Good news in the place of renters as landlords are forced to offer discounts to protect their properties occupied

By Prashant Gopal

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The economic crisis has opened up opportunities for hall tenants. The inventory of vacant apartments is expanding, and rents are dropping quickly in greater metros across the country.

For renters with leases hither and thither to emit from the lungs, it’s time to negotiate. Landlords are working extraordinary hard these days to keep units filled.

Of course, your ability to hold on to an apartment—especially a luxury unit—depends on how secure you feel near to your own do job-work. Americans destroyed about 2.6 million jobs in 2008 (chiefly in the final quarter of the year) and are likely to lose millions more this year. They are losing money without interruption funds and other investments and are cutting remote on costs by dint of. downsizing and moving in through family members or roommates as they hunker down for a deep recession.

Landlords, as a result, are forced to offer discounts to fill vacancies. Apartment vacancies spiked in September after the collapse of Lehman Brothers and the eruption of the financial crisis.

Go as being a Long Lease

"If you’ve got do job-work, it’s a great time to be a renter and to sign the longest lease possible," said Ron Johnsey, president of Axiometrics.com, a Dallas apartment data company.

BusinessWeek.com worked with Axiometrics to come up with a list of 25 large metros where break declines accelerated utmost at the expiration of 2008. In Salt Lake City, where the economy had been holding up better than most cities, effectual rents (including landlord concessions) fell 2.3% in the fourth quarter compared with the anterior quarter. By comparison, rents were climbing 3.3% in the fourth quarter of 2007.

The New York metro territory, including New York City and its New York and north New Jersey suburbs, saw a 3.7% drop-off in effective rents in the fourth quarter (compared with a 0.5% increase in the fourth quarter of 2007), according to Axiometrics, what one. surveys landlords across the nation one time a month.

The situation has changed dramatically in the expensive Manhattan market, where tenants are suddenly in control. The layoffs on Wall Street desire forced landlords to cut rents; offer one, sum of two units, or even three months’ free rent; and pay the go-between fee that the tenant would otherwise pay (often 12% of the annual rent).

Luxury High-Rises Hard Hit

Vacancies are rebellion chiefly in the high-end doorman buildings, particularly in the Financial District, said Daniel Baum, chief operating officer for the Real Estate Group NY, a residential sales and rental brokerage hard. But rents are falling all across Manhattan, in all price categories, he said. Some landlords have dropped rents as a great deal of as 20% to lure tenants, he said.

"The luxury high-rise market, especially novel construction, is the one taking the worst hit," Baum said. "There’s a building offering three months’ free rent in the Financial District."

Victor Calanog, chief economist for apartment research fixed Reis (REIS) said landlords nationwide are more motivated to cut rents than they were after the previous recession at the outset of this decade. Landlords at once are under pressure to keep tenants because vacancies are higher than they were in 2000 and so are the debt payments they need to protect. Too many vacancies, and some landlords are likely to stand over against foreclosure, he said.

"I’ve never seen this friendly of increase of velocity. see preceding verb in incline," Calanog said. "It’session somewhat sobering."

Click here to see the U.S. metro areas with the biggest rent drops.

Sure, home loan rates are lower than they’ve been in 30 years. But now you need to navigate a maze of credit standards and conditions

By Christopher Palmeri

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Washington is doing all it can to get money flowing again in the housing sector. At around 5%, 30-year mortgage rates are at levels that haven’t been seen in, healthy, 30 years.

If you craving to buy a home or refinance your existing loan, money is in that place. But would-be borrowers semblance new challenges they didn’confidentially have during the housing boom. These hold much tighter credit standards, fewer types of loans, and sinking wealth values that erase hearthstone equity. To figure out how to surmount some of these obstacles, we asked mortgage bankers and other real estate professionals for their tips on how to get a loan approved.

Here’s what they said:

1. Go to the Government

Bank of America (BAC) does it. General Motors (GM) does it. Even AIG (AIG) does it. For home buyers, the biggest origin of new loans has been government programs such as those form by the Federal Housing Administration (FHA) and the Veterans Administration (VA). You have power to get like loans from almost any lender. Government-run programs will accept borrowers with lower credit scores and allow them to force as little probably 3.5% of the purchase price down. There are local loan limits that beat out high-end hearthstone purchases, however. And borrowers will pay slenderly more than with accustomed lenders, exactly to mortgage insurance requirements.

2. Get Your Paperwork Ready

No-documentation, low-documentation, stated-income, and "liar" loans are now—thankfully—relics of financial record. Gather aggregate that documentation you hate to share. You’ll need to bring bank statements, brokerage statements, W-2 forms, and tax returns. Then, contact a lender to get prequalified for a new family circle purchase. That will heal in your inn hunting because you’ll be assured of how much you can afford and you’ll look better to sellers who’ll know you have the financial firepower to close.

3. Get Out of That Adjustable-Rate Loan

With rates lower, it’s an excellent time to ditch those hybrid, optional-payment, adjustable-rate loans that will well-suited have you paying a lot more down the road at the time interest rates rise, whether or not they haven’face to face achieved that already. "If you’re looking long-term, rates are so ridiculously moderate, I would do everything in your power to get refinanced," says David Reed, a pledge banker in Austin, Tex., and author of An Insider’s Guide to Refinancing Your Mortgage. "Get into a fixed-rate loan and get that [adjustable] equation out of your head-piece."

4. Consider Paying Up Front to Lower Rates

With home prices sliding, having plenty justice to qualify in favor of the lowest rates can be an passage out. David Kittle, a mortgage banker in Louisville, and chairman of the Mortgage Bankers Assn., says single in kind of his customers not long ago missed qualifying for the lowest rate because an existing $7,000 home-equity lend knocked her from having 30% equity in her home to having 25% justice. By remunerative a $900 fee up front—0.25 points, in industry jargon—she was able to breed the loan that dropped her rate from 6.5% to 5%.

5. Boost Your Credit Score

Credit scores matter more than ever, says Jason Bloom of Elliot Bay Mortgage in Bellevue, Wash. A few points weren’t a big copy during the boom. Now they can make a significant difference in your payments. Bloom says some steps you can take to improve your score are as single-minded as making positive you don’cheek by jowl get more than one-third of your maximum borrowing amplitude outstanding on one credit card. Rather than cancel that old Macy’s (M) or Chevron (CVX) enter upon the credit side card you’ve left lying around, use them to make a few purchases. "I consider that like rotating your tires," Bloom says.

6. Keep Making Those Payments

There’s a control of thought that if you absence to get your present lender to look sullen your payment—what bankers call a loan modification—the best way to procure their court is to lay each embargo on making payments. Don’t bestow it, says Valerie Saunders, a mortgage banker in Clearwater Beach, Fla. Missing a payment by more than 30 days be possible to have a huge impact on your credit score. You are a great deal of better off at least grievous to refinance or negotiate a diminish rate without being delinquent. "Your credit is something you control," Saunders says. "A loan modification is something you can’privately."

7. Use the Web

Scott Happ, who runs the MortgageMarvel.com search site, figures there are at this time 1,000 lenders, from the Hudson Valley Federal Credit Union to Citigroup (C), that will accord. you rate and fee quotes online. Even so, Happ says, still try your local banks or, if you’re refinancing, your present lender. "They’re likely to know you best," Happ says.

8. Don’t Get Too Excited

Even with the recent dip in rates, if you’re thinking of refinancing you may find it easier just to keep your present loan. If your home fell in value, you may not have enough equity to qualify for the cheapest rates. If you’ve got an interest-only lend from a couple of years ago, notes Jeffrey Gundlach, chief investment officer of the TCW fund family, refinancing into a fully amortizing lend will likely enlarge your monthly payments.

Some are snapping up electronics from the defunct retailer, but others, unimpressed by the discounts, are playing the waiting adventure

By John Tozzi

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Emmanuel Dunand/AFP/Getty Images

Daniel Romero eyed a wall of flat-screen TVs on the second floor of Circuit City’s 26,000-square-foot store on Fifth Avenue in midtown Manhattan during his lunch break Jan. 22. Drawn by the bankrupt chain’s liquidation vent, the 28-year-old print manager at Macy’sitting (M) had already piked up a new controller for his Xbox 360 at a 30% markdown that epoch, and he was considering getting an extra Wii game controller as well.

The store was busy but not packed, and like greatest part shoppers there, Romero wasn’face to face about to buy a 46-inch Sony Bravia TV because a 10% discount cut the price from $1,699 to $1,529. "As farther as all this high-end stuff," he uttered, "you be possible to still probably find better online."

The liquidators who bought those TVs and the rest of Circuit City’s inventory, estimated at a $1.8 billion retail value, are gambling that Romero and other shoppers will tend hitherward around. After failing to find a buyer to take Circuit City out of bankruptcy, the 60-year-old Richmond (Va.) electronics giant announced Jan. 16 it would be concluded its 567 remaining U.S. supplies, lay off its 34,000 employees, and sell off its assets to pay outer part creditors.

The next morning the four payment firms that won the bid to sell Circuit City’s inventory started going-out-of-business sales, advertising 10% to 30% discounts in what they say is the largest electronics liquidation ever.

Busy Liquidators

These are busy days for the discharge industry, which consists of about a half-dozen big firms and scattered smaller players, as companies that in other epochs might have reorganized in bankruptcy are being enforced by the ailing economy to adjust. "It is the most active time that I’ve seen in this business," says Jim Schaye, president and CEO of Boston-based Hudson Capital Partners, one of the four liquidation firms handling the Circuit City sales.

Following a unlucky f shopping season in which many retailers seemed eager to almost give goods away in last-minute sales, the prices at Circuit City are evoking some disappointment, to judge by means of comments instructed on Web sites frequented by bargain hunters. "Discounts are ungifted," wrote some placard on insidesocal.com.

But, say liquidators, the discounts are about test because this type of sale.

Hudson, in a joint venture with Great American Group, SB Capital Group, and Tiger Capital Group, successfully bid on Circuit City’session inventory. They will pay 70.5% of the estimated $1.2 billion wholesale value for the wares. Liquidators assume the jeopardy that the goods they buy may not sell in the time or at the recompense they look for. They also take over the cost of running the stores during the sale, including payroll, rent, and advertising. In barter, they’re acquiring goods that would fetch $1.8 billion at full retail price for about moiety that amount.

Discount Dynamics

Both the sale price and operating costs affect the kind of discounts consumers can expect to see on store shelves. Shoppers accustomed to seeing 30% to 40% discounts on final season’s clothes shouldn’t expect the sort kind of fire sale for lower-margin gadgets. And at the same time that some of the prices aren’t cut as deeply as more shoppers might hope, Schaye declared liquidation sales trim the compensation of items that normally don’face to face go on market, of the like kind as the sport accessories Romero picked up, or leftover iPods, what one. are rarely discounted. "How often do you see iPods at 10% off?" Schaye asks.

Indeed, at the Fifth Avenue Circuit City, bright red signs with yellow type advertised "Entire Store On Sale!" and "Nothing Held Back!" The signs promoted discounts of 10% to 30% off, although big-ticket items were nearly all 10%. Still, some shoppers weren’t convinced. Ed Shelly, a learner from Manhattan, dropped by the store in search into of an HP (HPQ) wireless printer, for checking the Best Buy (BBY) store next door, which didn’t have it in standing. Circuit City had the printer on sale for $117, 10% off the regular $130 price. Shelly held opposite to to see whether the price goes down in the nearest man and wife of weeks. He uttered he’d buy it when it reaches $100 or less.

That psychology, emblematic of going-out-of-business sales, is heightened by the recession that has consumers paring back. Liquidators acknowledge that they’ll freshen the deals as the opportunity to sell goes on, but they also forewarn that items in demand will move before then. "You certainly, after the nearest week and a half, won’privately be able to go in and buy every iPod," says Sandy Feldman, senior vice-president at Great American Group.

Still, liquidators worry they may have paid too much during the term of inventory that newly growing well shoppers may not pervert with money. "We have to be very careful," Schaye says. "We can lose money very easily."

With no recovery in exhibition, CEO Ballmer is cutting costs. But without long-promised innovation, the giant will struggle to outperform the world economy

By Peter Burrows

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Two days after President Barack Obama, in his inaugural tongue, told the country to brace itself for tough times, the head of one of the most valuable U.S. companies echoed the striking remark. "We’re certainly in the midst of a once-in-a-lifetime set of economic conditions," Microsoft (MSFT) Chief Executive Steve Ballmer told analysts during a conversation call discussing fiscal second-quarter results. "The economy is resetting to a lower level."

In other words, we’ve entered a new paradigm. The mortgage-market collapse, pecuniary emporium huddle, and restricted lending have taken a self-conceited toll on demand in the place of computers and other products that run Microsoft’s software, and it’s time to settle in for a long sink. There’s no recovery on the horizon, Ballmer warned. The economy could remain in the doldrums for "a year, two years—I don’t know what it will be—and then alarm to build back," Ballmer reported.

As by other tech bellwethers including Intel (INTC), the "resetting" is hitting Microsoft hard. Second-quarter sales rose a mere 2%, to $16.63 billion, compared with analysts’ already-lowered average forecast of $17 billion, according to the proceeds report, that was released Jan. 22. Net income fell 11%, to $4.17 billion. And Microsoft said it lacked enough clarity to provide a forecast for the next two quarters. Microsoft’session stock tumbled 11.7%, to 17.11, helping fuel a 1.94% decline in the New York Stock Exchange.

So what’sitting a behemoth of a company like Microsoft to do in the midst of so great a downturn? Organic growth is hard to come by for the former of software running more personal computers than in that place are cars in operation. And the company’s biggest make trial to enlarge through acquisition, a proposed takeover of Yahoo! (YHOO) in 2008, foundered.

Slimming Down

Instead, Microsoft is slimming down more than ever. "We’re significantly putting the brakes on," Ballmer reported. In its first-ever broad-based layoff, the company is eliminating about 5,000 jobs, or 5.5% of its 91,000-person workforce. The net reduction will be less than 3,000 because Microsoft will keep hiring in key areas. But the move "shows they are serious about taking at least some initial steps to get their business model more aligned" through the economic conditions, says Technology Business Research algebraist Alan Krans. Microsoft also plans to cut travel expenses by dint of. 20% and eliminate merit bonuses taken in the character of antidote to the year that begins in August.

Diminished demand with a view to PCs is seizure the biggest toll steady Microsoft’s flagship Windows business, where sales fell 8% to $3.98 billion—far off the meeting of friends’s forecast for 10% to 12% growth three months ago. Executives aforesaid sales fell across the board, but especially in price-sensitive emerging markets and in the midst of corporate buyers. Many of the PCs that were sold were low-priced netbooks that tend to go for less than $300. For the version of Windows in those machines, Microsoft gets less than half as much as it does for the rendition in a full-blown PC.

Falling PC sales also hurt sales of the assemblage’s Office suite of productivity applications, which includes e-mail and spreadsheet nomination tools. That’sitting partly on this account that most netbooks do not be under the necessity the renown to press it, and inasmuch at the same time that people who use these stripped-down devices do much of their computing on the Web.

The search giant’s better-than-expected results encouraged analysts, but investors still see tough times ahead in online advertising

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Eric Schmidt, Google chairman and CEO Chip Somodevilla/Getty Images

By Robert D. Hof

Even as the economy skids, Google (GOOG) keeps on rolling—just a contemptible more slowly than it used to. Bucking the stalling arrangement and worsening outlook for online advertising, the search advertising titan on Jan. 22 reported better-than-expected fourth-quarter results. The numbers suggest Google will keep grabbing more of the online ad mart from traditional media and from struggling online rivals of the like kind as Yahoo! (YHOO) and Microsoft (MSFT).

Shares of Google, which sanguinary 56% last year, slipped almost 3% in extended commercial after an initial 4% gain. Enthusiasm for the body’s fourth-quarter results was muted by dint of. questions about whether Google can solemnize posting solid gains as advertisers rein in spending. Investors also appeared to balk at an employee reposit option exchange that will cost Google $460 million. Before the closing bell, the standard had climbed 1% to 306.50.

Google, which gets paid either hour of travail someone clicks on subject ads placed on search results pages, had earnings of $5.10 a share, excluding some one-time expenses and stock election costs. That was up from $4.92 a year earlier. Net income, in whatever degree, fell 68% to $382 million, expressions of gratitude principally to those charges, which include $1.1 billion in noncash charges to reflect the declining hold in high esteem of Google’session stakes in Time Warner’s (TWX) AOL unit and the wireless service provider Clearwire (CLWR).

Good Numbers in Bad Times

Sales rose 18%, to $5.7 billion, a considerable slowing of expansion from previous quarters mete still seen at the same time that positive in the moving volume economy. "It was a very good quarter at a time when [Wall] Street was starting to penalize the company for the economy," says Sandeep Aggarwal, an analyst with financial-services firm Collins Stewart. After subtracting commissions paid to partners for sending traffic to Google, sales rose 21%, to $4.22 billion, about $100 million more than analysts expected.

Coming in a quarter when the economy’s troubles deepened considerably, the results encouraged analysts who had been murky their expectations about Google’sitting performance. "The performance was really very impressive," says Jeffrey Lindsay, an analyst with Sanford C. Bernstein. "If they could do this adequately [during a tough quarter], this is pretty much how they’ll perform through 2009."

Google’s results betoken that search advertising, while not immune to the economy, continues to look greater quantity attractive to marketers than other kinds of ads.

Researcher eMarketer estimates spending on search advertising will rise 15%, to $12.3 billion, this year, space of time spending adhering display ads will rise 7%, to $4.9 billion—though frequent analysts conceive display won’t even do that well. Search ads generally catch people which time they’re close to a purchase, and their clicks and purchases can be measured more precisely than with other kinds of ads. "Paid search is every bit as robust as people theorized it potency be," Lindsay says. "It’s the platform advertisers will hang upon the body to [to the time of] the bitter extreme point."

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Olympia — Following the contribute of European nations, Washington state will ban the use of toxic flame retardants in TVs, computers and other household products by 2011.

The imban was triggered after Ecology and the Health Department ruled there were other safe flame retardants, a conclusion endorsed by a committee of fire-safety experts and the state fire marshal.

State officials say alternatives have become make use of to flame retardants called polybrominated diphenyl ethers, or PBDEs. Several other chemical flame retardants meet together Washington’sitting standards for reducing flammability but-end are safer for full of common human feeling health, according to State Fire Marshal Mike Matlick.

Found in the plastics and foam used in electronics and upholstered furniture, PBDEs have been linked to damage in the brain development of laboratory animals, affecting air, learning and memory.

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TACOMA — The family of a man who hanged himself in the Pierce County Jail is suing the county.

In the lawsuit filed highest week in federal royal household in Tacoma, Ralph Close and Laura Larson of Clallam County say the Sheriff’session Office failed to protect their son from himself.

The suit says 30-year-old James Robert Close, of Sequim, had no extra supervision be it so the arresting officer recommended a suicide wait.

The Tacoma News Tribune reports Close had been arrested for investigation of have one’s account robbery.

Officers who booked him into jail wrote on the intake form that he had mental-health problems and had attempted suicide in the gone. A few hours later he was found in his cell hanging from a bed sheet.

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PORTLAND — This city’sitting new mayor ended his recent inauguration speech by rephrasing the famous line of his hero, slain San Francisco assemblyman and gay-rights activist Harvey Milk: “My name is Sam Adams, and I’gallimaufry here to recruit you.”

Adams reveled in the archetype of making history as the first elected, openly cheerful mayor of a major American city.

But less than three weeks later, Adams’ job is in peril as the result of an out of date scandal involving his repeated lies about a sexual kindred in 2005 with every 18-year-old legislative intern. Adams confessed to his imposition. Monday as a local newspaper, the Willamette Week, prepared to publish a rehearsal about the relationship and cover-up.

While most of the nation has been fixated on the inauguration of President Obama, Portland has been plunged into a sandy debate about the ethics of its unaccustomed first fiddle.

In recent days, numerous organizations have called for Adams to resign, ranging from the police union to Just Out, a publication that writes around the tinsel community. The Oregon Attorney General’s business is investigating the scandal.

And Adams himself has conceded that he potency released allowing that he’s no longer effective similar to mayor.

“I am exceedingly confused and humbled and humiliated, and I dare that is appropriate,” Adams said in a news conference Tuesday, after hastily returning to Portland from Washington, D.C., where he had planned to attend the Obama inauguration.

Fall from grace

It is a dizzying fall from grace for a man who seemed a ease fit to lead a incorporated town often hailed as a hub of innovation and one of the nation’sitting coolest places to live. Adams rides a bike to be, posts quirky videos on his Web position, and has been a longtime advocate of expanding light-hearted rail and other initiatives to make Portland greener.

Adams, 45, also focused upon the poor; in part, a reflection of his own difficult upbringing.

Born in Idaho, he moved to Oregon by his family when he was young. There, his mother tried to raise four children after divorcing Adams’ father, a sometimes-commercial fisherman. According to a profile in Just Out, Adams was living alone in a Eugene apartment by age 16. He worked as a bus boy and then a cook at a Mr. Steak restaurant to stay afloat during high school.

During 11 years as an aide to former Portland Mayor Vera Katz and four years as a city commissioner, he gained a reputation as a creative, ambitious workaholic — a affecting contrast to the outgoing Mayor Tom Potter, a retired police chief who seemed to pressure out of steam long before his term ended.

The repaired President has vowed to "reinvigorate antitrust enforcement." But how a great quantity tougher can he get when the recession is forcing widespread consolidation?

By Michael Orey

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With the Jan. 22 appointment of Washington lawyer Christine Varney to head the Justice Dept.’s antitrust division, President Barack Obama has put in place the first of his two top cops to monitor corporate competition. Obama is expected to name someone to professorship the Federal Trade Commission concisely. The appointments come amid a hold an argument hind part before how much tougher the Obama team can afford to be on corporate dealmaking at what time the housekeeping crisis is forcing consolidation across a wide swath of industries.

Varney, 53, was a member of the Federal Trade Commission under President Bill Clinton from 1994 to 1997. However, she is no fire-breathing trust-buster. In fresh years, taken in the character of a lawyer at Hogan & Hartson, a leading law firm representing big corporations, Varney has headed the Internet practice group. Clients for that group included eBay (EBAY), AOL (TWX), and Fox Interactive Media (NWS). While at the FTC, according to Bloomberg News, she voted to charge Toys ‘R’ Us with pressuring manufacturers to keep favorite toys out of rival stores, and to bring consumer-protection claims against R.J. Reynolds Tobacco for advertisements that featured Joe Camel.

Obama’s Antitrust Promise

During his campaign, Obama promised he would "reinvigorate antitrust enforcement." In particular, he said his Administration would "step up write a critical notice of of merger activity and interpret sufficient engagement to stay or restructure those mergers that are likely to harm consumer welfare." But, as it has in so many other areas, the housekeeping crisis may exact a recalibration of those plans. With so frequent businesses financially hobbled, regulators may feel pressure to approve deals they would ordinarily oppose.

Antitrust attorneys predict that in the same proportion that economic provisions force perseverance consolidation, besides companies will make what is known as the "deficiency firm" argument to persuade mergers approved by one or the other the Justice Dept. or the FTC.

The bar is high for of that kind a claim. The parties to the merger have to demonstrate that the company being acquired is in imminent danger of losing game. And it sourness have no survey of a successful reorganization in bankruptcy or of being bought by means of another company that presents smaller of a competitive risk. Still, says Anthony W. Swisher, an antitrust specialist at Akin Gump Strauss Hauer & Feld in Washington, in the current environment "there are a lot of opportunities to make that case."

In 1995, Hearst, that operated the Houston Chronicle newspaper, won approval to buy its rival candidate the Houston Post, after the Justice Dept. determined the Post was a failing firm. With their bleak calling prospects in 2009, newspapers may once again exist making such claims as they try to merge their way out of trouble, predicts George L. Paul, an antitrust attorney at White & Case in Washington.

Retail supermarket chains, pharmacies, and hospitals are also likely to invoke the failing firm argument, Paul says. U.S. automakers would clearly be candidates as well, though Fiat’s plans to take a 35% stake in Chrysler, announced Jan. 20, complicates the picture.

Not Failing? Try Flailing

When the failing company test won’t fly, there’s through all ages. the "flailing company" dispute. Under that, merger candidates contend that even attached the supposition that the ailing company isn’t on the incline of going out of business, it is so weakened that it is on a path to competitive paltriness.

This, too, is a hard sell to regulators, but as Swisher’sitting firm noted in a posting on its Web site, now may have being an opportune time for such a claim: "The household crisis is not something the agencies are likely to question, and its very real collision forward the financial viability of U.S. businesses is not open to debate."

Certainly a lighter regulatory be in contact has already been evident in the rapid-fire combinations among financial-services firms at the end of 2008. Many of the mergers might not have raised antitrust concerns anyway, lawyers speech. But at all essay to oppose or even procrastination the deals would have ignited a political onslaught.

"When the Treasury Dept. orchestrates something like that on a rush, emergency groundwork, one would not expect the Justice Dept. to get in the way," says Brian Byrne, a Brussels-based antitrust lawyer for Cleary Gottlieb Steen & Hamilton. One such deal his firm worked on, notes Byrne, was approved in just a day.

Merrill Lynch’s forgoing stud exits three weeks afterward BofA wraps up its acquisition of the firm—and following Merrill’s pregnant Q4 loss

By Mara Der Hovanesian

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John Thain is out. The former Merrill Lynch chief executive resigned from Bank of America (BAC) on Jan. 22 after a large fourth-quarter deprivation at the brokerage, which forced the federal government to come in with more bailout money for the giant bank.

BofA CEO Ken Lewis flew to New York in the early peep of day to talk with Thain about his position with the bank and, according to a person familiar with the discussion, it was "mutually agreed that his situation was not working out and he would resign."

The latest point in dispute for Thain, a former head of the New York Stock Exchange (NYX), was news reports that some former top Merrill executives had gotten their bonuses on the eve of the brokerage’s merger with BofA, which raised eyebrows in light of the hefty $15.4 billion fourth-quarter deprivation. Thain too drew headlines in December 2008 then he sought a $10 million bonus from Merrill’session board, but he quickly backed away from that go to war let slip the dogs of war.

Bank of America shares have been in free fall ever since it announced Merrill’s huge loss on Jan. 16 and the more emergency federal steeped liquor of $20 billion in cash and more than $100 billion in guarantees on bad effects at Merrill and the Charlotte (N.C.) bank. In the process, BofA agreed to slash its quarterly dividend to a penny a share.

Shares of Bank of America were down as much as 17% on the news, but regained a bit by means of mid-afternoon, down just besides 10% at around 6.

Stuart Plesser of Standard & Poor’session Equity Research put out a fit against sending upon the departure saying that he is "not surprised by the recent accounts and think it could actually subsist looked at considered in the state of a positive for [the bank], given building tension betwixt Thain and [the the usurer’sitting], not to mention more key charged with execution departures, which may have been related to Thain."

And in a press release, Bank of America said that Brian Moynihan had been named president of global banking and global abundance and investment management—the position originally intended for Thain.

Moynihan has been general counsel of Bank of America. Previous to the merger through Merrill Lynch, Moynihan ran the investment bank for the bar. "Brian Moynihan is a strong manager and one of those people who can effectively envision strategy and put to death," said Lewis in a prepared statement. "He has excelled at everything we have asked him to do."

Merrill Lynch’s recruitment of Thain was considered a major coup after quondam CEO Stanley O’Neal had been edged out in disgrace in November 2007. At the while, the brokerage had announced the largest loss of its history: an $8.4 billion writedown. Thain was a hot property at the particular period and was considered a upper end contender for the CEO position at Citigroup (C) as well. Citi had also lost its CEO, Charles Prince, amid large unexpected losses in the third part quarter of 2007. The abrupt departure of Thain from Merrill and Bank of America exercise volition undoubtedly taint his reputation as Mr. Fix-It. Thain, a veteran Goldman Sachs (GS) executive, had been ushered in to rescue the troubled New York Stock Exchange in December 2003, which he successfully took public about three years later.

Lewis emphasized that the change in primacy in not one way reflects a significative change in direction for the global banking or wealth management units.