A strong earthquake struck off the coast of Indonesia Monday, the U.S. Geological Survey reported.
The 6.0-magnitude quake hit at 12:54 p.m. local time (0454 GMT) in the Gulf of Tomini, according to the U.S. monitoring agency.
The epicenter was off the Indonesian island of Sulawesi, about 90 miles (144 km) northeast of the town of Palu, the monitoring agency said. There were no immediate reports of damage or injuries.
Monday, October 20, 2008
6.0-magnitude quake hits Indonesia
Kidnapped boy found safe in Las Vegas
A 6-year-old boy abducted Wednesday in Las Vegas, Nevada, has been found safe, the Las Vegas police department announced early Sunday.
"Cole (Puffinburger) has been found, he is safe and in our custody," Capt. Vince Cannito told reporters in an early morning news conference.
Cannito said that while detectives were canvassing Las Vegas neighborhoods Saturday night with flyers about the boy's abduction, they got a report that a young boy who matched Cole's description was seen walking alone on a sidewalk on the city's east side.
"Detectives rushed there, found the boy and confirmed it was Cole," Cannito said.
"It's just a blessing that this child has been found and he's in extremely good condition," the captain added.
Cole's father, Robert Puffinburger, said the emotion he felt after being informed that his son was safe was "indescribable."
"I'm just glad he's safe," Puffinburger said at the news conference, his voice breaking. "I can't wait to see him!"
Cole was snatched Wednesday in what police are calling a drug-related kidnapping. Three armed men tied up his mother and her fiance and ransacked the home, taking the boy when no money was found, police said.
A nationwide Amber Alert was canceled because police believed it had "run its course," Cannito said Saturday.
Police say Cole's grandfather, Clemons F. Tinnemeyer, 51, had been involved in "significant drug dealing" and may have taken millions of dollars from drug dealers. Authorities say the kidnapping may have been in retaliation for the theft.
Tinnemeyer was arrested Friday in Riverside, California, where he was being held as a material witness. He has been interviewed, along with an unidentified second person, in connection with the case.
Cannito asked for the public's help in finding Jesus Gastelum, a third person of interest.
Obama raises record $150 million in September
Barack Obama's campaign announced Sunday the Democratic presidential candidate raised $150 million in donations in September, setting a new high-water mark in campaign fundraising.
In a campaign video, Obama campaign manager David Plouffe said a record 632,000 new donors gave to the campaign, with the average contribution under $100. More than 3 million donors have given so far.
The Obama campaign raised $65 million in August.
Regardless of the stunning haul, Plouffe told supporters the campaign still needed more money because of "the slime that we're getting from the McCain campaign." Plouffe cited recent attack ads and automated phone calls in battleground states and said the campaign needed to have every resource to "fight back."
"Their campaign is going to descend even more into the gutter," he said.
Plouffe also said the campaign was expanding its reach to compete "aggressively" in West Virginia.
Tightening polls in Georgia and North Dakota meant more money and resources could be sent to those two states in the remaining days, he said.
"We can't afford to make any cuts. We have to execute everything we think is required to win," Plouffe said of their battleground strategy. "None of us can look back on the night of November 4 or the morning of November 5 and wished we had done something extra."
Saturday, October 18, 2008
Migrant numbers 'must be reduced'
Phil Woolas told the Times immigration became an "extremely thorny" subject when people were losing their jobs.
"It's been too easy to get into this country in the past and it's going to get harder," he said.
The Home Office said the current points-based system provided "a powerful and flexible set of controls".
The government has recently introduced the points-based system to attract migrants from outside the EU judged to be most valuable to the economy.
But Mr Woolas said: "If people are being made unemployed, the question of immigration becomes extremely thorny."
"This government isn't going to allow the population to go up to 70 million," he continued.
"There has to be a balance between the number of people coming in and the number of people leaving."
Figures from the Office for National Statistics show the population grew by nearly two million to 60,975,000 people between 2001 and 2007.
Ministers have previously resisted calls for an overall limit on immigration.
BBC political correspondent Ross Hawkins said it was significant Mr Woolas had quoted 70 million as the upper limit for the UK population.
The government had, before now, fought shy of setting a "population policy" because it was difficult for ministers to explain how it would be managed, he said.
Our correspondent explained this was because immigration from inside the EU could not be controlled, neither could a limit be placed on genuine claims for asylum.
This meant there would be "all sorts of questions raised" about how the government was going to achieve its aim, he added.
'Turning point'
Sir Andrew Green, the chairman of Migrationwatch, which argues for balanced migration, told BBC Five Live Mr Woolas's remarks showed a significant development in the immigration debate.
"I think this could be a significant turning point. I think the economic crisis has shown up the weakness of uncontrolled immigration.
"This is the very first time that a government minister has recognised the link between immigration and population. The government have been in denial about that for years."
But the chairman of the Commons Home Affairs Select Committee, Keith Vaz, told the Times he would be "astonished" at a Labour immigration minister "in effect changing the policy".
The Labour MP added: "His predecessor and the home secretary have made it very clear they do not support a quota."
Habib Rahman, of the Joint Council for the Welfare of Immigrants, also told the paper: "This could drive a coach and horses through any notion of managed migration through the government's new points-based system... on which it held long and detailed consultations before unveiling it as the answer to the country's economic needs."
Immigration controls
A Home Office spokesman said the government's points-based system provided "a powerful and flexible set of controls".
These allow the government "to raise or lower the bar according to the needs of business and the country as a whole".
He added: "Our tough new Australian points system, plus our plans for newcomers to earn their citizenship, will reduce overall numbers of economic migrants coming to Britain, and the numbers awarded permanent settlement.
"Crucially the points system means only the migrants with the skills Britain needs can come - and no more.
"Had the points-based system been in place last year there would have been 12% fewer people coming in to work through the equivalent work permit route." Read more!
Illuminated Keyboard is Comfortable
Instead, for $80 it offers a sexy, quiet keyboard with a very minimalist design that looks just as good as it performs. If you're a night owl gamer or just want an attractive, comfortable input device, the Logitech Illuminated Keyboard is an outstanding choice.
The keyboard has a very subtle, professional appearance; aside from the extremely thin 9.3mm profile, the entire keyboard is black with a small clear plastic border that doesn't serve a purpose other than to highlight the flat surface of the keys.
A built-in wrist rest fixed beneath the keys is covered in a soft rubber material to prevent your hands from slipping while you type. After using the keyboard for a few days, the natural oil on our hands made small prints on the wrist rest, creating blotches that marred the otherwise clean design.
Underneath the keyboard, you'll find two small plastic feet that extend from the base, letting you slightly angle the keyboard forward. Finally, as the title says, the keyboard comes with embedded microlens reflectors under each individual key that produce a light-blue backlit effect. You can adjust the intensity of the light to three predetermined settings; you can also turn it off, if you so choose.
The keyboard is plug-and-play, so you don't have to install drivers, but if you want to specify macros or customize any of the 12 shortcut keys, you need to install Logitech's SetPoint 4.6KB software.
The included CD lets you designate each key to perform a variety of functions including opening a Web page, showing a custom menu, opening a specified file, or launching a program. The SetPoint desktop software also includes a help center that contains tips on how to get the most comfortable experience out of the Logitech keyboard.
Similar to Logitech's higher-end diNovo Edge, the Illuminated Keyboard features Logitech's PerfectStroke key design. PerfectStroke allows for 3.2mm of space between each key and uniform tactile feedback across the entire flat key surface.
In practice, the key response is similar to that of an IBM Thinkpad laptop. If you're used to typing on a regular keyboard with concave keys, the Illuminated Keyboard will be an acquired taste. Your accuracy might suffer in the interim, but we found ourselves typing significantly faster after less than a week of using it.
Although it is undoubtedly attractive and works well, the Logitech can use some improvement in the hardware design. First, the keyboard lacks the extra USB ports that we typically see on keyboards at this price. We complained about the Logitech G15's outdated USB 1.1 ports, so we have to ding Logitech again for not even including one port into this design.
Granted, the keyboard's slim profile doesn't allow for much room for hardware extensions, but we'd sacrifice a slightly thicker housing for the increased functionality. We're also disappointed to see that the keyboard uses USB 2.0 instead a wireless RFID transmitter for connectivity.
The clean aesthetic of the keyboard is almost spoiled by the unsightly gray wire protruding from the top, but if you're a closet gamer you'll appreciate the accuracy you get in a wired set up.
For your consideration, the Saitek Eclipse II Illuminated Keyboard is another illuminated keyboard that came out two years ago for $70. Its price is now down to $45; the Logitech is almost double the price, and we're quick to complain about its lack of features, but we think the higher price is justified by its elevated comfort and modern style Read more!
OutCast offers top-notch wireless sound
Competitive pricing, however, is not Soundcast's strong suit, and the OutCast is no exception.
This $700 weatherproof, wireless speaker setup is definitely not your average iPod speaker, but that's a good thing. It's innovative, extremely easy to use, and offers great sound quality.
It could use some help in the looks department, though.
The Soundcast OutCast includes two main parts: the speaker unit and an iCast, which contains the wireless transmitter and acts as a base station for your iPod or other audio source.
The iCast is a rather compact and nondescript-looking device that's shaped like a crescent moon lying face down and colored in computer white, muted gray, and a bit of neon green. A cradle that fits any dock-connecting iPod is built into the top, while a port for attaching other audio sources is housed in the back.
Soundcast includes both an RCA-to-minijack cable and a minijack-to-minijack cable for connecting various devices. There's also a power input and a channel switch, which allows the iCast to transmit to one of three possible receivers. One of these is the included speaker, but Soundcast also makes a couple standalone receivers that can be purchased separately.
The OutCast speaker unit is patently not compact, nor is it the most stylish piece of audio equipment we've come across. That's not to say it's ugly, per se; rather, it has a nondescript look that will probably blend into most patio or garage settings nicely. However, it showed dirt and scuff marks very easily after just one jaunt outside (black would have been a better color option). And we'd be remiss if we failed to mention that several observers at our test site asked if it was a diaper genie.
Namely, the OutCast is huge (it measures about 25-inches tall and 10-inches in diameter) and cylindrical, and it weighs 40 pounds. Thus, despite the fact that it's battery operated, it's not precisely portable; in other words, you can move it from place to place if needed, but you probably won't want to do it often.
The good: The Soundcast OutCast speaker system is extremely innovative, featuring a weatherproof and completely wireless design that's a snap to set up.
The included base station offers an iPod dock as well as multiple other audio-connection options; the transmitter works on a proprietary 2.4GHz frequency and can send a signal several hundred feet away; the speaker unit has a rechargeable, user-replaceable battery; wired and wireless audio quality is impressive.
The bad: The Soundcast OutCast is expensive and the speaker unit is large and heavy, which limits portability; the design is nondescript to the point of lacking any style.
The bottom line: The Soundcast OutCast speaker system is an excellent--though expensive--choice for those who want all the benefits of great-sounding, outdoor wireless audio without the hassles of tricky setup and weather-damaged equipment.
Specs: Type of speaker: indoor / outdoor; Amplification type: Active
All this heft bodes well for durability, and also suggests that the OutCast is of the quality that the price tag implies. Of course, the niftiest aspect of the OutCast's design is its ability to be completely wireless and weatherproof. Once you charge up the battery (rated for 10 hours) and close the port flaps, the speaker can withstand a healthy dose of wet while receiving wireless audio from the iCast, which can be up to 350 feet away, inside and out of the elements.
The OutCast features an array of buttons on the top, including play/pause and track shuttle keys that can be used to control an iPod docked in the iCast. There are also power and volume buttons, as well as a key that controls a blue ambient light at the bottom of the speaker.
The OutCast can be used as a standalone speaker as well, though that takes away from its water-resistance, since the audio-in port must be uncovered in order to connect a source.
Setting up the OutCast couldn't be simpler. The first thing you'll need to do is install the OutCast's battery, which is a bit of a chore and requires a screwdriver, but it's not a difficult process.
Then, just plop your iPod into the iCast, connect the power cable, make sure the iCast and OutCast are on the same channel, and hit play. Music pumps out immediately. The playback controls on the speaker work just fine, though the response delay increases the further the speaker is from the base.
The wireless performance in general is great: no hiccups from more than 100 feet away through several office walls.
The star of the show, though, is sound quality. The OutCast features four 3-inch tweeters, which are arranged around the center of the speaker in order to output sound in all directions. There's also a 100-watt digital amplifier and an 8-inch downward firing subwoofer. This means that music not only gets exceptionally loud, it also offers truly powerful bass--you can feel it thumping in your chest (the true test of any good speaker, in our book).
Audio is expansive, encompassing, and clear--all things we expect from a unit in this price range. If you're looking for an easy way to port impressive wireless audio from your living room to your patio, the Read more!
Apple frees iPhone software makers from secrecy pledge
The switch, announced Wednesday, comes a week after the introduction of the first phone loaded with Google Inc.'s Android software, an open-source operating system that lets developers make and sell programs without restriction.
In contrast, Apple had required every person who downloaded the iPhone software developer kit to pledge not to speak about its contents, even to fellow developers.
Recently, the Cupertino, California-based company also barred programmers whose applications it rejected from iTunes -- the only legitimate place to sell iPhone "apps" -- from posting the reasons for rejection on the Web. The move fueled a new wave of critiques about Apple's approval process, already seen by many developers as secretive and capricious.
Apple said the iPhone nondisclosure agreement, or NDA, was meant to protect Apple's innovations, "so that others don't steal our work. It has happened before."
However, programmers complained the NDA prohibited them from sharing tips or comparing solutions to common problems. Sharing information could help them produce programs faster and with fewer bugs, they said.
In response, Apple acknowledged that the NDA created a burden on the developer community, and so it will no longer apply to iPhone software that has already been released. Programmers who are working with unreleased test versions of new iPhone software will still be bound by an NDA.
That's in line with the sort of agreements Apple makes with Macintosh computer software programmers, and with practices of other companies, including Microsoft Corp Read more!
British couple defends son's Swiss suicide : Latest Updates
LONDON, England (AP) -- The parents of a 23-year-old rugby player who committed suicide after a training accident left him paralyzed say the decision gave him "welcome relief."
Daniel James died in a Swiss clinic on September 12, according to a local authority in central England.
But the Worcestershire Coroner Service does not say how James -- who was paralyzed from the chest down -- got to Switzerland.
British law bars anyone from cooperating with a suicide attempt. Local police say they are investigating.
Assisted suicide is legal in Switzerland under some circumstances, and various organizations there provide suicide services.
Julie and Mark James said Friday that their son's death was "no doubt a welcome relief from the 'prison' he felt his body had become."
Stocks end back-and-forth session mixed
NEW YORK – Wall Street ended a tumultuous two-week run relatively quietly Friday, finishing another back-and-forth session mixed as investors were cheered by signs of easing in the credit markets and managed to absorb lackluster economic news with equanimity. But while there was less volatility than during recent sessions, analysts warned that the market still faces rough times.
The expiration of options contracts helped tug stocks in different directions. Still, the Dow Jones industrial average traded within a narrower range than it had in much of the past two weeks and ended down 127. The market's big rallies on Monday and Thursday gave all the major indexes gains of well over 3 percent for the week — but that was just a partial recovery from the devastating double-digit drops of the previous week.
"The stock market has finally realized one thing — that the governments around the world have thrown in a lot of money and they're using all the tools that they possibly can" to restore order to the credit markets, said Peter Cardillo, chief market economist at Avalon Partners Inc., a New York brokerage house. "I'm sure we'll still have a strong bear grip to the market but I do believe the market was way oversold. I do believe we've made a bottom."
In recoveries from past market plunges, trading has remained volatile even after the major indexes reached their lows, so it is widely expected that Wall Street will ratchet higher and lower for some time. And, it is not yet clear that the market has actually touched bottom.
"I think were going to be groping along for the bottom for the next few weeks," said Phil Orlando, chief equity market strategist at Federated Investors.
Cardillo said economic data are likely to remain bleak but that market has already taken into account much of the economy's problems. Some of this week's heavy selling came in response to disappointing economic reports.
"Everything is ugly. It's going to stay this way for a while," Cardillo said.
The market spent the first half of Friday's session moving between gains and losses after the government said new home construction dropped by more than expected last month to the lowest pace since early 1991. Investors' mood seemed to pick up later in the session as lending rates for bank-to-bank loans edged lower, indicating that some bank fears about not being repaid by borrowers are easing. Demand for safe-haven investments like Treasury bills also decreased. The final hour of trading again proved pivotal as in much of October; stocks fluctuated as investors squared away positions for the week.
Given the magnitude of most of the market's moves in October, the indexes' moderate declines Friday seemed barely noteworthy. And advancing issues outnumbered decliners by about 9 to 7 on the New York Stock Exchange, where consolidated volume came to 6.48 billion shares, down from 7.86 billion Thursday.
The revival of dormant credit markets — which follows a series of moves by governments around the world — appeared to draw most of investors' attention. The London interbank offered rate, or Libor, for three-month dollar loans fell to 4.41 percent from 4.50 percent on Thursday, the fifth consecutive day of declines.
Demand remains high for Treasury bills, regarded as the safest assets around, an indication that there is uncertainty lingering in the markets. The three-month Treasury bill Friday yielded 0.82 percent, up from 0.47 percent on Thursday. That indicates a let-up in demand, though the yield has not surpassed 1 percent in more than a week.
The yield on the benchmark 10-year Treasury note fell to 3.93 percent from 3.97 percent late Thursday.
The credit markets began to seize up in mid-September, after the bankruptcy filing of Lehman Brothers Holdings Inc. raised fears among banks that other financial institutions would also be unable to repay their debts. That in turn brought the lending industry to a near-standstill, threatening the economy that depends on a free flow of cash and liquidity.
"I think we're beginning to get a slightly better feeling in the credit market," said Cardillo, pointing to the move in Libor.
It was an erratic week on Wall Street, with the Dow soaring 936 points on Monday, slipping moderately Tuesday, sinking 733 points Wednesday, and then rallying 401 Thursday. The volatility is not providing investors with much relief, but it is a welcome change from last week's relentless plunge, during which the Dow logged its worst week ever and Wall Street lost about $2.4 trillion in shareholder wealth.
The Dow fell 127.04, or 1.41 percent, Friday to 8,852.22, after falling 261 points in the early going and rising 302 points — a 563-point range.
Broader stock indicators showed more modest declines. The Standard & Poor's 500 index fell 5.88, or 0.62 percent, to 940.55, while the Nasdaq composite index fell 6.42, or 0.37 percent, to 1,711.29.
For the week, the Dow rose 4.75 percent, the S&P 500 added 4.6 percent, while the Nasdaq rose 3.75 percent. But the gains follow the previous week's huge losses, when the Dow dropped 18.2 percent, the S&P 500 fell 15.3 percent and the Nasdaq lost 15.3 percent.
The dollar was mixed against other major currencies, while gold prices fell.
David Dietze, president at Point View Financial Services Inc. in Summit, N.J., contends that much of the market's whipsaw moves in the past month have come as hedge funds and mutual funds were forced to sell positions because some shareholders were cashing out.
"These hedge funds are getting hit by redemptions, their credit lines are being pulled and they are having to sell furiously," he said. "Selling begets selling, which begets selling, which begets more selling."
While Dietze sees risks for the economy, he questions whether the rapidity of the stock market's retreat signals the pullback was overdone.
"We have a credit crunch which is morphing into a general recession and certainly a lot of the economic data points down but still, to come in this week and see the markets down 20 percent — basically a bear market within a bear market just this month — you wonder if there isn't just this massive overreaction," he said.
A rise in oil prices helped energy companies, some of which had weighed on the market earlier in the week as oil showed steep declines. Light, sweet crude rose $2 to settle at $71.85 a barrel on the New York Mercantile Exchange. On Thursday, it sank to a 14-month low on worries about a deep global recession obliterating fuel demand.
Chesapeake Energy Corp. rose $2.12, or 11.6 percent, to $20.47, while XTO Energy Inc. rose $2.08, or 7 percent, to $31.68.
Late Thursday, Google Inc. posted a 26 percent increase in third-quarter profit. Google rose $19.52, or 5.5 percent, to $372.54; early Thursday, the Internet company's stock had fallen to a three-year low.
Economic readings that appeared to trouble the market early in the session seemed to lose their importance as investors looked to improvement in the credit markets.
The Commerce Department reported that housing starts fell more than 6 percent in September to an annual rate of 817,000 units. The figure is lower than the 880,000 units forecast by Wall Street economists surveyed by Thomson/IFR. Building permits also sank.
The report was yet another piece of evidence that the nation is struggling with a weak economy that, if the financial crisis is not solved, could weaken. President Bush on Friday said in a speech that the credit market — where many companies find funding for their operations — will take a while to thaw, but that Americans should be confident that it will.
The Russell 2000 index of smaller companies fell 10.14, or 1.89 percent, to 526.43.
Markets overseas were mostly higher Friday. In Asia, Hong Kong's Hang Seng index dropped 4.44 percent to its lowest level in almost three years, but Japan's Nikkei average rose 2.78 percent after a 11.4 percent loss Thursday. In Europe, Britain's FTSE index rose 5.22 percent, Germany's DAX index rose 3.43 percent, and France's CAC-40 rose 4.68 percent.
The Dow Jones industrial average ended the week up 401.03, or 4.75 percent, at 8,852.22. The Standard & Poor's 500 index finished up 41.33, or 4.60 percent, at 940.55. The Nasdaq composite index ended the week up 61.78, or 3.75 percent, at 1,711.29.
The Russell 2000 index finished the week up 3.95, or 0.76 percent, at 526.43.
The Dow Jones Wilshire 5000 Composite Index — a free-float weighted index that measures 5,000 U.S. based companies — ended at 9,514.37, up 393.59 points, or 4.32 percent, for the week. A year ago, the index was at 15,577.43.
Fed: Economy sinks deeper into rut
The Fed's new snapshot of business conditions around the nation showed economic activity weakened across all of the Fed's 12 regional districts. Consumer spending — which accounts for more than two-thirds of economic activity — slumped in most Fed regions. Manufacturing also slowed in most areas.
Some businesses had become more pessimistic about the economic outlook, the Fed said.
The survey was released shortly after Fed Chairman Ben Bernanke, in a speech in New York, warned that it would take time for the country's economic health to mend even if badly needed confidence in the U.S. financial system returns and roiled markets stabilize.
In an unprecedented action last week, the Fed and other major central banks sliced interest rates to prevent the financial crisis from plunging the U.S. — and the global economy — into a long and painful recession.
Many economists believe the Fed might lower its key rate — now at 1.50 percent — again later this month at its regularly scheduled meeting.
Consumers are pulling back, raising the odds the economy will contract later this year and early next year. Some think the economy may have jolted into reverse in the recently ended third quarter. One classic definition of a recession is two straight quarters of contracting economic activity.
Shoppers are becoming more price conscious and credit is even harder to come by, factors sapping sales at the nation's retailers, the report said. Given this, retailers foresee a "weaker economic outlook, including a slow holiday season," the Fed said.
Vanishing jobs, shrinking paychecks, dwindling nest eggs and falling home values all are making consumers more cautious and less inclined to spend, slowing the overall economy. Retail sales, auto sales and tourism all turned weaker, the Fed said.
The Fed report is based on information supplied by the Fed's 12 regional banks. The information was collected before Oct. 6, which began one of the worst weeks in Wall Street's history. Read more!
Industrial production falls by most since late `74
WASHINGTON – Big industry production plunged in September by the most since late 1974, largely reflecting fallout from hurricanes Gustav and Ike.
The Federal Reserve reported Thursday that production at the nation's factories, mines and utilities plunged 2.8 percent last month, on top of a 1 percent drop in August.
The Fed estimated that disruptions related to the hurricanes accounted for about 2.25 percentage points of the total drop in industrial production in September. In addition, a strike affecting the commercial aircraft industry also was a factor in the poor showing, accounting for around a half percentage point of the overall decline, the Fed said.
The drop in industrial production in September was the biggest since December 1974, when output fell 3.5 percent.
The latest showing on industrial activity was worse than economists expected. They were forecasting a decline of 0.8 percent.
Crude oil and natural gas production in the Gulf of Mexico were suspended because of the hurriances, contributing to the hit to overall industrial output, the Fed said. Hurricane related shutdown of petroleum refineries and petrochemical producers also factored into the drop. Other manufacturing industries reported outages from the storms, which also held back production last month.
Still, even before the hurriances hit, manufacturing has been feeling the pain of the housing collapse, credit problems and weaker demand from the slowing U.S. economy. Demand for housing related goods and construction materials has been particularly hard hit as the housing slump has dragged on.
Slowdowns in other overseas economies, meanwhile, are expected to sap demand for U.S. exports, which has been a key factor keeping the U.S. economy afloat.
Late night laughs at Joe the Plumber
Fifteen minutes of fame can stink sometimes.
With newfound fame comes a big price: being the subject of late-night jokes. The dedicated dad from Ohio (whose first name is Samuel) has become fodder for every comedian out there .... even Joe Biden.
In our video round-up of every Joe joke told on late-night TV, the Democratic VP nominee kicks it off with an appearance on Leno. Joe the Senator takes a dig at Joe the Plumber while Leno wonders what the heck happened to Joe Sixpack.
Conan counts the plumber nods at the debate (a whopping 21, he says) and wonders what happened to Bush's favorite Joe Average, Larry the Cable Guy.
Not to be outdone, Letterman, Colbert, Kimmel and Stewart go for their own set of chuckles.
Not to worry though, Joe, 15 minutes never last too long. I think I hear the egg-timer now..
Palin Explains What Parts Of Country Not "Pro-America"
The McCain campaign is seeking to clarify a remark reported from a Sarah Palin fundraiser in North Carolina yesterday in which the Alaska Governor declared that she loved to visit the "pro-America" areas of the country -- implying, implicitly, that there were some parts of the United States she viewed as not pro-America.
The reporter who broke the story, the Washington Post's Juliet Eilperin, sends over the following, extended quote from a more detailed version of the pool report.
"We believe that the best of America is not all in Washington, D.C. We believe" -- here the audience interrupted Palin with applause and cheers -- "We believe that the best of America is in these small towns that we get to visit, and in these wonderful little pockets of what I call the real America, being here with all of you hard working very patriotic, um, very, um, pro-America areas of this great nation. This is where we find the kindness and the goodness and the courage of everyday Americans. Those who are running our factories and teaching our kids and growing our food and are fighting our wars for us. Those who are protecting us in uniform. Those who are protecting the virtues of freedom."
Not sure how much this helps Palin out. Is the VP candidate saying that small towns are more authentically American than, say, suburbia or cities?
As Eilperin writes: "The upshot? Washington D.C. is neither 'real America' or 'pro-America.' Other parts of the nation? It's unclear, but if you live in a small town, you're probably patriotic from Palin's point of view." Read more!
UPS rates to increase nearly 6%
NEW YORK (AP) -- United Parcel Service Inc. on Friday announced a general rate increase of 5.9% for 2009.
UPS, the world's largest package delivery company, will raise ground shipment rates by an average of 5.9% and increase rates on air express and international shipments bound from the U.S. by an average of 4.9%.
The rate hikes take effect Jan. 5.
N.Y. congressman convicted of drunken driving
ALEXANDRIA, Virginia (AP) -- Rep. Vito Fossella was convicted Friday of drunken driving in suburban Virginia, another blow from a late-night traffic stop that exposed secrets of his personal life and wrecked his career.
After a daylong trial at Alexandria General District Court, Judge Becky Moore found Fossella guilty of driving under the influence when he was pulled over for running a red light shortly after midnight May 1.
The arrest led to revelations that he had fathered a child from an extramarital affair, and he decided not to seek re-election. Fossella, New York City's only Republican congressman, was first elected to the House in 1997.
The judge said she would hold a hearing December 8 to determine whether prosecutors had met the legal threshold for high blood-alcohol content, which would mean a mandatory five-day jail sentence.
Crying friends hugged Fossella in the courtroom after the verdict.
"Don't worry. It'll be OK," he told them.
The congressman declined to speak to reporters as he left the courthouse but issued a statement saying he was grateful the trial gave "an honest and straightforward account" of the events.
"I made a serious mistake, and I want to again apologize for setting the wrong example," he said. "I believe we live in a nation of laws, that no one person is above the law, and I look forward to the judge's final determination in December."
Fossella's day in court featured hours of dry, technical testimony but also talk about a White House party, an Intoxilyzer 5000 breath-test machine and the congressman's bowels.
The afternoon before his arrest, Fossella had been at the White House celebrating the New York Giants' Super Bowl victory, but witnesses insisted that no alcohol was served or consumed there.
Later, he went to dinner with friends, where he had "no more than a glass and a half" of wine, he testified, plus a few more sips at a tavern.
Police officer Jamie Gernatt said he stopped Fossella's car that night for running a red light, and the driver, Fossella, appeared to be drunk.
"There was a strong odor of alcoholic beverage coming from the car, and his lips were stained red," Gernatt testified.
The police officer said Fossella told him he'd had two or three glasses of wine but had bloodshot eyes and made mistakes in sobriety tests.
Police say his blood-alcohol content level was 0.17 percent, more than twice the legal limit, and under state law, anyone convicted of having a BAC above 0.15 must serve a mandatory five-day jail term.
In announcing her verdict, the judge said she would hear arguments on that issue later.
Through the day's evidence, Fossella listened glumly but intently to the evidence. At one point, he looked incredulous as Gernatt described one of their conversations on the night of the arrest, but otherwise he showed little reaction.
Another officer, Richard Sandoval, described strange behavior by Fossella when he was brought to a police station to submit to a breath test by the Intoxilyzer 5000.
At one point, according to Sandoval, Fossella asked to go to the bathroom and was told he couldn't. At that point, the congressman said he would have to defecate in the room.
Sandoval said he told Fossella they were "guests" at the police station, and "he wasn't going to defecate" in it.
On the witness stand, the congressman denied the story, saying that the officer had yelled at him and mocked him at times during the breath testing.
Defense lawyer Jerry Phillips challenged the types of field sobriety tests given to Fossella and spent hours trying to prove that the Intoxilyzer 5000 machine gave bad readings because of interference from police radios and because Fossella used a hand sanitizer.
The judge rejected a defense claim that the first officer had no grounds to arrest Fossella.
Police said the married 43-year-old told them when he was pulled over that he was headed to see his sick daughter. Given that his wife and children live in New York, that statement set off alarms and eventually led to the revelation he had secretly fathered a daughter, now 3 years old, with a Virginia woman, Laura Fay, a former Air Force officer and congressional liaison.
After admitting the relationship, Fossella announced that he would not seek re-election, a drastic fall for a politician once viewed as a potential mayor of New York. His downfall has also created an opportunity for Democrats to gain a seat in Congress in November.
Fossella's troubles have only further hurt his state party's election chances next month. If a Democrat wins Fossella's seat, it will mark the first time in 35 years that all of New York City has been represented by Democrats
Personal touch helps keep banks healthy
Conservative lending practices seem to be a common denominator among banks that have remained strong and stable during the current banking crisis, and those banks are still making loans.
The failures of behemoths such as Washington Mutual and IndyMac have drawn media attention, but not all big banks are in trouble -- and smaller banks are not immune.
According to the Federal Deposit Insurance Corp., 15 banks have failed in 2008, ranging from giant WaMu, with $188 billion in total deposits, to tiny Hume Bank in Hume, Missouri, with total deposits of just $13.6 million.
Only three banks failed in 2007, and none in 2005 and 2006, according to FDIC records.
"We're open for business, and we're making loans for qualified applicants," said Therese Myers, spokeswoman for Keybank, a Cleveland, Ohio, bank with branches in 15 states and total deposits of $61 billion.
It's the same story at much smaller State Bank of Southern Utah, whose 15 branches hold $500 million in total deposits.
"Our underwriting standards have tightened a little bit," said Ronald Heaton, president of the Cedar City, Utah, bank. "... Our standards haven't changed drastically, and we're still loaning ... but we're watching our underwriting standards closely so that people are able to repay their loans."
Most of the bank's lending is for purchases of land and to provide cash for small businesses. It sells virtually all its mortgages to the Federal Housing Administration or Fannie Mae, Heaton said.
Mortgages that didn't require borrowers to prove their income or make a down payment got many lenders into trouble, but his bank never offered those: "Didn't make sense," he said.
Some would-be borrowers "wanted us to do everything, and we said, 'We don't do everything. We have standards,' " Heaton added.
Nonbank mortgage lenders were able to generate substandard mortgages because they were not adequately regulated by the federal government, Heaton said.
Now those bad loans have come home to roost, the nonbank lenders are out of the game, and State Bank of Southern Utah's mortgage business is picking up, Heaton said.
However, the bank's core business of lending for land development and small businesses has slowed with the economy, he said.
"We're working through those, but we don't have terrible dealings in that area because we required a lot down and we know the people we deal with. They're all local people, and most of them had good equity into their projects," Heaton said.
"But as time goes on, if the economy doesn't pick up, some of them will have problems, but we think we can work those out."
Lax regulation and irresponsible lending led to the current crisis, Heaton said.
"I'm irate over the whole thing," he said. "... I just know it's a mess, and we're not the cause, but we're going to have to pay for it."
In Texas, the state Department of Banking says state-chartered institutions wisely stayed out of the subprime game.
"That's not what we do. We're not in the subprime market whatsoever," said Todd McKee, president of Peoples Bank in Lubbock. "Lending here is the same as it's always been."
The way it's always been is up close and personal. McKee said his bank's customers prefer to do business with tellers face-to-face rather than through the drive-up window.
"I'm president of the bank, and I sit right by the front door, so I wave at every single soul that walks in the bank. Everybody has access to me," he said. "My partner [Larry Allen] is the CEO. ... He sits at the other door. So we know everybody that comes in the door.
"You're going to hear every bank say that they're relationship bankers. You're not unless you know your folks."
One of those folks is Ronnie Bilbo, president of RPS Solutions, a manufacturing company. He has been a Peoples Bank customer since it opened in 1999.
"The main difference is just the people," Bilbo said. "I mean, you can't hardly get out of that bank without having people stop you and shaking your hand, making you feel like you're wanted, and that's pretty unusual to me in these banking times."
Peoples Bank, with total deposits of about $180 million, is not tightening credit standards, but "we're going to be picky about who we loan to. But we always have been," McKee said.
Bilbo can attest to that. Despite his status as a large and established customer, the bank takes a hard look at his books every time he seeks a loan: "Definitely not a free pass," he said.
"But at the same time, you know, it's probably the best thing for our business because we've got somebody pushing us to do the right thing and stay on top of things."
On the other hand, once when Bilbo ran into a cash-flow problem, McKee and Allen came to his office to work out a plan, he said.
"They basically treated us like a partner and said, 'We're going to work through this deal,' and we were able to do it, I'm thankful to say. ...
"And you could tell that they were concerned, not just because we were a customer, but I think they cared about us as a business and our families and everything else."
Banks that work closely with their customers always have an advantage, McKee said.
"The community bank is the backbone of banking right now. I think you're going to see a lot of us stay around where the other boys won't."
Stocks down for day, up for week
NEW YORK (CNNMoney.com) -- Stocks ended a choppy session lower Friday - at the end of a turbulent week - as ongoing recession fears vied with Google's earnings and bullish comments from Warren Buffett.
Treasury prices advanced, lowering the corresponding yields, and the dollar gained versus other major currencies. The credit market showed some signs of loosening, as several key lending rates declined.
The Dow Jones industrial average (INDU) fell 127 points, or 1.4%. The Dow fell as much as 261 points in the morning and rose as much as 301 points in the afternoon.
The Standard & Poor's 500 (SPX) index lost 0.6% and the Nasdaq composite (COMP) lost 0.4%.
Stocks seesawed Friday as a report showing housing starts fell to a 17-year low was countered by Google's earnings and bullish comments from influential investor Warren Buffett.
Markets were also impacted by the monthly options expiration, which can cause increased volatility in the underlying equities.
Despite the extremely volatile week, stocks managed to end with gains for the five-session period, which included the Dow's biggest one-day point gain ever on Monday and the second-biggest point loss ever on Wednesday. For the week, the Dow and S&P 500 both added 4.7% and the Nasdaq added 3.6%.
The advance this week added $500 billion in market value, according to gains in the Dow Jones Wilshire 5000, the broadest measure of the stock market.
Overall, the tone of the market seems to be better this week, compared to last week, with perhaps the exception of Wednesday's big slump, said Ron Kiddoo, chief investment officer at Cozad Asset Management.
"I think we've been helped by the government not coming out with a new program every day and by people starting to accept that the credit market will improve over time," Kiddoo said.
However, the volatility isn't likely to disappear anytime soon, he said.
Looking for a bottom: Friday's session caps off an especially volatile week on Wall Street, which started with the Dow's 936-point rally on Monday - its best day ever on a point basis and best on a percentage basis since 1933. That rally was in anticipation of Tuesday's announcement that the government will inject $250 billion directly into banks.
But the announcement sparked a sell-the-news response, with equities slipping modestly Tuesday. On Wednesday, recession talk sent the Dow down 733 points. On Thursday, the Dow rallied 401 points late in the session after slumping in the morning. And Friday's market saw a 127-point Dow loss.
Although stomach churning for investors, this week was at least better than last week - Wall Street's worst ever - as the Dow capped an eight-session selloff that cut 2,400 points and 22% off the blue-chip indicator.
On the upside, many market pros are cautiously optimistic that last week's lows for the three major gauges represent a bottom for the current bear market. In this week's tilt-a-whirl, the major gauges got close to those lows, but managed to bounce back - another indication that a bottom may have been set.
"There's no doubt the selling activity was a bottom, the question going forward is whether it was the bottom," said Jim Dunigan, chief investment officer at PNC Wealth Management.
Home construction tumbles: Housing starts fell to a 17-year low in September, according to a government report released Friday before the market opened. Starts fell to a seasonally adjusted 817,000 in the month from 872,000 the previous month. Economists were expecting a smaller decline.
Applications for building permits, considered a good indicator of future activity, fell to a seasonally adjusted rate of 786,000 in September, down from a revised 857,000 in August. Economists were expecting a smaller decline. (Full story)
Another economic report, the University of Michigan's consumer sentiment index, fell to 57.5 in October from 70.3 at the end of September, the biggest month-over-month slide in the history of the report. Economists surveyed by Briefing.com thought it would slide to 65.
Company news: Google (GOOG, Fortune 500) reported higher-than-expected third-quarter earnings Thursday night, on revenue that was in line with forecasts. The search engine's shares rose 5.5% Friday. (Full story)
Also late Thursday, Advanced Micro Devices (AMD, Fortune 500) reported a narrower quarterly loss, while IBM (IBM, Fortune 500) reported higher profit that beat estimates, after pre-announcing the results last week. AMD shares rose 2% while IBM shares ended a bit lower.
In financial services news, AIG (AIG, Fortune 500) said late Thursday that it has tapped another $12 billion in emergency government funding, bringing its total to $82.9 billion as it struggles to stay afloat. AIG fell 13.6%. (Full story)
Other financial sector decliners included Bank of America (BAC, Fortune 500), Citigroup (C, Fortune 500) and Wachovia (WB, Fortune 500) and Wells Fargo (WFC, Fortune 500).
Dow stock Merck (MRK, Fortune 500) rose after UBS upgraded it to "neutral" from "buy," Briefing.com reported.
Market breadth was mixed. On the New York Stock Exchange, winners beat losers by nine to seven as 1.74 billion shares changed hands. On the Nasdaq, decliners topped advancers four to three on volume of 2.77 billion shares.
Bush and Buffett: President Bush, speaking early Friday, reiterated the steps that the government has taken to try to stabilize roiling financial markets. (Full story)
While investors have welcomed many of the steps to get money flowing again, stocks have remained volatile and mostly negative. Year-to-date, the Dow, S&P and Nasdaq are all down at least 30%.
On Friday, Berkshire Hathaway (BRK.A) head honcho Warren Buffett said in a New York Times commentary that he is moving to stocks from Treasurys in his personal portfolio.
The influential investor said business activity will continue to dwindle as the economy struggles. But the fear surrounding the economic slowdown and the credit crisis has left stocks with attractive valuations. (Full story)
Credit market: Lending rates have improved this week, as the government initiatives have started to have an impact. (Full story)
Libor, the overnight bank-to-bank lending rate, fell to 1.67% from 1.94% late Thursday, according to Bloomberg.com, a more than four-year low. But longer-term rates have fallen more slowly. The three-month Libor, what banks charge each other to borrow for three months, fell to 4.42% from 4.50% Thursday.
Another indicator, the Libor-OIS spread, a measure of cash scarcity, fell to 3.31% from 3.39% Thursday.
The TED spread, which is the difference between what banks pay to borrow from each other for three months and what the Treasury pays, narrowed to 3.63% from 4.11% late Thursday. The spread hit a record 4.65% last week. The wider the spread, the more reluctant banks are to lend to each other.
Credit froze up in the wake of the housing market collapse, the subsequent subprime lending fallout and contraction in the bank sector. The lack of available credit has punished the already weak economy, making it difficult for businesses to function on a daily basis and for consumers to get loans.
The Federal Reserve has made potentially trillions of dollars available to banks. Earlier this week, the U.S. government said it would invest at least $250 billion in the nation's banks as part of the $750 billion bank bailout plan.
Treasury prices rose, lowering the yield on the 10-year note at 3.97%. Treasury prices and yields move in opposite directions.
The yield on the 3-month Treasury bill, seen as the safest place to put money in the short term, rose 0.80% from 0.48% late Tuesday, suggesting investors are still willing to take a meager return on their money rather than risk the stock market.
However, it was an improvement from last month, when the yield on the 3-month bill skidded to a 68-year low around 0%.
Other markets: U.S. light crude oil for November delivery rose $2 to settle at $71.85 a barrel on the New York Mercantile Exchange after ending the previous session at a 13-month low.
Bets that demand is slowing have sent oil prices lower since crude hit an all-time high of $147.27 a barrel on July 11. So far, instead of providing relief to investors, the decline has been seen as another indication of the global economic slowdown.
Gasoline prices fell another 4.4 cents overnight, to a national average of $3.04 a gallon, according to a survey of credit card activity by motorist group AAA. It was the 30th consecutive day that prices have decreased - in the past month alone, they're down more than 81 cents a gallon.
COMEX gold for December delivery slumped $16.80 to settle at $787.70 an ounce. A variety of other metals declined as well.
LAS VEGAS, Nevada : Latest Updates
Police said they are looking for the grandfather of a boy who was snatched from his Las Vegas, Nevada, home Wednesday by men posing as police officers.
Clemens F. Tinnemeyer, 51, is being sought for questioning in the case of 6-year-old Cole Puffinburger.
Police Capt. Vincent Cannito said Tinnemeyer has been involved in "significant drug dealing" worth millions of dollars.
Tinnemeyer owns a sightseeing motor home service and works as a driver, police said in a written statement.
He was last seen in Las Vegas on May 21, 2008. At the time, he was driving a white Dodge extended-cab pickup with Mississippi license plates KA6251.
He last contacted his family in August and was reported missing in September.
Authorities said Thursday that the case is related to "illegal narcotics activity" and that the family was targeted; Cannito said Friday that Cole was kidnapped by drug dealers attempting to recover lost money and property.
"These are extremely dangerous people," Cannito said. "This is as bad as it gets."
At least two of the three suspects posed as police officers to enter Cole's home about 7:25 a.m. Wednesday, police said. They tied up the boy's mother and her fiancé and ransacked the house before kidnapping the boy when no money was found, they said.
Thursday, September 18, 2008
What should investors do now? - Suggestions
As the investment ground breaks into a financial earthquake around us, the one question retail investors are asking is: what should I do now? Should I sell and run or is this an opportunity to buy? The short answer: long term investors need not panic, short term investors need not buy. With a bankruptcy (Lehman Brothers), a takeover (Merrill Lynch) and an unfolding (AIG) at the global level sending stocks across the world crashing, could it be different for India? "There is no uncertainty regarding Lehman and Merrill Lynch now," said Sudip Bandyopadhyay, chief executive officer, Reliance Money.
"But if uncertainty around AIG is not resolved then there might be more problems in the short term." Rajiv Anand, chief investment officer, IDFC Mutual Fund echoes this short term sentiment.
"Markets are going to be difficult for sometime as we see large entities in America unfolding, which in-turn will induce investors to get more risk averse." With this sort of 800-plus point intra-day volatility becoming a once-a-month phenomenon, the short term risk around equities has multiplied.
And so have opportunities for those willing and able to hold on to investments for two years or more. "There are a number of blue chip companies that are currently available at their book values or break up value and thus it calls for a good entry for the long term," said Bandyopadhyay.
At a market valuation level, the Sensex is currently trading at a price to earnings multiple of 16.8 and a whole lot of stocks are available at low valuations. This is close to its June 2006 level.
The strategy for investors should be to enter with caution and focus on blue chip stocks with large market capitalisations. "Investors should look to enter quality stocks in a disciplined manner with an investment horizon of at least two to three years," said Anand.
"With that horizon, one can expect good returns." Investors might get tempted to enter smaller stocks.
"But at a time when big blue chip companies are available at attractive valuation there is no point picking up mid caps," said Hitesh Agarwal, head of research, Angel Broking.
Tips On How To Select A Gift For A Girl
One of the most daunting tasks for males is when they have to select a gift for a girl. Sometimes, there are so many options that the person is spoilt for choice as to the what type of gift they can select. This article explores several ways on how you find the best way to select an ideal gift for your girl friend or a female friend.
One of the best ways to select a gift for your girl is to seek the advise of your female friends. This is usually the most common and most popular method that many people use. Often the advise of other female friends can help you make a good informed decision. Moreover, it is always best to have a female perspective when buying a gift for a female. For example, when buying something to do with jewellery it is always best to seek the advise of a female who can recommend best fashion items.
Another way to select a best gift is to use the Internet and look for review websites. For example, if you are aware of a certain perfume that you wish to buy for someone then you can do a bit of research on the perfume and see what other people are saying about the product. If it is worth buying you can buy it but if you feel there are a lot of negative perceptions on the product then you can reconsider your decision.
Finally, the best way to select a gift for a female friend is to talk to her yourself. Pick up small hints. Ask her what's her favourite brand and what she likes to wear to special occasions. This can greatly reduce the risk of her not liking your gift if you can seek her own opinion.
For an excellent detailed guide on how you can impress a girl go to
Tips On How To Get A Girl give you her number in just 10 minutes
Many guys who want to get to know a girl often find it hard to get her cell phone number if they lack confidence. There are in fact several ways that you can use to have a girl give you her number in just 10 minutes. This article will explore three 3 different ways of having a girl give you her number in a short space of time without you having to beg.
One of the best ways of having a girl give you her number is make an excuse up. For example, you can say something like I” am going to be going away soon and would love to catch up with you again, is it alright if I can give you a call”? This is inviting the girl to say yes because it is a closed question and most likely she would say yes if you use the correct tone of voice and language. Make sure you are smiling and give her eye contact. Avoid looking away as girls can sometimes feel insecure about things like this.
Secondly, one of the best ways to get a girls number is to just directly ask her if you can have her number. Many girls would question you or might hesitate so this is where you have to play it cool and act as though she will not able to speak to you if she does not give her number. Make it out as though you are really busy with work and you are going to make time for her. Girls like a guy who plays “hard to get”.
And finally, the best way to get a girls number is to ask her to “miss call you” as you want to show her your latest ringtone song that you like. This will bring a bit of humor to this but it would not be a problem provided you get her trust.
For an excellent guide on how to get a girls number and how to win her heart go to
First Tips To Talk To A Girl On The Phone
One of the main fears many guys have is how to talk to a girl on the phone without being nervous. There are several ways to do this without being nervous and generally if you follow these tips correctly you will not have any trouble when talking to any female or girl on the phone. This article explores several tips you can use when talking to a girl on the phone.
If you are going to talk to a girl for the first time make sure you are confident. The introduction part is always important so make sure you either introduce yourself again if you have not done so or ask her how she is. If you ask a girl how she is it makes her feel much confident and gives her an opportunity to answer your question without hesitating. Once you have introduced yourself and asked her basic questions you should consider asking her what she does and whether she enjoys what she is doing. Always be sympathetic towards her. For example, if she says something like “I'm really tired and stressed because of work” make sure you can offer her some form of support by saying “Don't worry, I hope everything works out”.
Another way to talk to a girl on the phone is to make her laugh. Girls love a guy who makes them laugh. This is because it makes them feel comfortable and gives them a chance to feel comfortable in talking to you. If you have had a bad tiring day then usually the girl can pick this up and she get the impression she is “boring you”. So make sure you feel confident and your attention span is 100% focused on her. Moreover, if you give her attention she is most likely to return the favour.
Finally, the best way to talk to a girl on the phone is to ask her lots of open questions. For example, asking her questions such as “what are your plans for the weekend” or “are you seeing someone right now?” will help the conversation flow smoothly. Make sure you answer her questions truthfully and avoid lying to her as girls can easily pick this up.
For an excellent guide on how to talk to girls you can go to
Wednesday, September 17, 2008
Two IIM-C Lehman Brothers
Two IIM-C students of the Class of 2009, who had interned with Lehman Brothers in summer, got their pre-placement offers just 15-20 days ago. "We interned at the London office. Work was as usual... no one had any idea that trade was declining," said one of the interns.
Investment bankers including Merrill Lynch and the now-collapsed Lehman Brothers have been big recruiters on the IIM-C campus. For example, last year, 34% of a batch of 291 got jobs in the investment banking and financial services sector.
Even for summer placements, last year, firms such as Merrill Lynch hired 18 students, Morgan Stanley (11), JP Morgan Chase (13) and HSBC Global Investment Banking Division (6). "Both Merrill Lynch and Lehman Brothers are two big players as far as placements are concerned," admitted IIM-C chief administrative officer Dinesh Varma. "They are good paymasters too. Probably, this year we will miss them. There's bound to be some impact but nothing that we cannot overcome," he added.
For the interns, there has been no official communication yet, but they know they will have to put in their names for the permanent placement programme in March next year. "We put in 12-13 hours a day at the London office and worked on hot sectors like commodities and equity sales. Everyone there was very interested in India," the intern recalled.
Last year, salaries for international jobs crossed the Rs 1 crore mark and the highest domestic salary, including bonuses, was in the range of Rs 65-70 lakh per annum, offered by a leading international investment bank. "There were a total of 32 offers made to students by Slot Zero Investment banks," said Rahul Ajmani, placement coordinator at IIM-C. Some of the top notch firms which hired students from the batch of 2008 include Goldman Sachs, Merrill Lynch, Morgan Stanley, Barclays Capital, Lehman Brothers, UBS, JP Morgan Chase and ING amongst others.
-By Sudipta Datta
Nikkei increases 2.1% on relief over Fed's AIG Rescue
TOKYO: The Nikkei share average rose 2.1 percent on Wednesday, rebounding from a steep fall the previous day as investors took heart from the news that troubled U.S. insurer American International Group would avoid the same fate as Lehman Brothers.
Financial shares such as top lender Mitsubishi UFJ Financial Group rose on easing concern about AIG. The U.S. Federal Reserve said it would provide an $85 billion bridge loan to AIG and take nearly 80 percent in the company in a dramatic about-face as victims of the financial crisis kept piling up.
The benchmark Nikkei average ended the morning up 241.06 points at 11,850.78. The broader Topix gained 1.3 percent to 1,131.97.
Rising dollar likely to make your cell dearer
NEW DELHI: If you are planning to buy a new mobile phone, brace up to pay more. A 15% rise in the dollar against the rupee has hit cellphone makers badly.
All major cellphone makers are evaluating a 7-10% price increase if the dollar appreciates further. About 100-million cellphones are likely to be sold this year compared to about 70 million last year.
The rupee hit a two-year low at Rs 46.60 against the dollar on Tuesday, forcing cellphone makers into meetings. “We are evaluating the situation. The appreciation in the dollar against the rupee has made all the components costly.
The industry will have to take a decision on price revision upwards it if it goes towards Rs 50 against the dollar,” says Samsung Mobile country head Sunil Dutt.
A price increase may hurt the sales of top-end models most as handset makers may not increase prices of low-end models too much, the latter being a price-sensitive market. Laptop vendors, on the other hand, may not follow up with a price hike as they revised prices upwards by 10-13% in May this year, owing to dollar appreciation.
Cellphone business, however, works on thin margins and companies are waiting for each other to take the first step.
Monday, September 15, 2008
Rupee Hits 2-year Lows as Stocks Fall Weighs
MUMBAI: The rupee fell past 46 per dollar for the first time in two years on Monday, knocked down by losses in stocks on worries about global financial sector problems and heavy dollar demand from importers. Dealers said the central bank was seen intervening in the market, selling dollars through state-run banks to halt the rupee's sharp fall, but it did not provide much respite as the quantum of intervention was not too large.
The partially convertible rupee ended at 46.05/06 per dollar, off a low of 46.08, its weakest since Sept. 20, 2006. It was 0.65 percent weaker than Friday's close of 45.75/76. "The rupee fell tracking the share market. But there is a general bearishness among market participants as there are no dollar inflows at the moment and they cannot see, when and how that will improve," a senior dealer with a private bank said. One-month offshore non-deliverable forward contracts were quoting at 46.32/42, 0.6 percent weaker than the onshore spot rate, indicating a bearish near-term outlook.
Indian shares fell 3.35 percent on Monday to their lowest close in two months as jittery investors braced for more foreign withdrawals after Lehman Brothers filed for bankruptcy protection.
Foreign funds have sold a net $8.2 billion of shares this year, removing a crucial support for the rupee, which has fallen 14.4 percent against the dollar this year. Last year record net foreign inflows of $17.4 billion into stocks had helped the rupee rise more than 12 percent.
Analysts expect the rupee to remain under pressure as capital inflows have reduced substantially, and higher dollar demand from oil companies and importers is also weighing. Oil, India's biggest import fell to seven-month lows below $95 per barrel on Monday, more than $50 below July's record high. Lower oil prices are attracting refiners, who are seeking dollars to pay for their shipments, dealers said.
Gold Seen Higher as Financial Turmoil Rages
MUMBAI: Gold prices are likely to rise this week as nervousness in the US financial markets after Lehman Brothers' filing for bankruptcy is likely to spark more safe-haven buying in the yellow metal, analysts said.
Analysts said the commodity, which last week touched a 11-month low, may remain firm despite softer crude oil as the magnitude of the economic worries outweighed oil.
"Bargain hunting, financial market turmoil and the dollar's weakness will support gold," said T Gnanasekar, director of Commtrendz Research. "There are clear indications that the crisis is here to stay for long."
Gold generally moves in tandem with crude oil as the latter signals inflation, while the metal negates it. But the metal has an inverse relation with the dollar as the two compete for funds.
The dollar was down 2.6 per cent against the yen - the biggest one day percentage fall since early 2002. The US Federal Open Market Committee's statement in its interest rate setting meeting on Tuesday would be watched for gold's next direction though a cut is not expected, analysts said.
"Fed's decision and the statements thereafter would be the key to the immediate trend in bullion," said Pradeep Unni, senior research analyst at Richcomm Global Services DMCC.
US Financial Worries Weigh on Equities
MUMBAI: Investor sentiment was marred Monday on worries about the health of the US financial sector after Lehman Brothers became the latest casualty to the mortgage crisis fallout, Merrill agreed to be taken over by Bank of America for $50 billion and troubled insurer American International Group asked the Fed for a lifeline.
With Lehman and Merrill Lynch out of the picture, three of the top five US investment banks have effectively departed the scene in less than six months. Bear Stearns was acquired in a fire sale by JPMorgan in March.
"We are witnessing a turning point in the modern history of the financial system, as three major brokers have now disappeared from the scene. The coming days and weeks will be crucial to the global economic outlook," said Anita Gandhi, head-institutional business at Arihant Capital.
Stock markets in Australia, Singapore and Taiwan fell by around 2 to 4 percent, with shares of many banks suffering bigger losses. Holidays in most major Asian markets, including Tokyo and Hong Kong, kept volumes thin.
The gloom across global markets took its toll on Indian bourses as well, which plunged over 6 per cent intra-day as investors braced for more FII outflows. However, the market recovered lost ground towards the fag end of the session on the back of short covering in battered index heavyweights.
Bombay Stock Exchange's Sensex settled at 13,531.27, down 469.54 points or 3.35 per cent, recovering from the day's low of 13,150.81. The index opened at 13,666.28.
National Stock Exchange's Nifty ended 3.68 per cent or 155.55 points at 4072.90. The index fell to a low of 3955.40 earlier in the day.
"The mood is pessimistic than ever before; even insurance companies that generally come to support the market at times of distress, are not on the buy side. Lehman's exposure in heavyweights like DLF and Unitech sent the BSE Realty Index on a downward spiral," Gandhi added.
The selling spree sent the BSE Midcap and Smallcap indices down 4.49 per cent and 4.93 per cent respectively.
After remaining in the negative terrain for most of the day, Maruti Suzuki (2.8%), HDFC (1.16%), and ACC (0.61%) managed to eke out decent gains.
Reliance Infrastructure (-9.72%), Satyam Computer (-9.45%), Ranbaxy Laboratories (-7.6%), DLF (-7.54%) and ONGC (-6 .01%) were under pressure.
While the fate of the US financial system loomed in investors' minds around the world, initial reports that Hurricane Ike had not severely damaged infrastructure in Texas knocked benchmark oil prices below $100 a barrel. Oil tumbled 6 per cent to $94.83 although traders were cautious as they awaited status reports on more Texas refineries.
The financial turmoil halted US dollar's rise against other currencies, however, there was no respite for the Indian rupee. The Indian currency was down 46.04/05, down 32 paise against the US dollar.
Financial Woes Rattle - Investor Confidence Call Buying at 4000 Holds Nifty
MUMBAI: Markets tumbled to their lowest levels in two months after Lehman .Brothers filed for bankruptcy. However, markets came off from day's low as value buying emerged at lower levels.
National Stock Exchange's 50-share Nifty closed the day 3.68 per cent lower at 4072. Nifty recovered nearby 100 points from the lows of 3955, thanks to call buying and put writing at 4000 level. The futures provisionally ended at a premium of 21 points.
The September futures price declined 3.6 per cent while open interest added 18 lakh shares. Cost of carry was positive. Given the order book positions, players have squared off shorts and have gone long at lower levels.
Significant amount of call buying was observed from 4000 to 4500 levels. On the other hand, put writing was observed at 4000, 3900 and 3800 levels. However, put buying was seen at 4200 levels. Hence, until Nifty recovers and stays above 4200, bears have an open ground to hammer markets.
All sectoral indices were trailing in the negative. Realty, IT, metal and power were the worst hit.
In stock futures, Reliance Infrastructure plunged 9.13 per cent while open interest added 5.3 lakh shares. Satyam Computers plummeted 9.2 per cent, Ranbaxy fell 5.11 per cent and open interest shed 3.57 lakh shares.
Unitech dropped 7.41 per cent and Tata Communications fell 7.09 per cent. Reliance Capital nose-dived 10.18 per cent, DLF declined 7.19 per cent and Renuka Sugar slumped 7 per cent.
Reliance Industries fell 2.21 per cent, Larsen & Toubro skid 3.92 per cent and Tata Steel slid 4.7 per cent. Reliance Natural plunged 6.93 per cent, BHEL shed 4.11 per cent and Reliance Petro reduced 4.9 per cent.
Stocks in Europe and Asia tumbled Monday and futures on Wall Street and the dollar slid as the collapse of Lehman Brothers and the takeover of Merrill Lynch battered investor confidence.
Gold Spurts - Rs.195/Ten Gram on Higher Global Cues
MUMBAI: Gold prices spurted by Rs 195 per ten grams to end at Rs 11,610 on the bullion market here today on fresh demand from stockists in view of festival season on the back of positive global cues and a weak trend in equity market.
Gold prices climbed more than two per cent in London after Lehman Brothers filed for bankruptcy protection, which spurred buying of gold as a safe haven from risk and knocking the dollar to a two-month low against the Yen.
However, the precious metals retreated from highs as oil prices slipped and selling of gold held by exchange-traded funds dented investor confidence.
Spot gold was quoted at USD 772.90/774.10 an ounce, up by USD 9.45 from Friday's nominal close in New York, but off session high of USD 784.90.
Gold and silver prices in Singapore jumped more than two per cent, with bullion gaining for a second day as Lehman Brothers' bankruptcy and anxiety over the stability of US financial markets spurred a rush toward safety.
Gold rose two per cent or USD 14.85 an ounce to USD 778.30 from Friday's close in New York.
Weak equity market also boosted gold prices, as some of the investors shifted their funds in gold as a safe-haven investment, a dealer said.
In the domestic market, standard gold (99.5 purity) rose by Rs 195 per ten grams to end at Rs 11,610 from Rs 11,415 and pure gold (99.9 purity) also shot up to Rs 11,680 from Rs 11,480.
However, silver ready (.999 fineness) dropped by Rs 75 per kilo to Rs 19,045 from Rs 19,120.
Birla Sun Life - Launches Commodity-Focussed Fund
MUMBAI: Birla Sun Life Asset Management Company (BSLAMC) has decided to tap investors with its maiden commodity-centric fund, Birla Sun Life Commodity Equities Fund (BSLCEF), from September 15, a top company official said.
"The investment objective of BSLAMC's open-ended commodity equities fund is to offer investors long-term capital growth by investing in securities of domestic and overseas commodity companies, i.e. companies engaged in or focussing on the specified commodity business and overseas mutual fund schemes that have similar investment objectives," BSLAMC CEO Anil Kumar told reporters here today.
"We see commodities as essential and not an alternate investment class. Given that supply-side constraints and explosive demand are creating upward pressure on commodity prices, global commodity companies and commodity-focussed mutual funds are currently generating above par returns. We felt this is an opportune time to launch the BSLCEF to offer investors an avenue to diversify their portfolio," Kumar said.
Investors can enjoy the benefits of diversification by investing in Global Precious Metals Plan (benchmarked against Dow Jones Precious Metals Index), Global Agri Plan (benchmarked against S&P Global Agribusiness Index), and Global Multi Commodity Plan (benchmarked against MSCI World Index), he said.
India to import 300 tonnes silver in Sept
NEW DELHI: India will import around 300 tonnes of silver in September by ocean freight to meet heavy demand after a drop in prices, after buying just 56 tonnes in the seven months to July-end, a trade body said on Monday.
"By the month-end we are getting some 15 containers of silver, which is equal to 300 tonnes. After that, demand will probably slow down a bit," Suresh Hundia, president of the Bombay Bullion Association, said.
Silver demand has surged on lower prices and as Indians prepare to mark a series of religious festivals.
International silver prices were at $10.93 an ounce on Monday, down from about $19.45 on July 13, due to a fall in crude prices and dollar volatility.
Multi-Purpose Pipeline Project
DUBAI: India has expressed keen interest in the over USD 11 billion Med Stream project, a multi-purpose offshore pipeline venture which can transport crude oil at cheaper rates to the country from Turkey.
Officials from India, Turkey and Israel met for the first time on Saturday in the Turkish capital Ankara discussing technical issues of the Med Stream pipeline project.
Indian state oil company IOC's Director B M Bansal, Undersecretary of Turkish Energy Ministry Selahattin Cimen and Director General of the Israeli Ministry of National Infrastructure Hezi Kugler had attended the meeting, Kuwait's news agency KUNA reported.
The project to connect Turkey and Israel via the Mediterranean Sea is planned to transport oil, natural gas, water, electricity and fiber optic cables.
Kugler, speaking to reporters after the meeting, said the project aimed at building a multi-purpose undersea pipeline linking, in its first phase, Turkey with Israel to transfer oil, natural gas, fresh water, electricity cables and fibre optics cables.
The Indian side, he said, showed interest in this project specially with regards to the imports of crude oil instead of shipping it by tankers.
Initial studies estimated the cost at eight billion euros, said Kugler. Technical studies should begin by end of this year and establishment of the pipeline might begin by the end of next year or in 2010.
Israel believes this project was an economic and strategic option," which would secure 90 per cent of the Jewish state's crude oil needs, as well as reduce the cost of shipping by oil tankers, he said.
Rupee Ends at 45.95/96
The rupee ended at 45.95/96 per dollar, from the previous close of 45.75/76, as losses in the local share market and dollar demand from importers weighed.
Read more!Sunday, September 14, 2008
6th Pay Commission: Government clears doubt on tax on pay arrears
NEW DELHI: The lack of clarity over taxation of arrears that government employees will receive following the implementation of the 6th Pay Commission recommendations has finally cleared. The tax on first installment will be deducted in the current fiscal and that on the second installment will be deducted next year when they receive the actual payment.
Confusion had arisen about the tax treatment of the pay arrears that central government employees are about to get as part of their latest wage revision. According to finance ministry sources, only the first installment of the arrears would be taxed this fiscal. The taxation, they would be akin to the tax treatment in 1997 when the fifth pay commission recommendation was implemented wherein the tax was deducted at the time of payment.
If the tax is deducted, employees who do not fall in the slab of 30% rate of income tax, would have to bear a surcharge, as their total income, including both installments would have been higher. As per the current income tax slab, income over Rs 2,50,000 attracts a tax rate of 30% and income above Rs 10,00,000 attracts a rate of 30% as also 10% surcharge.
The government had last month announced an average increase of 21% in the wages of its employees. It had decided to pay 40% arrears of their increased salaries this year and the rest next year to reduce the burden on the exchequer.
Thursday, September 11, 2008
HDFC MF plans to launch real estate mutual fund soon
MUMBAI: HDFC Mutual Fund is planning to launch a real estate mutual fund soon, a top company official said.
"We plan to launch our real estate mutual fund within the next few months," HDFC Mutual Fund's Managing Director Milind Barwe told reporters on the sidelines of a real estate conference here on Wednesday.
Realty MFs would be different from the conventional schemes and the money collected would be invested in real estate projects and mortgage-backed securities. Valuation of the assets held by the fund would be done by a third-party valuer.
Home Loan Rates may have peaked: Parekh
MUMBAI : Home loan rates may have peaked, according to Deepak Parekh, chairman, HDFC, the largest housing finance company in the country. Interest rates are linked to inflation and there have been signs that inflation is moderating, said Mr Parekh.
“Interest rates are linked to inflation. If inflation is controlled, interest rates can also be contained. In the past two weeks, we have seen from the data coming out that inflation has marginally tapered off. If the trend continues, it would mean that the peak has come already.
I think, with oil and commodity prices tapering off and food prices stagnating, we have peaked already,” said Mr Parekh. However, he added that there were some who believed that there would be one more round of interest-rate hikes.
Delivering the keynote address at the Ficci summit on real estate on Wednesday, Mr Parekh said that slowdown in the real estate market — a long overdue adjustment — was needed, and this, to some extent, has already happened. He pointed out that the real estate industry was still not out of the woods. “I do foresee some more pain in the real estate market in India,” said Mr Parekh.
Mr Parekh also had a suggestion to industry for avoiding situations like the one witnessed in Singur. According to Mr Parekh, the main problem in such cases is that land acquisition is done at fair value, but subsequently when project plans are announced, the value of that land escalates and then the original sellers feel cheated or disgruntled with their compensation.
“It is difficult to find outright solutions, but experience shows that the need of the hour is transparency in such land dealings, clearer land titles and making those losing their land stakeholders in the project.
Offering them equity in the project will give them long-term economic benefits, rather than leaving them with the fear of being displaced and then subsequently becoming the grist for someone else’s battle,” said Mr Parekh.
The doyen of the country’s housing finance industry was also critical of the move to extend higher floor-space index (FSI) for redevelopment projects in South Mumbai. Last week, the Supreme Court allowed the Maharashtra government to demolish pre-1940 buildings and replace them with new towers.
The state government has been allowed to grant builders increased development rights as an incentive for redevelopment. According to Mr Parekh, higher FSI will result in building within five feet of one another. “Where is the open space? Where is the water? and how will the sewage system work?” said Mr Parekh.
He pointed out that some of the old structures had hundreds of dwelling units. And for rehousing, there was not enough space for redevelopment after everyone is rehoused.
Nokia, Ericsson, 4 others bid for $9 B BSNL tender
NEW DELHI: In what is the world’s largest telecom equipment tender, six international telecom network majors—Ericsson, Nokia Siemens, Alcatel-Lucent, Huawei, ZTE and Nortel Networks—have submitted bids to provide 93 mn GSM lines to state-owned telco BSNL.
“Only Motorola is not there, all other major vendors in the world are there,” BSNL CMD Kuldeep Goyal told the media after the bids were submitted.
When asked if Motorola’s disqualification from BSNL’s previous tender on technical grounds was the reason behind its decision not to bid, a BSNL official said, “we continue to have cordial relations with Motorola, although their actions (of delaying the earlier tender by going to courts) have hurt us (BSNL) a lot”.
When asked if the contract would be awarded at less than $100 per line, Mr Goyal said: “Yes, that’s what we think.”
Last year, BSNL had awarded a contract for 13 mn lines to Ericsson for about $91 a line. Mr Goyal did not comment when asked if the present contract for 93 mn lines would be awarded at a lower price. At $90 per line, the deal works out to about $8.4 bn.
BSNL executives however refused to divulge the prices quoted by the different vendors. BSNL Director, Finance, S D Saxena, said it is very difficult to put the value to the deal at this stage as the PSU had not yet opened the financial bids.
Mr Goyal said BSNL would take several days to evaluate the bids on technical parameters. “Only those companies whose bids pass the technical evaluation will be considered in the next round where their prices will be compared,” he said.
About 10 stand-alone tower firms have also submitted bids for setting up towers. BSNL will now evaluate the cost benefit ratio of splitting the contract amongst international network majors and independent tower companies.
The independent tower firms include Esstel, GTL, Tecmet, KEC International, Nextra, Teracom, TVS, Acme Telepower, Esstel, Aster and Susana Towers, BSNL executives said. The contract also involves IT solutions and the bids for these will be opened on September 30, they added.
BSNL executives also added that the 93 mn lines order would be spread over a three-year period. ‘We hope to place orders for about 33 mn lines for the first phase with the successful bidders by the year-end, or by early next year. We are hopeful that we can take the deliveries by mid-2009,” Mr Goyal said.
The BSNL contract is split into three parts of 25 million each for the North, South and West Zones and 18 mn for the East Zone. The tender conditions also stipulate that one company cannot be awarded more than two zones — this implies that the maximum order than an equipment major can bag is for 50 mn lines. “Two of the six bidders have applied for all the four zones. In each zone, we have at least four bidders,” Mr Goyal said.
Unlike its earlier tenders, BSNL has also allowed those telecom vendors who do not have manufacturing facility in India to participate. This made Chinese network major Huawei which currently has only a research and development facility in Bangalore eligible to bid for the BSNL contract.
Over the last 18 months, BSNL has fallen behind private telcos as its expansion plans have been hampered by massive capacity crunch
Sensex loses 238 pts on rupee jolt, Lehman loss
MUMBAI: Indian equities continued their slide on Wednesday at a faster rate, as bad news poured in from world markets. European stocks weakened after the European Commission expressed doubts over the region’s economic growth and a possibility of further doom in the banking sector. Leading US investment bank Lehman Brothers Holdings reported a third quarter net loss of $3.9 billion — the biggest in its 158-year history. It now plans to sell a majority stake in its asset-management unit, spin off commercial real-estate holdings and cut dividend in an effort to shore up capital.
Back home, the rupee hit a 2-year low, breaching the psychological 45-mark to the dollar in the process, spelling further bad news for the economy as a whole.
Metal and oil & gas stocks were the worst performers, as the 30-share Sensex fell 238.15 points on Wednesday to close at 14,662.61. All the BSE sectoral indices ended in the negative with the metal index plunging over 5%. Analysts opine that the commodity cycle is in a downturn phase and consequently the companies are likely to face a pressure on earnings. The S&P CNX Nifty slipped 68.45 points to close at 4400.25. The BSE mid and small-cap lost over 60 points each to close at 5,708.93 and 6,903.42, respectively.
The slide in the rupee, however, failed to energise IT shares, with the BSE IT index closing marginally below its previous close. Dealers say worsening financial conditions in the US would impact the revenue of IT companies, hurting their growth. “The balance of payments dynamics and US dollar strength will cause the rupee to weaken. We expect the rupee to weaken against the dollar to 46-47 by December 2008, but it will likely pull back to 45 by March 2009,” said Macquarie Research in a note to its clients. “Be prepared for more aggressive intervention by RBI in the forex market. Also, the government is likely to ease restrictions on capital inflows in order to check the pace of the rupee’s depreciation,” the noted added.
On the global front, OPEC in Vienna decided to reduce supplies by 500,000 barrels a day. Consequently, crude oil for October rose as much as $1.56 to $104.82 a barrel on the New York Mercantile Exchange (NYMEX). The last trading price at the exchange was $101.67 a barrel on Wednesday. “Domestic market has factored in the receding oil prices. If they fall below $90 a barrel, there could be a rally in the indices, but it won’t be a sustained one. In the near term, the range would continue to be between 4,400 and 4,700,” said India Infoline head-research Amar Ambani.
Market breadth continued to be weak with retreating stocks outnumbering gainers nearly two for one. Total turnover in markets was close to Rs 70,000 crore, a rise of Rs 10,000 crore over the previous close. However, the improvement in volumes is of little cheer as foreign funds continue to dump stocks. As per provisional data, they net sold Rs 1,037 crore shares on Wednesday. Domestic institutions cushioned the sales to some extent, with net purchases of Rs 492 crore.
Markets across the Asia-Pacific ended on a mixed note. China’s Shanghai Composite index advanced 0.2% and South Korea’s KOSPI Composite index gained 0.7%, while Japan’s Nikkei 225 index ended down 0.4% and Hong Kong’s Hang Seng index lost 2.4%.
Suntory may pick 15% stake in Mallya's United Spirits
BANGALORE: Japanese spirits giant Suntory is believed to be interested in acquiring a 10-15% stake in Vijay Mallya’s United Spirits (USL) for about $600 million. USL is already in preliminary talks with multinational drinks giants Diageo, Pernod Ricard and Bacardi for a stake sale.
A potential sale could value USL, the world’s third largest spirits marketer by volume, at around $6 billion. A top USL source confirmed Suntory’s interest “for a strategic alignment,” adding that details of Suntory’s interest are still being gathered. In November last, ET had first reported on Mr Mallya’s move to offload shares in the flagship spirits company.
“There are several interested players who know it is a one-time chance to get their distribution act right in India. And I will be looking at unlocking maximum shareholder value,” Mr Mallya told ET. The USL stock closed at Rs 1,313 on Wednesday, valuing a 15% stake at around $430 million.
A deal, if it goes through, could be the biggest overseas venture for the 110-year old Suntory, arguably the most storied alcoholic beverage maker in Asia. A deal with USL will give it access to a strong Indian distribution network. USL, which caters to over 55% share of domestic spirits consumption, is expected to kick off a formal process to induct a strategic investor soon.
Mr Mallya is looking at unlocking value from 13.7 million treasury stock — banked in a trust — that came out of the overlapping capital from the merger of group companies. The treasury stock accounts for 14-15% of the company’s share capital, and placing these with a strategic investor will not dilute the promoter stake, which currently stands at 37%.
Diageo and Pernod Ricard are already engaged in discussions with Mr Mallya, but there have been concerns about “the lack of a clear horizon” following the deal. It is believed that potential suitors are awaiting clarity on management rights, if any, which USL is willing to offer.
Further, unlike the other three suitors, Suntory has no presence in the highly regulated Indian spirits market. In 2001, Mr Mallya had inducted Scottish & Newcastle as a strategic investor in his beer business at Rs 575 per share, against the prevailing stock price of Rs 130-140, industry analysts pointed out.
Separately, while talking to media in Bangalore on Wednesday, Mr Mallya said he was indeed in discussions with global majors, confirming an earlier ET report.
Diageo was widely seen as a front-runner to pick up the stake, but it subsequently emerged that USL has received expressions of interest from Pernod Ricard and Bacardi as well. While no investment bank has been mandated for the unfolding strategic divestment, at least three banks are seen vying to take the process formal.
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