Welcome to Finance World

British bank Barclays is in talks with Lehman Brothers to buy its core U.S. broker-dealer business, including equity, fixed income, M&A advisory and other parts, people familiar with the matter said.

A deal could save thousands of jobs and many of Lehman’s core investment bank operations, a day after the U.S. bank’s holding company filed for bankruptcy protection.

Barclays said on Tuesday it was in talks to buy some of Lehman’s assets on terms that would need to be attractive to its shareholders. It declined to comment further.

The talks mainly involve the core U.S. business, which has 8,000 to 10,000 staff, but could include some of its global businesses, the sources said.

It does not include Lehman’s asset management and wealth management arms.

The sources said there is an urgency to the talks as a deal would need to be struck before staff and clients leave and damage the franchise.

A deal would include staff, infrastructure, licenses and some of Lehman’s financial positions, but would not leave the UK bank exposed to Lehman’s troubled assets, the sources said.

Barclays was involved in frantic talks over the weekend to rescue Lehman, but quit after U.S credit reports. authorities would not guarantee the U.S. investment bank’s trading obligations. 

Read more

LONDON–

The oil market was also hit by turbulence in the U.S. financial sector, which aggravated expectations that a global economic slowdown will suppress demand.

Light sweet crude for October delivery was down $5.39 at $95.79 a barrel on the New York Mercantile Exchange, after going as low as $94.13 overnight.

The contract had settled Friday at $101.18 after dipping to $99.99 — the first time Nymex crude had traded below the $100 mark since April 2.

“Now that Ike has come and gone, initial reports indicate no real damage to the oil infrastructure in the Gulf coast area,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore.

Federal officials said the storm destroyed at least 10 oil and gas platforms and damaged pipelines in the Gulf of Mexico — a small proportion of the 3,800 production platforms in the Gulf. Three years ago, back-to-back hurricanes knocked out more than 100 platforms.

However, power outages were slowing efforts to restart refineries.

“Hurricane-related problems on the region’s electricity grid appear to be the biggest hurdle to a prompt restart of operations,” wrote analysts from JBC Energy in Vienna, Austria.

Investors are now turning their attention toward falling oil demand in the U.S., Europe and Japan as slowing economic growth threatens to undermine consumer spending.

“Market sentiment is decidedly bearish, with all these concerns about developed countries going into recession or a serious slowdown impacting oil demand,” Shum said.

Oil fell despite reports that militants launched another attack on Nigeria’s oil infrastructure in a third day of violence.

The Nigerian military in the southern oil delta region said militants in speedboats attacked troops at a Royal Dutch Shell PLC oil-pumping station early Monday how to get a free credit report. The fighters arrived in about 10 boats and detonated dynamite and other explosives during the battle

Source

The future of Wall Street is up for grabs — and changing by the minute.

In the course of a few hours Sunday, Lehman Brothers Holdings Inc (LEH.N: Quote, Profile, Research, Stock Buzz), the fourth-largest investment bank hobbled by toxic real estate assets, was left for dead and may file for bankruptcy before Monday.

Merrill Lynch (MER.N: Quote, Profile, Research, Stock Buzz), the No. 3 investment bank and weakest remaining firm after $40 billion of write downs, rushed into the arms of Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) for $29 a share — less than half its 52-week high but almost $12 higher than its closing price Friday.

These moves, coming after the U.S. government’s takeover of Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) and six months after the meltdown of Bear Stearns and its shotgun marriage to JPMorgan Chase & Co (JPM.N: Quote, Profile, Research, Stock Buzz), renew questions of what Wall Street will look like in an environment of lower leverage and reduce appetite for risk.

Now there are questions whether any of the independent firms will still be around pay day loans. Certainly, for those that survive the current 100-year storm, Wall Street will look a lot different.

“It seems perfectly clear leverage is going down, that banks will be more careful who they do business with, and that there is a desire to be more of an agent than a principal,” said Donald Marron, head of private equity firm Lightyear Capital and former CEO of PaineWebber Group.

“There will be a trend toward specialization. It’s hard to be in too many different places. Firms will concentrate on their strengths.”

After more than 13 months of a global credit crunch, the rules of the marketplace have changed. 

Read more

Hundreds of union members and their families milled around Kiener Plaza in downtown St. Louis last month under a blazing blue Saturday sky. Some clutched placards — "InBev — Don’t forget who makes this Bud!" At exactly 1 p.m., drivers of parked tractor-trailers leaned on their horns. A blaring crescendo signaled the Teamsters were in town, ready to roll.

It remains to be seen whether the International Brotherhood of Teamsters will be so rowdy in an upcoming round of national contract negotiations with St. Louis-based Anheuser-Busch Cos.

Events are moving fast and furious: InBev of Belgium expects to finalize a $52 billion takeover of Anheuser-Busch — the biggest buyout in the history of beer — by the end of the year. A five-year contract between the Teamsters and Anheuser-Busch is set to expire Feb. 28; negotiators will go behind closed doors the week of Sept. 29 try to draw up a new contract.

For now, signs point tentatively toward a peaceful, swift and smooth labor negotiation.

"The Teamsters don’t want the uncertainty" from a long or strident standoff, said Gary Chaison, professor of industrial relations at Clark University. "InBev doesn’t want the uncertainty, and Anheuser-Busch knows it’s more valuable without uncertainty."

The Teamsters, one of the country’s biggest unions, faces an odd dynamic as InBev comes to town. The incoming owner of Anheuser-Busch is known for a tough approach toward unions in Belgium, Canada and Brazil. No one knows exactly how InBev will behave toward the Teamsters, which represent about 8,000 Anheuser-Busch employees in the U.S. — about a quarter of the company’s overall work force.

"With Anheuser-Busch, I knew where I stood to a certain degree," said Ray Wilkinson of House Springs, a fourth-generation brewery worker. "I’m concerned for my family. … Right now, I don’t know where I stand."

InBev has tried to assuage concerns about its planned acquisition. The giant Belgian brewer says it will keep all 12 of Anheuser-Busch’s U.S. breweries open, and says it expects the takeover of A-B to have little or no impact on union jobs.

But the Teamsters remain skeptical, arguing that InBev will be under pressure to make good on $45 billion of debt it shouldered to finance the purchase of Anheuser-Busch. The Teamsters wanted to know how that amount of debt — and the need to cut costs — squared with InBev’s assurances. The highly leveraged nature of the transaction raises "major credibility issues," the Teamsters said earlier this summer.

For their part, InBev and Anheuser-Busch have said the combined company will trim $1.5 billion in costs by 2011 — but mostly through economics of scale, overlapping corporate functions and cuts in the salaried, nonunion work force.

Meanwhile, the Teamsters union says its top priorities in the negotiations with Anheuser-Busch are protecting jobs, pension benefits and health care — demands that reflect the fact that many brewery workers’ dads and grandfathers also worked at Anheuser-Busch.

OPPORTUNITY

Relations between A-B and the union haven’t always been tranquil.

Ten years ago, contract negotiations between the Teamsters and Anheuser-Busch temporarily ground to a halt as things turned nasty. The union twice voted down a proposed contract before a deal was struck, narrowly avoiding a strike.

But by December 2003, the chill had thawed. Anheuser-Busch wrapped up quick negotiations with the Teamsters and emerged with a contract that has helped smooth labor relations.

By ratifying early, about 7,500 Anheuser-Busch employees covered by the contract got early wage and benefit increases and a $1,000 ratification bonus. Anheuser-Busch committed to keep all 12 U.S. breweries open during the term of the agreement and provided wage raises in all five years as well as bigger pensions.

Will the contract negotiations be swift, smooth and painless this time around? A few factors say yes.

First, rather than salivating over the opportunity to squeeze the union, InBev may want to stay in the background. If Anheuser-Busch hammers out a new union contract quickly, the Belgian company would get valuable, precise information about the labor issues and financial costs it is inheriting at America’s biggest brewer.

At the same time, the Teamsters want to demonstrate they are pragmatic employees that InBev can live with. A constructive approach to negotiations would go a long way in that direction.

"Make no mistake — we’re committed to the success of Anheuser-Busch and InBev," said Jack Cipriani, director of the Teamsters brewery and soft drink conference.

The Teamsters could benefit from negotiating with Anheuser-Busch — with whom it has had a stable relationship in recent years — rather than with InBev no fax payday advances. Lurking in the background is the possibility that, if the union drags its feet and throws up roadblocks to a new contract, InBev could close its buyout of Anheuser-Busch, swoop in and start to throw its weight around.

The next three to four months are "the window of opportunity," Paul Garver, brewery worker coordinator for the International Union of Food Workers, said at the Aug. 16 rally in downtown St. Louis. "Once this merger goes through, the promises that have been made through the media will be meaningless," said Garver, whose group is an international federation of trade unions.

If the new contract is in place before InBev takes control of the biggest U.S. brewer, InBev has to live with it. But if InBev takes over while the Teamsters and Anheuser-Busch are still negotiating, previous progress could conceivably come to naught. InBev would have the opportunity to bargain hard, and could take a very different stance toward the union than did Anheuser-Busch. If the company — or the union, for that matter — dug in its heels over unresolved issues, talks could break down.

Several observers said InBev would likely not want to rock the boat by stirring up labor trouble, even if it did have to mop up the union negotiations.

Despite the arguments for urgency, the Teamsters want to flex their muscles and demonstrate the ability to secure a solid contract. The Teamsters "can’t sell out to Anheuser-Busch just to get a deal," said Neil Martin, a Houston labor lawyer with the law firm Gardere Wynne Sewell. "They’ve got to live with the deal."

The Teamsters would put themselves at a disadvantage in negotiations by appearing too eager to get a new contract with Anheuser-Busch. Chaison said the Teamster’s current message to Anheuser-Busch is, "’We’d like to get a quick agreement with you, but it’s not the end of our world if we don’t.’"

Things are going smoothly this time in preliminary talks. Anheuser-Busch and the Teamsters recently wrapped up a few days of "professional and productive" negotiating sessions in Cincinnati, focused on local issues such as work rules at each brewery.

The upcoming national negotiations over issues such as wages and health care promise to be more difficult. Still, some Teamsters and labor analysts expect this round of contract negotiations to be uneventful, given the encouraging start. "We’re going to get a contact," said Dan McKay, president of the Teamsters Joint Council 13. "We’re going to get a good contract."

NEW REALITY

Where will the future balance of power lie between the Teamsters and Anheuser-Busch InBev? Like many unions, the Teamsters have suffered from the slippage of union membership in the U.S. The days may be gone when hard-muscled labor strife made the union feared. But the Teamsters union still has some kick and a well-earned reputation for shrewd and pragmatic negotiations.

The labor movement in general has "really taken it on the chin over the last couple of decades, but the Teamsters are better situated than a lot of manufacturing unions," said Roland Zullo, assistant research scientist at the University of Michigan’s Institute of Labor and Industrial Relations. Why? A concerted effort to diversify the union’s membership beyond truck drivers, said Zullo.

The Teamsters have lost some of their pull in the national labor movement and in state and local politics, but they "still carry clout among the workers at Anheuser-Busch, and they will still have something to say," said Henry W. Berger, emeritus professor of history at Washington University.

Now, the Teamsters are trying to rebalance the scales of power between unions and a brewing powerhouse — Anheuser-Busch InBev — that will supply one-fourth of the world’s beer. The Teamsters and other unions are trying to forge a new international partnership of unions that represent workers at InBev’s breweries in Brazil, Canada, Europe and — when the A-B takeover closes — the United States.

The rise of global entities like Anheuser-Busch InBev means "we must all adapt to new circumstances," said Cipriani. "The Teamsters in St. Louis are adapting to a new international reality."

jmcwilliams@post-dispatch.com

314-340-8372

Source

Bank of America says it will buy back about $4.5 billion of auction-rate securities as part of a settlement agreement with Massachusetts regulators.

The Charlotte, N.C.-based bank says it continues to cooperate fully with ongoing investigations by the Securities and Exchange Commission and the New York Attorney General’s Office.

Bank of America (BAC, Fortune 500) joins eight other big investment banks that have agreed to buy back a total of more than $50 billion of the securities.

The auction-rate securities market involved investors buying and selling instruments that resembled corporate debt, except the interest rates were reset at regular auctions, some as frequently as once a week payday advance. The market for the securities collapsed in February. 

Source

VIENNA, Austria — The just-ended OPEC meeting was about more than what a barrel of oil can fetch on the open market as the global economic picture dims.

OPEC heavyweight Saudi Arabia gave a nod, at least symbolically, to fellow member states that have grown increasingly uneasy about the rapid decline in crude prices. The Saudis attempted to placate rival Iran, and laid the groundwork for a potential new alliance with Russia, the world’s second-largest oil producer.

But OPEC’s announcement that it would cut output by more than 500,000 barrels by sticking closer to quotas did little to change what most consumers care most about — the cost of filling up a car with gas or heating a home over the winter.

Benchmark oil prices were on a downward course Wednesday, shedding 68 cents to fetch $102.58 a barrel on the New York Mercantile Exchange. Brent crude briefly touched $98.10.

Behind the scenes, the 13-nation energy cartel juggled the conflicting interests of Saudi Arabia and Iran — and brought oil and gas giant Russia closer into the fold by agreeing to sign a cooperation agreement with the Kremlin.

OPEC’s continued ability to present a common front, while extending a hand to Russia, is potentially bad news for major crude consumers including the United States and Europe. There may be even less wiggle room in trying to find the lowest bidder to meet their energy needs at a time when the summer’s record oil prices close to $150 are a still vivid memory.

But it also may have signaled that record oil prices have spoiled the global appetite for crude, at least for the near future easy payday loans.

"The ministers appear genuinely concerned that the bottom is falling out of global demand and that once-depleted stocks are rebounding with a vengeance," said Antoine Halff, an energy analyst with Newedge USA. "Their panic is testament to how soft the market has become. It is likely to grow even softer."

Saudi Arabia’s clout is key for Washington. President George W. Bush visited Riyadh twice this year to push an oil production increase. The Saudis answered by ramping up production by about 500,000 barrels a day.

OPEC’s decision Wednesday to cut output by 520,000 barrels effectively canceled even that relatively modest nod to U.S. requests, leaving some talking about a Saudi defeat and a victory for Iran, which has sought higher oil prices through production cuts.

Not so, said analyst and trader Stephen Schork, who was monitoring the meeting in Vienna.

"I wouldn’t say the Saudis backed down," he said. "I’d say it was a respectful nod to the other members of the group."

In reality, the Saudis are the tail that wags the dog at OPEC, accounting for nearly a third of the group’s production of around 30 million barrels a day. They often get their way at OPEC ministerial meetings, and a strong push by them in Vienna to keep the status quo on output probably would have succeeded.

Source

Tsingtao Brewing Co., one of China’s largest brewers, agreed that the 27 percent stake in the company that is currently held by Anheuser-Busch Cos. will transfer to InBev of Belgium when InBev finalizes its proposed takeover of Anheuser-Busch. A short notice about the agreement was filed today with the Securities and Exchange Commission.

InBev hopes to take over St. Louis-based Anheuser-Busch by the end of the year in a $52 billion buyout. The Tsingtao deal would give the combined company — Anheuser-Busch InBev — control of roughly one-fifth of the Chinese beer market, the world’s largest.

Anheuser-Busch said it first invested in China in 1993, when the company acquired a minority stake in Tsingtao cash advance in one hour. In October 2002, Anheuser-Busch and Tsingtao formed a strategic alliance to share best practices in areas such as production technology, marketing, sales and management. In 2005, Anheuser-Busch increased its investment in Tsingtao to 27 percent.

jmcwilliams@post-dispatch.com | 314-340-8372

Source

The Canadian Auto Workers union is trying to form a committee for a possible organizing drive at WestJet Airlines.

The CAW confirmed yesterday it has received calls from WestJet employees expressing interest in the union, and it is now working on a committee.

"We’re at a very preliminary stage," said union president Ken Lewenza, who took the reins of the CAW on Sept. 4. Lewenza, who ran Local 444 in Windsor for 14 years, succeeded Buzz Hargrove, who was CAW president for 16 years.

Calgary-based WestJet employs about 5,700 and promotes the idea of workers becoming owners of the company no qualifying payday advance.

The CAW wants to become more aggressive in organizing outside the manufacturing sector, where it has lost thousands of members in recent years because of plant closings. The union already represents some 5,000 Air Canada workers.

Source

Thompson Coburn LLP on Tuesday gave St. Louis the verdict it wanted.

The law firm agreed to keep its 595 jobs downtown instead of moving to Clayton in return for about $700,000 in tax abatements and incentives from the city.

Thompson Coburn will even get its name on U.S. Bank tower.

For the city, the retention of the high-profile law firm is a reaffirming win in a year where it suffered the loss of 850 jobs with the closing of Macy’s division headquarters and was jilted by Centene Corp.

The decision to stay downtown was a tough one for Thompson Coburn because it received a number of very competitive proposals over the last two years, Thompson Coburn chairman Tom Minogue said at a news conference. One of the locations the firm had considered was Brown Shoe Co.’s planned mixed-use development at 8300 Maryland Avenue in Clayton.

"We are confident that we made the right choice for us," he said. "We wanted to be where all our people wanted to be."

Although the city was successful in convincing Thompson Coburn to stay downtown, Armstrong Teasdale LLP, currently located at One Metropolitan Square, 211 North Broadway, is considering moving to Centene Corp’s planned headquarters building in Clayton.

A.J. Chivetta, a partner involved in the firm’s relocation efforts, could not be reached for comment.

The city is still feeling the sting of losing Centene back to Clayton. The medical plan administration firm in September announced that it was going to move its headquarters to downtown as part of the Ballpark Village development. But in July, the company pulled out of the deal after it, the city and the developers could not hammer out an agreement.

Clayton offered up to $22 million in tax incentives over 20 years to lure Centene back.

Thompson Coburn employs more lawyers than any other firm in St. Louis and generates $1.2 million a year in taxes for city services, Mayor Francis Slay said.

City officials have been aggressive in their attempts to keep jobs from leaving downtown — especially high-paying ones such as lawyers, who add to the city coffers by way of the 1 percent wage tax.

Keeping a firm of Thompson Coburn’s size downtown "is good for the city’s image and for our economy and our business," Slay said payday loans.

Thompson Coburn agreed to sign a 12-year lease at the U.S. Bank tower, located at Seventh Street and Washington Avenue. The firm will remodel its existing 240,000 square feet.

The $700,000 in incentives include abatements of personal property, construction material sales taxes and about $400,000 in forgivable loans and training funds, said Barbara Geisman, the deputy mayor for development.

As part of the agreement, U.S. Bank will donate its current 360-space garage to the Missouri Development Finance Board. An additional garage, which will contain another 360 parking spaces plus a floor of retail space, will be built in the plaza space in back of the building. The Missouri Development Finance Board will run both garages. The estimated $15 million in construction costs will be financed by revenue from both garages, Geisman said.

"This was a substantial gain for the city of St. Louis in the long run," said Robert Lewis, president of Economic Strategies, a St. Louis real estate and economic development consulting firm. By keeping Thompson Coburn with its large number of employees and high wages, the city can make up its costs within about two years, he estimated.

"It (the deal) helps a big firm with ample prestige located in a very important building stay in the city without hurting the city’s budget," he said."

"It’s not a huge amount of money," agreed Don Phares, professor emeritus of economics and public policy at the University of Missouri-St. Louis.

More importantly, he said, is the city’s image.

"If they (Thompson Coburn) left, it would indicate that downtown St. Louis is no longer the place to do business," Phares said explaining such a decision could influence other firms to leave. "Keeping them there may be a sign to other firms that being in the city is a desirable place to be."

gappleson@post-dispatch.com | 314-340-8331

Source

Fairfax Financial Holdings Ltd. announced yesterday it has made a $72-million (U.S.) bid for Polish reinsurer Polskie Towarzystwo Reasekuracji Spolka Akcyjna, valued at 66 cents per share.

Fairfax has commitments to tender the offer from shareholders who own about 47 per cent of PTR’s shares.

The transaction is expected to close in the first quarter of 2009.

"We are excited about future prospects for the Central and Eastern European economies in which PTR is active," Fairfax chair and chief executive officer Prem Watsa said in a statement issued from the company’s head office yesterday.

"This investment will increase Fairfax’s exposure to the region and will provide a long-term platform for expansion," Watsa said pay day loan.

Fairfax is a financial services holding company that, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.

Fairfax shares closed up 1 cent at $226.51 Canadian yesterday in Toronto.

The Canadian Press

Source