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Friday, October 3, 2008

TV's 'Mr. Clean' dies at 92

LOS ANGELES, California (AP) -- House Peters Jr., a TV actor who became the original Mr. Clean in Procter & Gamble's commercials for household cleaners, died Wednesday. He was 92.

House Peters Jr. (left) poses with his father during the making of a Western in the early '50s.

House Peters Jr. (left) poses with his father during the making of a Western in the early '50s.

Peters died of pneumonia at the Motion Picture and Television Fund Hospital in Los Angeles, said his son, Jon Peters.

The elder Peters' most memorable role came as Mr. Clean -- a muscular man with a bald head, a hoop earring and a no-nonsense attitude toward dirt and grime. From the late 1950s and into the early 1960s, Peters Jr. helped advertise the famous household cleaner with the trademark jingle, "Mr. Clean, Mr. Clean."

Peters Jr. played many supporting roles through his career, including working with Roy Rogers and Gene Autry on their television shows. He also appeared in "Perry Mason," "Gunsmoke," "The Twilight Zone" and "Lassie."

"He always played the heavy," Jon Peters said, referring to his father's customary roles as a villain or brawny character. "Even though he wasn't happy about being cast in those roles, he worked really hard at it."

His father's acting career spanned 1935-1967, according to his Web site. He also wrote an autobiography, "Another Side of Hollywood," in which he describes growing up the son of an actress and silent film actor in Beverly Hills. His father, Robert House Peters Sr., has a star on the Hollywood Walk of Fame.

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Peters Jr. was never a leading man, but played many character parts in cowboy movies and won a Golden Boot Award in 2000 for his lifetime contributions to the western genre, his son said.

Peters Jr. was born January 12, 1916, in New Rochelle, New York, as Robert House Peters Jr. His son said Peters Jr. studied drama in high school and became inspired to pursue an acting career.

He also is survived by his wife, Lucy Pickett, a daughter, another son and four grandchildren.

Rare striped icebergs spotted in the Antarctic (Photos)

Seen in the Antarctic, these amazing striped icebergs look like strange creatures from the deep. Littering the Antarctic, these large pieces of freshwater ice have broken off to form rainbow colored glaciers.

click here for the pics | digg story

Larry Flynt is Hustling up an Ala-skin flick with Sarah Palin look-alike

Larry Flynt is using the power of porn to express his views on Sarah Palin.

The Hustler founder and freedom of speech advocate has produced an X-rated movie using an adult-film actress who resembles the Republican vice presidential candidate.

Flynt's producers posted an anonymous help-wanted ad on Craigslist in L.A. just days after the Republican convention. "Looking for a Sarah Palin look-alike," read the ad, "for an adult film to be shot in the next 10 days." The actress would be paid $3,000 for the part, said the ad.

No, it's not Tina Fey.

Flynt's spokesman David Carrillo confirmed to us yesterday that the film has been shot by Hustler Video, but he wouldn't yet reveal the title. They need only consult bloggers from humorist Mo Rocca to Choire Sicha at Radar, who upon discovery of the ad came up with such gems as "Juneau You Want It" and "Northern Xxxposure."

The iconoclastic publisher, who was portrayed by Woody Harrelson in the movie "The People vs. Larry Flynt," has never hidden his liberal views. In his 2005 book "Sex, Lies and Politics: The Naked Truth," he eviscerated the Bush administration for what he saw as its violations of U.S. freedoms guaranteed under the Bill of Rights.

Gov. Palin's spokesman could not be reached by deadline.

Nude Portait of Alaska Governor Sarah Palin Unveiled

Sarah Palin Bruce Elliott, 68, of Chicago, has unveiled a nude portrait of Alaska Governor Sarah Palin in his bar in the North Side of Chicago, the Old Town Ale House. The work is four feet tall and is drawing crowds to the bar. In the portrait, the governor is wearing her trademark hairdo, holding an automatic rifle and standing naked on a polar-bear skin rug.

Bruce Elliott said, "I don't see how she could be offended by this. I made her into a sex figure."

Bruce Elliott admits to being a supporter of Senator Barack Obama. He also said that his daughter posed nude for the painting.

He said, "My daughter is a heck of a stand-in for Sarah Palin. She can even do the voice."

Bruce Elliott further stated, "I've been following her (Sarah Palin) religiously. I had never heard of her before, like everyone else. I find her bizarrely fascinating, even though I pretty much despise everything she stands for."
956x732, 73 KB, Sarah_palin-nude-001.jpg
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The New Yorker Endorses Barack Obama

A very good piece on why Obama should be elected.

read more | digg story

The sapphire mines of Madagascar [PICS]

The tiny village of Ilakaka, Madagascar had barely 40 residents before 1998. Then, a large deposit of sapphires was discovered along a nearby riverbed, and caught the eye of some Thai businessmen in the gem trade. 25 Great Pics..

read more | digg story

America's 12 Best Barbecue Joints

Compare those succulent spareribs from Leon's in Chicago with the whole-hog barbecue in North Carolina's Skylight Inn, while planning a trip to Memphis for barbecue spaghetti. Here are our picks for some of the best, representing smoke-pit passions from coast to coast. It'll make you glad to be American...

read more | digg story

More TV Viewers Cut Cable's Cord; Here's What They're Watching Online Instead

Chismillionaire has become a huge fan of Hulu and watching programming online instead of being sucked into and bent over to the tune of $80 a month for 110 channels you never watch.
That's two big bottles of booze or a steak dinner people!

Kenny Johnson, a senior credit analyst for Fox Home Entertainment in Garden Grove, Calif., recently took a hard look at his finances -- and canceled his c-television subscription.

With a newborn child at home and growing household expenses, he says the decision saved him and his wife more than $40 a month -- or roughly the increase he is paying at the gas pump every month for his commute to work. The couple held onto their DSL Internet connection, which costs about $38 a month.

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Now the Johnsons access most of their television shows online, through Web sites like, in addition to the free broadcasts they pick up over the airwaves. They also bought a set-top box that allows them to stream shows via to their television set, including episodes of NBC's "The Office" and Showtime's "Weeds."

"To me, it looks just like my cable," Mr. Johnson says.

In the past two years, nearly every major network show and many of the biggest cable programs have become available on the Internet. The virtual library of content includes everything from "Desperate Housewives" and "CSI" to "The Colbert Report" and "Mad Men."

Some of the biggest hits online are memorable TV moments. More than half of the people who saw recent "Saturday Night Live" skits featuring comedian Tina Fey as vice presidential candidate Sarah Palin watched the skits over the Internet, according to a survey of 500 viewers on Monday by Solutions Research Group. Nearly a quarter saw them on YouTube and 21% saw them on or

Many shows can be viewed for free and are accompanied by a dollop of ads that's small when compared with the number of commercial breaks on television. As a result, some cost-conscious consumers are ditching their cable subscriptions altogether.

[What TV Viewers Are Watching Online] Brian Stauffer

"I'm saving a lot of money," says Tony Leach, a product manager at an online stock brokerage firm in the Bay Area. Mr. Leach canceled his $60-a-month cable subscription two years ago and has watched all of his favorite television shows on the Internet ever since.

The online television bonanza reflects a scramble by networks and cable stations to avoid the fate of the music business, which is still reeling from the effects of piracy and early missed opportunities to capitalize on the Internet.

Complete episodes of about 90% of prime-time network television shows and roughly 20% of cable shows are now available online, according to Forrester Research analyst James McQuivey. There are still notable holdouts, such as Fox's "American Idol" and current seasons of HBO series like "Entourage."

But by aggressively seeking to stay ahead of consumer behavior, content providers are also fueling the growth of this new form of distribution, and that could undermine the economics of the television business, critics say. More than 80% of U.S. households pay an average of $70 a month to get programming piped into their homes via cable, satellite or telephone companies. Most of the remaining households watch advertising-supported shows on their TVs -- programs that are broadcast the old-fashioned way, over the public airwaves.

The number of people watching all of their programs online is still small; some estimates put the number at just 1% of the total television audience. In part, that's because watching online isn't as easy as channel surfing on the couch, TV remote in hand. Viewers must either watch shows on their personal computers, or use a device like Apple TV, which allows them to download shows from the Internet onto their television sets.

Within the next several years, however, media and technology executives say that a host of new technologies will make television access to online video a mainstream phenomenon. Vudu Inc. already sells a $299 set-top box with a remote control that allows users to download television shows for $1.99 per episode. Microsoft and Sony both sell television shows that users of their Xbox 360 and PlayStation 3 videogame consoles can download over the Internet for viewing on television sets.

Netflix subscribers can buy a $99 set-top box from Roku Inc. that streams videos on their television sets. The service is included at no extra charge in the monthly Netflix fee for renting DVDs.

[Blowing out cord] Stephen Webster/ Wonderful Machine

Patrick Crowley, a 35-year-old free-lance Web designer who lives and works in a loft in downtown San Diego, has configured his computer and his space so he can shift easily between work and play. His Macintosh has a 24-inch monitor and sits on a desk on one side of his living room, where he spends most of the day working on projects for clients. After hours, the Mac serves as his entertainment center, which explains the couch, lounge chair and coffee table positioned across from it on the other side of room.

Seated at his computer, Mr. Crowley types into the Web browser. (The site is a joint venture of NBC Universal and Fox, whose owner, News Corp., also owns The Wall Street Journal.) That's where he goes to watch many of his favorite shows, such as the Comedy Central's "The Daily Show with Jon Stewart." He also downloads programs from iTunes, where advertising-free episodes sell for $1.99 each. His library has about 100 episodes, including installments of Showtime's "Weeds " and NBC's "Studio 60 on the Sunset Strip." He's even installed an application onto his iPhone that turns the device into a remote control for his iTunes video downloads, so he can change clips without getting up from his couch.

It takes about 10 minutes to download a half-hour TV show on iTunes, though Mr. Crowley says he can usually start watching it a few seconds after the download begins. Shows on Hulu and the television networks' own Web sites are "streamed," a method that allows videos to begin playing instantly but leaves no permanent copy on users' computers.

Since canceling his cable television service from Cox a year and a half ago, while maintaining his high-speed Internet connection through the company, his monthly service bill has gone to about $60 a month from $160. "It's a much more efficient way of watching TV," says Mr. Crowley. He figures he spends about $8 a month at the iTunes video store, and watches about as much television as he did before he cut the cable cord.

A survey of users in the second quarter of 2008 showed that 83% of respondents watched a show on the network's Web site because they missed its original airing. "We see no evidence of a substantial number of people choosing to watch online instead of on television," says Alan Wurtzel, president of research for NBC Universal.

Most television shows are available online only after a delay from their original air date, anywhere from a day to months later. Televisions networks take down many older episodes after a while, so users don't have a permanent library of some shows.

The online selection of live sports games is spotty as well. This season, for example, the National Football League will make Sunday night games available live on the Net, but those amount to only about 7% of all regular-season NFL match-ups. Cable and broadcast news shows typically aren't streamed live on the Internet, unless there's a major breaking news event like Hurricane Katrina.

Still, research firm Nielsen Online estimates that in June, 3.2 million Internet users watched more than 106 million video streams on, a site that wasn't available to the public until March. Walt Disney Co.'s delivered nearly 27 million streams to 2.9 million viewers that same month, according to Nielsen. The data include everything from behind-the-scenes clips and segments of shows to complete episodes.

Other research indicates that online video-watching is cannibalizing television audiences. According to a spring survey by Integrated Media Measurement Inc., a research firm that tracks media consumption, more than 20% of viewers in the firm's 3,200-person panel watched some prime-time network television online, up from roughly 6% in the fall. Half of those online viewers said they were no longer watching those shows on television.

"What this study is showing is that the long-vaunted convergence of the TV and the computer is happening faster than anybody thought it was happening," says Tom Zito, Integrated Media's company's CEO.

Craig Moffett, a cable-industry analyst at Sanford Bernstein, says he believes television and cable companies are recklessly pursuing Web viewers to avoid seeming like "Luddites," without considering the long-term consequences if too many customers pull the plug on their service in favor of free Web video.

A typical half-hour television show contains about eight minutes of advertising, while that same show online contains about two minutes of ads, or about a quarter of the "ad load," Mr. Moffett says.

Cable channels, meanwhile, may be taking an especially big risk because they typically get half or more of their revenue from subscriber fees shared by cable and satellite operators -- a business that could be jeopardized if people start canceling their pay-TV subscriptions. (Broadcasters like ABC, Fox, NBC and CBS don't get a cut of subscriber fees from cable carriers, since the networks' channels are also available free.)

Tensions are beginning to heat up between cable operators and cable channels over free Web video. Glenn Britt, CEO of Time Warner Cable Inc., has been one of the most outspoken people on the topic, telling cable program executives to not expect to continue sharing subscription revenue if they keep giving their top shows away for free online. When asked how programmers have been responding to such comments, Mr. Britt says, "Not well."

Executives at several cable channels were reluctant to discuss the topic, at the risk of further straining discussions about Internet television with their cable-operator partners. "We can't just cut the cable companies out," says one of those executives.

Of course, Web watchers will still need fast Internet connections to get all that video, a potential boon for the broadband Internet businesses at cable and telecommunications companies.

Consumers' sympathy for the cable operators is in short supply after years of rate increases. Between 1995 and this year, cable and satellite prices have increased by 79%, almost double the level of inflation during that period, according to the Bureau of Labor Statistics. Total U.S. cable-industry revenue from television subscriptions hit roughly $53 billion in 2007, plus an additional $23 billion when Internet access and telephone fees are included, according to Bernstein Research.

And while cable operators say that the industry has provided far more value over the years, with everything from more channels to video-on-demand, most consumers actually use only a small portion of the cable-television offerings they pay for. Last year, the average home received 118.6 cable channels but only tuned into about 16 of them, or 13% of the total available to them, according to the Nielsen Co.

Jeff Pulver, founder of Inc., which makes it easier to locate Web television shows, says he believes the Facebook and Google generation won't look askance at getting television shows from the Internet.

Still, adds Mr. Pulver, who also co-founded the Internet phone company Vonage, "Some people will [continue] to subscribe to cable, the way their grandparents did."

Write to Nick Wingfield at

House Passes Bailout on 2nd Try

WASHINGTON -- U.S. House of Representatives lawmakers wary of growing signs of the nation's economic distress voted in favor of a $700 billion Wall Street rescue package on Friday, sending the biggest government intervention in the financial markets since the Great Depression to President George W. Bush for his signature.

[boehner] European Pressphoto Agency

U.S. House Minority Leader John Boehner, House Minority Whip Roy Blunt and Republican Conference Chair Adam Putnam hold a press conference after a meeting of the House Republican Caucus about the revised bailout bill.

The 263-171 vote was a stark reversal from Monday, when House lawmakers shocked investors and their own leaders by voting against a more narrow version of the plan to buy up distressed assets from financial institutions. That vote sent financial markets tumbling and forced the Bush administration and congressional leadership to scramble and salvage the rescue plan.

The result: a $700 billion bailout for financial firms combined with $152 billion in unrelated tax breaks and broader tools for federal regulators to deal with the growing economic crisis. The Senate passed the bill with a strong, bipartisan tally of 74-25 on Wednesday evening.

The vote in the House was closer, in part a reflection that lawmakers are less than five weeks away from federal elections and voters are increasingly focused on the economy. Supporters of the rescue plan in recent days made a concerted effort to draw a line between Wall Street's woes and the concerns of everyday taxpayers.

"We must pass this legislation to stop the hemorrhaging," Majority Whip James Clyburn (D., S.C.) said in a floor speech, calling the legislation not about Wall Street but about the grocery stores, community banks and other local businesses facing economic hardship.

The likelihood of a winning vote cheered Wall Street, with the Dow Jones Industrial Average up 220 points in early afternoon trading as the vote was tallied.

October but without the Muscle

In a Year of Transition, Baseball's Postseason Pits Old Philosophies Against New Hybrids; All Eyes on Tampa Bay

More is at stake in these baseball playoffs than a trophy and a grip-and-grin session with the president. This year, we may finally see the rise of a new philosophy. A sport that sloughed off the legacies of the dynastic New York Yankees, home-run king Barry Bonds and pitching legend Roger Clemens this year could use it.

The Tampa Bay Rays and the Los Angeles Angels, the teams with the best records in the sport's stronger league, play a faster, quirkier brand of baseball that suits a changing game. Home runs hit a 15-year low this year, and young players whose salaries teams can control are increasingly prized. (Even the Yankees declined to trade for pitching ace Johan Santana last year, citing the need to keep their young prospects, who ended up playing disastrously.) The Rays and Angels, less reliant on power hitting and veteran talent than the rival Boston Red Sox and Chicago White Sox, may be better fitted to adapt.

[Angels closer Francisco Rodriguez] MLB/Getty Images

Angels closer Francisco Rodriguez

Picking This Week's Impact Players

Baseball Info Solutions ran a set of computer simulations for the first round of this year's baseball playoffs to measure the impact some key players might have on offense. See the most impactful players overall.

Nothing is so quickly imitated as a winner, so if the Rays or Angels follow on their regular-season excellence with a World Series victory, it will set a powerful example. So too, though, would a win by a more traditionally styled team like the Chicago Cubs, who haven't won in a century but are favored this year by bookies as well as sentimentalists.

Styles make fights, and baseball teams. Take the set between Tampa Bay and the White Sox, two teams that couldn't be less alike. The Rays, who before this season had never lost fewer than 90 games, beat out the Yankees for a playoff spot with a payroll one-fifth as big. The White Sox won the World Series three years ago, and won their division this season with a payroll ranked fifth in the game. The 32 hitters who took an at-bat for the Rays this year, collectively the second-youngest such group in the league, have hit 950 home runs in their careers. Chicago's Jim Thome and Ken Griffey, part of the American League's second-oldest lineup, have hit 1,151.

[Tampa Bay third baseman Evan Longoria] Getty Images

Tampa Bay third baseman Evan Longoria

On the field, the differences are at least as stark. The Rays, led by defenders like third baseman Evan Longoria and shortstop Jason Bartlett, led the majors in converting batted balls into outs, a key measure of defensive efficiency. The White Sox were 23rd. The Rays were second in the majors in stolen bases; the White Sox, 25th. The greatest difference, though, is the home run. The White Sox led the majors with 234, so many that even though Tampa Bay ranked 10th with 180, they were closer to 24th-place Toronto than to Chicago. Other than ace Scott Kazmir, the Rays' young starters don't give up many home runs; expect this one to be a victory for Tampa Bay, and for evolution.

A similar, if less dramatic, dynamic is at play in the American League's other series. Boston, the best-run team in baseball, seeks to win a third World Series in five years and establish a dynasty. They feature a sound defense and a fine pitching staff led by starters Daisuke Matsuzaka and Jon Lester, who combined for a 34-9 record and finished third and fourth, respectively, in the league in earned run average. Their success, though, is keyed by an overwhelming offense.

Sophomore second baseman Dustin Pedroia led the league in runs and hits, first baseman Kevin Youkilis ranked among the leaders in every important offensive category, and overall the team rated second in baseball in batting average, first in walks, and third in extra-base hits. They did so despite an off-year from David Ortiz and the July trade of Manny Ramirez. This is a ferocious lineup.

[Boston ace Daisuke Matsuzaka] Getty Images

Boston ace Daisuke Matsuzaka

The Angels, conversely, ranked among the bottom 10 in baseball in walks and extra-base hits, and their .269 average ranked just 12th in the game. Crucially, though, with runners on base that rose to .287, third in the game. Similarly, their pitching, paced by homegrown starters Ervin Santana and Joe Saunders, was no better or worse than Boston's, but their bullpen was better by a third of a run per game (Wednesday's Game 1 drubbing notwithstanding). Closer Francisco Rodriguez was the first pitcher ever to save 60 games in a season.

Add it up, and the Angels won five more games than the Red Sox despite outscoring their opponents by 83 fewer runs, less because of what they did than when they did it. Hitting and pitching well in the pinches can, if you do it consistently, make up for a lot. Between that, the dubious health of key Boston players like ace Josh Beckett and outfielder J.D. Drew, and the fact that the Angels won eight of the nine games the two teams played this year, this one looks like a victory for the Angels and another defeat for take-and-rake baseball.

It's easy to reduce these series to caricature. The Red Sox are in truth no softball team, and have great young homegrown players like Mr. Pedroia, Mr. Lester and closer Jon Papelbon. The Angels have plenty of pricey veterans like outfielders Vladimir Guerrero and Torii Hunter. The Rays, for all their youthful vigor, are a very patient team; the more experienced White Sox aren't. In all, though, these two series match power against technique, and strategic emphases on speed and situational play against raw power. No moral virtue attaches to either, but one, given the sport's cyclical nature, represents where baseball is going, and the other represents where it has been.

For their part, the National League's playoff entrants all basically follow the same model as the Red Sox and White Sox. This makes sense for several reasons. The league isn't as competitive, so there's less incentive for teams to try to outwit opponents with novel strategies. There's also a generational difference at play. Three National League managers are in their 60s, while three American League ones are in their 40s. Joe Torre of the Dodgers alone has managed more seasons than all the American League skippers put together, while Chicago's Lou Piniella has managed nearly as many.

What the league lacks in novelty, though, it makes up in individual talent, including two of the great midseason acquisitions of all time. Milwaukee, which hasn't been seen in October in more than a quarter-century, is doing so due largely to the presence of CC Sabathia, who put up an awesome 11-2 record with a 1.65 ERA and seven complete games in 17 starts after coming over in a July trade. Manny Ramirez hit .396 with a .489 on-base average and a .743 slugging average in 53 games for the Dodgers after an ugly exit from Boston. On the other hand, Mr. Sabathia, for all his vaunted endurance, can only start twice for the Brewers, and Mr. Ramirez may not even be the most important hitter on his team.

[Philadelphia second baseman Chase Utley] Getty Images

Philadelphia second baseman Chase Utley

Baseball Info Solutions, a Pennsylvania-based research firm, recently ran a set of simulations of each playoff series. In each one, they removed a key offensive player from a team, substituted an average player at his position, and then played out that team's series 50 times. Some results were expected. Left fielder Ryan Braun, for instance, had the most impact of any Brewer; on average, the team scored 1.02 fewer runs per game without him than they did with him. Some were less so: Philadelphia Phillies second baseman Chase Utley had more than twice as much impact as first baseman Ryan Howard, who hit 16 more home runs and drove in 42 more runs during the regular season.

The most surprising result, though, came in Los Angeles. Removing right fielder Andre Ethier, who hit .305 with a .375 on-base percentage this year, cost the Dodgers an average of 0.96 runs per game in the simulation series. Removing Mr. Ramirez cost them 0.58 runs per game (the difference has to do with talent levels at their respective positions).

Whether or not Mr. Ethier outplays Mr. Ramirez -- with respect, I wouldn't bet on it -- this kind of result points up the impact a single player can have in the right circumstances, and how unpredictable the playoffs can be. One would assume that Philadelphia's imposing No. 4 and No. 5 hitters, Mr. Howard and Pat Burrell, will play a major role in their series against Milwaukee; according to the BIS simulations, though, neither should be expected to have much more impact than the Brewers' journeyman center fielder Mike Cameron. Given the Phillies' greater patience and speed and the presence of closer Brad Lidge, who didn't blow a save all year, you probably have to give them the edge here. But keep an eye on Mr. Cameron.

As for their opponent, the bookies and sentimentalists may well be disappointed. Chicago's ace pitchers, the monstrous sinkerballer Carlos Zambrano and strikeout artist Rich Harden, are unbeatable in theory. In practice, given Mr. Zambrano's dodgy shoulder and the brittle Mr. Harden's randomly disappearing fastball, the Cubs entered the playoffs with a sketchier rotation than the Dodgers. (Tellingly, Ryan Dempster, who had a terrific year but also spent the last two as a closer running up ERAs near 5, started the opener -- in which he walked seven and gave up four earned runs in a 7-2 loss.)

Further, their imposing lineup, built around a wall of right-handed power in Derrek Lee, Alfonso Soriano, Geovany Soto and Aramis Ramirez, can be expected to look much less imposing against a Dodgers staff that held right-handers to a .239 average, third-best in the game.

Whichever team comes out of the National League, one can expect them to have a very hard time of things, perhaps barring a miracle run by the flawed White Sox, easily the weakest of the junior circuit's teams. If they run up against the Red Sox, they'll be facing a team like them, but better; if they meet the Rays or Angels, they'll be facing a team that beat the Red Sox. I like the odds of the latter; for what it's worth, so do the bookies.

Wells Fargo to buy Wachovia - snub Citigroup

A battle for Wachovia Corp. erupted as Wells Fargo & Co. struck a $15.4 billion deal to buy the Charlotte, N.C., bank only four days after it agreed to a takeover by Citigroup Inc. at a much lower price.

Wachovia insisted there is nothing to stop it from scrapping the federally backed purchase by Citigroup. But the New York bank threatened to challenge the Wells Fargo deal on the grounds that it is in "clear breach" of an "exclusivity agreement" signed earlier this week, according to a statement issued by Citigroup minutes after the end of a Wells Fargo conference call with analysts and investors.

Citigroup also is considering increasing its bid for Wachovia, valued at about $2.16 billion.

According to a copy of the Sept. 29 agreement between Citigroup and Wachovia that was reviewed by The Wall Street Journal, Wachovia agreed not to "enter into or participate in any discussions or negotiations with … any third party that is seeking to make, or has made, an Acquisition Proposal." (See the document.)

Wachovia officials don't dispute the contents of the agreement signed with Citigroup. But a person familiar with the situation said that Wachovia directors were obliged under their fiduciary duty to shareholders to accept Wells Fargo's higher offer, even though that leaves Wachovia legally vulnerable.

The recriminations and abrupt upending of the deal struck by Citigroup and Wachovia before dawn Monday set up the likelihood of an extraordinary fight between the third- and fourth-largest U.S. banks in stock-market value to snag Wachovia. It has fallen to eighth-largest among U.S. banks because of its battered stock price and the conversion of Goldman Sachs Group Inc. and Morgan Stanley to bank-holding companies last month.

The situation also reflects the colliding interests of banks, their stock and debt holders, regulators and acquirers amid the chaotic environment swirling through the U.S. banking industry.

[ Richard Kovacevich, chairman of Wells Fargo & Co., speaks during a meeting in New York, U.S., on Tuesday, Dec. 11, 2007.  Kovacevich said he expects the Federal Reserve to cut interest rates today and guide the economy through 2008 without a recession.  Photographer: Daniel Acker/Bloomberg News /Landov] Landov

Richard Kovacevich, chairman of Wells Fargo

The Wells Fargo offer is for $7 a share in stock, based on Thursday's closing price, 79% above where Wachovia shares finished. Wells Fargo also will assume Wachovia's preferred stock and debt.

In conjunction with the deal, Wells Fargo will issue $20 billion in new securities, mainly common stock. Wachovia shares surged 64% premarket to $6.40 while Wells Fargo rose 1% to $35.50 and Citigroup fell 6% to $21.15.

Citigroup executives, blindsided by the Wells Fargo agreement to buy Wachovia, are considering filing a lawsuit against the two banks and also may sweeten their bid for Wachovia, according to a person familiar with the matter.

Citigroup, which hoped to gain access to Wachovia's deep well of deposits, is considering its legal options, including suing Wachovia for breach of the exclusivity pact and suing Wells Fargo for tortious interference, the person said.

In a statement, Citigroup "demanded that Wachovia and Wells Fargo terminate and not proceed with any proposed transaction, any conduct in furtherance thereof, or any other act in violation of the Exclusivity Agreement. Citi has substantial legal rights regarding Wachovia and this transaction."

Citigroup executives also believe that federal banking regulators may intervene on their behalf to block the Wachovia-Wells merger, this person said. A spokesman couldn't be immediately reached for comment.

Officials from Wells and Wachovia dismissed the Citigroup concerns when answering questions on this topic during a conference call.

'Deal Is Solid'

"We think that this deal is solid," said Wells Fargo Chairman Richard Kovacevich. "We are not aware of any merger agreement that has been consummated at the time and as far as other issues, I haven't seen anything in terms of issues that Citigroup had or doesn't have. We feel very confident that this transaction has been done appropriately and will continue and be consummated."

He added: "We believe that regulators would also be comfortable with what has transpired here."

Wachovia Chief Executive Officer Robert Steel, referring to two questions pertaining to Citigroup, noted "there is controversy on this issue and that will be addressed in the appropriate way."

An analyst followed that response by asking Mr. Steel directly if he could address whether Wachovia had a binding agreement with Citigroup.

Mr. Steel said, "No."

A resolution against Citigroup would be a bad development for the company. It would highlight weak spots at the New York banking giant and challenge the notion that it has moved solidly from the problem category to the solution camp as the financial crisis unfolds.

Citigroup's move to buy Wachovia's banking operations was widely seen as an effort to shore up its deposit base, which will now look less solid. Also, Wells Fargo is buying all of Wachovia without government help. That makes Citigroup's deal for only part of the company and need for Federal Deposit Insurance Corp. guarantees against losses on some problem loans look relatively paltry. In a statement, FDIC director Sheila Bair said the agency stands behind "its previously announced agreement with Citigroup."

Ratings agencies warned after the Citigroup deal that they could downgrade the financial services company's debt. They expressed concerns about the poor quality of some of Citigroup's own assets.

A Citigroup spokeswoman wasn't immediately available to comment.

Under the deal, Wells Fargo will acquire all of Wachovia. The Citigroup deal had excluded the asset-management and brokerage operations and put the Federal Deposit Insurance Corp. on the hook for potential loan losses.

Mr. Kovacevich said that the deal "provides superior value" to the Citigroup deal and that it will allow Wachovia shareholders to "have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world's great financial services companies."

The deal represents a major reversal from Wells Fargo's historical trend against acquisitions. Just two months ago, Chief Executive John Stumpf said it was highly unlikely Wells Fargo would pursue a large East Coast rival.

But Wells Fargo's appetite for acquisitions began changing in September, as Mr. Kovacevich said the bank "often buys fixer-uppers," adding, "Given the financial conditions today I feel like a kid in a candy store." Wells Fargo had also taken a look at Washington Mutual Inc. before it was seized last week and sold to J.P. Morgan Chase & Co. for $1.9 billion.

Wachovia shareholders will get 0.1991 share of Wells Fargo stock for each Wachovia share. Following the deal, Wells Fargo expects to incur about $10 billion in merger and integration charges. To maintain its capital position, it plans to issue up to $20 billion of new Wells Fargo securities, primarily common stock.

As part of the deal, Wachovia is issuing Wells Fargo preferred stock that votes with Wachovia's common stock and gives Wells votes equal to 39.9% of Wachovia's voting power.

"Today's announcement creates one of the strongest financial firms in the world and is great for all Wachovia constituencies: our shareholders, customers, colleagues and communities," Mr. Steel said in a prepared statement. He added that the deal "enables us to keep Wachovia intact and preserve the value of an integrated company, without government support."

Mr. Kovacevich said the deal "will result in an immensely strong, stable financial services company." He noted the inclusion of Wachovia's brokerage and asset-management businesses "avoids the complexity and unavoidable loss of value in trying to separate them, which would have disrupted Wachovia's team members and customers." He added, "And, of course, this agreement won't require even a penny from the FDIC."

Charlotte will be the headquarters for the combined company's East Coast retail and commercial and corporate banking business, while St. Louis will remain the headquarters of Wachovia Securities. Three members of the Wachovia board will be invited to join the Wells Fargo board following completion of the deal. Mr. Stumpf indicated the company will try to "retain as many of the talented Wachovia team members as possible."

Citigroup's deal with Wachovia had been hammered out in frenetic negotiations that lasted all of last weekend. The immediate catalyst was that major credit agencies were poised to cut Wachovia's ratings, just as the bank had billions of dollars in debt coming due this week.

Wells Fargo initially said it was prepared to buy Wachovia for more than $20 billion and wouldn't require any government assistance. But late Sunday, the San Francisco bank abruptly changed its mind, setting into motion a desperate scramble through the night that ended with the government presiding over Wachovia's shotgun marriage to Citigroup early Monday morning.

Wells Fargo's deal announced Friday indicates that it changed its mind again and that Wachovia was quick to break its agreement with Citigroup.

Wachovia said it received and approved the proposal from Wells Fargo Thursday night.

Acquiring Wachovia would have vaulted Citigroup into the upper echelon of U.S. banks. The addition of Wachovia also would have allowed Citigroup to boast the third-largest network of U.S. bank branches. Today, Citigroup has about 1,000 U.S. bank branches -- lagging behind nine other banks.

Wachovia's woes came into sharp focus after last week's seizure of Washington Mutual Inc. Shares of Wachovia slumped as investors looked at it as the potential next victim in the credit crunch.

Wachovia wasn't doomed by the same sort of customer exodus that led regulators to seize WaMu's banking operations last week. But federal officials concluded that the bank's deteriorating condition posed a threat to the already fragile U.S. financial system.

Wachovia has tens of billions of dollars in so-called option-ARMs outstanding. The adjustable-rate mortgages allow some homeowners to actually increase their loans' balance by paying less than the full monthly interest they owe. They have been at the heart of surging foreclosures and defaults.

—Marshall Eckblad, Donna Kardos and Tony Cooke contributed to this article.

Write to Matthias Rieker at and David Enrich at

Puegot RC Concept

The Peugeot RC hybrid concept mixes driving fun with environmental friendliness.

By Mike Monticello Photos by John Lamm
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French automaker Peugeot says the RC concept at this year's Paris auto show is the missing link between the RC Spades/RC Diamonds mid-engine concepts from the 2002 Geneva show and the 908 RC from the 2006 Paris show.

The latest Peugeot RC concept is "a working laboratory of many future ideas and brings together numerous stylistic, engineering and technological ideas all in a single vehicle," according to the manufacturer. You'll remember the RC Spades and RC Diamonds from 2002 were rear/mid-engine sports cars, the Spades using a gasoline engine and the Diamonds a diesel. The 908 RC, on the other hand, was a luxury 4-door powered by a 700-bhp 12-cylinder turbodiesel from the Le Mans race car, the engine also mounted aft of the passenger compartment.

Although Peugeot's latest RC is also a 4-door with four seats, Peugeot is quick to join so many other manufacturers in calling it a "GT Coupe," as opposed to a sedan.

Unlike the outrageous 908 RC, the newest RC sports a hybrid drivetrain. Peugeot says the RC concept could theoretically develop a maximum power of 313 bhp from what the company is calling "a highly innovative hybrid architecture." Therefore the RC will have minimal impact on the environment, whether run in its gasoline/electric mode or fully electric.

While the RC concept showcases of future technologies and styling themes, this Peugeot is more about proving that environmentally friendly vehicles can also be fun to drive.

Ferrari says NO to Four Doors- Thank God

Ferrari President Luca Cordero di Montezemolo made it clear: "I have been president of this company for nearly twenty years, and I hope to continue for another twenty, and as long as that is so, Ferrari will not make a four-door sedan."

It was a logical enough question the handsome, di Montezemolo here at the Paris Motor Show, as cross-town rival Lamborghini rolled out the Estoque four-door concept, one of the show's most talked-about reveals. "We will continue to build extreme cars, sporty cars, larger GTs, but a sedan is not right for Ferrari." When asked about the radical Lambo sedan concept that is on its way to production, he replied simply "Good luck."

People still remember the Pinin, a four-door Ferrari concept designed and built in 1981 by Pininfarina, so it was a logical question to ask. But that car was never an official Ferrari project; it sold as "automobilia" not as a car, at RM Auction's Legenda e Passione sale at the Ferrari factory in May.

I agree with Mr. di Montezemolo. Every carmaker should explore unique automotive forms, but this is a place that Ferrari should never, ever go. I believe this is one of the reasons that Lamborghini put forth the Estoque, because they know Ferrari will not respond in kind with its own sedan. This gives Lambo some clear air in the exotic car stratosphere.

Over the next few years, we'll find out how the Estoque, the Panamera, the Rapide, future Bentley models, and possibly others will do in this space. No matter, this particular fight will take place without Ferrari. It's a place Maranello doesn't belong, and I'm jpleased they feel no need to go there.

MLB Playoff Preview: Hot Fans Edition

As October rolls in so too do the MLB Playoffs. After 162 games 8 teams remain for a chance to make it to the World Series. Below are the divisional series which begin today. But as always, just sports isn’t enough, so we’ve put together a ton of hot fans to help guide you through the action. Because, really, if you’ve got sports and babes, what else do you really need?

Check out MLB Playoff Preview: Hot Fans Edition after the jump!

Boston Red Sox vs. Los Angeles Angels of Anaheim

The Defending World Series Champions will take on one of the hottest teams in baseball. This match-up should come down to pitching. I think the Angels bullpen should be the edge they need to overtake the Red Sox in four games.

Angels def. Red Sox 3-1

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Chicago White Sox vs. Tampa Bay Rays

The surprise team of the year the Tampa Bay Rays will play host to the last team in the playoffs. The White Sox have had to play 3 different teams in 3 days just to claim a spot in the postseason. Meanwhile the Rays have been able to gather themselves and rest before the playoff push.

Rays def. White Sox 3-2

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Los Angeles Dodgers v. Chicago Cubs

The Dodgers got a big boost with the trade deadline acquisition of Manny Ramirez. This move shot the Dodgers into the postseason, but I don’t think it will be enough to overtake the best team in the National League.

Cubs def. Dodgers 3-1

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Milwaukee Brewers v. Philadelphia Phillies

The Phills won the highly contentious NL East while the Brewers had some tough times down the stretch but still found themselves in the postseason. I have no real reason for this prediction, just a total hunch.

Brewers def. Phillies 3-2

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If I were a Rich Frog- all day long I'd.....

Peugeot RCHyMotion4

Hall 1 at Paris is a bit like visiting Mars, dominated as it is by the French Big Three brand names Peugeot, Citroen, and Renault. They're not sold in the U.S., and they don't sell all that well in the rest of Europe so most of their offerings appear completely unfamiliar. So it's fun to pretend to be a patriotic Frenchman with no preconceived notions about or knowledge of cars and simply shop based on emotions. Might as well pretend to be rich, no?

My first stop was the Peugeot stand where the stunning low-slung RC HyMotion4 concept was twirling around on the turntable. So low-slung, it could compete with Aston Martin's Rapide sedan on looks alone (at least amongst rich French patriots). Sadly, it's not for sale.

Peugeot 607

The big Pug sedan that is for sale is the 607, which just looks way too conventional and boring both inside and out. This is France, man, vive la difference! And sacre bleu! 46,000 Euros with a lousy four-banger diesel? I don't think so

Peugeot 407

The 407 Coupe at least appeals to the eye, and a nice one like this goes for 47,000 Euros but at least packs a 2.7-liter diesel good for 28 mpg. (Remember these prices include the incredibly steep French taxes.)

Renault Ondelios

The Renault stand was an almost total disappointment. If I were patient, I might try to wait for something to come of the wacky Ondelios concept, which packs six bizarre LaZBoy recliners into a two-box shape that looks like it has a load in it's drawers. (The middle row is shown pushed back against the third row for max lay-back.)

Renault Laguna front
Renault Laguna Coupe rr

Renault has stopped making its quirky Vel Satis D-segment luxo-cruiser, so the best I could do here was the new Laguna coupe. Similar, slightly awkward new face as the rest of the Lagunas, but the rear saves it.

Citroen C5

There's much more to love at the Citroen stand. It's tempting to go straight for the top-of-the-line C6, with its concave rear glass that pays homage to all the great Citroen flagships of yore, but I was drawn to the more sporting new C5 Berline. Its steering wheel hub remains stationary, and houses controls for everything you use frequently, its dash features reconfigurable displays, the headlining is alcantara, it's just way cool. Prices start at $38K, but "mine" is $46K with a V-6 diesel and all the trimmings. C'est si bon.

Sneak Peak of Aston One-77 in the flesh

PARIS — This is as much as Aston Martin wants us actually to see of the $2,100,000 Project One-77 here on the 2008 Paris Auto Show floor. Inside Line persuaded Aston's people to hike up the Savile Row tailored skirt to show us a little skin, and design director Marek Rauchman told us as much as he could without compromising his job.

Most of the story is clear already: one limited run of 77 cars, a 700-plus-horsepower 7.3-liter V12, full carbon fiber monocoque chassis, old school hand-wheeled aluminum body, and start of deliveries by October 2009. Oh, and Aston has already spoken closely with more than 77 intent customers, according to company representatives.

The current non-runner semi-exposed in Paris is not yet of the aluminum and carbon fiber variety, but is all of milled applewood, design director Rauchman tells IL. "This is the embodiment of our past and the future," says Rauchman. "There's a return to our roots with the fully hand-formed aluminum panels, and then there are all of the very latest technologies on board that such a customer demands," he says.

That technology is sure to include a fully adjustable suspension, six-speed (some say seven-speed) paddle-shift gearbox, and the ceramic brake discs seen first on 2007's DBS, which by the math this Project One-77 costs five times more than. We also spotted fairly hard-walled 20-inch Pirelli P Zero tires front and rear wrapped around the stunning custom alloys.

Standing on the same level as the Project One-77 and then doing the same with the DBS revealed that the One-77 is a good four inches less in height than the DBS, wider by about three inches, and roughly the same length. The front spoiler lip and rear diffuser in carbon fiber betray the fact that an intensely quick machine awaits.

By Rauchman's account, using aluminum and carbon fiber in such abundance assures distinct rigidity and lightness. As for the design, Rauchman describes each viewing as "a collective dropping of jaws."

Why the name One-77? "The number 75 just seemed way too obvious and normal," Rauchman told IL. "The number 77 was just two lucky sevens. That and the actual fact that many of the toolings we use for the car have a life of just eighty or so uses."

What this means to you: You now know even more about another car that you cannot afford. Aston is entering a phase of shameless profiteering that comes of leading a life of sin.