Citigroup May Post First-Quarter Loss, Whitney Says

 (Bloomberg) -- Citigroup Inc., the biggest U.S. bank by assets, may post its second-straight quarterly loss because of writedowns on home-equity loans and junk-grade corporate loans, Oppenheimer & Co.'s Meredith Whitney said.

The bank may post a loss of $1.6 billion, or 28 cents a share, for the first quarter, compared with a profit of about $5 billion, or $1.01, a year earlier, Whitney wrote today in a note to clients. The prediction compares with the 63-cents per share average of 12 analyst estimates surveyed by Bloomberg.

The rate of loan losses is ``grossly underestimated by consensus estimates'' at Citigroup and other U.S. banks, Whitney wrote. ``Core fundamentals are rapidly deteriorating.'' She cut her per-share estimate for 2008 earnings by more than 70 percent to 75 cents. The New York-based company's shares could fall more than 36 percent to less than $16, she wrote. They've declined about 15 percent this year.

Citigroup posted a $9.8 billion loss for the fourth quarter, the widest in its 196-year history, after writing down subprime mortgage-linked collateralized debt obligations whose value plummeted last year as investors shunned securities linked to the least creditworthy borrowers. Vikram Pandit stepped in as chief executive officer in December, after Charles O. ``Chuck'' Prince was forced to resign.

Whitney was among the first analysts to gauge the depth of Citigroup's losses, writing in a note last October that the bank may have to cut dividend payments to shareholders for the first time since the 1990s. In January, the bank slashed its dividend by 41 percent, reversing a pledge made by its executive- committee chairman, former U.S. Treasury Secretary Robert Rubin, to preserve the shareholder payout.

 

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Stocks Advance in Europe, Asia, Led by UBS; U.S. Futures Fall

(Bloomberg) -- Stocks gained in Europe and Asia, led by financial companies, on speculation bond insurers will avoid a cut in their credit ratings and limit further losses related to subprime mortgages. U.S. index futures declined.

UBS AG and BNP Paribas SA led banks higher in Europe, while Millea Holdings Inc., Japan's biggest insurer, and Commonwealth Bank of Australia climbed in Asia. Royal Bank of Scotland Group Plc gained on expectations Qatar Investment Authority may buy a stake, while Alliance & Leicester Plc jumped on speculation it may get a bid from Lloyds TSB Group Plc.

The MSCI World Index gained 0.7 percent to 1,458.88 as of 1:24 p.m. in London, while Standard & Poor's 500 Index futures slipped 0.1 percent. The MSCI World Financials Index jumped 1.3 percent, the most in almost two weeks, as investors speculated Ambac Financial Group Inc. may get new capital.

``We're making our way toward a rescue plan for Ambac,'' said Salah Seddik, who helps oversee $5.9 billion at Richelieu Finance in Paris. ``This is reassuring and good news for financial stocks. It means that in terms of writedowns, the worst is behind us.''

Speculation that companies in the bond-insurance industry may not be able to maintain the AAA credit ratings they rely on to insure about $2.4 trillion in securities has contributed to an 8.1 percent decline in the MSCI World this year.

Europe's Dow Jones Stoxx 600 Index advanced 1.3 percent, with all 18 national markets gaining. Germany's DAX added 1 percent, while France's CAC 40 rose 1.5 percent. The U.K.'s FTSE 100 jumped 1.4 percent.

Asian Indexes

The MSCI Asia Pacific Index climbed 1.4 percent. Japan's Nikkei 225 Stock Average increased 3.1 percent to 13,914.57, the highest close since Jan. 15.

UBS, Europe's largest bank by assets, rallied 2.5 percent to 36.58 Swiss francs. BNP Paribas, France's biggest bank, advanced 4.3 percent to 63.84 euros. Deutsche Bank AG, Germany's largest lender, gained 1.9 percent to 75.79 euros.

Millea jumped 8.9 percent to 4,030 yen, the most since Oct. 2. Commonwealth Bank, Australia's biggest mortgage lender, rose 4.9 percent to A$44.67.

Ambac may get $3 billion in new capital as part of a rescue agreement with banks, according to a person with knowledge of the discussions. Ambac spokeswoman Vandana Sharma declined to comment specifically on the discussions.

Bailout Plan

Stocks climbed in late trading in the U.S. on Feb. 22 after CNBC on-air editor Charles Gasparino said that a bailout may be announced this week, citing bankers working on the deal. Gasparino also said ``the entire deal could fall apart.''

``The efforts to prevent Ambac from collapsing will push the market up today, particularly financial stocks,'' said Erhan Aslan, a sales trader at Concord Investmentbank AG in Frankfurt.

Royal Bank of Scotland rallied 6.2 percent to 401.5 pence. The Qatari government is considering an investment in the U.K.'s second-largest bank, the Sunday Telegraph Business reported, citing unidentified people with knowledge of the matter.

Alliance & Leicester gained 7.4 percent to 547.5 pence, and Bradford & Bingley Plc jumped 7.2 percent to 202 pence.

Lloyds TSB, the biggest U.K. provider of personal loans, is in the ``early stages'' of assessing approaches to smaller rivals Alliance & Leicester and Bradford & Bingley, the Sunday Telegraph reported, citing unidentified people close to the bank.

 

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SocGen in record loss, may take new writedowns

(Reuters) - Societe Generale (SOGN.PA: Quote, Profile, Research) confirmed a record fourth-quarter loss of 3.35 billion euros ($4.93 billion) after absorbing a huge rogue trading scandal that has made France's second-biggest listed bank a potential takeover target.

The loss coincided with an internal report acknowledging that better systems might have prevented the costly stock market gambles it blames on junior trader Jerome Kerviel.

SocGen, like many of the world's top banks, has also been hit by losses related to a global credit crunch and the bank warned it may make further writedowns in the future.

Executive Chairman Daniel Bouton told Reuters the 144-year-old firm was determined to ride out the storm as an independent bank, despite reports of a potential bid from long-time suitor and arch-rival BNP Paribas (BNPP.PA: Quote, Profile, Research).

"I am completely determined to continue with our strategy because, even taking into account our very bad year in 2007 due to the financial crisis and this fraud, it's this strategy which creates and will create the most value for shareholders," Bouton said in an interview. "This is my opinion, and it's one that's backed by the board."

SocGen's fourth-quarter net loss compared with a 1.18 billion euro profit a year earlier and a fourth-quarter profit of 1.0 billion euros unveiled by rival BNP Paribas, although BNP Paribas' results were down from the year before.

SocGen cut its 2007 dividend to 0.90 euro from 5.20 euros.

 

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Microsoft to open up some key software blueprints

(Reuters) - Microsoft Corp said on Thursday that it would make key technology elements of some of its best-selling software products widely available to boost interoperability of its software with that of competitors and customers.

To make connecting Microsoft products with third-party software products easier, Microsoft will publish on its Web site key software blueprints, known as application program interfaces, pertaining to its high-volume products used by other Microsoft products.

Microsoft also pledged not to sue open-source developers for development or noncommercial distribution of those software blueprints.

In January, the European Commission launched new antitrust investigations into Microsoft to see whether the company broke competition rules to help its Web browser and its Office and Outlook products.

 

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Microsoft to Change Technology Practices in Bid to Appease EU

 (Bloomberg) -- Microsoft Corp., the world's biggest software maker, announced a series of changes in its technology and in how much information it gives developers about its products, in a bid to satisfy European regulators.

 

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Sharper Image Files for Bankruptcy Following Losses

(Bloomberg) -- Sharper Image Corp., the seller of $300 electric shavers and $1,999 massage chairs, filed for bankruptcy protection after losing money in 11 of the last 13 quarters.

The 31-year-old retailer will shed 90 stores while it deals with a ``severe liquidity crisis,'' Chief Financial Officer Rebecca Roedell said in papers filed last night in U.S. Bankruptcy Court in Wilmington, Delaware. Sharper Image has lost more than $135 million since early 2005 on bad publicity stemming from lawsuits over its Ionic Breeze air purifiers and ``ever-tightening'' credit markets, the company said.

Former Chairman Richard Thalheimer founded Sharper Image in 1977 and built it into a company with 184 stores by selling gadgets such as the Ionic Breeze and $100 shaving mirrors. By January, sales had fallen every quarter for three years, and the San Francisco-based retailer brought in turnaround specialists to run the company last week.

The chain ousted Thalheimer, 59, in 2006 after losing more than three-quarters of its stock market value. Sharper Image, which peaked at $39.98 in February 2004, traded at 40 cents at 11:39 a.m. in Nasdaq Stock Market composite trading.

The company listed assets of $251.5 million and debt of $199 million and is in negotiations to sell its most unprofitable stores and inventory. It competes with Brookstone Inc. and New York-based Hammacher Schlemmer.

Another retailer, Virginia Beach, Virginia-based catalog company Lillian Vernon Corp., also filed for bankruptcy protection with a plan to sell its assets to help pay creditors.

 

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KKR Financial Delays Repayments, Starts Negotiations

(Bloomberg) -- KKR Financial Holdings LLC, Kohlberg Kravis Roberts & Co.'s only publicly traded fixed-income fund, delayed repaying debt a second time in six months after failing to find buyers for commercial paper backed by mortgages.

Lenders to the fund agreed to the delay as KKR Financial seeks to restructure, the San Francisco-based company said yesterday in a regulatory filing. KKR Financial, whose stock has fallen 50 percent in the past year, didn't say how much debt is affected.

The announcement rekindled concerns that the decline in the market for short-term asset-backed debt, which totaled $1.2 trillion in August, will accelerate after a rebound early last month. Assets fell to $796 billion in the week ended Feb. 13, the third weekly drop. Standard & Poor's downgraded ratings on notes issued by KKR Pacific Funding Trust last week, citing uncertain pricing on the AAA rated securities that support them.

``The picture is getting worse and worse,'' said Felix Freund, who helps manage the equivalent of $14.7 billion of fixed-income securities at Frankfurt-based Union Investment GmbH. KKR Financial's second repayment extension ``shows there is still a lot of levered investments in the credit market that we can't see.''

About half the debt will be due by March 3 instead of Feb. 15, with the rest owed on March 25, according to the filing.

The talks come less than six months after the fund received a $230 million cash infusion from investors following losses on residential mortgages in the wake of the U.S. subprime crisis. The fund, led by Chief Executive Officer Saturnino Fanlo, raised a further $270 million in a rights offering with some of New York-based KKR's own partners buying shares in it, which had $19 billion of assets at the end of December.

Repricing `Driver'

The deferral drove investors to seek the security of government debt, sending 10-year Japanese bonds to the biggest gain in two weeks while perceived corporate risk in Asia and Europe soared. Contracts on Europe's Markit iTraxx Crossover Index of 50 companies with mostly high-yield credit ratings increased 26.5 basis points to 611.5 today, according to Deutsche Bank AG. A basis point is 0.01 percentage point.

``The driver behind the current repricing is KKR Financial Holdings delaying repayment of CP for the second time,'' analysts led by Mark Harmer, head of credit research at ING Groep NV, said in a note to clients today.

KKR Financial fell 30 cents, or 2.1 percent, to $14.23 at 11:44 a.m. in New York Stock Exchange composite trading. Zoe Watt, a spokeswoman for KKR in London, declined to comment.

IPO

Kohlberg Kravis Roberts, the New York-based investment firm run by Henry Kravis and George Roberts, raised $800 million in KKR Financial's initial public offering in June 2005, selling the shares for $24 apiece. The fund raised money by selling commercial paper to invest in mortgages. It sold almost half of its mortgage loans in August as prices on bonds linked to U.S. home loans started to drop, leaving it with about $5.3 billion of mortgages.

Both Kravis and Roberts sit on KKR Financial's six-member investment committee, alongside KKR Partner Scott Nuttall, KKR Financial's Fanlo and Chief Operating Officer David Netjes.

Kravis and Roberts started the firm with Jerome Kohlberg, their colleague from Bear Stearns Cos., in 1976. Kohlberg left in 1987 and started his own buyout group, Kohlberg & Co. LLC. The private-equity business owns more than 42 companies with more than $180 billion of annual revenue and about 800,000 workers around the world. The firm's investments range from Alliance Boots Ltd. in the U.K. to Texas power producer TXU Corp., now known as Energy Future Holdings Corp.

 

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U.S. Economy: Housing Slump Fails to Quell Inflation

(Bloomberg) -- The two-year housing slump pushing the U.S. economy toward a recession hasn't alleviated inflation pressures, reports today showed.

Consumer prices rose 0.4 percent from December, with costs excluding food and energy climbing 0.3 percent, the most since June 2006, the Labor Department said. Builders started work on 1.012 million homes at an annual rate in January, close to a 16- year low, the Commerce Department reported in Washington.

The figures mean Federal Reserve Chairman Ben S. Bernanke will need to consider raising interest rates as soon as the economy stabilizes. Bernanke, who last week said the Fed is prepared to keep lowering interest rates, warned that faster inflation would ``greatly complicate'' the central bank's job.

``What this means is that they don't have as much comfort to play with rates,'' Ellen Zentner, an economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said on Bloomberg Television, referring to Fed officials. ``Once the U.S. economy looks like it's started to stabilize, they're going to have to jump right back in to that, raising rates back up to neutral.''

Treasury securities slumped after the consumer price report, while recouping most of the losses later. Ten-year note yields increased to 3.93 percent at 9:54 a.m. in New York from 3.90 percent late yesterday. The Standard & Poor's 500 stock index lost 0.8 percent, to 1,337.97.

Lowest Since 1991

Building permits, an indication of future construction, fell 3 percent to a 1.048 million rate, the lowest level since November 1991, today's Commerce report showed.

Housing starts were projected to rise to a 1.01 million pace from an originally reported 1.006 million rate in December, according to the median forecast in a Bloomberg survey of 72 economists. Permits were forecast to drop to a 1.05 million rate, from 1.068 million in December.

``We don't think housing has hit bottom yet,'' said Douglas Porter, deputy chief economist at BMO Capital Markets in Toronto. ``Until we get some stabilization in sales or even a mild improvement, it's likely that construction will continue to weaken.''

A jump in food and energy costs, rents and clothing prices led the consumer-price index higher last month. Economists had forecast a 0.3 percent increase, with the so-called core rate gaining 0.2 percent, Bloomberg surveys showed.

Today's price report ``certainly showed a broad-based intensification of inflation pressures,'' said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York. While the Fed currently ``is looking at growth,'' inflation ``will come back on the radar screen'' when economic data improve, he said.

Food Costs

Food prices, which account for about one-seventh of the CPI, rose 0.7 percent, matching the biggest gain since May 2004, after a 0.1 percent increase in January. Energy prices last month increased 0.7 percent, after rising 1.7 percent the previous month.

``Even if energy prices remain flat, the continued rise in retail food prices will damp consumer spending growth,'' JPMorgan Chase & Co. economists wrote in a note to clients last week.

Fuel costs were up 4.5 percent. Apparel prices rose 0.4 percent after a 0.1 percent increase in December.

The consumer price index is the government's broadest gauge of costs for goods and services. Almost 60 percent of the CPI covers prices that consumers pay for services ranging from medical visits to airline fares and movie tickets.

 

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U.S. Stocks Rise, Led by Energy Companies; European Shares Gain

(Bloomberg) -- U.S. stocks rose, led by energy and mining companies, after oil gained for the seventh time in eight days and copper climbed to a four-month high.

Exxon Mobil Corp., the biggest U.S. fuel company, and Freeport-McMoRan Copper & Gold Inc., the world's second-largest copper producer, advanced. Wal-Mart Stores Inc., the biggest retailer, increased after fourth-quarter profit topped analysts' estimates. Rallies in raw-materials producers lifted Asia's stock benchmark to a two-week high, while European shares rebounded from earlier losses as insurers rose.

The Standard & Poor's 500 Index added 14.13 points, or 1.1 percent, to 1,364.12 as of 9:41 a.m. in New York. The Dow Jones Industrial Average rose 121.63, or 1 percent, to 12,469.84. The Nasdaq Composite Index gained 22.46, or 1 percent, to 2,344.26. The U.S. market was closed yesterday for Presidents' Day.

``The general earnings picture is quite good,'' said Lincoln Anderson, the Boston-based chief investment officer of LPL Financial Services, which helps oversee about $271 billion. ``U.S. stocks are sort of on sale.''

Fourth-quarter profit for the S&P 500's 412 members that have reported results dropped by an average 19 percent, data compiled by Bloomberg show. Excluding financial companies, earnings climbed 18 percent. The S&P 500 trades at 13.9 times its members' estimated 2008 profit, based on analysts' projections compiled by Bloomberg. Index members last traded at a valuation of less than 14 times historic earnings in 1990.

Weekly Gain

The S&P 500 rose last week for the third time in a month after the biggest jump in oil since November lifted energy producers, and earnings from consumer companies exceeded analysts' estimates.

The MSCI Asia Pacific Index gained 1.6 percent today to a two-week high as Rio Tinto Group said it's seeking a bigger price increase for its iron ore from steelmakers than the 65 percent obtained by a rival.

Europe's Dow Jones Stoxx 600 Index rose 0.9 percent after earlier declining as much as 1.3 percent. A gauge of insurers added 2.1 percent for the biggest gain among 18 industry groups.

 

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Staples in 2.5 bln euro offer for Corp. Express

(Reuters) - U.S. office goods supplier Staples proposed a 7.25 euros per share offer for Dutch peer Corporate Express on Tuesday, valuing the company at around 2.5 billion euros ($3.68 billion).

Ending months of speculation about a possible bid, Staples said its all-cash offer represented a premium of around 67 percent to Corporate Express' closing price of February 4. Shares in Corporate Express jumped 33 percent on the news.

Corporate Express, one of the world's largest office products wholesalers, has been under pressure from hedge funds to put itself up for sale after losses in the United States, its key market. It was not immediately available to comment.

"Staples has high regard for the Corporate Express management team, and believes together our combined companies will create significant opportunities for all stakeholders," said Ron Sargent, Staples chairman and chief executive.

 

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Bayer stops late-stage Nexavar trial

(Reuters) - Bayer HealthCare, a U.S.-based unit of Bayer AG (BAYG.DE: Quote, Profile, Research), stopped a late-stage trial of Nexavar in patients with non-small cell lung cancer, after an independent data monitoring committee concluded that the study would not meet the main goal of improved overall survival.

In the late-stage study, patients received Nexavar in combination with chemotherapeutic drugs carboplatin and paclitaxel.

Bayer said higher mortality was observed in a certain subset of patients treated with the combination of Nexavar and the chemotherapeutic drugs, versus those treated with carboplatin and paclitaxel alone.

Bayer and co-developer Onyx Pharmaceuticals Inc (ONXX.O: Quote, Profile, Research) will review the findings of the analysis to determine what, if any, impact they have on other ongoing Nexavar lung cancer trials.

 

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Northern Rock a lingering risk to Brown's future

(Reuters) - Nationalizing ailing Northern Rock bank may be the best option left to British Prime Minister Gordon Brown, but lingering doubts over its future risk chipping away at public confidence in the run up to the next election.

Hopes for a fast Northern Rock turnaround are hostage to financial markets stabilizing, a buoyant housing market returning and approval for nationalization from the European Union that does not result in a breakup and big job losses.

Brown has staked his credibility on protecting Britain from the fallout of the global credit crisis. But with the economy and the housing market slowing, he will be in the firing line if things get worse and the public looks for someone to blame.

And if those with Northern Rock mortgages get houses repossessed in a downturn, the chances are high that newspapers hostile to the ruling Labour government will use their headlines to attack Brown's policies.

So just as the Iraq war and a scandal over political party funding dogged former Prime Minister Tony Blair until he finally threw in the towel last year, so Northern Rock risks becoming a millstone for Brown.

"It was interesting that Brown was saying the test for the government is economic stability as there are no guarantees it would pass that test given the turmoil could still pass through to the economy," said Philip Shaw, chief economist at banking group Investec.

 

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Bayer, Onyx Stop Cancer Trial on Higher Death Rate

(Bloomberg) -- Bayer AG, Germany's biggest drugmaker, and U.S. partner Onyx Pharmaceuticals Inc. stopped a late-stage test of their Nexavar cancer drug in lung tumors because of a higher death rate among some of the patients.

 

An independent committee that monitors trials advised the companies that the treatment wouldn't meet the main goal of the test, Leverkusen-based Bayer said today in a statement on PRNewswire.

 

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New York Fed Manufacturing Index Dropped to -11.7 in February

(Bloomberg) -- Manufacturing in New York unexpectedly contracted this month for the first time in almost three years as new orders and shipments declined.

The Federal Reserve Bank of New York's general economic index fell to minus 11.7, the first negative reading since May 2005, from 9.0 in January, the bank said today. Readings below zero signal contraction. The New York Fed's index averaged 17.2 in 2007.

The worst housing slump in a quarter century and cutbacks at U.S. automakers are weakening manufacturing and helping to push the broader economy toward a recession. Fed Chairman Ben S. Bernanke yesterday told lawmakers that the central bank will act in a ``timely'' manner to help growth, after already cutting the benchmark interest rate 2.25 percentage points since September.

``Prospects for manufacturing are shaky,'' Robert Dye, a senior economist at PNC Financial Services Group Inc. in Pittsburgh, Pennsylvania, said before the report.``We are relying on strong exports but I'm not convinced that will hold up indefinitely. We expect to see capital spending softening.''

Economists forecast the New York manufacturing index would fall to 6.5 in February, according to the median of 49 estimates in a Bloomberg News survey. Projections ranged from minus 1.2 to 11.6.

The New York Fed's measure of new orders fell to minus 11.9 from 0.0 the prior month, and a measure of shipments dropped to minus 4.9 from 15.8 in January.

Inventory Gauge

A gauge of unfilled orders decreased to minus 1.1 from 1.2, while the index of inventories was unchanged in February after a minus 4.9 reading the month before.

The employment index fell to minus 2.1 from a positive 2.4 a month earlier, the New York Fed said. An index of prices paid rose to 47.4 from 40.2, while a gauge of prices received fell to 17.9 from 18.3.

The report provides one of the month's earliest clues to the state of manufacturing nationwide. Similar data for the Philadelphia region will be released Feb. 21. New York's economy is less vulnerable to the auto slump and more exposed to financial services and trade, economists said.

The index measuring the manufacturing outlook for six months from now rose to 22.7 from 19.4, today's report showed.

 

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Banks at Risk From $203 Billion Writedowns, Says UBS

 (Bloomberg) -- The world's banks ``remain at risk'' of up to $203 billion in additional writedowns, largely because the bond insurance crisis could worsen, UBS AG said.

``Banks have made progress in credit-market related writedowns,'' London-based UBS analyst Philip Finch said in a note to investors today. ``But more are expected,'' he added.

Writedowns for collateralized debt obligations and subprime related losses already total $150 billion, Finch estimated. That could rise by a further $120 billion for CDOs, $50 billion for structured investment vehicles, $18 billion for commercial mortgage-backed securities and $15 billion for leveraged buyouts, UBS said. ``Risks are rising and spreading and liquidity conditions are still far from normal,'' the note said.

U.S. monoline insurers MBIA Inc. and Ambac Financial Group Inc. are struggling to maintain the AAA ratings on their insurance units because of losses on residential mortgages, exposing banks to possible writedowns on CDOs guaranteed by the insurers. Monoline insurers guarantee the repayment of bond principal and interest in the event of defaults.

Ambac was the first monoline insurer to ever be downgraded when Fitch Ratings cut it to AA from AAA in January, citing ``significant uncertainty'' over the insurer's business model.

 

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MagtigeMoer.moermagtig2@blogger.com, MagtigeMoer.moermagtig9@blogger.com, MagtigeMoer.moermagtig6@blogger.com

(Reuters) - Federal Reserve Chairman Ben Bernanke said on Thursday the central bank will act as needed to help the struggling economy, but said the Fed has to be mindful that growth should pick up later in the year.

"The (Federal Open Market Committee) will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks," Bernanke said in remarks prepared for delivery to the Senate Banking Committee.

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YRC to cut 1,100 jobs

(Reuters) - North America's largest trucking company, YRC Worldwide Inc (YRCW.O: Quote, Profile, Research), said on Wednesday that as part of its plans to shut 27 service centers it will cut approximately 1,100 jobs.

In a presentation to analysts that was filed with the U.S. Securities and Exchange Commission, Chief Executive Bill Zollars said the company expects cash proceeds from property sales of between $8 million to $10 million.

YRC said that as part of the restructuring plan more than 600 trucks and 1,200 trailers would be removed from its fleet.

 

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Global Confidence Weakens for Third Month on Slowdown

(Bloomberg) -- Confidence in the global economy fell for a third month in February as the slowdown in the U.S. spread to Europe and Japan, a survey of Bloomberg users on five continents showed.

The Bloomberg Professional Global Confidence Index fell to 14.3 from 21.0 in January. Users in Asia were the most pessimistic about the global economy, with the index falling to 12.6 from 15.0. A reading below 50 indicates negative sentiment.

Global stocks have lost more than $6 trillion this year as credit dried up for some borrowers and the U.S. expansion stalled. After insisting Europe would weather the slowdown, European Central Bank President Jean-Claude Trichet said last week uncertainty was ``unusually high,'' while Bank of Japan Governor Toshihiko Fukui may see his interest-rate increases reversed by his successor within months.

``First credit markets collapsed and that led to a banking crisis which has affected the real economies of all regions,'' said Jose Carlos Diez, chief economist at Intermoney SA in Madrid and a participant in the survey. ``We have yet to know when the slowdown of the global economy will end and I don't expect a recovery before the summer of 2009.''

The Bloomberg Professional Confidence Survey collated the responses of 6,878 Bloomberg users from Auckland to New York on the economic health of their region and the world. The survey was conducted from Feb. 4 to Feb. 8. The investors, traders and analysts were also asked about the outlook for their currencies, bonds, stocks and rates in the next 6 months. Participants answered questions in cities including Hong Kong, Zurich and London.

Pessimistic Americans

North American users were the most pessimistic about economic growth in their region, with the index falling to 19.3 from 19.6. Home sales in the world's largest economy fell at the fastest pace since at least 1963. While users in Asia were the least pessimistic, the index suffered the sharpest deterioration, falling to 43.5 from 51.1.

``We're already getting signs that things are deteriorating, but there's fear that things are going to get worse,'' said Samra Al-Harthy, an economist at Standard Chartered Plc in London.

In Europe, sentiment toward the world economy dropped to 12.9 from 17.3. Participants there also soured on their own economy, pushing the regional index down to 26.2 from 27.3.

IMF Lowers Forecast

The International Monetary Fund in January lowered its forecast for global economic growth this year to 4.1 percent, the lowest since 2003, from 4.4 percent predicted in October. The IMF said last year's increase in credit costs resulting from defaults on mortgages aimed at borrowers with poor credit histories is hurting the rest of the economy.

Financial institutions around the world face $400 billion of write-offs as a consequence of the U.S. subprime mortgage slump, according to Group of Seven estimates, German Finance Minister Peer Steinbrueck said on Feb. 9.

UBS AG, Europe's largest bank by assets, last month posted the biggest loss ever by a bank after raising fourth-quarter writedowns to $14 billion. The world's biggest financial companies have booked more than $145 billion of writedowns and losses since the beginning of 2007, partly because of the declining value of securities backed by assets including U.S. subprime mortgages.

``The epicenter of this slowdown is clearly the U.S.,'' said Kathleen Stephansen, chief global economist at Credit Suisse in New York. Still, ``the credit crunch will be exported to Japan and, particularly, Europe.''

 

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Auction-Bond Failures Roil Munis, Pushing Rates Up

(Bloomberg) -- Bonds sold by U.S. municipal borrowers with rates set through periodic auctions failed to attract enough buyers as banks including Goldman Sachs Group Inc. and Citigroup Inc. that run the bidding wouldn't commit their own capital to the debt.

Rates on $100 million of bonds sold by the Port Authority of New York and New Jersey, with bidding run by Goldman, soared to 20 percent yesterday from 4.3 percent a week ago, according to data compiled by Bloomberg. Presbyterian Healthcare in Albuquerque and New York state's Metropolitan Transportation Authority also experienced failures, officials said.

What began three weeks ago with too few bidders for auction-rate debt backed by relatively small entities, such as Georgetown University and Nevada Power, has widened in recent days to include large issues of state governments, such as New York state's Dormitory Authority. The auction failures provide new indication of Wall Street's unwillingness to commit capital amid $133 billion in credit losses and asset writedowns.

``It's the beginning of the end for the auction-rate market,'' said Matt Fabian, a senior analyst with Concord, Massachusetts-based Municipal Market Advisors. ``Banks have stopped supporting the market.''

Investor demand for the securities has declined on waning confidence in the credit strength of insurers backing the debt, and on reluctance by banks to submit bids and risk ending up with too many of the bonds. Local governments that have borrowed in the $300 billion auction-rate market confront the prospect of higher borrowing costs as economic slowing trims tax revenue.

Auction-Rate Bidding

Auction bonds have interest rates that are determined by bidding that typically occurs every seven, 28 or 35 days. When there aren't enough buyers, the auction fails and bondholders who wanted to sell are left holding the securities. Rates at failed auctions are set at a level spelled out in official statements issued at the initial bond sale.

Other borrowers paid higher rates, even if their auctions didn't fail. Wisconsin's 28-day auction yesterday of taxable bonds was set at a 10 percent rate, up from 4.75 percent for identical securities Feb. 7.

Frank Hoadley, Wisconsin's director of capital finance, said he had no advance warning from bankers about the jump in rates. ``We are making decisions'' about converting the auction bonds to different kinds of debt, he said.

Local governments are obliged to pay the high rates until either the auctions start attracting more buyers or they modify the bonds to some other kind of variable-rate debt or a fixed interest rate. Bankers and borrowers have been working on conversion plans for several weeks.

Port Authority Bonds

The 20 percent rate for the $100 million of Port Authority auction bonds will cost it $388,889 until the next weekly auction, up from $83,611 last week. Interest on the bonds is subject to federal income tax.

``We have seen widening spreads, reduced demand for certain auction-rate securities and failed auctions, including some auctions in which Citi acted as broker dealer,'' Danielle Romero-Apsilos, a spokeswoman at New York-based Citigroup, said in a statement.

A Citibank-run auction for the New York state's Dormitory Authority failed yesterday, resulting in an interest rate of 6.26 percent, up from 3.12 percent a week earlier, according to Bloomberg data. Following the auction miss, the interest rate was set at twice one-month Libor, the London interbank offered rate for wholesale bank deposits, according to the official statement for the bonds.

Michael DuVally, a spokesman at New York-based Goldman, declined to comment.

 

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U.S. Economy: January Retail Sales Unexpectedly Rise

(Bloomberg) -- Retail sales in the U.S. unexpectedly rose in January, easing concern that the world's largest economy has already slipped into a recession.

The 0.3 percent increase was led by spending on autos, clothes and gasoline, the Commerce Department said today in Washington. The figure followed a 0.4 percent decrease the previous month. Purchases excluding automobiles and gasoline were unchanged.

``Today's report will diminish recession anxieties, but it doesn't dispel them altogether,'' said Richard DeKaser, chief economist at National City Corp. in Cleveland, who accurately forecast the sales gain. Federal Reserve Bank of St. Louis President William Poole said yesterday ``the best bet'' is the U.S. will avoid a recession.

Demand from consumers, whose spending accounts for about 70 percent of the economy, will probably wane in coming months, forcing the Fed to lower interest rates further, economists said. Macy's Inc., Target Corp. and Limited Brands Inc. said last week that sales at stores open more than a year declined in January. Macy's cut 2,300 jobs.

Treasury securities dropped after the report, with 10-year note yields rising to 3.70 percent at 10:22 a.m. in New York, from 3.66 percent late yesterday. The Standard & Poor's 500 Index added 0.6 percent to 1,356.24. At the same time, the S&P Retailing Index, which includes Home Depot Inc. and Best Buy Co., retreated 0.4 percent.

Inventories Increase

A separate report showed declining sales at U.S. businesses in December led to the biggest increase in inventories of unsold goods in a year and a half.

The 0.6 percent gain in inventories, the highest since July 2006, followed a 0.4 percent rise in November, the Commerce Department said today in Washington. Sales declined 0.5 percent, the steepest since January 2007, after a 1.4 percent gain the prior month.

Retail sales were projected to fall 0.3 percent after an originally reported 0.4 percent drop the prior month, according to the median estimate in a Bloomberg News survey of economists.

Threats to Spending

The worst housing slump in a quarter century and shrinking access to credit threatens to hurt spending this quarter. The economy lost 17,000 jobs in January, the first drop in more than four years. The Standard & Poor's 500 Index has fallen three consecutive months, the longest losing streak since 2003, eroding households' investment portfolios.

Consumers are increasingly limiting expenses to those they can't avoid. The amount Americans must spend each month on debt service, housing, medical costs, and food and energy bills rose to 66.9 percent of their total spending in December, the highest since records began in 1980, according to Bloomberg figures.

``Food prices have been rising and gasoline prices have been rising and so we got a little boost to overall sales there,'' said Kevin Logan, senior market economist at Dresdner Kleinwort in New York, who forecast retail sales would advance 0.2 percent. ``There's evidence here that the slump in the housing market is affecting spending.''

Excluding automobiles, purchases gained 0.3 percent after a 0.3 percent decline in December.

Car Dealers

Sales at automobile dealerships and parts stores rose 0.6 percent after a decline of 1.1 percent in December, the Commerce Department said.

That contrasts with industry figures that showed cars and light trucks sold last month at a 15.2 million annual pace, down 6.7 percent from December. Auto industry sales this year are forecast to drop to the lowest level since 1998.

``There is still a lot of concern about consumers,'' said David Wyss, chief economist at Standard & Poor's in New York, said in an interview with Bloomberg Radio. ``Car sales did really badly during the month. People are going to continue to worry about this and darn well ought to continue to worry.''

Filling station sales rose 2 percent in January after remaining unchanged the prior month, today's report showed. Regular gasoline reached as high as $3.11 a gallon in early January, about 11 cents more than the average for the prior month, according to AAA. Excluding gas, retail sales rose 0.1 percent.

Sales also rose at clothing retailers, which posted a 1.4 percent increase, and grocery and beverage stores, which gained 0.6 percent. Purchases at non-store retailers, which include online and catalog sales, rose 0.5 percent.

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Platinum sets lifetime high

(Fin24) - Platinum hit a record high for the ninth straight trading day on Tuesday as concerns deepened over output losses in top producer South Africa due to a power crisis, analysts said.

Gold fell as much as 1% as the dollar gained ground versus the euro after Warren Buffett told CNBC television that he had offered to take over the liabilities of monoline bond insurers. But the metal later pared losses.

Platinum rose to a high of $1 965 an ounce before falling to $1 943/1 950 by 17:50, against $1 933/1 941 in New York late on Monday.

"You know that platinum demand is increasing on the back of emission controls and you know that supplies are going to be squeezed. So it just makes sense to be long in this market," said Johannesburg-based Walter De Wet, analyst at Standard Bank.

"There might be slight over-reaction as everybody is on the bandwagon because of the recent price rise, but there is also some realisation that things are going to get tighter. We believe that the bias is on the upside."

Platinum's rally, which has sent prices up 30% in just three weeks, gained pace after Anglo Platinum, the world's biggest producer, said on Monday the power problem alone would cut output by as much as 120 000 ounces in 2008. It had already cost 30 000 ounces in lost output this year.

Northam Platinum said on Tuesday its production fell 16.5% to 150 755 ounces the July-December period of 2007 from a year earlier and saw its output at the same level in the next six months, provided mines got 90% power.

The market nervously awaits financial results of Impala Platinum, the world's second-biggest producer of the metal, on Thursday for more cues on total production losses.

"It's a chronic problem. It has been a deficit market for many years and it looks like it has returned to a significant deficit market again," said David Holmes, director of metals sales at Dresdner Kleinwort Investment Bank.

Mines across South Africa, which accounts for four-fifths of the world's supply of the metal, ground to a halt for five days at the height of the power crisis last month. Platinum is used in jewellery and auto catalysts to clean exhaust fumes.

Negotiations were under way for South African state-owned power utility Eskom to buy surplus electricity from local producers as part of its bid to solve the nation's energy crisis, Public Enterprises Minister Alec Erwin said on Monday.

A spokesperson at Eskom said the company was in discussions with the government to ensure sufficient funding to meet its expansion programme.
 

 

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TPG Seeks More Than $15 Billion for Buyout Fund, Investors Say

(Bloomberg) -- TPG Inc., the private-equity firm that last year bought TXU Corp. in the largest U.S. leveraged buyout, is seeking more than $15 billion for a new fund, according to potential investors.

The investment committee of Washington state's pension fund, which met with TPG co-founder David Bonderman Feb. 7, will recommend a $750 million commitment, said Liz Mendizabal, a spokeswoman in Olympia. Bonderman is set to discuss the fund, called TPG VI, with the Oregon Investment Council Feb. 27.

TPG, based in Fort Worth, Texas, is putting together the fund even as deal-making is stalled after a doubling of financing costs in the second half of 2007. Endowments and pension funds, seeking returns that top stocks and bonds, are increasing their investments with private-equity firms, whose assets may reach $5 trillion by 2012, according to research firm Private Equity Intelligence Ltd. in London.

``The public markets are down or soft and there's no other game,'' said Lyons Brewer, a managing director of C.P. Eaton Partners LLC, a Rowayton, Connecticut-based firm that helps buyout firms and hedge funds raise money.

Funds raised a record $502 billion last year, according to Private Equity Intelligence, including $21.7 billion by New York-based Blackstone Group LP, the industry's biggest pool.

TPG Partners IV, the $5.3 billion fund the firm started in 2003, has since returned an average of almost 36 percent a year to investors, according to data on the Web site of the California Public Employees' Retirement System.

 

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Paulson, U.S. Banks Forge Foreclosure-Freeze Deal

(Bloomberg) -- Bank of America Corp., Citigroup Inc. and four other U.S. lenders agreed with Treasury Secretary Henry Paulson to take new steps to help borrowers in danger of foreclosure stay in their homes.

Paulson and the banks offered a 30-day freeze on some foreclosures while loan modifications are considered. The Treasury chief, with Housing and Urban Development Secretary Alphonso Jackson, said today at a news conference in Washington that ``Project Lifeline'' would help stabilize communities disrupted by mortgage defaults.

``If someone is willing to make a call, to reach out, there's a chance they can save their home,'' Paulson said. ``As our economy works through this difficult period, we will look for additional opportunities to try to avoid preventable foreclosures.''

The program is designed to help a broad range of homeowners, not just subprime debtors who borrowed more than they could afford. Still, it won't help everyone, Paulson said. The U.S. housing correction ``is not over'' and ``the worst is just beginning'' for subprime borrowers who face higher interest rates in the next two years, he said.

In a statement, the banks said the program would start with a letter to homeowners more than 90 days delinquent on payments that lays out procedures for them to ``pause'' the foreclosure process. The homeowner has 10 days to respond to the notice and give additional financial information so the lender is able to weigh new payment options.

Loan Types

Subprime, Alt-A and prime borrowers are eligible, according to the plan. Subprime mortgages are made to borrowers with poor credit or high debt. Alt-A loans are for borrowers who want atypical terms, such as proof-of-income waivers or investment- property collateral, without sufficient compensating attributes, such as larger down payments.

JPMorgan Chase & Co., Wells Fargo & Co., Washington Mutual Inc. and Countrywide Financial Corp. will also participate in the plan. All six are members of Hope Now, the alliance of lenders, trade groups and counselors formed last year to head off a surge of foreclosures by identifying and working with borrowers struggling to meet higher payments.

The Treasury chief said the six banks account for half of the U.S. mortgage market, and called on other lenders to adopt the plan as well.

Rate Freeze

Paulson, who as recently as last month opposed a moratorium on foreclosures, wants lenders to go beyond earlier pledges to freeze subprime interest rates for five years. The deepest housing slump in a generation is threatening consumer spending and the job market, pushing the economy to the verge of a recession.

Jackson said the plan is a ``responsible, timely effort'' aimed at encouraging borrowers to come forward if they're having trouble making payments.

``In some parts of our nation, the foreclosure crisis is have a devastating impact on neighborhoods and communities,'' said Floyd Robinson, head of Bank of America's home-loan business. He stressed that ``homeowners can only take advantage of this program by taking action -- they must respond when they hear from us.''

Democratic Complaints

Paulson last week heard complaints from Democrats in Congress that the number of homeowners receiving relief so far has been insufficient. ``We are now in the midst of one of the most serious economic crises we have seen in recent years,'' Barney Frank, the Massachusetts Democrat who heads the House Financial Services Committee, said in Boston yesterday.

Federal Reserve officials project about 2 million homeowners face higher mortgage rates over the next two years as their loans reset higher. Economists at the Federal Deposit Insurance Corp. estimate foreclosures this year will be about 1 million more than average, a level that FDIC Chairman Sheila Bair has said ``is just too high.'' They average about 600,000 in a typical year.

``This is good, but we've seen this over and over again,'' said Kathleen Day, a spokeswoman for the Center for Responsible Lending in Washington. ``The fact that they keep having to roll out subsequent rescue plans every few weeks underscores that each plan is inadequate.''

 

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U.S. Stocks Rise After Buffett Offers to Help Bond Insurers

(Bloomberg) -- U.S. stocks rose for a second day, led by financial shares, on expectations Warren Buffett, the world's No. 1 investor, will help calm credit markets by offering to shore up bond insurers' finances.

Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three largest U.S. banks, climbed after Buffett said he's willing to take on $800 billion in municipal bond obligations in an interview with CNBC. Monsanto Co., the world's biggest seed producer, advanced for a third day on an increased profit forecast.

The Standard & Poor's 500 Index added 13.99 points, or 1 percent, to 1,353.12 at 12:29 p.m. in New York. The Dow Jones Industrial Average advanced 162.99, or 1.3 percent, to 12,403. The Nasdaq Composite Index climbed 15.24, or 0.7 percent, to 2,335.3. More than three stocks rose for every one that fell on the New York Stock Exchange. Shares in Europe and Asia also gained.

``It's another potential solution to some of the credit problems,'' Mark Bronzo, who helps manage $11 billion at Security Global Investors in Irvington, New York, said of Buffett's offer. ``That's why the markets are responding well.''

Concern that bond insurers don't have enough money to pay claims on the $2.4 trillion in assets they guarantee has contributed to a 7.4 percent drop in S&P 500 financial shares in 2008. MBIA Inc., the largest bond insurer, lost 80 percent of its value in the last year before today, and smaller rival Ambac Financial Group Inc. slumped 88 percent, on concern that the companies will lose their AAA credit ratings.

Buffett's Offer

Citigroup added 73 cents to $26.54. Bank of America rallied 66 cents to $42.80. JPMorgan climbed 46 cents to $43.81. Bear Stearns Cos., the fifth-biggest U.S. securities firm, increased 49 cents to $80.25.

Buffett said he offered to take on the municipal-bond liabilities of MBIA, Ambac Financial and FGIC Corp. Buffett's Berkshire Hathaway Inc. would provide so-called reinsurance for the debt, he said in an interview with CNBC television.

One company turned down the offer and the two others haven't responded, Buffett, chairman of Berkshire Hathaway Inc., told CNBC.

MBIA slipped 79 cents to $12.79. Ambac lost 29 cents to $10.19. Buffett's offer doesn't include the insurers' subprime- related obligations.

'Project Lifeline'

Financial shares also climbed on plans to help delinquent homeowners avoid foreclosure. Bank of America, Citigroup and four other U.S. lenders announced a plan to offer a 30-day freeze on home foreclosures while loan modifications are considered. Treasury Secretary Henry Paulson and U.S. Housing and Urban Development Secretary Alphonso Jackson said today at a news conference in Washington that ``Project Lifeline'' would help stabilize communities disrupted by mortgage defaults.

Monsanto rallied $3.27, or 2.9 percent, to $117.30 after raising its 2008 profit forecast on higher demand for weed killer and genetically modified corn and soybeans. Profit in the year ending Aug. 31 will increase to $2.70 to $2.80 a share, 20 cents above the range of a Jan. 3 forecast.

Schlumberger Ltd. advanced $2.57 to $83.06 after Bear Stearns raised its recommendation on the world's largest oilfield-services provider to ``outperform'' from ``peer perform,'' saying the company's offshore drilling and exploration make it ``well positioned for the next phase of the oilfield service business cycle.''

Schering-Plough

Schering-Plough Corp. gained $1.16 to $21.78. The maker of Vytorin and Zetia cholesterol pills reported fourth-quarter profit, excluding some items, of 52 cents a share, beating the 27-cent average estimate of 17 analysts surveyed by Bloomberg.

General Motors Corp., the world's largest automaker, gained after reporting an adjusted fourth-quarter profit, not counting costs and gains the company considers one-time items, of 8 cents a share. On that basis, analysts estimated a loss of 64 cents. GM's net loss in the quarter was $722 million.

The Russell 2000 Index, a benchmark for companies with a median market value of $589 million, gained 9.80, or 1.4 percent, to 709.55, led by GMH Communities Trust. The provider of housing to students and the military surged the most since its initial public offering in 2004 after agreeing to be bought in two transactions for a total of $787 million. GMH added $3.13, or 56 percent, to $8.72.

NxStage Medical Inc. fell the most since its 2005 initial public offering, dropping $3.30, or 26 percent, to $9.45. The maker of portable dialysis systems said it expects a loss of as much as $1.52 a share in 2008, wider than the $1.06 loss estimated by analysts in a Bloomberg survey.

World Wrestling Entertainment

World Wrestling Entertainment Inc. climbed $1.16, or 7.6 percent, to $16.47. The producer of television's ``WWE Friday Night SmackDown'' reported fourth-quarter revenue and profit that was higher than the average analyst estimate as video sales and ticket prices increased.

 

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BNP Paribas not planning SocGen bid: source

(Reuters) - French bank BNP Paribas (BNPP.PA: Quote, Profile, Research) is not preparing a hostile takeover bid for embattled rival Societe Generale (SOGN.PA: Quote, Profile, Research) but could be interested in a friendly deal, a source familiar with the bank's thinking said on Monday.

 

A French financial newsletter report on Monday that BNP was preparing a 93-euros-a-share offer for SocGen was "total rubbish", the source said.

 

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IMF sees sharp U.S. slowdown

(Reuters) - Economic slowdown in the United States will be significant and will last for some time, the head of the International Monetary Fund said on Monday, calling for a coordinated response to financial turmoil around the world.

While it was unclear how long the crisis facing international banks over subprime losses would last, complex financial links between regions may mean emerging economies could also be hit if the situation worsened, IMF Managing Director Dominique Strauss-Kahn said in a speech.

Uncertainties facing markets and policymakers included a possible worsening of the U.S. housing market, which would hurt consumption, and any more disclosures from European banks on losses resulting from the market turbulence.

"The problem is today we have unknown unknowns," he said at the start of a three-day visit to India.

Last month, the IMF cut its forecast for world growth this year in the face of continued stress in global credit markets, and warned that economic activity could slow even further.

The IMF chief said the main reasons for the revision were the weak growth outlook in the United States and Europe.

 

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Turkey Finds Growth Boom Hazardous as Unlicensed Kill

 (Bloomberg) -- An explosion at an illegal fireworks factory in Istanbul on Jan. 31 sent bloodied survivors running for safety as bodies littered the street outside.

``One of them had his head smashed; I saw his brain,'' said Mustafa Guvenbag, 32, who works in a nearby sock factory and lives close to the area. ``These people have been making bombs and they are killing us. Someone has to stop them.''

The disaster, which killed 22 people and injured about 100, underscores the dangers of Turkey's unrestrained economic growth. Unlicensed businesses and those that employ unregistered workers account for almost half the country's economy, which expanded an average of 7 percent annually during the past five years, according to government estimates.

After the explosion, district Mayor Murat Aydin promised to do more to regulate businesses that have proliferated with little oversight. In the Davutpasa district, where the accident occurred, an estimated 20,000 factories have sprung up next door to homes and shops.

``We have been conducting very tight and serious inspections on such factories over the last few years, but this accident shows that we need to do more,'' Aydin said.

The destroyed factory was profiting from growing demand for sparklers and skyrockets. Increased incomes have spurred working- class families to set off fireworks at weddings and other celebrations, copying their rich neighbors.

Raining Metal

The disaster was caused by an explosion in a pressure boiler in a denim factory on the second floor of the building, Aydin said. The fire spread to the third and fourth floors, igniting materials used to make fireworks and causing a second, more powerful blast.

Metal and concrete debris rained down on an area 50 yards in diameter, blocking nearby roads and making it difficult for ambulances and aid workers to reach the scene. Most of the people killed were people on the streets outside, or workers in nearby buildings.

The fireworks plant was identified as unlicensed at the end of last year and ordered to submit a permit application, Aydin said. Inspectors who visited the site were told the factory produced plastic toys. The denim plant was also operating illegally and had been shut down by officials four times in the past, according to the mayor.

Municipalities have encouraged entrepreneurs to skirt licensing laws by repeatedly granting amnesties to businesses set up without planning permission and accepting bribes, said Tores Dincoz, a board member at the Chamber of Architects of Turkey.

800 Inspectors

``How did those explosives get there is one question, and how can the mayor claim his officials thought they were making plastic toys is another one,'' Dincoz said. ``If this is the way officials conduct inspections, I can't imagine the state of security in this country.''

Following the deaths, Labor Minister Faruk Celik ordered 800 inspectors to check all businesses in Istanbul to ensure they are being run legally.

Many factories in Davutpasa don't take basic safety precautions such as installing alarms or providing emergency exits and conducting regular machinery inspections, Aydin said. This is particularly dangerous in Davutpasa because a residential area sits about 100 yards away, separated from the plants by a gas station and a soccer field.

At least one-fifth of the area's factories are illegal, with many producing counterfeit money or bootleg raki, the national aniseed-flavored spirit, Referans newspaper reported today, citing municipal officials. More than 20 people died after being poisoned by fake raki in 2005.

 

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Wall Street Shareholders Suffer Losses Partners Never Imagined

(Bloomberg) -- Less than a decade after Wall Street's last major partnership went public, stockholders are paying the price for bankrolling the industry's expanding risk appetite.

Four of the five biggest U.S. securities firms lost about $83 billion of market value last year, almost 90 percent of their net income since 1999, data compiled by Bloomberg show. That cut the annual average return for Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos. during those nine years to 9.7 percent from 16.8 percent.

The private partnerships that once dominated Wall Street guarded their capital, used less leverage and limited their risk to trading blocks of stock for clients and shares of companies in mergers, said Roy Smith, a finance professor at New York University's Stern School of Business and a former partner at Goldman Sachs Group Inc. Since raising money from the public, many of the biggest firms have abandoned that caution.

``If you're betting with other peoples' money, you're more willing to take risk than if it's your own,'' said Anson Beard, 71, who retired from Morgan Stanley in 1994 after 17 years at the New York-based company, where he ran the equities division and helped with the initial public offering in 1986. ``You think differently if you're paid in cash and not in ownership. It's heads you win, tails you don't lose.''

Shareholders, stung by the securities industry's losses last year on subprime mortgage-backed bonds and leveraged loans, may be in for more pain.

Shrinking Fees

Morgan Stanley, Merrill, Lehman and Bear Stearns have lost between 3 percent and 19 percent of their value this year in New York Stock Exchange trading on concern that they may be forced to take more writedowns if bond insurers like MBIA Inc. and Ambac Financial Group Inc. are stripped of their top credit ratings. Revenue from structured credit and leveraged finance has dropped and demand for takeover advice and underwriting may dwindle as the U.S. economy slows, analysts say.

Even Goldman has faltered. New York-based Goldman, which went public in May 1999, evaded last year's market losses and reaped record earnings. This year, the biggest and most profitable securities firm has lost 13 percent in NYSE trading, while analysts predict earnings will drop as equity stakes in companies such as Beijing-based Industrial & Commercial Bank of China Ltd. lose value and investment-banking fees decline.

Merrill, which went public in 1971, outperformed the Standard & Poor's 500 Index in just five of the past 10 years. The largest U.S. brokerage paid more to employees last year than it collected in revenue. Morgan Stanley, public since 1986, beat the index in four of the past 10 years. Both New York-based companies diluted investors' stock last year when they sold stakes to foreign governments to shore up capital.

Other People's Money

``Shareholders share in the downside and not necessarily in the upside, that's the whole story,'' said John Gutfreund, 78, who ran Salomon Brothers in the 1980s when it was renowned for the size of its trading bets. ``It's OPM: Other People's Money.''

To be sure, the firms have been good investments over a longer period. Merrill rose at an average annual rate of 14.7 percent, including dividends, from 1980 through the end of 2007, according to data compiled by Bloomberg. Bear Stearns returned an average 15.2 percent since the end of 1985 and Lehman's average annual gain was 25.5 percent since it became a separately listed company at the end of 1994.

While none of the companies are more than one-third owned by employees today, senior executives typically receive at least half their pay in shares. At Merrill, top managers get 60 percent of their compensation in stock; they're required to keep three quarters of it each year and are prohibited from hedging it, according to the brokerage's proxy statement.

 

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GM Proves Demise to No. 2 Premature on Topping Toyota Overseas

(Bloomberg) -- Investors doubting General Motors Corp.'s comeback after a third straight annual loss should count the 2,500 crates of partially built Chevrolets leaving South Korea every day for plants in Poland and China.

With about six of every 10 new GM vehicles now sold overseas as U.S. production shrinks, the Detroit-based company fended off Toyota Motor Corp. last year and preserved its 77- year reign as the world's biggest automaker. Rising output abroad and a cost-saving labor contract may push profit to $12.75 a share by 2010, said Burnham Securities Inc. analyst David Healy.

 

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Societe Generale Plans Offer to Raise EU5.5 Billion

(Bloomberg) -- Societe Generale SA plans to raise 5.5 billion euros ($8 billion) by selling stock at a lower price than analysts estimated to replenish capital after the worst trading loss in banking history.

France's second-biggest bank will sell shares in a rights offer at 47.50 euros each, or 39 percent less than the Feb. 8 closing price, according to a statement today. Analysts had expected a discount of as much as 30 percent. Existing shareholders can buy one share for every four held.

Societe Generale fell as much as 6.3 percent in Paris trading to 72.83 euros. The offer comes less than three weeks after the bank said bets by Jerome Kerviel had led to a 4.9 billion-euro trading loss. Societe Generale said today that net income last year fell to 947 million euros from 5.2 billion euros in 2006.

``This rights issue is a matter of life or death,'' said Pierre Flabbee, an analyst at Kepler Equities in Paris, who has a ``reduce'' rating on the stock. The discount ``doesn't show great confidence in selling the shares,'' he said.

Societe Generale fell 2.60 euros, or 3.4 percent, to 75.12 euros in Paris trading as of 12:50 a.m. The shares have declined 24 percent this year, giving the company a market value of 35 billion euros.

The Paris-based bank said the rights offer will increase its Tier 1 capital ratio, a measure of its ability to cover unexpected losses, from 6.6 percent at the end of December to 8 percent. It will also use the cash for ``sustained and balanced growth,'' maintaining lending in France and expanding in Russia, Eastern and Central Europe, the Mediterranean, India and Brazil.

Earnings Fall

The bank announced the trading loss and 2.05 billion euros of writedowns linked to risky U.S. mortgages on Jan. 24, the same day it estimated that 2007 profit would be between 600 million and 800 million euros. It raised that forecast today after lifting its debt valuation.

Operating income, including the losses that Societe Generale blames on Kerviel, fell to 1.8 billion euros from 8 billion euros in 2006. Today's figures aren't audited. Full results will be announced Feb. 21.

``The net profit figure is anecdotal compared with what's at stake,'' said Benoit de Broissia, a fund manager at Richelieu Finance in Paris, which owns Societe Generale shares.

Societe Generale said the corporate and investment banking units lost 2.22 billion euros in 2007, down from a 2.34 billion euro profit the previous year. It reported gains from private banking and its French and overseas retail-banking networks.

Bouton Stays

Although Societe Generale Chairman Daniel Bouton offered to resign after the trading loss was announced, the board has twice voted to retain him. The 57-year-old, who has been chairman or chief executive officer since 1993, will only step down once the share sale and trading scandal are resolved, said Axel Pierron, Paris-based senior analyst at Celent, a financial research firm.

``They will wait until there is some return to normalcy,'' he said. ``Finding someone with Bouton's experience isn't easy.''

Societe Generale has become a takeover candidate. BNP Paribas SA, France's largest bank, has said it's considering an offer, while the country's No. 3 lender, Credit Agricole SA, appointed advisers to study a bid, people involved in the talks said. While the government has said it wants Societe Generale to remain French, it has no legal means to block a takeover.

`Staying Independent'

The increase in borrowing costs in the past six months might deter bidders from financing an offer, Pierron said.

``If this had happened a year ago it might have been different, but the lack of liquidity in the market may help Societe Generale stay independent,'' Pierron said. ``With the rights issue, it certainly has the means to stay independent.''

Societe Generale said it's aiming for an improvement in gross operating profit of at least 1 billion euros by 2010 and repeated that it will pay a dividend of 45 percent of net income from 2008 to 2010. The ``key strengths and profit-making capacities remain intact,'' it said.

The rights will trade separately on Euronext during the subscription period from Feb. 21 to Feb. 29. The new shares will carry dividend rights from the start of 2008. Each right is worth 5.9 euros, the bank estimated.

``We're going to participate,'' said Neuflize Banque fund manager Emmanuel Soupre, who owns Societe Generale shares. ``Societe Generale's client portfolio remains of high quality.''

The offering, which is guaranteed by investment banks, is lead managed by JPMorgan Chase & Co., Morgan Stanley and Societe Generale's own investment bank. Credit Suisse Group and Merrill Lynch & Co. are co-book runners.

 

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PepsiCo 4th-quarter profit falls

(Reuters) - PepsiCo Inc (PEP.N: Quote, Profile, Research) reported lower quarterly profit on Thursday, hurt by a higher tax rate and a decline in sales volume of carbonated soft drinks.

The company, which makes Pepsi Cola, Frito Lay snacks and Quaker oatmeal, said net income for the fourth quarter ended on December 29 was $1.26 billion, or 77 cents per share, compared with $1.83 billion, or $1.09 per share, a year earlier.

Excluding restructuring charges and tax items, the company earned 80 cents per share.

Last month Pepsi Bottling Group Inc (PBG.N: Quote, Profile, Research), the world's largest bottler of Pepsi drinks, reported flat sales volume in the United States and weaker sales of refrigerated drinks, sold at convenience stores and gas stations.

 

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Children's Place ex-CEO says could bid for company

(Reuters) - Children's Place Retail Stores Inc (PLCE.O: Quote, Profile, Research) former Chief Executive Ezra Dabah said on Thursday he was confident he could make a bid to buy the company for $24 a share, sending its shares up 18 percent in pre-market trading.

The $24 price would represent a 35 percent premium to the closing price of Children's Place shares on Wednesday. Dabah said he had received interest from private equity firm Golden Gate Capital to be a participant in the deal.

Dabah, who said in a filing to the Securities and Exchange Commission that he owns 17.2 percent of the children's clothing retailer's shares, resigned as CEO last September after an internal probe found he did not comply with the company's securities-trading policies.

The SEC filing comes the same day that Children's Place said its sales at stores open at least a year rose a better-than-expected 6 percent in January.

Wall Street on average had been expecting a same-store sales gain of 2.5 percent, according to Reuters Estimates.

Same-store sales rose 9 percent at the Children's Place brand and 2 percent at the company's Disney Store chain.

Children's Place also said it has been notified by Nasdaq that its stock was subject to delisting because of its failure to hold its fiscal 2006 annual meeting by February 3.

Last September, the company said its board was evaluating strategic options -- including a potential reorganization or an outright sale.

 

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Retailers struggle through dismal January

(Reuters) - Consumers held on to their cash and gift cards longer than usual and ignored widespread discounting in January, resulting in disappointing sales at many retailers, most notably industry leader Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research).

The world's largest retailer reported a 0.5 percent rise in January same-store sales, falling short of the 2 percent rise that analysts expected. Target Corp (TGT.N: Quote, Profile, Research), the No. 2 U.S. retailer posted a 1.1 percent drop in same-store sales, deeper than the 0.4 percent fall expected by Wall Street.

Wal-Mart said gift-card redemptions fell short of expectations, as consumers held on longer to their gift cards. Those who did, used gift cards for necessities like food and consumables, instead of higher margin discretionary items, the company said.

Reflecting the weakening economy and the tendency to trade down in tough times, warehouse retailers Costco Wholesale Corp (COST.O: Quote, Profile, Research) and BJ's Wholesale Club (BJ.N: Quote, Profile, Research) both reported better-than-expected January sales, boosted by the demand for gasoline. Costco also cited strength in its deli, candy, small appliance and automotive businesses.

January's sales data follow a disappointing holiday season for retailers and come amid mounting fears that the U.S. economy could be tipping into recession, as consumers faced with higher fuel and food costs and a crumbling housing markets cut back on spending.

"January has been no different," said Ken Perkins, president of research firm Retail Metrics in a note on Wednesday. "Given the difficult economic backdrop retailers/ consumers are facing, expectations have still been pared to lower levels despite starting out at very modest initial projections."

 

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Euro Declines as Trichet Says U.S. Slowdown May Hurt Europe

(Bloomberg) -- The euro fell for a third day against the yen and dollar as European Central Bank President Jean-Claude Trichet said the slowdown in the U.S. may curtail economic growth in Europe, signaling lower interest rates this year.

The euro extended its drop against the yen this year to 5.3 percent and erased gains against the dollar after the ECB left interest rates unchanged today. Investors have raised bets the ECB will cut interest rates by mid-year even as policy makers say inflation is accelerating. The pound fell after the Bank of England lowered rates today.

``The market is being disappointed by the ECB's stubbornness and is selling the euro,'' said Toshi Honda, a currency strategist in London at Mizuho Corporate Bank Ltd., a unit of Japan's second-biggest bank by assets. ``The ECB will have to concede to the market eventually.'' The euro may fall to $1.40 by the middle of the year, he said.

The currency dropped to 154.49 yen as of 2:14 p.m. in London, from 155.88 yesterday in New York. It declined against the dollar to $1.4523 from $1.4632, losing 2.1 percent in the past three days.

Against the pound, it rose to 74.66 pence from 74.59 pence, after policy makers at Britain's central bank cut the benchmark interest rate by a quarter-point to 5.25 percent, citing slowing global growth and tighter credit. All but two of 61 economists surveyed by Bloomberg predicted the decision.

Carry Trades

The yen gained against all of the 16 most-active currencies as European stocks dropped and the risk of the region's companies defaulting on their bonds rose, increasing demand for safer assets and reducing appetite for so-called carry trades.

The yen traded at 106.39 against the dollar, from 106.54 yesterday. It gained the most versus the rand, rising 1.6 percent to 13.63. It climbed 0.4 percent to 95.01 against the Australian dollar.

The Dow Jones Euro Stoxx 50, a benchmark for the 15 nations that share the euro, declined 2.2 percent today, after slumping to the lowest since Jan. 24 yesterday. The Morgan Stanley MSCI World Index fell 0.9 percent.

In carry trades, investors get funds in a country with low borrowing costs and invest in one with higher interest rates, earning the spread between the two. Higher currency volatility may discourage carry trades.

Implied volatility for one-month options on dollar-yen was 12.4 percent today and has declined from 12.8 percent a week ago. Dealers quote implied volatility, a gauge of expectations for currency moves, as part of pricing options.

Citigroup Idea

Investors should sell the New Zealand dollar and buy the Swiss franc to hedge against currency losses on high-yielding assets and reduce their carry trades between the two countries, said Citigroup Inc., the largest U.S. bank by assets.

The New Zealand dollar will be among the hardest hit currencies if global economic growth slows, according to a report from a Citigroup research team led by Todd Elmer, a currency strategist in New York.

The ECB left its main refinancing rate at a six-year high of 4 percent, in line with the forecasts of all 56 economists surveyed by Bloomberg.

Trichet, speaking in a press conference in Frankfurt, said countering inflation remains the key for the central bank. Inflation in the 15 nations sharing the euro reached a 14- year high in January of 3.1 percent, overshooting the bank's 2 percent limit for a fifth month.

 

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Biogen Fourth-Quarter Net Rises 85 Percent on Tysabri

 (Bloomberg) -- Biogen Idec Inc., the world's largest maker of multiple sclerosis drugs, said fourth-quarter profit rose 85 percent on sales of its fastest-growing product, the MS medicine Tysabri.

Net income rose to $201.2 million, or 67 cents a share, from $108.6 million, or 32 cents, a year earlier, the Cambridge, Massachusetts-based company said today in a statement. Profit excluding certain costs beat analysts' estimates by 9 cents a share.

Revenue rose 26 percent from a year earlier to $893 million as worldwide sales of Tysabri quadrupled. Biogen said it expects 100,000 patients will be taking Tysabri by the end of 2010, which could mean $2.8 billion in annual sales at current prices, according to analysts. The MS drug was cleared in the U.S. last month for an expanded use, Crohn's disease, an inflammation of the intestines.

``It was a very good quarter, they deserve credit,'' said Michael King, an analyst with Rodman & Renshaw in New York, in a telephone interview today.

Biogen fell $2.77 cents, or 4.4 percent, to $60.52 yesterday in Nasdaq Stock Market composite trading. The stock has gained 23.7 percent in the 12 months before today.

Tysabri generated $129 million in worldwide sales in the quarter, up from $30 million a year earlier. Worldwide sales are split with Biogen's partner, Irish drugmaker Elan Corp. Biogen recorded $90 million of the Tysabri sales in the fourth quarter, the company said. About 21,000 patients worldwide were taking the drug at the end of December.

Reintroduced

Biogen and Elan pulled the drug from the market in February 2005 after two patients developed rare, fatal brain infections. A month later, the companies disclosed a third case of the disorder, progressive multifocal leukoencephalopathy. The drug was reintroduced in July 2006 after the U.S. Food and Drug Administration decided the benefits for slowing MS relapses outweighed the risk.

In December, Biogen lost more than $5 billion in market value when it abandoned a plan to sell the company, saying it didn't receive any offers. Billionaire investor Carl Icahn criticized the process last week as ``flawed,'' and nominated three people to the company's 12-member board.

Biogen reiterated its forecast annual revenue growth of 15 to 20 percent in 2008, driven by increasing prescriptions of Tysabri. Profit excluding certain costs will be $3.20 to $3.35 a share, said Chief Executive Officer James Mullen, at an investor conference in San Francisco Jan. 7.

 

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U.S. Stock Futures Rise on Productivity Report, Disney Earnings

(Bloomberg) -- U.S. stock futures rose, pointing to a rebound from the market's biggest drop in 11 months, after worker productivity grew more than forecast and earnings at Walt Disney Co. and JDS Uniphase Corp. topped analysts' estimates.

Walt Disney, the second-largest U.S. media company, gained on higher revenue from cable networks and theme parks. JDS Uniphase rallied after the maker of telecommunications testing equipment said it isn't being affected by the slowdown in the U.S. economy. Newmont Mining Corp. led metal producers higher as BHP Billiton Ltd. raised its bid for Rio Tinto Group.

``Disney and Uniphase have shown that companies are still capable of good results, despite recent carnage in the markets,'' said Jonathan Monk, a fund manager at Aerion Fund Management in London, who helps oversee about $23 billion.

Standard & Poor's 500 Index futures expiring in March climbed 4.2 to 1,347.4 at 8:48 a.m. in New York. Dow Jones Industrial Average futures gained 32 to 12,352. Nasdaq-100 Index futures increased 6 to 1,791. European and Asian stocks fell.

Fourth-quarter earnings have declined 23 percent on average at the 316 companies in the S&P 500 that reported results so far, according to data compiled by Bloomberg. Excluding financial companies, profit growth averaged 18 percent.

Productivity, a measure of employee efficiency, rose at an annual rate of 1.8 percent in the fourth quarter, the Labor Department said. Economists in a Bloomberg News survey projected a 0.5 percent gain. A gauge of labor costs climbed less than forecast.

Disney, JDS Uniphase

Walt Disney jumped $1.78 to $31.85. Net income in the first quarter was 63 cents a share, beating the 52 cent average estimate of 19 analysts compiled by Bloomberg. Sales rose 9.1 percent to $10.45 billion, surpassing the $10.1 billion average estimate.

JDS Uniphase increased $2.14 to $12.30. Profit for the first quarter, excluding costs such as stock-based compensation, was 22 cents a share, exceeding the 11 cent average estimate of analysts in a Bloomberg survey.

Newmont, Barrick Gold Corp., Freeport-McMoRan Copper & Gold Inc. and Goldcorp Inc. gained after Australia's BHP Billiton, the world's largest miner, raised its hostile bid for the U.K.'s Rio Tinto Group to $147 billion. Aluminum Corp. of China, China's biggest aluminum company, and Alcoa Inc. last week bought a stake in Rio to block the takeover attempt, which was announced in November.

Newmont climbed 90 cents to $50.38. Barrick rose 65 cents to $48.38. Goldcorp added 83 cents to $35.43. Freeport-McMoRan advanced $1.09, or 1.3 percent, to $87.

 

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Recovery for SIVs unlikely given Basel II rules-panel

(Reuters) - The troubled market for so-called structured investment vehicles (SIVs) is effectively dead and likely to stay that way given new international rules for matching banks' reserves to their risks, panelists at a bond industry conference said on Tuesday.

The new Basel II international accord, to be applied to U.S. banks with total assets of $250 billion or more, is likely to make investing through off-balance sheet SIVs less attractive for banks, which are the main sponsors of such vehicles, speakers at the American Securitization Forum conference in Las Vegas said.

SIVs are specialized funds that raise cash by issuing short-term debt and invest the proceeds in longer-dated and higher-yielding assets, including U.S. mortgages. The funds pocket the difference between what they make on their investments and the interest they pay out to investors.

The vehicles have been unable to fund themselves normally for many months amid the U.S. credit crisis and the market value of their investment portfolios has plummeted, prompting ratings downgrades and mass restructuring efforts.

But the market for SIVs may have eventually contracted anyway given the onset of Basel II, which has been seen as offering a way for banks to lower their capital reserves by linking reserve requirements to the credit quality of investments.

 

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Chrysler and Plastech reach interim deal

(Reuters) - Chrysler LLC and bankrupt supplier Plastech Engineered Products Inc reached an interim deal that would allow the U.S. automaker to resume production at four idled plants and avoid closing all of its assembly operations, a lawyer for Plastech said on Tuesday.

Gregg Galardi, speaking at a hearing in U.S. Bankruptcy Court in Detroit, told the judge a deal has been reached that runs through February 15.

Chrysler closed four assembly plants on Monday and had said more shutdowns could quickly follow because it was no longer receiving parts from Plastech.

"We have made significant progress in a number of areas," said Galardi, who was flanked by Chrysler attorney Michael Hammer.

Galardi said the deal had been presented to Plastech creditors.

"Some are happy, some are not so happy," but all parties had agreed to it, he said.

He said Plastech would resume production of Chrysler parts during the second or third shift at the company's plants on Tuesday. Chrysler said it would resume production at its affected plants during the second shift on Tuesday.

 

 

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If recession hits, dollar and Wall St may fare best

(Reuters) - Sticking with equities and buying dollars might be the best way to profit if a U.S. economic recession materializes, as investors may have already discounted the gloomiest scenario for the world's largest economy.

As the chances of a U.S. recession, typically defined as two quarters of economic contraction, increased late last year, investors executed classic investment strategies associated with recession risks -- selling stocks and buying government bonds.

World stocks, measured by MSCI, are down 15 percent from November's record highs. the S&P 500 main U.S. stock index .SPX shed more than 11 percent from all-time highs while benchmark U.S. yields have hit 4-1/2 year lows.

"The text book trade for recession is to sell equities and buy bonds. Sell cyclical and IT and buy pharmaceuticals and other sectors negatively correlated with the economic cycle. But this has been already done," said Luca Paolini, strategist at Credit Suisse in London.

"This time, in terms of equities versus bonds, the valuation story is compelling for equities. So overweighting equities will prove profitable."

 

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Pfizer, Schering HIV Drugs May Fail On Incorrect Test

(Bloomberg) -- Pfizer Inc.'s new AIDS drug and a similar pill from Schering-Plough Corp. may stop working in some patients because a test identifying who should get the medicines is sometimes inaccurate.

The pills, made by Pfizer, of New York, and Schering, based in Kenilworth, New Jersey, block a chemical entryway known as CCR5 that the virus uses to infect cells. In about 10 percent of cases, a Monogram Biosciences Inc. test incorrectly identifies patients who will benefit from the drug, scientists said this week at an AIDS meeting.

New research on Pfizer's Selzentry and Schering's vicriviroc, as well as the test's reliability, will be presented today at the Conference on Retroviruses and Opportunistic Infections in Boston. While the pills promise to fight HIV in patients who can't take older medicines, the new drugs' effectiveness depends on accurate screening.

``The test is wrong in about 8 to 10 percent of patients initially screened to see if they are candidates for a CCR5 antagonist,'' David Hardy, director of the division of infectious disease at Cedars Sinai Medical Center in Los Angeles, said in a telephone interview. ``We're waiting to see if the next-generation test from Monogram will eliminate the errors.''

Selzentry was cleared in August for patients who stopped responding to older medicines. It's the only approved CCR5 inhibitor, the first new family of AIDS medicines in a decade.

Pfizer didn't report revenue for Selzentry last year. Analysts have projected the pill could have peak annual sales of about $300 million. Vicriviroc, a similar drug, is in the third and final stage of testing usually required for U.S. regulatory approval.

90 Percent

As many as 90 percent of previously untreated HIV patients will have a strain of the virus that enters healthy cells through the CCR5 doorway, Howard Mayer, executive director of clinical research and development for Pfizer, said in an interview at the meeting in Boston.

After five years of HIV infection, about half of patients still have that strain, Mayer said. By then, most patients have higher levels of another virus version known as X4 that infects cells through a different route unaffected by drugs such as Selzentry and vicriviroc.

A new test to better determine who can benefit from the Pfizer and Schering drugs is about six months from reaching the U.S. market, Chris Petropoulos, chief scientific officer for South San Francisco-based Monogram, said in a telephone interview.

 

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