Early Edition October 30 2008 at 04:26 AM Chi-Chu Tschang and Harry Maurer
U.S. Banks to Continue Paying Dividends
U.S. banks are receiving more than $163 billion from the Treasury Department for new lending. But they are also expected to dole out more than half of that sum to their shareholders, with government permission, over the next three years.
The government said it was giving banks more money so they could make more loans. That's at odds with banks' plans to reward their shareholders, but Treasury officials say that suspending quarterly dividend payments would have deterred banks from participating in the voluntary program. Economists and members of Congress criticized banks for spending government money on dividends.
Source: Washington Post
Fed Assists South Korea, Brazil, Mexico with Dollar-based Fundraising
The Federal Reserve agreed to provide $30 billion each to the central banks of Brazil, Mexico, South Korea and Singapore, expanding its effort to unfreeze money markets to emerging nations for the first time. The Fed set up ``liquidity swap facilities with the central banks of these four large systemically important economies'' effective until April 30, the central bank said yesterday in a statement. The arrangements aim ``to mitigate the spread of difficulties in obtaining U.S. dollar funding." Some analysts said it could have a more significant impact than the Fed's move on Wednesday to cut short-term U.S. interest rates. Markets in Asia posted gains on the news.
Source: Bloomberg
In U.S. Election, Gap Narrows in Key States
New polling suggests the presidential race is a close one in the battleground states of Ohio and Florida, though not in Pennsylvania, where Sen. John McCain hopes to snag a key swing state. Sen. McCain is narrowing the gap in Florida, where Sen. Barack Obama leads 47% to 45%, a new poll by the Quinnipiac University Polling Institute finds. Less than a week ago, Sen. Obama led by five percentage points there. In Ohio, considered a Republican must-win, Sen. Obama still has a comfortable lead of 51% to 42%, Quinnipiac found. Last week, Sen. Obama led by 14 points.
Source: Wall Street Journal
Foreclosures: Feds to the Rescue?
The Federal Deposit Insurance Corp. and the Treasury Dept. are working on a major program to prevent widespread foreclosures that would include government guarantees of home mortgages. The plan would use $50 billion from the recently passed bailout package to provide as much as $500 billion to $600 billion in government guarantees on up to 3 million at-risk mortgages. It might require banks and savings and loans to offer loans with lower interest rates for a five-year period, while shifting to the government any risk if the home doesn't recover its full mortgage value within that time. Without giving details, FDIC Chairman Sheila Bair discussed the program on Oct. 29 at an international deposit insurers' conference in Arlington, Va. She said the agency has developed "a federal program to help more borrowers avoid foreclosure..Such a framework is needed to modify loans on a scale large enough to have a major impact."
Source: BusinessWeek
U.S. Vote Watchdogs Warn of Election Day "Meltdown"
With a record-high turnout of voters expected on election day across the U.S., voting-rights watchdogs are sounding the alarm that a repeat of the Florida fiasco of 2000 could occur in any of a dozen battleground states. Lawsuits have been filed in many of these states, including Ohio, Georgia, Florida and Colorado.
Source: Los Angeles Times
GM's Latest Retooling: Merger with Chrysler
General Motors is getting closer to taking Chrysler off the hands of its owner, private equity giant Cerberus Capital Management. If GM can come up with funds--perhaps as much as $10 billion--from the government to solve its problems and help restructure the smallest of the Big Three, it could be a done deal. Assuming it happens, show 'em what they won, Vanna. It's an 83-year-old car company that's badly in need of restructuring. That's the problem. GM has been lousy at restructuring. GM's strategy all along has been to grab Chrysler and its $11 billion in cash and estimated $35 billion to $40 billion in yearly sales, and then slash overhead, dump unwanted products and plants, and remake the combined company into a profitable business. Industry sources say the two sides still have many issues to settle.
Source: BusinessWeek
Four Former Dell Executives Sue, Allege Sex Discrimination
Four women--all fired from top executive posts at Dell--have sued their former employer, the world's second-largest computer maker, alleging gender discrimination and seeking $500 million in damages. The Texas-based company, whose top 14 executives are male, unfairly laid off four former senior female employees in the job cuts earlier this year, said the suit seeking class action status and filed in a federal court in California on Wednesday. A Dell spokesman said the claims of the suit were "without merit."
Source: Reuters
Delta-Northwest Finalize Deal
Delta and Northwest announced late Wednesday that the two companies had officially merged, hours after the U.S. Justice Department announced that the deal to create the world's biggest airline did not violate antitrust laws. The new airline will be called Delta, with its headquarters in Atlanta. The process of combining operations at the two carriers is expected to take 14 to 16 months. The outlook for the industry appears to be mixed, with some early signs that the uncertain economic outlook has led some consumers and businesses to cut back on travel. Some labor groups have opposed the merger, fearing that a deal would result in lost jobs.
Source: Washington Post
Strong Quake in Pakistan Kills 170, Injures Hundreds
A strong earthquake struck before dawn Wednesday in southwestern Pakistan, killing at least 170 people, injuring hundreds more and leaving an estimated 15,000 homeless, officials said. Aftershocks rattled the region. The toll could rise as rescuers dig for survivors in a remote valley in Baluchistan, an impoverished province bordering Afghanistan where the magnitude 6.4 quake struck. Worst-hit was the former British hilltop resort of Ziarat and about eight surrounding villages, where hundreds of mud-brick and timber houses were destroyed, officials said, including some buried in landslides triggered by the quake.
Source: Wall Street Journal
Netflix and TiVo to Tie Up on Movies
Two Silicon Valley success stories, Netflix and TiVo, are expected to announce a long-awaited partnership on Thursday. Netflix will place its Watch Instantly streaming-movie service on TiVo's HD-compatible set-top boxes, giving a boost to the industry's goal of delivering television shows and movies over the Internet, instead of over traditional cable and satellite networks, to ordinary TVs. Netflix, based in Los Gatos, Calif., is more widely known for its DVD subscription service that mails discs in familiar red envelopes. But it has lately been expanding its digital offerings, and now has 12,000 movies and television shows that subscribers can view instantly over the Web on their PCs without charge. Netflix and TiVo said they would begin testing the service on Thursday and expected to make it available to all owners of TiVo set-top boxes in December.
Source: New York Times
Phillies Win World Series
For a quarter of a century, it was an agonizing cycle for Philadelphia sports fans. Over 9,282 days, other cities' teams had earned the right to hoist trophies. No city with so many teams had failed for so long. The Philadelphia Phillies ended that dry spell, winning the World Series by beating the Tampa Bay Rays, 4-3, in Game 5, the first suspended game in postseason history.
Source: New York Times
Conversation of the Day: Can the Chevy Volt Save GM?
Reader Midwest writes: " I strongly believe the Volt is the last great hope for GM or any other American car maker. If, and only if, the domestic makers realize that LEADING this race will take them into the future, then they have a fighting chance. If they fold and give in to cheap gas, then they will lose."
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