03.12.10
Posted in business, economic, money, shortly, world of money tagged marketing, opinion, personal, politics, reviews at 3:18 pm by carydalton
NEW YORK (MarketWatch) — Weighing in at 2,200 pages, the court-appointed examiner in the Lehman Brothers Holdings Inc. bankruptcy case performed the kind of due diligence that was sorely lacking at the failed firm.
No one, it seems, escaped the gaze of Anton Valukas, the chairman of the law firm Jenner & Block, who spent $30 million on the post mortem. Valukas states Lehman executives manipulated the balance sheet, withheld information from the board, and inflated the value of toxic real estate assets. See report on possible legal claims from the case.
The voluminous detail of the report vindicates some and castigates others. Here are the major verdicts:
Guilty: Dick Fuld, Erin Callan.
The CEO and chief financial officer of Lehman, respectively, are painted by the report as either dubious or overmatched by the complex nature of Lehman’s holdings. Callan, is alleged to have ignored warnings from the firm’s financial controller about the use of Repo 105s, the internal term used to move assets off the balance sheet and hide debt.
WSJ’s Deal Journal received this response from Fuld’s attorneys: “Mr inferred heaters. Fuld did not know what those transactions were — he didn’t structure or negotiate them, nor was he aware of the accounting treatment.”
As if that looks any better.
Not guilty: David Einhorn, short sellers, counterparties, Matthew Lee.
David Einhorn, the head of the hedge fund Greenlight Capital, argued that Lehman was hiding its balance sheet problems for months and took a lot of heat from Lehman as a result. Likewise, Fuld liked to blame the firm’s sagging fortunes in the summer of 2008 on short-sellers such as Einhorn.
The Valukas report shows they made the right bet. Counterparties including as J.P. Morgan Chase & Co. soon followed, and as the report suggests, rightfully so.
History also would look favorably on Matthew Lee, a senior vice president, who in June 2008 warned management and auditors. Only to be ignored.
— David Weidner
MarketWatch First Take: Lehman’s guilty and not guilty
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03.08.10
Posted in business, economic, news, shortly, world of money tagged finance, life, markets, news, reviews at 7:06 pm by carydalton
LISBON, Portugal – Portugal announced new austerity measures Monday to avoid a debt crisis like the one engulfing Greece, cutting welfare benefits and government hiring as well as selling assets and raising taxes on the well-off.
The announcement comes two days ahead of a bond issue in which Portugal will try to raise euro750 million ($1.02 billion). Greece was able to tap bond markets last week after also announcing more deep cutbacks to shore up its finances.
The two countries’ troubles have fueled a Europe-wide debt crisis that has undermined the euro and led the European Union to consider setting up a new European monetary fund to help support the euro.
Portugal aims to raise euro6 billion ($8.2 billion) from privatizations, trim welfare benefits and slash other state expenditure in an effort to reduce the country’s heavy debt load, Finance Minister Fernando Teixeira dos Santos said.
The measures are part of a four-year austerity plan devised to convince financial markets and other eurozone countries that Portugal has its finances in order.
The plan “rests, essentially, on a reduction in public spending,” Teixeira dos Santos told a news conference.
Portugal’s budget deficit is projected to have hit a record 9.3 percent of gross domestic product last year, prompting fears it could face similar problems to Greece where a budget crisis has brought violent demonstrations, rattled the European Union and undermined the 16-country euro currency, of which Portugal is a member.
Portugal’s public debt is expected to climb to 85.4 percent of GDP this year, up from 76.6 per cent in 2009, and Teixeira dos Santos said he predicts it will peak at 90.1 percent of GDP in 2012 before falling back.
Teixeira dos Santos said he expected the privatizations over the next four years to bring revenue equivalent to 3.6 percent of Portugal’s gross domestic product.
The center-left Socialist government also wants to keep annual pay hikes for state employees below the rate of inflation up to 2013, cut welfare benefits and scrap some tax breaks personal business card.
Teixeira dos Santos said he would create a new tax rate of 45 percent for people earning more than euro150,000 ($205,000) a year and raise the ceiling on entitlements for tax breaks, but otherwise he ruled out tax increases.
“We are focussing on reducing spending and avoiding tax hikes,” Teixeira dos Santos said.
Planned spending on new military equipment projected for the next four years will be cut by 40 percent, and a plan to build a high-speed rail link to Spain will be postponed for at least two years.
The minority government was consulting Monday with opposition parties over the plan, though it has not said whether the measures will be put to a vote in Parliament.
The government has included some of the the planned austerity measures, including a contested pay freeze for civil servants, in its 2010 state budget, which parliament is expected to approve on Friday. The budget was delayed by a general election last year.
State spending cuts will be across the board, Teixeira dos Santos said. About 75 percent of current expenditure goes on salaries and welfare policies.
He said that increasing pay by less than the inflation rate would cut the state’s wage bill to 10 percent of GDP from just over 11 percent.
Staffing levels will be cut by allowing one new employee to be hired for every two that leave the civil service.
The government also wants to reduce outlays on welfare by 0.5 percent by 2013 by trimming benefits. Temporary measures introduced in recent years to ease the effects of the economic downturn, including financial help for companies hiring new workers, will be phased out.
The government is also expecting some relief from an improving economic growth rate which Teixeira dos Santos said is forecast to reach 1.7 percent in 2013.
The government estimates the economy contracted 2.7 percent last year. It predicts growth of 0.7 percent this year.
Portugal adds austerity measures
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03.05.10
Posted in .com, business, economic, news, online tagged events, finance, newsreports, personal, politics at 7:12 am by carydalton
NEW YORK – Shoppers returned to the nation’s malls last month, buying a surprising amount of spring clothing and other items and helping stores post the strongest retail sales since November 2007, a month before the recession began.
The better-than-expected 3.7 percent gain reported Thursday showed that Americans are still thrifty, but they are letting go of some of the frugality brought on by the economic downturn. And many are willing to spend for certain higher-end goods.
Consumers “are now starting to go back to where they had typically shopped” before the recession, said Michael Niemira, chief economist at the International Council of Shopping Centers, who expected a 2 percent gain. “I’m surprised by the broad strength.”
But, he added, there’s still uncertainty about whether such a robust pace can be sustained, particularly later this year when the sales figures are being compared with more stabilized spending patterns.
The February sales report was the third consecutive monthly increase, according to the ICSC. The monthly index excludes Wal-Mart Stores Inc., which stopped reporting monthly sales last year.
Shoppers shrugged off snowstorms and worries about the economy to visit a broad array of merchants, from luxury retailer Nordstrom to middlebrow Macy’s Inc. to discounter Target Corp., which all reported solid sales increases that beat Wall Street analysts’ estimates.
The figures are based on sales at stores open at least a year and are considered a key indicator of a retailer’s health.
Stores in malls, which had seen sales plunge as their customers traded down to cheaper options, are starting to bring shoppers back by offering lower-priced or exclusive items.
Saks Fifth Avenue, for example, is expanding its exclusive merchandise offerings, putting more emphasis on lower prices and expanding its discount Off Fifth chain.
Selia Black, 26, was at the Manhattan Mall in New York on Thursday to find a birthday gift for her sister. She splurged on a $178 jacket at full price at Bebe. A year ago, she would have been scouring for a present that was deeply discounted, she said.
“I’m easing up a little bit, but not totally,” said the Brooklyn woman. She does not work, but her husband is a security guard.
Black says the recession has made her switch from Macy’s to discounters such as Marshall’s, and she planned to keep shopping at discount stores even when the economy recovers.
“You always get the deals,” she said. “But this is something special.”
Dennis Jacobe, chief economist at Gallup, believes shoppers’ thriftiness may have thawed a bit, as shoppers who have jobs are buying a little more. But, he said, frugality has not gone away, based on Gallup’s polls.
“We are in a new normal of spending,” he said low fee payday advance. He cited Gallup surveys taken Feb. 1 to Feb. 3 in which 57 percent of consumers polled said they are spending less. One-third of those surveyed said curtailed spending will be their normal pattern.
Another factor that helped the monthly sales figures look so strong was that February 2009 figures were so awful. Jacobe says spending levels are still well below 2008.
February, sandwiched between post-holiday clearance and spring, is the second-least important month of the year for retailers after January. Analysts see combined data for March and April as a more accurate measure of consumer behavior.
Still, the fact that shoppers were buying full-priced spring clothing was a pleasant surprise in the face of a sharp drop in the monthly Consumer Confidence Index.
Economists pointed to factors that depressed shoppers’ mood last month but did not seem to affect spending: gridlock in Congress over the jobs bill and a dive in the stock market related to worries about Greece’s national debt — not to mention repeated winter storms that buried much of the country in heavy snow.
Most economists say companies need to start hiring significantly in order for spending to keep improving. Unemployment stood at 9.7 percent in January and was expected to increase to 9.8 percent in February. The Labor Department was to report new job figures Friday.
In other encouraging signs for the economy, the Labor Department reported Thursday that new claims for jobless benefits fell last week, reflecting that layoffs may be easing as the economy slowly recovers. Factory orders also rose in January, according to the Commerce Department.
Shoppers are buying food at Wal-Mart and picking up discounted designer clothing at TJ Maxx, but trading up to stores such as Macy’s and Kohl’s for exclusive merchandise, said Craig Johnson, president of retail consultancy Customer Growth Partners.
Target, the nation’s second-largest discounter behind Wal-Mart Stores Inc., said February sales in stores open at least a year rose 2.4 percent as it attracted more customers and more spending per customer. But food and household essentials remained the biggest sellers, with furniture and clothing sales about flat with last year.
Gap, where sales had been led by low-price Old Navy, is starting to see a recovery across all its brands, including upscale Banana Republic, where sales were hurt when the financial meltdown escalated. Sales at namesake Gap stores were flat, but Banana Republic posted a 6 percent gain and Old Navy’s business improved by 5 percent.
Retail sales post strongest gains since late 2007
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03.01.10
Posted in Free blog Tips, economic, money, news, shortly tagged blogs, marketing, markets, people, politics at 4:54 am by carydalton
Merck of Germany said on Sunday that it had agreed to buy Millipore, an American provider of purifiers and filters for biotechnology laboratories, for about $7.2 billion, including debt.
With the Millipore acquisition, Merck will become the latest health care company to strike a deal during a period of industrywide consolidation. The takeover will give the German drug maker a big presence in products for the biotechnology industry.
Under the terms of the deal, Merck will pay $107 a share in cash, a 13 percent premium to Millipore’s closing price of $94.41 on Friday.
“This transaction is very attractive to shareholders, customers and employees of both companies,” Karl-Ludwig Kley, Merck’s chairman, said in a statement. “This is a combination with an excellent strategic fit.”
Millipore shares have risen more than 34 percent since last week, when news reports said that it had received a $6 billion bid from another company, Thermo Fisher Scientific bad credit pay day loans. Millipore later confirmed that was considering selling itself.
Millipore, based in Billerica, Mass., had $1.7 billion in sales last year. It has about 6,000 employees in more than 30 countries.
The deal is expected to close in the second half of the year.
Merck plans to pay for the deal with a mix of cash on hand and loans from Bank of America Merrill Lynch, BNP Paribas and Commerzbank, though it expects to issue bonds to replace some of the bank financing.
Merck was advised by Guggenheim Securities, Perella Weinberg Partners and the law firm Skadden, Arps, Slate, Meagher & Flom. Millipore was advised by Goldman Sachs and the law firms Cravath, Swaine & Moore and Ropes & Gray.
Merck to Pay $7.2 Billion for Millipore
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02.15.10
Posted in All, Free blog Tips, economic, hot news, news tagged All, business, money, politics, reviews at 1:42 am by carydalton
ANCHORAGE, Alaska – Rain, low clouds and predicted high winds Sunday grounded searchers seeking the body of a ConocoPhillips Alaska employee missing and presumed dead in an avalanche that killed the head of the company.
The avalanche at around noon Saturday on the Kenai Peninsula buried Jim Bowles, 57, head of ConocoPhillips Alaska, and Alan Gage, 39, part of the company’s capital projects team in Anchorage. Gage remains missing.
“The weather is not cooperating and it’s not conducive to search,” said Megan Peters, a spokeswoman for the Alaska State Troopers.
The men were in a party of 12 snowmobilers in the Grandview wilderness area, part of the Chugach National Forest, between the tiny communities of Moose Pass and Portage.
Bowles was buried for about 45 minutes before companions using avalanche beacons dug him out. He was pronounced dead at the scene.
Gage apparently was not wearing an avalanche beacon, troopers said.
Troopers and U.S. Forest Service personnel rode snowmobiles 15 miles to reach the scene. The railroad brought in Girdwood Fire Department personnel and a trooper helicopter flew in from Anchorage.
Ridgetop winds Saturday averaged 10 to 20 mph and mountain temperatures were in the mid-20s to low 30s. Conditions deteriorated overnight, with two inches of new snow falling at Turnagain Pass, about 15 miles north of Grandview.
Ridgetop winds Sunday ramped up, averaging 30 mph with gusts to 40. A strong low pressure area in the Gulf of Alaska was expected to bring gale to storm force easterly winds, rain at sea level, and up to 12 inches of new snow at higher elevations.
The Chugach National Forest Avalanche Information Center said the avalanche danger rose to “considerable” with pockets of “high” hazard as the storm progressed.
“We pretty much hit the tipping point the last few days, and this next storm will just add more stress to a snowpack with significant buried weak layers,” said forecaster Lisa Portune on the center’s Web site free credit scores.
Forecaster Carl Skustad said the snowmobile party was in moderate terrain, with probably a 35 to 40 degree slope. However, with the weak snow layer underneath, that can be enough for snow to let loose, he said.
Emergency officials said a search would resume when weather improved and avalanche danger subsided.
Bowles joined Conoco in 1974. He was named head of Alaska operations, overseeing about 900 employees since in late 2004. Jim Mulva, ConocoPhillips chairman and chief executive officer, said in a statement Sunday that Bowles presided over developments that ensured the company’s place and standing in Alaska.
“On behalf of everyone at ConocoPhillips, including those who had the privilege to know and work with these two gentlemen and those who did not, I want to extend our sincere condolences to the Bowles family and our heartfelt best wishes to the Gage family and make sure they know the high regard in which we hold Jim and Alan, both as co-workers and as friends.”
Gov. Sean Parnell issued a statement saying he and his wife, Sandy, were saddened by Bowles’ death and lauded his work in Alaska.
“Jim brought so much to our state: his love of the great outdoors, his leadership of ConocoPhillips Alaska, and his dedication to making Alaska a better place for all of us to call home,” Parnell said.
U.S. Sen. Lisa Murkowski, R-Alaska, said Bowles was a great partner in the responsible development of Alaska’s natural resources.
A third man was caught in another avalanche and killed Saturday near Eagle River on Anchorage’s north side.
William Brasher Schorr, 60, was skiing alone near the top of a ridge while a friend waited near the bottom for his arrival. A witness saw the slide begin from his home. Schorr’s body was recovered about 45 minutes later.
Weather halts Alaska search for avalanche victim
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02.13.10
Posted in All, economic, hot news, news, top tagged All, campaign, life, opinion, personal at 11:12 pm by carydalton
The global coal industry is in the midst of a permanent structural shift in the form of the emerging dominance of the Asia-Pacific region.
China and India are at the heart of the transformation, firmly placed as the world's No. 1 and No. 3 biggest coal producing nations, respectively. (The U.S. is No. 2.)
And demand in the world's two most populous nations is growing rapidly.
India's imports of thermal coal, used in power generation, rose 60% in 2009 to 57 million tons. China shifted to a net importer last year to the tune of 70 million tons of thermal coal, despite large domestic resources of the black rock.
Both countries are also experiencing a spike in demand for metallurgical coal, a main ingredient of steel, as their economies continue to mushroom.
At the end of January, Peabody Energy (NYSE:BTU - News) said it is expanding a mine in Australia at a cost of $70 million to boost capacity by 1 million tons within several years to meet growing demand for metallurgical, or met coal, used by steel companies in China, India and other Asian nations.
"China and India have permanently changed the seaborne metallurgical and thermal coal market landscape," CEO Gregory Boyce said. Peabody enjoyed a 37% increase in Australian coal shipments in the second half of 2009.
Alpha Natural Resources (NYSE:ANR - News) said it sees much strength in the metallurgical markets in 2010. It raised its metallurgical shipment guidance by about 1 million tons, to 11 million to 13 million tons for this year.
Meanwhile back in the U.S., the enormous stockpiles of coal racked up by utilities during the depths of the recession are starting to shrink after extremely cold weather in December and January.
According to U.S. utilities, which use coal to generate nearly half of America's electricity, roughly 50 to 60 gigawatts of coal will go offline over the next 10 years or so.
The U.S. will need to replace that energy, and renewables such as solar, wind, small hydro, modern biomass, geothermal and biofuels are one of the paths to take to fill that void.
1. Business
IBD's Energy-Other group includes any energy source that is not oil or natural gas. The group's 800-pound gorilla is coal.
Coal mining, especially underground, is a capital- and labor-intensive business. It is also a very high fixed-cost business.
Electricity demand has been the primary value driver for thermal and steam coal for a long time, with steel being the other big driving force.
In 2009, the U.S. produced 1.08 billion tons of coal, mined primarily from four major coal basins with smaller ones spread across the country. The four are the northern and central Appalachian basins, the Illinois basin and northern Wyoming's Powder River Basin.
Peabody is the largest U.S. coal miner, producing 215 million tons last year. It is the only U.S.-based company in the group with international mining operations, in this case Australia.
Arch Coal (NYSE:ACI - News) is the second-largest company in the group; Alpha Natural Resources moved into the No. 3 slot with last year's acquisition of Foundation Coal for $1.4 billion in stock. Consol Energy (NYSE:CNX - News) and Massey Energy (NYSE:MEE - News) are fourth and fifth, respectively.
The U.S. is capable of generating roughly 1,000 gigawatts of electricity per year. Coal generates some 325 gigawatts, natural gas kicks in 400 and nuclear makes up another 100, according to Brian Gamble, an analyst at Simmons & Co. The rest, he says, is split between hydropower, solar, wind, geothermal and biomass.
"The segment of the U.S. power grid that is made up of renewables is quite small," Gamble said. "It is a growing market, albeit from a small base, but we don't expect solar, wind or any other renewable to gain significant market share for some time."
The group includes several solar companies, including Chinese firms like Trina Solar (NYSE:TSL - News) and Suntech Power (NYSE:STP - News).
First Solar (NMS:FSLR) is the largest U.S.-based solar company by market share. Other American firms include Real Goods Solar (NMS:RSOL), GT Solar International (NMS:SOLR) and SunPower (NMS:SPWRA).
While multinationals such as GE (NYSE:GE - News) and Siemens (NYSE:SI - News) have made a strong push into wind power, those diversified industrial giants are listed in other stock groups. In the Energy-Other group, Danish company Vestas Wind Systems (OTCBB:VWDRY.ob - News) is the largest wind-power company.
Ormat Technologies (NYSE:ORA - News) and U.S. Geothermal (AMEX:HTM.a - News) operate plants of geothermal energy, power generated from heat stored in the Earth payday advance.
Name Of The Game: It's simple: produce and supply coal, wind, solar, hydropower and other renewables to fulfill the world's energy needs, which are expected to grow rapidly over the next 20 to 30 years, says Michael Dudas, an analyst with Jefferies & Co.
2. Market
U.S. utilities are the biggest customers for coal producers and renewable energy alike.
Steel makers are the next biggest consumers of coal.
The entire coal market, which is dominated by the publicly traded miners and small mom-and-pops, is estimated at roughly north of $52 billion. The U.S. is expected to produce 1.07 billion tons of coal this year, with public coal companies churning out more than half that output.
The renewables market is a bit tougher to size as the adoption of these alternative energies is still in early phases. But rough estimates for the global wind and solar market is roughly $100 billion, with 70% of that produced by wind. The U.S. wind market is roughly $20 billion, according to Simmons' estimates.
3. Climate
The biggest issue facing the coal industry is permits being held up by the Environmental Protection Agency that are needed to continue producing coal. Environmentalists contend coal mining is destroying landscapes where these basins are located.
"The problem here is that we are going to experience energy usage growth of 50% over the next 25 years, and we can't do it without coal, which is one of the cheapest forms of energy," Dudas said.
Coal stockpiles rose last year as demand fell. Businesses were forced to close and shutter production, while consumers used less heat to save on their energy bills, Dudas says.
"Coal producers will have to manage their output and in some cases shut mining operations down until the stockpiles begin to decline, which has already begun," he said.
Last week, U.S. industry executives from the wind, solar, hydropower, geothermal and biomass sectors pushed for a federal renewable energy standard, which would set a percentage of how much energy must come from renewable sources in the U.S.
The group wants an extension of tax incentives and said stimulus funds powered most renewable expansion last year. President Barack Obama has urged Congress to set a national standard that would require 25% renewable power by 2025.
A federal standard, which they say will foster economic growth and create jobs, could spur these industries at a time when China is moving swiftly into alternative energy production.
4. Technology
Most technological advances in this industry group have occurred in renewables.
For example, ethanol producers, such as BioFuel Energy (NMS:BIOF) and Pacific Ethanol (NMS:PEIX), use corn oil extraction technologies to produce the biofuel.
Companies such as Hy-Drive Technologies provide natural gas or hydrogen-generating systems for diesel and commercial fleets.
And FuelCell Energy (NMS:FCEL) makes stationary fuel cells, which electrochemically produce electricity directly from hydrocarbon fuels for commercial, industrial, utility and government customers.
Solar power companies have to be tech-savvy to generate electricity from sunlight. This can be direct as with photovoltaics, or indirect as with concentrating solar power, where the sun's energy is focused to boil water, then used to generate power.
5. Outlook
Over the next decade, coal plant retirements will take roughly 50 to 60 gigawatts of coal generation offline.
The U.S. will need to replace that lost energy, and renewables are the answer, Gamble says.
"It will take a mix to fill the void, and there will be a shift, but renewables won't fill that need overnight," he said. "In order to make this happen, there will have to be additional infrastructure built, which becomes an expensive proposition no matter how you slice it."
Nuclear, natural gas and renewable energy can each fill part of that role, but additional coal assets must be built in the meantime.
Upside: The world has unquenchable thirst for energy as emerging economies continue their rapid growth and populations in developed nations continue to swell. That demand should fuel business for traditional sources like coal as well as renewables.
Risks: Another recession could further sap demand for coal, which could increase stockpiles and restrain mining operations. Also, tougher regulation in the U.S. would make starting new projects difficult.
A Renewed Sense Of Energy
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02.12.10
Posted in Free blog Tips, economic, money, news, top tagged economics, economy, finance, marketing, newsreports at 11:12 am by carydalton
RIGA, Latvia — The tiny Baltic states have pursued closer integration with Europe with enormous zeal. But the price of monetary union may be giving them pause.
Economists and ordinary citizens alike are watching the protests rumbling through the streets of Athens and the slow response to Greece’s problems coming out of Brussels.
“Countries like Estonia and Latvia were once desperate to get in,” said Alf Vanags, director of the Baltic International Center for Economic Policy Studies in Riga. “The euro is not looking so attractive now.”
Latvia has been on track to adopt the euro in 2014, as has Lithuania, with Estonia eyeing its inclusion by 2011.
These governments have reason to fear that, like Athens, they will be caught in a vise: unable to pay for expensive social programs demanded by citizens while staying within the euro zone’s debt limits.
Enthusiastic for years about adopting the euro, Latvia had undertaken painful austerity measures. Even as the global economy contracted, the government slashed spending. The program included cuts of 50 percent or more in the salaries of public-sector employees and a 40 percent reduction in hospital budgets.
The result, many economists say, has been deepening unemployment and the worst recession of any country in the 27-nation European Union.
Latvia’s gross domestic product has declined by an estimated 24 percent since the recession began — a steeper drop than America’s during the Great Depression.
To keep a faltering country’s economy in line with the euro “is a tall and very unpleasant order,” Mr. Vanags said.
One of the constraints of joining the euro zone would be that Latvia would be unable to devalue its currency by printing more money. The current members of the euro zone that are weaker, like Spain and Portugal, are feeling such constraints now.
Despite some negative effects, devaluations have helped many countries over the years, giving a lift to their economies by making foreign goods more expensive and domestic goods more attractive.
Latvia has already taken some steps that limit its ability to bolster its economy. Since 2004, the Latvian central bank has pegged its currency, the lat, to the euro, to prepare for adhering to the common currency.
In 2008, Latvia accepted austerity as a condition of a bailout led by the International Monetary Fund that allowed it to remain on track to adopt the euro. After sharply cutting salaries in the public sector, the government encouraged the private sector to do the same. The policy, in fact, worked to balance the trade deficit. But the country is now being severely hurt by the very policies needed to get into the euro zone.
Andris Liepins, deputy minister of economy in Latvia, said in an interview that Latvia remained committed to a currency peg and to adopting the euro short term personal loan. “Greece’s problems are temporary,” he said. “Greece needs the same reforms as Latvia.”
The austerity programs imposed by the I.M.F., Mr. Liepins said, would help Latvia’s economy restructure over the long term, by cutting health care outlays and encouraging companies to become more efficient. Devaluing the currency would help only in the short term, he said. It would also push more homeowners to default on their mortgages, which are often denominated in foreign currencies. “We would lose competitiveness as an economy,” he said.
The policies should be judged three or four years from now, he said, when policies like encouraging outsourcing has made companies more competitive while creating opportunity for new small business.
Latvia’s economy contracted an extraordinary 18 percent in 2009, according to preliminary figures. If the number holds, it would mark the sharpest contraction in the world, though it followed what was widely regarded as an unsustainable burst of growth just before the global crisis.
Casting about for ways to raise cash during the crisis, the Latvian government grasped at times at unconventional methods.
In January, it auctioned off a ghost town along with an abandoned Soviet radar base called Skrunda-1 for 1.5 million lats ($2.89 million).
A Russian company bought it.
The economy began growing slowly in the fourth quarter of last year. Rating agencies also noted an improved outlook on the country’s creditworthiness.
Still, the government’s reliance on layoffs and deep wage cuts has not been popular.
But the response has been more measured in the Baltic countries so far than in Greece, struggling with public employee strikes and protests.
Slava Ushakov, who had a small business, sympathizes with the employees of the Greek government. When his business failed in the recession, Mr. Ushakov took a job chipping ice from city sidewalks under a government work program.
When he slipped and broke a rib, his already meager pay was docked for the days that he had missed. So now he comes to work injured. “I just wrapped it,” Mr. Ushakov said, lifting his sweater and gingerly touching bandages.
The work program, designed by the World Bank and partly financed by the European Union, pays Mr. Ushakov 100 lats ($192) a month. Still, the jobs are coveted, in a sign of the depth of troubles in Europe’s most recession-plagued economy.
“I am still working every day,” Mr. Ushakov said. He added that these days in Latvia, “if you want to buy a chicken, you have to think pretty highly of yourself.”
With Greece’s Woes, Nations Rethink Push Into Euro Zone
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02.09.10
Posted in All, Free blog Tips, economic, money, top tagged All, blogs, financial, people, world at 5:35 pm by carydalton
LINCOLNSHIRE, Ill. – Zebra Technologies Corp. made a profit in the fourth quarter, free of the one-time expenses that left it with a loss a year ago.
The company, which makes bar code and plastic card printers, also offered a first-quarter forecast above Wall Street expectations.
Its shares rose 7 cents to $27.41 in midday trading.
Zebra earned $17.6 million, or 30 cents per share, in the three months ended Dec. 31. It lost $117.4 million, or $1.88 per share, a year ago, when the company booked hefty charges related to restructuring and the falling value of its assets.
Zebra said the latest results included 3 cents per share in restructuring costs.
Revenue slipped 4 percent to $222.5 million from $232.6 million a year ago best payday advance.
Analysts polled by Thomson Reuters, who typically exclude one-time costs, expected lower earnings of 25 cents per share and lower revenue of $206.6 million.
Full-year earnings came to $47.1 million, or 79 cents per share, compared with a loss of $38.4 million, or 60 cents per share, in 2008. Revenue fell to $803.6 million from $976.7 million.
Zebra said it expects a first-quarter profit of 25 cents to 32 cents per share, including 2 cents worth of restructuring charges. It expects sales of between $217 million and $230 million.
Analysts expected 26 cents per share and $203.7 million.
Zebra posts 4Q profit of $17.6 million
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02.05.10
Posted in economic, news, online, shortly, world of money tagged economics, economy, newsreports, world, writing at 11:36 am by carydalton
PARIS — European markets slipped again Friday, after a sharp sell-off in Asia, amid continued worries about government debt in several European countries and about the state of the U.S. labor market.
The main markets in Europe had fallen between 1 and 2 percent in mid-morning trading, following sharper declines in Asia and on Wall Street Thursday. The Nikkei 225, Japan’s main market gauge, sagged 2.9 percent Friday.
Investor nervousness drew money into the Swiss franc, traditionally seen as safe have during times of distress, driving its value up against the euro to a 15-month high — and prompting a reported intervention by the Swiss National Bank.
The main worry in Europe remained the ability of Greece, Portugal, Ireland, Italy and Spain to rein in their rising deficits, which have been surging in the wake of national stimulus programs and after years of poor fiscal management.
“The market wants to accelerate an issue that the authorities were hoping that time would heal,” Deutsche Bank analysts said in a research note Friday. It added that the European authorities “will be forced to show more of their hands over the coming weeks or months,” suggesting financial support or guarantees from other euro countries was becoming more likely.
The yield on the benchmark 10-year bonds of Spain, Portugal., Ireland and Greece moved higher Friday, while those of Germany and France eased, suggesting funds were still flowing from the peripheral members of the euro-zone into the big core countries.
The FTSE-100 and the CAC-40 were both down more than 1.3 percent, paring sharper early gains, while the AEX index shed 1.7 percent in Amsterdam.
Futures on the Standard & Poor’s 500 Index lost 0.3 percent, suggesting a weaker start on Wall Street.
Adding to the anxiety was a bleaker-than-expected report on unemployment claims in the United States on Thursday, which once again spotlighted the fact the American recovery has yet to feed through to the beleaguered jobs market.
These jitters helped send the Dow Jones industrial index down 2.61 percent by the close of trade Thursday in New York, also dragging markets in the Asia-Pacific region down Friday.
Traders in Europe were also anticipating the release later Friday of the broad U.S. employment report for January.
Asian economies may be expanding more rapidly than those of the United States and Europe — Australia’s central bank on Friday said it expected economic growth there to continue to accelerate — but its stock markets also remain susceptible to global investor jitters fast cash loans.
In mainland China, the Shanghai Composite index sagged 1.9 percent. The market has dropped about 10 percent this year amid investor concerns that the authorities are now curbing bank loan growth in a bid to temper inflation.
The Straits Times index in Singapore lost 1.8 percent by late afternoon, while the Hang Seng index in Hong Kong and the Kospi in South Korea sagged more than 3 percent. The Taiex index in Taiwan ended down 4.3 percent.
In Australia, the main market gauge fell 2.3 percent.
“The ongoing weakness in the markets is largely due to sovereign default risk in the West, but this has even affected the developing markets in Asia,” said Puru Saxena, chief executive of Puru Saxena Wealth Management in Hong Kong in a note Friday.
Amid the worried about a possible bond defaults, the euro continued to weaken against the dollar and other currencies.
The euro was quoted at $1.3683 in London trading. In November, it was trading above $1.50.
Earlier in the day euro fell to a recent low of 1.4559 Swiss francs.
Reuters quoted several currency traders as saying the Swiss National Bank had been selling its currency during Asian trading. The central bank declined to comment.
The central bank has previously intervened to fight deflation and counter the risk of recession.
A research note from the European Equity Strategy at Barclays Capital said the greatest risks for stock investors lie with banks, telecommunication companies and utilities. It recommended investors switch into healthcare and food and beverages.
In London, ICAP, the largest broker of transactions between banks, fell 17 percent after cutting its profit forecast. Banco Santander of Spain fell 2.1 percent in Madrid, where the broader stock index was down 2 percent.
Rio Tinto Group, the mining giant, declined 3.6 percent.
In Tokyo, shares in Toyota bucked the downward trend, eking out a gain of 1.2 percent after upbeat results for the final quarter of 2009, released after the close of trade on Thursday.
But the car manufacturer’s troubles over the recalls of millions of cars are weighing heavily, and have caused the stock to plunge more than 20 percent since a recent high on Jan. 21.
Markets Sag in Europe After Sharp Sell-Off in Asia
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01.31.10
Posted in All, economic, money, online, top tagged All, blogs, markets, newsreports, opinion at 7:48 am by carydalton
LONDON – As captain of England’s national team, John Terry is used to appearing in the sports pages. But on Saturday, his picture was splashed across the front pages of Britain’s newspapers, and not because of his skill on the field.
A High Court judge lifted a court order Friday that had prevented the media from reporting allegations about Terry’s private life — a so-called “super injunction” which barred publication that any order even existed.
The court order related to a story about the 29-year-old Terry, who is married with two children, and his ties with another woman whom the judge did not name.
After the injunction was lifted, it wasn’t just the country’s famously racy tabloids that published page after page about the football (soccer) star — some of Britain’s more conservative broadsheet newspapers followed the story as well for its long-term impact on the country’s strict media laws.
Ambi Sitham, a media lawyer, called High Court judge Michael Tugendhat’s decision “hugely significant,” and said while those with legitimate privacy concerns would continue to be protected, people trying to escape scrutiny for other reasons won’t find relief in the courts.
“It’s a big red flag for high-profile people, who are increasingly using privacy law to keep sordid details out of the press,” she said.
In December, a similar injunction barred journalists in Britain from publishing material about Tiger Woods, even blocking the media from revealing the details of the order itself. Woods has since confessed to marital infidelities, lost millions as sponsorship deals evaporated, taken an unspecified amount of time off from professional golf and disappeared from public view.
Terry, whose past bad boy antics have been frequently chronicled by the press, never had the saintly reputation of Woods. Still, he is one of the sport’s highest-paid stars playing the world’s most popular game for one of the most renowned clubs — Chelsea — in the English Premier League, the world’s wealthiest.
Britain doesn’t have a formal privacy law, but is a signatory to the European Convention on Human Rights. That guarantees the right to respect for privacy and family life, and this clause has been used repeatedly by celebrities to fight media exposes.
The position of England captain is highly prestigious in Britain — David Beckham was the team’s previous leader. Terry had been working on his image after a series of damaging incidents and last year was named “Dad of the Year” by a condiments company.
The injunction was granted Jan. 22 after Terry learned that a newspaper was about to publish a story about his private life.
Tugendhat, however, said Terry appeared more concerned about the effect that publication of the allegations might have on his public image rather than his private life, saying the “claim is essentially a business matter.”
Terry — who is identified as LNS in the judgment — has several sponsorship deals on top of his reported weekly salary of 170,000 pounds ($275,000; euro197,000) with Chelsea.
“I have reached the view that it is likely that the nub of LNS’s complaint in this case is the protection of reputation, and not of any other aspect of LNS’s private life,” the judgment says payday loan in advance. “The real basis for the concern of LNS is likely to be the impact of any adverse publicity upon the business of earning sponsorship and similar income.”
The judge did say the woman in question was “a famous person” but not from the sporting world — and not as famous as Terry. British papers on Saturday reported that the woman was a model who already had a son with one of Terry’s former teammates, a player who may also be chosen for England’s World Cup team.
His team, Chelsea, has called the situation “a personal matter” and said they would give Terry and his family “all the support they need in dealing with it.”
Much speculation Saturday focused on how the allegations could affect Terry’s position on the England team and its run at the World Cup this summer in South Africa. Coach Fabio Capello has instilled a strict disciplinary code within the squad, and could pull the captaincy from Terry if he thought his off-field behavior might affect the team.
“The daily headlines will continue to question his fitness to lead. In Fleet Street parlance, this story has legs and will run and run,” sports columnist Henry Winter wrote in the Daily Telegraph. “If it seems that Terry’s conduct and continued ownership of the captain’s armband affects morale going into a World Cup, then Capello has no choice. Terry should go.”
Terry has played for Chelsea his entire career. The Blues fended off an attempt by Manchester City to sign him last year by giving him a pay rise that reportedly made him the highest-paid player in the Premier League.
Appointed Chelsea captain in 2004, he has won two Premier League titles, three FA Cups and two League Cups in the most successful period in the club’s history.
He was first choice in central defense for England at the 2004 European Championship and 2006 World Cup, after which he was named national team captain when Beckham relinquished the role.
But allegations of off-field transgressions have followed him throughout his career. He was fined by Chelsea after he and three teammates drunkenly abused American guests at a hotel the day after the 9/11 terrorist attacks. Terry has also been ejected from nightclubs and newspapers have accused him of infidelities several times.
But Terry has retained the England captaincy, even after the country’s failure to reach the 2008 European Championship, and appeared in advertisements for Samsung and sportswear manufacturer Umbro.
Despite speculation that he might hide out after all the bad publicity, Terry started in his team’s game Saturday. He was booed by fans but scored the winning goal in Chelsea’s 2-1 victory over Burnley, keeping his team on top of the Premier League.
“He is a fantastic player,” Chelsea coach Carlo Ancelotti said after the game. “That is his private life. He is about work. We don’t have to say nothing because he is very professional.”
___
Associated Press sports writer Stuart Condie contributed to this report from London.
UK court lifts media ban on soccer star’s life
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01.27.10
Posted in .com, economic, news, shortly, world of money tagged economics, financial, money, people, world at 8:00 am by carydalton
SAN FRANCISCO – Williams-Sonoma says its longtime chief, Howard Lester, will retire from the posts of CEO and chairman after 31 years leading kitchenware retailer.
After his retirement in May, Lester will continue to be an adviser to the company until December 2012 as chairman emeritus, Williams-Sonoma Inc. said Tuesday.
Lester has run the San Francisco company since 1978, when he bought it from founder Chuck Williams and it had four retail stores no fax pay day loans. It now has more than 600 stores in the U.S., Canada and Puerto Rico; it also owns the upscale Pottery Barn and West Elm housewares chains.
The company’s board plans to appoint Laura Alber its new CEO. She joined the company in 1995 and is now president.
Williams-Sonoma says longtime CEO Lester to retire
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01.24.10
Posted in .com, All, business, economic, online tagged finance, life, personal, politics, world at 3:36 pm by carydalton
Wall Street tumbled for a third day on Friday as a three-day slide pushed the markets down almost 5 percent. For the Dow, Friday was the lowest close since early November.
For a second day, shares declined on concerns about President Obama’s proposal for tighter restrictions on the activity of banks as the markets finished the week with a three-day losing streak.
The president on Thursday proposed to ban banks with federally insured deposits from casting risky bets in the markets, and to resist further consolidation in the financial industry — moves the caught bankers and traders by surprise.
In response, the Dow Jones industrial average fell more than 200 points on Thursday. Declines in Asian and European markets followed and then carried over a second day Wall Street. Concerns of earnings sent shares lower on Wednesday.
At the close, the Dow Jones industrial average was down 216.90 points, or 2.1 percent, at 10,172.98. The broader Standard & Poor’s 500-stock index fell 24.73 points or 2.2 percent, to 1,091.75, while the technology-heavy Nasdaq composite fell 60.41 points or 2.67 percent, at 2,205.29. For the week, the Dow was down about 4.1 percent.
Quincy M. Krosby, a markets strategist at Prudential Financial, said investors were also weighing news that Ben S. Bernanke’s confirmation for a second term as chairman of the Federal Reserve faced growing opposition.
“What they’re sensing is this has taken on a political visceral momentum,” Ms. Krosby said. “They makes them hesitant about the future of the banking system.”
As they did on Thursday, financial shares led the decline. On Wall Street, shares of Morgan Stanley declined 6.3 percent; Goldman Sachs dropped 5.2 percent; Bank of America, 4.5 percent; and Citigroup, 1 percent. In Europe, Barclays lost 6 percent. UBS of Switzerland was off 5.1 percent, while Santander of Spain gave up 3 percent.
“There’s no doubt that there will be a significant amount of regulation in the banking industry in the next year,“ said Henk Potts, equity strategist at Barclays Wealth in London. “But there’s a long road to travel and lots of discussions and negotiations before we find out exactly what this will entail no fax payday loan.”
Questions about the banks, analysts said, could push the markets into another period of uncertainty.
Other analysts saw President Obama’s announcement of tighter banking rules was taken as a sign that government leaders are looking beyond the financial crisis.
“It’s clear that politicians are starting to have enough confidence that the global economy has been saved and are starting to try to find ways of paying the bills,” analysts at Deutsche Bank said Friday in a research note. “The risk is that they do this too early and the timing of this announcement is unfortunate given it coincides with the escalation of problems in peripheral Europe and in a week where China has effectively tightened policy.”
The comments about peripheral Europe were a reference to the budgetary problems in Greece that have rattled bond markets here.
Earnings from two companies helped to offset some of the declines. General Electric topped expectations despite a 19 percent drop in fourth-quarter income. For the quarter, G.E. posted net income of $2.94 billion, or 28 cents a share. That compared with $3.65 billion, or 35 cents, a year earlier.
And the fast-food restaurant chain, McDonald’s said fourth-quarter profit was $1.22 billion, or $1.11 a share, up from $985.3 million, or 87 cents a share, a year earlier. The company said sales overseas had helped to offset a weakness in American sales. G.E. shares were up 1 percent and McDonald’s rose 0.35 percent.
Markets in Europe were also lower. In London, the FTSE 100 was down 32.11 points or 0.6 percent, and the DAX shed 51.65 points, or 0.9 percent, in Frankfurt.
In Asia, the Nikkei 225 index, Japan’s leading market gauge, led the region’s declines with a drop of 2.56 percent. The Shanghai composite index in mainland China fell nearly 1 percent, while the Hang Seng index in Hong Kong dropped 0.6 percent, with the international banks Standard Chartered and HSBC both down.
Bettina Wassener reported from Hong Kong and Matthew Saltmarsh from Paris.
3-Day Slide Sends Markets Down About 5 Percent
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01.23.10
Posted in .com, economic, money, news, top tagged All, events, money, opinion, work at 1:29 am by carydalton
ELYRIA, Ohio – A combative President Barack Obama exhorted Congress Friday to pass a new job-creation bill, taking a populist appeal to America’s recession-racked Rust Belt in hopes of recapturing the energy of his campaign and moving his presidency beyond this week’s blows.
Obama weaved angry us-against-them rhetoric throughout the day, telling a town hall audience that he “will never stop fighting” for an economy that works for the hard-working, not just those already well off.
“This isn’t about me. This is about you,” Obama shouted in a rousing defense of his presidency and not-so-subtle slaps at his critics. “I think that I win when you win. That’s how I think about it.”
He said a jobs bill emerging in Congress must include tax breaks for small business hiring and for people trying to make their homes more energy efficient — two proposals he wasn’t able to get into a bill the House passed last month. And he used the word “fight” or some variation of it well over a dozen times. The House-passed $174 billion stimulus package faces a stern test in the Senate, in part because it is financed with deficit spending.
With the town hall meeting, tours of a factory and classroom, an impromptu diner stop and even the lack of a necktie, Obama’s day had the feel of one from his campaign. Followed by campaign videographers, he grinned, bantered and joked through the snowy scenery, a far cry from his more somber demeanor of late.
The upset win by Republican Scott Brown in a special Massachusetts Senate election this week — a victory spurred in large part by an anti-establishment sentiment — badly stung the White House and prompted awareness that neither Obama’s agenda nor the electoral prospects for fellow Democrats this fall can be taken for granted.
So in his at the town hall meeting at Lorain County Community College near Cleveland, the president assailed Washington and Wall Street alike, hoping to connect with public’s frustration and position himself as the solution — not the problem.
He strongly defended unpopular actions he has taken to bail out banks and insurers and to rescue automakers from collapse. Such measures have not gone over well in many quarters, derided as expanding government and swelling the deficit while many on Main Street still walk unemployment lines.
Obama said propping up the financial industry was as much about regular Americans as wealthy bankers. “If the financial system had gone down, it would have taken the entire economy and millions more families and businesses with it,” he argued on line pay day loans.
Similarly, allowing GM and Chrysler to go under might have satisfied calls to force businesses to reap the consequences of bad decisions.
But he also said, “Hundreds of thousands of Americans would have been hurt, not just at those companies, but at auto suppliers and other companies and dealers here in Michigan — here in Ohio — up in Michigan and all across this country.”
Obama made a repeated point of criticizing Washington, too — saying that one can get a “pretty warped view of things” from inside the capital city, targeting special interest power and mocking the popular parlor game of handicapping his presidency.
“Is he weakened? Oh, how is he going to survive this?” he joked. “That’s what they do.”
He sought to demonstrate understanding for the economic uncertainty that lingers in many American homes and businesses despite some economic improvements.
“Folks have seen jobs you thought would last forever disappear. You’ve seen plants close and businesses shut down,” Obama said.
He promised to help. “I won’t stop fighting for you,” he said. “I’ll take my lumps.”
He acknowledged “we got a little bit of a buzz saw” on health care overhaul. But he said his pursuit of sweeping overhaul was — and still is — the right thing to do even amid war and economic crisis. “I am not going to walk away just because it’s hard.”
The choice of Ohio was no accident.
It has unemployment slightly higher than the national average, with the state reporting before Obama landed in Cleveland that its rate had ticked upward in December, to 10.9 percent from 10.6 percent the month before. The national rate was 10 percent in December.
Ohio is also a political must-win — a state Obama won in 2008 and probably must win again if he is to get a second White House term.
Across the street from the community college were groups of anti-Obama protesters.
“He’s done a lot, but they are all negative things,” said Ray Angell, 65, of Twinsburg, Ohio, a conservative active in the anti-tax Tea Party movement, mentioning the stimulus package and climate change proposals.
___
Associated Press writer Thomas J. Sheeran contributed to this story.
Defiant Obama urges Congress to pass jobs bill
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