Airbus Turbulence, Boeing Appeal

EADS, the parent of Airbus, books its first annual loss in five years. Boeing cries foul over the Air Force

NEWS AT A GLANCE

EADS reports first loss in five years

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Boeing protests tanker deal

Boeing said it is filing a formal protest over the U.S. Air Force’s decision to award a $35 billion aerial refueling plane contract to Northrop Grumman and European archrival EADS. (Reuters) Boeing’s appeal will suspend the contract for up to 100 days, during which Boeing has to convince the Government Accountability Office, the investigative arm of Congress, that the Air Force violated Pentagon procurement rules or U.S. law. “I don’t think their chances are good,” said Jon Kutler at Admiralty Partners Inc. The Air Force “dotted every ‘i’ and crossed every ‘t’ because they knew how politically charged the whole thing would be.” (Bloomberg)

Societe Generale raises $8.5 billion

Societe Generale, France’s second-largest bank, raised $8.5 billion in a share offering, as it works to recover from an enormous trading scandal. The offering was oversubscribed by 184 percent, the bank said. (AP in Yahoo! Finance) Its success could help Societe Generale avoid a takeover. In the offering, existing shareholders were given the right to buy one new share at a discount for every four shares they owned. (MarketWatch) “The price was very interesting if you were an existing shareholder,” said Emmanuel Soupre at Neuflize Gestion in Paris. “It’s not a bad bank. It had a serious incident, but that doesn’t change the fact that it still makes large profits.” (Bloomberg)

Buzz inflation

The morning cup of coffee is getting more expensive. World coffee prices have jumped 23 percent in the past six months, fueled by speculative investing in commodities, and the weak dollar makes importing the bean somewhat more expensive. But without a drop in supply, the price hikes in U.S. grocery stores and coffee shops, which started with Starbucks last July, are hard to explain. “There is nothing fundamentally that suggests coffee should be higher,” said coffee buyer Jay Isais at Los Angeles-based Coffee Bean & Tea Leaf. Prices for low- to medium-quality beans are rising faster than for premium beans. (Los Angeles Times, free registration)