Finance Matters

Archive for March 9th, 2010

The California Highway Patrol released the 911 call for the latest Toyota to allegedly zoom out of control.  Still sounds fishy to us.  If pressing hard on the brakes and turning off the engine worked, why did it take 23 minutes and a cop with a bullhorn to figure that out?

By ELLIOT SPAGAT, Associated Press Writer

EL CAJON, Calif. (AP) — The driver of a Toyota Prius that sped out of control on a San Diego County freeway sounded panicked at times as he told a dispatcher about a stuck accelerator.

A 23-minute 911 call the California Highway Patrol released Tuesday details James Sikes’ attempts to slow his car down as it reached speeds over 90 mph.

Sikes often didn’t respond to the dispatcher’s instructions during the call recorded Monday. The call included repeated pleas for Sikes to throw the car into neutral and turn off the ignition. Sikes tells the dispatcher, “My brakes are smelling. … My brakes are burning.”

Sikes told authorities that the accelerator malfunctioned as he drove on Interstate 8. The car reached 94 mph before a CHP officer helped get the Prius driver to slow down and turn off the engine.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

EL CAJON, Calif. (AP) — A Toyota Prius that sped out of control on a California freeway was towed to a dealership Tuesday while federal and company inspectors converged on the car to determine whether a stuck gas pedal was to blame.

The National Highway Traffic Safety Administration sent two investigators to examine the car after Monday’s incident, said Olivia Alair, a spokeswoman for the Department of Transportation, which oversees NHTSA. Toyota Motor Corp. spokesman Brian Lyons said the automaker is sending three of its own technicians to investigate.

James Sikes, 61, of Jacumba, told authorities that the accelerator malfunctioned Monday as he drove his Prius on Interstate 8 in San Diego County. The car reached 94 mph during the 20 minutes before a California Highway Patrol officer helped get the Prius driver to slow down and turn off the engine.

The CHP held the car overnight but it was towed to the dealership Tuesday, CHP Officer Brian Pennings said.

“There’s no collision, so our investigation’s done,” Pennings said. “There’s no crime. … We’re just glad it ended safely.”

The incident comes while Toyota is fighting fears over the safety of its vehicles, which had been revered for their safety and reliability.

It was about 12 miles from where Sikes’ Prius started speeding where a deadly crash last year sparked scrutiny into the Japanese company’s vehicles.

CHP Officer Mark Saylor, his wife, her brother and the couple’s daughter died after their Lexus’ accelerator became trapped by a wrong-size floor mat on a freeway in La Mesa. The loaner car hit a sport utility vehicle and burst into flames.

Since then, Toyota has recalled some 8.5 million vehicles worldwide — more than 6 million in the United States — because of acceleration problems in multiple models and braking issues in the Prius. Regulators have linked 52 deaths to crashes allegedly caused by accelerator problems.

On Monday, Toyota assembled a group of experts at its North American headquarters in Torrance, Calif., to refute studies by an Illinois professor who revved Toyota engines simply by short-circuiting the wiring. Toyota’s experts say the experiments were done under conditions that would never happen on the road.

The company has blamed the issue on mechanical problems and floor mats that can wedge the gas pedal.

“It wasn’t the floor mat. The floor mat we have has hooks on it,” Sikes’ wife, Patty, said in a telephone interview Tuesday.

Patty Sikes said the family’s 2008 Prius appeared to have an accelerator malfunction a few weeks ago but it was brief.

“It took off for a second, and then it just stopped. It was like a little hiccup or something,” she said.

The family got a recall notice and took it to Toyota of El Cajon about two weeks ago but the dealership refused to examine the car, Patty Sikes said.

“They said it must be a mistake because we weren’t on the (recall) list,” she said.

The dealership declined to comment and referred requests for comment to Toyota’s corporate representatives.

Toyota spokesman John Hanson confirmed that the 2008 Prius is part of Toyota’s recall to address unintended acceleration due to floor mat entrapment. The recall, affecting 5.6 million vehicles, was first announced in October.

Hanson said a recall of this magnitude takes time, and Toyota first sends a preliminary notice to owners saying their vehicles are subject to a recall. A second notice comes later detailing how and where the vehicle can be fixed.

“I believe what could have happened is Mr. Sikes could have received his preliminary notification which says, ‘Hello, your car is going to be recalled, and we will notify you when to bring it in.’”

At a news conference Monday, Sikes said he called 911 about 1:30 p.m. Monday after accelerating to pass another car on Interstate 8 near La Posta.

“I pushed the gas pedal to pass a car and it did something kind of funny. … It jumped and it just stuck there,” he said.

A patrol car pulled alongside the Prius and the officer told Sikes over a loudspeaker to push the brake pedal to the floor and apply the emergency brake.

The braking, coupled with a steep rise on the freeway, slowed the car to about 50 mph. Sikes then shut off the engine and the car coasted to a stop. CHP Officer Todd Neibert then moved his vehicle in front of the Prius to block it as a precaution.

Neibert is a 14-year veteran but he had no special training in halting runaway cars, Pennings said.

“Officers are trained to adapt and overcome. You can’t train for every type of situation,” he said. “Fortunately, the first thing he tried worked.”

___

Associated Press writers Stephen Manning in Washington, D.C., and Greg Risling in Los Angeles, and AP Auto Writer Dan Strumpf in New York contributed to this report.

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See Also:

• Toyotas Gone Wild: Cops Forced To Intervene To Slow Down Runaway Prius

Click this link for the most surprising thing you’ll read on the internet all day.

It’s Fox Businesses’ Elizabeth MacDonald delivering a stunning, and thorough, point-by-point fisking of Gretchen Morgenson on the subject tof credit default swaps.

It’s strictly NC-17, so make sure there are no kids in the room before reading.

(via @felixsalmon)

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See Also:

• Here’s How Blogs Are Making The Financial Press Worse
• Gretchen Morgenson Officially Blows Her Credibility On Derivatives With Ridiculous Confusion About Swaps

Jon Meacham, the Pulitzer Prize-winning editor of Newsweek, is expected to become a new co-anchor on PBS.

According to the New York Times’ Media Decoder, Meacham will join PBS’ “Need to Know,” a Friday night series focused on public affairs. Former MSNBC anchor Alison Stewart will be his co-host.

Meacham will remain at the magazine while he starts his new gig, a Newsweek spokesman told Media Decoder.

Newsweek could use the extra branding spotlight: In the second half of 2009, the magazine lost more than 40% of its newsstand sales, compared to a 9% loss for the industry as a whole.

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See Also:

• CHART OF THE DAY: Nobody Wants To Buy Magazines Anymore
• The Epic Decline Of Magazine Advertising Through The Decade
• Newsweek Shuttering London Office

Another month, another weak search performance from Yahoo.

The latest data from comScore on the US search market came out today.

It shows Bing had 11.5% of the search market in February, up from 11.3% in January.

Yahoo’s search slipped to 16.8% in February from 17.0% in January.

Google search share managed modest growth going to 65.5% in February from 65.4% the month prior.

Here’s the data from JP Morgan’s Imran Khan:

• According to the data, total US core search volume increased 10.4% Y/Y in February, below the 12.4% growth in January. The total growth in the first two months of 1Q decelerated to 11.4% Y/Y from 4Q’s 15.8% Y/Y growth.
• Google domestic core search market share was 65.5% in February, up slightly from 65.4% in January. Google grew February core search volume by 14.3% Y/Y, behind 16.7% growth in January. Google domestic core search volume growth of 15.5% Y/Y in the first 2 months of 1Q is below 4Q’s 19.9% Y/Y increase.
• Yahoo! domestic core search market share dropped to 16.8% in February from 17.0% in January. Yahoo! February core search volume was down 9.8% Y/Y vs. an 8.9% Y/Y decline in January. Yahoo!’s first 2 months of 1Q domestic core search volume’s decline of 9.3% Y/Y underperforms 4Q’s 0.5% Y/Y decline.
• Microsoft sites domestic core search market share increased to 11.5% in February from 11.3% in January. Microsoft sites grew February core search volume by 55.4% Y/Y, up from 49.6% Y/Y growth in January. Microsoft sites’ domestic core search volume was up 52.4% Y/Y in the first two months of 1Q, ahead of 41.9% Y/Y growth in 4Q.
• Ask Network domestic core search market share dropped slightly, to 3.7% in February from 3.8% in January. Ask grew February core search volume by 0.7% Y/Y, down from 15.5% Y/Y growth in January. Ask Network domestic core search volume was up by 7.8% Y/Y in the first two months of 1Q vs. 8.8% Y/Y growth in 4Q.
• AOL February domestic core search market share stayed flat at 2.5% in February. AOL February core search volume declined by 29.3% Y/Y vs. a 27.8% Y/Y decline in January. AOL domestic core search volume was down 28.5%

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See Also:

• Bing And Google Gain Search Share Again In December, Yahoo Implodes
• CHART OF THE DAY: Yahoo’s Search Business Is Toast
• January Search Results In! Bing Keeps Gaining Share, Everyone Else Loses

(This post appeared at Infectious Greed.)

From Michael Cembalest at JPMorgan, the case for commercial real estate: 

THE STOCK ARGUMENT FOR COMMERCIAL REAL ESTATE

One CEO panelist whose company runs 20 mm sq ft of retail also owns 30 mm sq ft of office space.  He’s optimistic: he notes the smaller oversupply problem compared to prior recessions, and faster speed of price adjustments.  For the most part, I agree.  The first two charts below show that compared to two prior cycles, less commercial property was added, and that the pipeline as a % of the existing stock is low (exception: Madrid).  The third chart shows the rapid speed of price declines this time around, compared to the 1991 real estate recession.  So both arguments are supported empirically. 

Some context, however: in the U.S., over-supply conditions of the early 1990s were a by-product of changing tax rules.  The 1981 Economic and Tax Recovery Act allowed the use of accelerated depreciation on commercial property, and the offset of active income with passive losses.  This created a building glut, then rendered useless when the 1986 Tax Reform Act scaled back these tax advantages.  As a result, we wouldn’t expect the same degree of over-supply today.  But still, the combination of price declines already in place, a slow but gradual economic recovery and a smaller supply overhang argue for some property exposure in portfolios.  Another positive: for better or worse, the vast majority of maturing commercial real estate loans were rolled in 2009, whether owed to banks, insurance companies, or CMBS trusts, and often without new equity contributed.

 

Read more economic commentary at Infectious Greed >

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See Also:

• Volcker: No Way The US Economy Can Stand On Its Own Without Stimulus
• Why There’s No Way The Government Can Tighten And Risk The Double Dip
• 10 Banks With The Most Exposure To The CRE Time Bomb