Rick Newman
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The Subprime Perps: Wall Street and Main Street Both
Continue reading… 4 CommentsThis commentary aired on PBS's Nightly Business Report on March 27, 2008:
It's always the little guy who gets fleeced, while the smart money sneaks out the side door.
Right?
Well, not this time. With the subprime crisis metastasizing throughout the financial system, we're seeing something that's as reassuring as it is troubling: Wall Street is taking its lumps along with everybody else.
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The Ambitious Plan Behind the Jaguar-Land Rover Purchase
Continue reading… 4 CommentsExpect to hear a lot more from Tata Group, the big Indian conglomerate that just bought Jaguar and Land Rover from Ford.
The sale of two iconic luxury brands to an Indian automaker known for commercial trucks and the diminutive Nano—a $2,500 "world car" that's 2 feet shorter than a Mini Cooper—might seem surprising. But the $2.3 billion deal has been in the works for months, and it fits clearly into an ambitious expansion plan meant to make Tata one of the world's leading brands in a number of marquee industries.
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What Taxpayers Get From the Bear Stearns 'Bailout'
Continue reading… 16 CommentsIs it a deft financial move? Or a nauseating corporate handout?
The Federal Reserve's intervention in the collapse of investment bank Bear Stearns has clearly calmed financial markets that recently seemed on the verge of panic. Now comes the backlash. Some populist critics are asking why the feds can bail out Wall Street but not Main Street. And the die-hard free marketeers who run the Wall Street Journal's editorial page have decried Fed policymakers as "pushovers," arguing that the Fed's action enriches JPMorgan Chase, which is buying Bear Stearns, at taxpayer expense.
How to characterize the Fed's action is a matter of ideology more than anything else. But there's certainly some benefit to the public from the Fed's intervention. Here are some of the basic facts, which tend to get overlooked as the rhetoric heats up:
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XM and Sirius, Spared From Extinction
Continue reading… 2 CommentsDo government regulators jam to E Street Radio? Or crank up Liquid Metal? Or snicker at Howard Stern?
Maybe so. It took the Justice Department a year to officially ascertain what many consumers already know, but its ruling on satellite radio is evidence of a pretty hip attitude toward music and technology. By approving a proposed merger between the two big satellite radio operators, XM and Sirius—which both lose money, even though listeners love them—Justice may help secure an important source of music and other entertainment that's now threatened by mounting losses.
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Why Gas Prices Rise as the Dollar Falls
Continue reading… 26 CommentsHere's one of those complex economic truisms the financial press assumes everybody understands: A big reason oil and gas prices are hitting record highs is that the dollar is hitting record lows. Got it? The world's petroprinces evidently do. The limp dollar has prompted a bickerfest between President Bush, who's been urging the OPEC oil nations to produce more oil so prices will fall, and OPEC leaders, who say the problem isn't limited production but the weak dollar and economic woes in the United States.
Makes perfect sense—as long as you have a Ph.D. in economics. For those who don't, I asked Kristin Forbes, a professor at MIT's Sloan School of Management and former member of the White House's Council of Economic Advisers, to help explain how exchange rates affect gas prices:
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The Repercussions of $4 Gas
Continue reading… 8 CommentsNow that oil prices have crested another heady threshold—settling above $100 per barrel, for the time being—it's time for motorists to start contemplating another once-implausible scenario: pump prices of $4 per gallon.
Just a few years ago, auto-industry futurists thought that $3 gas would be a game-changer, unnerving consumers and forcing dramatic changes in their choice of cars and driving behavior. Since then, gas prices have spiked above $3 several times, but they've usually drifted back down. Until now. Since last summer, gas prices have steadily ticked upward, to about $3.20. And with the spring and summer driving seasons approaching, many analysts think increased demand and other factors could drive pump prices higher still. "Four-dollar gas is possible, maybe even probable," says Bill Reinert, national manager for advanced technology at Toyota. "We could even see $5 gas."
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How Boeing Blew the Deal of the Decade
Continue reading… 0 CommentsFor more than 50 years, Boeing has enjoyed a sweet setup with the U.S. Air Force: It has been the sole supplier of aerial refuelers critical to keeping short-legged fighter jets and support aircraft in the air on long missions.
By most accounts, Boeing has been in the pole position to win a $35 billion contract to upgrade the Air Force's entire fleet of tankers, a 179-airplane commitment that dwarfs any order a single airline could ever place for commercial jets. As the nation's second-biggest Pentagon contractor, with about $31 billion in defense-related revenues, Boeing has a vast network of backers in every corner of Washington, D.C.
