World Economic

Billionaire investor Carl Icahn says he wants to buy Commercial Metals Co. for about $1.73 billion and says he has no confidence in its board and management.

The offer of $15 per share represents a 31 percent premium over the scrap metal processor’s closing stock price on Friday. The Irving, Texas, company’s shares jumped 23 percent to $14 in morning trading.

Icahn already owns about 10 percent of the company.

Icahn, who owns PSC Metals Inc., says in a letter to Commercial Metals’ board that he wants to combine the company with his existing metals recycling businesses and sell off the rest of its assets check cash advance. A new management team would be appointed immediately.

Icahn plans to nominate three people to Commercial Metals’ board at its 2012 annual shareholder meeting.

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Don and Louise Beauchamp owned a home in London, Ont., and during the six years they lived there they renovated their basement, first using it as a playroom and later as a guest room.

They sold the home in November, 2007 and a week before closing in early 2008 the basement flooded. They paid $1,649 to dry out the rug and replace the underpad, but did not tell the buyers. The Beauchamps thought this was a “one off” occurrence and since they had fixed the problem there was nothing to disclose.

A few weeks after closing, the basement flooded again and it ended up costing Adam and Yogi Soboczynski, the buyers, more than $20,000. They were convinced the basement had flooded before and sued, arguing that fact should have been disclosed to them.

The facts of the case are interesting. When the buyers made their offer, they asked the Beauchamps to complete a Seller Property Information Statement (SPIS) which they did. The Beauchamps said they had never had water problems in the basement. But for some reason, the form was not attached to the accepted offer.

The offer was also subject to a satisfactory home inspection, which was completed with no problems noted.

An engineer hired by the Soboczynskis testified in court that flooding had probably occurred during the previous seven years, based on his review of the property. The Beauchamps brought in relatives who had stayed in the basement. All claimed there was never any indication of water problems. In addition, the Beauchamps had kept their computer in the basement for years.

The offer also included a standard clause called the “Entire Agreement Clause” which says that people who sign contracts can only rely on things that are included in the agreement. If it is not included, then it means that it did not matter to them.

In a decision released November 17, the judge preferred the evidence of the relatives over the expert. He agreed the flooding was a one off incident and did not have to be disclosed to the buyers.

The judge looked at other cases where sellers had been held responsible when completing the SPIS. In all those cases, he noted that one of the main reasons for liability was that the SPIS form had been attached to the agreement. As a result, if the sellers were dishonest or careless in completing the SPIS and the buyers relied on it, they could be held responsible.

In this case, the SPIS was not attached to the agreement, so the judge decided the buyers could not rely on it. Since the buyers could not prove that the sellers deliberately deceived them, the sellers won the case.

The lessons from this case are:

   For sellers, disclose all problems you know about. If you are not sure, err on the side of disclosure.

   If you as a seller sign an SPIS, to be safe, do not permit it to be attached to the agreement. That way, you will be protected if you made a mistake in completing it.

   Buyers should not rely on the SPIS because it is not supposed to be a warranty; it is just to be used for information purposes.

   If something matters, always include it in your home purchase agreement. Do not rely on verbal promises or advertisements.

Mark Weisleder is a lawyer, author and speaker to the real estate industry. Email Mark at mark@markweisleder.com

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Forecasters say Kenneth continues to weaken and has been downgraded to a tropical depression in the eastern Pacific.

There is no threat to land from what had been the strongest late-season hurricane in that area on record when it earlier reached Category 4 status.

The U.S. National Hurricane Center in Miami said Friday that Kenneth has maximum sustained winds near 35 mph (55 kph). The storm was centered about 1,155 miles (1,860 kilometers) west-southwest of the southern tip of Baja California, Mexico.

It is moving west at 14 mph (22 kph)

There are no coastal watches or warnings in effect.

The eastern Pacific hurricane season ends Nov. 30.

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Illegal eavesdropping was widely practiced by Britain’s tabloid journalists, producing stories that were both intrusive and untrue, a lawyer for several phone hacking victims said Wednesday.

Mark Lewis told a U.K. media ethics inquiry that phone hacking was not limited to Rupert Murdoch’s News of the World tabloid, which the media mogul shut down earlier this year as outrage grew over the hacking scandal.

Lewis claimed that listening in on voice mails was so easy that many journalists regarded it as no more serious than “driving at 35 mph in a 30 mph zone.”

“In a way, I feel sorry for the News of the World, or certainly the News of the World’s readers,” Lewis said. “Because it was a much more widespread practice than just one newspaper.”

He said the News of the World got caught because it hired a private investigator, Glenn Mulcaire, who kept detailed records of his snooping assignments. Mulcaire and News of the World reporter Clive Goodman were jailed in 2007 for hacking into the voice mails of royal aides.

“The fact that evidence doesn’t exist in written form doesn’t mean to say that the crime didn’t happen,” Lewis said.

Lewis said when a News of the World reporter was arrested for phone hacking in 2006, he had a “eureka moment” about the source of a false story concerning two of his clients.

The story alleged a romantic relationship between soccer players’ association chief Gordon Taylor and lawyer Joanne Armstrong, with whom he had been photographed having lunch. Taylor said he believed the story was based on a voice mail message from Armstrong thanking Taylor for speaking at her father’s funeral.

The message said: “Thank you for yesterday. You were wonderful cash till payday advance.”

Lewis said a tabloid journalist “added two and two and made 84. … If it hadn’t been so sad, it would have been funny.”

In 2008, Murdoch’s News International agreed to pay Taylor hundreds of thousands of pounds (dollars) in compensation for the hacking of his phone in return for keeping quiet about the deal _ one of several attempts by the company to hush up the scale of its illegal activity.

Murdoch shut down the News of the World in July after evidence emerged that it had routinely eavesdropped on the voice mails of public figures, celebrities and even crime victims in its search for scoops.

Lewis has represented many prominent hacking victims, including the family of murdered 13-year-old Milly Dowler, whose voice mails were accessed by the News of the World after she disappeared in 2002. The girl’s parents spoke Monday before the U.K. inquiry, saying the hacking gave them false hope their daughter was still alive during the investigation into her disappearance.

Prime Minister David Cameron set up the public inquiry into media ethics and practices in response to the still-evolving hacking scandal. This week it has heard testimony from celebrities including actor Hugh Grant and comedian Steve Coogan.

Later Wednesday it will hear from the parents of Madeleine McCann, who vanished from a hotel room in May 2007 during a family vacation in Portugal.

The inquiry, led by Judge Brian Leveson, plans to issue a report next year and could recommend major changes to media regulation in Britain.

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Stocks are plunging at midday after Congress’ latest bid to resolve the federal budget gridlock appeared to fail.

The Dow Jones industrial average is down 327 points, or 2.8 percent, at 11,469 shortly before noon Eastern. The Standard & Poor’s 500 index is down 31, or 2.5 percent, at 1,185. The Nasdaq composite index is down 67, or 2.6 percent, at 2,506.

A 12-member bipartisan panel was assigned to cut $1.2 trillion from the federal deficit by Wednesday. The panel appeared ready to admit failure on Monday no fax payday advances. That could lead to broad, automatic cuts from military and social spending.

Uncertainty about government spending drags on the economy because the private sector is growing so slowly. Traders also fear that Europe’s debt crisis might spill over, disrupting the fragile U.S. recovery.

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As retailers battle to draw customers into their stores on Black Friday, online merchants are plotting a cunning ambush

Signs of future growth in the U.S. economy and a drop in borrowing costs for embattled European countries pushed stocks higher in morning trading Friday.

The Conference Board’s index of leading economic indicators rose more than Wall Street analysts were expecting, a sign that the economy may pick up in the coming months.

Companies that rely most heavily on economic expansion to make money had the biggest gains. Hewlett-Packard Co. jumped 3.6 percent, the most of the 30 stocks in the Dow Jones industrial average. Boeing Co. and Alcoa Inc. each rose 2 percent.

The Dow was up 80 points, or 0.7 percent, to 11,852 at 11 a.m. Eastern time. The Standard & Poor’s 500 index rose 7, or 0.6 percent, to 1,222. Telecommunications and technology were the only industries in the S&P 500 index to fall.

The Nasdaq composite index rose 5, or 0.2 percent, to 2,592.

Stock indexes were also bolstered by easing borrowing costs for Italy and Spain. That is a signal that bond investors are less fearful of a default by those countries. Spain and Italy have had to pay high interest rates because bondholders fear that that they will default. Holders of Greek bonds were all but forced to take steep losses on that nation’s debt.

Europe’s debt problems are far from settled, however. Comments by German and British leaders Friday suggested that they have divergent views on how to address the debt crisis. German Chancellor Angela Merkel cautioned against expecting too much from the region’s leaders. British Prime Minister David Cameron called for “decisive action” to shore up the struggling currency union.

In corporate news, ketchup maker H.J. Heinz Co. fell 2.5 percent after it said its second-quarter net income fell almost 6 percent, although its adjusted results narrowly beat expectations. Sales in emerging markets remained strong, and price hikes in other areas helped offset lower volumes.

Retailer Gap Inc. slid 3.5 percent after its third quarter revenue came in slightly below Wall Street’s forecasts. The company said materials costs are continuing to eat into profit margins. Salesforce.com plunged 9 percent after its quarterly results came in below estimates.

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Greece was negotiating with international bankers Wednesday over the details of a euro100 billion ($135 billion) writedown of its debt, as the country’s new prime minister geared up to win a confidence vote on his coalition government.

Interim Prime Minister Lucas Papademos, a former central banker appointed after laborious power-sharing negotiations last week, is expected to easily win the vote in parliament. His government is backed by Greece’s two main parties _ the majority Socialists and the conservatives _ and a small right-wing party, and is tasked with keeping the nation out of bankruptcy.

After the vote, Papademos will meet with Charles Dallara of the International Institute of Finance, a global bank lobbying group. Dallara will also hold talks with Finance Minister Evangelos Venizelos, and Greek officials will negotiate over the phone with bankers in Paris and Frankfurt on the debt relief deal struck last month in Brussels.

“I come in a hopeful frame of mind, hoping we can move to implement the decisions taken in Brussels,” Dallara told The Associated Press. “I think we can all be hopeful with the new government in Athens.”

Greece is at the heart of a vicious debt crisis that has brought it to the brink of bankruptcy. In return for bailout loans, the previous Greek government had to force through a deeply resented austerity program, which has seen repeated tax hikes, and cuts in pensions and civil service salaries.

Since May 2010, the country has survived on installments from a euro110 billion ($150 billion) rescue loan package from its European partners and the International Monetary Fund. When it became obvious that even that sum was not enough, European leaders struck a new bailout deal on Oct. 26, worth a total euro130 billion ($176 billion). In addition, it was agreed that banks and other private holders of Greek bonds would write off 50 percent of their Greek debt holdings.

But last month’s political turmoil in Athens delayed the release of the latest loan installment for Greece, worth euro8 billion ($11 billion), without which Greece will go bankrupt before Christmas payday loans direct lenders.

The country’s creditors insist the money can only be released after Greece formally accepts the new bailout and rival party leaders sign commitments to honor it _ a demand that conservative leader Antonis Samaras has rejected.

The Ta Nea newspaper highlighted the impasse Wednesday with the front-page headline: “(Samaras’) signature is worth euro8 billion.”

Samaras told parliament the three coalition partner leaders have already committed themselves in writing to back Papademos, and to seek additional pledges is excessive.

“Not only do we back the transitional government, but we played a leading role in its formation,” Samaras said Wednesday, adding that Papademos has a specific mandate to implement the Oct. 26 deal.

Papademos was sworn in last week, replacing Socialist Prime Minister George Papandreou who stepped down days after floating a disastrous proposal to put the new debt agreement to a referendum.

While polls show popular support for Papademos’ new administration, which will govern until elections in February, Greeks remain deeply angered by 20 months of belt-tightening that have triggered a wave of general strikes and often violent protests.

On Wednesday, public electricity workers turned off the power to the country’s health ministry building in Athens for four hours to protest unpaid state bills to the utility.

Their union said the ministry owes the Public Power Corporation, or PPC, euro3.8 million ($5.1 million). out of a total euro141 million ($191 million) state debt to PPC.

The PPC union is protesting a new property tax that is being levied through household electricity bills _ with people who don’t pay facing the prospect of having their power supply cut.

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Companies paid less in October for gas, new cars and other goods, driving down wholesale prices for the first time since June. The report indicates inflation pressures are easing as the cost of oil and other commodities has declined.

The Labor Department says the Producer Price Index, which measures price changes before they reach the consumer, dropped 0.3 percent in October, after a rise of 0.8 percent in September. Excluding the volatile food and energy categories, the core index was unchanged for the first time in 11 months.

Falling energy prices drove the overall decline. Wholesale gas prices dropped 2.4 percent, while home heating oil fell 6 percent, the most in over a year.

Food prices ticked up 0.1 percent, after four months of much larger increases.

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We are citizens of the world’s only superpower, but the fate of our 401(k)s lies with the quirks, flubs and maneuverings of foreigners far away.

Last week, the Italians were our problem. The stock market dropped 3.6 percent Wednesday on worries that Silvio Berlusconi wouldn’t resign as prime minister of Italy, even though he said he would.

Then the Italian government moved closer to passing an austerity measure, and American stocks bounced back up on Thursday and Friday.

For weeks, the U.S. stock market has jumped and dumped with each twist of the European sovereign debt mess