US retail sales plunge in December

US retail sales plunged by 2.7 per cent in December, as American consumers have pulled back sharply on spending in spite of deep discounts through the heart of the holiday shopping season
Source: Financial Times - US homepage | 14 Jan 2009 | 2:08 pm

Layoff Etiquette for Goood Times and Bad

Is 2009 the year of the layoff? According to the recent employment figures, in December 2008 alone more than 500,000 U.S. workers lost their jobs. That number is almost 2 million for the last four months of the year. If the trend continues, you may find yourself on one or another end of a layoff. Here are some tips if you’re in the position of having to let people go.

When Good Employees Cost Too Much
It’s true that good help is hard to find. No business owner I know likes to let go of valued employees. However, the deepening recession has caused business owners and managers in many industries across the country to face the painful prospect of laying off good employees.
 
Steve Fox is a labor and employment attorney in the Dallas offices of Fish & Richardson. He warns that with “such an emotional and potentially perilous decision, managers should take pains to handle these difficult tasks the right way for everyone involved.” He says it doesn’t necessarily get easier the more you do it.

“Employers who approach this task lightly often end up with dismal results.”

I think it’s a safe bet he means legal trouble.

Proper Layoff Etiquette
While important to the bottom line, handling necessary layoffs in an unprofessional manner makes the whole process more difficult for affected workers and can significantly harm a business’s reputation. According to Fox, employers facing this inherently difficult task should take some basic steps to ensure that the process goes as smooth as possible for all parties:
 
· Decide what you’re going to say ahead of time. From a legal standpoint, employers are not required to give an explanation for why someone’s being laid off, but it’s often a good idea.

· Unless a company is going out of business, some employees end up staying and some are laid off. While no explanation is required, clarification is important so that terminated workers don’t believe they are being laid off for any reasons that are protected by law, such as age, gender, disability and race.

· Be compassionate and respectful. That means making sure that affected employees learn the news from you and not from the rumor mill.

· Keep the affected worker in mind when choosing the best time and place to break the news.

· Have a witness to observe all communications during the process.
 
Following these rules will not only result in a better workplace morale and less emotional strife, but also may save you from a lawsuit. They’re good reminders for all economic times – good and bad.

Image Credit: latch.r, Flickr

Source: Business Pundit | 14 Jan 2009 | 2:07 pm

Stock futures point to lower open on retail sales (AP)

AP - A retail sales report that reminded investors of the economy's growing problems sent stock futures sharply lower Wednesday and pointed to a down day on Wall Street.

Source: Yahoo! News: Stock Markets News | 14 Jan 2009 | 2:03 pm

Wall Street set to slide on banks and consumer gloom (Reuters)

Reuters - Stocks were set to slide at the open on Wednesday as fears of more credit losses in the banking sector and signs of further contraction in consumer spending compounded worries about fallout from the recession.

Source: Yahoo! News: Business | 14 Jan 2009 | 2:00 pm

Wall Street set to slide on banks and consumer gloom (Reuters)

Reuters - Stocks were set to slide at the open on Wednesday as fears of more credit losses in the banking sector and signs of further contraction in consumer spending compounded worries about fallout from the recession.

Source: Yahoo! News: Stock Markets News | 14 Jan 2009 | 2:00 pm

NewsWatch: U.S. stock futures fall on retail sales, profit warnings

U.S. stock futures dropped on Wednesday, with slumping retail sales and warnings from firms ranging from Deutsche Bank to Tiffany reigniting worries over the economy at large and the financial sector in particular.

Source: MarketWatch.com - Top Stories | 14 Jan 2009 | 2:00 pm

Retail sales slump 2.7 percent in December

WASHINGTON (Reuters) -Sales at retailers fell at a steeper-than-expected rate in December, government data showed on Wednesday, as a deteriorating economic environment forced consumers to cut back on spending during the key holiday period.
Source: Reuters: Business News | 14 Jan 2009 | 1:59 pm

Grim retail data cast gloom over Wall Street

Wall Street stocks were set for a lower start as investors digested gloomy retail sales figures and Nortel's decision to file for bankruptcy, while concerns over the health of financial institutions persisted.
Source: Financial Times - US homepage | 14 Jan 2009 | 1:56 pm

Rio Tinto names Corus chief to suceed chairman

Paul Skinner, chairman of Rio Tinto, today announced he will retire from the mining giant, sparking fresh speculation he will soon take over from BP's Peter Sutherland.
Source: Latest Business News from Times Online | 14 Jan 2009 | 1:56 pm

Gottschalks files for bankruptcy

Gottschalks Inc. said it filed for reorganization under Chapter 11 bankruptcy law.

Source: MarketWatch.com - Top Stories | 14 Jan 2009 | 1:56 pm

Sharp decline in US retail sales

US retail sales fell by more than expected in December as consumers cut spending over the holiday period.
Source: BBC News | Business | World Edition | 14 Jan 2009 | 1:56 pm

Investors rattled by Deutsche Bank and HSBC

FRANKFURT (Reuters) - A profit warning from Deutsche Bank AG and a prediction HSBC Holdings Plc may need fresh capital shook confidence in two European banks previously credited with dodging the worst of the crisis.
Source: Reuters: Business News | 14 Jan 2009 | 1:55 pm

Investors rattled by Deutsche Bank and HSBC

FRANKFURT (Reuters) - A profit warning from Deutsche Bank AG and a prediction HSBC Holdings Plc may need fresh capital shook confidence in two European banks previously credited with...
Source: RSS feed - channel BNewsBusiness | 14 Jan 2009 | 1:55 pm

Nortel files for bankruptcy protection in U.S

TORONTO (Reuters) - Nortel Networks Corp, North America's biggest maker of telephone equipment, filed for bankruptcy protection on Wednesday, a day before it was due to make an interest payment of about $107 million.
Source: Reuters: Business News | 14 Jan 2009 | 1:53 pm

Indications: U.S. stock futures fall on retail sales, profit warnings

U.S. stock futures dropped on Wednesday, with slumping retail sales and warnings from firms ranging from Deutsche Bank to Tiffany reigniting worries over the economy at large and the financial sector in particular.

Source: MarketWatch.com - Top Stories | 14 Jan 2009 | 1:52 pm

Mortgage applications surge

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 14 Jan 2009 | 1:51 pm

The Death of the Nortel Shareholder (NT)

Source: 24/7 Wall St. | 14 Jan 2009 | 1:46 pm

US retail sales plunged 2.7% in December (AFP)

AFP - US retail sales skidded for the sixth straight month in December, plunging 2.7 percent from November, more than twice market forecasts, government data showed Wednesday.

Source: Yahoo! News: Business | 14 Jan 2009 | 1:46 pm

Stocks set for chilly open

Wall Street was bracing for a lower open Wednesday amid concern about the financial services sector and continued weakness in retail sales.
Source: Business and financial news - CNNMoney.com | 14 Jan 2009 | 1:45 pm

Stock futures tumble after grim retail sales

NEW YORK (Reuters) - Stock index futures hit a session low on Wednesday after government data showed retail sales fell more than expected in December, signaling a further drop in consumer spending, a key driver of corporate profits.
Source: Reuters: Business News | 14 Jan 2009 | 1:44 pm

Before the Bell: Citigroup, Deutsche Bank, retail sales in the spotlight

U.S. stock market futures declined Wednesday after a sharp drop in retail sales, while a profit warning from Deutsche bank reignited fears over the economy and the financial sector.

Source: MarketWatch.com - Top Stories | 14 Jan 2009 | 1:43 pm

Nortel files for bankruptcy protection in U.S

TORONTO (Reuters) - Nortel Networks Corp, North America's biggest maker of telephone equipment, filed for bankruptcy protection on Wednesday, a day before it was due to make an interest...
Source: RSS feed - channel BNewsBusiness | 14 Jan 2009 | 1:42 pm

Nortel files for bankruptcy protection in U.S (Reuters)

Reuters - Nortel Networks Corp, North America's biggest maker of telephone equipment, filed for bankruptcy protection on Wednesday, a day before it was due to make an interest payment of about $107 million.

Source: Yahoo! News: Business | 14 Jan 2009 | 1:42 pm

Retail sales drop for 6th straight month

Retail sales fell for the sixth straight month in December, the longest consecutive stretch of monthly declines in the measure in at least four decades.
Source: Business and financial news - CNNMoney.com | 14 Jan 2009 | 1:40 pm

Retail sales slump 2.7 percent in December (Reuters)

Reuters - WASHINGTON (Reuters) -Sales at retailers fell at a steeper-than-expected rate in December, government data showed on Wednesday, as a deteriorating economic environment forced consumers to cut back on spending during the key holiday period.

Source: Yahoo! News: Business | 14 Jan 2009 | 1:39 pm

Posted Without Comment: December Retail Sales

According to Marketwatch:

"Stung by weak demand and falling prices, U.S. seasonally adjusted retail sales plunged 2.7% in December, the Commerce Department estimated Wednesday.

Excluding the 0.7% decline in auto sales, retail sales recorded their biggest drop since record-keeping began in the early 1990s, falling 3.1%. Excluding gasoline and autos, sales fell 1.5%, the largest drop since September 2001.

Retail sales have fallen for six months in a row, the longest decline on record. Sales in October and November were revised lower.

Chain stores have reported further weakening in early January as the recession began its second year."

Douglas A McIntyre

Source: 24/7 Wall St. | 14 Jan 2009 | 1:38 pm

Barclays to cut another 2,100 jobs

British banking giant Barclays is to cut 2,100 jobs in its retail and commercial businesses, it said Wednesday, a day after announcing a similar number of job losses in its investment...
Source: RSS feed - channel BNewsBusiness | 14 Jan 2009 | 1:37 pm

Deutsche Bank loses nearly 5.0 bln euros in fourth quarter

Deutsche Bank, Germany's largest bank, said on Wednesday it expected to incur a massive loss of nearly 5.0 billion euros in the fourth quarter after market conditions "severely impacted"...
Source: RSS feed - channel BNewsBusiness | 14 Jan 2009 | 1:34 pm

Leng replaces Skinner as Rio chairman

The chairman of Rio Tinto is preparing to announce his retirement from the board of the mining group to succeed Peter Sutherland, chairman of BP
Source: Financial Times - US homepage | 14 Jan 2009 | 1:34 pm

Government debt prices down slightly

Government debt prices slipped Wednesday as the market continues to face a record level of supply coming to market. But jittery investors continue to seek the safety of Uncle Sam's debt.
Source: Business and financial news - CNNMoney.com | 14 Jan 2009 | 1:33 pm

Oiling the wheels

Debt fears may undermine huge German rescue plan
Source: BBC News | Business | World Edition | 14 Jan 2009 | 1:33 pm

Economic Report: Retail sales plunge 2.7% in December

Stung by weak demand and falling prices, U.S. seasonally adjusted retail sales plunged 2.7% in December, the Commerce Department estimates.

Source: MarketWatch.com - Top Stories | 14 Jan 2009 | 1:31 pm

KeyPoint Credit Union Selects The Bank of New York Mellon to Provide Remittance Services to Silicon Valley Members

NEW YORK, Jan. 14 /PRNewswire/ -- The Bank of New York Mellon, the global leader in asset management and securities servicing, today announced that it will be providing its Remit
Source: RSS feed - channel BNewsBusiness | 14 Jan 2009 | 1:30 pm

Nomura Asset Management Announces the Launch of Nomura Partners Funds

Marks Entrance into the U.S. Retail Market Funds have an Asian and Global Focus NEW YORK, Jan. 14 /PRNewswire/ -- Nomura Asset Management, a leading...
Source: RSS feed - channel BNewsBusiness | 14 Jan 2009 | 1:30 pm

USG Corporation Fourth Quarter 2008 Earnings Conference Call and Webcast

CHICAGO, Jan. 14 /PRNewswire-FirstCall/ -- USG Corporation (NYSE: USG), a leading building products company, will hold a conference call and webcast to discuss fourth...
Source: RSS feed - channel BNewsBusiness | 14 Jan 2009 | 1:30 pm

Former Gemstar-TV Guide Executive Bo Park Joins MWW Group as Senior Vice President

Park Brings Fifteen Years of Reputation Management Experience to MWW Group's Global Corporate Communications Practice NEW YORK, Jan. 14 /PRNewswire/ -- MWW...
Source: RSS feed - channel BNewsBusiness | 14 Jan 2009 | 1:30 pm

Gottschalks to Reorganize Under Chapter 11

~ Secured $125 million of Debtor-in-Possession Financing ~ ~ Continues to Pursue a Sale of the Business ~ FRESNO, Calif., Jan. 14...
Source: RSS feed - channel BNewsBusiness | 14 Jan 2009 | 1:30 pm

Compass Bank Begins Rebranding to BBVA Compass in Alabama

BIRMINGHAM, Ala., Jan. 14 /PRNewswire-FirstCall/ -- Compass Bank announced today it has started its rebranding process - to BBVA Compass - at the bank's 92 locations in...
Source: RSS feed - channel BNewsBusiness | 14 Jan 2009 | 1:30 pm

After brokerage deal, Citi may reduce its size by one-third

Following a blockbuster brokerage deal with Morgan Stanley, Citigroup's set to unveil a sweeping plan to unload several businesses and reduce its size by one-third -- moves that essentially sound a death knell for its financial-services supermarket model, according to a published report.

Source: MarketWatch.com - Top Stories | 14 Jan 2009 | 1:28 pm

Deutsche Bank expects full-year loss

Germany's largest bank has revealed its first annual loss in five decades, and renegotiated terms for its acquisition of Postbank, after a fourth quarter in which it lost €4.8bn
Source: Financial Times - US homepage | 14 Jan 2009 | 1:21 pm

Man Group assets fall, to sue over Madoff exposure

LONDON (Reuters) - Shares in Man Group, the world's biggest listed hedge fund firm, slid on Wednesday after it said funds under management fell 21 percent and that it would sue over its exposure to the Madoff scandal.
Source: Reuters: Business News | 14 Jan 2009 | 1:18 pm

London Markets: Banks weigh on London as HSBC, Barclays shares fall

Banks led London’s top share index lower, with shares of HSBC Holdings falling sharply after Morgan Stanley said it believes the lender needs to raise capital and cut its dividend.

Source: MarketWatch.com - Top Stories | 14 Jan 2009 | 1:18 pm

Deutsche Bank pegs quarterly loss at $6.4 billion, vow changes

Germany's Deutsche Bank sees reporting a fourth-quarter loss of some $6.4 billion, due to a weak performance in credit and equity trading and further write-downs, and forecasts red ink for the full year as well.

Source: MarketWatch.com - Top Stories | 14 Jan 2009 | 1:09 pm

Small business loan plan unveiled

A plan to guarantee up to £20bn of loans to small and medium-sized firms to help them survive the downturn is unveiled.
Source: BBC News | Business | World Edition | 14 Jan 2009 | 1:08 pm

Jaguar Land Rover cuts 450 staff

Jaguar Land Rover announces it is cutting 450 jobs, including 300 managers, due to "severe reduction in demand".
Source: BBC News | Business | World Edition | 14 Jan 2009 | 1:06 pm

Auto Show: A car fit for Speed Racer

A sign of hope for today's ailing auto industry is here at the 2009 North American International Auto Show, but not where you'd expect to find it.
Source: Business and financial news - CNNMoney.com | 14 Jan 2009 | 1:05 pm

Top Pre-Market Analyst Downgrades (MDRX, AAUK, EBAY, HNZ, SOLR, ITG, NVO, SI, SCR, PCU, STP, VISN)

Source: 24/7 Wall St. | 14 Jan 2009 | 1:03 pm

E.ON and RWE to build £10bn UK nuclear reactors

E.ON and RWE, Germany's two largest utilities companies, are set to announce the creation of a joint venture to build at least four nuclear reactors in the UK at a cost of at least £10 billion, The Times has learnt.
Source: Latest Business News from Times Online | 14 Jan 2009 | 1:00 pm

Opening Bell: 01.14.09

Deutsche Bank Reports $6.3B Loss (Bloomberg)
"The fourth-quarter loss reflects "exceptional market conditions, which severely impacted results in the sales and trading businesses, most notably in credit trading including its proprietary trading business, equity derivatives and equities proprietary trading," the bank said in the statement."

Translation: Deutsche Bank got their collective asses handed to them - but the bitch of quarter is still Citi at $10B down.

HSBC Holdings Needs $30B, Condom, And Lube (MarketWatch)
Morgan Stanley is bearish on the European giant, estimating they need to raise between $20B and $30B on top of a dividend cut in order to meet a capital shortfall.

"The "world's local bank" has 57% of its loan book in the U.S. and the U.K., making it highly exposed to the credit cycle."

UBS Broker Declared Fugitive (CNBC)
Raoul Weil, the UBS broker so beloved by American citizens and IRS auditors has failed to surrender himself to U.S. Authorities on Tuesday. Weil, you'll remember, was the UBS point-man in the attempt to help more than 17,000 people keep their money from confiscation by the US. In a way, I feel sorry for the guy: given all the recent atrocities in the financial markets his little tax fraud scheme is minor, but (as the government does) they're going to come at him with the hammer of God because failing to do so would cause public scorn.

Chrysler Might Be For Sale, After All (Reuters)
Contradicting the position statement ran a couple of days ago, it looks like Chrysler might be positioning for a sell off:

"Struggling U.S. automaker Chrysler is in talks to sell assets to Renault-Nissan and parts supplier Magna, sources with knowledge of the discussions have told Reuters, though the French automaker Wednesday denied such talks were under way."

Man Group Assets Fall 21%; Shares Decline In London (Bloomberg)
"Man Group Plc, the largest publicly traded hedge-fund manager, said assets under management fell 21 percent in the last three months of 2008, more than expected, as it wrote down two funds linked to Bernard Madoff.

Man Group dropped as much as 11 percent in London trading after the firm said in a statement that assets under management were $53.3 billion as of Dec. 31, down from $67.6 billion at the end of September and $61 billion at the beginning of November. The firm had been forecast to report about $55.6 billion of assets under management, according to analysts at UBS AG."

Source: Dealbreaker | 14 Jan 2009 | 1:00 pm

Analysts Downgrading Oil Patch (NOV, PDE, REP, SII, STO, SU, RIG)

Source: 24/7 Wall St. | 14 Jan 2009 | 12:56 pm

Downgrading Hedgies, Private Equity & Financials (BX, FIG, GLG, IVZ, JNS, OZM, STD, TROW)

Source: 24/7 Wall St. | 14 Jan 2009 | 12:50 pm

AIG in 14,000 words

I finally carved out enough time to read the Washington Post series on the near-death of AIG. It's quite good, has interviews with many central figures. And it's told, not in black and white, but shades of grey, the villains unclear.

Though there certainly were those who worried:

Park spelled out his reasoning in meetings and conversations with colleagues over the next several weeks. It was as if he had scratched the needle across an old record album at full volume.

And those who did not:

"It is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions," Cassano said.

Amusingly, while I was reading the article this google-supplied ad popped up at the bottom of the page:

Credit Default Swap Trade US High-Grade And Credit Default Swaps Now. Get More Info! www.MarketAxess.com

» E-Mail This     » Add to Del.icio.us

Source: NPR Blogs: Planet Money | 14 Jan 2009 | 12:45 pm

UK jobless toll surges as Barclays cuts 4,200

Britain’s unemployment numbers surged higher today after Barclays, the UK bank, doubled its number of job cuts to 4,200 and Jaguar Land Rover, the embattled carmaker, eliminated 450 workers.
Source: Latest Business News from Times Online | 14 Jan 2009 | 12:44 pm

Extreme job hunting

Renting a billboard, handing out flyers or printing up T-shirts with your contact information used to seem like an outlandish way to get a job but now unemployed workers are going to just such lengths to get attention.
Source: Business and financial news - CNNMoney.com | 14 Jan 2009 | 12:42 pm

FTSE-100 index down 93.23 points at 4,305.92 (AP)

AP - Share prices on the London Stock Exchange were lower at midday Wednesday.
Source: Yahoo! News: Stock Markets News | 14 Jan 2009 | 12:42 pm

Chrysler in asset sale talks, but Renault denies

DETROIT/PARIS (Reuters) - Struggling U.S. automaker Chrysler is in talks to sell assets to Renault-Nissan and parts supplier Magna, sources with knowledge of the discussions have told Reuters, though the French automaker Wednesday denied such talks were under way.
Source: Reuters: Business News | 14 Jan 2009 | 12:38 pm

Punch shares slump by 20% amid trading gloom

Shares of Punch Taverns fell by more than 20 per cent this morning to a record low after a gloomy trading update prompted analysts to slash proft forecasts for Britain's biggest pub company.
Source: Latest Business News from Times Online | 14 Jan 2009 | 12:34 pm

Early Bird Analyst Upgrades (AUO, CLB, LAB, SKM, SOHU)

These are some of the early bird upgrades and positive research calls we have seen from Wall Street analysts this Wednesday morning with more than two hours to the open:

• AU Optronics (NYSE: AUO) Raised to Overweight at HSBC.
• Core Labs (NYSE: CLB) Raised to Outperform at JPMorgan.
• LaBranche (NYSE: LAB) Raised to Buy from Sell at Goldman Sachs.
• SK Telecom (NYSE: SKM) Raised to Buy at Citigroup.
• Sohu.com (NASDAQ: SOHU) Started as Outperform at Oppenheimer.

Jon C. Ogg
January 14, 2009

Source: 24/7 Wall St. | 14 Jan 2009 | 12:33 pm

Citi, Morgan Stanley in brokerage union

Citigroup confirmed Tuesday that it plans to merge its Smith Barney brokerage division with that of peer Morgan Stanley, a move that is expected to mark the beginning of a break-up of the troubled banking giant..
Source: Business and financial news - CNNMoney.com | 14 Jan 2009 | 12:27 pm

Mortgage applications up as refinancing jumps (Reuters)

Reuters - Mortgage applications jumped in the first full week of 2009 as record low interest rates spurred the greatest demand for home refinancing loans in over 5-1/2 years, data from an industry group showed on Wednesday.
Source: Yahoo! News: Business | 14 Jan 2009 | 12:26 pm

Mortgage applications up as refinancing jumps

NEW YORK (Reuters) - Mortgage applications jumped in the first full week of 2009 as record low interest rates spurred the greatest demand for home refinancing loans in over 5-1/2 years, data from an industry group showed on Wednesday.
Source: Reuters: Business News | 14 Jan 2009 | 12:26 pm

Banking concerns weigh on European stocks (AP)

AP - European stock markets fell sharply Wednesday amid renewed concerns about the financial well-being of the banking system and ahead of key Christmas trading news in the U.S.

Source: Yahoo! News: Stock Markets News | 14 Jan 2009 | 12:21 pm

European stocks slide as German recession worsens (AFP)

AFP - European stock markets fell further on Wednesday, wiping out gains won so far this year, on weakness in the banking sector caused by concern about HSBC.

Source: Yahoo! News: Stock Markets News | 14 Jan 2009 | 12:19 pm

Oil rises towards $39 on Saudi cuts

LONDON (Reuters) - Oil rose 3 percent toward $39 a barrel on Wednesday, as OPEC kept up talk of production cuts and a cold snap in the United States boosted heating oil demand.
Source: Reuters: Business News | 14 Jan 2009 | 12:07 pm

Strong euro drives down BAA airport traffic

A scorched-earth policy adopted by budget carriers, including easyJet and Ryanair, is hurting Stansted, according to falling passenger figures published by BAA, the airport company.
Source: Latest Business News from Times Online | 14 Jan 2009 | 12:03 pm

EU warns of legal action over gas

The European Commission president says Russian and Ukrainian energy firms may be sued over gas dispute.
Source: BBC News | Business | World Edition | 14 Jan 2009 | 12:02 pm

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

Among the companies whose shares are expected to see active trade in Wednesday’s session are the European miners and oil-and-gas firms as well as Bunge, Citi, Deutsche Bank, HSBC, Morgan Stanley, Oracle, Santander and Siemens.

Source: MarketWatch.com - Top Stories | 14 Jan 2009 | 12:01 pm

Refinance applications highest in MBA's survey

The rush among homeowners to take advantage of lower interest rates shows no sign of abating, judging from the latest survey data compiled by the Mortgage Bankers Association.

Source: MarketWatch.com - Top Stories | 14 Jan 2009 | 12:00 pm

Barclays cuts another 2,100 jobs

Barclays says it will cut 2,100 jobs from its UK banking business in addition to the same number it announced on Tuesday.
Source: BBC News | Business | World Edition | 14 Jan 2009 | 11:57 am

Deutsche Bank warns of big losses

Deutsche Bank says it lost 4.8bn euros in the last quarter and warns of a full-year loss for 2008.
Source: BBC News | Business | World Edition | 14 Jan 2009 | 11:54 am

Bailout: $10B more to Bank of America

The Treasury Department said Tuesday it recently invested $14.8 billion in another 43 banks, $10 billion of which went to Bank of America, the nation's largest bank.
Source: Business and financial news - CNNMoney.com | 14 Jan 2009 | 11:39 am

Deutsche Bank warns on profits as losses grow

Deutsche Bank issued a surprise profit warning today after revealing losses of about €4.8 billion (£4.4 billion) in the last three months of 2008.
Source: Latest Business News from Times Online | 14 Jan 2009 | 11:38 am

OPEC And The States Conspire To Raise Gas Prices

The price of gas is going up. Saudi Arabia, the lead member in OPEC, says that it is serious about cutting production this year. Last year's cuts did nothing to stop the drop in the price of oil.

Now, OPEC is being joined by the states who want to tax gasoline use to offset falling revenue from other sources. It may drive some households into further financial distress, but the government comes first.

According to The New York Times, "Politicians in California, Massachusetts, New Hampshire, Illinois and Oregon, for example, are introducing bills that would raise gasoline taxes for road and bridge repair."

It is a waste of effort. People who can't afford the gas tax can't afford to drive. Due to that, the roads should be just fine.

Douglas A. McIntyre

Source: 24/7 Wall St. | 14 Jan 2009 | 11:32 am

HK stock index gains 0.3 percent; HSBC off 4.1 pct (AP)

AP - Hong Kong stocks rose Wednesday, but finished well off their highs as selling in European lender HSBC weighed down the broader market.
Source: Yahoo! News: Stock Markets News | 14 Jan 2009 | 11:32 am

Fuel charges: Mile high shell game

With fuel prices so low, consumers may be wondering when it will be reflected in smaller bills. But as airlines, taxis and truckers scrounge for additional revenue, surcharges formerly tagged for fuel remain - albeit by a different name.
Source: Business and financial news - CNNMoney.com | 14 Jan 2009 | 11:29 am

Coke (KO), A Sugar High, And A Smile

Coca-Cola (KO) has decided to market its flagship product as a way for people beaten down by the recession to feel better about themselves and the world around them.

The soft drink company is launching a new advertising campaign that makes Coke seem like a sorcerer's brew to cure all of life's problems.

According to The Wall Street Journal, new ads will employ optimism to sell Coke. "In a tough economy, the stakes are even higher for Coke to maintain its image as a beacon of comfort and optimism."

And, why not? Drinking Coke is cheap and, except for the sugar crash that comes when the effects of downing a can of soda have worn off, it stimulates the system. The load of calories should not cause a concern, as long as people are not sedentary.

Other than that, Coke is just fine.

Douglas A. McIntyre

Source: 24/7 Wall St. | 14 Jan 2009 | 11:22 am

Greyhound bus hampers FirstGroup

Shares in transport firm FirstGroup fall 12% after it says revenues at its North American Greyhound bus business have fallen.
Source: BBC News | Business | World Edition | 14 Jan 2009 | 11:18 am

Citi breakup in sight after Morgan Stanley deal

NEW YORK (Reuters) - Citigroup Inc agreed to merge its Smith Barney brokerage with Morgan Stanley's wealth management unit on Tuesday, and is expected to make further asset sales to raise capital and to isolate toxic assets from the rest of the bank.
Source: Reuters: Business News | 14 Jan 2009 | 11:08 am

Citi breakup in sight after Morgan Stanley deal (Reuters)

Reuters - Citigroup Inc agreed to merge its Smith Barney brokerage with Morgan Stanley's wealth management unit on Tuesday, and is expected to make further asset sales to raise capital and to isolate toxic assets from the rest of the bank.

Source: Yahoo! News: Business | 14 Jan 2009 | 11:08 am

Banks: Losing $100 Billion In One Quarter (C)(JPM)(WFC)(BAC)(GS)(MS)(UBS)(CS)(DB)

The conventional wisdom was that 2008 would be the worst year for bank losses in years, but that it would be the bottom. The damage of mortgage-backed securities has moved into the past. What else could be left?

The figures for the last quarter of 2008, being reported now, show that 2009 could be astonishingly bad for big banks. The dozen largest banks in the world could easily lose a combined $100 billion. The problems causing that will certainly cascade into this year.

Deutsche Bank (DB), the largest bank in Germany, said it would post a loss of $6.4 billion. Analysts believe the red ink at Citigroup (C) could be more than $10 billion. Bank of America is expected to turn in a $3.6 billion loss. Those figures do not include JP Morgan (JPM), Wells Fargo (WFC) , Morgan Stanley (MS), Goldman Sachs (GS) and a number of deeply troubled overseas companies including UBS (UBS), Credit Suisse (CS), and Barclays (BCS).

Ben Bernanke recently said that banks would need another large infusion of capital. Even he may not know how large.

The wave swamping bank earnings has moved away from being caused solely by derivatives. LBO loans, commercial real estate, consumer credit cards, and corporate bankruptcies are building and will not peak until the momentum in joblessness and falling GDP stops accelerating. That could take well over a year.

The governments of the US and EU are faced with another act of "the great bank salvation." This time around it is not clear what the Fed and Treasury will get for their capital. They already hold equity in all of the large financial firms due to recent investment from the TARP. What faces the system now is whether the federal government will end up with de facto control of the private banking system.

Bernanke suggest creating a huge "bad bank" to own the toxic asset that are on the balance sheets of America's largest financial companies. There is some precedent for that from the savings and loan catastrophe two decades ago.

But, the form of the next bailout is not the critical issue. Banks will get the money they need to keep the global credit system from collapse. What is at stake is how the government will handle owning a majority stake in what used to be the pillars of the nation's financial system.

Douglas A. McIntyre

Source: 24/7 Wall St. | 14 Jan 2009 | 11:02 am

New auditors for India's Satyam

A government-appointed board names new auditors for fraud-hit Indian IT firm Satyam, to replace PricewaterhouseCoopers.
Source: BBC News | Business | World Edition | 14 Jan 2009 | 10:58 am

China claims world leadership in internet users

China now has more internet users than any other country in the world, as many millions more Chinese in cities and the countryside get connected to the web, a report suggests.
Source: Latest Business News from Times Online | 14 Jan 2009 | 10:40 am

Chrysler in asset sale talks, but Renault denies (Reuters)

Reuters - Struggling U.S. automaker Chrysler is in talks to sell assets to Renault-Nissan and parts supplier Magna, sources with knowledge of the discussions have told Reuters, though the French automaker Wednesday denied such talks were under way.

Source: Yahoo! News: Business | 14 Jan 2009 | 10:39 am

China: No Joy In Being World's No.3 Economy

Source: 24/7 Wall St. | 14 Jan 2009 | 10:35 am

Rockets from Lebanon hit Israel

Three rockets have been fired into northern Israel from Lebanon , the second such attack since the Jewish state launched its offensive against Gaza amid fears that a second front could open up as Israeli troops push deeper into the Palestinian strip
Source: Financial Times - US homepage | 14 Jan 2009 | 10:16 am

Taming inflated home appraisals

Washington policy makers have taken aim at one of the main contributing causes to the housing crisis: inflated appraisals.
Source: Business and financial news - CNNMoney.com | 14 Jan 2009 | 10:05 am

German growth shrinks in 2008

Germany sees its growth rate virtually halve in 2008, declining to just 1.3%, according to initial estimates.
Source: BBC News | Business | World Edition | 14 Jan 2009 | 9:40 am

Chinese shares lead Asian markets higher

Mainland Chinese shares led gains in Asia-Pacific equities on Wednesday, snapping four days of declines as data showing an increase in bank loans and money supply supported banks.The Shanghai Composite...
Source: RSS feed - channel BNPaperBusiness | 14 Jan 2009 | 9:28 am

Financials keep FTSE under pressure

London equities fell on Wednesday, extending the market's losing streak into a sixth consecutive session after news of falling assets under management at Man Group and concern about HSBC's capital position...
Source: RSS feed - channel BNPaperBusiness | 14 Jan 2009 | 9:06 am

Mandelson brings in senior banker Mervyn Davies as minister

The Government has appointed Mervyn Davies, the chairman of Standard Chartered, as Trade Promotion and Investment Minister to help to turn around the struggling British banking sector.
Source: Latest Business News from Times Online | 14 Jan 2009 | 8:47 am

London stocks up at start of trading (AFP)

AFP - The London stock market rose at the start of trade on Wednesday after finishing down the day before on continued gloomy news about the global economy.

Source: Yahoo! News: Stock Markets News | 14 Jan 2009 | 8:34 am

Credit markets continue to thaw

Mortgage rates slide, as does the cost of loans between banks. Demand is surging for corporate bonds. The global...
Source: RSS feed - channel BNPaperBusiness | 14 Jan 2009 | 8:00 am

Wheel maker Superior will close Van Nuys plant, cut 290 workers

The supplier to firms including the Big Three has been hurt by slumping demand for new vehicles. Superior Industries...
Source: RSS feed - channel BNPaperBusiness | 14 Jan 2009 | 8:00 am

Noodle World's homage to its Big Boy roots

A chubby, hamburger-toting diner statue in an Asian restaurant? For Thai American owner John Mekpongsatorn, it's a perfect symbol of the Southern California melting pot he wants his chain to reflect. ...
Source: RSS feed - channel BNPaperBusiness | 14 Jan 2009 | 8:00 am

Filming of movies on Los Angeles streets declines

Feature productions drop 14% in 2008 to the lowest level since tracking began in 1993. As if Los Angeles doesn't...
Source: RSS feed - channel BNPaperBusiness | 14 Jan 2009 | 8:00 am

Obama's New New Deal needs to be a bigger deal

The president-elect's stimulus package is aimed at jump-starting the economy, but it doesn't go far enough. President-elect...
Source: RSS feed - channel BNPaperBusiness | 14 Jan 2009 | 8:00 am

Hospitals feel ill effects of recession

Hospitals in California and elsewhere are hurting from financial, economic and government crises hitting all at once. ...
Source: RSS feed - channel BNPaperBusiness | 14 Jan 2009 | 8:00 am

Yahoo names tech veteran Carol Bartz as new CEO

She brings a solid track record to the troubled giant, but some worry her lack of experience leading an Internet company will be a drawback. ...
Source: RSS feed - channel BNPaperBusiness | 14 Jan 2009 | 8:00 am

Albertsons to tag products with nutrition information

Supervalu is rolling out a nutrition labeling system for products at its Albertsons markets At a time when consumers...
Source: RSS feed - channel BNPaperBusiness | 14 Jan 2009 | 8:00 am

Australian stocks : Market closes higher after gains from banks, resources

MELBOURNE - The Australian stock market closed higher on Wednesday on the back of gains in the banking and resource sectors as bargain hunters took advantage of recent falls on the bourse. At the close, the benchmark S&P/ASX200...
Source: New Zealand Herald - Business | 14 Jan 2009 | 7:12 am

China now world's third-largest economy

China has leapfrogged Germany to become the world’s third-largest economy.
Source: Latest Business News from Times Online | 14 Jan 2009 | 6:44 am

Currency: Dollar finds support after recent dip

The New Zealand dollar today retraced some of its plunge this week on buying from exporters. The NZ dollar fell as low as US54.60c early this morning from US58.08c on Tuesday morning but recovered to be US55.60c at 5pm today. Sentiment...
Source: New Zealand Herald - Business | 14 Jan 2009 | 6:07 am

NZ stocks: Sharemarket remains positive

The New Zealand share market rose today but it wasn't exactly on fire. Brokers said trading was quiet with prices continuing to be influenced by order flows rather than corporate news. The benchmark NZSX-50 index closed up 12.142...
Source: New Zealand Herald - Business | 14 Jan 2009 | 6:05 am

Money Makeover: Sites to Help You Reap Rewards (Deal of the Day)

Even consumers who spend strategically by using certain credit cards, or remain loyal to one airline don't always reap the benefits of the points they earn from purchases or the miles they rack up.

The big problem: Tracking all of those reward points or miles can be complicated -- and understanding the rules in which you can redeem them can be even more so. For many consumers, it just seems like more trouble than it's worth, says Alicia Rockmore, co-founder of Buttoned Up, a personal organizing company. But by neglecting to use them, you could be missing out on hundreds, if not thousands, of dollars in discounts and other perks.

To help you track and get the most out of all of your hard-earned points and rewards, there are a handful of web sites out there to help. Here are a few worth considering:

Just One Club Card. If you're always scrambling at checkout looking for your store discount cards, this site may help. Just One Club Card lets you replace all those frustrating frequent shopper cards that clog your wallet with a single card that you can print out at home. Users don't have to fill out any forms or pay any fees to use the service. They just type in the barcode numbers of up to eight of their store discount cards into a form on the site. The site then generates a new card that can be used in lieu of all those cards. Just One Club Card currently works with 185 stores, including Best Buy (BBY), CVS (CVS) and Stop & Shop. Note: The service doesn’t work with rewards cards that have any credit-card accounts attached to them.

MileTracker. This application from USA Today and Deskport Technologies tracks all your frequent-flier and loyalty program account statuses, activities and summaries. Just download the free program, type in your account information and MileTracker will summarize your accounts and give you current rewards points, miles or other credit status. As an added bonus: It summarizes all the sales and travel news from USA Today.

Points.com. Track your reward miles and points for free. If you want to unload them you can swap with other users on the site’s Global Points Exchange, GPX, but it will cost you. There’s a processing fee of $6.95 per trade, plus whatever trading fees are set by the airline or rewards program.

Gift cards are another sticky wicket for consumers these days. Given the growing number of retailers that are declaring bankruptcy, consumers with gift cards need to "use it or lose it," says Rockmore. Spend your gift certificates now, especially if the retailer is small or locally owned, she says.

If you don't trust yourself to use your gift cards in a timely manner -- or at all -- try using one of these sites:

GiftCardTracker.com. Enter all of the gift certificates, online gift cards and rewards that you’ve accumulated and this site will store your gift certificate information and automatically remind you via email which cards you have and when an expiration date is approaching.

Plastic Jungle. Got a bunch of gift cards to stores you never shop at? Try selling them on this site, which lets you swap cards with other customers or sell them for cash. Listing cards is free. However, the site charges 10% on any successful transactions. Bonus:  Transactions on Plastic Jungle are guaranteed, so you don’t run the risk of receiving a gift card with little to no balance.

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Source: SmartMoney.com | 14 Jan 2009 | 5:00 am

100 Great Mutual Funds (Magazine Cover)

Some mutual funds belong to an exclusive club these days—call them the crisis survivors. They have a variety of investment styles, and they’ve been at it for a long time, some dating back to the Great Depression. But they share a crucial trait. When times get bad, they protect shareholders’ money—or at least they don’t lose as much as other funds. Investors hardly need to be reminded what happens when fund managers take on too much risk. The average stock mutual fund was down 41 percent in 2008, according to fund researcher Morningstar. Those unlucky enough to have put their money in the bottom quarter of stock funds have seen average declines of more than 50 percent.

But hidden in this crowd of poor performers are a few that manage to stand out. More likely than not, they’re the same ones that have managed to thrive out of each crisis, whether it’s a tech bubble, foreign currency meltdown or the latest recession. “None of these will shoot the lights out on the upside, but they aren’t likely to be hit as hard on the downside,” says Adam Bold, chief investment officer at the Mutual Fund Store. In short, they’re just what a lot of nervous investors are looking for these days.

To find these time-tested treasures, we searched for actively managed funds with the best returns since the Standard & Poor’s 500 bottomed in 1987. To weed out funds that might have had a spectacular year or two and then fizzled, we made sure the funds had decent records against others in their investment category in recent years—even 2008. Because we focused on longevity, the list left out newer funds with impressive track records (see page 66). In the end, we combed through more than 5,000 funds, identifying 100 whose strategies allowed them to thrive over the long term. Here are five that did particularly well in navigating the downturns.

Vanguard Wellington (VWELX)

Born in 1929, the Wellington fund has seen it all: wars, recessions, asset bubbles and busts. And if not for a hard-nosed approach to valuing stocks early on, it probably wouldn’t have lasted a year. Sensing that the markets were getting frothy in the summer of 1929, the managers cut the stock allocation of the portfolio from 75 percent to 40 percent—just before the October crash. “We’re very price-sensitive,” says comanager Edward Bousa, explaining the fund’s long-standing aversion to high-flying stocks.

These days, bonds account for a third of the portfolio, with stocks and cash rounding out the rest. And while the mix caps the fund’s upside potential, it limits losses when stocks go into free fall. The fund may still lose money, of course. It was down 23 percent in 2008, but that beats 83 percent of other balanced funds. Over the past decade, Wellington’s annual returns averaged 4.5 percent, beating 95 percent of its peers.

Bousa also likes stocks with supply-and-demand cycles on their side (think energy firms) and what he calls “broken growth” stories. He bought PepsiCo in early 2007, for instance, after it had fallen out of favor with investors who thought it couldn’t maintain cola prices in a slowing economy. Since then the stock has handily outperformed the S&P 500.

With $38 billion in assets, Wellington isn’t the nimblest of large-cap funds, and Bousa takes his time building and paring positions. That can hurt in fast-moving markets. Two top-10 holdings, General Electric and Bank of America, were slammed in 2008, and Bousa has stuck with energy stocks such as Chevron, despite their recent declines. For his part, Bousa acknowledges that he didn’t think the market’s plunge would be quite so “dramatic.”
The fund’s bond holdings have buffered those losses, but they haven’t been entirely spared. Compared with other balanced funds, Wellington is heavily invested in corporate bonds—many of which were down in 2008. Bonds of utilities and financial firms have been especially hard-hit, but comanager John Keogh isn’t about to change course. “Financial markets will recover sooner than the economy,” he says. And Morningstar analyst Dan Culloton still gives the fund high marks: “They’ve made more right moves than wrong moves.”

RS Large Cap Alpha (GPAFX)

Mani Govil is the first to admit he’s made his share of blunders. Over the past few years, his RS Large Cap Alpha fund has held big losers such as AMR, eBay and Freddie Mac. But while the mea culpas may be flying these days, Govil has less to apologize for than his peers. Before he took over in late 2005, the fund had floundered—a variety of managers had come and gone since 1998, and the fund had rarely outperformed the S&P 500. That seven-year stretch tarnished an otherwise stellar 20-year run, when the fund was up more than sixfold. Under Govil’s reign, it went back to beating the market, returning 17 percent in 2006 and 15 percent in 2007, putting Govil in the top 11 percent of all large-cap fund managers. And the fund beat 96 percent of its peers in 2008 (albeit with a loss of 28 percent).

Today, about half the $685 million fund’s 53 holdings are companies Govil selected for their competitive advantage or “toll keeper” business model—firms such as MasterCard, which has a 28 percent share of global card transactions and bright prospects in India and China. Others looked like tomorrow’s big winners. He added Nintendo in early 2008, after the manager of a nursing home told him that the Wii game console was a hit with residents.

To Govil, 39, that was clear evidence that Nintendo was expanding the video game market and the Wii wasn’t a fad. The stock is down more than 50 percent since he started buying, but Govil is convinced it will rebound sharply once consumer spending revives.

Because RS Large Cap Alpha is a concentrated fund, investors could be in for a volatile ride if there are any big shocks to Govil’s top 10 holdings. Still, he doesn’t take risks lightly, especially since he has more than $1 million of his own money in the fund. Early on he scrapped stocks whose financials he felt were too risky or opaque—selling Countrywide Financial and Lehman Brothers in 2006, before they ran into trouble. And he won’t touch a stock unless he estimates that the potential gain is at least twice the potential loss. “Predicting rain doesn’t count,” says Govil, who started on Wall Street in the early ’90s amid a wave of bank failures. “Carrying an umbrella is what counts.”

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Mairs & Power Growth (MPGFX)

William Frels, 69, is the Maytag repairman of mutual fund managers. While others furiously buy and sell stocks in their portfolio, Frels buys and holds. And holds, and holds, and holds. The average stock in the $1.6 billion Mairs & Power Growth portfolio has been there 20 years, an eternity in an industry where managers seem to think they get paid to constantly tinker with their holdings. The difference is huge: Other funds, on average, have an annual turnover rate of 96 percent, meaning that nearly the entire portfolio changes every year. At Mairs & Power Growth, the annual turnover rate is a minuscule 4 percent.

“He does what he’s going to do whether the market is in the midst of the biggest bull run or a replay of the Great Depression,” says Morningstar’s Culloton. Over time that kind of patience pays off: The fund is up nearly 13-fold since late 1987. It was down 28 percent in 2008 but still beat 96 percent of similar funds.

Mairs & Power Growth does seem to take a limited view of the world: About half its 45 holdings are a short drive from the Twin Cities area. While that regional approach to investing can close off opportunities, it allows the fund’s managers to tap local contacts to see if their instincts are on target. Last summer, when investors were dumping bank stocks over worries about their mortgage business, Wells Fargo management put out the word that the big bank, which has significant operations in Minnesota, would be fine. Just to be sure, Mark Henneman, a comanager of the fund, checked with Wells Fargo employees he knows around town. “It helped build conviction when it felt like the world was falling apart,” Henneman says. The result: While others were dumping shares of Wells Fargo last summer, Mairs & Power Growth was buying.

Instead of stashing cash like other investors, Frels is fully invested, recently buying companies like industrial toolmaker Fastenal, which he previously thought was too pricey. While he admits that today’s problems don’t lend themselves to quick fixes, he’s happy to wait for his investments to show their stuff—even if it takes years.

FPA Capital (FPPTX)

No fund manager likes to lose money, but Bob Rodriguez takes it personally. His family lost much of its wealth before immigrating to the U.S. from Mexico, teaching him lessons that stick with him today. “I grew up knowing what it was like to lose everything,” he says. So it made sense that after warning about a credit bubble back in 2003, Rodriguez shunned stocks and built up the cash position of FPA Capital.

The fund’s safety-first strategy has paid off. A $10,000 investment in FPA Capital at the stock market’s bottom in 1987 is worth more than $130,000 now, putting the fund, which invests primarily in small- and midcap stocks, second on our list for total return. In 2008, the fund, which is closed to new investors, was down 32 percent. That’s not great, but it’s better than 76 percent of FPA Capital’s investing category. With oil prices down even more than the stock market, the fund has been hurt by declines in energy holdings such as oil driller Ensco International. Still, Rodriguez believes that demand for energy will outstrip supply over the long run. “If we are correct in our analysis, the problems we have in our performance are only temporary,” he says.

After the Treasury Department’s decision to infuse capital into banks last fall, Rodriguez began hunting for companies with strong balance sheets that were also cheap based on measures like their book value and how much cash they generate. The buying, however, was short-lived as Rodriguez grew disenchanted with the bailout efforts. The government “is on the wrong road,” he says. “The Fed is exploding its balance sheet.” Seeing higher inflation, higher taxes and meager economic growth on the horizon, Rodriguez is avoiding long-term bonds and was holding a hefty 38 percent of FPA Capital’s assets in cash as of early November.

When he’s not stewing about the government from his office near Lake Tahoe, Rodriguez, 60, takes off on what he calls his “religious retreats”—racing cars. His racing trailer is outfitted with a Bloomberg data terminal and a satellite hookup, but once he’s in the car, “nothing in the world exists other than that moment.” It may seem like an odd hobby for a cautious manager, but Rodriguez sees plenty of parallels to investing. “Go in too fast and turn too soon, you may hit a cement wall,” he says. “Take it too late or too slowly and you lose speed. You have to balance the risk with the return.”

First Eagle Global (SGENX)

First Eagle built its reputation by spotting bargains and avoiding speculative markets. Two decades ago the fund’s aversion to pricey stocks led Jean-Marie Eveillard to sell its Japanese holdings. Although some shareholders complained when the Japanese market reached new highs, First Eagle escaped the carnage when it crashed 18 months later. More recently, Eveillard and his team built a safety net of cash as they grew uneasy with lofty stock prices and looming credit problems before the worldwide stock market crash of 2008. The crash of 2008 was still painful: First Eagle was down 20 percent. But it still beat about 85 percent of competing global funds. “They did as much as they could have,” says Bridget Hughes, associate director of fund research at Morningstar.

The fund did tripped up in the summer by moving back into the market too soon. Favored stocks like American Express have taken big tumbles, even though the fund’s managers still see it as a strong long-term holding. The mistake, Eveillard says, was failing to factor in what now looks like two to three years of very difficult times for economies around the world.

Despite the quick trigger in getting back in, First Eagle remains comfortably ahead of competing funds. Still, the losses are hard for a team used to making money in all kinds of markets. That’s especially true for Eveillard, who retires this spring, leaving the fund in the hands of Matthew McLennan, who until last fall managed money at Goldman Sachs. “It’s long-distance running,” Eveillard says of First Eagle’s investment philosophy. “We are slowing down, but we’re still on our feet.”

Lately, the team has been eyeing high-yield bonds in the U.S. and stocks in Hong Kong like Wharf Holdings, an operator of malls, office buildings and ports. They have also started bargain-hunting in India and China, countries they used to consider too expensive. And in Japan—two decades after the 1998 crash—they see some of the best buys around. “It’s a value investor’s paradise,” says Deshpande.

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Source: SmartMoney.com | 14 Jan 2009 | 5:00 am

15 Great Stocks From the Great Depression (Deal of the Day)

The worst economic crisis since the Great Depression has investors everywhere wondering whether to buy, hold -- or bail. Though there's no telling whether the current global recession will turn into a sepia-toned, soup-lined sequel to that historic calamity, it did get us thinking: If the whole point of stocks is to buy low and sell high, then the Great Depression must have offered some pretty good buying opportunities.

But what were they? SmartMoney.com went in search of the Great Depression’s best buys, with help from the Center for Research in Security Prices at the University of Chicago’s Booth School of Business. The CRSP crunched numbers to find the 50 best performing stocks from 1932 to 1954 by cumulative total return. The result: A dream portfolio for the greatest investors of the Greatest Generation.

We started with 1932 because, while the famous market crash occurred in 1929, it didn't hit rock bottom until almost three years later. Even uglier, the Dow Jones Industrial Average didn't regain its precrash level until 1954, meaning it took more than a couple of decades to make investors whole.

Looking over the list is a reminder of days gone by -- and a time when company names were straightforward and even mundane. No Navistars or Altiras here. Fans of "The Simpsons" might recall that Mr. Burns had put money into the fictional Amalgamated Spats, but in real life he should have doubled down on Electric Boat and National Acme Co. The former, which still makes submarines to this day as a unit of General Dynamics (GD), returned a whopping 55,000% over those 22 years. National Acme (it made machine tools, not giant slingshots for perpetually frustrated cartoon coyotes) returned more than 10,000%.

We've taken the complete list of 50 top investments and selected 15 of the most telling. One thing many of them share -- and a factor that might resonate with investors today, given the Obama administration’s stimulus plans -- is the impact of massive deficit spending. New Deal, World War II and Cold War outlays fueled many of these stocks. Here, then, is our look at some of the greatest Great Depression stocks.

Electric Boat: Unsinkable Submarine Maker

Cumulative Total Return 1932 to 1954: 55,000% (Rank in Top 50: 1)
Where is it now? A unit of General Dynamics (GD)
Churning out hundreds of PT boats and submarines during WWII (as well as building the U.S.S. Nautilus, the world's first nuclear sub, during the Cold War) more than kept this stock afloat.

International Paper & Power: Paper, Not Plastic

Cumulative Total Return 1932 to 1954: 30,503% (Rank in Top 50: 4)
Where is it now? International Paper (IP)
Long before plastic packaging (or the digital age, for that matter), paper was king when it came to correspondence and containers. Indeed, four of the 50 best stocks from 1932 to 1954 were in companies that made paper, paper bags and corrugated cardboard.

Zenith Radio: Tuned In

Cumulative Total Return 1932 to 1954: 24,146% (Rank in Top 50: 7)
Where is it now? Part of LG Electronics
Once upon a time radios were so big they weren't personal consumer electronic devices; they were furniture. Back then American, not Asian, manufacturers dominated the market for civilian and military use.

Douglas Aircraft: Bombs Away

Cumulative Total Return 1932 to 1954: 23,586% (Rank in Top 50: 8)
Where is it now? Bloodline leads to Boeing (BA)
It's little wonder a military contractor that helped make the B-17 bomber (as well as iconic civilian planes such as the DC-3 and DC-9), would fare well during WWII and the Cold War. North American Aviation (P-51 fighter, B-25 bomber) also made the list.

Minneapolis Honeywell Regulator: Thermostats Were Hot

Cumulative Total Return 1932 to 1954: 21,608% (Rank in Top 50: 9)
Where is it now? Honeywell International (HON)
Indoor climate control and central heating are taken for granted these days, but only thanks to pioneering advances like the company's original Butz Thermo-Electric Regulator "damper flapper," which helped keep offices and factories at just the right temperature.

B.F. Goodrich: When Rubber Met the Road

Cumulative Total Return 1932 to 1954: 20,381% (Rank in Top 50: 11)
Where is it now? Goodrich (GR), the aerospace firm; the tire business was sold to Michelin.
As one of the world's largest makers of rubber and tires for cars, jeeps, trucks and planes, B.F. Goodrich rolled up profits through WWII and the early Cold War.

New York, Chicago & St. Louis RR: Nickel-Plated Gold

Cumulative Total Return 1932 to 1954: 18,174% (Rank in Top 50: 13)
Where is it now? Bloodline leads to Norfolk Southern Corp. (NSC)
Before the interstate highway system, before the St. Lawrence Seaway, before air freight, the spine of the country's transportation system was its railroads. Known as the Nickel Plate Road, the New York, Chicago & St. Louis RR was integral to the war effort.

Skelly Oil: Fueled Captain Midnight

Cumulative Total Return 1932 to 1954: 16,578% (Rank in Top 50: 15)
Where is it now? Bloodline leads to Chevron (CVX)
The U.S. couldn't have emerged as the world's dominant economy without oil and coal. That's why five of the top stocks from the period were energy companies. In a time when oil producers were regional operations, Skelly maintained a national profile by sponsoring the "Captain Midnight" radio drama.

Remington Rand: Tapped for Greatness

Cumulative Total Return 1932 to 1954: 12,428% (Rank in Top 50: 24)
Where is it now? Bloodline leads to Unisys (UI)
Before computers there were Remington typewriters, so it's no small irony that the company also had its fingerprints all over Univac, one of the first commercial computers. Remington Rand also pounded out large numbers of pistols for the military.

National Acme: Machine Tools, Not TNT

Cumulative Total Return 1932 to 1954: 10,351% (Rank in Top 50: 31)
Where is it now? Bloodline leads to Danaher (DHR)
Despite the name, National Acme didn't make giant slingshots or rocket skis for Wile E. Coyote. Rather, it produced machine tools -- the lathes, drills and grinders needed farther up the industrial food chain to shape and bend metal. As American industrial output soared, so too did this stock.

BorgWarner: Four-Wheel Driven

Cumulative Total Return 1932 to 1954: 10,317% (Rank in Top 50: 32)
Where is it now? BorgWarner (BWA)
Auto-parts maker BorgWarner might be best known for its sponsorship of the Indianapolis 500, but its winning turn came from a case transfer technology that helped the Allies slog ahead in four-wheel-drive vehicles.

American-Hawaiian Steamship: Sweet Liberty

Cumulative Total Return 1932 to 1954: 9,161% (Rank in Top 50: 38)
Where is it now? Delisted decades ago; part of the business was sold to Carrix.
Transporting sugar from Hawaii to the mainland was a nice business, but Liberty ships helped save democracy from fascism. American-Hawaiian steamships plied the seas, carrying masses of men and materiel for the war effort.

National Lead Co.: Nuclear Power

Cumulative Total Return 1932 to 1954: 8,676% (Rank in Top 50: 40)
Where is it now? Bloodline leads to NL Industries (NL)
Once the nation's largest lead company, it prospered from massive use of the metal in everything from wiring to paint to munitions. It was also a major miner of titanium and contributed refined uranium and other help to the Manhattan Project, which produced the first atom bomb.

Food Machinery Corp.: Now With 50% More Assault Craft

Cumulative Total Return 1932 to 1954: 8,455% (Rank in Top 50: 42)
Where is it now? Bloodline leads to FMC Corp. (FMC)
What do canning machines and combat in the Pacific have in common? Food Machinery Corp. While industrial-scale food production depended on it for insecticides, fungicides and spray pumps, the Marines Corps depended on it for tracked assault vehicles.

Melville Shoe Corp.: Straight-Laced Investment

Cumulative Total Return: 7,791% (Rank in Top 50: 46)
Where is it now? Bloodline leads to CVS (CVS)
The period 1932 to 1954 was better for companies that made things than sold them to consumers. After all, between the Great Depression and World War II people either had no money or there was nothing to buy. That explains why there are so few retailers on the list of 50. But Melville, famous for Thom McAn shoe stores, shod a generation of feet in uncomfortable, affordable shoes.

For a complete list of the 50 greatest investments from the Great Depression, click here.

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Source: SmartMoney.com | 14 Jan 2009 | 5:00 am

6 Stocks With Suddenly High Yields (Screens)

Excitable CNBC host James Cramer uses the term “accidental high-yielders” to describe companies like Caterpillar (CAT). He means it’s a strong company that’s meant to have a skimpy dividend yield but now has a fat one thanks to the stock market’s recent plunge. Hence, its shares are worth buying.

I agree with the conclusion, especially on Caterpillar, but not with the term. The accident, as near as I can tell, is that stocks since 1802 have yielded an average of 4.9%, but a bubbling up of prices stripped yields to an average of 2.2% over the past two decades. Last year’s price drop lifted yields from 1.9% at the end of 2007 to 3.3% today. That seems less an accident than a return to normalcy.

So let’s call the list of stocks below sudden high-yielders rather than accidental ones. These are well-known names with sturdy balance sheets, modest valuations and a shot at preserving or even growing their sales and profits this year. All have yields that seemed dismissible at the end of 2007, but which through price declines or payment increases have swelled to the sort of figure that sways investment decisions. After all, a go-nowhere stock price coupled with a reliable 6% yield doubles an investor’s money in 12 years.

Caterpillar is up 9%, vs. a 9% drop for the market, since I recommended the stock to contrarian investors at the end of October. This year’s profits won’t nearly match last year’s, but shares go for only nine times the lowered forecast. The world-wide maker of heavy construction machines will cash in if economies rebound soon, and make plenty from parts, repairs and government infrastructure spending if they don’t. Caterpillar has paid quarterly dividends since 1938. Current yield: about 4%.

Blackbaud (BLKB) makes software for nonprofits, including a fundraising platform called Raiser’s Edge. That was a brisk business when stock and house gains were easy. Sales nearly doubled in three years ended 2008. This year they’re seen increasing just 8%. Collecting more sales from existing customers might prove especially difficult. Among 18 surveyed recently by Jefferies & Company, a New York investment bank, just four expect to collect more in donations this year than last and to spend more on their software. Blackbaud stock has lost nearly half its value in a year. But profit is still growing, if slightly, and market share is holding strong. Also, the company will produce free cash equal to 11% of its market value this year. That makes the 3.1% dividend yield seem secure. There are four more names on the table below.

Dishonorable mention to Whole Foods Market (WFMI), whose wares I live on but whose shares I have long found too expensive. The stock has lost more than 80% in three years. I’d sweeten on it, but for management’s decision in August to quit paying the dividend. Not that the company could have afforded 80 cents a share in yearly dividends when this fiscal year’s profit is seen falling to 70 cents a share. But half the former dividend would have been nice. That would now work out to a 3% yield which, combined with a management commitment to reduce debt, is about what I need to start loving the stock today.