Ireland's economy loses coveted AAA rating

Ireland was stripped of its top AAA credit ranking and downgraded to AA+ by Standard & Poor’s (S&P) yesterday while being warned that it could drop further if Dublin fails to get its public finances under control.
Source: Latest Business News from Times Online | 31 Mar 2009 | 7:57 pm

Oh No She Di'Int

Chin up, mon chichis. You'll always be welcome at the Hawaiian Tropic Zone (for now).

SOHO House no longer wants to be a place where bankers flock to drink and flirt. Sources told us several financial types, already hit by the economy, had their egos slammed when they were notified by the club that their membership would not be renewed as it was returning to its "artsy" roots. Soho House US operations director Mark Somen told Page Six, "We recently celebrated our fifth anniversary and want to make sure we are staying true to our creative roots.

Bankers Are No-No's At Soho [NYP]



Source: Dealbreaker | 31 Mar 2009 | 2:44 pm

Get Out There And Make Something Of Yourself

This is admittedly a little under the wire, but if you're sans job/will to live today, perhaps consider participating in an event for your kind going down at Tompkins Square Park, circa 1pm. It's called the Unemployment Olympics and only those who can prove they've been canned will be allowed to get in on the action. RVSP to organizer Nick Goddard here. Guessing you should do that rightnow, and then commence raising your blood alcohol level to the state that'll get you through things like the "Fax machine toss."

---

In a conspiracy keep your friends close and your enemies closer. Click to Learn More stateofplaymovie.net

Source: Dealbreaker | 31 Mar 2009 | 2:30 pm

Retirement Agreeing With Joseph Cassano

Sure, ABC News reports that AIG's most famous alum is probably going to be brought up on federal fraud charges for his role in kind of bringing the company down. And yeah, when asked for comment on the sitch, he sort of acts like a dick, being all, "I don't want to talk about it." But the fact of the matter remains: Cassano, once a regular Jon Lovitz doppelgänger is looking better than ever! He's definitely lost some lbs, and there just seems to be a certain joie de vivre going on around him. Perhaps it's the daily bike rides? That's what we're thinking. Unfortunately, the new look will probably work against Joe C, once he's placed in a federal Pound Me In The Ass Prison, but we'll cross that bridge when we get there.

Source: Dealbreaker | 31 Mar 2009 | 1:55 pm

G19? France Says It May Walk

World leaders are supposed to be sitting down for a one-day economic summit on Thursday in London, when the G20 meets to consider the global recession. Facing an enormous to-do list, they're also showing signs of a severe split in priorities.

The U.S. and the U.K. want a global stimulus package, with British Prime Minister Gordon Brown calling for a "global new deal." Other European Union members say they're doing enough to stimulate the economy already. They want strict new rules to regulate the financial system. Now French President Nicolas Sarkozy says he won't sign on to any agreement that lacks a strong global regulator.

It's hard to see how much could possibly get accomplished in a one-day meeting whose agenda ranges from fending off trade barriers to overhauling the financial system and dealing with climate change.

Simon Johnson previews the G20 with a look at its own communique. He finds it lacking in substance and writes, "[U]nder current dire circumstances, window dressing is not a good reason to hold a summit."

Meanwhile, the World Bank today released another gloomy outlook. The World Bank says the global economy will shrink this year for the first time since World War II, by 1.7 percent. A recovery 2010 will be sketchy, the bank says. For the poorest countries, the situation represents "nothing less than an emergency."

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Source: NPR Blogs: Planet Money | 31 Mar 2009 | 1:40 pm

Wall Street opens higher as banks jump (Reuters)

Reuters - Stocks rose at the open on Tuesday as positive developments in European financials helped bank shares and investors shrugged off a drop in home prices as having already been priced in to the markets.

Source: Yahoo! News: Stock Markets News | 31 Mar 2009 | 1:39 pm

US house prices 'see record fall'

US house prices fell by a record amount in January compared with a year earlier, according to a closely-watched index.
Source: BBC News | Business | World Edition | 31 Mar 2009 | 1:36 pm

Porsche cleared over VW short squeeze as profits jump

Porsche has been cleared by Germany's financial regulator for secretly building up a 74.1pc stake in VW that send shares in the Beetle maker rocketing when it was revealed and left shortsellers with heavy losses.
Source: Telegraph Finance | 31 Mar 2009 | 1:35 pm

Wall Street rebounds on last day of the quarter (AP)

AP - Wall Street is resuming its advance on the last day of the quarter as investors grow more optimistic about an economic recovery.

Source: Yahoo! News: Stock Markets News | 31 Mar 2009 | 1:35 pm

Ford Learns Lesson From Hyundai (F)

Source: 24/7 Wall Street | 31 Mar 2009 | 1:29 pm

Stocks set for gains

Investors appeared ready to wade back into the market on the last day of March, pointing to a solid start for Wall Street.
Source: Business and financial news - CNNMoney.com | 31 Mar 2009 | 1:29 pm

Wall Street set for higher open, banks rise (Reuters)

Reuters - Wall Street was poised to open higher on Tuesday as positive developments in European financials helped bank shares and investors shrugged off a drop in home prices as already being accounted for in the markets.

Source: Yahoo! News: Business | 31 Mar 2009 | 1:26 pm

U.S. January home prices drop record 19 percent (Reuters)

Reuters - Prices of U.S. single-family homes in January plunged a record 19.0 percent from a year earlier, indicative of a U.S. housing market that is still in the throes of a deep recession, according to a Standard & Poor's/Case-Shiller report on Tuesday.
Source: Yahoo! News: Business | 31 Mar 2009 | 1:24 pm

US, Iran the offstage drama at Afghan meet (AP)

AP - U.S. Sec. of State Hillary Rodham Clinton shared a conference table Tuesday with a senior Iranian diplomat at an international session on the future of Afghanistan, but did not react to the Iranian's call for a buildup of Afghan security.

Source: Yahoo! News: Stock Markets News | 31 Mar 2009 | 1:24 pm

Visteon UK collapse puts 600 jobs at risk

Some 600 British jobs are under threat after a UK subsidiary of Visteon Corporation, the American car parts maker that was spun out of Ford in 2000, filed for bankruptcy protection as the demand for vehicles continues to decline across the world.
Source: Latest Business News from Times Online | 31 Mar 2009 | 1:22 pm

Wall St looks to end month with rally

Investors were hopeful that US stocks would end the month with a rally before the market opened on Tuesday as buyers eyed bargains after Monday's heavy sell-off
Source: Financial Times - US homepage | 31 Mar 2009 | 1:22 pm

Chicago Sun-Times parent files for bankruptcy

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 31 Mar 2009 | 1:21 pm

Barclays in talks on £3bn iShares deal

The bank is in exclusive negotiations with CVC Capital Partners, the private equity group, to sell the exchange traded funds business of its iShares subsidiary in a deal worth about £3bn
Source: Financial Times - US homepage | 31 Mar 2009 | 1:17 pm

Economic Report: Home values sink at record pace in January

Home values in 20 major U.S. cities fall at the fastest rate on record in January and are now down a record 19% in the 12 months ending in January, Standard & Poor's reports.

Source: MarketWatch.com - Top Stories | 31 Mar 2009 | 1:16 pm

U.S. January home prices plunge record 19 percent

NEW YORK (Reuters) - Prices of U.S. single-family homes in January plunged a record 19.0 percent from a year earlier, indicative of a U.S. housing market that is still in the throes of a deep recession, according to the Standard & Poor's/Case-Shiller Home Price Indices.
Source: Reuters: Business News | 31 Mar 2009 | 1:15 pm

Fortis slumps to $37 billion loss on sale of banking operations

Belgian financial services group Fortis on Tuesday announced a massive 28 billion euro ($36.9 billion) loss for 2008 due to the sale of its Dutch and Belgian banking operations.

Source: MarketWatch.com - Top Stories | 31 Mar 2009 | 1:15 pm

CNOOC Profits Jump (CEO, SNP)

Source: 24/7 Wall Street | 31 Mar 2009 | 1:13 pm

Stock futures rise on economic, bank hopes

NEW YORK (Reuters) - Stock futures pointed to a higher open on Tuesday as positive developments in European financials helped bank shares and investors hoped the day's data will boost sentiment that the slump is moderating.
Source: Reuters: Business News | 31 Mar 2009 | 1:13 pm

Chicago Sun-Times parent files for bankruptcy

NEW YORK (Reuters) - The Sun-Times Media Group, parent of the Chicago Sun-Times newspaper, filed for bankruptcy protection on Tuesday, earning Chicago the distinction of being the first U.S. city served by two insolvent newspapers.
Source: Reuters: Business News | 31 Mar 2009 | 1:10 pm

Home prices post record drop in January

A widely watched index shows American home prices dropped by the sharpest annual rate on record in January.

Source: L.A. Times - Business | 31 Mar 2009 | 1:09 pm

World Bank offers trade boost, OECD casts G20 shadow

LONDON (Reuters) - The World Bank announced a $50 billion program on Tuesday to counter a decline in global trade and Britain called on G20 leaders to supply "the oxygen of confidence" to drag the world economy out of recession.
Source: Reuters: Business News | 31 Mar 2009 | 1:07 pm

World Bank offers trade boost, OECD casts G20 shadow (Reuters)

Reuters - The World Bank announced a $50 billion program on Tuesday to counter a decline in global trade and Britain called on G20 leaders to supply "the oxygen of confidence" to drag the world economy out of recession.
Source: Yahoo! News: Business | 31 Mar 2009 | 1:07 pm

Record drop in home price index

Housing prices in 20 major cities fell at record monthly and annual levels in January, according to a private report issued Tuesday, with prices down 2.8% from December and 19% from a year earlier.
Source: Business and financial news - CNNMoney.com | 31 Mar 2009 | 1:02 pm

NewsWatch: U.S. stock futures rise on final day of first quarter

U.S. stock futures bounce higher ahead of the release of consumer confidence data, though the broader market is on course to post a double-digit percentage loss for the quarter.

Source: MarketWatch.com - Top Stories | 31 Mar 2009 | 1:00 pm

Metals Stocks: Gold rises first day in three as dollar weakens

Gold futures rise for the first session in three, climbing above $920 an ounce as the slide in the U.S. dollar increased gold’s appeal as an investment alternative.

Source: MarketWatch.com - Top Stories | 31 Mar 2009 | 12:58 pm

Barclays talks to CVC on iShares sale: source

LONDON (Reuters) - Barclays is in exclusive talks to sell its iShares asset management unit to CVC Partners for about 3 billion pounds ($4.3 billion), a person familiar with the situation said on Tuesday.
Source: Reuters: Business News | 31 Mar 2009 | 12:57 pm

Barclays talks to CVC on iShares sale: source (Reuters)

Reuters - Barclays is in exclusive talks to sell its iShares asset management unit to CVC Partners for about 3 billion pounds ($4.3 billion), a person familiar with the situation said on Tuesday.
Source: Yahoo! News: Business | 31 Mar 2009 | 12:57 pm

OECD sees bleak global outlook, soaring job losses

PARIS (Reuters) - The world economy will shrink at a far faster pace than originally expected this year, sending unemployment soaring and highlighting the need for extra steps to halt the crisis, the OECD said on Tuesday.
Source: Reuters: Business News | 31 Mar 2009 | 12:55 pm

OECD sees bleak global outlook, soaring job losses (Reuters)

Reuters - The world economy will shrink at a far faster pace than originally expected this year, sending unemployment soaring and highlighting the need for extra steps to halt the crisis, the OECD said on Tuesday.
Source: Yahoo! News: Business | 31 Mar 2009 | 12:55 pm

Futures Movers: Oil futures rebound after 8% plunge in previous session

Oil futures rise after tumbling nearly 8% in the previous session, as dollar weakness and gains in U.S. stock futures fueled a rebound in energy prices.

Source: MarketWatch.com - Top Stories | 31 Mar 2009 | 12:52 pm

Merkel gives assurances on Opel

German Chancellor Angela Merkel gives assurances that any investor in GM subsidiary Opel will have state support.
Source: BBC News | Business | World Edition | 31 Mar 2009 | 12:48 pm

Opening Bell: 03.31.09

JP Morgan Takes The Lead In Rights Offers (Bloomberg)
JP Morgan is pretty much kicking the shit out of their nearest competitor in arranging rights this year - they're sitting at $12.8B to Goldman's $6.3B (UBS is tied for third with an Italian bank at $3.1B).

"There's a massive shift in terms of market share among the investment banks," said Patrick Lemmens, who helps manage about 10 billion euros ($13 billion) at Robeco Group in Rotterdam, including JPMorgan shares. "The also-rans will get substantially less market share, and JPMorgan has the advantage of being able to use its balance sheet better than others."

MS Close To $6B For Real Estate Fund (Reuters)

"Morgan Stanley (MS.N) is close to raising $6 billion for a new global property fund, falling short of its earlier target of $10 billion, sources with direct knowledge of the plan said.

The Morgan Stanley Real Estate Fund VII Global, the latest in a series of its international property investment funds, originally targeted to raise $10 billion, Reuters reported in September."

Google Launches VC Fund (WSJ)
"Google Inc. announced more details about its highly anticipated venture-capital fund, in which it plans to commit roughly $100 million over the next year, said people familiar with the matter.

In a blog post Monday night, the company announced William Maris, a former entrepreneur whom Google hired to start the fund, and Rich Miner, a former executive in its mobile unit, as managing partners with the fund. Their roles and the expected announcement were previously reported in The Wall Street Journal."

Fortis Posts $37B Loss (NYT)
The former Belgian powerhouse reported a $37B loss for 2008, proving it can play with the big boys - now all they're waiting on is a takeover by the French.

"The company and the Belgian government reached a revised deal on March 6 with BNP, under which the French bank would pay €2.9 billion in shares for 75 percent of Fortis Bank; that's about €510 million more for shareholders than in the previous offer. The new deal also provides guarantees that the insurance unit will remain in business. BNP Paribas will become the largest euro zone bank in terms of deposits if the deal goes through."

It's Not Just An American Thing (WSJ)
The French, not to be outdone by their American counterparts, are seeking to limit executive pay and kill stock option disbursement until the end of 2010. The article cites the need to quell French public anger over pay, but the French people bitch incessantly about any and everything, so I can't imagine that's the only thing that was at play here. Or maybe it was.

"To avoid further flare-ups, Finance Minister Christine Lagarde urged Medef, the country's largest business group, to set up a "committee of wise men" to help companies adjust managers' pay when they cut jobs. But, in a letter to Medef, Ms. Lagarde didn't specify what the government might consider appropriate pay for managers at such companies."

Global Banks To Write Down $17B More (Reuters)
"J.P. Morgan Securities forecast global wholesale and investment banks to incur additional pretax writedowns of $17 billion for the rest of 2009 to reach mark-to-market valuations of structured credit assets.

The brokerage said it saw the highest need for further pretax writedowns at Deutsche bank (DBKGn.DE) ($4.9 billion) and Barclays Plc (BARC.L) ($3 billion)."

Contracts Now Seen As Being Rewritable (NYT)
"The depth of the recession and the use of taxpayer dollars to bail out companies have made it politically acceptable for overseers to tinker with employment agreements.

So federal and local governments are looking for ways to pare payouts, endangering the promises made before the financial storm to people like Wall Street traders, automobile workers and garbage collectors."

Source: Dealbreaker | 31 Mar 2009 | 12:47 pm

Government Tries Again to Get Royalty Payments (APC, BP, CVX, XOM)

Source: 24/7 Wall Street | 31 Mar 2009 | 12:43 pm

Chicago's Sun-Times Media files for Chapter 11

Sun-Times Media Group Inc. has become the second newspaper publisher in the Chicago area, and the latest among several around the U.S., to file for Chapter 11 bankruptcy protection at a time of unprecedented advertising revenue declines in the newspaper industry.

Source: MarketWatch.com - Top Stories | 31 Mar 2009 | 12:43 pm

Lord Myners acted 'unfairly' in RBS pension row

Read Sir Tom McKillop's letter in full
Source: Latest Business News from Times Online | 31 Mar 2009 | 12:40 pm

Retailers: Sales up on booze, smokes, ahead of tax (AP)

AP - Some Kentucky retailers say people are stocking up on booze and cigarettes before new taxes hit later this week.
Source: Yahoo! News: Business | 31 Mar 2009 | 12:39 pm

Nestlé chief warns of long-term hazards of stimulus plans

Increased government spending through stimulus plans risks plunging the world into a new crisis and has already sparked a return of inflation, according to the chairman of Nestlé
Source: Financial Times - US homepage | 31 Mar 2009 | 12:36 pm

Before the Bell: Alcoa, Lennar, Ingersoll-Rand in spotlight

U.S. stock futures bounced higher Tuesday after the prior day’s heavy losses ahead of a busy slate of data, including figures on house prices and consumer confidence.

Source: MarketWatch.com - Top Stories | 31 Mar 2009 | 12:35 pm

Indications: U.S. stock futures rise on final day of first quarter

U.S. stock futures bounce higher ahead of the release of consumer confidence data, though the broader market is on course to post a double-digit percentage loss for the quarter.

Source: MarketWatch.com - Top Stories | 31 Mar 2009 | 12:34 pm

Lennar's deeper quarterly loss points to more pain for builders

Lennar Corp.’s wider quarterly loss and a new promotion featuring rock-bottom interest rates to attract nervous buyers show that home builders are bracing for the tough times to continue through the rest of the year.

Source: MarketWatch.com - Top Stories | 31 Mar 2009 | 12:31 pm

RBS ex-chair insists Myners knew

Former RBS chairman Sir Tom McKillop says City Minister Lord Myners was briefed about former chief Sir Fred Goodwin's pension.
Source: BBC News | Business | World Edition | 31 Mar 2009 | 12:30 pm

G20: what is it and how does it work?

A roundup of facts and figures about the G20 summit being held in London.
Source: Telegraph Finance | 31 Mar 2009 | 12:29 pm

World stocks recover, London up 2.52% (AFP)

AFP - Global stock markets recovered Tuesday as investors hunted for bargains a day after sharp losses caused by heightened concerns for the US economy and in particular its ailing auto sector.

Source: Yahoo! News: Stock Markets News | 31 Mar 2009 | 12:28 pm

Bloomsbury thrives 'post-Potter'

Publisher Bloomsbury reports better-than-expected profits for 2008 in its first year in the "post-Harry Potter era".
Source: BBC News | Business | World Edition | 31 Mar 2009 | 12:27 pm

G20: why this summit does matter

The leaders of the world's major economies meet at the G20 Summit a little over six months since the collapse of Lehman Brothers rocked financial markets.
Source: Telegraph Finance | 31 Mar 2009 | 12:26 pm

Thousands of senior civil servants doctors and judges have pay rises capped at 1.5pc

Gordon Brown announces caps for civil servants doctors and judges while senior military officers get a 2.8 per cent increase.
Source: Telegraph Finance | 31 Mar 2009 | 12:22 pm

Porsche profits rise four-fold on VW stake

Porsche today posted a four-fold rise in profits due to its stake in Volkswagen but saw sales of its luxury cars slide as consumers reined in spending on big-ticket purchases.
Source: Latest Business News from Times Online | 31 Mar 2009 | 12:19 pm

Fortis outlines insurance future after $37 billion loss

BRUSSELS (Reuters) - Fortis NV said it has a viable future as an insurance group on Tuesday after plunging to a 28 billion euro ($37 billion) net loss in 2008 on the state takeover of its troubled banking activities.
Source: Reuters: Business News | 31 Mar 2009 | 12:15 pm

France is threatening G20 walkout

France will walk away from this week's G20 summit if its demands for stricter financial regulation are not met, its finance minister tells the BBC.
Source: BBC News | Business | World Edition | 31 Mar 2009 | 12:12 pm

Top Analyst Downgrades (ACN, FCX, MBRX, NXY, PFG, RBA)

Source: 24/7 Wall Street | 31 Mar 2009 | 12:12 pm

London Markets: Marks & Spencer helps take edge off London's quarterly loss

London shares rebound to close out the first quarter, helped along by well-received updates from retailer Marks & Spencer, among others.

Source: MarketWatch.com - Top Stories | 31 Mar 2009 | 12:12 pm

Top Analyst Upgrades (AA, ADSK, GOOG, GES, TMX)

Source: 24/7 Wall Street | 31 Mar 2009 | 12:10 pm

Barclays in talks over £3bn iShares sale to CVC

CVC Capital Partners, the private equity group, is close to clinching the acquisition of Barclays' iShares derivatives investment business for £3 billion after being chosen as preferred bidder.
Source: Latest Business News from Times Online | 31 Mar 2009 | 11:59 am

Ford offers buffer to buyers who lose jobs

Ford Motor Co. introduced a program Tuesday to compete against its battered rivals - including help for customers who buy a car and then lose their job.
Source: Business and financial news - CNNMoney.com | 31 Mar 2009 | 11:59 am

Gold: 'How I am hedging my portfolio against hyperinflation'

If the economist Tim Lee is right about hyperinflation my holdings are currently far from ideal.
Source: Telegraph Finance | 31 Mar 2009 | 11:53 am

M.Stanley property fund raises $6 billion, CIC helps

HONG KONG/NEW YORK (Reuters) - Morgan Stanley is close to raising $6 billion for a new global property fund, falling short of its earlier target of $10 billion, sources with direct knowledge of the plan said on Tuesday.
Source: Reuters: Business News | 31 Mar 2009 | 11:52 am

Here comes your stimulus bonus

You're likely to see some more green in the next couple of weeks. Not only on the trees. Very possibly in your wallet, too.
Source: Business and financial news - CNNMoney.com | 31 Mar 2009 | 11:50 am

Sorkin making a Facebook movie?

Source: Business and financial news - CNNMoney.com | 31 Mar 2009 | 11:48 am

More pain in store for autoworkers

More pain is on the way for the people and communities that depend on the automotive industry. That's why President Obama has appointed an autoworker czar to look out for them.
Source: Business and financial news - CNNMoney.com | 31 Mar 2009 | 11:45 am

Dollar should remain the world's currency

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 31 Mar 2009 | 11:37 am

FAA: Air travel will fall 7.8% in '09

The number of travelers boarding U.S. airliners will plunge 7.8% in 2009, a drop matched only in the year following the 2001 terrorist attacks on New York and Washington, according to a U.S. government forecast out Tuesday.
Source: Business and financial news - CNNMoney.com | 31 Mar 2009 | 11:36 am

Google forms $100 million venture fund

NEW YORK (Reuters) - Google Inc is forming a $100 million fund to invest in early-stage start-up firms.
Source: Reuters: Business News | 31 Mar 2009 | 11:33 am

Lofty ambitions

High hopes for Barack Obama's European trip
Source: BBC News | Business | World Edition | 31 Mar 2009 | 11:22 am

Bellway cuts dividend 83% on house demand fall

Bellway, the British housebuilder, has cut its interim dividend by 83 per cent after declining demand for new houses and writedowns on land values pushed the group into the red in the first half of its financial year.
Source: Latest Business News from Times Online | 31 Mar 2009 | 11:20 am

KLA-Tencor Kills V-Bottom Chip Recovery Hopes (KLAC, AMAT, LRCX)

Source: 24/7 Wall Street | 31 Mar 2009 | 11:16 am

Jarvis axes 450 jobs amid fall in rail work

Jarvis, the railway maintenance group, warned this morning that full year results would be below expectations as it axed 450 jobs.
Source: Latest Business News from Times Online | 31 Mar 2009 | 11:11 am

Trucking jobs: No longer a fall back

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 31 Mar 2009 | 11:11 am

Taxing issue

Cayman Islands' concern at G20 tax haven moves
Source: BBC News | Business | World Edition | 31 Mar 2009 | 11:07 am

Asia Development Bank Cuts China And Southeast Asia Growth Forecasts

Source: 24/7 Wall Street | 31 Mar 2009 | 10:59 am

Barclays in exclusive £3bn talks with CVC to sell iShares

Barclays is in exclusive talks to sell its exchangetraded funds business iShares to private equity firm CVC Capital Partners for around £3bn.
Source: Telegraph Finance | 31 Mar 2009 | 10:46 am

Government debt rises to £750bn

Government debt rose to £750bn in 2008, more than half of gross domestic product, according to official data.
Source: BBC News | Business | World Edition | 31 Mar 2009 | 10:46 am

Will Wagoner End Up At Nissan/Renault?

Source: 24/7 Wall Street | 31 Mar 2009 | 10:20 am

G20 summit: 20 fascinating facts

World leaders diplomats and demonstrators are heading to London for the G20 summit. Here are 20 facts about the event:
Source: Telegraph Finance | 31 Mar 2009 | 10:13 am

Disney joins forces with YouTube (DIS, GOOG)

Source: 24/7 Wall Street | 31 Mar 2009 | 10:13 am

Futures Rise as Traders Tap Breaks on Selloff (Market Update)

News at a Glance

• Data Due: Housing, manufacuting and consumer reports coming.
• Ready to Rebound: Stock futures point to a higher open.
• Trade You: World Bank to establish $50 bln trade fund.
• Mile-High Wi-Fi: American Airlines expands Internet service.

The Lowdown

A day after Washington's smackdown of Detroit left equities in a deep hole, traders appeared set to go bargain-hunting ahead of new economic data.

Stocks looked to open higher Tuesday, recovering some of Monday's heavy losses. Shortly after 7 a.m., Dow, Nasdaq and S&P 500 futures were trading above fair value.

The early optimism could turn on the day's upcoming economic data, which will offer updates on the housing, manufacturing and retail sectors. Recent economic data have suggested the recovery may be at hand, but economists cautioned against handicapping the end of a recession too soon.

Still, before the bell, traders were poised to swoop in on what they considered undervalued stocks in the wake of yesterday's auto-inspired selloff.

On Monday, the White House's rejection of turnaround plans from General Motors (GM) and Chrysler left the future of the American auto industry murky at best, triggering a mass exodus from the financial, energy, capital goods and materials sectors. The Dow dropped 254 points, or nearly 3.3%.

Attention shifted abroad with the emergence of a new plan to stimulate trade at the G-20 meeting. World Bank President Robert Zoellick unveiled a $50 billion global trade liquidity program to jumpstart the flow of goods and services between nations once more. The World Bank expects global trade to drop 6% in 2009, its largest single-year decline in 80 years, according to Reuters. The fund is designed to bolster trade credit, which had taken a hit with the broader credit market.

World markets were mixed. In Asia, Japan's Nikkei dropped 1.5%, while Hong Kong's Hang Seng picked up 0.9%. In Europe, the U.K.'s FTSE rose 3.0% in midday trading.

In energy, oil prices bounced with stock futures. By 6:59 a.m., crude traded up $1.37 at $49.78 a barrel.

Corporate News

• Google (GOOG) is launching its own venture capital fund, the firm said. Google Ventures take $100 million from the parent company and invest it in promising start-ups across a variety of industries, The Wall Street Journal reported, citing anonymous sources.
• Sara Lee (SLE) is considering selling off its household and personal care business, Reuters reported. The business accounts for roughly $2.3 billion in revenue, about 17% of the firm's top line.
• American Airlines (AMR) plans to extend its in-flight Internet access to roughly half its aircraft, about 300 planes, over the next two years, the Associated Press reported. The carrier, which has been testing the service on 15 of its planes, plans to charge as much as $12.95 to connect in middair to a flying WiFi hot spot.

The Economy

• The January reading of the S&P/Case-Shiller Composite Home Price Index is scheduled to be released at 9 a.m. In December, the index fell 18.55%. For January, economists expect the index to have fallen 18.6%.
• The March reading of the Chicago Purchasing Managers' Index for regional business activity is scheduled to be released at 9:45 a.m. by the Chicago branch of the National Association of Purchasing Management. The Chicago PMI stood at a reading of 34.2 in February. Economists predict the index will have risen to a March reading of 34.4. A reading of less than 50 indicates contraction.
• The March reading of the Consumer Confidence Index is scheduled to be released at 10 a.m. by the Conference Board. In February, confidence came in at a reading of 25.0. For March, economists expect a bump to a reading of a 28.0.

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Source: SmartMoney.com | 31 Mar 2009 | 10:08 am

Mining slump

Western Australia hit by global slowdown
Source: BBC News | Business | World Edition | 31 Mar 2009 | 10:06 am

The European Perspective On The Economy Can’t Look Worse

Source: 24/7 Wall Street | 31 Mar 2009 | 9:52 am

Asia stocks mixed amid gloomy growth forecasts (AP)

AP - Asian markets were mixed Tuesday amid low expectations for the summit of G-20 leaders and gloomy forecasts the region would continue to struggle as the global economy flounders. European markets rose in early trade.

Source: Yahoo! News: Stock Markets News | 31 Mar 2009 | 9:49 am

Global economy set for worst fall since WWII

The world’s leading developed countries are on course for the worst economic slump since the Second World War, according to the Organisation for Economic Co-operation and Development (OECD), as it dramatically revised down its forecasts for 2009.
Source: Latest Business News from Times Online | 31 Mar 2009 | 9:49 am

Google to venture into start-ups

Search giant Google eyes new talent as it enters into venture capitalism, pledging to invest millions of dollars.
Source: BBC News | Business | World Edition | 31 Mar 2009 | 9:49 am

Japan outlines new stimulus move

Prime minister Taro Aso unveiled the outlines of a new stimulus package and a mid-term economic growth strategy, but failed to indicate how much more Japan planned to spend to revive its ailing economy
Source: Financial Times - US homepage | 31 Mar 2009 | 9:36 am

GM to decide Hummer's fate

General Motors the struggling carmaker fighting to stave off Chapter 11 bankruptcy protection could shed its gasguzzling Hummer brand on Tuesday according to online edition of the New York Times.
Source: Telegraph Finance | 31 Mar 2009 | 9:34 am

U.S. stock futures point to higher open (Reuters)

Reuters - * U.S. stock index futures pointed to a higher open on Wall Street on Tuesday, with futures for the S&P 500 up 0.8 percent, Dow Jones futures 0.8 percent higher, and Nasdaq 100 up 1.1 percent at 0903 GMT.
Source: Yahoo! News: Stock Markets News | 31 Mar 2009 | 9:25 am

G20 summit: World Bank urges global system to stem protectionism

A new global warning system against protectionism should be the priority at the G20 summit according the World Bank.
Source: Telegraph Finance | 31 Mar 2009 | 9:18 am

Obama's tough auto stance may include bankruptcy

WASHINGTON (Reuters) - President Barack Obama ordered General Motors Corp and Chrysler LLC to accelerate their survival efforts and brace for possible bankruptcy, saying neither company had done enough to justify the taxpayer money they were seeking.
Source: Reuters: Business News | 31 Mar 2009 | 9:17 am

FTSE 100 finds reason to bounce back

As global leaders start to arrive in the UK London winds up for this week's G20 meetings.
Source: Telegraph Finance | 31 Mar 2009 | 8:12 am

Japan poised for new stimulus as jobless surge

Japan’s prime minister, Taro Aso, is poised to unveil new emergency economic rescue plans that are expected to include an additional Y10 trillion (£70 billion) stimulus package as unemployment surges to a three-year high.
Source: Latest Business News from Times Online | 31 Mar 2009 | 7:47 am

Former KB Home CEO Bruce Karatz pleads not guilty

Karatz is accused of backdating stock options for personal profit. If convicted on all 20 felony charges, he could face 415 years in prison. ...
Source: RSS feed - channel BNPaperBusiness | 31 Mar 2009 | 7:00 am

Access to COBRA healthcare subsidy may expand

Under California bill, people laid off from businesses with fewer than 20 workers would qualify for the temporary federal subsidy. Health insurers would have to notify previously insured employees. ...
Source: RSS feed - channel BNPaperBusiness | 31 Mar 2009 | 7:00 am

Greeting card start-up requires testing, research

Make samples and get to know your target market to increase chances of success. Dear Karen: I want to start a greeting card company using...
Source: RSS feed - channel BNPaperBusiness | 31 Mar 2009 | 7:00 am

Entrepreneurs bounce business ideas off bar crowds

Organizers bill Bloblive, which includes events in the L.A. area, as a marriage between the Open Mic Night of the club scene and the quick elevator pitch of the business world. ...
Source: RSS feed - channel BNPaperBusiness | 31 Mar 2009 | 7:00 am

Glendale man pleads guilty in $14-million investment scam

Antoine Haroutunian, who operated Luminous Wealth Management, faces up to 20 years in prison. He has also admitted to stealing $450,000 from Bank of America and filing a fraudulent tax return. ...
Source: RSS feed - channel BNPaperBusiness | 31 Mar 2009 | 7:00 am

Ouster of GM's Wagoner may be a double-edged sword

By showing General Motors chief Rick Wagoner the door, President Obama is in effect announcing that if the government picks up the tab for a stumbling business, it gets the right to call the shots.

Source: L.A. Times - Business | 31 Mar 2009 | 7:00 am

New GM chief Kent Kresa has been here before

The interim GM chairman pulled Northrop Grumman back from the brink of extinction. As the new interim chairman...
Source: RSS feed - channel BNPaperBusiness | 31 Mar 2009 | 7:00 am

Obama takes step over the line that separates government from private industry

His automaker bailout plan wades into 'industrial policy,' in which government officials, not business executives or the free market, decide what products a firm makes and how it charts its future.

President Obama's plan to save failing U.S. automakers -- and make them the instruments for creating a cleaner, greener transportation system -- marked a major step across the line that traditionally separates government from private industry.

Source: L.A. Times - Business | 31 Mar 2009 | 7:00 am

Chrysler is being pushed to merge with Fiat

The Obama administration tells the smallest of the Big Three car makers to join with the Italian company within 30 days or be forced into Bankruptcy Court.

The Obama administration on Monday gave Chrysler Corp. an ultimatum: join forces with Italy's Fiat within 30 days or prepare to enter Bankruptcy Court.

Source: L.A. Times - Business | 31 Mar 2009 | 7:00 am

GM, Chrysler face bailout ultimatum

The automakers must make drastic changes or be forced into bankruptcy, Obama says.

Declaring that the country had reached the end of the road with Detroit's automakers, President Obama on Monday mapped a new course for bailed-out General Motors Corp. and Chrysler in a series of moves designed to force the hands of workers, creditors and others with a stake in the companies.

Source: L.A. Times - Business | 31 Mar 2009 | 7:00 am

Weekend box-office sales

Source: RSS feed - channel BNPaperBusiness | 31 Mar 2009 | 7:00 am

Entrepreneurs bounce business ideas off bar crowds

Organizers bill Bloblive, which includes events in the L.A. area, as a marriage between the Open Mic Night of the club scene and the quick elevator pitch of the business world.

It's a Monday night at a loud bar, and in one corner stands a microphone.

Source: L.A. Times - Business | 31 Mar 2009 | 7:00 am

Disney may base cruise ship in Port of Los Angeles

An agreement calls for the Disney Wonder to come to San Pedro in 2011. If the plan is approved by harbor commissioners, the vessel may remain for five years and potentially create 2,600 jobs. ...
Source: RSS feed - channel BNPaperBusiness | 31 Mar 2009 | 7:00 am

Pakistanis end police siege after 20 killed

Lahore was reeling after suffering the second high-profile terror attack in a month when gunmen stormed a police academy, killing as many as 20 people and injuring up to 100
Source: Financial Times - US homepage | 31 Mar 2009 | 6:39 am

NZ stocks: Shares slide nearly 2pc

The New Zealand sharemarket failed to make up lost ground today after falling in early trading on the back of big declines in United States equities. The benchmark NZSX-50 index ended the financial quarter down 51.6 points, or...
Source: New Zealand Herald - Business | 31 Mar 2009 | 6:21 am

Currency: Dollar makes small again on US

The New Zealand dollar closed the financial quarter on a strong note, making up ground this afternoon and eying US57c. By 5pm, the kiwi was at US56.82c from US56.46c late yesterday afternoon, having slipped back towards US56c earlier...
Source: New Zealand Herald - Business | 31 Mar 2009 | 5:48 am

Car dealers, shoppers ponder changes for General Motors, Chrysler

Obama's promise to back new car warranties comforts shoppers. Dealers hope the automakers restructure before it's too late.

Car dealers said Monday they hoped General Motors Corp. and Chrysler would be spared a trip to the wrecking yard, while shoppers were comforted by the Obama administration's promise to back new car warranties in case the auto giants failed.

Source: L.A. Times - Business | 31 Mar 2009 | 5:40 am

Plan for GM may involve bankruptcy

Experts say a filing, with careful help from the government, could be the best thing for the automaker.

The government's sweeping plan to reshape General Motors Corp. makes it increasingly likely that the struggling carmaker will enter bankruptcy, a possibility signaled Monday by President Obama.

Source: L.A. Times - Business | 31 Mar 2009 | 4:37 am

American Airlines to expand in-flight Web access

American Airlines plans to expand Internet access to about half its fleet of aircraft over the next two years as it attempts to raise revenue and improve customer service. The company...
Source: RSS feed - channel BNewsBusiness | 31 Mar 2009 | 4:02 am

Are You Saving Enough?

Boston College’s Center for Retirement Research recently found that about 64% of Americans aren’t saving enough to maintain their standard of living in retirement. Some ways to tell if you’re at risk:

Find a Percentage

The general rule of thumb is that retirees need about 70% to 80% of pre-retirement income to maintain their standard of living. To get a better sense though, consider using software that helps take into account factors like paying college tuition or taking fewer vacations. ESPlanner, which costs $150 and is available at esplanner.com, is one place to start.

Map Out Withdrawals

Many retirees will withdraw 4% of their portfolio in the first year of retirement and adjust that dollar amount each year to account for inflation. Find out if you can live comfortably on that amount plus Social Security payments; if you’ve had heavy portfolio losses, consider skipping the inflation bump initially.

Consider Health Care

Because lower-income seniors have their long-term care covered by Medicaid, and wealthier seniors can self-fund their care or buy insurance, those in the middle often have the hardest time paying for such services, a big drain on a nest egg. Anthony Webb of Boston College says non-Medicaid seniors with less than $1 million in assets should plan early for big health costs by cutting expenses elsewhere or delaying retirement.

Figure the Odds

Financial planners can often do modeling that helps calculate the chances you will still have a nest egg to draw from at a given age. Many retirement experts urge workers to wait to retire until their percentage chance of outliving their nest egg drops to 15% or below. To be safe, it’s good to assume you’ll live to age 90 or 95, especially with longer life spans.

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 | 31 Mar 2009 | 4:00 am

Amazon: The World's Best Retailer

THIS MAY BE AN OPPORTUNE time to add shares of Amazon.com to your shopping cart and proceed to checkout.

The stock makes sense because the retailer itself makes sense to smart shoppers. They don't waste valuable gas fighting for a parking space in a massive mall parking lot; they find prices that compete with Wal-Mart's and flirt with the Web's biggest bargains; and they can easily peruse a vast array of merchandise -- ranging from gigantic TVs to Elmore Leonard novels to disposable razors. What's more, their purchases tend to get delivered as promised.

The many benefits of the e-tailer's business model are even more apparent in tough times. Amazon's highly automated and centralized operations run at a lower cost than those of traditional retailers, allowing the Seattle company to pass on significant savings to its customers. Rather than truck merchandise to thousands of stores from myriad distribution centers, Amazon picks and packs its items from computerized warehouses where they are shipped direct to a customer's house, just the way founder Jeff Bezos envisioned.

No stores means fewer layers of expense for real estate, employees, inventory and utilities. While traditional outfits like Circuit City and Linens 'N Things have gone belly up, and speculation mounts about the staying power of household names like Sears (SHLD), among many others, Amazon.com (AMZN) had a strong Christmas season and free cash flow that rose 16% for 2008.

"A lot of consumers are migrating to Amazon," says Walter Price, a veteran technology investor from Allianz Global Investors. "It simply has a better retail model, and it is only getting better."

And Bezos has added a couple of kickers -- which Price views as options on two nascent Amazon businesses that aren't reflected in the share price.

The e-commerce pioneer always has been pragmatic in finding ways to leverage its operations by running portions of other companies' businesses, from Website check-out services to logistics.

Now, Amazon is taking that a step further by providing Web services, better known these days as "cloud computing." What is cloud computing? It is the outsourcing of information-technology and data-center operations to third parties, mostly by small- and medium-sized companies that choose not to spend their resources to deal with these tasks themselves. (The name cloud derives from the remote ether-like computer space where the outsourced operations take place.) Amazon, which has spent more than $2 billion on its systems in the last decade, has divided these services into several parts, including: Amazon Simple DB (databases), Amazon Elastic Compute Cloud (computing capacity) and Amazon Simple Storage (data storage).

Price believes these services could eventually generate hundreds of millions of dollars annually -- and investors are getting them for almost nothing.

The second kicker is Kindle, a digital-reading device. Its original version was generally well received, but its recently released 2.0 edition has become a hit with consumers. Wall Street analysts estimate the company has sold 350,000 of the devices, which got a plug from Oprah Winfrey last fall. A Kindle runs $359, and it not only generates revenue but protects and promotes Amazon's original business -- selling books.

Of course, Amazon's financial performance hasn't gone unnoticed. With a forward-looking price/earnings ratio of 39, you may feel as though you are paying retail for the shares. But valuing them on a cash-flow basis is a more accurate gauge because it takes into account the company's unusually long float period, which allows it to use the cash as working capital. At a price of 70 on Friday, the shares sell at roughly 20 times the company's free cash flow of $1.36 billion, or $3.18 per share, in 2008. That is less than Wal-Mart's (WMT) free cash flow multiple of 22.6 and Costco's (COST) 25.4.

Allianz's Price expects free cash flow to grow about 20% annually going forward, without taking potential revenue growth from Kindle or Web services into account. He believes the shares could crack 100 in two to three years, while Piper Jaffray research analyst Gene Munster has a more modest 12-month target of 81 for the stock.

Amazon's business model for billing, inventory and delivery gives the company some unique financial advantages over other retailers. It can carry customer payments on the balance sheet for up to 26 days before it must pay suppliers. The float on that money can help to lower pricing and gives Amazon still more power to grab market share.

"We have a negative operating cycle," Chief Financial Officer Tom Szkutak told investors at a recent Morgan Stanley conference. "So, as we grew, we generated cash from working capital. And we are all about maximizing profit dollars, not individual margins," he said. (Neither Szkutak nor Bezos would talk with Barron's.)

"It isn't unreasonable to expect that revenue could double over the next three years," says Price, barring a complete collapse of the economy. Amazon reported 2008 profit of $1.49 a diluted share -- or $645 million, up 36% from the prior year -- on $19.17 billion in revenue for fiscal 2008, which was up 28% from 2007.

Because of its other advantages, the e-commerce company tends to follow others' prices without necessarily trying to beat them. "We really want to offer low prices every day...[but breadth of] selection is very key to growth," Szkutak told the conference. Not only does Amazon carry more product categories than ever -- either through its own e-tail operations or third-party retailers on the site -- it also offers more brands and styles per category.

Amazon's strong balance sheet and wide selection stand out even more in this wretched retailing environment, where malls find themselves losing tenants, and tenants find themselves with less and less inventory. Retail sales generally stagnated in 2008 and have dropped nearly 10% for the period December 2008 through February 2009 over the same period a year earlier. With the exception of Wal-Mart, drugstores and warehouse clubs, just about every retail business is off.

That leaves Amazon to pick up the slack. More and more consumers turn to the Web for shopping, with Amazon often the first destination. After a decade of starting their online purchases by searching on Google (GOOG), cybershoppers now make Amazon their default page, knowing that its bots are crawling the Web to identify the lowest prices. Even e-Bay (EBAY), which tried to compete, recently shifted its focus back toward selling used merchandise. And with less than 10% of all retail sales done over the Internet, there's loads of upside. Price contends that U.S. online sales will account for as much as 20% of total retail sales within the next 10 years.

On top of that, Amazon is grabbing a greater share of online commerce as consumers realize that it is routinely price-competitive, delivers in a timely fashion, and now has arguably the greatest selection of merchandise assembled in one place -- albeit in cyberspace -- including Wal-Mart.

"E-commerce now starts and ends with Amazon, and eventually it will show up with higher sales," Price says. "As they get more volume, their costs relative to their prices should come down, which should improve their profits over time," he says.

Amazon is also growing overseas. It now ships in six foreign countries, including Germany, Japan and China. For the fourth quarter, international sales of $3.07 billion were 46% of total revenue.

Lower shipping costs also improve the customer's experience. In the early days, Bezos would goose sales with free-shipping promotions. Now he has implemented a "Prime Program" designed to keep shipping costs down while spurring more sales. For $79 a year, Amazon customers get guaranteed "all-you-can-eat" free shipping on two-day deliveries for most merchandise (excluding bulky items like furniture). Or they can pay $3.99 extra for one-day delivery. Only Amazon can afford to offer those terms and still make a profit because of its huge volume and efficient inventory and shipping operations." Amazon's logistics is its secret sauce," Price says.

One of the reasons Piper's Munster upgraded Amazon to a Buy in early March was a survey his firm conducted that showed 81% of Amazon's customers are satisfied with the retailer, compared to 71% for eBay. More important, 94% of the respondents said they would recommend the e-tailer to a friend. That score, he says, is reminiscent of Apple's (AAPL) tally earlier this decade before the iPod, as well as Netflix's (NFLX) rating prior to its breakthrough. In both cases the scores presaged big runs in the stocks to record highs.

"It's a leading indicator," says Munster.

Goldman Sachs analyst James Mitchell was impressed by Amazon's 15% increase in year-over-year gross profit and 9% jump year-over-year in operating profit. The fact that it could grow profitably during one of the worst holiday shopping seasons ever meant Amazon wasn't just "buying" revenue via discounted pricing, noted Mitchell.

Majestic Research predicts Amazon is on track to at least meet expectations on revenue for its first quarter (ending March 31), adding that sales have begun to accelerate and could actually exceed Street estimates for the quarter.

After spending billions to build the technology that drives its retail operation, Amazon, at its heart, is a tech company. As a result, it is always looking for ways to leverage operations, which is why it is pioneering areas like cloud computing. Tech researcher Gartner Research forecasts that, industry wide, this category will reach $56.3 billion in revenue in 2009, a 21.3% gain over 2008. The market is projected to reach $150 billion in 2013.

The notion of trusting your entire enterprise-computing needs to someone else is controversial and meets with resistance by big corporations. But small- to medium-sized companies, especially start-up software developers, embrace the trend. Adam Selipsky, a vice president of Web Services at Amazon, told trade publication Intelligent Enterprise that there are three reasons for companies to switch to its cloud: efficiency, economics and performance.

Start-up software companies are among Amazon's biggest Web-services clients. They can develop code and deliver software using Amazon's delivery infrastructure, paying only for the computing power they use and leaving the data center headaches to Amazon. This allows start-ups to build their businesses without a lot of upfront cost -- which is especially attractive during this period of tight capital.

Amazon isn't competing with Nordstrom (JWN) or Sears in this marketplace. It's going up against the likes of IBM (IBM), Google (GOOG), and Microsoft (MSFT). But Price thinks Amazon has an edge over Google, because Amazon's systems use computer languages that are more open and flexible. Plus, the company is already geared toward handling outsourcing in other parts of its operations, so adding data-center services is just a natural extension, Price argues.

Tech Crunch, an online-technology publication, estimates that 60,000 corporate customers are using Amazon Web Services. Amazon wouldn't confirm that number.

Kindle is another example of Amazon's technology prowess. The electronic book reader is arguably superior to a similar gadget developed by Japanese consumer-electronics giant Sony (SNE). It even has prompted comparisons to Apple's iPod and iTunes. Kindle allows people to carry entire libraries of digital books on one device, and it focuses their selections on Amazon's list of offerings.

It also provides potential growth from the device itself. That won't provide a huge boost to sales in the short term, but the Kindle could improve margins, says JPMorgan Chase analyst Imran Khan. For the iPod, Apple has to pay for intellectual-property rights on songs and movies; and Amazon must pay book publishers for its digital content. But both "playback"devices are proprietary.

According to some analysts, it isn't a stretch to see Kindle's estimated 350,000 unit sales hitting one million this year. Goldman's Mitchell, for one, predicts Amazon may double or triple Kindle sales in 2009 based on demand built not only by the Oprah endorsement, but by an increasingly broad range of book titles, and sales to overseas markets such as Germany and Japan.

If Amazon can build a big Kindle user base, it could raise barriers to entry in the eBook market, lower per-book marketing costs, reduce fulfillment costs, and increase revenue -- all of which would lead to higher margins, Khan argues.

Needless to say, fulfillment costs on a digital download are a lot lower than those on a book delivered via an overnight shipper. Fulfillment costs took an 8.3% bite out of Amazon's revenue last fiscal year, whereas the cost of delivering an eBook would account for about 2% to 3% of total revenue. Khan more conservatively forecasts Amazon to sell another 500,000 Kindles in 2009, adding $63 million in fiscal 2009 revenue, or two cents earnings per share. He predicts Amazon will sell 12 million eBook downloads during the fiscal year. Every two million book downloads equals about a penny a share in annual earnings, Khan says.

There is more than a comparison with Apple; there is compatibility. The Kindle reader application is now available for the Apple iPhone, which will expand Kindle's reach beyond avid book readers. Another potential boon: schools and colleges, if Amazon successfully taps the textbook market.

Of course, there are risks. Just last week the company said it would close three distribution centers, laying off or transferring 210 workers, to fine-tune its business. And whenever investors pay up for growth, there is always the chance that revenue can disappoint. Amazon is hardly immune from the crash in consumer spending. If it gets much worse, the company will surely suffer. As it becomes a more global entity, foreign-currency swings can have a negative impact on revenue, too.

During the dot-com boom, shopping over the Internet was an exotic experiment. Today, Bezos' Amazon has created an experience that is often more satisfying than shopping at an understaffed mall store with depleted inventories. With more selection, less hassle and faster checkout, and with competitive pricing thrown in, you have the world's best retailer -- albeit one whose shares trade at a technology multiple.

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 | 31 Mar 2009 | 4:00 am

How to Buy a Home... Without a Bank

With credit markets still tight, hopeful homeowners and their buyers-to-be are reviving an old tactic: "seller financing." In these deals, last popular in the 1980s when mortgage rates hit double digits, the seller and the buyer agree on a payment schedule, with no bank involved. Agents say the homespun option is the only avenue for some buyers in this tight-fisted lending climate, but the logistics can be a bear. Here's what you need to know.

Down payment: In today's market many banks have returned to asking for 20 percent down; offer less and you'll probably have to pay for private mortgage insurance, which adds up to half a percentage point to the loan. In seller financing, the buyer can put down less than 20 percent -- without the PMI. Still, says real estate attorney Jon Goodman, of Boulder, Colo., "the buyer needs to have skin in the game -- the more, the better." Homeowners will typically want a down payment of at least 10 percent as protection against default.

Interest rates: Most private sellers charge slightly above market rates since they're shouldering more risk -- particularly if their would-be buyer got rejected for a bank loan. But with home prices still in the tank, some owners are offering lower rates to buyers who agree to meet their price. And keep in mind: Most seller-financed deals expire in five to seven years -- 15 at the most -- and finish out with a balloon payment.

Due diligence: When there's no bank involved, title insurance becomes even more important. Usually available for a few hundred bucks, it digs up tax liens and other claims that could affect a property transfer. A current appraisal, credit report and background check are also smart moves. After all, there's no institution behind this deal -- it's just you and the other guy.

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 | 31 Mar 2009 | 4:00 am

Study: Trouble Ahead for Retirees

As if decimated portfolios weren’t hard enough on investors, a new study released Tuesday indicates that even before the crash, a far higher percentage of folks were at risk for not having enough money for retirement than previously predicted.

The study from Boston College’s Center for Retirement Research revises what’s known as the “retirement risk index” — basically the percentage of people who won’t be able to maintain their standard of living in their golden years — to take into account the cost of traditional health care as well as long-term care like nursing-home stays and home health aides. The revised calculations indicate that almost two-thirds of working-age Americans were already falling short of retirement targets in 2007, up from the 44% researchers had reported in a study just 19 months ago.

The study seems to confirm the warnings of some experts that even before the crash the picture was darkening for many retirees — and that health-care costs were largely to blame. In recent years, medical costs have risen so fast that Fidelity Investments estimated the average 65-year-old couple retiring in 2008 would need $225,000 out of pocket just to cover their basic health needs in retirement. Meanwhile, private rooms in nursing homes have become 17% more expensive since 2004, reaching about $76,000 a year on average in 2008, according to Genworth Financial.

“Those in the middle of the pack economically can be dramatically squeezed by these costs,” says Anthony Webb, a co-author of the study. That’s because those folks are too rich to qualify for Medicaid, which would pick up the nursing-home expense; Medicare, the health insurance program for seniors of all income levels, typically doesn’t cover it.

Despite the alarming numbers, financial planners say retirees and future retirees can take steps to help insulate themselves from expensive late-in-life care. Long-term-care insurance, for example, will often pick up the tab for both nursing homes and home health aides, which typically cost about $20,000 a year. Premiums for long-term-care insurance averaged close to $2,000 in 2008, but they can be much higher for people who have health problems or are close to retirement.

Timothy Maurer, director of financial planning for the Financial Consulate, a planning firm in Lutherville, Md., says many of his clients will also opt to use their home equity as a down payment for a retirement community. Many of those facilities charge seniors set, locked-in monthly dues that cover the cost of any nurses needed to help with members’ care.

But experts caution there’s no one solution for everyone. Some advisors will create a “long-term-care plan” for clients to determine if factors like family health history and relative wealth make long-term-care insurance a good investment, since only about a third of seniors will wind up spending one month or more in a nursing home. Maurer says he urges many upper-middle-income clients to get partial long-term-care insurance and then partially self-fund the rest of any needed medical assistance.

And since the industry has been hit with financial-strength rating downgrades in recent months, doing homework on the insurer you choose is critical, says Jeff Camarda, a financial advisor in Fleming Island, Fla. Companies like A.M. Best and Standard & Poor’s regularly rate the insurers based on their financial strength, and Camarda urges clients to consider only top-rated insurers.

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 | 31 Mar 2009 | 4:00 am

5 Stocks for a See-Saw Market (Screens)

The best way to invest money in stocks or stock mutual funds, financial advisors like to say, is “dollar cost averaging.” That means adding money a little at a time in equal amounts.

Mathematically, the advisors are wrong. Averaging will probably cost you more money than you save. Yes, your equal payments will buy more shares when prices are low and fewer when prices are high, thereby ensuring you pay a below-average price. But that is more than offset by two tendencies. First, stocks rise twice as often as they fall, and second, over long time periods they tend to produce powerful returns. The cost of waiting with the bulk of your money is likely to eclipse the lower price you get with the rest.

Still, I’d recommend averaging to just about anyone. It makes people feel safer, which is easily as important as tweaking their odds. And as with insurance, which is also a poor deal by the numbers (hence, the insurer’s profit), averaging will once in a while protect an investor from an unlikely but catastrophic event--like the one the stock market has recently produced.

Now is an especially good time for averaging, which works its magic at price extremes and so is just the thing for volatility. Last year there were 18 days on which the market closed up or down more than 5%. That’s as many as occurred between 1955 and 2007. This year seems as spastic. Mutual fund investors should by all means dribble new money in rather than dump it. Stock investors aren’t as flexible. If they add $500 a week, trading commissions can eat up half a year’s return. But stocks that pay generous dividends, when left to reinvest them, accomplish cost averaging on their own. In volatile markets, they can gradually shrink the holder’s average price.

The companies below are good candidates for cost averaging. Emerson Electric (EMR) raised its dividend in December, its 52nd consecutive increase. The company sells a broad range of automation, precision control, power and climate-control equipment. About 40% of income comes from emerging-market customers that management says are still growing, albeit slower than in recent years. Sales are expected to decline 11% this fiscal year ended September, but Emerson is solidly profitable and only modestly indebted, and trades at an inexpensive 11 times earnings.

Waste Management (WMI) controls just over a quarter of North America’s trash hauling. Most of its business is insulated from the economic slowdown, but some—removing waste for homebuilders and manufacturers, for example—has slipped. Earnings per share are expected to decline 8% this year. Shares are modestly priced at 12 times earnings, and a 4.5% dividend yield is more than covered by a free cash flow yield that’s expected to top 11% this year.

On the table are details on these and three more companies.