Archive: April, 2009
Chrysler "missed a U.S. government deadline to come up with a restructuring plan by today that was rigorous enough to avoid bankruptcy and qualify for more bailout aid. The carmaker tried to negotiate an alliance with Fiat, reduce $6.9 billion in secured loans and cut $10.6 billion owed to a pension fund... Lenders refused...
"The carmaker and the government plan to use the bankruptcy process to revitalize Chrysler by putting its best assets, such as its Jeep and Dodge Ram brands, in a new company that wouldn’t be burdened by current costs and debt. A slimmed-down version of Chrysler, armed with Fiat’s small-car technology, would emerge from such a process, giving the carmaker a “new lease on life,” U.S. President Barack Obama said today."
Will China lead the world out of recession? "China is shovel ready!" argues economist Ed Yardeni. He cites, from Caterpillar's quarterly report: "China, with an economy one-third the size of the United States, is allocating over three times as much for infrastructure and initial results from this package look promising." And he notes United Technologies and Eaton, as well as DuPont, "are starting to see results from China's plan."
But that hasn't stopped Trump from bragging he's raised enough millions to launch a string of "cash-and-grab" purchases of big, troubled developments in Scotland, reports the Scotsman newspaper here.
Ex-GE boss Jack Welch, in town this week to help promote wife Suzy's self-help book, 10-10-10, told me it has been bittersweet catching up with NBC local-television executives at stations like Channel 10 in Philadelphia. Eva Blackwell of Channel 10 had no comment.
Didn't Welch and a group of fellow wealthy Bostonians try to buy the Boston Globe a couple of years back? "We came close to buying the Red Sox, we figured they would throw in the newspaper," Welch told me. New York Times Co. owns both the Globe and a stake in the Sox.
Eric Mayberry is out as publisher of the daily newspaper Metro Philadelphia, a free handout that litters Septa stops across the Delaware Valley, after he tried and failed to buy the paper from its parent company, Metro International. He won't be replaced, and the paper will be run from New York in the future, Mayberry tells me.
Mayberry says he's started a new firm, SmartBoy Enterprises LLC, "a media entertainment managing consulting company," which will lobby to help his old employer win a cut of state and city legal ads now reserved for paid papers like the Inquirer. He says he'll also write a column in the company's New York and Philadelphia dailies, subject "to be determined."
Mayberry "is leaving Metro Philadelphia in much better shape than when he arrived," said Metro International president Per Mikael Jensen in the statement Mayberry sent out. The ex-publisher said his company is also "creating a testing service and database of high school athletes," www.premiercombines.com. "I am not really a newspaper executive," Mayberry added in his statement.
The banks that dominate the credit card business -- JPMorgan Chase, Bank of America, Citi, American Express, Discover -- have cut back on new loans and boosted rates.
They're also under attack by Democrats in Congress and the Obama administration, who want limits on arbitrary rate hikes, as U.S. Rep. Paul Kanjorski, D-Pa., told me this morning.
So why are Visa's profits and its share price rising? While the banks that use Visa make (or lose) billions on borrowers' interest payments (or defaults), the San Francisco-based credit card network gets paid a cut of every card transaction -- credit or debit, charge or default.
And nowadays, most people who use Visa cards aren't borrowing money, notes Janney Montgomery Scott analyst Leonard DeProspo. "For the first time," he told me, citing Visa's quarterly earnings report from last night. "U.S. debit card usage was greater than credit card usage...
So, no pandemic. And yet, Bibbings adds, "consider the way the global financial markets have reacted to the news of the flu thus far... The travel and hospitality industries have been rocked, safe haven currencies (the dollar and yen) have risen, drug manufacturing stocks are up, energy has been down, most commodities are down, and hogs have absolutely been crushed. With regard to hog prices falling does this even make sense, considering that the disease is passed from humans to humans, not from pigs to humans? ...It may be time to get long hogs..."