- The Washington Times - Friday, September 21, 2007

Regional

U SLM Corp., known as Sallie Mae, said it expects the consortium seeking to buy it for $25 billion, led by private equity firm J.C. Flowers & Co. and including Bank of America and JPMorgan Chase, to “honor their commitments” to complete the acquisition. SLM’s statement came in response to a New York Times report that J.C. Flowers would seek to reduce the price of the deal.

U Fannie Mae of the District and Freddie Mac of McLean told lawmakers that Wednesday’s easing of some federal limits on the mortgage companies isn’t enough, and a further loosening of constraints on the size of their mortgage portfolios is needed to help prevent a flood of home foreclosures. Instead of the 2 percent increase announced by regulators, the two government-sponsored enterprises seek an increase of at least 10 percent.

U Electronics retailer Circuit City Stores Inc., of Richmond, said it lost $62.8 million (38 cents per share) in its second quarter ended Aug. 31 on lower overall sales and continued restructuring. The shares fell $1.90, or 18 percent, to $8.67. In last year’s second quarter, the nation’s No. 2 consumer-electronics chain earned $10 million (6 cents).

U Alexandria frozen-food maker Cuisine Solutions Inc. said it swung to a net loss of $223,000 (1 cent) in its fourth quarter ended June 30 from net income of $686,000 (4 cents) a year ago. Net income for the year increased to $10.54 million (58 cents) from $3.65 million (20 cents) the previous year. Both results were driven by one-time tax changes, but sales rose 28 percent in the fourth quarter and 25 percent for the year.

U Columbia chemical maker W.R. Grace & Co. and six former executives charged with poisoning residents of Libby, Mont., lost a federal appeals court decision throwing out several lower-court rulings that threatened the government’s case. The company’s shares plunged 5.5 percent. The ruling reinstated a key conspiracy charge that the defendants claimed was filed too late.

U Virgin Mobile USA Inc., a venture of billionaire Richard Branson’s Virgin Group Ltd. and Sprint Nextel Corp., was sued by a mother who claimed her daughter’s picture was taken from the photo-sharing Web site Flickr and used in an ad. Susan Chang said yesterday in a libel and invasion-of-privacy complaint in Dallas that an image of her daughter, 16, was among more than 100 that Virgin Mobile used without permission to advertise free text-messaging in Australia.

National

U Apple Inc. Chief Executive Officer Steve Jobs was subpoenaed by the Securities and Exchange Commission to give a deposition in a stock-options backdating case against Apple’s former general counsel Nancy Heinen, a source said.

U Melvyn Weiss, co-founder of securities law firm Milberg Weiss, was indicted in a seven-year-old probe of reputedly illegal payments to plaintiffs in class-action cases. Mr. Weiss, 72, was charged with participating in a scheme to pay millions of dollars in secret kickbacks to plaintiffs in more than 225 class-action and shareholder derivative-action lawsuits, the U.S. Attorney’s Office in Los Angeles said.

U Rates on 30-year mortgages, after dropping to their lowest point in four months, edged up this week. Freddie Mac, the mortgage company, reported that 30-year, fixed-rate mortgages averaged 6.34 percent this week, up slightly from last week’s 6.31 percent, which was the lowest level since May 17.

U Major U.S. freight railroads will require $135 billion in infrastructure investment over the next 28 years, more than a quarter of which will have to be funded by the government, according to a study conducted for the American Association of Railroads, an industry group. The study does not factor in possible growth in passenger service from Amtrak and other commuter services.

U Goldman Sachs reported third-quarter results well ahead of estimates, as the firm realized gains from takeover advice and the sale of its holdings in an energy company. Goldman took a $1.5 billion hit from credit losses but said it “more than offset” these losses betting against mortgage securities. Net income for the period ended Aug. 31 rose to $2.85 billion ($6.13) compared with $1.55 billion ($3.26) a year ago.

U Business software maker Oracle Corp. said net income for the three months ended in August rose 25 percent to $840 million (16 cents) from $670 million (13 cents) a year earlier, despite investors’ recession concerns. The results topped estimates.

U Union-backed critics of Wal-Mart began an ad campaign that seeks to tie the world’s largest retailer to the recent slew of safety problems in Chinese imports. It is the first campaign from a new team of strategists at WakeUpWalMart.com after the two founding leaders left in July for the Democratic presidential campaign of John Edwards.

International

U Britain lifted a temporary control zone around a farm close to the central city of Birmingham after tests for foot and mouth disease proved negative, the agriculture ministry said.

U Angry lawmakers grilled the Bank of England’s governor about why he failed to prevent a run on deposits at mortgage lender Northern Rock PLC, but the governor countered by blaming the banking industry for creating a credit crisis. Governor Mervyn King called for changes in laws which prevented the bank from quietly offering to prop up Northern Rock rather than making a public announcement.

U The chief executive of Commerzbank AG, Germany’s second-biggest bank, said the $112.2 million in provisions for possible losses from the subprime crisis might not be enough. CEO Klaus-Peter Mueller said that given the uncertainty in world markets, “nobody can say if that is sufficient in the long term.”

U The European Union’s consumer chief asked Mattel Inc. for details of new quality-control measures introduced since its recall of millions of Chinese-made toys and warned the company it faces a major task to rebuild trust in the industry. Meglena Kuneva told the company that she will push for new EU rules if not enough is done to stop dangerous toys from coming to market.

U A Turkish court ordered the country’s telecommunications company to block access to the popular video-sharing site YouTube because of clips the court deems insulting to leading political figures. It was the second time Turkey has blocked access to YouTube. In March, the site was blocked for two days after a complaint that some clips insulted modern Turkey’s founder, Mustafa Kemal Ataturk.

U British Airways said it will halt flights to Zimbabwe next month, citing mounting losses on the route as the southern African nation struggles with its worst economic crisis since independence in 1980. With Zimbabwe’s international isolation growing, the British airline said that its three weekly round-trip flights between Harare and London will end Oct. 28.

From wire dispatches and staff reports

U Dominique Strauss-Kahn, the EU-backed candidate to head the International Monetary Fund, said the financial institution’s future is threatened by questions of relevancy and legitimacy. “Indeed, what might be at stake today is the very existence of the IMF as the major institution providing financial stability to the world, a global public good,” Mr. Strauss-Kahn said.

U Snow, the Chinese beer brand partly owned by London brewer SABMiller, is set to become the No. 2 beer brand in the world this year, SABMiller said. Snow is the main national brand of CR Snow Breweries, SABMiller’s 49 percent-owned joint venture with China Resources Group Ltd., which became the No. 4 brand in the world in 2006, with 3 billion liters sold.

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