02.21.10

Pilots offer to talk with Lufthansa before strike

Posted in .com, business, money, shortly, top tagged , , , , at 4:06 pm by carydalton

BERLIN – The Cockpit pilots union offered Saturday to meet with the chief of Lufthansa AG to try to head off a four-day strike beginning Monday that could cause headaches for thousands of travelers.

The union offer to meet with Lufthansa Chief Executive Wolfgang Mayrhuber came after Germany’s transport minister urged the two sides to return to talks and avoid a strike that could damage the country’s economy.

Lufthansa has said it is willing to talk, but not without conditions. It was not immediately clear if the meeting would take place.

Lufthansa has already canceled some 600 flights ahead of the strike and is scrambling to rebook travelers on partner airlines or trains.

“Lufthansa is doing everything in its power to inform its customers as soon as possible and offer them alternative travel options,” the company said on its Web site.

Travelers who are unable to reschedule are being reimbursed for their tickets, it said guaranteed pay day loans.

The airline, Germany’s largest, estimates the strike could cost it as much as euro100 million ($135.19 million).

The union is urging some 4,500 pilots who fly for Lufthansa, Lufthansa Cargo and Germanwings to walk off their jobs from February 22-25 to press the airline for increased job security.

Cockpit accuses the airline of outsourcing more and more flights to pilots employed by other companies, who work for less pay and under worse conditions.

Also Saturday, German Transport Minister Peter Ramsauer warned the strike could seriously damage the German economy.

“It can not be that the largest German air fleet is grounded for four days,” Ramsauer told the Bild am Sonntag weekly.

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On the Net:

http://www.lufthansa.com

Pilots offer to talk with Lufthansa before strike

02.16.10

Global oil refining sector needs consolidation: BP

Posted in All, money, news, shortly, world of money tagged , , , , at 10:48 am by carydalton

LONDON (Reuters) – Consolidation is needed in the global oil refining sector, the chief economist of BP Plc (BP.L) said on Monday, indicating more tough decisions ahead for an industry beset by poor margins.

Oil companies including BP and Royal Dutch Shell (RDSa.L) have reported billions of dollars of losses from their refining business in the fourth quarter 2009 as the economic crisis hit fuel demand.

"To put it bluntly and shortly, there will have to be some consolidation in the global refining industry," BP's Christof Ruehl said at the IP Week oil and gas industry conference.

Oil refiners faced a double blow in 2009 when world demand for fuel fell because of recession just as a host of new refining projects planned during the boom years came on stream, squeezing margins.

Additions to global oil refining capacity in 2009 were the highest in 30 years, Ruehl estimates.

Shell is looking to divest 15 percent of its global refining. U.S. rival Chevron (CVX.N) plans to close some of its refineries but has yet to say where.

The BP official said so-called simple refineries — without the capacity to convert heavy oil products into lighter fuels such as gasoline — would be most likely to close. Still, it was not simply a matter of closing plants for good.

"This is most likely to be not just about permanent shutdowns — it's about mothballing, running down crude runs, changing configurations," he told reporters.

DISADVANTAGE

Refineries in developed markets will be at a disadvantage compared with those in emerging markets, where governments often subsidies fuel prices, BP's Ruehl said payday loans.

"You would expect the impact on refiners to be worse in countries where there is no protection," he said.

Ruehl said he expected global refining utilization rates to fall in 2010.

Oil demand in developed OECD countries has peaked, according to BP and some other forecasts, while consumption is still expected to rise in emerging economies, such as China, for the foreseeable future.

Ruehl said he expected oil majors to seek acquisitions in China and other parts of Asia.

"These are the growing markets," he said.

An Exxon Mobil (XOM.N) executive attending the conference said the company was always reviewing the profitability of its assets worldwide, but any sale of the Exxon's Fawley refinery in the UK was not on the agenda.

"We continue to look at the economics of our operations around the world," Brad Corson, chairman of Exxon Mobil International, said when asked if the company planned any refinery sales.

"We currently have the largest refinery in the UK, Fawley refinery. We pride ourselves on being one of the most cost-effective refineries in the European region and as such we have no imminent plans in that regard."

(Editing by James Jukwey)

Global oil refining sector needs consolidation: BP

Hot News: China Sees Growth Engine in a Web of Fast Trains

02.12.10

With Greece’s Woes, Nations Rethink Push Into Euro Zone

Posted in Free blog Tips, economic, money, news, top tagged , , , , at 11:12 am by carydalton

RIGA, Latvia — The tiny Baltic states have pursued closer integration with Europe with enormous zeal. But the price of monetary union may be giving them pause.

Economists and ordinary citizens alike are watching the protests rumbling through the streets of Athens and the slow response to Greece’s problems coming out of Brussels.

“Countries like Estonia and Latvia were once desperate to get in,” said Alf Vanags, director of the Baltic International Center for Economic Policy Studies in Riga. “The euro is not looking so attractive now.”

Latvia has been on track to adopt the euro in 2014, as has Lithuania, with Estonia eyeing its inclusion by 2011.

These governments have reason to fear that, like Athens, they will be caught in a vise: unable to pay for expensive social programs demanded by citizens while staying within the euro zone’s debt limits.

Enthusiastic for years about adopting the euro, Latvia had undertaken painful austerity measures. Even as the global economy contracted, the government slashed spending. The program included cuts of 50 percent or more in the salaries of public-sector employees and a 40 percent reduction in hospital budgets.

The result, many economists say, has been deepening unemployment and the worst recession of any country in the 27-nation European Union.

Latvia’s gross domestic product has declined by an estimated 24 percent since the recession began — a steeper drop than America’s during the Great Depression.

To keep a faltering country’s economy in line with the euro “is a tall and very unpleasant order,” Mr. Vanags said.

One of the constraints of joining the euro zone would be that Latvia would be unable to devalue its currency by printing more money. The current members of the euro zone that are weaker, like Spain and Portugal, are feeling such constraints now.

Despite some negative effects, devaluations have helped many countries over the years, giving a lift to their economies by making foreign goods more expensive and domestic goods more attractive.

Latvia has already taken some steps that limit its ability to bolster its economy. Since 2004, the Latvian central bank has pegged its currency, the lat, to the euro, to prepare for adhering to the common currency.

In 2008, Latvia accepted austerity as a condition of a bailout led by the International Monetary Fund that allowed it to remain on track to adopt the euro. After sharply cutting salaries in the public sector, the government encouraged the private sector to do the same. The policy, in fact, worked to balance the trade deficit. But the country is now being severely hurt by the very policies needed to get into the euro zone.

Andris Liepins, deputy minister of economy in Latvia, said in an interview that Latvia remained committed to a currency peg and to adopting the euro short term personal loan. “Greece’s problems are temporary,” he said. “Greece needs the same reforms as Latvia.”

The austerity programs imposed by the I.M.F., Mr. Liepins said, would help Latvia’s economy restructure over the long term, by cutting health care outlays and encouraging companies to become more efficient. Devaluing the currency would help only in the short term, he said. It would also push more homeowners to default on their mortgages, which are often denominated in foreign currencies. “We would lose competitiveness as an economy,” he said.

The policies should be judged three or four years from now, he said, when policies like encouraging outsourcing has made companies more competitive while creating opportunity for new small business.

Latvia’s economy contracted an extraordinary 18 percent in 2009, according to preliminary figures. If the number holds, it would mark the sharpest contraction in the world, though it followed what was widely regarded as an unsustainable burst of growth just before the global crisis.

Casting about for ways to raise cash during the crisis, the Latvian government grasped at times at unconventional methods.

In January, it auctioned off a ghost town along with an abandoned Soviet radar base called Skrunda-1 for 1.5 million lats ($2.89 million).

A Russian company bought it.

The economy began growing slowly in the fourth quarter of last year. Rating agencies also noted an improved outlook on the country’s creditworthiness.

Still, the government’s reliance on layoffs and deep wage cuts has not been popular.

But the response has been more measured in the Baltic countries so far than in Greece, struggling with public employee strikes and protests.

Slava Ushakov, who had a small business, sympathizes with the employees of the Greek government. When his business failed in the recession, Mr. Ushakov took a job chipping ice from city sidewalks under a government work program.

When he slipped and broke a rib, his already meager pay was docked for the days that he had missed. So now he comes to work injured. “I just wrapped it,” Mr. Ushakov said, lifting his sweater and gingerly touching bandages.

The work program, designed by the World Bank and partly financed by the European Union, pays Mr. Ushakov 100 lats ($192) a month. Still, the jobs are coveted, in a sign of the depth of troubles in Europe’s most recession-plagued economy.

“I am still working every day,” Mr. Ushakov said. He added that these days in Latvia, “if you want to buy a chicken, you have to think pretty highly of yourself.”

With Greece’s Woes, Nations Rethink Push Into Euro Zone

02.11.10

Europe Agrees to Aid Greece, but Is Unsure of How to Help

Posted in .com, All, money, online, top tagged , , , , at 5:48 am by carydalton

BRUSSELS — The crisis in Greece brought Europe’s leaders together on one issue Wednesday: The need for emergency action to keep the problem from infecting Europe’s other weak economies. But an accord on who will take the lead — and how — appeared uncertain.

European officials face greater urgency to devise a bailout for Greece after fears its government might default caused a recent slump in financial markets worldwide.

A phalanx of European leaders put on a unified show of support ahead of a Thursday summit meeting in Brussels, where the heads of all European Union governments and the finance ministers of the 16 countries that use the euro are scheduled to appear. Together with the president of the European Central Bank, Jean-Claude Trichet, the officials agreed Wednesday that they could no longer allow uncertainty about the future of Greece — and the euro zone — to disturb global investors.

“The point of no return has been passed,” said one diplomat involved in negotiations over a possible European bailout of Greece. “We have to do something or announce something.”

But some officials said the meeting might achieve little more than a political statement, leaving details to be worked out later by finance ministers.

German officials also insisted that no formal decision had been made.

Stocks on Wall Street fell Wednesday, partly on worries that European politicians may not find a quick resolution to the crisis.

A crucial point in the discussions is whether the government in Athens should be offered loan guarantees or given additional loans to help meet a looming debt payment, or whether there should be a pledge to buy Greek government bonds should the need arise. Investors like the concept of having one or several creditworthy nations, like Germany, guaranteeing the debts of a poorer nation, although such a move would be largely without precedent.

Germany and France are expected to have to take the lead on any emergency solution, especially after European officials rejected allowing Greece to go the International Monetary Fund — which often provides financial aid to emerging markets — for help. Going to the fund is considered a highly undesirable option for any of the 16 countries that use the euro currency. President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany intend to hold a joint news conference after the summit meeting.

It is “no longer considered an option not to act,” said a French official involved in the talks.

Officials are worried about the “moral hazard” of any Europe-backed solution for Greece: If one country is bailed out by the others, investors will expect a similar response should other weak economies that use the euro, including Portugal and Spain, fall into serious trouble.

And then there are questions about how to apply any commitments so that the weaker governments would be pressured to deliver painful economic overhauls freecreditreport.

The talks, which included a discussion of what steps Greece might be required or even forced to take to deal with its own financial problems, came as Greek citizens demonstrated in protest against austerity measures so far announced by the government, which many market participants think are far from adequate.

“At this junction they will have to support Greece,” Simon Tilford, chief economist at the Center for European Reform, said of Europe’s politicians. “If you have encouraged the markets to believe that support is forthcoming and then it is not, we will see a backlash” in financial markets.

Though Mr. Tilford said the markets would ideally like to see some form of guarantee extended to Greek loans, he added that this would probably be too much for the government in Berlin. The most likely outcome was a loan facility extended on condition that changes were undertaken by the government in Athens. It would also need to apply to other countries facing similar ills.

Jean Pisani-Ferry, director of the Bruegel research institute in Brussels said that whatever officials decide Thursday, it was important to lay out markers — including what assistance they would take, what would activate it and who would provide it — so that markets could understand how aid would be given.

The summit meeting Thursday was called by Herman Van Rompuy, president of the European Council, to try to draw up a longer-term economic strategy for the European Union to modernize its economy by 2020, an agenda that has been overshadowed by the euro zone debt crisis.

Stocks rose across most of Europe on Wednesday, with the euro-zone benchmark Dow Jones Euro Stoxx 50 index gaining 1.2 percent. The euro slipped as conflicting comments from European leaders showed the bloc was still moving hesitantly toward concrete measures. The 16-nation currency traded at $1.3733 late Wednesday in Europe.

Greek government debt rallied for a second consecutive day, with the yield on the government’s benchmark 10-year bond — which spiked as high as 7.2 percent on Jan. 28 — dropping at one point below 6 percent for the first time in a month. Italian, Irish, Spanish and Portuguese bonds also gained. The cost of insuring government debts against default through credit default swaps also fell.

Charles Diebel, head of European rate strategy at Nomura International, said a default was not imminent in Greece. But without European Union support Greek bond yields will rise so high that Athens would find it very difficult to sell debt when it needs to refinance in a few months.

“It’s a question of confidence, not fundamentals,” Mr. Diebel said.

Nicholas Kulish contributed reporting from Berlin.

Europe Agrees to Aid Greece, but Is Unsure of How to Help

02.05.10

Markets Sag in Europe After Sharp Sell-Off in Asia

Posted in economic, news, online, shortly, world of money tagged , , , , at 11:36 am by carydalton

PARIS — European markets slipped again Friday, after a sharp sell-off in Asia, amid continued worries about government debt in several European countries and about the state of the U.S. labor market.

The main markets in Europe had fallen between 1 and 2 percent in mid-morning trading, following sharper declines in Asia and on Wall Street Thursday. The Nikkei 225, Japan’s main market gauge, sagged 2.9 percent Friday.

Investor nervousness drew money into the Swiss franc, traditionally seen as safe have during times of distress, driving its value up against the euro to a 15-month high — and prompting a reported intervention by the Swiss National Bank.

The main worry in Europe remained the ability of Greece, Portugal, Ireland, Italy and Spain to rein in their rising deficits, which have been surging in the wake of national stimulus programs and after years of poor fiscal management.

“The market wants to accelerate an issue that the authorities were hoping that time would heal,” Deutsche Bank analysts said in a research note Friday. It added that the European authorities “will be forced to show more of their hands over the coming weeks or months,” suggesting financial support or guarantees from other euro countries was becoming more likely.

The yield on the benchmark 10-year bonds of Spain, Portugal., Ireland and Greece moved higher Friday, while those of Germany and France eased, suggesting funds were still flowing from the peripheral members of the euro-zone into the big core countries.

The FTSE-100 and the CAC-40 were both down more than 1.3 percent, paring sharper early gains, while the AEX index shed 1.7 percent in Amsterdam.

Futures on the Standard & Poor’s 500 Index lost 0.3 percent, suggesting a weaker start on Wall Street.

Adding to the anxiety was a bleaker-than-expected report on unemployment claims in the United States on Thursday, which once again spotlighted the fact the American recovery has yet to feed through to the beleaguered jobs market.

These jitters helped send the Dow Jones industrial index down 2.61 percent by the close of trade Thursday in New York, also dragging markets in the Asia-Pacific region down Friday.

Traders in Europe were also anticipating the release later Friday of the broad U.S. employment report for January.

Asian economies may be expanding more rapidly than those of the United States and Europe — Australia’s central bank on Friday said it expected economic growth there to continue to accelerate — but its stock markets also remain susceptible to global investor jitters fast cash loans.

In mainland China, the Shanghai Composite index sagged 1.9 percent. The market has dropped about 10 percent this year amid investor concerns that the authorities are now curbing bank loan growth in a bid to temper inflation.

The Straits Times index in Singapore lost 1.8 percent by late afternoon, while the Hang Seng index in Hong Kong and the Kospi in South Korea sagged more than 3 percent. The Taiex index in Taiwan ended down 4.3 percent.

In Australia, the main market gauge fell 2.3 percent.

“The ongoing weakness in the markets is largely due to sovereign default risk in the West, but this has even affected the developing markets in Asia,” said Puru Saxena, chief executive of Puru Saxena Wealth Management in Hong Kong in a note Friday.

Amid the worried about a possible bond defaults, the euro continued to weaken against the dollar and other currencies.

The euro was quoted at $1.3683 in London trading. In November, it was trading above $1.50.

Earlier in the day euro fell to a recent low of 1.4559 Swiss francs.

Reuters quoted several currency traders as saying the Swiss National Bank had been selling its currency during Asian trading. The central bank declined to comment.

The central bank has previously intervened to fight deflation and counter the risk of recession.

A research note from the European Equity Strategy at Barclays Capital said the greatest risks for stock investors lie with banks, telecommunication companies and utilities. It recommended investors switch into healthcare and food and beverages.

In London, ICAP, the largest broker of transactions between banks, fell 17 percent after cutting its profit forecast. Banco Santander of Spain fell 2.1 percent in Madrid, where the broader stock index was down 2 percent.

Rio Tinto Group, the mining giant, declined 3.6 percent.

In Tokyo, shares in Toyota bucked the downward trend, eking out a gain of 1.2 percent after upbeat results for the final quarter of 2009, released after the close of trade on Thursday.

But the car manufacturer’s troubles over the recalls of millions of cars are weighing heavily, and have caused the stock to plunge more than 20 percent since a recent high on Jan. 21.

Markets Sag in Europe After Sharp Sell-Off in Asia

02.04.10

Haiti, Swiss govt losers in Duvalier cash ruling

Posted in .com, All, Free blog Tips, hot news, shortly tagged , , , , at 6:12 am by carydalton

GENEVA – In an embarrassment to Switzerland’s government, the country’s top court said Wednesday that at least $4.6 million in Swiss bank accounts previously awarded to charities must be returned to the family of Haiti’s ex-dictator Jean-Claude “Baby Doc” Duvalier.

The decision was reached on Jan. 12, just hours before the devastating earthquake that struck Haiti, killing at least 150,000 people. The ruling is urelated to the disaster, but the amount of money contested could feed more than a million Haitians for two weeks.

The court’s decision was only published Wednesday, prompting the Swiss government to issue an emergency decree to keep the money frozen in a Swiss bank until a new law can be passed allowing it to be donated to aid groups working in Haiti.

“This is a public relations disaster for Switzerland,” said Mark Pieth, a Swiss professor with a long resume in international corruption cases such as the U.N. oil-for-food scandal.

In the decision, the Federal Supreme Court reversed a lower court’s ruling that the money should have gone to aid groups working in the impoverished nation because the statute of limitations on any crimes committed by the Duvalier clan would have expired in 2001.

Delays are common in Switzerland between court verdicts and their public announcements, but the release of the decision could not have come at a worse time. Beyond depriving Haiti’s relief efforts of additional money, the ruling also strikes a blow at Switzerland’s long-standing efforts to shed its image as an investment haven for the world’s dictators.

“We assume that this money doesn’t belong to the Duvalier family,” said Eveline Widmer-Schlumpf, the Swiss justice minister. “We’ve blocked the money again today to prevent that it goes somewhere that it shouldn’t for political reasons. We really hope that this money finally goes back to the country.”

Many Haitians accuse Duvalier and his entourage of robbing millions from public funds before he was ousted in 1986. Duvalier is believed to be living in exile in France and has always denied wrongdoing.

The decision cannot be appealed, but the Swiss Foreign Ministry said it would try to keep the money from being withdrawn while it works on a better national law for dealing with assets of “criminal origin.” It said the amount of money actually totaled $5.7 million, though the reason for the discrepancy was unclear.

The government “wants to avoid the Swiss financial center serving as a haven for illegally acquired assets,” it said in a statement, adding that a new law working retroactively could be ready this month. Widmer-Schlumpf was less optimistic, but said the law could come into effect as early as 2011.

Switzerland has traditionally been a favorite location for potentate money because of its banking secrecy rules. But reforms over the last two decades have made it harder to hide money in Switzerland, and the country has become a world leader in returning cash.

Virtually all of about $730 million in Swiss accounts linked to the late Nigerian dictator Sani Abacha has been sent back to the African country, while the Philippines recouped hundreds of millions stashed in Swiss banks by late dictator Ferdinand Marcos low cost payday loans.

Problems have nonetheless persisted, particularly linked to the statute of limitations. Last year, the heirs of late Congo dictator Mobutu Sese Seko recovered about $7.4 million, even though Swiss Foreign Minister Micheline Calmy-Rey had promised in 2007 to return the cash to the Congolese government.

Swiss officials gave few details about the new law they hoped to create to make it easier for assets belonging to deposed dictators to be repatriated to national governments. The current rules only allow Switzerland to return cash when asked for by a national government that is pursuing its own criminal investigation — a handicap in countries where amnesty laws, corruption or weak legal systems hinder prosecution of past leaders.

Haiti made its first request for the money in 1986, shortly after Duvalier’s ouster.

But it has been frozen ever since because Switzerland would not give it back while the Haitian government wasn’t pursuing Duvalier under its own justice system. As a way out, the Swiss government had proposed giving the money to aid groups working in Haiti.

“At a time when everyone tries to help Haiti, issuing a decision that the money belongs to the dictator’s family because of the statute of limitations is very clumsy,” Pieth said. “You have a head of state with a secret army that tortures people, and at the same time he empties the state treasury. The people cannot defend themselves. It’s robbing from the people, and this aspect has to be addressed by the court.”

The U.N. says about $2 billion has already been donated to various relief efforts in Haiti. But the country’s long-term problems related to infrastructure, endemic poverty and criminality means more will be needed to stabilize the country.

The $4.6 million may represent only a drop in the bucket, but the U.N. food agency could use it to feed 1.25 million Haitians for two weeks, said spokeswoman Emilia Casella.

The Supreme Court said it was unhappy about the ruling but that its hands were legally tied, forcing it to reverse an August decision that said the Duvalier family had essentially acted as a “criminal organization” by diverting public funds through a Liechtenstein foundation to accounts at UBS AG, Switzerland’s largest bank.

UBS declined to comment, but said the bank and its employees have donated $3 million to Haiti.

The Swiss government’s decision to keep the money blocked is based on an article in the Swiss Constitution giving it the power to issue emergency decrees to protect national interests. Officials wouldn’t explain the move further.

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Associated Press writers Bradley S. Klapper and Frank Jordans contributed to this report.

Haiti, Swiss gov’t losers in Duvalier cash ruling

Hot News: Civil Madoff-related fraud charges dismissed

01.27.10

Williams-Sonoma says longtime CEO Lester to retire

Posted in .com, economic, news, shortly, world of money tagged , , , , at 8:00 am by carydalton

SAN FRANCISCO – Williams-Sonoma says its longtime chief, Howard Lester, will retire from the posts of CEO and chairman after 31 years leading kitchenware retailer.

After his retirement in May, Lester will continue to be an adviser to the company until December 2012 as chairman emeritus, Williams-Sonoma Inc. said Tuesday.

Lester has run the San Francisco company since 1978, when he bought it from founder Chuck Williams and it had four retail stores no fax pay day loans. It now has more than 600 stores in the U.S., Canada and Puerto Rico; it also owns the upscale Pottery Barn and West Elm housewares chains.

The company’s board plans to appoint Laura Alber its new CEO. She joined the company in 1995 and is now president.

Williams-Sonoma says longtime CEO Lester to retire

01.20.10

Drug Companies Lead Markets Higher

Posted in All, Free blog Tips, business, news, online tagged , , , , at 10:24 am by carydalton

The possibility that the dynamics of the health care debate could changed helped spur the market on Tuesday, overshadowing fresh concerns about banks and the American consumer.

Investors were preparing for the prospect that a Republican might win the Senate seat once held by Edward M. Kennedy in Massachusetts and, with it, deny Democrats the 60th vote needed to surmount Republican filibusters and advance the health legislation.

As voters headed to the polls in Massachusetts, shares of pharmaceutical companies surged. The possibility of disarray over the bill eased concerns that profits would suffer at insurance and drug companies. Merck climbed nearly 3 percent, and Pfizer was up 2 percent. Rising health stocks pulled the broader market higher.

In midday trading, the Dow Jones industrial average climbed 0.73 percent or 76.94 points. The broader Standard & Poor’s 500-stock index rose 0.8 percent, and the technology-dominated Nasdaq was up 0.94 percent.

Amid Tuesday’s zeal, however, there were indications that financial firms face high hurdles as they try to escape the worst recession in decades. The banking giant Citigroup reported a loss for a second consecutive year, held back by losses on mortgages and credit cards.

Citigroup’s figures followed similarly cautious results from JPMorgan Chase last week. Taken together, the reports suggest Americans are still struggling to pay the bills amid high unemployment and depleted savings accounts, leaving banks looking for fertile revenue streams.

“What’s going to be critical for banks is their ability to cut their loan losses — that’s going to be the principal source of earnings growth,” said David A payday loans with no fax. Rosenberg, chief economist and strategist for Gluskin Sheff. “Citigroup’s loss certainly raises a bit of a cautionary flag in terms of the entire financial sector.”

Still, investors said Citigroup’s results could have been much worse, and they were pleased its $1.6 billion loss in 2009 was a stark improvement from the $27.7 billion loss in 2008. Shares of Citigroup rose 0.58 percent, while JPMorgan Chase fell 0.23 percent and Bank of America dropped 0.92 percent.

In other markets, the dollar gained and the euro fell amid continuing concern about the ability of several European nations, including Greece, to pay off debt. Oil dropped.

Investors were also encouraged by heavy merger and acquisition activity over the holiday weekend, analysts said. Cadbury agreed to a takeover offer from Kraft on Tuesday, worth about $19 billion, that would create the world’s largest confectioner. Cadbury rose 5.34 percent.

In addition, Berkshire Hathaway said it would acquire part of the Swiss Reinsurance Company for nearly $1.3 billion, sending shares of Berkshire up 1.23 percent.

Overseas, European markets were poised to close higher. The FTSE 100 in London was up 0.52 percent, the CAC 40 in Paris rose 0.9 percent, and the DAX in Frankfurt climbed 0.96 percent.

Drug Companies Lead Markets Higher

01.19.10

Kraft Said to Reach Deal for Cadbury

Posted in .com, hot news, shortly, top, world of money tagged , , , , at 4:06 am by carydalton

Kraft Foods has reached a tentative deal for a friendly takeover of Cadbury of Britain, agreeing in principle to pay about $19 billion in cash and stock for the confectioner, people briefed on the matter said on Monday.

Barring any last-minute complications — these people cautioned that the talks could still fall apart — the deal would create a global food giant that would unite Kraft and its Oreo cookies and Ritz crackers with Cadbury and its Trident gum and Dairy Milk chocolates. Together, the two companies would have more than $50 billion in revenue and a big presence in markets globally.

Over the last decade, food companies have sought to gain scale by combining with each other, most recently with Mars buying the Wm. Wrigley Jr. Company in 2008 for $23 billion.

The tentative deal for Cadbury would end a four-month battle for control of the British candy maker, one in which Cadbury executives accused Kraft of showing “contempt” with an undervalued offer.

Under the terms of the proposal, Kraft will pay 840 pence ($13.70) for each Cadbury share, while Cadbury will pay out a special dividend of 10 pence a share. The offer is about a 5 percent premium over Cadbury’s closing share price of 807.5 pence on Monday. The majority of the increase was in the cash component, which was raised to £5 a Cadbury share, from £3, a person briefed on the matter said.

The agreement is expected to be announced as soon as Tuesday, this person said, which is the last day Kraft can raise its offer under British takeover rules.

Spokesmen for Cadbury and Kraft declined to comment on Monday.

The deal will draw to a close an often acrimonious takeover battle between the two food companies, one that began with Kraft making public an unsolicited $16.7 billion bid for Cadbury in early September. The Cadbury management quickly derided the offer as too low and dismissed the prospect of being absorbed into what it called a slow-growing food conglomerate.

Most of Cadbury’s major shareholders resisted Kraft’s original offer, with just 1.5 percent having accepted by an earlier January deadline. Many are likely to be swayed by a recommendation from Cadbury’s board now that Kraft has addressed a common complaint by raising the cash portion of its bid.

A takeover of the 186-year-old Cadbury, especially by an American giant like Kraft, will most likely send shudders throughout Britain. Politicians and unions have pointed to both a loss of jobs — the Unite labor union has estimated that as many as 30,000 jobs could be lost — and of national pride business card templates.

Cadbury has argued repeatedly that it would prefer to remain independent, pointing to faster-than-expected success in its turnaround program. But its executives have acknowledged that Kraft’s bid put the company in play and they would consider any offer made at the right price.

From the beginning, speculation mounted among investors that another bidder could step in, forcing Kraft to raise its original offer. Representatives for Cadbury have held talks with Hershey, the American company that Cadbury had viewed as a preferable merger partner, according to people briefed on the matter.

For Hershey, buying Cadbury would prevent it from being relegated to a mostly domestic company. Hershey moved closer to making a bid in recent days, lining up more than $10 billion in financing, these people said.

Hershey had been waiting for Kraft to unveil its final offer on Tuesday before it made its final decision on a bid, but analysts have said that Hershey would most likely be unable to top the much larger Kraft in a bidding war. Other potential suitors, including Nestlé of Switzerland and Ferrero of Italy, dropped out.

Despite Kraft’s strong desire to gain control of Cadbury, its chief executive, Irene Rosenfeld, vowed to keep the company disciplined in its bidding and to maintain its investment-grade credit rating. Still, Kraft began raising its original offer earlier this month, increasing the cash portion of its bid after selling its North American frozen pizza business to Nestlé for $3.7 billion. Ms. Rosenfeld met with Cadbury shareholders in London last week to solicit their opinions.

Others have sounded notes of caution. Warren E. Buffett, whose Berkshire Hathaway is Kraft’s largest shareholder, delivered an unusually public admonishment, warning Kraft to avoid overdiluting its shareholders by issuing too many new shares.

William A. Ackman, who runs the hedge fund Pershing Square Capital Management and has been amassing a big position in Kraft, echoed concerns about shareholder dilution, though he said he supported the company’s takeover effort.

Andrew Ross Sorkin contributed reporting.

Kraft Said to Reach Deal for Cadbury

Hot News: Asia Markets: Indian state-run banks may outpace private peers

01.17.10

Outlook better for some regional banks

Posted in .com, business, economic, online, shortly tagged , , , , at 10:48 pm by carydalton

NEW YORK (Reuters) – Some banking analysts are bullish on U.S. regional banks as they expect fourth-quarter results to bring improved earnings per share and capital-ratio visibility, Barron's reported on Sunday.

Credit Suisse analyst Craig Siegenthalter says that while some regional banks will probably miss earnings estimates when results are announced in coming weeks, he believes the rate of change in non-performing assets and earnings charge-offs will move close to zero, Barron's reported.

Loan-loss provisions should peak in the fourth quarter, Siegenthalter said.

"If problem loans don't grow as much as expected and the deceleration is bigger than expected, that will cause a lot of buying of these stocks," Barron's quoted Siegenthalter as saying quick cash advance.

Stocks he rates as "outperform" include Bank of Hawaii Corp (BOH.N), Fifth Third Bancorp (FITB.O), First Horizon National Corp (FHN.N) and SunTrust Banks Inc (STI.N), the newspaper said.

David Kovacs, a chief investment officer at Turner Investment Partners, told Barron's his favorites include Regions Financial (RF.N), Huntington Bancshares Inc (HBAN.O), Marshall & Ilsley Corp (MI.N) and Susquehanna Bancshares (SUSQ.O).

(Editing by Leslie Adler)

Outlook better for some regional banks

01.16.10

Business Briefing | Automobiles: Opel Names a G.M. Executive as Its New Chief

Posted in .com, All, Free blog Tips, hot news, online tagged , , , , at 3:24 pm by carydalton

A veteran General Motors executive, Nick Reilly, left, will take over as Opel’s chief executive, Opel announced on Friday. The widely expected appointment of Mr. Reilly, who is already president of G.M. Europe, was part of a management shake-up. Mr. Reilly will be responsible both for Adam Opel and its British sister brand Vauxhall. Also on Friday, G.M. said in a regulatory filing that it lent Opel $900 million in November to maintain operations and to repay a loan from the German government payday loans. Also, G.M. on Jan. 4 accelerated $930 million in payments to Opel for engineering work. The accelerated payments will keep Opel going until more permanent financing is arranged, the filing said.

Business Briefing | Automobiles: Opel Names a G.M. Executive as Its New Chief

01.12.10

FTSE 100 closes lower

Posted in All, Free blog Tips, business, shortly, top tagged , , , , at 8:54 pm by carydalton

LONDON (AFP) – The leading stock exchange fell on Tuesday as investors reacted to weak earnings data from US aluminium producer Alcoa, which kicked off the latest results season in the world's biggest economy.

The FTSE 100 index slumped 0.71 percent to 5,498.71 points, dragged down by heavyweight mining groups whose share prices suffered after Alcoa's earnings missed analyst expectations.

Lloyds was the most traded stock, seeing 187 million units change hands, followed by telecom giant Vodafone, which saw 128 million shares switch owners.

Land Securities topped the leader board, gaining 10.50 pence — or 1.54 percent — to finish at 693.50.

The day's second-best performer was wholesale firm Wolseley, up 21 instant payday loan.00 pence — or 1.47 percent — to stand at 1,447.

The session's biggest loser was silver miner Fresnillo, which lost 44.00 pence — or 5.16 percent — to close at 808, as metal prices tumbled.

It was followed by peer Lonmin, which shed 88.00 pence — or 4.08 percent — to finish at 2,069.

Sterling gained ground against the euro and the dollar.

At 17:06, the pound was trading at $1.6181, up from $1.6115 at Monday's close. Against the euro, the pound stood at 0.8975 euros, up from 0.8962 over the same period.

FTSE 100 closes lower

01.06.10

Crude prices rise for ninth straight day

Posted in business, hot news, shortly, top, world of money tagged , , , , at 8:48 am by carydalton

NEW YORK, Jan. 5 (Xinhua) — Crude prices rose for the ninth straight day on Tuesday as cold weather boosted demand for heating fuel.

Unusually cold weather has hit the United States, Europe and Asia since last week. Investors expected that the weather would boost heating demand above normal.

Investors are also awaiting weekly U.S. oil inventory data while analysts forecast the data will show a drop in distillate and crude stockpiles online payday loans.

Light, sweet crude for February delivery was up 26 cents to settled at 81.77 U.S. dollars a barrel. In London, Brent crude for February rose 47 cents to 80.59 dollars.

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