Bear Stearns, Citic Near Deal to Take Stakes in Each Other

Bear Stearns and Chinese brokerage Citic Securities are close to finalizing a deal where both investment banks will invest about $1 billion in one another. Citic will receive roughly a 6% equity stake in Bear Stearns with the option eventually to raise it to 9.9%. Bear Stearns will buy $1 billion worth of Citic Securities debt in exchange for a 2% stake in the Chinese brokerage and receive the option to buy another 5% in the next five years.

A deal between Bear Stearns and Citic had been rumored since last week, when a senior Chinese banking regulator mentioned that Citic had bid for a stake in Bear Stearns. Citic later denied the reports. Citic’s shares were suspended Monday pending a news announcement.

Source: Wall Street Journal

IMF Punts on Big Issues, Leaving New Chief with Problems

The International Monetary Fund deferred making decisions on a number of big issues, including how to reallocate votes to major developing countries and how to finance the IMF, during its summit in Washington this past weekend. Incoming IMF chief Dominique Strauss-Kahn will be faced with reforming the IMF when he takes over Nov. 1.

Source: Wall Street Journal

China Promotes Two Possible Heirs to Hu

China promoted two members of the so-called “Fifth Generation” of leaders since Mao Zedong into the nine-man Politburo Standing Committee. Shanghai Party Secretary Xi Jinping, 54, is the favorite to succeed current President Hu Jintao, when he steps down in 2012. Hu’s protégé, Liaoning Province Party Secretary Li Keqiang, 52, was also promoted into the Politburo Standing Committee but ranks lower than Xi on the Party hierarchy.

Source: New York Times

Turkish PM Warns U.S. It Will Attack Kurdish Rebels in Iraq

Turkish Prime Minister Recep Tayyip Erdogan said his country will launch military action against Kurdish rebels in northern Iraq after the U.S. and Iraqi government failed to expel Kurdish separatists. Turkey was running out of patience and would defend itself. “Whatever is necessary will be done,” Mr Erdogan told the Times of London. “We don’t have to get permission from anybody.”

Source: Times of London

Wal-Mart Takes Over Japanese Subsidiary Seiyu

Wal-Mart will buy out the remaining 49% of its Japanese subsidiary, Seiyu, it doesn’t already own for about $350 million and will restructure the Tokyo-based retailer. Seiyu has posted annual losses since 2003.

Source: PRNewswire

Six Unions Reject Chrysler Deal, Jeopardizing Pact

Six local unions representing 11,000 of the United Auto Worker’s 45,000 Chrysler union members have rejected the UAW-Chrysler deal since voting started last Thursday. If the contract is not ratified by the unions, the UAW and Chrysler management will have to go back to the bargaining table. Senior UAW union leaders are redoubling their efforts in Michigan and Illinois to lobby for local union chapters to vote for the deal.

Source: Detroit Free Press

Raw Materials’ Shipping Costs Hit Record High

The cost of shipping grain, iron ore, coal and other raw materials across the oceans has reached an all-time high because there are not enough bulk ships to meet increasing trade with Brazil, China, India and other developing nations. The average price of renting a ship to transport raw materials from Brazil to China has nearly tripled to $180,000 a day from $65,000 a year ago.

Source: Wall Street Journal

Libraries Shun Google, Microsoft Offers to Scan Books on Web

Several major public libraries, including the Boston Public Library and the Smithsonian Institution, have rejected offers from Google and Microsoft to scan their books into computer databases. These libraries are concerned that if any one company gains a monopoly in the digital conversion of the books, it could exploit that dominance for commercial gains.< /p>

Source: New York Times

Kansas Rejects Coal Power Plants Application Due to Global Warming

Kansas’ top environmental regulators denied air quality permits for two coal-fired power plants in southwestern Kansas, citing concerns about global warming. “I believe it would be irresponsible to ignore emerging information about the contribution of carbon dioxide and other greenhouse gases to climate change and the potential harm to our environment and health if we do nothing,” said Kansas Department of Health and Environment Secretary Rod Bremby. This is the first time a power plant permit has been rejected due to climate change concerns.

Source: Lawrence Journal-World & News

Comcast Blocks File-Sharing Internet Traffice

Comcast has blocked attempts by high-speed Internet users of BitTorrent, eDonkey and Gnutella file-sharing networks to share music, video and software files. The second-largest Internet provider in the U.S. appeared to be managing its network to keep file-sharing traffic from swallowing too much bandwidth. However, critics say that Comcast’s practices violate “Net Neutrality” principles, under which large Internet providers should provide equal treatment to all Internet traffic.

Source: Associate Press