It's life, but not as we knew it

Either we are twice as smart or twice as inattentive as we used to be. Once, families sat down to watch The Two Ronnies, and everybody in thrall was highly irritated when the phone rang.
Source: Latest Business News from Times Online | 14 Aug 2008 | 9:27 pm

King opposes Treasury's liquidity plans

Tensions between the Treasury and the Bank of England mounted yesterday as Mervyn King, the Bank’s Governor, abruptly dismissed measures being considered by Alistair Darling to end the mortgage drought.
Source: Latest Business News from Times Online | 14 Aug 2008 | 7:58 pm

Wall St pares losses, helped by techs (Reuters)

Reuters - The Nasdaq turned positive on Thursday as investors snapped up beaten-down big-cap technology shares, including Research In Motion , while a rebound by financial companies after two days of losses helped the S&P 500 and the Dow to pare losses.

Source: Yahoo! News: Business | 14 Aug 2008 | 2:20 pm

You Can Sell The House, Under Replacement Value

Source: 24/7 Wall St. | 14 Aug 2008 | 2:20 pm

Energy Stocks: Natural gas inventories step up as energy stocks dips

Cooler-than-expected summer weather in the Northeast is expected to cause a build up in natural gas supplies, while energy stocks retreat across the board after a big rise in the previous session.

Source: MarketWatch.com - Top Stories | 14 Aug 2008 | 2:16 pm

Stocks fall after disappointing inflation data

NEW YORK -- Stocks extended their decline today after the Labor Department reported another hefty jump in consumer prices.

Source: L.A. Times - Business | 14 Aug 2008 | 2:15 pm

London Markets: Mineral extractors shore up London shares

Shares in London recovered on Thursday, lifted by a strong performance from oil producers and mineral extractors such as BP and BHP Billiton.

Source: MarketWatch.com - Top Stories | 14 Aug 2008 | 2:15 pm

Home prices down 7.6%

Real estate prices continued to post steep year-over-year declines during the three months ended June 30, according to a new report from the National Association of Realtors (NAR).

Source: Business and financial news - CNNMoney.com | 14 Aug 2008 | 2:10 pm

British Air, American, Iberia seek approval for partnership

British Airways, American Airlines and Iberia Thursday said they will ask U.S. and European regulators for permission to create a joint venture that would see them cooperate on fares, routes and schedules across the Atlantic.

Source: MarketWatch.com - Top Stories | 14 Aug 2008 | 2:10 pm

Futures Movers: Crude futures pressured as data show contracting economies

Crude-oil futures rose for a second day Thursday, as bullish sentiment continued after the U.S. government reported a bigger-than-expected decline in gasoline inventories.

Source: MarketWatch.com - Top Stories | 14 Aug 2008 | 2:10 pm

Wal-Mart says 2Q profit up 17%, raises outlook

NEW YORK -- Wal-Mart Stores Inc. posted a 17 percent increase in second-quarter profit Thursday and raised its full-year earnings forecast, helped by cost cuts and a renewed focus on low prices that is attracting financially squeezed shoppers around the world.

Source: L.A. Times - Business | 14 Aug 2008 | 2:08 pm

Consumer woes hit stocks

Stocks slipped Thursday morning on worries about the consumer spending outlook following a jump in a key inflation index and a mixed earnings forecast from Wal-Mart Stores.

Source: Business and financial news - CNNMoney.com | 14 Aug 2008 | 2:02 pm

CBS (CBS): A Chance To Spin-Off CNET

A chance like this only comes along rarely. CBS (CBS), which is trading at just above $17, down from a 52-week high of $32.97, could spin-off CNET. The large collection of tech websites has found new success under the CBS umbrella.

CNET.com posted a 22% increase in unique visitors over July 2007, pointing to early success of its beta release, which launched in June and officially launches later this month.

BNET.com, another part of the operation, posted a 19% increase in unique visitors over last month.

PaidContent.org questioned the numbers, but they still seem pretty good.

CBS bought CNET for $1.8 billion. Based on CNET's improving fortunes, it must be worth much more than that, perhaps $2.5 billion.

In less than a year, CBS's market cap has gone from over $25 billion to under $12 billion.The TV network company now has a chance to partially spin-off the tech company operation at a valuation which should help the CBS share value.

Douglas A. McIntyre

Source: 24/7 Wall St. | 14 Aug 2008 | 2:02 pm

Inflation surges by 5.6%

The annual inflation rate surged to 5.6% in July - the highest point in 17 years.

Source: Business and financial news - CNNMoney.com | 14 Aug 2008 | 2:00 pm

Financial Stocks: PMI surges at open, lifting financials

NEW YORK (MarketWatch) - Shares of PMI Group surged almost 50% early Thursday after the mortgage insurer said it reached a deal to sell its Australian assets, lifting the fortunes of its fellow insurers and pushing the broader sector higher at the open.

Source: MarketWatch.com - Top Stories | 14 Aug 2008 | 1:57 pm

Bond Report: Treasurys gain as investors digest jobless claims, inflation data

Treasury prices trade higher, playing off U.S. economic data showing persistently high jobless claims as well as a bigger-than-expected rise in inflation at the retail level.

Source: MarketWatch.com - Top Stories | 14 Aug 2008 | 1:52 pm

Market Snapshot: U.S. stocks suffer opening losses as consumer prices jar bulls

U.S. stocks open lower after the government said a key measure of inflation had climbed more than anticipated in July, overshadowing enthusiasm over Wal-Mart’s quarterly profit and improved full-year outlook.

Source: MarketWatch.com - Top Stories | 14 Aug 2008 | 1:51 pm

Wal-Mart profit up 17 percent

NEW YORK (Reuters) - Wal-Mart Stores Inc reported a 17 percent rise in profit and raised its full-year forecast as shoppers seek low prices, but cautioned that a difficult global economy was heaping pressure on consumers.

Source: Reuters: Business News | 14 Aug 2008 | 1:47 pm

Wall St opens lower on inflation, jobs worry

NEW YORK (Reuters) - Stocks opened lower on Thursday following data that showed consumer price pressures mounted in July and the labor market weakened, clouding the corporate profit outlook.

Source: Reuters: Business News | 14 Aug 2008 | 1:46 pm

Budget shoppers boosting Wal-Mart

The world's largest retailer, Wal-Mart, sees profits increase as US consumers looks for bargain deals.
Source: BBC News | Business | World Edition | 14 Aug 2008 | 1:41 pm

German, French economies contract in second quarter

Data show that German and French economies contracted during the second quarter compared to the first quarter, the latest signs showing how Europe hasn't been able to decouple from the U.S. slowdown.

Source: MarketWatch.com - Top Stories | 14 Aug 2008 | 1:41 pm

Beating the Market, With Caution (Today From Barron's)

The real danger is being out of the market when the skies clear.

Source: SmartMoney.com | 14 Aug 2008 | 1:38 pm

Sterling losses gather momentum

The pound falls further, hitting its lowest level in almost two years against the dollar on fears the UK may fall into recession.
Source: BBC News | Business | World Edition | 14 Aug 2008 | 1:37 pm

Wal-Mart says 2Q profit up 17 pct, raises outlook (AP)

AP - Wal-Mart Stores Inc. posted a 17 percent increase in second-quarter profit Thursday and raised its full-year earnings forecast, helped by cost cuts and a renewed focus on low prices that is attracting financially squeezed shoppers around the world.

Source: Yahoo! News: Business | 14 Aug 2008 | 1:36 pm

Consumer prices up sharply, job market softens

WASHINGTON (Reuters) - Consumer prices climbed at twice the rate expected in July and job prospects kept softening last week, according to Labor Department reports on Thursday that pointed to swelling economic stress.

Source: Reuters: Business News | 14 Aug 2008 | 1:35 pm

Wal-Mart profit climbs 17%; company sounds caution

Wal-Mart Stores Inc. reports a 17% profit rise in second-quarter profit and ups its annual earnings goal as bargain-hunting shoppers, hurt by the rising cost of food and gasoline, flocked to the retailer’s stores known for their low prices.

Source: MarketWatch.com - Top Stories | 14 Aug 2008 | 1:34 pm

Consumer prices up sharply, job market softens (Reuters)

Reuters - Consumer prices climbed at twice the rate expected in July and job prospects kept softening last week, according to Labor Department reports on Thursday that pointed to swelling economic stress.

Source: Yahoo! News: Business | 14 Aug 2008 | 1:31 pm

Earnings Watch: Updates, advisories and surprises

A roundup of the latest corporate earnings reports and what companies are saying about future quarters.

Source: MarketWatch.com - Top Stories | 14 Aug 2008 | 1:31 pm

US inflation at highest since 1991

US consumer prices rose by 0.8 per cent in July, twice as fast as expected, damping hopes that falling crude oil prices and the slowing consumer demand would rapidly ease inflationary pressures
Source: FT.com - US homepage | 14 Aug 2008 | 1:31 pm

Logica rallies on rising sales forecast

Shares in Logica, the computer services group that is shedding jobs in Britain to revive its business, rose by 11 per cent today after the company raised its revenue growth forecast following strong interim growth.
Source: Latest Business News from Times Online | 14 Aug 2008 | 1:31 pm

Energy Watch Part II: Refining Woes Remain (WNR, ALJ, DK, TSO, VLO, XOM, CVX, COP)

It's no secret the oil refining margins have been dropping like a rock for the past few quarters. When pump prices began to approach a US-wide average of about $4/gallon, US drivers started changing their habits.The latest numbers indicate miles driven dropped by 12.2 billion miles, almost 5%, in June. That translates into millions of gallons of gasoline that were either not refined or were not sold. This decrease has hit refiners hard.

The award for largest drop in value goes to Western Refining (NYSE:WNR), down nearly 84% from a 52-week high of $55.72 to close yesterday at $9.23. Next on the list are two refiners that are majority-owned by Isreali parents: Alon USA Energy Inc (NYSE:ALJ) fell by almost 72%, from a high of $41.25 to $10.49; and Delek US Holdings (NYSE:DK) dropped by 69%, from $28.34 to $8.64. Tesoro (NYSE:TSO) fell by 64%, from $65.98 to $18.43, and Valero (NYSE:VLO) fell by nearly 50%, from $75.75 to $34.79.

We could include the refining and marketing operations of major integrated companies like Exxon Mobil (NYSE:XOM), Chevron (NYSE:CVX), and ConocoPhillips (NYSE:COP), which have also lost a ton of money in the past year, but we're saving integrated oil companies until tomorrow's installment.

Every one of these independent refiners faces the same problem: high crude oil prices are compressing profit margins because the full cost of the crude can't be passed on at the pump. Consumers have been voting with their feet. US gasoline consumption has dropped in every one of the last 12 months, and the year-over-year drop in consumption amounts to 2.5%. The US Energy Information Administration (EIA) attributes "almost all" of the drop in consumption to higher prices for crude.

And the situation won't improve. The EIA projects declines in US petroleum consumption through the end of 2009. So, what are the refiners doing to deal with this situation? They're either trying to sell some of their refineries or they're trying to figure out a way to ride out the tide of high crude prices. As the price of crude has fallen over the past few weeks, refining stocks have recovered a bit but all are still quite near 52-week lows.

Selling refineries seems like a non-starter. Who's gonna buy? Another refiner? Private equity? A possibility is a national oil company like Saudi Aramco, which has plenty of capital and is currently building a massive refinery in Saudi Arabia to export refined products. When these exports begin to hit the spot markets, gasoline prices will rise again and local refineries will benefit because they'll be able to sell refined products at the higher spot price.

But there is no evidence for that scenario. What's real is that refiners are in for several more tough quarters. And if US drivers continue the trend of driving less, we could actually be witnessing true demand destruction, not just demand erosion.

Paul Ausick
August 14, 2008

Source: 24/7 Wall St. | 14 Aug 2008 | 1:29 pm

Slow Housing Equals Slow Lawn Mower Market (BGG, TTC)

Source: 24/7 Wall St. | 14 Aug 2008 | 1:22 pm

Nation's foreclosure plague widens

The foreclosure juggernaut lurched forward in July as banks took back 77,295 homes - up 8% in a month and 183% in a year, a report issued Thursday shows.

Source: Business and financial news - CNNMoney.com | 14 Aug 2008 | 1:20 pm

Oil falls towards $115 after rise on U.S. data

LONDON (Reuters) - Oil fell towards $115 a barrel on Thursday after a $3 rise the previous session following a larger-than-expected drop in U.S. crude and gasoline inventories.

Source: Reuters: Business News | 14 Aug 2008 | 1:20 pm

US inflation fastest since 1991

US prices rose by 5.6% in the year to July, the fastest inflation rate for more than 17 years, figures show.
Source: BBC News | Business | World Edition | 14 Aug 2008 | 1:16 pm

Futures Dip on Inflation Data

A higher-than-expected reading of the Consumer Price Index kept traders on the defensive early.

Source: SmartMoney.com | 14 Aug 2008 | 1:15 pm

Vietnam? India? The search for the new China

Dongguan City is the the shoe capital of the world: more footware is made there than anywhere else on the globe. From 2001 to 2007, the value of footware exports from its province of Guangdong doubled from $4.3 billion to $9.2 billion, according to China's state-run news agency. But in the past year, hundreds of factories have left town, driven out by the rapidly rising cost of doing business in China.

Source: Business and financial news - CNNMoney.com | 14 Aug 2008 | 1:12 pm

BA seals alliance with American

British Airways seals a deal with American Airlines that will allow the two carriers to co-operate on fares, routes and schedules.
Source: BBC News | Business | World Edition | 14 Aug 2008 | 1:08 pm

Rising inflation dampens mood on Wall Street

US stocks are set to extend their losing streak after new data pointed to rising inflation and persistently high levels in jobless claims, offsetting a solid set of results from Wal-Mart
Source: FT.com - US homepage | 14 Aug 2008 | 1:01 pm

Wal-Mart profit up 17 percent (Reuters)

Reuters - Wal-Mart Stores Inc reported a 17 percent rise in profit and raised its full-year forecast as shoppers seek low prices, but cautioned that a difficult global economy was heaping pressure on consumers.

Source: Yahoo! News: Business | 14 Aug 2008 | 12:56 pm

Asda sales rise as Tesco steps up price war

Asda, Britain’s second biggest supermarket chain, reported sales up 5.5 per cent in the second quarter after shoppers sought out cheaper food deals to as inflation soars.
Source: Latest Business News from Times Online | 14 Aug 2008 | 12:51 pm

Wal-Mart reports surge in earnings, sales

Retail behemoth Wal-Mart Stores reported a surge in quarterly profit Thursday, topping Wall Street's expectations.

Source: Business and financial news - CNNMoney.com | 14 Aug 2008 | 12:46 pm

Hummer anyone? Who might buy the iconic brand in these lean, green times.

Since General Motors announced in June that it was considering selling the iconic Hummer brand, speculation has surrounded who would buy it.
Source: BBC News | Business | World Edition | 14 Aug 2008 | 12:45 pm

BA announces American Airlines and Iberia deal

American Airlines, British Airways and Iberia said today that they have signed a joint business agreement on flights between North America and Europe and plan to expand global cooperation.
Source: Latest Business News from Times Online | 14 Aug 2008 | 12:39 pm

The Smell of Stagflation

Source: 24/7 Wall St. | 14 Aug 2008 | 12:39 pm

Jobless claims fall less than expected

The number of newly laid-off workers filing applications for unemployment benefits fell less than expected last week, indicating continued stress in labor markets from the weak economy.

Source: L.A. Times - Business | 14 Aug 2008 | 12:36 pm

Jobless claims fall, still at lofty levels

WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless benefits fell by 10,000 last week but remained at levels that show labor markets under severe strain.

Source: Reuters: Business News | 14 Aug 2008 | 12:35 pm

Nuclear puzzle

EDF could still be the best bet to buy UK nuclear industry
Source: BBC News | Business | World Edition | 14 Aug 2008 | 12:33 pm

The New Sheriff

Eliot Spitzer was spotted walking up Park Avenue in Midtown Manhattan last week, eyelids pink with weariness, shoulders stooped, and—strikingly—all alone.

Barely anyone in the lunchtime crowd looked twice at the disgraced former governor as he trudged past the headquarters of Citigroup, J.P. Morgan Chase, and other banking giants he had once impaled on a prosecutorial lance.

That same day, Andrew Cuomo—Spitzer's successor as New York's attorney general—had a lieutenant whip off letters to J.P. Morgan, Morgan Stanley, and Wachovia alerting them they were in his sights. He was fresh from negotiating billion-dollar agreements with UBS and Citigroup over the promotion of auction-rate securities, the letters said, and he wanted more.

Agreements with J.P. Morgan and others may come as soon as today.
 
It is Cuomo's turn in the crusader limelight, and despite rough edges and ambition reminiscent of his predecessor, he's winning acclaim for his focus, flexibility, discipline, and consumer-friendly results (which eluded Spitzer as top lawyer for the state) that often sets a national agenda. 

"He seems to really put investors first," says Jacob Zamansky, a securities lawyer specializing in cases against brokerage firms and a critic of the reimbursements clients received in Spitzer's landmark analyst and mutual fund trading settlements. "Spitzer seemed more interested in photo opportunities than in getting real reform."

A lawyer at a bank that has negotiated an auction-rate settlement says the comparison is specious because the circumstances and cash pools involved are widely disparate. But he agrees with Zamansky that Cuomo's team has been defter negotiators than Spitzer's rough-riding team of prosecutors.

"There's less complaining from the industry people about zealots and bullies," Zamanksy said. "You have to be reasonable with the firms, and I think the Cuomo people get credit for that."

Cuomo's approach to the auction-rate mess, in which investors have been blocked from cashing in securities that brokers had promoted as equivalent to cash in the bank, is illustrative. Cuomo in recent days squeezed agreements from UBS and Citigroup to buy back $26 billion of securities from clients and to pay New York and other state regulators $250 million in fines. Merrill Lynch—pressured by Cuomo and even more so by his Massachusetts counterpart—has volunteered to pony up $10 billion to make its customers whole.

But when Morgan Stanley chimed in last week with an offer to redeem a mere $4.5 billion of auction-rate bonds from clients, Cuomo was having none of it.

"Too little, too late," a Cuomo spokesman said.

Cuomo is flexible, admirers say, but no pushover.

There are other nuanced differences.

Spitzer's posse of top lawyers was smart and brash—and tightly harnessed by their politically ambitious and temperamental boss. Cuomo's quieter crew of long-time prosecutors tends to share a mutual respect for each other and little political loyalty to their boss. Few had ever worked with Cuomo before, but many have worked with each other.

Cuomo's chief of investor protection, David Markowitz, 37, who has been central in the auction-rate investigations, for example, helped crack a complex insider-trading scandal two years ago as assistant regional director at the Securities and Exchange Commission office in New York. And he knew Benjamin Lawsky, now Cuomo's special assistant and deputy counsel, who as an assistant U.S attorney in Manhattan was lead prosecutor on the criminal case that brought convictions of employees from Goldman Sachs, Merrill, and Morgan Stanley.
 
Other Cuomo lieutenants who earned their spurs with the New York federal prosecutor include the deputy attorney general for criminal justice, Robin Baker, a veteran of several terrorism prosecutions; the deputy attorney general for social justice, Mylan Denerstein; and Cuomo's chief of staff,  Steven Cohen, who, after his public-service stint, defended high-profile corporate clients like Enron and ImClone Systems. Cohen, who helps manage the attorney general's 780 lawyers, also was the court-appointed independent monitor for Deutsche Bank as part of Spitzer's hallmark global research analyst's settlement. 

Another top Cuomo aide—his economic justice deputy, Eric Corngold—developed a wide following among younger lawyers in his 16 years with the U.S. attorney's office in Brooklyn and has lured some of them to his new gig.

Corngold—after securing some of the first options-backdating indictments, in the Symbol Technologies case toward the end of his Brooklyn term—recently ignited Cuomo's office with a courtroom victory against Dell Computer for deceptive computer-repair insurance and financing programs and was involved in the investigation of UBS's auction-rate practices.

It certainly wasn't personal magnetism that drew these lawyers to Cuomo, though they are a tribute to his ability to delegate. Much of the credit for the talent goes to a transition committee led by a former New York attorney general, Robert Abrams, that says it worked largely independent of the attorney general.

Throughout his career, the 50-year-old Cuomo has exhibited little of the brash charm that helped Spitzer, one year his junior, turn New York's attorney general's office into a national platform and stepping-stone to his brief tenancy in the New York governor's mansion. Cuomo is better described as dogged, a perfectionist, and focused (some say obsessed)—organizational traits that served him relatively well as Secretary of Housing and Urban Development in the Clinton administration and as political aide to his father, Mario, the former New York governor and silver-tongued icon of liberal Democrats. They were not political virtues, however, in his failed bid to nab New York's Democratic nomination for governor in 2002.

As attorney general, Spitzer won renown for creating his battles. He sniffed out biased research on Wall Street that had gone unremarked for decades (shaming the S.E.C. in the process), confronted mutual fund trading abuses, took on questionable insurance-industry practices and pursued what he called excessive executive pay by battling former New York Stock Exchange chief executive Dick Grasso.

Cuomo often follows the headlines. His widely publicized investigations of the mortgage and student-loan industries were launched well after the crises surfaced, and he has been competing with Massachusetts' top securities regulator, William Galvin, for bragging rights to auction-rate prosecutions.

But he's also taken his office in new, populist directions—winning agreements from social-networking site Facebook and internet service providers Verizon, Time Warner Cable, and Sprint on restricting sexually explicit material; prosecuting pharmacy benefits managers for switching prescription drugs without informing patients; chastising the Spitzer administration for its jihad against a political rival in the state senate; challenging local municipalities for abusing state pension money and—repudiating one of Spitzer's most prominent crusades—deciding not to challenge a court decision that allowed Grasso to keep his $139 million pay package.

When Cuomo unveiled his top departmental appointments, he vowed to monitor Wall Street with the same grit as Spitzer, but quickly cautioned reporters that the atmosphere on Wall Street was less confrontational. Now that the credit crisis has infected credit cards and other student and consumer loans, it is back near the top of his agenda—revealing an admirable, or some would say highly political, flexibility. As the Washington Post has noted, Cuomo has all but abandoned the priorities of gun control and health-care fraud that he highlighted when he took office.

Cuomo also has been criticized for being too accommodative. He came on strong early this year in attacking government-sponsored mortgage companies Fannie Mae and Freddie Mac for failing to ensure that home-pricing appraisals were honest, but accepted a settlement in March that extracted little but a code of conduct on appraisals that some say could result in higher consumer costs. He also pursued the hot-button issue of lax bond-rating-agency standards, but his June settlement with Moody's Investors Service, Standard & Poor's, and Fitch Ratings focused solely on residential mortgage-backed securities—weak tea, some critics say, when the agencies' overoptimistic ratings have infected the world economy and caused billions of dollars of losses for banks and investors.

But Cuomo's realpolitik approach may prove more beneficial to consumers than Spitzer's prosecutorial zeal.

"He's simply been more effective," Zamansky says.


 

Related Links
Picking Up the Pieces
Cuomo the Cop
Cuomo Dusts Off the Spitzer Playbook


Source: Portfolio.com: Top 5 | 14 Aug 2008 | 12:30 pm

Executive high-flyers cut back on private jets

Executives of major corporations are being forced to cut back on private jets, says the world's largest supplier of charter aircraft.
Source: Telegraph Business | 14 Aug 2008 | 12:17 pm

Swiss Life buys 26 per cent of Germany's MLP

Swiss Life, the insurer, today announced it has acquired a 26.75 per cent stake in MLP, the German investment adviser, but denied it was planning to make a hostile bid for the group.
Source: Latest Business News from Times Online | 14 Aug 2008 | 12:16 pm

Flat UK sales hit Inbev earnings

Belgium-based brewer Inbev sees a fall in UK beer sales as European earning fall.
Source: BBC News | Business | World Edition | 14 Aug 2008 | 12:08 pm

Tui Travel bucks trend with 39pc profits jump

Tui Travel has delivered a much needed fillip to the UK leisure sector after claiming it is seeing no sign of a slowing in demand despite the consumer downturn and credit crisis.
Source: Telegraph Business | 14 Aug 2008 | 12:08 pm

Estee Lauder quarterly profit tops view

NEW YORK (Reuters) - Cosmetics company Estee Lauder Cos Inc posted better-than-expected quarterly profit on Thursday, helped by higher sales in all categories and the weak U.S. dollar, and its shares rose nearly 7 percent.

Source: Reuters: Business News | 14 Aug 2008 | 12:07 pm

Smiling on Wal-Mart

What's clear is that even amid a recession, consumers are buying apparel, electronics, and other nonessentials if the price is right.

The biggest retailer and discounter, Wal-Mart Stores, has reported a 17 percent gain in second-quarter earnings, exceeding estimates. And the chain has raised its forecast for full-year earnings, predicting earnings of as much as $3.50 per share, higher than Wall Street estimates.

Sales overseas shone again for Wal-Mart, rising 17 percent to $25.3 billion. More important, sales in the United States did better than expected as well. Sales at stores open at least year, excluding fuel sales, rose 4.5 percent, higher than the company's estimates.

"We have improved customer traffic and ticket and overall sales growth in our markets," Wal-Mart's chief executive, Lee Scott, said. "While inflation and higher fuel costs are pressuring suppliers, retailers, and customers worldwide, we're confident that Wal-Mart is well-positioned for this economy."

But the company also had some cautionary notes. It warned that earnings for the current quarter could fall short of Wall Street estimates. And it indicated that sales are volatile week to week.

August has been weak for retailers as the effect of the government stimulus checks fades. Wal-Mart has forecast that U.S. same-store sales will rise 1 to 2 percent this month, which would be its smallest gain since March.




Related Links
This Week, All Eyes On C.P.I.
Big Stores, Big Woes
Week of Grim Earnings May Stifle Stocks


Source: Portfolio.com: Top 5 | 14 Aug 2008 | 12:00 pm

Wal-Mart profit rises 17%

The world's largest retailer reported a 17 per cent rise in quarterly profit and raised its full-year earnings view, as shoppers seek low prices on food, health-care products and electronics its stores
Source: FT.com - US homepage | 14 Aug 2008 | 12:00 pm

FSA to blame for soaring oil prices, says ex-US official

The UK's financial industry watchdog, the Financial Services Authority, has been blamed for soaring oil prices by an American economics professor.
Source: Telegraph Business | 14 Aug 2008 | 12:00 pm

Top Pre-Market Analyst Upgrades (BIOF, CSX, CYH, PSYS, SLH, UHS)

These are some of the top analyst upgrades and positive calls we are seeing in trading early this Thursday morning:

• Biofuel Energy (BIOF) Raised to Hold at Citigroup.
• CSX Corp. (CSX) Raised to Buy at UBS.
• Community Health Systems (CYH) Started as Outperform at Baird.
• Psychiatric Solutions (PSYS) Started as Outperform at Baird.
• Solera Holdings (SLH) Started as Buy at SunTrust.
• Universal Health Services UHS) started as Outperform at Baird.

Jon C. Ogg
August 14, 2008

Source: 24/7 Wall St. | 14 Aug 2008 | 11:35 am

Dollar surge causes grief in Japanese households

Foreign exchange traders in Tokyo warned of future “extreme volatility” on markets as the US dollar continues its surge against most leading currencies and dealing floors brace for severe ructions in the massive yen carry trade.
Source: Latest Business News from Times Online | 14 Aug 2008 | 11:34 am

Brokerage Firms Again Downgrading Each Other (C, GD, GS, JEF, KBW, LEH, MS, NCC, SGR)

These are some of the top analyst downgrades or negative calls we are seeing this morning, and you'll notice that brokerage firm stocks are again the targets of many downgrades:

• Citigroup (C) Cut To Underperform From Neutral at Merrill Lynch.
• General Dynamics (GD) Cut to Neutral at JPMorgan.
• Goldman Sachs (GS) Cut to Underperform from Buy at Merrill Lynch.
• Jefferies (JEF) Cut to Sell at B of A.
• Keefe Bruyette & Woods (KBW) Cut to Sell at B of A.
• Lehman (LEH) Cut to Underperform from Hold at Merrill Lynch.
• LSI Industries (LYTS) Cut to Underperform at Baird.
• McDermott (MDR) Cut to Hold at Citigroup.
• Morgan Stanley (MS) Cut to Neutral from Buy at Merrill Lynch.
• National City (NCC) Cut to Neutral from Buy at Ladenburg Thalmann.
• Shaw Group (SGR) Cut to Sell at Citigroup.

Obviously there are a few calls thrown in here that aren't brokerage firms or investment banking firms, but the brokers are back to killing each other again for the third day this week.

Jon C. Ogg
August 14, 2008

Source: 24/7 Wall St. | 14 Aug 2008 | 11:31 am

24/7 Wall St. Most Overpaid CEO Of The Day: Power Medical (PMII) CEO Michael Whitman

Power Medical Interventions (PMII) CEO Micheal Whitman is being paid an extraordinary base salary of $385,000 this year, according to the company proxy. In the meantime, his company is posting remarkably poor numbers.

Initial indications are that PMII's shares could open down 40% today. The stock has already dropped from a 52-week high of $14.64 to $5.

Sales in the three months ended June 30, 2008 remained flat at $2.2 million compared to the first quarter of 2008, and decreased by 9% compared to $2.4 million in sales during for the second quarter of 2007.

Net loss applicable to common shareholders for the three months ended June 30, 2008 was $11.5 million, or $(0.67) per basic and diluted share, compared to net loss applicable to common shareholders of $10.1 million or $(2.69) per basic and diluted share for the corresponding period in 2007

The company is low on cash. The unrestricted cash and cash equivalents balance as of June 30, 2008 was approximately $11.6 million

Of course, PMII had an excuse for all of this. It has released a new technology and this is slowing the rate of adoption of its products.

Under the circumstances, Whitman is overpaid.

Douglas A. McIntyre

Source: 24/7 Wall St. | 14 Aug 2008 | 11:30 am

Greenspan sees housing bottom - report

Alan Greenspan, former chairman of the Federal Reserve, projects that housing prices could bottom out in 2009 - or maybe later - according to a news report.

Source: Business and financial news - CNNMoney.com | 14 Aug 2008 | 11:27 am

Barclays may write down 1.5 billion pounds more, says Goldman

(Reuters) - Barclays Plc may need to write down 1.5 billion pounds more over the next 18 months, analysts at Goldman Sachs said adding the British bank has little room to absorb further material losses without the dividend potentially being cut or paid in shares.

Source: Reuters: Business News | 14 Aug 2008 | 11:24 am

Europe's major economies contract

The 15 economies of the eurozone contract by 0.2%, heightening fears the area is sliding towards recession.
Source: BBC News | Business | World Edition | 14 Aug 2008 | 11:21 am

How to lure Gen Y workers? Do good

When it comes to recruiting the Millennial Generation, it isn't only about salary ... it's about community service.

Source: Business and financial news - CNNMoney.com | 14 Aug 2008 | 11:20 am

Eurozone economy contracts for the first time

Economic activity in the eurozone fell in the three months to the end of June for the first time since the launch of the euro a decade ago
Source: FT.com - US homepage | 14 Aug 2008 | 11:00 am

UnionBanCal says MUFG's $3bn bid too low

Mitsubishi UFJ Financial Group suffered a setback in its $3bn bid to take 100 per cent control of Union Bank of California after a special committee set up to advise shareholders on the offer, rejected...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 14 Aug 2008 | 10:59 am

Urban Outfitters Q2 beats Wall Street (Reuters)

Reuters - Clothing and home goods retailer Urban Outfitters Inc posted a 79 percent jump in quarterly profit, beating market estimates, driven by strong same-store sales across all its branded stores and fewer markdowns that boosted gross profit margins.
Source: Yahoo! News: Business | 14 Aug 2008 | 10:54 am

Urban Outfitters Q2 beats Wall Street

(Reuters) - Clothing and home goods retailer Urban Outfitters Inc posted a 79 percent jump in quarterly profit, beating market estimates, driven by strong same-store sales across all its branded stores and fewer markdowns that boosted gross profit margins.

Source: Reuters: Business News | 14 Aug 2008 | 10:54 am

21 ways to stomach a sour market

Feel like you're getting nothing but lemons from the stock market? Allow us to introduce nearly two dozen recipes for lemonade.

Source: Business and financial news - CNNMoney.com | 14 Aug 2008 | 10:48 am

Tui enjoys sharp rise in freight rates

Tui saw a sharp increase in the average shipping rates paid by its customers in the first half of this year, a surprisingly strong position which could strengthen its bargaining position in the sale of...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 14 Aug 2008 | 10:45 am

European economy contracts for first time since euro launch

Europe's economy contracted in the second quarter - the first time it has shrunk since the launch of the euro almost a decade ago.
Source: Telegraph Business | 14 Aug 2008 | 10:44 am

Wal-Mart (WMT) Refuses To Knuckle Under, Saved By International

Wal-Mart refuses to play ball with the recession. Its July same-store sales were not tremendous, its most recent quarter was, under the circumstances, spectacular. The figures were for the period ending July 31.

Income from continuing operations for the quarter were $3.385 billion, an increase of 9.3% from $3.097 billion in the second quarter last year. Net sales for the period were $101.6 billion, an increase of 10.4% from $92.0 billion in the second quarter last year.

Wal-Mart has both the economic slowdown and the law of large numbers working against it.

Wal-Mart's earnings are a testament to the brilliance of building a large overseas business, even it the company did stumble in South Korea and Germany.

Revenue outside the US rose 17% to $25.3 billion. US revenue was only up 8%, which is remarkable on its own.

Wal-Mart said all of the usual things about employee performance and operating efficiency. It pushed its everyday low prices as the reason for its success.

But, the reality of the Wal-Mart miracle these days is in the big and medium-sized cities in Mexico and China. Where it does not have much competition. It also upped its EPS targets. The truth of the matter is that it is likely that none of that comes from the US

Source: 24/7 Wall St. | 14 Aug 2008 | 10:38 am

Spain discussing stimulus package

Spanish leaders are meeting to finalise a package of reforms aimed at tackling the cooling economy.
Source: BBC News | Business | World Edition | 14 Aug 2008 | 10:35 am

Drop-Off In Driving To Undercut Economy

Americans drove 12.2 billion miles less in June than they did in the same month a year ago. That is a drop of almost 5%.

The fall-off in activity is likely to help gas prices move down, but it is also sure to undermine any recovery in the retail, auto, fast food, or hospitality industries.

The fresh argument is that driving less will bring gas prices back toward $3. But, oil is rising again, getting closer to $120 a barrel, so crude may offset the dying American habit of taking to the road.

Whatever direction gas prices go, several industries cannot recover if many fewer people put the key in the ignition.

The automotive industry is moving production to smaller cars, but if "miles driven" continue to fall, the replacement rate on vehicles will get worse even if the new chariots are more fuel-efficient. That stone in the water sends ripples to tires companies and auto parts suppliers.

The hotel and restaurant industries cannot make any progress if consumers will not race their engines. The margins on hotels were never terribly good. Falling occupancy will drive them into the red.

Fast food is almost entirely dependent on a restless public. Home-bound people eating TV dinners are a nightmare for that business.

And, owning a gas station is not what it used to be. Maybe that is why Exxon (XOM) dropped out of it.

Douglas A. McIntyre

Source: 24/7 Wall St. | 14 Aug 2008 | 10:16 am

Apollo to face grilling over Dutch fund

Apollo Global Management, the private equity group, is to face questions from investors about the fate of its poorly performing Amsterdam-listed fund after its US parent company revealed a first-quarter loss of $96.4m
Source: FT.com - US homepage | 14 Aug 2008 | 10:15 am

Apollo to face grilling over Dutch fund

Apollo Global Management, the private equity group, will on Thursday face questions from investors about the fate of its poorly performing Amsterdam-listed fund, which reported its third quarterly drop...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 14 Aug 2008 | 10:15 am

United Artists chief Wagner to leave

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 14 Aug 2008 | 10:13 am

Europe teeters on the brink of recession

Europe today edged closer to recession for the first time since the single currency was introduced in 1999, after the economy shrank by 0.2 per cent during the second quarter.
Source: Latest Business News from Times Online | 14 Aug 2008 | 10:12 am

BP says it has reopened gas taps into Georgia pipeline

Energy giant BP said on Thursday that it had resumed pumping gas into the South Caucasus pipeline in Georgia and that the Baku-Supsa oil link remained shut. "We are pumping...
Source: Infocious RSS raw feed - channel BNewsBusiness | 14 Aug 2008 | 10:06 am

Incentra Solutions Announces Extension of Preferred Stock Redemption Date

BOULDER, Colo., Aug. 14 /PRNewswire-FirstCall/ -- Incentra Solutions, Inc. (OTC Bulletin Board: ICNS), a provider of complete IT services and solutions to enterprises and
Source: Infocious RSS raw feed - channel BNewsBusiness | 14 Aug 2008 | 10:00 am

ViewCast Corporation Reports 2008 Second-Quarter Financial Results

Year-Over-Year Uptrend Continues for Revenues, Gross Profit, Operating Income, EBITDA; Reports Net Income Versus Loss in Prior-Year Quarter PLANO, Texas, Aug. 14...
Source: Infocious RSS raw feed - channel BNewsBusiness | 14 Aug 2008 | 10:00 am

Home foreclosure filings up 55 percent in July

NEW YORK (Reuters) - U.S. foreclosure activity in July rose 55 percent from a year earlier as a slump in once-sizzling housing markets forced yet more borrowers to default on their mortgages, according to a monthly report.

Source: Reuters: Business News | 14 Aug 2008 | 9:59 am

ThyssenKrupp raises profit forecast

ThyssenKrupp, the German steelmaker and industrial conglomerate, on Thursday raised its profit forecast despite a sharp fall in its third-quarter earnings.ThyssenKrupp said it now expected pre-tax profits...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 14 Aug 2008 | 9:41 am

Being an oil trader

BBC reporter finds out what it was like trading in oil
Source: BBC News | Business | World Edition | 14 Aug 2008 | 9:32 am

BoostMyScore.NET Declares FICO 08 Piggybacking Credit Score Elimination a Propaganda Scare

DENVER, Aug. 14 /PRNewswire/ -- In Congressional testimony last Tuesday, Fair Isaac Corp., creator of the FICO credit score, acknowledged that a decision to end...
Source: Infocious RSS raw feed - channel BNewsBusiness | 14 Aug 2008 | 9:30 am

British Land's Cheesegrater London building to be delayed

Property group British Land has admitted that its "Cheesegrater" development in the City of London is likely to be delayed until at least 2012 as conditions in the market remain tough.
Source: Telegraph Business | 14 Aug 2008 | 9:22 am

British Land's Cheesegrater London building to be delayed

Property group British Land has admitted that its "Cheesegrater" development in the City of London is likely to be delayed until at least 2012 as conditions in the market remain tough.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 14 Aug 2008 | 9:22 am

Europe falters as Germany and France contract

Europe's two biggest economies shrank in the second quarter providing further evidence that the worst of the slowdown in the global economy is not yet behind us.
Source: Telegraph Business | 14 Aug 2008 | 9:20 am

Europe falters as Germany and France contract

Europe's two biggest economies shrank in the second quarter providing further evidence that the worst of the slowdown in the global economy is not yet behind us.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 14 Aug 2008 | 9:20 am

Scandinavian SAS swings to 2Q loss; more job cuts

Scandinavian airline SAS AB reported a second-quarter loss Thursday because of high fuel costs and weaker demand, and warned of further job cuts and fleet reductions. The Stockholm-based
Source: Infocious RSS raw feed - channel BNewsBusiness | 14 Aug 2008 | 9:19 am

InBev 2Q profit climbs 8.6 percent on tax savings

Brewer InBev SA's second-quarter profit climbed 8.6 percent despite flat sales and higher costs as it paid less tax. InBev made 542 million euros ($808 million) for the three months...
Source: Infocious RSS raw feed - channel BNewsBusiness | 14 Aug 2008 | 9:13 am

EU: Euro economy shrinks in second quarter

EU statistics show the euro-zone economy braking sharply in the second quarter as growth shrank in major economies Germany, France and Italy shrank. Growth in the 15 countries that share
Source: Infocious RSS raw feed - channel BNewsBusiness | 14 Aug 2008 | 9:10 am

MUFG: Willing to talk with UnionBanCal on takeover

Mitsubishi UFJ Financial Group said Thursday that there is no immediate change to its plans to fully acquire UnionBanCal but it is willing to negotiate after the U.S. bank rejected its...
Source: Infocious RSS raw feed - channel BNewsBusiness | 14 Aug 2008 | 9:02 am

ePages Trusts Moneybookers for Payments

LONDON and HAMBURG, Germany, August 14 /PRNewswire/ -- - Leading Provider of e-commerce Solutions Integrates Moneybookers for Global Reach and Payments...
Source: Infocious RSS raw feed - channel BNewsBusiness | 14 Aug 2008 | 9:00 am

Bellway suffers 'avalanche' of cancelled sales

Housebuilder Bellway said the number of property sales agreed over June and July plunged 45pc and may continue to fall at the same rate for the rest of the year.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 14 Aug 2008 | 9:00 am

Bellway suffers 'avalanche' of cancelled sales

Housebuilder Bellway said the number of property sales agreed over June and July plunged 45pc and may continue to fall at the same rate for the rest of the year.
Source: Telegraph Business | 14 Aug 2008 | 9:00 am

Silverado Announces Continued High Grade Gold and Antimony Mineralization in Drill Cores at Nolan Creek

VANCOUVER, Aug. 14 /PRNewswire-FirstCall/ - Silverado Gold Mines Ltd. (the "Company" or "Silverado") SLGLF OTCBB, SLGL Frankfurt,
Source: Infocious RSS raw feed - channel BNewsBusiness | 14 Aug 2008 | 9:00 am

Commodity-led advance for European stocks

European equity markets continued a volatile week with gains on Thursday, as resource stocks mirrored a rebound in commodity prices, led by a two-day rally for crude oil.The FTSE Eurofirst 300 was up 1...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 14 Aug 2008 | 8:57 am

British Land delays Cheesegrater until 2012

British Land is delaying starting building the "Cheesegrater" tower in the City of London in the hope of launching the skyscraper in time for the peak of the next commercial property cycle.
Source: Latest Business News from Times Online | 14 Aug 2008 | 8:49 am

Miners strengthen FTSE

Resource stocks helped London equities to firm gains on Thursday, as heavily-weighted miners tracked stronger metals prices on commodities markets. The FTSE 100 rose 82 points to 5,527.5, a rise of 1...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 14 Aug 2008 | 8:35 am

Barnes & Noble unlikely to bid for Borders: report (Reuters)

Reuters - Barnes & Noble Inc, the largest U.S. specialty bookseller, is unlikely to make a bid for rival Borders Group Inc, The Wall Street Journal said, citing people familiar with the situation.

Source: Yahoo! News: Business | 14 Aug 2008 | 8:14 am

Barnes & Noble unlikely to bid for Borders: report

(Reuters) - Barnes & Noble Inc, the largest U.S. specialty bookseller, is unlikely to make a bid for rival Borders Group Inc, The Wall Street Journal said, citing people familiar with the situation.

Source: Reuters: Business News | 14 Aug 2008 | 8:14 am

TUI lifts profits on resilient holiday demand

TUI Travel, the travel operator, today gave a positive outlook for the holiday industry, despite current economic conditions, after reporting a 39 per cent rise in profits and a sharp reduction in the number of holidays that it sells.
Source: Latest Business News from Times Online | 14 Aug 2008 | 8:13 am

InBev warns of tougher beer market

InBev's acquisition of Anheuser-Busch's business was still on track to be completed by the end of the year, according to the world's largest brewer, as it warned of a period of "greater challenges" as...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 14 Aug 2008 | 8:12 am

EBay eyes controlling stake in Gmarket

Analysts say eBay has been interested in acquiring Gmarket since it overtook its own Korean subsidiary, Internet Auction, in the country's fastgrowing customer-to-customer marketplace
Source: FT.com - US homepage | 14 Aug 2008 | 7:52 am

Best Buy deal to sell iPhone 3G may mean shortages are easing

The retailer, which starts offering the Apple devices nationwide Sept. 7, says it's not worried about running out.

The pending arrival of the iPhone 3G in Best Buy stores across the country signals that shortages of the Apple Inc . devices are easing, analysts said Wednesday.

Source: L.A. Times - Business | 14 Aug 2008 | 7:00 am

After cutting 50 workers, Spot Runner says it will add 60

The ad firm explains the moves will reduce redundancies and allow it to grow.

Spot Runner Inc., a Los Angeles-based advertising company that has raised at least $111 million in funding from media heavyweights, said Wednesday that it had laid off about 50 workers but planned to hire about 60 as part of a reorganization.

Source: L.A. Times - Business | 14 Aug 2008 | 7:00 am

Skechers again offers to buy Heelys

Skechers bids $143 million in cash to acquire the trendy shoemaker.

Heelys Inc., the company known for its sneakers on wheels for kids and teens, might soon be rolling over to Manhattan Beach shoe retailer Skechers USA Inc.

Source: L.A. Times - Business | 14 Aug 2008 | 7:00 am

Paula Wagner steps down at United Artists

The CEO's departure raises uncertainty about the film studio and Tom Cruise, her longtime business partner.

Metro-Goldwyn-Mayer Inc.'s much-ballyhooed plan to revive the moribund United Artists studio was derailed Wednesday when the movie label's chief executive, Paula Wagner, stepped down after less than two years on the job.

Source: L.A. Times - Business | 14 Aug 2008 | 7:00 am

Big stars get behind dissident slate for SAG board

The rebel faction says the group that now controls the actors union has mishandled contract negotiations.

The fight for control of the Screen Actors Guild took a dramatic turn Wednesday with Tom Hanks, Alec Baldwin and Sally Field joining other high-profile actors in endorsing a group of dissidents to lead Hollywood's largest union.

Source: L.A. Times - Business | 14 Aug 2008 | 7:00 am

American motorists drove less in June

Record pump prices drown out the call of the open road.

As gasoline prices were hitting new records in June, Americans were hitting the brakes.

Source: L.A. Times - Business | 14 Aug 2008 | 7:00 am

Market doldrums open door to mergers

With private-equity firms sidelined, 'strategic' deals, aided by low prices, have picked up some of the slack.

The stock market's woes this year are turning into a blessing of sorts for corporate America.

Source: L.A. Times - Business | 14 Aug 2008 | 6:00 am

Currency: NZ dollar rebounds strongly today

The New Zealand dollar rebounded strongly today from its plunge yesterday and the focus is now turning to retail sales data due tomorrow. By 5pm today the NZ dollar was buying US69.95c, up from a low yesterday around US68.25c,...
Source: New Zealand Herald - Business | 14 Aug 2008 | 5:30 am

Wrightson earns $19m bonus on Uruguay returns

New Zealand Farming Systems Uruguay today posted a net after tax profit of US$1.6 million ($2.3m) for the year to June 30, boosted by earnings of US$8m from milk sales, at record prices of about US40c a litre. But the real winner...
Source: New Zealand Herald - Business | 14 Aug 2008 | 4:00 am

Billion-Dollar Boy Band?

It's been quite a week for Kevin, Joe, and Nick.

Don't know who they are? You're obviously not a woman between the ages of three and 30, the parent of a teenage girl, or someone with regular access to any form of mainstream media.

The Jonas Brothers are a budding tween franchise with dark locks, bright hooks, and the ability to actually play their instruments. They're currently busy invading Manhattan.  Click here for the numbers behind the Jonas Brothers.

The trio appeared at the Virgin Megastore in Times Square at midnight Monday to celebrate the release of their new album with several thousand frenzied fans. The album, A Little Bit Longer, is their second for Walt Disney Co.'s Hollywood Records label, and it immediately went platinum. The next day it was iTunes's most-downloaded album.

The band hosted MTV's Total Request Live this week, and is making the rounds of other programs: 20/20, The Tonight Show with Jay Leno, Live With Regis and Kelly, and the Teen Choice Awards, where the brothers won six awards.

The invasion began with a concert last Friday in Bryant Park, part of a series on Good Morning America; 15,000 screaming fans packed the park.

The brothers are playing a sold-out tour, and just finished three capacity shows at Madison Square Garden. The tour is being filmed for a 3-D movie, in theatres this winter; Camp Rock, their Disney Channel movie, premiered in June to 8.9 million viewers.

On September 7, the band plays the MTV Video Music Awards, for which they have already garnered a nomination. They are about to start filming a show, J.O.N.A.S. , for the Disney Channel, which will air next spring.

And there's a book, commemorating the tour, coming out around Thanksgiving.

For all of that hoopla, however, the band's reported earnings for the past year—about $12 million, comprised of touring and CD and merchandise sales—are as modest as their values (the boys, ages 15-20, wear "purity rings" to signify their commitment to sexual abstinence).

The $12 million figure landed them on Forbes magazine's list of top-earning celebrities. But it's not nearly enough for the Jonases to challenge, much less dethrone, billion-dollar pop star Miley Cyrus as the Queen of Tween.

Her reign may be waning, though, as gossip in Seventeen magazine (ironically, about her relationship with 15-year-old Nick Jonas) and racy photos in Vanity Fair have soured her image with some young fans.

The Jonas Brothers are a different matter. The group signed with Hollywood Records in December 2006 after a stint at another label as a Christian rock group. Their first album with Hollywood went platinum, but only lately have the boys begun to exploit other avenues to media dominance.

  "It would be easy for them to become the next billion-dollar brand," says Tina Wells, C.E.O. of Buzz Marketing Group, a youth marketing agency and trend consultancy in New Jersey. "Touring is probably most profitable for them now, but we haven't begun to see the full potential of things. They're stylish: if they did a clothing line, it would make sense."

Wells warns that the boys would do well to stick with Disney, an adept marketing machine for its stars. Others who left to pursue a more mature image elsewhere have seen their careers flounder. Lindsay Lohan is a case in point.

"Lindsay Lohan had a Disney deal making her $7 million a movie," Wells said. "Who in the world has paid her anything close to that since?"

The Jonases are likely to stick with Disney for the near future, since their Disney Channel show and movie have yet to launch. But it's an open question whether those projects will be anywhere near as successful as Cyrus's, whose 3-D tour movie has grossed $70 million worldwide so far and whose show, Hannah Montana, averages 3 million viewers an episode.

"There's no doubt that they're incredibly successful, that they are incredibly versatile, and that they have the stamp of approval from parents," says Michael Wood, vice president of TRU, a market-research firm in Northbrook, Illinois, of the Jonas Brothers. "But I think it is more of a stretch in terms of playing in all of those categories."

If you're Miley Cyrus, Wood says, your fans want to be you—they will buy your records, wear your clothes, and buy anything branded with you, from perfume to chocolate.

"It's very different for the Jonas Brothers," Wood adds. "Are young guys going to want to dress like them? I'm not so sure. I think gender alone will be somewhat of a challenge."

In the end, the surest bet for the brothers may be to face the music—literally.

"Miley Cyrus was built by a TV show," says Bob Lefsetz of the Lefsetz Letter, a music industry newsletter. He sees the Jonas Brothers as a more authentic, and therefore more sustainable, phenomenon.

"They had a deal with Sony before Hollywood Records. They play their own instruments, have a hand in writing their songs," Lefsetz says.

Because of that, the group might expect "a longer sales arc with less high peaks." Lefsetz agrees the act has major earning potential, but won't speculate as to how much.

With such uncertainty about how the brothers should leverage their fame, it's not surprising that no one is willing to precisely forecast their potential earnings. But the brothers themselves are doing everything they can to keep the future looking bright.

"They understand how to take care of their partners," says Cory Isaacson, a partner at Walton Isaacson, the marketing and branding firm who brokered a Burger King sponsorship for the brothers' current tour.

"The boys said one time that they know they're on top but they're living like they're on the bottom. They're working around the clock, and everybody wants a piece."Related Links
The Billion Dollar Girl
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Miley's Pre-Maturity


Source: Portfolio.com: Top 5 | 14 Aug 2008 | 4:00 am

Saving Wall Street From Itself

Placing blame for the subprime crisis has become a priority among politicians and pundits, right up there with preventing another financial meltdown.

The spread of securitization and a fall in lending standards have been easy, if hard-to-visualize, targets. But some commentators have dangled the possibility that much more tangible actors are to blame: the government and its zeal for deregulation.

"We are in a worldwide crisis now because of excessive deregulation," Democratic Representative Barney Frank of Massachusetts, the chairman of the House Financial Services Committee, recently told the Washington Post.

Particular scrutiny is being paid to the decision a decade ago to tear down the walls that had separated commercial banks from investment banks for more than six decades.

In 1999, the Republican-controlled Congress repealed the Glass-Steagall Act, a Depression-era law that forbade insurers, deposit-holding commercial banks, and underwriting investment banks to venture into one another's businesses.

The law was enacted in response to excessive speculation in the 1920s. Amid a technology boom driven by widespread electrification and industrialization, banks took on huge risks in the hope of ever-bigger payoffs. Conflicts were rife, with banks making unsound loans to companies whose shares they'd underwrite, then urging their retail banking customers to buy the stock.

The logic behind repealing Glass-Steagall was that today's more-responsible and risk-savvy financial firms could significantly reduce costs by merging redundant business divisions while giving consumers the opportunity to get all their finance needs—from banking to investing to insurance—in one place.

Deregulation did indeed foster the creation of "financial supermarkets," led by Citigroup and including J.P. Morgan Chase, Bank of America, Wachovia, and others. But critics charge that it also revived conflicts of interest that the newly freed commercial banks were unprepared—or unwilling—to manage.

It also helped some banks to become so huge and so interdependent that even staunch free-market advocates consider them too big to fail.

After regulations were rolled back, banks big and small, under investor pressure to match the returns of their most profitable rivals, couldn't help but wade into the profitable world of underwriting and trading mortgage-backed securities—the investments behind the current financial crisis.

These bondlike instruments were very lucrative, especially for the investment banks that packaged them, but they weakened the link between risk and reward. A bank could arrange risky loans to high-risk borrowers through one side of its business, then turn around and repackage the loans into pools of debt that were sold to investors on another side of the business.

  In theory, the much larger number of good loans would dilute bad loans in these pools. In reality, it set up a system where banks made money from fees charged to set up loans, not from actually collecting payments for 15 or 30 years.

The risk of borrowers defaulting was shifted to investors who bought the mortgage-backed securities; we now know that they often didn't have a clear idea what was in them.

Today, with a growing number of people falling behind in their payments and a mountain of foreclosed homes helping to drive down house values, uncertainty about how many loans in these pools are bad or will become bad has undermined investor confidence in the entire market.

But it wasn't just commercial banks that have been criticized.

"We let investment banks get into a much wider range of activities without regulation," which helped create the subprime crisis, Frank told the Washington Post in his interview.

Frank isn't alone in calling for reregulation of financial services, nor are the Democrats. Not long after he engineered the federal bailout of a largely unregulated investment bank, Bear Stearns, Federal Reserve chairman Ben Bernanke called for "a more robust framework for the prudential supervision of investment banks and other large securities dealers."

If, as now seems likely, the next president and the next Congress do act to rein in Wall Street, what should it do? Resurrecting the Glass-Steagall Act to separate commercial banking, investment banking, and insurers would be an easy option, but the truth is that even if Glass-Steagall had never been repealed, it's very likely that, all else equal, the subprime market would still have imploded.

First, in many ways the repeal of Glass-Steagall was a symbolic move. Over the years, commercial banks had been allowed to expand beyond their traditional deposit and loan business.

In 1986, for example, the Federal Reserve, over the objection of then-Fed chairman Paul Volcker, voted to reinterpret a section of Glass-Steagall to allow commercial banks to earn up to 5 percent of their revenues from investment banking—that is, underwriting securities.

Second, research published in 2006 found that banks' revenues, costs, and risks didn't change noticeably immediately before and after the repeal of Glass-Steagall. This means that either the gains from Glass-Steagall had occurred earlier, or that the synergies between different types of banks and insurers wasn't enough to make a material impact on the bottom line.

Third, while Citigroup, with its $55 billion in write-downs, might be exhibit A for why one-stop shopping for financial needs doesn't work, rival J.P. Morgan Chase, which has weathered the downturn in much better shape than its competitors, is an argument for the opposite.

Fourth, there is evidence that banks are taking upon themselves to break up their businesses. On Tuesday, UBS announced that it was separating its investment and private banking units; pressure is mounting for Citigroup to break apart its businesses too.

And finally, even if commercial banks did abuse their new freedom, that was only one of many failures that led to the subprime mess, economists Adam Ashcraft and Til Schuermann of the New York Federal Reserve said in a recent paper.

Other factors that fed the crisis were predatory lending by mortgage companies, the failure of credit agencies to correctly rate new products, and herd behavior, which had too many investors not doing enough due diligence.

If there is blame to be placed on the politicians who discarded Glass-Steagall, it may be that they didn't push for new regulations for the wild world of derivatives that were about to mushroom into a $300 trillion time bomb.Related Links
Why UBS's Wealth Management Should Stand Alone
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The Great Depression Debate


Source: Portfolio.com: Top 5 | 14 Aug 2008 | 4:00 am

Steel & Tube profits down 19pc despite revenue lift

Steel & Tube Holdings said net profits fell 19 per cent to $22.5 million from a year ago, depsite an per cent jump in revenue to $504m. But the engineering and contracting company said profits in the second half of the year "improved...
Source: New Zealand Herald - Business | 14 Aug 2008 | 3:00 am

July jump for NZ manufacturing

Encouraging signs of a lift in manufacturing have been found in a new business survey, but lobby group Business NZ says it's too soon to say if we've turned the corner. The country's manufacturing sector made a slight comeback...
Source: New Zealand Herald - Business | 14 Aug 2008 | 2:00 am

Oil prices rebound - but doubts cast on rally's staying power

NEW YORK - Oil prices rebounded Wednesday, jumping back to $US116 a barrel after the government reported a bigger-than-expected drop in US petrol supplies. But more signs of dwindling US demand cast doubt on the rally's durability. In...
Source: New Zealand Herald - Business | 14 Aug 2008 | 1:30 am

Override Of Bush Medicare Veto Provides A Lift For Medical Lab

Last month, Congress overrode a presidential veto that would have meant a 10.6% cut to Medicare reimbursement rates.
Source: Investor's Business Daily: BUSINESS | 14 Aug 2008 | 12:33 am

Business Briefs - Wednesday

German firm fuels industry rally. Fertilizer giant Mosaic MOS and rivals surged after the No. 4 potash supplier, Germany's K+S, said its Q2 profit...
Source: Investor's Business Daily: BUSINESS | 14 Aug 2008 | 12:33 am

Trends & Innovations - Wednesday

Car pool Web sites see more visits
Source: Investor's Business Daily: BUSINESS | 14 Aug 2008 | 12:33 am

After The Close - Wednesday

UNIONBANCAL (UB), a Calif. bank, rejected Mitsubishi UFJ's (MTU) $3bil, or $63 a share, buyout offer, saying it "substantially...
Source: Investor's Business Daily: BUSINESS | 14 Aug 2008 | 12:33 am

In Brief - Wednesday

Overseas Shipholding (OSG), an operator of oil tankers, sold two 1997-built dry-bulk carriers for about $55 mil. It rose 2.4% to 71.53.
Source: Investor's Business Daily: BUSINESS | 14 Aug 2008 | 12:33 am

Mervyn Davies steps in for now at Fleming Family & Partners

The Fleming family, one of the City's oldest dynasties, has parted company with the chief executive of the firm which manages the family's wealth.
Source: Telegraph Business | 14 Aug 2008 | 12:01 am

Main-break bookings are robust, says Thomas Cook

British holidaymakers should expect to pay 8pc more for summer holidays in 2009 as higher fuel costs and reduced supply send prices soaring, according to travel operator Thomas Cook.
Source: Telegraph Business | 14 Aug 2008 | 12:01 am

Pubs retreat as King warns of more consumer pain

Mervyn King cast a gloomy shadow over consumer companies yesterday after the Governor of the Bank of England warned that next year will be "painful" as the cost of living continues to rise.
Source: Telegraph Business | 14 Aug 2008 | 12:01 am

JPMorgan and M Stanley near ARS deal

JPMorgan and Morgan Stanley were nearing settlements with regulators to buy back billions of dollars worth of auction rate securities from investors, people briefed on the negotiations said
Source: FT.com - US homepage | 13 Aug 2008 | 11:31 pm

Kiwi dollar rebounds strongly after plunge

After plunging to its lowest level in about a year against the greenback yesterday afternoon, the New Zealand dollar has since rebounded strongly. By 8am today the kiwi was buying US70.42c, from a low yesterday around US68.25c...
Source: New Zealand Herald - Business | 13 Aug 2008 | 11:00 pm

$1bn deal set to launch 3-D film business

A consortium of the biggest US cinema chains is closing in on a $1bn deal that will pave the way for a new generation of money-spinning 3-D movies, after securing provisional backing from Disney, Paramount and 20th Century Fox
Source: FT.com - US homepage | 13 Aug 2008 | 10:31 pm

Auckland Airport drops duty free axing plan

Auckland Airport has dropped plans to cut the number of duty free retailers from two to one. The airport said today it had decided to retain two such operators rather than face the prospect of an extended dispute with the Commerce...
Source: New Zealand Herald - Business | 13 Aug 2008 | 10:30 pm

8 Midsize Stocks With Bigtime Ambitions (Stock Screen)

We found eight just-right stocks that are neither too large nor too small.

Source: SmartMoney.com | 13 Aug 2008 | 9:34 pm

Energy a Bright Spot as Financials Drag on Market (Daily ETF Wrap-Up)

Energy services ETFs are a bright spot on an otherwise down day for stocks.

Source: SmartMoney.com | 13 Aug 2008 | 9:23 pm

Genentech rejects $44bn offer by Roche

Genentech has rejected an unsolicited $43.7bn takeover bid from its majority owner Roche but suggested it would consider a higher offer
Source: FT.com - US homepage | 13 Aug 2008 | 8:59 pm

VIX Index of U.S. Stock Prices Advances 1.7 % to 21.55

Source: Bloomberg - All Podcasts | 13 Aug 2008 | 8:57 pm

8 Stocks With Accelerating Sales Growth (Stock Screen)

Accelerating sales growth makes these eight stocks intriguing.

Source: SmartMoney.com | 13 Aug 2008 | 8:45 pm

Allan Meltzer Says Fed Failing to Control Inflation

Source: Bloomberg - All Podcasts | 13 Aug 2008 | 8:36 pm

Malpass Says Global Economy Grows While U.S. Dollar Struggles

Source: Bloomberg - All Podcasts | 13 Aug 2008 | 8:28 pm

Oil, Retail Sink Stocks

A jump in energy prices and concern over the health of the consumer left the major indexes lower.

Source: SmartMoney.com | 13 Aug 2008 | 8:18 pm

Deere Caught in Headlights of Rising Costs (One-Day Wonder)

The housing slump and rising raw materials costs hamper the tractor maker.

Source: SmartMoney.com | 13 Aug 2008 | 8:15 pm

Fletcher braces for tough times

Fletcher Building is preparing for a worst-case scenario in the year ahead after a $17 million slide in profit. Results released yesterday show annual profit fell from $484 million to $467 million in the year to June. Factory...
Source: New Zealand Herald - Business | 13 Aug 2008 | 8:00 pm

Fox Up Against the Wall

This year, for the first time ever, Fox catapulted into first place among the broadcast networks, stealing CBS's most-watched crown. And the network, which is facing a challenging fall season, is desperate to stay on top.
 
How desperate?
 
Its new reality show, copped from a 2-year-old Japanese game show, features human contestants in Spandex hurling themselves through cutouts in a moving wall to avoid getting smacked into a pool of water. Think of it as human Tetris.

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Demonstrating the high hopes it is pinning on the show, called Hole in the Wall—the kind of cringe-inducing fare that networks normally save for the summer doldrums—Fox announced last week that it will run front and center in the network's fall prime-time lineup, Wednesday nights at 8 p.m.
 
Apparently, it's come to this.
 
Hole in the Wall was brought to Fox by FremantleMedia, the production team behind NBC's summer hit America's Got Talent. But Fremantle is perhaps best known as the company that brought the U.K. hit Pop Idol Stateside, turning American Idol into the biggest show on television and creating one of the not-so-secret ingredients in Fox's meteoric rise from ratings also-ran.
 
Fox and Fremantle have teamed up since American Idol, primarily on The Next Great American Band and a new variety show from the Osbourne family. But Hole in the Wall is a higher-stakes reunion, thanks to the show's prime placement on the fall schedule.
 
"There were moments when I looked up at the screen while we were taping this show, and said to myself, 'I'm not going to the Emmys again this year,'" says Stuart Krasnow, the show's executive producer, in a phone interview from Amsterdam. "But I'm much more proud of being able to deliver a program that the whole family can watch together."
 
Since launching in Japan in 2006, Hole in the Wall has spread to countries like Australia, where the contestants include girls in silver suits, and Italy, where female contestants wear bikinis (Krasnow is preserving the skin-tight spandex suits for the American version). Even less freewheeling countries like China, Russia, and Malaysia have iterations.
 
Here in the U.S., there's also plenty of evidence that Hole in the Wall could successfully plug the holes in Fox's fall lineup. The show is strongly reminiscent of Wipeout, ABC's gross-out obstacle-course summer show that debuted to a hugely positive audience reaction at the network's Upfront presentation this spring.
 
Wipeout has been popular all summer, ranking only behind America's Got Talent in the most-watched broadcast shows during the last week of July, according to Nielsen.  
 
And Fox is subbing Hole in the Wall into the old timeslot of Moment of Truth, the new Fox game show that's been benched until midseason. Moment of Truth premiered in January to an audience of 23 million, but slid to an embarrassing 5 million viewers by the end of the season.
 
That show's demise is the least of Fox's worries as the fall season approaches. In a News Corp. earnings call last week, David DeVoe, the company's C.F.O., enumerated several challenges facing the network, including the loss of the highly rated Super Bowl, renewed production expenses after the writers' strike, and the generally dire economy.
 
Hole in the Wall could be a bright spot—at least temporarily.
 
"It seems like it would be fun if you watched it once, but I don't know if there's sustainability," says Shari Anne Brill, senior vice president and director of programming at Carat, a media agency in New York. Brill adds that I Survived A Japanese Game Show, another summer offering from ABC, was not well-received by audiences. Hole in the Wall, um, is a Japanese game show.  
 
Still, Fox could tilt the ratings in their favor by shooting in HD, says Brill. "Someone slamming into a wall would look better in hi-def format."
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Source: Portfolio.com: Top 5 | 13 Aug 2008 | 7:30 pm

Slideshow: 7 Gadgets to Help Get You in Shape (Deal of the Day)

Are the Olympics inspiring you to get in shape? These gadgets will help get you there.

Source: SmartMoney.com | 13 Aug 2008 | 7:21 pm

Author David Large Describes History of Olympic Games

Source: Bloomberg - All Podcasts | 13 Aug 2008 | 7:17 pm

Two Marks say they remain independent

Two new candidates for Telecom's board of directors say their bid has become blurred by calls for structural separation from their sponsor - US based hedge fund Elliott International. Mark Cross and Mark Tume were yesterday distancing...
Source: New Zealand Herald - Business | 13 Aug 2008 | 7:00 pm

Macy's Fights the Headwinds

The youth of America will be returning to school in the fall, won't they?

Worries about whether there will be much shopping this back-to-school season weighed on investors today after Macy's trimmed its profit forecast for the year.

Shares of Macy's fell as much as 4 percent before recovering to trade up 2 percent by the afternoon. Concerns about shoppers reining in their buying in the face of high gasoline and food costs and an uncertain economy were stoked early today by a Commerce Department report that showed a 0.1 percent decline in July retail sales.

Macy's cut its full-year forecast to $1.70 to $1.85 per share from $1.85 to $2.15 per share in May, excluding restructuring costs. It projects that sales at stores open at least one year will be down 1 to 1.6 percent, about what it estimated in May, noting that the uncertain economic conditions make such projections difficult.

Macy's C.E.O., Terry Lundgren, has been working hard to try to restore investor confidence in the department-store chain. In mid-July he published a letter reiterating Macy's strength, which generated a temporary pop for the stock.

"While we are never fully satisfied when sales are down, we continued to outperform most of our major competitors in same-store sales and to gain market share with a combination of differentiated merchandise, current fashions, and great value," said Lundgren in today's statement.

Indeed, Macy's quarterly drop of same-store sales by 2.1 percent may sound disappointing, but it shows relative strength compared with rivals like Nordstrom, J.C. Penney, and Kohl's.

Macy's earnings conference call on Wednesday morning helped shed some light on which retail categories can start hoping for recovery, and which will continue to be victims of consumer belt tightening. Macy's chief financial officer, Karen Hoguet, said that among Macy's strongest categories were jewelry, cosmetics, shoes, and menswear. Ready-to-wear women's fashions, intimate apparel, and children's items were among the weaker performers.

"We're still not seeing strength in apparel," said Hoguet. "And we're not expecting much improvement there in the third quarter. It would be nice, but we're not counting on it."

Macy's earned $73 million, or 17 cents per share, in the second quarter compared with $74 million a year earlier. Excluding charges as well as trademark write-downs in the latest quarter, per-share earnings were flat at 29 cents. Revenue fell 3 percent, to $5.72 billion.
 
Excluding one-time charges, like consolidation expenses from the acquisition of May Department Stores, Macy's managed to best analysts with 29 cents a share in earnings versus an average 19-cent prediction.

 

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Source: Portfolio.com: Top 5 | 13 Aug 2008 | 7:00 pm

SEC, states close to auction-rate pacts: sources (Reuters)

Reuters - U.S. and state regulators are close to reaching a settlement with multiple banks accused of selling auction-rate securities under false pretenses that would force them to repurchase billions of dollars of the now-illiquid securities at face value, people familiar with the matter said on Wednesday.

Source: Yahoo! News: Business | 13 Aug 2008 | 6:48 pm

Adam Segal Sees Mixed View of `Real China' From Olympics

Source: Bloomberg - All Podcasts | 13 Aug 2008 | 6:47 pm

Chinoy Says Bush Trip Is `Gesture of Respect' to China

Source: Bloomberg - All Podcasts | 13 Aug 2008 | 6:38 pm

Canadian Natural Resources Rated New `Buy' at Deutsche Bank

Source: Bloomberg - All Podcasts | 13 Aug 2008 | 6:27 pm

Mortgage-Tied Muni Bonds Benefit From Tax Tweak (Ticked Off)

It sounds like an oxymoron, but a tax code change makes mortgage munis a sweet deal.

Source: SmartMoney.com | 13 Aug 2008 | 6:16 pm

Rates should come down, says ASB

The risk premium on funds raised by local banks on international markets has likely peaked and mortgage rates should ease as the Reserve Bank cuts the OCR over the next year, says ASB Bank chief executive Hugh Burrett. ASB, owned...
Source: New Zealand Herald - Business | 13 Aug 2008 | 6:00 pm

Picking up loose change makes sense

Money might not grow on trees, but it's apparently all over the streets. Sally Herships reports on a New York family that's building a nest egg with small change they find just lying around.
Source: Marketplace | 13 Aug 2008 | 4:30 pm

Hurdles for businesses at the Olympics

The lower-than-expected turnout at the Olympics is disappointing for corporate sponsors and companies that wanted to do business in China during the Games. But they're hanging in there, Scott Tong reports.
Source: Marketplace | 13 Aug 2008 | 4:30 pm

Fed helps, but needs to be accountable

The Fed has bailed out banks, advised them on capital assets and now is issuing regulations for the credit-card industry. But who, asks commentator Robert Reich, is minding the Fed?
Source: Marketplace | 13 Aug 2008 | 4:29 pm

More banks to join securities settlement

As many as six banks are said to have agreed to buy back securities from the failed auction-rate market as part of a settlement with federal regulators. Is a global settlement in the works? Bob Moon reports.
Source: Marketplace | 13 Aug 2008 | 4:27 pm

Huffington Post debuts Chicago version

Arianna Huffington debuts the first local franchise of her popular news Web site The Huffington Post, aka "HuffPo," on Thursday. Is this a move on the local news turf? Renita Jablonski reports.
Source: Marketplace | 13 Aug 2008 | 4:26 pm

Offshore drilling proposal gains ground

A group of Senate moderates are in agreement about a proposal that would allow some offshore drilling. John Dimsdale has details on the compromise plan and talked with a few experts about it.
Source: Marketplace | 13 Aug 2008 | 4:25 pm

Detroit's dilemma: big cars or small?

Detroit's doing all it can about drooping car sales, including plans for new fuel-efficient and smaller models. We ask an industry analyst what happens if consumer preferences swing back to big.
Source: Marketplace | 13 Aug 2008 | 4:24 pm

Retail report shows car sales slump

Retail sales dropped for the first time in five months, according to the monthly numbers for July. One thing Americans aren't buying much this summer is big cars. Alisa Roth reports.
Source: Marketplace | 13 Aug 2008 | 4:23 pm

A Biotech That Boosts Testosterone Is a Buy (Today From Barron's)

A rub-on gel for boosting testosterone is reason enough to buy this biotech.

Source: SmartMoney.com | 13 Aug 2008 | 4:09 pm

Desperate for a Cure

Browsing through email announcements the other day, one caught my eye:

"Researcher's herald breakthrough data on Alzheimer's."

The article, on the website FierceBiotech, announced that Singapore-based TauRX Therapeutics had just released what appeared to be spectacular data from Phase II clinical trials for their Alzheimer's drug, called Rember.

"Researchers say that Rember slowed cognitive decline in 81 percent of the patients taking the drug," the article said.

If true, this was sensational news for the more than 24 million people who suffer from Alzheimer's disease; currently, there is no effective treatment, and the number of people afflicted by it is forecast to double every 20 years, reaching 80 million by 2040.

Success might also mean a break from rising costs connected to treating Alzheimer's, which is projected to cost Medicare $189 billion in 2015.

I read on, learning that Rember acts by detangling a protein in the brain called Tau that bunches up as the disease progresses. It's one of about 30 new medicines being tested right now to treat Alzheimer's. Other drugs work to prevent a build-up of plaques in the brain called amyloids.

Another promising family of drugs works to boost nicotinic receptors in the brain that help regulate memory and cognition. (See Condé Nast Portfolio feature "The Ultimate Cure.")

The TauRX announcement came at a major international Alzheimer's meeting last month in Chicago, where most of the news was not so great. At this gathering, Myriad Genetics provided the unfortunate details of its failed anti-amyloid drug, Flurizan, which the company was forced to abandon in June when it failed to work in clinical trials.

The mood at the meeting was also darkened by a presentation from Elan Pharmaceutical and Wyeth that offered up confusing data about Bapineuzumab, another promising plaque-busting drug that looked as if it, too, might have failed in Phase II trials.

 It turned out that the news about Bapineuzumab was more nuanced than this. Overall, the drug had failed to work, but when researchers parsed through the data, they found that it had shown activity for a subset of test subjects, those who lacked a genetic trait called APOE4 that has been linked to a high risk for Alzheimer's.

Elan and Wyeth will move the drug into a Phase III trial focusing on this subset of patients—though in Chicago, this partial success was not fully understood. That news, coming on top of the Myriad flop, disappointed attendees and left them looking for some good news.

Then Claude Wischik, co-founder and chairman of TauRx Therapeutics, delivered his news.

Actually, Wischik, a researcher at the University of Aberdeen in Scotland and an expert on the Tau protein, reported mostly modest, but positive results from the podium. Even so, many at the meeting were cheered that there might be a compound that will detangle Tau—a process that some speculated could be used in tandem with amyloid-busters to deliver a double-punch to this disease.

So how did this guardedly optimistic presentation of data turn into headlines announcing that Rember is a wonder drug?

Apparently, it was a press release issued about the results. Here is the breathtaking headline and first paragraph:

TauRx Therapeutics Ltd & University of Aberdeen
New treatment halts progress of Alzheimer's disease

A major breakthrough in the treatment of Alzheimer's disease is revealed today (July 29) by scientists at the Alzheimer's Association International Conference on Alzheimer's Disease (ICAD 2008) in Chicago, Illinois. Their pioneering research points to a new treatment that appears to slow the progress of the disorder by 81 percent over a year, and could offer hope to millions worldwide. The product—Rember—is the first drug to act on the tangles discovered by Alois Alzheimer over a century ago.

As one observer at the meeting told me, this press release was "very aggressively worded."

The result was that a number of science writers went momentarily gaga; headlines blasted from London and Tokyo to Chicago and New York announcing the wonderful news, which later turned out to be not that wonderful.

In a field as complicated as Alzheimer's, with various mechanisms and compounds and companies vying to create a truly miraculous treatment—and with so many people desperate for one—it's not too surprising that something like this happened.

More remarkable is that a few weeks ago the Food and Drug Administration actually approved a new Alzheimer's drug called Axona, but has gotten scant attention.

Developed by Accera, a Broomfield, Colorado, startup, Axona is not the end-all treatment for Alzheimer's, but it has demonstrated that it can boost the energy efficiency of cells and provide general neuro-protective properties that help Alzheimer's patients. Axona seems to work especially well for patients without the APOE4 gene that increases the carrier's risk for Alzheimer's.

"It is being launched as a prescription medical food, which is a slightly different path than a drug," says Zack Lynch, Executive Director of the Neurotechnology Industry Organization.

As the population of our planet ages and tens of millions of brains begin to degenerate, I suspect that there will be many more moments when wishes and desperation for a cure cause a flash of excitement.

Next time, let's hope that the headlines are real.

---

This article was amended to reflect that the drug Axona works well for patients without the gene that increases the risk of developing Alzheimer's disease. 

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Source: Portfolio.com: Top 5 | 13 Aug 2008 | 4:00 pm