Late Edition July 30 2008 at 02:34 PM Chi-Chu Tschang and Cristina Lindblad
Fed Keeps The Tap Open
With the credit crunch showing few signs of easing, the Federal Reserve today said it is extending through January its emergency lending program for investment banks. The facility was launched in March, following the collapse of Bear Stearns.
In a statement, the Fed said it is expanding other so-called liquidity facilities. That includes a $200 billion program that loans out Treasury securities to banks. Also, a swap line with the European Central Bank is being raised to $55 billion, from $50 billion, to satisfy growing demand for dollar funding.
Source: The Wall Street Journal
Doha Trade Talks Fail
The Doha round of world trade talks collapsed Tuesday in Geneva following almost seven years of contentious, on-and-off negotiations. The nine days of talks in this latest round foundered over disagreements among the U.S., China, and India over agricultural subsidies.
Source: BusinessWeek
Profits at Siemens Drop Sharply
The German industrial conglomerate beat Wall Street estimates when it reported that third-quarter profit fell 31% from the same period a year ago, to $2.2 billion. Revenues were up 10%, bolstered by orders for power plants. Siemens yesterday announced it is suing two former chief executives and nine other ex-employees in connection with a corruption scandal that has resulted in millions in fines.
Source: Associated Press
New Alzheimer's Drug Disappoints
Drugmakers Wyeth and Elan saw their shares plunge following the release of results of a clinical trial of their new Alzheimer's medication, bapineuzumab. The data cast doubts on the drug's effectiveness and revealed potentially serious side effects in the brain. Some analysts had pegged the drug as a blockbuster, predicting annual sales would rise to $13 billion.
Source: New York Times
Home Prices Face Record Drop
U.S. home prices faced their worst rate of decline in May, says the Standard & Poor's/Case-Schiller index. The survey showed that home prices across 20 cities fell by 15.8%, while Los Angeles saw an even worse 24.5% decline in home values.
Source: BusinessWeek
Detroit Big Three Scale Back Auto Leases
Hit hard by declining used-vehicle prices, Ford and General Motors are shrinking their auto-leasing businesses, while Chrysler said last week it would end all leasing deals in the U.S. market. The move will make it much harder for millions of Americans to drive more expensive autos.
Source: Wall Street Journal
Health-Care Reform, Corporate-Style
In a climate of deepening health-care woes, company-based medical centers are winning dozens of fresh converts. These include the North American units of Toyota and Nissan, Harrah's Entertainment, and Walt Disney Parks & Resorts. Pharmacy chain Walgreen also operates nearly 200 small clinics for customers at its retail stores.
Source: BusinessWeek
Short Selling Ban Extended
The Securities and Exchange Commission has extended an emergency rule limiting short selling of the stocks of key financial agencies including troubled mortgage giants Freddie Mac, Fannie Mae, as well as Lehman Brothers and Goldman Sachs. The curb now continues until August 12. "The order is designed to protect legitimate short selling in these securities, but helps prevent illegitimate" short selling, SEC Chairman Christopher Cox said in a statement.
Source: Reuters
Iraq Oil Output Reaches Five-Year High
Iraq oil output had an average daily output of 2.43 million barrels this quarter, the highest since the U.S. invasion, says a U.S. Defense Department audit. The report attributes the oil boom in part to improved security in the war-torn country.
Source: Bloomberg
Indictment of Alaska Senator Blow to GOP
Six-term Alaska Senator Ted Stevens' indictment on federal corruption charges is the latest blow to the Republican Party. A November loss for the GOP's longest serving senator could help the Democrats in their quest to win a 60-seat majority, thus allowing them to break Republican filibusters.
Source: Washington Post
Denver Billionaire Boosts Wind Power Prospects
Denver billionaire Philip Anschutz is planning to invest $3 billion into a 900-mile, 3,000-megawatt wind transmission project aimed at supplying energy to the fast-growing Southwest. The project will bring wind power from southern Wyoming to Southern California, Las Vegas, and Phoenix.
Source: Denver Business Journal
Conversation of the Day: OFFSHORE OIL RESERVES
Reader Robert Writes: "Anyone remember the '70s and gas lines as long as a city block? America missed the boat then to change our habits and sink large sums of money into finding alternative energy sources."
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