Permalink | Email this | Linking Blogs | Comments

MAJOR PAPERS:

• The banking unit of National City Corporation (NYSE: NCC) recently entered into a "memorandum of understanding" with federal regulators, the Wall Street Journal reported. The banking unit has bad loans, and the agreement basically means that the bank is on probation, as the government pressures financial institutions.
• The Wall Street Journal also reported that Justice Department criminal prosecutors and its U.S. attorney's office in Brooklyn, NY are investigating American International Group Inc (NYSE: AIG) to see if they overstated the value of contracts tied to subprime mortgages.

• Lehman Brothers Holdings Inc (NYSE: LEH) is thinking of releasing its Q2 results a week earlier than planned, and announcing a capital raising plan at the same time, according to the New York Post, in order to reduce negative speculation about its future.
• The Economic Times reported that Indian auto companies Tata Motors Limited (NYSE: TTM) and Mahindra and Mahindra may be interested in acquiring Hummer from General Motors Corporation (NYSE: GM).

Permalink | Email this | Linking Blogs | Comments

Ford Motor Co. (NYSE: F) is cutting production at its Volvo unit, according to The Wall Street Journal. The move, which could affect one-third of workers -- some 700 -- is seen as an attempt to cut the costs and losses at the upscale Swedish brand.

The question everyone is asking is whether this move is done in preparation for a sale. According to "people familiar with the matter" who discussed such things with the Journal, CEO Alan Mulally is interested in putting Volvo, whose sales have been declining, on the block. Of course, to analysts, Mulally sang a different tune last month, saying the priority is improve the Swedish auto maker operations "dramatically."

As Kirk Kerkorian's Tracinda Corp. continues to build its stake int he company, he may also have a thing or two to say on the matter.

For now, Volvo is cutting where it makes larger, less popular vehicles, and it plans to make fewer cars overall. But can this make Volvo more profitable for Ford, or at least more attractive to buyers? There are costs associated with producing a smaller number of vehicles, but with Volvo reporting 22,000 fewer vehicles sold during the first quarter, cutting production makes sense. Another matter Ford has to consider is the massive losses it suffered lately just from the kronor-dollar exchange rate.

It was nearly a year ago that speculation ran amok that German carmaker BMW could be interested in buying Volvo. Could it still be interested? Years back, Renault was interested too. With the credit crunch still crimping deals, and with some major players like private equity -- keeping in mind Chrysler's sale to Cerberus -- absent, it's likely such a sale could be postponed.

After selling its Land Rover and Jaguar units to India's Tata Motors Ltd. (NYSE: TTM) in a deal worth $2.3 billion, and Aston Martin for $848 million to investors led by David Richards, if Ford sells Volvo, it will be left only with Lincoln as its luxury line.

Read | Permalink | Email this | Linking Blogs | Comments

It was reported long ago that Ford Motor (NYSE: F) was shopping its Jaguar and Land Rover brands. Today it finally announced it has closed the deal to sell these premier British brands to Tata Motors (NYSE: TTM) of India for $2.3 billion. Ford, which has been losing money, found its share price way down, closing yesterday at $5.96 (now up a few cents in premarket trading) and was in need of a cash infusion.

Tata Motors, having just introduced a low-end $2,500 car to the Indian market, is now filling out the upper end of the spectrum by bringing these two well known British brands to a country with a tradition and heritage long ago saturated with British "imperialist" remnants like cricket and tea time. If Jaguar and Land Rover are to be revitalized, then Tata Motors probably has a better chance of success than most.

Ford bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000. Nine months ago I posted Chasing Value: Tata Motors LTD - patience, patience, GOT IT! and now Tata has got it! What it hopes to do with these brands is gain some international credibility, based on a solid Indian foundation.

Tata's stock closed yesterday at $17.36, up slightly on the rumors. It is about midway between its 52-week low of $14.71 and its high or $21.30. This deal could send both companies forward humming a new tune. I would even speculate more wildly just for fun that in this world of expanding markets, integrated economies and corporate consolidation, Ford and Tata Motors could one day find reason to unite.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: We own shares in TTM.

Read | Permalink | Email this | Linking Blogs | Comments

Permalink | Email this | Linking Blogs | Comments

Permalink | Email this | Linking Blogs | Comments

Permalink | Email this | Linking Blogs | Comments

MAJOR PAPERS:

• The Wall Street Journal reported that private loans under the Federal Family Education Loan, or FEEL, program have begun to give way to the federal direct loan program, as private lenders run into subsidy cuts and problems raising capital. To date about 60 colleges and universities have made the switch.
• Carl Icahn, a 6.3% Motorola Inc (NYSE: MOT) shareholder, has sued the company to get board of director documents, turning away offers of two board seats, the Wall Street Journal reported. Icahn wants information about the company's unprofitable handset business.
• Ford Motor Company (NYSE: F) is expected Wednesday to announce an agreement to sell its Jaguar and Land Rover units to India's Tata Motors Limited (NYSE: TTM) for about $2B, the Financial Times reported.

• According to the Business Review, New York State Senator Charles Schumer is planning to 'reveal details' of a conversation he had with the CEO of Advanced Micro Devices Inc (NYSE: AMD) on March 21 about the company's plans to build a $3.2B computer chip plant in Saratoga County.

Permalink | Email this | Linking Blogs | Comments

Permalink | Email this | Linking Blogs | Comments

MAJOR PAPERS:

• Nokia Corporation (NYSE: NOK), Samsung Electronics and LG Electronics have said no to buying Motorola Inc's (NYSE: MOT) handset business, and potential Chinese interest is not there. The perception now, according to the Wall Street Journal's "Heard on the Street," is that Motorola's problems may be to difficult to fix.
• The Financial Times reported that the Los Angeles city attorney launched a wide-ranging legal action on Thursday against Health Net Inc (NYSE: HNT), one of California's biggest health insurance providers, accusing the company of defrauding customers by setting illegal policy cancellation targets for its sales agents.

• According to sources, the Economic Times reported that Tata Motors Limited (NYSE: TTM) may be looking to spin off Jaguar into a separate entity once the acquisition of the brand from Ford Motor Company (NYSE: F) is complete.
• The U.S. government has approved the first virtual fence, built by The Boeing Company (NYSE: BA), along the U.S.-Mexico border in Arizona, the Associated Press reported. Along the 28 mile stretch of border, radar and surveillance cameras will be used to try to catch people entering the country illegally.

Permalink | Email this | Linking Blogs | Comments

Permalink | Email this | Linking Blogs | Comments

Toyota's (NYSE: TM) net grew 7.5% in the last quarter, but it indicated that it may not be quite so fortunate in the current period.

According to Reuters, the improvement was due to "speedy sales growth in China, Russia and other emerging markets." The big car company said it was still worried about the US economy.

The figures from the Japanese company show the difficulties that all of the global automotive firms face now. They are seeing double-digit sales increases in emerging markets, but in their largest market, the US, sales could be extremely poor this year.

Even that analysis masks the real long-term threat to Toyota's growth. In most emerging markets, there are already large automotive firms. Those include Shanghai Automotive in China and Tata Motors (NYSE: TTM) in India. These companies are not going to let big overseas operators simply come into their countries and take large pieces of the market.

The US economy may be the short-term enemy to Toyota, but competition in emerging markets is likely to be its challenge for the next decade.

Douglas A. McIntyre is an editor at 247wallst.com.

Read | Permalink | Email this | Linking Blogs | Comments

GM (NYSE: GM) does not like to be trumped. Last week, India's Tata Motors (NYSE: TTM) launched a car that costs about $2,500. It is geared to consumers who only have money to drive motorcycles now. The vehicle may sell well in India, but Tata understands that it could be exported to other emerging markets like Russia and China.

GM does not need any more competition in emerging countries. With its sales flat to down in the U.S. market, the company says its goal is to have 75% of its sales from outside America in just a few years. To do that, GM will need cars to fit the markets, not just versions of GM cars that it can build and sell abroad.

According to The Wall Street Journal, "GM's Asia-Pacific chief is working on developing a car for emerging markets that could play in the sub-$4,000 price range, as the company looks to compete with auto makers that are already building cheaper cars."

The plan may look good, but only if GM can find facilities and a workforce that is cheap enough to build a super-low-cost vehicle at a profit. With wages rising in China and India due to increased demand for products from these countries, the job may be difficult.

GM may want to be in the $4,000 car business, but it is not clear that it is a business which GM can afford.

Douglas A. McIntyre is an editor at 247wallst.com.

Read | Permalink | Email this | Linking Blogs | Comments

Toyota (NYSE: TM) sees a bright future for itself in India. Since the country is building a number of new roads and drivers are moving from motorcycles to cars, that would make sense. But the Japanese car company has to get busy. According to The Wall Street Journal, "In all, GM (NYSE: GM) remains ahead of its Japanese rival in 15 of the world's 20 largest car markets." And China, India, and Russia are going to be critical to the global growth of any car company.

To enter India, Toyota will have to produce very cheap cars, but it wants to maintain its reputation for quality. That could keep margins low.

The largest car company in Japan also must face the fact that many car companies already have footholds in India, so Toyota is not moving into the market at its earliest stages. Local companies like Tata Motors (NYSE: TTM) are likely to put up a spirited defense of their sales.

Toyota may have found moving into the U.S. market relatively easy. When the economy is good, American car sales can run close to 17 million units a year. People buy new cars every two or three years. Quality is important to consumers.

India may be very, very different. And plenty of rivals are waiting to keep Toyota out.

Douglas A. McIntyre is an editor at 247wallst.com.

Permalink | Email this | Linking Blogs | Comments

Autoblog Gallery: Tata Nano

Read | Permalink | Email this | Linking Blogs | Comments

Ford (NYSE: F) will probably sell its Jaguar and Rover units to India's Tata Motors (NYSE: TTM). But the U.S. car company wants to go beyond that and build its own presence in the huge country. Ford will put up $500 million to increase its manufacturing operations in India between now and 2010. It will also develop a small car for sale in the country.

"This new investment highlights the significance of India's role in our continued expansion and overall strategy for the Asia-Pacific and Africa region," John Parker, executive vice president of Ford for Asia-Pacific and Africa, told Reuters.

While India's car market is growing fast, Ford may find that it is a little late to a very competitive game. Large rivals from Europe, GM (NYSE: GM), and Toyota (NYSE: TM) all want a piece of the same market, and India has its own car companies protective of their turf.

GM announced that it hopes to have 75% of its sales overseas in 10 years. Ford probably has similar goals because the U.S. car market is both competitive and slow-growing. But that means that a number of companies are all trying to get share in the same markets -- India, China, Russia, and South America. Ford would not seem to have any big advantage in this race, and its fairly weak balance sheet is not likely to help it expand.

Douglas A. McIntyre is an editor at 247wallst.com.

Read | Permalink | Email this | Linking Blogs | Comments

Seems the world economy is growing and changing so fast that staying on top for very long will become harder. Carlos Slim of Mexico did not retain the title very long, as CNBC is reporting Meet the World's New 'Richest Person' -- For Now, a story about Mukesh Ambani. It has been reported that he is just completing a ONE BILLION DOLLAR HOME! Here's how the Indian press reports rank the world's top five richest people as of today, based on known public stock holdings:

• Mukesh Ambani - $63.2 billion
• Carlos Slim Helu - $62.2993 billion
• William (Bill) Gates - $62.29 billion
• Warren Buffett - $55.9 billion
• Lakshmi Mittal - $50.9 billion

What's more important is who is taking what actions. What are these supernova rich guys doing with their wealth? In the case of Gates and Buffett, they have become the world's biggest philanthropists. Carlos Slim has expressed a desire to share his wealth as well by setting up a $10 billion foundation -- I'm not sure how far he has gone with that idea. Mittal is still busy buying up all the steel production on the planet, and is now the largest player in the market. That will increase his wealth for now. On the other hand, the Hunt Brothers of Texas thought that way in the 1970s about silver, and found out rather quickly that was not their brightest idea. Steel is likely a much better bet.

Portfolio.com portrays Ambani, 50, chairman of Reliance Industries, as India's premiere capitalist, directing sprawling business operations that include petrochemicals, oil refining, textiles, retail and biotechnology. Ambani's father built Reliance up from a handful of textile mills (sound familiar Buffett followers?) into an industrial conglomerate that represents about 3% of India's $4.1 trillion economy, with annual revenue of more than $27 billion, almost as much as the better-known Tata Group.

Unlike some of the other super-billionaires, Ambani must believe charity begins at home, because he has spared no expense in his. He has chosen to live the most extravagant of lifestyles, and does not seem to mind being celebrated for it. While the family -- including Ambani's wife, Nita, who looks after Reliance's Foundation's corporate-responsibility program -- has supported many charitable organizations, Ambani must be saving his best for last, because to date all of his contributions would be through expanding economic development.

If you are a shareholder you might do well, but if you are not, you might have to wait a few more generations to be lifted out of poverty by Ambani's efforts. But, things change fast as discussed earlier, and I would like to think that upon the completion of his new living quarters, he starts to build the largest of philanthropic organizations to channel his vast and growing resources.

Nita deflects attention from her family's work in India by moving to a more global discussion, saying "I think we are making steps, but today it's important that we talk about humanity at large. I don't think it's 'India this and that,'" Nita says when asked whether India is moving in the right direction in terms of evening the disparity between rich and poor. "Look at Africa. There are huge belts of people who live on less than $1 a day. We have to address this issue, without getting into 'country.' Every one of us is responsible for all of humanity."

Well certainly we all have some responsibility, but with $63 billion in assets, I would think some should be more responsible than others.

Disclosure: I have received the benefit of investing in two Indian companies -- Tata Motors Ltd (NYSE: TTM) and ICICI Bank (NYSE: IBN) -- both up substantially.

To find potential opportunities and verify my track record, read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

Read | Permalink | Email this | Linking Blogs | Comments

This is the fourth update on the stock price status of the first seventeen Chasing Value companies. Closing prices are from September 14, 2007.

The first quarter produced amazing results but the second quarter was downright sad. No one will be surprised to see that anything touching constuction or finance took a bath. I own most of these stocks, so if you do too, I feel your pain. Anyone considering my commentary should "do their homework" too, as James Cramer says on his Mad Money TV show. These recommendations are from the first and second quarter 2007 and I have linked to the original stories.

February 16, 2007: Chasing value: Wells Fargo: Wells Fargo & Company (NYSE: WFC) closed at $35.66 down from $35.76: a loss of -0.02%, even money.

February 23, 2007: Chasing value: Anadarko Petroleum - got it! Anadarko Petroleum Company (NYSE: APC) closed at $50.58 up from $40.84: A gain of 23.85%.

March 3, 2007: Chasing value: Aluminum Corporation of China ADS: Aluminum Corp. of China (ADS) (NYSE: ACH) closed at $60.95 up from $22.98: A gain of 165%

March 20, 2007: Chasing Value: Anglo American - Inflation hedge & more: Anglo American plc (NASDAQ: AAUK) closed at $28.90 up from $24.65: A gain of 17.24%

March 23, 2007 Chasing Value: Cemex and LaFarge look solid: CEMEX S.A. B de C.V. (ADR) (NYSE: CX) closed at $29.17 down from $34.92: A loss of -16.47%. LaFarge (ADS) (NYSE: LR) closed at $37.80 from $39.02: A loss of -3%.

Cemex sank with the continuous reports of the deteriorating housing market in the United States. In the meantime it continues to move forward with the integration of Rinker, the largest supplier of construction materials in Australia. This makes Cemex the largest in the world and sets the stage for continued growth in Southeast Asia. It also is continuing to focus on reducing debt.

Of all the stocks I have written about in the Chasing Value section, I feel that this one suffered the most from guilt by association. I believe it was fairly valued before and it is on sale now. This company, with it's PEG ratio at .83 and lowered, P/E, P/S, P/B (SEE: AOL Money & Finance) has a ROE over 22 and pays about a 2% dividend yield.

April 6, 2007: Chasing Value: Johnson & Johnson (NYSE: JNJ) closed at $63.20 up from $61.25: A gain of 3.18%

April 11, 2007: Chasing Value: Duke Energy (NYSE: DUK) closed at $18.66 down from $19.00: A loss of -.018%, even money.

April 11, 2007: Chasing Value: Washington Mutual - WaMu (NYSE: WM) closed at $35.53 down from $39.00: A loss of -8.9%

April 17, 2007: Chasing Value: Bear Stearns - cheap and growing (NYSE: BSC) closed at $117.19 down from $148.00: A loss of -20.82%

April 18, 2007: Chasing Value: InfoUSA: Low share price for the kids (NASDAQ: IUSA) closed at $9.56 down from $10.53: A loss of -8.93%

May 1, 2007: Chasing Value: IndyMac Bancorp - once in a lifetime (NYSE: IMB) closed at $22.95 down from $30.09: A loss of -23.73%

May 29, 2007: Chasing Value: USG -- A bargain, plain and simple! (NYSE: USG) closed at $36.37 down from $52.00: A loss of -29.42%

June 7, 2007: Chasing Value: Quest Diagnostics Inc. (NYSE: DGX) closed at $55.53 up from $50.83: A gain of 9.25%

June 11, 2007: Chasing Value: Berkshire Hathaway -- the time is now (NYSE: BRK.B) closed at $3,995.95 up from $3,612: A gain of 10.36%

June 12, 2007: Chasing Value: Tata Motors LTD - patience, patience, GOT IT! (NYSE: TTM) closed at $17.02 up from $16.00: A gain of 6%

June 19, 2007: Chasing Value: Bank Popular (BPOP) should be very popular (NYSE: BPOP) closed at $12.03 down from $17.00: A loss of -29.24%

Well, if you bought into my first quarter picks, you would be putting me on a pedestal and if you bought into my second quarter picks, you would be knocking it down. However, If you were to have acquired equal dollar amounts of all seventeen stocks, you would be up 5.55% plus dividends. The S&P 500 was up about 3.5% through September 4, 2007 plus dividends. In my last update the "scoreboard" was quite amazing and I wrote that someday I might have to eat humble pie. Through June that is the case because I expected to have done much better.

The question now is whether the financials have absorbed too much fear and pessimism overshooting the mark to the low side, or if the fear is justified and there is a lot of bad news that has not yet surfaced.

My own feeling is that all the bad news, and then some is priced into these stocks. Interest rates will stay flat or go down over the next few months easing some of the pressure on many of my picks and the overall market. Many of these companies will improve as many of their competitors disappear. For the most part it's clear I was too optimistic about the strength of these institutions and got in way too early.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He is on the advisory board of Internet start-up CircleBuilder.com.

Permalink | Email this | Linking Blogs | Comments

MAJOR PAPERS:

• Countrywide Financial Corporation (NYSE: CFC) announced another 900 job cuts as the company slashes costs in the face of a drop in lending volumes and rising defaults, The Wall Street Journal reported.
• Barron's Online's "Inside Scoop" section reported that CVS Caremark Corporation (NYSE: CVS) chairman Edwin Crawford sold 120K shares worth $45.4M Friday and Tuesday after exercising the same number of options for $2.8M.

• Italian carmaker