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Fed cuts rate to 'virtually zero'Read Federal Reserve statement in fullSource: Latest Business News from Times Online | 17 Dec 2008 | 7:24 pm No Goldman Reaction for Morgan Stanley (GS, MS)
Morgan Stanley is getting the cold shoulder from Wall Street this morning. The broker-turned-banker posted a loss of $2.37 billion for the quarter. The loss is -$2.34 EPS rather than the expected First Call loss estimate of -$0.34. Yep, a $2-handle loss rather than a slight $0-handle loss. The broker took writedowns and losses. Fixed income lost $1.2 billion, yet this is much lower than last year because it now has lower mortgage exposure. It took another $1.1 billion in charges from trading and other sales losses and $1.8 billion in real estate fund losses. Amazingly enough, the firm was able to post a profit for the full year just like its cousin Goldman Sachs did yesterday. Morgan Stanley shares are down 4% at $15.45 in pre-market trading.
Jon C. Ogg Source: 24/7 Wall St. | 17 Dec 2008 | 2:05 pm Morgan Stanley post $2.2bn fourth quarter lossMorgan Stanley reported a fourth quarter loss of $2.2bn this morning, or $2.24 per share, leading to year-end totals of $1.8bn in profits and $1.54 in earnings per shareSource: Financial Times - US homepage | 17 Dec 2008 | 2:01 pm NewsWatch: Asian stocks end up, but off highs, in volatile sessionAsia markets give up most of their early gains Wednesday, with initial enthusiasm over the U.S. Federal Reserve’s steep interest rate cut fizzling as investors consider a bleak global economic outlook and concerns about corporate earnings.Source: MarketWatch.com - Top Stories | 17 Dec 2008 | 2:00 pm OPEC eyes production cut of 2 million barrels a dayNEW YORK (MarketWatch) -- The Organization of Petroleum Exporting Countries began a key meeting on Wednesday with the Saudi oil minister saying before the start that the cartels members have already agreed on a cut of about 2 million barrels a day.Source: MarketWatch.com - Top Stories | 17 Dec 2008 | 1:58 pm OPEC ready for deepest oil cut to rescue pricesORAN, Algeria (Reuters) - OPEC oil ministers met on Wednesday to remove a record 2 million barrels per day from oil markets in a race to balance supply with the world's rapidly crumbling demand for fuel.Source: Reuters: Business News | 17 Dec 2008 | 1:56 pm Wall Street set to open lower as Fed euphoria fadesNEW YORK (Reuters) - Stocks were poised for a lower open on Wednesday as initial enthusiasm over the Federal Reserve's interest rate cut faded and investors focused on weak financial results and the dismal economic outlook.Source: Reuters: Business News | 17 Dec 2008 | 1:54 pm Wall Street set to open lower as Fed euphoria fades (Reuters)
Source: Yahoo! News: Business | 17 Dec 2008 | 1:54 pm Wall Street set to open lower as Fed euphoria fades (Reuters)
Source: Yahoo! News: Stock Markets News | 17 Dec 2008 | 1:54 pm Stock futures fall as rate cut enthusiasm wanes (AP)
Source: Yahoo! News: Stock Markets News | 17 Dec 2008 | 1:53 pm Oil slips towards $43 as OPEC deal is awaitedLONDON (Reuters) - Oil slipped toward $43 on Wednesday as the market awaited an announcement from an OPEC meeting in Algeria widely expected to agree a big cut in production in an attempt to halt a collapse in oil prices.Source: Reuters: Business News | 17 Dec 2008 | 1:53 pm Wall St set to fall as rate cut euphoria fizzlesWall Street stocks were set to retreat from their monthly high as euphoria over the Federal Reserve's interest rate cut to virtually zero fadedSource: Financial Times - US homepage | 17 Dec 2008 | 1:50 pm General Mills posts lower quarterly profit, hikes full-year viewSAN FRANCISCO (MarketWatch) -- General Mills posted a 3% decline in quarterly profit Wednesday, but its adjusted results beat expectations and the cereal maker raised its full-year forecast.Source: MarketWatch.com - Top Stories | 17 Dec 2008 | 1:50 pm China announces stimulus for real estate sectorNEW YORK (MarketWatch) -- China's Cabinet announced plans Wednesday to launch a new real-estate stimulus package of tax breaks and other measures to boost the sector, according to the state-run Xinhua news agency.Source: MarketWatch.com - Top Stories | 17 Dec 2008 | 1:47 pm Adobe posts higher profit, sticks to forecastWASHINGTON (MarketWatch) -- Adobe Systems Inc. on Tuesday met already-lowered expectations for its fiscal fourth quarter and stuck to its forecast for the current quarter even as the software company hunkers down for a trying period of slowing sales and job cuts.Source: MarketWatch.com - Top Stories | 17 Dec 2008 | 1:45 pm Newell cuts outlook and jobsNEW YORK (Reuters) - Newell Rubbermaid slashed its fourth-quarter and 2008 earnings outlook on Wednesday, blaming a deep deterioration in the global economy, and said it would cut up to 1,000 jobs to combat the downturn.Source: Reuters: Business News | 17 Dec 2008 | 1:44 pm Morgan Stanley posts loss on writedownsNEW YORK (Reuters) - Morgan Stanley reported a much wider-than-expected quarterly loss as the credit crisis generated more writedowns and slashed fees from investment banking and brokerage.Source: Reuters: Business News | 17 Dec 2008 | 1:43 pm Before the Bell: Morgan Stanley, OPEC, Libor in focusStock index futures were lower Wednesday, indicating U.S. stocks might give up some of the strong gains recorded a day earlier following the Federal Reserve's decision to cut interest rates to historic lows and to flood the financial system with money.Source: MarketWatch.com - Top Stories | 17 Dec 2008 | 1:41 pm OPEC ready for deepest oil cut to rescue prices (Reuters)
Source: Yahoo! News: Business | 17 Dec 2008 | 1:39 pm World markets mixed after Fed's historic rate cut (AP)
Source: Yahoo! News: Stock Markets News | 17 Dec 2008 | 1:37 pm Top 10 Pre-Market Analyst Upgrades & Downgrades (ACTI, BCE, KSU, MYL, TEVA, AXP, AAPL, ROCK, SNV, TKC)
Jon C. Ogg Source: 24/7 Wall St. | 17 Dec 2008 | 1:37 pm Morgan Stanley posts loss on writedowns (Reuters)
Source: Yahoo! News: Business | 17 Dec 2008 | 1:34 pm Small car safety: 8 get ratedIn the latest round of Insurance Institute crash tests, none of the small cars they tested earned top marks, but some still did well.Source: Business and financial news - CNNMoney.com | 17 Dec 2008 | 1:32 pm Naimi says Opec agrees record output cutSaudi Arabia said the oil cartel had agreed in principle to cut a record amount of production to help counter falling demand, but the oil price fell on doubts that the reduction would be enactedSource: Financial Times - US homepage | 17 Dec 2008 | 1:32 pm Morgan Stanley suffers $2.3 billion lossMorgan Stanley reported a massive $2.3 billion loss for the fourth quarter Tuesday, far worse than what analysts were expecting.Source: Business and financial news - CNNMoney.com | 17 Dec 2008 | 1:32 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 | 17 Dec 2008 | 1:31 pm Apple shares fall 4 percent on CEO health, product worriesNEW YORK (Reuters) - Apple Inc's shares fell almost 4 percent on Wednesday on concerns about the health of its chief executive and whether the company had any new products planned after it said Steve Jobs would not deliver the keynote speech at its upcoming technology show.Source: Reuters: Business News | 17 Dec 2008 | 1:29 pm Apple shares fall 4 percent on CEO health, product worries (Reuters)
Source: Yahoo! News: Business | 17 Dec 2008 | 1:28 pm Pound dives on prospect of steep UK rate cutSterling tumbled to a new low against the euro today after it emerged that the Bank of England discussed making a steeper interest rate cut while analysts suggested the UK will follow the US Federal Reserve by making a sharp reduction to borrowing costs.Source: Latest Business News from Times Online | 17 Dec 2008 | 1:28 pm Stocks headed for a retreatU.S. stock futures tumbled Wednesday as investors caught their breath after the previous session's rally, and Morgan Stanley reported a staggering loss.Source: Business and financial news - CNNMoney.com | 17 Dec 2008 | 1:27 pm SEC chairman says agency failed to probe Madoff (AP)
Source: Yahoo! News: Stock Markets News | 17 Dec 2008 | 1:27 pm As Recession Visits, China's Middle Class Riots
During the last century, Texas was long on land and short on lawmen. That means that each dispute got one constable. The Chinese should be so lucky. Unrest is becoming so great among the middle class that the central government may have to turn out the entire Red Army. Cities facing strikes and unrest are spread across hundreds of miles, distant from Shanghai and Beijing. According to The Washington Post, taxi drivers brought traffic in Chongqing, a city of 31 million, to a crawl. The wanted a modest increase in pay. "China's government has long feared the rise of labor movements, banning unauthorized unions and arresting those who speak out for workers' rights. The strikes, driven in part by China's economic downturn, have caught officials off guard." It is going to get worse. Inflation in China has run about 10% this year, with the price of food up by closer to 15%. In the meantime, slowing demand for exports is leading to factory closings and a flattening in wages. Some of the signs of a recession are already beginning to appear. Car sales, which have been up sharply for over a decade, fell in each of the last two months. The average member of the Chinese middle class does not look much different from his counterpart in the US, at least no economically. He has to fear that his employment will end. Even if he remains in his job, a stagnation of pay levels is leaving him unable to pay for basic living costs, with luxuries out of the question. The fall-off in consumer spending makes the Chinese economic problem worse as each month passes. Much of what the Chinese buy is made in China. As the ability of citizens to use goods and services drops, so does overall national production. It moves the economy into a flat spin. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Dec 2008 | 1:16 pm General Mills profit tops estimatesCHICAGO (Reuters) - General Mills Inc posted a higher-than-expected quarterly profit and raised its full-year forecast on Wednesday, helped by cost cuts and investments in marketing and new products.Source: Reuters: Business News | 17 Dec 2008 | 1:15 pm Woolworths 'may be gone in weeks'Administrators at Woolworths are due to give a statement on its future later, amid speculation its stores are to be closed by early next year.Source: BBC News | Business | World Edition | 17 Dec 2008 | 1:12 pm Dollar falls after Fed slashes rates (Reuters)
Source: Yahoo! News: Stock Markets News | 17 Dec 2008 | 1:04 pm Sports Direct shares up 10% as profits riseSports Direct, the group controlled by Mike Ashley, the billionaire Newcastle United owner, offered some rare retail cheer this morning by posting results that outshone its embattled sportswear rivals.Source: Latest Business News from Times Online | 17 Dec 2008 | 1:04 pm Yale Beats HarvardYale has estimated its endowment’s holdings of marketable securities fell at least 13.4 percent since July 1.That would be a better performance than that at Harvard’s endowment, which said earlier this month that its value had fallen 22 percent. Still, when including private equity and real estate assets, Yale is down 25 percent in the first half of its fiscal year. But the declines should not seen simply as examples of august institutions being battered by the financial crisis. Yale, under its chief investment officer, David Swensen, and Harvard, have in the last decade diversified their holdings and gone into alternative investments. Their results have been stellar and even in a tumultuous year, they are outperforming the broader market. There is a bigger picture here, and amid the crisis and noise of the day’s trading, we should not forget about investing for a longer time frame. Richard Levin, the president of Yale, sent a calm, clear letter that emphasized the strength of the endowment: “It is not our custom to announce the mid-year status of our endowment portfolio, but these unusual circumstances call for a departure from custom. Thanks to the outstanding work of David Swensen and his colleagues in the Investments Office, our endowment has declined significantly less than market indices. Taking into account only the value of marketable securities, our investment return from July 1 through October 31 was a negative 13.4 percent But this does not tell the whole story. Our endowment is invested in both marketable securities (chiefly stocks and bonds) and “illiquid” assets, such as real estate and private equity investments that are not traded on a daily basis and are difficult to value with precision. The value of our marketable securities has declined further since October 31, and, even earlier, we began to establish reserves in anticipation of substantial decreases (“write-downs”) in the value of our private equity and real estate investments. As a consequence, our best estimate of the endowment’s value today is $17 billion, a decline of 25 percent since June 30, 2008, and this is the value we are using for purposes of budget planning. We are also assuming that the endowment will remain flat during the 2009-10 academic year and resume growth after June 30, 2010, at the rate that we have historically used in our budget modeling.” Related Links Copying Harvard Robert Shiller Murdoch Papers Spar Over Yahoo Buyout Source: Portfolio.com: Top 5 | 17 Dec 2008 | 1:00 pm Honda slashes its profit forecastJapanese carmaker Honda cuts its annual profit forecast by 62% amid falling global car demand and the soaring yen.Source: BBC News | Business | World Edition | 17 Dec 2008 | 12:59 pm Global markets mixed after steep US interest rate cut (AFP)
Source: Yahoo! News: Stock Markets News | 17 Dec 2008 | 12:52 pm Refinancings continue to surge, Mortgage Bankers' data showFilings to refinance existing mortgages pace a seasonally adjusted 2.9% increase in overall mortgage applications last week compared to the prior week, according to the Mortgage Bankers Association’s latest survey.Source: MarketWatch.com - Top Stories | 17 Dec 2008 | 12:49 pm Oil drops despite looming OPEC cutOil prices fell Wednesday despite a claim by the Saudi Arabian oil minister that OPEC had agreed to cut production by 2 million barrels a day. Non-OPEC members Russia and Azerbaijan said they would cut as well.Source: Business and financial news - CNNMoney.com | 17 Dec 2008 | 12:46 pm FTSE-100 down 8.21 at 4,300.87 (AP)AP - Share prices on the London Stock Exchange were lower at midday Wednesday.Source: Yahoo! News: Stock Markets News | 17 Dec 2008 | 12:39 pm Currencies: Dollar steadies after post-Fed slideThe dollar remained under pressure on Wednesday, a day after the Federal Reserve decided to cut interest rates to historic lows and expand a program of extraordinary lending and other measures to lift the U.S. economy out of recession.Source: MarketWatch.com - Top Stories | 17 Dec 2008 | 12:34 pm Dead mall problem: Is America 'overstored'?As the recession leaves more retail casualties in its wake, experts warn that rising store bankruptcies and mall closures could have devastating economic consequences for entire communities.Source: Business and financial news - CNNMoney.com | 17 Dec 2008 | 12:33 pm Movers & Shakers: Wednesday's biggest gaining and declining stocksAmong the companies whose shares are expected to see active trade in Wednesday’s session are Adobe, Citi, General Mills, Hovnanian, Isis Pharma, Liz Claiborne and Silicon Storage.Source: MarketWatch.com - Top Stories | 17 Dec 2008 | 12:31 pm S.E.C.: Our BadThe Securities and Exchange Commission has issued an extraordinary mea culpa, acknowledging that it missed many warning flags about Bernard Madoff, the Wall Street executive who has been accused of running a $50 billion Ponzi scheme."The commission has learned that credible and specific allegations regarding Mr. Madoff's financial wrongdoing, going back to at least 1999, were repeatedly brought to the attention of S.E.C. staff, but were never recommended to the commission for action," Christopher Cox, the chairman of the S.E.C. said. "I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them." The statement by Cox is startling, coming from an official of an administration that has steadfastly refused to apologize or even explain any number of fiascoes: Iraq, Hurricane Katrina, and the economy. An honest reappraisal of failure is a refreshing change, even though it probably will not provide much solace to the investors who lost billions of dollars. Yet there is a strategic reason for Cox's admission. With virtually all of the S.E.C.'s credibility shot—after the near collapse of Bear Stearns and the financial turmoil this year—the S.E.C. chairman has only one card left to play to win any support: that of outraged victim himself. In trying to salvage the agency, to ensure that it has a major role and adequate powers in any regulatory overhaul to come, Cox has to eat humble pie in public. And the S.E.C. needs to clean house. Ultimately, the agency, as Megan Barnett argued recently, will have to start over and rebuild how it oversees markets and how it protects investors. The statement came hours after Madoff met with federal authorities to describe the details of his scheme, the New York Times reports. The S.E.C. also said that it would conduct an internal review that will include "all staff contact and relationships with the Madoff family and firm." A niece of Madoff is married to a former S.E.C. compliance lawyer. A former chairman of the S.E.C., Arthur Levitt, told Bloomberg Radio today that "the system is obviously flawed, and it's got to be rethought in terms of how investors can be protected." Cox, he said, "is doing the right thing" by calling for an internal review. Related Links Screaming Booyah! at the SEC When Regulators Panic Short Circuiting the Shorts Source: Portfolio.com: Top 5 | 17 Dec 2008 | 12:30 pm SEC's Cox admits 'failures' over MadoffThe government commission tasked with protecting investors has launched an internal investigation into how what may have been the largest Ponzi scheme in history was able to continue unchecked for at least 10 years.Source: Business and financial news - CNNMoney.com | 17 Dec 2008 | 12:22 pm Refinancing drives mortgage applications up: MBA (Reuters)Reuters - Mortgage applications climbed last week, a trade group said on Wednesday, driven by demand for loans to refinance as government interventions helped drive down borrowing costs.Source: Yahoo! News: Business | 17 Dec 2008 | 12:20 pm Bank considered bigger rate cutThe Bank of England's rate-setting body voted 9-0 to cut rates to 2% this month and considered a bigger move.Source: BBC News | Business | World Edition | 17 Dec 2008 | 12:14 pm Public mood darkens on job fears: Reuters pollWASHINGTON (Reuters) - A recession-mired economy and growing job insecurity have shaken American confidence in the future despite an upbeat view of President-elect Barack Obama's performance, according to a Reuters/Zogby poll released on Wednesday.Source: Reuters: Business News | 17 Dec 2008 | 12:13 pm Madoff in court as Wall Street fraud shakes world finance (AFP)
Source: Yahoo! News: Stock Markets News | 17 Dec 2008 | 12:13 pm Public mood darkens on job fears: Reuters poll (Reuters)
Source: Yahoo! News: Business | 17 Dec 2008 | 12:06 pm Kiss the dollar rally goodbyeIt wasn't that long ago that the dollar was strengthening against the once-mighty euro, leading anyone that could still afford a plane ticket to Paris to celebrate that they could suddenly get more baguettes for their buck.Source: Business and financial news - CNNMoney.com | 17 Dec 2008 | 11:49 am Retail tracker raises holiday view on Wal-MartSAN FRANCISCO (Reuters) - A leading consumer research firm raised its holiday retail sales outlook on Wednesday, due to what it called Wal-Mart's "domination" of the retail industry with its bargain-basement deals.Source: Reuters: Business News | 17 Dec 2008 | 11:44 am Low interest ratesWhat can the Fed do next to help the ailing US economy?Source: BBC News | Business | World Edition | 17 Dec 2008 | 11:39 am Auto rescue being worked on quickly: PaulsonWASHINGTON (Reuters) - A government bailout for automakers was being assembled as quickly and carefully as possible, Treasury Secretary Henry Paulson said on Tuesday as a new ratings report showed that bankruptcy was the most likely restructuring scenario for the industry.Source: Reuters: Business News | 17 Dec 2008 | 11:38 am Citigroup Reorganization: Playing With Toy Soldiers
Citi has shown that it has bad luck with improving earnings and efficiencies by firing people and trying to reorganize its divisions. This move will probably not be much different. According to the FT, "People close to the situation said the creation of the new unit was aimed at increasing Citi’s ability to sell products ranging from loans and trading services to advice on takeovers and financing to large companies." Why weren't Citi executives making certain that those functions were being handled well before? The news gets to the heart of what is wrong at the big bank. It clearly has a large set of independent "kingdoms" which grew up in the firm over time. But, the idea that the people running those units were not doing their best is preposterous, or Citi was run more badly than is already imagined. Merging groups which should have been doing their jobs and doing them well hardly comes close to addressing the bank's inability to turn itself around. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Dec 2008 | 11:36 am Opec plans record oil output cutThe oil cartel Opec is set to agree to a record cut in oil output of two million barrels a day, says Saudi Arabia.Source: BBC News | Business | World Edition | 17 Dec 2008 | 11:32 am Where in the world to put your moneyAs bad as the year has been for U.S. equities, the scene around the world has been even more harrowing. Morgan Stanley Capital International's index of 21 non-U.S. markets is down 49% through Dec. 1, 2008, compared with a 43% slide in the S&P 500. But the real devastation has occurred in once-hot emerging markets. China's CSI index of 300 publicly traded stocks has fallen 63% for the year. The MICEX index of 30 of Russia's most liquid stocks is down a staggering 73%.Source: Business and financial news - CNNMoney.com | 17 Dec 2008 | 11:32 am Who Made All The Money That Madoff Lost?
A more simple explanation is that he lost the money trade after trade, year after year. He took in more cash from investors and paid a little out in redemptions. When redemptions got too large, he confessed. One of the rules on Wall St. is that when someone loses money, someone else makes it. Madoff may not have lost $50 billion. No one knows that exact amount. Some news reports say that experts can account for about $35 billion. The nice thing about being on the other side of Madoff's trades is that those who profited will not have to give the money back. Some of the people who took their money out of Madoff's fund long ago may have to share that cash with the people who stayed and got burned. But, when Madoff made billions of dollars in bad financial bets, and that is one explanation of what happened, some group of institutions on Wall St. benefited. If Madoff had kept his trades in the tens of millions dollars each, he probably would not have aroused any suspicion. Madoff may have destroyed the value of his funds for those who trusted him. In the meantime, he probably made some other people remarkably rich. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Dec 2008 | 11:23 am Retail tracker raises holiday view on Wal-Mart (Reuters)
Source: Yahoo! News: Business | 17 Dec 2008 | 11:22 am Savills issues second profit warningTempus: Dry rotSource: Latest Business News from Times Online | 17 Dec 2008 | 11:17 am For The Fed "There are no second acts in American lives."
What happens next is that the recession stretches into 2010 or longer and access to cheap capital does not mean anything. The Fed buys debt in the open market but the credit markets remain in a quite panic as unemployment spikes and housing prices fall. Banks take more massive write-offs and lending does not improve. The life of the country goes to hell. The reason Bernanke's plan may work is that it is his last plan and he knows it. His legacy and the financial fate of the country are on the line. He can put nearly limitless amounts of cash into the system. That has to work. Central government monetary policy has failed before, many times in America and many more times around the world, recently and in centuries past. Bernamke are reached the last stop. He will know if he has done enough before spring arrives. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Dec 2008 | 11:12 am HK index up 2.2 percent on Fed's rate cut (AP)AP - Hong Kong's main stock index gained more than 2 percent Wednesday, leading Asia's advance after the Federal Reserve cut its key interest rate to a record low.Source: Yahoo! News: Business | 17 Dec 2008 | 11:11 am HK index up 2.2 percent on Fed's rate cut (AP)AP - Hong Kong's main stock index gained more than 2 percent Wednesday, leading Asia's advance after the Federal Reserve cut its key interest rate to a record low.Source: Yahoo! News: Stock Markets News | 17 Dec 2008 | 11:11 am Unemployment increases by 137,000The number of people out of work rose by 137,000 to 1.86 million in the three months to October, official figures show.Source: BBC News | Business | World Edition | 17 Dec 2008 | 11:09 am EU court: Ryanair won't have to pay back subsidyBudget airline Ryanair may no longer have to pay back a euro4.5 million ($6.16 million) subsidy to the Belgian state after a court ruled Thursday against an EU order that had required it toSource: Infocious RSS raw feed - channel BNewsBusiness | 17 Dec 2008 | 11:09 am Baucus urges Hanoi to lift restrictions on US beefSenator Max Baucus on Wednesday urged Vietnam's government to lift "unscientific" restrictions on U.S. beef imports and to crackdown on copyright violations. "Vietnam continues to...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Dec 2008 | 11:08 am US rate slash boosts stocksThe US Federal Reserve's interest rate slash to virtually zero boosted stocks Wednesday, but a Wall Street baron's court appearance over a massive scam spotlighted heavy potential losses.Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Dec 2008 | 11:02 am OPEC Ready To Trump Deflation
The cartel says it will cut production by two million barrels a day, or about 5% of the world's capacity. Russia will probably go along with that so Putin does not lose his job. OPEC is faced with a sharp drop in oil demand. Its September price increase was greeted with the cost of crude falling even faster than before. But, the member states are in a tough spot. If the December cut does not do the trick, there will be more in January and on and on until supply is well below demand. Until oil is back above $70. One of the biggest concerns the Fed has is that the US is at risk of entering a period of deflation. Consumer price were down two months in a row. For people counting, the has not happened since 1947. The November drop was in large part due to a 17% plunge in fuel prices. According to The New York Times, "there is good reason to fear deflation. Once prices start to fall, many consumers may decide to reduce their spending even more than they already have. Why buy a minivan today, after all, if it’s going to be cheaper in a few months?" The worst problem with deflation is the government policy usually cannot stop it. The Japanese found that out the hard way two decades ago. It cost them ten years of economic growth. Six months ago, the administration and consumers were praying for lower oil prices. Bush went to the king in Saudi Arabia and begged for more supply. Now the king will not get his new city. He will keep cutting production and inflation may well return to the US pinching the consumer hard during a deep recession. What a relief. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Dec 2008 | 11:02 am German annual inflation eases to 1.4 pct in NovGerman consumer prices fell from October to November, causing the annual inflation rate to ease as a result of lower oil prices. The Federal Statistical Office said Wednesday that the...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Dec 2008 | 10:59 am Wall Street futures fall ahead of Morgan Stanley figures(Reuters) - Stock index futures pointed to a lower open on Wall Street on Wednesday ahead of Morgan Stanley figures.Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Dec 2008 | 10:55 am Opec set for biggest ever cut to oil suppliesOpec is today set to announce its biggest ever oil production cut as it seeks to defend the price of oil against further falls and prevent a growing global supply glut.Source: Latest Business News from Times Online | 17 Dec 2008 | 10:52 am Kyrgyz restores BBC programmingThe BBC has resumed local language broadcasts in Kyrgyzstan two weeks after having its programming pulled off the air over an alleged breach of contractual obligations, the British station...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Dec 2008 | 10:48 am British pound tumbles under 1.10 euros for first timeThe British pound plunged on Wednesday to another record low point against the euro, extending its recent weakness after more gloomy economic data sparked renewed speculation about more...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Dec 2008 | 10:48 am UPDATE 1-German Merck curbs output as demand dropsFRANKFURT, Dec 17 (Reuters) - German drugs and chemicals group Merck will shutter several plants for weeks in the first half of next year to address a collapse in demand, the company said on Wednesday,...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Dec 2008 | 10:43 am Forgiving The SEC
Cox also began the customary witch hunt. Those who missed the signals about the fraud must now face dismissals or public floggings. According to The Wall Street Journal, "The review will include whether relationships between SEC officials and Mr. Madoff or his family members had any impact on the agency's oversight." The public is to believe that there is a conspiracy going on in the shadows of the agency. People married to other people helped cover up Madoff's actions. Perhaps there were millions of dollars of bribes paid to important officials who took the money to build new vacation homes and buy expensive cars. Probably not. A look at what has been required of the agency over the last decade is at least a partial explanation for its incompetence. The SEC has been forced to work with the Justice Department and state attorneys general to look at everything from the Bernie Ebbers fraud at Worldcom to the internet research scandal on Wall St. to the options backdating problems at tech companies. Each investigation took thousands of man hours by attorneys not skilled enough to become partners in major law firms. Dunces in suits. Going back to Arthur Levitt and Bill Donaldson, old Wall St. hands who headed the SEC, the agency has said it was underfunded and poorly staffed. It has also been dragged from pillar to post to handle one crisis in the corporate and financial community or another. The SEC has been an organization of incompetents who have been too busy to handle even a modest amount of the ground that is their jurisdiction. And, Madoff fooled a lot of people with more brains that the agency has. The SEC walks up Capitol Hill each year to ask for more money. Each year Congress tells it to take a hike. The Madoff disaster may belong in part at the agency's feet but there is a lot more blame than that to go around. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Dec 2008 | 10:41 am South Korea's wobbly won shows signs of stabilityCould the worst be over for the South Korean won? The embattled currency rose to a six-week high Wednesday as local stocks gained modestly following a historic rate cut by the U.S....Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Dec 2008 | 10:41 am OPEC to agree to cut of two million barrels: Saudi ministerOPEC is likely to agree to a record cut in oil production of two million barrels per day at a meeting here on Wednesday, the Saudi Arabian oil minster said. "What we will...Source: Infocious RSS raw feed - channel BNewsBusiness | 17 Dec 2008 | 10:36 am As Apple (AAPL) Pulls From Macworld, Its Shareholders Miss The Point
As Freud said, "Sometimes a cigar is just a cigar". It is not always a symbol for a part of the male anatomy. It is a smoke, a pleasure, something to do outside to get away from the family. Don't read between the lines. Apple investors should learn more from Freud. Trade shows are a poor place to do business. Most of the attendees drink too much and carry on in other ways. All the exhibits make it too distracting to have long meetings. Moving a big booth to a show and having people to answer questions twelve hours a day can costs hundreds of thousands of dollars. The Consumer Electronics Show, the largest trade show in the world, will be sparsely attended this year, at least by exhibitors. The recession will be part of that, but the event was always attended by a lot of tourists in Las Vegas who were never going to buy anything. Now, Apple (AAPL) says that this January's Macworld will be its last. Shares dropped over 5% on the late news. The other bit of concern came when the company announced that Steve Jobs would not be around for the last event. "Apple is reaching more people in more ways than ever before. The increasing popularity of Apple's Retail Stores, which more than 3.5 million people visit every week, and the Apple.com website enable Apple to directly reach more than a hundred million customers around the world in innovative new ways," the company said. Conspiracy buffs and most of the media will see some dark meaning to all this. But, that is a waste of time and effort. Trade shows were never a good way to help companies make money. On the Jobs front, the man may have nothing spectacular to debut. Since he never shows up in public without a new blockbuster product, he may be dodging the show because he has nothing to show there. Or, he will be on his winter vacation. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Dec 2008 | 10:18 am Dollar falls as Fed slashes ratesThe dollar falls against other currencies after the US Federal Reserve cut its key interest rate to the lowest level among the developed economies.Source: BBC News | Business | World Edition | 17 Dec 2008 | 10:09 am UK jobless claimants break one million barrierThe number of people claiming unemployment benefit has soared past one million for the first time in eight years, after rising at the fastest rate since 1991.Source: Latest Business News from Times Online | 17 Dec 2008 | 9:39 am Yen reaches 13-year high against the dollarThe currency's growing strength puts pressure on the Bank of Japan to cut interest rates from their current level 0.3 per cent to 0.1 per cent at its meeting that starts on ThursdaySource: Financial Times - US homepage | 17 Dec 2008 | 9:33 am Fed slashes key rate to near zeroIn its latest effort to try and stimulate the U.S. economy, the Federal Reserve cut its key interest rate to a range of between zero percent and 0.25%, and said it expects to keep rates near that unprecedented low level for some time to come.Source: Business and financial news - CNNMoney.com | 17 Dec 2008 | 9:29 am Who isn't a Madoff victim? The list is tellingAs the number of victims of Bernard Madoff, the criminally charged founder of the investment firm that bears his name, seems to multiply with the speed and force of a hurricane, certain types of investors seem to be absent -- so far, anyway -- from the casualty list. That's no accident, argues James Hedges IV of LJH Global Investments, a boutique firm that invests in hedge funds and private equity for high-net-worth families. In other words, score one for the big institutions that stick to standard rules rather than allowing their managers to invest on personal connections or hunches.Source: Business and financial news - CNNMoney.com | 17 Dec 2008 | 9:28 am Media Digest 12/17/2008 Reuters, WSJ, NYTimes, FT, Bloomberg
Reuters reports that OPEC will make the largest production cut in its history. Reuters reports that Madoff is trying to stay out of jail. Reuters reports that Paulson says a rescue plan for the car industry is being worked out quickly. Reuters writes that Steve Jobs will not deliver the keynote address at Macworld and Apple (AAPL) will not return to the event. Reuters report that Facebook is being used by lawyers as a way to serve papers. Reuters writes that the Fed cut will add pressure to bank margins. Reuters reports that those who pulled out of Madoff's fund early could face trouble holding onto their money. Reuters reports that Rio Tinto (RTP) is trying to sell assets to pay off $40 billion in debt. Reuters reports that Citigroup (C) will merge its corporate and investment banks. Reuters writes that Honda (HMC) is slashing output and Nissan is cutting production. Reuters reports that GE (GE) says its industrial profit could rise 5% in 2009. The Wall Street Journal reports that the SEC will probe its ties with Madoff. The Wall Street Journal reports that Calpers is trying to avoid one of the largest declines in it assets caused by risky land deals. The Wall Street Journal reports that the federal government is stepping up its oversight at Citigroup (C) including talking about the firm's future direction. The Wall Street Journal reports that GMAC has extended its deadline for a debt exchange once again in the hopes of getting bank status. The Wall Street Journal reports that Goldman Sachs (GS) reported its first loss since its IPO. The Wall Street Journal reports that Pilgrim"s Pride replaced its CEO. The Wall Street Journal reports that there will be no relief for chip companies next year. The Wall Street Journal reports that Microsoft (MSFT) is releasing products to target Adobe (ADBE). The Wall Street Journal reports that new research shows that Chapter 11 may not drive away car buyers. The Wall Street Journal reports that Best Buy (BBY) is scaling back as its results drop. The Wall Street Journal reports that Clearwire's (CLWR) WiMax roll-out is facing more hurdles. The Wall Street Journal reports that Obama is working on plans to overhaul the use of the TARP. The Wall Street Journal writes that the Fed cut caused investors to dump dollars. The Wall Street Journal reports that News Corp (NWS) will move to Nasdaq. The Wall Street Journal reports that the FDIC will increase the fees it charges banks. The Wall Street Journal reports that municipalities are pushing for building projects to keep up growth. The Wall Street Journal writes that refiners are cutting back on production of gas while selling assets. The Wall Street Journal reports that Bristol-Myers (BMY) plans more layoffs. The Wall Street Journal reports that Hovnanian (HOV) reported a large loss. The Wall Street Journal reports that new car registrations dropped 26% in Europe. The Wall Street Journal reports that the FDA will use computer models to test some drugs. The FT reports that low interest rates are hurting the repo market. The New York Times reports that retail sales dropped at a record rate. The New York Times writes that Yale's endowment dropped over 13%. Bloomberg reports that the dollar dropped to a 13 year low against the yen. Bloomberg reports that banks are showing no sign of easing credit even with a drop in rates from the Fed. Douglas A. McIntyre Source: 24/7 Wall St. | 17 Dec 2008 | 8:55 am Anglo American cuts spending plans by 50%Anglo American, the mining giant, is slashing next year’s capital expenditure in half to $4.5 billion ($£2.8 billion), following an "unprecedented" period of decline in commodity prices and the global slump in demand for new cars.Source: Latest Business News from Times Online | 17 Dec 2008 | 8:28 am Honda cuts profit forecast by 67%In spite of massive production cuts, the Japanese carmaker's inventories are piling up due to a shrinking global demand for cars, prompting it to issue its third profit warning this yearSource: Financial Times - US homepage | 17 Dec 2008 | 8:11 am BAA told to sell three airportsThe Competition Commission says it wants BAA to sell Gatwick, Stansted and Edinburgh airports to improve competition.Source: BBC News | Business | World Edition | 17 Dec 2008 | 8:08 am BUSINESS BRIEFINGPHARMACEUTICALS Bristol-Myers cuts jobsSource: Infocious RSS raw feed - channel BNPaperBusiness | 17 Dec 2008 | 8:00 am Jobs skips out as top speaker at MacworldApple's Steve Jobs has traditionally presented new products at the show in San Francisco. Apple says it is pulling back because of marketing changes. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Dec 2008 | 8:00 am Stocks surge as Federal Reserve pledges broad economic supportThe Dow climbs nearly 360 points while broader indexes jump more than 5% after the central bank slashes interest rates and says it will use 'all available tools' to jump-start the economy. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Dec 2008 | 8:00 am Falling prices have appeal to those with stagnant payThe Fed is worried about price declines. But for workers whose real wages haven't kept up with productivity gains, lower costs could look pretty good. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Dec 2008 | 8:00 am Southern California's median home price drops below $300,000The November median sales price falls 34.5% from a year earlier. Foreclosures continued to drag home prices to...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Dec 2008 | 8:00 am Hollywood figures snared in Bernard Madoff's alleged fraudScreenwriter Eric Roth, Steven Spielberg and Jeffrey Katzenberg are among those who suffered losses in the investment manager's alleged $50-billion Ponzi scheme. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Dec 2008 | 8:00 am Fired lawyer can pursue court case against AmgenDarrell G. Dotson says the pharmaceutical giant dismissed him for engaging in whistle-blower activities. A former...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Dec 2008 | 8:00 am General Electric to end quarterly earnings forecastsGeneral Electric Co. affirmed its 2008 outlook Tuesday but did not provide any specific earnings-per-share targets for next year and said it would drop its practice of giving quarterly earnings forecasts...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Dec 2008 | 8:00 am CBS fires nearly 30 people in its entertainment divisionThe media firm is grappling with the deepening recession, which has prompted companies to slash their advertising budgets. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Dec 2008 | 8:00 am Fed cuts key interest rate to record low: zero to 0.25%The central bank also plans to buy vast amounts of mortgage-backed securities and is considering buying long-term Treasury bonds. ...Source: Infocious RSS raw feed - channel BNPaperBusiness | 17 Dec 2008 | 8:00 am Japan stocks rise but yen worries limit gains (AP)AP - Japanese stocks edged higher Wednesday after the U.S. Federal Reserve slashed its key interest rate to historic lows, but gains were limited by renewed concerns about a strengthening yen.Source: Yahoo! News: Stock Markets News | 17 Dec 2008 | 7:52 am Irrational hopesWhy Madoff investors fooled themselvesSource: BBC News | Business | World Edition | 17 Dec 2008 | 7:51 am BAA forced to give up Stansted airportBAA, the Spanish-owned operator of Britain's largest airports, will be forced to sell both Stansted and Gatwick after failing to persuade the Competition Commission that it should be allowed to sell only one of its London hubs.Source: Latest Business News from Times Online | 17 Dec 2008 | 7:48 am Australian dollar closes strongerSYDNEY - The Australian dollar closed 4.25 per cent firmer as an unprecedented US rate cut boosted the appeal of the local currency. The US Federal Open Market Committee (FOMC) lowered the federal funds rate, the rate banks...Source: New Zealand Herald - Business | 17 Dec 2008 | 7:43 am Aborigines win battle over mineAborigines from Australia's Northern Territory win a court battle to stop mining giant Xstrata expanding a zinc mine.Source: BBC News | Business | World Edition | 17 Dec 2008 | 7:32 am Aust stocks don't follow big US leadMELBOURNE - The Australian stock market closed slightly higher on Wednesday but investors ignored a big lead from United States markets, instead taking an axe to some major banks. At the 1615 AEDT close, the benchmark S&P/ASX200...Source: New Zealand Herald - Business | 17 Dec 2008 | 7:06 am Modest gains for NZ marketIt was a day of modest gains on the New Zealand share market in the wake of news of the US Federal Reserve's surprisingly big interest-rate cut. The benchmark NZX-50 index closed up 0.846 points, or 0.031 per cent, at 2695.93,...Source: New Zealand Herald - Business | 17 Dec 2008 | 6:08 am SEC chief admits to failures in Madoff caseChristopher Cox, chairman of the Securities and Exchange Commission, has called for an investigation of his own agency, saying there were previous multiple failures to investigate allegations of wrongdoing by Bernard MadoffSource: Financial Times - US homepage | 17 Dec 2008 | 5:38 am Dollar surges on US rate cutThe Federal Reserve's decision to cut United States interest rates more aggressively than expected sent the New Zealand dollar racing to a five-week high. From around US56.40c about 8.20am, the kiwi rose to US57.90c within...Source: New Zealand Herald - Business | 17 Dec 2008 | 5:21 am Innocence LostIn the spring of 2001, I was working at Barron’s covering the asset management business, and even though the dotcom bubble had burst and short-circuited the stock market, it was still a time of innocence. The Hedge Fund Collapse The Shears are Out Can Hedge Funds Be Fraudulent? Source: Portfolio.com: Top 5 | 17 Dec 2008 | 5:00 am Wizard to continue servicing $1b in loans despite closureThe closure of Wizard Home Loans will see 25 branches close and more than 80 people looking for new jobs, as life gets tough for non-bank mortgage lenders. Wizard owner GE Money said it was closing the business but would continue...Source: New Zealand Herald - Business | 17 Dec 2008 | 3:43 am Citi set to merge two key divisionsThe investment and corporate banking operations are to be combined in yet another attempt by the US financial conglomerate to break down barriers between its businessesSource: Financial Times - US homepage | 17 Dec 2008 | 3:11 am Fed slashes rates to near zeroThe US Federal Reserve moved deeper into uncharted water heralding a raft of dramatic and unconventional measures to support the economy as it slashed interest rates from 1%, virtually to zeroSource: Financial Times - US homepage | 17 Dec 2008 | 1:11 am Writing on the wall for GM, Ford - expertA local automotive industry expert believes President Obama will force much of Australia's car assembly industry to close, triggering the loss of up to 300,000 jobs across the Tasman. Clive Matthew-Wilson, who edits the car buyers'...Source: New Zealand Herald - Business | 17 Dec 2008 | 12:30 am VIX Index of U.S. Stock Option Prices Retreats 7.7% to 52.37Source: Bloomberg - All Podcasts | 17 Dec 2008 | 12:29 am Trends & Innovations - TuesdayTheaters' shows might not go onSource: Investor's Business Daily: BUSINESS | 17 Dec 2008 | 12:21 am Biotech Company Strengthens Its Lead In Anti-HIV TreatmentsDespite efforts to stem the spread of the virulent virus, the number of new patients who are diagnosed with HIV keeps rising.Source: Investor's Business Daily: BUSINESS | 17 Dec 2008 | 12:21 am Business Briefs - TuesdayITT backs '08 view, to hike payout. The diversified manufacturer of filters, pumps and military electronics backed its EPS target of $3.97-$4.03...Source: Investor's Business Daily: BUSINESS | 17 Dec 2008 | 12:21 am In Brief - TuesdayGilead (GILD) shares rose 7.9% to 47.98 after Merrill Lynch upgraded the biotech on higher EPS estimates and HIV drug sales.Source: Investor's Business Daily: BUSINESS | 17 Dec 2008 | 12:21 am After The Close - TuesdayBRISTOL-MYERS SQUIBB (BMY) said it will cut a further 10% of its work force through 2010, including 800 positions by year-end. That comes on top...Source: Investor's Business Daily: BUSINESS | 17 Dec 2008 | 12:21 am Apple chief's withdrawal fuels health fearsSteve Jobs made an 11th-hour withdrawal from Apple's main event of the year, prompting concern about the chief executive's health and the readiness of the company's new productsSource: Financial Times - US homepage | 17 Dec 2008 | 12:19 am Ofgem tells fuel companies to cut pricesThe energy regulator has demanded commitments from power companies to slash gas and electricity prices.Source: Latest Business News from Times Online | 17 Dec 2008 | 12:00 am Car industry spluttering to halt as pleas for aid grow desperateThe car industry is facing a national emergency, the Government has been warned, amid increasing pressure for a state bailout. Ministers have been told that immediate action is needed as companies run out of cash and stall production.Source: Latest Business News from Times Online | 17 Dec 2008 | 12:00 am US Fed slashes interest rates to record 0.25pcWASHINGTON - The US Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession. The central bank...Source: New Zealand Herald - Business | 17 Dec 2008 | 12:00 am RF Lafferty's Froewiss Sees Infrastructure ETFs GrowingSource: Bloomberg - All Podcasts | 16 Dec 2008 | 11:38 pm Goodhart Recommends `Aggressive' Bank of England PolicySource: Bloomberg - All Podcasts | 16 Dec 2008 | 11:35 pm Ultra-low US rates undermine repo marketExtremely low short-term interest rates in the US are sharply eroding the functioning of the government repurchase or repo market, a foundation stone for the financial system and trading Treasury debtSource: Financial Times - US homepage | 16 Dec 2008 | 11:33 pm Jim Rogers Sees Bull Market in Commodities Continuing Into 2009Source: Bloomberg - All Podcasts | 16 Dec 2008 | 11:31 pm Vodafone pulling plug on cricket sponsorshipVodafone will not renew its sponsorship of the England cricket team when the current four-year deal ends in 2010. The mobile phone company, which has sponsored the national side for 12 years, said overnight (NZ time) it will end...Source: New Zealand Herald - Business | 16 Dec 2008 | 11:30 pm PGG Wrightson sets sights lowerAn anticipated downturn in demand for rural properties has seen rural service company PGG Wrightson drop its net earnings forecast range by $5 million. In an announcement to the NZX today, the PGG Wrightson board said a review...Source: New Zealand Herald - Business | 16 Dec 2008 | 11:30 pm Naval Institute's Wilkerson Sees Defense Funding `Train Wreck'Source: Bloomberg - All Podcasts | 16 Dec 2008 | 11:09 pm NZ Shares: Market up more than half a per centThe New Zealand sharemarket had a positive start to the day today in the wake of news of the US Federal Reserve's surprisingly big interest-rate cut this morning. In the opening minutes of trading this morning the benchmark NZX-50...Source: New Zealand Herald - Business | 16 Dec 2008 | 11:06 pm Tishman Says No Debt Available for Construction ProjectsSource: Bloomberg - All Podcasts | 16 Dec 2008 | 10:41 pm Rogoff Says It May Be `Worst Recession' Since World War IISource: Bloomberg - All Podcasts | 16 Dec 2008 | 10:16 pm Hear: Madoff's Method
-- Other falling numbers: U.S. housing starts and consumer prices. Ian Shepherdson, chief U.S. economist for High Frequency Economics, says the bottom is turning out to be lower than he'd expected. And then there's the question of deflation. -- Two words: Bernard Madoff. And three words: split strike conversion. Madoff, of course, is the New York investment manager accused of running a $50 billion Ponzi scheme. Defining the split strike conversion falls to economist Perry Mehrling of Barnard College. He breaks down the complicated trades that might fuel a fund like Madoff's. Download the podcast; or subscribe. Opening clip: Stuart Hoffman, chief economist from PNC Financial Services/AP interview. Intro music: Lil Mama meets Marnie Stern for "Absorb the Lip Gloss." Find us: Twitter/ Facebook/ Flickr. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 16 Dec 2008 | 9:49 pm Actor Brody Says `Cadillac Records' Film Role Was EasySource: Bloomberg - All Podcasts | 16 Dec 2008 | 9:36 pm Director Liman Says Writing Contest Cultivates Young WritersSource: Bloomberg - All Podcasts | 16 Dec 2008 | 9:33 pm Eliot Spitzer Lost, TooFrom the next cube farm over, NPR correspondent Mike Pesca sends this: Add the name Eliot Spitzer to the list of prominent people allegedly ripped off by Wall Street trader Bernard L. Madoff. Yesterday at Slate's holiday party Spitzer, who is writing a column for the online publication, confirmed that his family's firm had investments with a Madoff subsidiary. The former governor said that he never met Madoff and wasn't into "the Palm Beach scene," which he described as stuffier than he prefers, but did confirm that his family real estate firm lost money. He shrugged his shoulders in a "what can you do" way, and seemed in good spirits as he talked and joked with the crowd of mostly journalists. At one point, On the Media's Brooke Gladstone, who like Spitzer is Jewish, joked that "Bernie Madoff was worse for the Jews than anyone since David Berkowitz" and Spitzer replied, "Well, I was New York's second Jewish governor and look what I did." » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 16 Dec 2008 | 9:24 pm Actress Drescher Discusses Her Post in U.S. Public DiplomacySource: Bloomberg - All Podcasts | 16 Dec 2008 | 8:22 pm Got Falling Wages?For this listener question, I'm going to need your help. Alex writes: The Washington Post has an article today about the continued drop in the CPI [Consumer Price Index]. 1.7% since the end of October. They cite a lowered cost of fuel for this. They also said that inflation was flat at 0. . . . Is this the new sign that we have entered a period of deflation? I caught up with Ian Shepherdson, the chief U.S. economist for High Frequency Economics, who told me that he doesn't think we've begun true deflation yet. Shepherdson says that if you take oil prices out of the equation, overall prices haven't yet declined a great deal. What he calls core prices -- for food and clothing, etc. -- have stayed steady. He's not at all sure how long that will last, but for now, the decline in prices isn't nearly broad-based enough for him to say deflation has arrived. However: Shepherdson is watching for another key ingredient in deflation -- falling wages. Overall wages are continuing to grow, he says, by something like 3 percent a year. That could change. "Given that the unemployment is rocketing and labor is becoming much cheaper already, over the next year or so we we could easily have negative wages and negative core CPI," he says. "It's not my base case. It's not the most likely outcome. But it's a lot more likely than I would ever like it to be." This is where you come in. If you're seeing falling wages -- meaning you or your employees are getting less money for the same old work, let us know, in the comments or over e-mail. You could be the first to notice. » E-Mail This » Add to Del.icio.us
Source: NPR Blogs: Planet Money | 16 Dec 2008 | 7:37 pm Fed Cuts Interest RateAP writes: The Federal Reserve has cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession. The central bank says it reduced the federal funds rate, the interest that banks charge each other, to a range of zero to 0.25 percent. That is down from the 1 percent target rate in effect since the last meeting in October. Federal Reserve Chairman Ben Bernanke and his colleagues also pledged to use "all available tools" as they struggle to contain a financial crisis that is the worst since the 1930s and a recession that is already the longest in a quarter-century. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 16 Dec 2008 | 7:25 pm U.S.-backed banks could be mortgage aid tool: sources (Reuters)Reuters - A network of government-backed lenders could become conduits for fresh mortgage financing under a plan being mulled by U.S. policy-makers, sources familiar with the plan said on Tuesday.Source: Yahoo! News: Business | 16 Dec 2008 | 7:11 pm The 10 Best Business Books of 20082008 came in two parts. Part I, which ran through Bear Stearns, carried the vestiges of prior years, when we thought we could get away with everything, never anticipating that in actuality, everything would get away from us. Some of the books on this list reflect that optimistic, braced mentality, when words like “social networking” still gave us more jitters than “401K.” Times have a’changed. The sordid details don’t bear recounting in this post, but some of the books on this list reflect issues more characteristic of 2008’s tarnished second half, when social networking became safe, and the 401K became a figment. If these books don’t cover every event of the year, they certainly cover the thought processes that trace through it: 10. The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash
The definitive guide to the 2008 credit crisis. Though gloomy, Meltdown gives readers a detailed understanding of the thinking, trends, and historical precedents for today’s credit crisis. Starting with the crisis’ epistomological origins–the Chicago School and Keynesian economic thought–the author provides a detailed timeline leading to the current meltdown, offering crucial details that are hard to find in the mainstream media. It could also be called prophetic: Morris submitted the book in late 2007. After educating yourself with Meltdown, you can follow the crisis in real time more intelligently.
Howe argues that large interest communities–Wikipedia, for example–can, if given the right incentives, outperform traditional organizations in terms of cost and effectiveness. Crowdsourcing allows people to concentrate their talents in one area, resulting in a talented, specialized, ultra-productive workforce where performance counts more than appearance or background. Howe explains the implications and inevitability of this shift. Crowdsourcing is essential for understanding the future of human productivity.
Growing and sustaining profits is fundamental to any business, period. It’s also the focus of 98% of business books out there. What makes The Game-Changer different is that it’s written by Proctor and Gamble Chairman/CEO A. G. Lafley, whose company is doing astoundingly well relative to its global counterparts. Now, Lafley and consultant Ram Charan share the tricks to using innovation to thrive, including revitalizing your business model, creating new customers and markets, and mainstreaming innovation into your management style. In a rapidly changing world, innovation is the only way to survive. This book tells you what you need to do, from the mouths of leaders who have been there. The brilliant Malcolm Gladwell strikes again, this time claiming that individual inspiration has little to do with success. Instead, circumstance, luck, timing, and culture explain why some individuals, such as Bill Gates and Mozart, are able to rise above others with similar talents. Gladwell’s trademark refreshing style makes you realize your traditional perspectives may be cliched; as in his other books, he deftly explores surfaces rather than digging into back-end methodologies.
No, it’s not another Gladwell book. In fact, Nudge has more to do with Obama than underlying realities. It delves into how governments and interest groups can become more effective by manipulating the “status quo bias,” which says that people won’t choose a new alternative to the situation that fits their status quo unless that alternative choice is attractive enough to risk foregoing what they are used to. The authors offer ways to manipulate this “choice architecture,” nudging people towards more desirable outcomes through default choices or product arrangements that encourage people to behave in a certain way. One example is making saving for retirement a default option for individuals rather than a secondary choice. Nudge offers insight into both the existing mechanisms of human behavior and possible social engineering implications. Rather than promoting government paternalism, the authors explain how things could be done while emphasizing that people should always be given a real choice. 5. Predictably Irrational: The Hidden Forces That Shape Our Decisions
MIT Dan Ariely explores the old idea that although we think we’re rational, the fact is that we’re anything but. Ariely argues subtle forces, including emotions, societal norms, and expectation contribute to our irrational behavior. For example, why do we regularly overpay for coffee and gourmet meals while scrimping on cheap items like soup? Ariely uses experiments and everyday anecdotes to illustrate the biases that affect us every day. This highly readable book promises to be a new business classic. 4. The Back of the Napkin: Solving Problems and Selling Ideas with Pictures
A picture is worth a thousand words…and hours of time saved during meetings and brainstorm sessions. Back of the Napkin inspires new ways of thinking and communicating, ways that outperform even the ubiquitous PowerPoint. Dan Roam, a management consultant, makes the case that diagramming is an easy, efficient way to communicate with all levels of audiences. Visuals clarify complicated business ideas, making even rudimentary napkin sketches extremely powerful communication devices. A worthy read in an age where images, dialog boxes, and byte-sized info nuggets take precedence over long monologues. 3. A Sense of Urgency
Nobody knows the dynamics of change in business quite like Harvard professor John Kotter. In 208 readable pages, Kotter explains why a sense of urgency is the single most valuable element to introduce to any business undergoing change. He reviews the eight phases necessary for a business to undergo successful change (which he elaborates on in his 1996 book Leading Change) while educating readers on the nature, characteristics, and requirements of true urgency. 2. The Big Switch: Rewiring the World from Edison to Google
Every so often, technology evolves in a way that fundamentally alters commerce, communications, and identity itself. The last time this kind of shift occurred was when electricity became cheap. Now, the Internet–cheap computing–is ensuring that it happens again. Carr draws historical parallels to make the case that cheap computing will fundamentally alter the way society works, from job loss to a shallower culture. This far-reaching overview gives readers a valuable understanding of Web 2.0, cloud computing, and how they will fundamentally change the way we exist in the world. 1. The Snowball: Warren Buffett and the Business of Life
This carefully-researched tome reveals the mind, character, and life of Warren Buffett. It even exposes his secret weapon, which is…drum roll…himself. Buffett was a born business prodigy, but his quirks make him very human. As difficult as it may be to know the Oracle of Omaha, Schroeder brings readers darn close. In many ways, Buffett is business, he is history, and he is the economy. This book is a must-read for anyone wanting an overview of American business, period. Source: Business Pundit | 16 Dec 2008 | 6:36 pm Wearing The Crisis On Your SleeveAs Dealbreaker noted today, Bernie Madoff merchandise is up for auction on eBay, joining Bear Stearns, Lehman Brothers and Merrill Lynch tchochke, as well as a fugitive fund manager's business card in the ranks of credit crisis collectibles. The Madoff item is a vest, made of fleece. We'll leave the punchline to you. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 16 Dec 2008 | 6:36 pm A green gift in carbon offsetsGiving away carbon offsets for the holidays isn't exactly glamorous, but it does help the environment. Joellen Easton reports on how the market for offsetting greenhouse gas emissions is doing this holiday season.Source: Marketplace | 16 Dec 2008 | 6:06 pm Madoff scam is part of "the bezzle"With the dust settling from the Madoff scandal, Harvard professor Richard Parker tells Tess Vigeland that more scams may yet be uncovered during this downturn. It's part of what economist John Kenneth Galbraith called "the bezzle."Source: Marketplace | 16 Dec 2008 | 6:05 pm Country club circuit key to Madoff's riseBernard Madoff built the foundation for his Ponzi scheme by word of mouth at charity balls and country clubs from New York to Florida. And he's not the only one. Amy Scott reports.Source: Marketplace | 16 Dec 2008 | 6:04 pm Sign of success: Slovakia to adopt euroSlovakia has rebuilt itself since the end of communism, succeeding where many thought it would fail. In three weeks it will become a member of the eurozone. Stephen Beard reports.Source: Marketplace | 16 Dec 2008 | 6:04 pm Layoffs quiet construction businessIn the face of a worsening economy, a small construction company in Oregon has laid off nearly all of its employees. Tess Vigeland speaks with Keith Knowles from Robert Knowles Construction about where his business goes from here.Source: Marketplace | 16 Dec 2008 | 6:02 pm Dollar Hits Two-Month LowInvestors expect the Federal Reserve today to slice its target for the overnight lending rate to darned near zero. If you're heading for Europe, you're looking at an exchange rate of $1.38 on the euro. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 16 Dec 2008 | 6:00 pm Employees take hit as pay raises dipA new survey says companies are scaling back on pay raises. Employee benefits may also take a hit in the near future as out-of-pocket expenses like co-pays are expected to rise. Mitchell Hartman reports.Source: Marketplace | 16 Dec 2008 | 5:59 pm Fed drops rate to record lowIn a bold move to revive the economy, the Federal Reserve dropped the federal funds rate to 0.25%. Tess Vigeland talks with Bob Moon about the impact of the rate cut.Source: Marketplace | 16 Dec 2008 | 5:58 pm Mapping The Safety NetGot this from Robert Benincasa, NPR's numbers guru: Besieged managers of food banks, social service and housing agencies coping with increased demand and dwindling funds can get a quick lesson in how the nation's philanthropic foundations might help them. The Foundation Center has started tracking grants, loans and other help to local charities with an online interactive map, hoping to encourage the flow of money to the front lines of the economic downturn. The center says the map is part of its "broader initiative to provide the latest information, news, and research to shed light on the potential impact of the economic climate on the field of philanthropy," and it has a larger site dedicated to doing just that. As of this morning, the center had mapped more than $88 million in aid. Map users can get a national picture by sector or drill down to see individual grants to community organizations. "America's foundations are marshaling their resources to secure the social safety net at this critical time when public funding is down and service demands are up," said center president Bradford Smith. "The real-time information in this map will help grant makers fill gaps and foster collaborations to meet the pressing needs of nonprofits and the communities they serve." I'd like to note that my home state of Mississippi currently shows zero dollars and, of course, zero recipients. Yours? » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 16 Dec 2008 | 5:24 pm Ask A Professor: Hedge FundsLast Thursday, I went to a symposium at Columbia about the causes of, and potential solutions for, the financial crisis. One of the speakers, Prof. Wei Jiang, talked about the future of hedge funds. A number of you have asked about hedge funds, and Prof. Jiang has volunteered to answer your questions. Please post your questions in the comments section below, and I'll collect them at the end of the day and send them to her. Check back soon for the responses! » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 16 Dec 2008 | 4:55 pm Listener: Take The MedicineShawn writes: I really love your show, and I thank you for helping so much to make sense of all this. There's a common and overriding theme in your reporting, however, that has been really bothering me, and that's the idea that all this is unfair, as if someone did this to us. The thing is, we did this. We all did this. We were greedy, we lived beyond our means for too long, and now here we are. Sure, some people were more greedy than others. Some people took advantage of other people. Some people who unfairly profited are getting off relatively painlessly, and some innocent bystanders are suffering. Those things are unfair, but overall, we did this to our economy. My dad was a teacher, and my mom didn't work outside the home. My parents struggled financially, but we lived well within our means and made a good life. Personally, I've been lucky, but I like having money more than I like owing money, so although I make more than $200k/year as a technology consultant in San Francisco, I've rented a one-bedroom apartment for the last ten years. My fiancee and I will buy a bigger place in 2009 after we get married (assuming we can get a mortgage), and although I'm excited about the prospect of having a dishwasher for the first time in my life, I hate the idea of owing a bank a lot of money. "More" has been the American mantra for a long time. We expanded across this continent and around the world (often illegally and sometimes violently) to feed our appetites for more. de Tocqueville wrote of how the typical American "clutches at everything" and "holds nothing fast, but soon loosens his grasp to pursue fresh gratifications." And again: "As one digs deeper into the national character of the Americans, one sees that they have sought the value of everything in this world only in the answer to this single question: how much money will it bring in?" We did this, and we are taking our medicine now. » E-Mail This » Add to Del.icio.us
Source: NPR Blogs: Planet Money | 16 Dec 2008 | 4:35 pm Fed Nears ZeroThe Federal Reserve has accelerated the push toward zero interest rates, cutting its benchmark rate by a larger than expected amount. The Fed has lowered its target for the federal funds rate to a range of 0.25 percent to zero. Many had been expecting a half point cut, to 0.5 percent. And the Federal Reserve has indicated that it will keep rates low for some time. "The focus of the committee's policy going forward will be to support the functioning of financial markets and stimulate the economy through open market operations and other measures that sustain the size of the Federal Reserve's balance sheet at a high level," the Fed said in a statement. The Fed decision sparked an upturn in stock prices even as the Fed statement highlighted the huge challenges for an economic recovery. Since its last meeting in October, the Fed said, "labor market conditions have deteriorated, and the available data indicate that consumer spending, business investment, and industrial production have declined. Financial markets remain quite strained and credit conditions tight. Overall, the outlook for economic activity has weakened further." Earlier, new data showed how weak the economy is. Construction starts on new homes tumbled 18.9 percent from October to the lowest annual rate since the government began compiling data in 1959. And building permits, a sign of future activity, fell 15.6 percent from October. The weakness in building indicates that foreclosures and slow sales are still producing a huge glut of homes on the market, dragging down the overall economy. The Wealth Effects of House Price Declines House Poor Baby Steps Source: Portfolio.com: Top 5 | 16 Dec 2008 | 2:30 pm The Human TollDemographers like to refer to my cohort as Generation X. But anymore, when we talk about our growing up, my friends and I sound like Generation Recession. We grew up in the 1970s malaise. We graduated into the early 1990s contraction. And now we're looking at a wave of layoffs just when we're hitting the prime of our careers. Because it's on my mind, I'll start the morning headlines with a Houston Chronicle story about school kids moving because their families have hit hard times. I'm guessing I'm not the only who has so been there. From the Houston Chronicle: Schools say kids suffer as families move in weak economy. From the BBC: U.S. rate cut toward zero expected/ Goldman Sachs reports huge loss/ Watchdog queried over Madoff case. From the New York Times: Madoff case leaves charities reeling/ Retail prices fell at record rate in November/ Big oil projects in jeopardy. From the Korea Herald: President Lee says economic crisis to peak in first half of 2009. From Baseline Scenario: The new scenario. From the Washington Post: The frenzy of collateralized debt obligations. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 16 Dec 2008 | 2:15 pm Berlin to Poor: Catch Rats for Income
Spiegel describes an unusual attempt at government job creatio: There’s something Dickensian about the notion, but it has been proposed by a Berlin politician who is now being criticized for suggesting that the city’s poor should be enlisted to tackle the growing rat infestation in the center of the German capital. “Especially people who usually collect bottles could get one euro for every dead rat,” Henner Schmidt, head of the business-friendly Free Democrat party in the Mitte district of Berlin, told Berliner Kurier newspaper this week. Can you imagine your local recycled-bottle collector running around with a shovel, looking for rats to whack? How medieval. The proposal doesn’t look like it’s going to pass, for obvious health and human-interest reasons. Source: Business Pundit | 16 Dec 2008 | 1:59 pm
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OPEC is serious now. The nut-ball dictators who run Iran and Venezuela need more money to balance their budgets and keep the flow of capital to terrorists going. In Saudi Arabia, the government has halted the construction of The King Abdullah Economic City, which would have cost $30 billion. Abdullah may not have long to live. Oil money was to build that project.
