We saw more evidence this morning that confidence alone is not enough to induce consumers to spend. Last week's surge in consumer confidence led many to believe that the US consumer was making a comeback. However, big misses in May same store sales by Costco and Target this morning cast some doubt on the consumer's willingness to spend.
According to Thomson Reuters estimates, analysts are looking for monthly sales to fall 4.1 percent from last year. However, so far 76 percent of the retailers that have reported same-store sales results have missed estimates so the results may be worse than feared.
If huge gains in consumer confidence and equity values can't get people to spend, this could be a brutal summer for retailers.
The Postreports that Bank of America fractional owner (currently clocking in at 1.1 million shares) Jerry Finger may finally be granted the opportunity to tell the board everything it (and management) is doing wrong (actual words: "offer insight about how to fix the hobbled banking giant"). Presumably, slide number one will be a picture of the fellow at left, who Finger has been trying to send home in a body bag formonths at this point. Bank of Amerillwide claimed in March that it had met with Mr. Finger "several times to hear his concerns and [attempt] to address them." Assuming that wasn't a lie, perhaps the term "meeting" was being loosely used to include "sent a first year out to the parking lot to stand there and nod his head every so often, cutting Finger off at around an hour." This time, now that Big Jer has achieved a modicum of success by stripping Lewis of the chair role, maybe they're rolling out the red carpet? More importantly, does this image from the Post's graphic department (whose work we've professed to be huge fans of on many occasions) make any sense whatsoever?
Reuters - U.S. stocks were flat with the Dow edging lower on Thursday as consumer stocks fell after May sales at many retailers failed to meet expectations.
Reuters - Discounter Wal-Mart Stores Inc says it will add more than 22,000 jobs in its U.S. namesake stores in 2009. Source: Yahoo! News: Business | 4 Jun 2009 | 2:06 pm
Rio Tinto, the Anglo-Australian miner, is preparing to launch a rights issue of up to $15 billion after it scrapped a controversial $19.5 billion deal with Chinalco.$
The European Central Bank will begin purchases of covered bonds next month, ECB President Jean-Claude Trichet said Thursday, embarking on an unconventional and controversial round of monetary policy making in an effort to boost credit flow within the 16-nation euro zone.
Eurozone official interest rates have been left unchanged at 1 per cent by the European Central Bank as it waits to see the impact of measures taken to combat continental Europe's worst recession since the second world war Source: Financial Times - US homepage | 4 Jun 2009 | 1:56 pm
Copeland: Here's how we are going to break this review down. I am a Blackberry user. I have the Bold. It's a silly name, but I never reference it public ("Where's my bold?" See -- silly). My colleague Jon Fortt is an iPhone user/lover. The reason I point this out, is that Blackberry users and iPhone users are likely to have different reactions to Palm's shiny new Pre. Source: Business and financial news - CNNMoney.com | 4 Jun 2009 | 1:55 pm
Treasury prices decline, pushing yields up for the first time in three days, after the Labor Department’s weekly report on jobless claims showed signs of improvement in the employment scene, adding to hopes that the worst of the recession is over.
Ciena reports a sharp decline in second-quarter sales and a net loss of more than $500 million after the networker wrote down the value of intangible assets, but the company's shares continue their 2009 recovery.
Stocks tiptoed higher early Thursday as signs of improvement in the labor market overshadowed a rash of ho-hum retail sales. Source: Business and financial news - CNNMoney.com | 4 Jun 2009 | 1:50 pm
There have been rumors recently that Time, Inc., the Time Warner (TWX) publishing division and the largest magazine operation in the country, might be spun off to shareholders in much the same fashion that AOL will be toward the end of the year.
What is Time, Inc. worth? Probably $2.5 billion, unless TWX management decides to [...]
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The European Central Bank says the eurozone economy will shrink by 4.6% in 2009, worse than an earlier forecast of 2.7%. Source: BBC News | Business | World Edition | 4 Jun 2009 | 1:48 pm
Dear Annie: I am worried about my husband of 19 years, who had a successful career in manufacturing project management until this recession hit. He lost his most recent job almost ten months ago, and at first he was doing a lot of networking, applying for jobs online, and even getting a few interviews, none of which panned out. Source: Business and financial news - CNNMoney.com | 4 Jun 2009 | 1:48 pm
FRANKFURT -- The European Central Bank kept its main interest rate unchanged at a historic low of 1 percent on Thursday amid a deeper than anticipated recession.
NEW YORK -- Stocks are moderately higher in early trading as investors weigh an unexpected drop in weekly unemployment claims against mixed sales reports from retailers.
Ongoing claims for unemployment insurance declined for the first time since January, and the number of initial claims fell slightly, according to government data released Thursday. Source: Business and financial news - CNNMoney.com | 4 Jun 2009 | 1:44 pm
Copper rises for the first session in three, as an upbeat weekly jobs report in the U.S. raises hopes for an economic recovery and a rebound of demand for the important industrial metal.
Reuters - U.S. stocks opened higher on Thursday as a fall in jobless claims and a rise in productivity offered encouraging signs the recession may be easing.
NEW YORK (Reuters) - U.S. stocks opened higher on Thursday as a fall in jobless claims and a rise in productivity offered encouraging signs the recession may be easing.
Chinalco is set to walk away from a $19.5bn deal with Rio Tinto following weeks of wrangling over the terms of the transaction in a dramatic u-turn that sent shares in the Anglo-Australian miner sharply lower Source: Financial Times - US homepage | 4 Jun 2009 | 1:32 pm
The number of US workers claiming unemployment benefits for the first time eased last week, official figures showed, lifting hopes that the pace of job losses may be slowing Source: Financial Times - US homepage | 4 Jun 2009 | 1:31 pm
Canada's central bank is keeping its trendsetting interest rate unchanged at a historic low of 0.25 percent and says the rise of the Canadian dollar is threatening the country's economic... Source: RSS feed - channel BNewsBusiness | 4 Jun 2009 | 1:30 pm
NEW YORK -- Many U.S. retailers said same-store sales fell in May, as expected, as shoppers continue to spend cautiously, focusing on bargains and food. Source: RSS feed - channel BNPaperBusiness | 4 Jun 2009 | 1:23 pm
NEW YORK -- Many U.S. retailers said same-store sales fell in May, as expected, as shoppers continue to spend cautiously, focusing on bargains and food.
WASHINGTON -- The number of people on the unemployment insurance rolls fell slightly for the first time in 20 weeks, while the tally of new jobless claims also dipped, the government said Thursday. Source: RSS feed - channel BNPaperBusiness | 4 Jun 2009 | 1:23 pm
WALTHAM, Mass., June 4 /PRNewswire/ -- Charles River Ventures (CRV), one of the nation's leading early-stage venture capital firms, today announced that Sarah Reed has... Source: RSS feed - channel BNewsBusiness | 4 Jun 2009 | 1:23 pm
WASHINGTON -- The number of people on the unemployment insurance rolls fell slightly for the first time in 20 weeks, while the tally of new jobless claims also dipped, the government said Thursday.
The government forced former General Motors CEO Rick Wagoner to step down earlier this year. But it looks like top banking executives will avoid suffering the same fate. Source: Business and financial news - CNNMoney.com | 4 Jun 2009 | 1:19 pm
CHARLOTTE, N.C., June 4 /PRNewswire/ -- Working to increase the adoption and effectiveness of retirement plan rollover management programs, RolloverSystems, Inc. (RSI), an... Source: RSS feed - channel BNewsBusiness | 4 Jun 2009 | 1:19 pm
The slump of the U.S. dollar against other major currencies helped boost oil prices, as investors buy into commodities to safeguard against inflation and dollar weakness. Benchmark... Source: RSS feed - channel BNewsBusiness | 4 Jun 2009 | 1:16 pm
Reuters - Shoppers searched for bargains and basics in May, leading many retailers to miss sales expectations on Thursday even though the bar was set pretty low for most chains. Source: Yahoo! News: Business | 4 Jun 2009 | 1:16 pm
CHICAGO (Reuters) - Shoppers searched for bargains and basics in May, leading many retailers to miss sales expectations on Thursday even though the bar was set pretty low for most chains.
Hartford Financial Services Group Inc. said Thursday that Chairman and Chief Executive Ramani Ayer will retire by the end of the year. The insurer's board is looking externally for a... Source: RSS feed - channel BNewsBusiness | 4 Jun 2009 | 1:15 pm
WASHINGTON (Reuters) - Fewer U.S. workers filed new claims for jobless benefits for a third straight week last week and productivity rose at a stronger-than-expected pace in the first... Source: RSS feed - channel BNewsBusiness | 4 Jun 2009 | 1:14 pm
WASHINGTON (Reuters) - Fewer U.S. workers filed new claims for jobless benefits for a third straight week last week and productivity rose at a stronger-than-expected pace in the first quarter, data showed on Thursday, supporting budding hope that the recession was losing force.
Reuters - Fewer U.S. workers filed new claims for jobless benefits for a third straight week last week and productivity rose at a stronger-than-expected pace in the first quarter, data showed on Thursday, supporting budding hope that the recession was losing force.
US stocks were set to rebound following the sell-off of the previous session, as oil prices rebounded and investors reacted to some encouraging economic news Source: Financial Times - US homepage | 4 Jun 2009 | 1:13 pm
PURCHASE, N.Y., June 4 /PRNewswire-FirstCall/ -- PepsiCo (NYSE: PEP) announced today that the dairy and juice joint venture it formed earlier this year with Saudi-based dairy... Source: RSS feed - channel BNewsBusiness | 4 Jun 2009 | 1:13 pm
LOUISVILLE, Kentucky (Reuters) - The steep decline in the U.S. economy has started to moderate, but a pending recovery is likely to be slow and marked by continued high unemployment, Cleveland Federal Reserve Bank President Sandra Pianalto said on Thursday.
Intel Corporation (NASDAQ: INTC) has made what many will consider as a strange merger, but there is more to this merger than meets the eye and this will give Intel higher ticket sales with high margins. The processing giant will acquire Wind River Systems Inc. (NASDAQ: WIND) in an all-cash buyout valued at $11.50 per [...]
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PARIS (Reuters) - The prospect of a bumper plane order battle brightened a depressed outlook for plane manufacturers on Thursday as United Airlines was reported to be seeking 150 jets despite fresh warnings of industry losses.
A group that includes the Chamber of Commerce, the Mortgage Bankers Association, and the American Council of Life Insurers and others sent a letter on June 1 to Treasury Secretary Timothy Geithner, regarding the off-balance-sheet accounting-rule change, saying it should be adopted "cautiously and seek to minimize any chilling effect on our frozen credit markets."
The letter was signed by 16 industry associations, many of which were part of a group known as the "Fair Value Coalition," which was formed earlier this year with the goal of changing mark-to-market accounting rules. Mark-to-market accounting rules set guidelines for banks on when they are required to reflect market prices in the values they assign to hard-to-value securities and other assets.
Now the group of financial organizations is trying to put the brakes on the off-balance-sheet accounting measure, which would force banks to bring hundreds of billions in assets back onto their balance sheets at the beginning of 2010, effectively forcing them to set aside more capital. Some accounting experts say they aren't surprised by the banking industry's latest effort. "Here we go again. They will get out their checkbooks and go to the Hill," says Lynn Turner, the Securities and Exchange Commission's former chief accountant.
What's that saying, those who fail to learn from history are what?
House Lifts Lid on its Expenses (WSJ)
Finally a (small) step in the right direction, namely, increased transparency from Congress, purveyors of rank hypocrisy.
The House will begin posting representatives' expense reports online, giving the public easy access to records of the millions of dollars lawmakers spend on staff and items such as catering, cars, computers and TVs.
Separately, Sen. Tom Coburn (R., Okla.) said Wednesday he would introduce a bill requiring the expense records be posted online in the Senate, as well. Such disclosures are "something that we will take a look at," said Jim Manley, spokesman for Senate Majority Leader Sen. Harry Reid (D., Nev.).
Somehow I don't expect this action to reveal any ruh-rhos or red flags since any "scandalous" spending is no doubt arranged outside of Congresspeople's office budgets (Pelosi's reported frequent private jet usage, for example).
Actions taken by the Securities and Exchange Commission at the height of the market turmoil last year appear to have reduced abusive short-selling, but the agency should provide clearer guidance to the brokerage industry for applying the rules, congressional auditors concluded in a report issued Wednesday.
The Securities and Exchange Commission is investigating whether information about imminent stock upgrades and downgrades was improperly used by employees at Lehman Brothers Holdings and others, according to a letter released by Sen. Charles Grassley.
India's new government will focus on reviving economic growth and helping millions of poor people, the president says. Source: BBC News | Business | World Edition | 4 Jun 2009 | 12:45 pm
Most retailers continued to suffer sagging sales in May despite reports that showed more American consumers are regaining confidence in the economy. Source: Business and financial news - CNNMoney.com | 4 Jun 2009 | 12:44 pm
The Competition Commission is forcing Capita, the FTSE 100 back-office outsourcing specialist, to sell part of the IBS OPENSystems software business it acquired last year for £78 million.
The Labor Department has just released its weekly jobless claims data at 621,000. The prior week’s reading was revised to 625,000 from a prior reading of 623,000. The consensus estimates from Bloomberg were for a reading of 620,000 for this week’s data. This data is too in-line to matter, but there is a big silver [...]
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NEW BRUNSWICK, New Jersey (Reuters) - Johnson & Johnson detailed new medicines in immunology, neuroscience, cancer and other areas to analysts on Thursday as Wall Street counts on the company's pharmaceuticals business to help restore solid profit growth by next year.
MELBOURNE (Reuters) - Chinese state-owned metals firm Chinalco may revise its planned $19.5 billion investment in miner Rio Tinto before a June 14 deadline to avoid further delays in Australian government approval, two sources close to the deal said on Thursday.
AP - European stock markets were mostly higher Thursday following two days of losses as investors awaited a press briefing from the head of the European Central Bank after it decided to keep interest rates on hold.
US President Barack Obama has called for a new beginning in relations between America and the Muslim world in a dramatic address in Cairo that sought to overcome decades of mistrust Source: Financial Times - US homepage | 4 Jun 2009 | 12:08 pm
The Bank of England pegged interest rates today for a third month in a row and stayed its hand over any other changes in its recession-fighting strategy as it paused for breath in its battle to combat Britain’s economic slump.
The Bank of England's interest rate setters have kept the cost of borrowing unchanged at 0.5% for the third month in a row. Source: BBC News | Business | World Edition | 4 Jun 2009 | 11:56 am
Wal-Mart Stores Inc. said Thursday that it expects to hire more than 22,000 people to staff its new or expanded domestic stores this year. Source: Business and financial news - CNNMoney.com | 4 Jun 2009 | 11:43 am
It took Goldman Sachs (GS) long enough to raise its target price for oil to $75. The investment bank waited until crude was close to $70 after a fairly fast increase from under $40 just a little over three months ago.
The price of crude has quickly become the largest threat to the economic recovery and [...]
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These are the top pre-market analyst upgrades and positive research calls we have seen from Wall Street firms early this Thursday morning with more than two hours until the market opens:
Finish Line (FINL) Started as Outperform at Oppenheimer.
FMC Technologies (FTI) Raised to Outperform at FBR.
Foot Locker (FL) Started as Outperform at Oppenheimer.
Franklin Resources (BEN) Started [...]
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These are the top pre-market analyst downgrades or cautious notes we have seen early this Thursday morning from Wall Street brokerage firms with more than two hours until the market opens:
Athenahealth (ATHN) Started as Neutral at Baird.
E*TRADE (ETFC) Started as Hold at Deutsche Bank.
Legg Mason (LM) Started as Sell at Deutsche Bank.
Millicom (MICC) Cut to [...]
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Crude oil prices rose by more than $1, rebounding after a sharp fall in the previous session and leading a raly across commodity markets Source: Financial Times - US homepage | 4 Jun 2009 | 10:50 am
Kenya protests to the US over its abrupt move to cancel new commercial flights, apparently amid security concerns. Source: BBC News | Business | World Edition | 4 Jun 2009 | 10:50 am
The Times of India reports on how Microsoft will move employees offshore if President Obama’s plan to outlaw tax breaks for offshore companies passes:
US tax rules let companies defer paying corporate rates as high as 35 per cent on most types of foreign profits as long as that money remains invested overseas. Obama says he wants to end such incentives to keep foreign profits tax-deferred so that companies would invest them in the US. While the rules were designed in 1997 to protect US companies from paying excessive tax to other governments, Obama administration officials say it has evolved into a way to duck US liabilities.
“It makes US jobs more expensive,” Steve Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the US as opposed to keeping them inside the US.”
Altering the rule, which Obama dubbed a “loophole,” would generate $86.5 billion in new revenue by 2019, the administration says. Obama has said his proposals would protect or create jobs in the United States.
(Symantec CEO John W.) Thompson called the Obama proposals “counterintuitive” to the administration’s other stated goals of fostering an innovation-oriented economy. “It is a little bit ironic that most of our most significant trading partners and partners globally have taken the tack that they’ll reduce corporate tax rates to stimulate economic growth and not raise corporate tax rates,” Thompson said.
Ballmer said that, while the Obama proposals would preserve expense deductions related to research and experimentation costs, the overall deduction limits for companies that defer tax on foreign profits would raise the cost of employing US workers. Fiduciary responsibility to shareholders would require Microsoft to cut costs, he said, meaning many jobs would be moved out of the country.
Obama also needs to propose reducing the corporate tax rate at home. Otherwise, companies have no incentive to stay here.
The world's food import bill will drop this year by about a fifth as agricultural commodities trade well below last year's all time highs, the United Nations' Food and Agriculture Organisation said on a report Source: Financial Times - US homepage | 4 Jun 2009 | 10:35 am
France's unemployment rate rises to a two-year high as the country continues to be hit by the global recession. Source: BBC News | Business | World Edition | 4 Jun 2009 | 10:25 am
Carol Bartz, Yahoo!’s (YHOO) new CEO, says the portal company does not need a deal to combine its search engine operations with Microsoft’s. Yahoo! has about 20% market share in the US to Redmond’s 8%.
Yahoo! may think its can stand on its own, but there is a lot of evidence to the contrary. The [...]
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UK car sales fell by 25% in May compared with the same month last year, the latest industry figures show. Source: BBC News | Business | World Edition | 4 Jun 2009 | 10:24 am
Supermarket group Morrisons says it is encouraged by recent trading, with sales growth ahead of its rivals. Source: BBC News | Business | World Edition | 4 Jun 2009 | 10:21 am
European markets rose on Thursday as investors braced for the results of the European Central Bank meeting. Although an interest rate cut is not expected this month, markets were closely watching for signs... Source: RSS feed - channel BNPaperBusiness | 4 Jun 2009 | 10:14 am
The International Air Transport Association says that its forecast that the world’s airlines will loss $4.7 billion this year appears to be much too low. Passenger and freight loads are still well down compared to two years ago. Oil prices are rising much faster than projected.
United Airline (UAUA) is taking the long view and its [...]
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Many big-box retailers including Best Buy (BBY), Target (TGT), and Costco (COST) are struggling as the recession beats down their same-store sales. General retailers such as Sears (SHLD) are not faring any better. That means that the layoffs in the retail industry, which have already been extensive, are likely to continue, especially if the 2009 [...]
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“Certainly do not give a systemic regulator the job of determining when the next financial crisis will hit,” Alan Greenspan said in a speech at the American Enterprise Institute. The federal government does not appear to think the former Fed chief has any idea what he is talking about.
Several news services have reported that the Administration will [...]
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AMSTERDAM (Reuters) - Dutch financial group ING Groep NV will leave 10 of the 48 countries it currently operates in and sell 10 to 15 businesses over the next three to five years, Chief Executive Jan Hommen said on Thursday.
House prices rose by 2.6 per cent in May, the first increase in four months and the biggest jump since October 2002, giving further hope that the market could be nearing the bottom, according to new figures from Halifax.
Wal-Mart. the largest retailer in the US, says it expects to hire about 22,000 people as it opens or expands 150 stores. Source: BBC News | Business | World Edition | 4 Jun 2009 | 8:52 am
Chinese security forces took full control of Tiananmen Square on the 20th anniversary of the bloody crackdown on peaceful demonstrators, as Beijing reacted angrily to US calls for a public accounting of the 1989 massacre Source: Financial Times - US homepage | 4 Jun 2009 | 8:46 am
AFP - Stocks in London rebounded slightly at the open on Thursday as investors expected the Bank of England to keep interest rates unchanged at 0.50 percent.
The FTSE 100 moved back over the 4,400 mark on Thursday as strong corporate newsflow from the high street helped it rediscover some poise after two sessions of losses. London's benchmark index rose 18... Source: RSS feed - channel BNPaperBusiness | 4 Jun 2009 | 7:57 am
Debenhams has unveiled plans for a £323 million fundraising to pay down debt and reassured that profits from current trading are higher than this time last year.
Wm Morrison, the supermarket group, today reported an 8.2 per cent jump in first-quarter like-for-like sales as cash-strapped customers continued to opt for its cut-price food.
PERTH - The Australian share market closed two per cent lower, weighed down by profit taking and a weaker resources sector on the back of softer oil and gold prices.
The benchmark S&P/ASX200 index was down 82.6 points, or 2.06... Source: New Zealand Herald - Business | 4 Jun 2009 | 7:17 am
Debenhams announces plans to raise £323m from a share sale to cut debts and reports a small drop in sales. Source: BBC News | Business | World Edition | 4 Jun 2009 | 7:11 am
A failed government bond auction sends tremors across financial markets as investors fear emerging nations would struggle to find buyers for a huge wave of sovereign debt issuance Source: Financial Times - US homepage | 4 Jun 2009 | 7:05 am
As interest rates climb, the Fed chairman warns Congress that a large, sustained debt load could choke the U.S. economy. ... Source: RSS feed - channel BNPaperBusiness | 4 Jun 2009 | 7:00 am
Port officials unveil what is billed as the world's first electrical shore-side power system for tankers, which are notorious fuel guzzlers and air polluters. ... Source: RSS feed - channel BNPaperBusiness | 4 Jun 2009 | 7:00 am
GM Chief Executive Fritz Henderson and Chrysler President James Press defend their companies' actions in a hearing before the commerce panel and a standing-room-only crowd.
A congressional committee added another layer of government oversight to the Obama administration's bailout of General Motors Corp. and Chrysler as senators grilled executives Wednesday over plans to use the corporate bankruptcies to close about 2,000 dealerships.
One of the great things about Senate confirmations of Supreme Court justices is that they help us develop a long-term perspective on the workings of the highest tribunal in the land. Source: RSS feed - channel BNPaperBusiness | 4 Jun 2009 | 7:00 am
Sichuan Tengzhong's deal to buy the brand from bankrupt GM makes a nation wonder. The gas-guzzling SUV is seen as dream car or a source of shame -- depending on who you ask.
Findings by Harvard researchers show that medical-related bankruptcies have increased from 55% in 2001. The report could boost Obama's bid for healthcare reforms. ... Source: RSS feed - channel BNPaperBusiness | 4 Jun 2009 | 7:00 am
The effects will ripple more widely: By the end of next year, the automaker plans to eliminate nearly 2,500 dealerships that might otherwise buy local advertising. ... Source: RSS feed - channel BNPaperBusiness | 4 Jun 2009 | 7:00 am
Findings by Harvard researchers show that medical-related bankruptcies have increased from 55% in 2001. The report could boost Obama's bid for healthcare reforms.
President Obama's push for healthcare reforms gets a boost today from a new study by Harvard University researchers that shows a sizable increase over six years in bankruptcies caused in part by ever-higher medical expenses.
Fostering bilateral trade and investment could benefit both nations and help stabilize political relations, experts say.
As President Obama arrives in Egypt today to deliver a much-anticipated speech on U.S.-Middle East relations, businesspeople on both sides of the world are hoping his trip will pave the way for increased commerce.
One of the great things about Senate confirmations of Supreme Court justices is that they help us develop a long-term perspective on the workings of the highest tribunal in the land.
Thanks to airline and hotel deals, vacationers are still coming to see the stars, but they're spending less on dining and attractions.
Somewhere between Debbie Reynolds and Jack Benny, the Laitala family of Duluth, Minn., stopped to marvel at the throngs of tourists shuffling among the sidewalk stars of Hollywood Boulevard.
A trade group says the service sector shrank in May at the slowest rate since October, and the Commerce Department said factory orders rose 0.7% in April. But both figures fell short of expectations. ... Source: RSS feed - channel BNPaperBusiness | 4 Jun 2009 | 7:00 am
The New Zealand sharemarket fell today but outperformed other markets in Asia care of gains by market leader Fletcher Building and others.
The benchmark NZSX-50 index closed down 24.914 points, or 0.877 per cent, at 2815.713. Turnover... Source: New Zealand Herald - Business | 4 Jun 2009 | 6:45 am
MANCHESTER - Manchester United announced a four-year shirt sponsorship agreement with Chicago-based insurance broker Aon today in what may be the biggest deal of its kind.
An Aon logo will adorn the United players' red shirts for... Source: New Zealand Herald - Business | 4 Jun 2009 | 5:30 am
The New Zealand dollar was mixed today after plunging on Wednesday night when investors took profits in higher-yielding but riskier currencies.
After reaching its highest level in almost eight months early yesterday, around US65.95c,... Source: New Zealand Herald - Business | 4 Jun 2009 | 5:22 am
Former Bridgecorp director Michael Petricevic has been banned from directing or managing a company in New Zealand for five years.
The Deputy Registrar of Companies Peter Barker Rodney announced the decision today.
Fellow director... Source: New Zealand Herald - Business | 4 Jun 2009 | 4:54 am
As stocks have climbed over the past three months, some top bosses have wasted little time unloading personal stakes in their companies.
In early March, when the S&P 500 index was below 700, about 65% of companies reporting so-called insider transactions were the subject of more buys than sales. By early May, when the index topped 900, that figure had plunged to 38%. It has since rebounded only slightly, to 42%. (I’m using analysis from Form 4 Oracle, a subscription service named for the transaction reports companies must file when top executives, board members or major shareholders buy and sell stock.)
Insider sentiment, and perhaps valuation—the S&P 500 is an ambitious 21 times trailing operating earnings—suggest investors should use caution in putting fresh money into shares. Best, maybe, to favor ones the bosses are still buying. Studies show insiders tend to be successful when they trade their own stocks. Some transactions have more predictive power than others. In general, large purchases, purchases by more than one insider and purchases by “C-level” executives (chief this or that) are worth looking into. Here are examples of each from the past month.
Big Purchase
Valeant Pharmaceuticals International (VRX) Valeant’s stock history is one of much drama but little long-term progress. Adjusted for splits, shares multiplied 10 times in value over eight years ended spring 1998 (when the company was called ICN Pharmaceuticals) but today trade little above their 1986 peak. Since February 2008, though, the company has had a new chief executive, and has focused on adding products relating to skin disorders (acne, psoriasis, scars) and neurological diseases (epilepsy, Parkinson’s). Sales and profits are growing, debt looks modest and insiders have spent more than $50 million on stock over the past month. The bulk of that comes from an investment firm, but board members and the new boss are buying, too.
Group Buying
Arch Chemical (ARJ) I suppose Valeant serves as an example of group buying, too, but for another example see Arch Chemical. Based in Norwalk, Conn., it calls itself “the biocide company,” which is sort of like saying “the killer,” only the lives being spent belong to deck fungus, termites, mildew and so on. Part of sales are tied to the struggling home builder industry, and Arch fell from $45 a share in October 2007 to $15 in March, but has since nearly doubled. Three board members bought in May.
C-Level Purchase
GameStop (GME) Retail in general might be soft, but the nation’s biggest chain devoted solely to videogames is prospering. Sales are expected to climb 9% this fiscal year and profits 18%. Maybe that’s because videogames are low-cost entertainment (versus, say, concerts and theme parks) and because used videogames (whose trade GameStop dominates) carry fatter profit margins than new ones. Whatever the cause, the balance sheet is clean, the return on equity is healthy and all that’s missing is a dividend. The company’s chief financial officer spent just over $1 million on stock over the past week or so.
Of course, there are more important signals to consider than insider buying. Chief among them is valuation. Each of the aforementioned stocks and the two additional ones listed below costs less than the broad market relative to this year’s earnings forecast.
A PROLIFIC AUTHOR AND MEDIA STAR, NIALL FERGUSON has become one of the most prominent academics in the world. The Scottish-born Ferguson, 45, is a history and business-school professor at Harvard, and holds other high-profile posts at Stanford and at Oxford -- where he earned his doctorate.
Ferguson is a provocative writer. His most recent books are The Ascent of Money (2008) and The War of the World, a study of World War II, published in 2006. He has also done several TV projects, including a multipart series based on The Ascent of Money that will air in July on PBS, the Public Broadcasting System. He is working on a book on Siegmund Warburg, who was an influential British financier from the 1940s through the 1970s.
Barron's profiled Ferguson in a cover story more than two years ago ("Wake-Up Call," March 12, 2007), in which he astutely warned that the markets were too complacent about financial and geopolitical risk. Today, the rightward-leaning Ferguson is cautious on the global economic outlook, worries about Russian intentions in Eastern Europe -- and thinks Britain's Conservative Party may finally win an election in 2010. Ferguson also has a distinctive view on investments, inspired in part by the famed Rothschilds. Barron's caught up with him recently in New York.
Barron's: Is the worst over for the global stock markets and the economy?
Ferguson: It may look that way, but appearances can be deceptive. The stock market has actually tracked almost perfectly its downward movements between 1929 and 1931. Now that doesn't mean that we are going to repeat the Great Depression. I don't think we will, because the policy responses have been different. It would be excessively optimistic, however, to conclude from a relatively small set of green shoots in the economic data that we are all going to live happily ever after. It is certainly way too early to say the Obama administration is right that the economy is going to grow at 3% next year and 4% in 2011. I find that scenario as implausible as a rerun of the Great Depression.
What is the relative position of the U.S.?
It is in significantly better shape than the other major developed economies. The U.S. can run bigger deficits at lower cost, because of its reserve-currency status. The Japanese economy has fallen off a cliff. The German economy isn't a great deal better. These two economies are suffering their worst shock since the 1930s. The contraction in Germany and Japan probably will be roughly twice that of the U.S. Real gross-domestic-product growth in Japan is almost certainly going to be a negative 6% or 7% this year. In the U.S., it is going to be about minus 2.6% for this year.
It is ironic that the U.S. may hold up better.
We have a crisis that was clearly American in origin. It had a Made in America stamp on it, yet it ends up hurting other people more than it hurts Americans. That brings to mind [19th-century Prussian leader Otto von] Bismarck's great line: "God looks after drunks, fools and the United States of America."
When will the recovery come?
Nobody has the faintest idea what next year is going to look like. It isn't clear yet that this is just a common recession. This is probably more like a slight depression. We won't see a big V-shaped bounce. Much of the consumption growth in the decade up to 2007 was fueled by things like mortgage-equity withdrawal. That game is clearly over. Strip that out, and you are looking at an annual economic-growth rate in the U.S. closer to 1½% to 2% than 4%.
What is your disagreement with New York Times columnist and Princeton professor Paul Krugman about massive government borrowing?
This is one of the most interesting questions of the moment. The view of Keynesians, their Econ. 101 textbooks and the Nobel laureate at Princeton is that the world has an excess of savings over investments and therefore the deficit can be almost any size and it will be financed. My sense is that if the U.S. government tries to borrow $1.8 trillion in a year, that is an awful lot of bonds to sell at the same time [as] all the other major governments. It looks to me like a supply-and-demand story, and what tends to happen in those stories, regardless of the macro environment, is that the price of bonds tends to fall. The U.S. 10-year Treasury rate has moved up more than 100 basis points [one percentage point] since January. There is a problem in Britain, where the Bank of England had to protest about fiscal stimulus because it was causing a huge interest-rate problem. It is also happening here.
Are you concerned about the potential for overregulation as an outgrowth of the financial crisis?
My worry is that we end up with an overreaction. Now history is something that gets written in a hurry. The consensus is that this crisis came about because of deregulation in the U.S., and that what we need is more regulation. Whether it is bankers' compensation or derivative markets, there is going to be more regulation. My feeling is that all this zeal for regulation actually grows out of a very faulty analysis. Why do I think that? For one, if this crisis was all about regulation it took a hell of a long time to come about because deregulation began in 1980. And deregulation can't be all bad because lots of good things happened in the world economy after 1980. The second problem is if deregulation was the issue, why was it that the most regulated entities, banks, caused the biggest trouble, and that unregulated hedge funds didn't? Some hedge funds have failed, but there has been no systemic downside to it. And thirdly, the regulatory frameworks are not the same on both sides of the Atlantic, and yet European banks are in as big a mess as the American ones. German banks are the most leveraged on average in the world. Now the Germans have been wagging their fingers at the Anglo-Saxon model, but their model didn't prevent extra leverage in the balance sheets.
What about your native U.K.?
The economic outlook is pretty bleak. The size of these big too-big-to-fail banks like Royal Bank of Scotland is really huge, relative to the United Kingdom's GDP. It creates a fiscal nightmare. The U.K. is taking on an enormous pile of liabilities in relation to its GDP and the existing public debt. The U.K. isn't Iceland. It isn't Ireland. They were the extreme cases where finance was vastly greater than the economy. But the U.K. is closer to them than to the U.S. Americans worry a lot about bank leverage and the scale of the government's financial commitments. But the U.S. is a pretty large economy, and the financial sector never got as big in relative terms as it did in Britain.
Any hope for the U.K.?
I am, broadly speaking, bleak about the U.K. until it gets a new government, and that almost certainly will be within the next year. Then I think we will see some radical reform. The U.K. needs another dose of Thatcherism very urgently, and I'm hoping it gets that. [Conservative Margaret Thatcher was British prime minister from 1979 through 1990.]
Are you saying the British Conservatives may actually win an election?
They can and will. The Brown government is probably the most unpopular ever, and it is really quite spectacular. [Prime Minister Gordon Brown leads the British Labour Party.] The Conservatives would have to screw up on an absolutely epic scale to lose.
What about the rest of the world?
The emerging-market story is actually much more straightforward because there is a real stimulus package out there that is working much better than the U.S. stimulus package: It is the one in China. It is giving a shot in the arm to those economies that supply commodities to China, and they are the markets that have rallied the most since the year began. The Russian stock market essentially is a play on the price of oil. Brazil is partly a food story, and India has done pretty impressively, too. So, if you had to take a view on equities, it would be the BRICs [Brazil, Russia, India, China] over the U.S. There is also a big commodities opportunity there.
Where is the biggest potential source of political instability in the world?
Eastern Europe, for sure. Four governments -- in Latvia, Hungary, the Czech Republic and Estonia -- have already fallen since this crisis began.
Americans aren't focused on that.
It is funny, because the Eastern European crisis not only is economically interesting, but [also is] strategically important: It blows a hole in balance sheets of Western European banks. We have been beating ourselves up here for the way U.S. banks were managed. But Western European banks are in worse shape, and what really is going to hurt them is the mess that is Eastern Europe, from Ukraine to the Baltics, Romania, Hungary, and Slovakia. These economies are in a terrible mess.
Are there political implications?
These new democracies that came out of the collapse of Communism have been pretty solidly pro-American. They are Donald Rumsfeld's famous "New Europe." Well, now they are being hammered by this crisis, and that creates an opportunity -- all crises are opportunities -- for Vladimir Putin and his merry men in Russia to start reclaiming some leverage over what they call the "near abroad." The gas pipeline crisis in Ukraine last January, like the invasion of Georgia, could be a foretaste of an important trend over the coming year, where domestic instability starts to create opportunities for the Russians to regain at least some of their influence in that area.
In writing about the Rothschild family, you have discussed your admiration for their old-fashioned investment approach.
There is no doubt that orthodox notions of portfolio diversification didn't help much in this crisis. There was so much correlation among asset classes last year that it was hard to avoid a pasting. But that old Rothschild model, about a third securities, a third art, and a third in real estate has a certain appeal to it.
Or having some exposure to gold. That is the thing I most regret not having done. When the Bank of England sold a pile of gold in 1999 at an incredibly low price [around $300 an ounce], I remember thinking, "That is a stupid mistake," but I didn't buy any gold. That would have been a killer investment.
Stocks haven't done well since 1999.
You are back to square one if you had bought the "stocks for the long run" story then.
How were you positioned prior to the market meltdown last year?
I didn't have much equity exposure on the eve of the crisis. But I probably had rather more real estate than I wanted, though my strategy has been consistently to buy historic real estate on both sides of the Atlantic. Nothing I own was built after around 1800. There is a premium on things that can't be replicated.
You live now in Oxford.
I divide my time between Beacon Hill [in Boston] and Oxfordshire. And the Oxfordshire house is a 17th-century farm house. The Beacon Hill house is one of the oldest in the U.S. We also have an ancient pile in South Wales, which dates back to the Middle Ages. Most of its structure is 16th century. Now that's a kind of quirky investment, because most properties of this kind aren't very liquid. But I see them as investments for the long run -- I mean, they have already been around for the long run.
Ever get knocked in the shins by a shopping cart while you’re waiting for a medical treatment? These days, it’s becoming more of a distinct possibility. Retail health clinics are quietly sprouting up around the nation at local drugstores and supermarkets, often tucked in a corner just past the mouthwash and Flintstones Vitamins.
With the battered economy putting more pressure on people’s ability to cover health costs, and the ranks of primary-care physicians dwindling, analysts say these clinics could become a nifty niche for U.S. drugstores (CVS pharmacy, Walgreens), supermarkets (Kroger, Cub Foods) and big-box chains (Wal-Mart, Target), which have shoehorned about 1,100 of them into stores. Indeed, while their growth has slowed lately, the number of clinics shot up tenfold between 2006 and 2008 alone, drawing nearly four times as many customers over the same time period.
One major drawing card, of course, is price: They’re cheaper than doctors. (A handful of store-based clinics are staffed by physicians; more typically, it's nurse-practitioners, masters-educated nurses with the ability in most states to write prescriptions.) The Deloitte Center for Health Solutions recently found that a typical clinic visit costs between $50 and $75, compared with $55 to $250 for a physician. One clinic even recently announced that it would waive sick-visit fees through 2009 for anyone who can prove that they are both unemployed and uninsured.
The main reason people go this route, though, is to save time. With names like MinuteClinic and Curaquick, these facilities promise vaccines, simple screenings and treatment for routine illnesses, like ear infections or pinkeye, with Jiffy Lube speed and convenience. In fact, while most doctors still live by the 9-to-5 credo, retail clinics offer evening and weekend hours that work better with Americans’ hectic schedules. And most take major insurance.
Still, despite promises of shorter waits, some clinics can have long lines or such strict treatment limitations that patients often leave frustrated. Physicians have raised concerns about whether store clinicians can know enough about their patients’ medical histories with such brief contact, especially those with multiple chronic conditions, like diabetes and depression.
And with only about half of U.S. in-store clinics currently profitable—and some drug chains deriving nearly 70 percent of their revenue from the pharmacy counter—critics wonder whether the clinics might lean toward overprescribing meds, a charge the chains deny. CVS pharmacy’s MinuteClinics, for one, says its protocol is not to prescribe antibiotics unless a patient meets a strict list of preconditions; for a sinus infection, for instance, you’d need to have been sick with symptoms like “yellow or green drainage” for seven days and unresponsive to over-the-counter drugs.
Clinic champions, however, remain bullish. “Years from now,” says Tine Hansen-Turton, head of the Convenient Care Association, an industry trade group, “we’ll say the clinics made Americans healthier because they let patients get care earlier in their illnesses, on their schedules.” Unsure what to expect, we decided to give this new trend a tryout, shopping our own minor ailments around these minuscule medical facilities.
As we pull into the strip mall in Riverside, Conn., we have no trouble finding the large MinuteClinic sign above the CVS pharmacy entrance. But inside is another story. The clinic is stashed in a far corner of the store; even standing 10 feet away, we miss it—until the pharmacist points out a nondescript door and, next to it, a small check-in kiosk.
Nearby, a flat-screen TV displays something we’ve never seen in a lifetime of doctor visits: a price list for the clinic’s 30-plus services. There are treatments for routine ailments like strep throat ($77), bladder infections ($67) and swimmer’s ear ($62), as well as wellness offerings like camp physicals ($59) and cholesterol screening ($45).
Checking in on a quiet weeknight around 7 p.m., we have the place to ourselves, so the nurse-practitioner ushers us right in for our flu shot. The clinic turns out to be roughly the size of a small kitchen pantry (85 square feet), with few trappings of a medical office—no visible exam table and no eye charts. Instead, there are a few plastic chairs, a supply cabinet and a desk, on which sit a computer and a bottle of hand sanitizer.
And while this location has a small sink, not every MinuteClinic does. Donna Jeskey, then operations manager for MinuteClinic’s New Jersey locations, says, “Using hand sanitizer between each visit, like our nurses do, is just as safe—if not safer—for the patient.” Still, the company says it is currently in the process of retrofitting all of its clinics with sinks.
As our nurse gives the syringe a preparatory flick, she tells us how busy she’s been, administering 50 flu shots alone the day before. Turns out, the majority of the company’s fall and winter business comes from flu shots—a service it aggressively promotes in stores with frequent loudspeaker ads and cardboard placards hanging over nearly every aisle.
To our delight, she also informs us that our insurance fully covers the $30 vaccine. “Nice insurance,” she says. “Do you work for a hedge fund?” Then she flits over to the pharmacy to chat up customers waiting for prescriptions. “I can take a look at your cold,” she offers.
At Take Care Clinics, tucked inside more than 340 Walgreens drugstores, CEO Peter Miller says the biggest challenge is long lines, sometimes stretching almost two hours at popular locations. And it turns out he isn’t kidding. Having developed a sore throat and fever the day after a major holiday, when most doctors’ offices are clamped up tight, we drive to the nearest Take Care Clinic, located on a busy commercial strip in suburban St. Louis. When we get there, the check-in kiosk announces a full two-and-a-half-hour wait.
Had we known that we could, we’d have called ahead to the company’s toll-free number to get the wait time and put our name in the queue. The company says it also staffs some clinics with a “concierge” to manage backups, but on this day there’s none in sight—just a nurse-practitioner pulling double duty. Between patients, she comes to the reception desk, takes our cell phone number and offers to call 15 minutes before she can see us (which she does). At least we don’t end up trapped with the usual collection of magazines.
Once inside the clinic, it feels like a doctor’s office. We find ourselves oddly comforted by the front-and-center exam table, the standing scale and wall-mounted blood-pressure cuff. After taking a fairly detailed history and examining us, the nurse asks what antibiotics we usually take, since we get frequent sinus infections; she then prescribes a different one, explaining that it will keep us from developing a drug resistance.
Two days later, following Take Care protocol, she calls to see how we are feeling and ask if we need additional information or a doctor referral. (The company’s clinicians get bonuses, in part, based on customer satisfaction ratings.) That follow-up is one way that, CEO Miller says, “we’re putting the patient first during every part of the process.” Of course, the company’s not above a little up-selling. Before we leave the office, the nurse suggests we consider a neti pot—one of Oprah’s favorite sinus remedies, she says. “It’s in aisle 10C.”
With consumers cutting back on everything from groceries to gas, spending on a vacation may seem downright frivolous. But opting to camp out in the backyard over hiking through the hills of Ireland this summer means you could be missing out on some extraordinary deals. Round-trip airfare to Ireland, for example, can now be had for under $500 -- less than half of what it would have cost last summer.
Thank all of those consumers who have been staying close to home for those deals. The Travel Industry Association projects that domestic leisure travel will decline by more than 2% this summer from last year. And travel abroad is expected to drop some 7% this summer. With so many empty rooms to fill, average daily rates at U.S. hotels are expected to be as much as 8% lower this year, according to Pricewaterhouse Coopers Hospitality & Leisure Practice. Cruise lines, meanwhile, are offering routes in the Caribbean routes that cost as little as $100 a day, says Kellie Pelletier, spokeswoman for Kayak.com, a travel search engine.
Also helping to make summer travel even more affordable this summer: lower fuel prices. Airline fuel surcharges, which are tacked on to passengers’ airfare to offset high fuel prices, were as high as $170 and $460 for domestic and international flights, respectively, last summer. Now, fuel surcharges on domestic flights have been mostly eliminated and international surcharges are down to $220, says Tom Parsons, CEO of Bestfares.com, a travel price comparison site.
Here are some of the destinations that travelers can visit on the cheap this summer.
Australia: More Flights Make Visiting "Down Under" Doable
Many travelers who want to visit Australia don't because of the prohibitively pricey flights. But this summer, the biggest hurdle to getting to kangaroo country may just be the jetlag. (Also, keep in mind that our summer is their winter.)
Part of the reason: more competition. Virgin Blue launched flights to Australia this year and Delta will start flying to Sydney on July 1. Delta, for example, currently offers a round-trip flight from New York to Sydney (travel dates from July 18 to July 28) for $725. Last year, airfare ranged from $1,800 to $2,200, says Parsons.
Once travelers arrive they'll have a lot more buying power than last year. The U.S. dollar is almost 20% stronger than it was last summer compared to the Australian dollar ($1 equals 1.22 Australian dollars; last June $1 equaled 1.04 Australian dollars). Through July 30, a stay at the Hilton Sydney for at least two nights starts at $219 (U.S.) per night, a 50% savings.
Photos: Getty Images
The Caribbean: Cruising the Islands at a Fraction of the Cost
Whether you want to chill out on one island or cruise through half a dozen in a week, you can do so at a significant discount. Carribean cruise prices are down 10% to 25% over last summer, says Kayak.com's Pelletier. An interior cabin on a three-night Royal Caribbean Bahamas cruise departing from Miami on June 12, for example, costs $149 per person for the entire trip, a 33% discount to the normal rate of $224 per person.
If you stick to one island, then you'll find some of the biggest discounts at places like Puerto Rico, the Dominican Republic and the Bahamas, all of which have frequent flights directly to and from the U.S., says Pelletier. A five-night stay at the Gran Melia Hotel & Resort in Rio Grande, Puerto Rico in a garden view deluxe junior suite between June 17 and 22 costs $719 per person, including round-trip tickets from New York. Originally, the room alone would have cost $1,629.
Ireland: Save Some Green Now That Fuel Fees Are Lower
Thanks to sky-high oil prices last summer, hefty fuel surcharges imposed on flights to Ireland made visiting the country a pricey proposition. But now the airlines have pulled back on those fees. Fuel surcharges on flights to Ireland from the U.S. have dropped from $270 last summer to a recent $14, says Parsons.
A round-trip flight from Dallas to Dublin, for example, leaving July 15 and returning on July 22 on American Airlines (and a transfer on Aer Lingus) costs $487. Last summer, the airfare would have been more than $1,000, says Parsons.
Once you arrive, you won't pay a premium price for hotels either. A stay in an executive room at the Fitzpatrick Castle Hotel in Dublin between June 25 and June 29 goes for a rate of $114 per night, down from $190.
Europe: U.S. Dollar Gains Ground; Travelers Gain Buying Power
Last summer, the weak U.S. dollar compared with the euro meant Europe was a no-man’s land for budget-conscious U.S. travelers. But now the dollar has gained some ground. And while hotels are still expensive, they are nowhere near as painful as they were last year.
At the Melia Roma Aurelia Antica hotel in Rome, a four-night stay beginning on July 17 in a standard room costs 226 euros (or $321), down from 296 euros ($420), a 24% discount on the hotel price. Last year, a rate of 296 euros would have cost you $460.
A four-night stay in a double room at Hotel Nouvel in Barcelona, Spain in July costs 348 euros (or $494), down 27% from the original price of 478 euros ($679). Last year, 478 euros would have cost $743.
Direct flights to some of the more popular European summer destinations will still be a little pricey (one round-trip flight from New York to Rome on Delta, for example, costs $790), but there are ways to cut costs. Flights to Frankfurt, Germany are fairly cheap right now -- a nonstop Delta flight from New York to Frankfurt in mid-July costs $517.
Travelers can fly to Frankfurt and connect to Ryanair, which offers a flight from Frankfurt to Rome for five euros (or $7) and save 34%.
U.S.: Homeland Hotspots Are Hungry for Visitors
Don't feel like trekking overseas? U.S destinations that have been hit hard by the recession are offering great deals on lodging and other amenities. Rooms in Miami, for example, are going for half the normal rate, says Adrienne Chiron, president of Travel Trackers, a Florida-based travel agency. And in Las Vegas, where hotel occupancy rates are down more than 30% during the first quarter, travelers are snagging packages that include discounts at spas and restaurants, says Carl Schwartz, chief travel officer for CheapFlights.com, an airfare search engine. Here are some of the deals you can find:
Vegas: From June 28 through July 2, stay at the South Point Hotel Casino and Spa and pay $70 a night for a deluxe king room and get the second night free, breakfast buffet for two and 25% off a spa treatment. Offer must be booked by June 12, is available through Sept. 10, from Sundays through Thursdays.
Miami: Stay at the Chesterfield Hotel Suites & Day Spa in South Beach between June 9 and 11 and pay $89 per night for a junior suite. The regular rate: $120 a night.
Hawaii: Stay at the Aston Waikiki Beach Hotel in Oahu between June 12 and Aug. 23 and pay $129 a night for a standard room, a 37% discount off the original.
More Efficient: Q1 Productivity rises above consensus.
Back in Black: Equities climb after data..
Bigger Boxes: Wal-Mart to add 22k jobs in '09.
Regulation Station: Reform plan coming June 17.
The Lowdown
Surprising labor data have stocks aimed toward their third session of gains in four days this week.
The major indexes were higher Thursday, as traders welcomed two unexpectedly rosy labor reports and another jump in energy prices. By 9:40 a.m., the Dow Jones Industrial Average had risen 14 points to 8689. The Nasdaq had picked up 9 at 1835, and the S&P 500 had climbed 4 to 935.
First-quarter productivity growth was revised up to 1.6%, twice the prior growth estimate and above economists' estimates. Separately, initial jobless claims came in roughly in line with estimates, but continuing claims -- a measure of the number people drawing unemployment benefits for multiple weeks -- fell for the first time since the week of Jan. 3. Tomorrow, the Commerce Department will release its monthly jobs report.
In Washington, the Treasury plans to draw back the curtain on its new regulatory policy for the financial sector on June 17, Reuters reported, citing an anonymous source. The following day, Treasury Secretary Timothy Geithner will offer more details of the plan in testimony to be read before the Housing Financials Services Committee.
Oil prices got another big boost. By 9:14 a.m., crude traded up $1.98 at $68.10 a barrel.
World markets were mixed. In Asia, Japan's Nikkei dropped 0.8%, while Hong Kong's Hang Seng lost 0.4%. In Europe, the U.K.'s FTSE stood down 0.2% in afternoon trading.
Trading has been erratic this week. After Monday's surge, traders sent the market a bit higher Tuesday and a moderately lower on Wednesday, as new economic data and comments from Federal Reserve Chairman Ben Bernanke did little to demystify the market's uncertainty.
Corporate News
Boeing (BA) and Airbus will compete for a contract to build 150 new aircraft for United Airlines (UAUA), The Wall Street Journal reported, citing anonymous sources. The contract could be worth more than $10 billion to the winning firm.
Wal-Mart (WMT) will generate more than 22,000 new jobs in 2009 through store growth and expansion, the nation's top retailer said. Wal-Mart's stores will create more than 1,000 jobs in each of the following states: Arizona, California, Florida, Michigan, New Jersey, South Carolina, Utah and Virginia.
The Economy
First-quarter productivity was revised to 1.6%, up from an earlier reading of 0.8%, the Labor Department said. Economists had expected first-quarter non-farm productivity growth to have been revised to 1.2%,. REPORT
Initial jobless claims slipped to 621,000 last week, down from a revised 625,000 in the prior week, the Labor Department said. Economists had predicted the number people seeking unemployment benefits for the first time would slip to at 620,000. REPORT
The pick-up in the housing market is unlikely to last, Westpac economists are warning.
Chief economist Brendan O'Donovan and research economist Dominick Stephens predicted low sales volumes and gentle price declines in the second... Source: New Zealand Herald - Business | 4 Jun 2009 | 3:00 am
Vital export earner Fonterra is being hit with a double whammy of weaker international prices and a stronger exchange rate.
The average price of whole milk powder in Fonterra's monthly online auction yesterday was down 12 per cent... Source: New Zealand Herald - Business | 4 Jun 2009 | 2:00 am
The latest ANZ Commodities prices index shows the recent strength of the New Zealand dollar means our exporters have been unable to enjoy a 6.5 per cent increase in world commodity prices during May.
It is the third month in a... Source: New Zealand Herald - Business | 4 Jun 2009 | 1:30 am
The ringleaders of the plot calling for the Prime Minister to resign tried to keep their identities hidden by creating an anonymous e-mail for disgruntled Labour MPs to sign in secret. Source: Latest Business News from Times Online | 4 Jun 2009 | 12:19 am
Dairy Farmers of Britain, the milk cooperative, has gone into receivership, putting 2,200 jobs at risk, after losing a contract with Co-operative stores.
Barack Obama has signalled he would be prepared to scrap his long-standing opposition to the 'individual mandate' that would legally require Americans to get health insurance Source: Financial Times - US homepage | 3 Jun 2009 | 11:52 pm
AP - Former lobbyist Jack Abramoff and the Justice Department are disputing a tax refund he recently received worth more than $500,000 and whether it should be used to pay court-ordered restitution or his family's massive debts.
$$$ Mr. Fields is chief executive of Juridica Capital Management. which runs a fund that invests in one side of a lawsuit in exchange for a share of any winnings.
After solid gains on the past three trading days, the New Zealand sharemarket was down in the first few minutes of trading this morning, in the wake of tumbling stocks in the United States.
Around 10.15am the benchmark NZX-50 index... Source: New Zealand Herald - Business | 3 Jun 2009 | 10:41 pm
As expected, the FDIC confirmed today that it is delaying the initial test of one of its toxic asset programs.The successful bank capital raises and renewed investor confidence in the banking system have provided FDIC Chairman Sheila Bair with enough evidence that the Legacy Loan Program can be placed in a holding pattern for now.
As a consequence, banks and their supervisors will take additional time to assess the magnitude and timing of troubled assets sales as part of our larger efforts to strengthen the banking sector
Banks were able to take advantage of the nearly vertical movement in the equity markets and opportunistically raise capital by equity and debt offerings, thereby avoiding having to sell toxic assets at distressed prices.
AP - Sallie Mae CEO Albert Lord said Wednesday he expects loan charge-offs at the student lending company to peak in 2009 and remain high next year. Source: Yahoo! News: Business | 3 Jun 2009 | 10:27 pm
AP - How far the Dow Jones industrial average has fallen or advanced each trading day since Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy protection on Sept. 15. Since Lehman's fall, which touched off a paralysis of the credit markets and deepened the recession, the stock market has gone through an extended period of volatility that subsided during December but that has returned in 2009. The numbers are the closing levels for the Dow: Source: Yahoo! News: Stock Markets News | 3 Jun 2009 | 10:09 pm
General Motors, seeking to shed assets to emerge from bankruptcy, has agreed to sell the Hummer brand to China's Sichuan Tengzhong Heavy Industrial Machinery.
Tengzhong would assume Hummer's dealer agreements and a senior management... Source: New Zealand Herald - Business | 3 Jun 2009 | 10:00 pm
And apparently CNBC aired it this morning on Squawk Box. Which is cool, if you want to give rabid Becky-stalkers the impression their advances are welcome in Englewood Cliffs, and that they should not be bashful about walking right up to the building and seeking out B. Quick. It's cool if that's the message you wanted to send.
AP - Actions taken by the Securities and Exchange Commission at the height of the market turmoil last year appear to have reduced abusive short-selling, but the agency should provide clearer guidance to the brokerage industry for applying the rules, congressional auditors concluded in a report issued Wednesday. Source: Yahoo! News: Stock Markets News | 3 Jun 2009 | 9:32 pm
AP - The ups and downs of the Dow Jones industrial average may get most of the attention, but there's another stock index you should be watching: the Standard & Poor's 500, which offers a broader sense of how stocks are doing and determines the performance of many mutual funds. Source: Yahoo! News: Business | 3 Jun 2009 | 9:28 pm
AP - The ups and downs of the Dow Jones industrial average may get most of the attention, but there's another stock index you should be watching: the Standard & Poor's 500, which offers a broader sense of how stocks are doing and determines the performance of many mutual funds. Source: Yahoo! News: Stock Markets News | 3 Jun 2009 | 9:28 pm
AP - Investors sold off Wednesday, breaking the stock market's four-day rally after U.S. data on the services industry and factory orders came in below forecasts. Factory orders actually rose in April, but the report was a disappointment to investors, who had expected a larger increase. Source: Yahoo! News: Stock Markets News | 3 Jun 2009 | 8:54 pm
Anybody want an overpaid job? aimeesblog/Planet Money Flickr pool
On today's Planet Money:
If you've felt, say, in the last nine months or so that people who work on Wall Street make too much money, we've got a guest for you. Ariell Resheff, an economics professor at the University of Virginia, says you're right, and he can prove it.
On the other hand, we got a message on our apology line (202.371.1775) from a mortgage industry veteran who says he's at least a little bit responsible for the financial crisis. And he's not sorry.
Bonus: Psychic foreclosure detritus for sale in Seattle.
I live in Seattle, WA and there was a Psychic that rented a place across the street from my apartment. They became behind in their rent, so their landlord evicted them and he is now he is selling their items for help pay some of the back rent.
AP - Federal regulators have not done enough to ensure that shareholders are aware of material risks to companies from greenhouse gas emissions, according to a pair of studies released Wednesday by environmental and investor groups. Source: Yahoo! News: Stock Markets News | 3 Jun 2009 | 8:40 pm
Among the first of many empty dealerships. justice_nd
Reader justice_nd sends us this picture from Atlanta, where the Atlanta Chrysler Jeep Dodge dealership is one of 789 dealers that have until June 9 to close down. Empty dealerships like this one are likely to become a common site in the coming weeks. We're looking for pictures and stories of what it's like when hundreds of dealers close down.
Add your own photos of empty dealers to our Flickr pool or Facebook page, Twitpic them and make sure to let us know on Twitter, or e-mail them.
If you're anything like me, you've waited until the last 72 hours to cram for this beast of a cavity search on Saturday (the idea that you couldn't master the hordes of information at the last minute were, frankly, a blow to your ego). Now, with T minus three days, there's a legitimate concern that not only will this weekend's administers be doing this without lube, but that there's going to somehow be a tire iron involved. Your ability to form coherent sentences has been greatly compromised, and when people talk to you about dinner plans you wonder if they know you're not listening to a thing they've said, but rather of stabbing a homeless person for not being able to remember how to calculate the portfolio variance with probabilities.
Clearly, I feel your pain. Because there's comfort in numbers, I'm asking (begging) you to use this as a platform for venting. Commiseration and all that jazz. We're all miserable, let's be miserable together.
The above comes from a folder of documents I have on my desk for this big story we've been working on. It was scribbled down for me by Jim Finkel, who helped put together some of those complicated collateralized debt obligations (now known as toxic assets.) Finkel runs a company called Dynamic Credit, and he was explaining how the CDOs started to self-destruct when the subprime market fell apart.
Finkel told us he remembers watching the computer screen as the rating agencies lowered their ratings for hundreds of mortgage bonds. The phones were unusually quiet, he told us. Everyone was watching the screens. It was, he says, "like some kind of whispering death wind blowing through the room."
It's been argued that the rating agencies, had they done their job, could have put the brakes on the whole crisis, by not giving so many of these bonds their top AAA rating.
We'll have a story this Friday on Morning Edition, and a much longer one this weekend on This American Life.
The summer of compensation legislation is almost upon us and the Swiss have radioed in with some general guidelines for how they intend to deal with the issue. It should come as no surprise that the main focus is on longer-term, performance-related payment structures that look to penalize individuals whose short-term gains turn into longer term losses. However FINMA, the Swiss regulator, did stop short of establishing guidelines to flat out restrict compensation. According to FINMA, "From a legal perspective, FINMA is not authorised to restrict the remuneration paid to employees. Indeed, this would not be a sensible option." Barney Frank disagrees.
With all of the grim news coming out of the American economy, its neighbor to the north isn't doing all that badly. A Canadian company is set to take over GM's European operations. And Canadian banks are swooping in to buy up failing US banks at everyopportunity. Martin Hutchinson over at Breaking Views has an interesting take on Canada's role:
Canada's biggest bailout investment to date is General Motors' local arm, not an indigenous company. Its banks are relatively sound; and its recession is shallower, and its budget and payment deficits smaller, than those in the US. With an economy strong in fast-appreciating resources and a fiscally careful government, Canada looks a safer haven than its southern neighbor in times of turmoil.
How much someone gets in an unemployment check -- and even whether they're eligible at all -- depends a lot on where they live. Mitchell Hartman reports. Source: Marketplace | 3 Jun 2009 | 7:16 pm
If you want to open up a store, but worry about the rent -- you could always build one in a virtual world like Second Life.
Indiana University is set to host a week-long workshop to teach people how to do exactly that.
"A lot of people think you can just put these places together overnight, because you can get an island in Second Life and fairly soon start to put buildings and stuff up," said Lee Sheldon, assistant professor of telecommunications at Indiana University and the designer of 20 video games. "It's far more complicated than that."
Some economists have studied these virtual worlds, which have their own currencies and markets.
I interviewed one of the workshop organizers Edward Castronova in the early days of these communities. He talked about his rise from poverty to middle class in the virtual world Everquest. (He had to begin by killing rats and selling their hides.) Castronova, at the time, had trouble getting his research published. You can listen to our talk here.
The workshop, by the way. You gotta pay real dollars.
Until July 15, registration will cost $2,750. After Jul 15, registration will increase to $3,150.
I think I came across a possible Planet Money Indicator: "5 over 2 days." That's the number of car salesmen at my local Ford dealership who called me in response to ONE E-mail I sent through the website inquiring about test driving a new model.
The E-mail was the basic message sent through their website tool. You click on the car that interests you, they find the dealership closest to you, and you can include a short note with any specifics. My specifics were "I'm interested in a lease and want to test drive the Hybrid."
I finally had to ask them to stop calling because I wouldn't be able to schedule anything until the weekend. The whole thing was rather shocking, honestly, but in light of the GM bankruptcy, not really...
Send your Planet Money indicators to planetmoney@npr.org.
Remember the good old days? You know, when you could walk straight from the graduation platform to a cushy job with a $5,000 hiring bonus?
That is so 1998, you might be saying. You’re right. Job seekers have replaced corporate minions in the rat race, sprinting like mad for rare openings. Candidates need to shine to even be considered.
What if you haven’t interviewed for a job in 10 years? Or you just graduated, and want to stand out? 360JobInterview.com knows your pain. The company’s 300+ HR professionals are intimate with layoffs, some even on the receiving end. Their jobs depend on helping you succeed in finding yours.
All you need to tap 360JobInterview.com’s resources is a webcam and Skype. Once you have the goods, you match yourself up with an HR interview coach in your field (choose from more than 55 job categories). You send your coach your resume and job description, then link up with him/her on a Skype videoconference. Your coach interviews you just like a real company gatekeeper would. After the interview, s/he gives you feedback on the interview.
Your in-depth, personalized training session should give you the ability to make a keen first impression during your real interview. If you need field-specific career coaching, resume writing, or follow-ups, the company offers that, too.
Business Pundit interviewed 360JobInterview.com CEO Jeff Garber for his take on the company, the experts, and the job-search process.
BP: I noticed that your interview coaching sessions are one hour. How much can a customer accomplish in one hour?
A lot of ground can be covered in that 1hr. Before an interview session, we ask people to upload their resume and a job description. That way, the coach can really get a better understanding of the candidate.
During the hour session, probably 40-45 minutes is an actual interview. The other balance of time addresses observations, insights, and coaching. For instance, maybe you’re going for journalism, and the question was “can you tell me what makes your journalistic style unique?” If the response was flat, or really didn’t sizzle as far as highlighting your skill mix, the coach can point that out and help you work out an appropriate response. At the end of the session, we provide a written evaluation highlighting what was covered in that session.
In most HR situations, the average interview is about 20 minutes. Ours will be a lot longer and much more in-depth. Afterwards, we will tell candidates what close family members and friends don’t tell you. When you go into a mock interview with a friend, they don’t want to upset you, they don’t want to find the flaws, so they’ll say you know what, you’re doing great, that’s good. That’s not helpful in this (competitive) environment.
We can cover a lot of ground when it’s all about you.
BP: The client can also save his/her interview and look over it again and again, right?
Yes, that’s important for body language. Sometimes the person isn’t making eye contact, or their body language is off. It can be scary to look at yourself on video, but the coach can point out the fact that you’re not making good eye contact, or that you’re fidgeting too much and it looks you’re nervous. That’s why a webcam interview by far is much more important than a traditional telephone interview.
BP: What demographic has been your best customer?
Sad to say, everyone. We have people who have lost their jobs after 5, 10, 15 years of being in market. We have people who are just graduating from school and having incredible difficulty getting an interview in fierce competition. Then there are folks who have to come out of retirement because their retirement funds have dwindled. It’s across the board.
For every job that’s available, there are between 300-500 applicants. Only a few of those get an interview. The interview is more key than ever before. You really have to set yourself apart in this market, and that’s not easy to do
BP: I’ve heard that most people getting laid off are average employees, the C-students of employees. Is that the case, in your opinion?
In my opinion, that’s not the case. The brightest and best as well as the mediocre are laid off. I think that would be an incorrect statement, that it’s just the mediocre who are laid off, because for instance you can look at a company like Google, voted the #1 place to work, they have access to the brightest and the best. This is the downturn, and they’re laying off people. You think they’re laying off people who are not the brightest and the best? I disagree with that statement. I think that everyone is affected, not just the ones that are so-so.
BP: Can you tell me about a success story from your program?
I think the number one success stories are people walk away saying you know what, interviewing is scary to begin with, I have more confidence knowing that 1) I was proactive, doing something about it (by engaging services), 2) the information, coaching, and critiquing provided by the coaches was extremely helpful because they want you to succeed, and it takes a pro person to do that. Candidates walk away with confidence and thinking you know what, I can get this job, which is huge.
Also, this is the first time, probably since the Great Depression, that people are looking for jobs not to better themselves. Years ago, people made job changes because they wanted more salary, maybe a better work life, whatever the case may be. Now, people are actually looking for jobs because they need them. One of the things the coaches work with them on is it’s important for you not to come across as though you’re desperate for a job. No person likes to hire someone who is. Two, you may have been a high-level executive and now you’re going for middle management. You don’t want to come off as though this job is beneath you, because that will be perceived negatively as well.
BP: Your career experts are mostly HR pros. In most companies, HR only provides a pre-screening interview, while hiring managers make the final decisions. How do your HR experts help clients ace interviews in their fields?
Usually the hiring manager and the HR person work hand-in-hand, but the HR person is very quick to ascertain who gets through the door and who doesn’t. Before you ever get through the door to a hiring manager, you have to go through the HR gatekeeper.
Also, sometimes a hiring manager has myopic view of things, and is just interviewing for a specific role or position. HR people interview five days a week, 6-7 hours a day. They really understand their company’s overall need. The hiring manager may be very specific to a certain department, but not look for the same skill mix an HR person would look for.
With downsizing, there is less headcount, so HR people are looking for talent that is very flexible and more of a team player, more versatile for working several positions, not just one. Because they understand one specific company’s environment, and what is needed, they’re able to provide a deeper interview across the board as far as analyzing what a candidate is, what their work ethics are, and how they can work with people.
BP: How do you find and keep your HR experts?
Brad Kaunitz, our senior recruiter for 360, he has done a phenomenal job placing ads with SHRM (probably the world’s largest HR organization). That provided a lot of leads. The people we ended up hiring—from major corporations like Dell, Time Warner, GM, AmEx, Marriott, VW, and Microsoft—were also wonderful for networking. We’ve been very flattered because our recruiters love the concept of what 360 can do, as well as the flexibility they have of working with clients.
Lots of these HR folks are victims of the economy, and they’ve been laid off themselves, so not only do they have compassion, they can speak firsthand about what type of anxiety is related to it. I think they bring even more compelling energy and drive to make things happen for candidates.
BP: Do you have any plans to evolve your business model if the economy gets better and demand goes back down?
Our business model isn’t based on the current situation, but the long term. Independent of that, the Secretary of the Treasury said that we may begin to pull towards the end of the year, but the last component that will come out is jobs.
I think it’s going be a long time until we get to the higher levels that we’re used to. More importantly, I think that the job market will never be the same. I think that our approach will probably change the landscape of how jobs are approached. I think that as you raise the bar for the candidates to be more savvy and better interviewers, there will always be a fresh supply of folks who feel the need to up their game as well. I don’t see that as being fad.
Our near-time goal is to be scalable, because we’ve had a lot of international interest. So we want to develop teams all around the world.
Jeff Garber is the CEO of 360JobInterview.com. Learn more about 360JobInterview.com at their website or blog.
NGO Transparency International recently released its 2009 Global Corruption Barometer, which surveyed about 73,100 people from 69 countries between October 2008-February 2009. Among the findings:
Worldwide:
–53% of people interviewed think the private sector is corrupt.
–Political parties and the civil service, however, as seen as the most corrupt domestic institution worldwide. The media was seen as the least corrupt.
In the US alone:
–The legislature is seen as the most corrupt institution.
–61% of people think the private sector uses bribes to influence government policy, law, or regulation.
–26% of people think the government’s efforts to fight corruption are effective.
One more interesting point:
–Half the people interviewed expressed that they’d be willing to pay a premium to buy from “corruption-free” companies. The percentage for the US alone is even higher.
That last point makes me think that “Buy Local” campaigns would do well to add “Corruption Free” to their marketing efforts.
Who should regulate our financial system? Commentator Robert Reich argues there should be one financial regulator to prevent the kind of fiscal meltdown that sent the U.S. into this recession. Source: Marketplace | 3 Jun 2009 | 5:00 pm
Fallout from the British lawmakers' expense list scandal continues. Four government ministers have recently quit and more may follow. Stephen Beard reports. Source: Marketplace | 3 Jun 2009 | 4:59 pm
France is trying to boost its economy with infrastructure projects, government programs, and food and wine. Sally Herships reports. Source: Marketplace | 3 Jun 2009 | 4:59 pm
In 1989, Chinese troops attacked pro-democracy protesters in Beijing's Tiananmen Square. Shanghai bureau chief Scott Tong talks with Kai Ryssdal about how the democracy movement is doing in China now, some 20 years after the attacks. Source: Marketplace | 3 Jun 2009 | 4:59 pm
Microsoft's new search engine Bing is the software giant's boldest attempt yet to replace Google as king of the search. Will it work? Sam Eaton reports. Source: Marketplace | 3 Jun 2009 | 4:56 pm
Thousands of GM dealers received a letter this week giving them a choice -- give up control over a lot of their businesses or face closure. Steve Henn reports. Source: Marketplace | 3 Jun 2009 | 4:56 pm
Federal Reserve Chairman Ben Bernanke is warning about the growing deficit, which could reach $2 trillion this year. But there are signs that spending has helped rescue the U.S. economy. Why's he so worried now? Amy Scott reports. Source: Marketplace | 3 Jun 2009 | 4:56 pm
This February, the Grandview Coffee Shop in Vassalboro, ME became the nation’s first topless coffee shop. Now, the place has mysteriously burned down. The Baltimore Sun’s Jay Hancock has more:
Donald Crabtree thought a topless coffee and doughnut store was just the way for a merchant to fight the recession, so he opened the Grandview Topless Coffee Shop in Vassalboro, Maine, a few months ago. The place drew legions, but last night it burned down, according to the Boston Globe.
No word yet on suspected arson, but apparently not all the good Mainers were happy about the Grandview’s dress code. Last month a state trooper was called to the Grandview after one of the waitresses went outside in her uniform, according to AP. The Vassalboro town fathers/mothers are scheduled to vote on an ordinance regulating topless restaurants on Monday.
Who wouldn't want to live in the lovely "Plastics Zone?" uniquebuildings
America's eye is on Saudi Arabia today as President Obama kicks off his trip to the Middle East. The Arab nation's economy has taken a bit of a dip since oil revenues have fallen, so Saudi King Abdullah is trying to branch out a bit. They're building four new 'Economic Cities' in an attempt to diversify the Saudi economy.
Each city is pre-planned to foster high-energy industries like plastics, aluminum, and steel. The largest of these custom-built metropolises, the King Abdullah Economic City, already has $27 billion in private sector investments. It's set to feature such delightful-sounding neighborhoods as "Plastics Valley" and "The Education Zone."
The Saudi government had originally planned to built six cities, but due to the economic downturn, two of them have been canceled. Much of the private investment in the cities comes from family-owned business empires that took out astounding loans during the oil boom to foster their own growth nd are now suspected of having huge losses due to the oil bust.
One of the most prominent Saudi billionaires, Maan Al-Sanea, a stakeholder at HSBC, entered restructuring yesterday after defaulting in his loans. If this trend continues and family investment dries up, Saudi Arabia could be left with half-built cities.
Sonic is offering free root beer floats today between 8pm and midnight. Find out more here. Be sure to call your local Sonic to make sure they’re participating.
"How would you like to spend more time with your family -- like the next five years?" is not the kind of offer employees usually want to hear from their bosses in the depths of an economic crisis.
But BBVA, Spain's second-biggest bank, has posed that question to staff as part of its latest cost-cutting drive. It is hoping at least some of its 29,954 Spanish employees agree not to come to work for up to five years -- in exchange for nearly a third of their usual salary and a guaranteed job when they return.
Admittedly, most of us couldn't make it on a third of our salaries alone. But if you're anything like me, you're thinking, hey, with five semi-free years I could...
It's early yet, but odds for Press Release of the Day are on this one, from the University of Central Florida:
In his national quarterly forecast released this morning, Sean Snaith says the pace of the economic downturn and anticipated recovery looks like the slanted handle, bowl bottom and prolonged spout of a traditional sauce serving dish.
"It has that shape," says Snaith, director of UCF's Institute for Economic Competitiveness, poking fun at the more typical descriptions of recession shapes and graphs.
"Forget the V-shape or other letters that economists talk about when they describe the economy," he adds. "This will be a 'gravy boat recession' with a steady and gradual recovery. After touching bottom in the third quarter of 2009, we'll see GDP slowly climb like a gravy boat's spout."
Yesterday, Google released YouTube XL, a version of YouTube compatible with any device that connects to your TV, including the Wii and PS3. Unlike Hulu, YouTube XL doesn’t show many actual shows or movies. But if Google partners with film studios, TV networks, and ad networks, YouTube XL may become a closer Hulu competitor. The New York Times has more:
(YouTube XL) can be controlled not only with a keyboard, but also with some remote controls. And it can be made to display a series of clips continuously, a bit like photos on a digital photo frame. The viewing experience is especially striking for high-definition videos watched in full-screen mode on a TV set.
YouTube’s move is the latest in a string of developments that aim to bring Internet content to television screens and to allow users to interact with that content from their couch. It comes just a week after YouTube’s top online rival, Hulu, unveiled a desktop app that can be controlled through a remote.
However, many content providers, already nervous about their content being watched online, have been reluctant to allow television viewing of full-length episodes they post online. As a result, YouTube XL, which stands for “YouTube extra large,” does not have many of the full-length shows from premium partners that are available on the regular YouTube service. The company said it is working out rights issues with content owners.
This looks like a precursor to more intense video wars. Right now, technology may limit mainstream use of YouTube XL and Hulu in the living room–neither are compatible with most remote controls, and TVs don’t come with Web browsers. But when Google gets its act together with better content, and web-based VOD becomes more integrated with standard living room hardware, the competition could grow intense.
Adam Davidson has been following the North Koreaneconomy, such as it is. The Communist nation is among the world's most isolated countries, with little known about its inner workings.
But as you can see in this covert video of a market, from 2005, North Korea is also in many ways a familiar place -- with people buying the makings of a next meal, and vendors making time for lunch, and a baby crying.
