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Brazilian Real Nears 9-Year High, EU Slaps $1.35 Billion Fine on Microsoft; Demand Drops For Durable Goods; Goldman Slashes Stake in Ambac; Business Borrowing Big in Europe; Citi's Pandit Taps New CRO; Hedge Funds Bullish on Merrill; Airline Merger Stalls
- The Brazilian Real is nearing a nine-year high, boosted by commodity prices rise and the falling U.S. dollar, Bloomberg reported. It rose to 1.6731 per dollar yesterday (Wednesday) morning, its highest since its 1.6734 per dollar value in May 1999. Since Feb. 15, the real is up 4.8%, making it the largest gainer against the dollar among the 16 most traded currencies in the world.
- The European Union slapped Microsoft Corp. (MSFT) with a record $1.35 billion fine for antitrust violations, Reuters reported
. All totaled, the EU has fined Microsoft $2.54 billion for abusing its 95% dominance of PC operation systems. The recent sanction was for using high prices to discourage software competition.
- New orders for durable goods manufactured in the United States fell by 5.3% in January, the biggest drop in five months, the Commerce Department reported. Analysts said the report fueled further speculation about the onset of a recession.
- Eurozone borrowing by business grew at a fresh record rate in January, the Financial Times reported. Lending to non-financial corporations increased at an annual rate of 14.6% last month – the fastest since 1999, according to European Central Bank figures. This adds to the evidence that the 15-country region is averting any kind of credit catastrophe in the wake of global financial turmoil and a U.S. credit crunch.
- Citigroup Inc. (C) announced in a statement yesterday (Wednesday) that Brian Leach will assume the role of chief risk officer. Leach replaces 33-year bank veteran Jorge Bermudez, who held the post just three short months. "Taking intelligent risk is the core of our business. As our industry grapples with one of the most difficult periods in market history, we at Citi are moving aggressively to transform our risk management culture into a significant competitive advantage," Chief Executive Officer Vikram Pandit said. In his new role, Leach will report directly to Pandit.
- Two hedge funds acquired shares of Merrill Lynch & Co. Inc. (MER) according to a recent regulatory filing with the Securities and Exchange Commission, Bloomberg News reported. In addition to sovereign wealth funds Temasek Holdings Pte., Korea Investment Corp. and the Kuwait Investment Authority, Eton Park Capital Management LP [managed by Eric Mindich] and DiMaio Ahmad Capital LLC [managed by Jack DiMaio] bought shares as part of two private placements in December and January with a combined value of $12.8 billion.
- Continued disagreements between respective pilots' unions have stalled merger talks between Delta Air Lines Inc. (DAL) and Northwest Airlines Corp. (NWA). If the pilots don't come to an agreement soon, the carriers will have to move to arbitration or move forward without pilot consent. The delay is taking a toll on the airlines' stock. Delta declined 5.72%, or 91 cents, to close at $15.00 yesterday (Wednesday). The same day, Northwest shares slumped 5.68%, or 91 cents, to close at $15.10.