|
|
|
|
IMF lends $2.5bn to Sri Lanka despite concerns for Tamil refugees$The International Monetary Fund is expected to approve a controversial $2.5 billion ($£1.5 billion) loan to Sri Lanka today, despite concerns over the treatment of the Tamil minority. Source: Latest Business News from Times Online | 24 Jul 2009 | 8:35 pm UK economy continues to contractUK economic output fell 0.8% between April and June, faster than expected, denting hopes of a recovery.Source: BBC News | Business | World Edition | 24 Jul 2009 | 10:38 am Economic Report: U.K. economy shrinks 5.6%; largest fall on recordBritish gross domestic product shrinks more than expected in the second quarter.
Source: MarketWatch.com - Top Stories | 24 Jul 2009 | 10:32 am Earnings Watch: Updates, advisories and surprisesA roundup of the latest corporate earnings reports and what companies are saying about future quarters.
Source: MarketWatch.com - Top Stories | 24 Jul 2009 | 10:31 am De Beers profits lose their gleamProfits at De Beers, the world's biggest diamond producer, have slumped in the "most difficult" economic environment in decades.Source: BBC News | Business | World Edition | 24 Jul 2009 | 10:27 am Keydata investors will have to declare tax on Lifemark IsasKeydata or Lifemark products invested with Lifemark SA will not qualify for Isa status adminstrator has confirmed.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 24 Jul 2009 | 10:26 am Microsoft raises specter of doubt on tech recovery (Reuters)Reuters - The tech sector's road to recovery just got a lot bumpier.Source: Yahoo! News: Business | 24 Jul 2009 | 10:26 am Schlumberger profit falls, beats Wall St view (Reuters)Reuters - Schlumberger Ltd , the world's largest oilfield services provider, reported a 57 percent drop in quarterly earnings on Friday and said revenue declines were slowing, but it did not expect any rebound in spending by its oil- and gas-producing customers this year.Source: Yahoo! News: Business | 24 Jul 2009 | 10:24 am Merck KGaA shares slump after Erbitux rejectionShares in German drug and chemicals group Merck KGaA drop as after European authorities unexpectedly reject its Erbitux cancer drug.
Source: MarketWatch.com - Top Stories | 24 Jul 2009 | 10:22 am Recession Weary Investors Make a Run to the BorderMISSION, Texas, July 24 /PRNewswire/ -- Nationally, home sales are falling, unemployment is on the rise and the economy is expected to grow slowly. The cities in the Rio...Source: RSS feed - channel BNewsBusiness | 24 Jul 2009 | 10:22 am Global stock markets rally on investor optimism (AFP)
Source: Yahoo! News: Stock Markets News | 24 Jul 2009 | 10:18 am Schlumberger 2Q tumbles 57 pct as drilling dropsSchlumberger says its second-quarter earnings tumbled 57 percent as oil and natural gas companies cut back on exploration and drilling. The world's largest oilfield services company saidSource: RSS feed - channel BNewsBusiness | 24 Jul 2009 | 10:18 am FTSE100 shrugs off weak GDP to extend gains for tenth dayBritain's top share index shrugged off a worsethanexpected decline in secondquarter growth as it rose for the tenth day in a row.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 24 Jul 2009 | 10:15 am World markets brush off soft Microsoft earnings (AP)
Source: Yahoo! News: Stock Markets News | 24 Jul 2009 | 10:02 am Minimum wage hike: 4.5 million get raiseOn Friday, the federal minimum wage rises for the third year in a row, sparking the perennial argument among economists: Will it help workers at the bottom of the ladder, or will it kill their jobs?Source: Business and financial news - CNNMoney.com | 24 Jul 2009 | 10:01 am No Struggle In China IPO MarketThe local stimulus package may be causing a bubble in the Chinese stock market. Investors may simply have unprecedented access to capital. The market may also be reacting well to the fact the GDP moved up more than 7% in the second quarter or that the recession in the West is not as bad as it [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 24 Jul 2009 | 10:01 am Ashland Inc. Reports Preliminary Operating Income of $152 Million for Fiscal Third Quarter, Generates $355 Million of Cash Flows From Operating ActivitiesCOVINGTON, Ky., July 24 /PRNewswire-FirstCall/ -- Ashland Inc. (NYSE: ASH) today announced preliminary(1) results for the quarter ended June 30, 2009, the third quarter of its 2009...Source: RSS feed - channel BNewsBusiness | 24 Jul 2009 | 10:00 am West Coast Bancorp Reports 2009 Second Quarter Results- Second quarter 2009 operating loss*, which excludes an industry-wide special FDIC assessment charge of $.8 million after tax, was $5.5 million or $.36 per diluted share compared to...Source: RSS feed - channel BNewsBusiness | 24 Jul 2009 | 10:00 am Einstein Bros.' New College Park Location Celebrates Grand Opening With Food GiveawayFirst 100 Customers in Line to Receive Free Breakfast Sandwiches for One Year COLLEGE PARK, Md., July 24 /PRNewswire-FirstCall/ -- Einstein Bros.((R)) Bagels celebrates theSource: RSS feed - channel BNewsBusiness | 24 Jul 2009 | 10:00 am Indications: U.S. stock futures inch up after Microsoft missU.S. stock futures nudge higher on Friday, with the market stepping off the pedal after a batch of earnings misses from Microsoft, Amazon.com and Ericsson.
Source: MarketWatch.com - Top Stories | 24 Jul 2009 | 9:59 am Asian stocks end up, Shanghai at 13-month highAsian markets advance, with refiners and metal producers lifting Chinese shares to a fresh 13-month high.
Source: MarketWatch.com - Top Stories | 24 Jul 2009 | 9:57 am Bourses rise for 10th-straight sessionEuropean equities advanced for a 10th straight session on Friday, powered by banks and energy shares as investors took cheer in upbeat economic data.The Ifo survey of German business confidence rose for...Source: RSS feed - channel BNPaperBusiness | 24 Jul 2009 | 9:54 am Fuel scheme 'failing the poorest'A scheme aimed at increasing households' efficiency and cutting fuel poverty is "failing the poorest and most vulnerable", MPs say.Source: BBC News | Business | World Edition | 24 Jul 2009 | 9:53 am Economic Report: Data indicate euro zone slowed fall in JulyThe euro-zone economy appeared to brake its decline in July, shrinking at a slower-than-expected pace, according to a pair of closely-watched surveys released Friday.
Source: MarketWatch.com - Top Stories | 24 Jul 2009 | 9:52 am 10 ways the recession is changing BritainUnemployment is rising sterling's on the backfoot and Woolworths has gone bust. But how else is the recession changing Britain?Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 24 Jul 2009 | 9:51 am Britain's hopes of a quick recovery from recession dashed as GDP disappointsNew figures show that the economy contracted more than feared last quarter as the recession keeps its grip.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 24 Jul 2009 | 9:47 am Pound slips as GDP shrinks more than expectedThe pound lost ground on Friday after data showed the UK economy shrank more than expected in the second quarter.Figures revealing UK GDP fell 0.8 per cent over the quarter dashed hopes that the UK economy...Source: RSS feed - channel BNPaperBusiness | 24 Jul 2009 | 9:42 am Oil and sugar lead commodities higherCrude oil prices rose on Friday while gold held above the $950 mark and concerns about supply problems continued to support sugar prices as commodity markets headed for a strong finish to the trading week...Source: RSS feed - channel BNPaperBusiness | 24 Jul 2009 | 9:41 am Stock index futures point to higher Wall St open (Reuters)
Source: Yahoo! News: Business | 24 Jul 2009 | 9:36 am Stock index futures point to higher Wall St open (Reuters)
Source: Yahoo! News: Stock Markets News | 24 Jul 2009 | 9:36 am Stock index futures point to higher Wall St open(Reuters ) - Futures for the Dow Jones industrial average, the Nasdaq 100 and the S&P 500 share indexes are 0.1-0.4 percent higher, pointing to a firmer start on Wall Street on Friday.Source: Reuters: Business News | 24 Jul 2009 | 9:36 am UPDATE 2-TeliaSonera Q2 profits, cost controls impress* Lower cost base to offset downturn, no new measures eyedSource: RSS feed - channel BNewsBusiness | 24 Jul 2009 | 9:35 am 5 great deals on hot U.S. wheelsWhen you hear 'Detroit,' you may think bust and bailout. But look past the headlines to find nice prices on sharp cars.Source: Business and financial news - CNNMoney.com | 24 Jul 2009 | 9:34 am 15 most lucrative college degreesMath majors don't always get much respect on college campuses, but fat post-grad wallets should be enough to give them a boost.Source: Business and financial news - CNNMoney.com | 24 Jul 2009 | 9:31 am Sunset For Ma BellAT&T (T) appropriately makes the point that its earnings now are driven by its cellular business and its new fiber broadband. The company now has 79.6 million wireless subscribers. The Apple (AAPL) iPhone is winning the phone company new business. Perhaps most importantly, the revenue that AT&T gets from wireless data use is rising sharply, [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 24 Jul 2009 | 9:30 am Stocks set for a struggleU.S. stock futures edged higher Friday, a day after earnings optimism triggered a surge on Wall Street that pushed stocks to their best level of the year.Source: Business and financial news - CNNMoney.com | 24 Jul 2009 | 9:29 am How long can the rally last?The Dow Jones industrials stormed past the 9,000 mark Thursday for the first time since January, as traders delighted in surprising corporate profits and a rise in housing sales. But are the markets getting ahead of themselves?Source: Business and financial news - CNNMoney.com | 24 Jul 2009 | 9:28 am City DiariesReaders respond to diaries written by financial sector staffSource: BBC News | Business | World Edition | 24 Jul 2009 | 9:28 am CORRECTED - CORRECTED-UPDATE 1-PE firms buy 10 pct of UnionPay unit -sources* 3 private equity investors get 10% of China UnionPay unitSource: RSS feed - channel BNewsBusiness | 24 Jul 2009 | 9:26 am CORRECTED - CORRECTED-UPDATE 1-PE firms buy 10 pct of UnionPay unit -sources* 3 private equity investors get 10% of China UnionPay unitSource: RSS feed - channel BNewsBusiness | 24 Jul 2009 | 9:26 am Deals of the day -- mergers and acquisitionsJuly 24 (Reuters) - The following bids, mergers, acquisitions and disposals involving European, U.S. and Asian companies were reported by 0900 GMT on Friday.Source: RSS feed - channel BNewsBusiness | 24 Jul 2009 | 9:24 am UPDATE 1-National Express gets approach from Spain's CosmenLONDON, July 24 (Reuters) - Britain's National Express has received an all-cash takeover proposal from Spanish major shareholder the Cosmen family and private equity firm CVC Capital Partners, sending...Source: RSS feed - channel BNewsBusiness | 24 Jul 2009 | 9:22 am Shares rally amid recovery hopesShares in Asia rose overnight, buoyed by upbeat results from the US which renewed hope for economy recovery.Source: BBC News | Business | World Edition | 24 Jul 2009 | 9:12 am Microsoft (MSFT) Has To Get SmallerMicrosoft’s (MSFT) revenue dropped 17% in the second quarter, and worse, sales dropped in all five of the firm’s operating units. The recession and the decline in PC sales are to blame for the largest portion of the trouble, but the software company’s inability to raise prices aggressively is combining with drop in units demand. Operating [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 24 Jul 2009 | 9:06 am De Beers profits fall 99%LONDON, July 24 De Beers, the world's top diamond producer, said it expected a better second half, when reporting that tough markets had all but wiped out its first-half profit."After very difficult trading...Source: RSS feed - channel BNPaperBusiness | 24 Jul 2009 | 9:01 am EDF fined £2m for 'poor' serviceEDF Energy Networks is fined by energy regulator Ofgem for missing deadlines in connecting customers.Source: BBC News | Business | World Edition | 24 Jul 2009 | 9:00 am FTSE climbs after gains in US and AsiaLondon equity market investors pushed stocks higher for a tenth-consecutive session on Friday, overcoming an early bout of profit taking after strong gains in the US overnight and in Asia.The FTSE 100...Source: RSS feed - channel BNPaperBusiness | 24 Jul 2009 | 8:56 am Dow 14,000The media made a big deal of the fact that the DJIA rose above 9,000 for the first time in nearly eight months. The index was under 6,550 in early March, do the advance has been 38% since then, but the index is still well below 14,000 which it hit in October 2007. The Dow [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 24 Jul 2009 | 8:56 am S Korea economy grows 2.3%South Korea's economy expanded in the second quarter by its fastest rate in five and a half years, official figures show.Source: BBC News | Business | World Edition | 24 Jul 2009 | 8:55 am London Markets: Vodafone offsets GDP drop to lift LondonData showing the worst-ever quarterly economic performance in the U.K. couldn’t halt a winning run in London on Friday, led by Vodafone Group.
Source: MarketWatch.com - Top Stories | 24 Jul 2009 | 8:55 am European stocks pull back at open (AFP)
Source: Yahoo! News: Stock Markets News | 24 Jul 2009 | 8:52 am Decline in UK car output slowingThe number of new cars made in the UK in June fell 30.2% year-on-year, but the drop was this year's smallest so far.Source: BBC News | Business | World Edition | 24 Jul 2009 | 8:49 am State by state: Minimum wage ratesSource: Business and financial news - CNNMoney.com | 24 Jul 2009 | 8:48 am Vodafone reassures with uneventful Q1, shares riseLONDON (Reuters) - Vodafone , the world's largest mobile phone firm by revenues, reported a slight decline in quarterly organic sales in line with muted expectations and reiterated its full-year outlook, lifting its shares on Friday.Source: Reuters: Business News | 24 Jul 2009 | 8:47 am UK economy contracted more than feared last quarterFresh figures deliver a blow to hopes for the UK economy.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 24 Jul 2009 | 8:44 am UK economy: a health checkSource: Finance and Business. Latest breaking news stocks and shares from the UK and world | 24 Jul 2009 | 8:43 am Ericsson profit drops 56% on venture lossesEricsson on Friday reports a 56% drop in second-quarter profit, hurt by restructuring charges.
Source: MarketWatch.com - Top Stories | 24 Jul 2009 | 8:27 am Europe Markets: Data trumps earnings as Europe turns higherEuropean shares advanced on Friday after some better-than-expected economic data from the region, offsetting losses for drugmaker Merck KGaA and telecom Ericsson.
Source: MarketWatch.com - Top Stories | 24 Jul 2009 | 8:25 am China's Beijing Auto says fails in bid for GM's Opel (Reuters)
Source: Yahoo! News: Business | 24 Jul 2009 | 8:23 am China's Beijing Auto says fails in bid for GM's OpelBEIJING (Reuters) - China's Beijing Auto said intellectual property issues were behind its failure to reach an deal with General Motors over its Opel unit.Source: Reuters: Business News | 24 Jul 2009 | 8:23 am Vodafone revenue up 9.3%; exchange rates a factorU.K. mobile-network operator Vodafone'srevenue rises 9.3%, driven by exchange-rate fluctuations and acquisitions.
Source: MarketWatch.com - Top Stories | 24 Jul 2009 | 8:19 am EDF fined £2m for poor serviceThe distributor of electricity to almost eight million customers in London and the East of England is fined.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 24 Jul 2009 | 8:08 am Sony to invest over $1 billion in Sharp LCD unit: reportTOKYO (Reuters) - Sony Corp will likely invest more than 100 billion yen ($1.1 billion) in a planned liquid crystal display TV panel venture with Sharp Corp, the Nikkei business daily reported on Friday.Source: Reuters: Business News | 24 Jul 2009 | 7:54 am Media Digest 7/24/2009 Reuters, WSJ, NYTimes, FT. BloombergReuters: Microsoft’s (MSFT) results and forecast were weak. Reuters: CIT (CIT) may sell its aviation finance business. Reuters: Fatigue at the Fed is leading to questions about its expanded role. Reuters: Twitter will pitch add-on tools to businesses. Reuters: Vodafone (VOD) stuck to its full-year forecast. Reuters: Amex (AXP) and Capital One (COP) had large cars losses. Reuters: Now that Merck (MRK) [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 24 Jul 2009 | 7:54 am Eddington abandons bid to be ANZ chairmanSir Rod Eddington, former British Airways chief and a special adviser to Australian prime minister Kevin Rudd, will not take up the role of ANZ chairman after encountering resistance from leading institutional...Source: RSS feed - channel BNPaperBusiness | 24 Jul 2009 | 7:46 am Your future health care: One versionIt's time for your 2015 annual physical.Source: Business and financial news - CNNMoney.com | 24 Jul 2009 | 7:45 am SEC, FDIC heads want new council to be supercop (AP)
Source: Yahoo! News: Stock Markets News | 24 Jul 2009 | 7:41 am Aussie market at highest close since DecemberMELBOURNE - Big miners helped drive Australia's stock market to its highest close since last November. The benchmark S&P/ASX200 index closed up 25.7 points, or 0.63 per cent, at 4089.8 points, the highest close since November 10. The...Source: New Zealand Herald - Business | 24 Jul 2009 | 7:34 am Revenues at Vodafone on the riseVodafone's revenues rose 9.3% in the three months to July, helped by favourable exchange rates and mergers and acquisitions.Source: BBC News | Business | World Edition | 24 Jul 2009 | 7:33 am Asia Markets And Europe Open 7/24/2009Markets in Asia were mostly higher. The Nikkei rose 1.6% to 9,945. The Hang Seng was up .5% to 19,913. PetroChina (PTR) moved up with th eprice of oil. The Shanghai Composite was up 1.3% to 3,372. At the open in Europe, the FTSE was down .3% to 4,546. BHP Billiton (BHP) was down and Vodafone (VOD) rose on [...][[ This is a content summary only. Visit my website for full links, other content, and more! ]]
Source: 24/7 Wall Street | 24 Jul 2009 | 7:27 am S Korean tech groups post strong resultsSamsung Electronics and Hynix Semiconductor, the world's largest memory chipmakers, on Friday released strong second-quarter results which would fuel hopes for a recovery in the battered industry, and...Source: RSS feed - channel BNPaperBusiness | 24 Jul 2009 | 7:22 am Ericsson feels brunt of economic crisisEricsson, the world's biggest telecommunications equipment maker, warned on Friday that the impact of the economic downturn had become more pronounced as the company announced a steep drop in second-quarter...Source: RSS feed - channel BNPaperBusiness | 24 Jul 2009 | 7:22 am National Express rises on reports of Cosmen family CVC approachNational Express shares opened up 3pc on reports that Spain's Cosmen family and private equity group CVC have made a joint takeover approach for the bus and rail group.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 24 Jul 2009 | 7:14 am Asian markets cheered by US rallyAsian shares followed US markets higher, after investors pushed the S&P to its highest level since Barack Obama was elected on November 4, levels last touched on election day last November and the Dow Jones Industrial Average broke through the psychologically important 9,000 markSource: Financial Times - US homepage | 24 Jul 2009 | 7:11 am Asian markets cheered by US rallyAsian markets hit a fresh 10-month high on Friday as investors took their lead from Wall Street overnight, where investors pushed the S&P to its highest level since Barack Obama was elected on November...Source: RSS feed - channel BNPaperBusiness | 24 Jul 2009 | 7:11 am U.S. probes hedge fund manager Ribotsky: report(Reuters) - U.S. criminal authorities are probing whether Corey Ribotsky, Managing Member of NIR Group, a Roslyn, New York hedge-fund, defrauded investors about their returns and the holdings of his various funds, the Wall Street Journal reported, citing people familiar with the matter.Source: Reuters: Business News | 24 Jul 2009 | 7:11 am Samsung Elec sounds caution despite big profitSEOUL (Reuters) - Samsung Electronics , the world's biggest maker of memory chips and LCD screens, joined other top tech names to rein in growing optimism over the sector's recovery, even after delivering best quarterly profit in 2- years.Source: Reuters: Business News | 24 Jul 2009 | 7:06 am Denny's is sued over high-salt foodSome meals contain more sodium than a person should eat in two whole days. The New Jersey lawsuit wants the restaurant chain to list sodium content on its menus and warn about health risks.Doctors recommend against eating more than 2,300 milligrams of sodium a day. Order a Denny's double cheeseburger and you'll consume 3,880 milligrams in one sitting, almost double the suggested daily allowance of salt.
Source: L.A. Times - Business | 24 Jul 2009 | 7:00 am Toyota considers halting operations at California's last car plantThe Japanese automaker plans to begin talks with GM that could end their 25-year-old joint venture, NUMMI, in Fremont.Toyota Motor Corp. appears to be moving closer to shuttering California's last auto plant.
Source: L.A. Times - Business | 24 Jul 2009 | 7:00 am Audi Q5 is buff luxe in a guilt-lite packageThe crossover, which shares the chassis and attributes of the A4 sedan/wagon, brings the supper-club swank of the Q7 SUV to a more petite platform.The most astonishing thing about my time in the 2009 Audi Q5 was that I actually took it off road, with dirt and everything. Granted, I was in the Brentwood neighborhood of West Los Angeles, where the creeks burble with Bollinger and raccoons wear rhinestone collars. Nonetheless, for most buyers in the compact luxury sport-utility segment, my little excursion on a home construction site might as well have been crossing the Gobi.
Source: L.A. Times - Business | 24 Jul 2009 | 7:00 am Toyota considers halting operations at California's last car plantThe Japanese automaker plans to begin talks with GM that could end their 25-year-old joint venture, NUMMI, in Fremont. ...Source: RSS feed - channel BNPaperBusiness | 24 Jul 2009 | 7:00 am Netflix profit jumps 22%The DVD-rental-by-mail service is benefiting from consumers' growing preference for renting rather than buying videos during the economic downturn.Apparently it's better to rent than to own DVDs during a recession.
Source: L.A. Times - Business | 24 Jul 2009 | 7:00 am Oxy Petroleum profit slips 70% on sharply lower oil pricesThe company reports profit of $682 million, a major drop from the $2.3 billion it earned in the year-earlier period as crude oil prices were soaring toward a record high of $145 a barrel in July.Occidental Petroleum Corp. reported a 70% drop in second-quarter earnings because of sharply lower oil prices -- but still managed to beat Wall Street expectations.
Source: L.A. Times - Business | 24 Jul 2009 | 7:00 am Dow breaks 9,000 for the first time in 6 monthsThe index rises 2.1% to close at 9,069.29 as bright reports on home sales and corporate earnings bolster beliefs that the recession is easing.The stock market has been on a tear as investors have become increasingly convinced that the recession is waning despite the highest unemployment in decades and corporate profits that remain severely depressed.
Source: L.A. Times - Business | 24 Jul 2009 | 7:00 am 7-Eleven plans to slurp up Southern California real estateThe convenience store chain says it will add 600 stores over the next seven years, a move that could save it millions because of the weak commercial land market.In a move that could nearly double its Southern California footprint, the 7-Eleven convenience store chain is taking steps to lease up to 600 new locations in the region.
Source: L.A. Times - Business | 24 Jul 2009 | 7:00 am Home sales show faint signs of improvementThe pace of sales of existing homes rises nationally for the third consecutive month but is still no better than a year ago.Sales of existing homes rose in June for the third consecutive month nationally, lifting the spirits of Wall Street and some in the housing industry. But the pace of sales is still no better than a year earlier, which had been the worst year for home sales in a decade.
Source: L.A. Times - Business | 24 Jul 2009 | 7:00 am Ford posts surprise profit of $2.3 billion in 2nd quarterAnalysts had forecast a loss for the automaker, but the company offset plunging revenue with cost cutting and debt reductions as part of an aggressive transformation.Ford Motor Co. has dodged bankruptcy and found the black.
Source: L.A. Times - Business | 24 Jul 2009 | 7:00 am Surprise rise in Samsung profitQuarterly profits at Samsung Electronics rise 5%, thanks to increased sales of flat-screen televisions and mobile phones.Source: BBC News | Business | World Edition | 24 Jul 2009 | 6:48 am Corus steelworkers win £2.2m in LotteryA group of workers at recessionhit steel giant Corus who have won a £2.2 million Lottery jackpot will be unveiled today.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 24 Jul 2009 | 6:46 am US mayors, rabbis arrested in graft probeDozens of New Jersey politicians, officials and prominent rabbis have been arrested in a sweeping probe that uncovered political corruption, human organ sales and money laundering from New York to Israel, officials saidSource: Financial Times - US homepage | 24 Jul 2009 | 6:43 am Vodafone sales in line as India Africa offset weak EuropeVodafone the world's largest mobile phone firm by revenues reported sales in line with market expectations for the quarter to endJune as strength in India and Africa compensated for weakness in Europe.Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 24 Jul 2009 | 6:39 am NZ sharemarket posts strong gainsThe New Zealand sharemarket leapt ahead today, following a surge by stocks in the United States on strong corporate profits and rebounding home sales. The benchmark NZSX-50 index closed up 42.54 points, or 1.458 per cent, at 2961.173,...Source: New Zealand Herald - Business | 24 Jul 2009 | 6:30 am Microsoft sales drop sharply, sees no quick recoveryNEW YORK (Reuters) - Microsoft Corp posted the first-ever drop in annual sales of Windows and its quarterly revenue fell a steeper-than-expected 17 percent as its business continued to be hurt by the weak global PC and server markets.Source: Reuters: Business News | 24 Jul 2009 | 6:03 am Dollar settles above US65cThe New Zealand dollar was little changed today after spiking near this week's 9-1/2-month high during Thursday night trading. By 5pm the NZ dollar was at US65.52c from US65.71c at 8am and US65.95c at 5pm yesterday. It peaked at...Source: New Zealand Herald - Business | 24 Jul 2009 | 5:27 am CIT may sell aviation-finance, rail-finance ops: report(Reuters) - CIT Group Inc, which is looking at selling off some assets, is most likely to sell its aviation-finance and rail-finance operations, the Wall Street Journal said, citing sources familiar with the matter.Source: Reuters: Business News | 24 Jul 2009 | 5:26 am CIT may sell aviation-finance, rail-finance ops: report (Reuters)
Source: Yahoo! News: Business | 24 Jul 2009 | 5:18 am Zillow, Trulia and More: Sizing Up Housing Sites (Deal of the Day)Just a few years ago, appraising your own property was as simple as checking out how much the house down the street sold for and adding a few thousand dollars for good measure. Not anymore. With homes in many markets lingering unsold for months, recent sales of neighboring properties are hardly the accurate indicator they once were. And in areas where the majority of recent sales are foreclosures snatched at attractive discounts, potential buyers often get the wrong idea of just how low of a low-ball offer they can convince an owner to accept. To get a better handle on their local markets, more homeowners and potential buyers are turning to real estate web sites for their appraisals. These sites prompt users for a residential address and then spit out a price or range of prices indicating how much that home is worth. Visits to Zillow.com came in at 4.1 million last month, up 55% over the same time last year, according to Nielsen. Trulia, which offers listing information, saw a 37% increase over the same period, and Yahoo Real Estate, which offers home value estimates from Zillow.com and Eppraisal.com, saw its traffic rise 20%. Of course, popularity has never been a good measure of accuracy on the web, and the traffic numbers for these sites do not tell the whole story. Zillow.com says that its estimates can be off by as much as 34% in Dallas and nearly 20% in Detroit. (The site's median margin of error for all 50 states is 11.8%.) HomeGain.com, which started offering a so-called instant valuation tool in 1999, took it down less than two years later because of complaints about the tool's inaccuracy. The site brought it back in 2006 and now offers a range of values, as well as referrals to real estate agents who can provide more accurate prices. "It's almost like alchemy, trying to get there," says Louis Cammarosano, the general manager of HomeGain.com, of finding the formula that predicts property values accurately. "There are too many things you just can't know – and the only way to know them is talk to a real estate agent." So how do these sites determine property values? They start by collecting as much property information as possible from public records and Multiple Listing Services, including a home's age and size, the number of bedrooms and bathrooms, and the sales history of comparable homes nearby. Then, they run all that data through complex algorithms, known as automated valuation models, or AVMs, to calculate how much the property is worth. Lenders use AVMs to determine the risk of default across their loan portfolios -- a strategy known as risk management. And appraisers use AVMs when they have to value large numbers of properties for tax purposes, says Leslie Sellers, a Knoxville, Tenn.-based appraiser and 2009 president-elect of the Appraisal Institute, an industry association. But AVMs are rarely the only information used in individual home sales, which require a much more in-depth look at a property. For example, an AVM may take into account the number of bathrooms in a home, but it would ignore the quality and size of a bathroom, as well as its fixtures, Sellers says. So even if a house identical to yours down the street may have sold for $200,000 two months ago, your home may be worth more after a five-figure investment in a kitchen renovation. In today's market, appraisers are also finding more need to make adjustments for so-called "market conditions." If the seller of a nearby property was highly motivated – say, they were behind on their payments and accepted the first offer that came their way – an appraiser would adjust the value of your home higher than otherwise calculated by a less-sophisticated AVM. On the other hand, if the seller made concessions – they paid part of the buyer's closing costs, for example – the value of your home would be adjusted down. A problem less easily corrected is that the data used by AVMs and home valuation sites are often wrong. "They're really at the mercy of public record, and public record is flawed," says Jonathan Miller, the president and CEO of New York-based Miller Samuel Real Estate Appraisers. For example, extensions added to houses are often left off the public record – so the square footage and number of bedrooms or bathrooms can be wrong. (To address that problem, Zillow allows homeowners to "claim a home" and add in such details. An owner's estimate, is then calculated and published alongside the property's Zestimate. As of July, 11.8 million homes out of the 70 million listed on Zillow have had their facts updated by the home's owner or listing agent, spokeswoman Amy Bohutinsky says.) Another caveat is that home sales data are not part of the public record in 13 states, increasing the algorithms' room for error. (Those states are Alaska, Idaho, Indiana, Kansas, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Texas, Utah and Wyoming.) To collect data for these states, the home valuation sites can partner with data aggregators or multiple listing services. For example, CyberHomes.com receives title insurance data from Fidelity National Financial (FNF), of which it is a former subsidiary. Of course, none of these problems may matter in the end. Knowing the exact value of a home may not be the key to being a successful buyer or seller in today's market. On the other hand, arming yourself with as much information as you can and surrounding yourself with knowledgeable professionals is critical, and that is where these sites can help.
|
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.
The financial crisis has culled the world's herd of big banks, leaving survivors dazed and damaged. But there is a rare exception in the long line of walking wounded: Spain's Banco Santander (STD), arguably the least-well-known behemoth to American investors.
That's likely to change in coming years. Santander's acquisition strategy — fix and grow broken banks — makes it likely the Spanish giant will boost its branch presence and profits in the U.S. Last January, it purchased troubled U.S. lender Sovereign Bancorp. The Pennsylvania-based bank, which lost $2.3 billion in 2008, is just a small part of Santander's far-flung empire, with 14,000 branches in 40 countries on three continents.
When the global economy does revive, Santander's solid retail-branch and deposit-taking orientation, geographic reach — particularly in emerging markets — and strong capital structure should help it continue to be much more profitable than most of its Western peers.
With a 7% dividend yield, the ADRs could give an annual 10% to 15% return over the next three years, depending on how quickly the world economy heals. Shares have received a lift in recent weeks from a handful of analyst upgrades, but they still aren't expensive — given the earnings expected in 2009-2011, the dividend, and the bank's low-risk, conservative retail network, which provides about 80% of pretax profits. The branch network is a solid buffer for earnings, so the shares should outperform rivals even if global economic activity continues to disappoint.
Santander has its problems — nonperforming loans chief among them — but don't expect to find the subprime "toxic asset" exposure or esoteric and risky derivatives that have brought other banks to their knees or worse. Among the big boys, the Madrid-based bank is probably the best-positioned and least-risky investment. While the stock has more than doubled from deep lows in March, other large European banks with worse problems are up multiples of that.
In spite of the rally, Santander's profitable future is still only partially reflected in the stock price. The Madrid-traded ordinary shares closed Friday around 8.96 euros. At about $12.80, Santander's ADRs, which have also been boosted by a strong euro, remain down about 42% from highs set last year.
The global banking crisis gets some blame for that, but investors are mainly worried about the bank's exposure to its home market, about 31% of profits. A bust in a once-fast-growing construction and housing market is the main culprit behind a likely 3%-to-4% contraction this year in Spain's gross domestic product. An improvement is seen next year, but growth might not return until 2011. Spanish unemployment, meanwhile, is about 17% and could approach 20% before the recession ends.
So it isn't surprising that Santander's nonperforming loans as a percentage of total loans doubled in the first quarter to 2.5%, or about €19 billion. They are liable to get worse this year before improving next year.
Now the sixth-largest Western bank by assets, with about $1.5 trillion, and the largest euro-zone bank by market capitalization, at $105 billion, Santander has said 2009 profit should be flat with last year's €8.9 billion, or €1.22 per share. It will pay out half that in dividends, which were €0.65 last year. Few banks, let alone big ones, can make promises like that. Such a 2009 result would probably be the largest profit by any Western bank.
While Santander has no official 2010 forecast, Chief Financial Officer José Antonio Álvarez indicated in a recent interview with Barron's that 2010's profit could be similar to 2009's. If the general economic situation doesn't change, then "the outlook [for profit] is not far away from where we are right now," he says. Spain and Mexico, for example, are having problems, but they will be offset by Brazil and Chile, where double-digit profit rises are expected; by the United Kingdom, where interest-rate spreads are growing; and by improvements at Sovereign, which should make operating profits of $250 million in 2010 and triple that in 2011, he says.
Santander, whose operating costs amount to just 43% of gross income, is perhaps best known as a tight ship under Chairman Emilio Botín. "We sell pure commodity products. There's no secret. Costs matter a lot," the CFO notes. The bank took the U.K.'s Abbey, purchased in 2004, from a cost ratio of more than 70% down to the group level, and Álvarez expects to do the same with its more recent acquisitions, like Britain's Alliance & Leicester, Banco Real in Brazil, and Sovereign, all of whose ratios are significantly higher than Santander's. A cost ratio below 50% is considered efficient. Santander tops that with help from its information-technology platform, recognized as a powerful tool to cut banking costs.
The bank's efficiency probably isn't appreciated by the market, and the improvements that will come from the further integration of U.K. and Brazil operations should be a catalyst for the stock price, adds Roger Vogt, a Frankfurt-based portfolio manager at Deka Investment. The disarray in the U.K. market in particular, where several rival banks have been nationalized, "will be a good opportunity to extract value and enhance earnings," says the money manager, who made Santander an Overweight in his portfolio a few weeks ago. According to a June 4 Deutsche Bank report, Santander's efforts should raise U.K. profits, about 16% of the total, to €1.6 billion in 2011 from €1.25 billion last year, despite Britain's poor economic prospects.
In this terrible environment, Santander will be the most profitable bank in the world outside China, producing net income topping last year's profits of the three top U.S. banks combined, points out David Serra, a London-based portfolio manager with Algebris Investments. He wonders why the stock has fallen so much. Algebris, which owned about 9.9 million shares as of March 31, has held Santander shares for more than three years, and bought more during the downdraft.
Serra values his favorite bank's domestic shares at €14, or 55% higher than the current price. "This is a company that, whenever the world gets normal, should produce EPS of €1.40," so the stock is trading at about six times normalized EPS for, say, 2011. It also sported a return on equity of 17% last year.
The historical average price/earnings ratio for Santander has been about 16, but a more conservative 10 times earnings still results in a price of €14. Analysts expect Santander to earn about €0.95 a share this year, giving it a current P/E of about nine — not particularly demanding for a bank of Santander's quality.
Even more telling, Serra adds, is a look at the value of some of its parts. For example, Santander's Brazil bank, No. 3 in the country, is smaller but comparable to rival and No. 2 Banco Bradesco (BBD), with a market capitalization of $45 billion. Santander's 77% share of Banco Santander Chile (SAN) is worth nearly $7 billion, so that these two pieces together are valued by the market at $52 billion, or 50% of the entire Santander market cap. Yet they represent just 22% of the parent's earnings stream.
"There's much more value in Santander than, for example, HSBC (HBC)," whose P/E is 70% higher than Santander's and where profits have "collapsed" by 74% since 2007, the portfolio manager adds.
As for nonperforming loans, or NPLs, they are an issue, but T. Rowe Price money manager Fred Rizzo says, "Santander has been able to manage the storm," thanks partly to the Bank of Spain's stringent requirements for provisions against losses. For example, Santander has so far reserved €15 billion, or almost 80% of the total €19 billion in NPLs, at first quarter's end. The central bank has required Spanish banks to hold so-called generic bad loan provisions, of which Santander has about €6 billion.
With Spain's economy in such difficult straits, NPLs will probably continue to rise. But Deutsche Bank did a U.S.-style stress test on the bank in that June report, and the results were encouraging. Assuming a peak default rate of 14% to 15% in two years, the charge-offs would still be smaller than the forecast pre-provision profits. Meanwhile, Santander recently brought down its forecast for NPLs in the Spanish market, its biggest single-country operation, to 3.5% at year end from a previous estimate of 4.5%. They were 2.4% in the first quarter. "They seem to be doing the right things," Rizzo says.
"Every bank has its issues, but Santander has been a very good executor of its strategy" where earnings growth "will be a little steadier than rivals' and with an earnings base that is a lot more stable," says Frank Crown, a fund manager with Invesco Capital Management, which owned more than 800,000 shares as of March 31. And it offers an emerging-markets exposure to growth through Latin America that few, if any, of the biggest banks can match, he adds.
By focusing on a simple and conservative retail business strategy, mainly by cutting costs to get margin expansion, Santander has quietly gone about its business, taking its cost-conscious model to other regions, Crown adds. "It's not a pure Spanish bank [anymore]. It's not well known, but that will change."
That sounds about right. Rare is a global bank little known to most American investors. Rarer still is the occasion to buy shares of such a bank at what looks to be a reasonable price.
The Bottom Line
Based on their 7% dividend yield, Santander shares should offer a total annual return of 10% to 15% in the next few years — possibly more, depending on the global economy.
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.
If you like to shop for antiques, then you probably also like to haggle over prices. After all, you may not even know what you’re looking for when you walk into an antique shop, but you probably know one thing—that the dollar amount on the price tag isn’t always what the dealer actually expects to get. For most buyers, though, the negotiation is shrouded in one mystery: Just how much wiggle room do I really have?
Lincoln Sander, an antique dealer in Redding, Conn., explains that dealers generally have what’s called a “trade price”—that is, an amount for which they will sell the item to another dealer, a known collector, or a regular customer. The discount can be significant—often as high as 20 percent—and most dealers build it into their markup when pricing an item. What you may not know is that the trade price could also be available to you as a first-time customer. The dealer may, for example, offer you the special price if he sees the potential for building a relationship with you, Sander says. But you might also get it just for being pleasant and not so presumptuous in your negotiating. “Ask in a nice way,” Sander advises, “with the idea that you might or might not get the price.” Pat Garthoeffner, a dealer in Lititz, Pa., agrees that manners go a long way. “Never make an offer [by saying] ‘I’ll give you . . .’ or ‘Can you take . . .?’ That’s just insulting,” she says. The phrase that makes her most likely to give customers a break? “I think the best thing to say,” says Garthoeffner, “is ‘Do you have any room . . .?’”
Congratulations, you’re an antique dealer! Want to call yourself an appraiser, too? Go right ahead. In fact, of the 30,000 to 50,000 people in this country who say they’re personal-property appraisers, just 10 percent are professionally trained, according to the International Society of Appraisers. The reason is that appraisers are completely unregulated, with no educational or licensing requirements. “Anyone can hold himself out as an appraiser of fine arts, antiques, or whatever, and can even obtain accreditation,” says Marshall Fallwell, Jr., an antique appraiser in Nashville. And those dealers who do boast of their appraisal credentials are not necessarily well trained. “Your pet cockatiel could be a member in some of these [appraisal] organizations,” says Irene Austin-Gillis, an appraiser in Providence, R.I.
Even the four biggest and most respected groups that offer credentials to appraisers don’t have the most rigorous standards for admission. In fact, just one, the American Society of Appraisers, requires its members to pass a test on a specific area of appraisal expertise—Oriental rugs, say—before gaining entry. The remaining three test the bulk of their members only on general appraisal standards and practices. Says Paul Dewees, president of one of them, the Certified Appraisers Guild of America, “Our test is general, primarily because the type of work our members do is usually not high-end appraisals. Our members are trained for the everyday estate sale.”
But the problem isn’t just that many dealers can’t give you an accurate appraisal. It’s also that they shouldn’t. Austin-Gillis says that you probably shouldn’t seek an appraisal from anyone affiliated with an antique store or gallery. “Only someone who’s not going to buy or sell the property will give you its true value,” she says. Your best bet? Do your research and educate yourself, says Patricia Hefner, treasurer of the International Society of Appraisers. And seek the help of a reliable dealer (they do exist). Look for someone who is willing to educate customers and who works toward cultivating relationships, not just turning a quick profit.
If you’re a regular on the flea market circuit, you know that there’s no shortage of reproductions out there. “If it’s repro-able, they’re doing it,” says Pat Garthoeffner, adding that she was once at an “antique” show where there was a rug on sale for $1,200 that she had bought at retail store T.J. Maxx for $36.
The trouble is that even some professional dealers can’t tell the difference between a fake and the real thing. Donna O’Brien, a dealer in Brownsville, Tenn., admits that she was taken earlier in her career when she purchased what she thought was an authentic Qing Dynasty figurine for $100. “Since then, I’ve been in stores in Memphis and seen the exact same piece,” she says. “And when you see six of them sitting on the shelf, that’s a dead giveaway.” And O’Brien is pretty sure she’s not the only dealer who’s been had. “I’m in good company,” she says. “They say even the experts at Sotheby’s have been fooled.”
Part of the problem is that the word “antique” covers a lot of ground. There’s furniture, jewelry, art glass, and the list goes on. Any buyer who expects her dealer to be knowledgeable in too many areas is dreaming. Says Gary Espinosa, vice president and director for the auction house Bonhams & Butterfields, “A person who can answer a question on any object is a person you should stay away from.”
Given that you can’t count on your dealer to be certain of what he’s selling you, the last line of defense is a written guarantee. But not every dealer will be willing to provide one. Sander says that your request might be met by a suspect dealer with resistance or a simple “no”; just as likely, the dealer may try to hedge his bets by saying, “That’s what I believe the piece to be.” In that case, caveat emptor.
As a buyer you should demand more, say the experts. “A dealer should be 100- percent willing to describe the condition in full and guarantee things,” says Leigh Keno, a dealer in New York who is known for his appearances on the PBS series Antiques Roadshow. A true guarantee, he adds, should include a detailed description of the item, when it was made, and what parts, if any, have been repaired or replaced. Armed with that documentation, you can be sure you’ll get a full refund if the item turns out to be something other than what you—and your dealer—thought it was.
If you’re buying something used, repairs are usually a good thing, right? Not when it comes to antiques. Many types of repairs can seriously reduce an item’s value. Not only that, you may need to look closely to detect any artful touchups. For Lyn Fontenot, author of Antique Furniture: How to Tell the Real Thing From the Fake, it was the early morning light that tipped her off. While delivering a lecture in Puerto Rico, she stopped in an antiques shop and found what she thought was a very special piece—a 16thcentury Italian wood carving. Intrigued, she asked the dealer to send the carving to her hotel room so she could examine it more closely the next day. When she did, she found that about half the carving had been replaced and some of the wood cuts were made by a modern saw.
While the repairs may have made the piece look better, they had the opposite effect on its value: Untouched, the piece would have been worth about $7,000, notes Fontenot; with the repairs, its value dropped by roughly 60 to 70 percent. Even a simple cleaning can make a big difference. When looking at wood furniture, for instance, be sure to ask specifically if anything has been done to the surface, since a cleaning that improves a piece’s finish could strip away much of its value. Keno points out that a piece of 18th-century furniture that has been overly cleaned could see its value cut from $100,000 to $20,000 as a result.
While a turbulent stock market may lead you to seek the safety of investing in a piece of well-built furniture, be forewarned: The bulk of what’s for sale in the antique market is not going to appreciate at any dizzying rate. “I don’t think that people should be buying antiques as investments,” says Lincoln Sander. But what about those people you’ve heard of who made money buying high-quality antiques? For the most part, they’ve held on to their purchases for a very, very long time. “I think that the people who have done well from a financial point of view are those who bought [antiques] with the intention of never selling them,” Sander says. “They bought them with the idea that they would take them to the grave.”
While you may not need to take it that far, don’t expect to turn a quick profit either. “In the vast majority of cases, you’re going to need to keep a collection together for probably at least a minimum of 10 years,” says Kyle Husfloen, editorat- large of Antique Trader magazine, and maybe “up to 25 years or more, to see any important escalation.” Most of all, be aware that an item’s value will ebb and flow with its popularity. “If you invested in Beanie Babies,” says Rudy Franchi, a collectibles appraiser who makes regular appearances on Antiques Roadshow, “you would be up to your ass in them now.”
No businessperson wants to be sued. But for an antique dealer, the prospect is particularly unpalatable, since most are sole practitioners in a business where reputation reigns supreme. Antique dealers “live by their reputations,” notes John Collins, Jr., a rug dealer in Newburyport, Mass. “No one wants unhappy customers.” All of this adds up to one truth: If you think you’ve been had by a dealer, don’t throw in the towel, even if you failed to get a written guarantee.
Marshall Fallwell, Jr., has been called on dozens of times to do appraisals for clients who have bought “antiques” that turned out to be fakes. And in every case, he says, those who have gone back to the questionable dealer with an appraisal in hand have gotten their money back. Yet despite this incredible success rate, Fallwell still finds that some clients who have been taken just “go off and lick their wounds.” Don’t be one of them. “I think they see having gotten nailed as an indictment of their own taste,” Fallwell says. “Somehow if you have the taste and money to buy those things and you get a fake, that means that you really don’t have that much taste. And that, of course, is absurd.”
Remember that rosewood cabinet your decorator said would be fabulous for your living room? Well, it’s possible that she had another motive besides making your home look its very best. It’s common practice for an interior decorator to offer to do your antique shopping for you, either recommending that you buy a specific piece from a certain dealer or simply going out and buying it for you. And especially when the decorator and the dealer have an established relationship, the decorator in many cases will earn a commission for her trouble.
Some in the business consider “commission” a generous description of said payment. “Do decorators get kickbacks from antique dealers? Oh, my goodness, all the time!” exclaims one New England appraiser. The trouble is that such an arrangement sets up an inherent conflict of interest, putting the decorator in a position to benefit financially from buying certain pieces from certain dealers. As a result, you should make sure that your decorator discloses any such payment arrangements—before the shopping begins.
There’s no question that public interest in antiques has gone up in recent years. “Everybody and his kid brother now has a tax number and is a professional dealer in old stuff,” Fallwell says. But, he adds, what they’re selling often isn’t antique, “because there aren’t that many antiques left.” So what exactly makes a piece an “antique”? Contrary to what most people think, the term isn’t simply synonymous with “old.” In fact, it’s generally accepted that to qualify as antique, an item must be at least 100 years old. And by that definition, the 1930s art deco desk you just shelled out for doesn’t qualify.
The trouble is that dealers know most shoppers aren’t aware of the distinction. Armed with that knowledge, many will overuse the word “antique” to get buyers inside the shop, where much of what is being sold today should really be referred to as “collectibles”—that is, stuff that’s less than a century old whose value has been enhanced by widespread interest—or “vintage”—a catch-all marketing category that covers anything roughly 30 years old or more. So why don’t dealers simply change their wording? Because “If the sign in front of the shop said ‘collectibles,’ people probably wouldn’t go in,” says Garthoeffner, the dealer from Pennsylvania.
As with most things, the Internet has totally changed the nature of the antique business. Whether you are looking to buy that last dish to complete your collection or unload a Queen Anne chair that you’re tired of, you’re no longer confined to doing business with your local dealer. The Internet allows a skittish buyer to educate himself without being at the mercy of the dealer and also links up a huge community of buyers and sellers in a quick and seamless way. Sites like PriceMiner.com and Artfact.com provide reams of information for buyers who just want to know a little bit more before they plunk down their credit card. And, of course, there’s always eBay, which, because of the enormous amount of traffic it gets, is often the perfect venue for those trying to sell their wares for top dollar.
David Amer, a collector of “pre-casino” Atlantic City memorabilia, knows just how valuable the Internet can be. After spending five or six years schlepping from shop to shop looking for a few specific items to round out his somewhat obscure collection, Amer had great luck in just two weeks after posting a listing online. His greatest coup? Finding silverware from the now-defunct Ambassador Hotel, where his mother worked as a pool attendant decades ago. “There was a slim chance in hell that I would have walked into the right antique store” and found that, Amer says.
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.
What a difference a crash can make. After labeling hedge funds as risky for years, fund companies now think their tactics are the answer for smaller investors. It’s easy to see why. Last year, hedge funds were down an average of only 20 percent—bad, but nowhere near as bad as the 37 percent loss for the average stock fund.
Already, the hedge fund look-alikes, often called alternative or tactical-allocation funds, make up 5 percent of the 346 funds launched in the past year, according to Morningstar. Their names and strategies can be confusing, but the basic idea is simple: By mimicking the flexibility enjoyed by hedge funds, mutual funds are giving themselves “an expanded tool kit” to deal with the ups and downs of the market, says Karen Dolan, Morningstar’s director of mutual fund analysis.
Their approaches run the gamut. They sell stocks short to profit when stock prices fall, borrow money to increase the capital they have to invest and try to time the market. Turner Investment Partners’ new Spectrum fund attempts to limit volatility with six “long-short” strategies the firm has been using for its partners’ money. The more-aggressive Legg Mason Partners Permal Tactical Allocation fund (LPTAX) goes in the other direction, trying to take advantage of market volatility by switching between global asset classes. Yet another approach comes from hedge fund heavyweight Cliff Asness, whose firm AQR Capital Management launched its Diversified Arbitrage mutual fund (ADANX) to profit from the price swings associated with mergers.
How useful are the new funds? Financial planner Harold Evensky says he’s been looking at the Diversified Arbitrage fund to add diversification to clients’ portfolios. Others are more skeptical. While hedge funds typically limit withdrawals, these new mutual funds don’t carry such restrictions, which could dampen performance, says Jeff Ivory, partner at wealth-management firm Stonebridge Financial Partners. And though less expensive than hedge funds, the new funds are not exactly cheap. Permal’s new fund has a 5.75 percent sales charge and a 1.75 percent expense ratio — so an investor starting with $10,000 would pay a $575 sales charge and $175 in fees in the first year alone.
Some question whether the spate of alternative offerings is just the latest industry pitch to bolster assets. The Mutual Fund Store’s Adam Bold suggests using precious metals or energy stocks to diversify and good old cash to reduce volatility.
Fund Ticker Investment Strategy
AQR Diversified Arbitrage Fund ADANX Strategies include buying shares of takeover candidates and shorting shares of the acquirer.
Legg Mason Partners Permal Tactical Allocation LPTAX Can invest anywhere — even in hedge funds.
Turner Spectrum Fund TSPCX Unlike many mutual funds, can borrow money to boost returns.
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.
As a local at the Chicago Board of Trade, a wise trader once told me that the market aims to hurt as many speculators as possible. That's especially true, it would seem, when it's being manipulated by political, rather than economic, forces. Witness the market for government debt, which, despite efforts to keep rates lower, has suffered losses in 2009 as yields have climbed.
On Wednesday, Federal Reserve Chairman Ben Bernanke told lawmakers that "The Fed believes that a highly accommodative stance of monetary policy will be appropriate for an extended period." That means low interest rates, with the hope that will stimulate demand and pull the economy out of recession.
At the same time, Bernanke assures us that "we have the tools to raise interest rates when that becomes necessary to achieve our objectives of maximum employment and price stability." Indeed, there is almost uniform consensus that the historically low interest rates forced by the Fed will be unwound, perhaps as early as 2010.
For savers, this uncertainty coupled with today's miniscule yields presents a problem. Do they keep their assets in money markets while waiting for higher rates, or do they lock in today's meager long-term yields in the event rates drop or stay at low levels? Nobody feels great about buying a five-year CD that yields 2.94%, that is, unless they know the same five-year CD will yield 1.94% a few months down the line.
Japan also had a stock and real estate boom in the late 1980s. After boom turned to bust in the early 1990s, the government also took measures to stimulate the economy, with the Japan central bank setting interest rates at approximately zero. Not unlike the U.S., Japan also made extraordinary efforts to subsidize failed banks, leading to a slew of firms known as "Zombie Banks" — fundamentally insolvent institutions maintained only through government handouts. Kinda rings a bell, doesn't it?
Source: Rosewood Research
So far investors in Treasurys have lost money this year as rates have risen. And while I'm hard-pressed to allocate significant dollars to long term-bonds at a time in which government-fueled inflation seems almost inevitable, I'm struck by how many people seem to be waiting, wagering on higher rates.
Consider that Proshares UltraShort 20+ Year Treasury ProShares (TBT), the ETF designed to rise when long-term rates rise, trades significantly more volume and boasts nearly double the assets as iShares Barclays 20+ Year Treasury Bond (TLT), which owns long-term government bonds.
Knowing my old trading mentors warning about the market looking to hurt as many speculators as possible, I can potentially imagine a scenario in which the United States essentially follows Japan's post-bubble path, leading to years of trendless and choppy equity markets and ultra-low interest rates just at a time in which older investors are reaching for income. While it seems impossible today that rates could go much lower, in 1992, with the 10-year Japanese Government bond yielding 5%, I sincerely doubt many investors thought it would be below 1% 10 years later. The Nikkei 225, which closed at 38,957.44 on Dec. 29, 1989, traded this week at 9700 — a drop of 75% over almost 20 years.
One approach fixed-income investors might consider is the barbell strategy, which we first outlined more than five years back. The barbell strategy is named for the shape it creates on a chart of maturities — splitting your bond allocation between very short-term and very long-term maturities. The short-term investment provides the liquidity, while the long-term maturities afford the majority of the yield. The net effect is to create an intermediate-term return with considerably more flexibility.
If rates rise, investors are able to use both the short-term liquidity and income from the longer-term bonds to reinvest in securities with higher rates. If yields drop, as they did in Japan, an active investor can follow the trend by attempting to add additional long-term bonds on the way down.
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.
After spending nearly a decade playing defense with stable firms, often in consumer goods, the father-and-son team at the Yacktman Fund has made a 180-degree turn.
Over the past year, Donald and Stephen Yacktman have gone on a shopping spree for unloved firms — from subprime auto lenders to battered media firms. And so far, the bets have paid off with the Yacktman Fund (YACKX) up 29% this year, beating peers by 27 percentage points.
That type of return is not new for the Yacktmans, whose two funds have ranked in the top percentile over any time period — from year-to-date to 10-year returns, according to fund tracker Morningstar. Their secret: Focusing on price as they hunt for good businesses and management teams — just as the duo always has. The Yacktmans view stocks through the eyes of a bond manager: assessing the cash and earnings the investment will generate if they hold it indefinitely.
“If you go back and read the stuff I said 15 or 20 years ago, you’ll find a lot of similarities,” says Donald Yacktman, who is co-manager of the flagship fund and the Yacktman Focused (YAFFX) fund.
For years, the best bets were often in names like Coca-Cola (KO) and Procter & Gamble (PG). But as stocks became pricey and crisis loomed, the Yacktmans parked more of their assets — about 20% — in cash around the market’s peak in late 2007. The move helped them escape the downturn in much better shape than their peers (down just 26%).
Since the crisis, the managers have been on a shopping spree, with its cash comprising 11% to 14% of its assets at the end of June. The Yacktmans use each big downturn to plow money into more companies — from media firms like Viacom (VIA.B) and News Corp. (NWS) to retailers like Abercrombie & Fitch (ANF) and Williams-Sonoma (WSM). (SmartMoney.com is a joint venture between Hearst and News Corp.) In Abercrombie’s case, the retailer’s margins are fat enough that it could suffer 20% sales drops for a year or two and still be fine, says co-manager Stephen Yacktman, 39.
The managers have also picked up the debt of companies like Limited Brands (LTD) and Interpublic Group (IPG) and doubled their money in a matter of months. And after the slide in March, the fund managers picked up health care names like Pfizer (PFE) and Covidien (COV).
While the fund’s turnover is still low by most measures, it is creeping higher. The managers are willing to sell a stock if the market makes them the money they wanted in months, rather than years, and then use the cash to buy another stock. “While I’m willing to hold it forever, it doesn’t mean I need to hold it forever. The world changed and prices changed,” says the younger Yacktman.
The funds, which are concentrated and hold fewer than 50 stocks, could be more volatile going forward since they are holding a lot less cash than in the past, says John Coumarinos, a mutual fund analyst at Morningstar. That said, the elder Yacktman, 69, welcomes more swings in the market. “Volatility is the friend of value investors," he says.
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.
As vacations beckon in the remaining weeks of summer, here are several books that explore ways in which to reconsider your leisure time, your working life and your financial future. In our latest roundup, SmartMoney's editors and writers recommend books ranging from an exploration about the satisfaction of craftsmanship, to one figuring out the fundamentals of investing, to a memoir examining a life filled with astronomical achievement and earthbound despair.
Here are six of our latest picks:
Shop Class as SoulcraftAuthor: Matthew B. Crawford
Reviewed by: Will Swarts, Reporter, SmartMoney.com
In his brief but densely referenced celebration of the manual arts, philosopher and motorcycle mechanic Matthew Crawford takes on the nature of work and its inherent value to the individual who performs it. Less turgid than a treatise and smarter than a screed, this insistent essay, critique and exultation of the craftsmanship and virtue of careful, precise labors — in Crawford's case, the proper and thorough repair of motorcycles — champions the worth and meaning of practical experience, a quality he finds sorely lacking in today's "knowledge workers."
Crawford quit a prestigious think tank and abandoned academia to find greater satisfaction in motorcycle repair work, but “Shop Class” also reflects the breadth of his book-learned influences. Citing everyone from Aristotle to Heidegger, with plenty of sociology and historical critique mixed in, he explores the need for, and the paths to, meaningful work for which one can take full responsibility. This is a bracing retort to the alienation of an office job. With Wall Street's fortunes at an ebb, Crawford might convince at least a few drones to flee their cubicle walls and find deeper satisfaction toiling in lift bays, confident that the results of their labors are tangible — and rooted in a personal sense of craft.
The Little Book of Main Street MoneyAuthor: Jonathan Clements
Reviewed by: Dyan Machan, Senior Writer, SmartMoney
"The Little Book of Main Street Money" is aptly named: At 5 by 7 inches and under 200 pages, it's unintimidating to all but the most hopeless finance-phobics. The book is also written in spare and concise language. Clements's style will be familiar to many from his years as a personal-finance columnist at The Wall Street Journal. Now Clements is director of financial guidance at Citigroup's personal-finance group.
In “Little Book of Main Street Money,” Clements's sure-footed advice on fundamentals is comforting after last year's meltdown. When he strays toward more opinionated views, he's even better: Investing in your house will historically offer you a lackluster 4.7% annual return. Or, to those buying insurance as an investment: "So sorry to hear it." Clements also reminds us, "The harder you try to beat the market, the more likely you are to fail, thanks to the investment costs involved." Best of all, Clements isn't only a sound financial planner, but something of an armchair shrink. Beating the market isn't what it's all about. It's more about meeting your personal goals and achieving peace of mind: "We should strive to ensure money is enhancing our lives, rather than getting in the way."
Free: The Future of a Radical PriceAuthor: Chris Anderson
Reviewed by: Miriam Gottfried
The business model of the future will be to give things away free, says Wired magazine editor Chris Anderson. Despite this claim, most of his examples — YouTube, Facebook and online games, to name just a few — are from the present. Anderson's book is more a snapshot of the current state of affairs than a prognostication. He charts how the abundance created by the transition from selling physical products to digital bits has brought the marginal cost of many items to near zero.
Anderson makes a convincing case that more companies are shifting to Free (Anderson capitalizes the “F”), but he doesn't say how profitable these strategies are. So, struggling old-line media companies — newspapers, broadcast television and Anderson's own magazine – won't find any solutions here. But readers will find inadvertent examples of Anderson's argument: This already-provocative book stirred further controversy after claims that Anderson plagiarized certain passages in it from Wikipedia. (Critics suggested he took the "free" theory too literally; Anderson said it was a mistake.) Anderson's book is worth a read, if only to weigh in on the current debate.
Labor DayAuthor: Joyce Maynard
Reviewed by: AnnaMaria Andriotis, Reporter, SmartMoney.com
For many of us, summer fuels a nostalgia for our carefree youth. In her new novel, Joyce Maynard brings that youth to life, through the voice of a 13-year-old boy over a long weekend in 1987. And it's anything but carefree. Like many coming-of-age novels, this one begins when a stranger enters the closed-off lives of a family, here young Henry and his mother Adele. Newcomer Frank becomes both a father figure to the boy and lover to his mother, and brings with him a shameful past and a capacity to change others.
Maynard, the author of five previous novels ("To Die For" and others) as well as nonfiction that includes a bestselling memoir of her youthful affair with reclusive author J.D. Salinger, has created in Henry a narrator with a long literary tradition: the observant, confused adolescent. Unlike Salinger's iconic Holden Caulfield, however, Henry is not ironically alienated. He will be recognizable, though, to a generation of readers familiar with single-parent homes and the children in them longing for connection. Maynard details Henry's roller-coaster emotions for Frank – he is both jealous and grateful – and his mother's emotional journeys – with skill and tenderness for the uncertain willingness of broken hearts to mend. The poignant results are revealing of our ability to forgive and to grow.
Magnificent Desolation: The Long Road Home from the MoonAuthor: Buzz Aldrin with Ken Abraham
Reviewed by Thomas E. Weber, Editor, SmartMoney.com
For the 40th anniversary of the Apollo 11 mission comes this memoir from Buzz Aldrin, the second human being to set foot on the moon. There's plenty to keep space fans happy: Aldrin shares his key moon-landing memories and lays out his ideas for America's future space strategy. But there's another side to this book, and for many readers it will be at least as thought-provoking as all the rocket talk. Aldrin recounts his well-known struggles with depression and alcoholism after returning to Earth. It's the tale of a man who worked relentlessly to achieve a goal only to realize he didn't know how to move forward. For anyone who has wondered what to do with success, or who has grappled with adversity, it's a reminder that some human frailties are universal — even for a moonwalker.
(Read SmartMoney's recent interview with Aldrin here along with a look at the big companies that sent America to the moon.)
The Birthing HouseAuthor: Christopher Ransom
Reviewed by: Robert J. Hughes
Adjustable-rate mortgages are frightening indeed, but what about the underlying property? This debut novel by Christopher Ransom gives a new spin to the venerable haunted-house story. Here, sometime screenwriter Conrad Harrison makes a mistake common to many potential homeowners: not doing due diligence on a house with great curb appeal. His second mistake? Figuring a house will be just the thing to save his troubled marriage. After the couple move into that old Victorian in a pretty Wisconsin town, Conrad's wife flees it for a sales conference in another state, leaving Conrad unsupervised. He befriends the pregnant daughter of neighbors and looks after her when they go off on their own trip. The daughter also has a seriously unstable, jealous boyfriend.
Did we mention the house itself, with its sounds of crying newborns, its fleeting glimpses of a figure in the dark? The old photographs of a woman who looks like Conrad's wife? Or the garage, where Conrad keeps his rare pet snakes? Ransom has a distinctive narrative voice, and a Stephen King-like gift for the dreadful lurking behind the everyday. Throughout the novel, we're not sure whether something is very, very wrong with the house…or with Conrad. The novel builds to a gripping climax that will make you think twice, maybe three times, about making an offer on that beautiful old fixer-upper.
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.
Reuters - Amazon.com Inc posted a 10 percent decline in second-quarter earnings and gave a modest third-quarter outlook on Thursday, taking the shine off the world's largest online retailer and sending its shares down nearly 7 percent.
$$$ Matthew Goldstein: Mack Is No Blankfein, Thankfully [Reuters]
$$$ Has Carl Icahn given up blogging? [Cityfile]
$$$ Be the flyest bitch on the desk: buy the Bernie Madoff jumpsuit. [AA]
$$$ A curious nomination [True Slant]
$$$ The Backlash to the Macklash [Daily Intel]
$$$ HSBC's Hedge Fund Hope [FTAlphaville]
The Chairman of the Senate Banking Committee gave a little glimpse into the thought processes coming from the Washington braintrust as they craft risk management legislation. While keeping people alerted to the possibility that the bailout beast may hiccup again and throw some support CIT's way, Dodd also offered his two cents on the topic of risk management and the rationale behind the need for things like the CFPA.
"There is an important signal for shareholders and others out there who invested their resources and have been hurt terribly by what's happened," Dodd said. As an investor, "I'd want to know whether we're keeping the same people around that watched the value of my investments decline so precipitously."
Evidently having completely unhedged long exposure is the hallmark of prudent risk management that all forthcoming regulation should seek to enhance.
AP - Investors celebrated news of another jump in home sales by propelling the Dow Jones industrials to their first close above 9,000 since January.
CDS target practice starts next week with a proposal that may call for banning naked CDS trades. Lawmakers will get their opportunity to shine and add to their distinguished track records identifying the risks in sophisticated financial products. For example, people should rest easy that House Agriculture Committee Chairman Collin Peterson, sponsor of such pieces of CDS-related legislation as 'Amending the Rules of the House of Representatives to clarify the treatment of reimbursements to Members for the use of personally owned airplanes in the performance of official or campaign travel' as well as the unforgettable 'To suspend temporarily the duty on certain engines for snowmobiles' will help to decide the conditions under which the multi-trillion dollar market operates.
Have you sort of felt, for the last year, that the Journal wasn't doing a very good job addressing the real issues surrounding the crashing of the global economy? Sure, they've kept us abreast of which CEO's are taking the jets out for rides on the company dime, and who's getting big ass bonuses straight from the taxpayer pocket, but it's mostly just been frivolous bunk. I don't know what happened over there last night, but today the paper has finally printed a substantive story that gets to the heart of the matter of the danger that lurks among us, and how not until we fix it will there be a true recovery. We're talking, of course about a Page One exposé on your cankles. That's right: your fat fucking ankles. The fat located between your foot and your calf. Need a more clinical description?
Cankle, a portmanteau word combining calf and ankle, refers to "the area in affected female legs where the calf meets the foot in an abrupt, nontapering terminus," according to Urban Dictionary. A spokeswoman for the American Podiatric Medical Association says the word is not a medical term.
Are you so in denial that you have no idea what we mean? Here, the Journal will draw you a picture:
The UBS tax saga seems to have really thrown Switzerland out of its sweet spot. Having defined itself as a place that doesn't choose sides and simply exists in a neutral, grey area, the heat the country has taken over the past several months for helping Americans (and many others) avoid the tax man has forced its hand. In a somber moment today, the Swiss initiated a double-taxation treaty with Finland which now sets the stage for the country's removal from the G20's "grey list" of uncooperative tax havens. For those looking to stash funds (real or fake) in a place that won't automatically set off alarm bells, your remaining grey list choices are Luxembourg, Austria, Belgium, and for the Latin American set, Chile.
Nothing has actually been done yet (why rush themselves?) but ABC News reports that the Securities and Exchange Commission is most definitely leaning in the direction of showing Joe Cassano and the AIG Financial Products team they mean business. Actually, that's not true that the regulator hasn't done anything-- the SEC has sent strongly worded letters to the possibly guilty parties making it clear that they intend to make Joe and Co pay, which should count for something. How bad? Money-wise, not bad at all. Fines could amount to $1 million, if that, but what is really upsetting and, we think, a bit extreme, is that these guys might lose their professional licenses, which could make finding new gigs kind of difficult. That's sure to weigh on JC during today's bike ride.
The recession is officially over. At least, that's what Canada's central bank is saying. About Canada.
In the Bank Of Canada's latest monetary policy report, it said that Canada's gross domestic product will grow at an annual rate of 1.3 percent this quarter, up from an earlier forecast of a 1 percent contraction.
According to the bank, much of the growth is attributed to higher-than-expected Canadian consumer and business confidence. Still, the bank says total recovery will be slow and fragile. The Canadian economy is still far too interlinked with the American one to completely recover until the U.S. does.
» E-Mail This » Add to Del.icio.us
If Ken Lewis has his way, yes! For the Victorians in Charlotte, this will come as a huge disappointment. For the Hasselhoffs (pictured at left), get psyched. From Bank of Amerillwide HR tips line:
Thought everyone should that George Ellison, the George Ellison whose behavior in Vegas a few years back scarred employees into leaving BAC for UBS (after they were threatened to keep it on the DL), is third in line to take over at Bank of America, having been promoted by Ken Lewis all these years and supported by Lewis no matter what. He's also overseeing public bailout monies, which are probably going towards hookers and blow.
Update: Don't break out the blow just yet:
Ellison does not manage the bailout money and he definitely isn't under consideration to for KLs job. Ellison is a life long investment banker that currently manages structured finances. He lack of corporate banking experience combined with his very well known personal issues will never pass the board.
As California lawmakers vote today on the proposed $15 billion solution to the $26 billion problem, the Governator may want to consider sticking to the ongoing efforts to make the IOU the common currency. In a state where a "native" is somebody that moved there more than 5 years ago, some of Arnold's proposals may make even the most diehard transplants think twice about whether or not the California lifestyle makes up for the state's fiscal idiocy.
Two of the more desperate plans under consideration to save money and sell everything it can to raise cash are releasing up to 27,000 prisoners and allowing new drilling for oil off the coast of Santa Barbara. With the recent passing of tax legislation on medical marijuana in Oakland, the state find itself one step closer to legalizing and taxing pot altogether. At this rate, the true image of the Golden State will be a bunch of baked ex-cons surfing through black sludge on their way back to squatting in foreclosed McMansions.
It probably seemed exciting to those of you not intimately familiar in the ways of Jews from the Garden State but this thing really didn't elicit much more than a NBD from us this morning. Money-laundering? Rabbis? Shady politicians? Welcome to my childhood. Now, our interest has been piqued, not so much because of the dead bodies but the notion that you could make an entire career out of peddling this shit:
The probe also involves the trafficking of body parts, according to a person familiar with the matter. One of the individuals who was arrested Thursday morning is an alleged organ dealer, this person said.
My current hometown, Hoboken, N.J., has been dealing with the recession much like the rest of the country. I've watched small stores and major chains alike close up shop and disappear. A few months ago there were so many empty spaces on our unofficial main street, Washington, that the city's mayoral candidates set up their offices there.
The two leading mayoral candidates, Dawn Zimmer and Peter Cammarano, both promised to reduce the "crushing tax burden," and the talk of the town was how they would do that. The election was so tight it was decided by just 161 votes.
Maybe Cammarano would come through on his pledge to lower taxes, balance the budget, create a "glove-box guide" for small businesses and push to "hold developers accountable, ensuring that they are delivering what is promised."
This morning the headlines told a very different story: "Cammarano Arrested." Hoboken's freshly inaugurated mayor has been accused of taking $25,000 in bribes in return for promises to speed up the zoning approval for a proposed development. Mayor Cammarano was arrested along with the mayors of Seacaucus and Ridgefield, the Jersey City deptuy mayor, council president, two state assemblymen other public figures and five rabbis as part of a federal corruption and money laundering probe.
Here's a bit from the U.S. Attorney's office -- "CW" means cooperating witness:
"The CW then stated that "I have some properties we're working on together, me, uh, [the Consultant] and [JC Official 1]. Just make sure I got you're support . . ." to which defendant Cammarano stated "[y]up. I'll be there." The CW finished his request by adding ". . . and expedite my stuff," prompting defendant Cammarano to repeat "I'll be there." The CW then thanked defendant Cammarano and informed him that "next week, I don't know if you want to meet Wednesday or Thursday, but whenever you want, I'll give you -- I'll do another five [thousand] for you." Defendant Cammarano joked, referring to the election to be held on Tuesday, "Maybe after, uh, we sleep in a little bit on Wednesday."
There were so many arrests today that law enforcement officials needed two buses to transport Cammarano and the others to the FBI's Newark field office.
» E-Mail This » Add to Del.icio.us
Goldman Sachs, which received $10 billion in government assistance under TARP, is now officially standing on its own again. It paid back the $10 billion with interest, and has now bought back the stock warrants the government had been holding.
The Congressional Oversight Panel had raised concerns the government was selling those warrants too cheaply, which could cost taxpayers $2.7 billion if things didn't change.
Elizabeth Warren, who chairs the panel says that this time, the price was fair.
Linus Wilson, a finance professor at the University of Louisiana, wrote us with his own numbers:
The Goldman Sachs TARP warrant deal is the best deal that taxpayers have got to date. Since at least April 2009, representatives from Goldman Sachs have said that taxpayers deserve a fair return for their investments. They lived up to their word today.
The price paid ($1.1 billion) is very close to my middle estimate.
Low $947 billion
Middle $1,120 billion
High $1,349 billion
This is based on 7/21/2009 closing prices. I used the option pricing models of Black-Scholes and Merton with adjustments for dilution.
A Treasury spokesman says that overall, the Goldman Sachs investment/bailout made taxpayers an annualized return of 23.15 percent.
You can read more about the pricing models in the Congressional Oversight Panel report.
» E-Mail This » Add to Del.icio.us
This picture comes to us from @scotthendo via aeikenberry. Could the hours on the treadmill have been cut down because of the recesssion?
I called up the charity-walker in the picture, and it turns out that the sign was mostly a joke. David Schoenenberger of Carmel, Ind., tried to walk for 24 hours straight last year to raise money for March of Dimes. It proved too exhausting, so he committed only to 12 this year.
Still, he says the recession hurt his fund raising -- last year, he pulled in $650, this year only about $200.
"People want to give," he said. "But places that gave 30, 40, 50 dollars last year, gave five this year."
» E-Mail This » Add to Del.icio.us
The folks at the Bureau of Labor Statistics have released their County Employment and Wages Summary, and it looks like good news for people living in the city of St. Louis. According to BLS, from 2007 to 2008, average weekly wages in that city (which confusingly is also a county) rose from $962 to $1,508 -- a whopping 56.8 percent. That's a gigantic jump compared to the rest of the country. The next-highest wage increase, in Clayton, Ga., is only 9.9 percent, and the U.S. average rose only 2.2 percent.
But city officials call the number a recession-induced aberration. The bump came because several area companies, notably brewer Anheuser-Busch, downsized and offered thousands of laid-off workers a series of buyouts and severance packages.
The big shakeup in St. Louis was the purchase of Anheuser-Busch by Dutch Belgian brewer InBev a year ago, a city official says. InBev attempted to cut costs, and introduced a meritocratic system for remaining employees -- including bonuses.
BLS incorporates bonuses and severance pay into wage statistics, so the combination of both led to a huge -- and largely artificial -- bump. Now that the layoffs are done and the severance packages have likely run out, it will be interesting to see what the wage figures for this year will be.
Meanwhile, Elkhart, Ind. -- and its devastated RV industry -- is at the bottom of the pack, with an 17.8 percent decrease in average weekly wages.
» E-Mail This » Add to Del.icio.us
Trending downward? Not necessarily. Department of Labor
New claims for jobless benefits rose last week, to 554,000 from 524,000. The Department of Labor revised the number from the week before upward by 2,000.
It's hard telling what to make of the numbers just yet. The Department of Labor says it can't properly figure the total of new claims because of unusual conditions in the job market.
Last week's report had new jobless claims at the lowest level since January, but the DoL has been warning people not to take the numbers at face value.
That's because the DoL makes allowances in its formula for layoffs in the auto industry at this time of year, when plants typically shut down and retool for new models. As economist Ian Shepherdson writes:
Fewer people than usual were laid off temporarily in early July -- despite terrible auto sales -- because so many were laid off permanently during the spring meltdowns at GM and Chrysler. Hence, seasonally adjusted claims plunged. Now this effect is reversing.
Last week's raw, unadjusted figures showed a rise of 86,389 new claims. This week, it's down by 90,298. In just a couple of weeks more, the numbers should start to get more reliable. Shepherdson and company expect to see another big jump next week, back over 600,000, before the DoL formula gets back on the rails.
» E-Mail This » Add to Del.icio.us
Another major company is reporting its revenue is down but its profits are up. Ford checks in today with a second quarter report that shows $2.3 billion in profit, a world apart from last year's second-quarter loss of $8.7 billion.
Ford's overall revenues fell $38.6 billion to $27.2 billion. The company credits the improved bottom line to a timely restructuring of its debt.
» E-Mail This » Add to Del.icio.us
The talk at my New York City breakfast table this morning was all about air-conditioning, and specifically our family's choice to see how long we can go this summer without it. Call it our concession to the recession, but it probably has as much to do with the hassle of wrangling the window units into place during a season that just hasn't been that hot.
And we're not alone. People in hot places like the Deep South are saving money by giving up the A.C., the New York Times reports:
Genma Holmes, a 42-year-old mother of three in Nashville, and her husband, Roger, declared their suburban ranch house a no-air-conditioning zone last summer as surging gas prices ate into the profits of their pest control business. Their children -- now ages 17, 18, and 23 -- were not amused, given that average summer temperatures in Nashville are in the high 80s with around 90 percent humidity.
"They didn't look at it from our economic point of view," said Ms. Holmes, who ripped the thermostat from the wall after her offspring repeatedly turned on the central air while their parents were out. "They thought we were doing something to them personally. They thought mom and dad were going through some kind of midlife crisis, like when we recycled before everyone started doing it."
» E-Mail This » Add to Del.icio.us
Economic downturns aren’t only about damage. Throughout recent history, opportunistic companies have taken advantage of downturns to launch brands that enjoyed success for decades to come. Using timing and ingenuity, these 9 successful brands turned downturns into windfalls.
Rice Krispies
More than 75 years later, Kellogg’s Great Depression-era brand remains a hit.
When the Great Depression hit, Post cereal cut back heavily on ads in order to conserve money. Kellogg, Post’s main competitor, did the opposite. The company poured money into ad campaigns, creating a new cereal called Rice Krispies. Snap, Crackle, and Pop helped boost Post’s profits by about 30% by 1933, according to the New Yorker’s James Surowiecki. Kellogg remains on top to this day.
Plymouth
Chrysler overtook Ford as the country’s second-biggest automaker in 1933, thanks to Plymouth cars.
Plymouth, launched as a separate brand 1929, was Chrysler’s first foray into the low-priced market. The cars’ crowd-pleasing features, which included hydraulic shock absorbers, helped it become one of the Great Depression’s only successful car brands.
Miracle Whip
Kraft’s cheaper version of mayonnaise become an instant hit during the Great Depression.
Max Crossett must be rolling in his grave. The Washington state-based inventor of Crossett’s X-tra Fine Salad Dressing sold brand rights to Kraft in 1931 for $300. Kraft rebranded the stuff as Miracle Whip, then sold it as a cheap mayonnaise alternative. It became the nation’s bestselling dressing in only six months, writes the New Yorker’s Surowiecki.
iPod
Apple launched one of its flagship products during the 2001 recession.
Steve Jobs unveiled the iPod in October 2001, when the country was still reeling from the September 11 attacks. It’s now one of the decade’s biggest success stories. By 2005, Apple owned more than a quarter of the worldwide mp3 market. In April 2007, Apple announced it had sold 100 million iPods. Apple is on fire, thanks to its penchant to innovate in all kinds of economic climates.
FedEx
Federal Express launched just six months before the 1973 oil crisis, establishing a brand new industry amidst economic turmoil.
FedEx began with 14 small planes at the Memphis International Airport. Founder Frederick W. Smith hoped to address a market need for 1-2 day package and freight delivery, which at the time was very difficult. His plan worked. By 1975, the company became the number one carrier of high-priority goods and set a new standard for the industry it established, according to FedEx’s website. Today, the company’s couriers log about 2.5 million miles a day through seven global operating companies.
Healthy Choice
ConAgra’s low sodium, lowfat frozen meals became a hit during the early 1990s recession.
Former ConAgra CEO Mike Harper had a rather auspicious heart attack in 1989. He came up with Healthy Choice, a new line of frozen meals for health-conscious consumers, after reevaluating his own eating habits. The brand launched just in time for the 1989-92 recession. Sales reached $350 million, with 10% market share, in under three years, according to this BNet article. Today, Healthy Choice is successful enough to have Julia Dreyfuss as a spokesperson.
Hyundai
By providing the best warranties and guarantees in the industry, Hyundai is becoming a prominent US auto brand.
Previously plagued by quality issues, Hyundai righted its reputation by providing a 10-year, 100,000-mile warranty, previously unheard of in the auto industry. In 2008, it created the popular Hyundai Assurance program, which lets customers return their cars if they lose their jobs. The plan worked. The January, Hyundai’s US sales were up 14% compared to last year, according to Knowledge@Wharton. Between January-April of this year, its market share rose 0.7%. Not bad for an industry where double-digit declines have become commonplace.
Scott Paper Company
The Scott Paper Company’s napkins and paper towels became household staples, even though many products launched during economic downturns.
The Scott Paper Company (now part of Kimberly Clark) practically mastered the art of launching brands during recessions. Founded at the head of the 1879 US recession, Scott introduced the nation’s kitchens to paper towels in 1931. By 1939, it was the best-selling brand in the country, according to the Scott website. The company launched pastel-colored products and jumbo-sized paper tower rolls just in time for the 1958 recession. It remains a household name today, although one wonders how many more ridges and plies a company can create to mark up toilet paper.
9. Penguin Publishing
Quality books for cheap: A business model that endures.
In 1935, publisher Allen Lane came up with the idea to sell good books for rock-bottom prices. Penguin Publishing was the result. Lane made sure that his cheap, quality books found their way not only to bookshops, but to general stores, corner stores, and railways as well.
Before Penguin, paperback books contained gaudy, unliterary content. With his new model, Lane changed the game. Less than a year after launch, Penguin had printed one million paperbacks. Today, Penguin publishes globally through owner Pearson PLC, a London-based media conglomerate.
| World : News Archives | Business | Entertainment | Sports | Technology | Science | Marketplace Audio |
| India : News | Business | Entertainment | Sports | Telugu | |
| Blogs : Humor pages | Norkay's Blog | Kids Stories | Indian Recipes | Database Tech Blog |
| Sundries : World Video Clips | Songs Clips | Indian Video Clips | |
