GM's Canadian workers agree to cut in wages

Canadian employees of General Motors, the American carmaking group, voted overwhelmingly to accept wage cuts in an attempt to enable the company to qualify for a bailout and stave off bankruptcy.


Source: Latest Business News from Times Online | 26 May 2009 | 1:08 pm

Aveva warns of downturn in major projects

Aveva, the consultancy specialising in supplying software for such mega-projects as oil rigs and nuclear power stations, warned shareholders today that big projects were being shelved in the face of the economic slowdown.


Source: Latest Business News from Times Online | 26 May 2009 | 1:05 pm

Making Steel Just Got Cheaper (RTP, CLF, MT)

UK-based miner Rio Tinto plc (NYSE:RTP) has announced a pricing agreement with Japan’s Nippon Steel for iron ore for the contract year beginning April 1, 2009. The new prices are about 33% below last year’s contract. A Rio executive said, “We believe this settlement is a realistic outcome for both parties – one that reflects [...]

[[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Source: 24/7 Wall Street | 26 May 2009 | 12:55 pm

Obama to name Sotomayor to Supreme Court: reports

President Barack Obama on Tuesday will name Sonia Sotomayor, a U.S. appeals court judge, to replace retiring Justice David Souter on the U.S. Supreme Court, according to media reports.

Source: MarketWatch.com - Top Stories | 26 May 2009 | 12:52 pm

If 8% Is New Unemployment Benchmark, Simulus Plans Have Failed

Mohamed El-Erian, chief executive officer of Pimco, says that 8% unemployment is “the new normal”. He bases that, to a large extent, on the fact the GDP growth will only be 2% over the next several years. According to Bloomberg, El-Erian expects that “markets will revert to a mean, but it will not look anything like that [...]

[[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Source: 24/7 Wall Street | 26 May 2009 | 12:49 pm

Opening Bell: 05.26.09

US Cracks Down On Corporate Bribes (WSJ)
"At least 120 companies are under investigation, according to Mark Mendelsohn, a deputy chief in the Justice Department division overseeing the prosecutions, up from 100 at the end of last year."

Ackman Pledges To Hold Target Shares For Five Years (Dealbook)
That's how much he loves this company.

Accounting Rules Help JP Turn WaMu Deal Into Money Maker (Bloomberg)
"Faced with the highest U.S. unemployment in 25 years and a surging foreclosure rate, the lenders are seizing on a four- year-old rule aimed at standardizing how they book acquired loans that have deteriorated in credit quality. By applying the measure to mortgages and commercial loans that lost value during the worst financial crisis since the Great Depression, the banks will wring revenue from the wreckage, said Robert Willens, a former Lehman Brothers Holdings Inc. executive who runs a tax and accounting consulting firm in New York.

"It will benefit these guys dramatically," Willens said. "There's a great chance they'll be able to record very substantial gains going forward."

How Satyam Supported PwC's Schizophrenic Strategy To Reenter The Systems Integration Business (TRA)
"The firms may call these situations all anomalies, and "all in the past", but they add up to real pathology - a case of incorrigible ingratitude for a government-sponsored, highly lucrative franchise to provide audit opinions for public companies."

A Hedge Fund King Is Forced To Regroup (WSJ)
"Later that year, Mr. Asness frequently erupted in his office, smashing computer screens in anger, according to people familiar with the matter. Mr. Asness confirmed the account."

Related: Great Depression - Foreign Corrupt Practices Act - Business - Lehman Brothers - Washington Mutual
Source: Dealbreaker | 26 May 2009 | 12:46 pm

Presented By:

Source: Dealbreaker | 26 May 2009 | 12:46 pm

Indications: U.S. stock futures point to weaker start

U.S. stock futures indicate a weaker start for Wall Street on Tuesday as investors return from a long holiday weekend. North Korea's nuclear test in focus.

Source: MarketWatch.com - Top Stories | 26 May 2009 | 12:44 pm

Stock futures decline after NKorea nuclear tests (AP)

AP - Wall Street headed for a modest decline Tuesday as North Korea's nuclear testing rattled investors.

Source: Yahoo! News: Stock Markets News | 26 May 2009 | 12:43 pm

Before the Bell: Apple, General Motors, housing data in focus

U.S. stock futures were indicating a weaker start for Wall Street on Tuesday as investors return from a long holiday weekend to face nuclear developments in North Korea, housing and confidence data and more news on the fate of General Motors.

Source: MarketWatch.com - Top Stories | 26 May 2009 | 12:38 pm

HP recalls 15,000 laptop batteries sold in China

BEIJING (Reuters) - Hewlett-Packard Co, the world's largest PC maker, is recalling 15,000 laptop batteries distributed in China because of a danger they could overheat, China said on Tuesday on its quality inspections web site.
Source: Reuters: Business News | 26 May 2009 | 12:36 pm

Book Review: Bremmer & Keat’s The Fat Tail

By John Tamny of RealClearMarkets In their entertaining new book, The Fat Tail, Eurasia Group investment strategists Ian Bremmer and Preston Keat observe that while banks likely spent $8 billion on credit-risk software in 2008, most spent “far less energy on the assessment and management of political risk.” It’s easy to make the argument that banks [...]

[[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Source: 24/7 Wall Street | 26 May 2009 | 12:33 pm

Stock futures flat to lower on North Korea worry (Reuters)

Reuters - Stock index futures pointed to a flat to lower open on Tuesday after a long weekend as tensions surrounding North Korea unsettled investors and hopes for a quick economic recovery in the near-term ebbed.

Source: Yahoo! News: Business | 26 May 2009 | 12:33 pm

Stock futures flat to lower on North Korea worry (Reuters)

Reuters - Stock index futures pointed to a flat to lower open on Tuesday after a long weekend as tensions surrounding North Korea unsettled investors and hopes for a quick economic recovery in the near-term ebbed.

Source: Yahoo! News: Stock Markets News | 26 May 2009 | 12:33 pm

Stock futures flat to lower on North Korea worry

NEW YORK (Reuters) - Stock index futures pointed to a flat to lower open on Tuesday after a long weekend as tensions surrounding North Korea unsettled investors and hopes for a quick economic recovery in the near-term ebbed.
Source: Reuters: Business News | 26 May 2009 | 12:33 pm

World stocks drop in wake of NKorea missile tests

World stocks fell Tuesday as investors worried that the recent rally may be overdone and were unsettled by the geopolitical tensions in Asia, where North Korea test-fired two missiles just...
Source: RSS feed - channel BNewsBusiness | 26 May 2009 | 12:32 pm

World stocks drop in wake of NKorea missile tests (AP)

AP - World stocks fell Tuesday as investors worried that the recent rally may be overdone and were unsettled by the geopolitical tensions in Asia, where North Korea test-fired two missiles just a day after its nuclear test.

Source: Yahoo! News: Stock Markets News | 26 May 2009 | 12:32 pm

Krugman's Kindle keeps crashing

Source: Business and financial news - CNNMoney.com | 26 May 2009 | 12:29 pm

Shell executive Linda Cook resigns weeks before new chief takes over

The 'first lady' of oil and gas has resigned suddenly from Shell weeks before the succession of new chief executive Peter Voser.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 26 May 2009 | 12:29 pm

Stocks set for shaky start

U.S. stocks were poised to tumble at Tuesday's open, as oil prices fell and investors awaited a reading on consumer confidence.
Source: Business and financial news - CNNMoney.com | 26 May 2009 | 12:25 pm

Zombie banks walk among us

Maybe the so-called "zombie" banks didn't die after all.
Source: Business and financial news - CNNMoney.com | 26 May 2009 | 12:25 pm

UK house prices set to fall a further 14pc by end of 2009

UK house prices could fall by another 14pc before the end of the year according to new data as the impact of rising unemployment hits sales and household finances.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 26 May 2009 | 12:21 pm

Traces of Cocaine Found in Red Bull Cola

Red Bull Cola has been banned in six German states for containing traces of cocaine. From the Daily Mail:

The consumer ministries in the two states confirmed they had ordered retailers to pull the drink off their shelves after a food safety institute in North-Rhine Westphalia found the drug in samples. The investigation found the drink to contain a de-cocainized extract of coca leaf in the drink.

Giant German retail group Rewe had already issued orders to remove the fizzy drink from its shops. Wilhelm Deitermann, spokesman for the North-Rhine Westphalia consumer ministry said he expected most – if not all - other German states to follow suit and ban the drink.

Red Bull Cola has protested the action. ‘De-cocainized extract of coca leaf is used worldwide in foods as a natural flavouring,’ said a spokesman.

The company added that Red Bull Cola as well as other food that contains coca leaf extract is considered safe in the EU as well as in the US.

Officials from one state found traces of cocaine in a leaf stem that was supposed to have all the cocaine removed from it. According to DW-World, “the coke is not harmful, but it violates food law,” (said Thomas Schulz, a spokesman for the Thuringian Ministry of Health).

Coca-Cola supposedly contains coca extract as well–why haven’t officials ever found traces of cocaine in it, too (post-1903, of course)?

Source: Business Pundit | 26 May 2009 | 12:20 pm

Crunch time looms for GM, Chrysler restructuring

DETROIT/WASHINGTON (Reuters) - United Auto Workers' officials will gather on Tuesday to hear how many more U.S. factory jobs GM will cut as the embattled automaker enters what could be its last week outside bankruptcy.
Source: Reuters: Business News | 26 May 2009 | 12:14 pm

Crunch time looms for GM, Chrysler restructuring (Reuters)

Reuters - United Auto Workers' officials will gather on Tuesday to hear how many more U.S. factory jobs GM will cut as the embattled automaker enters what could be its last week outside bankruptcy.
Source: Yahoo! News: Business | 26 May 2009 | 12:14 pm

It's down to the wire for GM

It's coming down to the wire for General Motors.
Source: Business and financial news - CNNMoney.com | 26 May 2009 | 12:09 pm

Bidders make final push for GM unit Opel

BERLIN (Reuters) - Germany denied it was considering a possible breakup of carmaker Opel ahead of a crucial final round of meetings on Tuesday between the government and top executives from Italian suitor Fiat .
Source: Reuters: Business News | 26 May 2009 | 12:03 pm

Oil falls below $61 ahead of OPEC meeting

LONDON (Reuters) - Oil fell below $61 a barrel on Tuesday but climbed from session lows after Saudi Arabia said oil demand was picking up.
Source: Reuters: Business News | 26 May 2009 | 12:02 pm

Top 10 Analyst Upgrades & Downgrades (AAPL, ARBA, AVID, BAC, FSLR, JCG, ERIC, MWW, Q, YGE)

These are the top ten analyst research calls from Wall Street’s upgrades and downgrades we have seen early this Tuesday morning: Apple (AAPL) Raised to Overweight at Morgan Stanley. Ariba (ARBA) Cut to Perform at Oppenheimer. Avid Tech (AVID) Raised to Overweight at JPMorgan. Bank of America (BAC) Raised to Market Perform at FBR. First Solar (FSLR) Cut to Underperform [...]

[[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Source: 24/7 Wall Street | 26 May 2009 | 11:58 am

Movers & Shakers: Tuesday's biggest gaining and declining stocks

Among the companies whose shares are expected to see active trade in Tuesday’s session are Apple, Cellcom, GM, Qwest, Rio Tinto and Target.

Source: MarketWatch.com - Top Stories | 26 May 2009 | 11:58 am

London Markets: Mineral extractors slide in lower London

London shares decline, with mineral extractors under pressure, as investors return from the holiday weekend in a downbeat mood.

Source: MarketWatch.com - Top Stories | 26 May 2009 | 11:56 am

Pfizer plans 4-part euro, stg benchmark bond -lead

LONDON, May 26 (Reuters) - U.S. pharmaceutical giant Pfizer Inc. plans to sell a benchmark-sized four-part bond, denominated in euros and sterling, one of the banks managing the sale said on Tuesday.
Source: RSS feed - channel BNewsBusiness | 26 May 2009 | 11:49 am

North Korea and economy worries hit global stocks

LONDON (Reuters) - World stocks fell on Tuesday with Asian shares leading the way as tension about North Korean nuclear tests added to questions over the global economic outlook.
Source: Reuters: Business News | 26 May 2009 | 11:45 am

North Korea and economy worries hit global stocks (Reuters)

Reuters - World stocks fell on Tuesday with Asian shares leading the way as tension about North Korean nuclear tests added to questions over the global economic outlook.

Source: Yahoo! News: Stock Markets News | 26 May 2009 | 11:45 am

North Korea and economy worries hit global stocks (Reuters)

Reuters - World stocks fell on Tuesday with Asian shares leading the way as tension about North Korean nuclear tests added to questions over the global economic outlook.

Source: Yahoo! News: Business | 26 May 2009 | 11:45 am

PRESS DIGEST - Canada - May 26

May 26 (Reuters) - The following are top stories from selected Canadian newspapers. Reuters has not verified these stories and does not vouch for their accuracy.
Source: RSS feed - channel BNewsBusiness | 26 May 2009 | 11:37 am

Fair price for oil is 7580 a barrel says King Abdullah of Saudi Arabia

King Abdullah of Saudi Arabia said in remarks published on Tuesday that a fair price for oil was 7580 a barrel.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 26 May 2009 | 11:35 am

GE's Immelt says to get harder to achieve growth (Reuters)

Reuters - General Electric Co's growth will be "harder to come by" in coming years given the prospect the global economy may grow at a slower pace once it emerges from recession, the company's chief executive said.

Source: Yahoo! News: Business | 26 May 2009 | 11:34 am

GE's Immelt says to get harder to achieve growth

TOKYO (Reuters) - General Electric Co's growth will be "harder to come by" in coming years given the prospect the global economy may grow at a slower pace once it emerges from recession, the company's chief executive said.
Source: Reuters: Business News | 26 May 2009 | 11:34 am

UPDATE 1-Bharti says MTN deal funding will not be onerous

* Indian finance minister welcomes proposed deal (Adds details, analyst comment)
Source: RSS feed - channel BNewsBusiness | 26 May 2009 | 11:33 am

UPDATE 1-Map Pharma migraine drug hits all goals in study

NEW YORK, May 26 (Reuters) - MAP Pharmaceuticals Inc said on Tuesday its experimental orally inhaled migraine drug reached all four goals of a late-stage clinical study.
Source: RSS feed - channel BNewsBusiness | 26 May 2009 | 11:30 am

Before Animal Rights Were Trendy…

Source: Business Pundit | 26 May 2009 | 11:30 am

Shell's top gas executive resigns

Shell's top gas executive and highest-ranking woman, Linda Cook, is stepping down June 1, the company said Tuesday, without giving a reason. Cook, 50, had sometimes been mentioned as a...
Source: RSS feed - channel BNewsBusiness | 26 May 2009 | 11:28 am

Rio agrees to 33% cut in iron ore price

Rio Tinto has agreed with Japanese steelmakers a 33% cut in the annual contract price for iron ore a deal that could save the benchmark system of annual price negotiations but opens the door to a battle with China
Source: Financial Times - US homepage | 26 May 2009 | 11:27 am

Rio Tinto cuts Nippon Steel iron ore prices

Rio Tinto Ltd., the world's third-largest miner, said Tuesday it has agreed with Japan's Nippon Steel Corp. to cut its iron ore prices by more than a third for this year, foreshadowing a...
Source: RSS feed - channel BNewsBusiness | 26 May 2009 | 11:27 am

Hitachi to separate consumer and automotive units

Hitachi Ltd. will push ahead with its planned structural reforms, transferring its consumer-electronics and automotive units into two new entities with separate reporting lines, effective July 1.

Source: MarketWatch.com - Top Stories | 26 May 2009 | 11:18 am

South Africa goes into recession

South Africa goes into recession for the first time since 1992 after a slowdown in the manufacturing and mining sectors.
Source: BBC News | Business | World Edition | 26 May 2009 | 11:16 am

UPDATE 1-United Therapeutics gets FDA nod for oral PAH drug

May 26 (Reuters) - United Therapeutics Corp said the U.S. Food and Drug Administration approved its orally administered drug tadalafil for the treatment of pulmonary arterial hypertension (PAH).
Source: RSS feed - channel BNewsBusiness | 26 May 2009 | 11:13 am

Fiat CEO discusses Opel bid with Merkel

Fiat CEO Sergio Marchionne met German Chancellor Angela Merkel Tuesday to discuss his bid for ailing General Motors Corp.'s Opel unit as a decision on the company's future nears. ...
Source: RSS feed - channel BNewsBusiness | 26 May 2009 | 11:12 am

UPDATE 1-Atos wants to expand in Asia, keeps '09 goals

PARIS, May 26 (Reuters) - French IT services group Atos Origin , which recently made a small acquisition in China, eyes further expansion in Asia, should opportunities arise, its chairman and chief executive...
Source: RSS feed - channel BNewsBusiness | 26 May 2009 | 11:11 am

Europe Markets: Banks, oil producers, Danone decline in Europe

Banks and oil producers pressure European shares, while Danone leads a slide for food producers after outlining plans to raise capital.

Source: MarketWatch.com - Top Stories | 26 May 2009 | 11:09 am

FSA punishes third Morgan Stanley trader

Sources in Morgan Stanley today insisted that there was no systemic problem on its trading floor in London as the third trader in two weeks was banned from working in the City for dishonest behaviour.


Source: Latest Business News from Times Online | 26 May 2009 | 11:07 am

Asia shares end lower; N. Korea tension mounts

Asian markets finish mostly lower Tuesday, with South Korean shares logging their fourth session of losses on sustained worries about Pyongyang’s nuclear test.

Source: MarketWatch.com - Top Stories | 26 May 2009 | 11:06 am

Currencies: Banking worries pressure euro

Renewed worries about the European banking industry put modest pressure on the euro Tuesday, while North Korea’s nuclear test helps fuel a rebound by the U.S. dollar.

Source: MarketWatch.com - Top Stories | 26 May 2009 | 11:06 am

FSA bans third exMorgan Stanley trader

A former Morgan Stanley trader has been fined £140000 and banned from trading by the City regulator.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 26 May 2009 | 10:53 am

Shell gas chief exits after losing race for top job

Linda Cook, head of gas and power of Shell, the oil giant, will leave the company after missing out in the race to become chief executive and will forfeit a "loyalty" bonus of £800,000.


Source: Latest Business News from Times Online | 26 May 2009 | 10:48 am

Amazon's next revolution

On a bright May morning Jeffrey Bezos descended from atop Mount Seattle unto the press corps. He appeared casually on stage in a standing-room-only theater in New York City. Like another messenger of long ago, he carried a tablet. And he said unto the people: "Ladies and gentlemen, I'm excited to introduce Kindle DX." Keyboards tapped. Shutters clicked. And as the Amazon founder and CEO turned a 9.7-inch display toward the masses, they saw an inscription: The New York Times.
Source: Business and financial news - CNNMoney.com | 26 May 2009 | 10:44 am

Nokia opens Ovi online software and content store

HELSINKI (Reuters) - Nokia said it opened its online software and content store, Ovi Store, globally to some 50 million phone users on Tuesday.
Source: Reuters: Business News | 26 May 2009 | 10:39 am

Dollar pulls back from 5-month low

The dollar recovered some ground on Tuesday, pulling away from a five-month low as investors focused on problems outside the US.
Source: Financial Times - US homepage | 26 May 2009 | 10:20 am

Virgin Atlantic in pictures

Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 26 May 2009 | 10:17 am

Russian economic slide worsening

Russia's economy contracted sharply in April - shrinking by 10.5% from the same month a year ago, a minister says.
Source: BBC News | Business | World Edition | 26 May 2009 | 10:16 am

Microsoft (MSFT) To Spend Tens Of Millions To Promote New Search Engine Called “Bing”

Microsoft (MSFT) has come up with a name for its new search engine technology–”Bing”. The world’s largest software company is prepared to spend as much as $100 million promoting the product. There is still a major question about whether the technology or the advertising will turn Microsoft’s search share in the US from 8% to something [...]

[[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Source: 24/7 Wall Street | 26 May 2009 | 10:14 am

Union ratifies agreement with GM

The Canadian Auto Workers Union reaches an agreement with GM to cut labour costs as talks continue with unions in the US.
Source: BBC News | Business | World Edition | 26 May 2009 | 10:05 am

Virgin Atlantic doubles profits, but sees loss

LONDON (Reuters) - Privately-owned airline Virgin Atlantic said yearly profits nearly doubled, but warned the weak economic environment would make it "almost impossible" for airlines to make a profit in the current year.
Source: Reuters: Business News | 26 May 2009 | 9:59 am

The Failure Of The Mortgage Modification System Threatens Housing

The theory was simple and elegant. By offering homeowners who could not afford their monthly mortgage costs lower monthly payments, people could be able to stay in their homes. That would lower the US default and foreclosure rate, in turn building a foundation under the housing market. The programs are simple, but they appear to be a [...]

[[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Source: 24/7 Wall Street | 26 May 2009 | 9:56 am

Gazprom Neft makes offer for Sibir stake

Gazprom Neft, the oil division of the Russian group Gazprom, has edged closer to owning Sibir, the AIM-listed oil company embroiled in allegations about loans to one of its biggest shareholders.
Source: Latest Business News from Times Online | 26 May 2009 | 9:51 am

Danone slides after $4.18 billion rights issue

Shares of Danone fall as much as 7% after the world’s largest yogurt maker says it’s planning a $4.18 billion rights issue.

Source: MarketWatch.com - Top Stories | 26 May 2009 | 9:51 am

Rio Tinto agrees iron price cut

Mining giant Rio Tinto agrees a 33% price cut for iron ore in a benchmark deal with Japan's Nippon Steel Corp.
Source: BBC News | Business | World Edition | 26 May 2009 | 9:46 am

Young face 'tough job prospects'

Nearly half of all firms will not be looking to hire graduates or school-leavers in the months ahead, a survey suggests.
Source: BBC News | Business | World Edition | 26 May 2009 | 9:41 am

Nokia (NOK) Application Store Faces Apple (AAPL) Dominance

Nokia (NOK) is the world’s largest handset company. It has been late to the high-end smart-phone market, but it has distribution leverage all over the world because of its 37% global market share. One of the things Nokia will need to cement its place in the smart-phone market is an application store like the one [...]

[[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Source: 24/7 Wall Street | 26 May 2009 | 9:40 am

Virgin Atlantic boss warns no airlines will make money this year

Steve Ridgway chief executive paints a bleak picture for the airline industry this year after doubling profits for the year to the end of February to £68.4m.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 26 May 2009 | 9:37 am

European stocks drop on grim economic outlook (AFP)

AFP - Europe's main stock markets fell Tuesday as London traders returned to their desks and digested the bleak global economic outlook amid jitters over North Korea's nuclear test.

Source: Yahoo! News: Stock Markets News | 26 May 2009 | 9:33 am

Garprom Neft makes offer for Sibir

The oil arm of Russian gas giant Gazprom has agreed to further raise its stake in Sibir Energy in what could be the precursor to a full takeover of the midsized Siberian producer.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 26 May 2009 | 9:28 am

Do your homework, land a job

Even in the current job market, getting a pink slip doesn't always lead to long-term unemployment - especially if you're willing to do the extra legwork it takes to get hired these days. When David Hudson was laid off from his computer programming job, he sharpened his skills, did his due diligence and took full advantage of the resources available to him.
Source: Business and financial news - CNNMoney.com | 26 May 2009 | 9:25 am

Profits jump at Virgin Atlantic

Virgin Atlantic says its annual profits nearly doubled in the year to the end of February, bucking the trend seen by other airlines.
Source: BBC News | Business | World Edition | 26 May 2009 | 9:25 am

American Companies Selling More $1 Products (AAPL)(KRT)(WMT)(MCD)(SBUX)

American companies are increasingly offering products for $1 or less. Some are among the largest firms in the United States such as Wal-Mart (WMT) and McDonald’s (MCD). Other are smaller but use big distribution networks like the Apple (AAPL) iPhone App store to reach millions of consumers. The most obvious reason for pricing products at $1 [...]

[[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Source: 24/7 Wall Street | 26 May 2009 | 9:12 am

Tech Innovation Moves From West To East (HPQ)(AAPL)(DELL)(INTC)(IBM)(MSFT)(CHL)(GOOG)

The West, particularly the US, has been able to hang onto its lead in technology innovation for the better part of thirty years while the manufacturing economy was driven by cost savings to Asia and Latin America. Intel (INTC), IBM (IBM), Google (GOOG), Microsoft (MSFT), Cisco (CSCO), and Oracle (ORCL) became the pillars of the [...]

[[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Source: 24/7 Wall Street | 26 May 2009 | 9:05 am

Giving a voice

How radio is helping poor women in India
Source: BBC News | Business | World Edition | 26 May 2009 | 8:59 am

European shares sag as oil drops

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 26 May 2009 | 8:59 am

Nuclear test fears hit energy stocks

The FTSE 100 index was trading 40 points lower today after concerns about nuclear tests in North Korea as well as a cut-price iron ore deal struck by Rio Tinto sent energy and commodity stocks tumbling.


Source: Latest Business News from Times Online | 26 May 2009 | 8:56 am

When it pays to rent versus buy

In 2004, Tim Jones bought a little piece of the American dream: a modest three-bedroom home in Bend, Ore., that went for $218,000. Three years later he married and was ready for phase two of the dream: trading up. But instead of buying, he and wife Elise pocketed the $100,000 profit from the sale of their house and rented bigger digs.
Source: Business and financial news - CNNMoney.com | 26 May 2009 | 8:55 am

London stocks fall at open (AFP)

AFP - The London stock markets dropped at the open on Tuesday, as investors returned to their desks after a holiday the previous day.

Source: Yahoo! News: Stock Markets News | 26 May 2009 | 8:50 am

Summer 2009: The Long Wait For Evidence Of A Recovery

Almost every analyst or forecasting group of any substance has offered opinions over the last few weeks, regarding the performance of the economy for the last half of this year.  Paul Krugman, Alan Greenspan, Paul Volker, and several other members of the Fed, posted their forecasts. The CBO and FOMC issued long reports weighed down [...]

[[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Source: 24/7 Wall Street | 26 May 2009 | 8:46 am

North Korea nuclear test should be sending tremors through investors

North Korea's latest nuclear test hasn't done much to unnerve investors in neighbouring South Korea.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 26 May 2009 | 8:43 am

Palm's 'iPhone killer'

Not much rattles Apple. Disciplined and focused, the company lavishes attention on its own elegant products and rarely deigns to discuss rivals. Yet here was Tim Cook, Apple's chief operating officer and designated stand-in for ailing CEO Steve Jobs, erupting during an earnings call in late January at the mere mention of a pip-squeak competitor.
Source: Business and financial news - CNNMoney.com | 26 May 2009 | 8:40 am

Shell gas and renewables chief Linda Cook resigns

Linda Cook the head of Shell's gas and power operations has resigned unexpectedly and will leave the company in six days.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 26 May 2009 | 8:37 am

Virgin Atlantic profits soar on premium flyers

Virgin Atlantic, the airline majority owned by Sir Richard Branson’s Virgin Group, announced this morning that its annual profits almost doubled in the year to February, as its rival, British Airways, slumped to its biggest loss in more than two decades.


Source: Latest Business News from Times Online | 26 May 2009 | 8:23 am

Rio Tinto agrees to 37% cut in metal prices

Rio Tinto, the mining group, set the scene for a slump in iron ore contract prices this year when it announced that it had finally agreed to price cuts averaging 37 per cent with Nippon Steel, a major customer.


Source: Latest Business News from Times Online | 26 May 2009 | 7:55 am

German export plunge underline economy's woes

The dire state of the German economy was underlined on Tuesday after figures showed that exports fell almost 10pc in the first quarter of the year.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 26 May 2009 | 7:49 am

Shell in court over death of Nigerian activist

Shell, one of the world’s biggest oil companies, will go on trial tomorrow over allegations that it was complicit in the execution of a well-known Nigerian environmental activist and author.
Source: Latest Business News from Times Online | 26 May 2009 | 7:44 am

Australian stocks: Market closes in positive territory

PERTH - The Australian share market closed in positive territory buoyed by Rio Tinto after the global miner reached a better than expected iron ore price deal with Japan. The benchmark S&P/ASX200 index was up 50.5 points, or 1.35...
Source: New Zealand Herald - Business | 26 May 2009 | 7:20 am

Weekend box-office results

Source: RSS feed - channel BNPaperBusiness | 26 May 2009 | 7:00 am

The Hundreds wants to sell but not sell out

The street-wear brand has stores in L.A. and San Francisco, a strong online presence and a solid buzz. But its clothes are aimed at skater and hip-hop subcultures, which loathe overexposure. ...
Source: RSS feed - channel BNPaperBusiness | 26 May 2009 | 7:00 am

On the way to 'Terminator Salvation,' legal sparks fly

Derek Anderson and Victor Kubicek, the neophyte owners of the movie brand, fend off disputes as they catapult into the Hollywood mainstream. ...
Source: RSS feed - channel BNPaperBusiness | 26 May 2009 | 7:00 am

Credit cards may go charging into the past

New regulations signed into law by Obama could bring back the tight access and low limits of the '50s.

Norman Hockett didn't realize that the small plastic rectangle that arrived in his Fresno mailbox in the fall of 1958 put him at the vanguard of the credit revolution.

Source: L.A. Times - Business | 26 May 2009 | 7:00 am

Can small-business owners collect unemployment?

Dear Karen: Can a small-business owner collect unemployment? My company has revenue, but not enough to pay me a salary.
Source: RSS feed - channel BNPaperBusiness | 26 May 2009 | 7:00 am

Weekend box-office results

Source: L.A. Times - Business | 26 May 2009 | 7:00 am

Credit card reform leaves out small entrepreneurs

The new law reining in the penalties that banks can levy on their riskiest borrowers doesn't apply to small businesses.

Though U.S. consumers can look forward to some relief under the credit card reform bill signed into law last week by President Obama, small-business owners may not be so lucky.

Source: L.A. Times - Business | 26 May 2009 | 7:00 am

U.S. business-government relations undergo a climate change

Corporate America is helping craft new rules as Obama pushes for tougher standards on vehicle fuel efficiency and other issues.

Under bright spring sunshine, the mood at the White House was celebratory last week as President Obama announced an agreement on new rules to force drastic improvements in the fuel efficiency and tailpipe emissions of the nation's cars and trucks.

Source: L.A. Times - Business | 26 May 2009 | 7:00 am

Weakness of 'Terminator' opening is a blow to weekend box-office results

Ticket sales for the long Memorial Day weekend rise just 1.7% from a year earlier despite a strong start for the 'Night at the Museum' sequel. ...
Source: RSS feed - channel BNPaperBusiness | 26 May 2009 | 7:00 am

Yelp discusses decision to allow business-owner comments

Co-founder Jeremy Stoppelman had resisted letting businesses rebut bad reviews. He explains his change of heart. ...
Source: RSS feed - channel BNPaperBusiness | 26 May 2009 | 7:00 am

The Hundreds wants to sell but not sell out

The street-wear brand has stores in L.A. and San Francisco, a strong online presence and a solid buzz. But its clothes are aimed at skater and hip-hop subcultures, which loathe overexposure.

When the founders of the L.A. clothing brand the Hundreds first met, they were unhappy law school students looking for a way out.

Source: L.A. Times - Business | 26 May 2009 | 7:00 am

Yelp discusses decision to allow business-owner comments

Co-founder Jeremy Stoppelman had resisted letting businesses rebut bad reviews. He explains his change of heart.

Jeremy Stoppelman, a Harvard Business School dropout, co-founded Yelp in 2004 with fellow PayPal alum Russel Simmons. The website's model is simple: Consumers, by reviewing restaurants, salons, spas, etc., provide the content. Businesses, by purchasing sponsorships, provide the revenue. Social networking features allow users to create communities in person as well as online.

Source: L.A. Times - Business | 26 May 2009 | 7:00 am

Angelo Mozilo of Countrywide has several defensive options

The former CEO of the onetime mortgage leader faces lawsuits including from states and stockholders. The complexity and number of cases may work to his advantage.

In the court of public opinion, Countrywide Financial Corp. co-founder Angelo Mozilo is the chief villain in the mortgage crisis that has crippled the economy.

Source: L.A. Times - Business | 26 May 2009 | 7:00 am

Can small-business owners collect unemployment?

Dear Karen: Can a small-business owner collect unemployment? My company has revenue, but not enough to pay me a salary.

Source: L.A. Times - Business | 26 May 2009 | 7:00 am

Angelo Mozilo of Countrywide has several defensive options

The former CEO of the onetime mortgage leader faces lawsuits including from states and stockholders. The complexity and number of cases may work to his advantage. ...
Source: RSS feed - channel BNPaperBusiness | 26 May 2009 | 7:00 am

Credit cards may go charging into the past

New regulations signed into law by Obama could bring back the tight access and low limits of the '50s. Norman...
Source: RSS feed - channel BNPaperBusiness | 26 May 2009 | 7:00 am

GOP rides on the 'Daisy ad' storm. Really?

The Republican Party bungles an attempt to leverage the nuclear fears of a previous era.

Last week the Republican National Committee released a Web-only spot opposing the closing of the Guantanamo detention center that sampled the infamous "Daisy ad" from Lyndon Johnson's 1964 campaign against Barry Goldwater.

Source: L.A. Times - Business | 26 May 2009 | 7:00 am

Credit card reform leaves out small entrepreneurs

The new law reining in the penalties that banks can levy on their riskiest borrowers doesn't apply to small businesses. ...
Source: RSS feed - channel BNPaperBusiness | 26 May 2009 | 7:00 am

Pipeline breach interrupts some of Chevron's oil output in Nigeria

A militant group says it destroyed 'major' trunk lines feeding a crude oil terminal. Chevron stops producing 100,000 barrels a day, about a fourth of its production in the African nation. ...
Source: RSS feed - channel BNPaperBusiness | 26 May 2009 | 7:00 am

On the way to 'Terminator Salvation,' legal sparks fly

Derek Anderson and Victor Kubicek, the neophyte owners of the movie brand, fend off disputes as they catapult into the Hollywood mainstream.

Derek Anderson and Victor Kubicek were having lunch at the Italian cafe Il Piccolino in West Hollywood in the fall of 2006 when they were served up an irresistible dish that wasn't on the menu.

Source: L.A. Times - Business | 26 May 2009 | 7:00 am

N Korea 'fires missiles' after UN condemns nuclear test

North Korea, defiant in the face of international condemnation of its nuclear test, was reported to have fired two more short-range missiles off its east coast after warning that such action could persist until Saturday
Source: Financial Times - US homepage | 26 May 2009 | 6:22 am

Lehman U.S., UK units at odds over bankruptcy: report

(Reuters) - Lehman Brothers Holdings Inc's U.S. estate administrators will ask a federal judge on Tuesday to approve a framework for coordinating bankruptcy proceedings for the bank's subsidiaries worldwide, putting them at odds with its administrators in the UK, the Wall Street Journal said.
Source: Reuters: Business News | 26 May 2009 | 6:20 am

Lehman U.S., UK units at odds over bankruptcy: report (Reuters)

Reuters - Lehman Brothers Holdings Inc's U.S. estate administrators will ask a federal judge on Tuesday to approve a framework for coordinating bankruptcy proceedings for the bank's subsidiaries worldwide, putting them at odds with its administrators in the UK, the Wall Street Journal said.
Source: Yahoo! News: Business | 26 May 2009 | 6:20 am

NZ stocks: Market suffers slight drop

Fisher and Paykel Healthcare lost share value after worse-than-expected revenue growth, while Telecom and Fletcher Building regained lost value on share market today. The benchmark NZSX-50 index closed down 0.22 per cent, or 6.12...
Source: New Zealand Herald - Business | 26 May 2009 | 6:17 am

Currency: Dollar gains against US, Australian

The New Zealand dollar gained against the American, Australian and the European currencies today, while falling slightly against the yen and the pound. At 5pm, the NZ dollar was buying US61.79c, up slightly from US61.77c at the...
Source: New Zealand Herald - Business | 26 May 2009 | 5:51 am

Positive data needed to lift stocks (Reuters)

Reuters - Wall Street may feel more pressure next week unless a raft of economic data, including consumer confidence, home sales and GDP, restores the optimism that had driven a two-month rally before fading in the past few days.

Source: Yahoo! News: Stock Markets News | 26 May 2009 | 4:18 am

Futures Slip After Holiday Weekend (Market Update)

News at a Glance

• Bulls Still Vacationing: Futures slip before short week.
• Out of Neutral: General Motors eyes resurfacing.
• Oil Slick: Crude trades down $1.50+ before open.
• Data Coming: Consumer confidence, Case-Shiller due.

The Lowdown

Wall Street is showing few signs of life at the start of a short week.

Stocks looked to open slightly lower Tuesday, as traders shook off the three-day weekend and braced themselves for new data on the consumer and the housing sector. Shortly after 7:30 a.m., Dow, Nasdaq and S&P 500 futures were trading a bit below fair value.

Traders turned bearish in the run-up to Memorial Day. The major indexes stumbled last week: each finished down more than 2%.

Two key reports could shake things up Tuesday. In housing, the March reading of the Case-Shiller Index is due out before the bell. Separately, the May reading of the consumer confidence index is scheduled to be released shortly after the open.

World markets were mostly lower. In Asia, Japan's Nikkei dipped 0.4%, while Hong Kong's Hang Seng slipped 0.8%. In Europe, the major indexes of London, Paris and Frankfurt each slipped by more than 1.0% in afternoon trading.

Crude oil prices took a step back. By 7:18 a.m., crude traded down $1.52 at $60.15 a barrel.

Corporate News

• General Motors (GM) is closing in on an exit from bankruptcy this week, but there are several loose ends to tie up before making it official. The firm is now waiting on the United Auto Workers union to sign off on a labor deal negotiated last week intended to save the company $20 billion in UAW trust-fund payments.
• Duke Energy (DUK) may have built its last two coal plants, Reuters reported, citing chief executive James Rogers. Rogers said that the firm was more likely to pursue nuclear power than to make a deeper push into coal.
• Johnson & Johnson (JNJ) is the target of a consumer health advocacy campaign intended to pressure the firm to remove two potentially carcinogenic chemicals from its Baby Shampoo, the Associated Press reported. About 50 groups representing 1.7 million members signed the document.

The Economy

• The March reading of the S&P/Case-Shiller Home Price Index is scheduled to be released at 9 a.m. by Standard & Poor's. In February, the composite price index slipped 18.63%. For March, economists predict an 18.40% decline.
• The May reading of the Consumer Confidence Index is scheduled to be released at 10 a.m. by the Conference Board. The index came in at 39.2 in April. For March, economists expect a bump to a reading of a 42.0.

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 | 26 May 2009 | 4:00 am

10 Things Your Home Insurer Won't Tell You (10 Things)

1. “We have our own caste system.”

Sam Mayer, a physician in suburban Chicago, had insured his home, car, and life with Metropolitan Life Insurance Company for 10 years without ever filing a single claim, until a damaged roof and a burglary led to two legitimate claims totaling $3,000. Mayer promptly installed a new home-security system. But instead of giving him a discount, the company dropped Mayer from its preferred coverage, citing his “claims history,” and instead offered him its standard carrier at a higher rate—even though his risk profile hadn’t really changed.

(“Homeowners insurers may sometimes offer a change in conditions of coverage of a consumer’s policy at renewal in order to continue to offer a policy to that individual whose risk profile has increased,” says a MetLife spokesperson. “This often occurs when a customer files more claims than average in a short period of time.”)

Indeed, almost all insurance firms slot their policies into different categories, based on a variety of factors, including your credit score and the location of your home. But even if your risk profile doesn’t change in any substantial way, you might still be shifted from a company’s preferred carrier to its more expensive counterpart, says Jim Davis, retired public-information director at the Texas Department of Insurance. “If you’re not in the preferred carrier, ask why,” urges Davis. Your agent—or even the insurance company itself—may be able to move you into a more favorable slot. Also, it’s worth shopping around. A home that may be considered “high risk” for a small regional carrier could actually be deemed “preferred” by a bigger outfit such as State Farm.

2. “Anything out of the ordinary makes us really nervous.”

Everyone knows that if your home is near the water or in an earthquake-prone area, insurers will shun you. Regulators can’t do much about that. But some insurers use illegal underwriting guidelines to “red line”—the industry term for “discriminate against”—certain groups or locations. For example, agents say they often get memos identifying undesirable ZIP codes or reminding them to stay away from couples who are having problems in their marriage. Bob Hunter, director of insurance for the Consumer Federation of America (CFA), describes his “favorite” memo from a company advising its agents: “Before writing a policy, drop by the house after work hours and see if the owner is sitting on his porch in a T-shirt and drinking beer.”

If you think you’ve been discriminated against, raise a fuss—like the elderly woman who was purchasing a home with a companion. She was denied coverage due to “an additional nonrelative listed as the named insured,” even though all other information was acceptable under company guidelines, according to the agent’s report. The woman contacted an attorney as well as the American Civil Liberties Union. The response: The insurance company said it had made an error and immediately offered coverage.

3. “One wrong move and we’ll drop you . . .”

As insurance companies tighten their belts, they’re getting to be even more particular about whom they’ll cover and whom they won’t. You could potentially file just one claim and get tossed out, or you may not have to file a claim at all to have your coverage terminated. And once you’ve been dropped, very few insurers will want to touch you. “Insurance companies are cold and hard,” says independent agent Michael Grace, of Baton Rouge, La. “They believe that if you get hit once, you’ll probably get hit again.”

That’s what Mike Martin discovered when his Labrador took a nip at an appliance repairman and his insurance company paid out a claim. When his policy came up for renewal, he was shocked to learn that he was being dropped. Martin, a Maryland financial planner, says he spent the next couple of weeks frantically calling up insurance agents to get a new policy. But since dog bites are a red flag for insurers, he was frozen out. Alarmed by his lack of coverage, the company holding his mortgage forced Martin to join a special “insurance pool,” which cost five times as much as his original policy. It wasn’t until he filed a complaint with the Maryland Insurance Administration that he got his original policy reinstated.

“I’ve seen people being discarded by their insurers for reasons much less ominous than a dog bite,” says the CFA’s Bob Hunter. Some will drop you if you start an at-home business, while others will label you too risky if you’ve missed a credit card payment or two.

4. “. . . especially now that Big Brother is watching.”

Privacy? Not so easy to hang on to in the information age. When it comes to home insurance, companies now have access to their own version of a credit report that reveals all sorts of information about you, sometimes even including past behavioral patterns. The most pervasive source of information is called the C.L.U.E.® report, short for Comprehensive Loss Underwriting Exchange, which enables insurers to check the claim history of both the homeowner and the property being purchased in order to assess the risk of loss.

Insurers contend that they need such services to weed out dishonest customers who attempt to hide their claims history. But the problem is, even when you have had legitimate claims in the past, you’re guilty until proven innocent, says Linda Ruthardt, former commissioner of insurance for Massachusetts. Once a person has been branded a high-risk applicant and rejected by one insurer, others are not likely to provide coverage.

5. “We’re more secretive than the CIA .”

Here’s a little test: Call your insurer and ask how many claims it would take for the company to drop you or deem you “risky.” Chances are you won’t get much of an answer—even if your insurer has written guidelines, it’s under no obligation to share them with you. And when an insurer doesn’t have written guidelines, its decisions can border on the arbitrary. “It could take some middle manager glancing at the company’s loss records to decide that the cutoff should be lowered from three claims to two claims,” says Ron Sundermann, an independent agent in Cedar Rapids, Iowa. And agents won’t get a bulletin to notify them of the change, so they have no way of advising a client on whether to swallow the cost of a $1,000 roof damage or pass it along to the insurance company and be penalized for it.

Sundermann learned the hard way: Over three years, a customer with a stellar record filed four small, perfectly legitimate claims totaling less than $5,000 and was dropped by his insurance company. When Sundermann pleaded his customer’s case, he was reminded that it was the frequency of his customer’s losses, not the severity, that made all the difference. The lesson? Filing one big claim may well land you in less trouble than four small ones—all the more reason to get a large deductible and pay for the smaller claims out of your own pocket.

6. “You’re paying too much for your policy.”

When it comes to your home, the last thing you want is to be underinsured. But could you actually be overinsured? It happens a lot, regulators contend. And when it does, it’s often the mortgage lender’s fault. For instance, a bank may require that your insurance cover almost the entire value of your home, including the land—which doesn’t make a lot of sense, because land doesn’t burn down— when what you really want to cover is just the house.

If you’re like most homeowners, your policy’s rate gets raised every so often to account for inflation. But read the numbers carefully: Your rates may be quite a bit higher than the actual inflated value of your home. Insurers also inspect homes every so often to check on any additions. But that doesn’t mean they get the last word—Jim Davis’s insurer jacked his premium way up after inspecting his house. But by challenging the inspector, Davis brought down the home’s valuation by several thousand dollars. “They were factoring in an uncovered porch area,” scoffs the retired Texas insurance official. “That’s an open space, not an area that would need replacing.” If you think your rates are higher than they should be, ask your insurance agent to come out and assess the home and try to come up with a more reasonable number, says the CFA’s Bob Hunter. Also, if you know the square footage of the house, speak with a builder and ask what it would cost to rebuild a home like yours—that’s the amount that should be used to determine your insurance premiums.

7. “You’re probably covered for a lot less than you think.”

Rick and Anne Morrissey of Indian Hills, Colo., were sitting quietly in their living room one day when they heard a tremendous crash in the backyard. Rushing outside, Anne was shocked to see that two giant elk had come along and demolished their children’s swing set. They were even more shocked when their Allstate adjuster called—damage by animals isn’t covered by most insurance, and it’s only one of the many surprises you might discover in the fine print on your policy.

That’s also why after Hurricane Katrina even homeowners with flood insurance found that none of the personal belongings they’d lost in the storm were covered. Thomas Martin, the founder of national advocacy group America’s Watchdog, lost $300,000 in personal belongings when a nearby levee broke and everything on the first floor of his home—including jewelry, computers, and flat-screen TVs—was destroyed by “a toxic soup of sewage and oils.” Had he known to take out the Federal Emergency Management Agency’s supplemental contents coverage in addition to his flood policy, Martin says some of his destroyed valuables would have been covered.

Among the most commonly misunderstood parts of any policy are the ways it handles missing objects, says David Thompson, an independent agent in Vero Beach, Fla. If you drop a piece of jewelry down the drain, for example, it’s generally not covered, but if you leave it by the sink in a public place and it’s not there when you return, most policies will treat this as a theft and reimburse you for the loss.

8. “We like some of our agents—and their customers—better than others.”

Insurance companies will tell you that any authorized agent is a good agent. But in truth, they play favorites—giving preferential treatment to those who generate the most business, have customers with the fewest claims, or both. And they offer them elite status: State Farm, for instance, includes its preferred agents in the President’s Club.

Why should you care? Because buying through one of these favored agents can pay big dividends to consumers. The chosen few tend to have increased flexibility on pricing and, more important, greater leeway on underwriting guidelines. For instance, American International Group (AIG) used to insure boats that travel only up to 50 miles per hour. But when Baton Rouge, La., star agent Michael Grace took on a client with a speedboat, he managed to convince the firm to underwrite it.

The special treatment applies to claims as well. Says Sean Mooney, chief economist at Guy Carpenter & Co., a global firm that advises insurance companies about risk: “When a claims situation comes up, [a preferred agent means] you have a friend in your court.” Other advantages preferred agents enjoy: They may have an easier time retaining someone who has had claims and would otherwise be canceled, and they can often get their clients moved from a company’s standard carrier to its preferred one.

9. “We’re biased against older homes.”

You have your eyes set on a beautiful period home built in the 1940s, with original slate roofs and fluted ceilings that looks like something out of Architectural Digest. Sounds lovely— now try getting insurance. Insurers are increasingly clamping down on “mature” homes, even when they’re only 30 or 40 years old. “In Texas, a 1953 house is considered ancient,” says Yvonne Darrah of Austin, Tex., who called at least 10 insurance companies before she could find one that would insure her 32-yearold home at a reasonable rate. “We were desperate,” she says.

Even if you do get insurance for your older home, you may not get the best kind. Some companies won’t sell “guaranteed replacement cost” policies— coverage that will pay whatever it takes to restore your home exactly as it was— in neighborhoods where property values are declining or where the property is old. You could end up with coverage that’s limited to only a few risks. Or you might be offered “cash value” coverage— these policies will only cover the cost of replacing what’s damaged, minus depreciation. “If you had a kitchen that was built 20 years ago and it’s destroyed, the cash value is no help,” says Mary Griffin, former insurance counsel at Consumers Union.

10. “You need to check up on us—and it’s easy.”

Insurers may not be the most forthcoming companies in the world, but thankfully, you can find out a lot about them. Your first stop ought to be your local library, where you’ll find ratings reports from agencies such as A. M. Best, Moody’s, and Standard & Poor’s.

You might be surprised at what you can get from your state’s insurance department as well. Texas and Missouri, for example, have websites with information on the latest rates in different areas and tips on how to file a complaint. If nothing else, a phone call to the state will let you know what other consumers think of your insurance company. “We can’t recommend agents or companies, but we can certainly tell you the number of complaints filed this year,” says a spokesperson for the Nevada Insurance Commissioners Office.

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 | 26 May 2009 | 4:00 am

Should You Buy a Home Equity Protection Plan? (Deal of the Day)

Watching a home's value plunge by double-digit percentages in a matter of months is enough to unnerve even the most financially secure homeowner. And, as the real estate market continues to reel concerns are growing that the free fall is far from over.

Playing into that anxiety are two companies – EquityLock Financial, based in Austin, Texas, and Lighthouse Group based in Charlotte, N.C. – that are selling products promising to put a little more control in homeowners’ hands. Their pitch? That homeowners could spend a little now to hedge against declines in the value of their home later.

Here's how it works: For a fee of 1% to 3% of their home’s value, homeowners buy a contract that protects them against the loss of equity in their home if the market takes a turn for the worse. The contract, which should not be confused with an insurance policy, pays the homeowner when he sells his home in a market where average home prices have dropped since their purchase. The amount he receives is tied to the size of the market’s decline, as measured by one of two home price indexes (both of which are based on sales of single-family homes).

Say you buy a home in Denver for $300,000. Five years later, after Denver's home price index falls 10%, you sell it for $290,000. At closing, the company you bought the equity protection from pays you $30,000 – your original purchase price times 10%. Even if you sold your home for more than what you paid to buy it, you can still make the claim – as long as the index fell. (If the index rises, however, you can’t make a claim and you're out the $6,000 you spent buying the contract.)

“It’s the kind of product that ends up being useful for a niche part of the population, but likely not really worthwhile for homeowners in general,” says Todd Sinai, associate professor of real estate at the Wharton School.

One factor to consider is how long you plan to live in your home. If it’s going to be 10 or 15 years, buying protection doesn't make much sense, says Susan Wachter, real estate professor at Wharton. While home prices can change dramatically in the short term, they hold steady and increase over longer periods. For short-term homeowners, though, it might make more sense. If, for instance, you anticipate a move for work and worry that area prices will sag, the protection can be worthwhile, says Sinai.

We spoke with real estate experts about what to look out for when shopping for home equity protection plans. Here's what they had to say:

Calculate the costs

Payment terms are different for each product. EquityLock’s premium, which is paid upfront, ranges from 1% to 3% of the purchase price (or of the current value if you already own a home). Lighthouse’s premium could be paid either on a monthly or yearly basis, and typically works out to just under 1% of the home’s value, per year, says a company spokesman.

Say your house is worth $300,000 and you pay $6,000 (a 2% premium) for EquityLock’s protection. You’re starting with a $6,000 loss, and you’ll only break even if the house index drops enough from the time you purchase the home to the time you decide to sell. “You really have to think hard if the initial cost is worth it,” says Sinai.

Watch out for lockout periods

Be sure to ask about any lockout period which bars you from collecting payment before a set time. EquityLock imposes an exclusion term ranging from 18 to 30 months from the time the protection is purchased. So you can’t sell your home and make a claim a year after the contract begins. Lighthouse has no lockout period. But if a homeowner exercises the contract after, say, the first month, they still owe the future monthly payments that are due.

Housing indexes are imperfect

Potential payouts are tied to a house price index: either the S&P Case-Shiller house price index, which tracks 20 metro markets, or the Federal Housing Finance Agency’s House Price Index, commonly known as OFHEO, which covers 386 markets. The problem? Indexes don’t capture the true volatility and variation within markets – and don’t always correlate with the specific value of your home, says Jonathan Adams, a finance professor at NYU. For example, if highway construction has just gotten underway at the next block over, chances are your home’s value would dive – but the index might stay the same, says Adams. (Lighthouse says tying the contract to an index is the most efficient way to determine a home’s value, without having to actually sell the house or get an appraisal.)

Be wary of new, untested products

Bear in mind the novelty of these plans when assessing their worth. “When it comes to finances and your home equity, you really want to go with someone who has a history,” says Alison Southwick, spokeswoman for the Better Business Bureau. Also, new products tend to be more expensive, says Mark Browne, professor of risk management at the University of Wisconsin. They haven’t been around for long, so it might be better to wait for competition to build.

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 | 26 May 2009 | 4:00 am

When There's No Competition

Unless you're a repo man, it's tough to find uplifting news in the economy these days. Sure, the market's seen a few rallies this year, but unemployment is rising and house prices are falling. And most analysts' outlooks for corporate profits this year aren't exactly rosy. “There isn't a lot of faith in earnings right now,” says Alec Young, an equity market strategist for Standard & Poor's.

But not every stock will limp out of this recession as Wall Street's walking wounded. Companies with strong, defensible businesses may actually be able to grow during these rough times, says Morningstar equities strategist Paul Larson. Such firms tend to have a “wide moat” around their business, which keeps their profits up and rivals out. They may operate in industries with high barriers to entry — think defense contractors and biotechnology. And as weaker competitors falter or go out of business, they can pick up market share and thrive as the economy rebounds. “These are stocks that may bend with the headwinds but not break,” says Larson.

There's some evidence that these companies consistently beat the market, too. Morningstar tracks a few dozen stocks it considers to have wide moats, and from 2004 through 2008 the group gained 13.2 percent, versus a loss of 10.5 percent for the S&P 500. Such stocks tend to have high returns on capital, a measure of profitability that Wall Street loves. And they tend to benefit from “economies of scale” — being so large, they can keep their costs down and beat the competition on pricing.

Of course, wide-moat stocks don't always shine. This year they were down 4.1 percent through the first three months, still better than the S&P but behind stocks with no moats, like retailers. Several large financial firms are on Morningstar's wide-moat list, and their stocks have been hammered. And some companies' moats erode over time — just ask anyone who invested in General Motors thinking its size would protect its market share indefinitely.

Yet with the downturn in full swing, many pros are emphasizing wide-moat companies for their ability to ride out the recession and even boost their bottom line. Justyn Putnam of Gabelli & Co., for one, likes Apollo Group, one of the nation's largest for-profit education companies. The company can charge tuition rates similar to those of state schools and community colleges but still manages to operate very profitably. Enrollment has been rising as more folks head back to school. And the stock looks cheap, trading at 13 times estimated fiscal 2010 earnings, below its historical average. They have “tremendous cash flow,” Putnam adds, and the flexibility to raise prices.

Some experts also see opportunity in smaller firms that have strong niche businesses. Eric Ende, comanager of the FPA Perennial fund, likes Copart, one of the largest auctioneers of crashed, or salvage, vehicles. Copart's business isn't easy to crack, he says, since it operates salvage yards across the country and has developed a sophisticated Internet auction system. Profits have come down a bit as prices for used cars and scrap metal have fallen. But the firm is expanding into the U.K., and its virtual auctions reach buyers in Eastern Europe and other parts of the world where demand is stronger. Analysts also like the company's balance sheet, with no debt and a growing cash hoard — which should help keep it chugging long after the recession ends.

Companies with solid, defensible businesses have strengths that should give them an edge when the economy rebounds.

Apollo Group (APOL)

• Price: $62
• Market Value: $9.9 billion
• 2008 Sales: $3.1 billion*
• 2009 P/E: 15

Apollo owns and operates the University of Phoenix, a for-profit education giant with nearly 400,000 students nationwide. Enrollment is up this year, as more folks take courses to sharpen their job skills, says analyst Justyn Putnam of Gabelli & Co. The stock looks pricey based on fiscal 2009 earnings, but analysts expect profits to grow 20 percent, to $4.77 a share in fiscal 2010, making the stock more reasonably priced.

Copart (CPRT)

• Price: $30
• Market Value: $2.5 billion
• 2008 Sales: $785 million*
• 2009 P/E: 17

Junkyard dogs may be familiar with Copart, one of the country's largest auctioneers of old and salvage vehicles. Low prices for used cars are pressuring earnings, but the company has a solid balance sheet. Analysts expect profits to grow as it gains market share from smaller, independent rivals and its Internet auction system reaches more buyers outside the U.S.

VCA Antech (WOOF)

• Price: $24
• Market Value: $2 billion
• 2008 Sales: $1.3 billion
• 2009 P/E: 15

Pet health care can be pricey, but that's what rings the register for VCA, a large national operator of animal hospitals and diagnostic labs. Analysts expect the firm to acquire 40 to 50 hospitals this year. And while some consumers have cut back on pet care, the company managed to boost revenue and profits in the fourth quarter of 2008. The business has “tremendous cash flow,” says Ryan Daniels, an analyst with William Blair & Co., who thinks the stock has room to grow.

*For fiscal years ending August and July, respectively.

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 | 26 May 2009 | 4:00 am

5 Stocks With Rising Profit Estimates (Screens)

The Great Corporate Profit Rebound of 2009 is looking, well, not so great.

In November, this column warned readers to view skeptically Wall Street’s forecasts for 2009. Analysts at the time expected profits underlying the S&P 500 index to finish the year 17% lower but jump 30% this year. In fact, 2008 profits fell 40%. That should have made a big percentage increase this year all the more attainable.

But calls for that 30% profit jump this year were soon tempered to 24%, then 20%. Now, after a mostly disappointing first quarter, the forecast stands at 9%. Don’t be surprised if even that proves too rosy.

Blame Wall Street’s flubbed estimates on a pair of mental stumbling blocks that behavioral finance researchers call recency bias and anchoring bias. They’re loosely related. People tend to view events that are recent as normal, even when farther-looking historical data say otherwise. They thus often anchor their beliefs in arbitrary benchmarks, not realizing those benchmarks are skewed.

Late last year, analysts might have expected earnings to quickly bounce back to “normal.” Their beliefs were still anchored in the “golden age of profitability,” as one investment firm called 2006. That year, profits reached their highest share of the economy since the 1960s, while incomes lagged, as consumers shopped on borrowed funds made plentiful by bloated house prices. All factors involved -- house prices, consumer spending, corporate profits as a percentage of gross domestic product -- have since reverted to, or at least toward, their long-term averages. Slowly, Wall Street seems to be getting used to the idea that today’s lower level of profits represents a reset, not a temporary lull. In fairness, a rash of layoffs at investment firms means analysts are dividing their coverage time among more stocks, which might also explain why estimates took so long to fall.

If profits are now normal, stock prices seem a touch high. Shares are 17 or 18 times earnings, depending on whether earnings grow 9% or not at all this year. Something closer to 15 or 16 times forward earnings would be more in keeping with history, and prices have languished at much lower levels following bubbles.

Recency and anchoring biases can help investors make money, too. Just as analysts are slow to fully acknowledge bad news, they’re slow to adjust for good news. That’s why studies have long shown that when earnings forecasts for a company are lifted, they’re more likely than not to rise again soon. There’s a shortage of upward earnings revisions at the moment, but there are some. Within the S&P 500, I count 67 companies whose current-year estimates have been raised over the past week, vs. 95 whose estimates have been lowered. Scan the first lot for valuations that still look modest and the results are few, but worth a look. Below I’ve listed five names.