World The Economy of Fail - The Latest Financial Crisis News Thread

[The Helper]

Intel to shut sites and cut up to 6,000 jobs

NEW YORK (Reuters) - Intel Corp (INTC.O) said on Wednesday it would close manufacturing plants in Malaysia and the Philippines, as well as its only remaining factory in Silicon Valley, cutting as many as 6,000 jobs.

The announcement comes a day after the world's largest maker of microprocessors used in personal computers slashed prices on a number of its chips and a week after it reported a decline in fourth-quarter revenue.

Intel said it would close two assembly test facilities in Penang, Malaysia, and one in Cavite, Philippines.

It will also halt production at a wafer fabrication facility in Hillsboro, Oregon, as well as its Santa Clara, California plant -- a factory connected to its headquarters and the only one left in Silicon Valley.

More.

 

[The Helper]

Wall Street tumbles on Microsoft report, bank woes

Disappointing results at Microsoft Corp. and increasing concerns about the nation's banks sent Wall Street sharply lower Thursday, extending a new streak of stock volatility into a third day. The Dow Jones industrials fell more than 200 points.

Microsoft surprised investors by reporting its fiscal second-quarter earnings early -- and the news was not good. The software giant posted an 11 percent drop in profits and said it will slash 5,000 jobs over the next 18 months.

The company said deteriorating global economic conditions and lower revenue from PC software forced it to cut back. The company also said it is unable to provide any profit and revenue guidance for the rest of the year due to market volatility.

Uneasiness about the stability of the financial sector continued to plague investors Thursday, and bank stocks took another beating. Quarterly financial reports showing steep profit declines and big loan losses have investors worried that the financial crisis is far from over, and that the government's efforts to prop up banks might not be enough to prevent a major failure.

 

[The Helper]

75% Of Latest Bank Of America Bailout Used To Pay Merrill Lynch Bonuses

Remember the latest Bank of America (BAC) bailout, the one we were all so steamed about last week? (The $20 billion of cash and $100+ billion of trash-asset guarantees that absolutely had to be given or else Bank of America shareholders might have lost everything?)

Yes, well, you probably thought that that cash would be used to bolster the bank's capital or something. (We know you weren't dumb enough to think it might have been used to make loans).

Alas, it wasn't used for that. It was used to pay Merrill Lynch executives the huge bonuses they deserved for unloading their balance sheet on for-some-reason-not-yet-fired Bank of America CEO Ken Lewis.*

 

[The Helper]

GE profit down 44 percent

BOSTON (Reuters) - General Electric Co reported a 44 percent drop in quarterly profit, meeting Wall Street's expectations, as the U.S. conglomerate and economic bellwether closed out one of the toughest years in its 117-year history.

Earnings tumbled 67 percent at GE Capital finance and 86 percent at its lighting and appliance unit, and were also down 6 percent at NBC Universal media. Profit was up at its two infrastructure units, which make electricity-producing turbines and engines.

The world's largest maker of jet engines and electric turbines said on Friday profit came to $3.72 billion, or 35 cents per diluted share, compared with $6.7 billion, or 66 cents per diluted share, a year earlier.

More.

 

[The Helper]

Harley Davidson plans closures as profit tumbles

CHICAGO (Reuters) - Harley-Davidson Inc (HOG.N) said it would close plants and cut 1,100 jobs as a global pullback in consumer spending pushed the motorcycle maker's quarterly earnings down more than Wall Street had expected.

The company also reported an operating loss at its in-house finance unit as a result of continuing dysfunction in the credit markets as well as growing delinquencies among borrowers.

Harley said it was taking several actions to cut costs, including plant closures that would result in the elimination of 1,100 jobs. That would be about 12 percent of Harley's total workforce, according to its most recent annual report.

More.

 

[The Helper]

First Centennial Bank of California Seized by State Regulator

Jan. 24 (Bloomberg) -- First Centennial Bank of Redlands, California, was seized by a state regulator, the third U.S. bank to fail this year, as the recession deepens and the slump in the housing industry sends home foreclosures to records.

First Centennial, with $803.3 million in assets and $676.9 million in deposits, was shut by the California Department of Financial Institutions and the Federal Deposit Insurance Corp. was named receiver. First California Bank, based in Westlake Village, will assume deposits. The failed bank’s 6 offices will open Jan. 26 as branches of First California, the FDIC said.

“Depositors of the failed bank will automatically become depositors of First California,” the FDIC said in an e-mailed statement. “There is no need for customers to change their banking relationship to retain their deposit insurance coverage.”

Regulators closed 25 banks last year, the most since 1993, draining money from the FDIC deposit insurance fund, which had $34.6 billion as of Sept. 30. National Bank of Commerce in Berkeley, Illinois, and Bank of Clark County in Vancouver, Washington, were shuttered by regulators on Jan. 16.

 

[The Helper]

Citigroup Raises $12 Billion in FDIC-Backed Bond Sale

Citigroup Inc. sold $12 billion of notes guaranteed by the Federal Deposit Insurance Corp. as Chief Executive Officer Vikram Pandit tries to bolster capital and save the bank from insolvency.

The sale is the biggest offering of debt backed by the FDIC since banks began using the government’s Temporary Liquidity Guarantee Program on Nov. 25, according to data compiled by Bloomberg. The offering by Citigroup and its Citigroup Funding unit surpasses GE Capital Corp.’s $10 billion sale on Jan. 5.

Dwindling capital and a sinking stock price have already forced Pandit to take $45 billion in cash from the U.S. government and abandon the bank’s decade-old strategy of selling multiple financial services under one roof. Citigroup returned to the FDIC program for the first time since Dec. 4 as $42.2 billion of debt matures this year, Bloomberg data show.

“A lot of it is to refinance existing debt maturities,” said Joe Scott, a banking industry analyst at Fitch Ratings in New York. “It helps them maintain adequate liquidity, and it’s part of maintaining the viability of a very systemically important institution.”



--------------
There is 10 Billion more that the Bankster buddies just got - this time from the FDIC - the bailout that does not get voted on. Mo Money!

 

[The Helper]

More layoffs expected at Starbucks

Another big round of layoffs is expected at Starbucks, possibly 1,000 people — a third of its headquarters employees — and some district managers and field employees, according to an e-mail sent to a stock brokerage's customers Friday.

"The cuts might be next week or in February," wrote Diane Daggatt, a managing director at McAdams Wright Ragen in Seattle.

Starbucks declined to comment on possible layoffs. The Seattle coffee company releases its first-quarter results on Wednesday.

No barista jobs are in jeopardy, Daggatt wrote.

 

[The Helper]

Caterpillar says to cut 20,000 jobs

Caterpillar Inc said on Monday that quarterly earnings fell more than 32 percent and warned of a tough year ahead as the downturn that began in the United States metastasized into a full-blown global recession that hit sales of its earth-moving equipment.

The company also warned that profit in 2009 would be under severe pressure and said that it would cut about 17,000 workers and buy out 2,500 others, to reduce costs in the face of what it predicted would be the weakest year for business since the end of World War Two.

The news sent the company's shares skidding more than 10 percent in premarket trading.

The company reported a fourth-quarter profit of $661 million, or $1.08 a share, compared with $975 million, or $1.50 a share, last year.

 

[The Helper]

Sprint Nextel to eliminate 8,000 jobs

Sprint Nextel Corp. is eliminating about 8,000 positions in the first quarter as it seeks to cut annual costs by $1.2 billion.

The nation's third-largest wireless provider said Monday it will complete the layoffs, which comprise about 14 percent of its 56,000 employees, largely by March 31. About 850 of the reductions are voluntary and the company said it expected a first quarter charge of more than $300 million for severance and other costs.

The company said it is also suspending its 401(k) match for the year, extending a freeze on salary increases and is suspending a tuition reimbursement program.

"Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment," Chief Executive Office Dan Hesse said in a news release. "Our commitment to quality will not change."

 

[The Helper]

Home Depot to cut 7,000 jobs, exit Expo business

Home Depot Inc (HD.N) said it will cut 7,000 jobs, or about 2 percent of its workforce, as it shuts its Expo home design centers business and cuts down on corporate support staff.

The home improvement retailer also said on Monday it is freezing the salaries of all officers as it looks to save money in a prolonged retail slump.

The company said it expects pretax charges of about $532 million from its actions.

The company said it still expects sales to decline 8 percent and earnings per share to fall 24 percent from continuing operations for its fiscal year, excluding one-time charges.

More.

 

[The Helper]

McDonald's posts sizzling 80% profit rise in 2008

US fast-food giant McDonald's said Monday its 2008 net profit soared 80 percent from a year, lifted by growing demand from consumers seeking low-cost meals in a deepening global recession.
Net profit for the full year totaled 4.3 billion dollars, compared with 2.3 billion in 2007, the Oak Brook, Illinois-based company said in a statement.

Excluding exceptional items, earnings per share were 3.76 dollars, widely exceeding consensus market forecasts of 3.63 dollars.

The robust annual results came despite a sharp 23 percent decline in fourth-quarter net profit to 985 million dollars, from 1.273 billion in the 2007 fourth quarter. Fourth-quarter earnings per share were 87 cents, above expectations of 83 cents.

 

[The Helper]

Iceland's government topples amid financial mess

REYKJAVIK, Iceland – Iceland's coalition government collapsed Monday, leaving the island nation in political turmoil amid a financial crisis that has pummeled its economy and required an international bailout.

Prime Minister Geir Haarde said he was unwilling to meet the demands of his coalition partners, the Social Democratic Alliance Party, which insisted upon getting the post of prime minister to keep the coalition intact.

"I really regret that we could not continue with this coalition, I believe that that would have been the best result," Haarde told reporters.

Haarde, who has been prime minister since 2006, said he would officially inform the country's president, Olafur Ragnar Grimsson, that the government had collapsed. Grimsson, largely a figurehead, has asked Haarde's government to remain in place until a new administration is formed.

 

[The Helper]

GM to lay off 2,000 workers, cut production

DETROIT (AP) - General Motors Corp. said Monday it will cut 2,000 jobs at plants in Michigan and Ohio, and it will halt production for several weeks at nine U.S. plants over the next six months due to slow sales.
GM spokesman Chris Lee said the company will eliminate the second shift at its Delta Township plant near Lansing, Mich., on March 30, and the second shift at its Lordstown, Ohio, factory will end April 6.

About 1,200 workers will be laid off at the Michigan plant, while 800 jobs will be cut in Ohio.

Lee said the cuts are part of the Detroit automaker's continuing efforts to "align production with market demand" as consumers shy away from purchasing new cars and trucks during a recession. GM is operating under an assumption shared by many analysts that the auto industry will sell 10.5 million vehicles in the U.S. in 2009, down about 20 percent from last year's sales of 13.2 million.

 

[The Helper]

Pfizer to buy Wyeth for $68B; cut 8,000 jobs

TRENTON, N.J. (AP) - No. 1 drugmaker Pfizer Inc. said Monday it is buying No. 12 Wyeth for $68 billion in a deal that ultimately will wipe out nearly 20,000 jobs but quickly boost Pfizer's revenue and profit and transform it overnight.
New York-based Pfizer will mutate from a maker of blockbuster pills—including the world's top seller, $13 billion-a-year cholesterol fighter Lipitor, which faces generic competition in November 2011—to a one-stop shop for vaccines, biotech drugs, traditional pills and nonprescription products for both people and animals.

Pfizer also said it would cut about 8,000 jobs, 10 percent of its workforce, as part of what it expects will be a staff reduction totaling 15 percent of the combined companies' workers—implying a total job loss of almost 20,000.

The cash-and-stock deal, one of the industry's biggest ever, is expected to close late in the third quarter or in the fourth quarter. It comes as Pfizer's 2007 fourth-quarter profit takes a brutal hit from a $2.3 billion legal settlement over allegations it marketed pain reliever Bextra and possibly other products for indications that had not been approved.

 

[The Helper]

IBM cutting about 2,800 jobs

BOSTON (Reuters) - IBM (IBM.N), the world's biggest technology services company, is cutting about 2,800 jobs in North America, according to documents supplied by a union seeking to represent the company's employees.

International Business Machines Corp spokesman Doug Shelton confirmed on Monday that the company last week informed some employees that their positions were being eliminated. But he declined to say how many were being cut.

IBM's move came as companies in the United States and Europe announced tens of thousands of layoffs on Monday.

The job cuts at IBM were evenly split between its software division and its sales and distribution unit, according to Lee Conrad, national coordinator for the Alliance at IBM. His group is a local chapter of the Communications Workers of America that is seeking to represent IBM's employees.

More.

 

[The Helper]

Fannie to Tap U.S. for as Much as $16 Billion in Aid

Jan. 26 (Bloomberg) -- Fannie Mae, the largest source of home-loan money in the U.S., said it will need to tap as much as $16 billion in emergency funds from the U.S. Treasury Department to stay afloat as deterioration in the housing market persists.

Fannie’s planned request, announced today, follows Freddie Mac, which said Jan. 23 that it will need as much as $35 billion more in federal aid. Unprecedented mortgage losses drove the net worth of both companies below zero last quarter, they said in separate securities filings.

This will be Washington-based Fannie’s first draw on a $200 billion emergency fund set up by Treasury in September to keep the government-sponsored enterprises solvent. Fannie said losses on mortgage loans and a decline in the market value of its assets accounted for the shortfall in the fourth quarter.

Fannie’s Treasury request was “much worse” than expected, said Rajiv Setia, a fixed-income strategist at Barclays Capital in New York. Setia estimates taxpayers will have to shell out at least $50 billion for Fannie and $70 billion for Freddie this year. One or both, especially Freddie, may exceed the Treasury’s backstop this year, he said.

 

[The Helper]

Gold pushes above $900 in buying spree

Strong investor buying on Monday pushed the price of gold above $900 a troy ounce, hitting a 3½-month high in dollar terms and posting all-time highs in euro and sterling, in a stark sign of money seeking refuge from equities and bond markets.

Traders said that investors, particularly in continental Europe and the UK, were pouring money into gold exchange-traded funds – a popular way to gain access to the metal – and also noted strong buying of physical gold, from coins to bars.

Edel Tully at Mitsui & Co Precious Metals in London said gold was the “obvious shelter” for safe-haven investors.

In London, spot gold rose to $915.30 an ounce, up from New York’s last quote on Friday of $898.40. The precious metal also hit an all-time high in both sterling at £661.55 an ounce, and in euros, at €701.55 an ounce.

More.

 

[The Helper]

McDonald's to open 1,000 stores

US fast-food chain McDonald's says it plans to open 1,000 new restaurants this year.

The world's largest hamburger chain also said fourth-quarter net income fell 23% to $985.3m (£710m), from $1.27bn a year before.

Revenue fell to $5.57bn from $5.75bn, even though global same-store sales rose 7.2%, as the firm was hit by the strong dollar.

In the US, the firm raised the price of its Double Cheeseburger in November.

More.

 

[The Helper]

Corning slashes up to 4,900 jobs to cut costs

NEW YORK (Reuters) - Corning Inc posted weaker-than-expected quarterly results and outlook on Tuesday due to a significant decline in demand for glass for televisions and computer monitors, and said it would eliminate up to 4,900 jobs to cut costs.

Corning's shares fell about 7.5 percent after the company, whose glass is used for flat-panel displays and fiber-optic cables, said fourth-quarter net income fell to $249 million, or 16 cents a share, from $768 million, or 49 cents a share, a year earlier.

Excluding special items, profit was 13 cents a share, a 70 percent drop from one year ago. Analysts were looking for profit of 19 cents per share, according to Reuters Estimates.

More.