Filed under: Products and services, Consumer experience, Anheuser-Busch Cos (BUD)

When I first saw the story in The Wall Street Journal (subscription required) that Anheuser-Busch Cos. (NYSE: BUD) planned to sell lime-flavored Bud Light, I thought the king of beers had gotten a little soft in the head. Then I feared for the country when I learned that rival SABMiller Plc. (LON: SAB) is gaining sales with a revolting-sounding beverage called Miller Chill which the Journal described as a “lime-and-salt-flavored light lager modeled after Mexican concoctions know as micheladas.”

It seems that at some point in the 1980s or 1990s, people no longer drank beer just because they were thirsty. Instead, they needed to make a lifestyle choice. Smart, sophisticated people needed to show how cool they were by drinking overpriced imports or microbrews. I was not immune to the marketing of the time and wound up drinking a few brews with limes wedged into them until I learned better.

Former advertising executive John Greening, who did work for Anheuser-Busch, raised a more serious issue, pointing out, “their hot hand has always been Bud Light. This takes the attention away from the hot hand.”

Although I might think lime in beer is sacrilegious, I recognize that my view may be in the minority. Many people, particularly women, may find Bud Light with lime more palatable than the regular Bud Light because of its sweeter taste. Anheuser-Busch, whose stock hasn’t done squat for the past five years, also needs to find ways to boost flat sales of beer.

Even so, adding fruit to beer seems as silly as adding ketchup to prime rib. It’s something that people who know better shouldn’t do.

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Galactic_grub writes “The detection of planet HD 189733b is in some ways just another small victory for extra-solar planetary science. It is too hot for there to be anything ‘alive’. Just the same, somewhere on the planet are trace amounts of the gas methane. The fact that the element was detected at all offers hope for understanding future discoveries of Earth-like worlds, says NewScientistSpace. Researchers from Caltech and University College London used the Hubble Space Telescope to peer at the planet and examined spectral signature of starlight filtered by the planet’s atmosphere, to identify different chemicals. ‘The authors suggest that some ill-understood chemical process might be responsible, either concentrating the methane in cooler parts of the atmosphere, or generating extra methane directly. Alternatively, the methane might simply mean that the planet happens to be very rich in carbon.’”

Read more of this story at Slashdot.

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Filed under: Citigroup Inc. (C), JPMorgan Chase (JPM), Bank of America (BAC), Countrywide Financial (CFC), Washington Mutual (WM), Wells Fargo (WFC), Housing

Bank of America, Citigroup and other major U.S. banks and lenders announced Tuesday a revised plan to help some borrowers in danger of default remain in their homes.

Encouraged by U.S. Treasury Secretary Henry Paulson, the banks will offer a 30-day freeze on foreclosures while loan modifications are considered for borrowers who are at least three months late on payments. The program will include borrowers with prime mortgages, as well as those with poorer credit histories.

Second wave of defaults

The program is being initiated as the United States prepares for the second wave of mortgage defaults as variable mortgages rates reset in 2008. The U.S. Federal Reserve estimates that about two million mortgages will reset to higher rates, with foreclosures expected to soar to one million, absent an intervention. In a typical year, the U.S. has about 500,000-550,000 foreclosures.

The nation and the housing sector are also attempting to avoid the onset of a housing “vicious cycle” whereby defaults further lower home values, preventing some homeowners from refinancing, which would precipitate another round of defaults, further lowering home values, etc.

All plan participants rose on the news early Tuesday. The Bank of America (NYSE: BAC) gained 30 cents to $42.43, Citigroup (NYSE: C) rose 46 cents to $26.25, JP Morgan Chase (NYSE: JPM) climbed 15 cents to $43.50, Wells Fargo (NYSE: WFC) rose 24 cents to $29.80, Washington Mutual (NYSE: WM) gained 20 cents to $16.98, and Countrywide Financial (NYSE: CFC) added 10 cents to $6.74.

Slow progress

Economist Steve Affinito said the new plan represents “incremental progress, but more action and a bigger program is needed.”

“The banks still aren’t ready to face the harsh reality that they’re going to face huge losses, absent a restructuring of many at-risk loans,” Affinito said. “They need to restructure these loans so that most borrowers can repay them. It will cut into their revenue, but getting 70% or 80% of projected interest income is better than getting no interest income. Banks are not in the real estate business, and absent this, they’re going to have a lot homes on their hands with very few buyers.”

Some in Congress are considering a more massive federally-sponsored program. Sen. Christopher Dodd (D-Connecticut), chairman of the Senate Banking Committee, is exploring the federal program to buy and restructure delinquent and near-delinquent loans, Bloomberg News reported.

Affinito said a plan of that scope “would probably cost more than $40-50 billion annually.”

Affinito said it’s highly unlikely President Bush would approve such a plan, and noted that it “would probably take a Democratic president and U.S. Congress” to get the legislation through, but “the housing crisis can’t wait until after the November 2008 election for a possible solution.”

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Filed under: Before the bell, International markets, Earnings reports, Microsoft (MSFT), Yahoo! (YHOO), Market matters, Citigroup Inc. (C), JPMorgan Chase (JPM), Bank of America (BAC), Countrywide Financial (CFC), Research in Motion (RIMM), Amer Intl Group (AIG), Washington Mutual (WM), Economic data, Wells Fargo (WFC), Housing

U.S. stock futures were somewhat higher this morning, but the ongoing credit crisis remained a top worry. Several earnings reports are due this day, including GM. Meanwhile, the Microsoft-Yahoo saga continued with an answer from Microsoft to Yahoo!’s rejection of its unsolicited bid.

On Monday, U.S. stocks finished higher despite American International Group (NYSE: AIG) with a disclosure that it couldn’t properly value certain derivatives it holds. AIG shares dropped over 11.7%, but the tech sector managed to pull up the market. The Dow Jones Industrial Average ended up 57 points, or 0.48%, the S&P 500 added 7.8 points, or 0.59%, and the Nasdaq Composite rose 15 points, or 0.66%.

Without economic data due out this day, investors might pay attention to some of the Feds actions aimed at helping out the distressed mortgage sector. Under the plan, called Project Lifeline, at-risk borrowers with all types of mortgages, not just high-cost subprime loans, could be eligible for help under a new plan, involving six large home lenders — CFC, BAC, JPM, C, WFC, WM. Seriously overdue homeowners might be eligible to suspend foreclosures for 30 days while lenders try to work out more inexpensive loan terms.

Overseas, Asian stocks finished mixed but mostly higher. European shares edged higher in the morning, even after Credit Suisse Group (NYSE: CS) stated fourth-quarter profit fell 72% to 1.33 billion francs, or 1.21 francs a share, missing analysts estimates. The reason were lower earnings at the securities unit after writedowns of 1.3 billion Swiss francs ($1.2 billion) on debt and leveraged loans.

Schering-Plough (NYSE: SGP) stated it lost $3.36 billion, or $2.08 per share, in the fourth quarter of 2007 because of bookkeeping rules related to the purchase of Organon BioSciences. Without the record-keeping adjustments Schering-Plough says it would have had a profit of 27 cents per share in the quarter, beating estimates of 24 cents per share.

The BlackBerry service has been “acting out” Monday, as hubby put it. While Research in Motion (NASDAQ: RIMM)’s BlackBerry outages are rare, when they happen, crackberry addicts get annoyed fast. If anything, perhaps it proves how essential the BlackBerrys have become to so many business users. RIMM shares are being punished, down 1.2% in premarket trading.

Meanwhile, Microsoft (NASDAQ: MSFT) has responded to Yahoo! (NASDAQ: YHOO) decision to reject its $44.6 billion unsolicited offer for the portal, saying the decision was “unfortunate.” Moreover, from the statement, it doesn’t seem as if Microsoft intends to back down, neither from the offer or from the terms, which some say could perhaps mean a hostile takeover bid.

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Filed under: Law, Scandals, Housing

For a while, investors who lost big on bad suprime lenders looked for scapegoats. At Novastar Financial, one of the most infamous, an army of whackjobs proclaimed that the company’s lagging share price was a result of a bear raid conducted by nefarious naked short sellers with the help of journalists on the take.

In case you’re wonder what became of Novastar, you can find find it under the symbol NOVS — I didn’t link to it because it’s currently trading on the Pink Sheets, which pretty much tells you all you need to know.

Fortunately, more sane investors are looking into real ways to prevent the destruction that occurred from repeating itself. Activist investors are breaking new ground by pushing shareholder resolutions and proxy campaigns to elicit more detailed disclosures about the company’s risk management and mortgage policies/exposure — disclosures that might have given investors more advanced warning of the writedowns that have rocked the financial sector.

According (subscription required) to the Wall Street Journal, some companies are actually fighting back, arguing that the measures are meddlesome and should be left to the discretion of managers — managers who have lost billions in the past year, but hey.

Shareholder proposals probably aren’t the ideal way to handle this. Disclosure issues for public companies that give investors enough information to know what they’re getting into should be mandated by the SEC.

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Refinance Rush Leaves Many Behind
ABC News - of clients who have been rejected for refinancing or can’t get the terms they want is double what it used to be, stated Stephen Kaempf, the president of Choice One Mortgage, a mortgage broker in Lake Zuirch, Ill. Badly bruised by the subprime housing

IndyMac Crashes and Burns
Street.Com - stock “indefinitely” as a result of the difficult market condition, it said. “Consistent with almost every other big financial institution in the mortgage lending and securitization business, as a result of the rapidly deteriorating housing and

U.S. Banks, Paulson Plan Effort to Cut Foreclosures (Update1)
Bloomberg - The deepest housing slump in a generation is threatening consumer spending and the job market, pushing the economy to the verge of a recession. “There is this massive disconnect between what’s being represented by the industry and what is

Help for Homeowners Facing Foreclosure
ABC News - of clients who have been rejected for refinancing or can’t get the terms they want is double what it used to be, stated Stephen Kaempf, the president of Choice One Mortgage, a mortgage broker in Lake Zuirch, Ill. Badly bruised by the subprime housing

School budgets apt to feel sting of housing credit woes
Philadelphia Inquirer - WASHINGTON - School budgets have seemed to defy gravity in current years - going up steadily. But school board members from across the country say they’re bracing for leaner times forced by the economic downturn. School board members, gathered in

S.F. supes, planners spar over developments
San Francisco Gate - A San Francisco Board of Supervisors committee debated two measures Monday aimed at squeezing more low- and moderate-income housing out of development projects at Treasure Island and in an upper Market Street area near Octavia Boulevard. The first

REFILE-UPDATE 3-Fed’s Poole states U.S. prone to avoid recession
Forbes - The Fed cut interest rates by 1.25 percentage points to 3 percent last month to prevent the economy from sliding into recession as stock markets tumbled sharply and evidence mounted that the housing slump and a credit crunch were damping hiring and

Dyax, GMH, IndyMac, Time Warner Telecom: U.S. Equity Preview
Bloomberg - The U.S. provider of housing to students and the military agreed to be purchased in two transactions for a total of $787 million. IndyMac Bancorp Inc. (IMB US) declined 85 cents, or 11 percent, to $6.75 in trading before the open of U.S

Zillow maps ups and downs of housing prices
San Francisco Gate - del.icio.us The Bay Area is known for its microclimates. That’s as true for the real estate market as for weather patterns. While home values have tumbled across the country, the San Francisco region has pockets of strength where prices continue to

Lenders have foreclosure plan: sources
Reuters - Secretary of Housing and Urban Development, Alphonso Jackson, and Faith Schwartz, who heads a government-industry foreclosure prevention effort called HOPE NOW. In early December, the HOPE NOW program helped shepherd an industry “rate freeze” plan

Adelaide’s housing affordability drops again
News.com.au - Adelaide’s housing affordability fell 4.1 per cent in three months in the latest Housing Industry Association/Commonwealth Bank survey, outpacing a national fall of 1.7 per cent. Regional buyers faced a 1.8 per cent annual fall in affordability

Settlements, Gaza cloud Israel-Palestinian talks
Boston Globe - But Palestinians pointed to new signs of trouble on Tuesday when Israel’s Housing Ministry said preparations were under way to build up to 1,100 new homes in and around Arab East Jerusalem, which Abbas wants to be the Palestinian capital.

US Stocks Head for Higher Open
Forbes - The plan, called Project Lifeline, is expected to be announced Tuesday by the Treasury Department and the Department of Housing and Urban Development, a person familiar with the plan told The Associated Press. The person confirmed earlier news

American Campus to purchase GMH Communities
Reuters - NEW YORK (Reuters) - Student housing developer American Campus Communities Inc (ACC.N: Quote , Profile , Research ) said on Tuesday it would buy the student housing business of GMH Communities Trust (GCT.N: Quote , Profile , Research ) for about $1.4

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An anonymous reader writes about a new robot submersible that uses temperature differences in the sea to power operation for more than twice as long as previous, battery-dependent cars. “The torpedo-shaped glider moves through the ocean by changing its buoyancy to dive and surface, unlike motorized, propeller-driven undersea automobiles. To power its propulsion, the submersible gathers thermal energy from the ocean. When it moves from cooler water to warmer areas, internal tubes of wax are heated up and expand, pushing out the gas in surrounding tanks and increasing its pressure. The compressed gas stores potential energy, like a squeezed spring, that can be used to power the vehicle. To rise, oil is pushed from inside the vehicle to external bladders, thus increasing the glider’s volume without changing its mass, making it less dense. The oil can be shifted inside to increase the density and sink the vehicle.”

Read more of this story at Slashdot.

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