- The Washington Times - Thursday, March 27, 2008

Regional

Russian steel maker OAO Severstal said it plans to increase production at Sparrows Point to full capacity of 3.6 million tons soon after completing its $810 million acquisition of the plant near Baltimore. The deal could receive final approval from the Justice Department and federal regulators as early as mid-May, Severstal executives said

The limit on the size of loans eligible for purchase by Fannie Mae and Freddie Mac will not fall below the current $417,000 level, the firms’ Office of Federal Housing Enterprise Oversight said, adding that it may change the formula for calculating the limit, which is based on home-price changes. The move won’t affect the temporary increases in the loan limit enacted by Congress.

Northrop Grumman officials say they’ve completed testing on their anti-missile defense system for commercial airliners. Company officials at Thurgood Marshall Baltimore-Washington International Airport displayed one of the nearly one dozen FedEx planes that were used to test the system for more than a year. The system uses lasers to confuse heat-seeking missiles.

The ability of Fannie Mae and Freddie Mac to sustain their top AAA ratings is “open to question” amid rising delinquencies on their loans and guarantees, CreditSights Inc. strategists said. The national debt and guarantees of the companies total $5.7 trillion, CreditSights said, 20 times their shareholders’ equity.

Hotel operator Marriott International Inc. of the District gave Chairman and Chief Executive J.W. Marriott Jr. compensation it valued at $9.2 million last year, a 7 percent increase over the previous year. The company’s profit rose 14 percent for the year. Mr. Marriott, 76, was paid a $1.18 million salary last year, but received most of his compensation in the form of incentive payments.

Raytheon Technical Services Co. of Reston, a subsidiary of Raytheon Co., won a $56.9 million contract extension to support facilities and operations for astronaut training at NASA’s Johnson Space Center and Sonny Carter Training Facility in Houston. The extension includes a one-year option that could increase it to $78.3 million.

National

The White House named William Kovacic as the next chairman of the Federal Trade Commission, replacing Deborah Platt Majoras, who resigns at the end of the month. Mr. Kovacic, a free-market advocate, has served as one of the FTC’s five commissioners since January 2006. He will be one of two remaining Republican commissioners after Ms. Majoras leaves.

Citigroup Inc. agreed to pay $1.66 billion to creditors of Enron Corp. who lost money when the energy trader collapsed in 2001. Citigroup was the last remaining defendant in what was known as the “Mega Claims” lawsuit, filed in 2003 against 11 banks and brokerages.

Federal Reserve Bank of Dallas President Richard Fisher, who dissented twice this year on interest-rate reductions, said inflation has risen to an “uncomfortable” level and may stay high as the U.S. economy rebounds. If growth picks up “at a time inflation is at a high base, we create conditions for sustainable inflation over the long run,” he said.

Bankrupt mortgage lender New Century Financial used improper accounting practices while making risky loans, creating “a ticking time bomb” that led to the company’s rapid downfall, a court examiner said. Michael J. Missal concluded that New Century engaged in at least seven improper accounting practices in 2005 and 2006.

Under pressure from the food industry, the Agriculture Department is considering a proposal not to identify retailers where tainted meat went for sale except in cases of serious health risk. Had that been the rule in place last month, consumers would not have been told if their supermarkets sold meat from a Southern California slaughterhouse that triggered the biggest beef recall in U.S. history.

Oil prices soared more than $4 a barrel as two big market drivers — lower than expected fuel inventories and another slide in the dollar — had traders buying in force for the first time in a week. Light, sweet crude for May delivery rose $4.68 to settle at $105.90 a barrel in New York.

General Motors, with light-truck output slowed by a strike at a supplier, may shut its first car-assembly plant by April 4, a union chief said. The American Axle & Manufacturing walkout threatens to deprive GM’s Lordstown, Ohio, factory of a brake part, which would halt work on the Chevrolet Cobalt, said Jim Graham, president of United Auto Workers Local 1112.

Online DVD rental leader Netflix said it will provide a 5 percent credit on the monthly bills of customers whose shipments were delayed by its Monday outage. Netflix would not disclose the number of customers affected, saying only that it “was not a majority” of the company’s 7.5 million members.

Apple Inc. placed an order for 10 million updated iPhones that can download from the Internet at a faster rate than current models, consultant Gartner Inc. said. The new phones operate on third-generation, or 3G, wireless networks, Gartner said, citing an unnamed source in Asia, where the devices will be built. The iPhones also may have a thinner screen that consumes less power.

Google Inc., owner of the most-popular Internet-search engine, saw a decline in the number of users clicking on text advertisements last month, according to Reston-based Internet researcher ComScore Inc. Clicks on Google’s sponsored links alongside search results fell 3 percent to 515 million from the previous month.

Cnet Networks Inc., the online technology-news publisher, said it plans to eliminate 120 jobs, effective immediately. The cuts will result in costs of as much as $4 million for severance and related expenses, with most recorded in the first quarter, the San Francisco-based company said.

International

General Electric Co. said its investigators haven’t been able to substantiate allegations of overworked employees and improper mercury exposure at its Chinese fluorescent-lighting joint venture, Xiamen Topstar Lighting Co. In response to a report Tuesday by an advocacy group, GE said it “immediately” dispatched an environmental health and safety team to the facility.

European Central Bank chief Jean-Claude Trichet warned that global markets were in the midst of a major correction that recalled the 1997-98 Asian financial crisis and the first global oil shock. Mr. Trichet warned against repeating mistakes made in 1973’s oil crisis, when governments responded to higher prices by raising wages and salaries.

Britain’s financial-services regulator conceded that it had done a poor job of supervising Northern Rock, the mortgage lender that became Britain’s most prominent victim of the subprime mortgage crisis. The Financial Services Authority said an internal audit had identified failings such as a lack of adequate oversight and insufficient resources to supervise the company.

Bank of England Governor Mervyn King told Britain’s Treasury Select Committee he would not use aggressive interest rate cuts to rescue banks, saying the risk of losses should remain with shareholders. The bank has moved to pump cash into the economy, but not by reducing lending rates, which have remained at 5.25 percent since December,

Hollywood studio Metro-Goldwyn-Mayer Inc. agreed with one of Abu Dhabi’s largest real-estate developers to build an entertainment destination likely to cost billions of dollars, MGM said. Plans call for a complex with hotels, restaurants, retail and themed attractions based on MGM’s library of films, which include “The Pink Panther,” “Rocky” and the James Bond franchise.

From wire dispatches and staff reports

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