Why can't Detroit make a comeback like The Big Three?
DETROIT (AP) – Four years ago, America's Big Three automakers mortgaged all they owned or went into bankruptcy court to keep from going broke.
Since then, General Motors, Chrysler and Ford have all returned to full financial health, unlike Detroit itself, which filed for bankruptcy Thursday after years of painful decline.
So why can't the Motor City use bankruptcy to transform itself in the same way? Unfortunately for Detroit, it's not that simple. Automakers were able to shed most of their problems in bankruptcy court and come out leaner and more competitive. The city can get rid of its gargantuan debt, but a bankruptcy judge can't bring back residents or raise its dwindling revenue.
SEC files charges against hedge fund founder Cohen
WASHINGTON (AP) – The Securities and Exchange Commission on Friday filed civil charges against Steven A. Cohen, accusing the billionaire hedge-fund manager of failing to prevent insider trading.
Cohen, 57, founded and runs SAC Capital Advisors, among the largest hedge funds, that at one point managed assets of more than $15 billion. The government has called the SAC Capital case one of the biggest insider-trading fraud cases in history.
The SEC said Cohen failed to supervise two portfolio managers at the fund and prevent them from illegal insider trading. As a result of the trades, the fund reaped profits and avoided losses of more than $275 million, the SEC said.
GE shares rise to post-crisis high on US outlook
NEW YORK (AP) – An improving outlook for the U.S. economy and signs of stabilization in Europe sent General Electric shares to their highest level since 2008 despite modest quarterly results.
"Orders in the U.S. were the strongest in some time," CEO Jeff Immelt said on a conference call with investors following the release of the company's second-quarter results Friday.
Immelt said the U.S. economic environment remained "mixed," but his outlook marked an improvement from recent quarters, when he expressed more caution about the U.S. market.
GE, based in Fairfield, Conn., has a broad view of the global economy because it sells a wide variety of industrial equipment and appliances around the world; including jet engines, medical diagnostic equipment, oil and gas drilling equipment and washing machines.
New Ford system helps warn police of approaches
DEARBORN, Mich. (AP) – Police could soon be getting some extra backup – from their cars.
Ford Motor Co. has a new surveillance system for police cars that automatically sounds a chime, locks the doors and puts up the windows if it detects someone approaching the car from behind. The system – which Ford is patenting – is the first of its kind.
Backup cameras and sensors usually only work when a car is in reverse. The new system, dubbed "Surveillance Mode," allows an officer to use them while the car is parked. An image from the backup camera is beamed onto the rearview mirror, so the officer can keep an eye on the rear of the car. If someone comes too close, four sensors on the rear bumper will detect them. The system works during the day and at night, when officers are often the most vulnerable.
Miami faces SEC charges over bonds
MIAMI (AP) – The Securities and Exchange Commission is charging the city of Miami and its former budget director with securities fraud, according to a civil complaint filed Friday in federal court.
George S. Canellos, co-director of the SEC's Division of Enforcement, said in a news release that the city of Miami actively marketed bonds to investors while hiding the true reason for moving around about $37.5 million in city funds.
An SEC investigation found that the city of Miami and former budget director Michael Boudreaux made materially false and misleading statements and omissions about certain transfers in three 2009 bond offerings totaling $153.5 million. Similar misleading information was reportedly included in the city's fiscal year 2007 and 2008 Comprehensive Annual Financial Reports. Those reports are distributed to broad segments of the investing public, including investors in previously issued city debt.
DOE study: Fracking chemicals didn't taint water
PITTSBURGH (AP) – A landmark federal study on hydraulic fracturing, or fracking, shows no evidence that chemicals from the natural gas drilling process moved up to contaminate drinking water aquifers at a western Pennsylvania drilling site, the Department of Energy told The Associated Press.
After a year of monitoring, the researchers found that the chemical-laced fluids used to free gas trapped deep below the surface stayed thousands of feet below the shallower areas that supply drinking water, geologist Richard Hammack said.
Although the results are preliminary – the study is still ongoing – they are the first independent look at whether the potentially toxic chemicals pose a threat to people during normal drilling operations. But DOE researchers view the study as just one part of ongoing efforts to examine the impacts of a recent boom in oil and gas exploration, not a final answer about the risks.
TSA expands faster screening to more travelers
WASHINGTON (AP) – The government is expanding the ways airline passengers can enroll in an expedited screening program that allows travelers to leave on their shoes, light outerwear and belts and keep laptop computers in cases at security checkpoints.
Under the Transportation Security Administration's Precheck program, only travelers who were members of the frequent flyer programs of some air carriers were eligible for expedited screening. On Friday TSA Administrator John Pistole said beginning later this year U.S. citizens will be able to enroll online or visit an enrollment site to provide identification, fingerprints and an $85 enrollment fee.
About 12 million people are currently enrolled in the program. Pistole said he expects another 3 million to enroll before the end of the year.
Venture investments drop in 2Q, report finds
NEW YORK (AP) – A new report says funding for U.S. startups declined in the April-June period from a year ago, as venture capitalists funneled less money into fewer deals.
Total investments in startups fell 9 percent to $6.67 billion from $7.34 billion a year ago. There were 913 deals completed in the second quarter, down 6 percent from last year's 970.
Funding for biotechnology companies and consumer products and services startups increased. The biggest category, software, saw a decline in the dollar amount invested as well as the number of deals completed.
Drugmaker Vivus settles with biggest shareholder
NEW YORK (AP) – Obesity drugmaker Vivus has agreed to a settlement with its biggest shareholder, which has been fighting for greater control of the company. A long-time drug executive backed by the shareholder will become CEO and the board will be reconfigured.
First Manhattan Co. – which owns 9.9 percent of Vivus' outstanding stock – was waging a proxy fight with Vivus Inc. and said it was in position to win when Vivus adjourned voting on a slate of new directors.
The shareholder sued Vivus earlier this week, as it tried to stop the drugmaker and its representatives from soliciting proxies or votes for the company's annual shareholder meeting. The investment firm also wanted the court to certify disputed results of the election of Vivus' directors, and to stop the Mountain View, Calif., company's current directors from taking any further action on behalf of Vivus.
China ends controls on bank lending rates
BEIJING (AP) – China said Friday that it is ending controls on bank lending rates in a move toward creating a market-oriented financial system to support economic growth.
Reform advocates see an overhaul of China's interest rate policy as one of the most important changes required to keep its growth strong. Banks currently lend mostly to state industries rather than the entrepreneurs who create China's new jobs and wealth. Allowing banks to negotiate their own rates with borrowers could channel more credit to private enterprise.
The scrapping of controls on lending rates is the first major economic reform under the government of President Xi Jinping, who took office earlier this year and is dealing with a slowdown in China's torrid growth. Xi and other leaders have promised an array of changes but until Friday no details had been released.
By The Associated Press(equals)
The Dow Jones industrial average closed down 4.80 points, or 0.03 percent, to 15,543.74. The Standard & Poor's 500 index rose 2.72 points, or 0.2 percent, pushing the index to an all-time of 1,692.09. The Nasdaq composite fell 23.66 points, or 0.7 percent, to 3,587.61.
Benchmark crude for August delivery rose 1 cent to close at $108.05 a barrel on the New York Mercantile Exchange. Oil gained $2.10 a barrel this week. Brent crude, the benchmark for many international types of oil, was down 63 cents to finish at $108.07 a barrel on the ICE Futures exchange.
Wholesale gasoline added 1 cent to end at $3.12 a gallon. Heating oil fell 1 cent to finish at $3.09 a gallon. Natural gas fell 2 cents to end at $3.79 per 1,000 cubic feet.