Financial life in a big town

The ousted chief of Olympus, the Japanese camera-maker under investigation for hiding investment losses for years, is confident about making a comeback _ a return he vows will clean up the company’s scandal-tainted management for good.

Michael Woodford, the former President and Chief Executive at Olympus Corp., said Thursday he was lining up investor support and talking to other “influential people in the Japanese establishment” for his return to the company.

Woodford, in town this week for such meetings, declined to give specifics, saying the discussions were “delicate.” But he was clearly upbeat about the prospects, noting he had enough support to call a general shareholders’ meeting _ a key move for managerial change.

“I wouldn’t be doing this. I wouldn’t be putting myself through this enormous physical and emotional effort if I didn’t think it could be successful,” he told The Associated Press, weary but flushed from the bustle of reading email from Olympus employees cheering him on.

“This is uncharted territory. You have the world looking at this story,” he said at a Tokyo hotel.

The deception at Olympus, dating back to the 1990s, to hide 117.7 billion yen ($1.5 billion) in investment losses became known only when Woodford blew the whistle. He questioned exorbitant fees for advice on the acquisition of British medical equipment maker Gyrus Group and other expensive acquisitions in 2008.

Woodford recalled that he thought the Gyrus purchase was unwise and unneeded at the time, but said he never dreamed it involved anything illegal.

Woodford, a 51-year-old Briton and a rare foreigner to lead a major Japanese company, was fired in October after confronting Olympus directors.

Woodford is demanding the resignation of the entire board, including President Shuichi Takayama, who replaced him and initially declared all the spending as legitimate in a news conference.

“It’s offensive to common sense,” said Woodford.

The battle over who will lead the camera and medical equipment maker and its 40,000 employees could come to a head at the next shareholders’ meeting. Takayama said Thursday that might be held in March or April.

Olympus met its deadline to avoid being removed from the Tokyo Stock Exchange by filing corrected earnings for the April-September first half and for the past five fiscal years on Wednesday.

But it is still under a criminal investigation, and could be delisted later on.

Olympus appointed three outsiders to a new reform committee Thursday to beef up governance and present a plan to shareholders. The committee is in addition to an earlier panel announced by Takayama, which is investigating the scandal.

The Olympus fiasco has prompted soul-searching in Japan Inc. on living up to global standards. Ruling and opposition legislators met with Woodford earlier this week to hear his ideas about governance.

The company’s loss of 32.3 billion yen ($414 million) for the first half of the fiscal year, through September, a reversal from a 3.8 billion yen profit the same period a year earlier, was mainly from the economic downturn and losses from Thai flooding, Takayama said.

“Capital adequacy ratio is a big problem, and we are considering how we can overcome it,” Takayama told reporters. “We are considering various options, including a capital tie-up and operational or sales tie-ups.”

Woodford said he was opposed to alliances, which he said would likely compromise Olympus’ independence, and he had better ways to get capital to shore up its hobbled balance sheet.

“Because of the strong cash flows and profitability of the medical business, we could raise funding from additional sources without losing our sovereignty,” he said.

Olympus should focus on core businesses _ medicine, microscopes, industrial products and cameras and other consumer products _ and stop acquiring unrelated companies, such as pet food, plastic plates and cosmetics, he said.

He promised a more transparent Olympus, with more outside board members. He said he was preparing the candidates already.

Olympus stock, which plunged after the scandal hit, has recouped some of the losses but dropped 21 percent to close at 1,041 yen Thursday.

A third-party panel set up by Olympus, including a former Japanese Supreme Court judge, released the findings of an investigation earlier this month, which said top executives who were “rotten to the core” had orchestrated the accounting cover-up spanning three decades.

The fees for financial advice and overvalued acquisitions were part of an elaborate deception utilizing overseas banks and several funds to keep the massive losses off the company’s books, according to Olympus. Japanese magazine Facta was first to report the dubious money.

It is still unclear if Woodford will manage a comeback.

Some people, such as former board member Koji Miyata, see him as a hero and have begun an online campaign to bring back Woodford.

Miyata says Woodford, a 30-year employee at Olympus, was groomed from the start to lead the company.

“There are a lot of senior managers who might be good for the No. 2 post, but someone who is destined to be No. 1 is totally different,” he said in a recent interview with The AP.

“He has principle. He is uncompromising,” he said of Woodford, whom he has known for 25 years. “He isn’t swayed. He doesn’t avoid confrontation. He sticks to his guns that what is wrong is simply wrong.”

Woodford, who sees himself as a “salaryman,” denied it was his nationality that might make him Olympus’ savior.

“I’m sure there are some Japanese people who could do similarly to me,” he said. “I know the company. I’ve worked there. It doesn’t matter if I’m English or Japanese, in that sense.”

Source

Plastics maker Spartech Corp. cut its loss for the fourth quarter in half.

Clayton-based Spartech reported a loss of $27.7 million in the fourth quarter that ended Oct. 29, or 90 cents a share, compared to a loss of $55.7 million, or $1.81 a share a year ago.

Spartech produces plastic sheet, compounds and packaging products. Sales of higher margin products for transportation and construction customers helped Spartech’s sales increase 13 percent in the quarter, to $293.2 million, compared with $259.6 million a year ago.

For its 2011 fiscal year, Spartech posted a loss of $21.1 million, compared with a loss of $50.4 million in fiscal 2010.   

Source

Two executives at MF Global are seeking to distance themselves from an estimated $1.2 billion in customer funds that has gone missing, according to their prepared testimony for a Senate hearing.

Bradley Abelow, the president and chief operating officer, and Henri Steenkamp, the chief financial officer, both say they don’t know where the money is or why it is missing.

Abelow says he cannot explain what happened to the money without access to MF Global documents, which a trustee now controls.

Steenkamp says he had no direct involvement with transfer of funds.

Former Sen. Jon Corzine, who led MF Global as CEO until last month, told a congressional panel last week he doesn’t know what happened to the money. All three will testify Tuesday before the Senate Agriculture Committee.

Source

Working almost to exhaustion and persuading countries one by one, European leaders agreed Friday to redefine their continent _ hoping that by joining their fiscal fortunes they might stop a crippling debt crisis, save the euro currency and prevent worldwide economic chaos.

Only one country said no: Britain. It will risk isolation while the rest of the continent plots its future.

The coalition came together in a marathon negotiating session among the 27 European Union heads of government _ hard bargaining that began with dinner Thursday evening and ended after 4 a.m., when red-eyed officials appeared before weary journalists to explain their proposed treaty.

It was a major step forward in the long, postwar march toward European integration. It was two decades ago, on Dec. 9 and 10, 1991, that European negotiators drafted a treaty in Maastricht, Netherlands, to unite their politics, create a central bank and, one day, invent a common currency.

The agreement _ with 23 countries in favor and three more saying they are open to the idea _ would force countries to submit their budgets for central review and limit the deficits they can run.

A crisis over sovereign debt that consumed Greece and spread to Ireland, Italy, Portugal and Spain threatened to explode into a worldwide financial crisis capable for forcing the global economy into recession.

“This is the breakthrough to the stability union,” German Chancellor Angela Merkel said. “We are using the crisis as an opportunity for a renewal.”

To prevent excessive deficits, countries in the treaty will have to submit their national budgets to the European Commission, the executive body of the EU, which will have the power to send them back for revision.

They must also bring their budgets close to balance. Except in special circumstances, the budget deficit of a country must not exceed 0.5 percent of gross domestic product, the amount of goods and services produced by its economy. An unspecified “automatic correction mechanism” would punish the rule-breakers.

Germany and France insist that fiscal union is the best way to regain market trust, badly shaken by the escalating financial crisis. Most economists think it will not be enough.

They say the euro countries need to have enough money on hand to guarantee everyone can pay their debts. Euro leaders put off until March a decision on whether to provide money on top of a euro500 billion, or $668 billion, bailout fund for euro countries.

European leaders did agree to add euro200 billion to the International Monetary Fund to help ailing countries.

Only 17 of the 27 European Union countries use the euro currency, and its stability has been threatened by the massive national debts of some of those 17. All but two of the non-euro countries _ Britain and Denmark _ are committed to adopting it eventually.

The countries that use the euro found they had friends among those that do not. At least six and as many as nine non-euro countries are willing to bind themselves to the euro countries in a pact aimed at having their economies converge.

Britain said no for two reasons: Prime Minister David Cameron’s Conservative Party includes a strong anti-EU element, and Cameron, despite trying deep into the night, failed to win an exemption from regulation for the British financial industry.

The other leaders would have none of it: Bankers and lack of regulation are viewed on the continent as a prime cause of the financial crisis.

“What was on offer is not in Britain’s interest, so I didn’t agree to it,” Cameron said. “We’re not in the euro, and I’m glad we’re not in the euro. We’re never going to join the euro, and we’re never going to give up this kind of sovereignty that these countries are having to give up.”

Britain, which prides itself on its fierce independence, joined the then-European Economic Community in 1973 _ only after French President Charles de Gaulle, who had vetoed the U.K.’s membership along with Germany’s leader, fell from power.

Since then, it has retained a frosty skepticism toward the ambitions of France and Germany to forge ever closer political and fiscal ties. It eschewed both the euro single currency and the Schengen open borders policy, fearful of losing power to determine its own fate.

French President Nicolas Sarkozy blamed the British leader for scuttling what could have been an EU-wide treaty. He said Cameron’s exemptions for British finance “seemed to us unacceptable.”

Some countries may face parliamentary opposition to the pact, which would allow for unprecedented oversight of national budgets.

Stocks and the euro climbed on the news of the treaty, even though it offers only a long-term solution and leaves many details to be worked out. Stocks rose 3.4 percent in Italy, 2.5 percent in France and almost 2 percent in Germany. In New York, the Dow Jones industrial average rose 1.5 percent and vaulted back over 12,000.

Borrowing costs for European countries fell, but only slightly, a sign of cautious confidence from the bond market. The yield on the benchmark Italian government bond fell to 6.33 percent, down about 0.05 percentage point. A yield above 7 percent is considered unsustainable.

One by one through the long night, the leaders of the 17 euro nations persuaded the non-euro nations to come along.

Hungary, the Czech Republic and Sweden said they would need to consult their parliaments. The six other EU countries that use currencies other than the euro _ Denmark, Poland, Bulgaria, Romania, Latvia, Lithuania _ agreed right away. The leaders want the treaty written by March.

The countries hope to help European nations tame their long-term debt. Such an agreement is considered necessary before the European Central Bank and other institutions commit more money to lower the borrowing costs of heavily indebted countries like Italy and Spain.

How exactly that will happen remains unclear. Financial markets around the world had hoped the ECB would buy massive amounts of national bonds, flooding the market with money and lowering borrowing costs. But ECB President Mario Draghi dashed those hopes Thursday and said there was no plan to buy more bonds.

On Friday, Draghi called the treaty agreement “a very good outcome for the euro area, very good.

“It is going to be the basis for much more disciplined economic policy for euro-area members,” he said. “And certainly it is going to be helpful in the present situation.”

A breakup of the euro would have disastrous consequences. It would almost certainly trigger a financial crisis while banks figured out who owned what and while countries leaving the union awkwardly transitioned back to their own sovereign currencies.

Such a disorderly exit could cause banks to become fearful and stop lending money to each other. In 2008, a credit crisis followed the bankruptcy of Lehman Brothers investment house and triggered a meltdown in the stock market.

Source

Federal authorities are investigating a suspected embezzlement of potentially millions of dollars from a St. Louis area medical practice, according to a source close to the investigation.

The FBI and U.S. attorney’s investigation comes on the heels of the termination by Metropolitan Urological Specialists PC of Dunard Morris, who until recently served as its chief executive. The investigation focuses in part on whether money was diverted from the firm’s bank loans, the source said. The amount of missing money isn’t known but could be millions, the source said.

The medical practice also maintains that Morris subleased a $5,475-a-month luxury apartment using company funds without approval of the firm’s board of directors.

During the last two years, the company has shown signs of cash flow problems, including the buildup of about $1 easy payday loans.3 million in delinquent federal, state and local taxes, interest and fees, St. Louis County records show.

Asked about the federal investigation, U.S. Attorney Richard Callahan said Thursday, “I don’t want to prejudge anything, but it is a matter that has our interest.”

Morris did not return phone calls Thursday. One of his lawyers, Patrick Smith at DLA Piper law firm in New York, has declined to comment. “I’m not authorized to talk with you,” he said. Morris’ local counsel, Richard Sindel, declined to comment.

Metropolitan’s attorney, Mayer Klein, said the medical firm “terminated” Morris in mid-September but would not detail why. He did confirm that the company is investigating the missing money.

“There were some concerns with regard to prior management, and we’re working with everyone involved

Stocks rallied Wednesday on hopes that a deal to save the euro would be agreed at a summit of European leaders at the end of the week.

Investors are betting EU leaders will agree on Friday a strategy that will allow the 17 countries that use the euro to link up their economies more closely. The tighter budget rules, proposed by the leaders of Germany and France, could then allow the European Central Bank to play a bigger role in solving the crisis by buying up the bonds of the most-imperiled countries.

“The market is becoming optimistic that the ECB will aggressively step up its action as both a reward for political action or in reaction to the threat of recession,” said Jane Foley, an analyst at Rabobank International.

Ahead of Friday’s meeting, the ECB is expected to cut interest rates on Thursday, possibly by as much as half a percentage point. If it did sanction such a big move, then the rate would fall to 0.75 percent and below the 1 percent that had previously been considered the floor.

Lower interest rates would help the eurozone economy, which has been sliding back toward recession under the weight of the debt crisis that threatens to spread from the relatively small economies such as Greece to much-bigger Italy and Spain.

Concerns that this could happen have eased this week. That was most evident in the performance of Italian and Spanish bond prices. Both have recovered this week, sending their yields _ the interest rates the countries would pay to borrow on markets _ down to more manageable rates. The yield on Italy’s ten-year bond was at 5.75 percent on Wednesday, way down from the 7 percent level it had traded at in recent weeks.

In Europe, Germany’s DAX rose 0.4 percent to 6,051 while the CAC-40 in France rose 1 percent to 3,212 paperless payday loans. The FTSE 100 index of leading British shares was 0.4 percent higher at 5,593.

Wall Street was poised for a solid opening too _ Dow futures were up 0.5 percent at 12,176 while the broader Standard & Poor’s 500 futures rose 0.6 percent to 1,262.

The euro was trading flat on the day at $1.3400.

U.S. Treasury Secretary Timothy Geithner said Wednesday he is very encouraged with the progress Europe is making in coming up with a plan to shore up the euro in the wake of a crippling debt crisis. Geithner’s comments to reporters followed a meeting with French Finance Minister Francois Baroin on the second day of his whirlwind trip through Europe.

“A more upbeat tone from Geithner in his support for Europe’s efforts to unify fiscal policy across the eurozone has been well received by investors,” said Jordan Lambert, a trader at Spreadex.

Earlier in Asia, Japan’s Nikkei 225 jumped 1.7 percent to end at 8,722.17 _ its highest close in a month. South Korea’s Kospi added 0.9 percent to 1,919.42 and Hong Kong’s Hang Seng gained 1.6 percent to 19,240.58.

Mainland Chinese shares edged higher, with the benchmark Shanghai Composite Index climbing 0.3 percent to 2,332.73, ending a five-session losing streak.

Oil prices meanwhile edged higher alongside stocks _ benchmark crude for January delivery was up 51 cents to $101.79 a barrel in electronic trading on the New York Mercantile Exchange.

____

Pamela Sampson in Bangkok contributed to this report.

Source

Twelve former employees of the St. Louis Post-Dispatch sued the newspaper today for fraudulent inducement and negligent misrepresentation, alleging the newspaper reneged on a promise to pay for health insurance for life.

The former employees sued the newspaper, publisher and president Kevin Mowbray and Astrid Garcia, vice president of human resources and labor operations, in St. Louis Circuit Court.

The Post-Dispatch denied the allegations.

“The St. Louis Post-Dispatch believes there is no basis for these allegations and that we will be vindicated in court,” spokeswoman Tracy Rouch said in a statement.

The former employees who filed suit are: Rayburn Jordan, Melinda Krummrich, Mary Delach Leonard, Samuel Leone, John Linstead, Linda Lockhart, Odell Mitchell Jr., John Naunheim Jr., Carolyn Olson, Kathleen Richardson, Suzanne Tarrant and Larry Williams.

The former employees allege in the lawsuit that they agreed in 2007 to voluntarily early retirements from the newspaper with benefits including payment for health insurance for life payday loans for bad credit.

However, all of the employees were notified in late 2010 by the newspaper’s parent company, Davenport, Iowa-based Lee Enterprises, that the St. Louis Post-Dispatch would stop paying for their health insurance effective Jan. 1, 2011.

“Had they known that the Post would renege on their promise for lifetime health insurance benefits, my clients would not have accepted the early retirement offer and buyout,” the former employees’ attorney, Staci Yandle, said in a statement.

The former employees are seeking an unspecified amount of compensatory and punitive damages.

Source

Ask the people who invest billions for a living to name their favorite picks for 2012 and you’ll get a smorgasbord worthy of a holiday party: Brazilian stocks, U.S. junk bonds, and government debt from Colombia. Ask them what they dislike and they’ll name one of the top-performing investments this year: U.S. government bonds.

Investors can rattle off a long list of reasons to avoid Treasurys. They pay next to nothing and are bound to plunge in value whenever interest rates begin climbing from their historically low levels. It seems nobody likes Treasurys, yet everybody keeps buying them anyway.

“Our least favorite asset is Treasurys,” said Christine Hurtsellers, chief investment officer for fixed-income at ING Investment Management during a recent press briefing. “We still have a lot, but it’s hard to make the argument for them.”

It’s a tricky problem for bond-fund managers at a time when everyday Americans are trusting them with more of their savings. Among investors, there’s a solid belief that Treasury prices must fall and push interest rates up at some point. But those who have bet on a Treasury market collapse this year got burned.

Bill Gross, the bond-world version of investment sage Warren Buffett, dropped nearly all Treasury holdings from the fund he manages at Pimco in early 2011. He argued that if Republicans held up lifting the government’s borrowing limit, the country would risk default. Borrowing rates would spike as the world’s investors dropped U.S. government debt, just as they have in Europe.

Most of what Gross predicted came true. The debt-limit fight raised worries about default and led to Standard & Poor’s taking away the country’s AAA credit rating in early August. But instead of spiking, U.S. borrowing rates plunged as traders sold everything else to buy U.S. government debt. The race into Treasurys helped drive the entire bond market up 3.8 percent from July to September. Gross got the big picture right but his big bet against Treasurys didn’t pan out. Pimco’s Total Return Fund lost 1.2 percent, its worst quarterly performance in three years.

It’s been a recurring story since the financial crisis hit in 2008. For three years running, pundits have predicted that investors will eventually refuse to finance the U.S. government’s $15 trillion in debt and the Treasury market will collapse. But worries over the U.S. economy and the perilous state of Europe’s financial system keep drawing banks and money managers from around the world back to the U.S. dollar and Treasurys.

That demand continues to push U.S. government bond prices up, the main reason why the Treasury market has returned 8.5 percent this year, despite microscopic yields, according to Bank of America-Merrill Lynch data. The benchmark for stock market funds, the S&P 500 index, has returned less than 1 percent, including dividend payments, and that’s with a 7.4 percent surge over the past week.

“It’s been a pretty strong year for bonds,” said Michael Gitlin, director of fixed income at T. Rowe Price, “and it’s largely a result of Treasurys.”

Judging by the gauges money managers usually check before making a move, buying Treasurys still looks like a bad idea. Consider this sample:

(asterisk) The benchmark 10-year Treasury pays just 2 percent a year. Take inflation into account and the payout on Treasurys equals negative 1.5 percent, what finance types call the real rate.

(asterisk) Treasury yields pay less than top-grade corporate bonds at 3.7 percent and even less than the stock market’s 2 percent dividend yield.

“My colleagues say there’s little value in 10-year (Treasurys) and I’d agree,” Gitlin said. “People have been saying there’s a fixed-income bubble. No, there’s a Treasury bubble.”

If there’s so little to like about U.S. government bonds, why are the world’s investors still buying Treasurys instead of dumping them? In a word, it’s Europe.

As the crisis seemed to spread from country to country this year, the world’s traders plowed more money into Treasurys. The higher the demand for U.S. debt, the lower the interest rate, or yield. So when it looked like Greece might default on its debts earlier this year, the yield on the 10-year Treasury note sank below 3 percent. And when attention turned to Italy and its government debts the yield sank even further, dipping below 2 percent in September. The shift of money out of Europe and into the U.S. has pushed Europe’s borrowing rates to dangerous levels while causing U.S. interest rates to sink.

“You can hate the budget situation and hate the low yield, but if there’s a panic it’s the asset that outperforms,” said Robert Robis, head of fixed-income strategy at ING Investment Management.

A good reason to hold Treasurys, in other words, is that the Treasury market remains the world’s favorite hiding spot. So, for many fund managers Treasurys aren’t exactly an investment. Buying Treasurys is like taking out an insurance contract, Robis said. They’re protection against global financial trouble.

The ING Global Bond fund, for instance, has 15 percent of its $641 million in Treasurys, less than the 20 percent in the benchmark Barclay’s bond index. Robis said having none would be like betting European governments will come to a quick solution to the region’s debt crisis and that the U.S. economy will soon recover its health.

“There’s still a need to hold Treasurys,” Robis said. “Just don’t expect to make a fortune off them.”

Source

People are finally replacing the cars and trucks they held onto during the economic slump, giving a boost to sales at Chrysler, GM and Nissan in November.

Chrysler’s sales rose 45 percent from a year earlier, while GM’s climbed 7 percent and Nissan’s 19 percent. The three companies were among the first to report U.S. sales of new cars and trucks on Thursday.

Dealers say they’ve had strong floor traffic all month, with surprisingly high sales for a month that’s normally lackluster because of colder weather and holiday distractions. But this November, buyers went to showrooms because of good deals on leases, more confidence in the economy and a need to trade in older cars, says Ryan LaFontaine, a partner in a six-dealer chain in Michigan.

The activity underscores projections that Americans bought new cars at the fastest pace in more than two years as they replace aging vehicles. Analysts expect that the annual sales rate for November could range between 13.3 million and 14 million cars and trucks. That is far better than the rate of 12.6 million through the first 10 months of the year.

November sales also could approach the 14.1 million annual rate from August of 2009, when the government offered big rebates for drivers to trade in their gas-guzzling clunkers.

Sales at Chrysler Group LLC last month were led by the Jeep Compass small SUV, which had a nearly ten-fold increase in sales. Jeep brand sales rose 50 percent, while Chrysler brand sales nearly doubled on strong demand for its 200 and 300 sedans. But Chrysler also raised its incentives to nearly $3,300 per vehicle, up 6 percent from October.

At General Motors Co., buyers snapped up small cars and pickup trucks. Sales of the Chevrolet Cruze compact rose 54 percent, while the Silverado pickup, GM’s top-selling vehicle, saw sales jump 34 percent.

“We are seeing a broad spectrum of customers return to the market,” says Don Johnson, GM’s U.S. sales chief.

At Nissan, the tiny Versa led sales with a 38 percent increase, but SUV and truck sales also rose 32 percent.

People have been holding onto their vehicles in an unstable economy, and the rate of cars that are scrapped has surpassed sales for several years. The average age of a car on U.S. roads is a record 10.6 years, according to the Polk auto industry research firm.

The sales increases at the three car companies also reflect consumer confidence for November, which rose to the highest level since July, according to the Conference Board. October’s number was the lowest since the recession.

With the increased confidence, car buyers are releasing pent-up demand, said Larry Dominique, executive vice president of data for the TrueCar.com automotive website. “I think consumers are just starting to say `it’s time to start spending money again,’ ” he said.

TrueCar expects November sales to be nearly 12 percent higher than a year earlier, capping six months of sales gains compared with the same month in 2010. Last November, the annual sales rate was only 12.3 million as the auto industry was just starting to recover from the economic meltdown.

Sweet lease deals, helped by low interest rates and high used-car values that make leased vehicles worth more when they’re returned, also are fueling sales. GM, for instance, is offering a Cruze lease $169 per month for 39 months. According to TrueCar, the average industry spending on incentives such as leases and low-interest loans was $2,534 per vehicle in November, up 2.5 percent from October.

Source

Bistate wage gender gap

The wage gap between men and women yawns wider in Missouri and Illinois than elsewhere, according to new data from the Bureau of Labor Statistics.

The average full-time woman worker in Missouri made just 75 percent of the average man’s earnings in 2010. Women in Illinois did a little better at 78 percent. The national average is 81 percent.

The bureau doesn’t blame the gap on state-to-state differences in sexism. Instead, it cites “variations in the occupations and industries found in each state and the age composition of each state’s labor force.”

In Missouri, the median weekly wage stood at $813 for men and $616 for women. Illinois was at $814 for men and $634 for women. The national average is $824 for men and $669 for women. (Jim Gallagher)

Ralcorp in ‘buy’ mode