Opening Bell: 07.13.09

For Goldman, A Swift And Lofty Return To Profits (NYT)
And that makes some people angry! Like this guy: "They exist, and others don't, and taxpayers made it possible," said one industry consultant, who, like many people interviewed for this article, declined to be named for fear of jeopardizing business relationships.

Berkshire Hathaway Tones Down Risky Business (WSJ)
The reinsurance business has pulled back on catastrophic property damage. Unprotected sex with prostitutes still on the table, if the situation presents itself. You can't WB to give everything up.

Bank of America Said to Balk at Paying Fee to U.S. for Backstop (Bloomberg)
"Regulators contend Bank of America owes at least part of a $4 billion fee it agreed to pay in January -- even without a completed legal document -- because the company benefited from implied U.S. backing on about $118 billion of Merrill Lynch assets, such as mortgage-backed bonds, people familiar with the matter said. The Charlotte, North Carolina-based bank says it owes the Treasury nothing." Would BAC be this brazen if Paulson were still running the show? Don't get us wrong, we like this no shit/prisoners attitude but we're not sure they'd pull it in the face of the Hammer.

UBS, US Talk On Tax Case (WSJ)
Heads up to anyone who the Swiss helped not pay taxes:names may be named

Mayor Tightens Belt, Too, Amid Losses In Market (NYT)
Bloomberg's just like the rest of us. He lost at least ten million on investments over the last year and now sacrifices have to be made. The Florida vacation house is getting rented out and he's cut back on housekeepers.

Wells Fargo Sues Itself (FBN)
"You can't sue yourself," McKillop said. "It's just so ridiculous. .. It's a waste of paper. It's a bastardization of the legal process."

Goldman Upped To 'Buy' By Meredith Whitney (MarketWatch)
The Dollar Dom thinks it's "a bull stock for a bear market."

Sponsored Topics: Merrill Lynch - Bank of America - US - Wells Fargo - Meredith Whitney
Source: Dealbreaker | 13 Jul 2009 | 1:00 pm

BA staff in court on price fixing allegations

Three former executives of British Airways (BA) and the airlines current sales and marketing director today denied allegations of fixing the price of fuel surcharges.


Source: Latest Business News from Times Online | 13 Jul 2009 | 1:00 pm

RHJ back in race for Opel stake

Belgian private equity firm RHJ International has re-emerged as a contender to buy a stake in carmaker Opel.
Source: BBC News | Business | World Edition | 13 Jul 2009 | 12:51 pm

Sotomayor faces confirmation hearing

Sonia Sotomayor looks almost certain to emerge from Senate hearings this week poised to become the first Hispanic member of the US Supreme Court
Source: Financial Times - US homepage | 13 Jul 2009 | 12:44 pm

Europe Markets: Philips, oil producers pace gains for Europe

European shares moved higher on Monday, as Philips Electronics advanced after kicking off earnings season on the Continent with a small profit and oil producers also made a bit of headway.

Source: MarketWatch.com - Top Stories | 13 Jul 2009 | 12:34 pm

Goldman Sachs & Meredith Whitney: The Good Bad Call (GS)

The Goldman Sachs Group Inc. (NYSE: GS) is seeing some buying interest based upon an influential analyst call.  Meredith Whitney Advisory has raised the rating on this investment bank and brokerage firm, a.k.a. bank holding company with no real retail banking operations, to a BUY rating from a prior Neutral rating.   Interestingly enough, Meredith Whitney [...]

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Source: 24/7 Wall Street | 13 Jul 2009 | 12:31 pm

Earnings Watch: Updates, advisories and surprises

A roundup of the latest corporate earnings reports and what companies are saying about future quarters.

Source: MarketWatch.com - Top Stories | 13 Jul 2009 | 12:31 pm

CIT says remains in discussions with regulators

(Reuters) - CIT Group Inc, a commercial U.S. lender struggling to finance its business, said late on Sunday that it remains in active discussions with regulators on measures to improve its near-term liquidity position.
Source: Reuters: Business News | 13 Jul 2009 | 12:27 pm

Nigeria rebels claim Lagos attack

Nigeria's most prominent militant group says it has carried out an attack on an oil tanker loading facility near Lagos.
Source: BBC News | Business | World Edition | 13 Jul 2009 | 12:26 pm

UK 'challenge' to sell bank stakes

The firm managing taxpayers' £60bn stakes in RBS and Lloyds says it will take time to get the money back.
Source: BBC News | Business | World Edition | 13 Jul 2009 | 12:25 pm

Before the Bell: CIT Group, Goldman Sachs, Fastenal in spotlight

U.S. stock futures traded slightly higher on Monday ahead of a big week of financial and technology sector earnings.

Source: MarketWatch.com - Top Stories | 13 Jul 2009 | 12:22 pm

EU nations, Turkey sign major pipeline deal

Four EU countries and Turkey signed an accord Monday on building a major US-backed gas pipeline to reduce European reliance on Russia amid lingering uncertainty on who will supply the gas.
Source: RSS feed - channel BNewsBusiness | 13 Jul 2009 | 12:20 pm

For the Airlines to Profit, Government Must Allow Them

John Tamny of RealClearMarkets When seasoned investors contemplate the airline industry, it’s often said that more money has been lost on investments than has ever been made. It could realistically be said that airlines are the restaurants of the travel industry. In many ways this shouldn’t surprise us, given the origins of our best-known and oldest air [...]

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Source: 24/7 Wall Street | 13 Jul 2009 | 12:17 pm

Experian hit by lending slowdown, exchange rates

Credit checking agency Experian said Monday that its revenue fell 8% in the first three months of its fiscal year, hurt by exchange rate fluctuations and the slowdown in bank lending.

Source: MarketWatch.com - Top Stories | 13 Jul 2009 | 12:10 pm

LCD makers charged with price fixing

European antitrust regulators have charged companies including Philips Electronics and LG Display with running a LCD price-fixing cartel
Source: Financial Times - US homepage | 13 Jul 2009 | 12:08 pm

Oil prices languish close to $60

Oil prices languished on Monday close to 60 dollars a barrel, about 60 percent below record heights reached a year ago, as the global recession drags down demand for energy, analysts said.
Source: RSS feed - channel BNewsBusiness | 13 Jul 2009 | 12:08 pm

Fla. judge to consider delay in UBS secrecy case

A federal judge in Florida is considering whether to delay hearings in a case against Swiss banking giant UBS AG to allow more time for settlement talks. The Internal Revenue Service has
Source: RSS feed - channel BNewsBusiness | 13 Jul 2009 | 12:05 pm

Movers & Shakers: Goldman Sachs, Philips, Cardionet in view

A roundup of stocks making notable moves in pre-market trade on Monday.

Source: MarketWatch.com - Top Stories | 13 Jul 2009 | 12:05 pm

Venture Capital Fundraising Activity Contracts in the Second Quarter of 2009

Source: RSS feed - channel BNewsBusiness | 13 Jul 2009 | 12:00 pm

Venture Capital Fundraising Activity Contracts in the Second Quarter of 2009

NEW YORK, July 13 /PRNewswire-FirstCall/ -- Just 25 venture capital funds raised $1.7 billion in the second quarter of 2009, according to Thomson Reuters and the National Venture
Source: RSS feed - channel BNewsBusiness | 13 Jul 2009 | 12:00 pm

Milliman Introduces Power to Know(sm)

SEATTLE, July 13 /PRNewswire/ -- Milliman's Employee Benefits practice, a premier provider of total retirement outsourcing services, has unveiled a comprehensive program to help...
Source: RSS feed - channel BNewsBusiness | 13 Jul 2009 | 12:00 pm

Delaware Governor Jack Markell to Attend Farmers Insurance Signing Ceremony Announcing Acquisition of AIG's Personal Auto Insurance Group, Which Includes 21st Century Insurance Company, Officed in Wilmington

Press Conference at noon, July 14 to Follow Formal Signing WILMINGTON, Del., July 13 /PRNewswire/ -- WHO: Delaware Governor Jack Markell;
Source: RSS feed - channel BNewsBusiness | 13 Jul 2009 | 12:00 pm

Author V.K. Fields Sends Shockwaves Through Christian Community With New Release 'Radical SEX for Christian Singles'

(Book Signing Scheduled for Sat., July 18 at Sign of the Fish Bookstore in Raleigh, NC) RALEIGH, N.C., July 13 /PRNewswire-USNewswire/ -- Author V.K. Fields' latest...
Source: RSS feed - channel BNewsBusiness | 13 Jul 2009 | 12:00 pm

Bridgepoint Education's Ashford University Selected to Offer SOC Coast Guard Degrees

SAN DIEGO, July 13 /PRNewswire-FirstCall/ -- Bridgepoint Education, Inc. (NYSE: BPI), a provider of postsecondary education services focused on providing higher access to higher...
Source: RSS feed - channel BNewsBusiness | 13 Jul 2009 | 12:00 pm

MEMC Schedules Second Quarter Conference Call

ST. PETERS, Mo., July 13 /PRNewswire-FirstCall/ -- MEMC Electronic Materials, Inc. (NYSE: WFR) invites investors to listen to a broadcast of the Company's conference call to
Source: RSS feed - channel BNewsBusiness | 13 Jul 2009 | 12:00 pm

Stocks futures drift ahead of busy earnings week (AP)

AP - Stock futures traded in a narrow range Monday morning as investors brace for a crush of earnings reports, including key readings from the banking sector, this week.

Source: Yahoo! News: Stock Markets News | 13 Jul 2009 | 11:57 am

Uh oh. Here come the 'profit' reports

The spring stock market rally has lost momentum right as investors are primed to face another big hurdle: the start of the second-quarter reporting period.
Source: Business and financial news - CNNMoney.com | 13 Jul 2009 | 11:55 am

Vauxhall jobs in the balance as new buyer emerges

Ripplewood, the private equity group, today admitted that it is in advanced talks to buy Vauxhall in a move that could leave Lord Mandelson with three bidders to play off against each other to secure the future of the carmaker.


Source: Latest Business News from Times Online | 13 Jul 2009 | 11:52 am

Top Analyst Upgrades and Downgrades (BBY, CPLA, GS, HGSI, MAR, SNDK, SGMS)

These are the top pre-market upgrades and downgrades seen early this Monday morning ahead of the earnings season rush: Best Buy (BBY) Raised to Outperform at Oppenheimer. Capella Education (CPLA) Cut to Neutral at Creedit Suisse. Goldman Sachs (GS) Raised to Buy by Meredith Whitney. Human Genome Science (HGSI) Cut to Neutral at UBS. Marriott (MAR) Raised to Outperform at [...]

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Source: 24/7 Wall Street | 13 Jul 2009 | 11:50 am

Indications: U.S. stock futures edge lower before key reports

U.S. stock futures edged lower on Monday with nerves tested ahead of a bevy of quarterly reports from the financial and technology sector as the lender CIT Group fights for survival.

Source: MarketWatch.com - Top Stories | 13 Jul 2009 | 11:50 am

Teenager causes City sensation with research on media: report in full

The following is a copy of a report written by Matthew Robson a 15year old schoolboy for Morgan Stanley on how he and his friends consumer media. Source: Morgan Stanley
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 13 Jul 2009 | 11:47 am

Earnings uncertainty hits European bourses

Uncertainty over the corporate earnings season continued to weigh on sentiment as European stocks hit 11-week lows with resource stocks tracking commodity prices lower.The FTSE Eurofirst 300 slipped back...
Source: RSS feed - channel BNPaperBusiness | 13 Jul 2009 | 11:37 am

Companies sign deal on Nabucco gas pipeline

Turkey and several European countries announce the signing of a deal on the Nabucco pipeline, a project to supply natural gas without Russia having the ability to control the flow.

Source: MarketWatch.com - Top Stories | 13 Jul 2009 | 11:32 am

London shares edge up as market struggles for direction

London shares edged into positive territory at midday as investors struggled to find direction.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 13 Jul 2009 | 11:31 am

Stock futures flat as caution and CIT offset Goldman (Reuters)

Reuters - Stock futures were little changed on Monday as caution over the latest earnings season weighed and CIT Group Inc grappled with shoring up its finances, offsetting a broker upgrade of Goldman Sachs .

Source: Yahoo! News: Stock Markets News | 13 Jul 2009 | 11:30 am

Stock futures flat as caution and CIT offset Goldman

NEW YORK (Reuters) - Stock futures were little changed on Monday as caution over the latest earnings season weighed and CIT Group Inc grappled with shoring up its finances, offsetting a broker upgrade of Goldman Sachs
Source: Reuters: Business News | 13 Jul 2009 | 11:30 am

Stock futures flat as caution and CIT offset Goldman (Reuters)

Reuters - Stock futures were little changed on Monday as caution over the latest earnings season weighed and CIT Group Inc grappled with shoring up its finances, offsetting a broker upgrade of Goldman Sachs .

Source: Yahoo! News: Business | 13 Jul 2009 | 11:30 am

Philips faces price-fixing probe

Dutch electronics firm Philips says it will "vigorously oppose" a European Commission probe into LCD flat screen price-fixing.
Source: BBC News | Business | World Edition | 13 Jul 2009 | 11:30 am

Housing market activity dips

Activity in the housing market fell back slightly during June following a steep increase in May research has showed.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 13 Jul 2009 | 11:29 am

Japan's Suntory considering merger with Kirin

TOKYO (Reuters) - Japanese brewer Suntory Holdings Ltd said on Monday it was considering a merger with larger rival Kirin Holdings Co in a deal that would create one of the world's largest beverage and food firms.
Source: Reuters: Business News | 13 Jul 2009 | 11:26 am

Philips Electronics defies loss expectations

Philips Electronics, Europe’s largest consumer electronics company, defies analysts’ expectations, reports a small second-quarter profit.

Source: MarketWatch.com - Top Stories | 13 Jul 2009 | 11:26 am

U.S. trial delay call brings UBS tax deal nearer

ZURICH (Reuters) - Hopes rose that Swiss bank UBS can finally move on from a damaging U.S. tax row, after a request for a delay to a high-profile trial scheduled for later on Monday brought a settlement nearer.
Source: Reuters: Business News | 13 Jul 2009 | 11:24 am

U.S. trial delay call brings UBS tax deal nearer (Reuters)

Reuters - Hopes rose that Swiss bank UBS can finally move on from a damaging U.S. tax row, after a request for a delay to a high-profile trial scheduled for later on Monday brought a settlement nearer.

Source: Yahoo! News: Business | 13 Jul 2009 | 11:24 am

Stocks set for seesaw open

Stocks were headed for a mixed open Monday, at the start of a week that includes quarterly results from several major companies and some key economic data.
Source: Business and financial news - CNNMoney.com | 13 Jul 2009 | 11:20 am

Philips sees early signs of recovery, boosting shares

AMSTERDAM (Reuters) - Dutch conglomerate Philips Electronics signaled brighter business prospects for the second half of 2009, helped by cost cuts, as it surprised the market with a return to profit in the second quarter.
Source: Reuters: Business News | 13 Jul 2009 | 11:20 am

Mortgage fraud on the increase as borrowers try to circumvent tighter rules

Lenders are reporting a rise in mortgage application fraud as consumers try to get around their tight lending criteria a trade body has said.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 13 Jul 2009 | 11:19 am

China's central bank signals end to credit boom

The People's Bank of China seeks to cool an unprecedented boom in banklending.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 13 Jul 2009 | 11:18 am

Currencies: Dollar mainly gains; safe-haven trade boosts yen

The dollar gains on most major counterparts with the exception of the yen, as uncertainty over the outlook for equities serves to increase the safe-haven appeal of lower-yielding currencies.

Source: MarketWatch.com - Top Stories | 13 Jul 2009 | 11:18 am

Friends bid helps lift FTSE

London equity markets overcame early weakness on Monday after a bid approach on Friends Provident helped lift the insurance sector, leaving the main index slightly higher. Resolution, the investment group...
Source: RSS feed - channel BNPaperBusiness | 13 Jul 2009 | 11:16 am

Geithner to reassure Gulf allies on dollar assets

RIYADH/LONDON (Reuters) - Treasury Secretary Timothy Geithner will seek to reassure Gulf Arab states this week that U.S. dollar assets they hold in large quantities remain a strong investment.
Source: Reuters: Business News | 13 Jul 2009 | 11:14 am

Oil steadies as commodities consolidate

Oil prices steadied on Monday after a sharp fall in the previous week while base metals were mixed and gold consolidated above the $900 an ounce level as commodity markets made a cautious start to trading,...
Source: RSS feed - channel BNPaperBusiness | 13 Jul 2009 | 11:07 am

Magners maker corrects revenues

Shares in Magners maker C&C slide 10% after the firm admits it issued incorrect revenue figures but forecasts remain the same.
Source: BBC News | Business | World Edition | 13 Jul 2009 | 11:01 am

London Markets: Friends Provident shares gain in lackluster London

Friends Provident shares stand out in lackluster London trading, rising sharply after rebuffing an approach from buyout group Resolution. Other U.K. life insurers also make gains, but financials and miners act as a drag on the FTSE 100 index.

Source: MarketWatch.com - Top Stories | 13 Jul 2009 | 10:58 am

BusinessWeek put up for sale

BusinessWeek magazine has been put up for sale Bloomberg reported
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 13 Jul 2009 | 10:57 am

Corporate burnout

Executives join celebrities in rehab as recession bites
Source: BBC News | Business | World Edition | 13 Jul 2009 | 10:56 am

Beat it: The race to publish the first posthumous Michael Jackson biography

Dash to publish first Jackson tribute biographies
Source: BBC News | Business | World Edition | 13 Jul 2009 | 10:54 am

Philips sees early signs of recovery, boosting shares (Reuters)

Reuters - Dutch conglomerate Philips Electronics signaled brighter business prospects for the second half of 2009, helped by cost cuts, as it surprised the market with a return to profit in the second quarter.
Source: Yahoo! News: Business | 13 Jul 2009 | 10:52 am

Frustrated Sign

Source: Business Pundit | 13 Jul 2009 | 10:50 am

Risk aversion boosts yen and dollar

The pound fell against a basket of rival currencies on Monday, dropping to a five week low against the euro, as investor risk tolerance waned in a week punctuated with several closely-watched UK data releases...
Source: RSS feed - channel BNPaperBusiness | 13 Jul 2009 | 10:47 am

Oil falls below $60 on economic outlook, equities (Reuters)

Reuters - Oil prices slipped below $60 a barrel on Monday, heading toward a seven-week low on concerns over the state of the global economy as stock markets slid.

Source: Yahoo! News: Stock Markets News | 13 Jul 2009 | 10:41 am

Europe gas pipeline deal agreed

Five countries sign an agreement to build the Nabucco gas pipeline, linking the Caspian Sea to Europe.
Source: BBC News | Business | World Edition | 13 Jul 2009 | 10:37 am

The $79 iPhone - 87% off original price

Source: Business and financial news - CNNMoney.com | 13 Jul 2009 | 10:35 am

European stocks flat ahead of key US earnings (AP)

AP - European stock markets traded in a tight range Monday despite big losses in Asia as investors held back from staking out positions ahead of a raft of U.S. earnings this week.

Source: Yahoo! News: Stock Markets News | 13 Jul 2009 | 10:23 am

European equities firm despite Tokyo slump (AFP)

AFP - European stocks edged up on Monday, despite an earlier slump in Tokyo and a mixed pre-weekend performance on Wall Street, as investors eyed US bank results and fretted over the global economic outlook.

Source: Yahoo! News: Stock Markets News | 13 Jul 2009 | 10:18 am

MySpace To Become Entertainment Site

If at first you don’t succeed, try, try again. MySpace, which has lost the crown as the world’s largest social network to Facebook and fired about a third of its staff will reposition itself as an entertainment destination. It is hard to see why that would work, but MySpace management may be running out of other [...]

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Source: 24/7 Wall Street | 13 Jul 2009 | 10:18 am

10 dumbest iPhone apps

Apple's iPhone app store has more than 55,000 programs for sale. Some are useful - many are plain stupid. We've picked out some of the dumbest.
Source: Business and financial news - CNNMoney.com | 13 Jul 2009 | 10:17 am

Australian PM Kevin Rudd under pressure to intervene over Rio Tinto detentions

Kevin Rudd faces loud calls to use his "special relationship" with China to intervene over the detention of four Rio Tinto staff.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 13 Jul 2009 | 10:17 am

LSE in talks with EMCF over stake

The London Stock Exchange is in talks with European Multilateral Clearing Facility (EMCF), a clearing house jointly owned by Nasdaq OMX and Fortis of the Netherlands, about the possibility of taking a...
Source: RSS feed - channel BNPaperBusiness | 13 Jul 2009 | 10:09 am

Posco operating profit hits 9-year low

Posco on Monday reported its lowest operating profit in at least nine years in the second quarter as South Korea's largest steelmaker continues to feel the impact of lower demand and falling prices amid...
Source: RSS feed - channel BNPaperBusiness | 13 Jul 2009 | 10:06 am

Its Fortunes In Tatters, BusinessWeek Goes Up For Sale

It was only a matter of time before major American magazines, flagships of the national media business, began to close or be put on the auction block. BusinessWeek is for sale according to several industry sources. It has been the flagship of McGraw-Hill (MHP) for decades and is the only major weekly business magazine in the country. BusinessWeek’s [...]

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Source: 24/7 Wall Street | 13 Jul 2009 | 10:06 am

Electric cars will dominate roads by 2030

Source: Business and financial news - CNNMoney.com | 13 Jul 2009 | 10:01 am

Microsoft (MSFT) Plans To Stop Google (GOOG) In Its Tracks

The world of Google (GOOG) is a world where PC software applications run on the Internet with the heavy work being done by Google’s servers. The latest Google software, Chrome, is a simple operating system that takes advantage of that philosophy. The world according to Microsoft is one in which the software runs on the PC [...]

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Source: 24/7 Wall Street | 13 Jul 2009 | 9:54 am

Australia pushes China on Rio Tinto detentions

CANBERRA/BEIJING (Reuters) - Australia summoned China's ambassador on Monday for a second time to press for details of the detention of Rio Tinto's top iron ore salesman in China and three other staff accused of spying.
Source: Reuters: Business News | 13 Jul 2009 | 9:45 am

Australia pushes China on Rio Tinto detentions (Reuters)

Reuters - Australia summoned China's ambassador on Monday for a second time to press for details of the detention of Rio Tinto's top iron ore salesman in China and three other staff accused of spying.
Source: Yahoo! News: Business | 13 Jul 2009 | 9:45 am

Centrica raises stake in Venture Production

The owner of British Gas raised its stake in Venture Production to 29.9pc on Monday after the gas producer rejected a 845pashare hostile offer.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 13 Jul 2009 | 9:40 am

Businesses May Rejects Microsoft (MSFT) Windows 7

A number of businesses and government enterprises elected not to upgrade to Vista, the current Microsoft (MSFT) computer operating system. It was considered a flawed product and the cost of licenses was too high, especially given the perception that the earlier version of Windows, XP, was superior. Microsoft may be facing the same lack of support [...]

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Source: 24/7 Wall Street | 13 Jul 2009 | 9:36 am

Japan's Suntory considering merger with Kirin (Reuters)

Reuters - Japanese brewer Suntory Holdings Ltd said on Monday it was considering a merger with larger rival Kirin Holdings Co (2503.T) in a deal that would create one of the world's largest beverage and food firms.

Source: Yahoo! News: Stock Markets News | 13 Jul 2009 | 9:31 am

MPs warn of risk to local papers

Scottish councils should stop damaging their local newspapers by the withdrawal of advertising, according to a committee of MPs.
Source: BBC News | Business | World Edition | 13 Jul 2009 | 9:29 am

Stephanomics

Is the PM moving in Darling's direction on public spending?
Source: BBC News | Business | World Edition | 13 Jul 2009 | 9:27 am

Share tips: buy Kingfisher and GKN

More share tips compiled by Hargreaves Lansdown. Also covered: Asos.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 13 Jul 2009 | 9:23 am

The Case For Unavoidable Increases In The Stimulus Package

The San Francisco Chronicle recently wrote that only $9.4 billion of the $50 billion earmarked for the state has made it to the treasury. California has to wait for the rest during a period when its $24 billion deficit is scuttling its economy. The trouble may have started with California’s profligate spending, but the sharp [...]

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Source: 24/7 Wall Street | 13 Jul 2009 | 9:21 am

Government loses £10.9bn in RBS and Lloyds

UK Financial Instruments (UKFI), the body that manages the Government’s shares in some of Britain’s biggest banks, today admitted that it is sitting on paper losses of £10.9 billion.


Source: Latest Business News from Times Online | 13 Jul 2009 | 9:15 am

A Tax On The “Rich” To Remake American Healthcare

Having money is not what it used to be. According to several media reports, the billionaire mayor of New York City, Michael Bloomberg, lost millions of dollars in the market downturn. He has apparently had to lay off some of his private staff and rent out his vacation home in Wellington, Florida. Now that the well-to-do [...]

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Source: 24/7 Wall Street | 13 Jul 2009 | 9:10 am

China Resorts To Old School Tactics After Rio Tinto Rejection

It is possible that several employees from global mining company Rio Tinto (RTP) were spying on the Chinese to gain an advantage through access to secret iron ore price information which could be used in negotiations with mainland steel mills. It is also possible that the Chinese are trying to send a message by holding [...]

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Source: 24/7 Wall Street | 13 Jul 2009 | 9:04 am

Belgium's RHJ in advanced talks to buy Opel

BRUSSELS (Reuters) - Belgian holding company RHJ International said on Monday it was in advanced talks to buy a majority stake in General Motors Corp's European unit Opel.
Source: Reuters: Business News | 13 Jul 2009 | 8:58 am

UK Government has lost £10.9bn on stakes in RBS and Lloyds

There will be no quick exit from taxpayer investment in Royal Bank of Scotland and Lloyds UK Financial Investments warned today.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 13 Jul 2009 | 8:52 am

Earnings, economy worries shake investors (Reuters)

Reuters - World stocks fell on Monday, with particularly heavy losses in emerging markets, as investors fretted about a coming wave of corporate earnings and confidence in a rapid global economic recovery faded.

Source: Yahoo! News: Stock Markets News | 13 Jul 2009 | 8:49 am

Businesses cool to Windows 7 upgrade - survey

Six in 10 companies in a survey plan to skip the purchase of Microsoft Corp's Windows 7 computer operating system, many of them to pinch pennies and others over concern about compatibility with their existing applications.
Source: Business and financial news - CNNMoney.com | 13 Jul 2009 | 8:46 am

UKFI to outline plans for bank investments

UK Financial Instruments (UKFI), the body that manages the Government’s shares in some of Britain’s biggest banks, will today outline its plans for the future of its investments in the state-owned lenders.


Source: Latest Business News from Times Online | 13 Jul 2009 | 8:44 am

Japan’s Aso to seek August election

Taro Aso, Japan's beleaguered prime minister, has agreed with leading members of the long-ruling Liberal Democratic party to call a general election for August 30
Source: Financial Times - US homepage | 13 Jul 2009 | 8:40 am

Resolution set to sweeten its offer for Friends

Friends Provident, Britain’s fourth-biggest life insurer, today rejected an offer from Resolution, stating that the “open-minded” board does not consider the approach “in the best interests of shareholders”.


Source: Latest Business News from Times Online | 13 Jul 2009 | 8:03 am

Centrica bid for Venture snubbed

Two leading shareholders in Venture Production, the North Sea oil and gas company, have rejected Friday's hostile 845p per share bid from Centrica saying it undervalued the business.Larry Kinch, a Venture...
Source: RSS feed - channel BNPaperBusiness | 13 Jul 2009 | 7:54 am

Venture investors back Centrica bid rejection

Shares in Venture Production, the North Sea oil and gas group, rose this morning as shareholders threw their weight behind the company's decision to reject Centrica's £1.3 billion offer for the business, branding the 845p a share offer as "opportunistic".


Source: Latest Business News from Times Online | 13 Jul 2009 | 7:49 am

State Construction approved for China IPO

China State Construction Engineering Corp has been given the final go-ahead to raise up to Rmb42.6bn ($6.2bn) on the Shanghai market in what is likely to be the world's largest listing this year. China's...
Source: RSS feed - channel BNPaperBusiness | 13 Jul 2009 | 7:40 am

Aussie stocks: Market closes weaker

SYDNEY- The Australian share market closed moderately weaker on falls in resource and financial stocks. At the 1615 AEST close, the benchmark S&P/ASX200 index was down 56.6 points, or 1.49 per cent, at 3737.5 points, while the...
Source: New Zealand Herald - Business | 13 Jul 2009 | 7:06 am

BofA balking at paying fees for guarantees: report

(Reuters) - Bank of America Corp is trying to avoid paying billions of dollars in fees to U.S. taxpayers for guarantees against losses at Merrill Lynch, saying the rescue agreement was never signed and the funding never used, Bloomberg reported citing people familiar with the matter.
Source: Reuters: Business News | 13 Jul 2009 | 7:00 am

For many, visit to L.A. is a 'reality' trip

Stores and restaurants featured in unscripted TV shows make tourists' must-see lists. Move over, Grauman's Chinese...
Source: RSS feed - channel BNPaperBusiness | 13 Jul 2009 | 7:00 am

U.S. and Swiss governments ask for delay in UBS banking secrecy hearings

They indicate they are seeking a settlement in the high-stakes case, which involves an IRS effort to identify thousands of suspected U.S. tax evaders.

The U.S. and Swiss governments and banking giant UBS indicated Sunday that they were seeking a settlement and asked a federal judge to delay high-stakes hearings on the Internal Revenue Service's effort to identify thousands of suspected U.S. tax evaders.

Source: L.A. Times - Business | 13 Jul 2009 | 7:00 am

'Bruno' starts off strong, then stumbles

The Sacha Baron Cohen comedy sells $14.4 million worth of tickets on its opening day, then plunges 39% on Saturday to $8.8 million. It earns a studio-estimated $30.4 million for the weekend.

Friday brought a dose of both good and worrisome news for Universal Pictures, the studio behind "Bruno."

Source: L.A. Times - Business | 13 Jul 2009 | 7:00 am

Hits at the box office are creating retail blockbusters

Sales of toys tied to big Hollywood movies such as this summer's 'Transformers' sequel could reach an all-time high in 2009

The summer's noisy, raucous, robot-battling blockbuster, "Transformers: Revenge of the Fallen," is creating a frenzy in the toy aisles as well as at the box office.

Source: L.A. Times - Business | 13 Jul 2009 | 7:00 am

It's time to close a big tax loophole for businesses

California's property tax burden has gradually shifted to homeowners because commercial and industrial property doesn't change hands as often as homes and the sales can be easily disguised.

Of all the ways in which California residents have slit their fiscal throats over the last 30 years, surely the most inexplicable is the bestowal of a gaping tax loophole on commercial and industrial property owners.

Source: L.A. Times - Business | 13 Jul 2009 | 7:00 am

Hits at the box office are creating retail blockbusters

Sales of toys tied to big Hollywood movies such as this summer's 'Transformers' sequel could reach an all-time high in 2009 ...
Source: RSS feed - channel BNPaperBusiness | 13 Jul 2009 | 7:00 am

For many, visit to L.A. is a 'reality' trip

Stores and restaurants featured in unscripted TV shows make tourists' must-see lists.

Move over, Grauman's Chinese Theatre. The hot new Southern California tourist attractions are the restaurants, boutiques and tattoo parlors where some of reality television's most popular shows are filmed.

Source: L.A. Times - Business | 13 Jul 2009 | 7:00 am

Author gets worked up over other people's jobs

Many parents over the last 20 or 30 years will have come across the children's books of Richard Scarry at some stage, with their detailed illustrations portraying the world of street-cleaners, firefighters and road repairers going about their everyday work. Perhaps his best-known book is "What Do People Do All Day?"

Source: L.A. Times - Business | 13 Jul 2009 | 7:00 am

Investor anger over portfolio advice shows in case filings

Formal complaints to the Financial Industry Regulatory Authority soared 86%, to 1,715, in the first three months of this year.

A lot of investors are blistering mad, not only about the sorry state of their portfolios but also about the investment advice they got on the way down.

Source: L.A. Times - Business | 13 Jul 2009 | 7:00 am

Lithium-ion battery maker Quallion seeks a boost from stimulus funds

The Sylmar company is among more than 120 contenders hoping to win one of seven or eight federal grants aimed at hybrid car development. It says it would use the money to build a manufacturing plant.

Executives at Quallion, a lithium-ion battery maker, believe they can provide an energizing jolt to the Southern California economy if they're able to secure a slice of the $2 billion in stimulus funds aimed at developing batteries for hybrid cars.

Source: L.A. Times - Business | 13 Jul 2009 | 7:00 am

Earnings prospects for 2009's second half will be scrutinized

Investors already expect second-quarter results to be dreary, so what they'll be paying attention to is whether executives forecast their companies' bottom line improving and the recession lifting.

With corporate earnings season set to hit full stride this week, the stock market will be paying far more attention to what companies say about the quarters ahead than to the one that just ended.

Source: L.A. Times - Business | 13 Jul 2009 | 7:00 am

Top-selling licensed toys for boys, girls

Toy story TOP 5 GIRLS LICENSES* * Disney Princess

Source: L.A. Times - Business | 13 Jul 2009 | 7:00 am

NZ stocks: Market lacklustre

The New Zealand sharemarket got off to a quiet start to a week that is expected to be lacklustre. The turnover was a $79 million worth of shares, of which $22.3m was in Fletcher Building. The benchmark NZSX-50 index closed down...
Source: New Zealand Herald - Business | 13 Jul 2009 | 6:24 am

China president endorsed Rio Tinto probe

The Chinese President, Hu Jintao, personally endorsed the investigation into Rio Tinto that led to the arrest of the mining giant's Australian iron ore executive, according to Australian media reports


Source: Latest Business News from Times Online | 13 Jul 2009 | 5:47 am

Currency: Dollar under pressure

The New Zealand dollar was under pressure today due to ongoing uncertainty about the direction of the world economy. The NZ dollar was at US62.36c at 5pm, down from US62.83c at 8am and US62.96c at 5pm Friday. New Zealand Retail...
Source: New Zealand Herald - Business | 13 Jul 2009 | 5:44 am

CIT says remains in discussions with regulators (Reuters)

Reuters - CIT Group Inc , a commercial U.S. lender struggling to finance its business, said late on Sunday that it remains in active discussions with regulators on measures to improve its near-term liquidity position.

Source: Yahoo! News: Business | 13 Jul 2009 | 5:44 am

ING investors accept offer - 95pc say yes

Investors in frozen ING New Zealand funds have overwhelmingly taken up a settlement offer and calls for the Government to intervene have gone unheeded. Opposition politicians called on the company to lift a waiver against legal...
Source: New Zealand Herald - Business | 13 Jul 2009 | 4:00 am

5 Ways to Make Good Choices About a Funeral

Last month I looked at how important it is to consider what kind of care we want to receive near the end of our lives. The next stage, after you or a loved one dies, is often even more fraught with anxiety and stress, making it even harder for survivors to act as smart consumers. Which means there’s no time like the present to learn how to hold a funeral.

Death will always be a difficult business to navigate. Grief-stricken mourners are typically overcome with confusion, regret and guilt, making them vulnerable to predators. Of course, funeral home owners work amid delicate family, financial and legal situations all the time, which is often stressful and never easy. My wife’s Uncle Eddie is one of the good guys, a scrupulous businessman who shows up to summer barbecues in a black suit just in case he gets a call from work—and there are countless others like him.

But government oversight of death care is often haphazard and weak. Some states don’t regulate cemeteries at all; others don’t license or inspect crematoriums. Almost all states regulate funeral homes, but some of the agencies that oversee mortuaries are dominated by insiders. For example, four of the seven members of Arizona’s state board regulating funeral homes are funeral home directors, raising the question of whether its leadership could be sympathetic to mortuary owners. “We have funeral directors who are just as conscious of consumer rights as consumers are themselves,” says Rodolfo “Rudy” Thomas, executive director of the Arizona State Board of Funeral Directors and Embalmers. “But you can do everything correctly and still get a complaint.” The overall result: Many states lurch from neglect to supervision only once a horrible abuse goes public. In Connecticut, for example, when five decomposed bodies turned up in a New Haven mortuary garage in 2001, the state Department of Public Health admitted publicly it had no funeral home investigators and hadn’t conducted the required inspections for nearly a dozen years. Afterward, the state quickly relaunched its oversight program. For its part, the Federal Trade Commission’s Funeral Rule, adopted in 1984, does little more than require funeral homes to give itemized price lists to customers who ask for them; it has not curtailed opaque fees or huge markups.

Moreover, the rise of a funeral-home-and-cemetery complex has made things tougher for consumers. In the 1990s, anticipating the aging of the boomer generation, death-care companies went on spending sprees. They bought funeral homes, driving many independents out of business and compelling others to replicate their sales and marketing practices, which critics deride as “McDeath.” One example: “third-unit target merchandising”—hiking prices for customers who (as people tend to) avoid the two cheapest caskets in a showroom. They bought cemeteries. Several made business deals with religious leaders. Under a controversial agreement with the Catholic Archdiocese of Los Angeles, for instance, Stewart Enterprises was allowed to build and operate mortuaries on the grounds of church cemeteries.

Consolidation drove up funeral prices far faster than inflation. In one example, a woman in Swanton, Vt., reported to Lisa Carlson, author of Caring for the Dead: Your Final Act of Love, that it cost $2,900 to bury her mother in 1993 and $7,100 for exactly the same funeral for her father in 1995. And critics say the corporate cost-cutting has left the death-care business more prone to scandal than ever. Most recently, in April, four grandchildren of deceased Army Col. Andrew DeGraff filed lawsuits totaling $60 million against industry leader Service Corporation International (SCI). They allege that National Funeral Home, an SCI affiliate in Falls Church, Va., left DeGraff’s body to rot in an unrefrigerated space last year, echoing public claims by employees that National Funeral Home improperly stashed hundreds of corpses. “We have begun an investigation, and we will make any changes we need to,” says SCI spokesperson Lisa Marshall. “More broadly, we would argue our size is actually of great benefit to our customers because we provide services like grief counseling and help with travel arrangements.”

Fortunately, there are ways to make good choices even in a time of maximum grief. First, preplan, but don’t prepay. Tell your loved ones exactly how and where you would like to be memorialized and buried or cremated. But decline any offers to pay in advance for a casket or funeral services. In many states there is no requirement for funeral homes to deposit all your money in safe investments or to refund it if you switch venues. And there’s often no guarantee that your investments will pay in full for the casket you choose.

Second, with mortuaries as with anything else in life, shop around. Prices for funerals as well as caskets can vary by thousands of dollars within the same metropolitan area, so don’t go to a particular funeral home just because it’s familiar or nearby. To find an independent funeral home, consult the Funeral Consumers Alliance (800-765-0107; www.funerals.org) or Selected Independent Funeral Homes (800-323-4219; www.selectedfuneralhomes.org). “Funeral providers should work with your family to do whatever you want, and if you’ve got one who’s not comfortable with that, you should move on,” says Selected CEO Rob Paterkiewicz. “But you have to ask.”

Third, know your rights. The FTC’s Funeral Rule does guarantee some basic consumer protections, though almost nobody understands what they are. For example, only 5.2 percent of people in a 2007 Journal of Consumer Affairs survey knew that it’s illegal for a funeral home to refuse to handle a casket bought from an outside vendor. The FTC offers a solid rundown on its Web site.

Fourth, avoid sales pitches for “protective” seals on caskets. Typically, these consist of an inch-thick rubber seal around the opening of a casket and can cost hundreds of dollars. But sealing a body in an airless container leads anaerobic bacteria to multiply rapidly, causing a corpse not only to putrefy but also bloat with gas.

Finally, consider holding a wake as well as a funeral service at your place of worship. Doing so shifts the focus of the memorial from how a body is prepared to more eternal thoughts, reducing the pressure to spend heavily on funeral services.

I can’t tell you what will happen to you when you die. But I can assure you that planning with rationality and confidence, rather than anxiety or guilt, is the best way to pass saved money and good habits to your loved ones.

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

Source: SmartMoney.com | 13 Jul 2009 | 4:00 am

Futures Flat Ahead of Earnings (Market Update)

News at a Glance

• Futures Flat: Traders reserve judgment before earnings.
• Europe Down: Banks lead declines after recovery concerns.
• Asia Slumps: Confidence data rattles traders.
• Oil Uptick: Crude rise slightly on earnings hopes.

The Lowdown

Earnings season is about to shift into full swing, and traders are holding their breaths.

Futures pointed toward a flat open Monday morning as investors looked ahead to a raft of second-quarter results in the coming week. By 7 a.m. Dow, Nasdaq and S&P 500 futures were trading right aorund fair value.

Several Dow components are scheduled to release earnings reports this week, including Bank of America (BAC), Johnson & Johnson (JNJ), General Electric (GE), Intel (INTC) and IBM (IBM). Last week, Alcoa (AA) kicked off the season with a surprise.

This is also a busy week for economic data. The government's June retail sales report is due out Tuesday. The June readings of the Consumer and Producer Price Indexes, measures of inflation, are scheduled to be released Tuesday and Wedensday, respectively. The Federal Reserve will release the minutes from its last meeting on interest rates on Wednesday. And the June readings on the annual rates of building permits and housing starts are set to be released on Friday.

European indexes fell on U.S. economic data, and banks lead the decline. Barclays (BCS) and BBVA (BBV) were among the stocks dragging markets down. Dutch electronics maker Philips (PHG) advanced after beating second-quarter expectations.

Asian stocks fell Monday on concerns that the global economic recovery is lagging. Among the losers was electronics maker Samsung. Shares in Australia's Rio Tinto (RTP) and BHP Billiton (BHP) also fell, as the iron ore firms continued their protracted price talks and Australia stepped up efforts to negotiate the release of four Rio Tinto salesmen accused of spying in China. Among the bright spots was Japanese brewer Kirin, whose share rose on reports of a merger with privately-held Suntory Holdings.

Oil rose slightly as traders hoped for signs of recovery later in the week. By 7:40 a.m., crude was up 5 cents to $59.94.

Corporate News

• CIT (CIT) officials spent the weekend strategizing over how to reassure customers and investors that the bank can survive a liquidity crunch. Reports over the weekend that the company had hired lawyers to represent it in a possible bankruptcy filing brought fears to the forefront. The bank is in talks with regulators to find ways to stave off its near-term cash shortage, but it remains unclear whether the government will provide the firm with emergency financing.
• Philips (PHG) said it earned $62 million (44 million euros) in the second quarter, down 94% from the year-ago period. The profit surprised analysts who had been expecting the Dutch electronics maker to lose approximately $176 million (125 million euros). REPORT
• UBS (UBS) could be required to reveal some, but not all, of the 52,000 names the U.S. government has requested as part of an international tax-evasion case, The Wall Street Journal reported Monday, citing anonymous sources. The banks is in talks with the U.S and Swiss governments to settle the case, which could lead to criminal prosecutions of its U.S. clients.

The Economy

• The Treasury budget statement for June is scheduled to be released by the Treasury Department at 2 p.m. The budget is expected to have carried a deficit of $77.5 billion in June, compared to a surplus of $33.5 billion in the year-ago period.

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

Source: SmartMoney.com | 13 Jul 2009 | 4:00 am

Earnings Cues: Are We on Brink of Recovery? (Pundit Watch)

A lackluster start to the second-quarter earnings season — with Thomson Reuters forecasting a 36% year-over-year drop in earnings among the S&P 500 — has deepened the rift between those pundits who believe the economy is well on its way toward recovery and those who think the recovery will be a slower, more torturous process.

Bulls suggest that companies that have pared down their inventories will now need to ramp up production in order to meet demand, thus stimulating the economy and the markets. Naysayers, on the other hand, suggest that recent stock market declines — the Dow Jones Industrial Average shed 177 points last week — reflect disappointment among investors who have seen their upbeat hopes dashed by sobering fundamentals, such as the 9.5% unemployment rate, weak retail sales and the limited impact that cost cuts have had on boosting corporate earnings.

Earnings are still less bad, rather than genuinely good, however, and that's not doing much to reinvigorate investors. (Just look at the weak reaction to bellwether Alcoa's (AA) lower-than-expected loss of 26 cents a share last Wednesday.) As we move further into the earnings season, Ed Yardeni, founder of Yardeni Research, believes there will be some pleasant surprises mixed into the gray, but very little evidence of real growth.

"There will be plenty of positive earnings surprises during the Q2 earnings season this month, as there were during Q1," he wrote Wednesday. "It should be the same story: Cost-cutting should boost margins, offsetting some of the weakness in sales."

But at this point, it may be more important to focus on earnings projections for the third quarter and beyond than to dwell on the second-quarter results, said LPL Financial chief market strategist Jeffrey Kleintop. "Market participants expect corporate leaders to express that conditions have started to improve and hold or raise their outlook for earnings in the coming quarters — if they don’t, their stock prices are likely to suffer," he wrote Tuesday. "Specifically, we will be looking for expectations for the third quarter to rise modestly and for the range of high and low estimates to narrow, reflecting improving confidence as uncertainty surrounding the economic outlook fades."

For Bill Gross, managing director at Pimco, the issue isn't how to decipher incoming earnings or future earnings guidance, for that matter, but rather how to recalibrate our expectations as investors and consumers following the credit-fueled binge that spawned the current economic mess.

Gross envisions a "new normal" where growth is slower, profit margins are narrower and asset returns are smaller than in decades past. These revised expectations, along with tougher economic regulations, should substantially inhibit the type of "gorging" on goods and services that consumers and investors had become accustomed to in the past, he wrote in his July commentary.

Yet, in some cases, it's clear that the old way of thinking has yet to entirely work its way out of investors' mindsets. Referring to the market's 40% surge from its March low, Morgan Keegan economist Donald Ratajczak said in a July 6 note, that "the rally started early because of the reversal of fear," then became overoptimistic. We may be back from the abyss, he says, but merely averting disaster doesn't mean there's real improvement. He believes “a saw-toothed advance” will characterize a recovery this autumn.

David Rosenberg, chief economist and strategist at Gluskin Sheff, also took up the bearish case in a Friday note, saying that he sees echoes of the 2002 recession, though this time on a much larger scale.

"We have seen this movie before — a recession dominated by asset deflation, widespread excess capacity and deflation pressures, and then a huge shock that drags the equity market to massively oversold lows," he wrote. "Fiscal and monetary stimulus then ramp up, hopes of a capital spending revival and inventory restocking spring eternal, and risk assets enjoy a significant multi-month rally as earnings and economic projections get revised higher by the consensus community." In his opinion, such a scenario will set the stage for alternating greed and fear among investors, until real fundamentals catch up to and support expectations.

While the worst of the global recession should be over by the third quarter, any recovery will be difficult and slow, wrote Societe Generale global economist Brian Hilliard in the firm's July monthly outlook, published Tuesday.

"Efforts to summarize a view [of the recovery] in simple 'V-', 'U-', 'L-' or 'W-' shapes over-simplify the very complex reality that led to the downturn in the first place," he wrote. " The recovery will be no less complicated, with many medium-term excesses retarding the recovery dynamic."

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

Source: SmartMoney.com | 13 Jul 2009 | 4:00 am

How to Buy A Muni Bond: 5 Key Steps

Go longer.

These days, experts say, the yields on longer-dated bonds are more attractive than they are on shorter-term bonds that mature in less than seven years. Investors who hold the bonds until they mature will get all their principal back-and they won't have to worry about rising interest rates temporarily hurting the value of the bond.

Balance risk and reward.

In these nervous times, concerns about the safety of bonds has raised demand for the highest-rated muni debt (a rated general obligation muni bond has failed only once in 30 years). That has made bonds rated just below AAA more attractive, and many pros, including Ron Schwartz, portfolio manager of the $878 million RidgeWorth Investment Grade Tax-Exempt Bond fund, think they are worth the risk.

Keep an eye on the issuer.

State and local governments that issue bonds must file notices of "material events," such as a ratings downgrade on a bond, to an online database called Electronic Municipal Market Access (emma.msrb.org). But the reports aren't always fresh, so Len Templeton, a financial adviser in Chandler, Ariz., and longtime investor in municipal bonds, says investors should check municipalities' own Web sites to study their finances.

Mind the markup.

Though they don't with stocks, brokers do add a markup to the bonds they sell, above and beyond any transaction fees. Electronic Municipal Market Access and the site InvestingInBonds.com offer tutorials on bond pricing, along with recent trade data that shows how much investors paid for specific bonds.

Or leave it to the pros.

Feeling overwhelmed? Municipal-bond funds give individuals broad exposure to tax-exempt bonds for much less than the amount needed to create a diversified portfolio of individual bonds, which planners say could run $100,000 or more. The downside: Investors potentially could pay capital gains taxes on bonds the fund manager sells at a profit.

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

Source: SmartMoney.com | 13 Jul 2009 | 4:00 am

8% Returns: The Bond Deals You're Missing

IN THE WORLD OF INVESTING, they went from being a positively boring option to an almost sexy one in a matter of weeks. Municipal bonds, those securities your mom and dad would own and lecture you to buy, toiled in obscurity for decades until the crash made them an almost exciting option for anyone looking for a safe haven. And they remain attractive in today's more encouraging, if still shaky, investment climate as a low-risk product people can own while they're slowly getting back into stocks.

Except for one problem: Investors across the country are discovering that muni bonds, in addition to becoming more popular, have also become a lot more complicated and frustrating. Almost overnight it has become nearly impossible for individual investors to get their hands on many top-quality municipal bonds. Even when they can, they're paying higher prices, and many of the bonds no longer have insurance to protect them from a default by the city or town that issued them. And with a new government bond program that favors large institutions, some buyers are feeling the pinch. "It's a market for the other guy, not for us. It makes me feel small," says Delia Fernandez, a financial adviser in Los Alamitos, Calif., who has $20 million under management.

Like many far-reaching changes in the world of investing, the shift in the $2.7 trillion municipal-bond market has its roots in the financial meltdown. Financial planners and bond traders say the combination of the credit crisis and fallout from the government's new bond program has put a big dent in the availability of many high-quality municipal bonds, just as recession-weary investors are fretting about the health of muni-bond issuers. Even as the credit crisis eases, its impact on the muni market continues to reverberate. Several major muni-bond broker-dealers went belly-up in 2008, making it tougher for ordinary investors to buy or sell bonds. But one of the biggest roadblocks has been erected by Uncle Sam himself. The government's "Build America Bonds" program offers states and towns huge incentives to borrow money-but the bonds are hard for individuals to buy and, worse, come without the tax breaks long associated with ordinary muni bonds. The result is that institutions are snapping them up, but mom-and-pop investors looking for tax-free income are out of luck.

Of course, thousands of tax-free muni bonds are bought and sold each day, and investors with well-connected brokers and advisers can still get many of the ones they want-provided they have the required account minimums of several hundred thousand dollars. But for others, the irony in all the changes is that individual investors have long been the backbone of the market, buying some 70 percent of the bonds themselves or through mutual funds. The new problems are all the more galling, some say, because it was these same small investors who helped save the municipal-bond market from a total meltdown last fall. When institutions and hedge funds were flooding the market with muni bonds in a desperate attempt to raise cash, ordinary investors filled the void and bought much of the highest quality debt, says Robert Lamb, professor at New York University's Stern School of Business. Now, as investors try to rebuild their nest eggs, one of their best tools is becoming one of the most difficult to get.

The Municipal Bond - The Friend of the Little Investor

State and local governments have sold municipal bonds ever since New York City kicked things off with a canal bond in 1812. Three decades later the municipal-bond market had grown to $25 million. But it really took off after World War II, as governments sought ways to build new projects and individuals clamored for tax breaks. The idea is simple: Investors who buy bonds are lending cash, for anywhere from one to 30 years, to their local government to build schools, sewers or other big-ticket projects. In return, investors get bonds with a nearly spotless credit history, plus interest payments free from federal income taxes (and state taxes if they live in the state that issued the bond). The higher the investor's tax bracket, the more appealing the bonds become. Because of that tax advantage, municipal bonds historically have offered much lower yields than a corresponding Treasury bond. But today that gap has narrowed, making muni bonds an even better buy. Munis can offer an after-tax yield of about 8 percent. For high-income investors, they could look better still if the top tax rate rises as expected in 2011.

Why bother with individual bonds when you can buy a mutual fund? The reasons are both practical and emotional. Although investors in municipal-bond funds also enjoy tax-free interest, they pay capital gains taxes on bonds the managers sell for a profit. And because fund managers spread the money around many different issues, bond funds never mature. Plus, owning the bond itself gives some investors a sense of pride; they know their money is being used to improve their local schools and roads. Don Barnett, 85, has been buying munis for decades. The retired engineer tries to stick with issues from his home state of Utah. Like other investors he collects the tax-free interest until the bond matures and he gets the original investment back. For Ginger Hatfield, buying individual bonds is something of a family tradition. The 47-year-old software developer from Laguna Beach, Calif., says her father, a bank cashier, found them safer than investing in stocks and urged her to follow in his footsteps.

Now the industry known for being friendly to ordinary investors seems to be stacking the deck against them. It all started, financial planners say, with the financial crisis. Lehman Brothers and Bear Stearns were major players in the muni-bond market, acting as brokers between buyers and sellers of the debt, often holding on to the bonds themselves until they could find the right match. With their demise, no major firms have stepped in to pick up the slack in a significant way, making it harder for planners to find an individual municipal bond for their clients. It has also made it harder to buy and sell the bonds. Justin Krane, an independent financial adviser in Los Angeles, says it now takes a few hours longer for a dealer to offer him a price for a bond he wants to sell.

Even bigger problems were brewing in the market for bond insurance. For years big bond insurers like MBIA and AMBAC sold insurance to states and localities, giving their muni bonds a coveted AAA rating. Investors who never heard of, say, the Froedtert & Community Health hospitals in Wisconsin could take comfort that a big bond insurer was backing the bonds. If the issuer defaulted, investors would get their money back. But bond insurers ran into trouble by selling insurance on risky bonds backed by subprime mortgages. When many of those bonds failed, the insurers had to pay out billions in claims, weakening the companies themselves. As the insurers lost their own AAA ratings, they could no longer guarantee top ratings to others, so many municipalities stopped buying insurance. At its peak in 2005, bond insurance covered 57 percent of all municipal-bond issues. Today only 13 percent carry insurance. Insurance could come in handy now, as the recession batters the nation's bond issuers. Bond fund managers and expert investors, including Warren Buffett, warn that the risk of muni defaults, while still low compared with that of corporate bonds, has nonetheless risen.

For many investors in individual bonds, perhaps the biggest kick in the shins comes from the federal government. In February the Obama administration introduced the Build America Bonds program to help struggling municipalities sell bonds to start projects. Under the program, the feds send the municipality a check for 35 percent of the interest on its bonds. Some states and localities have jumped on the program, selling more than $14 billion in just the first three months of the program. California issued $5 billion worth of Build America Bonds last spring, with coupons of around 7 percent. That state treasurer's office estimates the Build America Bonds subsidy will save California as much as $1.5 billion over the life of the bonds. It's a great deal for the states but not so good for individual investors. That's because unlike with a normal municipal bond, an investor has to pay federal taxes on the interest from Build America Bonds. And the new bonds typically offer 25- or 30-year maturities. While institutions such as pension funds or endowments find that attractive, individual investors often prefer the flexibility that comes with shorter maturities.

What's Next?

No one is proclaiming the death of tax-free municipal bonds just yet, but some experts worry about their future. Critics of the Build America Bonds program say that some federal officials have long felt that investors receive too sweet a deal on tax-exempt muni bonds. The Build America Bonds program is set to expire at the end of 2010, but market participants say it's likely to be extended or even made permanent. Philip J. Fischer, head of municipal-bond research at Bank of America-Merrill Lynch, says Build America Bonds could be a way for the Feds to eliminate much of the tax-favored status traditional muni bonds enjoy.

Alan Krueger, the Treasury Department's chief economist and deputy assistant secretary for economic policy, doesn't exactly discourage that kind of thinking. Indeed, he says the Build America Bonds program is an effort to lower subsidies to individual taxpayers while helping municipalities in their time of need. Krueger says the program is a big success for both institutional buyers and government issuers. But what are retail investors supposed to do? Krueger says they can access Build America Bonds through a mutual fund.

Some investors are doing just that. Others are just fed up with the higher prices, lack of insurance and other headaches and avoiding munis entirely. They are turning, in part, to taxable corporate bonds, says Sarah M. Place, chief executive officer of bond dealer Place Trade. That option doesn't offer all the advantages of owning a muni bond directly. Nor does it provide much sense of civic pride. Unfortunately, Place says, investors don't have much choice. For many people, she says, "the trust is just gone."

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

Source: SmartMoney.com | 13 Jul 2009 | 4:00 am

Rewards Programs Adapt to the Recession (Deal of the Day)

Tough economic times are remaking the landscape of customer-loyalty programs.

Consumer participation in loyalty programs – or incremental incentives that reward repeat business – is up nearly 20% from 2007, according to July research from Colloquy, a market research firm that studies loyalty marketing. A third of shoppers say they’re relying more on such programs to find value in during the recession.

That interest hasn’t necessarily translated into increased sales among businesses. Loyalty only draws customers to the store when they have money to spend, but as the unemployment and personal savings rates have risen, the American wallet has grown tighter. “Upping the rewards isn’t going to entice them to spend more money,” says Randy Allen, associate dean of marketing and corporate relations for Cornell University’s Johnson School. “Lowering the price might.”

As a result, retailers struggling amid the economic downturn are tweaking their customer-loyalty rewards programs — resulting in both new and lost savings opportunities for shoppers.

Like credit-card issuers, retailers are weighing the costs and benefits of loyalty programs against their bottom line. For example, Bed Bath & Beyond (BBY) stopped offering in-store rebates for the Upromise.com college rewards program on July 1. (A spokeswoman for the company said the firm does not publicly comment on its business strategy.) However, Sephora expanded its Beauty Insider program this month to allow shoppers to save up points (one earned per dollar spent) for full-sized beauty products instead of just samples. (For more details on both deals, see the chart below.)

Here are a few changes to watch out for in your favorite retailers’ loyalty programs:

1) High-tech convenience

Retailers are giving consumers more control over how they access discounts. CVS (CVS) began allowing customers to print ExtraCare reward certificates from home last year, instead of just printing them at the bottom of receipts. And Safeway (SWY) rolled out a program this summer that allows shoppers to load digital manufacturers' coupons onto their club card for automatic redemption at the checkout counter.

2) Concierge rewards

Stores looking to protect their profits are adding concierge-type rewards like early access to concert tickets or sporting events via ticket brokers, says Kelly Hlavinka, a partner with Colloquy. It costs the retailer very little to provide such perks, but they may resonate with consumers.

3) Tiered programs

If you’re not a big spender, chances are you’re getting a very different loyalty club experience than someone who is. “Retailers are focusing on the customers that spend money,” Allen says. Best Buy (BBY) recently announced that as of Oct. 31, members in its standard Reward Zone program must redeem points in the year they are earned. Premier Silver members have no such restriction. (Best Buy did not respond to a request for comment.)

4) Expanded partnerships

Cross-marketing — giving rewards on one thing when you shop for another — can be extremely effective, says Hlavinka. Look for partnerships among retailers, like Gulf Oil’s Override.com, which offers discounts on gas when you buy coffee and groceries at partner companies Shaw’s Supermarkets and Dunkin’ Donuts.