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The only surprise was that it took so long. Attorney General Alberto Gonzales, apparently deciding he'd taken enough lumps, announced his resignation on Aug. 27. Gonzales was wounded by a scandal over firings of U.S. attorneys and had been identified with politically unpopular Administration policies on domestic wiretapping and the treatment of prisoners. President George W. Bush said Gonzales received "unfair treatment" in Washington and that his name had been "dragged through the mud." But even some Republicans on Capitol Hill voiced relief: "Our country needs a credible, effective Attorney General who can work with Congress on critical issues," remarked Senator John Sununu (R-N.H.).
Solicitor General Paul Clement will serve as Acting Attorney General once Gonzales steps down on Sept. 17. For business, it's one more sign that the Bush Administration is sinking deeper into lame-duck status, which will make it even tougher to accomplish corporate goals on everything from taxes to immigration. U.S. housing prices sank 3.2% in the second quarter, the steepest quarterly sag since the S&P/Case-Shiller Home Price Index was created in 1987. That, combined with plunging consumer confidence in August and minutes from the last Fed meeting indicating that a rate cut isn't a sure thing, combined to spook the markets on Aug. 28, with the Dow plunging 280 points. The next day, however, it bounced back. The latest outfit caught in the credit vise? Home Depot (HD
). On Aug. 28 the retailer officially said it would lop $1.8 billion off the sale price of its wholesale unit, HD Supply. Caught between jittery bank underwriters and skittish private equity buyers, the Atlanta company agreed to accept $8.5 billion, down from $10.3 billion in June, and buy back a 12.5% stake itself.See "Is Home Depot Giving Away the Store?" Altria Group (MO
) keeps dismantling itself. It sold off Miller Brewing (SBMRY
) to SAB (SBMRY
) and earlier this year spun off Kraft Foods (KFT
). Now it will also spin off the global arm of its cigarette business, Philip Morris International. The key reason: Cigs are still a growing market overseas but a shrinking one in the U.S. The company's crown jewel, its Marlboro brand, will be split, with Altria owning it at home and Philip Morris International abroad. For the past year, Bill Watkins, CEO of drive king Seagate Technology (STX
), has quietly expressed concern about national security breaches that could occur if a foreign government got the key to encryption software that's becoming a standard feature on drives. He finally got the world's attention on Aug. 25 when he told The New York Times (NYT
) the Chinese were in fact thinking of buying a U.S. drive maker. Seagate sources say it's not the target. The only other big U.S. drive maker, Western Digital (WDC
), isn't commenting. Taiwanese PC maker Acer said on Aug. 27 that it will buy U.S. also-ran Gateway (GTW
) for $710 million. The move will vault Acer past its mainland Chinese archrival, Lenovo (LNVGY
), into the No. 3 spot in the world. It also will keep strong European brand Packard Bell out of Lenovo's hands because Gateway has a right of first refusal on Packard, and Acer says it'll hasten to exercise it.See "Acer's Gateway to the U.S. Market" Hey, it worked for Russia, which forced big concessions on oil projects from Royal Dutch Shell (RDS
) and BP (BP
). So why not Kazakhstan? The country on Aug. 27 called a halt to work on the huge Kashagan field, citing environmental and customs violations. Experts figure that the government is seeking a better deal for itself. The field is operated by Italy's Eni (E
) and owned by a consortium that includes Exxon Mobil (XOM
), Shell, Total (TOT
), and ConocoPhillips (COP
). Turning from potential prey to hunter, U.S. Steel (X
) said on Aug. 27 that it would pay $1.1 billion for Canadian steelmaker Stelco. U.S. Steel has been on analysts' lists as a target of foreign steel producers assembling global empires. The takeover makes that harder by raising likely antitrust concerns for would-be acquirers. Not every private equity player has been turned bashful by the credit crunch. Billionaire Nelson Peltz and fellow investors in Triarc said on Aug. 28 they've reached a confidentiality pact with Wendy's International (WEN
) that would make it easier for them to finally gobble up the No. 3 hamburger chain. Peltz and partners, who own 9.8% of Wendy's stock and have three board seats, have been stalking it since last year. Who says an R-rated cartoon can't be a media darling? Viacom's (VIIA
) Comedy Central has signed South Park creators Matt Stone and Trey Parker to a contract through 2011 that guarantees them an unprecedented 50% share of ad revenues that TV outlets usually don't share with content creators. Comedy Central will also ramp up efforts to distribute South Park on the Net, cell phones, and other new technologies. The ex-colony strikes back: On Aug. 24, Tata Group Chairman Ratan Tata confirmed that the Indian behemoth may bid for British icons Jaguar Cars (F
) and Land Rover (F
), which Ford Motor (F
) has put on the block. The audacious move would catapult Tata, which makes cheap cars, into the luxury auto sphere. A bid is also likely from Indian rival Mahindra & Mahindra, and private equity firms are kicking tires, too. Las Vegas Sands (LVS
) Chairman and CEO Sheldon Adelson has made plenty of bets in his day, but on Aug. 28 he opened the doors to his biggest gamble yet: the $2.4 billion Venetian Macao-Resort-Hotel, a casino, 3,000-room hotel, and convention complex. Boasting 870 gaming tables and 3,400 slot machines, the casino is the world's biggest. And that's just for starters. By the end of 2009, the group's investment will grow to $12 billion after building 14 more hotels, offering a total of 20,000 rooms. Macao is the only region in China where gambling is legal. It overtook the Las Vegas Strip in gaming revenues last year, earning more than $7 billion, thanks to newly rich mainland Chinese. Filling all those hotel beds will still be a challenge. While Macao, a city of just 450,000, attracted more than 22 million tourists last year, they stayed on average only 1.25 days.See "Betting Big on China's Vegas"