Unstructured Finance

Check Out Line: Online shopping woes

Check Out the drop in online sales.
Even online retailers are ready for 2008 to end. After we heard about the abysmal holiday season at stores, comScore said online sales for the holiday period up to Dec. 23 dropped 3 percent. It was the first decline in online spending since comScore started tracking online sales in 2001.
The end of 2008 will also mark the first quarter that online sales fell. From Oct. 1 through Dec. 28 e-commerce spending fell 4 percent to $36.8 billion, according to comScore. 
CIRCUITCITY/So who were the biggest winners and losers in December? Through Dec. 24, Hewlett Packard‘s online traffic in the U.S. rose 28 percent to more than 19.4 million unique visitors.  Apple, with more than 35 million visitors, saw its traffic rise 19 percent.  Meanwhile, traffic to Circuit City‘s site fell 21 percent.  Presumably shoppers were spooked after it filed for bankruptcy protection and said it would shut some stores. Dell‘s traffic was down 17 percent.  EBay was still the most popular site, though its traffic fell 4 percent to 85.4 million visitors.

Also in the basket:

Jobless claims drop by much more than expected

China dairy boss pleads guilty in melamine case

Bratz dolls to get reprieve, manufacturer says

Walmart Pulls Out of Nielsen’s PRISM (Advertising Age)

(Reuters photo)

Unhappy new year for chemical makers

2009It doesn’t look like 2009 is going to be a happy new year for the chemicals sector.

LyondellBasell Industries, the world’s third-largest independent chemicals company, has told lenders it is considering filing for bankruptcy protection amid plunging sales and a cash crunch, the Wall Street Journal said, citing people familiar with the matter.

The company is one of several in the sector facing one of the worst slumps ever in chemical demand. The industry has been battered by high price tags on crude oil and natural gas, which are key components of plastics and other chemicals.  Energy prices have plunged in recent months, but demand has also been hurt by recessions in most developed countries and a sharp slowdown in emerging economies.

American Greetings wins over RPG

American Greetings evidently found the perfect way to smoothe over a tiff.

Recycled Paper Greetings agreed to be bought by the second-largest U.S. greeting card maker, which was attracted to the smaller rival’s “witty, funny and fresh content.”

The agreement comes after a spat in September, when American Greetings said on an earnings conference call that it had bought $44 million of distressed RPG debt.

RPG Chief Executive Jude Rake said in a statement at the time that he was taken by surprise by the announcement, and called the actions of the larger rival “predatory.” RPG said it had even filed a lawsuit against American Greetings earlier.

Environmental groups call “clean” coal a fairy tale

USA-COAL/MONTANAWhat do Bigfoot, a mermaid, an alien from outer space, and clean coal all have in common?
    None of them exist, according to several environmental groups.
    Organizations such as the League of Conservation Voters, Natural Resources Defense Council and the National Wildlife Federation have launched a multi-million dollar media onslaught aimed at knocking down claims that power can be generated from coal now in an environmentally safe manner.                                                                                                                                                      The so called “reality” campaign features a television commercial with a man touting “clean coal technology” in a barren field and print ads with fictional creatures holding lumps of coal. The message of the ads is “In reality, there’s no such thing as clean coal.”
    How to handle America’s abundant coal supply is likely to remain a contentious issue as U.S. President-elect Barack Obama’s incoming administration tackles climate change and reducing greenhouse gas emissions.
    Coal-fired power plants generate about half of U.S. electricity supplies, and account for about 40 percent of U.S. greenhouse gas emissions — the biggest single industrial source.
    Obama has expressed support for the development of technology that would allow coal-burning power plants to trap and store carbon dioxide rather than releasing it into the atmosphere. Such technology is commercially untested and currently economically nonviable.
    Coal industry trade groups, such as the American Coalition for Clean Coal Electricity, say that they are committed to carbon reduction strategies and coal power is necessary to provide Americans with affordable electricity.
    Until the carbon capture and storage technology is developed, however, environmentalists behind the Reality Coalition say on their website “coal will remain a major contributor to the climate crisis.”

–Ayesha Rascoe

Check Out Line: Holiday wishes for a better economy

Check out samsantaAmericans, fed up with financial doom, who are wishing for a cheerier economy in 2009.

The Marist Institute for Public Opinion in Poughkeepsie, New York, polled 1,003 Americans about their expectations for 2009 on December 9 and 10 — days after the National Bureau of Economic Research confirmed the United States had been mired in a recession since December 2007 — and found that Americans are optimistic that 2009 will be a better year.

Expectations for a brighter future were higher among younger generations, with 64 percent of those under 45 having an optimistic view compared with 52 percent for those 45 or older.

Santa for automakers, Grinch for taxpayers?

grinchA company in the U.S. auto industry fails — and the government steps in as savior. Yet again. That’s right. Santa visits the automakers this year while the Grinch steals taxpayers’ Christmas.

The Bush administration is buying $5 billion in equity in GMAC – the finance arm owned by GM and Cerberus Capital Management. The Treasury has also offered a new $1 billion loan to GM so the automaker could participate in a rights offering at GMAC.

Yes, this in addition to the recent $17.4 billion emergency loan to save GM and Chrysler from bankruptcy.  In fact, the government already helped GMAC last week, when the Federal Reserve approved the finance company’s application to become a bank-holding company.

Dow’s Kuwaiti breakup is banks’ headache, too

Kuwait’s decision to walk away from a $17.4 billion joint venture with Dow Chemical could hurt the prospects for the company’s $15.3 billion takeover of Rohm & Haas. But there could be other losers, too.

According to Thomson Reuters, Citigroup and Merrill Lynch advised Dow on the Kuwaiti deal and could lose some fees now that it has been scuttled. Those banks, as well as Morgan Stanley, advised the chemical company on the Rohm and Haas deal, and could drop some more fees if that deal is renegotiated or terminated.

The three firms also lead the group of 19 banks behind the $13 billion term loan that Dow took out to finance the takeover. Leading the loan are Citi, Merrill and Morgan Stanley, which have each committed $1.35 billion.

Dow/Rohm & Haas: Deal or no deal?

Andrew Liveris2008 had the largest number of cancelled deals ever, and the year isn’t even over yet.

Kuwait’s decision to pull out of a $17.4 billion petrochemical joint venture with Dow Chemical could hinder the chemical company’s plans to buy rival Rohm & Haas.

The company had planned to use the proceeds from the JV to repay a large part of a $13 billion bridge loan it would have to shoulder to buy Rohm & Haas.

Check Out Line: The year of the vampire

Check Out the top products on Amazon.com.
Amazon.com just came out with its “best of” lists for 2008.  Since Amazon is best known for selling books (even though it offers everything from groceries to jewelry these days), we thought you might want to know which titles were the hottest this year.

USA/No surprise to tween girls or their parents, the best-selling book was “Breaking Dawn,” also known as the fourth book in Stephenie Meyer’s Twilight saga.

The book that got the most positive reviews was “The Revolution: A Manifesto” by Ron Paul. Meyer’s “Twilight” got the most positive reviews for a Kindle book. Of course, Amazon’s Kindle was the best-selling electronic item on its 2008 list.
The book most frequently purchased as a gift? It was the first book in Meyer’s series, “Twilight” – the one that became a hit movie when it opened in November.
Also in the basket:

Check Out Line: Mixed Sales News

Check Out mixed news on the retail sales front.

Retailers are now out to lure consumers with after-Christmas deals as data show this year’s BRITAIN-SALES/VIEWholiday season was one of the weakest in decades.

The retail data service of MasterCard Advisors said U.S. retail sales fell as much as 4 percent during the holiday season. SpendingPulse tracks sales activity in the MasterCard payments network and couples that with estimates for other payment forms.

It found that luxury sector sales fell 34.5 percent, as job losses and stock market declines weighed on higher-end shoppers. Specialty electronics and appliance sales were off 26.7 percent.