Futures Movers: Crude extends decline to trade below $39 a barrel

Modest moves mark the early action in petroleum futures.

Source: MarketWatch.com - Top Stories | 18 Dec 2008 | 2:14 pm

Metals Stocks: Gold futures pause following big rally; copper futures down 4%

Gold futures come under selling pressure, pausing after the previous session’s big rally, as the U.S. dollar trades mixed against other major currencies.

Source: MarketWatch.com - Top Stories | 18 Dec 2008 | 2:12 pm

Wall St stocks eye rebound on mixed news

Wall Street stocks were set to struggle to recover the previous session's losses, although trading was likely to be muted as investors digested mixed corporate developments and economic news
Source: Financial Times - US homepage | 18 Dec 2008 | 2:10 pm

Charter Comm (CHTR) Bull Turns Negative, As Massive Debt Strangles The Company

One of the few Charter Communications Inc.(CHTR) bulls is turning as the company looks headed for bankruptcy. Analysts at Pali Research downgraded the stock today from Buy to Neutral, citing the massive debt load.

The firm said, while growth has remained at the top end of the cable industry, the weight of its $21 bn of debt (9.1x leverage) is becoming too much for the company to bear.

Read more...

Source: 24/7 Wall St. | 18 Dec 2008 | 2:10 pm

GM reportedly denies Chrysler talks

General Motors denies reports that it has reopened merger talks with Chrysler owner Cerberus, according to the Associated Press.

Source: MarketWatch.com - Top Stories | 18 Dec 2008 | 2:09 pm

General Growth shares jump 50% as loans are extended

Shares of stretched mall owner and operator General Growth Properties jumped as much as 50% in pre-open trade after the company said lenders agreed to extend the terms of a $900 million loan on two Las Vegas properties.

Source: MarketWatch.com - Top Stories | 18 Dec 2008 | 2:07 pm

Obama to name Schapiro as new SEC chief

The decision to appoint Mary Schapiro, head of the securities industry's self-regulatory body, comes as the agency faces an avalanche of criticism for its role in the financial crisis
Source: Financial Times - US homepage | 18 Dec 2008 | 2:04 pm

Wall Street set for higher open as jobless claims ease (Reuters)

Reuters - Wall Street was set for a higher open on Thursday as data on the labor market came in roughly in line with expectations, lifting optimism about the state of the anemic economy.

Source: Yahoo! News: Stock Markets News | 18 Dec 2008 | 2:02 pm

Wall Street set for higher open as jobless claims ease (Reuters)

Reuters - Wall Street was set for a higher open on Thursday as data on the labor market came in roughly in line with expectations, lifting optimism about the state of the anemic economy.

Source: Yahoo! News: Business | 18 Dec 2008 | 2:02 pm

FedEx to cut executive salaries

FedEx said it would cut executive salaries and freeze hiring in 2009 as it expects economic conditions to worsen
Source: Financial Times - US homepage | 18 Dec 2008 | 2:01 pm

NewsWatch: Mary Schapiro reportedly to be named SEC Chairman

The choice of Mary Schapiro to head the Securities and Exchange Commission indicates that President Elect Barack Obama is serious about combining the agency and the Commodities Futures Trading Commission.

Source: MarketWatch.com - Top Stories | 18 Dec 2008 | 2:00 pm

GM denies Chrysler merger talks revival report (Reuters)

Reuters - General Motors Corp is not in merger talks with Chrysler LLC, a GM spokesman said on Thursday in response to a report in the Wall Street Journal that the talks had revived.

Source: Yahoo! News: Business | 18 Dec 2008 | 1:58 pm

Making Content Sites Profitable

A new report from ContentNext, which is available at their site, Paidcontent.org, reviews the financial prospects of political and news sites.

The first conclusion of the report is that being big is good. Sites with 200 million pageviews a month have a reasonable shot at getting major advertisers. Having pageviews of over 800 million a month puts news and political sites into the marketing big time.

The question that many people in the new media ask is what does it take to get a new site profitable in the world of MSNBC.com, CNN.com, and FoxNews.com? The answer appears to be getting reasonable CPMs for advertising and controlling costs. That can work, even at a website with modest traffic.

At lot of the focus of the "Size Doesn't Matter" report is on Huffington Post, Politico, Slate, and DrudgeReport. In October, Comscore showed that Huffington had 4.9 million unique visitors, Slate had 4.7 million, and Drudge had 2 million.

The report's cash flow modeling shows that sites with as few as 15 million pageviews a month can make money. That assume a $5 CPM, which may not be easy to get in this economy. At the same CPM, sites with 200 million pageviews a month can make a great deal of money, if they keep their employee headcount at modest levels. In short, headcount counts as much as CPMs do in the effort for medium-sized websites to make money.

The ContentNext report covers a lot of ground but perhaps the most important message that even if a site is not CNN.com, there is still hope that it can do well financially.

Douglas A. McIntyre

Source: 24/7 Wall St. | 18 Dec 2008 | 1:58 pm

Jobless claims ease, but still at higher levels (Reuters)

Reuters - The number of U.S. workers filing new claims for jobless benefits fell last week, easing from a 26-year peak, government data showed on Thursday, but stayed at levels consistent with a distressed economy.

Source: Yahoo! News: Business | 18 Dec 2008 | 1:54 pm

Jobless claims ease, but still at higher levels

WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless benefits fell last week, easing from a 26-year peak, government data showed on Thursday, but stayed at levels consistent with a distressed economy.
Source: Reuters: Business News | 18 Dec 2008 | 1:54 pm

Indications: U.S. stock index futures post rebound

U.S. stock index futures were slightly higher Thursday, indicating a potential rebound from the previous day’s losses.

Source: MarketWatch.com - Top Stories | 18 Dec 2008 | 1:54 pm

Richard Bove Sounding More Like Meredith Whitney on Citi (C, GS, MS)

Source: 24/7 Wall St. | 18 Dec 2008 | 1:53 pm

Fedex profit climbs, but '09 looks rough

Fedex Corp.'s fiscal second-quarter profit edges up nearly 3%, but challenging times ahead in “the worst economic conditions” in the company’s 35-year history spur pay cuts and a hiring freeze.

Source: MarketWatch.com - Top Stories | 18 Dec 2008 | 1:49 pm

Rite Aid posts wider quarterly loss

CHICAGO (Reuters) - Rite Aid Corp posted its sixth straight quarterly loss on Thursday as sales fell and charges rose, and the drugstore chain said it expects to post a bigger loss this year as shoppers cut back in a recession.
Source: Reuters: Business News | 18 Dec 2008 | 1:48 pm

Jobless claims fall - remain high

The number of Americans newly filing for state unemployment insurance benefits fell more than expected last week, according to a government report released Thursday.
Source: Business and financial news - CNNMoney.com | 18 Dec 2008 | 1:46 pm

Stock futures up after drop in jobless claims (AP)

AP - Wall Street is still headed for a higher open after a government report showed a decline in unemployment claims.

Source: Yahoo! News: Stock Markets News | 18 Dec 2008 | 1:46 pm

Stock futures add to gains after jobless claims in line

NEW YORK (Reuters) - Stock index futures added to gains on Thursday after U.S. jobless claims were roughly in line with expectations in the latest week, lifting optimism about the state of the anemic economy.
Source: Reuters: Business News | 18 Dec 2008 | 1:44 pm

Higher open seen for stocks

U.S. stocks were poised for a higher open Thursday, as investors awaited more readings on the economy and weighed the lowest oil prices since 2004.
Source: Business and financial news - CNNMoney.com | 18 Dec 2008 | 1:44 pm

Before the Bell: GM, Atheros, ASML in focus

U.S. stock index futures were slightly higher Thursday ahead of important employment data, pointing toward a potential rebound from the previous day's losses.

Source: MarketWatch.com - Top Stories | 18 Dec 2008 | 1:43 pm

Economic Report: Initial jobless claims fall 21,000; trend at 26-year high

First-time claims for state unemployment benefits drop 21,000 to 554,000 in the week ended Dec. 13, easing back part of a surge in the prior week, the Labor Department reports Thursday.

Source: MarketWatch.com - Top Stories | 18 Dec 2008 | 1:43 pm

FedEx profit rises, warns of difficult 2009 (Reuters)

Reuters - Package delivery giant FedEx Corp on Thursday reported a higher quarterly net profit that was lifted by falling fuel costs and met expectations, but the company gave a grim view of the economy in 2009 and said it was taking action to cut costs.

Source: Yahoo! News: Business | 18 Dec 2008 | 1:41 pm

FedEx profit rises, warns of difficult 2009

DETROIT (Reuters) - Package delivery giant FedEx Corp on Thursday reported a higher quarterly net profit that was lifted by falling fuel costs and met expectations, but the company gave a grim view of the economy in 2009 and said it was taking action to cut costs.
Source: Reuters: Business News | 18 Dec 2008 | 1:41 pm

GM denies report of merger talks with Chrysler

Ailing automakers General Motors and Chrysler have restarted merger discussions, according to a report in the Wall Street Journal. However, a GM spokesman denied the report on Thursday morning.
Source: Business and financial news - CNNMoney.com | 18 Dec 2008 | 1:39 pm

TSX, small-cap Venture on track to reopen Thursday (Reuters)

Reuters - The Toronto Stock Exchange and TSX Venture Exchange is expected to reopen on Thursday for normal trading after it was shut the previous session due to a technical glitch, said exchange operator TMX Group Inc.
Source: Yahoo! News: Stock Markets News | 18 Dec 2008 | 1:38 pm

Repossessions will rise 67% to reach 90s slump

The number of people who will have their homes repossessed is set to surge by 67 per cent next year to 75,000, in line with the rate reached in the last recession during the early nineties.
Source: Latest Business News from Times Online | 18 Dec 2008 | 1:34 pm

Ingersoll-Rand, Pentair cut outlooks on weaker economy

To account for sharp declines in market demand, industrial manufacturers Ingersoll-Rand and Pentair lower their respective earnings forecasts, with Pentair also planning to cut about 10% of its workforce.

Source: MarketWatch.com - Top Stories | 18 Dec 2008 | 1:33 pm

Auxilium Scores on Pfizer Pact (AUXL, PFE)

Source: 24/7 Wall St. | 18 Dec 2008 | 1:31 pm

FedEx profit rises, warns of difficult 2009

DETROIT (Reuters) - Package delivery giant FedEx Corp on Thursday reported a higher quarterly net profit that was lifted by falling fuel costs and met expectations, but the company gave a...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Dec 2008 | 1:26 pm

Madoff surrounded by mob of cameras after court (AP)

AP - Free on $10 million bond during an investigation into an alleged $50 billion investment fraud, Bernard Madoff had to push his way through a swarm of media to reach his posh Manhattan apartment, where he is under a nighttime curfew.

Source: Yahoo! News: Stock Markets News | 18 Dec 2008 | 1:19 pm

Obama picks new head of SEC, considers shakeup

CHICAGO (Reuters) - President-elect Barack Obama was set on Thursday to name seasoned regulator Mary Schapiro to head the Securities and Exchange Commission as he considers a major overhaul of the heavily criticized agency.
Source: Reuters: Business News | 18 Dec 2008 | 1:19 pm

Obama picks new head of SEC, considers shakeup (Reuters)

Reuters - President-elect Barack Obama was set on Thursday to name seasoned regulator Mary Schapiro to head the Securities and Exchange Commission as he considers a major overhaul of the heavily criticized agency.

Source: Yahoo! News: Stock Markets News | 18 Dec 2008 | 1:19 pm

Madoff's auditor... doesn't audit?

The three-person auditing firm that apparently certified the books of Bernard Madoff Investment Securities, the shuttered home of an alleged multibillion-dollar Ponzi scheme, is drawing new scrutiny. Already under investigation by local prosecutors for its potential role in the scandal, the firm, Friehling & Horowitz, is now also being investigated by the American Institute of Certified Public Accountants, the prestigious body that sets U.S. auditing standards for private companies. The problem: The auditing firm has been telling the AICPA for 15 years that it doesn't conduct audits.
Source: Business and financial news - CNNMoney.com | 18 Dec 2008 | 1:17 pm

Obama picks new head of SEC (Reuters)

Reuters - U.S. President-elect Barack Obama was set on Thursday to name seasoned regulator Mary Schapiro to head the Securities and Exchange Commission as he considers a major overhaul of the heavily criticized agency.

Source: Yahoo! News: Stock Markets News | 18 Dec 2008 | 1:16 pm

Ingersoll and Pentair cut outlooks

NEW YORK (Reuters) - Ingersoll Rand and Pentair joined a growing list of industrial companies warning markets of tumbling revenues and sagging earnings as the economic slowdown slams the...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Dec 2008 | 1:16 pm

FTSE 100 up 1.53 at 4,325.72 (AP)

AP - Share prices on the London Stock Exchange were higher at midday Thursday.
Source: Yahoo! News: Stock Markets News | 18 Dec 2008 | 1:16 pm

Accounting firms drawn in to Madoff scandal

PwC, KPMG and Ernst & Young, three of the 'big four' accountants, and an arm of BDO International, the fifth largest, were all auditors of the feeder funds which channelled money into Madoff funds
Source: Financial Times - US homepage | 18 Dec 2008 | 1:11 pm

Book Review: Russell Roberts's 'The Price of Everything'

Source: 24/7 Wall St. | 18 Dec 2008 | 1:09 pm

Personal Finance: 20 Dos & Don'ts for 2009 (BusinessWeek Online)

BusinessWeek Online - During the worst economic crisis in a lifetime, the right financial decisions are crucial.
Source: Yahoo! News: Business | 18 Dec 2008 | 1:08 pm

What the Mortgage Bailout Means For You (BusinessWeek Online)

BusinessWeek Online - On Dec. 6, Treasury Secretary Henry Paulson, with the support of President George W. Bush, unveiled a plan to aid certain homeowners who face the prospect of higher mortgage rates in the next few years. Paulson worked with banks and other mortgage companies to develop the initiative, and thanked them for their involvement. "We have worked through an evolving process to help minimize the impact of the housing downturn on homeowners, neighborhoods and the U.S. economy," he said. ...
Source: Yahoo! News: Business | 18 Dec 2008 | 1:08 pm

The Trouble With Business Ethics (BusinessWeek Online)

BusinessWeek Online - In the post-Enron, post-WorldCom, post-Tyco era, ethics has become one of the hottest topics in the business world. Business schools have entire courses dedicated to the topic. Companies have instituted more rigorous ethics policies and set up global ethics offices. One of the fastest-growing employment categories is chief ethics officer, as evidenced by the creation of that post at the New York Stock Exchange , Nortel Networks , Marsh & McLennan , and Hewlett-Packard .
Source: Yahoo! News: Stock Markets News | 18 Dec 2008 | 1:08 pm

Is it all over for stocks?

If you haven't second-guessed yourself yet, maybe you just aren't paying attention.
Source: Business and financial news - CNNMoney.com | 18 Dec 2008 | 1:08 pm

Oil hovers below $41

LONDON (Reuters) - Crude oil hovered below $41 a barrel on Thursday, having touched the lowest price since July 2004, after OPEC announced its biggest output cut ever and China slashed domestic fuel prices for the first time in two years.
Source: Reuters: Business News | 18 Dec 2008 | 1:01 pm

Corus staff to lose pay premiums

About 1,000 workers at Corus' Scunthorpe steelworks will see their pay cut by as much as 11.5% because of shift changes.
Source: BBC News | Business | World Edition | 18 Dec 2008 | 12:47 pm

Madoff under house arrest

NEW YORK/WASHINGTON (Reuters) - Disgraced Wall Street investment manager Bernard Madoff, accused of orchestrating a $50 billion fraud, was put under house arrest on Wednesday.
Source: Reuters: Business News | 18 Dec 2008 | 12:47 pm

India's new oil subsidy plan by mid-Jan - sources

NEW DELHI, Dec 18 (Reuters) - India plans to ease the subsidy burden on upstream firms such as Oil and Natural Gas Corp by formulating a new system to offset losses from selling cheap fuels, oil ministry...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Dec 2008 | 12:41 pm

FTSE Valuations 'Unbelievably Cheap'

LONDON, December 18 /PRNewswire/ -- After a torrid year for equities, Graham Ashby from Credit Suisse gives a bullish outlook for stocks in 2009. Valuations are...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Dec 2008 | 12:39 pm

Bail-out dilemma

Should Jaguar Land Rover receive government help?
Source: BBC News | Business | World Edition | 18 Dec 2008 | 12:37 pm

Motorola freezes pension plans

Motorola, Inc. said on Wednesday that it is freezing employee pension plans and no longer matching 401(k) contributions as a result of the economic crisis.
Source: Business and financial news - CNNMoney.com | 18 Dec 2008 | 12:37 pm

Lennar loss narrows on reduced land spending

NEW YORK (Reuters) - Lennar Corp said on Thursday its quarterly net loss narrowed as it cut land expenditures and tried to clear its backlog of unsold homes in an effort to deal with...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Dec 2008 | 12:34 pm

Lennar loss narrows on reduced land spending

NEW YORK (Reuters) - Lennar Corp said on Thursday its quarterly net loss narrowed as it cut land expenditures and tried to clear its backlog of unsold homes in an effort to deal with brutal conditions in the residential real estate market.
Source: Reuters: Business News | 18 Dec 2008 | 12:34 pm

Dollar and sterling slide further

The dollar and the pound fall against the euro as interest rate cuts undermine the two currencies.
Source: BBC News | Business | World Edition | 18 Dec 2008 | 12:34 pm

Chrysler shuts down all production

Chrysler LLC announced late Wednesday that it is stopping all vehicle production in the United States for at least a month.
Source: Business and financial news - CNNMoney.com | 18 Dec 2008 | 12:31 pm

World stocks mixed as economic concerns persist (AP)

AP - World stocks were mixed Thursday, as investors weighed more grim economic data against expectations that central banks and governments would continue to announce new economic rescue measures.

Source: Yahoo! News: Business | 18 Dec 2008 | 12:31 pm

World stocks mixed as economic concerns persist (AP)

AP - World stocks were mixed Thursday, as investors weighed more grim economic data against expectations that central banks and governments would continue to announce new economic rescue measures.

Source: Yahoo! News: Stock Markets News | 18 Dec 2008 | 12:31 pm

Alliance Data's Canadian Loyalty Business Signs Multi-Year Renewal With Canada's Largest Diversified General Merchandise Retailer: Hudson's Bay Company

Agreement Extends Long-Standing Relationship with Canada's Nationally Recognized Brand Name in the Retail Industry DALLAS, Dec. 18 /PRNewswire-FirstCall/ --...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Dec 2008 | 12:30 pm

Top Analyst Upgrade/Positive Calls (AACC, CYN, LLL, LTC, NTRS, PAR, TRMK, UHS)

These are some of the top analyst upgrades and positive calls we are seeing from Wall Street early this Thursday morning with more than two hours to the open:

• Asset Acceptance Capital (NASDAQ: AACC) Raised to Market Perform at KBW.
• City National (NYSE: CYN) Raised to Outperform at KBW.
• L-3 Communications (NYSE: LLL) Started as Outperform at Morgan Keegan.
• LTC Properties (NYSE: LTC) Started as Buy at KeyBanc.
• Northern Trust (NASDAQ: NTRS) Raised to Outperform at KBW.
• 3PAR (NYSE: PAR) Started as Outperform at Morgan Keegan.
• Terremark Worldwide (NASDAQ: TRMK) Started as Buy at Stanford.
• Universal Health (NYSE: UHS) Started as Overweight at JPMorgan.

Jon C. Ogg
December 18, 2008

Source: 24/7 Wall St. | 18 Dec 2008 | 12:24 pm

Pre-Market Analyst Downgrade/Negative Calls (AAPL, BK, BUCY, CCRT, EGO, JOYG, NOK, PALM, SAY)

These are some of the top pre-market analyst downgrades or cautious calls seen from Wall Street early this Thursday morning with more than two hours to the open:

• Apple (NASDAQ: AAPL) Started as Hold at Canaccord.
• Bank of NY Mellon (NYSE: BK) Cut to Market Perform at KBW.
• Bucyrus International (NASDAQ: BUCY) Cut to Underweight at JPMorgan.
• CompuCredit (NASDAQ: CCRT) Cut to Market Perform at KBW.
• Eldorado Gold (NYSE: EGO) Cut to Outperform from Strong Buy at Raymond James.
• Joy Global (NASDAQ: JOYG) Cut to Underweight at JPMorgan.
• Nokia (NYSE: NOK) Started as Sell at Canaccord.
• Palm (NASDAQ: PALM) Started as Sell at Canaccord.
• Satyam Computer (NYSE: SAY) Cut to Sell at Goldman Sachs; Cut to Underweight at Morgan Stanley.

Jon C. Ogg
December 18, 2008

Source: 24/7 Wall St. | 18 Dec 2008 | 12:20 pm

Doorstep lender Cattles to scrap dividends

Cattles, the sub-prime and doorstep lender, is scrapping dividends for at least a year amid continuing delays in its attempt to secure a banking licence.
Source: Latest Business News from Times Online | 18 Dec 2008 | 12:18 pm

New SEC chief gave Bernard Madoff's son a job

Mary Schapiro, Barack Obama's choice to lead the Securities and Exchange Commission (SEC), previously appointed one of Bernard Madoff's sons to a regulatory body that oversees American securities firms.
Source: Latest Business News from Times Online | 18 Dec 2008 | 12:14 pm

Wyeth adds biotech compounds with UK acquisition

Drugmaker Wyeth has acquired a private British biotech company developing medicines in the potentially lucrative field of obesity, in a deal that could be worth up to $150 million, Wyeth...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Dec 2008 | 12:12 pm

Pier 1 posts loss, faces possible delisting (Reuters)

Reuters - Home furnishings retailer Pier 1 Imports Inc reported a wider quarterly loss on Thursday on weak customer traffic and said the recession has slowed its plans to return to profitability.
Source: Yahoo! News: Business | 18 Dec 2008 | 12:02 pm

Wyeth buys tiny biotech focused on obesity

NEW YORK, Dec 18 (Reuters) - Wyeth on Thursday said it had paid $30 million to acquire privately held British biotechnology company Thiakis Ltd and its experimental obesity drug now in early-stage human...
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Dec 2008 | 12:00 pm

Hudson Highland Group Updates Q4 2008 Guidance and Status of Impairment Testing

NEW YORK, Dec. 18 /PRNewswire-FirstCall/ -- Hudson Highland Group, Inc. (Nasdaq: HHGP), one of the world's leading providers of permanent recruitment, contract professionals
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Dec 2008 | 12:00 pm

Gold Horse International, Inc. Completes Key Construction Projects, Begins Work on Two Additional Projects Valued at $43.0 Million

HOHHOT, China, Dec. 18 /PRNewswire-Asia/ -- Gold Horse International, Inc., (OTC Bulletin Board: GHII) ("Gold Horse" or "the Company"), a multifaceted
Source: Infocious RSS raw feed - channel BNewsBusiness | 18 Dec 2008 | 12:00 pm

Public sector borrowing hits high

UK's public sector finances deteriorate sharply in November, with borrowing soaring to a fresh all-time monthly high.
Source: BBC News | Business | World Edition | 18 Dec 2008 | 11:53 am

Iraq economy 'on track' says IMF

Improved security and a more stable political environment mean economic development in Iraq is "encouraging", the IMF says.
Source: BBC News | Business | World Edition | 18 Dec 2008 | 11:51 am

Chrysler plants close for a month

The struggling US carmaker Chrysler is to halt all production at its 30 factories for a month starting on Friday.
Source: BBC News | Business | World Edition | 18 Dec 2008 | 11:40 am

GM and Chrysler reopen merger talks: report

(Reuters) - General Motors and Chrysler have reopened merger talks, as Chrysler owner Cerberus Capital Management has signaled its willingness to give away part of its ownership in the auto maker, the Wall Street Journal said, citing people familiar with the discussions.
Source: Reuters: Business News | 18 Dec 2008 | 11:32 am

India inflation at nine-month low

Inflation in India falls sharply, mainly due to declining fuel prices, official figures show.
Source: BBC News | Business | World Edition | 18 Dec 2008 | 11:31 am

Public sector borrowing at record £16bn

The UK’s public finances showed another sharp deterioration today after it was announced that net borrowing soared to a record £16 billion in November.
Source: Latest Business News from Times Online | 18 Dec 2008 | 11:29 am

Surprise rise in UK retail sales

UK retail sales rose unexpectedly last month, official figures show, led by household goods and food, while clothing declined.
Source: BBC News | Business | World Edition | 18 Dec 2008 | 11:25 am

The Age Of City Bankruptcies

Source: 24/7 Wall St. | 18 Dec 2008 | 11:17 am

A new approach to retirement saving

Question: People have been telling my husband and me that we should increase the percentage of pay we put in our 401(k) account so that we can make a lot of money when the market rebounds. What do you think -- should we up our contributions or keep them the same? --Dawn Bennett, Dwight, Illinois
Source: Business and financial news - CNNMoney.com | 18 Dec 2008 | 11:07 am

HK stocks up amid China stimulus hopes (AP)

AP - Hong Kong stocks rose moderately Thursday amid hopes that China's stimulus measures would keep the economy growing rapidly.
Source: Yahoo! News: Stock Markets News | 18 Dec 2008 | 11:02 am

The Price Of Oil Will Rise

The amount of humiliation among OPEC oil ministers must be agonizing. Every time the cartel cuts supply, the price of crude drops like a rock. But, the ministers will not be denied their pound of flesh.

The most recent cut in production was either 4.2 million barrels a day or 2.2 million, depending on what month is considered as the starting point for the calculation. Either way, the supply from OPEC should be down about 10% from the middle of this year to the early part of 2010.

The enemy of these price cuts has been rapidly falling demand in recession-riddled economies like the ones in the US, EU, and Japan. Even China is using less oil. Crude prices dropped after the most recent OPEC cut announcement because America suddenly determined it had more supply than most analysts thought.

The great thing about being a supplier is that cutting never ends. Cut once without effect and then cut twice. Cut three or four times. At some point the cuts get supply below demand and prices start to move north.

OPEC has not be very good at anticipating supply contraction. The recession came on too fast. But, the one certain thing about the cartel is the its members are feeling poor and they will press for cuts until oil gets above $70. The national budgets of Nigeria, Iran, and Venezuela depend on it. Saudi Arabia cannot even build its new King Abdullah Economic City. The man is an emperor after all.

Russia in not in OPEC, but it might as well be. Its stock market has fallen 85%, to a large extent because oil revenue is falling. Vladamir Putin, the troll who used to run the KGB, could be out of a job as the head of the Communist country.

Too much is at stake for oil prices to keep dropping, so they won't be any more.

Douglas A. McIntyre

Source: 24/7 Wall St. | 18 Dec 2008 | 11:01 am

Argentina renationalises airline

Argentina is renationalising the Spanish-owned airline, Aerolineas Argentinas, after talks between the owner and government failed.
Source: BBC News | Business | World Edition | 18 Dec 2008 | 10:52 am

Wall St. Needs A Czar All Its Own (C)(AIG)(FNM)(FRE)

America is short on czars. The ones in charge of energy, the war on drugs, intellectual property, and, perhaps, cars are not enough.

The one segment of the economy that has needed a czar more than any other is the financial sector. The pretenders have been the chiefs and Treasury, the Fed, the FDIC, and, god help us, the SEC.

The alleged purpose of a czar is to cut across government agencies and political interests to drive one forceful set of plans to save time in solving a major crisis facing the US. A quick look at the banking and brokerage businesses shows that attempts to rescue the system and the companies has been discordant and complex.

AIG (AIG) got a special deal all its own. The arrangements for Fannie Mae (FNM) and Freddie Mac (FRE) may be at odds with other goals the government has for the broader financial system. The program to save Citigroup (C) does not appear like the capital infusions for other big banks. Bear Stearns, Lehman, Wachovia, Countrywide, and Washington Mutual were all driven into shotgun weddings of shuttered altogether.

One of the most pronounced difficulties with saving the financial system is that so far it has been ad hoc. The excuse for this is usually that things happened so fast that a coordinated attack on the problem has been impossible. There is some tragedy in that, but it is probably true.

The troubles among Wall St. firms may get worse as housing, credit defaults, corporate loans, and commercial real estate all fall on harder time. But, the system has gotten some stability as the government has pumped it full of capital. There is probably time for a more deliberate approach.

The issues of turf wars are not going away. The many government agencies who claim power over pieces of the banking system is still large. Their goals are not always aligned.

Czaring up the financial industry might solve much of the trouble that multiple-agency regulation presents. The war on drugs never worked, but at least one person could cut across government departments to make a go of it.

A financial czar would need to have two plenary powers. The first would be to determine which financial companies get government cash and on what basis. Hopefully each foot in the system would not require a custom set of shoes as had been the practice up until now. The second, and equally important authority the czar would have is the ability to merge troubled financial firms into more healthy ones. This would go a long way toward keeping companies like Citigroup (C) from bleeding the system dry of both money and precious government resources.

A chicken in every pot, a czar in every garage.

Douglas A. McIntyre

Source: 24/7 Wall St. | 18 Dec 2008 | 10:46 am

German business confidence plunges

German business confidence has plunged to its lowest since the early 1980s, highlighting the speed of the country's industrial collapse
Source: Financial Times - US homepage | 18 Dec 2008 | 10:34 am

Madoff under house arrest (Reuters)

Reuters - Disgraced Wall Street investment manager Bernard Madoff, accused of orchestrating a $50 billion fraud, was put under house arrest on Wednesday.

Source: Yahoo! News: Business | 18 Dec 2008 | 10:23 am

Government confirms Jaguar talks

The government confirms it has held talks with Jaguar Land Rover over the possibility of state aid for the carmaker.
Source: BBC News | Business | World Edition | 18 Dec 2008 | 10:17 am

Retail sales unexpectedly rise 1.5% in November

Analysis: Why the figures don't add up
Source: Latest Business News from Times Online | 18 Dec 2008 | 10:08 am

BA, Qantas merger talks collapse

British Airways and Qantas announced Thursday they have failed to reach agreement on a potential merger.
Source: Business and financial news - CNNMoney.com | 18 Dec 2008 | 9:42 am

Down with the Car Czar!

With the idea of a "car czar" the flavor-du-jour in our nation's capital, it looks like we're destined to repeat history and with unhappy consequences.
Source: Business and financial news - CNNMoney.com | 18 Dec 2008 | 9:18 am

Alleged Iraqi coup plotters arrested

About 35 officials have been arrested at Iraq's Interior Ministry, some accused of planning a coup, the New York Times has reported, citing senior security officials in Baghdad
Source: Financial Times - US homepage | 18 Dec 2008 | 8:41 am

BA and Qantas abandon talks

The airlines have put out a joint statement announcing that after detailed discussions they had not been able to proceed with what many had judged a bold gamble to accelerate consolidation in the global airline industry
Source: Financial Times - US homepage | 18 Dec 2008 | 8:15 am

Permira backer to raise £200m and cut funding

Shares in SVG Capital, the listed private equity fund that backs Permira, the global buyout giant, plunged more than 27 per cent today after it announced it will raise £200 million through a discounted share issue in a bid to bolster its battered balance sheet.
Source: Latest Business News from Times Online | 18 Dec 2008 | 8:05 am

Debate over Sunrise Powerlink may be near decision

The California Utilities Commission is scheduled to vote on the renewable energy transmission project, opposed by some environmentalists. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Dec 2008 | 8:00 am

Morgan Stanley loses $2.37 billion in quarter

NEW YORK -- Morgan Stanley said today it lost $2.37 billion during its fiscal fourth quarter as it took a range of losses on assets amid one of the roughest quarters for investment banks.
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Dec 2008 | 8:00 am

SEC failures spur calls for agency overhaul

An alleged $50-billion Ponzi scheme by Bernard Madoff is the latest black mark on the agency. President-elect Barack Obama is expected to name a new agency head today. Critics say more is needed. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Dec 2008 | 8:00 am

OPEC's move to halt oil's slide falters

The cartel pledges to cut production a record 2.2 million barrels a day, but oil futures dip below $40 a barrel for the first time in more than four years before closing at $40.06, down $3.54. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Dec 2008 | 8:00 am

More are moving out of California than in

For a fourth year in a row, residents moving to other states outnumber arrivals from other states, a trend that underscores the sour economy. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Dec 2008 | 8:00 am

Yahoo to purge user data after 90 days

The move may prompt other search engines to reduce their retention times. With U.S. and European regulators and...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Dec 2008 | 8:00 am

CalPERS names Anne Stausboll chief executive

The state's giant public pension fund taps its interim chief investment officer to help it overcome steep losses. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Dec 2008 | 8:00 am

Developer proposes to demolish Century Plaza hotel

Michael Rosenfeld, who bought the property for $366.5 million last May, calls for razing the 19-story arc-shaped hotel and erecting two 50-story towers in its place. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Dec 2008 | 8:00 am

Chrysler to close all manufacturing plants for a month

The firm is trying to stay afloat financially and reduce its unsold inventory of vehicles. Chrysler said Wednesday...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Dec 2008 | 8:00 am

Aussie stocks: Market marginally up

The Australian share market finished marginally in the black with a weaker Commonwealth Bank and energy stocks weighed on the bourse. The benchmark S&P/ASX200 index was up 10.6 points, or 0.3 per cent, at 3,581.2, while the broader...
Source: New Zealand Herald - Business | 18 Dec 2008 | 7:33 am

NZ dollar tops US59c as Greenback tumbles

The New Zealand dollar topped US59c for the first time in five weeks but it was really a US dollar story. The US dollar dropped to a two-and-a-half-month low against the euro and was around its weakest level in 13 years against...
Source: New Zealand Herald - Business | 18 Dec 2008 | 7:26 am

NZ stocks: Sharemarket rises ahead of close

The New Zealand share market slipped lower in the morning but managed a modest run higher ahead of the close. The benchmark NZX-50 index closed up 11.661 points, or 0.433 per cent, at 2707.591. Brokers said trading was light....
Source: New Zealand Herald - Business | 18 Dec 2008 | 7:24 am

Chrysler to idle plants, pressure builds for aid

DETROIT/WASHINGTON (Reuters) - Chrysler LLC said on Wednesday that it would halt factory operations for at least a month, putting new pressure on the Bush administration to quickly help cash-strapped automakers.
Source: Reuters: Business News | 18 Dec 2008 | 7:19 am

BA and Qantas merger talks collapse

British Airways (BA) confirmed this morning that talks over a merger with Qantas Airways, the Australian national carrier, had ended, with neither side able to agree over key terms.
Source: Latest Business News from Times Online | 18 Dec 2008 | 6:32 am

General Motors reopens merger talks with Chrysler

General Motors is understood to have reopened merger talks with Chrysler as it emerged that Chrysler said it would halt all American vehicle production for at least a month.
Source: Latest Business News from Times Online | 18 Dec 2008 | 5:56 am

Unemployment, deficits set to rise, says Treasury

Government debt and spending deficits are at risk of spiralling out of control and will need to be reduced in next year's budget, Finance Minister Bill English said today. Treasury has released its latest economic forecasts today...
Source: New Zealand Herald - Business | 18 Dec 2008 | 4:00 am

Brian Fallow: Rainy day becomes a monsoon

Michael Cullen described his last Budget in May as the rainy day budget, when years of fiscal prudence paid off. Today's update of the economic and fiscal outlook from the Treasury makes it clear the rainy day has turned into a...
Source: New Zealand Herald - Business | 18 Dec 2008 | 3:30 am

Obama picks Mary Schapiro to head Securities and Exchange Commission

Schapiro, a veteran Wall Street regulator and former SEC commissioner, would take over an agency under fire for failing to detect an alleged $50-billion Ponzi scheme. ...
Source: Infocious RSS raw feed - channel BNPaperBusiness | 18 Dec 2008 | 3:14 am

Hallenstein Glassons says tight year ahead

Tough economic times means the retail sector will feel the pinch after Christmas as landlords look for more rent and consumer confidence is hit by further job losses, says the head of Hallenstein Glassons. However, retail spaces...
Source: New Zealand Herald - Business | 18 Dec 2008 | 3:00 am

Housing loan approvals surge after big OCR cut

Alan Bollard's latest move has sent house buyers scurrying on to the market to finalise deals on properties. Housing loan approvals jumped 30.6 per cent in the week to December 12 to 9,314, the highest weekly number since June...
Source: New Zealand Herald - Business | 18 Dec 2008 | 1:30 am

Elle Macpherson's sister declares herself bankrupt

MELBOURNE - The sister of former supermodel Elle Macpherson has declared herself bankrupt. Mimi Macpherson was due to appear in the Federal Magistrates Court in Melbourne on Thursday for a bankruptcy hearing, but the court heard...
Source: New Zealand Herald - Business | 18 Dec 2008 | 1:09 am

Airline group rejects cargo cartel claims

Airline trade body the International Air Transport Association (IATA) is distancing itself from Commerce Commission allegations of cartel activity in the air cargo market. On Monday, the commission announced it was taking legal...
Source: New Zealand Herald - Business | 18 Dec 2008 | 1:00 am

Chrysler to shut all plants for a month

Chrysler said it would shut all 30 of its plants for at least a month in the latest sign of the growing travails of the US auto industry
Source: Financial Times - US homepage | 18 Dec 2008 | 12:46 am

Business Briefs - Wednesday

Apple's French contract voided. The maker of the iPhone, iPod and Mac computer must let its popular smart phone be sold by wireless carriers other...

Source: Investor's Business Daily: BUSINESS | 18 Dec 2008 | 12:37 am

In Brief - Wednesday

CIT Group (CIT) fell 3.7% to 4.48 after it said it would raise $250 mil by issuing stock. CIT had generated $398 mil through a debt exchange as it...

Source: Investor's Business Daily: BUSINESS | 18 Dec 2008 | 12:37 am

A Better X-Ray Machine Makes Border Crossings Less Onerous

The border checkpoint between Tijuana, Mexico, and San Ysidro, Calif., is the busiest land port into the U.S. and could be one of the busiest...

Source: Investor's Business Daily: BUSINESS | 18 Dec 2008 | 12:37 am

Trends & Innovations - Wednesday

Restaurants serve bigger portions

Source: Investor's Business Daily: BUSINESS | 18 Dec 2008 | 12:37 am

After The Close - Wednesday

NIKE (NKE), a shoe and apparel maker, said its Q2 EPS rose 13% to 80 cents, beating views by 2 cents. Sales rose 6% to $4.59 bil, below views. It...

Source: Investor's Business Daily: BUSINESS | 18 Dec 2008 | 12:37 am

State Street's Anderson Says Assets for ETFs Fell in November

Source: Bloomberg - All Podcasts | 18 Dec 2008 | 12:34 am

Opec losing some of its clout

Here's how bad things are for Opec these days: It announced its largest-ever production cut this morning - and oil prices promptly slumped to US$40 a barrel, the lowest level in more than four years. Ministers of the 13-nation...
Source: New Zealand Herald - Business | 18 Dec 2008 | 12:30 am

Blues Traveler's New Album Is Style Change for Popper

Source: Bloomberg - All Podcasts | 18 Dec 2008 | 12:06 am

Jaguar Land Rover looks to Whitehall for cash lifeline

Jaguar Land Rover, the car manufacturer, has held talks with the Government about a possible US-style bailout, it emerged last night just as Chrysler said that it would halt all American vehicle production for at least a month.
Source: Latest Business News from Times Online | 18 Dec 2008 | 12:01 am

Japanese carmakers forced to hit brakes hard

Japanese carmakers piled more misery into the world's automotive markets with forecasts of tumbling profits at Honda and production cuts from Nissan.
Source: Latest Business News from Times Online | 18 Dec 2008 | 12:00 am

Analyst Heymann Sees GE Cutting Jobs to Sustain Earnings

Source: Bloomberg - All Podcasts | 17 Dec 2008 | 11:57 pm

Carnegie Mellon's Meltzer Sees No Deflation in U.S. Outlook

Source: Bloomberg - All Podcasts | 17 Dec 2008 | 11:53 pm

Blagojevich will not fill Senate vacancy

The governor of Illinois accused of trying to sell Barack Obama's vacant Senate seat will not use his constitutional powers to appoint anyone to replace the president-elect
Source: Financial Times - US homepage | 17 Dec 2008 | 11:41 pm

Bonuses tumble 80% at Goldman Sachs

Partners at Goldman Sachs are set to see their bonuses fall by up to 80% and the cash component of their year-end packages capped at $400,000, with the rest paid half in stock and half in options
Source: Financial Times - US homepage | 17 Dec 2008 | 11:40 pm

Hear: A Time To Be Reckless

On Tuesday, the Federal Reserve cut its key interest rate to the lowest on record. On Wednesday, we sort through what, exactly, that means.

Today on Planet Money:

-- Simon Johnson, former chief economist of the International Monetary Fund, explains what the federal funds target rate is, why anyone would want to change, how you do that, and what it means. Bonus: He loves the reckless feel of it.

-- But listener Joel Weyrick of Iowa still wants to know: Why would the Federal Reserve set a range for the new target rate, instead of just announcing a new solid number? Is this part of a new strategy?

Download the podcast; or subscribe. Intro music: Robyn Hitchcock's "I Often Dream of Trains." Find us: Twitter/ Facebook/ Flickr.

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Source: NPR Blogs: Planet Money | 17 Dec 2008 | 11:22 pm

VIX Index of U.S. Stock Option Prices Retreats 4.8% to 49.84

Source: Bloomberg - All Podcasts | 17 Dec 2008 | 10:14 pm

Marvin Goodfriend Says Fed to Focus on Inflation After Crisis

Source: Bloomberg - All Podcasts | 17 Dec 2008 | 9:50 pm

He's successful -- and undocumented

A small businessman who runs a car repair shop in Minneapolis is doing rather well these days, as customers try to extend the lives of their beaters. But he has a big obstacle to success -- he's an undocumented Mexican immigrant. Stephen Smith reports.
Source: Marketplace | 17 Dec 2008 | 9:41 pm

In financial crisis, it's still a democracy

There's been a lot of talk about how much it will cost to keep the Big Three automakers in business. But Commentator Robert Reich says there's more on the line than just money.
Source: Marketplace | 17 Dec 2008 | 9:41 pm

More harm than good in state cuts

A majority of states face massive budget deficits. Unlike the federal government, states have to balance their budgets. But the cuts needed to make that happen may only make things worse. Sam Eaton reports.
Source: Marketplace | 17 Dec 2008 | 9:41 pm

Decoder: Futures

When futures traders buy grain, oil or other commodities, they're paying what they think those products will be worth in several weeks or months. How does the process work? Rico Gagliano explains in The Marketplace Decoder.
Source: Marketplace | 17 Dec 2008 | 9:41 pm

Time to get your taxes in order

You've got two weeks to get your finances in order, when it comes to what you'll be paying Uncle Sam in income taxes. Tess Vigeland talks with the Wall Street Journal's Tom Herman to get some helpful hints on reducing the tax bite.
Source: Marketplace | 17 Dec 2008 | 9:41 pm

How did SEC miss $50 billion fraud?

Bernard Madoff's alleged Ponzi scheme is just the latest high profile mistake made by the SEC. Chairman Christopher Cox has launched an internal probe, and there are many more investigations to come. Steve Henn reports.
Source: Marketplace | 17 Dec 2008 | 9:41 pm

Dollar drops on Fed rate cut

The dollar has dropped dramatically against key foreign currencies. It now stands at a 13-year low against the yen, and it's back to October lows against the euro. But currency experts expect the U.S. economy to bounce back before others, Jeremy Hobson reports.
Source: Marketplace | 17 Dec 2008 | 9:41 pm

OPEC makes record cut in production

Alarmed by the plummeting price of oil, OPEC ministers today announced a record cut in future output -- 2.2-million barrels per day beginning Jan. 1. Even so, prices on world markets hit four-year lows today. John Dimsdale explains why.
Source: Marketplace | 17 Dec 2008 | 9:41 pm

Rupkey Expects U.S. Economy to Stabilize by Mid-2009

Source: Bloomberg - All Podcasts | 17 Dec 2008 | 9:33 pm

Plant Cuts Everyone's Pay

I was just about to publish a very short letter from a semiconductor engineer who lives in Texas. He said the plant just announced a temporary 10 percent pay cut. The engineer writes that the cut is across the board.

And then another listener sent this news, about a 10 percent pay cut at another plant, Agilent, in Santa Rosa, Calif.

We asked if you were seeing falling wages. Clearly, some people are.

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Source: NPR Blogs: Planet Money | 17 Dec 2008 | 8:57 pm

5 Ways to Protect Yourself from Bankrupt Clients

It’s hard to say how many people are filing bankruptcy these days. Suffice to say that it’s become relatively common. As a freelancer involved with the media, I’ve been biting my nails about whether some publications will be in business long enough to pay up. If you’re in a similar situation, take note of these five steps to protect yourself:

1. Know the legalese. The same way you have to know a little French to get around Paris, it helps to know a little bit about the different types of bankruptcy filings your clients—both businesses and individuals—could make. Each type determines the way you file your claim to possibly reclaim the money owed to you:

2. Watch your accounts receivable like a hawk. Make sure nobody falls too far behind. If you’re concerned about a client’s financial health, gently try to pry more information from them. Here are a few examples of how to do this:

3. Specify terms in your contract and invoices. Most payments are due within 30 days of project completion. State your terms clearly at the bottom of your invoice. It not only serves as a reminder to your clients, but gives you a potentially valuable paper trail.

4. Be your own collections agency. If your client doesn’t pay on time, be aggressive about following up. Don’t hesitate to contact them daily by phone or email if it gets bad. Threaten legal action if necessary. It’s not pretty, but you need your money. Better to pester than go hungry.

5. Prepare for the worst. It’s clichéd advice in these times, but worth repeating. If your client goes bust, and you follow all the necessary procedures, you may still end up with a stack of legal documents on your desk, and little else. Like Clint Eastwood said, “Hope for the best, and prepare for the worst.” If you can’t afford a lawyer, at least make sure you can afford to see yourself through until the next gig.

Source: Business Pundit | 17 Dec 2008 | 8:53 pm

Blodget Says SEC Has `A Lot to Answer For' Regarding Madoff

Source: Bloomberg - All Podcasts | 17 Dec 2008 | 8:13 pm

Can I Get A Zero-Percent Loan?

Yesterday the Federal Reserve lowered its target for the federal funds rate to between zero percent and 0.25 percent. How will this affect the rate consumers pay for home and auto loans?

Not much -- at least in the short-term. Three things distinguish the loans affected by the rate from the ones you and I take out:

1. The loans are made between large banks, not to companies or consumers.
2. The value of the collateral is relatively stable, unlike a car, which declines in value.
3. The loans' duration is very short, typically one day, whereas home loans can last for decades.

Federal Reserve Chairman Ben Bernanke hopes that banks will lower interest rates for retail and commercial borrowers. But because you and I are not large financial institutions, we will always pay more for our money than they do.

Bonus: Consumers can get zero-percent loans from auto financiers. Before you run to the dealership, make sure to run the numbers first. While it is true that you won't be making interest payments, you will inevitably pay a higher up-front price, which ends up earning the financier more, even in the long term.

Just remember -- in the world of finance, there's no such thing as a free lunch.

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Source: NPR Blogs: Planet Money | 17 Dec 2008 | 7:27 pm

Credit Suisse's Lantz Says Treasury-Only Money Funds in `Bind'

Source: Bloomberg - All Podcasts | 17 Dec 2008 | 7:11 pm

Winslet on Films, Holzer's Work, Rock Hall of Fame in NYC

Source: Bloomberg - All Podcasts | 17 Dec 2008 | 6:55 pm

Link Of The Day: LOLFed

The latest timesink at Planet Money is LOLFed. Applying the grammar and vocabulary of LOLCats to the follies of modern finance (especially those of the Federal Reserve), it provides a rather postmodern reflection on our current state of affairs. If the jokes don't make sense because of the LOLCat terminology, get help here; if it's because of the names and faces, you're in the right place.

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Source: NPR Blogs: Planet Money | 17 Dec 2008 | 6:36 pm

Listener: Job Cuts 401(k)

Yesterday we asked whether any of you are experiencing falling wages. Economist Ian Shepherdson reminded us that true deflation is a combination of falling prices and falling wages.

Check the comments on that item, if you haven't lately. What you're telling us is that you're seeing an overall drop in compensation -- but that sometimes, it's a bit disguised. David writes?

My company is a large (60,000+ employees), well known manufacturer of consumer, government and military electronics. This morning, they announced that in 2009 they will suspend matching employee 401K contributions. I can still contribute to my 401K, but the company wont match any of my contribution. It also canceled bonuses for 2009 (which was expected).

Even if you take into account that not all employees get 401k benefits, thats a pay cut for thousands of employees in the US.

In addition, the top two officers of the company have voluntarily taken 25% pay cuts.

I guess that means deflation is here for me at least...

Interesting how they hit the 401k first. I guess they think that people who are not planning to spend the money immediately are less likely to miss it.

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Source: NPR Blogs: Planet Money | 17 Dec 2008 | 6:22 pm

Fed Prints Money for Banks to Hoard, Delaying Inflation

The New York Times covers the Fed’s rate cut yesterday. A few interesting tidbits from the article:

…the Fed bluntly announced that it would print as much money as necessary to revive the frozen credit markets and fight what is shaping up as the nation’s worst economic downturn since World War II.

Since September, the Fed’s balance sheet has ballooned from about $900 billion to more than $2 trillion as it has created money and lent it out. As soon as the Fed completes its plans to buy mortgage-backed debt and consumer debt, the balance sheet will be up to about $3 trillion.

“Right now, the crisis is created by the huge demand by banks for hoarding cash,” (says one expert.) “The Fed is providing cash, and the banks want to hoard it. When things start returning to normal, the banks will want to start lending it out. If that much money is left in the monetary base, it would be extremely inflationary.”

So we’re deflating in order to help banks bulk up their reserves enough to make them feel comfortable lending. After that, the Fed will have printed too much money, so it’ll be inflation city. Pray tell, how is this helping Main Street at all?

Credit Writedowns suggests an alternative scenario:

…what if the Fed came to my CFO and said we’ll trade you some of the Treasurys you own in your short-term investments for dollars? For the right price, we would say yes. Where do the dollars come from? Out of thin air of course. The Fed creates them in order to buy my assets. This is called quantitative easing. It’s basically inflating the money supply plain and simple. The difference between quantitative easing and low interest rates is that easing actually increases my reserves, giving me more money to lend.

To my mind, lowering interest rates in the aftermath of an enormous credit bubble where institutions have just destroyed $1 trillion in capital is wrong. It distorts lending decisions such that yet more money will eventually be lent out imprudently. The only way to increase credit availability is by getting reserves into the system. And normally you do that by making a profit. However, profits are hard to come by for financial institutions right now. So the Fed can step into the breach adding reserves by purchasing assets with money that the central banks creates.

He says this is inflationary, but so is what we’re doing now, in the longer term. Bernanke’s religious anti-inflationary policies remind me of Greenspan’s fervent free-market policies, which also didn’t end up working out…

Source: Business Pundit | 17 Dec 2008 | 5:21 pm

Give Yourself the Gift of the Personal MBA

We offer a lot of book lists here at Business Pundit. Business books give you access to some of the most successful business minds. You can read them at your own pace relatively inexpensively. And no matter what education you pursue, reading makes up a huge part of the learning. This is the logic behind the PMBA (personal MBA), which is essentially a huge list of great business books.

What is a PMBA?

Developed from an original list of books recommended by Seth Godin the Personal MBA is designed to help you educate yourself about advanced business concepts on your own time and without going into a classroom or into debt.

According to the PMBA site:

The PMBA is more flexible than a traditional MBA program, doesn’t involve going into massive debt, and won’t interrupt your income stream for two years. Just pick up one of these business books, learn as much as you can, discuss what you learn with others, then go out into the real world and make great things happen.

How Far Can You Go With Books?

I’m a huge fan of experiential learning. I really think most people need to get out there and get their hands dirty to fully understand something. So what good is reading a bunch of books? Presumably a person who’s going after this PMBA is highly motivated to learn the subjects the reading list covers. And presumably this person has a job - and it could be almost any job - that will allow at least some application of the new knowledge being acquired.

You don’t have to be the head of HR to apply the techniques of team building to your current position. And you don’t have to be a CEO to practice strategy planning. Taking on challenging roles in the job you have now, or even in volunteer opportunities, can build experience into the PMBA.

What do you have to lose?

Oliver Roland at Books That Can Change Your Life is already a successful entrepreneur. He’s set a goal to read 52 books off the PMBA list in 52 weeks, and he’s blogging the experience. I dare you to take a look at this post and not be inspired to read more. Maybe you don’t need to commit to the whole list, but maybe you could do 12 of the books on the list in a year.

So what? Who cares if you study your way to a PMBA? If you don’t value knowledge and education for its own sake, just imagine the conversations you could start with - oh I don’t know - hiring managers?

Source: Business Pundit | 17 Dec 2008 | 4:25 pm

Sports On The Skid?

The Arena Football League, the "bearded lady of the gridiron," recently announced that it was canceling its 2009 season. Deep in debt, the league looks to restructure, but the chances that the wacky alternative to the NFL can recover look grim.

If you're like me, when you open the morning paper you skip past the national, local and business sections to the one that really matters: sports. With other news taking up so much attention, it's time to see how our beloved, beleaguered teams are doing.

Major League Baseball

The league as a whole is coping relatively well -- it recently refinanced the pool of credit that its teams can tap to pay salaries if they do not have the cash on hand. Managers were initially concerned because two-thirds of the pool consisted of commercial paper, the normally secure security that allows companies to sell debt directly to investors (rather than to banks). The market for these securities suffered a rare breakdown in September after the bankruptcy of Lehman Brothers, and the banks covering the other third of MLB's credit pledged to step in should such a failure take place in the future.

However, certain teams are not doing as well. The Chicago Cubs suffered a one-two punch when their owner, the Tribune Corporation, declared bankruptcy last Monday, only to be labeled the next day as a pawn in the allegedly corrupt dealings of Illinois Gov. Rod Blagojevich. Also hit last week were the long-suffering New York Mets, whose owner, Fred Wilpon, was among the victims of indicted Ponzi schemer Bernie Madoff. This has not been the Mets' year for good P.R. The refusal of Citigroup to relinquish its $500 million commitment for naming rights to the team's new ballpark has drawn public scorn, as the company received a $20 billion equity injection from the federal government (two City Councilmembers suggest renaming it "Citi Taxpayers Field". Mets fans might have some sympathy from their St. Louis counterparts sitting in a stadium whose namesake, Anheuser-Busch, was bought by the Belgian brewer InBev. The Yankees, of course, are still the Yankees.

National Basketball Association

Despite cutting 80 of approximately 900 staff positions, the league is in relatively good shape. In fact, star player Doug Christie even pitched in to bring attention to the crisis-stricken financial sector -- by buying 3000 shares of AIG stock! Part of the NBA's relative stability might stem from its salary cap, which limits teams' budget for players; this prevents teams located in big, wealthy markets from buying up all of the stars, thereby keeping the league more competitive. According to Forbes, management prowess separated successful teams such as the Rockets and Trail Blazers from the less successful.

National Football League

After promotional gambits like holding games overseas, the league recently cut 150 of its staff of 1,100. The tight credit markets have encumbered teams' efforts to raise financing for new stadiums. The 2009 Super Bowl will look very different from its recent predecessors: historically big spender General Motors has not purchased ad slots. On the upside, career sites Monster.com and CareerBuilder.com have added commercials.

National Hockey League

According to reports, this league is in trouble -- economists at a recent league meeting gained the monikers "Dr. Doom and Gloom." Teams in smaller markets are in particular trouble. While hockey may be more vulnerable to economic downturns than baseball, basketball or football, the NHL might be the best-prepared to deal with declining revenues: after a labor dispute led to the cancellation of the 2004-05 season, the league successfully restructured its finances and emerged with a more competitive offering for fans and profitable investment for financiers. Maybe more teams should copy the Blues' Fan Bailout Plan?

NASCAR

The auto racing circuit has been hit hard. It has been more dependent than other sports on corporate sponsorship, and one-third of the $1.5 billion it received for the 2008 racing season came from automakers. In response to anticipated revenue declines, garages are cutting both the number of cars they race and the size of the crews. Nevertheless, fans are worried that it may not be enough. As USC professor David Carter quipped, the Daytona 500 race "could end up being the Daytona 50 if we're still talking about this (recession) 10 years from now."

For the Win:

The failures in the financial services industry have left a constellation of team sponsorships in limbo. Retail banks Washington Mutual and Wachovia, acquired in distress by JPMorgan Chase and Wells Fargo, respectively, sponsored a total of 14 MLB, NBA and NFL teams, as well as a host of events and tournaments. It is still unclear whether the acquirers, who have their own sponsorships, will continue the relationships.

Sports teams have historically done well during bear markets: "It's like booze and movies," notes sports banker John Moag. "Psychologically, people do not want to give it up." However, with Americans' credit cards at their limits and mortgage payments piling up, going to the game may become another expense to cut.

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Source: NPR Blogs: Planet Money | 17 Dec 2008 | 4:07 pm

Oldest Worker in the World: Who Needs Retirement?

100-year-old Mildred Heath is one of those rare people who really doesn’t want to retire:

Mildred Health, a 100-year-old newspaper woman who comes to work on an electric scooter and works 30 hours a week at the Overton Observer in Overton, Nebraska, has been honored as America’s Oldest Worker for 2008 by Experience Works, which says it is the nation’s largest provider of training and employment services for older workers.

Love for life and for working with people is what has kept this newspaperwoman going in the 85-year-long career she started in 1923 at the age of 15.

At age 100 plus, despite the fact that she has outlived her three daughters and has four grandchildren, three great-grandchildren and one great-great-grandchild, Mrs. Heath has no plans for retirement and talks about all the things she wants to do, at work and at home.

The best advice financial planners could give us these days is to “be like Mildred Heath.” Too bad she only represents 0.01% of the population, at most.

Source: Business Pundit | 17 Dec 2008 | 3:34 pm

Low, Lower, Lowest

I'll drop more news after the jump, but first, the banner headline. From the New York Times: Fed cuts key rate to a record low. First sentence:

The Federal Reserve entered a new era on Tuesday, lowering its benchmark interest rate virtually to zero and declaring that it would now fight the recession by pumping out vast amounts of money to businesses and consumers through an expanding array of new lending programs.

We aim to talk a lot more about this on today's podcast.

From the Financial Times: OPEC said to agree to record production cut/ Yen hits 13-year high against the dollar.

From the Korea Herald: Samsung cuts production of display panels for flat-screen TVs.

From the Atlanta Journal Constitution: Newell Rubbermaid to cut up to 1,000 jobs.

From the Washington Post: Two-thirds of Americans say they've been hurt by the recession/ SEC chief says agency ignored warnings about Madoff.

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Source: NPR Blogs: Planet Money | 17 Dec 2008 | 2:47 pm

Morgan Stanley's Rough Road

Morgan Stanley's fourth quarter wasn't as bad as it was last year, but it still wasn't good enough to please Wall Street.

The bank narrowed its loss for the quarter to $2.3 billion from $3.6 billion, but the $2.34 per share loss was much wider than the 34-cent loss analysts expected. Still, it was able to report net income for the full year of $1.7 billion.

Making matters worse, Moody's downgraded Morgan's senior debt rating by one notch, citing the bank's fourth-quarter loss and the overall economic outlook.

Looking forward, the firm expects to realize $2 billion in cost savings from its previously announced headcount reduction. It also said it hired two senior executives from Wachovia to help launch its retail banking group. Earlier this year, Goldman Sachs and Morgan Stanley registered as bank holding companies and are now working on attracting the requisite amount of deposits under new regulations.

"The environment will continue to be challenging," said chief executive John Mack in a statement. "But we have successfully evolved and adapted our business across numerous cycles, and the current market dislocation gives us openings—including through our strategic alliance with Mitsubishi UFJ—to build market share, seize new opportunities, and ultimately deliver long-term value to our shareholders."

Mack is forgoing a bonus for the second consecutive year.

Morgan's results were particularly hit hard by the decline in investment banking activity, including M&A advisory and underwriting businesses. Its asset management arm also suffered a blow by the declining global markets. Most of the previously announced headcount reduction will come out of these divisions.

Shares in Morgan Stanley fell 4 percent in morning trading.  

Related Links
Wall Street's New Realities
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Source: Portfolio.com: Top 5 | 17 Dec 2008 | 2:30 pm

Madoff Golf Scores: Also Too Good?

Greg Newton over at the blog NakedShorts points out that Bernard Madoff, in addition to earning suspiciously steady returns for investors, also got very, very consistent golf scores..

I had a round of emails with NPR's Mike Pesca, who thinks way faster than he can type. I'll leave the misspellings in:

(PESCA) I would say it is POSSIBLY to shoot that consistently -- but for a 10 handicap golfer to never deviate -- its smells very very fishy. Lets put it this way -- over these 20 rounds he averages 84.65 -- only 3 of the 20 rounds were more than 2 shots better or worse than that. Compare to a pro -- chris dimarco for instance e- this guy has come in second in 3 majors he's not as consistent as Bernie Madoff

(KESTENBAUM) to be fair, couldn't a lot of dimarco's variation be due to the fact that those games are played on different courses? madoff's scores are all from fresh meadow country club.

(PESCA) Right, i just lkooked at cvertain 4 day scores on certain courses. Wider swings. I kjust need to calcuolate standard deviation. Can you do that?

Extra credit if anyone wants to crunch the numbers.

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Source: NPR Blogs: Planet Money | 17 Dec 2008 | 2:21 pm

OPEC Squirms

Companies are cutting jobs, central banks are cutting interest rates, and OPEC is cutting its daily production limits.

All are trying to catch up with the runaway train that is the global recession. In OPEC's case, it appears to be too little, too late.

Oil ministers meeting in Oran, Algeria, have agreed on a production cut of 2.2 million barrels a day, which would be the steepest reduction by the cartel since 1982. It is also the third production cut in the last three months and represents a cut of 4.2 million barrels since September.

Non-OPEC members Russia and Azerbaijan are also expected to agree to the new quotas, reducing their production by 600,000 barrels a day. That could produce a total cut of 3 percent of the daily global output.

Yet demand appears to be collapsing at an even faster rate. Not only are the United States and some of the biggest economies in Europe in recession, but China and India, whose insatiable thirst for oil drove prices above $100 a barrel, are showing signs that their economies are slowing.





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Source: Portfolio.com: Top 5 | 17 Dec 2008 | 1:30 pm

Yale Beats Harvard

Yale 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 be 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 midyear 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."





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Source: Portfolio.com: Top 5 | 17 Dec 2008 | 1:00 pm

S.E.C.: Our Bad

The 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.


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Source: Portfolio.com: Top 5 | 17 Dec 2008 | 12:30 pm