Late Edition August 05 2008 at 03:15 PM Chi-Chu Tschang and Harry Maurer
The Fed Leaves Rates Alone
As expected, Ben Bernanke's Fed left its benchmark rate unchanged at 2%. And despite a steep inflation number released the day before, the Fed's statement emphasized concerns about economic growth, not rising prices. The Federal Open Market Committee voted 10 to 1 to leave rates unchanged, but in a nod to the lone dissenter, who thought rates should rise, it noted that inflation was still a "significant concern" and that the outlook for prices was "highly uncertain."
In response, stock investors cheered. The Dow, which had been up more than 200 points the entire day, promptly added another 30 to 40, pushing the index up more than 280 in the middle of the afternoon.
Source: New York Times
Cablevision ponders spinoffs
Shares of the media company run by the Dolan family jumped sharply again after it announced it might spin off one of its major components, either the cable-TV business, Madison Square Garden, or its Rainbow Media TV network. It also plans to start paying a quarterly dividend or buy back shares. The stock jumped 14% on July 31 after owner James Dolan first suggested he might make such moves. The Dolans have faced heavy criticism from shareholders. Shares were up almost 8% today around 2 p.m.
Source: Bloomberg
Sweet music for Sony?
The Japanese electronics and entertainment giant agreed to buy the half of Sony BMG Music it doesn't already own from Bertelsmann for $1.2 billion. The company will be named Sony Music Entertainment. The joint venture had been on shaky ground since a European court ruled in 2006 that it shouldn't have been approved by antitrust regulators in the first place.
Source: MarketWatch.com
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
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
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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