Financial times
By Joshua Chaffin in New York
Published: February 22 2008 00:17 | Last updated: February 22 2008 15:45
The New York Times Company’s feud with two hedge fund investors appeared to escalate on Thursday, when the media company urged shareholders to rebuff a slate of directors nominated by the funds.
In a letter to shareholders, Arthur Sulzberger, chairman of the Times Company, recommended that they disregard four directors being put forward by Harbinger Capital and Firebrand Partners, and instead support its own selections.
Harbinger and Firebrand called the Times’s response “disappointing,” and appeared to set the stage for a showdown at the company’s annual meeting on April 22.
“We are particularly concerned that the company refused to interview any of our nominees despite our repeated offers to meet at their convenience,” the funds said. “Shareholders are faced with a clear choice: to support directors that have been hand picked by the current board, or truly independent directors put forward by the largest shareholder.”
Harbinger and Firebrand, led by Scott Galloway, began to target the Times late last year and have now upped their stake in the company to 15.6 per cent, making them the largest shareholder. Mr Galloway has called for the Times to focus more on its digital strategy and allocate less capital to non-core assets.
A Times’ spokesperson said on Thursday that the company believed its slate of directors was “very strong” but that Harbinger’s candidates for the 13-member board were “still under review”. Those candidates include Mr Galloway; Allen Morgan, a venture capital executive at Mayfair Fund; Gregory Shove, a former AOL executive; and James Kohlberg, co-founder of Kohlberg & Co.
Times executives have met twice so far with the funds to discuss their proposals. The media company had been pursuing a plan to trim expenses and focus resources on the internet and other digital platforms well before Harbinger emerged.
In an apparent nod to that strategy, the company has proposed that Dawn Lepore, chief executive of drugstore.com, and an eBay director, join the board to replace one of two outgoing directors.
Published: February 29 2008 20:16 | Last updated: February 29 2008 20:16
That the Federal Reserve is walking a tightrope with inflation to one side and recession to the other has been clear for some time. But a stream of unhelpful news released in February shows that the Fed is now well out on the rope, committed to its rate-cutting strategy and far from the safety of either side.
There was bad news on growth: output in the last quarter of 2007 was not revised upwards as had been expected, year-on-year declines in the Case-Shiller house price index accelerated to 9.1 per cent in December, and surveys of consumers and businesses continue to report a slump in confidence.
There was also bad news on inflation: the US consumer price index again rose uncomfortably fast, producer prices rose even faster, and commodity prices soared to fresh highs. Surveys have begun to give unpleasant hints that consumers expect higher inflation.
Keeping inflationary expectations down is the secret to staying on the tightrope: it means the Fed can risk short-term inflation and slash rates to shore up economic growth. The Fed can point to Treasury Inflation-Protected Securities, where market prices suggest inflation expectations are little changed. But the TIPS market is not that liquid. Adjust for liquidity, or look at more easily tradeable inflation derivatives, and the market is pricing in a growing risk of much faster rises in prices.
Fed policymakers note the risk of inflation, but still imply that rates can be cut to stave off the risk of a severe depression. Donald Kohn, the vice-chairman, said this week that the inflation data were “disappointing” but that the Fed must take account of “the possibility of very unfavourable developments”. In his testimony to Congress, Ben Bernanke, the chairman, noted the risks to inflation, but dismissed fears of 1970s style “stagflation”.
The disaster scenario for the US economy still looks remote. A technical recession – two quarters of negative growth – is a strong possibility for the first half of 2008, but most Fed governors forecast overall growth for the year of between 1.3 and 2 per cent. While the outlook for the financial sector is bad, the Fed’s aggressive action makes it likely that damage to the real economy will be contained – this time.
If the result of aggressive Fed rate-cutting is a sustained burst of inflation, however, then the next financial shock, in three or five or seven years’ time, will not be so easily resolved. It is essential for the Fed to balance its rapid rate cuts with rapid rate rises once growth has been stabilised.
The dollar remains a danger: it fell below $1.50 to the euro this week. So far, those declines have boosted US exports and propped up demand, but if investors think US inflation is out of control they will dump dollar assets as fast as they can. Fed governors, as they peer at the drop on either side, could be forgiven a touch of nervousness.
New York Times
February 28, 2008
By DAVID STOUT and BRIAN KNOWLTON
WASHINGTON — Using some of his toughest language in weeks, President Bush prodded Congress on Thursday to pass his preferred version of surveillance legislation, asserting that every day of delay could put the country in danger.
Mr. Bush said again that renewing the surveillance legislation is “a very urgent priority,” and that it must include controversial provisions that would shield telecommunications companies from wholesale lawsuits over their assistance in monitoring the phone calls and e-mail messages of suspected terrorists without warrants.
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Financial Times
By Javier Blas in London
Published: February 11 2008 22:54 | Last updated: February 11 2008 22:54
Wheat prices on Monday jumped more than 5 per cent to a new peak after emergency measures taken by the US agriculture exchanges at the weekend failed to cool the grains market.
The exchanges – CME Chicago Board of Trade, Kansas City Board of Trade and Minneapolis Grain Exchange – agreed to widen the daily trading limits from 30 to 60 cents and double speculators’ margin calls to help bring back normal trading.
A scramble to secure wheat amid a period of tight supply has caused futures to jump by their daily limit for most sessions of the past two weeks leaving the market unsure of the real price level. Options contracts and deals on the cash over-the-counter market suggest prices are much higher, traders said.
The exchanges said: “Wheat futures on all three exchanges have closed at a limit move for successive sessions, and expanded limits will allow wheat contracts to continue performing their price discovery.”
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U.S. Retooling High-Tech Barrier After 28-Mile Pilot Project Fails
By Spencer S. Hsu
Washington Post Staff Writer
Thursday, February 28, 2008; A01
The Bush administration has scaled back plans to quickly build a “virtual fence” along the U.S.-Mexico border, delaying completion of the first phase of the project by at least three years and shifting away from linked, tower-mounted sensors and communications and surveillance gear, federal officials said yesterday.
Technical problems discovered in a 28-mile pilot project south of Tucson prompted the change in plans, Department of Homeland Security officials and congressional auditors told a House subcommittee.
While the department took over that initial stretch Friday from Boeing, authorities confirmed that Project 28, the initial deployment of its Secure Border Initiative network, did not work as planned or meet the needs of the U.S. Border Patrol.
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In his last years, as honors like the Presidential Medal of Freedom came his way, Mr. Buckley - shown here in the office of his Stamford, Conn., home in 2005 - gradually loosened his grip on his intellectual empire. In 1998, he ended his frenetic schedule of public speeches. In 1999, he stopped “Firing Line,” and in 2004, he relinquished his voting stock in National Review. Mr Buckley, 82, suffered from diabetes and emphysema, his son Christopher said, although the exact cause of death was not immediately known. He was found at his desk in the study of his home, his son said. “He might have been working on a column,” Mr. Buckley said.
Wired
By Noah Shachtman
February 27, 2008 | 2:28:02 PM
The Air Force is tightening restrictions on which blogs its troops can read, cutting off access to just about any independent site with the word “blog” in its web address. It’s the latest move in a larger struggle within the military over the value — and hazards — of the sites. At least one senior Air Force official calls the squeeze so “utterly stupid, it makes me want to scream.”
Until recently, each major command of the Air Force had some control over what sites their troops could visit, the Air Force Times reports. Then the Air Force Network Operations Center, under the service’s new “Cyber Command,” took over.
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Published: February 25 2008 20:14 | Last updated: February 25 2008 20:14
Between 1990 and 2005 the proportion?of?children under five who were underweight declined by one fifth. But that progress is now under threat. Rising food prices mean that malnutrition and starvation once again threaten many of those at the bottom of the world’s economic ladder. While recent spikes in prices are unlikely to be permanent, producers should stop wasting food by subsidising biofuels and give the World Food Programme the funds it needs to distribute calories to those who cannot cope by themselves.
International market prices for wheat, corn, soyabeans and dozens of other commodities have doubled or trebled in recent years. The result is poverty – for millions, a doubling of food prices means destitution – and increased malnutrition. World Food Programme officials have told the Financial Times that the agency may have to cut food rations, or even the number of people it reaches, unless donors provide more cash to pay higher prices.
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By Jim O’Neill
Published: February 25 2008 17:01 | Last updated: February 25 2008 17:01
We have completed seven full weeks of 2008. At the close of business on Friday, many stock markets around the world, including some of the best performers of 2006 and 2007, had dropped much more than the US, whether developed or developing.
For example, the previously high-flying DAX was down 15.6 per cent, virtually double the year-to-date decline in the S&P 500. So are both the high-flyers of the previous two years, China and India.
Brazil, the cheapest valued BRIC (Brazil, Russia, India, China) with the best improving economy of them cyclically, is up slightly, as are some of the N11 markets, such as Egypt, Nigeria and even Pakistan. N11 is our definition of the “next eleven largest emerging economies in terms of potential” as defined by their population size.
Yet 90 per cent of the clients I engage with are spellbound by the US recession risk and the endless saga of the “next shoe to drop” in the credit crisis.
As we have argued since December, it is time to consider “recoupling” as opposed to “decoupling”.
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Financial times
By Krishna Guha in Washington
Published: February 25 2008 22:18 | Last updated: February 26 2008 01:13
The US stepped up its call for reform of the International Monetary Fund on Monday, calling for a shake-up of its executive board as well as its shareholding structure to give greater weight to emerging economies.
David McCormick, the undersecretary for international affairs at the US Treasury, proposed cutting the number of executive directors from 24 to 20 and eliminating the rule that reserves positions for the US, Japan, Germany, France and Britain. The proposal is likely to result in fewer European directors on the IMF board.
Mr McCormick said if a reform package were agreed in time, the Bush administration would go to Congress this year to seek approval for the sale of some of the IMF’s gold to establish an endowment to finance its operations.
The call marks an effort to renew the momentum for reform of the IMF. Dominique Strauss-Kahn, the new managing director, favours governance reform but has been focused on the credit crisis and, internally, on the need to find $100m in budget cuts. Mr McCormick said: “The IMF must reform to remain relevant.” Afterwards, he told the Financial Times that the fund had to update its mission, governance structure and financial model to be effective.
He pressed the IMF to make use of its recently enhanced mandate to monitor exchange rates more aggressively.
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