Money world

Editor’s note: Read more beer coverage at our new "Lager Heads" blog at http://www.stltoday.com/blogzone/lager-heads/

InBev of Belgium will dramatically shake up the top ranks of St. Louis-based Anheuser-Busch Cos. when it takes over the biggest U.S. brewer. InBev announced a slate of executives who will lead InBev’s North American zone when the $52 billion takeover closes, expected later this year.

Eight top executives at Anheuser-Busch will leave the company when the St. Louis-based brewer is bought by InBev of Belgium, the Post-Dispatch has learned.

The executives include: W. Randolph Baker, chief financial officer; Tom Santel, president and chief executive of Anheuser-Busch’s international division; Doug Muhleman, group vice president of brewing operations and technology; Keith Kasen, head of A-B’s theme park division; Joe Castellano chief information officer; Mike Owens, vice president of business operations for A-B’s domestic brewing unit; Mike Harding, chief executive and president of A-B’s packaging group; and Tim Farrell, vice president of corporate human resources.
According to a document obtained by the Post-Dispatch, InBev named members of the future management team for North America, reporting to Luiz Fernando Edmond. The team will have a mix of Anheuser-Busch and InBev veterans to lead the North American zone. InBev reiterated that the two companies will operate separately until closing.

Here is the team:

Peter J. Kraemer will be vice president of supply. He will lead all brewery operations, quality assurance, raw materials, logistics and product innovation responsibilities. Kraemer is a 19-year employee of Anheuser-Busch and is currently vice president of operations for all of A-B’s breweries. A fifth-generation brewmaster and a native of St. Louis, Kraemer was once resident brewmaster of the St. Louis brewery.

Thomas J. Adamitis will be vice president of procurement, retaining a job he holds at Anheuser-Busch. He will oversee purchasing strategies and activities, including energy, packaging, raw materials and capital expenditures. Adamitis is a 16-year veteran of Anheuser-Busch. A native of Granite City, Ill. Adamitis joined A-B in 1992 as a management trainee.

Kirk Norris will lead the Anheuser-Busch packaging group subsidiaries, including Metal Container Corp., Longhorn Glass Corp., Anheuser-Busch Recycling Corp. and Eagle Packaging Inc. A 24-year A-B veteran, Norris is currently group vice president of operations for the subsidiaries and has been with the packaging group in leadership roles since 2004 everyone approved 1 hour payday loans. He has worked at A-B’s breweries in Houston and Newark, N.J. and also worked in international brewing, helping the Wuhan brewery start-up in China.

David Almeida will be vice president of finance, responsible for all budgeting, business performance, risk and control and tax matters. A native of Brazil, Almeida joined InBev in 1998 after working at Salomon Brothers in New York. He is one of InBev’s M&A whiz kids. In 2001, he became head of mergers and acquisitions at AmBev, a Brazilian brewer that is now part of InBev. He moved to Belgium in 2004 to help with the creation of InBev. He has worked as InBev’s vice president of finance for the Asia-Pacific Zone and, most recently, Vice President External Growth.

Odilon Queiroz will be vice president of information and business services. He is currently vice president of finance for the North American zone.

James G. Brickey will be vice president of people, leading the team responsible for compensation, benefits, talent management, risk management, diversity, security, building services, corporate events and food services. Now, Brickey is responsible for Anheuser-Busch’s human resource for corporate and U.S. beer subsidiary personnel, and manages all compensation and benefit programs companywide. Brickey joined A-B in

1989 as a compensation analyst. He is a native of St. Louis.

Gary L. Rutledge will be vice president and zone general counsel, keeping a job he holds now at Anheuser-Busch. He will be responsible for corporate, commercial and labor law, intellectual property, litigation, and labor relations. Rutledge joined Anheuser-Busch in 1997, leaving the Armstrong Teasdale law firm in St. Louis, where he was a partner specializing in litigation. He is a native of St. Louis

James Villeneuve will be vice president of corporate affairs, and will lead the team responsible for government and regulatory affairs, external communications, public relations, corporate social responsibility and foundation and donation management. Villeneuve is currently InBev’s vice president of global corporate affairs. He is a Canadian citizen.

Jim Atchison will continue leading the Busch Entertainment Corp. theme-park subsidiary, which runs SeaWorld and Busch Gardens. Atchison has been running the group’s operations for a year. He is a native of Jersey City, N.J.

jmcwilliams@post-dispatch.com | 314-340-8372

Source

Having seen shares decline by more than half over the past three months, Peabody Energy Corp.’s board on Friday doubled the size of the company’s existing stock repurchase program to $1 billion.

The St. Louis-based coal producer has been buying back stock under the program since June 2005, and said it may repurchase shares or discontinue the buyback plan at any time. Companies buy their own shares to help raise earnings per share and boost their stock price.

"The fundamentals of the business are sound and we maintain strong capacity to continue to grow the company," Chief Executive Gregory H freecreditreport. Boyce said in a statement.

The company had repurchased about $100 million of stock under the plan as of June 30 and "we have continued to be active since then," Peabody spokesman Vic Svec said.
Peabody had 270.7 million shares outstanding at Sept. 30, and will provide updated stock repurchase data in its next quarterly filing with the Securities and Exchange Commission.

jtomich@post-dispatch.com | 314-340-8320

Source

The credit crisis will spur more takeovers in the oil and gas industry as cash-rich oil majors and utilities pounce on small and mid-cap companies whose shares have been hit hard as they struggle to fund developments.

Oil majors such as Exxon Mobil (XOM.N: Quote, Profile, Research, Stock Buzz) and Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research, Stock Buzz) will likely use the crisis to accelerate their strategic push into North American gas production and the Canadian oil sands, bankers and analysts said.

Similarly, utilities like Germany’s RWE (RWEG.DE: Quote, Profile, Research, Stock Buzz), France’s GDF Suez (GSZ.PA: Quote, Profile, Research, Stock Buzz) and Britain’s Centrica (CNA.L: Quote, Profile, Research, Stock Buzz), which have long sought to produce more of the gas they retail, are also predicted to take advantage of lower asset prices.

“We would expect there to be more consolidation,” said Karl Nietvelt, director of oil and gas at S&P. “Prices are indeed very cheap.”

Recession fears have halved the price of oil since July, when it topped $147/barrel cashadvance. The drop has hit share prices across the sector but small and mid-size oil and gas exploration and production (E&P) firms have been among the hardest hit.

This is because the E&P players are more leveraged to crude than the oil majors, which have refining, chemicals and retail units, and because, with low production levels or none at all, the E&P firms are more reliant on debt funding.

Devon Energy President John Richels said earlier this month he expected consolidation among mid-size North American E&P players, typically worth between $5 billion and $20 billion, which have expanded rapidly in recent years.

Thierry Bros, analyst at Societe Generale in Paris, said the majors may snap up such firms or their assets to help address their own failure in recent years to grow their reserve bases. 

Read more

Falling oil prices and investor fears of a global recession pummelled the Canadian stock market again today, dragging the benchmark index to its biggest intraday loss ever as concerns heightened that the Wall Street financial crunch has dragged the Canadian economy into a deep freeze and seized up bank lending around the world.

The Toronto stock market plunged nearly 1,200 points in early trading before clawing back more than half of the loss to close down about 573 points, five per cent, or about $75 billion of paper losses.

At one point the index fell below 10,000 points for the first time in more than three years, wiping out all the gains of the market since mid-2005.

The Bay Street selloff continued a wave of volatile trading that has seen huge swings up and down as investors worry about the global credit crunch and its impact on the Canadian and global economies.

Canada’s main stock index lost 11 per cent last week, evaporating $150 billion in value, as recession worries spooked traders around the world.

“People are scared and the only thing they’re doing is selling,” said Ryan Detrick, senior technical strategist at U.S.-based analyst firm Schaeffer’s Investment Research.

While the broader economy seems headed into recession — technically two quarters of shrinking output — the jobless rate in Canada is still less than half the unemployment of the early 1980s, during the worst recession in the post Second World War era.

However, further cuts in manufacturing, retail, housing and other sectors — because of tight money, the slump in the United States and market turmoil around the world — could push Canada’s jobless rate sharply higher over the next several months.

In cutting output today at mills in Quebec and British Columbia, Montreal-based forestry giant Tembec cited lower demand from Asia for the pulp it exports to make paper.

About half the Canadian market is made up of energy, metals and other commotities stocks, so any weakness in global demand will punish the resources sector as well as the Canadian dollar.

On currency markets today, the loonie dropped 1.5 cents to close just under 91 cents US.

Canada’s economy has grown only marginally since the beginning of the year, with exports and manufacturing squeezed by the slumping United States.

Economists from Canada’s Big Five banks said they expect little or no economic growth in the near future and warned that the domestic gloom will deepen into something worse than a recession.

In their most recent economics forecast, Scotiabank economists predict recessions for both the U.S. and Canada, economic slides that they say will require central bankers in both countries to cut interest rates by at least a full percentage point to rekindle growth.

The word “recession” wouldn’t describe the deep structural problems affecting everything from the U.S. housing sector to the Canadian oil industry, said Bank of Nova Scotia chief economist Warren Jestin.

“You have to invent a new word to describe what we’re in now,” he said. “It’s being driven through the financial markets into the real economy.”

On Wall Street, the Dow Jones industrials sank 360 points, joining a global stocks meltdown triggered by investor fears the financial systems in the United States and other countries need more than government bailouts to fix.

Meanwhile, the credit markets remain stagnant, a sign that banks are too afraid to lend.

Finance Minister Jim Flaherty, who has consistently said Canada’s economy and banking system is in better shape that their American counterparts, repeated that again today but said even the largest financial institutions could be feeling the squeeze

“Canada’s financial system has handled the persistent global market turmoil very well,” Flaherty said in a statement.

”Nonetheless, Canada’s financial system is not immune to the ongoing turmoil in global credit markets. The deterioration of global credit markets is beginning to squeeze the ability of even the strongest of financial institutions to raise longer-term funds, which could limit the provision of longer-term credit in Canada to businesses and households.”

Flaherty said he supports the Bank of Canada’s decision to inject at least $20 billion of extra cash into the financial system by mid-November and said the government “stands ready to take whatever actions may be necessary to protect the stability of the Canadian financial sector.”

Since the beginning of the year, the Toronto market has lost about one-third of its value, more than $600 billion, diminishing the value of stocks held by millions of Canadians either directly or through mutual funds and pension plans (cash loan).

If ordinary Canadians are suddenly feeling poorer because of the market meltdown, analysts warn, that could tighten their pursetrings and generate a bigger spending fallout on the retail sector and broader economy.

Marti Messam, a Vancouver-area insurance broker, said today’s market drop worries her, but she believes it’s part of a down cycle that will eventually recover.

“I am concerned, clearly, but probably it will pass,” Messam said while walking to her office in Vancouver. “It will be interesting to see how it plays out in the U.S. I think our economy is much stronger than the American economy.”

Messam said “the unsteady American economy has put off her decision to buy a home in Palm Springs, Calif.

Vancouver lawyer Ed Mortimer called the stock market plunge and the current economic outlook are “very serious.”

“It’s the domino effect,” said Mortimer, while sipping a coffee and doing a crossword puzzle at a Vancouver cafe today. “We are going to be in the same soup as the U.S., although perhaps not as extreme.”

On the markets, investors were initially cheered by the Bush administration’s US$700 billion rescue plan last week, but grew skeptical that the bailout will work quickly to unfreeze the credit markets.

Global banks, hobbled by wrong-way bets on mortgage securities, still remain starved for cash and refuse to lend to each other. As well, credit has dried up and there’s little lending to businesses for job creating expansions and to consumers to buy cars or finance other big-ticket purchases.

“These programs are going to be effective, I believe,” said Rob Lutts, chief investment officer at Cabot Money Management. “Shorter term, we’re in a very challenging environment that’s going to take a while.”

Fears about a global recession caused oil to drop more than $6 to US$87.81 a barrel, its lowest point in eight months. Meanwhile, the benchmark index that gauges fear in the stock market jumped to the highest level in its 18-year history.

Market sentiment also plunged today in Russia, South America and Asia after governments across Europe rushed on the weekend to prop up shaky banks to get them lending again.

More global interest rate cuts could also be on the way, co-ordinated by the world’s central banks, including the Bank of Canada.

The economy has become the key issue on the campaign for the Oct. 14 federal election, with the opposition parties hammering the Conservative government for what they say is a laissez-faire approach to economic management.

Prime Minister Stephen Harper says that while Canada is not immune to the troubles in global financial markets, the Canadian economy is fundamentally sound and has been helped with Tory tax cuts and other policies.

“Let’s be clear: the prime minister of Canada isn’t going to go around the country predicting a recession when we’re not in a recession now,” ’ Harper said while campaigning in Ottawa early Monday.

“I remain fundamentally optimistic about the Canadian economy, but optimistic, as I’ve said from the beginning, within the framework that we’re now living in … a period of economic uncertainty.”

Harper added: “We’re in relatively good position compared to some other countries.”

At first glance, Canada appears in much better shape today than during the recession of the early 1980s — the worst since the Second World War — when the Canadian jobless rate peaked at 13 per cent.

Economists expect 12,500 new jobs were created in September, down slightly from the 15,200 jobs created in August. For the first eight months of the year the Canadian economy has created 87,000 jobs compared with 221,000 in the first eight months of 2007.

Canada’s jobless rate, currently stands at 6.1 per cent, close to its lowest level in three decades, though economists expect it to rise to 6.2 per cent for September when the latest jobs report is released Friday.

Harper said the main problem afflicting the world economies is the freezing up of bank credit, which has hurt companies and consumers looking for loans.

“Our main advice is obviously to encourage co-ordinated action, to encourage actions that will stabilize the situation without creating a great deal of moral hazard for taxpayers,” the prime minister said. said.

Sourse

WASHINGTON–U.S. banking regulators said yesterday they will seek to resolve rival acquisition proposals by Citigroup Inc. and Wells Fargo & Co. for Wachovia Corp.

In a surprise announcement, Wells Fargo agreed to buy Wachovia for $15.1 billion (U.S.), four days after Citi agreed to acquire Wachovia’s banking operations in a government-backed deal that involved the Treasury Department and the Federal Reserve.

The Federal Deposit Insurance Corp. announced a shotgun merger proposal between Citi and Wachovia on Monday, with the FDIC agreeing to absorb up to $42 billion in losses should Wachovia’s $312 billion pool of loans later turn sour.

The deal, reached in consultation with President George W. Bush, also allowed the FDIC to receive $12 billion in preferred stock and warrants from Citi for taking on possible future risks.

A deal with Wells Fargo, if consummated, could wipe out potential risks to the government and taxpayers that a government-approved Citi deal would include. Citi said yesterday it has an exclusivity agreement with Wachovia.

The FDIC said it stood by the Citi deal, but at the same time left open the possibility of accepting Wells Fargo’s proposal after reviewing it.

It was not immediately known if FDIC chair Sheila Bair or her agency participated in the negotiations between Wells Fargo and Wachovia, but Bair said the new offer "does not require FDIC assistance (instant payday loan)."

In a separate statement, she said her agency stands behind the agreement with Citi.

In a joint statement, the Fed and the Office of the Comptroller of the Currency said they had not yet reviewed the new Wells Fargo proposal, but had reviewed Citi’s bid extensively. "The regulators will be working with the parties to achieve an outcome that protects all Wachovia creditors, including depositors, insured and uninsured, and promotes market stability," they said. The central bank regulates bank holding companies, and the OCC is the primary regulator for the banking units of Wachovia, Citi and Wells Fargo.

The FDIC, which insures bank deposits, has tried to match potentially failing banks with buyers in an effort to stave off harm to the deposit insurance fund, which stood at about $45 billion three months ago.

Bair said the FDIC will work with all three for a resolution that "serves the public interest."

Sourse

The Toronto Stock Exchange ended the session in positive territory yesterday after a volatile week of trading on uncertain oil prices and jitters about the future of the U.S. financial industry.

Toronto’s S&P/TSX composite index rose 156.82 points to 12,769.58.

The loonie closed at 94.24 cents (U.S.), up 1.35 cents, after hitting a 13-month low on Thursday.

On the New York Mercantile Exchange light, sweet crude for October delivery rose 31 cents to settle at $101.18 a barrel, after briefly sinking to $99.99 as refineries in the Gulf of Mexico battened down the hatches over concern about the impact of hurricane Ike.

Crude oil on the futures market briefly sank below the psychologically important $100 a barrel mark for the first time since April 2 – suggesting that investors believe a worsening global economy will continue to drive down demand for some time in the United States and elsewhere.

Falling crude prices have battered Canada’s main stock index, which is heavily weighted to oil, gas and commodity companies, as higher prices contribute to declining energy use.

In New York, the Dow Jones industrial average was down 11.72 points to 11,421.99 as disappointing economic data on U.S http://payday-z.com. retail sales and nervousness over the health of financials made investors jittery.

The Nasdaq rose 3.05 points to 2,261.27, while the S&P 500 index was up 2.65 points to 1,251.70.

The TSX Venture Exchange was up 43.71 points at 1,607.53.

On the TSX, the financial and IT sectors created the biggest drag, each falling more than 1 per cent.

TD Bank was off by 56 cents (Canadian) to $62.29 while Research In Motion was down 4.7 per cent at $112.36.

The gold sector rose more than 9 per cent as the December bullion contract on the Nymex rose $19 to $764.50 (U.S.) an ounce and Goldcorp rose 14.5 per cent to $31.36 (Canadian).

And Prime Minister Stephen Harper said a re-elected Conservative government would make it easier for foreign companies to buy parts of Canadian firms.

The Tories would increase the allowed level of foreign investment in airlines to 49 per cent from the current 25 and allow foreign companies to own Canadian uranium mines.

The Canadian Press

Source

The U.S. unemployment rate unexpectedly shot up to 6.1 percent in August, the highest in nearly five years, as employers cut payrolls for an eighth straight month and a decline in labor markets accelerated.

The Labor Department said on Friday 84,000 jobs were lost in August, significantly more than the 75,000 that economists surveyed by Reuters had forecast. In addition, July’s job losses were revised up to 60,000 and June’s to 100,000 from a previously reported 51,000 in each month.

Analysts said the bleak hiring data showed a weakening economy that likely will oblige the Federal Reserve to keep interest rates low for an extended period.

“The economy is clearly deteriorating,” said Gary Thayer, senior economist for Wachovia Securities in St. Louis. “We’re also seeing weakness around the globe so there’s less reason for the Fed to focus on inflation and more reason to focus on getting the economy back on its feet.”

Stock indexes futures extended losses but U.S. Treasury debt prices rose as investors bet it meant interest rates will remain in hold cashadvance.com. The dollar dipped in value against other major currencies and short-term interest rate futures began to signal that the Fed could cut interest rates by year-end.

Labor department officials said the August jobless rate was the highest since September 2003. Analysts had expected the rate to remain steady at July’s 5.7 percent rate rather than to jump.

“We’re running job losses that are typically seen in the early stages of an economic recession,” said David Resler, chief economist for Nomura Securities in New York, adding, “we’re probably in one.”

There were steep cuts in hiring in nearly every major category of employment. Some 61,000 manufacturing jobs were lost in August, the most for any month since mid 2003, and 8,000 more construction jobs were cut. There were 53,000 jobs eliminated in professional and business services and 4,000 in leisure and hospitality industries. 

Read more

The catastrophe looming in the documentary "I.O.U.S.A." isn’t romantic like the doomed young love in "Titanic," but billionaires Warren Buffett and Pete Peterson warn it could break many more hearts.

The disaster they warn of could be bigger than any we’ve ever seen - bigger than an iceberg, bigger even than the current mortgage crisis.

If the U.S. doesn’t do something, and fast, to tame the federal government’s debts - now more than $50 trillion - the two Nebraska natives warn we will saddle coming generations with economic problems that will make this year’s financial turbulence look like a trip to the debt counselor’s office.

Premiering Thursday at 358 theaters nationwide, "I.O.U.S.A." is part of Peterson’s campaign to give the ballooning debt a central role in the presidential campaign.

A live panel discussion after the first showings - tape delayed for moviegoers in the West - will include Buffett, Peterson and other experts. Despite ticket prices much higher than for a feature, at $11.50 to $20, Thursday’s showings had sold out at some theaters by Wednesday, organizers said.

The two prominent investors don’t share a political philosophy: Peterson endorses Republican John McCain for president while Buffett favors Democrat Barack Obama. But they say the nation’s budget and trade deficits aren’t really partisan issues.

"Our situation is a lot worse than advertised, and we need to start making some tough choices if we want our future to be better than our past," former U.S. Comptroller David Walker, one of the movie’s stars, said Wednesday.

Peterson - who co-founded the Blackstone Group LP (BX) private equity firm and served as commerce secretary under President Nixon - is financing the movie and the discussion in Omaha to advance the goals of his foundation, created in February, which Walker runs.

Peterson pledged $1 billion to help raise the alarm about the nation’s budget deficit, the projected shortfalls in Medicare and Social Security funding, the trade deficit and the meager savings rate for most Americans.

Peterson and Walker both talk about the substantial debt burden that could be left for future generations if changes aren’t made.

"We’re mortgaging the future of people who can’t vote and might not even be born yet," Walker said.

The "I.O.U.S.A." filmmakers followed Walker as he toured the country speaking to college groups, newspaper editorial boards and community groups about the nation’s financial problems.

Most of the talks in the movie took place while Walker still ran the Government Accountability Office, an investigative arm of Congress that audits and evaluates the performance of the federal government.

Walker and the movie cite GAO figures that show the U.S bad credit payday loans. government owed roughly $53 trillion more than it had at the end of the 2007 fiscal year, which is the most recent figure available.

About $11 trillion of that covers the publicly traded government debt, the amount the federal government owes to employee pensions and the cost of environmental cleanup of federal land. The rest of the $53 trillion figure accounts for projected shortfalls in Medicare and Social Security.

The cost of covering those obligations is expected to spiral as more and more baby boomers become eligible for the two programs.

The film also features interviews with prominent businessmen and officials from both major political parties, such as former Federal Reserve chairman Alan Greenspan and Paul Volcker and former U.S. Treasury secretaries Paul O’Neill and Robert Rubin.

Buffett did not respond to a request for an interview for this story, but he has said the United States is essentially selling off chunks of the country to foreign investors to finance the nation’s overconsumption.

"We’ve got a super-subprime crisis brewing - namely, the federal government’s finances," Walker said. "The factors that caused the mortgage-based subprime (crisis) to explode exist for the government’s finances. The difference is it’s 25 times - at least - bigger."

Buffett also has warned for years that the nation’s trade deficit - the difference between how much the country imports and exports - was going to devalue the dollar and create other problems.

"Our trade equation guarantees massive foreign investment in the U.S. When we force-feed $2 billion daily to the rest of the world, they must invest in something here," Buffett said in his annual letter to shareholders earlier this year.

Thursday’s panel discussion will also feature Bill Novelli, AARP’s chief executive, and William Niskanen, chairman of the libertarian-leaning CATO Institute.

With showings in 358 theaters, the movie’s premiere likely will be bigger than its planned 12-city theatrical run, which begins Friday.

The main reason the movie is being distributed in theaters is that its makers think it could contend for an Academy Award, Walker said. More people will likely see the movie after it leaves theaters because the foundation hopes to air it on television early next year, he said.

Clips from the movie and panel discussion will be available online. 

Source

Chip maker Vishay Intertechnology says it offered to buy power management chip maker International Rectifier Corp. for $1.6 billion in cash.

Malvern, Pa.-based Vishay Intertechnology Inc (VSH). says the offer would be for $21.22 per share, which is about a 13% premium over International Rectifier’s (IRF) Thursday closing price of $18.82 check cash advance.

International Rectifier is based El Segundo, Calif. 

Source

Merrill Lynch & Co Inc’s (MER.N: Quote, Profile, Research, Stock Buzz) perennially optimistic chief executive has made something of a habit of promising not to issue common shares, only to raise capital weeks later.

So far, though, investors seem to be cutting him a fair amount of slack. In fact on Tuesday after John Thain’s latest about-face, Merrill’s shares rose 7.9 percent.

But patience for the former Goldman Sachs and NYSE executive’s flip flops may wear thin, critics said.

“This may be the last time, or you could see more writedowns. You just don’t know,” said Jim Huguet, co-chief executive at fund manager Great Companies.

Merrill Lynch said on Monday it was raising $8.5 billion capital after agreeing to sell toxic debt assets at a loss.

The share sale comes less than two weeks after Thain said on a conference call with investors, “Right now, we believe we are in a very comfortable spot in terms of our capital.”

Thain has been making positive statements about the bank’s capital for months online payday advance. In an April interview with Japan’s Nihon Keizai Shimbun, Thain said, “The goal is to maintain our current ratings. No more capital raising; I’m sure we have enough capital.”

Weeks later, the company issued more than $2.5 billion of preferred shares. 

Read more