Monday, September 29, 2008

Today's Headlines

- The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash.

- Citigroup Inc.(C), the biggest U.S. bank by assets, will acquire banking operations of Wachovia Corp. for about $2.16 billion after shares of the North Carolina lender collapsed under the weight of overdue mortgages.

Wall Street Journal:

- A bipartisan group of U.S. House lawmakers defeated a $700 billion rescue plan for Wall Street on Monday, rejecting pleas from the Bush administration and congressional leaders from both parties of the potential dire consequences of policymakers not acting to help financial markets. The 205-228 vote against the plan sent stocks plummeting. Supporters were unable to convince enough members of either party to switch their votes against the proposal.

- Steelmakers in the U.S. are experiencing a sharp pullback from buyers who are spooked by the credit crisis and a slowdown in automobile and construction markets, causing inventories to rise and prices on some key products to drop 10%. Although weakening demand and prices are being partially offset by falling raw-material costs, particularly of scrap, some steelmakers already are cautioning that robust earnings from earlier in the year won't be sustained in the year's second half.

- TiVo Inc.(TIVO) and Nero AG of Germany on Monday unveiled a package that turns a Windows PC into a TV recorder, just like a TiVo set-top box. The kit will cost $199 when it goes on sale Oct. 15, and includes a remote and a TV tuner that plugs into the PC. The interface on the computer screen looks just like the one on a TV equipped with a TiVo box.

- H.J. Heinz Co. will no longer use milk made in China for the baby food it sells on the mainland and in Hong Kong, a company spokesman said on Monday.

- Hedge-fund managers face a basic problem: Many won't get paid much this year and will have trouble retaining key employees. The reason: Few funds have made positive returns, so they can't dole out "performance fees," hefty cuts of trading profits. Some hedgies will tap piles of accumulated cash to keep traders. Others will lose them to the few firms holding up. That will force struggling funds to consider closing.
- James Terry, Chief Public Advocate for the Consumers Rights League (CRL), released the following statement today expressing disappointment that the compromise bill before Congress does not protect taxpayers by repealing the previous bailout provision that ensures hundreds of millions of dollars for organizations like the Association of Community Organizations for Reform Now (ACORN) which is engaged in questionable practices and the potential misuse of public funds.

Lloyd’s List:

- Venezuelan crude oil supplies to China fell 9.7% in the first eight months of the year, citing an analysis of shipping data from Lloyd’s Marine Intelligence Unit.

Boston Globe:
- Boston's Bain Capital and Bank of New York Mellon, along with major investment firms around the country, want to add a new wrinkle to the $700 billion federal bailout proposal: a chance to buy the same distressed, mortgage-related assets the government is preparing to purchase from troubled financial companies.


- When House Republican leadership framed its opposition to the bailout bill as it currently stands, a principal objection focused on the group ACORN. They're referring to the Association of Community Organizations for Reform Now, a group generally allied with Democrats and derided by the GOP as corrupt, inefficient and a front-group for Democratic efforts on the ground.


- A storm-related gas shortage in the Southeast that has left some places bone-dry and others with two-hour gas lines is expected to continue for at least another two weeks, energy experts and industry officials say. The shortage began two weeks after Hurricane Gustav hit the oil-refining regions of the Gulf Coast on Sept. 1. Operations that shut down before that storm were just coming back online when Hurricane Ike hit, forcing another shutdown. The gas shortage, now in its third week, is particularly acute here in sprawling Atlanta, in Nashville in parts of the Carolinas and in Anniston, Ala.

Financial Times:
- UK residential development land has dropped by a third in value over the past year, and by up to 15 per cent in the past quarter, as problems among housebuilders have accelerated the devaluation of increasingly fallow land banks. The losses in land values around the country are worse than many had feared, according to Knight Frank's first annual development land index. The property consultancy expects values to continue to fall, predicting that 10 per cent could be further wiped off prices over the next 12 months.

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