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MFI 'at risk of administration'Furniture retailer MFI could be forced into administration unless its landlords agree to a rent-free period, a trade union warns.Source: BBC News | Business | World Edition | 26 Nov 2008 | 1:09 pm Trying to end the mortgage rate lagBad news is good news for Treasury investors, and recently, there has been a whole lot of bad news. Mortgage rates, however, have not fallen with Treasury yields, but an $800 billion government bailout could change all of that.Source: Business and financial news - CNNMoney.com | 26 Nov 2008 | 1:07 pm Stock futures sink on gloomy outlooks (Reuters)
Source: Yahoo! News: Business | 26 Nov 2008 | 1:04 pm Deere fourth-quarter profit falls; flat sales seen for fiscal '09Deere's fourth-quarter net income falls 18% because of higher raw-material costs and greater business expenses, financial results show. The manufacturer of tractors and other machinery also offers up cautious targets for fiscal 2009.Source: MarketWatch.com - Top Stories | 26 Nov 2008 | 1:04 pm Earnings Watch: Updates, advisories and surprisesA roundup of the latest corporate earnings reports and what companies are saying about future quarters.Source: MarketWatch.com - Top Stories | 26 Nov 2008 | 1:01 pm Deere fourth-quarter net profit fallsNEW YORK (Reuters) - Deere & Co , the world's biggest farm equipment maker, posted a lower quarterly net profit on Wednesday, as lower commercial and consumer demand and sharply lower profit in its financial services division overshadowed higher machinery sales.Source: Reuters: Business News | 26 Nov 2008 | 12:57 pm Deere fourth-quarter net profit falls (Reuters)Reuters - Deere & Co , the world's biggest farm equipment maker, posted a lower quarterly net profit on Wednesday, as lower commercial and consumer demand and sharply lower profit in its financial services division overshadowed higher machinery sales.Source: Yahoo! News: Business | 26 Nov 2008 | 12:57 pm Obama picks Volcker to head economic groupPresident-elect Barack Obama will name former Federal Reserve Chairman Paul Volcker as the head of a special economic advisory group, sources tell CNN.Source: Business and financial news - CNNMoney.com | 26 Nov 2008 | 12:55 pm China slashes rates, EU launches stimulus planLONDON (Reuters) - Massive stimulus plans to drive the world out of recession took center stage on Wednesday with the European Union considering a 200 billion euro boost and China announcing its biggest interest rate cut in 11 years.Source: Reuters: Business News | 26 Nov 2008 | 12:51 pm Top Pre-Market Analyst Downgrades (BBL, CBE, CPRT, DT, GPC, MPW, SAP, TRIN)
Jon C. Ogg Source: 24/7 Wall St. | 26 Nov 2008 | 12:47 pm What Obama would buildAmerica may soon get a whole lot of new stuff.Source: Business and financial news - CNNMoney.com | 26 Nov 2008 | 12:43 pm Top Pre-Market Analyst Upgrades (EQIX, HLS, ITRI, MPEL, RTP, RTIX, UL, WSM)
Jon C. Ogg Source: 24/7 Wall St. | 26 Nov 2008 | 12:37 pm Tiffany posts lower profit (Reuters)Reuters - Tiffany & Co posted a lower quarterly profit on Wednesday, hurt by weak domestic sales, and the upscale jeweler slashed its full-year outlook, citing the economic uncertainty.Source: Yahoo! News: Business | 26 Nov 2008 | 12:36 pm Tiffany posts lower profitNEW YORK (Reuters) - Tiffany & Co posted a lower quarterly profit on Wednesday, hurt by weak domestic sales, and the upscale jeweler slashed its full-year outlook, citing the economic uncertainty.Source: Reuters: Business News | 26 Nov 2008 | 12:36 pm Abu Dhabi firms set up new UAE mortgage lender (AP)AP - Five state-run and publicly traded companies in Abu Dhabi are launching a new mortgage provider as the credit crunch threatens to stifle the United Arab Emirates' property boom.Source: Yahoo! News: Business | 26 Nov 2008 | 12:35 pm Retailers fire opening shots in VAT price warTesco and John Lewis fired the opening shots in a price war today by pledging to pass on the 2.5 percentage point cut in VAT to customers three days early.Source: Latest Business News from Times Online | 26 Nov 2008 | 12:35 pm Europe announces 200bn-euro planThe European Commission unveils an economic recovery plan, which will total 200bn euros (£170bn), 1.5% of the EU members' GDP.Source: BBC News | Business | World Edition | 26 Nov 2008 | 12:33 pm Baby StepsIn this dismal economic environment, a little bit of good news can go a long way. And that's exactly what emerged yesterday after the government announced its latest plan to jumpstart lending.The Federal Reserve's plan to buy $600 billion worth of mortgage backed securities and debt from Fannie Mae and Freddie Mac sent mortgage rates down significantly yesterday, which spurred the most interest in refinancing home loans than the brokerage market has seen in a year. Rates on 30-year fixed mortgages fell by around 50 basis points to 5.5 percent. While it's still too early to quantify the lending activity, the Wall Street Journal reported anecdotal evidence that refinancing volume spiked yesterday. Bank of America's call volume doubled and some mortgage brokers said they had the most activity they've seen in a year. While that anecdotal evidence is positive, it's far too early to declare victory. Refinancing existing loans could help homeowners struggling to pay their adjustable mortgages and could even stave off some foreclosures. But it's not clear if the lower rates will go far enough to incite new buyers to enter the housing market. Yesterday, the latest Case-Shiller housing numbers showed that home prices fell by nearly 17 percent in September. But there were other signs the credit market was pleased with the Fed's latest move. The spreads on Fannie and Freddie debt over Treasuries tumbled to their lowest level since October, Bloomberg reports. And the cost to insurance against default on corporate bonds and securities backed by commercial mortgages also fell. When you throw everything but the kitchen sink at a problem, something is eventually going to stick. Related Links The Fed Turns Up the Tap Welcome to the Impasse Cue the Optimists Source: Portfolio.com: Top 5 | 26 Nov 2008 | 12:30 pm Woolworths suspends trading pending possible sale (AP)AP - Shares in Woolworths Group PLC were suspended on Wednesday at little more than a penny each as the century-old retailer held last-ditch discussions with potential buyers.Source: Yahoo! News: Business | 26 Nov 2008 | 12:28 pm Rio Tinto says on track on major asset salesSYDNEY/MELBOURNE (Reuters) - Global miner Rio Tinto Ltd said on Wednesday it was confident it could sell assets worth billions of dollars to pay down massive debt, despite concerns about a lack of buyers, a day after rival BHP Billiton Ltd dropped a bid for the firm.Source: Reuters: Business News | 26 Nov 2008 | 12:25 pm Rough start seen for stocksU.S. stocks were poised for a rough start Wednesday, ahead of a barrage of reports expected to reinforce the dismal outlook for the economy.Source: Business and financial news - CNNMoney.com | 26 Nov 2008 | 12:24 pm Iceland inflation soars to 17.1%The annual rate of inflation in Iceland escalates to a record high of 17.1% as the country battles the worst financial crisis in its history.Source: BBC News | Business | World Edition | 26 Nov 2008 | 12:21 pm Movers & Shakers: Wednesday's biggest gaining and declining stocksStocks expected to move significantly in trading on Wednesday include AIG, Borders, HSBC, McCormick, NN, NRG and Rio Tinto.Source: MarketWatch.com - Top Stories | 26 Nov 2008 | 12:17 pm Wall Street futures point lower, economic data in focus(Reuters) - Futures for the S&P 500, the Dow Jones industrial average and the Nasdaq 100 are down 0.7-1.2 percent on Wednesday.Source: Reuters: Business News | 26 Nov 2008 | 12:14 pm Clock is ticking for PaulsonNow the clock is really ticking for Henry Paulson.Source: Business and financial news - CNNMoney.com | 26 Nov 2008 | 12:08 pm LandAmerica files for Chapter 11 bankruptcy protection(Reuters) - Title insurer LandAmerica Financial Group Inc said it has filed for bankruptcy protection and its bigger rival Fidelity National Financial Inc will buy two of its underwriting units.Source: Reuters: Business News | 26 Nov 2008 | 12:06 pm Mortgage applications rose 1.5% last week: MBAMortgage applications rise a seasonally adjusted 1.5% in the latest week, due to a bump in loans sought for home purchases. Further increases appear likely as the U.S. government's most recent moves to spur greater housing lending take hold.Source: MarketWatch.com - Top Stories | 26 Nov 2008 | 12:00 pm Troubled empireMystery of alleged detention of China's richest manSource: BBC News | Business | World Edition | 26 Nov 2008 | 11:56 am Brussels proposes €200bn stimulusThe European Union urged member countries to push for higher growth in an effort to bolster the region's economies, even if this means that government deficits temporarily bust normally-acceptable limitsSource: Financial Times - US homepage | 26 Nov 2008 | 11:49 am Need a job? Debt collection is boomingAs the economy sinks deeper into a slump, Americans find it tougher to come up with extra money to chip away at their debts. And as the debt piles up, more consumers are getting calls from debt collectors looking for payment.Source: Business and financial news - CNNMoney.com | 26 Nov 2008 | 11:44 am EU countries urged to fund €200bn rescue planCountries across Europe will be encouraged to follow Britain's lead in borrowing massively to fund a stimulus to beat the slump as part of an EU recovery plan worth €200 billion.Source: Latest Business News from Times Online | 26 Nov 2008 | 11:44 am Hiring horrors: Napping in CEOs officeFolks, this can't be cheering news for job hunters, but lots of companies big and small have declared hiring freezes lately - and most of their managers, it seems, are breathing sighs of relief.Source: Business and financial news - CNNMoney.com | 26 Nov 2008 | 11:42 am Indications: U.S. stock index futures slipU.S. stock index futures were under pressure Wednesday morning, signaling a lower open for Wall Street after three days of gains.Source: MarketWatch.com - Top Stories | 26 Nov 2008 | 11:42 am China makes biggest rate cuts for decadeChina has announced the biggest interest rate cut in more than a decade as the country's central bank took aggressive policy steps to prevent a slump in the world's fourth largest economySource: Financial Times - US homepage | 26 Nov 2008 | 11:40 am Clothes and holiday spending downFigures show UK families had started to spend less on package holidays and clothing before the credit crunch took hold.Source: BBC News | Business | World Edition | 26 Nov 2008 | 11:38 am When Toyota (TM) Has A Rating Cut, The Auto Business Really In Trouble
According to Reuters, Fitch Ratings on Wednesday downgraded Toyota's long-term foreign and local debt ratings to AA from AAA, with a negative outlook, saying the company needed to review its global investments, product mix and speed of expansion to address the challenges it faces. The news may be worse for Detroit than it seems at first. Toyota has been seen as a possible buyer of divisions or assets from GM (GM), Ford (F), or Chrysler. Raising the money to do that just got a bit more difficult. Detroit has fewer and fewer options as the cash balances of the US car companies head to zero. A purchase of all of part of an American auto firm would allow a number of jobs to be saved, dealers to stay in business, and warranties to be honored. The Toyota downgrade is bad for The Big Three. Douglas A. McIntyre Source: 24/7 Wall St. | 26 Nov 2008 | 11:30 am Online shopping spend in declineFor the first time since it began compiling figures, measurement firm find online spending is down.Source: BBC News | Business | World Edition | 26 Nov 2008 | 11:29 am London Markets: Oil producers fall in lower LondonLondon-listed shares pull back from early losses to trade in a tight range on Wednesday, with losses for oil producers offsetting gains in the mining sector.Source: MarketWatch.com - Top Stories | 26 Nov 2008 | 11:28 am Private equity firm KKR plans Telvent bid: paperMADRID (Reuters) - U.S. private equity group KKR is planning a bid for Abengoa's Nasdaq-listed technology unit Telvent GIT , Expansion reported on Wednesday citing sources familiar with the deal.Source: Reuters: Business News | 26 Nov 2008 | 11:25 am Household spending falls fastest since 1995The economy shrank by 0.5 per cent between July and September, new figures confirmed today, after household spending recorded its biggest fall since 1995 and manufacturing activity slowed.Source: Latest Business News from Times Online | 26 Nov 2008 | 11:23 am Why Microsoft fails onlineStruggle? You don't normally think of that word applying to the company Bill Gates founded. But there it is: Microsoft, one of the most aggressively competitive, brainiac-attracting, technologically superior, and oh, yes, cash-gushingly profitable companies of all time, can't for the life of it make a dime on the Internet.Source: Business and financial news - CNNMoney.com | 26 Nov 2008 | 11:21 am Will The $800 Billion Work?
Some analysts don't think the program will work. It will be another chance for financial firms to take federal money and sock it away to bolster their capital positions. According to Bloomberg, “We are sort of spitting in the wind,” said Michael Darda, chief economist at MKM Partners LP in Greenwich, Connecticut. “Banks won’t be throwing a lot of loans out there when they fear -- rationally -- those loans may not be paid back.” Maybe Darda was turned down for a car loan. Douglas A. McIntyre Source: 24/7 Wall St. | 26 Nov 2008 | 11:21 am Mourning China
It will dwarf the economies of the US, EU, and Japan. China's GDP has been growing fast enough to make its preeminence a reasonable deduction, at least until it is not. China cut is bank lending rate by the largest amount in eleven years. According to Bloomberg, "The key one-year lending rate will drop 108 basis points to 5.58 percent, the People's Bank of China said on its Web site today. The deposit rate will fall by the same amount to 2.52 percent." It seems remarkable that a country with a GDP that is supposed to grow at 10% would have a bank funds rate at well under 6%. As a matter of fact, it would seem desperate. The analysts at the World Bank still seem to believe that China will grow at 7.5% next year. That is a big come down for a place used to double digits. It is also almost certainly too optimistic. The math is all wrong. Most of the developed world where China sends its exports is supposed to see GDP contraction for the next three or four quarters. If the recession grows remarkably deep and long, the contraction could be severe and prolonged. How does a nation which supplies contracting economies grow at nearly 8%? On the back of an envelope, it can't. Some economists would argue that the consumer consumption rate within China will keep its GDP on a relatively strong ascent. The new middle class there is one hundred million people strong. The logic is thin. Once the demand for China's goods begin to falter, so will employment rates in the world's most populated country. The middle class will begin to dissolve as quickly as it formed. Consumer spending will be driven into the dirt. China is not China anymore. At least not economically. Douglas A. McIntyre Source: 24/7 Wall St. | 26 Nov 2008 | 11:14 am Porsche sees sales dropping 15% as slowdown bitesGerman sports car maker Porsche Automobil Holding says Wednesday that sales are likely to fall close to 15% in the first four months of its fiscal year as demand for high-end cars slumps.Source: MarketWatch.com - Top Stories | 26 Nov 2008 | 11:11 am Thai army chief tells government to goThailand's army chief has told the elected government to step down and call a snap election as a way out of a deepening political crisis after anti-government protesters took over the country's international airportSource: Financial Times - US homepage | 26 Nov 2008 | 11:07 am Currencies: Dollar mixed as risk aversion returnsThe U.S. dollar was mixed versus major counterparts Wednesday, clawing back some of the previous day’s sharp losses as risk appetite appeared to wane.Source: MarketWatch.com - Top Stories | 26 Nov 2008 | 11:03 am AIG (AIG): Recycling Debt Without Paying Anyone Back
According to MarketWatch, "American International Group Inc. the New York insurer, closed its $40 billion stock placement with the U.S. Treasury under the government's Troubled Assets Relief Program, the company said late on Tuesday." "AIG said it would use the proceeds to reduce its borrowings outstanding under the credit agreement the Federal Reserve Bank of New York extended to the insurer in September." AIG is not the only practitioner of this art. Now that a number of banks have received Treasury investments, with Citigroup (C) at the head of that list, they are still hitting the Fed’s short-term lending window, the “emergency” window set up for banks to trade crummy assets for real cash. The government does not like to release data on the borrowers, or any information on financial companies that it can withhold for that matter. The stigma might be too great and investors and customers might get frightened like horses in a thunder storm. The government has the singular distinction of loaning money it may never get back and hiding the facts of how the lending has been apportioned. The average citizen gets to pay for something which he neither understands nor can identify. The economy could still be faced with a wave of rolling defaults from the very institutions that the government has funded. Banks may still face substantial write-offs from consumer debt and their exposure to mortgage derivatives. The Fed and Treasury will be up against preventing defaults which would undermine the value of their own loans. The only answer—more money. Cure the default by risking another one down the road. AIG is on the road to Perdition. The Fed is going with it Douglas A. McIntyre. Source: 24/7 Wall St. | 26 Nov 2008 | 11:00 am SectorWatch.biz Issues MarketStats for Healthy and Organic Companies CNOA, WFMI, AMNT, COIN, OTGOE, and TOFIRVINE, Calif., Nov. 26 /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 | 26 Nov 2008 | 11:00 am Oil steady near $51Read full story for latest details.Source: Business and financial news - CNNMoney.com | 26 Nov 2008 | 10:57 am Europe Markets: Shares in Europe decline as banks, oil weigh; Alcatel-Lucent upEuropean shares snap a two-session winning streak on Wednesday, as banks and oil majors give back a portion of recent gains, although telecom equipment maker Alcatel-Lucent and caterer Compass Group manage to buck the lower trend.Source: MarketWatch.com - Top Stories | 26 Nov 2008 | 10:53 am Paulson Tells Insurance Companies That There Is No Room At The Inn
The insurance industry fancies itself as one of the major buyers of corporate bonds. Its logic for getting capital is that, if it does not, the market for corporate debt will dry up. Paulson can probably see that the approach has two flaws. The first is that the issuance of corporate debt has crawled to a stop. The interest rates for access to capital are too high. Some deals are being done at “junk” rates, but the companies involved are needy to the point where they cannot do without the money. That makes them less than worthy investments. The other bit of lost logic is that insurance companies are buyers of corporate debt, but so are pension funds, mutual funds, hedge funds, and funds of all sorts. What happens if insurance companies begin to fail? The answer is old news. The government will step in to cover policies and citizens will not have to worry that their orphans will be penniless. The government may not be able to save every person or every industry, but the family without income always seems to find a way in. According to Reuters, "In recent months, life insurers have scaled back the size of investments, trimmed dividends to hold on to cash and girded for further losses and possible rating downgrades, which would trigger higher capital requirements." And, fail they may leaving their customers to be saved by the Age of the Bailout. Douglas A. McIntyre Source: 24/7 Wall St. | 26 Nov 2008 | 10:51 am Gazprom says will do best to maintain Ukraine gasMOSCOW, Nov 26 (Reuters) - Russian gas export monopoly Gazprom said on Wednesday it will try its best not to switch off gas supplies to Ukraine over gas debts, its spokesman told a conference call.Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Nov 2008 | 10:46 am Data confirms UK economy shrinkingThe UK economy did indeed shrink 0.5% between July and September, the Office for National Statistics confirms.Source: BBC News | Business | World Edition | 26 Nov 2008 | 10:44 am China slashes rates to kick-start slowing economyThe People's Bank of China Wednesday slashes its lending and borrowing rates by more than 1%, in addition to cutting banks’ reserve requirements sharply, to deliver its strongest response yet to a recent slowdown in the mainland’s economic growth.Source: MarketWatch.com - Top Stories | 26 Nov 2008 | 10:38 am EU, China, US unleash global assault on crisis (AFP)
Source: Yahoo! News: Business | 26 Nov 2008 | 10:33 am PKN to pay 50 pct of free cashflow in dividend-CFOWARSAW, Nov 26 (Reuters) - Poland's oil company PKN Orlen wants to pay at least half of its free cashflow in dividends, its Chief Financial Officer Slawomir Jedrzejczyk told a news conference on its 2009-2013...Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Nov 2008 | 10:29 am Britvic's profit falls, but sales growth strongSoft drinks maker Britvic PLC, the British bottler for PepsiCo Inc., said Wednesday its annual net profit fell 25 percent, largely because of one-time costs including a factory closure. ...Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Nov 2008 | 10:25 am Indonesia says big market should spur drug makers to invest moreJAKARTA, Nov 26 (Reuters) - Indonesia's huge market for prescription drugs should encourage foreign pharmaceutical firms to set up production plants in the country and comply with a new government decree,...Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Nov 2008 | 10:21 am Compass Group's full-year profit down 14 percentCompass Group PLC, the world's largest catering company, reported Wednesday that profit fell 14 percent in the year ending Sept. 30 due to fewer sales of assets compared with a year...Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Nov 2008 | 10:21 am Millions, Billions, Trillions: Perspective on the Numbers from a Lottery ExpertLAS VEGAS, Nov. 26 /PRNewswire/ -- We've been reading less about "millions" lately, and more about "billions" and "trillions," concerningSource: Infocious RSS raw feed - channel BNewsBusiness | 26 Nov 2008 | 10:20 am Roche unit files for Avastin extension in JapanZURICH, Nov 26 (Reuters) - Chugai Pharmaceutical, a unit of Roche Holding AG , said on Wednesday that it had filed for an extension for the group's block-buster drug Avastin.Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Nov 2008 | 10:13 am Sarkozy, Merkel urge swift action to boost economyThe leaders of France and Germany on Wednesday called for quick action within the European Union to halt an economic downturn with measures such as an injection of state funds for small...Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Nov 2008 | 10:11 am PKN Orlen sees $1.4 bln in 2009 capex-CFOWARSAW, Nov 26 (Reuters) - Poland's oil company PKN Orlen plans around 4 billion zlotys ($1.37 billion) in capital expenditure in 2009, its Chief Financial Officer Slawomir Jedrzejczyk said on Wednesday...Source: Infocious RSS raw feed - channel BNewsBusiness | 26 Nov 2008 | 10:08 am Oil rises as Russia threatens cutThe cost of oil rises slightly after Russia says it may join producers' cartel Opec in cutting output to support crude prices.Source: BBC News | Business | World Edition | 26 Nov 2008 | 10:00 am Borders Inc ' no longer for sale'US-based bookseller Borders says it is no longer for sale despite reporting widening third-quarter losses.Source: BBC News | Business | World Edition | 26 Nov 2008 | 9:54 am Toyota debt rating cut, Suzuki holds out hope for GM (Reuters)
Source: Yahoo! News: Business | 26 Nov 2008 | 9:44 am Toyota debt rating cut, Suzuki holds out hope for GMTOKYO (Reuters) - Toyota Motor Corp had its top-notch credit ratings cut for the first time in a decade, hitting its shares and raising borrowing costs as an unprecedented slowdown reshapes the global auto industry.Source: Reuters: Business News | 26 Nov 2008 | 9:44 am China's central bank cuts ratesChina's central bank cuts the country's interest rates for the fourth time since mid-September in order to stimulate growth.Source: BBC News | Business | World Edition | 26 Nov 2008 | 9:38 am Rio chairman defends group's debt positionPaul Skinner, chairman of the global miner, says he was confident the group could sell billions of dollars in assets to pay down massive debt, despite concerns about a lack of buyersSource: Financial Times - US homepage | 26 Nov 2008 | 9:11 am Get ready for a stock market bounceAs the stock market convulses in 400-point spasms, holding to a steady course takes a lot of nerve. For some encouragement - and a few timely stock picks - we turned to Jeff Mortimer, chief investment officer of Charles Schwab's mutual funds unit.Source: Business and financial news - CNNMoney.com | 26 Nov 2008 | 9:08 am LandAmerica files for Chapter 11 bankruptcy protection (Reuters)
Source: Yahoo! News: Business | 26 Nov 2008 | 8:09 am Mitchells & Butlers scraps final dividendMitchells & Butlers (M&B), owner of the All Bar One and Harvester chains, this morning scrapped the final dividend and its plans to convert the business into Real Estate Investment Trust (REIT) as full-year losses swell to £238 million.Source: Latest Business News from Times Online | 26 Nov 2008 | 8:03 am Economic woes hit Ireland hardIreland is in its worst recession in a quarter-century, and European Union policies are hampering recovery. When...Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Nov 2008 | 8:00 am Economic woes hit Ireland hardIreland is in its worst recession in a quarter-century, and European Union policies are hampering recovery.When Ireland entered the world's most ambitious economic alliance -- the European Union -- more than a decade ago, the Celtic Tiger roared to life. Membership in Europe's private club, along with the subsequent adoption of the euro, lured scores of multinational companies to this country and ushered in an unprecedented era of growth. Source: L.A. Times - Business | 26 Nov 2008 | 8:00 am MySpace Music names Courtney Holt as presidentMySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies.Source: L.A. Times - Business | 26 Nov 2008 | 8:00 am Frugal Santas find ways to stretch gift budgetsClearance sales, thrift stores and online outlets are just a startCourtney Hamilton's mound of credit card debt turned her into a first-rate penny pincher this year. But as the holiday gift-giving season approaches, her finances may force her to really switch on her inner Scrooge. Source: L.A. Times - Business | 26 Nov 2008 | 8:00 am Henry Paulson announces $800 billion more in federal aid on financial crisisAmong the initiatives unveiled by the Treasury secretary is a $200-billion program to help ease the credit pinch for consumers in three areas: student loans, automobile purchases and credit cards.The federal government's new $800-billion initiative to revive the nation's credit markets and reverse the deepening economic crisis propels the government into risky territory -- the uncertain world of credit cards, student borrowing, auto loans and cash-strapped small businesses. Source: L.A. Times - Business | 26 Nov 2008 | 8:00 am Getting more bang for our bailoutIn exchange for billions of dollars in rescue funds, taxpayers should get to do some serious housecleaning at mismanaged companies. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Nov 2008 | 8:00 am McDonald's to mothers: Healthy fast food is not an oxymoronThe burger chain emphasizes nutrition and quality in a targeted marketing campaign it hopes will turn into a word-of-mouth wave.The only obstacle between kids and their French fries: Mom. Source: L.A. Times - Business | 26 Nov 2008 | 8:00 am Getting more bang for our bailoutIn exchange for billions of dollars in rescue funds, taxpayers should get to do some serious housecleaning at mismanaged companies.Man, I'm getting tired of this. Source: L.A. Times - Business | 26 Nov 2008 | 8:00 am Brazil's housing boom shows cracksEffects of the credit crisis and a drop in consumer spending are felt in several sectors. Just weeks ago, Brazil's...Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Nov 2008 | 8:00 am Home prices keep plunging; L.A. sees some of the sharpest declinesThird-quarter figures show a 27.6% drop compared with a year earlier. Phoenix, Las Vegas and San Francisco are also hit hard.U.S. home prices continued to fall at a record-breaking pace in the third quarter, with the Los Angeles area posting among the sharpest declines, according to a prominent index released today. Source: L.A. Times - Business | 26 Nov 2008 | 8:00 am Home prices keep plunging; L.A. sees some of the sharpest declinesThird-quarter figures show a 27.6% drop compared with a year earlier. Phoenix, Las Vegas and San Francisco are also hit hard. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Nov 2008 | 8:00 am As mortgages went bad, executives cashed outWhile Irvine subprime lender New Century was failing, key executives continually changed their stock trading plans and often sold within days of colleagues' trades, a Times investigation shows.The subprime lending industry was starting to buckle under the weight of bad loans in November 2006, when executives at Irvine-based New Century Financial Corp. held a conference call to release their latest earnings. Source: L.A. Times - Business | 26 Nov 2008 | 8:00 am Brazil's housing boom shows cracksEffects of the credit crisis and a drop in consumer spending are felt in several sectors.Just weeks ago, Brazil's housing market was one of the world's most dynamic. But now, the global credit crisis has set up housekeeping, and government efforts to stimulate buying are being trumped by consumers' fears for the future. Source: L.A. Times - Business | 26 Nov 2008 | 8:00 am Frugal Santas find ways to stretch gift budgetsSource: Infocious RSS raw feed - channel BNPaperBusiness | 26 Nov 2008 | 8:00 am As mortgages went bad, executives cashed outWhile Irvine subprime lender New Century was failing, key executives continually changed their stock trading plans and often sold within days of colleagues' trades, a Times investigation shows. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Nov 2008 | 8:00 am A spotlight on stock trades at New CenturyBefore collapsing last year, New Century Financial Corp. said federal investigators were examining stock trades by its executives. Securities experts say regulators are likely to examine the executives'...Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Nov 2008 | 8:00 am Henry Paulson announces $800 billion more in federal aid on financial crisisAmong the initiatives unveiled by the Treasury secretary is a $200-billion program to help ease the credit pinch for consumers in three areas: student loans, automobile purchases and credit cards. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Nov 2008 | 8:00 am MySpace Music names Courtney Holt as presidentMySpace named MTV executive Courtney Holt as president of MySpace Music, concluding a months-long search for a candidate to run the social network's joint venture with the world's largest music companies...Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Nov 2008 | 8:00 am Safety group issues holiday toy warningIf a plaything fits inside the tube from a toilet roll, it's too small for small children, the U.S. Public Interest Research Group says. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 26 Nov 2008 | 8:00 am The Black Friday Ten: Retailers Who May Not See 2009 (BONT)(DDS)(TLB)(PIR)(CPWM)(WSM)(CHS)(SKS)(EBHI)(RAD)
The most astonishing fact about the retail industry now is that the environment has gotten much worse than it was when each of these businesses began to fail. Sales at stores across the country will be down this holiday season. Some analysts believe that the numbers will be as bad as for any fourth quarter in thirty-five years. Adding to the problem of slow consumer spending brought on by the recession is an unprecedented liquidity crisis. Retailers who need access to capital for inventory, rent, and personnel costs are finding that it is nearly impossible to get access to funds without a pristine balance sheet and a history of substantial positive cash flow. These troubles point to a number of other retail chains going out of business between now and early next year. Sales on Black Friday, the day after Thanksgiving, which is considered the bellwether of holiday sales, will determine the fate of several companies which are now viewed as the weakest operators in the industry. Here is a list of ten companies which may well not make it if their sales drop by double digits this holiday season compared to last: 1. Bon-Ton Stores (BONT) trades at $1.13, down from a 52-week high of $15.06. That probably says all that needs to be said, but there is more. Over its last three fiscal quarters BONT has lost $82 million. In the latest quarter, same-store sales were off over 8% and total revenue was down 7% to $725 million. The company has interest expense of $25 million. BONT says that its revolving credit facility will get it through any cash crunch. Maybe. With long-term debt of $2.5 billion and $374 million in accounts payable, there is not much margin for error. The company needs an outstanding holiday season. 2. Dillard's (DDS) is a retail operator that really is in trouble. It has 318 stores, which makes it a relatively small operation in a world dominated by outfits like Sears (SHLD) which has more than 3000 locations. Dillard's stock is at $3.75, down from a 52-week high of $23.11. S&P dropped the company's credit rating recently and said, "The rating change reflects our belief that the company will be more challenged than previously expected by the current weak economic environment in the U.S., and that credit metrics will deteriorate more than we had originally projected." In October, the firm's sales dropped more than 9% to $406 million. Dillard's points to its revolving credit facility with JP Morgan as its lifeline. In the last quarter, the company lost $38 million. It made $45 million in debt services payments and has long-term debt of $807 million. In other words, no dry powder. It recently cut staff.
4. Pier 1's (PIR) shares are on sale for $.50. A little less than a year ago they would have cost $8.25, making this a remarkable write-down. PIR said its Q3 same-store sales would be down as much as 18%. The firm says it has a $325 million credit facility, but the stock market clearly thinks that is inadequate. The company's guidance for the quarter sent shareholders running for the exits. In the last quarter, revenue fell 7% and the company lost $30 million. Pier 1 pulled its guidance because it believes it cannot predict how much the retail market will deteriorate. With $183 million in debt, it won't take much to tip Pier 1 into insolvency. UBS recently cut its price target on the shares. 5. Cost Plus (CPWM) recently released earnings, and they looked grim. Among other things, the chain said same-store sales could drop 6% in the current quarter. The 296-store retailer predicted poor revenue of as little as $356 million for the period. In the quarter just past, revenue was flat at $213 million and Cost Plus lost $26 million. The firm has $146 million in long-term debt and obligations. Cost Plus pointed out that its credit line borrowings peaked at $125 million in November, well under the limit of the $200 million credit facility. But, that does not leave much room for the company to miss its numbers. The stock trades at $1, down from a 52-week high of $6.22. 6. Williams-Sonoma (WSM) operates 600 stores. The company is doing badly enough that Barclays Capital recently said that it may violate financial covenants on its $300 million credit facility. The retailer made a sharp downward revision in its forecasts. It said it would lose as much as $.12 a share in the third quarter against its previous projection of as much as a $.04 profit. It took its revenue forecast down as low as $732 million. The earlier projection had sales as high as $820 million. WSM also made extremely sharp cuts in its projections for the fourth quarter. Lenders take loan covenants more seriously in a recession than during other periods. WSM has to beat its numbers or face a chance of its lenders pushing for remedies. The CEO recently forced to sell over 60% of shares due to financial obligations.
8. Fitch recently cut its ratings on Saks (SKS) to "B" from "B+", hardly investment grade. The retailer has debt of $649 million. In the last quarter, Saks same-store sales were off almost 12% and got progressively worse as each month in the period went by. Like other weak retailers, Saks is in a race to improve sales and earnings before its debt catches up to it. The firm's stock has dropped to $3.56 from a 52-week high of $22.19. In the last quarter, Saks lost $43 million. In its statement about its financial situation, the company said it believes it has ample flexibility under its existing debt facilities. If Saks' drop-off in revenue continues from last quarter's rate of 12% or gets considerably worse over the holidays, the chain could have a very difficult time keeping all of its stores open. 9. Eddie Bauer's (EBHI) shares trade for $.97, down from a 52-week high of $8.72. The company recently reported an operating loss of $17 million. Revenue dropped slightly to $207 million. The firm has almost 400 stores and outlets. The worst bit of news is that, as of the end of the last quarter, EBHI had only $3 million in cash. It has a $192 million senior term note and $27 million in short term borrowing. It would be nearly impossible to convince investors that EBHI will make it well into next year if sales are poor this holiday season
Merry Christmas Source: 24/7 Wall St. | 26 Nov 2008 | 7:47 am Woolworths suspends shares amid frantic talksShare your best - and worst - memories of WooliesSource: Latest Business News from Times Online | 26 Nov 2008 | 7:41 am Media Digest 11/26/2008According to Reuters, Paulson has turned his back on giving insurance companies part of the bailout Reuters reports that Rio Tinto (RTP) is faced with selling assets, Reuters reports that the head of Citigroup (C) says banks "went wrong" on real estate. Reuters writes that Goldman Sachs (GS) has broken off talks with Panasonic over a possible deal to sell its stake in Sanyo. Reuters writes that the Fed sent another $40 billion to AIG (AIG). Reuters reports that the economy shrank at the fastest pace in seven years. The Wall Street Journal writes that as oil prices are falling oil companies are conserving cash. The Wall Street Journal reports that tech shares may fall further The Wall Street Journal reports that Tivo (TIVO) forecast a loss. The New York Times reports that the great growth engine in China is slowing. The New York Times reports that Morgan Stanley (MS) is working on a makeover as it becomes a bank. The New York Times reports that the first audit of the $700 billion financial rescue plan is expected to be critical of the Treasury Department’s failure to set up ways to track how its bailout money is being used. The FT reports that the FDIC may be low on funds to takeover troubled banks. Bloomberg reports that the Fed risks spiting in the wind with its new $800 billion package. Bloomberg reports that dividends are disappearing at the fastest rate since 1958. Douglas A. McIntyre Source: 24/7 Wall St. | 26 Nov 2008 | 7:28 am Australian stocks: Market closes over two per cent downMELBOURNE - The Australian share market closed around two and a half per cent weaker despite gains in resource giant BHP Billiton and a positive lead overnight from Wall Street. At 1615 AEDT close, the benchmark S&P/ASX200 index...Source: New Zealand Herald - Business | 26 Nov 2008 | 7:05 am Currency: Dollar trades on offshore newsThe New Zealand dollar is generally firmer after the latest US bailout reduced risk aversion. But the currency is struggling to follow through on rallies. It was US54.75c at 5pm from US54.13c at 5pm yesterday. The NZ dollar...Source: New Zealand Herald - Business | 26 Nov 2008 | 6:58 am NZ stocks: Market posts modest gainsThe New Zealand sharemarket posted modest gains as governments continued to move to fix market excesses. US investors were encouraged by a US$800 billion ($1.5 trillion) Federal Reserve plan to buy mortgage-related debt and back...Source: New Zealand Herald - Business | 26 Nov 2008 | 6:43 am Asia Markets 11/26/2008
The Nikkei fell 1.3% to 8,213. The Hang Seng was up 3.3% to 13,302. The Shanghai Composite was up .2% to 1,894. Douglas A. McIntyre Source: 24/7 Wall St. | 26 Nov 2008 | 6:26 am Goldman breaks off talks with Panasonic over SanyoTOKYO (Reuters) - Goldman Sachs has broken off talks with Panasonic Corp for now on selling its stake in Sanyo Electric after the electronics maker made an offer below Sanyo's current stock price.Source: Reuters: Business News | 26 Nov 2008 | 5:40 am Finding Cancer in a Drop of BloodIt hardly seems possible that a single drop of blood will give enough information to diagnose dread diseases such as cancer. Until now, a blood test to determine a patient's cancer risk took several vials of blood and hours or days to analyze, and cost about $500.But a new method, developed by two remarkable labs run by legendary figures in chemistry and life sciences, promises a test that would take about 10 minutes and could cost as little as a nickel. The invention comes from chemist James Heath at the California Institute of Technology and Leroy Hood of the Institute for Systems Biology in Seattle, a pioneering inventor of gene sequencing technologies. Hood says that this technology is a step forward for a new paradigm of health care that he has long advocated, a form of personalized medicine he calls the "4 P's"—predictive, preventive, personalized and participatory medicine. "To make this a reality," Hood says of bespoke medicine, "we need to develop new technologies like this: to provide data on individuals that is cheap, specific and informative." These scientists have founded a company, Integrated Diagnostics, to produce and sell their new blood-drop method. "This company is going to change medicine," says Hood, a scientific co-founder of the biotech giant Amgen and a cofounder of Applied Biosystems and several other companies. The breakthrough uses an "integrated blood barcode chip" designed to separate out proteins from a patient's blood, and to run them through tiny channels coated with strips of DNA bound to antibodies that capture the proteins the researchers are looking for. The targeted proteins are then coated with a material that lights up under a fluorescent microscope. In the current experiment, the researchers were looking for free-floating tumor cells that can sometimes foretell the future advent of cancer. This device is many times more efficient and faster than the traditional methods, which use centrifuges to separate proteins from blood serum and then employ a tedious process of chemical extraction that sometimes takes long enough that the proteins are in danger of degrading. With the new tool a patient's finger is pricked as in a diabetes blood glucose test, and the blood applied immediately to the analysis. "Patients will be able to monitor themselves several times a day like a diabetic taking blood samples," says Hood. Hood's vision is to create a raft of tests with the precision to diagnose a number of emerging diseases by detecting the unique proteins that all the body's major organs deposit into the blood. "We're developing a strategy to identify blood proteins that are organ-specific," says Hood. Next up are proteins for the brain and then liver. The new tests should allow physicians to match patients with specific forms of, say, colon cancer, which could suggest individualized strategies for treatment. Convincing tradition-bound medicine to think this way—to look for dread diseases in advance rather than react to them after they are manifest—is a gargantuan task. "I think it's going to happen, but only if we have the tools that make it inevitable," says Hood. One drawback right now is that the fluorescent microscopes are expensive and bulky, and would not work in small clinics or in homes. But this issue is likely to be worked out. "These devices should lead to a decrease in cost and an incredible benefit to patients," pathologist Emil Kartalov of the University of Southern California's Keck School of Medicine told Technology Review. Kartalov developed some of the blood separation technologies used for the chip, but is not collaborating with Hood and Heath.Related Links Life, Death and New Drugs Diabetes Deal for Medco Statins, Heart Attack and Genes Source: Portfolio.com: Top 5 | 26 Nov 2008 | 5:00 am Sign on the Flashing CursorWith the help of his insurance agent, Frederick W. Long III applied for health-care coverage online a few years ago. Along the way, Long authorized her to type his name in a field on the electronic form and click on a button labeled "I agree." Smaller companies like VeraFirma in Oakland, California, are rolling out Web-based applications where parties to a transaction can log on to a site and view and electronically sign secure and unchangeable documents and contracts. Fruited Plains Foreclosure Rate Is Gathering Steam Good News, Bad News on Foreclosures Source: Portfolio.com: Top 5 | 26 Nov 2008 | 5:00 am ANZ National tightens mortgages - 20pc deposit neededANZ National, the largest bank in New Zealand, is requiring people buying a house to have a 20 per cent deposit. The policy, which applies from tomorrow to new loan applications, is a tightening from its previous position of a...Source: New Zealand Herald - Business | 26 Nov 2008 | 4:31 am Toyota woes deepen with rating downgradeToyota Motor, the world’s biggest automaker and a towering icon of Japanese industrial power, has been stripped of its AAA credit rating under the darkening global economic storm.Source: Latest Business News from Times Online | 26 Nov 2008 | 3:48 am Ex-AIG exec under probe by U.S. prosecutors: report (Reuters)
Source: Yahoo! News: Business | 26 Nov 2008 | 3:43 am Govt stimulus package to inject $7b into NZ economyThe Government's December stimulus package will inject about $7 billion into the economy over two years, Finance Minister Bill English said today. A raft of countries have now announced measures to sort out financial institutions...Source: New Zealand Herald - Business | 26 Nov 2008 | 3:15 am Fed adds $800bn to boost borrowingThe US Federal Reserve escalated its efforts to revive the financial system, pledging $800bn to bolster markets for loans to homebuyers, consumers, students and small businessesSource: Financial Times - US homepage | 26 Nov 2008 | 2:40 am Downey Financial files for Chapter 7 liquidationBANKING Downey files for liquidationSource: L.A. Times - Business | 26 Nov 2008 | 2:06 am AIG praised for freezing executives' salariesAIG has frozen the salaries for its top seven executives, with the chief executive Edward Liddy agreeing to be paid a symbolic sum of $1 for his work this year and nextSource: Financial Times - US homepage | 26 Nov 2008 | 1:59 am AIG gets $40 billion injection from Treasury(Reuters) - American International Group Inc says it has completed completed a $40 billion preferred stock sale to the U.S. Department of Treasury under TARP.Source: Reuters: Business News | 26 Nov 2008 | 1:51 am US unveils new US$800bn financial rescue planThe US government, still struggling to manage a severe financial crisis, unveiled two new programmes overnight (NZ time) that will provide US$800 billion to try to help unfreeze the market for consumer debt from home mortgages to...Source: New Zealand Herald - Business | 26 Nov 2008 | 1:00 am Fonterra's online auctions hurt dairy prices, say Aust farmersFonterra's new online auction system for milkpowder has been partly blamed by Australian dairy farmers for wiping 40 per cent off its price in the past five months. Since Fonterra began the monthly internet-based auctions, known...Source: New Zealand Herald - Business | 26 Nov 2008 | 12:30 am Gates 'to stay as US defence secretary'US defence secretary Robert Gates has agreed to stay on under President-elect Barack Obama and retired Marine Gen. James Jones will be named national security adviser, according to the Politico news websiteSource: Financial Times - US homepage | 26 Nov 2008 | 12:27 am Private-Label Food Maker Buys Post Cereal, Tries To Build Up BrandDon't be surprised if holiday dinner tables get downgraded a bit this season with lower-priced private-label side dishes, cranberry sauces and...Source: Investor's Business Daily: BUSINESS | 26 Nov 2008 | 12:12 am After The Close - TuesdayJ.CREW (JCG), a clothing retailer, said its Q3 EPS fell 28.6% to 30 cents, beating views by 3 cents. Revenue grew 9% to $363 mil. It cut '09 EPS...Source: Investor's Business Daily: BUSINESS | 26 Nov 2008 | 12:12 am In Brief - TuesdayMicrosoft (MSFT), the software giant, had its '09 estimates and price target cut by RBC Capital Markets, which cited uncertain end-of-the-year...Source: Investor's Business Daily: BUSINESS | 26 Nov 2008 | 12:12 am Business Briefs - TuesdayGoogle extends lead in search. Shares of the Web search king rose 10%, as research firms comScore and Nielsen both said Google's GOOG lead in the...Source: Investor's Business Daily: BUSINESS | 26 Nov 2008 | 12:12 am Trends & Innovations - TuesdaySome math teachers falteringSource: Investor's Business Daily: BUSINESS | 26 Nov 2008 | 12:12 am Eclipse Aviation files for Chapter 11Eclipse Aviation, the troubled US pioneer maker of very light, 3-4 passenger corporate jets, collapsed into court-administered Chapter 11 bankruptcy on TuesdaySource: Financial Times - US homepage | 26 Nov 2008 | 12:09 am Dubai's fashionable elite just can't stop shoppingDubai does not have to resort to tax reductions or sales to keep the retail sector booming - it can simply rely on a culture of oneupmanship.Source: Latest Business News from Times Online | 26 Nov 2008 | 12:00 am BHP Billiton and Rio Tinto: the cost of throwing in the towelIt usually takes years for shareholders to discover how much value has been destroyed by an ill-conceived merger. For investors in BHP Billiton and Rio Tinto, the bills have arrived much more quickly.Source: Latest Business News from Times Online | 26 Nov 2008 | 12:00 am India's acquisitive tycoons start selling to raise new fundsBankers expect a wave of asset sales by cash-strapped Indian companies as the country's tycoons struggle to refinance their over-ambitious expansion plans.Source: Latest Business News from Times Online | 26 Nov 2008 | 12:00 am India's acquisitive tycoons start selling to raise new fundsBankers expect a wave of asset sales by cash-strapped Indian companies as the country's tycoons struggle to refinance their over-ambitious expansion plans.Source: Latest Business News from Times Online | 26 Nov 2008 | 12:00 am Global bailouts in numbers - what world governments are pumping inGovernments the world over have this year thrown billions of dollars into their economies in an attempt to stave off the worst of the global recession. Taxes have been cut, benefits increased, infrastructure projects fast-tracked. ...Source: New Zealand Herald - Business | 26 Nov 2008 | 12:00 am NZ to stay in recession through 2009 - OECDNew Zealand's economy will remain in recession all next year before lower interest rates, increased government spending and higher exports help to stimulate gross domestic product growth, according to an OECD report. The Organisation...Source: New Zealand Herald - Business | 25 Nov 2008 | 11:30 pm VIX Index of U.S. Stock Option Prices Retreats 5.9% to 60.90Source: Bloomberg - All Podcasts | 25 Nov 2008 | 11:01 pm IRD tells debtors to ask for helpThe Inland Revenue Department is the creditor that pushes businesses under in around 60 per cent of cases when a company is liquidated by the courts. And as economic hard times bite, the taxman is urging businesses to come forward...Source: New Zealand Herald - Business | 25 Nov 2008 | 11:00 pm Groups in Lehman asset trapSeveral companies reliant on four US hedge funds face collapse because the funds cannot access shares and loans held at the London arm of Lehman Brothers, the collapsed bankSource: Financial Times - US homepage | 25 Nov 2008 | 10:50 pm Jim Rogers Sees Dollar `Devalued,' Likes CommoditiesSource: Bloomberg - All Podcasts | 25 Nov 2008 | 10:03 pm AIG's Frenkel Says Global Collaboration Needed in CrisisSource: Bloomberg - All Podcasts | 25 Nov 2008 | 9:34 pm 'Problem' banks stoke fears over FDIC fundThe list of 'problem' banks grew by almost 50 per cent in the third quarter, the Federal Deposit Insurance Corporation reported, stoking fears that further bank failures could put the agency's insurance fund under severe pressureSource: Financial Times - US homepage | 25 Nov 2008 | 9:23 pm Taking Stock: Health careEven before the economic crisis, health care has been a pressing issue. Kai Ryssdal talks with economist and health-care expert Victor Fuchs about what we, as a society, need to think about in this very tumultuous time.Source: Marketplace | 25 Nov 2008 | 8:52 pm Your opinions, from the Big 3 to TARPKai Ryssdal reviews your letters and comments about a bailout of the Big Three automakers, serial-return shoppers, and a suggested new name for the Troubled Asset Relief Program -- with a stronger acronym.Source: Marketplace | 25 Nov 2008 | 8:52 pm Layoffs leave mark on those left behindWhether layoffs come in bunches or one by one, it's never fun to be on the receiving end. And it's not much better for those who are left behind. Sally Herships reports.Source: Marketplace | 25 Nov 2008 | 8:52 pm Mining company doesn't dig takeoverAbout 18 months ago Australian mining giant BHP Billiton decided it was a good time to get bigger. It launched a hostile bid for its smaller British rival Rio Tinto -- a $200 billion deal. But today BHP walked away. Dan Grech reports.Source: Marketplace | 25 Nov 2008 | 8:52 pm Cost of rescue plan keeps on growingThe Treasury Department's rescue plan is looking a lot different than what was sold to Congress in September. With so much taxpayer money on the line, the tab's getting bigger than lawmakers imagined. Our Washington Bureau Chief John Dimsdale reports.Source: Marketplace | 25 Nov 2008 | 8:52 pm Will economic stabilization act work?In the best-case scenario of the government's latest rescue effort, the Fed buys up outstanding mortgages to get banks lending and consumers spending again. But Senior Business Correspondent Bob Moon asks, Is this going to work?Source: Marketplace | 25 Nov 2008 | 8:52 pm Rescue now targets loans, mortgagesIn the latest installment of the bailout, the Federal Reserve plans to target consumer loans and mortgage-related debt with an $800 billion infusion. It's an effort to get money flowing again in the secondary market that invests in those loans.Source: Marketplace | 25 Nov 2008 | 8:52 pm Case Says Lower-End Housing `Bubble' Needs to DeflateSource: Bloomberg - All Podcasts | 25 Nov 2008 | 8:45 pm Sperling Sees `Significant' Tax Cuts From Obama AdministrationSource: Bloomberg - All Podcasts | 25 Nov 2008 | 8:01 pm Barclays's Coronado Says Fed Facing `Savage Deflationary Force'Source: Bloomberg - All Podcasts | 25 Nov 2008 | 7:40 pm Goldberg Says Citibank Is `Clearly Not Out of the Woods'Source: Bloomberg - All Podcasts | 25 Nov 2008 | 7:34 pm Sinche Sees `Significant Setback' for U.S. Dollar ComingSource: Bloomberg - All Podcasts | 25 Nov 2008 | 7:28 pm Obama Dredges Up Marc Rich’s Ghost With Eric Holder: CommentarySource: Bloomberg - All Podcasts | 25 Nov 2008 | 7:25 pm "Problem Banks" Problem GrowsThink the worst is over? Think again.The Federal Deposit Insurance Corp. said its list of "problem" banks rose to 171 in the third quarter, a 40 percent jump over the 117 troubled institutions it counted in the three previous months. Meanwhile, aggregate profits at all of the commercial banks and savings institutions covered by F.D.I.C. deposit insurance dropped 94 percent in the quarter, to just $1.7 billion from $28.7 billion in the same quarter a year earlier. Industry-wide, banks earned a mere 0.05 percent return on their assets in the three months through September 30, compared with 0.92 percent in the third quarter of 2007. Most of that thin margin came at small banks because big ones were busy making tens of billions of dollars in loan-loss provisions to cover the plummeting value of their mortgage-backed assets. Combined, the industry set aside $50.5 billion just in the quarter to cover loan losses; that is three times the amount set aside a year earlier. Even as it was preparing for a rough future, the banking industry was facing up to more of its grim recent past. Banks wrote off a total of $27.9 billion in dud loans in the quarter—a 156 percent increase over the same three months last year. Two-thirds of those write-offs were related to real estate, whether mortgages, home-equity loans, and construction loans. And that doesn't include Washington Mutual, the nation's largest mortgage lender; it failed on September 25 and was later taken over by Wells Fargo. "We've had profound problems in our financial markets that are taking a rising toll on the real economy," F.D.I.C. Chairman Sheila Bair said, in a profound understatement. "Today's report reflects these challenges."Related Links Welcome to the Impasse Corporate Lobbying and the Supbrime Crisis New Home for a Fallen Housing Giant Source: Portfolio.com: Top 5 | 25 Nov 2008 | 6:00 pm Kroger Well Positioned to `Gain Share,' Says GoldmanSource: Bloomberg - All Podcasts | 25 Nov 2008 | 3:39 pm Iron MehThe credit crunch is so powerful that it has now crushed what would have been one of the biggest takeovers of all time.BHP Billiton, the world's largest mining company, has abandoned its year-long pursuit of Rio Tinto, the No. 3 miner, blaming deteriorating credit markets and a slide in commodity prices. When BHP announced its unsolicited offer, prices for iron ore, steel, and other hard commodities were soaring on demand from China, India, and other quickly industrializing nations. Rio Tinto's iron ore operations were the main prize for BHP. At the time, the offer from BHP Billiton was valued at $147 billion—greater than the price of the 2000 America Online-Time Warner merger and second only to Vodafone's acquisition of Mannesmann in 1999. But both commodity prices and stocks have retreated sharply since then as economies around the world have been hurt by the financial crisis. Copper prices, for one, have fallen by 50 percent in the last year. The BHP offer, which was rejected by Rio Tinto in February, was worth less than half its original value. "We have previously said that similar cultures and the overlap of key assets and infrastructure make this a compelling combination, BHP's chief executive, Marius Kloppers, said today. "Recent global events and associated falls in commodity prices have, however, altered risk dimensions." The current unforgiving state of the markets was another concern. BHP said it was willing to sell assets to gain approval for a deal from European Union regulators, but it would have had trouble finding a buyer willing to pay an adequate price given the difficulty in lining up financing. And the huge debt held by Rio must have been given pause. Rio has some $38 billion of debt, most of it a result of its acquisition of Alcan last year. BHP has $6 billion in debt. The prospect of refinancing is enough to terrify an iron giant. Related Links Exchanges' Urge to Merge Black Hole Metal Gets Heavy Source: Portfolio.com: Top 5 | 25 Nov 2008 | 2:00 pm The Lending NetFresh off another huge rescue of Wall Street, Washington is turning its attention to that oft-neglected place where most of the country lives: Main Street. With these new plans, and Sunday's agreement to backstop some $306 billion of Citigroup's portfolio, the government is turning back to the original plan for TARP. The $700 billion rescue plan was sold to Congress as a way to buy up troubled securities. Almost immediately after its passage, the money was used instead to take stakes in financial institutions. Perhaps TARP 1.0 was the superior version all along. Related Links Worst of Times Incentives for Inflation Lehman Bailout? Just Say No Source: Portfolio.com: Top 5 | 25 Nov 2008 | 1:00 pm
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