Were We Wrong?

We've been saying for weeks that these bank stress tests are a bit of a ... I don't want to say "joke." Let's just say that we've expressed the view that not many investors or folks on Wall Street take them all that seriously. We knew, in the beginning, that they aren't pass/fail, which we took to mean they are a bit of a whitewash.

I don't know what to think of them now. I do know that we'll find out soon how "the market" (that final judge, it seems) views them. And it should be clear, pretty soon, if we were wrong in saying these things are irrelevant.

Felix Salmon once told me that what he loves about blogging is that you get to find out very quickly how wrong you are. I'm trying to join him in feeling all excited about that.

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Source: NPR Blogs: Planet Money | 7 May 2009 | 2:48 pm

Bald, Beard, and Boone's To Testify On "Pressured" Merrill Deal Next Month

That is, if the latter isn't taken out before then. And by "taken out" we do not mean in the "fired by the government" sense but in the "Charlie Gasparino" sense. To recap, Ken Lewis, possibly under the influence of the Boone's (travel size, for her discretion), told Andrew Cuomo that he was pressured by Bernanke and Paulson to keep his trap shut on the whole metric asston of losses situation he was going to get his shareholders in by acquiring Merrill Lynch. Then Paulson said that yeah, sure, he threatened Lewis, but it was because Bernanke told him to. Then Bald came out and claimed that when he put the heat on Lewis, tire iron in hand, it was all his idea and that the soft-spoken college professor had nothing to do with it (believable), a story which GandalFed later corroborated on the Hill. Finally, at Bank of America's annual shareholder meeting two weeks back, an again sauced up Lewis told a shareholder, inquiring about what kind of perceived pressure was put on him to zip the lip on Merrill losses, that the bank's decision to keep investors in the dark was "independent of any government threat," adding, "you have your facts wrong." So, okay! In Lewis's defense, he probably didn't realize people were going to go back and look at what he'd said on the record, or that there were any reporters at the meeting.

House Panel to Probe BofA's Merrill Deal [WSJ]

Related: Merrill Lynch - Bank of America - Ken Lewis - Andrew Cuomo - Wall Street Journal
Source: Dealbreaker | 7 May 2009 | 2:42 pm

Jobless Claims Fall

The U.S. Commerce Department says new jobless claims last week fell 34,000 to 601,000. That's the lowest figure since Jan. 24, and way less than the 635,000 economists expected.

Ian Shepherdson sees real good -- and really good -- news in that:

A clear turn is now visible in the claims numbers. The eight-week moving average has now fallen for for straight weeks, and the four-week average has dropped by 36K from its early April peak.

This is too big a move just to be noise. Claims can probably fall a good deal further before they hit the wall; they surged by 200K as companies panicked in the six months after the Lehman bust. With activity now apparently bouncing as fear of another Lehman fades, layoffs will drop sharply. But a sustained fall to the sub-350K pace consistent with strong growth is still a very long way off. That requires household deleveraging and healthy banks, and that's not a story for this year.

We're getting there. Planet Money is spending much of the morning sitting around a table in a heavily guarded room, where we'll be critiquing past podcasts and the blog. The Treasury is expected to release whatever news we don't already know about the banks' stress tests, so we'll leave you for now with this comforting headline from the LA Times:

"
Big banks' 'stress test' results to be reassuring, Geithner says."

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Source: NPR Blogs: Planet Money | 7 May 2009 | 2:32 pm

Meet Your New Regulator

Stinging from a rebuke that the rest of us will not soon forget, the SEC is seeking to demonstrate value once again. What better way to accomplish this than by lifting tried and true methods from the local PTA? A little polish, some duct tape, the application of a Dremel tool and poof! Meet Your Regulator:

Leading the charge is SEC assistant regional director Bruce Karpati, who heads the agency's Hedge Fund Working Group.

"We need to be policing even the most complex markets to ensure that all investors, regardless of their supposed-sophistication, have a fair shake," Mr. Karpati said. "We have to be every bit as sophisticated."

It's somewhat an about-face for the SEC, whose former chairman, Christopher Cox, said in a 2006 congressional hearing that "neither the SEC nor any regulator has authority over the CDS market." The SEC has always maintained it has authority to enforce fraud involving derivatives.

[...]

Mr. Karpati, a 39-year-old native of Buffalo, N.Y., and SEC staff member since 2000, led the SEC's 2003 civil insider-trading case against homemaking magnate Martha Stewart. The case alleged Ms. Stewart sold ImClone Systems Inc. stock in 2001 based on inside information that ImClone's cancer drug wouldn't be approved by the Food and Drug Administration. Ms. Stewart served jail time for lying to federal prosecutors, and settled in 2006 with the SEC.

Celebrity jail time for lying! Outstanding! A leap forward for regulator customer service. Smiles all around, particularly, as you see, on Mr. Karpati. Good Job! We are here for your protection, remember. Next week: Big regulators come in small packages.

As SEC Steps Up Vigilance, It's Policing Some New Beats [The Wall Street Journal]

Related: SEC - Hedge fund - Christopher Cox - Insider trading - Martha Stewart
Source: Dealbreaker | 7 May 2009 | 2:10 pm

Love Gov Injects A Little Something In Our Morning

He's back, baby! It starts slowly, with a twenty minute appearance on Squawk Box. Next, subbing on Opening Bell while Erin Burnett's on vacay. Soon, whispers Melissa Lee's got reason to watch her back. Is this a hint at *someone* taking over for Dylan Ratigan? Fingers crossed. Ness was noticeably a bit cranky this morning, but he's just not used to waking up before noon. Bless her heart, Becky Quick tried to get him to talk bangin' prosities, but the noted hooker fucker was having none of it ("I'm said I'm sorry, that's the end of it. What do you want to hear Becky, that I'm a whore? Okay, I'm a big fat whore.") Give it time. Among things Big E would like answers to, is why Goldman doesn't need money under the results of the stress test. Lloyd? Wanna take that one?

Related: Dylan Ratigan - Erin Burnett - Squawk Box - Melissa Lee - CNBC
Source: Dealbreaker | 7 May 2009 | 2:08 pm

GM posts $6bn loss as bankruptcy looms

North America's biggest carmaker reported a $6bn first-quarter net loss and an accelerating cash drain, underlining the pressure it faces to gain concessions from stakeholders or face bankruptcy
Source: Financial Times - US homepage | 7 May 2009 | 1:58 pm

ECB unveils measures to fight recession

The European Central Bank sought to kickstart the flagging eurozone economy by reducing interest rates to record lows and announcing bold plans to buy corporate bonds as part of a credit easing programme.
Source: Financial Times - US homepage | 7 May 2009 | 1:58 pm

US banks 'safe from insolvency'

No US bank being examined by regulators is at risk of insolvency, US Treasury Secretary Timothy Geithner says.
Source: BBC News | Business | World Edition | 7 May 2009 | 1:58 pm

Dick Fuld's Memoirs, Knicknacks He Left Behind To Be Destroyed?

"There is a truck labeled Internal Demolition...and a crew of people carrying stuff out of Lehman (sorry, Barclays) this morning...coming out the second floor...a corner office being visibly torn down."

Related: Barclays - Richard S. Fuld Jr. - Lehman Brothers - Business - Dick Fuld
Source: Dealbreaker | 7 May 2009 | 1:56 pm

Stocks rise on jobless claims, retail sales data (AP)

AP - Stocks are higher following upbeat readings on the job market and sales at major retailers.

Source: Yahoo! News: Stock Markets News | 7 May 2009 | 1:55 pm

UK economy gets extra £50bn boost

The Bank of England keeps interest rates at 0.5% but says it will pump an extra £50bn into the economy.
Source: BBC News | Business | World Edition | 7 May 2009 | 1:54 pm

States reeling from April tax shortfalls

State officials nationwide are wrestling with yet another round of budget shortfalls, this time due to plummeting April income tax revenues.
Source: Business and financial news - CNNMoney.com | 7 May 2009 | 1:53 pm

Will Obama tax plan really save jobs?

President Obama says his proposals to crack down on corporate tax loopholes will do a lot of things, including create more U.S. jobs.
Source: Business and financial news - CNNMoney.com | 7 May 2009 | 1:52 pm

GM loses another $6 billion

General Motors' financial woes continue as the automaker teetering on the edge of bankruptcy reported a $6 billion loss during the first three months of the year Thursday.
Source: Business and financial news - CNNMoney.com | 7 May 2009 | 1:52 pm

Cablevision mulls Madison Square Garden spinoff

CHICAGO (MarketWatch) - Cable operator Cablevision Systems Corp. said Thursday its board of directors has authorized a possible spinoff of its Madison Square Garden unit, which includes the storied New York venue of the same name, the New York Knicks, the New York Rangers, the MSG regional sports network, and other assets.

Source: MarketWatch.com - Top Stories | 7 May 2009 | 1:51 pm

GM profit, sales halved as car industry teeters

SAN FRANCISCO (MarketWatch) -- General Motors Corp. on Thursday said it lost almost twice as much money in the first quarter as it did a year ago, putting even more pressure on the automaker to speed its restructuring ahead of a looming deadline.

Source: MarketWatch.com - Top Stories | 7 May 2009 | 1:50 pm

Stress test day arrives at last

At long last, investors will get some much-needed answers about whether the nation's biggest banks need more capital -- and how much.
Source: Business and financial news - CNNMoney.com | 7 May 2009 | 1:49 pm

Are Lewis And Pandit's Jobs On The Line?

You know, more so than they were before this little note?

In addition, as part of the 30-day planning process, firms will need to review their existing management and Board in order to assure that the leadership of the firm has sufficient expertise and ability to manage the risks presented by the current economic environment and maintain balance sheet capacity sufficient to continue prudent lending to meet the credit needs of the economy.

The Treasury Capital Assistance Program and the Supervisory Capital Assessment Program [Federal Reserve via clusterstock]

Related: Federal Reserve System - Economic - Business - Central bank - Balance sheet
Source: Dealbreaker | 7 May 2009 | 1:48 pm

Retailers report smaller sales declines in April (AP)

AP - Consumers enticed by warmer weather and glimmers of hope for the economy bought a few more items in April, helping discounter Wal-Mart Stores and many mall clothing chains post better results for the month than expected.
Source: Yahoo! News: Business | 7 May 2009 | 1:47 pm

1.5 years of unemployment and then ... Hired!

In the middle of all the Big Three bankruptcy chatter and auto plant closings, Margaret McManus stands out. She just got a job at an auto supplier in Georgia.
Source: Business and financial news - CNNMoney.com | 7 May 2009 | 1:46 pm

Thomson Reuters profit beats, affirms outlook

LONDON/NEW YORK (Reuters) - Thomson Reuters Corp reported a stronger-than-expected quarterly profit and affirmed its expectation that revenue will grow in 2009.
Source: Reuters: Business News | 7 May 2009 | 1:44 pm

Stocks rise at the open

Wall Street opened higher Thursday after Treasury Secretary Tim Geithner offered reassuring comments about U.S. banks and the government reported a 3-month low in jobless claims.
Source: Business and financial news - CNNMoney.com | 7 May 2009 | 1:43 pm

Stress test hopes, retailers lift Wall St at open

NEW YORK (Reuters) - Stocks opened higher on Thursday as investors anticipated results of stress tests to show that most banks are healthier than previously thought.
Source: Reuters: Business News | 7 May 2009 | 1:43 pm

Stress test hopes, retailers lift Wall St at open (Reuters)

Reuters - Stocks opened higher on Thursday as investors anticipated results of stress tests to show that most banks are healthier than previously thought.

Source: Yahoo! News: Business | 7 May 2009 | 1:43 pm

Stress test hopes, retailers lift Wall St at open (Reuters)

Reuters - Stocks opened higher on Thursday as investors anticipated results of stress tests to show that most banks are healthier than previously thought.

Source: Yahoo! News: Stock Markets News | 7 May 2009 | 1:43 pm

Futures Movers: Crude oil rises on stress tests, jobs optimism

Crude-oil futures rise more than 2% to trade near $58 on Thursday, as central banks in Europe take more measures to boost liquidity, while upbeat U.S. jobs data and optimism over the health of big banks fuel hopes of a global economic recovery.

Source: MarketWatch.com - Top Stories | 7 May 2009 | 1:43 pm

Thomson Reuters first-quarter profits rise

Financial information provider Thomson Reuters said Thursday that operating profit rose two percent in the first quarter of the year despite challenging market conditions. Underlying...
Source: RSS feed - channel BNewsBusiness | 7 May 2009 | 1:41 pm

U.S. banks rally ahead of stress test results

NEW YORK (Reuters) - Citigroup Inc and Bank of America Corp shares rallied in premarket trading ahead of the release of "stress test" results that will force them and other top banks to raise tens of billions of dollars in capital.
Source: Reuters: Business News | 7 May 2009 | 1:40 pm

U.S. banks rally ahead of stress test results (Reuters)

Reuters - Citigroup Inc and Bank of America Corp shares rallied in premarket trading ahead of the release of "stress test" results that will force them and other top banks to raise tens of billions of dollars in capital.
Source: Yahoo! News: Business | 7 May 2009 | 1:40 pm

ECB trims rates, unveils new steps to boost economy

FRANKFURT (Reuters) - The European Central Bank cut its main interest rate on Thursday and announced a three-pronged drive of unconventional steps to drive down borrowing costs and get the euro zone economy back on its feet.
Source: Reuters: Business News | 7 May 2009 | 1:38 pm

Bond Report: Treasurys down ahead of 30-year auction

NEW YORK (MarketWatch) -- Treasury prices headed lower Thursday, pushing long-term yields to their highest levels since November, before the Treasury Department sells $14 billion in 30-year bonds, the last major auction of the week.

Source: MarketWatch.com - Top Stories | 7 May 2009 | 1:37 pm

Initial jobless claims fall

First-time claims for state unemployment benefits fall to the lowest level since late January, the Labor Department reports. However, ongoing claims keep on rising, hitting a record 6.35 million.

Source: MarketWatch.com - Top Stories | 7 May 2009 | 1:35 pm

Unemployment claims at 3-month low

The number of people filing initial claims for unemployment benefits fell last week, to their lowest level in more than 3 months, according to a government report released Thursday, suggesting the pace of decline in the job market is slowing.
Source: Business and financial news - CNNMoney.com | 7 May 2009 | 1:34 pm

Retailers report smaller sales declines in April

NEW YORK -- Consumers enticed by warmer weather and glimmers of hope for the economy bought a few more items in April. Wal-Mart Stores led the broader gains, posting far better results than expected and setting an upbeat tone for the month.

Source: L.A. Times - Business | 7 May 2009 | 1:34 pm

Earnings Watch: Updates, advisories and surprises

A roundup of the latest corporate earnings reports and what companies are saying about future quarters.

Source: MarketWatch.com - Top Stories | 7 May 2009 | 1:31 pm

George Media Inc. launches The International Resource Journal

MISSISSAUGA, ON, May 7 /PRNewswire/ - George Media Inc. has announced the launch of its first international online magazine, The International Resource Journal (IRJ), which is...
Source: RSS feed - channel BNewsBusiness | 7 May 2009 | 1:30 pm

FTSE100 rally: fund and share tips from the experts part I

We asked a dozen experts for their views and tips for investors seeking income growth and capital preservation.
Source: Telegraph Finance | 7 May 2009 | 1:29 pm

GM posts loss; burns through $10 billion

DETROIT (Reuters) - General Motors Corp said it burned through $10.2 billion in the first quarter as it failed to cut costs fast enough to offset a sharp decline in global sales and was kept afloat by a federal bailout.
Source: Reuters: Business News | 7 May 2009 | 1:27 pm

New car sales fall for eleventh month

New car sales fell for the eleventh month in a row in April down 24pc as the financial crisis maintained its grip over the market.
Source: Telegraph Finance | 7 May 2009 | 1:25 pm

FTSE100 rally: fund and share tips from the experts part II

We asked a dozen experts for their views and tips for investors seeking income growth and capital preservation.
Source: Telegraph Finance | 7 May 2009 | 1:25 pm

Financial Stocks: Citigroup, Bank of America lead pre-open rally

NEW YORK (MarketWatch) -- Shares of Bank of America and Citigroup rallied about 15% in pre-open trading on Thursday as investors welcomed leaked results of a recent government stress test.

Source: MarketWatch.com - Top Stories | 7 May 2009 | 1:22 pm

Economic Report: U.S. productivity rises 0.8% in first quarter

WASHINGTON (MarketWatch) -- Productivity rose in the first quarter as U.S. firms slashed their workforce, outpacing the drop in output, the Labor Department reported Thursday.

Source: MarketWatch.com - Top Stories | 7 May 2009 | 1:22 pm

Eurozone interest rates cut to 1%

Eurozone rates are cut to 1% and the European Central Bank says it plans to pump about 60bn euros into the region's economy.
Source: BBC News | Business | World Edition | 7 May 2009 | 1:21 pm

General Growth agrees to new bondholder-backed loan

NEW YORK, May 7 (Reuters) - General Growth Properties Inc has agreed to a new bankruptcy loan from a group of investors including some of its bondholders that will replace the debtor-in-possession financing...
Source: RSS feed - channel BNewsBusiness | 7 May 2009 | 1:21 pm

Metals Stocks: Gold tops $920 on inflation worries

NEW YORK (MarketWatch) -- Gold futures rose Thursday for a fourth straight session, climbing above $920 an ounce after the European Central Bank cut its benchmark interest rate to a record low of 1%, raising worries about global inflation.

Source: MarketWatch.com - Top Stories | 7 May 2009 | 1:21 pm

Exxon Deal Pending on Sakhalin-1 Gas? (XOM)

Japan’s Nikkei newspaper has reported that Exxon Mobil Corporation (NYSE:XOM) has reach an agreement to sell about 1.5 billion cubic meters/year of natural gas from the Sakhalin-1 project to Russia’s gas monopoly Gazprom. Exxon has denied the report, saying discussions continue but no agreements have been signed. Last month Exxon got budget approval from the Russian [...]

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Source: 24/7 Wall Street | 7 May 2009 | 1:19 pm

Rowan net income rises 34%

Rowan Companies reports a 34% jump in first-quarter net income as the drilling firm cut costs, notches solid performances from its drilling and manufacturing units.

Source: MarketWatch.com - Top Stories | 7 May 2009 | 1:19 pm

Gerdau S.A. First Quarter 2009 Results

PORTO ALEGRE, Brazil, May 7 /PRNewswire-FirstCall/ -- Gerdau S.A. (NYSE: GGB) announces its 1Q09 results: 1st Quarter of 2009 Highlights ...
Source: RSS feed - channel BNewsBusiness | 7 May 2009 | 1:18 pm

Hillenbrand Announces Third-Quarter Dividend of $0.185 Per Share

BATESVILLE, Ind., May 7 /PRNewswire-FirstCall/ -- The board of directors for Hillenbrand, Inc. (NYSE: HI) has declared a dividend of $0.185 per share on the company's common
Source: RSS feed - channel BNewsBusiness | 7 May 2009 | 1:16 pm

A Refiner Wins Again (HOC, ATN, KEG, ATLS)

Holly Corporation (NYSE:HOC) this morning reported EPS of $0.44 on first quarter 2009 revenues of $650.8 million. Analysts had expected EPS of $0.30 on revenues of $590.48 million. For the same period last year, Holly reported EPS of $0.17 on revenues of $1.48 billion. That’s the refining story for this quarter — margins up, throughput [...]

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Source: 24/7 Wall Street | 7 May 2009 | 1:14 pm

Nearly Two-Thirds of Americans Can't Name a Famous Female Scientist According to National Survey by L'Oreal USA

Americans Believe Underrepresentation of Women in Science Could Hinder Economic Growth NEW YORK, May 7 /PRNewswire/ -- A new national survey commissioned by...
Source: RSS feed - channel BNewsBusiness | 7 May 2009 | 1:11 pm

Wal-Mart sales surge in April

Wal-Mart Stores reported much stronger-than-expected sales in April, boosted by Easter-related shopping and a pick-up in purchases of entertainment and home-related products.
Source: Business and financial news - CNNMoney.com | 7 May 2009 | 1:10 pm

Panmure Gordon at centre of bidding row

A battle erupted today for a significant stake in Panmure Gordon, one of the City’s oldest stockbroking firms.


Source: Latest Business News from Times Online | 7 May 2009 | 1:10 pm

Wendy's/Arby's posts $10.9M loss in 1Q

Wendy's/Arby's Group says it posted a $10.9 million loss in the first-quarter as Arby's sales fell and it took a one-time $15 million charge, in part, to integrate the two fast food chains.
Source: RSS feed - channel BNewsBusiness | 7 May 2009 | 1:04 pm

Wal-Mart April same-store sales beat estimates

SAN FRANCISCO (Reuters) - Wal-Mart Stores Inc on Thursday reported a stronger-than-expected 5 percent rise in sales at U.S. stores open at least a year in April, helped by demand for Easter merchandise.
Source: Reuters: Business News | 7 May 2009 | 1:04 pm

UPDATE 1-Labopharm Q1 loss narrows

May 7 (Reuters) - Labopharm Inc posted a narrower quarterly loss, helped by higher revenue from its pain drug, and said it was launching its once-daily tramadol pain treatment in the United States.
Source: RSS feed - channel BNewsBusiness | 7 May 2009 | 1:03 pm

Futures rise on jobless claims, retail sales data

Wall Street bounded toward a higher open Thursday as investors got pleasant surprises from the job market and major retailers. Government data showed that new claims for jobless benefits
Source: RSS feed - channel BNewsBusiness | 7 May 2009 | 1:03 pm

AB InBev strong first-quarter boosts stock

BRUSSELS/SEOUL (Reuters) - Anheuser-Busch InBev beat forecasts with stronger first-quarter earnings and clinched the sale of its Korean brewer on Thursday, sending its shares higher, though it warned profit growth would slow.
Source: Reuters: Business News | 7 May 2009 | 1:02 pm

Tesoro plans California hydrocracker overhauls

HOUSTON, May 7 (Reuters) - Western U.S. refiner Tesoro Corp said Thursday it plans to overhaul hydrocracking units at its 166,000 barrel per day San Francisco Bay area refinery and 100,000 bpd Los Angeles...
Source: RSS feed - channel BNewsBusiness | 7 May 2009 | 1:02 pm

Opening Bell: 05.07.09

Barclays Posts First Quarter Earnings (BBC)
The bank has posted their first quarter numbers; it looks like their efforts to shed holdings were in line with their potential for write downs - they just had the common sense to do it as they encountered expenses.

"Profits before tax came in at £1.37bn ($2.07bn), up by 15% compared with the same period last year.

Total income almost doubled to a record £8.15bn because of strong performance at the group's investment banking arm.

[...]

The strong results were achieved despite losses from write downs of £2.61bn and increased costs related to the bank's acquisition of parts of US bank Lehman Brothers last year."

KKR To Buy South Korean Brewer (DealBook)
"Kohlberg Kravis Roberts, the giant private equity firm, said on Thursday that it is buying Anheuser-Busch InBev's South Korean brewery for $1.8 billion in cash, in one of the largest leveraged buyouts announced this year.

K.K.R. beat out two other private equity firms, MBK Partners and Affinity Equity Partners, for the AB-InBev brewery, Oriental Brewery, according to a person briefed on the matter."

Société Générale Posts Loss (WSJ)
"For the three months ended March 31, SocGen posted a net loss of €278 million ($370.6 million) compared with a net profit of €1.1 billion a year earlier. Revenue slid 14% to €4.91 billion from €5.68 billion. Analysts polled by Dow Jones Newswires had forecast, on average, a €381 million profit on revenue of €5.61 billion.

Most of the damage came from the corporate and investment-banking division where SocGen took €1.5 billion in write-downs on high-risk exposures, including monolines and exotic credit derivatives. Fluctuations in the value of other items took a further toll of €340 million. These elements drowned out improved performances at the unit's equities and fixed-income trading businesses."

The Emergence Of A Bull Market? (Bloomberg)
""The most likely scenario is that we've entered a new bull market," said John-Paul Smith, the London-based chief strategist at Pictet Asset Management, which oversees about $103 billion. "Investors are being dragged kicking and screaming into the market.""

Sallie Mae Looking For Ways To Survive (Bloomberg)
Sallie Mae has decided they're not going to put up a fight so much as suggest how to make the President's plan better; the latter includes them still being able to touch student loans, of course. There's been an ongoing argument about the role of Government in private enterprise - one built largely on perceived roles - that's fallen somewhat by the wayside given recent actions of the administration; we have to wonder if given the recent bull-run (and if it continues) if government intervention plans will continue to gain support.

"Sallie Mae may lose as much as 40 percent of its revenue if Congress passes Obama's plan without modifications, said Matt Snowling, an analyst with Friedman Billings Ramsay Group Inc. in Arlington, Virginia. Sallie Mae's revenue totaled $1.78 billion last year, and most of the rest came from private loans and from services such as collecting on defaulted loans."

Ban Lifted, Oil Companies Allowed Back In Iraq (FT)

"International oil companies are preparing to go back into Iraq by the end of the year, in spite of Baghdad's failure to pass an oil law and continuing concerns over security.

BP and Royal Dutch Shell are among companies expected to bid for oil service contracts in June, with the long-term objective of being allowed to develop the world's third-largest oil reserves""

Chrysler Creditors Harassed For Asserting Legal Rights (FT)
The clusterfuck that is the Chrysler bailout is still causing waves through the legal system as senior creditors (junior-senior creditors, at that) are the last to intimate they've got the testicular fortitude to do the right thing: fight for their money. We can understand that it's a tough position: the government is breathing down your neck to take the deal; they have seemingly unlimited power - you just have wonder what the end game is when good men do nothing.

Related: Kohlberg Kravis Roberts - Private equity - Business - Royal Dutch Shell - Private equity firm
Source: Dealbreaker | 7 May 2009 | 1:00 pm

Wall St set to rally on stress test hopes

US stocks were set to continue their rally, as Wall Street remained focused on the results of the government's stress tests on banks' balance sheets, the results of which were due to be announced after the close
Source: Financial Times - US homepage | 7 May 2009 | 12:58 pm

Wal-Mart Wins, But Drops Monthly Reporting Entirely (WMT)

Wal-Mart Stores Inc. (NYSE: WMT) is up big this morning on a whopper of a same-store-sales figure for the month of April.  The world’s largest retailer also noted that its 13-week comparable store sales ex-Fuel are exceeding the company’s forecasts.  Be advised that Wal-Mart is also revises its comparable store sales reporting policy. For the four [...]

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Source: 24/7 Wall Street | 7 May 2009 | 12:53 pm

DuPont cuts another 2,000 jobs, takes charge

NEW YORK (Reuters) - Chemicals maker DuPont Co said it would cut another 2,000 jobs as part of its cost-cutting plan and take a $340 million to $390 million charge in the second quarter.
Source: Reuters: Business News | 7 May 2009 | 12:34 pm

Wal-Mart April same-store sales beat estimates (Reuters)

Reuters - Wal-Mart Stores Inc on Thursday reported a stronger-than-expected 5 percent rise in sales at U.S. stores open at least a year in April, helped by demand for Easter merchandise.

Source: Yahoo! News: Business | 7 May 2009 | 12:29 pm

GM posts $6 billion first quarter loss

General Motors Corp. lost $6 billion in the first quarter and its revenue was cut nearly in half as car buyers feared the wounded auto giant would enter bankruptcy and no longer honor its warranties.

Source: L.A. Times - Business | 7 May 2009 | 12:29 pm

GM posts $6 billion first quarter loss

General Motors Corp. lost $6 billion in the first quarter and its revenue was cut nearly in half as car buyers feared the wounded auto giant would enter bankruptcy and no longer honor its warranties. ...
Source: RSS feed - channel BNPaperBusiness | 7 May 2009 | 12:29 pm

Bank of England to pump another £50bn into economy as it steps up recession fight

The Bank steps up efforts to fight the recession as it keeps rates at 0.5pc
Source: Telegraph Finance | 7 May 2009 | 12:25 pm

Eurozone rates cut to record 1% low

The European Central Bank (ECB) today pulled out all the stops in its drive to shore-up the slumping eurozone economy by cutting interest rates to a record 1 per cent low and embarking on further ground-breaking, aggressive measures.


Source: Latest Business News from Times Online | 7 May 2009 | 12:24 pm

Volvo auction moves ahead; decision possible soon

NEW YORK (Reuters) - Ford Motor Co's sale of Volvo is moving ahead as it runs due diligence on the remaining bidders, and a buyer could be announced by the end of this month or next, two sources familiar with the matter told Reuters.
Source: Reuters: Business News | 7 May 2009 | 12:24 pm

Nasdaq OMX Group 1Q profit slides 22 pct (AP)

AP - Nasdaq OMX Group Inc. said Thursday its first-quarter profit fell 22 percent compared with a year-ago quarter where it booked hefty gains on foreign currency contracts.
Source: Yahoo! News: Stock Markets News | 7 May 2009 | 12:24 pm

Gas and electricity: hopes of a price war as British Gas takes annual bill below £1000

All the 'big six' energy suppliers have now reduced electricity prices this year.
Source: Telegraph Finance | 7 May 2009 | 12:23 pm

Unilever gains as its big brands shine

Unilever, which owns brands such as PG Tips tea and Persil washing powder, was the top riser on the FTSE 100 this morning after revealing better than expected results in the first quarter.


Source: Latest Business News from Times Online | 7 May 2009 | 12:22 pm

GM posts loss; burns through $10 billion (Reuters)

Reuters - General Motors Corp said it burned through $10.2 billion in the first quarter as it failed to cut costs fast enough to offset a sharp decline in global sales and was kept afloat by a federal bailout.

Source: Yahoo! News: Business | 7 May 2009 | 12:20 pm

Vedanta profits fall 75% on lower metal prices

Vedanta, the FTSE 100-listed miner, said that its profits fell by 75 per cent last year and it will cut capital expenditure by $5.3 billion ($£3.5 billion) after a collapse in commodity prices.


Source: Latest Business News from Times Online | 7 May 2009 | 12:17 pm

Nintendo's Wii success may begin to wane

Nintendo said today that its fiscal 2008 profits were the strongest it had ever recorded, but admitted it would struggle to repeat the performance in the current year as sales of its two main games consoles peak and foreign exchange turmoil hits the bottom line.


Source: Latest Business News from Times Online | 7 May 2009 | 12:14 pm

Sales slump doubles losses at GM

General Motors announces a loss of $6bn for the first three months of this year as a massive slump in sales hits revenues.
Source: BBC News | Business | World Edition | 7 May 2009 | 12:07 pm

U.K. holds rates

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 7 May 2009 | 12:02 pm

One in three people now listens to digital radio

More than a third of people now listen to digital radio sparking hope in the industry that the Government could agree to switchoff the FM and AM airwaves sooner 2017.
Source: Telegraph Finance | 7 May 2009 | 11:58 am

SIRIUS XM Manages Gains & Raises Guidance (SIRI)

SIRIUS XM Radio (Nasdaq: SIRI) posted a pro forma revenue gain of 5% from last year of $605.5 and posted $108.8 million in pro forma adjusted income from operations (up $179 million year over year). The satellite radio operator also noted that cash operating costs fell 23% over last year.  More importantly, SIRIUS is raising [...]

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Source: 24/7 Wall Street | 7 May 2009 | 11:53 am

Why Education Matters

Source: Business Pundit | 7 May 2009 | 11:53 am

Bank to make more bond purchases

The Bank of England voted to hold rates steady at half a percentage point on Thursday and said it would expand its 75bn quantitative easing programme as it cited concerns about the fragility of the world's...
Source: RSS feed - channel BNPaperBusiness | 7 May 2009 | 11:51 am

Interest rates: The best mortgage deals

The MPC decision to maintain Bank Rate at 0.5pc was expected but many brokers warn that borrowers should not be lulled into a false sense of security as rates will not reamin so low forever.
Source: Telegraph Finance | 7 May 2009 | 11:47 am

GM losses hit $6bn as cash burn grows$

General Motors (GM), the giant US carmaker which is attempting to stave off bankruptcy, made a loss of $6 billion and burned through $10.2 billion in cash during the first quarter of the year.$


Source: Latest Business News from Times Online | 7 May 2009 | 11:47 am

ECB cuts interest rates to 1%

The European Central Bank on Thursday cut its main interest rate by a further quarter percentage point to 1 per cent as it prepared to unveil a package of additional measures to fight continental Europe's...
Source: RSS feed - channel BNPaperBusiness | 7 May 2009 | 11:46 am

BoE increases QE program, leaves rates on hold

LONDON (Reuters) - The Bank of England said on Thursday it would increase the size of its asset purchase program by 50 billion pounds to 125 billion pounds, and left interest rates at a record low 0.5 percent for a second month.
Source: Reuters: Business News | 7 May 2009 | 11:44 am

Obama whacking 121 federal programs

The White House on Thursday will detail a proposal to save $17 billion next year by eliminating or reducing 121 federal programs, according to a senior administration official.
Source: Business and financial news - CNNMoney.com | 7 May 2009 | 11:37 am

BoE increases QE program, leaves rates on hold (Reuters)

Reuters - The Bank of England said on Thursday it would increase the size of its asset purchase program by 50 billion pounds to 125 billion pounds, and left interest rates at a record low 0.5 percent for a second month.

Source: Yahoo! News: Business | 7 May 2009 | 11:37 am

Jaguar Land Rover case will tell us whether Labour really believes in UK manufacturing

Labour has driven head on into a row over the future of Jaguar Land Rover which has left its much heralded industrial policy and its desire to support high end manufacturing a mangled wreck.
Source: Telegraph Finance | 7 May 2009 | 11:36 am

GM’s (GM) Losses Go Global And Market Share Collapses

GM (GM) lost money in the last quarter, a total of $6 billion. That it only lost that much is a testament to its successful cost control work. The company’s revenue dropped a breathtaking 47% to $22.4 bllion. It is a miracle that reduced expenses could even come close to matching that collapse. The really bad [...]

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Source: 24/7 Wall Street | 7 May 2009 | 11:35 am

British Gas electricity bills cut

British Gas will reduce electricity prices by 10% with immediate effect, the last of the major suppliers to do so.
Source: BBC News | Business | World Edition | 7 May 2009 | 11:32 am

Bank under pressure as gilt yields rise

Benchmark 10-year gilt yields which have an inverse relationship with prices fell to 3.65 per cent after the Bank of England announced plans on Thursday to step up its quantitative easing programme...
Source: RSS feed - channel BNPaperBusiness | 7 May 2009 | 11:31 am

Top Analyst Downgrades (AMSC, T, MU, MS, RWT, SYMC, UBSI, VZ)

These are some of the top pre-market analyst downgrades and cautious research calls from Wall Street this Thursday morning: American Superconductor (AMSC) Cut to Hold at Deutsche Bank. AT&T (T) Cut to Neutral at at JPMorgan. Micron Tech (MU) Cut to Hold at Deutsche Bank. Morgan Stanley (MS) Cut to Market Perform at KBW. Redwood Trust (RWT) Cut to Neutral [...]

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Source: 24/7 Wall Street | 7 May 2009 | 11:24 am

Barclays pre-tax profits up 15%

Barclays Bank announces a sharp rise in profits in the first three months of this year despite a jump in bad debts.
Source: BBC News | Business | World Edition | 7 May 2009 | 11:20 am

Top Analyst Upgrades (BAC, CTRP, ENOC, FITB, RTP, THQI, USM)

These are some of the top pre-market analyst upgrades or positive research calls from Wall Street this Thursday morning: Bank of America (BAC) Raised to Outperform at Baird; Raised to Overweight at Morgan Stanley. Ctrip.com (CTRP) Started as Outperform at Oppenheimer. EnerNOC (ENOC) Raised to Buy at Janney Montgomery. Fifth Third Bank (FITB) Raised to Outperform at KBW. Rio Tinto [...]

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

Banks and insurers lead FTSE higher

London equity markets were higher on Thursday after the tension surrounding the results of stress tests on US banks was lifted by Tim Geithner, US Treasury secretary.The US Treasury and Federal Reserve...
Source: RSS feed - channel BNPaperBusiness | 7 May 2009 | 11:10 am

Interest rates: Bank Rate on hold but savings rates rise

The savings market has been a hive of activity despite Bank Rate remaining at 0.5pc.
Source: Telegraph Finance | 7 May 2009 | 11:05 am

Bank of England pledges to pump another £50bn into the economy

The Bank steps up efforts to end the recession as it keeps rates at 0.5pc.
Source: Telegraph Finance | 7 May 2009 | 11:01 am

Bank expands 'money printing' scheme by £50bn

The Bank of England stepped up its aggressive campaign to end Britain’s economic slump today by ordering a surprise £50 billion expansion of its radical scheme to jump-start growth by “printing money”.


Source: Latest Business News from Times Online | 7 May 2009 | 11:01 am

SocGen defies European bank rally

Socit Gnrale bucked the trend in the European bank sector to drop to the bottom of the Paris bourse on Thursday after publishing an unexpectedly sharp first-quarter net loss due to writedowns at its investment...
Source: RSS feed - channel BNPaperBusiness | 7 May 2009 | 10:55 am

Domestic & Global Rigs Counts Still Contracting, But Slower (BHI)

Baker Hughes Incorporated (NYSE: BHI) has announced its monthly rig counts for the month of April on the domestic and on a global basis.  The good news is that the rate at which the rigs are shrinking is contracting.  The bad news is that the rig counts are still contracting, despite the rise in oil [...]

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Source: 24/7 Wall Street | 7 May 2009 | 10:43 am

Asian stocks rally on stress test results

Banks led a 4.6 per cent rally on Japan's Nikkei 225 average to a six-month closing high on Thursday as investors returned from three days of public holidays eager to catch up with the rally across the...
Source: RSS feed - channel BNPaperBusiness | 7 May 2009 | 10:33 am

European stocks jump before ECB rate call (AFP)

AFP - Europe's leading stock markets rose strongly in morning trading on Thursday as traders awaited a key ECB rate decision and results of so-called "stress tests" of US banks hit by the global credit crunch.

Source: Yahoo! News: Stock Markets News | 7 May 2009 | 10:33 am

Defensive Stocks Refuse To Participate In Rally (PEP, KO, TAP, KFT, CAG, CPB, HRL, MCD, MO, PG, CL, MRK, JNJ)

Investors flock to defensive stocks in times of trouble and and when they worry, assuming they look to stay in the market when they are worried.  But if the trend here continues, this may be one of the worst times for defensive stocks compared to the overall market.  Our universe of 13 large-cap go-to defensive [...]

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

Trouble For Verizon (VZ) And AT&T (T): The Home Phone Is Disappearing Faster

Verizon (VZ) and AT&T (T) are in a race to see whether the growth in their cellular and broadband businesses can accelerate faster than their residential landline businesses are shrinking. The fate of their earnings hangs in the balance. The recent news about the prospects of holding onto landline customers has not been terribly good. According [...]

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Source: 24/7 Wall Street | 7 May 2009 | 10:30 am

World stocks rise ahead of US stress tests results (AP)

AP - European markets extended their rally Thursday ahead of the announcement of the results of the U.S. government's stress tests on the country's biggest banks and in anticipation of key interest rate decisions in Europe.

Source: Yahoo! News: Stock Markets News | 7 May 2009 | 10:28 am

EU broadens Northern Rock probe

The European Commission widens its investigation into whether UK government aid for Northern Rock breached EU rules.
Source: BBC News | Business | World Edition | 7 May 2009 | 10:28 am

Crude jumps to 6-month high

Commodities prices rallied across the board on Thursday, with crude oil jumping to almost $58 a barrel, the highest level in nearly six months, base metals rising strongly and agricultural commodities...
Source: RSS feed - channel BNPaperBusiness | 7 May 2009 | 10:25 am

Car sales fall but demand for run-arounds rises

Sales of new cars in Britain fell for the 11th successive month in April, declining by 24 per cent, but demand for smaller motors increased.


Source: Latest Business News from Times Online | 7 May 2009 | 10:24 am

Euro slips ahead of ECB decision

The euro hit a 10-week low against the pound on Thursday ahead of the European Central Bank interest rate-setting meeting, which investors expect to also give indications of possible quantitative easing...
Source: RSS feed - channel BNPaperBusiness | 7 May 2009 | 9:53 am

European stocks rise at open (AFP)

AFP - Europe's leading stock markets rose at the start of trading on Thursday, with London's FTSE 100 index of leading shares gaining 0.28 percent to 4,408.75 points after Barclays bank posted positive results.

Source: Yahoo! News: Stock Markets News | 7 May 2009 | 9:02 am

Marchionne to be Chrysler chief

Fiat chief Sergio Marchionne says he will take charge of Chrysler once it emerges from bankruptcy protection.
Source: BBC News | Business | World Edition | 7 May 2009 | 8:49 am

UK car sales 24% lower in April

UK car sales fell by 24% in April compared with the same month last year, the latest industry figures show.
Source: BBC News | Business | World Edition | 7 May 2009 | 8:41 am

Czech PM does not regret 'road to hell' row

Mirek Topolanek, the outgoing Czech prime minister who steered the European Union's affairs for four months, says he has no regrets about condemning US economic policies as a potential 'road to hell'; he adds that he would have reined in the free-wheeling Middle East diplomacy of Nicolas Sarkozy, the French president
Source: Financial Times - US homepage | 7 May 2009 | 7:55 am

Gold sales cost Europe's central banks $40bn

Europe's central banks are $40bn poorer than they might have been after they followed a British move taken 10 years ago to shrink the Bank of England's gold reserves, analysis by the Financial Times has shown
Source: Financial Times - US homepage | 7 May 2009 | 7:55 am

KKR pays $1.8bn for Korea's Oriental Brewery

Anheuser-Busch InBev has announced the sale of its South Korean brewery to Kohlberg Kravis Roberts, the US private equity fund, for $1.8bn
Source: Financial Times - US homepage | 7 May 2009 | 7:44 am

Lloyds bad debts to soar 50% on HBOS loans

Shares in Lloyds Banking Group, which is 44 per cent owned by the state, plunged by 11 per cent today after triggering fears that its toxic debt rescue deal with the Government may have to be renegotiated, placing more of the burden for its growing losses on the British taxpayer.


Source: Latest Business News from Times Online | 7 May 2009 | 7:02 am

IPhone app firm SonicMule puts music at users' fingertips

Co-founder Ge Wang's love of computers and music led to Smule's Ocarina app. More than 900,000 copies of the 99-cent application have been sold, and other offerings are also doing well.

Ge Wang blows softly, his fingers move lightly, and "Auld Lang Syne" comes floating out in ethereal electronic notes.

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

Big banks' 'stress test' results to be reassuring, Geithner says

The 19 banks are likely to be forced to add billions of dollars to their cushions of capital, but the Treasury secretary expects they will need little more in federal bailout funds.

Today is judgment day for the country's biggest banks as the government releases results of "stress tests" to gauge their stability, but Wall Street celebrated a day early after concluding that there would be no bombshells about the financial industry.

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

In-N-Out: Can perfection survive?

As the burger company's future is sorted out, a connoisseur columnist urges, 'Don't change!'

My life as a fast-food consumer pretty much ended the moment my kids became old enough to drive themselves to the nearest hamburger stand.

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

News Corp.'s profit drops 70% as units suffer

The ad slump weighs heavy on the firm's third-quarter results. Only its cable division posts a revenue gain.

Finishing up a dismal earnings season for media companies, News Corp. reported a 70% drop in net income and a 16% decline in revenue last quarter, with its broadcast TV, newspapers and MySpace divisions leading the way down and only its cable unit bucking the trend.

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

Chrysler heir shifts from idle to fully engaged

Frank B. Rhodes Jr., the normally low-key great-grandson of the automaker's founder, Walter P. Chrysler, has been waging a one-man PR campaign to save the automaker.

Past Todd's Body Shop and a crab shack, across from a field of wheat on Route 291, hangs a modest sign for Frank B. Rhodes Jr., furniture maker since 1983.

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

Amazon's Kindle has a big job: saving the newspaper industry

The launch of its newest e-reader, the Kindle DX, comes with a deal that could motivate users to pay for newspaper subscriptions.

It's not even 10 inches tall, it's just one-third of an inch thick, and it costs nearly $500.

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

AIG reveals $455 million more in bonuses for 2008

Performance-related bonuses are disclosed in answer to Rep. Elijah Cummings (D-Md.), one of AIG's sharpest critics. The insurer received more than $180 billion in federal bailouts. ...
Source: RSS feed - channel BNPaperBusiness | 7 May 2009 | 7:00 am

Poker players sue L.A.-area casinos over jackpots for losers

The suit says the players were denied a chance to compete for 'bad beat' payouts, for those who lose despite holding strong hands, unless they played at tables where the house collects $1 per pot.

The house is usually a sure bet in California poker casinos. But five Los Angeles County card rooms could lose millions if two recreational poker players win a lawsuit challenging a popular jackpot promotion.

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

Australian stocks: Closing high after jobs news, overseas gains

MELBOURNE - The Australian share market posted its highest close so far for calendar 2009, finishing up almost two per cent on gains overseas and better local jobs data. At 1615 AEST, the benchmark S&P/ASX200 was up 71.6 points,...
Source: New Zealand Herald - Business | 7 May 2009 | 6:52 am

British Gas cuts electricity prices by 10%

One in four British homes is set to benefit from the biggest cut in electricity prices so far this year after British Gas announced a 10 per cent reduction in the charges for its 4.5 million customers.


Source: Latest Business News from Times Online | 7 May 2009 | 6:39 am

NZ stocks: Share market rises further

The New Zealand share market posted gains again today but brokers said investors taking profits knocked the market back from its best levels. The benchmark NZSX-50 index closed up 23.514 points, or 0.83 per cent, at 2854.874. Turnover...
Source: New Zealand Herald - Business | 7 May 2009 | 6:14 am

Currency: NZ dollar gets lift from employment data

The New Zealand dollar got a lift today from better-than-expected unemployment data. The unemployment rate rose to a six-year high of 5 per cent in the March quarter, but it was a smaller rise than economists forecast, which suggested...
Source: New Zealand Herald - Business | 7 May 2009 | 5:35 am

SEC enforcement operation under scrutiny (AP)

AP - Lawmakers are examining the enforcement operation of the Securities and Exchange Commission and whether it is up to the task of policing the marketplace at a time of shattered investor confidence and financial upheaval.
Source: Yahoo! News: Stock Markets News | 7 May 2009 | 4:49 am

Vodafone says call quality will improve now Telecom 3G fight over

Vodafone says its customers should notice improved call quality after sorting out its scrap with Telecom over the latter's new mobile phone network. Vodafone yesterday sought an injunction to stop Telecom rolling out its new XT...
Source: New Zealand Herald - Business | 7 May 2009 | 4:11 am

Treasury Comments Lift Stock Futures (Market Update)

News at a Glance

• Don't Stress: None of 19 banks risk insolvency: Geithner.
• Low Expectations: GM loses $6 billion in Q1, beating the Street.
• Rally Continues: Stocks look to open higher.
• Unemployment Surprise: Weekly jobless claims tumble.

The Lowdown

The rally is set to roll on.

Stocks look poised to open higher Thursday, as traders embraced comments from the Treasury on the state of American banks and better-than-expected results from General Motors (GM). Shortly before 9 a.m., Dow, Nasdaq and S&P 500 futures were trading above fair value.

Treasury Secretary Timothy Geithner sought to allay fears stoked by the stress tests when he said Wednesday night that none of the 19 banks examined by the federal government are at immediate risk of insolvency. The stress tests had been meant to measure the banks' susceptibility to buckling under extraordinary economic circimstances, not to gauge their current fiscal health (In other words, there are plenty of better things to worry about.).

The results of the stress tests were given to the banks Monday but are scheduled to be released to the public today. The market has already reacted to leaked portions of those findings, including the fact that ten out of the 19 banks examined were told to boost their capital levels. Early reports suggested Bank of America (BAC) and Citigroup (C) would have to raise their capital levels by several billion dollars each.

In economic news, the labor market got a bit of good news ahead of tomorrow's monthly jobs report. Weekly jobless claims fell last week to 601,000, catching economists off guard. Separately, the Labor Department said productivity grew by 0.8% during the first quarter, a bit better than consensus estimates.

In autos, GM posted a $6 billion first-quarter loss. Excluding one-time charges, GM lost $5.9 billion, or $9.66 a share, not quite as bad as the loss of $11.05 a share that analysts were expecting. The firm had said global vehicle sales fell 28% during the first quarter, as North American sales declined by nearly half. The automaker and Dow component has been asked by the government to trim its debt by more than $40 billion. If the company is forced to restructure, it could effectively wipe out existing shareholders though a substantial capital infusion and a reverse stock split.

In Washington, President Obama pledged to make some cuts, as well. The President promised to trim $17 billion from the 2010 budget by erasing or scaling back 121 unique federal projects.

World markets were higher. In Asia, Japan's Nikkei finished up 4.6%, while Hong Kong's Hang Seng picked up 2.4%. In Europe, the FTSE rose 2.5% in midday trading.

On the Nymex, energy prices continued their rally. By 8:04 a.m., crude traded up $1.60 at $57.94 a barrel.

Corporate News

• Unilever (UN) reported an unexpectedly large bump in underlying sales during the first quarter. The consumer products firm posted a sales increase of 4.8%, as home care products did particularly well. Sales growth was strongest in Asia and the Americas.
• Microsoft (MSFT) Chief Executive Steve Ballmer expressed some interest in partnering with Yahoo (YHOO) on a new search tool, Reuters reported. The comments came as Ballmer had been spending time in the San Francisco Bay area, not far Yahoo's headquarters.
• Nintendo (NTDOY) posted an 8.5% increase in annual net profit, as consumers refused to include video games on their list of expendable luxuries last year. The firm reported a net gain of $2.8 billion for the fiscal year.

The Economy

• Weekly jobless claims fell to 601,000 last week, down from a revised 635,000 in the prior week, the Labor Department said. Economists had expected the number of people filing for unemployment benefits for the first time to come in at 635,000. REPORT
• Productivity grew by 0.8% during the first quarter, up from a revised 0.6% fourth-quarter decline, according to a preliminary reading taken by the Labor Department. For the first quarter, economists had predicted a 0.6% productivity increase. REPORT

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Source: SmartMoney.com | 7 May 2009 | 4:00 am

Looking Ahead to Restructured Markets

WHEN RON BARON STARTED OUT AS A STOCK ANALYST in 1970, he didn't specialize in a particular sector, but traveled the U.S. writing about all kinds of companies.

Baron, 65, who founded Baron Capital Group in 1982, still sees investment opportunities across many sectors -- including energy, technology, education and gaming. "When you are coming off a historic low [in the stock market], I think everything is interesting," he says.

The New York firm, which oversees nearly $13 billion, has a growth bent, although Morningstar says Baron hews to a "valuation-conscious strategy." The Baron Growth Fund (BGRFX), which he runs, ranks in the top 20% of Morningstar's small-cap growth category based on three-, five- and 10-year returns. In the 12 months through Thursday, it was down 32.33%, leaving it 2.51 percentage points behind the Morningstar Small Growth Index. Last week, we caught up with Baron, a former Barron's Roundtable member, to get his latest perspective.

Barron's: What is your overall assessment of the stock market?

Baron: We invest for the long term, at a time when everything is focused on trading -- whether it is the reflation trade, the carry trade or the gold trade. We look for businesses that are well financed, have a competitive advantage, and are managed by people we like and who are going to allow these businesses to take advantage of their opportunities.

But this is a very challenging time. Our business depends on assets under management. Our revenues are down and, as a result, our profits are less. So we have to make sure we are very careful about how we run our business.

On the other hand, this is the most attractive time to be an investor in my lifetime.

What else makes you so bullish on stocks, which you consider to be the most attractive asset class?

Stocks are cheap. They are down more than 40% from their peak in October of 2007, and that is in line with their profit decline. But stocks are now selling for less than their replacement cost -- that is, what it costs to build the businesses or build the buildings. That's very important because until profits go up and prices go up for the services of existing businesses, you aren't going to get more competition.

What is the outlook for the financial system?

In 1982, the U.S. had $5.8 trillion of debt, which represented 174% of [gross domestic product]. In 2008, it was $52.6 trillion, or 369% of GDP.

The debt is out of whack with our economy, and there have to be significant changes. This could have happened last year, it could have happened five years ago or 10 years ago -- you never knew when it was going to happen. But there has to be a restructuring of the financial system.

So what will things look like?

There will be less leverage. There will be less proprietary trading. There will be fewer [leveraged buyouts], and there will be less derivatives trading. The derivatives that are traded will be on exchanges, so you won't have to rely on counterparties you don't know. And you are going to have to have, in many instances, an insurable interest.

Which is?

It is analogous to life insurance. If you think I'm going to die, you can't go out and buy life insurance on my life. You don't have an insurable interest in my life. That is the way it should be for credit-default swaps.

So that means less profits in the financial sector?

Less profits, but those profits will be given a higher multiple. One of my friends runs a very large investment bank in the U.S. We were at a golf course about two years ago, and he was saying to me, "I'm so upset with how my stock is being valued by investors. They are valuing me like I'm a hedge fund." And I said, "You are a hedge fund." The way his firm was leveraged, it was a hedge fund.

A lot of stocks remain cheap, the recent rally notwithstanding. Is it harder to separate the wheat from the chaff?

The companies that are doing better just stand out more. One of the big themes is that certain companies are the beneficiaries of the competitive problems of others. We look for outstanding people running businesses with initiatives that are able to take advantage of their competitors' problems.

What is an example of that?

For the most part, we don't invest in banks, but we have a stake in People's United Financial [PBCT], based in Connecticut. It has become the 11th-largest bank in the country by market capitalization.

It used to be a small regional bank, right?

Yes, it was. But now, because of its access to low-cost deposits and [the fact] that it chose not to invest in risky assets and raised capital exactly at the appropriate time, it has a market cap of about $5.6 billion, and $2.5 billion of excess cash.

They are making a very small return on that extra cash, but it will enable them to make acquisitions. All the loans on its balance sheet were made before 2006. And its loan portfolio is very strong when measured by [the] loan-to-value [ratio]. So even if house prices have fallen 50%, which I don't think they have, they are still in good shape as far as performing assets, thanks to strong underwriting standards.

What is the case for active management, which has taken a hit in the wake of this big downturn in the equity market?

With index funds, you are going to be investing in the most successful businesses at that point in time, and at the top of the market you will be massively overweighted in those companies.

That was oil and gas in the 1970s and 1980s. In the 1990s, it was technology. Earlier this decade, it would have been financial companies, which you would have invested in at exactly the wrong time. When you invest in our funds or other mutual funds that are actively managed, the idea is that you are going to be investing in businesses that a team of analysts and portfolio managers has carefully chosen.

But not every fund is going to outperform its peer group or benchmark. So isn't there another side to this debate?

Of course there is. But investors have a tool: Morningstar [MORN], which we hold. Morningstar has write-ups of companies and mutual funds. Just as I read opinions on stocks, individual investors can read opinions about their mutual funds.

Have hedge funds and private equity had their day in the sun?

Yes, they have. I have never thought that they should be interesting investments. In fact, they are just simply very leveraged ways to invest in businesses. The government allowed this to happen, and they let the financial industry become too leveraged. They let the financial industry take advantage and do things that put our system in jeopardy. But now I'm so excited about our president, Barack Obama, and the head of our Federal Reserve, Ben Bernanke. They realized that there are structural problems in our financial system. President Obama also realized there are structural problems in energy, and his administration is dealing with that right now.

Why do you find that sector attractive?

Energy is a commodity, and we have always contended the price of a commodity ultimately goes to the cost of production, at which point you stop producing it.

Last summer, the price of crude was close to $150, way above the cost of production, and at the same time, the reserves in the ground were enormous, with people rushing to produce and overproduce. Since then, the price has fallen dramatically, to $40 or $50 a barrel. At those prices, it is now at the cost of production. The number of rigs in the U.S. used to find oil and gas has dropped from roughly 1,900 to 900. And there is something called a decline curve. The older a well becomes, the less oil and gas it produces. When you produce from a new shale-oil well, for example, production falls 70% in the first year. On average in America, 20% to 30% per year is the decline we are experiencing in existing wells. So there is falling production in existing wells and fewer new wells, and that should lead to higher energy prices.

What are some areas of energy that interest you as an investor?

There will be opportunities to invest in energy conservation and transmission, which needs upgrading. In France, 80% of power for utilities comes from nuclear; here, it is 20%. We will have to go to 50%. In America, it is 2% in wind, versus 20% in Spain.

So we are going to have to mandate more extensive energy power to America. The government is going to have to say, 'OK, utilities, you have to get a certain percentage from nuclear, and you have to get a certain percentage from wind.' One play on this theme is ITC Holdings [ITC], an electricity-transmission company.

Turning to a different sector, another of your long-time holdings is Wynn Resorts. What's to like there?

We invested in Wynn Resorts [WYNN] this time around in 2001, and we bought about 10 or 11 million shares for about $135 million, and we got about $70 or $80 million of dividends back. We sold half of our stock between 100 and 150. But unfortunately for us, we didn't sell the other half, which went from 170 in the fall of 2007 down to around 19 recently.

In March, we bought about 1.7 million shares when they were at 19. They are now at 39 and change. We think Wynn has been well-managed financially. At the peak, the company was valued at $10 billion or $11 billion, when it was selling for a high multiple on peak earnings. Now it is selling for a low multiple on trough earnings.

And they have a lot of debt.

But the reason the stock is doing better is because the company did an equity offering, which we participated in, in March, when they issued 9.6 million new common shares. Any company that has raised equity lately, and which had debt that now looks like it has a clear shot of not having difficulty, is considered a survivor, and the stocks have gone up, including Wynn.

What about another holding?

Blue Nile [NILE] is a purveyor of diamonds on the Internet. Instead of going into the mall stores, you can buy directly from Blue Nile without the five or six levels of distribution from the diamond mines.

We have been an investor in the company since it went public in 2004. Of course, in this environment they aren't doing as well as they had been, with people deferring purchases or buying smaller items. But they do sell 2% of all the diamond engagement rings in America. One thing that will help them is that a lot of the competitive stores in the mall are going out of business.

Another pick?

I have been investing in DeVry [DV], which provides various education programs, since 1990. The stock has gone from north of 60 in January to around 43 late last week; we have recently been adding to our holdings in DeVry and Strayer Education [STRA]. The state colleges, because of budget constraints, aren't offering as much of a program as they did before, so DeVry and Strayer are beneficiaries. Their enrollments are up strongly.

Some closing thoughts?

We don't predict the stock market, but it is clear we are in very challenging times, and that earnings are under pressure. The [Standard & Poor's] 500 is making about 40% less than it did at the peak. But if you focus on fundamentals, on balance sheets that are strong, and on businesses that are surviving and that have competitive niches, you are going to do fine in the long run, even if you don't in the short term. I would hope that stocks could be back to where they were when they peaked in four or five years -- and maybe even sooner if we get lucky.

What about lessons learned from this financial upheaval?

One of my very good friends lost his son two years ago in a helicopter accident. His son was the president of their business. The father had been a boxer in South Africa, where he came from, and he became very successful. The father called together his executives to announce the death of his son. When he finished -- and I don't really understand how he was able to compartmentalize this -- he said, "We have to box on." I can't imagine how he does this. But for us, it is very easy to just box on. There are opportunities everywhere to invest at prices that I don't think we are going to see again in a generation.

Thanks, Ron.

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 | 7 May 2009 | 4:00 am

4 Consumer-Friendly Credit Cards (Deal of the Day)

Consumers, legislators and advocates are clamoring for new legislation that will rein in the credit-card industry. The aim: a kinder, gentler card.

However, many credit-card issuers have a long way to go before they'll put an end to some of their nastiest practices -- including raising rates on existing balances for any reason they choose, applying payments to the lower-rate part of a balance while the higher-rate portion gathers finance charges and slashing credit limits to below consumers’ existing balances.

The Federal Reserve passed a new series of regulations that would, among other things, prohibit issuers from raising rates on existing balances unless the cardholder is more than 30 days late and require that payments go toward the high-rate portion of the balance first. The problem is that credit-card issuers don't have to meet these new requirements until July 2010. Both the House of Representatives and the Senate have put forth bills that support those rules – and possibly seek to put them into effect much sooner.

Yet, despite the more than 13-month window card issuers have to put the Fed's rules into effect, there are a few that have already taken steps to implement them, says Samir Kothari, co-founder of BillShrink.com, a web site that compares credit-card terms and deals. The site has been tracking issuers’ compliance with eight key rules that are included in the House's Cardholder’s Bill of Rights, including providing 45 days’ notice of rate increases (five major issuers do this, including Wells Fargo (WFC) and Bank of America (BAC)) and letting cardholders set account limits so they can’t overspend (six, including American Express (AXP) and Discover (DFS), do this).

SmartMoney talked to credit counselors, consumer advocates and firms that assess credit-card offers to find out which cards are among the first to enact these new favorable terms and which offer the best perks for different types of spenders. Here are four worth considering:

Discover Motiva 

Best for: Carrying a balance
Introductory offer: 3.99% on purchases and balance transfers for up to 12 months.
APR: As low as 10.99% variable.
Annual fee: None.
Rewards: Make six consecutive on-time payments, and receive a cash bonus equal to your next month’s interest charge. You'll also earn 0.25% cash back on the first $3,000 in purchases annually, and 1% back on everything thereafter.

Per Fed rules, Discover lets cardholders fix their credit limit so that any purchase that would put them above it will be declined. That, along with cash back and bonuses for on-time payments, can help consumers keep their spending in check, says Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling. “This is for the person who is not able to pay off the card in full when it arrives, and doesn’t want to dig into that natural debt hole that usually follows,” she says.

Discover (DFS) is also one of the few payment-friendly issuers, letting you choose your own due date and make free payments via phone -- even at the last minute. It follows the Fed’s rule that any payment made by 5 p.m. on the due date is on time.

Wells Fargo Platinum 

Best for: A low rate
Introductory offer: 0% on purchases and balance transfers for up to nine months.
APR: 7.65% variable.
Annual fee: $0, or $19 if you want to participate in the optional rewards program.
Rewards: None included. Opt into the paid rewards program, and earn one point per dollar spent on every purchase.

“Wells Fargo (WFC) subscribes to some of the more important aspects of the Bill of Rights,” says Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Groups, a consumer advocate. It won’t raise your rate if you’re late on an unrelated account, and it provides at least 45 days’ notice of rate increases. Also, statements are mailed to cardholders at least 25 days before the due date.

Once the 0% teaser offer expires, the Wells Fargo Platinum card offers one of the best ongoing rates around for a major bank -- 7.65%. (The average low-rate credit card has a rate of 8.92%, according to Bankrate.com.) The catch: You’ll need a bank account with Wells Fargo to apply. “That seems like a pretty high bar to me,” says Mierzwinski. Make sure the account terms are to your liking before tethering yourself to the bank.

Citi Forward 

Best for: Earning rewards
Introductory offer: 0% on purchases and balance transfers for up to six months.
APR: 12.24% variable.
Annual fee: None.
Rewards: Earn five points per dollar spent on books, movies, music and restaurants, and one point per dollar spent on everything else. Pay on time and stay below your limit to earn 100 bonus points per month. You can also earn two one-time bonuses: 6,000 points when you spend $50 within three months of opening the card, and 5,000 when you sign up for paperless statements within that time period.

Pitched as a card that rewards those who maintain healthy credit, Citi Forward reduces the rate by 0.25% every three consecutive months you pay on time and stay below your limit. (Each account has an eight-reduction maximum, or 2%.) While the card is a little gimmicky (it’s not the best card for carrying a balance, despite the pitch), the rewards are some of the best around, says Curtis Arnold, founder of card comparison site CardRatings.com.

Citibank (C) adheres to Fed rules including those that eliminate double-cycle billing (which computes finance charges based on purchases made in the current and previous billing cycles). It also provides cardholders with at least 45 days’ notice of rate hikes.

Capital One Platinum Prestige 

Best for: Transferring a balance
Introductory offer: 0% on purchases and balance transfers for up to 12 months.
APR: 11.9% variable.
Annual fee: None.
Rewards: None.

“If you’re transferring a balance, your goal is to minimize the total cost,” says Greg McBride, senior analyst for Bankrate.com. That means no annual fee, a lengthy promotional-rate term and (if possible) a low transfer fee. Capital One’s Platinum card hits the mark on the first two. “Use that 0% as a tailwind to pay off the debt,” he advises. For best results, don’t add to the balance.

Per the Fed’s rules, Capital One (COF) mails out its statements 25 days before the due date, and doesn’t use double-cycle billing. It also lets cardholders set a fixed credit limit that they can’t exceed.

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 | 7 May 2009 | 4:00 am

Unemployment up to 5pc - less than feared

The unemployment rate rose to a six-year high 5 per cent in the March quarter, but that was a smaller rise than economists forecast as more people than expected dropped out of the workforce. The rate, which increased from a revised...
Source: New Zealand Herald - Business | 7 May 2009 | 3:00 am

Super Fund says April a good month for its investments

The New Zealand Superannuation Fund recorded its second positive monthly return in April since the world wide recession sent it into a nose dive, the fund's chief executive Adrian Orr said today. Speaking after appearing at a parliamentary...
Source: New Zealand Herald - Business | 7 May 2009 | 2:30 am

Ash calls for cigarettes to be excluded from FTAs

An anti-smoking group is calling for tobacco to be excluded from free trade agreements (FTAs). Former Labour MP Mark Peck, now spokesman for Action on Smoking and Health (Ash), told the Parliament' defence and trade committee,...
Source: New Zealand Herald - Business | 7 May 2009 | 2:16 am

Surprise fall in Aust unemployment

Sydney - A surprise fall in the nation's unemployment rate suggests Australia is navigating its way through the global recession in better shape compared to its trading partners, economists say. Australia's unemployment rate was...
Source: New Zealand Herald - Business | 7 May 2009 | 2:00 am

US jails China bankers for fraud

Two former Bank of China managers and their wives are jailed in the US for embezzling $485m.
Source: BBC News | Business | World Edition | 7 May 2009 | 1:39 am

National Bank cuts interest rates

National Bank has cut its 6 month mortgage rate by 34 basis points (bps) to 5.45 per cent today, and its one-year rate by 29 bps to 5.50 per cent. This follows the 50 bps cut in the Official Cash Rate to 2.50 per cent by the Reserve...
Source: New Zealand Herald - Business | 7 May 2009 | 1:39 am

Chrysler rebels hold out over $295m debt

Dissident creditors who are trying to block the reorganisation of Chrysler are a small group of investors that are owed just $295m, court documents show
Source: Financial Times - US homepage | 7 May 2009 | 1:15 am

Fisher Paykel share price rise queried

A rise in the share price of Fisher & Paykel Appliances Ltd was queried by NZX Regulation today. NZX Regulation asked the company if there was any reason why its share price had risen 15c between May 1 and May 6 to 63c. The...
Source: New Zealand Herald - Business | 7 May 2009 | 1:05 am

How the major stock indexes fared Wednesday (AP)

AP - Investors felt more confident putting their money into banks on the eve of a government report card on big financial companies. Bank stocks pulled the market higher Wednesday as media reports trickled out that indicated balance sheets at major lenders might not be as frayed as some had feared. The word came a day ahead of the formal release of results from government "stress tests" aimed at determining which banks need to raise more capital.
Source: Yahoo! News: Business | 7 May 2009 | 12:44 am

How the major stock indexes fared Wednesday (AP)

AP - Investors felt more confident putting their money into banks on the eve of a government report card on big financial companies. Bank stocks pulled the market higher Wednesday as media reports trickled out that indicated balance sheets at major lenders might not be as frayed as some had feared. The word came a day ahead of the formal release of results from government "stress tests" aimed at determining which banks need to raise more capital.
Source: Yahoo! News: Stock Markets News | 7 May 2009 | 12:44 am

Obama's budget knife set to cut $17bn

The White House will detail $17bn of proposed budget reductions as the US administration attempts to boost its deficit-cutting credentials at a time of hugely increased government spending
Source: Financial Times - US homepage | 7 May 2009 | 12:32 am

Billions required to bolster US banks

Citigroup and Bank of America have emerged as the US banks with the biggest capital shortfalls after the completion of the government's 'stress tests'', with Citi's capital needs projected to be more than $50bn and BofA requiring about $34bn in fresh equity
Source: Financial Times - US homepage | 7 May 2009 | 12:02 am

Presented By:

Source: Dealbreaker | 6 May 2009 | 11:17 pm

Write-Offs: 05.06.09

$$$ Morgan Stanley needs money [WSJ]

$$$ One Sign the Worst Is Behind Us [Cityfile]

$$$ Records Show How Madoff Used Firm as 'Piggy Bank' [Dealbook]

Related: Morgan Stanley - Business - Financial Services - Banking Services - Banks and Institutions
Source: Dealbreaker | 6 May 2009 | 11:17 pm

Porsche and VW agree merger

Porsche family members agree to create an 'integrated car-manufacturing group' with 10 marques united under one roof
Source: Financial Times - US homepage | 6 May 2009 | 11:04 pm

Floating Above The Clouds

To keep the engine in this fantasy hot-air blimp running, you occasionally have to steal some petrol from the passengers, and then paint "Complaint Office" on the door that leads out to thin air and a 9,500 foot drop. Oh, and you have to borrow a bunch of cash to pay the landing crew.

The U.S. Senate on Wednesday approved a measure to expand a government credit line for the Federal Deposit Insurance Corp in case the agency's reserves prove too small to deal with a growing wave of bank failures.

The legislation would also shield mortgage finance companies from investor lawsuits if those firms ease monthly payments for troubled homeowners.

The FDIC, which guarantees bank deposits, has been able to tap the Treasury Department for up to $30 billion since 1991. That credit line would be increased to $100 billion under the new bill.

Of course, we all hoped that gassing up the FDIC like an Indy 500 pit crew wasn't going to be necessary, but that was a pretty fantastic hope as well.

Look on the bright side: Sure, no one believed that the FDIC's participation in the PPIP's was "riskless," but now that the administration has demonstrated what cooperation with the government means, and a variety of government attorneys have pointed out that salary caps likely will apply to PPIP participants, there really is no risk as there will be no guaranteeing. FDIC cash can, therefore, go where it was meant to go. To backstopping the Treasury's expanding balance sheet. (What? What do you mean that's not what it's for?)

Senate expands credit lines to FDIC reserves [Reuters]

Related: Federal Deposit Insurance Corporation - Business - FDIC - Deposit account - Federal Deposit Insurance Corp
Source: Dealbreaker | 6 May 2009 | 10:57 pm

A-Rooma-Zoom-Zoom!

Old timers at Dealbreaker will remember with fondness the days when Volkswagen briefly became the largest company by market-cap in the world, and when it became clear to a much wider audience that Porsche made more money from their barbarian-like, hedge fund behavior^* than that whole selling cars thing.

You might also remember that Porsche has been lusting, in the German sense, after Volkswagen, for a long time.

Now this:

Porsche Automobil Holding SE and Volkswagen AG, two of the storied names in Germany's car-making history, said Wednesday they plan to merge their operations, creating an integrated auto giant with 10 independent brands, including Porsche's coveted sports-car operations.

Following a meeting of Porsche's owner families - Porsche and Piech - the company said in a statement that a task force is set to establish within the next four weeks the basis for a merged company.

Porsche said the families Wednesday discussed proposals laid out by Porsche's and Volkswagen's executive boards, which include capital measures, and agreed that an integrated car-manufacturing group should be forged.

A person familiar with the situation said the current plan includes a possible capital increase by around EUR5 billion to reduce Porsche's debts, which fueled speculation about its financial situation in recent weeks.

"In the final structure, 10 brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured," the Stuttgart-based auto maker said.

Porsche wants, Porsche gets. No? Well, not exactly. The line that seems to be coming out is that famous "mergers of equals" play. You know, like Daimler-Chrysler? But, now even Lower Saxony (which holds a veto right) looks ready to stand aside. The times they are a changing. We'll see who is left standing.

^* "To crush your financial enemies. See der capital driven before you. Hear the lamentations of dee regulatory relations women."

Porsche, Volkswagen Seek To Merge Operations [The Wall Street Journal]

Related: Porsche - Germany - Stuttgart - Wall Street Journal - Automotive industry
Source: Dealbreaker | 6 May 2009 | 10:30 pm

Hear: Regulate Me, Baby

On today's Planet Money:

In the best tradition of The Bachelor, financial institutions get to choose from a small flock of regulators. Those regulators collect fees for their work, so they're hot to woo potential companies. The Planet Money Players, with special guest Dina Temple Raston, show you how it's done as they vie for the affections of one Adam Isaac Gavidson, better known as AIG.

Bonus: A listener indicator from the office.

Download the podcast; or subscribe. Intro music: Yeah Yeah Yeahs "Zero." Find us: Twitter/ Facebook/ Flickr

Jocelyn Lally writes:

Planet Money indicator: 2 minutes.

The approximate wait time I have to wait for the printer to "warm up," sometimes even in the middle of the day, when I send something to print.

I am always shocked when I print something in the afternoon (first thing in the morning, I can understand) and the printer hasn't been used in awhile and I have to wait about 2 minutes for it to warm up. I work in an office building in downtown Chicago, and my company takes up 2 of those floors with about 200 employees. Granted there are multiple printers per floor, but I never noticed this being a problem before. It seems people around me just don't have that much work to do, and aren't printing anything out. I, on the other hand, am busy! In fact, three people in my little cubicle corridor have just been cut to 3 days per week, but I still have plenty of work to keep me busy. We do totally different jobs, so it's not like I'm hoarding projects or anything, but I still find it strange that no one is printing anything. Maybe this downturn will benefit the environment somehow...

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Source: NPR Blogs: Planet Money | 6 May 2009 | 9:58 pm

Senate moves toward easing mortgage terms (AP)

AP - Trying to curb home foreclosures, the Senate voted on Wednesday to make it easier for homeowners with risky credit to switch to a lower-cost mortgage backed by the government.

Source: Yahoo! News: Business | 6 May 2009 | 9:27 pm

Feinstein Concerned About South African Democracy Under Zuma

Source: Bloomberg - All Podcasts | 6 May 2009 | 7:53 pm

Crescenzi Says Bank Lending Is Slow Even After Fed Bailout

Source: Bloomberg - All Podcasts | 6 May 2009 | 7:33 pm

GM Stockholder Pages Karl Marx

Twitter pal @vigorousnorth forwards this dose of outrage, from a professed GM stockholder blogging at May Shrink or Fade.

At issue: GM's plan to (as Reuters put it) "wipe out current shareholders" by issuing 60 billion new shares to pay back the U.S. government, bondholders and the United Auto Workers Union. From the blogger:

For me, this will likely mean losing several thousand dollars. I currently own about 0.0004 % of GM; after, I will own 0.000004%.

Karl Marx said the revolution will be recognizable when the people-- or more specifically, the proletariat-- come to own the means of production. I can't think of any more obvious example than the UAW owning a third of GM. And taking my share in the company away seems not much different from the proletariat breaking down the door to my bourgeoisie house and hauling off my jewels for communal ownership. I guess it's slightly better than taking the current shareholders via ox-cart to the guillotine; but if I had all my money invested in GM, it would be about the financial equivalent of execution.

I've got an e-mail in to the author.

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Source: NPR Blogs: Planet Money | 6 May 2009 | 7:19 pm

Richard Bernstein Says Stocks May Continue Two-Month Rally

Source: Bloomberg - All Podcasts | 6 May 2009 | 6:55 pm

Amazon Kindle DX Not Yet Practical for Business Use

Photo: Engadget

PC World reviews the Amazon Kindle DX, a new largescreen version of the Kindle geared at newspapers, textbooks, and business users:

(The Kindle DX) has a larger screen than the Kindle 2, and is aimed squarely at maximizing the newspaper and textbook market. However, that’s not the only angle that Amazon head Jeff Bezos took today. By focusing on professional documents, too, Bezos positions Kindle DX as a business productivity tool, too.

The larger Kindle DX, with its 9.7-inch E Ink display, has an integrated native PDF reader, something that has been missing from previous versions of the Kindle. And with that PDF reader, Amazon is suddenly able to target the professional market, too. Consider for a moment how prevalent PDF documents are in the business world: Financial documents, reports, marketing flyers, even PowerPoint presentations are published as PDFs. While one can view PDFs on a laptop, imagine reading documents in a more relaxed and flexible manner than a laptop can provide.

Of course, Kindle DX also opens wide educational opportunities for textbooks — and, indeed, any highly-formatted book (such as a cookbook or a book with illustrations). And newspaper and magazine publishers have an opportunity to deliver more targeted and custom content that specifically takes advantage of this platform (instead of solely porting their existing print products to digital).

The Kindle DX costs an impressive $489. The business claim is a stretch–PDF-reading capacity alone make an expensive personal ebook reader popular among business users. Amazon will have to try harder in order to make the Kindle a truly business-friendly device. If Amazon could integrate the Kindle’s eye-friendly design into a laptop or PDA, or create a cheaper version of the large screen device, it would stand a better chance in the business market.

However, I think they’re onto something with the bigger size and textbook niche. It’s not hard to visualize college classrooms filled with large screen Kindles.

Source: Business Pundit | 6 May 2009 | 5:16 pm

Eleanor Squillari to World: Madoff was No Ladies’ Man

You know you want a piece of this.

Vanity Fair has published an article co-written by Eleanor Squillari, Bernie Madoff’s secretary. In it, Squillari describes her time with Bernie Madoff. To promote the piece, Squillari appeared on ABC’s “Good Morning America” and NBC’s “Today Show.” CNBC has more:

The 59-year-old Squillari spent two months helping the FBI gather evidence against the former money manager. In the article, Squillari said her married former boss was flirtatious and made sexually suggestive remarks.

She said she once saw him perusing the escort ads in the back of a magazine and said he frequented massage parlors. Sometimes when he came out of his bathroom, which was diagonal to my desk, he would still be zipping up his pants. If he saw me shaking my head disapprovingly, he would say, ‘Oh, you know it excites you,”‘ she wrote.

But Squillari told ABC she had a nice relationship with Madoff, despite his ways toward women.

“So, what one person might perceive as inappropriate, I didn’t,” Squillari said. “So, if he made suggestive remarks, I knew it was only meant to be funny.”

Squillari said the Madoff who was arrested was not the same man she knew. She said she was shocked and then angry after his arrest. She thinks her former boss carefully orchestrated his arrest and that he’s protecting others who might have been involved in his multibillion dollar scheme by not cooperating with investigators.

The WSJ adds notes from the 9,000-word Vanity Fair article:

Madoff’s behavior changed drastically in the weeks before his arrest. He reportedly began taking his blood-pressure every 15 minutes, refused to look at his mail, and was constantly meeting with the heads of his feeder funds and Frank DiPascali, “the go-to guy for the investment-advisory business” (the vehicle for Madoff’s Ponzi scheme).

Without having read the article, I now see Madoff not only as a Ponzi master who knew he was guilty, but as a scheming, neurotic old man. Somehow, none of this feels surprising.

Source: Business Pundit | 6 May 2009 | 5:00 pm

Wal-Mart pays $2 million to avoid charges in death probe

MINEOLA, N.Y. -- Wal-Mart agreed today to pay nearly $2 million and improve safety at its 92 New York stores as part of a deal with prosecutors that avoids criminal charges in the trampling death of a temporary worker.

Source: L.A. Times - Business | 6 May 2009 | 4:44 pm

FTSE 100 shares up on US jobs data (AFP)

AFP - The London stock market rose again on Wednesday, led by banks and urged on by news that the US private sector shed fewer jobs in April than expected.

Source: Yahoo! News: Stock Markets News | 6 May 2009 | 4:40 pm

Your next Facebook friend? A robot!

Researchers at the University of United Arab Emirates are using Facebook to make it easier for robots to converse with humans. The Marketplace Players wonder how it might go.
Source: Marketplace | 6 May 2009 | 4:40 pm

Fewer Budweiser ads for sports events

InBev paid $52 billion for Anheuser-Busch. But that kind of debt is weighing the company down, so funding for TV commercials during sports events is being slashed. Adam Allington reports.
Source: Marketplace | 6 May 2009 | 4:39 pm

InBev's delayed pay brews controversy

Beer conglomerate InBev says it may take up to 4 months to pay its bills. Janet Babin reports.
Source: Marketplace | 6 May 2009 | 4:39 pm

Go after tax havens to help health care

What do eliminating foreign tax havens and establishing universal health care have in common? A whole lot, says commentator Robert Reich.
Source: Marketplace | 6 May 2009 | 4:39 pm

How Chrysler's affecting dealerships

Henry Hagedoorn, general manager of Borough Chrysler Jeep in Wayne, N.J., talks with Kai Ryssdal about what's going on with Chrysler at the dealer level as the automaker seeks to eliminate hundreds of its dealerships.
Source: Marketplace | 6 May 2009 | 4:39 pm

Investors brace for stress test results

The government will soon release results from the big banks' stress tests. What are investors and analysts saying about the possible outcomes? Amy Scott reports.
Source: Marketplace | 6 May 2009 | 4:39 pm

Banks have hurdles to get rid of TARP

Some bankers are eager to get rid of their federal bailout funds, and free themselves from government regulation. But to do that, banks will have to clear a few hurdles first. Steve Henn reports.
Source: Marketplace | 6 May 2009 | 4:39 pm

How B of A can raise the capital it needs

Reports say that Bank of America may need to raise $34 billion in capital to stay solvent. Karen Shaw Petrou at Federal Financial Analytics, talks with Kai Ryssdal about why this might be good news and how the bank can come up with the cash.
Source: Marketplace | 6 May 2009 | 4:39 pm

'Recessionships'

Jacqueline from Cleveland, Ohio, posted this economic indicator on our Facebook page:

5. The number of couples I know that have met and started dating since the economic disaster that began last September. Including myself, all 5 couples met either right before or right after being laid off or just "out of work". Normally, something as devastating as a loosing one's job would cause a brand new, fragile relationship to end. In these cases, however, the tough economic times have seemed to "pull" the couples together. Fewer hours stressed out at work, no commuting, less money for happy hour with single friends and a general desire for companionship during this rough patch -- has actually helped the relationships grow!

One comment from a girlfriend, "Before getting laid off, I knew I wanted to start dating again, but made no time at all for it. Now, I actually feel like I have the time to devote to getting to know someone." And from a guy friend, "Normally I would have been traveling 3 weekends each month to NY for my job, and it was impossible to keep a girlfriend happy, but now that I am in town all the time. We go out on weekends and see each other all the time. It's so easy. I should have quit years ago! Ha!"

I call it: Recessionships.

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Source: NPR Blogs: Planet Money | 6 May 2009 | 4:30 pm

Bove Says Forcing Banks to Add Capital May Delay Recovery

Source: Bloomberg - All Podcasts | 6 May 2009 | 4:10 pm

Levitt Says Risk Will Be Squeezed Out of U.S. Banking Industry

Source: Bloomberg - All Podcasts | 6 May 2009 | 3:47 pm

Major banks funded U.S. subprime lenders: study (Reuters)

Reuters - More than twenty of the largest subprime mortgage lenders relied on financing from U.S. banks that are now relying on billions of dollars in rescue funds, a report release on Wednesday concludes.
Source: Yahoo! News: Business | 6 May 2009 | 3:46 pm

Gillis Discusses Cisco's Earnings, Amazon's Kindle

Source: Bloomberg - All Podcasts | 6 May 2009 | 3:31 pm

Warren Says Bank Stress Test Must Be `Tough and Transparent'

Source: Bloomberg - All Podcasts | 6 May 2009 | 3:13 pm

Banks Talk Back

As it prepares to release the results of its stress tests tomorrow, the government has told Bank of America it needs $33.9 billion more in capital -- money it could either raise privately or derive from converting the preferred shares Uncle Sam holds now into common voting stock. Citigroup's reportedly on the hook for about $10 billion -- the smaller number comes in part because Citigroup already plans to swap the stock around. Reuters says the deals not done yet:

Citigroup may need less if regulators accept its arguments about its financial health.

Earlier this week, Brad DeLong won the prize for clarity on that point:

The banks should not be negotiating with the government over this.

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Source: NPR Blogs: Planet Money | 6 May 2009 | 3:04 pm

Mandel Sees Oil Rising to $70 a Barrel by End of Year

Source: Bloomberg - All Podcasts | 6 May 2009 | 3:02 pm

RBC's McGuire Sees 638,000 U.S. Jobs Lost in April

Source: Bloomberg - All Podcasts | 6 May 2009 | 2:44 pm

Enough With Banks As Victims

The Center for Public Integrity rolls out a giant clickfest today, with Who's Behind the Financial Meltdown. The project tracks nearly 7.2 million subprime mortgages in search of the 25 lenders most responsible for the housing crisis. Bill Buzenberg, former NPR hand and current executive director of the CPI, suggests looking at the problem this way:

The truth is these mega-banks invested trillions, made billions, and took risks with their eyes wide open. Now, because they are deemed "too big to fail," they need trillions in government bailouts and guarantees to solve problems they helped create. But let's look at it another way: perhaps these mega-banks are simply "too politically connected to fail." Their unbridled political contributions and massive lobbying created the lack of regulation and oversight that led to this crisis. Where is the accountability -- of management and boards, of auditors and regulators -- for what has happened? It is time to set aside the myth of the mega-bank as victim.

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Source: NPR Blogs: Planet Money | 6 May 2009 | 2:36 pm

When in Doubt, Make Your Own Currency

That’s what Fayetteville, Arkansas is doing. “Ozark Hours” is the new currency that small business owners will issue and accept just like regular U.S. dollars and cents. Proponents hope this home grown currency will protect local businesses from the highs and lows of the national dollar. 

“All of our money is backed by nothing. That’s what we have our faith in,” said Shelley Buonaiuto, a Fayetteville artist. “Money’s not real wealth. The real wealth is our resources and our community interdependence.”

And before you go making jokes about Arkansas, they’re not unique. Groups around the country are printing currency in an attempt to help small businesses withstand the recession. The currency’s value is generally base on labor. In some towns $10 in local money is worth an hour of labor. Other places trade ‘real’ cash for the local currency, often at a discount.

In the Berkshires region of Massachusetts, for example, people trade $9 of U.S. currency for $10 worth of the local currency “Berkshares” at local credit unions, essentially providing a 10-percent discount when the money is spent.

The currency also helps barterers without direct trades to exchange the widely recognized currency for future trades. I suspect the IRS might not like this. Remember, bartering income is taxable.

The concept works well in Ithaca, New York, where they’ve been using “Ithaca Hours” since 1991.

“We have significantly affected shopping habits so people are more able to rely on one another in the community than automatically going to the mall,” said Ithica’s mayor.

The success of local currency is sketchy and anecdotal at best. As someone who grew up near the Canadian border and lived in a ‘multi-currency’ economy, I get that there are incentives when the values differ, but I’m not sure anyone needs another layer of complexity in the financial realm these days.

What’s your take on local currency?

Image Credit: Christina Snyder, Flickr

Source: Business Pundit | 6 May 2009 | 12:29 pm