Housing woes spread on both sides of the Atlantic

Home prices in the U.K. fell an annualized 4.8 percent in August, the steepest fall since top British property Web site Rightmove started tracking prices in 2002. Analysts blamed a lack of mortgage financing, a casualty of the global credit crunch. (Bloomberg) The housing slump in the U.S., meanwhile, helped push profits down 7.9 percent at home-improvement chain Lowe’s, to $938 million, as fewer people spent money on high-end remodeling. The results beat analysts’ forecasts; Lowe’s lowered its quarterly forecast but raised its full-year outlook. (Reuters) Lowe’s rival Home Depot, which reports earnings tomorrow, is expected to post its eighth consecutive fall in profits, and could lower its annual forecast as the housing weakness drags on. (Bloomberg)

Japan’s MUFG bank sets UnionBanCal buyout

Mitsubishi UFJ Financial Group, Japan’s biggest bank, upped its offer for the 35 percent of San Francisco-based UnionBanCal it doesn’t already own. UnionBanCal’s board approved the new offer, $3.5 billion, after rejecting as too low a $3 billion bid made last week. (MarketWatch) The purchase price values UnionBanCal at about $10.5 billion, making it one of the top 25 U.S. banks. (The New York Times) UnionBanCal, with 330 branches along the West Coast, largely avoided subprime lending and other practices that are now dogging its peers. “It makes a lot of sense to increase the offer and get UnionBanCal’s blessing and get the deal done,” said analyst David Threadgold at Fox-Pitt Kelton Asia. (Bloomberg)

Miner BHP Billiton posts record profit

BHP Billiton, the world’s top mining firm, posted a 12 percent rise in full-year profit, to a record $15.4 billion, on high commodity prices and strong demand from China. (The Times of London) In just the second half of the year, BHP Billiton’s profit soared 30 percent, at $9.4 billion. The earnings, which matched expectations, included record profits in oil, manganese, iron ore, base metals, and energy coal. While BHP remains “confident on outlook,” said ING Bank analyst Nick Hatch, it is sounding an “understandable note of caution on short-term outlook.” (Bloomberg) BHP cited high energy costs and economic weakness in developed countries as near-term challenges. (MarketWatch)

Brazil’s currency and the price of fame

Brazil’s currency, the real, is on a tear, and that means U.S. celebrities are cheap. Boosted by strong soy, iron ore, and orange juice prices, Brazil’s economy has expanded for 25 straight quarters, and the real recently hit a nine-year high against the U.S. dollar. Marketers in the country are using the favorable exchange rate to hire celebrities such as Sarah Jessica Parker, Richard Gere, and Kiefer Sutherland, and at lower prices than local talent. That’s a sign of trouble, analysts say. “The real is overvalued,” said economist Tony Volpon at CM Capital Markets. “These signs—the Hollywood stars on TV, the imported iPhones we see all over the place—they are all micro evidence of what we are starting to see at the macro level.” (Bloomberg)