American households saw their wealth increase this spring for the first time in nearly two years as the waning recession breathed new life into stock portfolios and home values. The Federal Reserve says household net worth grew by $2 trillion to $53.1 trillion in the April-to-June quarter.
Published: September 17, 2009
WASHINGTON (AP) - American households saw their wealth increase this spring for the first time in nearly two years as the waning recession breathed new life into stock portfolios and home values.
The Federal Reserve says household net worth grew by $2 trillion to $53.1 trillion in the April-to-June quarter.
Net worth, or the value of assets such as homes, checking accounts and investments minus debts like mortgages and credit cards, rose by nearly 4 percent from the first quarter, the Federal Reserve says.
But even with the gain, Americans’ net worth remains far below its peak of $65.3 trillion logged in the third quarter of 2007, underscoring the bite the recession has taken out of people’s wealth.
Sep 17, 2009
Americans’ Net Worth Grows By $2 Trillion In Second Quarter
Palm investors get chance to see if sales match hype
Palm Inc. investors will get their first glimpse at sales of the Pre smart phone Thursday, as some analysts predict demand may not live up to the hype that drove a 10-fold jump in the stock.
Since dropping below US$1.50 in December, Sunnyvale, California-based Palm has risen as high as US$16.80, spurred by the Jan. 8 debut of the Pre at the Consumer Electronics Show in Las Vegas. Palm, which reports results after markets close, may have sold about 400,000 Pre phones in the period ended Aug. 31, according to Ilya Grozovsky, an analyst at Morgan Joseph & Co.
"That would mean it's not the blockbuster device everybody had hoped it would be," said New York-based Grozovsky, who recommends selling the stock and expects the price to fall to US$7.50, about half the closing price of US$14.66 on Wednesday. "I would assume the Street would be disappointed."
Apple Inc., located in Cupertino, California, sold 5.4 million iPhones in the calendar second quarter, and Waterloo, Ontario-based Research In Motion Ltd. sold 7.7 million BlackBerrys, according to researcher Gartner Inc. In June, Apple cut the price of its cheapest iPhone from US$199 to US$99.
Palm fell 3 cents to US$14.63 at 9:43 a.m. New York time in Nasdaq Stock Market trading. Apple advanced 49 cents to US$182.36, while RIM dropped 92 cents to US$83.24.
Palm's fiscal first-quarter results will also mark Jon Rubinstein's first period as chief executive officer. Mr. Rubinstein, a former Apple executive who got Palm's top job in June, developed the WebOS operating system that runs the Pre.
Predicted Loss
Analysts on average predict Palm will report a loss, excluding some items, of US$35-million, or 24 cents a share, widening from US$12.8-million, or 12 cents, a year earlier. Revenue probably shrank 27% to US$269-million in the period, according to a Bloomberg survey.
Palm Chief Financial Officer Doug Jeffries said last month that he expects the company to be cash flow positive by the second half of next year.
While the Pre re-established Palm as a competitor in the mobile-phone market, the stock has gained mostly because of anticipated demand for the Pre, said Lawrence Harris, an analyst at CL King & Associates in New York.
"It's up on expectations on the Pre, that the WebOS would be some revolutionary operating system and that demand would remain robust," said Mr. Harris, who has a "neutral" rating on the shares. "Demand for smart phones is increasing, but we're also seeing more and more players entering the market."
Palm spokesman Derick Mains declined to comment.
Short Interest
Of the 25 analysts who cover Palm, five recommend buying the stock, 14 say hold and six say sell.
The handset-maker's short interest ratio, a measure of whether investors are betting the stock will fall, was 5.95% at the end of August, compared with 0.99% for Apple and 1.36% for Research In Motion, according to data compiled by Bloomberg.
The Pre allows users to surf the Internet on a touch screen, while using an actual keyboard to type e-mails. The Pre also lets users flip through applications without closing them and search for keywords across multiple programs.
Mr. Rubinstein, 53, joined Palm in 2007 after being courted by Elevation Partners, the private-equity firm co-founded by Roger McNamee. Elevation, based in Menlo Park, California, has invested US$425-million in the company. Mr. Rubinstein, an engineer by training, built WebOS with a team of developers from companies including Apple, Nokia Oyj and Microsoft Corp.
"There are a lot of good engineers there," said Ken Dulaney, an analyst at Gartner in San Jose, California. "The OS is pretty well done."
Sprint Nextel Corp., the third-largest U.S. mobile-phone company, is distributing the Pre. Palm cut the price of the phone last week by US$50 to US$149.99 and at the same time announced the Pixi, a cheaper smart phone to be released later this year.
Frankfurt Motor Show: Renault Fluence, Kangoo, Zoe and Twizy electric cars
Renault unveils a range of electric cars aimed at several segments. Fluence, a four-door saloon; Kangoo, a small delivery van; Zoe, a city car and the Twizy, a two-seater.
By Paul Horrell
Renault unveiled a whole battery of electric cars (c’mon, someone had to say it.) And the level of commitment to the electric vehicle is probably greater at Renault and its Japanese alliance partner Nissan than at any other car company worldwide.
The alliance is building a plant in Sunderland to build lithium-ion batteries, and establishing partnerships with electricity companies to provide recharging points in several countries and areas, including the north-east of England.
The first electric Renault, on sale in 2011, will be a four-door saloon called the Fluence ZE. It incorporates a startling development: swappable batteries.
You drive into a 'Quickdrop’ station - it resembles a dry carwash - and, without you getting out of your car, wait just three minutes for a mechanical arm to remove the entire battery pack from under your car and replace it with a fully charged one.
The system will be adopted first in Israel and in a fleet of Paris taxis.
This highlights Renault’s business model for all its battery cars. You will buy the car, but merely have an 'energy subscription’ which entitles you to leased batteries and the electricity.
Renault reckons the cost of the car and the energy sub will approximate to that of a diesel car and your monthly fuel bill.
Renault also showed three more electric vehicles. Its electric delivery van, the Kangoo ZE also arrives in 2011, and for 2012 it will have a small ultra-cute city coupe, the Zoe ZE. Finally, a tiny tandem two-seat four-wheeled electric enclosed scooter called Twizy ZE.
Confirmed: Zune HD Will Play Games
The Zune HD media player will also be a portable gaming device, with a handful of games available when the sleek gadget launches Tuesday, a Microsoft representative told Wired.com.
At this summer’s E3 videogame conference, Microsoft said only that the upcoming Zune HD would play nice with the Xbox 360. But a series of video ads prematurely released this weekend — then quickly yanked at Microsoft’s request — hinted that Zune HD would be a platform for portable gaming, putting it in direct competition with Apple’s iPhone, Sony’s PSP and the Nintendo DS.
The leaked clips, originally posted by Buy.com, quickly spread across the web after they were pulled from the site.
The brief glimpse of 3-D gaming functionality and the bit where the narrator says that the Zune HD will “play games” occurs 30 seconds into the clip, embedded right.
The rest of the Zune HD promos, touting features like HD radio and Xbox integration, can be found at Neowin.
The game seen in the yanked clip appears to be Forza Motorsport 3, an upcoming racing title published by Microsoft and due out for Xbox 360 this October. Microsoft promises more news soon regarding games on Zune HD.
Temasek Holdings says net profit down 67 percent
SINGAPORE — Singapore state investment firm Temasek Holdings said Thursday its net profit plunged 67 percent to six billion Singapore dollars (4.25 billion US) in the year to March.
Net profit fell from the record 18 billion dollars achieved in the previous financial year ending March 2008 as a result of the global financial crisis.
The value of its worldwide investment portfolio also fell by 30 percent to 130 billion dollars as of end-March this year from 185 billion dollars the previous financial year.
Temasek chief executive Ho Ching said the firm was building up liquidity to prepare for a possible downturn.
"However, we did not anticipate the speed and ferocity of the worst financial crisis since the Great Depression," said Ho, wife of Singapore Prime Minister Lee Hsien Loong.
Temasek chairman S. Dhanabalan said that the steep drop in net profit "reflected the generally weaker operating performances of our portfolio companies as well as realised gains and losses from our divestments during the year."
Stocks mixed as trading opens
By STEPHEN BERNARD
Stocks are narrowly mixed in early trading amid reports that showed weekly jobless claims dipped unexpectedly and housing starts grew at a slightly slower pace than anticipated.
Major indexes have steadily risen throughout the week on signs the economy is recovering and exiting a long-running recession.
The latest unemployment report Thursday showed new claims fell to 545,000 last week, the lowest level since early July.
Housing starts increased in August to their highest level in nine months, but a shade below expectations.
The Dow Jones industrial average is up 6.04, or 0.1 percent, at 9,797.75. The Standard & Poor's 500 index is down 0.72, or 0.1 percent, at 1,068.04, while the Nasdaq composite index is down 2.49, or 0.1 percent, at 2,130.66.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
NEW YORK (AP) _ Stock futures traded in a narrow range Thursday amid reports that showed weekly jobless claims dipped unexpectedly and housing starts grew at a slightly slower pace than anticipated.
Major indexes have steadily risen throughout the week on signs the economy is recovering and exiting a long-running recession. The latest unemployment and housing reports are continuing to show improvement on two key fronts considered necessary to a sustained recovery.
Overseas markets rose Thursday as investors globally are becoming more confident in an economic rebound worldwide.
The Labor Department said workers filing for jobless claims for the first time dipped to 545,000 last week from an upwardly revised 557,000 the previous week. Economists polled by Thomson Reuters were expecting claims to rise.
It was the lowest level of new claims since early July, indicating job cuts could be easing.
However, those continuing to file for claims increased to 6.2 million. Economists were expecting continuing claims to total about 6.1 million.
Just as the unemployment report showed some signs of improvement, so did monthly data on housing starts.
The Commerce Department said housing starts increased in August to their highest level in nine months amid a jump in apartment building. Housing starts rose 1.5 percent to an annual rate of 598,000 units last month, just below the 600,000-unit pace economists had forecast.
Building permit applications, a strong forecast of future activity, increased 2.7 percent to an annual rate of 579,000 units, just below the 580,000 projected by economists.
A collapsing housing market in 2007 _ with mortgage defaults rising sharply and home prices and sales tumbling _ was a key driver of the recession. Recent reports on the sector have shown the housing market is beginning to recover, which is considered one of the primary drivers needed for renewed growth.
While investors have typically reacted positively to signs of improvement in housing and jobs reports, traders have shown little conviction since the latest reports were released. Dow Jones industrial average futures rose 2, or less than 0.1 percent, to 9,788. Standard & Poor's 500 index futures slipped 0.90, or 0.1 percent, to 1,062.60, while Nasdaq 100 index futures fell 2.50, or 0.2 percent, to 1,715.25.
Major indexes rose again Wednesday after a strong report on industrial production raised hopes the economy is strengthening. The Federal Reserve said the nation's industrial output jumped 0.8 percent in August, the second consecutive month of improvement.
The Dow jumped 108 points to reach another high for the year. It was the Dow's eighth day of gains in the last nine sessions.
Meanwhile, bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was flat at 3.48 percent compared with late Wednesday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.12 percent from 0.09 percent late Wednesday.
The dollar was mixed against other major currencies, while gold prices fell.
Overseas, Japan's Nikkei stock average rose 1.7 percent. In afternoon trading, Britain's FTSE 100 rose 0.5 percent, Germany's DAX index gained 0.3 percent, and France's CAC-40 rose 0.3 percent.
American Airlines raises $2.9bn
AMR, the parent of American Airlines, has raised $2.9bn (£1.8bn) of new financing to help it through the global downturn in air travel.
The group said $1bn of the total came from advanced sales of frequent flyer miles to Citigroup bank.
A further $1.6bn came from a sale and leaseback arrangement with General Electric's aviation division for planes it had already ordered.
The airline also said it would add capacity at key US airports.
"Today's announcement positions our company well to face today's industry challenges and allows us to remain focused on the future and on returning to profitability," said AMR chairman Gerard Arpey.
Reports also suggest that American Airlines is in discussions with Japan Airlines about taking a stake in the troubled Japanese carrie
AMR Raises $2.9 Billion, Shifts Flights to Boost Hubs (Update2)
By Mary Schlangenstein
Sept. 17 (Bloomberg) -- AMR Corp.’s American Airlines, the world’s second-largest carrier, said it raised $2.9 billion in cash and financing and will add flying at four U.S. hubs to focus on the most-profitable parts of its network.
AMR rose as much as 26 percent in early trading. Credit- card partner Citigroup Inc. paid $1 billion for an advance purchase of frequent-flier miles, and GE Capital Aviation Services provided $1.6 billion in aircraft financing commitments, American said today in a statement.
The cash will bolster liquidity for Fort Worth, Texas-based AMR before winter in the U.S., when travel typically slows and carriers tap their reserves to fund operations. The recession has sapped demand for higher-fare business travel, dragging the biggest U.S. carriers to losses.
“There are signs of improvement in the revenue environment and in consumer sentiment, but the winter season is still potentially a challenging one,” said Douglas Runte, managing director at Piper Jaffray & Co. in New York. “This is an impressive move by American.” He doesn’t rate AMR.
The shares jumped $1.66, or 23 percent, to $9.01 at 8:27 a.m. before regular New York Stock Exchange composite trading. AMR tumbled 31 percent this year through yesterday.
AMR had $3.3 billion in cash and short-term investments as of June 30, including $460 million dedicated to specific uses.
Hub Flights
American said flights will increase from the hubs at Chicago, New York, Dallas-Fort Worth and Miami, and some regional jets will get first-class cabins. The carrier also will purchase 22 70-seat Bombardier Inc. planes.
Operations will shrink at St. Louis and Raleigh/Durham, North Carolina, American said. The airline and regional unit American Eagle will drop 46 daily departures from St. Louis and 9 at Raleigh/Durham.
American said it’s still working to determine how many employees will be affected by the flight reductions in those two cities.
The GE Aviation Capital Services agreement will provide funding for Boeing Co. 737-800s American will add through 2011 by letting the airline sell the jets to the General Electric Co. unit and lease them back. The planes are 25 percent more fuel efficient than the MD-80s they will replace.
The new financing also includes $280 million in cash under a loan accord. American has received $225 million of that funding.
‘Vote of Confidence’
“The fact that we have been able to raise the money we need, both to sustain us through this economic contraction and to invest in our future, is an important vote of confidence by the capital markets and our business partners,” Chief Executive Gerard Arpey said today in a message to employees.
American is at least the fifth major U.S. carrier since 2008 to raise funds by selling frequent-flier points to credit- card issuers. The miles are distributed as awards for purchases.
Citigroup can use the miles in equal monthly installments from 2012 through 2016. The agreement also extends its co- branded credit-card program with American.
Oracle software sales miss target
Oracle CEO Larry Ellison delivers his keynote address at Oracle OpenWorld in San Francisco, California in this September 24, 2008 file photo. REUTERS/Robert Galbraith
By Jim Finkle and Clare Baldwin
BOSTON/SAN FRANCISCO (Reuters) - Oracle Corp's
New license sales at the world's No. 3 software maker fell 17 percent, steeper than the 4 percent to 14 percent decline that Oracle forecast three months ago.
Oracle's disappointing results released on Wednesday came on the heels of positive outlooks for the industry from No. 1 chipmaker Intel Corp
Analysts and technology executives had hoped that corporate spending, which all but collapsed during the downturn of the past year, was on the mend.
JMP Securities analyst Patrick Walravens said budgets for big-ticket technology projects have not started to open up even though consumer sales are improving.
"Just because investor sentiment is improving about the economy, that doesn't mean people are signing purchase orders," he said.
Oracle said that sales of its No. 1-selling database program were weak in Europe and Asia because companies there are not investing in business management software projects.
President Safra Catz said on a conference call that a decline in sales at Germany's SAP AG
of her company's database.
Investors focus closely on software sales because they are a forward indicator of Oracle's profit. Customers generally sign maintenance contracts when they buy software, which locks in predictable, recurring revenue.
"They are a big company. It's hard for them to get out of the way of macro conditions," said Caris & Co. analyst Curtis Shauger.
WORSENING SITUATION
The disappointing software sales number exacerbated a 2.3 percent decline in the shares during the regular session. They fell another 2.7 percent in after-hours trading.
Total revenue -- which includes software sales as well as fees for maintenance of previously purchase programs -- fell 5 percent to $5.05 billion in Oracle's first quarter ended August 31. That missed analysts' average forecast of $5.24 billion.
Still, the software giant run by billionaire Larry Ellison reported a fiscal first-quarter profit, excluding special items, of 30 cents per share, matching Wall Street expectations according to Reuters Estimates.
Its adjusted operating margin was 46 percent, the highest ever for its seasonally slow first quarter and up from 40 percent in the year-earlier period.
Catz said on the conference call she expects operating margins to keep rising on a year-on-year basis as Oracle continues to book a higher percentage of revenue from its maintenance business, which brings in higher margins.
The outlook for corporate spending is also not uniformly gloomy.
She said the company is seeing signs business is improving in Europe, although the software maker does not expect overall sales to grow this quarter.
The company forecast second-quarter new software sales in range between a 10 percent decline and flat when compared with a year earlier.
Catz also forecast profit, excluding items, of 35 cents to 36 cents per share, in line with the average analyst forecast of 36 cents on Reuters Estimates.
"We have some very good momentum starting the quarter. We remain very upbeat," Catz said.
Net income rose 4 percent to $1.12 billion, or 22 cents per share, from $1.08 million, or 21 cents per share, a year earlier.
The software maker's shares fell 2.7 percent to $21.53 in extended trading. They had fallen 53 cents to $22.13 in regular Nasdaq trade.
(Editing by Richard Chang, Leslie Gevirtz and Andre Grenon)
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Trading the News: Swiss National Bank Interest Rate Decision
June 2009 SNB Interest Rate Decision
| The central bank in Switzerland held borrowing costs at 0.25% in June and pledged to take “firm action” to stem the appreciation in the exchange rate, and policy makers may continue to intervene in the currency market as the outlook for growth and inflation remains bleak. SNB Governor Roth said that the economic “situation is gradually normalizing, although it remains very vulnerable,” and held a dovish outlook for price growth as they continued to see a risk for deflation. At the same time, board member Thomas Jordan said that the central bank will take steps to “prevent an appreciation of the Swiss franc against the euro,” but went onto say that the SNB has not set a “fixed threshold” for the exchange rate in an effort to ward off speculative trading as the global financial system remains fragile. | |
March 2009 SNB Interest Rate Decision
| The Swiss National Bank lowered the benchmark interest rate by 25bp in March to 0.25% from 0.50%, and aims to purchase corporate bonds along with foreign currencies in an effort to stem the appreciation in the exchange rate as the region faces its worst economic downturn in over a quarter century. The expansion in monetary policy marks the first currency intervention since 1992, and the central bank may take additional steps to soften the landing of the economy as policy makers anticipate the growth rate to contract 2.5-3.0% this year and see a risk for deflation. The central bank forecasts price growth to fall at an annual rate of 0.5% this year and project inflation to be “very close to zero” over the next two-years, with President Jean-Pierre Roth stating that “the effects of our interest rate cuts was neutralized by the permanent appreciation of the Swiss franc.” | |
AMR bolsters cash position, to order planes
An American Airlines Boeing Super 80 (foreground) prepares to take off from Chicago's O'Hare International Airport January 9, 2006. REUTERS/John Gress
ATLANTA (Reuters) - American Airlines parent AMR Corp
AMR said it had obtained $2.9 billion in additional liquidity and aircraft financing. That includes $1 billion from the advance sale of frequent flyer miles to Citigroup Inc
The company also said it got $1.6 billion in sale-leaseback financing commitments from GE for Boeing
The American Eagle division has signed a letter of intent with Bombardier Inc
The company also said it planned to add flights at key U.S. hubs.
(Reporting by Karen Jacobs; Editing by Lisa Von Ahn)
© 2009 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies. For additional information on other Reuters media services please visi
FedEx profit slides 53 per cent
But Memphis-based company meets analyst expectations and maintains its second-quarter outlook of 65 to 90 cents per share
Samantha Bomkamp
New York — The Associated Press Last updated on Thursday, Sep. 17, 2009 08:27AM EDT
FedEx (FDX-N78.20----%) said Thursday its first-quarter earnings fell 53 per cent – matching its prediction released last week – and warned its profit will remain weak through at least the end of the year.
But the world's second largest package delivery company, considered a bellwether of economic health, said it does see signs of improvement in the economy.
The Memphis, Tenn.-based company reported earnings of $181-million (U.S.), or 58 cents per share, compared with $384-million, or $1.23 per share, a year ago.
Revenue fell 20 per cent to about $8-billion.
Analysts predicted profit of 58 cents per share on revenue of $8.24-billion.
The company said its sales are continuing to be hurt by the slow economy, as people ship slower and less often. The quarter was also hurt by lower fuel surcharges – the fees it passes on to customers based on the price of fuel.
But FedEx said it was able to offset some of the shortfall by “vigilantly” cutting costs. Volume in International Priority – its most lucrative segment – was also better than expected.
FedEx Corp. reiterated its profit prediction of 65 to 90 cents per share for the second quarter ending in November. That's down from $1.23 a year ago.
New jobless claims drop unexpectedly to 545K
By CHRISTOPHER S. RUGABER (AP)
WASHINGTON — The number of newly laid-off workers seeking unemployment benefits fell last week to the lowest level since early July, evidence that job cuts are slowing.
The Labor Department said Thursday that initial claims for unemployment insurance dropped to a seasonally adjusted 545,000 from an upwardly revised 557,000 the previous week. Wall Street economists expected claims to rise by 5,000, according to Thomson Reuters.
The decline is the third in the past four weeks. The four-week average, which smooths out fluctuations, dropped 8,750 to 563,000. Despite the improvement, that's far above the 325,000 per week that is typical in a healthy economy.
The number of people claiming benefits for more than a week rose by 129,000 to a seasonally adjusted 6.2 million. The continuing claims data lags initial claims by one week.
When federal extended benefits are included, 9.01 million people received unemployment insurance in the week ending Aug. 29. That's down from 9.16 million the previous week. Congress has added up to 53 weeks of extended benefits on top of the 26 weeks provided by the states.
Thursday's report comes a day after the Federal Reserve said production by the nation's factories, mines and utilities increased for the second straight month in August, the latest sign the economy is recovering.
But the economy isn't improving fast enough to spur greater hiring. Fed Chairman Ben Bernanke on Tuesday said the recession is likely over, though he noted that the economy isn't likely to grow fast enough to lower unemployment anytime soon.
The jobless rate is widely expected to peak next year above 10 percent, up from its current 9.7 percent. Some analysts say that claims need to drop below 400,000 before the unemployment rate will start to decline.
More job cuts were announced this week. Drugmaker Eli Lilly & Co. said Monday that it will cut 5,500 jobs over the next two years, 14 percent of its work force, as it restructures the company into five business units.
Among the states, Washington had the largest increase in claims of 4,546, which it attributed to greater layoffs in the construction, public administration, and manufacturing industries. The next largest increases were in Pennsylvania, Massachusetts, North Carolina and Illinois. The state data lag initial claims by a week.
California had the largest drop in claims of 2,751. The next largest decreases were in New York, Wisconsin, Texas and New Jersey.
Plug-in Cars in Frankfurt: Revolution or False Dawn?
Renault is displaying four electric cars at the Frankfurt Auto Show, from the ultra-compact Twizy ZE Concept to the more practical Fluence ZE Concept.
The list of automotive brands showing electric or plug-in hybrids at the 2009 Frankfurt Auto Show reads like an auto industry A – Z: Audi, BMW, Citroën, Ford, Hyundai, Mercedes-Benz, Mini, Opel, Peugeot, Renault, Smart, Toyota, Volvo, Volkswagen…
Are plug-in cars the latest fashion for an industry needing to green-up its image? Or is the EV revolution off and running? The New York Times points to the Mercedes S-Class plug-in hybrid as evidence that “no manufacturer could avoid electricity’s surge.” But the paper also presents both sides of the debate on the staying power of electric power for cars.
Despite relatively high costs and limited driving range, plug in advocates believe Frankfurt represents a true shift toward electric driving. “This is not a false dawn," said Paul Scott of Plug In America. “This is the real thing.” The opposing view, as expressed by Willi Diez of the Institute for Automotive Research near Stuttgart, is that “some manufacturers are awakening expectations that they cannot fulfill in a reasonable time frame.”
In a bout of schizophrenia, Audi represents pro and con positions at the same time. Johan de Nysschen, president of Audi of America, last week said that no one is going to pay a $15,000 premium for an electric car, and yesterday his company unveiled the e-tron, a high-performance electric sports car which derives its power from four electric motors—two each at the front and rear axles. Renault showed similar ambiguity by releasing a lineup of four separate electric cars, each one more funky and futuristic than the next—while Thierry Koskas, director of Renault’s electric vehicle program, said, “We don’t just want people to buy an electric vehicle because it’s fashionable.”
The direction of oil prices and the ability of political leaders to enforce increasingly stringent carbon emissions laws may ultimately determine whether or not Frankfurt proves to be a turning point for plug-in cars, a flash in the pan, or something in between. But either way, the 2009 Frankfurt Auto Show, which opens to the public on Sept. 17 and runs through Sept. 27, gives a glimpse of what could be—if the environment, economics and technology align. Here’s a list of all 42 plug-in hybrids and electric vehicles—mostly concepts and prototypes—on display in Frankfurt, courtesy o
VW's Lamborghini expects to be profitable in 2009
FRANKFURT — Italian carmaker
expects to be profitable this year despite sales setbacks in the downturn — but any recovery for luxury autos in 2010 will be slow, Lamborghini chief executive Stephan Winkelmann told The Associated Press at the Frankfurt Auto Show.
Winkelmann said he expects a positive result despite despite worldwide deliveries nearly 40% lower during the first half. "The main focus is to remain profitable," he said at an event to introduce the Reventon roadster.
For the six-months ended in June, Lamborghini, which is part of Volkswagen , reported an operating profit of euro5.4 million ($8 million) on euro157 million in sales, or 825 cars delivered.
"The high-end luxury market is part of the total luxury market, and I don't see any increases in 2009," Winkelmann said.
"The luxury market is coming back, the timing is difficult to guess. (The downturn) will end for sure, but it will be slow. If a recovery starts in 2010, it will be slow."
Winkelmann said while the U.S. market, the company's biggest, saw sales fall more than 50% the first half of the year, developing markets were contributing nicely to the company's sales and earnings.
"China will be in the top five very soon," in terms of markets, Winkelmann said. "India and Russia will take some time, especially Russia with its long, cold winters."
Meanwhile the company will open a dealership in Sao Paulo, Brazil, later this year, making it the third in the region after two existing dealerships in Mexico.
The Reventon is a two-seater that looks like a bullet with doors that open upward. The 12-cylinder engine produces 670 horsepower and the car can go from zero to 60 miles per hour in 3.4 seconds, hitting a top speed of 205 miles per hour (330 kilometers per hour). The company said it will not build more than 20 and has sold most of them already.
"Even in times of crisis, we want to build cars that fascinate and make people dream," he said, calling the Reventon "astonishing."
Despite the company's concentration on "menacing power," for the Reventon it also aims to do something for the environment.
Winkelmann said Lamborghini hopes to reduce its cars' CO2 emissions 35% by the middle of the next decade and reduce the company's administration and production facilities' CO2 emissions 30% by the end of 2010.
The Bologna, Italy offices and factory will achieve that goal, with a 20% reduction through use of solar panels to generate electricity and 10% through better insulation, he said.
Can't afford Hawaii? Come to Chicago
More tourists are blowing into the Windy City this fall.
Chicago comes in just below Hawaii, ranking as the sixth most-booked travel destination for the rest of year, according to the 2009 Travel Leaders Fall Travel Trends Survey. That’s a four-spot jump from last year’s survey.
Chicago and Washington D.C. are among the hottest business and vacation spots. In the past two years, Chicago has moved up seven spots to #6 and Washington D.C. gained eight spots to land at #7.
This year’s survey of 452 Travel Leaders (formerly Carlson Wagonlit Travel Associates) from across the nation measured trends for both leisure and business travel. Overall bookings are down year over year, Travel Leaders says the outlook is better than a year ago. The survey, conducted August 4-August 28, 2009, includes information from 452 Travel Leaders agents, managers and owners.
“It could be that we’re seeing the light at the end of this long dark economic tunnel as more Travel Leaders are expressing optimism on their business outlook than just one year ago,” noted Roger E. Block, CTC, President of Travel Leaders Franchise Group, on the year over year increase to 59.5% from 51.1%. “While overall bookings are down year over year, recent analyses by Piper Jaffray and Citibank suggest the travel industry as a whole may have bottomed out.”
The 7th annual Fall Travel Trends Survey conducted by Travel Leaders reveals that it is hard, if not nearly impossible, to de-throne the wildly popular domestic and international travel options offered by Las Vegas and Caribbean Cruising even in a tough economic year. With the exchange rate more favorable than at this time in 2008, London has seen a resurgence in its popularity among international destinations while Chicago and Washington D.C. continue to move up in the rankings domestic destinations.
Here’s a look at the top ten domestic and international destinations for the remainder of 2009 based on actual bookings:
Top 10 Domestic Destinations for fall
1. Las Vegas, NV
2. Orlando, FL
3. New York City, NY
4. Honolulu, HI
5. Kahului (Maui), HI
6. Chicago, IL
7. Washington, DC
8. San Francisco, CA
10. Miami/Miami Beach, FL
Top 10 International Destinations fall
1. CRUISE- Caribbean
2. Cancun, Mexico
3. Riviera Maya, Mexico
4. CRUISE- Europe (Mediterranean)
5. Rome, Italy
6. London, England
8. Montego Bay, Jamaica
7. CRUISE- Mexico
9. Punta Cana, Dominican Republic
10. Playa del Carmen, Mexico
Citigroup Wants Feds to Sell off Their Stake in the Company
As the economic recovery kicks off, executives at Citigroup Inc. are working on a strategy to reduce the federal government’s 34-percent stake in the banking giant – a plan that would ultimately turn a profit for the taxpayers who funded the bailout in the first place.
The move follows a summer in which several other major banks, most recently Wells Fargo, have announced plans to return parts or all of the bailout funds they received, expressing unease with continued obligations to the government and the perception that they are wards of the state.
Washington officials confirmed that they’d had weekend talks with Citigroup and said they don’t have a problem with unloading some of their 7.7 billion shares in the New York firm, as long as it is able to raise offsetting capital, the Wall Street Journal reported.
It appears Citibank can provide that capital and then some, according to sources in the company. The current strategy involves an agreement by the government to sell
off some or most of its shares. Washington’s initial purchase of $25 billion in common stock has actually gained value, to the tune of nearly $7 billion. “Given the conversion and what’s happened to the stock price, it is likely that the government would make money on it,” Moshe Orenbuch, an analyst at Credit Suisse Group AG, told Bloomberg Tuesday.
Another strategy being discussed is for Citigroup – the nation’s third-largest bank – to offer several rounds of new public stock and use the proceeds to buy back the government’s shares of preferred stock. If that’s done, the government could make an even bigger profit – and Citibank could pull closer to its ultimate goal of paying back all the $52 billion in bailout aid it took from federal authorities.
News of Citigroup’s plan came on the heels of a major financial speech Monday by President Barack Obama announcement in which he announced that the markets were “beginning to return to normalcy” and federal regulators would scale back their intervention in the financial sector.
“While there continues to be a need for government involvement to stabilize the financial system, that necessity is waning,” the president told listeners on Wall Street.
Richard Parsons, Citigroup’s board chairman, told Bloomberg Television Monday that he had “every confidence that Citi will be able to exit the TARP program, and actually be able to give the American taxpayer a decent return.” He didn’t give a time frame for that exit, however.
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Citi to sell Smith Barney stake
Citigroup, which is among the country's hardest-hit banks, has been slimming down its sprawling structure and focusing more on traditional retail banking. -- PHOTO: AFP
NEW YORK - CITIGROUP Inc CEO Vikram Pandit confirmed on Wednesday that the bank plans to eventually sell the remaining stake in its Smith Barney brokerage venture to Morgan Stanley, which owns the other half.
Citigroup was widely expected to exit the joint venture, which was created in June, but Pandit's comments marked the first time the bank has publicly asserted its plans.
Citigroup and Morgan Stanley reached a deal in January to combine their brokerage and wealth management units, and the resulting joint venture was called Morgan Stanley Smith Barney.
Morgan Stanley, which holds a 51-per cent stake in the venture, paid US$2.7 billion (S$3.81 billion) to Citigroup as part of the deal. Morgan Stanley has the option to increase its stake after three years.
Citigroup, which is among the country's hardest-hit banks, has been slimming down its sprawling structure and focusing more on traditional retail banking.
At the beginning of the year, Citi split its operations into two divisions - Citicorp and Citi Holdings - in an effort to separate its traditional banking businesses form the riskier operations that have been the leading reason for its struggles.
Citigroup has slashed its assets by US$500 billion over the past 18 months, and Mr Pandit said he expects the bank's liquidity needs to lessen as it sheds even more.
'We're moving toward less capital intensive businesses as a whole,' Pandit said during the presentation.
To help Citigroup survive, the government pumped US$45 billion in bailout funds into the bank, US$25 billion of which was recently converted to a 34 per cent ownership stake.
Mr Pandit made it clear that the bank is looking to reduce its reliance on government support, saying the bank plans to repay the remaining US$20 billion preferred stake the government owns as soon as possible.
The Wall Street Journal reported earlier this week that Citi is considering a plan in which the Treasury Department would sell part of its holdings in the bank, while the bank would issue new shares to the public as part of a multibillion-dollar stock offering.
Mr Pandit said on Wednesday that the government's common stock holdings are not restricted and that it can choose to sell its stake in the bank at any time. -- AP
Boeing: China To Account For 40% Of Asia Orders In Next 20 Yrs
domestic passenger market would expand more rapidly than any other market, at 8.6% annually, between 2009 and 2028.
The Chicago-based company, by contrast, expects the North American market to increase by just 2.5% a year, and the intra-Europe market to rise 3.4% annually - as measured in revenue passenger kilometers, a major metric for gauging passenger revenue.
An annual growth of 6.9% was forecast for the Asia-Pacific region as a whole, by Boeing, which also specified that most probably the region will take-over North America as the world's largest air travel market in less than 10 years.
Due to the recent economic meltdown, some airlines have been forced to defer deliveries of new aircraft. Boeing recorded 100 deferrals, for the year 2008, mostly from North American customer
Budget carrier, which flies to eastern Europe from Luton and Manchester, is the latest casualty of the airline industry downtur
The end for SkyEurope? The Slovakia-based low-cost airline has filed for bankruptcy. Photograph: Radim Beznoska/Isifa/Getty Images
Budget carrier SkyEurope, which flies to eastern Europe from Luton and Manchester, became the latest casualty of the airline industry downturn today as it filed for bankruptcy.
The Slovakia-based airline suspended all flights immediately, disrupting travel plans for thousands of British passengers. SkyEurope, whose main airports are at Bratislava, Vienna and Prague, warned that a refund "may not be possible" for customers who booked with the airline directly. Abta, the British travel agents' association, said the collapse underlined the need for a compensation system for airline passengers.
"This airline failure in a tough economic climate, along with several others last year, highlights the need for urgent action by the government and EU to plug this gaping hole in customer financial protection," said Mark Tanzer, Abta chief executive, whose members are required by law to pay into a compensation scheme.
SkyEurope's demise came amid news that the world's leading airlines have slumped to a $2bn (£1.2bn) loss in the industry's most profitable trading period, as falling fares and rising oil prices wreak further damage on carriers' bottom lines.
The International Air Transport Association (Iata) said 54 airlines, including British Airways, Cathay Pacific and American Airlines, reported combined losses of $2bn in the three months to 30 June. The loss is more than double the deficit last year, when the credit crunch was beginning to squeeze business class bookings – the financial lifeblood of long-haul carriers.
Brian Pearce, Iata's chief economist, said: "Traditionally airlines make 50% of their profits in the second quarter. This suggests that losses this year are going to be pretty large." Iata is predicting a $9bn loss for the industry this year, driven by falling fares and burgeoning oil prices.
Ireland's national carrier, Aer Lingus, last month illustrated the dangers facing long-haul carriers from lower fares as it announced, first-half operating losses had widened from €23.4m (£20.6m) last year to €93m. And Australian carrier, Qantas, reported its worst performance in six years losing A$93m (£48m) in the second-half while BA lost £148m in the three months between April and June.
Pearce said tumbling yields, or the average revenue per passenger, had driven airlines into a deeper loss, exacerbated by an oil price that has risen from $45 a barrel in March to $70 now.
"Although there are some signs of passenger and freight numbers stabilising, if not picking up, average fares continue to plummet," said Pearce. Average yields fell 20% in the second quarter as Iata warned that capacity reductions were slowing down – signalling that competition will remain intense on some routes, holding down fares. "Elimination of excess capacity will be the key to stabilising revenues as well as volumes," said Iata. Passenger numbers are showing signs of a recovery, with traffic falling by just 2.9% in July compared with declines of 7.2% in June and 9.3% in May. Iata believes that more planes need to be grounded, which would lessens competition on some routes and therefore push up fares and revenues.
Airlines could lose US$11b
By Karamjit Kaur, Aviation Correspondent
Mr Bisignani who announced the latest figures in a media teleconference said: 'The optimism in the global economy has seen passenger and freight volumes rise, but that is the only bright spot. -- PHOTO: REUTERS
FROM parking planes to axing flights and staff, airlines have done it all, and yet are in worse shape today than before.
The International Air Transport Association (Iata) has warned that industry losses for the year could hit US$11 billion.
This is US$2 billion more than the last forecast in June.
Revealing its latest estimates on Tuesday, the Geneva-based body which represents 230 carriers, said the main villains are rising fuel prices and 'exceptionally weak yields.'
The current situation is even more bleak than the aftermath of the Sept 11, 2001 terrorist attacks in the United States which led to demand for air travel nosediving, said Iata chief executive officer and director-general Giovanni Bisignani.
Combined estimated losses for 2008 and 2009 are US27.8 billion, compared to US$24.3 billion that the industry lost in 2001 and 2002.
Mr Bisignani who announced the latest figures in a media teleconference said: 'The optimism in the global economy has seen passenger and freight volumes rise, but that is the only bright spot.
'Rising costs and falling yields have squeezed airline cash flows.....The situation is critical.'
Global passenger traffic is expected to shrink 4 per cent and cargo by 14 per cent, compared with 2008.
Yields for the passenger side of the business could drop 12 per cent year-on-year, while total revenues are set to fall by 15 per cent to US$455 billion.
The crisis has hit top-tier carriers like Singapore Airlines especially hard.
With travellers downgrading from premium to economy class, and businesses cutting costs, such airlines that depend on first and business class traffic for about 40 per cent of their total revenues, are having a tough time.
Cut-throat competition is also forcing many to drop fares to lure travellers.
U.S. to Shelve Nuclear-Missile Shield
Defense Plans for Poland, Czech Republic to Be Dropped as Iran Rocket Threat Downgraded; Moscow Likely to Welcome Move
By PETER SPIEGEL
WASHINGTON -- The White House will shelve Bush administration plans to build a missile-defense system in Poland and the Czech Republic, according to people familiar with the matter, a move likely to cheer Moscow and roil the security debate in Europe.
The U.S. will base its decision on a determination that Iran's long-range missile program has not progressed as rapidly as previously estimated, reducing the threat to the continental U.S. and major European capitals, according to current and former U.S. officials.
The findings, expected to be completed as early as next week following a 60-day review ordered by President Barack Obama, would be a major reversal from the Bush administration, which pushed aggressively to begin construction of the Eastern European system before leaving office in January.
The Bush administration proposed the European-based system to counter the perceived threat of Iran developing a nuclear weapon that could be placed atop its increasingly sophisticated missiles. There is widespread disagreement over the progress of Iran's nuclear program toward developing such a weapon, but miniaturizing nuclear weapons for use on long-range missiles is one of the most difficult technological hurdles for an aspiring nuclear nation.
The Bush plan infuriated the Kremlin, which argued the system was a potential threat to its own intercontinental ballistic missiles. U.S. officials repeatedly insisted the location and limited scale of the system -- a radar site in the Czech Republic and 10 interceptor missiles in Poland -- posed no threat to Russian strategic arms.
The Obama administration's assessment concludes that U.S. allies in Europe, including members of the North Atlantic Treaty Organization, face a more immediate threat from Iran's short- and medium-range missiles and will order a shift towards the development of regional missile defenses for the Continent, according to people familiar with the matter. Such systems would be far less controversial.
Critics of the shift are bound to view it as a gesture to win Russian cooperation with U.S.-led efforts to seek new economic sanctions on Iran if Tehran doesn't abandon its nuclear program. Russia, a permanent member of the U.N. Security Council, has opposed efforts to impose fresh sanctions on Tehran.
Security Council members, which include the U.S. and Russia, will meet with Iranian negotiators on Oct. 1 to discuss Iran's nuclear program.
Current and former U.S. officials briefed on the assessment's findings said the administration was expected to leave open the option of restarting the Polish and Czech system if Iran makes advances in its long-range missiles in the future.
Mr. Obama phoned the Czech prime minister to discuss a controversial missile defense system, according to the Associated Press. Government spokesman Roman Prorok declined Thursday to detail what Mr. Obama told Prime Minister Jan Fischer, saying only that Mr. Fischer later informed Czech President Vaclav Klaus.
The Czech national news agency CTK, citing a diplomatic source it didn't identify, reported that Mr. Obama indicated the U.S. intends to "withdraw from its missile defense project in the Czech Republic and Poland."
But the decision to shelve the defense system is all but certain to raise alarms in Eastern Europe, where officials have expressed concerns that the White House's effort to "reset" relations with Moscow would come at the expense of U.S. allies in the former Soviet bloc. "The Poles are nervous," said a senior U.S. military official.
Polish officials said Thursday they had no information on whether Mr. Obama also phoned that country's top leaders, the Associated Press reported.
Earlier, a Polish official said his government wouldn't "speculate" on administration decisions regarding missile defense, but said "we expect the U.S. will abide by its commitments" to cooperate with Poland militarily in areas beyond the missile-defense program.
Last week, Russian Foreign Minister Sergei Lavrov said he expected the Obama administration to drop the missile-defense plans. He said that Moscow wouldn't view the move as a concession but rather a reversal of a mistaken Bush-era policy.
Still, the decision is likely to be seen in Russia as a victory for the Kremlin. Russian President Dmitry Medvedev will meet with Mr. Obama at next week's meetings of the U.N. General Assembly and Group of 20 industrialized and developing nations.
Although a center-right government in Prague supported the Bush missile-defense plan when it was first proposed, the Czech Republic is now run by a caretaker government. A Czech official said his government was concerned an announcement by the White House on the missile-defense program could influence upcoming elections and has urged a delay. But the Obama administration has decided to keep to its original timetable.
European analysts said the administration would be forced to work hard to convince both sides the decision wasn't made to curry favor with Moscow and, instead, relied only on the program's technical merits and analysis of Iran's missile capabilities.
"There are two audiences: the Russians and the various European countries," said Sarah Mendelson, a Russia expert at the Center for Strategic and International Studies. "The task is: How do they cut through the conspiracy theories in Moscow?"
The Obama administration has been careful to characterize its review as a technical assessment of the threat posed by the Iranian regime, as well as the costs and capabilities of a ground-based antimissile system to complement the two already operating in Alaska and central California. Those West Coast sites are meant to defend against North Korean missiles.
The administration has also debated offering Poland and the Czech Republic alternative programs to reassure the two NATO members that the U.S. remains committed to their defense.
Poland, in particular, has lobbied the White House to deploy Patriot missile batteries -- the U.S. Army's primary battlefield missile-defense system -- manned by American troops as an alternative.
Although Polish officials supported the Bush plan, U.S. officials said they had indicated their primary desire was getting U.S. military personnel on Polish soil. Gen. Carter Hamm, commander of U.S. Army forces in Europe, said Washington has begun talks with Polish officials about starting to rotate Europe-based American Patriot units into Poland for month-long training tours as a first step toward a more permanent presence.
"My position has been: Let's get started as soon as we can with the training rotations, while the longer-term stationing...is decided between the two governments," Gen. Hamm said in an interview.
For several years, the Pentagon's Missile Defense Agency has been pushing for breaking ground in Poland and the Czech Republic, arguing that construction must begin so the system would be in place to counter Tehran's emerging long-range-missile program, which intelligence assessments determined would produce an effective rocket by about 2015.
But in recent months, several prominent experts have questioned that timetable. A study by Russian and U.S. scientists published in May by the East-West Institute, an international think tank, downplayed the progress of Iran's long-range-missile program. In addition, Gen. James Cartwright, the vice chairman of the Joint Chiefs of Staff and an expert in missile defense and space-based weapons, said in a speech last month that long-range capabilities of both Iran and North Korea "are not there yet."
"We believed that the emergence of the intercontinental ballistic missile would come much faster than it did," Gen. Cartwright said. "The reality is, it has not come as fast as we thought it would come."
It is not an assessment that is shared universally. Eric Edelman, who oversaw missile-defense issues at the Pentagon as undersecretary of defense for policy in the Bush administration, said intelligence reports he reviewed were more troubling.
"Maybe something really dramatic changed between Jan. 16 and now in terms of what the Iranians are doing with their missile system, but I don't think so," Mr. Edelman said, referring to his last day in office.
There is far more consensus on Iran's ability to develop its short- and medium-range missiles, and the administration review is expected to recommend a shift in focus toward European defenses against those threats. Such a program would be developed closely with NATO.
Electric cars shine at Frankfurt Motor Show
Frankfurt's 63rd motor show is a compact version of the last event two years ago that will be jumpstarted by electric autos as the sector searches for a future without state lifelines.
The event, known by its initials IAA, opens to the media Tuesday and the public on Thursday, but this year there are fewer participants and visitors but more world premieres, the German VDA auto federation said this week.
"Innovation is the way out of the crisis" that global automakers have been in since last year, said Matthias Wissmann, head of the German VDA auto federation that organises the show in alternance with one in Paris.
A total of 781 auto and auto parts manufacturers from 30 countries are to present around 100 new models, VDA said Monday.
The sector is abuzz about electric vehicles (EVs) being developed by major auto makers, and cross-border cooperation is another hot topic of discussion.
In the background, western European car sales have fallen by 11 percent in the first half of 2009 according to the European Automobile Manufacturers' Association, despite hefty government subsidy schemes.
Major markets in Germany, Britain, Italy, France and Spain have been spared the worst owing to "cash-for-clunker" programmes that encouraged drivers to scrap old cars for new ones, but the boost they gave will peter out in 2010.
In terms of visitors, the Frankfurt show expects around 750,000 people to turn up, compared with almost one million two years ago.
"There will be claims that the end of the crisis is in sight, but in truth the sector is in grave danger," warned the Sueddeutsche Zeitung (SZ) newspaper as key Japanese brands like Honda and Mitsubishi bowed out of the show.
Wissmann nonetheless insisted that the number of new items would see this year's edition "gain in quality" despite the lower numbers.
Many manufacturers plan to present EVs or hybrid vehicles that run on petrol and electricity.
Among the eagerly awaited roll-outs are one from BMW's Mini unit and a four-auto range from city cars to utility models by Renault-Nissan.
"Electric vehicles will be seen on almost every stand," German auto expert Ferdinand Dudenhoeffer forecast.
Fuel-cell and hybrid vehicles from Mercedes, Peugeot and Toyota are getting polished up for opening day as well.
Sector experts will be looking meanwhile for automaker plans to boost joint efforts in a bid to bring down development costs, with former and current rivals possibly unveiling alliances.
Among the flashy high-end premieres, Audi, BMW and Mercedes have new models ready to roar, not to mention Ferrari's latest rocket, the 458 Italia.
Some highlights
• Speaking publicly for the first time at the Frankfurt Auto Show, Porsche's new president and CEO, Michael Macht, revealed that Porsche is working hard on an electric-powered sports car that would meet the high standards of the Porsche brand.
"I am also convinced that one day Porsche will have an electric sports car in its line-up," said Macht at the company's press conference today. While he cautioned that so far the available battery technology is not "sufficient to meet Porsche's strict requirements," he said "our engineers are already working hard on this challenge."
"An electric sports car would therefore only make sense for Porsche if it offers performance and a cruising range similar to that of current sports cars in the market," he said. "We are therefore taking the first step in this direction with a full hybrid - in the Cayenne, the Panamera and maybe in the not too distant future also in a racing car or a production 911. Why not?"
Macht pointed out that Porsche has a long legacy with hybrids as it was 109 years ago that Professor Ferdinand Porsche built the first fully functioning car with hybrid technology.
• Toyota reveals Prius plug-in Hybrid. Based on the third-generation Prius, the PHV Concept expands Toyota's Hybrid Synergy Drive technology, utilizing first generation lithium-ion battery technology and enabling electric operation at higher speeds and longer distances than conventional hybrids. When fully charged, the vehicle is targeted to achieve an electric-only range of approximately 20 km and will be capable of achieving highway speeds in electric-only mode. For longer distances, the PHV concept reverts to "hybrid mode" and operates like a regular Prius. This ability to utilize all-electric power for short trips or hybrid power for longer drives alleviates the issue of limited cruising range encountered with pure electric vehicles.
Beginning in late 2009, Toyota will begin global delivery of 500 Prius PHV vehicles. This program will allow Toyota to gather real world driving feedback and understand customer expectations for plug-in technology. In addition, the program will allow evaluation of the first generation lithium-ion battery's durability, reliability and performance.
"This is an important next step in the world's evolution of hybrid technology," said Stephen Beatty, Managing Director, Toyota Canada Inc.
• Ford will launch the all-new, 7-seat C-MAX in North America in late 2011 as a "whitespace" vehicle. C-MAX is the first of a new generation of Ford global C-cars scheduled for introduction during the next several years; lineup also will include next-generation Ford Focus.
• Audi presented the e-tron, a high-performance sports car with a purely electric drive system. Four motors – two each at the front and rear axles – drive the wheels, making the concept car a true quattro. Producing 313 hp and 3,319 lb-ft) of torque, the two-seater accelerates from 0 to 100 km/h in 4.8 seconds, and from 60 to 120 km/h in 4.1 seconds. The lithium-ion battery provides a truly useable energy content of 42.4 kilowatt hours to enable a range of approximately 248 kilometers.
• Lamborghini presented the Reventón Roadster, a sports car "of breathtaking fascination, menacing power and uncompromising performance." The 6.5 liter twelve-cylinder catapults the Roadster from 0 to 100 km/h in 3.4 seconds and onwards to a top speed of 330 km/h. The open-top Reventón is not only one of the fastest, but also one of the most exclusive cars in the world as Lamborghini has limited the series.
• MINI reveals a Roadster Concept in which it hopes to set "a new trend for individual mobility borne out by the brand." The MINI Roadster Concept is clearly recognizable at very first sight as a MINI. At the same time, with its two seats, a tight-fitting soft roof and innovative rear-end design, the new model opens up new perspective for the compact roadster segment.
• Audi revealed the Audi R8 Spyder 5.2 FSI quattro. The car has a lightweight cloth top, carbon fiber body parts, mid-mounted V10 engine producing 525 hp with zero to 100 km/h in 4.1 seconds on its way to a top speed of 313 km/h along with the other technologies we've come to expect from Audi, such as Audi Space Frame (ASF), quattro permanent all-wheel drive, full-LED headlights and with an innovative seatbelt microphone available as an option.
• Aston Martin reveals four-door Rapide. Four 'swan wing' doors provide access to sports seats both front and rear giving occupants with ample accommodation. A 301-litre luggage compartment affords generous space for belongings for all four passengers whether they be sports bags or sets of skis. Rapide features a hand-built 6.0-litre V12 engine producing 470 bhp with peak power being delivered at 6,000 rpm and 443 lb.-ft. of peak torque at 5000 rpm. A specifically tuned six-speed Touchtronic 2 automatic transmission features as standard, allowing the driver to change gear automatically or manually via the steering column-mounted magnesium paddles.
• The Abarth 695 "Tributo Ferrari" makes its world debut at Frankfurt. This new performance version of the Abarth 500 confirms the link between Abarth and Ferrari based on shared values that include a passion for performance, a racing soul, attention to detail and Italian style.
• The Lexus LF-Ch compact hybrid concept made its world premiere. The LF-Ch concept was designed by Calty Design Research Inc., Toyota's North American-based research and design center located in Newport Beach, Calif. "The LF-Ch concept is the next evolution of the compact luxury vehicle," said Kevin Hunter, president of Calty. "We were able to create a beautifully designed hybrid with a deep sense of mystery and intrigue." It will also be on display for the first time in North America at the 2009 Los Angeles Auto Show in December.
Click here to find out more! Judge rejects Bank of America settlement in Merrill Lynch bonus case
The bank was ready to pay a $33-million fine to settle the case, in which the Securities and Exchange Commission alleged that BofA misled shareholders over the bonuses. A trial is ordered for February
Pedestrians walks outside a Bank of America branch in New York. A federal judge rejected a deal in which the bank would have paid $33 million to settle charges that it misled shareholders about bonuses being paid to Merrill Lynch executives. (Daniel Acker / Bloomberg / September 14, 2009)
Reporting from Los Angeles and New York - In a rare move, a federal judge threw out a deal in which Bank of America Corp. would have paid $33 million to settle charges that it misled shareholders about $3.6 billion in bonuses being paid to Merrill Lynch & Co. executives, contending that the punishment was too light.
U.S. District Judge Jed Rakoff in New York also lashed out at federal regulators, saying they didn't dig deeply enough to determine whether Bank of America executives intentionally set out to deceive shareholders about plans to pay bonuses to employees of Merrill Lynch last year, when the bank was acquiring the Wall Street firm.
Rakoff's ruling Monday was another embarrassment for the Securities and Exchange Commission, which has come under fire for failing to heed repeated warnings about Bernard Madoff's Ponzi scheme, and could put more pressure on the agency to toughen its stance on corporate misconduct.
By casting a harsh spotlight on the SEC's willingness to settle cases without proving allegations in court or forcing companies to admit wrongdoing, the ruling could embolden other judges to view such settlements critically, legal experts said.
"The SEC can no longer count that other federal judges will be rubber stamps," said John Coffee, a Columbia University law professor. "The judges are going to take a closer look."
The judge issued his decision as President Obama marked the one-year anniversary of the collapse of Lehman Bros. by speaking in New York to push for his financial regulatory overhaul, including measures to rein in executive pay.
"We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses," Obama said in remarks at historic Federal Hall across from the New York Stock Exchange.
The government alleged that Bank of America deceived shareholders into believing that Merrill Lynch, staggering from financial losses, would not pay year-end 2008 bonuses. In fact, the SEC says, the bank had already approved $5.8 billion in Merrill bonuses, of which the brokerage eventually handed out $3.6 billion.
In his 12-page ruling, Rakoff criticized the $33-million payment, saying that if Bank of America intentionally deceived shareholders, "$33 million is a trivial penalty for a false statement that materially infected a multibillion-dollar merger."
He also questioned why Bank of America shareholders should foot the bill for misdeeds approved by executives. Regulators say shareholders weren't aware of the bonuses before voting to approve the deal to acquire Merrill late last year, according to regulators.
"The notion that Bank of America shareholders, having been lied to blatantly in connection with the multibillion-dollar purchase of a huge, nearly bankrupt company, need to lose another $33 million of their money . . . is absurd," Rakoff wrote.
"The SEC gets to claim that it is exposing wrongdoing on the part of the Bank of America in a high-profile merger," the judge wrote. "The bank's management gets to claim that they have been coerced into an onerous settlement by overzealous regulators. And all this is done at the expense, not only of the shareholders, but also of the truth."
Rakoff had signaled in August that he was unhappy with the settlement. In formally rejecting it Monday, the judge ordered that a trial in the civil case be held in February. The government and the bank issued statements saying they were contemplating their next moves.
"We believe the proposed settlement properly balanced all of the relevant considerations," the SEC said. "We will carefully review the court's most recent order."
Bank of America repeated its position that "proper disclosure was made to shareholders about Merrill bonuses. We are prepared to prove that through litigation. We will consider all our legal options."
Before taking the case to trial, the government could propose another settlement with harsher penalties. It also could drop the case, but such a move is considered unlikely given the criticism it would provoke.
Legal analysts said perhaps the most surprising aspect of Rakoff's decision was that it came at all. Settlements with federal regulators are almost always greenlighted by judges.
"This is an unprecedented judicial rebuke of the agency," said Jacob Frenkel, a partner at law firm Shulman Rogers Gandal Pordy & Ecker in Potomac, Md., and a former attorney in the SEC's enforcement unit. "I think it telegraphs a new level of scrutiny of settlements."
One option for regulators, Frenkel said, would be to charge individual BofA executives with wrongdoing and seek financial penalties from them rather than from the company itself. Presumably, those penalties would be paid by liability insurance that companies typically carry on their top executives.
Barry Barbash, a partner at Wilkie Farr & Gallagher in Washington and a former head of the SEC's investment-management division, said he couldn't recall another case of a judge dealing such a smack-down to the agency.
"It may be a sign of the times," Barbash said, referring to the taint on the SEC from the Madoff debacle. "Judges read the newspapers too."
Defenders of the SEC say it's chronically underfunded and must rely on settlements because it has the resources to pursue only a handful of cases.
But if regulators respond to Rakoff's decision -- and similar rulings that might follow -- by taking more cases to court instead of settling, the agency will ultimately improve its credibility, Coffee of New York University predicted.w
Wow! Volkswagen Unveils The 158 MPG Hybrid
German car maker, Volkswagen, unveiled several new models at this week's Frankfurt Auto Show. The one drawing the most attention being the L1 concept, designed to go 100 kilometers on one liter of fuel.
The new L1 does fall short of its goal, requiring 1.49 liters of diesel to cover the 100 kilometer distance, and the equivalent of 158 mpg, reports MotorTrend.com. Wow...
It's a bullet-shaped vehicle, made with a carbon fiber-reinforced body, all weighing in at an estimated 650 pounds, thanks to aluminum brakes, carbon-fiber wheels, titanium hubs and ceramic bearings.
Despite the advancements, you're not going to be trekking cross-country without refueling. Why? Because it's fuel tank is just 2.6 gallons, so it won't break your pockets either. But, you'll be able to travel around 416 miles.
The vehicle is small too. It seats just two people, a driver and passenger seat right behind it. The interior is just as futuristic as outside looks. It doesn't have traditional doors. Instead, it has a hinged canopy that slides back to make your entrance.
There are also camera-based rearview OLEDs, offering a 180 degree view behind the car, while the speedometer and other instruments are all virtual.
Power-wise, you might not want to enter it in a drag race, because it takes 14.3 seconds to get to 62 mph. But, top speed is a reasonable 99 mph. It boasts a 0.8-liter version of its TDI engine with only two cylinders. When driving, you can select between Eco producing 27 horsepower, or Sport pushing out 52 horsepower.
While is all sounds good, this baby isn't expect to hit the production line until around 2013.
