Early Edition September 11 2008 at 05:59 AM Chi-Chu Tschang and Harry Maurer
The U.S. Economy: Good and Bad Scenarios
So pigs really can fly and hell can freeze over. To save the economy, the Republican Bush Administration has nationalized two huge financial institutions, Fannie Mae and Freddie Mac. What now? The move could calm investors and stabilize housing, giving a needed confidence boost to the whole economy. Or a nightmare scenario could unfold, with spiking interest rates, ballooning national debt, and foreign investors fleeing the U.S.
Meanwhile, the economic picture across the pond continues to decline. On Sept. 10, the European Commission cut its economic growth forecast to just 1.3% for 2008, down from the 1.7% it predicted in April. Among the worst-hit countries is Great Britain, which the Commission now predicts will fall into recession this year.
Sources: BusinesssWeek, New York Times, Times of London
Lehman Struggles to Shore Up Confidence
The troubled investment bank, reeling from multibillion-dollar losses and a plunging stock price, rolled out a turnaround plan on Sept. 10 that includes cutting its dividend, selling most of its commercial real estate, and divesting a majority of its Neuberger Berman investment management unit.
Sources: Wall Street Journal, BusinessWeek
Reversal of Fortune for Emerging Markets
Nearly $30 billion has flowed out of emerging market equity and bond funds in the past three months, the highest rate since 1995, as investors are becoming increasingly anxious over growth prospects in countries such as China, Ukraine, Hungary, and Vietnam.
Source: Financial Times
WaMu Plunges on Investor Fears
Despite the installation of a new CEO on Monday, shares in Washington Mutual, the largest savings and loan in the U.S., skidded 30% on Sept. 10 as investors worried the bank is running out of time to save itself.
Source: New York Times
For EADS, a Bitter Turn of Fortune
Airbus' European parent thought a tanker contract with the U.S. Air Force was a chance to challenge Boeing on its home turf. Now, with the decision to postpone the contract award until the new administration is seated in Washington, it's back to Square One for EADS and partner Northrop Grumman.
Source: BusinessWeek
Chevron Extends Saudi Arabian Contract
The oil giant has inked a deal with the Saudi government that extends for 30 more years its right to explore and develop an oil field between Saudi Arabia and Kuwait.
Source: Wall Street Journal
GM Plans Hybrid Cars for Europe in Three Years
The chief of General Motors Europe, Carl-Peter Forster, said Sept. 10 that the company plans to launch "extended range electric vehicles" in Europe in about three years. The cars, which will rely on back-up gas or diesel engines for power when the battery runs low, will be sold under the Opel and Chevrolet brands.
Source: Reuters
New Chief for Sanofi-Aventis
Amid reports of friction in the executive suite, French pharmaceutical giant Sanofi-Aventis said Sept. 10 that it has hired a new CEO, Christopher Viebacher, who previously ran the North American drug unit for rival GlaxoSmithKlein.
Source: New York Times
BlackBerry vs. iPhone: RIM Takes It Up a Notch
To offset Apple's push into the BlackBerry smartphone's core market of business users, Research In Motion is unveiling more consumer-oriented features, including its first clamshell model.
Source: BusinessWeek
Bad Times Brewing? Not for Beer
During tough economic times, consumers traditionally turn to guilty pleasures: gambling, smoking, and drinking. This time around, only beer is holding its own, with sales up 1.4%, the largest gain since 1990.
Source: Washington Post via Los Angeles Times
Large Hadron Collider Starts Up, World Doesn't End
The world's most powerful atom smasher went into service yesterday near Geneva to thunderous applause by gathered scientists. But the completion of the $8 billion project has generated plenty of controversy--including fear that the facility could accidentally spawn a black hole that swallows the earth.
Sources: Financial Times, BusinessWeek
Coffee, Tea--or Pornography?
As American Airlines adds onboard wireless Internet access, some flight attendants and customers are concerned that passengers could visit porn Web sites from their seats.
Source: Los Angeles Times
Conversation of the Day: No 65 MPG Ford for U.S.
Reader Manuel Bettencourt writes: "I have bought nine different Ford vehicles in my lifetime thinking Ford cared about the American citizen. I guess my next car purchase will be a Japanese model."
Read the Story and Tell Us What You Think
Hot Topic on the Business Exchange: Lehman Bros.
As the credit crunch hits the U. S. economy, Lehman Brothers is fighting to survive as an independent entity. Shirley Brady and others are sharing their insights.
No comments:
Post a Comment
Keep a civil tongue.