Filed under: Deals, Products and services, Management, Marketing and advertising

According to a Billboard report Tuesday morning, Live Nation Inc. (NYSE: LYV) “has entered into a long-term global partnership” with Canadian rock band Nickelback, following other high profile acts U2, Madonna, and Jay-Z. The reported $50-$70 million deal is set to commence after the band finishes its current deal with Road Runner Records, a record label in the Warner Music Group Corp. (NYSE: WMG), and will include three tours and albums with the possibility of a fourth left open. Virtually each aspect of the band’s career will be managed and distributed via Live Nation, and the band will start touring in Live Nation venues as soon as next year.

Reuters further reports that the band has two albums and a greatest hits album left with Road Runner Records, with the band’s last album selling 10 million duplicates. The news source speculates that the deal could be costly if the band’s new albums in the future fail to deliver the success that the band has enjoyed to date. The deal also throws into question the value of Road Runner Records after Warner Music Group purchased the label in December 2006 for $73.5 million. Despite other high profile artists, Nickelback is the label’s most successful act.

Live Nation has raised the stakes for music companies since beginning to sign major artists last year. By offering services for almost every aspect of those acts’ careers, Live Nation means managing careers are simplified in theory. In addition, the growth of the digital music market has made it easier for the company and the acts it signs to distance the services from the tendencies associated with music companies and traditional recordings deals. Unfortunately, since the deals have yet to commence for any artist, the success of deals such as this have yet to be seen.

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Filed under: Products and services, Consumer experience, Ford Motor (F), XM Satellite Radio (XMSR), Sirius Satellite Radio (SIRI), Technology

USA This day reported Tuesday that “more carmakers are adding digital tuners in their bid to woo audiophiles and add electronics.” The report comes on the heels of South Korean based Hyundai Motor Company offering digital — or HD — radio in new Genesis model sedans up for sale this month. Germany-based BMW already offers HD radio tuners as a stand-alone option, and Ford Motor Company (NYSE: F) owned Volvo Vehicles will start offering HD Radio as a standard feature in 2009 for most of the company’s models.

HD radio has picked up significantly since 2002, when only 11 stations (AM and FM) offered a digital signal in addition to traditional analog signals. Now, more than 1,700 stations offer HD radio as well as second and third signals of specialized shows because digital signals use less bandwidth than analog signals. USA This day reports that carmakers moving in this direction is a major positive move for HD radio since the car is a major venue for radio. The newspaper also speculates that HD radio might prove a major threat for XM Satellite Radio Holdings (NASDAQ: XMSR) and Sirius Satellite Radio Inc. (NASDAQ: SIRI) subscriptions as well as any merger those companies make.

Unfortunately, many insiders point to many consumers unfamiliarity with and not knowing about HD radio as a problem for the product’s success. It seems likely that with carmakers picking it up as a standard feature, more consumers will become aware and adopt HD radio as a venue, if at most because it will be a standard feature. Regardless, HD radio much like HD TV is another development that gives consumers better quality and offers technology that audiophiles can enjoy and embraces new developments that are occurring concurrently with music industry and digital tracks.

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Filed under: Forecasts, Bad news, Products and services, Economic data

We have heard a lot of news over the past 12 months about the slowing economy and the effect it is having on major American automakers like Ford Motor (NYSE: F) and General Motors (NYSE: GM), but how are some smaller overseas automakers performing? As you might have guessed, the pain isn’t solely being felt by American automakers, and several European automakers are taking some measures to offset the slowdown.

PSA Peugeot Citroen SA, France’s biggest carmaker, warned it expects a decline of 4% for West European sales this year, while Fiat SpA, Italy’s biggest automaker, announced it plans to close Italian plants on concerns about soaring record oil prices and increased inflation.

Hurt by declining consumer spending, Fiat saw its sales plunging 16.5% in June. But this was not the worst and Peugeot warned about “an even greater slowdown” for European demand in the second half of the year. “The rest of the year is going to be a disaster for European manufacturers,” Stephen Pope, London-based chief global market strategist at Cantor Fitzgerald Europe, stated in a report on Bloomberg.

Fiat said it would close the doors of four factories for three weeks, which will result in lower production of Multipla vans, Alfa Romeo models and the Grande Punto hatchback. In addition, the automaker’s workforce will feel the impact as layoffs are expected to affect four of its six Italian vehicle plants between the months of September and November. The company’s layoffs will impact around 22,000 Italian workers, which represents around 75 % of its total Italian workforce.

For Peugeot, Europe’s No. 2 carmaker after Volkswagen AG, the current situation isn’t looking any better. The company tried to focus less on smaller models that brought lower profit and low-margin deals with fleet customers and rental firms, which resulted in a drop of 7.9% in U.K. sales.

Just don’t be too disappointing or concerned because there’s always room for even worse results, and further declines and production cutbacks are expected.

Eliza Popescu is a financial writer for the on the internet investment advisory service Investor’s Observer.

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Filed under: International markets, Bad news, Products and services, Consumer experience, Competitive strategy, China, US Airways Group (LCC), UAL Corp (UAUA), Oil, Recession

Fuel prices seem to be the number one concern on just about everyone’s mind lately, and it seems like things are not going to be getting better any time soon. As prices have risen to record levels, many of us have decided to cut back on our driving, especially on long trips in order to save a little on our fuel prices. Well, the airlines are no different, and there’s an interesting report this day in The Wall Street Journal showing how airlines are slicing back on long flights in order to save a tiny on fuel consumption.

It is a pretty nasty cycle we are seeing with the airlines. The higher fuel costs have led to higher tickets prices and extra fees. These higher prices have led to less air traffic, and that has led to an even greater need to find more ways to cover rising costs. Definitely a tough situation.

The new way they are starting to combat the high costs of flying is by slicing back, or postponing long international flights, in particular flights that are in excess of 12 hours.

A few years back, when oil was still “cheap,” long distance flights seemed to be the next large thing for airlines. The math definitely made sense. By offering travelers the chance to fly non-stop to their final destinations, airlines were able to tack on anywhere up to an extra 20% on their tickets, and consumers were ready and able to absorb the extra costs in exchange for the luxury of not having to make connections, endure long waits in airports for their connections, and have to wonder if their luggage would make it on time. Well, times have changed, and consumers are tightening their belts. Now there is a shift to lower-priced tickets, and consumers are willing to endure a bit of hardship in order to save a few dollars.

We’ve to look at it from the airlines point of view as well. With fuel prices going up, the math on long distance flights is just not adding up anymore. For flights that are in excess of 15 hours, airplanes use more fuel per mile per customer, but the added costs are not proportionate with the additional cost of the tickets. A losing situation all around. If you consider that airlines are having a tough time breaking even on their shorter flights, you begin to see just how hard they are getting hit on the longer flights that they’ve been offering.

The solution? Simple: cut the long distance flights. This is the trend we are seeing now, and probably one that’ll expand as time goes on.

Let’s look at a couple examples of what we’re talking about:

• US Airways (NYSE: LCC) group gained approval last week to postpone the begin of a 13 hour flight from Philadelphia to Beijing;
• Northwest (NYSE: NWA) was given permission last week to suspend its seven times a week cargo flight between the U.S. and China;
• Earlier this year United (NASDAQ: UAUA) was allowed to postpone flights from San-Fransisco to China;
• Thai Airways International has decided to put an end to its 17-hour Bangkok-New York route, and reduce Bangkok-Los Angeles flights. This move will result in Thai selling its Airbus super-long-haul jetliners.

These are just a few examples, and there are more.

The bottom line is that the current energy situation is definitely reshaping the way everyone does business, and in the end, will influence the way you travel. While the long distance air flight segment is a small niche for travelers, it is yet another warning sign that things are getting serious, and air travel as you know it might be changed forever.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the internet investment advisory service Investor’s Observer.

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Filed under: Major movement, Other issues, Press releases, Products and services, Management, Rants and raves, Market matters, IndyMac Bancorp (IMB), Recession

No more home mortgages for the time being. The former number two originator of home mortgages in the United States, IndyMac Bancorp (NYSE: IMB), is shutting down its operations and laying off 3800 workers, more than half of its employees.

By halting its prime business, IMB might as well have announced they’ve turned to stone, as it seems its financial situation is frozen for now. Last quarter it announced continued losses and changed its outlook from being profitable in the fourth quarter to seeing nothing but losses through 2008.

It is always difficult to discuss one’s failings, but nothing has been worse than my suggestion that IndyMac might be a screaming buy last year. The stock is down 97%. The sad truth is it was a screaming sell and my worst call since I have been writing for BloggingStocks.com. That will be a separate story.

This day, IndyMac is trading down 47% to $0.37. It will have to restructure once again and will be submitting a survival plan to the FDIC. The current market cap is about $37 million, while its losses over the last twelve months exceed $600 million.

Many questions haunt the troubled financial institution. How much money could it hope to make without its primary business activity up and running? When would they be able to start lending again if at all?

Above and beyond its need of cash for operations, how much cash will be burned defending itself from major lawsuits? Will the government be forced to assign its assets to another lender and shut them down? Why did management make optimistic announcements while they were watching losses rise out of control?

One of my friends asked me last week if I thought IndyMac was worth a long-shot bet. At the time, it was trading around $0.80 and this day it less than half that. I told him then that I have no idea. That’s still true and with what I’ve witnessed the last six months, I don’t think anyone else knows either.

Update: closing price $0.44, down -$0.27 ( -38.03%)

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: I own shares of IMB.

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Filed under: Products and services, Toyota Motor Corp. (TM), Japan

Toyota Motor Co.’s (NYSE: TM) Prius hybrid is by far the world’s most successful hybrid automobiles, with sales numbering over one million units. In addition to the great gas mileage these gas/electric automobiles provide, could these vehicles become even more efficient? According to Toyota, that’s already in the works.

The Japanese automaker was featured in Japan’s Nikkei newspaper yesterday as saying it will start installing rooftop solar panels on its next-generation Prius cars. Starting with the high-end model, these solar panels will be used to power the air conditioning systems of the car. According to the Nikkei report, these solar panel arrangements might start showing up as next spring.

If Toyota can pull this off, it will mark yet another milestone in automotive history: including solar panel technology in a mass-produced vehicle. It could also set off a trend to power automotive subsystems directly from solar power instead of internally generated power from the gas engine/alternator system or the onboard electric motor. Solar power is abundant and free — why not use it as much as possible?

Now, where are the other automakers with this? General Motors (NYSE: GM)? Ford Motor (NYSE: F)? A show of hands, please.

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Filed under: Forecasts, Bad news, Consumer experience, Economic data, Housing, Recession

Chances are, if you follow the economy at all, there are two things on your mind, oil and housing. Despite a couple days in a row of oil selling off, it seems like high oil prices are here to stay for a while. And housing continues to remain weak, with signs pointing to more weakness in the months to come.

I am sure you’re as sick of hearing about homes sales as I’m, but unfortunately it is something we’ve to look think about, and this day we get more bad news, as the National Association of Realtors announced that Might was yet another tough month for pending home sales. In fact, with a reported 4.7% drop in pending home sales, Might was the third lowest month on record, a sign that tough times are still here, and probably going to be sticking around for a while longer.

First, let’s get a superior idea of what exactly we’re speaking about here. What are pending home sales? Simply put, a home sale is pending when there has been an offer made and accepted, but the deal has not yet closed. The lag between the acceptance and the closing is typically one to two months. The index to track this was started back in 2001, so to get to a 100 rating, you would have to have the average level of sales activity that we were seeing back in 2001.

Earlier this year, we saw the lowest monthly record since the index stated, at 83 in March. Compare this with the situation at the begin of last summer, when the index was running at 98.5 during May of 2007. Going into today’s report, Wall Street was hoping to see pending sales this May at 87, but were disappointed to see an actual reading of 84.7, a 4.7% decline from an upwardly revised April figure.

On a brighter note, we did see that existing home sales were a bit higher in May, which points to the fact that consumers are starting to become attracted to the highly discounted real estate that’s becoming more and more available out there. This is a good sign, but most economists still agree that prices are going to have to continue to move lower before any meaningful rush is made on real estate, since people are just too scared to starting jumping into the market.

So, slightly blended messages, but there seems to be plenty of reasons to assume that the housing situation will remain fragile through at least the end of 2008. Will we see the market start to bottom out in the next few months? Quite possibly, but we’re definitely not at the end of the tunnel yet, and another few tough months are probably on the horizon.

Michael Fowlkes has worked as a stock trader for seven years and spent the last four years working as an analyst for the on the web investment advisory service Investor’s Observer.

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Filed under: Forecasts, Housing, Federal Reserve, Recession

Macroeconomics, many economists concur, is as much an art as a science. And sometimes it requires the ‘reading between the lines’ skills of a Kremlinologist during the Cold War.

Here’s my reading between the lines analysis of recent Fed statements on housing: more housing-related write-offs (and pain) for certain banks and others with mortgage-backed debt.

Yellen, Bernanke speeches: Signals?

The evidence: first, San Francisco Federal Reserve President Janet Yellen, currently a non-voting member on the Fed’s Open Market Committee, delivers a low-key, candid-but-not-alarmist speech Monday to the San Diego Economics Roundtable in which she warns that “things could get worse before they get better” and that problems affecting the financial system could stick around “for some time.”

Economist David Wang said Yellen’s speech could be interpreted “as her staking out a claim on the dovish [interest rate cut] end of the Fed” were it not for the fact that the measured, always dispassionate Yellen “is not known for politicking or embellished commentary.”

Wang stated had Yellen’s comments stood in isolation, “one wouldn’t read much into it.” However, on Tuesday Fed Chairman Ben Bernanke, at an FDIC conference in Arlington, Va., said the Fed may extend securities dealers’ access to direct loans from the Fed into 2009 as long as emergency conditions “continue to prevail.” Bernanke added the Fed would “take a leading” role in any liquidation process for a failing investment bank.

Wang stated, taken together, the Fed, in Wang’s interpretation, “is sending a signal that we’re not done with the housing-related asset defaults.”

“I don’t think we’re going to see a batch of write-offs as large as the previous cycles, but from Yellen’s and Bernanke’s comments, I think one can reasonably conclude they’re bracing the stock and bond markets for additional bad news,” Wang said. “My conclusion assumes the Fed may know a little more than the markets know at this time. My sense is, they do.”

Economic Analysis: As Wang noted, reading between the lines, when two Fed members take pains to say that ‘all is not 100% well, yet’ and that the Fed remains at the ready to address adverse events, expect more housing-related turbulence ahead.

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Filed under: International markets, Bad news, Federal Natl Mtge (FNM), Lehman Br Holdings (LEH), Housing

“It’s like that wave approaching the shoreline that you see in the distance and don’t think is big, and then it’s 100 feet in front of you and you realize it is.”

That’s how London-based economist Mark Chandler described Europe’s perspective on the potential ‘latest wave’ of the housing crisis — the research report by Lehman Brothers (NYSE: LEH) that Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE) might have to raise up to $46 billion and $29 billion in additional capital, Bloomberg News reported.

Europe is concerned that the pair’s announcement “signals another round of write-downs here in England and Europe as well as in America” Chandler told BloggingStocks Tuesday, with negative consequences for the stock market, and, equally significant, for business and consumer confidence, he stated.

Europe’s major stock markets decline

Indeed, Europe’s major stock markets didn’t react favorably Tuesday to the Lehman report. London’s FTSE fell 66.70 points to 5446.00, Germany’s DAX declined 104.49.35 to 6,291.71, and France’s CAC 40 fell 78.22 to 4,263.37 in Tuesday afternoon trading.

Banks worldwide have already written-down about $400 billion in debt and related instruments due to the end of the housing boom, and an accompanying surge in mortgage defaults and related asset defaults.

Chandler said Europe is not concerned that the markets will see a repeat of the contagion and lack of confidence in debt that froze credit markets August 2007, but that the write-downs “will be another `contractionary’ force on economies that can ill afford it.”

“The concern now isn’t so much one of liquidity as it is of recession,” Chandler said. “Growth, while muddling along here in the U.K. and on the [European] continent, is slowing and there’s a sense now that another round of housing-related write downs will sap confidence enough to trigger a recession.”

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Filed under: Housing, Federal Reserve, Recession

U.S. Federal Reserve Chairman Ben Bernanke said Tuesday the world’s most powerful central bank may extend securities dealers’ access to direct loans from the Fed into 2009 as long as emergency conditions “continue to prevail.”

Bernanke, speaking Tuesday in Arlington, Virginia, at the FDIC Forum on Mortgage Lending for Low/Moderate Income Households, stated “the Federal Reserve is strongly committed” to financial stability and is “considering several options, including extending the duration of our facilities for primary dealers beyond year-end.”

Further, Bernanke also stated the Fed would “take a leading role” in any liquidation process for a failing investment bank.

The Fed, and other U.S. Government institutions, as well as other major central banks, are in the midst of dealing with the aftereffects of the end of the housing boom in the U.S., which led to a surge in mortgage foreclosures and related asset-back defaults.

In addition to lowering key, short-term interest rates by 325 basis points to 2%, the Fed has also established special credit facilities, including the Term Auction Facility and the Term Securities Lending Facility, to maintain dealer and investment bank liquidity, and to ensure the orderly function of markets.

Fed / Economic Analysis: A good news, bad news speech by Chairman Bernanke. The good news is Bernanke has sent a strong signal that an investment bank implosion would prompt a liquidation process coordinated by the Fed, if not a direct Fed intervention. That’s consistent with the “too big to fail thesis.” The bad news is there may be more housing-related pain ahead, with the proof being Q2 earnings reports of investment banks and others with mortgage and related assets exposure. Stay tuned…

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