EU climate change push in disarray as Italy joins Iron Curtain revolt

Europe’s commitment to ambitious green goals became the latest victim of the global financial crisis yesterday when a growing number of EU countries rebelled, claiming that the plans were now too expensive.
Source: Latest Business News from Times Online | 17 Oct 2008 | 3:46 pm

US home building at 17-year low

Construction of new US homes fell more than expected last month to reach its lowest level in more than 17 years, official figures show.
Source: BBC News | Business | World Edition | 17 Oct 2008 | 1:25 pm

Bush to give pep talk to anxious country Friday (AP)

AP - Wild gyrations on Wall Street, a loss of confidence in the U.S. banking system and worries the economy will be weak for some time are raising Americans' anxiety level.

Source: Yahoo! News: Business | 17 Oct 2008 | 1:20 pm

Wall Street set to start lower on recession worry (Reuters)

Reuters - Stocks headed for a lower open on Friday as a report pointing to further deterioration in housing added to recession fears, offsetting reassuring profits from manufacturer Honeywell International Inc and Google Inc .

Source: Yahoo! News: Business | 17 Oct 2008 | 1:17 pm

Cautious gains in Europe's shares

European stock markets rise, as investors and traders take heart from the gains on Wall Street on Thursday.
Source: BBC News | Business | World Edition | 17 Oct 2008 | 1:15 pm

Rite Aid Problems Mounting (RAD)

Source: 24/7 Wall St. | 17 Oct 2008 | 1:14 pm

Have buybacks lost their mojo?

Last month, Microsoft announced it was going to spend $40 billion buying back its own stock. Traditionally, that would have meant a payday for its investors. With Microsoft using its own spare cash to reduce the number of outstanding shares, earnings per share should have improved, and the stock price should have ticked upwards.

Source: Business and financial news - CNNMoney.com | 17 Oct 2008 | 1:14 pm

West urges financial overhaul; U.S., France to meet (Reuters)

Reuters - European leaders pressed for tougher world banking rules on Friday to protect economies from crisis, the day before a meeting of the U.S. and French presidents.

Source: Yahoo! News: Business | 17 Oct 2008 | 1:10 pm

Home construction falls sharply in September

Construction of new homes plunged by a bigger-than-expected amount in September as builders slashed production to the slowest pace since early 1991, when the country was in a deep recession.

Source: L.A. Times - Business | 17 Oct 2008 | 1:08 pm

ING shares down after reports on capital position (Reuters)

Reuters - Shares in Dutch financial services group ING dived more than 20 percent on Friday and asset managers said the move was triggered by reports on ING's capital position.
Source: Yahoo! News: Business | 17 Oct 2008 | 1:07 pm

German parliament backs bail-out

Germany's parliament approves what is billed as the country's largest financial rescue package since World War II.
Source: BBC News | Business | World Edition | 17 Oct 2008 | 1:05 pm

Economic Report: Housing starts fall 6% to 17-year low in September

Construction of new homes dwindle to a 17-year low in September as home builders sought to reduce the number of unsold homes in an elusive quest to find the bottom of the historic housing collapse.

Source: MarketWatch.com - Top Stories | 17 Oct 2008 | 1:02 pm

Google's shares jump after profit tops estimates

Shares of Google Inc. jumped nearly 10% in pre-market trading Friday, a day after the Internet giant’s third-quarter profit bested Wall Street’s expectations in spite of general uncertainty about the health of the online advertising market and a strengthening dollar.

Source: MarketWatch.com - Top Stories | 17 Oct 2008 | 1:02 pm

West urges financial overhaul, Asia and E.Europe hit

LONDON (Reuters) - World leaders demanded tougher banking rules on Friday to protect economies from crisis before a meeting of U.S. and French presidents that officials said would explore ways to reform a crumbling financial system.

Source: Reuters: Business News | 17 Oct 2008 | 1:01 pm

NewsWatch: U.S. stock futures point lower but trim losses

The roller-coaster ride in equity markets looked set to continue on Friday, with U.S. stock futures trimming losses but still pointing to a lower opening after a strong push higher at the end of the previous session.

Source: MarketWatch.com - Top Stories | 17 Oct 2008 | 1:00 pm

AMD reports narrower loss, stock surges

NEW YORK (MarketWatch) -- Advanced Micro Devices Inc. reported a narrower third-quarter loss aided by strong sales of graphics and microprocessor chips, results that one analyst called "impressive" given the mounting challenges faced by the chip giant.

Source: MarketWatch.com - Top Stories | 17 Oct 2008 | 12:57 pm

Housing data weighs on Wall Street

Wall Street stocks were set to resume their punishing decline after more gloomy data from the housing sector outweighed some relatively upbeat earnings elsewhere
Source: FT.com - US homepage | 17 Oct 2008 | 12:54 pm

September housing starts fall to new 17-1/2 year low

WASHINGTON (Reuters) - Construction starts on new homes fell to a new 17-1/2 year low in September as builders scaled back amid a worsening housing slump and growing turmoil in financial markets that helped pushed permits for new homes to a nearly 27-year low.

Source: Reuters: Business News | 17 Oct 2008 | 12:53 pm

Futures extend losses on housing starts

NEW YORK (Reuters) - Stock index futures extended losses on Friday as a report showing that housing starts slid in September heightened recession fears.

Source: Reuters: Business News | 17 Oct 2008 | 12:51 pm

Singapore, Malaysia join bank-guarantee bandwagon

NEW YORK (MarketWatch) -- Malaysia and Singapore said Friday they would guarantee all deposits in their nations' banks through the end of 2010, mirroring a move made earlier this week by Hong Kong, Australia and other regional powers.

Source: MarketWatch.com - Top Stories | 17 Oct 2008 | 12:51 pm

Housing Starts Tank

According to The Wall Street Journal, "Home construction took its third tumble in a row during September, falling to the lowest level in 17 years, and a sign points to further decline in the fourth quarter."

Housing starts decreased 6.3% to a seasonally adjusted 817,000 annual rate, after falling 8.1% in August to 872,000, the Commerce Department said.

Friday's data on starts showed building permits decreased 8.3% to a 786,000 annual rate in September. Economists had expected permits down 2.0% to a rate of 840,000.

Douglas A. McIntyre

Source: 24/7 Wall St. | 17 Oct 2008 | 12:50 pm

Tesco follows rivals to cut petrol below £1

Tesco, Britain's biggest supermarket group, today followed its rival retailers by reducing petrol prices at the "vast majority" of its forecourts to under £1 a litre.
Source: Latest Business News from Times Online | 17 Oct 2008 | 12:49 pm

Clothing giant VF Corp. cuts fourth-quarter view

VF Corp., one of the largest clothing companies whose labels are carried from discounters to luxury retailers, cut its fourth-quarter profit and sales outlook on Friday, citing the worsening economic conditions that have taken a toll on consumer confidence and spending.

Source: MarketWatch.com - Top Stories | 17 Oct 2008 | 12:45 pm

Schroder's Lynch Says Markets `Close to Bottom'

Source: Bloomberg - All Podcasts | 17 Oct 2008 | 12:44 pm

UK Coal shares plunge after profits warning

A recent slump in coal prices and production problems at some of its pits forced UK Coal to give warning today that its profits would fall “significantly below” expectations this year.
Source: Latest Business News from Times Online | 17 Oct 2008 | 12:44 pm

McCain's best hope: Joe the plumber

John McCain has tried to paint his Democratic opponent as a big-spending, big-taxing liberal. In normal times, this would have been an effective strategy; large swathes of Americans - especially the independent voters still up for grabs - are wary of a politician with a voting record as liberal as that of the junior Senator from Illinois.

Source: Business and financial news - CNNMoney.com | 17 Oct 2008 | 12:40 pm

Home construction falls sharply in September

Government data show construction of new homes plunged by a bigger-than-expected amount in September as builders slashed production to the slowest pace since early 1991.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Oct 2008 | 12:40 pm

'High School Musical 3' set to keep franchise hot

LOS ANGELES, Oct 17 (Reuters) - Walt Disney Co's hotly anticipated "High School Musical 3: Senior Year" arrives in movie theaters around the world next week, with bumper advance ticket sales and plans...
Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Oct 2008 | 12:39 pm

Kospi hits fresh lows; Korea support-policy due Sunday

South Korean shares suffered further losses Friday , although sharp declines in early trading were pared back amid expectations policy makers would announce measures to restore confidence in the financial system and the economy later in the day.

Source: MarketWatch.com - Top Stories | 17 Oct 2008 | 12:38 pm

Before the Bell: Google, IBM, GM, Chrysler in the spotlight

U.S. stock market futures pointed lower at the end of another roller-coaster week Friday, with the latest data showing housing construction at a 17-year low, while Google Inc. topped earnings forecasts.

Source: MarketWatch.com - Top Stories | 17 Oct 2008 | 12:37 pm

Honeywell reports 16% profit rise, narrows 2008 view

Honeywell International Inc. tops estimates as its third-quarter earnings rise 16%. But the conglomerate narrowed its 2008 outlook.

Source: MarketWatch.com - Top Stories | 17 Oct 2008 | 12:37 pm

Petrol companies told to cut prices at pumps

Petrol and energy suppliers came under fire from ministers yesterday in an attempt to shame them into cutting pump prices and household bills.
Source: Latest Business News from Times Online | 17 Oct 2008 | 12:36 pm

CRH pulls scrip dividend as shares fall

CRH, the Irish construction company, has had to withdraw a scrip dividend it offered shareholders in August after its share price fell below the level at which the scrip dividend was set.
Source: Latest Business News from Times Online | 17 Oct 2008 | 12:35 pm

Shares in Hovis firm fall sharply

Shares in Premier Foods fall sharply on renewed speculation that the company is in financial difficulties.
Source: BBC News | Business | World Edition | 17 Oct 2008 | 12:32 pm

Day Trader Alert: Baidu.com (BIDU, GOOG)

Source: 24/7 Wall St. | 17 Oct 2008 | 12:32 pm

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 | 17 Oct 2008 | 12:31 pm

UK under fire over bribery laws

The UK is criticised for lacking the "political will" to investigate British companies accused of bribery.
Source: BBC News | Business | World Edition | 17 Oct 2008 | 12:27 pm

Global stocks rally in volatile trade, money rates ease (Reuters)

Reuters - Stock markets climbed around the world on Friday, taking their lead from Wall Street's late rally the previous session and helped by easing interbank lending rates, lower oil prices and encouraging earnings from technology firms.

Source: Yahoo! News: Business | 17 Oct 2008 | 12:26 pm

Global stocks rally in volatile trade, money rates ease

LONDON (Reuters) - Stock markets climbed around the world on Friday, taking their lead from Wall Street's late rally the previous session and helped by easing interbank lending rates, lower oil prices and encouraging earnings from technology firms.

Source: Reuters: Business News | 17 Oct 2008 | 12:26 pm

UPDATE 1-Energy market eyes Atlantic tropical wave - NHC

NEW YORK, Oct 17 (Reuters) - A tropical wave about 500 miles east-southeast of the southern Windward Islands had less than a 20 percent chance of developing over the next couple of days, the U.S. National...
Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Oct 2008 | 12:18 pm

Honeywell posts profit, top of '08 forecast cut

BOSTON (Reuters) - Honeywell International Inc's profit rose a better-than-expected 16.3 percent, on strong sales of thermostats and other equipment used to manage large commercial buildings.

Source: Reuters: Business News | 17 Oct 2008 | 12:18 pm

Honeywell's profits up on higher sales

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 17 Oct 2008 | 12:13 pm

Spanish airline suspends flights

Spanish-based airline LTE International suspends operations after telling Spanish authorities it is in serious financial difficulty.
Source: BBC News | Business | World Edition | 17 Oct 2008 | 12:10 pm

Good Life China (GLCC) to Spin Off Logistics Division valued at $1.5 million U.S.

BEIJING, Oct. 17 /PRNewswire-FirstCall/ - Good Life China Corporation href="http://www.goodlifechina.com">www.goodlifechina.com (GLCC.PK) is pleased to announce that it...
Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Oct 2008 | 12:08 pm

Airship Ventures Zeppelin Successfully Crosses Atlantic

Zeppelin to Embark on Historic Cross-Country Flight BEAUMONT, Texas, Oct. 17 /PRNewswire/ -- The largest airship in the world, the Airship Ventures Zeppelin, has...
Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Oct 2008 | 12:02 pm

Pfizer reaches tentative Bextra, Celebrex deals

NEW YORK, Oct 17 (Reuters) - Pfizer Inc said on Friday it plans to pay $894 million to settle lawsuits alleging that its withdrawn Bextra painkiller and widely used Celebrex arthritis drug harmed U.S...
Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Oct 2008 | 12:01 pm

Buffett Flashes the Green Light

Forget about waiting for Jamie Dimon to stand up for the stock market. The oracle of Omaha has spoken

Amid the darkest days since the 1987 crash, the American bull — Warren Buffett — has taken the challenge by the horns and declares in an op-ed article in the New York Times today that now is the time to buy American stocks.

Fear has been gripping the market for months, he acknowledges. But that is a signal to buy.

“Fears regarding the long-term prosperity of the nation’s many sound companies make no sense,” he says.  “These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.”

“Be fearful when others are greedy, and be greedy when others are fearful,” is his maxim.

The next few months — and even the next year — may be ugly, he acknowledges “What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.”

Buffett makes clear he is talking his own book – his own personal investments, not buying for his holding company Berkshire Hathaway.

While Buffett has become a celebrity and elder statesman in the last two decades — appearing on CNBC, talk shows, and even playing himself on a soap opera — he has rarely made pronouncements on the stock market. His past op-ed articles over the last three decades, in the New York Times and the Washington Post, dealt with issues like corporate accounting, stock options, deposit insurance, soft campaign contributions, the trade deficit, and corporate raiders.

His most famous message on the market was a warning, not an exhortation to invest. In several speeches and an article in Fortune magazine in 1999, Buffett warned about overvalued stocks and the possibility of a bubble. His skepticism, amid the near-universal hype about the Internet and technology stocks at that time, is a defining episode in the first authorized biography of Buffett,  The Snowball.

And the fact that Buffett chose the sober editorial pages of the New York Times, which have not been as friendly to Wall Street and business, as say the pages of the Wall Street Journal or other publications, speaks volumes.

These are challenging times, and no one is going to listen to another rah-rah, bullish on America message that Wall Street firms like Merrill Lynch have been pitching for years. The economy is in a recession and, yes, it will take time for the government interventions. But what Buffett is saying is this: the American economy has a future. We need to start thinking about it again.

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Would You Buy a Bridge From Warren Buffett?
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Source: Portfolio.com: Top 5 | 17 Oct 2008 | 12:00 pm

Buffett says he's buying U.S. stocks: report

(Reuters) - Billionaire investor Warren Buffett is buying U.S. stocks, he wrote in an opinion column in the New York Times.

Source: Reuters: Business News | 17 Oct 2008 | 11:57 am

Buffett says he's buying U.S. stocks: report

(Reuters) - Billionaire investor Warren Buffett is buying U.S. stocks, he wrote in an opinion column in the New York Times.
Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Oct 2008 | 11:57 am

Top 10 Pre-Market Analyst Upgrades (BWA, CSTR, ESRX, JNPR, M, MAS, NSR, SKS, SYMC, UNH)

These are ten of the top Wall Street analyst upgrades we are seeing from this Friday morning with more than two hours to the open:

• Borg Warner (BWA) Raised to Buy at Goldman Sachs.
• Coinstar (CSTR) Raised to Neutral from Sell at Goldman Sachs.
• Express Scripts (ESRX) Raised to Overweight at Thomas Weisel.
• Juniper Networks (JNPR) Raised to Buy at UBS.
• Macy's (M) Raised to Overweight at JPMorgan.
• Masco (MAS) Raised to Neutral from Sell at UBS.
• NeuStar (NSR) Raised to Outperform at Baird.
• Saks Inc. (SKS) Raised to Neutral at JPMorgan.
• Symantec (SYMC) Raised to Outperform at FBR.
• UnitedHealth (UNH) Raised to Buy at Goldman Sachs.

Jon C. Ogg
October 17, 2008

Source: 24/7 Wall St. | 17 Oct 2008 | 11:49 am

Bulgaria eyes LNG imports from Yemen

SOFIA, Oct 17 (Reuters) - Bulgaria will hold talks over the potential import of liquefied natural gas (LNG) from Yemen to diversify its gas supplies, the Bulgarian economy and energy ministry said on Friday...
Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Oct 2008 | 11:47 am

Schlumberger earnings climb, but slowdown looms

NEW YORK (Reuters) - Schlumberger Ltd , the world's largest oilfield services company warned on Friday that the credit crisis and softening global economy would dampen energy spending into next year.

Source: Reuters: Business News | 17 Oct 2008 | 11:44 am

Singapore story

High fuel costs a worry as The Box arrives
Source: BBC News | Business | World Edition | 17 Oct 2008 | 11:41 am

Rumor: Yahoo! (YHOO) To Cut 3,000 Jobs

Believe what you will. Reports from Valleywag say that stories appeared in Fortune and at Google News saying that consultants from Bain, which is helping Yahoo! (YHOO) look at its business, have suggested that the portal company cut 3,000 people.

There will be no one left to work on the AOL merger.

The rumored target date is December 10. Yahoo! is expected to have lackluster earnings for the third quarter.

Douglas A. McIntyre

Source: 24/7 Wall St. | 17 Oct 2008 | 11:41 am

UPDATE 1-Pozen says FDA reviewing main goal of trials

Oct 17 (Reuters) - Pozen Inc said U.S. health regulators are conducting an internal review on the acceptability of using endoscopic gastric ulcers as a main goal in clinical studies and it was unsure...
Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Oct 2008 | 11:41 am

UPDATE 2-Schlumberger earnings climb, but slowdown looms

* Quarterly earnings meet Wall Street forecasts (Adds details on earnings, outlook, background, share price)
Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Oct 2008 | 11:38 am

UPDATE 1-Northstar, Farallon interested in Bumi stake -sources

SINGAPORE/HONG KONG, Oct 17 (Reuters) - Indonesian private equity firm Northstar Pacific and U.S. hedge fund Farallon Capital are among investment firms interested in a stake in Indonesia's top coal miner...
Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Oct 2008 | 11:37 am

Comerica profit falls 85 percent

NEW YORK (Reuters) - Comerica Inc , a large U.S. regional bank, said on Friday that third-quarter profit fell 85 percent, hurt by the deteriorating housing market and a charge to buy back auction-rate securities.

Source: Reuters: Business News | 17 Oct 2008 | 11:34 am

Schlumberger revenue up 24% as oil sinks

Source: Business and financial news - CNNMoney.com | 17 Oct 2008 | 11:32 am

Driving an Auto Merger

Look who's driving the snowball's-chance-in-hell merger talks between General Motors and Chrysler: their banks.

The lenders for the two troubled automakers are pushing for a deal, the Wall Street Journal says, in an effort to reduce their exposure to the auto sector.

The behind-the-scenes role of the lender here underscores the focus of the banks on their own self-preservation. They may be a target of the public's wrath, and they may be the recipients of taxpayers' money, but as Megan Barnett of Portfolio.com reports, the banks for now are only looking out for No. 1.

Again, J.P. Morgan Chase is at the center of things. J.P. Morgan and Citigroup represent Chrysler and its private equity owner Cerberus Capital Management, the Journal says. (Morgan Stanley and Evergreen Partners represent General Motors.) Not content with reshaping the financial landscape, Jamie Dimon & Co. could soon be overhauling the industrial landscape.

A deal, still a fifty-fifty chance at best, would revolve around G.M. swapping its 49 percent stake in its former financing arm, G.M.A.C.

The value of G.M.A.C. to G.M. has clearly diminished. Bloomberg News reports that G.M.A.C. has become much tighter about lending, prompting G.M. to start an advertising campaign to assure car buyers that they can find financing elsewhere.

With its cash evaporating and its share price sinking, General Motors clearly needs to do something fast, as the New York Times reported on Thursday.

Its chief executive Rick Wagoner "faces the prospect of cutting a deal for Chrysler or perhaps another automaker—or possibly going down in history as the executive who presided over G.M.'s demise," the Times said.

Related Links
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Source: Portfolio.com: Top 5 | 17 Oct 2008 | 11:30 am

Indian airline sector 'to shrink'

Half of India's airlines could disappear during the current downturn, Air India boss Raghu Menon tells BBC News.
Source: BBC News | Business | World Edition | 17 Oct 2008 | 11:21 am

Lehman executives including Fuld subpoenaed: report

(Reuters) - Prosecutors have subpoenaed a dozen executives of Lehman Brothers Holdings Inc including Chief Executive Dick Fuld in connection with three grand jury probes investigating the fall of the investment bank, the New York Post reported.

Source: Reuters: Business News | 17 Oct 2008 | 11:16 am

Lehman executives including Fuld subpoenaed: report (Reuters)

Reuters - Prosecutors have subpoenaed a dozen executives of Lehman Brothers Holdings Inc including Chief Executive Dick Fuld in connection with three grand jury probes investigating the fall of the investment bank, the New York Post reported.

Source: Yahoo! News: Business | 17 Oct 2008 | 11:16 am

Oil prices edge above $70

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 17 Oct 2008 | 11:09 am

Deutsche Bank chiefs shun bonuses in crisis

Senior executives at Deutsche Bank, Germany's biggest lender, will forego their million-euro bonus packages in a sign of "solidarity" with staff during the financial crisis.
Source: Latest Business News from Times Online | 17 Oct 2008 | 10:50 am

ING shares dive more than 20 percent

AMSTERDAM (Reuters) - Shares in Dutch financial services group ING dived more than 20 percent on Friday, and asset managers said the move was triggered by reports on ING's capital position.

Source: Reuters: Business News | 17 Oct 2008 | 10:40 am

Ukraine in Talks With IMF on Financial Stabilization

An IMF mission is in Ukraine to see how it can help cushion the effects of the global financial crisis.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Oct 2008 | 10:36 am

Toyota Goes To “Zero Percent” Financing As Its Sales Go To Hell

Toyota is not supposed to have to give out any incentives to sell its cars. They perform better than other vehicles in customer satisfaction tests. They get good gas mileage. Toyota virtually invented the hybrid and its Prius has sold over one million units worldwide.

The Japanese firm says it is going to use it balance sheet to further cripple other car companies selling vehicles in the US. It will begin to offer “zero percent” financing on a number of its models.

Toyota says its new effort is “aimed at boosting the auto maker's market share at the expense of its struggling Detroit-based rivals, according to The Wall Street Journal.

But, who leaves money on the table? The fact of the matter is that Toyota sales in the US this year are off almost as much as GM’s (GM). Its Japanese rivals Honda (HMC) and Nissan are picking up market share in America.

Toyota is now the No. 2 seller of cars in the US, having taken that distinction from Ford (F). It is not plagued by the same troubled the big three. It has 15% of the American car market. Getting more share is harder as the company’s piece gets larger. Its success also makes it the target of every other player in the field.

When Toyota aspired to be the market leader, it still had room to grow and most of its peers did not have to pay it a tremendous amount of attention.

Now, it is the most imitated auto firm in the world.

Douglas A. McIntyre

Source: 24/7 Wall St. | 17 Oct 2008 | 10:28 am

French savings bank in €600m trading loss

Caisse D'Epargne, one of France's biggest savings banks, made a €600m loss when the market crashed last week after a team of derivatives traders made unauthorised bets
Source: FT.com - US homepage | 17 Oct 2008 | 10:10 am

Armed Robbery At The Fed: Bank Problems Are Getting Worse (C)(MER)(JPM)(UBS)

Source: 24/7 Wall St. | 17 Oct 2008 | 10:09 am

Anger at China toy firm closure

Workers protest against the closure of a Chinese toymaker which has gone out of business with the loss of up to 7,000 jobs.
Source: BBC News | Business | World Edition | 17 Oct 2008 | 9:59 am

The dark side of lower prices

Stock prices have plunged in recent weeks. So have oil prices.

Source: Business and financial news - CNNMoney.com | 17 Oct 2008 | 9:54 am

Google (GOOG) Earnings: A Perfect Proxy For Small Business

Source: 24/7 Wall St. | 17 Oct 2008 | 9:42 am

Sportsvision ups the ante

With $25 million in revenue, not much of a web presence, and headquarters in Chicago, Sportvision is not what you'd call a high-profile tech darling. But if you've watched a televised sporting event in the past decade, you know the company's products.

Source: Business and financial news - CNNMoney.com | 17 Oct 2008 | 9:41 am

French bank admits trading loss

The French bank Caisse d'Epargne admits that it lost 600m euros in a derivatives trading incident.
Source: BBC News | Business | World Edition | 17 Oct 2008 | 9:39 am

Shazam comes out of the shadows

Have you ever been out with friends at a bar and heard one of those seventies songs like "Play That Funky Music, White Boy" by a one-hit band whose name none of you could recall?

Source: Business and financial news - CNNMoney.com | 17 Oct 2008 | 9:27 am

Caisse d’Epargne admits €600m derivatives loss

Caisse d’Epargne, the French savings bank, today admitted that it had lost €600 million (£466.3 million) through a "trading incident", becoming the third European bank since January to declare a huge loss related to deals involving derivatives.
Source: Latest Business News from Times Online | 17 Oct 2008 | 9:24 am

Lower House of German Parliament Approves Bailout

Germanys lower house of parliament overwhelmingly approved a $675 billion rescue package for the countrys financial markets, clearing the way for approval in the upper house later in the day.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Oct 2008 | 9:21 am

Chinese fund may raise Blackstone stake

China Investment Corp., the government's sovereign wealth fund, may raise its stake in U.S. investment group Blackstone LP after the two agreed to boost the Chinese company's ownership limit.

Source: Business and financial news - CNNMoney.com | 17 Oct 2008 | 8:50 am

Media Digest 10/17/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

According to Reuters, policy makers around the world are trying to deal with the fact that the economy is moving into a deep recession.

Reuters writes that Google (GOOG) exceeded forecasts and its shares rose.

Reuters reports that banks borrowed $438 billion a day from the Fed last week, a record.

Reuters reports that many executives saw conditions weakening before the crash.

Reuters reports that IBM (IBM) had impressive earnings and said it was looking to emerging markets for growth.

Reuters reports that AIG (AIG) asset sales are not going well.

Reuters writes that Cerberus is in talks with GM (GM) and Renault about the future of Chrysler.

Reuters reports that Microsoft (MSFT) said an ad deal with Yahoo! (YHOO) may still make sense.

Reuters writes that a weakening US jobs market points to a recession.

Reuters writes that large institutional investors are slowly pushing up their stock purchases.

The Wall Street Journal reports that lenders to GM (GM) and Chrysler are eager for a merger.

The Wall Street Journal reports that the door is open for the Fed to cut rates further.

The Wall Street Journal reports that the financial crisis may diminish the US sway over the international economy.

The Wall Street Journal reports that more hedge funds are being forced to liquidate positions to handle redemptions.

The Wall Street Journal reports that AIG (AIG) and NY Attorney General Cuomo have come to an agreement about investigating compensation at the insurance company.

The Wall Street Journal reports that Nike (NKE) says that Wal-Mart (WMT) copied it shoes.

The Wall Street Journal reports that fuel hedges hurt some airline results

The Wall Street Journal reports that the economic crisis is dropping the price of oil.

The Wall Street Journal reports that housing starts were probably lower in September.

The Wall Street Journal reports that consumer sentiment is likely to take a hit.

The Wall Street Journal reports that Schlumberger (SLB) earnings may take a hit on oil prices.

The Wall Street Journal reports that some mutual funds hung on to financial shares and were hurt.

The Wall Street Journal reports that Toyota (TM) will push "no interest" loans.

The Wall Street Journal reports that AMD (AMD) narrowed its loss.

The Wall Street Journal writes that Medtronic's (MDT) new stent was found not to be effective.

The New York Times reports that banks are likely to hand on to bailout money and not improve lending.

The New York Times writes that Southwest (LUV) had its first loss in 17 years.

The FT reports that the IMF is ready to stabilize Ukraine

The FT reports that hedge funds are in the grip of a vicious selling cycle.

Douglas A. McIntyre

Source: 24/7 Wall St. | 17 Oct 2008 | 7:57 am

London rises following Wall Street rally

London shares recovered today, following a late night rally on Wall Street that helped repair some of the damage wreaked across Asian markets yesterday.
Source: Latest Business News from Times Online | 17 Oct 2008 | 7:48 am

Asia Markets And Europe Open 10/17/2008

Markets in Asia were mixed.

The Nikkei was up 2.8% to 8,694. NTT DoCoMo rose 7% and NTT was up 8%.

The Hang Seng fell 1.4% to 15,012..

The Shanghai Composite rose 1.1% to 1,931.

In Europe, the FTSE opened up 1.7% to 3,927. The DAX was up 4.1% to 4,811 and the CAC 40 rose 1.4% to 3,225.

Data from Reuters

Douglas A. McIntyre

Source: 24/7 Wall St. | 17 Oct 2008 | 7:28 am

S Korean won edges higher but fears remain

South Korea's currency rose nearly 3 per cent, a day after suffering its worst one-day plunge for a decade, but fears remained that the country might become Asia's first victim of the global financial crisis as the central bank was forced to provide local banks with additional dollar liquidity
Source: FT.com - US homepage | 17 Oct 2008 | 7:28 am

Inchcape to cut £55 million in costs

Inchcape, the car dealer with franchises for BMW, Mercedes Benz, Honda and Toyota, is to embark on a multi-million pound cost cutting drive to offset the "significant" deterioration of the UK market. It said other markets were weakening.
Source: Latest Business News from Times Online | 17 Oct 2008 | 7:15 am

Misery loves company at Realtors expo

Industry pros gather to compare scars, trade survival tips and try to have some fun. Get thousands of real estate...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Oct 2008 | 7:00 am

Stocks rally as oil prices drop below $70 a barrel

The Dow closes up 401.35 points, or 4.7%, after declining more than 300 points earlier in the day. Another day,...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Oct 2008 | 7:00 am

Falling oil prices give consumers a break

It might not prompt Americans to spend, but the drop in oil prices -- now below $70 a barrel -- could help many stay afloat.

Oil prices coughed up all of their 2008 gains and then some Thursday, stopping only after crashing below the $70-a-barrel barrier, a level not seen since the summer of 2007.

Source: L.A. Times - Business | 17 Oct 2008 | 7:00 am

Oil falls below $70 a barrel

With stockpiles up and demand down, observers speculate that U.S. benchmark crude, now at a level not seen since the summer of 2007, could go as low as $50 a barrel before the end of the year. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Oct 2008 | 7:00 am

Calls grow for global banking regulator

The U.S.. skeptical of intervention from outside its borders, may compromise if the economy worsens.

The global financial crisis has forced world leaders to do almost unimaginable things in recent weeks, including buying up near-worthless securities and forcing tax dollars on reluctant lenders. Now the Bush administration is considering calls for something the United States and other major powers have long resisted: creating an international system to watch over the world's banks.

Source: L.A. Times - Business | 17 Oct 2008 | 7:00 am

Economic turmoil puts municipal bonds, projects in a bind

Governments and schools are delaying their plans or paying higher interest rates to attract investors.

As flocks of disenchanted Californians streamed across the border in the last decade, drawn by central Oregon's crystal-clear skies, ski slopes, small-town charm and affordable homes, Redmond has been hastily assembling portable classrooms and scrambling to build another high school.

Source: L.A. Times - Business | 17 Oct 2008 | 7:00 am

Stocks rally as oil prices drop below $70 a barrel

The Dow closes up 401.35 points, or 4.7%, after being down 380 points earlier in the day.

Another day, another 800-point swing in the Dow Jones industrial average.

Source: L.A. Times - Business | 17 Oct 2008 | 7:00 am

Falling oil prices give consumers a break

It might not prompt Americans to spend, but the drop in oil prices -- now below $70 a barrel -- could help many stay afloat. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Oct 2008 | 7:00 am

Calls grow for global banking regulator

The U.S.. skeptical of intervention from outside its borders, may compromise if the economy worsens. The global...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Oct 2008 | 7:00 am

Citigroup posts loss of $2.8 billion in 3rd quarter

Citigroup Inc., suffering its fourth straight quarterly loss and forfeiting the title of largest U.S. bank by assets, is falling behind in the historic reshuffling of the U.S. banking system.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Oct 2008 | 7:00 am

Southwest Airlines posts first loss in 17 years

Continental also reports a third-quarter loss. Southwest Airlines Co. posted its first quarterly loss in 17 years...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Oct 2008 | 7:00 am

Southland office vacancies rise, rents fall

Experts see trouble ahead as the region shows signs of the economic slowdown. Even in desirable Santa Monica, vacancies have almost doubled from last year.

In a sign that the economic slowdown is affecting Southern California businesses, the rents on office space are down slightly over last year, and vacancy rates are up.

Source: L.A. Times - Business | 17 Oct 2008 | 7:00 am

Currency: Dollar gains against the greenback

The New Zealand dollar gained against the greenback and other major currencies in local trading today, but dealers expect the kiwi's downtrend to continue. The kiwi was on US61.81c at 5pm today - up from its opening level and low...
Source: New Zealand Herald - Business | 17 Oct 2008 | 5:53 am

The rapture of the hypercar

The Corvette ZR1 burns oil for a good cause: awesome power and agility

Dear Future: We're really, really sorry. Kinda got carried away, what with all the petroleum and all. You're probably wishing that we had saved a few barrels of oil for you, for airline travel and making fertilizer. And those little plastic swim fins would come in handy, now that Greenland has melted.

Source: L.A. Times - Business | 17 Oct 2008 | 4:48 am

Asian consortium in $4 billion swoop on mining company$

With commodities prices plunging and resource stocks under huge selling pressure, a consortium of big Japanese and Korean steelmakers is poised for a daring $4 billion ($£2.3 billion) swoop on one of Brazil’s largest iron-ore mining companies. The Asian consortium’s ambitious stake-building exercise directly exploits the current market turmoil and offers rare glimmer of opportunity for the world’s largest steelmakers.
Source: Latest Business News from Times Online | 17 Oct 2008 | 4:34 am

Commodity bear market now worse than stocks' slide

Source: L.A. Times - Business | 17 Oct 2008 | 4:22 am

Fonterra's San Lu venture facing bankruptcy, says Chinese report

The Sanlu joint venture into which New Zealand dairy farmers have ploughed nearly $200 million in China may be wound up. Dairy cooperative Fonterra has claimed it retains an estimated $62 million worth of its investment - written...
Source: New Zealand Herald - Business | 17 Oct 2008 | 4:00 am

What Jamie Dimon Must Do

Twenty-one years ago this month, the world's financial markets were in a tailspin. The 508-point, or 23 percent, collapse of the Dow Jones industrial average on October 19, 1987, left investors frenzied after the worst one-day percentage drop in history.  

"Panic!" screamed the New York Daily News headline, and the broadcast news wasn't much better. "Today's precipitous plunge struck fear in the hearts and pocketbooks of even Wall Street veterans," reported Tom Brokaw on the NBC Nightly News, just hours after the market closed that day.

Investors nervously monitored Wall Street in the days following the sell-off. But at Merrill Lynch, which had already bought commercial time during that week's World Series, the communications staff hatched a novel idea. They figured it would be unthinkable to air an ad that ignored recent market events, so they approached Merrill's chairman and C.E.O., William Schreyer, to record a new commercial, one that would address the subject on everybody's mind. 

"I knew that as the firm that 'brought Wall Street to Main Street,' Merrill Lynch would need to step forward and communicate with the public," Schreyer says in his soon-to-be-published memoir. "What we did and said would have a big impact."
 
Schreyer, who led Merrill from 1984 to 1993, agreed to do it. So on October 22, 1987, during ABC's Game 5 World Series telecast of the St. Louis Cardinals' 4-2 victory over the Minnesota Twins, and just three days after Black Monday, 38 million TV viewers saw this:

"A Message from Merrill Lynch."

Then, Schreyer spoke.

"I'm here for some straight talk about the stock market. It's important to everyone. It provides capital that creates jobs to make America grow.

Emotions can run high during market turbulence, just when reason should prevail.

We are confident in the markets. We've stayed active in them for all investors.

America's economy is the strongest in the world, with great ability to bounce back.

At Merrill Lynch, we're still bullish on America."

Schreyer’s "message" was a home run. And, while it's impossible to measure its effectiveness, it's not a stretch to believe the ad comforted Americans with a sober yet optimistic view of the markets, straight from the corner office.

By now, everybody knows our current "perfect storm" markets saga. To be sure, today's financial trauma is decidedly different from that of a generation ago. However, if there's one common thread between 1987 and 2008, it's that a crisis of confidence has carried whatever fundamental problems exist to painful extremes.

More and more, a stunned public looks for the Schreyer-like statesman from the world of finance who will inspire and soothe frayed psyches. I've come up with a short list of two: Warren Buffett or Jamie Dimon.

Buffett, everybody's favorite billionaire, projects a humble, homespun voice of reason. And there's no question his investments in Goldman Sachs and General Electric exhibit the put-your-money-where-your-mouth-is trust these roller-coaster markets sorely need. However, at 78, Buffett projects Wilford Brimley—the grandfather whose admonishments are followed by a quick smile and a pat on the head.

Dimon, the young-ish, dashing C.E.O. of J.P. Morgan, who has demonstrated vision (avoiding risk on mortgages and C.D.O.'s) and guts ("rescuing" Bear Stearns). With J.P. Morgan's Zelig-like market presence, the 52-year-old Dimon could confidently articulate a message of realistic hope to investors.  

Coincidentally, this year's World Series is scheduled to begin on October 22, 21 years to the day since Schreyer's commercial first aired.

While hardly an anniversary worth celebrating, it would be fitting to see our generation's leading financial titan step up to the plate and tell America something like this:

"Over the past year, the global markets have taken all of us on a harrowing ride. Simply put, the world's financial system cracked as too much credit was provided to too many people who couldn't afford it.

With tremendous help and courage from leaders in the public and private sectors in the U.S. and around the world, corrective steps have been taken to fix the system.

While it's unrealistic to think all will be well in the near-term, these are the proper steps.

Nobody could fault you for thinking, "I don't trust the markets anymore." However, that would be a mistake. You see, money isn't the only commodity that makes markets work; we also need confidence.

We need for people to believe that their savings are secure, and that sensible, fundamental financial planning and investment is the best way to safeguard their portfolios so they can retire comfortably and send their children to college.

Why should people trust this system? Because history tells us that the financial markets are the engine that generates the funds required to build our schools, bridges, and hospitals, as well as providing the capital for all of the amazing technological advancements we've witnessed over the past few decades.

Yes, we'd be foolish to ignore the lessons learned from our recent financial travails. It's clear that a system built in the 20th century worked for the 20th century.

But now, I believe we've successfully restructured our markets to reflect our needs for today, and more importantly, for tomorrow."

The world needs Dimon to assume the Schreyer mantle, and I’d advise him to act now.

Rich Silverman is the senior partner at media relations firm Silverman Communications Group, a strategic communications advisory firm.

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Source: Portfolio.com: Top 5 | 17 Oct 2008 | 4:00 am

America for Sale: Price Reduced

Got cash? This could be one of history's quintessential buying opportunities.

Source: SmartMoney.com | 17 Oct 2008 | 4:00 am

Peters calls for urgent interest rate cut

NZ first leader Winston Peters has joined John Key in calling for an immediate interest rate cut. Peters said today the Reserve Bank should cut rates now and not wait until its next scheduled announcement on October 23. He...
Source: New Zealand Herald - Business | 17 Oct 2008 | 3:30 am

Sub-prime scandal heading for US criminal courts

LOS ANGELES- The top federal prosecutor in Los Angeles indicated today that charges will be filed in the coming months in a sweeping investigation of banks and subprime lenders for their role in the nation's mortgage crisis. "I...
Source: New Zealand Herald - Business | 17 Oct 2008 | 3:00 am

Strategic Finance rescue deal terminated

A plan for Strategic Finance's management to buy the company from Australia's Allco HIT with the support of Bank of Scotland International has been terminated, leaving Strategic's future in the hands of its banker and trustee. The...
Source: New Zealand Herald - Business | 17 Oct 2008 | 1:05 am

Strategic Finance sale, restructure is off

The sale by Australian investment company Allco HIT of Strategic Finance's parent, Strategic Investment Group, is off. Strategic Finance said today it understood that satisfying some of the conditions of the sale and purchase agreement...
Source: New Zealand Herald - Business | 17 Oct 2008 | 1:00 am

Google's profit rises 26%

Internet advertising giant Google reported a strong increase in sales and a bigger profit than expected despite the current economic slump.

Source: Business and financial news - CNNMoney.com | 17 Oct 2008 | 12:40 am

Home-Loan Help Lags, As More Borrowing Goes Bad

Foreclosures helped spark financial world turmoil. But efforts to curb them, widely seen as needed to stabilize the housing market and support...

Source: Investor's Business Daily: BUSINESS | 17 Oct 2008 | 12:36 am

After The Close - Thursday

INTUITIVE SURGICAL (ISRG), a maker of medical devices, said its Q3 EPS rose 38.5% to $1.44, beating views by 17 cents. Sales jumped 50% to $236...

Source: Investor's Business Daily: BUSINESS | 17 Oct 2008 | 12:36 am

Drug Maker Gets Its Mojo Back With A New Osteoporosis Drug

Is Amgen snapping out of its funk?

Source: Investor's Business Daily: BUSINESS | 17 Oct 2008 | 12:36 am

In Brief - Thursday

Microsemi (MSCC), a chipmaker, backed its Q4 EPS target of 35-37 cents ex items, in line with views. Shares surged 9.9% to 21.87.

Source: Investor's Business Daily: BUSINESS | 17 Oct 2008 | 12:36 am

Trends & Innovations - Thursday

Thumb drive security improving

Source: Investor's Business Daily: BUSINESS | 17 Oct 2008 | 12:36 am

Business Briefs - Thursday

Continental beats, delays orders. The airline posted a Q3 loss of $1.32 a share, better than views of a $1.55 loss. Revenue gained 9% to $4.16...

Source: Investor's Business Daily: BUSINESS | 17 Oct 2008 | 12:36 am

Telecom mobile funding scheme raises Elliot concern

Telecom shareholder Elliott International has raised concerns about the way Telecom intends paying for its new mobile network announced on Wednesday. "Does the (Telecom) board seriously believe that issuing more stock, with the...
Source: New Zealand Herald - Business | 17 Oct 2008 | 12:30 am

Oil prices hit 14 month low, OPEC mulls production cuts

NEW YORK - Oil prices closed at a new 14-month low beneath $US70 a barrel overnight, bringing its price to less than half its July record high after the government reported massive increases in US crude and petrol stockpiles. Investors...
Source: New Zealand Herald - Business | 17 Oct 2008 | 12:30 am

IMF ready to help stabilise Ukraine

The credit crisis deepened as Hungary and Ukraine turned to international institutions in an effort to avoid following Iceland into financial turmoil and US industrial production suffered its largest monthly decline since 1974
Source: FT.com - US homepage | 17 Oct 2008 | 12:00 am

US combat troops could exit Iraq by 2012

The US and Iraq have reached agreement on a draft security accord that would pave the way for US combat troops to leave Iraq by the end of 2011, officials said
Source: FT.com - US homepage | 16 Oct 2008 | 11:27 pm

Fortress fights to save value of ski resort

Fortress Investment Group, a listed alternative investor with $40bn under management, is taking action aimed at keeping two of the companies it owns afloat, according to people familiar with the situation
Source: FT.com - US homepage | 16 Oct 2008 | 10:59 pm

California raises $5bn to avoid crisis

California has narrowly averted a cash crisis after successfully raising $5bn in the credit markets, with most of the money coming from retail investors who answered a rallying call from Arnold Schwarze­negger.
Source: FT.com - US homepage | 16 Oct 2008 | 10:59 pm

Treasury plan pushes up US mortgage rates

US mortgage rates have soared this week in an unexpected reaction to the latest Treasury financial rescue plan, which has prompted investors to buy bank debt and sell bonds backed by home loans
Source: FT.com - US homepage | 16 Oct 2008 | 10:31 pm

NZ Shares: Market up after crazy Wall St night

The New Zealand sharemarket has opened up slightly this morning, after a strange night on Wall St saw shares plunge down, then finish the day trading up nearly 5 per cent. The benchmark NZX-50 index is now up 54 points at 2819....
Source: New Zealand Herald - Business | 16 Oct 2008 | 10:30 pm

Bloomberg's Torres Discusses Asset Bubbles, Monetary Policies

Source: Bloomberg - All Podcasts | 16 Oct 2008 | 10:27 pm

VIX Index of U.S. Stock Option Prices Retreats 2.4% to 67.61

Source: Bloomberg - All Podcasts | 16 Oct 2008 | 10:23 pm

New Zealand workers catching the Wall Street blues

Giant materials manufacturer and distributor Fletcher Building has shed 600 workers in the past three months but a further 200 jobs could go at PlaceMakers if the economy continues to deteriorate. Jonathan Ling, Fletcher chief...
Source: New Zealand Herald - Business | 16 Oct 2008 | 10:00 pm

Hedge funds in grip of vicious selling cycle

Hedge funds rush to sell holdings to return money to worried investors has triggered further price declines and prompted more withdrawals
Source: FT.com - US homepage | 16 Oct 2008 | 9:55 pm

Wall Street stocks soar in late trade

US stocks endured extreme volatility and a late afternoon rally pushed the market sharply higher, led by energy groups even as oil slid below $70 a barrel
Source: FT.com - US homepage | 16 Oct 2008 | 9:04 pm

Princeton's Blinder Says Fed Rate Unlikely to Fall Below 1%

Source: Bloomberg - All Podcasts | 16 Oct 2008 | 8:51 pm

Goldman Says Housing Continues to `Erode' Financial System

Source: Bloomberg - All Podcasts | 16 Oct 2008 | 8:47 pm

Trust is a victim in the financial crisis

Banks don't trust each other. Investors don't trust the market. And, people think their mattresses are the safest place for cash. Tess Vigeland talks with Kai Ryssdal about trust, the subject of a special weekend show.
Source: Marketplace | 16 Oct 2008 | 8:21 pm

Mark Cuban and his bid to buy the Cubs

Mark Cuban, the brash billionaire entrepreneur and owner of the Dallas Mavericks, is among the top bidders for the Chicago Cubs. Kai Ryssdal calls on ESPN's Gene Wojciechowski to ask: Who is this guy?
Source: Marketplace | 16 Oct 2008 | 8:21 pm

Blog: State boosts debt sale to $5 billion and sets final yields

Source: L.A. Times - Business | 16 Oct 2008 | 7:58 pm

Nike sues Wal-Mart for patent infringement (AP)

AP - Nike Inc. has sued Wal-Mart Stores Inc., alleging the giant retailer is selling shoes that infringe on Nike's patented designs.

Source: Yahoo! News: Business | 16 Oct 2008 | 7:47 pm

Morgan Stanley's Roach Says Fed `Condoned' Asset Bubbles

Source: Bloomberg - All Podcasts | 16 Oct 2008 | 7:45 pm

Former SEC chief rips agency on meltdown (AP)

AP - Arthur Levitt, the one-time chairman of the Securities and Exchange Commission, blamed his former agency Thursday for failures he said helped cause the financial meltdown.

Source: Yahoo! News: Business | 16 Oct 2008 | 7:44 pm

Oil Analyst Kloza Comments on Price Drop Below $70

Source: Bloomberg - All Podcasts | 16 Oct 2008 | 7:12 pm

How the Banks Will Spend Their Loot

Nine large U.S. banks are preparing to receive $125 billion from the Treasury Department as part of the government's plan to recapitalize the banking sector and reignite lending.

Treasury Secretary Henry Paulson has urged the banks to use the capital to start lending again, but the government's equity stakes come with no power to influence how they actually spend it. For weeks, the Feds have tried one measure after another to spur lending, to no avail.

Skeptics wondered if this plan would yield any different results. One by one, the banking executives are addressing this question publicly. So far, it doesn't look good for Paulson, or the frozen credit market. They'll take the money, alright, but they evidently see a more urgent need to improve their balance sheet than to start lending again.

Here's an exchange on an earnings call with Bank of New York Mellon chief executive Robert Kelly:

Brian Foran, Goldman Sachs:

As we think about this capital injection you're getting from the government, is that capital that you view as capital to be deployed or is that just capital you view to be sat on in terms of bolstering the current capital ratios?

Robert Kelly, Bank of New York:

I think the latter. This is an environment where we have a lot of uncertainty and it's really good to have some revenue growth. It's been good expense control in this environment to help our earnings, and obviously we're not going to be raising dividends because of this new injection. This will just be something that, in essence, strengthens our balance sheet and I don't intend to be using it.

And here's Merrill Lynch chief executive John Thain, who won't have much control over his funds once the merger with Bank of America is approved:

The capital injection is a cushion and in this environment I think you will see us continue to shrink our assets and continue to improve and de-risk our balance sheet. That capital cushion will provide an opportunity. It will be really after the merger closes. I think you really have to think about it more from the point of view of the combined companies, which of course will have $25 billion of this capital injected into it. I think we will have the ability to re-deploy that on a combined basis going forward, but at least for the next quarter, it's just going to be a cushion.

On CNBC today, Morgan Stanley's John Mack didn't offer a lot more hope:

David Faber: Are you going to put it out into the system or are you going to happily sit on it and bring your leverage ratios down?

John Mack: Well, clearly we're going to bring our leverage ratios down a little more. As far as sitting on it, I think what we need is confidence in the system. For these banks to be capitalized that well, they're not going to go out and play big casino with that money.

In other words, banks won't lend until there's confidence in the system, and Hank Paulson is trying to inject confidence in the system by investing this money in them. It's enough to make your head hurt.

However, one executive has indicated the money will spur lending at his organization. Golden boy Jamie Dimon over at J.P. Morgan is once again looking like the teacher's pet:

John McDonald, Sanford C. Bernstein:

On the government's plan with the preferred, do you expect them to be restrictive on how banks deploy the capital or pretty much free reign for the banks to use their discretion subject to—?

Jamie Dimon, J.P. Morgan Chase:

It's a non-voting preferred, so we don't expect the government to get involved in our business. But it's clear that the government would like us to use the capital to facilitate clients, to make loans and stuff like that and we want to do that, too, so I think we have a common interest in this.

 

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Source: Portfolio.com: Top 5 | 16 Oct 2008 | 7:00 pm

Is a company hurt when its shares fall?

When a stock falls, investors have a pretty good idea that it means less money for them. But what does it mean for the company? Do falling shares affect its bottom line? Marketplace's Jeff Tyler finds out.
Source: Marketplace | 16 Oct 2008 | 6:45 pm

FDIC chair speaks out against bailout

FDIC Chairwoman Sheila Blair is publicly criticizing the administration's $700 billion bailout package, saying it doesn't do enough to help Americans facing foreclosures. Sarah Gardner reports.
Source: Marketplace | 16 Oct 2008 | 6:45 pm

Southwest's hedge on fuel backfires

At first, it looked like Southwest Airlines hedged its bets well when it prepaid for fuel because prices were going up. Unfortunately, now oil prices are falling. Janet Babin has more on Southwest and airlines in general.
Source: Marketplace | 16 Oct 2008 | 6:45 pm

Hedge fund failures a dangerous sign

A growing number of hedge funds have gone from big winners to big losers. Highland Capital Management is shutting down two of them, blaming "unprecedented market volatility." Senior Business Correspondent Bob Moon reports.
Source: Marketplace | 16 Oct 2008 | 6:45 pm

Former board member's take on the Fed

Have we made the turn from planning a bailout to managing the recession? What's next for interest rates? For answers to these and other questions, Kai Ryssdal turns to former Fed Board member Frederic Mishkin.
Source: Marketplace | 16 Oct 2008 | 6:45 pm

Unused cash piling up at the Fed

When banks don't lend to each other one side effect is that hundreds of billions of dollars in cash can pile up -- unused -- at the Federal Reserve Bank. Steve Henn reports that may not be a good sign for the economy.
Source: Marketplace | 16 Oct 2008 | 6:44 pm

Lindsay Says EBay's Acquisitions to Stimulate Business

Source: Bloomberg - All Podcasts | 16 Oct 2008 | 5:29 pm

Standard Chartered's Lyons Cites Need to Face Recession

Source: Bloomberg - All Podcasts | 16 Oct 2008 | 5:16 pm

Blog: Wall St. looks for 'W' to signal selling is done

Source: L.A. Times - Business | 16 Oct 2008 | 4:42 pm

Zelizer Says Presidential Debate Won't Change Polls

Source: Bloomberg - All Podcasts | 16 Oct 2008 | 3:10 pm

Linking Risk, Rewards, and Reserves

Denouncing what sounds like a reality TV show, Australian Prime Minister Kevin Rudd is pledging to rein in "extreme capitalism" by tying financial institutions' reserve requirements to the perceived risk of their executive compensation plans.

"What we have seen is the comprehensive failure of extreme capitalism—extreme capitalism, which now turns to government to prevent systemic failure," Rudd said in a speech at the National Press Club in Canberra. He added, "the collapse of this house of cards has had devastating consequences both for financial markets and for the real economy."

He pledged his administration will do what it can to resolve the problem—he said "when markets fail, governments must act"—but he added that Australia would try a novel approach to preventing a repeat of the problem.

Regulators, he said, would flag firms that create executive pay packages that encourage "short-term returns or excessive risk-taking," and would require them to set aside more capital in reserve than their more prudent rivals.

Rudd has summoned Australia's leading executives to a summit tomorrow to lay out his plan for bailing out the country's financial system and taking steps to avoid a repeat of the problem in the future. Presumably, he will then suggest how regulators would define "excessive" risk taking and an overemphasis on short-term returns. He gave no details in his speech.

"Financial institutions needed to have clear incentives to promote responsible behavior rather than unrestrained greed," Rudd said, repeating an idea he made at the United Nations General Assembly last month.

Ultimately, he added, he hopes Australia can "design a template that could be adopted by the international authorities—a template that links capital adequacy requirements to executive remuneration in a way that acts against excessive risk-taking in our financial institutions."

He preemptively dismissed opposition from the private sector to the idea of increasing regulators' oversight of corporate strategy.

"The champions of extreme capitalism have been found to have feet of clay," Rudd said. "As a government and as a nation we must respond to the twin evils, which are at the root of this malaise—greed and fear. Fear is the first of these demons, which we must see off. Dealing with the greed which has caused the fear will come after that."Related Links
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Source: Portfolio.com: Top 5 | 16 Oct 2008 | 3:00 pm

Citi's Black Hole

It's still ugly for Citigroup: a third-quarter loss of $2.8 billion and another round of loan-related write-downs, losses, and charges totaling $13.2 billion.

But the bad numbers were much smaller than feared, adding to the hopes spurred by the solid results from J.P. Morgan Chase and Wells Fargo that the troubled banking industry may at last be steadying.

Steady for Citi is a fairly relative concept. It staggers from quarter to quarter, cutting jobs and shedding assets and taking billions of markdowns. Ratings agencies continue to question the quality of the assets on its books.

The chief executive, Vikram Pandit, has overhauled the executive ranks and has been downsizing the bank and cutting risk. In the last quarter alone, 11,000 jobs (about 3 percent of its workforce) and some $50 billion in assets were shed—roughly the equivalent of a midsize American corporation.

"While our third-quarter results reflect both a difficult environment as well as continued write-downs on our legacy assets, we are making excellent progress on the parts of our business we control, including expense reduction, head count, and balance sheet and capital management," Pandit said in a statement. "We expect these improvements will enable us to realize the full earnings power of our franchise as the economy stabilizes."

Throwing ballast overboard during a storm is one thing. Steering the supertanker that is Citi into more favorable waters is quite another.

In its one strategic gambit of late, seeking to acquire the banking operations of Wachovia, Citi came off the loser, seeing Wells Fargo swoop in to clinch a deal.

There are no easy solutions for a bank that failed to sparkle even during a boom. This will be a long, scary turnaround, even with assistance from the Treasury Department and the Federal Reserve.

As a rival, Jamie Dimon of J.P. Morgan put it on Wednesday, "If you are not fearful, you are crazy."

Over the last four quarters, Citi has lost $20.2 billion.

In the third quarter, the bank took a write-down of $2 billion of structured-investment-vehicle assets, a write-down of $1.15 billion on Alt-A mortgages, a write-down of $166 million on auction-rate securities, a write-down of $919 million on exposure to bond-insurance agencies, and another $1.7 billion of write-downs on loans and other investments.

It had $4.9 billion in net credit losses and took a charge of $3.9 billion to increase loan-loss reserves.

 

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Source: Portfolio.com: Top 5 | 16 Oct 2008 | 12:30 pm

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