Buybacks Gone Bad

Indications: Futures point to weaker start for U.S. stocks; earnings in focus U.S. stock futures point to a weaker start for Wall Street as early economic data illustrates the weakened state of the economy and as more companies report weak earnings, including Ford Motor Co., Eli Lilly and Co. and Starbucks Corp. Source: MarketWatch.com - Top Stories | 29 Jan 2009 | 2:03 pm Homebuyers get a bonus in recovery plan If you're thinking of buying a home, there could be a big bonus for you in the economic stimulus bill that's now before Congress. Source: Business and financial news - CNNMoney.com | 29 Jan 2009 | 2:01 pm Ford says does not need government loans (Reuters) Reuters - Ford Motor Co posted a deeper than expected quarterly net loss on Thursday, but said it would have sufficient cash to fund its turnaround without seeking government loans, and shares rose in premarket trade. Source: Yahoo! News: Business | 29 Jan 2009 | 2:01 pm Earnings Watch: Updates, advisories and surprises A roundup of the latest corporate earnings reports and what companies are saying about future quarters. Source: MarketWatch.com - Top Stories | 29 Jan 2009 | 2:01 pm Europe vows to fight 'Buy America' in stimulus Read full story for latest details. Source: Business and financial news - CNNMoney.com | 29 Jan 2009 | 2:00 pm NewsWatch: Futures point to weaker start for U.S. stocks; earnings in focus U.S. stock futures point to a weaker start for Wall Street with investors ready to take profits on the previous session's rally and as more companies report weak financial results. Source: MarketWatch.com - Top Stories | 29 Jan 2009 | 2:00 pm Altria net drops, but rises excluding revamp and other costs Altria Group reports that fourth-quarter profit fell 69%, but excluding the effects of restructuring and other special items, adjusted earnings per share from continuing operations rose 5.7%, in line with analysts’ estimates. Source: MarketWatch.com - Top Stories | 29 Jan 2009 | 2:00 pm Economic Report: Record numbers man the unemployment lines, U.S. data show U.S. unemployment lines stretch to the longest on record, Labor Department data show, in a vivid sign that the conditions in the labor market continue to worsen. Source: MarketWatch.com - Top Stories | 29 Jan 2009 | 2:00 pm Jobless claims rise again The number of jobless American workers moving to collect their first unemployment checks rose for the third consecutive week, to 588,000, according to a government report released Thursday. Source: Business and financial news - CNNMoney.com | 29 Jan 2009 | 1:56 pm Shell hit by oil prices Read full story for latest details. Source: Business and financial news - CNNMoney.com | 29 Jan 2009 | 1:56 pm Kodak to cut up to 4,500 jobs NEW YORK (Reuters) - Eastman Kodak Co posted an unexpected quarterly loss and said it would cut up to 4,500 jobs this year after suffering a dramatic decline in demand for digital cameras and commercial printing equipment. Source: Reuters: Business News | 29 Jan 2009 | 1:53 pm Futures add to losses after economic data NEW YORK (Reuters) - Stock index futures added to losses on Thursday after data showed a record level of continuing jobless claims and durable orders were weaker than expected. Source: Reuters: Business News | 29 Jan 2009 | 1:53 pm Futures add to losses after economic data (Reuters) Reuters - Stock index futures added to losses on Thursday after data showed a record level of continuing jobless claims and durable orders were weaker than expected. Source: Yahoo! News: Stock Markets News | 29 Jan 2009 | 1:53 pm Futures add to losses after economic data (Reuters) Reuters - Stock index futures added to losses on Thursday after data showed a record level of continuing jobless claims and durable orders were weaker than expected. Source: Yahoo! News: Business | 29 Jan 2009 | 1:53 pm Durable goods orders fall 5 straight months WASHINGTON (Reuters) - New orders for long-lasting manufactured goods dropped 2.6 percent in December, falling for a fifth straight month, according to a report on Thursday that underscored the deepening economic malaise. Source: Reuters: Business News | 29 Jan 2009 | 1:51 pm Durable goods orders fall 5 straight months (Reuters) Reuters - New orders for long-lasting manufactured goods dropped 2.6 percent in December, falling for a fifth straight month, according to a report on Thursday that underscored the deepening economic malaise. Source: Yahoo! News: Business | 29 Jan 2009 | 1:51 pm Before the Bell: Ford, 3M, Altria, Eli Lilly, Starbucks in focus U.S. stock market futures decline Thursday as investors examine a flood of earnings news from the likes of Ford Motor Co. and 3M, and after the House of Representatives approves an $819 billion economic stimulus package. Source: MarketWatch.com - Top Stories | 29 Jan 2009 | 1:50 pm US Airways net loss widens on hedges CHICAGO (Reuters) - US Airways Group on Thursday said its quarterly net loss widened as it wrote down lost value of its fuel hedges. Source: Reuters: Business News | 29 Jan 2009 | 1:49 pm Stocks set to pull back U.S. stock futures fell Thursday, as more job cuts, as well as negative government reports on the job market and the manufacturing industry, took the wind out of the three-day rally. Source: Business and financial news - CNNMoney.com | 29 Jan 2009 | 1:48 pm Green investment must triple to save planet Clean energy investment needs to more than triple to $515 billion a year to stop planet-warming emissions reaching levels deemed unsustainable by scientists, the World Economic Forum (WEF) said in a report today.$ Source: Latest Business News from Times Online | 29 Jan 2009 | 1:48 pm Economic Report: Dec. durable-goods orders down for 5th straight month Orders for U.S.-made durable goods slumped 2.6% in December on weaker demand for almost all product except defense-related items, the Commerce Department reported. Source: MarketWatch.com - Top Stories | 29 Jan 2009 | 1:48 pm Stocks signal lower open as jobless claims rise (AP) AP - Wall Street remains cautious following a government report that the number of people receiving unemployment benefits has reached an all-time high. Source: Yahoo! News: Stock Markets News | 29 Jan 2009 | 1:47 pm LUKOIL ups 2009 gas output growth f'cast to 5 pct MOSCOW, Jan 29 (Reuters) - Russian oil major LUKOIL has raised its forecast for 2009 gas output growth to 5 percent, up from 3-4 percent expected previously, a company spokesman told Reuters on Thursday... Source: RSS feed - channel BNewsBusiness | 29 Jan 2009 | 1:46 pm UPDATE 2-Occidental profit slides but beats Wall St view * Shares firmer in pre-market trade (Adds details, other energy company earnings) Source: RSS feed - channel BNewsBusiness | 29 Jan 2009 | 1:45 pm 'Just get on with it': Dimon urges US to act on crisis Jamie Dimon, CEO of JPMorgan Chase, appealed to the American leadership to 'just get on with' devising a workable programme to address the global financial crisis, as business leaders at Davos expressed growing unease about the impact of the turmoil on global growth Source: Financial Times - US homepage | 29 Jan 2009 | 1:44 pm TSX set to open lower on falling resources (Reuters) Reuters - Toronto's main stock index is seen falling at the open on Thursday as underlying commodity prices may pressure the heavily-weighted materials and energy issues. Source: Yahoo! News: Stock Markets News | 29 Jan 2009 | 1:44 pm Reporter's notebook: 'Gloom' is the mood in Davos, not 'doom' Movers and shakers who have gathered in the Swiss Alps for the annual meeting of the World Economic Forum are downbeat but not despondent, India's commerce minister tells MarketWatch. Source: MarketWatch.com - Top Stories | 29 Jan 2009 | 1:44 pm Ford reports $5.9 billion loss Ford Motor reported that its ongoing losses soared in the fourth quarter, but the company reiterated it still does not need the federal bailout already received by its two U.S. rivals. Source: Business and financial news - CNNMoney.com | 29 Jan 2009 | 1:43 pm Ford says does not need government loans DETROIT (Reuters) - Ford Motor Co posted a deeper than expected quarterly net loss on Thursday, but said it would have sufficient cash to fund its turnaround without seeking government loans, and shares rose in premarket trade. Source: Reuters: Business News | 29 Jan 2009 | 1:43 pm Recession Radar: Jobless Claims Keep Rising & Durable Goods Keep Contracting If you were hoping for more lighthearted or feel good numbers on the economic front, you might have to look elsewhere this morning.  The weekly jobless claims data came in awful again in the becoming routine sense, and durable goods orders were down even worse than what was expected. The weekly jobless claims came in at 588,000 for the week, and now the continuing jobless claims have grown from 4.6+ million to a higher reading of 4.77+ million jobs.  The weekly number is not off drastically, as the estimates were for a drop of 581,000.  The number came in at a revised +3,000 rather than -4,000.  But the continued jobless claims are now at a record high. The durable goods orders tanked on top of bad jobs.  Durable goods orders came in at -2.6% for December, worse than the -2.0% expected. The ex-transport numbers were even worse, with a reading of -3.6% and estimates of only -1.7%.  Ex-defense is also worse with a reading of -4.9%, compared to estimates of -3.9%.  In short, businesses are not spending and consumers are not taking home the high-ticket items and fxtures. Jon C. Ogg January 29, 2009 Source: 24/7 Wall St. | 29 Jan 2009 | 1:42 pm H&M net income beats view; plans push into Russia, China Swedish clothing retailer Hennes & Mauritz AB posts a better-than-expected 9.4% rise in fourth-quarter net income on Wednesday, and says it is pushing ahead on its expansion plans into markets like China and Russia. Source: MarketWatch.com - Top Stories | 29 Jan 2009 | 1:42 pm Subway to create 7,000 new jobs The US sandwich chain Subway says it is to create up to 7,000 new jobs in the UK and Ireland over the next two years. Source: BBC News | Business | World Edition | 29 Jan 2009 | 1:40 pm UPDATE 1-Pozen late-stage trial endpoint acceptable: FDA Jan 29 (Reuters) - Pharmaceutical company Pozen Inc said U.S. health regulators had informed them that the main goal of the company's late-stage study was acceptable, sending its shares up more than 10... Source: RSS feed - channel BNewsBusiness | 29 Jan 2009 | 1:39 pm New jobless claims up, continued claims a record (Reuters) Reuters - The number of U.S. workers filing new claims for jobless benefits rose 3,000 last week, data on Thursday showed, while so-called continued claims hit the highest level on record as a year-long recession chilled employment. Source: Yahoo! News: Business | 29 Jan 2009 | 1:39 pm New jobless claims up, continued claims a record WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless benefits rose 3,000 last week, data on Thursday showed, while so-called continued claims hit the highest level on record as a year-long recession chilled employment. Source: Reuters: Business News | 29 Jan 2009 | 1:39 pm London Markets: Xstrata leads U.K. market lower after rights issue Mining group Xstrata leads the U.K. market lower Thursday after it announces plans to raise 4.1 billion pounds ($5.9 billion) through a rights issue that will help reduce its debt burden. Source: MarketWatch.com - Top Stories | 29 Jan 2009 | 1:39 pm Hungary MOL trade suspended at company's request BUDAPEST, Jan 29 (Reuters) - Trading in shares of Hungarian oil and gas group MOL on the Budapest Stock Exchange has been suspended at the company's request, MOL spokeswoman Dora Somlyai told Reuters... Source: RSS feed - channel BNewsBusiness | 29 Jan 2009 | 1:37 pm UPDATE 2-Celgene posts 4th-qtr loss; drug sales rise * Revlimid sales jump more than 49 percent (Adds details, 2009 outlook) Source: RSS feed - channel BNewsBusiness | 29 Jan 2009 | 1:36 pm UPDATE 1-Glaxo to sell UK govt 10.6 mln courses of Relenza LONDON, Jan 29 (Reuters) - GlaxoSmithKline is to supply 10.6 million treatment courses of its antiviral Relenza to the UK government, it said on Thursday. Source: RSS feed - channel BNewsBusiness | 29 Jan 2009 | 1:36 pm Red Lion Hotels to Report Fourth Quarter 2008 Results on Wednesday, February 11, 2009 SPOKANE, Wash., Jan. 29 /PRNewswire-FirstCall/ -- Red Lion Hotels Corporation (NYSE: RLH) today announced that it will report fourth quarter 2008 results after the market closes... Source: RSS feed - channel BNewsBusiness | 29 Jan 2009 | 1:30 pm Bailing out the states: How it will work Struggling with gaping budget deficits, states are eagerly awaiting the hundreds of billions of dollars coming their way from Capitol Hill. Source: Business and financial news - CNNMoney.com | 29 Jan 2009 | 1:28 pm UPDATE 2-Petro-Canada reports loss, cuts production outlook TORONTO, Jan 29 (Reuters) - Petro-Canada reported a loss on Thursday, hurt by tumbling crude prices and charges related to the deferral of its Fort Hills oil sands project. Source: RSS feed - channel BNewsBusiness | 29 Jan 2009 | 1:24 pm UPDATE 2-Lilly profit falls on ImClone charges * Oper profit $1.07 per share, slightly above expectations Source: RSS feed - channel BNewsBusiness | 29 Jan 2009 | 1:24 pm Hungary bourse suspends trade in MOL shares BUDAPEST, Jan 29 (Reuters) - Trading in shares of Hungarian oil and gas group MOL has been suspended for an indefinite period, the Budapest Stock Exchange (BET) said on its official www.bet.hu website... Source: RSS feed - channel BNewsBusiness | 29 Jan 2009 | 1:23 pm Best Buy (BBY) Becomes A Vulture Someone needs to take advantage of the collapse in retail real estate values. The prices for many locations are too good to be true. Best Buy (BBY) says it may get into the business of taking over vacant stores to build out the number of locations it has in the US. According to Reuters, "U.S. electronics retailer Best Buy Co could take advantage of bankruptcies in the sector by snapping up vacant store locations, but remains cautious as consumer spending continues to slide." It's smart business. It just looks bad. Douglas A. McIntyre Source: 24/7 Wall St. | 29 Jan 2009 | 1:22 pm Pfizer-Wyeth deal fails to create spark NEW YORK (Reuters) - Days after Pfizer said it would buy Wyeth for $68 billion, Pfizer shares fell to nearly a 12-year low and some shareholders are questioning the wisdom of the planned union. Source: Reuters: Business News | 29 Jan 2009 | 1:17 pm Raytheon profit down 34% US defence contractor says rising pension costs cut fourth-quarter profit compared with a year earlier, when it enjoyed a one-time tax gain Source: Financial Times - US homepage | 29 Jan 2009 | 1:14 pm The False Death of Trickle-Down Economics, Part II By John Tamny  RealClearMarkets Last October, this column addressed the notion of trickle-down economics. The aforementioned concept has to do with the basic belief that the economic gains made by the rich accrue to those not rich. Economic thinkers from Paul Krugman to Jared Bernstein to Jonathan Chait (Chait refers to thinking here as the "Big Con") have dismissed the idea that the above is real, but as the referenced column showed, trickle-down economics quite simply is. Indeed, all it took to prove this point was to collect media accounts showing how economic uncertainty for the well-to-do in our midst had greatly impacted those not as well-to-do. This revealed itself everywhere from the retail sector to tips given at restaurants to charity. Read more... Source: 24/7 Wall St. | 29 Jan 2009 | 1:14 pm Economics blog What capitalism will look like after the fog lifts Source: BBC News | Business | World Edition | 29 Jan 2009 | 1:10 pm Opening Bell: 01.29.09 Ford Reports 4th Quarter 2008 Net Loss of $5.9 Billion (PRNewswire) "Net loss of $5.9 billion, or $2.46 per share, for the fourth quarter of 2008 amid a sharp global decline in vehicle demand; pre-tax loss of $3.7 billion from continuing operations, excluding special items." JPMorgan Exited Madoff-Linked Funds Last Fall (NYT) The House of Dimon began pulling the millions of its own money it'd invested in the Ponz. Master in 2006 this fall, after "a wide-ranging review of our hedge fund exposure," when JPM "became concerned about the lack of transparency to some questions we posed as part of our review." Good call! Except now some investors who'd been advised to put money with Madoff are pissed they weren't told to get out too, before, you know, losing everything. So that's kind of awk. Merrill Bonus Case Widens as Deal Struggles (WSJ) New York Attorney General Andrew Cuomo is expanding the scope of his investigation into bonuses paid by Merrill Lynch, with the inquiry now likely to include whether directors and shareholders were misled about giant losses at the Wall Street firm, a person familiar with the situation said. Mr. Cuomo plans to press John Thain, the former Merrill chairman and chief executive who was forced to resign last week from Bank of America Corp., on what he told Merrill directors about ballooning losses in mid-December, this person said. In addition, Mr. Cuomo wants to know why the Charlotte, N.C., bank didn't publicly disclose that Merrill's condition was deteriorating. BofA Chairman and CEO Kenneth Lewis is likely to face questions from Mr. Cuomo about bonus payouts by Merrill, including what he told directors about them, according to this person. [...] The investigation is at an early stage, but Mr. Cuomo's office is examining potential remedies such as trying to recover bonuses already paid, fines or alleging securities-law violations, the person familiar with the investigation said. Weill Pitches In (NYP) Citi is shouting from the rooftops/cockpit of the Dassault Falcon 7X that former CEO Sandy Weill has agreed to give up the perks of his retirement package, which include, among other things, a car and driver, plus use of the company's jets, and an office in the General Motors building, which Citi was paying for. Source: Dealbreaker | 29 Jan 2009 | 1:03 pm Kodak to cut up to 3,000 more jobs Photo products maker Eastman Kodak said Thursday that it will cut 2,000 to 3,000 more jobs in 2009, bringing to 3,500 to 4,500 the number of positions it will eliminate this year. Source: Business and financial news - CNNMoney.com | 29 Jan 2009 | 1:03 pm Ford makes annual loss of $14.6bn Ford Motor reported a record $14.6bn loss for last year and said it planned to draw down $10.1bn of credit lines because of the "instability of the capital markets" Source: Financial Times - US homepage | 29 Jan 2009 | 1:02 pm Ford reports record yearly loss US carmaker Ford reports the biggest full-year loss in its history, but says it still does not need federal loans. Source: BBC News | Business | World Edition | 29 Jan 2009 | 1:00 pm Top Pre-Market Analyst Downgrades (AFFX, APD, ACAS, AMLN, AMAT, AINV, CTXS, DRYS, XOM, IRBT, LRCX, NFLX, NSR, NHY, NYX, BTU, UPS) These are some of the top pre-market analyst downgrades and cautious calls we are seeing this Thursday morning: Affymetrix (AFFX) Cut to Underweight at JPMorgan. Air Products (APD) Cut to Neutral at JPMorgan. American Capital (ACAS) Cut to Underperform at KBW. Amylin Pharma (AMLN) Cut to Sell at Canaccord. Applied Materials (AMAT) Started as Sell with $8 target at Auriga. Apollo Investment (AINV) Cut to Market Perform at KBW. Citrix Systems (CTXS) Cut to Neutral at Credit Suisse. DryShips (DRYS) Cut to Underperform at Oppenheimer. Exxon Mobil (XOM) Cut to Neutral at Goldman Sachs. iRobot (IRBT) Cut to Neutral at JPMorgan. Lam Research (LRCX) Cut to Underperform at Credit Suisse. Netflix (NFLX) Started as Sell at Maxim Group. Neustar (NSR) Cut to Neutral at JPMorgan. Norsk Hydro (NHY) Cut to Market Perform at Bernstein. NYSE Euronext (NYX) Cut to Neutral at Piper Jaffray. Peabody Energy (BTU) Cut to Market Perform at FBR. United Parcel Service (UPS) Cut to Underweight at Morgan Stanley. Jon C. Ogg January 29, 2009 Source: 24/7 Wall St. | 29 Jan 2009 | 12:57 pm 3M reports lower quarterly profit NEW YORK (Reuters) - Diversified manufacturer 3M Co said on Thursday quarterly profit and sales fell due to the economic downturn and that it would cut capital expenditures by 30 percent in response to lower demand. Source: Reuters: Business News | 29 Jan 2009 | 12:56 pm 3M reports lower quarterly profit (Reuters) Reuters - Diversified manufacturer 3M Co said on Thursday quarterly profit and sales fell due to the economic downturn and that it would cut capital expenditures by 30 percent in response to lower demand. Source: Yahoo! News: Business | 29 Jan 2009 | 12:56 pm Top Pre-Market Analyst Upgrades (BBY, CB, DVA, DFT, FCX, FMS, MWE, MCHP, WFT) These are some of the top per-market analyst upgrades and positive calls we are seeing from Wall Street this Thursday morning: Best Buy (BBY) Raised to Overweight at Barclays. Chubb (CB) Raised to Buy at Bank of America-Merrill Lynch. DaVita (DVA) Started as Outperform at RBC. Dupont Fabros Tech (DFT) Raised to Buy at UBS. Freeport McMorRan (FCX) Raised to Hold at Canccord. Fresenius Medical (FMS) Started as Outperform at RBC. MarkWest Energy (MWE) Raised to Outperform at Morgan Keegan. Microchip Tech (MCHP) Raised to Overweight at Barclays. Weatherford (WFT) Raised to Overweight at JPMorgan. Jon C. Ogg January 29, 2009 Source: 24/7 Wall St. | 29 Jan 2009 | 12:48 pm Shell's fourth quarter profits tumble The tumbling price of oil hit fourth quarter profits at Europe's largest oil group but the annual profit of $31.4bn was a record for European companies Source: Financial Times - US homepage | 29 Jan 2009 | 12:45 pm Ford loses $5.9B in fourth quarter, still won't seek aid DEARBORN, Mich. -- Ford Motor Co. says it lost $5.9 billion in the fourth quarter but it has no plans to seek federal aid unless economic conditions worsen. Source: RSS feed - channel BNPaperBusiness | 29 Jan 2009 | 12:40 pm Blame game World leaders attack US economic leadership Source: BBC News | Business | World Edition | 29 Jan 2009 | 12:38 pm European stocks drop sharply (AFP) AFP - Europe's main stock markets fall sharply on Thursday, pulled down by the banking sector which ended a brief rally on profit-taking, traders said. Source: Yahoo! News: Stock Markets News | 29 Jan 2009 | 12:36 pm House passes $819 billion stimulus bill The House on Wednesday evening passed an $819 billion economic stimulus package Wednesday on a party-line vote, despite President Obama's efforts to achieve bipartisan support for the bill. Source: Business and financial news - CNNMoney.com | 29 Jan 2009 | 12:36 pm Sony sinks to Q3 loss, Nintendo cuts outlook TOKYO (Reuters) - Sony Corp fell into the red in the latest quarter and reiterated its forecast for a record annual loss due to sliding demand and a stronger yen, while rival Nintendo Co cut its full-year outlook for the second time in three months. Source: Reuters: Business News | 29 Jan 2009 | 12:36 pm Tieup between Channel 4 and the BBC Worldwide 'makes sense' A tieup between Channel 4 and the BBC Worldwide the corporation's commercial arm "makes sense" according to the longawaited Digital Britain report by communications minister Lord Stephen Carter. Source: Telegraph Finance | 29 Jan 2009 | 12:35 pm 'Tough 2009' warns air industry An industry body warns that both airline passenger numbers and air cargo traffic will decline during the coming year. Source: BBC News | Business | World Edition | 29 Jan 2009 | 12:34 pm Transport hit by French strikers French rail and air services are disrupted as hundreds of thousands of workers join a one-day strike over the economy. Source: BBC News | Business | World Edition | 29 Jan 2009 | 12:33 pm Shell hit by falls in oil price Oil giant Royal Dutch Shell reports a sharp fall in quarterly profits but still posts record annual results. Source: BBC News | Business | World Edition | 29 Jan 2009 | 12:29 pm Opec pledges to push oil back above $50 a barrel$ Opec members need an oil price above $50 a barrel to make exports worthwhile, the head of the cartel said today, adding that more production cuts were possible later this year.$ Source: Latest Business News from Times Online | 29 Jan 2009 | 12:28 pm Ford (F) Earnings: In Trouble No Matter What It Says Ford (F) says it does not need any TARP money. Its fourth quarter earnings have to make Wall St. and Congress question that. The No.2 US car company reported a fourth quarter net loss of $5.9 billion, or $2.46 per share compared with a net loss of $2.8 billion, or $1.33 per share in the period a year ago.The corporation's revenue for the last quarter of 2008 was $29.2 billion, down from $45.5 billion a year ago. The decline was due, in part, to lower volume, the sale of Jaguar Land Rover and exchange translation. In the press release, Ford still says it does not need a dime of outside money. Not likely Ford cut its global auto operating costs by $1.4 billion in the fourth quarter. If sales in the US fall to ten million units this year, that may not be enough to get Ford back to break even. Ford has another large problem which will make repairing the company difficult. It profits from outside the US are collapsing. Up until earlier in 2008, the firm was able to count on operating income in places like Latin America and Asia to carry some of its earnings load. But, for the last quarter, Ford South America reported a pre-tax profit of $105 million, compared with $418 million a year ago. The company's Asia Pacific and Africa's units ran at a pre-tax loss of $208 million compared with a profit of $10 million in the quarter a year ago. And, in Europe, Ford had a pre-tax loss of $330 million, compared with a profit of $223 million a year ago. Ford's international operations have become as much of a boat anchor as its US business is. Ford still has over $20 billion of cash and cash equivalents on it balance sheet. That may be enough money to get it though the recession. But, if car sales worldwide drop as much in 2009 as they did in 2008, Ford's ability to continue without assistance goes away Douglas A. McIntyre Source: 24/7 Wall St. | 29 Jan 2009 | 12:25 pm Cookson cuts 1,250 jobs and taps investors Cookson, the industrial group, is cutting 1,250 jobs and tapping shareholders for £240 million of fresh capital in a savagely discounted rights issue as it grapples with the sharp downturn in the steel industry. Source: Latest Business News from Times Online | 29 Jan 2009 | 12:17 pm Air cargo traffic plummets as global recession worsens Air cargo traffic has plummeted as a result of the global recession according to the latest figures released by the aviation industry. Source: Telegraph Finance | 29 Jan 2009 | 12:15 pm H&M creates up to 7,000 new jobs Swedish clothing store H&M says it plans to create between 6,000 and 7,000 new jobs in 2009. Source: BBC News | Business | World Edition | 29 Jan 2009 | 12:13 pm Bank stocks drag Europe down despite Asian gains (AP) AP - Bank stocks dragged European markets down Thursday, with investors booking profits on big gains earlier this week. The passage of a $819 billion economic stimulus package by the U.S. House of Representatives overnight failed to cheer European markets. Source: Yahoo! News: Stock Markets News | 29 Jan 2009 | 12:02 pm The Car Rental Business Want Money To Buy Cars (CAR)(HTZ)(F)(GM) Watching the land grab for TARP money becomes more entertaining every day. Now Hertz (HTZ) and Avis (CAR) want money to buy Ford (F) and GM (GM) cars. The plan makes a perverse sort of sense. Hertz and Avis don't have access to the capital that they need to keep their fleets fresh. Their customer bases are dropping as the economy cuts into consumer and business rentals. Ford, GM, and Chrysler could use the revenue from sales. According to The Wall Street Journal, "Avis Budget Group Inc., Hertz Global Holdings Inc. and other rental-car companies are lobbying Congress to allow them to use Troubled Asset Relief Program funds to finance new auto purchases." The trouble with the proposed program is simple. US car companies have cut back on fleet sales, which include the rental companies, because these sales have low margins. If the government improves the ability of the rental firm's to buy more inventory from Detroit, it will probably be a cut rate prices. So, the Treasury Secretary can make sure the rental companies survive by funding them to pay below market prices for cars. Then, it can give The Big Three more capital to make up for the difference. Douglas A. McIntyre Source: 24/7 Wall St. | 29 Jan 2009 | 11:41 am Have to do layoffs? How to fire right Unlike many of his management consulting peers, Tom Peters deems across-the-board staff cuts "dumb" and multiple rounds of layoffs counterproductive. Source: Business and financial news - CNNMoney.com | 29 Jan 2009 | 11:41 am Disneyland Paris offers 'sterling packages' as it fights to keep Britons Disneyland Resort Paris is offering 'sterling packages' as it fights to hold on to British holidaymakers choosing not to venture abroad because of the weakness of the pound. Source: Telegraph Finance | 29 Jan 2009 | 11:27 am Nigeria scraps S Korea oil deal Nigeria cancels an oil exploration deal with South Korea, claiming that Seoul has failed to come up with agreed payments. Source: BBC News | Business | World Edition | 29 Jan 2009 | 11:22 am OPEC Ready To Take Crude Prices To The Mat After months of false starts, OPEC claims it is ready to drop production far enough to pull more money out of the pockets of the oil-consuming nations. The cartel has been humiliated more than once as it has chopped output only to see the price of oil drop further. Since September, OPEC said it has taken four million barrels a day out of circulation. That number is in dispute. It may be smaller. But, the fact of the matter is that some of the organization's members probably did not follow the rules and cut as fast or deep as had been planned. Nations including Iran and Venezuela may need the capital too much to drop the number of barrels that they export. Once oil prices started to cascade from over $141 a barrel this last summer to well below $40, OPEC knew that its members would not be able to support their own economies which, in many cases rely almost entirely on income from crude sales. Russia, which is not a member of the cartel, is facing similar trouble, so the incentive to move oil back toward $70 gets greater as each day passes. According to MarketWatch, "OPEC is ready to make further cuts in oil production in coming months if prices and global demand don't stabilize, the oil cartel's secretary general said at the World Economic Forum." The world should getting ready for much higher oil prices, even if that will make the recession deeper. OPEC has the capacity to cut demand at a rate to outrun falling supply. It has not done so, but that could change before the end of this quarter. Its member nations are ready to put their own interests ahead of those of both their customers and the economy at large. The countries in the cartel have relied on oil to build their own infrastructures and sovereign funds. The money has allowed them to invest in businesses throughout the US, EU, and Japan. Now, when assets in those nations are relatively cheap, OPEC members have lost the capital that they need to take advantage of bargains. The price of oil is moving back up. The only question is how far. Douglas A. McIntyre Source: 24/7 Wall St. | 29 Jan 2009 | 11:21 am Global banks join clamour for bailouts The crisis facing banks was sharply underlined today when Russia's second-biggest bank admitted in Davos that it was seeking a bailout and Germany indicated that it was coming round to the idea of "bad banks" to hive off toxic debt. Source: Latest Business News from Times Online | 29 Jan 2009 | 11:18 am Sony's profits plunge after global price war Sony revealed today the extent of its punishment from a dire pre-Christmas shopping season and a spiralling global electronics price war when it reported a quarterly operating loss of nearly 18 billion yen (£142 million). Source: Latest Business News from Times Online | 29 Jan 2009 | 11:12 am WEF 2009: BP sees further crash in oil demand OPEC behind the curve The recession is likely cause a deeper slump in demand for oil this year than recognized so far by OPEC says BP's chief executive Tony Hayward. Source: Telegraph Finance | 29 Jan 2009 | 11:08 am Ford (F): Shopping Volvo To China The US car market does not need more companies competing for a shrinking pie. Ideally, it should have less. Ford (F) may inadvertently be letting China into the American race for market share. But, Ford needs the money. By most estimates, the No.2 US car corporation is burning through more than $1 billion a month. As total American vehicle sales drop as low as ten million this year, Ford's financial situation will get worse, even if it gets concessions from the UAW and suppliers. To help raise capital, Ford has been shopping Volvo. There has been some hope that Sweden, where Volvo was founded, might buy the brand. So far, there is no indication that will happen. In the meantime, Ford may be getting interest from several Chinese car companies. For them to afford Volvo would probably require government assistance, but industries in the world's most populous country are used to being helped in what is not an entirely free market economy. Why should the automotive sector be any different? According to The Wall Street Journal, as it has become clear that Volvo will be sold soon, "Companies expected to express interest include Chinese auto makers Geely Holding Group, SAIC Motor Corp. and Chongqing Changan Automobile Co." Chinese car companies have been showing up an international auto shows for years, hoping to prove that they should be able to market their products outside their home market. Most experts who have seen their products do not believe that their quality is good enough to compete in the US and EU markets. Buying Volvo would take that barrier away. So, China's desire to move into the world's largest auto market may not have to be put off by years while it develops models that would be attractive to US consumers. A government-supported initiative to sell vehicles in America would allow one or more of the car firms on the mainland to play on the same field that helped Toyota (TM) and Honda (HMC) build themselves into two of the largest companies in the world. The Big Three do not need any more competition, but Ford may let another player into the game. Douglas A. McIntyre Source: 24/7 Wall St. | 29 Jan 2009 | 11:02 am France stays at home as Black Thursday strike falls flat French business was in hibernation today as millions of workers stayed at home to avoid a nationwide public sector strike in protest at President Sarkozy's handling of the global economic crisis. Source: Latest Business News from Times Online | 29 Jan 2009 | 11:00 am Festive cheer for embattled pub sector Mitchells & Butlers (M&B) and Fuller, Smith & Turner provided a fresh shot in the arm to the embattled pub sector today as they both reported robust trading over Christmas and the new year. Source: Latest Business News from Times Online | 29 Jan 2009 | 10:55 am Calls for oil at $60-$80 a barrel Opec and leading oil producers say an oil price of $60 to $80 a barrel is necessary to fund future investment. Source: BBC News | Business | World Edition | 29 Jan 2009 | 10:54 am PPI: Banks to be banned from selling alongside loans Competition Commission rules The Competition Commission is to ban the sale of payment protection insurance PPI alongside credit agreements. Source: Telegraph Finance | 29 Jan 2009 | 10:52 am Shell shares are a hold after mixed results Shell's fourthquarter results announcement was a mixed bag. Source: Telegraph Finance | 29 Jan 2009 | 10:40 am As China Lectures The West, Its Own Economic Statistics Are Almost Certainly Wrong When China's Lazarus, Deng Xiaoping, finally became the absolute leader of the world's most populous nation in 1978, the country began its evolution from being an evil empire to becoming America's most prolific trading partner. When he died in 1997, China was well on its way to becoming the fastest growing large economy in the world. For at least ten years China's GDP has grown at more than 10% and it is now the third largest economy in the world. Many projections show it passing the US as the world's preeminent economy before the middle of the century. Deng's progeny, Chinese Premier Wen Jiabao, took his turn at the podium in Davos to lecture the developed nations on how badly they had damaged world economic growth and undermined employment. He risked exposing the fact that his own country is almost certainly doing much worse than its own statistics show. It is no secret that outsiders have been suspicious of how well China keeps it numbers on GDP, unemployment, inflation, and other key measurements of its financial health. Some analysts even believe that China has cheated itself by understating its growth. Less than a year ago, The Economist made the observation that "Amazingly, most economists reckon that China has understated its growth in recent years." Most revisions that the Communist central government made over that period were upward from the original numbers. The two deep, but hard to prove, concerns about China's inability to track its own economy are that it does not have the data collection infrastructure to get accurate information or that the government benefits from fudging the numbers to make growth seem uniform from year to year. The belief that China cannot accurately measure the details of its own economy is probably accurate. In the US, where the government has decades of practice at collecting and reporting figures, numbers are nearly always revised demonstrating that they were not accurate in the first place. If China has been "gaming" its numbers for propaganda purposes, that program may be continuing and the government may now be overstating its economic health. The New York Times recently pointed out that graduates of the best universities in China cannot get jobs. The Observer reported that "as the Chinese New Year dawns and the global economic crisis deepens, the government fears that mass unrest could challenge its control of the country."  It is a radical but effective way for citizens to make the point that in China they look to the government as a provider of their sustenance. These pieces of data about China's unemployment are too modest to allow any conclusion, but what is not modest is the sharp drop in GDP in every major importing nation around the world. There is no China Miracle without the Western miracle of seemingly endless consumer confidence and the buying power that accompanies it. In the fourth quarter, China reported that its GDP growth dropped to 6.8%.  Most analysts had expected better and were concerned about the rapidity of the slowdown. But, anyone paranoid about the country's ability to report numbers or completely control key information for both its own citizens and the outside world should be willing to believe that the figures are now being pitched higher than they really are. There is certainly more than anecdotal information about members of China's middle classes leaving for rural areas as large factories close. The stories about exportable goods sitting on docks and in ship holds are not fabricated. China is hostage to the demand for its inexpensive goods. If unemployment in large developed nations moves to 10% and GDP in the same countries begins a violent contraction, the China economic expansion will have lost almost all of its fuel. How much is China overstating the health of its economy? Is 6.8% GDP growth a false figure which has been posted while China's economy is actually shrinking? Certainly not. But, could GDP growth be closer to 5%? The answer is probably yes. If that is the case, then 2009 will be worse and the last wheel of global expansion will have fallen off, even as its details are being inadvertently or actively concealed Douglas A. McIntyre Source: 24/7 Wall St. | 29 Jan 2009 | 10:35 am OPEC warns of further oil cuts: sec gen (AFP) AFP - OPEC members need an oil price above 50 dollars a barrel to make exports worthwhile, the head of the cartel said Thursday, adding that more production cuts were possible later this year. Source: Yahoo! News: Stock Markets News | 29 Jan 2009 | 10:23 am Nintendo hit by rise in yen as Wii sales slow Computer games maker Nintendo said demand for the Wii console will slow as the rise of the yen undermined the value of sales to the US and Europe. Source: Telegraph Finance | 29 Jan 2009 | 10:19 am JP Morgan says has "plenty of capital" DAVOS, Switzerland (Reuters) - JPMorgan Chase & Co has "plenty of capital" and wants governments to stop talking about nationalizing banks, its CEO said on Thursday. Source: Reuters: Business News | 29 Jan 2009 | 10:08 am Nintendo cuts profit forecast by 33 per cent Nintendo, the maker of the Wii games console and the favourite safe-haven share on the Tokyo stock exchange, has stunned the market with a 33 per cent cut to its full-year profit forecasts. Source: Latest Business News from Times Online | 29 Jan 2009 | 10:05 am You're fired You're hired the goings and comings at 3i Ah Philip do sit down. Now I'd just like to thank you for all your hard work over the past five years. Source: Telegraph Finance | 29 Jan 2009 | 10:04 am Santander holds dividend as profits rise Spanish banking giant Santander offered a ray of hope to shareholders in the financial sector on Wednesday as it promised to hold its dividend as it reported a 9pc jump in net profits. Source: Telegraph Finance | 29 Jan 2009 | 10:03 am Johnston Press directors quit before strategy overhaul Three directors at Johnston Press have left the company ahead of a crucial strategy announcement from new chief executive John Fry. Source: Telegraph Finance | 29 Jan 2009 | 10:00 am PPI sales to be banned with credit agreements Banks and insurers suffered a significant setback today as the Competition Commission launched a drastic crackdown on the way that payment protection insurance (PPI) is sold in Britain. Source: Latest Business News from Times Online | 29 Jan 2009 | 9:55 am China and Russia blame US for financial crisis The premiers of China and Russia accused America of sparking the economic crisis as the Davos political and business summit made a gloomy start. Source: Latest Business News from Times Online | 29 Jan 2009 | 9:45 am Best Buy CEO eyes bankrupt retailer locations (Reuters) Reuters - U.S. electronics retailer Best Buy Co could take advantage of bankruptcies in the sector by snapping up vacant store locations, but remains cautious as consumer spending continues to slide. Source: Yahoo! News: Business | 29 Jan 2009 | 9:45 am Pacific Sunwear to cut costs amid downturn The Anaheim-based teen specialty retailer says it will reduce its headquarters and field management staff by about 11% among other moves. ... Source: RSS feed - channel BNPaperBusiness | 29 Jan 2009 | 8:00 am Strike threat looms over Southern California Gas labor talks Time for negotiations with the Utility Workers Union of America is running out. Southern California Gas Co. and... Source: RSS feed - channel BNPaperBusiness | 29 Jan 2009 | 8:00 am Boeing to cut about 10,000 jobs The reductions are announced as the airplane manufacturer reports losing $56 million in the fourth quarter. With... Source: RSS feed - channel BNPaperBusiness | 29 Jan 2009 | 8:00 am Stocks rise on reports of Obama plan for bad bank assets The Dow gains 200 points on speculation that the administration may set up a 'bad bank' to acquire soured assets and on the Fed's statement that it expects to keep interest rates low 'for some time.' ... Source: RSS feed - channel BNPaperBusiness | 29 Jan 2009 | 8:00 am JetBlue Airways to begin flying out of LAX The carrier, which has drawn a loyal following at Long Beach Airport, will offer daily nonstop service from Los Angeles to Boston and New York's JFK airport. ... Source: RSS feed - channel BNPaperBusiness | 29 Jan 2009 | 8:00 am Wells Fargo swings to a loss, but stock jumps 31% 'Bad bank' prospects propel the company's shares on a day that it reports a fourth-quarter loss of $2.55 billion. ... Source: RSS feed - channel BNPaperBusiness | 29 Jan 2009 | 8:00 am 401(k)s still lure cash despite big losses Millions saw the value of the retirement accounts plunge an average of 27% last year, Fidelity finds in a survey, but nearly all continue to invest. ... Source: RSS feed - channel BNPaperBusiness | 29 Jan 2009 | 8:00 am Fed's new mortgage policy could signal Obama's plans The central bank may reduce balances of loans it owns if struggling borrowers meet certain conditions. A new Federal... Source: RSS feed - channel BNPaperBusiness | 29 Jan 2009 | 8:00 am Delay in switch to digital TV is delayed A House vote to expedite the extension lacks the needed two-thirds majority, but proponents expect it to pass soon. ... Source: RSS feed - channel BNPaperBusiness | 29 Jan 2009 | 8:00 am Gloom deepens in Japanese tech sector The sense of crisis in Japan's technology industry deepened as Toshiba said it would fall to a Y280bn net loss in the year to March, and even star performer Nintendo cut its profit forecast Source: Financial Times - US homepage | 29 Jan 2009 | 7:44 am NZers coping with recession - English Finance Minister Bill English said while the recession was hurting New Zealanders they were resilient and not paralysed by fear. "You get the sense right across the board in New Zealand that people are pretty resilient around this... Source: New Zealand Herald - Business | 29 Jan 2009 | 7:20 am Australian stocks: Market edges into positive ground Bargain hunters nudged the Australian share market into positive territory, supported by resources and oil stocks, following firmer commodity prices and a strong rally on Wall Street. At 1615 AEDT, the benchmark S&P/ASX200... Source: New Zealand Herald - Business | 29 Jan 2009 | 7:00 am NZ stocks: Good news fails to spark revival The New Zealand share market closed higher but off its best levels on the day central bank governor Alan Bollard slashed interest rates. The 150 basis point cut in the Official Cash Rate to 3.5 per cent was good news for equities,... Source: New Zealand Herald - Business | 29 Jan 2009 | 6:00 am Electrolux to cut jobs Whitegoods manufacturer Electrolux has cut 44 jobs in Australia and New Zealand due to the economic slowdown. Most of the jobs will go in Australia from the company's head office in Sydney, primarily in marketing and administration... Source: New Zealand Herald - Business | 29 Jan 2009 | 6:00 am Currency: Hasty retreat by kiwi The New Zealand dollar yield story took a knock today in the form of a gasping 150 basis point cut in the Official Cash Rate to a historic low of 3.5 per cent. The NZ dollar plunged after the 9am announcement from the Reserve Bank... Source: New Zealand Herald - Business | 29 Jan 2009 | 5:30 am 5 Stocks That Lost a Bundle on Buybacks (Screens) Stock buybacks aren’t the equal of dividends, I’ve learned over the past year. Companies that generate spare cash are meant to return a portion to stockholders. Managers can do that in two ways. They can distribute a small payment for each share owned (a dividend) or use the money to buy and retire stock. Theoretically, investors should slightly prefer buybacks. They make shares scarcer and thus more valuable by, all things equal, the same amount dividends would add to wallets. Investors are taxed on dividends but not buybacks, tilting the benefit. Companies grew plenty fond of buybacks in recent years. In the early 1980s, 90 cents of each dollar returned to shareholders was delivered through dividends, and the rest through buybacks. Two years ago buybacks topped dividends for the first time. That seemed to change things for stock pickers. High dividend yields have long been a powerful predictor of plump stock returns, perhaps because high yields are one result of low share prices. One strategy, popularized by Michael O’Higgins in his 1991 book "Beating the Dow," called for investors to simply buy at the start of each year the 10 highest yielders of the 30 stalwarts in the Dow Jones Industrial Average. This Dogs of the Dow approach beat the market by three percentage points a year over a half century ended 1995, but results fizzled over the next 10 years. In a book I wrote two years ago on stock-screening strategies, I reported on an updated dogs approach that redefined yield to include dividend and buyback spending, instead of dividends alone. A company with a stock market value of $100 million that spends $3 million on dividends has a dividend yield of 3%, but if it spends another $4 million on buybacks, it has a net payout yield of 7%. Four prominent finance professors published a study of the predictive power of this new measure. Over 22 years ended 2005, the original dogs, based on dividend yields, beat the Dow by three percentage points a year. The new dogs, based on dividends and buybacks, beat it by twice as much. I wonder now if that finding will hold once fresh research becomes available. Part of the appeal of dividends is that investors can reinvest payments in good years and bad, thereby purchasing more shares when prices are low. The past six months have shown how much easier it is for companies to scrap their repurchase plans in a downturn than to forsake their dividends. A few high-profile companies have cut their dividend payments of late, but for each S&P 500 company that cut payments last year, six increased them. Even in the dismal fourth quarter, payments for the S&P 500 shrank just 6.1%. That figure would surely be lower, but for the high weighting the index has long assigned to now-troubled banks. (True to form, dividend payers did better than nonpayers for the year, losing 39% versus 45.4%.) Buybacks, on the other hand, imploded. Companies reduced payments at a faster rate than their stock priced dropped — by 57%, Bloomberg reports. Company managers, it seems, are prone to that most common of investor mistakes: buying high, and then clutching cash when prices fall. Dividends impose discipline. Buybacks don’t. Consider the capital lost by the companies below, which spent giant sums on shares just before prices plunged. They’ve now drastically slowed their buying.
Company	Ticker	Industry	Stock Market Value ($mil.)	Buyback Spree	A Year Later...	Even Though the Stock Price Fell...
Abercrombie & Fitch	ANF	Clothing Stores	1,650	$288 million over 39 weeks ended Nov. 3, 2007	spent 83% less	64%
Best Buy	BBY	Electronics Stores	11,684	$3.5 billion over nine months ended Dec. 1, 2007	spent nothing	59%
CBS	CBS	Diversified Media	4,166	$3.4 billion over nine months ended Sep. 30, 2007	spent 99% less	54%
Motorola	MOT	Communications Equipment	10,674	$2.5 billion over nine months ended Sep. 29, 2007	spent 94% less	72%
The Home Depot	HD	Home Improvement Stores	37,504	spent $10.8 billion over nine months ended Nov. 2, 2008	spent 99% less	25%

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 | 29 Jan 2009 | 5:00 am

BlackBerry Storm Rages On

Two months ago Research In Motion released Storm, its first touchscreen phone, to some of the harshest reviews that a phone has seen in recent times. Yet sales of the device tell a different story.

The BlackBerry Storm is doing pretty well, to the tune of 1 million sold since its launch on Verizon's network.

That may not be success on the scale of the iPhone, which sold 1 million units in just a weekend, but it is a respectable showing. Storm's success is comparable to the much-anticipated first phone based on Google's Android operating system, the HTC G1 from T-Mobile. It's also far more than you might expect from a device that was labeled "dark, sodden and unpredictable," by prominent gadget reviewer David Pogue.

"It shows that there are two worlds that exist out there," says Michael Gartenberg, a technology analyst. "The digerati, and the mainstream consumers who are just looking for a reasonable experience with the carrier they want."

So what's behind the Storm's surprising success?

Two words: BlackBerry and Verizon.

"If you want true push e-mail and have been a longtime BlackBerry user, there's really just one touchscreen phone out there for you," says Peter VanRysdam, a Storm user who is vice president of marketing of 352 Media Group, a web design company.

Other factors have helped, too, such as the availability of the device on Verizon Wireless, the biggest cellphone service provider in the U.S., strong promotion of the phone, and the loyal BlackBerry fan base.

"This underscores the symbiotic relationship between carriers and handset vendors," says Gartenberg. "For a lot of users, Verizon is the network of choice and a BlackBerry is the device of choice."

RIM launched the BlackBerry Storm on Nov. 21 in the U.S. as its first touchscreen device. Despite innovative features—most notably, a touchscreen with tactile feedback that gives users a feel similar to physical buttons—the phone drew some harsh criticism.

Wired.com gave it six out of 10 while New York Times reviewer David Pogue, in one of his harshest reviews ever for a device, said the Storm "even muffs simple navigation tasks."

Still, sales have been strong. Since its release, RIM has said it is pleased with how consumers have been taking to the Storm. The company also offered updates for the phone to fix problems such as the accelerometer lag and the unexpected lock up of the phone.

 Reports of the Storm's problems may have been greatly exaggerated, says Simona Jankowski, an analyst with Goldman Sachs, in a research note.

"Our retail checks suggest that the Storm is Verizon’s best-selling smartphone, and the rate of returns is relatively low, contrary to recent market concerns and internet blogs."

Some Storm users say their initial negative reaction to the phone turned into a more positive experience after using the device for a few weeks.

The bad reviews for the Storm did make longtime BlackBerry user Evan Bartlett nervous initially, he says. Bartlett, who is a senior account executive for Angelsoft, a company that makes a deal flow management platform for venture capitalists and angel networks, says he was a T-Mobile subscriber using the BlackBerry Curve before switching to the Storm on Verizon.

Now there's no looking back for him."The true push e-mail, the ability to search through your e-mail, copy and paste were all features that I use very heavily," says Bartlett, "which is also the reason why the iPhone doesn't work for me."

The Storm's web browser has also attracted fans. "The two things I do most are e-mail and browsing," says VanRysdam. "And the browsing experience on the Storm is unlike any other BlackBerry device and as good as the iPhone."

Ultimately the Storm's success can be attributed to the power of Verizon and BlackBerry's marketing efforts.

"The Storm has been the subject of a tremendous ad campaign by Verizon," says Avi Greengart, an analyst with research firm Current Analysis. "So if you are a user at Verizon it is one of the most exciting devices to have."

Could the BlackBerry brand also been enough to draw in users? "Absolutely," says Greengart.

Meanwhile, even die-hard Storm users agree that the device is still fairly buggy. The shutter delay on the camera can be frustrating as is the lack of Wi-Fi and the third party applications for the phone.

They are, however, willing to be patient for more updates from RIM to fix those problems. Their Storm, they say, is worth the wait.

Related Links
BlackBerry's Storm and the Coolness Factor
Verizon's Anti-iPhone Campaign
Big, Bold Moves



Source: Portfolio.com: Top 5 | 29 Jan 2009 | 5:00 am

4 Steps That Can Help You Survive a Layoff (Deal of the Day)

"Going out of business" signs and long lines at the unemployment office used to seem like archival images from the Depression era. Not anymore.

This week alone, several major companies, including Home Depot (HD), Sprint Nextel (S), Texas Instruments (TXN), Pfizer (PFE) and heavy-equipment maker Caterpillar (CAT), announced layoffs that will result in the elimination of more than 70,000 jobs. Tack that onto the 3.6 million jobs lost between December 2007 (when the recession began) and this past December, according to the latest unemployment report from the Bureau of Labor Statistics. Those losses had already pushed December's unemployment rate to a 16-year high of 7.2%. (The BLS will report January's employment rate on Feb. 6).

“Things have gotten much more severe in the past few months,” says Beth Ann Bovino, senior economist at Standard & Poor's. “We’re expecting unemployment to peak at 9% in early 2010.”

Few sectors are immune to the economy's woes and even those that are still hiring like health care, the government and higher education may soon stop given their increasingly strained budgets, says Perry Wong, senior managing economist at Milken Institute.

Even President Obama's $819 billion economic stimulus package, which aims to create jobs through the funding of infrastructure, mass transit and energy projects, could take six to nine months to significantly slow down unemployment, says Tony Cherin, professor of finance at San Diego State University.

For those who have lost their job -- or are fearful they're about to -- here are some ways to help you cope financially and get back on your feet.

Negotiate your severance package

While not required to do so by law, many employers offer severance packages to laid-off employees. Pay is usually based on the employee's length of service -- while some are entitled to two weeks' worth of pay, other, more seasoned employees receive as much as a year's worth.

If you've only been working at your company for a year or two there are ways to wring a little more pay from your employer. First, ask that any unused vacation days get tacked onto your final paycheck (you can also try to do this with sick days, but it's often a longshot). If you have a stellar track record with the company, it's also worth asking for more severance pay or an extension of your health coverage.

See our tips on negotiating a severance package.

File for unemployment benefits right away

Individuals who don’t receive severance when they lose their job should file for unemployment right away since it usually takes a few weeks for the check to arrive, says Maurice Emsellem, policy co-director at the National Employment Law Project. The rules vary by state, but those who are receiving severance, may still be entitled to unemployment benefits, says Emsellem. In some cases, former employees who receive severance may have to wait until their payments cease before they can receive unemployment benefits.

The amount you receive in unemployment benefits is based on your old salary. Most states have a minimum and a maximum amount that they dole out depending on your salary, but the average weekly check is $300, says Emsellem. You'll receive checks for up to 46 weeks and in states where unemployment averages 6% or more for three months, benefits will last for up to an additional 13 weeks.

To find out what you're entitled to, check your state's unemployment program at CareerOneStop, a site sponsored by the Labor Department.

Seek the most affordable health coverage

Losing your job usually means losing your health coverage. If you can't sign onto a spouse's employer-sponsored health plan, consider either extending your previous coverage through COBRA or buying an individual policy.

Under COBRA, workers keep the coverage they had through their employers without worrying about getting turned down due to illness or a pre-existing condition. It's a pricey option, though: You'll pay the entire premium plus a 2% administrative fee, which for a family, could top $1,000 a month. If you're young, in good health and just want coverage for medical emergencies, consider private insurance, says Ted Toal, a certified financial planner at Triton Wealth Management. These health plans have lower premiums but carry higher deductibles.

For more, see our story on hanging onto your health coverage in tough times.

Tap into job-hunting help

Finding a new job is tough enough, but trying to find one when the job market is being decimated can feel impossible. State and local governments offer free job training and search assistance at so-called one-stop career centers. Services vary by center, but can include access to personal computers and job databases, interview preparation and training events. To find a one-stop career center, visit servicelocator.org.

Also see our story on more places to seek job-hunting help.

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 | 29 Jan 2009 | 5:00 am

Warren Buffett's Unhappy New Year

EVEN GREAT INVESTORS MAKE MISTAKES. Warren Buffett's affinity for a group of financial stocks, including American Express (AXP), Wells Fargo (WFC) and U.S. Bancorp (USB), is likely hurting his equity returns in 2009.

Buffett's Berkshire Hathaway has sizable holdings in that trio, and the sizable declines in their share prices this year are dragging down Berkshire's (BRK.A) vaunted equity portfolio, which totaled $76 billion at the end of the third quarter, the latest reporting period.

We estimate Berkshire's equity portfolio could have dropped 14% in 2009 through Thursday, against an 8% decline in the S&P 500.

Our estimate is based on the change in value of Berkshire's 16 largest equity holdings. These holdings historically have accounted for over 85% of Berkshire's portfolio. The tough 2009 follows a good showing in 2008, when Berkshire's equity positions declined -- by our estimate -- about 25%, 13 percentage points better than the S&P 500. Our calculations for 2009 are based on Berkshire's reported holdings on Sept. 30. There admittedly may have been some changes since.

Wells Fargo is Berkshire's biggest loser in 2009, as shares of the California bank were down nearly 50% through Thursday to about 16. Buffett couldn't be reached for comment, but his view on the financial sector has been to buy quality. At Berkshire's annual meeting last May, Buffett said: "We like the culture at Wells Fargo, M&T and U.S. Bancorp. In all three cases, I understand the DNA of management. That doesn't mean they won't have problems," according to a meeting attendee. (Berkshire owns a stake in Buffalo's M&T Bank [MTB].)

Our guess is that if any of these companies needs an equity investor, Berkshire stands ready to help. And the stocks are so volatile they could turn higher at any time.

The paper losses on Berkshire's equity portfolio this year, plus losses on its short position in some $37 billion of equity puts, have depressed Berkshire class A shares, which finished Friday at $86,250, down 10% in 2009. Barron's wrote bearishly on Berkshire in late 2007 when the stock traded at $144,000 and we turned bullish in late November with the shares just above current levels.

When it reported third-quarter results in November, Berkshire said shareholder equity fell by $9 billion, or nearly $6,000 a share, through the end of October given weak markets. We estimate book value probably ended 2008 around $70,000 a share. Current book value may have dropped close to $67,000 a share. If we're right, Berkshire trades for a still-reasonable 1.3 times book value and 14 times projected 2009 earnings of around $6,000 a share.

After a flurry of high-profile investments in early October, including $5 billion in Goldman Sachs preferred carrying a 10% dividend, and a similar $3 billion deal involving General Electric , Berkshire hasn't unveiled any big new investments. Why? Our guess is that its once-enormous cash hoard has been depleted.

Berkshire's insurance cash holdings, which stood at $27 billion on Sept. 30, likely fell to $13 billion after the Goldman (GS) and GE (GE) deals, as well as a $6.5 billion investment in junk bonds and preferred stock of Wrigley, which was bought by Mars. Berkshire also is on the hook for a $3 billion convertible preferred-stock investment in Dow Chemical (DOW) if it completes its purchase of Rohm & Haas (ROH). Some investors say Berkshire likes to keep $10 billion of cash to deal with unexpected insurance claims arising from an earthquake or hurricane. This wouldn't leave Berkshire much cash for a big investment unless it sells something or takes on debt.

Our guess is that if Berkshire did make more fourth-quarter investments, they were focused on the battered junk-bond market. Berkshire will disclose more on investments in its annual report, due around March 1.

The Bottom Line
Berkshire's class A shares are down 10% in 2009 to $86,250, a reasonable level that we estimate at 1.3 times book and 14 times projected 2009 earnings of $6,000 a share. That looks appealing.

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 | 29 Jan 2009 | 5:00 am

Are You an Unwitting Tax Cheat? (Consumer Action)

It's hard not to cringe at the thought of a run-in with the IRS. But as Treasury Secretary Timothy Geithner and the thousands of UBS customers who were allegedly sold into illegal tax shelters can attest, those run-ins -- whether prompted by an intentional cheat or an unintentional mistake on your taxes -- can occur all too easily.

“Our tax code is so complicated and convoluted that, in fact, it’s easy to make a mistake on your tax return, just because you don’t know what the law is,” says Jeff Schnepper, a tax attorney in Cherry Hill, N.J.

Of course, ignorance is no excuse. If the IRS finds a mistake on your return you’ll not only have to pay what you owe, but will be subject to interest and, possibly, penalties. And the responsibility for unpaid tax is yours, even if a professional prepared your return.

No matter who does your taxes, here are three questions to ask before you sign on the dotted line.

Did you report all your income?

Earned some extra cash from freelancing? Just because you didn’t get a 1099 form (businesses aren’t required to issue those if they paid you less than $600 in 2008) doesn’t mean you’re off the hook. Granted, the IRS won’t know about that income — that is, unless they audit the company or person who paid you, says Fred Daily, a tax attorney in St. Pete Beach, Fla. “I’ve had clients get caught up in an audit that way,” he says.

And don't forget any income you earned abroad. “As a general rule, U.S. citizens are required to pay taxes on all of their income, regardless of where it was earned,” says Mark Luscombe, principal analyst for the tax and accounting group at CCH, a tax and business law information provider. If you paid taxes to the country where the income was earned, you may be able to claim a foreign tax credit. For more information, read our story.

Did you take the right deductions?

Deductions get many taxpayers into trouble. “People tend to be too generous in their estimates of deductions,” says William Raabe, a tax professor at Ohio State University. Here are the trickiest ones.

* Meals and entertainment: If you took a client out to dinner and discussed business immediately before, after or during your meal, then generally, 50% of the bill is tax-deductible. But you must have a receipt for expenses of $75 or more, containing the name of the restaurant, location, the amount paid, the person you were with and the business discussion that occurred. For expenses under $75, you don’t need a receipt, but you must keep a diary with all of the above details.

* Business Travel: If you traveled within the U.S. for business, you may deduct 100% of the cost of getting and staying there (airfare, rental car or taxi, hotel). Personal expenses —say, a ticket to a museum — are not deductible. For international travel, you must generally allocate expenses based on the business and personal part of your trip, Luscombe explains. For details, read our story.

If you use your car for business travel, you may deduct the costs associated with it, or take the standard mileage deduction. But you have to keep a diary, including the origin, destination, miles driven and the business purpose of the trip.

* Home office: Just because you do a little work in your home doesn’t mean you can take a home office deduction. In fact, most people don’t qualify for this deduction because they need to use the space regularly and exclusively for business, explains Schnepper. If you use the home-office computer fro personal matters, the home-office deduction is disallowed.

* Charitable donations: It used to be that up to $250 in contributions could be claimed as a deduction without a receipt. However, starting in 2008, the IRS requires that filers provide receipts for all cash donations, even that $5 you gave to the Salvation Army bell ringer over the holidays.

Did you pay taxes for a household employee?

If you paid that person more than $1,600 in 2008, you’re supposed to pay the so-called Nanny Tax. Come tax time, the IRS should receive 15.3% of that person’s annual wages in the form of Social Security and Medicare taxes. (Whether you decide to withhold half of that from your employee’s salary or pay that yourself is your choice.) Use our worksheet to determine the tax due.

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 | 29 Jan 2009 | 5:00 am

What Caused the Meltdown?

First day at the World Economic Forum annual meeting in Davos. It's almost 5 a.m. (but only 8 p.m. in California—I got a company to run at home!) and I'm exhausted.

The world economic crisis is the key underlying topic in every conversation and speech, though interestingly the organizers (and in particular Forum founder Klaus Schwab) have really tried to steer the debate towards determining what businesses and governments are to do once the crisis has subsided: the theme this year is "Shaping the Post-Crisis World."

In his opening remarks, Klaus said something along the lines of "we don't want to hear the reasons for this collapse anymore; we want to define the steps out of it." He was immediately contradicted by Vladimir Putin, who gave one of the opening speeches.

The Russian prime minister offered his recap of what went wrong: one side of the world (the West) spent money it didn't earn on cheap stuff produced by the other side (the East), which saved up too much of the money it got for the cheap stuff.

A really interesting session today featured Matthew Bishop of the Economist, Matt Cohler of Benchmark Capital, and Nancy Lublin of DoSomething.org. Lublin's group is a not-for-profit that is trying to sell voting shares to investors as means of fund-raising, while pushing themselves to be more transparent (quarterly reports, investor calls, etc).

The concept initially sounds fantastic to a free-marketer like me, though there are some real issues here. Although the shares do bestow a right to vote on key issues for the nongovernmental organization, the shares are not transferable, and therefore won't have liquidity or a floating price.

The next step has to be finding a way to create a secondary market for these shares and letting people vote with their dollars—without harmful effects on the mission of the organization. (We don't want charitable organizations optimizing their quarterly results just to keep the share price up!)

My off-the-cuff proposal (which, I think, requires some modifications to U.S. tax law) was to associate an annual tax break—smaller than the total share price—with each share, and make them transferable at a floated price.

I believe there is some legal precedent for this sort of thing with selling tax credits from NGOs. Really, I have barely an idea of what I am talking about here, but I learned a good bit, and have been inspired to think about something meaningful and interesting that has little to do with my current business undertaking.

I think that's what the Forum is supposed to be all about.

The security in this place is hardcore. Groups of police who seem to speak different languages are stationed every few hundred yards. Every hotel where conference attendees are staying has metal detectors and X-ray machines. Entry to any part of the Forum meeting requires you to produce registration badge and scan it.

Speaking of that, this morning we had to make our way to the registration, to procure the badges. It's a bit off the main road, and so we had to walk through a frosty little street guarded on each side by a small Italian-speaking contingent.

We were quizzed at the entrance gate (everything has gates) by a guard who eventually allowed us to go through to the registration, but just as we approached the exit gate, the guards suddenly started sealing the street off, working feverishly on pulling the gate in, fitting it into concrete anchors on the ground, and finally hanging a giant padlock on it.

Startled, we stood around waiting for the guards to tell us something, but as soon as they were done on each side of the street, they raced into a gated parking area, and performed the same procedure there—sealing themselves in!

We found ourselves in a small, completely frozen and empty street, staring at each other and laughing nervously, while the guards broke out some serious-looking riot gear and put it on feverishly.

Finally, one of them noticed our confused stares and yelled "Not a problem! Just a little practice! Five minutes!" About 10 minutes later, the guards calmly unsealed themselves and let us out of our little lockup.

We are definitely quite safe here.Related Links
The Changing World, in Microcosm
Air Heads
Dissecting the Crisis in Davos



Source: Portfolio.com: Top 5 | 29 Jan 2009 | 4:30 am

Several banks cut rates after OCR move

Banks have begun to drop home loan rates after the Reserve Bank this morning cut the official cash rate by 150 basis points to 3.5 per cent. The ANZ-National Bank Group, Westpac and Kiwibank have now cut their mortgage rates. Kiwibank's...
Source: New Zealand Herald - Business | 29 Jan 2009 | 1:00 am

Trends & Innovations - Wednesday

Execs less optimistic about future
Source: Investor's Business Daily: BUSINESS | 29 Jan 2009 | 12:46 am

Its Technology Makes Backing Up Lots of Computer Data Efficient

By the late 1990s, many Americans' music collections had migrated from tapes to CDs. But even high-tech computer centers were still backing up...
Source: Investor's Business Daily: BUSINESS | 29 Jan 2009 | 12:46 am

In Brief - Wednesday

McCormick (MKC), a spices and seasonings company, said it expects '09 EPS of $2.24-$2.28, in line with views. It also sees yearly sales below...
Source: Investor's Business Daily: BUSINESS | 29 Jan 2009 | 12:46 am

After The Close - Wednesday

OPEN TEXT (OTEX), a maker of management software, said its Q2 EPS rose 28% to 64 cents, beating views by 7 cents. Revenue rose 14% to $207.7 mil,...
Source: Investor's Business Daily: BUSINESS | 29 Jan 2009 | 12:46 am

Business Briefs - Wednesday

Sybase profit, sales top forecasts. The database and software maker's Q4 EPS surged 28% to 78 cents a share, beating views by 17 cents. Sybase's...
Source: Investor's Business Daily: BUSINESS | 29 Jan 2009 | 12:46 am

Brian Fallow: Bollard's bold steps

Today's cut means governor Alan Bollard has slashed the official cash rate by an emphatic 4 percentage points in just three months. Such bold steps leave you wondering whether to be relieved that they have been taken or alarmed...
Source: New Zealand Herald - Business | 29 Jan 2009 | 12:30 am

Starbucks to cut 6,700 jobs amid falling sales

Starbucks is to close more stores, sell a newly delivered $45m corporate jet and cut headquarters staff and worker benefits as it battles a slump in sales that has tracked the broader collapse in global discretionary spending
Source: Financial Times - US homepage | 29 Jan 2009 | 12:14 am

BofA bonus deferral anger

Bank of Americais planning to defer bonus payments to some investment banking staff this year – a move certain to inflame tensions between its employees and officials of newly acquired Merrill Lynch, executives familiar with the matter say
Source: Financial Times - US homepage | 29 Jan 2009 | 12:07 am

Interest rate cut reaction

Early reaction to this morning's 1.5pc cut in the Official Cash Rate by the Reserve Bank: ASB economist Nick Tuffley: "The outsized moved can't be labelled as that surprising, given the run of bad news over January. Trading...
Source: New Zealand Herald - Business | 29 Jan 2009 | 12:00 am

Democrats force through stimulus bill

The House of Representatives approved its version of the proposed US fiscal stimulus with overwhelming Democratic support but, in an early setback for Barack Obama, not a single Republican backed the $825bn plan
Source: Financial Times - US homepage | 28 Jan 2009 | 11:58 pm

NZ stocks: Market up more than 1 per cent

The New Zealand share market had its best opening session of the week this morning, gaining more than 1 per cent. The benchmark NZX-50 index rose 30.995 points, or 1.128 per cent, to 2778.896 in the first quarter of an hour, after...
Source: New Zealand Herald - Business | 28 Jan 2009 | 11:31 pm

Microsoft billionaire takes a bath on cable investment

NEW YORK - How do you lose $7 billion? That's a question for Microsoft co-founder Paul Allen, who has seen his massive investment in cable TV operator Charter Communications all but vanish. Charter was Allen's biggest...
Source: New Zealand Herald - Business | 28 Jan 2009 | 11:30 pm

Pa. joins mortgage-aid settlement with Countrywide (AP)

AP - Pennsylvania has joined a settlement with Countrywide Financial Corp. that makes available as much as $155 million to help keep thousands of state residents in their homes.
Source: Yahoo! News: Business | 28 Jan 2009 | 10:48 pm

How the major market indexes fared (AP)

AP - Financial stocks led Wall Street sharply higher Wednesday on investor hopes the Obama administration will create banks to absorb the bad assets weighing down the financial system. The Standard & Poor's 500 index, a benchmark for the overall stock market, completed its first four-day rally since late November.

Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 10:45 pm

Write-Offs: 01.28.09

$$$ Ex-Marine Launches Long/Short Hedge Fund [FINalternatives]

$$$ Wells Fargo Says Madoff Scheme Cost Bank $294 Million [Bloomberg]

$$$ Job of the Day: A "top tier HF in Greenwich, CT" is looking for a consumer analyst with 3-5 years experience. That could be you! Compensation, if the employer is who we think it is, includes deep-fried leaf cookies. [DB Career Center]

Source: Dealbreaker | 28 Jan 2009 | 10:36 pm

SEC charges adviser with fraud linked to bailout (AP)

AP - Federal regulators on Wednesday charged an investment adviser with securities fraud, saying he bilked clients of at least $6.5 million in the first scheme using the government's $700 billion financial bailout program as a front to lure investments.
Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 10:34 pm

SEC charges adviser with fraud linked to bailout (AP)

AP - Federal regulators on Wednesday charged an investment adviser with securities fraud, saying he bilked clients of at least $6.5 million in the first scheme using the government's $700 billion financial bailout program as a front to lure investments.
Source: Yahoo! News: Business | 28 Jan 2009 | 10:34 pm

VIX Index Retreats 6% to Close at 39.66

Source: Bloomberg - All Podcasts | 28 Jan 2009 | 10:34 pm

Small businesses can run into tax prep pitfalls (AP)

AP - Income tax filing season can be a trying time for small business owners, and in a recession, even more so.
Source: Yahoo! News: Business | 28 Jan 2009 | 10:30 pm

Roubini Says Top Four U.S. Banks Are Insolvent

Source: Bloomberg - All Podcasts | 28 Jan 2009 | 10:11 pm

SEC charges financial planner with TARP fraud (Reuters)

Reuters - The U.S. Securities and Exchange Commission charged a financial planner on Wednesday with fraud related to the U.S. government's Troubled Asset Relief Program (TARP).
Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 10:10 pm

Ken Lewis Dodges Dethroning?

Possibly, if it can be inferred from the fact that he was still referred to as CEO/chairman on the most recent press release from Bank of Amerrillwide, post-board meeting. See you at Phil's (or Sonoma), drinks on Moz.

Source: Dealbreaker | 28 Jan 2009 | 10:09 pm

Sleep Where A Noel Hath Slept

First, it was the house on Mustique. Now, it's being whispered that one of Fairfield Greenwich founder Walter Noel's daughters and son-in-law (a FFG partner, natch) are mulling over vacating their place at 12 East 78th Street. It's really too much to bear, unless of course you're in the market for a $13.5 million townhouse with a "pale gleaming Indiana limestone facade" in which case, get in touch.

Source: Dealbreaker | 28 Jan 2009 | 9:33 pm

Fed keeps interest rates on hold

The Federal Reserve left interest rates unchanged as it forged ahead in its efforts to revitalise securitised markets for credit
Source: Financial Times - US homepage | 28 Jan 2009 | 9:23 pm

Hear: Bad As They Want To Be

Today on Planet Money:

-- David Specht of Shelburne Falls, Mass., delivers today's Planet Money indicator. It has to do with sawdust and why his family started rationing it.

-- U.S. officials are considering a new plan for saving troubled banks: create one big "bad bank." The idea, explains economist Larry Ausubel, is to launch a single institution charged with mopping up the toxic assets and selling them off. Ausubel has been testing a way of pricing the stuff no one seems to want. Bonus: Simon Johnson's "Bad Banks for Beginners."

-- From his plans for a $10 million bonus to his $1.2 million office renovation, ex-Merrill Lynch CEO John Thain has become a leading villain of the financial crisis. Adam Davidson and Portfolio blogger Felix Salmon. Bonus: David Folkenflik asks "What's John Thain saying?"

Download the podcast; or subscribe. Intro music: Regina Spektor's "Better." Find us: Twitter/ Facebook/ Flickr.

Richard Patnoe, who owns a woodworking shop in Virginia, sends the photo for today's podcast. He writes:

I restore antiques and fine furniture for a living (a second career). My net income for 2008 is down 77% from 2007. This is not a job one does for love of money because it pays poorly to begin with but I earned less than $5000 in all of 2008.

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

Source: NPR Blogs: Planet Money | 28 Jan 2009 | 9:00 pm

Oopsies!

From the mailbag:

WFC 8K says misstated book value in press release this morning:

On January 28, 2009, the Company issued a press release regarding its results of operations and financial condition for the quarter and year ended December 31, 2008. The press release incorrectly reported book value per common share of $23.43 for the quarter and year ended December 31, 2008. The correct book value per common share for the quarter and year ended December 31, 2008 is $16.14.

Source: Dealbreaker | 28 Jan 2009 | 8:51 pm

Economic pain to be 'worst for 60 years'

The world economy in 2009 will suffer its worst performance since the second world war with a risk that 50m people will lose their jobs, international organisations have warned
Source: Financial Times - US homepage | 28 Jan 2009 | 8:48 pm

What's John Thain Saying?

Since we're podcasting today about ex-Merrill Lynch CEO John Thain, NPR's David Folkenflik sends this sneak peek at his regular column:

As we segue from the golden age of Bashing the Media to the golden age of Eulogizing the Media, I'd like to pause for a moment to admire an example of a journalist doing her job. As I lack expertise in certain elements of high finance, I'll be appealing at the end of this to professionals to weigh in -- but the professionals I'm talking about may be different than the ones you'd expect.

On Monday, a humbled Wall Street titan entered the court of public opinion to try to salvage his reputation.

John Thain, late the CEO of Merrill Lynch, submitted to an interview with CNBC's Maria Bartiromo earlier this week to give context to why he was thrown out on his ear by his new boss, Bank of America CEO Kenneth Lewis. BofA bought Merrill Lynch amid the markets meltdown last September, but the purchase looks more problematic by the day, and has helped trigger the need for yet more government help. Some of Thain's expenses look more problematic as well.

Consider what Bartiromo does in this interview.

She strips him bare.

Bartiromo has been accused at times of being too cozy with the financial giants she interviews -- a charge that has also been leveled more generally at CNBC and at TV financial news shows. A column in The New York Post, a corporate sibling of the rival Fox Business Network, insinuates that Bartiromo only got the interview because she shares a publicity agent with Thain. If so, Thain was mistaken if he thought this appearance would buff his image.

He speaks calmly, and presents as a capable and reasonable executive. But it's worth watching the interview carefully. I find a few of the following excerpts awfully revealing. Such as this exchange (emphases mine throughout), which starts about four minutes in:

BARTIROMO: . . . .But there are real questions-- about whether or not you allowed more risk to be taken on and if you came clean about that to Ken Lewis. How much of the loss of that $15 billion loss in the fourth quarter do you attribute to those legacy losses that were already there, tough decisions that you could not get rid of, and how much of it was new position? . . .

THAIN: Maria, virtually all of the losses were from legacy positions that had already been there and the decline in the prices of those-- positions. Did we-- did we continue to trade? Yes. Did we put on-- big risky positions that-- were significant contributors to that $15 bill-- billion loss? No.

BARTIROMO: So there is no truth to any speculation that there was further risk taken on and you weren't upfront about it to Ken Lewis and that irritated him?

THAIN: Well, I-- I can't comment specifically on what irritated him. But-- the vast majority of the losses in the fourth quarter were from positions that had been there since I started.

BARTIROMO: John, were-- so you were aware of these losses then in September when you did the deal with Bank of America?

THAIN: Well, no, Maria, the-- the-- in September the-- the positions were there. And-- the results-- we-- we obviously don't report-- we don't report results other than quarterly. But the market-- the market deteriorated in both November and December.

I don't know what Thain is saying there. I'm not fully sure what Thain thinks he's saying there. Bartiromo is asking what Thain knew about Merrill Lynch's financial problems. He took over in late 2007. She asks: How bad were the company's conditions when you sold Merrill Lynch to keep it afloat? And, as far as I can tell, he is saying: a) Most of the bad stuff was from before I arrived; B) Even so we couldn't really know because we only report results quarterly; and C) Besides, things got worse later in the year.

This, friends, is a hash.

Bartiromo then pressed him on spiraling losses at Merrill Lynch -- $15 billion in the fourth quarter alone -- and on the astounding $4 billion in bonuses distributed to Merrill Lynch's top figures. He made his best case: the bonuses were distributed to those people in the divisions that made money, not those who lost money, and he had to pay what he called market rates to keep them there. (One does wonder where else he feared they might go these days.) Thain acknowledges the market for talent is now in a different place. Later on, at about 14 minutes 50 seconds in, Bartiromo asked about spending corporate funds on his own executive digs:

BARTIROMO: John, I wanna ask you more about the-- the-- environment that we're in. But I've gotta ask you-- first about the office. You spent more than $1 million renovating your office; is this true?

THAIN: Well, first of all, it-- it is true. This was a year ago or actually a little bit more than a year ago in a very differ-- different-- ec-- economic environment and a very different outlook for Merrill and the financial services industry. It was my office. It was two conference rooms and it was a reception area. But it is clear to me in today's world that it was a mistake. I apologize for spending that money on those-- on those things. And I will make it right. I will reimburse-- the company for all of those costs.

BARTIROMO: Why did you need to renovate the office? What was wrong with (former Merrill Lynch CEO) Stan O'Neal's office?

THAIN: Well-- his office was very different-- than-- the-- the general decor of-- Merrill's offices. It really would have been-- very difficult-- for-- me to use it in the form that it was in. And-- you know, I-- it needed to be renovated no matter what. It would have been better for me to simply-- I should have-- simply paid for it myself (UNINTEL).

Yes, just as the CNBC transcript says, it was UNINTEL. What was wrong with Stan O'Neal's office?

Bartiromo is asking the question we would have asked, if we had been there, and if we had thought of it. O'Neal was a captain of finance too.

The more than $1 million in spending may seem small-bore in the overall scheme of things, but combined with the huge bonuses, it appears to have hastened Thain's fall.

And then there's Thain's answer: It wasn't just a single room. The decor didn't fit in with Merrill's overall things. I needed to do it no matter what. But I should have paid for it myself.

This response careens from position to position until it reaches incomprehensibility. If it was justifiable for corporate use, the company should have paid for it. If it's for personal use, why is it being done at the office at all?

Bartiromo goes in for the kill:

BARTIROMO: So it is an environment where jobs are being cut and clearly salaries are being cut. And the firm is reporting all of these losses. At-- at-- did it occur to you at some point over the process to say this is probably not the best judgment, I better put this off? Or, I mean, clearly not, but when did you start feeling like perhaps it would have been a-- a sore thumb? Or were you totally blindsided by it?

THAIN: Well, Maria, remember, this was back in-- it really started in December of '07. So the financial industry hadn't melted down yet. I-- I had every expectation-- that-- Merrill Lynch would be a large successful company-- that-- these office renovations-- would be used by me for many years in the future. And we were also doing lots of other things-- to-- to bring down costs. . . .

So the answer: We were still minting money when I came on board. I figured I'd be around for a long time. And it would come out of other people's salaries and expenditures.

As I said, she stripped him bare.

This wasn't great investigative journalism. (Nor, for that matter, was the disclosure by CNBC's Charlie Gasparino that Thain's driver was making $230,000 a year in pay and bonuses, though it was a damning little nugget.) But it was a nice example of a television journalist simply doing her job.

And now, my promised call for your expertise: Are there any scholars of linguistics or rhetoric out there who can parse the videotape or the transcripts and tell me what Thain is really saying or at least what he is trying to accomplish? Anyone else have strong thoughts? Feel free to post your takes below.

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Source: NPR Blogs: Planet Money | 28 Jan 2009 | 8:45 pm

Yale's Levin Says Economic Stimulus May Not Be Enough

Source: Bloomberg - All Podcasts | 28 Jan 2009 | 8:32 pm

Foerster Says Wells Fargo Tried to `Steal' Wachovia

Source: Bloomberg - All Podcasts | 28 Jan 2009 | 8:29 pm

Taleb Says Banking Is Organized to `Milk' Investors

Source: Bloomberg - All Podcasts | 28 Jan 2009 | 7:58 pm

Stephen Roach Says Mood at Davos Is `Very Pessimistic'

Source: Bloomberg - All Podcasts | 28 Jan 2009 | 7:50 pm

Phelps Says Unemployment Has `Exploded Like a Virus'

Source: Bloomberg - All Podcasts | 28 Jan 2009 | 7:47 pm

Levitt Says Davos Exhibits `Extravagence' of Power, Excess

Source: Bloomberg - All Podcasts | 28 Jan 2009 | 7:40 pm

Want To Join My Fantasy Accounting League?

Robert Rubin, who quit his post as senior counselor at Citigroup Inc. this month, said an accounting rule forcing companies to mark down assets every quarter to reflect market value has "done a great deal of damage."

"I spent my whole life at Goldman Sachs believing in mark- to-market accounting, and having said that, if you look at the experience from the last two years, I think mark-to-market accounting has led to terrible vicious cycles in asset prices," Rubin, the former U.S. Treasury secretary, said during a discussion at the 92nd St. YMCA late yesterday.

Yes, because it was the accounting treatment, not the toxic assets and years of building leverage, that required drastic markdowns. Who was responsible for draining the liquidity from the market? Poseidon?

Robert Rubin Says 'Mark-to-Market' Accounting has Done 'Damage' [Bloomberg]

Source: Dealbreaker | 28 Jan 2009 | 7:35 pm

The Changing World, in Microcosm

At this edition of World Economic Forum Annual Meeting, delegates are looking—now more than ever—for some certainties on the financial crisis, on its future trends, and on its impact on society.

One thing that has really impressed me so far is the selection of opening speakers—representatives of two countries that were considered as emerging countries only a little while ago: Vladimir Putin, prime minister of the Russian Federation, and Wen Jiabao, premier of the People's Republic of China. This represents a perfect portrait of the fast evolution of the world we are living in nowadays.

Obviously all of us keep looking to the U.S.: it's where the crisis started and where the world expects that the solution should come from. Furthermore, there are big expectations on the recent election of Obama and his resolutions for the future.

I consider myself as an optimist, even though the world is undeniably experiencing a profound crisis. In my opinion there is only one way to get out of it: investing in innovation and offering products that represent a concrete answer to customers' needs and products that are unique.

The annual meeting here in Davos represents a unique opportunity for global dialogue between an excellent mix of top leaders: I expect it will give to all participants reliable suggestions for the trends of the next months. This would also help me as an entrepreneur in all the business decisions I'm about to make.

Crisis or no, one thing remains the same at Davos: how difficult it is to arrange meetings. All World Economic Forum participants are used to traveling all over the world, all of the time: but when we're all within the Congress Center in this small town it often becomes impossible to agree on a time and location to meet.Related Links
Obama Snubs Davos
What Caused the Meltdown?
Air Heads



Source: Portfolio.com: Top 5 | 28 Jan 2009 | 7:30 pm

Bank Of America's No. 2 Likens Firm To Days On The Farm

Attention, Bank of Amerrillwide shareholders and employees: I know you're probably all pretty prettay prettay down in the dumps right now but redirect your anger my friends, because Ken Lewis et al. are in no way to blame. In fact, no one really is. When you think about it, Bank of Amerillwide is a lot like a farm. You can work your damn hardest, and then some bad luck, or weather, could come along and wipe our all your great effort. I guess in this scenario, Countrywide would be, hmm, what, a stray horse that came along and shat in the mouth our crops and Merrill as...as what? Hmm? How about "the radioactive fallout of plutonium assets, drifting gently down to impregnate the soil with its poison"? Would that work?

For those of you wondering WTF I'm talking about, after the jump, an email sent from Chief Administrative Officer, Lewis right-hand man, and recently-subpoenaed Steele Alphin to a shareholder this morning, in response to said shareholder's expression of disappointment in BAC, of late.

Source: Dealbreaker | 28 Jan 2009 | 6:45 pm

Ecuador's Dangerous Game

Ecuador is one of the foremost serial defaulters in the world. When it defaulted on bank loans in the 1980s, the debts were restructured into Brady bonds. When it defaulted on its Brady bonds in 1999, they were restructured into new global bonds, maturing in 2012 and 2030.

Now it's defaulted on those global bonds—although not on its third global bond, maturing in 2015, which was issued when the current president, Rafael Correa, was finance minister.

Ecuador has hired Lazard Freres as an adviser, and is rumored to be planning a tender offer where it will attempt to buy back its defaulted debt at around 30 cents on the dollar.

Abby McKenna, a fund manager at Morgan Stanley Investment Management, is a co-founder of the Emerging Market Creditors Association, which was set up in the wake of the last Ecuadorean default.

Here, she and her colleague Federico Kaune explain why they think any unilateral tender offer is doomed to failure, and why Ecuador should start talking to its creditors instead.

—The Editors

President Correa’s efforts to restructure Ecuador’s sovereign external bond obligations have rightfully caused concern among the country's international creditors. Their disquiet stems from two facts: first, that significant debt forgiveness has been granted on numerous previous occasions; and second, that Ecuador is solvent with sufficient liquidity to honor its international commitments.

Creditors correctly believe that Ecuador’s decision to default reflects its lack of willingness to service its debts, not its ability to do so. Unfortunately, for other Latin American borrowers, Ecuador’s ill-conceived actions reinforce negative stereotypes about Latin America and its attitude towards debt. These actions will taint other borrowers and cause investors to reassess levels of risk within the region.

Equally concerning is President Correa’s disregard for the rule of law and his claim to lack any understanding of international capital markets. The President would have us believe that Ecuador lacked the intellectual capital, over a number of decades, to understand the fundamental underpinning of a contractual agreement.

The government argues that weak institutions and rampant corruption led Ecuador to acquire excessive levels of public debt, making such debt illegal and illegitimate. The government relies on its own “expert” debt commission report, which attempts to shift the blame for Ecuador’s debt problems abroad to the U.S. Federal Reserve for interest rate hikes in the early 1980s, to its creditors for capitalizing unpaid interest, and to its lawyers for allowing Ecuador to submit to New York legal jurisdiction.

The president has also argued that because the bond contracts were drafted in English, they were too difficult for Ecuadorians to understand, and therefore illegal and illegitimate.

The law is clear that debt cannot be deemed illegitimate simply because the borrower claims not to have benefited from it. Bond investors did not bribe, trick, or force Ecuador to borrow funds in international capital markets.

New York law is also clear that issuers can neither manipulate market prices nor buy back debt at distressed prices with the intent of using the bonds to affect a coercive debt exchange. This is something Ecuador’s creditors will surely examine more closely over the next few weeks and months.

A bond is a legal contract in which a borrower is obliged to repay principal and interest to the lenders (bondholders) at a later date. The most important part of the contract is the borrower’s commitment to repay the lender.

 Also important, however, is a series of legal covenants included in bond indentures, which give lenders comfort that they are protected from a wide range of potential abuses. The thousands of individual investors that own Ecuador’s sovereign bonds in their savings and retirement accounts relied on the borrower’s representations that the debt was authorized by the Ecuadoran authorities—an assurance that is clearly stated in all three of Ecuador’s bond prospectuses.

Ecuador also represented that their external bonds were the unconditional general obligations of Ecuador. The country has pledged its full faith and credit toward the payment and performance of its external bonded debt. These bonds rank pari passu among themselves—that is, each has the same rights to repayment as all the others—and at least pari passu in priority of payment with all other present and future unsecured and unsubordinated external debt of Ecuador.

Ecuador has repudiated its external obligations three times in the past three decades. In each of the last two debt workouts, Ecuador received substantial debt relief.

With the 1995 Brady Plan debt workout, Ecuador benefited from a 55 percent reduction in the face value of its defaulted bank loans. The government of President Correa claims that the Brady plan—which provided substantial debt relief to 18 emerging countries on four continents—is illegal and illegitimate. We suspect that most of Ecuador’s neighbors would disagree.

In 1999, Ecuador’s economy collapsed under the strains of poor financial policies and low oil prices, driving its external public debt and debt service to about 80 percent and 7 percent of GDP, respectively. The government argues that the 1999 default could and should have been avoided, and thus concludes that 2000 debt workout—which resulted in a 30 percent reduction in the face value of its defaulted Brady and global bonds—is illegal and illegitimate.

Now Ecuador has decided to declare a unilateral moratorium on its bonds maturing in 2012 and 2030. The government offers spurious arguments for the legitimacy of the bonds maturing 2015, engineered under the tenure of then Minister of Finance Correa to lower Ecuador’s debt servicing costs. However, creditors and judges in other jurisdictions are likely to disagree with its view.

Ecuador’s decision to default on its external obligations rests on purely ideological grounds, as its capacity to service debt is as strong as it has ever been during the last three decades. Ecuador’s external public debt is a manageable 21 percent of GDP—of which 8 percent of GDP is from bonded debt.

Selectively choosing to default on a small portion of its external debt obligations is neither fair nor likely to resolve any perceived debt problems. Currently, external debt service is a very manageable 3.5 percent of GDP—of which 0.8 percent of GDP is from bonded debt. Furthermore, Ecuador’s international reserves amount to a sizable 10 percent of GDP.

Borrowers seeking to break their contracts must make a good faith effort to build a consensus among creditors rather than acting unilaterally. Lack of consultation with external creditors could create a very disorderly, protracted process with suboptimal outcomes for both Ecuador and its bondholders.

Proposing a draconian debt exchange, not grounded in economic reality, to a select group of creditors will not lead to meaningful discourse. Quite the opposite, it will merely antagonize bondholders and waste precious resources on legal and advisory fees while endangering Ecuadorian assets abroad.

Could Ecuador and its advisor really believe that bondholders of the 2012 and 2030 issues will agree to a haircut while other bondholders remain untouched? Will official sector lenders participate in this charade? Will other borrowers in the region remain silent as Ecuador further tarnishes the reputation of the emerging market debt asset class? Only time will tell.Related Links
Fragmented Bondholders
Debt Datapoint of the Day, EMBI+ Edition
Ecuador Approches Default



Source: Portfolio.com: Top 5 | 28 Jan 2009 | 6:30 pm

Miami's homeless inhabit vacant homes

As many bank-owned homes in Miami stand vacant, activists are encouraging homeless people to move in as squatters. And no one's complaining. Dan Grech reports.
Source: Marketplace | 28 Jan 2009 | 6:29 pm

'Buy American' clause creates conflict

A "Buy American" clause in President Obama's economic stimulus proposal would require infrastructure projects to use U.S. raw materials, like steel. The clause has created a gap between free-market supporters and manufacturers looking to protect domestic industry. John Dimsdale reports.
Source: Marketplace | 28 Jan 2009 | 6:29 pm

D.C. newsletters rise as newspapers fall

The nation's newspapers are struggling. Many have closed their Washington bureaus to cut costs. But D.C. journalism is alive and well -- in the form of newsletters. Tamara Keith reports.
Source: Marketplace | 28 Jan 2009 | 6:29 pm

Ban lobbying from bailed-out firms

The Obama administration is looking for ways to change the financial rules that got us into this mess. But many of Wall Street's financial giants continue to finance Washington lobbyists. Commentator Robert Reich says the influence of those lobbyists needs to be squelched.
Source: Marketplace | 28 Jan 2009 | 6:29 pm

'Bad bank' idea gaining steam

The idea of setting up a bad bank to soak up toxic assets is gaining traction. If it works, it could help usher in more lending from banks. But there's a lot standing in its way. Ashley Milne-Tyte reports.
Source: Marketplace | 28 Jan 2009 | 6:28 pm

EU pushes for global climate change

The European Union is proposing to pay poor countries to get them to sign a climate change pact that will reduce carbon dioxide emissions. Will the money be enough of an incentive? Sam Eaton reports.
Source: Marketplace | 28 Jan 2009 | 6:28 pm

One person's pork is another's steak

The House has approved President Obama's stimulus package. But the package is drawing complaints that it includes too many pork-barrel projects. But what's pork these days? Janet Babin reports.
Source: Marketplace | 28 Jan 2009 | 6:28 pm

Fed digs into toolbox for more solutions

The Federal Reserve says the economy has gotten worse since December. With interest rates already hovering around zero, what more can it do to get money moving again? Jeremy Hobson reports.
Source: Marketplace | 28 Jan 2009 | 6:28 pm

Activists Land in Davos

Plenty of CEO's decided to skip Davos this year but there's one group that couldn't stay away: protesters.

Some 150 pro-Tibet activists demonstrated against the scheduled speech of Chinese Premier Wen Jiabao at the World Economic Forum in Davos on Wednesday morning. The protesters arrived by train, where they demonstrated less than a mile from the railway station, according to Robert Dilenschneider, president of the public relations firm Dilenschneider Group, Inc., who is on the ground in Davos.

According to reports, they carried signs saying, "Change in Tibet - Wen?"


“Though the protest was relatively peaceful, protesters were throwing clods of ice at the police,” says Dilenschneider.

There were several reports that protesters had been situating themselves in Davos leading up to the forum because the security there is incredibly tight. The conference has historically attracted protesters to what some anti-capitalist groups consider an affront to the have-not nations of the world.

There are reportedly 5,000 Swiss police on duty, and various checkpoints hinder any uninvited guests from driving up the to the mountain ski resort where the annual forum is held.

The protesters arrived via train, most likely leaving from Zurich, transferring in a mountain town called Landquart and then arriving in Davos, close to a local McDonald’s, where past objectors have smashed windows of the ubiquitous fast food chain. In previous years, the Swiss police have dealt with demonstrators by using water cannons, armored vehicles, and electrified batons, according to Dilenschneider.

Each year at Davos, there are about 2,500 conference invitees, including nearly all of the world’s most powerful political and economic leaders, although this year has seen a slump in attendance due the global economic crisis.

The protests bleed into other parts of the country as well. Laurent Moutinot, Socialist President of the Council, told Reuters on January 26 that he felt he was not banning a protest "but taking measures against a gathering of rioters,” by declaring a ban against a January 31st protest planned in Geneva.

"The protests at meetings like Davos, or the WTO negotiations, arise out of frustration," says New York University Stern School of Business Economics professor Kim J. Ruhl. "I think some perspective is helpful: there will always be people making poor decisions and engaging in bad acts.  The actions of, say, Bernard Madoff, are not an indictment of the capitalist system any more than a senator taking bribes is a reason to scrap democracy."

While peaceful protesters certainly have rights, their actions won't likely change the system anytime soon. "The truth is, capitalism isn't perfect, but it is the best system we have right now," Ruhl says.  

Related Links
Dissecting the Crisis in Davos
Putin Shows Dell the Love in Davos
The "Anti-Davos" Sees an Opportunity



Source: Portfolio.com: Top 5 | 28 Jan 2009 | 6:00 pm

'Wait For A Better Day'

A car company rented Ali Alhalmi's restaurant during the last auto show.

While I was in Detroit this week, I had to stop at my favorite restaurant -- the Lafayette Coney Island. The Detroit landmark is a downtown greasy spoon famous for its Coney dogs -- smothered in chili, mustard and onions -- best accompanied by a can of Labatt's.

Full disclosure: I like the place so damn much my wife and I had our post-wedding photos taken here after our wedding in Detroit. But back to the economy . . .

During the recent auto show in Detroit, much was made of the cutbacks companies in attendance were making. Coincidence or not, Lafayette was asked by an automobile consulting company to shut down for five hours, and host a private party.

Manager Ali Alhalmi suspects the company was looking for a bargain in these rough economic times -- though he stresses his guests made no mention of that.

Suffice to say, Lafayette is not a place you'd expect to find dozens of suits, chowing down on hot dogs and chili fries. (But who am I to talk? I've been there in my wedding tux.)

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Source: NPR Blogs: Planet Money | 28 Jan 2009 | 5:59 pm

Ponzi Graphic May Signal Jumping Of The Ponzi Shark

In our effort to bring you all things Ponzi, we couldn't help but mention the article in the Journal that dedicates a great deal of formerly white space to the topic.

Federal and state authorities are reporting a growing number of financial scams that echo the alleged Madoff fraud, as strapped investors seek access to their cash amid increasingly hard times.

At least six suspected multimillion-dollar fraud cases have emerged this month alone, many of them alleged Ponzi schemes, in which investors are lured by promises of lofty returns but are actually paid off from new victims' funds.

The piece is worth the effort, particularly given the fantastic irony of the circle sized Ponzi losses graphic that, doubtless, came from JP Morgan. (The Journal might understand geometry a bit better, however).

In Echoes Of Madoff, Ponzi Cases Proliferate [The Wall Street Journal]

Source: Dealbreaker | 28 Jan 2009 | 5:54 pm

Soros Does Not Do Snowball Fights

It's Davos time, and you know what that means. Every talking head with an opinion will be spouting off their big idea^(tm) of the day, their mouths forced to move at a rapid pace, opening and closing spasmicly lest an overeager reporter shove a microphone past the point that triggers the gag reflex. Soros, of course, is no exception.

"That (the "bad bank" proposal) will help relieve the situation, but it will not be sufficient to turn it around," Soros said during a live interview at the Davos economic conference in Switzerland. Instead, Soros said he would create a "good bank" and re-capitalize the good assets.

If it's not Soros talking about the effects of "the Lehman thing," it is someone else talking about the effects of "the Lehman thing," so really, couldn't we just do without Soros for awhile?

Soros: 'Bad Bank' for Troubled Assets Is Bad Idea [CNBC]

Source: Dealbreaker | 28 Jan 2009 | 5:36 pm

Best Superbowl Commercials 1989-2009

What’s the best Superbowl commercial ever? Reebok’s 2003 Terry Tate commercial, of course. But that’s not the focus of this list. We’re here to give you the best Superbowl commercial of the year, for the past 20 years. Needless to say, some years were better than others. See the proudest moments in Superbowl commercial history, year-by-year:

2008: Budweiser “Hank the Clydesdale”

A dalmation trains the subpar Hank the Clydesdale into becoming a champion.

2007: Bud Light “First Bump”

Men bitchslapping one another plays on Bud Light’s girly-drink reputation.

2006: Michelob Ultra “Touch Football”

A man tackles a woman in a touch football game, making the world of light beer a little “darker.”

2005: Ameriquest “Cat Murder”

A man tries to impress his girlfriend by making her dinner, but fails miserably.

2004: Pepsi: Jimmy Hendrix Visits a Guitar Shop

A little kid chooses to drink Pepsi and grows up to be a guitar—rather than an accordion—rocker.

2003: Reebok “Terry Tate: Office Linebacker”

Reebok documents what happens when you sic Terry Tate on office peons.

2002: Budweiser “Whassup Wasabi”

Wasaaabi!

2001: E*Trade Monkey Wanders Desolate .com Graveyard

The E*Trade monkey, first introduced a year earlier, sadly observes .com fallout.

2000: Electronic Data Systems “Herding Cats”

Hardcore cat herders get glorified in this funny bit.

1999: Monster.com “When I Grow Up …”

Kids aspire to middle management with quotes like “When I grow up, I want to be underappreciated.”

1998: Tabasco “Mosquito”

A mosquito sucks Tabasco-laden blood, and meets a violent ending.

1997: Nissan Maxima Pigeons

Dive-bombing pigeons try to nail a Nissan Maxima, to no avail.

1996: Pepsi “Security Camera”

A Coke deliveryman tries to steal a Pepsi–and finds himself swimming in bottles of the drink.

1995: Budweiser “Frogs”

The first commercial in a series that became an instant classic.

1994: Pepsi Does Research on Cindy Crawford

A lack of Pepsi turns Cindy Crawford into Rodney Dangerfield.

1993: McDonald’s “The Showdown”

Michael Jordan competes with Larry Bird for a Big Mac.

1992: Nike Hare Jordan

A rough basketball posse yanks Bugs Bunny out of his hole, only to get themselves whupped on the court.

1991: Cindy Crawford Introduces the New Pepsi Can

Two kids gawk at Cindy Crawford as she walks out of a red Ferrari and gets a Pepsi.

1990: Coca Cola: Paula Abdul and Elton John Sing About Diet Coke

1990 wasn’t exactly a fabulous year for Superbowl commercials, so this catchy ditty will have to do.

1989: Bud Bowl II

Bud Light plays off against Budweiser in this hit commercial.

Source: Business Pundit | 28 Jan 2009 | 5:33 pm

Starbucks Decaf Less Available in Afternoon

Bloomberg reports on how Starbucks will only serve decaf coffee on request after 12:00 noon, as part of a cost-cutting measure:

Starbucks Corp., the world’s largest coffee chain, will stop continuously brewing decaffeinated coffee after noon as part of a drive to waste less and save $400 million by September.

The company, which last year started brewing fresh pots of coffee every 30 minutes, will have the caffeine-free version available upon request after 12 p.m., the Seattle-based company said today in an e-mailed statement. It takes about four minutes for a fresh cup to brew, spokeswoman Bridget Baker said.

“For many of our stores, the demand for decaf is greatly reduced in the afternoon,” the company said in the statement. “With our current standard of continually brewing decaf after 12 p.m. regardless of demand, we have seen a high amount of waste.”

Who’d have thought that decaf drinkers need their limp coffee “kick” in the morning? Must be a flavor–rather than a waking up–thing.

Source: Business Pundit | 28 Jan 2009 | 5:30 pm

Wyss Sees Another Year of Declining U.S. Housing Prices

Source: Bloomberg - All Podcasts | 28 Jan 2009 | 5:14 pm

Shugg Sees 2% U.S. GDP Decline, Improvement in 2010

Source: Bloomberg - All Podcasts | 28 Jan 2009 | 5:11 pm

Dating a Banker Anonymous Provides Forum for Empty-Handed Gold Diggers

Bankers’ girlfriends have it hard these days. In mourning the loss of their formerly mindless affluence, the afflicted have set up Dating a Banker Anonymous, a support group that meets for lunch and cocktails to share, pine, and vent. They’ve also set up a blog. The UK’s Mail Online reports:

The blog invites women to join ‘if your monthly Bergdorf’s allowance has been halved and bottle service has all but disappeared from your life’. It describes itself as ‘A safe place where women can come together, free from the scrutiny of feminists, and share their tearful tales of how the mortgage meltdown has affected their relationships.’

Attended by about 30 women, mostly in their twenties, the groups mantra includes a simple three step guide to easing their economic and emotional woes: Step 1: Slip into a dress and heels. Step 2: Sip a cocktail and wait your turn to talk. Step 3: Pour your heart out. Repeat as needed.

Here’s a link to their blog: http://dabagirls.wordpress.com/.

The most recent post is entitled “Ain’t messin’ with no broke broker.”

No sympathy here. You have to hand it to them, though–they know how to get publicity.

Source: Business Pundit | 28 Jan 2009 | 5:09 pm

Would Be Bankers Dumber, Lazier

Over the years there have been many steps in the finance professional supply chain that have resulted in a sort of "grade inflation" in finance. The CFA is not one of them.

A lower percentage of candidates passed the first test of the Chartered Financial Analyst exam, a three-step process aimed at gaining a hiring edge as job losses accelerate in the financial-services industry.

Thirty-five percent passed the initial test, down from 39 percent last year, the CFA Institute said in a statement today. Almost 50,000 people took the exam in December, a 25 percent increase from a year earlier, the Charlottesville, Virginia- based institute said.

For reference, the pass-and-remain rate for the SEAL program Physical Screening Test used to be 34%, before that got candied up and pushed to 40% in the last few years. (Is nothing sacred?) The drill instructors at the CFA Institute will have none of that, thank you very much.

"Since it's a self-study program, it's hard to say why pass rates increase or decrease," institute spokeswoman Kathy Valentine said in an e-mail.

Candidates take the exam betting the certification can become a path to better jobs, higher salaries and a deeper understanding of finance. The not-for-profit CFA Institute recommends candidates spend at least 250 hours studying for each phase of the test. It costs about $2,500 to complete all three levels, which are given in June and December.

Did you fail? What was your major malfunction? Which segment of the creed did you blow? Ethics? Tenacity? Rigor? Analytics?

Source: Dealbreaker | 28 Jan 2009 | 5:07 pm

Wells Fargo Earnings Down; Dividend Intact

Wells Fargo posted its first loss since 2001, but it will maintain a 34 cent per share dividend. CNBC reports:

Wells Fargo…said it did not need more taxpayer funds to absorb the troubled lender Wachovia. Shares of Wells Fargo rose sharply in reaction.

The bank also said on Wednesday that Wachovia, which it bought on Dec. 31, lost $11.17 billion in the fourth quarter, largely due to loan losses and investment writedowns. Wachovia nearly collapsed from soaring losses on troubled loans before Wells Fargo stepped in.

Analysts have speculated that Wells Fargo will need to raise more capital and cut its dividend to absorb Wachovia. But the bank said it remains “comfortable in the aggregate” with its original assumptions on Wachovia’s credit quality, and is comfortable with its forecasts for cost savings and earnings impact.

Wells Fargo also maintained its 34 cents per share quarterly dividend and said it has no plans to request new capital from the government’s Troubled Asset Relief Program, after previously receiving $25 billion.

Think they’ll be able to float it without government bailout funds?

Source: Business Pundit | 28 Jan 2009 | 4:47 pm

Return To Sender

There are certain rituals that come with a layoff, like cleaning out your desk, giving back your security badge and that awkward goodbye lunch. Bryan sends another one to add to that list -- the disabling of your e-mail account:

This is a personal indicator that can only happen in these modern times. More and more, when I send emails to friends at their company address, I receive one of these as attached. This is often the first indicator that someone you know has been laid off at a company. Who would have thought that this technical error message would indicate someone's misfortune?

In this case, my friend was working for an investment bank in Tokyo. Layoffs, or RIF's (Reductions In Force), in investment banks that I know of are swift and as scripted as possible while still trying to maintain some sort of respect. As you are brought into a room to be informed of your fate, a process has begun behind the scenes that disables your computer access, email accounts, and building access. By the time you leave the room, all the tools you did your job with are taken away through this process that reminds me of the 1960's television drama "Branded". I've experienced both sides of this process when I had to downsize a department in 2001 and then most recently when I lost my position.

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Source: NPR Blogs: Planet Money | 28 Jan 2009 | 4:33 pm

CFA Exam Produces 35% Pass Rate

The CFA Institute just released its December 2008 CFA (Certified Financial Analyst) Level 1 exam results. Only 35% of those who took the test passed. eFinancialCareers has more:

A mere 35% of candidates who took the exam last December passed it, down from 39% in 2007.

Could it be that rather than succumbing to the dumbing down prevalent elsewhere in education, the CFA is actually making its exams harder? Or is it simply that more and more (low calibre) people are taking them?

We suspect it’s the latter. Between 2007 and 2008 alone, the number of people sitting Level 1 rose 25% to 36k, and candidates have increased 45% since 2003. With so many more entrants, the pass rate needs to remain low if the CFA is to retain any cachet. Expect it to fall even further in future.

Another question: Does passing the CFA make you a good investor?

Source: Business Pundit | 28 Jan 2009 | 4:28 pm

Start Your Own Bank

People keep asking why someone doesn't just start up a new, squeaky-clean bank that everyone trusts -- one unencumbered by toxic mortgage backed-securities.

There are new banks popping up, though last year saw a drop (see chart). The American Bankers Association says there were 62 newly chartered banks that qualified for FDIC insurance.

Most of these are small community banks, though. Vista Bank in South Carolina has three offices and a pretty bare-bones website. Vision statement: "VistaBank will be recognized as the financial institution of choice." That's it. No way it will be taking the place of Citibank anytime soon.

The challenge in starting up a new bank is the same you would face opening any new business. You need start-up capital, which these days is hard to come by.

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Source: NPR Blogs: Planet Money | 28 Jan 2009 | 4:25 pm

Financial shares jump on bank aid, Wells Fargo (Reuters)

Reuters - Shares of major U.S. banks soared after the market open on Wednesday, boosted by optimism that President Barack Obama's administration was moving quickly to stabilize the banking sector and as lawmakers get ready to vote on a stimulus package to boost the recession-hit economy.
Source: Yahoo! News: Stock Markets News | 28 Jan 2009 | 2:56 pm

So What If We Spend Less?

Douglas Coupland, author of Generation X, has an op-ed for everyone who thinks the world the world as we know it is coming to an end. I'm not endorsing it. I just thought you'd want to see it.

Coupland writes:

How much less will we actually consume in 2009? Does the prospect of a 10 percent reduction in personal spending sound scary? Should we be figuring out a number in our heads we can agree on as being both plausible and survivable? Five percent? Eight? When do we say, "O.K., this kind of reminds me of 'The Waltons' and I can feel good about it"?

He gets to that off-the-edge-of-the-horizon thing toward the end.

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Source: NPR Blogs: Planet Money | 28 Jan 2009 | 2:55 pm

House Weighs $900B Plan

The U.S. House of Representatives is expected to vote on its version of the now nearly $900 billion stimulus bill today.

From the Washington Post:
Democrats Among Stimulus Skeptics:Some say it fails to reshape American economy.

From the New York Times:
Stimulus reshapes American economy: A flood of money for education/ Republicans call it a back-door path to universal health coverage/ Leonhardt looks at merits and misses.

In other news: World's growth worst in 60 years/ Global search for growth turns to U.S./ FDIC may run "bad bank" to purge toxic assets/

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Source: NPR Blogs: Planet Money | 28 Jan 2009 | 2:47 pm