Sunday February 22 Housing and Economic stories

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TOP STORIES:

Donald Trump Quits Trump Entertainment, Bankruptcy Possible - (www.bloomberg.com) Donald Trump resigned from the board of Trump Entertainment Resorts Inc., the debt-laden casino company he founded, ahead of a possible involuntary bankruptcy filing next week. “I’m not managing it, it’s not me that’s responsible for managing,” Trump, who was chairman, said in a telephone interview today. “Unless we’re going to be responsible for management it’s just not something that’s worthwhile.” Trump’s departure comes ahead of a Feb. 17 deadline to make a $53 million bond payment originally due on Dec. 1. The Atlantic City, New Jersey-based casino operator said at the time it needed to conserve cash and hold debt-restructuring talks with lenders. Since an initial grace period ended on Dec. 31, Trump Entertainment’s deadline has been extended four times. The 62-year-old real estate entrepreneur has “no idea” whether there will be a bankruptcy filing, he said. Trump is “not thrilled” the company may continue to use his name. Bondholders are planning to force Trump Entertainment into Chapter 11 bankruptcy early next week, the Wall Street Journal reported today, citing unidentified people familiar with the matter. Trump controls 28 percent of the stock, according to a March 21 regulatory filing. His daughter, Ivanka Trump, also resigned, according to an e-mailed statement. “I strongly disagree with the bondholders’ decisions and actions,” Trump said in the statement without elaborating. Tom Hickey, a spokesman for Trump Entertainment, and Chief Financial Officer John Burke didn’t return phone messages left after normal business hours. ‘It’s a Disaster’

Sirius could file bankruptcy as early as Tuesday - (www.sfgate.com) Financially strapped Sirius XM Radio Inc. said Friday that it could file for bankruptcy as early as Tuesday if it cannot successfully negotiate with the holders of its debt. While the satellite radio company said it has exchanged $172.5 million of debt maturing in December for new debt due in 2011, it still has about $175 million coming due this Sunday. Sirius is fighting against attempts for control by Charlie Ergen, the chief executive of Dish Network Corp. and sister company EchoStar Corp. Ergen bought much of a $300 million batch of discounted Sirius bonds that come due next week. Sirius had rejected a previous offer by Ergen for control of the company.

U.S. auto suppliers seek $18.5 billion in government aid - (www.reuters.com) U.S. auto suppliers submitted a formal request to the U.S. Treasury on Friday for $18.5 billion in emergency funding to avoid a wave of bankruptcies and a deeper crisis in the auto industry. The request, which was submitted by two industry groups, outlined three proposals for financial relief. The proposals say the government could guarantee supplier receivables from U.S. automakers, accelerate payment terms or guarantee commercial loans to parts companies. The formal petition was filed by the Motor & Equipment Manufacturers Association and its affiliate, the Original Equipment Suppliers Association (OESA). The submission includes a request for $10.5 billion in guarantees for receivables and accelerated payment terms, as well as $8 billion in direct loans, OESA President Neil De Koker said.

The Worst Misstep: Geithner Added to the Doubt - (www.nytimes.com) TIMOTHY GEITHNER, the brand new Treasury secretary, was panned last week for how he unveiled the Obama administration’s plan to rescue the financial system from the bankers who broke it. Mr. Geithner was not especially articulate, his critics said, and he provided only an outline of an outline, not the detailed blueprint people anticipated and wanted. To a degree, one of Mr. Geithner’s biggest problems was not of his own making. His boss, President Obama, had fanned expectations for his debut as Mr. Fix-It, leaving the impression that it would be boffo. It wasn’t. Why is anyone surprised that Mr. Geithner’s Financial Stability Plan lacked details? We are still in sugar-coating mode — yes, we have a problem, government officials contend. But they can handle it. Don’t you sweat the details, dear taxpayers. To be sure, Mr. Geithner is in something of a box. If he were to lay out precisely how he plans to save the financial system, he might actually telegraph to the public that the problem is more dire than they suspect. Being vague might be less scary. Unfortunately, market participants have lost their patience with vague. Uncertainty, for investors anyway, can be worse than simply acknowledging genuinely grim circumstances. Treasury’s fuzziness, of course, also provides an opening for corporate lobbyists to step into the vacuum and bend the program to suit their needs. Taxpayers, on the other hand, don’t have lobbyists arguing on their behalf.

SEC probing alleged improper trades by hedge funds - (news.yahoo.com/s/ap) Federal regulators are investigating allegations by a large insurer that several hedge funds conspired to drive down its stock price by using advance notice of an analyst's negative report about the company. The Securities and Exchange Commission is examining the situation involving insurer Fairfax Financial Holdings Ltd., a person familiar with the inquiry said Friday. The person spoke on condition of anonymity because the investigation has not been made public. Fairfax Financial, a Canadian property and casualty insurer, brought the allegations in a lawsuit filed in July 2006 in state court in New Jersey. Documents submitted in the ongoing case indicate that executives of the hedge funds discussed the upcoming report of the analyst, John Gwynn of Morgan Keegan Inc., who was fired by the brokerage firm in August 2008. The hedge funds — SAC Capital Advisors, Third Point LLC and Kynikos Associates — used knowledge of Gwynn's report before its public release to bet against Fairfax Financial's stock by short-selling it, the insurer alleges. Short sellers borrow a company's shares, sell them, and then buy them when the stock falls and return them to the lender, pocketing the difference.

Las Vegas Sags as Conventions Cancel - (www.nytimes.com) This city’s reputation as freewheeling and anything goes may have made it the champion of convention markets. But the city’s image — so successfully cultivated in the “What Happens Here, Stays Here” advertising campaign — is not squaring with the new era of fiscal restraint brought on by the economic crisis. Skip to next paragraph A rash of conference cancellations, and a presidential admonishment peppered with a Las Vegas reference last week, has unnerved politicians and resort executives who are fearful that the all-important convention industry could be on the verge of collapse. “It’s certainly a moment we should all pay great attention to,” said Jan L. Jones, senior vice president for Harrah’s Entertainment, which had a 30 percent decline in convention business in January compared with a year ago at its seven resorts on the Strip. “Las Vegas has long tried to balance the image of party town, serious town. This is an opportunity for us to remind business why they do business here, and it’s because it’s the best value.” In the last month, 30,000 hotel room nights booked for conferences have been canceled at an estimated loss of $20 million to the city, according to the Las Vegas Convention and Visitors Authority.

Regulators Shut Four Small Banks - (online.wsj.com) Regulators shut down small banks Friday in Nebraska, Florida, Illinois and Oregon, marking the year's 10th, 11th, 12th and 13th failures as a severe U.S. recession continues to pound financial institutions across the U.S. The four seizures represent the most to go under on a single day so far in 2009. Regulators are bracing for dozens more to collapse in the coming months,

Morgan Stanley, Citi Eye Retention Fees - (online.wsj.com) Building the biggest brokerage firm on Wall Street is proving costly to Morgan Stanley and Citigroup Inc., which are planning to pay brokers about $3 billion to keep them from being poached away from the joint venture, people familiar with the matter said. While the terms aren't expected to be announced until later this month, the issue could grow politically sensitive, because the U.S. government holds stakes in Citigroup and Morgan Stanley as part of its bailout of the financial system.


OTHER STORIES:

Failed Banks Pose a Big Test for Regulators - (www.nytimes.com)
Treasury Boss Taking Fire in Europe Over Stimulus - (www.nytimes.com)
Rise in Jobless Poses Threat to Stability Worldwide - (www.nytimes.com)
Stimulus Plan Receives Final Approval in Congress - (www.nytimes.com)
Hints of Which Sectors Will Weather the Storm - (www.nytimes.com)
As Stimulus Grows, So Does Task of Closing Whopping Deficit - (www.washingtonpost.com)
A Stress Test for the Latest Bailout Plan - (www.nytimes.com)

As Housing Prices Plunge, Refinancing Gets Harder - (www.cnbc.com)
Carlos Slim Not Interested in Citi's Banamex - (www.cnbc.com)
Stimulus Spending: Lessons From Japan - (www.cnbc.com)
GM, Chrysler Labor Talks Slow As Deadline Nears - (www.cnbc.com)
Stimulus Plan Places New Limits on Wall St. Bonuses - (www.cnbc.com)
Obama Vows Quick Action on Stimulus - (www.cnbc.com)
Alleged Swindler Nadel To Stay Behind Bars - (www.cnbc.com)

White House seeks to ease final rules on bank pay limits - (www.latimes.com) Aides to President Obama suggested today that he wants to soften the curbs on...more
Investment losses can lower your tax bill - (www.latimes.com) There's at least a little silver lining to the disaster that befell your portfolio last year. more
Owners of Park LA showroom fashion their own success - (www.latimes.com) As representatives of several designers, they sell clothing wholesale to boutiques as well as giant... more
Fannie Mae, Freddie Mac are raising fees, toughening rules for credit scores and down payments - (www.latimes.com) Under the new guidelines, even applicants who assumed that their FICO scores would get them favorable...more

Go Ahead and Save. Let the Government Spend. - (www.nytimes.com) The government is in a far better position than consumers to provide immediate economic stimulus.
Hints of Which Sectors Will Weather the Storm - (www.nytimes.com) Market volatility appears to be revving up again but various sectors have not all been moving in tandem.
The Optimists’ Club - (www.nytimes.com) Although real estate is moving like glue, the agent’s licensing exam is still finding takers: Models. Bartenders. The superconfident.
Auto Workers’ Talks With G.M. Are Said to Break Off - (www.nytimes.com) The issue of health care costs for retired workers was a stumbling block, a person briefed on the talks said on Saturday.
The Big Guns Unload - (www.nytimes.com) Soon after the collapse of Lehman Brothers last fall, a wave of luxury listings appeared on the market.

U.S. Considers More Mortgage Aid - (online.wsj.com)
Sprint Official to Shape Telecom Policy - (online.wsj.com)
The Obama administration has tapped a Washington executive of Sprint to help run an agency that shapes telecommunications policy and will dole out stimulus money to wireless providers.
Lloyds Warning May Shake U.K. Bailout - (online.wsj.com)