Can Rentek Catch A Break? (RTK)

Source: 24/7 Wall St. | 8 Oct 2008 | 12:22 pm

Retailers report weak September sales (AP)

AP - Americans scaled back their spending even more in September, resulting in weak sales for many retailers, as already skittish consumers grappled with the financial meltdown that's spreading around the globe.

Source: Yahoo! News: Business | 8 Oct 2008 | 12:18 pm

European shares claw back losses

European stock markets recover some of their hefty early losses following co-ordinated rate cuts in the UK, Europe and the US.
Source: BBC News | Business | World Edition | 8 Oct 2008 | 12:16 pm

Monsanto quarterly loss shrinks, record sales seen

KANSAS CITY, Missouri (Reuters) - Giant agricultural technology company Monsanto Co posted on Wednesday a smaller fourth-quarter loss on record revenues, as herbicide and seed sales climbed.

Source: Reuters: Business News | 8 Oct 2008 | 12:15 pm

Fed, central banks cut rates

LONDON/NEW YORK (Reuters) - Central banks around the world cut interest rates in unison on Wednesday in a joint response to the global financial crisis, giving a boost to battered stock markets.

Source: Reuters: Business News | 8 Oct 2008 | 12:14 pm

Fed, central banks cut rates (Reuters)

Reuters - Central banks around the world cut interest rates in unison on Wednesday in a joint response to the global financial crisis, giving a boost to battered stock markets.

Source: Yahoo! News: Business | 8 Oct 2008 | 12:14 pm

Central banks launch rate cut

Central banks around the world launched an emergency 0.5% cut in interest rates to tackle the global financial crisis that has seen banks refuse to lend to each other and a slowdown in economic activity. The euro and sterling rallied on the news, while equities rebounded and gold slipped back
Source: FT.com - US homepage | 8 Oct 2008 | 12:10 pm

Central banks in shock rate cut

The US Federal Reserve, European Central Bank and Bank of England all cut interest rates.
Source: BBC News | Business | World Edition | 8 Oct 2008 | 12:07 pm

Wal-Mart September sales miss view; keeps forecast

NEW YORK (Reuters) - Wal-Mart Stores Inc reported a slightly lower-than-expected 2.4 percent rise in September sales at U.S. stores open at least a year on Wednesday, but kept its forecast for third-quarter earnings.

Source: Reuters: Business News | 8 Oct 2008 | 12:06 pm

Wal-Mart September sales miss view; keeps forecast (Reuters)

Reuters - Wal-Mart Stores Inc reported a slightly lower-than-expected 2.4 percent rise in September sales at U.S. stores open at least a year on Wednesday, but kept its forecast for third-quarter earnings.

Source: Yahoo! News: Business | 8 Oct 2008 | 12:06 pm

Nikkei dives 9.4 percent, biggest 1-day fall since '87

TOKYO (Reuters) - The Nikkei average plunged 9.4 percent on Wednesday, its biggest drop since the 1987 stock market crash, as growing fears of a global recession led investors to wipe $250 billion off the value of Tokyo shares.

Source: Reuters: Business News | 8 Oct 2008 | 12:06 pm

BlackBerry takes touch-screen world by Storm

Research in Motion Wednesday launched a new touch-screen version of its BlackBerry blockbuster, turning the heat on rivals in the consumer segment ahead of the crucial holiday season.

Source: MarketWatch.com - Top Stories | 8 Oct 2008 | 12:03 pm

Bank of America prices $10 bln share offer at $22 a share

NEW YORK (MarketWatch) -- Bank of America Corp. priced its secondary offering of 455 million shares at $22 a share Tuesday to raise $10 billion for its acquisition of Merrill Lynch & Co. and buttress its balance sheet against deepening losses.

Source: MarketWatch.com - Top Stories | 8 Oct 2008 | 12:02 pm

World stocks down despite central bank cuts

LONDON (Reuters) - Stock markets across the world were lower on Wednesday despite coordinated interest rate cuts by world central banks designed to ease fears about the worst financial crisis in nearly 80 years.

Source: Reuters: Business News | 8 Oct 2008 | 12:01 pm

World stocks down despite central bank cuts (Reuters)

Reuters - Stock markets across the world were lower on Wednesday despite coordinated interest rate cuts by world central banks designed to ease fears about the worst financial crisis in nearly 80 years.

Source: Yahoo! News: Business | 8 Oct 2008 | 12:01 pm

Fed: Emergency cut

The Federal Reserve, working in coordination with other central banks worldwide, enacted an emergency interest rate cut on Wednesday.

Source: Business and financial news - CNNMoney.com | 8 Oct 2008 | 12:01 pm

Oil prices slip on global woes

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 8 Oct 2008 | 11:58 am

Europe Markets: Europe shares rebound off lows after global interest-rate cuts

European shares erase much of their early slump, reacting to a series of interest-rate cuts by the Federal Reserve and other major central banks.

Source: MarketWatch.com - Top Stories | 8 Oct 2008 | 11:55 am

Costco profit up 7 percent

NEW YORK (Reuters) - Costco Wholesale Corp reported a higher quarterly profit on Wednesday as price-conscious shoppers headed to the discount retailer's warehouse locations for bargains on food and gasoline.

Source: Reuters: Business News | 8 Oct 2008 | 11:52 am

MarketWatch First Take: Global economy needs more than rate cuts

This is not good, folks. The coordinated cuts from world's central banks sends a powerful message, but it may not be the one investors want to hear.

Source: MarketWatch.com - Top Stories | 8 Oct 2008 | 11:51 am

The Fed: Fed, major central banks slash rates in coordinated easing

The U.S. Federal Reserve, the Bank of England, the European Central Bank and other major central banks all moved to slash key interest rates Wednesday as they struggle to head off global financial turmoil that has threatened to throttle world economic growth.

Source: MarketWatch.com - Top Stories | 8 Oct 2008 | 11:48 am

Wal-Mart (WMT) September Sales A Bit Light, Who Cares?

Wall St. expected Wal-Mart (WMT) same-store sales to be up 2.5% in September. They only rose 2.4%. It was a brilliant showing. Almost all data from retail associations said sales across the industry were a wreak last month.

Wal-Mart's revenues were up almost 5% to $22.5 million. Most large store chains would lay down their lives for that.

International sales were up over 7% to $9.4 million.

The most impressive figures of all were from super-discount division Sam's Club where revenue moved up 8%

The news is evidence that the consumer is still in the market buying essentials, but refuses to spend more than he absolutely has to. This would bode ill for stores that sell anything at a premium. Macy's (M) better get ready for a hard holiday season.

Wal-Mart missed numbers? Not by any sane standards.

Douglas A. McIntyre

Source: 24/7 Wall St. | 8 Oct 2008 | 11:47 am

Indications: U.S. stock futures rise on coordinated rate cuts

U.S. stock futures turned higher Wednesday after the Federal Reserve and other central banks stepped in with coordinated half-point rate cuts in a bid to stem the credit crisis that had locked up financial markets.

Source: MarketWatch.com - Top Stories | 8 Oct 2008 | 11:47 am

Wal-Mart sales boosted by food and clothing

Wal-Mart Stores reported September sales Wednesday that were at the low-end of of its own forecast as its mostly paycheck-to-paycheck customers continued to pull back on discretionary purchases other than clothing and groceries.

Source: Business and financial news - CNNMoney.com | 8 Oct 2008 | 11:45 am

Rescue plan for two banks' savers

Savings bank ING Direct is buying up more than £3bn of deposits held by British savers with two Icelandic-owned banks.
Source: BBC News | Business | World Edition | 8 Oct 2008 | 11:45 am

Top Pre-Market Analyst Upgrades (AMAG, ANDE, BAC, BMC, CDNS, CTXS, IPAR, JEF, MDR, MYGN, NUVA, SYMC)

These are some of the top pre-market analyst upgrades we are seeing this Wednesday morning:

• AMAG Pharmaceuticals (AMAG) Started as Overweight at JPMorgan
• Andersons (ANDE) Started as Outperform at Oppenheimer
• Bank of America (BAC) Raised to Market Perform at KBW
• BMC Software (BMC) Raised to Neutral at JPMorgan
• Cadence Design Systems (CDNS) Raised to Overweight at JPMorgan
• Citrix Systems (CTXS) Raised to Overweight at JPMorgan
• Inter Parfums (IPAR) Raised to Buy at Piper Jaffray
• Jefferies (JEF) Raised to Market Perform at KBW
• McDermott International (MDR) Started as Buy at American Tech Research
• Myriad Genetics (MYGN) Started as Outperform at Oppenheimer
• NuVasive (NUVA) Started as Overweight as JPMorgan
• Symantec (SYMC) Raised to Overweight at JPMorgan

Jon C. Ogg
October 8, 2008

Source: 24/7 Wall St. | 8 Oct 2008 | 11:43 am

Tunnel fire hits Eurotunnel traffic

The blaze in the Channel Tunnel last month cost Eurotunnel €22 million in lost revenues, the company revealed today.
Source: Latest Business News from Times Online | 8 Oct 2008 | 11:38 am

Top Pre-Market Analyst Downgrades (AUTH, DD, HST, RNWK, RLH)

These are some of the top individual analyst downgrades we are seeing very early this Wednesday morning:

• AuthenTec (AUTH) Cut To Neutral at JPMorgan
• DuPont (DD) Cut to Hold at BB&T Capital
• Host Hotels (HST) Cut To Market Perform at KBW
• RealNetworks (RNWK) Cut to Sell at Piper Jaffray
• Red Lions Hotels (RLH) Cut to Neutral at Baird

Jon C. Ogg
October 8, 2008

Source: 24/7 Wall St. | 8 Oct 2008 | 11:34 am

Europe shares pare losses after rate move

European equity markets pared early losses on Wednesday after the world's central banks unveiled co-ordinated rate cuts to quell the deepening financial crisis
Source: FT.com - US homepage | 8 Oct 2008 | 11:33 am

Earnings Watch: Updates, advisories and surprises

A roundup of the latest corporate earnings reports and what companies are saying about future quarters.

Source: MarketWatch.com - Top Stories | 8 Oct 2008 | 11:31 am

London Markets: British stocks rebound after global rate cuts

Shares in London skid to a level not seen in nearly five years on Wednesday, with banks falling sharply even after the U.K. government pledged to shore up the sector with a 50 billion pound capital injection.

Source: MarketWatch.com - Top Stories | 8 Oct 2008 | 11:26 am

Text of decision from Fed, other central banks

Text of the statement from the Federal Reserve and other central banks.

Source: MarketWatch.com - Top Stories | 8 Oct 2008 | 11:22 am

Citigroup Cuts Ford (F) And GM (GM) To "Sell"

After months of suffering indignities and falling sales, Citigroup cut shares in Ford (F) and GM (GM) to sell. It dropped it price target for Ford to $2.50 and GM's to $6.

According to MarketWatch, "After maintaining a cautious stance on automaker stocks throughout the past several months, the risk-reward balance has tilted decidedly negative with the continued tightening of global credit conditions," the broker said

Douglas A. McIntyre

Source: 24/7 Wall St. | 8 Oct 2008 | 11:14 am

Stock futures leap as central banks slash rates (Reuters)

Reuters - Stock index futures turned positive on Wednesday after the Federal Reserve slashed interest rates in concert with other global central banks to calm markets.

Source: Yahoo! News: Business | 8 Oct 2008 | 11:10 am

Stock futures leap as central banks slash rates

NEW YORK (Reuters) - Stock index futures turned positive on Wednesday after the Federal Reserve slashed interest rates in concert with other global central banks to calm markets.

Source: Reuters: Business News | 8 Oct 2008 | 11:10 am

Stock futures leap as central banks slash rates (Reuters)

Reuters - Stock index futures turned positive on Wednesday after the Federal Reserve slashed interest rates in concert with other global central banks to calm markets.

Source: Yahoo! News: Business | 8 Oct 2008 | 11:10 am

Fed orders emergency rate cut to 1.5 percent

WASHINGTON -- The Federal Reserve, acting in coordination with other global central banking authorities, cut a key U.S. interest rate by half a percentage point Wednesday to steady an economy teetering on a collapse reminiscent of the 1929 stock market crash.

Source: L.A. Times - Business | 8 Oct 2008 | 11:10 am

UK launches bank bail-out

Britain's largest banks are to be part-nationalised after the government took the momentous decision to pump tens of billions of pounds of public money into the sector to avert a banking collapse
Source: FT.com - US homepage | 8 Oct 2008 | 11:08 am

Central banks make emergency rate cuts

The Bank of England made an emergency half-point rate cut today, joining four other central lenders in reducing borrowing costs in another attempt to restore global financial stability.
Source: Latest Business News from Times Online | 8 Oct 2008 | 11:06 am

Currencies: Global equity sell-off sends yen soaring

The British pound erases earlier losses against the U.S. dollar, bouncing back in choppy trade after the British government announces a 50 billion pound ($83 billion) plan to re-capitalize and shore up the nation’s ailing banking sector.

Source: MarketWatch.com - Top Stories | 8 Oct 2008 | 11:01 am

Rescue plan for UK banks unveiled

The UK government announces the details of a £50bn ($88bn) rescue plan for the UK banking system.
Source: BBC News | Business | World Edition | 8 Oct 2008 | 10:53 am

Extra help for Icesave customers

Chancellor Alistair Darling says he will ensure all UK savers with the closed Icelandic internet bank Icesave get all their money back.
Source: BBC News | Business | World Edition | 8 Oct 2008 | 10:52 am

Google (GOOG) Tries To Make Money On YouTube, Again (AAPL)(AMZN)

Source: 24/7 Wall St. | 8 Oct 2008 | 10:40 am

UK government steps in to help banks

The British government announced a 50 billion pounds ($87.5 billion) plan on Wednesday to partly nationalize major banks, with taxpayers taking stakes in a bid to shore up a financial...
Source: Infocious RSS raw feed - channel BNewsBusiness | 8 Oct 2008 | 10:36 am

Land of Leather directors defer pay as profits dive 88%

Land of Leather's four directors and some senior managers have agreed to defer taking part of their salaries during the current difficult economic climate after the furniture retailer's pre-tax profits plunged by 88 per cent.
Source: Latest Business News from Times Online | 8 Oct 2008 | 10:32 am

Pfizer's (PFE) Little White Lie

US drug companies have a habit of misleading consumers and even physicians. It is a game they have played for decades. Usually they do not get caught. When they do a great cry goes up for reforming drug trials at the FDA and closer monitoring of pharma marketing practices.

Pfizer (PFE) is the latest alleged cheater. It could not leave well enough on sales of one of its most popular drugs so it may have decided to bend the rules.

According to The Wall Street Journal, "Pfizer Inc. marketers urged the suppression of medical studies that reached unfavorable conclusions about the effectiveness of the company's big-selling drug Neurontin, according to internal Pfizer documents submitted in a lawsuit against the company." It amounted to a cover-up which probably began with the company consulting with Richard Nixon for advice.

As might be expected, Pfizer is fighting charges that it did anything wrong. It did not try to influence medical research. It did not burn documents of delete e-mails. No doctors were given envelops filled with $100 bills.

Pfizer's problem is that no one will believe its defense. It has turned out that the alteration of drug testing or suppression of trial data has happened too many times before.

The trial information on vitamins and aspirin may even be wrong. Where was the FDA when those products came out?

Douglas A. McIntyre

Source: 24/7 Wall St. | 8 Oct 2008 | 10:30 am

MarketAxess Announces Monthly Volume Statistics for September 2008

NEW YORK, Oct. 8 /PRNewswire-FirstCall/ -- MarketAxess Holdings Inc. (Nasdaq: MKTX), the operator of a leading electronic trading platform for U.S. and European high-grade...
Source: Infocious RSS raw feed - channel BNewsBusiness | 8 Oct 2008 | 10:30 am

SectorWatch.biz Issues MarketStats for Healthy and Organic Companies ORGC, DF, WFMI, LWAY, COIN, and TOF

IRVINE, Calif., Oct. 8 /PRNewswire/ -- SectorWatch.biz announces the availability of MarketStats for organic food companies and the release of articles and message boards...
Source: Infocious RSS raw feed - channel BNewsBusiness | 8 Oct 2008 | 10:30 am

Oil prices tumble close to one-year lows

Oil prices sank close to one-year low points on Wednesday as plunging stock markets generated fresh fears of slowing economic growth and in turn weaker global demand for energy, traders...
Source: Infocious RSS raw feed - channel BNewsBusiness | 8 Oct 2008 | 10:23 am

Hop off the 'beat the market' bandwagon

Question: I have had several money managers over the years from Merrill Lynch, to UBS to currently Wachovia. I am paying a fee of about 1% on average but am sure there are other fees that I don't know about. I'm not sure this is working. What should I do?

Source: Business and financial news - CNNMoney.com | 8 Oct 2008 | 10:23 am

Oil falls on economic slowdown fears

Investor concerns that the U.S. credit crisis was enveloping the globe and will hurt demand for crude drove oil prices down Wednesday. For people worldwide worried about the erosion of...
Source: Infocious RSS raw feed - channel BNewsBusiness | 8 Oct 2008 | 10:19 am

BMW reports plunge in sales, blames financial crisis

German carmaker BMW said Wednesday that the financial crisis led to a 15-percent plunge in unit sales in September, with deliveries in the United States alone dropping by more than a...
Source: Infocious RSS raw feed - channel BNewsBusiness | 8 Oct 2008 | 10:14 am

What A CDS Exchange Means To Debt Issuers & To You

Source: 24/7 Wall St. | 8 Oct 2008 | 10:14 am

Asian stock markets tumble after selloff in Japan

SHANGHAI -- Led by a massive selloff in Japan, Asian stock markets tumbled today in reaction to the persistent gloom on Wall Street and the growing realization that the global credit crunch and economic...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 8 Oct 2008 | 10:14 am

Asian stock markets tumble after selloff in Japan

SHANGHAI -- Led by a massive selloff in Japan, Asian stock markets tumbled today in reaction to the persistent gloom on Wall Street and the growing realization that the global credit crunch and economic downturn will hammer export companies.

Source: L.A. Times - Business | 8 Oct 2008 | 10:14 am

Will China Save The US Financial System

When it comes to the potential failure of the US economy and banking system, China has an especially large dog in the fight. The central government and a number of large banks own hundreds of billions of dollars in US Treasury notes and paper from companies including Fannie Mae (FNM) and Freddie Mac (FRE). An American disaster could turn into one for China as well.

According to Reuters, "speculation is swirling that Beijing could also chip in with a vote of confidence by pledging to hold onto its vast dollar assets and even buy more to help fund the massive bailout of the U.S. financial system now under way."

The communists have become capitalists and they would like the transition to work out.

While China's motives may be selfish, they may work. One of the greatest fears within the US financial system is that the government of the world's most populated company will succumb to despair about the American banking system and dump securities to save itself. Since US shareholders are in the midst of selling off US stocks, even at historically low valuations, a Chinese move to get out before things get worse is not out of the question.

If China gives the US economy a thumbs up, it may be one of the keys to stabilizing the markets.

Douglas A. McIntyre

Source: 24/7 Wall St. | 8 Oct 2008 | 10:11 am

Treasury: no British savers will lose cash from Icesave collapse

The Treasury today guaranteed that no British customers of Icesave would lose their savings after the Icelandic online bank collapsed yesterday.
Source: Latest Business News from Times Online | 8 Oct 2008 | 10:10 am

FINANCE GUY Helps Businesses Cut Costs and Increase Cash Flow

Businesses can make it through tough times by focusing and downsizing payroll costs without downsizing future growth potential ORLANDO, Fla., Oct. 8 /PRNewswire/ --...
Source: Infocious RSS raw feed - channel BNewsBusiness | 8 Oct 2008 | 10:10 am

Linens 'n Things to hasten store closings: report

(Reuters) - Bankrupt U.S. home furnishings retailer Linens 'n Things sought to speed up closing its remaining 371 stores and begin its going-out-of-business sales to avoid competition from...
Source: Infocious RSS raw feed - channel BNewsBusiness | 8 Oct 2008 | 10:08 am

Linens 'n Things to hasten store closings: report (Reuters)

Reuters - Bankrupt U.S. home furnishings retailer Linens 'n Things sought to speed up closing its remaining 371 stores and begin its going-out-of-business sales to avoid competition from other retail failures, Bloomberg said.
Source: Yahoo! News: Business | 8 Oct 2008 | 10:08 am

Linens 'n Things to hasten store closings: report

(Reuters) - Bankrupt U.S. home furnishings retailer Linens 'n Things sought to speed up closing its remaining 371 stores and begin its going-out-of-business sales to avoid competition from other retail failures, Bloomberg said.

Source: Reuters: Business News | 8 Oct 2008 | 10:08 am

Fire hits Eurotunnel's earnings

Eurotunnel says it lost 21m euros as a result of the fire in the Channel Tunnel which halted traffic last month.
Source: BBC News | Business | World Edition | 8 Oct 2008 | 10:08 am

Stock futures point to sharp losses on Wall St

PARIS (Reuters) - Stock index futures were sharply down on Wednesday as deepening fears that the credit crisis would make more victims and drag the global economy into recession sent...
Source: Infocious RSS raw feed - channel BNewsBusiness | 8 Oct 2008 | 10:06 am

Construction Advances on Oregon Wine Country's First Luxury Inn & Spa

The Allison's model room makes debut NEWBERG, Ore., Oct. 8 /PRNewswire/ -- A clear vision of Oregon wine country's first luxury inn and spa is quickly developing
Source: Infocious RSS raw feed - channel BNewsBusiness | 8 Oct 2008 | 10:00 am

The Stock Market In The Emergency Room, The Fed Cutting Rates To A Negative 2%

Source: 24/7 Wall St. | 8 Oct 2008 | 9:59 am

Banks volatile after government rescue plan

London equities fell sharply on Wednesday after sharp sell-offs in the US and Asia but banks were offered some hope by a government plan to part-nationalise the sector. The FTSE 100 fell 4.8 per cent or...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 8 Oct 2008 | 9:40 am

Darling unveils bank rescue

Britain's largest banks are to be part-nationalised after the government took the momentous decision to pump tens of billions of pounds of public money into the sector to avert a banking collapse.The scheme...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 8 Oct 2008 | 9:38 am

Sainsbury's silent on Hampton move

Shares in J Sainsbury were hit early on Wednesday despite better-than-expected trade, as ripples from the global financial crisis reached the UK supermarket group.Uncertainty about property tycoon Robert...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 8 Oct 2008 | 9:29 am

Robert Peston

Why bank shares are falling but HBOS is bucking the trend
Source: BBC News | Business | World Edition | 8 Oct 2008 | 9:28 am

Brown and Darling commit £500 billion for bank bailout

Gordon Brown and Alistair Darling set out a radical £500 billion package today to restore confidence in the UK banking sector and break the crippling logjam in credit markets.
Source: Latest Business News from Times Online | 8 Oct 2008 | 9:28 am

Shares tumble in black day for Asia markets

Japanese shares dropped 9.4 per cent their biggest one-day fall since 1987 in a grim day for Asia Pacific markets as fears deepened that more financial institutions would fail after the International...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 8 Oct 2008 | 9:13 am

Falls force Russian markets close

Sharp declines in share prices prompt the closure of Russia's two key stock markets
Source: BBC News | Business | World Edition | 8 Oct 2008 | 8:59 am

Iceland's biggest bank gets Swedish loan

Kaupthing, Iceland's biggest bank, received funding from Sweden as a smaller competitor was swallowed by emergency legislation, while the government negotiates a €4bn loan from Russia
Source: FT.com - US homepage | 8 Oct 2008 | 8:58 am

Britain Announces Bank Bailout Worth Hundreds of Billions

As European leaders continued to clash over measures to ease the financial crisis, Britain announced an $87 billion bailout for its banks.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 8 Oct 2008 | 8:56 am

Tokyo Shares Lose 9.4 Percent as Other Asian Markets Slide

Japanese stocks suffered their biggest one-day fall in more than 20 years as fear shook Asian markets and prompted a trading halt in Indonesia.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 8 Oct 2008 | 8:51 am

Indonesia, Russia exchanges suspend trade

Indonesia suspended share trading indefinitely while Russia's most liquid stock exchange, the rouble-denominated MICEX, suspended trade for two days after blue chips posted double-digit losses in the first...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 8 Oct 2008 | 8:46 am

Banks tumble after government rescue plan

London equities fell sharply on Wednesday after sharp sell-offs in the US and Asia but banks were offered some hope by a government plan to part-nationalise the sector. The FTSE 100 fell 5.6 per cent or...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 8 Oct 2008 | 8:28 am

Russia exchanges suspend trade

Russia's most liquid stock exchange, the MICEX <.MCX>, has suspended trade until Oct. 10 from 1105 local time (0705 GMT) on Wednesday, MICEX said after its index of liquid shares fell 14...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 8 Oct 2008 | 8:22 am

Moscow to pump $37bn into biggest state institutions

Russia stepped up efforts to tackle the financial crisis with a commitment to pump $37bn in long-term loans into its biggest state banks, amid signs that the turmoil was spreading to the real economy
Source: FT.com - US homepage | 8 Oct 2008 | 8:00 am

British government unveils massive financial rescue plan

LONDON The British government Wednesday unveiled a massive rescue plan for its ailing banking system after days of unrelenting bad news for the financial industry here.

Source: L.A. Times - Business | 8 Oct 2008 | 7:50 am

London shares dive on UK government rescue

Shares in London regained some ground this morning following a sharp 7 per cent fall after Royal Bank of Scotland's stock rebounded on its commitment to take part in "certain of the measures" in the Government's historic £50 billion plan.
Source: Latest Business News from Times Online | 8 Oct 2008 | 7:36 am

European consensus on rescue plan is elusive

EU finance ministers agree to boost bank deposit insurance but as discord continues, Britain plans its own rescue package.

The 27 finance ministers of the European Union agreed Tuesday to increase the amount of bank deposits insured by governments. But more extensive coordinated steps to address the spreading economic crisis remained elusive, and Britain launched its own plan to shore up its ailing banks.

Source: L.A. Times - Business | 8 Oct 2008 | 7:00 am

Big chains a headache for small drugstores

Independent shops that haven't been swallowed up are facing ruthless competition.

The pharmacy business in Southern California is cutthroat. Just ask John Tilley, the owner of four small drugstores in Downey.

Source: L.A. Times - Business | 8 Oct 2008 | 7:00 am

AIG fiddles while Wall Street burns

A week at the spa can ease the pain of a bailout for callous, overpaid executives.

When the going gets tough, the tough get pedicures.

Source: L.A. Times - Business | 8 Oct 2008 | 7:00 am

Keeping bank deposits safe may cost savers

Banks will have to pay more to shore up the government's depleted deposit insurance fund. That may result in higher fees and lower interest rates.

When it comes to the money in your bank account, security has a price. And it's going up.

Source: L.A. Times - Business | 8 Oct 2008 | 7:00 am

Federal Reserve to buy up short-term commercial debt

About $1.3 trillion in commercial paper will be eligible for purchase, senior officials say. The hope is to encourage financial firms to start lending again.

The Federal Reserve said Tuesday that it would become a lender of last resort to corporate America and signaled a possible interest rate cut, but the stock market nose-dived again as the financial crisis continued to defy the best efforts of policymakers.

Source: L.A. Times - Business | 8 Oct 2008 | 7:00 am

High-end restaurants on a tightrope of economic uncertainty

Celebrity chefs behind Melisse, Anisette, Craft and other deluxe dining spots try to lure recession-wary diners.

PEOPLE always have to eat, but do they have to dine out? That's the question Southern California's top chefs are facing after the last few weeks of grim economic news.

Source: L.A. Times - Business | 8 Oct 2008 | 7:00 am

EU agrees common action on banks crisis

European Union governments sought to put aside their differences on how to stop the financial whirlwind sweeping through Europe and announced agreement on a set of principles for rescuing troubled banks
Source: FT.com - US homepage | 8 Oct 2008 | 6:26 am

Snoopy Braves the Turbulent Skies (Today From Barron's)

This leading insurer has lots going for it -- like its undervalued stock.

Source: SmartMoney.com | 8 Oct 2008 | 5:57 am

MUFG says no plans to back out on Morgan Stanley

TOKYO (Reuters) - Mitsubishi UFJ Financial Group , Japan's top bank, said it has no plans to back out of its $9 billion investment in Morgan Stanley , even as the global market sell-off has sent shares of the U.S. firm sharply lower.

Source: Reuters: Business News | 8 Oct 2008 | 5:57 am

Currency: Dollar fluctuates in lower range

The New Zealand dollar fluctuated in a range today but was generally lower. After falling to US61.70c in the early hours of Tuesday morning the NZ dollar recovered but not to the levels prior to the plunge. It was US62.47c at...
Source: New Zealand Herald - Business | 8 Oct 2008 | 5:47 am

Citi seeks potential partners for Wachovia bid: report

(Reuters) - Citigroup Inc is looking for potential partners in its bid for Wachovia Corp , seeking to wrest the upper hand from Wachovia's other suitor Wells Fargo & Co , the Wall Street Journal said, citing people familiar with the matter.

Source: Reuters: Business News | 8 Oct 2008 | 5:34 am

Investing In Our Future

There has been little discussion about what $700 billion would buy if the federal government were not spending it on the bailout. Maybe we're too shell-shocked by this huge dollop of borrowed money to go through this exercise of "What if...?"

For the sake of argument, however, here is a short list of what $700 billion would buy in the realm of science and technology:

• Five complete Apollo space programs, which put 12 men on the moon between 1969 and 1972. Cost of Apollo program in 2005 dollars: $135 billion.


• 23 years of funding for the National Institutes of Health. The 2009 fiscal budget is $30 billion, the same as 2008.


• 259 years of funding for the Defense Advanced Research Projects Agency, an independent research agency within the Department of Defense that has funded some of America's major innovations, including key elements of the solid-state electronics revolution.


• 304 human genome projects at $2.3 billion apiece.


• 653 MacBook laptops fully loaded with software for every child on Earth between the ages of 4 and 18.


• 1,850 years of funding for the Department of Energy's National Renewable Energy Laboratory, which is on the front lines of developing alternative sources of energy. The lab's budget was increased in 2007 to $378.4 million, from $209.6 million in 2006.

I could go on, but you get the idea: Even a modest sliver of the Wall Street bailout could dramatically increase government support for research and development of science and technology in the U.S.

This may be exactly what we need right now, to pitch a little cash toward a major effort to support and speed up our non-defense national research-and-development expenditure—which now accounts for less than one-half a percentage point of G.D.P., the lowest in nearly 50 years.

Historically, human innovation has produced wonders and horrors, but more often than not dramatic new technologies have given the edge to nations, cultures, and civilizations that embrace them. Whether it was the invention of the wheel or of the microchip, those who failed to embrace science and technology tended to fail, or to be left behind.

This is why the next president should launch an initiative akin to John F. Kennedy's call to put a man on the moon—with a nod to Franklin Roosevelt's Works Progress Administration during the Great Depression.

The effort would employ not just Ph.D.'s, but workers of all levels of education and training for projects ranging from pure research to building things based on new technologies.

 Some innovations might be imminently practical, such as applying new computer systems and algorithms to managing the nation's infrastructure of air and ground traffic; applying technology to build green cars; and developing new materials for the thousands of highways and bridges in desperate need of upgrades.

If this sounds pie-in-the-sky in an era of crisis deficits, let me throw out another number. The entire Works Progress Administration program, which employed millions and festooned America with state-of-the-art roads, bridges, and dams during a massive global depression, cost about $11.5 billion between 1935 and 1941.

That's $159 billion in 2007 dollars for a stimulus that's not a one-time tax cut encouraging people to buy another iPod, but an investment in ideas and in capital assets. Not incidentally, it would also upgrade our deteriorating infrastructure—some of which hasn't been updated since the W.P.A. 70 years ago.

Tacked onto a $700 billion bailout—which is really $1.6 trillion when Fannie, Freddie, and the rest are added in—what's another $159 billion, if it's used to actually build things that will last, and will make the nation more efficient and competitive?

Call it the New Technology Initiative, or New Tech. The plan would articulate a few basic, but highly ambitious goals that would be determined by a series of meetings called by the president-elect. Attendees would represent a variety of points of view in science, technology, the environment, economics, labor, finance, and public policy; together they could set a national investment agenda.

Once the president has made his decisions and consulted with Congress and other leaders in the U.S., he might then engage world leaders. The U.S. would be in a position of leadership—for a change—on critical global crises such as lessening carbon-dioxide emissions, and ending the world's dependency on oil.

Some will howl that government is too incompetent and corrupt to handle such an initiative. But I can give you 700 billion reasons why it can't do worse than the private sector, which has brought the world to the brink of economic collapse.

There is no shortage of ideas. Despite little help from Washington for the past seven years, entrepreneurs across America have been developing technologies for everything from green fuels and novel drugs to new materials to build roads.

Some ideas won't work. Failure and waste will be part of the equation—as it always is, in private as well as public enterprises—although one critical element that may help temper this would be a leadership that inspires people to think beyond their personal gain, at least for a minute or two.

When Barack Obama and John McCain talk about change, let's hope it includes a realization that real change means a recommitment to creativity and adaptation. We have made many mistakes as a species in using technologies that ultimately proved dangerous, but what choice do we have other than trying to learn and adapt with new and improved technologies?

Much more than our economy is at stake—this is survival.Related Links
Government Hypocrisy in GSE Bailout?
Larry Summers
Should the Bailout Reduce Other Government Spending?


Source: Portfolio.com: Top 5 | 8 Oct 2008 | 4:00 am

No Yogi Bears

Christine Day, the recently appointed C.E.O. of Lululemon Athletica, exhibits the kind of optimism usually reserved for religious leaders and self-help gurus.

"Even the Great Depression only lasted a certain number of years!" she chirps, by way of justifying the company's expansion plans in the face of a retail climate going more sour by the day.

For those who aren't familiar with the budding specialty retailer from Canada, Lululemon is a purveyor of $90 yoga pants and $60 sports bras. Its stores have "guests" rather than customers and "educators" rather than employees. At the core of the brand's identity is a 31-point manifesto that includes such imperatives and affirmations as "dance, sing, floss, and travel"; " do one thing a day that scares you"; and, somewhat more oddly, "children are the orgasm of life."

In short, this is the type of company that would seem to be on the endangered-species list at a time when consumers are becoming less and less brand-centric and buying purely on price.

Investors appear to agree. The stock is down 60 percent since its high of $58 last October, underperforming peers like J. Crew, American Eagle, Urban Outfitters, or Gap for the period.

But if Lululemon breaks the mold of the fad, overexpanding retailer doomed to Chapter 11 scrap heap, the story behind it may be in some numbers that have been overlooked well into the current retail recession.

Lululemon averaged a stunning 34 percent same-store sales growth in 2007, and as of July, it still boasted an 18 percent comparable store sales gain from a year earlier. When Lululemon announced second-quarter earnings in September, it beat analyst expectations for the period while maintaining its full-year guidance.

Analysts estimate that the retailer, which generated revenues of $275 million in 2007, averages sales per square foot around $1,000—by comparison, Gap's sales per square foot of $376 in 2007, and American Eagle's were $638.

All of that explains why, of the nine analysts covering Lululemon, seven rate the stock as a "strong buy" or "buy," and two rate it as a "hold." Sharon Zackfia, a research analyst at William Blair & Company, explains the poor performance over the past year as a combination of jitters over changes in senior management and the stock experiencing the multiple compression that most retailers already underwent in 2007.

Still, while others are being forced to shutter stores, Lululemon is expanding. It's looking to add 30 to 35 stores per year to its current count of 91, launching an e-commerce site next fall, and quietly moving beyond yoga and into product lines for running, dance, and Pilates.

The hope inside the company is that Lululemon's customers are becoming devoted in a segment that has been chronically ignored.

"The women's athletic market has long been underserved by industry behemoths that have simply offered smaller sizes of men's patterns as their female product," says Zackfia.

While apparel spending overall has been one of the softest areas of consumer spending over the past year, activewear continues to be a bright spot. Zackfia estimates that the women's sports-apparel market in the U.S. is as large as $10 billion.
 "Activewear is a category where women continue to spend, especially as there becomes increased acceptability of multiple wearing occasions beyond simply exercising," explains Kelly Tackett, a senior consultant at TNS Retail Forward.

Lululemon is not, by a long shot, the only retailer noticing the opportunity. J. Crew, American Eagle, Victoria's Secret, Gap, T.J. Maxx, J.C. Penney, and Wal-Mart are among the retailers shifting focus to activewear offerings through acquisitions or new product lines.

But analysts such as Howard Tubin, a senior analyst with RBC Capital Markets, see Lululemon as strategically superior to these players due to its premium image and product designs that are fashionable as well as technically sophisticated.

"Lululemon is one of a handful of retail apparel doing well right now," says Tubin. "The brand is unique, the grassroots marketing they do is unique, and the price point is relatively expensive, but people have continued to pay up for it."

Lululemon might remind you of another "lifestyle brand" that became a pillar of yuppie culture after pioneering the $4 latte; perhaps it's no coincidence that Day came to Lululemon after more than 20 years at Starbucks, where she served most recently as president of the Asia Pacific group.

But don't think Lululemon is Starbucks minus the stimulants.

While the Seattle-based coffee giant fashioned a global expansion plan based on turning out ubiquitous, carbon-copy outlets, the cornerstone of Lululemon's strategy is maintaining a local, distinct feel to each store.

Day says that the Lululemon values individualism over uniformity, an ethos which extends to each store's unique "community board" listing local fitness events to every outlet designing its own window displays.

Lululemon has rejected traditional advertising in favor of converting local yoga teachers, dance teachers, and running coaches in advance of a store opening to create buzz in the community. The retailer also hosts free in-store yoga classes and fitness clinics (including "dog yoga," no less) to help build consumer familiarity and loyalty.

Unlike many of its competitors, Lululemon has pursued an all-retail rather than wholesale approach, believing that the in-store experience and employing knowledgeable salespeople was integral to supporting the high price point.

"I learned from Starbucks to be really focused on the core of the brand and to make sure that you protect it at all costs," says Day. "At Starbucks, we kind of moved on to Frappuccinos and Caramel Macchiatos before we really owned latte. So sometimes innovation, while it can drive new customers, also takes you away from your core business."

Day stresses that while Lululemon's growth plans may seem aggressive, the near-term expansion goal is for just 200 stores in the U.S. and 45 in Canada—still small enough that the chain can continue to rely solely on affluent consumers.

Giving some credence to Day's assertions, shares of Lululemon have added 17 percent over the past month—perhaps the beginning of a full recovery, but that's still far from a sure bet.

Howard Tubin worries that in a period of rapid expansion, the retailer's necessarily time- and labor-intensive approach to opening new stores will be difficult to maintain. Lululemon's (appropriately) selective approach to real estate could also lead the retailer to fall behind with openings, putting pressure on current growth forecasts.

And even given Lululemon's promising strategy, analyst Tackett points out that the exodus to value stores is a very real trend even amongst high-income households—and one that could persist and worsen.

"We're increasingly worried that there will be fundamental shift in shoppers' preferences towards value-oriented retailers and brands," says Tackett. "Obviously the hope is that they come back when they have the money, but the concern is that the longer this goes on, the more entrenched the shopping behaviors will become."

Related Links
No Yogi Bears
Morning Hemlines: Nexcen, Milan, Paris, Margiela, Theysken, McQueen, Project Runway, Burberry
Holiday Forecast: Severe Chill


Source: Portfolio.com: Top 5 | 8 Oct 2008 | 4:00 am

NZ shares pegging back some ground, down 1.8pc

Today's slide in the New Zealand sharemarket appears to have been arrested, but the NZX still seems to be heading for a down day following the lead set overnight in the US and Europe. The NZX-50 index is now down 54 points, or...
Source: New Zealand Herald - Business | 8 Oct 2008 | 3:00 am

McCain and Obama clash over economy

John McCain and Barack Obama met for their first televised debate since the campaign soured into a string of personal attacks from the rival campaigns about the past associations of the candidates
Source: FT.com - US homepage | 8 Oct 2008 | 2:56 am

Economists predict OCR cut to 6.5pc this month

Economists are expecting a historic move by the Reserve Bank (RBNZ) when it reviews the official cash rate (OCR) this month - with some forecasting a cut of 100 basis points to 6.5 per cent. The speculation follows yesterday's...
Source: New Zealand Herald - Business | 8 Oct 2008 | 2:00 am

Australian consumer confidence takes a dive

A key measure of Australian consumer confidence has sharply plunged this month as turmoil in global financial markets made people feel gloomy about the economic outlook, a survey today showed. The Westpac-Melbourne Institute consumer...
Source: New Zealand Herald - Business | 8 Oct 2008 | 1:30 am

Court orders Petricevic Porsche to be sold

The expensive car of bankrupt Bridgecorp executive director Rod Petricevic is to be sold, a court ordered today. The 2005 Porsche, estimated to be worth between $120,000 and $150,000, has been at the centre of a legal row after...
Source: New Zealand Herald - Business | 8 Oct 2008 | 1:08 am

Bad day on Wall St - Dow down 5pc

The misery worsened on Wall Street today, with stocks piling on losses late in the session and bringing the two-day decline in the Dow Jones industrials to more than 875 points amid escalating worries about credit markets and the...
Source: New Zealand Herald - Business | 8 Oct 2008 | 1:00 am

BofA raises $10bn on day shares fell 26%

The biggest one-day drop in at least 30 years came as investors reacted to news of a worse-than-expected quarterly profit, a dividend cut and the capital-raising plan
Source: FT.com - US homepage | 8 Oct 2008 | 12:40 am

CBA buys BankWest in A$2b deal

Commonwealth Bank of Australia will buy BankWest and St Andrew's Australia from their UK-based parent HBOS for A$2.1 billion. The nation's biggest mortgage lender said the purchase is conditional on the receipt of all necessary...
Source: New Zealand Herald - Business | 8 Oct 2008 | 12:30 am

Trends & Innovations - Tuesday

Ultrasound can help stop bleeding
Source: Investor's Business Daily: BUSINESS | 8 Oct 2008 | 12:27 am

Business Briefs - Tuesday

Eli Lilly settles on drug marketing. The drug maker will pay $62 mil to 32 states and Washington, D.C., to settle an inquiry into its marketing of...
Source: Investor's Business Daily: BUSINESS | 8 Oct 2008 | 12:27 am

Overseas Expansion Helps Keep Jeans Flying Off The Shelves

Armed with a strong brand and hot fashions, apparel powerhouse Guess is packing a real punch in the fight to win over shoppers.
Source: Investor's Business Daily: BUSINESS | 8 Oct 2008 | 12:27 am

After The Close - Tuesday

YUM BRANDS (YUM), which operates the KFC, Pizza Hut and Taco Bell chains, said its Q3 EPS rose 16% to 58 cents ex items, beating views by 4 cents....
Source: Investor's Business Daily: BUSINESS | 8 Oct 2008 | 12:27 am

Blog: Dow zero? Just 19 more days like this one and we'll be there

Source: L.A. Times - Business | 8 Oct 2008 | 12:02 am

Executives lived it up on 'bailout' money

Less than a week after the federal government had to bail out American International Group (AIG), the company sent executives on a US$440,000 ($712,000) retreat to a posh California spa resort, lawmakers investigating the company's...
Source: New Zealand Herald - Business | 8 Oct 2008 | 12:00 am

Emerging markets' resilience tested

The huge corrections in equity markets have undermined the idea that the developing world has grown immune to shocks to confidence, international capital flows and trade
Source: FT.com - US homepage | 7 Oct 2008 | 11:54 pm

Fed to start buying commercial paper

Ben Bernanke, Federal Reserve chairman, opened the door to possible interest rate cuts after the central bank announced it would buy short-term debt from banks and corporations in an unprecedented attempt to unfreeze money markets
Source: FT.com - US homepage | 7 Oct 2008 | 11:36 pm

Alcoa earnings drop 52%

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 7 Oct 2008 | 11:14 pm

Coal-fired power generators face new threat from EU carbon emissions curb

The future of coal-fired power generation in Europe was called into question yesterday after a European Parliament committee backed new laws that would force power companies to pay for all of their carbon dioxide emissions from 2013.
Source: Latest Business News from Times Online | 7 Oct 2008 | 11:00 pm

Ryanair crews must take unpaid leave, says Michael O'Leary

Four hundred Ryanair pilots and cabin crew will be forced to take one week of unpaid leave this year as the budget airline cuts back flights from Dublin and Stansted.
Source: Latest Business News from Times Online | 7 Oct 2008 | 11:00 pm

City gloom, arts boom: let's face the music and dance, sing and laugh

Culture on the cheap: value-for-money arts
Source: Latest Business News from Times Online | 7 Oct 2008 | 11:00 pm

Sir Philip Green tells consumers to "calm down"

Sir Philip Green told Britain to cheer up yesterday, despite his group’s profits having fallen by 40 per cent last year.
Source: Latest Business News from Times Online | 7 Oct 2008 | 11:00 pm

Lower income earners to lose under National's tax plan

Lower income earners who get Working for Families, lower income KiwiSavers and companies receiving research and development tax credits are the losers under National's tax package announced today. While many taxpayers will get...
Source: New Zealand Herald - Business | 7 Oct 2008 | 11:00 pm

BAE firm in body armour pay-out

A subsidiary of UK defence giant BAE Systems has agreed to pay millions of dollars to the US government over defective body armour.
Source: BBC News | Business | World Edition | 7 Oct 2008 | 10:21 pm

For Long-Term Investors, Now Is Time to Buy (Common Sense)

Why buy during the worst financial crisis of my lifetime? The answer is simple.

Source: SmartMoney.com | 7 Oct 2008 | 10:11 pm

Students Face Steep Curve in Landing Private Loans (Deal of the Day)

Private lenders are tightening requirements. Here's what students need to know.

Source: SmartMoney.com | 7 Oct 2008 | 9:33 pm

6 Stocks Baited for Bottom Fishers (Stock Screen)

Bottom-fishers should cast around for these six severely oversold stocks.

Source: SmartMoney.com | 7 Oct 2008 | 9:32 pm

Action needs to be taken on global level - IMF

The global economy faces a much more serious downturn than almost anyone has until now realised unless international governments take immediate co-ordinated action to deal with the credit crisis, the International Monetary Fund warned...
Source: New Zealand Herald - Business | 7 Oct 2008 | 9:30 pm

VIX Index of U.S. Stock Option Prices Advances 3.1% to 53.68

Source: Bloomberg - All Podcasts | 7 Oct 2008 | 9:20 pm

RBC Capital's Gero Says Gold Is Attractive Buy Via ETFs

Source: Bloomberg - All Podcasts | 7 Oct 2008 | 9:18 pm

Poole Calls Fed Move to Buy Commercial Paper `Positive'

Source: Bloomberg - All Podcasts | 7 Oct 2008 | 9:09 pm

Michael Mussa Says Panic in Markets `Is the Clear Problem'

Source: Bloomberg - All Podcasts | 7 Oct 2008 | 9:05 pm

Stanford's Hall Calls U.S. Slowdown `Modern Recession'

Source: Bloomberg - All Podcasts | 7 Oct 2008 | 9:03 pm

US stocks sink to five-year low

The financial crisis sends US stocks to their lowest levels in five years despite earlier gains on European markets.
Source: BBC News | Business | World Edition | 7 Oct 2008 | 8:51 pm

ETFs Sell Off Despite Fed Efforts (Daily ETF Wrap-Up)

Despite efforts by the Fed, the market continued to fret over the unknown.

Source: SmartMoney.com | 7 Oct 2008 | 8:44 pm

Lazear Says U.S. Taking `Aggressive' Approach to Crisis

Source: Bloomberg - All Podcasts | 7 Oct 2008 | 8:36 pm

Dow Falls 508 Points

The blue-chip index has lost more than 15% of its value in the last seven sessions.

Source: SmartMoney.com | 7 Oct 2008 | 8:25 pm

Feds back Morgan Stanley deal

Source: Business and financial news - CNNMoney.com | 7 Oct 2008 | 8:08 pm

Consumer credit marks first fall since January 1998 (Reuters)

Reuters - U.S. consumer borrowing fell for the first time in more than a decade in August amid tighter credit markets, tougher lending standards and declining consumer spending, a Federal Reserve report showed on Tuesday.

Source: Yahoo! News: Business | 7 Oct 2008 | 8:02 pm

Eco-Lodging (SmartMoney Magazine)

Eco-fever has hit the hotel industry. We rate three pioneering properties.

Source: SmartMoney.com | 7 Oct 2008 | 7:41 pm

Eco-Lodging (Working and Living Green)

Eco-fever has hit the hotel industry. We rate three pioneering properties.

Source: SmartMoney.com | 7 Oct 2008 | 7:41 pm

Mutual Funds Run by Insurance Companies Lag Their Peers (SmartMoney Magazine)

Funds sold by insurance companies don't perform as well as those from fund families.

Source: SmartMoney.com | 7 Oct 2008 | 7:36 pm

Score More Financial Aid (SmartMoney Magazine)

Education costs are skyrocketing. Here's how to maximize the financial aid that's out there.

Source: SmartMoney.com | 7 Oct 2008 | 7:35 pm

Making money in this market

How bad is this bear market? Out of thousands of offerings, only one mutual fund focusing on U.S. stocks is up this year. You read that right - one!

Source: Business and financial news - CNNMoney.com | 7 Oct 2008 | 7:30 pm

Where the pros are putting their cash

Money magazine asked several financial experts: What are you doing with your own portfolio in the wake of the financial crisis?

Source: Business and financial news - CNNMoney.com | 7 Oct 2008 | 7:28 pm

Oil prices end above $90

Oil held its gains in volatile trading Tuesday, bouncing off an 8-month low on weakness in the dollar, but the advance was kept in check by falling stock prices.

Source: Business and financial news - CNNMoney.com | 7 Oct 2008 | 7:16 pm

700 auto dealers could fail

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 7 Oct 2008 | 6:50 pm

Ex-pats worry about U.S. troubles

Americans living abroad share their perspectives of the American financial crisis with our European Bureau Chief Stephen Beard. Another part in Marketplace's "Interested Parties" series.
Source: Marketplace | 7 Oct 2008 | 6:02 pm

Unemployment soars in Georgia

Judging from the unemployment figures, the financial crisis is affecting regional economies all over the country. The state of Georgia, in particular, is feeling a lot of the pain. Steve Henn reports.
Source: Marketplace | 7 Oct 2008 | 5:49 pm

Letters from our listeners

In our recent batch of letters, readers gave us strong opinions on the bailout, mortgage rates, revenge and blame. Host Kai Ryssdal picked out a few.
Source: Marketplace | 7 Oct 2008 | 5:48 pm

Nebraska family wants fiscal change

Marketplace Money host Tess Vigeland stopped and talked with Nebraskans for our "Road to Ruin?" series. She was invited to a spirited dinner-table discussion with the Landis family, which she shares with host Kai Ryssdal.
Source: Marketplace | 7 Oct 2008 | 5:47 pm

Big government is counterproductive

Commentator Susan Lee says even though Americans' political will may be lacking in this financial crisis, the economic argument for less government intervention is as powerful as ever.
Source: Marketplace | 7 Oct 2008 | 5:45 pm

Third quarter looking bad for banks

Bank of America CEO Ken Lewis says he hasn't seen such difficult conditions for banks in his 39 years in the business. Ashley Milne-Tyte reports on what to expect from third-quarter statements next week.
Source: Marketplace | 7 Oct 2008 | 5:44 pm

Varvares Says Fed and Treasury `Pulling Out All the Stops'

Source: Bloomberg - All Podcasts | 7 Oct 2008 | 5:38 pm

How commercial paper works

Following this economic crisis is almost like getting a degree in finance. The latest term-of-the-day is "commercial paper." Reporter Jeff Tyler asks an economist to help unravel that one.
Source: Marketplace | 7 Oct 2008 | 5:20 pm

Fed becomes 'lender of last resort'

Credit is so tight the Fed is now loaning money to businesses in need of short-term cash. Should we be worrying about the Fed's new role as America's ATM? Washington Bureau Chief John Dimsdale reports.
Source: Marketplace | 7 Oct 2008 | 5:18 pm

Dinning Says Coordinated Rate Cuts Would Help Confidence

Source: Bloomberg - All Podcasts | 7 Oct 2008 | 4:55 pm

Bailout Bill Saves World and Dubious Pork: Commentary

Source: Bloomberg - All Podcasts | 7 Oct 2008 | 4:53 pm

CPM's Christian Sees Deeper, Longer Recession

Source: Bloomberg - All Podcasts | 7 Oct 2008 | 4:32 pm

A.I.Greed

WASHINGTON—Two former C.E.O.'s of American International Group insisted today that the insurance giant was a victim of unruly markets. But lawmakers on Capitol Hill confronted them with what they said was evidence of executives' missing warning signs while awarding themselves rich payouts.

Federal regulators warned A.I.G. in March that corporate oversight of major subsidiaries, including its finance products and lease finance units, "lacks critical elements of independence, transparency, and granularity," said Henry Waxman, the Democratic chairman of the House Oversight and Government Reform Committee, reading from a letter from the Office of Thrift Supervision.

As the economy is roiled by a credit crisis, Congress is starting to examine the reasons why the government became embroiled in providing support for financial companies, including $85 billion in assistance for A.I.G.

Committee members were sharply critical of the compensation received by A.I.G. executives, in particular former C.E.O. Martin Sullivan, who attended the hearing with his successor, Robert Willumstad.

"Shame on you," said Jackie Speier, Democrat of California, to Sullivan, who was chief executive from 2005 to 2008. "The shareholder has nothing, but you walked away with $15 million."

Not only did A.I.G. executives receive big payouts, but less than a week after the federal bailout, the committee said that executives frolicked during a week-long retreat at the exclusive St. Regis Resort at Monarch Beach, California. Rooms at the resort—a photo of the luxury hotel was flashed on the screen—can go for more than $1,000 a night.

The meeting cost about $500,000, including $23,000 on spa services, which prompted Elijah Cummings, Democrat of Maryland, to complain that A.I.G. employees were "getting facials, manicures, and massages and the American people were footing the bill."

In one of the few light moments, Cummings wondered out loud what $10,000 on "leisure dining" was for.

"Bars!" was the helpful shout-out from someone in the audience.

But dwarfing any fancy spa or huge bar tab were the sums awarded to executives, not only to Sullivan but also to Joseph Cassano, the London-based head of A.I.G.-Financial Products. As Lynnley Browning reported for Portfolio.com, A.I.G.-Financial Products was largely responsible for nearly toppling the insurance company with its huge losses on credit default swaps.

Over eight years, Cassano—who was not present at the hearing—received $280 million in salary. Since leaving A.I.G. in March, he has been on a $1 million-a-month retainer.

An incredulous Waxman asked both Sullivan and Willumstad, who was chief executive from June until the September bailout: "Why didn't you fire him?"

The long and short of Sullivan's answer: Cassano has long-term knowledge of the investments and his expertise in "winding down exposure would be valuable to the company."

"Is it a good signal when a man makes these derivative deals and he gets $1 million a month?" asked an obviously frustrated Waxman.

Other committee members were frustrated trying to connect the dots. Mark Souder, Republican of Indiana, denounced A.I.G.'s  actions as "unbridled greed."

There were also hints of how tracking the financial crisis may well involve a lot of conspiracy theories. Lawmakers tried to delve into Goldman Sachs' possible role in the bailout of A.I.G., but those lines of inquiry did not get very far.

Scheduled to appear with Sullivan and Willumstad was another former C.E.O., Hank Greenberg, who had built the company into a global titan over four decades. But Greenberg pleaded illness and avoided an appearance—perhaps spooked by the angry, placard-waving protesters who chased former Lehman Brothers head Richard Fuld to his car following his appearance before the committee Monday.

Failing to show before Congress didn't prevent Greenberg from trying to throw a little sand into the gears with his prepared testimony.

In his statement, he criticized the $85 million bailout, saying, "Those millions of Americans could have fared better if A.I.G. had filed for bankruptcy protection, since they would have at least have had the chance of recouping value on their investments in A.I.G. over the longer term."  
Greenberg's refusal to accept any blame for the collapse of the company—which was noted by Waxman as he opened the hearing—was echoed by Sullivan when his turn came before the committee.

Sullivan, who headed the company from March 2005 to June 2008, insisted that his tenure had been "marked by unprecedented transparency with our investors and regulators."

He attributed A.I.G.'s problem to one "particular factor— the role played by one accounting rule applied to corporations."

Those accounting rules require certain assets be "market to market," he said. That requires companies to declare the value of those assets on a quarterly basis at the price such assets could sell for on the market at that point in time. But, in a time of crisis, companies, he said, "are forced to declare the value of those assets at fire-sale prices."

But Lynn Turner, former chief accountant for the Securities and Exchange Commission who appeared at an earlier panel with Eric Dinallo, the New York state insurance commissioner, took exception to his explanation.

The rule, he said, requires the company to separate the value of the investments in such a way so they can "understand with greater confidence in the nature and types of investments."

"That's like blaming the thermometer for the fever," he said of the accounting rule.

Waxman's focus was on compensation, contending that in this financial crisis, "each executive grew rich by taking excessive risk."

"In each company, when risk turned bad, the companies collapsed. And in each case, executives walked away with millions of dollars while taxpayers are stuck with billions of dollars."

Related Links
A.I.G.'s House of Cards
A.I.G.'s House of Cards
A.I.Goodbye


Source: Portfolio.com: Top 5 | 7 Oct 2008 | 4:30 pm

Don't Bury Fair-Value Accounting Just Yet

The Securities and Exchange Commission and the Financial Accounting Standards Board jointly issued a release last week to respond to the current crisis in the financial markets.

Contrary to what some seem to believe, the S.E.C./F.A.S.B. release does not do away with or otherwise change the F.A.S.B.'s guidelines for determining fair value in Statement of Financial Accounting Standards No. 157 that went into effect for many companies just this year.

Rather, the S.E.C./F.A.S.B. release affirms the objective of fair value, even when used for illiquid assets, and clarifies how companies should apply the new guidelines when determining the fair value of mortgage-backed securities or other assets in markets that are no longer active.

In particular, the S.E.C./F.A.S.B. release clarifies that when determining fair value, companies should focus on the relevance of the pricing information that is currently available. The new guidelines actually help assess the relevance of pricing information because F.A.S. 157 establishes a hierarchy that puts that information into one of three levels to convey the relative reliability and relevance of the asset fair values. F.A.S. 157 also requires companies to disclose the asset fair values by level in the hierarchy.

Level 1 assets have directly observable market prices in active markets, like stocks traded on major exchanges. Valuing Level 2 assets, including derivatives, isn't as straightforward, but can be done by looking at other observable market information. Level 3 assets are those for which there is no active market; and pricing them can be a more involved process that relies on the holder's forecasts of expected cash flows based on its own market assumptions.

The S.E.C./F.A.S.B. release notes that although these levels were not intended to establish "bright lines" for the valuation, companies must consider all available information in the valuation. Companies cannot, for example, arbitrarily choose to ignore Level 2 pricing information that is available and immediately default to Level 3 pricing information.

But when markets are no longer active, as appears to be the case now for many assets, there might be some circumstances in which Level 3 pricing information is more relevant than the Level 2 pricing information available in those markets and should be used for the valuation.

These circumstances might be indicated when significant adjustments are made to Level 2 pricing information. For example, companies may well need to make significant adjustments to arrive at a reasonable estimate of what a current market price would be for the asset that is being fair-valued when Level 2 pricing information represents prices in disorderly (so-called fire-sale) transactions, broker quotes that are based on models that use information available only to the broker, or other market quotes that are merely indicative bids.

As a follow-up to the S.E.C./F.A.S.B. release, the F.A.S.B. issued for public comment a proposal called "Determining the Fair Value of a Financial Asset in a Market That Is Not Active." The proposal would illustrate how the new guidelines might apply in more specific circumstances.

(The deadline to comment on the proposal is this Thursday, October 9; the F.A.S.B. plans to hold a meeting on Friday to discuss the comments and vote on a final document so it can be used by companies in preparing their third-quarter financial statements.)

At the same time, the Emergency Economic Stabilization Act of 2008—the $700 billion package passed by Congress and signed into law by President Bush on Friday—contains a provision that restates the S.E.C.'s authority to suspend F.A.S. 157 if the S.E.C. determines that "it is necessary or appropriate in the public interest and is consistent with the protection of investors."

Further, amid calls to suspend fair value accounting to put an end to more asset impairments, Representative Spencer Bachus, Republican of Alabama, has asked Barney Frank, chairman of the House Financial Services Committee, to convene hearings on fair-value accounting and the need for reforms to F.A.S. 157.

It is worth noting that F.A.S. 157 is not the reason that in today's markets many assets are impaired. Further, F.A.S. 157 does not require any assets to be recorded at fair value, whether on an ongoing basis (so-called "mark-to-market" accounting) or when impaired.

The fair-value concept was established long before F.A.S. 157 and was referred to in more than 60 of the authoritative pronouncements that were being used by companies when F.A.S. 157 arrived. Many of those pronouncements contained guidelines for determining fair value that were similar to the guidelines in F.A.S. 157 but that were replaced by the new guidelines to improve consistency in application.

With that, conventional wisdom tells us that suspending F.A.S. 157 alone would not do away with fair-value accounting. Fair-value accounting would still be used—but without the new guidelines for determining fair value and without the new disclosures about fair value, which could add to, not reduce, the confusion that currently exists over what fair value is and what fair value means when used in financial reporting today.

The fair-value debate seems certain to continue, having potential implications for the fate of F.A.S. 157. But for now, F.A.S. 157 is holding. So in preparing their financial statements, companies should plan to continue to use the new guidelines (as clarified) for the fair values that are either required or permitted under other authoritative pronouncements.

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The views expressed in the article are held by the author and are not necessarily representative of FTI Consulting. Related Links
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Source: Portfolio.com: Top 5 | 7 Oct 2008 | 4:00 pm

Chipping Away

And now for some good news.

This morning, chipmaker AMD announced one possible way to avoid a diving share price and even create new jobs: It's selling off part of the company, and the Middle East is coming to the rescue.

In a long-expected plan, AMD will get out of the manufacturing business by spinning off those operations into a new company, called The Foundry Company. With a $6 billion investment from Abu Dhabi-based Advanced Technology Investment Company and Mubadala Development Company, which already owns 8 percent of AMD, Foundry will assume control of the company's manufacturing operations in Germany, and has plans to open facilities in Saratoga County, New York, adding 5,000 jobs to the area. The plan may be AMD's only hope in its endless battle with market behemoth Intel, a fight that has drained AMD's resources and left it with less than 20 percent of the market, backed into a corner.

"With The Foundry Company, AMD has developed an innovative way to focus our efforts on design while maintaining access to the leading-edge manufacturing technologies that our business needs without the required capital-intensive investments of semiconductor manufacturing," said AMD C.E.O. Dirk Meyer in a statement. "Today is a landmark day for AMD, creating a financially stronger company with a tightened focus."

The spinoff moves the manufacturing business off its balance sheet entirely—along with the company's $1.2 billion debt, which will be assumed by Foundry.

"Finally, [AMD] gets a brain, wrote Douglas McIntyre on BloggingStocks.com today. AMD's share price had plummeted over the last two years, from $40 in 2006 to $4 this month. Shares were up in morning trading, but it was hard to tell how much was driven by the announcement versus the rising tide of the market this morning after further overnight moves to shore up the global financial meltdown.

Foundry will be run by Doug Grose, currently AMD's senior vice president of manufacturing operations. Hector Ruiz, the former C.E.O. of AMD, will become Foundry's chairman. AMD will maintain a 44 percent stake in the new venture, though analysts expect the chipmaker to be diluted out over time by A.T.I.C.

A.T.I.C. is an investment company formed by the Abu Dhabi government. And while Middle Eastern sovereign wealth funds and other investment funds in the region have remained strong, the global crisis has begun to spread in that direction. Yesterday, Saudi Arabia's Tadawul All-Share Index (TASI) fell 9.8 percent and the Dubai Financial Market General index dropped 7.6 percent. AMD may have chosen the wisest moment ever to do this deal before all capital markets freeze up.

How much of an advantage this move will give AMD against Intel is hard to say. Intel is still the far-dominant chipmaker, holding 80 percent of the market on the world's 1 billion personal computers. AMD will surely have shored up its own financial health, but it will need more than a tighter balance sheet to find clever new ways to grab market share from Intel.
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Source: Portfolio.com: Top 5 | 7 Oct 2008 | 2:30 pm

Firing Blanks on Banks

Oh, Ben. 

Stocks tumbled again even though the Federal Reserve pulled out a new tool and promised an old one. Ben Bernanke, the chairman of the Federal Reserve, gave the strongest hint yet that an interest rate was imminent, while the Fed moved to shore up the commercial paper market.

But the Dow Jones industrial average slid more than 500 points, and the S&P 500 fell below 1,000 to its lowest close in five years. The market reaction underscores that many investors believe that central banks and governments are running out of ammunition to fight the global financial crisis. 

Fears over the health of many large banks dominated trading today. Shares of Bank of America tumbled after the bank announced late Monday its plans to cut its dividend in half. It also plans to raise $10 billion in capital through a stock offering. Shares of rival Citigroup fell nearly 13 percent. Morgan Stanley shares plummeted nearly 25 percent amid rumors, denied by the firm, that its deal with Mitsubishi UFJ was in trouble. Since a year ago, financial stocks have slid 55.2 percent,  losing $1.48 trillion, Standard & Poor's estimates.

In a speech in Washington, Ben Bernanke, the chairman of the Federal Reserve signaled that a cut in interest rates is in the offing. 

"The heightened financial turmoil that we have experienced of late may well lengthen the period of weak economic performance and further increase the risks to growth," Bernanke said. "To support growth and reduce the downside risks, continued efforts to stabilize the financial markets are essential. The Federal Reserve will continue to use the tools at its disposal to improve market functioning and liquidity."

His comments came after the Fed announced a plan to provide a "liquidity backstop to U.S. issuers of commercial paper." It will do so through a special-purpose vehicle that will buy commercial paper, short-term debt that many companies use to finance their day-to-day operation

The plan buoyed the market in early trading. But stocks resumed their slide after the Fed chairman's speech. At 1:30 p.m., the Dow was down more than 230 points.

The Fed said that the commercial-paper market "has been under considerable strain in recent weeks." The stresses in that market have been cited as evidence that the credit crunch is spilling beyond Wall Street and hindering nonfinancial companies and businesses.

"The Treasury believes this facility is necessary to prevent substantial disruptions to the financial markets and the economy and will make a special deposit at the Federal Reserve Bank of New York in support of this facility," the Fed said. It did not indicate how much commercial paper it might buy.

Yves Smith on Naked Capitalism is skeptical that this would be effective. "Once the Fed steps in as a major player (major is required to have any impact), how does the Fed wean the market of its support?" she asks.

"Warm up the helicopters, and welcome to central planning."

On Monday, markets around the world plunged. The Dow Jones industrial average fell as much as 800 points before trimming its losses to a decline of 369.88 points. The plan buoyed the market in early trading. But stocks resumed their slide after the Fed chairman's speech. At 1:30 p.m., the Dow was down more than 230 points.

Also today, the Federal Reserve Bank of New York held a meeting with banks and institutional investors about setting up an exchange or clearinghouse for credit-default swaps.

The idea would be to give greater transparency and oversight to the $55 trillion market, whose opaqueness and complexity have been a fertile breeding ground for fears.

And the Fed is now widely expected to cut its benchmark interest rates, now at 2 percent, by a half point, possibly in conjunction with rate cuts by the European Central Bank, the Bank of England, and other central banks.

Markets were buoyed a bit today by a surprise move by Australia to cut its benchmark interest rate by a full percentage point. But other than India's, no other major central bank followed.

The stresses in the global financial system were evident today. Iceland nationalized its second-largest bank and said it was in talks with Russia (Russia!) over a $5.4 billion loan.

The British government is in talks with three of the country's largest banks—Royal Bank of Scotland, Lloyds TSB, and Barclays, fresh off its purchase of Lehman Brothers' U.S. operations—over a possible public investment of $79 billion, Bloomberg News reports.

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Source: Portfolio.com: Top 5 | 7 Oct 2008 | 12:00 pm