Friday, September 26, 2008

Today's Headlines

- President George W. Bush said Congress would resolve any disagreements and approve a financial rescue, as the Senate's Democratic and Republican leaders vowed Congress would stay in session until a deal is reached. ``We are going to get a package passed,'' Bush said in a statement at the White House today. ``We will rise to the occasion, where Republicans and Democrats will come together and pass a substantial rescue plan.''

- Terra Industries Inc.(TRA) plummeted to the lowest in almost a year after an analyst at Citigroup Inc. said prices for nitrogen-based crop nutrients may extend declines. Terra dropped $7.88, or 21 percent, to $30.02 at 11:32 a.m. in New York Stock Exchange composite trading. A close at that price would be the lowest since Oct. 8. Sioux City, Iowa-based Terra tumbled 21 percent this year through yesterday. Terra, the largest U.S. maker of liquid-nitrogen fertilizer, was downgraded to ``hold'' from ``buy'' after prices for urea, a form of nitrogen-based fertilizer, lost 15 percent in the past week, analyst Brian Yu said in a note to clients. Citigroup also downgraded Calgary-based Agrium(AGU) Inc. and Deerfield, Illinois-based CF Industries Holdings Inc.(CF). ``The risk is that urea prices continue to decline as buyers delay their purchases and draw down inventories deeper than usual in anticipation of even lower prices,'' Yu said.

- JPMorgan Chase & Co.(JPM) raised $10 billion in a stock sale to cover writedowns and losses after taking on deposits and branches of Washington Mutual Inc., the biggest U.S. savings and loan, for $1.9 billion. The stock is rising 6.8% on the news.

- Sadia SA and Aracruz Celulose SA, two of Brazil's largest exporters, reported losses on bad currency bets, spurring speculation more producers in the commodities-driven economy are at risk from the real's 16 percent tumble since Aug 1.

- Secretary of State Condoleezza Rice asked the United Nations Security Council to hold an emergency meeting to condemn Iranian President Mahmoud Ahmadinejad's speech this week in which he said Israel was on a ``slope to collapse.'' Rice, speaking at a council meeting called by Arab leaders to discuss Israeli settlement construction in the West Bank and Gaza Strip, said Ahmadinejad's statements that the Jewish state should be destroyed were a greater threat to peace in the region. ``This is simply unacceptable,'' the U.S. secretary of State said. ``The U.S. will ask the Security Council to convene again to take up the matter.''

- Excel Maritime Carriers Ltd.(EXM) fell as much as 15 percent and Genco Shipping & Trading Ltd.(GNK) declined 12 percent as shipping rates for raw commodities fell to the lowest since August 2006 amid an iron-ore pricing standoff. Excel traded as low as $16.75 and was down $2.25, or 11 percent, to $17.48 at 11:21 a.m. in New York Stock Exchange composite trading. Genco fell as low as $34.58 and was down $4.62, or 11 percent, to $35.90. DryShips Inc. fell as low as $39.28 and was down $3.56, or 8.2 percent, to $39.92. Eagle Bulk Shipping Inc. was down $1.04, or 5.9 percent, to $16.54. Diana Shipping Inc. fell $1.11, or 5.1 percent, to $20.48. ``There is no change in direction in the dry-bulk market, with rates continuing to fall hard as steel prices come under pressure,'' Omar Nokta, an analyst at Dahlman Rose & Co. in New York, said. The Bloomberg Dry Ships Index, which includes 12 shipping companies, fell 6.9 percent to 2,928.04. The index has fallen 46 percent in the past year, compared with a loss of 19 percent for the Standard & Poor's 500 Index.

Wall Street Journal:

- McCain Agrees to Tonight’s Debate, Citing Progress on Bailout.

- Honda Motor Co. will delay opening its second car factory in India by at least six months to mid-2010, as the company is concerned growth in the market may slow.

NY Post:

- The squeeze on short sellers could continue even after the Securities and Exchange Commission's ban on short selling is lifted - and this time, it will have nothing to do with government intervention. At issue is a behind-the-scenes discussion about a little-known practice that fuels short selling known as security lending. The concern is that the entities that engage in this business, primarily mutual funds and pensions, may have lost money when Lehman Brothers went bankrupt. Now the industry is debating whether the returns generated from lending is worth the risk.

USA Today:
- A private group says a $630 billion spending bill nearing approval in Congress includes $6.6 billion in special projects for lawmakers, including $515 million for 18 projects requested by Democratic vice presidential nominee Senator Joe Biden of Delaware.


- Dry-bulk vessels have lost half their value in recent months and owners are struggling to recoup investments made during an industry boom. Some vessels are selling at not much more than scrap value and many Chinese owners want to dispose of their ships. Potential buyers are struggling to find finance and are unwilling to pay asking prices.

- The Scottish economy is "grinding to a halt". We've lost our oldest bank and our only nuclear energy company. 30,000 jobs have gone in the construction industry. The Celtic Lion is in danger of following the Celtic Tiger into recession.

Globe and Mail:
- Onex Corp. is adding distressed U.S. banks to its shopping list. The Toronto-based buyout firm is on the hunt for acquisitions of small banks that have run into trouble during the financial crisis.


- Russian developers cut prices for retail space amid a squeeze on credit, citing X5 Retail Group NV CEO Khasis. Developers are offering shopping space for 30% to 40% less than a month ago and prices may fall further, Khasis said.

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