Wachovia says housing downturn nowhere near over

(Reuters) - Wachovia Corp (WB.N: Quote, Profile, Research), which offers adjustable-rate mortgages that let borrowers decide how much to pay each month, believes the U.S. housing downturn is far from over, Chief Risk Officer Don Truslow said.

"It feels like we have a ways to go," Truslow said on a Deutsche Bank Securities Inc conference call. Referring to the nine innings of a baseball game, Truslow said he was "unsure" whether the downturn was in the third, fourth or fifth inning, but "we haven't reached the seventh-inning stretch."

Charlotte, North Carolina-based Wachovia, the fourth-largest U.S. bank, on February 28 said it expected first-half loan losses to exceed 0.75 percent of loans on an annualized basis in 2008, higher than it had forecast two weeks earlier.

 

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Liberty CEO says he was point man in IAC talks

(Reuters) - Liberty Media Chief Executive Greg Maffei said on Wednesday that he was the point man in talks with IAC/InterActiveCorp over disengaging the two companies despite a long-standing relationship between Liberty Chairman John Malone and IAC CEO Barry Diller.

"John Malone considered Barry Diller a friend" after a business partnership of nearly 12 years, Maffei told a Delaware court, where IAC and controlling shareholder Liberty are battling over a proposal to spin off four of IAC's businesses.

"While (Malone) was not entirely happy and increasingly unhappy with the performance at IAC ... because of the friendship, I don't think (he) was willing to tackle some of the issues," Maffei said. "I have been in effect the point person. I don't believe it's a personal matter."

Liberty's board put him in that role despite concerns of a potential conflict between Maffei and Diller. The two had clashed over IAC's purchase of online travel site Expedia several years before.

IAC and Liberty sued each other in January after Diller proposed a spinoff plan that would dilute Liberty's majority voting control over the businesses as separate entities.

The plan followed more than a year of inconclusive talks on a possible swap that would give IAC's HSN shopping network to Liberty in return for Liberty's stake in IAC.

Diller, a former television and film executive, built IAC with Malone's backing over more than a decade. While Liberty owns about 30 percent of IAC shares, it holds 62 percent voting control through a second class of super-voting stock.

 

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Societe Generale Says Another Employee Held by Police

(Bloomberg) -- Societe Generale SA, the French bank stung by a record trading loss of 4.9 billion euros ($7.6 billion), said a second employee has been taken into police custody as part of the investigation into unauthorized trades.

The headquarters of France's second-biggest bank in La Defense, just outside Paris, were searched by police today, who took some documents, Societe Generale spokeswoman Laura Schalk said in an interview.

The latest development deepens a probe that began after the bank said in January that 31-year-old trader Jerome Kerviel amassed 50 billion euros in trades backed by fake hedges and false documents. Unwinding his bets resulted in the biggest trading loss in banking history and forced Societe Generale to replenish depleted capital.

``It's normal for the investigation to widen, and we will see where this brings us, given that many people said Kerviel could not have acted alone,'' said Arnaud Scarpaci, who helps manage about $235 million at Agilis Gestion SA in Paris. ``At an image level, it's not the best for the company.''

Societe Generale failed to follow up on 75 warnings on bets by Kerviel, independent board members concluded in a report last month. While the board has twice turned down Chairman Daniel Bouton's offer to resign, the document highlighted the shortcomings of Societe Generale's management supervision that allowed Kerviel to forge documents and emails undetected for more than two years.

Unidentified Broker

The Societe Generale employee taken into custody today is the second broker to be questioned in the Kerviel case. Moussa Bakir, a 32-year-old broker at Newedge, was questioned and released last month. Kerviel passed trades through Societe Generale's Fimat unit, which merged in January with Credit Agricole SA's futures brokerage to form Newedge.

The police are questioning the second broker, Isabelle Montagne, a spokeswoman for Paris prosecutors, said today in a telephone interview. She declined to name the broker. She said the broker was taken into custody mid-morning and would be held for 24 hours. The detention could be extended to up to 48 hours.

Kerviel, who admitted to exceeding his trading limits and faking documents to show his bets were covered by hedges, has been interrogated six times since he was incarcerated on Feb. 8. He has been charged with hacking into the bank's computers, falsifying documents and breach of trust.

The latest development comes just two days before a hearing at the Paris appeals court to consider his release.

 

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U.S. Stocks Rise, Led by Industrials, on Caterpillar Forecast

(Bloomberg) -- U.S. stocks gained for a second day, extending the market's biggest rally in five years, after forecasts from Caterpillar Inc. and Bear Stearns Cos. spurred speculation that profits will rebound this year.

Caterpillar, the largest maker of bulldozers, rose the most in three months after saying emerging markets will boost sales. Bear Stearns, the second-biggest underwriter of U.S. mortgage bonds, climbed after Chief Executive Officer Alan Schwartz told CNBC the firm has enough money to weather market fluctuations.

The Standard & Poor's 500 Index increased 2.26 points, or 0.2 percent, to 1,322.91 at 10:44 a.m. in New York. The Dow Jones Industrial Average climbed 49.99, or 0.4 percent, to 12,206.8. The Nasdaq Composite Index added 9.1, or 0.4 percent, to 2,264.86. Four stocks gained for every three that fell on the New York Stock Exchange. Shares in Europe and Asia gained.

Industrial shares contributed the most to the rally after Caterpillar said machinery orders in emerging markets and efforts to improve public works in North America and Europe will boost sales.

 

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