World Business News Headlines for September 22, 2009

Fraudster steals Ben Bernanke's identity

US prosecutors say a man has pleaded guilty in an identity theft ring that ensnared Federal Reserve Chairman Ben Bernanke as a victim.

Source: Latest Business News from Times Online | 22 Sep 2009 | 4:37 am

JD Sports beats recession gloom

High Street retailer JD Sports announces increased profits for the first half of the year as sales rose during the recession.
Source: BBC News | Business | World Edition | 22 Sep 2009 | 4:27 am

Minicomputer smackdown: HP vs. Acer

Source: Business and financial news - CNNMoney.com | 22 Sep 2009 | 4:25 am

DVD Sales Crushed By Rentals, As Apple (AAPL) And Amazon (AMZN) Rise

DVD sales are flagging and rentals are up, news which is likely to be unwelcome at the major movie studios. The Digital Entertainment Group announced that in the first half of this year, DVD sales fell almost 14% to $5.4 billion. DVD rental revenue rose 8% to $3.4 billion. While kiosk operator RedBox and DVD mailer NetFlix [...]

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Source: 24/7 Wall St. | 22 Sep 2009 | 4:25 am

Airline industry plans 50% cut in emissons

The global aviation industry has agreed to cut its net carbon emissions to half 2005 levels by 2050 under a plan to be set out by British Airways chief, Willie Walsh
Source: Financial Times - US homepage | 22 Sep 2009 | 4:24 am

GIC trims Citi stake to below 5 percent

SINGAPORE (Reuters) - Singapore's largest sovereign wealth fund GIC said on Tuesday it had halved its stake in Citigroup to below 5 percent, making a profit of $1.6 billion as global equity markets rebound.

Source: Reuters: Business News | 22 Sep 2009 | 4:17 am

GIC trims Citi stake to below 5 percent (Reuters)

Reuters - Singapore's largest sovereign wealth fund GIC said on Tuesday it had halved its stake in Citigroup to below 5 percent, making a profit of $1.6 billion as global equity markets rebound.

Source: Yahoo! News: Business | 22 Sep 2009 | 4:17 am

GIC makes $1.6bn in profit from Citi sale

GIC, Singapore’s largest sovereign wealth fund, said it had halved its stake in Citigroup to below 5 per cent, making a profit of $1.6bn as global equity markets rebound
Source: Financial Times - US homepage | 22 Sep 2009 | 4:11 am

Buzzword: Apple vs. Microsoft

Source: Business and financial news - CNNMoney.com | 22 Sep 2009 | 4:07 am

Twitter Moves Into Top 50 US Websites

It may not be clear how Twitterwill ever make money, but its growth is not in doubt. The microblogging website is now among the 50 largest internet properties in the US according to new data from comScore covering August web traffic. Twitter took the N0. 46 place with an extraordinary audience of 20.8 million unique visitors. [...]

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Source: 24/7 Wall St. | 22 Sep 2009 | 4:07 am

Good bad or not too sure? What the bosses have to say on the EU

If it didn't exist would you invent it? Ask Britain's leading business figures what they get out of the European Union and few sum it up better than Sir Philip Green the Top Shop and BHS owner.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 22 Sep 2009 | 4:03 am

'Shoes not booze' selling online

UK online spending fell by 10% in August compared with July, a survey says, with alcohol sales down but footwear purchases up.
Source: BBC News | Business | World Edition | 22 Sep 2009 | 4:03 am

Jim Shepherd Announces $2,500 Cash Prize to Investors

SPOKANE, Wash., Sept. 22 /PRNewswire/ -- The Shepherd Investment Strategist announced in early September a Guess the DJIA (Dow Jones Industrial Average) contest, offering a...
Source: RSS feed - channel BNewsBusiness | 22 Sep 2009 | 4:00 am

Photos: TripAdvisor Toasts North America's Top 10 Wine Destinations

48% of Travelers Surveyed Plan to Visit a U.S. Vineyard This Year NEWTON, Mass., Sept. 22 /PRNewswire/ -- TripAdvisor(R), the world's most popular and largest travel...
Source: RSS feed - channel BNewsBusiness | 22 Sep 2009 | 4:00 am

Media Report: Studios hurt as DVD sales fall and rentals grow

If you’re buying fewer DVDs and renting more of them -- especially from automated Redbox kiosks -- you’ve got the Hollywood studios scared.

Source: MarketWatch.com - Top Stories | 22 Sep 2009 | 4:00 am

Experian's New Subscription Plan Enables Small-Business Professionals to Reduce Risk and Save Money

Business Credit Pro(SM) gives small businesses the freedom to research business backgrounds and credit scores at a low price COSTA MESA, Calif., Sept. 22 /PRNewswire/ --...
Source: RSS feed - channel BNewsBusiness | 22 Sep 2009 | 4:00 am

House sales 'stalled in August'

UK house sales fell in August from July, the first drop this year, according to HM Revenue & Customs.
Source: BBC News | Business | World Edition | 22 Sep 2009 | 3:59 am

US charges Obamafundraiser Hassan Nemazee for HSBC BoA Citigroup fraud

Hassan Nemazee a fundraiser for Barack Obama Hillary Clinton and other Democrats has been indicted for defrauding Bank of America HSBC and Citigroup out of more than 290m in loan proceeds US prosecutors said.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 22 Sep 2009 | 3:59 am

Stock futures signal gains; eyes on Fed (Reuters)

Reuters - Stock futures pointed to a higher opening on Wall Street on Tuesday, with futures for the S&P 500 up 0.7 percent, Dow Jones futures up 0.6 percent and Nasdaq 100 futures up 0.7 percent at 4:56 a.m. EDT.

Source: Yahoo! News: Stock Markets News | 22 Sep 2009 | 3:58 am

Stock futures signal gains; eyes on Fed (Reuters)

Source: Yahoo! News: Business | 22 Sep 2009 | 3:58 am

Stock futures signal gains; eyes on Fed

(Reuters) - Stock futures pointed to a higher opening on Wall Street on Tuesday, with futures for the S&P 500 up 0.7 percent, Dow Jones futures up 0.6 percent and Nasdaq 100 futures up 0.7 percent at 4:56 a.m. EDT.

Source: Reuters: Business News | 22 Sep 2009 | 3:58 am

Indications: U.S. stock futures return to winning ways

U.S. stock futures return to winning form Tuesday as the dollar retreats and some goew optimistic on an economic recovery.

Source: MarketWatch.com - Top Stories | 22 Sep 2009 | 3:57 am

Ford to announce 3rd China car plant: source

SHANGHAI (Reuters) - Ford Motor Co and its Chinese partner will announce plans on Friday for their third car manufacturing plant in China, where sales may soon outpace its existing capacity, an industry source said on Tuesday.

Source: Reuters: Business News | 22 Sep 2009 | 3:54 am

Cadbury leaves door open to higher Kraft bid

Cadbury's chief executive has admitted for the first time that a combination with Kraft would make "some strategic sense", even as the Dairy Milk-maker demanded a deadline for a formal offer from the giant US food group.

Source: Latest Business News from Times Online | 22 Sep 2009 | 3:54 am

Help on way for 1 million jobless

More than a million people could receive an additional 13 weeks of unemployment benefits under a bill the House is set to take up on Tuesday.
Source: Business and financial news - CNNMoney.com | 22 Sep 2009 | 3:51 am

World markets higher amid recovery optimism (AP)

AP - European stock markets followed Asia higher on Tuesday after the Asian Development Bank upgraded its growth forecasts for major economies like China and India and said the region is leading a global recovery.

Source: Yahoo! News: Stock Markets News | 22 Sep 2009 | 3:51 am

Asia Shrugs Off The Recession

China and other large economies in Asia are not just struggling to get out of the recession. They are racing away from it at light speed. The Asia Development Bank raised its GDP forecast for the region which included a prediction that China will expand at a rate of 8.2% in 2009. The ADB had formerly [...]

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Source: 24/7 Wall St. | 22 Sep 2009 | 3:50 am

Where to find the fattest paychecks

Maryland is the nation's top-earning state for the third year in a row, with a median household income of $70,545, according to a U.S. Census Bureau report released Monday.
Source: Business and financial news - CNNMoney.com | 22 Sep 2009 | 3:49 am

The risk of 'breaking the buck'

Question: I just heard that the federal government is no longer insuring money market accounts for their $1 per share value. Is that correct? --Terry, Las Vegas, Nevada
Source: Business and financial news - CNNMoney.com | 22 Sep 2009 | 3:44 am

UPDATE 2-Blackstone, Lion get binding Orangina bid

* Blackstone, Lion need to complete regulatory, legal steps
Source: RSS feed - channel BNewsBusiness | 22 Sep 2009 | 3:42 am

UPDATE 2-Blackstone, Lion get binding Orangina bid

* Blackstone, Lion need to complete regulatory, legal steps
Source: RSS feed - channel BNewsBusiness | 22 Sep 2009 | 3:42 am

News Corp shuts down 63-year-old Asian magazine

Rupert Murdoch's News Corp is to close its Hong Kong-based magazine, the Far Eastern Economic Review.
Source: BBC News | Business | World Edition | 22 Sep 2009 | 3:41 am

EU: The City holds its breath as Europe rewrites the rules

Sessions of the European Parliament's Economic and Monetary Affairs committee do not usually pull in the crowds but when members met earlier this month in the normally tranquil Room 1G3 of the parliament building in Brussels dozens of surplus spectators were turned away.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 22 Sep 2009 | 3:39 am

Oil back above $70 on dollar, weak demand weighs

LONDON (Reuters) - Oil rose above $70 a barrel on Tuesday, supported by a weaker dollar and recovering from a sharp fall the previous day, but bulging inventories and slow demand limited gains.

Source: Reuters: Business News | 22 Sep 2009 | 3:36 am

Training staffers to become leaders

When Jason Lutz graduated from college in 1995, he had big plans for Sneaker Villa, his parents' two-store sporting goods business in the suburbs of Reading, Pa. He persuaded them to open a third outpost, in Reading's gritty downtown, and stock it with hip-hop styles, not performance gear. In less than a year the downtown store had generated double the combined revenue of its sister stores.
Source: Business and financial news - CNNMoney.com | 22 Sep 2009 | 3:32 am

46.3 million Americans uninsured - Census

A new study from the government Tuesday showed a wide disparity in health care coverage across the United States.
Source: Business and financial news - CNNMoney.com | 22 Sep 2009 | 3:29 am

NZ dollar hits 13-month high

The New Zealand dollar surged to a 13-month high against the US dollar on Tuesday after the country's current account deficit came in better-than-expected and a surprise dividend jump from one of its major...
Source: RSS feed - channel BNPaperBusiness | 22 Sep 2009 | 3:29 am

Forecasts for Asian growth raised

The economies of China and India are set to grow by more than previously thought, the Asian Development Bank says.
Source: BBC News | Business | World Edition | 22 Sep 2009 | 3:27 am

RPT-UPDATE 2-Aurelian Oil says Romanian well disappoints

* Says Badenian sand objective was non-hydrocarbon bearing * Aurelian, Europa shares fall 29 pct (Adds comments from Europa)
Source: RSS feed - channel BNewsBusiness | 22 Sep 2009 | 3:21 am

The EU Meddling In US Tech Industry Grows

The EU regulators who combat monopolistic practices have never been kind to Microsoft (MSFT). They have hounded the world’s largest software company for years, accusing it of bundling its browser into its operating system and other actions that make it hard for the company’s competitors to get fair access to the market. Everything the regulators [...]

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Source: 24/7 Wall St. | 22 Sep 2009 | 3:17 am

Blue chips resume upward march

Rising commodity prices and a weakening dollar breathed new life into London shares this morning.

Source: Latest Business News from Times Online | 22 Sep 2009 | 3:15 am

Stocks set for rosy start

U.S. stock futures rose Tuesday, ahead of the start of the Federal Reserve's two-day policy meeting.
Source: Business and financial news - CNNMoney.com | 22 Sep 2009 | 3:11 am

EU court advocate backs Google over trademarks

Top adviser to the EU’s top court has backed the internet search group in a row over brand names in online advertising with luxury goods maker LVMH
Source: Financial Times - US homepage | 22 Sep 2009 | 3:04 am

EU court advocate backs Google over trademarks

LUXEMBOURG, Sept 22 An adviser to the European Union's top court backed Google on Tuesday in a row with luxury goods maker LVMH over Internet advertising, saying the Web search firm had not infringed...
Source: RSS feed - channel BNPaperBusiness | 22 Sep 2009 | 3:04 am

AIG (AIG), Never Give A Sucker An Even Break

“We think that the American taxpayer will be fully repaid” under the company’s plan”—Ed Liddy, AIG CEO, May 13, 2009 “At the end of the day, we believe we will be able to pay back the government and we hope we will be able to do something for our shareholders as well.”– CEO Robert Benmosche, August [...]

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Source: 24/7 Wall St. | 22 Sep 2009 | 3:00 am

EU court adviser backs Google on Net ads (Reuters)

Reuters - An adviser to the European Union's top court backed Google on Tuesday in a row with luxury goods maker LVMH over Internet advertising, saying the Web search firm had not infringed trade mark rights.
Source: Yahoo! News: Business | 22 Sep 2009 | 3:00 am

EU court adviser backs Google on Net ads

LUXEMBOURG (Reuters) - An adviser to the European Union's top court backed Google on Tuesday in a row with luxury goods maker LVMH over Internet advertising, saying the Web search firm had not infringed trade mark rights.

Source: Reuters: Business News | 22 Sep 2009 | 3:00 am

CanAlaska intercepts 40.4 metres of uranium mineralization in basement rocks at Fond Du Lac

VANCOUVER, Sept. 22 /PRNewswire-FirstCall/ - CanAlaska Uranium Ltd. (TSX.V - CVV) ("CanAlaska" or the "Company") is pleased to report assay results from its...
Source: RSS feed - channel BNewsBusiness | 22 Sep 2009 | 3:00 am

Jigsaw and Eloqua Partner to Meet Customer Demand

SAN MATEO, Calif., Sept. 22 /PRNewswire/ -- Jigsaw, a leading provider of business information and data services, and Eloqua, the category-defining marketing automation leader...
Source: RSS feed - channel BNewsBusiness | 22 Sep 2009 | 3:00 am

Book Time Away With AirTran Airways' New Sale Fares

- Start the Fall Right With Fares as Low as $39* - ORLANDO, Fla., Sept. 22 /PRNewswire-FirstCall/ -- AirTran Airways, a subsidiary of AirTran Holdings, Inc. (NYSE: AAI),...
Source: RSS feed - channel BNewsBusiness | 22 Sep 2009 | 3:00 am

UPDATE 1-EU court adviser backs Google over LVMH on Net ads

LUXEMBOURG, Sept 22 (Reuters) - An adviser to the European Union's top court backed Google on Tuesday in a row with luxury goods maker LVMH over Internet advertising, saying the Web search firm had not...
Source: RSS feed - channel BNewsBusiness | 22 Sep 2009 | 2:58 am

The right way to unretire

Tom Wogan loves working with his hands, especially building fishing rods and restoring World War II Army knives. So when he retired in June 2006 at age 60 from his $110,000-a-year job as a shift manager at the Florida City nuclear power plant near his home in Palmetto Bay, Fla., he looked forward to spending carefree days puttering around his garage working on his hobbies. With a retirement portfolio worth $1.1 million, Wogan thought he was all set.
Source: Business and financial news - CNNMoney.com | 22 Sep 2009 | 2:53 am

JD Sports in fashion as profits grow strongly

JD Sports Fashion, one of Britain’s three big sportswear retailers, is reaping the rewards of an increasing focus on fashion despite a drop-off in recent trading.

Source: Latest Business News from Times Online | 22 Sep 2009 | 2:51 am

With a fresh focus on design, laptops come of age

SAN FRANCISCO (Reuters) - Say goodbye to the "black brick" laptop. The era of the plain, dowdy PC is officially over.

Source: Reuters: Business News | 22 Sep 2009 | 2:47 am

Google wins support in keyword wrangle

Read full story for latest details.
Source: Business and financial news - CNNMoney.com | 22 Sep 2009 | 2:46 am

Venezuela to pay off $4.6bn debts

Venezuela will pay off more than $4.6bn in debts owed by its state-run oil producer, in an attempt to boost the industry.
Source: BBC News | Business | World Edition | 22 Sep 2009 | 2:40 am

London Markets: Oil companies, miners lead gains for U.K. market

U.K. stocks move higher Tuesday on strong gains from natural resources stocks.

Source: MarketWatch.com - Top Stories | 22 Sep 2009 | 2:40 am

Airlines plan 'to cut emissions'

The aviation industry is to pledge to reduce carbon dioxide emissions to half the 2005 levels by 2050.
Source: BBC News | Business | World Edition | 22 Sep 2009 | 2:37 am

Ofcom calls for new cash for regional news

Ofcom today warned that the cost to ITV broadcasters of providing regional news would make their businesses unsustainable by 2012 and backed a government plan to allow consortiums of television and newspaper groups to bid to provide local services.

Source: Latest Business News from Times Online | 22 Sep 2009 | 2:37 am

Peston's picks

The market price of cutting airline emissions
Source: BBC News | Business | World Edition | 22 Sep 2009 | 2:18 am

ITV 'needs more funding' for news

The cost of the licences that allow ITV to broadcast regional news in the UK will outweigh the benefits by 2012, Ofcom says.
Source: BBC News | Business | World Edition | 22 Sep 2009 | 2:17 am

Builders fined 130m for bid-rigging

The Office of Fair Trading on Tuesday fined more than 100 construction companies a total of 129.5m for rigging bids for building work between 2000 and 2006.However, in a departure from normal practice,...
Source: RSS feed - channel BNPaperBusiness | 22 Sep 2009 | 2:08 am

Help at hand for firsttime buyers

If you can't afford the whole property buy a share of it. We explain the various schemes on offer.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 22 Sep 2009 | 2:06 am

Media Digest 9/22/2009 Reuters, WSJ, NYTimes, FT, Bloomberg

Reuters: Obama pushed his economic message before the G20 summit Reuters: A Senate panel took up healthcare legislation. Reuters: Bank of America (BAC) missed a deadline for supplying information from Congress and now faces another threat from the SEC. Reuters: Proposed net neutrality rules for wireless systems drew criticism from carriers. Reuters: The FDIC may tap US banks to [...]

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Source: 24/7 Wall St. | 22 Sep 2009 | 2:01 am

Resource stocks help London shares strengthen

London's equities market resumed its upward path on Tuesday, with financial and resource stocks back in demand after Monday's losing session broke a six-day winning streak. The FTSE 100 started the session...
Source: RSS feed - channel BNPaperBusiness | 22 Sep 2009 | 1:54 am

Europe Markets: Europe stocks recover lost ground; Carnival rises

Stocks in Europe recover much of what they lost in the prior session as traders await news from the U.S. Federal Reserve.

Source: MarketWatch.com - Top Stories | 22 Sep 2009 | 1:53 am

Gordon Brown says global Tobin tax to curb banks' risky behaviour is 'worth a look'

Gordon Brown the British prime minister said the introduction of a global tax to reduce risky behaviour by banks was "worth looking at" as he prepared for this week G20 summit.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 22 Sep 2009 | 1:40 am

London stocks rise (AFP)

AFP - Stocks in London were bolstered at the start of trade on Tuesday as investors appeared more optimistic about the health of the global economy.

Source: Yahoo! News: Stock Markets News | 22 Sep 2009 | 1:36 am

Rio Tinto asset disposals reach $7bn

Rio Tinto on Tuesday said the value of agreed asset disposals in the past 18 months had risen to $7bn, following the sale of Alcan Composites, its maker of specialist composite materials, for $349m.The...
Source: RSS feed - channel BNPaperBusiness | 22 Sep 2009 | 1:30 am

Asia Markets And Europe Open 9/22/2009

Markets in Asia were mixed. The Hang Seng rose .3% to 21,546. Sinopec (SNP) rose. The Shanghai Composite was down 2.3% to 2,898. At the open in Europe, the FTSE rose .6% to 5,164. Rio Tinto (RTP) was up sharply. The Dax was up .7% to 5,708. The CAC 40 moved higher by .6% to 3,837. Data from Reuters [...]

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Source: 24/7 Wall St. | 22 Sep 2009 | 1:27 am

Asia poised to lead global recovery

Asia is set to lead the world out of the global financial crisis in spite of the slow recovery in the US and Europe, according to the Asian Development Bank
Source: Financial Times - US homepage | 22 Sep 2009 | 1:27 am

Cadbury tries to force Kraft’s hand

The UK confectioner is understood to be concerned about the uncertainty that the US group’s interest has created among its employees and customers
Source: Financial Times - US homepage | 22 Sep 2009 | 1:26 am

Cadbury tries to force Kraft's hand

Cadbury has approached the UK Takeover Panel to ask Kraft to "put up or shut up" on the unsolicited 10.2bn takeover approach from the US food group unveiled three weeks ago.Cadbury approached the panel...
Source: RSS feed - channel BNPaperBusiness | 22 Sep 2009 | 1:26 am

Aussie stocks close slightly down

SYDNEY - The Australian share market closed moderately lower on Tuesday led by the materials sector and as investors acted cautiously.The benchmark S&P/ASX200 index was down 13.7 points, or 0.29 per cent, to 4663.7 points, while...
Source: nzherald.co.nz - Business | 22 Sep 2009 | 1:22 am

UK building firms fined £129.5m

Some of the UK's leading building companies are handed big fines by the Office of Fair Trading for rigging bids for contracts.
Source: BBC News | Business | World Edition | 22 Sep 2009 | 1:08 am

SEC to take Bank of America to trial over Merrill Lynch bonuses

Individual executives could also face charges. Judge Jed Rakoff, in his blistering rejection of a proposed settlement last week, raised the possibility.

The Securities and Exchange Commission said Monday that it would go to trial against Bank of America Corp. over bonuses at Merrill Lynch, opening the possibility of also bringing charges against bank executives, a week after a judge's stinging rejection of a $33-million settlement of the case.

Source: L.A. Times - Business | 22 Sep 2009 | 1:00 am

Internet 'net neutrality' is endorsed by FCC chief

FCC Chairman Julius Genachowski proposes formalizing rules and adding mandates that he says would keep online traffic moving freely. The proposals would also cover wireless Internet service.

New rules proposed by the nation's chief communications regulator to ensure unfettered access to the Internet would level the online playing field as more people surf the Web on mobile devices, but the plan has wireless carriers in an uproar.

Source: L.A. Times - Business | 22 Sep 2009 | 1:00 am

California gets some relief at the gasoline pump

The average price for a gallon of regular in the state falls 1.3 cents to $3.14. The national average drops 2.5 cents to $2.552. Some analysts see crude plummeting to $35 a barrel before the end of the year.

The worst may be over for a while for California motorists as average gasoline prices declined for the second time in the last eight weeks, the Energy Department said Monday. That came on a day in which retail gasoline prices fell nationally for the sixth straight week and analysts predicted that oil could plummet to $35 a barrel before the end of the year.

Source: L.A. Times - Business | 22 Sep 2009 | 1:00 am

Filmmaking incentives losing glamour in cash-strapped states

Will investors show an appetite for local food?

Green venture capitalists are sought to back organic growers, independent food merchants, farmers markets and restaurateurs

The Let's Be Frank food trailer parked most days outside the old Helms Bakery complex in Culver City is no ordinary lunch wagon.

Source: L.A. Times - Business | 22 Sep 2009 | 1:00 am

SEC to take Bank of America to trial over Merrill Lynch bonuses

Individual executives could also face charges. Judge Jed Rakoff, in his blistering rejection of a proposed settlement last week, raised the possibility. ...
Source: RSS feed - channel BNPaperBusiness | 22 Sep 2009 | 1:00 am

Disney CEO Bob Iger weighs replacements for studio chief Dick Cook

One executive that's a subject of speculation is Disney Channel President Rich Ross. Another John Lasseter, chief creative officer for Pixar and Disney Animation Studios.

Walt Disney Co. Chief Executive Bob Iger must act quickly to replace studio head Dick Cook to avoid further destabilizing the Burbank-based movie operation.

Source: L.A. Times - Business | 22 Sep 2009 | 1:00 am

ABC to cut commercial time for premieres of new TV series

The Disney-owned network will skip the typical first ad slot for comedies and dramas, hoping to keep viewers tuned in. Story lines will be a bit longer.

With eight comedies and dramas premiering this fall -- seven of them in the next few weeks -- Walt Disney Co.'s ABC is making the unusual move of reducing the number of commercials in the premiere episodes of its new shows.

Source: L.A. Times - Business | 22 Sep 2009 | 1:00 am

Tesla Motors co-founders settle lawsuit

The electric car maker's chief executive, Elon Musk, and former CEO Martin Eberhard end their feud. Details of the agreement are not disclosed.

Good news, alternative vehicle fans. The Hatfields and McCoys of the electric propulsion world have settled their feud over who can be called a founder of the company.

Source: L.A. Times - Business | 22 Sep 2009 | 1:00 am

Breast cancer ads use lechery for good

October is Breast Cancer Awareness Month, and a new crop of public service announcements leverage male lechery to an astonishing degree. The latest and greatest is a spot called "Save the Boobs," from the Rethink Breast Cancer charity, in which a voluptuous young woman in a white bikini walks into a pool party scene. Strip-club music kicks in and the camera slow-mo's her fleshy assets while the partygoers attempt to pick their jaws up off the ground. No discreet, quick-cut editing here. The camera stares, unblinking, unashamed, at the woman's figure.

Source: L.A. Times - Business | 22 Sep 2009 | 1:00 am

California gets some relief at the gasoline pump

Immigrant population in California declines

Survey data point to a dramatic shift in the nation and show the recession's effect on foreign-born residents.

More than three decades of rapid growth in the country's foreign-born population came to a halt last year, census data show, as surging unemployment made the U.S. economy less attractive to outsiders.

Source: L.A. Times - Business | 22 Sep 2009 | 1:00 am

Breast cancer ads use lechery for good

Filmmaking incentives losing glamour in cash-strapped states

More than 40 states offer tax breaks for movie and TV production, drawing business away from Southern California. But in the face of budget crises, several states are having second thoughts.

In a Troy office building where advertising executives once courted Motor City automakers, film production workers discuss which stretch of downtown Detroit would offer the best sense of urban decay. Down the hall, in a warehouse that has been converted to a makeshift studio, dozens of prop builders are fashioning blocks of foam and stacks of plywood to build a set for a rocky mine shaft.

Source: L.A. Times - Business | 22 Sep 2009 | 1:00 am

EU probe ‘costing Sun $100m a month’

Oracle’s chief executive says regulator scrutiny of his company’s acquisition plan for the hardware supplier is proving costly, though he is confident the deal will be approved
Source: Financial Times - US homepage | 22 Sep 2009 | 12:53 am

China's sovereign wealth fund takes 15% of Noble

Sovereign wealth fund China Investment Corp.pays $850 million for a 15% stake in Singapore-listed commodity logistics company Noble Group.

Source: MarketWatch.com - Top Stories | 22 Sep 2009 | 12:53 am

OFT fines 103 construction firms £129.5m for bid rigging

The watchdog found the companies rigged bids on building projects worth £200m across England including schools universities and hospitals.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 22 Sep 2009 | 12:41 am

Fonterra news fails to lift market

New Zealand shares were little changed today as positive news about a higher Fonterra payout was countered by a rise in the NZ dollar.Asian stock markets were also little changed as investors focused on weak commodity markets...
Source: nzherald.co.nz - Business | 22 Sep 2009 | 12:33 am

OFT fines construction sector £129m for bid-rigging

The Office of Fair Trading (OFT) today fined the construction industry £129.5 million after an investigation into bid-rigging between companies tendering for public sector building contracts.

Source: Latest Business News from Times Online | 22 Sep 2009 | 12:33 am

China may swing to trade deficit by next year

China will begin posting current-account and trade deficits much faster than many expect, and this could be very bad news for Treasurys, a top economist says.

Source: MarketWatch.com - Top Stories | 22 Sep 2009 | 12:16 am

NZ Super claws back recession losses

The New Zealand Superannuation Fund has clawed its assets back to the level they were before the recession hit.The fund began being hit by falling returns from investments at the beginning of 2008 and took some serious hits as...
Source: nzherald.co.nz - Business | 21 Sep 2009 | 11:26 pm

Pound slides again as markets enter Bank of Englandfuelled 'bubble' stage

The pound slid closer to parity with the euro on Monday as a top London hedge fund managers warned stock markets are in a statefuelled bubble.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 21 Sep 2009 | 11:26 pm

Kiwi dollar rises sharply on dairy payout lift

The New Zealand dollar rose sharply today on news of a raised Fonterra payout , which will be a boost for the economy as well as for dairy farmers.
Source: nzherald.co.nz - Business | 21 Sep 2009 | 11:24 pm

Irwin Kellner: Ben Bernanke aside, recession continues

The fact that the economy apparently stopped contracting in the third quarter is no reason to think that the recession has ended.

Source: MarketWatch.com - Top Stories | 21 Sep 2009 | 11:24 pm

Cadbury asks Panel to impose deadline for Kraft bid

Cadbury chairman Roger Carr has asked the Takeover Panel to impose a "put up or shut up" bid deadline on rival food group Kraft.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 21 Sep 2009 | 11:13 pm

GE CEO to test new management model in India

BOSTON (Reuters) - General Electric Co plans to test a new management model in India that the largest U.S. conglomerate believes will help it flourish through a long period of sluggish post-recession growth in developed markets.

Source: Reuters: Business News | 21 Sep 2009 | 10:57 pm

Commerce Commission to pay costs to Telecom

The Commerce Commission has to pay $52,089 in costs and disbursements for a case it lost in the Court of Appeal against Telecom.The Court of Appeal released its decision on costs today relating to a judgment on August 4.The...
Source: nzherald.co.nz - Business | 21 Sep 2009 | 10:36 pm

Fonterra lifts dairy payout - $55K extra for its farmers

The average dairy farmer stands to make an extra $55,000 on the back of the increased pay-out from dairy giant Fonterra.Federated Farmers dairy chairman Lachlan McKenzie said the extra $55,000 gross makes up for the $53,000 loss...
Source: nzherald.co.nz - Business | 21 Sep 2009 | 10:30 pm

FDIC may tap U.S. banks for funds: report

(Reuters) - The Federal Deposit Insurance Corp may ask healthy U.S. banks to lend billions of dollars to restore the health of the depleted fund that safeguards bank deposits, the New York Times reported, citing senior regulators.

Source: Reuters: Business News | 21 Sep 2009 | 10:22 pm

FDIC may tap U.S. banks for funds: report (Reuters)

Reuters - The Federal Deposit Insurance Corp may ask healthy U.S. banks to lend billions of dollars to restore the health of the depleted fund that safeguards bank deposits, the New York Times reported, citing senior regulators.

Source: Yahoo! News: Business | 21 Sep 2009 | 10:22 pm

Mark Hulbert: Corporate insiders selling at faster pace

Corporate insiders are selling a whole lot more of their companies' stock than they are buying, even more than the breakneck pace of sales seen two months ago.

Source: MarketWatch.com - Top Stories | 21 Sep 2009 | 10:08 pm

BofA to face SEC trial, exits loss-sharing deal (AP)

AP - Bank of America Corp. now faces a trial with the Securities and Exchange Commission over billions in bonuses paid at Merrill Lynch, after a judge threw out the bank's $33 million settlement and rebuked the agency for not pursuing charges against executives.

Source: Yahoo! News: Stock Markets News | 21 Sep 2009 | 10:05 pm

Paul B. Farrell: Slasher film: 'Reaganomics: A Love Story'

Oh, so you thought Reaganomics was dead? Killed off by the GOP’s historic election losses last November? After 28 years in power? How silly.

Source: MarketWatch.com - Top Stories | 21 Sep 2009 | 10:01 pm

Public pensioners have taxpayers as a backstop

When it comes to retirement security, it pays to have something that is good enough for government work.

Source: MarketWatch.com - Top Stories | 21 Sep 2009 | 10:01 pm

Kiwi dollar jumps as current account deficit shrinks

New Zealand's current account deficit shrank markedly in the June quarter, as foreign-owned banks saw their profits dwindle, Statistics New Zealand reported today.For the year ended June the current account deficit was $10.6 billion,...
Source: nzherald.co.nz - Business | 21 Sep 2009 | 10:00 pm

4 Services That Get a "No" From Health-Care Plans

Each year, insurers refuse to pay at least $50 billion worth of medical bills. Some areas where disputes often arise:

Home nursing

Nursing care for disabled patients is a frequent bone of contention, since a full-time home nurse costs at least $73,000 a year, according to a survey by MetLife. But doing without can be costly, too. “Parents can push food through a feeding tube,” argues Beth Dworetzky, of the Federation for Children with Special Needs, but “they might not realize when there’s an infection.”

Medical equipment

Many insurance policies cap the amount of money that can be spent each year per person on medical equipment like wheelchairs, canes and ventilation machines. Other companies might pay for, say, a $20,000 wheelchair but refuse to pay for spare parts, batteries or maintenance. “Pretty insane,” says Karen Mariner, of the National Multiple Sclerosis Society.

Prescription drugs

Insurers balk at “off-label” prescriptions that use drugs in ways not approved by the Food and Drug Administration. Some breast-cancer patients taking tumor-slowing drug Avastin, for instance, had to pay as much as $85,000 annually for the medication before it gained approval for their disease last year; those with rare, less-studied conditions face the issue often.

Rehabilitative therapy

Insurers and patients frequently tussle over appropriate care after injury or stroke. But the fiercest debates center on services for someone who never had certain skills or won’t fully recover them—like developmentally delayed children or patients with degenerative conditions like Huntington’s disease. Stays in some inpatient facilities can top $15,000 per stint.

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Source: SmartMoney.com | 21 Sep 2009 | 10:00 pm

Your Health Plan: How to Fight Back

More consumers seem to be getting fed up with their health plans’ coverage decisions—the rate at which they appealed insurers’ rejections rose by 34 percent between 2000 and 2006, the most recent year tracked. Here are some of the strategies patients can pursue:

Pen a dense letter

Patients who write insurers to appeal are more likely to succeed if they pack the letter with references to medical research. Some advocacy groups like the Pulmonary Hypertension Association offer helpful letter templates for common denials.

Get a second opinion

An extra, concurring opinion adds heft to the patient’s argument, experts say. Prestige matters: Philadelphia attorney Mark Gallant says he had success overturning a friend’s optical-scan denial when he recruited a top doctor in the field to speak on the friend’s behalf.

Stay collected

When appeals reach a second round, the aggrieved often get to talk on the phone or meet in person with a medical director. But the conferences can last as little as 10 to 15 minutes. And “yelling and screaming,” says Karen Mariner of the National Multiple Sclerosis Society, “just eats up time.”

Look for holes

Larry Gelb, CEO of the advocacy firm CareCounsel, says many employers still have outdated or poorly written contracts with insurers, which can “open doors” in appeals. Copies of the contracts should be available in an employer’s benefits office.

Source: SmartMoney.com | 21 Sep 2009 | 10:00 pm

An Interview With Vitaliy N. Katsenelson

VITALIY N. KATSENELSON SPENT HIS YOUTH in Murmansk, a city in northwest Russia perhaps best known to Westerners as a setting for The Hunt for Red October.

The Russian navy was a popular career track there. But Katsenelson, now 36, emigrated to the U.S. with his family in 1991, when he was 18. He took a keen interest in finance, earning undergraduate and graduate degrees at the University of Colorado/Denver. Since 1997, he has worked at Investment Management Associates, a Denver money manager with assets of about $60 million.

Katsenelson employs his active-value, or "buy-and-sell," style in overseeing equity portfolios there: He'll happily put money in cash when there aren't enough compelling stocks around. Today, he maintains, the market is range-bound, meaning price/earnings ratios are under attack.

In 2007, Katsenelson published Active Value Investing, a book that outlines his framework for portfolio management and stock-picking. From Dec. 31, 2005, through June 30 of this year, his value strategy has earned an average annual total return of 0.64%, versus a 6.39% decline for the Standard & Poor's 500. Barron's spoke with him last week by phone.

Barron's: Your book stresses the importance of understanding range-bound markets. Why is this critical for investors?

Katsenelson: Over the last 100 years, every time we had a secular bull market it lasted 16, 17 years. But the markets that followed were not bear markets; they were range-bound markets. The only exception was the Great Depression. It is a very important distinction, because you should invest differently in a bear market than you would in a range-bound market. In any range-bound market, you have high starting valuations, which are a byproduct of the secular bull market. If earnings growth becomes negative and stays negative for a long time, you have a bear market. A great example of that is Japan, which has had high valuations and contracting earnings for a long time.

Would an example of a range-bound market be what occurred in the U.S. from 1966 to 1982?

Yes, that's right. The current range-bound market started in the early 2000s. There are two forces working against each other: growing earnings and contracting P/E multiples. The whole idea behind a range-bound market is that P/Es need to get deflated over time.

Range-bound markets are not caused by horrible earnings growth; in fact, earnings growth during range-bound markets is not much different from bull markets. A lot of times people refer to the average P/E as being 15 times earnings, which is true, but markets spend very little time at the average. The average P/E historically has run from above average to below average. It never stopped at the average. It goes from one extreme to the other.

Do you look at the market's rally since March of this year in the context of a range-bound market?

I do. A range-bound market basically goes nowhere for a long time, although it has a lot of cyclical volatility. During the 1966-to-1982 range-bound market, there were five little bull markets and five little bear markets. So the question is, "Where is it today?"

You really need to figure out what the earnings power of the S&P 500 is, but that gets a little tricky. If you look at the 2010 operating-earnings estimate for the S&P 500, it's about $73 a share. But reported-earnings estimates are $46 a share, so there is a big difference.

Why the big discrepancy?

Writeoffs. The true earnings power of the S&P 500 is probably somewhere in the middle. I'm very suspicious of the $73-a-share estimate -- because in 2007, when we had a perfect storm of three or four different bubbles colliding and profit margins at all-time highs, earnings were about $85 a share. I just don't see how, after all that has happened, you could get to $12 below the all-time high for earnings three years later. If you say next year's earnings of the S&P 500 are $50 to $60 a share, the index is trading at 18 to 21 times.

Which is not that cheap.

No, it's not. We are in the middle of a range-bound market that could last 10 years.

Give us an example of how this type of market impacts an individual stock.

Wal-Mart [WMT] is a perfect example. In 2000 it was trading at 45 times earnings, and it earned $1.25 a share. Fast-forward to today, and its earnings have more or less tripled. They grew about 12% a year. At the same time, its P/E contracted from 45 times to about 14 times.

Wal-Mart's stock is back at the same level it was in 2000, despite earnings having almost tripled, because its P/E contracted at a very similar rate. In today's environment, investors should favor absolute-valuation tools, like discounted-cash-flow analysis or breakup analysis, as opposed to relative-valuation analysis -- i.e., Wal-Mart is cheap at a P/E of 14, because it used to trade at 45. Relative valuation is a backward-looking tool, and anchors on valuations that we'll not see again for a long time. That will lead investors into a relative-valuation trap, and lead to overpaying for stocks.

Talk about how margins helped stocks appreciate, and how that has changed.

When profit margins were at all-time highs in 2007, they were for the most part driven by incredibly high margins in two types of stocks -- the financials and what I call the "stuff" stocks. Those include the industrial stocks, the commodities and energy.

Interestingly, the earnings for those companies were still expanding, even though the U.S. economy was already in a recession. And although our economy was slowing down, the global economy, especially China, was driving the bulk of the growth.

The "stuff" stocks, especially, have some common characteristics. They are consumer-cyclical, they have very high operating leverage, and, for the most part, they are considered lower-quality stocks, partly because they are very cyclical and have high operating leverage. The operating leverage works both ways. When the global economy is expanding and earnings are growing, their costs grow more slowly than their revenue. Therefore, margins compound dramatically.

But the problem is that operating leverage works in the other direction, too. When the sales collapse, they can't cut their costs fast enough. This is extremely important for a couple of reasons. No. 1, unless you think the global economy will be growing at the rate it grew in the past, the demand for the goods those companies produce will be lower going forward. No. 2, whatever earnings those companies had in 2007, they are not going to see them again for a long time. If you apply it to the macro level, the earnings for the S&P 500 are not going to get to $85 a share for a long time.

Why do you think that being in stocks is not superior to being in bonds or cash?

In 1982, if you took a monkey and gave it some darts to throw at a Barron's stock table to create a portfolio, it is likely that portfolio would do better than fixed-income instruments over the span of the secular bull market. That's because the performance of stocks versus bonds and Treasury bills is so much greater during a secular bull market, as was the case from 1982 to 2000. During range-bound markets, the broad market does not necessarily do that much better than T-bills or bonds. So being in stocks is not as important as being in the right stocks. The stock selection matters significantly. And the opportunity cost of being in cash is a lot lower. But I don't think most mutual funds are naturally equipped to invest in today's environment.

Why not?

Because of their mandates to be fully invested all the time. So in an environment where you have to be extremely selective in what you own, it is important not just what you own, but what you don't own. And if you have to be fully invested all the time, you end up owning marginal stocks.

Why do you think the buy-and-hold strategy doesn't work in this kind of a market?

First of all, you can mathematically explain the change in stock prices for two reasons: Either earnings are growing, or P/E multiples are expanding or contracting. During secular bull markets, you buy stocks and their P/Es are expanding, and they usually expand to an above-the-average P/E. That teaches investors to buy but never sell stocks, because when [stocks] approached their fair value and investors sold them, they lost a lot of money. That's because P/Es go to above-average levels in a secular bull market, driven by investor psychology.

What happens in range-bound markets?

As P/Es compress, they go from being your friend to your enemy. Therefore, if you just buy stocks and hold them, unless you found the next Microsoft that can grow earnings 30% a year for the next 40 years and offset any P/E compression, you want to be a buy-and-sell investor. Buy and hold became a religion; it almost became buy and forget to sell. Instead, you have to buy stocks when they are undervalued. When they become fairly valued, you sell them, and you put the proceeds in cash, and you look for other stocks that meet your criteria.

Is the average retail investor equipped to do that?

Retail investors can do that, but they need to modify their investment process.

But with a buy-and-sell strategy, aren't your transaction costs much higher?

I'm not talking about day-trading. Say I bought a stock and I was looking for a 50% return and it appreciated to its fair value -- which I define as what I think a company is worth. It may happen in a year, it may happen in five days, though it's never happened to me in five days.

So instead of holding on to the stock hoping for something to happen when it's becoming overvalued, I say don't hope for that. You should sell it when you think it's fairly valued. Your transaction costs will go up, but so should your returns. I do hold stocks for years, in many cases, but I'm against just holding for the sake of holding.

If you look at the market and can't find enough stocks that meet your criteria, then you are going to have more cash. You are not timing the market, which is extremely difficult to do consistently.

You devote some of your book to the importance of finding a margin of safety in a stock. Could you elaborate?

You want to increase your margin of safety because, especially in this environment, you are facing two enemies: P/E compression and trying to figure out what the earnings power of a company is. A lot of the earnings we saw in 2006 and 2007 were inflated by macro events, such as excess liquidity. So you want to make sure if you buy a stock and you overestimate what the earnings power is, you won't get hurt very much. And you should favor stocks that pay higher dividends because the bulk of returns during range-bound markets comes from dividend-paying stocks. And you should start looking at markets outside the U.S.

In figuring out a margin of safety for a stock, are you looking at how far the price could drop?

That's right. You want the margin of safety to become a part of the return. If I think a company is worth $100 and I can buy it at $50, whatever kind of normalization there is towards fair value becomes a good source of the return. But if things don't go as well, the stock is cheap enough that it's not going to hurt me. That's why margin of safety is really important.

Another point you make in your book is the importance of finding hidden risk in a company, admittedly not an easy task. How do you go about doing that?

When you look at performance of a company or a manager, for that matter, you only see one reality. You only see one chain of events. You don't really know how much risk was taken to achieve the return.

Lehman Brothers was a great stock until it became a horrible stock. If a money manager owned Lehman for a long period of time, he made money. But the manager was taking a lot of risk, because Lehman used a lot of leverage. So when you look at a company, look at past performance and ask yourself, "If the environment was slightly different, what would have been the outcome?" In other words, don't just focus on the result. You want to look at how the result was achieved.

Let's move on and talk about a couple of stocks you find interesting.

Vodafone [VOD] is one of the largest global telecom companies. It's big in Europe, and it's fairly large in emerging markets. What attracted me to the stock is that it owns 45% of Verizon Wireless, which is a part of Verizon Communications [VZ].

What's interesting is that Verizon Wireless generally has a lot of free cash flow, but it hasn't distributed that free cash flow to Vodafone for a couple of years. The reason for that is that, in the past, Verizon Wireless was growing at a very fast rate, and upgrading its network. Last year it bought Alltel, and incurred $20 billion of additional debt. The company has decided to pay off about $10 billion of debt a year. Therefore, Vodafone was not receiving any cash flows from Verizon Wireless.

At the same time, we estimate the Verizon Wireless stake is worth around $50 billion to $55 billion. If you take the value of Verizon Wireless out of Vodafone, you are basically buying the other cash-generating businesses at about seven times free cash flow. That is incredibly cheap. You also have that 6%-plus dividend yield, and when the global economy starts to recover and emerging markets start to grow again, Vodafone's cash flows will start growing again as well.

Vodafone's stock has bounced around in the past year, although it's flat year to year. What caused that?

In the last year, a lot of its business has come from Central Europe and emerging markets. In those markets, people consume telecom services differently. Instead of having a fixed, monthly phone-payment plan like we have in Unites States or Europe, they buy minutes in bulk, buying a couple of hundred minutes at a time.

When the global economy starts to contract, the demand for minutes declines dramatically -- I think it is down 6%, 7% in emerging markets. Those markets were a lot more cyclical. However, when the global economy starts to recover, the demand for telecom service in emerging markets goes up again, and Vodafone's cash flows will rebound.

What else looks interesting?

Carefusion [CFN] is a provider of medical technology and services to hospitals. It was recently spun off from Cardinal Health [CAH], a drug distributor. It was not a good fit with its former parent. It accounted for about 4% of Cardinal Health's revenues and more than 30% of its operating income. Carefusion is a classic spin-off: It was undermanaged and underinvested. Cardinal's distribution business operates with razor-thin margins. It focuses on being very efficient. Carefusion is basically a technology company. So it's a very different business.

In the right hands -- and properly incentivized and managed, which it is -- this company could have much higher margins. Cardinal retained a 20% share in the company, so it has an incentive for Carefusion to succeed. As a result, it did not saddle the company with a huge amount of debt. It's currently about $1.4 billion, versus $640 million of cash. It operates in a difficult space, because hospitals are under pressure in this economic downturn. But at the same, its products help to make hospitals more efficient. Also, since Carefusion leases its machines to hospitals, a nice component of revenues is recurring. Competitors' net margins range from 12% to 18%, so Carefusion could get to the middle of that range.

You have been skeptical about China's growth, and about investing in China. Are you still?

Yes. In the past six months, to achieve growth at any cost, the Chinese government injected an incredible amount of money into the economy, and made existing problems worse. The Chinese economy was geared for much higher growth in the rest of the world, but global economic growth will be lower going forward. Meanwhile, China has very high operational and financial leverage.

Thanks, Vitaliy.

Source: SmartMoney.com | 21 Sep 2009 | 10:00 pm

6 Credit-Card Traps to Avoid Now (Common Sense)

In many ways, the economy has been as tough on credit-card issuers as it has been on their debt-ridden customers.

Charge-offs and delinquencies are rising as unemployed credit-card holders are falling behind on their payments. Interchange revenues are declining, as suddenly-frugal consumers are opting to leave their cards at home and pay with cash. And a new credit-card law is reining in practices, like charging over-limit fees and retroactive rate increases, which used to bring in reliable cash for the industry.

“Not only is a card issuer now somewhat hamstrung about the pricing they can apply to an account, but even good accounts are underperforming because everyone has a recession psychology,” says David Robertson, owner of The Nilson Report, which tracks credit-card industry trends.

Yet, the industry may recover sooner than many of its customers. Recently, Citigroup (C) analyst Donald Fandetti upgraded Capital One (COF) and MasterCard's (MA) stocks from Hold to Buy, citing the stabilization of the U.S. and global economies. “Though management has been cautious about the credit outlook, we believe the worst is behind the company in terms of credit card charge-offs,” he wrote in a Sept. 9 research note on Capital One.

With the recession “likely over,” as Federal Reserve Chairman Ben Bernanke said last week, banks now can focus on repositioning their credit-card portfolios for growth, albeit at a slower pace than they’ve seen after past recessions. They’ll face tougher regulations -- and that’s not necessarily good news for consumers.

“[Banks] are, of course, looking to make money on their cards so it’s reasonable for them to adjust to the new regulatory environment,” says David Ely, professor of finance at San Diego State University. “You’d expect them to seek ways to make these cards profitable.”

Here are six strategies that credit-card issuers are using to lift their bottom lines:

1. Higher rates for everyone

Unable to increase interest rates on past purchases under the new credit-card laws, card issuers warned that they may have to start charging higher interest rates across the board.

Cue in the latest card from Bank of America (BAC). The BankAmericard Basic Visa card, launched last week, boasts “simplified rates and terms,” including charging the same interest rate for purchases, cash advances and balance transfers. But its annual-percentage rate -- a variable pegged to the prime rate plus 14% -- is currently 17.25%. “That’s considerably higher than the 9.99%-plus-prime that issuers like Bank of America, Citi and Chase used to charge,” says Robert McKinley, the founder of CardWeb.com, which provides industry research and analysis. So unless you’re among the 10% or so of card holders trapped paying off an expensive cash advance or balance-transfer offer, you’ll end up paying a lot more interest with this card, McKinley says.

Bank of America spokeswoman Betty Reiss says the Basic card is for consumers looking for greater simplicity and predictability in their financial products, and that the rate will not change over the life of the account, except if the prime rate moves up or down.

2. Moving from fixed to variable rates

Just three years ago, more than 80% of all credit cards charged a fixed interest rate. Now, 80% to 85% of credit cards carry a variable rate: a shift that means most card holders will see their rates go up as the prime rate starts increasing, McKinley says.

Making the switch “was a real stampede,” says Linda Sherry, a spokeswoman for consumer advocacy group Consumer Action, which publishes a comprehensive annual study on credit-card trends. The majority of issuers switched over the past 12 months and many did just weeks before a provision of the new credit-card law that requires 45-day notice of any change of terms went into effect, Sherry says. (Click here to read more on rate-formula swaps.)

3. Annual fees

The new credit-card law may have lead banks to reconsider over-limit fees, as exceeding one’s limit will soon become an opt-in feature – but they’re reintroducing others. “The model is moving toward what was popular in the 1980s: higher interest rates and annual fees,” says Dennis Moroney, a senior analyst for financial-services research firm TowerGroup.

Offers for fee-based credit cards mailed to consumers rose significantly during the first quarter of this year to 27% of all offers, up from 18% a year ago, according to Synovate Mail Monitor, which tracks credit-card mailings.

4. Usage fees

An annual fee can be a big turn-off for consumers. To avoid user backlash, some issuers will get creative with how they charge usage fees. One possibility: tying fees to card usage. “The issuers may try to incent you to become profitable and if you don’t, they may introduce a fee,” Robertson says. In other words, you may be required to exceed a certain spending threshold to avoid an extra charge. That’s a lose-lose situation for anyone carrying a balance: upping your card usage will cost you more in interest payments, while keeping it low will cost you an annual (or monthly) fee.

5. More junk mail

It’s no secret that card issuers have cut back on new-card offers. But if you’re a customer of good means and credit, chances are those envelopes will keep coming. As card issuers seek ways to become profitable, they’re focusing on their best and most affluent customers. JP Morgan Chase (JPM), for example, recently launched Chase Sapphire, a rewards card designed specifically for affluent consumers and has been mailing 0% APR balance-transfer offers in an effort to grab market share from its competitors.

“We might be seeing a fundamental shift in which banks will approach managing the relationship with the customer and it will be on a household basis rather than a product basis,” Moroney says. “What’s the risk of the household? What are the other products we may sell them?”

6. Reward hoops

Rewards programs are expensive to run, yet they are so popular with consumers that getting rid of a program could create a public disaster for any issuer. Some are getting around the problem by introducing surreptitious changes, such as fees for redeeming rewards, making rewards more expensive, or shortening their shelf life. “Think about what the airlines did with the frequent-flier programs,” Moroney says. “They’ve created more challenges for getting free flights.” Read about some of the latest rewards programs’ cutbacks here.

Source: SmartMoney.com | 21 Sep 2009 | 10:00 pm

More Time for Tax Cheats (The Tax Guy)

The IRS has been in hot pursuit of tax cheats who have been hiding money in unreported offshore accounts.

With these accounts, taxes can be evaded in two ways. First, cash from income that’s never been reported on tax returns can be stashed where the IRS won’t find it (at least that was the theory). Second, taxes on earnings that accumulate in hidden accounts can be dodged by keeping them hidden (even if taxes were actually paid on money used to open those accounts).

Some would say these are two pretty good tax-saving ideas, but only if you’re sure you’ll never be caught in the act. Oops! As you probably know, the feds recently reached an agreement with Swiss banking giant UBS (UBS) to turn over information about thousands of suspicious accounts. Criminal tax evasion prosecutions will follow, with dire financial consequences, and jail time will probably be served. This is a scary scenario for those with dirty hands.

For the last six months, however, the IRS has been offering taxpayers who voluntarily admit to hiding money in offshore accounts what amounts to a prepackaged no-jail-time settlement deal. The deadline for stepping forward to accept this offer, by submitting an application that includes some basic information about previously unreported offshore accounts to the IRS Criminal Investigation Division, was supposed to be Sept. 23. But the government just extended that to Oct. 15.

The reason for the extension is not because the IRS is feeling benevolent. It’s because settlement applications are coming in faster than the feds ever dreamed. And it’s to the government’s advantage to continue collecting all this low-hanging fruit. That said, the IRS warns that no further extensions will be granted.

So if you’re breaking into a sweat thinking of your offshore accounts -- or you just enjoy reading about white-collar crime – read on.

This Is Not Really Amnesty

While some news reports have been calling the IRS’s hidden offshore account settlement program “tax amnesty,” I don’t think that’s an accurate description. To get the no-jail-time deal, you’ll still have to file amended returns and pay taxes and interest on unreported income for the six-year period of 2003-08. And you’ll still get socked with penalties for all six years -- although they probably won’t be anywhere near as stiff as if you get caught later after failing to fess up by the Oct. 15 deadline. Plus, you’ll still generally have to pay an additional penalty equal to 20% of the largest aggregate balance held in hidden offshore accounts during 2003-08. So accepting the government’s settlement deal will be far from painless. But most would agree it beats open-ended exposure to tax penalties, legal fees and jail time.

Be Careful Whom You Confess To

If you have tax problems serious enough that criminal charges could be in the offing, I generally encourage confessing to an attorney. As a CPA, it hurts me to admit that the attorney-client privilege is far more robust than anything available to CPAs or other tax pros. So don’t tell me any gory details about tax evasion -- from unreported offshore accounts or anything else -- because it’s possible I might have to tell the feds what I know if things spin out of control. Instead, hire an attorney with serious experience in resolving federal tax problems and confess to that person. Attorneys don’t have to tell anybody what they know. Then the attorney can hire a CPA or other tax professional to assist in putting together all the necessary paperwork and amended returns to comply with the hidden offshore account settlement program.

Check IRS's Site for More Information

The IRS is ready for those who are still thinking about participating in the government’s hidden offshore account settlement program. Go to IRS.gov and enter “voluntary disclosure questions and answers” into the search engine. You can pull up a document with 52 questions and answers. In Answer No. 6, there’s a link to the application to participate in the program (which the IRS calls a letter). This is what you'd have to turn in by Oct. 15. In Answer No. 12, there’s an example showing how taxes and penalties would be assessed. Good information for those who need it.

Source: SmartMoney.com | 21 Sep 2009 | 10:00 pm

Your Health Plan's "Dr. No"

IT’S A TYPICAL MEETING FOR THE DOZEN OR so men and women convening at a conference table in the Philadelphia suburb of Blue Bell, Pa. Doctors by profession, they’re dressed casually in fleece jackets and sweaters, peering at their laptops and making the occasional wisecrack. They run through the cases in their files one by one—a cancer survivor who’s trying to get new CAT scans, a New Jersey man with a long history of seizures and Bell’s palsy. The language is technical, and the mood is sedate; the latest episode of House, it isn’t. “My kids like to joke with me that I used to be a real doctor,” says Don Liss, who chairs the group.

But behind this mundane veil lies a stark reality: Over the next hour, and without meeting any of the patients they’re discussing, the team will hammer out whether their employer, the giant insurer Aetna, should pay for the patients’ medical claims. At the moment, Liss, a 46-year-old former internist with a crew cut, and his colleagues are focused on the case of a 19-year-old with dermatomyositis. To deal with her condition, a painful disease that causes severe rashes and muscle weakness, her doctor switched her from a steroid therapy that costs pennies per pill to an antibody regimen that can run up to $10,000 a month. It’s a move that’s raising some qualms in this room. Did her physician give the steroids enough time to work? Why do some of her other doctors disagree about her care? And last but not least, is it worth the price?

It’s a moment that anyone fighting an illness has learned to dread: the decision from the insurance company. Of the more than 1 billion medical claims filed with private insurers each year, a significant amount—as many as 75 million—get rejected outright, leaving patients unable to get treatment or stuck with medical bills that add up to at least $50 billion annually. The denial hammer often comes down because the insurer decides the treatment is experimental, less effective than others or “medically unnecessary.” And with increasing frequency, the employers paying the insurance premiums are scaling back or even ruling out paying for treatments because they’re concerned about their soaring costs. The rejections often reach patients as no more than a form letter, and many can’t help but wonder what kind of black-box computer program has decided their fate.

But it’s not a computer making the call. A small but powerful group of doctors at big insurance companies are reading files, talking to practicing physicians and ultimately, making decisive judgments on millions of cases a year. Nationwide there are roughly 1,000 of these doctors, usually known as medical directors. Many are drawn to making policy rather than treating patients directly; Liss, for his part, says that if he could start again, he’d become an engineer instead of a physician. These doctors describe themselves as the key to a working health care system, people who keep costs down so that the maximum number of patients can get care. Critics see them as insurance-company henchmen, branding them with a derisive nickname: Doctor No.

Though they work in relative anonymity, medical directors are playing an increasingly crucial role as the nation looks for ways to control the cost of health care. In the push for health care reform, President Obama has called skyrocketing prices “the biggest threat to our nation’s balance sheet,” and insurers have come under growing pressure to keep a lid on spending. Medical directors operate with relatively little public scrutiny, however, and their decisions can leave patients and their advocates in the dark. They’re also far from infallible: In 2006, the most recent year for which figures are available, 41 percent of the claim rejections that were appealed to state regulators were reversed, according to the trade group America’s Health Insurance Plans. It’s a situation that exasperates their fellow physicians, who often argue fruitlessly with medical directors over their judgment calls. “They might be fabulous doctors,” says Lennox McNeary, a rehabilitation specialist in Roanoke, Va., “but they haven’t seen my patients.”

Most medical directors, of course, don’t expect to win popularity contests. But without them, their defenders say, health insurance could never work financially. The country’s huge and tangled medical system does little to discourage patients and doctors from trying all kinds of expensive treatments and technology, even in cases where those approaches haven’t been proven to work well. The U.S. spent almost $8,000 per person on health care last year, according to the Centers for Medicare and Medicaid Services. That’s 2.5 times as much as the average developed nation, but the U.S. doesn’t have much to show for it in terms of better quality of care or longer life expectancy.

Medical directors say they’re the ones who can apply the brakes to runaway spending, by monitoring the relevant science and data to decide what kind of care is the most effective. Indeed, even their critics say medical directors are becoming more important players. “We’re all headed for a health care train wreck if things don’t change,” says Shannon Brownlee, senior fellow at the New America Foundation and author of Overtreated.

But playing bad cop has earned medical directors their share of enemies over the years. At the height of the HMO era in the early 1990s, they denied coverage so frequently—and hounded doctors so often with scorecards comparing their costs with their peers’—that doctors came to see them as antagonists and tormentors. Some directors testified that they got bonuses if they denied more doctor bills. While insurers say those specific practices have long since stopped, physicians in the field remain frustrated with the system; some refuse even to refer to their counterparts on the insurance side as “doctors.” It doesn’t help that as medicine grows more specialized, many of the doctors evaluating claims have backgrounds in primary care (as is the case with eight out of 12 of the members of Liss’s team). “How do you even argue necessity with insurers,” says prominent Los Angeles orthopedist Ralph Gambardella, “if the only time a joint surgery is truly ‘necessary’ is when you’ve got a bone sticking out of your skin?”

After 12 years with Aetna, Liss has gotten used to being on the front lines of this battle. (Even, occasionally, at home: Liss’s wife is a primary-care doctor.) Over the years, he’s had to say no in various tough calls, involving mental health care, injury rehab and more, though he says all those rulings were medically justified. Recently, Liss says, he traveled to New Jersey to defend Aetna’s decision to stop covering home nursing care for a child. He describes the girl as a “neurologically devastated 6-year-old” who was “cute as a button” and “clearly needs care day and night.” But as Liss told her family and its lawyer, because her seizures had lessened recently, Aetna believed that a parent or nanny—instead of a $150,000-a-year nurse—could handle tasks like feeding the child through the tube in her stomach. The family’s reaction, says Liss, was “businesslike.”

Like other medical directors, Liss often serves as a defense witness when Aetna gets sued, a role he’s wryly proud of. (A plaque on his desk reads “They wanted billions. They got nothing.”) He makes no apologies for embracing the business side of medicine, with all its controversies; he says it enticed him early in his career, when he left regular practice in internal medicine after only three years. Today, Liss says, he’s in charge of about 2.5 million “lives” for Aetna, which means his team cranks through roughly 1,000 disputed cases a month, a routine that has shaped the way he looks at the costs of health care. “I don’t mean to sound cold here,” he says. “But sometimes when $3 million is being spent to extend someone’s life with a really high-tech treatment, I say, ‘Gee, that’s incredible, but can you imagine how many people that could’ve provided dental care to?’”

So how do those trade-offs get decided? Liss says that cost issues would never trump the medical needs of a patient, but he’s acutely aware of how much money is spent on claims each month for each of the Aetna clients in his region. In fact, he and his team keep track of high-spending individual patients, a degree of Big Brother surveillance that would probably surprise most consumers. Ruth Caine, one of Liss’s subordinates, says she knows the names and health histories of the 10 most expensive Aetna patients in the suburban Philadelphia region that she’s responsible for. And when an employer sees a spike in health expenses, a measure Liss calls “the speedometer,” it’s often Liss who has to explain the aberration to the insurer’s executives. (An Aetna spokesman says medical directors are not evaluated based on how many claims they deny or how much money they spend, adding that they’re directed “to approve the care that people truly need.”)

In the conference room where Liss’s team frequently meets (“Welcome to our clubhouse,” he jokes), the bean counters are present only in spirit. One case at a time, Liss and his team briskly discuss the issues they’ve reviewed.

That 19-year-old with dermatomyositis may be going back on steroids, despite her difficulty with the side effects; she’ll have to wean herself off the more expensive antibody therapy, which Aetna won’t cover. Next up: A patient with seizures faces a quandary—should he try an antibiotic treatment before resorting to brain surgery? The antibiotic is “a shot in the dark,” says one doctor; it’s designed for Lyme disease, and the team isn’t even sure that’s what this guy has, but it’s less invasive. (It also happens to be much cheaper.) Green light. One 42-year-old woman’s doctor has recommended Viagra to treat a connective-tissue condition. But because her plan explicitly bars Viagra, Caine explains, Aetna is denying the request, and Caine is advising the doctor to write a prescription for a different medicine with the same chemical makeup.

Although few patients realize it, most of the decisions on tough claims are closely dictated by a document known as the “summary plan description.” That’s the contract each patient’s employer has signed with its insurers, dictating what will and won’t be covered. For the physicians here, the contracts are a road map that gets them in the habit of parsing language like lawyers. But for Liss, the bylaws offer emotional cover when he’s grappling with a decision he knows will cause hardship for a patient. “I tell myself, ‘The plan is the plan,’” Liss says. “I can’t rewrite your policy.” And ultimately, it’s in these contracts, more than in the conference room, that efforts to control costs exert their full force.

Still, these rules aren’t irrevocable. Every year, patients appeal hundreds of thousands of rejections—first to their insurers and then to state officials—and the reviewers often find flaws in the decision making. In 2006, almost 19,000 appeals nationwide made it to the state level, and insurance-industry data suggests that the ratio of complaints to customers has risen 34 percent since 2000. Liss says the appeals reflect how complicated or unprecedented some disputes can be and adds that, often, more information about a case emerges during the appeals process. “There are lots of shades of gray,” he explains. But consumer advocates see a far bigger problem. “There’s something wrong with a system when just questioning a denial can cause insurers to reverse their decision so quickly,” says Cheryl Fish-Parcham, deputy director of health policy at advocacy group Families USA.

Of all the medical-cost battlegrounds, none are hotter than the ones centered on technological breakthroughs, which generate headlines and hopes long before they become standard practice. For insurers, keeping up with the advances is no easy task. That’s why Liss makes frequent visits to places like the University of Pennsylvania’s proton-beam radiation center, a new facility with a $140 million price tag. During a two-hour tour with other Aetna brass, Liss got a close look at the center’s cyclotron, a particle accelerator bigger than a football field, and listened to a presentation by a guide who spoke of the machine as a game-changing innovation in cancer care. Indeed, many doctors think proton beams could be ideal for treating tumors near the eye or spine, since they do less damage to surrounding tissue than traditional radiation. Prostate-cancer patients want the treatment too, since it may help them avoid complications like incontinence.

But Liss sees two nagging issues here: For most cancers, the medical community is still debating the effectiveness of proton-beam treatment, and it typically costs four times as much as traditional radiation. Aetna staff are continually churning out bulletins outlining the evidence behind new and controversial treatments like this. So Liss was shocked when, at the end of his grip-and-grin outing, a Penn official said the university hoped to put about half their radiation patients through the center by 2012. “I walked out of there a whiter shade of pale,” Liss recalls. (Stephen Hahn, chairman of radiation oncology at the university, says the center will be “prudent” about which patients get the therapy.) Liss says it’s his job to make sure such big-ticket spending has enough evidence to back it up. “You hope at least on the margins you bring some sanity,” he says.

That’s a hope that’s shared, of course, by every would-be reformer from President Obama on down, with most of them believing that the system needs some kind of gatekeeper on costs. But critics wonder whether folks like Don Liss—employees of profit-making private insurance companies—should be making that call. Kimberly Calder, director of insurance initiatives for the National Multiple Sclerosis Society, says she’s seen many instances where a medicine for treating MS is suddenly yanked off an insurer’s preferred list of drugs. These cases, she says, are just one example where “cost is the elephant in the deliberation room.” And while she can negotiate with the medical directors, theirs is the last word. Ultimately, she says, the key question is, “Who gets to determine what quality of care is?”

Source: SmartMoney.com | 21 Sep 2009 | 10:00 pm

3 Stocks With Fast Sales Growth (Screens)

In my working-class neighborhood in New York City, most restaurants have empty tables this year at peak hours and are deserted anytime else. But one old diner that was remodeled recently into a chic bistro has a line at the door most for dinner most days, for brunch on the weekends, and for the bar starting at 3:00 a.m., when nearby bars close. Whether by skill, location or sheer luck, the place is cashing in 24/7, proving that even 2009 – with its cautious consumer spending – is a boom year for a few businesses.

The companies below are among the prosperous few. They managed to increase their sales by more than 15% last quarter versus a year earlier, not including sales that were added through takeovers of other companies. If that doesn’t sound like blazing growth, consider the climate. Last quarter, the median S&P 500 company saw its sales shrink 11%, even after acquisitions. Sure, managers largely beat Wall Street’s earnings forecasts last quarter, but only through aggressive cost-cutting. Ultimately, those managers will run out of ways to reduce spending, making genuine growers all the more prized among investors.

DeVry

Projected Fiscal 2010 Sales Growth: 23%

A scarcity of good jobs has sent students flocking to schools with a history of job-specific training and flexible, online options. DeVry (DV) reorganized its namesake school into a proper university in 2002, and today it enrolls more than 65,000 students in undergraduate and graduate programs. Demand is especially strong for spots in the company’s health-care schools, like Ross University for veterinarians and Chamberlain College for nurses. DeVry’s sales growth rate roughly doubled to 34% in its fiscal year ended June. This year, analysts foresee a 23% increase. Management has plans to diversify into new programs and expand into K-12 education. It should have plenty of money to do so. The company has no net debt and generates yearly free cash equal to almost 5% of its stock market value.

Mindray Medical International

Projected 2009 Sales Growth: 14%

If not for pesky democracy, America’s health-care reform might be easier. China earlier this year announced a $123 billion plan to extend coverage, build hospitals and buy new equipment. Local equipment manufacturers have all the business they can handle. Mindray Medical International (MR) makes machines that monitor patients’ blood pressure and breathing; diagnostic products for blood and urine; and basic imaging equipment, like portable ultrasound machines. All segments are growing. The company is still relatively small, with $608 million in trailing 12-month sales, but should benefit from rising Chinese affluence today and a shift to more sophisticated exports like medical equipment in the future. That projection is perhaps not lost on investors, with shares at 29 times earnings.

Cal Dive International

Projected 2009 Sales Growth: 13%

Cal Dive (DVR) provides manned diving, pipe laying, platform installation and salvage services for offshore drillers. Around a quarter of the Houston company’s sales come from foreign customers; the firm is getting plenty of work from Mexico and China lately. During Cal Dive’s most recent quarter, its gross margins jumped to 27.2%, up from 18.7%, suggesting its ships are seeing little rest. At 10 times forecast 2009 earnings, Cal Dive is easily the cheapest stock on this list. Its largest shareholder, Helix Energy (HLX), had a 51% stake before selling roughly half of it in June and putting the other half up for sale Friday. Meanwhile, Cal Dive has been repurchasing (and thus retiring) shares. The net result probably has been a slight drag on the stock price, even though investors should be better off in the end, with slightly fewer shares and less concentrated ownership.

Source: SmartMoney.com | 21 Sep 2009 | 10:00 pm

Sun Micro losing $100 million a month, Ellison says

SAN JOSE, CALIFORNIA (Reuters) - Oracle Corp Chief Executive Larry Ellison said Sun Microsystems Inc is losing about $100 million a month as European regulators delay approving his company's $7 billion purchase of the struggling hardware maker.

Source: Reuters: Business News | 21 Sep 2009 | 9:55 pm

Colleagues' 'dark side' can create toxic workplaces - study

It may pay to take a closer look at your colleagues - one may be a corporate psychopath with a "dark side" capable of creating a toxic workplace.Up to one in 10 New Zealand workplaces harboured a psychopathically oriented worker...
Source: nzherald.co.nz - Business | 21 Sep 2009 | 9:30 pm

US military raises pressure on Obama

The White House insisted it would not be rushed into sending more troops to Afghanistan, in spite of a warning from the top US general in the country that the West’s mission risked ‘failure’ without further reinforcements
Source: Financial Times - US homepage | 21 Sep 2009 | 8:41 pm

Rakon raising $65m for China push, selling shares at discount

Rakon, the manufacturer of components for navigation devices, plans to raise $65 million selling shares at a deep discount to expand its Chinese manufacturing operations.The capital raising will comprise of a $45 million underwritten...
Source: nzherald.co.nz - Business | 21 Sep 2009 | 8:00 pm

US, Europe split on approach to big bonuses

PARIS - How far to go in limiting bankers' bonuses looms as one of the toughest issues at this week's summit of world leaders in Pittsburgh, with clear differences between the US and Europe despite recent moves in each others direction.The...
Source: nzherald.co.nz - Business | 21 Sep 2009 | 7:30 pm

U.S. mortgage delinquencies set record (Reuters)

Reuters - High U.S. unemployment keeps pushing up the rate of mortgage delinquencies, which could in turn drive personal bankruptcies and home foreclosures, monthly data from the Equifax Inc credit bureau showed on Monday.

Source: Yahoo! News: Business | 21 Sep 2009 | 6:32 pm

BofA skips Congress deadline, faces new SEC threat

WASHINGTON/NEW YORK (Reuters) - Bank of America failed to meet a Monday deadline to hand lawmakers further details about its acquisition of Merrill Lynch and faces the possibility of new charges from U.S. securities regulators.

Source: Reuters: Business News | 21 Sep 2009 | 6:19 pm

Lib Dem £1m home levy 'to help low paid'

Owners of houses worth more than £1 million should pay an additional tax worth an average of £4,000, the Liberal Democrats announced yesterday.
Source: Latest Business News from Times Online | 21 Sep 2009 | 6:00 pm

Bishop: Church of England must be less M&S and more like Aldi

The Church of England must shed its middle-class “Marks & Spencer” image and become more akin to Aldi, a bishop has warned.
Source: Latest Business News from Times Online | 21 Sep 2009 | 6:00 pm

Construction sector could face £200m in fines

Britain’s struggling construction industry is bracing itself for fines of up to £200 million today as the Office of Fair Trading concludes its biggest cartel inquiry. Lawyers said that the competition watchdog could face a wave of legal appeals if the fines were deemed to be excessive.

Source: Latest Business News from Times Online | 21 Sep 2009 | 6:00 pm

No sign of rush to claim pension gold in 2012

The infrastructure for the 2012 Olympic Games is rapidly taking shape in East London. Concrete is being poured, bricks are being laid, timetables are being finalised. The infrastructure for the great UK pension reform of 2012 — which is due to go live just a few weeks after the athletes have left town — is far less advanced. No one has a clue how it will operate and preparations have been few.

Source: Latest Business News from Times Online | 21 Sep 2009 | 6:00 pm

Write-Offs: 09.21.09

$$$ Hassan Nemazee charged in $290 million fraud [Reuters]

$$$ "In addition, Mr. Cioffi was executive producer of two independent films, including a 2006 vehicle for Rosie Perez and a movie called Follow the Prophet, which isn't about the pursuit of money but, rather, a teenager escaping marriage to the leader of a polygamist cult. [Crain's]

$$$ Bank of America to Pay U.S. $425 Million to Remove Merrill Asset Guarantee [Bloomberg]

$$$ The Pandora's Box of Wells Fargo and Commercial Real Estate [FT Alphaville]

$$$ 2 men charged with $80 million Ponzi scheme [AP]

Sponsored Topics: Bank of America - Wells Fargo - Rosie Perez - Ponzi scheme - Business
Source: Dealbreaker | 21 Sep 2009 | 5:07 pm

BofA skips Congress deadline, faces new SEC threat (Reuters)

Reuters - Bank of America failed to meet a Monday deadline to hand lawmakers further details about its acquisition of Merrill Lynch and faces the possibility of new charges from U.S. securities regulators.

Source: Yahoo! News: Business | 21 Sep 2009 | 4:53 pm

BofA skips Congress deadline, faces new SEC threat (Reuters)

Source: Yahoo! News: Stock Markets News | 21 Sep 2009 | 4:53 pm

Envoy seeks to ditch ‘bullying’ US image

‘I think that there have been eight years of difficult times for America abroad and anybody who doesn’t agree with that isn’t looking at reality‘
Source: Financial Times - US homepage | 21 Sep 2009 | 4:31 pm

Liquidation of CDOs aids banks

Hundreds of billions of dollars’ worth of the complex securities at the heart of the financial crisis are being liquidated, enabling banks, insurance companies and other investors to clear toxic assets from their books
Source: Financial Times - US homepage | 21 Sep 2009 | 4:18 pm

Don't Ask Charlie Gasparino To Spot You Any Money This Week

'Cause Chaz lost a boatload of it last night. If you want to go there, go there, but I'm just saying you do so at your own risk. We spoke to CG earlier today while he was sitting on a tarmac in Texas and apparently he was at the Giants/Cowboys game last night pulling for Dallas. This was pretty shocking to us because a) CG doesn't come off as a football guy, period and b) Dallas? What's that about? Obviously we pushed him on this one.

Sponsored Topics: Dallas Cowboys - Texas - Neiman Marcus - Dallas - NFL
Source: Dealbreaker | 21 Sep 2009 | 4:15 pm

Amaranth Is Coming Back...To Court

After a three year, SEC-administered cavity search, the fund that made Brian Hunter and natural gas futures famous was given the all clear last month. The years of going back and forth with the SEC about where the ethical and legal lines in the sand are drawn seems to have left quite an impression. Amaranth is now going after Paul Touradji and some of his deputies for at least $350 million in connection with Touradji Capital's alleged repeated breach of contract and misuse of proprietary information.

Amaranth says Touradji breached two contracts agreed to in September 2008 regarding the transfer and purchase of Amaranth's base-metals portfolio, according to a complaint filed Sept. 18 in New York State Supreme Court in Manhattan. Touradji and employees at Touradji Capital Management LP used the information "to recover profits obtained by defendants through improper trading practices and misuse of plaintiffs' proprietary and confidential information," according to the document.

So a major player in financial markets turns the table and goes on legal offense once the wolves get called off. If this is any guide, Bank of America is going to make Dick Bove look like the second coming of Nostradamus.

Amaranth Advisors Sues Touradji, Seeking at Least $350 Million [Bloomberg]
, ,

Sponsored Topics: Bank of America - U.S. Securities and Exchange Commission - Manhattan - Brian Hunter - Business
Source: Dealbreaker | 21 Sep 2009 | 4:00 pm

Presented By:

Source: Dealbreaker | 21 Sep 2009 | 4:00 pm

Bloomberg's Nichols, Zacharia Discuss G-20 Agenda: Video

Source: Bloomberg - All Podcasts | 21 Sep 2009 | 3:54 pm

Podcast: Father Of The 'Public Option' Defends His Big Idea

On Capitol Hill, delivering petitions against a health care bill that includes a public option. (Win McNamee/Getty Images)

On today's Planet Money:

Meet Jacob Hacker, the father of the "public option." Hacker, a Yale political science professor, introduced the notion of the federal government offering a health insurance plan that would compete with ones from private companies.

President Obama calls the public option a means of pressuring private insurers to keep policies affordable, while critics say it would put them at an unfair disadvantage.

Now Hacker takes a turn defending his big idea, saying that a public plan would cost less to run and be able to bargain for better prices.

Bonus: A health insurance tale, after the jump.

Download the podcast; or subscribe. Intro music: Queens of the Stone Age's "No One Knows." Find us: Twitter/ Facebook/ Flickr.

We asked for your stories about dealing with insurance company billing practices. Brian Gist, who now lives in Chicago, sent one from 2001. We'll delete the insurer's name. Gist writes:

While on a ski trip to Lake Tahoe, I fell (on my first run on the first day of the trip) which required a trip to the Tahoe Ski Clinic. A set of x-rays showed no injury -- "Put some ice on it and take some Advil, and spend quality time in the bar while the rest of your family skis this week."

When I received my statement from [deleted], I was only slightly surprised to find the claim was denied. That was their M.O. -- deny first, and pay after I called for an override.

It was instead the reason for the decline, however, that made me smile:

PRE-EXISTING CONDITION.

» E-Mail This » Add to Del.icio.us

Source: NPR Blogs: Planet Money | 21 Sep 2009 | 3:48 pm

Stocks end off lows as health care, tech recover (AP)

AP - Most stocks lost ground Monday as a stronger dollar pushed down commodity prices and investors grew jittery about the market's six-month rally.

Source: Yahoo! News: Stock Markets News | 21 Sep 2009 | 3:47 pm

The SEC Not Willing To Listen To Reason?

Screen shot 2009-09-21 at 4.03.53 PM.png
Or not willing to listen to the crazy whose most recent Twitters make him sound like an mentally unstable homeless person shouting about the mating rituals of cats at various passersby? I don't know what to do here, it's too hard. On the one hand, the SEC is always, without exception, wrong. On the other, Cody, rolling up to the building with his "information" and just asking for "two minutes, that's all I need." (Then I come back to the fact that he's childhood friends with Neil Patrick Harris and I'm confused again. Damn you, Willard.)

Sponsored Topics: U.S. Securities and Exchange Commission - Business - Homelessness - SEC - Allegedly Unethical Firms
Source: Dealbreaker | 21 Sep 2009 | 3:21 pm

US-EU rift clouds climate summit

A growing rift between the US and Europe is overshadowing Tuesday’s United Nations climate change summit in New York, further damping hopes for a breakthrough at the Copenhagen talks in December
Source: Financial Times - US homepage | 21 Sep 2009 | 3:08 pm

Ram Energy receives Nasdaq listing notice (AP)

AP - Oil and gas company Ram Energy Resources Inc. said Monday it received a notification letter from the Nasdaq Stock Market for failing to maintain listing requirements.
Source: Yahoo! News: Stock Markets News | 21 Sep 2009 | 3:06 pm

Chimera & Annaly Dividend Hike, Profits In Mortgages (CIM, NLY)

Investing in mortgages might not be as bad as many thought. Chimera Investment Corporation (NYSE: CIM) has already raised more capital on more than one occasion since coming public in 2007 when the mortgage arena was in the process of going from weak to bottomless. We were intrigued by its vulture investing intentions as it [...]

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Source: 24/7 Wall St. | 21 Sep 2009 | 3:03 pm

Cross Says Perot Deal Gives Dell Service Industry Asset: Audio

Source: Bloomberg - All Podcasts | 21 Sep 2009 | 3:00 pm

Second Curve’s Brown Sees Bank Earnings Rising in 2010: Audio

Source: Bloomberg - All Podcasts | 21 Sep 2009 | 2:58 pm

Maki Sees Housing Affordability Rising `Dramatically’: Audio

Source: Bloomberg - All Podcasts | 21 Sep 2009 | 2:42 pm

How the major stock indexes fared on Monday (AP)

AP - Stocks mainly fell Monday but ended off their worst levels of the day thanks to gains in health care shares. A stronger dollar ignited a sell-off in commodities like oil and gold, which weighed on energy and material stocks. Dell Inc.'s plans to buy Perot Systems Corp. for $3.9 billion helped to lift some tech stocks but failed to raise the broader market.
Source: Yahoo! News: Business | 21 Sep 2009 | 2:42 pm

How the major stock indexes fared on Monday (AP)

TSX closes lower as financial shares fall (Reuters)

Reuters - Toronto's main stock index rallied off a one-week low but still closed lower for a third straight session on Monday as investors avoided commitments ahead of the U.S. Federal Reserve meeting later this week.
Source: Yahoo! News: Stock Markets News | 21 Sep 2009 | 2:41 pm

RBC Trader Fired For Poor Boyfriend Judgment?

Screen shot 2009-09-21 at 2.40.50 PM.png Maybe! Former RBC Capital Markets trader Lindy Boville, pictured at left, claims her former employer fired her in March because she unwittingly dated a dude who turned out to be running a Ponzi scheme (James Nicholson, Westgate Capital). Not so says RBC! The Canadians counter the moose fister's unfortunate taste in men had nothing to do with her termination, but rather that she showed "poor judgment" in not telling her bosses she was helping the bf raise money for his fund, leaving them to wonder what other "deals" she had going on the side. In a complaint filed today, Boville also says that before she was shown the door, she was (bizarrely) sexual harassed in a made up tongue.

She accused one co-worker of making comments about her legs, such as, "Did that dress shrink at the dry cleaners?" She accused another of using the made-up word "sensy" rather than "sexy" so that RBC's monitoring system would not pick up his language.

RBC sued by trader who dated alleged Ponzi schemer [Reuters via BI]

Sponsored Topics: Ponzi scheme - Canadians - Language - James Nicholson - Fraud
Source: Dealbreaker | 21 Sep 2009 | 2:39 pm

Regions to pay $1M penalty in investment fraud (AP)

AP - Regions Bank has agreed to pay a $1 million penalty to settle a Securities and Exchange Commission complaint that it played a role in a long-term investment fraud that charged huge hidden fees and sales commissions to thousands of unwitting Latin American investors.
Source: Yahoo! News: Stock Markets News | 21 Sep 2009 | 2:29 pm

Goodwin Says Equity Markets Showing Sustained Recovery: Audio

Source: Bloomberg - All Podcasts | 21 Sep 2009 | 2:13 pm

Bank Of America Pondering Life Without Kenny

With the addition of Edolphus Towns, there are now enough people waiting in line to take a crack at Ken Lewis about the Merrill merger that BAC's directors are, reportedly, pulling out the binder with the contingency plan should Kenny be charged with civil fraud. They'll have to decide how much and for how long they're willing to resist the temptation to throw KL out the revolving doors that have found a permanent home in the Bank of America hierarchy. If things get dire, they may even have to consider who to turn to if Lewis goes. They'll need somebody with a good sense of the organization. Somebody who knows how to handle the ongoing culture wars between BAC and Merrill Lynch. Somebody with a proven ability to get the absolute maximum for shareholders during a time of crisis. John Thain, you know anybody who sounds like that?

Report: BofA board considering options if CEO is charged with fraud [Jacksonville Business Journal]

Sponsored Topics: Merrill Lynch - Bank of America - John Thain - Business - Edolphus Towns
Source: Dealbreaker | 21 Sep 2009 | 2:05 pm

Wilmott Sees Salary Envy Driving Financial Risk-Taking: Audio

Source: Bloomberg - All Podcasts | 21 Sep 2009 | 2:03 pm

Levitt Sees G-20 Focusing on Limits to Executive Pay: Audio

Source: Bloomberg - All Podcasts | 21 Sep 2009 | 2:01 pm

Vacant storefronts ending up in chains

Storefronts left empty from the recession are driving down rents for retail spaces in most major cities. And national chains are taking advantage. Sally Herships reports on how New York City is an example of the changing retail landscape.
Source: Marketplace | 21 Sep 2009 | 1:38 pm

Congress looks to limit debit card fees

As more consumers are using debit cards for purchases, banks are seeing a decline in late fees and interest charges on credit cards. So they're looking to make up the difference -- and lawmakers have noticed. Stacey Vanek-Smith reports.
Source: Marketplace | 21 Sep 2009 | 1:38 pm

Africa finally to plug in high-speed lines

Fewer than 7% of Africans are connected to the Internet, compared to three out of four North Americans. But the imminent arrival of fiber-optic cables to the continent is expected to spark a telecommunications boom. Gretchen Wilson reports.
Source: Marketplace | 21 Sep 2009 | 1:38 pm

Netflix winners are also interested in ...

Netflix has announced the winners of its contest to increase the accuracy of the algorithm that prompts customers to rent or buy other movies. Host Bob Moon talks with two programmers from the team that won the $1 million prize.
Source: Marketplace | 21 Sep 2009 | 1:38 pm

FCC chief sets 'Net neutrality' plan

Federal Communications Commission Chairman Julius Genachowski has laid out his plan for ensuring consumers' unrestricted access to the Internet, without having their connections slowed down or blocked by service providers. Joel Rose reports.
Source: Marketplace | 21 Sep 2009 | 1:38 pm

Subway's growth is on a roll

Subway is about to overtake rival burger giants and become the world's most ubiquitous restaurant. Soon, the number of Subway outlets will outnumber McDonald's. Jeff Tyler reports on what's behind the growth.
Source: Marketplace | 21 Sep 2009 | 1:38 pm

Recession gives G20 a lot to talk about

Leaders of the top 20 economies gather this week in Pittsburgh to figure out how to unwind from the worst global recession any of them have ever seen. Marketplace London Bureau Chief Stephen Beard looks ahead to the G20 Summit with host Bob Moon.
Source: Marketplace | 21 Sep 2009 | 1:38 pm

Executive pay reform now at the table

With executive compensation topping this week's G20 Summit agenda and the Fed considering limits on bank execs' pay packages, corporate America is getting the message. A business group is now proposing its own reforms. Amy Scott reports.
Source: Marketplace | 21 Sep 2009 | 1:38 pm

If Economists Can't Agree, Which Side Should You Trust?

"Economists may not be any better at making decisions about their field than the general public is at choosing which detergent to buy." (Pigstub / Flicker Creative Commons)

During this first anniversary month of the financial crisis, we're running guest posts from economists about what they've learned in a miserable year. Today David Garman, who teaches econometrics at Tufts, explores the ways his own thinking has changed -- and hasn't -- and explores how hard it is to know whom to trust.

The financial crisis has had relatively little impact on my views about economists' models of macroeconomics or financial markets. Ironically, this is because my views have been little influenced by some of the most highly lauded economists of the last 30 years. Since I do not specialize in macroeconomics and have not taught it in many years, it has been easy for me to watch the evolution of the field with skepticism. The crisis has had a significant impact on my views about the ways that economists and policy makers decide which models and which analysts to believe.

Since the Great Depression, economists have produced many models of macroeconomies and financial markets. Some of these models produce contradictory conclusions.

For example, macroeconomic models that follow from J. M. Keynes tend to focus on the key role of aggregate demand, the impact of "animal spirits" on markets and imperfections in financial markets. On the other hand, macroeconomic models of the "real business cycle" (RBC) school begin with the premises that individuals are rational and that markets adjust to eliminate shortages or surpluses. Recessions (involuntary unemployment) are possible in Keynesian models and government can play a role in stabilizing the economy. Involuntary unemployment (recessions) are not possible in RBC models and government can not play a useful role in stabilizing the economy.

A similar distinction exists in models of financial markets. Some schools of thought use imperfections in the markets or failure of individual rationality to explain how asset prices can deviate from fundamental values. "Efficient market" models of financial markets begin with individual rationality and show that the current price of an asset is the best predictor of its value. Socially inefficient outcomes and speculative bubbles are serious concerns for the first group, but not for the second group.

I believe that involuntary unemployment exists and that the prices set by markets (financial and otherwise) can deviate from fundamental values for long periods. As a result, I have always been skeptical of economic models that claimed to show otherwise. It has been difficult for me to understand how so many clever and talented economists could believe so completely in rational business cycle and efficient market models. The situation reminds me of Hans Christian Andersen's classic fairy tale "The Emperor's New Clothes."

If economists disagree on such basic ideas, who are the policymakers and public to believe? Some economists presciently warned about "irrational exuberance," the underestimation of risk, and excesses in borrowing. Other economists dismissed these concerns as relics of outdated and unsophisticated models. Non-economists have a right to be confused (and bored) by these professional disagreements. When they hear Nobel Prize-winning economists advocating opposite policies, how do they choose sides? What do they choose when presented with the options of "shutting down the punchbowl" as the party peaks or "Don't worry, be happy"? It is no surprise that people tend to side with the positions that are most comfortable and convenient.

It is the lack of convergence and coherence in the beliefs of economists that surprises me. Don't economists aspire to be scientists? Aren't scientific theories confirmed or disconfirmed by evidence? Aren't economist bred to follow the evidence and take unpopular positions? I have tended to think (or hope) so, but my doubts have increased.

Perhaps it is time for economists to apply their analytical tools to themselves and their discipline. The new field of behavioral economics incorporates ideas on human decision making from psychology and cognitive science. Cognitive biases such as the bandwagon effect, confirmation bias, availability bias and authority bias may help us understand why failed or improbable theories live on. Economists may not be any better at assessing evidence and making decisions about their field than the general public is at choosing which detergent to buy.

This past year has been an exciting time to teach macroeconomics or financial markets and I wish that I was teaching a class where discussing the crisis was directly relevant. This is a natural time to reduce the focus on RBC models, reemphasize the Keynesian models, and introduce some historical perspective. Students should learn that business cycles, asset price bubbles and panics have always been a part of market economies. These are as surprising as philandering politicians, overpaid athletes or drunken college students. They should also understand that economic theory contains informative models about these phenomena and that a number of economists offered pre-crisis warnings. Students should be debating the importance of moral hazard, the degree of instability inherent in financial systems, the proper role of government in stabilization, and the scourge of "too large to fail (or jail)."

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Source: NPR Blogs: Planet Money | 21 Sep 2009 | 1:37 pm

Moody's Rethinks Its Social Calendar

Keeping pace with the growing legions who believe Wall St. firms are going to dodge the regulatory bullet and get back to their old ways, Moody's evidently believes the end of the end-of-the-world panic is synonymous with sweeping the past couple of years under the rug. After the rating agency politely declined an invitation to appear at a panel put on by the National Association of Insurance Commissioners to answer a couple questions about their robust ratings process, the insurance community warned Moody's that they plan to debate whether or not to formalize a movement many firms have already effectively embraced.

An official in the New York Insurance Department says insurance regulators from across the country are expected to discuss dropping Moody's Investors Service from a list of acceptable rating organizations at a meeting later this week.

Hearing this, the Moody's team decided it might be in their best interest to attend the session after all. That way there will really be no debate as to whether they're an acceptable rating organization.

Sponsored Topics: Moody - National Association of Insurance Commissioners - Insurance - Credit rating agency - Wall Street
Source: Dealbreaker | 21 Sep 2009 | 1:30 pm

It's up to the twin capitals of capital to show the way on G20 reforms

There will be lots of heads of state in Pittsburgh this week at the Group of 20 summit meeting but will there be any leaders?
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 21 Sep 2009 | 1:28 pm

Herrmann Cites Risks Ahead in Retail, Non-Farm Payrolls: Audio

Source: Bloomberg - All Podcasts | 21 Sep 2009 | 1:26 pm

EU regulation to cost hedge funds '£1.2bn each year'

The EU's proposals to regulate hedge funds could cost the sector 1.9bn euros in compliance costs according to a thinktank's survey.
Source: Finance and Business. Latest breaking news stocks and shares from the UK and world | 21 Sep 2009 | 1:19 pm

Bank Of America "Looking For A Way" To Cooperate With Congressman Towns

That being said, who knows if they'll ever find it. Maybe they could be coaxed in the right direction if they had a little incentive to do so, know what I'm sayin? Missing the noon deadline was a hint. You've been warned.

Earlier: Bank of America: You Want Our Emails? You Got 'Em!

Sponsored Topics: Bank of America - Business - United States - Financial Services - Banking Services
Source: Dealbreaker | 21 Sep 2009 | 1:16 pm

Monster Worldwide Raised to `Buy’ at UBS: Audio

Source: Bloomberg - All Podcasts | 21 Sep 2009 | 1:13 pm

Do You Consider Yourself Important Enough To Be Preyed On?

Do people not just want a piece of your shit, monetarily speaking, but also a glimpse of somea that hot hedge fund ass of yours? Are you sick of the effort it takes to buy up the rights to all your photos? Take a cue from Roman Abramovich and install some extra security measures. But don't just stop at protecting yourself from prying eyes while sunbathing topless on your yacht. Apply this fortress mentality to all forms of transportation and anywhere else you might consider yourself vulnerable to attack by camera.

In a move that could eventually be copied by all discerning billionaires, Abramovich has installed an anti-paparazzi shield on his newest vessel, the world's biggest and most expensive private yacht. The high-tech system on Eclipse, a mega-yacht measuring up to 557ft, relies on lasers to block any digital camera lenses nearby.

Sponsored Topics: Digital camera - Photography - Charge-coupled device - Shopping - Cameras and Camcorders
Source: Dealbreaker | 21 Sep 2009 | 12:50 pm

Pic: No Money Down In Bellevue, Wash.

No money down in Bellevue, Wash. (Seven_Null7 / Planet Money Flickr pool)

By Laura Conaway

Seven_Null7 sends this picture from Bellevue, Wash., with the caption:

"Isn't 0% down part of what got us into trouble in the first place?"

Prices at Highland Lane are running $285,000 to $324,950. The "$0 down" offer will cost you a full point on interest, according to the site, which also pitches the federal government's $8,000 tax credit for rookie buyers.

Bonus: Join the Planet Money Flickr pool.

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Source: NPR Blogs: Planet Money | 21 Sep 2009 | 12:34 pm

Report: Federal Reserve Says No To Public Review

By Laura Conaway

The Federal Reserve has spiked a request from Treasury Secretary Tim Geithner for a public review of its structure and governance, Bloomberg is reporting. The administration proposed the review in June as part of its plan to overhaul financial regulation.

The results of the inquiry are due Oct. 1, but reportedly no work has been done on the project. Bloomberg says Federal Reserve Governor Elizabeth Duke is conducting an internal study of the directors and their roles. A new proposal by Sen. Chris Dodd (D-Conn.) would merge the Federal Reserve with three other agencies to create a new super-regulator for the financial industry. The back-and-forth in Congress has got the Fed a teensy bit on the spot. From Bloomberg:

"The institution is trying to keep a low profile," said Vincent Reinhart, a resident scholar at the American Enterprise Institute in Washington and the former director of Division of Monetary Affairs at the Fed Board. "To publish a report now invites comment on that report."

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Source: NPR Blogs: Planet Money | 21 Sep 2009 | 12:08 pm

Cutting Cat in Half Never Looked So Good (CAT)

Caterpillar Inc (NYSE: CAT) gave us some figures this morning showing that there is still some trouble in this economic recovery. The maker of heavy industrial vehicles and equipment showed that dealer sales of its heavy equipment fell by a whopping 48% in August. The largest drop was in the truck and bus segments and [...]

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Source: 24/7 Wall St. | 21 Sep 2009 | 11:56 am

Obama lashes out at U.S. banks over student loans (Reuters)

Reuters - President Barack Obama criticized the largest U.S. banks on Monday for trying to thwart legislation that would overhaul federal student loan programs.

Source: Yahoo! News: Business | 21 Sep 2009 | 11:49 am

HSBC tags Wal-Mart Stores with 'Outperform' rating (AP)

AP - Wal-Mart Stores Inc.'s expansion in fast-growing emerging markets will fuel earnings and revenue growth, an analyst said on Monday, while giving shares of the world's largest retailer an "Outperform" rating.
Source: Yahoo! News: Business | 21 Sep 2009 | 11:28 am

GM Dealers Opting Out Of 60-Day Satisfaction Guarantee

Some GM dealers have elected to opt out of the car company’s 60-day satisfaction guarantee program. Under the terms of the promotion a buyer can purchase a Chevy, Buick, GMC or Cadillac, and keep it for 30 days. If the customer is not satisfied after 30 days, he has 30 more days to bring it back. GM will [...]

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Source: 24/7 Wall St. | 21 Sep 2009 | 11:07 am

Paper: To Help Save The Economy, Start Shopping

By Laura Conaway

The LA Times has found a key to the economic recovery, and it's in your pocket: "Savers need to resume buying habits to aid recovery, experts say." Consumer spending amounts to two thirds of the overall economy, and yet spending is the last thing on many consumers' minds. From the newspaper:

When American Express asked a sampling of 2,032 people late last month what they would do if they found $500, the answers were like a pitcher of ice water in the face of retailers. Survey respondents were offered a list of possible spending choices that included splurging at a restaurant, going on a shopping spree and taking a trip.

But a mere 10% or fewer marked one of those items. Most went down the list and checked off paying regular bills, reducing credit card debt or simply saving the money.

An American Express spokesperson tells the paper we're seeing unprecedented discipline on the part of consumers. And then there's the factor of pure fear.

With economists predicting unemployment will top 10 percent soon and stay above 9 percent through 2010, who's in the mood to spend much on anything? Last week, the Federal Reserve found that Americans are carrying 26 percent more in debt than they enjoy in disposable income. We won't reach a one-to-one ratio until 2018, the Fed predicts, and then only if we raise the savings rate from 4.5 percent to 10 percent.

It's real push-pull effect, as Federal Reserve Bank of San Francisco president Janet L. Yellen said in a speech last week:

An increase in saving should ultimately support the economy's capacity to produce and grow by channeling resources from consumption to investment. And higher investment is the key to greater productivity and faster growth in living standards. But the transition could be painful if subpar growth in consumer spending holds back the pace of economic recovery.

Yellen says we may be looking at "the start of a new era for consumers following the traumatic financial blows they have endured."

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Source: NPR Blogs: Planet Money | 21 Sep 2009 | 10:32 am

AT&T’s MicroCell Boosts Signals–and Makes the Company Money

Image: Apple Insider

Last night, AT&T unveiled a new website for its MicroCell signal booster, a “miniature cellular tower” that uses your broadband connection to increase your wireless signal strength, notably 3G. CrunchGear has the details:

You’re apparently able to use your existing plan minutes for no additional charge aside from the cost of the device, or for $20 per month you get unlimited minutes for up to ten registered phones. Mind you, these are unlimited minutes while you’re within range of the MicroCell. When you’re out and about, you’re using your plan minutes.

However, if you initiate a call at home and then walk outside and hop on a bus, the call will be counted as a MicroCell call even though you’ve left your house. So that’s something, eh?

I tried a few different zip codes but was unable to get actual pricing info because none of the areas I tried (Boston, Minneapolis, Seattle) are covered yet. There’s some Internet Nerd Rage (TM) going around about the $20-per-month charge, although it appears from the awful, awful informational videos on AT&T’s site that the $20 fee is only if you want unlimited at-home minutes. Otherwise, it seems that just using your regular plan minutes carries no extra charge.

If you have AT&T Home Phone and Internet service, though, you can get unlimited MicroCell calling for free. If you have either Home Phone or Internet (but not both), you can get it for $10 per month according to Engadget.

AT&T has already released MicroCell in Charlotte, NC.

Gizmodo’s Danny Allen thinks AT&T should give users in known dead spots the MicroCell for free. From a consumer rights perspective, I agree with him, but I don’t think AT&T will do it. The MicroCell gives them a way to put the onus of network functionality on their users–and profit off it.

Unfortunately, AT&T is entrenched enough that it can afford to dissatisfy users and still make a profit. The MicroCell benefits users–but AT&T is responsible for the problem in the first place. Because iPhone users in particular don’t have a choice in providers, AT&T can capitalize off its position, despite the fact that it created the market for its own MicroCell.

Source: Business Pundit | 21 Sep 2009 | 10:28 am

Veru Says Treasuries Are Good Barometer of Stimulus: Audio

Source: Bloomberg - All Podcasts | 21 Sep 2009 | 10:24 am

FCC Proposes New Net Neutrality Rules

FCC

FCC chairman Julius Genachowski today proposed a set of new Internet neutrality rules relating to ISPs. CNET has more:

In a speech given at the Brookings Institute, Genachowski proposed that the FCC turn its four principles of network openness official into regulation. And he suggested that the FCC add two more “principles” as part of these new rules.

The existing principles can be summarized this way: Network operators cannot prevent users from accessing lawful Internet content, applications, and services of their choice, nor can they prohibit users from attaching non-harmful devices to the network.

Now Genachowski is proposing two new principles. The first would prevent Internet access providers from discriminating against particular Internet content or applications, while allowing for reasonable network management. The second principle would ensure that Internet access providers are transparent about the network management practices they implement.

Genachowski tried to alleviate fears that the FCC will overstep its bounds and create rules that hamper innovation.

The FCC has created a new website, openinternet.gov http://openinternet.gov/, to promote discussion around the issue.

Genachowski assured AT&T, Comcast, and Verizon–staid fiends of net neutrality–that they could still implement tiered pricing structures if they wanted to. How they would justify charging by bandwidth usage if the FCC made that kind of thing illegal remains a mystery.

Source: Business Pundit | 21 Sep 2009 | 9:58 am

Dell Snaps Up Perot Systems for $3.9 billion

perot

Dell has announced it will buy technology services company Perot Systems for $3.9 billion, or $30 per share. The New York Times’ DealBook reports:

Dell and Perot Systems, which was founded in 1988 by H. Ross Perot, said that the terms of the deal had been approved by the boards of both companies. Perot Systems, which had revenue last year of $2.8 billion, will become Dell’s services unit and be led by Peter Altabef, the Perot Systems chief executive. Ross Perot Jr., the chairman, is expected to join the Dell board.

The combined heft of Perot Systems and Dell’s own services organization should result in about $8 billion of services revenue annually, according to Dell’s statement. Services deals tend to have far higher margins than selling things like PCs and computer servers.

Since its overall business has slowed significantly in recent years, Dell has been exploring more profitable growth areas. It has been slowly building up its own services division through smaller acquisitions over the last two years. It has claimed to offer lower-priced services than its larger rivals and India-based services firms.

But the acquisition of Perot Systems now places Dell in much the same arena as its competitors.

The deal will close during or after the fourth quarter of this year, according to ZDNet.

Digital Daily comments on the purchase:

An interesting move. While there had been speculation that Dell was looking to acquire a handset company like Palm, it seems it was far more interested in boosting its enterprise business by acquiring an outsourcer like Perot.

Source: Business Pundit | 21 Sep 2009 | 9:21 am

'Leading Economic Index' Climbs For Fifth Straight Month

By Laura Conaway

The Conference Board, home of the Consumer Confidence Index, says it sees brighter times ahead. Its Leading Economic Index rose in August for the fifth straight month.

The index purports to look ahead by six to nine months. Last month it climbed 0.6 percent to 102.5, the highest level since January 2008. From Conference Board economist Ken Goldstein:

"This suggests that the recession is bottoming out. These numbers are consistent with the view that after a severe downturn, a recovery is very near. But the intensity and pattern of that recovery is more uncertain."

Before the recent run of upticks, the Leading Economic Index had fallen for 20 months in a row -- the longest sustained fall since the 1970s recession. After the jump, what an equation will get you.

Ian Shepherdson of High Frequency Economics writes:

In the past three months the index has jumped at an 11.7% annualized rate, compared to the previous three months. In theory this is consistent with quarterly GDP growth in excess of 10%, but we are confident that is not going to happen anytime soon. Still, it's welcome.

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Source: NPR Blogs: Planet Money | 21 Sep 2009 | 9:10 am

Eyeing The Next Recession, European Group Pushes G20 For Change

By Laura Conaway

Morning, y'all. We read the news today:

The European Shadow Financial Regulatory Committee (winner for "name of the day") wants the G20 nations -- meeting in Pittsburgh this week -- to force banks to build up reserves to stave off another financial crisis. (Bonus: Simon Johnson wins "headline of the day" for "You Cannot Be Serious: US Strategy for the G20.")

If you think you're mad about the state of big banking in America, meet Rep. Edolphus Towns. The New York lawmaker, a Democrat, is demanding answers about what Bank of America knew about losses at Merrill Lynch as it bought the investment firm last year.

Pushing his own plan for regulatory reform, Sen. Chris Dodd (D-Conn.) is digging in for a fight with fellow Dems Rep. Barney Frank of Massachusetts and President Barack Obama. Dodd wants to combine the Federal Reserve, FDIC, Office of Thrift Supervision and Office of the Comptroller of the Currency into one super-regulator, an idea at odds with proposals by the Obama administration and Frank.

Inflation watchers, behold the slack in the American economy. Ahead of the Federal Reserve's meeting this week, the Wall Street Journal visits Bend, Ore., where 29 percent of the homes are vacant (gulp!) and a whole lot of downtown is for rent. Until the economy expands enough to take up that kind of slack (gulp!), the Fed's not likely to raise the benchmark interest rate from its record low of zero to 0.25 percent.

Whole Foods is considering banning personal checks at a few stores out West because they cost too much money to handle and so few people use them. Anyone remember the last time they wrote a check at the store?

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Source: NPR Blogs: Planet Money | 21 Sep 2009 | 8:50 am

Mistake #1: Seeking Validation

mistakes-women-make-seeking-validation

Today’s post is part of the series of 8 Mistakes Men Don’t Make, and we’re looking at the bad, bad habit of seeking validation. It’s not only women who do this. So listen up, men.

There are a few different ways people seek approval or validation. All of them send a message:

Hey, um, I’m not really good enough to be here, unless, well – do you think I am? Because if you think so then maybe you’re right. I don’t know.

I exaggerate – a little.

Keeping Quiet to Gain Approval

Maybe you think you don’t seek validation because you never directly ask for others to back you up. But what about holding back when you have something that needs to be said because you just don’t want to upset anyone? As someone who is not afraid to speak out, I’ll tell you that if you’re afraid you won’t be liked by everyone, you’re right. You’re also missing a huge opportunity to be deeply respected by those who a) agree with you, and/or b) appreciate whatever it is you’re saying being brought out in the open.

Seeking Validation by Getting Loud

We don’t all have the same personality. Some people seek approval not by blending in, but by standing out. They might be a little too loud, cross that fine line between witty and smart ass, or – especially in the case of women – turn the feminine charm dial a notch too high. These behaviors are sure to get attention, and in the short term even result in some positive outcomes. But really, over the long haul who’s going to want a long term business relationship with the class clown or the woman whose wardrobe choices continually spur the debate: are those real?

Can I Get a Yes Man?

It’s great to get your ego stroked by hanging out with people who think your ideas are brilliant, are interested in your cockapoodle, and never fail to compliment your fantastic haircut. And admit it, no one wants to live and work without these kinds of people in our lives. However, when you’re too focused on what others think of you, you may miss out on creating relationships with key business contacts who are in a position to advance your career. These people may not think you’re so special – today. But they might be able to help you get that way – tomorrow. Or maybe they do think you’re all that and a Powerpoint presentation, but they’re not the telly, feely type. Don’t lose an opportunity just because you’re addicted to praise.

I Can Do That

Overextending and overachieving are classic tactics women use to get validation and approval. I don’t even have to explain this one. Just – stop, okay? Offering to take care of everything that comes across the conference table only gives the message that you’re desperate to be accepted, and worse – that the work you’re already doing isn’t really so important.

It’s weird applying this concept to the work of writing, especially fiction. On one hand it seems publishing is all about seeking approval – from agents, publishers, and ultimately book buyers. On the other hand, the more I run ideas by writer friends, the more muddled it becomes. Less of me shows through, and as a writer that’s pretty much all I’ve got.

I think it’s the same no matter what business you’re in.

How do you notice yourself, or people you work with, seeking validation?

Image Credit: Katie Tegtmeyer

Source: Business Pundit | 21 Sep 2009 | 6:06 am

What Makes Cheap Airlines So Inexpensive

airlines

Source: Business Pundit | 21 Sep 2009 | 5:43 am

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