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2008/08/11

Cuomo Takes Aim at More Banks

BusinessWeek Executive Summary Newletter
BusinessWeek Executive Summary
Your update of the most important business news from dozens of respected news sources, selected by the editors of BusinessWeek.

Late Edition August 11 2008 at 02:49 PM Chi-Chu Tschang and Harry Maurer

Cuomo Takes Aim at More Banks

New York State Attorney General Andrew Cuomo called for more big banks, notably JP Morgan Chase, Morgan Stanley, and Wachovia, to begin negotiations to resolve the investigation into their sales of auction-rate securities. The market for such securities collapsed in February, leaving customers facing billions of dollars in losses.

Citigroup, Merrill Lynch, and UBS last week agreed to buy back large amounts of auction-rate paper and to pay fines for the way the securities were marketed. Now, Cuomo is pressing other banks to make similar deals.

Source: Bloomberg

Oil Resumes Its Slide

Crude oil futures, which had ticked up a bit after Russia's invasion of Georgia, hit their lowest level since May during Monday trading, with crude for September delivery selling at one point for $113.48, down $1.72 for the day. Oil prices sank by about $10 last week. The main impetus for today's move lower seemed to be signals that China's economy is cooling off.

Source: Associated Press

More Money for Garbage

Waste Management boosted by 9% its bid for rival trash hauler Republic Services, to $37 a share, or $6.73 billion. Republic had previously rejected a $34-a-share offer and is continuing to pursue its own takeover bid for Allied Waste Industries.

Source: MarketWatch.com

Tiffany Will Appeal

The upscale jeweler announced it will appeal a judge's July ruling that eBay is not responsible for policing counterfeit goods on its online auction site. Tiffany sued eBay in 2004, arguing that most supposed Tiffany items on the site are fakes and that it's eBay's job to prevent such false claims. U.S. District Court judge Richard Sullivan in New York ruled that eBay can't be held liable for trademark infringement "based solely on their generalized knowledge that trademark infringement might be occurring on their Web sites."

Source: CNNMoney.com

A Ratings Boost for NBC

Despite worries about broadcasting many events via tape-delay, the first weekend of the Summer Olympics in Beijing was a ratings success for NBC. The opening ceremony on Friday attracted 34.2 million viewers, a 35% increase over 2004. On Saturday night, 24.1 million people tuned in to the network's prime-time telecast, the most Americans to watch the first night of Olympics competition since the 1996 games in Atlanta. NBC's online numbers are growing, too. The GE company's Web site, nbcolympics.com, had 4.8 million people watching video streams on Saturday, more than 4 times the peak number from the 2006 Winter Games.

Source: Wall Street Journal

China to Surpass U.S. as World's Top Manufacturer...

China will soon pass the U.S. as the world's top manufacturing country. According to consulting firm Global Insight, next year China will account for 17% of the world's manufacturing, compared to 16% for the U.S. Global Insight had earlier predicted the U.S. would retain the top rank till 2013, but the economic downturn in the U.S. has hit manufacturers hard.

Source: Financial Times

...but Europeans are Scaling Back on China Investments

Deterred by rising costs for Chinese labor, investors from Europe are shifting their attention to Russia. Foreign direct investment from the EU in China was just 1.8 billion euros ($2.7 billion) last year, compared to 6 billion euros in 2006. "Lots of European companies are hedging their Chinese manufacturing positions," said David Bartlett, FDI expert and adviser to accounting network RSM International.

Source: Financial Times

Bankrupt Retailers: Pushed to the Brink

The drumbeat of retail bankruptcies grows louder. So far this year, 15 retailers with assets of $100 million or more have filed for Chapter 11, up from seven for all of 2007. On Aug. 4, Boscov's, a department-store chain with 49 stores, filed for Chapter 11. As bankruptcies increase, changes to the 2005 the bankruptcy law are proving to be harsh for struggling companies. Rather than try to keep some stores open, many hard-up retailers are just shutting down completely.

Source: BusinessWeek

Verizon Reaches Agreement with Unions

Verizon averted a threatened strike on Sunday after reaching an agreement with the Communications Workers of America and the International Brotherhood of Electrical Workers for a three-year contract calling for a 10.5% raise. Negotiations had been under way for the past week, after the expiration of the previous contract.

Source: Associated Press

DreamWorks Deal with Indian Investor Likely This Week

Reliance ADA, controlled by Indian billionaire Anil Ambani, is likely to announce this week its deal to invest $500 million in DreamWorks. The next order of business for Steven Spielberg and David Geffen will be finding a distributor for DreamWorks' movies to replace Viacom's Paramount Pictures.

Source: Reuters

Conversation of the Day: Viacom vs YouTube

Reader Steve Real writes: "Why should YouTube make ad money from content created by Disney, Viacom, etc.? Are these companies creating free media for YouTube to profit from?"

Tell Us: Should Viacom Prevail in its Google/YouTube Suit?


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