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Governor gives pound an extra poundingNo British recession would be complete without a good old-fashioned run on the pound and this week it has duly arrived. The pound tumbled below $1.62 yesterday, for a fall of more than 6 per cent this week. Even in these volatile times, a decline of 20 per cent in three months is quite something.$Source: Latest Business News from Times Online | 23 Oct 2008 | 10:03 pm Jupitermedia Sends Online Images to Getty Images (JUPM)Jupitermedia Corp. (NASDAQ: JUPM) is seeing a massive surge pre-market, and this may help the company adequately fend off many of its issues. The company has announced that it has entered into a "definitive stock purchase agreement to sell" its Online Images business to Getty Images, Inc. for an aggregate purchase price of $96 million in cash. Private equity firm Hellman & Friedman owns Getty Images after taking it private earlier this year. If you will recall, the two companies had been in merger talks in the past for far higher prices. Those talks quickly broke apart. Jupitermedia's board of directors has approved the transaction and has recommended that shareholders approve the deal as well. This is subject to shareholder approval as you can tell, but the deal also has to clear regulatory approval and customary closing conditions. With Mr. Meckler and certain holders, the company said it already has 35.9% of the outstanding votes lined up to agree to the deal. Jupitermedia will retain ownership of its Peoria, Illinois building and property and will in turn lease the facility to Getty Images after the transaction. Jupitermedia said that it expects to incur a non-cash loss of approximately $95 million upon the closing of the transaction.
So what will be left at Jupitermedia? Jupitermedia will continue to operate its Online media While this will result in a huge charge, the company says that this will allow it to repay all of its bank debt. As of yesterday's close, its market cap was a mere $19.6 million. As of June 30, the company had only about $7.3 million in cash and long-term investments, and of its total assets of $280.1 million it had more than $210 million as goodwill and intangibles. Of its $123.7 million in total liabilities, $79 million was direct long-term debt. This will result in a massive shrinking of the balance sheet, but it will also remove the distortion of past carrying values and intangibles to reflect an easier to understand set of books. Traders are really responding favorably here. Shares closed yesterday at $0.54 and the 52-week trading range is $0.39 to $5.99. Shares are up more than 80% at $1.00 in pre-market trading. This will be getting rid of a large portion of the business and may be for a far less price than what the stock photo business would have fetched in the past, but it also turns the company into a niche content player with no real debt and a much cleaner operation.
Jon C. Ogg Source: 24/7 Wall St. | 23 Oct 2008 | 1:23 pm Bond Report: Treasurys gain as jobless claims riseLonger-term Treasurys were slightly higher early Thursday after the government said initial jobless claims increased in the latest week.Source: MarketWatch.com - Top Stories | 23 Oct 2008 | 1:20 pm Initial unemployment claims upThe number of out-of-work Americans filing new claims for unemployment insurance rose last week, the government said Thursday, reflecting continuing weakness in the nation's economy.Source: Business and financial news - CNNMoney.com | 23 Oct 2008 | 1:14 pm Chrysler cuts jobs as sales slowChrysler is to cut 1,825 jobs in the US as the global slowdown takes its toll on the car industry.Source: BBC News | Business | World Edition | 23 Oct 2008 | 1:14 pm Wall Street set for lower open on recession fears (Reuters)
Source: Yahoo! News: Business | 23 Oct 2008 | 1:13 pm Lilly swings to loss on Zyprexa chargeEli Lilly & Co. says Thursday that it swung to a third-quarter loss, hurt by a previously announced charge to settle two government investigations into the marketing of its antipsychotic drug Zyprexa.Source: MarketWatch.com - Top Stories | 23 Oct 2008 | 1:12 pm Cantor's Pope Sees `Normal' Libor for Dollars by Mid-NovemberSource: Bloomberg - All Podcasts | 23 Oct 2008 | 1:11 pm National Oilwell Varco's net jumps 50% on Grant Prideco dealNational Oilwell Varco's third-quarter net income jumps about 50%, reflecting the benefits of its Grant Prideco acquisition, as the drilling-equipment giant moves to reassure investors that business remains strong.Source: MarketWatch.com - Top Stories | 23 Oct 2008 | 1:11 pm Metals Stocks: Gold tumbles to below $700 as fund liquidation continuesNEW YORK (MarketWatch) -- Gold futures fell 5% Thursday to below $700 an ounce for the first time in 13 months, as fund liquidation and the U.S. dollar's rise continued to pound commodity markets for a second day. Copper slumped more than 6%.Source: MarketWatch.com - Top Stories | 23 Oct 2008 | 1:11 pm Janus' profit nearly halved; fund manager to cut jobsBOSTON (MarketWatch) -- Investment-management firms continued to report steep profit declines Thursday as Janus Capital Group Inc. became the latest to announce job cuts related to the financial crunch.Source: MarketWatch.com - Top Stories | 23 Oct 2008 | 1:09 pm GM suspends payments into 401K plans (Reuters)
Source: Yahoo! News: Business | 23 Oct 2008 | 1:07 pm GM signals more cutsGeneral Motors expects to meet or exceed its target for a 20% reduction in salaried employment costs, but a letter to executives Thursday signaled that a worsening sales outlook will bring additional cost and staffing reductions.Source: Business and financial news - CNNMoney.com | 23 Oct 2008 | 1:07 pm Movers & Shakers: Thursday's biggest gaining and declining stocksAmong the companies whose shares are expected to see active trade in Thursday’s session are the homebuilders Pulte and Ryland as well as Amazon.com, Amgen, Bunge, Dow Chemical, Goldman Sachs, Lam Research, Potash Corp., RadioShack, Sony, SunTrust and Xerox.Source: MarketWatch.com - Top Stories | 23 Oct 2008 | 1:07 pm Indications: U.S. stock futures trim declineU.S. stock futures extended losses Thursday after the previous session’s rout, with the cautious sales outlook from Amazon.com, Dow Chemical’s prediction of a global recession through much of next year and a rise in weekly jobless claims punctuating the brutal economy that companies are navigating.Source: MarketWatch.com - Top Stories | 23 Oct 2008 | 1:05 pm Earnings Watch: Updates, advisories and surprisesA roundup of the latest corporate earnings reports and what companies are saying about future quarters.Source: MarketWatch.com - Top Stories | 23 Oct 2008 | 1:01 pm Wall Street set for further dropsUS stocks were set to continue their punishing decline after an unexpectedly big jump in unemployment data and as investors focused on more blue chip earnings. Goldman Sachs is set to cut 10% of its workforce while GM said it had begun involuntary lay-offsSource: FT.com - US homepage | 23 Oct 2008 | 1:00 pm NewsWatch: U.S. stock futures extend losses as Amazon warnsU.S. stock futures extended losses Thursday after the previous session’s rout, with the cautious sales outlook from Amazon.com, Dow Chemical’s prediction of a global recession through much of next year and a rise in weekly jobless claims punctuating the brutal economy that companies are navigating.Source: MarketWatch.com - Top Stories | 23 Oct 2008 | 1:00 pm New York Times Co. to take non-cash charge on asset valueNew York Times Co. will take a non-cash third-quarter charge of as much as $150 million once it completes an assessment of the value of its New England media properties, including the Boston Globe, that have been severely hampered by the economic meltdown.Source: MarketWatch.com - Top Stories | 23 Oct 2008 | 12:59 pm Drax plans £2bn biomass power stationsDrax, the power generator that owns Europe's biggest coal-fired power station, is making a £2 billion investment in renewable energy with plans to build three new biomass-fired stations in a joint venture with Siemens.Source: Latest Business News from Times Online | 23 Oct 2008 | 12:50 pm Jobless claims increase more than forecastWASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless benefits rose by a larger than expected 15,000 last week, government data on Thursday showed, reinforcing evidence about the weak state of the labor market.Source: Reuters: Business News | 23 Oct 2008 | 12:47 pm Level 3 Working On Debt & Free Cash Flow (LVLT)
The carrier also noted that its consolidated adjusted EBITDA was $255 million, with communications adjusted EBITDA of $257 million and communications adjusted EBITDA margin rose to 24.4% from 20.6% in the year earlier quarter. Communications deferred revenue was listed as $910 million at the end of the third quarter 2008, down from $939 million at the end of the third quarter 2007 and down from the second quarter 2008 at $932 million. The company's consolidated free cash flow was -$4 million. It reduced its outstanding debt by $179 million in September and October, and it had approximately $587 million of unrestricted cash and marketable securities at the end of the quarter. On a pro forma basis after giving effect to these exchange transactions, the company had approximately $6.66 billion of debt outstanding at September 30, 2008. The company is not signaling any immunity from telecom spending nor from a slower economy. It noted longer sales cycles in wholesale and business markets, and has said it has seen a decrease in the content market sales. Level 3 narrowed and adjusted previous guidance ranges for 2008 with Core Communications Services revenue to grow approximately 7.5% from 2007 and it narrowed its range for 2008 Consolidated Adjusted EBITDA guidance to $980 million to $1.0 billion (within previously issued guidance of $950 million to $1.1 billion). It see continued growth in both Core Communications Services revenue and Consolidated Adjusted EBITDA, as well as positive free cash flow performance. Level 3 said that it still expects to be free cash flow positive for the second half of 2008 and for the full year 2009. Shares have been hit really hard in the last market drop and during the credit crunch. Its shares closed at $1.23 yesterday and its 52-week trading range is now $1.18 to $4.48. So far we are seeing a 7% gain pre-market to $1.32 on more than 130,000 shares.
Jon C. Ogg Source: 24/7 Wall St. | 23 Oct 2008 | 12:44 pm Stocks headed for a dipU.S. stocks were poised for a lower start Thursday as investors, jittery about the economy, considered new corporate results and rising jobless claims.Source: Business and financial news - CNNMoney.com | 23 Oct 2008 | 12:41 pm Goldman Sachs to cut 3,260 jobsRead full story for latest details.Source: Business and financial news - CNNMoney.com | 23 Oct 2008 | 12:41 pm Stock futures slide as recession anxiety weighsNEW YORK (Reuters) - Stock futures fell on Thursday on worry a recession will be deeper than anticipated as more corporate earnings and outlooks disappoint.Source: Reuters: Business News | 23 Oct 2008 | 12:38 pm Jobless claims increase more than forecast (Reuters)
Source: Yahoo! News: Business | 23 Oct 2008 | 12:36 pm Russia moves 'to boost market'Russia's Duma approves measures to boost funds for the financial sector, following recent market volatility, local media say.Source: BBC News | Business | World Edition | 23 Oct 2008 | 12:35 pm 81,312 foreclosures in SeptemberThe housing crisis still has a choke hold on America: In September, 81,312 homes were lost to foreclosure according to RealtyTrac, an online marketer of foreclosed properties.Source: Business and financial news - CNNMoney.com | 23 Oct 2008 | 12:34 pm Goldman Sachs to cut staff by 10 pct: sourceLONDON (Reuters) - Goldman Sachs Group Inc plans to cut about 3,260 jobs, a source familiar with the matter said on Thursday.Source: Reuters: Business News | 23 Oct 2008 | 12:30 pm Goldman Sachs to cut staff by 10 pct: source (Reuters)
Source: Yahoo! News: Business | 23 Oct 2008 | 12:30 pm UPS profit tops Street view, sees challenges aheadSCHENECTADY, New York (Reuters) - United Parcel Service Inc, the world's largest package-delivery company, reported a 9.9 percent drop in profit that was milder than Wall Street had feared, though the company said it experienced a significant slowdown as the quarter came to an end.Source: Reuters: Business News | 23 Oct 2008 | 12:27 pm MasterCard braces for a tsunamiOn the desktop screens at MasterCard Worldwide, you can see the economic pulse of the globe in real time. In the suburban St. Louis control center of MasterCard's global-payments network, rows of analysts keep watch over the flow of nearly 20 billion transactions a year in 210 countries, more than the United Nations has members. When the matrix of green lights flashes a red spot, the money traffic controllers immediately reroute the transactions to keep commerce flowing.Source: Business and financial news - CNNMoney.com | 23 Oct 2008 | 12:25 pm Potash Almost Smells Better Than Natural Fertilizer (POT)
The company is also forecasting in-line guidance for 2008 with a range of $12.00 to $13.00 EPS vs. $12.55 estimates, although likely at the low-end of those estimates. It sees 2008 potash gross margin to exceed the 2007 level by roughly 250%. The company said recently announced price hikes did take effect and it sees prices higher by $100 per tonne. The company said that with global sales growth estimates ranging flat to up 5%, potash fundamentals to remain tight. Potash also noted that it can cut production or make delays if demand drops in 2009. This stock had been beaten endlessly after a runaway move that had been unprecedented before that. Shares are indicated up almost 3% pre-market to $69.00 after closing at $67.10 yesterday. Its 52-week trading range is $63.58 to $241.62.
Jon C. Ogg Source: 24/7 Wall St. | 23 Oct 2008 | 12:19 pm Retail sales see September fallUK retail sales are growing at their slowest rate in two-and-a-half years, Office for National Statistics (ONS) data shows.Source: BBC News | Business | World Edition | 23 Oct 2008 | 12:14 pm Dow Chemical profit drops, warns of recessionNEW YORK (Reuters) - Dow Chemical Co reported lower third-quarter profit on Thursday, citing a drop in sales volumes and shutdowns from hurricanes, and warned that the global economy was likely to suffer through a recession for most of 2009.Source: Reuters: Business News | 23 Oct 2008 | 12:09 pm Dow Chemical profit drops, warns of recession (Reuters)
Source: Yahoo! News: Business | 23 Oct 2008 | 12:09 pm First Commonwealth Announces Third Quarter 2008 Financial ResultsCore Net Income Increases 24.3%; Growth in Loans and Net Interest Income/Margin Expansion Continues INDIANA, Pa., Oct. 23 /PRNewswire-FirstCall/ -- First CommonwealthSource: Infocious RSS raw feed - channel BNewsBusiness | 23 Oct 2008 | 12:09 pm Chrysler to layoff 825 workers, close factoryRead full story for latest details.Source: Business and financial news - CNNMoney.com | 23 Oct 2008 | 12:04 pm UPS beats Street but saw sharp slowdownSCHENECTADY, New York (Reuters) - United Parcel Service Inc, the world's largest package delivery company, reported a 9.9 percent drop in profit that was milder than Wall Street had feared,Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Oct 2008 | 12:02 pm SEB Q3 operating profit lags forecasts, to cut jobsSTOCKHOLM (Reuters) - Swedish bank SEB posted third-quarter operating profit below expectations on Thursday and said it would cut jobs due to the current financial market turmoil.Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Oct 2008 | 12:01 pm ANZ bank shares drop over 5 pct after resultsSYDNEY (Reuters) - Shares in Australia and New Zealand Banking Group Ltd fell as much as 5.4 percent on Thursday after it reported a 32 percent drop in second-half cash profit on a sharp rise in bad debt...Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Oct 2008 | 12:01 pm Big Greek banks say will use govt support as neededATHENS (Reuters) - Greece's big banks, which have agreed to a 28 billion euro ($35.9 billion) government rescue plan, said the scheme will enable them to get state funding if and when needed and be on...Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Oct 2008 | 12:01 pm German banks lent most to Iceland borrowers-BISFRANKFURT (Reuters) - German banks lent the most to Icelandic borrowers and were owed $21 billion before the recent financial storm swept markets, according to figures released by the Bank for International...Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Oct 2008 | 12:01 pm Libya has 4.9 pct of Italy's Unicredit - cenbankCAIRO (Reuters) - Libya has a stake of 4.9 percent of Italian bank UniCredit and it does not plan to increase that holding for the time being, the governor of the Central Bank of Libya said on Thursday...Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Oct 2008 | 12:00 pm Sabadell sees NPL ratio remaining below average* Bad loan coverage falls to 140 pct from 430 pct a year agoSource: Infocious RSS raw feed - channel BNewsBusiness | 23 Oct 2008 | 12:00 pm Babcock & Brown in talks with potential partnersSYDNEY (Reuters) - Babcock & Brown Ltd has been approached by a number of parties on a potential strategic relationship, the troubled Australian investment bank said on Thursday.Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Oct 2008 | 12:00 pm Goldman Sachs to cut about 3,260 jobs - sourceLONDON (Reuters) - Goldman Sachs Group Inc plans to cut about 3,260 jobs, a source familiar with the matter said on Thursday.Source: Infocious RSS raw feed - channel BNewsBusiness | 23 Oct 2008 | 12:00 pm Culling the Herd on the StreetLast summer, New York City officials described how the job cuts on Wall Street were happening at a slow but steady pace. "It's like the tsunami is still making its way across the ocean," one official told the New York Times.The tidal wave is now just beginning to crest. Goldman Sachs, the leader on Wall Street and the one firm seemingly in the best position to survive the financial crisis, is cutting 10 percent of its work force, or about 3,200 jobs, according to several reports today. Those job cuts come on top of the tens of thousands of jobs already lost at Citigroup and elsewhere on the Street. Thousands of jobs were lost when J.P. Morgan took over Bear Stearns, and Barclays is expected to eliminate 3,000 jobs as it integrates the U.S. operations of Lehman Brothers. Job cuts of as much as 10,000 are expected from the acquisition of Merrill Lynch by Bank of America. The New York City comptroller, William Thompson, has estimated that 165,000 private-sector jobs could be lost in the next two years, up from his summer estimate of 85,000. And even that estimate may be too optimistic. More jobs were lost in the market crash and relatively modest recession at the start of the decade. The fact that Goldman is cutting now, when it did not do so earlier amid the credit crunch, indicates that the firm is becoming more pessimistic about the next year, says Douglas McIntyre on 24/7 Wall Street. “Goldman must be looking at the next year and seeing a potential compounding of its losses and no recovery in its core businesses. All those poor souls would not be going if the trouble was only likely to last another quarter or two.” Shaun Springer, chief executive officer of Napier Scott Executive Search Ltd. in London, agrees, telling Bloomberg News: “When a lean and mean firm starts trimming, they're cutting into muscle. The fact that they are cutting 10 percent is quite indicative of the fact that there are still a lot of problems ahead.” Related Links High Anxiety Looking Down Wall Street Huddles for Safety Source: Portfolio.com: Top 5 | 23 Oct 2008 | 12:00 pm Sweden, New Zealand cut rates, Japanese exports weakLONDON (Reuters) - Sweden and New Zealand responded to the global financial crisis by cutting interest rates on Thursday and weak Japanese exports underlined the risk of a deep recession.Source: Reuters: Business News | 23 Oct 2008 | 11:50 am Recession fears stall creditLending rates held steady Thursday, a day after dismal corporate earnings renewed fears of a global recession.Source: Business and financial news - CNNMoney.com | 23 Oct 2008 | 11:45 am Xerox posts weaker-than-expected profitNEW YORK (Reuters) - Xerox Corp , a supplier of office printing equipment and related services, posted weaker-than-expected quarterly profit, as cautious spending plans by its largest customers hurt profit margins.Source: Reuters: Business News | 23 Oct 2008 | 11:42 am Bet big on emerging marketsAre emerging markets a bargain right now? The instinct is right, as developing-country indexes have taken a serious thumping this year. Year-to-date, Argentina's main index is down 51%. China's is down 63%. Russia is down 68%. Overall, the MSCI Emerging Markets index is down 52% year-to-date, versus *just* a 34% drop for the S&P 500.Source: Business and financial news - CNNMoney.com | 23 Oct 2008 | 11:38 am Early Bird Analyst Upgrades (AEO, BPL, GMR, ITRI, PNR, TCK, URBN)These are some of the top analyst upgrades we are seeing from Wall Street firms this Thursday morning with more than two hours to the open:
Jon C. Ogg Source: 24/7 Wall St. | 23 Oct 2008 | 11:32 am Oil climbs as Opec cut expectedOil prices recovered from 16-month lows on growing expectations that oil producing Opec will reduce output.Source: BBC News | Business | World Edition | 23 Oct 2008 | 11:30 am Lilly posts loss on charges for Zyprexa probesNEW YORK (Reuters) - Eli Lilly and Co posted a third-quarter loss on Thursday as it booked $1.48 billion in charges for probes of its Zyprexa schizophrenia treatment, but sales topped Wall Street expectations on double-digit gains for many of its biggest drugs.Source: Reuters: Business News | 23 Oct 2008 | 11:30 am Early Bird Analyst Downgrades (ADCT, ACL, AMMD, BGH, CNB, CNW, ERTS, FCX, NAT, OSG, PCU, STM)
Jon C. Ogg Source: 24/7 Wall St. | 23 Oct 2008 | 11:30 am Oil rises to $67 on planned OPEC cutsRead full story for latest details.Source: Business and financial news - CNNMoney.com | 23 Oct 2008 | 11:18 am Shares slide amid recession fearsEuropean stocks drifted lower, after fears of a global recession saw Asian stocks plunge overnight.Source: BBC News | Business | World Edition | 23 Oct 2008 | 11:16 am Oil ticks up as OPEC weighs supply cutLONDON (Reuters) - Oil rose on Thursday ahead of an emergency OPEC meeting expected to consider supply cuts after a 45 percent drop in prices from record highs hit in July.Source: Reuters: Business News | 23 Oct 2008 | 11:15 am Mortgage lending ticks up from record lowsMortgage lending picked up slightly in September but remained near record lows as the housing market continued to be gripped by the seizure in the home loan market.Source: Latest Business News from Times Online | 23 Oct 2008 | 11:07 am Automakers fear bleak 2009 as demand plungesMILAN/FRANKFURT (Reuters) - Daimler , Hyundai Motor and Fiat added to the gloom facing the autos sector with bleak forecasts for next year, as the global financial crisis took its toll.Source: Reuters: Business News | 23 Oct 2008 | 11:06 am Dow Chemical's (DOW) Perfect Pitch
The forecast has special weight coming from Dow. It is not just a $60 billion company. It is a firm which does business in a substandial number of sectors and does it in almost every country in the world. Dow has built itself into an operation which spans from chemicals to plastics to agricultural products. It said the prices that it charges customers were up 22%. That is a sign inflation may not be wrung out of the global economy. But, the real news is Dow's view of the future. Very few companies have been so pessimistic. Douglas A. McIntyre Source: 24/7 Wall St. | 23 Oct 2008 | 10:55 am RadioShack posts higher quarterly profit (Reuters)Reuters - Electronics retailer RadioShack Corp reported a higher third quarter profit on Thursday helped by demand for digital television converters and video games.Source: Yahoo! News: Business | 23 Oct 2008 | 10:49 am Credit Suisse Makes $1.1 Billion Loss in 3QCredit Suisse Group reported a $1.08 billion loss during the third quarter and said it was working to cut further its exposure to toxic assets.Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Oct 2008 | 10:43 am Goldman Sachs (GS) Cuts 10%
Goldman has been the market leader in M&A, underwriting,and proprietary trading for some time. If the firm was simply looking back at its relatively poor earnings, it would not be cutting now. The management at Goldman is too smart. It would have taken people out a year ago. The cuts at the financial firm are about the future. Goldman must be looking at the next year and seeing a potential compounding of its losses and no recovery in its core businesses. All those poor souls would not be going if the trouble was only likely to last another quarter or two. The Goldman news may be bad for Goldman, but it is likely to be much worse for the firm's less successful peers. A 10% cut in people at Goldman translates to a 15% or 20% layoff round at banks which are still losing billions of dollars a quarter. Goldman should be the one company that has a chance of making it through the credit crisis without a lot of bleeding. Its actions say otherwise. Douglas A. McIntyre Source: 24/7 Wall St. | 23 Oct 2008 | 10:40 am Amazon (AMZN): The Last Big Hope For Consumers This Earnings Season
If Amazon's forecast for the fourth quarter had been relatively strong, or even benign, Wall St. might have been able to believe that the consumer was not dead and buried. If people were going to buy things for the holidays, cheap prices and free shipping would bring them into the market. None of that worked out. In its press release and earnings call Amazon said it now anticipates full-year revenue of $18.46 billion to $19.46 billion, below the $19.52 billion that analysts polled by Thomson Reuters were expecting. In July, Amazon had predicted 2008 sales of $19.35 billion to $20.10 billion. The shortfall is all in the last quarter of the year. There is an extent to which investors had given up on most bricks-and-mortar retailers with the exception of Wal-Mart (WMT). Driving to outlets involves gas. The lines may not be long this year, but some places like Circuit City (CC) don't even have a full inventory. They might not get the credit to buy what they usually stock. E-commerce has been growing at nearly 30% a year since 2002. Even if that had fallen off a bit, there would be some sign, however modest, that someone, somewhere had money to spend. Amazon got on its call and fundamentally said the consumer is broke. Even free shipping will not bring him back. He may not even have a home where his Christmas presents can be sent. Douglas A. McIntyre Source: 24/7 Wall St. | 23 Oct 2008 | 10:30 am Global bank lending declines to 30-year lowInternational bank lending shrank by 3 per cent between April and June, the sharpest decline in more than 30 years, revealing the depth of the credit squeeze between lenders before the recent series of government-led bailouts.Source: Latest Business News from Times Online | 23 Oct 2008 | 10:30 am European Stocks Edge Lower After Drops in AsiaGlobal stock markets were mixed, with European exchanges mostly lower after another big sell-off in Asia.Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Oct 2008 | 10:27 am Banks to face small firm showdownThe government is to bring together bank bosses and small business representatives to "thrash out" their differences.Source: BBC News | Business | World Edition | 23 Oct 2008 | 10:26 am International bank lending slidesInternational lending by banks fell by $1.1 trillion in the second quarter, the largest contraction since 2001, offical figures show.Source: BBC News | Business | World Edition | 23 Oct 2008 | 10:20 am Average male retirement age risesThe average age at which men retire continues to rise and has now reached almost 65, official figures show.Source: BBC News | Business | World Edition | 23 Oct 2008 | 10:18 am Russia Tells OPEC To Take A Hike
The cartel had come to Moscow to tell the heads of the huge oil exporters that supplies are too great and this has sent the price of crude into a flat spin. The Russians almost certainly had figured that out, so OPEC probably had another reason for the trip. If OPEC tightens supply, and it will, the plan is to cut production enough to bring prices back up. The countries in the Middle East need the cash. They only have one option. From all reports, the Russians were not listening. That must have been disappointing for their visitors. If one or two producers hold out, the chopping of output may not work terribly well. But, for Russia oil is not just a way to make money. It is a strategic weapon, a hole card, an ace. Russia has not had something the West wants, except for Faberge eggs, in over a decade. With its army moving into Georgia from time-to-time and conducting field operations with the Venezuelan military, Russia can balance US concerns with the promise or threat that crude may not be abundant. The US may call the bluff. Russian may get a little revenge by holding back oil. It is a large enough supplier so that it could move prices up or down a few dollars. Crude has dropped from $147 a barrel to $70. OPEC can move that up. So can Russia. When American starts to see the end of it recession, cheap oil could be a critical element in recovery. High crude prices could also cap the speed at which things improve. Russia may not be able to change US policy, but it could make life painful. Douglas A. McIntyre Source: 24/7 Wall St. | 23 Oct 2008 | 10:17 am Darling tells banks to help small firmsA package of measures designed to help small firms through a recession will be top of the agenda at a meeting between British bank chiefs, Alistair Darling, the Chancellor, and Lord Mandelson, the new Business Secretary.Source: Latest Business News from Times Online | 23 Oct 2008 | 9:55 am Robert PestonAfter banks' crises, now there are runs on countriesSource: BBC News | Business | World Edition | 23 Oct 2008 | 9:42 am Retail revenues fall as clothing sales unravelRetail sales fell by less than expected during September but annual growth declined to a two and a half year low after demand for new clothes and household goods slowed.Source: Latest Business News from Times Online | 23 Oct 2008 | 9:41 am The Eastern Front For Banks: Credit Cards
Now that credit cards balances are at historic highs and people do not have money to cover the nut, banks are faced with another wave of defaults and write-offs. Instead of being homes, the culprit is plastic. According to The Wall Street Journal. "Banks and big card issuers have seen card losses climb and are projecting that things will worsen in 2009." There is no surprise in that. The deadbeats are already stopping their payments and claiming insolvency. As of last year, total US credit card debt was more than $900 billion. How much of that ends up not being paid? In a really deep recession, maybe 10%. That may be a lot of money, but spread around to a large number of banks it may actually not be so bad. All of that leaves out the calculation of credit card debt pools which were bundled and cut into tranches the way that subprime mortgages were. The derivatives have leverage levels which probably rival those of mortgage paper, so when the default rates on the underlying credit rises, the compound problem for banks could be several times worse than the charge-offs from consumers. There may be another very large set of write-offs coming at banks. The whirlwind of debt compounded by securitization is not something in the past. Wall St. may only have seen the first act. Douglas A. McIntyre Source: 24/7 Wall St. | 23 Oct 2008 | 9:37 am Wolseley cuts 3,000 jobs in US shake-upWolseley, the building materials group, will close almost a third of its US branches and cut 3,000 jobs.Source: Latest Business News from Times Online | 23 Oct 2008 | 9:00 am European Stocks Edge Higher After Drops in AsiaGlobal stock markets were mixed, with European exchanges mostly higher after another big sell-off in Asia.Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Oct 2008 | 8:34 am Credit Suisse cuts exposure to toxic assetsCredit Suisse said this morning that it reduced its exposure to toxic US assets in the third quarter of 2008.Source: Latest Business News from Times Online | 23 Oct 2008 | 8:25 am Sony slashes forecast on strong yenSony has slashed its profit forecasts and risks falling into losses in the second half of this year unless the euro recovers against the yenSource: FT.com - US homepage | 23 Oct 2008 | 7:48 am Asian Market Losses DeepenAsian stock markets headed into another day of steep falls, led by the Nikkei 225 index, which plunged more than 7 percent before recovering to 2.5 percent later.Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Oct 2008 | 7:45 am Gulf stocks plummet at opening (AFP)
Source: Yahoo! News: Business | 23 Oct 2008 | 7:42 am Credit Suisse swings to SFr1.26bn lossSwitzerland's second-biggest bank blamed writedowns in the value of its leveraged loans and mortgage-backed securities and 'exceptionally adverse' trading conditionsSource: FT.com - US homepage | 23 Oct 2008 | 7:32 am Beyond recessionCar industry may emerge stronger than beforeSource: BBC News | Business | World Edition | 23 Oct 2008 | 7:31 am Australian Stocks: Market falls by over four per centSYDNEY- Australian stocks closed lower for the second consecutive day, falling by over four per cent. The market was dragged down by big losses in the resources sector amid renewed fears of a global economic slowdown. At 1615...Source: New Zealand Herald - Business | 23 Oct 2008 | 7:19 am Wachovia reports $23.9-billion third-quarter lossAnalysts were surprised by the deficit. The biggest factor was its 2006 acquisition of Golden West. Wachovia Corp...Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Oct 2008 | 7:00 am Future cloudy for Downey SavingsThe Newport Beach lender posts a wider loss and may seek help from the U.S. bailout package.Not long ago, there were five big players in the business for high-risk home loans known as option ARMs. Source: L.A. Times - Business | 23 Oct 2008 | 7:00 am Homeowners allege firms underinsured them for wildfiresSan Diego County residents, saying they were misled into believing they had enough coverage, urge the state insurance commissioner to take action. Insurers say it's not a severe problem. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Oct 2008 | 7:00 am Home builder Ryland Group posts loss of $65.7 millionThird-quarter results are hurt by falling demand and prices. Calabasas-based home builder Ryland Group Inc. reported...Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Oct 2008 | 7:00 am Amgen profit beats estimatesAMGEN Biotech's profit beats estimatesSource: Infocious RSS raw feed - channel BNPaperBusiness | 23 Oct 2008 | 7:00 am Amgen profit beats estimatesAMGEN Biotech's profit beats estimatesSource: L.A. Times - Business | 23 Oct 2008 | 7:00 am AIG to freeze some executive payThe insurer will withhold severance and bonus payments from ex-CEO Martin Sullivan and its financial unit. New York Atty. Gen. Andrew Cuomo had demanded the firm stop 'extravagant' expenses. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Oct 2008 | 7:00 am The Dow plunges more than 500 points as earnings rattle investorsThe 5.7% drop is the index's biggest loss since last week's 733-point decline. Analysts blame the sell-off on concerns about a deep recession.Any hope that improvements in global credit markets would provide lasting relief to Wall Street is quickly fading. Source: L.A. Times - Business | 23 Oct 2008 | 7:00 am Wachovia reports $23.9-billion third-quarter lossAnalysts were surprised by the deficit. The biggest factor was its 2006 acquisition of Golden West.Wachovia Corp. reported a $23.9-billion third-quarter loss Wednesday, the largest loss at any bank since the financial crisis began, reflecting the company's terrible timing in acquiring California-based mortgage lender Golden West Financial Corp. two years ago. Source: L.A. Times - Business | 23 Oct 2008 | 7:00 am The battle of the medical billsDoctors and insurers blame each other for an administrative headache that is driving up the nation's healthcare costs.Last of three parts Source: L.A. Times - Business | 23 Oct 2008 | 7:00 am Homeowners allege firms underinsured them for wildfiresSan Diego County residents, saying they were misled into believing they had enough coverage, urge the state insurance commissioner to take action. Insurers say it's not a severe problem.As a wildfire sparked evacuations in Southern California on Wednesday morning, victims of a blaze that destroyed 1,600 homes in San Diego County a year ago complained that they were still battling insurance companies to get more money to rebuild. Source: L.A. Times - Business | 23 Oct 2008 | 7:00 am Stocks plunge more than 500 points as earnings rattle investorsThe 5.7% drop is the Dow's biggest loss since last week's 733-point decline. Analysts blame the sell-off on concerns about a deep recession. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 23 Oct 2008 | 7:00 am NZ stocks: NZ market plummets 3.175 pcThe New Zealand sharemarket plunged again today, even after the Reserve Bank of New Zealand cut the official cash rate by a full percentage point to 6.5 per cent. There was simply nowhere to hide from the reality that global share...Source: New Zealand Herald - Business | 23 Oct 2008 | 5:57 am Currency: Dollar rises on rate cutThe New Zealand dollar managed to rise when the Reserve Bank cut the official cash rate by 100 basis points to 6.5 per cent today. It was not what usually happens when interest rates are cut but there was a rumour in London overnight...Source: New Zealand Herald - Business | 23 Oct 2008 | 5:33 am Brazilian film industry's resurgence aided by foreign co-producersFilmmakers will complete 90 productions this year, about a dozen partnered with U.S., Asian, Canadian and European producers.Brazilian director Heitor Dhalia was delighted and profoundly relieved to finally see his movie "Drifting" screened this month. The completion of the film based partially on his childhood ended an emotionally grueling two-year gestation. Source: L.A. Times - Business | 23 Oct 2008 | 5:15 am A Thaw in the FreezeEfforts to unfreeze the flow of credit may be starting to work.Source: SmartMoney.com | 23 Oct 2008 | 4:00 am Orange County's Measure J foes not even botheringThe proposal to require voter approval of any future increases in county worker pensions is considered certain to pass.Orange County's Measure J may be the closest thing to a sure bet on next month's ballot. Voters appear to so strongly favor the idea of requiring their approval of any future increases in county employees' pensions that unions for government workers aren't even campaigning against it. Source: L.A. Times - Business | 23 Oct 2008 | 1:21 am If stocks can't make a stand here, look out belowSource: L.A. Times - Business | 23 Oct 2008 | 12:59 am Kiwibank first to cut mortgage rates after Bollard slashes OCRKiwibank has become the first bank to react to Reserve Bank governor Alan Bollard's cut in the Official Cash Rate (OCR) by making a matching one per cent cut to its variable home loan rate. Kiwibank chief executive Sam Knowles...Source: New Zealand Herald - Business | 23 Oct 2008 | 12:30 am Business Briefs - WednesdayAmgen Q3 beats on anemia drug. The biotech said after hours that its Q3 EPS rose 14% to $1.23 ex items, beating views by 15 cents. Revenue climbed...Source: Investor's Business Daily: BUSINESS | 23 Oct 2008 | 12:19 am The Neighborhood Print Shop Goes Global With Online PresenceVistaPrint customers are not big spenders. The average order for the online provider of printing products and services is just $34. The average...Source: Investor's Business Daily: BUSINESS | 23 Oct 2008 | 12:19 am Trends & Innovations - WednesdayMobiles pose problem behind barsSource: Investor's Business Daily: BUSINESS | 23 Oct 2008 | 12:19 am After The Close - WednesdayALLSTATE (ALL), an insurer, said it swung to a Q3 loss of 35 cents ex items, missing views by $1.07. Revenue fell 19% to $7.32 bil, in line with...Source: Investor's Business Daily: BUSINESS | 23 Oct 2008 | 12:19 am Angry Contact shareholders reject directors' pay hikesContact Energy shareholders at the company's annual meeting have voted to reject substantial pay hikes to the directors' fee pool. The company has came under fire from political leaders and shareholder activists, as it seeks to...Source: New Zealand Herald - Business | 23 Oct 2008 | 12:00 am Amazon forecast highlights holiday fearsAmazon underlined the uncertainty facing retail sales this Christmas, forecasting fourth-quarter sales in the broad range of $6bn to $7bn – representing growth of as low as 6 per cent or as high as 23 per cent on the same period last yearSource: FT.com - US homepage | 22 Oct 2008 | 11:37 pm Profits down at ANZ-National - nearly $1bn for the yearANZ National Bank is still making about a billion dollars profit a year in New Zealand and is arguing there is no need to rush into a guarantee scheme to cover wholesale areas of bank business. The country's largest bank today...Source: New Zealand Herald - Business | 22 Oct 2008 | 11:30 pm AIG to freeze ex-chief's $19m paymentAIG is to freeze about $19m in compensation payments to Martin Sullivan, the former chief executive of the stricken insurance groupSource: FT.com - US homepage | 22 Oct 2008 | 11:01 pm Repossessions must be a 'last resort'UK mortgage lenders will be forced to prove that they are repossessing Britons' homes only as a last resort under new rules announced yesterday by the Prime Minister.Source: Latest Business News from Times Online | 22 Oct 2008 | 11:01 pm AIG agrees to freeze payments to ex-CEOAmerican International Group, the US insurer that was recently bailed out by the government, agreed to freeze any payments that had been due to Martin Sullivan, its former British-born chief executive, whose contract calls for $19 million plus other benefits.$Source: Latest Business News from Times Online | 22 Oct 2008 | 11:01 pm Brian Fallow: Bollard boosts confidence with words and deedsWith both words and deeds Reserve Bank governor Alan Bollard has moved to boost confidence today. The full percentage point cut in the official cash rate to 6.5 per cent is the steepest since the OCR was introduced nearly 10 years...Source: New Zealand Herald - Business | 22 Oct 2008 | 11:00 pm Economy - Wednesday (Investor's Business Daily)Investor's Business Daily - Amid a financial crisis that has scared borrowers and lenders alike, home loan applications tumbled 16.6% last week to their lowest level in nearly 8 years, said the Mortgage Bankers Assoc. The MBA's purchase index fell 10.9% to 279.3, the worst since Oct. '01. The refi gauge dived 23.5% to 1,158.8. The 30-year mortgage rate dropped 19 basis points to an average 6.28% after surging 48 ticks the prior week. But that failed to stem the fall in applications. The rate on a 1-year ARM shot up 30 basis points to 6.97%.Source: Yahoo! News: Business | 22 Oct 2008 | 10:45 pm NZ Shares: NZX follows world markets downThe New Zealand sharemarket fell sharply in early trading, following the lead of overseas markets and despite an unprecedented cut in official interest rates. Around 10.10am the benchmark NZX-50 index was down 48.58 points, or...Source: New Zealand Herald - Business | 22 Oct 2008 | 10:42 pm US capital injection sets up bank consolidationsThe US government's planned $125bn capital injection into nine financial groups is set to unleash another wave of consolidation as banks scramble to use the cash on takeovers and bolt-on acquisitions, according to Wall Street executivesSource: FT.com - US homepage | 22 Oct 2008 | 10:31 pm Amazon.com profit flies - but not for longNEW YORK - Amazon.com says that its profit climbed 48 per cent in the third quarter, but the company reduced its full-year sales outlook, showing that the online retailer cannot escape the weak economy. Its shares dived. The...Source: New Zealand Herald - Business | 22 Oct 2008 | 10:30 pm Cullen attacks Nats as Kiwisaver numbers swellFinance Minister Michael Cullen has used the release of figures showing 827,000 people are now KiwiSaver members to attack National's plans to "gut" the scheme. Dr Cullen today released a departmental evaluation of KiwiSaver's...Source: New Zealand Herald - Business | 22 Oct 2008 | 10:30 pm VIX Index of U.S. Stock Option Prices Advances 31% to 69.65Source: Bloomberg - All Podcasts | 22 Oct 2008 | 9:38 pm Morgan Stanley's Darst Likes ETFs for Pharma, Drug RetailSource: Bloomberg - All Podcasts | 22 Oct 2008 | 9:32 pm Backshall Sees Corporate Debt Defaults RisingSource: Bloomberg - All Podcasts | 22 Oct 2008 | 9:26 pm Ross Is Buying Mortgage Servicers, Likes Regional BanksSource: Bloomberg - All Podcasts | 22 Oct 2008 | 9:23 pm US to host G20 world summit over crisisGlobal stock markets plunged as the White House said it would invite world leaders to a global financial summit next month, 11 days after the US presidential election.Source: FT.com - US homepage | 22 Oct 2008 | 9:04 pm AIG chief's new job: Selling assuranceThe new CEO at AIG, Ed Liddy, not only has to turn the company around, he's got to deal with some really bad press. Kai Ryssdal talks with him about the challenges ahead in our latest installment of Conversations From the Corner Office.Source: Marketplace | 22 Oct 2008 | 8:30 pm Emerging-market stocks hammered againSource: L.A. Times - Business | 22 Oct 2008 | 8:00 pm S.E.C.: A Heckuva Job!The Securities and Exchange Commission has been mightily criticized in recent weeks for what some see as its inactivity in corralling errant companies for their financial misdeeds, but today the agency shot back.It announced that it had brought a record number of insider trading cases in the 2008 fiscal year, which ended September 30. It also chalked up the second-highest number of enforcement actions in its history over the same time, and returned more than $1 billion to investors who had lost money. Even so, the numbers aren't likely to quell critics of the agency or its chairman, Christopher Cox. Both are likely to come in for more opprobrium tomorrow, when Cox is due to appear before the decided unfriendly House Oversight and Government Reform committee. Of course, this follows Cox's very public kneecapping by Republican presidential candidate John McCain, who said if he were president he would fire Cox—never mind that he serves a defined term. As documented in a recent Condé Nast Portfolio article, Cox has undercut his enforcement staff, leading to smaller, less-significant cases being brought against wrongdoers. And questions have been raised about contact between the enforcement staff and big players on Wall Street during the current economic crisis. In a report issued earlier this month, the commission's inspector general said that Linda Chatman Thomsen, director of the commission's division of enforcement, and two supervisors should be disciplined for their role in an insider-trading probe. Senator Chuck Grassley of Iowa, the ranking Republican on the Senate Finance Committee, followed up with a letter to Cox asking about inappropriate contact between Thomsen and J.P. Morgan's general counsel while the investment bank was considering a bid for Bear Stearns. Even its own inspector general has criticized the S.E.C. Just last month, it issued a lengthy report on the commission's initiative to let financial institutions regulate themselves. A chastened Cox responded by acknowledging that "voluntary regulation does not work." Still, the commission is taking a glass-half-full approach to self-assessment. In its announcement today, the commission said it has greatly stepped up its profile as the defender of the investor. During the last fiscal year, the commission brought 671 enforcement actions. Insider trading cases were up more than 25 percent, and market manipulation cases up more than 45 percent. One of its highest-profile actions was the prosecution of a $24 million insider-trading case against former Dow Jones board member David Li and three others. The commission added that it has more than 50 ongoing investigations relating to the subprime mortgage market. One of the major fraud cases the S.E.C. brought last year was one against two Bear Stearns hedge fund managers on charges they fraudulently misled investors about the financial state of the firm's two largest hedge funds. The agency also brought charges against 10 insiders or promoters of publicly traded companies who made stock sales in exchange for illegal kickbacks. And the commission said it has reached preliminary settlements with six of the largest firms in the auction rate securities markets. Those settlements, which are not included in the 2008 enforcement statistics, could return more than $50 billion to investors, the commission said.Related Links Insider Trading Suspects Settle Up Shine a Light on Liquidity Sex, Drugs, and Options Backdating Source: Portfolio.com: Top 5 | 22 Oct 2008 | 7:30 pm Director Oliver Stone's `W.,' Bach Vespers in NYCSource: Bloomberg - All Podcasts | 22 Oct 2008 | 7:04 pm Former Secretary Summers Says Crisis Needs Global ApproachSource: Bloomberg - All Podcasts | 22 Oct 2008 | 6:56 pm Historian McPherson Discusses Lincoln as Military LeaderSource: Bloomberg - All Podcasts | 22 Oct 2008 | 6:53 pm Shilling Says Economic Recovery Likely to Be `Sluggish'Source: Bloomberg - All Podcasts | 22 Oct 2008 | 6:42 pm Wal-Mart in China standards driveWal-Mart, the world's biggest retailer, told its Chinese suppliers to meet strict environmental and social standards or risk losing its businessSource: FT.com - US homepage | 22 Oct 2008 | 6:19 pm Cost-Cutting, Cuomo-StyleMain Street has a new cheer to chant: Way to go, Cuomo!New York attorney general Andrew Cuomo announced that Edward Liddy, chief executive of A.I.G., has agreed to freeze all of the $19 million in compensation it owes its former chief Martin Sullivan. Liddy has also agreed to make no payments out of A.I.G.'s $600 million bonus pool for employees of the firm's financial-products group. "To be clear, it is my position that until the taxpayers are repaid with interest, the more than $120 billion that has been used in the rescue financing of A.I.G., no funds should be paid out of these pools to any executives," Cuomo wrote in a letter to Liddy. "As A.I.G. recovers using taxpayer money, these pools should not be used to reward executives ahead of taxpayers." However, the letter did not explicitly say that Liddy had agreed to freeze payments until the taxpayers had been repaid. Cuomo's letter also said that Joseph Cassano, the former head of the financial-products group that was responsible for the problems that led A.I.G. into the arms of the federal government, was due to receive $69 million of the $600 million bonus pool. Cassano stepped down in March, but he had continued to receive $1 million per month in consulting fees until the government took over A.I.G. Already, Liddy had agreed to cancel all junkets and perks that weren't justified by its business. The firm came under scrutiny after it was revealed that A.I.G. paid $500,000 for a junket less than a week after the federal bailout. Earlier this month, Cuomo launched an investigation into A.I.G.'s expenditures and compensation arrangements. It's unclear if Sullivan would be legally entitled to the $19 million under his contract or whether he would even try to go after it in court. The news is good for taxpayers, but it's almost hard to believe it took measures by Cuomo to get Liddy to step up to it. Liddy was appointed head of A.I.G. after the government took control of it in September. To continue paying out $600 million in bonuses to the group that was responsible for A.I.G.'s fate seems almost preposterous. The news comes the same day that Representative Barney Frank called for a moratorium on all Wall Street bonuses. "They have a negative incentive effect because they are the ones that say if you take a risk and it pays off you get a big bonus,'' he said, according to Bloomberg. And if it causes losses "you don't lose anything.'' It's hard to imagine a Wall Street without bonuses. Then again, until recently, it was hard to imagine a Wall Street without Bear Stearns, Lehman Brothers, and Merrill Lynch. Related Links World Turned Upside Down Wall Street on the Ropes Lehman Gets a Second Look Source: Portfolio.com: Top 5 | 22 Oct 2008 | 6:00 pm MLB studying safety of maple batsMaple wood baseball bats are favored by about 60% of Major League Baseball players because they perform better. But maple bats can shatter and hurt people, which has drawn the scrutiny of an MLB safety committee. Nancy Farghalli reports.Source: Marketplace | 22 Oct 2008 | 5:29 pm Maybe 'too big to fail' is just too bigTaxpayers are bailing out huge Wall Street banks because their collapse would spell doom for the financial system. But commentator Robert Reich thinks it's odd to also allow those companies to consolidate and get even bigger.Source: Marketplace | 22 Oct 2008 | 5:29 pm Fed acts to boost interbank lendingThe Fed is jockeying to control the interest rate on loans that banks make to each other. Who cares? You should. Those rates affect the ability of consumers and businesses to get loans. Nancy Marshall Genzer reports.Source: Marketplace | 22 Oct 2008 | 5:29 pm Touring the new Google-powered phoneFinally, it's here -- T-Mobil has started selling the Google-powered G1 smart phone. So what's all the fuss about. Kai Ryssdal calls in technology writer Kevin Pereirra to let him hold one one of the phones and show him what it does.Source: Marketplace | 22 Oct 2008 | 5:29 pm U.S. dollar bouncing backWhen the value of the U.S. dollar dropped, Americans traveling out of the country were bummed. But American companies made good money doing business overseas. Well, the tide is turning. Senior Business Correspondent Bob Moon reports.Source: Marketplace | 22 Oct 2008 | 5:29 pm SEC wants executive salaries reined inMillions of dollars flood into the bank accounts of CEO's as a reward for high-risk behavior. Should CEO's still be making millions while taxpayers bail out their struggling companies? Marketplace's Stacey Vanek-Smith reports.Source: Marketplace | 22 Oct 2008 | 5:29 pm Credit Suisse's Stephansen Sees 8% U.S. Unemployment in 2009Source: Bloomberg - All Podcasts | 22 Oct 2008 | 3:34 pm The Idea-to-Drug GapThe fundamental pact between medical researchers and the public is simple. The U.S. government spends billions of taxpayer's dollars on basic research each year, expecting at some point to reap the benefit of new therapies and medical tests that people can use.Sure, the public needs to be patient as researchers painstakingly tease out details of how things work in living cells, genes, organs, and entire organisms, including humans. Experimentation requires a great deal of trial and error, and often ends in failure, though even failure can be as useful as success in testing hypotheses. But what shall we make of a recent study in the prestigious journal Science that suggests a mean lag time of 24 years between the first publication of a therapeutic idea and the confirmation of that idea in a clinical trial on humans? The study by a team at the University of Ioannina School of Medicine in Greece analyzed published studies of successful clinical trials for drugs and counted backwards to the year when the earliest journal publication on preparation, isolation, or synthesis appeared, or when the first patent was awarded. Researchers on the team also have appointments at Tufts Medical Center in Massachusetts and George Washington University in Washington. The 24 years, by the way, does not include additional years it typically takes to complete successful human testing for drugs before they can be approved by the Food and Drug Administration. This additional time can mean a total of perhaps 30 years from idea to approved drug. A previous study in 2004 by one of the co-authors, John Ioannidis, showed that most scientific findings touted in major journals as imminently feasible for treating humans never even make it to clinical trials. Four years ago, his team scoured more than 25,000 studies in six journals published between 1979 and 1983; it found 101 studies that made particularly bold claims of imminent feasibility for treating humans. Yet only four of these have ended up as approved therapies, and only one—ACE inhibitors for high blood pressure—is widely used. Other successful drugs apparently come from studies making less grandiose claims, or out of the labs of drug companies. As the world faces economic turmoil, and what could be more limited resources expended on basic research, it seems as if we could get more bang for our shrinking bucks. This has been the idea behind an effort launched in 2006 by Elias Zerhouni, who is about to step down as the director of the National Institutes of Health, to promote translational research—the study of ways to translate basic science into actual treatments—at the N.I.H. So far, the effort has spent or committed some $10 billion to programs in a consortium of 38 universities and research centers. Last month, for instance, the N.I.H. awarded $22 million for the Albert Einstein College of Medicine and Montefiore Medical Center in New York City to create an institute for translational research. The reasons given for the time lag and for the failure to follow up on initial discoveries are numerous and complex, though a few seem to pop up whenever the subject is brought up in papers, articles, or conferences. One problem is how the culture of medical research tends to reward original and novel ideas and findings, but not the process of retesting these discoveries to see if they hold up. Research institutions gain funding for splashy new findings, and scientific journals garner headlines for publishing them. The media plays its role by dutifully and often uncritically reporting—sometimes breathlessly—the latest astounding discoveries as fed to them by the journals. I have been known to do this myself, writing stories about findings that realistically are years—or decades—away from being tested in people, and others that will never make it out of the lab. In other words, some studies make premature and exaggerated claims—or so says the team from Greece. "As scientists, we should convey to our funders and the public the immense difficulty of the scientific discovery process," the authors of the recent study write. "Successful translation is demanding and takes a lot of effort and time even under the best circumstances; making unrealistic promises for quick discoveries and cures may damage the credibility of science in the eyes of the public." Another issue is that no good system exists to connect the most promising labs and researchers with the companies that develop drugs into products. Technology transfer offices at Harvard, Stanford, and other leading universities have become more aggressive in recent years in proffering the findings of their researchers to companies and investors, yet there is no systematic vetting of studies to see which might be commercially viable. The field of translational medicine means to address these problems and others in an effort to make good on the original deal between the research community and the public. The translational movement also has a philosophical and ethical component that aims to link medical researchers with other stakeholders, including physicians, ethicists, public health experts, policy makers, and the public. Some progress is being made to closing the gaps between ideas and drugs, says Eric Topol, director of the new Scripps Translational Science Institute in La Jolla, California. "We need more funding and emphasis on translational science," he told me, "and we're up against a very entrenched system. But I am an optimist that we can make this work."Related Links DNA Police You 2.0: Closing the Genetic Gap Genes 'R' Us: The New Dot-Coms? Source: Portfolio.com: Top 5 | 22 Oct 2008 | 2:00 pm What Wells WonThat faint sound you hear off in the distance? It's Citigroup chief executive Vikram Pandit chuckling as he reads Wachovia's third-quarter earnings announcement. He clearly has reason to hope so. Related LinksNo Deal The Bank Heist What's Wachovia Worth? Source: Portfolio.com: Top 5 | 22 Oct 2008 | 2:00 pm Divorce, Media-Mogul-StyleAs he tries to hold on to his media empire, Sumner Redstone has filed for divorce from his second wife, citing "irreconcilable differences."The split—which had been rumored even as they still appeared as a couple in public over the weekend—comes as Redstone is working to renegotiate some $1.6 billion in debt at National Amusements. The debt is backed by shares of Viacom and CBS, which have tumbled in the past year. National Amusements, a movie-theater chain in which Redstone has an 80 percent stake, is the controlling shareholder in the media companies. The debt talks have sparked concerns that Redstone, who is 85, may need to sell more CBS and Viacom shares, loosening his grip on those companies. Earlier this month, he sold more than $200 million worth of shares to meet a margin call. "After five and a half years together, we have amicably ended our marriage," the couple said in a statement. "While this is a difficult decision for both of us, we remain close and supportive friends and are committed to each other's continued happiness and success. We will have no further comment and hope that you will respect our privacy." The Los Angeles Times reports that a prenuptial agreement signed by his wife, Paula Fortunato, 46, means that she will she receive at least $5 million, or $1 million for each year of their marriage. That payment is expected to come out of Redstone's pocket. The Hollywood Reporter says that Redstone was worth as much as $9 billion before the stock market plummeted. Still, the divorce highlights how much is changing in Redstone's world. Yet turmoil is nothing new to the media mogul. He has famously clashed with executives and family members. He abruptly replaced Tom Freston in 2006, fired Frank Biondi, and forced out Mel Karmazin. He is even estranged from his daughter Shari, who owns 20 percent of National Amusements and was once the heir apparent. But business is business. The Los Angeles Times notes that Shari is leading the debt-restructuring negotiations with the banks. Related Links Crunch Time for Sumner Shari Redstone's Big-Screen Test Sumner Redstone's Song of Himself Source: Portfolio.com: Top 5 | 22 Oct 2008 | 12:00 pm The C.D.O. Money PitThe global wave of government bank rescues and efforts to clean up hundreds of billions of dollars of toxic debt may give some comfort that the financial system is finally climbing out of a very deep hole.Not quite yet. Bloomberg News has a sobering report about the impact that a deterioration in corporate bonds is having on $1.2 trillion in collateralized-debt obligations tied to corporate debt. (What's a C.D.O.? Click here for a look at mortgage-tied C.D.O.'s.) Credit markets around the world were rocked by the September bankruptcy of Lehman Brothers. The sweeping moves by the Treasury to buy assets and invest in banks and by the Federal Reserve to back money markets and banks has gone a long way toward easing stresses in many of those markets. Yet, "repair and rehabilitation may be occurring elsewhere in the credit markets, but it does not seem to have spilled into the corporate bond market," notes John Jansen on Across the Curve. The weakness in credit debt spells losses for structured investments tied to them and the banks and other institutions that hold them. Losses "may spark the next round of write-downs on C.D.O.'s after $660 billion in subprime-related losses," says Bloomberg, citing Barclays Capital. "We'll see the same problems we've seen in subprime," Alistair Milne, a professor in banking and finance at Cass Business School in London, told Bloomberg. How deep will these markdowns be? Bloomberg quotes a derivatives strategist who says that some synthetic C.D.O.'s, tied to credit-default swaps on corporate bonds, are trading at less than 10 cents on the dollar. Related Links Hit the Panic Button The End of Lehman Salvaging the Wreckage Source: Portfolio.com: Top 5 | 22 Oct 2008 | 11:30 am
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