NEW YORK (Reuters) - Citigroup Inc (C.N) shares closed down almost 9 percent on Tuesday after reports the government might begin shedding its stake in the New York-based bank.
Citigroup, eager to escape the burden of a significant government ownership stake, is in talks with U.S. officials about selling part of the government's 7.7 billion shares in the bank, sources familiar with the situation said.
The bank, which on Tuesday sold $5 billion in debt backed by the Federal Deposit Insurance Corp, may also look to sell about $5 billion of new stock to partially repay other Citi securities owned by the government, sources said.
The United States owns about $27 billion of these other securities, known as trust preferreds, which are a hybrid of stocks and bonds.
Investors have generally welcomed banks unwinding government investments made during the financial crisis, but selling a large block of shares could pressure Citigroup stock.
How the government would sell its 34 percent stake in Citigroup -- whether in dribs or drabs or large blocks-- is unclear. The timing is also uncertain. The United States will likely go ahead with a sale only when it is confident Citigroup has returned to profitability, sources said.
Citigroup spokeswoman Shannon Bell declined to comment.
Mike Holland, president of money manager Holland & Co in New York, said fears of an over-saturated market for Citi shares could be the reason why they are trading down today.
"One plausible explanation could be the huge supply coming on the market," said Holland, who nonetheless welcomed the news that Citi was exploring options for exiting the bailout program.
Citigroup finished off 40 cents, or 8.85 percent, at $4.12 on New York Stock Exchange. In comparison the KBW Banks index .BKX closed up 1.44 percent.
The Wall Street Journal reported that Citi contacted a U.S. Treasury official during the weekend with the message that the company wanted to begin discussions about the government shedding its stake.
The government would stand to make billions of dollars in profit from its stake in Citi, as the shares have risen more than 30 percent from the price at which the Treasury converted its preferred shares into common stock.
According to IFR, a Thomson Reuters Service, Citibank NA on Tuesday sold a $1 billion three-year floating-rate notes and has a coupon rate of flat over the three-month London Interbank Offered rate and $1.5 billion in two-year fixed-rate notes priced to yield 32.7 basis points over U.S. Treasuries.
Citigroup Funding sold $2.5 billion in three-year fixed-rate notes yielding 49.4 basis points over Treasuries.
(Reporting by Steve Eder, Dan Wilchins and Caryn Trokie; editing by Tim Dobbyn, Andre Grenon and Bernard Orr)
Sep 15, 2009
Citi shares down on concerns of U.S. government sale
Dollar slides to 2009 low versus euro as stocks rebound
By Wanfeng Zhou
NEW YORK (Reuters) - The dollar on Monday fell to its lowest level this year against the euro as a rebound in U.S. stocks revived risk appetite and eroded the greenback's safe-haven appeal.
U.S. stocks edged higher, erasing early-session losses after a decision by the United States to impose special duties on Chinese tires sparked concerns of an escalating global trade dispute.
"It's the whole risk-on, risk-off story back again," said Jacob Oubina, currency strategist at Forex.com in Bedminster, New Jersey. "We had risk come off a little bit overnight with the China-U.S. trade news. Now (U.S. stocks) are managing to eke out a rally here and that's keeping the euro supported."
In late New York trading, the euro was up 0.4 percent on the day at $1.4622, rebounding from a session low of $1.4514. It climbed as high as $1.4652, the pair's highest level since December 2008, according to Reuters data.
Kathy Lien, director of currency research at GFT Forex in New York, said the single euro zone currency also recovered from losses on buying of the euro against the pound after Moody's said its outlook for UK banks remained negative.
Sterling fell 0.6 percent against the dollar to $1.6566, while the euro rose 0.9 percent against the pound to 0.8825.
The ICE Futures U.S. dollar index, which measure the greenback against a basket of six currencies .DXY, swung between gains and losses, but last traded up 0.1 percent at 76.657, marking the first gain in seven sessions. The index declined to 76.457 on Friday, its lowest in nearly a year.
Against the yen, the dollar rose 0.3 percent to 90.93 yen, pulling back from an early fall to 90.18 yen, its lowest since February, according to Reuters data.
CHINA DISPUTE
Early trading was dominated by the U.S.-China trade dispute after President Barack Obama on Friday announced safeguards on tire imports from China that would put additional duties of 35 percent on Chinese-made tires from September 26.
China struck back, announcing its own anti-dumping investigations of U.S. motor vehicles and chicken products.
The dispute raised concern and increased uncertainty that the fragile global economic recovery could be derailed, lowering demand for risky assets overnight. But strategists said it was unlikely to put a lasting hole in the market's appetite for risk.
The dollar has come under heavy pressure this month as optimism about a global economic recovery encouraged investors to move out of safe havens into riskier investments.
Concerns about the fiscal deficit in the United States, speculation that the dollar was replacing the yen as a funding currency and talk of Asian central banks diversifying away from the greenback added to dollar selling.
"The sentiment is still dollar-negative. What the market is really concerned about is the ability or the willingness of the U.S. authorities to deal with the fiscal problems," said Vassili Serebriakov, currency strategist at Wells Fargo in New York. "Dollar weakness is probably exacerbated by the breach of important technical levels last week."
Blockbuster may close as many as 960 US stores
By MICHAEL LIEDTKE
The Associated Press
Tuesday, September 15, 2009; 7:08 PM
SAN FRANCISCO -- Blockbuster Inc. may close as many as 960 stores by the end of next year, shedding more dead weight as the struggling video rental chain tries to reverse its losses and fend off rapidly growing rivals Netflix Inc. and Redbox.
The cuts outlined in documents filed Tuesday would leave Blockbuster with about 20 percent fewer U.S. stores. The previously confidential documents didn't identify the locations of the endangered stores.
Blockbuster hasn't made any final decisions on the possible store closures, Chief Executive James Keyes said in an interview Tuesday.
Keyes described the closures as something that Blockbuster is considering as it sets up more DVD-rental kiosks in the stores of other merchants. It's a concept that has been popularized by Coinstar Inc.'s Redbox.
By the middle of next year, Blockbuster hopes to have 10,000 kiosks scattered around the country. It had just 500 kiosks at the end of August.
"We could have fewer physical stores and still have more rental points for our customers," Keyes said.
Blockbuster's shift serves as another reminder of video stores' waning appeal as consumers buy and rent movies through the mail, on the Internet and through cable connections and standalone kiosks.
The shift has threatened to turn once-mighty Blockbuster into a dinosaur. The Dallas-based company has been trying to evolve by embracing kiosks and expanding into rentals delivered through the mail and the Internet.
But it hasn't been enough to justify keeping so many stores open, prompting management to consider cutting much deeper than it anticipated to save money and keep its lenders happy. About 18 percent of Blockbuster's stores aren't making money, according to the documents filed with the Securities and Exchange Commission.
Blockbuster is thinking about closing between 810 and 960 of its U.S. stores before 2011, up from the 380 to 425 stores that normally would be closed during that time span, according to Tuesday's filing.
As of mid-August, Blockbuster had closed 276 stores so far this year.
Besides closing stores, Blockbuster indicated that it will convert at least 250 stores into smaller outlets.
IATA says airline losses to reach $11 billion
Industry association IATA today predicted that airlines would lose $11 billion this year, up from the $9 billion forecast earlier.
'The outlook for the industry has deteriorated. We are now expecting losses of $11 billion' for 2009, said Giovanni Bisignani, who is director-general of the International Air Transport Association.
He also said that the industry would lose $3.8 billion next year
European carriers are expected to be worst hit this year, with losses of $3.8 billion, twice as much as the $1.8 billion initially predicted.
Asian-Pacific airlines should post losses of $3.6 billion, slightly up from the previous forecast of $3.3 billion. North American carriers should lose $2.6 billion, more than twice the earlier estimate of $1 billion, IATA said.
Lehman: Barclays got $8.2 billion "windfall" from sale
Signs are displayed on the former Lehman Brothers, now Barclays Capital building in Times Square in New York in this September 23, 2008 file photo. REUTERS/Eric Thayer
By Phil Wahba and Emily Chasan
NEW YORK (Reuters) - Lehman Brothers Holdings Inc
In court papers filed in federal bankruptcy court in Manhattan on Tuesday, Lehman claimed that "critical changes" were made to the sale in between the time the sale order was signed and the deal was closed, resulting in Barclays gaining control of assets that Lehman contends were not supposed to be part of the sale.
Lehman filed for bankruptcy on September 15, 2008, in the largest U.S. bankruptcy in history. Its flagship U.S. brokerage business was sold to Barclays less than a week later in a hurriedly-assembled deal.
"Certain Lehman executives agreed to give Barclays an undisclosed $5 billion discount off the book value of securities transferred to Barclays, and later agreed to give billions more in so-called "additional value" that Barclays demanded, but the court never approved," Lehman said in the court filing.
The charges come after Lehman received approval in June to probe whether Barclays got "too good of a deal" when it bought Lehman's brokerage business, as the British bank was able to quickly book a $4.2 billion gain on its $1.75 billion purchase. Barclays said at the time that it did not expect the probe to result in any additional claims.
Lehman was allowed to probe Barclays because of the speed with which the deal with Lehman's was reached. "It's conceivable that mistakes were made," said Judge James Peck of U.S. Bankruptcy Court for the Southern District of New York at a hearing in June.
Lehman alleged in the filing that Barclays had committed to pay former Lehman employees $2 billion in bonuses but never did and "never intended to do so" despite factoring them in to the terms of the sale.
The difficulties with the valuations of assets and liabilities were "exacerbated the fact that many of the Lehman decision makers who 'negotiated' the transaction with Barclays had at the same time been offered lucrative" jobs at Barclays on condition the sale be closed, Lehman said.
"This is an opportunistic claim," Barclays said in a statement on Tuesday. "Now that the economy has begun to stabilize the Lehman Estate is trying to re-trade the deal on the basis of a meritless argument."
Lehman is asking the court to amend the deal and a hearing is scheduled for October 15.
The Trustee overseeing the liquidation of Lehman's North American brokerage business and return of assets to customers also said in a statement on Tuesday that "billions of dollars in additional assets" that Barclays claims it owns are "customer property" and were not authorized by the sale.
"The transfer of these assets to Barclays would create an unfair windfall for Barclays at the expense of public customers," James Giddens, the trustee for the Liquidation of Lehman Brothers Inc. under the Securities Investor Protection Act said in the statement.
The case is In re: Lehman Brothers Holdings Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-13555.
(Reporting by Emily Chasan and Phil Wahba, additional reporting by Chelsea Emery; Editing Bernard Orr)
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Citigroup plans share offering to cut US Treasury's 34pc stake
Citigroup's senior managers are working on a proposal that would allow the US Treasury to sell some of its 34pc equity stake in the bank, reducing its grip on the banking conglomerate and repaying some of the money owed to US taxpayers. By James Quinn, US Business Editor
Published: 7:34PM BST 15 Sep 2009
Citigroup has received a total of $45bn (£27bn) in capital from the US Treasury Photo: Reuters
Citigroup is understood to be eager to assist the US government to sell its stake through a potential share offering later this year.
The sale is likely to come as part of a wider share placing, in which the bank would raise further capital by issuing new shares to the public and institutional investors, at the same time as selling the government's holding. The joint sale would ensure that Citigroup's capital ratios are maintained, likely to be a requirement of the Treasury before it agrees to any sale.
Although it is understood that there have been no in-depth conversations between the Treasury and the bank on the subject, Citigroup is believed to be keen to advance its plan. It is possible a sale could come as soon as early next month.
Citigroup has received a total of $45bn (£27bn) in capital from the US Treasury as well as a $306bn loan-loss guarantee designed to cover 90pc of losses on its most toxic of loans.
The Treasury converted $25bn of its $45bn investment – originally held in preferred shares with warrants attached – into ordinary equity over the summer, giving it a 34pc stake based on the 7.7bn shares it owns, making it the largest single investor in the bank.
Earlier this week Dick Parsons, Citigroup's chairman, upped his commitment to exiting the Troubled Asset Relief Programme, telling Bloomberg Television: "I have every confidence that Citi will be able to exit TARP and actually be able to give the American taxpayer a decent return."
"I can't put a time frame on it, but I'm very confident we'll get there," said Mr Parsons, who has repeatedly stopped short of giving any timescale as to when the US government will be repaid in full.
If the sale were to take place, US taxpayers are likely to reap a substantial profit from their investment in the bank.
The Treasury acquired its Citigroup shares at $3.25 each and yesterday afternoon they were trading at $4.27, having fallen 25 cents on news of the potential sale. As a result, at the current price, the equity investment alone would be worth $7.8bn, not to mention the future value likely to be realised from Citigroup buying back the preferred capital and the attached warrants.
Reducing the government's involvement in Citigroup is a core objective of the bank's senior management team as they attempt to return the bank to long-term profitability after two years of sustained losses as a result of its exposure to the US sub-prime mortgage market and other toxic assets.
Citigroup is currently in negotiations with President Obama's pay tsar, Ken Feinberg, regarding the compensation packages of the bank's 25 best-paid executives. The 25 include commodities trader Andrew Hall, who earned $100m last year, and who remains in talks about what percentage of the total he will receive. Although a reduced government stake would not necessarily end such interference, immediately, it would make it easier for chief executive Vikram Pandit to run the bank the way he would prefer to.
"Updated" 8GB iPod touch has lower price, not better gaming
Those considering the iPod touch for gaming might want to steer clear of the not-so-new 8GB model, which is just last year's model with a lower price. The best gaming performance will come from OpenGL ES 2.0-capable hardware, which is only included in the pricier 32GB and 64GB models.
Apple spent a lot of time during the September iPod event talking about how the iPod touch was a great gaming device. However, in an effort to bring down the price on the 8GB model, Apple left it saddled with last year's graphics capabilities. Plenty of holiday shoppers might not know or care about the differences, but it does create additional splintering of Apple's mobile platform at a time when the uniformity of the platform is seen as one of its biggest assets.
iFixit first discovered during its teardown of the third-gen 8GB models that the internals are identical to a second-gen one. An Apple spokesperson confirmed to Ars that the only thing "updated" about the 8GB iPod touch is the price. While Steve Jobs said that the $199 price point was important to put the iPod touch in the hands of more users, it seems unnecessary to create a disparity in the capabilities of iPod touch models from the same generation.
During the event, Apple had demoed some of the blazing fast, detailed graphics that are possible with the updated PowerVR graphics core that powers the iPhone 3GS and the new 32GB/64GB iPod touch models. Those models also have an updated ARM processing core, which runs at 600MHz (that number hasn't been confirmed for the iPod touch, but performance seems to be inline with the iPhone 3GS). Initial speed tests confirm that the iPod touch models with updated hardware perform much faster that last year's models, just as the iPhone 3GS outperforms the iPhone 3G.
It's true that developers can design games to use OpenGL ES 1.1 for older hardware and OpenGL ES 2.0 for devices that support it. However, it does create additional work for developers, who then have to create additional artwork and then tune performance for two different devices. It's only a matter of time before doing the extra work isn't worth the time or money, and developers start targeting the newer hardware to make the best experience.
Below, you can see a demonstration of the difference in performance between an OpenGL ES 1.1 device (the iPhone 3G) and an OpenGL ES 2.0 device (the iPhone 3GS) by iPhone developer Tap Tap Tap. The difference is quite striking, and you can see why developers would be keen to tap the power of the newer hardware.
Sep 14, 2009
US bank bonus case to go to trial
A US federal judge has rejected a $33m (£20m) settlement between Bank of America and its regulator, the Securities and Exchange Commission.
Bank of America saved Merrill Lynch from collapse a year ago after telling shareholders no bonuses would be paid to executives without their approval.
But $3.6bn was paid in bonuses to Merrill executives, before the deal was closed, despite Merrill's huge losses.
The judge threw out the settlement and ordered a trial to begin on 1 February.
The settlement "cannot remotely be called fair", District Judge Jed Rakoff ruled.
Bail-out funds
Bank of America has neither admitted nor denied the allegations of the Securities and Exchange Commission (SEC).
It was one of the biggest recipients of bail-out funds from the US taxpayer in 2008, needing capital injections at the height of the financial crisis.
The bonuses were made for 2008 in spite of Merrill Lynch losing $27.6bn that year.
The SEC announced last month that it had settled its civil case with Bank of America, but Judge Rakoff decided not to approve the settlement and instead asked the SEC to explain why it had not pursued charges against specific executives.
He received the additional statements from the SEC last week and has now ruled that a full trial will be needed.
Judge Rakoff found that the settlement "suggests a rather cynical relationship between the parties: the SEC gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger, the bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators".
"All this is done at the expense, not only of the shareholders, but also of the truth," the judgement concluded.
It is also reported that the New York Attorney General Andrew Cuomo's office is close to a decision on whether to file charges against executives at Bank of America for withholding information from shareholders.
China's exports, trade surplus fall in August
By ELAINE KURTENBACH
The Associated Press
Friday, September 11, 2009; 1:09 AM
SHANGHAI -- China's exports languished in August, contracting 23 percent, increasing the onus on Beijing's massive stimulus spending to drive an economic recovery.
Customs data released Friday show August's exports were worth $103.7 billion compared with $134.9 billion in the same month a year earlier. Imports fell 17 percent to $88 billion, while the overall trade surplus plunged 45 percent from a year earlier to $15.7 billion, but rose from the month before, the report said.
The figures were worse than most economists' forecasts.
China's trade has been battered by the global downturn but Beijing's 4 trillion yuan ($586 billion) stimulus program has helped to insulate the world's third-largest economy by fueling industrial demand through heavy spending on building new highways and other public works.
Economic growth accelerated to 7.9 percent over a year earlier in the latest quarter, up from 6.1 percent the previous quarter, though is still far short of the 10 percent-plus growth rates of recent years. The government aims for 8 percent economic growth this year.
Although surveys show purchasing orders are beginning to rebound, trade has stabilized at a relatively low level, says JP Morgan chairwoman for China equities, Jing Ulrich. As the economies of China's major trading partners gradually strengthen, the export slump should gradually ease," she said in a report Friday.
In January-August, China's total trade with the EU fell nearly 21 percent, while its total trade with the U.S. dropped 16.4 percent and its trade with Japan slipped 22 percent, the government said.
Exports of almost all major industrial products saw double-digit declines, according to the customs data.
China's imports have also remained anemic, even more so now that they are no longer inflated by the massive stockpiling of commodities seen earlier this year.
Container throughput in August was lackluster at China's biggest ports - down 11 percent from a year earlier in Shenzhen, and down 15 percent in Shanghai, Ulrich said.
Sprint shares rise on report of Deutsche Telekom buyout
San Francisco - Shares of US mobile carrier Sprint spiked sharply higher Monday following reports of a possible buyout by Germany's Deutsche Telekom AG, which operates T-Mobile USA, the country's fourth largest mobile phone network. The alliance of T-Mobile with third-placed Sprint would allow the new company to leapfrog AT&T to become the second largest carrier in the US after Verizon. But analysts said the merger could be fraught with complexity as the two companies use different technology to power their networks, and are also heavily laden with debt.
Neither company was willing to comment on the reports, which first appeared in the British newspaper The Telegraph. The newspaper reported that Deutsche Telekom had hired Deutsche Bank as an adviser for a possible bid. Citing unnamed sources, the paper said a bid for Sprint might come within a few weeks.
In morning trading, shares in Sprint jumped 13 per cent to 4.26 dollars as investors betted that any offer for the company would have to include a hefty premium to its previous
U.S. looking at selling Citi shares: report
NEW YORK (Reuters) - The Treasury Department is talking to Citigroup Inc (C.N) about how to sell the roughly one-third stake the government acquired as part of its bailout of the bank, news agency Bloomberg reported, citing people familiar with the matter.
The Treasury may start unloading shares as soon as October, and would aim to sell the holdings over the next six to eight months, the newswire reported, citing one of the people familiar with the matter.
Shannon Bell, a spokeswoman for Citigroup, declined to comment. There was no immediate response from the Treasury Department.
The U.S. government has about 7.7 billion Citi shares, representing 33.6 percent of the company's outstanding stock.
Citigroup has recorded more than $100 billion of write-downs and credit costs since the financial crisis began, as it wrestles with bad loans to consumers and bad securities on its books.
The government gave the bank $45 billion of rescue money in two bailouts, and then agreed to convert the preferred shares it bought from the bank into common stock.
But since that conversion, the bank's shares have rallied some 40 percent, and the government could be sitting on billions of dollars of profits.
The difficulty will be in selling a large block of shares without causing the bank's share price to crater, cutting into the government's profit.
But Switzerland found extensive demand for its 9 percent stake in UBS (UBSN.VX) last month when it sold $5.1 billion of the bank's shares.
Orders for the shares far exceeded stock on offer, the finance ministry said. UBS's shares have risen more than 12 percent since that sale, which investors saw as a sign of the bank's strength.
The U.S. Treasury hasn't developed a formal plan for the sale of Citi shares, and is considering options such as selling the stock in blocks to investors over six to eight months, or selling a small amount daily or weekly, Bloomberg said, citing people who declined to be identified.
The shares could also be sold at once in a managed offering, Bloomberg reported.
Citi's shares traded at $4.39 on Monday in after hours trading, down 2.9 percent from their close.
(Reporting by Dan Wilchins; Editing by Bernard Orr, Gary Hill and Carol Bishopric)
Obama Renews Push for Wall Street Oversight
President goes to the heart of Wall Street on the first anniversary of Lehman Brothers' collapse to outline changes he believes are needed to prevent a future crisis.
NEW YORK -- Insisting on "common-sense rules of the road," President Obama told the wizards of Wall Street on Monday that he supports a free market, but he won't let financial firms that are "too big to fail" threaten the overall economy again.
Obama marked the first anniversary of the collapse of the Lehman Brothers investment firm in a speech on Wall Street in which he tried to balance demands to reduce the federal government's role in banking while trying to increase oversight of the financial industry.
"With so much at stake, we should not be forced to choose between allowing a company to fall into a rapid and chaotic dissolution that threatens the economy and innocent people, or forcing taxpayers to foot the bill," Obama said in New York City's Federal Hall.
Saying that he's not interested in being banker-in-chief, the president insisted that he does not want to "disparage wealth, but to expand its reach."
"But it is important to note that the very absence of common-sense regulations able to keep up with a fast-paced financial sector is what created the need for that extraordinary intervention. The lack of sensible rules of the road, so often opposed by those who claim to speak for the free market, led to a rescue far more intrusive than anything any of us, Democrat or Republican, progressive or conservative, would have proposed or predicted," Obama said.
The president offered several remedies that would establish more oversight that he says will prevent another chain of events like that which led to a near-collapse of America's financial system last year.
He called for a Consumer Financial Protection Agency that would provide "ground rules" for loans so that people will understand what they are signing.
He also proposed a broad plan to give the Federal Reserve Board new oversight powers and impose conditions designed to discourage companies from getting too big.
And he said that at the Pittsburgh G-20 economic meeting later this month, the U.S. will focus on ways "to spur global demand but also to address the underlying problems that caused such a deep and lasting global recession."
In language that emphasized how close to the brink the United States' economy came last year as a result of unscrupulous lenders and reckless homebuyers, Obama warned financial firms not to think they will get a bailout the next time around.
"There are some in the financial industry who are misreading this moment. Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them," Obama said.
"We will not go back to the days of reckless behavior and unchecked excess at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses. Those on Wall Street cannot resume taking risks without regard for consequences and expect that next time, American taxpayers will be there to break their fall," he added.
Though Obama was not president at the time of Lehman's collapse, the investment company's implosion triggered a severe market crisis that, in turn, led to a $787 billion bailout and a series of regulatory reform proposals by a young Obama administration back in June.
Obama said his administration came in eight months ago and provided two things in short supply -- capital and markets.
"We are finally beginning to see money flowing back to the taxpayers," Obama said. "This doesn't mean taxpayers will escape the worst financial crisis in decades unscathed. But banks have repaid more than $70 billion, and in those cases where the government's stake has been sold completely, taxpayers have actually earned a 17-percent return on their investment."
The speech came as five of the nation's largest banks -- Goldman Sachs, JPMorgan, Wells Fargo, Citigroup and Bank of America -- posted second-quarter profits totaling $13 billion. That's more than double what they made in the second quarter of 2008 and nearly two-thirds as much as the $20.7 billion they earned in the second quarter of 2007 -- when the economy was considered strong.
All those banks received tens of billions of taxpayer dollars last year to stay afloat are again betting on the same bonds, commodities and exotic financial products that landed them in trouble.
As of June 30, three banks -- JPMorgan, Wells Fargo and Bank of America -- held $2.3 trillion in domestic deposits, or $3 out of every $10 in deposit in the United States. Three years ago those three institutions held about 20 percent of the industry total.
In his speech, the president leaned on Congress to act on the proposals he has sent them.
But his plans face scrutiny both on and off Capitol Hill. Industry lobbyists are against another regulatory agency, and some have wondered why -- if it's so logical to add another government layer of oversight -- it hasn't been done yet.
On top of that, some lawmakers are fatigued from government intervention into private automakers such as General Motors.
Sen. Chris Dodd, the Democratic chairman of the Senate Banking Committee, is leading the push for new regulatory rules, and his aides hope to have legislation together before the year's end. Already they have conducted hearings on the source of the problem and how best to prevent another.
While sidetracked by a monstrous health care overhaul, presidential economic adviser Larry Summers said a financial overhaul is still doable.
"The president famously said during the campaign that to be president you have to be able to do more than one thing at once," Summers said. "I think that same idea applies to the 535 members of the Congress."
Regardless of the heavy agenda, the president said it is a moral responsibility for banks to pay back the debt that they owe the American people.
"American taxpayers through their government took extraordinary action to stabilize the financial industry. They shouldered the burden of the bailout and they are still bearing the burden of the fallout -- in lost jobs, lost homes and lost opportunities. It is neither right nor responsible after you've recovered with the help of your government to shirk your obligation to the goal of wider recovery, a more stable system, and a more broadly shared prosperity," he said.
Obama had lunch afterward with former President Bill Clinton.
FOX News' Kelly Chernenkoff and The Associated Press contributed to this report.
Latest Google news service promises publishers money and readers
Web firm Google says Fast Flip pages will give publishers the bulk of ad revenue
Google wants to improve the experience of online reading. Photograph: Christian Hartmann/Reuters
Google is launching an experimental news service that it says will boost the revenues and readership of newspapers and allow people to mimic the experience of flicking through pages to find a good read.
Google Fast Flip has partnered with more than 40 titles, mainly American and including the New York Times, to display pages in an experiment into how people "discover and consume media" online.
In contrast to the Google News aggregation service, which provides breaking news from 25,000 sources worldwide, this new service focuses on features, opinion and other longer articles. It will display screen shots from the publishers' websites, showing the bulk of an article rather than just headlines and opening paragraphs.
Fast Flip pages will display adverts as part of a revenue-sharing arrangement between Google and publishers, with the technology company saying "the majority of revenue goes to publishers".
"It's really designed to be a news service to improve the way that people are reading their articles online, to create a more engaging experience for them so they consume more content. Ultimately, partners get more of their content read and make more money from it," said Google's business product manager, Josh Cohen.
Search engines such as Google and Yahoo have been criticised by newspaper publishers for fostering a notion that journalistic content is free. With papers hit hard by falling advertising and a big shift to online readership, they are looking for ways to make more money from web audiences. Rupert Murdoch's announcement that his news websites will start charging over the next year has fuelled discussions over ways to get readers to pay that are not cumbersome and off-putting.
Cohen says the Google service, which launched overnight as part of the development division Google Labs, will help readers "visually browse" through news sites, including newspapers, magazines such as Marie Claire and online publishers such as Salon. The site will be sorted by themes, such as sport and business. It is also searchable, bringing up images from a collection of sites, showing how they have covered a certain topic.
"You can flip through pages till you find something you are interested in reading much like you would with a magazine or newspaper," says Cohen. "Or you can type in a query and in essence create a custom magazine on the fly."
The site becomes more customised the more a reader uses it and will also be available on android phones and Apple's iPhone. For now most partners are based in the US, apart from the BBC, but Google hopes to expand the experiment.
Google's latest news launch comes days after it emerged that the technology multinational is developing new software that will allow newspapers to charge users for certain online content using a system of micro-payments.
Cohen said there was "no direct tie" between Fast Flip and plans to create a micro-payment system. He said the new service was aimed at driving up revenues and readership and above all about understanding how news is read online. But he conceded it was not an altruistic bid to save newspapers.
"If you can create better experiences for users, that's a beneficial thing for Google," he said. "If people are spending more time online, that's ultimately better for us."
Democrats Want to Chastise Lawmaker Who Heckled Obama
By Carl Hulse
House Democrats intend to pursue a formal resolution chastising Representative Joe Wilson for his outburst against President Obama during Wednesday’s Congressional address unless the South Carolina Republican apologizes on the floor.
Senior aides said members of the leadership decided that Mr. Wilson’s behavior in shouting “You lie!” during Mr. Obama’s speech merited some action by the House even though the congressman issued a statement of apology and expressed his regrets to the president through Rahm Emanuel, the White House chief of staff.
“It is a clear violation of the rules of the House and it needs to resolved on the floor of the House either by an apology or by a resolution,” said Brendan Daly, a spokesman for Speaker Nancy Pelosi.
House rules and precedents provide substantial guidance on how a House member can and cannot refer to the president while speaking on the floor and the guidelines state that it has been found impermissible to call the president a liar.
Since Mr. Wilson interrupted the president to challenge him on the issue of health care for illegal immigrants, he has become a focal point in the health care debate.
While Ms. Pelosi on Thursday indicated she was ready to let the matter drop, other members of the Democratic leadership, including Representative Steny H. Hoyer of Maryland, the majority leader, and Representative James Clyburn of South Carolina, the party whip, argued the incident was too egregious to let pass.
WORLD FOREX: Dlr At Fresh 7-Mo Low Vs Yen; Next Target Y90
By Takashi Mochizuki
Of DOW JONES NEWSWIRES
TOKYO (Dow Jones)--The dollar marked a fresh multi-month low against the yen in Asia Monday, and traders said the currency is likely to fall below Y90 this week due to growing pessimism over the outlook for the U.S. economy.
The greenback fell to Y90.18, its the lowest level since Feb. 12, from Y90.64 in New York Friday. Profit-taking on the yen by funds caused the U.S. unit to recover a tad to Y90.49 as of 0450 GMT.
However, the view that the U.S. economy remains weak will likely further drag down the dollar, traders said. Fragile financial market conditions in the U.S. means the Federal Reserve will likely have to keep interest rates low and pump funds into markets. Expectations that a worsening U.S. job market will hurt consumer spending are also spurring dollar selling.
"I don't think investors' dollar-bearish sentiment will change this week. Players should be ready for a slide in the dollar below the psychologically-important Y90 mark anytime this week," said Hiroshi Maeba, a senior dealer at Nomura Securities.
Players are also wondering how the new Democratic Party of Japan administration will deal with recent yen strengthening, considering that some of its lawmakers have voiced support for a strong Japanese currency. However, a rising yen tends to weigh on exports, a key part of Japan's economy, by making Japanese products more expensive abroad.
"The new and untested government's first challenge will likely be currency policy, and there's a risk the policy, if handled improperly, will propel the yen much higher," said Yoichi Itoh, general manager of the treasury department at Sumitomo Trust and Banking.
Meanwhile, the euro fell against the dollar and yen as investors squared their positions, but the market's dollar bearishness means the European currency could rise again soon. It dropped to $1.4541 from New York Friday's $1.4582, but some said it could head back above $1.4600. The euro also fell to Y131.56 at 0450 GMT from Y132.21 late Friday.
Reflecting profit-taking in the U.S. unit, the Dollar Index, which measures the currency's value against six major currencies including the euro, rose to 76.87 from 76.74 in New York Friday.
Traders said they will be watching U.S. economic data this week, such as Tuesday's retail sales for August, to judge the current state of the U.S. economy.
Interbank Foreign Exchange Rates At 00:50 EDT / 0450 GMT
Latest Previous %Chg Daily Daily %Chg
Dollar Rates 2150 GMT High Low 12/31
USD/JPY Yen 90.46-50 90.30-31 +0.18 90.65 90.22 -0.15
EUR/USD Euro 1.4537-41 1.4593-97 -0.38 1.4600 1.4522 +4.00
GBP/USD Sterling 1.6609-12 1.6675-79 -0.40 1.6685 1.6598 +13.56
USD/CHF Swiss Franc 1.0394-98 1.0358-67 +0.35 1.0406 1.0360 -2.58
USD/CAD Canadian Dlr 1.0842-46 1.0769-74 +0.68 1.0858 1.0771 -10.88
AUD/USD Australian Dlr 0.8565-68 0.8627-28 -0.72 0.8631 0.8550 +21.09
NZD/USD New Zealand Dlr 0.6979-84 0.7059-69 -1.13 0.7058 0.6967 +19.61
EUR/JPY Yen 131.53-58 131.85-89 -0.24 132.02 131.31
-By Takashi Mochizuki, Dow Jones Newswires; 813-6895-7554; takashi.mochizuki@dowjones.com
Windows Mobile 6.5 Build 23047 Tour
In this video we compare build 23037 of Windows Mobile 6.5 (from last month) with the freshly released build 23047 (via XDA). The differences include further refinements to the now relocated buttons on the bottom bar. All buttons that previously had text are now icon-based. Also a bit more refined is the pivot list area.
As always, we'll keep an eye on the development of the post-Windows Mobile 6.5 release
Space shuttle Discovery diverted the spaceship to Edwards Air Force Base; lands safely
EDWARDS AIR FORCE BASE, Calif. - The space shuttle Discovery touched down safely on a landing strip in California’s Mojave Desert Friday at the end of a 14-day resupply mission to the International Space Station.
NASA diverted the spaceship to Edwards Air Force Base after waiting in vain for two days for rain and clouds to clear over the shuttle’s home base in Florida.
The shuttle landed at 8:53 p.m. EDT Friday .
“Welcome home Discovery, congratulations on an extremely successful mission,” astronaut Eric Boe radioed to the crew as Discovery came to a stop.
Flight directors had tried Thursday and Friday to bring Discovery back to Florida.
But rain and thunderstorms near Florida’s Kennedy Space Center stymied NASA’s original landing plans, prompting flight directors to switch to the backup site on the other side of the country, where skies were clear.
After 219 orbits around Earth, Discovery plunged back through the atmosphere, soaring northeast over the Pacific Ocean toward Southern California.
Appearing initially over the northeastern horizon as a white speck glinting in the fading sunlight, Discovery descended quickly to the base’s main landing strip, touching down with a puff of smoke as the rear wheels made contact with the runway at a speed of 250 miles per hour .
Double sonic booms earlier thundered through the sky as the shuttle dipped below the speed of sound for the first time since blasting off on Aug. 28 one minute before midnight from the Kennedy Space Center in Florida on NASA’s 128th space shuttle mission.
Commander Rick Sturckow circled Discovery down over the California desert, burning off speed before nose-diving the 100-tonship to the concrete landing strip to complete a 5.7-million mile journey.
NEW CREWMEMBER
Sturckow, pilot Kevin Ford, flight engineer Jose Hernandez, spacewalkers Danny Olivas and Christer Fuglesang, and astronaut Pat Forrester flew back to Earth with a new crewmember, returning space station flight engineer Tim Kopra, who had been in orbit at the station for two months.
Kopra’s replacement, Nicole Stott, will remain on the space station until NASA returns to the outpost in November.
She was the last station crewmember to catch a ride to the outpost on the shuttle and will be the last NASA astronaut to fly home on one as well.
NASA is turning over crew transport to the station to Russia, at a cost of about $50 million per seat, as it begins phasing out the shuttle. The space agency is also considering hiring U.S. commercial firms to ferry its astronauts.
During its latest mission, Discovery carried more than 7.5 tons of food, laboratory equipment, science experiments, spare parts, a new treadmill and crew quarters for the space station.
The space outpost is a $100 billion project involving 16 nations, which is nearing completion after more than a decade of construction.
Olivas, Fuglesang — a Swedish astronaut with the European Space Agency — and Stott made three spacewalks to replace a refrigerator-sized tank of ammonia coolant and prepare the station for its final connecting hub.
NASA has six flights remaining to finish outfitting the station. It then plans to retire the shuttles and move on with development of a capsule and rocket that could ferry crews to the moon.
Those plans may change as President Barack Obama considers the results of a study that has determined NASA’s lunar ambitions exceed its budget by about $3 billion a year.
Intel: Headship Rearrangement
Intel is to change management starting on Monday, according to people briefed on the company’s plans.
Among other changes, the chip maker will announce that Pat Gelsinger, the senior vice president in charge of Intel’s enterprise group, is leaving Intel after 30 years in a variety of roles. Mr. Gelsinger is said to be taking on a new job at another high-tech company. In the past, Mr. Gelsinger has served as Intel’s chief technology officer and the head of its research division.
As Mr. Gelsinger departs, Sean Maloney, Intel’s head of sales and marketing, will take on an even larger role at the company, the people said. All of Intel’s major chip businesses, including its PC, graphics and server chips, will fall under Mr. Maloney, while Dadi Perlmutter, the head of Intel’s laptop chips, will now oversee engineering for all the chip divisions.
The company is the inventor of the x86 series of microprocessors, the processors found in most personal computers. Intel also makes motherboard chipsets, network cards and ICs, flash memory, graphic chips, embedded processors, and other devices related to communications and computing.
An Intel spokesman, Chuck Mulloy, declined to comment on the executive changes. Mr. Gelsinger was not immediately reachable for comment, according to The New York Times' report.
Intel may announce management overhaul today: Reports
Intel is expected to announce a management shake-up on Monday that will see its core chip business-head Patrick Gelsinger leave the company after 30 years, says a media report.
Attributing to people briefed on the company, The New York Times said, Intel is expected to reveal a sweeping management change on Monday.
Among other changes, the chip maker would announce that Pat Gelsinger, the senior vice president in charge of Intel's enterprise group, is leaving the company after 30 years performing a variety of roles, the report said citing these people.
Another media report, The Wall Street Journal, said 48-year-old Gelsinger would run computer-storage giant EMC's storage-products operations and some smaller software units, effective immediately.
As Gelsinger departs, Sean Maloney, Intel's head of sales and marketing, would take on an even larger role at the company, the NYT said citing the same people.
All of Intel's major chip businesses, including its PC, graphics and server chips would fall under Maloney, while Dadi Perlmutter, the head of Intel's laptop chips, would now oversee engineering for all the chip divisions.
Maloney, Intel's sales chief, is also considered to be one of the possible successor to Intel CEO Paul Otellini.
Keywords: Intel corporation, management overhaul, chip business
Japan shares hit by yen
By Eric Burroughs
HONG KONG (Reuters) - The dollar crawled up on Monday from a one-year low against other currencies as speculators booked profits on bets against the greenback, while the yen's surge threatened Japanese exporters and drove Tokyo shares down.
European indexes were set for a weaker start, with futures on the Dow Jones Euro Stoxx 50 down 1.2 percent in early trade.
U.S. crude oil dropped about $1 a barrel to near $68 and gold prices dipped on the dollar's slight gains, even as investors remained nervous that the rise was only a brief respite in a deeper slide. Copper prices also retreated.
Some analysts said Washington's decision to slap duties on Chinese tire imports spooked investors, though others said there was limited impact. China condemned the move as protectionist.
The rebound in global stocks has prompted many portfolio managers to pull funds out of safe-haven dollar funds and shift it into equities, while the surge in gold has revived worries of consumer price inflation as a result of the Federal Reserve's ultra-loose policy.
Japan's Nikkei average shed 2.3 percent as investors are fretting about how the yen's surge against the dollar will hurt exporters still reeling from the currency's record surge last year. A rising yen erodes the value of the earnings exporters make abroad.
"Japan will be hit by the stronger yen," said Masayoshi Yano, senior market analyst at Meiwa Securities in Tokyo.
Japanese exporters are likely to feel the pain of a stronger yen at levels below 95 to the dollar. The 95 level was roughly the average rate seen by large exporters in the Bank of Japan's last quarterly tankan survey for the business year to March.
Among exporters, computer and mobile phone maker NEC (6723.T) slumped 2.9 percent and was one of the biggest decliners in the Nikkei. Back in July, NEC said it has assumed a dollar rate of 90 yen for the current business year.
JAL FLYING
Bucking the trend, shares of Japan Airlines (9205.T) jumped 8 percent after sources said both American Airlines (AMR.N) and Delta Airlines (DAL.N) were in talks about investing in JAL and forming an operational alliance.
Asian shares fell but fared better, with the MSCI index of Asia-Pacific stocks outside Japan .MIAPJ0000PUS down 1.5 percent. On Friday the U.S. S&P 500 .SPX dipped just 0.1 percent, but S&P futures were pointing to a bigger drop at the opening bell later in the day.
Chinese shares .SSEC rose nearly 1 percent as investors that missed out on the listing of Metallurgical Corp of China put funds into the market, helping offset a drop in tire makers. GITI Tire (600182.SS), China's largest tiremaker, shed 5 percent.
The dollar index, a gauge of its performance against six major currencies, rose 0.4 percent to 76.919 .DXY. Last week the dollar index tumbled 1.9 percent last week, the biggest weekly drop since May, and hit a one-year low of 76.457.
Because of the sharp drop in the past few weeks, some traders said the dollar was due for a short-term bounce.
Sep 13, 2009
Delta Air Lines could get stake in Japan Airlines
Delta Air Lines is considering making a cash infusion of a couple hundred million dollars to aid struggling Japan Airlines Corp., a person briefed on the talks told the Associated Press. In exchange, Delta could get a stake in Japan Airlines and coveted access to the closest airport to the Tokyo business center.
Gold Stocks Randgold Resources and Yamana Gold Trade Higher as Gold Hits $1,013
Gold futures gained $15 throughout Friday’s session reaching highs of $1,013, setting the gold market up for its fourth successive weekly gain. The gold market rally has gathered pace over recent sessions after Tuesday saw the yellow metal brake above the key $1,000 dollar mark.
Analysts were keenly focusing on European and North American gold trading this morning. With the Gold price’s strong performance in September so far, analysts felt that some profit-taking may dampen the rally particularly from institutional investors. With a close above $1,000 today crucial for a sustained rally through next week, the Gold price is continuing to become an attractive asset class for investors.
This afternoon’s $15 jump comes as gold becomes increasingly influenced by the weakness of the US Dollar, which extended losses this afternoon following the announcement of the consumer sentiment survey. Standing at 77, the ICE Futures U.S. Dollar Index (USDX®) is currently making yearly lows, apparently fuelled further by a survey conducted by the University of Michigan showing that consumer sentiment in the US rose to 70.2 for September - a better than expected improvement from last month.
Gold futures have been strong through each global exchange this Friday, following a strong Asian session overnight. The Asian session saw gold’s continuing rally gain further impetus following better than expected Chinese economic data, applying further pressure on the US dollar as foreign exchange (FX) investors favour higher risk, and higher yielding currencies. The weaker dollar pushed Gold Futures to $1,004.
In the People’s Republic of China (PRC) the National Bureau of Statistics announced today that China's industrial output is gathering pace, growing 12.3 percent in August from a year before, an increase of more than 10% percent over July. Retail sales also continued to grow, rising 15.4 percent higher in August year-on-year. The growth figure for July year-on-year was 15.2 percent.
The Chinese date exceeded expectations and adds to a growing view that global demand has been building over recent months and may continue to support the on-going economic recovery.
The Chinese announcement triggered a Dollar sell-off in Japanese Forex markets, as investors began returning to risk, selling their ‘safe’ US dollars against higher yielding currencies. The US Dollar extended September’s decline falling to a seven month low against the Japanese Yen.
In UK equity markets, gold stocks have been following the gold price making continuing gains through the week.
International gold miner Randgold Resources (LSE:RRS) traded as high as £43.98 following a strong day that’s seen the stock rise over 3%, in the FTSE 250 Peter Hambro Mining (LSE:POG) gained more than 2%, whilst Canadian-based Yamana Gold (LSE:YAU) were positive on the day also gaining 3.5%.
In the junior market, AIM listed gold explorers and producers have had a strong start to the day also. Allied Gold (AIM: ALGD, ASX: ALD) was one of the best performers following positive drill results, climbing 8%. Philippines focused Medusa Mining (AIM & ASX: MML) also did well, rising 6.5% as did Mwana Africa (LSE MWA) and Norseman Gold (AIM: ASX: NGL).
American Airlines in talks to invest in JAL - source
TOKYO (Reuters) - American Airlines is in talks to take a minority stake in Japan Airlines (JAL) <9205.t> and to form a joint venture to expand their business partnership, a source with direct knowledge of the matter said. The talks come as Japan Airlines weighs a rival offer by Delta Airlines . Delta is also considering taking a stake in JAL as part of a deal that would include joint cooperation on international flights.
TOKYO (Reuters) - American Airlines is in talks to take a minority stake in Japan Airlines (JAL) <9205.T> and to form a joint venture to expand their business partnership, a source with direct knowledge of the matter said.
The talks come as Japan Airlines weighs a rival offer by Delta Airlines . Delta is also considering taking a stake in JAL as part of a deal that would include joint cooperation on international flights.
American and JAL have been holding senior-level talks for several weeks on a joint venture that may include a revenue-sharing agreement and joint contracts for business clients, the source said.
That venture hinges on the enactment of an "open skies" agreement between Japan and the United States that would allow for closer cooperation between airlines on flight operation. Talks between the United States and Japan are still ongoing.
"I'm not talking about hugs and kisses. I'm talking about economic value to Japan Airlines," the source said, speaking on condition of anonymity because the negotiations are not public and nothing has been decided.
"What we've been talking about is actually expanding the relationship not just maintaining it."
A deal with Delta could result in JAL's defection to the SkyTeam network, causing headaches for American, which currently has a code-sharing agreement and cooperates with JAL as part of the Oneworld alliance.
American Airilnes, a unit of AMR Corp , was ready to offer financial assistance and a business alliance that would be "overall competitive," with what Delta is able to offer JAL, Asia's largest airline by revenue, the source said.
JAL is in need of a cash infusion, having fallen deep into the red from the global economic downturn and due to its heavy cost base.
JAL secured a 100 billion yen credit line backed by the government in June and is restructuring under supervision by the state.
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Last updated: 13 September 2009, 07:08
Delta 'may invest up to $550 mln' in JAL
TOKYO — US carrier Delta Air Lines may invest up to 550 million dollars in cash-strapped Japan Airlines to make it the carrier's biggest shareholder, Japanese media reported Saturday.
Delta has told JAL of its interest in investing up to 50 billion yen in the Japanese carrier, the Nikkei business daily and public broadcaster NHK said.
Reports emerged Friday that JAL, Asia's biggest airline, was reported to have entered "full-scale" talks over capital aid of tens of billions of yen from Delta.
Such an investment would give the world's largest airline operator a stake of up to 11 percent in JAL, which is undergoing a government-supervised reorganisation, the Nikkei said.
But the newspaper also said a tie-up with Delta would be difficult because JAL belongs to the oneworld global airline alliance, for which Delta's rival American Airlines Inc. is the North American member.
JAL was also sounding out Air France-KLM Group, Europe's top airline, on expanding its alliance in deals that could dramatically alter the makeup of the global airline industry, Japan's Kyodo News has reported.
Delta and Air France-KLM are both part of SkyTeam, another global airline alliance.
JAL has secured loans from state-backed lenders and is due to present a management improvement plan to the government later this month.
Japan's transport ministry appears to support an investment by Delta.
"If JAL ties up with Delta and expands code-sharing, that would lead to higher efficiency in its international services," a high-ranking ministry official said, according to the Nikkei.
The Japanese airline is slashing its flight services as it braces for a second straight year in the red, hit by the global economic downturn and swine flu fears.
JAL lost more than one billion dollars in the April-June quarter and has announced more than 11,000 job cuts since 2005.
Kyodo News reported last month that it was considering cutting about 5,000 employees, or 10 percent of its group workforce, by March 2012.
Delta is also slashing flight capacity and reviewing staff needs in the face of the global recession.
Copyright © 2009 AFP. All rights reserved
American Airlines in talks to invest in JAL: source
By Nathan Layne
TOKYO (Reuters) - American Airlines is in talks to take a minority stake in Japan Airlines (JAL) <9205.t> and form a joint venture with the struggling airline, a source said, pitting it against a rival bid from Delta Airlines
JAL, Asia's largest airline by revenues, lost about $1 billion last quarter and has been seeking investors to prop up its finances for a state-supervised overhaul likely to include heavy job cuts, a reduction in routes and asset sales.
American Airlines, a unit of AMR Corp
The source, who has direct knowledge of the talks, spoke on condition of anonymity because the negotiations are not public.
JAL is also weighing an offer from Delta, a source told Reuters last week. According to Japanese media, Delta would inject up to 50 billion yen ($551 million) into JAL and wants a tie-up that would include code-sharing on international flights.
The proposed venture between American and JAL hinges on the enactment of an "open skies" agreement now being discussed by the Japanese and U.S. governments which would allow for close cooperation on flight scheduling and sharing of profit.
"I'm not talking about hugs and kisses. I'm talking about economic value to Japan Airlines," the source said. "What we've been talking about is actually expanding the relationship not just maintaining it."
JAL and American have had a code-sharing agreement for a decade and are both members of the Oneworld alliance, which pools frequent flyer incentive schemes. Other members of Oneworld are British Airways
A JAL spokeswoman declined to comment on specific talks with other airlines, including media reports that Air France-KLM
"We are looking at a wide variety of measures, and that may include tie-ups with airlines," JAL's Sze Hunn Yap said.
DEFECTION?
American is keen to preventing JAL from forming a tie with Delta, which became the world's largest carrier when it bought Northwest Airlines last year and could use JAL to increase its international footprint.
Delta operates a hub at Narita airport but is without a Japanese partner. It could try to get JAL to defect from Oneworld for the SkyTeam alliance, which along with Delta includes Air France, Korean Air <003490.ks> and Russia's Aeroflot
In addition to the size of any capital injection, American Airlines will be pushing JAL executives to consider what they see as more compelling long-term economic benefits of joining hands with American as opposed to Delta.
These include less direct competition in Asia and a relationship that would be on a more equal footing, the source said, adding a senior executive would be in Tokyo this week to continue their discussions with JAL.
"Delta, now that they've hooked up with Northwest ... have significant hub operations here in Narita. So the question is for JAL is would it end up being a junior partner to Delta," the source said.
JAL is headed for its second straight annual loss in its year to March 2010, hit by the global economic downturn and heavy fixed costs. It is due to submit a restructuring plan this month, a condition of a 100 billion yen state-backed credit line secured in June.
The airline is also considering raising an additional 250 billion yen by March to help fund restructuring, the Nikkei business daily reported on Sunday. That would include about 100 billion yen through an issue of new shares, the paper said.
Shares would help bolster its shareholders' equity ratio, which fell to 9.3 percent at the end of its first quarter on June 30, about half that of rival All Nippon Airways <9202.t>.
Any investment by American or Delta would likely serve as "seed money that helps get other investors motivated," the source said, indicating other investors would be involved.
JAL also plans to ask aircraft makers, trading houses, investment funds and the Development Bank of Japan to buy shares, the Nikkei said.
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Examiner Bio JAL in separate business talks with Delta and American Airlines
Japan Airlines (JAL) is in separate business talks with Delta and American Airlines. The separate negotiations have come as JAL looks to restructure and find new financial support after major business profit losses. They also come as the U.S. and Japan look to make an “Open Skies” agreement.
Delta vs. American
On September 11th, JAL was reported to have had preliminary talks in Tokyo with heads from Delta Air Lines about receiving $300 to $550 million dollars in investments in return for stakes in the company, one of Japan’s two largest national carriers. The deal would also reportedly include possible investments from Delta’s European partner Air France-KLM, as well as have JAL change to become a member of the SkyTeam alliance.
JAL is currently part of the OneWorld alliance, which includes American Airlines. According to reports on September 13th, JAL has begun separate talks with American about investment options since the talks with Delta. If the “Open Skies” agreement between Japan and America goes through as planned, which ever company wins JAL’s partnership will be in a strong position for expanding routes in the Japanese and East Asian markets.
U.S.-Japan Open Skies Agreement
According the U.S. Department of the State, the “Open Skies” agreements work to expand international travel, trade, and commerce by “eliminating government interference in the commercial decisions of air carriers about routes, capacity, and pricing.” With the agreement, companies can gain unlimited access to all flying points within either country, which provides “maximum operational flexibility.” While American has had access to Japan through JAL in the past, Delta’s closest regional partner to Japan is Korean Air.
JAL’s money problems
JAL has been fighting to recover from around a reported $8 billion dollars of debt. They have been restructuring over the past few years by trimming unprofitable national routes and cutting jobs. JAL reported large quarterly losses earlier this year, but were able to receive extra funding from current investors after the Japanese government guaranteed additional governmental support. However, that support has also increased pressure on JAL to fix their money problems quickly.
Japan's H-IIB rocket and HTV and the ISS
On September 11th (JST), a new rocket, the H-IIB, will be launched into space by the Japan Aerospace Exploration Agency (JAXA). The H-IIB is a redesigned Japanese rocket meant carry the 16.5 ton HTV, an unmanned transportation vehicle that will be used to re-supply the International Space Station (ISS). The HTV will become of particular importance to the ISS after NASA retires the space shuttle in 2010 or 2011.
The H-IIB, built with two engines and four boosters, will be the most powerful Japanese rocket yet. It is also the biggest, standing at nearly 184 feet and weighing 530 tons. Seven launches, one yearly between 2009 and 2015, are currently scheduled. The cylindrical HTV is approximately 33 feet long and 14.5 feet in diameter. It is said to be capable of carrying 6 tons of food, experiments, and other vital supplies, although the first launch will only have 4.5 tons.
The H-IIB and HTV will be launched into space using multiple stages. Once in space the HTV will perform a variety of flight tests before finally connecting with the ISS about a week later.
New Japanese H2B rocket launches successfully
he new Japanese H-IIB rocket launched into space successfully at 2:01 am on September 11th (JST), carrying with it the H-II Transfer Vehicle (HTV) for re-supplying the ISS. The Japan Aerospace Exploration Agency (JAXA) reported successful detachment of the H-IIB and HTV 15 minutes and 10 seconds after liftoff, and the HTV entered a successful orbit above the earth.
The launch took place smoothly and as scheduled from the Tanegashima Space Center in southern Japan. The rocket followed a launch azimuth of 108.5 degrees. The first two solid rocket boosters detached at 2 minutes and 05 seconds, and the second two at 2 minutes and 8 seconds. The first stage separation followed at 5 minutes 56 seconds, and the second stage at 15 minutes and 10 seconds.
The unmanned HTV, which is carrying vital supplies, equipment, and experiments to the International Space Station, will be performing a test flight over the next week. It is scheduled to finally connect with the ISS on the 18th. Once all cargo has been offloaded, the HTV will be disposed of by sending back into the earth’s atmosphere to burn up.
The launch video of the H-IIB on September 11th, 2009 (JST)
JAL mulls raising $2.8 bln
TOKYO — Japan Airlines Corp. (JAL) is considering plans to raise around 250 billion yen (2.8 billion dollars) by March next year to help finance its restructuring, a newspaper reported on Sunday.
Under the plan, Japan's cash-strapped carrier will request 100 billion yen in loans from financial institutions, the Nikkei business daily reported.
It will separately raise more than 100 billion yen by issuing new shares, while raising a further 50-60 billion yen by selling stocks in subsidiaries and other assets, the newspaper said.
JAL plans to ask aircraft makers, trading houses, investment funds and the government-run Development Bank of Japan to take stakes, it said.
US carrier Delta Air Lines has already told JAL of its interest in investing up to 50 billion yen, local media earlier reported.
Such an investment would give the world's largest airline operator a stake of up to 11 percent in JAL, which is undergoing a government-supervised reorganisation, media reported.
Jiji Press, meanwhile, reported AMR Corp., the parent of American Airlines, had also shown interest in buying shares in JAL or setting up a joint venture with the Japanese carrier.
JAL is likely to go ahead with talks with AMR if it fails to reach an accord with Delta, Jiji said. Both American Airlines and JAL belong to the oneworld global airline alliance.
JAL lost more than one billion dollars in the April-June quarter and has announced more than 11,000 job cuts since 2005.
Verdict spares Microsoft $358M in patent damages
Federal appeals court spares Microsoft in a hefty damages payment.
A federal appeals court said Friday that Microsoft Corp. does not have to pay Alcatel-Lucent $358 million for patent infringement because of problems with how the damages were calculated.
The disputed patent covers a method of entering information into fields on a computer screen without using a keyboard. Alcatel-Lucent says Microsoft's Outlook calendar and other programs illegally used this technology.
A U.S. District Court jury determined that damages should roughly equal what Microsoft would have paid up front to license the technology from Alcatel-Lucent. But Friday, the U.S. Appeals Court for the Federal Circuit said the telecommunications company didn't prove its technology was valuable enough to have merited $358 million in royalties.
The appeals court judges told a district court to reconsider the penalty.
Alcatel-Lucent spokeswoman Mary Ward said in an e-mail that the company was disappointed with the decision.
However, in the same ruling, the judges affirmed the underlying verdict against Microsoft, saying it was supported by substantial evidence.
Microsoft shares fell 14 cents to close at $24.86 Friday. Alcatel-Lucent's stock gained 18 cents, 4.6 percent, to close at $4.07.
This patent suit is the last of six stemming from claims that Lucent Technologies Inc. filed in 2003 against PC makers Gateway Inc. and Dell Inc. over technology developed by Bell Labs, Lucent's research arm. Microsoft later joined the list of defendants.
France's Alcatel bought Lucent in 2006.
Wells Fargo vows 'decisive action' in alleged use of Malibu mansion by an executive
Wells Fargo hopes to minimize damage to its public image over an exec's alleged use of a surrendered home. Its rules of conduct prohibit employees from 'personal use of properties' held by the bank.
Wells Fargo & Co., seeking to distance itself from a company executive's alleged personal use of a $12-million beachfront Malibu home owned by the bank, said Friday that it would "take decisive action" against any employee "who may have violated Wells Fargo's policies."
The bank's strongly worded statement came as it faced a potentially embarrassing public relations imbroglio in the aftermath of reports that one of its senior executives had lived in the home that was surrendered by victims of Bernard L. Madoff's massive fraud.
"I almost fell out of my chair" when reading about the Wells Fargo allegations Friday morning, said Jerry Swerling, director of public relations studies at USC's Annenberg School for Communication. "That these folks could think this would not somehow become public astonishes me."
The Times reported this week that Cheronda Guyton, a Wells Fargo senior vice president responsible for foreclosed commercial properties, allegedly spent weekends this summer at the home with her family. The paper cited eyewitness reports from residents of the exclusive Malibu Colony gated community.
Guyton has not responded to phone calls or e-mails seeking comment.
In a statement, the bank said that its rules of conduct prohibited employees from "personal use of properties held by Wells Fargo." The company reiterated Friday that it had launched a full investigation into the allegations.
The San Francisco bank also said it regretted "the disruption to the neighboring property owners since these allegations were made."
The property was transferred to Wells Fargo in May by the home's then-owners, bank customers who were said to have suffered heavy losses in Madoff's Ponzi scheme.
Neighbors recounted a summer evening during which guests arriving for a party at the plush modern home were ferried on a dinghy from a yacht offshore.
The use of the house, Swerling said, suggests that Wells Fargo has failed to ensure that executives "make concern for the company's reputation an organization-wide priority. They need to ask themselves, 'Is this consistent with who we want to be?' If it's not consistent, don't do it."
Kevin Stein, associate director of the California Reinvestment Coalition, an advocacy group for low-income tenants, said the executive's alleged use of the Malibu house looked especially bad inasmuch as Wells Fargo and other banks often swiftly evicted renters from foreclosed houses to speed their resale.
"At the same time at least one bank executive was [reportedly] moving into a house in Malibu, I was imagining that scene a few miles away in the San Fernando Valley where people are getting kicked out because Wells Fargo says they have to put those houses back on the market immediately," Stein said.
He said his group was working with Wells Fargo and other lenders to defer selling foreclosed homes that were occupied by tenants so renters could remain in them longer.
"I expect this is an aberration. I don't know if it is widespread, but I hope it is not widespread," Stein said of the Malibu situation.
Even if the incident was isolated, he said, the harm to the image of Wells Fargo and the banking industry is more broad. "It plays into the public's distrust and skepticism about the role of large financial institutions in this crisis."
Real estate agents contacted by The Times on Friday said they had not heard of similar cases, despite the huge increase in homes surrendered to lenders in the last two years as the housing market collapsed.
Most expressed surprise over the use of the home, and many echoed the sentiments of Adrienne Kessler, an agent with Keller Williams Realty, who said she was "appalled" by the alleged conduct and what appeared to be an obvious abuse of a position.
For Patricia Ruben of Sotheby's International Realty, Los Feliz, the issue hit close to home.
"My saddest day this year was meeting victims of Madoff's Ponzi scheme who were also forfeiting their home," she said. "The idea that another family is frivolously frolicking around the home of a victim's lifelong work leaves a second stain on humanity, a second robbery."
An exception was agent Farrell "Burt" Bakman of Coldwell Banker in Beverly Hills, who said he saw no problem with a lender using a property "as some sort of a bonus."
"It makes sense," he said. "It's thinking outside of the box for Wells Fargo. They just hold on to it as an asset."
According to Coldwell Banker, the 3,800-square-foot home with direct access to the beach has been listed as a vacation rental since April at a rate of $60,000 a month.
One online listing describes the home as having "dramatic architectural" features and touts a "rare opportunity to lease one of the finest homes in exclusive Malibu Colony."
The Last Days of Lehman Brothers: review
John Preston reviews The Last Days of Lehman Brothers, BBC Two's dramatic account of the start of the economic crisis, plus Agatha Christie's Marple (ITV1) and Land Girls (BBC One).
There’s nothing quite like a drama about the financial crisis for bringing out the apocalyptic imagery. The Last Days of Lehman Brothers (Wednesday, BBC Two) even had the CEO of the company, Dick Fuld (Corey Johnson), reciting glumly from the Book of Revelation at one point – none too plausibly, he was joined by his PA who proved to be just as clued-up about the End of Days as he did.
But if some of The Last Days of Lehman Brothers was a little heavy-handed, a lot of it was not. The action took place over the course of a weekend, starting off with Lehman Brothers ‘going into freefall’ on Friday afternoon. To begin with, the board confidently assumed that the US government would bail them out. Then the US Treasury Secretary, Hank Paulson (James Cromwell icily sardonic behind rimless glasses), made it plain that no one will be riding to the rescue. Instead, they’re heading for the biggest bankruptcy in history.
Paulson had some pulpit theatrics of his own: ‘The West is f-----. We’ve had Rome, then Europe, then us. We’ve screwed it up.’ Once again, this breast-beating owed more to authorial wishful thinking than it did to plausibility.
If I hadn’t read beforehand about how Last Days had been written and shot in a tremendous hurry, I think I might have guessed. The tone wobbled awkwardly at times, as did the focus. However, its faults were always faults of ambition, not timidity. Craig Warner’s script consistently aimed high, with his boardroom exchanges being especially good: the chippy competitiveness and testosterone surges slowly subsiding into stunned disbelief.
As Dick Fuld, Corey Johnson gave a convincing impersonation of someone whose insides were simultaneously liquefying and boiling. Near the end, he was seen staring at his reflection in his office bathroom in a gloomy, self-examining sort of way when the lights went out. He waved his arms about and they came on again. A bit over-symbolic? Perhaps, but it kept on happening and after a while Fuld resembled a mad conductor trying to control a non-existent orchestra.
Now to much homelier blood-letting. Agatha Christie’s Marple (Sunday, ITV1) saw Julia McKenzie take up the sacred bonnet dropped by Geraldine McEwan. In obvious contrast to McEwan’s ‘Oh-my-fur-and-whiskers’ twitchiness, McKenzie is more restrained, being neither batty, nor maddening, nor – as McEwan was – possessed of near-nympho flirtatiousness.
All this diffidence might seem like a good thing, but so far McKenzie’s Marple is a rather puddingy nonentity. And her sleuthing wasn’t that hot either. Indeed for much of last Sunday’s opener, the detective (excellently played by Matthew Macfadyen), was doing a perfectly good job by himself. It was only when the plot lurched into absurdity that she stepped forward to point the finger at smoothie charmer Rupert Graves. Instead of snarlingly showing his true colours when he was arrested – as tradition dictates – Graves just slipped inconspicuously into a police car, while ‘Marple’ stumped sadly back to St Mary Mead.
If, for troubling reasons of your own, you want your Agatha Christie full of mahogany tans and breast-implants, Harper’s Island (Monday, BBC Three) is a thumpingly cack-handed version of Ten Little Indians set off the coast of Seattle. Fans of the movie Cool Runnings – none more devoted than myself – may have been interested to note that this episode of Harper’s Island was directed by the same man, Jon Turteltaub.
Whatever Turteltaub has been doing since Cool Runnings, it seems safe to say he hasn’t been brushing up on his chiaroscuro technique: one man here was decapitated by a speedboat, while another was castrated with a carving knife. Even Geraldine McEwan’s winsome little smile might have slipped a bit at this.
Land Girls (Monday-Friday, BBC One) went out at 5.15pm every afternoon, which might lead you to assume it was meant for children. Except it wasn’t, not really. It just wasn’t meant for adults either. Set in the Second World War, it had four lavishly overdrawn girls – Posh, Frumpy, Kindly and Dafty – being billeted in a stately home lived in by heartless Lady Hoxley (Sophie Ward) and her weedy husband, Nathaniel Parker.
Posh (Nancy) fell for Lord Weedy, but he ended up dying in her arms. She was terribly upset by this and tears coursed most decoratively down her cheeks. However, by the very next scene she’d cheered up a good deal – so much so she could barely stop smiling. Viewers may have taken rather longer to regain their equilibrium.
Venezuela eyes 2012 start for huge oil field
CARACAS — Venezuelan state-run energy giant PDVSA said on Saturday that production would begin on its massive Junin 6 oil field by 2012, with backing from a Russian consortium.
In a statement, PDVSA said the Orinoco-based field would produce "between 400,000 and 450,000 barrels of crude a day."
Junin 6 is thought to hold 53 billion barrels of heavy crude, making it one of the world's largest reserves.
The Russian-dominated consortium includes Rosneft, Lukoil, Gazprom, TNK-BP and Surgutneftegaz.
The project is expected to cost up to 30 billion dollars.
EU warns against protectionism in Opel sale
he Associated Press
Saturday, September 12, 2009; 11:27 AM
BERLIN -- The European Union's competition commissioner warned in comments published Saturday that she would take action against any protectionism in the sale of General Motors Co.'s European unit, Opel.
The Belgian government wants the EU Commission to investigate the Adem Opel GmbH deal amid concern that Germany may have sought to protect its own plants at the cost of others.
GM announced Thursday that a majority of Opel would be sold to Canadian auto parts maker Magna International Inc. and Russia's Sberbank, which Germany had pushed hard for. The deal likely would see a plant in Antwerp, Belgium close, while the company's four German plants remain open.
Germany offered euro4.5 billion ($6.5 billion) in credit to support the Magna bid.
"State support should not be subject to noncommercial conditions such as the location of investments and restructuring measures," Commissioner Neelie Kroes was quoted Saturday as telling Belgian newspaper De Tijd. "If something happens against the rules, I will take action."
Thursday's deal was a victory for Chancellor Angela Merkel ahead of German elections Sept. 27. Still, some members of the interim trust that has held a majority in Opel since June questioned what they saw as a politically motivated decision.
Dirk Pfeil, a trustee who abstained in a vote on the deal, said he leaned toward a rival bid from investor RHJ International, which he said "spared German jobs less and took more account of there also being a European component."
"The RHJ concept was simply more Euro-compatible," he told Deutschlandfunk radio.
Economy Minister Karl-Theodor zu Guttenberg suggested that even the Magna bid would involve more job cuts than previously thought.
"All involved knew since spring, also employee representatives ... that the number named by Magna applies only to the area of production, and that further job-cutting by Magna was to be feared in the administrative area," Guttenberg was quoted as telling the Bild am Sonntag newspaper.
The weekly Der Spiegel reported, without citing sources, that Magna foresees cutting not only the expected 3,000 production jobs in Germany but also 1,100 administrative jobs.
Opel employs some 25,000 people in Germany.
