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US Tribune files for bankruptcyThe publisher of the Los Angeles Timesand theChicago Tribune sought bankruptcy protection yesterday as it struggles to renegotiate its estimated $13 billion ($£8.7 billion) debt mountain.Source: Latest Business News from Times Online | 9 Dec 2008 | 8:22 pm Oil rises above $44Oil prices rose back above $44 a barrel Tuesday as investors factored in a possible OPEC production cut next week, and the White House reviewed a plan that could keep U.S. automakers out of bankruptcy.Source: Business and financial news - CNNMoney.com | 9 Dec 2008 | 1:38 pm Sony to cut 16,000 jobs, slash $1.1 billion in costs (Reuters)
Source: Yahoo! News: Business | 9 Dec 2008 | 1:35 pm Ross resigns Olympics role after shares disclosure (AP)AP - Carphone Warehouse co-founder David Ross resigned Tuesday from his post as an Olympic adviser to London Mayor Boris Johnson a day after revealing he had improperly disclosed his use of shares in the phone retailer to secure personal loans.Source: Yahoo! News: Business | 9 Dec 2008 | 1:30 pm Stocks head toward 3rd session of gains (AP)
Source: Yahoo! News: Stock Markets News | 9 Dec 2008 | 1:27 pm Three companies, 14,000 job cutsThree major companies - Sony Corp., Danaher Corp. and Wyndham Worldwide - have announced job cuts totaling 13,700 positions.Source: Business and financial news - CNNMoney.com | 9 Dec 2008 | 1:24 pm Oil rises towards $44 (Reuters)
Source: Yahoo! News: Business | 9 Dec 2008 | 1:13 pm Finland expects economy to shrink in 2009Finland's central bank on Tuesday slashed its outlook for economic growth in 2009, saying it now expects the economy to shrink by 0.5 percent instead of growing 1.3 percent, as previously...Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Dec 2008 | 1:11 pm Maine researcher tests new wind turbine designBuilding the ideal wind turbine for offshore waters is no simple feat. At the University of Maine's Advanced Engineered Wood Composites Center, researchers are designing, manufacturing...Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Dec 2008 | 1:07 pm Fannie Mae (FNM) And Freddie Mac (FRE) Could Still Trade Down To Zero
Over the last few days, more news has come out that would indicate the the common shareholders of the two firms will get nothing. According to The New York Times, Peter J. Wallison, a fellow at the American Enterprise Institute said that that "Fannie Mae’s losses could rise at least $100 billion because of “junk loans” that are obscured on its books." Given the breadth and depth of the housing crisis, that number is not entirely shocking. What is amazing is that the federal government, which is pouring tens of billions of dollars into Fannie and Freddie, has not been about to make a clear evaluation of the liabilities attached to the companies. The trouble with the lack of an evaluation of Fannie Mae and Freddie Mac gets to the heart of one of the greatest flaws of the Fed and Treasury investments and loans to large banks and other financial institutions. The government has not created an analytic agency to go through the books for each company that is receiving federal funds to make an assessment of the balance sheets of the firms with an eye toward a totality of their troubles. Congress will not get to the bottom of the liability issue. It is not equipped to do it and hearings only scratch the surface. Without real data on the balance sheets of the country's largest financial institutions, the bailout is just a roll of the dice. Douglas A. McIntyre Source: 24/7 Wall St. | 9 Dec 2008 | 1:07 pm Fannie, Freddie execs were warned of problems: report (Reuters)
Source: Yahoo! News: Business | 9 Dec 2008 | 1:02 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 | 9 Dec 2008 | 1:01 pm Movers & Shakers: Tuesday's biggest gaining and declining stocksAmong the companies whose shares are expected to see active trade in Tuesday’s session are H&R Block, Danaher, FedEx, Magnetek, National Semi, Pep Boys, Sony and TI.Source: MarketWatch.com - Top Stories | 9 Dec 2008 | 1:01 pm Report: Economy needs money, health care fixRead full story for latest details.Source: Business and financial news - CNNMoney.com | 9 Dec 2008 | 1:00 pm Wall Street cautious after rallies (Reuters)
Source: Yahoo! News: Stock Markets News | 9 Dec 2008 | 12:59 pm Wall Street cautious after rallies (Reuters)
Source: Yahoo! News: Business | 9 Dec 2008 | 12:59 pm German court undoes cuts in commuter tax breaksGermany's highest court ruled on Tuesday that the government acted improperly when it cut commuters' tax breaks as part of efforts to reduce the nation's budget deficit _ a decision that...Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Dec 2008 | 12:59 pm UPDATE 2-India gives ONGC go ahead for Imperial offer-sourceMUMBAI, Dec 9 (Reuters) - Indian state-run Oil and Natural Gas Corp received government approval for its $2.6 billion bid for Russia-focused explorer Imperial Energy , a top company source close to the...Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Dec 2008 | 12:59 pm Israel Stocks: Market higher for fourth day; Teva draws funds for Barr dealIsrael’s benchmark index shakes off early losses and rises for a fourth day, led by strength in Israel Chemicals and parent Israel Corp., while technology suffers from drops in a number of key names.Source: MarketWatch.com - Top Stories | 9 Dec 2008 | 12:58 pm Pelosi likes idea of 'car czar' to audit bailoutHouse Speaker Nancy Pelosi touted the notion of a 'car czar' to supervise an auto industry bailout, saying Tuesday that Big Three executives haven't adapted well to changing conditions. ...Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Dec 2008 | 12:54 pm Euro dips against dollarThe European single currency dipped against the dollar on Tuesday as the foreign exchange market set aside an encouraging survey on German investor confidence to focus on recession worries.Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Dec 2008 | 12:53 pm Stocks head toward 3rd session of gainsWall Street pointed to a third straight session of gains on Tuesday as investors held on to hopes that the government will reach an agreement to rescue U.S. automakers. Negotiators...Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Dec 2008 | 12:53 pm Former Fannie Mae, Freddie Mac execs to testify (AP)
Source: Yahoo! News: Business | 9 Dec 2008 | 12:52 pm US, European interbank lending rates declineThe cost of loans between banks fell in the U.S. and across Europe as investors digested last week's big interest rate cuts from the European Central Bank and the Bank of England. The...Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Dec 2008 | 12:50 pm Indications: Stock futures point to third day of gainsU.S. stock futures edged higher Tuesday, following two sessions of strong gains, after lawmakers sent an auto-industry-rescue plan to the White House, while Texas Instruments and FedEx cut their earnings forecasts.Source: MarketWatch.com - Top Stories | 9 Dec 2008 | 12:48 pm Pelosi: Stimulus bill ready soonRead full story for latest details.Source: Business and financial news - CNNMoney.com | 9 Dec 2008 | 12:47 pm New recession warnings hit leading economies (AFP)
Source: Yahoo! News: Stock Markets News | 9 Dec 2008 | 12:46 pm Tribune bankruptcy buys time to fix financesTribune Co.'s bankruptcy filing gives the struggling newspaper and television station owner time to put its finances in order, and complete the difficult task of finding buyers for some of...Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Dec 2008 | 12:44 pm Slovak central bank cuts rate to 2.5 percentSlovakia's central bank on Tuesday slashed its key interest rate by three-quarters of a percentage point to 2.5 percent to help the economy amid the global economic downturn. The move...Source: Infocious RSS raw feed - channel BNewsBusiness | 9 Dec 2008 | 12:42 pm Pre-Market Analyst Upgrades & Downgrades (ADSK, CVA, SFD, MMM, ATU, BLK, CBEY, ITW, RFMD, ROP, UPS)These are some of the top pre-market analyst upgrades and downgrades we are seeing this Tuesday morning:
Jon C. Ogg Source: 24/7 Wall St. | 9 Dec 2008 | 12:40 pm Massive job losses in Congo minesMore than 200,000 jobs are lost in DR Congo amid a collapse in mineral prices during the global economic downturn.Source: BBC News | Business | World Edition | 9 Dec 2008 | 12:36 pm David Ross, Carphone Warehouse tycoon, quits as Olympic adviser to Boris JohnsonDavid Ross, the co-founder of Carphone Warehouse, resigned from the London Olympics organising committee today in the wake of a damaging shares scandal.Source: Latest Business News from Times Online | 9 Dec 2008 | 12:35 pm Stocks to key again on autosU.S. stocks were poised to open slightly higher Tuesday, as investors remained focused on a proposed bailout for the nation's automakers.Source: Business and financial news - CNNMoney.com | 9 Dec 2008 | 12:33 pm Leno ready for prime time with 10 p.m. slot on NBC: report“Tonight Show" host Jay Leno will move to a 10 p.m. ET slot on General Electric’s NBC-TV programming unit, according to published reports.Source: MarketWatch.com - Top Stories | 9 Dec 2008 | 12:32 pm Washington Post Investigation: Fannie And Freddie Knew Of Dangers
"Internal Freddie Mac documents show that senior executives at the company were warned years ago that they were offering mortgages that could pose dangers to the firm, hurt borrowers and generate more risky loans throughout the industry." "At Fannie Mae, top executives were told it was necessary to develop "underground" efforts to buy subprime mortgages because of competitive pressures, although there were growing risks and borrowers often didn't understand the terms of the loans, documents show." It is likely that no one did anything about its because both the companies and their managements were making so much money. It was ever thus. Douglas A. McIntyre Source: 24/7 Wall St. | 9 Dec 2008 | 12:31 pm Currencies: Dollar and yen reboundA sharper-than-expected third-quarter contraction in Japanese gross domestic product dampens risk appetite early Tuesday, boosting the Japanese yen and the U.S. dollar, analysts say.Source: MarketWatch.com - Top Stories | 9 Dec 2008 | 12:26 pm London Markets: London shares advance in choppy sessionLondon shares advance on Tuesday for a second session, with miners and oil producers performing well.Source: MarketWatch.com - Top Stories | 9 Dec 2008 | 12:21 pm Ex-Carphone chief’s property interests laid bareDavid Ross’s commercial property interests, many of which are held through Kandahar Group, in a joint venture with Morgan Stanley, are believed to hold the key to the reversal of his fortunes.Source: Latest Business News from Times Online | 9 Dec 2008 | 12:19 pm U.K. retail sales fell in November and 2009 looks even worseTotal U.K. retail sales fall for a second month in November, a survey from the British Retail Consortium shows Tuesday, as cash-strapped customers rein in their holiday spending.Source: MarketWatch.com - Top Stories | 9 Dec 2008 | 12:19 pm German investor confidence risesGerman investor sentiment unexpectedly improves in November despite exports falling and the eurozone battling a recession.Source: BBC News | Business | World Edition | 9 Dec 2008 | 12:18 pm Sony to cut 8,000 jobs and close 10% of manufacturing sitesSony Corp. plans to cut 8,000, or 5%, of the jobs in its electronics division and close about 10% of its 57 manufacturing sites worldwide in an effort to save more than 100 billion yen ($1.08 billion) by March 2010.Source: MarketWatch.com - Top Stories | 9 Dec 2008 | 12:11 pm Chinese Real Estate Investors Descend on California
It’s always a good market for somebody. From the Financial Times: Chinese bargain hunters are preparing to descend on American cities such as Los Angeles and San Francisco, where homeowners have suffered some of the steepest price falls in the US. SouFun, the biggest real estate website in China, is organising a trip next month to look at properties in California and possibly Nevada. Liu Jian, the company’s chief operating officer, said about 300 people had expressed interest in the idea in the three days since it was advertised, though the company would take only a small group on the first trip. “Given the problems in the Chinese market now, many people have been asking us about taking a look at overseas markets, especially the US,” he said. The trip would focus on California, particularly San Francisco and Los Angeles, where big Chinese populations might make his clients more comfortable. “The US market absolutely terrifies me,” said one Shanghai-based real estate executive. “However, there are plenty of people here who think this a great time for bottom-fishing.” The US market terrifies me, too. Unless the Chinese can revive it… Source: Business Pundit | 9 Dec 2008 | 12:07 pm Russian firms 'top bribe list'Companies from Russia and China are most likely to pay bribes when doing business abroad, a survey claims.Source: BBC News | Business | World Edition | 9 Dec 2008 | 11:58 am Retail sales 'fall still further'Total UK retail sales have fallen in consecutive months for the first time in at least 13 years, a closely-watched survey finds.Source: BBC News | Business | World Edition | 9 Dec 2008 | 11:52 am White House and Democrats push for auto bailout deal (Reuters)
Source: Yahoo! News: Business | 9 Dec 2008 | 11:33 am When to collect Social SecurityQuestion: I'm 60 years old and in good health. I can afford to put off drawing Social Security until after age 62 to get a higher monthly check, but I'm not sure if I should. What factors should I consider when deciding whether I should hold off collecting Social Security? Robert Walker, Austin, TexasSource: Business and financial news - CNNMoney.com | 9 Dec 2008 | 11:25 am Cutting Wall St. Bonuses Doesn't Work (MS)(MER)
A lot of sports teams claim that they pay players ludicrous salaries because otherwise they would go to competing teams. The argument has an elemental logic to it. Rich franchises get the best players. The best talent gets rich. It is a sort of free market analog to what goes on in the business world. Shareholders are always hard pressed to understand why public company CEOs make tens of millions of dollars. Corporate boards argue that there is a limited pool of skilled people who went to the Harvard Business School but did not go on to become consultants at McKinsey or Bain. Wall St. will probably flush out the best 5% or 10% of its talent by not paying them a competitive wage. The best people will end up at hedge funds and private equity firms. It is easy to say that those institutions are also in trouble, but the cream of them can still raise billions of dollars, and the very finest still make money. The heads of these companies know that they are about to be able to cherry pick the real talent out of Wall St. Losing the best people at the large commercial banks and brokerages might be OK in robust times, but, of course, the best people make a lot of money when these firms are flush so they stay on. During periods of real trouble the floundering operators cannot afford to part with their real stars. Who will be left to think and trade their way out of the deep holes the industry has dug for itself? No one. Douglas A. McIntyre Source: 24/7 Wall St. | 9 Dec 2008 | 11:19 am World markets cement Monday's hefty gains (AP)
Source: Yahoo! News: Stock Markets News | 9 Dec 2008 | 11:18 am Sony to cut plants and 8,000 jobsSony announces plans to close 10% of its manufacturing plants and cut 8,000 jobs, or 5% of its electronics workforce.Source: BBC News | Business | World Edition | 9 Dec 2008 | 11:04 am Suppliers: The Other Catastrophe In The Auto Sector
If the federal government puts $15 billion into the car companies, it will have made a start at fixing The Big Three. It may take another $100 billion to finish the job, and, if the recession runs on and the Japanese keep making better cars, the whole rescue could fall apart. The piece of the car industry puzzle which is not being addressed is what happens if a substantial number of the auto supply firms go under? According to The Wall Street Journal, "Many suppliers were financially weak going into this crisis and they now face an extended period of extremely slow sales." The problem is a great example of how the federal government can fix the head of the problem while allowing the body to die. In the end, the two pieces rely on one another for survival. That seems to have been lost in the process. Two things happen as suppliers disappear. The first is that when they cannot operate, the supply chain is broken and, in many cases, the big auto firms have a lock-up in production. Pieces go into the assembly line, but, lacking some of the critical parts, the finished product does not come out. The more insidious issue is that with fewer parts companies, the leverage of those left over becomes greater as each day passes. Without the ability to conduct competitive bidding, the car companies are trapped into paying higher prices than the might have in a robust supplier economy. The idea of building vehicles are lower prices gets undermined. One of the essential ingredients of the rescue never takes hold. If the rescue of America's car companies gets a promising start, it won't last long if the related parts of the larger system begin to dissolve. Douglas A. McIntyre Source: 24/7 Wall St. | 9 Dec 2008 | 11:02 am UK slowdown worse than forecast as output slumpsIndustrial production plunged at the fastest pace in nearly six years in October, heightening expectations that the recession is gathering pace as revisions to September's data indicate that the economy shrank by more than initially thought between June and September.Source: Latest Business News from Times Online | 9 Dec 2008 | 11:00 am How a $15B hedge fund averted disasterOn the morning of Friday, Oct. 24, James Forese, Citigroup's head of capital markets, picked up the phone and called Kenneth C. Griffin, the founder and chief executive officer of Citadel Investment Group, a Chicago-based hedge fund that manages $15 billion and has 1,300 employees worldwide.Source: Business and financial news - CNNMoney.com | 9 Dec 2008 | 10:55 am Deep problems in US, says OECDThe OECD says the US recession might get worse, while deep structural problems remain unresolved.Source: BBC News | Business | World Edition | 9 Dec 2008 | 10:53 am 5 stores bucking the sales slumpMove over Wal-Mart: You're not the only game in town in this recession.Source: Business and financial news - CNNMoney.com | 9 Dec 2008 | 10:48 am Mortgage lenders attack Labour on bank policiesThe Council of Mortgage Lenders (CML) has launched an attack against the Government's "conflicting and incoherent" policies toward British banks as home loan lending fell by nearly 60 per cent in October.Source: Latest Business News from Times Online | 9 Dec 2008 | 10:47 am No Fixing The Housing Crisis While People Feel Poor
The government has not fixed housing. Neither has the banking private sector. Housing is still the big unrepaired problem at the center of America's diving economic fortunes. According to Reuters, "More than half of troubled borrowers face losing their homes even six months after lenders have eased their monthly payments." Giving people better terms on their mortgages is not making the grade. The trouble is that getting people who believe that they will lose their jobs or that their incomes will fall to pay even modest mortgage obligations is next to improbable. There is too great a temptation for citizens to walk away from homes which they believe have deteriorating value and either rent or move in with the relatives. Nothing short of heroic efforts will take the value of housing back up again soon. The federal government could support the home market by buying up residences, but what will become of them? Perhaps they could become shelter for the unemployed. That would move the United States toward a remarkable socialism and make the Treasury the largest landowner in America. Short of buying its way out of the problem, the new administration can only hope that jobs programs will make people feel less vulnerable to being thrown out of work. At the pace that workers are being laid off, that day may be well into a distant future. Douglas A. McIntyre Source: 24/7 Wall St. | 9 Dec 2008 | 10:45 am ZEW shows slight rebound in German economic sentimentA closely-watched gauge of German economic sentiment sees a slight but unexpected rebound in December, the Mannheim-based Center for European Economic Research or ZEW, reports Tuesday.Source: MarketWatch.com - Top Stories | 9 Dec 2008 | 10:44 am Slump hits India's car industryCarmakers Nissan and Renault scale down plans for new plants in India after a sharp fall in car sales in the region.Source: BBC News | Business | World Edition | 9 Dec 2008 | 10:43 am Sony's (SNE) Revival Fails (AAPL)(MSFT)
The Japanese firm decided to mount a comeback, but now that has fallen apart. Sir Howard Stringer was brought in to make Sony more competitive. He was the first non-Japanese to run the company. As an "outsider" he might stand a chance of tearing up the old bureaucracy at Sony and making the firm an innovator again. The process got off to a slow start. Stringer could not get his engineers to put out popular products. Sony sank to being an LCD TV manufacturer and a movie studio in a competitive content environment. Sony never found its iPod or Wii. At the core of Sony's revitalization was a vacuum Sony finally gave up the ghost, cutting 8,000 people in the hope of saving $1 billion a year in expenses.That side of the ledger can probably be fixed. The revenue side is still in trouble with no improvements in any of the company's businesses in a position to fix it. Sony's trouble now is not how many people it employs. It is how many people the company has who can mount a drive to bring innovative products to market. Right now, the number is zero. Douglas A. McIntyre Source: 24/7 Wall St. | 9 Dec 2008 | 10:29 am State threatens Bank of AmericaThe governor of Illinois threatens to stop doing business with Bank of America if it does to return credit to a factory being occupied by workers.Source: BBC News | Business | World Edition | 9 Dec 2008 | 10:27 am UK manufacturing in sharp declineUK manufacturing output fell in October by the biggest amount in more than six years, official data shows, underlining the weak state of the economy.Source: BBC News | Business | World Edition | 9 Dec 2008 | 10:20 am Airlines 'to lose $5bn in 2008'The global air industry is set to lose $5bn (£3.32bn) in 2008 and $2.5bn next year, an industry body says.Source: BBC News | Business | World Edition | 9 Dec 2008 | 10:04 am World's hungry 'close to one billion'The food crisis has pushed the number of hungry people in the world to almost 1bn, a 'serious setback' to global efforts to reduce mass starvation according to the UN's Food and Agriculture OrganisationSource: Financial Times - US homepage | 9 Dec 2008 | 10:04 am GM: Who could replace Wagoner?Now that President-elect Obama has suggested that General Motors and the rest of the Detroit Three may need to install new management as a condition of a bailout, the question is: Who will become GM's next CEO?Source: Business and financial news - CNNMoney.com | 9 Dec 2008 | 9:55 am Employers cautious about hiringWith the economy in dire straits, employers are taking a cautious approach to hiring going forward, according to a staffing firm survey released Tuesday.Source: Business and financial news - CNNMoney.com | 9 Dec 2008 | 9:27 am Indian stock market closed for holiday (AP)AP - Indian financial markets were closed Tuesday for a national holiday.Source: Yahoo! News: Stock Markets News | 9 Dec 2008 | 9:27 am Land of Leather dives 22% after talks collapseShares in Land of Leather, the troubled furniture maker, plunged more than 22 per cent today after admitting that it had ended bid discussions with potential buyers after failing to reach an agreement on price.Source: Latest Business News from Times Online | 9 Dec 2008 | 8:49 am Media Digest 12/9/2008 Reuters, WSJ, NYTimes, FT, Bloomberg
Reuters reports that Congress and The White House are close to a bill that would give Detroit modest loans. Reuters reports that Fannie Mae (FNM) and Freddie Mac (FRE) execs were warned years ago about the risks of some of their lending. Reuters reports that regulators are still troubled about how to fix the housing crisis. Reuters reports that Ford (F) is discussing selling Volvo to a Chinese firm. Reuters writes that Sony (SNE) will cut 8,000 jobs. Reuters reports that Fedex (FDX) cut its outlook and its shares fell sharply. The Wall Street Journal reports that the US may end up owning shares in The Big Three. The Wall Street Journal reports that the US may use bailout funds to help some credit unions. The Wall Street Journal reports that Yahoo! is closer to finding a CEO with the ex-Vodaphone (VOD) chief as a lead candidate. The Wall Street Journal reports that the CEOs of Morgan Stanley (MS) and Merrill Lynch (MER) will get no bonuses. The Wall Street Journal reports that Chrysler talks with China's Chery Automotive about building a strategic relationship have died because of the economy. The Wall Street Journal reports that may auto parts companies are failing. The Wall Street Journal writes that Dow Chemical (DOW) will cut 11% of its staff. The Wall Street Journal writes that LBO candidate BCE got a positive report on its solvency. The Wall Street Journal reports that tech companies are working on cutting the legal risk of using open source software Linux. The Wall Street Journal reports that Texas Instruments (TXN) and National Semi (NSM) cut forecast. The Wall Street Journal reports that S&P downgraded Russia's debt. The Wall Street Journal reports that sales at McDonald's (MCD) jumped. The Wall Street Journal reports that tech spending will slow in 2009. The Wall Street Journal reports that the head of Playboy (PLA) will step down. The New York Times reports that Japan's recession deepened in the third quarter. The New York Times reports that car dealers are preparing for closings or a fight with The Big Three over their franchises. The New York Times reports that modified home loans often lead borrowers back to trouble. Bloomberg reports that Obama hopes to borrow China's wealth and clout to stabilize the US economy. Douglas A. McIntyre Source: 24/7 Wall St. | 9 Dec 2008 | 8:46 am Sony to close factories and cut 8,000 jobsThe Japanese group is to shut five or six factories, reduce capital expenditure by 30% and pull out of unprofitable businesses as it aims to cut $1.1bn in annual costs at its struggling electronics operationsSource: Financial Times - US homepage | 9 Dec 2008 | 8:40 am Sony to close factories and cut 8,000 jobsSony will close five or six factories and cut 8,000 jobs worldwide in an effort to remain profitable through a slump in consumer spending on electronics.Sony said it would withdraw from unprofitable businesses...Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Dec 2008 | 8:40 am London FTSE down at open (AFP)
Source: Yahoo! News: Stock Markets News | 9 Dec 2008 | 8:39 am China shares retreat on profit-taking (AP)AP - Chinese shares fell Tuesday for the first time in a week on profit-taking as investors sold financial and real estate stocks that gained in previous sessions.Source: Yahoo! News: Stock Markets News | 9 Dec 2008 | 8:31 am Asia Markets And Europe Open 12/9/2008
The Nikkei rose .8% to 8,396. Honda (HMC) rose slightly. Nintendo was up on news of strong sales. The Hang Seng fell 2.2% to 14,718. The Shanghai Composite fell 2.5% to 2,037. At the open in Europe, the FTSE fell 1.3% to 4,242. The Dax was off 1.6% to 4,641. The CAC 40 was down 1.3% to 3,205. Data from Reuters. Douglas A. McIntyre Source: 24/7 Wall St. | 9 Dec 2008 | 8:16 am Wall Street extends big rally to 2nd sessionMarkets are buoyed by prospects for an auto-industry bailout and Obama's plans for infrastructure spending. Overseas stocks also advance. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Dec 2008 | 8:00 am Christie Hefner to resign from PlayboyThe departure of the founder's daughter as CEO comes at a low point for the adult-media empire but is a surprise to many. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Dec 2008 | 8:00 am House Democratic leaders unveil plan to aid Big Three automakersThe measure calls for $15 billion in emergency funding, with oversight from a presidentially appointed monitor. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Dec 2008 | 8:00 am Talk at 10: Leno said to get new NBC showTV host is said to take early slot after yielding 'Tonight,' changing the rules of prime time. Making a radical...Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Dec 2008 | 8:00 am Some see deep water as fertile field for wind powerAbout 78% of the nation's electricity is consumed by people in places with enormous wind resources. Some call...Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Dec 2008 | 8:00 am Tribune Co. files for bankruptcy protectionThe Chicago-based media company -- whose properties include the L.A. Times and KTLA Channel 5 -- wants to restructure payments on $12 billion in debt. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Dec 2008 | 8:00 am Some forecast $1-a-gallon gas as demand continues to fallIn the last week, pump prices have dropped an average of 11.2 cents nationally and 15 cents in California. Pump...Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Dec 2008 | 8:00 am Tribune Co. files for Chapter 11 bankruptcy protectionThe Chicago company, which owns the L.A. Times and KTLA Channel 5, will stop making interest payments on $12 billion in debt as it attempts to restructure its loans, chairman Sam Zell says. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Dec 2008 | 8:00 am First $350 billion of bailout fund almost goneJust $15 billion is left. Most of the funds have gone to banks. Paulson may ask for more. The government has just...Source: Infocious RSS raw feed - channel BNPaperBusiness | 9 Dec 2008 | 8:00 am Aust stocks: Market ignores Wall St rallySYDNEY - The Australian share market ignored a strong rally on Wall Street to close lower on Tuesday after heavy falls on local bank stocks. At the 1620 AEDT close, the benchmark S&P/ASX200 index had lost 27.3 points, or 0.75 per...Source: New Zealand Herald - Business | 9 Dec 2008 | 7:58 am Japan stocks gain on hopes for commodities demand (AP)AP - Japanese stocks rose Tuesday as investors brushed off the latest round of grim economic data and instead pinned their hopes on global stimulus measures likely to fuel new demand for raw materials.Source: Yahoo! News: Stock Markets News | 9 Dec 2008 | 7:44 am Sony axes 16,000 jobs and shuts down plantsSony is to slash more than 16,000 permanent and part-time jobs from its worldwide electronics division and raise prices for its gadgets in the face of dwindling consumer spending.Source: Latest Business News from Times Online | 9 Dec 2008 | 7:40 am NZ stocks: Market closes up 0.9pcThe sharemarket gave up some of its earlier gains as it felt the pressure from a weaker Australian market, but still managed to close up 0.9 per cent. The benchmark NZSX-50 index closed up 24.9 points at 2724.71, having yesterday...Source: New Zealand Herald - Business | 9 Dec 2008 | 6:30 am Currency: Dollar retreats from highThe New Zealand dollar spent the day retreating from its one-week high reached overnight, weakening as overseas investors changed their positions back in favour of the US dollar. By 5pm, the kiwi was at US54.16c, up from US53.24c...Source: New Zealand Herald - Business | 9 Dec 2008 | 5:52 am Asian stocks track Wall Street higher (AFP)
Source: Yahoo! News: Stock Markets News | 9 Dec 2008 | 4:48 am Asian stocks track Wall Street higher (AFP)
Source: Yahoo! News: Business | 9 Dec 2008 | 4:48 am Japanese economic slowdown worsensRevised GDP figures showed the economy sank more deeply into recession in the third quarter than initially thought, reinforcing warnings that the world's No. 2 economy faces its longest period of contraction everSource: Financial Times - US homepage | 9 Dec 2008 | 2:57 am Hanover Finance rescue plan voted inHanover investors have voted in favour of the failed finance company's controversial rescue plan. A statement just released by the company says investors have approved its plan to pay back all the $527 million it owes over the...Source: New Zealand Herald - Business | 9 Dec 2008 | 2:30 am Hard times hit Japan's economyEven Japan, considered one of the world's most robust economies, is feeling the pinch of the global recession. Japan's economy shrank at a 1.8 per cent annual rate in the July-September quarter, in a lowered revision of an already...Source: New Zealand Herald - Business | 9 Dec 2008 | 2:30 am Government confirms changes to KiwiSaverThe Government has confirmed it will axe the annual $40 fee subsidy it puts into KiwiSaver accounts to help pay for a better deal for low income workers. Finance Minister Bill English today released the Government's KiwiSaver and...Source: New Zealand Herald - Business | 9 Dec 2008 | 2:20 am Sales up at Restaurant BrandsRestaurant Brands' third quarter sales have edged up a slight 0.8 per cent, as its KFC operation continues to perform well. And the company's long-time dead weight Pizza Hut is starting to show "initial signs of stabilisation". The...Source: New Zealand Herald - Business | 9 Dec 2008 | 2:00 am Morgan Stanley, Merrill chiefs give up bonuses (AP)AP - The chief executives of Morgan Stanley and Merrill Lynch & Co. are going without bonuses for a year that has seen Wall Street ravaged by staggering losses, mass layoffs and the collapse of storied firms.Source: Yahoo! News: Stock Markets News | 9 Dec 2008 | 1:32 am Samuelson Says U.S. Economic Policy Must Focus on Long TermSource: Bloomberg - All Podcasts | 9 Dec 2008 | 1:10 am Morgan Stanley and Merrill Lynch chiefs forgo bonuses amid pressure on Wall StTop executives at Merrill Lynch and Morgan Stanley, led by their chief executives, John Thain and John Mack, will not receive bonuses this year amid growing pressure on Wall Street leaders to share the pain of the financial crisisSource: Financial Times - US homepage | 9 Dec 2008 | 1:09 am Barenboim Isn't Optimistic About Middle East PeaceSource: Bloomberg - All Podcasts | 9 Dec 2008 | 1:05 am LPL Financial's Anderson Says ETFs Assist with Managing TaxesSource: Bloomberg - All Podcasts | 9 Dec 2008 | 1:02 am 'Car czar' part of Congress' $28bn aid proposalWASHINGTON - Congressional Democrats sent the White House an emergency $15 ($27.9) billion draft auto bailout plan Monday, complete with provision of a "car czar" to oversee the industry's reinvention of itself. The Bush administration...Source: New Zealand Herald - Business | 9 Dec 2008 | 1:00 am Westpac making share placementA trading halt has been placed on Westpac shares after the bank announced it is launching a A$2.5 billion underwritten share placement. Westpac Banking Corporation says the move is intended to enhance its balance sheet and position...Source: New Zealand Herald - Business | 9 Dec 2008 | 1:00 am Wolff Says Murdoch Grooming Son James as News Corp. SuccessorSource: Bloomberg - All Podcasts | 9 Dec 2008 | 12:55 am Detroit bail-out agreed in principleThe Bush administration and congressional Democrats agreed in principle on a $15bn emergency loan for US carmakers, but remained at odds over key details as negotiations continuedSource: Financial Times - US homepage | 9 Dec 2008 | 12:46 am Business Briefs - MondayContinental to try flying on algae. The airline said it will try using a biofuel blend made from algae to power one of its commercial jets,...Source: Investor's Business Daily: BUSINESS | 9 Dec 2008 | 12:43 am In Brief - MondayTV network NBC, a unit of GE (GE), is considering reducing the number of program hours it offers as well as the number of nights it provides...Source: Investor's Business Daily: BUSINESS | 9 Dec 2008 | 12:43 am After The Close - MondayFEDEX (FDX), the shipping giant, cut its '09 EPS outlook to $3.50- $4.75, below views of $5.15. It sees Q2 EPS of $1.58 vs. views of $1.54. It...Source: Investor's Business Daily: BUSINESS | 9 Dec 2008 | 12:43 am Trends & Innovations - MondayOnline rental grows in recessionSource: Investor's Business Daily: BUSINESS | 9 Dec 2008 | 12:43 am Ambulance Company Thrives On 911 Contracts And Natural DisastersHurricanes Ike and Gustav wreaked havoc on the Caribbean and U.S. Gulf Coast states in September.Source: Investor's Business Daily: BUSINESS | 9 Dec 2008 | 12:43 am White House reviews Dem auto bailout, no deal yetWASHINGTON (Reuters) - The White House reviewed a Democratic plan on Monday to bail out stricken automakers with up to $15 billion in loans, a bid that would also clear the way for longer-term help if industry meets certain conditions.Source: Reuters: Business News | 9 Dec 2008 | 12:22 am Job cuts mount across sectors as recession worsensNEW YORK (Reuters) - The United States suffered a grim roll call of job losses on Monday, as a number of major manufacturing and service companies are forced to slash costs to cope with the deepening economic crisis.Source: Reuters: Business News | 9 Dec 2008 | 12:13 am VIX Index of U.S. Stock Option Prices Retreats 2% to 58.49Source: Bloomberg - All Podcasts | 9 Dec 2008 | 12:08 am Costs exclude thousands from fuel poverty aidA Government scheme to combat fuel poverty has been called a failure after it emerged that more than 10,000 eligible low-income households will be unable to benefit this winter - because they are too poor.Source: Latest Business News from Times Online | 9 Dec 2008 | 12:00 am Carphone Warehouse founder David Ross quits in disgrace over secret share dealsThe co-founder of Carphone Warehouse resigned abruptly from the board yesterday after it emerged that he had broken City rules by secretly mortgaging his £157 million stake in the mobile phones retailer.Source: Latest Business News from Times Online | 9 Dec 2008 | 12:00 am David Ross: glitz and glamour of the upper-class 'barrow boy' with all the right connectionsAs the man who went from selling phones from a flat off Marylebone Road to the upper ranks of the young, buccaneering super-rich, David Ross could claim an astute understanding of reward and risk. But if the luck that helped him to an £800million fortune was finally on the wane in recent months, few of his glamorous associates would have been able to guess it.Source: Latest Business News from Times Online | 9 Dec 2008 | 12:00 am Harvey Norman warns of store closuresRetailer Gerry Harvey is warning that some of the Australian stores in his Harvey Norman empire will close during the next six months because of the economic slowdown. Sales in all key areas of the business - furniture, electrical...Source: New Zealand Herald - Business | 9 Dec 2008 | 12:00 am Tribune files for bankruptcy protectionNEW YORK (Reuters) - The publisher of the Chicago Tribune and the Los Angeles Times declared bankruptcy on Monday as the U.S. newspaper industry's unrelenting loss of readers and advertisers claimed its biggest victim yet.Source: Reuters: Business News | 8 Dec 2008 | 11:55 pm Wyndham to cut 4,000 jobs as it shrinks timeshareNEW YORK (Reuters) - Hotel and timeshare company Wyndham Worldwide Corp said on Monday it will cut about 4,000 jobs as it shrinks its timeshare business to help eliminate its reliance on the asset-backed securities market.Source: Reuters: Business News | 8 Dec 2008 | 11:49 pm CEO Of The Year Nominees: 10) Irene B. Rosenfeld Of Kraft (KFT)24/7 Wall St. will name its annual CEO of the Year later this week. The executive will be picked from a field of ten which we will profiled over the last ten days. The CEOs are chosen on the basis of their company’s stock market and financial performances compared with their own industry groups and all large companies traded on US markets. Only firms with market caps of more than $5 billion were considered. 24/7 reviewed revenue growth, operating margins, balance sheets, return on assets, and return on equity. Over the last year, shares in Kraft (KFT) have outperformed the DJIA, Coke (KO), Kellogg (K), and Pepsi (PEP). In the last quarter, Kraft beat Wall St. estimates on both EPS and revenue. The company was able to pass along most of its rising costs to customers. Kraft added to its strong numbers by increasing its dividend and receiving the distinction of replacing AIG (AIG) in the DJIA. Many investors thought Irene Rosenfeld got off to a slow start as Kraft CEO. She is moving along nicely now. With the cost efficiencies she has built into the company investors should see margin benefits now that commodities prices are falling. Douglas A. McIntyre Source: 24/7 Wall St. | 8 Dec 2008 | 11:46 pm Mishkin Says U.S. Inflation May Likely Be `Too Low'Source: Bloomberg - All Podcasts | 8 Dec 2008 | 11:45 pm EDF blunts Buffett energy bidWarren Buffett's $4.7bn bid for Constellation Energy was dealt a blow on Monday as the US energy group agreed to talks with EDF of France on a rival $4.5bn offer for just half of its nuclear businessSource: Financial Times - US homepage | 8 Dec 2008 | 11:33 pm High Frequency's Weinberg Sees Less Access to Credit In 2009Source: Bloomberg - All Podcasts | 8 Dec 2008 | 11:29 pm Michael Englund Sees Possible `Longest Recession on Record'Source: Bloomberg - All Podcasts | 8 Dec 2008 | 11:00 pm FedEx slashes outlook, shares fall 11 percentCHICAGO (Reuters) - FedEx Corp said on Monday it expects to report a better-than-expected second-quarter profit, but slashed its fiscal 2009 outlook as a weakening U.S. economy offsets lower fuel prices, sending its shares down more than 11 percent in after-market trading.Source: Reuters: Business News | 8 Dec 2008 | 10:59 pm Keller Sees Smaller Cars, Less Revenue for Auto IndustrySource: Bloomberg - All Podcasts | 8 Dec 2008 | 10:57 pm Wall St rallies on infrastructure plan; FedEx fallsNEW YORK (Reuters) - Stocks rallied to their highest level in a month on Monday on optimism President-elect Barack Obama's proposed infrastructure spending could limit the depth of the year-old recession and on hopes for a government bailout of the three U.S. automakers.Source: Reuters: Business News | 8 Dec 2008 | 10:55 pm Regulators scratch heads over housing crisisWASHINGTON (Reuters) - The top U.S. banking regulators said on Monday that some of their foreclosure prevention efforts are floundering and that they have no agreed plan for the future, two years into a housing crisis that has dragged the economy into a deep recession.Source: Reuters: Business News | 8 Dec 2008 | 10:51 pm Hear: Priced To Move
Eric Hansen has something that fits you. NPRYou're standing in a store, looking at a rack of jeans. You need new ones -- most of us do, sooner or later. Feeling worried or guilty or bored, you settle on later. That small moment becomes part of the larger economic scene. Taken together, your decisions and everyone else's are reshaping the world we live in -- for better and for worse. This week, we'll be tracking the outsize consequences of small choices. (After the jump, a listener checks in with his strategy.) Today on Planet Money: -- Bronwen Stine of Brooklyn says money's fine at her house. So why has she -- like so many others -- cut back on spending? -- Eric Hansen, senior vice president of Moda America, distributes clothes from Ungaro, JC de Castelbajac and DKNY. But when people stop shopping, the stores stop ordering more. This week, Hansen is selling surplus suits and assorted gimmes at sample sale downstairs from our office. Adam Davidson came back with a passel of duds, and a story. Download the podcast; or subscribe. Intro music: MGMT's "Time to Pretend." Find us: Twitter/ Facebook/ Flickr. Marc in Augusta, Ga., writes: I'm deleveraging. We've got some credit card debt and student loans, along with our car loans and mortgages. Right now most of our extra income is going towards paying down that debt ahead of schedule. That goes for our income tax refund next year as well. We are also refinancing since rates have dipped. The idea is to get as debt free as possible as quickly as possible, so that our savings can last longer and we will be more financially flexible in the event of a catastrophe (read: layoff). I do have a tinge of guilt knowing that our belt tightening is contributing to the lousy economy, but what can you do? It's every family for themselves... » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 8 Dec 2008 | 10:41 pm Detroit, Congress Keep TalkingAP reports progress in talks between automakers in Detroit and lawmakers in Washington, D.C. Democrats in Congress say the Big 3 automakers could get up to $15 billion in loans in a vote later this week. House Speaker Nancy Pelosi says all players in the industry, from management to union workers, will have to give up something. "We call this a barbershop," Pelosi said. "Everybody's getting a haircut." » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 8 Dec 2008 | 10:18 pm Venice billboard plan seen as a bad signThe buildings around Venice's most famous public square, Piazza San Marco, are crumbling. Chunks of buildings are falling off. A possible solution has tourists and locals a little nervous. Megan Williams reports.Source: Marketplace | 8 Dec 2008 | 10:10 pm Companies pull back on advertisingCorporate ad spending is expected to fall more than 8% next year. Hard times in Detroit are one reason for the drop. But as Ashley Milne-Tyte reports, everybody's pulling back.Source: Marketplace | 8 Dec 2008 | 10:10 pm Tribune files for bankruptcyThe Tribune Company, which owns the Los Angeles Times and the Chicago Tribune, has filed for bankruptcy. The company is about $13 billion in debt after taking itself private last year. Jeff Tyler reports.Source: Marketplace | 8 Dec 2008 | 10:10 pm BBB program helps Muslim charitiesSince 9/11 the federal government has watched Muslim charities closely and made donating to them complicated and sometimes risky. But a new program may help change that. Caitlan Carroll reports.Source: Marketplace | 8 Dec 2008 | 10:09 pm Decoder: What's the LIBOR?The credit markets are still stuck tight according to the usual gauge people look at -- the LIBOR index. It used to be a pretty obscure financial benchmark that only mattered to bank bureaucrats. But not any more. Mitchell Hartman explains.Source: Marketplace | 8 Dec 2008 | 10:09 pm Make Congress put real skin in stimulusThe size of the stimulus package under the Obama administration still isn't known, and whether it's going to work any better, we don't know yet, either. But commentator Susan Lee thinks there's a way to help Congress be smarter about how the money gets spent.Source: Marketplace | 8 Dec 2008 | 10:09 pm Auto bailout has lots of strings attachedThe proposed $15 billion bailout package for Detroit is considered enough to get the Big Three out of their short-term jam. But to convince Congressional skeptics, the package comes with plenty of conditions. Our Washington bureau chief John Dimsdale has more.Source: Marketplace | 8 Dec 2008 | 10:09 pm How much should Obama weigh in?President-elect Obama has been fairly guarded in his pronouncements as to what ought to be done with the economy before he takes office, even as some in both parties are calling for him to be more involved. Kai Ryssdal gets some perspective from James Thurber of American University.Source: Marketplace | 8 Dec 2008 | 10:08 pm Top 9/11 suspects move to plead guiltyKhaled Sheikh Mohammed, the self-confessed mastermind of the 9/11 terror attacks, told a judge at Guantánamo Bay that he wanted to plead guilty, paving the way for possible executionSource: Financial Times - US homepage | 8 Dec 2008 | 10:02 pm H&R Block loss narrows after quitting mortgages (Reuters)Reuters - H&R Block Inc , the largest U.S. tax preparer, on Monday posted a smaller second quarter loss, after shedding its money-losing mortgage operations to focus on its tax business.Source: Yahoo! News: Business | 8 Dec 2008 | 10:02 pm H&R Block loss narrows after quitting mortgagesNEW YORK (Reuters) - H&R Block Inc , the largest U.S. tax preparer, on Monday posted a smaller second quarter loss, after shedding its money-losing mortgage operations to focus on its tax business.Source: Reuters: Business News | 8 Dec 2008 | 10:02 pm Deutsche Bank's Lewis Says $30 a Barrel Oil Is New `Low Point'Source: Bloomberg - All Podcasts | 8 Dec 2008 | 9:58 pm Texas Instruments cuts fourth quarter earningsNEW YORK (Reuters) - Texas Instruments Inc slashed its earnings and revenue outlook for the fourth quarter on Monday, as demand fell for its chips, which are used in everything from cell phones to industrial equipment.Source: Reuters: Business News | 8 Dec 2008 | 9:49 pm The VISA Black Card: A Smart Strategy in Trying Times
First it was American Express’ Centurion, a rare and mysterious card that the super-wealthy considered to be the ultimate status symbol. Its ridiculous perks—a credit limit high enough to buy a small island, and a reputation strong enough to get holders into the most elite of establishments–are outweighed by equally ridiculous requirements, namely, invite-only applications to people who spend more than $150,000 annually on their other American Express cards, and an annual fee of $2,500. Now Barclays Bank has caught on. The VISA Black card, a carbon graphite edifice of spending power, was recently released to butt gold-plated heads with the Centurion. The annual fee is a piddling $495, meaning that the card may attract more lowbrow aspects of the 1% of the US population that is its market. According to AdSavvy, the card’s real perk lies in its concierge service: Barclays is moving away from the water-from-turnips paradigm that other issuers have been using to stay afloat during the crunch. As in, give average Joes, with average credit limits, a lower limit in order to lessen risk. Raise late fees and rates. Hope that this combination of factors lessens risk and increases profit potential. Targeting the uber-rich, as Barclays is doing, is a much smarter move. These lucky few hold as much money as millions of average Joes. They value status and ease over fees. By issuing a card that makes the very wealthy feel secure and elite enough to use on a regular basis, Barclays exposes itself to big profits from higher merchant fees as a percentage of purchase. That sure beats reducing risk and crossing your fingers—the average Joe strategy. Good move, Barclays. More banks should be thinking like you. Source: Business Pundit | 8 Dec 2008 | 9:31 pm US charges ex-Blackwater guardsThe US Department of Justice opened formal indictments against five former employees of Blackwater Worldwide, a private security company, charging them, among other crimes, with the manslaughter of 14 peopleSource: Financial Times - US homepage | 8 Dec 2008 | 8:58 pm Tribune Company files for bankruptcyThe Tribune Company became the largest casualty of the crisis in US newspapers, filing for bankruptcy protection in a blow to Sam Zell, whose $8.2bn leveraged buyout closed only a year ago.Source: Financial Times - US homepage | 8 Dec 2008 | 8:19 pm The Remains Of DetroitListener Bill Hoge recommends a Time.com photo essay of his hometown, The Remains of Detroit. I have to say, I'm fascinated by the Motor City experience. Someone invite us over, will ya? » E-Mail This » Add to Del.icio.us
Source: NPR Blogs: Planet Money | 8 Dec 2008 | 7:23 pm AB InBev unveils U.S. job cuts in savings driveBRUSSELS (Reuters) - Anheuser-Busch InBev , the world's largest brewer, announced plans on Monday to cut 1,400 jobs in the United States, some 6 percent of the workforce there, as it sought a return on its $52 billion merger.Source: Reuters: Business News | 8 Dec 2008 | 7:22 pm Rouble exodus hits Russia credit ratingRussia has became the first G8 country since the start of the financial crisis to have its credit rating downgraded after Standard and Poor's took fright at the recent exodus from the rouble and sharp drop in oil pricesSource: Financial Times - US homepage | 8 Dec 2008 | 7:17 pm Tribune Bankruptcy: Print ItRip the story of Sam Zell's adventure in the newspaper business out of the typewriter and onto the spike. It's too late for a rewrite. "Over the last year, we have made significant progress internally on transitioning Tribune into an entrepreneurial company that pursues innovation and stronger ways of serving our customers," Zell said in a statement, because he certainly doesn't talk that way off the cuff. "Unfortunately, at the same time, factors beyond our control have created a perfect storm—a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our debt." Zell's Sell Hard Times (Still) Late Breaks: Nostalgic for an Era He Never Knew Source: Portfolio.com: Top 5 | 8 Dec 2008 | 7:00 pm Listeners Check In: LayoffsOn the Friday podcast, we took up the idea that layoffs might be good for our economy -- even if they're not necessarily good for the people involved. For now, I'll run three letters on this, two after the jump: Jaimee writes: I was laid off not once, but twice, by the age of 30. While both were very hard on the ego, I came out of both experiences actually better off. I tried new things, new types of employment, and am now in a very steady, secure, albeit boring job. Its scary, there is no doubt. In both experiences I had responsibilities, mortgage, car payment, then COBRA on top of that, but it is a chance to re-evaluate like your definition at the top of the show eluded to. Sometimes you need to see things as an opportunity, God's way of getting out the crowbar, wedging you out of a mire and making you take a chance. Sorry to sound so Pollyanna, but it helped me a lot (once I got past the initial being p****d) to think of it this way. David, who just graduated with an MA in economics, writes: The view that layoffs are good or even natural is intellectually grounded in the idea that there is a "natural rate of unemployment" which is revealed to us by the "Phillips curve." These are in fact very controversial concepts not at all universally accepted by economists (see for example James K. Galbraith's excellent critique in the Journal of Economic Perspectives, Winter 1997), and in that sense I believe that it might have been useful to know that the view that layoffs are good comes from a particular and indeed conservative set of highly abstract neoclassical economic arguments fraught with controversy. In my view the argument that layoffs are bad for the individual but somehow good for the economy should be put in its intellectual context, and perhaps next to some critiques not just from the individual perspective, but from opposing academic perspectives. And here's a letter from someone who has traveled my road. David writes: I agree with the economist who said that layoffs are a necessary factor for growth in the economy. Creative destruction and all that. However, as someone who has been laid off twice in the last 4 months, it seems that the current large numbers of layoffs are not the result of archaic industries being replaced by new efficient innovative companies but more of a systemic meltdown. I wouldn't mind retraining for the next big thing (whatever that is?) but there is precious little safety net in our system and it isn't clear any significant hiring is going on anywhere ( I'm too old to join the military!). » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 8 Dec 2008 | 6:54 pm “Chucking a Sickie” on Facebook = Bad Idea
Well, calling in sick is fine. Just don’t post the fact that you faked it on Facebook. From Ananova: An Australian call centre worker is in trouble after he bragged about “chucking a sickie” on Facebook. Management…(is) investigating after a viral email containing an exchange between Kyle Doyle and his boss was circulated around the world. In the email, Doyle, 21, tried to convince his human resources department that he was genuinely unwell and could not come in to work. However, his plan came unstuck when Niresh Regmi sent him back a snapshot of his Facebook page with the status “not going to work, f*** it i’m still trashed SICKIE WOO”. The email, which some reports had suggested was a hoax, starts with Regmi asking Doyle for a medical certificate to prove he deserved a day off. Doyle wrote back saying he did not need a medical certificate for one day’s leave. Regmi replied that his line manager determined his leave was not due to medical reasons and when Kyle asked him for proof he sent him the Facebook posting. Does this guy deserve to be employed? I’m sure 10 million Americans would be happy to have his job… Source: Business Pundit | 8 Dec 2008 | 6:41 pm My 'Recession-Proof' CountyI'm proud to say my home county of Rankin, Miss., has an unemployment rate of 4.4 percent -- as opposed to 7.2 across the state and 6.7 nationwide. Why? The Jackson Clarion-Ledger reports: The county's school district is the No. 1 employer, with 3,155 staff members. The health sector, centered around River Oaks Hospital in Flowood, employs thousands more. The same can be said for the county's retail hubs in Flowood and Pearl. "We have a great diversity of industry here," [county economic development officer Larry] Mobley said. "We're not heavy in one, so we don't necessarily experience the highs and lows of the economy." Tell it to Detroit -- or to Elkhart County, Ind. (Side note: I'd offer a toast to Rankin County, but it's still dry.) » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 8 Dec 2008 | 4:51 pm How Do Economies Recover?Steven in Boston wants to know: It is easy to see how the economy can fall into a recession, but -- looking at past recessions -- how does the economy ever get out of them? Why doesn't it stay in a contracted state forever? This is fundamentally a question of macroeconomics, clearly one that has yet to be answered definitively. The following are a three frameworks that Ben Bernanke, Hank Paulson and Tim Geithner (as well as a horde of academics) are undoubtedly discussing. Export-led recovery: One way nations get themselves out of a recession is by getting other countries to buy lots of good from them. One strategy for doing that is to let the value of the home currency fall. If the U.S. dollar is worth less compared to the euro, yen or pound sterling, then U.S. goods become cheaper for buyers in Europe, Japan or the U.K. The U.S. affects the value of the dollar in a couple of ways -- primarily through tweaking the interest rate and through selling Treasury bills. Cheaper interest makes dollars worth less. Selling Treasuries increases the demand for dollars, because it parks lots of dollars in the hands of people who buy the T-bills. In terms of increasing exports, the lower interest is far more powerful. With a cheaper dollar, an apple grower in Washington State can expect more customers from overseas. To meet this additional demand, the apple-grower will need to hire additional workers, who will, in turn spend their new salaries on all the usual consumer goods and services that have driven the U.S. economy. Investment-led recovery: This one also depends on the dollar remaining relatively cheap. The idea is that overseas businesses will invest in the United States, buying companies and opening factories (think of the constellation of foreign-owned auto plants in the South). If the dollar is weaker than their national currency, they can produce their goods and services at a lower cost than back home. As the U.S. economy grows, the value of the dollar grows, too -- increasing the value of their investment. A Japanese investor can sell that $100 million factory, and expect to trade the dollars in for more yen back home. (The new factories and operations increase the GDP, or gross domestic product, which measures the value of all goods and services produced within a country's borders regardless of company ownership. GDP is the number economists use to measure the economy's health. Even in a foreign-owned factory, the jobs that are created are American, and the money earned by workers here will largely be spent within the country. Consumer-led recovery: In this type of recovery, the government borrows money to give to American consumers with the belief that they will spend it on American goods and services. This was the logic behind the February stimulus bill, in which the government provided checks directly to households. Unfortunately, rather than taking the money and immediately spending it, many consumers put the money into their bank accounts or used it to make credit card or loan payments. Nevertheless, because consumer spending accounts for over 70 percent of American economic activity, policymakers continue to consider this as part of a fix. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 8 Dec 2008 | 3:12 pm CorrelationsWe don't do financial advice here at Planet Money, but this story in the Times was interesting in a broader sense. Typical advice for investing is that you should diversify. Don't buy just one type of stock. Buy different kinds, and bonds. The idea being that if stocks are plummeting, people are shifting their money somewhere else, like maybe bonds. So you lose on stocks, but you may gain on the bonds. But in times of crisis these relationships fall apart. As the quants put it, "Everything goes to 1" -- meaning that the normal correlations go out the window, and everything moves in lock step. In this case, downward. The New York Times ran the numbers to see how some typical portfolios would have done. A mixed stock and bond portfolio lost 27%. All domestic stocks? Worse, down 61%. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 8 Dec 2008 | 2:56 pm What's Causing the Crisis?Another Monday, another round of news, plus a deeper look at the Crisis from Simon Johnson's crew at Baseline Scenario. (Hat tip of the day goes to @saalon.) From Baseline Scenario: What's causing the crisis? (Part 1, part 2) From the New York Times: Omens of a long recession/ Where were the credit ratings agencies? From the Financial Times: Company crashes set to hit record next year? From the Wall Street Journal: Economic-stimulus hopes rally indexes in Asia. From the LA Times: College application plans change as family budgets shrink/ Debt-laden Tribune Company explores possible bankruptcy filing. From the Chicago Tribune: Plant sit-in reaches fourth day. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 8 Dec 2008 | 2:44 pm Hard Times (Still)It's not just Sam Zell, of course. The entire newspaper industry is under siege.The plight of print is underscored by the news that the New York Times Co. is planning to borrow as much as $225 million against its headquarter building in midtown Manhattan. The newspaper company has a $400 million revolving line of credit that expires in May. The move comes several weeks after the company slashed its dividend in an effort to conserve cash. New York Times Co. owns 58 percent of the Renzo Piano-designed building (floors 2 through 27; Forest City Ranter owns the rest of the 52-story building). The company has been criticized for putting too much of its capital into the headquarters at the peak of a Manhattan commercial real estate boom. Still, the New York Times Building, which opened last year, is nearly at full capacity, with a number of law firms like Goodwin Proctor, Seyfarth Shaw, and others among the tenants. Related Links Zell's Sell NYT: We Love the Credit Crisis! Late Breaks: Time Inc., Tribune, more Source: Portfolio.com: Top 5 | 8 Dec 2008 | 2:30 pm Calling Egypt - Positioning for Call Center Market Share
The other night while I was preparing dinner, a man with a heavy Indian accent called me. ‘Mike Johnson’ wanted to know if I needed satellite dish service. Most people I know have become accustomed to making calls to or receiving calls from offshore call centers. We even joke about it. But while the way some companies would like us to believe their customer service or sales reps are just down the road is comical, the offshore call center business is huge. According to the American Chamber of Commerce in Egypt, the industry is bringing in revenue of over $76 billion. That’s a lot of dialing. Egypt Emerges as an Outsourcing DestinationIn 2008 the National Outsourcing Association named Egypt the Outsourcing Destination of the Year. The judges stated Egypt’s language skills, young population, and growing list of global sourcing investments as reasons for its win. The country is becoming an increasingly popular offshore destination for European companies and many multinational companies are taking a chance on Egypt’s new and improved business environment, including Vodafone, IBM, Microsoft, and Valeo. Some of that business is call centers and Egypt is banking on more. Attracting Call Center BusinessAccording to London-based research company Datamonitor, Egypt’s call center industry is growing at over 50% a year. So how did Egypt do it? Branding is a significant component. Egypt’s business and governmental leaders have been busy promoting the country as the place for offshore services. Among the benefits touted:
But none of the effort could amount to much without governmental support. Egypt’s initial success is due in large part to a government that understands the importance of the call center business. They’ve worked to provide an adequate regulatory framework, facilitated participation in international exhibitions, and created a system of accreditation. What’s Egypt Got Over India?The US accounts for well over half of offshore business clients. And the US relationship with India is established. While Egypt may capture some of that market, the focus is on European companies, where Egypt has a marked advantages over India. It’s only a three or four hour flight from most destinations in Europe, versus 18 or 19 hours of flying to get to India. And then there’s the language. US customers have grown used to a thick foreign accent, as long as they speak our language. Europe is multi-lingual. Not only do Egyptians speak in a more neutral accent, they also have the educational infrastructure to offer services in Arabic, English, French, German, Spanish, Italian, Greek, Portuguese and Russian. This is a huge advantage for multilingual markets such as Europe. India primarily offers English. If the title is any indication, Egypt has succeeded. The challenge now is to keep up with demand. Image Credit: Vlima.com, Flickr Source: Business Pundit | 8 Dec 2008 | 1:57 pm Who Should Run G.M.?There is a growing consensus that Rick Wagoner needs to be ousted as chief executive of General Motors.That may be the price of at least $15 billion in federal aid that may come for the automakers this week. Senator Christopher Dodd of Connecticut said on Face the Nation on Sunday that Wagoner would have to "move on." "If you're really going to restructure this, you've got to bring in a new team to do this," he said. The president-elect, Barack Obama, appeared to support that view on Meet the Press, calling for an end to "the head-in-the-sand approach to the auto industry." Replacing Wagoner now won't solve anything immediately. But it would be a powerful signal that the company will need to make radical changes in order to survive. In any case, he has been at the helm far too long. For eight years he has presided over a deep deterioration of the company's business and a plunge in its stock price. The obvious inside candidate would be G.M.'s president and chief operating officer, Fritz Henderson. Yet for real change to happen, his successor would have to be an outsider. But who? Here are a few possible candidates for the toughest job in America today: Jack Welch. A troubled American corporate icon needs an iconic C.E.O. Welch's name is among the most intriguing to be floated in recent days. He obviously has experience running a giant, complex, and partly unionized company. Accepting the challenge would allow him to cement his reputation as the greatest American C.E.O. of our time, a reputation that has taken a bit of a dent as General Electric struggles under his handpicked successor, Jeff Immelt. Lewis Campbell. The chief executive of Textron also has experience running a manufacturing conglomerate. Like Welch, Campbell is a practitioner of Six Sigma. And Campbell is a former G.M. executive, so the learning curve would not be as steep. Mark Fields. The president of Ford's Americas division, who earlier helped Mazda with its turnaround, has been seen as a possible Ford C.E.O. someday. But the way things are going, there may not be a Detroit automaker to run in the future, so he could be tempted. And G.M. could hurt a rival at the same time, but such a raid would probably not make Washington happy. Tim Cook. One of the true American-product success stories has been Apple. That led Thomas Friedman to suggest last month, somewhat mischievously, that Steve Jobs should run G.M. But the Apple exec more appropriate to an automaker would be Cook, Apple's chief operating officer and the logistics and operations mastermind at the company. Think different, think very different. Carlos Ghosn. The chief of Renault and Nissan is the only rock star in the industry. So why would he risk his gilded reputation as a turnaround whiz with a possible lost cause like G.M. Jeffrey Sonnenfeld, a Yale business school professor, tells the Wall Street Journal that financial incentives may do the trick. Ego might be the clincher to any deal. For there are no other mountains left for Ghosn to climb, at least no automotive ones. He will never run Toyota. If he succeeds in turning around G.M., he would be such a hero that the city of Detroit should consider renaming itself in his honor. Who do you think should run G.M.? Related Links Jump-Starting a Bailout Detroit Needs a Miracle Motor Skills Source: Portfolio.com: Top 5 | 8 Dec 2008 | 1:30 pm Factory Sit-In a Reminder to Treat Employees Fairly
The New York Times reports on the fourth day of a Chicago factory sit-in: Workers laid off Friday from Republic Windows and Doors, who for years assembled vinyl windows and sliding doors here, said they would not leave, even after company officials announced that the factory was closing. Some of the plant’s 250 workers stayed all night, all weekend, in what they were calling an occupation of the factory. Their sharpest criticisms were aimed at their former bosses, who they said gave them only three days’ notice of the closing, and the company’s creditors. But their anger stretched broadly to the government’s costly corporate bailout plans, which, they argued, had forgotten about regular workers. The workers, members of Local 1110 of the United Electrical, Radio and Machine Workers of America, said they were owed vacation and severance pay and were not given the 60 days of notice generally required by federal law when companies make layoffs. Some of them are blaming Bank of America for not being able to provide payroll money. If B of A hadn’t kept its bailout money to itself, the theory goes, then the workers would have gotten their due. I can’t tell who’s at fault here, but the union and management did sign a contract and should honor it. This story makes me realize how lucky these people were to belong to a union in the first place. They received $14/hour + medical benefits + retirement benefits. How many other corporations–including those employing white-collar workers–offered those combined perks, plus the perceived ability to stage a sit-in if contracts are violated? I don’t see Sun Microsystems workers occupying their empty offices. As a white-collar functionary, you’re either salaried (with perks, but potentially low hourly pay, depending on your work demands) or a contractor (sans perks). This classification does not include executives. Union workers retain rights that many other workers never had access to. Old-school unions are unsustainably expensive and inflexible, but worker rights in some form need to remain in place. For that reason, I hope the Chicago workers keep sitting there, reminding everyone that not everyone who has been treated unjustly takes it lying down. Source: Business Pundit | 8 Dec 2008 | 1:22 pm
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