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By James Quinn US Business Editor
Published: 9:23PM BST 30 Sep 2009

Shares in CIT fell by 35.45pc – down 78 cents to $1.42 – on reports that the company’s fate “was hanging in the balance” as it considered launching a debt-for-equity swap intended to wipe out as much as 40pc of its $30bn (£18.7m) debt pile. That plan would be predicated on offering bondholders new debt secured against the company’s assets, as well as nearly all of the equity in a restructured CIT, virtually wiping out existing shareholders.

At the same time, reports also suggested that CIT, one of America’s largest lenders to small and medium-sized businesses, was in talks with Barclays Capital and Citigroup regarding some form of financing designed to keep the business afloat. If the company’s board does not receive enough support for its plans, it may seek to restructure itself in bankruptcy, having already told investors that Chapter 11 protection is one option open to it.

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In August, the board said it had until October 1 to come up with a plan acceptable to a majority of its bondholder steering committee, which forwarded a $3bn emergency loan to the company in July.

CIT is the latest victim of the tightening in the credit markets, namely the unsecured debt markets on which it traditionally relied for funding.

However, CIT’s situation has been exacerbated by it been given a “junk” credit rating by ratings agencies as a result of sustained losses and its deteriorating finances, making it near-impossible for the company to raise money in the open markets.

Last autumn, CIT received $2.3bn of funding from the US Treasury’s Troubled Assets Relief Programme (TARP), money which is unlikely to be repaid if it is forced into bankruptcy.

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(AP)  Federal Reserve Chairman Ben Bernanke uttered Friday a government program intended to spark lending to consumers and businesses is quiescent necessary even with other emergency lending programs winding down as the U.S. regulation recovers.

“An ongoing need still clearly exists” for the program, that also is aimed at making sure loans flow to the troubled trading real estate market, Bernanke said in brief remarks to a talk here sponsored by the Congressional Black Caucus Foundation.

The Term Asset-Backed Securities Loan Facility goes to the affection of efforts by the Fed and Obama administration to get credit smooth more normally again, a key ingredient to a lasting economic convalescence. The Fed has extended the TALF – which has the potential to bring about up to a $1 trillion in lending for households and businesses – into next year. It was originally set to expire at the end of this year.

Under the program, that got off to a slow start in March, the Fed provides loans to investors. They use the money to buy newly issued securities backed by auto and pupil loans, credit cards, business equipment, commercial real estate and loans guaranteed through the Small Business Administration.

In the first phase, the Fed was structure $200 billion available for the loans. However, investors have requested in a great degree less than that.

Still, Bernanke said the program is responsible according to indirectly financing nearly 3 million loans to households – excluding credit cards – and penuriously 400,000 loans to small business.

The program has attracted 121 borrowers such far, including investors of all sizes, he said.

But analysts argue it is still difficult for many consumers to secure loans, undivided of the forces threatening to restrain the budding economic recovery.

In fielding questions for his remarks, Bernanke said the TALF program helped drive down rates up~ auto loans, which have “improved considerably.”

Bernanke also said he was “hopeful the office in the auto industry is going to improve.” Auto sales – and extension – have gotten a lift from the now-defunct government Cash with regard to Clunkers program, where people got a rebate of up to $4,500 to corrupt new cars and trade in old gas guzzlers.

The Fed grand also pledged to reach out even more to minority-owned companies to prepare sure they are being included and helped by various government urgency lending programs.

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THE $146 million Stamford Plaza Hotel mixed-use redevelopment proposed by developer Ashington in Sydney’s exclusive Double Bay has been rejected by the NSW government because it would be too intrusive to the community.

The highly controversial twin-tower proposal by the company that millionaire Mark Bouris recently chaired has faced opposition from some of the most high-profile names in the business and entertainment sectors, who live in the local area.

Yesterday, planning minister Kristina Keneally said the project was inconsistent with the character of the Double Bay town centre.

"The benefits of the proposal would not outweigh its impact on the Double Bay area," Ms Keneally said.

"The town centre sits within a valley floor and includes few developments extending above the existing mature tree canopy. This proposal for towers of 11 and 14 storeys was not in keeping with that."

She said the towers would have unacceptable overshadowing, noise and privacy consequences for local residents.

Under a proposal amended from its original plans, Ashington would have built two towers of 11 and 14 storeys over 19,500sqm. The complex would have included a 69-room five-star hotel, 44 residential apartments, ground-floor shops and an open air piazza.

An Ashington spokesperson said yesterday the company was disappointed by the minister’s decision and was reviewing its options.

Earlier this year, Wizard Home Loans founder Mark Bouris spoke out against opponents of the development, saying much of the criticism was misdirected and unwarranted.

Previously, he said, he had little to do with the project, but much of the opposition seemed to focus on him, rather than the fund manager.

Mr Bouris, who sold Wizard to GE Money in 2004 for $500m, recently stepped down as Ashington’s non-executive chairman before appearing as the boss in the television show The Apprentice.

Opponents of the project included former NSW Liberal leader Peter Debnam, Macquarie Group chairman David Clarke, actor Sam Neill and independent politician Peter King.

The thousands of residents opposing the Double Bay project have been represented by the No High-Rise in Double Bay Action Group, which has held public demonstrations to express their concern.

Opponents said they did not want the two multi-storey towers in the exclusive eastern Sydney suburb because they would spoil the area’s village flavour.

MUMBAI, INDIA: India’s Bharti Airtel said late on Wednesday it and South Africa’s MTN had called off talks for a planned tie-up due to the inability of the South African government to accept the deal in current form.

Bharti said it hoped the South African government would review its position in the future and allow both companies to re-engage.

Bharti and MTN revived merger talks in May, a year after previous talks broke down over who would control a merged entity. A merger would create an emerging markets giant with more than 200 million customers across India, Africa and the Middle East.

The talks had been extended twice and the present deadline was until Wednesday.

The deal faced scrutiny from regulators and politicians. South Africa is eager to retain MTN’s national character and had approached Indian authorities to consider a dual-listed entity, a structure Indian laws currently do not allow.

However, MTN declined to comment on the statement by Bharti Airtel, and sid that it would issue a statement later on Wednesday.

"We will send out a statement later on," MTN spokeswoman Nozipho January-Bardill said.

Meanwhile, South Africa’s rand extended its losses against the dollar on Wednesday after Bharti Airtel said it was calling off talks with MTN. The rand ZAR=D3 fell over 2 percent to as much as 7.62 against the dollar, from Tuesday’s New York close of 7.43. It last traded at 7.5650.

By Louise Armitstead, Chief City Correspondent
Published: 5:04PM BST 30 Sep 2009

Man Group

Man Group, which is seen as a bellwether for hedge funds, said assets under management were up 1.2pc to $43.8bn (£27.2bn) at the end of June. Although the increase was modest and the group admitted that institutional investors are still redeeming their money, the figures were above market expectations.

Shares in Man Group rose 7.5pc to 331.2p on back of the trading update for the six months ending September 30, ahead of the group’s interim results in November.

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Peter Clarke, chief executive, said: “Investor sentiment is continuing to improve across the industry, the performance outlook is healthy and the prospects for sustained industry inflows are very promising.”

After an appalling 2008, global hedge funds are rebuilding their tattered reputations with industry returns reaching 14pc in the first eight months of the year, according to Hedge Fund Research. Last year the sector lost an average of 19pc.

Man Group, whose assets peaked at $79.5bn in June 2008, was particularly hard hit by its exposure to the $50bn fraud perpetrated by Bernard Madoff, the Wall Street financier. The group lost $360m of client money in the fraud. In May, the group warned shareholders that management fees would suffer this year because institutional clients were defecting as a result. Man Group’s shares fell as low as 150p in March.

The hedge fund manager said positive performance across many of its funds in the first half had generated $30m in net performance fee income compared with $160m in the same period last year. However, its flagship AHL fund is suffering, down 6.9pc between April 1 and August 1.

Pre-tax profits fell 55pc to $280m, down from $622m at the same time a year ago.

In a note, Credit Suisse said: “We believe that Man Group is an outstanding franchise and believe that the decrease in the rate of institutional redemptions is likely to be seen positively by investors. Moreover we believe that the medium-term outlook for Man is positive given the strong private client distribution network in Asia.”

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Guy Laliberte, the founder of Cirque du Soleil, announced today he’ll be a space tourist in September.

(Getty Images)

Canadian circus tycoon Guy Laliberte turned space into his big top Wednesday, boarding a Russian rocket and lifting off on a mission that mixes a serious message on water shortages with some clowning around in the cosmos.

Laliberte, an experienced fire-eater and stilt-walker who founded Cirque du Soleil, joined Russian cosmonaut Maxim Surayev and American astronaut Jeffrey Williams aboard a Soyuz craft that soared off the Kazakh steppe and set a course for the International Space Station.

The billionaire who calls himself the first clown in space paid a reported $35 million for his nine-day stay at the station, where he plans to publicize the world’s growing shortage of clean water. His space extravaganza will culminate in a satellite linkup with shows in 14 cities across five continents featuring rock band U2 and Colombian pop star Shakira, as well as an appearance by former U.S. Vice President Al Gore.

With a puff of white smoke, the Soyuz craft carrying Laliberte and his crew mates shed its first rocket stage minutes after liftoff from the Baikonur launch facility and then disappeared from view.

Laliberte’s friends and family on the ground waited anxiously and then burst into cheers when an announcement that the ship had reached orbit blared over a loudspeaker. There were ecstatic hugs, sobs of relief and chants of “Guy! Guy!”

They then broke into an impromptu rendition of Elton John’s “Rocket Man.”

“I’m very happy for him. It’s amazing,” said Laliberte’s partner, former model Claudia Barilla, tears streaming down her face as she cradled their youngest son. “Now we know he’s up there.”

She wore a yellow clown nose as she watched the launch. Laliberte had donned a bulbous red nose before the launch and said he was taking nine of the novelty noses to the station for other occupants to wear. He has also mischievously warned he will tickle them in their sleep.

Also among the spectators was Quebec pop star Garou, a friend of Laliberte’s.

Orbiting satellites report billions of gallons of ice in the moon’s soil.

Trace amounts of water may be widespread on the moon, but many suspect significant water deposits – a potential resource for future lunar outposts – may be hidden in permanently shadowed craters at the moon’s poles.

NASA’s Lunar CRater Observation and Sensing Satellite (LCROSS) is set to collide with the moon’s south pole so that researchers can search for signs of this water in the plume of material it ejects. On 9 October, the spacecraft will shepherd the 2400-kilogram upper stage of its launch rocket into the lunar surface before colliding itself 4 minutes later.

Earlier this month, the team announced that they had picked the spacecraft’s target, a 48-kilometre-wide crater called Cabeus A on the moon’s south pole. The most promising spot was a smaller crater perched on the rim of Cabeus A, dubbed A1, that seemed to contain high levels of hydrogen, and thus potentially water, according to data collected by NASA’s Lunar Prospector, which orbited the moon in 1998 and 1999.

Obstructed View

But new measurements taken with NASA’s Lunar Reconnaissance Orbiter (LRO) now circling the moon do not show much hydrogen in the smaller crater. Likewise, Cabeus A itself is a less-than-ideal target, since much of the hydrogen it contains does not seem to be in permanent shadow, which would help protect water ice there from the sun’s heat.

In light of this data, LCROSS will now target a 98-kilometre-wide crater called Cabeus. Data from both Lunar Prospector and LRO “show a lot of hydrogen” there, says LCROSS principal investigator Anthony Colaprete of NASA’s Ames Research Center in Moffett Field, California.

Cabeus was not the team’s first choice because a large ridge obstructs the view of the crater from Earth. “There is a large mountain that’s about six kilometres tall or so on the northern side of the crater. So the ejecta has to fly up higher before it becomes visible to Earth observers,” Colaprete told New Scientist. Most of the debris in the plume created by LCROSS’s launch rocket stage is expected to extend no more than 10 kilometres above the lunar surface.

Children would be banned from using sunbeds in Wales under new laws to be proposed by the assembly government.

Unstaffed sunbed salons would also be banned under regulations planned by Wales’ Health Minister Edwina Hart.

It follows the case of a 10-year-old girl from Port Talbot who suffered burns after spending 16 minutes on a sunbed at an unsupervised salon.

But the sunbed industry has resisted calls for further regulations to control salons.

Ms Hart told the assembly’s health, wellbeing and local government committee the issue of unstaffed sunbed salons in Wales was a public health problem.

She said all ways to introduce new legislation were being considered including a request to Westminster for the assembly government to draft laws controlling the salons.

"I am particularly concerned about the use of coin-operated sunbeds," she said.

"It is my intention to prohibit the use of sunbeds by persons under 18 years of age and also ban the operation of unstaffed sunbed salons in Wales."

Ms Hart told the committee there was an issue with advertising and the promotion of images of tanned bodies, and she was concerned about the number of times young people might visit sunbed salons.

"(But) it’s not like going on holiday and there is a real issue with advertising," she said.

In Scotland a similar ban is due to come in by November.

‘Cancer risk’

Regulations could include tough new sanctions, ensuring protective eyewear is provided at salons, as well as giving users information on the health risks associated with using sunbeds.

Edwina Hart AM is worried about under 18s using sunbeds

An assembly government survey showed there were 419 tanning outlets in Wales of which 46 are unstaffed salons.

Sam Kirby of Consol sun centres, also gave evidence to the committee.

The company has the UK’s biggest coin-operated sunbed salons and represents about 2% of the sunbed industry.

She insisted the primary focus on all of their company’s communications was how to tan responsibly.

Ms Kirby said that CCTV had been installed to monitor who was using the sunbeds and for how long, and they had questioned 1,000 of their customers and none had indicated they had burnt on the sunbeds during a tanning session.

"Our experience in Consol studios through various means, research and CCTV, is that young people are not using our studios," she said.

"Of course, if for a minute we thought that was not the case then we would take that very seriously and want to do something about that."

There are serious scientific concerns that the use of sunbeds by people under the age of 30 may increase the risks of cancers including malignant melanoma.

Over the Easter holidays, a 10-year-old girl from Port Talbot suffered 70% burns after putting £8 into a coin-operated sunbed and spent 16 minutes on the bed.

Other cases of young teenagers being treated for burns in similar circumstances have also been highlighted in recent months.

Kathy Banks, chief executive of the Sunbed Association said it had never allowed unstaffed salons into its membership and would welcome a legal ban for unstaffed tanning facilities.

On the issue of non-use by under 18s, she said its code of practice "has always prohibited use by under 16s but of course if the law stipulated non-use by under 18s, it would change its code of practice accordingly to ensure its members meet all legal requirements".

The Chartered Institute of Environmental Health (CIEH) said it was a "huge step in the right direction".

The organisation’s director in Wales Julie Barratt said research it carried out last year found more than half of tanning salons surveyed would allow children under 16 to use a sunbed.

"There is clear evidence that the use of artificial tanning equipment just once a month can increase your risk of skin cancer by more than half," she said.

"These risks are increased in the young, highlighted recently by a number of incidents of children being seriously burned from unsupervised sunbed use."

Nina Goad of the British Association of Dermatologists said it was a "really positive move".

She said: "Scotland has already introduced restrictions as part of the Public Health Bill and while we welcome the recent research into similar legislation in England, we sincerely hope it leads to action sooner rather than later."

Canadian cell phone giant, Rogers Wireless, has officially introduced its HSPA+ Rocket Stick modem, allowing laptop computer users with a cellular broadband subscription to make use of its new 21-Mbps mobile data network.

The HSPA+ Rocket Stick is the first product to make use of Rogers’ upgraded network, which is initially available in Toronto, Montreal, Vancouver, Ottawa, and Calgary. Users in other cities can use the device to access Rogers’ existing 7-Mbps service.

The new Rocket Stick is now available at a cost of $74.99 with a two-year mobile broadband plan costing at least $25 per month. The retail price (without a contract) is $199.99.

A tsunami caused by a powerful earthquake in the South Pacific has killed at least 14 people and injured 50 in Samoa, local media report.

Dr Lemalu Fiu of the main hospital in the capital, Apia, said the number of casualties is expected to rise as the injured arrive from coastal areas.

An 8.3-magnitude quake struck at 1748 GMT, generating 5.1ft (1.57m) waves in Apia and Pago Pago, American Samoa.

A Pacific tsunami warning was issued, but it has now been cancelled.

The Pacific Tsunami Warning Centre (PTWC) said the quake struck at a depth of 33km (20 miles) some 190km from Apia.

Radio New Zealand quoted Samoan residents as saying that villages were inundated and homes and cars swept away.

Reports from the area say people in Samoa are fleeing to higher ground. Witnesses have reported scenes of destruction.

The water was swirling like a spa pool outwards [towards] the rim of the lagoon and in a few seconds the water sunk

Ula Osasa-Mano
Eyewitness

How earthquakes happen

Animated guide: Tsunamis

"Its horrible… The village is gone and my once beautiful beach front villa has now being submerged in water," Josh Nayangu told the BBC after fleeing the area on a small fishing boat with his wife and son.

Ula Osasa-Mano, who was visiting family on the island, told the BBC the water along the Apia seawall was turbulent.

"The water was kind of swirling like a spa pool outwards [towards] the rim of the lagoon and in a few seconds the water sunk," Ula Osasa-Mano said.

General alert

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The PTWC – a branch of the US National Oceanic and Atmospheric Administration – issued a general alert for the South Pacific region.

Stuart Weinstein, the deputy director of the PTWC, told the BBC that the agency was monitoring the situation, but said the wave was expected to be "much smaller" than the 2004 Asian tsunami which killed about 230,000 people in 11 countries.

Mr Weinstein said Tuesday’s quake had only had 3% of the energy generated by the 2004 quake.

He said he expected the quake to be destructive in the areas closest to the epicentre, but said it "remains to be seen" how far any devastation would spread.

By 2200 GMT, the tsunami warning had been cancelled.

The Samoa islands comprise two separate entities – the nation of Samoa and American Samoa, a US territory – with a total population of about 250,000 people.

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