Finance & Economics News

[Rasputin]

Goodyear Tire & Rubber Company started the year off right, with price hikes offsetting the rising cost of raw materials.

Goodyear Tire & Rubber (nyse: GT - news - people ) posted a profit of $147.0 million, or 60 cents per share, on sales of $4.9 billion. Analysts surveyed by Thomson Financial had expected profits of 47 cents per share, on sales of $4.8 billion. The company had posted a loss for the first quarter last year.

"Our excellent first-quarter results demonstrate the success of our strategies to grow our higher-margin premium product lines, reduce costs and pay down debt," said Robert J. Keegan, chairman of Goodyear.

Shares of Goodyear were up 6.0%, or $1.66, to $28.91, in morning trading in New York.

The company said price increases drove up revenue per tire by 7.0%, while it offset rubber costs of $13.0 million.

International sales were the major driver for the quarter. Sales in Europe, the Middle East, and Africa, were up 17.6%, to $2.0 billion. Latin American sales increased 29.3%, to $530 million. Sales in the Asia Pacific were up 21.2%, to $465 million. The number of tires sold decreased in all regions except for the Asia Pacific. Currency translation had a positive impact on sales of $341 million.

Sales in the United States are still weak due to the troubled economy, decreasing by 1.0%, to $1.99 billion, but automakers are beginning to recover slightly, which has helped Goodyear.

Ford (nyse: F - news - people ) surprised Wall Street on Thursday, coming through with its first profitable quarter in nearly a year and moving closer to the black in its home market.

Ford had reported profits of $100.0 million, or 5 cents per share, compared with a loss of $282.0 million, or 15 cents per share, a year earlier. Sales fell 8%, to $39.4 billion, which excluded the Jaguar and Land Rover brands it was selling to Tata Motors (nyse: TTM - news - people ). (See: " Ford Gets Back In Gear")

Italian car manufacturer Fiat (nyse: FIA - news - people ) seems to be rising from the ashes as well. It posted sales growth to 15 billion ($23.56 billion), from 13.7 billion euros ($21.52 billion), in the first quarter, while net profit rose to 405 million euros ($636.25 million), from 353 million euros ($554.57 million). (See: " Fiat The Phoenix Keeps Rising")

[Rasputin]

In another era at Time Warner, before a star-crossed Internet merger, the hard-held belief of Gerald M. Levin, then the chief executive, was that “content is and will remain king, but distribution is the power behind the throne.”


These days the king seems to be losing his throne.

On Wednesday, Jeffrey L. Bewkes, who became chief executive in January, succeeding Richard D. Parsons, said that Time Warner would completely spin off its cable company, essentially shedding the pipes that have underpinned much of the company’s fortune.

Although the announcement was largely anticipated by Wall Street — it had earlier spun off a 16 percent stake to shareholders — it still underscored a profound philosophical shift.

For years, it was a widely held belief within Time Warner and the media business that there were real financial advantages to owning both the content — television shows and films — and the means of distributing it to people’s homes.

But Wednesday’s cable announcement, which came as Time Warner reported first-quarter earnings, spotlighted the company’s future as a pure content provider. From now on the media company will revolve around two core content businesses that have been out of the limelight in recent years: the Warner Brothers movie studio and Turner Networks, which includes the television channels TNT, TBS, HBO and CNN.

Although those divisions have produced steady revenue and cash flow, investors and the media have focused instead on the debate over cable and the drama unfolding (still) at AOL.

Without the cable business, the bulk of Time Warner’s revenue will come from the movie studio and the cable networks. In the first quarter, Warner Brothers generated $2.84 billion, while the networks brought in $2.66 billion; the cable business that is being split off brought in $4.16 billion in revenue in the first quarter.

“Over time, Warner Brothers has been a gold mine,” said Larry Haverty, who runs the Gabelli Global Multimedia Trust fund, which owns 230,000 shares of Time Warner. “And at the cable networks, they’ve done a great job. CNN has come back against Fox. And HBO is a juggernaut that is probably at a low ebb in terms of content.”

Mr. Bewkes, in a conference call, pointed to several growth areas. TNT and TBS, for example, will focus more on original programming than on introducing new channels. Original shows can be particularly valuable in the long run because the company owns the copyrights; some of Turner’s existing ones are “The Closer” and “Tyler Perry’s House of Payne.”

“While some network groups have invested in niche networks, we funneled our resources primarily into expanding our big-reach existing brands,” Mr. Bewkes said. He signaled that Time Warner would compete more directly with the broadcast networks for viewers and advertising dollars.

“We believe Turner is now positioned better than ever to challenge the broadcast networks,” he said.

On Wednesday, Time Warner reported net income of $771 million, or 21 cents a share, compared with $1.2 billion, or 31 cents a share, in the period a year ago, a 36 percent drop. Revenue increased 2 percent, to $11.42 billion.

Time Warner stock has languished for years as it cleared the wreckage from its ill-fated merger with AOL, and Wednesday’s news — which generally matched what analysts had anticipated — had little effect on the share price. Shares of Time Warner closed at $14.85 Wednesday, down 42 cents.

AOL is still a question mark for Mr. Bewkes, who has been in discussions about a possible deal to combine it with Yahoo, which itself has been fighting off a bid from Microsoft.

On Wednesday, Time Warner said that revenue at AOL — which has been in a seemingly perpetual state of transition from a subscriber business to an advertising business — declined 23 percent, to $1.1 billion.

But relative to some of its peers in the media industry, Time Warner’s stock price appears cheap — at least, that was the hopeful sentiment among some investors and analysts.

Mr. Haverty said that Turner and Warner Brothers were “a collection of businesses that anyone on the planet would say should be worth more than eight times trailing cash flow.”

Laura Martin, an analyst at Soleil Media Metrics, said, “the strength of the networks and film was an upside surprise.” Without cable, she said, Time Warner closely resembled Viacom, which combines a grouping of cable channels under the MTV Networks brand and the Paramount Pictures film studio.

Time Warner’s film business had a 4 percent increase in revenue, to $2.84 billion from $2.74 billion in last year’s first quarter. The division’s profit declined, however, to $183 million, from $243 million in the year-ago period, reflecting a $116 million restructuring charge from reorganizing New Line Cinema. Mr. Bewkes said the unit’s television production would continue to be a source of growth, particularly from selling shows to cable networks, like FX, that are not owned by Time Warner.

Another piece of Time Warner’s content business — although of lesser importance to investors — is its magazine publishing unit, Time Inc. The unit, which publishes Sports Illustrated, People, Time and Fortune, saw revenue remain essentially flat at about $ 1 billion, but its operating income, before depreciation and amortization, rose 73 percent, to $145 million.

[Rasputin]

نطق پيش از دستور محمدرضا تابش : از 200 ميليارد دلار پول نفت115 ميليارد آن غيب شده

محمدرضا تابش نماينده اردكان در مجلس هفتم و عضو فراكسيون اصلاح طلب اين مجلس روز گذشته در نطق پيش از دستور خود ضمن تشكر از مردم حوزه* انتخابيه*اش براي شركت در انتخابات، راي مردم يزد به اصلاح*طلبان را تبريك گفت و سپس در باره وضع مملكت گفت


امسال يكصد سال از استخراج نفت در ايران ميگذرد. درآمدهاي نفتي كشور به طور تصاعدي بالا و به همان ميزان قدرت خريد مردم پايين مي*رود.

جريان يكپارچه*اي، قدرت اجرايي كشور را در دست دارد و مسائل معيشتي، اجتماعي و فرهنگي مردم و تهديدهاي منطقه*اي و بين*المللي را براي ايران اسلامي نمي*توان پنهان كرد.

نرخ تورم حدود 20 درصدي اعلامي توسط بانك مركزي ايران در سال گذشته و گراني*هاي سرسام*آور امان از مردم بريده است،* مردم با خط فقر كه در كشور به ميزان 400 هزار تومان و در تهران 770 هزار تومان است، چگونه زندگي خود را اداره كنند؟

آيا تحت پوشش قرار گرفتن جمعيت شش ميليوني از سوي كميته* امداد امام خميني (ره) و سازمان بهزيستي كشور، شش ميليون نفر در نوبت و زير خط فقر مطلق بودن 35 درصد جمعيت كشور، باعث تاسف نيست؟ حذف فله*اي هزاران نفر از مديران مجرب و كارشناسان نخبه اصلاح*طلب كشور، ردصلاحيت گسترده نسل انقلاب در انتخابات، تنگ كردن دايره امنيت فكر، ترويج روزافزون خرافه و تحجر در سطوح رسمي، كشانيدن پاي نهادهاي فراگير ملي و انقلابي به ميدان مداخله*هاي جناحي و سياسي، بخشي از واقعيت*هاي نگران*كننده پيش*روي كشور ماست.

بر اساس محاسبات انجام شده، درآمد كشور در سال*هاي 84، 85 و 86 از محل فروش نفت، گاز و ميعانات گازي حدود 200 ميليارد دلار بوده است و بنا بر گزارش*هاي رييس جمهور هنگام تقديم لوايح بودجه، ظرف سه سال گذشته منابع ارزي خرج شده توسط دولت، 85 ميليارد دلار عنوان شده است كه مجلس و منتقدين دولت، رقم خرج كرد دولت طي اين سه سال را حدود 150 ميليارد دلار مي*دانند، بنابراين حق طبيعي مجلس و مردم است كه از ريز هزينه*هاي دولت آگاهي يافته و توضيح داده شود مابه*التفاوت رقم 85 ميليارد دلار تا 200 ميليارد دلار و يا 150 ميليارد دلار تا 200 دلار از كجا ناشي مي*شود.

[Rasputin]

Wall Street fell for a second straight day Tuesday as investors grew more worried that the financial sector is still suffering from the credit crisis. The Dow Jones industrials dropped more than 100 points, bringing their two-day loss to 235.
The market tumbled in early afternoon as concerns about financial companies intensified. Reports that Lehman Brothers Holdings Inc. planned to raise $4 billion in capital later expanded into a rumor that the investment bank had approached the Federal Reserve to borrow money.

[Rasputin]

رئیس جمهور ایران می گوید شیوه کنونی توزیع یارانه ها در کشور هدفمند نیست و هشدار داده است که دولت در صورت ادامه اوضاع جاری تا سه سال دیگر فلج خواهد شد.
محمودی احمدی نژاد اعلام کرد یکی از راه حل های دولت برای این وضع تقسیم مستقیم یارانه است.

وی گفت: "به زودی مركز آمار ايران اطلاعيه می*دهد و افراد متقاضی يارانه می*توانند با پر كردن فرمی اطلاعات بدهند و با استعلام از مراجع مختلف يارانه توزيع می*شود." وی توضیح بیشتری در مورد این طرح نداد.

محمود احمدی نژاد در سخنانی که از تلویزیون پخش شد به طور مفصل به تشریح معضلات اقتصادی کشور پرداخت و گفت دولت او طی دو سال و نیم مطالعه اکنون "تصویر روشنی از مشکلات اقتصادی" دارد.

وی رشد اقتصادی کشور را "نامتوازن" توصیف کرد و آن را به مشکلات ساختاری متعددی همچون نحوه اداره کشور با پول نفت به جای پول مالیات نسبت داد.

از نکاتی که رئیس جمهور ایران به شدت بر آن تاکید کرد نظام توزیع یارانه ها بود.

وی در مورد ضعف های این نظام چنین توضیح داد: "هم اکنون یارانه ها به صورت عمومی توزیع می شود و هدف معینی دنبال نمی شود. البته در ذهن مدیران ما این مساله وجود داشته که اقشار ضعیف از آن استفاده کنند اما فقرا واقعا چقدر از آن استفاده می کنند؟"


توزیع یارانه ها
هم اکنون یارانه ها به صورت عمومی توزیع می شود و هدف معینی دنبال نمی شود. البته در ذهن مدیران ما این مساله وجود داشته که اقضار ضعیف از آن استفاده کنند اما فقرا واقعا چقدر از آن استفاده می کنند؟


محمود احمدی نژاد

وی این نوع توزیع یارانه ها را برای قدرت رقابت کشور مخرب دانست: "هم اکنون یارانه ها از حالت مفید خارج و به عکس آن تبدیل شده است. در شرایطی که اقتصاد ما باید با دنیا رقابت کند با این گونه یارانه ها صنعت ما نمی تواند رقابتی داشته باشد."

رئیس جمهور ایران گفت که دولت معضلات مربوط به نظام یارانه را شناسایی کرده و برنامه ریزی هایی را انجام داده و می خواهد یارانه ها را هدفمند توزیع کند.

وی هشدار داد: "با این شرایط دیگر نمی توان ادامه داد. یعنی سه سال دیگر ما فلج می شویم لذا باید یارانه ها را هدفمند توزیع کنیم."

دولت ایران از فروردین ماه 1386 با تکیه بر همین استدلال، بنزین را سهمیه بندی کرد.

مشکل نظام مالیاتی

آقای احمدی نژاد یکی دیگر از مشکلات مهم اقتصاد کشور را نظام مالیاتی آن دانست. وی گفت درحالی که در بسیاری از کشورهای جهان اصل هزینه دولت از طریق مالیات فراهم می شود، در ایران درآمد دولت از مالیات خیلی پایین است.

وی گفت: "مالیات باید به صورت متوازن و نه به مقدار فعلی اخذ شود. در بسیاری کشورها میزان مالیات بیش از 20 درصد تولید ناخالص ملی است درحالی که در کشور ما این رقم 7 درصد می باشد."

وی افزود: "بسیاری از بخش ها مالیات نمی دهند بسیاری از فرصت های مالیاتی نیز در کشور ما تعریف نشده است. درحالی که در بسیاری از کشورها هزینه دولت از محل مالیات هاست، اما برای ما حداقل است."


لزوم اصلاح نظام مالیاتی
بسیاری از بخش ها مالیات نمی دهند بسیاری از فرصت های مالیاتی نیز در کشور ما تعریف نشده است. درحالی که در بسیاری از کشورها هزینه دولت از محل مالیات هاست، اما برای ما حداقل است


محمود احمدی نژاد

رئیس جمهور ایران گفت که حدود 43 تا 44 درصد مسائل اقتصادی کشور با مالیات ها اداره می شود و 52 درصد نیز از منابع فروش نفت و برخی منابع دیگر تامین می شود.

البته وی مدعی موفقیت دولت خود در این زمینه شد چرا که گفت وقتی دولت او سر کار آمد 67 درصد هزینه های دولت از درآمد نفت تامین می شد.

آقای احمدی نژاد همچنین در مورد مشکل تورم که در یک سال گذشته به حدود 20 درصد رسیده و سیاست های او در این زمینه با انتقادهای زیادی از سوی برخی نمایندگان مجلس، مقام های بانکی و کارشناسان روبرو بوده است، اظهار نظر کرد.

بسیاری از کارشناسان علت تورم شدید در کشور را که در اردیبهشت ماه به 25 درصد رسید به افزایش شدید نقدینگی و کاهش شدید نرخ سود بانکی در دوران حکومت آقای احمدی نژاد نسبت می دهند.

با این حال رئیس جمهور ایران در مورد تورم که اذعان کرد یکی از مشکلات عمده اقتصادی است چنین گفت: "ریشه اصلی تورم این است که اتکا اصلی درآمدهای دولت به نفت است و در واقع منبع اصلی درآمدهای دولت متکی به نفت است و در طول سال ها آرزوی ما بوده که اتکای ما به نفت قطع شود که البته در این راستا تلاش هایی صورت گرفته است."

وی افزود: "مردم تورم را حس می کنند و بخش عمده این تورم ساختاری است."

آقای احمدی نژاد که اظهاراتش عمدتا بر تشریح مشکلات متمرکز بود تا ارائه راه حل های مشخص در پایان سخنانش گفت مواردی که در "طرح تحول اقتصادی دولت" قرار دارد از سوی دبیرخانه تحولات اقتصادی اعلام خواهد شد.

با این حال وی پیش بینی نمی کند این طرح تا چند سال نتیجه دهد: "ما معتقدیم که باید این بیماری و مریضی که اقتصاد کشور ما با آن روبروست، اصلاح شود. که البته علاج برخی از این بیماری ها را اگر الان شروع کنیم سه الی پنج سال طول می کشد که به طور کامل اصلاح شود."

[Rasputin]

France's Sarkozy Questions If ECB Rate Increase `Reasonable'

French President Nicolas Sarkozy recommenced his criticism of the European Central Bank today, asking it was ``reasonable'' for it to have raised the region's key interest rate this past week.

The ECB lifted its benchmark rate to 4.25 percent, its highest in seven years, on July 3 after inflation accelerated to a 16 year high in the 15 nations that use the euro.

Sarkozy, who has repeatedly attacked the Frankfurt-based bank for focusing too much on inflation and not enough on growth, asked delegates at a Paris meeting of his Union for a Popular Movement party ``if it was reasonable to raise rates, while the Americans have rates at 2 percent.''

The U.S. Federal Reserve has cut its key rate seven times since September to 2 percent in a bid to avert recession, while the ECB left its unchanged until the past week amid surging consumer prices.

Sarkozy's comments carry greater weight after France on July 1 became the president of the 27-nation European Union, meaning it will help shape the EU's agenda and policies for the rest of this year. ECB President Jean-Claude Trichet has brushed aside the criticism, telling reporters on July 3 that his central bank is ``an independent institution.''

The French president repeated his call for the Group of Eight nations to increase its ranks to include China and India. He and other leaders from the group are scheduled to meet in the coming week for their annual summit, this year in Japan.

``It's not reasonable to continue to meet as eight to solve the big questions of the world,'' he said.

[Rasputin]

انقلاب انتخاباتی، بنام انقلاب اقتصادی
یارانه ها نقدی می شود
تا 4 سال دوم ریاست جمهوری "نقد" شود!






زمزمه ای که از چند هفته پیش پیرامون تدارکات احمدی نژاد برای پیروزی در انتخابات آینده ریاست جمهوری و ماندن در کاخ ریاست جمهوری در محافل مختلف سیاسی واقتصادی ایران بر سر زبان ها بود، سرانجام بصورت اخبار رسمی، اما بی اشاره به انگیزه اصلی آنها انتشار یافت.

احمدی نژاد و مشاوران علنی و غیر علنی که دارد با دو شلیک می خواهند به میدان انتخابات بیآیند.

1- ارزان کردن مسکن به هر قیمت و هر ترفندی، حتی برای چند ماه نزدیک به انتخابات.

2- نقدی کردن یارانه ها و ریختن آن توی دست مردم و سپس تبلیغ بهبود وضع زندگی اقشار آسیب پذیر جامعه در دولت احمدی نژاد. البته در چند ماه قبل از پایان دوره اول ریاست جمهوری وی.

از جمله طراحان این دو ترفند، علینقی سابق و سید محمد جهرمی کنونی، وزیر کار در دولت احمدی نژاد است که نظرات احمد جنتی دبیر شورای نگهبان را عینا به هیات دولت و کابینه آورده و ابلاغ می کند. او سالها پیشکار اقتصادی احمد جنتی بوده است.

احمدی نژاد نام این ترفند انتخاباتی را که محسن آرمین هم در مقاله اخیر خود (آن را در همین شماره پیک نت می خوانید) به آن اشاره کرده، تحول بزرگ و انقلاب اقتصادی گذاشته است.

از جمله تدابیری که حدس زده می شود با اشاره احمد جنتی اتخاذ شده باشد، دور زدن مجلس برای تبدیل یارانه ها به پرداخت پول نقد است. طرحی که همه از عاقبت آن و تشدید گرانی و تورم نگران اند. برای این مقصود، یکصد نفر را بعنوان اقتصاد دان و استاد دانشگاه و کارشناس جمع کرده و خبرگزاری ها گزارش دادند که احمدی نژاد با آنها یک جلسه 3 و نیم ساعته برگزار کرده است. دراین جلسه طرح انقلاب اقتصادی احمدی نژاد که در راس آن نقدی کردن رایانه هاست به بحث گذاشته شده است. یگانه حاصلی که از این جلسه بصورت خبر منتشر شده اینست که رئیس جمهور قبول کرده شتابزده و یکجا و یکباره این طرح را اجرا نکند. همین!

تمام سایت های خبری منتقد دولت تاکید کرده اند که هیچ اقتصاد دان منتقدی در این جلسه حضور نداشته و هدف اصلی از برپائی آن نیز دور زدن مجلس و یا مرعوب کردن آنست. احمدی نژاد می کوشد بعنوان مصوبه دولت دست به چنین اقدامی بزند، درحالیکه مجلس معتقد است این طرح با سرنوشت کشور در ارتباط است و باید در مجلس بررسی کارشناسانه شود. این درحالی است که شورای نگهبان قبل از آنکه این طرح در مجلس طرح شود، پیشاپیش موافقت خود با آن را به مجلس اطلاع داده است!



در جلسه 3 ساعت و نیمه احمدی نژاد با اقتصاددانان و استادان و کارشناسان دستچین شده، علاوه بر خود وی، معاون اول رئیس*جمهور، رییس کل بانک مرکزی، معاون برنامه*ریزی و نظارت راهبردی رییس*جمهور و وزرای دادگستری (غلامحسین الهام) ، بازرگانی ، کار و رفاه(جهرمی) حضور داشتند.

[Rasputin]

کاهش بهای سهام در بازارهای آسیا و اروپا


بازارهای سهام آسیایی با کاهش شاخص سهام مواجه شدند
در پی انتشار خبر دشواری های دو شرکت وام مسکن در آمریکا بهای سهام در بازارهای اروپایی و آسیایی کاهش یافته است.
روز سه شنبه، 15 ژوئیه، شاخص بهای سهام در بازار بورس هنگ کنگ حدود چهار درصد، شاخص اصلی بهای سهام در بورس چین سه درصد و شاخص بهای سهام در بورس توکیو دو درصد تنزل کرد.

در ساعات اولیه معامله در بازارهای لندن و فرانکفورت هم شاخص های بهای سهام یک و نیم درصد تنزل کرد.

خبرنگار اقتصادی بی بی سی می گوید که اعلام این خبر که بانک مرکزی آمریکا آماده کمک به شرکت های "فنی می" و "فردی مک"، دو شرکت عظیم اعطای وام مسکن است، نتوانسته باعث جلب اطمینان سرمایه گذاران نسبت به سلامت بخش مالی جهان شود.

به گفته وی، این نگرانی همچنان وجود دارد که ممکن است بانک های تجاری در آمریکا و سایر نقاط همچنان با زیان های هنگفت مرتبط با مشکلات اعتباری مواجه شوند.

[Rasputin]

Doha's F-Words

So far, not so good for this week's crucial meetings in the Doha Round of world trade talks. Before the sessions in Geneva even started, the Brazilian Foreign Minister caused a ruckus Saturday by equating Western leaders' public evaluations of the round with Nazi propaganda chief Joseph Goebbels's line that "if you repeat a lie several times it becomes a truth."

Celso Amorim's remark is patently absurd and a real head-scratcher, coming as it did from a seasoned diplomat who enters the negotiations with leverage on the Americans and Europeans. World Trade Organization head Pascal Lamy says the talks have a more than 50% chance of success -- three years after they were supposed to conclude.


More damaging than Mr. Amorim's Nazi slur may be Indian Commerce Minister Kamal Nath's claim Thursday, reported by Reuters, that a Doha deal must make progress on finance, food and fuel. While Mr. Nath is correct that many people are rightly worried about these "three Fs," trying to repackage the Doha Round as a solution to these problems amounts to a shifting of the goalposts and could doom the talks.

Removing barriers to trade in agriculture and services, including financial services, is central to the Doha Round of trade negotiations. Lower tariffs, reductions in trade-distorting subsidies and less red tape would all be welcome developments in both the short and the long run. To the extent that farmers and banks could do more business in more markets, a Doha deal would help ameliorate problems in those areas -- and help prevent future ones.

But multilateral trade talks are, by their nature, cast more widely than any contemporary crisis. The point is to reshape the contours of global commerce, making trade rules broadly more liberal. Judging any outcome for the seven-year-old Doha negotiations by today's conditions would be a mistake.

What's more, the Doha Round has virtually nothing to do with trade in fuels. Nor could it, really: Four of OPEC's 13 members -- Algeria, Iran, Iraq and Libya -- don't even belong to the WTO. Neither does Russia, one of the biggest non-OPEC oil producers and a country that must be included in any discussion about fuels trade, at least where Europe is concerned.

Mr. Nath was probably engaging in some sleight-of-mouth. India has consistently refused to open its farm markets, and Mr. Nath's government, which faces a confidence vote in Parliament tomorrow, is currently in an even worse position to compromise. His tune may change slightly if the ruling coalition survives. Protectionism has also been on the rise elsewhere -- notably in the Democratic-controlled U.S. Congress -- and there may be a temptation for others to use the three Fs to talk down Doha.

If the 30 trade ministers meeting in Geneva this week are serious about improving global economic conditions, they'll move quickly to wrap up the Doha talks. A global agreement to free trade further would be the best news markets and consumers have heard in a long time.

[Rasputin]

Fannie Mae and Freddie Mac extended their weeklong recovery after U.S. lawmakers reached a deal on legislation that authorizes Treasury Secretary Henry Paulson to bail out the mortgage-finance providers while placing few restrictions on the companies.

Fannie Mae rose 12 percent and Freddie Mac added 11 percent in New York Stock Exchange composite trading. Their market values have more than doubled since July 15 after plummeting on concern the companies may not have enough capital to withstand the highest mortgage delinquency rates in at least three decades.

Shareholders and the companies benefit because the bill doesn't require Fannie Mae or Freddie Mac to cut or eliminate dividends if they take federal aid, giving that discretion to the Treasury. It also doesn't automatically give the Treasury preferential treatment over other shareholders if it buys the companies' preferred shares. The government also can't compel the government-sponsored enterprises to issue securities or buy common stock.

``It sounds like the GSEs got what they wanted again,'' said Paul Miller, an analyst with Friedman Billings Ramsey & Co. in Arlington, Virginia. ``They got a big backstop and they got language that the Treasury doesn't necessarily have to stop them from paying dividends or cap compensation. That's why the stocks are ripping.''

The House of Representatives today approved the rescue plan for Fannie Mae and Freddie Mac as part of a bill aimed at alleviating the worst housing slump since the Great Depression. The bill passed 272-152. Legislators crafted the agreement nine days after Paulson asked for powers to buy unlimited amounts of stock and extend an unlimited credit line into Fannie Mae and Freddie Mac to enable them to continue buying mortgages.

Good News

The Senate will likely vote on the measure July 25 or 26, Senator Jim Bunning, a Republican from Kentucky, said.

Fannie Mae rose $1.59 to $15. Freddie Mac climbed $1.10 to $10.80. The companies began a plunge July 7 after Lehman Brothers Holdings Inc. said the companies may need to raise a combined $75 billion of capital to meet new accounting guidelines.

Washington-based Fannie Mae is down about 62 percent this year, while McLean, Virginia-based Freddie Mac has fallen about 68 percent. Both traded above $60 a share last year.

``It is good news if you own Fannie and Freddie stocks,'' said Brian Battle, Vice President of Trading at the Chicago-based brokerage Performance Trust Capital Partners. ``Fannie and Freddie will exist as they are now and will get bigger because Congress wants them to do something about the housing market, so that's good for Fannie and Freddie.''

No Dividend Requirement

Lawmakers rejected a proposal to bar Fannie Mae and Freddie Mac from paying dividends while they are tapping the expanded line of credit with Treasury, Representative Barney Frank, a Massachusetts Democrat who chairs the House Financial Services Committee, said late yesterday. They decided instead to give Paulson the power to restrict such payments or to take preferred stock in the companies, he said.

``It's not a mandate,'' Frank said. ``He's got to have some flexibility.''

Lawmakers added the provisions to legislation that would create a stronger regulator for Fannie Mae and Freddie Mac and expand federal efforts to stem mortgage defaults.

The new regulator has reduced authority to approve new lines of business or products, said Joshua Rosner, an analyst with independent research firm Graham Fisher & Co. in New York.

The bill provides for the Federal Reserve to consult on Fannie Mae and Freddie Mac finances. Paulson said this week that the Fed has already begun participating in assessments of the companies.

The housing bill would create a program aimed to help an estimated 400,000 Americans with subprime home loans refinance into 30-year, fixed-rate mortgages backed by the government.

Higher Cap

Fannie Mae and Freddie Mac would have a new, higher cap on the size of mortgages they may purchase. The new limit would be $625,000, or the median home price plus 15 percent, whichever is lower, Frank said.

The Bush administration withdrew its veto threat on a measure to provide $3.9 billion to communities for the purchase of foreclosed properties.

The agreement increases the likelihood Paulson will get the authority this week, after he lobbied lawmakers to overcome concerns about taxpayer liability. The Treasury chief argued that the backstop for the beleaguered mortgage companies was critical to help safeguard U.S. financial market stability.

The government is leaning on Fannie Mae and Freddie Mac, which own or guarantee almost half of the $12 trillion in U.S. home loans outstanding, to help revive the housing market and stem a slowdown in the economy.

Credit-Default Swaps

The cost to protect the senior debt of Fannie Mae and Freddie Mac was little changed.

Credit-default swaps on Fannie Mae fell 0.5 basis point to 40 basis points today after dropping more than 40 basis points the past two weeks, according to London-based CMA Datavision. Contracts on Freddie Mac were unchanged at 40 basis points after falling from 80 basis points on July 9, CMA prices show.

Credit-default swaps are financial instruments based on bonds and loans that are used to speculate on a company's ability to repay debt. They were conceived to protect bondholders against default and pay the buyer face value in exchange for the underlying securities or the cash equivalent should the company fail to adhere to its debt agreements.

Paulson yesterday said his rescue plan for Fannie Mae and Freddie Mac will help stabilize financial markets, and that he doesn't anticipate that he will need to bail out the companies.

``This is about not only our housing markets, but it's about our capital markets more broadly,'' Paulson said in an interview with Bloomberg Television in New York. ``This goes well beyond the two institutions, Fannie and Freddie; it has to do with investors in the United States and investors all over the world.''

[Rasputin]

In a rare weekend session, the Senate on Saturday is expected to pass a landmark housing bill that will offer up to $300 billion in loans for troubled homeowners and establish a government rescue plan for mortgage finance giants Fannie Mae and Freddie Mac.

The House passed the bill on Wednesday just hours after President Bush reversed his long-standing vow to veto the bill.

Once the package clears the Senate, it will be sent to President Bush, who is likely to sign it soon.

The legislation, one of the most far-reaching housing bills from Congress in decades, marks the centerpiece of Washington's efforts to address the nation's housing meltdown.

"This will begin to lay the groundwork for a turnaround in the housing market and hopefully in the broader economy as well," said Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee and a principal author of the bill.

The bill has two principal objectives: to offer affordable government-backed mortgages to homeowners at risk of foreclosure, and to bolster Fannie and Freddie with a temporary rescue plan and a new, more stringent regulator.

Helping at-risk borrowers
Provisions in the 700-page bill that would most directly affect consumers and communities include:

Increase the Federal Housing Administration's role. The FHA will be allowed to insure up to $300 billion in new 30-year fixed-rate mortgages for at-risk borrowers in owner-occupied homes if their lenders agree to write down loan balances to 90% of the homes' current appraised value.

The cost of the new FHA program - which would begin on Oct. 1 and be in place for just a few years - would be funded by fees from Fannie and Freddie, along with fees paid by both lenders and borrowers.

Establish a stronger regulator for the GSEs. The new regulator will have a greater say over how well funded the agencies are - a major concern in the markets that has sent stocks in both companies plunging.

Permanently increase "conforming loan" limits. The bill would permanently increase the cap on the size of mortgages guaranteed by Fannie and Freddie to a maximum of $625,500 from $417,000.

The FHA maximum loan limits for high-cost areas would also increase to $625,500. Higher loan limits will make it easier for borrowers to get mortgages, because they're more likely to be traded if they are considered conforming.

Create home-buyer credit. The bill includes a tax refund for first-time home buyers worth up to 10% of a home's purchase price but no more than $7,500.

The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments.

Bar down-payment assistance for FHA loans. The bill eliminates a program that has allowed sellers to provide down payment assistance.

The bill would also increase to 3.5% from 3% the down payment requirement for borrowers getting FHA loans.

Create an affordable housing trust fund. The bill establishes a permanent fund to promote affordable housing. The fund would be paid for by fees from Fannie and Freddie.

Give grants to states to buy foreclosed properties. The bill would grant $4 billion to states to buy up and rehabilitate foreclosed properties. The funding had been opposed by the White House, which said it would benefit lenders and not homeowners.

Bolster Fannie and Freddie
Concerns over whether Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) will have enough money to weather future losses in the housing market sent shares plummeting in recent weeks. Since the beginning of June, Fannie's stock price has dropped 57% and Freddie's plummeted 66%. For the past year, they're both down roughly 85% as of the end of trade on Friday.

To help stabilize markets, Treasury Secretary Henry Paulson asked Congress to temporarily empower Treasury to offer the companies a backstop if needed. Consequently the housing bill now includes provisions that let Treasury over the next 18 months offer Fannie and Freddie an unlimited line of credit and the authority to buy stock in the companies.

Both critics and supporters of the Paulson plan have expressed concern that loaning or investing money in the companies could leave taxpayers with a fat bill to pay.

The Congressional Budget Office on Tuesday estimated the potential cost of a rescue could be $25 billion. CBO said there is probably a better than 50% chance that Treasury would not need to step in. It also said there is a 5% chance that Freddie's and Fannie's losses could cost the government $100 billion.

[Rasputin]

In a rare weekend session, the Senate on Saturday is expected to pass a landmark housing bill that will offer up to $300 billion in loans for troubled homeowners and establish a government rescue plan for mortgage finance giants Fannie Mae and Freddie Mac.

The House passed the bill on Wednesday just hours after President Bush reversed his long-standing vow to veto the bill.

Once the package clears the Senate, it will be sent to President Bush, who is likely to sign it soon.

The legislation, one of the most far-reaching housing bills from Congress in decades, marks the centerpiece of Washington's efforts to address the nation's housing meltdown.

"This will begin to lay the groundwork for a turnaround in the housing market and hopefully in the broader economy as well," said Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee and a principal author of the bill.

The bill has two principal objectives: to offer affordable government-backed mortgages to homeowners at risk of foreclosure, and to bolster Fannie and Freddie with a temporary rescue plan and a new, more stringent regulator.

Helping at-risk borrowers
Provisions in the 700-page bill that would most directly affect consumers and communities include:

Increase the Federal Housing Administration's role. The FHA will be allowed to insure up to $300 billion in new 30-year fixed-rate mortgages for at-risk borrowers in owner-occupied homes if their lenders agree to write down loan balances to 90% of the homes' current appraised value.

The cost of the new FHA program - which would begin on Oct. 1 and be in place for just a few years - would be funded by fees from Fannie and Freddie, along with fees paid by both lenders and borrowers.

Establish a stronger regulator for the GSEs. The new regulator will have a greater say over how well funded the agencies are - a major concern in the markets that has sent stocks in both companies plunging.

Permanently increase "conforming loan" limits. The bill would permanently increase the cap on the size of mortgages guaranteed by Fannie and Freddie to a maximum of $625,500 from $417,000.

The FHA maximum loan limits for high-cost areas would also increase to $625,500. Higher loan limits will make it easier for borrowers to get mortgages, because they're more likely to be traded if they are considered conforming.

Create home-buyer credit. The bill includes a tax refund for first-time home buyers worth up to 10% of a home's purchase price but no more than $7,500.

The refund, however, serves more as an interest-free loan, since it would have to be paid back over 15 years in equal installments.

Bar down-payment assistance for FHA loans. The bill eliminates a program that has allowed sellers to provide down payment assistance.

The bill would also increase to 3.5% from 3% the down payment requirement for borrowers getting FHA loans.

Create an affordable housing trust fund. The bill establishes a permanent fund to promote affordable housing. The fund would be paid for by fees from Fannie and Freddie.

Give grants to states to buy foreclosed properties. The bill would grant $4 billion to states to buy up and rehabilitate foreclosed properties. The funding had been opposed by the White House, which said it would benefit lenders and not homeowners.

Bolster Fannie and Freddie
Concerns over whether Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500) will have enough money to weather future losses in the housing market sent shares plummeting in recent weeks. Since the beginning of June, Fannie's stock price has dropped 57% and Freddie's plummeted 66%. For the past year, they're both down roughly 85% as of the end of trade on Friday.

To help stabilize markets, Treasury Secretary Henry Paulson asked Congress to temporarily empower Treasury to offer the companies a backstop if needed. Consequently the housing bill now includes provisions that let Treasury over the next 18 months offer Fannie and Freddie an unlimited line of credit and the authority to buy stock in the companies.

Both critics and supporters of the Paulson plan have expressed concern that loaning or investing money in the companies could leave taxpayers with a fat bill to pay.

The Congressional Budget Office on Tuesday estimated the potential cost of a rescue could be $25 billion. CBO said there is probably a better than 50% chance that Treasury would not need to step in. It also said there is a 5% chance that Freddie's and Fannie's losses could cost the government $100 billion.

[Rasputin]

Kraft Foods Inc. reported earnings that topped analysts' estimates and said full-year profit may be higher than it forecast after increasing cheese, chocolate and Planters peanut prices to cover higher energy and grain costs.

The shares of the world's second-largest foodmaker rose the most in five months. Profit also benefited on a gain from commodities hedging and the dollar's decline overseas, Kraft said.

Net income rose for the first time in four quarters after Kraft increased prices on 90 percent of its foods and beverages and shipments fell less than the company expected. Chief Executive Officer Irene Rosenfeld ordered additional price increases and said single-serve pizza, hormone-free cheeses and other new items will minimize the loss of customers who are seeking less expensive brands.

``There's a lot of pricing and investments to improve their brand strength,'' said Matt Arnold, an Edward Jones & Co. analyst in Des Peres, Missouri, who recommends investors buy the shares. ``It was a respectable quarter in light of concern that Kraft may have trouble meeting expectations because of the commodity environment.''

Second-quarter net income advanced 3.5 percent to $732 million, or 48 cents a share, from $707 million, or 44 cents, a year earlier. Excluding items, profit beat analysts' estimates by 8 cents. Revenue rose 21 percent to $11.2 billion from $9.21 billion, Kraft said in a statement.

The foodmaker, whose largest shareholder is Warren Buffett's Berkshire Hathaway Inc., expects to earn at least $1.92 a share in 2008 excluding costs, 2 cents higher than its previous forecast and matching analysts' estimates.

Sales excluding acquisitions and divestitures may increase at least 6 percent this year on the higher prices, faster than the previous forecast of at least 5 percent, Kraft said.

Analysts' Estimates

Excluding some items, Kraft earned 58 cents a share. Profit was helped by the $150 million hedging gain, or 6 cents, as Kraft locked in prices on the commodities markets to lessen the effect of volatile prices. Foreign currency benefits added 3 cents.

Fifteen analysts surveyed by Bloomberg estimated average profit of 50 cents excluding costs. Twelve projected sales of $10.6 billion.

Kraft climbed $1.23, or 4.2 percent, to $30.62 at 10:20 a.m. in New York Stock Exchange composite trading. The shares declined 5.2 percent since June 2006 before today, when Rosenfeld took charge and vowed to focus on the foodmaker's biggest brands. The Standard & Poor's 500 Index climbed less than 1 percent in that period.

Rosenfeld, 55, told analysts April 30 that Kraft expects higher prices to cover rising costs in 2008. Extra advertising for the biggest brands spurred sales of Maxwell House coffee, single-serve Jell-O puddings and Oscar Mayer Deli Fresh meats.

Higher Prices

Price increases helped Kraft compensate for cocoa, sugar and transportation expenses. Oil prices have climbed 61 percent in the past year, while Wheat used in Oreo cookies and pizzas has risen 27 percent.

Last year's $7.8 billion acquisition of Group Danone SA's cookies and crackers unit and increased advertising of salad dressings, California Pizza Kitchen pizzas and deli meats boosted first-quarter sales by 21 percent as well.

As Kraft has raised prices, some consumers have switched to less expensive brands.

``It's not surprising, given that consumers are stretched, that they're looking for better deals,'' said Cliff Remily, a portfolio manager at Thornburg Investment Management in Sante Fe, New Mexico. ``We like seeing the higher prices, even if that means giving up some volume in the short term.'' Remily helps manage $50 billion and had 9.9 million Kraft shares as of the end of March.

Kraft plans to complete the $2.6 billion sale of the Post cereal unit to Ralcorp Holdings Inc. next month. The division that makes Grape Nuts and Honey Bunches of Oats cereals trails Kellogg Co. and General Mills Inc. in revenue.

Kraft trails Vevey, Switzerland-based Nestle SA, the maker of Nescafe coffee and KitKat chocolate bars, in global sales. Billionaire investor Buffett held a 9.1 percent stake in Kraft as of March 31.

[Rasputin]

Home prices in May plummeted 15.8% from a year earlier, to 2004 price levels, wiping away four years of appreciation, according to the S&P/Case-Shiller 20-city home-price index released July 29.

Analysts have become increasingly pessimistic that a bottom to the market will arrive anytime soon. The S&P/Case-Shiller report is only the latest evidence that home prices are swinging backward with at least as much force as they swung the other direction during the boom. Places that had double-digit increases a few years ago are now seeing prices drop by as much as 28% in a year.

Peter Schiff, president of Darien (Conn.) brokerage Euro Pacific Capital, said prices could slide to levels last seen before the housing boom began in the early 2000s.

"Demand is way below where it was eight years ago; supply is way above," Schiff said. "Why should prices be substantially higher than they were in 2000? The Dow isn't where it was in 2000. Stocks are worth less than they were. Why should real estate stand out as worth more?"

Prices Not Dropping Everywhere
All 20 cities in the S&P/Case-Shiller index experienced annual declines in May and prices fell at record year-over-year rates in nine cities. The largest drops were in places being clobbered by foreclosures. Prices were down 28.4% in Las Vegas, 28.3% in Miami, and 26.5% in Phoenix. But several cities saw improvement. Prices in Charlotte, N.C., fell just 0.2%; they dropped 3.1% in Dallas and 4.8% in Denver. Prices actually rose 2.9% in Cleveland and 1% in Boston and Charlotte in May, compared to a month earlier.

The index of 20 cities has been falling for 22 straight months, so the latest decline wasn't much of a surprise. Patrick Newport, a housing economist for Global Insight in Waltham, Mass., said he's more concerned about the inventory of unsold homes continuing to rise as more and more foreclosed homes come onto the market.

Newport plans to extend by three months his earlier forecast that existing home prices would hit bottom in the middle of next year.

Biggest Booms, Biggest Busts
"If you combine today's release with the other housing releases, it just tells you that the outlook over the next year is not good," Newport said.

Jim Gillespie, president and chief executive of Coldwell Banker, a division of privately held real estate giant Realogy, said he is skeptical of the Case-Shiller report because it focuses on specific cities, many of which had runups in the first half of the decade. They are now seeing the biggest drops.

Gillespie said the 15.8% drop in home prices reported by Case-Shiller will unnecessarily scare buyers in much of the heartland where prices are more stable. "Is there a major real estate correction going on? Yes," Gillespie said. "Are we looking at 16% nationwide? Absolutely not."

[Rasputin]

Citigroup Agrees In Principle To Settlement

Citigroup Inc. (C) will be required to buy back about $7.3 billion of auction-rate securities it sold to individual investors, small businesses and charities under an agreement in principle unveiled Thursday by federal and state regulators.

The settlement agreement also calls for Citigroup to use its "best efforts" to liquidate all of the roughly $12 billion of auction-rate securities it sold to institutional investors, including retirement plans, by the end of 2009.

Citigroup agreed to settle without admitting or denying claims that it sold auction-rate securities as safe, liquid investments, leaving investors stuck when the auction-rate market seized up early this year.

Securities and Exchange Commission officials announced the settlement at a press conference in Washington, D.C., and New York Attorney General Andrew Cuomo did the same at an event in New York. In addition to the buybacks, the agreement calls for Citi to pay $100 million in civil penalties to state regulators, half of which will go to New York State.

The SEC settlement didn't include a fine. SEC enforcement division director Linda Thomsen said a decision on whether to impose one will be deferred and will depend in part on how Citigroup complies with terms of the settlement. Citigroup's financial condition could be taken into account as well, she added.

In a statement Thursday, Citi said it was pleased to have reached agreement with regulators and predicted that the settlement should have little impact on its balance sheet.

"Our most important focus continues to be on helping our clients," Citi stated. Even before the agreement was unveiled, Citi said it had redeemed or auctioned at par more than half of its retail customers' holdings in auction- rate securities.

The settlement agreement calls for Citi to buy back about $7.3 billion of auction-rate securities sold before Feb. 11, to about 38,000 retail investors and charitable groups. The 90-day buyback period will close Nov. 5.

For purposes of the settlement, retail customers are defined to include individual investors, all businesses with account values of up to $10 million, and all charities regardless of account values.

Citigroup said Cuomo's office will monitor the bank's progress and, beginning on Nov. 4, 2008, retains the right to take legal action against Citigroup with respect to its institutional-investor clients. Other regulators have entered into a similar arrangement but with a Dec. 31, 2009, date, the company said.

Buybacks will be at par, meaning Citigroup will offer to buy back the securities at the price the investor paid. It estimated the difference between the purchase price and the current market value of the securities to be about $ 500 million on a pre-tax basis. Citigroup will be barred from liquidating about $8 billion of its own holdings of auction-rate securities until its customers' holdings have been liquidated.

Auction-rate securities are long-term bonds whose interest rates are reset periodically at daily, weekly or monthly auctions. Several auctions failed in February, driving up interest rates for auction-rate bond issuers, while leaving investors locked into investments that had been promoted as safe and liquid.

About 10 companies dominated the market for auction-rate bonds, with Citigroup accounting for about 20% of sales, according to SEC officials. While Citigroup was the biggest participant in the auction-rate market, authorities said they are investigating other companies as well.

"We have ongoing investigations in the auction-rate securities area with a number of firms across the industry," said Financial Industry Regulatory Authority enforcement director Susan Merrill. She said Finra is continuing to open cases and declined to specify how many probes are ongoing currently, telling reporters: "I'm not going to give you a number."

Cuomo previously sued two UBS AG (UBS) units for allegedly misrepresenting the risks of auction-rate securities to clients, and his office has subpoenaed 30 entities and 100 individuals as part of a broad-ranging probe into the sales of auction-rate securities.

Among those subpoenaed are Merrill Lynch & Co. (MER), JPMorgan Chase & Co. ( JPM) and Goldman Sachs Group Inc. (GS) and high-ranking executives at various companies as well as heads of municipal-bond desks, risk managers, financial advisers and others.