NEWS AT A GLANCE
HSBC, BoA take new write-downs
HSBC, Europe’s largest bank, said it will write down $3.4 billion in bad loans at its U.S. consumer finance division, but that its profits will still grow due to strength in Asia and the Middle East. (MarketWatch) Yesterday, Bank of America warned that it will write down $3 billion in mortgage-related investments and spend up to $600 million to prop up money-market mutual funds exposed to troubled structured investment vehicles. In all, banks have written down about $45 billion in subprime-related losses so far. But “unless something enormous and unforeseen happens, major, diversified, well-capitalized banks can handle these losses,” said Marshall Front of Front Barnet Associates in Chicago. (Reuters)
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Steelmaker ArcelorMittal beats forecasts
ArcelorMittal, the world’s top steelmaker, reported a greater-than-expected 36 percent jump in quarterly profits, to $3 billion. The Luxembourg-based company, created last year through the merger of India’s Mittal Steel and Arcelor, makes 10 percent of the world’s steel, three times more than its closest competitor. It was able to use its dominant market share to get lower prices from its suppliers. (MarketWatch) Higher demand from China and India helped compensate for decreasing demand in the U.S. and Europe. “The group is doing very, very well in a relatively tough market,” said Credit Suisse analyst Michael Shillaker. (Bloomberg)
Peltz bids on Wendy’s
Triarc Cos., the owner of Arby’s, made a bid for Wendy’s that is lower than the $3.2 billion to $3.6 billion it was willing to offer over the summer. Billionaire investor Norman Peltz is both Triarc’s chairman and a major Wendy’s shareholder. Initial interest in buying Wendy’s has dried up as the credit market tightened. (The Wall Street Journal) In other fast-food news, McDonald’s announced plans to sell 1,000 to 1,500 of its 7,000 company-owned stores to franchisees and expand its beverage offerings. McDonald’s coffee sales rose 39 percent this year as it introduced a stronger blend, and it is rolling out espresso drinks and more to capture more of the $60 billion beverage market. (Chicago Sun-Times)
At Disneyland, forever
Last Friday, the “Pirates of the Caribbean” ride at Disneyland was shut down after someone was seen dumping a powder into the water—employees say it was human ashes. It is a misdemeanor in California to scatter ashes on private property without permission. But as more people opt for cremation instead of expensive burials, the state’s Cemetery and Funeral Bureau is fielding more ash-scattering complaints from golf courses and other venues. “If these were rogue funeral directors out there tossing remains out of rides, we would take a very dim view,” said bureau spokesman Kevin Flanagan. “But how are you going to enforce something like that?” (Los Angeles Times, free registration required)
