Brazilian beef company JBS S.A., which acquired Swift & Co. last year and suddenly became the third-largest beef processor in the U.S., stunned the U.S. beef industry last night and today with announcements that it has reached agreements to acquire National Beef Packing Co. and the beef processing and cattle feeding operations of Smithfield Foods Inc.
The acquisitions would make JBS by far the largest beef processor in the U.S. with a combined National/Smithfield/Swift capacity of 42,500 head per day.
This would exceed the capacity of Cargill Inc., which can handle 29,000 head per day, and Tyson Foods Inc., which can handle 28,300 head per day. Globally, JBS, which already is the largest beef processor in the world, would run 80,000 head per day at plants in Brazil, Argentina, the U.S., Australia and Italy.
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Wednesday, March 5, 2008
Housing rescue: What you need to know
There are so many plans being floated to stem the subprime crisis and avert foreclosures, it's hard to keep track. A cheat sheet on the major proposals.
The government buys at-risk mortgages from lenders at steep discounts, restructures the loans to reduce payments and resells the loans in secondary markets. Investors in mortgage-backed securities take a loss, but get most of their investment back. Borrowers get refinanced mortgages.
One variation of the plan, proposed by Sen. Chris Dodd, D-Conn., would establish a new agency, modeled after the depression-era Home Ownership Loan Corporation, to buy loans. A similar idea from Rep. Barney Frank, D-Mass., would use an existing entity such as the Federal Housing Administration to do buy loans.
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The government buys at-risk mortgages from lenders at steep discounts, restructures the loans to reduce payments and resells the loans in secondary markets. Investors in mortgage-backed securities take a loss, but get most of their investment back. Borrowers get refinanced mortgages.
One variation of the plan, proposed by Sen. Chris Dodd, D-Conn., would establish a new agency, modeled after the depression-era Home Ownership Loan Corporation, to buy loans. A similar idea from Rep. Barney Frank, D-Mass., would use an existing entity such as the Federal Housing Administration to do buy loans.
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The $34 trillion problem
Medicare is poised to wreak havoc on the economy. And our presidential candidates are avoiding the issue.
Twice I have asked Alan Greenspan what he considers the greatest threat to the U.S. economy, and both times he has answered immediately with a single word: Medicare. He isn't so worried about the trade deficit and the housing crash; he figures market forces will sort them out. But Medicare is something else - a multitrillion-dollar problem that's about to get dramatically worse, and one that nobody wants to talk about. You'd think that the greatest threat to America's economy would be Topic A for the presidential candidates. But it's actually a topic they hate to touch.
Especially now. An analysis of their speeches shows that last year Senators Hillary Clinton, John McCain, and Barack Obama would occasionally mention the Medicare mess. But recently, with the economy slowing and voters feeling insecure, all three candidates have turned more populist: Their economic talking points are about feel-good reassurances, not about facing hard realities.
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Twice I have asked Alan Greenspan what he considers the greatest threat to the U.S. economy, and both times he has answered immediately with a single word: Medicare. He isn't so worried about the trade deficit and the housing crash; he figures market forces will sort them out. But Medicare is something else - a multitrillion-dollar problem that's about to get dramatically worse, and one that nobody wants to talk about. You'd think that the greatest threat to America's economy would be Topic A for the presidential candidates. But it's actually a topic they hate to touch.
Especially now. An analysis of their speeches shows that last year Senators Hillary Clinton, John McCain, and Barack Obama would occasionally mention the Medicare mess. But recently, with the economy slowing and voters feeling insecure, all three candidates have turned more populist: Their economic talking points are about feel-good reassurances, not about facing hard realities.
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Tuesday, March 4, 2008
Economic gurus: Counseling the candidates
Of all the advisers a candidate has, few are more important this year than the house economists.
You might think that being part of a presidential candidate's brain trust would mean high-level meetings in plush quarters with good food.
Not exactly. There are high-level meetings - but they're more likely to be conducted by phone or on the fly between stump speeches.
As for the food, when asked what surprised him most about campaign life, John McCain adviser Douglas Holtz-Eakin said, "How much I like eating out of vending machines."
But of course, with an economy to save and crowds to sway, who has time for dinner?
The economy is front and center in people's minds, and the leading presidential candidates are relying on economic experts to help them win the pocketbook persuasion game.
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You might think that being part of a presidential candidate's brain trust would mean high-level meetings in plush quarters with good food.
Not exactly. There are high-level meetings - but they're more likely to be conducted by phone or on the fly between stump speeches.
As for the food, when asked what surprised him most about campaign life, John McCain adviser Douglas Holtz-Eakin said, "How much I like eating out of vending machines."
But of course, with an economy to save and crowds to sway, who has time for dinner?
The economy is front and center in people's minds, and the leading presidential candidates are relying on economic experts to help them win the pocketbook persuasion game.
Read Complete Story
Oil hits record - near $104
Crude rises just below milestone as dollar sinks and big investment funds rush into commodities.
Oil reached a historic high near $104 a barrel Monday, surpassing the inflation-adjusted level of the 1980s, as a weakening dollar made crude futures attractive to investors.
U.S. crude for April delivery hit $103.95 a barrel in early trading before easing to settle at $102.45 on the New York Mercantile Exchange, up 61 cents for the day.
Crude has now passed what many analysts consider to be the previous record high - $103.76 when adjusted for inflation, set in early 1980 - following the Iranian Revolution. The record high is a bit subjective however - ranging from about $93 to over $103 - depending on the contract cited and the inflation calculation used.
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Oil reached a historic high near $104 a barrel Monday, surpassing the inflation-adjusted level of the 1980s, as a weakening dollar made crude futures attractive to investors.
U.S. crude for April delivery hit $103.95 a barrel in early trading before easing to settle at $102.45 on the New York Mercantile Exchange, up 61 cents for the day.
Crude has now passed what many analysts consider to be the previous record high - $103.76 when adjusted for inflation, set in early 1980 - following the Iranian Revolution. The record high is a bit subjective however - ranging from about $93 to over $103 - depending on the contract cited and the inflation calculation used.
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Bernanke: More mortgage, home woes ahead
Federal Reserve chairman says delinquencies and foreclosures are likely to rise, and home prices will fall further.
Mortgage delinquencies and foreclosures will continue to rise for a while longer and further declines in house prices are likely, Federal Reserve Chairman Ben Bernanke said Tuesday.
In a speech to the nation's community bankers, Bernanke said the imbalance between supply and demand for homes on the market will continue to eat into prices, which in turn will lead to additional reductions in homeowner's equity. He said the reset of adjustable rate mortgages higher will also contribute to the problem.
Bernanke detailed a number of steps being taken to limit home foreclosures, including counseling and adjustments of loan rates. But he concluded his speech by saying that "although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done."
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Mortgage delinquencies and foreclosures will continue to rise for a while longer and further declines in house prices are likely, Federal Reserve Chairman Ben Bernanke said Tuesday.
In a speech to the nation's community bankers, Bernanke said the imbalance between supply and demand for homes on the market will continue to eat into prices, which in turn will lead to additional reductions in homeowner's equity. He said the reset of adjustable rate mortgages higher will also contribute to the problem.
Bernanke detailed a number of steps being taken to limit home foreclosures, including counseling and adjustments of loan rates. But he concluded his speech by saying that "although lenders and servicers have scaled up their efforts and adopted a wider variety of loss-mitigation techniques, more can, and should, be done."
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Renewing 'Made in the USA'
Last month, another manufacturer announced that it was closing in my home state of Ohio, the 82nd in the past 12 months. This time it was Johnson Rubber, a 113-year-old maker of floor mats and rubber boots for steering columns.
Today's Ohio Democratic primary has given these plant closings national attention, and both Hillary Clinton and Barack Obama have laid out plans for reviving manufacturing. But critics dismiss these efforts (as a Feb. 24 Post article noted) as pandering and ineffective.
Neither critique is fair. Yes, the manufacturing sector has been hammered with the loss of 3.7 million jobs over the past seven years. But manufacturing remains vital to our nation's economy. One-tenth of all U.S. jobs are in the manufacturing sector -- good jobs that pay 20 percent more than the national average. Manufacturing accounts for 12 percent of gross domestic product and over half of our national spending on research and development.
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Today's Ohio Democratic primary has given these plant closings national attention, and both Hillary Clinton and Barack Obama have laid out plans for reviving manufacturing. But critics dismiss these efforts (as a Feb. 24 Post article noted) as pandering and ineffective.
Neither critique is fair. Yes, the manufacturing sector has been hammered with the loss of 3.7 million jobs over the past seven years. But manufacturing remains vital to our nation's economy. One-tenth of all U.S. jobs are in the manufacturing sector -- good jobs that pay 20 percent more than the national average. Manufacturing accounts for 12 percent of gross domestic product and over half of our national spending on research and development.
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