- SEC Reopens Probe of Trading at Pequot
- Wal-Mart’s Fourth-Quarter Earnings Will Miss Forecast
- $1bn fraud at India IT group
- Satyam Accounting Scandal Erodes Confidence in India
- As scandal rocks Satyam, rivals may pick off clients
- U.S. House’s Frank Says TARP Funds Should Aid Muni-Bond Issuers
- PennyMac, Led by Ex-Countrywide Head, Sees Promise in Bad Loans
- U.S. Banks Offer Mortgage Rates Below 5% as Fed Buys Securities
- BOE Cuts Rate to Lowest Since Bank’s Creation in 1694
- Blagojevich Impeachment Panel Demands Donation List
- Intel Fourth-Quarter Sales Drop 23%, Missing Forecast
- Microsoft Said Not to Be in Talks to Fund Yahoo Bid
- Metals Prices to Be Lower in 2009 on Weak Demand, Goldman Says
- Bed Bath & Beyond Cuts Annual Forecast as Net Falls
- Retailers End Dour 2008 With More Weakness; Wal-Mart Warns
- Retailers report dismal December sales
- MGM Mirage’s CEO to ‘Dramatically’ Cut Debt, May Sell Casinos
SEC Reopens Probe of Trading at Pequot - Wall Street Journal
The Securities and Exchange Commission has reopened its investigation into possible insider trading of Microsoft Corp. shares by hedge fund Pequot Capital Management Inc., according to people familiar with the matter.
The investigation is looking at whether Pequot, founded by Arthur Samberg, used inside information gleaned from a former Microsoft employee it hired. Pequot says it believes its trading was proper.
The SEC and the Justice Department had previously investigated emails sent by the Microsoft employee, David Zikha, and Mr. Samberg as Mr. Zikha was in the process of joining the hedge fund. Pequot made more than $2 million from trading Microsoft shares, according to an SEC report. After a two-year probe, interviews and a review of emails, the SEC concluded there was insufficient evidence to bring a case, the report said.....
Wal-Mart’s Fourth-Quarter Earnings Will Miss Forecast - Bloomberg
Wal-Mart Stores Inc., the world’s largest retailer, said fourth-quarter profit will miss its forecast and predicted January revenue may be little changed as customers continue to rein in spending.
Revenue from U.S. stores open at least a year increased 1.7 percent last month, below analysts’ estimates. For January, sales will be unchanged to 2 percent higher, the Bentonville, Arkansas- based company said today in a statement. Fourth-quarter profit from continuing operations will be 91 cents to 94 cents a share, down from a November projection of $1.03 to $1.07.
Wal-Mart, which generates the most revenue from groceries, surprised investors after cutting prices on staples from Kraft Foods Inc.’s saltine crackers to Hormel Foods Corp.’s sliced bacon. As the recession deepened, consumers balked at discounts on flat-panel televisions, $7.50 jeans and microwave ovens for $43......
$1bn fraud at India IT group - Financial Times
The head of one of India’s biggest outsourcing groups has confessed to fixing the company’s books in a $1bn fraud described as the country’s “Enron”.
B. Ramalinga Raju, chairman and chief executive of Satyam Computer Services, resigned on Wednesday after admitting he had manipulated the accounts for “several” years to show hugely inflated profits and fictitious assets. The fraud is India’s biggest corporate scandal since the early 1990s and its first high-profile casualty since the start of the global financial crisis......
Satyam Accounting Scandal Erodes Confidence in India - Bloomberg
The accounting scandal that caused Satyam Computer Services Ltd. to collapse yesterday is shaking investor confidence in Indian stocks, putting an end to the market’s best start since 2000.
“How did they manage to conceal a fraud of such magnitude even from the auditors?” said Greg Kuhnert, a London-based fund manager at Investec Asset Management Ltd., which manages about $10 billion and sold its 0.15 percent stake in Satyam last month. “That to me is a huge concern and is making me very nervous about the situation in India now.”
India’s Sensex index tumbled 7.3 percent yesterday, led by a 78 percent plunge in Satyam, after Chairman Ramalinga Raju said profits at the company had been inflated for years and then resigned. Satyam American depositary receipts fell $8.42, or 90 percent, to 93 cents before the opening of the New York Stock Exchange, which then halted trading in the stock.....
As scandal rocks Satyam, rivals may pick off clients - Reuters
A $1 billion fraud at Satyam Computer Services may have put the Indian outsourcing firm's future in doubt, but could be a boost in troubled times for local and global rivals if they can lure away worried clients.
Satyam founder and chairman Ramalinga Raju quit on Wednesday after disclosing that profits had been overstated for years, raising questions about the survival of India's fourth-largest software services exporter.
"Satyam is way too risky a deal. Clients will walk. Key employees will walk," analysts at broker First Global wrote.....
U.S. House’s Frank Says TARP Funds Should Aid Muni-Bond Issuers - Bloomberg
Representative Barney Frank, chairman of the House Financial Services Committee, said the second half of the government’s $700 billion financial rescue should include aid for municipal bond issuers hurt by the credit crisis.
In a memo to House colleagues yesterday, Frank said he was crafting legislation with “new conditions” for spending the funds. Even if the bill is rejected, Frank said “it would be our hope” that President-elect Barack Obama will agree to follow its provisions.....
PennyMac, Led by Ex-Countrywide Head, Sees Promise in Bad Loans - Bloomberg
Stanford Kurland, the former Countrywide Financial Corp. president, says his new company’s purchase of $558 million in home loans issued by a failed Nevada bank will be a springboard for further growth.
Private National Mortgage Acceptance Company LLC, based in Calabasas, California, is paying less than 50 cents on the dollar for loans that the Federal Deposit Insurance Corp. acquired last July after First National Bank of Nevada collapsed.
Kurland’s company, known as PennyMac, may benefit from the housing market’s bust after he spent nearly three decades at Countrywide, the company regulators and bankers have blamed for lax lending during boom times. The largest U.S. home lender, bought last year by Bank of America Corp. for $2.5 billion after running short on cash, had a market value of more than $20 billion when he left in 2006....
U.S. Banks Offer Mortgage Rates Below 5% as Fed Buys Securities - Bloomberg
The largest U.S. banks are starting to offer fixed home loans below 5 percent after the government began buying mortgage securities to bolster the housing market.
JPMorgan Chase & Co. is advertising 30-year mortgages as low as 4.75 percent on its Web site, Wells Fargo & Co. has an offer for 4.875 percent and Bank of America Corp. has rates at 5 percent. The offers are for borrowers with excellent credit who put 20 percent down.
The Federal Reserve earlier this week began purchasing $500 billion of mortgage securities backed by Fannie Mae, Freddie Mac and Ginnie Mae to help lower mortgage costs. While the lower rates may lead more borrowers to refinance, it may not spur home buying in the second year of the recession after more than 2 million jobs were lost in 2008....
BOE Cuts Rate to Lowest Since Bank’s Creation in 1694 - Bloomberg
The Bank of England cut the benchmark interest rate to the lowest since the central bank was founded in 1694 as policy makers tried to prevent the credit squeeze from deepening Britain’s recession.
The Monetary Policy Committee, led by Governor Mervyn King, trimmed the bank rate by a half point to 1.5 percent. The result matched the median forecast of 60 economists in a Bloomberg News survey. The pound rose against the euro and the dollar.
“The availability of credit to both households and businesses has tightened further, pointing to the need for further measures to increase the flow of lending to the non- financial sector,” the Bank of England said in a statement. “Output is likely to continue to fall sharply during the first part of this year.”.....
Blagojevich Impeachment Panel Demands Donation List - Bloomberg
A panel of Illinois lawmakers considering the impeachment of Governor Rod Blagojevich ordered his campaign committee to turn over the names of every donor and the amount of money involved.
The governor’s campaign fund, Friends of Blagojevich, has until 10 a.m. local time tomorrow to comply with the subpoena, said state Representative Barbara Flynn Currie, the Democrat who leads the 21-member impeachment committee in the state capital of Springfield.
Blagojevich, 52, may be impeached as soon as the end of this week after U.S. Attorney Patrick Fitzgerald accused the Chicago Democrat of trying to auction President-elect Barack Obama’s vacant U.S. Senate seat. The panel is also looking into what state Representative Lou Lang, the chief questioner for the committee’s Democratic majority, has called abuses of power....
Intel Fourth-Quarter Sales Drop 23%, Missing Forecast - Bloomberg
Intel Corp., the world’s largest chipmaker, said fourth-quarter sales dropped 23 percent, more than it projected, as the global recession kills demand for personal computers.
The stock declined 6.1 percent after Intel said revenue fell to $8.2 billion from $10.7 billion a year earlier. The chipmaker also wrote down the value of its investment in wireless-Internet provider Clearwire Corp. by $950 million.
Plummeting revenue at Intel, whose chips run about 80 percent of the world’s PCs, signals falling demand across the technology industry. Chief Executive Officer Paul Otellini, 58, has said he expects the current U.S. recession to be the worst of his lifetime. Intel’s dominance of the processor market makes it a bellwether for technology spending, since its chips are among the first components ordered by computer manufacturers....
Microsoft Said Not to Be in Talks to Fund Yahoo Bid - Bloomberg
Microsoft Corp. isn’t holding talks to finance a new bid for Yahoo! Inc., a person familiar with Microsoft’s plans said, responding to a blog report.
The TechCrunch site said today that an investment group led by Silicon Valley executives and bankers is putting together a bid for Yahoo that would be funded largely by Microsoft. The software company would also acquire Yahoo’s Internet-search business under the deal, the blog said.
The report revived speculation that Microsoft would make another play for Yahoo, following a failed takeover attempt last year that lasted months. Microsoft isn’t discussing such a plan, said the person, who declined to be identified because the information is confidential. The deal was characterized as a proposal to Microsoft, TechCrunch said.....
Metals Prices to Be Lower in 2009 on Weak Demand, Goldman Says - Bloomberg
Metal and coal prices are expected to average “considerably lower” in 2009 as demand plunges in a global recession and producers can’t cut supply fast enough, Goldman Sachs JBWere Pty said.
Prices of coking coal may plummet by 60 percent, copper by 40 percent and aluminum by 28 percent, analysts led by Malcolm Southwood said in a note to clients yesterday.
Commodity prices dropped 36 percent last year as a global credit crisis curbed demand and pushed the world economy into a recession. Mining companies including Rio Tinto Group, Alcoa Inc. and Aluminum Corp. of China Ltd. have slashed production.
“With gold the most plausible exception, we expect 2009 annual average commodity prices to be considerably lower versus 2008, with negative implications for resources sector earnings,” the analysts said. “We expect global off-take of most metals and minerals to contract this year,”.....
Bed Bath & Beyond Cuts Annual Forecast as Net Falls - Bloomberg
Bed Bath & Beyond Inc., the largest U.S. home-furnishings retailer, said profit fell for the fifth straight quarter and lowered its annual forecast as customers flocked to liquidation sales held by bankrupt rival Linens n’ Things Inc.
Bed Bath & Beyond, based in Union, New Jersey, today projected earnings of $1.50 to $1.56 a share for the year, compared with $2.10 a year earlier. In September, the company said annual profit would decline in the low double-digits to mid-teens on a percentage basis from 2007. The average estimate of 18 analysts surveyed by Bloomberg is $1.59.
Linens ‘n Things has closed all of its U.S. and Canadian locations. Bankrupt retailer Mervyns LLC also chose to liquidate as the U.S. slipped deeper into a recession. Last year, Bed Bath & Beyond said it would initially lose sales during the Linens ‘n Things liquidation. Eventually the removal of its primary competitor will result in increased market share, the company said.....
Retailers End Dour 2008 With More Weakness; Wal-Mart Warns - DJ via CNNMoney
Same-store sales slumped in December, with even Wal-Mart Stores Inc. (WMT) showing itself not to be immune to the industry's woes as it was among the companies that cut expectations for the current quarter.
Following the worst set of data in decades for November, sales were expected to be nearly as bad for December, thanks in part to some post-Thanksgiving sales getting pushed into the December reporting period as the holiday fell later this year. But sales were also weak last December, giving retailers a lower bar than typical to reach.
The Thomson Reuters Same Store Sales Index was expected to record a 1% drop for last month, or 4.8% excluding Wal-Mart....
Retailers report dismal December sales - AP
Retailers reported dismal sales figures for December on Thursday as even Wal-Mart Stores Inc., one of the bright spots in the industry, finally buckled under the pressures of the deteriorating economy.
As merchants reported their sales figures, confirming fears that the holiday season was the weakest in four decades, the malaise cut through practically all areas from kitchen gadget stores to apparel retailers.
Among the many that reported steep sales declines were Sears Holdings Corp., which operates Kmart and Sears stores, and Limited Brands Inc. But the biggest surprise came from Wal-Mart, the world's largest retailer, which posted sales below Wall Street estimates and cut its fourth-quarter earnings outlook......
MGM Mirage’s CEO to ‘Dramatically’ Cut Debt, May Sell Casinos - Bloomberg
MGM Mirage’s new chief executive officer, James Murren, said he plans to “dramatically” reduce debt and will consider further casino sales as he overhauls the company’s balance sheet.
Murren plans to refinance maturing bonds as bank lending resumes and markets open up. MGM Mirage may buy back some notes trading at discounted levels, either through market purchases or tender offers, he said in an interview yesterday. Nothing is off the table, said Murren, 47, who also was named chairman.
“We’re going to pull every lever we feel like we should pull to strengthen this company, to not only weather the recession, but come out of it stronger,” Murren said. “We are certainly not looking to aggressively sell assets, but the point is that we do have assets that are attractive and we are going to be very responsive.”....
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