What's Important in the Financial World (10/5/2012)
American Airlines Problems
American Airlines, the operating business of bankrupt AMR, cannot seem to solve the problems of how the seats are fastened to the floors of its planes. Coming just after a pilot work slowdown that caused many flights to be cancelled, American had first two planes, and then more, in which rows of seats with loose bolts caused risks to passengers. And the problem has gotten worse as more seat flaws have triggered more flight cancellations. According to BBC News reports:
American Airlines has cancelled 94 flights as it works to fix passenger seats that could come loose.
The problems grow every day; so does concern that it is not over.
Facebook IPO Suits
Facebook Inc. (NASDAQ: FB) will not have to face scores of suits over flaws with its initial public offering. A court has ruled that all of these cases should be put together, which should help the social network make a single defense and save on legal fees. Facebook's shares have traded consistently below their $38 IPO prices. Wild and uncontrolled trading the first day the stock was available caused some investors considerable losses. And there is an open question about whether the company mislead investors about its prospects. According to The Droid Guy:
Facebook's wishes to defend itself against one consolidated case has been granted. The social networking behemoth will now face a legal battle in Manhattan, New York against dozens of lawsuits over its failed initial public offering.
There are estimated 50 lawsuits filed against the social network, Nasdaq exchange, and Facebook's underwriters. A panel of federal judges have decided that all of these cases will be collected throughout the United States as one and transferred to a district court in Manhattan headed by Judge Robert Sweet.
IMF: A Lost Decade
The chief economist of the International Monetary Fund said that the current world financial crisis and recession could last for another decade. This echos concerns by other experts that slow job growth, huge national debts and massive entitlement obligations have no ready solutions. According to Reuters, the IMF's Chief Economist Olivier Blanchard said, speaking of the period which began in 2008:
"It's not yet a lost decade… But it will surely take at least a decade from the beginning of the crisis for the world economy to get back to decent shape.
"Japan is facing a very difficult fiscal adjustment too, one which will take decades to solve. China has probably taken care of its asset boom but has slower growth than before, but we do not forecast any really hard landing."
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Market Open Tagged: FB