CFTC speculates on oil contracts

The Commodities Futures Trading Commission has found that financial firms speculating for themselves or for clients hold 81 percent of oil futures contracts on the New York Mercantile Exchange. That number, much bigger than previously stated, could grow as the CFTC looks into other big lenders. A good example is Vitol, a Swiss firm long listed as an oil-services provider. The CFTC, after looking at its books, found that Vitol was buying oil contracts as investments, not to actually deliver oil, and at one point in July held 11 percent of all NYMEX oil contracts. Some lawmakers, but not the CFTC, blame speculators for the sharp rise in oil prices. (The Washington Post) Oil rose above $116 a barrel early today. (AP in Yahoo! Finance)

Germany’s Schaeffler becomes top auto-parts group

German auto-parts company Schaeffler reached a deal to buy a controlling stake in larger German rival Continental AG, creating the world’s largest car-parts group. The deal came after Schaeffler raised its offer to $111 a share and agreed to buy no more than 49.99 percent of Continental for four years. (Bloomberg) Continental CEO Manfred Wennemer, who opposed the deal, said he would step down. In all, Schaeffler could pay up to $9.6 billion. (MarketWatch) “In the long term, this is a no-brainer stock to have but investors will have to wait a long time to see whether the synergies will improve Continental’s bottom line,” said FrankfurtFinanz Partner analyst Heino Ruland. (International Herald Tribune)

Lone Star buys first German subprime casualty

U.S. private equity firm Lone Star agreed to buy 90.8 percent of IKB Deutsche Industriebank, Germany’s first and most prominent casualty of the subprime crisis. IKB has already been bailed out three times, at a cost of $11.8 billion, primarily by Germany’s state bank KfW. (Reuters) KfW, which announced the deal, currently owns about 46 percent of IKB, but will get a roughly 91 percent stake later this year due to the bailout. (MarketWatch) KfW didn’t disclose the purchase price, saying only it fell short of the target price of $1.2 billion. “This will finally bring clarity and calm,” said KfW administrative board member Christine Scheel. “It was the right decision to sell the bank as quickly as possible.” (Bloomberg)

The fall of the aspiration shopper

People are still going to the mall, but the data suggest that middle- and upper-income shoppers are now shopping below their means, perhaps at Marshalls, instead of shopping up at stores like Nordstrom. This is obviously a problem for high-end retailers, but it’s also a challenge for the shopping centers that rent space to them. To draw customers, mall owners are doing things like putting on free concerts, and to keep desirable tenants some are making concessions on rent or upgrading facilities. “For years the market strength was in luxury,” said chief economist Michael Niemira at the International Council of Shopping Centers. “Now it’s Wal-Mart.” (Los Angeles Times)