World Business News Headlines for November 13, 2008

Nouriel Roubini and the Folly of Fiscal Stimulus

Whereas before there had been almost no framework to explain what Roosevelt was doing, now a respectable one was forming. Spending promoted growth, if government was big enough to spend enough. Amity Shlaes, The Forgotten Man

NYU professor Nouriel Roubini is presently the economist of the moment. Having correctly called the economic troubles in our midst for arguably the wrong reasons, his celebrity recently took him to Capitol Hill, where once again his prescriptions reveal a misreading of the problems at hand.

Wal-Mart net up 10 percent, but outlook lowered

NEW YORK (Reuters) - Wal-Mart Stores Inc reported a slightly better-than-expected 10 percent rise in quarterly profit on Thursday as shoppers seeking relief from deteriorating global economic conditions scoured its aisles for discounts on groceries and medicine.

Source: Reuters: Business News | 13 Nov 2008 | 2:49 pm

Wal-Mart net up 10 percent, but outlook lowered (Reuters)

Reuters - Wal-Mart Stores Inc reported a slightly better-than-expected 10 percent rise in quarterly profit on Thursday as shoppers seeking relief from deteriorating global economic conditions scoured its aisles for discounts on groceries and medicine.

Source: Yahoo! News: Business | 13 Nov 2008 | 2:49 pm

Aiding carmakers not intent of bailout package: White House

ANDREWS AIR FORCE BASE, Md (Reuters) - The White House said on Thursday it was not Congress' intent to use the $700 billion financial rescue package to help ailing U.S. automakers.

Source: Reuters: Business News | 13 Nov 2008 | 2:48 pm

Stocks open higher despite jobs data

NEW YORK --Wall Street is rebounding modestly in early trading, with investors seemingly unfazed by a government report showing a larger-than-expected jump in unemployment claims. The Dow Jones industrials are up 37 points at the 8,319 level, and the other major indexes are also advancing after three straight days of declines.

Source: L.A. Times - Business | 13 Nov 2008 | 2:48 pm

Energy, Wal-Mart lift stocks at open

NEW YORK (Reuters) - Stocks opened higher on Thursday as rebounding oil prices lifted energy shares and Wal-Mart Stores Inc offered some reassuring news about consumer spending.

Source: Reuters: Business News | 13 Nov 2008 | 2:47 pm

Energy, Wal-Mart lift stocks at open (Reuters)

Reuters - Stocks opened higher on Thursday as rebounding oil prices lifted energy shares and Wal-Mart Stores Inc offered some reassuring news about consumer spending.

Source: Yahoo! News: Business | 13 Nov 2008 | 2:43 pm

Stocks rally after retreat

Wall Street rallied Thursday morning as investors picked up stocks battered down in a three-session selloff on fears about the depth of the recession.

Source: Business and financial news - CNNMoney.com | 13 Nov 2008 | 2:42 pm

JPMorgan may take $1.6-$1.7 billion in writedowns: analysts

(Reuters) - At least two analysts on Thursday projected that JPMorgan Chase & Co would suffer write-downs in the range of $1.6 billion to $1.7 billion for the fourth quarter and cut their profit outlook for the bank. Analysts at Citigroup and Fox-Pitt Kelton said they cut fourth-quarter estimates to reflect the recent company outlook of higher-than-expected loan loss reserve additions, likely writedowns as well as private equity losses.

Source: Reuters: Business News | 13 Nov 2008 | 2:42 pm

Intel sales to fall 'below expectations'

Shares of Intel Corp. slip as much as 5% in preopen action Thursday, a day after the chip maker said it expects fourth-quarter results to be "below expectations" as it grapples with a flagging economy.

Source: MarketWatch.com - Top Stories | 13 Nov 2008 | 2:40 pm

Oil rises above $57, OPEC lends support

LONDON (Reuters) - Oil rose above $57 a barrel on Thursday, recovering from a 22-month low as it drew limited support from news OPEC might take more emergency action to compensate for a deep drop in energy demand.

Source: Reuters: Business News | 13 Nov 2008 | 2:39 pm

Wal-Mart posts higher profit, but cuts outlook

NEW YORK -- Wal-Mart Stores Inc. reported a 10 percent increase in third-quarter profit today but trimmed its profit outlook because of the troubled global economy and the renewed strength of the dollar.

Source: L.A. Times - Business | 13 Nov 2008 | 2:35 pm

Aiding carmakers not intent of bailout package: White House (Reuters)

Reuters - The White House said on Thursday it was not Congress' intent to use the $700 billion financial rescue package to help ailing U.S. automakers.

Source: Yahoo! News: Business | 13 Nov 2008 | 2:34 pm

Trade deficit shrinks as oil imports slow

The U.S. trade deficit eased in September as lower gasoline prices drove down imports of crude oil.

Source: Business and financial news - CNNMoney.com | 13 Nov 2008 | 2:34 pm

Jobless claims surge while trade deficit narrows

WASHINGTON -- Applications for unemployment benefits soared to the highest level since just after the Sept. 11, 2001, terrorist attacks while the trade deficit shrank more than expected as demand for imports plunged, further evidence of the struggling U.S. economy.

Source: L.A. Times - Business | 13 Nov 2008 | 2:34 pm

24/7 Day Trading Alerts (CROX)(OPTR)(FEED)(NTAP)(AMAG)

Things are so bad at Crocs (CROX) that it is off nearly 50% down near $1.

Optimer Pharmaceuticals (OPTR) continues to be volatility. Details here..

AgFeed (FEED) is getting crushed.

NetApp (NTAP) is today's tech winner.

AMAG Pharmaceuticals (AMAG) is making a big run up.

Source: 24/7 Wall St. | 13 Nov 2008 | 2:33 pm

Jobless claims highest since Sept. 11 attacks

The number of Americans filing new claims for unemployment insurance last week surged to the highest levels since the wake of the Sept. 11, 2001 terrorist attacks, and the number continuing to collect benefits rose to a 25-year high, the government said Thursday.

Source: Business and financial news - CNNMoney.com | 13 Nov 2008 | 2:32 pm

'Value trap' kills value funds

Value investors have a simple, elegant strategy. They buy a stock trading cheaply relative to the company's earnings or business value and then patiently wait for the market to catch on to how wonderful it is.

Source: Business and financial news - CNNMoney.com | 13 Nov 2008 | 2:30 pm

Ranieri's Franklin Bank files Chapter 7 bankruptcy

NEW YORK (Reuters) - Franklin Bank Corp , the lender founded by mortgage securities pioneer Lewis Ranieri, filed for bankruptcy protection and plans to liquidate, after federal regulators seized its banking unit.

Source: Reuters: Business News | 13 Nov 2008 | 2:29 pm

NTT DoCoMo buys Tata stake for $2.7bn$

NTT DoCoMo has agreed to pay $2.7 billion for a 26 per cent stake in its Indian peer Tata Teleservices.$
Source: Latest Business News from Times Online | 13 Nov 2008 | 2:25 pm

Indications: U.S. stock futures point to a mixed, but higher start

U.S. stock futures were mixed Thursday as Intel lowered its sales outlook and Wal-Mart Stores, one of the few beneficiaries from the limp economy, nudged lower its earnings outlook.

Source: MarketWatch.com - Top Stories | 13 Nov 2008 | 2:25 pm

Bond Report: Treasurys little changed ahead of auction of 30-year bonds

Treasury prices trade little changed as bond market participants weigh data showing first-time unemployment claims rose to the highest in more than seven years as well as the government's impending auction of 30-year bonds.

Source: MarketWatch.com - Top Stories | 13 Nov 2008 | 2:24 pm

Jobless claims reach 7-year high

WASHINGTON (Reuters) - The number of workers filing new claims for jobless benefits rose last week to 516,000, the highest level since the weeks following the September 11, 2001 attacks, the Labor Department reported on Thursday.

Source: Reuters: Business News | 13 Nov 2008 | 2:22 pm

Jobless claims reach 7-year high (Reuters)

Reuters - The number of workers filing new claims for jobless benefits rose last week to 516,000, the highest level since the weeks following the September 11, 2001 attacks, the Labor Department reported on Thursday.

Source: Yahoo! News: Business | 13 Nov 2008 | 2:22 pm

KKR "moving ahead" on IPO, no comment on timing

HONG KONG (Reuters) - Kohlberg Kravis Roberts & Co co-founder George Roberts said the firm is "moving ahead with its IPO" but declined to comment on timing.

Source: Reuters: Business News | 13 Nov 2008 | 2:19 pm

Wal-Mart posts higher 3Q profit, but cuts outlook (AP)

AP - Wal-Mart Stores Inc. reported a 10 percent increase in third-quarter profit Thursday but trimmed its profit outlook because of the troubled global economy and the renewed strength of the dollar.

Source: Yahoo! News: Business | 13 Nov 2008 | 2:16 pm

Jobless claims surge while trade deficit narrows (AP)

AP - Applications for unemployment benefits soared to the highest level since just after the Sept. 11, 2001, terrorist attacks while the trade deficit shrank more than expected as demand for imports plunged, further evidence of the struggling U.S. economy.

Source: Yahoo! News: Business | 13 Nov 2008 | 2:16 pm

US firm cuts Macau building jobs

Up to 11,000 workers in Macau could lose their jobs after gaming giant Las Vegas Sands suspends its building projects.
Source: BBC News | Business | World Edition | 13 Nov 2008 | 2:15 pm

Economic Report: U.S. foreign trade slows sharply in September

The U.S. trade gap narrows to $56.5 billion in September as trade in goods and services with the rest of the world slows sharply, further evidence of the global economic slump.

Source: MarketWatch.com - Top Stories | 13 Nov 2008 | 2:15 pm

OECD projects protracted slowdown

The Organisation for Economic Co-operation and Development forecasts a "protracted slowdown" for leading economies.
Source: BBC News | Business | World Edition | 13 Nov 2008 | 2:07 pm

EU seeks to expand energy grids

The European Commission unveils plans to diversify the EU's energy imports and reduce reliance on Russia.
Source: BBC News | Business | World Edition | 13 Nov 2008 | 2:04 pm

NewsWatch: U.S. stock futures mixed after Intel, Wal-Mart reports

U.S. stock futures were mixed Thursday as Intel lowered its sales outlook and Wal-Mart Stores, one of the few beneficiaries from the limp economy, nudged lower its earnings outlook.

Source: MarketWatch.com - Top Stories | 13 Nov 2008 | 2:00 pm

Capital & Regional warns of tenant "stress"

Capital & Regional, the property fund manager, expects to see "increased stress" among its retail and leisure tenants as the economy contracts and consumer spending drops sharply.
Source: Latest Business News from Times Online | 13 Nov 2008 | 1:59 pm

Economic Report: Initial jobless claims top 500,000, highest in over seven years

First-time filings for state unemployment benefits hit their highest level since September 2001 in the latest week, rising to 516,000 in another sign of a struggling labor market, U.S. data show.

Source: MarketWatch.com - Top Stories | 13 Nov 2008 | 1:57 pm

Exelon: Hostile Takeover of NRG is Out of the Gate (EXC, NRG)

Exelon Corporation (NYSE:EXC) has officially kicked off its unsolicited takeover of NRG Energy (NYSE:NRG). We reported the details yesterday. Exelon needs to receive a majority of NRG's fully diluted shares outstanding (about 233 million total) by January 6, 2009, in order to clinch the deal.

As of yesterday's closing prices, Exelon's offer for NRG amounts to about $6 billion, a premium of 24%. There's no place else for NRG shareholders to look for that kind of return. Of course, those who bought NRG at its 52-week high of more than $45/share will still feels some serious pain.

Whatever the outcome is, this one is still in the unresolved and unfinished business categories.

Paul Ausick
November 13, 2008

Source: 24/7 Wall St. | 13 Nov 2008 | 1:55 pm

Wall St focus on jobs and earnings data

US stocks were set for a mixed start as investors digested a fresh glut of downbeat economic data and glum news from US companies, including a trimmed full-year profit forecast from Wal-Mart
Source: FT.com - US homepage | 13 Nov 2008 | 1:54 pm

Why GM can't survive bankruptcy

It worked for the airlines, but it might not work for General Motors. Saving the company through bankruptcy is probably not a viable option for the troubled automaker.

Source: Business and financial news - CNNMoney.com | 13 Nov 2008 | 1:52 pm

Repsol YPF: Are the Russians Coming? (REP)

Repsol YPF (NYSE:REP) is one of the ten largest integrated oil companies in the world. It is based in Madrid, and owns substantial assets in South America. Repsol reported third quarter earnings yesterday, but that's not the story.

Russia's vice premier told a news conference yesterday that Gazprom, Russia's natural gas monopoly, is considering buying a 20% stake in Repsol from Spanish construction company Sacyr Vallehermoso. Sacyr apparently needs cash and is likely to sell its piece of Repsol for about 5 billion euros, nearly 25% less than it paid just two years ago.

If Gazprom pulls the trigger on this deal it would be Russia's first foray into Spain. Russia supplies European Union countries with about 25% of their natural gas. Germany, Italy, and the UK already have allowed Gazprom to take ownership positions in gas distribution and other energy-related companies. If Gazprom does buy Sacyr's stake, it will become Repsol's largest shareholder.

As for Repsol's earnings, the company reported net earnings of 2.82 billion euros (about $3.5 billion), an increase of about 13% from the same period a year ago.

Paul Ausick
November 13, 2008

Source: 24/7 Wall St. | 13 Nov 2008 | 1:51 pm

Jobless Claims Cross 500K, Brace For Much Higher Unemployment

Unemply Weekly jobless claims came out this morning above the critical and psychological level of 500,000 filing for unemployment. This was a gain of 32,000 to 516,000, and to little surprise there was a slight upward revision to last week's weekly jobless claims to 484,000 from 481,000 previously reported. Today's jobless claims also marked the highest reading since September 2001.

The four week average also gained over 13,000 to 491,000, which is the highest since 1991 and way above levels indicating a mild recession. There is an obvious here, and that is that auto-related layoffs in Ohio and Michigan were the highest group.

We have been trying to prepare our readers for much worse numbers over the coming months and these numbers are actually only over the last 30 days getting anywhere close to our lower-end of what to expect. Unfortunately we still see more pain coming down the pipe, and the lack of temporary and part-time jobs going into the holidays is a treacherous and ominous signal of what lies ahead. That means that right after the holiday season, these employers who would have normally geared up will actually get to send many more workers to the minor leagues.

More pain is coming.

Jon C.Ogg
November 13, 2008

Source: 24/7 Wall St. | 13 Nov 2008 | 1:42 pm

Wal-Mart earnings up, but forecast cut

Wal-Mart Stores, the world's largest retailer, reported third-quarter profit Thursday that topped estimates but said a stronger dollar would squeeze its full-year profit.

Source: Business and financial news - CNNMoney.com | 13 Nov 2008 | 1:40 pm

iPhone-ish BlackBerry coming Nov. 21

It's official: Verizon Wireless will start selling RIM's) new touchscreen BlackBerry Storm on Nov. 21.

Source: Business and financial news - CNNMoney.com | 13 Nov 2008 | 1:39 pm

Bailout shifts to consumer loans

Treasury Secretary Henry Paulson said Wednesday that the government would broaden the reach of its $700 billion bailout plan to support non-bank financial institutions that provide consumer credit, such as credit cards and auto loans.

Source: Business and financial news - CNNMoney.com | 13 Nov 2008 | 1:38 pm

Before the Bell: Wal-Mart Stores, Intel, General Motors in the spotlight

U.S. stock futures wavered between gains and losses on Thursday, as Intel cut its sales forecast for the current quarter and Wal-Mart Stores reported a better-than-forecast quarterly profit but trimmed its earnings outlook for the year.

Source: MarketWatch.com - Top Stories | 13 Nov 2008 | 1:36 pm

Futures Movers: Oil futures edge higher ahead of supply data

Crude-oil futures manage minor early gains as traders stake out positions ahead of the latest weekly data on U.S. petroleum supplies.

Source: MarketWatch.com - Top Stories | 13 Nov 2008 | 1:34 pm

Wal-Mart's profits beat forecast

The largest US retail chain, Wal-Mart, sees third-quarter profits rise 10%, but says customers are under pressure.
Source: BBC News | Business | World Edition | 13 Nov 2008 | 1:33 pm

BlackRock CEO says sees some healing in credit markets: report

(Reuters) - BlackRock Inc CEO Fink said on Thursday "we are starting to see some healing in the credit markets," in an interview on CNBC. Highlights:
Source: Infocious RSS raw feed - channel BNewsBusiness | 13 Nov 2008 | 1:31 pm

Cost of borrowing rebounds slightly

Lending rates rose modestly Thursday, after falling sharply in recent weeks, as banks remain nervous about extending credit.

Source: Business and financial news - CNNMoney.com | 13 Nov 2008 | 1:27 pm

Conoco shuts a sulfur train at Borger, reducing rates

NEW YORK, Nov 13 (Reuters) - ConocoPhillips said it shut down a sulfur
Source: Infocious RSS raw feed - channel BNewsBusiness | 13 Nov 2008 | 1:19 pm

Sina.com quarterly profit up 28 percent

Sina.com Corp., a popular Chinese Web portal, said Thursday its quarterly profit rose 28 percent on strong advertising revenue and coverage of the Beijing Olympics despite slowing Chinese...
Source: Infocious RSS raw feed - channel BNewsBusiness | 13 Nov 2008 | 1:17 pm

Oil falls to $55

Read full story for latest details.

Source: Business and financial news - CNNMoney.com | 13 Nov 2008 | 1:17 pm

Poland's PGNiG energy company posts lower profits

Poland's state-owned gas and oil company, PGNiG, said Thursday that its third-quarter profit declined sharply, largely because of the rising cost of gas it imports from Russia. PGNiG, or
Source: Infocious RSS raw feed - channel BNewsBusiness | 13 Nov 2008 | 1:14 pm

Stocks head to mixed open after Wal-Mart forecast

Wall Street headed for a mixed open Thursday, with investors worried about a deep economic slump after Wal-Mart Stores Inc. trimmed its full-year earnings guidance. The nation's largest...
Source: Infocious RSS raw feed - channel BNewsBusiness | 13 Nov 2008 | 1:12 pm

Asia Markets: Chill hits Asia; oil, banks, techs downbeat

Asian stocks fall sharply, with commodity-related shares, the tech sector and financials all taking part in the regional pullback. Grim data on industrial output reported by China serve as the culprit.

Source: MarketWatch.com - Top Stories | 13 Nov 2008 | 1:12 pm

Movers & Shakers: Thursday's biggest gaining and declining stocks

Retailing will be a key focus of investor attention on Thursday, with earnings reports and other news from chains including Wal-Mart, Urban Outfitters, Charlotte Russe, Sears and others. Other companies whose shares are expected to see active trade in Thursday’s session are Applied Materials, Citi, Crocs, GM, Intel and Vineyard National.

Source: MarketWatch.com - Top Stories | 13 Nov 2008 | 1:11 pm

Wall Street heads to a mixed open

LSE halts share buy-back, shares plummet

LONDON (Reuters) - London Stock Exchange Group
Source: Infocious RSS raw feed - channel BNewsBusiness | 13 Nov 2008 | 1:01 pm

Swedish banking plan may need rethink -c.bank head

STOCKHOLM (Reuters) - Swedish Central Bank Governor Stefan
Source: Infocious RSS raw feed - channel BNewsBusiness | 13 Nov 2008 | 1:01 pm

Egypt's CIB profit below forecast on investment income

, Egypt's largest publicly traded lender,
Source: Infocious RSS raw feed - channel BNewsBusiness | 13 Nov 2008 | 1:01 pm

Mizuho posts Q2 loss, to raise up to $3.1 bln

* Will raise up to $3.1 billion via preferred securities
Source: Infocious RSS raw feed - channel BNewsBusiness | 13 Nov 2008 | 1:01 pm

Russian banker's killers jailed

A former private bank boss and six others are jailed for murdering Russian central banker Andrei Kozlov in 2006.
Source: BBC News | Business | World Edition | 13 Nov 2008 | 12:47 pm

Top 10 Pre-Market Analyst Upgrades & Downgrades (MO, STZ, LVS, LYV, RF, AXP, CMS, DELL, SOLR, TIBX)

These are the top ten early bird upgrades and downgrades we have seen this Thursday morning with about two hours until the open:

Altria (MO) Raised to Neutral from Sell at Banc of America.
Constellation Brands (STZ) Raised to Buy at UBS.
Las Vegas Sands (LVS) Raised to Neutral from Sell at Banc of America.
Live Nation (LYV) Raised to Strong Buy at S&P Equity Research.
Regions Financial (RF) Raised to Buy at Ladenburg Thalman.
American Express (AXP) Started as Underperform at Jefferies.
Comerica (CMA) Cutto Hold at Deutsche Bank.
Dell (DELL) added to Goldman Sachs Conviction Sell List.
GT Solar (SOLR) Cut to Underperform at Jefferies.
TIBCO Software (TIBX) Cut to Underperform at Jefferies.

Jon C. Ogg
November 13, 2008

Source: 24/7 Wall St. | 13 Nov 2008 | 12:40 pm

Pound's fall continues to $1.48

Sterling's losses mount as the currency hits its lowest rate in six years against the dollar on fears of a deep recession.
Source: BBC News | Business | World Edition | 13 Nov 2008 | 12:23 pm

German economy now in recession

Europe's largest economy enters recession as falls in exports and slowing demand for goods take their toll.
Source: BBC News | Business | World Edition | 13 Nov 2008 | 12:18 pm

Siemens upbeat despite downturn

German industrial conglomerate Siemens AG posts a 46% increase in annual net profits despite the economic gloom.
Source: BBC News | Business | World Edition | 13 Nov 2008 | 12:16 pm

BT to shed 10,000 jobs by March

Telecom giant BT says it expects to have cut 10,000 jobs by the end of March, in the latest gloomy news on the economy.
Source: BBC News | Business | World Edition | 13 Nov 2008 | 11:54 am

Triple whammy

The bleak future facing Detroit's big three carmakers
Source: BBC News | Business | World Edition | 13 Nov 2008 | 11:36 am

Recession's Grim Reaper Can't Catch Wal-Mart (WMT)

The home of "everyday low prices" took a bit of a hit today when it put out its earnings. It can not longer be called "recession proof", but it is still damn close.

Wal-Mart (WMT) made a very modest adjustment to its guidance. The world's largest retailer said "For the full year, ending January 31, we have tightened and modestly reduced our guidance and now forecast diluted earnings per share from continuing operations to be within a range of $3.42 to $3.46." Wall St. expected that number to be $3.49. Not much of a miss. Not in this economic environment.

What won't end up in the headlines is how well Wal-Mart did in the last quarter. Net sales for the third quarter of fiscal year 2009 were $97.6 billion, an increase of 7.5% from $90.8 billion in the third quarter last year. The is an astonishingly good number for such a large company to post in an economic downturn.

Income from continuing operations for the third quarter was $3.033 billion, an increase of 6.6% from $2.846 billion in the third quarter last year. Diluted earnings per share from continuing operations for the third quarter of fiscal year 2009 increased to $0.77 from the previous year's third quarter result of $0.70 per share.

A look at numbers from large retailers including Best Buy (BBY), Gap (GPS) Macy's (M) who hit a wall last quarter show just how good the Wal-Mart number are. While WMT international revenue did well, up 11.2% to $61.1 billion, it was the US which posted the more surprising numbers with an over 6% improvement at Wal-Mart and a nearly 8% improvement at Sam's Club.

Because Wal-Mart is huge, its exposure to the economy should be as well. That it can market itself as the only reasonable place to shop in a recession and get consumers to buy into that is amazing.

Douglas A. McIntyre

Source: 24/7 Wall St. | 13 Nov 2008 | 11:36 am

GM (GM): People Will Not Buy Cars From A Bankrupt Company

There is a perception among investors and government officials that GM (GM) CEO Rick Wagoner will say anything to save his job. He has argued hard and often that people will not buy cars from a company in Chapter 11. And, he is probably right.

Bankruptcy is a better deal for fixing car companies than a government loan, at least on paper. It would allow a court to void union contracts, pension payments, and debt obligations.

What bankruptcy does not do is ease the consumer's mind.

The government could set up a "warranty guarantee" pool so that car buyers would see that the US was backing the warranties that come with every GM car. If the firm eventually did have to fold, at least a customer could get his car fixed at no cost. That leaves out the fact that dealerships would also fold and there would be nowhere to go to get the warranty honored

The average citizen does not even know what the FDIC is. Almost everyone has a bank account, but how it is guaranteed and at what level is a mystery to checking account holders. Telling that same population that some wizard behind a curtain will make sure that their cars will be repaired is beyond the comprehension of most people.

Because car buyers have a number of alternatives, they will buy from the healthy car companies like Toyota (TM). It makes better cars and people know that its warranties are solid.

What the warranty problem means is that if GM does go into a Chapter 11, its divisions will have to be sold to healthy car companies immediately to keep buyer confidence in the products and their repairs.

It makes not matter if GM can cut its costs 30% in a receivership if it loses another 40% of its sales.

Douglas A. McIntyre

Source: 24/7 Wall St. | 13 Nov 2008 | 11:20 am

OECD says little chance of recovery next year

Rich countries are sliding into recession and output will contract next year, the Organisation for Economic Cooperation and Development predicted, becoming the latest international organisation to acknowledge the global downturn has spread from the financial sector to the real economy
Source: FT.com - US homepage | 13 Nov 2008 | 11:19 am

Foreclosures May Be Unstoppable

Every problem is supposed to have a solution, no matter how difficult.

The rising number of foreclosures and the falling prices of homes should be arrested by plans from the government and large banks to reset and renegotiate home loans for people who are at risk for being thrown out. So far, nothing else has worked.

At the same time institutions are trying to help the housing market, foreclosures are rising.

According to Reuters, "U.S. foreclosure activity in October rose 25 percent from a year earlier." That means the market is still in free fall and building a foundation under it may become more difficult. The number of unoccupied homes is up which will keep prices down. Even with improved lending terms, people who have income problems will abandon houses that they do not believe will ever be worth more than the loans they have against them.

Attacking the housing problem from the direction of mortgage relief may prove to be ineffective. The underlying cause of defaults and delinquencies is often unemployment or fear of unemployment, both of which are growing. Economists at Wachovia recently said joblessness will hit 9% next year. Some analysts believe that the figure is optimistic.

When one out of every ten Americans who can work is out of work, the man next door and the man next door to him will wonder if they are next. That makes for one person who has no job and two more who think they will be next. Those people are not candidates for mortgage improvements. Panic is too close at hand.

The government does not have the capital and probably does not have the inclination to put a safety net under the job market. But, while the number of people out of work grows, so will foreclosures.

Douglas A. McIntyre

Source: 24/7 Wall St. | 13 Nov 2008 | 11:02 am

BT to shed 10,000 jobs as profits slide

BT added to the UK's growing jobless tally on Thursday after confirming it would reduce its headcount by 10,000 as it reported a fall in second-quarter profits.Ian Livingston, the telecoms group's new...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 13 Nov 2008 | 11:01 am

Bank of Ireland scraps dividend as profits fall

Bank of Ireland (BoI) has scrapped its dividend after pre-tax profits fell by more than a third during the first six months of the lender's financial year.
Source: Latest Business News from Times Online | 13 Nov 2008 | 10:52 am

McDonald's (MCD) Argues That Some Companies Are Recession-Proof

There is no economic slowdown under the golden arches. Where else can someone buy a large meal of heart-healthy food for under $2, and only $1 for the kids.

McDonald's has begun to make the case to investors that it is in a business which will be unscathed by a recession. It is not alone in that, but it is a member of an increasingly elite club.

According to Reuters, Jim Skinner, the head of the fast food company said, "Worldwide turbulence is barely affecting our business." His company now has the advantage of falling commodities prices, a brand which has established itself over many decades, and a product which costs very little.

Skinner has something to show for his argument. McDonald's stock is off about 8% since the beginning of the year. The Dow is off 35%.

Two other companies which have done well in the stock market recently are P&G (PG) and Wal-Mart (WMT). The same general theory of strong branding and inexpensive products applies to them. As people feel more poor and lose their credit, they gravitate to what they can afford. Wal-Mart is the definition of cheap. Procter & Gamble sells soap and razors.

The number of companies who can claim they will not bleed their way through a recession shrinks daily. Yesterday, Intel (INTC) fell by the wayside. Exxon (XOM) has lost that distinction because a slow economy is pushing down oil prices. Even GE (GE) has been knocked out of the running.

Hamburgers are inexpensive, they taste good, and go well with beer. They are the perfect antidote to the blues.

Douglas A. McIntyre

Source: 24/7 Wall St. | 13 Nov 2008 | 10:48 am

LSE ends buy-back programme

The London Stock Exchange on Thursday said it was ending its 500m share buy-back programme to maintain a strong financial position and pursue possible investment opportunities.The exchange sounded a downbeat...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 13 Nov 2008 | 10:28 am

LSE shares dive after cancelling buyback

Shares in the London Stock Exchange (LSE) Group fell nearly 12 per cent in early trading as the company halted its £500 million share buy-back programme, admitting that it had only bought back shares worth £51 million in the last year.
Source: Latest Business News from Times Online | 13 Nov 2008 | 10:26 am

Germany in recession as US scraps toxic asset buy-up (AFP)

AFP - Germany, Europe's biggest economy, entered recession Thursday amid more heavy falls on stock markets after the US scrapped plans to buy up toxic mortgage assets at the heart of the financial crisis.

Source: Yahoo! News: Business | 13 Nov 2008 | 10:14 am

Oil falls to $50 amid slowing global demand$

Oil prices plunged to $50 a barrel today on gathering concerns the global economic slowdown and the perilous state of the US car industry are driving down demand for crude.$
Source: Latest Business News from Times Online | 13 Nov 2008 | 10:04 am

Asia plunges as Yen soars on US bailout fears

A massive surge in the yen exchange rate with the US dollar triggered a wave of selling on the Tokyo stock exchange, hitting blue chip exporters and sending the benchmark Nikkei index down to a two-week low.
Source: Latest Business News from Times Online | 13 Nov 2008 | 9:44 am

IEA cuts oil demand forecasts

Energy watchdog highlights the deepening impact of the global economic downturn on the demand of gasoline, especially in the US and other developed countries
Source: FT.com - US homepage | 13 Nov 2008 | 9:21 am

Germany slides into recession

Germany has officially plunged into recession after a steeper-than-expected fall in economic activity in the third quarter, dragging down the overall performance of the 15-country eurozone
Source: FT.com - US homepage | 13 Nov 2008 | 8:23 am

Jury awards real estate investor $4 million for his role in creating 'Flip This House'

Richard C. Davis had sued A & E Networks, claiming that executives at the cable channel reneged on their promise to pay him half the revenue produced by the program. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 13 Nov 2008 | 8:00 am

Paulson cancels key part of financial bailout

Funds from the $700-billion program will not be used to buy troubled mortgage securities, but efforts to revive the credit markets will continue.

The Bush administration dropped the centerpiece of its $700-billion financial rescue plan Wednesday, reflecting the remarkable extent to which senior government officials have been flying by the seat of their pants in dealing with the deepening economic crisis.

Source: L.A. Times - Business | 13 Nov 2008 | 8:00 am

Paulson's toxic-loan plan never got started

The Treasury chief's decision formalizes October policy shift on massive bailout fund. Some observers worry about inconsistent signals.

Treasury Secretary Henry M. Paulson's decision to abandon plans to buy troubled bank assets shows that he has come to two conclusions about what was once the chief focus of the government's $700-billion bailout:

Source: L.A. Times - Business | 13 Nov 2008 | 8:00 am

Intel slashes fourth-quarter sales forecast

The chip company cuts its fourth-quarter forecast by $1 billion as PC makers' troubles spread to parts firms. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 13 Nov 2008 | 8:00 am

YouTube plans to sell search-based ads a la Google

YouTube unveils an auction-based advertising system, similar to the one Google pioneered, that promotes sponsored video clips alongside regular search-engine results.

Chad Hurley, co-founder of YouTube Inc., says he always gets the same question: "When are you guys going to make money?"

Source: L.A. Times - Business | 13 Nov 2008 | 8:00 am

Consumers warned about offers to sell tickets to Obama inauguration

Swearing-in ceremony tickets, which are supposed to be free, haven't even been issued, and there's evidence that scam artists may be trying to sell fakes. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 13 Nov 2008 | 8:00 am

Hybrid tugboat may give local ports a green push

The ports of Los Angeles and Long Beach, the largest cargo container ports in the nation, invest in cleaner-air efforts.

For all of its 21st-century advancements, the shipping industry drags a lot of old technology around.

Source: L.A. Times - Business | 13 Nov 2008 | 8:00 am

Three LCD screen firms make plea deal for price-fixing scheme

Three Asian electronics firms have agreed to plead guilty and pay $585 million in fines for conspiring to drive up the prices of LCD screens used in computers, TVs, cellphones and other electronic devices...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 13 Nov 2008 | 8:00 am

Internet providers cut off host of spam e-mail

Computer security experts estimate that McColo Co. of San Jose was responsible for 75% of the junk e-mail sent in the U.S. each day. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 13 Nov 2008 | 8:00 am

Hybrid tugboat may give local ports a green push

L.A.-Long Beach complex is investing in cleaner-air efforts For all of its 21st-century advancements, the shipping...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 13 Nov 2008 | 8:00 am

Consumers warned about offers to sell tickets to Obama inauguration

Swearing-in ceremony tickets, which are supposed to be free, haven't even been issued, and there's evidence that scam artists may be trying to sell fakes.

For auction on EBay: a pair of tickets to the Barack Obama inauguration!

Source: L.A. Times - Business | 13 Nov 2008 | 8:00 am

CalPERS' housing portfolio loses 35% in a year

The country's largest public pension fund suffers a paper loss of $3.3 billion for the year ended June 30. An analysis says the loss was amplified by loans taken to ramp up the investments.

The value of residential real estate investments owned by the country's largest public pension fund has plummeted 35% -- a paper loss of $3.3 billion for current workers, retirees and their state and local government employers.

Source: L.A. Times - Business | 13 Nov 2008 | 8:00 am

Internet providers cut off host of spam e-mail

Computer security experts estimate that McColo Co. of San Jose was responsible for 75% of the junk e-mail sent in the U.S. each day.

The volume of junk e-mail sent worldwide may have dropped drastically Wednesday after a San Jose Web-hosting firm, identified by many in the computer security community as a major host of organizations engaged in spam activity, was taken offline.

Source: L.A. Times - Business | 13 Nov 2008 | 8:00 am

Best Buy cuts fiscal 2009 profit outlook

The nation's largest consumer electronics chain says it's being hammered by the worst retail environment in its 42-year history. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 13 Nov 2008 | 8:00 am

Paulson's toxic-loan plan never got started

The Treasury chief's decision formalizes October policy shift on massive bailout fund. Some observers worry about inconsistent signals. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 13 Nov 2008 | 8:00 am

BT to slash 10,000 jobs after profits plunge

BT today revealed plans to cut 10,000 jobs by the end of the year after pre-tax profits slumped by 11 per cent in the first six months of the year.
Source: Latest Business News from Times Online | 13 Nov 2008 | 7:51 am

Top hedge fund managers face lawmakers

BOSTON (Reuters) - Five of the world's richest and most powerful hedge fund managers will face a U.S. Congressional panel on Thursday that wants to know if the secretive industry poses risks to the financial system.

Source: Reuters: Business News | 13 Nov 2008 | 7:38 am

Aussie dollar still low

SYDNEY - The Australian dollar dropped for the second consecutive day to close at a two-week low, as fears of a global recession pushed the domestic share market to its weakest close in four years. The local currency moved...
Source: New Zealand Herald - Business | 13 Nov 2008 | 7:35 am

Aust market falls nearly 6pc

SYDNEY - The Australian share market fell almost six per cent to its weakest close in a little over four years following heavy falls on Wall Street overnight after the US government announced it would not buy banks' soured mortgage...
Source: New Zealand Herald - Business | 13 Nov 2008 | 7:23 am

Sharemarket continues to fall

The New Zealand sharemarket closed lower today keeping faith with woeful performances by equity markets around the world. After the Dow Jones industrial average closed down 411.30 points, or 4.73 per cent, at 8282.66 on Wednesday,...
Source: New Zealand Herald - Business | 13 Nov 2008 | 6:18 am

Citigroup in talks to buy Chevy Chase Bank: report (Reuters)

Reuters - Citigroup Inc is in talks to buy U.S. regional lender Chevy Chase Bank FSB (CCX_pc.N), which operates in the mid-Atlantic region, the Wall Street Journal said.

Source: Yahoo! News: Business | 13 Nov 2008 | 6:02 am

Citigroup in talks to buy Chevy Chase Bank: report

(Reuters) - Citigroup Inc is in talks to buy U.S. regional lender Chevy Chase Bank FSB, which operates in the mid-Atlantic region, the Wall Street Journal said.

Source: Reuters: Business News | 13 Nov 2008 | 6:02 am

Kiwi dollar recovering after plunge

The New Zealand dollar plunged to two-week lows against major currencies but made some modest gains from there. During the early morning hours, the kiwi plunged from above US57.80c to around US55.50c, its lowest level in two weeks. It...
Source: New Zealand Herald - Business | 13 Nov 2008 | 5:25 am

Tribulations at Tribune

When real estate mogul Sam Zell closed his purchase of Tribune Co. in 2007, he brushed aside dire prognoses about the newspaper business and promised to arrest its decline with a "fresh, entrepreneurial culture that is fast and nimble, and which rewards innovation.''

To that end, he hired a pioneering radio programmer, Lee Abrams, as his "chief innovation officer" and unleashed him to create "a sustainable, relevant product for our customers and communities."

In a series of stream-of-consciousness memos and meetings, Abrams triggered jazzy redesigns of Tribune's eight newspapers, placing a counterintuitive bet on luring younger audiences and occasional readers to print.

Five months ago, Tribune unveiled the first project, a top-to-bottom redesign of the Orlando Sentinel in Florida. Heavy on charticles and bullet points, the new-look Sentinel reminded one veteran industry analyst of a print version of AM radio.

So far, Abrams' ballyhooed efforts to rethink the American newspaper—employing more radical versions of the big headlines, small articles, and colorful charts rolled out at other newspapers over the last three decades—have had no impact on declining circulation.

And analysts are skeptical about whether Tribune's focus on redesigning print makes good business sense as advertising, the main income generator for newspapers, continues to soften. On Monday, the company reported a 19 percent drop in advertising revenues and a 2 percent drop in circulation revenues for the third quarter compared with last year.

"Strategically, it's a distraction," Ken Doctor, a news industry analyst for Outsell and Content Bridges, says of the redesign effort. "The major challenge to a company like Tribune is not to try to incrementally either stop circulation declines or add a point or two, but to really remake itself into a multimedia modern company."

The Tribune redesign process "wasn't really market-driven" but rather "simply done by the seat of the pants because it was felt that something had to be done," says Alan Mutter, a new-media consultant who writes the Reflections of a Newsosaur blog. "That's a fairly dangerous way to run a multimillion-dollar business."

The risk, Mutter says, is that changes could "upset and potentially anger existing customers without attracting any new ones."

Tribune spokesman Gary Weitman says the company is "focused on executing, we're not focused on committees and 12 different pieces of focus-oriented, consultant-driven types of research." But he says that the redesigns were accomplished "in a very thoughtful way" and "first and foremost with readers in mind."

The man behind the redesigns, Abrams, is an affable Chicago native who made his name in radio. In the 1970s, using what he calls "a balance of science and emotion," he invented the album-oriented rock format that made FM radio commercially successful.

In his recent history of radio broadcasting, Something in the Air: Radio, Rock, and the Revolution that Shaped a Generation (Random House, 2007), Marc Fisher said Abrams' ability to intuit popular taste in music made him the radio industry's "most sought-after guru."

After cloning FM radio stations around the country, Abrams moved to XM Satellite Radio, the still-unprofitable broadcaster where he programmed dozens of channels.

In his latest incarnation as newspaper savior, Abrams, 55, says his aim is to convert occasional and Sunday readers into regulars. While each makeover is distinct, Abrams' tastes have been influential.

Under Abrams' prodding, Tribune papers generally have opted for smaller page sizes, larger photographs, fewer front-page stories, and more clearly compartmentalized content. The Baltimore Sun—the name is new, changed from the Sun—now has a dedicated Crime & Courts page, as do most of the other seven redesigned Tribune papers, in Los Angeles, Chicago, Hartford, Connecticut, and elsewhere.

The Web's influence on the redesigns is obvious. But Abrams says he also admires foreign newspapers like the Guardian, a London-based daily he calls "intelligent but unconventional," as well as Mexico City's "visually stunning" Excélsior, the Wall Street Journal ("because of how well-defined they are"), and USA Today ("very easy to read").

The back-to-the-future Tribune approach also draws on what Abrams defines as the Golden Age of newspapers, from the 1920s to 1960s.

In recent years, "many newspapers have been on autopilot," Abrams says. "I thought we really had to work on reclaiming things that newspapers had traditionally owned," from investigative reporting to election and crime coverage.

Even as he extols such labor-intensive endeavors, though, Tribune has continued reducing its payroll—shedding 75 newsroom jobs in the most recent cutbacks at the Los Angeles Times and leaving the editorial staff about half its size in 2001. It also announced the consolidation of all Tribune-owned newspapers' Washington bureaus into one super-bureau, with significant reductions in reporters and editors.

In a recent column in the trade magazine Editor & Publisher, Steve Outing argued that print redesigns should be aimed at retaining core, older readers, while also directing them to newspaper websites. He noted that the thinning of newspaper content has turned off many devoted newspaper readers without attracting new ones.

Charlotte Hall, editor of the Orlando Sentinel since 2004, says the Sentinel redesign is geared primarily at "people in their 30s and people in their 40s," whom she calls "key demographics for us in the future."

Launched in late June, the redesigned paper tries "to be more personal and more emotional," says Hall. "That means a hotter look overall, it means bolder headlines, playing your columnists up big, encouraging your writers to write in different ways, making news more accessible."

Veteran newspaper analyst John Morton says that Tribune is "trying to make the front pages of newspapers look like commercial radio"—in other words, "flashy, edgy, abrupt." It is possible, he says, that the designs will help attract "young people" with "short attention spans."

But there is as yet no evidence that this is happening. Weitman says the Sentinel has several hundred fewer subscribers now than it did before its redesign. Another Tribune newspaper, the Fort Lauderdale-based Sun Sentinel, has lost even more subscribers since its makeover in August.

"We can't find any impact from the redesign," says Norbert Ortiz, the Sentinel's vice president for circulation and consumer marketing. He adds that it could take six to nine months to gauge the redesign's effects.

In Chicago, where "your new Tribune" was introduced September 29, the Tribune's new editor, Gerould Kern, says he sees "opportunities with people in their 30s and 40s" as the newspaper becomes more "locally relevant" and "personally useful."

"We wanted people to care about the paper...because they found compelling storytelling, found themselves reflected in it, and saw stories about subjects they cared about," Kern says. The Tribune now devotes pages 2 and 3 to "The Talk," which touches on topics—such as the Tina Fey-Sarah Palin skits on Saturday Night Live—designed to reflect or spur water-cooler conversation.

Kern says that anecdotal evidence suggests that "younger readers almost universally liked the new approach." About 0.2 percent of subscribers canceled in the wake of the redesign, less than normal circulation churn, he says.

Doctor, a former managing editor of the St. Paul Pioneer Press in Minnesota, says that the Tribune redesigns— "bolder, more colorful, more sidebars, more useful, fewer jumps"—represent "really good newspaper print ideas of the 1980s." In the digital age, he says, "they're not going to drive a lot of new readership."

But Alan Jacobson of Brass Tacks Design, another critic of the Tribune effort, argues that done right, redesign can boost both circulation and advertising revenue—and that results are usually quick. He cites his own successes at smaller papers in Cheyenne, Wyoming; Waterford, Connecticut; and Duluth, Minnesota.

The redesigned Tribune papers are "prettier" than before, Jacobson says. But the design prototypes suggest no significant changes in content, he says. "I wouldn't call it redesign. I would call it redecoration," he says.

The redesign process has sparked a cycle of emotions within Tribune newsrooms, Abrams says, from fear to acceptance to excitement. (Abrams' own "think piece" memos, with their misspelled words and seeming naiveté about such matters as foreign correspondents, may have increased the anxiety.)

Journalists worry—unduly, Abrams says—that "any kind of change means you're going to dumb it down, or any graphics means you're going to emulate USA Today, or any significant change is instantly going to upset 50 percent of readers."

In fact, Weitman says, the readership response has been relatively muted. And some analysts say that at this point any experimentation in newsrooms is welcome.

"People's perceptions of how news is presented have changed because of the Web," says Mark Potts, an internet and media consultant who now blogs at RecoveringJournalist.com. "Doing things with smaller bytes and bigger headlines and more entry points and a little more clarity is a good thing. It's making it easier for a generation that's now Web-savvy to relate to what's going on in print."

While change is not always guaranteed to work, "staying the same hurts," Potts says. "We know that."Related Links
Tribune's Lee Abrams: 'Some People Didn't Get It, and They're Gone'
The Worst Investment in America
The Takeaway: The Last Days of Newspapers

Source: Portfolio.com: Top 5 | 13 Nov 2008 | 5:00 am

How T. Rowe Price Undercuts Its Own Pitch (Ticked Off)

Its online calculator shows drawbacks to pet target-date funds.

Source: SmartMoney.com | 13 Nov 2008 | 5:00 am

The Threat to a Lender of Last Resort (Ticked Off)

Republic Bancorp's growth is fueled by lending that some call predatory.

Source: SmartMoney.com | 13 Nov 2008 | 5:00 am

Treasury figures paint ugly picture for Nats

Treasury has painted a very ugly economic picture for the incoming National government with cash deficits increasing, growth shrinking, tax revenue diminishing and unemployment rising. Prime minister designate John Key was briefed...
Source: New Zealand Herald - Business | 13 Nov 2008 | 3:48 am

Receivers called into St Kilda Finance

Small Dunedin-based finance company St Kilda Finance has gone into receivership in the face of deteriorating credit conditions. About $6.9 million in debenture deposits from 358 investors is involved. St Kilda was established...
Source: New Zealand Herald - Business | 13 Nov 2008 | 2:30 am

Fisher & Paykel reports loss, cuts dividend

Fisher & Paykel Appliances today reported a bottom line interim loss after taking into account the cost of moving manufacturing offshore. The company cut its interim dividend to 5 cents a share from 9 cents a share last year. The...
Source: New Zealand Herald - Business | 13 Nov 2008 | 1:25 am

Textile firm confirms Christchurch lay-offs

Lane Walker Rudkin (LWR) International has confirmed it plans to lay off 60 staff in Christchurch. The textile manufacturer has picked Otara, in south Auckland, rather than Sydenham as its preferred textile site, and will lay off...
Source: New Zealand Herald - Business | 13 Nov 2008 | 1:22 am

US drops plan to buy toxic assets

The US government abandoned its plan to buy toxic assets, feeding a gathering sense of gloom as investors fled from risk and US equity markets sank to levels approaching their October lows
Source: FT.com - US homepage | 13 Nov 2008 | 1:00 am

CanWest in job-cutting exercise

TORONTO - TV3's former owner CanWest said today it plans to cut 560 jobs, or five per cent of its work force, as the Canadian broadcaster and publisher reduces costs in the slowing economy. CanWest Global Communications, owner...
Source: New Zealand Herald - Business | 13 Nov 2008 | 1:00 am

Fonterra averts dairy strike with pay offer

The threatened strike by 4500 dairy workers is off after their union and Fonterra reached a proposed settlement today. The Dairy Workers Union today suspended its notice of industrial action ahead of ratification meetings, at which...
Source: New Zealand Herald - Business | 13 Nov 2008 | 12:50 am

Hedge funds pursue capital

Blackstone's GSO Capital Partners and GoldenTree Asset Management, two of the biggest hedge funds investing in debt, have turned to investors for more capital in the face of markdowns on their holdings and margin calls from their lenders
Source: FT.com - US homepage | 13 Nov 2008 | 12:29 am

China increases troops on North Korea border

US officials say the Peoples' Liberation Army has stationed more soldiers to prepare for any possible influx of refugees due to instability, or regime change, in Pyongyang
Source: FT.com - US homepage | 13 Nov 2008 | 12:25 am

After The Close - Wednesday

SINA (SINA), a Chinese Web portal, said Q3 EPS rose 37.5% to 44 cents, beating views by 3 cents. Sales fueled by Olympics-tied promotions jumped...

Source: Investor's Business Daily: BUSINESS | 13 Nov 2008 | 12:24 am

Trends & Innovations - Wednesday

Industries at risk from tech attacks

Source: Investor's Business Daily: BUSINESS | 13 Nov 2008 | 12:24 am

Business Briefs - Wednesday

Macy's beats, cuts spending plans. The nation's largest department-store operator swung to a Q3 loss of 8 cents a share ex items, beating views by...

Source: Investor's Business Daily: BUSINESS | 13 Nov 2008 | 12:24 am

In Brief - Wednesday

Senior UBS (UBS) exec Raoul Weil was indicted on federal charges alleging he helped U.S. clients hide assets overseas from the IRS.

Source: Investor's Business Daily: BUSINESS | 13 Nov 2008 | 12:24 am

Multiple Sclerosis Drugs Drive Growth For Old-Guard Biomed Firm

Biogen Idec, whose roots reach back to the 1970s as one of the first biotechs, recently reached a major milestone. For the first time, the...

Source: Investor's Business Daily: BUSINESS | 13 Nov 2008 | 12:24 am

Intel shocks Wall Street with revenue warning

Intel shocked Wall Street with a revenue and margins warning that indicated a rapid decline in the business of the world's largest chipmaker over the past month
Source: FT.com - US homepage | 13 Nov 2008 | 12:06 am

Financial groups' losses near $1,000bn

The financial sector's total losses from the credit crisis are close to $1,000bn after recent turmoil in the markets triggered a further drop in the value of mortgage-backed securities and other debt securities
Source: FT.com - US homepage | 12 Nov 2008 | 11:31 pm

US regulators crack the whip on banks

US financial regulators threatened action against banks that paid high dividends and warned them not to dole out large bonuses, in a stark reminder to Wall Street that government aid should be used to help the economy
Source: FT.com - US homepage | 12 Nov 2008 | 10:24 pm

Bodie Recommends TIPS to Lower Retirement Planning Risk

Source: Bloomberg - All Podcasts | 12 Nov 2008 | 10:13 pm

Meditron's Gerasimowicz Sees `Wonderful Values' in ETFs

Source: Bloomberg - All Podcasts | 12 Nov 2008 | 10:06 pm

LCD Makers Settle Massive Price-Fixing Case

The holiday shopping season outlook had been something less than jolly this week — Circuit City filed for bankruptcy and Best Buy slashed its profit forecast — maybe there's a small parting of the clouds: Three major companies have been charged with fixing prices on LCD panels sold.

LG, Sharp, and Chunghwa have pleaded guilty to price-fixing charges brought by the Justice Department, and agreed to pay a total of $585 million. LCD panels, which grace everything from iPods to sports-bar TVs, are about a $70 billion industry.

"These price-fixing conspiracies affected millions of American consumers who use computers, cell phones and numerous other household electronics every day," said Thomas Barnett, assistant attorney general in charge of the Antitrust Division.

LG and Chunghwa were charged with working together to set prices sold worldwide from September 2001 to June 2006. LG has agreed to pay $400 million, the second-highest criminal fine in Antitrust Division's history. Chunghwa will pay $65 million.

Swiss pharmaceuticals company Hoffman-La Roche paid the biggest U.S. antitrust fine ever, $500 million, in 1999, to settle charges that it had cornered the world market for vitamins A, B2, B5, C, E, and beta carotene for most of the 1990s.

Sharp, based in Japan, will pay $120 million and is accused of fixing prices on LCD panels sold to Dell from April 2001 to December 2006, to Motorola for the Razr from the end of 2005 to the middle of 2006, and to Apple for iPods from September 2005 to December 2006.

LG's reported 2007 revenue was $15.3 billion. Sharp's revenue for its most recent fiscal year, ending March 31, was $34.2 billion. Chunghwa reported $4.8 billion in revenue.

Would it be too much to hope for reduced prices in iPods and LCD televisions in time for Christmas shopping?

Source: Portfolio.com: Top 5 | 12 Nov 2008 | 10:00 pm

VIX Index of U.S. Stock Option Prices Advances 8.2% to 66.46

Source: Bloomberg - All Podcasts | 12 Nov 2008 | 9:48 pm

Tina Brown Says `Daily Beast' Gives `Open' Look at News

Source: Bloomberg - All Podcasts | 12 Nov 2008 | 8:58 pm

Albright Calls Iraq `Greatest Disaster' in U.S. Policy

Source: Bloomberg - All Podcasts | 12 Nov 2008 | 8:45 pm

S&P's Levy Sees `Dire' Situation for U.S. Auto Industry

Source: Bloomberg - All Podcasts | 12 Nov 2008 | 7:59 pm

Nomura's Resler Sees Worst Recession of Postwar Period

Source: Bloomberg - All Podcasts | 12 Nov 2008 | 7:44 pm

Hormats Says U.S. Needs `Very Substantial' Stimulus Plan

Source: Bloomberg - All Podcasts | 12 Nov 2008 | 7:25 pm

Credit Suisse's Orenbuch Sees U.S. Employment 'Deteriorating'

Source: Bloomberg - All Podcasts | 12 Nov 2008 | 7:22 pm

NASCAR change proves hard on tires

NASCAR has switched to a bigger, heavier car that was tough on tires, and Goodyear -- the exclusive tire supplier for the sport -- wasn't able to come up with a tire deemed safe and good on the track. Scott Graf reports.
Source: Marketplace | 12 Nov 2008 | 6:22 pm

Senator unveils health-care reform

Democratic Sen. Max Baucus has outlined a proposal that would not only guarantee, but mandate health-care coverage for all Americans. Is there enough money to do that? Steve Henn reports.
Source: Marketplace | 12 Nov 2008 | 6:22 pm

Commodities crash burns scrap dealers

The record high prices for copper and other metals that had thieves stealing statues and electrical wires are no more. Commodities prices have crashed, creating a big problem for scrap dealers. Jeff Tyler reports.
Source: Marketplace | 12 Nov 2008 | 6:22 pm

Frum: Don't bail out the automakers

There was a time, says commentator David Frum, when GM was one of the biggest employers in America, but that's no longer true. Besides, even with a bailout, more job cuts are coming.
Source: Marketplace | 12 Nov 2008 | 6:22 pm

Fuel prices thwart Pickens' wind farm

Earlier this year, T. Boone Pickens announced a grand plan to build the world's biggest wind farm and help wean the country off gasoline. Now that natural gas prices have tanked, he's putting the plan on hold. Sam Eaton reports.
Source: Marketplace | 12 Nov 2008 | 6:22 pm

The bailed out GM vs. the failed one

With the debate about bailing out GM reaching a fevered pitch, Ashley Milne-Tyte asks, what a GM rescue plan would look like and what would actually happen if the giant automaker failed.
Source: Marketplace | 12 Nov 2008 | 6:22 pm

What's happened to the bailout plan?

Why hasn't the government's plan to buy up toxic assets worked? Will recapitalizing the banks and providing mortgage relief ease the crisis? Kai Ryssdal puts those questions and more to financial analyst Karen Shaw Petrou.
Source: Marketplace | 12 Nov 2008 | 6:22 pm

Paulson calls for bailout change

The Treasury secretary says the government is backing away from buying toxic assets from banks -- the centerpiece of the rescue plan when Congress approved it. Washington Bureau Chief John Dimsdale reports.
Source: Marketplace | 12 Nov 2008 | 6:22 pm

The New New TARP

Good news, Hank Paulson. In just two more months, the Troubled Asset Relief Program is going to become someone else's problem.

The Treasury's $700 billion bailout package has officially been reborn again, with Paulson having scrapped the plan to buy troubled assets to focus instead on improving the market for consumer loans. (Sorry, Bill Gross.)

The way things are going, this will not likely be the TARP's last rebirth.

In remarks this morning, Treasury Secretary Paulson outlined three potential areas of focus for the remaining $350 billion of the package.

First, Paulson said his group is evaluating ways to extend capital to nonfinancial institutions by encouraging private capital through a matching system.

It is also considering ways to jump-start consumer lending by extending liquidity to investors interested in buying highly rated asset-backed securities, but the vague language didn't clarify how. "We are looking at ways to possibly use the TARP to encourage private investors to come back to this troubled market by providing them access to federal financing while protecting the taxpayers' investment," he said. "By doing so, we can lower costs and increase credit availability for consumers."

Of course, Paulson had originally hoped that Treasury's capital infusions into the banking sector would reignite lending, but many financial institutions have chosen to use that money for acquisitions or by improving their balance sheets.

Third, Treasury is weighing new strategies to stem foreclosures by working with other government agencies to modify loan terms.

Congress has released $350 billion of the $700 billion package it authorized, and the Treasury Department has spent all but $60 billion of it, mostly on capital infusions into banks. Paulson must get permission from Congress to access the remaining funds.

That request will most certainly generate debate on Capitol Hill, as lawmakers are now focused on how to help the ailing automakers. Democratic leaders are pressing to use the TARP funds to help them avoid bankruptcy.

Paulson hedged when asked about Detroit during his press conference, saying only that the U.S. auto industry needs a solution "that leads to viability."

Related Links
The Blurry Bailout
Uncle Sam the Shareholder
Worst of Times

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

JBC's Benigni Sees Short-Term Oil-Price Drop to $50 a Barrel

Source: Bloomberg - All Podcasts | 12 Nov 2008 | 4:30 pm

Statins, Heart Attack and Genes

Harvard Medical School researchers set hearts atwitter at the annual American Heart Association meeting in New Orleans last weekend when they announced a major study verifying the health benefits of taking cholesterol-lowering statins even for people with normal levels of cholesterol.

In the study, published in the New England Journal of Medicine, almost 18,000 men and women were given either a statin or a placebo and then followed for nearly two years in a study called Jupiter—Justification for the Use of Statins in Prevention: An International Trial Evaluating Rosuvastatin. (The trade name for rosuvastatin is Crestor, made under license in the U.S. by AstraZeneca.)

Impressively, the statin-popping group was 44 percent less likely to have a heart attack than the placebo group, and 21 percent less likely to die from heart disease. The test was so successful that an independent review board cut short the five-year trial after just two years.

Jupiter was headline news around the world, though there was a piece of the statin story that was missing.

This comes from a second major study published last August, also in the New England Journal of Medicine, that indicates about one in six of all Caucasians carry a genetic variation that could make taking statins risky by increasing the chances of cardiomyopathy. (Asians and Africans have a slightly less risk.)

A potentially dangerous inflammation of the heart muscle, cardiomyopathy is a well-known, but rare potential side effect of statins.

Juxtaposing these two studies provides a glimpse into the future of personalized medicine, when major public health pronouncements like Jupiter will be presented with modifications for subgroups of people according to their genetic profile.

In this case, the genetic study suggests that about 2 percent of those tested have a variation (designated by the genetic letters "CC") that carries a risk nearly 17 times that of people who have the normal variation—an extremely high risk factor for a genetic marker associated with a common disease.

A second variation (designated by "CT") gives a carrier a nearly five-fold higher risk than normal. I carry this CT gene mutation—which is much better than the CC, but is still a higher-than-normal risk.

Both the CC and the CT mutations occur in a gene called SLCO1B1, which helps regulate the uptake of statins and certain other drugs into the liver. People who carry mutations end up with higher-than-normal concentrations of statins in their blood, which can contribute to the onset of cardiomyopathy.

In previous columns, I have described a slew of tests I'm taking for a book called Experimental Man—including a wide range of genetic screens and more traditional tests measuring everything from cholesterol levels to CT scans of my heart and other organs.

The idea of the Experimental Man Project is to report on and assess the many high-tech tests that are about to revolutionize medicine, and to reveal previously hidden secrets about ourselves.

I've taken genetic tests that suggest I am mostly healthy, although I do have a higher-than-average risk profile for a future heart attack. (See my earlier column on this: "I'm Doomed. Or Not.")

I also have borderline high cholesterol and slightly elevated blood pressure—both at levels my physician said warrants attentiveness, but no medication. I have tried to lower my cholesterol through avoiding greasy burgers and exercise, with some success.

However, should I fail in my quest to eat and sweat my way to good health, my physician has told me that I could always take statins. But this was before the New England Journal study and my "CT" test result.

Worried that my fall-back plan might be a bust, I called a key researcher—Rory Collins, professor of medicine and epidemiology at Oxford—for both the Jupiter study and the August paper that revealed my genetic predisposition to cardiomyopathy if I take statins.

On the phone from the heart association in New Orleans, Collins first set me straight about the Jupiter study. The media reported that researchers had shown that people with low cholesterol saw huge benefits from taking statins.

"The news is missing the point," said Collins. "The researchers couldn't test the people they wanted to test, because you can't give people with very high cholesterol a placebo." He said that they set out to prove that lowering so-called "bad" cholesterol (L.D.L. cholesterol) using statins is desirable in everyone.

"But it is much more important to do this in people with high cholesterol, whose risk of heart disease is much greater than someone with low cholesterol."

I asked Collins what role the DNA marker in the SLCO1B1gene might play in deciding whether a person should take statins. He said the variation would not much matter if statins were given in low doses. "That's not a big problem," he said.

For higher doses, however, Collins said that testing for the genetic marker might be a good idea. Testing positive for the highest risk variation could impact the type of statin to be used, he said, and would require more monitoring for myopathy.

He reassured me that my risk factor did not mean I should avoid statins if I ever become a truly high risk for heart attack. "The danger of heart disease outweighs the danger or myopathy," he said.

Would he ever recommend against using a statin based on a person's genetic disposition?

"It depends on the patient's absolute risk," he said. "If they have a high risk of heart attack without the statins, then that needs to be balanced against the possibility of myopathy."

Critics have noted that AstraZeneca, the drug giant that sells Crestor, paid for Jupiter, though numerous independent experts have praised the study. Patients in the Jupiter group also contracted diabetes at a higher-than-average rate, though no one knows why.

The test subjects also tested higher than average for a biomarker called c-reactive protein (C.R.P.) that is present when inflammation is occurring in the body. Sometimes this inflammation is linked to heart disease. Statins lower C.R.P. as well as cholesterol, which have caused some observers to wonder if the wondrous outcomes in the Jupiter trial came from lowering cholesterol, or C.R.P., or both.

Still, scientists in the field are touting Jupiter as a major breakthrough.

What would make it even more impressive is if the scientific community would begin to link up this sort of large-scale study of health trends and treatments with the emerging field of genetic association studies.

In a few cases such as statins, a DNA test might offer a useful piece of information to add to the mix in deciding whether a patient should use a medication, and at what dose.

Currently, few physicians are trained to use genetic tests as part of a diagnosis or as a tool to tailor drugs and other treatments. The reason up until now is that few of these tests are ready to be useful to patients—though this will change as genetic tests are further validated by scientists and physicians.

For me, the knowledge that my liver doesn't properly snatch up statins I happen to swallow will make me try even harder to avoid taking them. And if I do end up taking these pills, I'll know to keep out for any hint that my heart muscle is unhappy.

For great descriptions and videos from Scripps cardiologist Eric Topol about both Jupiter and the genetic study, go to: http://blogs.theheart.org/topologyRelated Links
You 2.0: I'm Doomed. Or Not.
You 2.0: Closing the Genetic Gap
You 2.0: Recreational DNA and Genetic Voyeurism

Source: Portfolio.com: Top 5 | 12 Nov 2008 | 2:30 pm

The Drive to Save Detroit

In the 1970s, British governments, both Labor and Conservative, pumped billions of pounds into ailing auto companies. The aid accomplished nothing and just delayed the inevitable. None have survived as British companies.

Are we about to make the same mistake?

Democratic leaders in Congress are pressing to provide financial aid to troubled Detroit. That would involve either persuading Treasury to make some of the $700 billion in the TARP program available or passing legislation in the lame-duck session of Congress to provide the $25 billion that General Motors, Ford Motor, and Chrysler say is needed.

"It is essential for the domestic automobile-manufacturing industry to reemerge as a global, competitive leader in fuel efficiency and in new, pathbreaking, energy-efficient technologies that protect our environment," Nancy Pelosi, the House Speaker, said in a statement.

Shares of General Motors, which sank to a 65-year-low on Tuesday, are poised to jump in trading today on the reports of help from Washington.

General Motors has been burning cash at an alarming rate. It's clear that its collapse would have a seismic effect on the economy, leading to the loss of an estimated 3 million jobs. Detroit is not just the Big Three and its 240,000 workers, but a huge network of suppliers, marketers, and dealers that touch thousands and thousands of businesses across the country.

Washington now wants to apply an expensive Band-Aid to a hemorrhaging industry. Yet the fundamental problems of Detroit remain and will not be solved by another $25 billion, $50 billion, or more.

The industry's slide is a result of years of management errors that ceded ground to Japanese automakers and others and its high-cost structure. Many are pointing the finger at the United Automobile Workers, whose very success as a union perversely makes it, not management, the villain in this crisis. The U.A.W. may not have many supporters outside the Democratic party: It's difficult to make a strong case for it when the average G.M. worker makes a little more than $78 an hour, while his or her American counterpart at Toyota makes $48.

But even nonunion Toyota, or indeed any business in the United States, has to grapple with health-care and pension costs as their workforces age. That is the biggest weight on G.M.

Giving a badly needed overhaul of both health-care and the pension system can't be done in a lame-duck session, if ever, in Washington. So another drive-by bailout, then.

Source: Portfolio.com: Top 5 | 12 Nov 2008 | 2:00 pm

Worst. Buy. Ever.

For retailers, Christmas has been canceled.

The holiday shopping season has not even started yet, but its epitaph has already been written by Best Buy. The electronics retailer said that because of the weakness in consumer spending it was slashing its profit forecast for the year.

"Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen. Best Buy simply can't adjust fast enough to maintain our earnings momentum for this year," said Brad Anderson, vice chairman and chief executive officer of Best Buy.

Its warning came just two days after its rival, Circuit City, filed for Chapter 11 bankruptcy protection.

Best Buy now expects earnings through the end of February to come in at $2.30 to $2.90 per share, down sharply from a previous estimate of $3.25 to $3.40 a share. Sales at its stores open at least a year tumbled 7.6 percent in October, after a fall of 1.3 percent in September.

Many retailers across the spectrum have reported sharp declines in sales as consumers, worried about the worsening economy and their jobs, cut back. Only some discount chains—Wal-Mart Stores, in particular—have been able to weather the slump in spending.

Brian Dunn, president and chief operating officer of Best Buy said, "In 42 years of retailing, we've never seen such difficult times for the consumer."

Related Links
Short-Circuited City
The Way the Cookie Crumbles
Salvaging the Wreckage

Source: Portfolio.com: Top 5 | 12 Nov 2008 | 2:00 pm

Hidden Websites

A research-focused search engine founded by Human Genome Project scientists is claiming to go where even Google doesn't tread: the deep web.

DeepDyve is designed to search the 99 percent (they say, citing a study from UC Berkeley) of hits not picked up by other search engines, which return pages based largely on interpretations of popularity and work only if a page is findable. Content hidden behind paywalls or that is not linked to enough sites to gain page rank remains obscure, but often contains the source material required for serious research.

It's the classic "needle in a haystack" problem: you know it is there, you know you can get to it, but ... how? DeepDyve attempts to bridge this gap with techniques used in genomics to identify DNA strands like pattern and symbol matching.

The company's technology uses an algorithm called “KeyPhrases” which indexes passages up to 20 words in length -- not just single key words. Since the technology was conceptualized to identify long, complex strings of DNA, there was no need for semantics, just character recognition to sequence the human genome.

“It’s really doing pattern matching; it’s not at all language dependent,” CEO William Park told wired.com. “In fact it’s actually language agnostic.”

DeepDyve’s most interesting feature, what further distinguishes it from the likes of Google Scholar, is the ability to base a search on a large chunk of text or even a whole article up to 25,000 characters. Google only lets you search 32 words.

“If you were trying to look for the sequence for blue eyes, it could be massive in length,” said Park. “The query so to speak has to be very large.”

It will scan whole strings of text to find familiar segments, rank and order them, and finally locate the most relevant article in which it is found.

“It’s purely statistical -- just like genomics,” said Park.

A subscription-based service debuted at the DEMO conference a few months ago, but on Tuesday the company launched a free ad-supported version. And it's actively seeking out new publishers to open up their content to the public using its search.

“We’re going to publishers and we’re saying let us be your iTunes partner. Let’s build a platform together where we can re-market your content in a very IP/copyright friendly way and we’re going to make your information much more findable,” Park said.

DeepDyve currently indexes about 500 million pages and partners with a number of publications for free access to their content. This quarter the company, which focuses solely on topics like health, life sciences and patents, plans on expanding its focus into physical sciences, including information technology, clean technology and energy.

Source: Portfolio.com: Top 5 | 12 Nov 2008 | 2:00 pm

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