Screen Survivors

How Obama wants to transform your finances Most of the big things Barack Obama hopes to get done - health-care reform, slowing climate change - would have a big economic impact over the long run. But the administration's plan to reshape financial regulation, outlined in an 88-page Treasury report in June, could have an immediate effect on your wallet. Source: Business and financial news - CNNMoney.com | 1 Aug 2009 | 4:00 am Former Sinopec chief sentenced to death The former chairman of Sinopec, the oil refiner that is one of China’s largest companies, was sentenced to death earlier today, becoming the latest victim of a Government drive to stamp out corruption. Source: Latest Business News from Times Online | 15 Jul 2009 | 12:01 pm Stock futures rise on hopes for economy (AP) AP - Investors who have been looking for signs the economy is on the mend are pushing stock futures higher Wednesday in the wake of better-than-expected earnings reports from Intel and Goldman Sachs. Source: Yahoo! News: Stock Markets News | 15 Jul 2009 | 11:54 am When High Charge-Offs Start Looking Good (COF) Capital One Financial Corp. (NYSE: COF) has some more dismal data regarding the monthly credit card defaults and delinquencies.  The defaults rose again in June along with weak economic data and higher unemployment.  But there is actually some good news buried in here along with what may be the trend of “less-bad” news.  The same [...] [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Source: 24/7 Wall Street | 15 Jul 2009 | 11:42 am Intel expects strong 6 months Intel Corp. said Tuesday that its second-quarter sales fell compared to the same quarter a year ago, but that business is picking up fast. Source: Business and financial news - CNNMoney.com | 15 Jul 2009 | 11:42 am London Markets: Metal extractors help British stocks advance Miners advance in London, with Rio Tinto stating that it expects higher steel demand from China to continue, as financials also contribute to Wednesday's gains. Source: MarketWatch.com - Top Stories | 15 Jul 2009 | 11:37 am Stock futures jump as Intel spurs optimism (Reuters) Reuters - Stock futures rose on Wednesday as Intel Corp's solid results and upbeat outlook reinforced hopes for an economic recovery and a rebound in technology spending. Source: Yahoo! News: Stock Markets News | 15 Jul 2009 | 11:35 am Stock futures jump as Intel spurs optimism (Reuters) Reuters - Stock futures rose on Wednesday as Intel Corp's solid results and upbeat outlook reinforced hopes for an economic recovery and a rebound in technology spending. Source: Yahoo! News: Business | 15 Jul 2009 | 11:35 am Tax the rich to pay for ... everything? There may be reasons to tax the rich more, as a lot of people in Washington are talking about doing. Source: Business and financial news - CNNMoney.com | 15 Jul 2009 | 11:34 am Insurers outline swine flu status Travellers affected by swine flu should be covered for any losses through their insurance policies, an industry body confirms. Source: BBC News | Business | World Edition | 15 Jul 2009 | 11:33 am Indications: Intel report drives U.S. stock futures higher An upbeat report out of Intel carries U.S. stock futures higher on Wednesday as traders snap up technology issues across the globe. Source: MarketWatch.com - Top Stories | 15 Jul 2009 | 11:32 am Million-dollar summer homes Source: Business and financial news - CNNMoney.com | 15 Jul 2009 | 11:30 am Stock futures point to Wall Street rising; economic data eyed (Reuters) - Stock index futures pointed to a higher opening for Wall Street on Wednesday, as investor confidence was boosted by results and an upbeat outlook statement from chipmaker Intel... Source: RSS feed - channel BNewsBusiness | 15 Jul 2009 | 11:28 am Return of the $773,000 paycheck The Goldman Sachs gravy train is back on track. Source: Business and financial news - CNNMoney.com | 15 Jul 2009 | 11:27 am World trade 'continues to fall' Trade in developed countries continued to fall in the first three months of this year but at a slower rate, the OECD says. Source: BBC News | Business | World Edition | 15 Jul 2009 | 11:27 am Steve Jobs gets OK to tear down mansion Source: Business and financial news - CNNMoney.com | 15 Jul 2009 | 11:26 am UPDATE 2-Lone Star's acquisition of Japan REIT blocked * New City fails to get creditor votes for Lone Star plan Source: RSS feed - channel BNewsBusiness | 15 Jul 2009 | 11:22 am Record rise in UK jobless total UK unemployment rose by a record 281,000 to 2.38 million, in the three months to May, official figures show. Source: BBC News | Business | World Edition | 15 Jul 2009 | 11:22 am Yingli Expanding in America (YGE) Yingli Green Energy Holding Company Limited (NYSE: YGE) is going harder after the solar market in North America.  The Chinese PV Manufacturer is opening two coastal U.S. headquarters offices in New York City and San Francisco to support its North American customer base and to facilitate new partnerships in North America. Yingli’s CEO said that it [...] [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Source: 24/7 Wall Street | 15 Jul 2009 | 11:18 am European shares rally on economic optimism (AFP) AFP - Europe's leading stock markets rallied on Wednesday as investors eyed a global economic recovery following the release of some positive earnings and economic data, analysts said. Source: Yahoo! News: Stock Markets News | 15 Jul 2009 | 11:15 am Capstone Reports Strong Production Cash Operating Costs for the First Half of 2009 49.2 million pounds of Copper in Concentrates with an Estimated Total Cash Cost(1) of US$0.93 per pound of payable copper VANCOUVER, July 15... Source: RSS feed - channel BNewsBusiness | 15 Jul 2009 | 11:15 am Capstone Reports Strong Production & Cash Operating Costs for the First Half of 2009 VANCOUVER, July 15 /PRNewswire-FirstCall/ -- - 49.2 Million pounds of Copper in Concentrates With an Estimated Total Cash Cost(1) of US$0.93 per Pound of... Source: RSS feed - channel BNewsBusiness | 15 Jul 2009 | 11:15 am Tech stocks set to surge Technology stocks were expected to lift the overall market at Wednesday's open after Intel topped analysts' expectations for the prior quarter and gave a positive second-half outlook. Source: Business and financial news - CNNMoney.com | 15 Jul 2009 | 11:12 am Top 10 Analyst Upgrades and Downgrades (ALU, CHS, PLCE, DB, GS, IGT, ICE, MCO, WSII, PAR) These are some of the top pre-market analyst upgrades, downgrades, and initiations we have seen from Wall Street with about two and a half hours until the market opens: Alcatel-Lucent (ALU) Raised to Buy at BofA/Merrill. Chico’s FAS (CHS) Started as Buy at Jefferies. Children’s Place (PLCE) Started as Buy at BofA/Merrill. Deutsche Bank (DB) Started as Outperform at [...] [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Source: 24/7 Wall Street | 15 Jul 2009 | 11:08 am London equities extend winning run The strong run on London's equity market this week extended into Wednesday after better-than-expected earnings in the US, while gains on commodity exchanges lifted mining and oil stocks.Banking group Goldman... Source: RSS feed - channel BNPaperBusiness | 15 Jul 2009 | 11:01 am 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 | 15 Jul 2009 | 11:01 am Best Places to Live: Where to make big money Holmdel, N.J., residents pull in more than $159,000 a year. Which other places have high incomes? Source: Business and financial news - CNNMoney.com | 15 Jul 2009 | 11:00 am Concur Announces Schedule for Upcoming Fiscal 2009 Third Quarter Earnings Webcast REDMOND, Wash., July 15 /PRNewswire-FirstCall/ -- href="http://www.concur.com/">Concur (Nasdaq: CNQR), the world's leading provider of on-demand... Source: RSS feed - channel BNewsBusiness | 15 Jul 2009 | 11:00 am ProLogis Leases More Than 645,000 Square Feet in Japan - New ProLogis Customer Leases 82 Percent of ProLogis Parc Ichikawa II Prior to the Building's Completion in October 2009 - TOKYO, July 15 /PRNewswire-FirstCall/ --... Source: RSS feed - channel BNewsBusiness | 15 Jul 2009 | 11:00 am Main Street Capital Announces Second Quarter 2009 Earnings Release and Conference Call Schedule HOUSTON, July 15 /PRNewswire-FirstCall/ -- Main Street Capital Corporation (Nasdaq: MAIN) ("Main Street") today announced it will release second quarter 2009 financial results on Source: RSS feed - channel BNewsBusiness | 15 Jul 2009 | 11:00 am Refinance applications up 17.7% last week: MBA With interest rates declining, there was a 4.3% increase in the pace of applications filed for mortgages in the week ended July 10 as homeowners stepped forward to refinance their home loans, Mortgage Bankers Association data show. Source: MarketWatch.com - Top Stories | 15 Jul 2009 | 11:00 am Goldman Sachs staff set for record pay Pay at Goldman Sachs this year is set to beat the boom levels enjoyed before the financial crisis, with thousands of employees on track to earn a record $770,000 each on average despite the recession Source: Financial Times - US homepage | 15 Jul 2009 | 10:58 am Dollar slips against euro The dollar dipped against the euro on Wednesday as the foreign exchange market looked ahead to more US banking results after surprisingly strong earnings from titan Goldman Sachs, dealers... Source: RSS feed - channel BNewsBusiness | 15 Jul 2009 | 10:58 am ASML swings to loss, predicts sales rise ASML, Europe’s largest maker of semiconductor equipment, swings to a second-quarter loss. Source: MarketWatch.com - Top Stories | 15 Jul 2009 | 10:58 am Ousted GM boss leaves with $11.2m payoff$ Rick Wagoner, the 56-year-old former boss of the crisis-hit General Motors, will receive $11.2 million payoff over the next five years, after he was ousted by President Obama as the car group descended into Chapter 11 bankruptcy.$ Source: Latest Business News from Times Online | 15 Jul 2009 | 10:57 am Jaguar cuts 300 jobs as it stops XType production at Halewood Jaguar Land Rover JLR is to cut up to 300 jobs at its Merseyside plant as the company battles to deal with the dramatic fall in new car sales. Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 15 Jul 2009 | 10:56 am Chinese agencies back Tengzhong-Hummer deal BEIJING (Reuters) - China's Ministry of Commerce on Wednesday played down reports that it is at odds with the economic planning agency over a controversial deal for a little-known Chinese company to buy GM's Hummer unit. Source: Reuters: Business News | 15 Jul 2009 | 10:54 am Commodity markets extend gains Commodity markets extended their advance for a second session on Wednesday helped by further dollar weakness, with crude oil prices rising in advance of the latest US weekly inventories data while base... Source: RSS feed - channel BNPaperBusiness | 15 Jul 2009 | 10:53 am Porsche, VW to hold side-by-side board meetings Volkswagen, the biggest European carmaker, said on Wednesday it would hold a special board meeting next week coinciding with a meeting by its main shareholder, Porsche, in a context of... Source: RSS feed - channel BNewsBusiness | 15 Jul 2009 | 10:53 am Europe Markets: Technology shares pace gains in Europe European shares climb for a third session with technology stocks notably higher as adjusted results from Intel add to positive sentiment about the current earnings season. Source: MarketWatch.com - Top Stories | 15 Jul 2009 | 10:53 am Business travel falls at Eurostar Eurostar reports a 6% fall in passenger numbers, caused by a big decline in business class customers. Source: BBC News | Business | World Edition | 15 Jul 2009 | 10:49 am China's forex reserves pass $2,000bn Beijing's foreign reserve holdings have surged through the $2,000 billion mark, as money pours back into China to take advantage of faster economic growth and rapidly inflating asset prices.The flow of... Source: RSS feed - channel BNPaperBusiness | 15 Jul 2009 | 10:44 am China’s forex reserves pass $2,000bn Money pouring in to take advantage of faster economic growth and rapidly inflating asset prices pushed the country’s foreign reserves up by $177.9bn in the second quarter to $2,132bn Source: Financial Times - US homepage | 15 Jul 2009 | 10:44 am Vodafone, others bid for Orascom Telecom unit-report CAIRO, July 15 (Reuters) - Vodafone Egypt is competing against other Egyptian telecoms firms and some financial institutions for internet service provider Orascom Telecom's LinkDotNet, a newspaper reported... Source: RSS feed - channel BNewsBusiness | 15 Jul 2009 | 10:44 am More Britons taking UK holidays With the recession kicking in, more people in Britain are choosing not to go abroad for their summer holiday. Source: BBC News | Business | World Edition | 15 Jul 2009 | 10:40 am China's foreign reserves top $2tn China's foreign exchange reserves, the world's largest, have surpassed $2 trillion, the country's central bank says. Source: BBC News | Business | World Edition | 15 Jul 2009 | 10:39 am Dollar falls as China reveals record stockpiles The dollar fell to its lowest level in two weeks on Wednesday as China revealed it had amassed record cash stockpiles, while improving investor confidence stemmed haven demand for the US currency.Analysts... Source: RSS feed - channel BNPaperBusiness | 15 Jul 2009 | 10:34 am OECD sees hard times for Russia The global economic crisis has put a sudden end to the strong recovery of the Russian economy, says the Organisation for Economic Co-operation and Development. Source: BBC News | Business | World Edition | 15 Jul 2009 | 10:30 am Economic Report: U.K. jobless claims slow, unemployment rate jumps The number of Britons claiming jobless benefits in June rose at the slowest pace in more than a year, but the overall number of unemployed rose at a record quarterly pace in the three months ending in May, the Office for National Statistics reported Wednesday. Source: MarketWatch.com - Top Stories | 15 Jul 2009 | 10:30 am Coalition to attack plan for Fed powers Barack Obama’s plan to give the Federal Reserve extensive powers over all large US financial groups will be attacked by a coalition of investors, analysts and ex-regulators Source: Financial Times - US homepage | 15 Jul 2009 | 10:27 am China's forex reserves top $2 trillion China’s foreign exchange reserves ballooned at a record pace in the second quarter to top the $2 trillion milestone for the first time, even as the nation’s exports remained under pressure during the period because of weak global demand. Source: MarketWatch.com - Top Stories | 15 Jul 2009 | 10:27 am Britain's unemployment rises by a record Fresh figures underline the grip of the downturn on the economy. . Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 15 Jul 2009 | 10:23 am Now AT&T wants its piece of stimulus Big businesses are battling to take home chunks of the government's billion-dollar stimulus pie and AT&T is among the leaders on the telecom front. Source: Business and financial news - CNNMoney.com | 15 Jul 2009 | 10:13 am Iranian passenger jet crashed: report An Iranian jet carrying 168 passengers crashes in the northwest of the country, according to media reports. Source: MarketWatch.com - Top Stories | 15 Jul 2009 | 10:11 am Jaguar announces 300 job losses Car manufacturer Jaguar announces it is to axe up to 300 jobs at its plant in Halewood on Merseyside. Source: BBC News | Business | World Edition | 15 Jul 2009 | 10:10 am 10 ways to deal with redundancy Unemployment has soared to almost 2.4m after a record number of people joined the growing jobless ranks. Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 15 Jul 2009 | 10:08 am 6 months later: Do they finally have jobs? Source: Business and financial news - CNNMoney.com | 15 Jul 2009 | 10:07 am Bank of Japan Looking Recession-Lite The Bank of Japan has made a economic projection that has at least a bit of cautious optimism.  While it is not declaring the recession entirely over, the BOJ kept rates at 0.10% and has extended added liquidity measures through December.  Technically, there was a downgrade of the outlook of the 2009 economy.  But the [...] [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Source: 24/7 Wall Street | 15 Jul 2009 | 10:07 am Porsche debt hits 10bn STUTTGART, July 15 Porsche's debt has ballooned to more than 10bn ($14.1bn) from 9bn, but the company aims to flush fresh funds into its coffers through deals being agreed with Qatar, two sources familiar... Source: RSS feed - channel BNPaperBusiness | 15 Jul 2009 | 10:06 am Government maps low-carbon road Ministers are publishing plans for a low-carbon future, which they say can help the economy while tackling climate change. Source: BBC News | Business | World Edition | 15 Jul 2009 | 10:06 am London Stock Exchange cuts jobs as recession hits revenues The London Stock Exchange LSE continued to feel the affects of the recession over the past three months as revenues fell and 120 jobs were lost half in the UK. Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 15 Jul 2009 | 10:04 am Young 'depressed' about money A quarter of young people are depressed about their finances in the current recession, says counselling charity Relate. Source: BBC News | Business | World Edition | 15 Jul 2009 | 9:55 am UK unemployment hits 14-year high of 2.38m Unemployment climbed by a record 281,000 to hit 2.38 million in the three months to May, the highest level since October 1995. Source: Latest Business News from Times Online | 15 Jul 2009 | 9:49 am If Uncle Sam Takes Mortgages and Becomes Landlord What if the government adopted a new strategy on how to keep homes occupied by delinquent and troubled owners by letting them stay in the house as a renter?  This may sound crazy or like the ultimate bailout, but that is apparently at least a possible scenario according to Reuters. The idea would be that homeowners [...] [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Source: 24/7 Wall Street | 15 Jul 2009 | 9:44 am Technology shares pace gains in Asia Asian share markets extend gains, as technology stocks such as Samsung get a lift from Intel's optimistic earnings outlook. Source: MarketWatch.com - Top Stories | 15 Jul 2009 | 9:40 am Chinese agencies back Tengzhong-Hummer deal (Reuters) Reuters - China's Ministry of Commerce on Wednesday played down reports that it is at odds with the economic planning agency over a controversial deal for a little-known Chinese company to buy GM's Hummer unit. Source: Yahoo! News: Business | 15 Jul 2009 | 9:30 am A World Where All Technology Products Are Free (GOOG)(AAPL)(MSFT) Many of the 65,000 Apps available at the Apple (AAPL) iPhone store are free. Microsoft (MSFT) is going to give away an online version of its new Office software. It may not occur to many consumers, but the notion that Google (GOOG) allows people to search the Internet with magical efficiency without paying the company is [...] [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Source: 24/7 Wall Street | 15 Jul 2009 | 9:09 am Suspended death sentence for ex-Sinopec boss Cheng Tonghai, a former chairman of Sinopec, was sentenced to death with a two-year reprieve for accepting more than $28m in bribes, one of the harshest penalties meted out to a senior Chinese official in years Source: Financial Times - US homepage | 15 Jul 2009 | 9:02 am Ex-Sinopec boss sentenced to death BEIJING, July 15 (Reuters) - A former chairman of top Asian oil refiner Sinopec Corp was sentenced to death on Wednesday with a two-year reprieve for accepting more than $28m in bribes, one of the harshest... Source: RSS feed - channel BNPaperBusiness | 15 Jul 2009 | 9:02 am Asian markets rise after Goldman, Intel earns (AP) AP - Asian stock markets rose for a second day Wednesday, underpinned by better-than-expected U.S. earnings and optimism the regional economy is on the mend. European shares were higher. Source: Yahoo! News: Stock Markets News | 15 Jul 2009 | 8:54 am No Gravity In China’s Stock Markets The Shanghai Composite, the best measure of China’s equities markets, traded at 1,700 last November, when it appeared that the GDP growth of the world’s most populous nation was moving well below 5%. The economy in China has been so overheated that 5% growth is a de facto recession. Today, the index trades at 3,190, an extraordinary run [...] [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Source: 24/7 Wall Street | 15 Jul 2009 | 8:52 am 12 of the Most Infamous Bankruptcies Some companies fail by honest error. Despite their hard work and honest intentions, they succumb to bankruptcy for neutral reasons - the wrong business model, a bad economy, or superior competitors. Far more interesting, however, are the stories of companies that were driven into bankruptcy maliciously, through fraud, corruption, or scandal. Often times, these were proud and profitable businesses whose only mistake was putting too much power into unsavory hands. Their stories provide both intrigue and a cautionary tale for other businesses to heed. Here are 12 of the most infamous such bankruptcies. Lehman Brothers (Image) Lehman Brothers possessed more assets - over $600 billion - than any U.S. company ever to go bankrupt. According to SeekingAlpha.com, it was Lehman’s risk management strategy (or lack thereof) that was the main determinant in  the company’s demise. “Yes, they had risk management, but it mostly used the “Value at Risk” system invented by JP Morgan Chase & Co. (JPM) in the early 1990s. VAR appears to have been designed to let the traders get on with the business of making real money, while at the same time keeping the top brass from worrying too much about the risks traders were taking.” The problem, according to AlphaSeeker, is that this model of risk management fails to take into account what could go wrong under, the other 1%” of scenarios not forecast by the model. This turned out to be critical, as Lehman Brothers was staggeringly over-leveraged by a 30:1 ratio that was simply unsustainable. Public outcry over the situation worsened when it was announced in September 2008 that, in the words of the UK’s Times Online, “…staff at Lehman’s New York office who helped to cause the world’s biggest corporate bankruptcy are to share in a $2.5 billion bonanza,” of bonus money despite their role in the firm’s meltdown. Enron (Image) Enron will forever be the poster child for scandal-driven bankruptcy. The energy trading titan famously hid billions of dollars in losses from shareholders and the media, engaging in what prosecutor Andrew Weissman called, “…sanitizing the records so the SEC would have less information.” The combined effect of Enron’s shady accounting practices produced an unprecedented plummet in the (and any) company’s stock price, which sank from $90 per share in the late 1990’s to $0.10 in October of 2001. BusinessAndMedia.org reports that this wiped out at least $11 billion of stockholder equity, including many of its employees’ retirement funds. Prior to WorldCom’s 2002 collapse (and the Lehman bankruptcy that eclipsed it) Enron and its $63.4 billion in assets was the biggest bankruptcy in U.S. history. WorldCom (Image) It didn’t take long for Enron to be overshadowed as the quantitatively largest bankruptcy in our history. Just one year later, in 2002, telecommunications giant WorldCom and its $103 billion in assets were done in by an accounting scandal of epic proportions. Set into motion by the company’s own Chief Financial Officer (Scott Sullivan), the swindle was exposed after internal auditing uncovered what CBS News called “improper accounting of more than $3.8 billion in expenses over five quarters.” Ousted CEO Bernard Ebbers was sentenced to 25 years in prison for his role in the debacle. In addition to WorldCom’s stock price tanking, “…as much as 76%” in the hours immediately following the news break, roughly 17,000 of the company’s employees were promptly fired and left without work. Together with Enron, the disastrous fate of WorldCom has come to define the early 2000’s as a decade of corporate malfeasance and misconduct. Adelphia (Image) The downfall of Adelphia Communications is perhaps the saddest bankruptcy story in recent memory. After decades of hard toil to become the fifth largest cable provider in the United States, founder John J. Rigas and his son Timothy conspired to embezzle millions of dollars from the company they started. According to the Washington Post, federal prosecutors, “…alleged that that the Rigas family siphoned $100 million from Adelphia to pay for personal extravagances, hid $2.3 billion in debt and systematically deceived investors about Adelphia’s subscriber growth and its bottom line.” Adelphia’s remaining assets were scooped up by Comcast and Time Warner Cable in bankruptcy court and as such, the company no longer exists as an independent entity. The father-son duo of deception received prison sentences of 15 and 20 years, respectively. Refco (Image) Add Refco to the long and shameful list of financial services firms swallowed by securities fraud. As reported by CFO.com, Refco CEO Phillip Bennett illicitly used a hedge fund to conceal $430 in liabilities stemming from transactions dating back to 1998 (the year Bennett took command as CEO.) The fraudulent setup came to light in 2005, when Bennett was suspended from his post and forced to repay the full amount owed. Refco later announced that it would need to, “…restate its financials going back to 2002″ and the Wall Street Journal notes that the company, “…sold its regulated futures and commodities business to Man Financial,”  in November 2005. Tyco (Image) The story of Tyco’s embezzlement-triggered collapse epitomizes why so many are outraged by corporate misconduct. Former CEO L. Dennis Kozlowski and CFO Mark Swartz were handed prison sentences of up to 25 years after the pair was found to have, “…pilfered some $600 million from the company including a $2 million toga birthday party for Kozlowski’s wife on a Mediterranean island and an $18 million Manhattan apartment with a $6,000 shower curtain,” according to MSNBC. The first attempt at convicting Kozlowsky and Swartz on 22 counts of grand larceny, securities fraud, falsifying business records and conspiracy ended in a mistrial when one of the jurors was threatened, but the second trial secured the guilty verdict so many had hoped for. IndyMac Bancorp (Image) IndyMac Federal Bank has earned infamy among journalists and pundits for executing a costly “backdating” scandal in 2007-2008. According to ABC News, Treasury Department regional director Darrel W. Dachow, “…allowed IndyMac to backdate its deposits to hide its ill health.” In essence, this consisted of IndyMac recieving an $18 million deposit from its parent company on May 9 but recording the cash as if it had arrived before the end of the previous quarter, on March 31. This enabled the company to conceal how under-capitalized it was and continue enticing customers to deposit money with the struggling bank. Indeed, the LA Times reports that IndyMac reeled in some $90 million more in uninsured deposits before being placed into receivership. Washington Mutual (Image) The BloggingStocks.com article “Drugs, Fraud, and Betrayal at Washington Mutual” paint a horrifying picture of how that company spiraled into bankruptcy and despair. Asking in vane why regulators did not sense the company’s troubles, the article reports that the CEO “snorting methamphetamine every morning” while embezzling $88 million from 2001-2007 during the height of the company’s mortgage fraud fiasco. A chilling New York Times piece describes the company as having “built an empire of bad loans” and reveals how little scrutiny and background checking was exercised in handing out money to untrustworthy borrowers hand over fist. “By 2005, the word was out that WaMu would accept applications with a mere statement of the borrower’s income and assets — often with no documentation required — so long as credit scores were adequate, according to Ms. Zaback and other underwriters.” When all was said and done, J.P. Morgan Chase bought what remained of the failed bank for $1.9 billion in a deal brokered by federal regulators, according to the Wall Street Journal. Conseco (Image) Conseco offers yet another example of a once-proud company done in by fraudulent accounting practices. The University of Chicago law school’s blog ran a penetrating exposé of Conseco CEO Stephen Hilbert’s tactics, which included structuring the books in such a way that he was entitled to low-interest loans from company funds and the fact that Conseco “engaged in accounting fraud related to certain mortgage-backed securities offered by subsidiary Green Tree Financial.” The company succumbed to bankruptcy soon thereafter, making Conseco’s shares (which were the sole collateral for Hilbert’s illicit loans) totally worthless. Fortunately, Conseco has since cleaned up its act and according to the Wall Street Journal, “trades publicly and carries a market capitalization of $270 million.” Tribune Company (Image) Staggering under a whopping $13 billion in debt, Tribune Company (parent of the Chicago Tribune newspaper) filed for chapter 11 bankruptcy in December 2008. However, many have speculated that there is more to the story. Disgraced ex-Illinois governor Rod Blagojevich is reported to have threatened to withhold state funds from the Chicago Tribune unless it fired editorial writers who had been critical of Blagojevich’s policies. The New York Times reports that Blagojevich told his chief of staff, “…our recommendation is fire all those [expletive] people, get ’em the [expletive] out of there and get us some editorial support.” It was further speculated that the Blagojevich family delayed Tribune from selling the Chicago Cubs baseball team long enough to force the company into bankruptcy. Blagojevich’s wife Patti is reported to have said, “…hold up that [expletive] Cubs [expletive],” [expletive] them.” Worse yet, a Chicago Sun-Times article suggests that Tribune editor Sam Zell considered complying with Blagojevich’s demands to secure $100 million in state funds. Bernard Madoff Securities (Image) Bernard Madoff Securities didn’t have the brick-and-mortar presence of Enron or Lehman Brothers, but at one point, it held some $60 billion swindled from high-profile individuals like New York Mets owner Fred Wilpon and legendary director Steven Spielberg. (The Wall Street Journal‘s running tally of victims is a veritable “who’s who” of famous corporations and wealthy individuals from all walks of life.) So complex are the bankruptcy proceedings for Madoff’s “company” that Irving Piccard and a squad of lawyers have been appointed to dissect it piece by piece. The Huffington Post quotes the lawyers as saying that Madoff treated the money entrusted to him by victims, “…as his personal bank account, taking funds when he needed them and transferring funds to other Madoff entities or family members when it suited his whim and purposes.” Semgroup (Image) Oil trucking and pumping firm Semgroup was pushed into bankruptcy in 2008 by fraudulent trading, according to several sources. CFO.com reported that SemGroup’s lender admitted this to be the case in court documents. Forbes elaborates in its eye-opening article “Inside The Semgroup Bust”, noting that CEO Thomas Kivisto illicitly borrowed $290 million and lost it on personal trading. It should be noted that this represented only a fraction of the company’s total losses, clocked by Forbes at $2.4 billion. Kivisto was ousted from Semgroup in July 2008 after the company filed for chapter 11 bankruptcy. Additionally, TulsaWorld reports that Kivisto (along with ex-CFO Gregory Wallace) was sued in 2009 seeking the return of $362 million in company funds squandered in their own private lives. Source: Business Pundit | 15 Jul 2009 | 8:50 am SKF sales offer hope of global recovery SKF, the world's biggest producer of industrial bearings, held out the faintest of hopes for a recovery later this year by saying the year-on-year decline in its sales was showing signs of levelling off... Source: RSS feed - channel BNPaperBusiness | 15 Jul 2009 | 8:48 am Britain's unemployment jumps the most since 1971 Fresh figures underline the grip of the downturn on the economy.. Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 15 Jul 2009 | 8:47 am Global stocks near two-week highs, dollar wilts LONDON (Reuters) - Global stocks rose to their highest level in nearly two weeks on Wednesday as blockbuster results from major firms such as tech bellwether Intel Corp underpinned appetite for riskier assets. Source: Reuters: Business News | 15 Jul 2009 | 8:43 am The Bumbling At AIG (AIG) Continues AIG’s (AIG) management has repeatedly promised that it will get taxpayers back every dime of the $180 billion that the government has put into the insurance company in one form or another. Part of the program to raise cash is the sale of most of the firm’s most attractive assets. One of those businesses is [...] [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Source: 24/7 Wall Street | 15 Jul 2009 | 8:38 am British unemployment set to reach 2.3 million An extra 41,700 people are expected to have signed up for jobless benefits in June, City economists forecast, taking the total number of people in dole queues to nearly 1.6 million. Source: Latest Business News from Times Online | 15 Jul 2009 | 8:38 am Australian PM warns China over Rio spy claims Kevin Rudd, the Australian Prime Minister, today issued a stark warning to China over its decision to detain four executives from Rio Tinto on allegations of spying, reminding "our Chinese friends" of the economic links between the two countries. Source: Latest Business News from Times Online | 15 Jul 2009 | 8:27 am How Many More Bailouts After CIT (CIT) The Wall Street Journal has been carefully following the story of CIT’s (CIT) liquidity crisis. News that the firm is in trouble caused customers to draw down several hundred million in credit lines. The paper reports that the Treasury may provide loans to help CIT make it through what all parties hope is a short-term [...] [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Source: 24/7 Wall Street | 15 Jul 2009 | 8:27 am Burberry says taking share in a tough market LONDON (Reuters) - British luxury goods group Burberry met forecasts with a 4 percent fall in first-quarter underlying revenues and said on Wednesday it was taking market share in a tough trading environment. Source: Reuters: Business News | 15 Jul 2009 | 8:26 am Solvay rises on pharma unit report Shares in Solvay rose on Tuesday on news it had narrowed the list of bidders for its pharma unit down to two.The Belgian chemicals and pharmaceutical conglomerate has been exploring options for its drugs... Source: RSS feed - channel BNPaperBusiness | 15 Jul 2009 | 8:23 am Can Intel (INTC) And Dell (DELL) Both Be Right? Dell (DELL) delivered a pessimistic forecast about it recent sales and the short-term period ahead, indicating that the PC market is still in trouble. A number of industry analysts expect global computer shipments to drop 5% or more this year. About 24 hours after Dell’s unpleasant news, Intel (INTC) was remarkably sanguine.  “While the global economic [...] [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Source: 24/7 Wall Street | 15 Jul 2009 | 8:16 am Japan extends emergency measures to companies Japan has extended its emergency measures to get credit to companies as the country's central bank cautioned against hopes of a quick recovery. Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 15 Jul 2009 | 8:08 am Aussie stocks: Market closes firmer MELBOURNE - The Australian share market has closed firmly higher, driven by resource and banking stocks and positive lead from Wall Street. By 1615 AEST, the benchmark S&P/ASX200 index was up 57.4 points, or 1.48 per cent, at 3924.5... Source: New Zealand Herald - Business | 15 Jul 2009 | 7:58 am Raúl uses film to lay down the law The main message of the video presentation of the politburo meeting and sackings, according to people who have seen it, could not be clearer: the state is watching, and Raúl will not tolerate even the slightest breach of party discipline Source: Financial Times - US homepage | 15 Jul 2009 | 7:49 am U.S. CPI seen up in June by most since July 2008 (Reuters) Reuters - Higher costs for oil and gasoline likely pushed U.S. consumer prices up in June by the most for any single month since oil prices peaked last summer, according to a poll of economists. Source: Yahoo! News: Business | 15 Jul 2009 | 7:46 am U.S. CPI seen up in June by most since July 2008 WASHINGTON (Reuters) - Higher costs for oil and gasoline likely pushed U.S. consumer prices up in June by the most for any single month since oil prices peaked last summer, according to a poll of economists. Source: Reuters: Business News | 15 Jul 2009 | 7:46 am H&M reports surprise 5% fall in sales STOCKHOLM, July 15 (Reuters) - Swedish fashion chain Hennes & Mauritz reported on Wednesday a bigger than expected 5 per cent year-on-year fall in sales at established stores in June.The average forecast... Source: RSS feed - channel BNPaperBusiness | 15 Jul 2009 | 7:44 am GM's ousted chief Rick Wagoner sees retirement package reduced to 8.6m The former General Motors chief executive will leave in August with a sharply reduced package. Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 15 Jul 2009 | 7:39 am London stocks climb at open (AFP) AFP - The London stock market climbed at the start of trading on Wednesday as investors felt more confident about the corporate sector. Source: Yahoo! News: Stock Markets News | 15 Jul 2009 | 7:33 am Rudd warns China on Rio detention Kevin Rudd, Australia’s prime minister, toughened his stance on China’s detention of an Australian Rio Tinto employee, warning Beijing that the case was watched by the rest of the world Source: Financial Times - US homepage | 15 Jul 2009 | 7:20 am Rudd warns China on Rio detention Kevin Rudd, Australia's prime minister, on Wednesday toughened his stance on China's detention of an Australian Rio Tinto employee, warning Beijing that the case was being watched by the rest of the world... Source: RSS feed - channel BNPaperBusiness | 15 Jul 2009 | 7:20 am Intel falls to a loss after record EU fine The microchip maker has fallen to its first quarterly loss in 22 years after setting aside cash to pay a record £950m EU fine. Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 15 Jul 2009 | 7:12 am Intel results beat forecasts; shares jump The chip giant reports $8 billion in second-quarter revenue, pointing to sales of the Atom processor for netbooks. It posts a loss, however, primarily because of a European Commission fine. Intel Corp. shed a few rays of hope Tuesday when it posted second-quarter results that beat Wall Street's expectations and triggered a rally in the semiconductor giant's stock price. Source: L.A. Times - Business | 15 Jul 2009 | 7:00 am No. 1 on back-to-school shopping lists this year: bargains The depressed economy will push 85% of shoppers to reduce spending, according to a survey by the National Retail Federation. Coupons and discounts will be the hottest styles for back-to-school shoppers this year. Source: L.A. Times - Business | 15 Jul 2009 | 7:00 am GM details payout to ex-chief Rick Wagoner On top of $8.2 million in severance, he will get $74,030 annually for life and benefits, documents show. It's good unemployment, if you can get it. Source: L.A. Times - Business | 15 Jul 2009 | 7:00 am U.S., China try to reach accord on reducing greenhouse gas emissions The participation of these two polluting superpowers is essential to building a global consensus heading into next year's United Nations conference on climate change. U.S. Energy Secretary Steven Chu and Commerce Secretary Gary Locke are in Beijing this week to talk about climate change with Chinese leaders. The hope is to open the nation's market to American clean technology products while nudging China toward committing to hard targets for reducing greenhouse gas emissions. Source: L.A. Times - Business | 15 Jul 2009 | 7:00 am Reflective roof paint repels the heat Hyperseal paints can reduce the costs and energy needed for cooling by lowering the amount of heat a building absorbs from the sun. White roofs may be the new green. On bright days, the rooftop of the Anaheim Hilton is so blindingly white that it looks like a mirror positioned directly at the sun. That dazzling glare might just be the greenest thing to happen to the top of a building since solar panels. Source: L.A. Times - Business | 15 Jul 2009 | 7:00 am U.S. toxic asset plan draws criticism The Obama administration is moving forward with its financing program to take the complex securities off banks' balance sheets, but critics say there is no need for it now. Despite evidence that banks are regaining their health, the Treasury Department is pressing forward with a highly controversial program to help finance purchases of toxic assets that were at the heart of the nation's plunge into economic chaos last year. Source: L.A. Times - Business | 15 Jul 2009 | 7:00 am 'Harry Potter' ready to reset box-office records, pre-release data show 'Half-Blood Prince' appears poised to beat 'Transformers: Revenge of the Fallen' for the best Wednesday opening. And by Sunday it could break another record. Remember those records that "Transformers: Revenge of the Fallen" set during its first week at the box office last month? In a few days they could be ancient history. Source: L.A. Times - Business | 15 Jul 2009 | 7:00 am Moody's drops California's credit grade below A, may cut more The rating firm warns that the risk is rising that the state could have trouble paying its bondholders if the budget stalemate in Sacramento doesn't end soon. Two out of three major bond-rating firms now agree: California's credit grade should begin with a B -- a dismal comment on the state's finances. Source: L.A. Times - Business | 15 Jul 2009 | 7:00 am Organ donors run risk of being denied health insurance By not making clear the financial risk of organ donation, insurers put donors in danger of losing affordable coverage and discourage potential donors from helping someone in need. Eight years ago, Los Angeles resident Patricia Abdullah decided to donate a kidney to an acquaintance. She calls it one of the proudest moments of her life. Source: L.A. Times - Business | 15 Jul 2009 | 7:00 am Goldman Sachs' massive profit creates a stir The firm's $3.4 billion in quarterly earnings feed concerns that some banks benefited unduly from U.S. bailouts. Some say, however, that the results come thanks to smart moves and a market rebound. Reporting from Washington and New York Jim Puzzanghera -- Burnishing its reputation as Wall Street's premier banking firm, Goldman Sachs Group reported a record quarterly profit that topped expectations and underscored the speed with which the firm has rebounded from last year's financial crisis. Source: L.A. Times - Business | 15 Jul 2009 | 7:00 am Intel trumps forecasts, bodes well for PC sector SAN FRANCISCO (Reuters) - Intel Corp's quarterly results and outlook blew past Wall Street forecasts on better-than-expected consumer demand for PCs, especially in Asia, setting an auspicious tone for the technology sector. Source: Reuters: Business News | 15 Jul 2009 | 6:32 am Cut the cost of childcare this summer The summer holidays are approaching so act now to reduce the cost of looking after your children. Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 15 Jul 2009 | 6:17 am Shares for the summer Investors should benefit if as expected more Britons choose to spend their summer holidays at home this year. Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 15 Jul 2009 | 6:15 am Currency: Dollar climbs over US64c The New Zealand dollar rose today as investors regained their appetite for risk. The NZ dollar was at US64.07c at 5pm today, up from US63.36c at 5pm yesterday. Against the Australian currency, the NZ dollar was little changed... Source: New Zealand Herald - Business | 15 Jul 2009 | 6:08 am NZ stocks: Market rises slightly The New Zealand sharemarket posted gains today but they were modest compared to the Australian market. Brokers said the local market is directionless ahead of the June 30 balance date reporting season. The US corporate earnings... Source: New Zealand Herald - Business | 15 Jul 2009 | 6:05 am BofA said to court ex-Merrill bankers: report (Reuters) - Bank of America Corp is mounting a campaign to rehire several of the more than three dozen senior Merrill Lynch & Co investment bankers who quit after the firms merged, Bloomberg reported, citing people familiar with the efforts. Source: Reuters: Business News | 15 Jul 2009 | 5:45 am U.S. mulls temporary loan for CIT: source WASHINGTON/NEW YORK (Reuters) - U.S. officials are considering giving CIT Group Inc a temporary loan as part of an aid package to help the lender avoid collapse, a source familiar with regulators' thinking said on Tuesday. Source: Reuters: Business News | 15 Jul 2009 | 5:23 am Calpers sues over ratings of securities: report (Reuters) - Calpers, the biggest U.S. public pension fund, has filed a suit in a California state court in connection with $1 billion in losses that it says were caused by inaccurate credit ratings from the three leading ratings agencies, The New York Times reported. Source: Reuters: Business News | 15 Jul 2009 | 5:19 am NZ Avocado oil company in receivership A holding company for New Zealand avocado oil company Olivado has gone into receivership. The holding company went into receivership yesterday, after shareholders had been unsuccessful in securing new finance to continue, Anthony... Source: New Zealand Herald - Business | 15 Jul 2009 | 4:54 am U.S. mulls temporary loan for CIT: source (Reuters) Reuters - U.S. officials are considering giving CIT Group Inc a temporary loan as part of an aid package to help the lender avoid collapse, a source familiar with regulators' thinking said on Tuesday. Source: Yahoo! News: Business | 15 Jul 2009 | 4:44 am Charles Schwab's Big Chance CHUCK SCHWAB WANTS to profit from Wall Street's misery. Taking advantage of the turmoil and confusion at many remaining brokerage firms, not to mention the anger of their clients, his firm is cutting prices, reducing minimum investments, and rolling out new products aimed squarely at luring customers—for what he believes will be a radically different investment environment over the next few years. It's also putting more resources behind some of its proprietary mutual funds. Schwab, chairman of the namesake financial-services firm he founded in 1971, expects a prolonged period of low returns, potentially higher inflation, more lucrative overseas markets, and substantial competition for funds from expanded government borrowing, he tells Barron's. Charles Schwab the firm is aiming to turn this to its gain by offering solid products at good prices. In a striking example of its approach, Schwab (SCHW) in May cut the expense ratio of its Schwab S&P 500 Index (SWPIX) fund to 0.09%, less than cost-conscious Vanguard's hugely successful Vanguard 500 Index Fund (VFINX), which carries an expense ratio of 0.15%. At the same time, Schwab cut the minimum amount required to invest in the fund to just $100, compared with Vanguard's $3,000 minimum. It was "a call to action to get back into the market" for individual and institutional investors, says Randy Merk, Schwab's president of investment-management services. He adds: "We've seen a nice little pop. We've seen exactly what we're hoping to see. We've seen transfers from Vanguard and Fidelity based on price and minimum investment." (Spokesmen for Vanguard and Fidelity said their businesses are in good shape.) As part of this push to draw in more clients, Schwab is also seeking Securities and Exchange Commission approval to roll out its own family of exchange-traded funds. The latest moves complement a strategy that already seems to be working. In 2008 -- when many money managers were struggling to keep funds in house -- Schwab, with its many money-market funds, took in $113 billion (through funds, brokerage accounts and pension and retirement products), or more than Citigroup, Morgan Stanley, Merrill Lynch, E*Trade and TD Ameritrade combined. It now warehouses a total of $1.1 trillion across all of its businesses, and is the country's 13th-largest fund complex, with $242 billion in assets. Founder Schwab, 71, and new Chief Executive Officer Walt Bettinger believe the firm's assets will grow at a rate of 8% to 10% per year, based on recent growth and the firm's positioning. TODAY, SCHWAB IS COMPRISED of a brokerage unit (called "investor services") that accounted for 21% of revenue in 2008. Asset-management and administration, driven by Schwab's institutional-services unit, accounted for 46% of revenue. Then there's Schwab's bank, which holds excess cash from certain brokerage-client accounts and also provides mortgages and home-equity loans. Net interest revenue brought in another 32% of revenue last year. In addition to its own mutual funds, Schwab has an extensive fund platform of outside funds. The Mutual Fund Marketplace, launched in 1984, has $311 billion in 14,533 available funds. OneSource, launched in 1992, offers funds without transaction fees. Layer on the advice -- the Schwab Center for Financial Research screens funds quarterly—and you can see why the platforms are so popular. At the center of the Schwab business are independent financial advisors, many of whom quit their jobs at wirehouses to hang up their own shingle. They're about 40% of Schwab's business and key consumers of Schwab funds -- particularly OneSource, its mutual-fund supermarket that has no transaction fees. Of the $113 billion in net new assets for 2008, independent advisors accounted for more than half. Low-cost proprietary funds clearly play to that constituency. Says Peter Bourbeau, a portfolio manager at ClearBridge Advisors, a unit of Legg Mason: "There's a roughly $2 trillion opportunity in the advisor channel, and they have 25% of the market -- double the nearest competitor." Schwab uses the a "high-touch" approach with this vital clientele. For example, it regularly holds splashy "Impact" conferences each year to bring advisors and fund companies together. They upped the hand-holding this year with the market downturn, producing 400 events for advisors, up by a third from 2008. One representative conference in California featured: quantitative fund-manager and investment theorist Rob Arnott, who talked about the viability of diversification; U.S. Global Funds chief Frank Holmes, who addressed global markets and the boom in commodities; and Santa Clara University (Calif.) financial-behaviorist Meir Statman, who talked about helping clients feel comfortable about getting back into the market. "It is very high-end," says Holmes. Soon to come will be proprietary ETFs. Schwab, by its own estimate, already handles about 22% of all retail-ETF flows, and about 10% of all outstanding ETFs are held in custody at Schwab. Yet the ETF business has put some pressure on Schwab: If a client moves from an actively managed mutual fund on One Source to an ETF, the firm loses revenue on fees that fund companies pay to Schwab to be on its platforms. And if that same client dumps a Schwab fund for an ETF, Schwab loses the investment-management fee itself. Thus Schwab has sought permission to offer ETFs, as a response to the popularity of these cheap, tax-efficient, and hedging friendly products. Merk won't say much, but Schwab will offer an ETF that mirrors the Dow Jones U.S. Total Stock Market Index and 10 other ETFs. The funds will undoubtedly be low-cost, passive products at the outset (there are, after all, only two ETFs tracking the Standard & Poor's 500, versus 140 open-end mutual funds), although Schwab wants to offer actively managed funds too. Schwab already offers a popular, highly rated target-date fund that could be one of the first consumers. Says Schwab: "We are seeing ETFs as a major beginning for us." ANOTHER BIG SCHWAB constituency is made up of the retail investors it was originally created to serve. There are certainly more of them with the company these days, since many felt they'd been abandoned by their wirehouse brokers during the downturn. The number of new brokerage accounts at Schwab rose 10% last year. But a growing group is made up of those laid off during the savage bear market, and who rolled their pensions over to Schwab. Some 15% of the households that came into retail last year originally came through Schwab's corporate-and retirement-services operation. These clients are a different breed -- "more buy-and-hold investors, as opposed to traders," says Scott Burns, director of ETF Analysis at Morningstar. Although they're unlikely to trade, Schwab could still collect the investment-management fee from them. The firm's executives believe that investors will continue to need more, not less, advice from professionals -- and see Schwab's role as twofold: 1) Reassure investors that the deck isn't stacked against them; and 2) Reiterate the need to own equities. Says Jeff Mortimer, chief investment officer at Schwab's investment-management division: "People are still underinvested, and have not enjoyed the ride back. Round One is behind you. Now what do they do?" There's only "a small trickle away from safety today," says Mortimer. But money markets are yielding zero, and investors ought to complain not about fees but "that Nasdaq went up 50% without them." For longer-term investors, he says, if the markets simply return to old highs, they'd have doubled their money. "The only way to be right," Mortimer continues, "is to stop being wrong" -- and to buy equities Aside from independent advisors and retail investors, there's a Schwab asset that generally gets little mention: Charles Schwab Bank, which accounts for a third of revenues and makes mortgage and home equity loans. Delinquencies are a scant 0.05% of outstanding loans, substantially less than the 6.9% national average. Schwab has marked its Alt-A mortgage backed securities to market. If the value of these securities rises, that could fatten the earnings stream down the road. In the meantime, Schwab is nicely capitalized. To be sure, Schwab hasn't totally dodged the credit crisis. It's still in litigation with investors over the disastrous performance of its Schwab YieldPlus fund. Moreover, in theory, the growing proprietary-fund family could put Schwab on a collision course with fund companies and advisors, although Schwab through the years has adeptly served any number of constituencies. Then, too, the market could head south for a sustained period, meaning that the fee cuts will do little to turn investors from money funds. The latter are an expensive proposition for now: With rates at lows, Schwab has been waiving fees on the money funds. Meanwhile, Fidelity and Vanguard are no slouches. Fidelity recently hired Charles Goldman, a top Schwab executive skilled at marketing to independent advisors. (Coincidentally, growth in the independent-advisor space was showing signs of slowing down this year, although Schwab sees it as temporary.) THE VERY EARLY RETURNS on the effect of Schwab's price-cutting should be more evident on July 16, when it reports quarterly earnings. Wall Street expects it to earn 18 cents a share on $1 billion in revenue. Analysts on average expect Schwab's 2009 earnings to fall to 75 cents a share, on revenues of $4.3 billion from $1.06 a share last year on revenues of $5.2 billion. The decline is due to the generally poor markets and low yields. Key variables for this year include equity-market values and the level of short-term interest rates. But some portfolio managers think it can do better than that. "The consensus sees 75 cents in '09 and $1 in 2010—we think that's understated," says Paul Rasplicka, who manages AIM Capital Development Fund (ACDAX) and AIM Dynamics Fund (IDYAX). In fact, he thinks earnings will beat expectations by at least 20%. And Rasplicka likes the stock. At 16.50 last week, the shares are trading at 17 times earnings, and give a total market cap of $19 billion. Schwab, he says, ought to trade at a multiple of 20, which would put the stock in the low 20s—at least 20% more than last week's price. Other investors have mentioned Schwab as an excellent way to play Americans' new-found thrift: As savings rates rise, the price-cutting firm, with its raft of money-market funds and other alternatives, should be a major beneficiary. "What's unrecognized about the story? The sustainability of the asset-gathering mechanism they have in place," says Bourbeau of ClearBridge. That may not go unrecognized much longer. The Bottom Line Discounter and online-broker Charles Schwab is well-positioned to benefit from the confusion within Wall Street's broker community. And the stock looks pretty cheap too. Schwab: Lower Returns Ahead Over the course of his interview with Barron's Thursday, Charles Schwab spoke mostly about his vision for his company, but he also offered his views on the economy and the markets. Here are the highlights: - On investor expectations: "We are shifting much more to a managed economy...[with] significant competition for the investment dollar from the government. Instead of 20% of gross domestic product, government will be 30% to 33%. You have to think in terms of your investment expectations that returns will be substantially less here in the U.S...so you don't get disappointed." - On equity-market returns: "8% to 10% is not realistic today. It probably won't return for at least four to five years. For the next four to five years, you have to be thinking, on a real basis, of more like 4% to 5%." - On inflation: "We're building a vast reservoir of potential inflation. We hope it's going to be low, but there's definitely an argument that it's going to be substantially higher, closer to 10% per annum, a couple of years out." - On international investing: "One benefit is it gives you diversification away from our currency. We are expanding our money supply at a very quick rate. If you'd asked me 20 years ago, I'd say you needed 15% in international investments. I'd say now it's closer to 40%, in large countries, and a component in emerging markets and fixed income. There are better opportunities for growth in some of these smaller countries." - On other types of assets: "The degree of uncertainty is quite high, and the way I deal with it is to make sure I have broad diversification. On bonds, it depends. I never think about that rule that your bond portfolio should equal your age -- but that's a nice rule of thumb. In other asset classes, in many respects, it's better to invest in companies that are more commodity-based. I'm not a big commodity speculator, as that's much more volatile, so I use companies like ExxonMobil (XOM) rather than oil futures. The real winner is going to be the government. So for a chance to invest in your government, you can buy some of those five-year Treasuries." 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 | 15 Jul 2009 | 4:00 am 3 Stocks Recommended by Renegades (Screens) With apologies to author Dan Brown, Wall Street’s earnings estimates contain a Da Vinci Code of their own. Investors rightly pay attention to the size of the numbers; the higher the expected profit, the more valuable the shares, all else held equal. But other clues are hidden in the shape and movement of the numbers. Clue 1: A recently raised estimate. When analysts raise their earnings forecasts for a company, its shares tend to jump right away. But they also tend to gradually outperform for months afterward, an effect documented 20 years ago in a study by Scott Stickel of the University of Pennsylvania, and in numerous studies since. (It’s similar to a phenomenon called post-earnings announcement drift, first explained in a 1968 study by professors Ray Ball and Philip Brown. Shares of companies that beat earnings forecasts gradually outperform, too.) Clue 2: Tightly clustered estimates. What we call a company’s earnings estimate is usually an average of many estimates. Investors call that a consensus, as if to suggest agreement, but the numbers sometimes show anything but agreement. A consensus for earnings of $1.50 a share might contain individual estimates that are tightly clustered between $1.40 and $1.60, or ones that are wildly scattered from 95 cents to $2.05. Anna Scherbina of the University of California at Davis showed in a 2002 study that tight earnings consensuses tend to predict better stock returns than scattered ones. It’s not entirely clear why, but one theory holds that companies with good news tend to communicate more with investors and analysts, leading to greater agreement about their future profits. Clue 3: A breakaway fan. Analysts, being humans, are more comfortable in groups than outside of them. Since analysts are paid in part according to the accuracy of their forecasts compared with other analysts, ones who stray away from the herd take risks, and had better have good reasons. Often, they do. Professors Christi Gleason and Charles Lee published a study of the matter in 2003. They compared estimate revisions that move toward the consensus with ones that move away from it, regardless of the size of the change. For example, within a $1.50 consensus, an estimate change from $1.40 to $1.49 merely falls in line with the consensus, but a change from $1.51 to $1.53, while smaller, strays from the herd. Straying estimates are more powerful predictors of stock performance, the two professors found. Stocks with straying estimate increases went on to outperform ones with straying decreases by a whopping 15 percentage points a year. A follow-up study two years later helped explain why: Straying estimate revisions, it found, tend to be more accurate than herding ones about future earnings. Put all the clues together and investors should perhaps take an interest in stocks with rising, tightly clustered consensuses that contain at least one estimate breaking away from the consensus to the upside. The first two attributes are easy to search for using stock screening programs. (The degree of clustering, in the language of these programs, is called standard deviation of estimates.) The third takes some digging through individual estimates that comprise consensuses, which are only available by paid subscription to research services from companies like Thomson Reuters. I recently searched current-quarter consensuses for S&P 500 companies and found two dozen examples of tightly clustered consensuses that increased this month, but only three that contained estimates that strayed from the herd to the upside. They’re listed below. General Mills (GIS), which makes packaged foods like breakfast cereals and soups, is growing its sales through the current recession, as consumers eat more meals at home. Constellation Brands (STZ), whose booze business depends largely on restaurant and bar traffic, is seeing sales slip, but is still managing to increase profit. Waters (WAT) makes scientific equipment for use in drug development, food and water testing and more, and has beaten earnings estimates in each of its past four quarters.
Company	Ticker	Next Quarterly EPS Announcement	Consensus	Revised by...	From - To	Revision Date
General Mills	GIS	September, most likely	$1.02	Robert Moskow Credit Suisse	$1.01 - $1.06	July 6
Constellation Brands	STZ	September, most likely	$0.41	Timothy Ramey D.A. Davidson & Co.	$0.41 - $0.43	July 2
Waters	WAT	July 28	$0.79	Ross Muken Deutsche Bank	$0.83 - $0.84	July 10

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Tax Breaks for Losses on Rental Property Sales (The Tax Guy)

In this tough economy, you may own a piece of rental real estate that you now need to sell -- maybe for a loss. While loss sales were pretty unusual a few years ago, they unfortunately happen all the time now. But it isn't all bad news. Losses you incur from unloading investment properties can receive very favorable tax treatment. Here’s what you need to know.

Do You Actually Have a Tax Loss?

A tax loss occurs when you sell your property for less than its tax basis -- which generally equals the price you originally paid, plus the cost of improvements over the years (it does not include any repairs you took tax deductions for along the way) minus all the depreciation write-offs claimed during your ownership. So if you’ve owned the property for a long time, its tax basis may be a lot lower than you think as a result of the depreciation factor. Therefore, you might trigger a tax gain if you sell even though it may “feel” like a loss because you sold at such a low price. (Sadly, though, the IRS doesn’t care about your feelings.)

The tax basis of a property that you sell might also be a lot lower if you acquired it in exchange for another property in a tax-deferred “Section 1031" swap (also called a like-kind exchange). In this case, your initial tax basis in the property was reduced by the amount of gain that you deferred in the Section 1031 exchange. So if you deferred a large gain, the basis reduction was a large number, and selling the property could actually trigger a tax gain instead of the tax loss you might have expected.

Bottom Line: Make sure you know what your property’s tax basis really is before selling. You don’t want to be mistaken and trigger a tax gain without knowing about it ahead of time.

Tax Savings When You Have a Loss

If you have a tax loss on a property you've owned for over a year, then you have a “Section 1231" loss. This is the best kind of loss you can have because you can deduct it against any and all types of income (salary, interest, dividends, capital gains, alimony received, self-employment income, whatever). If your Section 1231 loss is large enough to exceed your 2009 taxable income (calculated before the loss), it may even create a net operating loss (NOL).

NOLs are handy because you can carry the loss back for two years and recover some or all of the taxes you paid back in 2007 and/or 2008. Alternatively, you can choose to carry the NOL forward for up to 20 years, to 2010 and beyond, and use it to offset income that might be taxed at higher rates (possibly much higher rates) in those years. There’s also a possibility that Congress might extend a temporary break that allowed many taxpayers to carry back their 2008 NOLs for up to five years (instead of the usual two). If that happens, you could carry back a 2009 NOL to as early as 2004.

Don't Forget to Deduct Passive Losses

As a real estate owner, you’re probably aware of the dreaded passive loss rules. If they applied to you in previous years, some or all of your rental real estate losses may have been deferred (suspended) for tax purposes. You generally cannot deduct those suspended losses until you either have positive taxable income from your rental real estate activities or until you sell the property (or properties) that generated the losses in the first place. So if you now sell a property that generated suspended passive losses, those losses might suddenly become deductible on your 2009 Form 1040. And if those suddenly deductible losses are big enough, you might create or increase a 2009 NOL that you can then carry back to prior years or forward to future years with tax-saving results.

The rules for suspended passive losses can be tricky if you own multiple rental properties. If you do, consult your tax advisor to find out whether selling a particular property will allow you to deduct some suspended passive losses.

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.

10 Tips for the Traveling Pet Owner (Deal of the Day)

Travel has gone to the dogs.

Whether the recession has steered vacationers to less exotic locations or simply strengthened their bonds to their pets, fewer people are leaving their animals at home. Over the past three years, 14% of Americans have traveled with a pet, according to the U.S. Travel Association, a trade group that monitors travel trends.

In the air, demand for the few airline spots has grown so high that a new pets-only airline called Pet Airways, began service Tuesday to five cities. The airline’s weekly flights, which transport as many as 50 animals for one-way fares of $149 and up, were sold out for the first four months before service began, the company said in media reports.

The surge in pet travel does not necessarily run counter to the idea that Americans are spending less. Bringing your cat or dog along on a trip can be just as expensive as leaving them home. Here’s how to save money and come out ahead in either situation:

Traveling With Your Pet

Flying or driving are usually your only options, unless you’re traveling with a service animal (a guide dog, for example). Buses, trains and cruises do not typically allow pets on board. These tips can help cut costs in the air and at your destination:

Book ASAP
To limit costs and your pet’s discomfort, book a direct, nonstop flight, says Kim Saunders, the vice president of shelter outreach for PetFinder.com, which connects consumers with adoptable animals and recently rated airlines for pet travel. Airlines allow just a few pets on board per flight, so you’ll need to book early to reserve a spot. If you miss out on Delta’s (DAL) two spots tied to coach fares, for example, you’ll have to fly business or first class (there’s another spot available in each) or pick a different flight.

Check safety records
If you travel with your pet in cargo, make sure that the airline has a record of few problems and deaths, Saunders says. The Bureau of Transportation Statistics tracks incidents by airline on a monthly basis (see the latest data here). You can also check reports at tracking site PetFlight.com.

Compare fares
Fees vary by airline and how the pet travels (see the chart below). Animals weighing more than 20 pounds and more exotic animals like snakes and birds usually must travel in the cargo hold as checked baggage -- a pricier option. “If it travels near you, Pet Airways is a good option for a larger animal that would otherwise be stuck in the cargo hold,” says Adam Goldfarb, the director of the Pets at Risk program for The Humane Society of the United States. Fares on the pets-only airline start at $149 each way for service between New York, Chicago, Denver, Los Angeles and Washington, D.C.

Pet Fees for Domestic Travel (One Way) AirlineIn-CabinChecked Baggage/Cargo * Data from individual airlines. AirTran $69Not permitted. American$100$150 Continental $125$149 and up, based on weight of the animal. Delta$150$275 JetBlue $100Not permitted. Northwest$150$275 Southwest $75Not permitted. United$125 to $250$250 US Airways $100Not permitted on most flights.

Get a clean bill of health
Schedule a veterinary exam shortly before your trip. Most airlines require a health certificate and proof of vaccinations issued no more than 10 days before your flight, says Paul Mann, the founder of national pet service Fetch! Pet Care.

Pick up airline miles
JetBlue adds frequent-flier miles for pets traveling in the cabin to their human companion’s account, and Continental offers them for animals riding in the cargo hold.

Look for fee-free hotels
There’s no need to pay extra to keep your pet with you once you arrive, Mann says. Some properties charge a security deposit, but chains including Best Western allow most pets to stay for free. Kimpton Hotels throws in freebies like fresh dog treats baked on site.

Leaving Your Pet at Home

The American Pet Supply Association projects that spending on pet-care services such as boarding and day care could climb 6% to $3.4 billion in 2009. Here’s how to get the most for your money:

Start with a sitter
Kennels and other boarding facilities can offer social dogs a great vacation, but most pets will be happier staying in familiar surroundings, Goldfarb says. Leaving pets at home with a sitter can put them more at ease in your absence and is more economical, too. For example, Petaholics, a New York-based pet-care firm, offers both sitter and kennel services. The company charges $40 a night to board a cat, but a 30-minute daily visit from a sitter costs half that, and includes feeding, litter box maintenance and cat playtime. (The sitter also picks up the mail, waters plants and takes out the trash.)

Check references
Choose a caregiver that’s insured and has a good reputation, Mann says. Ask other pet owners and your veterinarian for recommendations. Also schedule a visit -- in-home for sitters, on-site for boarders -- before traveling, so you can make sure your pet will be safe and comfortable.

Break down charges
Whether you opt for a kennel or a sitter, have the company spell out what’s included in the rate, Saunders says. You may be able to negotiate a lower rate if you forego extras like mail pickup or daily grooming. Negotiating can also clarify which option best suits your needs, she says. A kennel that includes a full day of activities might be a better deal for an active dog than a sitter who charges extra for taking hour-long walks and playtimes instead of half-hour ones.

Dig for discounts
Sitters and boarding facilities offer reduced rates. AAA members save 10% on the services at Fetch! Pet Care. Beverly’s Pet Campus outside Indianapolis offers a print-out coupon good for a discount of $4 per night (an 18% discount) when you book a stay of five nights or longer.

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.

Ex-GM CEO Wagoner retires with $8.6 million

Franklin drops out of group eyeing AIG unit: source

Lawmaker to back Obama student loan shake-up (Reuters)

Indian state oil company tipped as Shell NZ buyer

Rudd speaks out on Rio Tinto spy case

Productivity must improve, Key tells business

2degrees chief exec steps down

Intel trumps forecasts, bodes well for PC sector (Reuters)

Reuters - Intel Corp's quarterly results and outlook blew past Wall Street forecasts on better-than-expected consumer demand for PCs, especially in Asia, setting an auspicious tone for the technology sector.

Bankers set for record bonuses on back of Goldman Sachs profits

Squatters move into Billionaires’ Row as concern grows over homes left empty

Lessons in salvaging a battered reputation

There are still 10,000 reasons for graduates to get out of bed

More than money at risk for Goldman Sachs bosses

Goldman Sachs money machine back in action

The Dow Jones industrials' moves since Lehman fall (AP)

Intel signals revival in chip demand

Write-Offs: 07.14.09

$$$ No One At Goldman Sachs Celebrating The W Tonight [Cityfile]

$$$ The SEC to protect investors by...hiring employees? [The Deal]

$$$ How to Write An MBA Admissions Essay [BW]

$$$ How Bernie Could Potential Get Killed In The Big House [via]

House introduces healthcare bill

CIT- The Synthetic CDO World's Hail Mary Pass

The synthetic CDO naysayers are gearing up for yet another rally in the wake of CIT's rapid fall from grace. Assuming CIT does default, it would impact 66% of the 1,053 currently outstanding synthetic CDOs in Europe alone. There is no doubt the government will be tempted to use CIT as a line in the sand to show everybody that it still has a pair and can let somebody other than Lehman fail. But if the government provides a crutch and CIT's 5y CDS spread does the unthinkable by tightening to the point where it trades on a running basis instead of upfront, it would be simply priceless to hear the reaction from the synthetic CDO firing squad when banks report write ups.

European CDOs would suffer widespread hit from CIT [Reuters]

Presented By:

NZX opens mixed, majors edge up

Solvay whittles bidders down to two

Planet Money Challenge: Five Cents or Less

How often do you use these? Frederic Poirot/Flickr

 

We're working on a story about small change here at Planet Money, and we need your help. We want to know how many things you can buy, today, in the U.S. for five cents or less. That means total cost equal to or under $0.05. Send us a picture (that shows the price) and a story (if you like) to planetmoney@npr.org or add them to our Flickr pool or Facebook group.

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How the major stock indexes fared on Tuesday (AP)

Collender Sees $1.8 Trillion U.S. Deficit by End of 2009

NPD's Cohen Says Wal-Mart, Target, Saks Poised to Gain

Cody Willard: Goldman Sachs Is A Ponzi Scheme, Should Be Punished Accordingly

Following up on yesterday's call to fix the economy by prosecuting Lloyd Blankfein, Willard continues:

Yeah, when the tens of billions of dollars of state money that could have helped fix health care wasn't enough, Lloyd Blankfein, the CEO of Goldman, just kept right on denying that he and his firms were insolvent because they'd gambled at casinos without bothering to make sure the house could actually pay off the bets being offered, and he went out and convinced Buffett and other investors that since the state was going to cover any losses that the firm might have at their own casino anyway, he might as well put in a little bit of his money to catch some upside.

Why doesn't someone send someone to prison for this stuff? It's clearly illegal, no?

Goldman Sachs vs America - heads I win, tails you lose [The Cody Word]

The Ultimate Insider Trading Scheme

It looks like the longest running insider trading scheme may be in jeopardy. Now that government agencies are major stakeholders in a variety of companies and the tidal wave of regulation is getting closer to the shore, the time has finally come to consider a prohibition on lawmakers using non-public information (learned on-the-job) for investment decisions. Accumulating an impressive portfolio of battered banks and auto makers has led at least some lawmakers to question the ability of politicians to avoid doing something unethical.

Congress and the federal government are now so enmeshed in the operations of our financial markets that the potential for abuse by members of Congress, congressional staff and federal employees is staggering," Rep. Louise Slaughter (D-N.Y.) said at a hearing of the oversight and investigations subcommittee of the House Committee on Financial Services.

No stranger to the appearance of impropriety themselves, SEC Inspector General David Kotz remarked

The SEC had essentially no compliance system in place to ensure that its own employees, with tremendous amounts of nonpublic information at their disposal, did not engage in insider trading themselves

A 2004 study revealed senators made approximately 25% more on investments than the average joe. Assuming the legislation passes and lawmakers have to take their trading ethics pledge, that number might get chopped down to 20%.

Congress Mulls Trading Curbs for Its Own [Washington Post]

Who Wants To Be A (Baked) CEO?

Cannabis Science, a new company that is trying to develop a pot cough drop to treat hypertension, has fired its CEO. Obviously we're throwing our support to Jimmy Cayne for the job, but on the off-chance he's not feeling up to running a start-up, even with the perks that come with, one of you should apply.

Cannabis Science 8-K [PDF]

Northern Trust Raised to `Buy' at Bank of America

Lloyd Blankfein (Allegedly) Called Charlie Gasparino A 'Thug.' What Now?

As mentioned a few mins ago, Charlie Gasparino tells us that Lloyd Blankfein described the CNBC on-air editor as a "thug" recently. It apparently happened at some sort of cocktail type party, at which LB was presumably drinking, and let's be honest: the Goldman CEO could've said a lot worse. Not because it's necessarily true that the Dealbreaker mascot is a "thug," or a "jabroni" or an "intard" (we were making assumptions there about the other stuff LB might've called CG) but because Blanks probably doesn't like some of the stuff Chazza has written about him and his bank. And, getting real for two, let's think about the stuff some of you have probably said or thought about CG. Maybe even mention it below. Right about now "thug" sounds like a compliment, doesn't it? But the point is, Charlie feels unjustly maligned. "I'm a sweetheart of a guy!" he told us in response to the diss, chalking it up to Goldman, like everyone else, being "obsessed" with him.

So, what we're thinking, is that this should be settled, street style. It could be in a ring, which you wouldn't have to ask the almost-Golden Gloves participant twice to get into (we could get Lloyd to do it under the guise of charity, and in an attempt to ingratiate Goldman to the people). It could be a 50-yard sprint. It could be a Top Chef-like cook off. It could be a shoot-out, with actual guns. We're not set anything, and you probably have some ideas of your own that are welcome at this time. The point is, this needs to happen (you know CNBC would air it, and Gasa could probably make some calls and have it shot live from Vegas, what with his contacts).

Photo Credit: Gasparino being declared the victor of his last battle.

SEC Moves To Stop Credit Rating 'Shopping'

SEC Chairman Mary Schapiro says her agency is taking steps to strengthen "the integrity of the credit ratings process." In testimony before the House Financial Services subcommittee today, Schapiro said she has designated a special group of staff to "conduct routine, special and cause examinations of the ratings agencies to review their activities and NRSRO compliance."

Schapiro also said she is considering possible new regulations to prevent debt issuers from "shopping" for the best credit rating. One approach could be requiring companies that issue debt to release preliminary ratings before a firm is hired to give a final ranking.

Credit ratings agencies like Standard and Poors, Moody's and Fitch have been criticized for assigning mortgage backed securities and other derivatives their top triple-A ratings. To hear more about what went wrong with these rating agencies, listen to this story from David Kestenbaum and Alex Blumberg.

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The Real Reason Jefferies Loves UBS Employees

It turns out the little healthcare banking scuffle between UBS and Jefferies wasn't the first time these two titans have clashed over some form of theft. UBS confirmed yesterday that it charged three former members of its algorithmic trading group with stealing 25,000 lines of source code and taking the trade secrets to Jefferies, a story first reported by Dealbreaker. The sticky-fingered trio are now integrated into Jefferies' global quantitative strategies trading unit and, according to their lawyer, being tormented by their former employer for running away with code that they pinky swear isn't being used.

UBS has twice pulled out of settlement talks and is hell bent on torturing my clients rather than finding out if the source code is being used.

Presumably UBS learned their lesson and gave Ben Lorello a full cavity search before letting him walk out the door.

UBS Charges 3 Ex-Employees With Code Theft [Securities Industry News]

Whalen Sees U.S. Realty Prices Falling Through 2010

Telsey Sees `Sluggish' Back-to-School Retail Sales

Charlie Gasparino, Who Goldman Sachs Is 'Obsessed' With, Wants SAC Capital Turned Into A Bank Because Of GS's Second Quarter Profits

Stick with him, the Italian Lassie's making a point. It's like this, see. The way Charlie figures, Goldman Sachs operates in practice, if not in name, like a hedge fund. And there's this hedge fund up in Stamford called SAC, which Chaz has been following since it came up on his Google alert for 'testes and tits.' And so...if Goldman's gonna be a hedge fund that calls itself a bank...SAC should have to do the same. Gaspo got the idea while he was writing his latest column for The Daily Beast, in which he expounds on Goldman Capital Management. It makes a little bit of sense if you think about it.

Anyway, we called Chazpo to hear more about the plan, which he's yet to clear with Steve Cohen but will probably get the go-head for by the end of the week. Catching him on his way to lunch at San Pietro, we wondered if Charlie had taken into account that a public company might not be up to get down with employees being forced to wear dresses against their own will, which could be a dealbreaker for the Royal Bank of SAC. Had Charlie thought about that detail, we asked? Of course he had-- he's a professional after all. "If you're a government regulated bank, I believe that they have to respect all walks of life, including the ones you just specified," Chaz told us. While we had him on the phone, we decided to touch on a sore spot, which was only too palpable in today's column. GS and CG. What's up there? It seemed like there's some tension, specifically with Goldman flack Lucas Van Praag, who you know Charlie has a history with.

"Listen," Gasa told us. "I like Lucas Van Praag, but I don't like him enough to talk to him ten times a day. He emailed me like five times yesterday, yelling at me, sayin' I misrepresented GS. My thing is simply this: if Goldman wants to roll the dice, give up the bank charter. Also, Blankfein told a mutual friend that I'm a 'thug.' You believe that? I'm a sweetheart of a guy! They're obsessed with me over there."

SEC head outlines enforcement, other changes (AP)

AP - House lawmakers voiced approval Tuesday for recent changes at the Securities and Exchange Commission in the wake of the Madoff scandal, though some Republicans chafed at new proposed regulations.

SEC head outlines enforcement, other changes (AP)

AP - House lawmakers voiced approval Tuesday for recent changes at the Securities and Exchange Commission in the wake of the Madoff scandal, though some Republicans chafed at new proposed regulations.

Robinet Says U.S. Should Aid Auto Parts Industry

Has Bernie Madoff Already Started Paying People Off?

Specifically whoever's in charge of his file at the Federal Bureau of Prisons, perhaps? Take a gander at this:

As one of the math whizzes among us just pointed out, it looks like someone has decided that Ponz-Boy is getting out in 130 years, and not the 150 Judge Denny Chin sentenced him to. We're pretty sure he does not have a chance for parole, and even if he did, wouldn't we cross that bridge at a later date, rather than (very) prematurely assuming it's gonna happen? We need a prison expert in the hizzous to tell us what the hell is going on here. Is this a typo? Did the clock start 20 years back on account of a decision by those who decide such things that living under Ruth's freaky ass rules was probably as good as being locked up?

IASB promotes ‘fair value’ rule change

Telsey's Chin Says Online Retailing Is Growing `Phenomenally'

AIG: "The Freedom to Dare"

This pretty amazing AIG commercial is making the rounds at Planet Money. Not sure I'd call it "playing it safe" but we certainly have written lots about AIG!

BONUS: More AIG commercials.

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CarMax wraps placement of $490 million in notes (AP)

Warren Questions Warrants

Just read through the details of the latest report of the Congressional Oversight Panel, chaired by Elizabeth Warren and charged with overseeing the TARP program.

The Panel concludes that tax-payers could lose out on $2.7 billion if the Treasury Department doesn't change how it values those warrants it got when it bailed out the banks.

The warrants were a way to let taxpayers share in the gains if the bank's stock price improves. The banks, however, are now eager to get out of TARP so Treasury has been selling the warrants back to them.

By the panel's calculations, the Treasury has been undercharging for them by as much as 66 percent.

The report is fairly technical, but here's a quick summary: The warrants give the government the option to buy some of the bank's stock at a fixed price for some period of time. If that price is say $10 and the stock price goes up to $20, the government can use the warrant to buy the stock at $10 and sell it for $20 making a profit.

Figuring out what a warrant is worth is tricky though, because its value depends on what happens to the price of the stock in the future, and the extent to which it bounces around (known as volatility.) The standard method for pricing one is something called the Black-Scholes formula.

The Congressional Oversight Panel got three Harvard professors to run the numbers. In the case of Old National bank in Evansville, Indiana, the Panel found that the warrants should be worth something like $2.1 million. Instead Treasury sold them back to the bank for just $1.2 million.

Why such a difference? One answer is that the models are somewhat subjective. But the Panel takes issue with the whole procedure. The way the warrant price is determined now, the banks and Treasury each come up with their own estimate and negotiate a compromise.

The Panel says a more transparent and fair approach would be to let the market decide, by auctioning the warrant:

...it is hard to believe that an auction with a proper reserve value would ever achieve a lower valuation than a negotiation.

Ultimately, open market transactions are the only way to determine true "fair market value." In his testimony before the Panel on June 24, 2009, Assistant Secretary Allison explained this in relation to the toxic assets on bank balance sheets: "We can have our theories, [but] in the last analysis that's why you have financial markets. You have to have liquid interchanges and then the truth will come out as to what the assets are actually worth."

So far only a small fraction (the Panel says less than 1%) of the warrants have been repurchased so there is still time for Treasury to change its approach.

Not all panel members agreed with all the conclusions of the report. Richared Neiman, Superintendent of Banks for the State of New York, writes that "reasonable minds can disagree" about the price of the warrants.

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10 Most Profitable Sexual Enhancers

Ah, sexual enhancers. If you listened to every spammer who ever sent an unwanted email into your inbox, you’d be drowning in the things. Cock rings, Levitra, herbal supplements…the possibilities are endless.

A select few of these items truly do rake in money for their manufacturers. Thanks to spammers, you are probably already familiar with most of them. We decided to research which sexual enhancers are most profitable.

For the purposes of this article, sexual enhancer is defined as a product that improves the sexual experience. Because statistics in this niche either do not exist or are prohibitively expensive, we researched this article independently. We based the most profitable sexual enhancers on a combination of markup and sales volume. Our evidence comes from surveying sex shops and conducting online research. This list of 10 is the result.

Viagra
(Sildenafil)

First released in 1998, Pfizer’s Viagra was the first erectile dysfunction drug to hit the market. Researchers unexpectedly discovered the drug’s true benefits while using it on angina patients. It did little for the heart condition, but did have one prominent side effect—erections. So Pfizer changed gears, and the worldwide market rose to the occasion.

More than a decade later, the Blue Pill is still going strong. Pfizer reported $1.9 billion in sales revenues last year alone. Generic Viagra won’t be available until 2011, so the drug’s trajectory remains stiff.

Note: Viagra, as well as the other ED drugs mentioned below, are licensed and approved for erectile dysfunction. ED is a medical condition requiring multiple exams, diagnostic studies, and long-term care. However, drug companies have marketed the drug for enhancement purposes, and the market has picked them up as such. We don’t want to encourage pill-popping. Yet we also can’t ignore market forces, so we included these drugs on our list as sexual enhancers.

Cialis
(Lilly)

Cialis is like Viagra…on Viagra. Eli Lilly’s little pill, unlike its shorter-lived forebear, lasts up to 36 hours. Its patent also has a longer life, so Lilly will be enjoying the benefits of its “Weekend Pill” for some time to come. 2008 sales amounted to $1.44 billion.

Lube

People will pay more than $10/bottle for a bottle of personal lubricant. Apparently, reducing friction during sexual activity is that important. The lube market is so lucrative that manufacturers now develop the product in niches. Warming lube, scented, thick, thin, desensitizing, spermicidal—there’s something for everyone.

Most brands of lube come from humble beginnings. K-Y Jelly started as a surgical lubricant. Astroglide, meanwhile, was the result of a chemistry accident.

Chemist Dan Wray, founder and CEO of Astroglide manufacturer BioFilms, was working on a space shuttle’s cooling at Edwards Airforce Base when he discovered Astroglide.

“I was trying to remove the oil from anhydrous ammonia and I ended up with this substance,” he is quoted as saying in this North County Times article. “I gave a pint of it to a co-worker as a gag gift, and when he came back for a refill, I knew I had a product.”

Cock Rings

According to the 2008 Durex Sexual Wellbeing Survey, of men have reported trouble sustaining an erection. Enter the cock ring. This circular device, made of silicon, rubber, or other materials, sits at the base of the penis, where it constricts blood flow. As a result, men can hold erections for longer periods of time. With a cock ring, the erect penis can also become larger and harder.

No wonder cock rings fly off sex shop shelves. Our sources say that single-use cock rings, like the one by Trojan (pictured above), are especially popular. Vibrators mounted on top of the cock rings add extra pleasure. They’re disposable, so newbies can experiment without committing to a higher-priced ring.

The Rabbit

Arguably the bestselling vibrator in the world, the rabbit was popularized by episode 9 of the first series of Sex and the City. The rabbit, a clitoral/anal stimulator mounted on a dildo, penetrates the vagina and tickles the clitoris (or anus) at the same time. The dildo component may rotate, contain plastic pearls, or function at several different vibration intensities. And if Sex and the City wasn’t enough, someone also made a mockumentary about the rabbit.

Levitra
(Bayer)

Bayer’s Levitra is another Viagra-like addition to the ED pack. Unfortunately for Bayer, it doesn’t have Cialis’ half-life, or Bayer’s first-mover advantages. One expert says that the rigidity and “speed of erection” offered by Levitra make it the levitator of choice for some. Still, it only made an estimated $354 million last year, lagging far behind its peers.

The Butterfly

The ancient Greeks used vulvar massage to treat hysteria. Once a patient reached “hysterical paroxysm,” she was cured. The practice continued through the 19th century, when medical professionals decided that mechanizing the manual process might save time and effort. Enter the vibrator, an electric device that allowed women to attain paroxysm in under 10 minutes. (From Slate Magazine.)

The butterfly is one of the most popular modern vibrators on the market. The butterfly itself sits on the clitoris and labia, stimulating both through vibrations. Straps around the thighs or waist hold it in place. You activate it through either an attached control panel or a remote control. Best yet, the vibe fits in your pocket, or underneath your pants.

Herbal enhancer pills

Herbal sexual enhancer pills are sold over-the-counter. They are usually made from a combination of herbal stimulants, amino acids, and/or synthetic hormones. People buy the pills as alternatives to prescription drugs like Viagra. Many boast flashy brand names, like Stiffnights. Common substances in herbal enhancers include:

Yohimbine: Derived from the bark of a tree native to Africa. Stimulates sexual desire and contributes to erections.

Horny Goat Weed: From a forest plant native to Asia and Europe. Is said to cause erections.

Yi Ye Cao: A Chinese herb that stimulates ejaculation.

Tongkat Ali: Southeast Asian herb said to enhance testosterone.

Manufacturers claim that one pill can last up to 2 days. The FDA does not regulate herbal enhancers, so they do carry an element of risk. Nonetheless, these easy solutions have been around for millennia, and consumers show no signs of quitting them.

Supplements

An apple a day may keep the MD away, but a pill a day will give you a Ron Jeremy-sized endowment. Just ask the guys trying to sell you supplements like VigRX and Extenze. They’ll tell you all about how their main event grew 3 inches in four months. Impossible, thinks you? Perhaps. But people still buy the stuff. Which means spammers really do have a primordial notion of supply and demand.

If you really do think your penis will grow by taking supplements, bear in mind that, like herbal sexual enhancers, they’re mostly made from herbs, amino acids, and synthetic hormones. And, Mr. Big, they are not FDA-approved. Take them at your own risk.

The We-Vibe

Sometimes people get famous. Other times, objects grab national attention. Like Nintendo Wiis and Tickle-Me-Elmos. And vibrators. Like the We-Vibe. This deceptively simple, pocket-sized gadget has made global headlines, attended Oscar parties, and been featured in magazines. The little purple happy-maker stimulates the G-spot and the clitoris at the same time. As the “We” part of the name indicates, it even leaves room for a man.

The $130 vibe, which, incidentally, was created by a laid-off Nortel engineer, flew off shelves last holiday season. It shows no signs of stopping. Will this miracle vag clamp ends up a fad or a classic? Time, as measured in female orgasms, will tell.

The End of Sunday In France?

The end of leisurely Sundays at the cafe? killermonkeys/flickr

 

As the French celebrate their revolution on Bastille Day, the government is set to debate another huge change for French society: allowing more work on Sunday.

As it stands now, Sundays are a mandatory day off. There are some loopholes to this, but for the most part, shops are closed. The new law would allow stores in France's large cities to be open on Sundays, and employees who agree to work would be paid double overtime. Not a bad deal.

Supporters of the bill, including President Nicolas Sarkozy, say that the move will help boost retail sales, make France more competitive worldwide, and improve the ailing French economy. Sarkozy has crusaded against the French propensity towards time off since his election in 2007.

But there's heavy opposition to the bill from opposition parties, unions, and even the Catholic Church. Some claim that it's an assault on French culture, and that the move will "abolish Sunday."

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FTSE 100 up on US bank earnings (AFP)

AFP - Stocks in London ended higher on Tuesday after strong bank earnings from the United States, including stronger-than-expected profit report from financial giant Goldman Sachs.

Investors return to mutual funds in 2nd quarter (AP)

French cuisine's not what it used to be

Are inflation worries justified?

Larger crisis calls for new solutions

How much longer for the war on drugs?

2-year colleges struggle with demand

Not all is new at revamped GM

Why (and how) Goldman Sachs profited

Saving CIT

The Wall Street Journal (sub req'd) is reporting that U.S. officials are in "advanced talks" about providing government aid for CIT Group, a lender to small and midsize businesses. The Obama administration is reportedly concerned about how a possible bankruptcy would further damage businesses who are struggling to get credit.

Simon Johnson of Baseline Scenario says a possible bailout has implications for the future of "too big to fail." Johnson writes:

At the end of 2008, CIT had total assets around $80bn, which was about 1/10th the size of Goldman (and about 1/25th the size of Citigroup) and puts it just outside the top 20 publicly traded financial services company. Presumably, it just missed the cut for inclusion in the government's recent "stress tests".

Its assets are between 2 and 3 times those of the largest "hedge funds" -- although obviously what gets that label these days is somewhat arbitrary, and the leverage in any individual fund could mean system risks roughly of the same scale as for CIT.

CIT's bailout possibilities are now in the realm of political choice. The rest of the financial sector, including hedge funds and the American Bankers' Association (ABA), should be lobbying for it not to get bailed out -- otherwise the bar for "too big to fail" will be lowered (by roughly an order of magnitude), and there will be many more voices arguing that even medium-sized banks/funds need to be broken up or otherwise severely constrained.

CIT has been trying for months to take advantage of the FDIC's Temporary Liquidity Guarantee Program, which guarantees newly issued debt, but the FDIC has been reluctant to let them participate. The company received $2.33 billion in TARP funding in December.

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Boockvar at Miller Tabak Sees `Stagflation' in U.S.

Barclays's Maki Sees U.S. Recession Ending in Third Quarter

Returning To A Trade

Shawn writes:

Since the age of 21, I had worked in the building trades as a pipe and duct insulator out of local #16 San Francisco. In Jan of 2004, my friend opened a mortgage bank and offered me a career change. I knew absolutely nothing about this industry but immediately fell in love with it. I started out working at the lock desk and eventually became head of secondary marketing, as well as account executive to outside retail branches. Then the summer of 2007 hit. There were multiple pay cuts as well as the loss of monthly bonuses.

After 3 years of learning a fascinating business that was giving me a good living, I found myself facing the reality that I may have to go back to being a labor man. By Oct 2008, I could not weather the storm any longer and went back to my union. Here is the good part, I hooked back up with the same superintendent that I had worked for and started working immediately. In fact, I have been working a lot of overtime with more on the way.

This change back to my previous career has enabled me to start paying off the losses of the previous two years and then some. I also have a new appreciation for my trade. I loved the mortgage business and still follow it closely, but I am very fortunate to be in the position I am in now.

According report released yesterday by the President's economic advisers, construction jobs are expected to experience the second highest job growth, behind the health care industry, in the next 8 years. The report predicts that the number of construction jobs will increase by 2,000,000 from 2008 to 2016.

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Jefferies's Benjamin Says AMD Has `Significant Struggles'

Goldman Beats Expectations

Goldman Sachs' released its earnings report this morning, and the news is good for Goldman.

They earned a second-quarter profit of $3.44 billion or $4.93 a share, beating out analysts' forecasts of a $2 billion profit. The report shows a huge rebound from where Goldman was in the final quarter of 2008, when it posted a loss and accepted $10 billion in TARP aid. The firm paid that money back last month, freeing itself from many of the restrictions associated with government assistance.

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Desperate Times for Real Estate