Let Jim Cramer Help Show Dad How Much You Care

Have you been looking to sever all ties with your father? You've decided, for whatever reason,* that you're just completely done with the prick, but instead of just calling him up, telling him off and slamming down the phone, you need something...bigger and so much worse? Consider letting Jim Cramer get the job done. He's hosting a Father's Day edition of Mad Money on Friday and wants you and Dad to join the live studio audience, or watch from home. Either way, we figure it's the perfect gift for the son or daughter trying to express just how much "I hate you, you ruined my life!" to the old man. For his part, JC hopes "this special educates viewers and brings families closer together" which it might, in the same way the prisoners going through horrific torture tend to form close bonds. So, that's something to consider. If you've got a more fool-proof gift idea that doesn't comes with such risks, let us know at this time.

*Which you should feel free to get off your chest. Think of Dealbreaker as group therapy.

Sponsored Topics: Jim Cramer - Mad Money - Father's Day - Father - Home
Source: Dealbreaker | 16 Jun 2009 | 3:47 pm

Rating Agencies, Appendix 1

In our efforts to understand what went wrong at the credit rating agencies we visited Frank Raiter who had worked at Standard and Poors but is now far from Wall Street, happily clearing land for a farm in rural Virginia and has a turtle in his office.

Raiter has been critical of his former employer, who he says was turned down his requests to get better data and build better models. S&P disputes that.

In the interest of letting you all make up your minds, here's a link to video of an interview and lecture Frank Raiter gave at Cornell University.

And here's part of a response S&P gave to Congress after Raiter testified on Capitol Hill.

As we understand it, Mr. Raiter's claim is that S&P refused for commercial reasons to adopt an allegedly superior "new" model to analyze the credit risk of mortgage loans underlying certain RMBS transactions. The allegation is baseless.

While S&P did undertake work on developing equations based on large volumes of loan data earlier this decade, the effort ultimately did not bear analytic fruit. Contrary to Mr. Raiter's allegations, the reason was not budgetary or commercial. Instead, no analytical consensus was ever reached that the work produced results that could be relied upon in S&P's ratings analysis. In fact, despite continual testing and review, this "model" repeatedly produced fundamentally counterintuitive -- and, in the view of our analysts, insupportable -- results. For example, the results predicted that adjustable rate mortgages were less likely to default than fixed rate mortgages. Subsequent history has obviously dispelled that notion.

Moreover, contrary to other charges Mr. Raiter has made, S&P has repeatedly updated the models it does use to analyze these loans to reflect new information, including new risk factors we see. Indeed, since 2001, S&P's LEVELs model has been updated 16 updates to LEVELS we have implemented since 2001, 10 of which have occurred after Mr. Raiter left our company in 2005. A number of these updates specifically addressed the increased risk we saw with subprime mortgages. In retrospect, as we have repeatedly acknowledged, it is clear that some of these mortgages have performed worse than we forecasted they would. However, to suggest, as Mr. Raiter has done, that this in any way resulted from an unwillingness on S&P's part to try to take appropriate action is entirely unfounded.

You can read the Securities and Exchange Commission's investigation into the rating agencies.

And here is Frank Raiter's testimony before the House Committee on Oversight and Government Reform.

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Source: NPR Blogs: Planet Money | 16 Jun 2009 | 3:22 pm

Who Wants An MD-Level Investment Bank Job?

Because there are a gaggle of available ones as of yesterday. Up front, the catch is that you'll have to work at UBS but it's a small price to pay when you factor in the second to none tax advice you'll be getting on the house. Apparently the Swiss bank's global head of healthcare, Benjamin Lorello, was recently hired by Jefferies and somehow convinced most if not all of his team's senior bankers to come with. Supposedly the junior bankers on the 36th floor of 299 Park were unaware they were being abandoned until yesterday, when none of their superiors showed up. So, that's sad, in a three-legged dog with cancer way, but on the bright side, what with the absence of Lorello (he of "asses at desks by 9AM or I'll make you wish you were never born" fame), everyone will be able to take the summer a little easier, and mosey on in whenever they want (assuming there aren't any more cuts planned for the near future).

Related: Your Tardy Ass Will Not Be Tolerated At UBS--Fraud, Money Losing Begin Promptly At Nine A.M.

Sponsored Topics: Business - UBS AG - Bank - Banking in Switzerland - Investment banking
Source: Dealbreaker | 16 Jun 2009 | 3:13 pm

Structured Products Back In The Line Of Fire

It seems small retail investors are still a glutton for punishment. A number of retail investors learned a harsh lesson last year when the convertible feature of their reverse convertible bonds kicked in and their high yielding bonds morphed into rapidly sinking equities. There are certain varieties of structured products that retail investors can take issue with because they weren't fully aware of a seemingly minor structural mechanic that came back to bite them. This isn't one of them. Even by retail investor standards, the key mechanic, the knock-in level, is spelled out clearly.

Sponsored Topics: Business - Structured product - Stock - Line Of Fire - Investor
Source: Dealbreaker | 16 Jun 2009 | 3:11 pm

Wall St stages modest rebound on strong data

US stocks made a modest rebound following the previous session's sell-off
Source: Financial Times - US homepage | 16 Jun 2009 | 3:03 pm

Koenigsegg Buys Saab

GM found a home for Saab. Koenigsegg Automotive, a Swedish sports car manufacturer, signed a memorandum to buy Saab. The deal is backed by $600 million in funding. The Financial Times has more:

Two people close to the sale talks told the Financial Times last week that in addition to the Swedish government-backed loan, GM was putting about $500m into the brand, including production tooling for Saab’s new 9-5 model to the spun-off brand, plus cash in its account worth about $150m.

The bidders were said to have pledged a smaller amount of cash and contingent financing, to be repaid to GM if they succeeded in making Saab viable. GM said it would continue to provide Saab with vehicle architecture and engine technology during an unspecified “defined time period.”

Saab sold 98,000 cars worldwide last year, and was widely seen in the industry as neglected by GM during its 19 years of involvement with the brand. The US carmaker, which bought half of Saab’s shares in 1990 and 100 per cent in 2000, failed to make it profitable, and said it was selling the marque in February as part of a plan to pare down its operations to just four brands.

Industry analysts have questioned how the brand can become viable on its own when all the world’s large-scale, mass-market producers are losing money. Koenigsegg sold just 18 bespoke custom-built supercars selling for about €1m each last year, and questions have also been asked about whether its skills can be successfully applied to a midmarket premium brand.

Koenigsegg produces high-end sports cars, including the CCX supercar featured in the photo above. The Koenigsegg CCR boasts the fastest speeding ticket in the US, according to a juicy, but unverified claim. If anyone has the capability to do cool things with the Saab brand (assuming they keep the brand intact), it’s Koenigsegg.

The questions the analysts quoted above pose are valid economic questions. But for the sake of the car, this move is a winner.

Source: Business Pundit | 16 Jun 2009 | 3:00 pm

Why oil is on the rise again

Ask a group of oil analysts about the recent surge in crude costs and here's the consensus answer you'll get: Prices have run up too far, too fast and they aren't supported by the fundamentals.
Source: Business and financial news - CNNMoney.com | 16 Jun 2009 | 2:59 pm

Upgrades lift Tenneco, Magna and other suppliers

Now is the time to buy both Tenneco Magna International shares. So says a Wall Street analyst who foresees a rebound in car sales starting shortly in Europe and then carrying over into North America during the third quarter.

Source: MarketWatch.com - Top Stories | 16 Jun 2009 | 2:58 pm

Best Buy shares drop amid profit slump

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 16 Jun 2009 | 2:49 pm

Five reasons to Twitter away in earnest

The applications of Twitter are different and varied, and using it effectively doesn’t always come easy to people dabbling with the tool.

Source: MarketWatch.com - Top Stories | 16 Jun 2009 | 2:47 pm

Builder stocks treading water so far this year

Home-builder shares get a boost from better-than-expected housing data, but the volatile sector is struggling to stay in the black for the year.

Source: MarketWatch.com - Top Stories | 16 Jun 2009 | 2:47 pm

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

Stocks expected to move significantly in trading on Tuesday include the auto-parts suppliers and telecom-service providers as well as DynCorp, Elbit Systems, Gannett, La-Z-Boy, Smithfield Foods and Tyco Electronics.

Source: MarketWatch.com - Top Stories | 16 Jun 2009 | 2:44 pm

Gazprom warns on delays to key field

The world's largest gas producer, Gazprom, has warned that it could delay development of the crucial Bovanenkovo field
Source: Financial Times - US homepage | 16 Jun 2009 | 2:40 pm

Are You Living In A Tent In Your Friend's Backyard?

According to the results of our last survey, at least half of you should be nodding "yes." For those checking the "hell no" box, consider yourselves lucky, although, completely objectively, the expression on these kids' faces makes it look like they're having a pretty good time, which can probably be attributed to DVDA activity going on inside their makeshift homes.

Two NYU grads and a pal who love living in the Big Apple but don't want to pay its high rents are happy campers -- each shells out $100 a month to pitch a tent in a friend's Brooklyn back yard.

"We're trying to make ends meet at a time when it's hard to make ends meet," said Louis Frank, 22, who set up his $169 waterproof, 4½-foot-by-9-foot tent on a wooden plank in the fenced-in Bushwick back yard on June 1.

Sponsored Topics: Big Apple - Brooklyn - New York University - Bushwick Brooklyn - Arts
Source: Dealbreaker | 16 Jun 2009 | 2:40 pm

Biotech Stocks: Drug stocks edge higher; Genzyme falls

Drug stocks edge higher in early activity while shares of Genzyme Corp. fall on news that it is temporarily taking a key production facility off-line due to viral contamination.

Source: MarketWatch.com - Top Stories | 16 Jun 2009 | 2:40 pm

London Markets: Oil producers, Tesco help British stocks advance

Gains from drugmakers and supermarket group Tesco on Tuesday helped London’s FTSE 100 index claw back a fraction of the previous session’s heavy losses.

Source: MarketWatch.com - Top Stories | 16 Jun 2009 | 2:40 pm

USA Funds Launches Microsite for Financial Aid Professionals

Site highlights services that promote college access and support student aid services INDIANAPOLIS, June 16 /PRNewswire/ -- USA Funds(R), the nation's leading...
Source: RSS feed - channel BNewsBusiness | 16 Jun 2009 | 2:40 pm

Metals Stocks: Gold rises as dollar ebbs after PPI, housing data

Gold futures are on the rise for the first session in three, bouncing back from their lowest level in more than three weeks as the dollar weakened following U.S. economic data. Other metals futures also score early gains.

Source: MarketWatch.com - Top Stories | 16 Jun 2009 | 2:39 pm

Housing starts ratchet up 17.2% in May

The nation's builders boosted their production in May, starting new housing units at an annualized rate of 532,000, up 17.2% from the revised estimate of 454,000 in April.
Source: Business and financial news - CNNMoney.com | 16 Jun 2009 | 2:38 pm

BRIC draft communique does not mention dollar: sources

YEKATERINBURG, Russia (Reuters) - The draft communique of Brazil, Russia, India and China does not mention the role of U.S. dollar or a supranational reserve currency, sources with knowledge of the document told Reuters on Tuesday.
Source: Reuters: Business News | 16 Jun 2009 | 2:37 pm

Europe Markets: Oil producers, drugmakers help lift Europe

Stocks in Europe move modestly higher, as gains from drugmakers offset losses from banks.

Source: MarketWatch.com - Top Stories | 16 Jun 2009 | 2:35 pm

Northwestern Mutual is One of the 'Best Places to Work in IT'

Financial Security Company Ranks 50th Overall, Only in Wisconsin MILWAUKEE, June 16 /PRNewswire/ -- href="http://www.nmfn.com/">Northwestern Mutual ...
Source: RSS feed - channel BNewsBusiness | 16 Jun 2009 | 2:35 pm

Obama wants shield for consumers

When President Obama takes the podium on Wednesday to talk about his proposals for avoiding the next financial crisis, he is expected to unveil one idea that speaks directly to consumers and their pocketbooks.
Source: Business and financial news - CNNMoney.com | 16 Jun 2009 | 2:31 pm

Brown hires PR man who aided Palace

Suave spin doctor whose services have been sought by Buckingham Palace, Centrica and Vodafone, said by colleagues to be on the verge of becoming No 10 official spokesman
Source: Financial Times - US homepage | 16 Jun 2009 | 2:30 pm

Energy Stocks: Energy stocks gain footing as Exxon draws praise

Energy stocks rise in early activity after bruising losses in the previous session as oil reclaims the $72-a-barrel level and oil giant Exxon Mobil draws positive comments from Deutsche Bank analysts.

Source: MarketWatch.com - Top Stories | 16 Jun 2009 | 2:30 pm

Discover HotAtlanta with One- and Two-Night Summer Weekend Getaways Starting at $219

ATLANTA, June 16 /PRNewswire/ -- Take a breathtaking elevator ride, enjoy Atlanta skyline views from your room, experience the world's largest Aquarium, taste Coke products...
Source: RSS feed - channel BNewsBusiness | 16 Jun 2009 | 2:29 pm

Wall Street rises on commodity boost and U.S. housing data (Reuters)

Reuters - Stocks rose on Tuesday as renewed U.S. dollar weakness lifted shares of oil and other natural resource companies, while a rebound in May housing starts reinforced hope that the economy could be stabilizing.

Source: Yahoo! News: Business | 16 Jun 2009 | 2:26 pm

Wall Street rises on commodity boost and U.S. housing data

NEW YORK (Reuters) - Stocks rose on Tuesday as renewed U.S. dollar weakness lifted shares of oil and other natural resource companies, while a rebound in May housing starts reinforced hope that the economy could be stabilizing.
Source: Reuters: Business News | 16 Jun 2009 | 2:26 pm

Wall Street rises on commodity boost and U.S. housing data (Reuters)

Reuters - Stocks rose on Tuesday as renewed U.S. dollar weakness lifted shares of oil and other natural resource companies, while a rebound in May housing starts reinforced hope that the economy could be stabilizing.

Source: Yahoo! News: Stock Markets News | 16 Jun 2009 | 2:26 pm

Airline Stocks: Continental paces advance in airline sector

Continental Airlines shares rose 5% Tuesday, pacing an advance by the airline sector.

Source: MarketWatch.com - Top Stories | 16 Jun 2009 | 2:26 pm

Rio Tinto warns of uncertainty ahead

Rio Tinto said that the trading outlook for the rest of the year was "uncertain" with earnings being driven by the prices of iron ore aluminium and copper.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 16 Jun 2009 | 2:25 pm

GM to sell Saab to Swedish carmaker Koenigsegg Group

The deal unloads the last major brand the bankrupt automaker had on the block. The price was not disclosed.

Bankrupt General Motors Corp. has found a buyer for Saab, unloading the last major piece of the shrinking automaker's empire that had been on the block.

Source: L.A. Times - Business | 16 Jun 2009 | 2:25 pm

Stock Alerts for Hot Stocks in the Market Today Issued By TryPennyStocks.com: C, GE, BAC, LVS, INTC, PFE

ROCHESTER, N.Y., June 16 /PRNewswire/ -- href="http://www.trypennystocks.com/">TryPennyStocks.com is pleased to offer its stock alerts service to the investing community....
Source: RSS feed - channel BNewsBusiness | 16 Jun 2009 | 2:24 pm

Stocks edge higher on housing, inflation data

NEW YORK -- Investors remain cautious but are finding some room for optimism a day after a stock market slide.

Source: L.A. Times - Business | 16 Jun 2009 | 2:23 pm

Choice Hotels to Report 2nd Quarter 2009 Earnings on July 29, 2009; Conference Call to Be Held on July 30, 2009

SILVER SPRING, Md., June 16 /PRNewswire-FirstCall/ -- Choice Hotels International, Inc. (NYSE: CHH) today announced that it will report second quarter 2009 results after market...
Source: RSS feed - channel BNewsBusiness | 16 Jun 2009 | 2:20 pm

Housing Starts Are Up Again

Housing continues its slow climb back to normal. The U.S. Census Bureau and the Commerce Department report building permits were up in May by 4 percent over April, though still down 47 percent from the year before.

Housing starts were up 17.2 percent last month, though down 45.2 percent from the year before.

The U.S. still has way too much unused housing, but hey, we got ahead of April. "The inventory overhang means any recovery in building will be very muted for an extended period, but at least the very worst is over," writes Ian Shepherdson of High Frequency Economics, who's usually first to land in the Planet Money inbox.

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Source: NPR Blogs: Planet Money | 16 Jun 2009 | 2:16 pm

Best Buy sales and forecast disappoint, shares fall

CHICAGO (Reuters) - Best Buy Co Inc posted lower first-quarter earnings and weaker-than-expected sales on Tuesday and also implied earnings for the rest of the year would be worse than forecast, dragging its shares down 3 percent.
Source: Reuters: Business News | 16 Jun 2009 | 2:15 pm

Best Buy sales and forecast disappoint, shares fall (Reuters)

Reuters - Best Buy Co Inc posted lower first-quarter earnings and weaker-than-expected sales on Tuesday and also implied earnings for the rest of the year would be worse than forecast, dragging its shares down 3 percent.

Source: Yahoo! News: Business | 16 Jun 2009 | 2:15 pm

New Beer Public Company: Black Art Beer Importers (BLVI)

There is a new public company that is a specialty beer play, a trend we have seen less and less of in recent years after the roll-ups in the wine and beer industry.  Black Art Beer Importers (OTC: BLVI) is now listed as a public company, although this is not a true IPO.  This is [...]

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Source: 24/7 Wall Street | 16 Jun 2009 | 2:15 pm

May rebound in US housing starts

The number of new homes started in the US rebounded in May from April's record low, official figures show.
Source: BBC News | Business | World Edition | 16 Jun 2009 | 2:15 pm

Stocks edge higher on housing, inflation data (AP)

AP - Investors remain cautious but are finding some room for optimism a day after a stock market slide.

Source: Yahoo! News: Stock Markets News | 16 Jun 2009 | 2:15 pm

Red-hot Treasurys turn ice cold

One reason that investing is so challenging -- and so much fun -- is that owning a security that made you look like a genius one year can make you look like a dummy when the world changes the next year.
Source: Business and financial news - CNNMoney.com | 16 Jun 2009 | 2:14 pm

Takefuji in Ambac talks after downgrade

Takefuji is in talks with bond insurer Ambac after its credit rating rating was cut by Standard & Poor's
Source: Financial Times - US homepage | 16 Jun 2009 | 2:08 pm

GlaxoSmithKline signs Indian generics deal

GlaxoSmithKline (GSK) today signed an alliance with Dr Reddy’s Laboratories, an Indian generic drug maker, in its latest step towards building its business in emerging markets and copycat drugs.


Source: Latest Business News from Times Online | 16 Jun 2009 | 2:08 pm

US housing starts rebound sharply in May

New US residential building rebounded in May after falling to a record low the previous month as cheap construction costs lured builders to break fresh ground
Source: Financial Times - US homepage | 16 Jun 2009 | 2:07 pm

RIM aims to cross categories with BlackBerry Tour

TORONTO (Reuters) - Research In Motion is adding another smartphone to its BlackBerry lineup as it aims to win market share among both executives and mainstream consumers despite tough economic conditions.
Source: Reuters: Business News | 16 Jun 2009 | 2:06 pm

GM sells Saab to Swedish buyer

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 16 Jun 2009 | 2:05 pm

U.S. housing starts jump in May, inflation muted

WASHINGTON (Reuters) - New U.S. housing starts and permits surged in May from record lows, while producer prices rose at a slower pace despite higher gasoline prices, boosting prospects for the economy's recovery from recession.
Source: Reuters: Business News | 16 Jun 2009 | 2:05 pm

U.S. housing starts jump in May, inflation muted (Reuters)

Reuters - New U.S. housing starts and permits surged in May from record lows, while producer prices rose at a slower pace despite higher gasoline prices, boosting prospects for the economy's recovery from recession.

Source: Yahoo! News: Business | 16 Jun 2009 | 2:05 pm

Best Buy profit drops 15%

NEW YORK -- Best Buy Co. Inc. reported today that its first-quarter profit fell 15 percent, even as its biggest competitor exited the market, as recession-weary shoppers cut back on items like appliances...
Source: RSS feed - channel BNPaperBusiness | 16 Jun 2009 | 2:04 pm

Doha: Pascal Lamy's Theses and Figures Questioned by the Conclusions of a Group of International Economists

PARIS, June 16 /PRNewswire/ -- - While Some States Envisage a "New Approach" to Resume the Doha Round, the Theses and Figures Put Forward by Pascal...
Source: RSS feed - channel BNewsBusiness | 16 Jun 2009 | 2:04 pm

Best Buy profit drops 15%

NEW YORK -- Best Buy Co. Inc. reported today that its first-quarter profit fell 15 percent, even as its biggest competitor exited the market, as recession-weary shoppers cut back on items like appliances and digital cameras.

Source: L.A. Times - Business | 16 Jun 2009 | 2:04 pm

Community Management Concepts Holds Board Member Workshop

Board Members Learned About Legislation, Landscaping Ordinances, Hurricane Preparation, Board Mediation and Other Timely Association Issues ...
Source: RSS feed - channel BNewsBusiness | 16 Jun 2009 | 2:02 pm

Merck, Schering-Plough set meetings on merger

Drugmakers Merck & Co. and Schering-Plough Corp. say they will hold special meetings in August for their stockholders to approve their pending merger. The New Jersey neighbors will hold...
Source: RSS feed - channel BNewsBusiness | 16 Jun 2009 | 2:01 pm

Stocks try to rise

Stocks struggled to rise Tuesday, after a shaky start, as better-than-expected reports on housing and wholesale inflation tempered ongoing worries about the pace of the recession.
Source: Business and financial news - CNNMoney.com | 16 Jun 2009 | 2:01 pm

Madoff victims reveal hardship ahead of sentencing

Prosecutors yesterday filed 113 letters from victims of Bernard Madoff with a New York court, outlining the financial hardship caused by the phony fund manager's $65 billion fraud.$


Source: Latest Business News from Times Online | 16 Jun 2009 | 2:01 pm

Stock Alerts on Industry Leaders; Issued by Beacon Equity

DALLAS, June 16 /PRNewswire/ -- BeaconEquity.com announces the availability of stock alerts on leading, active stocks in today's news. Each stock alert highlights recent...
Source: RSS feed - channel BNewsBusiness | 16 Jun 2009 | 2:00 pm

Social Media Explosion

More Than 40 Percent of Consumers Use Online Social Networks; Popularity Spans Across Generations NEW YORK, June 16 /PRNewswire/ -- Social networks are exploding...
Source: RSS feed - channel BNewsBusiness | 16 Jun 2009 | 2:00 pm

Bankers group sees U.S. recession ending in 3rd quarter

WASHINGTON (Reuters) - The U.S. recession will end in the third quarter, but high unemployment and large federal deficits will linger, economists advising the American Bankers Association said on Tuesday.
Source: Reuters: Business News | 16 Jun 2009 | 1:58 pm

Klapwijk Sees Gold Prices a `Good Deal Higher'

Source: Bloomberg - All Podcasts | 16 Jun 2009 | 1:51 pm

GM says reaches deal to sell Saab to Koenigsegg (Reuters)

Reuters - Sweden's Koenigsegg, a niche manufacturer of some of the world's fastest and most expensive sports cars, has struck a deal to buy loss-making Saab Automobile from General Motors, the companies said on Tuesday.

Source: Yahoo! News: Business | 16 Jun 2009 | 1:50 pm

GM says reaches deal to sell Saab to Koenigsegg

STOCKHOLM (Reuters) - Sweden's Koenigsegg, a niche manufacturer of some of the world's fastest and most expensive sports cars, has struck a deal to buy loss-making Saab Automobile from General Motors, the companies said on Tuesday.
Source: Reuters: Business News | 16 Jun 2009 | 1:50 pm

Iran clamps down on protest coverage

Iran banned journalists working for foreign media from leaving their offices to cover protests in the capital as the influential speaker of parliament condemned an attack on university students in their dormitory
Source: Financial Times - US homepage | 16 Jun 2009 | 1:50 pm

Stocks edge higher on housing, inflation data

NEW YORK -- Investors remain cautious but are finding some room for optimism a day after a stock market slide.
Source: RSS feed - channel BNPaperBusiness | 16 Jun 2009 | 1:49 pm

Sterling rallies on the back of inflation figures

Sterling climbed more than a cent against the dollar and also rose against the euro after inflation in the UK fell less than most City economists had expected.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 16 Jun 2009 | 1:48 pm

Sports car maker Koenigsegg will buy Saab from GM

The sale is tied to a $600-million loan by the European Investment Bank that's backed by the Swedish government, General Motors says. Financial details of the deal are not given. ...
Source: RSS feed - channel BNPaperBusiness | 16 Jun 2009 | 1:46 pm

FuelCell’s Capital Raise, Dilutive But Opportunistic (FCEL)

FuelCell Energy Inc. (NASDAQ: FCEL) is getting hammered this morning.  The developer and manufacturer of fuel cell power plants for electric power generation announced a $24.2 million financing pact this morning.  The company sold 6.7 million shares of common stock at $3.59 per share via Canaccord Adams Inc. and Lazard Capital Markets. Net proceeds will be [...]

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Source: 24/7 Wall Street | 16 Jun 2009 | 1:46 pm

Etihad engine deal eclipses Airbus, Boeing

PARIS (Reuters) - An engine deal from Abu Dhabi's Etihad Airways worth more than $5 billion could be the biggest news to come from this week's Paris Air Show, where the global recession has frozen sales of planes from Airbus or Boeing Co.
Source: Reuters: Business News | 16 Jun 2009 | 1:46 pm

Dixon at Commerzbank Sees Faster Inflation in Next 2 to 3 Years

Source: Bloomberg - All Podcasts | 16 Jun 2009 | 1:45 pm

BA asks staff to work for nothing

British Airways is asking thousands of staff to work for nothing, for up to one month, to help the airline survive.
Source: BBC News | Business | World Edition | 16 Jun 2009 | 1:44 pm

Atlantic's Lewis Sees U.S. Stocks Declining in Weeks Ahead

Source: Bloomberg - All Podcasts | 16 Jun 2009 | 1:44 pm

McCallister Calls U.S. Healthcare `Perfect Storm' for Inflation

Source: Bloomberg - All Podcasts | 16 Jun 2009 | 1:42 pm

May housing construction jumps by 17.2 percent

WASHINGTON -- Construction of new homes jumped in May by the largest amount in three months, an encouraging sign that the nation's deep housing recession was beginning to bottom out.

Source: L.A. Times - Business | 16 Jun 2009 | 1:37 pm

May housing construction jumps by 17.2 percent

WASHINGTON -- Construction of new homes jumped in May by the largest amount in three months, an encouraging sign that the nation's deep housing recession was beginning to bottom out.
Source: RSS feed - channel BNPaperBusiness | 16 Jun 2009 | 1:37 pm

Eager hedge funds on hunt as investors take cover (Reuters)

Reuters - Investors say they are getting more promotional material from hedge funds than ever before, as funds seek to replenish assets withdrawn or lost because of negative performance during the financial crisis.
Source: Yahoo! News: Business | 16 Jun 2009 | 1:35 pm

Eager hedge funds on hunt as investors take cover

MONACO (Reuters) - Investors say they are getting more promotional material from hedge funds than ever before, as funds seek to replenish assets withdrawn or lost because of negative performance during the financial crisis.
Source: Reuters: Business News | 16 Jun 2009 | 1:35 pm

Domestic Manufacturing… What Manufacturing?

Industrial production and capacity utilization did come in right where economists were expecting, but the level at which these numbers are seeing just feels ghastly.  Industrial production for May was -1.1% and Capacity utilization was a mere 68.3%.  We saw capacity revised slightly lower for April to 69.0% from 69.1%. The good news, if you can [...]

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Source: 24/7 Wall Street | 16 Jun 2009 | 1:27 pm

Smithfield Foods loss less than expected

CHICAGO (Reuters) - Smithfield Foods Inc posted a smaller-than-expected quarterly loss on Tuesday on better-than-anticipated margins in its hog and pork businesses, but high feed costs weighed on results.
Source: Reuters: Business News | 16 Jun 2009 | 1:21 pm

iPhone or iPod Touch? Which are you?

Source: Business and financial news - CNNMoney.com | 16 Jun 2009 | 12:59 pm

Megabonuses could stage a quick comeback

The outrage over supersized banker bonuses has barely died down but the stage is already being set for the return of the megapayouts. It'll feel icky and almost surely reignite the fury of taxpayers and lawmakers.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 16 Jun 2009 | 12:58 pm

$1 trillion = Fewer uninsured

Two key proposals to improve access to health insurance could reduce the ranks of the uninsured but cost $1 trillion over 10 years, according to preliminary estimates released Monday by the Congressional Budget Office.
Source: Business and financial news - CNNMoney.com | 16 Jun 2009 | 12:53 pm

Bottled water off menu

Source: Business and financial news - CNNMoney.com | 16 Jun 2009 | 12:52 pm

PPI: Wholesale Inflation Still Elusive

Wholesale inflation measured by producer prices for the month of May is out, and the fears of inflation are not yet working into the system.  The nominal PPI came in +0.2% for May and the core PPI on an ex-food and energy basis came in with a drop of -0.1%.  Dow Jones listed their consensus [...]

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Source: 24/7 Wall Street | 16 Jun 2009 | 12:45 pm

U.S. housing starts, permits jump in May (Reuters)

Reuters - New U.S. housing starts and permits rebounded in May from record lows as ground-breaking for multifamily units surged after tumbling the prior month, a government report showed on Tuesday.

Source: Yahoo! News: Business | 16 Jun 2009 | 12:39 pm

Misleading Gains in Housing Data

Housing Starts came in much better than expected, on the surface.  We saw a reading of 532,000 on housing starts on an annual basis.  This is a gain of 17.2% and we were only expecting a 7% gain from the Dow Jones consensus.  This sounds huge on the surface, but the number is not exactly [...]

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Source: 24/7 Wall Street | 16 Jun 2009 | 12:38 pm

Opening Bell: 06.16.09

Will Someone PLEASE Take Freddie Chief John Koskinen's Job Off His Hands? (WSJ)
"Now, approaching his 70th birthday June 30, Mr. Koskinen has what may be his most thankless assignment: chairman as well as interim chief executive and finance chief of Freddie Mac, a big mortgage company on Treasury Department life support. Near the top of his to-do list is finding a new CEO and finance chief."

Cigarette Ban Being Implemented in Va. State Prisons (Washington Post)
Something to consider before doing anything illegal-ish, if living without your fix is out of the question.

Credit Issuers Slashing Card Balances (NYT)
"Now it's the card company calling you and saying, 'Let's talk turkey,' " said David Robertson, publisher of the credit industry journal The Nilson Report.

US Likely To Lose AAA Rating (Reuters)
According to Robert Prechter.

Obama's Bank Revamp May Stall as Congress Tackles Rival Issues (Bloomberg)
"It seems like some of the fire in the discussions has gone out of it," said Alex Pollock, a fellow at the American Enterprise Institute in Washington and former president of the Chicago Federal Home Loan Bank. "Regulatory reform is always a popular topic in the wake of a bubble and bust."

FAA Chief to Draft Tougher Rules to Alleviate Commuter Pilot Fatigue (WSJ)
That seems like a good idea.

Looking for the Little Guy in the Shotgun Union of Two Wall Street Giants (NYT)
In a preview for Frontline's documentary on the Bank of America, Merrill Lynch deal, "Breaking The Bank," Ken Lewis is described as "the most competitive person in the history of the United States, including the Union Army." We also learn that he had to practice smiling and started wearing glasses to "soften" his image. According to Andrew Ross Sorkin, Lewis "wants to give the middle finger to Wall Street."

Sponsored Topics: Bank of America - United States - Freddie Mac - Merrill Lynch - Gordon Brown
Source: Dealbreaker | 16 Jun 2009 | 12:30 pm

World War II Did Not End the Great Depression

By John Tamny of RealClearMarkets “Whereas before there had been almost no framework to explain what Roosevelt was doing, now a respectable one was forming. Spending promoted growth, if government was big enough to spend enough.” ~ Amity Shlaes, The Forgotten Man Perhaps as a result of all the commentary suggesting that we’re in the midst of [...]

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Source: 24/7 Wall Street | 16 Jun 2009 | 12:29 pm

German investor confidence continues to rise

German investor confidence has risen for the eighth consecutive month to the highest since May 2006, according to a survey that added to evidence that the recession in Europe's largest economy is easing
Source: Financial Times - US homepage | 16 Jun 2009 | 12:23 pm

British Airways asks staff to work for free

British Airways has asked its 40,000 staff to work without pay for up to a month as the ailing airline seeks to cut costs.


Source: Latest Business News from Times Online | 16 Jun 2009 | 12:23 pm

Fewer Green Shoots at Best Buy (BBY)

Best Buy Co. Inc. (NYSE: BBY) reported earnings which look solid when you compare them to the estimates.  The electronics retail giant posted $0.36 net EPS and $0.42 non-GAAP EPS and $10.095 billion in revenues.  Thomson Reuters had estimates at $0.34 EPS and $10.13 billion in revenues.  Unfortunately, there are issues that many of those [...]

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Source: 24/7 Wall Street | 16 Jun 2009 | 12:18 pm

Best Buy shares slide after earnings (Reuters)

Reuters - Best Buy Co Inc shares slid 4.2 percent to $37.03 on Tuesday after the electronic retailer reported first-quarter earnings and comparable store sales.
Source: Yahoo! News: Stock Markets News | 16 Jun 2009 | 12:09 pm

West Bromwich Building Society is not out of the woods yet Moody's says

West Bromwich Building Society still faces "significant risks to its financial fundamentals".
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 16 Jun 2009 | 11:58 am

Weak pound helps sustain UK inflation

Weaker sterling helped drive up the cost of items like DVDs clothing and televisions.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 16 Jun 2009 | 11:49 am

Saab sale to sportscar maker saves 3,000 jobs

More than 3000 UK jobs have been saved following the sale of Saab, the Swedish unit of General Motors (GM), the bankrupt US car giant, to a consortium headed by Konenigsegg, a luxury car maker.


Source: Latest Business News from Times Online | 16 Jun 2009 | 11:46 am

Airplane Life Raft FAIL

Source: Business Pundit | 16 Jun 2009 | 11:44 am

Madoff 'took rest of our lives'

The judge who will sentence disgraced US financier Bernard Madoff receives more than 100 letters from angry victims of his fraud.
Source: BBC News | Business | World Edition | 16 Jun 2009 | 11:29 am

Top Analyst Calls (BT, CSCO, EMC, HAS, ITW, MAT, NTAP, OMC, TEN, VECO)

These are some of the top pre-market analyst upgrades and positive research calls we have seen from Wall Street with more than two hours until the market opens: BT Group (BT) Raised to Overweight at Morgan Stanley. Cisco Systems (CSCO) Started at Canaccord. EMC Corp. (EMC) Started at Canaccord. Hasbro (HAS) Started as Buy at KeyBanc. Illinois Tool Works (ITW) [...]

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Source: 24/7 Wall Street | 16 Jun 2009 | 11:25 am

Bank names Posen to replace arch-hawk Besley

The Chancellor has appointed Adam Posen to replace arch-hawk, Tim Besley, on the Bank of England's (BoE) Monetary Policy Commitee (MPC).


Source: Latest Business News from Times Online | 16 Jun 2009 | 11:20 am

Bank of Japan says economy improving

The central bank noted that exports and production were improving and that public investment had increased while acknowledging that domestic private demand continued to decline
Source: Financial Times - US homepage | 16 Jun 2009 | 11:06 am

US academic appointed to MPC

The Treasury appointed Adam Posen, an expert on monetary policy who has worked with Japan's ministry of the economy and the IMF, and is currently deputy director of the Peterson Institute for International Economics
Source: Financial Times - US homepage | 16 Jun 2009 | 11:06 am

China lends Shanghai group $10bn

China extends a $10bn loan to Russia and central Asian states to help them survive the financial crisis, Chinese President Hu Jintao says.
Source: BBC News | Business | World Edition | 16 Jun 2009 | 10:53 am

European markets steady despite big Asian falls (AP)

AP - European stock markets steadied Tuesday following big losses around the world over the last 24 hours as investors have grown increasingly cautious about the likelihood that the recent rally in equities will continue through the summer.

Source: Yahoo! News: Stock Markets News | 16 Jun 2009 | 10:39 am

Renault boss defends state help

Carlos Ghosn, head of Renault and Nissan, denies taxpayers are propping up failing carmakers in a BBC interview.
Source: BBC News | Business | World Edition | 16 Jun 2009 | 10:36 am

Fixedrate mortgages: big increases from Halifax and C?G

Two more lenders have announced sharp rises in interest rates on fixedrate mortgages.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 16 Jun 2009 | 10:36 am

Bank of England names Adam Posen as new MPC member

The Bank of England has appointed Dr Adam Posen an American economist to help set interest rates as the Monetary Policy Committee fights Britain's recession.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 16 Jun 2009 | 10:30 am

California: $3 Gas And No Recovery

Whatever bad news California may have faced in the past, it is getting worse. The new UCLA Anderson Forecast predicts that the state will not have any economic recovery until well into 2010 and that unemployment will stay at over 10% until 2011, according to Reuters. New and negative economic forces may make California’s problems even worse. The [...]

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Source: 24/7 Wall Street | 16 Jun 2009 | 10:23 am

Whitbread slashes Premier Inn rates to fill beds in tough market

Shrinking sales at its budget hotel chain, Premier Inn, has forced Whitbread to slash prices this summer in order to raise occupancy in a weak market. The pubs and hotels group managed to raise its total revenues by 2.5 per cent in the first quarter of its financial year but Premier Inn suffered a 7.9 per cent decline in like-for-like sales and the revenue per room slumped by almost 10 per cent.


Source: Latest Business News from Times Online | 16 Jun 2009 | 10:23 am

European shares rise (AFP)

AFP - Europe's main equity markets gained slightly on Tuesday after news that investor confidence in recession-hit Germany had hit a three-year high point, dealers said.

Source: Yahoo! News: Stock Markets News | 16 Jun 2009 | 10:15 am

GM agrees Saab sale to Koenigsegg

General Motors signs a tentative agreement to sell its Saab unit to sports car manufacturer Koenigsegg.
Source: BBC News | Business | World Edition | 16 Jun 2009 | 10:14 am

New York City Drivers Become Vicious

New York City is choked with more than eight million people, many of  whom have to drive to work on highways meant to accommodate traffic levels of the 1930s. The bridges and tunnels into Manhattan often have back-ups that push waiting times to an hour or more. On top of the normal frustration of driving in [...]

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Source: 24/7 Wall Street | 16 Jun 2009 | 10:06 am

Further slowdown in UK inflation

UK annual inflation slowed again in May but remains above the Bank of England's target, figures show.
Source: BBC News | Business | World Edition | 16 Jun 2009 | 9:54 am

Weaker dollar boosts oil and gold

Commodities enjoyed a broad bounce on Tuesday, with crude rising back above $71 a barrel, as a weaker dollar lured investors back into the market and the US currency's reserve status was questioned by Russia
Source: Financial Times - US homepage | 16 Jun 2009 | 9:50 am

GM sells Saab to Swedish luxury sports car maker Koenigsegg

General Motors the struggling US carmaker said the deal represented the best deal to secure Saab's future.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 16 Jun 2009 | 9:47 am

UK inflation falls less than expected to 2.2%

UK inflation fell by much less than expected in May, lengthening the odds of full-blown deflation, official figures revealed today.


Source: Latest Business News from Times Online | 16 Jun 2009 | 9:41 am

Europe considers Airbus soft loan

France and Germany say they are prepared to offer Airbus 2.5bn euros in soft loans to help develop the A350 aircraft.
Source: BBC News | Business | World Edition | 16 Jun 2009 | 9:34 am

UK inflation: analysts fear surprise strength could hamper efforts to print money

UK inflation surprised economists as it fell less than expected in May to 2.2pc raising fears over the Bank of England's moves to pump more money into the economy..
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 16 Jun 2009 | 9:13 am

'Real' inflation falls to minus 10pc

The real cost of living for British families has fallen by 10pc since this time last year according to figures compiled for The Telegraph.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 16 Jun 2009 | 9:00 am

Taking the pulse

New England suffers a new spike in foreclosures
Source: BBC News | Business | World Edition | 16 Jun 2009 | 8:58 am

Housing data fuels Wall Street

Better than-expected housing data helped Wall Street to recover after yesterday's slump.


Source: Latest Business News from Times Online | 16 Jun 2009 | 8:50 am

Supermarket Tesco posts surging first-quarter sales (AFP)

AFP - Britain's biggest retailer Tesco said Tuesday that sales jumped 12.6 percent in the first quarter of the group's financial year, boosted by its international division and despite the global downturn.

Source: Yahoo! News: Business | 16 Jun 2009 | 8:37 am

European stocks ahead at open (AFP)

AFP - Europe's leading stock markets opened higher on Tuesday, with London's FTSE 100 index of leading shares gaining a marginal 0.09 percent to reach 4,329.72 points.

Source: Yahoo! News: Stock Markets News | 16 Jun 2009 | 8:34 am

Downturn hits Premier Inn sales

Budget hotel chain Premier Inn, owned by Whitbread, reports a sharp drop in sales as the recession hits trade.
Source: BBC News | Business | World Edition | 16 Jun 2009 | 8:03 am

Tesco makes 'solid start' as UK sales rise 4.3%

Tesco, Britain’s largest retailer, reported a 4.3 per cent rise in first-quarter sales from its UK stores, boosted by strong sales of toys and gardening equipment.


Source: Latest Business News from Times Online | 16 Jun 2009 | 7:30 am

Australian stocks: Market closes down 1.7pc

MELBOURNE - Weaker commodity prices and a sell down of Rio Tinto shares from its $15 billion rights issue led to the Australian share market closing lower by around 1.7 per cent. At 1615 AEST, the benchmark S&P/ASX200 index was...
Source: New Zealand Herald - Business | 16 Jun 2009 | 7:01 am

Exxon must pay $480 million in interest over Valdez oil tanker spill

The federal appeals court ruling adds to the $507.5-million punitive damage award to victims of the devastating 1989 accident in Alaska. The firm is also ordered to pay $70 million in court costs. ...
Source: RSS feed - channel BNPaperBusiness | 16 Jun 2009 | 7:00 am

Obama calls cost of healthcare a threat to economy

Speaking to the American Medical Association in Chicago, President Obama insists the status quo cannot be sustained: 'Reform is not a luxury, it is a necessity.'

President Obama on Monday made his most detailed pitch yet for a $1-trillion overhaul of the nation's burdened healthcare system, calling it a "ticking time bomb" that threatens the nation's prosperity.

Source: L.A. Times - Business | 16 Jun 2009 | 7:00 am

Rent relief often gives tenants new lease on life

Struggling merchants just have to ask for a break. Some landlords grant such requests, others don't. Experts advise tenants to explain their hardships and offer something in return. ...
Source: RSS feed - channel BNPaperBusiness | 16 Jun 2009 | 7:00 am

Administration calls for financial system overhaul

WASHINGTON -- The Obama administration wants to overhaul the country's financial rule book by giving the Federal Reserve increased powers but, bowing to critics in Congress, is backing away from proposals...
Source: RSS feed - channel BNPaperBusiness | 16 Jun 2009 | 7:00 am

Exxon must pay $480 million in interest over Valdez oil tanker spill

The federal appeals court ruling adds to the $507.5-million punitive damage award to victims of the devastating 1989 accident in Alaska. The firm is also ordered to pay $70 million in court costs.

Exxon Mobil Corp. must pay victims of the 1989 Exxon Valdez oil spill $480 million more in interest on their delayed punitive damages awards as well as cover $70 million in the company's own appeals costs, a federal appeals court ruled Monday.

Source: L.A. Times - Business | 16 Jun 2009 | 7:00 am

Rent relief often gives tenants new lease on life

Struggling merchants just have to ask for a break. Some landlords grant such requests, others don't. Experts advise tenants to explain their hardships and offer something in return.

As the recession drags on, national retailers are mass mailing requests for rent reductions to their landlords. Does a small-business tenant stand a chance of getting the same relief?

Source: L.A. Times - Business | 16 Jun 2009 | 7:00 am

Budget woes, building drop-off may prolong state's hardships

Unemployment will reach 12.1% by the end of the year, UCLA economists forecast. Despite some healing in the national...
Source: RSS feed - channel BNPaperBusiness | 16 Jun 2009 | 7:00 am

Obama to propose strict new regulation of financial industry

The plan would give the government new powers to seize key companies whose failure jeopardizes the financial system, as well as creation of a watchdog agency to look out for consumers' interests.

The Obama administration this week will propose the most significant new regulation of the financial industry since the Great Depression, including a new watchdog agency to look out for consumers' interests.

Source: L.A. Times - Business | 16 Jun 2009 | 7:00 am

Puns, put-downs and fresh coinages from the white-hot furnace of e-culture

What do you call the loss of productivity caused by too much time spent on Facebook? "Social notworking." A steeply devalued retirement account? "201(k)." A painfully obsolete cellphone? "Brickberry."

Source: L.A. Times - Business | 16 Jun 2009 | 7:00 am

Germany s 'cash-for-clunkers scheme fuels sales of foreign-made cars

More Germans are bypassing the BMW and Mercedes dealers in favor of using their subsidies on Skodas, Hyundais and other fuel-efficient rides.

Gloom permeates the U.S. auto industry, but happier days are here again for workers at the Skoda factory in the western Czech Republic. Orders are up, their assembly lines are humming once more, and they owe it all to the government.

Source: L.A. Times - Business | 16 Jun 2009 | 7:00 am

Obama to propose strict new regulation of financial industry

The plan would give the government new powers to seize key companies whose failure jeopardizes the financial system, as well as creation of a watchdog agency to look out for consumers' interests. ...
Source: RSS feed - channel BNPaperBusiness | 16 Jun 2009 | 7:00 am

Germany s 'cash-for-clunkers scheme fuels sales of foreign-made cars

More Germans are bypassing the BMW and Mercedes dealers in favor of using their subsidies on Skodas, Hyundais and other fuel-efficient rides. ...
Source: RSS feed - channel BNPaperBusiness | 16 Jun 2009 | 7:00 am

NZ stocks: Market sharply down on world trend

The sharemarket joined the sell-down in world equity markets, but its decline today was orderly and largely confined to the top stocks. The benchmark NZSX-50 index closed down 39.0 points, or 1.4 per cent, at 2786.15, after adding...
Source: New Zealand Herald - Business | 16 Jun 2009 | 6:16 am

NZ stocks: Dollar falls against major currencies

The New Zealand dollar continued tailing off against a stronger US dollar today, following the euro and Australian dollar as they declined. By 5pm, the kiwi was at US62.74c, down about US1c from late yesterday afternoon, but above...
Source: New Zealand Herald - Business | 16 Jun 2009 | 5:43 am

Dow Moves Higher On Economic Data (Market Update)

News at a Glance

• Gas Advances: Commodity aims for 49th straight gain.
• Early Bounce: Stocks move slightly higher during morning trading.
• Saab Sold: GM agrees to sell unit to Koenigsegg.
• Data Points: Housing Starts, PPI better-than-expected.

The Lowdown

Wall Street is reversing some of its Monday losses. 

Twenty-four hours after a broad selloff knocked about 2% off the major indexes, stocks increased at the open, as traders mulled over new data on the housing market and inflation. At 9:45 a.m., the Dow Jones Industrial Average had gained 13 at 8625, the Nasdaq had climbed 5 to 1821 and the S&P 500 had increased 2 at 925.

Traders had plenty of new economic data to study. The Commerce Department said construction of new homes and apartments jumped 17.2% last month to a seasonally adjusted annual rate of 532,000--the largest jump in three months, according to the Associated Press. That number was slightly better than what experts were predicting. The agency also said building permits rose 4% in May to an annual rate of 518,000. 

The Labor Deparrtment said a May reading of the Producer Price Index, a measure of inflation, increased by a seasonally adjusted .2% from April. Economists were predicting a 0.6% bump in the PPI. High gas prices were offset by cheaper food costs. On a year-over-year basis, wholesale prices have fallen the most since 1949, according to Marketwatch.

Industrial production decreased 1.1% in May, according to the Federal Reserve, due to weak auto, mining and technology sector performance. Economists expected a dip of 1.0% for May. Capacity utilization came in at 68.3% in May, a record low according to Marketwatch. 

At an International gathering in his home country, Russian President Dmitry Medvedev called for new global currency reserves to complement the dollar, according to the Associated Press. That call helped sink the dollar a bit after it rose against foreign currencies on Monday. 

On the Nymex, crude reversed some of Monday's losses. By 9:45 a.m., oil traded up $1.64 at $72.26 a barrel.

Another commodity of note: gasoline, which will aim for its 49th straight session of gains, even with the airline and auto industries reeling from declines in demand.

The auto industry did a bit of reshuffling Thursday when General Motors agreed to sell its Saab unit to Swedish firm Koenigsegg.

World markets were mixed. Asia reacted to Monday's selloff: Japan's Nikkei lost 2.9%, while Hong Kong's Hang Seng dropped 1.8%. In Europe, the U.K.'s FTSE picked up 0.5% in midday trading.

Corporate News

• Citigroup (C) chairman Richard Parsosn said his firm's decision to keep the $45 billion it borrowed from the Troubled Asset Relief Program puts the firm in danger of losing some of its top talent. "I do worry we could be competitively disadvantaged if we aren't able to find a way to quickly repay TARP," Parsons said at a forum sponsored by Time Warner (TWX), Reuters reported.
• Bank of America (BAC) has found itself in possession of a lot of suddenly promising stock. The firm's soon-to-be 34% stake in BlackRock (BLK) could jump in value in the wake of its acquisition of Barclays Global Investor, a move that will make the new firm that largest money manager in the world. During the first quarter, BofA's stake in BlackRock contributed $65 million to earnings.
• General Motors has agreed to sell its Saab unit to an investment group led by Swedish luxury sports carmaker Koenigsegg Automotive. The deal includes $600 in backing from the European Investment Bank. The deal is expected to close in the third quarter.

The Economy

• The Labor Deparrtment said a May reading of the Producer Price Index, a measure of inflation, increased by a seasonally adjusted .2% from April. Economists were predicting a 0.6% bump in the PPI after the index rose 0.3% in April.
• The Commerce Department said construction of new homes and apartments jumped 17.2% last month to a seasonally adjusted annual rate of 532,000. That number was better than what experts were predicting. The agency also said building permits rose 4% in May to an annual rate of 518,000.
• Industrial production decreased 1.1% in May after having fallen a revised .7% in April, according to the Federal Reserve. Economists expected a dip of 1.0% for May. Capacity utilization came in at 68.3% in May, slightly below the 68.4% experts were anticipating. 

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Source: SmartMoney.com | 16 Jun 2009 | 4:00 am

10 Things Financial Planners Won't Tell You (10 Things)

1. “I got this gig on a whim.”

There’s a huge market of consumers out there desperately seeking financial guidance—especially in the wake of the 2008 market crash. And a wealth of advisers are eager to serve them. In the early 1990s, only about 25,000 people called themselves financial planners, according to Boston-based research firm Dalbar, but by 2006 that number had climbed to around 650,000. Part of the reason for the boom is that anyone can present themselves as a financial planner—one of several generic titles for someone who provides advice to clients about how best to handle their money. (As opposed to money managers, for example, who actually manage your accounts.) And since there’s no required training or experience necessary, why not hang out a shingle and tap into the profit?

But it can get even trickier than terminology—many of those seeking to provide you with financial advice are actually trying to sell you something. Bank-employed pitchmen are often called “personal financial consultants,” for example, while insurance salesmen may present themselves as “financial advisers.” Indeed, “The bulk of people who market themselves as financial advisers are salespeople,” says the Consumer Federation of America’s director of investor protection, Barbara Roper.

How can you be sure you’re hiring a qualified pro? You can start by narrowing the field to one of the 56,000 Certified Financial Planner licensees out there (visit www.cfp.net). In contrast to run-ofthe- mill planners and advisers, CFPs do have to meet specific requirements: Their license means three years’ minimum experience and passing a comprehensive 10-hour exam. Next, grill candidates on how much real planning they’ve done. Wind Lake, Wis.–based CFP Jim Cantrell says he’s met advisers who claim to have 10 years’ experience, “then you find out that they became a planner only a year ago and spent eight years as a bank manager.”

2. “I’m a jack-of-all-trades and master of none.”

James Eccleston, a Chicago-based securities lawyer, recalls a client of his who met with disaster when a financial planner failed to advise him about the tax ramifications of exercising stock options. Instead, the planner convinced the client to buy a second home, Eccleston says, using the stock as collateral for the mortgage, “and the coffin was sealed, because this was a 100-percent position in Cisco.” When Cisco stock tanked during the tech-bubble fallout, the client’s portfolio plunged, from $1.7 million to about $5,400. He was forced to liquidate all his shares and take a $100,000 second mortgage on his primary home to meet margin calls—then got whacked with a $400,000 tax bill.

A good financial planner should work alongside outside professionals— accountants, lawyers, insurance brokers— to offer you the best service. However, at some firms, like the one Eccleston’s client used, the planner tries to do everything himself. Beware. “If they’re claiming that they have the expertise to do it all, I would seriously question that,” Roper says. Like tax planning, estate planning poses great risks, says Eccleston, since flaws might not show up until the client retires or dies. His advice: Doublecheck anything your financial planner says about taxes or estate planning with a lawyer or CPA.

3. “I have ghostwriters draw up your plan.”

So you met with a planner, outlined your goals, and left feeling that your financial future was in good hands. It might come as a disappointment, then, to learn that this wonderful planner won’t be finishing the job. Outsourcing financial plans to a secondary firm or freelancer is a growing trend, especially among big firms, enabling planners to spend more of their time wooing new clients. “It’s the current corruption in financial planning,” says John E. Sestina, cofounder of the National Association of Personal Financial Advisors. But when a plan is done by outsiders, Sestina says, the information gets stale; there is less intimacy and more room for error. “You can’t act on issues as soon as they crop up,” he says.

And don’t assume the planner will offer up this detail without prompting, says Sherry Rhoades, a Plano, Tex., certified financial planner who says she doesn’t outsource. “[There’s] no need for the client to know.”

4. “I’m a high-pressure shill in disguise.”

The majority of financial planners work on commission, which doesn’t mean they’re bad people but can make for some bad financial planning. When Laguna Hills, Calif.–based Certified Financial Planner Scott Dauenhauer worked at a few big-name brokerage firms during the ’90s, he says he was constantly being pushed into selling the firm’s proprietary—and often poorly performing—mutual funds, variable annuities, or wrap accounts. “We got pressured to sell them because the payout was higher,” says Dauenhauer. “But there was no talk of whether it was right for the client.”

To avoid such conflicts of interest, shop for a planner through the National Association of Personal Financial Advisors (www.napfa.org), a strictly feeonly group (no charge-backs, kickbacks, trails, or other hidden commissions) with more than 1,700 members. NAPFA planners have to sign an oath stating that they’ll never receive commissions and promising to put their clients’ best interests first. Along with having three years’ experience, they must take 60 hours of continuing education every two years and submit sample plans for review by other NAPFA members.

5. “Am I ‘fee-only’ or ‘fee-based’? Um, let’s not split hairs.”

As the public’s suspicion of commissiondriven planners has grown, so has the market for “fee-only” planning—in which financial planners charge for the advice they provide but don’t get any commission on the products they sell. The popularity of the approach has inspired some financial planners “to clothe themselves in the ‘fee’ word,” says New York–based CPA and former NAPFA Chairman Gary Schatsky. Indeed, more than 40 percent of certified financial planners now call themselves “fee-based,” which means that they charge you an upfront fee and collect commissions on products they recommend, according to the Certified Financial Planner Board of Standards.

According to the most recent statistics from the CFP Board, fee-based revenue for registered representatives had climbed to roughly 33 percent of total revenue in 2004, versus 10 percent of total revenue in 1996—and the trend is still going strong. To be sure that your “fee-only” or “feebased” planner is true to his claims, ask for a written breakdown of fees, especially those associated with each investment product, suggests Virginia-based CFP Randall Kratz. “If someone doesn’t have what he makes in writing, I wouldn’t work with him,” he says.

6. “Once I’ve done the plan, I’m outta here . . .”

Financial planners like to give you the sense that they’ll be with you every step of the way through important financial decisions. But in reality, many clients find that a once-attentive planner becomes increasingly elusive as time wears on. When Kratz worked for a financial advisory firm several years ago, he says he adopted more than 1,000 clients who had been discarded by colleagues, usually because they no longer produced adequate income to keep their planners interested. “Typically, the first year was an intense relationship, but clients complained that they stopped hearing from the adviser after that,” he says. The reason? The commissions had dried up—a lot of products, especially insurance products, are based on one year of commissions before they drop off, says Kratz.

To avoid a shutout, ask prospective financial planners at the interview stage how often you should expect to be in touch. A good reply, says Coupeville, Wash., Certified Financial Planner Kathleen Cotton, is about four times in the first three months to hammer out a plan, then at least once or twice a year after that.

7. “. . . especially if you’re not so well-to-do.”

The past decade has seen a big push among planners to target high-net-worth clients, and many planners today have a minimum asset requirement—typically $100,000. Considering that, according to the 2004 Census by the U.S. Census Bureau, American households have a median net worth of about $44,000, that leaves a lot of folks out in the cold.

Luckily, middle-class clients do have some alternatives. The Garrett Planning Network (www.garrettplanningnetwork .com) is a ring of 260 planners across the nation who work primarily with the $100,000-and-under income set, charging hourly fees for periodic advice. Similarly, John Sestina has his own network of 20 planners scattered around the U.S.; he says they can even handle some clients entirely over the phone (www.sestina.com). “There’s a large influx of middle-class retirees that have assets that need to be put somewhere, so more and more companies are trying to tap into this market,” says Percy E. Bolton, committee member of the Certified Financial Planner Board of Standards and founder of Pasadena, Calif.–based Percy E. Bolton Associates. “There are two waves of change today—the planners that are going after the super-rich and those that are going after the middle- and upper-middle-class clients.”

8. “Confused? That’s the point.”

Many clients meet with planners only to leave with more questions than answers. “It’s like going to the doctor—you think you understand when you’re there, but then you walk out and think, What was it they said?” says Madeline Moore, a Portland, Ore.–based financial planner. Unfortunately, this confusion is often used to manipulate you.

Sherry Fabricant and her husband, of Plano, Tex., started investing $120,000 with a financial planner at an area brokerage firm at the end of 1997. The planner told them that withdrawal of funds before a five-year period would incur a sliding fee (5 percent of assets in the first year, 4 in the second, and so on). However, not only did the planner put them in high-fee funds without their understanding but he didn’t explain that with any additional investment transaction, the five-year restriction would begin anew. “Recently, we made a huge sell and a huge purchase,” says Fabricant, “and it wasn’t explained that our five years would then start over.”

How can you protect yourself? Ask plenty of questions and write down the responses, and if you don’t get straight answers, move on. “Remember, they work for you,” says Sestina. “So if you never understand what they’re saying, fire them.”

9. “In fact, I don’t even understand your plan.”

There’s a plethora of computer software today designed to help financial planners with clients’ asset allocation, cash flow, retirement planning, and so on. These tools make for quick results, but they can also cause problems—especially when planners don’t understand how the software works.

When Scott Dauenhauer worked at one major brokerage firm, he and his colleagues churned out boilerplate documents that, he says, all looked alike and usually had glaring mistakes— everything from a wrong age (which can render the entire plan wrong) to a misunderstanding of the client’s goals. The danger was that most of his fellow advisers had little training in planning, “so you have a document that’s probably wrong and an adviser who can’t tell you why,” Dauenhauer says.

Cotton suggests that you quiz your planner about any computer-generated plan to make sure he really understands it. You could ask, say, whether the software assumes a flat rate of return on investments or how it deals with taxation issues. You can also test your CFP’s plan against the free service at Financeware.com, which analyzes plans using real stock market returns—and is therefore more realistic than the flat rate used by most planners’ programs.

10. “Good luck busting me for malpractice.”

Since the financial-planning industry is so loosely organized, it’s not surprising that there are no firm regulations regarding consumer grievances. The CFP Board enforces a code of ethics, “but given the limitations of a voluntary certification program, it’s kind of after-the-fact enforcement,” says Roper. So what can you do if you get cheated? If your planner, like most, holds a securities license, you go to FINRA, the Financial Industry Regulatory Authority. But be prepared to wait. Although the majority of arbitration cases are settled in around six months, if your case goes to a hearing, it could take up to 16 months to get a decision.

Even then, there’s no guarantee you’ll get a favorable outcome: In 2007, only 37 percent of investors who had a hearing recovered any money. Also, since arbitration can cost between $15,000 and $50,000, it makes sense only if you’ve lost more than $30,000. If you’re out less than that, start by writing a formal letter of complaint to the supervising manager, then write one to FINRA, the Securities and Exchange Commission, or your state securities regulator. You’re unlikely to get any money back, says Eccleston, but the adviser might face disciplinary action. Even better: Protect yourself in advance by checking out a prospective financial planner’s record. The SEC lists client complaints and regulatory violations on its website (www.adviserinfo.sec.gov), where you can also get details on both SEC- and state-registered planners.

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Source: SmartMoney.com | 16 Jun 2009 | 4:00 am

6 States Hitting Residents With Big Tax Hikes (Deal of the Day)

State legislators faced with mammoth budget gaps and sharply lower revenue are looking to residents to bail them out.

Right now, at least 47 states are facing significant shortfalls in their 2009 and/or 2010 budgets, according to the Center on Budget and Policy Priorities, a think tank in Washington, D.C. And many of those states are looking to tax hikes to help fill the gaps.

“Pretty much everyone is doing poorly,” says Kim Rueben, senior research associate at the Tax Policy Center. “It’s just a question of who’s hurting more than others.”

The top honor goes to California, which is projecting that it will fall about $25 billion short come fiscal 2010. Taking second place is New York with a projected $17.6 billion deficit for fiscal 2010, according to the National Conference of State Legislatures, a bipartisan policy research organization in Washington, D.C.

How can these states miss the mark so badly? The recession has sapped the two major sources of state revenue: income taxes (thanks to rising unemployment, fewer people are getting paid) and sales taxes (quite simply, consumers are spending less.) “Those two things together really, really lead to a high loss of tax revenues, far in excess of loss of income,” says Michael Hicks, director of Ball State University’s Center for Business and Economic Research.

Even though raising taxes are typically a last resort, many states have no choice but to do so. And, in some, lawmakers are leaving no stone unturned when it comes to finding items or services to tax. New York, for instance, has raised taxes on tobacco, wine and limo services. Meanwhile, Massachusetts is proposing a tax on satellite television service and Georgia lawmakers are proposing a “pole tax” that would charge gentlemen’s club patrons $5 at the door.

To figure out which states are inflicting the biggest tax hikes on residents, SmartMoney pored over reports from tax research groups and contacted state budget offices. We looked at state budget deficits tracked by the National Conference of State Legislatures and current sales tax rate data from the Federation of Tax Administrators, a group that provides services to state tax authorities. Finally, we turned to the Tax Foundation -- a nonpartisan tax research group -- for figures on tax burden, the average percentage of each state's residents' income that is paid in state and local taxes (the figures we use are for 2008).

California: Diminishing This Huge Deficit May Just Be a Dream

State deficit estimate for fiscal 2010: $24.7 billion
Percent of general fund budget: 22.3%
State and local tax burden: 10.5%; Rank: 6

California is facing the biggest budget deficit in the nation, yet voters' willingness to chip in is starting to wane. Last month, they voted down five ballot measures that included sales and income tax increases. Who could blame them? At 11%, California has one of the worst unemployment rates in the country, the housing market has been decimated, and the state already raised taxes on sales by 1% to 8.25% and income by 0.25% (both of which expire in 2011). Gov. Arnold Schwarzenegger’s latest budget plan includes steep spending cuts across the government and cutbacks in social services.

In a testament to California’s grim predicament, one assemblyman’s proposal to legalize marijuana for personal use and allow counties to tax it is gaining public support. It’s one of the “wacky things you might be able to get away with now,” says Rueben.

New York: If It's Bad for You, It Will Be Taxed

State deficit estimate for fiscal 2010: $17.6 billion
Percent of general fund budget: 31.9%
State and local tax burden: 11.7%; Rank: 2

New York State Gov. David Paterson may have been unsuccessful in levying an 18% tax on soda and other sugary drinks in the name of combating obesity, but he’s had a hand in raising taxes on plenty of other "sinful" items, including tobacco (up to 46% from 37%) and wine (up 58% per gallon, or about two cents more per bottle).

For those living in New York, all those tax hikes can really add up. Second only to New Jersey, New Yorkers bear the second-highest tax burden thanks to a high income-tax rate of 7.85% (for those earning more than $200,000). And property and gas taxes are among the highest in the nation, according to the Tax Foundation. Nevertheless, shoppers can rejoice: The sales tax here remains relatively low at just 4%.

Florida: Driving and Smoking Will Cost You

State deficit estimate for fiscal 2010: $6 billion
Percent of general fund budget: 27%
State and local tax burden: 7.4%; Rank: 47

Florida passed its budget in May with a not-so-pleasant surprise for smokers: a $1-per-pack hike (the first such increase in 19 years). Motorists also got hit with higher fees to renew a license or register a vehicle. It could have been worse, though. Senate lawmakers had proposed eliminating the sales tax exemption on items like bottled water and tickets to sporting events, both of which didn't make the cut.

Still, residents here aren't feeling as much tax pain as some of their peers in other states. Overall, Florida's tax burden is the third-lowest in the nation and it's one of eight states that imposes no individual income tax, according to the Tax Foundation. But those perks may be outweighed by the rest of Florida's economic situation. Home values are among the nation's hardest hit and the state's $6 billion budget deficit could mean more tax hikes are on the horizon.

Massachusetts: Shoppers and Couch Potatoes, Prepare to Pay Up

State deficit estimate for fiscal 2010: $3 billion
Percent of general fund budget: 11.2%
State and local tax burden: 9.5%; Rank: 23

Just when Massachusetts was starting to shake its "Taxachusetts" nickname (it's ranked a middle-of-the-road 23rd in the Tax Foundation's tax burden assessment), the state is preparing to hike taxes on everything from alcohol to satellite TV.

The most hard-hitting for residents is a proposed increase in the sales tax to 6.25% from 5%. Both the House and Senate approved the measure and it's looking likely the increase will pass by the July 1 deadline, says Noah Berger, executive director of the Massachusetts Budget and Policy Center, an independent research group. Satellite TV subscribers may also get hit. The state is proposing a 5% sales tax on satellite services. Providers, of course, are fighting the tax.

Arizona: Proposed Sales-Tax Hike Could Hurt Already-Strapped Residents

State deficit estimate for fiscal 2010: $3 billion
Percent of general fund budget: 28.2%
State and local tax burden: 8.5%; Rank: 41

The recession has thumped Arizona harder than most other states, says Lee McPheters, research professor of economics at Arizona State University’s W.P. Carey business school. The housing slump is partially to blame: During the boom, construction accounted for at least a quarter of new jobs created. Since home prices have fallen 43% from their peak, the construction industry has lost tens of thousands of jobs, says McPheters. Arizona's unemployment rate in April was 7.7%, shy of the 8.9% national average.

If Gov. Janice Brewer gets her way, residents will pay for the state's problems by shelling out an extra 1% at the cash register. The proposed sales-tax hike, which would bring the rate to 6.6%, was omitted from the budget the legislature passed this month, but the governor may veto the budget until it’s put back in. (She could also place it on a November special election ballot.)

Nevada: What Happens in Vegas Is Going to Cost You More

State deficit estimate for fiscal 2010: $1.2 billion
Percent of general fund budget: 32%
State and local tax burden: 6.6%; Rank: 49

Nevada's freewheeling, low-tax past is coming back to haunt it like a bad hangover. The state levies no personal income tax and imposes some of the lowest taxes on businesses in the nation, says Bert Waisanen, a fiscal analyst at the National Conference of State Legislatures.

Nevada usedto be able to afford being so generous with its residents. Revenue from tourism and gambling supported the state just fine. But now, as consumers would rather put their coins in a bank account than a slot machine, that revenue source is drying up. In fact, the state boasts the dubious honor of having the largest deficit in the country as a percentage of its budget – 32%. It's hiked the sales tax by 0.35% to 6.85% and taxes on hotel rooms are up 3%. It's even gambling with its business-friendly climate by raising taxes on businesses.

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Source: SmartMoney.com | 16 Jun 2009 | 4:00 am

A Million Acres of Paydirt?

THE NEXT BIG THING IN U.S. ENERGY EXPLORATION will be the Marcellus Shale, a vast, underground layer of rock stretching from upstate New York down through Pennsylvania and into Ohio and West Virginia. By some estimates, this formation contains 50 trillion cubic feet of recoverable natural gas, enough to meet two years of gas consumption for the entire U.S. That kind of volume could go a long way to helping the country cut its dependence on foreign oil.

Enter Range Resources (RRC). A modest-sized Texas exploration outfit, it was smart enough to start buying up land rights in Marcellus Shale in 2004, when prices were still relatively cheap. It now controls some 900,000 acres of prime Marcellus soil, more than any other energy company operating in the region. If Range's drilling proves as successful as fans hope, the company's revenue could surge far, far beyond the current $1.3 billion a year.

"We are a relatively small company with a tiger by the tail," Chief Executive John Pinkerton tells Barron's. "If the tiger ends up being what everyone says it will be, our company will be 10 times bigger than it is."

All of which makes Range's stock singularly tantalizing. In the next year alone, bulls say, the stock should climb about 36%, to 65. And it could keep rising in leaps and bounds for years.

Range, however, must first overcome some real obstacles. Most notably, Congressional Democrats are seeking to regulate the hydraulic process used to force gas out of shale. The process, which involves forcing sand, water and chemicals through a pipe, is called "fracking," and industry groups insist it is time-tested and safe. But environmentalists contend fracking threatens water quality and plant life.

Embarrassingly for Range, just as the debate was heating up recently, the company reported a Pennsylvania pipeline leak that killed flora and fauna. The industry can't afford many more incidents like that. If fracking foes gain the upper hand in Washington, Range and its rivals could well run into permit delays and, consequently, earnings shortfalls.

But the company's stock managed to hold firm as the Pennsylvania saga unfolded. And believers in the promise of the Marcellus maintain that any final action by Congress will take the form of reasonable restrictions rather than flat-out prohibitions.

"Public policy has to balance cheap, domestic energy with the potential 1% risk that fracking is going to damage the water supply," says G. Warfield Hobbs, a Connecticut geologist and energy consultant with interests in the Marcellus.

For now, the biggest influence on Range's stock is the price of natural gas. Just last Thursday, the shares jumped 5% as gas prices rallied. Depressed demand in recent months has lowered the gas price to near $4 per million British thermal units, but the futures market is projecting prices will rise to near $6 by December as an improving economy and curtailed drilling help reduce the current oversupply. That could sharply boost Range's earnings, and not just from the Marcellus.

While preparing to tap the region, the company has been drilling successfully in and around Texas, beating competitors with its production numbers. And thanks to relatively low costs -- the result of acquiring land and drilling smartly -- a healthy dose of Range's revenue goes straight to the bottom line.

Bernstein Research figures Range could produce earnings of $2.12 per share in 2010, up from an expected 78 cents this year, assuming a substantial rise in natural-gas prices to keep pace with oil. Earnings like that would be far above the Wall Street consensus of 81 cents, and would result in a price-earnings ratio of 22.5, versus the consensus' dizzying multiple of 59.

"Range has one of the best growth profiles of the peer group, with an expected 14% compound annual growth rate over the next five years," writes Benjamin P. Dell, an analyst at Bernstein. He thinks Range shares could hit $62.

RANGE HAS A LONG TRACK RECORD, having gone public in 1980 as Lomak Petroleum. It listed on the New York Stock Exchange in 1996 as Range, but its growth spurt didn't begin until 2004 when it expanded into the Marcellus and later the Barnett Shale in Texas, another booming region. Range now has roughly 2.7 trillion cubic feet of proved reserves, and it posted compound annual production growth of 19% for the five years through 2008.

The company's new wells in Marcellus are yielding average daily production of seven million cubic feet -- an exceptional initial rate. In Texas, meanwhile, Range claimed earlier this year to have drilled the most productive well to date in Barnett. Together, the Barnett and Marcellus operations produce a rate of return of nearly 30% when natural gas is at $4 -- and that is "hunky dory," says CEO Pinkerton. He adds that Range will increase its total unproved reserves more than tenfold, to about 20 trillion cubic feet, by 2015.

The Marcellus Shale, while near the heart of Eastern U.S. coal production, had been ignored for years due to the expense of extracting gas and building infrastructure to transport it to customers. But now, with wells producing more gas than expected and pipelines getting built out, producers can sell East Coast gas to nearby customers at about a 30-cent premium to the benchmark price, because transportation costs are lower.

This year, Range is spending about 45% of its $700 million capital budget in the Marcellus. So far investors have been willing to pay for high exploration costs, and the company's balance sheet remains healthy.

Range has kept its long-term debt at just over 40% of total capital. And it still squeezes out a dividend of 16 cents per share, for a yield of 0.34%.

In 2010, assuming $9 natural gas, Dell of Bernstein estimates Range could generate $6.27 in cash flow, and at $7 gas, $4.67 in cash flow. That means the stock is trading at either seven times or 10 times cash flow, quite reasonable for a company with Range's large acreage and low costs.

The numbers, of course, could change quickly if Washington throws a curve ball.

Pinkerton told Barron's in April that water quality "is just not an issue. There are millions of pages of data...incredible studies." Still, the new administration -- clearly concerned about the environment and prone to increase regulation-could force energy companies to spend more money to cut risks. One private-equity investor focused on energy says regulation is likely to add costs and slow progress a bit, but adds, "The industry will realize it can treat the water and deal with it."

In addition, U.S. natural gas is a clean-burning fuel alternative, and exploiting it on a scale like the Marcellus Shale creates jobs and tax revenue in a wobbly economy.

So, with a little help from gas prices, Range could be well on its way to helping both its shareholders and its country. Unless you happen to be a coal producer, it is hard to complain about that.

The Bottom Line
Range's stock, beaten down in recent months, could climb 30% as natural gas prices rise. And if the company succeeds in the Marcellus Shale, the shares could soar for years.

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Source: SmartMoney.com | 16 Jun 2009 | 4:00 am

Where Do We Go From Here?

When you’re as bearish on the stock market as Dan Cook, you hear countless arguments about why it’s time to jump back in. The recession is ending. The government’s attempt to fix the banks is working. The rate of job losses is slowing down. Blah, blah, blah. Cook doesn’t believe any of it. As the senior markets analyst with global investment and trading house IG Markets, Cook, 37, advises institutions and wealthy people about what to do with their money. Forget about all the sunny forecasts that came with the spring rally. His most recent outlook is more like a storm warning: The stock market is “in the eye of the hurricane and the clouds are closing in again.”

In a year that has seen stocks fall 20 percent in nine weeks, only to recover all of that and bounce way above the lows in the following weeks, it’s no surprise that investors are having a hard time figuring out what to do. And they’re not alone; professional investors are equally torn. More than 42 percent of fund managers in a recent survey believed stocks were undervalued, according to Merrill Lynch, yet nearly the same percentage of pros were underweighted in stocks and disproportionately invested in bonds or cash. The rally coaxed some managers to step up and buy, but a significant number remained on the sidelines, seemingly afraid to get back in.

From his office just outside Chicago’s Loop, Cook discounts the market’s rebound for one main reason: He thinks the nation’s banks are still in trouble. For the past year Cook’s daily notes to his firm’s 70,000 clients—many of whom are foreign-currency and options traders—have been filled with warnings about the outlook for the U.S. stock market. At one point, he even apologized for exhausting all the synonyms he knew for the word dire. “There are only so many ways to say that the global economy stinks,” he wrote.

But 350 miles east on Interstate-80, another Midwest market guru takes the opposite view. Bruce McCain, chief investment strategist at Cleveland-based Key Private Bank, is convinced the recovery is for real. McCain, 55, had been a stock skeptic since 2000, worrying that equity prices were too high then and never got low enough to be considered bargains. Even during the rally from 2003 to 2007, he cautioned clients to be less aggressive with stocks. His reticence spared those who took his advice the worst of the market crash. But these days he’s telling the people who have given Key Private Bank $22 billion to invest that he’s buying stocks, both here and abroad. As the economy shows early signs of improvement, McCain says the risks of not being in the market now outweigh the risk of being too aggressive.

So who’s right? The bear or the bull? SmartMoney checked in with both to hear their best arguments. What they had to say helps sum up a debate now taking place in trading pits and investment committee meetings around the world.

SmartMoney: Let’s start with the obvious question, Bruce. Why are you bullish?

Bruce McCain: We’ve seen a fairly typical market bottoming process, lows in October and a test of those bottoms in March. What we’ve seen more recently are a variety of economic statistics, particularly leading statistics, showing major signs of stabilization in the economy. The market psychology has shifted away from outright panic to looking for a recovery and even feeling that if you don’t invest now, you’re missing out. With the odds of hitting a new low relatively low, we feel we can get out front on this.

SM: Dan, you aren’t convinced.

Dan Cook: When I look at the rally we’ve had, I want to inspect the foundation, and in the foundation we have some cracks. The spring rally was sparked by [Treasury Secretary] Timothy Geithner’s Public-Private Investment Program, the PPIP. There are still a whole lot of unanswered questions about how it will work. The Treasury also has thrown $1 trillion of liquidity into the system. We’re seeing that die out. Until the banks really recover, we won’t have a whole recovery.

SM: Bruce, even though you’re bullish, you still expect the market could pull back at some point?

BM: Yes, we’re looking for a pullback. The question is, how much. Since I think we’ve turned the corner on investor psychology, a 5 to 10 percent pullback is something I’d look for, as opposed to a much deeper dive.

SM: Dan?

DC: I think we could still see the stock market rally in the short term. However, the bigger issue is employment.

SM: Why’s that?

DC: Without a job, it’s difficult to pay the bills. When there’s no job, there’s less spending, and less spending means less corporate profits and no reason for the market to keep going higher.

SM: What indicators are you following that lead to your bearish outlook?

DC: In addition to employment, I’m looking at the bank reports, not just the headlines that say they’re profitable. I want to know why they’re profitable. At least in the first quarter, it’s been because they are doing a lot of mortgage refinancing business. That won’t last.

BM: We’re big believers that the markets are one of the best indicators of the economy. It’s not just what the averages are doing either. We look at where investors are putting their dollars—technology stocks, consumer discretionary stocks and other stocks that do well when the economy is turning for the better. We also look at leading indicators like initial jobless claims. They still don’t look good, more jobs are being lost, but you see that the rate of change is not as extreme as it was a few months ago.

SM: Do you think we’ve made progress on resolving the banking crisis?

DC: We’ve seen credit spreads [interest rate differences] between Treasury bonds and corporate bonds get closer. That’s a positive. But they’re still wider than you would see in a “normal” lending scenario. And there’s still no credit. Banks are killing a lot of credit to good people because they don’t know who will have a job from one month to the next.

BM: That’s a deep question. At least with the banks, it’s the devil you know. The problems with the banks are, at least, largely knowable. Since there are some indications that the housing market is beginning to shore up, we might have also seen the worst of it in the banks.

SM: If someone gave you $10,000 in cash to invest right now, where would you put it?

BM: We’d definitely be moving out of a defensive posture and into areas that benefit from a growing economy. So we’d put some into commodities and emerging markets. We also would put some into basic industries and technology, too.

DC: If I had to put it in the stock market, I’d look at companies that are going to be around, a name like Johnson & Johnson. It won’t be a huge grower, but I still want to be defensive. J&J won’t have a bad return over a few years. I do think the dollar will rally. In fact, the U.S. dollar will be stronger against most every currency with the exception of the yen, to the chagrin of the Japanese economy.

SM: What about in fixed income such as bonds?

BM: We’re pretty skeptical that you can make money from Treasurys. They’ve been a good place to be defensive, but if you look out into the future, the biggest concern is that the government makes a mistake, leaving too much liquidity in the system and fueling inflation. So if you wanted fixed income, we’d put it only in inflation-protected securities.

SM: Dan, is there anything that makes you hopeful?

DC: Some of the things we’ve put in place, like guaranteeing commercial paper, keeping interest rates low and other things will work potentially faster than I expect. If I see debt defaults and unemployment start to stabilize, then I’ll be sold. I just don’t think we’ll be creating jobs anytime soon. Those “green shoots” people say they see in the economy, I don’t see those.

SM: Bruce, what worries you?

BM: It’s not hard for me to flip and take the other side. Our biggest concern is what sorts of policy shifts are coming from Washington. We’re talking about pretty radical things, like taxing carbon use. We could push many businesses beyond the breaking point.

SM: Do you not like what the Fed has been doing?

BM: The Fed has done a pretty good job providing us with liquidity. However, can they remove that liquidity fast enough to avoid big inflation? On the fiscal side, we have some real concerns that Washington is pushing the limits on what the economy can bear, the massive amounts of spending.

DC: I’m in agreement with Bruce about the Fed. I’d like to see a little more of an exit strategy, like how they will withdraw all the liquidity. And we haven’t addressed all the issues, like monitoring companies that might pose a systemic risk to the financial system.

SM: Have either of you ever experienced a market like this, with a big crash followed by a sharp rebound?

BM: The last time something like this occurred was in 1974. I wasn’t actively involved in the securities industry at that point—I was in college.

DC: Yes, you’d have to go back definitely to the 1970s for a parallel to today’s market. Back then I would have still been home watching The Match Game with my mom.

SMARTMONEY ® Layout and look and feel of SmartMoney.com are trademarks of SmartMoney, a joint venture between Dow Jones & Company, Inc. and Hearst SM Partnership. © 1995 - 2009 SmartMoney. All Rights Reserved.

Source: SmartMoney.com | 16 Jun 2009 | 4:00 am

Nufarm issues profit warning

Agricultural chemicals upplier Nufarm Ltd says its net operating profit for the current financial year is likely to be about 15 per cent lower than previously forecast. Nufarm said today that the profit downgrade was a result of...
Source: New Zealand Herald - Business | 16 Jun 2009 | 2:30 am

'No mercy', Madoff's victims implore judge

NEW YORK - More than 100 victims of failed financier Bernard Madoff's multibillion-dollar fraud today urged a New York judge to sentence him harshly, saying he ruined their lives, leaving many of them depressed, bitter and hopeless. In...
Source: New Zealand Herald - Business | 16 Jun 2009 | 2:15 am

From shelve stacker to millionaire - Simon Calver

Stacking shelves aged 12 in his grandfather's supermarket in Gloucester gave Simon Calver an early taste for marketing. Now 44, he is still grateful for the experience: “It gave me the best possible early introduction to customer service and an understanding of brands.”
Source: Latest Business News from Times Online | 16 Jun 2009 | 12:00 am

Wine industry hits $1 billion export target a year early

The wine industry has produced another bumper grape harvest but global recession and increased supply are putting pressure on prices. The 2009 grape harvest of 285,000 tonnes is the same size as last season - when wineries underestimated...
Source: New Zealand Herald - Business | 15 Jun 2009 | 11:30 pm

IBD's Top 10 - Monday (Investor's Business Daily)

Investor's Business Daily - 1 Stocks sold off in higher volume, pushed down by profit-taking and weak economic data. The Dow fell 2.1%, the Nasdaq 2.3%, the S&P 500 2.4% and the NYSE composite 2.9%. Many of the top stocks fell, but in below-average trade. All of the IBD 197 groups took a loss, with metal groups especially hard-hit.
Source: Yahoo! News: Stock Markets News | 15 Jun 2009 | 11:17 pm

Write-Offs: 06.15.09

$$$ Who wants to buy the world's biggest yacht?
It's got two helicopter pads, several hot tubs, a pool, three launch boats, and a private submarine, plus "a special missile-detection system." And it may be for sale! [WSJ]

$$$ So whatever happened to Paul Volcker? [The Deal]

$$$ `Monster' Madoff Deserves `No Hope,' Fraud Victims' Letters to Court Say [Bloomberg]

Sponsored Topics: Submarine - Deal - Paul Volcker - Hot tub - Bernard Madoff
Source: Dealbreaker | 15 Jun 2009 | 11:12 pm

AIG boss accused of $4.3bn share plunder

NEW YORK - The former top executive of American International Group plundered an AIG retirement program of billions of dollars because he was angry at being forced out of the company, a lawyer for AIG told jurors on Monday at the...
Source: New Zealand Herald - Business | 15 Jun 2009 | 11:00 pm

NZ stocks: Sharemarket falls, tracking US down

The New Zealand sharemarket tumbled in early trade, following the lead of global sharemarkets. The sharp slide in global stocks followed weak factory activity data in the United States and news of record job losses in Europe, raising...
Source: New Zealand Herald - Business | 15 Jun 2009 | 10:45 pm

Blue Star issues $7m in new shares to parent

Blue Star Print Group has issued $7.47 million in new shares to its parent company Sirius NZ Finance Co Ltd to pay off a loan dating back to September 2008. The shares, issued at $1 each, represented about 33 per cent of the company's...
Source: New Zealand Herald - Business | 15 Jun 2009 | 10:30 pm

Lending rate for SMEs at standstill

Overdraft lending rates for small and medium-sized businesses have remained virtually static for the last three months despite April's 50 basis point cut to the official cash rate, new Reserve Bank data shows. Despite growing debate...
Source: New Zealand Herald - Business | 15 Jun 2009 | 10:30 pm

Hear: The Trouble With Tariffs

On today's Planet Money:

You may have heard something about the new iPhone. But have you heard about the Harmonized Tariff Schedule? That's the giant book of guidelines by which import specialists like Brett Ewing and Jim Henderson classify everything from wood flooring to handheld gizmos for importing into the United States.

Their mission is to determine whether importers have paid the right duties on their goods, and whether exporters are illegally dumping their wares on the American markets. Economists say tariffs, their main tool, make things more expensive for everyone.

Bonus: View from a passing train.

Download the podcast; or subscribe. Intro music: Kasabian's "Underdog." Find us: Twitter/ Facebook/ Flickr.

Phawkwood writes:

I've been volunteering for a small tourist railroad in Belton, MO (just south of Kansas City MO) for 9 years. Our line runs behind the shop and equipment yard for an excavation company. In all that time I think this is the most equipment I've seen parked in the yard. Even on weekends when the train runs there would only be a few things parked there.

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Source: NPR Blogs: Planet Money | 15 Jun 2009 | 10:28 pm

Geithner Is Not Going There

A couple weeks after being laughed at by a room full of students at Peking University for his "Chinese assets are very safe" quip, Timmy did not take the bait this morning when he was asked the one question Barney Frank and Mad Max are dying to answer for him.

When asked if bankers care about anything other than compensation, Mr. Geithner said, "That is a very interesting question. I'm not going to answer that question. I think it is hard to judge motivation on these things."

Geithner Gives Update on the Financial Rescue [Dealbook]

Sponsored Topics: Barney Frank - Peking University - Mad Max - Business - Chinese language
Source: Dealbreaker | 15 Jun 2009 | 10:24 pm

Tim Geithner Is Not Too Good To [Verb] His Own [Noun]

Obviously a lot of ways to go with this one. Fill in the blanks now, big reveal after the jump.

Sponsored Topics: Timothy F. Geithner - United States Secretary of the Treasury - Bailout - Business - ElizabethWarren
Source: Dealbreaker | 15 Jun 2009 | 9:51 pm

How the major stock indexes fared on Monday (AP)

AP - The Dow Jones industrials fell nearly 190 points Monday, their biggest drop since April 20, and all the major indexes closed down more than 2 percent, indicating that the market's spring rally has stalled. The slide began in Asia and Europe and spread to the U.S. as a strong dollar pushed commodities prices such as oil sharply lower.
Source: Yahoo! News: Business | 15 Jun 2009 | 9:41 pm

How the major stock indexes fared on Monday (AP)

AP - The Dow Jones industrials fell nearly 190 points Monday, their biggest drop since April 20, and all the major indexes closed down more than 2 percent, indicating that the market's spring rally has stalled. The slide began in Asia and Europe and spread to the U.S. as a strong dollar pushed commodities prices such as oil sharply lower.
Source: Yahoo! News: Stock Markets News | 15 Jun 2009 | 9:41 pm

Citi "Hopes" To Repay TARP.....Someday

Citi Chairman Dick Parsons is on board with the whole $45 billion TARP repayment thing, but isn't quite so brazen as to issue a timetable that the bank will never meet. But this is not to say that Citi doesn't have a credible, well thought out plan for addressing its massive bailout.

Parson said Citi recently filed with the government a capital plan that outlines the bank's strategy going forward for repaying TARP.

He declined to give the specifics of the strategy, but said "so much of it will depend on the cooperation of the markets."

Citi chair says no timetable for repaying TARP [Reuters]

Sponsored Topics: Troubled Asset Relief Program - Business - Citibank - Financial Services - Banks and Institutions
Source: Dealbreaker | 15 Jun 2009 | 8:52 pm

Presented By:

Source: Dealbreaker | 15 Jun 2009 | 8:52 pm

Dollar gains on support from Russian official (AP)

AP - The dollar steamed sharply higher Monday after the Russian finance minister voiced his support for the currency, even as the U.S. government said foreigners' dollar-denominated holdings fell in April. Sliding stock markets also fueled dollar buyers.
Source: Yahoo! News: Stock Markets News | 15 Jun 2009 | 8:23 pm

Russians Still Like The Dollar

The dollar rose more than every other major currency (except the yen) this afternoon, to a three-week high. And who's behind the greenback's rising?

Russia. Earlier today, Russian Finance Minister Alexei Kudrin helped to quell fears about the specter of weakening dollar falling out of favor as the world's main reserve currency, saying that his nation has full confidence in the U.S. dollar.

Earlier this month, Russian President Dmitry Medvedev cast doubt on the greenback's reliability.

Kudrin's comments come at the start of the first BRIC Summit, a meeting of Brazil, China, Russia, and India. Those four nations control 42 percent of global currency reserves.

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Source: NPR Blogs: Planet Money | 15 Jun 2009 | 8:19 pm

AstraZeneca Raised to `Buy' at Citigroup

Source: Bloomberg - All Podcasts | 15 Jun 2009 | 8:11 pm

Construction Somewhere Ahead

Kelly Adams checks in from Tumwater:

My economic indicator is $4.29 million. That's the budget for a road works project we here in Tumwater, Washington, have been suffering through on one of our major arterials. A couple of months ago all construction stopped when the contractor abruptly went out of business.

Littlerock Road runs north/south, parallel to I-5. It's been a two-lane road forever, connecting the rural south end to the strip-mall center of Tumwater. Suburban growth has made it a mess so the City of Tumwater decided to upgrade the northern strip.

Where this leaves the project and the community is in limbo. The project (aside from utilities installation) is completely halted and remains a mess of patched up roads, detours, dirt, dust and hay on the verges. We've been told the bond-holding company will now have to decide what action will be taken, from assigning a contractor to take over the project or return to a bid stage. Either way, it is unlikely to restart construction before the end of the year. What a mess!

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Source: NPR Blogs: Planet Money | 15 Jun 2009 | 7:55 pm

Oil falls near 2 percent on firmer dollar (Reuters)

Reuters - Oil fell nearly 2 percent a barrel on Monday, extending its retreat from a near eight-month high as the dollar firmed and stock markets tumbled.

Source: Yahoo! News: Stock Markets News | 15 Jun 2009 | 7:31 pm

Merk Says G-8 Too Optimistic About Economic Recovery

Source: Bloomberg - All Podcasts | 15 Jun 2009 | 7:16 pm

Stephens Says New GM Will Be More Customer Focused

Source: Bloomberg - All Podcasts | 15 Jun 2009 | 7:03 pm

20 Father’s Day Gifts Under $200

Need a Father’s Day gift on the cheap? Scoop up one of the deals below to please Dad while keeping your pocketbook padded:

1. Multi-Gadget Charger

Image: FrontGate

Estimated price: $50

This snazzy universal charging dock lets Dad charge up to 12 devices simultaneously. Compatible with most brands, including BlackBerry and Apple, this dock makes tangled up wall adapters a thing of the past.

2. Cooler/Grill Combo

Estimated price: $153

We featured this baby in 20 Gifts for Grads Under $200, and we’re touting it again. Tailgaters will be floored when they see this all-in-one roll up before the big game. It’s also handy for camping, BBQ-ing, and affording Dad instant popularity.

3. iPhone 3G

Image: Seth Hughes

Estimated price: $99

For only $99, how could you not treat Dad to the Apple of his eye? Get one for yourself while you’re at it.

4. Steak Branding Iron

Image: Texas Irons

Estimated price: $80

Nothing shows pride of ownership like a real Texas branding iron—for steak. Texas Irons offers a set with all 26 letters of the alphabet and an “&” symbol. It comes in a wooden box with custom initials branded on top. And hey, if Dad burns the steak at the neighborhood BBQ, he can always brand the neighbor’s initials into it.

5. Beer-of-the-Month Club

Estimated price: $35/month

Save Dad a trip to the liquor store by having microbrews deposited right at his doorstep. Bonus: If you give him 12 beers a month, you’ll probably earn his gratitude for 12 months a year.

6. GPS

Estimated price: $160

Ensure Dad never has to ask for directions gets lost again with a brand new GPS.

7. Discovery Flight

Estimated price: $120

Give your aspiring aviator the time of his life with an introductory flight, also known as a discovery flight. Most flight schools offer these get-you-hooked specials for less than $130. But remind Dad that if he gets addicted, the tab’s on him.

8. USB Drive

Estimated price: $75

Craftsy USB drives like the steampunk one above have taken computer users by storm. Find the perfect drive for Dad at Etsy or ThinkGeek.

9. Money Clip

Estimated price: $43

Dad will feel like a high roller with a fancy metal money clip like the one above.

10. DVD Box Set

Estimated price: $35

Let Pops revel in his favorite series by gifting him a DVD box set of his favorite TV series. Most sets include one full season and cost between $35-$40.

11. Stock Car Racing Experience

Image: 877stockcar.com

Estimated price: $99

Dad a NASCAR or F-1 fan? Amp him up with a 160+ mph ride on a professional speedway. Most driving schools offer 3 laps in the shotgun seat for around $100.

12. Personalized Shop Sign

Image: Personal Creations

Estimated price: $70

Personal Creations casts retro shop plaques that complement Dad’s favorite hangout, be it the garage, den, tool shed, or—if he can get away with mounting his own signs—local brewpub. Dad will love seeing his name on the placard.

13. Remote Controlled Airplane

Image: ModelsAviation

Estimated price: $140

If your dad hasn’t yet had the chance to become addicted to RC flying objects, give him the chance with an entry-level plane like this one. If he digs it, buy him an aerial cam for his birthday.

14. New Wallet

Estimated price: $25

If he can’t stand to part with his time-worn billfold, tempt Dad with a snazzy new one. Overstock.com offers nice leather ones for as little as $12.

15. Portable Hammock

Estimated price: $110

Portable hammocks, like this one by Kelsyus, afford Dad the opportunity to lounge in style in the backyard, on the beach, or on the campground. At 27 lbs, the hammock is lightweight, but holds up to 250 lbs. It comes with an inflatable pillow and special carrier.

16. Laptop Lap Desk

Image: Laptopdesk.net

Estimated price: $80

If your Dad likes his laptop, offer him increased comfort and convenience with a laptop lap desk like the one above, which comes equipped with a cooling fan, 4-port USB hub, hardwired USB cable, and adjustable tilt/height.

17. 7-in-1 Roadside Emergency Tool

Image: SwissTechTools

Estimated price: $30

The whole family will benefit from this lightweight safety tool, which includes a flashlight, alarm, flasher, thermometer, tire gauge, seatbelt cutter, and window breaker. The compact device prepares you for most car accidents, but fits easily onto your keychain. It even comes with a battery.

18. Custom T-Shirt

Source: NorthShoreShirts

Estimated price: $22

Show off your World’s Greatest Dad by gifting him a T-shirt saying as much. Have your kids place paint handprints on the shirt to secure the cause.

19. BBQ Sauce Gift Basket

Estimated price: $46

Make Dad feel like a grilling gourmand with a BBQ sauce gift basket. GourmetMike’s offers a complete set that includes cherry rub, four different kinds of specialty BBQ sauce, and a basting brush.

20. BBQ Set

Estimated price: $100

Make Dad a grillmeister with a shiny new barbeque set. The 10-piece set above, sold by Brookstone, includes a heat-proof grill light, a computerized chef’s fork, stainless steel tools, and a neat-looking molded case. What more can you want? Oh, right—it’s Wall Street Journal approved, too!

Bonus! 21. Waterproof Shower Radio/Music Player

Image: SlipperyBrick

Estimated price: $48

Dad won’t miss a beat with a quality radio tuner/weather band like this one from Sony. It works equally well in the shower, the garage, and outside.

Source: Business Pundit | 15 Jun 2009 | 6:55 pm

Harvard's Briscoe Says 80% of Water Use Is for Agriculture

Source: Bloomberg - All Podcasts | 15 Jun 2009 | 6:07 pm

Six Flags Files Chapter 11 Bankruptcy. Is Redskins Owner to Blame?

Six Flags filed for Chapter 11 bankruptcy protection two days ago. TradingMarkets has the scoop:

On June 13, the New York City-headquartered company said that it and certain of its subsidiaries have begun reorganization proceedings under the Chapter 11 Bankruptcy Code. The company then said that the plan would result in a deleveraging of its balance sheet by approximately $1.8 billion, as well as the elimination of more than $300 million in mandatorily redeemable preferred stock obligations.

The companies included in the bankruptcy filing were Six Flags, Inc., Six Flags Operations Inc., or SFO, and Six Flags Theme Parks Inc., or SFTP, and certain of SFTP’s domestic subsidiaries.

According to Mark Shapiro, President and Chief Executive Officer of Six Flags, the current management team inherited a $2.4 billion debt load that cannot be sustained, particularly in the challenging financial markets.

“No one should be confused about what a bankruptcy process means for Six Flags. Following a record year of performance in 2008, which completed the three-year turnaround of our system-wide park operation, this action to clean up the balance sheet paves the way for a full revival of the company. We will emerge from this process stronger and more competitive than ever,” Shapiro noted.

A Forbes article said that the company tried to reorganize out of Chapter 11, but failed. The article also implies that Six Flags’ problems have a lot to do with Washington Redskins owner Daniel Snyder, who owns a 6% stake as the result of a 2005 proxy battle:

Billionaire Washington Redskins owner Daniel Synder (SIC), who ranks 701st on our most recent list of the World’s Richest People with a fortune we reckon at $1 billion, owns 6% of Six Flags. He became chairman three and a half years ago, installing new managers to turn round a company that hadn’t posted an annual profit since 1998.

It had losses of $558.8 million in the two years since Synder (SIC) became chairman.

Interestingly, the Forbes article misspelled Snyder’s last name as “Synder.” According to CityPaper’s Dave McKenna, who has been following the Six Flags/Snyder evolution for quite a while, this isn’t the first time this misspelling has happened. Sometimes people do it deliberately, to spite Snyder. And Snyder hates it.

Is Snyder to blame? You’ll have to draw your own conclusions. But if opening a themed line of kids’ hair salons in light of monumental debt is any indication of Snyder’s business prowess, the answer is obvious.

Todd Sullivan has more on Snyder and Six Flags.

(Image source)

Source: Business Pundit | 15 Jun 2009 | 5:36 pm

Planet Money Road Trip

Caitlin, David, and I are hitting the road for Planet Money's first mini-road trip.

We are doing an event with WBUR in Boston next Wednesday, June 24th so thought we'd leave a bit early and run the blog and podcast from the road. It's a quick trial run before some more ambitious road trips we want to do later this summer.

Please help us. We need stories.

Specifically, we want to find people and businesses coming up with creative and profitable responses to the financial crisis.

I remember interviewing plastics manufacturers in Erie, PA, a few years ago. Many had shut down or were about to. They couldn't compete with far cheaper Chinese imports. But a handful came up with creative solutions. The most successful was a guy who hired some engineers to design better caps for bottled water. He turned his commodity plastics business into a profitable innovation company.

This morning, on Morning Edition, Jim Zarroli had a story about an ad agency using all the recent layoffs in the industry to try a new business model.

Our listeners keep asking us to do some positive stories to break up the unrelenting misery we sometimes seem to cover. We want to find some of the tiny mammals looking at all those dinosaurs dying.

Do you see anything like that happening in Connecticut, Massachusetts or Rhode Island?

Preferably somewhere roughly along this route.

Please hit the comments or email us.

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Source: NPR Blogs: Planet Money | 15 Jun 2009 | 5:15 pm

U.S. home-builder sentiment slips in June (Reuters)

Reuters - U.S. home-builder sentiment slipped in June, a private survey showed on Monday, as higher mortgage rates and an ongoing credit crunch dampened expectations for the sector.
Source: Yahoo! News: Business | 15 Jun 2009 | 5:04 pm

Foreign investors wary over U.S. deficit

Foreign investment in U.S. debt is on the decline. Bob Moon reports why this is a sign that the U.S. must control its growing deficit.
Source: Marketplace | 15 Jun 2009 | 4:54 pm

N.Y. firm feels safe in Iraqi securities

A New York firm is teaming up with an Iraqi brokerage to sell Iraqi securities for the first time since the 2003 invasion. Jeremy Hobson reports.
Source: Marketplace | 15 Jun 2009 | 4:54 pm

Lieberman Says Obama's Blocking of Photos Protects Troops

Source: Bloomberg - All Podcasts | 15 Jun 2009 | 4:54 pm

How Vans got off on the right foot

Vans has long been the footwear of choice for skateboarders, but it didn't start that way. Kai Ryssdal visits the company's Southern California headquarters and talks with author Doug Palladini about how the shoes caught on.
Source: Marketplace | 15 Jun 2009 | 4:54 pm

Idled ships wait out economic trough

People who live alongside a hidden stretch of river in southwest England are getting used to some new landmarks. Their quiet backwater has become a parking garage for anchored cargo ships. Stephen Beard reports.
Source: Marketplace | 15 Jun 2009 | 4:53 pm

How to conquer health care challenges

Health care economist Glenn Melnick talks with Kai Ryssdal about challenges to reforming the health care system, how to get it done, and the costs of making changes.
Source: Marketplace | 15 Jun 2009 | 4:53 pm

AMA gives Obama plan bad diagnosis

President Obama is on a health care reform campaign and wants to cut costs. But the American Medical Association wants a second opinion on his proposed plan. Jill Barshay reports.
Source: Marketplace | 15 Jun 2009 | 4:53 pm

Has financial reform moment passed?

Treasury Secretary Timothy Geithner and White House adviser Larry Summers have laid out plans for a financial overhaul, but some worry the moment has passed. Amy Scott reports.
Source: Marketplace | 15 Jun 2009 | 4:53 pm

Top 12 Indicators That The Economy Is Bad

Received this in my email inbox today:

12. CEO’s are now playing miniature golf.

11. I got a pre-declined credit card in the mail.

10. I went to buy a toaster oven and they gave me a bank.

9. Hotwheels and Matchbox car companies are now trading higher than GM in the stock market.

8. Obama met with small businesses - GE, Pfizer, Chrysler, Citigroup and GM, to discuss the Stimulus Package.

7. McDonalds is selling the 1/4 ouncer.

6 People in Beverly Hills fired their nannies and are learning their children’s names.

5. The most highly-paid job is now jury duty.

4. People in Africa are donating money to Americans.

3. Motel Six won’t leave the lights on.

2. The Mafia is laying off judges.

1. If the bank returns your check marked as “insufficient funds,” you have to call them and ask if they meant you or them.

Source: Business Pundit | 15 Jun 2009 | 4:43 pm

Where Old Spaceships Go To Die

Jeffrey Wachs from Los Angeles listened to Friday's podcast on the space economy and sent us this picture from the Mojave Air and Spaceport, where new space companies are testing their rockets. Nearby is a cool junkyard -- a final resting place for experimental aircraft and spaceships.

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Source: NPR Blogs: Planet Money | 15 Jun 2009 | 4:40 pm

ITC's Welch Says Electric Grid Plagued by Old Infrastructure

Source: Bloomberg - All Podcasts | 15 Jun 2009 | 4:39 pm

Extended Stay Hotels Files Chapter 11

Image: Extended Stay Hotels

The AP this morning reported that Extended Stay Hotels, LLC, owned by the Lightstone Group (one of the nation’s biggest private real estate companies), filed for Chapter 11 bankruptcy protection today. Extended Stay runs more than 650 hotels in the US and Canada, according to the AP. All Extended Stay brands, Homestead Studio Suites, StudioPLUS Deluxe studios, and Crossland Economy Studios are affected.

Why not just retool the slogan? “Extended Stay: Your Post-Foreclosure Home Away from Home.” The chain could turn into a sort of halfway house for people kicked out by the bank. The business traveler meme is so 2004.

Source: Business Pundit | 15 Jun 2009 | 4:00 pm

IMF: U.S. Not Doing So Bad

Another bit of news that hints at the possible winding down of the recession: the International Monetary Fund has raised its outlook for the American economy and is calling for a plan to help ease us out of the downturn. The details, from the IMF:

The combination of financial strains and ongoing adjustments in the housing and labor markets is expected to restrain growth for some time, with a solid recovery projected to emerge only in mid-2010. Against this background, GDP is expected to contract by 2 1/2 percent in 2009, followed by a modest 3/4 percent expansion in 2010 on a year-average basis

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Source: NPR Blogs: Planet Money | 15 Jun 2009 | 3:32 pm

Ener1 Wants to Win Lithium Ion Battery Race

Image: CarSpace

Lithium ion battery manufacturer Ener1 (HEV) could become the country’s first lithium ion battery mass producer–if it wins a $480M Department of Energy loan. CNNMoney has more:

Ener1’s newly opened production facility near Indianapolis could employ 3,000 workers. Like other renewable energy companies popping up in the Midwest, people are hoping Ener1 can replace some of the fast-disappearing auto and other manufacturing jobs.

Its lithium-ion battery technology is praised for being one of the best available. But Ener1 must compete for big contracts against larger, mostly Asian firms with much more experience in this field. The company has applied for a $480 million government loan to expand its facility and hopefully allow it to land a big contract. If that happens, Ener1 says it will go on a hiring spree.

Many of its competitors, including Japan’s Panasonic and NEC, South Korea’s LG, and a joint venture between U.S.-based Johnson Controls (JCI, Fortune 500) and the French company Saft, have been making batteries in high volumes for decades. (Ed: The WSJ reports that these are mainly for small devices like laptops and mobile devices. The lithium ion specialty remains a new one.)

If Ford or General Motors are going to buy batteries for an electric car, they need confidence the company they’re buying from can deliver. The lack of experience may be one reason why GM decided to go with LG when choosing a battery supplier for its much-hyped Volt.

As the automobile industry prepares to shift from gas to electric power, grant-hungry battery manufacturers are lining up to gather $2.4 billion worth of loans and grants from the Department of Energy. The WSJ has more:

At the (application) deadline last week, the department said it had received 165 (grant and loan) applications. Companies vying for the federal money include General Motors Corp., Dow Chemical Co., Johnson Controls Inc. and A123 Systems, a closely held battery maker backed by General Electric Co. and others. States including Michigan, Kentucky and Massachusetts are also weighing in with applications, usually in alliance with their favored battery makers.

When the winners are decided, as soon as the end of July, the Energy Department may anoint Livonia, Mich., or Indianapolis or Glendale, Ky., as the future U.S. hub of car batteries. A 2008 study by researchers at Alliance Bernstein forecast the current $9 billion-a-year auto-battery market, based on lead-acid batteries, could reach more than $150 billion by 2030.

The Obama administration is trying to position the United States to become the world’s foremost manufacturer of lithium ion batteries. If the plan works, Ener1’s domestic first-mover advantages could poise it to control the global LI battery industry. “Ener1 estimates it could win 5-12% of a million-vehicle battery market, creating $2.1B in annual revenue with 15% margins,” according to Seeking Alpha. As it stands, nobody knows yet whether the DOE will give it the necessary grant.

There’s an interesting twist to this potentially All-American story. Seeking Alpha reports that…

…66% of Ener1 Group is held by a company whose ‘indirect beneficial owner’ is Boris Zingarevich, a Russian businessman with close ties to Russian President Dmitry Medvedev and Prime Minister Vladimir Putin. Foreign control theoretically shouldn’t matter to the Department of Energy, but it is looking to foster an American advanced-battery industry, not a Russian-controlled one. This is especially true since advanced batteries are likely to have military uses in addition to civilian ones.

For now, Ener1 remains optimistic. And the lithium ion battery story is just beginning.

Source: Business Pundit | 15 Jun 2009 | 3:30 pm

Scared Of Chinese Pencils

Jim Henderson and Bret Ewing are import specialists. That means they sit in an office near the Port of Seattle and monitor every kind of product that enters the country. They are supposed to make sure that importers have paid the appropriate customs duties.

Jim has an encyclopedic knowledge of the U.S. Tariff Schedule (he's also got that enormous book to help him). The tariffs are essentially in place to protect American industry. And lately Jim's been worried about pencils -- pencils from China, to be exact.

At some point, the domestic pencil industry charged that Chinese pencil manufacturers were flooding the U.S. market and selling their pencils for less than it costs to make them. The U.S. government agreed (still does) and said Chinese cased pencils are subject to antidumping (higher duties).

Jim's been seeing a lot of children's gift sets from China lately, with erasers, pens, markers and pencils in them. That raises a red flag, he says. It could be an importer trying to evade the antidumping fees by masking Chinese pencils in the set. He's been investigating. Meanwhile his colleague, Bret Ewing, has been focused on a Frontseating Service valve (apparently it goes in air conditioners), also from China, to see if it is subject to antidumping laws, too.

We've got more from these guys and their strange little spot in the global economy on today's podcast.

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Source: NPR Blogs: Planet Money | 15 Jun 2009 | 3:23 pm

What Disappeared From The Plan

We've been waiting to see the White House proposal for regulatory reform. (Let's just call it the plan for How To Prevent This From Happening Again.) Tim Geithner and Larry Summers have an op-ed in the Washington Post this morning, giving a preview. It's interesting to compare the emerging plan with Geithner's testimony on the hill in March. Back then he said:

"We can't allow institutions to cherry pick among competing regulators, and shift risk to where it faces the lowest standards and constraints."

That was when there was talk about eliminating some regulators, like the Office of Thrift Supervision, which oversaw AIG.

There's no mention of that in the op-ed today.

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Source: NPR Blogs: Planet Money | 15 Jun 2009 | 2:53 pm