Bank Lobby Loves Reg Reform

One way to gauge a proposal like President Obama's plan for overhauling regulation of the financial system is to look at who likes it and who objects.

In this case, the bankers like it -- a lot. From the Financial Services Roundtable, which represents a hundred of America's largest banking institutions:

The Financial Services Roundtable applauds the Administration's announcement of a proposal for modernizing regulation of the financial services industry. Our economic recovery depends on these reforms. The Roundtable has long advocated regulatory reform, and believes reform must be comprehensive, creative and bold.

"It is important to strengthen the system to protect the consumer, the industry and the economy," said Steve Bartlett, President and CEO for the Roundtable.

The Roundtable supports many of the Administration's proposals, like the creation of a systemic risk oversight authority that is able to look at the entire financial structure, and can target systemically important practices and activities. The past two years have clearly demonstrated what happens when risk is not properly assessed in our industry. As such, we also support the creation of a national resolution authority to adequately prepare for the orderly resolution of failing institutions. The financial services industry does not necessarily need more regulation, but rather more effective regulation.

The six principles set forth in the Administration proposal represent a strong recognition of the need to modernize insurance regulation. The Roundtable applauds the initial legislative proposal of an Office of National Insurance, but believes we must go farther. The ideals of consolidated supervision, consistent consumer protection, uniform regulatory treatment, among others, necessitate the enactment of a comprehensive, uniform federal charter. State regulation has simply failed to keep pace with what, today, is a national and international business. Taxpayers and insurance consumers can no longer afford the price of this failure.

The Roundtable is opposed to the creation of the Consumer Financial Protection Agency because it will not adequately serve the best interests of consumers and their financial institutions. The Roundtable opposes separating the regulation of the entity from the regulation of the products, as each regulator will only have half of the information. Under the Roundtable's regulatory plan, an existing regulator could better serve both needs. Additionally, the possibility of fifty state regimes will needlessly increase confusion and the cost of products. When a financial services company is regulated for safety and soundness, the consumer is always best served.

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Source: NPR Blogs: Planet Money | 17 Jun 2009 | 2:42 pm

Former Madoff Employees Will Get Their Money Or Faces Will Be Smashed

The Daily News reports that former Madoff traders Reed Abdend and Richard Stahl have filed separate suits requesting $473,940 and $1.34 million in deferred compensation, respectively, from Bernie's boys Mark and Andy. For those of you thinking the Stahl character sounds familiar but can't quite place him, we're told that "Richard," now working at First New York Securities, was previously known on Bloomberg as "Rick," but wisely changed his name after the whole Ponzi thing. He also played football for Holy Cross as a tackle and is described as "a real hot head who always tried to physically intimidate people in the work place." Up until recently (let's peg it as December 2008) he apparently "kissed Mark and Andy's asses." Now, not so much!

Abdend, you'll recall, is the guy who got into a slapfest with Andy and his girlfriend Catherine outside a Chinese restaurant. If anyone here is looking to to hire a new employee who'll inject a little infamy-by-association into the shop, here's the cover letter Reed was circulating earlier this year (not sure if he's since landed a job, so act fast).

To Whom It May Concern:

I would like to take this opportunity to set the record straight regarding my position at Bernard L. Madoff Investment Securities. I am sure that you are aware that the firm no longer exists due to the fraudulent activities of the owner in a separate part of the business. My position in the firm was in the proprietary division on the 19th floor, which was separate in records, location, personal, and management. The employees in the market making and proprietary units are victims of this fraud.

Sponsored Topics: New York - Bernard Madoff - Richard Stahl - United States - Charles Ponzi
Source: Dealbreaker | 17 Jun 2009 | 2:17 pm

Bernanke To Testify Next Thursday On Bank of Amerillwide Deal

The House Committee on Oversight and Government Reform has "invited" Ben Bernanke to come have a chat June 25. First order of business: whether or not B-nanke lubed up the Bank of America/Merrill deal by threatening harm to Lewis's employment status/kidneys unless KL did exactly as he was told (keep the Merrill losses hush hush 'til the right time, show us a smile). Presumably the Fed chair has RSVP'd that he'll be there with bells on, which is great.

And by great I mean: yet another reminder of how badly this thing was blown. Bald, Beard and Boone's all should have received invitations to discuss the situation individually and then, SURPRISE-- you're all doing this at the same time. Side by side, in the most awkward manner possible. Two hours in Lewis would've utilized the wastebasket next to the table to puke (on account of nerves associated with having Paulson sitting close enough that he could easily break all of KL's fingers with minimal effort, and a breakfast of booze). Three hours in Ang Moz would've busted through the backdoor under the misguided impression that he'd been asked to appear as a character witness. Four hours in-- anyone's guess. Instead, Bernanke will show up and remain fairly calm while the definition of the word threat is debated for half a day.

Sponsored Topics: Ben Bernanke - Business - Federal Reserve System - United States House Committee on Oversight and Government Reform - Merrill Lynch
Source: Dealbreaker | 17 Jun 2009 | 1:53 pm

A Teacher's Last Moments

Martin writes:

I lost my job as a teacher here in CA. Laid off due to our economy, to make it short. Anyway, yesterday I went in to pack up the last of my belongings and hand in my keys. After moving my belongings out I was waiting for my wife to arrive to haul me and my stuff home. Sitting on my desk was the collection of Boxtops For Education that my Kindergarten students collected so diligently and turned in so proudly. ($0.10 each) So there I was, let go due to budget problems, my very last moments as a teacher, counting out bundles of coupons to help the school pay for balls and paper next year. It really struck me as ironic and sad.

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Source: NPR Blogs: Planet Money | 17 Jun 2009 | 1:48 pm

Stocks fluctuate on FedEx, inflation reports (AP)

AP - A cautious forecast from FedEx Corp. is giving investors another reason to worry about the economy.

Source: Yahoo! News: Stock Markets News | 17 Jun 2009 | 1:42 pm

Consumer prices rise less than expected in May

WASHINGTON -- Consumer prices rose less than expected in May, fresh evidence that the recession is keeping inflation in check.

Source: L.A. Times - Business | 17 Jun 2009 | 1:41 pm

Best Buy is canary in coal mine, Marc Gabelli says

U.S. stock markets are showing signs of weakness and the retail sector may be the first “canary in the coal mine,” said Marc Gabelli, chief executive of Gama Funds, in an interview here on Wednesday.

Source: MarketWatch.com - Top Stories | 17 Jun 2009 | 1:41 pm

Economic Report: U.S. consumer prices inch 0.1% higher in May

U.S. consumer prices increase a seasonally adjusted 0.1% in May as higher gasoline prices are largely offset by falling food prices, the Labor Department reports. Retail-level inflation drops an annualized 1.3%, the fast pace seen since 1950.

Source: MarketWatch.com - Top Stories | 17 Jun 2009 | 1:39 pm

Lockheed Martin sees growing demand for F-35 jet

Lockheed Martin expects to sell an additional F-35 Joint Strike Fighters to overseas buyers beyond the nine partner countries involved in the fifth-generation aircraft’s development, executives say at the Paris Air Show.

Source: MarketWatch.com - Top Stories | 17 Jun 2009 | 1:34 pm

Rise in rates hammers mortgage applications

NEW YORK (Reuters) - U.S. mortgage applications fell for a fourth consecutive week, with overall demand plunging to its lowest level in nearly seven months, data from an industry group showed on Wednesday.
Source: Reuters: Business News | 17 Jun 2009 | 1:28 pm

Wall Street set for flat open (Reuters)

Reuters - Stock index futures pointed to a flat to lower open on Wednesday as key data for May tempered inflation concerns but was offset by a disappointing earnings outlook from package delivery company FedEx Corp .

Source: Yahoo! News: Business | 17 Jun 2009 | 1:27 pm

Wall Street set for flat open (Reuters)

Reuters - Stock index futures pointed to a flat to lower open on Wednesday as key data for May tempered inflation concerns but was offset by a disappointing earnings outlook from package delivery company FedEx Corp .

Source: Yahoo! News: Stock Markets News | 17 Jun 2009 | 1:27 pm

Obama to unveil plans for financial rules overhaul

WASHINGTON (Reuters) - President Barack Obama will unveil on Wednesday his plans for reshaping U.S. financial regulation, with proposals to close one bank regulator and create new overseers for big-picture economic risk and consumer financial product safety.
Source: Reuters: Business News | 17 Jun 2009 | 1:25 pm

Goldman Sachs to pay government

Goldman Sachs says it is ready to repay the $10bn (£6.1bn) it received in the Troubled Asset Relief Program.
Source: BBC News | Business | World Edition | 17 Jun 2009 | 1:25 pm

Blast From The Past: Online Groceries & IPO? (OPEN, PG, AMZN)

Does the Webvan IPO seem like a million years ago?  Or what about Peapod?  We may get an IPO from a similar company in the U.K. called Ocado, an online grocery retailer.  The Times Onlines reported that management is changing ist anti-IPO stance of last year and that the OpenTable, Inc. (NASDAQ: OPEN) IPO now [...]

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Source: 24/7 Wall Street | 17 Jun 2009 | 1:25 pm

New rules put Fed in hot seat

Barack Obama will reveal plans for a system of US financial regulation that gives the Federal Reserve primary responsibility for averting and mitigating future financial crises
Source: Financial Times - US homepage | 17 Jun 2009 | 1:25 pm

Globe union 'optimistic' about agreement

As its talks with management of the Boston Globe continue, the largest union representing employees of the newspaper offer an upbeat assessment of the discussions.

Source: MarketWatch.com - Top Stories | 17 Jun 2009 | 1:22 pm

iPhone or iPod Touch?

Source: Business and financial news - CNNMoney.com | 17 Jun 2009 | 1:19 pm

Bond Report: Treasurys gain after inflation comes in low

NEW YORK (MarketWatch) -- Treasury prices turned higher Wednesday, sending yields down for a fifth day, after a report showed U.S. consumer prices rose less than expected in May.

Source: MarketWatch.com - Top Stories | 17 Jun 2009 | 1:18 pm

Metals Stocks: Gold rises slightly as dollar falls vs. euro

NEW YORK (MarketWatch) -- Gold futures rose slightly Wednesday, reversing earlier losses as the U.S. dollar fell against the euro after U.S. consumer prices data, boosting the precious metal's appeal as an investment alternative.

Source: MarketWatch.com - Top Stories | 17 Jun 2009 | 1:14 pm

Israel Stocks: Israel stocks lower; Alvarion soars on contract

Israeli stocks drop, with blue chips led lower by Israel Chemicals, oil firm Isramco and Bank Leumi.

Source: MarketWatch.com - Top Stories | 17 Jun 2009 | 1:12 pm

FundWatch: Fund managers positive on equities, survey shows

Fund managers are positive on equities for the first time in more than a year, according to the Merrill Lynch fund manager survey for June.

Source: MarketWatch.com - Top Stories | 17 Jun 2009 | 1:09 pm

Consumer prices edge up, easing inflation worries (Reuters)

Reuters - U.S. consumer prices rose at a slower-than-expected pace in May despite higher gasoline costs, and fell over the past 12 months by the most since 1950, according to government data on Wednesday.

Source: Yahoo! News: Business | 17 Jun 2009 | 1:07 pm

Consumer prices edge up, easing inflation worries

WASHINGTON (Reuters) - U.S. consumer prices rose at a slower-than-expected pace in May despite higher gasoline costs, and fell over the past 12 months by the most since 1950, according to government data on Wednesday.
Source: Reuters: Business News | 17 Jun 2009 | 1:07 pm

Wall Street hit by business spending fears

US stocks were set to continue their recent losses as news from FedEx suggested business spending was not improving
Source: Financial Times - US homepage | 17 Jun 2009 | 1:06 pm

Iranian opposition plans new rallies

Iran's reformist leader, Mir-Hossein Moussavi, responded to government allegations against his campaign by insisting that the street protests of his supporters were purely a domestic response, free of foreign influence.
Source: Financial Times - US homepage | 17 Jun 2009 | 1:05 pm

Rise in rates hammers mortgage applications (Reuters)

Reuters - U.S. mortgage applications fell for a fourth consecutive week, with overall demand plunging to its lowest level in nearly seven months, data from an industry group showed on Wednesday.

Source: Yahoo! News: Business | 17 Jun 2009 | 1:04 pm

US inflation lower than expected

US consumer prices rose by less than had been expected in May as the recession continued to restrain inflation, figures show.
Source: BBC News | Business | World Edition | 17 Jun 2009 | 1:03 pm

Futures Movers: Crude futures fall below $70 a barrel

Crude-oil futures head lower as traders await a weekly U.S. government update on petroleum supplies.

Source: MarketWatch.com - Top Stories | 17 Jun 2009 | 1:00 pm

Boockvar Sees Financial Regulation Affecting Risk Taking

Source: Bloomberg - All Podcasts | 17 Jun 2009 | 12:59 pm

FedEx's forecast falls short of Wall Street view

FedEx reports a wider fourth-quarter net loss, hurt by charges related to acquisitions and restructuring moves, and issues a disappointing first-quarter forecast. Many question marks remain about the economic environment, the delivery company's management says.

Source: MarketWatch.com - Top Stories | 17 Jun 2009 | 12:59 pm

Gieleghem Calls Maufacturing Loss `Devastating' for Michigan

Source: Bloomberg - All Podcasts | 17 Jun 2009 | 12:58 pm

Consumer price index: Largest drop in 59 years

A key index of prices paid by consumers showed the largest year-over-year decline since April 1950, primarily due to sinking energy prices, the government said Wednesday.
Source: Business and financial news - CNNMoney.com | 17 Jun 2009 | 12:57 pm

Watson goes global with $1.75 billion Arrow deal

NEW YORK (Reuters) - Watson Pharmaceuticals Inc said on Wednesday it will buy privately held Arrow Group for $1.75 billion, clinching a long-expected deal by the U.S. generic drugmaker to expand internationally.
Source: Reuters: Business News | 17 Jun 2009 | 12:54 pm

Stocks set for mixed start

U.S. stocks were set to open mixed Wednesday as investors awaited more details about President Obama's plan to overhaul financial regulation.
Source: Business and financial news - CNNMoney.com | 17 Jun 2009 | 12:53 pm

UPDATE 2-Watson goes global with $1.75 bln Arrow deal

* Acquisition creates generic drugmaker with $3 bln in rev
Source: RSS feed - channel BNewsBusiness | 17 Jun 2009 | 12:51 pm

FedEx reports larger loss, gives low outlook

DETROIT (Reuters) - FedEx Corp on Wednesday reported a larger fourth-quarter loss, due to charges at two units that have been hit by the recession, but gave a low outlook for the current quarter, citing the continued downturn and rising fuel prices.
Source: Reuters: Business News | 17 Jun 2009 | 12:48 pm

Futures pull off lows as inflation remains tame

Stock futures are pulling off their lows following a government report that inflation rose less than expected in May. The Labor Department says the consumer price index increased a...
Source: RSS feed - channel BNewsBusiness | 17 Jun 2009 | 12:47 pm

FedEx swings to fourth-quarter loss

FedEx reported a deeper fiscal fourth-quarter net loss after the package delivery company wrote down another $1.2bn in goodwill from its past acquisitions of Kinko's and Watkins Motor Lines
Source: Financial Times - US homepage | 17 Jun 2009 | 12:46 pm

Between Patents And The FDA, Big Tobacco Smokes (MO)(RIA)(STSI)

Big tobacco got over yet another big news hurdle yesterday after a U.S. District Court sided with Reynolds American (RAI) in its long-running patent tussle with Star Scientific (STSI), this on the heels of new FDA regulations passed by Congress last week. Tobacco stocks like Reynolds and Altria (MO) that have been hampered in recent days by the [...]

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Source: 24/7 Wall Street | 17 Jun 2009 | 12:45 pm

CPA Global Plans Further Asian Expansion

ST HELIER, Jersey, June 17 /PRNewswire/ -- CPA Global, the world's leading provider of intellectual property (IP) management services and outsourced legal support,...
Source: RSS feed - channel BNewsBusiness | 17 Jun 2009 | 12:45 pm

Will the 64% Increase in Business Bankruptcies Create More Abandoned Retirement Plans?

SAN DIEGO, June 17 /PRNewswire/ -- Business bankruptcy filings for the three-month period ending March 31, 2009 totaled 14,319. That is an increase of 64.3% over the first...
Source: RSS feed - channel BNewsBusiness | 17 Jun 2009 | 12:45 pm

UPDATE 1-Somanetics Q2 profit beats Street, cuts 2009 outlook

June 17 (Reuters) - Medical device maker Somanetics Corp reported a quarterly profit that beat estimates by a penny but cut its fiscal 2009 outlook, saying it expects sales of its INVOS hardware in the...
Source: RSS feed - channel BNewsBusiness | 17 Jun 2009 | 12:41 pm

Sainsbury's drive for growth a canny move

As opportunistic moves go Sainsbury takes some beating.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 17 Jun 2009 | 12:40 pm

SOS Announces Enhancements to Employee Elect - a Tender Offer Website for Option Exchange Programs

Maximized participation, reduction in risk, time savings are key reasons companies utilize a website for gathering option exchange employee elections SAN JOSE,...
Source: RSS feed - channel BNewsBusiness | 17 Jun 2009 | 12:39 pm

Goldman Sachs to repay $10B in government funds

Goldman Sachs says in a letter to high-ranking lawmakers that it is ready to repay a $10 billion government investment. The bank made the disclosure of the planned Wednesday repayment in
Source: RSS feed - channel BNewsBusiness | 17 Jun 2009 | 12:36 pm

Is That Inflation In Your Pocket, Or Are You Just Happy?

We saw tame inflation on the wholesale level yesterday, We have a mere +0.1% on both the headline CPI and on the Core CPI this morning.  Dow Jones had CPI estimates at +0.3% on the headline nominal CPI and +0.1% on the core-CPI measuring ex-ffod and energy.  On a year over year basis, it looks [...]

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Source: 24/7 Wall Street | 17 Jun 2009 | 12:35 pm

Consumer prices rise less than expected in May

Consumer prices rose less than expected in May, fresh evidence the recession is keeping inflation in check. The Labor Department says the consumer price index increased a seasonally...
Source: RSS feed - channel BNewsBusiness | 17 Jun 2009 | 12:34 pm

Current account trade deficit drops to $101.5B

The deficit in the broadest measure of trade has plunged sharply in the first three months of the year as the country's deep recession depressed imports of oil and other goods. The...
Source: RSS feed - channel BNewsBusiness | 17 Jun 2009 | 12:34 pm

First American CoreLogic Announces Purchase of BasePoint Analytics

- Acquisition to Accelerate Creation of Industry Standard Predictive Analytics for Fraud Detection - SANTA ANA, Calif., June 17 /PRNewswire-FirstCall/ -- First...
Source: RSS feed - channel BNewsBusiness | 17 Jun 2009 | 12:32 pm

FedEx reports larger loss, gives low outlook (Reuters)

Reuters - FedEx Corp on Wednesday reported a larger fourth-quarter loss, due to charges at two units that have been hit by the recession, but gave a low outlook for the current quarter, citing the continued downturn and rising fuel prices.

Source: Yahoo! News: Business | 17 Jun 2009 | 12:27 pm

Advertising vs. PR: Deciding which pays off

Source: Business and financial news - CNNMoney.com | 17 Jun 2009 | 12:21 pm

Chinese fund looks to hire overseas

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 17 Jun 2009 | 12:20 pm

Stock futures lose ground after FedEx results

NEW YORK (Reuters) - S&P 500 stock index futures fell and Dow futures turned negative on Wednesday after package delivery company FedEx Corp forecast an "extremely difficult" operating environment for the first two quarters of its fiscal year.
Source: Reuters: Business News | 17 Jun 2009 | 12:16 pm

World markets weighed down by recovery concerns (AP)

AP - World stock markets were mostly lower Wednesday ahead of an expected flat opening on Wall Street as investors remained cautious about whether the current pace of economic recovery, particularly in the U.S., justifies the rally seen in stocks since March.

Source: Yahoo! News: Stock Markets News | 17 Jun 2009 | 12:15 pm

FedEx shares fall after earnings (Reuters)

Reuters - FedEx Corp shares fell 2.3 percent to $50.25 in premarket trade after the package delivery company reported fourth-quarter earnings and issued guidance for its first-quarter.

Source: Yahoo! News: Stock Markets News | 17 Jun 2009 | 12:13 pm

Housing Starts: Up is Better Than Down (BusinessWeek Online)

BusinessWeek Online - A greater number of general contractors have been dusting off work boots and hitching up tool belts. Single-family home starts jumped 7.5% in May, the third consecutive monthly rise, indicating that new home construction might be at -- or close to -- a bottom.
Source: Yahoo! News: Business | 17 Jun 2009 | 12:08 pm

BlackBerry still whooping Palm and Apple

Apple's iPhone 3GS and Palm's Pre has captured a lot of hype but don't count out Research in Motion's BlackBerry just yet, say experts.
Source: Business and financial news - CNNMoney.com | 17 Jun 2009 | 12:00 pm

Baird Unexcited About Green and Less-Dirty Energy (FSLR, ENOC, MXWL, ITRI, SPWRA, ORA, CCC)

Robert W. Baird has started several of the green or less-dirty energy players and water-plays in new coverage this morning.  Most of these are very unexciting ratings with a “Neutral” rating.  Among these are First Solar Inc. (NASDAQ: FSLR), EnerNOC (NASDAQ: ENOC), Maxwell Technologies Inc. (NASDAQ: MXWL), Itron Inc. (NASDAQ: ITRI), and SunPower Corporation (NASDAQ: [...]

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Source: 24/7 Wall Street | 17 Jun 2009 | 11:57 am

Morgan Stanley eyes changes in prime-brokerage unit: report

(Reuters) - Morgan Stanley is planning more changes in its prime-brokerage division to get back some of its hedge-fund clients that left the company last year, the Wall Street Journal said.
Source: Reuters: Business News | 17 Jun 2009 | 11:48 am

Work for free

What would you say if your boss asked?
Source: BBC News | Business | World Edition | 17 Jun 2009 | 11:48 am

Boston Globe, union to meet next week on pay cuts

NEW YORK (Reuters) - The Boston Globe and its largest union ended this week's second marathon round of talks early Wednesday morning without a deal on pay and benefit cuts, and plans to meet again next week.
Source: Reuters: Business News | 17 Jun 2009 | 11:42 am

Top Analyst Upgrades (APA, BIDU, BHP, STD, BK, CENT, IVZ, QCOM, SVNT, STT, TXN)

These are the top analyst upgrades and positive research calls from Wall Street we have seen early this Wednesday morning with more than two hours until the market opens: Apache (APA) Raised to Strong Buy at S&P. Baidu (BIDU) Target Raised to $350 at Goldman Sachs. BHP Billiton (BHP) Raised to Outperform at Macquarie. Banco Santander (STD) Raised to [...]

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Source: 24/7 Wall Street | 17 Jun 2009 | 11:39 am

Qatar PM sees Porsche talks outcome in 2-3 weeks

DUBAI/FRANKFURT (Reuters) - Qatar expects to reveal the outcome of talks on buying a stake in ailing German sportscar maker Porsche SE in two to three weeks, the country's prime minister said, according to media reports.
Source: Reuters: Business News | 17 Jun 2009 | 11:36 am

Surprise: The Weakest Companies Are Leading the Rally

Fed Chairman Ben Bernanke believes the green shoots of economic recovery are sprouting, and the market seems to agree: The S&P 500 is up 36 percent since March. But a closer look reveals plenty of crabgrass on U.S. balance sheets — enough to choke the rally before long. Balance sheets are seen as the best snapshot of a company’s health. [...]

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Source: 24/7 Wall Street | 17 Jun 2009 | 11:34 am

European shares drop (AFP)

AFP - European equities slid on Wednesday after overnight losses on Wall Street, as investors braced for President Barack Obama to unveil financial system reforms aimed at preventing another crisis.

Source: Yahoo! News: Stock Markets News | 17 Jun 2009 | 11:33 am

Bursting the oil bubble

Can reinvigorated financial watchdogs take a bite out of surging oil prices?
Source: Business and financial news - CNNMoney.com | 17 Jun 2009 | 11:30 am

Widespread bankruptcy coming to auto suppliers

A plea by the trade group for auto parts makers for $8 billion to $10 billion in additional federal loan guarantees was turned down by the administration's auto task force last week.
Source: Business and financial news - CNNMoney.com | 17 Jun 2009 | 11:27 am

Random Funny Cat Picture

Source: Business Pundit | 17 Jun 2009 | 11:24 am

Did you get an Obama mortgage modification?

Homeowners are having mixed results applying for president's foreclosure prevention plan. The tribulations and triumphs of those trying to get loans modified or refinanced.
Source: Business and financial news - CNNMoney.com | 17 Jun 2009 | 11:23 am

Bank pours cold water on economic recovery

The Bank Of England is sceptical about the so-called "recovery" in the economy it emerged today as minutes of its June meeting showed it was united on a decision to keep rates on hold.


Source: Latest Business News from Times Online | 17 Jun 2009 | 11:23 am

Farming 'resilient to recession'

The global agriculture sector is more resilient to the financial crisis than other sectors, the UN's FAO says.
Source: BBC News | Business | World Edition | 17 Jun 2009 | 11:22 am

'Labour governments are bad for the stock market'

Diary of a private investor: I have found an analysis of how the stock market has done under this and previous Labour governments.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 17 Jun 2009 | 11:20 am

Apple to Pre: Don't get used to iTunes

Source: Business and financial news - CNNMoney.com | 17 Jun 2009 | 11:19 am

UK jobless total at 12-year high

UK unemployment rose to 2.261 million in the three months to April, the highest since November 1996.
Source: BBC News | Business | World Edition | 17 Jun 2009 | 11:19 am

GM's Saab Auto secures debt writedown (Reuters)

Reuters - Swedish carmaker Saab secured a key court ruling on Wednesday to cut billions of crowns in debt, paving the way for its proposed takeover by local sportscar maker Koenigsegg.

Source: Yahoo! News: Business | 17 Jun 2009 | 11:09 am

GM's Saab Auto secures debt writedown

VANERSBORG, Sweden (Reuters) - Swedish carmaker Saab secured a key court ruling on Wednesday to cut billions of crowns in debt, paving the way for its proposed takeover by local sportscar maker Koenigsegg.
Source: Reuters: Business News | 17 Jun 2009 | 11:09 am

Opening Bell: 06.17.09

Goldman Regrets 'Market Euphoria' That Led to Crisis (Dealbook)
...claims Lloyd Blankfein in a letter to Barney Frank, Spencer Bachus and the rest of the House Financial Services Committee that begins, "as you know, Goldman Sachs is scheduled to repay [Wednesday] the government's $10 billion preferred investment in our firm through the TARP's Capital Purchase Program," rambles on about the lessons GS has apparently learned and closes thusly: "suck it, bitches, $100 million bonuses comin' at ya in 3...2...1..."

White House Details Financial Revamp Plan (WSJ)
Eighty-five pages of bathroom reading right here.

Morgan Stanley Offers Investors In Hedge Funds New Option (WSJ)
"The New York firm plans to announce as soon as Wednesday that hedge-fund clients will be allowed to hold part of their assets in Morgan Stanley Trust National Association, a trust company owned by Morgan Stanley. Previously, such assets were held in the firm's brokerage units."

Three Steps To Financial Reform, By George Soros (FT)
Step number one: Alan Greenspan must admit he fucked this bitch up bad. Real bad.

One Of You Should Shell Out The Cash For This (AWL)
John Delorean's Augusta National Golf Club green members jacket and golf bag tag to be auctioned at Christie's June 23.

Sponsored Topics: Goldman Sachs - Morgan Stanley - Lloyd Blankfein - Barney Frank - Hedge fund
Source: Dealbreaker | 17 Jun 2009 | 11:07 am

Tony Ball joins BT board as nonexecutive

The former BSkyB chief and many investors' preferred choice to run ITV joins the telecoms group next month.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 17 Jun 2009 | 11:07 am

Rise in agricultural commodity prices seen easing

Agricultural commodities prices will rise 10-30% over the next 10 years, less than the previously forecast 40%, thanks to lower economic growth and oil prices, two leading organisations said
Source: Financial Times - US homepage | 17 Jun 2009 | 10:59 am

MPC voted 90 to keep rates on hold

The Bank of England's Monetary Policy Committee voted unanimously to keep interest rates at a record low of 0.5pc in June according to minutues for the meeting.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 17 Jun 2009 | 10:55 am

ITV favourite joins BT as non-executive director

Tony Ball, one of the front-runners to become chief executive of ITV, is joining BT as a non-executive director, it was announced today.


Source: Latest Business News from Times Online | 17 Jun 2009 | 10:37 am

Health insurance for men: what are the best options?

When illness strikes will you be protected? We examine the merits of the various products available.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 17 Jun 2009 | 10:24 am

Unemployment rises less than expected but experts caution against hailing recovery

UK unemployment climbs less than feared but experts caution against hailing a recovery.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 17 Jun 2009 | 10:14 am

China Pushes Its Businesses To “Buy China”

As the US started to head into the worst part of the recession, several members of Congress tried to float legislation that would strongly encourage US citizens to buy products made in America. Most moderate thinking from the Administration and mainstream members of House and Senate killed the initiative quickly. China has decided what American rejected [...]

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Source: 24/7 Wall Street | 17 Jun 2009 | 10:13 am

Falling miners drag FTSE lower

Mining giants dominated the FTSE 100 faller's board today to drag the London market down during early trading.


Source: Latest Business News from Times Online | 17 Jun 2009 | 10:00 am

Banking regulation 'not to blame'

Chancellor Alistair Darling has decided against any fundamental reforms of the system of bank regulation.
Source: BBC News | Business | World Edition | 17 Jun 2009 | 9:59 am

Starbucks (SBUX): Another Quick Fix That Is No Fix

The latest mad plan by Howard Schulz and his executive team to fix Starbucks (SBUX) is to have stores grind beans each time they make a new pot of coffee. Apparently, the beans are only ground in the morning now. According to The Wall Street Journal, current brewing methods mean “customers can be forced to wait, [...]

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Source: 24/7 Wall Street | 17 Jun 2009 | 9:52 am

Sainsbury challenges rivals with £445m fundraising to win 'significant market share'

Supermaket chain plans £445m expansion to win 'significant market share' after posting strong sales.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 17 Jun 2009 | 9:45 am

Reserve fears keep dollar on defensive

The dollar remained on the defensive as market focus remained on the sustainability of the dollar as the world's reserve currency.
Source: Financial Times - US homepage | 17 Jun 2009 | 9:43 am

Auto Suppliers: Fixing Car Companies While Breaking The System

The novel approach that the federal government is taking to fixing the American car industry is that it will bail out the manufacturers while letting their suppliers fail. Car parts firms asked the Administration for $10 billions to keep many of them from folding or falling into bankruptcy. Many will not be able to find [...]

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Source: 24/7 Wall Street | 17 Jun 2009 | 9:40 am

Unemployment hits 12-year high of 2.26m

UK unemployment hit a 12-year high of 2.26 million during the three months to April but new figures revealed today that the pace of decline had eased.


Source: Latest Business News from Times Online | 17 Jun 2009 | 9:39 am

US to reveal banking reform plans

President Barack Obama is set to announce a major shake-up of banking regulation to prevent future financial crises.
Source: BBC News | Business | World Edition | 17 Jun 2009 | 9:29 am

The Instantaneous Collapse Of Social Network Values

The valuations of large social networks such as MySpace (NWS), Facebook, and Twitter is that a visitor has the same value as a visitor to Yahoo! (YHOO), AOL, or Ask.com (IACI). Facebook is worth $10 billion because its number of members is close to the number of people who come to Yahoo! to search the [...]

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Source: 24/7 Wall Street | 17 Jun 2009 | 9:28 am

Rio Tinto receives China "monopoly" challenge

Rio Tinto's planned tie-up with BHP Billiton hit fresh trouble today when China indicated it would launch an anti-trust investigation into the miner’s joint venture and warned it could introduce new laws to ensure its own companies did not lose out.


Source: Latest Business News from Times Online | 17 Jun 2009 | 9:14 am

Obama tightens grip on banks as Darling demurs

President Obama will today announce sweeping reforms of the US financial system including a new regulatory agency, new powers for the Federal Reserve and a new supervisory council to monitor risk and prevent a recurrence of the financial turmoil that caused last year's market collapse.


Source: Latest Business News from Times Online | 17 Jun 2009 | 9:00 am

Obama tightens grip on banks as Darling demurs

President Obama will today announce sweeping reforms of the US financial system including a new regulatory agency, new powers for the Federal Reserve and a new supervisory council to monitor risk and prevent a recurrence of the financial turmoil that caused last year's market collapse.


Source: Latest Business News from Times Online | 17 Jun 2009 | 9:00 am

Unemployment rose less than feared in May

The level of UK unemployment rose less than economists had expected in May in the latest sign that the worst of the contraction may be easing.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 17 Jun 2009 | 8:56 am

European stocks fall at open (AFP)

AFP - Europe's leading stock markets fell at the open on Wednesday, with London's FTSE 100 index of leading shares down 0.26 percent at 4,317.15 points.

Source: Yahoo! News: Stock Markets News | 17 Jun 2009 | 8:40 am

Sainsbury's targets faster growth

High Street supermarket Sainsbury's says it is planning to raise £445m in order to accelerate its growth plans.
Source: BBC News | Business | World Edition | 17 Jun 2009 | 8:20 am

UK Trade Minister Mervyn Davies says banks not holding back recovery

UK Trade Minister Mervyn Davies said Britain's banks are not preventing economic recovery in contrast with recent comments made by the Bank of England's deputy Governor Paul Tucker.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 17 Jun 2009 | 8:08 am

Russia does not belong in the BRIC club

Russia is hosting a Bric conference in Yekaterinberg.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 17 Jun 2009 | 7:50 am

FTSE tracks US and Asia lower

London shares fell back on Wednesday, tracking losses on Wall Street and in Asia as risk appetite continued to wane on world equities markets.The FTSE 100 gave up 13 points to 4,315.22, with resource stocks...
Source: RSS feed - channel BNPaperBusiness | 17 Jun 2009 | 7:46 am

Sainsbury's to raise £445m to fund growth

J Sainsbury announced this morning it will raise £445 million to step-up its expansion drive, taking advantage of the recession to find new space amid the property downturn.


Source: Latest Business News from Times Online | 17 Jun 2009 | 7:29 am

Germans taste machines with Midas touch

Germans will be able to sate their appetite for gold after plans were announced to install gold vending machines in airports and railway stations
Source: Financial Times - US homepage | 17 Jun 2009 | 7:27 am

Australian stocks: Market closes in the red

SYDNEY - The Australian share market closed in the red for the third straight session after resource and financial stocks pulled the market lower. The benchmark S&P/ASX200 index closed down 58.4 points, or 1.47 per cent, at 3,904.1...
Source: New Zealand Herald - Business | 17 Jun 2009 | 7:05 am

Best Buy profit drops 15%

Circuit City's closure gave the electronics chain some customers, but Wal-Mart stepped up its offerings, and shoppers continue to be frugal. ...
Source: RSS feed - channel BNPaperBusiness | 17 Jun 2009 | 7:00 am

Health insurers refuse to limit rescission of coverage

Lawmakers ask three executives if they'll stop dropping customers except where they can show "intentional fraud." All say no. ...
Source: RSS feed - channel BNPaperBusiness | 17 Jun 2009 | 7:00 am

How MySpace fell off the pace

Some say it clung too long to a 'portal strategy' while Facebook kept its focus on social networking and surpassed MySpace in U.S. users. ...
Source: RSS feed - channel BNPaperBusiness | 17 Jun 2009 | 7:00 am

GM to sell Saab to Swedish carmaker Koenigsegg Group

The deal would leave only its Chevrolet brand in Europe as the automaker continues its effort to downsize and return to profitability. The price was not disclosed. ...
Source: RSS feed - channel BNPaperBusiness | 17 Jun 2009 | 7:00 am

Obama to pitch overhaul of financial regulation

His proposal would address issues directly related to last fall's crisis, notably the largely unregulated derivatives markets and rules on how banks turn their investments into complex securities.

The financial regulation plan that President Obama will roll out today will impose stricter and broader government oversight of the nation's banking system -- including tough new requirements on companies whose failure would threaten the economy, and creating new agencies to regulate banks and to protect consumers.

Source: L.A. Times - Business | 17 Jun 2009 | 7:00 am

CalPERS plan to blunt effect of losses slated for vote

Gov. Arnold Schwarzenegger opposes the proposal to spread the losses over 30 years, calling it a "pass-the-buck-to-our-kids idea."

The state's largest pension plan is scheduled to vote today on a proposal to spread this year's severe investment losses over 30 years and save cash-strapped state and local governments hundreds of millions of dollars initially.

Source: L.A. Times - Business | 17 Jun 2009 | 7:00 am

Text-message fees recommended for antitrust scrutiny

Prices at Verizon, AT & T, Sprint and T-Mobile have risen sharply and around the same time, Sen. Herb Kohl says. Companies deny any collusion.

The chairman of a Senate panel on antitrust issues on Tuesday called on the Federal Communications Commission and the Justice Department to scrutinize competitiveness in the cellphone industry, pointing to a 100% increase in some text messaging charges by four companies that control most of the market.

Source: L.A. Times - Business | 17 Jun 2009 | 7:00 am

Health insurers refuse to limit rescission of coverage

Lawmakers ask three executives if they'll stop dropping customers except where they can show "intentional fraud." All say no.

Executives of three of the nation's largest health insurers told federal lawmakers in Washington on Tuesday that they would continue canceling medical coverage for some sick policyholders, despite withering criticism from Republican and Democratic members of Congress who decried the practice as unfair and abusive.

Source: L.A. Times - Business | 17 Jun 2009 | 7:00 am

California's credit rating may get cut further

Standard & Poor's warns that the state is at risk of a downgrade over concern that it could miss payments to bondholders.

California's credit rating, already the lowest of the 50 states, may be cut again, Standard & Poor's warned Tuesday.

Source: L.A. Times - Business | 17 Jun 2009 | 7:00 am

GM to sell Saab to Swedish carmaker Koenigsegg Group

The deal would leave only its Chevrolet brand in Europe as the automaker continues its effort to downsize and return to profitability. The price was not disclosed.

Thanks to a niche car builder, Sweden's Saab story will continue.

Source: L.A. Times - Business | 17 Jun 2009 | 7:00 am

Mixed signals about work cellphones

The Internal Revenue Service had a moment of clarity Tuesday and backed off from its plan to crack down on personal use of office cellphones -- sort of.
Source: RSS feed - channel BNPaperBusiness | 17 Jun 2009 | 7:00 am

CalPERS plan to blunt effect of losses slated for vote

Gov. Arnold Schwarzenegger opposes the proposal to spread the losses over 30 years, calling it a "pass-the-buck-to-our-kids idea." ...
Source: RSS feed - channel BNPaperBusiness | 17 Jun 2009 | 7:00 am

How MySpace fell off the pace

Some say it clung too long to a 'portal strategy' while Facebook kept its focus on social networking and surpassed MySpace in U.S. users.

MySpace is looking to do an about-face.

Source: L.A. Times - Business | 17 Jun 2009 | 7:00 am

Text-message fees recommended for antitrust scrutiny

Prices at Verizon, AT & T, Sprint and T-Mobile have risen sharply and around the same time, Sen. Herb Kohl says. Companies deny any collusion. ...
Source: RSS feed - channel BNPaperBusiness | 17 Jun 2009 | 7:00 am

FDA says Zicam nasal products harm sense of smell

The agency warns consumers to stop using the zinc-based cold products immediately. The products are Zicam Cold Remedy Nasal Gel, Cold Remedy Nasal Swabs and Cold Remedy Swabs, Kids Size. ...
Source: RSS feed - channel BNPaperBusiness | 17 Jun 2009 | 7:00 am

Housing starts are up, but manufacturing production falls in May

Building permits also rise last month. Industrial production drops for the seventh consecutive month to 1.1%, after falling 0.7% in April. Analysts had been expecting a reading of 0.9%. ...
Source: RSS feed - channel BNPaperBusiness | 17 Jun 2009 | 7:00 am

NZ stocks: Market follows offshore markets down

The New Zealand sharemarket slipped on a day with little corporate news to trade on and reflecting a pause in global equity markets on doubts about an economic recovery. The benchmark NZX-50 index closed down 8.115 points, or 0.291...
Source: New Zealand Herald - Business | 17 Jun 2009 | 6:07 am

PM talks over Presbyterian savers

Northern Ireland's first and deputy first ministers are to meet the prime minister later to discuss the Presbyterian Mutual Society.
Source: BBC News | Business | World Edition | 17 Jun 2009 | 5:55 am

Currency: Dollar holds around US63c

The New Zealand dollar held around US63c in mixed trading today as investors globally continued to debate the speed and timing of an economic recovery. The NZ dollar dipped briefly after Reserve Bank Governor Alan Bollard said...
Source: New Zealand Herald - Business | 17 Jun 2009 | 5:54 am

Harcourts property listings down

Real estate company Harcourts is continuing to report a low level of new listings as a feature of the property market, which it says will continue to stabilise. There were fewer new listings last month than in May 2008, while the...
Source: New Zealand Herald - Business | 17 Jun 2009 | 5:20 am

Lakers gear rings up sales

What recession? Fans of the NBA champions snap up T-shirts, hats and flags ahead of today's parade.

Lakers fans aren't letting the recession rein in their parade.

Source: L.A. Times - Business | 17 Jun 2009 | 4:58 am

Obama to unveil plans for financial rules overhaul (Reuters)

Reuters - President Barack Obama will unveil on Wednesday his plans for reshaping U.S. financial regulation, with proposals to close one bank regulator and create new overseers for big-picture economic risk and consumer financial product safety.

Source: Yahoo! News: Business | 17 Jun 2009 | 4:23 am

Traders Pause After a Two-Day Selloff (Market Update)

News at a Glance

• Regulation Station: Obama reform proposal coming today.
• Futures Steady: Major indexes aimed for flat start.
• Oil Pulls Back: Crude drops below $70 before inventories.
• Inflation Inches Up: CPI, core rose 0.1% last month.

The Lowdown

The market appears to have found a tourniquet.

Stocks headed to toward a fairly flat open Wednesday, as traders licked their wounds in the wake of a two-day selloff. Shortly before 9 a.m., Dow, Nasdaq and S&P 500 futures were trading right around fair value.

Still, traders will be eyeing the details of the Obama administration's plan to reform existing regulations of the financial system. Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers released an outline of the White House's proposal earlier this week, but the financial sector could cheer or reject the fine print later today.

Also in Washington, the Senate Health Committee prepared to begin a series of meetings to discuss the Obama health care plan, which is now estimated to cost upwards of $1 trillion. At the same time, the Senate Finance Committee is formulating it own health care plan, a version which is expected to be more modest in scope and more bipartisan in appeal.

In economic news, consumer prices crept up in May, according to the lastest reading of the Consumer Price Index. The CPI crept 0.1% after holding steady in April, while the core number, which strips out volatile food and energy prices, rose 0.1%, as well.

Commodities continued their steady decline. Energy prices slipped ahead of the released of last week's crude inventories report. By 8:38 a.m., oil traded down $1.01 at $69.46 a barrel.

World markets were mixed. In Asia, Japan's Nikkei picked up 0.9%, while Hong Kong's Hang Seng gave up 0.5%. In Europe, the U.K.'s FTSE dipped 1.1% in afternoon trading.

Corporate News

• Adobe (ADBE) posted a 30% decline in second-quarter net income, the firm said. Excluding one-time charges, Adobe earned 35 cents a share, down from 50 cents a share in the year-ago period. Slumping software sales depressed Adobe's bottom line.
• General Electric (GE) predicts credit will have loosened up by 2010 but stopped short of pinpointing a recovery, Reuters reported, citing Vice Chairman John Rice. "Until the financial systems start to work again it will be difficult to say that we've hit the bottom and started to come back," Rice said.
• Morgan Stanley (MS) plans to expand its investing options for hedge fund clients in an effort to restore faith and interest in the vehicle, The Wall Street Journal reported. The firm will allow hedge-fund clients to put part of their assets in a trust owned by the firm, offering clients somewhere else to park their holdings besides the company's brokerage divisions.

The Economy

• The Consumer Price Index rose 0.1% in May, up from no change in April, the Labor Department said. Economists had expected a 0.3% increase. Excluding volatile food and energy prices, the core CPI rose 0.1%  in May, slowing from a 0.3% increase in the prior month. The core increase was in line with expectations. REPORT
• The crude inventories report for last week is scheduled to be released at 10:30 a.m. by the Energy Department. In the prior week, inventories were above the upper limit of the average range for this point in the year.

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 | 17 Jun 2009 | 4:00 am

When to Get Back in the Market (Magazine Cover)

For millions of Americans, watching and waiting is the new day-trading-and the trillion-dollar question is when they'll feel fully comfortable investing in stocks again. In the U.S. alone, investors still have nearly $900 billion parked on the sidelines, according to Thomson Reuters. The tide finally began to shift this spring, when an upward bounce in the markets and upbeat forecasts from luminaries like Federal Reserve Chairman Ben Bernanke helped lure some investors out of hiding. Financial advisers say they're seeing a surge of inquiries from clients about stocks. "It's about 15 to 1 in terms of calls from people who want in versus out," says Tom Hepner of Ruggie Wealth Management. And sentiment among fund managers recently shifted from "apocalyptically bearish to reluctantly bullish," according to a survey by Banc of America Securities-Merrill Lynch.

The key word, though, is "reluctantly." The recent rallies have eased some investors' fears, but it will take a lot more prodding for others to get over the crash of 2008. Although the pros know that historically, stocks recover long before the rest of the economy, nobody wants to suffer more losses by getting in too early. Or, for that matter, too late: Some who missed out on this spring's stock gains now fear that the market has no more gas in the tank. Misgivings like these explain why pros and amateurs alike obsess over their favorite economic indicators-from "TED spreads" (it's a bond thing) to taxi-line wait times-trying to decide if the glimmers of improvement can translate into a lasting recovery.

With that in mind, SmartMoney magazine polled a slew of economists, managers and strategists to find out which signals will give them confidence that the worst is truly behind us. No single one of these indicators is a surefire green light. While any number of statistics-like weekly unemployment claims and surveys of sentiment among manufacturers-have helped to signal rebounds from the 10 recessions since World War II, few have hit the mark each time. TD Ameritrade Chief Investment Strategist Stephanie Giroux says that before she utters the words "a new bull market," she needs to see "clear evidence on multiple fronts that the economy is starting to grow again." For investors still smarting from last fall, waiting for multiple "go" signs has an appealing logic. Before they feel confident about the stock market's risks, they want to feel like the other elements of their economic lives are secure.

Stock Market Moves

This spring, the S&P 500 rose more than 30 percent, confronting investors with a familiar conundrum: Was this a sucker's rally, or a long-lasting upturn?

To answer that question, some analysts looked beyond short-term price increases to study what they call the market's breadth. Jeff Rubin, director of research for Birinyi Associates, says that when rallies are broad-when they involve more than one sector of the economy-they're more likely to forecast a more sustainable bull market and an overall turnaround. Rubin points to rallies in 1975 and 1982 that turned out to be harbingers of bigger recoveries that followed. The good news is, this spring's rally was encouragingly broad. Indeed, according to data from research firm Morningstar, 10 of the 12 main industry sectors saw their stocks rise during that three-month stretch, with sectors like consumer services, industrial materials and media leading the way. The surge also stands in sharp contrast to an earlier, narrower rally from November through January, which focused mainly on financial stocks-and didn't last. If Rubin's historical pattern repeats itself, investors have reason to feel optimistic.

Thinking about breadth can also help investors ride out a downturn-because when a stock decline is "narrow," that's good news for stocks. This March, the major stock indexes hit 10-year lows. But as Paul Hickey, cofounder of the money-management firm Bespoke Investment Group, points out, only 36 percent of individual stocks reached new lows-a sharp contrast to last October, when 80 percent of stocks had that ugly distinction. The March figure was a sign that, instead of throwing the baby out with the bathwater, sellers were making reasonable decisions, company by company, says Liz Ann Sonders, chief investment strategist at Charles Schwab. And that suggests an absence of panic and a healthier climate for stocks.

Many money managers would rather base their get-back-in decisions on a more traditional measure-whether stocks in general are cheap. To gauge this, investors often rely on the price/earnings ratio, which compares a company's stock price to its profits. But Charles de Lardemelle, a relatively bearish value investor and comanager of the IVA Funds, says the ratio can be deceptive, because it doesn't let investors judge profit trends over time. He prefers to compare corporate profits to the U.S. gross domestic product, which measures the total output of the country's economy. Profits currently stand at 7 percent of GDP; de Lardemelle expects the figure to get down to 4 percent before the economy and the market see the potential for a sustained turnaround.

What to watch: Stock prices across different sectors of the economy.

Where to get them: http://news.morningstar.com/stockReturns/CapWtdSectorReturns.html

Borrowing and Lending

Bonds never get much respect from the public and the media, even though, at $25 trillion, the American bond market dwarfs the value of all U.S. stocks combined. The pros know better-in fact, they see bonds as the canary in the economic coal mine. The bond market basically represents a huge chunk of the money that gets borrowed by governments, businesses and consumers. When a company like General Electric needs to raise money, for example, it sells bonds to everyone from hedge funds to banks to ordinary Joes. When the economy gets shaky, bond buyers get nervous; they demand higher interest rates, and some borrowers can't raise money at all, in what we've all painfully come to know as a credit crunch. And all this happens long before stocks or the broader economy hit the skids. In the most recent crash, some of these credit signals started flashing red as early as the summer of 2007, even though the Dow was climbing toward a record high at the time.

Since lending, as some economists say, is the "mother's milk" of the economy, the pros are obsessively watching the bond markets for any hint that these problems have thawed. It's a good sign if companies can sell new bonds-what bankers call "issuance." Last fall corporate issuance ground to a halt, says Kevin Flanagan, fixed-income specialist for Morgan Stanley Global Wealth Management. But things have started to move again this year, as Xerox, Pfizer and other companies have brought out new bonds.

Many smaller business loans don't involve the public bond market, so investors also watch the Federal Reserve's Loan Officer Survey, which tracks loans for plants and equipment. Commodity-related stocks tend to move upward about nine months after bank lending improves, says Citigroup Chief Investment Strategist Tobias Levkovich. But any movement on any of these fronts suggests that businesses can get the money to expand and hire-the kind of turnaround the economy and stock investors are desperate for.

Lower interest rates are supposed to encourage borrowing. But low rates alone hardly guarantee a rebound-after all, many U.S. rates have been near record lows for months now. Instead, market watchers pay attention to "spreads," the differences between the interest on supersafe Treasury bills and the rates on other kinds of loans. The most closely watched ones include spreads based on corporate bonds, as well as the "TED spread," which compares Treasurys with the rates banks charge each other. Most such spreads drastically widened last year and are still unusually high; the pros will feel more confident about investing when they get narrower.

What to watch: The "TED spread." It recently fell to around 50 basis points, close to its historical average-an encouraging sign.

Where to get it: Many financial-news sites, including Bloomberg.com and TEDspread.com.

Business Hiring and Spending

There's probably no sign of the economy's health that's more closely watched than employment. Most companies begin to rehire only once they are confident the worst economic news is behind them. That often doesn't happen until months after the market has turned around, so job numbers won't help an investor catch the early edge of a rally. But for someone looking for signs of a sustainable recovery, they're a useful gauge.

Economists and strategists pay particularly close attention to weekly unemployment-insurance claims-the number of people actually applying for employment benefits each week. When that number stops growing or even declines over a couple of months, it'll be a signal that the negative economic cycle is winding down, says Mark Zandi, chief economist at Moody's Economy.com. But investors who wait too long are likely to miss a rally. Traditionally, layoffs and other job losses keep rising even after the economy turns around, as employers adjust to new economic conditions. After recessions in 2001 and in 1961, job losses continued even after the recession had ended, says Birinyi researcher Rubin.

Job watchers also follow Labor Department stats that track demand for temps and the length of the average workweek, which reflects workers logging more overtime; an increase in either could be a glimmer of a turnaround. Once job losses begin to slow, Federated market strategist Phil Orlando thinks investors will shed the hunker-down mentality and buy growth-oriented stocks, including shares in energy companies.

New hiring won't be the only sign that American companies are ready to spend and grow again. Brian Bethune, economist at IHS Global Insight, watches the prices that used commercial vehicles and construction equipment are fetching, either on eBay or at auction houses-he says it gives him a quick window on whether companies are feeling bullish. The pros also keep an eye on the monthly report from the Institute for Supply Management, which surveys purchasing managers in 20 industries who buy such varied items as cables, computers, packaging boxes and machinery. In the institute's survey, a number over 50 suggests the economy is expanding; lately, it has hovered in the low 40s. Once it creeps back to 50, Orlando says he would buy industrial firms like General Electric.

Of course, anecdotal evidence matters, too. For Barry James, the president of the James Advantage mutual funds, attending religious services hasn't been entirely uplifting of late. On most Sundays over the past year, James has left his church outside Dayton, Ohio, burdened with news of yet another batch of job losses among his fellow parishioners. On the other hand, he figures that when the Sunday finally comes that he doesn't hear about layoffs, "it'll be the first real sign the economy is stabilizing." And better yet, of course, will be that Sunday when he starts hearing about his neighbors' new jobs.

What to watch: Weekly unemployment claims. Look for a couple of months of slower growth or, better yet, declines.

Where to get them: Department of Labor.

The Indomitable Consumer

The drying up of consumer spending is one of the main reasons for today's recession, and even 50-year-low mortgage rates and rock-bottom prices at the mall haven't been enough to get Americans to open their wallets. "There is a loss of faith that distinguishes this downturn; people have gone to the bunker," Zandi says. That's why any sign that Main Street's pessimism about homes, jobs and futures has turned to optimism will be a major step in the recovery. Experts are keeping a close watch on surveys of consumer confidence like the monthly one put out by the Conference Board; a score of more than 50, like the one reported for May, suggests that consumers are more upbeat.

Other analysts, however, think that spending won't recover until Americans chip away at the huge piles of debt they accumulated over the past decade. According to the most recent figures, the average household's debt, including mortgages, sits at 235 percent of income-meaning a family with $100,000 in income has $235,000 in debt. Giroux, of TD Ameritrade, thinks that level will need to settle into a range between 170 and 200 percent before the economy starts consistently growing again. At that point, some pros say they'll be ready to invest more aggressively in retailing and leisure stocks.

To spot early signs of a rebound, many economists keep tabs on the Economic Cycle Research Institute's index of economic growth, which measures a slew of spending categories that include the mundane, like inflation, and the unusual, such as prices for tallow for the soap used to clean factories. In recent months that index showed a "pronounced, persistent and pervasive" recovery, says Lakshman Achutan, managing director of the institute, who thinks the recession very likely will be over by the end of summer. History is on his side: Since the late 1930s the index has reliably spotted a recovery an average of four months before the end of each recession.

What to watch: Consumer confidence index; two or more months in a row with scores above 50 would be good news.

Where to get it: The Conference Board business trade group.

Hopes for Housing

Since there was a housing bubble at the epicenter of this financial crisis, it's natural to look to the real estate market for signs the worst is over. After all, if people are willing to buy homes, it suggests they feel pretty good about their jobs and future prospects-all positive signals for a sustainable stock run. But it's not as easy as counting how many people are visiting the open house next door, or even counting home sales, where figures were inflated this spring by a record number of homes being sold in foreclosure.

So where are economists looking for a welcome mat? For starters, they'd like to see more stability in home sales and prices. Since there's still a glut of homes sitting empty, experts suspect it will be some time before prices start rising meaningfully. To try to spot the home-price bottom, Giroux is keeping her eyes on the trends in existing home sales. Many homeowners are currently opting to stay put rather than join the fire sale of foreclosed homes, but once they feel comfortable enough putting their homes on the market, it'll be a sign the housing situation is on the mend. It'll be another good sign when housing starts and building permits increase after a long decline-that will suggest developers finally feel they can make money on new buildings again.

Despite a market full of bargains, Americans have had a hard time overcoming the psychological hurdle of buying a home amid uncertain financial times. But if they're looking for an excuse to turn the corner, they might be encouraged by housing-affordability indexes like the one maintained by the National Association of Realtors. Those indexes compare home prices with local incomes and mortgage rates, and in many areas of the country, they show that buying now makes more economic sense than renting. Housing affordability typically improves like this about two quarters ahead of revivals in investment in real estate, according to Ed Yardeni, chief investment strategist at Yardeni Associates. Another encouraging sign: The Consumer Sentiment index, issued by Reuters and the University of Michigan, recently found that 70 percent of respondents thought it was a good time to buy a home, up from a low of 57 percent in 2006. "I think we are seeing a bottoming process," says Stephen Kim, senior analyst at Alpine Global Real Estate fund.

What to watch: Housing starts and building permits. The more, the merrier.

Where to get it: The Census Bureau's New Residential Construction index.

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 | 17 Jun 2009 | 4:00 am

7 Ways to Save on Gas (Deal of the Day)

That budget road trip you planned for the family this summer is starting to look a lot more expensive now that gas prices are on the rise.

Some of the spike is seasonal. Increased demand -- from all of those other families hitting the road -- tends to lift gas prices each summer, says Paul Hess, information analyst at the Energy Information Administration (EIA). Oil prices have also been creeping higher in recent weeks as optimism grows on Wall Street that demand for crude will rise worldwide once the global economy stabilizes, says Tom Kloza, chief information analyst at Oil Price Information Service, which monitors oil prices in North America. And further boosting prices at the pump is an Environmental Protection Agency requirement to add a fuel blend to gasoline in certain regions during the summer months that reduces ozone damage. This additive alone can add another five to 10 cents to the price per gallon, says Kloza.

As a result, regular unleaded gas costs $2.67 a gallon, up 16% from $2.30 a month ago, according to AAA’s Fuel Gauge Report. According to the EIA, gas prices won’t begin declining significantly until fall.

In the meantime, drivers can lessen the pain at the pump by taking some inexpensive and easy steps. 

Here are seven ways to save on gas this summer.

Shop around

Sure, it’s convenient to visit the gas station closest to home, but it may not be the best place to fill up.

To find the cheapest gas prices, compare prices at stations near your home or along your commute. Price-comparison web sites like GasBuddy.com and BillShrink.com let you plug in your daily destinations to find the most affordable gas stations on those roads. The price difference per gallon can be up to 50 cents, says Samir Kothari, co-founder of BillShrink.com.

Pay Cash

Last summer, gas stations rolled out higher prices for consumers who paid with credit or debit cards (the idea was to pass along the merchant fees associated with such transactions). Many gas stations are still at it, which means those who pay in cash can often save. ARCO (a subsidiary of BP (BP)) stations, located in California, Washington, Oregon, Arizona and Nevada, for example, only accept cash and charge between five and 10 cents per gallon less than competing stations. (ARCO recently introduced a debit MasterCard which consumers can use to purchase gas at no extra charge. Other debit cards are accepted at these stations, but there’s a 45-cent fee.)

Cash discounts are popular in California, Connecticut, Florida, Michigan, New Jersey and New York, according to GasBuddy.com. (Discounts for cash-paying customers are legal in every state, as long as the gas station makes it clear that prices are different when you pay in cash vs. credit or debit, says Jason Toews, cofounder of GasBuddy.com.)

Fill up at the warehouse club

In addition to frozen food, toiletries and appliances, Costco (COST), BJ’s and Sam’s Club sell discounted gas at some of their locations.

“It depends on local market conditions but usually they sell it cheaply enough so that they’re beating out the competition,” says Toews. For example, at a BJ’s location in York, Pa., regular unleaded gas is selling for $2.59 a gallon. Local competitors there sell gas for $2.61 to $2.65 a gallon, according to GasBuddy.com.

Keep your car in good shape

Routine maintenance on your car’s tires and engine can increase its fuel efficiency (and even exptend its life). Plus, most of the things you need to do to maintain your car's health don’t even require pricey visits to the mechanic.

Just keeping your tires properly inflated can help save you cash. Underinflated tires require more energy to roll and decrease a car’s fuel efficiency, says Kothari. Driving with properly-inflated tires can improve fuel economy by 3% over a year, saving 20 gallons of gasoline and up to $45 annually, according to the Alliance to Save Energy. Check your car owner's manual to find out what the proper air pressure.

Also, be sure to regularly change your air filter. Clogged air filters can damage your engine and decrease fuel efficiency. A new air filter will improve gas mileage by 10%, according to the Department of Energy (DOE). Even better: Air filters are fairly cheap, ranging in price from $20 to $60.

Also, stick to the motor oil that’s recommended by your car's manufacturer, and buy one that states “energy-conserving” on the label, says Kateri Callahan, president of the Alliance to Save Energy. This can increase fuel efficiency by up to 2%, according to the Alliance to Save Energy.

Avoid road rage

Aggressive driving isn’t just dangerous. It also wastes a lot of fuel.

Consumers pay an extra 24 cents per gallon for every five miles per hour (mph) over 60 mph they drive, according to the Alliance to Save Energy. Rapid acceleration, hard braking and speeding can lower a car’s gas mileage by 33% on the highway and 5% in the city, according to the Department of Energy (DOE).

Clean out the clutter

Golf clubs, bowling balls or that bag of salt from last winter -- any unnecessary equipment or baggage in a car can decrease its fuel efficiency. According to the DOE, gas mileage decreases by up to 2% for every 100 pounds.

Another helpful tip: On your next road trip, try to pack everything inside the car rather than piling it on the roof. Stashing stuff on top of the car increases drag and decreases fuel economy by 5% or more, according to the DOE.

Limit A/C use

Whenever possible try to keep the air conditioner at the lowest level. Having it maxed out can reduce your fuel efficiency by up to 25% compared to having the A/C turned off, according to the Alliance to Save Energy.

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 | 17 Jun 2009 | 4:00 am

Middle East Progress? 5 Ways to Invest (On the Street)

After decades of strife, struggle and instability, could the Middle East be the next high-risk/high-reward arena for global investors? Consider President Obama's historic speech in Cairo in early June calling for a “new beginning between the United States and Muslims”; or the ongoing drama in Iran, where massive voter turnout just might succeed in bringing a reform candidate to power.

The times, are they a-changin'?

True, very much remains to be seen and done, but with new mutual funds and exchange-traded funds launching in just the last couple years, there are more opportunities than ever for investors interested in the geopolitically challenging but potentially highly lucrative region. Indeed, a mini bull market may already be forming. After plunging more than 50% in 2008, the Bloomberg Africa/Middle East index is up 15% in 2009.

Of course, plenty of caveats remain, says Joe Clark, managing partner of Financial Enhancement Group of Anderson, Ind., which has no position in that part of the globe. "One of the challenges is that when you look at the entire Middle East you are still only talking about a small percentage [about 5%] of world population," Clark says. "And the biggest investing theme is oil. There are far safer ways to play oil than going into the Middle East."

Still, the higher the risk, the higher the potential reward -- if you're aggressive enough and can wait long enough, says Mark Ragusa, president and chief investment manager of Money Map Advisors in Houston. "Investing in the Middle East now is like investing in the United States in the 1900s," Ragusa says. "It's just a long-term growth play."

SmartMoney spoke with market professionals to take the lay of the Middle East landscape. From mutual funds to ETFs to individual stocks, here's a look at five ways to get a piece of the Middle East.

T. Rowe Price Africa & Middle East

When it comes to the Middle East, there are multitudes of added layers of risk -- geopolitical, currency and compliance, to name a few -- that the average retail investor doesn't understand, says Alan Lancz, president of Alan B. Lancz & Associates of Toldeo, Ohio. Under such circumstances, Lancz advocates active management. That's where the T. Rowe Price Africa & Middle East (TRAMX) fund comes in. Launched in late 2007, the fund lost 53% in 2008, hurt partly by slowing regional economic growth, lower oil prices and reduced liquidity in the banking sector, according to portfolio manager Joseph Rohm. Cut to today and the fund is up nearly 46% in the last three months. Top holdings include companies in Qatar, the United Arab Emirates, Lebanon and Egypt. The net expense ratio of 1.32% seems reasonable given the challenges the region poses; there's no load; and the minimum investment is $2,500. However, as Morningstar analyst William Rocco cautions: "This fund's geographic focus means it's too narrow to be used as a solo emerging-markets holding and should be used in combination with other such funds."

Templeton Frontier Markets

For the ultimate in active management, look no farther than Templeton Frontier Markets, which launched in October. (The fund doesn't have a ticker yet but can be purchased through its CUSIP number, which is 88019R674, Templeton says.) Lancz applauds the investing acumen of manager Dr. Paul Mobius, who also runs Templeton Emerging Markets Small Cap A (TEMMX), a fund that is up more than 50% year to date and 83% in the last three months, according to Morningstar. And the Templeton Frontier Markets fund allows for even greater drilling down into the Middle East, with potential exposure to Bahrain, Egypt, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Tunisia and United Arab Emirates, among others. But it all comes at a price. True, the minimum investment is just $1,000 and Lancz says, "Mobius is a very good money manger." He had better be to recoup the fund’s 5.75% sales charge.

WisdomTree Middle East Dividend

There's nothing like ETFs for liquidity, transparency and cheap fees. Those are some of the draws for Mark Ragusa of Money Map Advisors, who has allocated 6% of his aggressive tactical allocation portfolio to the WisdomTree Middle East Dividend fund (GULF). "This is not for your typical aggressive allocation," Ragusa says. "This is really for someone with a very high appetite for risk." No one knows whether we'll have peace in the Middle East, Ragusa says, only that the region's GDP is growing at 5% and this ETF offers a play on financials and oil. Even better, it's a dividend weighted index, meaning underlying companies can't easily fiddle with their numbers. "You can't really hide the fact that you’re paying a dividend," Ragusa says. "Cash out is cash out." Just remember, says Ragusa, this is a high-risk, long-term opportunity. Also beware that the ETF, which is just about a year old, can trade at a steep premium to its net asset value.

Orascom Construction

For those with true intestinal fortitude, individual stock picking in the region is another way to go. Rahul Sharma, portfolio manager at Schafer Cullen Capital Management in New York, doesn't much like ETFs for the Middle East. "Sure, you're buying the good stocks, but you're getting the bad ones, too," Sharma says. "I just can't imagine wanting to own so much of the Middle East." This stockpicker's favorite company in the region is Egypt's Orascom Industries (ORSDF). The company, which is predominantly in the construction and fertilizer businesses, cannily sold off its cement division two years ago right at the peak, and then used the proceeds to pay a dividend and invest in the fertilizer business. Very shrewd moves, Sharma says. Orascom stands to benefit from population and infrastructure growth in the region, as governments -- the company's main customers -- try to cope with demographic changes, as well as get away from dependence on oil for revenue.

Cellcom Israel

Just across the Sinai Peninsula lies Cellcom Israel (CEL), another top Sharma pick. True, the telecom business is mature, but the company trades at just nine times earnings and throws off a chunky 10% dividend yield. Sharma also likes Cellcom's defensive nature. "Telecom in general is a fairly defensive sector no matter where you are and in Israel that's especially true," he says. The market contains only three operators, Sharma points out, and thus far they've avoided the types of price wars we've become so accustomed to here in the U.S. "Cellcom Israel compares favorably to other telecoms globally that have similar kinds of market penetration and the yield is highly attractive," Sharma says. Analysts' average call on the ADR is Buy, according to Thomson Reuters and their median price target of $32 implies upside of 23% in the next 12 months or so.

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 | 17 Jun 2009 | 4:00 am

5 Safe Stocks to Swap Into (Screens)

Risk, you might have heard, is directly related to stock returns. That is, you’re not supposed to be able to achieve greater stock returns without taking on more risk. Be skeptical.

The theory comes from a set of elegant mathematics first published in the Journal of Finance in 1952, then mostly ignored for a decade, then transformed in the early 1960s through more lovely math into a stock prediction machine called the Capital Asset Pricing Model. The formulas gave rise to the index mutual fund industry in the 1970s and earned two key contributors Nobel Prizes in economics in 1990.

One of the upshots of the math is that if you know something called “beta” for a stock, you can calculate the stock’s expected return. So what’s this remarkable beta? In theory it’s a measure of risk. In practice, risk is a tricky thing to measure, so beta is often based on a stock’s past trading volatility relative to other stocks. A stock that moved frantically in the past has a high beta today, which means it’s supposed to be risky, which means it’s supposed to earn high returns in the future. But no one wants the extra risk, so we’re all better off forgetting about stock picking and buying index mutual funds.

Indexing is probably the best thing to come out of the math. Those Vanguard funds are blessedly cheap, and since over long time periods mediocre stocks are better than no stocks, the funds are a good deal for investors who aren’t keen on stock-picking, which is most of them.

For stock pickers, the formulas don’t quite deliver as promised. Past volatility isn’t terribly accurate for predicting future returns. Other clues, when added to volatility, result in more accurate predictions. Among these are a company’s size, or what you’d pay to own all of its shares today, and its price/book value, which compares the purchase price to what accountants say the assets are worth. All else held equal, small companies and cheap companies tend to produce better stock returns. Mathematicians say this is because these clues are actually alternative measures of risk in disguise. That is, small companies are riskier than big ones, and what is cheapness if not a sign of flaws, and thus, risk? So the theorists worked these new clues into the pricing model to turn that volatility-based beta into a “three-factor” beta, but more good clues like recent share price momentum turned up soon after. They added those in, too.

I’ve lost track whether we’re up to five or six factors, but the process has become a bit circular. Every time researchers find a clue that reliably predicts good stock returns, other researchers redefine that clue as part of a new measure of risk. Do that for long enough and risk really will be inseparable from return, because the two will be different labels for the same things.

That’s a long lead-in to the subject of which stocks investors should swap into now if they feel the market has gotten expensive, and they suddenly care more about safety than returns. Risk, I’m convinced, isn’t something to be throttled back on at the expense of returns. The best way to reduce risk is to be greedy for return. That doesn’t mean placing wild bets. Sometimes it means holding cash. With regard to stocks, it means continually searching for modest valuations, big, reliable dividends, strong balance sheets and other good clues.

Below are listed five companies whose shares seem attractively priced — safe, you might say.