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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?

To: altair19 who wrote (159215)	1/28/2009 2:57:57 PM
From: SiouxPal	Respond to of 362614

Just inside the house. Not on the walls.

To: altair19 who wrote (159215)	1/29/2009 12:13:33 AM
From: stockman_scott	Respond to of 362614

U.S. Stocks Gain, Extending Global Rally, on 'Bad Bank' Plan By Cordell Eddings Jan. 28 (Bloomberg) -- U.S. stocks rose, extending a global rally, as President Barack Obama prepared to set up a so-called bad bank to absorb toxic investments and Yahoo! Inc. and Germany's SAP AG reported better-than-estimated earnings. Citigroup Inc. and Bank of America Corp. surged more than 13 percent after a White House official said Obama's team may announce the outlines of its plan next week. Deutsche Bank AG and Barclays Plc added at least 18 percent in Europe. Yahoo and SAP, the largest maker of business-management software, climbed more 5.2 percent. The Standard & Poor's 500 Index gained for a fourth straight day, its longest streak since November. "The impact of the bad bank idea is positive for equities in that it moves us in the direction of finding a solution to the cloud of bad assets that continue to weigh on proper valuations," said Alan Gayle, senior investment strategist at Ridgeworth Capital Management, which oversees $70 billion in Richmond, Virginia. It's "giving nervous markets a lift." The S&P 500 added 3.4 percent to 874.09, with financial companies posting 19 of the top 20 gains. The Dow Jones Industrial Average climbed 200.72 points, or 2.5 percent, to 8,375.45. Europe's benchmark, the Dow Jones Stoxx 600 Index, rose 3.2 percent and the MSCI Asia Pacific Index gained 0.5 percent. Benchmark indexes climbed to their highs after the Federal Reserve left its benchmark interest rate as low as zero and said it may keep it at "exceptionally low levels" for some time. The S&P 500, which has dropped for three straight weeks, is still 16 percent above an 11-year low reached on Nov. 20 amid optimism that Obama's stimulus package will revive the economy. Stimulus, 'Bad Bank' Treasuries fell, led by the biggest decline in 30-year bonds in three weeks, after the central bank failed to expand on its plan to buy government debt as a means to reducing borrowing costs. The dollar gained against the yen and euro as the Fed resolved to do whatever is needed to revive the economy. The U.S. House is set to approve Obama's proposed $816 billion economic stimulus package. The plan is aimed at pulling the economy out of recession through a combination of tax cuts and $604 billion in spending. Citigroup added 66 cents, or 19 percent, to $4.21, while Bank of America, the largest U.S. lender by assets, jumped 89 cents to $7.39. JPMorgan Chase & Co. climbed 10 percent to $27.66. Fifth Third Bancorp and State Street Corp. jumped more than 31 percent. Financial companies in the S&P 500 rallied 13 percent collectively, with 79 of 81 companies advancing. 'Relief Rally' The bad-bank initiative may allow the government to rewrite some of the mortgages that underpin banks' toxic debt, in the hope of stemming a crisis that has stripped more than 1.3 million Americans of their homes. The S&P 500 fell 38 percent last year, the most since the Great Depression, after the collapse of Lehman Brothers Holdings Inc. froze credit markets and more than $1 trillion in losses at financial firms eroded profits. "You're getting a big relief rally in the financials and that's lifting the whole market," said Michael Binger, Minneapolis-based fund manager at Thrivent Asset Management, which oversees about $70 billion. "If the bad assets can be taken out, banks will feel more comfortable in where their capital ratios will be. And if that's the case, they'll be more ready to lend and the credit market freeze will thaw." Wells Fargo & Co., the second-biggest U.S. home lender, rallied 31 percent to $21.19. The bank maintained its dividend and said it doesn't need more federal aid as it reported its first quarterly loss since 2001 following its takeover of Wachovia Corp. Earnings Watch Yahoo, owner of the second-most-popular U.S. search engine, added 7.9 percent to $12.24. Excluding items such as stock-based compensation, earnings were about 18 cents a share, buoyed by job cuts and rising domestic sales. That beat the 17 cents estimated by analysts in a Bloomberg survey. Carol Bartz, in her first earnings conference call as chief executive officer, said she would consider offers to buy the company's assets, while adding that she didn't come to Yahoo with the intention of selling it. Profits decreased 41 percent for the 144 companies in the S&P 500 that have released fourth-quarter results since Jan. 12. Analysts now forecast a 32 percent drop in earnings for the fourth quarter after saying in March 2008 that net income would rise as much as 55 percent, according to Bloomberg data. Sun Rallies Sun Microsystems Inc. added 22 percent to $4.86. The world's fourth-largest maker of server computers reported sales and earnings that topped analysts' estimates after cutting jobs to cope with the recession. Life insurers advanced after state insurance commissioners endorsed industry proposals to loosen capital requirements, paving the way for a potential vote on Jan. 29 to change reserving rules. MetLife Inc., the biggest U.S. life insurer, jumped 20 percent to $33.27. Deutsche Bank, Germany's largest, surged 22 percent to 22.15 euros in Frankfurt. Barclays, the U.K. lender that turned down government funding last year, rallied 19 percent to 107 pence in London. There are some signs that the Fed's action has begun to thaw credit markets. Sales of commercial paper totaled $1.69 trillion last week, up from October's low of $1.45 trillion, though down from $1.76 trillion in the first week of the year. The cost of borrowing dollars in London for three months rose to a two-week high this week as confidence in the banking system weakened. The London interbank offered rate, or Libor, for three-month loans slipped 1 basis point to 1.17 percent today, according to British Bankers' Association data. Libor had surged to 4.82 percent on Oct. 10. The TED spread, the difference between what the U.S. government and companies pay for loans for three months, fell 5 basis points to 100 basis points. The spread was 464 basis points on Oct. 10. "The Fed has already dipped their toe into quantitative easing, now they want to see how far the credit markets thaw before they do anything big," said Stephen Wood, who helps manage $150 billion as a senior portfolio strategist at Russell Investments in New York. To contact the reporter on this story: Cordell Eddings in New York at ceddings@bloomberg.net. Last Updated: January 28, 2009 16:30 EST

To: altair19 who wrote (159215)	1/29/2009 12:40:02 AM
From: stockman_scott	Respond to of 362614

Forward Henrik Zetterberg Signs 12-Year Deal With NHL Red Wings By Nancy Kercheval Jan. 29 (Bloomberg) -- Henrik Zetterberg agreed to a 12- year contract through the 2020-21 season with the Detroit Red Wings. The National Hockey League team didn’t disclose terms of the contract with the forward. The accord is worth $73 million, the Associated Press said. Zetterberg, who has averaged 30 goals and 36 assists in each of his previous five seasons, will be 40 years old when the contract expires. He has 17 goals and 26 assists in 45 games this season. The Red Wings drafted Zetterberg in 1999. He joined the team in 2002-03. To contact the reporter on this story: Nancy Kercheval in Washington at nkercheval@bloomberg.net. Last Updated: January 29, 2009 00:02 EST

To: altair19 who wrote (159215)	1/29/2009 4:15:39 AM
From: stockman_scott	Respond to of 362614

Mike Heisley made an insightful observation which investors would do well to heed: The skills required to turnaround a distressed business require a different psychology, different temperament, different experience than those required of a "normal" CEO... turnaroundblogger.blogspot.com

To: altair19 who wrote (159215)	1/29/2009 7:49:54 AM
From: stockman_scott	Read Replies (1) \| Respond to of 362614

LBO Firms Face Lending Drought as ‘Adult Supervision’ Returns By Edward Evans and Simon Clark Jan. 29 (Bloomberg) -- Leveraged buyout firms that use debt to pay for takeovers are likely to be at the back of the line for loans as governments bail out banks and bolster lending oversight. “LBO loans have clearly got to be at the back of any government’s priorities,” said Jon Moulton, founder of London- based private equity firm Alchemy Partners LLP. “If there’s a limited supply of credit, it must be better from society’s point of view for it to go toward supporting existing businesses rather than financing changes of ownership.” After an unprecedented boom in leveraged buyouts propelled Blackstone Group LP Chief Executive Officer Stephen Schwarzman, 61, and Carlyle Group managing director David Rubenstein, 59, to prominence, the duo are among dealmakers at the World Economic Forum in Davos, Switzerland, this week facing a dearth of banks able or willing to fund their takeovers. And past acquisitions are haunting them as a recession erodes earnings, pushing more companies owned by private equity firms toward bankruptcy. “Debt has dried up,” Roberto Quarta, a partner at New York-based buyout firm Clayton, Dubilier & Rice Inc. said in an interview in Davos. “You will see more conservative lending practices dictated by banks’ own governance and, more importantly, dictated by governments that are going to play an increasing role in regulation.” Royal Bank of Scotland Group Plc, the biggest lender to buyout firms in Europe, said last week it would scale back international lending as the U.K. government stepped in to guarantee unspecified losses on toxic debt. The Edinburgh-based bank signed a binding agreement with the U.K. government on how much it will lend and on what terms. ‘Adult Supervision’ “We are most assuredly going to see the hand of government play a much greater role in markets,” Morgan Stanley Asia Chairman Stephen Roach said in an interview. “The question that needs to be answered is what impact that will have on allocating capital and how capital is used in the economy. Letting the system go on without adult supervision led us to where we are today.” While the U.S. hasn’t nationalized banks to the same extent as the U.K. government, President Barack Obama’s administration may introduce regulations forcing banks to hold more capital, which would curb lending. “The governments’ ownership is not what’s going to affect the willingness of the banks going forward,” said Howard Newman, president of Pine Brook Partners, a New York-based private-equity firm. “The degree of LBO lending is more a function of the regulatory system than the ownership. And it’s likely to be curtailed when the regulatory system is fixed.” Schwarzman’s Pressures Schwarzman, who said in Davos yesterday that 40 percent of the world’s wealth has been destroyed since July 2007, has seen his own company’s shares drop 74 percent in New York trading in the past 12 months. “The U.S. economy and large parts of the global economy are under enormous stress, and enormous pressures, and are likely to remain that way for some time,” Schwarzman said an interview with Bloomberg Television. “For our existing portfolio, it creates pressures on operations, but fortunately for us, we don’t have maturities in virtually all of our companies for about four years, so that leaves us in a relatively good position.” The U.K. Treasury said this month that it may raise its stake in RBS to 70 percent from 58 percent as it announced the second British bank rescue in three months. Prime Minister Gordon Brown told reporters he was “angry” with the bank for taking “irresponsible risks” by investing in U.S. subprime mortgages and ABN Amro Holding NV. RBS Loans For buyout firms, the government takeover may remove the biggest provider of debt for acquisitions in Europe. The bank arranged $82 billion of leveraged loans last year and $138 billion of debt the year before, according to data compiled by Bloomberg. RBS was Europe’s biggest arranger of leveraged loans every year from 2004 to 2008, helping to arrange loans for buyouts of companies ranging from German broadcaster ProSiebenSat.1 Media AG to Spanish clothing retailer Cortefiel SA. The loans now trade below face value, implying a higher risk of default and potential losses to holders of the debt. “I’d be amazed if RBS comes back to leveraged loans,” Moulton said. “They’ve lost an enormous amount of money and they above all have got enormous political pressure to do what’s ‘right’.” Debt Defaults RBS will decide whether to lend in leveraged buyouts on a case-by-case basis, spokeswoman Ila Kotecha said. “RBS continues to provide funding for private equity firms,” she said in an e- mailed statement. Banks’ reluctance to lend may make any recovery in the pace of leveraged buyouts even harder. LBO firms announced $69 billion of takeovers in Europe last year, about a third of the value of deals announced in 2007, Bloomberg data show. The firms may also have to deal with an increase in debt defaults by the companies they own as the recession erodes sales and depletes spare cash needed to meet debt repayments. Nine out of ten banks expect earnings at private equity- backed companies to fall by at least 10 percent this year, according to a survey of 155 European banks and LBO firms published yesterday by Jefferies International Ltd., a unit of the New York-based brokerage that specializes in mid-sized companies. Bankers and dealmakers say they don’t expect to see a recovery in takeovers and lending before 2010 at the earliest. No Quick Recovery “We don’t think there is any reason to be hopeful about a quick recovery in the credit markets,” said Kurt Bjorklund, co- managing partner at London-based Permira Advisers LLP, Europe’s biggest leveraged buyout firm, who is attending Davos this week along with about 30 private equity executives. “People are going to have to be more creative about finding interesting investment opportunities.” Stephen Pagliuca, managing director of Bain Capital LLC in Boston said in an interview with Bloomberg Television in Davos yesterday that banks remain unwilling to lend for buyouts as governments look for ways to stabilize the financial system. “They’ll lend in the end, but the first thing they have to do is get the bad loans off their books,” Pagliuca said. “There’s not enough capital in the banking system.” Buyout firms may have to reinvent the way they invest, executives say. Instead of seeking outright control of a company, they may buy minority stakes in companies or buy them using only cash from their funds, then sell debt when lenders return at a later date, Clayton Dubilier’s Quarta said. “There’s clearly still a role for private equity,” Mark Weil, a London-based partner at consulting firm Oliver Wyman, said in interview at Davos. “The better private equity firms are still active, engaged -- and there are tremendous deals out there for them.” To contact the reporters on this story: Edward Evans in Davos, Switzerland at eevans3@bloomberg.net; Simon Clark in London at sclark4@bloomberg.net Last Updated: January 28, 2009 18:02 EST

To: altair19 who wrote (159215)	1/29/2009 6:18:52 PM
From: stockman_scott	Respond to of 362614

Lewis, Thain, CEO Cult Torched in Crisis Bonfire: Commentary by David Pauly Jan. 29 (Bloomberg) -- The John Thain vs. Kenneth Lewis public dust-up may signal the death of a species. The once-powerful chief executive officer cult went into decline in recent years when members of the class were imprisoned for defrauding investors (Jeffrey Skilling of Enron Corp.) and stealing company funds (Dennis Kozlowski of Tyco International Ltd.). The financial crisis gripping the U.S. and the world has taken the prestige of CEOs to new lows. Huge write-offs for mortgage securities and credit default swaps meant the end for bosses at Merrill Lynch & Co., Citigroup Inc., American International Group Inc., Fannie Mae, Freddie Mac and Washington Mutual Inc. Now we have the spectacle of Lewis, the CEO of Bank of America Corp., firing Thain, who headed Merrill Lynch before selling it to Lewis at year-end. Neither executive comes out of the fray looking particularly good. Lewis dismissed Thain this month, after a three-week stint as head of global banking and securities for Bank of America. Thain’s sins were many. He asked for a 2008 bonus despite Merrill’s massive loses, and then backed off. Merrill lost another $15 billion in the fourth quarter. Then he granted bonuses to other employees of the stock broker before the sale closed. There was also the matter of his $1.2 million redo of Thain’s office at Merrill as the credit crisis unfolded. Who Knew? While Lewis can argue that he wasn’t fully apprised of Merrill’s deteriorating condition, his shareholders might think he wasn’t diligent enough. The Lewis story is that the government insisted he go through with the takeover in any case -- dumping more U.S. billions into the combined giants. If so, why didn’t Lewis inform Bank of America shareholders of the worsening situation before closing the deal? The record suggests Lewis is a compulsive collector of financial institutions. Before Merrill, he took over FleetBoston Financial Corp., credit-card company MBNA Corp., LaSalle National in Chicago, U.S. Trust Corp. and Countrywide Financial Corp. Bank of America shares have plummeted to $7.39 from a high of $55.08 in November 2006. His purchase of Merrill -- after previously denigrating Wall Street -- may be the takeover that takes him down. Investors, analysts and journalists all contributed to the cult of the CEO. They assumed a big ego, a touch of greed and a bit of arrogance were prerequisites for the job. Then came the excesses. Egos require royal trappings: corporate jets, company-paid tickets to New York Knicks games, $87,000 rugs. Fond Farewells A culture of pay-beyond-performance led to huge exit packages for CEOs who failed. E. Stanley O’Neal took away $162 million from Merrill Lynch in 2007 even though he was denied severance pay and a bonus for that year. Arrogant CEOs answered to nobody. After an analyst questioned Enron’s disclosure at a meeting, Skilling referred to him in an aside as something unprintable. On Wall Street, arrogance turned into ignorance. CEOs either didn’t understand subprime mortgage securities or didn’t fathom how big the risks were. Investors now will look for different qualifications in chief executives. Humility and transparency perhaps. CEOs will be held to a higher standard with less pay -- especially on Wall Street where the old bonus system is dead. Good corporate government will replace personal aggrandizement. Amen. (David Pauly is a columnist for Bloomberg. Opinions expressed are his.) Editors: James Greiff, Steven Gittelson To contact the writer of this column: David Pauly in Fort Myers, Florida dpauly@bloomberg.net Last Updated: January 29, 2009 00:01 EST