Screen Survivors

Opening Bell: 03.27.09 President To Have Finance Party (Bloomberg) President Obama is inviting roughly the entire banking world to Washington today to get their input on rebuilding the economy and the new PPIP initiative - I think hopes are high that he can come out at the end of the day with the confirmation that some of the major banks will in fact be taking part in this (well, and further, think it's a good idea). ""For the economy to recover, for the stimulus to work, Main Street and Wall Street have to work hand in hand," said Rob Nichols, a former Treasury official and now president of the Financial Services Forum in Washington." Barclays Unlikely to Need More Capital (WSJ) Congrats on that. Morgan Stanley Recovers Ground In M&A Rankings (Reuters) "Morgan Stanley ranked first in the closely watched M&A rankings, or league tables, of investment banks in the first quarter, according to preliminary data from Thomson Reuters, reversing its fortunes after it missed out last year's biggest deal -- the $113 billion spin-off of Philip Morris International JPMorgan Chase & Co (JPM.N) and Citi held onto their second and third spots respectively." (Goldman was fourth). Ackman's Ongoing Target Struggles (Reuters) "In a letter dated Thursday and filed with the U.S. Securities & Exchange Commission, Ackman wrote to Target Chairman and Chief Executive and Gregg Steinhafel to say he disagreed with the size of the board. We "have found no disclosure to the effect that the size of the Target Board has been changed from 13," he wrote. Ackman noted that although former Chairman Bob Ulrich had recently resigned, the board "does not automatically shrink as a result of a resignation; rather, a vacancy is created." Ackman said if the company does not nominate a fifth director to fill a 13-member board, the issue should be jointly submitted for binding arbitration." Washington's Inside Man At AIG (WSJ) "AIG has paid lawyer James Cole and his firm, Bryan Cave LLP, about $20 million to oversee business practices at the insurer, according to people familiar with the matter. His reports on the company's progress, periodically delivered to federal regulators since 2005, aren't public. Mr. Cole was installed inside AIG as a monitor, or independent consultant, as part of a $126 million settlement struck in November 2004 between AIG and the Justice Department and Securities and Exchange Commission." Czech PM Says AC/DC Was Behind "Road To Hell" Comment (Reuters) Can't make this shit up: "Ousted Czech Prime Minister Mirek Topolanek says he was inspired by the rock group AC/DC when he mocked U.S. President Barack Obama's economic stimulus plans as a "road to hell." Topolanek criticized Washington's anti-crisis spending in a speech to the European Parliament on Wednesday. "AC/DC played here (in Prague) last week. And their cult song 'Highway to Hell' might have led me in that very improvised speech to use the phrase 'road to hell'," Topolanek was quoted by daily Lidovy Noviny as saying on Friday." Source: Dealbreaker | 27 Mar 2009 | 1:03 pm Futures lower as investors assess surge NEW YORK (Reuters) - Stock index futures pointed to a lower open on Friday as investors reassessed a recent surge that has March on track to see the biggest monthly percentage gain since 1974. Source: Reuters: Business News | 27 Mar 2009 | 12:21 pm Stocks face a tough start U.S. stocks were poised for a lower start Friday as investors pulled back after the recent surge on Wall Street. Source: Business and financial news - CNNMoney.com | 27 Mar 2009 | 12:20 pm Futures lower as investors assess surge (Reuters) Reuters - Stock index futures pointed to a lower open on Friday as investors reassessed a recent surge that has March on track to see the biggest monthly percentage gain since 1974. Source: Yahoo! News: Stock Markets News | 27 Mar 2009 | 12:16 pm Futures lower as investors assess surge (Reuters) Reuters - Stock index futures pointed to a lower open on Friday as investors reassessed a recent surge that has March on track to see the biggest monthly percentage gain since 1974. Source: Yahoo! News: Business | 27 Mar 2009 | 12:16 pm Interest rates could increase 'with vigour' warns chief economist The Bank of England's chief economist has warned that policymakers will hike interest rates back when needed. Source: Telegraph Finance | 27 Mar 2009 | 12:11 pm Bargains in the REIT Wreckage (BusinessWeek Online) BusinessWeek Online - After a terrible 2008, real estate investment trusts are having an awful 2009. The SPDR Dow Jones Wilshire REIT (NYSEArca:RWR - News) exchange-traded fund, which tracks 82 REITs, has dropped 35% after plunging about 45% in 2008. On Mar. 19, Moody's downgraded General Growth Properties to "C," its lowest rating above default, prompting another wave of selling. Source: Yahoo! News: Business | 27 Mar 2009 | 12:08 pm New Report: Obama Budget Proposes Direct College Aid for 521 More Students in Hawaii President's Budget Proposals Would Transform Federal Financial Aid System So More Families In Hawaii Can Afford College HONOLULU, March 27... Source: RSS feed - channel BNewsBusiness | 27 Mar 2009 | 12:07 pm New Report: Obama Budget Proposes Direct College Aid for 451 More Students in Delaware President's Budget Proposals Would Transform Federal Financial Aid System So More Families In Delaware Can Afford College DOVER, Del., March 27... Source: RSS feed - channel BNewsBusiness | 27 Mar 2009 | 12:07 pm Dollar higher versus euro (AFP) AFP - The dollar rallied against the euro in trade here Friday as European stock markets weakened. Source: Yahoo! News: Stock Markets News | 27 Mar 2009 | 12:05 pm New Report: Obama Budget Proposes Direct College Aid for 819 More Students in South Dakota President's Budget Proposals Would Transform Federal Financial Aid System So More Families in South Dakota Can Afford College PIERRE, S.D., March 27... Source: RSS feed - channel BNewsBusiness | 27 Mar 2009 | 12:05 pm New Report: Obama Budget Proposes Direct College Aid for 3,474 More Students in Oklahoma President's Budget Proposals Would Transform Federal Financial Aid System So More Families in Oklahoma Can Afford College OKLAHOMA CITY, March 27... Source: RSS feed - channel BNewsBusiness | 27 Mar 2009 | 12:05 pm New Report: Obama Budget Proposes Direct College Aid for 4,044 More Students in Colorado President's Budget Proposals Would Transform Federal Financial Aid System So More Families In Colorado Can Afford College DENVER, March 27... Source: RSS feed - channel BNewsBusiness | 27 Mar 2009 | 12:03 pm European shares ending week lower (AFP) AFP - Europe's main stock markets fell on Friday following a late sell-off in Asia which came despite an overnight rally on Wall Street. Source: Yahoo! News: Stock Markets News | 27 Mar 2009 | 12:02 pm New Report: Obama Budget Proposes Direct College Aid for 9,172 More Students In Michigan President's Budget Proposals Would Transform Federal Financial Aid System So More Families In Michigan Can Afford College LANSING, Mich., March 27... Source: RSS feed - channel BNewsBusiness | 27 Mar 2009 | 12:02 pm Mozambique coal project launched Brazilian mining company Vale launches a $1.3bn coal mining project in Mozambique. Source: BBC News | Business | World Edition | 27 Mar 2009 | 12:01 pm UK equity funds come in all shapes and sizes Trusts focusing on UK shares are likely to be the first port of call for players aiming to win the £25000 first prize in our Fantasy Fund Manager game. Source: Telegraph Finance | 27 Mar 2009 | 12:00 pm New Report: Obama Budget Proposes Direct College Aid for 640 More Students in New Hampshire President's Budget Proposals Would Transform Federal Financial Aid System So More Families in New Hampshire Can Afford College CONCORD, N.H., March 27... Source: RSS feed - channel BNewsBusiness | 27 Mar 2009 | 12:00 pm CIG Corp. to Discuss Financial Outlook in a Web Conference SOUTHFIELD, Mich., March 27 /PRNewswire/ -- CIG Corp. will be holding a web conference to discuss our 2009 Financial Outlook. Managing Principal, Osman Minkara and Portfolio... Source: RSS feed - channel BNewsBusiness | 27 Mar 2009 | 12:00 pm Sbarro, Inc. Amends Senior Credit Facilities MELVILLE, N.Y., March 27 /PRNewswire/ -- Sbarro, Inc. (the "Company") today announced that it has entered into an amendment to its senior secured credit facilities... Source: RSS feed - channel BNewsBusiness | 27 Mar 2009 | 12:00 pm Danaher Schedules First Quarter Conference Call WASHINGTON, March 27 /PRNewswire-FirstCall/ -- Danaher Corporation (NYSE: DHR) announced today that it will webcast its quarterly earnings conference call for the first quarter... Source: RSS feed - channel BNewsBusiness | 27 Mar 2009 | 12:00 pm Top 10 Analyst Upgrades & Downgrades (AMGN, COP, DD, GENZ, GS, MON, MOS, BBY, PBR, VMW) These are ten of the top impact research calls with upgrades and downgrades from Wall Street early this Friday morning: Amgen (AMGN) Raised to Overweight at JPMorgan. ConocoPhillips (COP) Raised to Buy at Goldman Sachs. DuPont (DD) Started as Buy at UBS. Genzyme (GENZ) Started as Buy at Piper Jaffray. Goldman Sachs (GS) Started as Outperform at FBR. Monsanto (MON) Started as Buy at UBS. Mosaic (MOS) Started as Buy at UBS. Best Buy (BBY) Removed from Goldman Sachs Conviction Buy List, but maintained as “Buy.” Petrobras (PBR) Cut to Hold at Deutsche Bank. VMware (VMW) Cut to Sell at Auriga. JON C. OGG March 27, 2009 Tagged: AMGN, BBY, COP, DD, GENZ, GS, MON, MOS, PBR, VMW Source: 24/7 Wall Street | 27 Mar 2009 | 11:59 am House price decline accelerates House prices are falling even faster than before in England and Wales, according to the Land Registry. Source: BBC News | Business | World Edition | 27 Mar 2009 | 11:55 am Wealthworkout: The best paying savings accounts Higher rates can be found on accounts where savers give notice to take money out. Source: Telegraph Finance | 27 Mar 2009 | 11:53 am Johnson Controls to cut more jobs, close 10 plants NEW YORK (Reuters) - Auto parts maker Johnson Controls said on Friday it would cut its work force and close 10 plants as part of a new round of restructuring, for which it will take a pre-tax charge of up to $215 million. Source: Reuters: Business News | 27 Mar 2009 | 11:50 am Britons' savings rise as slowdown bites The credit crunch is encouraging Britons to save more money than ever, according to monthly research by the National Savings & Investments (NS&I). Source: Latest Business News from Times Online | 27 Mar 2009 | 11:49 am Deflation stalks Japan, resentment rises before G20 (Reuters) Reuters - Japan slipped to the brink of deflation and inflation in Europe slid closer to zero, underlining a threat to the world economy before next week's G20 summit which is supposed to produce a cure for the crisis. Source: Yahoo! News: Business | 27 Mar 2009 | 11:47 am Deflation stalks Japan, resentment rises before G20 TOKYO/BERLIN (Reuters) - Japan slipped to the brink of deflation and inflation in Europe slid closer to zero, underlining a threat to the world economy before next week's G20 summit which is supposed to produce a cure for the crisis. Source: Reuters: Business News | 27 Mar 2009 | 11:47 am Bank of England chief economist Spencer Dale expects signs of recovery at end of 2009 The UK economy will probably recover at the end of 2009 but the risks are on the downside and policymakers may need to take more action Bank of England policymaker Spencer Dale said. Source: Telegraph Finance | 27 Mar 2009 | 11:44 am Chris Dodd's loyalty test In the U.S. Senate, seniority is all: You wait your turn. No one knows that better than Democrat Chris Dodd, the senior senator from Connecticut. "I went through 28 years of sitting next to people who either had the constitution of mules or great longevity," Dodd told Fortune late one afternoon recently in his arch-windowed office on Capitol Hill. Source: Business and financial news - CNNMoney.com | 27 Mar 2009 | 11:41 am Key Solar Stocks Hit By Downgrades (FSLR, STP, TSL) After the huge run up in solar stocks on Thursday, there are actually several key downgrades this morning.  These are the main ones we have seen so far: First Solar (NASDAQ: FSLR) Cut to Hold at Collins Stewart; stock indicated down 3%. Suntech Power Holdings (NYSE: STP) Cut to Underperform at Oppenheimer; stock down 5% in early indications. Trina Solar (NYSE: TSL) Cut to Underperform at FBR; stock indicated down 2%. JON C. OGG March 27, 2009 Tagged: FSLR, STP, TSL Source: 24/7 Wall Street | 27 Mar 2009 | 11:40 am European markets retreat ahead of US open (AP) AP - European stock markets fell modestly Friday after a mixed performance in Asia as investors booked profits on recent gains ahead of the U.S. open, though reports that British bank Barclays PLC may get the financial all-clear from the country's financial regulator gave the banking sector a boost. Source: Yahoo! News: Stock Markets News | 27 Mar 2009 | 11:37 am Stocks point to lower open ahead of spending data (AP) AP - Wall Street was set to pare its huge gains Friday as investors treaded cautiously ahead of personal spending data. Source: Yahoo! News: Stock Markets News | 27 Mar 2009 | 11:37 am John Lewis fall on late Easter holiday John Lewis today blamed a late Easter holiday for a 13.3 per cent fall in sales across its department stores and Waitrose supermarkets. Source: Latest Business News from Times Online | 27 Mar 2009 | 11:27 am Barclays stress test signals no new funds City watchdog conducts stress test on Barclays' loan book as it weighs up whether bank will join Treasury scheme Source: Financial Times - US homepage | 27 Mar 2009 | 11:23 am UK household savings surge The household savings rate surged in the final three months of last year as worried consumers put more money aside as fears of job losses mount Source: Financial Times - US homepage | 27 Mar 2009 | 11:23 am Tax fears prompt Swiss banks to ban executive travel: report Some of Switzerland’s private banks have banned their executives from traveling outside the country out of fear they could be nabbed by tax authorities as part of a global crackdown on bank secrecy, the Financial Times reports Friday. Source: MarketWatch.com - Top Stories | 27 Mar 2009 | 11:18 am Australian puts defence hurdle in way of Oz Minerals deal with China's Minmetals Australia said a A2.6bn £1.3bn takeover of Oz Minerals by China's stateowned Minmetals cannot go ahead if it includes mines in a military zone. Source: Telegraph Finance | 27 Mar 2009 | 11:14 am China ready to contribute to IMF China is ready to contribute extra funds to the International Monetary Fund, the country's vice premier, Wang Qishan, says. Source: BBC News | Business | World Edition | 27 Mar 2009 | 11:12 am AIG puts up £500m for Canary Wharf tenants AIG, the insurer, has been forced to post more than £500 million as collateral to Songbird Estates, the owner of most of Canary Wharf, to cover possible defaults on rent for offices leased by Lehman Brothers and Citigroup. Source: Latest Business News from Times Online | 27 Mar 2009 | 11:11 am London Markets: Barclays moves higher as London market holds steady Banks move mostly higher in a flat London market, with Barclays a stand-out gainer. Source: MarketWatch.com - Top Stories | 27 Mar 2009 | 11:05 am Barclays 'can pass stress test' Barclays shares have risen on reports saying that the UK bank would not need more money if it joins the Treasury's asset insurance scheme. Source: BBC News | Business | World Edition | 27 Mar 2009 | 11:03 am Outside the Box: Memo to Wall Street: America hates you BOSTON (MarketWatch) -- The New York Times' publication of the resignation letter of American International Group executive Jake DeSantis has garnered a great deal of attention. What I find even more interesting than the letter are the angry responses to it. Source: MarketWatch.com - Top Stories | 27 Mar 2009 | 10:54 am Air France-KLM shares slump on warning Shares of Air France-KLM drop as much as 7% in Paris trade Friday as Europe’s largest airline warns of a loss for this year and next as world trade deteriorates and corporate travel slumps. Source: MarketWatch.com - Top Stories | 27 Mar 2009 | 10:53 am Barack's bankers Why Obama and Wall Street need each other Source: BBC News | Business | World Edition | 27 Mar 2009 | 10:52 am Analysts cautious on big solar stock rally on China subsidy plan A proposed subsidy by China for its solar power industry sparks an eye-popping rally in the sector this week, but some analysts are sounding a note of caution on the run-up. Source: MarketWatch.com - Top Stories | 27 Mar 2009 | 10:51 am President to talk crisis with bank chiefs Read full story for latest details. Source: Business and financial news - CNNMoney.com | 27 Mar 2009 | 10:43 am Obama tax panel on a treasure hunt President Obama has now added tax reform to his to-do list. Source: Business and financial news - CNNMoney.com | 27 Mar 2009 | 10:43 am Jeff Bezos goes to work at warehouse Source: Business and financial news - CNNMoney.com | 27 Mar 2009 | 10:39 am Indications: U.S. stock futures weaker after strong week of gains U.S. stock futures pointed to a weaker start Friday after a week in which equities have already stormed 8% higher amid hopes the economy has begun to stabilize, though a warning from Accenture was a reminder of the tough times in the corporate world. Source: MarketWatch.com - Top Stories | 27 Mar 2009 | 10:38 am WTO warns against protectionism The World Trade Organisation warns in its latest report that a gradual build-up of protectionist measures threatens to strangle international trade and hamper global recovery Source: Financial Times - US homepage | 27 Mar 2009 | 10:33 am Europe Markets: Stocks in Europe turn lower as carriers, techs drop Stocks in Europe turn lower as carriers, techs drop. Source: MarketWatch.com - Top Stories | 27 Mar 2009 | 10:32 am 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 | 27 Mar 2009 | 10:31 am Darling: 'Banks must build trust' Chancellor Alistair Darling has told bankers they need to regain the public's trust to avoid a backlash. Source: BBC News | Business | World Edition | 27 Mar 2009 | 10:23 am A Lucid Moment At GM (GM) GM (GM) management has finally begun to wise up. Even if the government gives it every dime that it asks for and the Administration can bring the UAW and the company’s creditors to their knees, the No.1 US automaker has troubles that can’t be fixed. As GM puts it new restructuring plan together for the Treasury Department, it is becoming terrifyingly clear that US car sales won’t recover this year. They will be worse than in 2008. GM has some advantages as it moves deeper into the year. Thousands of blue collar employees are taking company buyouts, That should bring the company’s cost to breakeven in 2009 down. Press reports say GM has gone back to the drawing board to work on the third version of its restructuring plan since it began the process in January. The view of the future in the new program is grim. It is probably based on the premise that domestic light vehicle sales may be only 10 million this year. GM should probably be considering a number closer to 9.5 million and a further contraction of its market share, but even if it can hold its own, it may not be able to cut enough to make a penny in an increasingly deteriorating environment. GM will have to go back to the government for more money sometime this year. The only question is how much more it will need. Douglas A. McIntyre Tagged: GM Source: 24/7 Wall Street | 27 Mar 2009 | 10:23 am Currencies: Dollar up; German warning pressures euro A budget warning from Germany’s finance minister pressures the euro Friday, while the dollar gaines ground versus most major rivals. Source: MarketWatch.com - Top Stories | 27 Mar 2009 | 10:23 am Stocks Aimed to Open Lower Before Data (Market Update) uuuuuuuuuuuuuuuuuuuuuuu News at a Glance Mr. Pandit Goes to Washington: Obama to meet with banks. Rally Stalls: Stock futures point to lower open Friday. Consumer Update: Spending, sentiment data due out later. Let's Make a Deal: Morgan Stanley tops Q1 M&A rankings. The Lowdown The market stands at the edge of a week in the black even as traders turned bearish early Friday. Stocks looked to open lower, as traders awaited the latest data on consumer sentiment and personal income and spending. Shortly after 7:30 a.m., Dow, Nasdaq and S&P 500 futures were trading below fair value. Heading into today, the Dow stood up 646 points, or 8.9% above last Friday's close. Enthusiasm over a recent streak of better-then-expected economic data and stimulative action by the Treasury and the Federal Reserve helped bring out the bulls. The financial sector could be in play early, as chief executives of the nation's top banks head to Washington to discuss the state of the industry and the future of its regulation with President Obama. Earlier this week, Treasury Secretary Timothy Geithner began outlining reforms to keep tabs on the sector, suggesting the creation of a watchdog agency to monitor banks. In energy, crude oil lost ground ahead of the opening bell. By 7:30 a.m., crude traded down $1.09 at $53.25 a barrel. World markets were steady. In Asia, Japan's Nikkei ended the day down 0.1%, while Hong Kong's Hang Seng picked up 0.1%. In Europe, the U.K.'s FTSE was fairly flat in midday trading. Corporate News Morgan Stanley (MS) took a big leap in the quarterly M&A rankings, claiming the top spot among global advisors on two deals in the pharmaceutical industry worth a combined $110.5 billion, Reuters reported. Morgan advised Wyeth (WYE) as it was taken over by Pfizer (PFE) and Schering Plough (SGP) as it was bought out by Merck (MRK). Swiss banking jobs just got a little less exotic. Private banks have begun instituting a ban on international travel for their senior executives because of concerns that they may be detained for questioning over their accounts, The Financial Times reported. IBM (IBM) is still in talks with Sun Microsystems (JAVA) about a potential deal, but the negotiations could last well into April, Reuters reported, citing an anonymous source. IBM is reportedly still conducting its due diligence. The Economy The February report on personal income and spending is scheduled to be released at 8:30 a.m. by the Commerce Department. Economists expect income to have dipped 0.1% last month, retreating after a 0.4% gain in January. They predict spending will have increased 0.2% in February, slowing from a 0.6% rise in January. The revised March reading of the Consumer Sentiment Index is scheduled to be released at 9:55 a.m. by Reuters and the University of Michigan. The index stood at a preliminary reading of 56.6 earlier this month. Economists expect the index to be revised up slightly to 56.8. 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 | 27 Mar 2009 | 10:22 am Australia rejects China takeover Australia rejects a Chinese state-run firm's $1.7bn takeover bid for Australia's Oz Minerals because of national security concerns Source: BBC News | Business | World Edition | 27 Mar 2009 | 10:13 am Don't get scammed while saving your house When mortgage borrowers fall behind on payments and run the risk of losing their homes, they sometimes grab the first lifeline tossed their direction. Often that lifeline is a TV or Internet advertisement making grand promises - and has more than one string attached. Source: Business and financial news - CNNMoney.com | 27 Mar 2009 | 10:11 am UK recession is worse than forecast A sudden collapse in the building sector caused the British economy to fall into an even steeper decline in the final quarter of last year, according to revised government figures published today. Source: Latest Business News from Times Online | 27 Mar 2009 | 10:10 am The Bull Market About To Take A Rest (AAPL)(GS)(GM) A great deal has been made about the Nasdaq going from being down 25% for the year to being up for 2009. The furious rally might continue, but it probably won’t. That is not because the economy is continuing a sharp slide. It is because the stocks that have pushed the market up have gains too stupendous to hold. In the tech sector, shares of Apple (AAPL) are up 30% this year. Even with its increasing market share in the PC business and the growing success of the iPhone, there is almost no analyst who thinks that Apple will do well in the first half of the year. The economy is too weak. Competition in the smartphone business is getting more vicious. Overall consumer electronics sales are down too much. Even the Apple brand cannot overcome all of that. The shares of Goldman Sachs (GS) are up almost 30% year-to-date. Goldman’s earnings may be better this year than they were in 2008. But, analysts know that the bank holds positions in commercial real estate and that its proprietary trading, M&A, and underwriting business have not come back due to market conditions. That may change but it will not change in the first half of the year. Economic conditions are still too ugly for corporations to raise much money or move back into the market to buy other companies. The fees from those businesses will be too low to help Goldman earnings. GM’s (GM) stock is up 30% in 2009. There is increasing hope that the company will not go bankrupt. That will be largely offset by a tremendous dilution of current shareholders as creditors convert their debt to equity. As recently as this week, GM told the government that it will have to revisit its business plan for the rest of the year. Light vehicle sales are not likely to recover at all in 2009. That means that GM’s revenue projections were too optimistic. Government aid may not offset the huge losses that falling sales will bring. GM may be back talking to the Administration as early as mid-year. The market is up 20% or better since the first day of the year. The stocks that helped take it there are tired. Douglas A. McIntyre Tagged: AAPL, GM, GS Source: 24/7 Wall Street | 27 Mar 2009 | 10:05 am Lancet lashes out at Pope over condoms The Lancet has launched a stinging attack on the Pope for his opposition to the use of condoms, branding as "outrageous and wildly inaccurate" his argument that the prophylactics serve to increase HIV infection Source: Financial Times - US homepage | 27 Mar 2009 | 10:01 am UK economy shrinks at faster pace The UK economy shrank by 1.6%, even more than been estimated, in the last three months of 2008, official figures show. Source: BBC News | Business | World Edition | 27 Mar 2009 | 10:01 am 99 cents no more: New iTunes prices coming Source: Business and financial news - CNNMoney.com | 27 Mar 2009 | 9:56 am UK economy slows sharper than expected as construction slumps Economy slowed even more sharply than expected in the last quarter of 2008 as construction output plunged ONS data shows. Source: Telegraph Finance | 27 Mar 2009 | 9:52 am Conservatives: Give savers a Budget tax break The Conservatives have started a petition calling on Alistair Darling to introduce tax breaks for savers in the Budget. Source: Telegraph Finance | 27 Mar 2009 | 9:51 am Pushing Mortgage Rates To Zero Won’t Help Housing No one can remember mortgage rates as low as they are now. The thirty-year rate is at 4.85%. Mortgage rates could go to zero and it would probably not help the housing market. One obvious problem is that lower rates do not improve people’s credit ratings or access to cash for down payments, but the trouble is more complex than that. While some data shows that housing may be finding a bottom, it is likely that very few people are willing to gamble their own money that the perception is true. If unemployment rises, housing prices could continue to fall. If foreclosures rise, the value of homes could tumble anther 10% or more.  Of course, people thinking about buying a house have to be concerned with their own jobs. Low mortgage rates don’t matter to the unemployed. The Fed has effectively taken rates to zero, and banks have not reacted by lending. They are still concerned that consumer credit defaults, LBO failures, and commercial real estate values could cause large write-offs as the year wears on. Interest rates at zero are only attractive if the risk of borrowing is at a traditional level. And, for people looking at homes, it is not. Douglas A. McIntyre Source: 24/7 Wall Street | 27 Mar 2009 | 9:44 am Commerzbank reveals toxic assets Commerzbank warns its 2009 earnings will be badly affected, as it discloses toxic assets of more than 50bn euros. Source: BBC News | Business | World Edition | 27 Mar 2009 | 9:41 am Mizuho plans to cut shareholdings by 30% Mizuho Financial has responded to the sharp fall in Japanese share prices with plans to sell Y900bn of stock it owns in its domestic banking clients, or about 30 per cent of its vast portfolio.The plan,... Source: RSS feed - channel BNPaperBusiness | 27 Mar 2009 | 9:36 am Pensioners to be first victims of quantitative easing Why quantitative easing will knock 10pc off pensioners' income Source: Telegraph Finance | 27 Mar 2009 | 9:36 am Weekly AAPL Headline Roundup: March 27 AAPL nearing $110 is the headline, but there are other stories worth noting this week, aggregated from 24/7 Wall St. partner Apple Investor News: • Analyst comment of week: Majestic Research tells CNBC’s Jim Goldman that an Apple beat this time around is unlikely. Of course, Apple is famous for lowballing estimates, then beating handily. This follows EPS cuts from Thomas Weisel and the NPD February channel check data showing a 16% drop in Mac sales. • Apple’s U.S. online store shows the iMac as the top-selling Mac. This is not the least expensive model. Now I’m really curious to see the Q2 Mac numbers. • Subsidized Macs Coming?  Mobile Today reports European carrier Orange will soon announce it will sell subsidized Mac laptops with a mobile broadband package. • This week Apple announced a new seminar for businesses not familiar with the Mac OS. It’s called “Your business on a Mac. A better bottom line,” with seminars held around the US.  • Venture Funds have put $10 million into startup ngmoco, maker of successful iPhone and iPod Touch games. Founder Neil Young says the iPhone/Touch platform is “better than the (Nintendo) DS, better than the (Sony) PSP.” • Rumor-soon-to-be-fact of the week: Much coverage of a Macworld UK report that China Unicom had posted a website ad getting ready to debut the iPhone in China. • Rumor of video recording for the next-generation iPhone hardware surfaced this week, according to AppleInsider. Some reports even hinted at editing capabilities. • Finally, Apple’s Worldwide Developer Conference (WWDC) dates are set for June 8-12.  Frank Cioffi, Apple Investor News. (full disclosure: Cioffi owns AAPL shares) Tagged: AAPL Source: 24/7 Wall Street | 27 Mar 2009 | 9:32 am Brazil's Lula says 'white people with blue eyes' caused world recession Brazil's President Lula says the global financial crisis was caused by "the irrational behaviour of white people with blue eyes". Source: BBC News | Business | World Edition | 27 Mar 2009 | 9:32 am Dairy Crest sells Yoplait stake to reduce debt Dairy Crest has sold its 49pc stake in Yoplait Dairy Crest to the Yoplait Group for £63.5m and will use the cash to reduce debt. Source: Telegraph Finance | 27 Mar 2009 | 9:27 am Blaming Newspaper Management For Newspaper Problems The New York Times (NYT)  and Washington Post (WPO) both said that they would have to cut jobs and salaries. The falling revenue in the print advertising business is overtaking them and they have no other choice. Sales are dropping, at some newspapers by more than 20% a year. But, many newspapers still have employee and cost bases that were based on the industry’s very successful years at the beginning of the decade. It is considered bad form to blame people for a catastrophe after it happens, unless someone involved has committed a felony. In the case of newspapers how the house caved in is worth a hard look. It says a great deal about how industries that do not have to fail, fall apart anyway. Martin Nisenholtz has run the electronic and digital operations of The New York Times since 1995. He probably saw problems that the newspaper industry faced when they were still far off. Fourteen years ago, he was dealing with the internet in a period when consumer access to broadband did not exist. Whatever Nisenholtz shared with the people who run The New York Times will probably never see the light of day. It is very probable that if he warned about the possible disruption that the print business might face that the warning was ignored. Most large print media companies had early experiments set up to test drive the internet. Time, Inc. had a large project know as Pathfinder. It was expensive to operate and eventually folded. Looking back, it might have been a good idea to have kept it open. In large companies, it is not really the job of the CEO to run the company. There are plenty of bright operational, financial, and legal executives. Business schools teach that CEOs are charged with looking at a company’s future so that they can think strategically about how to position their firms for the world as it will be in five or ten years. What is rarely mentioned is that the best CEOs spend most of their time thinking about what will put their companies out of business and doing something to prevent this catastrophe.  Although it may be overly simplistic, GE did it decades ago when it diversified away from being in the light bulb and electric fan businesses that were its beginnings in the 1890s. Some investors would say that GE is too diverse now, but its system served the company well for the great majority of the years during the last century. The heads of publishing companies have spend most of the last 20 years worrying about the costs of organized labor, the price of printing paper, and postal rates. It clearly did not occur to them that the early internet successes like Lycos, Excite, and Altavisa were in the information gathering, sorting, and creating businesses. Their indexing and presentation of content looked clumsy in 1997 and 1998.  It is incredible to remember that Yahoo! (YHOO) had its first day of 100,000 unique visitors in 1994. The company went public in early 1996. Google (GOOG) raised $25 million in 1999.  In 2000, it was offering search results in ten languages. It seems obvious to most average people now that the control, and to some extent the creation of content, began moving rapidly to the Internet as long as eleven or twelve years ago. Not a single large print media company chief saw that at the time. The role of the content CEO as visionary did not work. Looking ahead in 1998, he saw the US Postal System and his unionized workers as his greatest enemies. Now newspaper unions have almost no bargaining power to save their member’s jobs because the entire industry is going under. It may be too late to do much about the newspaper industry now. A lot of people blundered. If any lesson is left behind, it is that the obvious hurdles most business face are not the ones that will bring them down. You never see the bullet that kills you, unless  of course, you are watching for it. Douglas A. McIntyre Tagged: GOOG, NYT, WPO, YHOO Source: 24/7 Wall Street | 27 Mar 2009 | 9:14 am Regulating The Cobblestones On Wall St. There is nothing wrong with regulatory agencies and regulations for that matter.  It is what keeps four-year-olds from becoming airline pilots and orangutans from being airline mechanics. The theory behind regulation is simple. It is based on the fact that people are not intelligent enough to take care of themselves or too dishonest to take care of others. Treasury Secretary Geithner has told Congress that he would like to regulate Wall St. right down to the foundations of all of its buildings. That includes hedge funds, private equity firms, and traders of exotic financial instruments which may include credit default swaps and financial derivatives. Investment advisors like Mr. Madoff would also be watched more carefully by the government. In the Secretary’s own words, “What we need is better, smarter, tougher regulation, because we’ve seen the costs of these weaknesses and gaps are catastrophic to the system as a whole.” The reasons in favor of Geithner’s proposals are too numerous to mention. Among them, and perhaps at the top of the list, is that proper regulation would have prevented all of the events which caused the credit crisis, and, perhaps in turn, the recession. It is impossible to say whether that is true, but it sounds true, which is even better. There are two major arguments against the level of regulation that the Administration would like. The first is that regulations do not prevent people from acting rashly or dishonestly. Rogue traders can still lose hundreds of millions of dollars on an investment bank trading floor with a PC and access to their firm’s capital. Inside trading and naked shorting of stocks happen all the time, although both are illegal. Fighting regulation because some people refuse to be regulated turns out to be indefensible because the alternative is chaos. The other argument against excess regulation is that if the capital markets are prevented from efficiently trading and creating capital, then they do not really exist as capital markets any more. With the economy in such tough shape discouraging traders from creating liquid markets or the credit default swaps market from efficiently insuring risk may do more to hurt a system that is trying to build new capital more than it helps it. If the reasonable goal is to build liquidity without substantially increasing government regulation and the number of government people needed to monitor that regulation, the alternative is simply to enforce the rules that already exist. Lost in the argument about why there was not risk management in place when a bank like Citigroup moved to the brink of collapse was the fact that Citigroup had a committee of its board of directors charged with monitoring the risks taken by the bank. Citi also had an army of risk managers who probably reported to an executive who also ran a part of the company that was taking risks. Of course, it is fair to assume that the bank also had a chief financial officer who had an excellent idea of what Citi had on its balance sheet and in operations that it owned which had their own balance sheets. It is clear that the Citigroup board did not come close to performing its fiduciary responsibility related to risk and that the risk management staff within the company never understood the exotic mortgage-backed paper that the firm was holding. Or, worse, the risk managers may have known what was happening and were afraid to risk their jobs by blowing the whistle. It is not too much to ask whether enforcing the rules on the books accomplishes 90% of what creating vast new systems of regulation would accomplish. And, it is not too much to say that boards and executives who turn their backs on protecting the interests of their depositors, shareholders, customers, and employees will be keelhauled. This applies as much to hedge funds which have customers and shareholders of their own as it does to the Bank of America (BAC) which is, under the banking laws already in place, is regulated to within an inch of its life. It will take years to create new regulations and build and staff new regulatory agencies. In the meantime, the current crisis will have passed. In Geithner’s mind he is doing something for future generations which might face a financial crisis if it were not for his proactive efforts now. But, the whole process of re-regulating the financial system will never be much better than the diligence of the people who run the companies which are regulated. Douglas A. McIntyre Tagged: BAC, C Source: 24/7 Wall Street | 27 Mar 2009 | 9:03 am Australia bars China bid for Oz Minerals The Australian government has blocked a A$2.6bn (US$1.8bn) recommended bid by China's Minmetals for Oz Minerals on the grounds that the mining group's flagship mine is located in a military zone.Wayne... Source: RSS feed - channel BNPaperBusiness | 27 Mar 2009 | 9:01 am Australia bars China bid for Oz Minerals Australia has blocked a A$2.6bn (US$1.8bn) recommended bid by China's Minmetals for Oz Minerals on the grounds that the mining group's flagship mine is located in a military zone Source: Financial Times - US homepage | 27 Mar 2009 | 9:01 am Flowers resigns from HRE board Christopher Flowers resigned from the board of Hypo Real Estate on Friday following a dispute between the US financier's private equity group and the German government over plans for the forced nationalisation... Source: RSS feed - channel BNPaperBusiness | 27 Mar 2009 | 9:00 am Barclays shares surge on FSA green light Barclays Bank will avoid a rights issue to bolster its financial strength The Daily Telegraph has learnt after the lender was given a clean bill of health by the Financial Services Authority. Source: Telegraph Finance | 27 Mar 2009 | 8:57 am Asian markets mixed; banks down, chip makers up Asian markets end mixed Friday after a volatile session, with financials declining ahead of the weekend as cautious investors locked in profits after hefty recent gains. Source: MarketWatch.com - Top Stories | 27 Mar 2009 | 8:43 am Barclays stress test signals no new funds Barclays' loan book is in the final stages of an extreme stress test by City regulators as it weighs up whether it needs to seek taxpayer help by joining the government's insurance scheme, which ringfences... Source: RSS feed - channel BNPaperBusiness | 27 Mar 2009 | 8:31 am Barclays shares soar as FSA gives 'all-clear' Shares in Barclays soared today on reports that the Financial Services Authority, the City watchdog, had given the bank's balance sheet a clean bill of health, which will allow it avoid seeking funds from the Government. Source: Latest Business News from Times Online | 27 Mar 2009 | 8:26 am Air France-KLM warns on profits Air France-KLM issued a stark profits warning on Thursday night and disclosed it had fallen into loss in the current financial year to the end of March.Pierre-Henri Gourgeon, chief executive of Europe's... Source: RSS feed - channel BNPaperBusiness | 27 Mar 2009 | 8:24 am Media Digest 3/27/2009 Reuters, WSJ, NYTimes, FT, Bloomerg According to Reuters, the Obama financial reforms face a bumpy road. Reuters reports that the NY State Attorney General has subpoenaed AIG (AIG) over its CDS contracts. Reuters reports that Obama’s financial remedies may face pushback at the G20 summit. Reuters writes that Greenspan thinks big banks should not become too big. Reuters reports that there is tension at Nomura over Lehman bonuses. Reuters reports that Obama says he will help US automakers. Reuters reports that The Washington Post (WPO) and New York Times (NYT) cut jobs. Reuters writes that extra regulations may stabilize US bank profits. Reuters reports that US hedge funds and private equity firms are concerned about potential new regulations. Reuters reports that the Fed’s Plosser says that the US economy has a “pretty ugly” outlook. Reuters reports that Google (GOOG) will cut 200 sales staff. The Wall Street Journal reports that the top risk officers have stayed at AIG. The Wall Street Journal reports that budget gaps are pitting states against unions. The Wall Street Journal reports that MGM Grand (MGM) may go bankrupt. The Wall Street Journal reports that GM (GM) is unlikely to make the deadline for submitting is restructuring plan. The Wall Street Journal reports that software companies are resorting to giving away free software. The Wall Street Journal reports that a solid auction lifted Treasuries. The Wall Street Journal reports that the Obama budget is gaining support in the Senate. The Wall Street Journal reports that and IMF loan will help Serbia. The Wall Street Journal reports that store brands are hurting big food firms. The Wall Street Journal reports that Amazon (AMZN) will close some facilities. The Wall Street Journal reports that Infosys will look at US acquisitions. The Wall Street Journal reports that Google will link TV ads with YouTube. The Wall Street Journal reports that profits fell at the sharpest level in 55 years. The Wall Street Journal reports that the home building sector is not out of the woods. The Wall Street Journal reports that home prices may have much further to fall. The Wall Street Journal reports that Dell (DELL) is looking at acquisitions. The Wall Street Journal reports that AMR (AMR) is faulting a House bill to restrict airline alliances. The Wall Street Journal reports that Nvidia (NVDA) stared a countersuit against Intel (INTC). The Wall Street Journal reports that stock price declines are triggering more repricing of options. The Wall Street Journal reports that there is rising fear of oil price increases. The FT reports that the SEC will tighten oversight. The FT reports that GM (GM) is making a new plan taking into account a weak US car market. Bloomberg reports that Obama will seek support of his bank plan from JPMorgan, Goldman Sachs (GS), and Citigroup (C). Bloomberg reports that Japan is heading toward deflation. Douglas A. McIntyre Tagged: AIG, AMR, AMZN, C, DELL, GM, GOOG, GS, INTC, JPM, MGM, NVDA, NYT, WPO Source: 24/7 Wall Street | 27 Mar 2009 | 8:07 am Energy groups told to explain direct debit bills Energy companies are criticised today by Ofgem for failing to manage direct debit billing effectively, allowing customers to build up too much debt to their energy suppliers. Source: Latest Business News from Times Online | 27 Mar 2009 | 8:05 am Australian stocks: Market enjoys slight rise MELBOURNE - The Australian share market closed marginally higher on Friday after gains from the big miners drove the bourse into positive territory. At the close, the benchmark S&P/ASX200 index was 25.7 points, or 0.7 per cent... Source: New Zealand Herald - Business | 27 Mar 2009 | 8:04 am Google lays off 200 more Google said Thursday that it plans to cut "just under" 200 positions in its sales and marketing organizations around the globe, according to a posting on the company's official blog. Source: Business and financial news - CNNMoney.com | 27 Mar 2009 | 7:45 am Asia Markets 3/27/2009 Markets in Asia were mixed. The Nikkei fell .1% to 8,630. The Hange Seng was down .6% to 14,021. The Shanghai Composite rose .5% to 2,374. Data from Reuters Douglas A. McIntyre Source: 24/7 Wall Street | 27 Mar 2009 | 7:24 am Tension simmers at Nomura as Lehman bonuses loom (Reuters) Reuters - Things are getting tense at Japanese brokerage Nomura Holdings (8604.T). Source: Yahoo! News: Business | 27 Mar 2009 | 7:14 am Tension simmers at Nomura as Lehman bonuses loom HONG KONG (Reuters) - Things are getting tense at Japanese brokerage Nomura Holdings. Source: Reuters: Business News | 27 Mar 2009 | 7:14 am It's your last weekend to shop before the sales tax increase California merchants have launched an advertising blitz urging consumers to buy before the statewide hike kicks in April 1. Looming over the 405 Freeway near Culver City, a 50-foot-tall electronic sign for Airport Marina Ford has flashed "buy now" in bright red letters for the last month, a reminder to passing motorists to beat the April 1 sales tax increase. Source: L.A. Times - Business | 27 Mar 2009 | 7:00 am Money manager Stanley Chais seeks to move Madoff-related suits to federal court Stanley Chais wants to move investor lawsuits against him from state court to L.A. federal court -- a move that could lead the case to be transferred to New York, where he now lives. Stanley Chais, a Beverly Hills money manager and philanthropist who steered hundreds of millions of dollars into investments overseen by Bernard L. Madoff, has fallen ill, relocated to New York and wants to move lawsuits against him from state court to federal court in Los Angeles. Source: L.A. Times - Business | 27 Mar 2009 | 7:00 am Meruelo Maddux Properties faces bankruptcy protection Downtown Los Angeles' biggest landlord may file for Chapter 11 as soon as today. Several of its subsidiaries already have. ... Source: RSS feed - channel BNPaperBusiness | 27 Mar 2009 | 7:00 am Money manager Stanley Chais seeks to move Madoff-related suits to federal court Stanley Chais wants to move investor lawsuits against him from state court to L.A. federal court -- a move that could lead the case to be transferred to New York, where he now lives. ... Source: RSS feed - channel BNPaperBusiness | 27 Mar 2009 | 7:00 am California is poised to extend unemployment benefits State lawmakers OK legislation to accept $3 billion in federal stimulus money. Gov. Schwarzenegger could sign it into law today. The maximum period for benefits will increase to 79 weeks from 59. ... Source: RSS feed - channel BNPaperBusiness | 27 Mar 2009 | 7:00 am California is poised to extend unemployment benefits State lawmakers OK legislation to accept $3 billion in federal stimulus money. Gov. Schwarzenegger could sign it into law today. The maximum period for benefits will increase to 79 weeks from 59. Tens of thousands of Californians out of work for more than a year soon will be getting an extra 20 weeks of unemployment insurance checks, thanks to the federal economic stimulus program. Source: L.A. Times - Business | 27 Mar 2009 | 7:00 am Federal Reserve approves AIG loan to its aircraft unit The latest cash infusion for the plane leasing division, $900 million, is aimed at keeping it in business until it can be sold. ... Source: RSS feed - channel BNPaperBusiness | 27 Mar 2009 | 7:00 am William Morris and Endeavor talks hinge on top billing The heads of the Hollywood talent agencies see benefits to combining forces but would need to overcome objections from their respective partners and agents. Issues of control are bogging down a possible merger between two major Hollywood talent agencies. Source: L.A. Times - Business | 27 Mar 2009 | 7:00 am Geithner seeks authority to seize firms deemed a threat Treasury secretary outlines measures that would for the first time regulate hedge funds and give government the power to dismantle companies whose failure threatens the nation's financial stability. Reporting from New York and Washington Walter Hamilton -- The Obama administration is proposing the farthest-reaching set of new rules for the financial industry since the Great Depression -- including measures that would for the first time regulate hedge funds and give government the power to seize and dismantle companies deemed a threat to the economy. Source: L.A. Times - Business | 27 Mar 2009 | 7:00 am Anchor Bay Entertainment moves into theatrical releases As the independent film business struggles, the straight-to-video company sees an opportunity. Its first theatrical release is 'The Education of Charlie Banks.' Hollywood's commitment to independently financed movies has declined as much as the stock market. Now, a distributor wants to take advantage of the retrenchment -- the fatalities include Warner Independent Pictures, Yari Film Group, Picturehouse, Paramount Vantage, New Line Cinema and ThinkFilm -- by launching a specialty film label. Source: L.A. Times - Business | 27 Mar 2009 | 7:00 am Tesla Motors plans to build Model S all-electric sedan in Southland Tesla had originally agreed to set up shop in San Jose, but federal loan programs favor locating in Southern California. A plant in the Southland could mean hundreds of jobs. ... Source: RSS feed - channel BNPaperBusiness | 27 Mar 2009 | 7:00 am Tesla Motors plans to build Model S all-electric sedan in Southland Tesla had originally agreed to set up shop in San Jose, but federal loan programs favor locating in Southern California. A plant in the Southland could mean hundreds of jobs. The next American car factory could be in the Southland. Source: L.A. Times - Business | 27 Mar 2009 | 7:00 am Stocks rise on relief over tech earnings, debt auction The Dow jumps nearly 175 points to 7,924 after big consumer brands report better-than-expected results and demand rises for seven-year T-notes. The blue chip index is up 21% for the year. The stock market extended its rally Thursday on fresh nuggets of upbeat news, sending the Dow Jones industrials up nearly 175 points to a six-week high and putting the Nasdaq composite index in positive territory for the year. Source: L.A. Times - Business | 27 Mar 2009 | 7:00 am Financial regulators missed the big picture, big problems State officials kept an eye on the industry, but only to a certain point. And few federal probes reached Wall Street. To help understand why the Obama administration is pushing for greater financial regulation, it may help to examine the case of Orange County's Ameriquest Mortgage Co., whose dizzying rise was followed by a monumental crash. Source: L.A. Times - Business | 27 Mar 2009 | 7:00 am NZ stocks: Market has best week in six months The New Zealand sharemarket enjoyed a positive day today, capping what has been described as its best week in about six months. The benchmark NZX-50 was up 37.221 points, or 1.423 per cent, to 2653.475 at the close today. It started... Source: New Zealand Herald - Business | 27 Mar 2009 | 6:51 am Currency: Dollar little changed Better than expected economic figures gave the New Zealand dollar a boost today, but any gains were quickly eroded. At 5pm today it was worth US57.57c, little changed from US57.53c at 5pm yesterday. It capped a week that saw... Source: New Zealand Herald - Business | 27 Mar 2009 | 6:18 am At 50 mpg, the 2010 Toyota Prius is a game changer The car feels like the same humble, humming people pod, only lacquered with a bit more confidence and esprit. A calculator can be the plaything of the damned. Allow me to demonstrate. Source: L.A. Times - Business | 27 Mar 2009 | 6:09 am Duking It Out Over Pollution For yearsDuke Energy (DUK) has produced cheap, reliable electricity thanks in no small part to a fuel that has a bad reputation these days: coal. And yet look who’s trying to help shape the national debate on reducing greenhouse gases: Duke CEO Jim Rogers. The 61-year-old former utility regulator has called for caps on carbon emissions and wants Duke itself to reduce its emissions by 80 percent by the year 2050. Rogers says that’s not as strange as it sounds, even for a company with 14 coal plants scattered across the Carolinas and the Midwest. As the anticarbon parade gets under way in Washington, he says he can either try to stop it or “jump in front” and help shape the outcome. Rogers finds himself trying to keep his Charlotte, N.C., company ahead of the game on a number of fronts. Analysts say that since taking the reins at Duke in 2006, he has helped improve the balance sheet, giving the company the financial strength to ride out the credit crunch and continue to pay a generous 6 percent dividend. He’s also worked to maintain good relations with the folks who set Duke’s utility rates—regulators in North Carolina, South Carolina, Ohio, Indiana and Kentucky. But he may have a harder job meeting the company’s goal of boosting income by an average of 5 to 7 percent a year through 2013. In 2008 Duke’s earnings slipped almost 2 percent, to $1.21 a share, as revenue rose nearly 4 percent, to $13.2 billion. This year the company expects earnings to be flat, as recession-plagued customers cut back on energy use. “We’re tightening our belts,” says Rogers, who has frozen merit-pay increases and put limits on new hiring. In the long run, an even bigger concern may be how Washington comes down on the carbon issue. Indeed, as President Obama follows through on his promise to combat global warming, just about every utility’s future rests on how the government will regulate emissions. Duke, which gets about 70 percent of its electric output from coal, essentially wants free “allowances,” or permission to continue polluting for a period of time as it works to cut its carbon output. Some environmentalists prefer to auction the allowances to the highest bidder—a move that could stick companies like Duke with huge costs. Rogers, who likes to assign his favorite books to top executives and then pepper them with questions about them, recently sat down with SmartMoney to answer a few questions himself, such as how the utility plans to pay for its costly investments, why he tries to listen to even his fiercest critics, and how he manages to sleep at night. What impact has the recession had on your service area? We see demand for electricity falling, primarily in industrial and residential customers. We have yet to see commercial parts of the business reduce demand. Worst case is that demand in 2009 will be slightly under 2008. When was the last time you saw two consecutive years of falling demand? In the Midwest we haven’t ever experienced it, and in the Carolinas, not since 2000 and 2001. You’ve already cut spending because of the capital markets. What happens if they stay tight beyond 2009? Capital is the lifeblood of our industry. If credit continues to be tight in 2010, we will scrutinize our spending and look for ways to reduce it consistent with the availability of money. What’s up on the policy front? The next two years will fundamentally transform our approach to environmental and energy policy—from the way we think about it to the way we invest in it. When you listen to the president talk about where we are going, I can’t think of a company that is as well-positioned to execute on contemplated public policy becoming reality. We have nuclear plants, energy-efficiency projects, coal gasification for carbon capture and sequestration, and wind and solar investments. You’re also building a new coal plant in North Carolina. Doesn’t that run counter to your talk about reducing carbon? I would call it a bridge plant to the low-carbon world. We can shut down older, higher-emitting plants that are not retrofitted and produce electricity with lower carbon intensity because of improved efficiencies. We don’t view that as the solution, and I wouldn’t call that clean coal in terms of addressing CO2. But it’s one of the cleanest plants that exist today. But why build one at all? Why not do more to improve efficiency and reduce demand? You have to be careful to not frame the debate as either/or. Every one of the options—coal, nuclear, wind, solar—needs technological advances to be a contributor in a low-carbon world. You can’t take any off the table. With the recession shifting priorities and even the best companies having trouble borrowing money, how are these technologies going to get the financing to get off the ground? Our industry should tell the administration to view this as a joint partnership. We will make investments in transmission, smart grids and renewable energy. It shouldn’t use taxpayer money. Perhaps the government can provide bonus depreciation or tax credits to stimulate private investment, but we will raise the money, and our investors will fund this. All we need is a clear road map and the regulatory underbrush to be cleared out—like getting eminent domain to build transmission lines. It’s ironic to hear a coal-based utility position itself as part of the solution. I looked at our 2050 scenario, and the a-ha moment for me was that virtually all our existing power plants would be retired by then. With each one I get a blank sheet of paper. What drives me is redefining the business, and helping our communities become the most energy-efficient in the world, and decarbonizing our supply. I believe I can do that, and I can make money doing that. How do you pay for this? It’s going to take a huge educational effort with Americans to understand “Yes, we can be cleaner, but it’s not going to be cheap or easy.” In the short term it’s going to be more expensive, but in the longer term it is going to put our economy on better footing. You’ve been a big proponent of so-called cap-and-trade regulation to limit greenhouse gases. But there is talk the allowances could be auctioned off, a potentially onerous outcome for companies like yours. A 100 percent auction would be devastating to people who rely on coal. Building coal plants was part of our national policy, and to punish people for carrying that out would be wrong. It’s all about fairness. I heard you ignored your staff and went to a talk by climate scientist James Hansen, who has criticized you for building new coal plants. I would rather spend time with critics than my friends to get a deeper appreciation of their views and help shape decisions in the direction I want to go. And I sometimes wish they would see my point of view. You’re a Teddy Roosevelt buff. What lessons have you taken from him? I’ve had a quote from him since I was 18 years old. It’s about the man in the arena, fighting the fight and daring to do great things even if he fails. Utilities have typically been seen as defensive stocks. Given the uncertainties and the changes on the horizon, can you still make that case? People buy our stock for the dividend. There’s a good probability we could see a policy evolving that if a company does green things, then maybe the tax advantage for its dividend would be kept. I’d be getting more dividends to you at a lower tax rate. That lets me attract more capital, which allows me to invest more in green. What keeps you up at night? Nothing. I take Lunesta. 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 | 27 Mar 2009 | 4:00 am Best Places to Get a Part-Time Job (Deal of the Day) Punching the clock carries a whole new meaning for the hundreds of thousands of once-full-time workers who have sought part-time gigs to stay afloat. In fact, there are almost two million more part-time workers – 26.5 million total – in the United States now than there were a year ago, according the Bureau of Labor Statistics. Beyond the size of their paycheck, many of these new part-timers have traded the security of 401(k) matches and family dental plans for hourly wages and pricey Cobra health coverage, which currently averages $13,000 a year for a family. But there are ways to work part time and avoid paying the overwhelming costs associated with supplying your own health and retirement benefits. You just have to know where to look. “If you’re going to work part time, it’s best to work at places that consider part-time workers as integral to their success,” says Bob Nelson, president of Nelson Motivation, a benefits consulting firm. “For example, at Starbucks part-time workers hit the core of their organization, and because of that they’re going to be taken care of.” Job hunters may also want to visit their local grocery store. Grocery stores tend to provide generous benefits. Wegmans, for example, offers medical benefits, a 401(k) matching, profit-sharing and paid time off. These stores are also relatively cushioned from the economic downturn so many are hiring and in some cases even expanding, says Amy Lyman, co-founder of Great Place to Work Institute, a San Francisco-based consulting firm that specializes in workplace issues. Not interested in retail or food services? Try universities and hospitals, which also tend to offer generous benefits to their hourly workers, says Nelson. Here are eight companies that make punching that clock more rewarding. Barnes & Noble Part-time bibliophiles not only get to buy their favorite authors at a discount, but they also get transit benefits to help them pay for getting to and from the store. Hours per week to qualify: At least 20 hours Time until you can collect benefits: One year of employment Benefits: Medical, dental; flexible spending; 401(k) matching (after 1,000 hours worked). Other perks include transit benefits, paid sick days and a 30% employee discount on books. IKEA The Swedish home furnishing store is expanding its presence in the U.S. and is bringing its home country's approach to benefits with it: Once you get a job working 20 hours a week at a store, you automatically qualify for benefits. Hours per week to qualify: 20 hours Time until you can collect benefits: None Benefits: Medical, dental, vision; 401(k) after six months of work. Extra perks include paid vacations (depending on hours worked). Lowe’s The flexible scheduling at this national home improvement retailer makes it an easy sell for students, seniors or those who might have other careers – and there are no minimum hours per week or limitations required for collecting benefits. Hours per week to qualify: None, but must be a part-time worker Time until you can collect benefits: None Benefits: Medical, dental, vision; life and short-term disability insurance; 401(k) plan with company match; prorated paid vacation, employee discounts. REI Sure, you can get great discounts on gear and travel working at this outdoor outfitter, but the practical perks aren't bad either. Part-time and seasonal employees are eligible for medical coverage after just 30 days of work, with 60% of the cost subsidized by REI. Hours per week to qualify: Less than 20 hours Time until you can collect benefits: 30 days of employment Benefits: Medical, dental, incentive pay, retirement and profit sharing (depending on length of employment), tuition reimbursement, up to 12 weeks unpaid leave, 50% discount on REI goods, 30% off vendor merchandise and 30% discount on trips with REI's travel company. Starbucks The chain that has made coffee a $4-a-day habit for millions makes that habit a lot more affordable for its employees. Workers receive free beverages while at work, a 30% employee discount on Starbucks merchandise and a free pound of coffee or box of tea to take home each week. Hours per week to qualify: 20 hours Time until you can collect benefits: Three months Benefits: Medical, dental, vision; 401(k) plan with company match; paid vacation (after 12 months of employment). Other perks include 30% employee discount, fitness facility discounts, tuition reimbursement after 12 months of employment and free beverages while working. Trader Joe’s The privately-held grocery store chain won’t disclose much about their qualifications for benefits but will tell us that in addition to a 10% employee discount, workers get free signature Trader Joe’s Hawaiian shirts and paid time off. Hours per week to qualify: Not disclosed, but part-time employees can work up to 35 hours per week. Time until you can collect benefits: Not disclosed, but most employees qualify after being employed for a few months. Benefits: Medical, dental, vision; company paid retirement plan, 10% employee discount and disability insurance. Wegmans Started in Rochester, N.Y., this grocery chain is rapidly expanding throughout the Northeast. For employees who want to take advantage of the great schools in the region, the company offers scholarships for college or continuing education. Hours per week to qualify: 20 to 24 hours Time until you can collect benefits: One year of employment. Benefits: Medical, pharmacy; 401(k) matching, paid vacations (varies by state). Other perks include an option for profit sharing, employee discounts, flexible spending, scholarships and wellness programs like smoking cessation and discounted gym memberships. Whole Foods This grocer takes health seriously. It covers 100% of employees’ health-insurance premiums after they’ve worked 800 total hours. As a bonus, all employees, and their spouses or eligible domestic partners, get a 20% discount on groceries. Hours per week to qualify: 20 hours Time until you can collect benefits: 400 service hours Benefits: Medical, dental, vision; flexible spending; life and disability insurance; 401(k) contributions, prorated paid time off. Other perks include a 20% in-store discount for employees and their spouses or eligible domestic partners. 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 | 27 Mar 2009 | 4:00 am 5 Stocks for the Dollar-Confused (Screens) The dollar is going to lose value. We know that for sure, just as we know stocks will go up. What we don’t know is how much value the dollar will lose and how soon, and whether it will gain briefly before it loses long term. Scarce things become expensive and plentiful things become cheap. The dollar is valuable only because the U.S. government guarantees it can be used for things like paying debt and buying goods. The number of dollars America creates each year is limited only by policy makers’ desire for them. All things equal, most economists would prefer to create new dollars at a slightly faster rate than the economy’s growth rate, resulting in a gradual but controlled loss of buying power, called inflation. Economists like to keep a little inflation brewing for more or less the same reason a fisherman likes to keep a little slack in the line: so that a sharp downward yank won’t break anything. The one thing a central banker doesn’t want is deflation -- for prices to fall. That sounds like it might be desirable because life would become cheaper, but if we all believed prices were going to fall we’d delay buying just about everything, putting more people out of jobs. As a nation, we’d grow poorer even as we saved. (John Maynard Keynes, a prominent British economist who died in 1946, called that the Paradox of Thrift.) By maintaining a few percentage points of inflation each year, central bankers hope to keep a cushion so that if demand for goods suddenly shrinks, prices will only rise less quickly, or perhaps flatten, but not fall. So we know the dollar will lose value, at least gradually over long time periods, because we make it so. The best way to protect against that is to own things that rise in value faster than the rate of inflation. Businesses are ideal for that job, since if they sell things people want, people will keep exchanging labor for those things, no matter what currency serves as a go-between for labor and goods, and no matter what it’s worth. Shares of businesses protect investors from inflation. Savings accounts do not. Savings account holders are guaranteed not to lose dollars, but they can easily lose wealth. Because of the typically gradual nature of inflation, the risk is small over short time periods but grows larger over long ones. There’s a hot debate at the moment over whether inflation is about to spike. Those who say it will point out that the government is spending trillions of dollars it doesn’t have to shore up banks, create jobs, boost lending and more. Much of it will be borrowed from other governments. It will have to be paid back, either through a dramatic reversal in the government’s recent tendency to far overspend its revenues, or by the creation of new dollars, which would make existing ones less valuable. The Federal Reserve, which is empowered to create dollars, has so far this year bought or announced the purchase of $1.25 trillion in agency-backed mortgage securities (“agency” meaning Fannie Mae and Freddie Mac), $200 billion in agency debt and, notably, $300 billion in long-term Treasurys. It can buy these things with a simple electronic credit and create money later to pay for them. Those who argue severe inflation is coming also say foreign governments who hold dollars -- China has an estimated two-thirds of its $2 trillion in currency reserves in dollars -- might lose confidence in its ability to hold value, and seek to put money elsewhere, thereby making the dollar even weaker. Those who remain confident in the dollar say the threat of money being created is eclipsed by the drop in consumer demand and that deflation is the bigger risk. Inflation has recently fallen to zero. They say peer nations have it worse. Europe and Japan have aggressively borrowed, too, and Europe has more inflation. They say that the dollar still holds the bulk of the world’s currency reserves, even a decade after the introduction of the now-16-nation euro, because of its unmatchable depth and liquidity, and that foreign dollar holders who threaten to dump them and drive the value lower do so at their own loss. My guess -- and it is just a guess -- is that we’ll leave this recession with inflation that is greater than what government economists would like but not nearly as great as doomsayers predict, and that the dollar will wobble against the euro and yen in the short term but not lose value to them in the long term. The thing to hold through all of it is stocks, and certainly not gold, which is called by many a good hedge against inflation but is in fact a poor one, for reasons I’ll explain here in coming days. If you’re uncertain about the near-term direction of the dollar, like me, own shares of companies that sell goods in many countries. I’ve listed a few below that have strong balance sheets, modest price/earnings ratios and decent dividend yields.
Company	Ticker	Industry	Share Price	P/E	Yield (%)
Coca-Cola	KO	Soft drinks	$44.85	14	3.7
Exxon Mobil	XOM	Oil and gas	71.23	16	2.3
Sanofi-Aventis	SNY	Drugs	28.70	7	5.8
Kimberly Clark	KMB	Personal products	47.17	11	5.2
Yum Brands	YUM	Restaurants	29.86	14	2.7

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.

Greener Cars: Powering Up or Down?

BARACK OBAMA HAS A VISION: a million electric vehicles on U.S. roads by 2015. If that dream becomes a reality, it could be good news for Ener1 (HEV), a small New York City-based manufacturer of electric-car batteries. Ener1, which has manufacturing facilities in Indiana and Korea, is a publicly traded pure-play maker of electric-vehicle batteries in the U.S., and even boasts a killer Nasdaq ticker symbol: HEV, short for hybrid electric vehicle.

The Obama administration is pushing hard for green transportation. Last month, at a joint session of Congress, the president called for "a retooled, re-imagined auto industry that can compete and win," and lamented that hybrids now run on batteries made in Korea. That cry is echoed by Denise Gray, the battery czarina at General Motors (GM), whose electric-powered Chevrolet Volt is scheduled to debut next year and which uses Korean batteries because Chevy couldn't find a domestic source for what was needed. Says Gray: "The closer [the supplier] is, the less the cost. We should have the capability here."

If Ener1 were to win 5% to 12% of a million-vehicle battery market, the company estimates, it could pull in $2.1 billion in annual revenue with 15% margins (based on earnings before interest, taxes, depreciation and amortization). "If you want to apply a 15 times multiple to that cash flow, which in any normal market is a reasonable growth market, you're talking about a $4.5 billion equity-market cap," says CEO Charles Gassenheimer.

That's far from HEV's $480 million stock-market value late last week, when its shares were trading at $4.20. (Five years ago, the stock peaked above 10.) A $2.1 billion revenue stream looks fabulous, too, compared with the $7 million in revenue Ener1 had last year, along with a loss of $43 million, or 42 cents a share. In part, that showing reflected lower-than-expected revenue at Enertech, a Korean manufacturer it acquired in October. The Enertech purchase was another step on a journey that has taken Ener1 from a telecom-gear maker 24 years ago to a developer of advanced batteries, products in which it gained additional expertise through a joint venture with Delphi, GM's former parts unit. Ener1 bought out Delphi's stake last August.

The key to Ener1's ambitions is a $480 million Department of Energy loan, which it's seeking to expand its Indiana facilities under the Advanced Technology Vehicle Manufacturing Incentive Program. And very soon, it hopes to apply for part of a $2 billion DOE grant from the Advanced Battery Manufacturing Initiative, part of the Obama stimulus package.

Steve Milunovich, a Bank of America Merrill Lynch analyst, likes the "multiple chemistries" that Ener1 uses in its products, including its promising lithium-ion battery, which lasts longer and can store and produce more energy than other types of power cells. Ener1's flat batteries also stack well and, the company says, dissipate heat efficiently -- a major problem with lithium-ion batteries. (Remember the laptop computer fires caused by Sony batteries?)

Gassenheimer says the U.S. auto industry's viability depends on developing a high-tech battery industry. "The last thing we want is to trade dependence on foreign oil for dependence on foreign batteries," he declares.

But for all its promise, Ener1 has just one major publicly disclosed customer: Think Global, a Norwegian electric-car maker that temporarily halted production last year. Another issue: Ener1's ownership.

As of late February, some 62% of Ener1's outstanding shares were owned by privately held Ener1 Group. In turn, 66% of Ener1 Group -- a recent participant in a $5.7 million loan to Think Global, which is trying to emerge from bankruptcy -- is held by Bzinfin, a British Virgin Islands company whose "indirect beneficial owner" is Boris Zingarevich, a Russian businessman. Zingarevich has close ties to Russian President Dmitry Medvedev and Prime Minister Vladimir Putin.

"Dispositive and voting power" over the Ener1 shares held by Ener1 Group is exercised by a board that includes CEO Gassenheimer, Boris Zingarevich, Mikhail Zingarevich (Boris' brother) and Alexei Paramonov.

The Zingareviches have vast interests in timber. In the early 1990s, they and Zakhar Smushkin began building what is now Ilim Holdings, based in St. Petersburg, Russia. In 2004, Forbes listed the brothers among the richest Russians. In the '90s, Ilim's legal director was Dmitry Medvedev. In 1999, Medvedev joined Putin's cabinet; last year, he become president. Ilim has prospered. In 2007, it sold a 50% stake to International Paper (IP) for $620 million. Boris, Mikhail and Smushkin are on Ilim's board.

In theory, foreign control shouldn't matter to the Department of Energy. However, it wants to foster an American advanced-battery industry. The U.S. players now include A123 Systems, founded at the Massachusetts Institute of Technology, and Johnson Controls (JCI), which has a joint venture with France's Saft Groupe (SAFT.France). Says Frank Gaffney, president of the Washington-based Center for Security Policy: "We desperately need to be establishing an industrial base in this country for a battery technology... . [But] it's insanity to be building a national battery infrastructure in the pockets of the oligarchs of the past and future Soviet Union." Kevin Kearns, president of the Washington-based U.S. Business & Industry Council, worries that Ener1's DOE-funded expertise could "be sucked out of the company and sent back to Russia." One factor behind such concerns: Advanced batteries are likely to have military, as well as civilian, uses.

Attempts to reach Zingarevich through Ilim Group and through Bzinfin's attorney in Geneva were unsuccessful. However, in a statement, Ener1 blames the emergence of this issue on the efforts of a short seller to drive down its share price. It also notes that Boris Zingarevich has "indirect ownership of less than 40%" of its shares.

In any case, Ener1 has survived the first round of the DoE's loan process, which whittled the number of applicants to 25 from 75, and now must pass the DoE's due-diligence vetting. Applicants must show that their products are technically feasible and their businesses are financially viable. The DOE requires that applicants have manufacturing facilities in the U.S., that engineering integration be done here, and that related costs be paid to American suppliers. The $480 million loan, it's hoped, will come through this year.

Gassenheimer says that Zingarevich joined the company "when the two founders ran into financial difficulties... If it were not for Boris, this company would not be alive today. He's been a tremendous partner, a patient investor. It's nice to have someone with this level of patience that is fully committed to the story." He adds that Zingarevich "as a matter of SEC rules...is deemed to 'beneficially own' a majority of our shares" but has no day-to-day role in the company. And Gassenheimer says that, like many U.S. companies, its investors include Americans and foreigners.

The Ener1 CEO is clearly upset about the low stock price; he blames hedge funds having to sell HEV shares to meet redemptions. Ener1's prospects have never been brighter, he contends, and it has financing alternatives if the loan is denied. For example, it could seek a strategic partnership, like that of Toyota with Panasonic or Johnson Controls with Saft. Gassenheimer says he's been in talks about such deals since Ener1 bought out Delphi.

Today, he adds, Ener1 has more than 90 customers (although he won't name them) and 15 programs for automotive or defense applications. Among potential customers: a large European auto maker now testing a battery pack for a hybrid; another big customer testing an electric-vehicle pack; and a national postal service considering converting vehicles to electric power.

As for his stock, Gassenheimer says it's for long-term investors: "Those who buy at these prices will be very well-rewarded."

The Bottom Line
The uncertainty over Ener1's future has knocked the stock down well over 50% from its high. If the company wins a federal loan, it could be viable. If not, it faces tough going.

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.

Las Vegas project considers bankruptcy: report

Las Vegas project considers bankruptcy: report (Reuters)

Japan prepares interception missiles

Greenspan says banks should not become too big

Economic decline fastest in 16 years, more weakness expected

World slipping dangerously into protectionism, says WTO

Washington Post, NY Times slash costs

National Amusements theater auction sparks interest

Educational Software Firm Weathers Budget Cuts

Business Briefs - Thursday

After The Close - Thursday

Manhattan Housing Hurts Amid Job Losses

Trends & Innovations - Thursday

Brazil's leader blames white people for crisis

President Lula of Brazil blames crisis on 'white and blue-eyed'

Ministers pore over incentives to save growth of green energy

G20 protesters take fiery rhetoric and bunting to 'big tent City'

Harking back to the 30s not the only way ahead

Obama set to boost Afghanistan force

More banks rush to raise mortgage rates

Obama says to help U.S. automakers

Hallenstein Glasson half year profits fall 40pc

NZ Shares: Market initially bouyant, but slide in early trade

Write-Offs: 03.26.09

$$$ "Business Plus, an imprint of Grand Central Publishing (Hachette Book Group), announced today that it will publish a new book by former Secretary of the Treasury Henry M. Paulson, Jr. It is scheduled for publication in October 2009." [PRNews]

$$$ Credit Suisse Says Investor Stole Hundreds Of Millions From Funds Unit [Forbes]

$$$ FDIC Seeks Comment on the Recently Announced Legacy Loans Program [FDIC, earlier]

$$$ This has been confirmed. [Bloomberg]

Blue Chip co-founder to fight resort charges

New York AG subpoenas AIG on CDS contracts: sources

Exports, imports both falling say new trade stats

Senate panel to draft credit card bill (Reuters)

How Long Could a Ponzi Scheme Survive?

Recently a friend posed this question: If the market hadn’t gone sour, would Bernard Madoff ever have gotten caught?

I wonder.

Instead of investing his client’s money, Madoff put it in his bank account. He said he knew the day of reckoning would eventually come. But would it have come if he were able to continually pay out the promised returns? Or did it only collapse because so many people demanded principal withdrawals at once? Did it only collapse because investors lost their optimism? And if Wall Street runs on hope, how is that different?

What do you think?

Image Credit: liber, Flickr

What If No One Came?

It strikes us that the PPIP plan requires a certain faith by the administration. Specifically, that balance sheets are not actually so underwater that even a 30% subsidy is a hollow gesture. What's more, how sure is the administration that actual price discovery is something that any of these institutions actually want? Clearly, given the seller-financing leverage shell-game baked into the plan, the hope is that bids will buoy up. The problem, however, was perfectly highlighted on today's FDIC call.

What, a banker effectively asked, if his participation were to "blow a hole in the capital?" Would capital requirements be waived or adjusted to keep the institution from running afoul? (Probably not). The meaning was somewhat veiled, but the broader implication was that actual price discovery would so impact the balance sheet and impact equity capital so negatively as to reveal this particular institution to be liver sausage.

What about bids or asks that resulted in no actual transaction? Would they, one voice trembled, constitute... (gulp, deep breath)... pricing data sufficient to trigger mark-to-market treatment? (Could be!)

As if on cue, another questioner wondered if the FDIC could force participation. (Probably not). You could almost feel the exhale of held breath.

Would participation exempt an institution from special examination? (Laughter). No exhale on this one.

Could it be that the biggest problem confronting the nation isn't that Goldman Sachs might make money buying assets in the PPIP because Tim "The Safecracker" Geithner is in league with the devil? What if almost no one participated at all? One side of us thinks that we are reading too much into all this. Another thinks that if you can read between the lines you can almost hear the cracks widening.

Layoffs Watch '09: Citi

Daily Intel reports that Citi will be laying of 65 members of its cleaning staff in two weeks. Obviously, this could not come at a worse time, considering that workers are about to break ground on new offices for Pandit and his peeps, and those discarded bags of chips and cans of soda littered around the conference room's circle of Laz-y Boys ain't going to clean themselves. Nor will the spit balls that Pandito and Co. plan to launch at the glass walls during brainstorming sessions. As you'll recall, a key selling point for the $10 million project was the fact that it would create a "more open atmosphere...to encourage spontaneous meetings of executives." With this recent revelation, I'm not sure they'll be able to make good on their promise to "make Citi the best company in the world, bar none." Unless of course the laid off janitorial staff is being replaced by analysts given the choice to be canned or shine Vikram's shit for less than minimum wage. Which is entirely possible.

How the Dow Jones industrials fared Thursday (AP)

AP - Wall Street got positive news on Thursday from corporate America.

Best Buy 4Q profit dips, adj. results top Street (AP)

AP - Consumers snapped up surprising numbers of flat-screen televisions, laptops, digital cameras and cell phones during the fourth quarter, helping Best Buy Co. Inc. boost sales by 10 percent, the company reported Thursday.

When Enough Is Enough

The car's for sale in Marks, Mississippi. Sarah Goodyear

 

I got home to Mississippi with my family last week, for the first time in a couple of years. We covered a bunch of ground in a very short while.

When you grow up in a place like Mississippi, you get used to be last in everything good and first in everything bad. You're the fattest folks, the earliest-dying folks, the least-educated folks. Your schools don't have enough books or chairs. Your schoolmates have babies, sometimes a couple of them.

Given the state of the rest of the world, I expected to find Mississippi in tatters. But a funny thing happened between New York and home.

The Delta, where my spouse took the picture above, is still doggone poor, miserable and depopulating and a lot of it just flat falling down. But it wasn't noticeably worse than when I was a kid.

In Meridian, the city my grandparents live near, they're rebuilding City Hall and the local opera house. The streets look good, with new flowers planted and a public plaza on the way.

In Jackson, my mother's house seems to have tripled in value. She lives in a neighborhood that has experienced a wave of white flight. On past visits, the blocks around her place were littered with for-sale signs. But now, new people of all stripes are moving in. They had a tornado there a year or so back -- it was big news at the time, but you could never tell now because people worked so hard and so fast to fix up their homes.

My mom works as a teacher, and she explained her theory of the state's economy. As she tells it, the situation amounts to a permanent statewide recession. Sure, unemployment in Mississippi is higher than the national average, at 8.7 percent. That's just 0.1 percent lower than Ohio's, but we're used to it. We never had big union jobs to lose.

Look at her job, for example. Mississippi school teachers are among the lowest-paid educators in the U.S. The important part, where my mom is concerned, is that they do get paid.

"The money the state pays me hasn't gone up," she said. "But it still lands in my bank account at the end of every month." What she's got, she's got. And sometimes, that's enough, you know?

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When The Scammer ('s Lawyer) Becomes The Scammed!

Oh noes. Bernie Madoff lawyer Ira Lee Sorkin is being impersonated over e-mail. Suspect numero uno would obviously be Ponzi-Boy, though the fact that the sender doesn't ask for any money gives us a moment's pause (but perhaps he does so in the follow-up).

From: [redacted]

Sent: Thursday, March 26, 2009 12:22 PM

Subject: FYI: Dickstein Shapiro Email Scam

A scam message is circulating purporting to be from Dickstein Shapiro LLP, and more specifically, Ira Sorkin. A sample of the message is provided below. These messages are not being sent from the Dickstein Shapiro email system, and the email address being used is ilsorkin@lawyers.com. We are currently investigating its origin and will be notifying the authorities with whatever information we can provide.

If you receive such a message, do not reply to it. Please forward it with the email's header information (full header or show header option in most email programs) to EmailAdmin@DicksteinShapiro.com so that we can investigate further.

If you have any questions, please contact the Help Desk at x14888. Thank you for your cooperation.

___________________________________________________

From: Dickstein Shapiro LLP

Subject: Very Important

Date: Wednesday, March 25, 2009, 9:05 PM

Hello,

I am Ira Lee Sorkin Co-leader of the Firm's Securities and the Defense Attorney to Mr. Bernard Lawrence Madoff Investment Securities LLC. Who was recently alleged for a
Ponzi scheme. I'm contacting you accordingly, because this crucial matter requires a matured partnership, co-operation and assistance to make a valuable change of
name to some of his assets and monies lodged with an offshore security company that might be discovered sooner or later by the Government.

Your view to this assignment is urgently needed,if you're willingly to work with me on this, then get back to me asap.

Attorney Ira Lee Sorkin

Dickstein Shapiro LLP

In The Red

The Virgin Megastore in New York's Times Square. Jacob Ganz

 

I walked by the almost-shuttered Virgin Megastore in Times Square today, which is in the process of counting down its last four days until it closes to become a clothing store for teenagers. When Virgin closes its Union Square Megastore in May, it will leave New York City without a major record store, as far as I can tell.

The death of the record store is an over-covered event, but I couldn't help getting a little pang of sadness when I walked by the store. When was the last time a major industry's format change actually altered the physical marketplace? Trolley cars?

Photos of empty CD racks after the jump.

At 50 percent off, things are pretty picked over, but you can still find deals. And in the unlikely event you're opening a new CD store, there are plenty of racks for sale.

Empty floor. Jacob Ganz

 

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Mexico calls for boost to drugs war aid

Zuckerman Says Legal Internet Bingo Will Save Newspapers

The Obama Portfolio: Do You Know What That Is Annualized?!

I mean, you just have to give it up for the First Analyst. Hot. Hot. Hot.

The Obama Portfolio (Since Inception): +17.68%

Earlier: The Obama Portfolio

New York AG subpoenas AIG on CDS contracts: sources (Reuters)

Janus Capital Cut to `Neutral' at JPMorgan Chase

Swiss Banks Tackling Tax Evasion Head On

By telling its employees to lock the doors, draw the shades, get under the bed and hide. The Financial Times reports that in the face of questions about innocent stuff like helping clients evade taxes, from meddling bastard countries like the US, etc, Switzerland's private banks have begun banning top executives from traveling abroad, "even to neighbouring France and Germany, because of fears they will be detained as part of a global crackdown on bank secrecy."

The head of one leading private bank in Geneva said the growing determination of countries such as the US and Germany to tackle tax evasion and secrecy meant banks felt they had to take extra measures to protect employees.

"Some banks have taken this precaution," he said. "If today I go to Germany to visit two banks I deal with...German customs can take me in and question me."

"The partners are not leaving Geneva at all," said a senior industry figure close to several private banks

Europe's Free Ride

The world's major economic players are getting together next week for the G20 summit, and boy, does that sound like fun. China has been calling for a new world currency. The European Union president labeled the Obama stimulus plan "a way to hell."

David sends over James Surowiecki's take on the latter, in this week's New Yorker. Surowiecki writes:

[I]n effect, Europe is refusing to carry its share of the global economic burden and is piggybacking on us. But it's hard to see how things could have turned out otherwise. The U.S. economy, much more than Europe's, is like the proverbial shark: if it doesn't keep moving forward, it dies (or at least creates a lot of misery). In some sense, we need economic growth more than Europe does. It's not surprising that we're going to be the ones who end up paying for it.

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Fed officials hint recession in final stages

Bonuses? Here's who's hiring on Wall St.

Galbraith Says Subprime Assets Are `Permanently Impaired'

I'll Take The Case!

Just to make sure, you know, no one gets any ideas after the Elven Safecracker convinced world markets that the United States might maybe perhaps abandon the dollar, Congresswoman Michele Bachmann parachutes in to the rescue.

Rep. Michele Bachmann (R-MN) has introduced legislation that would "bar the dollar from being replace [sic] by any foreign currency."

Ah, yes. The Special Drawing Rights concept. What exactly does Bachmann have against the Chinese, we wonder. Someone should get to the bottom of this. Of course, the only candidate remotely qualified is the new, post extreme-makeover Maxine Waters.

Bachmann bill would ban global currency [The Hill's Blog Briefing Room]

US reveals sweeping regulatory overhaul

Presented By:

"Does Wallstreet Need a Sheriff?"

Disgraced Wall Street sheriff and noted hooker fucker Eliot Spitzer says yes! Angling for something (his old job? An adjunct professor position? A regular Friday night slot at Caroline's?) Spitz-y Boy will be speaking next Tuesday at Columbia as part of the business school's "Ethics In the Capital Markets" week. Register today!

Anger Flares In Scotland

The home of former Royal Bank of Scotland chief executive, Fred Goodwin, was attacked early this morning by an anonymous group threatening more attacks on "criminal bank bosses." Vandals smashed three windows of his home and one window of a car parked in the driveway. The Guardian reports:

Around 5am, emails arrived at the offices of the Edinburgh Evening News, Press Association and other media outlets saying that Goodwin's house "was attacked this morning" and giving the name of the street where he lives.

The email, sent from the address bankbossesarecriminals@mail.com, said: "We are angry that rich people, like him, are paying themselves a huge amount of money, and living in luxury, while ordinary people are made unemployed, destitute and homeless. This is a crime. Bank bosses should be jailed. This is just the beginning."

Goodwin has been at the center of national outrage for receiving a pension worth nearly a million dollars after his bank was propped with over 30 billion in government aid.

Earlier this week, listener Dan G. sent us an indicator about Goodwin. Read his letter after the jump.

Dan G. writes:

I have another Planet Money indicator: 30,000, amount in Pounds Sterling (~44,000 USD) that the London Evening Standard would pay for a paparazzi snap of disgraced head of the Royal Bank of Scotland, Sir Fred Goodwin "enjoying himself".

"He's currently worth more than Britney, maybe hovering around the Brad and Angelina with kids price," according to the picture editor, reported in the Guardian.

Briefly, and to simplify enormously, Sir Fred Goodwin steered the venerable bank into bankruptcy, got a government bail out and resigned with a pension worth 700,000 pounds a year (~1mUSD). When they realized they'd been hoodwinked, MPs asked him to return it, which he refused to do (he had already accepted a previous reduction to his package).

It was reported last week that he got a ??1.8m tax break on top of his ??16.9m. This has provoked huge national outrage in the UK, had MPs calling for him to be judged by the "court of national opinion" and vandals have thrown bricks at his house and top-of-the range Mercedes.

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TSX extends gains, powered by energy group (Reuters)

Boockvar Says U.S. Market Hasn't Hit Bottom

Former FDIC Chair Isaac Says Mark-to-Market Creates `Carnage'

MKM's Darda Says Economy Is at `Turning Point'

Wanted: Systemic Risk Regulator

The Treasury Department has released new details about its plans for regulation of the financial system. The framework for reform includes creating a single regulator to manage system risk, increasing capital and risk management requirements for systemically important firms, requiring hedge funds above a certain size to register and regulation and oversight of the derivatives market.

The talk of establishing a systemic risk regulator to oversee all financial institutions has gained increased attention in recent weeks, as Congress has focused on the government's involvement in AIG. The Treasury Department says it wants to give "a single entity the ability to supervise, examine, and set prudential requirements for these critical parts of our financial system."

How does Treasury determine which firms are "critical parts of our financial system"? Here are the characteristics:

the financial system's interdependence with the firm

the firm's size, leverage (including off-balance sheet exposures), and degree of reliance on short-term funding

the firm's importance as a source of credit for households, businesses, and governments and as a source of liquidity for the financial system.

Though there is still no word on which agency will get the job, Senate Banking Committee Chairman Christopher Dodd recently proposed creating a council of the Fed, the Federal Deposit Insurance Corp. and the Office of Comptroller of the Currency to keep a single agency from having too much power. The Bush administration originally proposed that the Federal Reserve take over the role, but mounting criticism of the Fed's role in AIG has turned some lawmakers against the idea.
Here's the take from Calculated Risk:

Imagine if the Federal Reserve had been the "systemic-risk regulator" during the bubble.

According to Greenspan in 2005 "we don't perceive that there is a national bubble", just "a little froth", and even in March 2007 Bernanke said "the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained".

How would a systemic-risk regulator help if they miss the problem?

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BlackRock's Doll Says Stocks Are in `Bottoming Process'

FTSE closes slightly up (AFP)

AFP - Leading stocks in London closed marginally higher on Thursday despite mixed US data dampening hopes for a break in the economic gloom.

FTSE closes slightly up (AFP)

AFP - Leading stocks in London closed marginally higher on Thursday despite mixed US data dampening hopes for a break in the economic gloom.

Don't nix SEC duties for systemic regulator: Schapiro (Reuters)

U.K. Can't Sell Its Debt

The U.K. economy is unwell. Like the Obama administration, the government of Gordon Brown planned to spend their way out of the crisis. Sharing more similarities with their neighbors across the pond, the U.K. also need to borrow the money to fund their plan.

But yesterday an auction of gilts (the U.K. equivalent of Treasury bills) did not get fully sold. The demand for all the gilts the government wanted investors to buy simply wasn't there. This is not good news for the government. The headlines such as this one on Bloomberg called it a calamity for Brown and a sign investors did not trust his leadership.

Brown's popularity is down to 30 percent, but these headlines may have been a little hasty. The gilts issued were for 40 years. The U.S. government doesn't even sell Treasuries beyond 30 years, so maybe investors just didn't want their money locked up for such a long time. Today's gilt auction in the U.K. was heavily oversubscribed, by three to one. These bonds are due in 2022, so maybe 13 years is not far enough out in the future to spook investors.

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Sioux Falls' jobs drop as defaults soar

Why home ownership is U.S. obsession

Iceland in the cold after collapse

U.S. food tracing system is moldy

Fed as super-regulator a super bad idea

Industry unhappy with regulatory plans

New regulations match modern finance

IBM Layoffs: Bad Economy as a Smokescreen for Outsourcing

Today’s IBM layoffs have a different nuance than most corporate axings. The company is transferring most of its global business services unit to India. From the Wall Street Journal:

International Business Machines Corp. plans to lay off about 5,000 U.S. employees, with many of the jobs being transferred to India, according to people familiar with the situation.

The technology giant has been steadily building its work force in India and other locations while reducing the number of workers based in the U.S. Foreign workers accounted for 71% of Big Blue’s nearly 400,000 employees at the start of the year, up from about 65% in 2006.

Zero Hedge’s Cornelius had this to say about the IBM layoffs:

The hullabaloo over outsourcing is completely drowned out these days (and rightly so) by discussions on the economy and there surely are many other firms who are using this as an opportunity to shift operations overseas.

The bottom line is when the economy recovers, don’t expect many of these jobs to come back.

Kurt Cagle commented:

Salaries drop for one of two reasons - either your wages remain stagnant while inflation increases, or you lose your job and are forced to take a lower paying one. When you outsource those jobs oversees, this accelerates both of these trends.

Personally, I think a critical litmus test for disbursement of government funds to companies is the requirement that those companies show that any jobs created would be in the US. Otherwise, the only benefits that would accrue would be to shareholders in the form of dividends and/or bonuses, which only exacerbates the problem.

His last idea is a good one. If the government gives money, it should be able to put conditions on that money. I don’t see how GM pouring government money into Brazil, EADS acquiring government contracts over Boeing, or rampant outsourcing are helping the national economy.

SEC chairman sees independent role for agency (AP)

AP - The head of the Securities and Exchange Commission said Thursday the agency must play a key role as an independent watchdog protecting investors in the new system of financial regulation that is being crafted.

Time To Hit The Books

Hot: The career books display Lindsey Kraft

 

Lindsey Kraft writes from the Forest Park Public Library, outside Chicago:

This book display, filled with books on career advice, at the Forest Park Public Library, was empty after a few a days. As soon as I saw it I thought to myself, "Planet Money indicator."

Library usage statistics are up all over the country. We are busier than ever! I guess that's another indicator.

They've noticed the library bump over at our hometown paper, too.

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Volcker: Go Slow on Reform

We mentioned on the podcast that former Fed chairman Paul Volcker will be leading the Obama administration's effort to reform the tax code. Volcker is widely credited with getting the country out of the stagflation mess of the 1970s.

I heard him speak briefly this week at a conference hosted by the Wall Street Journal, on how regulation should change.

I was surprised to hear Volcker (who heads the President's Economic Recovery Advisory Board) argue that we should go slow on reform. Especially given that Obama and democratic leaders are pushing for quick action.

Here's tape of what he said. That's Alan Murray, an editor at the Wall Street Journal, who tells the amusing anecdote at the beginning.

(Weird reporter diary note: For some reason journalists were taken into the room through a back route that led through the hotel kitchen. It was kind of like that scene in the movie Swingers.)

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Woo Says Market, Not Policy, Determines Reserve Currency

A Bright Spot In Job Numbers

High Frequency Economics' Ian Shepherdson spots the silver lining in today's job-loss figures. New claims for unemployment benefits rose by 8,000, to 652,000 -- about what people expected. Shepherdson says he'll need a few months' data to be sure, but writes:

The trend in claims is still upwards, though the rate of increase might be slowing.

I'll take it.

Shepherdson also notes the revision in gross domestic product for the fourth quarter of 2009, calling the move from an annual contraction of 6.2 percent to 6.3 percent trivial. He's looking for a number closer to 4 percent for the quarter we're now in. Again, it's not what you'd want to call rosy, but you could consider it better.

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$250 Social Security Stimulus Checks are in the Mail

The social security stimulus package is on its way. The stimulus comes in the form of $250 checks for social security recipients. CNN reports:

An estimated 50 million Social Security and Supplemental Security Income (SSI) recipients will receive their one-time $250 economic stimulus check starting in early May — several weeks ahead of schedule, Vice President Joe Biden announced Thursday.
Vice President Biden says the checks will “make a big difference” for older Americans and those with disabilities.

Vice President Biden says the checks will “make a big difference” for older Americans and those with disabilities. The $250 checks “will make a big difference in the lives of older Americans and people with disabilities — many of whom have been hit especially hard by the economic crisis that has swept across the country,” Biden said in a written statement.

“Big difference” is an overstatement, but it’s a nice gesture.

Hatheway Sees Signs of U.S. Economy Stabilizing

Cantor's Pope Sees Foundations for Sustainable Stock Rally

Space Tourism Stable Despite Dwindling Number of Billionaires

Charles Simonyi, a US billionaire of Microsoft fame, set a record today as the world’s only two-time space tourist. From the Times of India:

Hungarian-born Simonyi, 60, who made much of his fortune developing software at Microsoft, travelled into space in the cramped interior of the Soyuz rocket alongside Padalka and US astronaut Michael Barratt. Simonyi…paid a total of $60 million for his two space trips.

Space Adventures admitted its business had been affected by the global financial crisis. “The number of billionaires has been cut in half,” Anderson told Reuters, but added that demand for space trips appeared to be stable for now.