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US companies sack 473,000 workers in JuneUS private employers sacked 473,000 workers in June, while mortgage applications hit a seven-month low, raising fears that America was not recovering from its recession as well as previously thought. Source: Latest Business News from Times Online | 1 Jul 2009 | 3:21 pm General Motors Finds A Way To Teach Former Workers A LessonIn addition to spending$950 million to wind down the old GM, the new GM may have unintentionally found a way to send a tough message to the UAW workers looking to milk the system and retire in their 40s. In 2007, the UAW and GM struck a deal which allowed GM to cut its work force and avoid severance packages by offering early retirement to tens of thousands of workers. While that sounds predictably foolish by auto industry standards, the real hiccup comes in the form of GM not having to make contributions to the fund until 2013. Consequently the pension fund may only have 20 years left before it runs out of cash, leaving newly retired 40-somethings faced with a daunting choice- roll the dice with fund or, perish the thought, find a job. Retired From G.M. at 54. Pensionless at 74? [NYT] 
Sponsored Topics: General Motors - United Auto Workers - Business - UAW - Chrysler Source: Dealbreaker | 1 Jul 2009 | 3:10 pm Spotted: Oliver Stone And 5-Man Entourage At 1 Liberty PlazaDon't get your hopes up, but Shia Labeouf was "nowhere in sight." Earlier: Terrible, Horrible, No Good Very Bad News: Wall Street Sequel Edition
Sponsored Topics: Shia Labeouf - Transformers - interview - Celebrity - shialabeouf Source: Dealbreaker | 1 Jul 2009 | 3:01 pm Crabtree firm in bankruptcy moveThe Crabtree & Evelyn business in the US, which specialises in premium natural skincare products, files for bankruptcy protection.Source: BBC News | Business | World Edition | 1 Jul 2009 | 2:56 pm SEC considers rules on pay disclosure, TARP firms (AP)AP - The Securities and Exchange Commission is debating proposed rules that would require firms that have received government bailouts to let shareholders vote on executive pay.Source: Yahoo! News: Stock Markets News | 1 Jul 2009 | 2:52 pm Economic Report: Downturn in manufacturing moderates in June: ISMThe nation's manufacturing firms continued to contract, but maintained its steady improvement in June, suggesting it was only a matter of time before the factory sector began to grow again, according to a survey of top executives.
Source: MarketWatch.com - Top Stories | 1 Jul 2009 | 2:51 pm Tech Stocks: Techs kick off third quarter with gainsThe tech sector kicks off the third quarter with modest gains, as bellwethers Intel, Microsoft and Oracle advance in early trading.
Source: MarketWatch.com - Top Stories | 1 Jul 2009 | 2:51 pm The following is an investment opinion release issued by BuySideReport.comCALGARY, July 1 /PRNewswire/ - It is essential in today's market to be on the right side of the momentum, BuySideReport.com allows investors to stand at the forefront of theSource: RSS feed - channel BNewsBusiness | 1 Jul 2009 | 2:49 pm Porter, White & Company Announces Addition of J.T. Price, Formation of Revitalization and Change Management PracticeBIRMINGHAM, Ala., July 1 /PRNewswire/ -- Porter, White & Company (PW&Co) today announced that J.T. Price, an experienced private equity manager, consultant, and interim...Source: RSS feed - channel BNewsBusiness | 1 Jul 2009 | 2:47 pm Crabtree & Evelyn files for bankruptcy in USCrabtree & Evelyn, the soap and handcream maker, has filed for Chapter 11 bankruptcy in the US after sales plunged amid the downturn in consumer spending. Source: Latest Business News from Times Online | 1 Jul 2009 | 2:46 pm Financial Stocks: Banking stocks get lift after home sales dataNEW YORK (MarketWatch) -- U.S. financial stocks began the new quarter higher in Wednesday morning trade after pending sales of existing homes rose for the fourth consecutive month in May, boosted by special incentives for first-time buyers.
Source: MarketWatch.com - Top Stories | 1 Jul 2009 | 2:46 pm Bernie v. MJ: If You Had To Choose
Earlier: Ankle Monitoring Bracelet On The House Who Will Buy Madoff's Homes? [The Wealth Bulletin]
Sponsored Topics: Kevin Bacon - Joe Jackson - Art - Performing Arts - Julianne Hough Source: Dealbreaker | 1 Jul 2009 | 2:45 pm Grubb & Ellis Company Names David Susoreny Executive Vice President, Corporate Services GroupSANTA ANA, Calif., July 1 /PRNewswire-FirstCall/ -- Grubb & Ellis Company (NYSE: GBE), a leading real estate services and investment firm, today announced that it has named...Source: RSS feed - channel BNewsBusiness | 1 Jul 2009 | 2:43 pm It's crunch time for statesIt's not a happy new year for the states.Source: Business and financial news - CNNMoney.com | 1 Jul 2009 | 2:41 pm Wall Street focus on commoditiesThe yo-yoing prices of commodities continued to dominate trade in US stocks as investors looked beyond mixed signs on unemployment and bought energy and materials stocks as oil and metals prices roseSource: Financial Times - US homepage | 1 Jul 2009 | 2:41 pm SEC considers rules on pay disclosure, TARP firmsThe Securities and Exchange Commission is debating proposed rules that would require firms that have received government bailouts to let shareholders vote on executive pay. Congress...Source: RSS feed - channel BNewsBusiness | 1 Jul 2009 | 2:40 pm First Apartment Component of the Stadium Mixed Use Development OpenedATLANTA, July 1 /PRNewswire/ -- Today The Overlook at Gwinnett Stadium apartment community celebrated its grand opening. In attendance at the ceremonial ribbon cutting were...Source: RSS feed - channel BNewsBusiness | 1 Jul 2009 | 2:40 pm Crude Inventories Mixed For Holiday Weekend Demand (USO, OIL)The weekly oil inventories data came out of the U.S. Department of Energy at 10:30 AM EST this morning. Crude Oil was already much higher on worries that draw-downs were taking their toll on supply. At 10:21 NYMEX WTI Crude was trading up $1.86 per barrel at at $71.75 and the United States Oil (NYSE: [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 1 Jul 2009 | 2:38 pm GM back in court to seek approval for sale (Reuters)Reuters - The only viable option to save General Motors Corp is a sale of its main assets to a "New GM," a U.S. Treasury official told a bankruptcy court on Wednesday as the automaker sought approval for the deal.Source: Yahoo! News: Business | 1 Jul 2009 | 2:37 pm GM back in court to seek approval for saleNEW YORK (Reuters) - The only viable option to save General Motors Corp is a sale of its main assets to a "New GM," a U.S. Treasury official told a bankruptcy court on Wednesday as the...Source: RSS feed - channel BNewsBusiness | 1 Jul 2009 | 2:37 pm Stocks advance after mixed economic dataNEW YORK -- The third quarter is starting on a positive note after a mixed bag of economic data.
Source: L.A. Times - Business | 1 Jul 2009 | 2:37 pm Economist: Midwest economy shows improvementA survey of business leaders in nine Midwestern and Plains states suggests that the region's economy continues to show signs of improvement, but job losses persist. The Mid-America...Source: RSS feed - channel BNewsBusiness | 1 Jul 2009 | 2:36 pm Wall Street jumps on natural resources boost (Reuters)
Source: Yahoo! News: Stock Markets News | 1 Jul 2009 | 2:35 pm Wall Street jumps on natural resources boost (Reuters)
Source: Yahoo! News: Business | 1 Jul 2009 | 2:35 pm Hyundai's latest offer: Cheap gasWith gas prices rising and car sales in the dumps, Hyundai is offering new car buyers gas at $1.49 a gallon for a year.Source: Business and financial news - CNNMoney.com | 1 Jul 2009 | 2:31 pm Energy Stocks: Energy stocks kick off second half with gainsNEW YORK (MarketWatch) - Energy stocks drew strength from the broad market to start the second half of 2009 with modest gains ahead of weekly petroleum supply inventories from the Energy Information Administration on Wednesday.
Source: MarketWatch.com - Top Stories | 1 Jul 2009 | 2:31 pm Innovative Beverage Group, Creators of drank(TM) 'Extreme Relaxation'(TM) Beverage, and Layfield Energy Launch Industry's First 'Extreme Relaxation'(TM) ShotCreators of Wildly Popular Relaxation Beverage Unveil Two-Ounce Version with Same Calming Effect, Less Sugar and Fewer Calories HOUSTON, July 1...Source: RSS feed - channel BNewsBusiness | 1 Jul 2009 | 2:31 pm General Mills profit tops view; 2010 outlook strongNEW YORK (Reuters) - General Mills Inc , the maker of Cheerios cereal and Yoplait yogurt, forecast better-than-expected earnings for the current fiscal year, helped by new products and moderating commodity costs.Source: Reuters: Business News | 1 Jul 2009 | 2:29 pm Currencies: Dollar slips versus euro as equities riseThe dollar loses ground to the euro but gains versus the yen as equity markets move higher and amid mixed economic data out of the U.S.
Source: MarketWatch.com - Top Stories | 1 Jul 2009 | 2:29 pm Construction spending falls more than expectedWASHINGTON -- Construction spending fell more than expected in May, a sign the problems facing the nation's builders are far from over.
Source: L.A. Times - Business | 1 Jul 2009 | 2:28 pm Oil rises nears $72 with supplies fallingOil prices climbed nearer to $72 a barrel Wednesday with early indications that the government could report crude supplies have dropped for the seven out of the past eight weeks. ...Source: RSS feed - channel BNewsBusiness | 1 Jul 2009 | 2:27 pm Manufacturing up for 6th straight monthManufacturing sector activity rose in June for the sixth straight month, but the index reading still indicates a contraction, a purchasing managers' group said Wednesday.Source: Business and financial news - CNNMoney.com | 1 Jul 2009 | 2:27 pm Stocks advance after mixed economic data (AP)
Source: Yahoo! News: Stock Markets News | 1 Jul 2009 | 2:27 pm Retail Stocks: Retail stocks rise as pace of job losses slowsRetail stocks start the second half of the year on a positive note, trading higher as investors look past an ADP employment report that showed the U.S. private sector shed 473,000 jobs in June.
Source: MarketWatch.com - Top Stories | 1 Jul 2009 | 2:27 pm Movers & Shakers: Wednesday's biggest gaining and declining stocksStocks expected to move significantly in trading on Wednesday include AstraZeneca, Gannett, General Mills, Pfizer, Sealy and Teva.
Source: MarketWatch.com - Top Stories | 1 Jul 2009 | 2:27 pm Central Valley Fund Completes Follow-On Expansion Investment in Source LogisticsLOS ANGELES, July 1 /PRNewswire/ -- The Central Valley Fund ("CVF"), a private investment fund focused on middle market Central Valley companies, and existing...Source: RSS feed - channel BNewsBusiness | 1 Jul 2009 | 2:26 pm Why taxes will need to go upThe promise of health reform is to make care more accessible for everybody -- and to reduce the federal deficit by slowing the growth rate in costs.Source: Business and financial news - CNNMoney.com | 1 Jul 2009 | 2:25 pm Bond Report: Short-term Treasurys up after ADP, ISM dataShort-term Treasury prices fall, pushing yields up, after ADP Employment Services says private companies cut 473,000 jobs in June, raising questions about how fast the economy may improve.
Source: MarketWatch.com - Top Stories | 1 Jul 2009 | 2:25 pm The Ratings Game: Citi adds B. of A. to Aggressive Growth listAnalysts at Citigroup on Wednesday add Bank of America stock to their Ten+ Aggressive Growth List, telling clients that the company is a good long term investment and it should return to normalized annual earning of $3 a share in a few years.
Source: MarketWatch.com - Top Stories | 1 Jul 2009 | 2:25 pm EADS wins Saudi border contract estimated at $2.8BEuropean aerospace and defense giant EADS has won a $2.8 billion border-security contract with Saudi Arabia, according to a media report on Wednesday.
Source: MarketWatch.com - Top Stories | 1 Jul 2009 | 2:24 pm Feldstein Says U.S. Can't Afford Obama's Health-Care PlanSource: Bloomberg - All Podcasts | 1 Jul 2009 | 2:21 pm U.S. pending home sales rise 0.1 percent in MayWASHINGTON (Reuters) - Pending sales of previously owned U.S. homes rose slightly in May, the fourth straight monthly gain, a real estate trade group said on Wednesday.Source: Reuters: Business News | 1 Jul 2009 | 2:19 pm When safe is sorry with retirementWith the uncertainty of the market these days, a lot of investors are running for cover with their retirement funds. No wonder sales of fixed annuities surged 74% for the first three months of 2009, according to research association LIMRA.Source: Business and financial news - CNNMoney.com | 1 Jul 2009 | 2:17 pm Boost for Boeing as ANA orders more DreamlinersBoeing's delay-plagued 787 Dreamliner passenger jet has received a vote of confidence from All Nippon Airways, the Japanese carrier, which said it had increased its order for the aircraft by five units to 55Source: Financial Times - US homepage | 1 Jul 2009 | 2:14 pm Career Clinic: Career Transition
In this rapidly changing economy, almost all Americans and a good part of the globe are now in a career transition of some sort. The Bureau of Labor Statistics has given up attempting to estimate the number of times people change careers, since it is almost impossible to quantify. The statistic was for 1982, when it was estimated that 36% of all Americans were in the midst of a career transition of some sort and that between the ages of 18 and 38 people would hold an average of 10 jobs. The current wisdom of employment experts is that almost all Americans are experiencing a career transition now because of the rapidly changing global economy and institutional reforms being put in place. Change is not only the only constant, it is a way of life, and I believe the more adaptable and accepting we are of this, the more enjoyment we will get in our lives and careers. I know many of you have recently lost a job that in some ways may have defined you. While you are job searching, it also may be a good time to do some soul searching about what kind of work may suit you even more than what you did in the past. So here are some questions to ask yourself as you explore this possibility:
Asking yourself these questions is a good way to have a fresh outlook on your career transition. Try our Career Change Assessment. This assessment is used by our coaches to assess our clients and now it's available to everyone. The New World Institute helps professionals and executives realign their careers. It's never too late to change, so call us for a free consultation: 347 445 5763. Laurel Donnellan is the President and Co-Founder of The New World Institute. www.thenewworldinstitute.com
Sponsored Topics: Employment - Bureau of Labor Statistics - Business - Career - Unemployment Source: Dealbreaker | 1 Jul 2009 | 2:14 pm ISM, Construction, and Home Sales… Pulling In OppositionAny time you have three economic reports hitting at once, you have a risk for confusion or for diverging reports. That is the case today as the Institute for Supply Management gave the June ISM Manufacturing data, while we saw pending home sales data and new construction spending data mixed for May. The Institute of Supply [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 1 Jul 2009 | 2:13 pm The fastest growing city in the U.S. is...The Big Easy is making a big comeback. New Orleans has steadily won back some of the population it lost in the wake of Hurricane Katrina in 2005, according to a government report released Wednesday.Source: Business and financial news - CNNMoney.com | 1 Jul 2009 | 2:12 pm Wall Street trims gains on data; resources boostNEW YORK (Reuters) - Stocks cut gains on Wednesday after a round of mixed data, but the indexes were kept higher by increases in energy and resource shares.Source: Reuters: Business News | 1 Jul 2009 | 2:11 pm East Coast rail to be state-runThe government says it intends to take the East Coast rail service, run by National Express, into public ownership.Source: BBC News | Business | World Edition | 1 Jul 2009 | 2:09 pm Job market shows signs of lifeThe pace of U.S. job losses has slowed but the labor market is expected to remain weak, according to reports released Wednesday.Source: Business and financial news - CNNMoney.com | 1 Jul 2009 | 2:09 pm U.S. pending home sales rise 0.1 percent in May (Reuters)
Source: Yahoo! News: Business | 1 Jul 2009 | 2:07 pm Freddie Mac receives additional $6.1B from gov't (AP)AP - Battered mortgage giant Freddie Mac received $6.1 billion in new funds from the Treasury Department to help offset its mounting liabilities, according to a regulatory filing submitted Wednesday.Source: Yahoo! News: Business | 1 Jul 2009 | 2:06 pm Pending home sales up for 4th straight monthHome sales continued their modest upward swing in May, according to a closely watched industry report that rose for the fourth straight month for the first time in nearly 5 years.Source: Business and financial news - CNNMoney.com | 1 Jul 2009 | 2:04 pm Novel ETF Launch: Islamic Investment Strategy (JVS)If you said that there are exhange-traded funds for just about everything, that statement is getting closer and closer to accurate than ever. A new ETF in America is being launched: Javelin Exchange Traded Funds (”JETS”) is launching Dow Jones Islamic Market International Index Fund (NYSE: JVS). This ETF aims to adhere to centuries-old Islamic [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 1 Jul 2009 | 1:58 pm Just Playing The NumbersWelcome to July, and a week of waiting for the latest lab reports on the economy. The June figures on manufacturing are due in later today, from the Institute on Supply Management. The Wall Street Journal picks apart the consensus forecast -- still shrinking, but more slowly -- and says we've still got inventory to burn before factories crank into gear again. The Bureau of Labor Statistics releases the June unemployment figure on Thursday. Meanwhile, the private ADP payroll report shows the U.S. job market shedding 473,000 gigs in June. With an average loss of 492,000 jobs a month for the last three months, we're still falling, but more slowly. » E-Mail This » Add to Del.icio.us Source: NPR Blogs: Planet Money | 1 Jul 2009 | 1:57 pm Northern Rock losses grow by £1bnNorthern Rock is estimated to have lost another £1bn in the past six months putting it in breach of regulatory rules even after they were relaxed for the nationalised lender last year.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 1 Jul 2009 | 1:57 pm Dunkin’ Donuts Recalls Hot Chocolate, Dunkaccino Drinks
After finding out that a dairy supplier had contaminated equipment, Dunkin’ Donuts is temporarily recalling its hot chocolate and Dunkaccino beverages. The Sydney Morning Herald has more: The Canton, Massachusetts-based company said on Tuesday none of its products was contaminated and the withdrawal of the beverages from its stores was a precaution to ensure customer safety. It has about 6,400 franchised restaurants in the United States and says it serves three million customers a day. Plainview, Minnesota, supplier Plainview Milk Products Cooperative announced it had voluntarily recalled its instant non-fat dried milk and whey protein because of potential salmonella bacteria contamination. It says there were no reported illnesses. Dunkin’ Donuts says it expects to resume hot chocolate and Dunkaccino sales shortly. The chain sells 52 types of doughnuts and more than a dozen coffee drinks.
Source: Business Pundit | 1 Jul 2009 | 1:56 pm U.S. mortgage applications fall to 7-month low (Reuters)
Source: Yahoo! News: Business | 1 Jul 2009 | 1:54 pm U.S. mortgage applications fall to 7-month lowNEW YORK (Reuters) - U.S. mortgage applications plunged to a seven-month low last week as demand for home refinancing loans tumbled 30 percent, data from an industry group showed on Wednesday.Source: Reuters: Business News | 1 Jul 2009 | 1:54 pm U.S. private firms shed jobs in June, more to comeNEW YORK (Reuters) - U.S. private sector job cuts fell in June to their lowest in eight months, but they still came in more than expected and the economy may be on track to lose another one million workers by year-end.Source: Reuters: Business News | 1 Jul 2009 | 1:53 pm U.S. private firms shed jobs in June, more to come (Reuters)
Source: Yahoo! News: Business | 1 Jul 2009 | 1:53 pm Wall Street in early riseStrong overseas markets and a rally in oil prices and oil stocks were among the factors boosting Wall Street at the open Wednesday, the first day of the third quarter.Source: Business and financial news - CNNMoney.com | 1 Jul 2009 | 1:47 pm Diageo to cut 900 Scottish jobsDrinks giant Diageo announces that it is to shed about 900 jobs by closing facilities in Glasgow and Kilmarnock.Source: BBC News | Business | World Edition | 1 Jul 2009 | 1:46 pm Citigroup Hikes Credit Card Rates Just in Time to Avoid New Laws
Bailed-out Citigroup increased interest rates on millions of credit card accounts in the US between January and April, just in time to avoid new laws limiting interest rate hikes. The Financial Times reports: Citigroup has sharply increased interest rates on up to 15m US credit card accounts just months before curbs on such rises come into effect, in a move that could fuel political anger at the treatment of consumers by bailed-out banks. People close to the situation said that Citi, which is about to cede a 34 per cent stake to the US government as part of its latest rescue, had upped rates on between 13m and 15m credit cards it co-brands with retailers such as Sears. Citi’s rate increases emerged on the day the government proposed legislation to create a new regulator with sweeping powers on consumer protection and a week after the bank was attacked by some politicians for raising employees’ salaries. Holders of co-branded cards who failed to pay their balance in full at the end of the month saw their rates rise by an average 24 per cent – or nearly 3 percentage points – between January and April, according to a Credit Suisse analysis of data from the consultancy Lightspeed Research. Can someone remind me why the government bailed this bank out?
Source: Business Pundit | 1 Jul 2009 | 1:36 pm Day Trader Alerts (IMMR, DROOY, GOLD, AU, AUY, SPPI, AMAG, UBS, CS, OSK, FRPT, NAV, MYGN)We have provided links through on our day trading alerts page this morning. Each stock is seeing active trading right before the open and brief explanations and analysis are offered at VSInvestor.com: Immersion Corp. (Nasdaq: IMMR) is getting whacked down on an investigation into previous revenue transactions in its medical business. Speculative gold stocks DROOY, GOLD, AU, [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 1 Jul 2009 | 1:35 pm GM back in court pushing 'new GM'General Motors returns to bankruptcy court on Wednesday to seek approval of its plan to restructure and create a "new GM."Source: Business and financial news - CNNMoney.com | 1 Jul 2009 | 1:26 pm Equity buyers should hope for duller timesFinancial excitement has been in ample supply for ages. The second quarter of 2009 was no exception.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 1 Jul 2009 | 1:20 pm M?S's better trading doesn't get Rose off the hookSir Stuart Rose shouldn't take a breather just yet.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 1 Jul 2009 | 1:13 pm Dividend Surprise At MFA (MFA)MFA Financial, Inc. (NYSE: MFA) is a surprise on the dividend front this morning. The company is a REIT that invests in mortgage backed securities, and while that sounds as though it has all the qualifications for problems the company is actually raising its dividend again. This time by 14%. This may seem like a small [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 1 Jul 2009 | 1:09 pm VAT cut boosts French restaurantsThe cost of eating in French cafes and restaurants should be set to fall as the government cuts VAT to boost spending.Source: BBC News | Business | World Edition | 1 Jul 2009 | 1:03 pm UBS could still settle in U.S. tax case: Swiss Finance MinisterBERNE (Reuters) - UBS can still settle a damaging U.S. tax case even though Washington is pushing ahead with a lawsuit to force the Swiss bank giant to identify offshore clients, the Swiss Finance Minister said.Source: Reuters: Business News | 1 Jul 2009 | 1:02 pm Clifford Chance profits plunge 37 per centClifford Chance, once the world's biggest law firm, today revealed a 37 per cent plunge in full year profits after its key banking and corporate clients were hit by the impact of the financial crisis. Source: Latest Business News from Times Online | 1 Jul 2009 | 1:01 pm US private sector sheds 473,000 jobsUS companies cut nearly a half million jobs last month as the recession continued to cut into the labour market in spite of other recent signs of hope in the economySource: Financial Times - US homepage | 1 Jul 2009 | 1:00 pm Opening Bell: 07.01.09No Criminal Exposure For Ruth Madoff (NYP) California misses budget deadline, readies "IOUs" (Reuters) The Goldman v Rolling Stone Cat Fight (NYP) Freddie Picks Charles Haldeman for CEO Spot (WSJ) Ex-Citi chief set to lead Lloyds integration (FT) 5:15 Capital Starts Hedge Fund With Nod to Who Song (Bloomberg)
Sponsored Topics: Lloyds Banking Group - Hedge fund - Upper East Side - Business - Investing Source: Dealbreaker | 1 Jul 2009 | 1:00 pm More Data That Microsoft (MSFT) Bing Is Gaining On Yahoo! (YHOO)Data from web research firm StatCounter confirms what other surveys have shown–Microsoft’s (MSFT) new search engine Bing is gaining ground on Yahoo! which will undermine that portal’s turnaround effort. For June, StatCounter shows 8.23%, up a percentage point, compared to Yahoo! at 11.04% Yahoo! will have made a huge blunder by not merging its search services with [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 1 Jul 2009 | 12:48 pm Chinese bloggers celebrate Green Dam 'victory'A garden party in Beijing billed as a protest against a government plan to fit all computers in China with Green Dam, a controversial web filtering software, turned into a celebration on after the programme was postponedSource: Financial Times - US homepage | 1 Jul 2009 | 12:46 pm Gordon Brown says East Coast line was nationalised to keep service runningPrime Minister said Government's "overriding obligation" was to ensure continuity of service after National Express defaulted on franchise.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 1 Jul 2009 | 12:45 pm LDK Solar Chalks Up A Win In Italy (LDK)LDK Solar Co., Ltd. (NYSE: LDK) has signed a new agreement with SAEM Srl, a primary system integrator within the PV sector, to build five one-megawatt PV plants in the Apulia region of Italy. The company noted that the construction will start in July and should be completed by November of this year. Under the [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 1 Jul 2009 | 12:44 pm Manufacturing helps world markets start Q3 higher (AP)
Source: Yahoo! News: Stock Markets News | 1 Jul 2009 | 12:44 pm BA calls in mediator to head-off summer strikesBritish Airways (BA) has been forced to call in ACAS, the conciliation service, after failing to reach an agreement with unions over job losses and pay cuts as it seeks to avoid a damaging summer of strikes. Source: Latest Business News from Times Online | 1 Jul 2009 | 12:42 pm EU travellers get mobile phone price cutMillions of travellers will pay much less to use their mobile phones while abroad within the European Union after new regulations came into force today. Source: Latest Business News from Times Online | 1 Jul 2009 | 12:36 pm Fraud inquiry starts at KeydataThe Serious Fraud Office is investigating the disappearance of up to £103m of clients' money at the insolvent investment company Keydata.Source: BBC News | Business | World Edition | 1 Jul 2009 | 12:35 pm ADP Fails To Cure Unemployment FearsThe ADP national employment report for June is often considered a prelude to the tone of the following day’s real unemployment report from the Labor Department. The ADP report for June is out at -473,000. This is down from -485,000 as revised in May. This is also worse than the estimates being les than -400,000 [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 1 Jul 2009 | 12:23 pm Microsoft's Bing search wins share from GoogleLONDON/SEATTLE (Reuters) - Microsoft Corp's new Bing search engine gained U.S. market share in its first month in operation but still trails dominant rival Google Inc, according to data released on Wednesday.Source: Reuters: Business News | 1 Jul 2009 | 12:17 pm Chinese manufacturing increasesChina's manufacturing sector grew in June, at a slightly faster pace than in the previous month.Source: BBC News | Business | World Edition | 1 Jul 2009 | 12:11 pm Top Analyst Upgrades and Downgrades (AWK, BEAT, CHKP, IACI, MVL, MYGN, NVO, SYMC, WERN)These are the top pre-market analyst upgrades and downgrades this Wednesday morning in early trading. American Water Works (AWK) Started as Buy at Brean Murray. CardioNet (BEAT) Cut to Hold at Citigroup; Cut to Hold at boutique firm Roth. Checkpoint Software (CHKP) Cut to Neutral at JPMorgan. IAC/Interactive (IACI) Started as Outperform at Oppenheimer. Marvel Entertainment (MVL) Raised to Overweight [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 1 Jul 2009 | 12:11 pm National Express: key facts about its troublesNational Express the transport group is to hand its East Coast rail franchise back to the government after the recession hit its business plan for lossmaking London to Edinburgh service. Here are some key facts about the company:Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 1 Jul 2009 | 11:55 am Chinalco to take up Rio rightsThe state-owned Chinese group will participate in the Rio Tinto rights issue to maintain its stake in the global miner at 9%Source: Financial Times - US homepage | 1 Jul 2009 | 11:53 am Cash for Pirate Bay file-sharersThe new owners of controversial file-sharing website The Pirate Bay say users will be paid for sharing files.Source: BBC News | Business | World Edition | 1 Jul 2009 | 11:33 am Some Rules Just Don’t Work
Source: Business Pundit | 1 Jul 2009 | 11:31 am AIG’s Futile Reverse Split To Nowhere (AIG)American International Group Inc. (NYSE: AIG) is under pressure. This morning is the effective date of a 1 for 20 reverse split. Our closing bell prices were $1.16 yesterday, and that would imply a $23.30 share price this morning. Just one problem. The “20-factor” is not even close as the very early trading indications are [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 1 Jul 2009 | 11:28 am European equities make bullish start (AFP)
Source: Yahoo! News: Stock Markets News | 1 Jul 2009 | 11:17 am BA calls negotiators over pay rowBritish Airways asks conciliation service Acas to intervene to help reach a deal with unions on jobs and pay.Source: BBC News | Business | World Edition | 1 Jul 2009 | 11:16 am Irish joblessness at 13-year highThe Irish Republic's unemployment rate hit 11.9% in June, the highest since April 1996, official figures show.Source: BBC News | Business | World Edition | 1 Jul 2009 | 11:14 am India's exports continue to fallIndia's exports fell in May for the eighth month in a row as overseas demand for goods continued to shrink in the global recession.Source: BBC News | Business | World Edition | 1 Jul 2009 | 11:11 am Diageo cuts 900 Scottish jobsDiageo the maker of Guinness Johnnie Walker and Smirnoff is cutting 900 jobs as part of a major restructuring of its Scottish operations including the closure of a historic Glaswegian distillery.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 1 Jul 2009 | 11:10 am British Gas pledges to create 2,600 new jobsBritish Gas is to create 2,600 new jobs by 2012 as it rolls out new “smart” power meters to every home in the country. Source: Latest Business News from Times Online | 1 Jul 2009 | 11:01 am British Gas creates 2600 new jobsBritish Gas said it is creating 2600 new jobs as it prepares for the rollout of new smart meter technology.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 1 Jul 2009 | 10:59 am Dollar weakened as risk appetite improvesRisk appetite was buoyed slightly on Wednesday as rising equity markets lifted the euro against the dollar, but trading remained subdued as the market awaited Thursday's US non-farm payrolls dataSource: Financial Times - US homepage | 1 Jul 2009 | 10:58 am Diageo overhaul to cost 900 Scottish jobsDiageo, the world's biggest drinks group, has responded to the tough trading environment by initiating a £120 million restructuring that will cost about 900 jobs in Scotland as it closes a packaging plant and a distillery. Source: Latest Business News from Times Online | 1 Jul 2009 | 10:40 am China recovery hopes gather paceThe figures confirmed that the world's third largest economy is continuing to expand amidst a mixed picture elsewhere in the Asia-Pacific regionSource: Financial Times - US homepage | 1 Jul 2009 | 10:33 am Diageo cuts 900 jobs and closes Scottish distilleryDiageo the world's biggest spirits group has announced the closure of a grain distillery and a packaging plant in Scotland with the loss of nearly 900 jobs to cut its costs in the current downturn.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 1 Jul 2009 | 10:30 am Cattles axes seven for breakdown in controlsCattles, the beleaguered sub-prime and doorstep lender, has fired six senior directors and parted company with another after it completed a three-month probe into a “breakdown” in its internal controls. Source: Latest Business News from Times Online | 1 Jul 2009 | 10:29 am Sweden rides to defence of hedge fundsSweden, the new holder of the EU presidency, came to the defence of hedge funds and private equity, saying it did not blame them for the financial crisis and would press for improvements in EU proposals to regulate themSource: Financial Times - US homepage | 1 Jul 2009 | 10:26 am How to invest like Warren BuffettA new book on Warren Buffett "The Midas Touch" summarises the favourite investing principles of the "Sage of Omaha".Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 1 Jul 2009 | 10:26 am Factory output rises for first time in 15 monthsSigns that the manufacturing industry is emerging from the worst of the recession came today as activity in the sector hit a 13-month high and output rose for the first time since March 2008. Source: Latest Business News from Times Online | 1 Jul 2009 | 10:16 am Oil rebounds ahead of EIA inventory dataOil rebounded on Wednesday, edging back above $71 a barrel, as weekly industry figures showed a sharp drop in US crude stocks and data showing further improvement in the Chinese manufacturing sector underpinned confidence in a global economic recoverySource: Financial Times - US homepage | 1 Jul 2009 | 10:08 am Final salary pensions: shortfall surges to £73bnThe funding shortfall faced by Britain's biggest defined benefit pension schemes nearly doubled during June new figures show.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 1 Jul 2009 | 9:16 am Shinsei and Aozora unveil merger plansShinsei and Aozora, two lossmaking Japanese lenders backed by US private equity groups, unveiled plans to merge their operations in October next year to create a domestically-focused bankSource: Financial Times - US homepage | 1 Jul 2009 | 8:52 am Auto sales seen showing signs of stabilityDETROIT (Reuters) - Major automakers are expected to report the highest sales rate of 2009 when they post results for June, as deep discounts limit industry-wide results to a 30-percent decline.Source: Reuters: Business News | 1 Jul 2009 | 8:42 am Marks and Spencer sales rise in first quarter (AFP)
Source: Yahoo! News: Business | 1 Jul 2009 | 8:40 am World stocks begin new quarter on upbeat note (Reuters)
Source: Yahoo! News: Stock Markets News | 1 Jul 2009 | 8:29 am M&S reveals best performance since 2007Marks & Spencer (M&S) today reported better than expected sales for the first quarter and said consumer spending appears to be stabilising. Source: Latest Business News from Times Online | 1 Jul 2009 | 8:09 am Fiat CEO says Chrysler cash burn slows: reportMILAN (Reuters) - U.S. automaker Chrysler Group LLC has stemmed the pace at which it uses cash after emerging from bankruptcy last month as a slimmer company, Chief Executive Sergio Marchionne said in an interview with Bloomberg published on Wednesday.Source: Reuters: Business News | 1 Jul 2009 | 8:07 am Auto sales seen showing signs of stability (Reuters)Reuters - Major automakers are expected to report the highest sales rate of 2009 when they post results for June, as deep discounts limit industry-wide results to a 30-percent decline.Source: Yahoo! News: Business | 1 Jul 2009 | 8:04 am Australian stocks: Market falls nearly two per centPERTH - The Australian share market had a decidedly downbeat start to the new financial year, with resources and financial sectors losing ground following negative overseas leads. At the 1615 AEST close, the benchmark S&P/ASX200...Source: New Zealand Herald - Business | 1 Jul 2009 | 7:17 am Stocks end quarter higher for the first time in nearly two yearsThe benchmark Standard & Poor's 500 index climbed 15.2% in the period -- its largest gain for any quarter since 1998. ...Source: RSS feed - channel BNPaperBusiness | 1 Jul 2009 | 7:00 am Chase cardholders see payment hike as a raw dealMonthly minimum payments will more than double in August. Some customers affected by the new policy believe the company is indulging in a little bait-and-switch.Van Nuys resident Richard Levinson figured he was getting a pretty sweet deal when JPMorgan Chase & Co. offered to charge an average 4.5% in interest if he'd transfer his outstanding credit card debt to the bank.
Source: L.A. Times - Business | 1 Jul 2009 | 7:00 am Chase cardholders see payment hike as a raw dealMonthly minimum payments will more than double in August. Some customers affected by the new policy believe the company is indulging in a little bait-and-switch. ...Source: RSS feed - channel BNPaperBusiness | 1 Jul 2009 | 7:00 am U.S. home prices still falling, but not quite as steeplyS & P/Case-Shiller index shows a decline of 18% in April from a year earlier. The January year-to-year drop was 19%. In the L.A. area, prices fell 21% from April to April; the January drop was 25%.U.S. home prices continued to fall sharply in April but are no longer doing so at a record-breaking pace, according to a widely followed index released Tuesday.
Source: L.A. Times - Business | 1 Jul 2009 | 7:00 am Paramount said to be in talks with Sony and FoxSources say the talks on merging some home video operations were prompted by an industrywide slump in DVD sales and the weak economy. ...Source: RSS feed - channel BNPaperBusiness | 1 Jul 2009 | 7:00 am Jerry Huben's 68-year career in aviation comes in for a landingThe aircraft engineer, who started working for Northrop in 1941, is retiring after helping build some of the nation's more notable airplanes.When Jerry Huben began working for Northrop Aircraft Co. in 1941, the starting pay for a factory worker was 65 cents an hour and engineers armed with slide rules designed airplanes on a drafting board.
Source: L.A. Times - Business | 1 Jul 2009 | 7:00 am Jerry Huben's 68-year career in aviation comes in for a landingThe aircraft engineer, who started working for Northrop in 1941, is retiring after helping build some of the nation's more notable airplanes. ...Source: RSS feed - channel BNPaperBusiness | 1 Jul 2009 | 7:00 am One small, green rail line makes peace at the ports of L.A. and Long BeachPacific Harbor Line coordinates the movements of cargo into and out of the harbor. Just 11 years old, it was created to be a problem solver.The heavy-metal clash as rail cars slam together is like a symphony to Andrew Fox, and he can hear just how well each note is played as trains assemble on the railroad he runs.
Source: L.A. Times - Business | 1 Jul 2009 | 7:00 am Disney plans major expansion of Hong Kong theme parkThe $450-million, five-year project will add three theme areas and boost the total park size by 23% in a bid to jolt sagging performance. ...Source: RSS feed - channel BNPaperBusiness | 1 Jul 2009 | 7:00 am Autism patients' treatment is denied illegally, group saysConsumer Watchdog asks a judge to order the state Department of Managed Health Care to require insurers to cover prescribed treatments, including a high-cost therapy that insurers have disqualified.State regulators are violating mental health and other laws by allowing health insurers to deny effective treatment for children with autism, consumer advocates contend.
Source: L.A. Times - Business | 1 Jul 2009 | 7:00 am Stocks end quarter higher for the first time in nearly two yearsThe benchmark Standard & Poor's 500 index climbed 15.2% in the period -- its largest gain for any quarter since 1998.Fear finally gave way to sustained hope on Wall Street in the last three months, lifting major stock indexes to their first quarterly advance in nearly two years.
Source: L.A. Times - Business | 1 Jul 2009 | 7:00 am Unions hope to organize Inland Empire warehouse workersA labor coalition known as Change to Win is focusing on the vast warehouse and distribution hub in the region, which handles goods from the ports of Los Angeles and Long Beach. ...Source: RSS feed - channel BNPaperBusiness | 1 Jul 2009 | 7:00 am Autism patients' treatment is denied illegally, group saysConsumer Watchdog asks a judge to order the state Department of Managed Health Care to require insurers to cover prescribed treatments, including a high-cost therapy that insurers have disqualified. ...Source: RSS feed - channel BNPaperBusiness | 1 Jul 2009 | 7:00 am China to delay requiring Green Dam Youth Escort filtering softwareThe plan to require the software in new computers sold in China had met with criticism that it violated free speech and was impractical. The government says only that firms need more time to comply. ...Source: RSS feed - channel BNPaperBusiness | 1 Jul 2009 | 7:00 am Obama sends consumer-protection bill to CongressThe plan would create a Consumer Financial Protection Agency and make banks and non-banks subject to the same rules. Some Republicans and business groups say it threatens economic freedom.President Obama, pushing a key part of his overhaul of financial regulations, sent to Congress a draft bill that would create the Consumer Financial Protection Agency, which he said would better protect Americans from unscrupulous practices and make financial products easier to understand.
Source: L.A. Times - Business | 1 Jul 2009 | 7:00 am U.S. home prices still falling, but not quite as steeplyS & P/Case-Shiller index shows a decline of 18% in April from a year earlier. The January year-to-year drop was 19%. In the L.A. area, prices fell 21% from April to April; the January drop was 25%...Source: RSS feed - channel BNPaperBusiness | 1 Jul 2009 | 7:00 am Unions hope to organize Inland Empire warehouse workersA labor coalition known as Change to Win is focusing on the vast warehouse and distribution hub in the region, which handles goods from the ports of Los Angeles and Long Beach.The Inland Empire has become a new battleground for unions looking to organize warehouse workers and broaden labor's clout in international trade, a $300-billion industry in the Southland.
Source: L.A. Times - Business | 1 Jul 2009 | 7:00 am Fired columnist Roger Friedman sues News Corp.The Fox News columnist was fired after reviewing a pirated copy of 'X-Men Origins: Wolverine.' He claims Rupert Murdoch was trying to cover his own inadvertent leak of the movie. ...Source: RSS feed - channel BNPaperBusiness | 1 Jul 2009 | 7:00 am NZ stocks: Market closes downThe New Zealand sharemarket closed lower today, reflecting weakness in offshore markets. The benchmark NZSX-50 closed down 15.737 points, or 0.563 per cent, at 2780.369. There were 35 rises and 41 falls among the 116 stocks traded....Source: New Zealand Herald - Business | 1 Jul 2009 | 6:34 am Currency: Dollar steadies after fall against USThe New Zealand dollar consolidated today after dropping half a cent on Tuesday night as the US dollar rose. The NZ dollar was worth US64.44c at 5pm, little changed from US64.52c at 8am, and down from US65.16c at 5pm yesterday. It...Source: New Zealand Herald - Business | 1 Jul 2009 | 5:37 am BofA's asset management unit gets lukewarm bids: report(Reuters) - Bank of America Corp's primary investment management unit is drawing lower than expected bids after its likeliest suitor, BlackRock Inc , inked a blockbuster deal to buy Barclays Global Investor , the Financial Times reported, citing people close to the matter.Source: Reuters: Business News | 1 Jul 2009 | 5:04 am Futures Up Despite Employment Data (Market Update)News at a Glance
The LowdownThere may be time for a recovery this week yet. Futures gave up some early gains after Automatic Data Processing announced greater-than-expected employment declines Wednesday morning. Stocks still looked to open higher, as investors anticipated reports on manufacturing and home sales. Shortly after 8:30 a.m., Dow, Nasdaq and S&P 500 futures were trading above fair value. European shares rose after an increase in a measure of Chinese manufacturing suggested the global economy is recovering. The Chinese Purchasing Managers’ Index rose to a seasonally adjusted 53.2 in June, edging up from 53.1 in May, the Federation of Logistics and Purchasing said Wednesday. A reading above 50 indicates an expansion. In Asia, stocks fell on signs economic recovery may not be imediately at hand. Japan's tankan index, which measures business sentiment, improved to -48, up from -58 in the previous quarter, but the results still were slightly below analysts' expectations of -43. Oil prices surged on reports that U.S. crude-oil stockpiles fell as much as 6.8 million barrels, compared with a decline of 2.2 million barrels expected by energy analysts. By 8:34 a.m., crude was trading up $1.46 to $71.35 a barrel. Corporate News
The Economy
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Source: SmartMoney.com | 1 Jul 2009 | 4:00 am 5 Stock Bargains, Based on Sales (Screens)A small pay increase or cut for a worker can make an extreme difference in the amount of pocket money left each month after the bills are paid. For much the same reason, moderate changes in corporate sales can lead to huge swings in earnings. Last quarter, companies in the S&P 500 index reported a 16.5% decline in sales vs. a year earlier. Earnings plunged 39%. For stock investors, the relative stability of sales makes the measure more reliable than earnings for purposes of deciding which companies are cheap. Run a search for low price/sales ratios and you’ll uncover promising stocks that a search for low price/earnings ratios might miss. Moreover, according to market researchers like James O’Shaughnessy, who conducted a study of the matter for his investment guide “What Works On Wall Street,” the P/S ratio is a better predictor of stock performance than the P/E. The companies below have low P/S ratios, stable or growing sales, strong balance sheets and decent dividends. Boeing (BA) last week announced another delay in the test flight of its fuel-efficient 787 jetliner, which is now two years behind schedule. Qantas, the Australian carrier, cancelled orders for 15 of them. The delays are embarrassing for Boeing, but not uncommon in the industry, and analysts see little danger of customers defecting to its European competitor, Airbus, which is years behind Boeing in development of its competing A350 (although some carriers, like Qantas, might use the delays as an opportunity to put off orders during the current travel downturn). Boeing’s sales are still expected to increase 11% this year, and profits are projected to rise 23%. I recommended the stock in early March as one of “9 Stocks That Could Double Your Money.” It’s up 42% since that column ran but still looks cheap and comes with a 4% dividend yield. Nothing says “recession” quite like canned chili. While most casual dining chains are suffering sales declines this year, Hormel Foods (HRL) is on pace for a 2% improvement in sales and an 11% rise in profits. The stock has climbed 12% since I highlighted it at the end of 2008 in a search for insider buying, but its P/S ratio still stands at a discount of 25% to that of Kraft (KFT). The company has a pristine balance sheet and pays a 2.2% dividend. It has topped Wall Street’s earnings forecasts in recent quarters by double-digit percentages, suggesting operational momentum that’s catching investors by surprise. Scott’s Miracle-Gro (SMG) had a painful urea problem when I recommended the stock in July 2008. The nitrogen-rich compound, discarded freely by humans but manufactured by chemical companies using ammonia and carbon dioxide, had soared to $800 a ton on agricultural markets, crimping profits for fertilizer sellers, including Scott’s. A ton of the stuff now costs closer to $250, just in time for Scott’s to lock in new supply contracts. Shares are up 81% since my recommendation, vs. a 27% decline for the S&P 500. Even now, they still look reasonably priced, and while the stock’s 1.4% dividend yield is puny, it’s also easily affordable relative to profits. Have a look if you like at the table below, which has details on these three and two other companies my P/S search recently turned up.
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America may be the great melting pot, but it hasn't always fully embraced the immigrants who have arrived on its shores and helped build its foundations. For years, there have been heated debates over everything from how many visas the government should issue to whether newcomers to America are stealing jobs and lowering wages for U.S. citizens.
Indeed, former Pennsylvania Senator Rick Santorum rose to national prominence partly on his support for building a barrier along the border with Mexico. On the other side of the debate, the Obama administration has pledged to make creating a path for illegal immigrants to become legal a top priority.
But no matter where people stand on the immigration issue there is one thing that isn't up for debate: Foreign-born entrepreneurs have founded some of the nation's biggest companies, and have been responsible for employing millions of Americans over the course of U.S. history.
Nearly 30 years after coming to this country, Vivek Wadhwa, an Indian immigrant, two-time entrepreneur and visiting scholar at the University of California, Berkeley (he holds similar appointments at Harvard and Duke Universities) co-authored a study that found that, between 1995 and 2005, more than a quarter of the nation's tech startups had at least one founder who was foreign born. Perhaps more important, immigrant-founded tech companies generated more than $50 billion in annual sales and, in 2005, employed some 450,000 people. The numbers are even greater if you look beyond the tech sector, he says.
"America is the most desirable country in the world for a foreigner," says Wadhwa. "And it is also the most entrepreneurial society on earth. America encourages risk-taking. It's called the American Dream."
From the French-born founder of DuPont (DD) who started out selling gunpowder in the early 1800s to Hungarian-born Andy Grove, the co-founder of Intel (INTC), corporate America and Americans have long benefitted from such risk-taking immigrant entrepreneurs. With Independence Day upon us, SmartMoney surveyed the corporate landscape looking for major American companies that were founded by immigrants. From the bluest (and oldest) of blue chips to the biggest of upstart tech giants, here is a look at 10 companies that fulfill the promise of the American Dream -- and provide tens of thousands of Americans with jobs.
Founder: Ted Arison
Born in Israel
U.S. employees: 36,500
Israeli-born Arison started Carnival Cruise Lines in 1972 with a single ship – The Mardi Gras. But the party got off to a slow start. By 1974, the fledgling cruise line was struggling so much that Arison was able to buy full ownership of the company for $1. Now 35 years later, Carnival Cruise Lines has morphed into Carnival Corporation (CCL), which operates 11 separate cruise lines, and has a market cap of over $26 billion. The swine flu outbreak and consumers cutting back on travel haven’t helped the company’s bottom line this year. Analysts on average are expecting sales to fall 11% from 2008 to $13 billion, according to data from Thomson Reuters. The consensus is that 2010 will offer some calmer seas, with sales expected to rise to around $14 billion.
The photos in this article were supplied by the companies, except for the following: Pierre Omidyar and Sergey Brin are from Getty Images; Ted Arison is from the National Foundation for Advancement in the Arts.
Founder: Éleuthère Irénée du Pont de Nemours
Born in France
U.S. employees: 25,000
DuPont (DD), the world's second-largest chemicals company and a long-time component of the Dow Jones Industrial Average, has given the world everything from nylon to Lycra to Teflon, but it started out as a humble gunpowder manufacturer in 1802. Éleuthère Irénée du Pont de Nemours, the son of a Paris watchmaker, came to the U.S. two years earlier to escape the violence of the French Revolution. By the mid-1800s, DuPont was the largest supplier of gunpowder to the U.S. military.
Based in Wilmington, Del., the company now operates in 70 countries and employs workers in nearly 30 U.S. states. As a basic materials company and early cycle stock, DuPont is well poised to benefit from an upturn in the global economy, especially when it comes to Chinese stimulus spending, says Laurence Alexander, an analyst at Jefferies & Co., who rates the company's shares at Outperform.
Founder: Pierre Omidyar
Born in France
U.S. employees: Approximately 10,000
French-born Pierre Omidyar's eBay (EBAY) not only employs roughly 10,000 Americans, but there are thousands more who have made a living off of the company he founded by auctioning items from their basements and attics. Born to Iranian-immigrant parents, Omidyar moved to the U.S. when he was 6. After graduating from Tufts with a degree in computer science he went to work at a subsidiary of Apple (AAPL), grinding out code by day -- and working on his entrepreneurial venture at night. Launched in 1997, eBay now claims the title of the world's largest online marketplace, but its outsize growth has cooled off due to competition from Amazon.com (AMZN) and other online retailers. Whether new Chief Executive John Donahoe, who succeeded Meg Whitman a year ago, can reinvigorate this growth story remains to be seen, says Benchmark analyst Frederick Moran, who rates shares at Hold.
Founder: Sergey Brin
Born in Russia
U.S. employees: Approximately 13,000
Born in Moscow, Brin immigrated to the U.S. at age 6. After graduating from the University of Maryland, College Park, with a bachelor's degree in science (and with honors in mathematics and computer science), he enrolled at Stanford University's prestigious graduate school in computer science where he met Larry Page. The two founded Google (GOOG) in 1998 and Brin -- now President, Technology -- is part of the three-man team (including Page and Chairman and Chief Executive Eric Schmidt) that shares day-to-day responsibility for running the company. At one point Google's growth seemed unstoppable, but the recession has taken a toll on its share price. Regardless, the company continues to grab market share in the all-important search business, making the stock a Buy, according to Jefferies analyst Youssef Squali.
Co-founder: Andy Grove
Born in Hungary
U.S. employees: Approximately 44,000
A refugee of the Hungarian Revolution, Grove immigrated to the U.S. under cover of darkness in 1956. After earning a bachelor's degree from City College of New York and a Ph.D. from U.C., Berkeley in 1963, Grove worked in the semiconductor industry for the next few years until becoming the fourth employee of a start-up called Intel (INTC), which was launched in 1968. Grove transformed Intel from a maker of memory chips to a manufacturer of microprocessors. The rest, as they say, is history: Today this Dow component is the world's largest maker of central processing units, or CPUs -- the central brain in the majority of the world's PCs. As an early cycle stock that's very sensitive to an uptick in the global economy (and a major exporter that benefits from a weaker dollar), Intel's fortunes look bright as the economy recovers, or so the thinking goes in the market. Investors have pushed Intel's stock up 30% since the broader market bottomed in early March.
Founder: Jen-Hsun Huang
Born in Taiwan
U.S. employees: 3,300
From rising ping pong star to the co-founder of a $6 billion graphics chip maker, the career track of Taiwan-born Jen-Hsun Huang has been event-filled to say the least. As a teenager, Huang was a nationally-ranked table tennis player; he competed in his first national tournament at the age of 14 in Las Vegas. He earned a degree in electrical engineering at Oregon State University and a masters at Stanford University. In 1993, he co-founded Nvidia (NVDA) with Chris Malachowsky and immediately began serving as president and CEO. It took two years for the company’s first product to launch, but it’s been on a roll ever since. One of their crowning achievements? Graphics technology that makes the yellow first-down line appear on live football games. The stock took last fall’s crash particularly rough: It fell 76%. But so far this year it's risen 43%.
Founders: Charles Pfizer and Charles Erhart
Born in Germany
U.S. employees: 30,000
It sounds like something out of a bad sci-fi movie: Two German chemists, cousins in fact, move to America seeking opportunity and find it – battling parasitic worms. But that’s how this pharma giant got its start. Charles Pfizer and Charles Erhart came to the U.S. in 1849, with a $2,500 loan, and set up shop in Williamsburg, Brooklyn. The cousins’ first pharma hit was Santonin, a drug used to fight tapeworms. Today, Pfizer (PFE) sells blockbuster drugs like the cholesterol-fighting Lipitor, which brings in $12 billion a year, more than a quarter of the company’s 2008 sales. Linda Bannister, a senior health care analyst at Edward Jones, is concerned that when Lipitor loses its patent protection in 2012, the company will be hard-pressed to replace those sales. But its pending acquisition of fellow drug maker Wyeth (WYE), which had $23 billion in sales last year, should help ease any withdrawal symptoms.
Founders: William Procter and James Gamble
Born in England and Ireland, respectively
U.S. employees: Almost 40,000
Look around your home and you're likely to find P&G's (PG) products everywhere. From Tide detergent to Pampers diapers to Crest toothpaste, the nation's biggest consumer products company and Dow component is truly a red, white and blue chip. Less well-known is that it was founded in 1837 by an English candle maker named William Procter and a soap maker from Ireland named James Gamble. Another interesting piece of P&G trivia: In 1887, the company instituted a pioneering profit-sharing program that gave employees ownership stake in the company. Today P&G investors -- both those who are employed at the company and those who are not -- can scoff at the notion that the U.S. equity market is suffering from a lost decade. Instead, they can take comfort in the fact that this stalwart consumer staples stock outperformed the broader market by a full 50 percentage points over the last 10 years.
Founder: Andrew Carnegie
Born in Scotland
North American (figure includes Canada) employees: 28,680
Pittsburgh’s always been the home of the Steelers, but before there was Terry Bradshaw, Chuck Noll and the Steel Curtain defense, there was Andrew Carnegie and the Carnegie Steel Company. Carnegie, a Scottish immigrant, formed the company in the 1870s. In 1901, it was sold to Elbert H. Gary and J.P. Morgan, who already owned the Federal Steel Company. Together, the two steel manufacturers formed the nucleus of United States Steel Corporation (X), which today produces 31.7 million tons of raw steel annually. The past 18 months haven’t been kind to the steel giant -- sagging demand has sent the stock price down more than 65%, but the company’s been down this road before. Ten years ago, the steel industry hit a similar rough patch and U.S. Steel’s stock fell 64%, only to bounce back and gain 621% over the next six years.
Founder: Jerry Yang
Born in Taiwan
U.S. employees: 6,000
What started out as a directory of web sites eventually grew into one of the most trafficked sites on the internet, thanks in large part to its Taiwanese co-founder Jerry Yang. Yang, along with fellow Stanford University Ph.D. candidate, David Filo, began creating the web site that would later be named Yahoo (YHOO) in 1994. Two years later Yahoo went public, with just 46 employees. Now it employs 260 times that amount world-wide, and roughly 6,000 in the U.S. Yang traded in his title of Chief Yahoo to take the helm as CEO in 2007. But the role wasn't for him – Yahoo’s earnings fell 1% to $1.8 billion and its stock dropped 58% to $12 a share in less than two years. Yang handed over the CEO title to Carol Bartz in January and returned to his Chief Yahoo post. Analysts like Jefferies' Squali have high hopes that Bartz can reinvigorate Yahoo’s growth. Squali rates the company's shares a Buy.
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With more Americans putting their money away in savings accounts, it seems like a fitting time to remember that you don’t have to spend a lot to honor your country – even while on vacation.
Many hotels near patriotic sites have rolled back their prices to draw out tourists who might be setting aside less money for leisure in the midst of the recession. As the American wallet tightened, these businesses did not have much choice. Consumer confidence took a step back in June and remains at a level economists consider unhealthy -- and while Americans are spending, their dollars are not necessarily going toward travel. AAA predicts nearly 2% fewer Americans will travel over the July 4 weekend, and a Mintel survey of vacationers’ habits conducted earlier this month found that 60% of respondents chose to drive their own cars rather than fly during their last vacation.
With cities desperate to attract tourists, patriotic-minded travelers can find a host of deals in cities with rich histories and notable attractions. Already-struggling hotels have incentive to pull in more travelers over the long weekend. Those deals, coupled with inexpensive historical sites, can add up to road trips that won’t break the bank, especially with gas prices down sharply from a year ago. Travelers can find deals at sites that stretch across the country, from the East Coast to the Rocky Mountains and from New England down to the Mid-Atlantic states.
SmartMoney.com talked to historians and travel experts to find deals on all-American attractions. Check out six historic -- and economical -- cities to visit this summer:
Follow in the footsteps of the founding fathers and declare your financial independence with a visit to this historic city. Fourth of July hotel rates are down 19% from last year, says Genevieve Brown Shaw, a spokeswoman for Travelocity. For example, four-star Sofitel Philadelphia is offering a night free with a reservation of at least four nights this summer, pushing the daily rate (regularly $205 and up) to an average $154. Shaw’s must-visit sites for first-time visitors -- the Liberty Bell, Independence Hall and the Betsy Ross House -- are more economical. Admission to the first two is free, although you’ll need timed tickets to avoid the crowds. Entry to the Betsy Ross House runs $3 for adults and $2 for kids.
Vacationers voted Washington the city with the best free attractions in a June survey by travel review site TripAdvisor.com. The list of patriotic freebies is exhaustive. The National Mall & Memorial Parks include the Lincoln Memorial, the National World War II Memorial and the FDR Memorial. Ford’s Theater distributes free tickets for timed tours of the historic theater where Abraham Lincoln was assassinated and plays are still performed. Lincoln fans can also check out exhibits this year at the Smithsonian Institute’s museums (free) celebrating the bicentennial of his birth. If you stay in nearby Arlington (site of the Arlington National Cemetery, another free attraction) at the Westin Arlington Gateway, you’ll save 35% on a room with a three-night stay. You’ll pay $123 a night, down from $189.
An Independence Day trip to the Big Apple will offer a rare view of the Manhattan skyline this year. Starting July 4, visitors can once again climb the steps of the Statue of Liberty to its crown. The crown had been closed since the Sept. 11, 2001, terrorist attacks and will be closed again shortly after the holiday for a two-year renovation. You can also head to Ellis Island, where you can conduct a search for your ancestors. Both attractions are free, though you’ll pay $12 for adults and $5 per child for the ferry ride over, plus a $3 fee for a trip to the Statue’s crown. Get the full immigrant experience with a trip to the New York City Tenement Museum ($17 adults, $13 kids). “You have to go [there] to complete the story,” says Edward O’Donnell, associate professor of history at the College of the Holy Cross in Worcester, Mass. “Most immigrants spent decades in tenements and only a few hours on Ellis Island.” Expedia lists many deals on accommodations, too. Rates at the three-and-a-half-star Bentley hotel are now down as much as 30%. Sale prices start at $154 per night.
Hike the Presidential Trail to the base of Mt. Rushmore, and listen to a free talk about how the four presidential heads were carved into the mountain face using dynamite. Entry to the memorial is free, and parking is $10. Time your summer visit to coincide with one of the U.S. National Park Service’s free weekends on July 18-19 and Aug. 15-16, and you can camp out in nearby Badlands National Park, a fossil-rich park about two hours away by car. (If you stay another time, it’s still a bargain at $15 for a seven-day vehicle permit.)
You can easily spend an entire day exploring the Gettysburg National Military Park, site of the battle that turned the course of the Civil War, says Allison Lockwood, project manager of travel information for AAA, who devised a nine-hour driving tour of Civil War sites. Entry to the park is free, but trading up to a guided tour is affordable. A two-hour car tour for up to six people with one of the park’s battlefield guides costs $55, while admission to the museum starts at $6 for adults and $4 for kids. Even the drive to the park can be a draw for history buffs. “You’re on some of the roads the troops traveled on,” Lockwood says. If you plan to stay overnight, the nearby two-star Chambersburg Travelodge is offering 15% off a stay of two nights or more for Expedia customers, which lowers the $85 weekend rate to $72.
"Boston's Freedom Trail is an easy way to see many of the city's historical sites, like the Paul Revere House, the Old North Church and Faneuil Hall,” Travelocity’s Shaw says. “There are 16 sites along the red-brick trail, but you can pick and choose the ones that interest you the most.” Most carry nominal admission fees -- for example, the Paul Revere House costs $3.50 for adults, $1 for kids -- so visitors who plan to explore them all might pick up a Go Boston card, which offers free access to more than 70 tours and attractions around the city. Prices for a one-day pass are $55 for adults and $38 for kids and scale up for additional days. Hotels rates for the July 4 weekend are down 7% from last year, according to Travelocity. The three-and-a-half-star Boston Park Plaza Hotel & Towers is knocking 20% off its rates, with sale prices starting at $164 per night.
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.
Can you, a newly minted entrepreneur, get a jump on the competition by self-publishing a book? Yes, you can! Or so claims Stacey Hanke, consultant and author of the self-published how-to book Yes You Can!
Last year Hanke was looking for a way to stand out from the mob of other consultants competing to serve as business communication advisers. So she spent nine months writing and a total of $3,000 to publish the 165-page book—and bought 500 copies so she could hand them out to potential clients. Hanke, 39, says the book “opened doors,” and boosted her business and requests for speeches by 20 percent. Today those speeches are ripe occasions for selling copies of Yes You Can! to other people, at $14 each. Try getting that kind of return with a copy of your résumé.
For growing numbers of professionals who want instant credibility, books are the new business cards. It’s part of a publishing surge that led the number of print-on-demand titles to rise 132 percent in 2008 over the previous year, according to Bowker’s Books in Print database. The entrepreneur with a book under her belt is no longer a schnook fighting for recognition; she’s a Published Author sharing her wisdom. “People figure you must be an expert—it’s kind of weird, but it works that way,” says Doug Wojcieszak, who self-published Sorry Works!, on how hospitals should treat families that bring malpractice cases.
The book-as-calling-card has been brought to us by advances in digital publishing, most notably the print-on-demand book. This business is an example of the “long tail” model, where online distribution enables sales of unique items (like your book) in tiny quantities (like 25 copies for your sales conference). New printing companies are eager to make the long tail happen. For $1,000, the company AuthorHouse proofread Sorry Works!—apparently, there’s no extra charge for exclamation points in the self-publishing world—helped Wojcieszak design a cover and got him the first copies of his $24.99 book within 30 days.
But note the word self. You’re basically on your own when it comes to marketing and distribution. Edward Zelinsky, a graphic designer in Falmouth, Maine, uses Lulu.com, another print-on-demand house, to publish books of his work. But he can’t recall someone hiring him for his design services via Lulu’s Web site, where his books are available for free viewing and downloading. “The Web sites are so deep and vast,” he says, “your book disappears into the maw.”
At least the publishers try to help authors cast a wider net. At Lulu.com you can pay an extra $49.95 to get the copyright and an ISBN (International Standard Book Number). That in turn will get it on the Books in Print list viewed by libraries and other publishers, making it possible for people to order it from retailers like Borders. For publishing packages starting at $500, AuthorHouse assigns its authors ISBNs and has them listed on sites like Amazon.com.
One great aspect of self-publishing, says Keith Ogorek, of AuthorHouse parent company Author Solutions, “is that the book doesn’t say it’s self-published, so nobody knows.” Just don’t count on these books as a way to get rich. Booksellers typically take 50 percent of the retail price, leaving authors 5 to 10 percent. An author should see self-publishing as a marketing tool, not a route to big bucks, says Hanke, who adds, “I’ll make millions on my next book.”
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.
FOR YEARS, TOP UNIVERSITY ENDOWMENTS at Harvard, Yale and Princeton were the envy of the investment world, thanks to the outsized returns they generated from significant investments in nontraditional assets such as private equity, real estate, hedge funds and commodities, and low exposure to U.S. stocks and bonds.
Now that widely imitated asset- allocation strategy, dubbed the Yale model because of the enormous success of the Yale endowment under the 24-year leadership of David Swensen, is facing its sternest test amid the bear market of the past 12 months. Harvard and Princeton are assuming their endowments fell about 30% for the fiscal year ending June 30, while Yale is projecting a decline of 25%.
The outlook is challenging for the big Ivy League endowments because many of their investments are in illiquid private- equity and real-estate funds or commodity-related assets such as timberland, whose estimated value might not reflect today's steeply discounted market prices. Yale and Princeton, for instance, have invested roughly half their endowment assets in private-equity deals, real estate and commodities, a far cry from the 65%-to-35% blend of stocks and bonds favored by many individuals. If the three Ivies valued such assets at market-clearing prices, their endowment losses for fiscal 2008-09 could approach 35%.
It is tough for outsiders to assess the big university endowments, given limited public disclosure, and endowment directors at Harvard, Yale and Princeton declined to speak with Barron's. The endowments reveal their asset allocations, but not individual investments or outside managers. Most of their assets are farmed out, with endowment pros like Swensen overseeing the selection process while monitoring risk and results.
We have assumed that private-equity, real-estate and commodity investments lost about 50% in the past year, based on market benchmarks. Major commodity indexes are off 50%, as are independent oil and gas stocks. The MSCI index of real-estate investment trusts has lost 45%, and private-equity investments are trading for 50 cents on the dollar, or less. The Standard & Poor's 500 index has fallen 27%.
Timberland, for instance, looks significantly overvalued and could drop sharply as investors "race to the exits," Barron's Roundtable member Oscar Schafer said in our midyear update two weeks ago ("Too Far, Too Fast," June 15).
OTHER MAJOR ENDOWMENTS, including those of Stanford, the University of Michigan and the University of Virginia, also have allocated a significant portion of assets to so-called alternative investments. Stanford has less exposure than the biggest Ivies, however. It is projecting a 30% loss for the current year.
Barron's was among the first to identify university-endowment problems, in a cover story last fall ("Crash Course," Nov. 10, 2008), and the financial pressures on both the endowments and schools have worsened significantly since. We correctly predicted the major endowments could be down 25% or more in the current fiscal year, even as some endowment chiefs were insisting any losses would be much lower.
The endowments may end up trailing the stock market in the coming year because of the lag in marking down illiquid asset classes. As we argued last fall, it is probably time -- and now, past time -- for the big endowments to exit some of their illiquid investments and buy stocks and bonds, both to take advantage of market opportunities and gain greater financial flexibility.
In the near term, however, endowment holdings may become more skewed toward illiquid assets, as they are tapped to ease strained university budgets and fund new investment commitments to private-equity and real-estate managers that were made when the markets were stronger. Endowments normally recycle distributions from existing private-equity and real-estate funds into new investments, but the bear market has slowed such distributions to a trickle. Institutional investors who walk away from private-equity commitments usually pay a steep price, which could include forfeiting existing holdings.
Liquidity problems are affecting Harvard, which ended its 2008 fiscal year with the country's largest university endowment: $36.9 billion. Harvard lost two key internal bond managers last week amid reports the managers were unhappy that the endowment had grown more conservative in its investments, limiting their ability to buy riskier bonds. Such caution isn't surprising, however, because liquidity problems last fall, prompted by market declines and the need to post collateral to offset losses on an interest-rate swap tied to a university bond offering, nearly forced the endowment to sell private-equity interests at distressed prices.
To give themselves financial breathing room and forestall asset sales, major universities sold sizable amounts of debt last year. Harvard issued $1.5 billion; Princeton, $1 billion, and Yale, $800 million. Harvard's debt now exceeds $5 billion. Even while borrowing heavily, many big universities have been sellers of stocks, bonds and other liquid assets in the past year.
Despite their investment losses in the past year, major university endowments still have a stellar long-term record. For the 10 years ended June 30, 2008, the Yale endowment gained 16.3% annually, while Harvard rose 13.8% a year and Princeton, 14.9%. The Standard & Poor's 500 logged an average annual increase of just 2.9% in that span.
Yale's endowment grew to $22.9 billion from $6.6 billion in the decade, while Harvard's expanded to $36.9 billion from $13 billion. The Princeton endowment rose to $16.3 billion from $5.6 billion. Harvard's strong performance in the past 10 years relative to that of the average nonprofit investment pool translated into a staggering $23 billion of added value.
EVEN IF THE BIG IVY ENDOWMENTS enter a period of underperformance, their chiefs deserve praise for past achievements, attained while working for far less than they might have elsewhere in the investment business.
Swensen's compensation has been about $2 million annually, while the head of the Princeton endowment, Andy Golden, earned about $1.5 million in 2007. Harvard is more generous with pay, which caused a fuss during the tenure of former endowment chief Jack Meyer. Compensation information for the current chief, Jane Mendillo, isn't available because she started the job a year ago. Her predecessor, Mohamed El-Erian, now chief executive and co-chief investment officer of bond manager Pimco, earned $6.5 million in his final year on the job.
All the big endowments have a so-called policy portfolio designed to provide optimal returns with relatively low risk (see table above). U.S. stocks and bonds, for instance, have been deemed unattractive in these asset-allocation models relative to private equity, hedge funds and natural resources.
At Yale and Princeton, hedge funds, private-equity and real-estate funds, and commodity-related investments accounted for about 75% of endowment assets as of last June; the total for Harvard was around 55%, above the 35% allocation to alternatives favored by the typical nonprofit endowment.
Yale and Princeton have a 95%-plus exposure to equity and equity-like investments. Yale had a net bond exposure of close to zero last year after factoring in the leverage on its portfolio. This extreme approach to asset allocation may need to be reconsidered.
"The policy-portfolio concept is dead," says Byron Wien, the chief investment strategist at Pequot Capital Management. "The idea used to be that every asset had a predictable rate of return and volatility based on history. History, however, is less useful now. Yale has half its assets in private equity and natural resources. That has provided the bulk of its outperformance. Yale's nonpublic investments could provide lower investment returns going forward."
Wien wrote last year that private-equity returns could be depressed for an extended period because of "sluggish business conditions, a lackluster new-issue environment and an inability to borrow funds to leverage up acquired companies."
In a recent interview on PBS, Swensen acknowledged that "diversification isn't going to help you in the midst of a financial crisis, or at least the type of diversification that you see in institutional portfolios like Yale's." He added, "I'm not sure that the crisis has caused us to conclude that we would do things differently, but it certainly highlighted the importance of liquidity."
Swensen's view has been that universities, as the most long-term of investors, could trade illiquidity for the higher returns of alternative assets. Once markets normalize, the benefits of the Yale approach should materialize once again, the endowment wrote in its 2008 annual.
THE AGGRESSIVE ASSET ALLOCATION favored by endowments is understandable, as they disburse an average of 5% of endowment funds each year for university operating expenses, while also trying to stay ahead of inflation. Princeton, for instance, aims for 10% annual returns, a tough goal over any extended period.
In the near term, endowment chiefs may be wrestling with how to handle commitments to private-equity and real-estate funds. At Harvard, investment commitments totaled $11 billion on June 30, 2008; at Yale, $8.7 billion, and Princeton, $6.1 billion. These commitments are especially large relative to shrunken endowments. Harvard's endowment could end this month in the $25 billion range; Yale's is about $17 billion, and Princeton's, $11 billion, after investment declines, yearly contributions to university budgets and new gifts from alumni and others.
One closely watched endowment-liquidity barometer is the level of existing limited-partnership investments -- including hedge funds, private equity and real estate -- plus investment commitments as a percentage of the total endowment. Yale and Princeton are thought to have some of the highest -- that is, worst -- ratios. The risk is that these endowments could become even more illiquid in the coming year.
Few outside their own communities will cry for the big Ivies, given their still-enormous endowments. But they ironically are feeling a bigger financial impact from the bear market than less wealthy schools because the big Ivies have garnered as much as half their budgets from their endowments, compared with 5% to 10% at large non-Ivies. The bigger take makes the endowments vulnerable to further market declines.
Even as their endowments shrink, universities are grappling with other problems, such as declining donations and greater demands for student financial aid. Also, state laws often prohibit endowments from spending donated money if endowment assets fall after the gifts have been made.
Precipitously declining values in many asset classes in the past year may mean gifts of more recent vintage effectively are frozen. A donor who funded a professorship at a major university in the past few years says the school recently asked him for a waiver to tap into the gift because state laws otherwise would prohibit it.
COLLEGES AND UNIVERSITIES throughout the country are cutting budgets in response to endowment declines and a drop in alumni contributions. The Ivies are freezing salaries, firing administrators and support staff, and not hiring replacements when professors depart. They are also taking lesser steps: Hot breakfasts have been eliminated at certain Harvard dining halls.
Princeton is looking to shave $170 million in two years from its $1.3 billion operating budget, and has put on hold all new construction and renovation projects. In the current fiscal year, the Princeton endowment has contributed more than $600 million to the budget, far more than the university gets from tuition and other student fees. Harvard has slowed and may pause the construction of its Allston, Mass., campus across the river from its main campus in Cambridge, angering Allston residents who have been living with an enormous hole in the ground.
Now that the fat years are over, even the wealthiest universities are taking a hard look at their operations. As some top administrators have observed, universities often are run in the opposite way from for-profit corporations. Until now, schools have taken steps that increase costs, such as reducing faculty-student ratios, raising professors' salaries in excess of inflation, vastly expanding their physical plants with state-of-the-art science labs and dormitories, and hiring an army of administrators.
The richest universities also have offered increasingly generous student financial-aid packages, angering less-wealthy colleges that can't match such offers. Some Ivies were on their way to requiring only modest tuition payments from families with annual income of less than $150,000 to $200,000 a year. Financial aid remains a priority in most places.
Emblematic of the changes forced by the financial crisis and bear market, Princeton President Shirley Tilghman recently wrote a letter in the Princeton Alumni Weekly titled the "New Normal," stating that "the Princeton of tomorrow will be leaner than the one we know today."
Jack Bogle, the former chief executive of the Vanguard mutual-fund complex and now the head of the Bogle Financial Markets Research Center, is sympathetic to the Ivies. "I think the endowment directors will look at the past year as an aberration, rather than a stain on their record, and that's fair," he says.
A Princeton graduate, Bogle says he doubts the endowments will be able to generate 10% annual returns in the years ahead. The big endowments probably erred in keeping their bond allocations so low, he adds, because bonds "have been the most certain way to protect against stock-market declines." That proved true again last year.
WHILE THE BIG IVIES HAVE strong balance sheets, with endowment assets that dwarf their debt, Moody's Investors Service recently downgraded Dartmouth to double-A-1 from triple-A and is concerned about liquidity issues. "The organizations have fared pretty well, but they need to reassess the relative benefit of certain investment strategies," says Moody's analyst Roger Goodman.
University endowments already are leaner than they were just a year ago, and their prospects for recouping investment losses anytime soon look remote. The brutal market of the past year could mark the end of the alternative-investment boom they abetted, as managers of trend-setting university endowments, as well as their followers in the nonprofit world, move back toward the traditional stocks and bonds that once were staples of their investment portfolios.
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.
Like Greg (and the universe) did yesterday, after DK's proclamation that "the recession is over." Unless you're in the market for the business end of one of Kneale's trademark screechy ass hissy fits, in which case, proceed.
$$$ Morgan Stanley and MUFG in joint push [FT]
$$$ Allen Stanford shockingly seen as flight risk [BBC]
$$$ Stern "Wack Packer" Nabbed In Madoff Taping [TSG via Cityfile]
$$$ "In the rest of that interview with the AP, South Carolina Governor Mark Sanford mentioned that he had 'dalliances' with six other women, but 'didn't cross the sex line,' which in politics means handjobs and the occasional non-swallowing oral." But did he write them love letters? [AWL]
$$$ Companies only interested in hiring people who are currently employed [WSJ]
$$$ Helicopter Ben after one day of annotations. [TYMP]
This-- the Securities and Exchange Commission's plan to show us it means business by robbing our nation's banks of the right to appoint actors and sports stars to their boards--is a bunch of bull shit. And I'll have you know The Juice has more business acumen in his pinkie than every Bank of America director combined. Also, do not discount the value of having some with the sort of initiative, drive and loose interpretation of the law that'll allow him to say "I'm gonna break in there and get my shit," which you don't often find in the boardroom.
U.S. companies' celebrity directors include Armstrong, 37, who quit last year after being paid $71,644 by Morgans; National Football League running back O.J. Simpson, 61, a member of four boards and the audit committee at Infinity Broadcasting Corp. before prosecutors charged him in the 1994 murders of ex-wife Nicole Brown Simpson and her friend; and National Basketball Association hall-of-fame guard Oscar Robertson, 70, a Countrywide director for eight years until the lender, at risk of collapse, was bought by Bank of America in 2008."What the SEC wants to do is prompt companies to make sure they're appointing directors who can do the job and not just look pretty on a roster," said Stephen Davis, a senior fellow at the Millstein Center for Corporate Governance and Performance at the Yale School of Management.
Story here, and the actual data.
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Having likely dispensed the advice for years to their children and grandchildren, a group of senior citizens learned firsthand that there is no such thing as a free lunch. The SEC is accusing New York-based Prime Capital Services of luring in the silver hair set with offers of free lunches and then selling them "highly unsuitable variable annuities" on their way out the door. Prime Capital's brokers are under scrutiny for enticing seniors to buy annuities that charged early redemption fees for the years beyond their life expectancy while chowing down on free $5 foot longs. If recent history is any guide, those brokers better start running.
Firm Misled Seniors With Free-Lunch Pitches, SEC Says [Bloomberg]
Reader @spectagirl just tweeted us a link to a job listing at an LA architecture firm, which has an interesting note under "Compensation":
The bad news is we can't pay you what you're worth. The good news is you can stay in the profession, advance your skills, and have an opportunity to grow with us as the market recovers.
Well, at least they're honest. Perhaps applicants will feel lucky the job pays anything. These days many people work for free -- or even pay -- for an internship that gives them a small chance at establishing a career in their field of choice.
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Last year at this time, I created Business Pundit’s first 8 Companies Behind the 4th of July list. When I looked over the list again this year, I found that several companies and products listed had dramatically changed since the list was created. InBev bought Anheuser Busch. Kraft was listed on the Dow Jones, no doubt replacing failed financial companies. People are suddenly opposed to high-fructose corn syrup.
To illustrate those changes, I revised the list. It now includes a Last year/This year section to show how each company has changed. I also added a “How to Go American” tip at the bottom of each item, which gives specific advise on how to support American-made versions of the product.
Fourth of July is the ultimate all-American holiday. Part of what makes it so American is the associated schwag. I can’t think of a single 4th I’ve celebrated without beer and BBQs, flags and fireworks, corn on the cob, and hot dogs.
Here’s a list of the eight major Independence Day accessories–and the companies behind them:
(Image: longtail.com)
Last year: Anheuser-Busch was the biggest brewing company in the United States, with a 48.8% share of national beer sales. By revenue, it was the world’s fourth-largest brewing company.
This year: InBev, the world’s second largest brewer at the time, purchased Anheuser-Busch in a $52 billion deal. The resulting brewing giant, Anheuser Busch InBev, is now the biggest in the world. The new company laid off 1,400 US employees, sold all of Anheuser Busch’s corporate jets, diminished the number of company-supplied Blackberrys from 1200 to 720, eliminated free beer for employees, and replaced “ornate executive suites” with a “sea of desks” (Source: Wall Street Journal)
How to Go American: Buy craft beers! They’re locally made by people who care about beer. They taste better, too.
(Image: crossthebreeze.wordpress.com)
In 1958, George Stephen invented a new kind of grill. Stephen, a Weber Brothers Metal Works employee, created a dome shaped grill with a rounded lid—the first prototype of the classic Weber kettle grill. Today, upwards of 85 million American households own a grill. The Weber kettle grill started it all, even the gas grill, which the company introduced in 1985.
Last year: Weber’s annual survey of people and their grills found that people like their grills colorful. And people with grills entertain at home more often than people without them.
This year: The survey found that the economy is driving people to grill at home more often. Not only that, people are spending more money buying accessories for their grills, or even upgrading them. Gas grills are most popular.
How to Go American: Buy locally-grown food for this year’s 4th of July party.
(Image: visi.com)
Annin & Co., arguably America’s first flag company, made some old and important flags. Like these:
• It was an Annin flag that flew at the inauguration of President Zachery Taylor, starting an inaugural tradition that has continued through the inauguration of President George W. Bush.
• An Annin flag draped the coffin of President Abraham Lincoln on its journey from Washington D.C. to Springfield, Illinois.
• The U.S. Marines raised an Annin flag atop Mount Suribachi on Iwo Jima in 1945
• NASA selected an Annin flag to participate in Apollo 11’s mission to the moon in 1969.
Today, the company claims to be America’s biggest and oldest flag manufacturer.
Last year: Annin certifies its flags are made in the USA. Major retailers like Wal-Mart, Target, and Tru-Value Hardware Stores sell Annin flags.
This year:: Annin is branching out its product base with flag spreaders, team-licensed tailgaiting flags, and, weirdly, shutter covers. Yes, people really do cover their shutters with cloth.
How to Go American: Buy a flag from one of the retailers that sells Annin products.
(Image: howstuffworks.com)
Diamond Sparkler, the Ohio-based manufacturer behind the Phantom Sparklers brand, is the country’s only domestic sparkler maker. Retailers have been importing cheaper China-made sparklers for years. Illegal dumping of foreign-produced sparklers in America has further driven down prices.
“Diamond Sparkler struggles each year to make a profit,” said Bruce Zoldan, president of Phantom Fireworks/B.J. Alan. “But I just can’t envision something as American as sparklers, with its association with the 4th of July, not being made in this country.”
Last year: Beijing pulled off a massive, elaborate fireworks show at the opening of the 2008 Olympics. 29 firework footprints “walked” across the sky to the Bird’s Nest, symbolizing the 29th Olympic Games, writes Xinhua. After that, more than 40,000 firework flowers, stars, Olympic rings, and smiley faces lit up the city. 2,008 smiley faces marked the climax of the show.
This year: Cities and towns across the United States are canceling annual fireworks shows due to a lack of municipal funds. Some cities don’t have the money, while others are choosing to allocate funds towards more urgent expenditures, like sprinklers and food banks, according to the LA Times.
How to Go American: If your 4th of July inventory includes sparklers, buy the American-made kind.
(Image: gothamist.com)
Oscar Meyers Wiener is part of Kraft Foods, a company I was surprised to learn two lesser-known facts about. One, its chair and CEO is a woman: Irene Rosenfeld.
Secondly, Kraft has a recent history of donating aid to disaster-stricken countries. For example, they made a $150,000 donation to the Red Cross after China’s devastating Sichuan earthquake. They donated $50,000 to Myanmar cyclone victims through the World Food Programme. $20,000 went to the American Red Cross to help victims of the Georgia/Oklahoma/Missouri storms and tornadoes.
Last year: Kraft was added to both the Dow Jones Industrial Average and the new Global Dow.
This year: After Kraft canceled a partnership with Ferrara Pan Candy Co., CEO Salvatore Ferrara II is striking back by creating a product to rival Kraft’s Toblerone bar. The “Ferrara,” due out this fall, is a trapezoidal chocolate nougat bar that looks suspiciously like the triangular, chocolate-nougat Toblerone. A more apt name for the bar might be the “Vendetta.”
How to Go American: Kraft food is pretty American. It also supports big agribusinesses. If you’re not into that, buy locally-grown food.
(Image: ecotality.com)
According to the National Corn Growers Association:
The United States is the largest corn producer in the world. In 2003, corn growers in the United States produced 256.905 million metric tons (MMT) of corn, exporting nearly 20% of the crop (51.0 MMT). The top five destinations for U.S. corn are: Japan, Mexico, Taiwan, Canada and Egypt.
Last year The country produced too much corn. However, that didn’t slow the government from subsidizing the plant, which costs taxpayers more than $3 billion annually.
This year: Public opposition to high-fructose corn syrup (HCFS) is mounting. Starbucks and Jamba Juice have both revamped their menus to exclude HCFS, which could increase LDL (bad cholesterol) levels. If corn consumption demand goes down, what’ll happen to all that extra corn? Oh, right, ethanol.
How to Go American: Corn is certainly made in the USA, but if you think corn subsidies are excessive, contact your Congressperson.
New Era, a Buffalo-based company, is the “largest sports-licensed headwear company in the world.” Exclusive deals with MLB, NHL, NCAA, NFL, and NBA teams ensure that business stays lucrative for this domestic company.
Last year: In 2007, New Era helped the MLB change its baseball cap for the first time in 53 years. The new caps are 100% polyester (instead of wool), and wick sweat better than their predecessors.
This year: New Era designed a limited edition, Obama-themed cap to celebrate the inauguration in January. The hat had phrases like “Hope,” “Dream,” and “Progress” embroidered on it. “Bailout” was not yet included in the vocabulary of the time.
How to Go American: Go to a game. Don’t forget your Starter cap.
(Inage: toys53.com)
They almost invariably come from China. Sometimes they impale children. Pool toys, it turns out, have a dark side. But they’re too much fun to dismiss.
Last year: This year, somebody designed an amphibious PC workstation so that users can float in a pool while they work. Count me in.
This year: How about a Death Star beachball?
How to Go American: Most toys are made in China, but some companies, like AmeriKid, offer USA-made toys. What better way to celebrate independence than by supporting American businesses?
Happy 4th of July!
I was watching one of those cooking reality shows the other day while I was putting a frozen lasagna in the oven and opening a bag of salad. I don’t remember if it was Top Chef or Naked Chef or Chefs with Big Knives or That Hot Foreign Chef with the Really Cute Accent, but it was one of those.
If you’re not familiar with these type of shows, they assemble a crew of amateur or professional cooks who compete in these *very exciting* cooking challenges wherein they only have a limited number of ingredients - say a pork chop, four anchovies, 2 cans of mandarin oranges, and a bag of rice. The chefs have to make something that tastes good and looks good on the plate, and that is also original. On the show I was watching they had 20 minutes to do it, outside, over a campfire, with some snooty looking Top-of-the-Toppest Chef looking over their shoulders.
And what’s a reality show without an elimination? There were two tied for last. One chef had an amazing idea. She had combined ingredients in new and stunning ways that impressed the judges. Her execution, however, left them hungry. She hadn’t quite manifested her vision on the plate. Her competitor had done the opposite. He delivered a somewhat predictable, ho-hum dish. But he’d done it flawlessly.
Who won? I don’t know because I changed the channel. But I kept thinking about the issue, and I think you should too.
What’s more important in business - concept or execution?
Image Credit: nicholas.boullosa, Flickr
Burning the mortgage in Missouri Brad Main
Yesterday on the podcast we talked about how the Great Depression gave us the long-term mortgage. In the years following, thanks to major government intervention, we became a nation of homeowners. There are still people who make it all the way through a 30 years and burn the mortgage but the numbers are declining. I've been struggling to figure out whether that's good or bad.
Homeownership is a kind of forced savings. It ties people their neighborhoods and encourages them to invest in the local community. That seems good. Then again economics tells us mobility is a good thing. Which makes long-term homeownership seem bad.
Several of you pointed out that, thanks to that government intervention, we are discouraged from paying off that 30 year loan. Here's Ken Jackson, the history professor from yesterday's podcast:
Over the past half century in the United States, mortgage debt has generally been a good thing for families. And mortgage interest is usually at a lower rate that credit card debt or general purpose loans. Additionally, the interest on a mortgage has been fully tax-deductible from gross income, a situation that does not obtain in most other advanced countries. In the past decade, however, the introduction of the alternative minimum tax has made mortgage deductions less attractive for upper income earners.
What do you all think? Should Americans have easy access to long-term mortgage financing? Is that always good thing?
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If the American Clean Energy and Security Act passes through the Senate, it could be bad news for the Alberta oil sands.
In Alberta, Canada, there's thought to be more oil buried underground than in the whole of Saudi Arabia. Alberta's oil sands can be processed to yield billions of barrels of oil, and many believe that they could be key to providing North America with energy security and independence -- the sands now are now the top provider of oil to U.S.
But the oil is dirty. Really dirty. And the House version of the climate bill calls for largely increased tariffs on environmentally-unfriendly goods and commodities, which this oil easily falls into. President Obama has warned against this sort of environmental protectionism, but it looks like the Senate may be facing a decision between environmental safety and energy security in the coming weeks.
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Property Room is an online police auction site that sells “hot” or stolen goods. It turns out that replacing the classic police auction is good business. The Seattle Times has more:
PropertyRoom.com (is) a California-based Web site that receives items from the property rooms of 1,600 law-enforcement agencies in the U.S. — 124 in Washington state — and sells them online. Proceeds are split between the police departments and the Web site.
PropertyRoom.com is set up as a kind of eBay for police auctions. Items are sold in categories including jewelry, fine art, tools, bicycles, watches and “everything else.” The site was founded by former police officers, including Daryl Gates, former chief of the Los Angeles Police Department, according to its Web site.
Since many of the items were stolen but never reclaimed, PropertyRoom.com will return them to their owners provided they can prove ownership of an item shown online.
When the site started in 2001, it had contracts with 100 departments and profits of $3 million. Now, the company has contracts with nearly 2,000 departments, 25,000 new bidders each month, and last year reported a profit of $35 million, according to company spokeswoman Cher Murphy.
Proceeds go to police pension funds.
The goods aren’t all from police departments. The website claims 1,500 participating police departments and a “trusted merchant program“:
PropertyRoom.com’s Trusted Merchant program features high quality merchants that auction goods in accordance with our strict guidelines and standards. Quality and security of transactions for buyers and sellers is guaranteed via managing the payment process, carefully screening sellers and aggressively combating fraud.
The items on the site are expensive compared to eBay. Many of them are stolen, without evidence that police tried to find the original owners. And what, exactly, makes their “trusted merchants” trustworthy?
Two comments on the Seattle Times article caught my eye:
1) kil4stn
Total scam!!!! Here’s the proof:
I just saw a Squier P-bass for bid on the site they claim will be a shipping weight of 58 lbs.
OK - a Squier P-bass is about 8 lbs, 10 oz. If you buy a middle of the road hard shell case to protect / ship the bass in (in this case, a Peavey), the specifications are as follows:
Dimensions: 49.5″ W x 5.625″ H x 16.75″ D
Weight: 12.5 lbs.
Rounding up both weights, you arrive at 22 lbs total. Now we all know this cheap, seized bass, in who knows what condition, isn’t coming with ANY case, but let’s continue under this delusion for a moment.
All express shipping companies check larger packages’ dimensions, and use a formula to come up with something called “dimensional weight”, which affects how much your shipping charges will be. The customer pays the corresponding rate for whichever is greater - the “dim wt” or the actual weight.
The dim wt for this 22 lb package is 24.040 lbs. So regardless of the weight of the case (or even the existence of one), dimension wise this is a good estimate at what the rate SHOULD be, worst case scenario.
However, on this site, you will be charged shipping for 58 POUNDS!!!! That’s significantly MORE THAN DOUBLE WHAT YOU SHOULD BE CHARGED!
Shame on you, SPD, King County Sheriff’s Office, and any other law enforcement agencies involved with this scam!
2) snowdawg
Propertyroom.com is a scam site. You can see that if you just watch it for a week. Though they might have some police departments participating, it seems the bulk of their business is selling counterfeits and items that they buy and resell. But the “police department advertising” gives it credibility, visibility and traffic that it should not have.
I’d like to know what police are doing to try to find the original owners of the stolen goods.
While Congress gets ready to talk financial regulation reform, the regulators continue to push and shove behind the scenes. There are so many regulators and none of them want to lose any power in the deal.
The Supreme Court ruling yesterday handed the states a victory in this ongoing battle. It said a state attorney general can demand information from federally regulated banks. This may seem like a small victory but it is vindication for state regulators. National regulators say it's a big mistake.
Let's start with the national banks and their national regulators. They hate this idea. They have enjoyed telling states that as national banks, they do not have to abide by every little consumer protection law in every state they operate in. Expect to hear them arguing that complying with state laws will just make everything more expensive for everyone.
States will undoubtedly snap that state regulators are better at enforcing consumer protections and by the way you national guys didn't do such a great job in the last few years. And the battle will continue.
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Bernie Madoff, who was sentenced to 150 years in prison yesterday, may be the mastermind behind America's biggest Ponzi scheme, but he's certainly not the only person to run a scam for millions of dollars. Financial corruption has been around as long as people have been making money. And some of the corrupt have had some pretty quirky personalities.
Lord Conrad Moffat Black, Baron of Crossharbor
This flamboyant formerly-Canadian newspaper baron got his start by selling stolen exam papers at his upper-class private school. He eventually gained control of Hollinger International, a company that published London's Daily Telegraph, the Chicago Sun-Times, the Jerusalem Post, the National Post, and hundreds of community newspapers. At one point, he gave up his Canadian citizenship to become a British lord, and was known for excessive rants about how the rich were better and smarter than the poor. Richard Nixon is one of his lifelong heroes.
Black used Hollinger as his own personal bank account for extravagant purchases and travel--he owned houses and apartments in Palm Beach, Toronto, on Park Avenue in New York, and in Kensington in London. His company leased a corporate jet for $3 million a year, which he used for personal travel. His wife, Barbara Amiel, billed $2,463 in handbags and $2,785 in opera tickets to the company. Once investors and the SEC found out, they weren't very happy. After a press-heavy trial in 2007, he was found guilty of three counts of mail and wire fraud and one count of obstruction of justice.
Memorable Quote: "I have no doubt that mothers in America use my name to frighten their children into finishing their vegetables."
Where He Ended Up: Black was sentenced to 78 months in jail and is currently incarcerated at the Coleman Federal Correctional Complex in Florida. He's since appealed to the Supreme Court, but a decision isn't expected until 2010.
Rene Rivkin
An Australian businessman and stockbroker who was obsessed with the market, he got into the industry when he was 14 and was accidentally allocated shares in the float of a broadcasting company. Rivkin became famous for the Rivkin Report, a publication that would advise what stocks to buy and sell. At his height, he bragged that all of his employees were jealous of one another -- because they were all in love with him.
In April 2003, he was found guilty of insider trading after buying 50,000 shares in the airline Qantas after finding out about an impeding merger between Qantas and Impulse Airlines. During his time in jail, a fellow detainee was paid by The Sun-Herald to smuggle in a cellphone camera and take photos of Rivkin while he was sick. After his sentence, he was banned from stockbroking for life.
Memorable Quote: On getting a tumor: "It's not that I thought I was immortal but that I could never imagine the world without me."
Where he ended up: The stockbroking ban took a heavy toll on Rivkin, and he committed suicide at his mother's home in May of 2005.
Horatio Bottomley
This British financier founded the Financial Times and eventually became a member of parliament -- but he scammed with the best of them. In the mid-1800s, he made a name for himself by promoting Australian gold mining projects, some of which didn't actually have any gold. He later invested in the stock market, and founded FT in 1888. He was elected to parliament in 1906, but was thrown out in 1912 after being charged of conspiracy to defraud, leading to his bankruptcy.
From there, he founded a patriotic, anti-German, journal called the John Bull. He used it to create the John Bull Victory Bond Club, which was supposed to be a way for small savers to lend money to the government, getting prizes instead of interest. He made about 900,000 British Pounds (about 160 million Pounds today), and spent that on expensive living, horse racing, and women. But when the scam went bust after World War I ended and all of his bondholders wanted their loans back. Bottomley was sentenced to seven years in prison in 1921. After getting out, he tried to start a new newspaper, but it went bust -- and he went bankrupt again. He spent the early 1930s travelling the UK as a one man show, where he rambled about how great the old days were. It flopped, and he went bankrupt a third time.
Memorable Quote: "Gentlemen: I have not had your advantages. What poor education I have received has been gained in the University of Life."
Where he ended up: After his last bankruptcy, a destitute Bottomley turned to charity to survive. He died in 1933
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In the wake of Bernard Madoff's sentencing yesterday, the AP reports that federal authorities have begun an investigation into ten of Madoff's associates. Up until now, only two people have faced criminal charges -- Madoff himself, and an accountant, David G. Friehling, who is accused of aiding in the fraud. There are no details on who the ten are, but it appears the circle of blame for the massive Ponzi scheme is about to get wider.
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CNN reports on how experts are telling moms not to hold “swine flu parties”:
Health experts are warning parents against holding “swine flu parties” in the hope of infecting their children with the H1N1 virus.
Talk of swine flu parties has emerged on Internet forums. The idea is that exposing a child to the H1N1 virus while it remains relatively mild will give the child immunity if the virus returns in a more virulent form later on.
The idea is an extension of chicken pox and measles parties that were once a popular way of exposing children to those diseases so that they might acquire resistance to subsequent infections.
But health officials have been quick to condemn the idea. Speaking at a conference, Dr Richard Jarvis, chairman of the British Medical Association’s public health committee, said “I have heard of reports of people throwing swine flu parties. I don’t think it is a good idea.”
This reminds me of chicken pox parties, where parents send their children to catch to the virus. The idea is that a) the virus is relatively harmless when kids are young, so why not expose them to it early?, and b) children can avoid potentially harmful chicken pox vaccinations.
The swine flu party idea, on the other hand, doesn’t make much sense at all. How do parents know that it will become enough of a standard illness that it’s worth exposing kids to it? Plus, there’s no vaccination yet.
I feel bad for the kids.
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