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Good or Bad? Low Rates Forces Companies to Stuff Cash Into Pension Plans
With pensions being largely underfunded one could say this is a good thing. On the other hand is this hurting cap ex and job creation?
Comments »Supreme Court Documents Suggest BoA Settled for Too Little and Continued Questionable Mortgage Practices Long After Acquiring Countrywide
“Bank of America has long rued its decision in 2008 to acquire Countrywide Financial, the subprime mortgage giant. To date, the bank has set aside some $40 billion to settle claims of mortgage misconduct that occurred before it acquired the freewheeling lender.
It has been a regular refrain at Bank of America. Last month, Brian T. Moynihan, the bank’s chief executive, told Bloomberg television at the World Economic Forum in Davos, Switzerland, that carrying Countrywide was like climbing a mountain with ”a 250-pound backpack.”
But according to new documents filed in state Supreme Court in Manhattan late on Friday, questionable practices by the bank’s loan servicing unit have continued well after the Countrywide acquisition; they paint a picture of a bank that continued to put its own interests ahead of investors as it modified troubled mortgages.
The documents were submitted by three Federal Home Loan Banks, in Boston, Chicago and Indianapolis, and Triaxx, an investment vehicle that bought mortgage securities. They contend that a proposed $8.5 billion settlement that Bank of America struck in 2011 to resolve claims over Countrywide’s mortgage abuses is far too low and shortchanges thousands of ordinary investors….”
Comments »Gapping Up and Down This Morning
$HLF Share Fall in Pre-Market Trade as FTC Announces Probe
” NEW YORK (New York) – Herbalife HLF -9.61% , the nutritional products distributor, is under scrutiny by the Federal Trade Commission, according to the New York Post. The report said the FTC has received 192 complaints against the firm in the last seven years. Billionaire hedge fund manager Bill Ackman, CEO of Pershing Square…”
Comments »Small Business in the U.S. See a Slight Rise in Borrowing Costs
“SAN FRANCISCO (Reuters) – Borrowing by small U.S. businesses rose marginally in December, eking out a tiny gain for the year and suggesting headwinds for economic growth for the first few months of 2013, a report on Monday showed.
The Thomson Reuters/PayNet Small Business Lending Index, which measures the overall volume of financing to small U.S. companies, rose to 112 from an upwardly revised 111.1 in November, PayNetsaid.
Borrowing was up just 1 percent from a year earlier.
PayNet had initially reported the November figure as 108.3.
PayNet founder Bill Phelan, located in Chicago, said the index suggests small businesses “haven’t come out of their shell.” PayNet’s lending index typically correlates to overall economic growth one or two quarters in the future.
“It’s underwhelming,” he said. “The next two to five months are going to be pretty slow.”
Small businesses are often responsible for the bulk of new job creation after recessions. The recent recession ended in 2009, but sluggish growth has meant weak job growth, and unemployment in January rose to 7.9 percent….”
Comments »Small Lenders Enjoy Mortgage Wave as Big Banks Pull Back
“(Reuters) – Guaranteed Rate, Inc, a home loan company, opened shop in 2000 in Chicago with a single office. Now it is one of the 20 biggest U.S. mortgage lenders, with more than 140 offices.
Most of that growth has come in the last two years and Chief Executive Victor Ciardelli said in an interview he is not planning to slow down.
“We’ve hired over a thousand people over the last year and we’re trying to hire a ton more,” Ciardelli said.
Guaranteed Rate is one of scores of independent mortgage lenders and community banks pushing up through the rubble of the housing collapse, as profits rise amid improving demand for home loans for new purchases or mortgage refinancing. They are winning business from banks such as Citigroup Incor Bank of America Corp that have retrenched after the financial crisis.
The five biggest U.S. mortgage lenders controlled just 53.2 percent of the market last year, down from nearly two-thirds in 2010, Inside Mortgage Finance data shows. As small lenders grow, that share could shrink to 40 percent of the $1.8 trillion mortgage market by 2014, a recent FBR Capital Markets report forecast.
The rise of smaller lenders is a boon for consumers. Several smaller lenders said lower costs, low interest rates and their faster processing times allowed them to be more aggressive on pricing than the bigger banks….”
Comments »JAL Would Like to Discuss Compensation With $BA Over Grounding of Dreamliners
“TOKYO (Reuters) – Japan Airlines Co Ltd said it will talk to Boeing Co about compensation for the grounding of the 787 Dreamliner, adding that the idling of its jets would cost it nearly $8 million from its earnings through to the end of March.
The carrier, which operates seven of the 50 Dreamliners in service around the world, said robust demand on European, North American and Southeast Asian routes would help offset the impact of the 787’s grounding, and it increased its annual operating profit forecast by almost 13 percent.
“Rather than negotiations with Boeing, the important thing now is getting the 787 flying again safely as soon as we can,” said JAL’s president Yoshiharu Ueki. “However, when the situation has settled down we can and are preparing to begin those talks.”
Rival All Nippon Airways, which has more 787s than JAL, said last week it would seek compensation from Boeing once the amount of damages was clearer….”
Comments »Is $AAPL’s Design Team On the Way Out ?
“Given Apple’s commitment to secrecy, it’s hard to get a good sense of what is going on inside the company.
But in the opinion of one respected industry observer, Paul Kedrosky, some of Apple’s recent missteps can tell us a lot about that.
In an interview with Bloomberg West yesterday, Kedrosky said Apple’s inability to meet demand for its new iMacs–a problem that contributed to disappointing Mac sales in Q4–as well as its cancellation of many iPhone component orders, mean that one of Apple’s key competitive advantages may be disappearing.
Kedrosky believes that Apple’s iMac problems reveal an important change in the power balance within the company.
Specifically, Kedrosky thinks that, in the power-vacuum following Steve Jobs’ death, the design team, led by Jony Ive, have been given too much latitude–such that Apple is now designing products that it is not capable of manufacturing as smoothly and quickly as it needs to to meet demand….”
Comments »SUCKER: The King Tainted His Burgers With Horse Meat – $BKW
“Burger King has admitted that some of its burgers sold in the U.K. and Ireland were, in fact, tainted with horsemeat.
This is just the latest chapter in an ongoing scandal in the U.K. and Ireland involvingbeef burger patties tainted with meat from horses and pigs. U.K. supermarket chain Tesco and other companies have also been affected. It’s suspected that a meat distributor in Poland, which worked with all the companies in question, used meats other than beef as filler in cheap burgers.
Burger King had originally stressed that its patties are made with 100 percent beef, although it later dropped Silvercrest, the food processing plant that received meat from the Polish distributor.
The Guardian has a statement from Burger King….”
Comments »Blackberry, Formerly Known as RIM, Will Trade Under New Symbol After February 4th – $BBRY
“BlackBerry, the Canadian smartphone maker formerly known as RIM — aka Research In Motion — will start trading under its new name on February 4, with its new ticker symbols effective from the start of trading on that day.
BlackBerry said it will trade as BBRY on the Nasdaq, and as BB on the Toronto Stock Exchange….”
Comments »January Auto Sales See Double Digit Gains – $GM, $F, $TM
27% to be exact…..
“Auto sales showed surprising strength in January with all three of the domestic manufacturers — General Motors, Ford and Chrysler — reporting double-digit gains.
“Automakers are kicking off the year strong, staying true to disciplined incentive spending as many curtailed their spending in January as the current lineup of products speak for themselves,” said Kristen Andersson, an analyst for auto price information company TrueCar.com…”
Comments »Gapping Up and Down This Morning
HBO Coming to $AAPL TV
“Apple is adding HBO Go to Apple TV by mid-2013, Bloomberg reports.
It will only be available to Time Warner subscribers who already pay for HBO. But those who have it will be able to watch more than 600 hours worth of movies and TV shows, according to Bloomberg’s sources.
HBO Go is already offered on Roku and Microsoft’s Xbox….”
Comments »$GOOG Offers Up a Settlement in EU Antitrust Probe
“Google Inc. (GOOG) submitted an offer to European Union regulators in a bid to settle a probe into whether the world’s largest search engine operator discriminates against rivals, the EU’s antitrust chief said.
“It has arrived,” EU Competition Commissioner Joaquin Almunia told reporters in Brussels today. He said his officials would now study the proposal.
Almunia had asked Google to submit concessions by the end of January to address allegations that the company promotes its own specialist search-services, copies rivals’ travel and restaurant reviews, and has agreements with websites and software developers that stifle competition in the advertising industry. He first told Google in May that he wanted to settle the case.
Google sent a “detailed proposal,” said Antoine Colombani, a spokesman for Almunia. He said he couldn’t anticipate if the offer was sufficient to allay antitrust concerns or whether it would be sent to rivals and customers for comments. If this market test is successful, the EU can make the commitments legally binding. Such a settlement would avoid possible fines against the Mountain View, California-based company.
Google continues “to work co-operatively with the commission,” the company’s Brussels-based spokesman Al Verney said in an e-mailed statement.
U.S. Probe…”
Comments »The Netherlands Nationalizes a Second Bank Reeling from Real Estate Asset Losses
“The Netherlands took control of SNS Reaal NV (SR) after real estate losses brought the fourth- largest Dutch lender to the brink of collapse, the country’s second banking nationalization since 2008.
The move, aimed “at stabilizing the SNS Reaal group,” will cost taxpayers 3.7 billion euros ($5 billion), the Dutch Finance Ministry said in a statement today. SNS’s property- finance unit will be separated from the company.
“I scrutinized all alternative solutions involving market parties,” Finance Minister Jeroen Dijsselbloem said. “Yesterday night I found myself compelled to conclude no acceptable total solution was offered. I therefore had to use the instrument of last resort, which is nationalization.”
The lender, which acquired ABN Amro Holding NV’s property- finance unit in 2006, has been hurt by losses on real estate loans that have left it struggling to repay a government bailout before next year’s deadline and bolster capital buffers. The nationalization includes all issued shares, core tier 1 capital securities and subordinated bonds, the ministry said.
SNS shares were suspended in Amsterdam. They last traded yesterday at 84 cents, valuing the company at 242 million euros, and have declined 57 percent in the past year.
Fortis, ABN…”
Comments »$TM Suppliers Face EU Fines in Largest Cartel Probe Ever
“Toyota Motor Corp. (7203) suppliers embroiled in the largest cartel probe on record have rebounded from a slump that followed almost $1 billion in fines in Japan and the U.S. Now they face the prospect of even more penalties in Europe.
EU fines will probably be announced this year, said Takeshi Shinagawa, a director at the Japan Fair Trade Commission. Parts makers Sumitomo Electric Industries Ltd. (5802), JTekt Corp. (6473) and at least 12 others could get EU cartel fines higher than those levied in Japan, he said.
Toyota affiliate Denso Corp. (6902) and Sumitomo Electric, also a supplier to Honda Motor Co. and Nissan Motor Co., have been investigated in cartel probes following raids of four manufacturers by watchdogs in the U.S., the EU and Japan in 2010. Fines this year may be big enough to cause declines in the component makers’ shares, said Syusaku Nishikawa, an analyst at Daiwa Securities Co….”
Comments »$NOK Re-brands Itself by Signing Up $TM Europe for in Car Maps
“Nokia’s rebranded HERE mapping service has snagged another car-maker — signing Toyota Motor Europe to use Nokia Local Search for Automotive for its Touch & Go in-car navigation and infotainment systems. As well as digital maps, Nokia’s service will bring community-generated content to the in-car systems — including “millions” of ratings, reviews and images.
Toyota said the Nokia powered mapping technology is expected to be in Toyota systems that are on sale from early 2014 in Europe, Russia and the Middle East.
In September last year, prior to the HERE rebranding of its digital mapping service, Nokia signed location deals with BMW, Mercedes A-Class, Garmin, Hyundai, Pioneer and Volkswagen Group.
On a “global average basis”, Nokia said it now powers four out of five cars with “fully-integrated in-dash navigation systems”. ”Location & Commerce continue to build partnerships with a number of major industry players, particularly in the area of automotive-grade maps content and solutions. We are providing content to partners including Audi, BMW, Chrysler, Dacia, ESRI, Ford, Garmin, Hyundai, Kia, Mercedes, Nikon, Pioneer, Scania, Toyota and Volkswagen,” a company spokeswoman added.
Earlier this month, Google announced its own mapping win in the in-car space, signing Hyundai Motor Company — which owns the Hyundai and Kia car brands — to use Google Maps and Places in its telematics systems, specifically for Hyundai’s Blue Link and Kia’s second-generation UVO eServices….”
Comments »New Patents From $AAPL Could Turn iTunes into Mobile Micro Lender
“Today the USPTO published an Apple patent application (spotted by UnwiredView) that ventures a little farther afield than most, and describes a mobile banking concept that is truly innovative, which could essentially turn iTunes into a micro-lending bank. The patent outlines a system whereby a user would post requests for small amounts of cash using their iPhone, which other nearby users could respond to to provide some quick funds when there’s no ATM nearby.
The lending party would be paid the full amount from an account (which, while not named specifically, could easily be an iTunes account), which would first deduct that total, plus a small service fee, from the iTunes account of the person making the cash request. So, in a real world example, I could open this “Cash Transfer Application,” type that I need $20 and that I’m at the Starbucks at 4th and Main, enter a search range and send it out. Then, anyone within that radius also using the app would get the request, and be able to volunteer to walk over to my location and provide me with the amount requested on the spot….”
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