Japanese currency surges to 13-year high against greenback following U.S.

Dollar falls against yen, euro.Central bank slashing rates...

The U.S. dollar fell to a 13-year low against the yen and weakened against the euro Wednesday, a day after the Federal Reserve cut its key short-term interest rates to historic lows.
The Japanese currency reached a 13-year high against the dollar Wednesday, falling to ¥87.23 from ¥88.95 late Tuesday. The last time the yen was this strong was July 1995. Since mid-September, the yen has gained nearly 15% against the dollar.
The Bank of Japan will make an interest rate announcement on Friday. Many of the bank's watchers expect it to hold the rate firm at 0.3%, according to Steve Malyon, currency strategist at Scotia Capital. Japan has the second-lowest interest rate among the world's major economies.
The euro jumped 3.8 cents against the dollar Wednesday, to $1.4418 from $1.4038 late Tuesday. The last time the euro was this strong against the dollar was in late September. Since then, the dollar has gained 2.57% against the 15-nation currency.
The European Central Bank's next meeting is set for January, and investors are watching to see whether the bank will keep its rate firm after slashing it to 2.5% earlier this month.
The dollar made a slight gain Wednesday against the pound, on news of a high level of U.K. jobless claims and that the Bank of England held back when it lowered interest rates to 1 percentage point at its Dec. 4. meeting, fearing a bolder move could pose a risk to the economy.
The rate holds at 2%, the lowest in the bank's history, and it is expected to be lowered once again when policymakers meet in January, according to a note Malyon wrote to investors.
The pound dropped to $1.5534 from $1.5581 late Tuesday. The dollar has gained 14.3% against sterling since mid-September.
Concerns ahead
On Tuesday, the U.S. central bank cut its federal funds rate from 1% to a range between 0% and 0.25%, the bank's 10th cut since September 2007.
While interest rate cuts are the Federal Reserve's main tool for boosting economic activity, many currency analysts worry about the long-term effects of lower interest rates on the dollar.
Cutting interest rates to such historic lows could drive up inflation and reduce the appeal of many assets that are priced in dollars.
Meanwhile, the dollar's status as the world's reserve currency is being hampered by lower rates and the cost of the government's bailouts, according to Ashraf Laidi, currency strategist at CMC Markets.
In addition to aggressive rate cuts, the government has been forced to essentially print more money to help pay for several new initiatives aimed at aiding the weak economy. Flooding the economy with cash has helped ease the credit crunch, but it has also worked to undermine the dollar's strength, Laidi said.
Having interest rates approaching 0% gives rise to "ominous prospects for the greenback once global economic stability starts to build up," Laidi said.
Economy
Oil sank to a 4 1/2-year low after OPEC reported it will cut production in a bid to prop up prices driven lower by global economic downturn.

Track 17 major currencies
U.S. crude for January delivery sank $3.54 to settle at $40.06 a barrel on the New York Mercantile Exchange, the lowest settlement price since July 13, 2004, when oil settled at $39.44.
Kiss the dollar rally goodbyeMorgan Stanley suffers $2.3 billion lossOil rises as

HD DVD supporters and vendors pause and regroup

.

Warner Bros. Entertainment unit will release its high-definition DVDs exclusively using Sony's Blu-ray DVD format (R) as of June 1 this year, according to U.S. media reports Saturday

Warner's Blu-ray Endorsement Boosts the Buzz at CES
HD DVD supporters and vendors pause and regroup after Warner's surprise vote in the format war.
The decision by Warner Bros. to drop HD DVD in favor of Blu-ray Disc for high-definition movies has set the electronics industry abuzz. Announced on the eve of the Consumer Electronics Show, the move put a single question in the minds of thousands of industry-insiders heading to the show in Las Vegas: Could the high-definition format wars be over?

Long Skirmish

Since both formats launched they have been locked in a battle that pitted some of the industry's biggest consumer electronics companies against each other. Backing Blu-ray Disc has been Sony, Panasonic and Samsung, while HD DVD's main supporters have been Toshiba, Microsoft and Intel.

The battle also divided Hollywood and left consumers with a difficult choice: their favorite movies were likely split between the two formats and there was a risk the player they bought would become irrelevant. As a result consumers kept away from the formats and sales have been sluggish.

Warner's decision will give Blu-ray Disc an advantage in terms of content. With the move, five of the big seven Hollywood studios now back Blu-ray Disc with only two, Paramount and Universal, backing HD DVD.

The Warner announcement certainly put the HD DVD Promotion Group's CES plans in disarray. Within hours of the announcement, the group cancelled its scheduled Sunday-evening news conference and subsequent media interviews at CES.

Consumer Benefit?
"They're definitely regrouping and considering their options at the moment, this could be extremely important," said Tom Coughlin, a storage analyst at Coughlin Associates. "This could be the beginning of a major pivotal turning point in the high-def format war, which if we could define the format which is going to win would be extremely important for the industry because this would free up consumers to start making decisions on the purchase of their systems."

Better sales would help consumer electronics manufacturers increase production and that would in turn lead to lower prices, said Coughlin. Those lower prices would then lead to better sales and that would help the entire industry, he said.

Warner touched on the format battle's impact on the consumer electronics industry in a statement announcing its move.

"A two-format landscape has led to consumer confusion and indifference toward high definition, which has kept the technology from reaching mass adoption and becoming the important revenue stream that it can be for the industry," said Kevin Tsujihara, president of Warner's home entertainment group in a statement.

Whether or not the fight is really over remains to be seen.

Toshiba said it was "quite surprised" by the announcement from Warner "despite the fact that there are various contracts in place between our companies concerning the support of HD DVD."

"We will assess the potential impact of this announcement with the other HD DVD partner companies and evaluate potential next steps. We remain firm in our belief that HD DVD is the format best suited to the wants and needs of the consumer," Toshiba said in a statement.

Just the Latest Win
For some, the Warner decision marks the end of the format battle.

"I think the war is over. HD DVD has lost. It really is game-over for Toshiba and the other vendors," said Robin Harris, an analyst with Data Mobility Group. "The basic issue is not technology. It's about distribution, it's about marketing, it's about content and Blu-ray has been winning the content war for sometime. I don't know why [Toshiba] keeps pouring money into it, it's time to stop."

Harris credited Sony's inclusion of Blu-ray Disc in the PlayStation 3 with being one of the instrumental moves in winning the fight for Blu-ray Disc.

"I think Sony's brilliant move and one of the few they have made in this effort is putting Blu-ray into PS3," he said. "Even though PS3 hasn't sold so well in the console wars, in terms of being a platform for Blu-ray distribution it's been a success for them and I think that's what really put Blu-ray over the top."

The praise comes as Sony has finally started to see PlayStation 3 sales pick-up after a year of sluggish sales. Ironically the company has been often criticized by analysts and the media for the inclusion of Blu-ray Disc in the device as that contributed to a high price that put many consumers off buying the high-def games console.

See PC World's ongoing coverage of the Consumer Electronics show at the CES InfoCenter.

Warner Bros. to release Blu-ray DVDs exclusively

Warner Bros. Entertainment unit will release its high-definition DVDs exclusively using Sony's Blu-ray DVD format as of June 1 this year, according to U.S. media reports Saturday.
Time Warner's Warner Bros., Hollywood's biggest seller of DVDs, represents about 18 to 20 percent of sales in the U.S. and was one of the few studios that backed both formats.

The news was announced by the company Friday afternoon, Warner, which had been supporting both formats, will drop HD DVD by the end of May in favor of Tokyo-based Sony Corp.'s Blu-ray.

"We believe that exclusively distributing in Blu-ray will further the potential for mass-market success and ultimately benefit retailers, producers, and most importantly, consumers," said Barry Meyer, chairman and CEO of Warner Bros.

This is seen as a major victory for Sony as it attempts to make Blu-ray the high-definition standard over rival Toshiba's HD-DVD format, according to the reports.

Warner Bros. studio, the second-largest in 2007 U.S. box-office receipts, joins Walt Disney Co. and News Corp.'s Fox in backing Blu-ray exclusively. The top studio, Viacom Inc.'s Paramount Pictures, uses HD DVD, as does DreamWorks Animation SKG Inc. and General Electric Co.'s Universal Pictures.

Some saw the move as an end to the war that has confused consumers about which standard to choose. Players using one standard are unable to play DVDs made using the other standard.

"We expect HD DVD to 'die' a quick death, versus a prolonged format war," Pali Capital analyst Rich Greenfield said.

Blu-ray and HD DVD players read DVDs with a blue-violet laser to play videos in high-definition. Blu-ray discs are generally able to process data at a higher rate than HD.

Technorati : DVD, HD, news, technology, vendors

Macy's going to close Valley View Center store

Following a 34-year run, a Dallas Macy's store is among nine Macy's closing nationwide in light of slow sales, the company announced Friday.
The Macy's Valley View Center location, which employs 132, will go into sales-clearance mode on Jan. 13, and once it sells out of merchandise, its doors will close, said Macy's spokesman Ed Smith.
Macy’s Inc., the owner of its namesake chain and Bloomingdale’s, said Friday that it would close stores deemed to have inadequate sales and eliminate 899 jobs.
Macy’s will shut locations in Akron, Canton and North Randall, Ohio; Lake Charles, La.; Riverdale, Utah; Indianapolis; Oklahoma City; Houston; and Dallas. Final clearance sales will begin in the next few weeks, the retailer said.
The company will operate 815 Macy’s after shutting the stores, all of them locations the chain acquired when it bought May Department Stores in 2005, a spokesman, Jim Sluzewski, said. The retailer’s sales growth has been hurt by the former May stores, which were converted to the Macy’s name last year, analysts said.
“They are certainly muddling through, but not muddling through very well,” Patricia Edwards, a portfolio manager at Wentworth, Hauser & Violich in Seattle, said of the merger. “It’s a big bite to chew off, and these customers are used to different things.”
Former May shoppers want coupons and national brands, Ms. Edwards said, while Macy’s clients are accustomed to that chain’s own labels. She holds shares of retailers including Target.
Shares of Macy’s rose 44 cents, or 1.8 percent, to $25.48, on the New York Stock Exchange.
In a statement, Macy’s chief executive, Terry J. Lundgren, said: “While the decision to close stores is difficult, it is necessary that we do so selectively in locations with declining sales and where we have been unable to identify sufficient growth opportunities.”
The company, based in Cincinnati, opened 10 new stores and one furniture gallery in 2007. In 2008, it expects to open five stores, and has six to eight new locations planned for 2009.
Macy’s $11 billion acquisition of May made it the second-largest department store company after Sears Holdings. Macy’s converted more than 400 May locations, including Marshall Field’s and Hecht’s, to the Macy’s name, doubling the size of the chain, in September 2006. It operates 40 Bloomingdale’s stores.

Deal :Berkshire to Pay $4.5 Billion for Pritzkers' Marmon

Warren E. Buffett may be a choosy shopper, but when he sees a firm he likes, he moves fast.
After just two weeks of negotiations, Mr. Buffett, who has been looking for acquisitions on which to spend his company’s billions of dollars, snagged an industrial conglomerate in a deal announced Tuesday. The Pritzker family of Chicago will sell to Mr. Buffett’s firm, Berkshire Hathaway, a 60 percent stake in Marmon Holdings for $4.5 billion.
The deal would go a long way toward unwinding the business holdings of the Pritzkers, a process that started in 2001. For Mr. Buffett, the deal represents his largest acquisition outside the insurance industry and suggests that he is finally finding some deals he can get excited about.
Berkshire will acquire the remaining 40 percent of Marmon over the next five or six years at a price that will be based on the future earnings of the company. In 2006, Marmon posted revenue of $7 billion and profit of $1 billion from operations like wire and cable, railroad tank cars and water treatment systems.

Dec. 26 (Bloomberg) -- Billionaire Warren Buffett's Berkshire Hathaway Inc. will pay $4.5 billion for 60 percent of Marmon Holdings Inc., adding another family run company that prospered without shareholder demands for short-term profits.
Chicago's Pritzker family, which controls Global Hyatt Corp., built Marmon into a group with $7 billion in annual sales and 125 units including operations serving the railroad and energy industries. Operating income more than tripled from 2002 to 2007, Omaha, Nebraska-based Berkshire said in a statement yesterday.
Marmon has ``businesses that are fairly niche-oriented where they have dominant positions established over time,'' said Thomas Russo, who manages about $3.5 billion at Gardner Russo & Gardner in Lancaster, Pennsylvania and counts Berkshire as its largest holding. ``They have a history under the Pritzkers of being liberated from the quarterly earnings game.''
Buffett, 77, built Berkshire over four decades, buying out- of-favor stocks and manufacturers to transform a failing textile maker into a $210 billion holding company. His biggest investment last year was the $4 billion purchase of Iscar Metalworking Cos. from Israel's Wertheimer family.
Marmon is ``our kind of company,'' Buffett said in an interview with CNBC today. ``It's in some very basic businesses but good businesses.''
Berkshire, which had more than $45 billion in cash as of Sept. 30, is as prepared as it has ``ever been'' to buy a ``big business outright,'' Buffett told shareholders at an annual meeting in May. He's said he'd be willing to spend as much as $60 billion on the right company.
The Marmon acquisition is set to be completed in the first quarter of 2008, with Berkshire acquiring the remainder of the company by 2014 at a cost based on future earnings.
Trains, Cranes
Marmon employs 21,500 people, mostly in North America, the U.K., Europe and China, according to the company's Web site. Its businesses include a dozen companies that manufacture wire and cable products for energy and construction use.
The Chicago-based group also has a transportation-services operation that produces railroad cars and leases tank containers in China. Operating income was $794 million last year, according to the Web site.
The businesses ``are not prone to widespread technical obsolescence,'' Russo said. ``They would have a relationship with their suppliers and customers that give them an ongoing partnership.''
Berkshire had about 217,000 employees as of Dec. 31 in businesses ranging from auto insurer Geico Corp. and carpet manufacturer Shaw Industries to ice cream company International Dairy Queen Inc. and business-jet fleet operator NetJets Inc.
Largest Since 2005
The Marmon takeover is the largest announced by Buffett since 2005, when Berkshire's utility company agreed to buy PacifiCorp from Scottish Power Plc for $5.1 billion in cash and assume $4.3 billion in debt. Buffett has also been investing in railroads, disclosing in April that he purchased a $3 billion stake in Fort Worth, Texas-based Burlington Northern Santa Fe Corp., the second-largest railroad in the U.S. after Union Pacific Corp.
Buffett prefers buying companies outright rather than investing in stocks because ``that way he can control the reinvestment decisions,'' Russo said. ``He would have the appetite and the balance sheet to underwrite almost limitless investments through their operating entities.''
Marmon has an ``impressive record of growth and profitability,'' Buffett said in the statement. ``The decision to purchase and work out the details of this transaction was done without delay.''
Berkshire spokeswoman Jackie Wilson and Chief Financial Officer Marc Hamburg didn't return calls seeking comment. David Dees, a spokesman for Marmon, had no comment.
Pritzker Breakup
The Pritzker family has discussed breaking up its holdings since the 1999 death of Jay Pritzker, who began the hotel company in 1957 by buying the Hyatt House in Los Angeles. The family's investments range from a global credit-check company to a maker of artificial joints. Marmon was acquired in 1953 by Jay and his brother Robert, according to the statement.
``This transaction is being done in the context of the previously reported restructuring of our family business interests,'' Marmon Chairman Tom Pritzker said in the statement.
In August, the family said it would sell a minority stake in Global Hyatt to investors including Goldman Sachs Capital Partners for $1 billion. In 2006, the family agreed to sell snuff maker Conwood for $3.5 billion to Reynolds American Inc.
In January 2005, actress Liesel Pritzker and brother Matthew Pritzker, settled a $2 billion suit accusing Tom Pritzker and other relatives of cheating them out of their inheritance.
Inheritance Suit Settled
The siblings claimed their trust-fund assets were being transferred to accounts benefiting other relatives and the family foundation. Terms of the deal weren't disclosed.
Tom Pritzker was ranked by Forbes as the 117th wealthiest person in the U.S. with a net worth of $3 billion. Buffett was second with $52.4 billion, the magazine said.
Buffett will work with Tom Pritzker, Marmon Chief Executive Officer Frank Ptak and former CEO John Nichols over the next five to six years ``in continuing to build Marmon,'' Berkshire said in the statement.
Berkshire, which traded at $2,950 on Dec. 31, 1987, is poised to post its 17th annual gain in 20 years. It climbed $3,980 Dec. 24 to $137,980 in New York Stock Exchange composite trading. The stock is up 25 percent in 2007, outpacing the 5.5 percent gain for the Standard & Poor's 500 Index.
The company's largest purchase was the acquisition of General Re, the largest U.S. reinsurance company. The stock deal was valued at $16 billion when it was completed in 1998.
`Simple' Businesses
Buffett's investment criteria include companies with ``good returns on equity,'' little or no debt, ``simple'' businesses that he can understand, and consistent earnings, he said in Berkshire's latest annual report. Buffett doesn't participate in auctions for companies and can tell prospective sellers within five minutes of an offer if he is interested in completing a deal, he said in the report on March 1.
The Marmon acquisition ``was done just the way Jay would have liked,'' Buffett said in the statement. ``No consultants or studies.''

Merrill raising up to $6.2 billion:

Investment Contract :Merrill Lynch & Co. will raise up to $6.2 billion to be invested by Singapore-based investment firm Temasek Holdings Pte. Ltd. and U.S.-based Davis Selected Advisers L.P., the investment bank said Monday.
Along with the private placement of common stock, Merrill (MER:Merrill Lynch & Co., IncNews, chart, profile, more Last: 53.90-1.64-2.95%
1:00pm 12/24/2007
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:
MER 53.90, -1.64, -2.9%) said it's selling its middle-market commercial finance business for an undisclosed amount. New York-based Merrill said the placement of newly issued stock is expected to close by mid-January. Chief Executive John Thain, who assumed Merrill's top position in November, said the private placement will bolster Merrill's capital position. Thain came to Merrill from NYSE Euronext (NYX:NYXNews, chart, profile, moreLast:
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:NYX, , ) more than one month ago, amid a difficult period during which Merrill sustained significant write-downs related to troubles in the U.S. housing market. The private placement also creates a strategic partnership with Temasek, Merrill said in a statement, describing Temasek as having "sizable investments across Asia, particularly in Singapore, China and India." Temasek will invest $4.4 billion in Merrill common stock, with the option to buy an additional $600 million in stock by March 2008. Its ownership position in Merrill won't exceed 10%, Merrill said. Davis, meanwhile, will make a "long-term investment" of $1.2 billion, Merrill said. Neither Temasek nor Davis will have any "role in the governance" of Merrill, the firm said. Meanwhile, Fitch Ratings maintained a negative outlook on Merrill following news of the investment, saying in a statement that it believes "there is a high probability that additional losses will be recognized in fourth-quarter 2007 fiscal year which collectively may result in [the firm] posting a loss for its 2007 fiscal year." Fitch had lowered Merrill's long-term issuer default rating in October. Following an initial rise early in Monday's abbreviated trading session, Merrill shares closed nearly 3% lower, ending at $53.90. Also Monday, Merrill said it is selling Merrill Lynch Capital, the firm's middle-market commercial finance business, to GE Capital (GE:GENews, chart, profile, moreLast:
Delayed quote dataAdd to portfolioAnalyst Create alertInsiderDiscussFinancials Sponsored by:GE, , ) . Financial terms were not disclosed. Merrill's commercial real-estate finance unit is not part of the unit being sold, the firm said. Fox-Pitt Kelton said in a note to clients that the sale should "free about $1.3 billion [in] capital for Merrill. Thus, the total capital 'raise' is $7.5 billion." Fox-Pitt Kelton had previously estimated that Merrill's write-downs related to subprime and other troubled mortgage markets amounted to $8.6 billion. Merrill's sale of Merrill Lynch Capital "continues to signal that problems are significant, but that [management] is taking steps to get beyond it," the firm told clients

Europe Moves Ahead With Weather Satellite Blacklist

European government officials may resent the fact that the U.S. government is forcing them to create a blacklist of organizations that will not be granted access to weather-satellite data from Europe's future polar-orbiting satellites, which will include U.S. government-supplied instruments. But they have nonetheless agreed to create such a list this year.

The list to be provided by the 18-nation Eumetsat organization will have the effect of determining what organizations may be denied data from Eumetsat's Metop satellites following a U.S. request during an emergency.

U.S. and European government authorities already have concluded the basic outlines of what is known as the Data Denial Implementation Plan. But government officials said the details remain sticky.

"What we have to agree to is a list of organizations, agencies and institutions that will be refused data following a U.S. request," one government official said. "The U.S. has some very specific ideas about who these people are. We don't like the idea. It's not something we're comfortable with. But if the question is: Will we resist it? The answer is: No. We will get this resolved this year."

Europe's Metop-1 satellite is scheduled for launch in June. It will be the first European polar-orbiting meteorological satellite, and will be part of a U.S.-European Joint Polar System. European instruments fly on U.S.-provided satellites, and the United States is providing instruments on the Metop spacecraft.

The joint collaboration is in keeping with the tradition of the nations contributing to the global World Weather Watch system, which distributes weather data the world over with little or no questions asked of those receiving the data. Europe's 18-nation Eumetsat organization of Darmstadt, Germany, and the U.S. National Oceanic and Atmospheric Administration (NOAA) are major hardware contributors to the World Weather Watch system. Japan, China and Russia also are major satellite-data contributors to the system.

The Eumetsat-NOAA data-denial agreement involves the U.S. Defense Department because the U.S. military and NOAA are merging their weather-satellite systems. This merger has given U.S. defense authorities a seat at the negotiating table, as longtime partners NOAA and Eumetsat set the boundaries of who can be refused data in a U.S.-declared emergency.

In an address to Eumetsat's governing council Nov. 29, NOAA Assistant Administrator Gregory W. Withee expressed frustration that the Data Denial Implementation Plan has not been settled despite the approach of the Metop launch.

Withee said in his address that the plan permits Eumetsat governments and approved third-party users continued access to U.S.-provided Metop instruments no matter what happens.

Mikail Rattenborg, director of operations at Eumetsat, agreed with Withee's assessment and said the U.S. side already has agreed to a compromise in the way the data denial will work. After initially proposing that the U.S. decide unilaterally when to curb access to its instruments - a technical challenge since Eumetsat will operate the Metop spacecraft - U.S. negotiators have accepted an approach that is more palatable to European authorities.

"The way the data denial process will work is that the U.S. will make a request to Eumetsat, and then Eumetsat will implement the request," Rattenborg said. "This is a very important step: The U.S. is delegating control of its instruments to Eumetsat. The second step is establishing a list of agencies that will not be subject to data denial, and that is taking a little more time. But I am optimistic we can get this done before the Metop launch."

Data-access policy to meteorological satellite data has long been a source of disagreement between the United States and Europe, with Europe opting to commercialize some weather images and the U.S. taking more of a free-access view. In this case, the roles are reversed, but because of security concerns, not business-model issues.

For the Metop satellites, Eumetsat will be technically able to switch off access to data for individual users, in keeping with its existing policy of differentiating between fee-paying and free-access user groups.

In a similar case, U.S. and European authorities spent months haggling over access to satellite navigation and timing data from Europe's Galileo satellite system, now in development. Galileo will resemble the U.S. GPS system, but will be civilian-financed and run as a business.

U.S. and European officials have agreed on a policy that would permit Galileo program managers to deny access to a localized area during a conflict, similar to the U.S. GPS navigation-warfare strategy.

Technorati : Ahead, Blacklist, Europe Moves, Satellite, Weather
Del.icio.us : Ahead, Blacklist, Europe Moves, Satellite, Weather
Ice Rocket : Ahead, Blacklist, Europe Moves, Satellite, Weather
Flickr : Ahead, Blacklist, Europe Moves, Satellite, Weather
Zooomr : Ahead, Blacklist, Europe Moves, Satellite, Weather
Buzznet : Ahead, Blacklist, Europe Moves, Satellite, Weather
Riya : Ahead, Blacklist, Europe Moves, Satellite, Weather
43 Things : Ahead, Blacklist, Europe Moves, Satellite, Weather