WSF Headline Roundup - 12/24/08 - $AXP getting TARP access; Lehman Collapse hits muni swap market; SEC backs LCH/Clearnet; Fortis $412M loss; Micron loss; SBUX may not match 401K contributions

• American Express Will Get $3.39 Billion in TARP Funds
• Lehman Roils Municipal Swap Market as Collapse Forces Payments
• SEC Backs Exemptions for LCH.Clearnet on CDS
• Fortis Lost $412 Million After Belgian Court Decision
• Oil Trades Below $39 on Forecasts U.S. Supply Rose a Third Week
• Wachovia, National City holders approve takeovers
• Notebook Computers Outpace Desktop PCs
• Micron Loss Doubles as Chip Demand Ebbs; Shares Fall
• Toyota’s President May Step Down; Toyoda in Line, People Say
• Washington Post, Baltimore Sun to Begin Content-Sharing Deal
• Retail Group Lowers Holiday Forecast After Sales Fall
• Wal-Mart Will Pay Up to $640 Million in Settlement
• US retail group wants national sales tax holidays
• Starbucks may not match 401(k) contributions: report

American Express Will Get $3.39 Billion in TARP Funds - Bloomberg

American Express Co., the credit- card company that’s converting into a bank, will get $3.39 billion of fresh capital from the U.S. rescue fund to ensure its survival as the recession heads into a second year. 

American Express joins more than 190 regional banks, commercial lenders, insurers and card issuers seeking at least $75 billion from the second phase of the Treasury’s bailout plan for financial firms. Faced with rising defaults by cardholders, the New York-based firm won Federal Reserve approval to become a commercial bank last month and announced in a statement today it gained access to the $700 billion Troubled Asset Relief Program. 

“The ability to avail themselves of government funding takes the dire scenarios off the table,” said Richard Shane, an analyst at Jefferies & Co. in San Francisco. Shane, who initiated the shares with an “underperform” rating in November, said today he expects “significant losses” in the loan portfolio....

Lehman Roils Municipal Swap Market as Collapse Forces Payments - Bloomberg

Six years after embarking on an effort to lower borrowing costs using derivatives, New York is watching those savings evaporate. 

The state says it paid bankrupt Lehman Brothers Holdings Inc. and other Wall Street banks at least $75.9 million since March to end interest-rate swap contracts that were supposed to lock in below-market rates. That money and the costs of issuing new debt to replace bonds linked to swaps gone awry are eroding the $207 million in savings New York budget officials say the derivatives produced since 2002. 

New York isn’t alone. Lehman’s bankruptcy filing on Sept. 15 triggered the termination of similar contracts across the country, forcing state and local governments and other borrowers in the $2.67 trillion municipal-debt market to buy out the agreements. They suddenly find themselves making unexpected payments at a time when their revenue is already under pressure from the worst recession since World War II.,,,,

SEC Backs Exemptions for LCH.Clearnet on CDS - Wall Street Journal

The Securities and Exchange Commission approved temporary exemptions allowing clearing house LCH.Clearnet Group Ltd. to operate as a central counterparty for credit default swaps.

SEC Chairman Christopher Cox said the move would help protect investors through regulatory oversight but said "more needs to be done in this area legislatively." Clearing firms work to make sure that trades across various markets go smoothly and that risk across the system is managed.

A number of firms are jockeying to get approval to launch clearinghouses for CDS, privately traded contracts that require one party to pay another if a third party defaults. Critics complain enough isn't known about who is buying and selling the swaps and whether they have the financial strength to cover their commitments.....

Fortis Lost $412 Million After Belgian Court Decision - Bloomberg

Fortis, the financial-services firm that’s being broken up after running out of funding, lost 295 million euros ($412 million) in currency trades after a Belgian court halted the sale of units to BNP Paribas SA. 

On Dec. 8, Fortis bought dollars and pounds in preparation for the sale to BNP Paribas, currency that it was forced to sell at a loss after the transaction was delayed by a Brussels court on Dec. 12, Fortis said in a statement today. 

“A completion of the transactions, with BNP Paribas and the Belgian government, may take some time and it would be irresponsible to keep up these kinds of currency positions without knowing whether you’re going to need them,” Omara Nahar, a spokeswoman for Fortis in the Dutch city of Utrecht, said in an interview...

Oil Trades Below $39 on Forecasts U.S. Supply Rose a Third Week - Bloomberg

Crude oil declined below $39 a barrel in New York before a report forecast to show that U.S. inventories accumulated for a third week as demand ebbs. 

Crude stockpiles probably increased 500,000 barrels in the week ended Dec. 19 from 321.3 million the week before, 12th gain in 13 weeks, according a Bloomberg survey before today’s Energy Department report. Idemitsu Kosan Co., Japan’s second-biggest refiner, will cut crude processing next quarter because of weak demand in the third-largest oil-consuming nation. Last week, OPEC announced a record production cut to counter declining consumption. 

“There isn’t a lot of upside for oil prices, stocks are rising and refineries are not necessarily buying oil,” said Peter Luxton, an energy analyst at Informa Global Markets. “But the big move down is probably over for now as OPEC will begin to rein in production.”....

Wachovia, National City holders approve takeovers - Reuters

Wachovia Corp's (WB.N) shareholders approved the bank's takeover by rival Wells Fargo & Co (WFC.N) on Tuesday, bringing one of the largest mergers stemming from the financial crisis near to completion.

Separately, regional bank PNC Financial Services Group Inc (PNC.N) said its planned takeover of National City Corp (NCC.N) was approved by shareholders of both banks and is expected to close by Dec. 31.

National City shares were up 5 cents at $1.66 in afternoon trading, while Wachovia fell 8 cents at $5.37, both on the New York Stock Exchange. Wells Fargo dropped 20 cents at $27.22, and PNC added 39 cents to $43.07, also on the NYSE.....

Notebook Computers Outpace Desktop PCs - Wall Street Journal

Shipments of notebook computers outpaced desktops for the first time in the third quarter, due largely to ballooning sales of low-cost, streamlined machines known as netbooks.

World-wide shipments of notebook computers rose nearly 40% from last year to 38.6 million units as desktop shipments fell 1.3% to 38.5 million units, technology-research firm iSuppli reported Tuesday.

The growth was a bright spot amid bleak electronics sales. But it was also the latest indication that netbooks -- which have little processing power, screens between nine- and 12-inches wide diagonally and typically cost less than $500 -- may be chipping away at sales of higher-profit computers.....

Micron Loss Doubles as Chip Demand Ebbs; Shares Fall - Bloomberg

Micron Technology Inc., the top U.S. producer of memory chips, posted a wider first-quarter loss than analysts anticipated after falling prices forced it to write down the value of its inventory. The shares plunged in late trading. 

The net loss more than doubled to $706 million, or 91 cents a share, Boise, Idaho-based Micron said today. Analysts surveyed by Bloomberg had estimated a loss of 45 cents a share. Sales sank 8.7 percent to $1.4 billion in the period, which ended Dec. 4. 

The report marks Micron’s eighth consecutive quarterly loss as chipmakers battle falling prices and shrinking demand in the recession. The company wrote down $369 million in inventory that had lost value. Even today’s rock-bottom prices for dynamic random access memory, the main memory in personal computers, are failing to entice buyers, said Gary Hsueh, an analyst at Oppenheimer & Co. in San Francisco.....

Toyota’s President May Step Down; Toyoda in Line, People Say - Bloomberg

Toyota Motor Corp. President Katsuaki Watanabe may step down next year and be succeeded by Akio Toyoda, grandson of the founder of the largest Asian automaker, people familiar with the matter said. 

Watanabe’s exit is intended in part to take responsibility for Toyota’s forecast this week for a 150 billion yen ($1.7 billion) operating loss for the year ending in March, said one of the people, who asked not to be identified because a decision hasn’t been announced. 

“Akio is the natural successor, a likelihood that’s been speculated for years, even before Watanabe made it to the top spot,” said John Shook, a University of Michigan management instructor and former Toyota manager.....

Washington Post, Baltimore Sun to Begin Content-Sharing Deal - Washington Post

Editors from The Washington Post and Baltimore Sun said yesterday that they have agreed to begin sharing certain stories, photos and other news content. 

The deal comes as both newspapers, like the rest of the industry, struggle to retain readers and cut costs as the economics of the business shift. 

The agreement takes effect Jan. 1 and primarily covers day-to-day news about Maryland and sports. Also, the papers can draw on one another's national, international and feature stories contributed to the Los Angeles Times-Washington Post News Service. Previously, the papers were not allowed to use one another's offerings on the wire service......

Retail Group Lowers Holiday Forecast After Sales Fall - Bloomberg

U.S. holiday sales will fall more than forecast after recession fears kept shoppers from spending in the last weekend before Christmas, a retail trade group said. 

Same-store sales in November and December may drop as much as 2 percent, the International Council of Shopping Centers said today, more than the previously projected 1 percent decline. That would make it the worst Christmas sales season in at least four decades. 

As U.S. shoppers have grappled with a recession, tightening credit and growing unemployment, retailers including Macy’s Inc. and AnnTaylor Stores Corp. have responded with steepened markdowns. That may erode profit margins in the fourth quarter, the most important of the year for retailers.....

Wal-Mart Will Pay Up to $640 Million in Settlement - Bloomberg

Wal-Mart Stores Inc., the world’s largest retailer, will pay as much as $640 million to settle 63 federal and state class actions claiming the company cheated hourly workers and forced them to work through breaks. 

Today’s settlement ends actions pending in most state courts and in federal court in Nevada, and occurs two weeks after a Dec. 9 agreement in Minnesota. The company will record an after-tax fourth-quarter expense of $250 million, or about 6 cents a share. 

The agreement comes five weeks before Mike Duke takes over from outgoing Chief Executive Officer H. Lee Scott, who has overseen a sales resurgence and sought to burnish Wal-Mart’s image among environmentalists, politicians and labor groups. Wal-Mart may pay from $352 million to $640 million, potentially less than 0.1 percent of its $378.8 billion in revenue in 2008.....

US retail group wants national sales tax holidays - Reuters

A U.S. retail trade group asked President-elect Barack Obama on Tuesday to add a series of temporary sales tax holidays to an economic stimulus package as a way to revive consumer spending.

The National Retail Federation called for three 10-day periods of sales tax-free shopping in March, July and October 2009, which it said would save consumers almost $20 billion, or $175 for the average family.

Under the NRF's proposal, the federal government would reimburse states for the lost tax revenue. State sales tax rates range from 2.9 percent to 7.25 percent, the group said.....

Starbucks may not match 401(k) contributions: report - Reuters

Coffee shop chain Starbucks Corp has informed employees it won't guarantee matching contributions to their 401(k) retirement plans next year, the Wall Street Journal reported on Tuesday, citing a letter from the company.

According to the letter sent last week, Starbucks said it will switch to a fully discretionary match program from a fixed employer match as of January 1.

Company officials were not immediately available for comment