Consumers could be hit by energy price rises of up to 40 per cent this year as
power companies struggle to maintain profitability in the face of a trebling
in wholesale gas prices.
Leading market analysts said yesterday that an increase of that magnitude
would drive average UK energy bills from £1,048 at present to £1,467 within
seven months.
John Hall, an adviser on energy issues to industrial and corporate clients
representing 15 per cent of the UK commercial gas and electricity market,
said that Britain’s six major energy suppliers would need to raise prices by
between 30 and 40 per cent this year to maintain margins.
Wholesale gas prices, which are linked to global oil prices, have increased
nearly threefold in a year from 36.35p per therm in June last year to 94.54p
yesterday. They briefly touched record highs of about 105p per therm earlier
this month. Crude oil prices have also touched a record of nearly $140 a
barrel this week.
Mr Hall said: $“Unless there is a dramatic fall in oil prices, that is the
scale of increase we are talking about to ensure that energy companies keep
their margins.”
Britain’s power companies are gearing up for a fresh round of price rises,
the first of which could come as early as next month. Mr Hall predicted that
a staggered increase, with one in the summer and another in late autumn or
early winter, assuming wholesale prices remain at current levels, is
likelier than a single increase, which would trigger a huge public outcry.
Peter Atherton, utilities analyst for Citigroup, agreed that power companies
will need to consider price rises of 30 per cent-plus this year if they
expect to maintain reasonable profit margins from retail distribution.
However, he expected that the public outcry that would result from such big
rises would lead companies to accept very low profits from their supply
businesses this year and to balance that against higher earnings from power
generation.
The warnings came yesterday as MPs accused Ofgem, the energy regulator, of
being a toothless tiger that did not do enough to help consumers in the face
of soaring energy prices.
At a Commons committee hearing, Lindsay Hoyle, Labour MP for Chorley, made a
stinging attack on Alistair Buchanan, Ofgem’s chief executive. Mr Hoyle said
that energy companies blamed poor planning laws for not building enough
storage facilities to enable Britain to be self-sufficient but he said that
it was in the companies’ interests not to tackle the problem since they
stood to benefit from passing on the higher prices to consumers.
Mr Hoyle asked Mr Buchanan whether he was prepared to act now to address the
issue, adding: “Or are you the toothless tiger that we imagined?”
Citigroup’s analyst thought the likeliest pricing scenario is a rise in
retail prices of up to 25 per cent, which would lead to extremely thin or
zero profits from retail power supply.
However, not all energy companies are in a position to do that easily. Some
companies, such as E.ON, have substantial generation capacity. Others, such
as Centrica, the owner of British Gas, are particularly exposed to wholesale
price rises because they lack their own generation capacity.
Patrick Herren, an independent energy market analyst, said about half the
cost of a household’s gas bill and one third of the cost of an electricity
bill was the commodity cost of the gas itself, with the rest being made up
of transport and distribution costs.
Moreover, National Grid expects gas output from the North Sea to fall 11 per
cent this winter, significantly more than expected. More gas will need to be
shipped to the UK from overseas as liquefied natural gas. That will put the
UK in direct competition with Japan and South Korea, which are entirely
dependent on LNG imports and pay top global prices. Source: Latest Business News from Times Online | 18 Jun 2008 | 8:30 pm
Informa, the exhibitions group, has received a takeover approach from a
private equity consortium understood to be led by Providence. The news came
after the announcement that Informa’s £3.4 billion merger talks with United
Business Media, its rival, had collapsed. Source: Latest Business News from Times Online | 18 Jun 2008 | 8:30 pm
Iconic British toy maker and retailer Hamleys today opened its first store outside Europe, choosing Amman, the capital city of Jordan, as its debut in the Middle East. Source: Telegraph Business | 18 Jun 2008 | 12:21 pm
China and Japan reach an agreement in a long-running dispute over a gas field in the East China Sea. Source: BBC News | Business | World Edition | 18 Jun 2008 | 11:20 am
LONDON (Reuters) - India's Ranbaxy Laboratories has settled most of its patent disputes with Pfizer , allowing it to launch a generic version of the U.S. group's blockbuster cholesterol drug Lipitor from November 30, 2011.
Among the companies whose shares are expected to see active trade in Wednesday’s session are the chicken producers and the European travel companies as well as CKE Restaurants, Gannett, MF Global, Northwest Air, Tyson Foods and UBS.
The volume of mortgage applications drops a seasonally adjusted 8.7% on a week-to-week basis as interest rates spike higher, fresh data from the Mortgage Bankers Association show.
Business Secretary John Hutton issues a warning about inflationary pay rises after tanker drivers receive a reported 14% rise. Source: BBC News | Business | World Edition | 18 Jun 2008 | 11:05 am
Asian shares end a volatile session on a mixed note, with China's two main equity benchmarks rallying more than 5% as investors snap up issues as value plays.
With the trading year almost half over and results from the first quarter out, 24/7 Wall St. has created the latest installment of its Ten Worst Managed Companies In America list. This analysis is based on: 1) one year and five year stock performance relative to the major indexes and other companies in the industry, 2) the company's position in its industry both now and over the last five years, 3) whether management made identifiable and critical decisions which hurt the company, 4) a change in the company's relative market strength compared to its competition, and 5) whether the company...
Where baby-boomers go, the financial services industry follows. Too large, at 77 million people, and too affluent to be ignored, this group has been heavily wooed at every stage of life. Now, as the oldest boomers begin leaving the workforce, Fidelity and Vanguard have launched mutual funds aimed at retirees who are making the transition from saving to spending.
At first glance, "Howard Buttelman, Daredevil Stuntman" appears to be typical YouTube farce. It's a video about a small town tuxedo salesman who thinks he's the next Evel Knievel. He's mistaken, of course.
SAN FRANCISCO (Reuters) - The economy will likely avoid a formal recession, but its outlook through the end of next year is decidedly "subprime" with the deep housing downturn restraining growth to just above 1 percent, a UCLA Anderson Forecast report released on Wednesday said.
Johnson & Johnson and the American Red Cross resolve their dispute over the charity's use of the red cross symbol. Source: BBC News | Business | World Edition | 18 Jun 2008 | 10:32 am
London equities fell on Wednesday as banking stocks handed back some of their recent gains and oil companies tracked crude's continued descent from record highs.The FTSE 100 fell 1.5 per cent, or 89 points,... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Jun 2008 | 10:29 am
On June 18, a MarketWatch report incorrectly stated same-store figures for clothing retailer Hennes & Mauritz during March and April. The story has been corrected.
Hennes & Mauritz, Europe's No. 2 clothing retailer, generates 14% profit growth for the second quarter, reflecting improved weather in May and the impact of a weak U.S. dollar.
NEW YORK (Reuters) - Global entertainment and media revenue is forecast rising by an average of 6.6 percent a year to $2.2 trillion by 2012, boosted by advertising-supported digital and mobile media and an explosion in the adoption of broadband.
Swedish clothing store H&M posts a pre-tax profit of $901m (£461m) in the second quarter of the year. Source: BBC News | Business | World Edition | 18 Jun 2008 | 10:17 am
Reuters - Global entertainment and media revenue
is forecast rising by an average of 6.6 percent a year to $2.2
trillion by 2012, boosted by advertising-supported digital and
mobile media and an explosion in the adoption of broadband.
Retail gasoline prices have eased for the second day in a row, retreating slightly from their record high, according to a daily survey released Wednesday by auto club AAA.
Shares in Asia rose for the fourth day in a row on Wednesday with mainland China leading the way with a 5.6 per cent surge. Oil drifted lower towards $133 a barrel, and property companies and miners advanced... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Jun 2008 | 10:13 am
LONDON (Reuters) - Wall Street futures were mixed Wednesday with Dow Jones futures up by 0.05 percent, S&P 500 futures were down 0.1 percent and Nasdaq futures dropped 0.05 percent at 5:55 a.m. EDT.
European equities fell on Wednesday, with banking stocks once more in the vanguard of the losses on worries about further potential writedowns in the sector. The FTSE Eurofirst 300 fell 0.7 per cent to... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Jun 2008 | 10:11 am
U.S. stock futures on Wednesday clung near the last session’s levels, with traders looking for any signs of relief from either stubbornly high oil prices or the credit crunch from data on weekly energy inventories and earnings from FedEx and Morgan Stanley.
Apple's (AAPL) stock price may just keep going up. New evidence indicates that, while iPod sales growth is slowing, Mac and iPhone sales could more than make up for that difference. One brokerage counted heads and found that global iPhone sales could double next year. According to Reuters, "Morgan Stanley expects 27 million iPhones to be sold in calendar year 2009 with an average revenue of $550 per unit". Because Apple is allowing carriers to underwrite the cost of the phone for subscribers and with the new 3G versions of the handset coming to market, the analysis has the benefit...
The pound eased on Wednesday after the minutes of the Bank of England's June meeting showed the central bank was likely to keep UK interest rates on hold for some time, in contrast to expectations for... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Jun 2008 | 10:00 am
Bank of England policy makers defeated David Blanchflower's call for an interest-rate cut this month as the threat of inflation intensified, prompting some of them to consider an increase. Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Jun 2008 | 9:58 am
Bank of England policy makers defeated David Blanchflower's call for an interest-rate cut this month as the threat of inflation intensified, prompting some of them to consider an increase. Source: Telegraph Business | 18 Jun 2008 | 9:58 am
DreamWorks SKG, the Hollywood film studio, is close to signing a deal with one
of India's biggest entertainment conglomerates to form a new movie venture. Source: Latest Business News from Times Online | 18 Jun 2008 | 9:50 am
Steven Spielberg and his friends at movie studio Dreamworks are in the process of raising $500 million to $600 million from India's Reliance ADA Group. Dreamworks is now part of the Paramount operations of Sumner Redstone's Viacom (VIA). According to The Wall Street Journal, "The film industry has been closely monitoring the fate of the 61-year-old Mr. Spielberg and partner David Geffen, co-founders of DreamWorks SKG." Whether it was a faux pas or an intentional statement, Sumner Redstone's puppet CEO at Viacom, Philippe Dauman, said that Dreamworks was "completely immaterial" when it came to the parent company's financial future. Dauman...
Some members of the Bank of England’s Monetary Policy Committee weighed arguments for raising rates to combat rising inflation pressures at their June 5 meeting, while David Blanchflower repeated his plea for further easing amid fears of a U.S.-style, housing-led slowdown, according to minutes released Wednesday.
The BBC has bought the rights to a low-brow Japanese game show, which uses a
moving wall to ditch contestants in a pool of water in the corporation's
latest effort to bring fresh ideas to its audiences. Source: Latest Business News from Times Online | 18 Jun 2008 | 9:25 am
The Government issued a firm warning against demands for bumper pay rises after a deal was reached with tanker drivers to end the fuel dispute. Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Jun 2008 | 9:25 am
Alistair Darling, the Chancellor, is to warn that Britain is now "exposed to global events like never before" in his first Mansion House speech to the City. Source: Telegraph Business | 18 Jun 2008 | 9:25 am
Alistair Darling, the Chancellor, is to warn that Britain is now "exposed to global events like never before" in his first Mansion House speech to the City. Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Jun 2008 | 9:25 am
The Government issued a firm warning against demands for bumper pay rises after a deal was reached with tanker drivers to end the fuel dispute. Source: Telegraph Business | 18 Jun 2008 | 9:25 am
SUV sales are at record levels in China. Driving one of the beasts is considered a status symbol, the way it used to be in the US. With gas at $4 a gallon, filling up a Lincoln Navigator can now cost a US citizen $100. He may need that money to buy the $80 box of Kellogg cornflakes. According to the FT, "Although demand for SUVs is slumping in most parts of the world, it remains strong in China. Sales rose by 40 per cent in the first four months of the year." Wealthy Chinese like to own the big...
U.K. activist investor Olivant said Wednesday that it has built up its stake in UBS to 2.5% and repeated calls for a major shake-up of the troubled Swiss financial giant.
The Bank of England considered raising rates to counteract inflation, minutes of the June meeting show. Source: BBC News | Business | World Edition | 18 Jun 2008 | 9:18 am
An investment firm holding 3.6% of CKE Restaurants Inc. called on the operator of Carl's Jr. and Hardee's outlets to cut operating costs and reduce the capital-spending plan to improve free cash flow.
The tradition of farming the land in northern New Mexico's Espanola Valley had been passed down from Don Bustos' Spanish ancestors who tilled the same soil centuries before. But when... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Jun 2008 | 9:07 am
Poll Commissioned by Dunham+Company Shows Impact of Rising Prices DALLAS, June 18 /PRNewswire/ -- Nearly half of the Christian adults in America have reduced their... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Jun 2008 | 9:00 am
LinkedIn, the business networking website, has raised $53m in funding, valuing the five-year old Californian start-up at $1bn. Source: Telegraph Business | 18 Jun 2008 | 8:50 am
LinkedIn, the business networking website, has raised $53m in funding, valuing the five-year old Californian start-up at $1bn. Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Jun 2008 | 8:50 am
Question: I read your recent article in Money magazine regarding the craze for international investing. This past week my adviser has recommended this move since I have very little money in the international market. She recommended Nationwide International Growth Fund and the Ivy Asset Strategy Fund. What do you think of her advice?
A three-way split over interest rates may be developing within the Bank of
England’s Monetary Policy Committee (MPC), after it emerged that some
members had discussed raising borrowing costs to stem inflation. Source: Latest Business News from Times Online | 18 Jun 2008 | 8:36 am
LinkedIn, a networking site for professionals, raises $53m (£27m) of new funding from investors. Source: BBC News | Business | World Edition | 18 Jun 2008 | 8:35 am
J Sainsbury has reported a slowdown in first quarter sales growth as rising living costs force people to think twice about how much they spend on food. Source: Telegraph Business | 18 Jun 2008 | 8:30 am
(Reuters) - Morgan Stanley raised its price target on Apple Inc shares to $210 from $185, saying it expects the company's iPhone unit sales to double in 2009 at the new $199 price point.
Phil Goldstein became a hedge fund manager thanks to a pair of gray sweatpants. In the summer of 1992 the 47-year-old civil engineer walked into Las Vegas's Mirage hotel to meet his first potential investor. The shorts he was wearing didn't meet the dress code of Moongate, a Chinese restaurant where the two men had planned to meet. He thought the rule was arbitrary, so he went to a nearby gift shop, purchased a pair of sweatpants, changed into them, and returned to the restaurant. After the meal he changed back into his shorts and returned the pants for store credit. When Goldstein also told the prospect that he was staying off the Strip, at a $39-a-night motel, the deal was sealed. "This is a man I want managing my money," the investor told his broker that night.
BMG Label Group, the Bertelsmann-owned half of music giant Sony BMG, is launching a new incubator label for its fledgling rap and hip-hop artists. The imprint, to be known as Battery Records, will act... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Jun 2008 | 8:17 am
The European beer giant attempting to buy the Budweiser empire went to Washington to assure miffed politicians that Bud would remain totally American under foreign owners. The iconic brand - itself copied... Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Jun 2008 | 8:17 am
Chancellor Alistair Darling warns of a "difficult year" and says there is "no doubt" the UK economy is slowing. Source: BBC News | Business | World Edition | 18 Jun 2008 | 8:16 am
SAN FRANCISCO (Reuters) - The economy of California, the most populous U.S. state, will remain weak this year as the downturn in its housing market persists, but strong exports and agricultural activity will help offset that drag, according to a UCLA Anderson report released on Wednesday.
Microsoft Corp. said Wednesday it has acquired Navic Networks, which specializes in emerging forms of television advertising technology. Terms of the deal were not disclosed. The... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Jun 2008 | 8:11 am
Reuters - The economy of California, the
most populous U.S. state, will remain weak this year as the
downturn in its housing market persists, but strong exports and
agricultural activity will help offset that drag, according to
a UCLA Anderson report released on Wednesday.
Reuters - The economy of California, the
most populous U.S. state, will remain weak this year as the
downturn in its housing market persists, but strong exports and
agricultural activity will help offset that drag, according to
a UCLA Anderson report released on Wednesday.
Reuters - The economy will likely avoid a
formal recession, but its outlook through the end of next year
is decidedly "subprime" with the deep housing downturn
restraining growth to just above 1 percent, a UCLA Anderson
Forecast report released on Wednesday said.
AMSTERDAM (Reuters) - Office goods supplier Staples has won approval from the European Commission for its 1.7 billion euro ($2.64 billion) takeover bid for Dutch peer Corporate Express.
According to Reuters, Staple (SPLS) has received EU approval for a takeover of Corporate Express. Reuters writes that DreamWorks is in conversations with India's Reliance. The deal would allow top management at the studio to leave Viacom (VIA). Reuters writes that Mircosoft (MSFT) has bought TV ad tech company Navic. Reuters writes that Google (GOOG) sees value in its "experiment": with Yahoo! in the ad business. Reuters reports that Northwest Air (NWA) has further cut its capacity. Reuters reports that the former CEO of AIG (AIG) may get as much as $68 million in severance. The Wall Street Journal reports...
J Sainsbury, the UK supermarket group, today missed analyst forecasts on first
quarter growth and fell behind its rivals after revealing that like-for-like
sales rose by 3.4 per cent. Source: Latest Business News from Times Online | 18 Jun 2008 | 7:38 am
PARIS (Reuters) - French drugmaker Sanofi-Aventis plans to make a 40.04 billion Czech crown ($2.57 billion) offer for Czech drugmaker Zentiva , trumping a bid from financial group PPF. Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Jun 2008 | 7:36 am
ZURICH (Reuters) - Activist investor Olivant has raised its stake in Swiss bank UBS to 2.5 percent and said on Wednesday it had fully supported the recent rights issue. Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Jun 2008 | 7:35 am
PARIS, June 18 /PRNewswire/ -- AXA announced today it has completed the acquisition of 36.7% of the share capital of RESO GARANTIA, Russia's 2nd largest P&C... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Jun 2008 | 7:35 am
Markets in Asia were mostly higher. The Nikkei rose .7% to 14,453. Olympus rose 3.3% to 3750. Toyota (TM) rose 1.3% to 5670. The Hang Seng rose 1.5% to 23,397. China Life (LFC) rose 2.4% to 29.35. China Mobile (CHL) rose 1.2% to 108.90. The Hang Seng rose 5.2% to 2,941. Data from Reuters Douglas A. McIntyre
Reuters - Movie studio DreamWorks SKG is close
to a deal with India's Reliance ADA Group to form a new movie
venture, the Wall Street Journal reported on Tuesday, citing
people familiar with the talks.
NEW YORK (Reuters) - Movie studio DreamWorks SKG is close to a deal with India's Reliance ADA Group to form a new movie venture, the Wall Street Journal reported on Tuesday, citing people... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Jun 2008 | 7:17 am
NEW YORK (Reuters) - Movie studio DreamWorks SKG is close to a deal with India's Reliance ADA Group to form a new movie venture, the Wall Street Journal reported on Tuesday, citing people familiar with the talks.
Reuters - Hennes & Mauritz (HMb.ST), the
world's third-biggest clothing retailer by sales, posted
second-quarter pretax profits and May sales above market
expectations on Wednesday, helped by a weak U.S. dollar and
good weather.
NEW YORK (Reuters) - A forward-looking measure of U.S. non-residential construction activity weakened last month but remains above a record low reached in March, an architects' trade group said on Wednesday.
SINGAPORE, June 18 /PRNewswire/ -- ICIS pricing, href="http://www.icispricing.com/">http://www.icispricing.com/ , the world's leading price reporting service for Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Jun 2008 | 7:00 am
Reuters - Citigroup Inc has offered early
retirement to the 1,350 employees of its Japanese consumer
finance unit, as the subprime-hit U.S. bank retreats from
consumer lending in the world's second-largest economy.
TOKYO (Reuters) - Citigroup Inc has offered early retirement to the 1,350 employees of its Japanese consumer finance unit, as the subprime-hit U.S. bank retreats from consumer lending in... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Jun 2008 | 6:58 am
John McCain's increasingly finely balanced efforts to shore up his support among the shrinking Republican base while reaching out to independents is starting to fire up the critics Source: FT.com - US homepage | 18 Jun 2008 | 6:36 am
"Challenging" trading conditions cause sales growth to slow at Sainsbury's in the April to June period. Source: BBC News | Business | World Edition | 18 Jun 2008 | 6:33 am
Hollywood director Steven Spielberg's DreamWorks and India's Reliance Big Entertainment, controlled by billionaire industrialist Anil Ambani, are in talks to create a new movie joint venture Source: FT.com - US homepage | 18 Jun 2008 | 6:33 am
Woolworths' board has called time on Trevor Bish-Jones's tenure as chief
executive of the high street stores after more than six years of struggling
to put the group back on the road to recovery. Source: Latest Business News from Times Online | 18 Jun 2008 | 6:32 am
HELSINKI, June 18 /PRNewswire-FirstCall/ -- Stora Enso's operating profit excluding non-recurring items for the second quarter of 2008 is expected to be about half... Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Jun 2008 | 6:30 am
NEW YORK (Reuters) - Microsoft Corp said on Wednesday it had purchased privately held digital television advertising technology company Navic Networks.
The New Zealand dollar was subject to competing pressures that kept it in check today.
Bank of New Zealand currency strategist Danica Hampton said the kiwi was trapped by the "countervailing forces" of a weaker US dollar and lingering... Source: New Zealand Herald - Business | 18 Jun 2008 | 5:59 am
Reuters - Office goods supplier Staples
has won approval from the European Commission for its
1.7 billion euro ($2.64 billion) takeover bid for Dutch peer
Corporate Express .
The words come in a rapid, random progression on the computer screen: "POET," "BEACH," "ATTENDANT," "JURY," "CAVE" … there are 15 in all. I’m watching them tick by one by one, slightly panicked that I am going to forget them.
The screen goes dark, and I’m now supposed to write down as many of the words as I can quickly recall.
I am annoyed when I manage only five words.
EXPERIMENTAL MAN David Ewing Duncan explores advances in personalized medicine and what they can tell us about ourselves.
Paul Turk says not to worry, that this is fairly typical. Turk is director of business development for Cognitive Drug Research, a British firm that uses automated tests to gauge how well we think. He's come to my office in San Francisco to administer a battery of tests to check out my attention, memory and executive function.
I will be compared on this test and several others with people my age and to those who are younger and older. Their results have been averaged on a database of tens of thousands of adults. I’ll also get a “brain-age” score.
I have to admit to certain nervousness. What if a) I turn out to be a moron; or b) my brain-age is older than I am?
Cognitive Drug Research is one a handful of businesses, most of them outside of the U.S., that work with pharmaceutical companies to test how new drugs for everything from nicotine addiction to Alzheimer’s disease affect the mind’s ability to remember things, make decisions, and analyze information.
The results from their tests are recognized “end points” by the Food and Drug Administration to determine if new brain medications work, which means that the drug industry has billions of dollars in potential revenues riding on them.
Cognitive tests have been around for a century as examinations taken with paper and pencil. In the 1970s and '80s the tests shifted to computers, Cognitive Drug Research founder Keith Wesnes says. He is a psychologist and neuroscientist who started the company in 1986 as an outgrowth of testing programs he developed for his academic experiments on cognition.
Besides drug trials, cognitive experiments are being run on patients who have had open heart surgery; take cholesterol-lowering drugs; experience what is known as “Chemofog”, a cognitive decline that sometimes accompanies chemotherapy treatments for cancer; and soldiers returning from Iraq with head trauma.
Tests have been run on children eating sugary breakfast cereals versus more healthy breakfasts, and on the cognitive impact of being obese.
A competitor of Cognitive Drug Research, Cogstate of Australia, offers a product called Cogstate Sport that monitor an athlete’s recovery from concussions. Customers include the Rugby Football League in Britain and the Australian Football League.
Somewhat ominously, Cogstate also offers a test that allows employers to check out their workers. According to the company's website:
CogState WorkPlaceallows employers to comprehensively measure if their employees are fit for duty when it comes to their ability to think and act. Taking only around 8 minutes to complete, it has been proven to be sensitive to the effects of alcohol, fatigue and certain types of drugs. This method of testing is significantly less invasive than existing methods of drug and alcohol testing and therefore can be used as a less invasive step within an OH&S [Occupational Health and Safety] system.
Experimenters also have tested methods for enhancing cognition. For instance, placing subjects into a room high in oxygen apparently makes the brain very happy given the improved scores on cognition and memory. Drugs on the market and being tested also improve scores for healthy people, in some cases by as much as 20 percent.
Issues of enhancement and testing workers raise a host of ethical issues, including the possibility that these tests will be abused by individuals wanting to boost their own intelligence with drugs, or by employers discriminating against people who don’t score high on the tests.
And what should be done about the prospect of delivering bad news to people with mental disorders, who might get more depressed, or worse?
Wesnes says that his privately held company has tested about 30,000 people, and earns about $7 million to $8 million a year. But adds that he believes the cognitive-testing market is on the verge of expanding into an online business that would offer tests directly to consumers, businesses, or anyone else.
Consumers would need to be protected from anyone abusing these sites and the information generated; and accommodations would need to be made to protect or educate patients who might be upset by the results.
For healthy people, the sites could be used to run self-experiments, such as comparing one’s cognitive abilities while listening to, say, Carlos Santana versus listening to a Bach concerto; or before and after a bike ride.
The price won’t be outrageous—perhaps $40 or $50, says Wesnes, though he has not yet done an analysis to set prices.
Last weekend, I got my results from my own battery of test, and was surprised to hear that despite being 50 years old, my “brain age” is in my 20s. I was quick in responses and usually pretty accurate, said Wesnes.
“But that doesn’t mean that you weren’t sharper in your 20s,” he said. “We are all on our own scale, and we all decline with age.”
So I think that’s good news—for now. We’ll see how I do on the next test I’m planning with Wesnes, Turk, and Cognitive Drug Research—to determine how my brain does after drinking a glass or two of a modestly-priced Bordeaux.
Lower interest rates and flat house prices helped housing affordability improve to its best level in more than a year, according to a new report.
Housing was more affordable than at any time since March last year and set to improve... Source: New Zealand Herald - Business | 18 Jun 2008 | 3:00 am
New Zealand wholesale spot power prices fell for a second week as some winter rains started to fill depleted hydro lakes and a power saving campaign got underway.
Prices at the North Island reference point of Haywards fell 27.4... Source: New Zealand Herald - Business | 18 Jun 2008 | 2:00 am
Chinese officials say they want to learn from US mistakes that resulted in global market turmoil. Source: BBC News | Business | World Edition | 18 Jun 2008 | 1:31 am
The involvement of some well respected names in Dominion Finance may help it pitch its case for a moratorium to investors owed more than $250 million.
The NZX listed property financier says it has entered talks with its bankers,... Source: New Zealand Herald - Business | 18 Jun 2008 | 1:00 am
The biggest online social network intended for professional use has been valued at more than $1bn, putting it among a small group of private internet companies to have crossed that threshold before going public Source: FT.com - US homepage | 18 Jun 2008 | 12:52 am
NEW YORK - Johnson & Johnson and the American Red Cross have resolved a lawsuit over the use of their shared red-and-white symbol.
The deal was announced today. It comes after a federal judge tossed out most of health-products... Source: New Zealand Herald - Business | 18 Jun 2008 | 12:30 am
Linkedin, the social networking site of choice for business users, sparked
renewed speculation of a buyout following a $53 million funding round that
has valued the start-up at $1 billion.$ Source: Latest Business News from Times Online | 18 Jun 2008 | 12:18 am
Weather worries and the credit crisis are closing some events and even affecting Glastonbury, says Jonathan Sibun Source: Telegraph Business | 18 Jun 2008 | 12:01 am
Deutsche Bank has been privately scolded by the Financial Services Authority for advising clients to short rights issues at Britain's embattled banks to cash in on a collapse in their shares. Source: Telegraph Business | 18 Jun 2008 | 12:01 am
Buyout firm Phoenix Equity Partners is poised to buy Ashtead's oil and gas technology division for around £100m. Source: Telegraph Business | 18 Jun 2008 | 12:01 am
Russia's finance minister has called for a "civilised" end to the dispute between BP and its partners in the TNK-BP oil joint venture. Source: Telegraph Business | 18 Jun 2008 | 12:01 am
Most owners of private businesses in this country are aiming for modest organic growth, but most are wary of initiatives that could lead to accelerated growth, a new survey shows.
The ANZ bank said its Privately-Owned Business... Source: New Zealand Herald - Business | 18 Jun 2008 | 12:00 am
US regulators slap limits on oil contracts traded overseas amid fears speculators are artificially boosting oil prices. Source: BBC News | Business | World Edition | 17 Jun 2008 | 11:51 pm
Two South Island seafood companies want to bring in migrant labour, just a week after massive layoffs in the sector.
Sealord has announced plans to axe 323 jobs from its Nelson mussel factory and now Talleys and Aotearoa Seafood... Source: New Zealand Herald - Business | 17 Jun 2008 | 11:30 pm
The Irish vote against the Lisbon treaty has cast a pall on Turkish European
Union accession talks in Brussels, which restarted yesterday. Turkish
negotiators fear that a Turkophobic French presidency of the EU will shunt
the process into a siding - and rows over civil liberties are not helping. Source: Latest Business News from Times Online | 17 Jun 2008 | 11:00 pm
If you thought the City of London had pushed Wall Street off its pedestal, you
failed to reckon on the might of the CFTC. The US commodities and futures
market regulator has just squashed the FSA, imposing a series of new rules
on London trading in oil futures contracts without the approval of the
British authority. Source: Latest Business News from Times Online | 17 Jun 2008 | 11:00 pm
MELBOURNE - Travel agent Flight Centre Ltd today lifted its profit guidance for 2007/08, following "continuing healthy sales growth globally" during the second half.
Flight Centre said it now expects pre-tax profit to exceed A$210... Source: New Zealand Herald - Business | 17 Jun 2008 | 11:00 pm
The airlines' fight for survival in the face of soaring oil prices has triggered a jump in the price of obscure metals used to improve the fuel economy of jet engines Source: FT.com - US homepage | 17 Jun 2008 | 10:53 pm
The sharemarket was again near a 27-month low today after Wall Street fell again.
US stocks were dragged down by financial shares after brokerage Goldman Sachs warned that US banks would have to raise as much as US$65 billion ($87... Source: New Zealand Herald - Business | 17 Jun 2008 | 10:30 pm
Gannett (GCI), the country's largest newspaper company posted its revenue for the May period. Advertising revenue dropped 14.3% to $347 million. This was an acceleration from the year-to-date rate of decrease of 11%. Real estate classified was off over 30%. Most notable was the sharp decrease in ad revenue at USA Today, the country's largest newspaper by circulation. Sales were off 18.4% compared to the previous year as ad pages fell from 324 to 260, a 20% decline. Because of the national nature of its distribution, USA Today's trends are likely to mirror those of publications including The Wall Street...
Stocks in the US fell this morning (NZ time) after reports showed slower growth and higher pricing pressure, overshadowing any relief that oil prices fell for the third day in a row and that Goldman Sachs reported better-than-expected... Source: New Zealand Herald - Business | 17 Jun 2008 | 10:00 pm
The flow of capital into Asian property from outside the region is accelerating as a result of the credit crisis in the US, according to a new report on the sector Source: FT.com - US homepage | 17 Jun 2008 | 9:33 pm
The unexpected death last Friday of Meet the Press host Tim Russert has left NBC facing questions about the future of its political coverage, and the format of one of its most popular shows, smack in the middle of a key election season.
NBC executives were attending memorial events Tuesday in Washington, and were not available for comment. "Our focus right now is on the next few days," said a spokesperson, declining to comment on the search for a successor.
But competing networks weren't so reticent. "Tim was the format" of the most popular of the Sunday morning political gabfests, said a news executive from a competing network who did not want to be identified. "By definition [the show] will change to suit whoever they put in there.”
Maybe so. But during the changing of the guard at Meet the Press, the longest-running program in the history of broadcast television, NBC network executives would be wise to pay attention to recent efforts to revive the nightly news, which has fallen the farthest, in term of ratings and prestige, of anything on broadcast television in recent years.
CBS, NBC, and ABC have pulled a series of increasingly desperate stunts to try to retain their aging or fleeing viewers—and by extension, advertisers. Bells and whistles have included online interactive quizzes tied to news broadcasts, webcasts of the nightly news, and most notoriously, hiring Katie Couric, whose charm and smarts were supposed to revitalize CBS's nightly offering.
These grabs for younger viewers, while necessary in a shifting media landscape, have been almost universally unsuccessful. The lesson for the producers of Meet the Press? If it ain't broke, don't fix it.
Andrew Heyward, former president of CBS News, was involved with initial talks to bring Katie Couric to the network. "A lesson to me there is that for the evening news—and the Sunday morning shows are kind of like this—the people who watch it like it the way it is," says Heyward, who left the network in 2005 and is currently working for Marketspace, a consultancy affiliate of Monitor Group.
Of course, Meet the Press is now broken. It has lost its charismatic host, and the temptation to shake things up might sway the producers. But there are several reasons it shouldn't.
For one thing, Meet the Press isn't in nearly as much trouble as the nightly news. The show's audience isn't going anywhere. Average viewership for Meet the Press and its competition in the Sunday morning political talk fest, Face The Nation on CBS and This Week with George Stephanopoulos on ABC, has held fairly steady in the past 10 years, though Meet the Press has consistently led the pack, with an average of just under 4 million viewers per show in the current broadcast season.
That loyal audience includes the kinds of tastemakers and civic leaders that every network—and advertiser—wants to reach, while being relatively cheap to produce and thus reliably profitable.
Finally, the shows are "often news-making opportunities," says Jeffrey Schneider, senior vice president at ABC News. "Every Sunday there are a whole array of news-makers who are having tough questions put to them, and those answers often command the front page of the newspaper the next morning." The shows' hosts each play leading roles in the political coverage at their respective networks, and the relationships they form on the show allows them to break news for the networks year-round.
Still, as good as the formula is, change has obviously come to Meet the Press. As the names of possible successors—Tom Brokaw for the immediate time being, David Gregory or Andrea Mitchell from within NBC News, or even a cable cousin like Chris Matthews or Keith Olbermann—are tossed around, questions about format changes are inevitable.
No matter who takes over, the show "will not be reinvented," predicts Andrew Tyndall, the blogger who authors the site TyndallReport.com, a website tracking network news coverage. "It will evolve, if the new host is up to the task."
Late news from the bank and airline industries found analysts in surly moods. Goldman Sachs issued a report saying US banks will have to raise as much as another $65 billion. According to Reuters, "The new capital would be on top of $120 billion already raised by the industry." The brokerage cut its price targets on sixteen banks including Wachovia (WB) and Washington Mutual (WM). Not to be outdone, the airline industry said it would lose $10 billion this year. The Air Transport Association said total fuel costs for domestic carriers will hit $61 billion. Douglas A. McIntyre
Consumers were warned to expect sharper increases in food prices after US officials said that some of the country's best farmland was facing its worst flooding for 15 years Source: FT.com - US homepage | 17 Jun 2008 | 9:00 pm
Leaders meeting for summit talks in Brussels on Thursday are braced for more delays in the ratification of the treaty after its rejection last week by Irish voters Source: FT.com - US homepage | 17 Jun 2008 | 8:53 pm
The Colonial BancGroup (CNB) Concerns about balance sheet. Down to $4.12 from 52-week high of $25.50. Wachovia (WB) The bigger the bank, the harder its falls. Drops to $16.96 from 52-week high of $54.54. Gatehouse Media (GHS) Newspaper. Falls to $2.73 from $19.60. Zions Bancorporation (ZION) Yet another bank stock sinks. Drops to $33.42 from 52-week high of $71.43. Douglas A. McIntyre
Navios Maritime Acquisition Corporation is a special purpose acquisition company, or SPAC/Blank Check company, that has filed to come public via an IPO. It has filed to sell some 22,000,000 units, with each unit representing one share of stock and one warrant with a $7.00 strike price, and has the applied ticker of "NNA" on the NYSE. Navios Maritime Holdings Inc. (NYSE: NM) has committed to purchase from us 7,600,000 warrants at $1.00 per warrant for a total purchase price of $7,600,000, which will occur simultaneously with the completion of this offering. The lead underwriters are listed as JPMorgan and...
Investors, bankers and policymakers have welcomed a deal reached by Goldman Sachs to restructure the first of a string of collapsed investment vehicles Source: FT.com - US homepage | 17 Jun 2008 | 6:55 pm
One person's trash is another's treasure in China where the salvage of raw materials from the rubble of last month's earthquake is becoming an industry. Lisa Chow reports. Source: Marketplace | 17 Jun 2008 | 6:50 pm
Our latest stories on food left a foul taste in some listeners' mouths. Host Kai Ryssdal serves up your thoughts on our recent coverage. Source: Marketplace | 17 Jun 2008 | 6:50 pm
Production on movies and television has again slowed to a virtual halt under the threat of an actors strike. Host Kai Ryssdal talks with Variety reporter Joe Adalian about the stakes this time. Source: Marketplace | 17 Jun 2008 | 6:50 pm
A Brazilian oil company that once bartered poultry for oil is now the sixth-largest corporation in the world -- and has set its sights on the U.S. market. Dan Grech reports on the company's rise. Source: Marketplace | 17 Jun 2008 | 6:47 pm
We grow enough food for everyone, but livestock are devouring our food supply. Commentator and bioethicist Peter Singer says unless we change, the dinner plate of the future will look far different. Source: Marketplace | 17 Jun 2008 | 6:47 pm
It's got a big name -- bapineuzumab -- but a new Alzheimer's drug could also have a big payoff. With projections in the billions, it could be the highest grossing drug in history. Janet Babin reports. Source: Marketplace | 17 Jun 2008 | 6:47 pm
The number of seniors filing for bankruptcy has risen dramatically in the last 20 years, according to an AARP study. Jeremy Hobson reports. Source: Marketplace | 17 Jun 2008 | 6:47 pm
Analysts are divided on whether more oil from Saudi Arabia will ease the pressure on prices or just introduce more chaos into the market. Bob Moon reports. Source: Marketplace | 17 Jun 2008 | 6:47 pm
What sort of no-goodness are Amazon.com and eBay up to? Look no further than the news from overseas.
The two companies seem to have a nifty little trick: If they can't get away with a slightly questionable strategy here in the U.S., they test it out somewhere else.
Case in point: Amazon.com pulled the one-click buy feature on its British web site for books published by Hachette Livre, the second-largest English language trade publisher after Random House. Amazon reportedly yanked the feature in response to sort of revenue dispute with Hachette Livre. (Amazon.com declined to comment.) The publisher also claims that Amazon pulled its books from promotions.
Meanwhile, our friends over at eBay have been trying to implement a PayPal-only policy in Australia -- the move would make it mandatory for all users to only use PayPal on eBay, and would disable any other online payment system on the Australian site. The policy isn't passing the sniff test with Australian regulators, though. The Australian Consumer and Competiton Commission (ACCC) hinted it may give eBay the smackdown.
"Given eBay's position as Australia's leading online marketplace, the notified conduct will substantially reduce competition to supply online payment services," said ACCC chair Graeme Samuel.
EBay said the ACCC's decision "undermines online consumer protection," but at the same time, the company fully admits it wouldn't try anything like that in the U.S. -- possibly because of regulatory concerns, but more likely because it wants to avoid lawsuits from competitors and customers.
"In the US, we are not mulling, planning, or otherwise seriously considering a move to PayPal-only. There are US market-specific reasons why PayPal-only is something we simply cannot do in the US," said spokesman Usher Lieberman in a blog post.
What are those market specific obstacles? Most likely the company is concerned about the long-arm of the anti-trust law and lawsuit-happy competitors.
"On antitrust issues, the difference between other countries and [the U.S.] is that here, if you engage in anticompetitive conduct, you not only have to worry about government regulators, there's also a robust risk of private suits from competitors or customers. In most other countries, that's not as well developed," says Mark Ostrau, a partner and co-chair of the antitrust and unfair competition group at Fenwick & West. "And if a [foreign] government steps in, it almost gives [companies] a chance to test the waters, to see how a government reacts, and then pullback, without the overhang of large damage claims through private action." Related Links A New Way for EBay? Amazon Doubles Up On First Quarter Profit Error 404. You've Been Hacked.
China’s $60 billion advertising market is the third largest in the world. Yet according to a new study by R3/Grupo Consultores, few marketers have a true understanding of what it takes to build brands in the fastest-growing market on the planet.
Over a two-year period ending in March of 2008, R3/Grupo Consultores surveyed more than 500 advertisers and more than 100 global and independent agencies working in China, which only re-legalized advertising in 1978.
The results, discussed at the Cannes International Advertising Festival this week, have broad implications for future marketing efforts with China, and perhaps are harbingers of future ad trends in the rest of the world.
One surprising finding: In a country where marketers strive to elicit loyalty from consumers, the average client/agency relationship is the world’s shortest at less than two-and-a-half years — compared with almost five years in the Europe and the United States.
The No. 1 reason Chinese clients gave for seeking a new agency is a lack of creativity (in the U.S. it’s a dissatisfaction with service). In fact, 85 percent of Chinese advertisers said that creativity matters most — more than anywhere in the world.
The survey said that most brands look to multinational agencies for high level creative, and local shops for a better understanding of the complex and varied Chinese demographic, which is to be expected in a country 102 cities of more than a million people, and still a 70 percent rural population.
Also of note is the finding that project-based, rather than fee-based compensation for work is more common in China than anywhere else. This is trend that ShuFen Goh, Principal of R3 Asia Pacific, feels could be related to the premium placed on creative and will become more prevalent in the rest of the world.
(An excerpt of her talk with Portfolio.com can be found here).
The study busts the myth that Chinese marketers are playing catch-up with the rest of the world. Goh says she found that China is actually playing leapfrog, bounding past conventional global marketers in some areas.
This is best exemplified with the phenomenal growth of mobile phones as a means of communication – and a prime advertising opportunity. China Mobile, the world's largest cellular provider, has 530 million subscribers, and it adds as many subscribers each month as there are people in Portugal.
“The first button a child pushes in China today isn’t the television, radio, or computer; it’s the mobile,” Goh says. She predicts the world will soon be playing catch up to China when it comes to mobile advertising.
In addition to grasping mobile’s jaw-dropping potential and the importance of creativity, advertisers in China should also note the tension between tradition and transformation in the 5,000-year-old culture. This includes a rise in using blogs, chat rooms, and other interactive branding technology as an outlet for social expression.
According to the study, the most dynamic multinational brand in China is Coke. The most admired is Procter & Gamble.
Daniela Riccardi, greater China president of P&G, said her company's status should be no surprise. Procter will be celebrating its 20th year of having an advertising presence in China this August. That is about eight times longer than most ad relationships there.
For an interactive map of Cannes parties, click here.
In signing a $75 million settlement with federal prosecutors, the class-action law firm Milberg LLP has taken a page from the playbook of the accounting firm KPMG.
At first blush, the deal cut by Milberg—now a shadow of its former self in the wake of guilty pleas by Melvyn Weiss and William Lerach, the two men that built the firm into a shareholder lawsuit behemoth—may seem quite onerous: The firm has agreed to "accept responsibility for the conduct of its partners" for paying kickbacks to people who put their names on lawsuits for almost three decades. It has also agreed to "cooperate fully" with "any agency" designated by the prosecutors regarding kickbacks—a potentially wide-ranging cooperation, given that there are calls in Congress to probe Lerach's claims that kickbacks were "industry practice" at one time.
But Milberg is no longer facing the dark cloud of criminal charges. Even after its indictment, the firm had still been able to convince some judges to appoint it for the coveted role of law firm for the "lead plaintiff" in securities class actions, a title that carries with it the power to control the litigation of these cases, and the lion's share of the lawyers' fees awarded at their end.
With the charges settled, "They are in a better position now," a rival lawyer says.
Likewise, KPMG emerged as a stronger firm after agreeing to a deferred prosecution agreement in 2005 to avoid an indictment over its role in questionable tax shelters.
Moreover, the current management of Milberg extracted a powerful concession from the prosecutors, who acknowledge that none of its current partners were involved with the criminal activity. The "statement of admitted facts" attached to the agreement says that the seven "conspiring partners" who made secret kickbacks "took affirmative steps to conceal their illegal activities from other partners, associates, and employees of the firm."
Sean Coffey, a partner at Bernstein Litowitz Berger & Grossman, himself a former prosecutor, called that "a very significant statement from the government that will go a long way to give at least some courts confidence in Milberg going forward."
Coffey's firm has emerged as a major player in shareholder lawsuits, representing institutional investors in blockbuster class actions like the case stemming from the accounting scandal at WorldCom. Current management at Milberg and their counsel "have done a terrific job of repairing the damage of the former leadership," Coffey said. "The former leadership took a circle-the-wagons approach that very much harmed the firm."
On the other hand, Robert Giuffra Jr., a defense lawyer at Sullivan & Cromwell who, as counsel to the Senate Banking Committee, was one of the key drafters of a 1995 law that changed the rules for securities class actions, says other plaintiffs' firms and defense lawyers will use the agreement against Milberg, either to grab institutional-investor business it is trying to catch, or prevent it from being appointed as the lead law firm.
"The problem that they face is that Milberg really had no choice but to enter an agreement with the Department of Justice," Giuffra said. With no defense, they had to enter an agreement or go out of business, making their plea and agreement to a court monitor more necessity than nobility.
One mystery remains: The firm's admitted statement of facts points to Weiss, Lerach, and former partners David Bershad and Steven Schulman. But it also alludes to three other "conspiring" partners, identified only as Partner E, Partner F, and Partner G. It is not clear who these former partners are.
Milberg has agreed to follow a "best practices" program for two years. Under it, the firm agrees to "ensure full compliance with all legal and ethical rules" and submit its referral agreements to the review of a court-appointed monitor—limitations that one lawyer called a "joke."
But the use of a monitor drew a complaint from a seemingly unlikely source: Ralph Ferrara, a partner at Dewey & LeBoeuf who has defended corporate management against many class actions filed by Milberg Weiss when it was led by Mel Weiss.
"Milberg is one of the many, many entities that has succumbed to this monitor idea under the threat of indictment," Ferrara said, calling the use of court-appointed monitors "a completely extra-judicial, extra-constitutional method of prosecution."
Oddly enough, having a monitor check up on Milberg may work to the firm's benefit as it tries to rebuild, Ferrara says. "It may be used as a wedge to get back into the good graces of the institutional clients they want to serve," Ferrara said. "They can say, Look, this is behind us." Milberg has a much more profound problem on its hands, at least in his view: "The firm has lost its soul," he said, referring to his longtime courtroom opponent, Mel Weiss. "It has to reincarnate itself around a group of people that have never had to be soul-like before."
Weiss is scheduled to report to prison on August 28, while Lerach has been denied a bid to move from the federal prison at Lompoc, California, to a residential alcohol rehabilitation program.
In Condé Nast Portfolio, Lerach claimed Milberg Weiss paid kickbacks to plaintiffs for decades "to stay competitive" because it was "industry practice" prior to passage of a 1995 law by Congress.
His essay expounded on a claim he made on the eve of his March sentencing to the Wall Street Journal. That has triggered calls for a congressional investigation, and infuriated fellow plaintiffs' lawyers.
Coffey, for one, dismisses the call for a Capitol Hill inquiry as "a press release from the Chamber of Commerce with a senator's name on it."
It is an odd twist that Lerach's parting gift was to big business, while painting his fellows at the plaintiffs' bar with a black brush: "The corporate apologists from the Chamber had to be kicking their heels when Lerach threw out that tidbit just before the jailhouse door closed shut," Coffey said.
Of all the financial ships navigating the credit storm, Goldman Sachs is the one that has fared the best. So after Lehman Brothers' pep talk on Monday, investors were counting on signs from Goldman to confirm that there is indeed some strength on Wall Street.
It did not disappoint. Goldman reported earnings of $2.09 billion, or $4.58 per share, sharply higher than forecasts of earnings of $3.42 per share.
"Given the difficult market conditions, we are particularly pleased to be able to report strong results for the second quarter," said Lloyd Blankfein, the firm's chief executive. "We are realistic about the market challenges we face, but times of market dislocation also produce opportunities, and we will continue to take advantage of the most attractive of these as they arise."
Certainly, Goldman is not insulated from the pressures facing the Street. It had a loss of $775 million on investments tied to subprime, including a loss of $500 million from hedges.
And earnings overall, while much better than expected, were down 11 percent from the gangbusters quarter of a year ago. Last week, it cut hundreds of its investment banking staff, Reuters reports. In its quarterly report, the firm said it reduced employment by 1 percent.
A more important turning point may be a plan by Goldman to deal with a prominent victim of the credit crunch. Anousha Sakoui of the Financial Timesreports that Goldman is nearing a $7 billion restructuring of a structured investment vehicle formerly run by a London hedge fund, Cheyne Capital. The paper says it would be the first collapsed S.I.V. to be restructured and could herald a wave of similar deals on S.I.V.'s that hold some $200 billion in assets.
Under the plan, a slice of the S.I.V.'s assets will be auctioned off to establish a market price. Then Goldman will create a new off-balance-sheet vehicle to buy the assets.
"For Goldman, it's a real coup," says John Foley on Breakingviews.com. "The bank gets the kudos for cutting the S.I.V. knot, and probably a front-row seat on any further restructuring."
Goldman's gains in the quarter were driven in part by asset management, where net revenue climbed 10 percent, to $1.16 billion. Net revenue in investment banking fell 2 percent, to $1.69 billion, but was up 44 percent from the first quarter of 2008.
AFP - European equity prices shot higher on Tuesday as oil prices retreated, helping to offset market concerns about soaring inflation and sliding investor confidence, traders said.
Reuters - Global entertainment and media revenue
is forecast rising by an average of 6.6 percent a year to $2.2
trillion by 2012, boosted by advertising-supported digital and
mobile media and an explosion in the adoption of broadband.
Reuters - The economy of California, the
most populous U.S. state, will remain weak this year as the
downturn in its housing market persists, but strong exports and
agricultural activity will help offset that drag, according to
a UCLA Anderson report released on Wednesday.
Reuters - The economy will likely avoid a
formal recession, but its outlook through the end of next year
is decidedly "subprime" with the deep housing downturn
restraining growth to just above 1 percent, a UCLA Anderson
Forecast report released on Wednesday said.
Reuters - Movie studio DreamWorks SKG is close
to a deal with India's Reliance ADA Group to form a new movie
venture, the Wall Street Journal reported on Tuesday, citing
people familiar with the talks.
Reuters - Hennes & Mauritz (HMb.ST), the
world's third-biggest clothing retailer by sales, posted
second-quarter pretax profits and May sales above market
expectations on Wednesday, helped by a weak U.S. dollar and
good weather.
Reuters - Citigroup Inc has offered early
retirement to the 1,350 employees of its Japanese consumer
finance unit, as the subprime-hit U.S. bank retreats from
consumer lending in the world's second-largest economy.
Reuters - Office goods supplier Staples
has won approval from the European Commission for its
1.7 billion euro ($2.64 billion) takeover bid for Dutch peer
Corporate Express .
AFP - European equity prices shot higher on Tuesday as oil prices retreated, helping to offset market concerns about soaring inflation and sliding investor confidence, traders said.