Early Edition August 05 2008 at 05:22 AM Chi-Chu Tschang and Harry Maurer
Fed Expected to Hold Rates
The U.S. Federal Reserve is expected to hold interest rates steady on August 5 as the dismal housing market and tightening credit conditions take their toll on the economy. A statement from the Fed's policy-setting Federal Open Market Committee is due in the early afternoon, while economists reckon the committee also will highlight the ongoing risk of inflation due to soaring commodity prices.
The policy-makers likely will paint a downbeat picture of future growth due to the highest U.S. unemployment rate in four years and the lowest existing-home sales since the late 1990s.
Source: Reuters, BusinessWeek
Greenspan warns about further bank bail-outs
More banks and financial institutions could be bailed out by governments before the credit crisis comes to an end, according to former U.S. Federal Reserve Chairman Alan Greenspan. Despite this further governmental intervention, Greenspan warns that a heavy-handed regulatory response would do more harm than good by depressing global share prices.
Source: Financial Times
Motorola hires Qualcomm COO
Struggling mobile phone manufacturer Motorola on August 4 tapped Qualcomm's Sanjay Jha to head its troubled mobile phone division and share chief executive duties for the company in an unusual power-sharing agreement. Jha -- who Motorola said had extensive operational experience and talent for managing change -- will share the CEO role with current Chief Executive Officer Gregory Brown.
Source: New York Times
China Development Bank on hunt for deals
The China Development Bank is mulling a bid for Allianz SE's Dresdner Bank -- Germany's third-largest lender by assets - according to people familiar with the matter. In what may be the biggest ever overseas acquisition by a Chinese company, China Development Bank is understood to be conducting due diligence on Dresdner, which is expected to fetch as much as $14 billion.
Source: Bloomberg
UBS suffers further setback
Swiss financial giant UBS has suffered another setback after David Aufhauser quit as general counsel for the institution's investment banking division as the fall-out widens from investigations into the failed market in auction rate securities (ARS). Aufhauser is among the unnamed UBS officials accused by New York Attorney General Andrew Cuomo of selling their personal holdings in ARS 'as the storm clouds loomed' over the market. Cuomo's civil complaint doesn't name any executives and Aufhauser hasn't been charged with any wrongdoing.
Source: Financial Times
Japanese firms mull $106 billion merger
Orix -- Japan's largest leasing company -- and consumer credit firm Credit Saison are in merger talks to form a $106 billion finance group, according to people familiar with the matter. The merger would come as Japan's financial sector suffers from the fallout of the subprime loan crisis and a slowing economy. Despite these problems, Orix has sounded out Mizuho Financial Group -- Credit Saison's largest shareholder -- about selling its stake.
Source: Reuters
Alcatel-Lucent starts global leadership hunt
Alcatel-Lucent has started a global hunt for new leadership after former BT Group boss Ben Verwaayan rebuffed an initial approach from the company, according to people familiar with the matter. The executive search is aimed at bringing a firm management hand to the big telecom-equipment maker and easing cultural tensions after two years of problems led to the removal of Chief Executive Officer Patricia Russo and Chairman Serge Tchuruk.
Source: Wall Street Journal
Freddie Mac CEO dismissed warning signs
Richard Syron, chief executive of beleaguered U.S. mortgage lender Freddie Mac, rejected internal warnings that could have protected the company from some of its current financial problems, according to more than a dozen current and former high-ranking executives. Syron received a memo in 2004 from Freddie Mac's chief risk officer warning him that the firm was making questionable loans that threatened its financial health.
Source: New York Times
Automakers balk at fuel efficiency regulation
U.S. automakers are objecting to new rules that would increase fuel efficiency across their fleets. The National Highway Traffic Safety Administration proposed the regulation, which will require carmakers to achieve a fuel efficiency of at least 31.6 miles per gallon for cars and trucks by 2015, compared to the current 25 miles per gallon.
Source: Wall Street Journal
Hard times for Argentina
Argentina -- Latin America's most vulnerable economy -- faces restive famers, skyrocketing inflation, and mounting debt. The country also needs to strike a deal with creditors still smarting from the 2001 economic crisis.
Source: BusinessWeek
China's heavy-handed response to attack
After an August 4 attack by members of a Chinese ethnic group killed 16 police officers, China has locked down Kashgar - the country's westernmost major city -- cutting Internet access and detaining journalists.
Source: Bloomberg
Conversation of the Day: Apple's Sour Outlook
Reader MWG Name writes: "The biggest test for Apple is how long they can sustain putting out 'cool toys' and improving their products. They need to wow new consumers and satisfy die-hard supporters."
Tell Us: Is Steve Jobs on the Right Track?
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