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Madoff Taking Page From Moz's Play(a)book?
Source: Dealbreaker | 11 Mar 2009 | 3:22 pm Presented By:Source: Dealbreaker | 11 Mar 2009 | 2:52 pm Move To Plan B C D E.
Unless you've been sleeping under a rock at the bottom of a yet to be dug coal mine, you have already noticed that the Fed's number one bicycle pump, interest rates, are already blowing air into leaky tires all over the country. A recovery, he added, would be "out of reach" until officials stabilize the financial system, and even if that happens the recession will persist until "later this year." Fed Considers Its Next Actions [The Wall Street Journal]
Source: Dealbreaker | 11 Mar 2009 | 2:52 pm He'll Pry The Moisturizer From Your Dead Lifeless Hands If He Has To
In a letter to Senator Kerry, Big B wrote yesterday that he and his crew insisted on AIG establishing "a special governance committee, issuing a new employee expense policy guidebook, and cancelling meetings, conferences and other events not clearly needed for business," and that he personally would be restricting "certain major decisions that might reduce the ability of AIG to repay its loan from the Fed," including but not limited to manicures, pedicures, and close your eyes AIG 'cause this one's gonna hurt, facials. Bernanke Says AIG Tightens Grip On Perks, Pay [Reuters]
Source: Dealbreaker | 11 Mar 2009 | 2:43 pm 'Raisins Taste Pretty Good Now'
Message in a fortune cookie Christopher T. Hall Derek from Talent, Ore., applies Joshua Bearman's "Delicious Cake Futures" story, about a lunchroom economy, to the housing market collapse: Listening to Josh's story from 3rd grade, I realized that for the past few years, I have felt similar as I watched home prices skyrocketing in our area (the Rogue Valley in southern Oregon has the city of Medford, one of the most overvalued markets in 2007 I believe). I knew people who were buying homes (chocolate-dipped nutter butters) and it felt like with prices headed nowhere but up (abundance everywhere), I would never own a home (scarcity), would always be a renter, and like Josh, I would be doomed to raisins for the rest of my life. Well, raisins taste pretty good right now. And I hope that you might do a program someday looking at this economy and the proposed bailouts from the viewpoint of people who rent and don't own as well as people who have very little. I must tell you it drives me crazy that pundits and politicians continually assert that homeowner assistance must happen because foreclosures affect other homeowners through decreasing home values. While I sympathize with those hurting, it sometimes feels like renters are invisible citizens. I want prices to keep coming down. By the way, I also want to wager with you that you cannot find a realtor that will tell you now is not a good time to buy a home. A home bought today is worth less tomorrow. So why are realtors telling people to try and catch a falling knife? » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 11 Mar 2009 | 2:33 pm UPDATE 2-Apple rolls out smaller, talking iPod Shuffle* Apple says new Shuffle is world's smallest music player (Adds exec interview, more details)Source: RSS feed - channel BNewsBusiness | 11 Mar 2009 | 2:28 pm The world's youngest billionaires lose one-third of their wealthThe world's youngest billionaires have lost nearly a third of their wealth, according to finance magazine Forbes.Source: BBC News | Business | World Edition | 11 Mar 2009 | 2:25 pm UPDATE 2-GW gets positive results for cannabis drug* Shares had risen by over 20 pct before the announcement (Adds details)Source: RSS feed - channel BNewsBusiness | 11 Mar 2009 | 2:20 pm Bank stabilization optimism lifts Wall Street (Reuters)
Source: Yahoo! News: Business | 11 Mar 2009 | 2:19 pm Bank stabilization optimism lifts Wall StreetNEW YORK (Reuters) - Stocks rose on Wednesday, with the benchmark S&P 500 index attempting its first two-day advance in a month, as investors bet Washington would restore confidence in banks by relieving them of money-losing assets.Source: Reuters: Business News | 11 Mar 2009 | 2:19 pm Bank stabilization optimism lifts Wall Street (Reuters)
Source: Yahoo! News: Stock Markets News | 11 Mar 2009 | 2:19 pm Four states' unemployment rates above 10%As unemployment soared in January, four states' jobless rates climbed higher than 10%, according to federal data released Wednesday.Source: Business and financial news - CNNMoney.com | 11 Mar 2009 | 2:17 pm Euler Hermes's North Discusses U.S. HousingSource: Bloomberg - All Podcasts | 11 Mar 2009 | 2:13 pm Gattiker Remains Skeptical of Turnaround in Bank StocksSource: Bloomberg - All Podcasts | 11 Mar 2009 | 2:11 pm UBS ups 2008 net loss to $18 billion (Reuters)Reuters - UBS said earnings would remain at risk due to volatile markets, as it revised up its 2008 net loss to 20.9 billion Swiss francs ($18.06 billion), to include a big U.S. tax fine and more writedowns.Source: Yahoo! News: Business | 11 Mar 2009 | 2:10 pm UBS ups 2008 net loss to $18 billionZURICH (Reuters) - UBS said earnings would remain at risk due to volatile markets, as it revised up its 2008 net loss to 20.9 billion Swiss francs ($18.06 billion), to include a big U.S. tax fine and more writedowns.Source: Reuters: Business News | 11 Mar 2009 | 2:10 pm Stocks moderately higher, extending rallyNEW YORK -- Stocks moved modestly higher today in early trading as Wall Street tried to sustain and extend the previous day's big rally.Source: L.A. Times - Business | 11 Mar 2009 | 2:08 pm Neiman Marcus posts lossNEW YORK (Reuters) - Upscale retailer Neiman Marcus posted a quarterly loss on Wednesday, as sales suffered through the holiday season at the hands of frugal U.S. consumers.Source: Reuters: Business News | 11 Mar 2009 | 2:07 pm Neiman Marcus posts loss (Reuters)Reuters - Upscale retailer Neiman Marcus posted a quarterly loss on Wednesday, as sales suffered through the holiday season at the hands of frugal U.S. consumers.Source: Yahoo! News: Business | 11 Mar 2009 | 2:07 pm Spotlight turns on banks to take new moneyConfused? Read Robert Cole's guide to the language of the recessionSource: Latest Business News from Times Online | 11 Mar 2009 | 2:06 pm Oil prices 'to drop' if OPEC shuns output cutOil prices will drop if the Organization of Petroleum Exporting Countries decides against cutting output when it meets in Vienna this week, Algeria's energy minister Chakib Khelil told AFP...Source: RSS feed - channel BNewsBusiness | 11 Mar 2009 | 2:05 pm 24/7 Wall St.–Channel Checkers Survey: Target (TGT) Unusually Strong
Based on the results, Target is doing better than most analysts had expected. Only 53% of respondents stated that the weak housing market or the weak economy overall was hurting business at their store location. The other 47% said these macro factors were not affecting sales at their store location. The strength of this number was a surprise. Another surprise in the survey was that 50% of respondents reported business as “above average” at their store location while another 27% said business was “very strong”. Twenty percent reported business as “average” and 7% reported business as “below average”. When asked about apparel, those polled said that Mossimo was the top selling women’s brand according to 37% of respondents. 30% said it was Merona and 7% said Isaac Misrahi was the top women’s brand. For more details visit The Channel Checkers. Douglas A. McIntyre Tagged: TGT      Source: 247 Wall Street | 11 Mar 2009 | 2:01 pm Stocks moderately higher, extending rally (AP)
Source: Yahoo! News: Stock Markets News | 11 Mar 2009 | 2:01 pm Just Like That, Gold Lost Its Luster (ABX, NEM, GG, RGLD, GLD)
The CEO of Barrick Gold Corp. (NYSE:ABX) recently said that the supply of gold will continue to drop, even as the price continues to be volatile. That’s not exactly earth-shattering news, but Barrick stock dropped almost $2/share (7%). Newmont Mining Corp. (NYSE:NEM) also fell about 7%, Goldcorp Inc. (NYSE:GG) dropped 8%, and Royal Gold Inc. lost about 4%. Even ETF bullion buyer SPDR Gold Shares (NYSE:GLD) fell by about 1%. Good news from Fed Chairman Bernanke certainly played a role in the market’s rally, as did the declaration from Citigroup, Inc. (NYSE:C) CEO Vikram Pandit that Citigroup made profits in the first two months of the quarter. Suddenly the stock market seemed less risky, so traders went after stocks and sold gold. Share prices for the miners are moving back up this morning, as expected drops in crude oil inventories combined with an estimated drop in total US demand for crude oil push crude prices down and share prices up. Gold miners are holding steady. Paul Ausick       Source: 247 Wall Street | 11 Mar 2009 | 1:55 pm Apple unveils smaller, talking iPod shuffleRead full story for latest details.Source: Business and financial news - CNNMoney.com | 11 Mar 2009 | 1:54 pm Stocks try to extend gainsStocks inched higher Wednesday morning, but gains were tentative following the previous session's rally, Wall Street's biggest advance of the year.Source: Business and financial news - CNNMoney.com | 11 Mar 2009 | 1:52 pm US Treasury's Kashkari: don't micro-manage banksWASHINGTON, March 11 (Reuters) - U.S. government officials must be careful not to "micro-manage" banks that receive capital injections from the U.S. Treasury Department, a senior Treasury official said...Source: RSS feed - channel BNewsBusiness | 11 Mar 2009 | 1:52 pm UPDATE 2-Deals of the day -- mergers and acquisitionsMarch 11 (Reuters) - The following bids, mergers, acquisitions and disposals involving European, U.S. and Asian companies were reported by 1330 GMT on Wednesday.Source: RSS feed - channel BNewsBusiness | 11 Mar 2009 | 1:51 pm Greenspan says Fed didn't cause the housing bubble(Reuters) - Former U.S. Federal Reserve Chairman Alan Greenspan said lower rates on long-term, fixed-rate mortgages and not the Federal Reserve's policies are to blame for the U.S. housing bubble.Source: Reuters: Business News | 11 Mar 2009 | 1:51 pm Madoff's Fishy Family Possibly Going Downtown
"He is not reliable. He's jerking everyone around," [a source told TDB] source. "Every day he changes his tune about where the money went and where it is. He's trying to protect his family."
Source: Dealbreaker | 11 Mar 2009 | 1:48 pm UPDATE 4-National Semi to cut a quarter of workforce* Q3 rev falls 36 pct to $292 mln, Wall St view $295 mlnSource: RSS feed - channel BNewsBusiness | 11 Mar 2009 | 1:48 pm Stocks fluctuate as trading resumes after rallyNEW YORK -- Stocks are fluctuating in early trading as investors wait to see if Wall Street can extend its big rally.Source: RSS feed - channel BNPaperBusiness | 11 Mar 2009 | 1:48 pm Citi Maintains a ‘Buy’ Rating on Transocean (RIG), Adds to Top Picks Live ListCiti maintains a ‘Buy’ rating on Transocean Inc (NYSE: RIG), adds to Top Picks Live list with a $98 price target, citing several positive trends in the offshore drilling including capacity constraints which are driving increases in day rates. Citi analyst says, “Our revised energy price forecast calls for a barrel of WTI crude oil to average $47 in 2009, $55 in 2010, $60 in 2011, and $65 in 2012. Under this price progression, which is consistent with the forward curve in oil futures, the deepwater drilling play is underpinned by solid economic returns on investment. We expect deepwater drilling to remain the highest growth market in oil services…” Tagged: RIG      Source: 247 Wall Street | 11 Mar 2009 | 1:44 pm Treasurys inch lower ahead of 10-year auctionTreasurys edged lower Wednesday morning as investors awaited another big auction of government debt and global stock prices rose.Source: Business and financial news - CNNMoney.com | 11 Mar 2009 | 1:43 pm Stocks fluctuate as trading resumes after rallyStocks are fluctuating in early trading as investors wait to see if Wall Street can extend its big rally. Financials are mixed after leading the market to its best day this year on...Source: RSS feed - channel BNewsBusiness | 11 Mar 2009 | 1:42 pm Ethanol: Not dead yetThe old kings of ethanol are struggling for survival but a new crop of companies are poised to ascend to the throne and hope to offer a superior product.Source: Business and financial news - CNNMoney.com | 11 Mar 2009 | 1:39 pm Dear InvestorRenaissance Institutional Equities Fund LLC: Feb 2009: -4.61% YTD: -8.84%
Source: Dealbreaker | 11 Mar 2009 | 1:38 pm A market bear says it's time to return to stocksSource: Business and financial news - CNNMoney.com | 11 Mar 2009 | 1:37 pm Freddie Mac appoints interim CEO and chairman (AP)AP - Embattled mortgage giant Freddie Mac said Wednesday John Koskinen will take over as interim chief executive of the company.Source: Yahoo! News: Business | 11 Mar 2009 | 1:36 pm Oil falls towards $44 as global demand dwindlesLONDON (Reuters) - Oil fell by more than a dollar toward $44 a barrel on Wednesday as further evidence of a large drop in global crude demand emerged.Source: Reuters: Business News | 11 Mar 2009 | 1:34 pm NY probes Merrill bonus markdown link: report(Reuters) - New York prosecutors are investigating whether the early payment of bonuses at Merrill Lynch last year gave the bank's traders an incentive to mark down the value of their trading positions in the last days of December, the Financial Times said, citing people familiar with the probe.Source: Reuters: Business News | 11 Mar 2009 | 1:34 pm BoE success may spur Fed buying of Treasuries: report(Reuters) - U.S. Federal Reserve officials were struck by the early apparent success the Bank of England's plans to buy government bonds and could further consider moving forward on a similar effort in the United States, the Wall Street Journal said on Wednesday.Source: Reuters: Business News | 11 Mar 2009 | 1:32 pm Earmarks: Myth and realityIt's impossible to listen to debates about the federal budget without getting an earful about earmarks.Source: Business and financial news - CNNMoney.com | 11 Mar 2009 | 1:29 pm Tiscali banks agree to suspend debt repaymentsTiscali, the troubled broadband provider, has secured a new lifeline after its banks agreed to suspend loan repayments and help the group to restructure its finances.Source: Latest Business News from Times Online | 11 Mar 2009 | 1:26 pm Europe Markets: Europe stocks cement gains as financials move upEuropean stocks were trading solidly higher on Wednesday afternoon, drawing support from banks like Credit Suisse and Deutsche Bank along with insurers.Source: MarketWatch.com - Top Stories | 11 Mar 2009 | 1:24 pm Bond Report: Treasurys under slight pressure before 10-year note auctionTreasury prices decline as their yields get nudged higher, with bond traders counting down to the government's auction of $18 billion in 10-year notes.Source: MarketWatch.com - Top Stories | 11 Mar 2009 | 1:24 pm ING Canada weighs bid for Aviva assets- newspaperTORONTO, March 11 (Reuters) - ING Canada Inc is weighing a bid for the Canadian operations of Aviva Plc , the National Post reported on Wednesday, citing unnamed people familiar with the matter.Source: RSS feed - channel BNewsBusiness | 11 Mar 2009 | 1:23 pm Energy Stocks: Sector adds to gains ahead of inventory dataEnergy stocks add to big gains from the previous session in early activity as investors look toward the latest weekly petroleum supply data and lower oil prices.Source: MarketWatch.com - Top Stories | 11 Mar 2009 | 1:23 pm Tech Stocks: Apple rises as techs take off for second dayThe tech sector marches into positive territory, powered by strong gains from Apple Inc. and by strengthening investor confidence in the broader market.Source: MarketWatch.com - Top Stories | 11 Mar 2009 | 1:22 pm Iran criticises Total, sees new South Pars partnerTEHRAN, March 10 (Reuters) - A senior Iranian oil official said France's Total had wasted time in work on a South Pars gas field phase and that a new partner would enter the project with a "leading share",...Source: RSS feed - channel BNewsBusiness | 11 Mar 2009 | 1:21 pm CORRECTED - UPDATE 1-Philips selling LG Display stake - sourcesLONDON, March 11 (Reuters) - Philips Electronics is selling its stake in Korea's LG Display , sources close to the matter said on Wednesday, lifting the Dutch company's shares by as much as 5 percent...Source: RSS feed - channel BNewsBusiness | 11 Mar 2009 | 1:19 pm Staples posts weak profit(Reuters) - Staples Inc posted a 14 percent fall in quarterly profit, hurt by weak sales of furniture and computers, and said it will not give outlook for 2009 due to uncertain economic conditions.Source: Reuters: Business News | 11 Mar 2009 | 1:19 pm Brown set to meet African leadersUK Prime Minister Gordon Brown is to meet African leaders who are concerned their voices will not be heard at the G20 summit in April.Source: BBC News | Business | World Edition | 11 Mar 2009 | 1:18 pm Movers & Shakers: Wednesday's biggest gaining and declining stocksAmong the companies whose shares were making notable moves in Wednesday's stock market were Bank of America, Citigroup, Hovnanian, J. Crew, Sirius, Staples, Take Two, MGM Mirage and Las Vegas Sands.Source: MarketWatch.com - Top Stories | 11 Mar 2009 | 1:18 pm Financial Stocks: Banks, showing resilience, lead sector higherNEW YORK (MarketWatch) -- U.S. financial stocks rose on Wednesday, as banks like Citigroup and Bank of America showed some staying power following gains in the previous session, and Morgan Stanley gained on a buy recommendation from rival Goldman Sachs.Source: MarketWatch.com - Top Stories | 11 Mar 2009 | 1:17 pm Opening Bell: 03.11.09Paulson Scores Big On Lloyds Failure (Bloomberg) "The firm took short positions in London-based Lloyds and HBOS that were valued at 367 million pounds in September, based on the holdings and share prices on the dates they were reported. The stake fell below the reporting threshold on March 9, regulatory filings show. Paulson, which made $3 billion anticipating the U.S. housing market would collapse, profited as Lloyds, HBOS and Royal Bank of Scotland Group Plc sought bailouts from British taxpayers. Lloyds surrendered control to the government on March 7 in exchange for asset guarantees. Paulson made least 295 million pounds shorting RBS, bringing its Banks Tell Government To Get Bent (NYT) "Other institutions like Johnson Bank of Racine, Wis., initially expressed interest in seeking bailout funds but have now changed their minds. Bank executives told The Milwaukee Journal Sentinel that one reason they rejected the government money was to avoid any disruption in the bank's role in the local community, including supporting the UBS Restates 2008 Earnings (WSJ) Geithner On Charlie Rose (Reuters) Companies Kill Retirement Contributions (FT) Cue unions and sympathetic senators. Redemptions Slowed In February (Bloomberg) Redemptions were about a third of the value in January, after the industry lost about $400 billion from its June peak to December through market losses and withdrawals, a preliminary Eurekahedge Pte report showed. The February figures were based on 41 percent of funds that disclosed estimates by March 10 to the Singapore-based research
Source: Dealbreaker | 11 Mar 2009 | 1:15 pm U.S. consumers say better times a year awaySAN FRANCISCO (Reuters) - Nearly a third of U.S. consumers feel it will be a year before their families are better off than they are today, and more than a quarter think it will take longer, according to a retail survey on behalf of Reuters.Source: Reuters: Business News | 11 Mar 2009 | 1:15 pm U.S. consumers say better times a year away (Reuters)Reuters - Nearly a third of U.S. consumers feel it will be a year before their families are better off than they are today, and more than a quarter think it will take longer, according to a retail survey on behalf of Reuters.Source: Yahoo! News: Business | 11 Mar 2009 | 1:15 pm Enjoy your forced vacationGetting time off from work is usually considered a good thing -- but not when it's unpaid and unexpected.Source: Business and financial news - CNNMoney.com | 11 Mar 2009 | 1:11 pm Airline Stocks: Shares rally a second day; JetBlue gets upgraded to buyA steady climb in the market was helping to lift airline stocks on Wednesday, while low-cost carrier JetBlue got a boost from an upgrade at Bank of America-Merrill Lynch.Source: MarketWatch.com - Top Stories | 11 Mar 2009 | 1:11 pm Apple launches new, smaller iPod shuffleApple says it's launched a new version of its ultrasmall iPod shuffle with four times the memory capacity of its predecessor, and with a voice feature.Source: MarketWatch.com - Top Stories | 11 Mar 2009 | 1:11 pm London Markets: HSBC Holdings share losses keep London gains in checkShares of banking giant HSBC Holdings fall in London's top index on Wednesday, continuing a volatile week for share trading in the dual-listed firm and helping to keep gains for the broader market in check.Source: MarketWatch.com - Top Stories | 11 Mar 2009 | 1:10 pm The Ratings Game: Goldman says short AmEx, buy Morgan StanleyGoldman Sachs on Wednesday proposed a trading strategy designed to profit from a recovery in investment banking, while avoiding worsening conditions in consumer credit as the country braces for what figures to be a prolonged recession.Source: MarketWatch.com - Top Stories | 11 Mar 2009 | 1:07 pm Local heroes: Nominate someone in your areaSource: Business and financial news - CNNMoney.com | 11 Mar 2009 | 1:06 pm Wall Street looks to extend rallyUS stocks were looking to rally for the second consecutive day for the first time in a month as details from Tim Geithner, US Treasury secretary, added to Tuesday's good news from Citigroup that it was headed for its best quarter since 2007Source: Financial Times - US homepage | 11 Mar 2009 | 1:01 pm Government gives Jaguar Land Rover £27m for green 4X4Land Rover hopes to launch the fuel and CO2 efficient model in 2011.Source: Telegraph Finance | 11 Mar 2009 | 12:58 pm Green News: Can Coal Be Cleaned Up?
That sort of depends on who you ask. Most environmental organizations believe that clean coal is an oxymoron. Coal is dirty, and nothing is going to change that. On the other side, coal companies optimistically tout the day when burning coal will not emit one ounce of carbon dioxide. Today, the New York Times reported that a pilot CCS project dubbed FutureGen was canceled by the Bush administration on the basis of faulty math. FutureGen would have generated 275 megawatts of electricity. A consortium of companies had agreed to invest about 25% of the cost with the US Department of Energy putting up most of the rest. The plant originally was estimated to cost about $950 million, but due to the math error (using nominal dollars instead of constant dollars) the Bush administration canceled the project when the estimated cost mistakenly doubled. Still, costs would have increased to about $1.3 billion. Consulting firm McKinsey & Company has estimated that removing a metric ton of carbon from a coal-fired plant would cost about $35-$55 by 2030. Small demonstration projects, like Vattenfall’s will cost about double that. Retrofitting old plants would cost even more. CCS also uses about 20%-30% of a coal-fired plant’s capacity to capture and bury the carbon dioxide it generates. Coal-fired plants are not very efficient to begin with. One study determined that about 63% of the energy stored in coal is lost as waste heat. Other estimates for the amount of energy lost as heat go as high as 70%. Reduce that by another 20%-30% and the energy efficiency of a coal-fired plant drops below 25%. Besides cost and inefficiency, the other significant hurdle is how to store carbon dioxide safely? Depleted oil and gas reservoirs receive the most attention, but deep saline aquifers are also possible sites. The depleted reservoirs are a good bet in the short run because, the thinking goes, they held the oil or gas for millions of years before we pumped it out, so the reservoirs are unlikely to fail now. Even if the carbon dioxide can be stored safely, depleted reservoirs are not equally distributed geographically, so getting the captured carbon dioxide to a storage location could be impossible or very expensive. The alternative could be to create a sort of ‘national boiler room’ in the wide open spaces of Wyoming, Montana, and the Dakotas, where there is a lot of land and coal available, as well as potential storage reservoirs. Such a plan would certainly face fierce opposition. And even if it were successful, new electricity transmission lines would be needed to transport the power to markets. That alone adds billions of dollars to the cost of carbon capture. Coal is abundant and relatively easily available, especially in the western US. Technologies for scrubbing emissions are available, but costly. The decision to pursue clean coal really comes down to a choice between investing more in a currently cheap and abundant fuel, or investing more in currently expensive and relatively small power sources like solar and wind. The US probably needs to do both. Clean coal is really a transition fuel until alternate, cleaner technologies become more widely used and cheaper. That transition will take years, probably decades. If the US is going to generate electricity for the next 50 years, a large portion of the juice will have to come from coal. And if the US wants to reduce carbon emissions, then carbon capture and storage will need to be developed. Paul Ausick       Source: 247 Wall Street | 11 Mar 2009 | 12:52 pm Apple in You Ear, For $79 (AAPL)
JON C. OGG Tagged: AAPL      Source: 247 Wall Street | 11 Mar 2009 | 12:42 pm Norway pension fund loses $92bnThe Government Pension Fund of Norway - Europe's largest shareholder - says it suffered a $92bn loss in 2008.Source: BBC News | Business | World Edition | 11 Mar 2009 | 12:36 pm Chinese car sales up by a quarterSales of new cars in China jump by 25% as government measures to help carmakers countered the global downturn in auto sales.Source: BBC News | Business | World Edition | 11 Mar 2009 | 12:24 pm EDF offices raided in price-fixing fearsInvestigators from the European Commission have raided the offices of Électricité de France (EDF) seeking evidence of price-fixing in the French electricity market.Source: Latest Business News from Times Online | 11 Mar 2009 | 12:17 pm Staples posts weak profit (Reuters)Reuters - Staples Inc posted a 14 percent fall in quarterly profit, hurt by weak sales of furniture and computers, and said it will not give outlook for 2009 due to uncertain economic conditions.Source: Yahoo! News: Business | 11 Mar 2009 | 12:15 pm Six ways to get more from your pensionPlans to 'print money' have sent annuity rates down. Here are six ways for those approaching retirement to protect their income.Source: Telegraph Finance | 11 Mar 2009 | 12:15 pm World stock markets push higher despite gloom (AFP)
Source: Yahoo! News: Stock Markets News | 11 Mar 2009 | 12:10 pm Bank to use 'newly created' moneyThe Bank of England is to launch its quantitative easing scheme in an attempt to boost the supply of money.Source: BBC News | Business | World Edition | 11 Mar 2009 | 12:06 pm Google to allow internet users to choose the type of adverts they seeGoogle is giving its users the power to choose which adverts they see online and the ability to opt out of targeted adverting.Source: Telegraph Finance | 11 Mar 2009 | 11:53 am John Lewis halts growth plan as profits fall 26%John Lewis Partnership admitted today that its expansion plans were on hold as property developers delay shopping centre projects. The announcement came as the employee-owned department store group reported a 26 per cent drop in full-year profit and awarded its partners a bonus of 13 per cent of their salaries.Source: Latest Business News from Times Online | 11 Mar 2009 | 11:52 am Top Analyst Downgrades (AXP, ADSK, DKS, IFF, RBS, SLB)These are the top pre-market analyst downgrades and negative calls from Wall Street that we have seen this Wednesday morning:
JON C. OGG Tagged: ADSK, AXP, DKS, IFF, RBS, SLB      Source: 247 Wall Street | 11 Mar 2009 | 11:52 am Top Analyst Upgrades (BIG, COF, DFS, HPQ, JBLU, MS, MOT, TSN, USB)These are the top analyst upgrades and positive calls we have seen from Wall Street this Wednesday morning:
JON C. OGG Tagged: BIG, COF, DFS, HPQ, JBLU, MOT, MS, TSN, USB      Source: 247 Wall Street | 11 Mar 2009 | 11:47 am The Rumor Mill That Never Stops: Apple (AAPL) Building New PC
The latest speculation is the the consumer electronics company will come out with a small portable Mac with a touchscreen like the one used on the firm’s iPhone. According to Reuters, “Apple will take third-quarter delivery of newly developed 10-inch touchscreens from Taiwan.” No one is willing to speculate that they might be used to build hub caps. Douglas A. McIntyre Tagged: AAPL      Source: 247 Wall Street | 11 Mar 2009 | 11:47 am World markets extend gainsRead full story for latest details.Source: Business and financial news - CNNMoney.com | 11 Mar 2009 | 11:46 am Bank shares help world markets extend rally (AP)
Source: Yahoo! News: Stock Markets News | 11 Mar 2009 | 11:46 am Madoff 'expected to plead guilty'Disgraced US financier Bernard Madoff is expected to plead guilty to orchestrating a $50bn (£35bn) fraud, his lawyer says.Source: BBC News | Business | World Edition | 11 Mar 2009 | 11:46 am FTSE 100 struggles to find directionLondon's FTSE 100 struggled to find direction in volatile early trading after rallying nearly 5pc the day before.Source: Telegraph Finance | 11 Mar 2009 | 11:30 am Madoff victims line up to give evidence at hearingRead the full court announcementSource: Latest Business News from Times Online | 11 Mar 2009 | 11:11 am John Lewis sees profits fall 26%Department store group John Lewis said its annual profits fell 26% last year amid "deteriorating conditions".Source: BBC News | Business | World Edition | 11 Mar 2009 | 11:02 am Toyota cuts working hours and payToyota says staff at factories in Flintshire and Derbyshire will take a 10% pay cut and reduce their working hours.Source: BBC News | Business | World Edition | 11 Mar 2009 | 10:51 am Airlines suffer as demand fallsA number of major airlines report losses or big falls in profits for 2008 as the economic downturn hits demand for air travel.Source: BBC News | Business | World Edition | 11 Mar 2009 | 10:42 am John Lewis staff get bonus despite recessionJohn Lewis has awarded its staff bonuses of 13pc last year despite the retailer facing one of its toughest years on record.Source: Telegraph Finance | 11 Mar 2009 | 10:36 am If OPEC Cuts It May Not Get Desired Result
But, the rally will probably be short-lived. The latest comments from the World Bank and IMF make a convincing case that the economic slowdown is spreading from the developed countries to large fast-growing nations including China and India. Expansion will probably also stop in many Third World nations. If analysts needed any confirmation that oil demand is likely to continue to falter, the import and export numbers for China, which indicated a sharp drop in economic activity in that country should bolster the argument that the downturn will be sharp and long. The need for crude is cratering. Douglas A. McIntyre       Source: 247 Wall Street | 11 Mar 2009 | 10:33 am UK trade gap grows on falling exports to USBritain’s trade in goods deficit widened by more than expected in January because of a steep fall in exports to America and Asia.Source: Latest Business News from Times Online | 11 Mar 2009 | 10:29 am China's exports in sharp declineChinese exports sank 25% in February from a year ago, figures show, as demand for the country's goods overseas falls.Source: BBC News | Business | World Edition | 11 Mar 2009 | 10:20 am Wal-Mart’s (WMT) Bid To Save The Healthcare System
Wal-Mart has decided that it can help save the medical system from relying on paper and make money as part of the process. According toThe New York Times, Wal Mart’s Sam’s Club outlets will offer digital medical systems. That paper says that “The Sam’s Club offering, to be made available this spring, will be under $25,000 for the first physician in a practice, and about $10,000 for each additional doctor.” Physicians are extraordinarily cheap, so the product may be a tough sale. If the the new Administration’s goal is to upgrade the health care system, which would almost certainly involve overhauling it so that digital records are the norm, it will not be able to rely on $25,000 systems from Wal-Mart. The expense of practicing medicine is rising too fast due to malpractice and labor costs. Adding another big monthly bill to that is asking too much of most physicians. If the government wants to turn the tracking of patient data from 19th Century practices to 21st Century technology, it might as well buy the new systems from Wal-Mart and give them away to the doctors who want them. Douglas A. McIntyre Tagged: WMT      Source: 247 Wall Street | 11 Mar 2009 | 10:01 am PartyGaming hopes for return to USThe online gambling group has high hopes for a return to the US where it has not operated since a ban on internet gambling was introduced in 2006Source: Financial Times - US homepage | 11 Mar 2009 | 9:40 am FTSE 100 shares fall (AFP)
Source: Yahoo! News: Stock Markets News | 11 Mar 2009 | 9:27 am UBS warning shakes equities, day after big gains (Reuters)
Source: Yahoo! News: Stock Markets News | 11 Mar 2009 | 9:22 am Toyota cuts production and pay as motor industry crisis deepensCar industry reeling as car giant follows pay freeze at Jaguar Land Rover and job cuts at Ford Mini and Nissan.Source: Telegraph Finance | 11 Mar 2009 | 9:19 am Savills sees foreign investors return to UK property marketEstate agent Savills said foreign investors may start buying UK homes and commercial property again this year as sharp price falls and the pound's decline make the market attractive again.Source: Telegraph Finance | 11 Mar 2009 | 8:54 am Paulson may have made £300m shorting Lloyds and HBOSPaulson ? Co the hedgefund firm that made more than 3bn betting the US housing market would collapse may have made £311m since September by short selling Lloyds Banking Group and HBOS.Source: Telegraph Finance | 11 Mar 2009 | 8:53 am easyJet says EU suspension of 'use it or lose it' air slots rule is protectionistThe European Commission has proposed suspending the "use it or lose it" rule governing takeoff and landing slots at airports in a move easyJet has branded protectionist.Source: Telegraph Finance | 11 Mar 2009 | 8:27 am Madoff faces life in prison on 11 criminal chargesNEW YORK (Reuters) - Bernard Madoff, accused of an "unprecedented" $50 billion financial swindle, was charged on Tuesday with 11 criminal counts that could put him in prison for the rest of his life.Source: Reuters: Business News | 11 Mar 2009 | 7:56 am Australian stocks: Market up almost two per centSYDNEY - The Australian share market has closed nearly two per cent higher buoyed by the local mining and financial sectors and following a rally on Wall Street overnight. At the 1615 AEDT close, the benchmark S&P/ASX200 index...Source: New Zealand Herald - Business | 11 Mar 2009 | 7:44 am Germany's HRE bank faces bankruptcy without more aid: report (AFP)
Source: Yahoo! News: Business | 11 Mar 2009 | 7:37 am Asian markets extend global rally on Citi newsHONG KONG -- Asian stock markets surged Tuesday, with Japan's key index jumping nearly 5 percent, after Wall Street staged a massive rally as news that Citigroup is turning a profit buoyed hopes the stricken...Source: RSS feed - channel BNPaperBusiness | 11 Mar 2009 | 7:28 am Bank of England begins pumping £75bn into economyThe Bank of England opens a new front in its effort to ward off deflation today as it prepares to buy government bonds with newly created money.Source: Telegraph Finance | 11 Mar 2009 | 7:18 am Jim Cramer is firing back at Jon StewartThe CNBC pundit and 'The Daily Show' host are engaging in full-blown media war.Jon Stewart didn't take kindly to CNBC pundit Jim Cramer dismissing his Comedy Central program as a mere "variety show." Source: L.A. Times - Business | 11 Mar 2009 | 7:00 am Madoff to plead guilty, his lawyer saysThe plea to 11 criminal charges in a $50-billion Ponzi scheme is expected Thursday and would come without a formal plea agreement. ...Source: RSS feed - channel BNPaperBusiness | 11 Mar 2009 | 7:00 am In-your-face Web ad formats popping up all overThe Online Publishers Assn. launches supersize ads in an attempt to reach surfers who ignore banners.They're bigger, they're bolder, and soon they'll be covering up large swaths of some of your favorite Web pages. Source: L.A. Times - Business | 11 Mar 2009 | 7:00 am Jimmy Fallon off to a decent start in late-night ratings raceWhen his NBC talk show premiered last week, Jimmy Fallon introduced a comedy bit spoofing TV bosses' fixation on attracting certain market demographics. Fallon's show is supposedly going after blond mothers, according to the bit, partly because "they look less sick and sad than their brunet counterparts."Source: L.A. Times - Business | 11 Mar 2009 | 7:00 am Obama pushes global economic stimulus effortThe U.S., ahead of a G-20 meeting of finance ministers, calls on more countries to inject money into their own economies.Even as it spends hundreds of billions of dollars to revive the U.S. economy, the Obama administration is opening a second front -- pressing European and other nations to launch bigger efforts to stimulate their own economies. Source: L.A. Times - Business | 11 Mar 2009 | 7:00 am Obama pushes global economic stimulus effortThe U.S., ahead of a G-20 meeting of finance ministers, calls on more countries to inject money into their own economies. ...Source: RSS feed - channel BNPaperBusiness | 11 Mar 2009 | 7:00 am In a hairy job market, can transplants aid the balding?The recession has caused patient volume at cosmetic-surgery facilities to fall by a third, according to the American Academy of Cosmetic Surgery. With money so tight, it's hard for many people to contemplate...Source: RSS feed - channel BNPaperBusiness | 11 Mar 2009 | 7:00 am Madoff to plead guilty, his lawyer saysThe plea to 11 criminal charges in a $50-billion Ponzi scheme is expected Thursday and would come without a formal plea agreement.Bernard L. Madoff, the alleged architect of a $50-billion Ponzi scheme whose victims included Hollywood luminaries, retirees and nonprofit charities, appears to be going down without a fight. Source: L.A. Times - Business | 11 Mar 2009 | 7:00 am Dow jumps 5.8% on Citigroup profit newsAfter the banking company reports that it was profitable through the first two months of the year, the Dow Jones industrial average rises 379 points. Other indexes, and financial stocks, also gain. ...Source: RSS feed - channel BNPaperBusiness | 11 Mar 2009 | 7:00 am Disney shareholders vote down two compensation proposalsAttempts to kill 'golden coffin' benefits and to give shareholders a voice on executive pay fail.Walt Disney Co. investors, meeting at the company's annual shareholder meeting, rejected a pair of proposals that would have buried so-called golden coffin benefits for senior executives and given shareholders a say in executive compensation. Source: L.A. Times - Business | 11 Mar 2009 | 7:00 am Jim Cramer is firing back at Jon StewartThe CNBC pundit and 'The Daily Show' host are engaging in full-blown media war. Jon Stewart didn't take kindly...Source: RSS feed - channel BNPaperBusiness | 11 Mar 2009 | 7:00 am RV maker faces hard road aheadFleetwood files for bankruptcy as the housing crisis slashes demand for its two key products.For Fleetwood Enterprises Inc., the national housing crisis has been a double whammy. Source: L.A. Times - Business | 11 Mar 2009 | 7:00 am In a hairy job market, can transplants aid the balding?The recession has caused patient volume at cosmetic-surgery facilities to fall by a third, according to the American Academy of Cosmetic Surgery. With money so tight, it's hard for many people to contemplate spending thousands of dollars on face-lifts or boob jobs.Source: L.A. Times - Business | 11 Mar 2009 | 7:00 am Jimmy Fallon off to a decent start in late-night ratings raceWhen his NBC talk show premiered last week, Jimmy Fallon introduced a comedy bit spoofing TV bosses' fixation on attracting certain market demographics. Fallon's show is supposedly going after blond mothers,...Source: RSS feed - channel BNPaperBusiness | 11 Mar 2009 | 7:00 am Securities fraud suspect Bruce Friedman agrees to let receiver operate his firmsThe SEC has accused the Sherman Oaks money manager of diverting $17 million of his investors' money to support a lavish lifestyle and high-profile charitable contributions.A Sherman Oaks money manager accused of spending millions of his investors' dollars on a lavish lifestyle and high-profile charitable contributions agreed Tuesday to let a court-appointed receiver manage his companies' assets. Source: L.A. Times - Business | 11 Mar 2009 | 7:00 am Securities fraud suspect Bruce Friedman agrees to let receiver operate his firmsThe SEC has accused the Sherman Oaks money manager of diverting $17 million of his investors' money to support a lavish lifestyle and high-profile charitable contributions. ...Source: RSS feed - channel BNPaperBusiness | 11 Mar 2009 | 7:00 am U.S. airlines reduce overseas flightsDelta will cut international trips 10% as it and others grapple with a steep drop in travel demand. Carriers are also offering bargains for destinations outside and within the U.S. ...Source: RSS feed - channel BNPaperBusiness | 11 Mar 2009 | 7:00 am NZ stocks: Market follows US surgeThe share market staged a broad-based rally today after United States stocks posted their best day in four months, following comments from Citigroup that it was profitable in the first two months of 2009. The US market also got...Source: New Zealand Herald - Business | 11 Mar 2009 | 6:18 am Madoff faces life in prison on 11 criminal charges (Reuters)
Source: Yahoo! News: Business | 11 Mar 2009 | 6:11 am Currency: Dollar closes at US50cThe New Zealand dollar took a hit late in its domestic day from Chinese trade data. It not a typical catalyst for the local currency market but news that China's exports fell 25.7 per cent in February from a year earlier hurt all...Source: New Zealand Herald - Business | 11 Mar 2009 | 5:35 am China hit by massive drop in exportsChinese exports slumped 25.7 per cent in February, much higher than analysts had expected, as the global economic crisis began to take its full toll on the country's export sectorSource: Financial Times - US homepage | 11 Mar 2009 | 5:27 am Prosecutors probe Merrill's early bonusesNew York prosecutors are investigating whether the early payment of bonuses at Merrill Lynch last year gave the bank's traders an incentive to mark down the value of their trading positions in the last days of DecemberSource: Financial Times - US homepage | 11 Mar 2009 | 4:20 am At least 11 killed in Alabama shooting spreeAt least 10 people including the suspected gunman and his mother were killed in a shooting spree and car chase in southern AlabamaSource: Financial Times - US homepage | 11 Mar 2009 | 4:18 am Get Ready: Your Fund Wants to 'Friend' You (On the Street)At a time when our president refuses to relinquish his BlackBerry, and CEOs twitter their companies’ latest news, it was bound to happen: Your fund manager wants to be your Facebook friend. Whether you “accept” or “ignore,” you’d better get used to it: Fund companies, asset managers and brokerage firms are starting to embrace so-called Web 2.0 strategies — social networking, podcasting, interactivity. California-based asset manager PIMCO has a Facebook page (and 65 “fans”). Schwab has developed a web site specifically for younger investors and advertises it via Internet TV channels. Vanguard is podcasting, and earlier this year, Fidelity revamped its web site to highlight resources and tools more than funds and brokerage products. Established investors may never notice the changes. But the firms are hoping one group in particular will: younger investors. After years of ignoring Generations X and Y in favor of their wealthier Boomer parents, firms are starting to shift at least some of their attention. That’s because, for the first time in recent memory, people under 40 have enough money to register as prospective clients. More 25-to-40 year-olds have six-figure incomes than people over 55 do, says Ilkay Can, the director of acquisition at Schwab: “There’s a lot of potential there.” And it’s a market that’s relatively easy to reach. The cost of establishing a presence on Facebook, recording a podcast, or posting an investing video on YouTube is negligible, if not completely free. But it’s going to take more than a friend request to woo Gen X and Gen Y, says Anurag Heda, from financial services consulting group Kasina. As a group, younger investors prefer to cull information from different sources, rather than relying on a single expert. (See: the new Fidelity.com, which runs content from several independent media outlets, including SmartMoney.) On the other hand, Heda says, “There’s nothing to prevent someone from going to the site, reading, and leaving.” Maybe so, says Fidelity’s Sean Belka, who runs the firm’s interactive content services group. Even so, he says, “our goal is to make investors successful: If they’re successful, we’ll have more assets to manage.” And of course, notes Heda, by establishing itself as an omnibus resource, Fidelity makes itself more central to an investor’s life. But there is one Web 2.0 feature you won’t see in investing’s virtual world: chat rooms and forums. Firms are already worried about compliance issues, and anything that could be seen as a recommendation or tip comes under scrutiny. Rather than moderate unruly bulletin boards, most firms have opted out entirely. 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 | 11 Mar 2009 | 4:00 am The Tax-Smart Way to Lend to Loved Ones (The Tax Guy)Helping out a family member by loaning them money is a noble deed. But did you know you can (and should) get a little something out of the deal, as well? Here's how you can lend to loved ones the tax-smart way. Charge IRS-Approved Interest Rate for Best Tax ResultsIf you make a loan to a family member and charge zero interest, you may face some unfavorable and complicated tax rules (more on this later). To avoid these tax-law complications, you can charge an interest rate that is equal to the IRS-approved applicable federal rate (AFR) or higher. The good news is that AFRs are incredibly low right now. So you can sidestep messy tax rules without having to charge your family member much interest. Currently, the AFRs for term loans -- which means loans with a defined repayment schedule or a specific balloon payment due date are as follows (based on semiannual compounding): * 0.72% for “short-term” loans of up to three years. * 1.93% for “midterm” loans over three years, but not over nine years. * 3.49% for “long-term” loans over nine years. AFRs are updated monthly in response to ever-changing bond market conditions. Today’s super-low AFRs reflect the current super-low rate environment, which may not last much longer. AFRs for each month are published in Internal Revenue Bulletins and can be found at IRS.gov. With a term loan, the AFR on the month you make the loan applies for the entire term. The Tax-Smart Strategy in ActionSay you want to lend $50,000 to your adult son so he can buy his first home at a price that seemed inconceivable a year or two ago. You could make a nine-year term loan with a balloon repayment at the end and charge the midterm AFR, which right now is only 1.93%. Your son can then pay that super-low rate for the entire nine years. Likewise, you can extend the term loan to 15 years and charge interest equal to the long-term AFR, which is only 3.49%, and your son can pay that low rate for the entire 15 years. On your side of the deal, you must include the interest income on your Form 1040. On your son's side of the deal, he can deduct the interest as qualified residence interest, as long as the loan is secured with his home (a relatively simple legal procedure). Otherwise, your son generally can’t deduct the interest. One trap to avoid: If you make a demand loan (one where you can demand repayment at any time), as opposed to a term loan, the AFR is not fixed in the month you make the loan. Instead, you must charge a floating AFR based on ever-changing short-term AFRs. So if you believe (as I do) that interest rates will eventually go higher and you want to offer a great interest rate to your borrowing family member, you’ll want to make a term loan. Why You Should Steer Clear of Interest-Free LoansInsist on making a totally interest-free loan to a family member, and prepare for the possibility that you'll get hit with the dreaded below-market interest rules. If you do, you must follow complicated rules to calculate imaginary interest payments from the borrower to you. Then you have to pay real, live income taxes on the imaginary interest. Those imaginary interest payments can also trigger imaginary gifts from you to the borrower, which may eat into your valuable federal gift and estate tax exemptions. Sound crazy? Yes. But I didn’t make these rules. Your beloved Congress did. For loans under $100,000, there are some exceptions to the below-market loan rules. But the preferable approach is to avoid them entirely by charging an interest rate equal to the AFR. Plus, I think it’s best to charge some interest on family loans, just to keep the arrangement on a business-like footing -- and help you avoid some unnecessary grief. Put It All in WritingLast but not least, put the loan in writing to make sure the IRS (and the borrower, too) will respect the deal as a loan rather than a gift. This is easy to accomplish because several online services offer do-it-yourself loan documents for just a few bucks (for instance, check out www.nolo.com). I also advise collecting loan interest payments at least semiannually and principal payments promptly when due. That shows you’re serious about getting your money back -- with interest (albeit at a very favorable rate). Follow these simple precautions, and you can give your family-member borrower some pretty great loan terms while keeping the IRS off your back. 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 | 11 Mar 2009 | 4:00 am 5 Stocks Having a Great 2009 (Screens)Stockholders ended Tuesday slightly less miserable than a day before. The S&P 500 index jumped 6%, leaving it down 20% for the year. Some well-positioned investors have been celebrating all year, though. Here’s a quick look at some stocks that were already gaining and why, and whether it’s too late to buy. Activision Blizzard (ATVI) stock is up 22% year to date. The videogame publisher is beating sales and earnings forecasts. In fact, industrywide sales of console games have grown at double-digit percentages of late, suggesting games might be less economically sensitive than previously thought. Wedbush Morgan analyst Michael Pachter wrote in a March 2 client note, “Most hardcore videogame consumers are either ignorant or apathetic about current economic conditions.” Maybe, but another possibility is that the newly jobless are devoting more time to games, or that games simply offer cheaper entertainment than concerts, sporting events, skiing and so on. Activision owns hit game franchises like "Guitar Hero" and "Call of Duty," and its late-2007 merger with Blizzard gave it a cash-generating machine in "World of Warcraft," an online game whose 11.5 million subscribers pay ongoing fees. Activision might be leaning too heavily on its winners; analysts say it has as many as five "Guitar Hero" releases planned for this year. But it also has $3 billion in cash with which to fund in-house game development or buy promising outside titles. Shares look reasonably priced if not discounted at 16 times forecast 2009 earnings. In February drug maker Mylan (MYL) topped Wall Street’s fourth-quarter earnings estimate by a mocking 86%. Then its chief executive and a director together spent $700,000 on shares. The stock is up 23% so far this year, although it still trades at little more than half what it fetched three years ago. Shares likely suffered last year because of the company’s ambitious debt load, the result of its 2007 acquisitions of the generics division of Germany’s Merck KGaA (no relation to the U.S. company that just swallowed Schering-Plough (SGP)) and India’s Matrix Laboratories, an active ingredient specialist. While Mylan owes more than $5 billion, it’s expected to generate $1 billion in free cash over the next two years, and its first major debt repayment of $600 million doesn’t come due until 2012. Shares go for 12 times earnings — cheap, considering earnings per share are growing faster than 25% a year. Finally, Family Dollar (FDO) stock is up 20% this year, as shoppers have forsaken many retailers but have flocked to deep discounters. Sales at longstanding stores in the company’s most recent quarter grew 6.4%, while those for many other retailers shrank by as much or more. Management over the past year has nimbly lightened up on discretionary items and leaned more on consumables, thereby avoiding the heavy discounting that many retailers have been forced into. I’m not sure 16 times forecast earnings is a bargain right now for a variety store, even a top-performing one. But then, Family Dollar has topped earnings estimates every quarter since the recession began. Have a look if you like at these and other recent outperformers in the table below.
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If you haven’t had the credit limit cut on your credit card recently, count yourself lucky. Risk-averse card issuers are getting slash happy. And while many cardholders gripe that such cuts slice razor-close to their balance amounts, for an unfortunate few the cuts go far deeper: below what they currently owe.
Under different circumstances, David Chaplin-Loebell wouldn’t have minded that American Express (AXP) cut his unlimited credit line to just $5,000. Except that when AmEx reduced his line in October, he had an outstanding balance of $10,000. “I found out by having a business purchase declined,” he says. Repeated calls to AmEx failed to yield an answer about why the cut was made. Chaplin-Loebell, who lives in Philadelphia, is now paying the balance under his regular card terms, and presumes the line will free up for new purchases once he’s below the limit. “For now, they’ve essentially frozen the account,” he says, leaving him to juggle business expenses on his personal cards. American Express did not respond to requests for comment.
Nasty as it may be, the practice of cutting credit lines below the balance is legal -- at least, for now, says Chi Chi Wu, a staff attorney for the National Consumer Law Center, a consumer advocacy group. Federal Reserve rules requiring lenders to give cardholders 45 days notice before reducing a credit line to the point that it would trigger penalties won't go into effect until July 2010. “[Until] then, there are no federal protections,” says Wu.
Congress is also hoping to rein in unscrupulous credit-card practices. In February, Sen. Chris Dodd (D., Conn.), chairman of the U.S. Senate Committee on Banking, Housing and Urban Affairs, reintroduced the Credit CARD Act, which among other things, offers cardholder protections like the ability to pay under the existing terms if an account is closed and requiring issuers to lower penalty rates within six months once a cardholder gets back on track with payments. Earlier this month, the House Committee on Financial Services chairman Barney Frank, announced a series of four hearings that will include discussions about credit card reform.
SmartMoney.com contacted both committees to see if they were aware of issuers’ practice of cutting credit lines below balances, and if they planned to address it in upcoming hearings. Neither responded to requests for comment.
The motivation among issuers to make such deep cuts that they plunge below a cardholder's balance amount isn’t very clear. Usually, issuers cut credit lines to reduce outstanding liabilities -- they sometimes may even chase the balance on riskier accounts with further limit cuts as cardholders pay down debts, explains Bill Carcache, an analyst with investment bank Fox-Pitt Kelton. But cutting below the balance doesn't reduce an issuer's liability: The cardholder still owes the outstanding debt.
One possibility is that this is yet another attempt by card issuers to get consumers to close their accounts (while bringing in a little fee income in the short term), says Dennis Moroney, research director and senior analyst for consulting firm Tower Group. “I can’t rationalize in my mind what other motivation there would be,” he says.
Paul Pensabene of Saratoga Springs, N.Y., received a statement from HSBC on Dec. 8 that said he had a $359.99 balance and remaining available credit of $8,640. But when he went online to pay the bill several days later, his online account showed that same balance put him over his newly-reduced credit line of $300. And that didn't include the $35 over-limit fee. Pensabene grappled with customer service until they agreed to remove the fee, and then paid the balance in full. “All I could think was, ‘Good lord, what if this is happening to someone that couldn’t pay their balance off in one shot?’” he says. “They’d end up in default with these fees piling up.”
HSBC declined to comment on individual cardholder accounts. Spokeswoman Cindy Savio says the issuer has tightened its credit standards based on the economy. “As we have previously stated, in an effort to reduce credit risk and refine strategies for our card business, we have tightened credit standards, reduced or canceled higher risk credit lines, and closed a number of inactive accounts,” she says.
While the fees, frozen accounts and default interest rates resulting from credit-line cuts can sting your finances, they can do some serious long-term damage to your credit score. Your credit utilization ratio -- the total amount of debt you owe in relation to the amount of credit available to you -- accounts for roughly 30% of your score. A credit line cut has the potential to decrease your score by 50 points or more if you don’t have much other available credit, says Craig Watts, spokesman for FICO (FIC), the company that calculates and issues the credit score that most lenders use.
Even cuts that are close to the balance have the potential to devastate if they’re not caught quickly. Luckily for Carol Gressett of Decatur, Miss., she noticed the reduction in her Discover-branded Sam’s Club card limit just days after it happened. The limit was cut to within $100 of her $3,000 balance. The official letter notifying her of the reduction arrived three weeks later. “We could easily have gone over if I hadn’t been paying attention,” she says.
(A Discover (DFS) spokesperson says GE Money issues the cards, and so is responsible for managing credit lines. GE Money did not respond to requests for comment.)
For more on our series about credit-card issuers' recent moves, read:
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.
The news reports that Citigroup closed up 38% today made things seem maybe better than they are. Shares are still worth less than a cup of coffee, because 38% of a small number is still a small number.
Percentages are a fine way to report things for small jumps up and down. But if a stock has dropped 98% from its peak (like Citi has) then even a 98% jump doesn't get you back anywhere close to where you started. (You'd still be out 96 cents on the dollar.)
I dunno, these are strange times. The usual rules of how we report things kind of don't apply.
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$$$ Brokers Flee Smith Barney [The Deal]
$$$ Madoff Victim Speaks [Dbook]
$$$ Jim Cramer set to appear on 'The Daily Show' Thursday [LATimes via clusterstock]
$$$ Paulson Down. [zero hedge]
No comment.
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The moves in financial markets can be impossible to figure out. Today, Citigroup was the hero of the stock market, jumping 35 percent, and it helped the Standard and Poor's 500-stock index shoot six percent higher.
And the reason: Citigroup said it was profitable for the first two months of the year. Businesses should be profitable -- right? For Citigroup, this is the first positive piece of news about profits since 2007. It has reported losses for the past five quarters in a row and recently was being talked about as a candidate for nationalization.
That the market rose so steeply on the same day the Chairman of the Federal Reserve, Ben Bernanke, called for more stringent regulation of the banking industry also defies financial market logic. Usually markets react badly to being told what to do, much like your average teenager. But it's questionable if logic and markets should even exist in the same sentence.
Obviously Citigroup isn't out of the woods yet. House prices keep falling and default rates are rising, yet today the market feels bullish on Citigroup, the bank it once abandoned.
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We've received a bunch of emails and comments that there was an attempted suicide at the MetLife building above Grand Central (home to Barclays, among others) approximately 30 minutes ago. There are apparently a bunch of cops on the lower roof of the north side of the building. That's all we've heard, and don't see it reported anywhere. We hope it's not true, though it sounds like it might be.
AP - Wall Street has had its best rally since late November after some good news from Citigroup. The company said it operated at a profit during the first two months of the year. That energized financial stocks and in turn, the entire market. Many analysts are still cautious noting that Wall Street has seen many blips higher since the credit crisis and recession began.
AP - Wall Street has had its best rally since late November after some good news from Citigroup. The company said it operated at a profit during the first two months of the year. That energized financial stocks and in turn, the entire market. Many analysts are still cautious noting that Wall Street has seen many blips higher since the credit crisis and recession began.
We just visited the Financial Times, where Adam interviewed Martin Wolf about who we should blame for the crisis. The interview will be on tomorrow's podcast along with some discussion of the FT's popular Economists' Forum. For PM readers who've never heard of it, Wolf describes the forum as a place where a number of economists and others gather to share different angles on the current crisis. Today's piece comes from Ricardo Caballero, head of the department of economics at Massachusetts Institute of Technology:
No matter how many inefficient contortions and conversions individual financial institutions may do, until the problem of systemic panic is resolved, it is only a matter of time until the next crisis blows up in our faces. Those that think that solving the problems of one bank, by nationalizing it or otherwise, will restore confidence, fall into an extreme fallacy of composition: What may be the right solution for an isolated case, is not for a systemic problem.
Read the full essay here.
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Steve was kind enough to take some time out of his day to ruminate on the financial crisis over a seafood platter. In summary: This blows, thanks to ratings agencies and mark-to-market accounting, but Geithner is on the case, so don't worry.
Private equity company Blackstone Group LP (BX.N) CEO Stephen Schwarzman said on Tuesday that up to 45 percent of the world's wealth has been destroyed by the global credit crisis."Between 40 and 45 percent of the world's wealth has been destroyed in little less than a year and a half," Schwarzman told an audience at the Japan Society. "This is absolutely unprecedented in our lifetime."
45 percent of world's wealth destroyed: Blackstone CEO [Reuters]
The spike marks the crisis. Alan Cordova/NPR
Last October, as credit markets reeled from the bankruptcies of Lehman Brothers and Washington Mutual, the government takeover of AIG and the eleventh-hour acquisition of Merrill Lynch by Bank of America, new data shows that record amounts poured into the U.S. Treasury. The cash came from government and private sources overseas, all seeking to snap up Treasury notes, or T-bills. They spent some $147 billion as the U.S. rushed to finance the bailouts.
T-bills represent debt issued by the U.S. Treasury that comes due in under a year.
They are one of the debt instruments with which the federal government borrows money. In order to reward the bill-holder (who is in essence a lender), they are sold discount: a note paying $100 in six months, for example, may be purchased for $99.
They are considered the world's safest investment because most investors hold two belief, about the dollar and the U.S government.
First, investors consider the dollar the world's most stable currency. Unlike, say, the
Argentine peso, the dollar is backed by U.S. government, which maintains a large supply of liquid financial reserves. By definition, reserves can't be your own currency. Instead, they're usually a combination of valuable commodities like gold and foreign currencies. The Federal Reserve can sell these if it thinks the dollar is losing value too quickly, and use the profits to buy up greenbacks. With fewer dollars in circulation, the basic principle of supply-and-demand takes over, and the value climbs.
Second, investors consider the U.S. government the world's most stable lender. They expect all other entities -- whether corporations or foreign governments -- will default on their debt before the U.S. government. This has a lot to do with Belief #1 (the soundness of the dollar), but it is also shaped by the outsized influence of American consumers on the global economy.
For these reasons, compared to other investments, T-bills deliver the lowest rate of return for borrowers. An investor pays the going rate for a $100 six-month T-bill, say, $99.53. Six months later, the government hands back $100. If issued by another party, the same size of note, for the same duration, will cost less, say $98. The return would be $2.
Nevertheless, in October investors were so worried about every other form of U.S. government debt -- like bonds for building bridges and roads --that they sought out T-bills. This is known as a "flight to quality."
In this chart, you can see flow of money into and out of the U.S. The red line tracks people buying T-bills. The red spike marks record investing in T-bills. The yellow line marks another record, as foreigners put money into U.S. savings accounts. The blue and green lines tanked, going negative as people made a "flight to quality."
What investors dumped to buy U.S. T-bills, in red Alan Cordova/NPR
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It seems some of us may need a stimulus to return to healthy eating.
Fast-food giant McDonald's said yesterday its U.S. same-store sales increased 6.8 percent in February, excluding the calendar shift from last year's leap year. Worldwide same-store sales grew 5.4 percent by the same measure. McDonald's chalks the U.S. growth up to "the strength of the chicken line-up, the core menu, particularly the Quarter Pounder, as well as beverages and our market-leading breakfast."
Has your appetite for the fast stuff changed with the economic downturn?
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Seen in Soho. Dodd Loomis
Dodd sends this picture from a sample sale in Soho. He writes:
I was dragged by my girlfriend to a kitschy boutique, where people who received "personal invitations" could shop for hip clothing at bottom barrel prices. Well, slap me in the mouth and call me Suzy... this place was bananas. After a 1/2 hour wait just to get in the place, I then had the pleasure of scuffling with over-eager skinny-pants hipsters clutching arms of sweaters, coats & pants for $110 T-shirts and/or $400 sweaters. These people couldn't get it out tha door fast enough. Just buckets of cash being dumped on the register. All I was thinking was "Recession Reshmeshon". I had to snap pictures of fiscal feeding frenzie for proof.
After the jump, a gloomy retail scene.
Seen on the Upper East Side. Dodd Loomis
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The sub-prime flu attacking the world's largest economies has taken another victim. Brazil's GDP data, released this morning, showed the economy shrank nearly 4 percent between September and December 2008, the most since records began in 1996.
But Brazilians might beat their own record in the first quarter of 2009, as a thrifty American consumer and less demand for oil have hit Brazil hard. Overall exports fell 26 percent in the first two months of this year, and they make up one-third of GDP.
The Brazilian stock market, called the Bovespa, has rallied on the back of this dreadful GDP data. Sound counterintuitive? Shrinking GDP could force the Brazilian central bank to cut interest rates, and stock markets usually like lower interest rates.
The Bovespa has posted a substantial gain this year -- yes, I said gain -- it is up nearly 20 percent since the start of the year. But if this recession gets any deeper, the Bovespa might start to show signs of strain as investors bail out of this last bastion of hope for the global economy.
At the start of this crisis the BRICs -- Brazil, Russia, India and China -- looked like they might be able to avoid the calamities facing Europe and the U.S. Not anymore.
China and India have announced stimulus packages, a la the U.S., to boost their economies, and Russia is beginning to realize the perils of relying too heavily on oil revenues. This adds to the evidence supporting the gloomy outlook for the global economy released yesterday by the World Bank.
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One of my favorite data points came in today: The "quits rate" dropped .1 percent in January, says the Bureau of Labor statistics. That means fewer people are voluntarily leaving jobs -- whether to sail around the world or to take another gig. In this lay-off economy, it appears, fewer of us are willing to trade seniority in a current job for opportunity in a new one. From the BLS:
The quits rate can serve as a barometer of workers' willingness or ability to change jobs. Although the quits rate was essentially unchanged in January at 1.5 percent, the rate was at the lowest point in the 8-year series.
Quits have been trending downward since December 2006, declining by 1.2 million, or 37 percent, in that time. Comparing January 2009 to January 2008, the quits rate was significantly lower for total nonfarm and total private, in most industries, and in all four regions. The rate was essentially unchanged in mining and logging; transportation, warehousing, and utilities; information; and other services. The rate did not rise significantly in the past 12 months in any industry or region.
On the other hand, they're jamming the roads for a job fair in Greater Cleveland -- where the unemployment rate has been outpacing the national average.
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I’m currently visiting Dubai, a beautiful and fascinating place. A few days ago, a group of us decided to visit the cocktail lounge in the Burj al Arab, which advertises itself as the world’s only seven-star hotel.
It is shrouded in mystique. In order to get in, you need to make reservations, adhere to a dress code, and spend at least 275 dirhams (roughly $83) per person on food and drink. The reservation receipt—also required to get in—said that photography was strictly prohibited.
With that kind of Beverly Hills exclusivity, the Burj al Arab experience must be something elusive and special, right? Not exactly. True, the hotel is gorgeous, located on its own island, with 15-foot-high fish tanks, mosaic floors, and a stunning interior. But the seven-star claim is a gimmick, and here’s why:
-Mediocre service. When our car arrived, porters opened the car doors for us, but then stood back in a cluster. Nobody greeted us, welcomed us, or opened the hotel doors for us. If the place was truly seven stars, someone would have been shining our shoes. The Lonely Planet guide claims that the porters—who are mostly immigrants—adhere strictly to their orders because breaking rules could mean getting fired. Someone showed these guys the ropes, but didn’t inform them that seven stars means adaptable, personalized service. So they open car doors, but shy away from opening hotel doors for you. It’s a part of their template.
-Dirty dishes. It’s true. Two of our dishes came with thin layers of crust on them. This is expected at a motel, but a seven-star hotel?
-The top-floor bar is something you could find in Las Vegas. And Las Vegas doesn’t have any seven-star hotels. It’s fun, and classy enough, with incredible views of the city, fabric doilies, chrome trash cans, red leather couches, and ice buckets the glowed soft blue neon. But fun features are standard at many cosmopolitan hotels. The service was good, but not excellent. The setting was crowded. The drinks were creative and tasty, but, save for the ones containing absinthe and other exotic liquors, not terribly exclusive.
That alone is enough nudge the hotel back down to six (who came up with anything more than five stars, anyway?) A seven-star hotel should have only the most exclusive treatment for people visiting any of their establishments–not just hotel guests.
The Burj al Arab, stunning though the interior and building are, is a four-star hotel masquerading as something deserving more. Its exclusive location, barriers to entry (price, reservations, dress codes, etc.), status as a Dubai landmark, and unique rating disguise the type of service and interior you could find in many other well-to-do major city. Perhaps guests have a different experience, but I feel safe concluding that its seven stars are a gimmick.
A Thomas Cook travel agent booked a client on a trip to San Jose, Puerto Rico instead of Costa Rica, where the client requested to go. From the UK Telegraph:
Samantha Lazzaris booked a trip of a lifetime to Central America but ended up in the US territory 1,300 miles away instead. Miss Lazzaris, 33, from Bristol, did not realise she was in Puerto Rico until she landed on the island last month and boarded a taxi, and the driver told her she was in the wrong country.
The holistic therapist said: “I asked the taxi driver to take me to this hotel I’d pre-booked, he looked in amazement, speechless, then laughed and said, ‘This is not Costa Rica. It’s Puerto Rico’.
“I didn’t believe him. I was in shock. I looked around the airport, saw posters of Puerto Rico everywhere, and thought: What am I going to do? Where is Puerto Rico? Where am I?”
Miss Lazzaris had to fork out £800 on three extra flights - losing four days of her holiday - to get to her intended destination. It transpired travel agent Thomas Cook had used the booking code for San Juan, capital of Puerto Rico, instead of San Jose, capital of Costa Rica, when Ms Lazzaris bought the £500 return ticket last November.
Thomas Cook confirmed later it had apologised to Miss Lazzaris and will refund her for the additional flights incurred, two nights missed accommodation and a further undisclosed amount as a gesture of goodwill.
Apparently, the airplane codes for both San Joses are just one letter apart. It’s a human mistake that turned out to reflect quite badly on Thomas Cook. The best thing they could do now, for PR’s sake, is compensate the victim handsomely, then hire her as a spokesperson for a humorous marketing campaign.
AFP - The global economy could contract for the first time in 60 years in 2009, International Monetary Fund Managing Director Dominique Strauss-Kahn warned on Tuesday.
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