Treasury Undersecretary Robert Steel said it's premature to say that financial market turmoil stemming from tightening credit conditions is near an end. "This is going to take a while to work through, and the improvement from here won't be in a continual line," Steel said in an interview on Bloomberg Television's "Political Capital with Al Hunt," to be aired today. While progress is being made, he added, "there will be some bumps and fallbacks."Steel's remarks suggest he's less optimistic than Wall Street executives such as JPMorgan Chase & Co. Chairman Jamie Dimon, who have said the credit-market freeze is more than half over. Steel said it's "a bit simplistic" to say the turmoil is closer to the end than the beginning, as Citigroup Inc. Chief Executive Officer Vikram Pandit did this week.
To help restore liquidity in capital markets, the government should consider easing limits on how much private-equity firms can invest in banks, Steel said in the interview. The Bush administration is also open to discussions with Congress on the creation of a federal agency to monitor financial market risk, he said.
Falling house prices and rising mortgage delinquencies have slowed U.S. growth, disrupted credit markets and led to $309 billion in credit losses and asset writedowns by the world's biggest banks and securities firms since the start of last year. -- Bloomberg News
Japanese automakers have mixed results
EARNINGS
Honda saw its profit slashed by a tax, while Mitsubishi racked up costs for closing an Australian plant. But Mazda -- the smallest of Japan's five biggest automakers -- emerged unscathed Friday to report booming profits for the January-March quarter. Honda Motor Co.'s net profit in the January-March quarter plunged 86 percent compared with the same period a year ago because of a corporate tax on its Chinese joint venture, at $244.2 million. Quarterly sales edged down 1 percent to $29.4 billion.Meanwhile, Mitsubishi Motors Corp.'s profit for the latest quarter dropped 37 percent ($125 million), despite a 12 percent improvement in quarterly sales to $7.07 billion.
Mitsubishi blamed the drop in earnings on the closing of its Australian factory in the southern city of Adelaide earlier this year. It had operated the plant for 28 years.
Mazda Motor Corp., based in Hiroshima, was an exception in reporting a 48 percent jump in profit for the January-March period on strong overseas sales, especially in Europe, on way to a record annual profit for the one bright spot in the Ford family.
The Japanese affiliate of Ford Motor Co. of the U.S. reported a $450 million profit for the quarter through March and a rise in quarterly sales of 1.2 percent to $9.3 billion, partly on demand for the Mazda 6 in Europe.
The recent rise in oil prices have been a boon for Japanese automakers because of their reputation for small cars delivering good mileage. -- Associated Press
Goodyear's earnings boost beats expectations
EARNINGS
CLEVELAND -- Goodyear Tire & Rubber Co. said Friday that it swung to a profit in the first quarter by focusing on higher-priced tires and strong international markets. But the company says it will cut tire production in North America, where sales have been sluggish.
The results from Goodyear, the world's third-largest tiremaker and No. 1 in the U.S., beat Wall Street expectations and its shares rose 6 percent.
Goodyear said it earned $147 million, or 60 cents per share, in the quarter that ended March 31, compared with a loss of $174 million, or 96 cents per share, in the same period in 2007. Sales rose to $4.94 billion from $4.5 billion a year ago.
Goodyear shares rose $1.66 to $28.91 on Friday. They have traded in a range of $22.27 to $36.90 in the past year. -- Associated Press
