Bancroft Wrangling Intensifies

As a Monday deadline neared for the Bancroft family to decide on Rupert Murdoch's $5 billion offer for Dow Jones & Co., last-minute wrangling by family members and their trustees intensified.

Family lawyers were scrambling Friday to change the voting structure of the biggest Bancroft trust so it would better reflect the views of all the beneficiaries. The trust's overseers include Christopher Bancroft, a prominent family member who has been outspoken in his opposition to the deal. The restructuring could dilute Mr. Bancroft's influence over the stock now held in the trust.

On Friday, another key family trust seen as an important swing vote was planning to oppose the deal, according to a person familiar with the situation. The trust, overseen by a Denver law firm, holds 9.1% of Dow Jones's voting stock and is seen as a seller but wants a higher price.

Meanwhile, several family members engaged via email in an intense exchange about their legacy, their past stewardship of Dow Jones, and the ramifications of voting against the deal. The family met last Monday in Boston to hear presentations about the deal and have been asked to make a final decision by Monday.
Source : http://online.wsj.com

Dow Keeps Tumbling Despite Good News

Wall Street heard good news about the economy yesterday but didn't pay it much heed: The Dow Jones industrial average shed an additional 200 points to finish its worst week in more than four years, potentially creating a snowball effect that could continue next week.

Worries about the corporate and mortgage lending markets overpowered yesterday's strong growth report and solid economic fundamentals. The Dow, made up of 30 blue-chip stocks, lost 208.10 points yesterday, or 1.5 percent. The Dow fell 4.2 percent for the week, closing at 13,265.47. The tech-heavy Nasdaq composite index lost 37.1 points, or 1.4 percent, to end at 2562.24. That was a 4.7 percent drop for the week. And the broader Standard & Poor's 500-stock index lost 23.71 points yesterday to close at 1458.95, down 4.9 percent for the week

At times yesterday, Wall Street tried to recover from Thursday's big losses, but the markets ultimately nosed over and dived in the last half hour of trading.

It's "horrible, disaster, absolutely the worst-case scenario," said Todd Clark, director of trading at Nollenberger Capital Partners. "I figure we're going to have a pretty nasty day on Monday."

Seemingly ignored in what another trader termed yesterday's "carnage" was the release of the Commerce Department's gross domestic product report. The nation's economic output grew at a healthy 3.4 percent annual rate, or slightly more than expected, from April to June, according to the figures.

Also, favorable feelings about income and employment prospects pushed consumer sentiment to a five-month high, according to an index released yesterday by the University of Michigan and Reuters.

Why the seeming disconnect between Wall Street and Main Street?

"Consumers and retail investors look at [market drop] in the paper and say, 'Geez -- I need to sell off,' " Thomson Financial's Jeoff Hall said. He said the markets' dive over the past two days "has very little or nothing to do with the data" that show a growing economy.

The turmoil in U.S. markets rippled around the globe, particularly affecting Asia.

In South Korea, the Kospi index was down more than 4 percent after the worst trading day in years. The Singapore Straits Times index fell 2.4 percent, while the Nikkei stock average in Japan and the Hang Seng index in Hong Kong shed more than 2 percent each. The Shanghai stock index in China was flat.

Wall Street is fixated on problems in the credit markets, analysts said, including the crash of the subprime mortgage market stemming from widespread housing foreclosures and tightened corporate credit that is holding up planned deals. Analysts call the process now underway a repricing of credit, with investors demanding a higher return on loans and bonds perceived as risky.

England's Cadbury Schweppes said yesterday it would hold off on the sale of its U.S. division that makes Snapple because the company was afraid potential buyers may not be able to get financing for the deal at attractive terms.

"The credit markets are driving everything now, from stocks to Treasuries, even to currency," Mark Kiesel, executive vice president at Pimco Bonds, wrote in an e-mail yesterday. "The stock market will not stabilize until the credit market stabilizes."

Inflation measures in yesterday's Commerce report were mixed. The core consumer price index, which excludes food and energy, rose at an annual rate of 1.4 percent, down from 2.4 percent during the first quarter. But a broader inflation measure that includes food and fuel rose at a 4.3 percent annual rate, up from 3.5 percent in the January-to-March period.

The economic data are "positive and inflation is positive to some extent, but I think the market is getting more and more rattled" by problems in the credit markets, said David Dreman of Dreman Value Management. "I think people are really worried that how this is going to turn out. We don't know how bad it's going to be."
Source :http://www.washingtonpost.com

Ex-Qwest CEO Gets Six-Year Sentence

Joseph Nacchio, the former chief of one-time highflier Qwest Communications International Inc. (Q) who was convicted of insider trading, was sentenced Friday to six years in federal prison.

Federal Judge Edward Nottingham also ordered Nacchio to pay a $19 million fine and forfeit $52 million he gained in illegal stock sales.

(This report and related background material will be available on The Wall Street Journal's Web site, WSJ.com.)

Nacchio's attorneys are planning to appeal. The attorneys said they plan to ask the U.S. Bureau of Prisons to allow Nacchio to serve out his sentence in a minimum security prison in Pennsylvania, which is near his New Jersey home and is near to many family members.

"The crimes of which the defendant were found guilty are crimes of overarching greed," Judge Nottingham said. The judge called Nacchio, whose grandparents immigrated to the U.S. from Italy, someone "who rose from immigrant parents and rose to enormous heights by sheer will and talent."

"Perhaps because of his greed he catapulted over the top in this case," the judge said.

In April, Nacchio was convicted in federal court here of 19 counts of insider trading for selling $52 million worth of stock in the spring of 2001 while knowing that his company's finances were in trouble. He also faces a Securities and Exchange Commission civil fraud suit.

For much of the hearing, Nacchio, in a dark suit and blue tie, stood before the judge with a tissue in hand, occasionally wiping his eyes. He declined to speak on his behalf and stood firm when the sentence was announced.

The Nacchio criminal case is among the last of a series of prominent prosecutions of corporate executives brought in recent years.

Prosecutors said Nacchio, a charismatic and blunt CEO who was hand-picked to lead Qwest by its founder Phil Anschutz, maintained an overly optimistic outlook on his company's finances even as the telecom bubble was showing signs of strain in 2000 and 2001 and his underlings told him his optimism might be a stretch. Nacchio resigned in 2002 as Qwest's stock nosedived. The company eventually restated two years of results, eliminating $2.48 billion of revenue for 2000 and 2001.

During his trial this spring, Nacchio's attorneys said the former CEO couldn't have "knowingly and willfully" engaged in insider trading at the time because he was consumed by a suicide attempt by one of his sons. His son's suicide attempt had been a family secret, but he revealed it because his state of mind was an issue.

Nacchio's attorneys also said other Qwest executives' concerns were based on whether they could meet internal revenue targets, which were tied to their bonuses. Nacchio did not testify, and his defense was extremely brief. Nacchio had asked the judge for leniency in sentencing partly based on his son's mental health state, as well as the former executive's "prior good works."

To handle his appeal, Nacchio has hired Maureen Mahoney, a high-profile lawyer best known for her victories before the Supreme Court. She represented Arthur Andersen in 2005 when its criminal conviction was overturned and the University of Michigan Law School in its 2003 defense of its affirmative-action policy.

Mahoney, a former clerk for Chief Justice William Rehnquist and one-time United States Deputy Solicitor General, declined comment on possible appeals. But a recent defense filing from Mahoney seeking to keep Nacchio out of prison pending his appeal lays out the issues that Nacchio is likely to argue to try to overturn his conviction.

His appeal will likely focus on whether the judge erred in instructing the jury about "materiality." In a brief filed earlier this week, Mahoney raises the question of whether the warnings about Qwest's finances conveyed to Nacchio by his executive team were materially different from the sunny outlook he conveyed to investors and analysts.

The brief argues that "predictions are inherently limited and uncertain" and "financial predictions are not materially misleading so long as the company believes them in good faith." The filing also highlights that Qwest's chief financial officer and auditors also signed off on Nacchio's financial guidance.

In the filing, Nacchio's attorneys also object to the judge's exclusion of an expert witness, an economics professor, who they say could have rebutted analysts testifying for the prosecution who said they were upset upon learning about Qwest's questionable accounting practices.

Another issue likely to surface in the appeal is Nacchio's classified defense that he was upbeat about Qwest's financial prospects because he knew the company was going to receive lucrative, secret government contracts. The run-up to the trial was marked by at least seven closed pretrial hearings where classified information apparently was discussed. Judge Nottingham barred some parts of the classified defense, and the matter barely surfaced at trial.

"The rulings effectively deprived the defendant of the opportunity to provide the jury with information that bore directly on his good faith and could have led to an acquittal," the defense filing said.
Source : http://www.smartmoney.com

Apple Blossoms on Strong Q3

Apple easily beat Wall Street predictions for the quarter that ended in June, with revenue rising 24 percent year-over-year to US$5.41 billion. Net income rose to $818 million, or 92 cents per share, up from $472 million, or 54 cents, in the third quarter of 2006.

Apple shares roared higher in after-hours trading following the release of the report, with shares up some 9 percent. In morning trading Thursday, the stock was up 8.7 percent to $145.97, a new 52-week high.

The computer-turned-electronics maker was widely expected to beat estimates -- and has gained something of a reputation for guiding lower to make it easier to do so -- and investors were most interested in hearing what Apple had to say about the iPhone, which went on sale on June 29, just a day before the quarter ended.

iPhone Sales

"The iPhone is off to a great start," CEO Steve Jobs said. "We hope to sell our one-millionth iPhone by the end of its first full quarter of sales," which would be at the end of September.

Apple sold 270,000 iPhones in that first wave of sales Email Marketing Software - Free Demo, the company said, though it recognized just $5 million in revenue from the device in the quarter. That number is much more in line with expectations. Apple investors had a scare Tuesday when AT&T (NYSE: T) Latest News about AT&T said it signed up fewer than 150,000 customers for iPhone plans in those first two days.

In fact, on a conference call to discuss Apple's results, CFO Peter Oppenheimer reiterated Apple's previous goal of selling 10 million iPhones worldwide during 2008. Apple did not give sales-to-date figures beyond the first two days of availability.

"Our view is that the starting gun has fired and we're off to a great start," Chief Operating Officer Tim Cook said in a conference call. "Our primary focus is not on the initial sale. We're focusing on building a third great business for Apple, alongside the Mac and iPod," he added.
Mac Attack

"This was the biggest, fastest-selling phone in AT&T's history," telecom analyst Jeff Kagan told MacNewsWorld. "That's not too shabby."

The early sales data are tantalizing to watch, but in the end, what matters is how the iPhone does long-term, added JupiterResearch analyst Michael Gartenberg.

"This is the first move in what will be a long game for Apple," he told MacNewsWorld, adding that before long, the iPhone will likely be a family of products much like it did with the iPod. "Trying to gauge the overall success based on two days of incomplete data is silly."

Apple's data also suggest that the iPhone's release and the hype leading up to it did not dent demand for the iPod, as had been feared. In fact, Apple sold 9.8 million of the devices in the quarter, a 21 percent increase over the same time a year ago. Revenue from the rest of the music-related businesses -- including sales from the iTunes Music Store -- was up 33 percent to $607 million.

The strength in Mac sales was considered by many a highlight of the report. Mac shipments rose 33 percent to 1.76 million, and 51 percent of the customers who bought Macs at Apple stores had never bought an Apple computer before, the company said. Apple's PC-sales growth rate was more than two-and-a-half times the overall growth of PC shipments.

Despite all the attention around the iPhone, "Mac sales are the key foundation of Apple's business," Ovum analyst Carl Gressum said in a research note. The fact that Mac sales held up and even accelerated their growth rate in the face of the launch of Microsoft's (Nasdaq: MSFT) Latest News about Microsoft Windows Vista was an especially good sign, he added.
Details, Details

Apple executives declined to discuss the potential for rolling out additional iPhone models, such as lower-cost alternatives, and the company also did not break out its Apple TV product, the Internet-to-TV device that launched earlier this year.

The company ended the quarter with $13.8 billion in cash, it said.

Apple again forecast fourth quarter results that aim below the targets Wall Street had already set. Oppenheimer said earnings would be around 65 cents per share on revenue of $5.7 billion, while analysts polled by Thomson Financial had pegged fourth quarter numbers at 83 cents per share at $6 billion.

Pressed in the conference call on whether Apple was setting a low bar it could easily clear, Oppenheimer said Apple was expecting to pay higher prices for components and commodities and also cited unspecified "product transitions" that would occur in the current quarter.
Source :http://www.ecommercetimes.com

Think twice about clicking on that e-card

Spammers launched a widespread attack on e-mail inboxes this month. But instead of trying to lure users into opening a corrupted attachment, they're concealing a computer virus in a link to an online greeting card.

Last week, the FBI warned consumers about greeting-card spam; earlier this month, the Federal Trade Commission held a summit on the growth of malicious e-mail. Symantec, an antivirus company, also said it has seen a proliferation of online-greeting-card scams recently.

In most cases, the subject line informs recipients that they've received a greeting card or a postcard from a "friend," "family member," "worshipper," "school-mate" or "neighbour." When the e-mail is opened, there's a link to a Web site that uploads viruses to the recipient's computer.

Now that consumers generally know about the dangers of opening attachments from unknown senders, some hackers have turned to using links instead. Web site links don't generate the same level of suspicion among Internet users, as consumers regularly send online gift cards, share online photo albums and offer birthday wishes via e-mail.

Users of infected computers have few choices beyond buying and installing software to scan and clean their hard drives. Those who receive a purported greeting-card e-mail — but don't recognize the sender — are instructed to delete the e-mail.
Source : http://www.chron.com

Pet-food death toll unlikely to be known

The number of dogs and cats killed by contaminated pet food recalled this year will probably never be known, the Food and Drug Administration says.

The FDA received a record 18,000 consumer calls after the largest pet-food recall ever started in mid-March. Officials said in May about half alleged a pet death.

But tying a pet death to the food requires information such as test results from pets' tissue and blood samples, which the FDA doesn't have in most cases, it says.

"The sad truth is that we will probably never know with any confidence the number of animals that fell victim to the pet-food poisoning," says FDA spokeswoman Julie Zawisza.

In May, FDA official Michael Rogers told reporters the FDA expected to announce "in total the number of confirmed deaths associated with these recalled products."

Zawisza says Rogers based his comment on the best information at the time. The FDA did devote 400 people, a huge number for the agency, to monitor the recalls, collect food samples and take consumer reports. But unlike in human food-borne illness cases, there was no Centers for Disease Control and Prevention staff to do the bulk of the investigation to link illnesses to products.

The FDA early on confirmed 16 pet deaths, but that number is meaningless because so many reports weren't investigated.

Three groups provide more insight about the death toll:

•The American Association of Veterinary Laboratory Diagnosticians, which includes 1,300 medical professionals, is analyzing about 400 cases, mostly of dead pets. The cases include lab results. About two-thirds involve cats. There's no way to know how many cases went unreported, says Barbara Powers, AAVLD president.

•The Veterinary Information Network, which includes 20,000 veterinarians, received almost 1,500 death or illness reports from veterinarians, says Paul Pion, VIN president. VIN plans to follow 700 to 1,000 of those to see if medical data point to food. Pion says many cases probably went unreported. He and Powers estimate a death toll of at least 1,000.

•Banfield, The Pet Hospital, a network of 620 hospitals, confirmed recall-related deaths of nine cats and two dogs out of 26 pets autopsied, says Nancy Zimmerman, senior medical adviser.

Pet-food ingredients were contaminated by melamine, a chemical added by Chinese manufacturers to make the ingredients seem more protein-rich. Most of the more than 100 types of recalled foods were made by Menu Foods.

Renee Norris of Hollywood, Md., lost her cat, Robin, 12, to kidney disease in March. She says she last heard from the FDA months ago after she filed a report and someone asked for the food pouches' identification numbers, she says.

"I'd like to know what my next step is," she says. "Am I forgotten?"
Source : http://www.usatoday.com

New Zealand Inflation Still High

New Zealand's inflation accelerated at a faster-than-expected pace in the second quarter, data Monday showed, sending the currency to 22-year highs and raising the likelihood of an interest rate hike.

The consumer price index rose 1 percent in the three months ended June 30 from the previous quarter and was up 2 percent from the same period a year earlier, according to Statistics New Zealand.

The result was above market expectations of a 0.8 percent on-quarter rise in CPI and a rise of 1.8 percent on year. The central bank had forecast a 0.7 percent quarterly increase and a 1.7 percent rise on year.

"It's very strong and strong in all the wrong places from the (Reserve Bank's) point of view," said Nick Tuffley, chief economist at the ASB Bank in Auckland.

"This has raised the odds of an interest rate increase. It's looking like a pretty fine call," for the July 26 cash rate review, he said.

Non-tradable, or domestic inflation - which excludes import prices - rose 1.1 percent on the previous quarter and 4.1 percent on year. This compares with 1.2 percent on quarter and 4.1 percent on year in the first quarter.

Market reaction was swift with the New Zealand dollar rising to a fresh 22-year peak of US$0.7894 (euro0.5728) from US$0.7861 (euro0.5705) just prior to the inflation data. It had fallen back to US$0.7863 (euro0.5707) at 0030 GMT.

The money market has significantly raised the chance of an interest rate hike next week, pricing in a 70 percent risk of a 25 basis point increase from just under 50 percent before the CPI report.

The bank raised its key rate in March, April and June by a total of 75 basis points, to a record high 8.00 percent, aimed at knocking back domestic demand and cooling inflation pressures that it expects to gain momentum over the medium term.

Data since the Reserve Bank's June 7 policy review have broadly supported policymakers' tightening bias, with no clear-cut evidence that underlying inflation is slowing sufficiently.
Source : http://www.forbes.com

Sarkozy, Merkel Will Meet to Iron Out EADS Management Overhaul

French President Nicolas Sarkozy and German Chancellor Angela Merkel are aiming to narrow differences over a management overhaul at European Aeronautic, Defence & Space Co., whose Airbus SAS division is headed for a second straight annual loss.

The government leaders and company executives are meeting from 11 a.m. tomorrow in Toulouse, France, where Airbus, the world's largest maker of commercial aircraft, is based. They'll try to iron out changes Sarkozy says are needed to attract capital to finance the new A350 XWB plane after a two-year delay in the superjumbo A380 led to the losses and plans to cut as many as 10,000 jobs.

Investors and analysts say communication and production troubles at Airbus stem partly from the political balancing act woven into the governance and management of Europe's biggest aerospace company. EADS has a German co-chairman and co-chief executive officer and a French co-chairman and co-CEO.

``Germany and France have been at odds over EADS and the talks will be far from easy,'' Raimund Saxinger, a fund manager who helps manage the equivalent of $17.3 billion at Frankfurt Trust, said in an interview. ``It's clear such a double-headed management is anything but efficient.''

Shares of EADS have fallen 23 percent since the beginning of 2006. Shares of Boeing Co., the second largest maker of commercial aircraft, gained 47 percent in the same period as profit tripled in the past three years.

`Maximum Uncertainty'

``We're tempted to go for'' EADS shares ``but that would really be entering a zone of maximum uncertainty,'' said Edouard Carmignac, chairman of Carmignac Gestion in Paris, which manages more than $13.8 million. ``I want a real manager and an end of the Franco-German pantomime'' because ``it leaves the market to Boeing.''

Both the Germans and the French agree there should be a single chairman and chief executive to streamline decision-making so that EADS becomes a ``normal'' company, in the words of French Prime Minister Francois Fillon.

Conflicting agendas may deter agreement on who would fill those posts and on matters beyond personnel. Sarkozy wants France to have a greater say in running the company -- since it owns 15 percent of EADS -- and is willing to buy more shares. Merkel, ruling out an investment, wants to ensure governments don't meddle further or that French influence outweighs German.

The squabble over EADS comes amid bickering over Sarkozy's economic policy. The French president, in office since May 16, advocates a weaker euro to boost Airbus's competitiveness, while German officials back a strong currency and defend the independence of the European Central Bank.

`Hard to See' Agreement

``There's anything but German-Franco unity over EADS at the moment,'' said Ditmar Staffelt, Germany's envoy on aerospace matters under Gerhard Schroeder, Merkel's predecessor. ``It's hard to see this thing resolved.''

EADS was formed in the July 2000 merger of Airbus's French, German and Spanish partners. The main investors from France and Germany are required to own equal stakes, according to the merger agreement, and the chairman and CEO positions are held jointly by executives from the two countries.

Beyond the French state's 15 percent stake, Paris-based Lagardere SA, France's largest publisher, owns 7.5 percent and also votes for the government. DaimlerChrysler AG, the world's second-biggest maker of luxury cars, owns 15 percent and controls voting rights for another 7.5 percent.

``We have a joint interest in having an efficient management structure between Germany and France so that the business can be run well,'' Merkel told RTL television on July 10. ``We want to have equal rights.''

Dassault Squabble

Arnaud Lagardere and Ruediger Grube are co-chairmen of EADS, which is based in Amsterdam. Tom Enders and Louis Gallois are co- CEOs. Gallois became Airbus's fourth CEO in two years last October, replacing Christian Streiff in the wake of Noel Forgeard's ouster following the A380 delays.

The latest public management squabble came last month when Enders told the Financial Times that EADS was considering selling a stake in business and fighter-jet maker Dassault Aviation SA. Six days earlier, Gallois had said the opposite. EADS then released a statement denying the newspaper report.

A month earlier, Enders told German newspaper Frankfurter Allgemeine Zeitung that the French government ``twisted our arm'' to get EADS to make a 8.6 million-euro ($11.8 million) severance payment to Forgeard, countering the French position that it played no role in the matter.

Airbus squandered its position as the dominant planemaker with its bet on the 555-seat A380, which is two years behind schedule and will cut profit at EADS by 4.8 billion euros through 2010.

Sales Reversal

Airbus logged more orders than Boeing in 2001 and remained ahead through 2005. By 2003, Airbus also surpassed Boeing in plane deliveries and retained its lead through 2006. Boeing attracted more customers last year with the 787 Dreamliner, a competitor to the A350, which isn't due to be delivered until 2013, five years after the Boeing model.

The U.S. planemaker forecasts that it will retake the lead in plane deliveries from Airbus next year. The A350 won't enter carriers' fleets until 2013 after customers snubbed earlier designs, saying the A350 was too similar to Airbus's existing A330 and didn't offer enough savings on fuel and other costs. EADS approved the A350's current design late last year.
Source : http://www.bloomberg.com

After paying off house, seniors increasingly let it pay them

With an estimated 77 million baby boomers about to hit their golden years, the move toward reverse mortgages has begun.

Though less than 2% of seniors have decided to turn the equity in their homes into cash by taking out a mortgage that pays them instead of the other way around, half of those reverse loans were written in the last two years. Plus the lending community has embraced the loan product — big time.


Reverse mortgages, also known as home-equity conversion loans, enable homeowners age 62 or older to convert their equity into tax-free proceeds. The amount you can receive is based on the age of the youngest owner, the value and location of your home and current interest rates. Generally, the older you are, the more you can get.

The house (mobile homes and cooperatives are not eligible) must be your primary residence. If there is any outstanding debt, it must be paid off with proceeds from the loan.

Reverse-mortgage borrowers can take their money in a lump sum, as monthly payments, as a line of credit that can be tapped as needed or in any combination of the three choices. Interest accrues on the borrowed amount, but no payments are necessary until the home is no longer owned. Consequently, the loan does not have to be repaid until you sell, move out or die.

In the last few months, Bank of America and Countrywide Financial have entered the home-equity conversion market. Wells Fargo already lays claim to being the nation's No. 1 retail reverse-mortgage lender. A number of smaller companies also are joining the hunt with new reverse-mortgage products.

Although all this activity holds the promise of lowering costs and increasing consumer choices, it also raises the question of rip-offs. Fortunately, reverse mortgages are loaded with consumer protections. One of the most important protections is a requirement that all borrowers must agree to attend an independent counseling session with a government-approved agency to make sure the product is the right financial tool for their situation. If anyone suggests you don't need to seek outside advice, run — don't walk — to the nearest exit.

Two key loan features also serve as consumer protections:

• Reverse mortgages are nonrecourse loans, meaning you'll never owe more than the value of the house. You'll owe the sum of what you borrowed plus the accrued interest. If the house is worth more than you owe when you leave it, you or your heirs will receive the difference. But if it is worth less than what you owe, the difference is not your problem or that of your estate.

• Mortgage insurance guarantees you will continue to receive your money if the lender goes out of business or otherwise defaults on the loan. There are other safeguards built into the product as well, according to Cheryl Chapin MacNally, who runs the senior products group at Wells Fargo in Bourne, Mass. Interest rates on adjustable loans are capped, meaning they can never rise above a certain level. There is no prepayment penalty, and borrowers can change their minds up to 72 hours after signing the papers.

Despite these protections, reverse mortgages have been a tough sell.

"It's a 20-year-old business that's still in its infancy," says Barton Johnson, president of Irvine-based Financial Freedom Senior Funding Corp., a dominant player in the field. Wells Fargo's MacNally agrees: "We haven't even scratched the surface yet. It is still a very underserved market."

But Johnson and others believe that's about to change. "The boomers are coming!" says MacNally, noting that cash-strapped senior homeowners can use reverse mortgages as financial planning tools to supplement their retirement incomes, maintain their houses, pay their property taxes, cover healthcare expenses or take care of their children and grandchildren.



Peter Bell, president of the National Reverse Mortgage Lenders Assn. in Washington, D.C., predicts that within the next few years, as many as a million reverse mortgages a year will be written.

"It's going to be a real monster product," agrees Financial Freedom's Johnson.
Source : http://www.latimes.com

Mexico watchdog sets rules for Televisa cable buy

Mexican entertainment company Grupo Televisa must share programming with other television stations as a condition for buying a stake in cable company Cablemas, anti-trust body CFC said on Sunday.

Televisa (TV.N: Quote, Profile, Research) (TLVACPO.MX: Quote, Profile, Research), which is trying to buy a 49 percent stake in Cablemas, has 90 days to comply with the ruling, the Mexican competition commission said in a statement.

"We guarantee Televisa will soon offer equal access to its content and networks," said commission head Eduardo Perez Motta. "With this we make sure consumers have the best number of options with open TV and the best prices on pay TV."

In February, the CFC set similar conditions over Televisa's bid to buy northern Mexican cable firm TVI. The commission has still not ruled on whether Televisa has complied in that case.

The watchdog said Televisa must carry a broad swathe of local programming on its satellite and cable networks before getting regulatory approval for its stake in Cablemas, which transmits to more than 700,000 subscribers in central Mexico.

Televisa is the world's top producer of Spanish-language shows. It has been trying to expand its grip on the Mexican subscription TV market by boosting cable holdings.

Source : http://www.reuters.com

BHP considers bid for Alcoa

BHP Billiton, the UK-listed miner, has asked Merrill Lynch and JPMorgan to weigh up the merits of it making a bid for Alcoa, the US aluminium group, following rival Rio Tinto’s $38bn offer for Alcan of Canada.

Rio’s offer is the largest takeover bid seen in the mining sector and is expected to trigger a wave of merger and acquisition activity as rival mining companies try to bulk up and avoid being taken over themselves.

BHP had been interested in making a bid for Alcan but Rio Tinto’s friendly all-cash offer for the aluminium group, worth $44bn when debt is included, is above what BHP would consider paying.

Attention is now shifting to Alcoa, which made a failed $27.5bn hostile bid for Alcan in May and is expected to become a takeover target itself.

It is understood that BHP, the world’s largest mining company, has asked Merrill Lynch and JPMorgan to examine whether a bid for Alcoa makes sense. The two banks are already BHP’s brokers.

Analysts say Alcoa is a less attractive target for BHP than Alcan as its aluminium smelters are less efficient and it has lots of downstream assets, such as packaging divisions, that BHP is not interested in.

But Alcoa does have a strong position in the mining and refining of aluminium’s raw materials, bauxite and alumina, which would appeal to BHP.

BHP’s senior executives are thought to be divided about whether to bid for Alcoa. One person close to the company said that Chip Goodyear, BHP’s outgoing chief executive, would not support a bid unless the deal was a friendly one.

The main issue, therefore, is whether BHP would be willing to make an offer generous enough to win a recommendation from Alcoa’s board.

This could depend in part on how much BHP thinks it could raise from spinning off Alcoa’s packaging assets.
Source : http://www.ft.com

Ford considers selling Volvo to raise $8bn

Ford, the struggling US motor industry group, is considering plans to sell off Swedish car maker Volvo in a deal that would fetch it some $8bn (£4bn) and enable chief executive Alan Mulally to focus on building the company's American brands.

The group, which lost a record $12.7bn last year, is understood to be weighing up the option of offloading Volvo in the wake of the £497m disposal of Aston Martin earlier this year and the planned sale of Jaguar and Land Rover later this year.

The mooted sale of Volvo - bought for $7bn in 1999 - would complete the dismantlement of Ford's premium car division (PAG) under Mr Mulally, who has closed 13 North American plants and axed 35,000 jobs. But the Swedish carmaker is said to be highly profitable, contributing the bulk of the $420m earnings the PAG made in the first quarter.

A PAG spokesman said: "Ford Motor Company is not in any discussions with any companies relating to selling Volvo. But since last year we have been assessing our operations around the globe and looking at strategic options which any responsible business would do."

Sources dismissed reports that a decision to sell Volvo had been taken, pointing out that this would require filings to stock market regulators such as the SEC.

They also indicated that Mr Mulally will be under pressure to give details of the Jaguar/Land Rover sales process and any planned Volvo move when he delivers second quarter results on July 26. Indicative bids for the two UK-based companies are due a week earlier but no decision is likely before the end of the year, with unions last week demanding a say in the outcome.

These moves come amid signs that Ford could be having second thoughts about its disposals policy. Land Rover, whose US sales went up 8% in the second quarter, is expected to make $1bn profits this year while Jaguar is said to be improving.
Source : http://business.guardian.co.uk