Harold Maass of The Week The Best of Today's Business

NEWS AT A GLANCE

Citigroup reshuffles units

Citigroup, the largest U.S. bank, announced several high-profile departures and hires, part of an expected broad reorganization started by new CEO Vikram Pandit. In the biggest change, Citi has hired Terri Dial, the head of U.K. retail banking at Lloyds TSB, as its new global head of consumer strategy, The Wall Street Journal reported. (Reuters) Dial will be charged with turning around Citigroup's flagging U.S. consumer banking operations. (MarketWatch) Citigroup also promoted Nick Roe to head its global equity finance and prime brokerage unit, replacing co-heads Ali Hackett and Tom Tesauro. Citigroup has lost more than half its market value in recent months. (Bloomberg)

Fannie, Freddie may raise up to $20 billion

U.S. government-chartered mortgage companies Fannie Mae and Freddie Mac can raise up to $20 billion in capital, according to their federal regulators. The Office of Federal Housing Enterprise Oversight (OFHEO) agreed last week to lower the amount of capital reserves held by the companies to 20 percent, from 30 percent, in a bid to shore up the housing market. (Reuters) Fannie and Freddie own or guarantee almost half the $11.5 trillion in U.S. residential debt. The $20 billion figure is at "the top end of the range," said OFHEO director James Lockhardt. "We felt at this point it was important to add liquidity to the mortgage market." (Bloomberg)

Mitsubishi enters plane market

Japan's Mitsubishi Heavy Industries is building a midsize regional jet, the first passenger aircraft made in the country in three decades. The plane, made of lightweight composite carbon fiber, will carry 70 to 90 passengers. (AP in Yahoo! Finance) All Nippon Airways ordered 15 of the aircraft, for about $600 million, with the first plane expected in 2013. The aircraft will replace Boeing planes, at an expected fuel savings of 40 percent. But the real competition will be with Brazilian jet maker Embraer and Canada's Bombardier. Japan will likely subsidize the enterprise. "Japan is a very expensive place to make aircraft," said Indoswiss Aviation analyst Jim Eckes. (The New York Times, free registration)

Attending MIT, gratis

There may be no diploma in it, but free access to world-class education is spreading. Inspired by the volunteer-based open-source software movement, the Open Education Resources movement is backed by several prominent universities in the U.S., China, Japan, and Europe. The Massachusetts Institute of Technology was the first university to post free class materials online for the public, in 2001, and it remains the poster child for the movement. MIT now offers 1,800 courses, which have been accessed by 40 million people, half of whom are self-learners. The movement opens learning to those "walled in by money, race and other issues," says Taiwanese proponent Lucifer Chu. (The Wall Street Journal)

BEST COLUMNS OF THE DAY

Cursed by your corporate home

Recent events in New York are lending credence to the "headquarters curse," says The New York Sun in an editorial. The idea behind this curse is that "smart investors" should "start bailing out" of any company "planning a fancy new headquarters." And Bear Stearns is only "the most recent example" of this hex in action. IAC Interactive has shed 50 percent of its value since moving into "fancy, Frank Gehry-designed headquarters" last summer; Time Warner has lagged since its new building opened in 2004; and The New York Times Co. fell 50 percent over the five years it built and moved into its new "paradise." Maybe News Corp. is "better off losing" its bid to build a new tower.

Spreading leisure, one cup at a time

In the "still-unfolding democratization of leisure," says the Los Angeles Times in an editorial, Starbucks has a lot to teach us about how to "sell the dream." The recent effort to "upscale the fabled coffee chain" was a "classic" example of adapting in hard times by raising the luxury threshold. Well, "hats off, or rather pinkies up," for feeding our "rich people tastes." This is the "happy flip-side of living in a country where even the poor people are fat" -- the "great upscaling" has spread "luxury and glamour we once scarcely imagined" to us "common people." Starbucks has been so successful in this that its "locus of strongest growth" is now overseas. "We wish it well."

GOOD DAY FOR: Cutting loose, after Bear Stearns Chairman James Cayne and his wife sold their entire stake in the troubled investment bank for $61 million this week. A year ago, their shares were worth more than $1 billion. Cayne started working at Bear Stearns in 1969; he is not expected to join the board of JPMorgan when it formally takes over his bank. (The New York Times, free registration)

BAD DAY FOR: New beginnings, after British Airways had to cancel about a fifth of the flights at its new Terminal 5 in London's Heathrow airport, in the second day of the terminal's chaotic opening. The $8.6 billion-terminal, which took 20 years to plan and build, is supposed to ease British Airways' crowding and baggage-handling complaints. (Bloomberg)

NOTED: Bank of America has agreed to pay Countrywide Financial president and chief operating officer David Sambol $28 million to stay on as head of the combined firms' consumer mortgage division. The combined $20 million signing bonus and $8 million in stock is 37 percent higher than what Bank of America CEO Kenneth Lewis earned last year. Sambol's pay package was unveiled yesterday in an SEC filing that also valued the Countrywide merger at $4.1 billion. (Reuters)

This column was written by Peter Weber and edited by Harold Maass of TheWeekDaily.com.