weeks ago, including new aid for debt- laden homeowners.

Source: L.A. Times - Business | 23 Sep 2008 | 7:00 am

Gas prices fall despite oil's rise

The average price of a gallon of self-serve regular gasoline nationally falls 11.7 cents to $3.718. In California, the cost is down 7.9 cents to $3.725.

The price of crude oil jumped dramatically Monday as the dollar's value fell and traders jockeyed on the last day of trading on the October futures contract. But gasoline prices didn't follow crude's lead.

Source: L.A. Times - Business | 23 Sep 2008 | 7:00 am

Financial industry's campaign donations could help it in bailout

Firms have given lavishly to both parties in Congress. That could help them get the language they want in the bill - as well as block provisions such as homeowner assistance.

Members of Congress were pressed hard Monday by financial industry lobbyists and consumer advocates alike seeking favorable language in the massive bailout bill expected to come for a vote this week.

Source: L.A. Times - Business | 23 Sep 2008 | 7:00 am

His kitty site became a caboodle

A Web entrepreneur's Pet Holdings network keeps people entertained. Will it keep making money through the advertising downturn?

When you LOL at silly pictures of cats with even sillier captions, Ben Huh laughs all the way to the bank.

Source: L.A. Times - Business | 23 Sep 2008 | 7:00 am

Harley-Davidson thrown by bumps in the road

Tight credit and costly gas are driving sales down for the big-bike maker. Hogs now share space with scooters.

Owning a chromed or custom Harley-Davidson is "not about transportation, it's about an experience," says the company's chief executive, James L. Ziemer.

Source: L.A. Times - Business | 23 Sep 2008 | 7:00 am

Banks and customers show more interest in checking accounts

Deposits offer reliability in a financial market battered by failures and volatility.

The humble checking account, long overshadowed by sexier and higher-risk investment vehicles, may have a key role to play in the revival of the nation's gasping financial system.

Source: L.A. Times - Business | 23 Sep 2008 | 7:00 am

Shares dive as Paulson fights for rescue deal

Shares in London and Asia fell sharply overnight amid growing doubts about how a $700 billion ($£378 billion) US government financial bailout will be able to shore up confidence in America’s economy as it slips into recession.
Source: Latest Business News from Times Online | 23 Sep 2008 | 6:53 am

Currency: Dollar ignores P4 news, follows the pack

The New Zealand dollar took its lead from global markets today, ignoring news that the United States would join New Zealand, Singapore, Chile and Brunei in the P4 trade deal. At 8am today it was buying US69.27c but by 5pm it had...
Source: New Zealand Herald - Business | 23 Sep 2008 | 5:34 am

Nomura poised for Lehman's Europe units

Nomura is in exclusive talks to acquire Lehman Brothers' equities and corporate finance business in Europe, after Barclays withdrew from the discussions. The Japanese bank has already clinched Lehman's flagship Asian operations
Source: FT.com - US homepage | 23 Sep 2008 | 4:20 am

Holiday sales set for worst gain in 6 years (Reuters)

Reuters - The tumultuous economic climate will constrain U.S. holiday sales growth to its lowest level in six years and a turnaround is not likely until the second half of next year, a leading retail trade group forecast on Tuesday.

Source: Yahoo! News: Business | 23 Sep 2008 | 4:07 am

Sinking Sukuks

Investors in Western securities have been given plenty to fret about recently as markets have seized up, money flows have frozen, and confidence has evaporated. But at least they haven't had to tangle with God as well.

Not so in Islam, where the world's fastest-growing debt market has hit the skids in part because leading Islamic scholars began to question whether some popular Islamic bonds, or sukuks, followed Islamic law.

The fact that such questions exist point to a peculiar risk in Islamic markets that—because leverage is generally eschewed and securities are closely tied to assets—have been viewed as more resilient than their Western counterparts.

The questions also come at a time when that resilience is showing its limits; the Middle East is now grappling with the contagious global credit crunch and worries over its own overheated asset market. And the debate among Islamic scholars is sure to complicate those woes.

"The irony is that current market conditions are the result of deficiencies with [the] backbone of the conventional finance industry," says Rahail Ali, head of Islamic Finance at the Dubai office of Lovells, and English law firm.

Ali added that the debate among Shariah scholars has gained prominence because the sukuk market is now "open to a much wider investor base, some of which isn't familiar with the fact that differences of opinion among the Shariah scholars are very much to be expected."

Those investors got their first taste of "religious interpretation risk" last November when Sheik Muhammad Taqi Usmani said he believed that as much as 85 percent of Islamic bonds already in the market had a critical religious flaw baked into them: They guaranteed a buyer that principal would be paid back, even in the case of default.

Conventional bonds routinely carry such provisions but they are problematic for Muslims who are, among other things, barred from accepting interest, or engaging in any business where profit and risk are not equally shared.

To work around some of the simplest issues, Islamic bonds are supposed to derive their payment stream from the revenue thrown off by a real asset or some similar structure, while any repurchase is seen as just a return on a lease, and should be done at market rates.

But in an attempt to securitize a wider array of assets, or to make more appealing structures, many Islamic bonds have veered too close to a Western interpretation of what a bond should be.  Or, as Usmani wrote, Islamic financial institutions, in an attempt to compete in "the conventional, interest-based marketplace," have churned out products that give lip-service to Islam while using "ploys that sound minds reject and bring laughter to enemies."

Such statements by Usmani, who is the powerful chairman of the board of Islamic scholars at the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions, sent a chill through the sukuk market.

A clarification in February by the entire A.A.O.I.F.I. board outlining more clearly how sukuks could stay in compliance didn't provide much reassurance.

The effect on financing has been measurable. So far this year, only about $14 billion in Islamic bonds have been issued, compared with around $23 billion during the same time frame last year, according to Standard & Poor's. That is a decline of almost 40 percent.

Noting the "confusion" over what scholars will deem to be acceptable Islamic debt structures, Jaime Sanz of Fitch's emerging markets structured-finance team wrote in a recent research note that "a liquid, transparent, and efficient" Islamic debt market "is of paramount importance" as countries including Saudi Arabia and the United Arab Emirates face the need for "substantial" infrastructure investments.

While much of the Middle East's development still relies on conventional finance, the $70 billion Islamic bond market has grown rapidly thanks to the huge influx of petrodollars and the greater interest in Shariah-compliant investing among Muslims.

"Just as there are more women wearing veils, there are more people interested in Islamic products," says Professor Ibrahim Warde, of the Fletcher School of Law and Diplomacy at Tufts University. The sukuk market, he adds, is just part of a $900 billion Islamic financial sector that grew about 37 percent in 2007.

Those assets have attracted Western bankers looking for a foothold in the Middle East, and Western institutions looking for diversification with attractive yields. Just "10 or 15 years ago, many Western institutions would not have been interested in Islamic finance because it looked too complicated," Warde says. But now, Western banks like J.P. Morgan, Citigroup, and Morgan Stanley are among the leading underwriters in the Islamic bond market.

That market has become the backbone of the Islamic insurance industry, a catalyst for the development of the region's capital markets, and has funded the development of everything from Bahrain's financial center and Dubai's Palm development to Emirates Airlines' expansion and a Kuwaiti-led consortium's leveraged buyout of British sports-car maker Aston Martin.

Sukuks have also begun to be floated in Western markets and are backing Western assets. The German state of Saxony-Anhalt and the World Bank have both issued sukuks, while a small Texas oil and gas exploration firm called East Cameron Partners issued an Islamic bond backed by some of its offshore Louisiana gas reserves.

Standard & Poor's estimates that the sukuk market will exceed $100 billion by 2009, even with the latest hiccup. But the Islamic bonds that will be floated are unlikely to push the envelope in the ways others did before, and the innovation that helped sukuks gain acceptance in an ever-growing universe of deals could slow.

 Dr. Mohamed Damak, a ratings specialist at Standard & Poor's, notes that he has "clearly noticed a shift in the structures of sukuks issued in 2008 toward Ijara (where financing is accomplished through a form of sale-lease back of real assets) away from Musharakah (a more controversial form of profit-sharing questioned by Islamic scholars).

Even without the religious controversy, questions remain as to whether sukuks might ever grow beyond being a niche product, since Islamic law prohibits them from being tranched (sliced up into different yields) or effectively hedged.

Professor Samuel Hayes of Harvard Business School notes that the prohibition on hedging means that any financial arrangement that could be affected by changes in exchange rates or in the rate of inflation leaves the investor "vulnerable to a very substantial risk."

They also have yet to be tested in a default. Warde says this is among the chief concerns for the market going forward. Although sukuk issuers have tried to devise asset liquidation mechanisms that dovetail with those found in conventional bonds, none of these have been tested in court.

"The main fear that investors have is what will happen in practice if some sukuk goes bad," he says. While most Islamic contracts now prescribe English law to be governing, Warde says that "in the case of failure of sukuk, the process of adjudication will be a complex and long-drawn affair, whereby judges will want to know what sukuk really are, and as part of that process, Shariah scholars will no doubt have some input."

With easy credit and oil powering the Gulf real estate markets to dizzying heights, such defaults might come sooner than anyone thinks, making the Shariah scholars among the hottest commodities around.

---

Also on Portfolio.com:

Let's Make a Halal Deal
A guide to the financial world's Islamic advisers.Related Links
Celebrity Con Man Pleads Guilty
Satan's Accountant
Anne Hathaway and the $30,000 Housecall


Source: Portfolio.com: Top 5 | 23 Sep 2008 | 4:00 am

Aetna to let outside doctors decide on rescissions

Such independent review will eventually be standard for all insurers doing business in California, a stake spokesman says.

Aetna Inc., the third-largest U.S. health insurer, will let outside doctors decide whether to cancel coverage for sick customers suspected of obtaining policies through false or incomplete information.

Source: L.A. Times - Business | 23 Sep 2008 | 3:54 am

Broadband competition hots up

Competition in wholesale broadband is heating up with the launch of a new product from Telecom, just a day after rival Vodafone announced a move into the market. Telecom is touting enhanced unbundled bitstream access (UBA) as the...
Source: New Zealand Herald - Business | 23 Sep 2008 | 3:10 am

NZ has more millionaires but 'less wealth' - report

New Zealand now has about 7000 millionaire households, but the country's rapid growth in personal wealth went into reverse last year. The Boston Consulting Group (BCG)'s eighth annual Global Wealth Report said that personal wealth...
Source: New Zealand Herald - Business | 23 Sep 2008 | 2:52 am

Bailout uncertainty, oil's surge sink Wall St (Reuters)

Reuters - Stocks tumbled on Monday as investors worried a $700 billion bailout for the financial sector may not resuscitate a slumping economy, while a record spike in oil prices renewed concern about consumer spending.

Source: Yahoo! News: Business | 23 Sep 2008 | 2:07 am

Contact Energy ups directors' fees

Contact Energy is looking to nearly double the pool of money available to its directors to $1.5 million at its annual shareholders' meeting next month. Contact generates around 25 per cent of the country's electricity from nine...
Source: New Zealand Herald - Business | 23 Sep 2008 | 1:30 am

New look to Wall St banking scene

The reorganisation of Morgan Stanley and Goldman Sachs marks a historic end to a period of investment banks driving Wall Street and leaves open what - if anything - will assume the role of taking big risks that have powered the market's...
Source: New Zealand Herald - Business | 23 Sep 2008 | 1:00 am

After The Close - Monday

UNION PACIFIC (UNP), a railroad operator, increased its Q3 EPS estimate to $1.28-$1.33, above views. It said strong shipping volume and lower...
Source: Investor's Business Daily: BUSINESS | 23 Sep 2008 | 12:57 am

Chain Of Used-Car Lots Taps Rural Buyers With Not-So-Good Credit

The U.S. auto market continues to struggle as consumers cut back on big-ticket purchases in an effort to save money amid soaring costs, an ongoing...
Source: Investor's Business Daily: BUSINESS | 23 Sep 2008 | 12:57 am

Business Briefs - Monday

AutoZone misses, adds new stores. The car parts retailer said Q4 EPS rose 20% to $3.88, missing views by 2 cents. Revenue gained 10% to $2.21 bil,...
Source: Investor's Business Daily: BUSINESS | 23 Sep 2008 | 12:57 am

Trends & Innovations - Monday

Texting hot line can help children
Source: Investor's Business Daily: BUSINESS | 23 Sep 2008 | 12:57 am

In Brief - Monday

Sysco (SYY), a food distributor, said its board approved a buyback of 20 mil shares. It had about 3 mil shares remaining under a previous buyback...
Source: Investor's Business Daily: BUSINESS | 23 Sep 2008 | 12:57 am

Fears emerge over $700bn rescue

The dollar buckled, stocks tumbled and the price of oil jumped as the $700bn US government bail-out plan for the financial sector made slow progress in Washington and once-mighty Wall Street names turned to Japan to safeguard their future
Source: FT.com - US homepage | 23 Sep 2008 | 12:38 am

Banks being tighter with their credit

Credit card limits, which banks were until recently encouraging their customers to expand, have now taken a u-turn. Banks cut credit limits for their personal and business credit card customers by a record NZ$1.635 billion, or...
Source: New Zealand Herald - Business | 22 Sep 2008 | 11:45 pm

Krawcheck departure sparks Citi shake-up

Sallie Krawcheck, the head of Citigroup's wealth management unit, is to leave the US financial services group after rejecting an offer by chief executive Vikram Pandit to take a back seat role in the division
Source: FT.com - US homepage | 22 Sep 2008 | 11:36 pm

Wrangle on US rescue oversight intensifies

The political fight over the Bush administration's financial rescue plan intensified on Monday as the two presidential candidates joined ­legislators in signalling ­concerns about the $700bn package
Source: FT.com - US homepage | 22 Sep 2008 | 11:17 pm

FSA to turn focus on City's bonus billions

The billions of pounds paid out in bonuses to City workers each year could come increasingly with strings attached if the Financial Services Authority (FSA) gets its way.
Source: Latest Business News from Times Online | 22 Sep 2008 | 11:00 pm

Living well on the cheap: how to share, swap, save, scrimp ... and still have a good time

FASHION
Source: Latest Business News from Times Online | 22 Sep 2008 | 11:00 pm

UAE's $13.6bn funding to ease squeeze$

The United Arab Emirates' central bank has set up a $13.6 billion ($£7.34 billion) emergency lending facility, aimed at easing a credit squeeze threatening the region's property boom.
Source: Latest Business News from Times Online | 22 Sep 2008 | 11:00 pm

Mikhail Prokhorov pays $500m for half of Renaissance$

A Russian billionaire swooped to buy 50 per cent of one of the country's largest investment banks yesterday.
Source: Latest Business News from Times Online | 22 Sep 2008 | 11:00 pm

Why our banks aren't like the US ones

It's natural for New Zealand investors to get jittery as we watch big multinational banks fold like dominoes on Wall St. However, the editors of banking and finance website interest.co.nz reckon we have no cause for concern. They...
Source: New Zealand Herald - Business | 22 Sep 2008 | 11:00 pm

Currency: Kiwi strong against greenback

The New Zealand dollar rose to fresh three-week highs against the greenback as the US currency fell broadly, weighed down by worries about the fiscal impact of the US government's US$700 billion ($1.03 trillion) bailout plan. From...
Source: New Zealand Herald - Business | 22 Sep 2008 | 10:50 pm

Last 2 investment banks throw in towel

Goldman Sachs and Morgan Stanley have become bank holding companies, which means they will now face more government regulation. They won't be able to take as many risks, and they'll make less money, too. Jeremy Hobson reports.
Source: Marketplace | 22 Sep 2008 | 10:33 pm

Plea to extend shorting ban

More companies in the UK and the US have been appealing to regulators for protection from short selling after the practice was banned or restricted for banks and other financial stocks in many countries last week
Source: FT.com - US homepage | 22 Sep 2008 | 10:30 pm

NZ stocks: Market weaker, following US equities down

New Zealand shares dropped back in early trading, once again taking their lead from the United States where stock prices tumbled. Investors on Wall Street were worried a proposed US$700 billion ($1.03 trillion) bailout for the...
Source: New Zealand Herald - Business | 22 Sep 2008 | 10:15 pm

Biggest ever rise in oil price overnight

Oil prices spiked more than US$25 a barrel this morning - the biggest one-day price jump ever - as anxiety over the American government's US$700 billion bailout plan, a weak dollar and an expiring crude contract ignited a dramatic...
Source: New Zealand Herald - Business | 22 Sep 2008 | 10:10 pm

Oil price jumps $25 in a day

Crude oil prices jumped $25 a barrel – the largest one-day rise – as financial investors betting on falling oil prices were forced to cover their positions ahead of the expiry of the current benchmark futures contract
Source: FT.com - US homepage | 22 Sep 2008 | 10:05 pm

Money market funds suffer huge outflows

Money market funds in the US suffered an estimated $197bn of net outflows last week as confidence in their safe-haven status weakened after one fund "broke the buck" and others closed
Source: FT.com - US homepage | 22 Sep 2008 | 9:57 pm

Here's How to Double Your Nest Egg (Cover Story)

Think it's impossible in today's market? Here are strategies that work.

Source: SmartMoney.com | 22 Sep 2008 | 9:09 pm

VIX Index of U.S. Stock Option Prices Advances 5.5% to 33.85

Source: Bloomberg - All Podcasts | 22 Sep 2008 | 8:39 pm

Stocks Slammed as Oil Surges

Lingering questions over a federal bailout for the nation's bad debt left traders bearish on equities.

Source: SmartMoney.com | 22 Sep 2008 | 8:28 pm

Crude ETFs Benefit From Falling Dollar (Daily ETF Wrap-Up)

Investors flock to crude as U.S. dollar loses value on proposed price tag of bailout plan.

Source: SmartMoney.com | 22 Sep 2008 | 8:27 pm

Five Best Cities for Job Hunting (Deal of the Day)

Looking for work? These five cities are bucking the national trend, and hiring workers.

Source: SmartMoney.com | 22 Sep 2008 | 8:24 pm

Economic worries weigh on the young

As recent college graduates and current students begin to deal with "real world" challenges, they're also getting ready to head to the polls this November. Sean Cole reports on what they want from the next administration.
Source: Marketplace | 22 Sep 2008 | 8:21 pm

Bailout would take away lots of change

Commentator and economist Robert Shapiro says the $700 billion bailout is going to amass so much debt that it won't be possible for the next president to pursue some of the key programs he's promised.
Source: Marketplace | 22 Sep 2008 | 8:21 pm

Bailout's rules and processes are key

With the bailout plan, we're being asked to take what the government's doing on faith. That seems a bit risky with $700 billion on the line. So, Kai Ryssdal called Jay Light, the Harvard Business School Dean, to get his thoughts.
Source: Marketplace | 22 Sep 2008 | 8:21 pm

Foreign banks may be in bailout line too

Treasury Secretary Paulson wants the bailout to be open to all banks with "significant" operations in the United States. That could mean American taxpayers may wind up bailing out more foreign banks than American ones. Stephen Beard reports.
Source: Marketplace | 22 Sep 2008 | 8:21 pm

Raising $700 billion won't be cheap

Where's the government going to come up with $700 billion to buy all the bad assets from banks? It'll borrow it, mostly by selling short-term Treasury bonds. But there could be some long-term consequences for the economy. John Dimsdale reports.
Source: Marketplace | 22 Sep 2008 | 8:21 pm

For bailout, Congress is in the details

The $700 billion bailout plan proposed by Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke is now in the hands of Congress. Maya MacGuineas of the Committee for a Responsible Federal Budget tells Kai Ryssdal she expects the bill to gain in size.
Source: Marketplace | 22 Sep 2008 | 8:21 pm

Lever House Flips $26 Burgers Even in Credit Crisis

Source: Bloomberg - All Podcasts | 22 Sep 2008 | 7:48 pm

Frank Sees Congress Passing Bank Rescue Within Two Weeks

Source: Bloomberg - All Podcasts | 22 Sep 2008 | 7:25 pm

Blog: Bailout reaction: Sell America

Source: L.A. Times - Business | 22 Sep 2008 | 7:24 pm

Some Value Funds Avoided Worst Financials (Ticked Off)

Whether lucky or good, some large-cap-value fund managers avoided worst financials.

Source: SmartMoney.com | 22 Sep 2008 | 7:08 pm

Today's 3 Picks: MS, MSFT, WM (Market Movers)

Morgan Stanley converts. Microsoft flexes repurchasing power. WaMu's slide continues.

Source: SmartMoney.com | 22 Sep 2008 | 6:26 pm

Sowanick Favors Commodities, Gold; Avoids Long-Term Debt

Source: Bloomberg - All Podcasts | 22 Sep 2008 | 5:45 pm

Sayonara, Sallie

Since the credit crisis began last summer, we've seen this sentence one too many times:

"One of the highest-profile women on Wall Street will step down from her position."

And yet we write it again. Citigroup's Sallie Krawcheck, one of the highest-profile women on Wall Street, will step down, according to the Wall Street Journal. She heads Citigroup's wealth-management unit, which is being moved into the bank's institutional group as a part of a broad restructuring.

The circumstances and timing of her departure are still unknown, although the Journal does report that Krawcheck does not have another job lined up. Citigroup has had a number of high-level departures since Vikram Pandit stepped into the chief executive spot late last year.

Krawcheck was recruited by former chief executive Sandy Weill in 2002 to run the Smith Barney business. She rose to become the bank's chief financial officer for three years until 2007, when she was moved to the head of Citi's wealth-management business as part of an overhaul of the bank's top ranks.

This is just the latest in a string of senior-ranking female departures on Wall Street. Last November, Zoe Cruz was asked to resign from her post as co-president of Morgan Stanley after the department she oversaw made a series of disastrous subprime trades.

And then in June, Lehman fired its chief financial officer Erin Callan after investors raised questions about the bank's financial statements. Lehman's bankruptcy filing early last week is seen by some as vindication for Callan.

With Krawcheck out, there are few women left within the top ranks of any of the major financial firms. Of course, as this credit crisis continues to play out, there are fewer and fewer firms left on Wall Street at all.

Related Links
Helicopter Ben Strikes Again
Looking for a Few Good C.E.O.'s
The End of Lehman


Source: Portfolio.com: Top 5 | 22 Sep 2008 | 5:30 pm

Barclay's Pond Sees Treasury Yields `Heading Higher'

Source: Bloomberg - All Podcasts | 22 Sep 2008 | 5:25 pm

Brown Brothers' Browne Says Fed Infusion Weakens Dollar

Source: Bloomberg - All Podcasts | 22 Sep 2008 | 5:08 pm

Levitt Sees Need for Oversight of Bank Rescue Plan

Source: Bloomberg - All Podcasts | 22 Sep 2008 | 4:54 pm

The Shears are Out

After the details of the Treasury Department's $700 billion bailout get hammered out and Congress sends legislation to the Oval Office for signature, after November's election, after January's inaugural ceremonies, after a new cabinet gets picked, and after the new Congress convenes, Washington can turn to the next item of business for the U.S. financial sector: new regulation.

Already, Wall Street has emerged in a new shape. The five largest investment banks at the start of this year are no longer investment banks. With news that Goldman Sachs and Morgan Stanley are becoming bank holding companies, the era of white-shoe investment firms dominating Wall Street is officially over.

But what about hedge funds? That influential but unregulated piece of the financial puzzle remains somewhat obscured by all the rage over the banks' monstrously bad bets.

Under new regulation, Morgan, Goldman, and Merrill Lynch will be forced to reduce their leverage substantially. Hedge funds still enjoy all the freedom in the world to risk their capital with as much leverage as they want. But because their investors are mostly institutions and not innocent average Joes, this alternative asset class has so far escaped the wrath of Washington.

Of course, being unregulated is no guarantee of success. Plenty of hedge funds have met the same fate as Lehman since this credit crisis began, although without the technicality of the bankruptcy filing.

And many of the funds that shot up with leverage in the same drug-addicted way that the investment banks did are also now at great risk of failure. The economist Nouriel Roubini predicts that the next phase in this credit crisis will be what amounts to a run on the bank at highly levered hedge funds.

"Hundreds of smaller, younger funds that have taken excessive risks with high leverage and are poorly managed may collapse," he writes in today's Financial Times. "A massive shake-out of the bloated hedge fund industry is likely in the next two years."  

The hedge fund industry has defied such predictions in the past and they could well do so again this time. In fact, the death of the investment bank could mean opportunity for the hedge fund. It's hard to imagine a time when using debt to bolster returns is opportunistic, but Wall Street has a short memory, just like investors do. When that time comes, hedge funds will be positioned to take on the risk that their investment banking counterparties cannot.

But it's more likely that hedge funds will be swept up in the forthcoming regulation overhaul from Washington, which will undoubtedly come under either a Republican or Democratic administration. Under the Paulson bailout plan, hedge funds may also be able to offload their bad debts to the government, which essentially lets them reap the benefits of a government rescue without having to abide by its regulations. That will surely spark plenty of debate in the months to come.

Wall Street doesn't have much of a leg to stand on in a fight against greater regulation. But the hedge fund industry won't surrender to Capitol Hill without a battle.

Related Links
Ripping Out a Hedgie
Small Foundations Get Adventurous
Hedge Fund Managers Not Earning Their Keep


Source: Portfolio.com: Top 5 | 22 Sep 2008 | 4:30 pm

Medical Discount Plans Rarely Offer Great Deals (Rip-Off of the Week)

Medical discount plans may sound like a great deal. But there are better alternatives.

Source: SmartMoney.com | 22 Sep 2008 | 3:47 pm

Soss Says U.S. Rescue Plan Will Help Taxpayers Over Time

Source: Bloomberg - All Podcasts | 22 Sep 2008 | 3:40 pm

Global market rally ends as lack of bailout details unsettle US investors

The rally in global stocks came to an abrupt end as US shares dropped, paring Friday’s record gains as investors waited for more details of the US government’s planned $700bn bank bailout.
Source: Telegraph Business | 22 Sep 2008 | 3:30 pm

Ultimate Cost of Bailout Could Be Capitalism (Tradecraft)

The ultimate cost of the government bailout could be capitalism itself.

Source: SmartMoney.com | 22 Sep 2008 | 3:23 pm

Hutton says coal-fired power stations key to energy security

Britain is likely build more coal-fired power stations under a controversial move that John Hutton, the business and enterprise secretary, said was necessary to avoid serious energy shortages over the next decade.
Source: Telegraph Business | 22 Sep 2008 | 3:02 pm

Strange Market Makes for Strange Bedfellows (Tradecraft)

With Google and gold all but trading in lockstep, I'm heading for the sidelines.

Source: SmartMoney.com | 22 Sep 2008 | 2:37 pm

Boeing Price Estimate Cut to $75 From $93 at Merrill Lynch

Source: Bloomberg - All Podcasts | 22 Sep 2008 | 1:55 pm

Financial crisis: Alistair Darling admits Britain will fall into dangerous debt

Alistair 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

Financial crisis: Alistair Darling tells Labour conference Government borrowing will soar

Alistair 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

London shares mark time as investors await details of US bailout

London 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

We're All Banks Now

The 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.

The decisions by Goldman Sachs and Morgan Stanley to convert to bank holding companies, regulated by the Federal Reserve instead of the Securities and Exchange Commission, is indeed an epochal moment.

It is the final nail in the coffin of the Glass-Steagall Act, the 1933 law that split investment banks from commercial banks. And it is a sign that the price of federal help in navigating through the credit storm will be increased regulation.

More important, it means that the Wall Street as a huge financial casino, where brash cowboys place outsize bets in the hopes of rich year-end bonuses, is over. No more big, swinging you-know-what. Banking will become more conservative.

"The last two big investment banks have traded in their Ferrari-like business models to become Buick-like bank holding companies," says Jeffrey Goldfarb on Breakingviews.com.

Goldman and Morgan Stanley were the last independent investment banks left after the collapses of Bear Stearns and Lehman Brothers and the sale of Merrill Lynch.

The firms took the proactive steps themselves, the New York Times reports, even as the Bush administration and congressional leaders are in a negotiations over a $700 billion bailout plan for troubled financial assets.

Becoming a bank holding company will mean that both firms will need to sharply reduce their leverage, or debt, to come under regulatory compliance. The firms have already started that process, but a further throttling down will be needed. Morgan Stanley has $1 of capital for nearly every $30; Bank of America's ratio is less than 1 for 11.

And while that may mean greater stability, it will also mean smaller profits in the future.

The firms will also be able to take deposits and tap the Fed's credit facility. They will also be able to change the accounting on some of their assets, being able to hold them to maturity instead of marking to the current market value.

"While accelerated by market sentiment, our decision to be regulated by the Federal Reserve is based on the recognition that such regulation provides its members with full prudential supervision and access to permanent liquidity and funding," said Lloyd Blankfein, chief executive of Goldman Sachs. "We believe that Goldman Sachs, under Federal Reserve supervision, will be regarded as an even more secure institution with an exceptionally clean balance sheet and a greater diversity of funding sources."

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. 

What comes next? The trick for the two firms will be preserving what they do best while doing the opposite: becoming more bureaucratic and more averse to risk.

That won't be easy. And it leaves many opportunities on the table for hedge funds, which don't have those restraints, assuming that they can avoid the regulatory hot light in the coming months.

Related Links
Parsing Goldman Sachs: All Hail Market Sentiment
Rumor Sourcing of the Day
Seeds of Lehman's Destruction


Source: Portfolio.com: Top 5 | 22 Sep 2008 | 12:00 pm