Late Edition July 28 2008 at 02:50 PM Chi-Chu Tschang and Harry Maurer
The Ballooning Federal Deficit
The next President will have an unwelcome present waiting for him: a $490 billion federal budget deficit, the highest ever, for the fiscal year that begins on Oct. 1. At least, so says an unnamed Bush Administration official.
That deficit number is a lot bigger than the $417 billion President Bush projected in February. It reflects expected lower tax receipts due to the economic slowdown, the cost of military operations in the Mideast, and the outlays for the economic stimulus package. Partly in reaction to the deficit news, the stock market dropped sharply, with the Dow down about 200 points at 2:50 p.m.
Source: Bloomberg
GM spells out some cutbacks
General Motors, which announced further production cutbacks on July 15, gave details today. It will chop 117,000 more truck units from its plan for the year, making a total of 300,000 cuts. It will eliminate one shift from an SUV plant in Ohio and another at a truck and Hummer plant in Louisiana, along with lesser cutbacks at other plants.
Source: Detroit Free Press
Vanda gets walloped
Vanda Pharmaceutical saw its stock lose most of its value after the FDA refused to O.K. its schizophrenia treatment, iloperidone. The drug produced better results than a placebo but performed similarly to drugs already on the market, and the FDA asked that it be tested against some of those. Investors, fearing the costs to Vanda of carrying out additional studies, knocked the stock down about 70% as of 2:30 p.m.
Source: CNNMoney.com
Amgen shares in the pink
Another drugmaker, the big biotech Amgen, got happier results in tests of a key experimental product. It announced late Friday that its osteoporosis drug denosumab significantly reduced bone fractures in post-menopausal women. Investors cheered the news today, boosting the stock about 12% in midafternoon trading.
Source: Reuters
KKR is going public at last
Kohlberg Kravis Roberts & Co, the private equity granddaddy of the leveraged buyout, is finally getting a NYSE listing one year after announcing its intention to go public. However rather than raise money through an IPO, KKR is acquiring its Amsterdam-listed affiliate investment fund KKR Private Equity Investors LP. The merged company will delist from Amsterdam and list in New York in the fourth quarter. KKR made its name more than three decades ago in a hostile takeover of RJ Reynolds and now controls hospital operator HCA and other companies. Its original plan to tap equity markets for up to $1.25 billion through an initial public offering was torpedoed by the credit market turmoil.
Source: Businessweek
Ryanair profit plunges 85%
Budget airlines Ryanair reported an 85% drop in profit for the first quarter due to skyrocketing jetfuel prices which could force the company to record its first ever annual loss. Profit for the three months ended June was $33 million.
Source: Bloomberg
Beijing mulls more anti-pollution measures
The official opening of the Olympic Village in Beijing took place in a shroud of smog causing China's leaders to consider last-ditch efforts to reduce pollution before the games begin, including taking more cars off the roads and further factory closings.
Source: Guardian
Gas prices stay below $4 per gallon
Holiday makers are seeing some relief in mid summer thanks to 10 consecutive days of falling prices at the petrol pump, as gas stayed below $4 per gallon over the weekend.
Source: CNNMoney
Rolling Stones sign with Universal
Executives at EMI just can't get no satisfaction now that the Rolling Stones has left the label and signed a worldwide exclusive deal with Universal Vivendi.
Source: CNN Money
Conversation of the Day: The Frozen Economy
Reader Diane writes: "No one had a gun to our heads in signing loan docs or spending ourselves into financial ruin. We got ourselves into this mess-it's time to get ourselves out."
Tell Us: Are you making amends for overspending?
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