Sonntag, 30. November 2008

Saks Ramps Up Takeover Defenses

Saks Inc. (SKS) on Wednesday adopted a poison-pill strategy to avoid takeover after Mexican billionaire Carlos Slim Helu reported a nearly 18% stake in the company.

If any stockholder buys 20% of more of the company, the poison-pill plan gives other shareholders the right to buy additional shares at a 50% discount, among other things.

Saks’ Securities and Exchange Commission filing said it would “impose a significant penalty upon any person or group which acquires beneficial ownership of 20% or more of the Company's outstanding common stock without the prior approval of the Board of Directors.”

Slim reported in a SEC filing last week that he now owns more than 25 million shares in Saks. His fortune comes mainly from his ownership of Latin American telecommunications companies.

Saks spokeswoman Julia Bentley declined to comment on the timing of the announcement to The Wall Street Journal, but she told the paper that Saks had a rights plan for more than a decade that expired in March 2008.

Saks shares were recently trading at $4.20, up 5%. According to Reuters, Slim picked up 1.5 million shares for between $2.76 and $3, so he appears already to be in the black with the investment.


GM Warns GMAC May Fail
Report: VeraSun to File for Bankruptcy Protection
Wachovia, suitors put lawsuit on hold
Ex-CCA chief executive sued by old business partner

Black Friday Caps Tough Week of Data; Jobs Report Looms

While some observers were looking at the Friday after Thanksgiving -- historically “Black Friday” -- as an economic indicator, the meatier gauge will come next Friday with the November employment report -- and it’s not likely to be pretty!

Black Friday is important because it officially kicks off the holiday shopping season when retailers do the biggest chunk of full-year sales. It took on added importance this year because the shopping season was a week shorter than in 2007 when Thanksgiving was a week earlier.

The hoped-for Friday retail surge followed a week of digestive challenge, the easiest of which was Thursday’s Thanksgiving meal.

The tough, short week began disappointing housing news with a decline in existing home sales -- and more significantly, a decline in the median price of an existing single-family home. The price plunges were confirmed with the Case Shiller Home Price Index report, which showed record year-year price declines in the national index, the 10-city index and the 20 city index in September. After a couple of months in which details were stronger than the headlines in the Case Shiller index, the data this month turned decidedly negative with no cities registering a price gain in September. The declines partly reflect the generalized weakness in the housing market but also the effects of distressed sales -- foreclosures and short sales -- on home prices. While falling prices should encourage buyers by making homes more affordable, they will also discourage transactions because lenders will be reluctant to trust appraisals, and fear loans might quickly be “under water,” with borrowers owing more than homes are worth.

The home sales data -- existing sales Monday and new home sales Wednesday -- were consistent in taking price out of the home sales equation. In both reports, even as prices fell, sales did not increase from month earlier levels. Indeed, the median price of an existing single family home plunged to the lowest level since March 2004. The median price has dropped $31,800 -- almost 15% --since June and has fallen year-year for 14 straight months, down $23,400 -- 11.3% -- in the last year, the largest drop ever in both percentage and dollar terms.

One factor contributing to the decline in prices is the surge in foreclosure sales which, according to the National Association of Realtors, made up 45% of the October home sales. Excluding the sale of foreclosed homes would have made the bad report only worse. The nationwide price decline was driven by a plunge in the median price of an existing home in the West census region: down $23,700. Of the 13 states in the West census region, four are among the top 10 states in foreclosure rates; nine are among the top 20.

Home sales will continue to be a balancing act between buyer and seller. Compounding the sales stall are mortgage lenders who, according to the most recent Federal Reserve Senior Loan Officers Survey continue to tighten lending standards.

New home sales fell for the ninth time in the last year, as the sales pace dipped to the lowest level since January 1991 in the midst of the 1990-91 recession. In October, as sales were below 500,000 for the fourth time in the last five months, builders completed 774,000 new single family homes, the Census Bureau reported earlier this month.

As bad as the housing news was, consumer news was worse with a report that personal consumption spending fell 1% in October, the largest month-month percentage decline since September 2001. With consumption about 70% of GDP, the report was a weak start for the fourth quarter. The details were more discouraging than the headline as they showed weakness in spending on high-ticket durable goods. Durable spending -- typically a signal of consumer confidence -- fell as a share of total spending to the lowest level since this data series began in 1959. Consumers essentially remained on strike in October.

The income side of the report, though showing an increase, was also weak showing slow wage growth which makes the 10-month decline in payroll jobs more severe: fewer people are working to receive slowly increasing wages, adding pressure on household budgets.

There was some forward looking data too with Wednesday’s report on first-time and continuing unemployment insurance claims. Though initial claims for unemployment dipped slightly, first-time unemployment insurance claims exceeded 500,000 for the third straight week -- the longest such string since 1982. From mid-October to mid-November (the measurement points used in the monthly employment situation report) initial claims increased 64,000. When initial claims grew 63,000 from mid-July to mid-August, the unemployment rate jumped from 5.7% to 6.1%.

Continuing claims for unemployment insurance -- a surrogate for jobs -- also improved [that is, declined] slightly ,though the four-week moving average climbed. From mid-October to mid-November continuing claims jumped 241,000. Last month continuing claims increased 178,000 and payrolls contracted by 240,000.

The employment report next Friday will reflect the claims data and could show a drop in payroll jobs of as much as 300,000 which would be the largest decline since October 2001 following the terrorist attacks one month earlier. That report will cap what is expected to be another flurry of bad news.

Mark Lieberman is the senior economist for the Fox Business Network. Prior to joining FOX, he served as first vice president and manager of economic analysis and research at Washington Mutual in New York. Before that, he served as senior vice president at Dime Savings Bank of New York (which was later acquired by Washington Mutual), where he specialized in credit and risk management. He is a member of the Executive Committee of the New York Association for Business Economics. He has a degree in Economics from the Wharton School of the University of Pennsylvania.

Monday, December 1Construction Spending (Oct)September actual: DOWN 0.3%October consensus: DOWN 0.8%ISM Manufacturing Index (Nov)October actual: 38.9 DOWN 4.6November consensus: 37.6Federal Reserve Chairman Ben S. Bernanke
speaks on Federal Reserve Policies in the Financial Crisis
at a meeting of the Greater Austin Chamber of Commerce in Austin TX.Tuesday, December 2Light Vehicle Sales (Nov)October actual: 10.5 million DOWN 2.0 millionNovember consensus: 9.9 millionPhiladelphia Fed President Charles Plosser speaks
on the economic outlookWednesday, December 3MBA Application Index (Week ended: November 28)Week Ended November 21: 404.4 UP 1.5%Four-week moving average: 416.3 DOWN 1.3%No November 28 consensusChallenger Layoffs (Nov)October actual: 112,884 UP 17,790No November consensusADP Employment Report (November / BLS Private sector)October actual: DOWN 157,000 / DOWN 263,000No November consensusISM Non-Manufacturing Survey (Nov)October actual: 44.4 DOWN 5.8November consensus: 43.0Productivity and Costs (3Q) RevisedOutput per hour2Q Final: UP 3.6%3Q Preliminary: UP 1.1%3Q Final consensus:Unit Labor Costs2Q Final: DOWN 0.1%3Q Preliminary: UP 3.6%No 3Q Final consensusBeige Book (for Dec 15-16 FOMC Meeting)Federal Reserve Governor Randall S. Kroszner speaks
on The Community Reinvestment Act
and the Recent Mortgage Crisis at the Policy Forum on Concentrated Poverty in Washington DCRichmond Fed President Jeffrey Lacker speaks on the economic outlookThursday, December 4Monster Employment Advertising Index (Nov)October Actual: 150 UP 10No November consensusUnemployment Insurance Claims (Week Ended November 29)November 22 Actual: 529,000 DOWN 14,000November 29 Consensus: 540,000Four-week moving average: 518,000 UP 11,000No November 29 consensusMBA Mortgage Delinquency Survey (3Q) [Tentative]All Residential Mortgages2Q actual: 6.4% (Unchanged from 1Q)No 3Q consensusPrime Mortgages2Q actual: 3.9% (UP 0.2)No 3Q consensusSubprime Mortgages2Q actual: 18.7% (DOWN 0.1)No 3Q consensus:Factory Orders (Oct)Total orders:September actual: DOWN 2.5%October consensus: DOWN 2.0%Ex-Transportation:September actual: DOWN 3.7%No October consensusFlow of Funds (3Q)Household Net Worth2Q actual: $55.99 trillion DOWN 0.8% Q-Q, DOWN 3.5% Y-YNo 3Q consensusFederal Reserve Chairman Ben S. Bernanke speaks
on Housing and Housing Finance at Presidents’ Conference
on Homeownership and Mortgage Initiative in Washington DCFederal Reserve Governor Randall S. Kroszner participates
in a panel discussion on Mortgage-Backed Securities
at the Presidents’ Conference on Homeownership and Mortgage Initiative
in Washington DCFriday, December 5Employment Situation (Nov)Change in payroll employmentOctober actual: DOWN 240,000November consensus: DOWN 268,000Unemployment RateOctober actual: 6.5% UP from 6.1% in SeptemberNovember consensus: 6.7%Average workweekOctober actual: 33.6 hours UNCHANGED from SeptemberNovember consensus: 33.6 hoursAverage hourly earningsOctober actual: $18.21 UP 4¢, 0.2% from SeptemberNovember consensus: $18.25 UP 4¢, 0.2%Consumer Credit (Oct)September actual: UP $6.9 billionOctober consensus: UP $5.5 billion




Home sales continue to slide
Lower gas prices don’t alleviate auto industry’s pain
Producer, Consumer Prices Ahead In Upcoming Week

Euro Gains on Dollar

The euro was higher against the dollar on Friday in quiet trading over the U.S. Thanksgiving holiday period.

The 15-nation euro traded at $1.2943 in European morning trading, up from $1.2900 in European afternoon trading Thursday. U.S. markets were closed Thursday for the Thanksgiving holiday.

The British pound slid to $1.5434 from $1.5489, while the dollar dipped to 95.29 Japanese yen from 95.31 yen.

Currency markets were quiet Thursday, with U.S. stock markets closed and a shortage of new economic data, and "there's little in the way of fundamentals that suggest today will be much different," said James Hughes, a currency analyst at CMC Markets.

However, "today also acts as something of a landmark for U.S. retailers with 'Black Friday', often considered the busiest retail shopping day of the year," Hughes said. Once sales figures start emerging in the coming days, that could give the dollar new direction, he said.


Retailers’ holiday deals begin early
European, Asian Shares Advance on Rate Cut Hopes
European Stocks Open Lower After G-20 Summit

Asian Stocks Gain; Europe Opens Lower

Asian stock markets rose Friday as investors bought beaten-down shares on hopes that economy-boosting steps by governments around the world would help ward off a deep global recession. European shares opened lower.

Indian stocks gained after trading was suspended Thursday because of the terrorist attacks in Mumbai, the country's financial center, that left at least 143 people dead. The benchmark Sensex index opened lower but was up 0.8% in afternoon trading at 9,101.06.

Across the region, Mumbai attacks -- as well as the shutdown of Bangkok's airports by anti-government protesters, which entered its fourth day -- did little to dampen improving investor sentiment.

Instead, investors were hopeful that a raft of policy measures around the world, such as Washington's rescue of Citigroup Inc. and China's rate cut and multibillion dollar stimulus plan, would limit the scale of the global downturn next year.

"The market is reacting very calmly to the terrorist attack," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong. "Investors in Hong Kong are still fixated on China's huge reduction in interest rates. There's bargain-hunting across the board."

Traders will be closely watching indications of sales on Friday across the United States. The day after the Thanksgiving holiday is traditionally one of the biggest shopping days of the year. With the U.S. economic slump, the upcoming Christmas sales period is not expected to be particularly good for retailers.

Hong Kong's Hang Seng index rose 336.18 points, or 2.5%, to 13,888.24 -- a gain of 9.7% for the week. Japan's Nikkei 225 index climbed 1.7% to 8,512.27 -- an advance of 7.6% for the week.

Sentiment in Hong Kong was lifted by hopes that Wall Street would extend its four-day gain Friday after Thursday's holiday.

"Investors are having some wishful thinking that the U.S. stocks will continue to rise as market sentiments are improving," said Conita Hung, head of research at Delta Asia Securities in Hong Kong.

Australia's benchmark S&P/ASX200 index surged 4.3%, while South Korea's benchmark rose 1.2%.

Thai stocks also rose amid speculation that the intensifying political unrest could be resolved over the weekend. Protesters wanting to unseat the prime minister have taken over Bangkok's two main airports, disrupting travel and shipments around the region. The main SET index jumped 3.1% to 401.84.

The only major Asian market to decline was mainland China, where the Shanghai Composite index fell 2.4%. But the index rose 8.2% for the month of November, its biggest one-month gain in 15 months, driven by optimism about the government's stimulus package.

In early European trading, Britain's FTSE 100 index was down 0.3% at 4,212.62, while Germany's DAX was down 1.1% at 4,614.

The Dow Jones industrial average jumped 2.9% Wednesday to 8,726.61, for its first four-day winning streak since April 15-18. The broader Standard & Poor's 500 index advanced 3.5% to 887.68, its first four-day advance since May

The rally came despite further poor news on the American economy. Figures showed durable goods orders in October slumped by a two-year high rate of 6.2%, new home sales at a 17-year low and consumer sentiment languishing at a 28-year low.

U.S. stock index futures were lower. Dow futures were down 26 points, or 0.3%, at 8,672, while S&P futures were down 2.8 points, or 0.3%, at 883.4.

Oil prices fell below $54 a barrel in Asia as investors eyed a possible production cut by OPEC this weekend amid a gloomy global demand outlook. Light, sweet crude for January delivery was down $1.24 to $53.20 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.

In currencies, the dollar dipped to 95.25 yen, while the euro slipped to $1.2865.


Markets are battered again
Futures Steady on Obama’s Presidency Win

Samstag, 29. November 2008

Mumbai's Terror Crisis Continues

MUMBAI, India--Commandos who stormed the Mumbai headquarters of an ultra-orthodox Jewish group found the bodies of five hostages inside, an Israeli emergency medical crew said, as a fresh battle raged at the luxury Taj Mahal hotel and other Indian forces ended a siege at another five-star hotel.

More than 150 people have been killed since gunmen attacked 10 sites across India's financial capital starting Wednesday night, including 22 foreigners — two of them Americans, officials said.

Early Friday night, Indian commandos emerged from a besieged Jewish center with rifles raised in an apparent sign of victory after a daylong siege that saw a team rappel from helicopters and a series of explosions and fire rock the building and blow gaping holes in the wall.

Inside, though, were five dead hostages.

A delegation from Israel's ZAKA emergency medical services unit entered the building after the raid and reported through an Indian aide that five hostages and two gunmen were dead, a ZAKA spokesman in Israel said. The spokesman had no information on the hostages' identities or whether there were wounded inside.

Jewish law requires the burial of a dead person's entire body, and the mission of the ultra-Orthodox ZAKA volunteers is to rescue the living — and in the case of the dead, carry out the task of gathering up all collectable pieces of flesh and blood.

By Friday evening, at least nine gunmen had been killed, one had been arrested and as many as six were still in the Taj Mahal, said R. Patil, a top official in Maharashtra state, where Mumbai is the capital. He said more than 150 people had been killed and 370 injured.

After hours of intermittent gunfire and explosions at the elegant Taj Mahal hotel Friday, the battle heated up at dusk when Indian forces began launching grenades at the hotel, where at least one militant was believed to be holed up inside a ballroom, officials said.

Commandos had killed the two last gunmen inside the nearby Oberoi earlier in the day.

"The hotel is under our control," J.K. Dutt, director general of India's elite National Security Guard commando unit, told reporters, adding that 24 bodies had been found. Dozens of people — including a man clutching a baby — had been evacuated from Oberoi earlier Friday.

The airborne assault on the center run by the ultra-orthodox Jewish outreach group Chabad Lubavitch was punctuated by gunshots and explosions and exchanges of fire as forces cleared it floor by floor, according to an Associated Press reporter at the scene.

Mumbais Terror Crisis Continues

Nearly 12 hours after the battle began, Indian troops left the building to cheers from the crowd. Mumbai Police Chief Hassan Ghaffoor said "the operation was ongoing" but in its "final stage."

Israel's ambassador to India, Mark Sofer, earlier said they believed there were up to nine hostages inside. He denied reports that Israeli commandos were taking part in the operation.

Moshe Holtzberg, a 2-year-old who was smuggled out of the center by an employee, is now with his grandparents. His grandfather told Israel Radio on Friday that he had no news of Moshe's parents.

Security officials said their operations were almost over.

"It's just a matter of a few hours that we'll be able to wrap up things," Lt. Gen. N. Thamburaj told reporters Friday morning.

The group rescued from the Oberoi, many holding passports, included at least two Americans, a Briton, two Japanese nationals and several Indians. Some carried luggage with Canadian flags. One man in a chef's uniform was holding a small baby. About 20 airline crew members were freed, including staff from Lufthansa and Air France.

"I'm going home, I'm going to see my wife," said Mark Abell, with a huge smile on his face after emerging from the hotel.
Abell, from Britain, had locked himself in his room during the siege. "These people here have been fantastic, the Indian authorities, the hotel staff. I think they are a great advertisement for their country," he said as security officials pulled him away.

The well-coordinated strikes by small bands of gunmen starting Wednesday night left the city shell-shocked.

Late Thursday, after about 400 people had been brought out of the Taj hotel, officials said it had been cleared of gunmen. But Friday morning, army commanders said that while three gunmen had been killed, two to three more were still inside with about 15 civilians.

A few hours after that, Thamburaj, the security official, said at least one gunman was still alive inside the hotel and had cut of electricity on the floor where he was hiding. Shortly after that announcement, another round of explosions and gunfire were heard coming from the hotel.

Mumbais Terror Crisis Continues

Prime Minister Manmohan Singh blamed "external forces" for the violence — a phrase sometimes used to refer to Pakistani militants, whom Indian authorities often blame for attacks.

On Friday, India's foreign minister ratcheted up the accusations over the attacks.

"According to preliminary information, some elements in Pakistan are responsible for Mumbai terror attacks," Pranab Mukherjee told reporters in the western city of Jodhpur.

"Proof cannot be disclosed at this time," he said, adding that Pakistan had assured New Delhi it would not allow its territory to be used for attacks against India. India has long accused Islamabad of allowing militant Muslim groups, particularly those fighting in the disputed Himalayan region of Kashmir, to train and take shelter in Pakistan. Mukherjee's carefully phrased comments appeared to indicate he was accusing Pakistan-based groups of staging the attack, and not Pakistan itself.
Islamabad has long denied those accusations.

Earlier Friday, Pakistan's Defense Minister Ahmed Mukhtar, in Islamabad, denied involvement by his country: "I will say in very categoric terms that Pakistan is not involved in these gory incidents."

The gunmen were well-prepared, apparently scouting some targets ahead of time and carrying large bags of almonds to keep up their energy.

"It's obvious they were trained somewhere ... Not everyone can handle the AK series of weapons or throw grenades like that," an unidentified member of India's Marine Commando unit told reporters, his face wrapped in a black mask. He said the men were "very determined and remorseless" and ready for a long siege. One backpack they found had 400 rounds of ammunition inside.

He said the Taj was filled with terrified civilians, making it very difficult for the commandos to fire on the gunmen.
"To try and avoid civilian casualties we had to be so much more careful," he said, adding that hotel was a grim sight. "Bodies were strewn all over the place, and there was blood everywhere."

A U.S. investigative team was heading to Mumbai, a State Department official said Thursday evening, speaking on condition of anonymity because the U.S. and Indian governments were still working out final details.

India has been shaken repeatedly by terror attacks blamed on Muslim militants in recent years, but most were bombings striking crowded places: markets, street corners, parks. Mumbai — one of the most populated cities in the world with some 18 million people — was hit by a series of bombings in July 2006 that killed 187 people.

These attacks were more sophisticated — and more brazen.

They began at about 9:20 p.m. with shooters spraying gunfire across the Chhatrapati Shivaji railroad station, one of the world's busiest terminals. For the next two hours, there was an attack roughly every 15 minutes — the Jewish center, a tourist restaurant, one hotel, then another, and two attacks on hospitals. There were 10 targets in all.


Mumbai Attacks Unlikely to Cause Long-Term Damage
Aloft will add two hotels
Ex-CCA chief executive sued by old business partner
U.S. Denounces Terror Attacks in India

Italy Announces $103.2B Rescue Package

MILAN, Italy--The Italian government on Friday announced an euro80 billion ($103.2 billion) emergency package offering relief to banks, families and companies suffering in the global economic crisis.

The package, which is part of a proposed euro200 billion European Union effort to combat the world economic downturn, includes aid to needy families, public works projects and mortgage relief.

"The middle class can maintain the same lifestyle," Premier Silvio Berlusconi told a news conference in Rome after his Cabinet approved the measures. "The length of the economic crisis depends on all of us, on our capacity to trust and to look at the future with hope."

The measures include euro2.4 billion cash payments for needy families -- expected to reach 8 million people. Other funds are earmarked for infrastructure, such as structural improvements to schools after a week that saw one student killed when a classroom roof collapsed, and a separate fund of euro960 million for the national railway.

Under the decree approved at a Cabinet meeting Friday, highway tolls will not be increased for the first six months of the year. The emergency measure must be approved by Parliament, where Berlusconi's conservatives enjoy a comfortable majority.

The government also agreed to underwrite convertible bank bonds to help raise capital for the banks. It previously passed a measure to buy preferential stock without voting power for any bank in need, but none have yet sought the relief.
The measures also put a 4-percent cap on variable mortgage rates already in hand, and from Jan. 1 link future variable mortgages to interest rates set by the European Central Bank.

Berlusconi also said the government planned to reduce public debt now at 150 percent of GDP to 100 percent of GDP by 2011.

Finance Minister Giulio Tremonti said that the package would not have any impact on the three-year budget adopted in July.
"It is because we had the budget in place that we were able to undertake these measures," Tremonti told reporters.
Italy, Europe's fourth-largest economy, officially entered a recession in the third quarter.




Regional banks to sell maximum stock amount
G7 Nations Seek Solution to Financial Woes
Bush: Government Not Moving to Nationalize Banks

Donnerstag, 27. November 2008

U.S. Denounces Terror Attacks in India

WASHINGTON--The Bush administration strongly condemned a series of coordinated terror attacks Wednesday in the Indian city of Mumbai in which Westerners reportedly were targeted.

The White House and State Department both denounced the attacks by teams of heavily armed gunmen who stormed luxury hotels, a popular tourist attraction and a crowded train station in at least seven attacks, killing scores of people and wounding hundreds.

"We condemn these attacks and the loss of innocent life," White House spokesman Tony Fratto said. He said President George W. Bush had been told of the situation and would be kept updated. "We continue to seek more information," Fratto said

The Justice Department said the FBI was monitoring the situation closely and was prepared to offer help if Indian authorities asked but said no help had been requested.

At the State Department, deputy spokesman Robert Wood said all official Americans were safe and accounted for at the U.S. Consulate in Mumbai, which formerly was known as Bombay. He could not address reports that Westerners may been targeted in the attacks or were being held hostage.

"We are monitoring the situation very closely and stand ready to support the Indian authorities as they deal with this horrific series of attacks," Wood said. "At this point, we are unaware of any American casualties."




Mumbai Attacks Unlikely to Cause Long-Term Damage
Report: Deccan Mujahideen Claims Responsibility for Mumbai Attacks
Ex-CCA chief executive sued by old business partner
Rise in insurance costs dwarfs wage increases in Tenn.

Mumbai Attacks Unlikely to Cause Long-Term Damage

MUMBAI, India--The terror attacks that rocked India's financial capital may depress stocks, dampen tourism and slow new investment, but are unlikely to inflict long-term damage on the nation's economy, analysts and business people said Thursday.

"This is a challenge for the government to maintain law and order in the country," said Takahira Ogawa, director of sovereign ratings at Standard & Poor's in Singapore. "At this stage, I don't think there will be any major impact on the macroeconomic or fiscal position of the government."

The attacks, which began Wednesday night when gunmen invaded two posh hotels, a restaurant and several other sites in downtown Mumbai, came as India was struggling to contain fallout from the global financial crisis.

Foreign investors have already pulled $13.5 billion out of the nation's stock market this year, driving the benchmark Sensex index down 57 percent and punishing the rupee. Liquidity has dried up, economic growth is slowing and people are spending less money.

The attacks are "a challenge to the economic resurgence in India," said Habil Khorakiwala, chairman of Wockhardt, an Indian pharmaceutical company.

"The targets identified clearly demonstrate that the intention is to create panic and shatter the confidence in the minds of investors in India and global investors coming to India," he said in a statement. "This war has to be fought together by all across, to protect the safety of Indian people, for economic resurgence and growth of the Indian nation."

A previously unknown Islamic militant group claimed responsibility for the carnage, the latest in a series of nationwide terror attacks over the past three years that have tarnished India's image as an industrious nation galloping toward prosperity.

The gunmen singled out Westerners for punishment and struck two spots -- swish Oberoi hotel and the historic Taj Palace & Hotel -- at the symbolic heart of Mumbai's growing, global financial class.

Just last week former U.S. Secretary of State Henry Kissinger sat with top executives from Goldman Sachs and the Tata Group for a chat about American politics in one of the Taj's many opulent meeting rooms.

On Thursday, that wing of the building was engulfed in flames.

Throughout the day, explosions and gunfire were heard as Indian commandos tried to free hostages trapped by the militants. Officials said 104 people had died and more than 300 were wounded.

Anglo-Dutch food giant Unilever said that a number of senior executives, including group Chief Executive Patrick Cescau and his successor Paul Polman were in Mumbai at the time of the attacks. The company said all were safe and accounted for.

Mumbai's stock market was closed Thursday, and it was unclear when trading would resume.

Vishesh Chandiok, a partner at global consulting firm Grant Thornton, said he was supposed to fly to Mumbai and stay in the Taj Thursday night. His company indefinitely postponed plans to hold a global conference in Mumbai next week.

"It is a shock," he said. "There will be some short-term postponement of people's investment plans, and perhaps people thinking of relocating to Mumbai will reconsider."

But medium- to long-term corporate investment would likely remain on track, he said.

"India is no bigger a risk than anywhere," he said, adding: "Mumbai is a very resilient city. Saturday everything will be running as normal."

Indeed, Mumbai has a long history of terror attacks -- and has managed to bounce back from them. A series of bombings in July 2006 killed 187 people.

Chandiok said Indian companies are going to have to take security issues more seriously going forward, and Grant Thornton's India office has already begun a review of its policies.

Manjit Rajain, chairman of Tenon Services, a facilities management and security company whose clients include Accenture, Intel Corp., automaker Maruti Suzuki, the Tata group, and Vodafone, said he was up all night Wednesday, speaking with overseas clients.

"Yes, people will be scared," Rajain said. New investors may balk, but he said most of the companies he works with are too big and well entrenched to consider a hasty exit.


HCA to conserve cash, pay debt with bonds
Report: Deccan Mujahideen Claims Responsibility for Mumbai Attacks
Forecast hammers Genesco shares
U.S. Denounces Terror Attacks in India

Mittwoch, 26. November 2008

Obama's Economic Team: Big Resumes, Egos and Expectations

Missed tonight's Cavuto? Catch "The Deal" right here on FOXBusiness.com

Here's the deal:

Where are all these guys' offices?

Welcome, everybody, I'm Neil Cavuto.

And with all these Obama economic appointments, I'm just wondering...Where are they going to fit them all?

I know Treasury pick Tim Geithner has his own building next door...But what about these non-Cabinet appointments?

What about Paul Volcker? You can't put him in some cockamamie cubicle.

For one thing, he's a global financial rockstar.

And for another, he's really, really tall....

So just try putting Paul and his brand new economic recovery advisory board in a cubby.

But if you do, it better not be bigger than Larry Summers. He's a big deal too...Head of the National Economic Council.

Which is just down the hall from another big dude, the president's budget director...Peter Orszag.

...who's a paper airplane throw away from Council of Economic Advisers head Christina Romer, who's a spreadsheet shout from fellow adviser and Obama pal Austan Goolsbee, who'll also be working with Paul, so I guess he shouldn't be far from Paul.

In what, I suspect, will be a very, very crowded West Wing.

This is an enviable economic team...Big resumes. Big egos, too.

And now big expectations.

So advice, to one and all.

Two words.

Food tasters.


Tax Hikes Loom Ahead
Cabinet Choices Delivered a Rally, But Can They Deliver a Solution?
Seasonal jobs outlook is dim

Report: Deccan Mujahideen Claims Responsibility for Mumbai Attacks

An organisation calling itself the Deccan Mujahideen has claimed it was behind attacks in India's financial capital Mumbai that have left at least 80 people dead, television channels reported on Thursday.

The previously unknown or little known group sent an email to news organisations claiming responsibility.

India has suffered a wave of bomb attacks in recent years. Most have been blamed on Islamist militants, although police have also arrested suspected Hindu extremists thought to be behind some of the attacks.


Market Winners and Losers: MetLife, Electronic Arts
Job losses accelerate, and worst may lie ahead

Dienstag, 25. November 2008

First on FBN: Treasury Posts Details of New Bank Rescue Program

Without fanfare, the Treasury Department posted to its Web site Tuesday details of a new program to rescue struggling financial institutions – the “Systemically Significant Failing Institutions Program” -- then disclosed it also has created a third, unnamed program to provide them with government cash.

A Treasury spokesperson said the department’s infusion of an additional $20 billion into Citigroup (C)this week was completed not under the Systemically Significant Failing Institutions Program – but under the new, third program. She indicated Treasury will post details of that additional program soon.

The Treasury’s first program to help stabilize the financial system, the Capital Purchase Program, or CPP, was launched in mid-October, two weeks after President Bush signed the Emergency Economic Stabilization Act, or EESA, into law. The legislation authorized the Treasury to spend up to $700 billion on efforts to strengthen the nation’s struggling financial system.

Under the CPP, Treasury is investing $250 billion into banks. Citigroup was one of nine institutions that received the first $125 billion in funding from the CPP. Citigroup received $25 billion, the maximum under the CPP, as did JPMorgan Chase (JPM) and Wells Fargo. The Treasury receives preferred stock in companies it invests in under the CPP, as well as warrants for common shares in each company.

According to a transaction report posted to the Treasury Web site on Tuesday, Treasury has invested $161.5 billion in 53 institutions through November 21. The new list of the transactions is here: http://www.treasury.gov/initiatives/eesa/docs/TransactionReport-11252008.pdf.

In the restructuring of the Federal Reserve’s rescue of insurance giant AIG (AIG) two weeks ago, Treasury invested $40 billion in AIG. When asked late Tuesday under what program Treasury had made the investment in AIG--it exceed the maximum of the CPP program—and under what program Treasury had made the subsequent additional investment in Citigroup, Treasury spokesperson Brookly McLaughlin said the AIG investment had been completed under a new Treasury program. For details, she referred Fox Business to the Treasury website, where the department had posted earlier in the day the guidelines for the Systemically Significant Failing Institutions Program. The guidelines can be found here: http://www.treasury.gov/initiatives/eesa/program-descriptions/ssfip.shtml.

“We released today the program description for the AIG transaction,” McLaughlin said in an email.

When asked about the Citigroup investment this week, McLaughlin indicated it had been made under a new, third program to assist financial institutions yet to be publicized. “It's a separate program - neither the capital purchase program or the program AIG was under,” she wrote in an email. When asked for details on the third program, McLaughlin said, “The law requires reporting on all that after the transaction closes.”

She did not respond to further requests for information on the third program or offer any explanation why Treasury created it. Based on the timing of disclosure of the program that AIG was assisted under--the Systemically Significant Failing Institutions Program -- Treasury could post details on the third program within two weeks or so.

Treasury did not issue a press release or make a public announcement Tuesday about the Systemically Significant Failing Institutions Program. As part of its standard operating procedures, the department does not issue releases or make announcements on all updates to its EESA efforts. Treasury does issue e-mail alerts to subscribers when new information is posted to its Web site about EESA programs, but does not identify the nature of the new information in its emails. (An Internet search found that several law firms that deal with executive compensation practices referred to the program in recent client materials.)

In its guidelines for the Systemically Significant Failing Institutions Program posted Tuesday, Treasury said financial institutions will be considered for government assistance under the program “on a case-by-case basis.”

“The primary objective of this program is to provide stability and prevent disruption to financial markets in order to limit the impact on the economy and protect American jobs, savings, and retirement security from the failure of a systemically significant institution,” Treasury said in the description. “In an environment of substantially reduced confidence, severe strains, and high volatility in financial markets, the disorderly failure of a systemically significant institution could impose significant losses on creditors and counterparties, call into question the financial strength of other similarly situated financial institutions, disrupt financial markets, raise borrowing costs for households and businesses, and reduce household wealth. The resulting financial strains could threaten the viability of otherwise financially sound businesses, institutions, and municipalities, resulting in adverse spillovers on employment, output, and income.”
In determining whether an institution is “systemically significant” and “at substantial risk of failure,” Treasury said it may consider, among other things:

1. The extent to which the failure of an institution could threaten the viability of its creditors and counterparties because of their direct exposures to the institution

2. The number and size of financial institutions that are seen by investors or counterparties as similarly situated to the failing institution, or that would otherwise be likely to experience indirect contagion effects from the failure of the institution

3. Whether the institution is sufficiently important to the nation’s financial and economic system that a disorderly failure would, with a high probability, cause major disruptions to credit markets or payments and settlement systems, seriously destabilize key asset prices, significantly increase uncertainty or losses of confidence thereby materially weakening overall economic performance or

4. The extent and probability of the institution’s ability to access alternative sources of capital and liquidity, whether from the private sector or other sources of government funds.

Treasury said it will determine “the form, terms, and conditions of any investment made pursuant to this program on a case-by-case basis in accordance with the considerations mandated in EESA. Treasury may invest in any financial instrument, including debt, equity, or warrants, that the Secretary of the Treasury determines to be a troubled asset, after consultation with the Chairman of the Board of Governors of the Federal Reserve System and notice to Congress. Treasury will require any institution participating in this program to provide Treasury with warrants or alternative consideration, as necessary, to minimize the long-term costs and maximize the benefits to the taxpayers in accordance with EESA.”

Treasury said will also require any institution participating in the program to comply with its restrictions on executive compensation. In addition, Treasury said that in assisting struggling institutions, it will consider other measures, including “limitations on the institution’s expenditures or bonuses, or any corporate governance requirements, to protect the taxpayers’ interests or reduce ongoing risks to the financial system.”

EESA gives the Treasury department broad authority to assist financial institutions. Treasury Secretary Henry Paulson and his team have considered various proposals to help them. Last week, Paulson announced Treasury would not proceed – for now -- with one of the specific programs included in the legislation--the purchase of trouble assets from banks and other companies.

Critics have accused Paulson of failing for formulate a consistent, strategic approach for dealing with the financial crisis. For his part, Paulson says he and his team are responding nimbly to changing circumstances. “There was no playbook for responding to a once or twice in a hundred year event,” he said in a speech last week. Among his guiding principles” for addressing the financial crisis, he said: “Be pragmatic enough to change plans when facts and conditions change. “


Federal Reserve, Other Banks Step Up to Financial Crisis
Paulson defends changes in bailout strategy
Federal hand in big banks irks Nashville counterparts
Breakdown of Rescue Bill Proposed By Senate

Tax Hikes Loom Ahead

Missed tonight's Cavuto? Catch "The Deal" right here on FOXBusiness.com

We now know his budget director.

We have no idea the direction of that budget.

But here's the deal.

Spending's going up....a lot.

And, I suspect taxes are going up...a lot.

The former, almost immediately.

The latter, not quite immediately.

The President-elect didn't say that.

But for the second time facing the press today...Announcing still more economic appointments today...The man who promised to shake things up, unquestionably will be rocketing the spending up.

Not so clear is when those taxes will go up.

Upper income folks delighting in the possibility theirs might not go up for a couple of years.

Two words:

Be careful.

Here's why:

The President-elect has not signed onto delaying those hikes.

And signs in Great Britain he has plenty of cover if he doesn't.

That's because as part of British prime minister Gordon Brown's own stimulus plan...He's hiking taxes on his upper income folks to 45% from 40%. And that's in an even lousier economy than ours!

So caution, my friends...While it's safe to say raising taxes in a slowdown isn't wise...It's not safe to assume our elected leaders are wise.

It's simply too early to know what Barack Obama will do...All I’m saying is he isn't exactly telegraphing what he "won't" do.


Start and end meetings on time; be engaged
Cavuto: Free Markets Turning Against History

Montag, 24. November 2008

Ohio Asks U.S. for $550M

COLUMBUS, Ohio--Ohio has asked the federal government for $550 million to help shore up a state unemployment compensation fund hit hard by the shrinking economy.

The letter sent Friday to U.S. Labor Secretary Elaine Chao asks for $50 million in December, and $250 million in both January and February.

The state's unemployment benefits fund is facing a spike in claims at the same time it's seeing a drop in revenue collected through taxes on businesses.

The fund currently holds about $277 million, down from $594 million a year ago and far below what the state regards as the minimum safe level of $2.5 billion.

The federal money would need to be repaid by a certain date or the state would face high interest rates. Ohio is asking for easier repayment terms.


Credit for businesses is harder to get, costlier
FDIC Seizes Two More Banks

U.S. to Back Citigroup's Troubled Assets

The federal government on Sunday night said it would throw its weight toward stabilization of troubled financial-services giant Citigroup Inc. (C) by moving to guarantee $306 billion in troubled assets on the bank's books, according to a joint statement issued by the Federal Reserve, Treasury Department and Federal Deposit Insurance Corp.

The deal involves Treasury injecting an additional $20 billion in capital into Citigroup. Treasury will charge an 8% interest rate for the first few years, which is higher than the rate charged to other banks participating in the Troubled Asset Relief Program. Citi had already received $25 billion in aid from TARP.

The Bush Administration said rescuing the battered bank was imperative to stabilizing the financial system, and ultimately putting the economy back on track.

"This is a tough situation for America, but we'll recover from it," President Bush said at a press conference. "The first step for recovery is to safeguard our financial system."

Citigroup CFOGary Crittenden defended the rescue, and Citi's position citing intense downward pressure on the bank's stock due to capital worries and general financial turmoil.

There is a concern that "the company ... raise substantial amounts of common equity, and when that concern exists there is always downward pressure on the stock price, and as the stock price itself goes down that just exacerbates itself," he told the FOXBusiness Network. "We have made it very clear that the amount of capital in the company now will allow the company to ... operate normally even in a very disruptive environment."

Citi will issue $7 billion in preferred stock with an 8% dividend that will be split between the Treasury and the FDIC. If those dividends aren’t paid in full for six dividend periods – whether consecutive or not – the Preferred shareholders will have the right to elect two directors. That right ends when a certain amount of the dividends are paid up.

In addition to the equity stake, the Treasury will receive $2.7 billion in warrants that can be exercised in total or in part any time in the next decade. If exercised, these warrants enable the Treasury to purchase Citigroup stock at $10.61 per share.

Among other measures, the new agreement limits common-stock dividends of more than one cent a share for the next three years without the permission of the Treasury, FDIC and Fed.

“A factor taken into account for consideration of the [government’s] consent is the ability to complete a common stock offering of appropriate size,” the release said.

The government also agreed to backstop a $306 billion pool of Citi's assets, which is meant to provide Citigroup with "protection against the possibility of unusually large losses." Residential assets will be guaranteed for 10 years, and non-residential assets will be guaranteed for 5 years. Assets will remain on Citi's books, the Fed said, but will be appropriately "ring-fenced."

In that plan, Citigroup must absorb the first $29 billion in losses from these assets, in addition to existing reserves.

Any losses in the portfolio in excess of that amount will be absorbed 90% by the government and 10% by Citigroup. The Treasury via TARP will absorb the first $5 billion of the government's losses, then the FDIC takes the next $10 billion. Any further losses will be absorbed by the Fed.

Citigroup would also agree to try to modify troubled mortgages held in the $306 billion pool. It is prohibited from paying common-stock dividends of more than one cent per share per quarter.

The Wall Street Journal reported that the government is not expected to seek management changes at Citi, which it saw as potentially too destabilizing. However, Citi will have to submit to the government for approval an executive compensation plan “including bonuses, that rewards long-term performance and profitability, with appropriate limitations,” according to the release.

Citi is reported to have approximately $1.2 trillion in risky, off-balance-sheet assets. Those assets include some $667 billion in mortgage backed securities and $406 billion in so-called variable interest entities. Citigroup CEO Vikram Pandit said in a town hall meeting that Citi does not "bear the credit risk" for those assets and that it is "highly unlikely that the vast majority of these mortgages will come back on our balance sheet."

Still, industry participants say that although it is unlikely for those assets to bear a risk, even if a small percentage do get back on the balance sheet, it could potentially cause billions in further writedowns.

Fears of such writedowns have pushed Citi's stock lower by more than 50% for the month. In trading Monday, Citi shares recently surged 61% to about $6.08.

It is also possible, experts say, for the bank to sell some of its assets to other companies to raise more capital. Indeed, HSBCChairman Stephen Green said Monday the bank would consider buying the "right" Citigroup assets, according to media reports.

Separately, Citigroup said Sunday night it will expand its Philippines operation by hiring an additional 1,000 workers, the Manila Standard Today newspaper reported Monday. The additional workers would expand Citigroup's call center and financial reporting operations, the paper said citing Citi's country manager Mark Jones.

This move comes on the heels of Citi's announcement last week that it would slash 52,000 jobs in a bid to cut costs.


Regional banks to sell maximum stock amount
Credit Crunch Sacks Banks in Third Quarter

Sonntag, 23. November 2008

Report: Obama May Tap Summers as Economic Adviser

WASHINGTON--President-elect Barack Obama is likely to name former Treasury Secretary Lawrence Summers as an economic adviser with the expectation that he will eventually be tapped for the Federal Reserve Board, The New York Times reported Friday.

Citing two sources familiar with the Obama transition, the newspaper also said that Summers could perhaps succeed Fed Chairman Ben Bernanke, whose term expires in January 2010.


CEOs Ask Obama for $300B Stimulus Package
Obama to inherit red ink

Cabinet Choices Delivered a Rally, But Can They Deliver a Solution?

Missed tonight's Cavuto? Catch "The Deal" right here on FOXBusiness.com

What a Cabinet choice!

What a game changer!

What a rally maker!

Not Hillary!

Tim!

Here's the deal:

He doesn't have her name recognition or famous spouse.

Even though he's worked with her spouse.

Actually, Tim Geithner has worked with everyone.

President of the New York Fed, some are already calling him this president's best cabinet choice yet.

A man who's worked with this Treasury Secretary on what some call the rescue to nowhere...now the next Treasury Secretary who has to get that rescue going somewhere.

He'll have company.

Bill Richardson’s going to Commerce.

And talk our friend Austan Goolsbee could be going to the President's Council of Economic Advisors.

Not all signed, sealed, and delivered...But enough signed and enough sealed, to deliver a rally on Wall Street today.

The markets were essentially flat before word of these appointments started leaking out.

That changed...fast.

Because some on the Street seem to think this Cabinet could change things fast...

Who knows? This much we do know.

With Hillary Clinton at State...it's not only a Cabinet of rivals...it's a Cabinet of considerable heft.

And these days, red or blue...what these guys who like green more than anything else want is a new administration with heft and clout to get things going...and fast.


Obama to inherit red ink
Pick Paul Volcker

AnnTaylor Swings to Loss as Shoppers Cut Back

Softening sales pushed AnnTaylor Stores (ANN) to a loss in the third-quarter as consumers continue to cut back amid the weak economic environment.

The women’s clothing retailer reported a loss of $13.4 million, or 24 cents a share, compared with a profit of $40.8 million, or 66 cents a share, in the same quarter last year. Excluding restructuring charges, the company would have come in even at 67 cents a share.

The company’s revenue for the quarter came in at $527.2 million -- a 12% drop from the $600.9 million it earned a year ago.

Analysts polled by Thomson Reuters were expecting a profit of 1 cent per share on revenue of $531.9 million.

Same-store sales for the quarter fell 19.4%, with Ann Taylor stores down 24.8% and Ann Taylor LOFT stores down 15.4%

AnnTaylor Chief Executive Kay Krill said the company’s soft performance was due to a “dramatic deterioration” in the overall economy, especially in the last part of the quarter. As a result, the company plans to step up its cost reduction initiatives and expand the restructuring program it announced earlier this month to maximize on savings.

“We are focusing our resources on managing through this difficult period, while also continuing to position our business for growth when the economy improves,” Krill said.

While no specifics were announced, the company said it cut capital spending for the next year and expects its fourth quarter to be “highly promotional” as consumer spending continues to decline.


Grilled: Wendy’s, Arby’s Swing to Loss
Western Union’s Net Rises 11%; Outlook Tightens
Dana to cut jobs, close plants
Wal-Mart’s profits rise as it draws from rivals

Geithner Bounce? Dow Surges 494

A wave of buying swept WallStreet late Friday after news broke that President-elect Barack Obama has tapped New York Fed Chief Timothy Geithner as the next TreasurySecretary, overshadowing giant question marks hovering over Citigroup.

The late-day surge helped ease the pain of a week that saw the Dow lose roughly 500 points and the S&P 500 plummet to levels unseen since 1997.

Today's Market

The Dow Jones Industrial Average jumped 494.13 points, or 6.54%, to 8046.42, the broader S&P 500 picked up 47.59 points, or 6.32%, to 800.03 and the Nasdaq Composite added 68.23 points, or 5.18%, to 1384.35. The consumer-friendly FOX 50 gained 38.13 points, or 6.44%, to 629.89.

The afternoon rally coincided with the unveiling of several key Cabinet picks in the incoming Obama administration, but market participants believed stocks were poised to rally given their week-long plunge.

“The market is down almost 52% from its highs and I think people are saying maybe it's time to put some money to work here. We’re in the bottoming process," said Anthony Conroy, head trader at BNY ConvergEx. “I think we're getting close because we’re seeing people sell some pretty good stocks. Usually those are the last ones to be sold.”

For the most part, traders were just happy to see the markets return to the green after a two-day plunge that clipped 900 points from the Dow in the index's worst two-day percentage drop since October 1987.

"We certainly could use [a rally]. Unfortunately, absent anything different fundamentally, I think it’s just technical in nature," NYSEtrader Ted Weisberg told FOXBusiness. "No matter what the reason, I think everybody will be happy with an up day."

Geithner Bounce? Dow Surges 494

In fact,Friday marked just the 11th time out of November's 15 trading days that the Dow has closed in positive territory. The current bear market is now worse than any on record since the 1937-1938 meltdown in the midst of the Great Depression. “If that’s true, you should be buying because that was one of the best buying opportunities ever," said Conroy.

Geithner Bounce?

Minutes after news broke that Geithner would be joining the incoming Obama administration the markets took off, surging well beyond session highs. Geithner, a key figure in the financial crisis and an architect of the rescue of AIG (AIG), will take over amid the greatest financial crisis in nearly a century.

"He is well-liked and well-respected. The market needed something to hold onto because it was being crushed," said Ken Polcari, managing director at ICAPEquities.

Geithner is no stranger to the Treasury Department, having served as an undersecretary from 1999 to 2001. He's intimately involved in the current crisis in his role as New York Fed president.

It's not clear if the markets were cheering the Geithner pick, or just the removal of another mystery weighing on the markets.News also broke Friday afternoon that New Mexico Governor Bill Richardson has been tapped to lead Commerce Secretary and that Hillary Clinton has accepted the position of Secretary of State.

Citi-Sized Losses

The Geithner news dwarfied the gloom and doom that had been hovering over the financials, though not enough to help Citigroup (C), the financial conglomerate that has lost more than half of its market value this week.

The Wall Street Journal reported the bank is considering breaking itself up or even selling the entire company. The meltdown in Citi's shares has reportedly prompted execs to plead with lawmakers and regulators to reinstate the ban on short-selling of financial stocks.

“There is no question that Citi trading at these levels is really disturbing,” said Weisberg, who has owned Citi stock since 1990. “There are a lot of people watching that stock and I think it’s making people really nervous.”

The possible breakup or sale of Citigroup would mark yet another historic turn in 2008, a year that has transformed the global financial landscape. A bank with more than 300,000 employees that sells nearly every financial product invented, Citi was heavily exposed to many of the toxic assets that emerged from the subprime crisis.

Wall Street also remains anxious about the uncertain future of the Big Three automakers a day after Congress punted a bailout decision until after Thanksgiving. President-elect Obama’s transition team denied a Bloomberg report that the incoming administration is considering a prepackaged bankruptcy for the automakers as a solution to the crisis.

Crude Rebounds From3-Year Lows

On the energy front, crude oil futures rebounded from their three-year lows by closing 51 cents higher to $49.93 a barrel, ending its five day losing streak.

The commodity has been slammed by recession fears, losing 15% of its value over the past week. Crude is off by roughly 66% from its record closing high of $145.29 set on July 3. The spectacular plunge in oil prices has sent national gasoline prices below $2 a gallon for the first time since October 2004.

Other commodities surged on Friday, led by gold futures, which were up $43.10 to $791.80 an ounce.

Corporate Movers

Wal-Mart (WMT) announced CEO Lee Scott plans to retire in February and be replaced by Mike Duke, the company's head of logistics and international operations. Scott will stay on as chairman of the executive committee of the board of directors.

Dell (DELL) rose sharply a day after the No. 2 PC maker weighed in with a better-than-expected quarterly profit thanks to cost cuts. Still, the company had recently lowered the bar for earnings expectations and its revenue of $15.2 billion missed estimates.

Fannie Mae (FNM) and Freddie Mac (FRE), the government-backed mortgage giants, released plans to suspend foreclosures of occupied homes until early 2009 in an effort to give more time to rework borrowing terms.

Goldman Sachs (GS) opened below its $53 stock price from its initial public offering in 1999. The financial giant, once thought to be immune to the credit crisis and subprime debacle, has seen its stock price decline 76% in 2008, well off its all-time high of $250 set last October.

J.M. Smucker (SJM) beat the Street with an adjusted profit of $1.02 per share last quarter and confirmed its fiscal 2009 outlook, sending its shares sharply higher.

Nike (NKE) boosted its quarterly profit by 9% from 23 cents to 25 cents.

World Markets

Overseas stock markets were mixed onFriday as European indexes slumped, led by a 3.3% fall for France's CAC 40 Index and a 2.4% decline on London's FTSE 100 Index.

However, Asian markets enjoyed a solid rebound as Tokyo's Nikkei and Hong Kong's Hang Seng jumped 3% each in overnight trading.


Dow’s drop befuddles analysts
G7 Officials Vow to Stem Financial Crisis
Rework of bailout plan revives hope
Market Winners & Losers: Gap, Citigroup

Samstag, 22. November 2008

Holiday Gift From Fannie, Freddie: Foreclosure Halt

The holidays could spell relief for many troubled homeowners, as two mortgage giants have decided to keep people in their homes a little longer.

Mortgage giants Fannie Mae (FNM) and Freddie Mac (FRE) have announced they will suspend foreclosures between November 26 and January 9. The government-sponsored entities will use the time to determine if borrowers are eligible for a loan modification plan.

The loan modification program restructures mortgage loans so that primary payments do not exceed 38% of borrowers’ monthly income before taxes.

The program applies to homeowners whose loans are held by Fannie and Freddie that are at least three months behind on their mortgage payments, in an effort to slow the increasingly dire mortgage crisis.


U.S. Developing Plan to Help Homeowners Avert Foreclosure
Rep. Frank Pushes Better Aid for Homeowners
Real estate thrives near military bases

Market Winners & Losers: Gap, Citigroup

What a day to end the week! Amid a flurry of Cabinet appointments, the market rallied to close the week up an average of 6.01%. Here are a few of the day’s winners and losers.

Winners:

Prologis (PLD)

The bleeding has stopped, at least momentarily. With news of an all-star team being assembled in Washington, the stock made a last-minute rally. That’s good news for a company that was setting new 52-week lows daily. The stock closed at $3.04 an increase of 76 cents, or 33%.

Gap Inc. (GPS)

Retailers on the whole saw gains in the market. Gap can thank its better-than-expected third-quarter earnings for its nearly 30% jump. The company pulled in $246 million last quarter, which helped the stock bounce off its lows of the year. It finished trading at $12.10, a gain of $2.59 a share.

Lincoln National Corp. (LNC)

The financial sector took a big jump with reports of Tim Geithner being tapped as Treasury Secretary. The stock made a strong push during the final minutes of trading to finish up $1.32, or 26%, to end the week trading at $6.39.

Newmont Mining Corp (NEM)

As crude prices fell, gold rose, and Newmont made a 25% surge to end the week. The mining giant gained $5.79 a share to finish trading at $28.79.

Sprint Nextel Corp. (S)

The global communications giant rebounded after setting a 52-week low yesterday, rising 34 cents -- 25% -- on Friday to close out the week at $1.71.

Losers:

Developers Diversified Realty Corp. (DDR)

It still does not pay to be in real estate. The investment company’s stock set another 52-week low, but a last-minute rally helped it close at $2.75, losing just 75 cents on the day.

Citigroup Inc. (C)

There seems to be little the company can do to halt the landslide. The stock set another low today as shares tumbled another 20%. Though CEO Vikram Pandit tried to boost morale this morning, not even his kind words could stop the stock from closing down 94 cents at $3.77.

Autodesk Inc. (ADSK)

Despite a rise in third-quarter profit, the software designer turned around and lowered fourth-quarter guidance, driving the stock down 14.57%. The stock followed a trend and set a new 52-week low today, closing $2.45, or 15%, lower at $14.37.

Hartford Financial Services Group Inc. (HIG)

This stock, which has been struggling lately, dropped another 11%. Since becoming a thrift, shares have dropped nearly 60%. Shares finished trading on the week at $4.95, a loss of 62%.

KeyCorp (KEY)

After lowering its dividend, the stock dropped considerably but managed to finish the day down only 9.23%. The stock's performance marked another new 52-week low, closing 64 cents lower at $6.27.


Markets are battered again
Market Winners & Losers: Ford, Jones Apparel
Market Winners & Losers: Ford, AK Steel

Donnerstag, 20. November 2008

Market Winners & Losers: Ford, Jones Apparel

As the week nears an end, the major indices are testing lows not seen in 10 years. The Dow closed down 445 points at 7552, and the major indices lost on average 5.78%. Here are a few of the day’s winners and losers.

Winners

Interpublic Group of Cos. (IPG)

Recent reports have attached the future of the advertising industry to that of the Big 3 auto makers, though the talks were not as productive as many had hoped. Late news of the White House pushing for a deal helped keep the stock in the black today. Shares finished up 48 cents, or 18%, closing at $3.09.

Janus Capital Group Inc. (JNS)

A diamond in the rough in the investment-banking field, the stock was up 11% Thursday after touching 52-week lows earlier in the week. Shares finished trading at $5.86, an increase of 58 cents per share.

Ford Motor Co. (F)

As bailout or loan talks continued today F saw its stock hit another low. With late news that the White House was looking to make a deal in the near future the stock rose 13 cents to close at $1.39. This was an increase of 10.32%

MBIA Inc. (MBI)

This company seems to be following the trend of another insurance provider Ambac Financial Group Inc. (ABK). The stock is rebounding after recent ratings downgrades, and rose 7.4%, or 28 cents, Thursday to $4.07.

Salesforce.com Inc. (CRM)

On the back of an eight-cent per-share profit last quarter, the software provider’s stock rose nearly 4%, or 87 cents, to end up at $22.83.

Losers

Jones Apparel Group Inc. (JNY)

The stock has slumped since announcing that its profit margin was up in the third quarter. It closed down nearly 50% on the day selling for $2.53, proving yet again that it will be a very rough holiday season.

Prologis (PLD)

The real estate investment firm took another big hit Thursday, losing $1.18, 34%, to close at $2.28. The stock seems to set new 52-week lows daily with no end in sight.

Lincoln National Corp. (LNC)

There seems to be no hope left for LNC, another company that continues to set new 52-week lows with some frequency. The stock finished trading at $5.07, a loss of $2.24. The 31% loss, however, does not reflect the financial position that the company feels it has.

Wyndham Worldwide Corp. (WYN)

The hospitality giant is feeling the economic crunch; the stock hit a new 52-week low Thursday. Despite profit increases in the third quarter and changes in management, the American vacation outlook isn’t so hot. The stock closed at $2.98 a loss of $1.31, or 31%.

Chesapeake Energy Corp. (CHK)

The falling price of crude continues to hamper the energy provider. The stock was down 28%, or $5.32, to $13.98 on the day as oil closed under $50.


Wal-Mart’s profits rise as it draws from rivals
Markets are battered again
Market Winners & Losers: Fluor, General Motors

Confusion Sweeping the Markets

Missed tonight's Cavuto? Catch "The Deal" right here on FOXBusiness.com

An auto bailout ain't happening now.

But another stock market selloff is.

Stocks swooning amid Washington fidgeting.

It's not that the investors are pro-rescue as, I suspect, they're anti-indecision.

And they've decided that Washington can't decide on anything.

Punting on a turkey that might suit Congress better "after" Thanksgiving.

...but no guarantees auto makers will be feasting on that turkey before Christmas.

Why does this stuff keep happening?

Financial rescues that will certainly work.

Then they don't.

Auto rescues that will most certainly get done.

Then they don't.

So investors sell.

And sell some more.

And keep selling.

Because when you don't know what's going on, why stay in something going down?

Why take stock, when you can just sell stock?

Why be certain of anything?

Oil can't go any lower, then suddenly it can.

Citigroup would never sell for less than 10 bucks...today...less than five.

Japan's seven percent weekly selloffs are over...until it got hit with a seven percent sell off...today.

The Swiss are the jewel of Europe and will show the way...who knew it would be a full point cut in interest rates because even the Swiss can't get out of harm's way.

I could go on...

About an Obama tax hike on upper incomes that might take a hike...or maybe it won't.

Or an Obama stimulus package that won't be huge but suddenly it might.

No wonder so many are so confused and so worried.

My friends, this isn't about markets abhorring uncertainty...it's about investors certain that'll never change.

Here then, is the deal.

No deal. No closure. No certainty. No quick rescue that seems to work. No quick bailout that seems to click.

So buyers don't click, stocks don't click, economic numbers don't click.

"We" don't click.

What ails us isn't the uncertainty over how long this drags on...but our certainty that it likely will...for a while.


First Horizon’s stock recovers
Regional banks to sell maximum stock amount
Obama: There Will be a Bailout

Mittwoch, 19. November 2008

Canada to Lend Hand to Auto Makers

OTTAWA--Canada's Conservative government said Wednesday it will provide further support to the country's automotive sector, its strongest promise yet of aid.

The government's pledge came in a policy speech that outlines that government's agenda. General Motors Corp. (GM), Chrysler and Ford Motor Co. (F) all have large operations in Canada.

"The Canadian manufacturing sector, particularly the automotive and aerospace industries, has been under increasing strain. Our government will provide further support for these industries," the government said.

No details were provided. That could come next week when Finance Minister Jim Flaherty delivers an update on the government's budget projections.

Canada's auto and auto parts sector employs more than 120,000 people and is responsible for one-fourth of the country's manufacturing exports

The U.S.-based automakers have yet to hear whether they'll get aid from the U.S. government. The automakers have met with leaders in Washington in hopes of securing financial help.

Governments in Canada have helped the U.S-based automakers before. Prime Minister Stephen Harper and Ford announced in September that a new research center for environmentally friendly technologies will be launched in a government partnership that includes up to 80 million Canadian dollars ($65 million) in government funding.

Ontario has helped the auto sector before with a half billion dollar fund that was designed to attract and keep jobs in the province. Canada is attractive to the U.S.-based automakers because the government provides universal health care to all Canadians, unlike in the U.S. where the automakers subsidize workers' health care tabs.




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Keeping the Government Away From Your 401(k)

We don’t want to give you any more to worry about. But with the government making new power grabs every day, it’s important to stay alert.

That’s why we listened when you told us about Congressional hearings last month that questioned the one retirement program over which we still have a lot of control -- our 401(k)s. Of course, the stock portion of our 401(k)s has been getting creamed. And that’s led some folks to suggest that you can’t handle the risk…that the government knows better than you how to handle your own money.

One of those people is professor Teresa Ghilarducci, who was a star witness at the October hearings. She presented a plan to eliminate many of the tax benefits of 401(k)s and turn guidance of your plans over to the government. Here’s what she said about 401(k)s back in October: “They are fatally flawed. They’re too risky, and it’s not good policy to have workers run their own retirement plan. They want government help.” This week on Scoreboard, Rep. George Miller, the man who chaired the October hearings and a man who speaks highly of Ghilarducci, did everything he could to distance himself from plans to radically alter 401(k)s.

But here’s what Congressman George Miller said back in October, before he got an earful from his constituents: “This is an opportunity to really look at what value taxpayers are getting for the $80 billion [in 401(k) tax breaks]. What value is the saver and retiree getting from this plan? And are they really equipped to handle the risk?”

We’re glad the Congressman used Scoreboard to back away full throttle from his earlier remarks. But we're gladder still that our spotlight on the issue may have just made your 401(k) a little safer from the meddling hands of big government.


Bailout probably will put upward pressure on rates
Some cut retirement savings back
The Election and the Media: A Shame Game

Dienstag, 18. November 2008

CEOs Ask Obama for $300B Stimulus Package

WASHINGTON--A group of business executives on Tuesday urged President-elect Barack Obama to "quickly implement" a large stimulus package soon after taking office.

The stimulus package should be more than $300 billion, said the group, which included Goldman Sachs Group Inc. (GS)Chief Executive Lloyd Blankfein, Time Warner Inc. (TWX) CEO Jeffrey Bewkes, and Wachovia Corp. (WB) CEO Robert Steel.

"This really was far and away" the top priority, said Roger Ferguson, chief executive of financial services firm TIAA-CREF.
The recommendation follows similar comments made by a top Obama adviser late Monday to the conference sponsored by The Wall Street Journal. About 100 CEOs divided into four groups to formulate recommendations for Obama in different areas, including energy, health care, the international economy and the U.S. economy.

A stimulus of more than $300 billion is roughly double the size of the package being called for by many Democrats in Congress.

In a speech to the conference Monday, Larry Summers cited a report by Goldman Sachs that suggested the stimulus should be in the range of $500 billion to $700 billion. Summers, a former Treasury Secretary under President Clinton, is widely considered a top candidate for the same job in the Obama administration.

Days after winning the election, Obama said if a second stimulus package does not get done in the current lame-duck session of Congress, "it will be the first thing I get done as president of the United States."

President George W. Bush in February signed bipartisan legislation enacting a $168 billion economic recovery package that sent rebate checks of $600 to $1,200 to most individuals and couples, and awarded tax breaks to businesses investing in new plants and equipment.

A second stimulus package should "emphasize investment in infrastructure," such as roads, bridges and other construction, as well as alternative energy projects, the CEOs said.

The stimulus also should include permanent tax cuts rather than one-time tax rebates, Ferguson said, because permanent cuts are more likely to be spent and to boost the economy.

Steel also urged Obama to quickly name the top officials of his economic team and to lay out a vision to boost market confidence about the impending change in administrations.

"Let's get the economic leaders working together, outlining the issues and ... laying out the plans they'll hit the ground running with," Steel said.

Executives also said Obama should push other countries to enact economic stimulus packages, to counter slower growth overseas.

"The group felt the United States could not recover unless there (is) a global recovery," said Fred Smith, chief executive of FedEx Corp.


Obama to inherit red ink
Cavuto: McCain’s Got the Courage, Not the Conviction

Big Bailouts for Big Mistakes

Missed tonight's Cavuto? Catch "The Deal" right here on FOXBusiness.com

I'm beyond debating whether the auto industry gets a bailout.

It will.

The only question is how big, and how soon.

And, most important, how different?

Here's the deal:

The auto guys are getting their deal.

A huge rescue.

And one, I highly suspect, without the smallest of conditions.

If so, it would follow a well-worn pattern.

Big bailouts for companies that screwed up.

But have no obligation to pay up.

In the financial rescue, the idea was that they'd lend the money they got.

Trouble was, we never demanded that.

So were we surprised when they didn't do that?

...when some took the cash to buy back stock, or even weaker competitors.

That's what happens when you throw money at a problem without addressing the problem.

Like when you throw tens of billions at auto companies, saddled with bloated costs, but demand they do nothing to address the real culprit of those costs...soaring union pension and benefit expenses that seemed fine when they were written into contracts decades ago when times were good, but now are woefully out of date, when times are not nearly so good.

Shocking that a newly emboldened Democratic Congress wouldn't demand auto bosses address these costs...just as it was shocking that Republicans would attach virtually no conditions to cash-happy banks and brokers to root out their costs.

No, we neither demanded banks lend, nor auto companies account.

Could you imagine them being so "understanding" with us?

Please. We miss a payment, they've all but got the police on us.

They miss a payment, and they're being bailed out "by" us.

Who knew bailout also mean logging your brain out?

...leaving taxpayers to rightly ask...

Is anyone looking out...for us?




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Cavuto: When You Can’t Fail, You Can’t Succeed
Federal money tempts community banks
Q&A: Interest rate cuts won’t have immediate impact

Sources: Bush Administration to Leave Half of Bailout Fund Untouched

WASHINGTON--The Bush administration has told top lawmakers it does not plan to use at least half of the $700 billion bailout fund that Congress approved this fall to aid the financial industry, congressional officials said Monday.

These officials said Treasury Secretary Henry Paulson passed the word over the weekend that he intends to leave $350 billion untouched when the administration leaves office on Jan. 20. That would mean the incoming Obama administration would decide whether and how the funds should be spent.

The disclosure comes at a time when Democrats are working to pass emergency legislation to spend $25 billion of the bailout money to provide loans to the battered auto industry.

These officials spoke on condition of anonymity, saying they were not authorized to disclose the developments.

White House spokesman Tony Fratto neither confirmed nor disputed their account, adding that any decision about the use of the remaining $350 billion was up to Paulson.

"He said he's working to continue to design and develop programs, and when it's the right time to use them Treasury will announce it. And if it then makes sense to go to Congress, he'll recommend we request to drawdown the second $350 billion," Fratto said.

Under the bailout legislation that cleared Congress, $250 billion was available immediately, and another $100 billion could be spent without congressional acquiesence.

The remaining $350 billion can be spent only if Congress doesn't disapprove. One official said the administration wanted to avoid a situation in which Republican lawmakers voted against tapping the remaining money that ultimately was cleared for use.

Ironically, when the administration initially sought the bailout measure, Paulson argued for a $700 billion package to be made available at once.

It marked the second reversal on the part of the administration. President George W. Bush, Federal Reserve Chairman Ben Bernanke and Paulson initially told lawmakers the $700 billion was needed to buy troubled assets that banks were carrying on their books.

But last week, Paulson made it official: the government wouldn't use any of the $700 billion to buy the toxic assets.

So far, the Treasury Department has pledged $250 billion for banks in return for partial ownership, a measure designed to encourage the institutions to boost lending and stabilize credit markets.

In addition, the administration has agreed to devote $40 billion to troubled insurer American International Group (AIG), leaving $60 billion available for additional bailout efforts through Jan. 20.


Obama: There Will be a Bailout
Obama to inherit red ink
McCain Hints at Possible Treasury Picks