NEWS AT A GLANCE
Housing fears depress foreign stocks ... again
Most Asian markets edged lower today on concerns that the weak housing market would hurt U.S. economic health. Ongoing credit-market fears also dimmed the mood. (AP in Yahoo! Finance) Countrywide CEO Angelo Mozilo warned that the U.S. housing slump could drag the economy into recession. (Reuters) Home sales in the U.S. have followed "the path of a yo-yo" in the months since the housing boom ended, said ING economists, but "the 6-month moving average of the level of sales points out perfectly why homebuilders' sentiment recently hit a 16-year low." (MarketWatch)
Home Depot deals to save sale
Home-improvement giant Home Depot negotiated overnight to save the sale of its wholesale business, HD Supply, to three private equity firms by shaving $1.2 billion froim the $10.3 billion pricetag. Bain Capital, Carlyle Group, and Clayton Dubilier & Rice agreed buy HD Supply in June, but that was before the housing slump and credit-market dry-up hit. (MarketWatch) The banks financing the deal say housing troubles have dimmed HD Supply's prospects, and they are threatening to walk away. It's "the most expensive game of chicken you’ve ever played," said an unidentified person involved in the talks. (The New York Times, free registration required)
Gap returns to the black
Clothing retailer Gap Inc. today reported a 19 percent jump in quarterly profits, ending a streak of seven consecutive losing quarters. (Los Angeles Times, free registration required) Gap also raised its earnings guidance and announced a $1.5 billion stock buyback. The rise in profits came after Gap closed its Forth & Towne chain, eliminated about 2,200 jobs, and got rid of inventory. But same-store sales declined 5 percent. (MarketWatch) New CEO Glen Murphy will need to win back customers, noted Needham & Co. analyst Christine Chen. "They need a few quarters of merchandise improvement before people will come back," she said. (Bloomberg in The New York Times)
Selling on a prayer
Realtors and anxious home sellers are resorting to creative -- some say desperate -- ways of selling houses in this weak housing market. Some sellers are using the ancient Chinese practice of feng shui to lure buyers, while others are performing rituals to cleanse their homes of past emotions. Increasing in popularity, too, is burying a statue of St. Joseph upside down in the yard. "If a person believes that by saying certain words or performing a certain action something is going to occur, that's superstition," said Stephen Binz, who wrote a book on St. Joseph and real estate. "But appealing to a saint is an act of devotion." (MarketWatch)
BEST COLUMNS OF THE DAY
The FTC vs. Whole Foods vs. integrity
"The Federal Trade Commission was flat wrong on this one," says Loren Steffy in the Houston Chronicle. In trying to block Whole Foods from dominating the "organic grocery business," it failed to realize that "increasingly, there isn't such a thing." With its merger on track, "Whole Foods increasingly will be competing against some of the world's biggest food retailers." So it should be "buh-bye time for John Mackey," the Whole Foods CEO. By boosting Whole Foods online using a fake name, he fatally "undermined his own integrity." As Whole Foods faces "its greatest challenge," its "shareholders deserve better."
What to do with Fannie and Freddie
Don't expect Fannie Mae and Freddie Mac to stabilize the housing market, says Christopher Thornberg in the Los Angeles Times. The base of the problem is that "too many people are carrying mortgages they simply cannot afford," and neither Fannie nor Freddie is offering to "subsidize their loan payments." Even if Congress raises the amount of debt they can finance, the two chartered lenders "would only skim off the best loans in the mortgage pools," leaving "the people at the bottom of the market" high and dry. And those people, low-income and first-time buyers, are the ones "Fannie Mae was originally designed to serve."
GOOD DAY FOR: Skipping the cake, as McDonald's iconic Big Mac burger is turning 40. To celebrate, super-size pioneer Jim Delligatti, who invented the 540-calorie sandwich, opened a Big Mac museum this week. McDonald's sells about 17 Big Macs a second in the U.S. (AP in Yahoo! Finance)
BAD DAY FOR: English-only advocates, as invented languages have been thriving on the Internet and spreading to actual speakers. Langmaker-dot-com lists 1,902 made-up languages -- 'Ayvarith to Zyem -- and many of their inventors. (Los Angeles Times, free subscription required)
NOTED: A federal appeals court cleared the final hurdle preventing Whole Foods' $565 million acquisition of smaller rival Wild Oats. The appellate court said that the Federal Trade Commission had failed to sufficiently prove that the merger would quash competition in a narrowly defined "premium, natural, and organic supermarkets" arena. Some 60 percent of natural and organic foods are sold in conventional grocery stores. (AP in Yahoo! Finance)
Source - Yahoo:SugarwareZ-191:
Housing fears depress foreign stocks ... again
Most Asian markets edged lower today on concerns that the weak housing market would hurt U.S. economic health. Ongoing credit-market fears also dimmed the mood. (AP in Yahoo! Finance) Countrywide CEO Angelo Mozilo warned that the U.S. housing slump could drag the economy into recession. (Reuters) Home sales in the U.S. have followed "the path of a yo-yo" in the months since the housing boom ended, said ING economists, but "the 6-month moving average of the level of sales points out perfectly why homebuilders' sentiment recently hit a 16-year low." (MarketWatch)
Home Depot deals to save sale
Home-improvement giant Home Depot negotiated overnight to save the sale of its wholesale business, HD Supply, to three private equity firms by shaving $1.2 billion froim the $10.3 billion pricetag. Bain Capital, Carlyle Group, and Clayton Dubilier & Rice agreed buy HD Supply in June, but that was before the housing slump and credit-market dry-up hit. (MarketWatch) The banks financing the deal say housing troubles have dimmed HD Supply's prospects, and they are threatening to walk away. It's "the most expensive game of chicken you’ve ever played," said an unidentified person involved in the talks. (The New York Times, free registration required)
Gap returns to the black
Clothing retailer Gap Inc. today reported a 19 percent jump in quarterly profits, ending a streak of seven consecutive losing quarters. (Los Angeles Times, free registration required) Gap also raised its earnings guidance and announced a $1.5 billion stock buyback. The rise in profits came after Gap closed its Forth & Towne chain, eliminated about 2,200 jobs, and got rid of inventory. But same-store sales declined 5 percent. (MarketWatch) New CEO Glen Murphy will need to win back customers, noted Needham & Co. analyst Christine Chen. "They need a few quarters of merchandise improvement before people will come back," she said. (Bloomberg in The New York Times)
Selling on a prayer
Realtors and anxious home sellers are resorting to creative -- some say desperate -- ways of selling houses in this weak housing market. Some sellers are using the ancient Chinese practice of feng shui to lure buyers, while others are performing rituals to cleanse their homes of past emotions. Increasing in popularity, too, is burying a statue of St. Joseph upside down in the yard. "If a person believes that by saying certain words or performing a certain action something is going to occur, that's superstition," said Stephen Binz, who wrote a book on St. Joseph and real estate. "But appealing to a saint is an act of devotion." (MarketWatch)
BEST COLUMNS OF THE DAY
The FTC vs. Whole Foods vs. integrity
"The Federal Trade Commission was flat wrong on this one," says Loren Steffy in the Houston Chronicle. In trying to block Whole Foods from dominating the "organic grocery business," it failed to realize that "increasingly, there isn't such a thing." With its merger on track, "Whole Foods increasingly will be competing against some of the world's biggest food retailers." So it should be "buh-bye time for John Mackey," the Whole Foods CEO. By boosting Whole Foods online using a fake name, he fatally "undermined his own integrity." As Whole Foods faces "its greatest challenge," its "shareholders deserve better."
What to do with Fannie and Freddie
Don't expect Fannie Mae and Freddie Mac to stabilize the housing market, says Christopher Thornberg in the Los Angeles Times. The base of the problem is that "too many people are carrying mortgages they simply cannot afford," and neither Fannie nor Freddie is offering to "subsidize their loan payments." Even if Congress raises the amount of debt they can finance, the two chartered lenders "would only skim off the best loans in the mortgage pools," leaving "the people at the bottom of the market" high and dry. And those people, low-income and first-time buyers, are the ones "Fannie Mae was originally designed to serve."
GOOD DAY FOR: Skipping the cake, as McDonald's iconic Big Mac burger is turning 40. To celebrate, super-size pioneer Jim Delligatti, who invented the 540-calorie sandwich, opened a Big Mac museum this week. McDonald's sells about 17 Big Macs a second in the U.S. (AP in Yahoo! Finance)
BAD DAY FOR: English-only advocates, as invented languages have been thriving on the Internet and spreading to actual speakers. Langmaker-dot-com lists 1,902 made-up languages -- 'Ayvarith to Zyem -- and many of their inventors. (Los Angeles Times, free subscription required)
NOTED: A federal appeals court cleared the final hurdle preventing Whole Foods' $565 million acquisition of smaller rival Wild Oats. The appellate court said that the Federal Trade Commission had failed to sufficiently prove that the merger would quash competition in a narrowly defined "premium, natural, and organic supermarkets" arena. Some 60 percent of natural and organic foods are sold in conventional grocery stores. (AP in Yahoo! Finance)
Source - Yahoo:SugarwareZ-191: