If anyone has a spare $300,000 to invest in a new manufacturing robot, could you please let Drew Greenblatt, president of Marlin Steel Wire Products, know? Normally he’d be getting this loan from his bank, Wachovia, but nowadays it seems it isn’t so keen on lending money. As the New York Times explains, the financial sector’s newfound frugality “has intensified the strains on the economy by withholding capital from many companies, just as joblessness grows and consumers pull back from spending in the face of high gas prices, plummeting home values and mounting debt.”
The Federal Deposit Insurance Corp. was forced to close two more regional banks, 1st National Bank of Nevada and First Heritage Bank N.A., on Friday, just two weeks after the run on California’s IndyMac. The closed branches will reopen this morning as Mutual of Omaha with no loss of deposits for any customers, the FDIC said. So, how safe is your bank? CNN Money looks to answer that question by analyzing just how the FDIC compiles its quarterly list of banks on the brink—currently standing at 90. When you look at the numbers, banking health is not as bad as you may have been led to believe. “Considering there are about 8,500 banks in the United States, 90 problem banks is not that large a number,” L. William Seidman, a former FDIC chairman, tells the site.
An IPO is normally a buoyant time for any company. Not so for legendary private-equity giant Kohlberg Kravis Roberts & Co., says the Wall Street Journal. Though KKR shares could be valued as high as $15 billion when it floats on the New York Stock Exchange, the IPO “reflects the troubled times roiling the investment industry” as KKR is selling the shares partly to bail out its struggling European affiliate, KKR Private Equity Investors. KKR has been angling to go public for nearly a year—part of a strategy to “expand its business beyond private equity to become a much broader asset manager,” notes the NYT—but has been stymied by the credit crunch. Famous (or infamous, depending on your point of view) for pioneering leveraged buyouts, KKR’s newfound desire to go public, along with others from the private-equity ilk, has some investors “questioning whether the firms are undermining the very model that they have said makes their investments so successful,” writes the NYT.
The Guardian reports that Ryanair, one of Europe’s most bullish budget airlines, has reported an 85 percent fall in first-quarter net profit and warned it could make a full-year loss of up to $94 million if jet fuel prices remain high and passengers continue to cut back on flying. High fuel prices continue to roil the U.S. economy as the WSJ illustrates in two stories, one documenting how “an unprecedented cutback in driving is slashing the funds available to rebuild the nation’s aging highway system,” and another describing how a combination of falling leased-car values and the credit crunch mean that Chrysler LLC must “refinance $30 billion of its lending arm’s working capital by Friday.” Chrysler is weighed down by plummeting lease values of its SUV, crossover, and light-truck fleet. (Business Week looks at the dire second-hand SUV market in some detail.) Chrysler’s business is so tight that it will stop offering auto leases starting in August.
Just when you thought the trend in American apparel was less is more, skimpy lingerie phenom Victoria’s Secret is trying to cover up. Forbes reports that the risque division of Limited Brands has launched the “Collegiate Collection” of T-shirts, tote bags, and panties, branded for the likes of Harvard, UCLA, Boston College, and the University of Michigan. “Co-branding with universities is another way to try to moderate their image, to get to where you can still be sexy but wholesome at the same time,” a retail analyst tells Forbes. What is academia coming to? They’ll be letting Playboy on campus next.
He dates Chinese superstar actress Zhang Ziyi; he’s best buddies with Lachlan Murdoch, Ronald Perelman, and Lenny Kravitz; and he just happens to be the largest private shareholder of Time Warner. Why have you never heard of Vivi Nevo? Because he’s the Zelig of the media industry, says a long NYT profile, which, to prove the point, interviews 16 different friends of Nevo’s, including Perelman, former TW CEOs Richard Parsons and Gerald Levin, as well as Kravitz … and still leaves us wondering about this Romanian-Israeli mini media baron.