BB&T said it plans to raise $1.5 billion by selling common stock, combine it with “other funds,” and repay all the capital from the U.S. Department of the Treasury’s Troubled Asset Relief Program (TARP).

The Winston-Salem, N.C. bank also said it will cut its divided 68% to 15 cents a share, an action that will save $725 million in capital a year. Chief Executive Officer Kelly King said the dividend reduction is temporary, and making the decision was marked “the worst day in my 37 year career.”

“However, we firmly believe this action is in the long-term best interests of our shareholders and our company because of the risk and uncertainty associated with being a TARP participant… When market conditions improve and our earnings provide for an increase in the dividend, we are committed to increasing it accordingly,” King said in a statement.

Capital One said it plans to raise about $1.75 billion by selling 56 common stock shares at $27.75 a piece. The bank expects net proceeds “to be used for general corporate purposes” and repaying the Treasury.

U.S. Bancorp plans to raise $2.5 billion by selling common stock to the public with the intention of repaying the Treasury with the proceeds. The Minneapolis-based bank also said it may offer medium-term notes in a benchmark amount in a public offering.

KeyCorp filed with regulators a plan to offer up to $750 million in common shares to raise capital.

Disdain for Government’s Eye

On Friday, the government’s stress test revealed that these banks are four of 10 that need to raise more capital if they were to survive a prolonged deterioration of the U.S. economy.

U.S. Bancorp borrowed $6.6 billion from TARP, Capital One took $3.55 and BB&T received $3.1 billion. In taking the billions in emergency loans, the banks also agreed to have tighter government control of their operations – including clamping down on executive pay.

The capital-raising plans – combined with the previously announced plans by Citigroup Inc. (NYSE: C), Morgan Stanley (NYSE: MS) Wells Fargo & Co. (NYSE: WFC) to pay back TARP money – show just how much these banks disdain working on the government’s dime and under the government’s eye. And it shows that they’re willing to further suppress their stock value and possibly upset their shareholders to break the government’s chains.

“Rational, objective lending is one of the most important purposes of the banking system, and when you inject Congress and the administration into it, it effectively politicizes the process, which is not healthy,” BB&T’s King told Reuters.

Source: BB&T, Capital One, U.S. Bancorp and KeyCorp Planning Stock Sales to Raise Capital, Repay TARP

According to the deal, TiVo users will be able to rent Blockbuster’s 10,000 titles for $1.99 and $3.99, and purchase movies for between $14.99 and $19.99. Blockbuster will also sell Tivo DVRs in its stores and on its Web site.

The move shows Blockbuster is starting to understand what Netflix and Amazon.com Inc. (AMZN) have all along: It’s cheaper and more profitable to chase the customer instead of building stores and waiting for the customer to walk in during business hours.

It’s also the second time Netflix beat them to the punch. Its top rival began renting films on TiVo last year and has developed streaming video on its Web site and through Microsoft Corp.’s (MSFT) Xbox 360 video game console.

This time – unlike Netflix – Blockbuster’s TiVo offerings will be available a few weeks after they arrive in rental stores, but before they reach pay-per-view audiences.

“You will see us in a large number of other devices going forward,” Kevin Lewis, senior vice president of digital entertainment at Blockbuster, said.

Lewis added that the company also plans to sell its movies via Apple Inc’s (AAPL) products.

“We need to be in the normal places that consumers want to watch movies,” he said.

Shareholders Happy… For Now

More than ever, Blockbuster needs a better business model – and fast. Last quarter, the movie-rental chain posted a net loss of  $359.8 million, or $1.89 per diluted share, while taking a $435 million non-cash charge “for the impairment of goodwill and other long-lived assets.”

Blockbuster’s shares dipped as low as 13 cents early this month when a report surfaced that the company hired Kirkland & Ellis LLP to advise a possible bankruptcy filing.

Chief Executive Officer Jim Keyes didn’t refute the report outright, but rather misdirected it, saying that bankruptcy is “not our objective,” Bloomberg reported.

“We have retained expertise both on the legal side and the investment-banking side to very aggressively pursue our refinancing alternatives,” Keyes said.

Keys said he has support from his investors, including Mark Wattles, founder of rival Hollywood Entertainment Corp., who took a 5.7% equity stake in Blockbuster as a sign of his confidence in the industry and Blockbuster’s financial stability.

“I was pleased to find he is a strong believer in our industry,” Keyes said. “We didn’t have any strategic discussions. He just emphasized his confidence in the direction of the company.”

But there’s one shareholder who demands that his actions and opinions about the company’s direction be watched: Billionaire Carl Icahn, who owns an 8.7% stake in Blockbuster, making him the company’s largest shareholder.

Icahn famously, and successfully, led the charge to dethrone Yahoo! Inc. (YHOO) co-founder Jerry Yang from his job as the company’s Chief Executive Officer. Icahn – upset with Yang’s performance – threatened to seek control of the board and resuscitate takeover talks with Microsoft.

Icahn ultimately won the battle, with Yang stepping down and Yahoo selecting Carol Bartz, chairwoman of Autodesk Inc. (ADSK), as his replacement a few months later.

Icahn did not get his ultimate wish, however, as Microsoft did not succeed in taking the company over.

Source: Blockbuster Teams with TiVo Go Global to Escape Extinction

China also lowered its deposit rate by the same amount and reduced the proportion of deposits lenders have to hold as reserves by 0.5 percentage points to 15.5%, Bloomberg reported. All rate cuts will take effect Tuesday.

China’s slow burn of its interest rates is a calculated response to falling numbers across its board: gross domestic product could fall as low as 5% next year, way down from the 11.7% growth in 2007; exports fell for the first time in seven years last month; imports and manufacturing numbers also fell.

Unemployment figures are getting ugly, too. So far, the global financial crisis has taken 4 million city jobs from migrant workers and pushed urban unemployment up to 9.4%, the Chinese Academy of Social Sciences estimated last week. The result is rising gang violence and increased police measures and surveillances in cities hardest hit, Reuters reported.

China is also facing a dangerous decline in inflation, which limped at 2.4% annual pace in November, its fourth consecutive month-to-month drop and a sharp drop from the 4.0% posted in October, its National Statistics Bureau reported two weeks ago.

“The surprise is how small the move is,” Mark Williams, an economist with Capital Economics in London, told Bloomberg. “There’s been a sudden very rapid deterioration in all China’s economic data over the last 8 to 12 weeks.”

Last month, China cut interest rates by 1.08 percentage points, its biggest reduction in 11 years.

Also last month, China announced a massive $586 billion economic stimulus plan that will pump money into low-income housing, water and energy projects, airports, disaster relief and new railroads for the next two years.

“China understands that it’s gaining importance in the world economy and that it’s going to participate in that process,” said Keith Fitz-Gerald, Money Morning’s investment director and a former professional trade advisor who’s spent more than two decades focusing on investment opportunities in China, Japan and the rest of the Asia region.

“Many experts will see this as just a ‘bailout’ that’s directed at Chinese infrastructure projects, Chinese technology companies and at holding the global financial crisis at bay,” Fitz-Gerald said. “But the real message here is that Beijing is going to pull out all the stops to ensure that its economy does not falter. And that’s because China realizes that it’s become the super glue that’s holding the rest of the planet together.”

Source:Bank of China Tries to Spur Economy with Fifth Rate Cut in Three Months

Yang was elected CEO in June 2007, his second go-around at that post. Since then, Yahoo’s market value has fallen by more than $20 billion, according to Bloomberg.

To be fair, Yahoo was already losing its market share to Google Inc. (GOOG) and a healthy percent of its share value as a result.

But Yang was brought back to fix that.

There was a deep feeling within Yahoo’s ranks that Yang wasn’t fit to continue leading the company out of the mire – or least into a profitable merger/acquisition situation – because he had burned too many bridges trying to get what he felt was the fair value of Yahoo’s shares.

In the year and a half he ran the show, Yang sternly rejected several takeover offers from Microsoft, including a $47.5 billion bid that amounted to $33 a share. The offer valued Yahoo’s share at a 62% premium at the time.

This led to a proxy battle instigated by board member Carl Icahn, who wanted to oust Yahoo’s board of directors and replace it with candidates of his choosing. Icahn – it should be noted – favored a Yahoo partnership with Microsoft over Google.

Earlier this month, Google walked away from a plan announced in June to sell advertisements on Yahoo’s pages after the Justice Department threatened to block the deal on antitrust grounds.

Google already has more than 70% of the search-engine driven advertising market. Yahoo has about 10%, according to BusinessWeek. For Yang, it was a chance to revive falling sales, as profit has dropped in 10 of the last 11 quarters.

And that’s caused the company to shed a lot of dead weight.

Last month, it announced 1,500 job cuts. And, Scott Moore, the senior vice president in charge of the company’s media group, recently announced he, too, is leaving.

In addition to Moore, Yahoo shed five top executives this past summer: Jeff Weiner (executive V.P. of the network division), Brad Garlinghouse (who oversees e-mail and instant messaging), Vish Makhijani (general manager of web search), Qi Lu (top engineer for search marketing) and Joshua Schachter (founder of social bookmarking site, delicious).

So Now What?

Instead of first saying that Yang is stepping down, Yahoo’s news release begins by announcing it has begun a search for a new CEO.

Yahoo Chairman Roy Bostock said the company is searching internally and externally for candidates, and is being aided by executive search firm Heidrick & Struggles.

“Jerry and the Board have had an ongoing dialogue about succession timing, and we all agree that now is the right time to make the transition to a new CEO who can take the company to the next level,” Boystock said in the release.

Some of those candidates include Yahoo President Susan Decker. Other names floated include Jonathan Miller, the former chairman of AOL; Dan Rosensweig, once Yahoo’s operations chief; and Meg Whitman the former chief of Internet auctioneer EBay Inc., Bloomberg reported citing UBS analyst Ben Schachter.

Whoever gets the job is getting a difficult one with high expectations.

But one could argue that Yang’s follies lowered expectations. At this point, it’s understood that Yahoo can’t unseat Google as the world’s top search-engine advertiser – at least on its own.

Many board members and shareholders wanted Yang to sell Yahoo to Microsoft. If not that, then find another partnership to gain at least some traction against Google.

Before Yang’s departure, Yahoo’s shares dipped to $9.75, their lowest level since 2003. And on top of all of Yahoo’s problems, the global stock market is bracing for a cold year.

There’s a good chance that the role of Yahoo’s next CEO won’t be leading the company out of its mess, but instead wave the white flag in front of a company that can.

Source: Yang Steps Down, Yahoo CEO Search Commences