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Lyondell Chemical asks to pay non-US creditors firstLyondell Chemical, the bust US arm of Dutch chemicals company LyondellBasell, asked a New York court for permission to pay its foreign creditors $350 million amid fears that suppliers will cut off its access to raw materials or sue it.$Source: Latest Business News from Times Online | 8 Jan 2009 | 11:00 pm Jobs in focus on Wall StreetStocks were set to open lower Thursday, with the employment picture and retail sector at the center of Wall Street's attention.Source: Business and financial news - CNNMoney.com | 8 Jan 2009 | 12:53 pm Wal-Mart sales disappoint, cuts forecastNEW YORK (Reuters) - Wal-Mart Stores Inc reported a disappointing 1.7 percent rise in December sales at its U.S. stores open at least a year, and the world's largest retailer cut its quarterly earnings outlook on Thursday.Source: Reuters: Business News | 8 Jan 2009 | 12:51 pm Lenovo cuts jobs, restructuresHONG KONG (Reuters) - Lenovo Group, the world's fourth-biggest PC maker, forecast a quarterly loss as China's slowing economy hit sales, and said it will axe 2,500 jobs as part of a restructuring to cope with falling demand for computers.Source: Reuters: Business News | 8 Jan 2009 | 12:50 pm Indications: U.S. stock futures turn lower after Wal-Mart warningU.S. stock futures took a turn for the worse Thursday as retailing giant Wal-Mart Stores scaled back earnings expectations, citing a worse-than-expected December performance.Source: MarketWatch.com - Top Stories | 8 Jan 2009 | 12:50 pm Spain jobless hits 12-year highSpain's unemployment total hit a 12-year high in 2008, while separate data shows the eurozone's jobless rate rose in November.Source: BBC News | Business | World Edition | 8 Jan 2009 | 12:47 pm Interest rates hit all-time lowThe Bank of England cuts rates to 1.5%, the lowest level in its 315-year history, as it continues efforts to help the economy.Source: BBC News | Business | World Edition | 8 Jan 2009 | 12:45 pm World stocks slide amid economic gloom (AP)
Source: Yahoo! News: Stock Markets News | 8 Jan 2009 | 12:45 pm Wal-Mart (WMT) Gets Stunned By International
The world's largest retailer cut its earnings estimates for Q4 to a range of $.91 to $.94 from its previous figure of $1.03 to $1.07. The champion of Wal-Mart's earnings gains over the last four years knifed it in the back. Wal-Mart International has turned in sales improvement of 15% to 20% on a very consistent basis. In December of this year, that number fell by 10.4% to $10.7 billion. For the entire company, revenue was flat at $47.5 billion, which means that Wal-Mart US carried all of the load. Wal-Mart's two core overseas regions, Mexico and China, turned in lackluster and disappointed results. The numbers raise the question of whether the miraculous turnaround at the company may be slowing. It has always been assumed that the US, which has posted very modest growth over the last few years, would be the largest challenge that the firm had to overcome. If international operations stay weak though 2009, Wal-Mart simply cannot do well. Douglas A. McIntyre Source: 24/7 Wall St. | 8 Jan 2009 | 12:44 pm Retailers report dismal December sales (AP)AP - Retailers are reporting dismal sales for December, confirming fears that the holiday season was the weakest in four decades.Source: Yahoo! News: Business | 8 Jan 2009 | 12:43 pm Stock futures slide after Wal-Mart disappointsNEW YORK (Reuters) - Stock index futures slid on Thursday after Wal-Mart Stores posted disappointing December sales and forecast a fourth-quarter profit shortfall, compounding investors' worries about the deepening recession.Source: Reuters: Business News | 8 Jan 2009 | 12:43 pm Stock futures slide after Wal-Mart disappoints (Reuters)
Source: Yahoo! News: Stock Markets News | 8 Jan 2009 | 12:43 pm Stock futures slide after Wal-Mart disappoints (Reuters)
Source: Yahoo! News: Business | 8 Jan 2009 | 12:43 pm A $2 trillion bet on powering AmericaFor years we've been hearing about the nation's crumbling and outdated electricity grid.Source: Business and financial news - CNNMoney.com | 8 Jan 2009 | 12:42 pm Costco's same-store sales fall 4 percent (Reuters)
Source: Yahoo! News: Business | 8 Jan 2009 | 12:40 pm SFO opens probe into Madoff's UK businessThe Serious Fraud Office (SFO) has launched an investigation into the UK business of Bernard Madoff, the US fund manager behind an alleged $50 billion fraud.$Source: Latest Business News from Times Online | 8 Jan 2009 | 12:38 pm Dismal December for merchantsIf retailers were hoping for some respite from a now protracted slump in monthly sales, it didn't happen in December.Source: Business and financial news - CNNMoney.com | 8 Jan 2009 | 12:38 pm TD Bank Financial Group Comments on TD AMERITRADE's Announced Acquisition of thinkorswimTORONTO, Jan. 8 /PRNewswire-FirstCall/ - TD Bank Financial Group (TSX, NYSE: TD) today commented on an earlier announcement by TD AMERITRADE Holding Corporation (NASDAQ: AMTD) ofSource: RSS feed - channel BNewsBusiness | 8 Jan 2009 | 12:36 pm Danger: high levels of company stockQuestion: I'm 48 years old and have about 90% of my 401(k) invested in my company's stock and the rest in an international equity fund. I want to diversify further, but don't know where to turn. Any suggestions? --J.D., Glenville, New YorkSource: Business and financial news - CNNMoney.com | 8 Jan 2009 | 12:35 pm Can't Afford to Get Divorced? Real Estate Law Expert Offers Steps to Protect EquityNASHVILLE, Tenn., Jan. 8 /PRNewswire/ -- Before the housing market crash, divorcing couples used to fight over who would get to keep the house. Now they fight over who will get...Source: RSS feed - channel BNewsBusiness | 8 Jan 2009 | 12:35 pm Bank of England cuts key interest rate to all-time lowThe Bank of England on Thursday drops its benchmark interest rate to the lowest level since the central bank’s founding in 1694, as policy makers fire yet another salvo in the battle against a deep and potentially lengthy recession.Source: MarketWatch.com - Top Stories | 8 Jan 2009 | 12:34 pm Stock futures mixed ahead of economic data (AP)
Source: Yahoo! News: Stock Markets News | 8 Jan 2009 | 12:33 pm Sears (SHLD): A Ray Of Sunshine
Same-store sales at Sears stores fell 12.8%. As odd as it may see, K-Mart did much better with the comparable figure being down only 1.1%. That added up to a weighted average for the whole company of a 7.1% drop. Sears did have some unexpected good news. According to the company, The retailer currently expects that net income for the quarter ending January 31, 2009 will be between $300 million and $380 million, or between $2.44 and $3.09 per fully diluted share. Last year that number was $426 million, or $3.17 per fully diluted share. This year's number is not much of a drop given how horrible the holiday retail season. Sears may be in for a bit of progress in 2009. Douglas A. McIntyre Source: 24/7 Wall St. | 8 Jan 2009 | 12:32 pm Citigroup, U.S. senators in mortgage legislation talks: report(Reuters) - Citigroup Inc is leading other lenders in advanced talks with key U.S. senators on legislation that would allow judges to set new repayment terms for millions of mortgage holders who wind up in bankruptcy court, the Wall Street Journal said, citing people involved in the talks.Source: Reuters: Business News | 8 Jan 2009 | 12:31 pm Stimulus may spur jobs - abroadPresident-elect Barack Obama this week proposed a massive conomic stimulus program with a lofty goal amid a deep recession: create 3 million jobs.Source: Business and financial news - CNNMoney.com | 8 Jan 2009 | 12:31 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 | 8 Jan 2009 | 12:31 pm FNDS3000 Corp Announces Goldsmith as ChairmanSherington Holdings LLC injects a total of $3 million into FNDS3000 PONTE VEDRA BEACH, Fla., Jan. 8 /PRNewswire-FirstCall/ -- FNDS3000 Corp. (OTC Bulletin Board:...Source: RSS feed - channel BNewsBusiness | 8 Jan 2009 | 12:30 pm Signet Jewelers Ltd Christmas Trading StatementProfits expected to be within the range of market forecasts HAMILTON, Bermuda, Jan. 8 /PRNewswire-FirstCall/ -- Signet Jewelers Ltd (NYSE and LSE: SIG), the...Source: RSS feed - channel BNewsBusiness | 8 Jan 2009 | 12:30 pm RPM Reports Decline in Sales, Net Income for Fiscal 2009 Second Quarter- Industrial segment sales continue growth, but EBIT declines as pace slows - Consumer segment posts declines in sales and EBIT - Liquidity, capital position and cash flow...Source: RSS feed - channel BNewsBusiness | 8 Jan 2009 | 12:30 pm Helen of Troy Limited Reports Third Quarter and Nine Months ResultsEL PASO, Texas, Jan. 8 /PRNewswire-FirstCall/ -- Helen of Troy Limited (Nasdaq: HELE), designer, developer and worldwide marketer of brand-name personal care and...Source: RSS feed - channel BNewsBusiness | 8 Jan 2009 | 12:30 pm Finlay Enterprises Reports Sales for the November/December PeriodNEW YORK, Jan. 8 /PRNewswire-FirstCall/ -- Finlay Enterprises, Inc. (OTC Bulletin Board: FNLY), a leading retailer of fine jewelry operating luxury stand-alone specialty jewelry...Source: RSS feed - channel BNewsBusiness | 8 Jan 2009 | 12:30 pm Bankrate: Mortgage Rates Flirt with Record LowsNEW YORK, Jan. 8 /PRNewswire-FirstCall/ -- Mortgage rates fell sharply in the first week of 2009, with the average 30-year fixed mortgage rate plummeting to 5.33 percent.Source: RSS feed - channel BNewsBusiness | 8 Jan 2009 | 12:30 pm Analyst Downgrade Onslaught Continues (ASML, CMG, FORM, GFIG, ICE, KLAC, MSSR, MPEL, MRG, PEET, PRXI, PHM, RGLD, JAVA, TCK, TER, UDR, VNO)
Jon C. Ogg Source: 24/7 Wall St. | 8 Jan 2009 | 12:29 pm FTSE 100 down 44.16 at 4,463.35 (AP)AP - Share prices on the London Stock Exchange were lower Thursday.Source: Yahoo! News: Stock Markets News | 8 Jan 2009 | 12:29 pm Wal-Mart Reports December SalesBENTONVILLE, Ark., Jan. 8 /PRNewswire-FirstCall/ -- Wal-Mart Stores, Inc. (NYSE: WMT) reported net sales for the December and year-to-date sales periods as follows (dollars in...Source: RSS feed - channel BNewsBusiness | 8 Jan 2009 | 12:29 pm Europe Markets: Shares in Europe fall for second straight sessionStocks in Europe dropped Thursday, with mineral extractors and banks taking the brunt of the losses as worries were reignited about the health of the global economy.Source: MarketWatch.com - Top Stories | 8 Jan 2009 | 12:29 pm HSBC sees U.S. stocks best bets in 2009TAIPEI (Reuters) - HSBC , Europe's biggest bank, said on Thursday U.S. stocks were the best bets in 2009 due to the healthy profits some U.S. firms had made over the past two years, though a big sell-off was possible through March.Source: Reuters: Business News | 8 Jan 2009 | 12:27 pm MarketWatch First Take: Bank of England harkens back to William and Mary's reignThe obvious question to ask after the Bank of England cut interest rates to the lowest level since the creation of the central bank in 1694: what were the rates back then?Source: MarketWatch.com - Top Stories | 8 Jan 2009 | 12:21 pm London Markets: Shares in London weaker, key interest rate falls to record lowLondon shares weakened on Thursday, a day when the Bank of England cut its key interest rate by half a percentage point to its lowest level ever.Source: MarketWatch.com - Top Stories | 8 Jan 2009 | 12:18 pm ATF Names New Special Agent in Charge for New York - Ron Turk To Lead the Fight Against Violent CrimeNEW YORK, Jan. 8 /PRNewswire-USNewswire/ -- The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announces the appointment of Ronald B. Turk as the new Special Agent in...Source: RSS feed - channel BNewsBusiness | 8 Jan 2009 | 12:16 pm Verizon: Microsoft beats GoogleMicrosoft has beat out Google to become the default search provider on all phones on the Verizon Wireless network. Steve Ballmer made the announcement to a packed hall as part of his keynote address at the 2009 Consumer Electronics Show in Las Vegas on Jan. 7. Starting in the first half of 2009, Microsoft will power all search on Verizon Wireless devices and serve up the advertising.Source: Business and financial news - CNNMoney.com | 8 Jan 2009 | 12:12 pm Movers & Shakers: Thursday's biggest gaining and declining stocksAmong the companies whose shares are expected to see active trade in Thursday's session are the retailers – including Bed Bath & Beyond, Costco, Sears, Williams-Sonoma and others – as well as Dell, EMC, Immucor, Manitowoc and PTC.Source: MarketWatch.com - Top Stories | 8 Jan 2009 | 12:07 pm Dell to axe 1,900 jobs in Ireland as it moves production eastComputer giant Dell, Inc. on Thursday says it will axe 1,900 jobs at its main Irish manufacturing plant and move the bulk of its production for Europe, the Middle East and Africa to Poland as part of its cost-cutting program.Source: MarketWatch.com - Top Stories | 8 Jan 2009 | 12:03 pm Bank cuts interest rate to all-time low of 1.5%The Bank of England today ordered another half-point cut in interest rates to just 1.5 per cent, the lowest in 314 years, as it kept up its aggressive campaign to breathe life into the stalled economy.Source: Latest Business News from Times Online | 8 Jan 2009 | 12:00 pm Intel issues 2nd warningIntel issued another revenue warning Wednesday, blaming the weak demand for its technology products, and said that it expects to lose more than $1 billion on stock investments.Source: Business and financial news - CNNMoney.com | 8 Jan 2009 | 11:54 am Activist Burkle Going After Whole Foods (WFMI)
Burkle's filing noted that it sees substantial opportunities for the company to improve operations and its pricing image while maintaining its high-quality product offering. It has apparently been acquiring shares since November 24 as it believes that company is undervalued. Yucaipa is noting the activist stance rather than a passive investment stance right from the start. The filing noted that the firm intends to directly communicate with Whole Foods' board of directors and its management, and noted that it may communicate with other shareholders regarding the company. It also noted that it may solicit or vote its shares to approve an extraordinary transaction such as merger or consolidation or look to make changes to the composition or size of the board of directors. Burkle will probably also want to make sure he keeps founding CEO John Mackey from posting anonymous messages on the web. Whole Foods closed at $10.01 yesterday and its 52-week trading range $7.04 to $42.48.
Jon C. Ogg Source: 24/7 Wall St. | 8 Jan 2009 | 11:53 am China reportedly weighing new rules on overseas investmentsChina's drafting rules that will require domestic companies to get approval from state officials before making overseas investments of $100 million or more, according to a media report.Source: MarketWatch.com - Top Stories | 8 Jan 2009 | 11:53 am Bank of Ireland to sharply cut U.K. mortgage bookBank of Ireland will cut its U.K. mortgage book “significantly” as part of a change in the focus of its business operations, the lender says.Source: MarketWatch.com - Top Stories | 8 Jan 2009 | 11:44 am 'No progress' in Europe gas talksTalks in Brussels to try to end the row disrupting Europe's gas supplies end with no apparent progress.Source: BBC News | Business | World Edition | 8 Jan 2009 | 11:37 am Writing Off What Should Have Been Written Off Long Ago
Most corporations will present these "accounting actions" as non-cash charges, which means shareholders should ignore them and go back to being desperate about the economy and their disappearing portfolios. That would be a mistake. According to The Wall Street Journal, "Investors may choose to look through such non-cash charges." Yes, the corporate party line. Time Warner wrote down $25 billion in assets. It had carried some of its units on the books for too much money. The values of assets across most industries is falling. Too many companies carry a ton of " good will" on their books. It was always a bit of smoke and mirrors used to make assets look more valuable than they probably were. But, that bit of fun is over. The write-downs are an acknowledgment that runs the length and breadth of the economy. American corporate assets are worth hundreds of billions of dollars lees than they were a year ago. There may be no cash involved, but the devaluing is real and it tells a real story. What corporations once said was very valuable is moving into the valueless column. American assets are moving to fire sale levels, and there is no one to buy them. That means they are likely to keep falling. Douglas A. McIntyre Source: 24/7 Wall St. | 8 Jan 2009 | 11:36 am Dell to shed 1,900 jobs in IrelandWorld's number two PC maker will cut about two thirds of jobs at its manufacturing plant in Limerick in the west of IrelandSource: Financial Times - US homepage | 8 Jan 2009 | 11:35 am Intel in second revenue warningChip maker Intel cuts its fourth-quarter revenue forecast again as spending on computers slows.Source: BBC News | Business | World Edition | 8 Jan 2009 | 11:28 am Web 2.0 is so over. Welcome to Web 3.0Financially speaking, Web 2.0 has been a total bust.Source: Business and financial news - CNNMoney.com | 8 Jan 2009 | 11:28 am Radical cheap: $1,000 homesThe real estate market is so awful that buyers are now scooping up homes for as little as $1,000.Source: Business and financial news - CNNMoney.com | 8 Jan 2009 | 11:28 am Citigroup (C) And The Senate: The Myth Of Saving The Mortgage Market
The plan is too clever for its own good. According to The Wall Street Journal, "any congressional Democrats and President-elect Barack Obama have supported changing the law, saying banks that have accepted federal aid should be doing more to help homeowners wrestling with debts they can't pay." There is a great deal of evidence, some of it from the federal government, that people with mortgages which have been renegotiated continue to default. There is some logic to that. Helping people who are broke does almost nothing. Someone who cannot make a $900 a month house payment is unlikely to be able to handle one at $600. Many of the people in question are out of work or have low paying jobs. Many have considerable consumer debt which makes them like almost every other citizen. The federal government cannot halt the decline in the housing market by resetting terms for homeowners who won't benefit from the process. Until the issues of having too many homes which are worth less than there mortgages and the rising rate of unemployment is addressed, the government is better off buying the homes and letting their current residents stay in them. Douglas A. McIntyre Source: 24/7 Wall St. | 8 Jan 2009 | 11:22 am European shares fall on global recession fears, job losses (AFP)
Source: Yahoo! News: Stock Markets News | 8 Jan 2009 | 11:21 am Aon fined £5.25m for making 'suspicious' paymentsOne of London's biggest insurance brokers, Aon, was today fined £5.25 million for anti-corruption failings after making suspicious payments to help win business in overseas jurisdictions.Source: Latest Business News from Times Online | 8 Jan 2009 | 11:15 am Goldman Sachs Sets The Sun (JAVA)
Jon C. Ogg Source: 24/7 Wall St. | 8 Jan 2009 | 11:13 am India IT firm faces scandal probeSatyam faces an investigation and sees its stock suspended after its boss quit over an accounting scandal.Source: BBC News | Business | World Edition | 8 Jan 2009 | 11:08 am As Lenovo Catches Cold, Dell (DELL) Gets Pneumonia
Lenovo, a merger of a Chinese PC company and the IBM (IBM) small computer business, relies very heavily on corporate hardware spending. Most of that spending is on hold, especially for replacement items the purchase of which can be pushed off for a year or more. Anyone who gambles and gambles to win, can expect thousands of more layoffs at Dell and a stock price which could fall another 30% to 40%. Its sales are almost certainly that bad. Douglas A. McIntyre Source: 24/7 Wall St. | 8 Jan 2009 | 11:06 am Does Nordic American Tanker Really Need New Cash? (NAT)
The company said that it would sell 3 million shares under its existing shelf registration and noted that Morgan Stanley would be the underwriter. It expects the deal to close on January 13. The common shares purchased by Morgan Stanley are being offered for resale from time to time in negotiated transactions or otherwise, at market prices on the New York Stock Exchange prevailing at the time of sale, at prices related to such prevailing market prices or otherwise.
We did see that acquisition earlier and that was a $56.7 million purchase, and that is after two more ship acquisitions which will give Nordic American a 15-ship fleet. But the 3 million shares represents roughly $100 million, and about $115 million if the 450,000 share overallotment option is exercised. Despite the whole Wall Street anointment, Nordic American's market cap is only $1.2 billion based upon yesterday's close of $35.49. Its 52-week trading range is $22.00 to $42.00. The company runs with a very lean balance sheet, so this will allow the company to do deals without having to burden itself with debt. The Company has no net debt and an unused credit line of $500 million. What is interesting is that on Monday the company said that this most recent acquisition was expected to be financed from out of its financial resources. So why are we harping on this? If you read through that press release of the acquisition there is essentially no clue that the company was going to announce an equity sale besides the CEO note that "further acquisitions are under planning."
Its dividend is actually all over the place and that yield advertised
of well over 10% looks a bit misleading if you see the history of its
quarterly dividends. The Company announced that its dividend per share
for the 4th quarter of 2008 is expected to be approximately $0.85 per
share. Here is a 3-year dividend history: The company has been a successful story. That cannot be ignored.. Nordic American said it will be able to continue to pay dividends.. It also said this week that the spot rate contracts entered into for 2009 are "well above the level achieved on average for the 4th quarter of 2008." You probably know how low shipping rates were in Q4. Our initial take is to take Mr. Hansson at face value here and believe that he is raising this cash merely to opportunistically have more gunpowder for acquisitions. Maybe the acquisition opportunities are suddenly just much more attractive or opportunistic as 2009 commenced. But with as high as the dividend is and with close to an extra 10% added to its shares, it is really hard to wonder if the company is giving itself more of a dividend cushion on top of its acquisition cash cushion. We'll know in time, but the timing of this capital raise after looking at the wording of its release just from Monday makes us question this sale at least with a footnote. One thing is for certain. If this offering is successful, you might as well get ready for other stock offerings from other shipping companies.
Jon C. Ogg Source: 24/7 Wall St. | 8 Jan 2009 | 11:05 am Zavvi announces 22 store closuresThe administrators at music, games and DVD retail chain Zavvi say they are closing 22 stores with immediate effect.Source: BBC News | Business | World Edition | 8 Jan 2009 | 11:03 am With New Windows 7, Microsoft (MSFT) Takes Another Wrong Step
The conventional wisdom is right Most software analysts are concerned that the PC market mutinied when Microsoft brought out its latest OS called Vista. Reviews were almost all negative and many businesses and consumers refused to upgrade, leaving Microsoft with a hole in its revenue. Yesterday, the company announced with great fanfare that it was releasing for consumer testing the next generation of its software, Windows 7. As it put the new product into the market for a series of test drives, According to the AP, "The new operating system -- which could be available for purchase on PCs within a year -- uses much of the same underlying technology as its predecessor, the much-maligned Vista. But Windows 7 aims to resolve many problems PC users had with Vista." But, Redmond has missed one of the most critical points about the next generation of software, Businesses, and some consumers, want products like Windows to run on remote servers and not on their own PCs. This allows for the purchase of cheaper machines which need less memory. It also allows users to access their files from any number of locations. Microsoft failed to say how it would drive remote computing with Windows 7, a feature that would allow it to more effectively compete with companies like Google (GOOG). Windows 7 may be a perfectly fine upgrade, but it is one that lacks the most important feature relative to the future of software. Douglas A. McIntyre Source: 24/7 Wall St. | 8 Jan 2009 | 10:56 am Dell set to cut 1,900 Irish jobsComputer giant Dell is to shed 1,900 of the 3,000 jobs at its manufacturing site in Limerick in the Irish Republic.Source: BBC News | Business | World Edition | 8 Jan 2009 | 10:50 am Two class action suits filed against Satyam in U.S.MUMBAI (Reuters) - Investors in Satyam Computer Services Ltd's American Depositary Receipts (ADRs) have filed two class action suits against the Indian software services firm, the law firms representing the investors said on Thursday.Source: Reuters: Business News | 8 Jan 2009 | 10:32 am Lenovo cuts jobs, restructures (Reuters)
Source: Yahoo! News: Business | 8 Jan 2009 | 10:28 am Venezuela resumes fuel aid to USVenezuela's US-based oil firm Citgo reverses Monday's decision to scrap a scheme providing heating oil to poor US families.Source: BBC News | Business | World Edition | 8 Jan 2009 | 10:17 am Festive trade cheers Sainsbury'sSainsbury's says it has just had its "best ever Christmas performance", with its sales rising 4.5% in the past three months.Source: BBC News | Business | World Edition | 8 Jan 2009 | 10:16 am Oil up to $43 after 12 percent fall overnightLONDON (Reuters) - Oil traded higher on Thursday, reaching $43 after diving 12 percent overnight, partly due to higher than expected U.S. crude stocks data that hardened evidence of weakening demand.Source: Reuters: Business News | 8 Jan 2009 | 10:13 am Asia job cuts amid economy woesTwo large Asian technology firms, TDK and Lenovo, announce a total of 10,500 job cuts after a fall in demand.Source: BBC News | Business | World Edition | 8 Jan 2009 | 10:03 am Ill. sec. of state feels the heat in Burris flap (AP)
Source: Yahoo! News: Stock Markets News | 8 Jan 2009 | 9:52 am Dell delivers blow to Ireland amid plant closureDell, the American computer giant, today delivered a further blow to Ireland's faltering economy when it announced plans to axe 1,900 jobs and shut down production in Limerick, its largest manufacturing plant outside the US.Source: Latest Business News from Times Online | 8 Jan 2009 | 9:51 am Windy City's retail downdraftChicago faces the worst slump in retailing growth in at least a decade - and residents of the Windy City and its suburbs are paying the price in the form of lost tax revenue for improvements and services.Source: Business and financial news - CNNMoney.com | 8 Jan 2009 | 9:47 am Obama's performance czar has tried to improve IRS (AP)
Source: Yahoo! News: Business | 8 Jan 2009 | 9:37 am Rockets fired from Lebanon hit IsraelSeveral rockets fired from Lebanon have hit northern Israel, raising fears that a second front could open up with Hizbollah, the Lebanese Shia group, when Israeli troops are engaged in a massive offensive in the Gaza StripSource: Financial Times - US homepage | 8 Jan 2009 | 9:32 am Land Securities sells Trillium at 25% discountLand Securities, Britain’s largest property company, has finally off-loaded Trillium, its outsourcing arm, more than a year after first announcing plans to sell the division and for 25 per cent less than the original price tag.Source: Latest Business News from Times Online | 8 Jan 2009 | 8:38 am Investors sue Satyam as chief disappearsInvestors in Satyam Computer Services filed two class action lawsuits against the company for rigging its financial statements as Indian media scrambled to locate its founder and chairmanSource: Financial Times - US homepage | 8 Jan 2009 | 8:27 am China shares fall on HK selloff of bank stocks (AP)AP - Chinese shares fell Thursday after a selloff of bank stocks in Hong Kong spread anxiety among investors.Source: Yahoo! News: Stock Markets News | 8 Jan 2009 | 8:24 am EU calls crisis talks as gas flow stopsEuropean leaders hope the talks with Alexei Miller, chief executive of Russia's Gazprom, and Oleh Dubyna, of Ukraine's Naftogaz, will lead to an immediate resumption of suppliesSource: Financial Times - US homepage | 8 Jan 2009 | 8:17 am Housing downturn hits L.A.-area rentsOverbuilding and foreclosures add to supply of units as the recession limits what people can pay. Christine Arce...Source: RSS feed - channel BNPaperBusiness | 8 Jan 2009 | 8:00 am Bush administration won't finalize rules for vehicle fuel economyThe decision draws criticism from the auto industry. The Obama administration will face April deadline. The Bush...Source: RSS feed - channel BNPaperBusiness | 8 Jan 2009 | 8:00 am The wrong people pay for Schwarzenegger's busted budgetThe state's wealthiest residents would make out just fine under his plan to cut services, hike taxes. The Schwarzenegger administration...Source: RSS feed - channel BNPaperBusiness | 8 Jan 2009 | 8:00 am Stock traders' tough floor routinePros feel pressure to get the best prices in buying and selling clients stocks The stock market has been placid...Source: RSS feed - channel BNPaperBusiness | 8 Jan 2009 | 8:00 am Stocks tumble on profit warnings, poor job outlookInvestors are spooked by news that employers slashed nearly 700,000 jobs in December and by warnings from Intel and Time Warner. The Dow loses 245 points, and oil falls the most in seven years. ...Source: RSS feed - channel BNPaperBusiness | 8 Jan 2009 | 8:00 am Continental Airlines uses biofuel on test flightThe carrier uses an algae-and-weed mix to help power one of two engines during a two-hour flight. Continental...Source: RSS feed - channel BNPaperBusiness | 8 Jan 2009 | 8:00 am Intel warns fourth-quarter sales will miss its forecastChip maker will come up about $500 million short of its projection for the fourth quarter. Even after sharply...Source: RSS feed - channel BNPaperBusiness | 8 Jan 2009 | 8:00 am Political wrangling bogs down economic stimulus packageEconomists warn that if the stimulus comes too late or loses focus, it could fall short of rescuing the nation. ...Source: RSS feed - channel BNPaperBusiness | 8 Jan 2009 | 8:00 am Time Warner to take $25-billion charge, report operating lossThe media giant is writing down the value of its cable, publishing and AOL assets. Media company Time Warner Inc...Source: RSS feed - channel BNPaperBusiness | 8 Jan 2009 | 8:00 am Paramount CEO Brad Grey signs on for five more yearsThe development is a vote of confidence in the studio chief, who acknowledges having had a bumpy run. Brad Grey,...Source: RSS feed - channel BNPaperBusiness | 8 Jan 2009 | 8:00 am Australian stocks: Market follows US downMELBOURNE - The Australian stock market closed lower today as the resources sector weakened, local data showed a fall in new home building approvals, and after United States markets fell overnight. At the 1615 AEDT close, the benchmark...Source: New Zealand Herald - Business | 8 Jan 2009 | 7:18 am Macy's to close 10 stores: report(Reuters) - Macy's Inc is expected to announce as soon as Thursday it will close 10 locations, the Wall Street Journal reported citing a person familiar with the matter.Source: Reuters: Business News | 8 Jan 2009 | 7:13 am HSBC sees U.S. stocks best bets in 2009 (Reuters)
Source: Yahoo! News: Business | 8 Jan 2009 | 7:00 am NZ stocks: Market fall follows grim jobs dataThe New Zealand sharemarket had only a restrained fall today after grim job news out of the United States contributed to steeper declines in overseas markets. According to ADP, a private employment service, US private employers...Source: New Zealand Herald - Business | 8 Jan 2009 | 6:58 am Citigroup, U.S. senators in mortgage legislation talks: report (Reuters)
Source: Yahoo! News: Business | 8 Jan 2009 | 6:58 am Currency: Dollar slides against majors during dayThe New Zealand dollar fell away against the greenback from a three-week high above US60.30c reached early today. By 5pm the kiwi was buying US58.53c, after heading steadily down during the day from the peak about 2.30am. Despite...Source: New Zealand Herald - Business | 8 Jan 2009 | 6:56 am Lenovo shares plunge on profit warningShares in Lenovo fell more than 20% after the Chinese PC maker issued a profit warning and said it would suffer a 'material loss' for the last quarter of 2008 amid slowing demand for computersSource: Financial Times - US homepage | 8 Jan 2009 | 6:21 am Lyondell gets over $2 billion in bankruptcy financingNEW YORK (Reuters) - Lyondell Chemical Co received bankruptcy court approval on Wednesday to access more than $2 billion in interim debtor-in-possession financing and an emergency $100 million loan, saying it had run out of cash.Source: Reuters: Business News | 8 Jan 2009 | 6:15 am Indian markets closed Thursday for holiday (AP)AP - Trading on India's stock markets was closed Thursday to mark the Muslim month of Muharram.Source: Yahoo! News: Business | 8 Jan 2009 | 6:02 am Indian markets closed Thursday for holiday (AP)AP - Trading on India's stock markets was closed Thursday to mark the Muslim month of Muharram.Source: Yahoo! News: Stock Markets News | 8 Jan 2009 | 6:02 am Monster U.S. online jobs index stumbles in DecemberNEW YORK (Reuters) - A monthly gauge of online labor demand in the United States slid in December, suggesting job conditions worsened with the economy stuck in a recession, a private employment group said on Thursday.Source: Reuters: Business News | 8 Jan 2009 | 5:12 am Time WorserTime Warner's new-year surprise $25 billion writedown today was bad enough, because it suggests that the media giant's advertising-supported cable, publishing, and internet businesses are worth less and less with each passing quarter.Worse is its warning of a probable loss for all of 2008, because it would be the first loss in six years and comes less than two months after it had forecast earnings of more than $1 a share. (Though it's unlikely to come close to the $98.7 billion loss posted in the year after the disastrous merger of AOL and the original Time Warner.) But worst of all is what Time Warner's profit warning suggests for the rest of the industry, particularly newspapers, magazines, and all of the other old-media companies struggling to transform themselves into Web-based information businesses. J.P. Morgan analyst Imran Khan took Time Warner's announcement and backed out some online advertising numbers. What he found confirmed his suspicions about Web-ad spending trends. In a note to investors, Khan concluded that Time Warner's profit warning suggested an 18 percent year-over-year decline in online advertising revenue at the company's AOL unit. He reckoned that the change could have translated into a $64 million drop in revenue in those three months alone. Where did the money go? Certainly not to Time Warner's cable or magazine publishing businesses: They, too, were reporting declines. Some of the decline may well have been attributable to a general retreat in ad spending during a particularly nasty economic slump. But Khan said it also illustrates a shift away from online "display" ads—the banners across the top of web pages or the boxes filled with animation and music—and toward search-based ads. Those are the dull, but particularly effective plain-text ads that pop up on search engines or are added to web pages by brokers like Google. "The implied weakness is consistent with our thesis that online advertising budgets are being reallocated to search," Khan wrote. "Although AOL historically underperformed the market, we think the broader implication here is that demand continues to soften."Related Links Online Ad Revenue Up Yahoo Earnings: Just How Bad? Search Advertising's Scalability Problems Source: Portfolio.com: Top 5 | 8 Jan 2009 | 3:00 am Tough times at Macquarie GroupAustralian investment bank Macquarie Group warned today it faced "extremely tough market conditions" in the December quarter that would hit its profits, sending its share price down over 7 per cent on the ASX. The group, headed...Source: New Zealand Herald - Business | 8 Jan 2009 | 2:30 am Tui fields produce 20 millionth barrelThe 20 millionth barrel of oil has been produced from the Tui area oilfields in offshore Taranaki. And for the first time a shipment of Tui oil is to be sent to the Marsden Pt refinery, near Whangarei, to be refined in this country...Source: New Zealand Herald - Business | 8 Jan 2009 | 2:00 am Oil producer cuts output after Opec callCARACAS - Venezuela says it is reducing oil output by 189,000 barrels per day under new Opec production cuts. Venezuela says it will stop shipping 166,000 barrels a day to the United States, 18,000 to China and 5,000 to Europe. It...Source: New Zealand Herald - Business | 8 Jan 2009 | 1:30 am Prosecutor details Madoff's jewellery hoardBernard Madoff sent diamond Cartier and Tiffany watches, a diamond bracelet and brooches, and other assorted jewellery to relatives and others in an apparent violation of a court order and should be jailed, US prosecutors saidSource: Financial Times - US homepage | 8 Jan 2009 | 12:55 am In Brief - WednesdayDow Chemical (DOW) is prepared to pay up to $100 mil-a-month penalty for missing a Sat. deadline for closing its proposed $15 bil takeover of Rohm...Source: Investor's Business Daily: BUSINESS | 8 Jan 2009 | 12:22 am Trends & Innovations - WednesdayWorkers expect others to get axSource: Investor's Business Daily: BUSINESS | 8 Jan 2009 | 12:22 am Drug Company Finds Diamonds In The Rough And Makes Them ShineThe race to find new drugs can be costly and frustrating.Source: Investor's Business Daily: BUSINESS | 8 Jan 2009 | 12:22 am After The Close - WednesdayNETFLIX (NFLX), best known for its online DVD rentals, said Vizio will enable Netflix content to be streamed directly to its TVs. It reached a...Source: Investor's Business Daily: BUSINESS | 8 Jan 2009 | 12:22 am Business Briefs - WednesdayWyeth mulling $1.3 bil takeover. Dutch vaccine maker Crucell said it was in merger discussions with U.S. drug maker Wyeth WYE but that talks were...Source: Investor's Business Daily: BUSINESS | 8 Jan 2009 | 12:22 am RBS in talks to sell £2bn stake in Bank of ChinaRoyal Bank of Scotland, the government-controlled bank, is in discussions to sell its £2 billion stake in Bank of China. Steven Hester, the bank’s new chief executive, met executives from the Chinese bank and regulators this week, according to reports last night.Source: Latest Business News from Times Online | 8 Jan 2009 | 12:00 am I'm here to help, says Gordon Brown on tour to see nation's sufferingGordon Brown embarked on a nationwide tour yesterday to see the impact of the recession as Viyella, the clothing retailer, became its latest victim.Source: Latest Business News from Times Online | 8 Jan 2009 | 12:00 am We need action on banks, not more rate cutsThe Bank of England could slash interest rates by half today, taking them to their lowest level since . . . well, ever, really. Unfortunately, the impact on the economy is likely to be of rather less historic proportions.Source: Latest Business News from Times Online | 8 Jan 2009 | 12:00 am Rise in US unemployment tipped to be biggest for 59 yearsWall Street is expecting the biggest rise in America's unemployment for almost 60 years when Washington publishes official data tomorrow, indicating that the world's biggest economy is plunging into a deep and protracted recession.Source: Latest Business News from Times Online | 8 Jan 2009 | 12:00 am Air NZ opposes 'costly' airport plansAir New Zealand has reserved time for a court hearing over Christchurch International Airport's $208 million terminal redevelopment plans. The airline has booked a court-based judicial review in the week beginning February 9. But...Source: New Zealand Herald - Business | 8 Jan 2009 | 12:00 am RBS eyes sale of £2bn Chinese stakeRoyal Bank of Scotland is considering selling its £2bn stake in Bank of China amid a scramble by foreign investors to cash in their lucrative holdingsSource: Financial Times - US homepage | 7 Jan 2009 | 11:44 pm ECB still cool on big rate cutsPolicymakers prepare to meet without having sent any clear sign their thinking has changed since early DecemberSource: Financial Times - US homepage | 7 Jan 2009 | 11:38 pm NZ stocks: Our market follows Wall St downThe New Zealand sharemarket skidded lower in early trade after steep falls in United States equities. Among leading stocks Fletcher Building was down 14c early to 575, Contact Energy lost 10c to 740, and Telecom fell 2c to 233. Around...Source: New Zealand Herald - Business | 7 Jan 2009 | 11:34 pm Pequot Probe ReopenedSpurred by the surprise emergence of new evidence on a computer hard drive, the Securities and Exchange Commission has reopened a major insider trading investigation it was strongly criticized for dropping, people with knowledge of the case said.The inquiry has to do with giant hedge fund Pequot Capital Management and its chairman and C.E.O., Arthur Samberg. Portfolio.com has learned that within the last two weeks the S.E.C. issued a subpoena in the case, a step taken only in a formal investigation approved by senior agency officials. Reopening the investigation marks a new embarrassment for the beleaguered S.E.C., suggesting that, as in the Bernard Madoff case, it may have failed earlier to follow up adequately on strong indications of possible wrongdoing. People close to the case said the subpoena is for the hard drive from a computer owned by David Zilkha, a former Microsoft employee who briefly worked for Pequot in 2001. The S.E.C. and other federal investigators already have printouts of e-mail messages on the hard drive. Copies of the emails obtained by Portfolio.com appear to show Zilkha soliciting nonpublic information about Microsoft from a neighbor who was a more senior official at the software company. The original S.E.C. investigation, which ended in 2006 without the agency taking any action, had looked into whether Samberg had made highly profitable trades based on confidential information from Zilkha about Microsoft earnings. The earlier investigation, which had focused on Pequot trading in 2001, drew wide attention after the S.E.C. in 2005 fired the lawyer handling it. The S.E.C. lawyer, Gary Aguirre, contended he'd been fired for political reasons relating to a separate facet of the case: Whether Morgan Stanley C.E.O. John Mack may have given Samberg inside information relating to a planned acquisition by General Electric. Aguirre claimed he was fired because higher ups at the S.E.C. didn't want him to depose the politically connected Mack. A subsequent investigation by two Senate committees, and by the S.E.C.'s own inspector general, backed Aguirre and found that the S.E.C. was wrong to have shut down the investigation. Ever since, two Republican Senators, Arlen Specter of Pennsylvania and Charles Grassley of Iowa, have pressed the S.E.C. to reopen the case. The existence of the hard drive became known through Zilkha's contested divorce case in Connecticut. People close to the case say that Zilkha's now ex-wife had obtained and kept the hard drive from his home computer before they split up. The drive contains email exchanges between Zilkha and Mark Spain, a more senior Microsoft official, in 2001, when they were both living in Redmond, Washington. At the time, Zilkha was still working for Microsoft, although Samberg had offered him a job and was pressing him for information on Microsoft. Copies of the newly obtained emails show, for example, that on April 7, 2001, Zilkha sent Spain an email with the subject line "Any visibility on the recent quarter?" The message said: "Hey there. Have you heard whether we will miss estimates? Any other info? David." A reply from Spain the next day said: "march was the best march on record. made up the shortfall in us sub w2k pro major contributor. on trace for revised forecast (MYR)" That email appeared to indicate that Microsoft was likely to do much better than the substantially lower earnings analysts at the time were predicting. "w2k" pro evidently refers to sales of Microsoft's Windows 2000 program, and "MYR" to mid-year review. As a product manager, Zilkha normally wouldn't have been privy to overall corporate earnings information. The hard drive doesn't contain any evidence that Zilkha passed the information to Samberg. But the exchange between Zilkha and Spain appears to fill a key gap in evidence obtained during the original S.E.C. investigation. The timing coincides with Samberg trades in Microsoft puts and calls, and fits in with other email traffic between Samberg and Zilkha. On April 6, 2001, for example, Samberg wrote to Zilkha that he owned Microsoft but was worried about reports that Microsoft was about to disclose weak profits. "Any tidbits you might care to lob in would be appreciated," Samberg wrote. The records show that Samberg had been considering reducing his position in Microsoft at the beginning of April 2001, after he'd suffered losses and analysts had forecast that Microsoft would report a drop in earnings. But on April 9, Samberg started buying thousands of Microsoft puts and calls, which had the effect of greatly increasing his bet that the stock would rise. When Microsoft disclosed better-than-expected earnings on April 19, Samberg reaped an indicated profit of more than $12 million on his added investment. The day after Microsoft's earnings announcement, Samberg emailed Zilkha: "I shouldn't say this, but you probably have paid for yourself already." While the newly obtained emails from Zilkha's home computer don't prove that he passed information to Samberg, people close to the case said it would provide additional basis for the S.E.C. to investigate whether Zilkha had communicated inside information to him. The Senate committees' report in 2007 had specifically faulted the S.E.C. for not looking into any communication between Samberg and Zilkha between April 6 and April 9, 2001. New questions about Samberg's relationship with Zilkha began cropping up a few weeks ago. As Portfolio.com reported, recently filed records in Zilkha's divorce showed that beginning in April 2007, Samberg paid Zilkha $1.4 million, and has promised to pay him an additional $700,000 in April 2009. Senate investigators have been looking into whether the payments may have been some type of reward to Zilkha for not giving information to investigators. Zilkha had worked for Pequot for only a few months in 2001 before Samberg fired him, testimony from the S.E.C. investigation shows, and Zilkha has had no known link to Pequot or Samberg since then. The Senate Judiciary and Finance committees recently demanded that Samberg turn over any records explaining the payments to Zilkha. He responded, but in the Senate on Tuesday Specter said that the information wasn't adequate and that the committee was trying to obtain more. Meanwhile, Specter disclosed that he had written to S.E.C. chairman Christopher Cox on Dec. 29, demanding that the insider trading investigation be reopened. The issue cropped up in the divorce case because Zilkha disclosed the payments on financial statements he is required to file with the court. The ex-wife, Karen Zilkha, is seeking to her ex-husband and Samberg about the payments under oath. Aguirre, the former S.E.C. lawyer, went further than Specter. In a January 2, 2009 letter to Cox, he called for opening a criminal investigationinto "possible witness tampering, bribery, obstruction of justice" and conspiracy. In addition to the Samberg payments to Zilkha, Aguirre wrote that prosecutors should look into Zilkha's apparent failure to have turned over the email records while the original investigation was still open. A December 2005 S.E.C. subpoena to Zilkha required him to turn over all email records of his contacts in 2001 with Microsoft and Samberg. The S.E.C. declined to comment. David Zilkha didn't respond to messages left on his cell phone number seeking comment. His attorney, Henry Putzel III, said he wouldn't have any comment. Mark Spain didn't immediately respond to a message left at his office phone number at Microsoft. A Microsoft spokeswoman said the company wouldn't have any comment. A Pequot spokesman said he wouldn't comment on specific developments but said: "We will cooperate fully with all requests for information and are confident that Pequot's trading in Microsoft was at all times proper."Related Links Sticky Windows Report: Enterprise to Embrace Web 2.0 as Prices Drop Google to Microsoft: Game On Source: Portfolio.com: Top 5 | 7 Jan 2009 | 11:30 pm Average household net worth plummets againA new report shows the net worth of the average New Zealand household fell by $14,500 in the September quarter. It followed a decline of $17,000 the previous quarter. Spicers' Household Savings Indicators report says the average...Source: New Zealand Herald - Business | 7 Jan 2009 | 11:15 pm VIX Index of U.S. Stock Option Prices Advances 13.0% to 43.39Source: Bloomberg - All Podcasts | 7 Jan 2009 | 10:55 pm ETF Media's Beller Says Leveraged ETFs Getting Strong In 2009Source: Bloomberg - All Podcasts | 7 Jan 2009 | 10:52 pm US deficit set for postwar recordThe US budget deficit will hit nearly $1,200bn this fiscal year even without the cost of Barack Obama's planned fiscal stimulus, Congress's budget watchdog warnedSource: Financial Times - US homepage | 7 Jan 2009 | 10:49 pm US stocks: Sharp decline on Wall St todayA handful of bleak profit forecasts and more evidence of escalating unemployment unnerved US investors today, sending stocks there down sharply. It was their worst decline in more than a month after a grim private-sector jobs...Source: New Zealand Herald - Business | 7 Jan 2009 | 10:30 pm Paulson says changes needed at Fannie, Freddie (AP)
Source: Yahoo! News: Business | 7 Jan 2009 | 10:22 pm Hear: Russia, Russia EverywhereToday on Planet Money: If you're an American and your gas stove won't light, you start by calling a repair company or checking to make sure you paid the bill. If you're a European, you might start by blaming Russia. Russia's state-owned Gazprom appears to have cut the supply of gas to neighbors from Romania to Austria. It's the second time in recent years that Russia has turned off the spigots. Meanwhile, in Africa, Nigeria is burning off 20 billion cubic meters of natural gas a year -- because it has no way to ship the stuff to market. As Eurasia Group analyst Geoff Porter tells it, some in Europe would like to build a pipeline from Nigeria through Niger and Algeria, then across the Mediterranean to France. It's a bit of a pipe dream, but one player has shown some interest in the region -- Russia's Gazprom. After the jump, more photos from Porter, plus a map from Eurasia Group. Download the podcast; or subscribe. Intro music: Mates of States "Get Better." Find us: Twitter/ Facebook/ Flickr.
 Porter says a pipeline through here might as well have a bull's-eye on it. Geoff Porter, Eurasia Group » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 7 Jan 2009 | 9:57 pm FTN Midwest's Dwyer Says Credit Will Improve, Stocks Good BuySource: Bloomberg - All Podcasts | 7 Jan 2009 | 9:24 pm Sowell Says U.S. May `Go Down the Tube' Under ObamaSource: Bloomberg - All Podcasts | 7 Jan 2009 | 9:23 pm Small Business Thrives on Old Fashioned Values Outside my window a guy is hacking away at a stump with all manner of hand and electric powered tools. He’s been at it for over two hours. At times he seems… well, stumped. But he continues to do the job. He’ll do it until it’s done because he’s a professional stump remover. It’s what he does. He’s not alone. Small businesses everywhere are continuing on despite the gloomy outlook. It’s what they do.
A Beverly Hills company is proof that old fashioned values will help small businesses through these tough economic times. Divine Imaging Inc. is a small, woman-owned GSA/DoD government contractor who is thriving supplying the government with everything from IT equipment and office supplies to body armor and paper products. The 14 hardworking people of Divine credit “old fashioned” American business practices: honesty, hard work, showing up early, staying late and working weekends with their success. Divine Imaging, Inc. founder and President, Kimberly Devane states the company philosophy:
CEO Larry Abbot echoes Divine’s values:
What would our financial markets look like if more bankers shared this attitude? And when did hard work become old fashioned? Image Credit: Divine Imaging, Inc. Source: Business Pundit | 7 Jan 2009 | 8:58 pm Al Said Sees Increased Gulf Spending on InfrastructureSource: Bloomberg - All Podcasts | 7 Jan 2009 | 8:56 pm More cos. can tap Fed program to aid mutual funds (AP)AP - The Federal Reserve will allow more companies to take part in a program aimed at bolstering the money market mutual fund industry.Source: Yahoo! News: Stock Markets News | 7 Jan 2009 | 8:42 pm The Business of Bowl Games: It’s All About Money The New York Times recently published a provocative article on the swindle…err, business of the Bowl Championship Series (BCS) and college bowls: Under the rules, the championship teams of the Atlantic Coast, Big 12, Big East, Big Ten, Pacific-10 and Southeastern Conferences go to the B.C.S. automatically. This season, the first team in each conference to qualify receives $18 million — win, lose or draw — and that money is distributed in that team’s conference. If a second team from a conference qualifies, the conference shares an additional $4.5 million. But the rules for the other five conferences are different. One champion from one of the non-B.C.S. conferences gets in if it is ranked in the top 12 or ranked in the top 16 but higher than a B.C.S. conference champion. Boise State went 12-0, won the Western Athletic Conference and finished the regular season ranked ninth in the B.C.S. For this, the Broncos earned a trip to the inventively named San Diego County Credit Union Poinsettia Bowl and collected $750,000 — a set of steak knives compared with the Cadillac that is a B.C.S. berth, even after sharing the revenue. “The six big conferences don’t want to share money with the smaller conferences,” (expert) Stern said. “That to me is the story that people don’t tell.” After the derivatives crisis, Enron, Madoff, and other recent Great American money-mongering schemes, the BCS remains intact. According to this chart, the Pacific Life Holiday Bowl, the Tostitos Fiesta Bowl, FedEx Orange Bowl, Rose Bowl presented by Citi, Allstate Sugar Bowl, and the BCS National Championship Game (with rotating sponsors) have a payout of $17 million each, for a total of $85 million. Compare that to the 30+ non-BCS bowl games that take place posteason. Their payouts total roughly $43 million. in the best-case scenario schools from the non-BCS conferences would receive approximately 34% of the least of the schools in the BCS conferences, including Notre Dame. These numbers are not the actual amounts paid to each school, but look at the amounts paid to each school on average. The BCS Media Guide claims that over the first 10 years of the BCS arrangement, a total of $100 million has been given to the 51 non-BCS Football Bowl Subdivision schools and the 122 Football Championship Subdivision schools. This gives an average of $10M/year, or $58,803 per school year. By comparison, EACH BCS conference (between eight and twelve schools) is guaranteed $18 million this year, an average of $1.66M per school for the 65 participating institutions. These disparities are clearly defined within the Media Guide.
Jordan Kobritz at The Guiding Light of the Sports Business has this to say: The major football schools wanted to divvy up the TV and bowl money among themselves, without contributing to the NCAA’s revenue sharing arrangement. Any reversal of course that includes a playoff system would most likely require the participation of the NCAA. Which makes the idea of a playoff a non-starter for BCS schools. The reality is BCS conferences don’t need the bowls, whether they use the present system to determine a “national champion” or conduct a playoff. They proved as much when they began staging conference championship games - in effect creating their own “bowls” - which have turned out to be extremely profitable. To wit: The 2007 SEC championship game grossed $13.7 million in revenue and distributed almost $12 million to conference schools, according to Yahoo!com. So why allow yourself to be ripped off by the existing bowls? The answer has nothing to do with tradition or the sanctity of the bowls. The current system suits the BCS conferences just fine. They get to decide who gets how much money and they don’t have to deal with the NCAA. In this case, power is more important than money. Let me get this straight. The polling system that decides who attends BCS bowls is notoriously faulty. The payouts for attendees of those conferences–and, even more, the BCS itself–are ridiculous in comparison to non-BCS games. BCS championships attract more sponsors, viewers, and promotions than any of the others, providing incentive for those profiting most off the system to maintain it. This very well may be one of the most blatant lacks of oversight remaining in the American economy. If Obama pushes around his weight here, it will be welcomed. Source: Business Pundit | 7 Jan 2009 | 7:48 pm Deutsche Bank's Mayer Says Recession Is `Watershed' EventSource: Bloomberg - All Podcasts | 7 Jan 2009 | 7:28 pm Time Warner slashes its profits forecastThe gloom surrounding the media sector deepened further when Time Warner slashed its forecasts for 2008 profits and took a $25bn writedown on the value of its empire of old media properties, such as Time Inc magazines, and new media brands, including AOLSource: Financial Times - US homepage | 7 Jan 2009 | 7:04 pm Is The Crisis In Our Heads?Partly it is, or it may be. We talked about this a bit on the radio, but the basic idea is that when we're worried about the future we tend to spend less, which can backfire. Say you don't buy that new car, then maybe the auto manufacturers have to lay someone off, and that someone then can't go hiring your company to do whatever it does. And on and on... The idea is called the Paradox of Thrift. Paul Krugman, the Nobel Laureate and New York Times columnist, talks about it here. Some free-market types disagree, arguing "Consumers Don't Cause Recessions." From that link: "My friend Bill Anderson actually derives sustenance from his hatred of Paul Krugman; at lunch one time, Bill skipped a sandwich and instead just bought a New York Times." » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 7 Jan 2009 | 6:38 pm Pimco's Clarida Predicts `Ugly' Payroll ReportSource: Bloomberg - All Podcasts | 7 Jan 2009 | 6:12 pm Who feels more economic stress?Bad news about the stock markets, jobs, real estate. It can stress anybody out. But a new study from the American Psychological Association says women are more anxious about the economic downturn than men. Sally Herships reports.Source: Marketplace | 7 Jan 2009 | 6:11 pm Empty mall space helps stores with rentA new survey says vacancies at shopping centers are approaching a ten-year high. Landlords fearful of losing more foot traffic are keen on keeping their tenants, which puts retailers in a good position to negotiate. Ashley Milne-Tyte reports.Source: Marketplace | 7 Jan 2009 | 6:11 pm CDs out of tune in digital ageNot too long ago the recording industry was riding high with massive CD sales. But it faces an uncertain future in the digital age. Kai Ryssdal speaks with Rolling Stone writer Steve Knopper about the state of the music industry.Source: Marketplace | 7 Jan 2009 | 6:11 pm Rep. Frank on the bailout and stimulusCongressman Barney Frank chairs the House Financial Services Committee and has been leading bailout negotiations with the White House. Kai Ryssdal speaks with Frank about what happens with the rest of the bailout money, regulating Wall Street and Obama's stimulus plan.Source: Marketplace | 7 Jan 2009 | 6:11 pm Bad stimulus could make deficit worsePresident-elect Obama is faced with making a difficult decision about where to cap his stimulus so that our deficit doesn't get out of control. But based on what he's heard so far, commentator David Frum thinks he's already gone too far.Source: Marketplace | 7 Jan 2009 | 6:04 pm 'Performance' chief on familiar groundPresident-elect Barack Obama named a former Treasury official as chief performance officer, a newly created position aimed at reducing government waste. But as Nancy Marshall Genzer reports, the new position sounds awfully familiar.Source: Marketplace | 7 Jan 2009 | 6:03 pm More job losses in the private sectorA labor report released today shows that job losses continued to mount in December. That's when the private sector lost 693,000 jobs, a higher amount than expected. Jeremy Hobson reports.Source: Marketplace | 7 Jan 2009 | 6:03 pm Balancing the stimulus and deficitThe federal budget deficit for 2009 is projected to be three times the size it was in 2008. But one thing that amount doesn't account for is President-elect Barack Obama's stimulus plan. As Bob Moon reports, the deficit may limit what Obama can do to help the ailing economy.Source: Marketplace | 7 Jan 2009 | 6:03 pm London stocks sharply down (AFP)
Source: Yahoo! News: Stock Markets News | 7 Jan 2009 | 5:39 pm 'Shockingly Awful' Job NumbersThe payroll company ADP made headlines today with its new report on unemployment. ADP says the private sector lost 693,000 jobs last month (Read the report in full). It's worth nothing that this is one report by one player. After the jump, one take by one economist, Ian Shepherdson of High Frequency Economics, who says he's waiting for official numbers but meanwhile uses words like "shockingly awful." Bonus: Jobless claims swamp computer systems. Shepherdson writes: The ADP report shows private employment down 693K in December, far worse than the consensus, -495K. This is shockingly awful. If the recent relationship between the ADP numbers (after their recent revisions) and the official payroll data holds, then we should expect a number of about -700K on Friday, the biggest drop in 59 years. The pre-ADP consensus was that payrolls fell 500K. As always, average experience can be misleading, and the error between ADP and payrolls has varied from -125K to +179K over the past six months. Even the best case here, though,implies a payroll number of -568K. The bulk of the deterioration in ADP jobs is in small and medium-sized firms, though losses at big firms are increasing too. Service sector losses are rising fastest. We await Friday with trepidation. » E-Mail This » Add to Del.icio.us
Source: NPR Blogs: Planet Money | 7 Jan 2009 | 5:19 pm Meet Nancy Killefer, US Chief Performance Officer
The Washington Post shares news on Nancy Killefer, the nation’s new CPO: President-elect Barack Obama has selected a top management consultant to serve as the country’s chief performance officer, a post he said would help oversee reform of the federal government and its budget. Sources said Obama has chosen Nancy Killefer, a director at McKinsey & Company and a former assistant secretary of the treasury in the Bill Clinton administration. Obama is expected to announce his choice this morning.
Who is Nancy Killefer? According to Wikipedia, she: -Comes from McKinsey & Co. and the US Department of Treasury, where she served as CFO and COO. The Chief Performance Officer concept is used in large companies, where people in the position are tasked with managing–what else–corporate performance, regulatory compliance, business intelligence, and data governance. It’s nice to see the government take an organizational hint from corporations. As for the federal budget…at least they’re trying something new. Source: Business Pundit | 7 Jan 2009 | 5:14 pm Urquhart Stewart Says Russian Gas Has Geopolitical RiskSource: Bloomberg - All Podcasts | 7 Jan 2009 | 4:55 pm Sweet Treats From Italy
Seen in Torino, Italy. Peter HauserPeter and Jill write from Torino, Italy: During holiday dinner conversations the crisis of the economy was of course a topic, and while one friend (who works for FIAT) told us about the problems in his sector of the economy, another friend told us the opposite. The man is working for a famous chocolate maker . . . and he told us that since the crisis started sales are up 5-6%. Apparently it's a well known fact in the chocolate industry, that when times are bad, people tend to comfort their souls with affordable treats. I know the feeling. I've got a bowl of candy sitting on my desk right now. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 7 Jan 2009 | 4:48 pm Clearbrook's Sowanick Favors Financials, Avoids TreasuriesSource: Bloomberg - All Podcasts | 7 Jan 2009 | 4:48 pm Listener Finds Cheaper StuffBJ writes: I work in the field of water and wastewater infrastructure construction, repair, and maintenance in Minnesota. Concrete products (pipe, precast manholes, etc) here are 50% of their 2007 costs. HALF PRICE. Other material (plastic and ductile iron pipe, for example) costs are falling too. This is due to lack of demand and the manufacturers are trying to cover their overhead. There is the potential for a bargain if water and sewer is part of the next bailo- er, stimulus package. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 7 Jan 2009 | 4:44 pm Baader's Halver Sees `Big' Recession in Germany This YearSource: Bloomberg - All Podcasts | 7 Jan 2009 | 4:27 pm Pennymac Feeds From Bottom of Mortgage Cesspool
I thought the era of -mac suffixes was over, until reading this MarketWatch tidbit: Private National Mortgage Acceptance Co. (PennyMac), a company formed to buy troubled mortgages, said Wednesday that funds managed by its affiliates bought $558 million of home loans from the FDIC. The loans were formerly assets of First National Bank of Nevada, which the FDIC closed earlier this year when it became the firm’s receiver. PennyMac said it bought the loans on behalf of private investors and plans to work out the loans with borrowers. “PennyMac’s objective is to maximize value by working with borrowers to maintain ownership of their homes and reduce foreclosures,” the firm said in a press release. PennyMac was formed in early 2008 by BlackRock, Inc., Highfields Capital, and a team of mortgage industry veterans. Liquidating a failed bank’s estate in an attempt to recoup insurance funds is within the FDIC’s charter. Apparently, the FDIC isn’t picky about who buys those assets. I listened to this March 2008 NPR broadcast about Pennymac, and found out the following: -It was founded by former Countrywide executives to “buy troubled mortgages on the cheap.” My confidence levels in Countrywide executives are low enough that I wouldn’t put it past them to employ the sit-and-foreclose method. There must be a better way. Source: Business Pundit | 7 Jan 2009 | 3:48 pm Chevy Dealer’s Monster Truck Promo BackfiresFrom the San Francisco Chronicle:
(Note: Image above is not the actual truck) A Hilo Chevrolet dealer who tried to crush his Asian auto competition found the stunt a little harder to pull off than expected. Island Chevrolet general sales manager James Severtson arranged for a Chevrolet Suburban SUV outfitted with massive tires costing $5,000 apiece to drive over a Honda Accord. On the first attempt Friday, the monster truck blew a hydraulic hose and leaked vital fluid while the Honda remained intact and ready for more. Surprising? Hardly. Source: Business Pundit | 7 Jan 2009 | 3:30 pm Ebbs And FlowsLots of news today, lots to think about. European countries say Russia's Gazprom turned off gas supply. ADP says U.S. companies cut 693,000 jobs in December. Obama pushes states to cover more unemployed. Hill aide: Congressional Budget Office to project $1.2 trillion deficit in 2009. Asia stocks rise after Obama indicates stimulus spending to last for years. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 7 Jan 2009 | 2:44 pm
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The conventional wisdom about Microsoft (MSFT) will that it will never make a lot of money on its gadgets, the Zune and Xbox, and it will never make any money on its Internet business, MSN. On the other hand, it will always make large margins on its Windows operating system, business, and server software.
