Business News

Beige Book States Most Districts See Slowing in the Pace of Decline

By Scott Lanman

July 29 (Bloomberg) — The Federal Reserve said most of its 12 regional banks detected a slower pace of economic decline in June and July, further signs the worst U.S. downturn in at least five decades is closer to an end.

“Economic activity continued to be weak” in June and July, the Fed said today in its Beige Book business survey, published two weeks before officials meet to set monetary policy. San Francisco, the district with the biggest economy, and three others “pointed to signs of stabilization,” while Chicago and St. Louis showed a “moderating” pace of decline.

The report backs up comments by Chairman Ben S. Bernanke, who told Congress last week the economy’s contraction “appears to have slowed significantly,” with demand and production showing “tentative signs of stabilization.” Other Fed policy makers said this week they expect a slow recovery to begin during the second half of this year.

The Beige Book provided few signs of outright growth. Retail demand was “sluggish” in most areas, with “mixed” auto sales. Non-financial services were “largely negative” with “a few bright spots,” and manufacturing was “subdued” yet “slightly more positive” than in the previous report, the Fed said.

Lending in most regions “was stable or weakened further” in most loan categories, and banks tightened credit standards in seven districts, the report said.

‘Less Upbeat’

“We are very close to the bottom,” said Lyle Gramley, senior economic adviser with New York-based Soleil Securities Corp. and a former central bank governor. “The Beige Book is a little less upbeat than the numbers that have been coming in.”

Gramley cited today’s report of orders for U.S. durable goods, excluding automobiles and aircraft, which unexpectedly rose in June. Excluding transportation equipment, demand for goods meant to last several years climbed 1.1 percent, the most in four months, the Commerce Department said today in Washington.

“The Fed is nowhere near in a position of changing its posture of monetary policy,” Gramley said.

The Fed report reflects information collected through July 20 and summarized by staffers at the Boston Fed. The Federal Open Market Committee next meets in Washington Aug. 11-12. At their last meeting in June, officials refrained from adding to their $1.75 trillion program to buy housing debt and Treasuries, saying they were “uncertain” of the impact of such a move.

GDP Shrank

Government figures on July 31 may show that U.S. gross domestic product shrank at a 1.5 percent annual pace in the second quarter, less than the 5.5 percent contraction in the previous three months, according to the median of 77 estimates in a Bloomberg News survey.

The previous Beige Book, released June 10, said “economic conditions remained weak or deteriorated further” from mid- April through May, while five districts “noted that the downward trend is showing signs of moderating.”

U.S. employers eliminated 467,000 jobs in June, bringing the total to 6.5 million since the recession began in December 2007, the most of any downturn since the Great Depression.

“All districts indicated that labor markets remain slack, with most sectors either reducing jobs or holding them steady and aggregate employment continuing to decline,” the Fed said today. That weakness “has virtually eliminated upward wage pressure,” the report said.

At the same time, the Fed said seven districts “noted selective hiring,” such as by some companies looking to snap up “experienced talent.”

Main Rate

Inflation, using the government’s personal consumption expenditures price index, slowed to a 0.1 percent annual pace in May from 2.6 percent in September 2007, when Bernanke and his colleagues began a series of 10 reductions in the main rate.

“Districts reported varied — but generally modest — price changes across sectors and products, with competitive pressures damping increases,” the Fed said.

Housing markets “stayed soft” in most areas, “although many noted some signs of improvement,” the report said. Lower- priced and entry-level homes “continued to perform relatively well” in part because of a first-time homebuyer tax credit.

A gauge of U.S. house prices posted its first monthly gain in three years, while purchases of new homes in the U.S. climbed 11 percent in June, the biggest gain in eight years, reports this week showed.

Commercial real estate has fared worse, with two-thirds of districts showing markets “weakened further” and others being “slow,” the Fed said. The outlook was “mixed,” and “tight credit” constrained construction, the report said.

About $2.2 trillion of U.S. commercial properties bought or refinanced since 2004 are now worth less than the original price, raising the threat of more foreclosures, according to Real Capital Analytics, a New York-based research firm.

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PAY CLOSE ATTENTION TO SOARING INSIDER SELLING !!!!!!

CDS MARKET STATS

IMF Warns Of Increased Risk To Financial Stability

Amid all the “pink shoots” and euphoria that is currently seizing the markets and pundits all across the board, some people are yelling that dangers are still ahead.

Like Cassandra (and our modern-day TA version of Market Cassandra, Chuck) these experts are calling out attention to the dangerous truths ahead both, in the market and the general state of the economy… But are apparently destined not to be believed until it is too late.

In some way, thank GS for washing the brains of the markets with an influx of multi-billion bonuses.

But as reason always gains the upper hand, and I don’t mind being considered a “Cassandra” in such good company, let us consider the latest analysis of the IMF (International Monetary Fund). Far from considering that pink shoots and bonuses erased totally the risk for banks and States, the IMF nails it down in a single paragraph:

Risks to financial stability have intensified since October 2008. Macroeconomic risks have risen as global growth has fallen precipitously alongside a sharp slowdown of global trade. Credit risks have also risen as a deterioration of economic and financial conditions have resulted in rising loan losses. At the same time, the flight from risky assets and illiquid market conditions has increased funding costs, even as risk-free rates have declined with monetary easing. Emerging market countries are also feeling the effects of the advanced economies’ financial and economic difficulties, and there is the potential that the abrupt pullback from emerging market assets by investors and heightened financing costs will erase some of the economic gains these countries have made in recent years.

Absent a serious deleveraging on both the sovereign and the financial level, the risk is present that both the States and the banks will end up defaulting on their huge debts. In that respect, GS’ attitude to take just one has confined to utter irresponsibility, when paying its huge bonuses instead of using the money to deleverage itself significantly.

As to the US issue, the IMF tackles it too, indirectly:

Until now banks have managed to obtain sufficient capital to offset existing writedowns, but that is mainly due to the massive public sector injections of capital in the fourth quarter (Figure 2). The worsening credit conditions affecting a broader range of markets have raised our estimate of the potential deterioration in U.S.- originated credit assets held by banks and others from $1.4 trillion in the October 2008 GFSR to $2.2 trillion. Much of this deterioration has occurred in the mark-to-market portion of our estimates (mostly securities), especially in corporate and commercial real estate securities, but degradation is also occurring in the loan books of banks, reflecting the weakening outlook for the economy.

The IMF goes on to estimate that only to prevent the situation from deteriorating further, capital-wise, an injection of 500 Bn USD would be necessary in fresh capital during 2009 and 2010 for European and American banks together, only to avoid them failing. That means as much more money in bailouts. The intelligent reader will have noticed that there is no talk whatsoever of “profits” and unlike many who have just begun anticipating an era of renewed profitability for banks, the future looks bleak for obtaining any profit at all in that sector.

Considering the inefficiency of the current bailout strategy, the IMF recommends thus finally having the courage to slash into the banks too sick to live. It appears to be the first item of common sense and sensible recommendation in months since the inception of the crisis. Some of the recommendations such as the creation of a “bad bank” for the toxic assets look more questionable.

• Move expeditiously toward recapitalization and measures to deal with distressed assets. An assessment of bank’s business plans—and deciding which financial institutions will need public monies based on their viability—should be done proactively by supervisors, since history suggests that the longer one waits, the higher the fiscal costs. Banks with heavy distressed asset burdens, but solvent and viable, would be restructured and recapitalized, and those that are not viable could be taken over by the public sector and either restructured and resold, or wound down in an orderly fashion. Generally, increasingly stringent conditions would be applied as banks receive larger amounts of public funds. The restructuring process might involve the use of a publicly-owned “bad bank” to remove distressed assets from the balance sheets of institutions.

• Immediate, short-run policies and actions taken need to be consistent with the long-run vision for the structure of a viable financial system. Without this end-point, the credibility of the policies will come under question. In addition, it will be important to recognize that the adjustment will need to continue for some time and that the viable financial sector of the future will be less leveraged and therefore smaller relative to the rest of the economy. That said, reaching higher bank capital ratios needs to be done in a gradual manner in order to avoid any additional adverse feedback effects and to encourage lending to healthy borrowers. Experiences of previous crises show that credit growth will be slow to return and does not normalize until banks’ balance sheets are cleansed.

• Rules governing the process toward a more stable financial system need to be clear and consistent. To restore confidence, transparency and clarity are essential in both the private sector and public policy actions. Authorities should maintain transparency of policies, the use of public support, and any decisions taken as regards individual financial institutions. This applies in particular to the identification and valuation of assets, especially those of which the banks are to be relieved, to the conditions applied to their recapitalization, and to the level of capital buffers that the authorities consider adequate.

• International cooperation on a common framework for financial policies should receive high priority. The application of substantially different conditions when supporting financial institutions should be avoided in order to prevent unintended consequences that may arise from competitive distortions and regulatory arbitrage. International coordination is also needed to avoid excessive “national bias,” whereby domestic institutions are favored or local credit provision is encouraged, to the detriment of other countries. A more consistent insolvency framework for financial institutions would also help.

The interesting aspect of this report, in the end, is that it tells us in a clear manner that 1° the recession is not ended unlike some irresponsible persons have been clamoring around; 2° there is no way to end this crisis without tackling decisively the issue of the toxic balance sheets of the banks. And so far, as much the US as Europe have been reluctant to oblige the bankers to clean up their toxic assets and face their losses.

So, if you have been riding the tide of euphoria on the back of the financials, it is highly time to exit these. We are about to begin our second leg of the crisis and when it will begin, real despair will rear its ugly face on the markets. States and banks have both used up their bullets throwing money and debt into black holes. This time around, it will not be “too big to fail”, but “too rotten to stand” that will take the priority in handling banks.

Oil Slips Below $66 pb

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Asian Markets Tank With The Shanghai Composite Off 5%

By Patrick Rial

July 29 (Bloomberg) — Asian stocks dropped for the first time in 12 days as lower commodity prices and disappointing profit reports raised concern the rally had made equities expensive relative to earnings prospects.

China’s Shanghai Composite Index, valued at its priciest in 17 months, slumped 5 percent. Jiangxi Copper Co. slumped 9 percent in Shanghai as it forecast a drop in profit and prices of the metal slumped. China Petroleum & Chemical Corp. sank 5 percent in Hong Kong as the Chinese government cut gasoline prices. Weaker earnings dragged Shimano Inc., Japan’s No. 1 maker of bicycle components, and DeNA Co., which operates auction Web sites, lower in Tokyo down by more than 4 percent.

The MSCI Asia Pacific Index lost 1.1 percent to 109.35 as of 7:32 p.m. in Tokyo, with two stocks falling for each one that rose. The gauge had climbed 13 percent in the past 11 days, the longest winning streak since January 2004. The rally took average company valuations to the highest since March 30.

“Investors are getting more selective now since equities are no longer cheap,” said Manpreet Gill, Asian strategist at Barclays Wealth, which has $238 billion in assets. “A further correction is possible.”

Hong Kong’s Hang Seng Index slumped 2.4 percent. China Cosco Holdings Co., the world’s biggest operator of dry-bulk ships, sank 6.7 percent in Hong Kong after forecasting a loss.

Japan’s Nikkei 225 Stock Average added 0.3 percent. JFE Holdings Inc., Japan’s second-largest steelmaker, and Hitachi Ltd., the country’s biggest manufacturer, climbed more than 4 percent on brokerage upgrades. China State Construction Engineering Corp. jumped 56 percent on its first day of trading in Shanghai, while BBMG Corp., the biggest cement supplier in Beijing, surged the same amount in its Hong Kong debut.

Consumer Confidence

Futures on the Standard & Poor’s 500 Index lost 0.4 percent. The gauge fell 0.3 percent yesterday after the Conference Board’s index of U.S. consumer confidence slid to 46.6 in July, compared with the 49 projected by economists.

The report caused commodity prices to decline. A gauge of six metals in London sank 1.2 percent yesterday, the first decline in 12 days. Copper fell the most in two weeks, while crude oil retreated 1.7 percent to $67.23 a barrel in New York, the first drop in four days.

Jiangxi Copper, China’s largest producer of the metal, sank 9 percent to 42.62 yuan in Shanghai after saying first-half profit may fall between 57 percent and 64 percent from a year earlier. Rio Tinto Group, the world’s No. 3 mining company, lost 2.4 percent in Sydney to A$58.

Lower Prices

China Petroleum, Asia’s biggest oil refiner, fell 5 percent to HK$6.78. China’s government cut prices on gasoline and diesel by at least 3.3 percent, reversing a trend of rising ceilings. Lower prices reduce profit margins for refiners.

Shimano slumped 4.4 percent to 3,670 yen after profit fell 48 percent in the first half of the year. DeNA tumbled 9.1 percent, the MSCI Asia Pacific Index’s biggest decline, to 289,900 yen after first-quarter net income dropped by 26 percent. KBC Securities Japan downgraded the stock to “sell,” saying the company’s results had “disappointed.”

In Hong Kong, China Cosco sank 6.7 percent to HK$10.82 after saying it expects to post a net loss for the first half of 2009 because the global recession hurt international trade.

Analysts have boosted estimates since the beginning of April for companies in Asia outside Japan, according to data compiled by Bloomberg. Profit forecasts have actually declined within Japan, the data show.

Japanese Production

The MSCI Asia Pacific Index rallied 57 percent through yesterday from a more than five-year low on March 9 on rising confidence the worst of the global recession has passed. A government report tomorrow may show Japan’s manufacturers increased production for a fourth month in June, capping the largest quarterly output expansion in more than 50 years.

Federal Reserve Bank of San Francisco President Janet Yellen said yesterday the U.S. economy is showing the “first solid signs” of emerging from the recession and should resume growth later this year.

Companies in the MSCI Asia traded at an average 24.7 times estimated profit as of yesterday, the highest since March 30, as investors bet earnings will recover. The ratio compares with 16.3 times for the Standard & Poor’s 500 Index.

Stocks in the Shanghai Composite are valued at 24.7 times estimated earnings, the highest since February 2008. The gauge has climbed 79 percent this year amid record bank lending and stimulus measures from the government.

Expensive Valuations

The Chinese index drop today was the steepest since Nov. 18. Beijing’s Caijing magazine said yesterday China Construction Bank Corp.’s loan growth cap will limit new lending in the second half of the year to a third of the level in the first six months. Additionally, China may strictly enforce requirements on mortgages for second homes, the National Business Daily reported.

“Speculation the central bank may take steps to rein in liquidity worried the market,” said Gabriel Gondard, deputy chief investment officer at Fortune SGAM Fund Management Co., which oversees about $7.2 billion in assets. “A lot of people were looking to take profit” after the market gains.

JFE, the steelmaker that yesterday forecast a return to profit, rose 4.2 percent to 3,700 yen. Takashi Enomoto, an analyst at Bank of America Corp.’s Merrill Lynch & Co. unit, boosted his target price on the stock as exports to China are rising and the shares look cheap based on estimated earnings.

Hyundai Steel Co., South Korea’s biggest maker of construction steel, advanced 4.9 percent to 67,000 won. The company reported second-quarter profit that beat analyst estimates on a stronger won and lower costs.

The “market environment may improve in the second half, helped by increasing demand from the public sector and seasonal demand,” the company said in an e-mailed statement.

Biggest IPO

Hitachi climbed 5.1 percent to 308 yen. The company reported a 50 billion yen ($529 million) operating loss yesterday, which Nomura Holdings Inc. analyst Masaya Yamasaki said was likely better than the company’s own projection. The shares were boosted to “overweight” at JPMorgan Chase & Co.

China State Construction, the nation’s biggest homebuilder, jumped 56 percent to 6.53 yuan on its first trading day in Shanghai. The 50.2 billion yuan ($7.3 billion) raised in the initial sale was the world’s largest initial public offering in 16 months.

BBMG rallied 56 percent to HK$9.97. It raised HK$5.95 billion ($768 million) in Hong Kong’s second-biggest public offering this year.

European Stocks Rise On better Than Expected Earnings

By Adria Cimino

July 29 (Bloomberg) — European stocks rose as earnings from Akzo Nobel NV and Bayer AG beat analysts’ projections, overshadowing declining commodity prices and a wider-than- estimated loss from ArcelorMittal SA. Asian shares and U.S. index futures fell.

Akzo Nobel, the world’s largest maker of coatings and paints, and Bayer, which supplies plastics to the automotive industry, advanced more than 5 percent. PSA Peugeot Citroen and Daimler AG jumped at least 5 percent after posting narrower- than-estimated losses. Jiangxi Copper Co. slumped 9 percent in Shanghai after forecasting a decline in profit, leading Chinese stocks to the steepest drop in eight months. ArcelorMittal, the world’s biggest steelmaker, slid 3.7 percent.

The Dow Jones Stoxx 600 Index climbed 0.9 percent to 220.6 at 12:03 p.m. in London. The measure has surged 12 percent since July 10 after companies from Goldman Sachs Group Inc. to Roche Holding AG and Apple Inc. posted results that exceeded estimates and U.S. Federal Reserve Chairman Ben S. Bernanke said the world’s largest economy is showing “tentative signs of stabilization.”

Earnings “kicked off this rally,” said Lothar Mentel, chief investment officer at Octopus Investments Ltd. in London, which oversees $2.3 billion. “A lot of other factors are also improving the sentiment of investors. I see the market definitely going higher by the end of the year.”

Federal Reserve Bank of San Francisco President Janet Yellen said yesterday that the U.S. economy is showing the “first solid signs” of emerging from the recession and should resume growth later this year.

U.S. Stocks

U.S. stocks fell yesterday and the Standard & Poor’s 500 Index retreated from an eight-month high as consumer confidence trailed projections and companies from Office Depot Inc. to Coach Inc. posted worse-than-estimated results. S&P 500 futures slipped 0.4 percent today.

While the S&P 500 is up 11 percent since July 10 after companies from Intel Corp. to Mattel Inc. beat estimates, Bloomberg data shows per-share profits have dropped 28 percent on average for companies that reported since July 8.

Orders for durable goods in the U.S. probably dropped in June for the first time in three months, reflecting auto-plant shutdowns, economists said before a Commerce Department report at 8:30 a.m. in Washington.

Akzo Nobel

Akzo Nobel jumped 9.4 percent to 38.35 euros. Earnings before interest, taxes, amortization and depreciation fell 9 percent to 527 million euros ($746 million), beating a 414 million-euro prediction from an analyst survey.

Bayer soared 5.6 percent to 42.28 euros. The company said net income dropped to 532 million euros, beating the 393.1 million-euro median estimate of 11 analysts surveyed by Bloomberg.

More than half of per-share earnings at European companies that have reported results since July 8 beat analyst forecasts, according to Bloomberg data. Profits in the Stoxx 600 fell 30 percent on average in the period, while 58 out of 106 companies have reported better-than-estimated results, the data show.

The Stoxx 600’s valuation has climbed to 28.3 times the earnings of its companies, the highest level since January 2004, according to Bloomberg data.

Peugeot soared 8.9 percent to 20.06 euros. France’s biggest automaker reported a 962 million-euro net loss for the first half as it slashed production amid the global slump in auto sales. Analysts had expected a loss of 971.5 million euros, according to the median of estimates compiled by Bloomberg.

‘Gradual Improvement’

Daimler advanced 5.9 percent to 31.85 euros. The world’s second-largest maker of luxury cars and reported a 1.06 billion- euro second-quarter net loss, narrower than the 1.14 billion- euro median estimate in a Bloomberg News survey of analysts, and forecast a “gradual improvement” in operating profit

YHOO & MSFT Try to Tackle Web Search  Against GOOG

By Dina Bass and Brian Womack

July 29 (Bloomberg) — Microsoft Corp. and Yahoo! Inc. are getting closer to signing an Internet-search partnership to challenge market leader Google Inc., a person familiar with the matter said.

An agreement may be announced as soon as today, said the person, who declined to be identified because the talks are private. The partnership would involve the companies sharing revenue from Web-search ads, the person said.

Microsoft, the world’s largest software maker, is seeking more users for its Bing Internet search engine, which has about an eighth of Google Inc.’s market share in the U.S., according to research firm ComScore Inc. Yahoo, which has posted three straight quarters of sales declines, may be able to save at least $500 million by working with Microsoft, Yahoo Chief Executive Officer Carol Bartz said in June.

Google had about 65 percent of the U.S. Web-search market in June, according to Reston, Virginia-based ComScore. Yahoo and Microsoft had 28 percent combined.

Adam Sohn, a spokesman for Redmond, Washington-based Microsoft, declined to comment. Kim Rubey, a spokeswoman for Sunnyvale, California-based Yahoo, also wouldn’t comment.

Microsoft rose 36 cents to $23.47 yesterday in Nasdaq Stock Market trading. The shares have jumped 21 percent in 2009. Yahoo, up 41 percent this year, added 22 cents to $17.22.

Abandoned Bid…..

Mortgage Companies Warn of Foreclosures

By Al Yoon

NEW YORK (Reuters) – Companies that service risky residential mortgages are warning U.S. officials that a key program to slow foreclosures may push some financing costs higher and derail their efforts, said a leading subprime firm.

Companies forming the Independent Mortgage Servicers Coalition, service many of the riskiest mortgages made during the housing boom, making them key players in programs to rein in foreclosures. The group collects and distributes payments on more than $700 billion in loans, according to its leader, Carrington Mortgage Services of Santa Ana, California.

Their concerns about financing payments for defaulted homeowners comes as pressure mounts from Congress, regulators and state legislators for servicers to do more for the plan, which aims to slow foreclosures and modify loans. The U.S. Treasury wants the companies to spend more on its resources, including hiring staff and expanding training programs.

At least four servicers from the coalition were among the 25 meeting with the Treasury on Tuesday, where new commitments were forged to increase foreclosure prevention efforts under President Obama’s Home Affordable Modification Program.

But manpower isn’t the main worry for the independent servicers, which don’t include large banks such as Wells Fargo & Co. Implementing the program means giving delinquent homeowners more time fix their loans, which to servicers will the boost costs of extending payments to investors as contractually promised.

Matching costs of servicing to public policy is growing increasingly difficult, said Bruce Rose, chief executive officer and general partner of Greenwich, Connecticut-based Carrington Capital Management, LLC, which owns CMS. Rose attended the meeting with Treasury.

“We are in a position where it’s a very tough balance act, and that’s weighing heavily on us now,” said Rose, in an interview on Monday. “This is a classic case of an unfunded government mandate.”

The costs of borrowing to finance delinquent payments to bond investors far outweigh expected revenue from incentives paid by the government, Rose said. The government will pay servicers $1,000 for every loan modified, and another $1,000 a year for three years if the borrower stays current.

The group since September has approached the Treasury, the Federal Reserve and Congress for help in funding the temporary “advances” that are fully reimbursed when a loan is modified or foreclosed, Rose said. Help offered through the Fed’s Term Asset-Backed Securities Loan Facility (TALF,) which allows for the pooling of advances for sale to investors, has backfired, and is increasing financing costs, he said.

The coalition — which has included Ocwen Financial Corp (OCN.N), GMAC-RFC, and Fortress Investment Group’s (FIG.N) Nationstar Mortgage — also tried unsuccessfully to arrange liquidity via the Troubled Asset Relief Program in 2008. GMAC-RFC is no longer a member, a spokeswoman said.

Standard & Poor’s this month delivered a blow to Carrington and other potential issuers of TALF-eligible bonds backed by servicing advances, by sharply discounting the value of the assets that would go into the deals, Rose said. For Carrington, that would mean just 64 cents of every dollar in assets would garner a AAA rating, the blessing required for inclusion in a TALF deal……

Mortgage Applications Drop 6.3%

CHICAGO (MarketWatch) — Mortgage applications fell 6.3% last week from the prior week as refinancing demand ebbed, the Mortgage Bankers Association said Wednesday.

Applications for home-purchase mortgages held steady in the week ended July 24, the trade group said.

Seasonally adjusted refinancing applications fell nearly 11% as filings to refinance existing home loans accounted for 52.6% of total applications, down from 55.5% the week before. The seasonally adjusted purchase-mortgage index was unchanged from the week ended July 17.

On an unadjusted basis, mortgage applications are running 16.1% above their levels a year ago, the Washington-based MBA’s data showed. The weekly survey covers about half of all U.S. retail residential mortgage applications.

The average contract rate for a 30-year, fixed-rate loan increased to 5.36% in the latest survey from 5.31% in the prior week. See more on rates in MBA data for the July 17 week.

The mortgage-purchase trend is supported by other recent data showing home sales rising and home prices stabilizing. Read more on the latest figures for new-home sales. See how housing prices rose in May for the first time in 34 months.

AAPL Rejects GOOG Phone Apps

AAPL reportedly has rejected Google Voice as an iPhone application.

The Techcrunch blog said Monday that Apple (NASDAQ: AAPL) won’t let Google (NASDAQ: GOOG) offer its Internet phone service through the iPhone App Store.

Other bloggers are pointing at Apple’s exclusive iPhone carrier in the U.S., AT&T Inc. (NYSE: T), as the party responsible for the rejection.

That’s because Google Voice offers for free some features that compete with services that AT&T charges for.

Google Voice offers one number for all of a user’s phones, voice-activated features and free U.S. long distance. It’s available by invitation only at this time.

Techcrunch reported that a Google spokesperson offered this comment: “We work hard to bring Google applications to a number of mobile platforms, including the iPhone. Apple did not approve the Google Voice application we submitted six weeks ago to the Apple App Store. We will continue to work to bring our services to iPhone users — for example, by taking advantage of advances in mobile browsers.”

Apple previously rejected Google Latitude, the location-based tool that lets users see where their friends are, from the iPhone store.

But as it did in that situation, it is expected that iPhone owners will be able to download Google Voice from the Web. It won’t work as seamlessly and may not be able to use all of the features, however.

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