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Dehydrated Conspiracy: Just Add AIG!
Goldman, at least, appears mostly to have an appearance of quiet (and loud) competence. It is not all that intellectually pressing to imagine Goldman at the center of a plan to irradiate a bunch of gold (see what we did there?) and thereby reduce available supply to spike the price and boost the value of the long positions it may or may not hold in the metal ("Gold-man Sachs-en-fin-ger" even sounds cool when Karaoked loudly to the theme song). But, it seems to us, that this sort of thing begins to collapse in on itself when AIG becomes the supposed criminal mastermind organization at the center of a plot complex enough to involve more than three laptop computers with disparate versions of Windows. So, when we see posts like the one Zero Hedge penned this weekend ("AIG Was Responsible For The Banks' January & February Profitability") you can color us skeptical- at least of the conspiracy laden parts. (Not that we do or do not love Zero Hedge, but still). We have no doubt that AIG poured an Imperial Asston of cash into a series of counter-parties in January and February. What, exactly, is mysterious about this? 
Source: Dealbreaker | 30 Mar 2009 | 1:15 pm Fresh flight from risk hits global equitiesGlobal equities tumbled, with a renewed flight from risk amid worries about the wider implications of General Motors' potential failure to qualify for US government aidSource: Financial Times - US homepage | 30 Mar 2009 | 1:12 pm Opening Bell: 03.30.09Study Has Banks Admitting Pay Structure Was A Contributing Factor (WSJ) The survey, conducted by U.K. management consultancy Oliver Wyman, was commissioned by the Institute of International Finance, a global association of banks and other financial companies based in Washington, D.C. It found 98% of responding banks "believe the compensation structures were a factor underlying the crisis."" Thoughts On Ratigan Leaving (MarketWatch) Geithner Says Some Banks Need 'Large Amounts' Of Assistance (Bloomberg) ""We still don't have the transparency and oversight," McCain said on "Meet the Press." He said his biggest concern is that the cost of stemming the financial crisis will worsen annual deficits projected to exceed $1 trillion for many years. "What I am most worried about is laying the debt on future generations of Americans," he said." Blackstone Tells SEC To Get Bent (Bloomberg) "In the prospectus for its initial public offering, Blackstone said it intends to be a "different kind of public company" whose managers take a long-term perspective. The firm won't provide earnings forecasts because the performance of its businesses may vary in "significant and unexpected ways" from quarter to quarter, according to the filing." China Looks For Global Currency (Reuters) "Beijing's ultimate goal is to replace the globally dominant dollar with a beefed-up Special Drawing Right, the International Monetary Fund's in-house unit of account, which would become a "super-sovereign reserve currency." [...] However, with 5,000 years of history behind it, Beijing is ready for a long game. Zhou knew his trial balloon would immediately be shot down, save for backing from Russia. Hence his acknowledgement that creating a new international monetary order would require "extraordinary political vision and courage". Translation: Beijing realizes that a currency does not lose its global domination overnight. Even after the United States overtook Britain in economic size in the late 19th century, it took two world wars that drained Britain's Treasury and its military might before the dollar supplanted sterling. The American grandmaster will not surrender his title lightly."
Source: Dealbreaker | 30 Mar 2009 | 12:54 pm Pakistani police 'retake academy from gunmen'Pakistani security forces took control of a police academy in Lahore after gunmen rampaged through the centre's parade ground, killing up to 20 people before holing themselves up inside for hoursSource: Financial Times - US homepage | 30 Mar 2009 | 12:54 pm The Importance of Healthy Overseas Tax HavensJohn Tamny of RealClearMarkets For those of us interested in taxes, probably the most important words Supreme Court Justice Louis Brandeis ever wrote had to do with the essential importance of U.S. states to the country’s economic health. Brandeis viewed states as “laboratories” of democracy, whereby individuals would choose a given locale in the U.S. based on how much or how little government they wanted. Brandeis’ thinking might now seem quaint or dated, but back when he served (from 1916 to 1939) the Constitution was correctly seen as a limiting document. And rather than a document meant to limit our infinite individual rights, the more understood intent of the Constitution was that its purpose was to limit the activities of the federal government.       Source: 24/7 Wall Street | 30 Mar 2009 | 12:28 pm Stocks set to fall as automaker plans get rejected (AP)
Source: Yahoo! News: Stock Markets News | 30 Mar 2009 | 12:26 pm Automakers cliff hanger, bank woes slam futuresNEW YORK (Reuters) - Stock index futures pointed to a sharply lower open on Monday as the Obama administration threatened bankruptcy for two major U.S. automakers and Spain had to rescue regional savings bank CCM.Source: Reuters: Business News | 30 Mar 2009 | 12:25 pm G20 steers away from new stimulus pledgeHopes for a coordinated agreement on a new stimulus plan to help revive the global economy at this week’s G20 summit appear diminished ahead of the formal start of the meeting, according to reports.Source: MarketWatch.com - Top Stories | 30 Mar 2009 | 12:23 pm UPDATE 1-Kuwait says hits 3 mln bpd oil capacityKUWAIT, March 30 (Reuters) - OPEC member Kuwait has boosted production capacity to 3 million barrels per day (bpd) and is on track to reach its goal of 4 million bpd by 2020, the head of its top state...Source: RSS feed - channel BNewsBusiness | 30 Mar 2009 | 12:21 pm GM and Chrysler denied extra fundsThe Obama administration has refused to give fresh bailout money to General Motors and Chrysler, telling the carmakers to come up with new plans or risk insolvencySource: Financial Times - US homepage | 30 Mar 2009 | 12:19 pm GM, Chrysler rocked by Obama autos team hard lineWASHINGTON/PARIS (Reuters) - The Obama administration seized the wheel of the failing U.S. auto industry on Monday, forcing out General Motors Corp's CEO, pushing Chrysler LLC toward a merger and threatening bankruptcy for both.Source: Reuters: Business News | 30 Mar 2009 | 12:19 pm Fujitsu commits to servers despite potential Sun dealSAN FRANCISCO (Reuters) - Fujitsu Ltd reaffirmed the company's commitment to its high-end computer server franchise, even though its partner in that business faces an uncertain future.Source: RSS feed - channel BNewsBusiness | 30 Mar 2009 | 12:15 pm Fujitsu commits to servers despite potential Sun dealSAN FRANCISCO (Reuters) - Fujitsu Ltd reaffirmed the company's commitment to its high-end computer server franchise, even though its partner in that business faces an uncertain future.Source: Reuters: Business News | 30 Mar 2009 | 12:15 pm Obama aides flunk GM and ChryslerThe Obama administration gave General Motors and Chrysler LLC failing grades Monday for their turnaround efforts and promised a sweeping overhaul of the troubled companies. The government plans to give the automakers more money, but it is also holding out the threat of a "structured bankruptcy." The federal government will provide operating funds for both automakers for several weeks, during which time the companies will have to undergo significant restructuring, administration officials said late Sunday night.Source: Business and financial news - CNNMoney.com | 30 Mar 2009 | 12:14 pm Automakers cliff hanger, bank woes slam futures (Reuters)
Source: Yahoo! News: Business | 30 Mar 2009 | 12:11 pm Automakers cliff hanger, bank woes slam futures (Reuters)
Source: Yahoo! News: Stock Markets News | 30 Mar 2009 | 12:11 pm Automakers cliff hanger, bank woes slam futuresNEW YORK (Reuters) - Stock index futures pointed to a sharply lower open on Monday as the Obama administration threatened bankruptcy for two major U.S. automakers and Spain had to rescue...Source: RSS feed - channel BNewsBusiness | 30 Mar 2009 | 12:11 pm Union Bankshares Corporation and First Market Bank, FSB Announce Agreement to MergeBOWLING GREEN, Va., March 30 /PRNewswire-FirstCall/ -- Union Bankshares Corporation (Nasdaq: UBSH) ("Union") and First Market Bank, FSB ("First Market") todaySource: RSS feed - channel BNewsBusiness | 30 Mar 2009 | 12:11 pm Bargains in the REIT Wreckage (BusinessWeek Online)BusinessWeek Online - After a terrible 2008, real estate investment trusts are having an awful 2009. The SPDR Dow Jones Wilshire REIT (NYSEArca:RWR - News) exchange-traded fund, which tracks 82 REITs, has dropped 35% after plunging about 45% in 2008. On Mar. 19, Moody's downgraded General Growth Properties to "C," its lowest rating above default, prompting another wave of selling.Source: Yahoo! News: Business | 30 Mar 2009 | 12:08 pm OPEC head Angola eyes oil prices at $75 in 2009LUANDA (Reuters) - Oil prices could reach $75 per barrel in 2009 despite a the economic crisis, OPEC president Angola said on Monday, adding that compliance by the 12-member group with the agreed cuts remained at around 80 percent.Source: Reuters: Business News | 30 Mar 2009 | 12:07 pm OPEC head Angola eyes oil prices at $75 in 2009LUANDA (Reuters) - Oil prices could reach $75 per barrel in 2009 despite a the economic crisis, OPEC president Angola said on Monday, adding that compliance by the 12-member group with the...Source: RSS feed - channel BNewsBusiness | 30 Mar 2009 | 12:07 pm Top Analyst Upgrades (CHD, GPS, REGN, VOD)The land of analyst upgrades and positive research calls from Wall Street looks pretty thin early this Monday morning: Church & Dwight (CHD) Raised to Outperform at Oppenheimer. JON C. OGG Tagged: CHD, GPS, REGN, VOD      Source: 24/7 Wall Street | 30 Mar 2009 | 12:07 pm OECD warns of 'fully blown social crisis'The Organisation for Economic Cooperation and Development warned Monday of a "fully blown social crisis" and said restoring global economic growth was a moral responsibility. "Restoring...Source: RSS feed - channel BNewsBusiness | 30 Mar 2009 | 12:02 pm Mike Dow Joins Riverstone Residential as Executive Vice PresidentRiverstone Sees 30% Growth in California within Last Four Months DALLAS, March 30 /PRNewswire/ -- Riverstone Residential, the largest privately owned residential...Source: RSS feed - channel BNewsBusiness | 30 Mar 2009 | 12:00 pm Lockheed Martin Prepares Australia's First Aegis Weapon System For Post-Production TestingMOORESTOWN, N.J., March 30 /PRNewswire/ -- Four antennas destined for Australia's first Air Warfare Destroyer were recently installed in Lockheed Martin (NYSE: LMT)'s...Source: RSS feed - channel BNewsBusiness | 30 Mar 2009 | 12:00 pm Delta-Northwest Merger Becomes Visible to Customers with Introduction of Combined Domestic ProductsChangeover includes employee uniforms, airport signage, and enhanced onboard products and services ATLANTA, March 30 /PRNewswire-FirstCall/ -- Seattle-based...Source: RSS feed - channel BNewsBusiness | 30 Mar 2009 | 12:00 pm Mohawk and DuPont Win FTC Petition: Federal Trade Commission Confirms PTT Fiber is in a Class of Its OwnMohawk SmartStrand(R) and SmartStrand(R) with DuPont(TM) Sorona(R), both made with new triexta fiber, offer superior durability, stain resistance and softness...Source: RSS feed - channel BNewsBusiness | 30 Mar 2009 | 12:00 pm Obama to shop market reforms to G-20Last week, Congress. This week, the world.Source: Business and financial news - CNNMoney.com | 30 Mar 2009 | 11:59 am Nationwide takes over DunfermlineThe Nationwide is confirmed as the buyer of the Dunfermline Building Society's branches, good loans and deposits.Source: BBC News | Business | World Edition | 30 Mar 2009 | 11:58 am Europe Markets: Banks, autos fuel heavy slide in European stocksEuropean shares fall sharply to start the week, with financials leading stocks lower amid more government bailout moves in the sector and with automakers on the defensive as the chief executives of General Motors and Peugeot get forced out.Source: MarketWatch.com - Top Stories | 30 Mar 2009 | 11:57 am Deutsche Bahn boss set to resignThe boss of Deutsche Bahn, Hartmut Mehdorn, offers to resign following a spy scandal at the train firm.Source: BBC News | Business | World Edition | 30 Mar 2009 | 11:56 am Gordon Brown hints at global crisis dealGordon Brown sounded a confident note over the chances of securing a global deal at this week's G20 summit as he began a final round of diplomatic armtwisting.Source: Telegraph Finance | 30 Mar 2009 | 11:51 am London Markets: Banks, oil majors skid in London; FTSE 100 down 2%FTSE 100 index down 2%; oil producers, mineral extractors also skidSource: MarketWatch.com - Top Stories | 30 Mar 2009 | 11:48 am Bonds driven higher by autosTreasury prices were higher Monday, fueled by uncertainty about the economic recovery, after the Obama administration rejected turnaround plans submitted by U.S. automakers General Motors Corp. and Chrysler LLC.Source: Business and financial news - CNNMoney.com | 30 Mar 2009 | 11:47 am Dunfermline / Nationwide: How are you affected by the building society merger?Emergency takeover of Dunfermline building society by Britain's biggest mutual leaves many savers and borrowers in new hands.Source: Telegraph Finance | 30 Mar 2009 | 11:47 am GM given 60 days to save business or go bustThe Obama administration has given General Motors 60 days to come up with a viable cost-cutting plan if it is to qualify for more life-saving government loans, and has forced the resignation of its chief executive, Rick Wagoner.Source: Latest Business News from Times Online | 30 Mar 2009 | 11:46 am Solicitor jailed in FSA insider dealing firstA solicitor who tipped off his father-in-law about an upcoming takeover deal was jailed for eight months today in the Financial Services Authority’s (FSA) first criminal prosecution for insider dealing.Source: Latest Business News from Times Online | 30 Mar 2009 | 11:38 am Spain rescues first bank; U.K. forces sale of DunfermlineSpain’s Caja Castilla-La Mancha and the U.K.’s Dunfermline Building Society join the growing list of rescued European financial institutions as the economic downturn and deteriorating housing markets continue to exact a toll.Source: MarketWatch.com - Top Stories | 30 Mar 2009 | 11:37 am China's CCB says 10 percent BofA stake 'reasonable'HONG KONG (Reuters) - China Construction Bank (CCB) , the world's second-largest lender by market value, said on Monday it would be "reasonable" for major shareholder Bank of America to reduce its stake to 10 percent.Source: Reuters: Business News | 30 Mar 2009 | 11:31 am China's CCB says 10 percent BofA stake 'reasonable' (Reuters)Reuters - China Construction Bank (CCB) (0939.HK), the world's second-largest lender by market value, said on Monday it would be "reasonable" for major shareholder Bank of America to reduce its stake to 10 percent.Source: Yahoo! News: Business | 30 Mar 2009 | 11:31 am World stocks plummet as auto sector reels (AFP)
Source: Yahoo! News: Stock Markets News | 30 Mar 2009 | 11:26 am Top Analyst Downgrades (BCS, CBY, CBS, LFC, CHL, DBD, ELX, NCR, PHG, QSII)These are some of the top pre-market analyst downgrades and negative analyst calls we have seen from Wall Street firms this Monday morning: Barclays (BCS) Cut to Sell at Societe Generale. JON C. OGG Tagged: BCS, CBS, CBY, CHL, DBD, ELX, LFC, NCR, PHG, QSII      Source: 24/7 Wall Street | 30 Mar 2009 | 11:24 am GM's statement from ex-CEO Rick WagonerThe following is a statement issued by General Motors in the name of Rick Wagoner, the company’s newly departed chief executive.Source: MarketWatch.com - Top Stories | 30 Mar 2009 | 11:19 am Oil prices slide on world economy worries (AFP)
Source: Yahoo! News: Stock Markets News | 30 Mar 2009 | 11:16 am Russia's poor 'need crisis help'Russia's economy will shrink by 4.5% this year and its poor need more help, the World Bank predicts.Source: BBC News | Business | World Edition | 30 Mar 2009 | 11:13 am Indications: U.S. stock futures slump as GM may go bankruptU.S. stock futures slump on Monday, as the White House says bankruptcy is a possibility for General Motors and Chrysler while hopes for a new round of global stimulus spending appear thwarted.Source: MarketWatch.com - Top Stories | 30 Mar 2009 | 11:12 am Development aid at record in 2008Rich nations donated more development aid than ever before in 2008, according to the OECD.Source: BBC News | Business | World Edition | 30 Mar 2009 | 11:07 am GM chief Wagoner to resign at Obama's requestGeneral Chairman and Chief Executive Rick Wagoner is resigning from his leadership of the troubled automaker at the request of the Obama administration, reports say.Source: MarketWatch.com - Top Stories | 30 Mar 2009 | 11:06 am U.S. stock futures signal losses on automaker woes (Reuters)Reuters - U.S. stock index futures pointed to losses on Monday on worries over the troubled auto sector after Washington's rejection of viability plans from General Motors and Chrysler.Source: Yahoo! News: Stock Markets News | 30 Mar 2009 | 11:05 am Spain becomes first euro nation to see consumer prices fallThe economic crisis in Spain took a new turn on Monday after the country became the first in the euro zone to report disinflation on the heels of a weekend takeover of a Spanish savings bank by the government.Source: MarketWatch.com - Top Stories | 30 Mar 2009 | 11:04 am Auto woes set to slam stocksU.S. stocks were set to open sharply lower Monday after the White House said automakers General Motors and Chrysler would have to do more in order to receive further aid, and after Treasury Secretary Tim Geithner said some banks will need more help.Source: Business and financial news - CNNMoney.com | 30 Mar 2009 | 11:03 am Currencies: Dollar boosted by automaker worries, G20 jittersHaven-related buying boosted the U.S. dollar and the Japanese yen Monday as investors fled equity markets amid renewed fears over the auto sector and indications this week’s highly-touted meeting of leaders from the Group of 20 nations won’t produce an agreement on additional fiscal stimulus measures.Source: MarketWatch.com - Top Stories | 30 Mar 2009 | 11:03 am GM, Chrysler rocked by Obama autos team hard line (Reuters)Reuters - The Obama administration seized the wheel of the failing U.S. auto industry on Monday, forcing out General Motors Corp's CEO, pushing Chrysler LLC toward a merger and threatening bankruptcy for both.Source: Yahoo! News: Business | 30 Mar 2009 | 10:50 am How to get a job: What works nowRob Sparno recently did something that 12.5 million Americans would kill to do. He did something that has never been attempted by this many people at once in the 60 years the government has been keeping records. He did something that's getting only more difficult with every day.Source: Business and financial news - CNNMoney.com | 30 Mar 2009 | 10:43 am 10 countries, 10 solutionsA financial crisis has engulfed countries from the best-off the the worst-off around the world. The solutions to the problem are varied.Source: Business and financial news - CNNMoney.com | 30 Mar 2009 | 10:40 am Beijing Enterprises says gas unit lifts profit 54%Beijing Enterprise Holding Ltd., the investment arm of the Beijing municipal government, said Monday its 2008 net income totaled HK$2.28 billion ($294 million), up 54%.Source: MarketWatch.com - Top Stories | 30 Mar 2009 | 10:37 am World stocks tumble amid G-20 pessimism (AP)
Source: Yahoo! News: Stock Markets News | 30 Mar 2009 | 10:34 am Car Company Chapter 11 Still Not An Option For Government
There is a range of numbers about how many people would become unemployed if the two car companies go into a structured Chapter 11, of worse, a Chapter 7 liquidation. At GM and Chrysler alone, nearly 200,000 jobs are at risk. If the bankruptcies ripple out to suppliers in the event that a judge voids some of their receivables, another several thousand jobs could be at stake. Then there are several amorphous estimates about people who work in fields related to the car companies. That could be industries as diverse as restaurants in Detroit and airline that fly there. It is probably safe to say that close to a million jobs are in jeopardy if the two car companies lose their independence. The Administration is already suggesting that its stimulus package, aid to banks, and budget will stretch the Treasury to raise hundreds of billions of dollars to cover a deficit that will be well over one trillion dollars in the next federal fiscal year. Bringing in that money is already projected to raise interest rates on Treasuries. That will ripple out to business and consumer loans including mortgages. The idea the rates will fall further is bogus. A million jobs lost in Detroit would also cut deeply into the receipts that the IRS is forecasting over the next year. That puts the revenue projections in the budget at real risk. The government wants the car companies to believe that it has put a Sword of Damocles over the head of the industry. If GM and Chrysler look up, they will see it is not really there at all. Douglas A. McIntyre Tagged: GM      Source: 24/7 Wall Street | 30 Mar 2009 | 10:27 am Surprise mortgage approvals jumpMortgage approvals unexpectedly jump in February, while consumers repay debt at record levels.Source: BBC News | Business | World Edition | 30 Mar 2009 | 10:25 am Darling downplays new rescue planChancellor Alistair Darling plays down the idea that G20 leaders will announce a completely new economic stimulus package.Source: BBC News | Business | World Edition | 30 Mar 2009 | 10:23 am GM chief Wagoner ousted by ObamaPresident Barack Obama orders General Motors boss Rick Wagoner to resign and tells US carmakers to speed up reforms.Source: BBC News | Business | World Edition | 30 Mar 2009 | 10:19 am Bankers: Take TARP money backThere's a growing sense among some bankers that Troubled Asset Relief Program known as "TARP" has become toxic. As a result, they want to bail out of the bank bailout program.Source: Business and financial news - CNNMoney.com | 30 Mar 2009 | 10:18 am 'Not cool enough to be a Mac person'Source: Business and financial news - CNNMoney.com | 30 Mar 2009 | 10:16 am TUI in share deal with Air BerlinEurope's biggest travel firm, TUI Travel, is to take a stake in German airline Air Berlin, aiming to lower running costs and reduce the number of flights.Source: BBC News | Business | World Edition | 30 Mar 2009 | 10:12 am Skype comes to iPhoneSource: Business and financial news - CNNMoney.com | 30 Mar 2009 | 10:06 am GE invests in TeslaSource: Business and financial news - CNNMoney.com | 30 Mar 2009 | 10:04 am UBS (UBS) Signal: Bank Losses To Heat Up Again
But, the banking bubble is about to burst. Last last week, Jamie Dimon, the CEO of JPMorgan (JPM), said that March was a rough month. Much worse, there are media reports that UBS (UBS) is facing billions of dollars in losses and significant write-offs. According to Reuters, “Shares in UBS, the world’s largest wealth manager in terms of assets, fell 7 percent on Friday as rumors swirled of a profit warning and more writedowns in the first quarter.” Although the talk has died down somewhat, a minority of analysts still believes that more large losses at US banks will trigger the need for much larger investment of federal government capital. The nationalization of banks is still not out of the question. That means that banks stocks could still go to zero. The problems at UBS may be unique to the bank. But, because it is one of the largest financial institutions in the world and its balance sheet is not terribly different from other global banks, that is not likely. Douglas A. McIntyre Tagged: UBS      Source: 24/7 Wall Street | 30 Mar 2009 | 10:01 am Auto Shake-Up Points Stocks Toward Trouble (Market Update)News at a Glance
The LowdownA blow to the auto industry left traders scrambling before the opening bell Monday. Stocks looked to open sharply lower, as traders frowned on the Obama administration's denial of additional bailout funds to two of Detroit's Big Three. Shortly before 7 a.m., Dow, Nasdaq and S&P 500 futures were trading well below fair value. General Motors (GM) and Chrysler had asked the White House for an additional $21.6 billion in combined aid, but the Obama administration shot down the request on the grounds that neither company had presented a viable turnaround plan. Instead, the administration demanded the resignation of GM chief executive Rick Wagoner and offered the company 60 days worth of operating costs to put forth a new strategy. Chrysler was instructed to work out a deal with Fiat over the next 30 days in exchange for $6 billion. "We think we can have a successful U.S. auto industry, but it's got to be one that's realistically designed to weather this storm and to emerge at the other end much more lean, mean and competitive than it currently is," Obama said Sunday on CBS's "Face the Nation." In other bailout news, Treasury Secretary Timothy Geithner said banks would be giving back about $25 billion in funds from the Troubled Asset Relief Program (TARP), leaving the Treasury with $135 billion at its disposal for additional bailout activity. However, Geithner would not say whether he plans to ask for additional funds. Meanwhile, the Obama administration called for global unity in fighting the recession at the G20 meeting this week. "The most important task for all of us is to deliver a strong message of unity in the face of crisis," he said in an interview with The Financial Times. World markets appeared to take that message to heart, falling in unison Monday. In Asia, Japan's Nikkei lost 4.5%, while Hong Kong's Hang Seng dropped 4.7%. In Europe, the major indexes of London, Paris and Frankfurt each stood down more than 1.5% in midday trading. In energy, oil took a slide before the opening bell. By 6:51 a.m., cruded traded down $1.67 at $50.71 a barrel. Corporate News
The Economy
SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved. Source: SmartMoney.com | 30 Mar 2009 | 10:00 am Fixing The Car Companies: Does Chrysler’s Nardelli Get To Keep His Job? (TM)(GM)(F)(HMC)
Nardelli may have dodged a bullet for all of the wrong reasons. Like Ford’s (F) Alan Mulally, Nardelli was not in Detroit when the current downturn in the US car business began. Nardelli can say he has clean hands, although that is not true. He joined Chrysler in August 2007 and the No.3 US car company has performed much more poorly than its peers since then. Chrysler has been too slow in cutting workers and has done little to revamp its line of light vehicles to make sales to consumers who want more fuel-efficient cars. Nardelli could still be out of work within a month. The Administration wants a marriage between Chrysler and Fiat. If the does not happen, Chrysler could still be forced into Chapter 11. Creditors, suppliers, and the UAW may want to have fresh blood in the corner office. Other car companies have set the precedent. The CEO is expendable if dumping him is the key to a better future. Douglas A. McIntyre Tagged: F, GM, HMC, TM      Source: 24/7 Wall Street | 30 Mar 2009 | 9:51 am Oil prices fall heavily on economy concerns (AFP)
Source: Yahoo! News: Stock Markets News | 30 Mar 2009 | 9:48 am The Financial News Cycle Turns Ugly
All of the positive information sent the markets up 20% or better and some financial stocks gained over 100%. The news cycle is in the process of turning against the markets and the move will be swift and painful. Over the last two days, the Administration has admitted that it may need to substantially increase the amount of money it will require to bail out banks. That was confirmed, to some extent, by news that UBS (UBS) is facing billions of dollars in losses and more layoffs. The Swiss bank’s problems are not altogether different from its American peers. For the first time since the automakers came to Washington looking for money, the government has bluntly stated that bankruptcy is a real option for GM (GM) and Chrysler if they cannot restructure to the level of cost savings that the Administration expects. While the comments could be a bluff, they could also be a sign that Obama is prepared to risk tens of thousands of jobs instead of taking the unpopular step of writing more large checks to Detroit. Global macroeconomic news is also turning dark. The Organization for Economic Cooperation and Development told Reuters that “By the end of 2010 the unemployment rate could be approaching double digit figures in all G8 countries with the sole exception of Japan, as well as in the OECD area as a whole.” If that is so, the levels of exports and imports for the large countries will drop faster than expected, consumer spending will contract more rapidly, the cost of unemployment benefits will rise, and real estate will be further undermined by the number of people without jobs. Essentially, the amount of money planned for stimulus packages will not be adequate. Earnings for the first quarter of the year are expected to be bad. There are signs that the economy was slow enough in the January though March period that the numbers may be “worse” than bad and that corporate forecasts for the balance of the year will be revised downward. Early April will also bring the numbers for unemployment for March. If the economy is still losing over 600,000 jobs a month, whatever stimulus package is in place will almost certainly no be adequate to do anything for GDP growth until well into next year. The news is going to pound the markets with a vengeance. Douglas A. McIntyre Tagged: C      Source: 24/7 Wall Street | 30 Mar 2009 | 9:37 am Barclays falls after refusal to join asset schemeShares in Barclays opened down nearly 9 per cent this morning amid speculation that Britain's third-biggest bank has ruled out joining the Government's insurance scheme for risky assets.Source: Latest Business News from Times Online | 30 Mar 2009 | 9:28 am UBS shares fall as more writedowns, job cuts seenZURICH (Reuters) - Shares in UBS were down 7 percent in early trading on Monday amid expectations the bank could announce more writedowns and job cuts as early as this week.Source: Reuters: Business News | 30 Mar 2009 | 9:26 am World stocks hit by economy woesWorld stocks fall, notably in Asia, amid worries over the depth of the global financial crisis, and persistent problems in the automotive sector.Source: BBC News | Business | World Edition | 30 Mar 2009 | 9:26 am London shares slide as global bull run fadesFTSE 100 opens sharply down as global stock markets tumbled raising questions about whether the recent bull run had ended.Source: Telegraph Finance | 30 Mar 2009 | 9:24 am World stocks plummet (AFP)
Source: Yahoo! News: Stock Markets News | 30 Mar 2009 | 9:20 am World stocks plummet (AFP)
Source: Yahoo! News: Business | 30 Mar 2009 | 9:20 am Leadership testHow will President Obama interact with world leaders?Source: BBC News | Business | World Edition | 30 Mar 2009 | 9:18 am IBM And Its Workers: A War Of Silence Vs. Loquaciousness
The IBM reaction to the reports is that it has no reaction. When 24/7 Wall St contacted the big tech operation, it was told that the layoff issue and reaction to it could not be discussed. Although IBM will not say, its position is likely to be that it has no obligation to talk about who it hires or fires, where the people are hired or fired, and when the process goes on. As long as the number of employees involved is below the level that the SEC would deem as being “material”, IBM has every right to be mute.
A portion of IBM’s workers, informally represented by a group called Alliance@IBM says that the company actually is doing something terribly sinister and it is doing it to dupe the US government. The logic behind the belief that IBM would like to dodge making public comments about its workforce is that Congress and the Administration would take a dim view of IBM getting any money from the new government stimulus package or additions to the US budget while at the same time undermining the tax base by firing thousands of people. The Alliance@IBM objection to the firm firing people while getting money from the federal government is an accurate opinion. What is also true is that almost no one in the government, except the Congressmen serving districts which have many IBM workers, cares about the layoffs at all. The Administration and Congress can’t do much about the issue because half of corporate America is doing exactly what IBM is. There is nothing unusual about that in a recession. In a world where nearly everyone is cruel, creating laws which mandate compassion is a poor use of time. If the government planned to withhold stimulus money from every American company that sends a job overseas, almost all of the stimulus money would stay in the Treasury. US firms have convinced nearly everyone other than their workers that they can operate more efficiently if they can have their workforces wherever they please. As unions and workers have lost their power over the last several decades, the government’s reasons for listening to them have eroded. The IBM workers who are most vocal about their objections to the company firing people in the US and replacing them with employees overseas are, in their view, patriotic. A job lost in America is a tax dollar lost, a home that may be foreclosed on, and a local community that loses the consumer spending from a productive citizen. These same workers argue that, over the long haul, IBM hurts its customers and its shareholders by taking labor with years of experience and replacing that with labor that have weeks worth of experience. The clients will see the quality of IBM’s products and services deteriorate. IBM’s competition will consequently get an edge. Shareholders will see the value of their investment undermined. These arguments may have terrific value, but, as IBM pushed American workers out the door, there was so support for retaining these US-based employees. Douglas A. McIntyre Tagged: IBM      Source: 24/7 Wall Street | 30 Mar 2009 | 9:12 am The G-20 Summit: Obama Can Stay Home
If Obama’s goal is the have a unified position from the G-20, a position which he can take back to the business and financial communities and Congress, he has lost that battle before it began. He is, essentially out of luck before he boards Air Force One. According to Reuters, Continental Europeans have summarily rejected UK Prime Minister Brown’s and President Barack Obama’s call for governments to spend more. From the perspective of nations that probably have little access to capital, their objections to the stimulus plans of the UK and US is understandable. But, the objection may not be entirely self-serving. The European reservations mirror those of many members of Congress and a number of economists. Although the same analysis will be rehashed in London, the question is whether the financial world has changed enough during the two months since the G-20 gathering was planned for the major premises of the either side of the debate to have been altered. The original concern of the leaders who will come to the summit is that a lack of regulation was the root cause of the financial and credit catastrophe that ruined the international banking system. Leaving aside whether regulation can, in and of itself, make the financial markets less risky, increasing the power of regulatory bodies costs almost nothing in terms of creating new laws and staffing oversight agencies. There should be very little argument on that point. Every nation coming to the G-20 summit can afford to further regulate its banks and financial markets. However, there has been little time allocated for discussion of the costs of financial regulation. So, the issue of the expense of regulation is no issue at all. The real problems are much different. Does regulating an international bank make it more or less likely for the institution to lend to the people and industries that a government believes should have access to more capital? Since major financial firms operate in dozens of countries, there is no uniform set of answers to that question. The same holds true for leverage. Does a hedge fund create jobs and financial credit opportunities by helping to improve market liquidity though investments with complex insurance instruments like credit default swaps, or are these derivatives too risky to be allowed to trade freely? Since there is no way to come to an irrefutable conclusion about credit and leverage, any decision to regulate or not regulate is based on educated guesses. So, regulation ends up being a two-sided coin. One wears the face of the process of regulation, which has the attraction of costing almost nothing. The other represents the risk that the fruits of regulation could constrict financial market activity so significantly that it undermines the chances for ending the recession. Obama and his aides will say in London what they say every minute of every day to anyone who will listen. If the American government does not allows its deficit to rise into the trillions of dollars, the consequences will be a depression which will last for several years and put more millions of Americans out of jobs. The US tax base will be ruined, which will cause huge deficits because of rapidly falling IRS collections as corporations and individuals lose their ability to create income. Even if government keeps expenses as they were last year, the budget deficit will balloon and the Treasury will have to issue more debt to cover the difference. It is a hell of a world when the best defense for spending a trillion dollars and adding to the national debt is that it needs to be done to preserve a trillion dollars in revenue to the Treasury from individuals and companies which would otherwise be to0 crippled by the economy to pay taxes Douglas A. McIntyre       Source: 24/7 Wall Street | 30 Mar 2009 | 9:08 am Rick Wagoner interview transcript: Detroit Motor Show January 2009Rick Wagoner has resigned from the top job at General Motors after thirty years with the company. In January he spoke to Andrew English at the Detroit Motor Show about life at the centre of the American carmaking crisis.Source: Telegraph Finance | 30 Mar 2009 | 9:03 am Saving Las Vegas One Airplane Ticket At A Time (WYNN)(LCC)(MGM)
MGM shares trade at $2.85, down from a 52-week high of $62.90. Rival casino operator Wynn (WYNN) has a stock price of $21.37, down from its period high of $119.74. Wynn is in the process of selling seven million of new shares to repay debt and cover other corporate costs. Wynn could probably have avoided raising any money in a more favorable economy when the gambling business was booming. But, the firm has $4.4 billion in long-term obligations and had $210 million in operating income last year. With the gambling industry in a shambles, that profit is going to be down this year. There are cheap travel packages all over the Internet that allow people to fly to Las Vegas and stay in a high-end hotel at remarkably low prices. One American Express offer allows people to take a plane from Los Angeles to Las Vegas and stay at Wynn for $344 including three nights and the airfare. It would be hard to come up with math to show how that is profitable for either the casino or the airline. A close look at the financial dynamics of gambling and airlines reveals that it is actually a very good way to get cash flow from travelers who would normally not travel at all. The US Air flights are going to go from LA to Vegas and back whether they are 20% full or 90% full. The variable costs might be a little fuel due to the weight added with more people and the extra cans of Coke and packets of peanuts. Otherwise, the difference between a full flight and an empty flight is zilch. A similar principle holds true at Wynn. The cost of the debt for the real estate and maintaining and staffing a hotel with hundreds of rooms is not going to change if the hotel is full or nearly empty. The variable cost is probably not much more than a few dozen people and washing and changing linen. A package deal for $344 helps the airline and the casino, although the casino almost certainly gets the better end of the bargain. All that the airline receives is $344 for each traveler, although there may be a silent partnership with the casino that gives USAir a piece of the casino’s action. The casino, on the other hand, may emerge from the travel package arrangement well ahead of the game. The guest who spends three nights at Wynn may well gamble, dine in the restaurants in the building, play golf, or go to a show. With many of the retailers who took space at Wynn dying for customers, these additional guests may be the difference between a default on retail leases, which would leave Wynn holding the bag, or hanging on until the recession is over. Most airlines and probably every major casino company will lose money this year. Letting travelers stay at casino hotels at extremely low rates probably shrinks what could be catastrophic losses to ones which are manageable. Douglas A. McIntyre Tagged: LCC, MGM, WYNN      Source: 24/7 Wall Street | 30 Mar 2009 | 8:56 am Mortgage approvals soar 19% during FebruaryThe number of mortgages approved for house purchase jumped by 19 per cent during February and borrowers repaid a record amound of debt the Bank of England said today.Source: Latest Business News from Times Online | 30 Mar 2009 | 8:51 am Buytolet investors start buying againLandlords are beginning to expand their property portfolios again as they make the most of house price falls.Source: Telegraph Finance | 30 Mar 2009 | 8:42 am GM chief executive's crisisridden termSoon after becoming chief executive of General Motors in 2000 Rick Wagoner huddled with top lieutenants to lay out his vision for expanding the global reach and profitability of the world's top automaker.Source: Telegraph Finance | 30 Mar 2009 | 8:41 am TUI Travel buys stake in Air BerlinTUI Travel said it was paying a net €28.5m £26.6m in cash for a stake in Air Berlin in a crossshareholding agreement the UK tour operator said on Monday.Source: Telegraph Finance | 30 Mar 2009 | 8:09 am AIG delays funds to some real-estate ventures: report(Reuters) - American International Group has cut or delayed payments to some of its real-estate ventures, potentially leaving the developers and their bankers in the lurch, the Wall Street Journal reported.Source: Reuters: Business News | 30 Mar 2009 | 8:00 am Regulators see new role for Fannie, Freddie: report(Reuters) - The regulator of U.S. government-controlled Fannie Mae and Freddie Mac is looking at ways the two firms might help finance small mortgage banks hobbled by a dearth of credit, the Wall Street Journal reported.Source: Reuters: Business News | 30 Mar 2009 | 7:56 am GM needs more radical surgery than the departure of Rick WagonerThe White House is right to ask for Rick Wagoner's resignation in return for extending more aid to General Motors.Source: Telegraph Finance | 30 Mar 2009 | 7:54 am Nationwide takes on Dunfermline Building Society's branches deposits and staffThe Nationwide has taken ownership of the branches deposits and staff of Dunfermline Building Society.Source: Telegraph Finance | 30 Mar 2009 | 7:25 am Australian stocks: Market follows US lead downMELBOURNE - The Australian share market closed lower on Monday, after a negative lead from United States markets on Friday and uncertainty around funding for struggling car makers in the United States. At the 1615 AEDT close, the...Source: New Zealand Herald - Business | 30 Mar 2009 | 7:19 am Nationwide's Dunfermline rescue cost taxpayers £1.6bnThe Government has been forced to pay out around £1.6 billion for a portfolio including toxic loans and questionable mortgages as part of the rescue of Dunfermline Building Society by Nationwide Building Society today, The Times has learnt.Source: Latest Business News from Times Online | 30 Mar 2009 | 7:16 am Peugeot sacks boss Christian StreiffThe directors of Peugoet Citroen have fired their chief executive Christian Streiff making him the second car industry boss to lose his job over the weekend.Source: Telegraph Finance | 30 Mar 2009 | 7:13 am Redbox's $1 vending-machine video rentals worry movie studiosThey say the kiosks' cheap fees could hurt DVD sales, undermining economics that have long propped up the film business. ...Source: RSS feed - channel BNPaperBusiness | 30 Mar 2009 | 7:00 am California stem cell program needs a new treatmentThe California Institute for Regenerative Medicine threatens to suck up precious fiscal resources of a state with none to spare and is rife with conflicts of interest.In the annals of wrongheaded things done with the best intentions, the California stem cell program has always been in a category of its own. Source: L.A. Times - Business | 30 Mar 2009 | 7:00 am General Motors CEO Rick Wagoner oustedThe executive's move comes at the request of the White House, Obama administration officials say.In one of its boldest moves yet into a company's corporate affairs, the Obama administration forced out the head of General Motors Corp. over the weekend and prepared to put both GM and Chrysler on a short leash to retool their operations. Source: L.A. Times - Business | 30 Mar 2009 | 7:00 am Redbox's $1 vending-machine video rentals worry movie studiosThey say the kiosks' cheap fees could hurt DVD sales, undermining economics that have long propped up the film business.The hottest thing in movie rentals is as old as the Coke machine -- and just as red. Source: L.A. Times - Business | 30 Mar 2009 | 7:00 am Former KB Home CEO Bruce Karatz gets both blame and acclaimSet to be arraigned on charges that he committed fraud in manipulating stock options, he also is lauded by several high-profile supporters.Bruce Karatz may be facing prison time, but he was the one doing the comforting before his bail hearing in federal court last week. Source: L.A. Times - Business | 30 Mar 2009 | 7:00 am AIG crisis could be the tip of an insurance icebergThe company's situation reflects problems throughout the life insurance industry as investments suffer. Further strain could bring about a second financial crisis. ...Source: RSS feed - channel BNPaperBusiness | 30 Mar 2009 | 7:00 am 'Monsters vs. Aliens' is a hit in three dimensionsIn a strong weekend at the box office, the DreamWorks Animation film is No. 1, earning $58.2 million -- with about half of that from 3-D screenings. ...Source: RSS feed - channel BNPaperBusiness | 30 Mar 2009 | 7:00 am AIG crisis could be the tip of an insurance icebergThe company's situation reflects problems throughout the life insurance industry as investments suffer. Further strain could bring about a second financial crisis.When insurance giant American International Group Inc. imploded last fall, the firm's problems were quickly blamed not on its core insurance business but on an obscure operation that traded exotic mortgage securities. Source: L.A. Times - Business | 30 Mar 2009 | 7:00 am Job seekers turning to online social networksWebsites such as LinkedIn help employers and job candidates find one another through common bonds.Almost as soon as Guang-Yu Xu was laid off from his engineering post at a Silicon Valley Internet company last month, he visited LinkedIn.com and updated his job status from "current" to "past." Source: L.A. Times - Business | 30 Mar 2009 | 7:00 am Stock market rally may hinge on data set for releaseA batch of reports may provide more evidence of whether the recession is easing.The coming week may well be a turning point for the stock market and its March rally. Source: L.A. Times - Business | 30 Mar 2009 | 7:00 am 'Monsters vs. Aliens' is a hit in three dimensionsIn a strong weekend at the box office, the DreamWorks Animation film is No. 1, earning $58.2 million -- with about half of that from 3-D screenings.Thanks to an alien invasion of movie theaters, Hollywood scared up a strong weekend at the box office. Source: L.A. Times - Business | 30 Mar 2009 | 7:00 am In China, job seekers are resorting to plastic surgeryThe cosmetic surgery business is booming in China as a hyper-competitive labor market has job hunters altering their looks to get an edge with potential employers.In this crummy job market, Stephanie Yang figures any little advantage will help. Even double eyelids. Source: L.A. Times - Business | 30 Mar 2009 | 7:00 am In China, job seekers are resorting to plastic surgeryThe cosmetic surgery business is booming in China as a hyper-competitive labor market has job hunters altering their looks to get an edge with potential employers. ...Source: RSS feed - channel BNPaperBusiness | 30 Mar 2009 | 7:00 am California stem cell program needs a new treatmentThe California Institute for Regenerative Medicine threatens to suck up precious fiscal resources of a state with none to spare and is rife with conflicts of interest. ...Source: RSS feed - channel BNPaperBusiness | 30 Mar 2009 | 7:00 am Stock market rally may hinge on data set for releaseA batch of reports may provide more evidence of whether the recession is easing. The coming week may well be a...Source: RSS feed - channel BNPaperBusiness | 30 Mar 2009 | 7:00 am Former KB Home CEO Bruce Karatz gets both blame and acclaimSet to be arraigned on charges that he committed fraud in manipulating stock options, he also is lauded by several high-profile supporters. ...Source: RSS feed - channel BNPaperBusiness | 30 Mar 2009 | 7:00 am Job seekers turning to online social networksWebsites such as LinkedIn help employers and job candidates find one another through common bonds. Almost as soon...Source: RSS feed - channel BNPaperBusiness | 30 Mar 2009 | 7:00 am General Motors CEO Rick Wagoner oustedThe executive's move comes at the request of the White House, Obama administration officials say. In one of its...Source: RSS feed - channel BNPaperBusiness | 30 Mar 2009 | 7:00 am AIG delays funds to some real-estate ventures: report (Reuters)
Source: Yahoo! News: Business | 30 Mar 2009 | 6:56 am Royal London capital cushion shrinks £1.1bnRoyal London, Britain's biggest mutual life assurer, revealed today that £1.1 billion had been wiped from its regulatory capital cushion in the past 12 months because of slumping markets and the deal to buy Resolution assets from Pearl.Source: Latest Business News from Times Online | 30 Mar 2009 | 6:41 am NZ stocks: Market falls after strong startThe New Zealand sharemarket lost ground today but losses were alleviated by gains in heavyweight stocks in the afternoon. The benchmark NZSX-50 index was down 11.487 points overall, or 0.433 per cent, to 2641.988, following its...Source: New Zealand Herald - Business | 30 Mar 2009 | 6:14 am Nikkei briefly down 4 percent as autos fall (Reuters)Reuters - Japan's Nikkei stock average fell 4 percent on Monday after a U.S. autos task force rejected restructuring plans submitted by General Motors and Chrysler LLC, sending automakers tumbling. In a stunning reversal for management at both automakers and GM investors and creditors who had bet on a softer line, the Obama administration task force warned both firms could be put through bankruptcy to slash debts.Source: Yahoo! News: Stock Markets News | 30 Mar 2009 | 5:56 am Currency: Dollar stays in US56c rangeThe New Zealand dollar traded in a narrow range today and headed lower against the US greenback, despite stronger building consent data. At 8am today the kiwi was buying US56.94c, down from US57.57c at 5pm on Friday. Today it reached...Source: New Zealand Herald - Business | 30 Mar 2009 | 5:27 am Regulators see new role for Fannie, Freddie: report (Reuters)Reuters - The regulator of U.S. government-controlled Fannie Mae and Freddie Mac is looking at ways the two firms might help finance small mortgage banks hobbled by a dearth of credit, the Wall Street Journal reported.Source: Yahoo! News: Business | 30 Mar 2009 | 4:57 am The Pitfalls of Reverse Mortgages (Consumer Action)For years, reverse mortgages have been sold as a way for cash-strapped seniors to get some extra cash. But falling home prices, lending rules and growing instances of fraud could make these loans an incredibly risky proposition for some borrowers. With a reverse mortgage, homeowners 62 years of age or older can convert the equity in their home into a loan that they won't have to pay back until they either die or move out. If they move out, the borrower either has to cough up the cash or sell the home, a move so difficult in today's housing market that they could end up facing foreclosure. Last year, lenders made more than 115,000 of these federally-insured loans, known as HECMs, compared with just 8,127 in 2001, according to the National Reverse Mortgage Lenders Association, or NRMLA, an industry trade group. Now, even more seniors may be tempted to take the leap. The Economic Stimulus bill lifted the maximum amount that seniors can borrow to $625,500 in 2009. (Previously, the borrowing limits were tied to the home’s location and were as low as $217,000.) In January and February alone, reverse mortgage lenders originated nearly 46,600 loans — on pace to far exceed last year’s numbers. But as the industry grows, so do concerns among financial planners like Rockville, Md.-based Karen Schaeffer. “When I hear someone talking about a reverse mortgage, I want to back up to see the bigger picture,” she says. “If you can’t afford the house you’re in, a reverse mortgage won’t solve that problem.” When used the right way – and for the right reasons – reverse mortgages can be an effective way to supplement one’s income. But they’re also laden with potential traps like expensive fees and growing occurrences of fraud. Here’s what you or your parents should consider before getting a reverse mortgage. 1. Can you afford to stay in your home — as long as you live?Once you take a reverse mortgage, the bank expects you to maintain the house, says Leslie Linfield, executive director of the Institute for Financial Literacy, a nonprofit that provides prebankruptcy counseling. That may not only become difficult physically, but financially as well. “We’ve had homeowners who’ve received a reverse mortgage and in a couple of years have fallen behind on their [real estate] taxes,” says Tawnya Walters, director of housing counseling at Consumer Credit Counseling Service of Greater Dallas. The problem is that if you can't afford to maintain the house, then you probably can't afford to move either — unless you’re sure that your home will be sold before the bank moves to foreclose. (If you move to a nursing home, you have up to a year to return to your home.) 2. Fees, fees, feesEven though the Housing and Economic Recovery Act of 2008 capped origination fees at $6,000 per loan (from an uncapped 2% of the home’s value previously), other fees remain as high as ever. You’ll pay standard closing costs and a mortgage insurance premium fee, which is another 2% of the home’s value. On top of that, you’ll pay a $30 to $35 monthly servicing fee for mortgage insurance, and a $125 fee for mandatory credit counseling, regardless of whether you decide to take a reverse mortgage or not. (The Department of Housing and Urban Development, or HUD, requires that the charge is waived for consumers in financial hardship.) “If the person remains in the home a long time, [the fees] make sense,” says Barry Zigas, director of housing policy for Consumer Federation of America, an advocacy group. “But if you die or leave the home fairly early in the reverse mortgage’s life, it can seem like a very expensive proposition.” 3. There are cheaper alternativesWhen considering a reverse mortgage to pay off debt or another one-time expense, look for cheaper alternatives first. Credit-counseling agencies may know of programs or grants to help seniors with home repairs at low or no cost, says Richard Shram, special projects director at Consumer Credit Counseling Service of Greater Atlanta. 4. Fraud and cross-sellingAs demand for reverse mortgages has spiked, so has fraud. The most common scenario: an insurance agent convinces a senior who just took a reverse mortgage to invest the money in an annuity that won’t begin payments for years, or to buy a long-term-care-insurance policy that may not be appropriate for them, says Bronwyn Belling, a reverse-mortgage specialist with AARP. NRMLA President Peter Bell says this is a “seriously overblown issue,” adding that the Housing and Economic Recovery Act restricts lenders from selling insurance, annuities or other financial products to the same borrower. But there’s nothing to stop annuity salesmen from buying potential customer lists from companies who sell those same lists to reverse mortgage brokers. SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved. Source: SmartMoney.com | 30 Mar 2009 | 4:00 am New Tax Breaks for Turbulent TimesAs the recession drags on and taxpayers struggle to cough up their due to Uncle Sam, the Internal Revenue Service is playing an unusual new role: Mr. Nice Guy. Indeed, to ease the burden on folks who have lost jobs or seen home and investment portfolios plummet, the agency is reducing monthly payments on back taxes and delaying collection actions. Here are some of the newest breaks and credits for last-minute filers: New owner advantageBuyers who haven't owned a home for the past three years and bought between Apr. 8 and Dec. 31, 2008, can score up to $7,500 back on this year's return. But there's a catch: Uncle Sam wants that money back -- repaid over 15 years or all at once if you sell. Those who buy between Jan. 1 and Nov. 30, 2009, can get up to $8,000 back on either their 2008 or 2009 return, which they won't have to pay back if they live in the home for at least three years. Worker's compensationDidn't receive the full $600 "economic stimulus payment" in 2008? Your income was probably too high in 2007 to qualify. But if you were one of the more than 4.4 million people who lost their job since the Recession began or otherwise saw their income drop, you could qualify for up to $600 in a "recovery rebate credit." A special calculator on the IRS Web site, IRS.gov, helps determine whether you qualify and for how much. Underwater optionsWhen the tech bubble popped earlier this decade, thousands of workers who held incentivizing stock options were hit with a hefty alternative minimum tax. Problem is, that levy can sometimes cost employees much more than the actual value of the declining shares. Fortunately, last year's bailout bill now provides some credit for anyone who's been in a similar situation (not just the tech brigade) -- while those still unable to pay are essentially off the hook, says Joseph Wallin, a Seattle-based tax lawyer. Foreclosure forgivenessThere's also a modest silver lining for anyone who had their home foreclosed on or their mortgage restructured last year. In the past, any forgiven debt would have been taxed. That's no longer the case if the balance on the loan is less than $2 million. SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved. Source: SmartMoney.com | 30 Mar 2009 | 4:00 am 5 Ways to Avoid an Audit (Deal of the Day)If you think you have to be caught stowing away cash in an offshore bank account to trigger an audit, think again. One tiny error on your tax return can have the IRS knocking on your door. There’s good reason to be meticulous this year: According to the most recent data, in 2007 the IRS audited approximately 1.4 million returns, a 7% increase from 2006 and the highest number on record since 1998. And this year, it's unlikely that number will fall, says Mark Luscombe, a principal analyst at CCH Tax and Accounting. So what will make the IRS question your return? Here are five common red flags that the IRS will be on the lookout for this tax season. Failing to Show All of Your IncomeThe worst mistake a taxpayer can make is to fail to report all of his or her income. In addition to salary and bonuses, make sure to include proceeds from sales of stocks and bonds, dividend earnings, brokerage and bank accounts and any other interest-earnings investments. Also, if you received unemployment income, that needs to be included, too. Investors who sold stock, bonds or mutual funds in 2008 need to show how much they gained or lost between the date they bought and the date they sold their investments. Many brokerage firms don’t provide this information -- instead their statements will just include the price at which you sold -- so the taxpayer will have to find the paperwork from when they first bought an investment. Also, even if your investment declined in value, you may still have to pay taxable income, says Maureen McGetrick, accountant and partner at New York-based BDO Seidman. (See our story for more on investment gains and losses.) Failing to Pay Taxes on Forgiven DebtJust because a credit-card company (or other lender) agreed to reduce your debt doesn’t mean you’re off the hook from paying taxes on it. Make sure to include the forgiven debt in your tax return. For example, a consumer who got his credit-card debt reduced from $10,000 to $6,000 will still be expected to pay taxes on that $4,000 of forgiven debt. Debts are not taxable income in cases where the taxpayer proves that his debts surpass his assets or when debts get discharged through bankruptcy – be it Chapter 7 or 11. (Read our story for more on taxes and debt forgiveness.) Filing a Small Business LossSmall-business owners who report losses have been on the IRS’s audit radar in recent years, says McGetrick. To avoid raising suspicions, show proper documentation, including bank account statements (it’s always best if the business accounts are separate from the personal ones), receipts and invoices. So if you take a client out to dinner and foot the bill, don't write it off on your tax return unless you have the receipt to prove it. If your small business shut down last year, be as accurate as possible when claiming that a fixed asset like a computer has depreciated in value, says McGetrick. Claiming a Home-Office DeductionHome-office deductions are often abused and therefore big red flags for the IRS, says Brittney Saks, a partner at PricewaterhouseCoopers. In order to qualify for this deduction, the office must be your principal place of business and used exclusively for business. So, you won't be eligible for a deduction if you use the office for business during the day and as a family room at night or if your employer is offering you work space at the company office. Misreporting Real Estate Gains and LossesWhether you lost your home to foreclosure or managed to eke out a gain on a sale, you'll need to include the transaction on your tax returns. Because a primary residence is a personal asset, homeowners can’t claim a deductible on their tax return if they sold their home at a loss, says Saks. In many instances, the real estate investor who sold an apartment building at a loss will make off with more from the IRS. He or she can claim a deductible, but will need to show the price they bought and sold it for and the amount of money they pumped into the building, whether it be for maintenance or repairs. Meanwhile, those fortunate few homeowners who made money on the sale of their home will need to report that gain. There is some good news for those who underwent a foreclosure last year: The Mortgage Forgiveness Debt Relief Act of 2007 does not require homeowners who lost their home to pay taxes on the forgiven mortgage debt. This applies only to individuals who lost their primary residence due to foreclosures that occur through 2012. Individuals who lost a rental property to foreclosure will, however, have to pay taxes. Click here for more on homeowner tax breaks. SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved. Source: SmartMoney.com | 30 Mar 2009 | 4:00 am Geithner won't say if more bailout money neededWASHINGTON (Reuters) - U.S. Treasury Secretary Timothy Geithner said on Sunday the government will have about $135 billion left after banks give back some bailout money and declined to say whether he will ask Congress for more.Source: Reuters: Business News | 30 Mar 2009 | 1:48 am Dorchester Finance investors get some money backSecured debenture holders of Dorchester Finance are getting some of their money back. The troubled finance company has made a second instalment of principal payable under a deferred repayment plan. It owes debenture holders $168...Source: New Zealand Herald - Business | 30 Mar 2009 | 12:38 am Building consents up from New Year lowBuilding consent figures for February improved from January's deep hole, but remain low. Last month 1059 dwellings were authorised, of which 193 were apartments, Statistics New Zealand (SNZ) said today. In February 2008, 1874 dwellings...Source: New Zealand Herald - Business | 30 Mar 2009 | 12:00 am Double-digit unemployment looms, OECD tells G8ROME (Reuters) - The global economic crisis will hit jobs hard, with unemployment set to reach double digits in many developing and advanced countries, the Organization for Economic Cooperation and Development (OECD) said on Sunday.Source: Reuters: Business News | 29 Mar 2009 | 11:39 pm Obama calls for G20 unityPresident Barack Obama is voicing optimism that this week's crucial G20 summit will set the framework for recovery, saying that world leaders know they must 'deliver a strong message of unity' for the sake of the global economySource: Financial Times - US homepage | 29 Mar 2009 | 11:35 pm G-20 leaders 'determined to restore growth now' - reportLONDON- Leaders of the world's richest nations plan to shun protectionism and improve regulation at their summit this week in London, according to a draft communique of their conclusions published by the Financial Times on Sunday. The...Source: New Zealand Herald - Business | 29 Mar 2009 | 11:30 pm Dealbreaker Weekend: Obama To Wagoner: You're Fired!Mr. Wagoner has been CEO since 2000 and has managed the company through some of its most difficult moments. Over the last four years, GM has reported losses of $82 billion and nearly ran out of money at the end of 2008 before the U.S. Treasury Department provided emergency loans. GM's Wagoner Will Step Down [The Wall Street Journal]
Source: Dealbreaker | 29 Mar 2009 | 11:21 pm Report reveals China-based cyber spying ringA Chinese spying operation obtained sensitive data from hundreds of government computers in more than 100 countries, according to a new report from Toronto University expertsSource: Financial Times - US homepage | 29 Mar 2009 | 11:11 pm Citi seeks Nikko Cordial bidsCitigroup is looking for bids for Nikko Cordial, the brokerage, in a move that could raise more than $5bn for CitigroupSource: Financial Times - US homepage | 29 Mar 2009 | 11:02 pm Food for thoughtHard to swallowSource: Latest Business News from Times Online | 29 Mar 2009 | 11:00 pm Baghdad's petrol queues may be gone, but its motorists still grumbleParking in front of a pump at a petrol station in Baghdad, a man steps out of his car and smiles while he fills his tank. Two years ago Ali Sayeed, like most other Iraqis, spent up to 48 hours queueing for fuel in the capital as attacks on oil pipelines, smuggling and a lack of domestic production squeezed supply.Source: Latest Business News from Times Online | 29 Mar 2009 | 11:00 pm Collapse of crude prices heralds wave of oil industry consolidationThe oil industry is bracing itself for a wave of consolidation as cash-rich companies acquire more vulnerable rivals that are struggling after the collapse of the price of crude, analysts say.Source: Latest Business News from Times Online | 29 Mar 2009 | 11:00 pm BA and Iberia merger talks are idling on the tarmacMerger talks between British Airways and Iberia, the Spanish flag carrier, are making little progress, despite recent assurances from both sides that a deal was imminent.Source: Latest Business News from Times Online | 29 Mar 2009 | 11:00 pm Mobile roaming decisions deferred by regulatorThe Commerce Commission is deferring a decision on whether it should investigate regulating the price of mobile roaming. National roaming allows subscribers of one mobile network to use their mobile telephone handset on a different...Source: New Zealand Herald - Business | 29 Mar 2009 | 11:00 pm NZ Shares: Market opens week with a fallThe New Zealand sharemarket started the week with a fall, following equities in the United States down. Leading shares were at the forefront of today's early decline with Contact Energy giving up 15c to $6, Fletcher Building down...Source: New Zealand Herald - Business | 29 Mar 2009 | 10:36 pm GM boss Wagoner to step down at White House requestDETROIT - General Motors Chairman and CEO Rick Wagoner will step down immediately at the request of the White House, administration officials have said. The news comes as President Obama prepares to unveil additional restructuring...Source: New Zealand Herald - Business | 29 Mar 2009 | 10:30 pm EU to probe web user profiling by advertisersEU officials fear violations of "basic rights in terms of transparency, control and risk" and could push for new controls on online advertisers, internet service providers and networking sitesSource: Financial Times - US homepage | 29 Mar 2009 | 10:20 pm GE sees first 'glimmers of hope' in economyGeneral Electric has started to see the first 'glimmers of hope' in the world economy, according to a senior executive at the US conglomerate.Source: Financial Times - US homepage | 29 Mar 2009 | 10:13 pm Britain's Channel tax havens feel chill of recessionJERSEY- Is the sun about to set on Britain's empire of tax havens? It doesn't feel that way in the early evening sun on the patio of a chic cafe in Jersey's capital of St. Helier, where smartly dressed islanders talk business over...Source: New Zealand Herald - Business | 29 Mar 2009 | 10:00 pm M&A volume starts year with 36% fallGlobal M&A activity is down year-on-year as governments around the world have helped the collapse by investing $145.8bn into banks and insurance companiesSource: Financial Times - US homepage | 29 Mar 2009 | 6:23 pm Wall Street rally rests on data due this week (AP)
Source: Yahoo! News: Stock Markets News | 29 Mar 2009 | 4:56 pm Eli Lilly spurns trend of mega-mergersThe chief executive of Eli Lilly has ruled out a link with Bristol Myers Squibb as he criticised the current round of 'mega-mergers' and the consolidation trend in the sector.Source: Financial Times - US homepage | 29 Mar 2009 | 4:49 pm
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