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Laurie Pasternack
New York - http://www.theflyonthewall.com

Laurie Pasternack is an Associate Editor at financial news site Theflyonthewall.com. She has a BA in English Literature from Binghamton University.

MAJOR PAPERS:

• A loss of confidence in the government sponsored mortgage firms Federal National Mortgage Association (NYSE: FNM), or Fannie Mae, and Federal Home Loan Mortgage Corporation (NYSE: FRE), or Freddie Mac, resulted in both companies shares plunging about 15% to 14 year lows. Because the two are the largest providers of funding for mortgages in the U.S., their troubles are significant as both may have to issue billions of dollars in stock to save themselves, diluting current shareholders, according to the Wall Street Journal.
• For 75 years the NFL's Pittsburgh Steelers have been owned by the Rooney family, but that may now change as the Wall Street Journal reported that the family is seeking to sell the football team which is valued at about $1.2B. One potential buyer is Stanley Druckenmiller, a billionaire, and chairman of Duquesne Capital Management in Pittsburgh.
• British Prime Minister Gordon Brown yesterday raised the issue of visa problems facing BP Plc (NYSE: BP) employees in Russia with Russian President Dmitry Medvedev, but Medvedev did not make any concessions on the issue, according to the Financial Times. Some people have suggested that BP's billionaire partners in its Russian joint venture, TNK-BP, have orchestrated the visa problems in order to gain control of the venture.

MOST NOTEWORTHY:

• Oppenheimer initiated SuccessFactors Inc (NASDAQ: SFSF) with an Outperform rating and $15 target. The firm believes the company's double-digit revenue growth will continue as its differentiated HCM solutions gain broad-based adoption. Deutsche Bank believes the company has a strong opportunity to build a highly profitable business as it broadens its footprint, and started shares with a Buy rating and $15 target.
• Deutsche Bank also reinstated coverage of Taleo Corporation (NASDAQ: TLEO) with a Buy rating and $35 target. The firm believes the Vurv acquisition will create significant accretion in 2009 and that investors should take advantage of the recent share weakness.
• Oppenheimer assumed coverage of Penn National Gaming Inc (NASDAQ: PENN) with an Outperform rating and believes the termination of Penn's acquisition by Fortress Investment and Centerbridge will be catalysts for the stock, as they think it provides the company with financial flexibility. In addition, the firm believes Penn's management team has historically made prudent capital decisions.

• Petrobras Brasileiro SA (NYSE: PBR) was initiated with a Buy rating and $92 target at Goldman.
• Cowen resumed coverage of LeMaitre Vascular Inc (NASDAQ: LMAT) with an Outperform rating.
• Sanofi-Aventis SA (NYSE: SNY) was started at ING with a Hold rating.

MOST NOTEWORTHY:

• UBS downgraded Merck & Co Inc (NYSE: MRK) to Neutral from Buy citing slowing Gardasil trends and vaccine supply issues.
• Merriman cut On2 Technologies Inc (AMEX: ONT) to Neutral from Buy to reflect the reduced visibility into financials and management changes.
• Baird downgraded shares of Zions Bancorporation (NASDAQ: ZION) to Neutral from Outperform to reflect deteriorating credit quality and growing capital concerns. The firm lowered their target price to $32 from $43.

• AstraZeneca Plc (NYSE: AZN) was downgraded to Hold from Buy at Deutsche Bank.
• JP Morgan lowered Marshall & Ilsley Corporation (NYSE: MI) to Underweight from Neutral.
• Acme Packet Inc (NASDAQ: APKT) was downgraded to Neutral from Buy at Piper.

MOST NOTEWORTHY:

• Keefe Bruyette upgraded the European Banks sector to Neutral from Underweight on valuation as they see limited downside from current levels. Included in the firm's top picks are HSBC Holdings Plc (NYSE: HBC) and Banco Santander SA (NYSE: STD).
• Credit Suisse upgraded the Paper and Forest Products sector to Overweight from Underweight citing valuations and expectations that fundamentals will bottom this fall. The firm raised shares of Temple-Inland Inc (NYSE: TIN) and Smurfit-Stone Container Corporation (NASDAQ: SSCC) to Outperform from Neutral.
• Friedman Billings upgraded shares of Kindred Healthcare Inc (NYSE: KND) to Outperform from Market Perform on valuation following the recent pullback and believes the company is well-positioned to beat modest expectations over the remainder of the year. The firm raised their target to $36 from $29.
• Oppenheimer raised Convergys Corporation (NYSE: CVG) to Outperform from Perform on valuation, as they believe investors should look at the company's business lines separately. Their sum of parts valuation yields an $18 target.

• Suncor Energy Inc (NYSE: SU) was upgraded to Overweight from Neutral at JP Morgan and to Outperform from Market Perform at Friedman Billings.
• UBS upgraded BT Group Plc (NYSE: BT) to Neutral from Sell.
• Broadcom Corporation (NASDAQ: BRCM) was upgraded to Buy from Neutral at Piper.

MAJOR PAPERS:

• The Financial Times reported that Bain Capital, The Blackstone Group LP (NYSE: BX) and General Electric Company's (NYSE: GE) NBC universal will acquire The Weather Channel properties from Landmark Communications for approximately $3.2B in a leveraged buy-out. The Weather Channel will be run separately.
• A top Goldman Sachs Group Inc (NYSE: GS) trader is defecting to GLG Partners Inc (NYSE: GLG), the UK's second-largest hedge fund. Goldman's Driss Ben-Brahim, a partner in the firm and the head of its emerging market trading business, will take over GLG's $1.2B emerging markets special situations fund, the Financial Times reported.

• Take-Two Interactive Software Inc (NASDAQ: TTWO), which makes video games, will probably sign video game creator Ken Levine to a new contract. The deal would bolster Take Two's argument that its value exceeds the $25.74 per share that Electronic Arts Inc (NASDAQ: ERTS) has offered as a takeover price for the company, The New York Post believes.

• Reuters reported that Deutsche Bank AG (NYSE: DB) is the only bidder remaining for Citigroup Incorporated's (NYSE: C) German retail operations. Sources said Commerzbank AG (OTC: CRZBY) dropped out of the running on Friday.

MAJOR PAPERS:

• According to people familiar with the situation, the Wall Street Journal reported that Yahoo! Inc (NASDAQ: YHOO) is again talking to Time Warner Inc (NYSE: TWX), this time about taking over AOL, with Time Warner taking a stake in the combined entity. News Corporation (NYSE: NWS) has its eye on any Yahoo moves. Meanwhile, Microsoft Corporation (NASDAQ: MSFT) is considering what its next move against Yahoo might be and is talking to News Corp.
• The Wall Street Journal also reported that, as part of the company's plan to cut costs, Tribune Co's Los Angeles Times newspaper may look to cut about 250 jobs, including about 17% of its news staff.
• The Financial Times reported that Chrysler, which has been searching for foreign partnerships, signed with China's Great Wall Motor a memorandum of understanding to explore long-term business ties in areas that include technology, distribution and components.

• According to the Dallas News, AMR Corporation's (NYSE: AMR) American Airlines informed its flight attendants' union that is may lay off 900 flight attendants on August 31.

• Yonhap reported that LG Electronics will release "Dare," a new touch-screen mobile phone in the U.S. that will compete with Apple Inc's (NASDAQ: AAPL) latest iPhone models.

MAJOR PAPERS:

• According to people familiar with the discussions, the Wall Street Journal reported that Microsoft Corporation (NASDAQ: MSFT) has held discussions with Time Warner Inc (NYSE: TWX) and News Corporation (NYSE: NWS), among others, about joining it in a deal that could lead to the breakup of Yahoo! Inc (NASDAQ: YHOO). Some of the sources said the preliminary talks are unlikely to result in a deal with Yahoo!
• Johnson & Johnson (NYSE: JNJ) is reportedly in exclusive talks to sell its wound-care business Ethicon to the private-equity arm of JP Morgan Chase & Co (NYSE: JPM), according to the Wall Street Journal. Terms of the potential deal were not disclosed.

• Sources familiar with the inquiry said that the Justice Department has opened a formal antitrust investigation into a deal that would allow Google Inc (NASDAQ: GOOG) to provide some search advertising for Yahoo!. The Washington Post reported that investigators will demand documents from Google and Yahoo!, as well as other large companies in the media and Internet industries.

• Reuters reported that regulators in the European Union are looking at the long-term effects of BHP Billiton Limited's (NYSE: BHP) $170B bid for Rio Tinto Group (NYSE: RTP). Sources familiar with the EU questionnaire said regulators have asked competitors and customers about effects of the deal on their businesses through 2015.

MAJOR PAPERS:

• In a cost cutting move, struggling automaker Chrysler said it will idle its St. Louis South minivan plant in October, and will reduce operations at its St. Louis North Dodge Ram pickup truck plant to one shift in September, the Wall Street Journal reported. About 2,400 people will lose their jobs at both plants.
• In an unprecedented move, the Justice Department is pressuring UBS AG (NYSE: UBS), a foreign bank, for the names of wealthy U.S. client who used the bank to avoid paying taxes, reported the Wall Street Journal, and has sought a federal court order to proceed.

• After learning Moscow authorities have refused to renew the work visas of BP Plc's (NYSE: BP) expatriate staff, the New York Times reported that the British oil company may be in danger of losing control of TNK-BP Holding, its Russian joint venture. If the top officials from the BP side of the venture, including the CEO and CFO, are forced to leave, TNK-BP will fall into the hands of its Russian partners.
• In an upheaval aimed at preventing too much power from being exercised by the company's chairman, the UK Times reported that UBS has decided to replace four board directors in October. The governance model, which will separate the roles and responsibilities of the board and executive management, will reportedly come into play immediately and will allow the board to delegate the duties formerly allocated to the chairman's office to board committees.

MAJOR PAPERS:

• After being downgraded by Moody's, The Wall Street Journal reported that MBIA Inc (NYSE: MBI) will have to make $2.9 billion in termination payments and put up an additional $4.5 billion in collateral on agreements called Guaranteed Investment Contracts. As a result the firm is selling municipal bonds to raise cash.
• Anheuser-Busch Companies Inc (NYSE: BUD) introduced a new business plan to help thwart a takeover by rival InBev. As part of its plan, The Wall Street Journal reported its intention to reduce headcount, raise prices and buy back more of its shares.
• In an attempt to withstand the economic slowdown, the Financial Times reported that Siemens AG (NYSE: SI) announced plans to cut 17,200 jobs worldwide. Approximately 6,400 job cuts will be in Germany with a third more, elsewhere in Europe.
• The Financial Times also reported that Citigroup Incorporated (NYSE: C) is planning to change its bonus system for hundreds of its top managers, in an attempt to increase cooperation and reduce competition within the company.

• John Varley, the CEO of Barclays Plc (NYSE: BCS), said the GBP4.5B rights issue answered naysayers, and said in an interview with The Sunday Telegraph that extra financing will not be necessary.

MAJOR PAPERS:

• The Wall Street Journal reported that is is not yet certain whether Merrill Lynch & Co Inc (NYSE: MER) will need to raise money. If it does, selling common stock could be expensive due to a 12-month protection the bank offered the investors that bought $12B in common and preferred shares earlier this year and selling assets like its interest in Bloomberg may present a different problem.
• The Wall Street Journal also reported that investigators from the European Union are probing deeper into the pharmaceutical industry in an effort to determine whether drug companies have used unfair tactics to increase prices and block competition. Investigators have reportedly ask for views on direct-to-pharmacy distribution channels, which Pfizer Inc (NYSE: PFE) and AstraZeneca Plc (NYSE: AZN) recently established in Britain.
• After Anheuser-Busch Companies Inc (NYSE: BUD) said it would reject InBev's $46B bid as "financially inadequate," InBev said it would launch a hostile bid. According to court documents, the Financial Times reported that InBev is preparing to launch a proxy battle seeking the removal of Anheuser's entire board.
• The Financial Times also reported that soaring energy prices are forcing U.S. consumer goods company The Procter & Gamble Company (NYSE: PG) to rethink how it distributes products. The company may consider shifting manufacturing sites closer to consumers in order to lower its transport bill.

MAJOR PAPERS:

• Anheuser-Busch Companies Inc (NYSE: BUD) is going to turn down InBev's unsolicited $46.35B takeover offer and that may come before week's end, the Wall Street Journal reported. InBev is then expected to pursue a hostile takeover and Anheuser will say the offer undervalues the company. Instead, Anheuser will attempt to boost its share price by selling non-core assets such as its theme parks.
• The Wall Street Journal also reported that Belgian-Dutch financial firm Fortis NL (OTC: FORSY), in a move to increase its solvency, will attempt to raise $12.54B, and will also cancel its interim dividend and sell some assets.
• According to people familiar with the situation, the Wall Street Journal reported that JP Morgan Chase & Co (NYSE: JPM) reportedly dropped out of the bidding for General Electric Company's (NYSE: GE) $30B credit-card business. The sources said Citigroup Incorporated (NYSE: C), Bank of America Corporation (NYSE: BAC) and Capital One Financial Corporation (NYSE: COF) are not expected to submit bids, as a result of charge-offs and rising delinquencies in their own credit card portfolios.
• The Financial Times reported that the London Stock Exchange, in a joint venture with Lehman Brothers Holdings Inc (NYSE: LEH), unveiled a pan-European equities trading platform to fight rivals that are hurting its market share.

MAJOR PAPERS:

• The stock is up 150% over the last year but with its move into the consumer marker BlackBerry maker Research in Motion Limited (NASDAQ: RIMM) is entering the fickle world of consumer trendiness, reported the Wall Street Journal's "Heard on the Street". Analysts are concerned about how big the consumer market can be for them, and then there's Apple Inc (NASDAQ: AAPL) and Nokia Corporation (NYSE: NOK) beating down the consumer path. Smart products will help, but price is an issue, and the shares could face a hard fall.
• The Wall Street Journal reported that Wachovia Corporation (NYSE: WB) acknowledged it has hired The Goldman Sachs Group Inc (NYSE: GS) to study its troubled portfolios of mortgages, a move which many believe indicates the bank is gauging the market value of the loans in order to eventually sell them.

• Lazard Ltd (NYSE: LAZ) was hired by UBS AG (NYSE: UBS) to undertake a strategic review of the Swiss bank's businesses, the New York Post learned.
• The New York Post also reported some reported turmoil at Live Nation Inc (NYSE: LYV), following the abrupt departure of the concert promoter's chairman, Michael Cohl. Employees in the unit that was led by Cohl fear that the company will lay some of them off, and CEO Michael Rapino is accused of not being strongly committed to the company's mega-deal strategy.
• The Boston Herald reported that its unions were told the newspaper will lay off 130 to 160 workers, under its new plan to outsource printing operations elsewhere in the state.

MAJOR PAPERS:

• The Wall Street Journal's "The Game" column speculates that one of the results of the Bear Stearns crash could be the push of investment banks and commercial ones closer together, which could result in better handling of volatility with more stability. Some observers think Merrill Lynch & Co (NYSE: MER), Morgan Stanley (NYSE: MS) or The Goldman Sachs Group Inc (NYSE: GS) could go that route by buying a commercial bank. Any move would force them to adhere to better reserve ratios, affect short term bank funding, and shrink balance sheets.
• The Wall Street Journal reported that Google Inc (NASDAQ: GOOG) will soon make available a new service that measure hits on the Internet with the intent of helping advertisers decide where to buy ads online and would directly compete with comScore Inc (NASDAQ: SCOR) and Nielsen Online. Ad executives said Google's method could make targeting markets more efficient.
• A Manhattan judge dismissed four claims made by American International Group Inc (NYSE: AIG) in its fight to regain control of a block of its shares held by Starr International, a company that once founded a lucrative compensation plan for AIG executives. AIG believes the shares held by Starr should continue to be used to fund employee compensation, the Financial Times reported.

• According to Scorpio Partnership, Bloomberg reported that UBS AG (NYSE: UBS) and Merrill Lynch had slower growth in assets under management last year due to losses connected to the U.S. subprime crisis.

MAJOR PAPERS:

• Last November, Google Inc (NASDAQ: GOOG) and 30 partners were said be developing a new type of handset using Android that was expected to revolutionize the industry. The first new phones were expected to be available in this year's second half but are now slated for the fourth quarter the Wall Street Journal reported.
• According to people familiar with the situation, the Wall Street Journal reported that Citigroup Incorporated (NYSE: C) will make sharp cuts in its investment banking division this week.
• The Wall Street Journal reported that Live Nation Inc's (NYSE: LYV) Chairman, Michael Cohl, stepped down down as a director and executive to end the strategy feud with CEO Michael Rapino. over how to pursue the "360 deals" with music superstars.
• The Financial Times reported that there are worries that investment banks will accelerate the pace of their layoffs this summer, after it became known that The Goldman Sachs Group Inc (NYSE: GS) gave pink slips to workers in its investment banking division last week. Goldman is now expected to lay off up to 10% of the workers at the division.

• New Jersey put its $150M center for stem cell research on hold, the Star Ledger reported, eight months after ground was broken on the project.

MAJOR PAPERS:

• The Wall Street Journal reported that, in an attempt to move past its takeover battle with Microsoft Corporation (NASDAQ: MSFT), Yahoo! Inc (NASDAQ: YHOO) is planning a reorganization. People familiar with the matter said executives are discussing a plan to centralize numerous product groups into a global-product organization. Details may be announced next week.
• The Wall Street Journal also reported that an internal feud at Live Nation Inc (NYSE: LYV) over strategy may soon be resolved, as the concert promoter is reportedly negotiating the exit of chairman Michael Cohl.

• A recommendation by an Australian commission to open Rio Tinto Group's (NYSE: RTP) Pilbara railway to third parties could cost $30B if the idea is implemented, Rio contended and the Australian reported. The National Competition Commission, which advises Australian governments on infrastructure issues, has suggested that Fortescue Metals Group be given access to certain rail lines operated by Rio Tinto.

• A joint investigation by CBC News and the Canadian Press found one-third of people shot by Taser International Inc's (NASDAQ: TASR) Tasers reportedly required some medical attention, Engadget reported.
• TechCrunch confirmed that Joshua Schachter, the founder of delicious, will resign from Yahoo!. Sources believe the near-stalled development of the new version of delicious may have played a part in his resignation.