World Business News Headlines for September 3, 2009

Easyjet to cut flights from Luton by 20%

Easyjet, the budget airline, is planning to cut flights by up to 20 per cent out of London's Luton airport and close its East Midlands base.

Source: Latest Business News from Times Online | 3 Sep 2009 | 5:28 am

Britain to lag world in emerging from recession

Britain's economy will lag other developed nations in emerging from recession, according to the Organisation for Economic Co-operation and Development (OECD).

Source: Latest Business News from Times Online | 3 Sep 2009 | 5:05 am

Services sector activity hits two-year high

Britain's services sector continued to recover in August, leading to rising optimism that the economy is returning to health.

Source: Latest Business News from Times Online | 3 Sep 2009 | 4:45 am

EU to probe Oracle's Sun takeover

The European Union launches a probe into the $7.4bn takeover of computer maker Sun Microsystems by business software firm Oracle.
Source: BBC News | Business | World Edition | 3 Sep 2009 | 4:36 am

Jobs at risk in Easyjet closures

Budget airline Easyjet says jobs are at risk as it cuts flights out of London's Luton airport amid a dispute over landing charges.
Source: BBC News | Business | World Edition | 3 Sep 2009 | 4:34 am

Europe flat, Asia mixed before rate outlook

European stocks traded flat and Asian indexes were mixed Thursday, as investors awaited a European Central Bank meeting where the ECB was expected to raise its outlook but signal that...
Source: RSS feed - channel BNewsBusiness | 3 Sep 2009 | 4:31 am

Europe flat, Asia mixed before rate outlook (AP)

AP - European stocks traded flat and Asian indexes were mixed Thursday, as investors awaited a European Central Bank meeting where the ECB was expected to raise its outlook but signal that interest rates will remain low for some time.

Source: Yahoo! News: Stock Markets News | 3 Sep 2009 | 4:31 am

Is commercial property on the up?

Investors caught up in the euphoria that surrounded commercial property funds in 2006 and 2007 will have found the past two years pretty sobering.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 3 Sep 2009 | 4:30 am

Dainippon to buy U.S. drug firm Sepracor for $2.6 billion (Reuters)

Reuters - Dainippon Sumitomo Pharma Co Ltd (4506.T) agreed on Thursday to buy U.S. drugmaker Sepracor Inc for $2.6 billion, giving the Japanese firm a big, local sales force in the world's largest drugs market.

Source: Yahoo! News: Business | 3 Sep 2009 | 4:29 am

Hong Kong recalls gold reserves from London

Hong Kong is pulling all its physical gold holdings from depositories in London, transferring it to a high-security facility at the city’s airport, in a move that wins praise from local traders.

Source: MarketWatch.com - Top Stories | 3 Sep 2009 | 4:22 am

Boost for eurozone recovery hopes

Eurozone economic activity rises for the first time in 15 months, says a survey, raising hopes the recession could end soon.
Source: BBC News | Business | World Edition | 3 Sep 2009 | 4:22 am

The home I bought with my $8,000 tax credit

The Lees stepped up their house-hunting to take advantage of the first-time buyer tax credit before it expires. What they - and 6 others - found.
Source: Business and financial news - CNNMoney.com | 3 Sep 2009 | 4:18 am

CalciTech Establish European Operating Company

LONDON, September 3 /PRNewswire-FirstCall/ -- CalciTech Ltd. (OTCBB: CLKTF) announces today it has restructured its operations in Europe establishing a new wholly owned...
Source: RSS feed - channel BNewsBusiness | 3 Sep 2009 | 4:17 am

Rock Band founders almost went broke - twice

Next week, video game developer Harmonix will launch the wildly anticipated The Beatles: Rock Band, uniting one of the most popular video game franchises ever made with history's biggest rock band.
Source: Business and financial news - CNNMoney.com | 3 Sep 2009 | 4:16 am

Pfizer whistleblower's drug fear

One of the whistleblowers in the Pfizer healthcare fraud case says he felt he was "swimming upstream" as the firm illegally promoted drugs.
Source: BBC News | Business | World Edition | 3 Sep 2009 | 4:16 am

Indications: U.S. stock futures up after recent rut

U.S. stock futures rise Thursday after a recent rut, with a leading economics forecaster growing more confident while merger news continues to trickle out.

Source: MarketWatch.com - Top Stories | 3 Sep 2009 | 4:15 am

European Commision May Kill Sun (JAVA) Deal With Oracle (ORCL)

Oracle (ORCL) probably thought its deal to buy Sun Microsystems (JAVA) was a sure thing once US regulators had approved the deal. Now, the transaction is in real trouble and some experts believe it may never be closed at all. The European Commission may take several months to review it. A final decision will be about [...]

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Source: 24/7 Wall St. | 3 Sep 2009 | 4:13 am

China to draw foreign investments via partnership rule

HONG KONG (Reuters) - China plans new rules to allow foreign companies to set up local units in the form of a locally registered partnership, in a landmark move to attract investment, a draft proposal seen by Reuters showed on Thursday.

Source: Reuters: Business News | 3 Sep 2009 | 4:13 am

Booming biz in luxe brands - even now

One morning last winter Louise Kahrmann de Muller, a Paris-based publicity executive, was headed to London. Sadly, Air France lost her luggage. For most business travelers this would be an annoyance. For Kahrmann de Muller and the dozen fashion editors she was traveling with, the lost luggage was a tragedy.
Source: Business and financial news - CNNMoney.com | 3 Sep 2009 | 4:12 am

Europe Markets: Europe shares edge up for first time in four days

European shares edge higher for the first time in four sessions, buoyed by gains for miners and chipmaker Infineon Technologies, although losses for drugmakers kept a lid on the advance.

Source: MarketWatch.com - Top Stories | 3 Sep 2009 | 4:12 am

Gold rises to threemonth high as weaker dollar spurs demand

Gold has climbed to a threemonth high in London as a weakening dollar boosted demand for the metal as an alternative investment.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 3 Sep 2009 | 4:09 am

EU reveals probe into Oracle's bid

Business software giant Oracle's 7.4-billion-dollar bid for Sun Microsystems is under investigation under EU merger regulations, the European Commission announced on Thursday. Brussels...
Source: RSS feed - channel BNewsBusiness | 3 Sep 2009 | 4:06 am

Shanghai jumps 4.8% as metals, financials take off

Chinese stocks post their biggest percentage gain since March, as metals and financial shares soar on speculation the government will act to support markets after a sell-off last month.

Source: MarketWatch.com - Top Stories | 3 Sep 2009 | 4:03 am

Sanders Morris Harris Group Announces Quarterly Dividend

HOUSTON, Sept. 3 /PRNewswire-FirstCall/ -- Sanders Morris Harris Group Inc. (Nasdaq: SMHG) today announced that its Board of Directors declared a regular quarterly cash dividend...
Source: RSS feed - channel BNewsBusiness | 3 Sep 2009 | 4:00 am

36,864 Ways to Customize the Usual Whataburger Order

Quick service chain Whataburger is launching a month-long campaign to remind customers to make their Whataburger a custom-made one. SAN ANTONIO, Sept. 3 /PRNewswire/ --...
Source: RSS feed - channel BNewsBusiness | 3 Sep 2009 | 4:00 am

UK economic outlook deteriorates: OECD forecasts

The UK is the only one of the world's major economies to see a deterioration during the past three months OECD says.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 3 Sep 2009 | 3:59 am

Cisco, EMC eye technology services tie-up: report

(Reuters) - Cisco Systems Inc and EMC Corp are in talks to create a new joint venture to provide technology services, the Wall Street Journal said, citing people briefed on the plan.
Source: RSS feed - channel BNewsBusiness | 3 Sep 2009 | 3:53 am

Go-Ahead beats expectations despite fall in Gatwick traffic

Go-Ahead, the British rail and bus operator, said that its Gatwick Express franchise has suffered a fall in passenger numbers due to fewer people flying from the airport.

Source: Latest Business News from Times Online | 3 Sep 2009 | 3:53 am

EU opens in-depth probe into Oracle, Sun deal

BRUSSELS (Reuters) - European Union antitrust regulators launched on Thursday an in-depth probe into U.S. software firm Oracle's $7 billion takeover of computer maker Sun Microsystems ,...
Source: RSS feed - channel BNewsBusiness | 3 Sep 2009 | 3:52 am

EU opens in-depth probe into Oracle, Sun deal

Source: Reuters: Business News | 3 Sep 2009 | 3:52 am

REFILE-Cisco, EMC eye technology services tie-up-WSJ

(Refiles to attribute headline to the Wall Street Journal)
Source: RSS feed - channel BNewsBusiness | 3 Sep 2009 | 3:50 am

EU opens in-depth probe into Oracle, Sun deal

BRUSSELS, Sept 3 (Reuters) - European Union antitrust regulators launched on Thursday an in-depth probe into U.S. software firm Oracle's $7 billion takeover of computer maker Sun Microsystems , citing...
Source: RSS feed - channel BNewsBusiness | 3 Sep 2009 | 3:49 am

EU opens probe into Oracle bid for Sun

European Union regulators have launched an antitrust probe into U.S. software maker Oracle Corp.'s takeover of Sun Microsystems Inc., saying the deal could mean higher prices and limited...
Source: RSS feed - channel BNewsBusiness | 3 Sep 2009 | 3:48 am

Dainippon Pharma to buy U.S. firm for $2.6 billion

BOSTON/TOKYO (Reuters) - Dainippon Sumitomo Pharma Co Ltd agreed on Thursday to buy U.S. drugmaker Sepracor Inc for $2.6 billion, giving the Japanese firm a big, local sales force in the world's largest drugs market.

Source: Reuters: Business News | 3 Sep 2009 | 3:43 am

Wasting News On The Evening News

Most of the news yesterday was dominated by the news that Charles Gibson would leave as anchor of the ABC Evening News and be replaced by Diane Sawyer. Since almost no one under 60-years-old watches the news in the early evening which makes the programs unattractive to advertisers, the news about the ABC Evening News [...]

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Source: 24/7 Wall St. | 3 Sep 2009 | 3:42 am

Premier Farnell maintains dividend

Premier Farnell, the global distributor of electronic and industrial components, has maintained its interim dividend in spite of tough comparables that resulted in a sharp fall in revenues and underlying...
Source: RSS feed - channel BNPaperBusiness | 3 Sep 2009 | 3:40 am

Global recession ending: OECD

PARIS (Reuters) - The global recession is coming to an end faster than thought just a few months ago and may already be over, according to forecasts published by the Organization for Economic Co-operation and Development on Thursday.

Source: Reuters: Business News | 3 Sep 2009 | 3:37 am

Stock futures signal rebound; retail sales eyed

(Reuters) - U.S. stock index futures pointed to a higher open on Wall Street on Thursday, following a four-day losing streak.

Source: Reuters: Business News | 3 Sep 2009 | 3:34 am

Stock futures signal rebound; retail sales eyed (Reuters)

Reuters - U.S. stock index futures pointed to a higher open on Wall Street on Thursday, following a four-day losing streak.

Source: Yahoo! News: Business | 3 Sep 2009 | 3:34 am

Stock futures signal rebound; retail sales eyed (Reuters)

Reuters - U.S. stock index futures pointed to a higher open on Wall Street on Thursday, following a four-day losing streak.

Source: Yahoo! News: Stock Markets News | 3 Sep 2009 | 3:34 am

Pernod Ricard's annual profit rises 13%

Pernod Ricard, Europe’s second largest spirits company, posts a 13% increase in annual profit Thursday as the acquisition of the maker of Swedish vodka Absolut boosts sales.

Source: MarketWatch.com - Top Stories | 3 Sep 2009 | 3:33 am

Earnings Watch: Updates, advisories and surprises

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

Source: MarketWatch.com - Top Stories | 3 Sep 2009 | 3:31 am

First job? Start your first 401(k)

Question: I just started my first job and have to decide how to allocate my contributions to my 401(k) plan. Since I'm only 23, I think I can assume more risk than older workers, but I'd like to know what allocation you would recommend. --Bob Dixon, North Andover, Mass.
Source: Business and financial news - CNNMoney.com | 3 Sep 2009 | 3:30 am

YouTube Joins The Movie Rental Legions

Google’s (GOOG) YouTube may finally come up with a way to raise revenue. It streamed nine billion videos last month, but, by some estimates loses $300 million a year. The quality of the video on YouTube is usually so low that advertisers don’t want to put their high-quality TV messages on the service. That leaves YouTube [...]

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Source: 24/7 Wall St. | 3 Sep 2009 | 3:27 am

London cautious as data take centre stage

London equities rose on Thursday, helped by bargain hunting among mining stocks after three consecutive sessions of losses left the sector looking more attractive. But there was still a defensive feel...
Source: RSS feed - channel BNPaperBusiness | 3 Sep 2009 | 3:23 am

'Job not done', Darling tells G20

The Group of 20 richest nations should not be complacent as the global economy starts to recover, the chancellor says.
Source: BBC News | Business | World Edition | 3 Sep 2009 | 3:16 am

Global recession ending: OECD (Reuters)

Reuters - The global recession is coming to an end faster than thought just a few months ago and may already be over, according to forecasts published by the Organization for Economic Co-operation and Development on Thursday.
Source: Yahoo! News: Business | 3 Sep 2009 | 3:16 am

Bovis targets land deals after 60m placing

Bovis Homes, the UK housebuilder, on Thursday unveiled a share placing to raise approximately 60m and said it would use the money to acquire land for development.In a further sign of confidence that the...
Source: RSS feed - channel BNPaperBusiness | 3 Sep 2009 | 3:15 am

Nothing blue about JetBlue

Welcome aboard," says the CEO of JetBlue Airways. "I'm Dave. It's a first-name-basis airline. My door is open."
Source: Business and financial news - CNNMoney.com | 3 Sep 2009 | 3:11 am

Stocks poised to rebound

U.S. stocks appeared set for a rebound Thursday as investors eyed signs of stabilization in global markets.
Source: Business and financial news - CNNMoney.com | 3 Sep 2009 | 3:10 am

Therese Poletti's Tech Tales: Facebook developers looking beyond ...

Many companies participating in a Facebook-sponsored incubator program are looking beyond the social network giant for business growth.

Source: MarketWatch.com - Top Stories | 3 Sep 2009 | 3:08 am

Obama to push Congress on health

The US president will address a joint session of Congress to inject new impetus into his plans for healthcare reform, seeking to overcome bitter disputes
Source: Financial Times - US homepage | 3 Sep 2009 | 2:59 am

Eurozone retail sales slide further: EU data (AFP)

AFP - Retailers in the 16 nations using the euro saw their sales fall in July, the latest in a downward trend broken only in April this year, according to official EU data released Thursday.

Source: Yahoo! News: Business | 3 Sep 2009 | 2:59 am

UK services sector activity near twoyear high

Britain's services sector grew at its fastest pace in nearly two years in August boosted by a surge in firms' optimism and reinforcing hopes that recession in the broader economy may soon be over.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 3 Sep 2009 | 2:59 am

Why Madoff Was The Best Candidate To Run The SEC

Case No. OIG-509 from the SEC Office of the Inspector General, also known as “Investigation of Failure of the SEC To Uncover Bernard Madoff’s Ponzi Scheme”, is good reading. The public may think the most important part of the document is the section which says that no one at the SEC did anything wrong by [...]

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Source: 24/7 Wall St. | 3 Sep 2009 | 2:56 am

Turner backs bank 'death' plans

The head of the UK financial watchdog, Lord Turner, backs proposals to make banks plan for their own collapse.
Source: BBC News | Business | World Edition | 3 Sep 2009 | 2:54 am

US warns spending cut may damage recovery

America has warned that it is too early to withdraw funding to boost the global economy ahead of a key meeting with G20 finance ministers in London this week.

Source: Latest Business News from Times Online | 3 Sep 2009 | 2:53 am

Britain's biggest recruitment company enjoys public sector boost

Britain's largest recruitment company expecting jobs in the public sector to help support profits over the next year.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 3 Sep 2009 | 2:53 am

Fear And Loathing In The Unemployment Line

The minutes of the FOMC on August 11th and 12th were released today. The Fed did everything it could just short of saying that the recession is officially over. One of the critical notations in the minutes was that “the staff continued to project that real GDP would start to increase in the second half [...]

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Source: 24/7 Wall St. | 3 Sep 2009 | 2:50 am

HMV strikes digital deal

HMV Group is to take a 50 per cent stake in 7digital, the music download website, in a drive to further develop its sales of electronic books and music online from the Waterstones and HMV websites.The...
Source: RSS feed - channel BNPaperBusiness | 3 Sep 2009 | 2:47 am

China shares rise on market hopes

China's main share index rises nearly 5% after a senior official says regulators will seek to develop the stock market.
Source: BBC News | Business | World Edition | 3 Sep 2009 | 2:46 am

Pensions: is my money safe?

In the wake of the disclosure of missing payments at Key Radio we explain how you can check that your pension is secure.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 3 Sep 2009 | 2:40 am

London Markets: Miners advance in choppy session for U.K. shares

Metal extractors advance in a choppy session for London shares on Thursday, with Randgold Resources, Lonmin, Fresnillo and Kazakhmys all performing strongly.

Source: MarketWatch.com - Top Stories | 3 Sep 2009 | 2:35 am

London stocks rise at open (AFP)

AFP - Stocks in London rose slightly at the start of trade on Thursday as investors waited for the European Central Bank's decision on interest rates.

Source: Yahoo! News: Stock Markets News | 3 Sep 2009 | 2:28 am

Coming soon: YouTube movie rentals?

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 3 Sep 2009 | 2:15 am

Currencies: Dollar edges higher in Asian trading

The dollar edges higher in Asian trading Thursday, after earlier falling near a seven-week low against its Japanese rival.

Source: MarketWatch.com - Top Stories | 3 Sep 2009 | 2:13 am

Wheel success?

Winners and losers of car scrappage schemes
Source: BBC News | Business | World Edition | 3 Sep 2009 | 2:10 am

Who should get credit for a recovery?

Although the recession isn't officially over yet, there is a growing sense that the economy is now in a recovery. But there is also a growing debate about who deserves the credit.
Source: Business and financial news - CNNMoney.com | 3 Sep 2009 | 2:09 am

Go-Ahead beats forecasts despite charges

Go-Ahead on Thursday announced a 59 per cent decline in annual profit after a recession-related writedown at its aviation services division and a much smaller charge linked to London Mayor Boris Johnson's...
Source: RSS feed - channel BNPaperBusiness | 3 Sep 2009 | 2:06 am

Madoff lied -- we missed it, SEC says

The Securities and Exchange Commission overlooked "more than ample" evidence, including six complaints, that red-flagged the Bernard Madoff Ponzi scheme, an internal watchdog said Wednesday.
Source: Business and financial news - CNNMoney.com | 3 Sep 2009 | 2:04 am

HMV strikes deal to grab digital music sales

HMV is attempting to become a major player in the downloadable music market by taking a 50 per cent stake in the technology specialist, 7digital.

Source: Latest Business News from Times Online | 3 Sep 2009 | 2:04 am

America's Timothy Geithner says it's 'too early' to withdraw economic stimulus

Timothy Geithner the US Treasury Secretary said it's 'too early' to withdraw the stimulus governments have given the world economy.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 3 Sep 2009 | 2:02 am

Media Digest 9/3/2009 Reuters, WSJ, NYTimes, FT, Bloomberg

Reuters: The sell-off in Chinese stocks may be overdone based on earnings. Reuters: A report blamed the SEC for not doing its job investigating Madoff. Reuters: The Fed says the risks to the American economy have dropped. Reuters: A Pfizer (PFE) whistleblower made more than $51 million. Reuters: YouTube (GOOG) may stream movie rentals from major studios. Reuters: Morgan Stanley [...]

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Source: 24/7 Wall St. | 3 Sep 2009 | 2:02 am

Dainippon to buy Sepracor for $2.6 billion

Dainippon Sumitomo is offering $2.6 billion to buy U.S.-based Sepracor in a move the Japanese drugmaker expects will enhance its sales and marketing capability in the United States.

Source: MarketWatch.com - Top Stories | 3 Sep 2009 | 1:54 am

Southwest offers early boarding for $10

Southwest Airlines customers have never been able to reserve a seat, but now they can board flights early in search of a plum spot for an extra ten bucks each way.
Source: Business and financial news - CNNMoney.com | 3 Sep 2009 | 1:53 am

HMV expands digital entertainment reach as sales fall

HMV Group the music books and games retailer announced a deal to expand its digital entertainment arm and said samestore sales fell 1.8pc in the 18 weeks to the end of August.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 3 Sep 2009 | 1:37 am

BMW to create jobs with plan to build Minis in UK

BMW is giving Britain's car industry a welcome boost with plans to build two new models of the Mini at the company's plant at Cowley, near Oxford.

Source: Latest Business News from Times Online | 3 Sep 2009 | 1:37 am

Dainippon to buy Sepracor for $2.6bn

Dainippon Sumitomo Pharma is to acquire Sepracor of the US for $2.6bn in the latest of a series of overseas purchases by Japanese pharmaceutical companies
Source: Financial Times - US homepage | 3 Sep 2009 | 1:29 am

Dainippon to buy Sepracor for $2.6bn

Dainippon Sumitomo Pharma said on Thursday it had agreed to buy Sepracor of the US for $2.6bn in the latest of a series of overseas acquisitions by Japanese pharmaceutical companies.DSP said the purchase...
Source: RSS feed - channel BNPaperBusiness | 3 Sep 2009 | 1:29 am

BP: a history in pictures

Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 3 Sep 2009 | 1:27 am

Asia Markets And Europe Open 9/3/2009: Shanghai Up 5%

Markets in Asia were mixed The Nikkei fell .5% to 10,214. Honda (HMC) and Toyota (TM) both dropped more than 2%. The Hang Seng rose 1.4% to 19,786. The Shanghai Composite rose 4.8% to 2,845. At the open in Europe. the FTSE rose .4% to 4,835. The Dax was higher by .2% to 5,332 and the CAC 40 was [...]

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Source: 24/7 Wall St. | 3 Sep 2009 | 1:25 am

Conditions 'remain difficult', says Pernod

PARIS, Sept 3 French spirits group Pernod Ricard posted a 21 per cent rise in recurring operating profit for the year to June 30, broadly in line with expectations, boosted by growth in France, Asia and...
Source: RSS feed - channel BNPaperBusiness | 3 Sep 2009 | 1:23 am

Slight drop on ASX today

The Australian share market closed slightly lower today, with gold stocks the only standout in generally flat trading. At the close, the benchmark S&P/ASX200 index was 8.6 points, or 0.19 per cent, lower at 4429.6, while the broader...
Source: New Zealand Herald - Business | 3 Sep 2009 | 1:20 am

HMV: a history in pictures

Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 3 Sep 2009 | 1:11 am

Studios might use YouTube to sell, rent movies

Sony Pictures, Warner Bros. and Lionsgate are among the Hollywood giants to consider making films available through YouTube as they're released on DVD.

The most popular site for watching video on the Internet may soon get Hollywood's most popular movies.

Source: L.A. Times - Business | 3 Sep 2009 | 1:00 am

Cable companies seeking a new tax on satellite TV

Firms say the tax will level the playing field, but foes argue that's 'fallacious reasoning.'

In the long-running battle between cable television and satellite, the cable TV industry is quietly trying to persuade the Legislature to levy a tax on its competitors.

Source: L.A. Times - Business | 3 Sep 2009 | 1:00 am

Breweries competing for new lows in light-beer calories

MillerCoors 64-calorie MGD 64 is one of the beer world's biggest success stories in the last year. Anheuser-Busch answers with a 55-calorie brew. But will they go the way of 'ice' and 'dry' beer?

Like the diet trade, the beer business has bred a lot of fads.

Source: L.A. Times - Business | 3 Sep 2009 | 1:00 am

WellPoint, United Healthcare accused of illegal actions

The insurers pressured employees to lobby against healthcare reform, Consumer Watchdog alleges.

The nation's two largest health insurers have been pressuring employees to lobby against healthcare reform in Congress in violation of a California law against coerced political activity, a consumer group alleged Wednesday.

Source: L.A. Times - Business | 3 Sep 2009 | 1:00 am

Broadcom co-founder Henry Samueli asks court to uphold plea deal

State HMOs deny 1 in 5 claims, analysis shows

A nurses group says state government data show that denial rates among the five largest insurers ranged up to 39.6% in the first half of 2009. The firms caution that the figures are misleading.

California HMOs reject one out of five medical claims, according to an analysis by the California Nurses Assn. of data the companies submit to the state.

Source: L.A. Times - Business | 3 Sep 2009 | 1:00 am

They're still toasting 'Sideways' in Santa Barbara wine country

The 2004 comedy has softened the economic blow to the Santa Ynez Valley. Visitors still hit the wineries and restaurants shown in the film and even ask for the room where Miles and Jack stayed.

In the wine country north of Santa Barbara, the global economic crisis has drained wine sales, sapped tourist spending and siphoned away hotel profits.

Source: L.A. Times - Business | 3 Sep 2009 | 1:00 am

Broadcom co-founder Henry Samueli asks court to uphold plea deal

The billionaire appeals to a federal panel after a judge refuses to accept his agreement with prosecutors over the backdating of company stock options. The accord would let him avoid prison.

Federal appeals court judges were skeptical of Henry Samueli's arguments for upholding his plea bargain in the Broadcom Corp. stock option manipulation case -- an agreement that would allow the billionaire Anaheim Ducks owner to avoid prison after pleading guilty to lying and paying a $12-million fine.

Source: L.A. Times - Business | 3 Sep 2009 | 1:00 am

Pfizer to pay record $2.3-billion settlement over fraudulent marketing

The Justice Department announces the deal, which is the largest healthcare fraud settlement ever. The company was accused of illegally marketing four drugs: Bextra, Geodon, Zyvox and Lyrica.

A landmark $2.3-billion healthcare fraud settlement by Pfizer Inc. has put the pharmaceutical industry on notice that potentially criminal behavior in promoting drugs for unauthorized uses won't be tolerated by the Obama administration, government officials and legal experts said.

Source: L.A. Times - Business | 3 Sep 2009 | 1:00 am

Microsoft's grip on users is being lost in the cloud

The other day I had a vision of the death of Microsoft .

Source: L.A. Times - Business | 3 Sep 2009 | 1:00 am

Pfizer to pay record $2.3-billion settlement over fraudulent marketing

They're still toasting 'Sideways' in Santa Barbara wine country

The 2004 comedy has softened the economic blow to the Santa Ynez Valley. Visitors still hit the wineries and restaurants shown in the film and even ask for the room where Miles and Jack stayed. ...
Source: RSS feed - channel BNPaperBusiness | 3 Sep 2009 | 1:00 am

China approves swine flu vaccine

Chinese health authorities approve a vaccine that they say prevents swine flu with a single dose.
Source: BBC News | Business | World Edition | 3 Sep 2009 | 12:53 am

HMV takes 50% stake in 7digital

Music, games and books retailer HMV says it has bought half of online music store 7digital for £7.7m.
Source: BBC News | Business | World Edition | 3 Sep 2009 | 12:48 am

NZ sharemarket ends higher

The New Zealand sharemarket gained today but there was a dearth of corporate news to provide direction. The benchmark NZX-50 index closed up 16.921 points, or 0.55 per cent, at 3091.57. Turnover was worth $124.56 million, mostly...
Source: New Zealand Herald - Business | 3 Sep 2009 | 12:45 am

Manufacturers call for sea change

The official cash rate is useless and policy is needed to focus on the importance of trade rather than the financial market, an inquiry was told today. Opposition MPs are holding an inquiry into bank pricing after government MPs...
Source: New Zealand Herald - Business | 3 Sep 2009 | 12:00 am

WTO panel may rule against Airbus in subsidy case: report

(Reuters) - In a victory for Boeing , a preliminary World Trade Organization panel is likely to rule on Friday that European governments illegally subsidized Airbus aircraft, the Wall Street Journal said, citing trade officials, lawyers and executives from both sides.

Source: Reuters: Business News | 2 Sep 2009 | 11:24 pm

Bungled Madoff probes helped lure more victims

WASHINGTON - Pushing past years of "red flags," investigators at the Securities and Exchange Commission bungled their probes of Bernard Madoff so badly that his multibillion-dollar fraud not only flourished but he used the exams to...
Source: New Zealand Herald - Business | 2 Sep 2009 | 10:30 pm

Monster U.S. online jobs index soars in August (Reuters)

Reuters - A monthly gauge of U.S. online labor demand soared in August at its fastest pace in four years, indicating steadier footing for nationwide labor demand, a private research group said on Thursday.
Source: Yahoo! News: Business | 2 Sep 2009 | 10:25 pm

Monster U.S. online jobs index soars in August

NEW YORK (Reuters) - A monthly gauge of U.S. online labor demand soared in August at its fastest pace in four years, indicating steadier footing for nationwide labor demand, a private research group said on Thursday.

Source: Reuters: Business News | 2 Sep 2009 | 10:25 pm

NZ commodity prices surge - aluminium, dairy, wood all up

New Zealand commodity prices rose for a sixth straight month, posting the largest gain since November 2007 as aluminium, pelts, lumber, wool and dairy advanced. The ANZ Commodity Price Index rose 4.3 per cent in August and has...
Source: New Zealand Herald - Business | 2 Sep 2009 | 10:00 pm

Fewer Share Classes for Mutual Funds

Finding the right mutual fund is no small feat—but the difficulty doesn’t end there. Most funds have an alphabet soup of share classes that investors often find hard to digest. These share classes (labeled by letter, with A, B and C the most common) all hold the same investments but have different fee structures. A shares, for instance, have an up-front sales charge, or load; C shares impose a charge when you sell. And then there are B shares, which can have deceptively high annual fees. But in a world that seems to get only more complicated by the day comes a surprising development: The industry is about to make things simpler.

In all, more than 400 mutual funds have eliminated at least one share class in the first half of the year, 40 percent more than did in the same period a year ago, according to fund researcher Morningstar. The reason? It costs firms less to run funds with fewer share classes, says Ben Poor, analyst at research firm Cerulli Associates. Analysts also say fund firms are facing fiercer competition from no-load funds, which don’t have any sales charges at all. Of all the broker-sold funds last year, 62 percent had no sales charge or had a waived load, up 11 percent from the previous year, according to fund research group Strategic Insight.

Though the trend is ultimately good news for investors, the fund industry isn’t trumpeting it, perhaps because it draws attention to the convoluted pricing still in place. Aside from being a headache to navigate, some share classes come with potentially hidden costs, says mutual fund analyst Adam Bold. B shares include a steep penalty for selling out of the fund too early, which investors often don’t realize until they want to sell. B shares “lend themselves to bad brokers saying that there’s no load,” says Morningstar mutual fund analyst John Coumarianos.

As for those investors already in B shares? Don’t expect special treatment. Their B shares may convert into other share classes over time, but they’ll still be penalized under the old conditions for cashing out early. Fewer share classes could mean less choice for investors, says Bold. But sometimes, simpler is better.

Class Distinctions

American Funds eliminated its B shares, which charged a penalty if investors sold within seven years, in April. The firm says investors were “losing interest.”

Evergreen Investments, a subsidiary of Wells Fargo, eliminated its B shares in June, responding to “client needs.”

Charles Schwab didn’t have load funds, but the firm threw out all its share classes, saying it wants to offer all investors lower fees.

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Source: SmartMoney.com | 2 Sep 2009 | 10:00 pm

AIG: Still No Port in This Storm

WALL STREET HAS BEEN BETTING ON FINANCIAL turnarounds, as shares of companies like Freddie Mac, Fannie Mae, Citigroup and American International Group surge after being written off by the investment community just a few months ago.

AIG (AIG) took center stage last week as its shares rose sharply on heavy volume, gaining 17 points, or 53%, to 50, leaving the stock up five-fold from where it stood in early July after AIG did a 1-for-20 reverse stock split. The current share price is equivalent to $2.50 on the old shares.

The company's stock-market value is $35 billion, reflecting 135 million publicly held shares and the government's 80% equity interest; its total share count is almost 700 million. AIG's market value is double that of Chubb, one of the best-managed property-casualty insurers.

AIG stock looks overpriced. The rally seems to reflect a short squeeze in the shares, hopes for a potentially larger role for former CEO Hank Greenberg, and optimism that the rally in the markets will bolster AIG's enormous investment portfolio, credit-default swaps and other derivatives that nearly destroyed the company. AIG, however, faces big challenges as it weighs the sale of key overseas life-insurance businesses while reviving its core property-casualty insurance operations.

It isn't easy for investors to analyze AIG, given scant analyst coverage, limited communication from management and extremely complex financials. Some may be taking comfort that AIG trades below its stated book value of $83 a share, the figure cited in AIG's second-quarter earnings release. By our math, however, the company has negative tangible common shareholder equity, in contrast with the positive figures for nearly all major life and property-casualty insurers.

The $58 billion of AIG shareholder equity includes more than $42 billion in preferred stock issued under the Troubled Asset Relief Program (TARP). That preferred, owned by Uncle Sam, is senior to AIG common. Take it out, and AIG's common equity falls to about $15 billion, or $21.80 a share. The $21.80 figure is buried in a footnote in the second-quarter financial supplement as "book value per share assuming adjustment to AIG's shareholders' equity for U.S. Treasury equity investments."

Then there are some intangible assets, including $6.4 billion of goodwill and about $14 billion of a "prepaid commitment asset" linked to the government financial backstop for AIG. This will be written down by $5 billion in the current quarter as AIG reduces its $44.8 billion of Fed borrowings by giving the Fed equity stakes worth $25 billion in its two big international life-insurance operations. Strip out these two items and AIG would have had negative tangible common shareholder equity of $7 per share at the end of the second quarter.

AIG's new chief executive, Robert Benmosche, sounded a cautious financial note with the Wall Street Journal Friday. "The sum of the parts are a little below the whole," he said. "The whole has to be big enough to pay back the government, and with a little hard work, there will be something left called AIG." Benmosche, not surprisingly, wants a patient approach to asset sales in hopes that valuations improve. His comments suggest there isn't much equity value for AIG shareholders now.

Investors were encouraged that AIG reported a second-quarter profit of $1.8 billion, or $2.30 per share, compared with a loss of $5.4 billion a year earlier. AIG's core property-casualty operations had declining profits in the period as general insurance premiums fell 19% in the quarter.

In early July, analyst Joshua Shanker, then with Citigroup, wrote that there was a "70% chance that the equity at AIG is zero." He cut his price target to $14, citing risks in the insurer's credit-default swaps.

Investors attracted to AIG might do better to avoid the common and buy the company's debt, including its 8¼% bonds due in 2018 that trade around 80 cents on the dollar, for a yield of 11.84%. AIG has NYSE-listed junior subordinated debentures (AVF) that now trade around $15, a sharp discount to their face value of $25, and that yield 13%. These securities are senior to the government TARP preferred, but rank below senior debt.

It's possible AIG's condition will dramatically improve and that its common will keep climbing. That bullish scenario seems too optimistic, given AIG's still-precarious finances, mountainous obligations to the government, tough business conditions and tarnished brand.

The Bottom Line
AIG shares look expensive, given its continuing troubles and our calculation of negative tangible common equity. Its debt offers a better play for adventurous investors.

Source: SmartMoney.com | 2 Sep 2009 | 10:00 pm

Active Trader: How to Sell a Stock Short (Active Trader)

With increasing nervousness, analysts and investors alike think that a fall drop is stocks is only inevitable. The question is: does "shorting" stocks, the typical move for downbeat investors, make sense right now?

Most investors know that “going short” involves betting that a stock’s price will fall, not wearing high hemlines (although both moves, it could be said, require a certain daring). But what does shorting actually entail, and is it something you should try on a regular basis? Shorting involves borrowing shares of a stock and selling them, hoping to buy them back later at a lower price and pocketing the difference. Traders already have begun making bets against stocks again. Many experts believe the market is overvalued and due for some sort of a pullback. In August the number of shares sold short in stocks on the New York Stock Exchange rose slightly from July. But investors short stocks for a variety of reasons. Some of those who short opportunistically hope that a stock will go all the way to zero. Last year, short sellers piled into stocks of financial and real estate companies, some of the most vulnerable in the economic downturn. Today, names like Citigroup and E*Trade Financial remain among the most popular shorting candidates, according to Bespoke Investment Group, a financial research and money management firm.

Experts say investors can also short stocks to hedge, or mitigate, the risk in their portfolio. Say you want to invest in a sector undergoing a major transition, like healthcare. An investor can buy the stocks (“going long” in trader lingo) that he or she thinks will best weather the changes and sell short those with a murkier outlook. (Pfizer and Merck are among today’s top five shorted stocks, Bespoke notes). By correctly picking the winners and the losers, investors profit twice. If the entire sector slumps, an investor loses less than he or she would have with a 100 percent “long” position. Some traders will short stocks as a bet against an entire sector. For example, an investor might like one or two banks but believes financial stocks, as a whole, are in for a bumpy ride. So the investor buys the favorite names and sells short a financial sector ETF, which will cushion your portfolio during the sector’s dips.

Shorting stocks, by nature, is controversial. For one thing, company executives are not fans of investors who short their company’s stock en masse. John Thain, the former head of Merrill Lynch, blamed short sellers for the rapid deterioration of his firm’s fortunes last year. It’s also been blamed for exacerbating the financial crisis. During the peak of the crisis last fall, the government imposed temporary limits on short selling, not allowing shorting in certain financial stocks.

To short, investors need what’s known as a margin account (the term “margin” refers to borrowing). Some do-it-yourself brokerages, like Charles Schwab and Fidelity, require a minimum of $5,000 to trade on margin. When an investor shorts a stock, he borrows its shares from his or her broker and then sells them. (The investor doesn’t actually have to find a buyer—the entire transaction happens with a click of the mouse.) The investor’s account is credited with the proceeds of the stock sale. This isn’t free money, though—investors need to keep cash in their accounts in case the price of the stock rises and they need to buy back the shares. When investors buy the shorted shares back, it’s called “covering the short,” and investors always are on the hook for the number of shares they borrowed. If the stock rises but the shorter thinks it will eventually drop and wants to keep shorting, he or she might have to add more money to his account to cover greater potential losses. When brokers ask for more collateral like this, it’s known as a “margin call.”

Shorting requires vigilance and a high tolerance for risk, analysts say. “If you do any of it wrong, the cost is high,” says Rick Lake, co-chairman of Lake Partners, an investment management firm. There are three dangers short sellers face that most ordinary stock buyers don’t.

The Margin Call
By nature, shorting a stock requires borrowing money. A brokerage often will happily loan an investor money, but if the shorted stock goes up in value significantly, the brokerage will want the investor to add more cash to the account or sell some other stocks to compensate.

Infinite Downside
If an investor buys a stock and it falls to zero, all the investor loses is the initial money he or she paid. After all, the stock can’t go below zero. But on a shorted stock, there is, in theory, no limit to how much money an investor could lose, since a stock could keep rising and rising.

Wrong Timing
If an investor owns a share and the value goes down, he or she can always be patient and wait for the stock to rise. A short seller doesn’t have that option. If the stock price rises, the short seller might be forced to buy it back quickly. When many short sellers try to buy shares back at once, the stock’s price can zoom higher, creating a “short squeeze,” and short sellers can lose a lot of money very quickly.

For Investors who want access to the strategy without executing it themselves, experts suggest buying a mutual fund that shorts, like Federated Prudent Bear (BEARX), or a short ETF like ProShares’ Short S&P 500 (SH), which seeks daily investment performance that’s opposite that of the S&P 500 broad market index. The short ETF was up more than 39 percent last year, but down almost 17 percent this year.

Source: SmartMoney.com | 2 Sep 2009 | 10:00 pm

3 Stocks Priced Below Book Value (Screens)

Three decades ago, the average big company had a stock market value equal to what accountants figured the company’s assets would fetch in a sale (book value), plus a smidgen more. Today, the average company sells for about double its book value. There are two likely reasons for the shift. First, the rise of companies like eBay (EBAY) and Google (GOOG), which earn large sums without factories, fleets or even shops, suggests part of the increase in the market’s price/book ratio is deserved. Second, while stock valuations today are well below their peak levels—during the three years ended 2007 P/B ratios averaged 2.8 — shares still aren’t cheap. (For more on why, see “Why Stocks Are Way Too Pricey”.)

Book value remains a useful measure for finding stock bargains. In a 2000 study, University of Chicago professor Joseph Piotroski presented an investment strategy based largely on low P/B ratios that backtesting showed doubled the market’s yearly returns over two decades ended 1996. I recently ran a search for companies trading at or below their book values. I favored ones that pay dividends and threw out ones that owe too much or that aren’t profitable. I also excluded banks, since I don’t quite trust the accounting value of their loan portfolios at the moment. That is, the value of today’s loans depends on the likelihood of borrowers making their payments in the future, which depends on some things that seem especially difficult to forecast right now, like the unemployment rate, house prices and stock prices.

Below are three companies my search produced.

Time Warner

Price/book: 0.9
Dividend yield: 2.7%

The diversified media giant, with interests in cable television, magazines, film, and dial-up Internet service, was formed by a ludicrously expensive 2000 merger between America Online and Time Warner that valued the company at more than $350 billion. Today it trades for less than a tenth of that. Media businesses of all sorts are struggling to make money, while remaining dial-up Internet customers are slowly moving on to broadband or the afterlife. This year, companywide sales for Time Warner (TWX) are expected to plunge by nearly a third. That said, there are early signs that shareholders can expect better days. The company is widely expected to spin off AOL later this year, allowing it to focus on tweaking parts of its business that are working (HBO, CNN, Warner Brothers) and fixing ones that aren’t (publishing). More than $7 billion in cash on the balance sheet bodes well for share repurchases and dividends. And shares sell for less than 14 times this year’s cratered earnings forecast. Even a modest recovery in advertising rates could send them well higher.

Tidewater

Price/book: 1.0
Dividend yield: 2.3%

Tidewater (TDW) is the world's largest supplier of service ships to offshore energy companies, with a fleet of 393. With oil prices down from their highs, and drillers more selective about new projects, the business has hit a lull. Tidewater’s profits are expected to fall from nearly $8 a share in its last fiscal year (ended March) to less than $6 a share this year, and $5 next year. But shares trade at just eight times this last figure, and Tidewater has negligible debt and a decent dividend. One bright spot about a downturn in the marine services business: It makes ships less expensive. That gives a well-financed company like Tidewater the opportunity to improve its fleet on the cheap and wait for boom times to return.

Portland General Electric

Price/book: 1.0
Dividend yield: 5.2%

The electric power business is often thought of as being recession-proof. It’s not, since even though homeowners aren’t likely to turn out the lights to save money, some industrial customers cut back on hours, idle plants or even fold. Accordingly, Portland General Electric (POR) is expected to see sales slip 3% this year. Meanwhile, power outages cut into second-quarter profits. Shares seem adequately discounted for the bad news, at 14 times this year’s earnings forecast, and more important, they come with a 5.2% dividend yield. While early forecasts for next year’s earnings surely amount to more guessing than science, analysts foresee a 25% recovery from this year’s depressed earnings.

Source: SmartMoney.com | 2 Sep 2009 | 10:00 pm

Will You Be One of Medicare's New Winners? (Consumer Action)

Seniors are the biggest consumers of the country’s health care system in terms of dollar amount and volume. They generally take more prescription drugs, visit the doctor more often and stay in the hospital more frequently than the average patient. So they would be most impacted by any overhaul of the health-care system.

They’re also the group that’s reported feeling most “confused” by the debate over reform.

Overall, 62% of people over 65 say they’re confused about health-care plans being considered by Congress compared with 43% of those under age 65, according to an August poll by Kaiser Family Foundation, a health policy nonprofit research group. And less than a quarter of seniors polled believe reform would benefit them or their families compared with 39% of those under 65.

Much of the unease stems from potential changes to Medicare, a program used by about 15% of the population that accounts for 22% of total personal health-care spending.

More debate over the legislation is expected once Congress returns from its summer recess after Labor Day. President Obama is expected to lay out a more specific blueprint for what he wants out of the plan as early as next week.

In the meantime, here’s a look at how the current proposals would change health care for older Americans.

1. Savings for seniors in the doughnut hole

Premiums for drugs could rise as much as 20% over the next decade, according to a letter released last week by the Congressional Budget Office (CBO) addressing potential reform tweaks to Medicare Part D, the program that subsidizes prescription drug costs. Despite a rise in premiums, overall spending on prescription drugs would fall, on average, the CBO says.

The House bill would effectively increase premium costs because it is designed to end an existing gap in Medicare drug coverage known as the "doughnut hole." Currently, about a quarter of Medicare patients with prescription drug coverage fall into this hole. Once the cost of a patient’s prescriptions exceeds about $2,700 (for 2009), they have to cover the next $4,350 on their own (once beneficiaries hit $4,350 in out-of-pocket costs, catastrophic coverage kicks in and they pay only a nominal amount per prescription). The House bill would gradually narrow that gap until it would be eliminated in 2022. And before then, beneficiaries in the doughnut hole would get a 50% discount on certain brand-name drugs.

2. Some seniors will pay more

Eliminating the doughnut hole would reduce out-of-pocket costs of most Part D beneficiaries, says Tricia Neuman, the director of the Medicare Policy Project at the Kaiser Family Foundation. However, the effect on a patient’s total spending would vary based on their care.

Though they may be in the minority, some seniors have minimal drug needs and never reach the doughnut hole. They’ll likely lose out under the legislation and end up paying more in additional premiums than they would gain from lower cost sharing.

3. Doctor fees stay the same

Under current law, doctors are scheduled to see an across-the-board 20% cut in the fees they can charge Medicare patients next year. The House bill would essentially repeal this reduction by providing more funding for payments to physicians, says Chris Conover, a public policy research scholar at Duke University’s Center for Health Policy.

That part of the bill is designed to prevent a surge in the number of doctors unwilling to see Medicare patients. “So relative to the status quo, this isn’t a big deal. But had [Congress] not made this fix, it likely would have been a huge deal,” says Conover. A bill without this provision (or a bill that fails to pass Congress) could leave seniors with fewer doctors and, by extension, limited access to medical care.

4. Cuts to Medicare Advantage program

There are two basic ways seniors get Medicare coverage. Roughly 80% enroll in a traditional Medicare and prescription drug program. The rest use one of several Medicare Advantage programs, which are run by private insurers. Advantage plans get federal subsidies and typically have more generous benefits like dental and vision coverage.

The plans now cost the government about 14% more per person than regular Medicare, according to an analysis by the Medicare Payment Advisory Commission, an independent Congressional agency. The House legislation would scale back payments to Advantage plans and would save $156 billion over 10 years, according to the CBO.

The potential impact of these cutbacks on beneficiaries is a source of some resistance to reform. But no one knows yet how private insurers will respond to a change in those federal subsidies. Companies could decide to end their programs if they don’t feel they can operate them profitably, says Neuman. Or they may cut back on extra benefits or increase premiums or cost sharing.

Any of those changes would trouble seniors using the Advantage program. “They’ll lose the plans they had come to like,” Conover says.

5. Longer wait times at the doctor’s office

One goal of reform is to expand health care access to the 47 million uninsured Americans. Say a typical person without coverage gets 50% to 60% of the care of a traditionally insured person. If legislation passes granting these people coverage, then “all of a sudden, you’ll essentially double their utilization,” Conover says. And that may affect all consumers’ access to care.

“We haven’t changed the number of providers, so it’s sort of obvious there will be longer waiting times, which will affect everybody,” Conover says. To the degree that the elderly are disproportionate users of the health-care system, they’ll feel it more. The problem will be more acute in states where the uninsured rate is higher – like in Texas – because demand for care will rise that much more relative to the rest of the population, he says.

Source: SmartMoney.com | 2 Sep 2009 | 10:00 pm

AIG board members concerned about CEO's comments: report

NEW YORK (Reuters) - Some members of insurer AIG's board are concerned about recent strong comments from their new chief executive Robert Benmosche, the Wall Street Journal said on Wednesday citing people familiar with the matter.

Source: Reuters: Business News | 2 Sep 2009 | 9:57 pm

Pfizer to pay $2.3 billion, agrees to criminal plea

NEW YORK/WASHINGTON (Reuters) - Pfizer Inc agreed on Wednesday to plead guilty to a U.S. criminal charge relating to promotion of its now-withdrawn Bextra pain medicine and will pay a record $2.3 billion to settle allegations it improperly marketed 13 medicines.

Source: Reuters: Business News | 2 Sep 2009 | 9:34 pm

Pfizer to pay $2.3 billion, agrees to criminal plea (Reuters)

Reuters - Pfizer Inc agreed on Wednesday to plead guilty to a U.S. criminal charge relating to promotion of its now-withdrawn Bextra pain medicine and will pay a record $2.3 billion to settle allegations it improperly marketed 13 medicines.

Source: Yahoo! News: Business | 2 Sep 2009 | 9:34 pm

Mercury bosses defend $150m special dividend to Govt

Bosses of state-owned Mighty River Power, owner of Mercury Energy, are defending a $150 million special dividend for the Government at a time when many customers are financially squeezed by economic recession. The special dividend...
Source: New Zealand Herald - Business | 2 Sep 2009 | 9:00 pm

SEC bungled Madoff probes, agency watchdog says (AP)

AP - Pushing past years of "red flags," investigators at the Securities and Exchange Commission bungled their probes of Bernard Madoff so badly that his multibillion-dollar fraud not only flourished but he used the exams to suck in new investors, an agency watchdog declared Wednesday.

Source: Yahoo! News: Stock Markets News | 2 Sep 2009 | 7:26 pm

Germany's cash-for-clunkers programme stalled

BERLIN - Government funds for Germany's ?5 billion (NZ$10.5 billion) "cash-for-clunkers" incentive programme for new car buyers willing to scrap their old autos has ran out. Critics contend the billions of euros in handouts benefitted...
Source: New Zealand Herald - Business | 2 Sep 2009 | 7:00 pm

SEC flubbed Madoff probe: watchdog (AFP)

AFP - The US Securities and Exchange Commission flubbed a probe of confessed swindler Bernie Madoff, who pulled off one of the biggest frauds in Wall Street history, an internal probe showed.

Source: Yahoo! News: Stock Markets News | 2 Sep 2009 | 6:54 pm

Morgan Stanley, Moody's, S&P must defend fraud claims

NEW YORK (Reuters) - A U.S. federal judge ruled that Morgan Stanley and two credit rating agencies must defend fraud charges in a class-action lawsuit accusing them of masking the risks of an investment linked to subprime mortgages, and which eventually collapsed.

Source: Reuters: Business News | 2 Sep 2009 | 6:38 pm

Cartel whisteblowers may soon get better protection

The Commerce Commission is proposing to extend its leniency policy for members of cartels who spill the beans on their illegal schemes. The regulator says experience shows an effective leniency programme is the single most effective...
Source: New Zealand Herald - Business | 2 Sep 2009 | 6:30 pm

Spring boom for Auckland real estate market

Auckland's property market has shot off in spring, with house sales up more than 65 per cent on the same month last year, says real estate firm Barfoot & Thompson. Average prices were up slightly, rising to $520,023, a 1.5 per...
Source: New Zealand Herald - Business | 2 Sep 2009 | 6:30 pm

Turner tells banks to plan ahead for their own demise

The world’s biggest banks should be made to draw up plans that can be put into practice if they fail, the chairman of the Financial Services Authority (FSA) said yesterday.

Source: Latest Business News from Times Online | 2 Sep 2009 | 6:05 pm

China tightens its grip on technological future

Spiralling fears that China is plotting to choke off the global supply of critical “technology minerals” used in products ranging from hybrid cars to laptop computers appeared to be confirmed yesterday.

Source: Latest Business News from Times Online | 2 Sep 2009 | 6:00 pm

Blistering report faults SEC for Madoff misses (Reuters)

Reuters - U.S. securities regulators missed "numerous" red flags that may have led to Bernard Madoff's $65 billion Ponzi scheme and never did a "thorough and competent" probe despite complaints dating to 1992, a federal watchdog has concluded.

Source: Yahoo! News: Stock Markets News | 2 Sep 2009 | 6:00 pm

Harmony restored as YouTube deal with PRS ends video dispute

Music videos featuring the world’s leading artists will return to YouTube today after the website settled a royalty dispute that left British users unable to access tens of thousands of videos for six months.
Source: Latest Business News from Times Online | 2 Sep 2009 | 6:00 pm

YouTube in talks over offering film rental service

YouTube is in talks with leading movie studios about introducing film rentals that would be streamed from its site, according to people close to the negotiations
Source: Financial Times - US homepage | 2 Sep 2009 | 5:26 pm

BP drills deepest-ever oil well in Gulf of Mexico

NEW YORK -- Nearly seven miles below the Gulf of Mexico, oil company BP has tapped into a vast pool of crude after digging the deepest oil well in the world.

Source: L.A. Times - Business | 2 Sep 2009 | 5:13 pm

SEC staff failed over Madoff

The SEC’s watchdog said the regulator never performed ‘a thorough and competent investigation or examination’ of Bernard Madoff in spite of receiving eight specific complaints
Source: Financial Times - US homepage | 2 Sep 2009 | 5:12 pm

Bad news for investors in IMP fund

A finance company chaired by former Finance Minister Ruth Richardson has told investors not to expect all of their money back. The IMP Diversified Income Fund entered into a moratorium agreement with investors in June last year...
Source: New Zealand Herald - Business | 2 Sep 2009 | 5:00 pm

Summary Box: SEC watchdog finds incompetence (AP)

AP - INCOMPETENCE AT THE SEC: The inspector general of the Securities and Exchange Commission has found the agency bungled its five investigations of Bernard Madoff's business, despite numerous red flags raised over 16 years about the multibillion-dollar fraud. While the IG's report found incompetence, it discovered no evidence of corruption at the agency with regard to the now-disgraced financier.
Source: Yahoo! News: Stock Markets News | 2 Sep 2009 | 4:59 pm

Pitt, Patrikis, Schwarcz Discuss Regulatory Reform: Audio

Source: Bloomberg - All Podcasts | 2 Sep 2009 | 4:54 pm

US debt markets show signs of better health

A sign of a return to health of in one of the more damaged parts of the financial markets is expected to be revealed on Thursday
Source: Financial Times - US homepage | 2 Sep 2009 | 4:37 pm

Cerberus to bar withdrawals from two funds

Cerberus is barring withdrawals from two new hedge funds for three years to avoid repeating the large outflows that followed its lossmaking purchases of Chrysler and GMAC
Source: Financial Times - US homepage | 2 Sep 2009 | 4:30 pm

Capmark in Berkshire asset deal, may go bankrupt (Reuters)

Reuters - Warren Buffett's Berkshire Hathaway Inc (BRKa.N) (BRKb.N) and Leucadia National Corp agreed to buy Capmark Financial Group Inc's mortgage loan and servicing business for as much as $490 million, increasing exposure to a possible U.S. housing recovery.
Source: Yahoo! News: Business | 2 Sep 2009 | 4:26 pm

Subramanian on Volatility; Brady on T-Bills, Bonds: Audio

Source: Bloomberg - All Podcasts | 2 Sep 2009 | 4:13 pm

Podcast: The Economics Of Ticketmaster

Ticketmaster: You pay for the convenience, literally. (Ginnerobot / Flickr Creative Commons)

On today's Planet Money:

A listener wants to know why Ticketmaster charges a convenience fee if you want to print out the tickets you buy online. After all, it's your ink and paper, and you're not asking Ticketmaster to mail your purchase.

Economist Emily Oster of the Chicago Booth School of Business has been decoding the universe for us, and she's got an answer for you. It's got to do with the network effect, locking up a market and -- of course -- supply and demand.

If you've got an economic riddle for Emily Oster, e-mail it over.

Bonus: After the jump, meet former Ticketmaster CEO Fred Rosen.

Download the podcast; or subscribe. Intro music: Q-Tip's "Breathe and Stop." Find us: Twitter/ Facebook/ Flickr.

Fred Rosen explains why ticket prices rose in value, and why he gets so much joy from providing a service:

» E-Mail This » Add to Del.icio.us

Source: NPR Blogs: Planet Money | 2 Sep 2009 | 4:06 pm

Another Swine Flu Winner: Yogurt?

yogurt

Ever since a friend of mine - a teacher - told me about the ‘new studies’ proving that a certain brand of yogurt would help keep my kids swine flu-free this year, I have been hunting for the source of that information. The more I researched, the more irritated I got because I seemed to be on a wild probiotics chase.

The one thing that became clear: yogurt will probably sell VERY well this season. And that fancy yogurt, the one they make fun of SNL, the one that costs two or three times the regular stuff - it could fly off the shelves. The H1N1 panic will be fueling the sales.

What is Probiotic and Why Are We Paying More For It?

In short, yogurt contains ‘good’ bacteria. For years these have been referred to as ‘probiotics’. They are abundant in yogurt that contains ‘live and active cultures’.

Enter marketing. We love them.

A few years ago, yogurt makers started adding extra bacteria strains into the yogurt that already contained the probiotics and started labeling it probiotic. They have been pushing it as a digestive aid for several years now.

Certain brands have differentiated their product based on this supposedly superior ingredient, but in my research I was unable to find anything to proove that one brand is better than any other.

I found a lot of anecdotal evidence, a lot of talk about what to call probiotic, and even some pretty convincing ads for yogurt makers, but I couldn’t find where the amount of probiotic in the yogurt is specified, or
if there is a doctor recommended specified amount of probiotics to ingest.
I didn’t find any studies that showed specifically that probiotics decreased the chance of getting the flu.

Nothing against yogurt, even pricey yogurt. I just would like someone to explain why one is so much better than the other. If you know of any authoritative sources, please share.

And if you own stock in any food companies that peddle yogurt, congratulations.

Image Credit: Aric Riley, Flickr

Source: Business Pundit | 2 Sep 2009 | 4:05 pm

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

AP - How far the Dow Jones industrial average has fallen or advanced each trading day since Lehman Brothers Holdings Inc. filed for Chapter 11 bankruptcy protection on Sept. 15. Since Lehman's fall, which touched off a paralysis of the credit markets and deepened the recession, the stock market has gone through an extended period of volatility before kicking into a big rally starting this spring. The numbers are the closing levels for the Dow:
Source: Yahoo! News: Stock Markets News | 2 Sep 2009 | 4:03 pm

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

Write-Offs: 09.02.09

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$$$ Ashley Dupre, mom not keen on the hooker fucker taking office again. [NYP]

$$$ Greenwich wives on healthcare [CF]

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$$$ So you just squandered billions...take another whack at it. [WaPo]

$$$ The Great Recession: September 19 [Black Out Film Festival]

$$$ Ben Stein and the plight of the upper-middle-class parent [FS]

Sponsored Topics: Film festival - Movies - Arts - United States - Bloomberg L.P.
Source: Dealbreaker | 2 Sep 2009 | 4:00 pm

Stocks fade as traders worry about unemployment (AP)

AP - The stock market extended its slide to a fourth day as investors worried that a weak job market will trip up a recovery in the economy.

Source: Yahoo! News: Stock Markets News | 2 Sep 2009 | 3:44 pm

How the major stock indexes fared on Wednesday (AP)

AP - The stock market extended its slide to a fourth day Wednesday as investors worried that a weak job market will trip up an economic recovery.
Source: Yahoo! News: Stock Markets News | 2 Sep 2009 | 3:42 pm

Blanchflower Sees `Slim' Chance for `V-Shaped' Recovery: Audio

Source: Bloomberg - All Podcasts | 2 Sep 2009 | 3:38 pm

Bank of America Is Light On Sympathy

BAC can hardly afford any more losses. In the era of widespread identity theft and fraud, the bank needs to take a zero tolerance policy towards nefarious individuals trying to run afoul of the law. So to those like Steve Valdez, Bank of America has made its stance clear, they will not be duped.

A Florida man born without arms says a Tampa bank would not let him cash a check because he couldn't provide a thumbprint.

Steve Valdez didn't have an account at a Bank of America location in downtown Tampa, where he tried to cash a check from his wife last week. However, Valdez has prosthetic arms and is unable to provide a thumbprint. He says he presented two forms of identification but was still denied.

Sponsored Topics: Bank of America - IdentityTheft - Fraud - Bank - Business
Source: Dealbreaker | 2 Sep 2009 | 3:30 pm

US maintains pressure over Megrahi

Opposition parties voted 73 to 50 against the decision but did not push for a vote of confidence in either Mr MacAskill or the minority Scottish National party government
Source: Financial Times - US homepage | 2 Sep 2009 | 3:22 pm

M&A: America’s Top Companies Hold $335 Billion Cash (XOM, MSFT, JNJ, PG, BRK-A, IBM, T, AAPL, GOOG, CVX, CSCO, KO, INTC, ORCL, BAC, WFC, JPM, GE, PFE)

Now that we are out of the woods in the crash scenario, assuming this week is no ill omen, investors may want to know which of the big companies would start to deploy their billions and billions of dollars in cash for large mergers or strategic bolt-on acquisitions. In all of these companies, we are [...]

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Source: 24/7 Wall St. | 2 Sep 2009 | 3:05 pm

Chandler Favors ETFs That Track Currencies: Audio

Source: Bloomberg - All Podcasts | 2 Sep 2009 | 3:01 pm

Paul Kanjorski Has His Answer Now

The great mystery has now been solved. Following repeated pleas from Kanjorski to SEC Inspector General H. David Kotz to reveal exactly what caused the agency to allow King Ponz to get away with his $50 billion heist, the SEC has an answer that was well worth the wait. The months spent going through thousands of emails and reports has yielded a bounty of information previously unknown to the world. In the 22 page executive summary the SEC reaches an unthinkable conclusion for the good Congressman: we had all the information we needed and completely fucked everything up. Now if they could explain why they need an additional 450 pages of cut and paste jobs from the Markopolos file to cement their claim, that would be value added.

Sponsored Topics: US Securities and Exchange Commission - Business - Allegedly Unethical Firms - Inspector General - Paul E. Kanjorski
Source: Dealbreaker | 2 Sep 2009 | 2:51 pm

Listener: The False Economy Of Denying Health Care

Susan writes:

You've been talking health care for average folks, but what about those of us who aren't average? There's a saying doctors learn in med school, "When you hear hoofbeats, think of horses," but every once in a while it turns out that what you hear is a zebra.

In medical parlance, I'm one of those zebras: I did a lot of running around getting all sorts of negative or inconclusive tests, until finally my naturopath got me on the right track that led to a good allergist/immunologist (after years wasted with a lousy one), who ordered an expensive ($500) and rare test, twice (second time at a different lab to confirm, as results were almost too unusual). Result? Turns out I have a random 1 in 10,000 immune defect (which she treated successfully with a protein vaccine, G-d bless her).

Before that was discovered, I had a lot of doctors treating me like a psychosomatic, since if they couldn't find anything wrong, it must be all in my head. And my concern is that calculations of false economy could result in zebras like me not getting the diagnoses and care that we need to get back to participating fully in life.

By false economy, what I mean is that, on the surface, we are an unfair drain on the system, getting a lot of expensive and inconclusive tests, taking a lot of expensive specialists' time. But in a larger sense, if you look at me not as an economic variable in the health care system, but rather as an economic variable in the greater economy of domestic production, by helping restore me to health, you're getting back many times the health care investment by restoring me to full economic productivity.

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Source: NPR Blogs: Planet Money | 2 Sep 2009 | 1:59 pm

Kaufman Says Federal Reserve Needs `Reformation': Audio

Source: Bloomberg - All Podcasts | 2 Sep 2009 | 1:47 pm

Presented By:

Source: Dealbreaker | 2 Sep 2009 | 1:43 pm

Leveraged ETFs On The Ropes

The world of one-day wonders is under serious fire. Enough people stayed on the leveraged ETF roller coaster too long and wondered how a theoretical 30%+ gain turned into a small loss that the class action lawsuit wave has started. And what better place to start than the ETF that most folks who expected at least part of last year's bonus to be paid in stock had to hedge their employers, the SKF. ProShares will have a fun time reliving and explaining away performance track records such as one six week period last fall.

For example, in a six week period from September 15, 2008 through October 31, 2008, the DJFI declined by over 17%. Despite a reasonable expectation based upon Defendants' disclosures that SKF would rise by up to 34% during this period, SKF actually fell by nearly 6%.

If anything, regulators should be throwing ProShares a party. If all those evil short sellers who allegedly caused the market to free fall wound up losing money by doing what they do best, isn't that what the masses have been waiting for all along?

Sponsored Topics: Roller coaster - SKF - Exchange-traded fund - Recreation - Theme Parks
Source: Dealbreaker | 2 Sep 2009 | 1:43 pm

Hedge Fund Community: Which One Of You Is Lenny Dykstra's White Knight?

So, a bankruptcy judge ruled yesterday that Lenny Dykstra was not mentally competent enough to manage his own Chapter 11 bankruptcy, and that his finances be turned over to a court appointed trustee. This of course riles me to no end (Nails owned and operated his own chain of car washes, lady, I think he knows what he's doing here), but what really sticks in my craw is the insinuation L-Dykes might not have some well-pocketed contacts in his Rolodex.

Dykstra also told the judge he has a $12 million offer for the Gretzky home from someone "who runs a hedge fund." That amount would cover the first mortgage from Washington Mutual (now Chase). With no documents to support the claim, and with other liens on the house, the judge called the offer "speculative".

Assuming this is legit, which one of you is going to step up and prove Geraldine wrong?

Sponsored Topics: Lenny Dykstra - Hedge fund - Chapter 11 Title 11 United States Code - Washington Mutual - Business
Source: Dealbreaker | 2 Sep 2009 | 1:24 pm

Charles Gibson Steps Down as ABC Anchor; Diane Sawyer to Replace Him

zzzsawyer

ABC World News anchor Charlie Gibson will be leaving the show in January. Diane Sawyer will succeed him. The Washington Post has more:

The move, announced Wednesday by ABC, will leave a sizable void at “Good Morning America,” where Sawyer’s star power will be hard to replace.

Gibson, who left “GMA” for the evening news anchor job in 2006, has had a solid run, winning critical praise and a solid second-place finish in the ratings race. But at 66, and with his wife Arlene having retired, Gibson approached ABC News President David Westin about two months ago and said he was strongly considering stepping down.

Westin never considered anyone but Sawyer for the broadcast, and when Gibson made his decision finally last week, he approached Sawyer, who had also been a contender for the anchor post in 2006 — the same year Katie Couric became the first female solo anchor, at CBS. Sawyer agreed to take the job Tuesday night.

The main question now is who will replace Sawyer on Good Morning America.

Interestingly, this also means nightly news has gone female. With Katie Couric succeeding Dan Rather on CBS, the anchormen of the past have mostly given way to anchorwomen.

Will a gender change influence the way people express and receive news? What do you think?

Source: Business Pundit | 2 Sep 2009 | 12:20 pm

FOMC Minutes Show a Punt

The minutes of the August 11 and 12 FOMC meeting shows a Fed that is slowly growing more confident in things, yet the conviction is low. The FOMC was more confident that the recession is ending and that growth will resume in the second half of the year after recent policy moves. It also noted [...]

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Source: 24/7 Wall St. | 2 Sep 2009 | 12:09 pm

BP discovers ‘giant’ US oilfield

The Tiber field, in deep water about 250 miles south-east of Houston, could hold at least 3bn barrels of oil, meaning that it is likely to be one the largest finds of recent years
Source: Financial Times - US homepage | 2 Sep 2009 | 11:56 am

Cybersource Rated `Buy’ at Signal Hill

Source: Bloomberg - All Podcasts | 2 Sep 2009 | 11:44 am

Wren Sees U.S. Corporate Revenues Rising Into 2010: Audio

Source: Bloomberg - All Podcasts | 2 Sep 2009 | 11:35 am

S&P 500 Underperforming Bailed Out Banks

As most people know, last year was a tough year for bank CEOs- especially at bailed out institutions. Ask Kenny boy or Vikula if they'd like to repeat 2008 and you'd probably hear a resounding 'hell no'. Just how bad was it? So bad the average compensation for CEOs at 20 banks that got some form of government handout was a pedestrian 37% higher than the average for S&P 500 heads of state.

Lenders including Bank of America Corp. and Wells Fargo & Co. paid CEOs an average of $13.8 million last year, topping the $10.1 million for S&P 500 leaders, according a report released today by the Institute for Policy Studies. Average CEO pay was 430 times larger than for typical workers, and at nine of 20 banks the value of stock options soared $90 million in a year, the Washington-based group said, citing proxy statements.

Get the popcorn ready for the moment of realization when the bonus theater resumes this fall. No doubt members of the compensation firing squad in DC will wind up looking at each other in a bit of a haze when they think through the burning question on their minds. Who would be careless and thoughtless enough to encourage these bank CEOs to take their compensation in the form of stock which could double instead of cash?

Bank CEOs Paid More Than S&P 500 Chiefs, Study Shows [Bloomberg]

Sponsored Topics: Bank of America - Wells Fargo - Business - Financial Services - Banking Services
Source: Dealbreaker | 2 Sep 2009 | 11:30 am

Levitt Says Regulatory Changes Need Congressional Action: Audio

Source: Bloomberg - All Podcasts | 2 Sep 2009 | 11:28 am

Bentz Says U.S. Has Seen Season Highs for Gasoline: Audio

Source: Bloomberg - All Podcasts | 2 Sep 2009 | 11:24 am

Sheryl Weinstein's Husband: Don't Be So Quick To Judge My Whore Wife

First, buy her book, because he'll be taking half the profits, Ron Weinstein told The Daily Beast. Also discussed in what must have been the most awkward conversation ever were Ron's thoughts on:

The adultery being NBD but hit his portfolio took? Quite another:

The Weinsteins move in circles where it's tacitly understood that wives play around, too, but they do it discreetly. Disclosing an affair isn't desirable, but Ron doesn't think it should be the end of a marriage. "Affairs are commonplace and shouldn't be such a big deal," he says. "However, having an affair with the person who is the biggest crook in the world and stole all my assets is another issue entirely."

The dick talk:

"I thought it was trashy," Ron says, "but I thought it was necessary to get insight into how somebody becomes a sociopath. What happens when they're young that can cause somebody to be this horrible?"

Me and you:

Citing the Judeo-Christian principles "this country was built on," he says he told her, "I think the masses are not going to feel a whole lot of empathy for you. I don't think they understand. I read blogs, I read the comments, and I get nauseous. As hurtful as [the book] is to me, it was probably necessary or she'd be a basket case. It doesn't mean I have to agree with her, but I understand it. When people write these things on these blogs, what the hell do they know? They're looking at the surface." He describes the cliché-ridden attacks--"She cheated on her husband, she's a money hungry slut"--stops talking in order to collect his emotions, then explains: "I dislike the choice she made. I am not okay with it, but I try to understand it."

Sponsored Topics: Marriage - Adultery - Relationships - Judeo-Christian - Slut
Source: Dealbreaker | 2 Sep 2009 | 10:57 am

Yoga teachers bent on no regulations

The ancient practice of yoga has grown into a multi-billion dollar industry, so a growing number of states are trying to regulate it. But that's leaving some yoga teachers in a twist. Lisa Napoli reports.
Source: Marketplace | 2 Sep 2009 | 10:44 am

Stimulus funds provide opportunities

Dustin Woodman and Russ Dickerson, employees of Coconino Rural Environment Corps, talk with Kai Ryssdal about how the stimulus package has helped their organization.
Source: Marketplace | 2 Sep 2009 | 10:43 am

A different approach to home buying

Critics say the real-estate industry has been slow to react to new realities, using outdated methods of business. But one Seattle start-up is trying to shake things up. Mitchell Hartman reports.
Source: Marketplace | 2 Sep 2009 | 10:43 am

Four simple steps to health care reform

In an effort to seal a deal on health care reform, President Obama may just be on the brink of giving up on a government insurance plan. But Commentator David Frum says much of the reform comes down to individuals.
Source: Marketplace | 2 Sep 2009 | 10:43 am

Cash-strapped Philly borrows money

Philadelphia will borrow $275 million in the form of an adjustable-rate loan from JPMorgan Chase to pay back vendors. Jeremy Hobson reports.
Source: Marketplace | 2 Sep 2009 | 10:43 am

Is BP's new oil field worth drilling?

British energy company BP has made a giant discovery of oil in the Gulf of Mexico. But it's so deep it could be a decade before we see any oil. Bob Moon reports.
Source: Marketplace | 2 Sep 2009 | 10:43 am

Off-label marketing costs Pfizer

Pharmaceutical giant Pfizer will pay $2.3 billion to settle charges that it illegally promoted pills for uses not approved by the Food and Drug Administration. Tamara Keith reports on the down sides to off-label marketing.
Source: Marketplace | 2 Sep 2009 | 10:42 am

Dallek Says Kennedy Leaves Important Mark on History: Video

Source: Bloomberg - All Podcasts | 2 Sep 2009 | 10:36 am

At Restaurants, Don't Split The Bill

By David Kestenbaum

When you're out at dinner with friends, should you divide the bill up evenly?

Economist Russ Roberts at George Mason University says you should think twice about that because in a shared situation, everyone ends up ordering more.

Russ says you should also think twice about earmarks and taxes. He tied all that together in this essay "If You're Paying, I'll Have Top Sirloin" which I just read for the first time and got me thinking about the perils of health insurance.

I e-mailed Russ to ask if he practiced what he preached.

He opens the essay with an anecdote about attending a theater performance where the director asked the audience to vote against a measure that would limit state taxes and perhaps cut the theater's funding.

My question:

You were in the audience at the theater also. How did you feel about knowing your ticket was being subsidized? What if the tax break went away and the theater died. Would you be OK with that?

Russ' response:

Your question is a nice example of how government subsidies can corrupt morality.

Sitting in that audience, I hated the idea that the downstate farmer was subsidizing my enjoyment of Stoppard and Shakespeare. It doesn't seem right, does it? And I would have no problem with that subsidy going away, even if it meant the death of the theater. If those of us who love theater can't pay enough to cover the costs, I don't the logic or morality of forcing people who don't like theater to make up the difference.

But then there's the seductive whisper in the ear that why should we theater-goers be the suckers who stand on principle while everyone else gets to indulge their pet desires? That's what was working on my neighbor so that she could feel good about exploiting others. Toss in a few thoughts about the possible social benefits of watching Shakespeare and the school programs the theater runs and you can feel downright smug about exploiting others.

Russ also hosts the podcast Econtalk.

UPDATE
Russ just sent this email, subject line: Caveat

BTW, it's often wise to split the bill with your friends, it saves time and you like your friends--you might even enjoy subsidizing that second glass of wine. But never split the bill with a bunch (a few hundred millions, say) of strangers. That's how you get the buffet from hell.
Russ

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Source: NPR Blogs: Planet Money | 2 Sep 2009 | 10:28 am

Mark Madoff Would Rather Not Talk About Having All His Money Taken Away, What His Future Life Behind Bars Will Be Like, Thanks

CBS knows, 'cause they tried to get him to dish on the subject of assets possibly being seized yesterday and Fish Boy was having none of it. He offered only "no comment" and that face (which at the moment has a serious Sam Israel thing going on). Then in typical Madoff form, it was his wife who told reporters on the scene where they could go, possibly though not definitely stopping short of throwing down fisticuffs like Andy's girlfriend, Catherine. That'll be this weekend on Nantucket, during what might be M&A's final days of freedom. Be forewarned she's looking for a fight.

Sponsored Topics: Nantucket Massachusetts - Israel - Nantucket - United States - Massachusetts
Source: Dealbreaker | 2 Sep 2009 | 10:10 am

Schering-Plough loses $473 million tax dispute (AP)

AP - Drugmaker Schering-Plough Corp. has been denied a $473 million tax refund by a federal judge who ruled the company made two transactions just to avoid paying taxes on $690 million in profits from overseas subsidiaries.
Source: Yahoo! News: Business | 2 Sep 2009 | 10:05 am

Pole Dancing Doll: Yep, It’s Really for Kids

Image: Gizmodo

If you’ve ever aspired to raise a stripper, this pole dancing doll could be the answer. Gizmodo claims this doll, manufactured by an unknown company, is actually intended for kids:

It rotates. It has blinking lights, a disco ball, and a pole. And it’s probably one of the wrongest toys you can give to any girl.

The doll doesn’t currently accept any money, but future versions should take care of that economic glitch.

Source: Business Pundit | 2 Sep 2009 | 9:55 am

NASDAQ Toppy? Chartist/Technician Notes Secular Bear (QQQQ, SMH, XLK)

What happens when you get a pullback after the markets have rallied some 50% from the lows of the year? Technicians key in with the charts, and much of the market bullishness suddenly disappears. Throw in a the slowest or second slowest market week (Labor Day and the week between Christmas and New Years). We [...]

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Source: 24/7 Wall St. | 2 Sep 2009 | 9:47 am

The Save The Caymans Campaign

There is a real crisis brewing. One that is going to take a unified, global effort to avoid. The problem is the government of the Cayman Islands is headed for bankruptcy and, in a chilling development, may consider instituting taxes to save itself. After betting big that continued growth in its financial sector would cover its $67.5 million budget deficit, the past two years have driven the original tax haven in the sun into begging the mother ship in the UK for £190m in emerging bailout funds. But, so far, the news has not been good.

"I fear you will have no choice but to consider new taxes - perhaps payroll and property taxes," (junior Foreign Office minister Chris) Bryant wrote to (the leader of government business William McKeeva) Bush. "I understand, of course, that in so doing you will want to consider carefully the implications for Caymans' economy, including the financial services industry."

With tax havens from Switzerland to Vanuatu quitting the game on a daily basis, there seems to be a simple solution to the Caymans' problem. If the worst thing hedge funds fleeing London have to worry about is the interaction between British skin and Caribbean sun, that seems like a small price to pay.

Bankruptcy threat brings new concept to the Cayman Islands ... taxes [Guardian]

Sponsored Topics: Cayman Islands - Vanuatu - Foreign and Commonwealth Office - Hedge fund - Financial services
Source: Dealbreaker | 2 Sep 2009 | 9:45 am

Low-Wage Workers Get Cheated Routinely, Survey Finds

By Laura Conaway

People getting by on low wages also tend to lose out on overtime they've earned, and they're more likely to get paid less than the minimum wage. Those are the findings in "Broken Laws, Unprotected Workers," a new study by the Ford, Joyce, Haynes and Russell Sage Foundations.

The New York Times runs the numbers:

In surveying 4,387 workers in various low-wage industries, including apparel manufacturing, child care and discount retailing, the researchers found that the typical worker had lost $51 the previous week through wage violations, out of average weekly earnings of $339. That translates into a 15 percent loss in pay.

The Times calls the study "the most comprehensive examination of wage-law violations in a decade." Of the workers interviewed, 68 percent had been through at least one violation of their pay rights in the past work week. Female illegal immigrants were most likely to report they'd earned less than the minimum wage -- in industries ranging from garment work to childcare.

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Source: NPR Blogs: Planet Money | 2 Sep 2009 | 9:44 am

Project on Government Oversight Finds Lewd ArmorGroup Security Violations

wackenhut

The Project on Governmnet Oversight (POGO), a nonprofit dedicated to exposing government corruption, has documented lewd behavior by military contractors working for ArmorGroup, North America, a subsidiary of Wackenhut Security. Reuters has more:

Private contractors hired by the U.S. government have jeopardized security at the American embassy in Kabul with lewd, drunken conduct and an understaffed guard force at a time of rising violence in the Afghan capital, a watchdog group said on Tuesday.

The nonpartisan Project on Government Oversight sent U.S. Secretary of State Hillary Clinton a letter documenting complaints about guards working for ArmorGroup, North America, and photos of nearly naked men behaving lewdly at their camp.

The firm employs 450 guards to provide security at the Kabul embassy under a five-year, $189 million State Department contract. The department extended the contract in June.

Pictures obtained by the group showed male guards, scantily dressed in G-string style garments, dancing around a bonfire and urinating while others snapped photographs. Video showed them pouring alcohol down the bare backside of a new recruit and trying to drink it as it spilled from the man’s buttocks.

Additional violations include bringing prostitutes to the job, drunkenness, and lack of effective security due to language barriers. POGO has suggested that the State Department suspend ArmorGroup and Wackenhut from the position. Secretary of State Hillary Clinton has ordered an investigation into the case.

Wackenhut has not commented on the case.

Source: Business Pundit | 2 Sep 2009 | 9:29 am

Factory Orders Rise A Little. Consumers Still Sitting Tight.

By Laura Conaway

Calls for factories to make goods went up in July, the U.S. Census Bureau and the Commerce Department report, but by less than analysts expected.

A fall in demand for petroleum products and other "nondurable goods" like food dragged the number down. Demand for transportation goods jumped by 18.5 percent -- enough to push factory orders overall up by 1.3 percent. In a Thomson Reuters survey, analysts predicted growth of 2.2 percent.

The reports shows that people are still cutting back on their spending. The 1.9 percent drop in demand for nondurable goods is the most since December.

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Source: NPR Blogs: Planet Money | 2 Sep 2009 | 9:21 am

Pace of US job cuts appears to ease

A survey shows that US companies shed the fewest number of jobs in nearly a year last month, as the pace of job losses is slowly starting to ease
Source: Financial Times - US homepage | 2 Sep 2009 | 9:04 am

Productivity Makes Biggest Leap Since 2003. (Yes, You're Working Harder.)

By Laura Conaway

Productivity grew at an annualized rate of 6.6 percent in the second quarter, the Bureau of Labor Statistics reports. That's the largest increase since the third quarter of 2003.

It's good news for workers, in the sense that people with jobs are finding themselves more fully occupied. Only when companies can profit from doing more work will they hire new people to do it. When productivity rises, it suggests that employers are coming closer to having the right size of workforce -- a better base from which to grow.

Today's numbers show that actual output is falling, but that hours worked are falling faster. Compared to this time last year, output was down 5.5 percent and hours worked 7.2 percent. Labor costs -- the ratio of hourly wages to productivity -- fell at an annual clip of 5.9 percent. That's the biggest drop since the second quarter of 2000.

Update: After the jump, what "productivity" means.

In the simplest terms, productivity is total output divided by hours worked. That ratio gives us a picture of how much stuff we're making for the amount of time we're putting in.

The "hours worked" part is fairly straightforward. The Bureau of Labor Statistics tracks them each month as part of its regular report on the employment situation.

"Output" gets you into a whole lot of weeds involving "chained dollars" and other technical points. In essence, you can think of output as the gross domestic product, which measures the market value -- in dollars -- of all the nation's goods and services.

(Thanks to reader rb for the nudge.)

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Source: NPR Blogs: Planet Money | 2 Sep 2009 | 7:40 am

BP Makes 'Giant' Oil Discovery. Plus: 'Health Care Rationing Is Good'

By Laura Conaway

Good morning, especially for BP. The British petroleum group says it has made a "giant" discovery of oil in the Gulf of Mexico southeast of Houston. The Tiber field could go into production in 2014. The Financial Times explains that oil production in the U.S. is especially valuable because you can sell directly to the world's biggest market and because financial and regulatory terms are more reliable.

Overall auto sales hit a 15-month high in August. The biggest winner was Ford, with sales 17.2 percent higher this year than August 2008 -- the Ford Focus was one of the most popular buys in the Cash for Clunkers program. Dragging behind were General Motors and Chrysler. They each sold more last month than in July, but GM's year-over-year numbers were down by 20.1 percent and Chrysler's by 15.4 percent.

The Challenger jobs report shows the employers cut the least number of jobs last month since September 2008. The Bureau of Labor Statistics releases the official August unemployment report on Friday.

The Mortgage Bankers Association is asking Congress to break Freddie Mac and Fannie Mae into several smaller, privately held companies whose securities are backed by the U.S. government.

A guest poster on Baseline Scenario argues that health care rationing is good. He's got charts to prove it.

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Source: NPR Blogs: Planet Money | 2 Sep 2009 | 7:16 am

Avoid the Tree

treeinroad

Source: Business Pundit | 2 Sep 2009 | 5:50 am

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