Leonard Doyle | Washington | May 3

Independent - America's love affair with sports utility vehicles (SUVs) and pick-up trucks is finally over.

The gas-guzzlers that ply the country's freeways and clog its city streets and parking lots are falling victim to ever-rising petrol prices, rather than concern about the country's oversized carbon footprint. The fall-off in sales is dramatic however.

Even offers like that from a Denver showroom of a year's free petrol with each new SUV isn't shifting the pick-ups and 4x4s quickly enough to stave off financial ruin for the country's car manufacturers.

With petrol now selling for almost $4 (£2) a gallon, consumers are trading in their Humvees and Ford Explorers so fast that for the first time, one in five cars sold in the US is now a compact or subcompact. In another first, sales of six-cylinder vehicles were bypassed by smaller four-cylinder, mostly Japanese, cars in April.

Michael Barbaro and Eric Dash | April 27

NYT - Stung by rising gasoline and food prices, Americans are finding creative ways to cut costs on routine items like groceries and clothing, forcing retailers, restaurants and manufacturers to decode the tastes of a suddenly thrifty public.

Spending data and interviews around the country show that middle- and working-class consumers are starting to switch from name brands to cheaper alternatives, to eat in instead of dining out and to fly at unusual hours to shave dollars off airfares.

Though seemingly small, the daily trade-offs they are making — more pasta and less red meat, more video rentals and fewer movie tickets — amount to an important shift in consumer behavior.

Gretchen Morgenson

NYT - Slowly but surely, a handful of public-minded bankruptcy court judges are drawing back the curtain on the mortgage servicing business, exposing, among other questionable practices, the sundry and onerous fees that big banks and financial companies levy on troubled borrowers.

It isn’t a pretty sight, if you are a borrower. But shining a light on this dark corner certainly qualifies as progress.

The cases come out of bankruptcy courts in Delaware, Louisiana and New York, and each one shows how improper, undisclosed or questionable fees unfairly penalize borrowers already struggling with mortgage debt or bankruptcy.

Stephen Foley | New York | April 17

Independent - It is a jarring comparison for the millions of American homeowners struggling with their soaring mortgage payments, but there is one man who has profited so much from the credit crisis that he is jumping a few rungs on the property ladder this year.

He is John Paulson, a previously obscure hedge fund manager from New York, who took home $3.7bn (£1.9bn) last year, after betting on a calamity in the mortgage market.

It is certainly the biggest single pay-day in the history of Wall Street, more than twice anything previously achieved even in the bloated hedge fund industry. It is worth spelling the total out with all the zeros: $3,700,000,000, the equivalent of a lottery jackpot every day for a year.

Putting his own money, his clients' money and billions of dollars of borrowed funds into the bet, he won big. Paulson & Co, his fund, had $6bn under management at the start of 2007 and $28bn at the end. The gains on his own capital and his cut of the fund's fees netted him $3.7bn over the period.

David Teather | Reykjavik | April 17

The Guardian - Tiny country is like a canary in a coalmine signalling crises in toxic economies

Signs of the new wealth in Reykjavik are hard to miss. Expensive four-wheel drives creep down the narrow main street, announced by the crunching sound of metal-studded tyres, for better grip on Iceland's frosty roads. Overhead is the near constant hum of private jets.

There is building work throughout the city. On the harbour, a £50m concert hall will have spectacular views when it is finished this year. For the first time, Iceland has had an influx of foreign workers. House prices have doubled since 2001 and a generation has known nothing but the good times.

But those good times have come to a juddering halt. Iceland has become the latest flashpoint in the global financial crisis. Critics have compared the country to a "toxic hedge fund" built on debt that could be about to go spectacularly wrong.

Michael Bararo | April 15

NYT - The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country.

Since last fall, eight mostly midsize chains — as diverse as the furniture store Levitz and the electronics seller Sharper Image — have filed for bankruptcy protection as they staggered under mounting debt and declining sales.

But the troubles are quickly spreading to bigger national companies, like Linens ‘n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week, according to people briefed on the matter.

Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117 and the jeweler Zales will close 100.

The surging cost of necessities has led to a national belt-tightening among consumers. Figures released on Monday showed that spending on food and gasoline is crowding out other purchases, leaving people with less to spend on furniture, clothing and electronics. Consequently, chains specializing in those goods are proving vulnerable.

Jeff Bailey | April 14

IHT - The boards of Delta Air Lines and Northwest Airlines announced a deal that will create the world's biggest airline and probably trigger other airlines to pursue mergers of their own.

Directors of the two airlines approved the deal in telephone conference calls. The all-stock transaction values the combined companies at $17.7 billion.

If they approve the deal, shareholders of Northwest would receive 1.25 Delta shares for every Northwest share that they own, the companies said in a statement.

* Company statement: Delta Air Lines on purchase of Northwest Airlines

When I recently read of the news of Skybus Airlines ceasing operation, I couldn't remember seeing any of their planes (wrong end of the country). So I googled for one and came up with this:


Well, that looked familiar! How about Hughes Airwest?



Or maybe Braniff?



Ah, that's it! Nothing like being 25 years behind the times!

Both airlines were done in by high fuel costs and tough competition and had orange planes, but there the resemblance ends. Braniff had great food:

Joseph Menn | April 6

Los Angeles Times - It may launch a proxy war and lower its offer if a deal isn't reached in three weeks, the CEO says in a letter.

Its patience running thin, Microsoft Corp. said Saturday it would turn its $40-billion bid for Yahoo Inc. hostile and probably lower its offer if the companies don't reach a deal within three weeks.

Microsoft vowed to nominate a slate of Yahoo directors who support a takeover if the deadline isn't met.

The world's biggest software company also went out of its way to quash Wall Street speculation that it would raise its 2-month-old offer to seal a deal.

"If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal," Microsoft Chief Executive Steve Ballmer wrote in a letter sent to Yahoo's board Saturday.

Yahoo had no immediate response. A person close to the company said its board was reviewing the letter.

Andrew Clark | New York | April 4

The Guardian - · Senate committee told of threat to financial system
· JP Morgan agreed deal only with Fed's backing

The head of the crisis-hit investment bank Bear Stearns has blamed short sellers and market manipulators for spreading negative financial rumours to induce a collapse of the 85-year-old Wall Street institution.

Bear's chief executive, Alan Schwartz, told the senate's finance committee in Washington that his firm had been as well-capitalised as its rivals but it suffered an evaporation of confidence last month fuelled by falsehoods.

"As an observer of the markets, it looked like more than just fear," said Schwartz. "It looked like people wanted to induce a panic."

He told senators that he never dreamed a run on the bank could happen so quickly. Bear lost $10bn of liquidity in a single day, with its financial resources plummeting from $12.4bn to $2bn on March 13 as customers, trading partners and investors fled.

"The minute we got a fact out, a different set of rumours would start," said Schwartz, who testified that the "nature and pattern" of the damaging whispers made him suspicious they were being circulated deliberately. He urged regulators to investigate the debacle. "There are laws against market manipulation and there used to be laws against spreading rumours about banks," he said.

Jim Heintz | Moscow | March 21

AP - Russian steel company OAO Severstal said Friday it will buy Baltimore's Sparrows Point steel from ArcelorMittal for $810 million in cash.

Sparrows Point is a fully integrated mill.

The purchase will make Severstal the fourth largest steel producer in the U.S. Its North American division also includes a mill and other facilities in the Detroit area and in Columbus, Miss.

Sparrows Point has a capacity of 3.9 million tons of crude steel. It is the only integrated producer of flat rolled steel on the U.S. East Coast.

Severstal and the United Steel Workers union have agreed to enter into a collective-bargaining agreement, the company said.

Terry Macalister | March 18

The Guardian - Shell is gearing up for a huge expansion of its carbon-intensive tar sands operation in Canada at a time when it has been struggling to replace conventional reserves.

In an annual strategy update yesterday, Jeroen van der Veer, chief executive, said the Canadian business was at the centre of its wider ambitions to meet growing energy demand - with the high cost of developing Athabasca and other projects easily accommodated by crude prices that hit new highs yesterday of $112 a barrel.

Roger Vincent & Andrea Chang | San Diego | March 21

LAT - Starbucks got caught with its hand in the tip jar and was ordered Thursday to pay California baristas more than $100 million.

In a San Diego County class-action lawsuit, a judge ordered the coffee giant to pay back tips, with interest, that the company had handed over to shift supervisors. Some baristas could receive more than $10,000, according to their attorney.

New York | March 17

IHT - Shareholders of Carlyle Capital have voted unanimously in favor of a compulsory liquidation of the company.

The company said it would sell its remaining assets under the law of the Island of Guernsey in the English Channel, where it is incorporated.

Carlyle Capital, an affiliate of the buyout firm Carlyle Group, which is based in the United States, said it had received default notices from its two remaining lenders and believed that its lenders had taken possession of substantially all of its U.S. government agency AAA-rated residential mortgage-backed securities.

It said it recommended to shareholders to vote in favor of the liquidation after extensive analysis of its prospects.

Carlyle Capital was hit severely by the impact of the credit crisis on leveraged investors and comes as JPMorgan Chase bought Bear Stearns for a rock-bottom price while the U.S. Federal Reserve set an emergency interest rate cut and opened direct lending to Wall Street.

The Transparency Black Hole And The bailout Game
Last January the Davos elites ('they') gathered again to discuss the possible options as the world economy and the fabric of societies deteriorates to a point of no return. The disease can easily be identified and is named extraordinary leverage. Amid the institutionalized meltdown, it would be useful to mention this very 'Obama bill' whose purpose is to alleviate global poverty and amounts to $845 billion. Additionally, he's eying a $120 Billion Stimulus Plan while No joke! Where is Barak Obama going to find the money considering that every household in America owes $400,000 to the Treasury (grand total, future liabilities included) according the former GAO chief, Paul Walker? What happens when consumers stop consuming?

Marla Dickerson | San Pedro Sacatepequez, Guatamala | March 9

LA Times - Perched on less than an acre of land off an unpaved road in a hardscrabble rural area, farmer Gumercindo Ajanel would hardly seem like a Wal-Mart regular. But in fact, he's working for the American retail giant.

On a recent morning, he proudly displayed fresh-picked cilantro and parsley he ships to the chain's local stores. A company agronomist taught him to grow greens that are hygienic and visually appealing. Best of all, he said, Wal-Mart buys frequently and pays promptly. "That helps a lot," said Ajanel, who employs 30 farmhands in this area about 35 miles northeast of the capital, Guatemala City.

Ajanel, 35, is a rare success story in a nation where nearly three-quarters of the population is rural and largely poor, yet being squeezed by modern economic forces. Supermarkets are rapidly displacing informal channels through which peasants traditionally sold their harvests. Growers used to hawking dusty potatoes out of the back of a truck are finding shoppers defecting to chains whose produce is clean, uniform in size and often lower in price.

Consumers are thrilled at the savings and convenience. But the trend worries some agricultural economists and development experts. Now simply growing a good crop is not enough to ensure the survival of many small-scale farms; they must get their products onto supermarket shelves.

I used to do search engine optimization (SEO) marketing for a living, and just recently started up consulting again. Not, as I always point out right up front, the URL misdirection and link spam kind. No. The kind where you create human-readable content geared towards providing the information your audience is looking for.

I got started in 2001, worked at it part-time to pay for my first couple years of undergrad, and quit in 2005 to go back to school full time. I started blogging in 2002, and at some point, I realized that all the hard-won markers of success for my clients' web sites came to me easily on my own blog, even if it wasn't getting blogger A List traffic. No one can ever tell me that there isn't value in what we do, even if few of us get paid for it.

Beatrice E. Garcia | Tallahassee, FL | February 24

Miami Herald - State Farm, the state's largest private insurer, won't write new homeowners policies starting March 1 as it seeks to reduce its exposure to hurricane losses.

In a move certain to deepen Florida's insurance crisis, State Farm Florida plans to stop writing new homeowners policies throughout the state starting Saturday.

Cinncinnati | February 22

AP - A federal court jury on Friday found the owner of a company that sells "male enhancement" tablets and other herbal supplements guilty of conspiracy to commit mail fraud, bank fraud and money laundering.

Steve Warshak, whose conviction was reported Friday by The Cincinnati Enquirer, is founder and president of Berkeley Premium Nutraceuticals, which distributes Enzyte and a number of products alleged to boost energy, manage weight, reduce memory loss and aid restful sleep.

Television ads for Enzyte feature "Smiling Bob," a goofy, grinning man whose life gets much better after he uses the product, which allegedly boosted his sexual performance.

From Mish:

Numerous programs are being put into place in an attempt by banks and mortgage holders to encourage home owners to stay debt slaves forever, while lawyers are advising banks to walk away from contracts and pay the penalty of loss of reputation.

Exactly how does this differ from homeowners choosing to walk away from their obligations with a price of "loss in reputation" otherwise known as a black mark on their credit score?

Here's the answer: There is no difference, and that is precisely why all these programs to keep homeowners in their homes when it is a bad economic decision for them to stay, will fail.

"It is the tipping point argument," said a senior partner at one of the biggest private equity firms, who asked not to be named said Mish, who was willing to be named. "The banks Consumers have so many issues with their balance sheets that they are considering a new policy."

If it's in your best interest to walk, and you are willing to pay the penalty price, then walk.

I advised a friend of mine a few months ago to walk away from a bunch of bad debt. He was totally underwater, horribly stressed and his life was pretty screwed. "So what," I said. "What can they do to do? They can't put you in jail. They can't garnish your wages. They've already taken everything they can. Besides, businesses do it all the time." He took my advice and actually has money in savings now.

Yeah, yeah, you say, "but what about the sanctity of contracts in America? What about a man's word?" Oh, really? Corporate America long ago broke the social contract with Americans. Screw corporate America. If you have cash to buy something with it will never be denied.

I don't know, but this seems like a bad idea:

The talks, which were described by both sides as a “long shot,” center on merging Fox’s interactive assets — led by the social networking site MySpace — with Yahoo. News Corporation is participating in the talks, in part, because, as one participant said, “there’s nothing to lose.” Either News Corporation clinches a deal, or more likely, its interest pushes up the price of Yahoo for its competitor, Microsoft. The Microsoft bid, a mix of cash and stock, is now worth $42.1 billion.

But then, I instinctively dislike anything Murdoch tried to do, or is involved with. Then again, a Yahoo! merger with Myspace might not be such a bad idea.

If there were more reporters like Gretchen Morgenson in the mainstream media I promise you the country would not be nearly as messed up as it is. Her latest column is a stellar example of the kind of courage real reporting requires. She's taken on several corporations like Delphi in the past and I can only hope she will continue to do so in the future.

She absolutely takes apart the hedge-fund manager who is currently running Sears into the dirt. It's a thing of beauty. Would that our political reporters had her gumption.

Landon Thomas Jr | January 27

IHT - Under the stewardship of Dow Kim and Thomas Maheras, Merrill Lynch and Citigroup built positions in subprime-related securities that led to $34 billion in write-downs last year. The debacle cost chief executives their jobs and brought two of the world's premier financial institutions to their knees.

In any other industry, Kim and Maheras would be pariahs. But in the looking-glass world of Wall Street, they — and others like them — are hot properties. The two executives are well on their way to reviving their careers, even as global markets shudder at the prospect that Merrill and Citigroup may report further subprime losses in the coming months.

Maheras, who left his job as co-president of Citigroup's investment bank this fall after being demoted, has had serious discussions with several investment banks, including Bear Stearns, about taking on a top management position, people who have been briefed on the situation said. And he has also been approached by investment firms willing to back him to the tune of $1 billion or more if he decides to start his own hedge fund, these people said.
...
The ease with which Maheras and Kim have put themselves back in play is a reminder that for many top Wall Street executives, humiliation and defeat need not result in a professional exile. And they aren't the only ones. Zoe Cruz, the Morgan Stanley co-president who was forced to leave her job after $10.8 billion in subprime losses, has been approached by investment banks, hedge funds and private equity funds about a senior management role, people briefed on those discussions say.

See the policy post here

Though credit goes to John Batelle who blogged about it last night.

From Google:

No attacks on an individual's personal life. Stating disagreement with or campaigning against a candidate for public office, a political party, or public administration is generally permissible. However, political ads must not include accusations or attacks relating to an individual's personal life, nor can they advocate against a protected group. So, "Crime rates are up under Police Commissioner Gordon" is okay, but "Police Commissioner Gordon had an affair" is not.

Verne Kopytoff | Santa Cruz, CA | January 22

San Francisco Chronicle - Natalie Miles, a legal studies student at UC Santa Cruz, is getting some unwelcome education in her major.

Attorneys representing some of Hollywood's biggest companies say the 20-year-old illegally made 599 songs available for sharing on a popular online service. For that, she was told in a letter from the recording industry, Miles will be sued in federal court unless she can come up with about $3,000 for a settlement.