Check out the Bureau of Labor Statistics CPI Report here.
From USA Today:
Consumer prices in August fell for the first time in 10 months as another big drop in energy costs offset higher food prices.
The Labor Department reported Wednesday that its closely watched consumer price index dipped 0.1% last month, slightly better than the flat reading that had been expected. It was the first decline in consumer prices since a 0.4% fall in October.
Overall inflation through August is rising at an annual rate of 3.7%, up from a 2.5% increase for all of 2006.
n addition to higher food costs, consumers have also been hit by surging energy prices, which are up 12.7% at an annual rate this year, even with the declines in the past three months. Analysts are worried that further price increases are in the pipeline given the fact that oil prices have now surged to record levels above $80 a barrel.
Core inflation, which the Fed closely monitors, is better behaved this year, rising at an annual rate of 2.3% through August, down from an increase of 2.6% for all of 2006.
The price of medical care continued to surge, rising 0.5% in August. Medical costs are up 4.5% over the past year.
Wednesday, September 19, 2007
Tuesday, September 18, 2007
OIL TOPS $82 PER BARREL
You can check the current price by clicking here.
From USA Today:
Oil futures rose to records Tuesday after the Federal Reserve cut interest rates by a larger-than-expected half percentage point, raising market hopes that economic growth will accelerate and lift demand even as crude oil and gasoline inventories are tight.
A barrel of crude surged to a new trading high of $81.90 on the New York Mercantile Exchange in the moments immediately after the Fed's decision.
Investors had already priced a quarter-point cut in the benchmark federal funds rate into the market, said Brad Samples, a commodities analyst at Summit Energy Services in Louisville The half-point cut spurred even more buying.
Moreover, many analysts see a weaker dollar as a natural side effect of lower rates, and that could promote buying of oil contracts by foreign investors.
"Lower interest rates have the unintended consequence of raising oil prices if the dollar declines relative to other currencies," said Larry Chorn, chief economist at Platts, the energy research arm of McGraw-Hill, in a statement.
"Seen through a euro or yen prism, nominal (New York Mercantile Exchange crude) prices have yet to reach their 2006 highs," said Antoine Halff, head of energy research at Fimat USA, in a research note.
From USA Today:
Oil futures rose to records Tuesday after the Federal Reserve cut interest rates by a larger-than-expected half percentage point, raising market hopes that economic growth will accelerate and lift demand even as crude oil and gasoline inventories are tight.
A barrel of crude surged to a new trading high of $81.90 on the New York Mercantile Exchange in the moments immediately after the Fed's decision.
Investors had already priced a quarter-point cut in the benchmark federal funds rate into the market, said Brad Samples, a commodities analyst at Summit Energy Services in Louisville The half-point cut spurred even more buying.
Moreover, many analysts see a weaker dollar as a natural side effect of lower rates, and that could promote buying of oil contracts by foreign investors.
"Lower interest rates have the unintended consequence of raising oil prices if the dollar declines relative to other currencies," said Larry Chorn, chief economist at Platts, the energy research arm of McGraw-Hill, in a statement.
"Seen through a euro or yen prism, nominal (New York Mercantile Exchange crude) prices have yet to reach their 2006 highs," said Antoine Halff, head of energy research at Fimat USA, in a research note.
FED MAKES HALF-POINT CUT
From USA Today:
The Federal Reserve cut interest rates a half-percentage point Tuesday in a dramatic bid to shore up confidence in the economy and ease worries about a credit crunch in financial markets.
Fed Chairman Ben Bernanke and his colleagues unanimously voted to lower their target for short-term interest rates, which influences a wide variety of borrowing costs, to 4.75% from 5.25%. The cut was the first from the Fed in more than four years and followed 15 months of steady rates from the central bank.
In their post-meeting statement, Fed policymakers said the credit squeeze "has the potential" to sharpen the housing decline and harm the larger economy. They said turmoil in financial markets had "increased the uncertainty" about the economic outlook.
"Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time," they wrote.
The Fed on Tuesday also cut the discount rate, the rate it charges banks for direct loans, by a half-percentage point, in a move to facilitate lending. A month ago, the Fed, in a rare move, cut the discount rate, which usually moves in tandem with the Fed's main interest rate lever, to help ease the credit crunch.
Financial markets moved sharply higher in response to the Fed move Tuesday, with the Dow Jones industrials adding more than 100 points within minutes of the Fed announcement. They closed up more than 300.
The Federal Reserve cut interest rates a half-percentage point Tuesday in a dramatic bid to shore up confidence in the economy and ease worries about a credit crunch in financial markets.
Fed Chairman Ben Bernanke and his colleagues unanimously voted to lower their target for short-term interest rates, which influences a wide variety of borrowing costs, to 4.75% from 5.25%. The cut was the first from the Fed in more than four years and followed 15 months of steady rates from the central bank.
In their post-meeting statement, Fed policymakers said the credit squeeze "has the potential" to sharpen the housing decline and harm the larger economy. They said turmoil in financial markets had "increased the uncertainty" about the economic outlook.
"Today's action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets and to promote moderate growth over time," they wrote.
The Fed on Tuesday also cut the discount rate, the rate it charges banks for direct loans, by a half-percentage point, in a move to facilitate lending. A month ago, the Fed, in a rare move, cut the discount rate, which usually moves in tandem with the Fed's main interest rate lever, to help ease the credit crunch.
Financial markets moved sharply higher in response to the Fed move Tuesday, with the Dow Jones industrials adding more than 100 points within minutes of the Fed announcement. They closed up more than 300.
Monday, September 17, 2007
EUROPEAN COURT DENIES MICROSOFT APPEAL
From the International Herald Tribune:
The second-highest court in Europe on Monday rejected Microsoft's attempt to overturn a landmark European Commission antitrust ruling and record fine, bolstering smaller software makers and putting market leaders on notice that they cannot leverage dominance in one technology niche to squelch broader innovation, industry and legal experts said.
The European Court of First Instance, in a starkly worded summary, ordered Microsoft to obey a 2004 commission order to share confidential computer code with competitors. The court also upheld the record fine of €497.2 million, or $690 million, against the world's largest software maker.
Software and legal experts said the court's decision may signal problems for companies like Apple, Intel and Qualcomm, whose market dominance in online music downloads, computer chips and mobile phone technology is also being scrutinized by the commission. The ruling also could make it harder for Microsoft to continue "bundling" new features into its Windows software.
Microsoft's allies said the court's decision, which expressly forbids the company's policy of bundling new extras into its Windows operating system, will have a chilling effect on the strategies of many global software makers.
"This ruling is certainly going to introduce a lot of uncertainty," said Jonathan Zuck, president of the Association for Competitive Technology, a Washington-based group that supported Microsoft in its legal case in Europe. "What the court is basically saying is that if you develop a successful product and get too big, the European Commission is going to force you to give away your intellectual property."
When Microsoft wants to put handwriting and speech recognition features or stronger anti-virus and other security software into the Windows operating system, competitors can complain to European authorities, even though the European unbundling order in the media player case - compelling Microsoft to offer a version of Windows in Europe without the media player but with no difference in price - was a failure.
Microsoft has already been forced to pay nearly €1 billion in fines in the long-running legal case, which has pitted the software maker against the commission and a host of competitors, including International Business Machines and Novell.
After Sun filed the initial complaint in 1998, the commission later expanded its inquiry to include Microsoft's practice of bundling its Windows Media Player into the Windows operating system. After Microsoft began bundling its media player into Windows, it overtook the market leader, RealNetworks.
Microsoft has been repeatedly fined by the commission since the 2004 antitrust ruling for failing to adequately disclose server software coding.
During the course of the litigation, Kroes said in Brussels that Microsoft's share of the market in workgroup servers had risen to 80 percent from 40 percent and that Windows Media Player had come to dominate the market.
She highlighted the fact that Microsoft had 95 percent of the world market for desktop operating systems and said she would like to see that share decline.
"You can't draw a line and say exactly 50 percent is correct, but a significant drop in market share is what we would like to see," she said. "Microsoft cannot regulate the market by imposing its products and its services on people."
The second-highest court in Europe on Monday rejected Microsoft's attempt to overturn a landmark European Commission antitrust ruling and record fine, bolstering smaller software makers and putting market leaders on notice that they cannot leverage dominance in one technology niche to squelch broader innovation, industry and legal experts said.
The European Court of First Instance, in a starkly worded summary, ordered Microsoft to obey a 2004 commission order to share confidential computer code with competitors. The court also upheld the record fine of €497.2 million, or $690 million, against the world's largest software maker.
Software and legal experts said the court's decision may signal problems for companies like Apple, Intel and Qualcomm, whose market dominance in online music downloads, computer chips and mobile phone technology is also being scrutinized by the commission. The ruling also could make it harder for Microsoft to continue "bundling" new features into its Windows software.
Microsoft's allies said the court's decision, which expressly forbids the company's policy of bundling new extras into its Windows operating system, will have a chilling effect on the strategies of many global software makers.
"This ruling is certainly going to introduce a lot of uncertainty," said Jonathan Zuck, president of the Association for Competitive Technology, a Washington-based group that supported Microsoft in its legal case in Europe. "What the court is basically saying is that if you develop a successful product and get too big, the European Commission is going to force you to give away your intellectual property."
When Microsoft wants to put handwriting and speech recognition features or stronger anti-virus and other security software into the Windows operating system, competitors can complain to European authorities, even though the European unbundling order in the media player case - compelling Microsoft to offer a version of Windows in Europe without the media player but with no difference in price - was a failure.
Microsoft has already been forced to pay nearly €1 billion in fines in the long-running legal case, which has pitted the software maker against the commission and a host of competitors, including International Business Machines and Novell.
After Sun filed the initial complaint in 1998, the commission later expanded its inquiry to include Microsoft's practice of bundling its Windows Media Player into the Windows operating system. After Microsoft began bundling its media player into Windows, it overtook the market leader, RealNetworks.
Microsoft has been repeatedly fined by the commission since the 2004 antitrust ruling for failing to adequately disclose server software coding.
During the course of the litigation, Kroes said in Brussels that Microsoft's share of the market in workgroup servers had risen to 80 percent from 40 percent and that Windows Media Player had come to dominate the market.
She highlighted the fact that Microsoft had 95 percent of the world market for desktop operating systems and said she would like to see that share decline.
"You can't draw a line and say exactly 50 percent is correct, but a significant drop in market share is what we would like to see," she said. "Microsoft cannot regulate the market by imposing its products and its services on people."
Sunday, September 16, 2007
IS THE U.S. DOLLAR IN SERIOUS TROUBLE?
From the International Herald Tribune:
Finance ministers and central bankers have long fretted that at some point, the rest of the world would lose its willingness to finance the United States' proclivity to consume far more than it produces - and that a potentially disastrous free-fall in the dollar's value would result.
But for longer than most economists would have been willing to predict a decade ago, the world has been a willing partner in American excess - until a new and home-grown financial crisis this summer rattled confidence in the country, the world's largest economy.
On Thursday, the dollar briefly fell to another low against the euro of $1.3927, as a slow decline that has been under way for months picked up steam this past week.
"This is all pointing to a greatly increased risk of a fast unwinding of the U.S. current account deficit and a serious decline of the dollar," said Kenneth Rogoff, a former chief economist at the International Monetary Fund and an expert on exchange rates. "We could finally see the big kahuna hit."
So long as Americans buy more than they earn from exports - and they did, creating a current account deficit of $850 billion last year - the rest of the world financed the binge by bringing dollars into the United States for investment in stocks, bonds, real estate or other assets, thereby preserving demand for the dollar.
While most economists just a few months ago would have dismissed the prospect of a dollar collapse outright, they now are debating the possibility that something on par with the dollar debacle of the 1970s might just happen again.
When a currency collapses, the central bank can push up interest rates to attract needed investment, but strangle the economy in the process. Alternatively, it can let the currency fall and watch prices of imports - and eventually competing domestic goods - rise sharply.
Double-digit inflation resulted in the 1970s and only a global recession brought it to an end.
The European Central Bank put off an interest rate increase it had planned for September, but is still inclined to tighten credit at least one more time by the end of this year. By contrast, the U.S. Federal Reserve has hinted at a rate cut at its meeting next Tuesday - a step that would diminish the appeal of dollar-denominated assets, almost certainly sending the dollar lower.
Pressed to make an educated guess, most economists opt for calm, believing the dollar is unlikely to go into a tailspin even as they mark up the odds of one.
The major holders of dollars - notably the Chinese, with their $1.3 trillion in currency reserves - have little incentive to see the dollar weaken, and their support provides the dollar with a bulwark of strength. And since investors need to stay diversified, and U.S. markets are deep and liquid, abandoning the dollar wholesale is hardly a realistic option.
"Rather than a precipitous decline, we are probably be looking at a move steadily lower," said Simon Derrick, chief currency strategist at Bank of New York in London.
Finance ministers and central bankers have long fretted that at some point, the rest of the world would lose its willingness to finance the United States' proclivity to consume far more than it produces - and that a potentially disastrous free-fall in the dollar's value would result.
But for longer than most economists would have been willing to predict a decade ago, the world has been a willing partner in American excess - until a new and home-grown financial crisis this summer rattled confidence in the country, the world's largest economy.
On Thursday, the dollar briefly fell to another low against the euro of $1.3927, as a slow decline that has been under way for months picked up steam this past week.
"This is all pointing to a greatly increased risk of a fast unwinding of the U.S. current account deficit and a serious decline of the dollar," said Kenneth Rogoff, a former chief economist at the International Monetary Fund and an expert on exchange rates. "We could finally see the big kahuna hit."
So long as Americans buy more than they earn from exports - and they did, creating a current account deficit of $850 billion last year - the rest of the world financed the binge by bringing dollars into the United States for investment in stocks, bonds, real estate or other assets, thereby preserving demand for the dollar.
While most economists just a few months ago would have dismissed the prospect of a dollar collapse outright, they now are debating the possibility that something on par with the dollar debacle of the 1970s might just happen again.
When a currency collapses, the central bank can push up interest rates to attract needed investment, but strangle the economy in the process. Alternatively, it can let the currency fall and watch prices of imports - and eventually competing domestic goods - rise sharply.
Double-digit inflation resulted in the 1970s and only a global recession brought it to an end.
The European Central Bank put off an interest rate increase it had planned for September, but is still inclined to tighten credit at least one more time by the end of this year. By contrast, the U.S. Federal Reserve has hinted at a rate cut at its meeting next Tuesday - a step that would diminish the appeal of dollar-denominated assets, almost certainly sending the dollar lower.
Pressed to make an educated guess, most economists opt for calm, believing the dollar is unlikely to go into a tailspin even as they mark up the odds of one.
The major holders of dollars - notably the Chinese, with their $1.3 trillion in currency reserves - have little incentive to see the dollar weaken, and their support provides the dollar with a bulwark of strength. And since investors need to stay diversified, and U.S. markets are deep and liquid, abandoning the dollar wholesale is hardly a realistic option.
"Rather than a precipitous decline, we are probably be looking at a move steadily lower," said Simon Derrick, chief currency strategist at Bank of New York in London.
LIQUIDITY CONCERN CAUSES RUN ON BRITISH BANK
From the International Herald Tribune:
Hundreds of Northern Rock customers crowded into branches across Britain on Friday to pull out their savings after the mortgage-loan provider sought emergency funding from the Bank of England.
"It's scary," said Peter Pye, a 60-year-old retired university lecturer standing in a line of about 30 people outside the Moorgate branch in London's financial district. "I have my life's savings in Northern Rock."
Fears were sparked by the Bank of England's emergency loan to Northern Rock, Britain's eighth-largest listed bank, whose access to funds dried up as the cost of borrowing between banks rose in the broader credit crisis.
Deposit insurance from the Financial Services Compensation Scheme protects customers for up to £31,700 should a bank default.
In addition, the Bank of England said Northern Rock was solvent and only in need of short-term help. But many customers were not taking any chances.
Queues snaked through branches and spilled onto streets as tellers tried to soothe frazzled nerves. Some customers were satisfied by the lender's reassurances.
Northern Rock's Web site was also inundated, frustrating those who sought to withdraw funds. The bank had to restart the site "over a period of time" after unusually high usage froze the service, spokesman Don Hunter said.
"I've been trying to get my money out since 7 o'clock this morning and I'm failing," said customer Andrew Murphy." I appreciate that it's very unlikely to go bust but I don't want to take the risk with my savings."
"I don't think anything is going to happen because the Bank of England won't allow it to happen," said Paul Delamere, 46, waiting at Maddox Street to withdraw his money. Still, he was "more comfortable" with reducing his account.
Hundreds of Northern Rock customers crowded into branches across Britain on Friday to pull out their savings after the mortgage-loan provider sought emergency funding from the Bank of England.
"It's scary," said Peter Pye, a 60-year-old retired university lecturer standing in a line of about 30 people outside the Moorgate branch in London's financial district. "I have my life's savings in Northern Rock."
Fears were sparked by the Bank of England's emergency loan to Northern Rock, Britain's eighth-largest listed bank, whose access to funds dried up as the cost of borrowing between banks rose in the broader credit crisis.
Deposit insurance from the Financial Services Compensation Scheme protects customers for up to £31,700 should a bank default.
In addition, the Bank of England said Northern Rock was solvent and only in need of short-term help. But many customers were not taking any chances.
Queues snaked through branches and spilled onto streets as tellers tried to soothe frazzled nerves. Some customers were satisfied by the lender's reassurances.
Northern Rock's Web site was also inundated, frustrating those who sought to withdraw funds. The bank had to restart the site "over a period of time" after unusually high usage froze the service, spokesman Don Hunter said.
"I've been trying to get my money out since 7 o'clock this morning and I'm failing," said customer Andrew Murphy." I appreciate that it's very unlikely to go bust but I don't want to take the risk with my savings."
"I don't think anything is going to happen because the Bank of England won't allow it to happen," said Paul Delamere, 46, waiting at Maddox Street to withdraw his money. Still, he was "more comfortable" with reducing his account.
Saturday, September 15, 2007
GREENSPAN BOOK CRITICIZES BUSH AND REPUBLICANS FOR LACKING FISCAL DISCIPLINE
From The Wall Street Journal:
In a withering critique of his fellow Republicans, former Federal Reserve Chairman Alan Greenspan says in his memoir that the party to which he has belonged all his life deserved to lose power last year for forsaking its small-government principles.
In "The Age of Turbulence: Adventures in a New World," published by Penguin Press, Mr. Greenspan criticizes both congressional Republicans and President George W. Bush for abandoning fiscal discipline.
Mr. Greenspan, who calls himself a "lifelong libertarian Republican," writes that he advised the White House to veto some bills to curb "out-of-control" spending while the Republicans controlled Congress. He says President Bush's failure to do so "was a major mistake." Republicans in Congress, he writes, "swapped principle for power. They ended up with neither. They deserved to lose."
Mr. Greenspan writes that when President Bush chose Dick Cheney as vice president and Paul O'Neill as treasury secretary -- both colleagues from the Gerald Ford administration, during which Mr. Greenspan was chairman of the Council of Economic Advisers -- he "indulged in a bit of fantasy" that this would be the government that would have resulted if Mr. Ford hadn't lost to Jimmy Carter in 1976. But Mr. Greenspan discovered that in the Bush White House, the "political operation was far more dominant" than in Mr. Ford's. "Little value was placed on rigorous economic policy debate or the weighing of long-term consequences," he writes.
From serving under so many presidents, Mr. Greenspan concludes that there's something abnormal about anyone willing to do what it takes to get the job. Mr. Ford, he writes, "was as close to normal as you get in a president, but he was never elected." The Watergate tapes, he says, show Richard Nixon as "an extremely smart man who is sadly paranoid, misanthropic and cynical." He recalls telling someone who had accused Nixon of anti-Semitism that he "wasn't exclusively anti-Semitic. He was anti-Semitic, anti-Italian, anti-Greek, anti-Slovak. I don't know anybody he was pro."
Ronald Reagan's ability to instantly tap one-liners and anecdotes in support of a particular policy represented an "odd form of intelligence." He describes Bill Clinton as "a fellow information hound" with "a consistent, disciplined focus on long-term economic growth" whose relationship with Monica Lewinsky "made me feel disappointed and sad."
Mr. Greenspan retired in early 2006 after 18 years as chairman of the Federal Reserve. He had served under six presidents as either Fed chairman or adviser. He now runs a private consulting company; his only formal public role is adviser to British Prime Minister Gordon Brown.
In a withering critique of his fellow Republicans, former Federal Reserve Chairman Alan Greenspan says in his memoir that the party to which he has belonged all his life deserved to lose power last year for forsaking its small-government principles.
In "The Age of Turbulence: Adventures in a New World," published by Penguin Press, Mr. Greenspan criticizes both congressional Republicans and President George W. Bush for abandoning fiscal discipline.
Mr. Greenspan, who calls himself a "lifelong libertarian Republican," writes that he advised the White House to veto some bills to curb "out-of-control" spending while the Republicans controlled Congress. He says President Bush's failure to do so "was a major mistake." Republicans in Congress, he writes, "swapped principle for power. They ended up with neither. They deserved to lose."
Mr. Greenspan writes that when President Bush chose Dick Cheney as vice president and Paul O'Neill as treasury secretary -- both colleagues from the Gerald Ford administration, during which Mr. Greenspan was chairman of the Council of Economic Advisers -- he "indulged in a bit of fantasy" that this would be the government that would have resulted if Mr. Ford hadn't lost to Jimmy Carter in 1976. But Mr. Greenspan discovered that in the Bush White House, the "political operation was far more dominant" than in Mr. Ford's. "Little value was placed on rigorous economic policy debate or the weighing of long-term consequences," he writes.
From serving under so many presidents, Mr. Greenspan concludes that there's something abnormal about anyone willing to do what it takes to get the job. Mr. Ford, he writes, "was as close to normal as you get in a president, but he was never elected." The Watergate tapes, he says, show Richard Nixon as "an extremely smart man who is sadly paranoid, misanthropic and cynical." He recalls telling someone who had accused Nixon of anti-Semitism that he "wasn't exclusively anti-Semitic. He was anti-Semitic, anti-Italian, anti-Greek, anti-Slovak. I don't know anybody he was pro."
Ronald Reagan's ability to instantly tap one-liners and anecdotes in support of a particular policy represented an "odd form of intelligence." He describes Bill Clinton as "a fellow information hound" with "a consistent, disciplined focus on long-term economic growth" whose relationship with Monica Lewinsky "made me feel disappointed and sad."
Mr. Greenspan retired in early 2006 after 18 years as chairman of the Federal Reserve. He had served under six presidents as either Fed chairman or adviser. He now runs a private consulting company; his only formal public role is adviser to British Prime Minister Gordon Brown.
Wednesday, September 12, 2007
UCLA ANDERSON FORECAST PREDICTS ECONOMIC SLOWDOWN
From AP via MSNBC:
Ongoing weakness in the housing market will push the national economy to the brink of recession, but growth in other areas should put the country back on a slow road to recovery by 2009, according to an economic forecast released Wednesday.
The quarterly Anderson Forecast by the University of California at Los Angeles predicts growth in the gross domestic product of just over 1 percent for the fourth quarter of 2007 and first quarter of 2008.
Economic growth will remain “tepid” for the remainder of 2008 and return to 3 percent in 2009, said David Shulman, senior economist for the forecast.
Shulman lowered his forecast for housing starts to an annual rate of about 1 million to 1.1 million, down from a range of 1.2 million to 1.3 million.
That outlook is less optimistic than one presented Tuesday by the National Association of Realtors, which projected construction of new homes will fall to 1.4 million this year from 1.8 million last year.
Shulman also expects housing prices to plunge 10 percent to 15 percent before they start to recover, sometime in 2009.
Ongoing weakness in the housing market will push the national economy to the brink of recession, but growth in other areas should put the country back on a slow road to recovery by 2009, according to an economic forecast released Wednesday.
The quarterly Anderson Forecast by the University of California at Los Angeles predicts growth in the gross domestic product of just over 1 percent for the fourth quarter of 2007 and first quarter of 2008.
Economic growth will remain “tepid” for the remainder of 2008 and return to 3 percent in 2009, said David Shulman, senior economist for the forecast.
Shulman lowered his forecast for housing starts to an annual rate of about 1 million to 1.1 million, down from a range of 1.2 million to 1.3 million.
That outlook is less optimistic than one presented Tuesday by the National Association of Realtors, which projected construction of new homes will fall to 1.4 million this year from 1.8 million last year.
Shulman also expects housing prices to plunge 10 percent to 15 percent before they start to recover, sometime in 2009.
Tuesday, September 11, 2007
OPEC CONSIDERS PRODUCTION INCREASE AS OIL TOPS $77 PER BARREL
From Reuters:
OPEC was meeting on Tuesday to consider a modest rise in oil output proposed by Saudi Arabia and other Gulf Arab states in a gesture to consumers worried by the economic impact of $77 oil and rapidly diminishing stocks.
But the plan to add 500,000 barrels per day of oil had yet to convince all OPEC ministers and discussions were continuing, a delegate said. Venezuela, Algeria and Libya said ahead of the talks they were not in support of increasing supplies.
Industrialized consumer nations are forecasting their crude oil stocks will fall to the bottom of the five-year average range by January unless OPEC pumps more crude oil, and fast.
U.S. crude oil is above $77, close to its August 1 record high of $78.77 a barrel, following attacks on oil and natural gas pipelines in Mexico, the world's fifth largest crude exporter.
OPEC was meeting on Tuesday to consider a modest rise in oil output proposed by Saudi Arabia and other Gulf Arab states in a gesture to consumers worried by the economic impact of $77 oil and rapidly diminishing stocks.
But the plan to add 500,000 barrels per day of oil had yet to convince all OPEC ministers and discussions were continuing, a delegate said. Venezuela, Algeria and Libya said ahead of the talks they were not in support of increasing supplies.
Industrialized consumer nations are forecasting their crude oil stocks will fall to the bottom of the five-year average range by January unless OPEC pumps more crude oil, and fast.
U.S. crude oil is above $77, close to its August 1 record high of $78.77 a barrel, following attacks on oil and natural gas pipelines in Mexico, the world's fifth largest crude exporter.
Monday, September 10, 2007
BUSINESSES PROVIDE INCENTIVES FOR WORKERS TO REDUCE HEALTH RISKS
From AP via MSNBC:
First they tried nudging. Now companies are penalizing workers who have high health risks such as obesity and high blood pressure or cholesterol as insurance costs climb.
A small number of companies have linked health factors to what employees pay for benefits, but the practice is expected to grow now that some federal rules have been finalized, spelling out what’s allowed by law. Employee advocates worry that other anti-discrimination laws such as the Americans with Disabilities Act won’t cover the person who is 20 or 30 pounds overweight.
The businesses are deducting from employees’ paychecks, adding insurance surcharges or offering insurance discounts or rebates only to low-risk workers.
“Employers know they have to do something,” said Garry Mathiason, a senior partner at the national employment and labor law firm Littler Mendelson, based in Boston. “I believe that in just the next two years more employers will turn to penalties to change employee behavior.”
A 2003-2004 National Health and Nutrition Examination Survey showed about two-thirds of adults in the United States were overweight and almost one-third obese. A U.S. surgeon general’s report said health care costs of obesity totaled more than $117 billion in 2000.
First they tried nudging. Now companies are penalizing workers who have high health risks such as obesity and high blood pressure or cholesterol as insurance costs climb.
A small number of companies have linked health factors to what employees pay for benefits, but the practice is expected to grow now that some federal rules have been finalized, spelling out what’s allowed by law. Employee advocates worry that other anti-discrimination laws such as the Americans with Disabilities Act won’t cover the person who is 20 or 30 pounds overweight.
The businesses are deducting from employees’ paychecks, adding insurance surcharges or offering insurance discounts or rebates only to low-risk workers.
“Employers know they have to do something,” said Garry Mathiason, a senior partner at the national employment and labor law firm Littler Mendelson, based in Boston. “I believe that in just the next two years more employers will turn to penalties to change employee behavior.”
A 2003-2004 National Health and Nutrition Examination Survey showed about two-thirds of adults in the United States were overweight and almost one-third obese. A U.S. surgeon general’s report said health care costs of obesity totaled more than $117 billion in 2000.
FED EXPECTED TO LOWER INTEREST RATES
From USA Today:
The Federal Reserve will lower interest rates by half a percentage point by March in the face of sluggish economic growth, according to a survey of economists from the National Association of Business Economics released Monday.
The survey, reflecting the estimates of 46 economists, was taken Aug 2-23.
The economists forecast a 50-basis-point cut in the federal funds rate by the end of the first quarter of 2008, up from May's forecast of 25 basis points.
The Fed is scheduled to meet next on Sept. 18.
The Federal Reserve will lower interest rates by half a percentage point by March in the face of sluggish economic growth, according to a survey of economists from the National Association of Business Economics released Monday.
The survey, reflecting the estimates of 46 economists, was taken Aug 2-23.
The economists forecast a 50-basis-point cut in the federal funds rate by the end of the first quarter of 2008, up from May's forecast of 25 basis points.
The Fed is scheduled to meet next on Sept. 18.
Friday, September 07, 2007
33% OF ECONOMISTS POLLED PREDICT RECESSION WITHIN NEXT YEAR
From MSNBC:
Before the meltdown in the credit markets last month, the Blue Chip (a financial newsletter) consensus pegged the odds of recession in the next year at about one in four. That number recently jumped to one in three, according to Randell Moore, the newsletter’s editor.
The growing signs of economic strain have consumers feeling more pessimistic — especially since most no longer have rising equity in their home to help fund their shopping trips. Consumer confidence dropped sharply in August, based on a widely watched University of Michigan survey.
-----
You can view the University of Michigan survey here.
You can view the Conference Board survey here.
Before the meltdown in the credit markets last month, the Blue Chip (a financial newsletter) consensus pegged the odds of recession in the next year at about one in four. That number recently jumped to one in three, according to Randell Moore, the newsletter’s editor.
The growing signs of economic strain have consumers feeling more pessimistic — especially since most no longer have rising equity in their home to help fund their shopping trips. Consumer confidence dropped sharply in August, based on a widely watched University of Michigan survey.
-----
You can view the University of Michigan survey here.
You can view the Conference Board survey here.
RECORD FORECLOSURES REPORTED
Check out this chart that accompanies the story below for mortgage delinquency and foreclosure statistics for every state.
In Illinois there are 1.67 million mortgages listed with 5.09% past due and 1.05% more than 90 days so.
From USA Today:
With a warning that the worst is yet to come, the Mortgage Bankers Association said Thursday that lenders began foreclosure proceedings on a record number of homes this spring.
The turmoil in the mortgage market poses multiple threats, the MBA says. Foreclosures are likely to rise for at least another year. A bigger supply of homes in foreclosure would weaken prices in many areas. And people behind on loans will find it harder to refinance.
For all loan types, 5% of borrowers — nearly 2.5 million people — missed at least one payment last quarter. That's up from 4.4% in the same period last year.
The problems appear to be focused in seven states. Job losses in Michigan, Ohio and Indiana have depressed housing there. Those three states account for nearly 20% of the nation's homes in foreclosure.
And a rising number of defaults in four states — California, Nevada, Florida and Arizona — is largely why the U.S. delinquency rate is up. As home prices there fall, more people are in the upside-down position of owing more on their loans than their homes are worth.
California accounted for more than 17% of the subprime ARMs in the country and for more than 19% of the new foreclosures in the second quarter, the MBA says.
In Illinois there are 1.67 million mortgages listed with 5.09% past due and 1.05% more than 90 days so.
From USA Today:
With a warning that the worst is yet to come, the Mortgage Bankers Association said Thursday that lenders began foreclosure proceedings on a record number of homes this spring.
The turmoil in the mortgage market poses multiple threats, the MBA says. Foreclosures are likely to rise for at least another year. A bigger supply of homes in foreclosure would weaken prices in many areas. And people behind on loans will find it harder to refinance.
For all loan types, 5% of borrowers — nearly 2.5 million people — missed at least one payment last quarter. That's up from 4.4% in the same period last year.
The problems appear to be focused in seven states. Job losses in Michigan, Ohio and Indiana have depressed housing there. Those three states account for nearly 20% of the nation's homes in foreclosure.
And a rising number of defaults in four states — California, Nevada, Florida and Arizona — is largely why the U.S. delinquency rate is up. As home prices there fall, more people are in the upside-down position of owing more on their loans than their homes are worth.
California accounted for more than 17% of the subprime ARMs in the country and for more than 19% of the new foreclosures in the second quarter, the MBA says.
HORRIBLE EMPLOYMENT REPORT CAUSES CONCERN
The Bureau of Labor Statistics issued its August Employment Situation Report today. It provided plenty of bad news.
From USA Today:
Employers cut 4,000 jobs in August, the first time in four years that monthly hiring contracted, the government said Friday in a report certain to boost pressure on Federal Reserve policymakers to cut interest rates.
In addition to the August job losses, the Labor Department revised down its estimates for hiring in June and July by a total of 81,000. It said 68,000 jobs were added in July rather than 92,000 and 69,000 in June instead of 126,000.
Economists polled a week ago by Reuters had forecast 110,000 jobs would be created in August, but many analysts had scaled back their expectations since then amid increasing signs the job market was coming under strain.
The surprisingly bleak August jobs report was a stark sign that a painful credit crunch that has unnerved Wall Street is putting a strain on the national economy. The last time the economy shed jobs was in August 2003, when 42,000 jobs were cut.
Job losses in August were concentrated in the goods-producing sector. A whopping 46,000 manufacturing jobs were cut, the most since an 86,000-job cut in July 2003. Construction businesses shed another 22,000 jobs, up from 14,000 that were lost in July.
Service industries added 60,000 jobs in August.
Those with jobs, however, did see modest wage gains.
Average hourly earnings rose to $17.50 in August, a 0.3% increase from July. That matched economists' forecasts. Over the past 12 months, wages are up 3.9%. Wage growth supports consumer spending, a major ingredient for a healthy economy.
From USA Today:
Employers cut 4,000 jobs in August, the first time in four years that monthly hiring contracted, the government said Friday in a report certain to boost pressure on Federal Reserve policymakers to cut interest rates.
In addition to the August job losses, the Labor Department revised down its estimates for hiring in June and July by a total of 81,000. It said 68,000 jobs were added in July rather than 92,000 and 69,000 in June instead of 126,000.
Economists polled a week ago by Reuters had forecast 110,000 jobs would be created in August, but many analysts had scaled back their expectations since then amid increasing signs the job market was coming under strain.
The surprisingly bleak August jobs report was a stark sign that a painful credit crunch that has unnerved Wall Street is putting a strain on the national economy. The last time the economy shed jobs was in August 2003, when 42,000 jobs were cut.
Job losses in August were concentrated in the goods-producing sector. A whopping 46,000 manufacturing jobs were cut, the most since an 86,000-job cut in July 2003. Construction businesses shed another 22,000 jobs, up from 14,000 that were lost in July.
Service industries added 60,000 jobs in August.
Those with jobs, however, did see modest wage gains.
Average hourly earnings rose to $17.50 in August, a 0.3% increase from July. That matched economists' forecasts. Over the past 12 months, wages are up 3.9%. Wage growth supports consumer spending, a major ingredient for a healthy economy.
Wednesday, September 05, 2007
MATTEL RECALLS MORE LEAD-TAINTED CHINESE TOYS
From USA Today:
Mattel announced another recall of lead-tainted toys from China late Tuesday, its third such announcement in about a month.
The recall of nearly 800,000 Fisher-Price and parent company Mattel-brand products includes Barbie accessories, such as lead-tainted puppies and cats; GeoTrax trains; and toy bongo drums. All were sold within the last year.
Children can get lead poisoning from sucking on or swallowing toys or jewelry with lead. Lead can cause learning and behavior problems and even death.
Mattel announced another recall of lead-tainted toys from China late Tuesday, its third such announcement in about a month.
The recall of nearly 800,000 Fisher-Price and parent company Mattel-brand products includes Barbie accessories, such as lead-tainted puppies and cats; GeoTrax trains; and toy bongo drums. All were sold within the last year.
Children can get lead poisoning from sucking on or swallowing toys or jewelry with lead. Lead can cause learning and behavior problems and even death.
PENDING EXISTING HOME SALES LOWEST SINCE 2001
From USA Today:
Pending sales of existing homes, a leading indicator for the housing sector, fell in July to the lowest level in nearly six years as borrowers struggled to finalize home purchases, particularly in expensive areas.
The National Association of Realtors said its seasonally adjusted index of pending home sales for July fell 16.1% from a year ago and 12.2% from the prior month.
A home sale is listed as pending when the contract has been signed but the transaction has not closed. The sale usually closes within months of signing.
Some home purchases aren't closing because mortgage loans have been "falling through at the last moment," Lawrence Yun, the Realtors trade group's senior economist, said in a statement.
"Numbers like this should put to rest the belief that we've reached the bottom" in the housing market, said Joel Naroff, chief economist for Commerce Bancorp. "There's still a lot of pain that's ahead of us."
Pending sales of existing homes, a leading indicator for the housing sector, fell in July to the lowest level in nearly six years as borrowers struggled to finalize home purchases, particularly in expensive areas.
The National Association of Realtors said its seasonally adjusted index of pending home sales for July fell 16.1% from a year ago and 12.2% from the prior month.
A home sale is listed as pending when the contract has been signed but the transaction has not closed. The sale usually closes within months of signing.
Some home purchases aren't closing because mortgage loans have been "falling through at the last moment," Lawrence Yun, the Realtors trade group's senior economist, said in a statement.
"Numbers like this should put to rest the belief that we've reached the bottom" in the housing market, said Joel Naroff, chief economist for Commerce Bancorp. "There's still a lot of pain that's ahead of us."
Monday, September 03, 2007
WTO INVESTIGATING POSSIBLE VIOLATIONS BY CHINA
From USA Today:
The World Trade Organization opened a formal investigation Friday into allegations by the USA and Mexico that China is providing illegal subsidies for a range of industries, officials said.
The North American countries accuse Beijing of using WTO-prohibited tax breaks to encourage Chinese companies to boost exports, while imposing tax and tariff penalties to limit purchases of foreign products in China.
"China is providing numerous subsidies that appear to be prohibited under WTO rules," U.S. trade lawyer Juan Millan told the WTO's dispute body last month. "China offers tax refunds, reductions and exemptions that discriminate against imported products ... or that subsidize China's exports."
The U.S. trade deficit set a record for the fifth consecutive year in 2006 at $765.3 billion. The imbalance with China grew to $232.5 billion, the highest ever with a single country.
Beijing, meanwhile, blocked a separate probe of its rules for protecting intellectual property rights. But the move will probably only delay the creation of a panel until the next meeting of the WTO's dispute body in September, when Washington can bring up the issue again.
Under WTO rules, a second request for an investigative panel is automatically granted.
The World Trade Organization opened a formal investigation Friday into allegations by the USA and Mexico that China is providing illegal subsidies for a range of industries, officials said.
The North American countries accuse Beijing of using WTO-prohibited tax breaks to encourage Chinese companies to boost exports, while imposing tax and tariff penalties to limit purchases of foreign products in China.
"China is providing numerous subsidies that appear to be prohibited under WTO rules," U.S. trade lawyer Juan Millan told the WTO's dispute body last month. "China offers tax refunds, reductions and exemptions that discriminate against imported products ... or that subsidize China's exports."
The U.S. trade deficit set a record for the fifth consecutive year in 2006 at $765.3 billion. The imbalance with China grew to $232.5 billion, the highest ever with a single country.
Beijing, meanwhile, blocked a separate probe of its rules for protecting intellectual property rights. But the move will probably only delay the creation of a panel until the next meeting of the WTO's dispute body in September, when Washington can bring up the issue again.
Under WTO rules, a second request for an investigative panel is automatically granted.
Saturday, September 01, 2007
COURT DECISION GIVES MEXICAN TRUCKERS GREEN LIGHT TO DRIVE IN USA
From AP via Yahoo:
The Bush administration can go ahead with a pilot program to allow as many as 100 Mexican trucking companies to freely haul their cargo anywhere within the U.S. for the next year, a federal appeals court ruled Friday.
The 9th U.S. Circuit Court of Appeals denied a request made by the Teamsters union, the Sierra Club and the nonprofit Public Citizen to halt the program.
The appeals court ruled the groups have not satisfied the legal requirements to immediately stop what the government is calling a "demonstration project," but can continue to argue their case.
The trucking program is scheduled to begin Thursday.
Canadian trucking companies have full access to U.S. roads, but Mexican trucks can travel only about 20 miles inside the country at certain border crossings, such as ones in San Diego and El Paso, Texas.
The government says it has imposed rigorous safety protocols in the program, including drug and alcohol testing for drivers done by U.S. companies. In addition, law enforcement officials have stepped up nationwide enforcement of a law that's been on the books since the 1970s requiring interstate truck and bus drivers to have a basic understanding of written and spoken English.
The Federal Motor Carrier Safety Administration, the Department of Transportation agency charged with managing the program, said Friday that the court's decision is "welcome news for U.S. truck drivers anxious to compete south of the border and U.S. consumers eager to realize the savings of more efficient shipments with one of our largest trading partners."
However, the agency said it must still wait for final report by the inspector general and for Mexico to begin giving U.S. trucking companies reciprocal access before the program can begin.
The Bush administration can go ahead with a pilot program to allow as many as 100 Mexican trucking companies to freely haul their cargo anywhere within the U.S. for the next year, a federal appeals court ruled Friday.
The 9th U.S. Circuit Court of Appeals denied a request made by the Teamsters union, the Sierra Club and the nonprofit Public Citizen to halt the program.
The appeals court ruled the groups have not satisfied the legal requirements to immediately stop what the government is calling a "demonstration project," but can continue to argue their case.
The trucking program is scheduled to begin Thursday.
Canadian trucking companies have full access to U.S. roads, but Mexican trucks can travel only about 20 miles inside the country at certain border crossings, such as ones in San Diego and El Paso, Texas.
The government says it has imposed rigorous safety protocols in the program, including drug and alcohol testing for drivers done by U.S. companies. In addition, law enforcement officials have stepped up nationwide enforcement of a law that's been on the books since the 1970s requiring interstate truck and bus drivers to have a basic understanding of written and spoken English.
The Federal Motor Carrier Safety Administration, the Department of Transportation agency charged with managing the program, said Friday that the court's decision is "welcome news for U.S. truck drivers anxious to compete south of the border and U.S. consumers eager to realize the savings of more efficient shipments with one of our largest trading partners."
However, the agency said it must still wait for final report by the inspector general and for Mexico to begin giving U.S. trucking companies reciprocal access before the program can begin.
Friday, August 31, 2007
FEDERAL HOUSING ADMINISTRATION TO PROVIDE SAFETY NET
From USA Today:
President Bush announced a series of "limited" steps Friday designed to help homeowners struggling to pay their mortgages, expanding the role of the Federal Housing Administration and proposing a temporary change in tax law to prevent people from being penalized when they refinance risky "subprime" adjustable-rate mortgages.
Under Bush's proposal, an estimated 80,000 homeowners with bruised credit and subprime ARMs they can no longer afford will be able to refinance loans, which the Federal Housing Administration (FHA) would insure.
The move marks a historic expansion of the role of the FHA, a Depression-era agency that has traditionally served low- and moderate-income families and first-time buyers, but not delinquent borrowers. Nearly 16% of subprime borrowers are behind on their ARMs, and an estimated 2 million subprime ARMs totaling about $600 billion will reset to higher rates through the end of next year.
To qualify for the new benefit, homeowners would have to prove they paid their loan on time before it reset to a higher rate and must have at least 3% equity in the home.
Under current rules, the maximum loan the FHA can guarantee is $202,000 in most states and up to $362,000 in high-cost states such as California and New York.
Bush also called on Congress to pass his proposal to reform the FHA, in part by raising those loan limits to $262,000 in most states and $417,000 in pricier areas.
President Bush announced a series of "limited" steps Friday designed to help homeowners struggling to pay their mortgages, expanding the role of the Federal Housing Administration and proposing a temporary change in tax law to prevent people from being penalized when they refinance risky "subprime" adjustable-rate mortgages.
Under Bush's proposal, an estimated 80,000 homeowners with bruised credit and subprime ARMs they can no longer afford will be able to refinance loans, which the Federal Housing Administration (FHA) would insure.
The move marks a historic expansion of the role of the FHA, a Depression-era agency that has traditionally served low- and moderate-income families and first-time buyers, but not delinquent borrowers. Nearly 16% of subprime borrowers are behind on their ARMs, and an estimated 2 million subprime ARMs totaling about $600 billion will reset to higher rates through the end of next year.
To qualify for the new benefit, homeowners would have to prove they paid their loan on time before it reset to a higher rate and must have at least 3% equity in the home.
Under current rules, the maximum loan the FHA can guarantee is $202,000 in most states and up to $362,000 in high-cost states such as California and New York.
Bush also called on Congress to pass his proposal to reform the FHA, in part by raising those loan limits to $262,000 in most states and $417,000 in pricier areas.
GDP GROWTH SOLID IN SECOND QUARTER
From Action Economics via BusinessWeek:
For the preliminary U.S. second-quarter GDP report, the figures revealed an upward bump to growth of 4.0% from the 3.4% advance estimate released in July. The median forecast of economists surveyed by Action Economics was for an upward revision to 4.1%.
GDP growth averaged 2.3% through the first half of 2007, and we continue to expect a 2.8% pace in the third quarter. August economic data will be watched closely for clues as to the impacts of current financial dislocation, and we have thus far marked down our fourth-quarter GDP estimate to 2.8% in response to these effects. But solid growth up to August will provide a floor to any revisions to third-quarter growth, as will the strong GDP component mix that has boosted third-quarter prospects.
For the preliminary U.S. second-quarter GDP report, the figures revealed an upward bump to growth of 4.0% from the 3.4% advance estimate released in July. The median forecast of economists surveyed by Action Economics was for an upward revision to 4.1%.
GDP growth averaged 2.3% through the first half of 2007, and we continue to expect a 2.8% pace in the third quarter. August economic data will be watched closely for clues as to the impacts of current financial dislocation, and we have thus far marked down our fourth-quarter GDP estimate to 2.8% in response to these effects. But solid growth up to August will provide a floor to any revisions to third-quarter growth, as will the strong GDP component mix that has boosted third-quarter prospects.
Thursday, August 30, 2007
HELMSLEY'S DOG $12 MILLION, TWO OF FOUR GRANDKIDS $0
From USA Today:Leona Helmsley's dog will continue to live an opulent life, and then be buried alongside her in a mausoleum. But two of Helmsley's grandchildren got nothing from the late luxury hotelier and real estate billionaire's estate.
Helmsley left her beloved white Maltese, named Trouble, a $12 million trust fund, according to her will, which was made public Tuesday in surrogate court.
She also left millions for her brother, Alvin Rosenthal, who was named to care for Trouble in her absence, as well as two of four grandchildren from her late son Jay Panzirer — so long as they visit their father's grave site once each calendar year.
Otherwise, she wrote, neither will get a penny of the $5 million she left for each.
Helmsley left nothing to two of Jay Panzirer's other children — Craig and Meegan Panzirer — for "reasons that are known to them," she wrote.
AN APPLE iCAR?
From USA Today:
U.S. computer company Apple and German automaker Volkswagen are discussing the possibility of building an "iCar" which would feature products by the producer of the ubiquitous iPod personal music player.
Apple CEO Steve Jobs and Volkswagen's chief Martin Winterkorn met several days ago in California, and plan to meet for further discussions, said Hans-Gerd Bode, a spokesman for VW.
There are "scores of ideas," but few concrete plans at this point, Bode said.
Market experts estimate that a compact car upgraded with Apple products would be of substantial interest to young target groups, according to German financial magazine Capital.
Electronics, ranging from satellite navigation machines to cup warmers, are increasingly a selling point for automakers.
Ford Motor, for instance, will debut this fall an in-car communication and entertainment system developed with Microsoft that will cost $395 as an option.
The system, called Sync, allows drivers, using either voice recognition or steering wheel controls, to listen to their digital music players and have text messages on their cellphones read aloud.
U.S. computer company Apple and German automaker Volkswagen are discussing the possibility of building an "iCar" which would feature products by the producer of the ubiquitous iPod personal music player.
Apple CEO Steve Jobs and Volkswagen's chief Martin Winterkorn met several days ago in California, and plan to meet for further discussions, said Hans-Gerd Bode, a spokesman for VW.
There are "scores of ideas," but few concrete plans at this point, Bode said.
Market experts estimate that a compact car upgraded with Apple products would be of substantial interest to young target groups, according to German financial magazine Capital.
Electronics, ranging from satellite navigation machines to cup warmers, are increasingly a selling point for automakers.
Ford Motor, for instance, will debut this fall an in-car communication and entertainment system developed with Microsoft that will cost $395 as an option.
The system, called Sync, allows drivers, using either voice recognition or steering wheel controls, to listen to their digital music players and have text messages on their cellphones read aloud.
Wednesday, August 29, 2007
WAGES INCREASING IN CHINA
From The New York Times:
Chinese wages are on the rise. No reliable figures for average wages exist; the government’s economic data are notably unreliable. But factory owners and experts who monitor the nation’s labor market say that businesses are having a hard time finding able-bodied workers and are having to pay the workers they can find more money.
Chinese officials are quick to say that there is no overall shortage of labor — rather, there is a shortage of young workers willing to accept the low wages that prevailed in the 1990s. Factories in cities like Guangzhou advertise heavily for young workers, even while employment offices consider it a success if someone over 40 can find any job in less than a year.
“Now they’re taking workers into their early 30s,” said Jonathan Unger, director of the Contemporary China Center at Australian National University in Canberra, “but anything older than that and they think they can’t take the conditions, the 11-hour days,” as well as work on weekends, and a tedious life in factory-owned dormitories.
This lack of laborers of desirable age is hardly making China a worker’s paradise. Factory wages remain extremely low by Western standards: roughly $1 an hour for better-paid workers near the coast, compared with as little as 50 cents early this decade.
Moreover, labor regulation is weak in China, as shown most vividly this year by the discovery that brick kilns in the north of the country had kidnapped and enslaved hundreds of children and mentally disadvantaged adults, working them under brutal conditions with little or no pay.
And wages are stagnating in the middle of the labor market — workers who consider themselves too educated for entry-level jobs in a garment factory, but lacking the skills or experience to command a premium salary elsewhere. “It’s easy to find a job with not a very high salary,” said Chen Zheng, a 24-year-old auto worker and high school graduate in Ningbo. “It’s not easy if you want a higher wage.”
Chinese wages are on the rise. No reliable figures for average wages exist; the government’s economic data are notably unreliable. But factory owners and experts who monitor the nation’s labor market say that businesses are having a hard time finding able-bodied workers and are having to pay the workers they can find more money.
Chinese officials are quick to say that there is no overall shortage of labor — rather, there is a shortage of young workers willing to accept the low wages that prevailed in the 1990s. Factories in cities like Guangzhou advertise heavily for young workers, even while employment offices consider it a success if someone over 40 can find any job in less than a year.
“Now they’re taking workers into their early 30s,” said Jonathan Unger, director of the Contemporary China Center at Australian National University in Canberra, “but anything older than that and they think they can’t take the conditions, the 11-hour days,” as well as work on weekends, and a tedious life in factory-owned dormitories.
This lack of laborers of desirable age is hardly making China a worker’s paradise. Factory wages remain extremely low by Western standards: roughly $1 an hour for better-paid workers near the coast, compared with as little as 50 cents early this decade.
Moreover, labor regulation is weak in China, as shown most vividly this year by the discovery that brick kilns in the north of the country had kidnapped and enslaved hundreds of children and mentally disadvantaged adults, working them under brutal conditions with little or no pay.
And wages are stagnating in the middle of the labor market — workers who consider themselves too educated for entry-level jobs in a garment factory, but lacking the skills or experience to command a premium salary elsewhere. “It’s easy to find a job with not a very high salary,” said Chen Zheng, a 24-year-old auto worker and high school graduate in Ningbo. “It’s not easy if you want a higher wage.”
APPLE INTRODUCING NEW iPODS SEPTEMBER 5TH?
From Reuters:
Apple Inc shares rose more than 4.5 percent on Wednesday, fueled by excitement over the pending launch of new iPod digital music players, which could entice current users to buy upgraded models.
The stock climbed $5.74 to $132.56 in early trading on the Nasdaq, after Apple distributed invitations to a September 5 event in San Francisco. Goldman Sachs said in a note to clients that the date would bring "the almost certain launch of a new family of iPods."
"The product announcement is likely to include a full line-up of revamped iPods with significantly greater functionality at current price points, including the much-anticipated full-screen video iPod," Goldman said.
Goldman recommended clients buy Apple shares, saying the next video iPod could drive "an accelerated upgrade cycle."
Apple shares are up about 55 percent this year, driven by the steady strength of the iPod, which dominates the portable music player market, and the late June launch of the iPhone.
Apple Inc shares rose more than 4.5 percent on Wednesday, fueled by excitement over the pending launch of new iPod digital music players, which could entice current users to buy upgraded models.
The stock climbed $5.74 to $132.56 in early trading on the Nasdaq, after Apple distributed invitations to a September 5 event in San Francisco. Goldman Sachs said in a note to clients that the date would bring "the almost certain launch of a new family of iPods."
"The product announcement is likely to include a full line-up of revamped iPods with significantly greater functionality at current price points, including the much-anticipated full-screen video iPod," Goldman said.
Goldman recommended clients buy Apple shares, saying the next video iPod could drive "an accelerated upgrade cycle."
Apple shares are up about 55 percent this year, driven by the steady strength of the iPod, which dominates the portable music player market, and the late June launch of the iPhone.
GASOLINE SUPPLY AT RECORD LOW
From USA Today:
U.S. gasoline supplies are the lowest level ever recorded in terms of demand, just 20 days of average fuel consumption, the Energy Information Administration said Wednesday.
"This is even fewer days than seen following the hurricanes in 2005," the EIA said in its weekly review of the oil market. "While the absolute level of total gasoline inventories has been slightly lower a few times in recent years, when the level of demand is taken into account, it has not been this low before."
The low gasoline inventory will not likely cause a sharp spike in retail fuel prices, but will limit the usual decline in pump prices after this weekend's Labor Day holiday, the EIA said.
U.S. gasoline supplies are the lowest level ever recorded in terms of demand, just 20 days of average fuel consumption, the Energy Information Administration said Wednesday.
"This is even fewer days than seen following the hurricanes in 2005," the EIA said in its weekly review of the oil market. "While the absolute level of total gasoline inventories has been slightly lower a few times in recent years, when the level of demand is taken into account, it has not been this low before."
The low gasoline inventory will not likely cause a sharp spike in retail fuel prices, but will limit the usual decline in pump prices after this weekend's Labor Day holiday, the EIA said.
Tuesday, August 28, 2007
ILLINOIS STATE UNIVERSITY DRESS CODE
From the Peoria Journal Star:
The College of Business at Illinois State University is taking aim at images of pajama-wearing students with backwards hats.
Starting next week, students majoring in marketing or business teacher education will have to wear business casual attire to class or risk being sent home for the day.
While many business schools at colleges and universities encourage students to dress up for interviews and meetings, not many require a dress code in class. ISU officials implemented this code, they say, as a way to give their students an edge in the professional world.
The marketing department began testing the dress code in select classes in 2003, and last fall, all students in the professional sales sequence were required to dress in business casual attire to class.
"I have noticed in my interactions with these students that when they come dressed in business attire, they look like they are ready to do serious work. They are attentive, they're courteous and have a sense of confidence about them," said Amy Humphreys, assistant to the dean for constituent relations.
The College of Business at Illinois State University is taking aim at images of pajama-wearing students with backwards hats.
Starting next week, students majoring in marketing or business teacher education will have to wear business casual attire to class or risk being sent home for the day.
While many business schools at colleges and universities encourage students to dress up for interviews and meetings, not many require a dress code in class. ISU officials implemented this code, they say, as a way to give their students an edge in the professional world.
The marketing department began testing the dress code in select classes in 2003, and last fall, all students in the professional sales sequence were required to dress in business casual attire to class.
"I have noticed in my interactions with these students that when they come dressed in business attire, they look like they are ready to do serious work. They are attentive, they're courteous and have a sense of confidence about them," said Amy Humphreys, assistant to the dean for constituent relations.
Monday, August 27, 2007
EBERT GIVES DISNEY NEGOTIATORS THUMBS DOWN
From The Wall Street Journal's The Evening Wrap:Film critic Roger Ebert may ban the use of thumbs on his show ""At the Movies with Ebert & Roeper." Mr. Ebert holds a copyright on the "thumbs-up" or "thumbs-down" gesture with which reviewers on the show judge each film. Thumb positioning has become a staple of movie marketing and, in turn, a big part of the show's influence. In his frustration over contract negotiations with Disney-ABC Domestic Television, his show's distributor, the critic allegedly exercised his right to block thumb-based film assessment until he receives a better offer. Mr. Ebert hasn't appeared on the show in over a year after struggling with health problems, but guest critics had kept the thumb tradition alive. The two sides disagree on who actually enacted the thumb ban -- with Mr. Ebert blaming Disney, and Disney pointing the finger at Mr. Ebert -- but two episodes have already been filmed without opposable digits.
MORE BAD NEWS FOR HOUSING MARKET
From USA Today:
Sales of existing homes dropped for a fifth straight month in July, falling to the slowest annual pace in nearly five years, while home prices fell for a record 12th consecutive month.
The National Association of Realtors reported that sales of existing homes dipped 0.2% last month to a seasonally adjusted annual rate of 5.75 million units.
The median price of a home sold last month slid to $230,200, down 0.6% from the median price a year ago. It marked the 12th consecutive month that home prices have declined compared with a year ago, an all-time high.
The inventory of homes for sale rose 5.1% to 4.59 million, representing 9.6 months worth of supply at the current sales pace.
Sales of existing homes dropped for a fifth straight month in July, falling to the slowest annual pace in nearly five years, while home prices fell for a record 12th consecutive month.
The National Association of Realtors reported that sales of existing homes dipped 0.2% last month to a seasonally adjusted annual rate of 5.75 million units.
The median price of a home sold last month slid to $230,200, down 0.6% from the median price a year ago. It marked the 12th consecutive month that home prices have declined compared with a year ago, an all-time high.
The inventory of homes for sale rose 5.1% to 4.59 million, representing 9.6 months worth of supply at the current sales pace.
ACER TO BUY GATEWAY
From USA Today:
Taiwan's Acer will buy Gateway for $710 million, creating the world's No. 3 PC maker and doubling its U.S. presence while dealing a blow to rival Lenovo's efforts to grow in Europe.
Lenovo's plans were set back when Gateway said Monday that it would exercise its right to take a first attempt at buying the parent of European-focused PC maker Packard Bell.
The Chinese PC giant has said it was in talks to buy Paris-based Packard Bell, hoping to expand its presence in a European consumer market where it is relatively weak.
Acer said the merger would create a company with more than $15 billion in sales and 20 million PCs shipped per year, adding it would keep the Gateway brand in the United States.
On a worldwide basis, the tie-up would help Acer — Taiwan's most recognized global brand — displace Lenovo.
Lenovo — one of a handful of Chinese firms trying to forge a global brand by investing abroad — dropped to global fourth place in the first three months of 2007 but has now reclaimed the No. 3 slot from Acer in a closely fought battle.
The deal is expected to be completed by December and the merged company would still be a distant third in the United States, behind No. 2 Hewlett-Packard at 23.6% and market leader Dell at 28.4%, according to IDC.
A merged Acer and Gateway would have sold about 18.6 million PCs worldwide last year, or about 8% of global sales, compared to Dell's 39.1 million units, Hewlett-Packard's 38.8 million and Lenovo's 16.6 million, according to IDC.
Taiwan's Acer will buy Gateway for $710 million, creating the world's No. 3 PC maker and doubling its U.S. presence while dealing a blow to rival Lenovo's efforts to grow in Europe.
Lenovo's plans were set back when Gateway said Monday that it would exercise its right to take a first attempt at buying the parent of European-focused PC maker Packard Bell.
The Chinese PC giant has said it was in talks to buy Paris-based Packard Bell, hoping to expand its presence in a European consumer market where it is relatively weak.
Acer said the merger would create a company with more than $15 billion in sales and 20 million PCs shipped per year, adding it would keep the Gateway brand in the United States.
On a worldwide basis, the tie-up would help Acer — Taiwan's most recognized global brand — displace Lenovo.
Lenovo — one of a handful of Chinese firms trying to forge a global brand by investing abroad — dropped to global fourth place in the first three months of 2007 but has now reclaimed the No. 3 slot from Acer in a closely fought battle.
The deal is expected to be completed by December and the merged company would still be a distant third in the United States, behind No. 2 Hewlett-Packard at 23.6% and market leader Dell at 28.4%, according to IDC.
A merged Acer and Gateway would have sold about 18.6 million PCs worldwide last year, or about 8% of global sales, compared to Dell's 39.1 million units, Hewlett-Packard's 38.8 million and Lenovo's 16.6 million, according to IDC.
$100 BILL GETTING MAKEOVER
Counterfeiting is a huge problem for the United States. It isn't just criminals who do it, but foreign governments have been suspected of producing counterfeit U.S. currency, as well. After reading the story below, check out this one about North Korea counterfeiting U.S. $100 bills.
AP story from MSNBC.com:
After six decades in which the venerable greenback never changed its look, the U.S. currency has undergone a slew of makeovers. The most amazing is yet to come.
A new security thread has been approved for the $100 bill, The Associated Press has learned, and the change will cause double-takes.
The new look is part of an effort to thwart counterfeiters who are armed with ever-more sophisticated computers, scanners and color copiers. The C-note, with features the likeness of Benjamin Franklin, is the most frequent target of counterfeiters operating outside the United States.
The operation of the new security thread looks like something straight out of the Hogwarts School of Witchcraft and Wizardry. This magic, however, relies on innovations produced from decades of development.
It combines micro-printing with tiny lenses _ 650,000 for a single $100 bill. The lenses magnify the micro-printing in a truly remarkable way.
Move the bill side to side and the image appears to move up and down. Move the bill up and down and the image appears to move from side to side.
"It is a really complex optical structure on a microscopic scale. It makes for a very compelling high security device," said Douglas Crane, a vice president at Crane & Co. The Dalton, Mass-based company has a $46 million contract to produce the new security threads.
Larry Felix, director of the Bureau of Engraving and Printing, confirmed details about the security thread in an AP interview.
The redesign of the $100 is about one-third of the way complete. The bill is expected to go into circulation late next year.
The $100 bill represents more than 70 percent of the $776 billion in currency in circulation, two-thirds of which is held overseas.
"Counterfeiting is becoming highly organized and highly efficient," Felix said. He said some clandestine printing plants in Latin America and Eastern Europe have been caught counterfeiting not only the U.S. currency but other countries' notes.
The government says $118.1 million in counterfeit U.S. currency was detected in 2006, an increase of 3.8 percent from 2005.
AP story from MSNBC.com:
After six decades in which the venerable greenback never changed its look, the U.S. currency has undergone a slew of makeovers. The most amazing is yet to come.
A new security thread has been approved for the $100 bill, The Associated Press has learned, and the change will cause double-takes.
The new look is part of an effort to thwart counterfeiters who are armed with ever-more sophisticated computers, scanners and color copiers. The C-note, with features the likeness of Benjamin Franklin, is the most frequent target of counterfeiters operating outside the United States.
The operation of the new security thread looks like something straight out of the Hogwarts School of Witchcraft and Wizardry. This magic, however, relies on innovations produced from decades of development.
It combines micro-printing with tiny lenses _ 650,000 for a single $100 bill. The lenses magnify the micro-printing in a truly remarkable way.
Move the bill side to side and the image appears to move up and down. Move the bill up and down and the image appears to move from side to side.
"It is a really complex optical structure on a microscopic scale. It makes for a very compelling high security device," said Douglas Crane, a vice president at Crane & Co. The Dalton, Mass-based company has a $46 million contract to produce the new security threads.
Larry Felix, director of the Bureau of Engraving and Printing, confirmed details about the security thread in an AP interview.
The redesign of the $100 is about one-third of the way complete. The bill is expected to go into circulation late next year.
The $100 bill represents more than 70 percent of the $776 billion in currency in circulation, two-thirds of which is held overseas.
"Counterfeiting is becoming highly organized and highly efficient," Felix said. He said some clandestine printing plants in Latin America and Eastern Europe have been caught counterfeiting not only the U.S. currency but other countries' notes.
The government says $118.1 million in counterfeit U.S. currency was detected in 2006, an increase of 3.8 percent from 2005.
Saturday, August 25, 2007
CHINESE GOVERNMENT DECLARES "WAR" ON TAINTED FOOD, DRUGS, AND EXPORTS
From Reuters:
China has launched a four-month "war" on tainted food, drugs and exports, state media reported on Friday, as beleaguered officials embraced time-tested campaign tactics to clean up the country's battered image.
Chinese Vice Premier Wu Yi told officials that the campaign, to run to the end of the year, would focus on problem products that have corroded domestic and foreign consumers' confidence in the "made in China" label.
"This is a special battle to protect the health and personal interests of the public and to protect the reputation of Chinese goods and the national image," Wu said, according to the government Web site (www.gov.cn).
She called the campaign a "stern political task" -- a reminder that officials' careers may be on the line.
Wu announced targets to clean up pig slaughtering, restaurants and canteens, pesticide use, food additives and the country's vital exports. "In some businesses the management level is low, production conditions are poor, quality levels and standards are low, and reliability is weak," she said.
Local officials may not share Wu's determination to move so fast, said the China Daily.
"Building an omnipresent monitoring and guarantee mechanism will prove a challenging mission for a four-month campaign," the paper said.
China has launched a four-month "war" on tainted food, drugs and exports, state media reported on Friday, as beleaguered officials embraced time-tested campaign tactics to clean up the country's battered image.
Chinese Vice Premier Wu Yi told officials that the campaign, to run to the end of the year, would focus on problem products that have corroded domestic and foreign consumers' confidence in the "made in China" label.
"This is a special battle to protect the health and personal interests of the public and to protect the reputation of Chinese goods and the national image," Wu said, according to the government Web site (www.gov.cn).
She called the campaign a "stern political task" -- a reminder that officials' careers may be on the line.
Wu announced targets to clean up pig slaughtering, restaurants and canteens, pesticide use, food additives and the country's vital exports. "In some businesses the management level is low, production conditions are poor, quality levels and standards are low, and reliability is weak," she said.
Local officials may not share Wu's determination to move so fast, said the China Daily.
"Building an omnipresent monitoring and guarantee mechanism will prove a challenging mission for a four-month campaign," the paper said.
Thursday, August 23, 2007
CRAMER'S MAD MONEY = CRAMER'S BAD ADVICE?
CNBC crazy man Jim Cramer who made millions in the 1980s and 1990s with his hedge fund rolls up his sleaves, beats his chest, and makes seemingly thousands of stock picks 
per show on Mad Money, but Barron's reports that Cramer's picks overall do not beat the S&P 500.
From Barron's August 20th edition:
"Over the past two years, viewers holding Cramer's stocks would be up 12% while the Dow rose 22% and the S&P 500 16%, according to a record of 1,300 of the CNBC star's Buy recommendations compiled by YourMoneyWatch.com, a Website run by a retired stock analyst and loyal Cramer-watcher."
"We also looked at a database of Cramer's Mad Money picks maintained by his Website, TheStreet.com. It covers only the past six months, but includes an astounding 3,458 stocks - Buys mainly, punctuated by some Sells. These picks were flat to down in relation to the market. Count commissions and you would have been much better off in an index fund that simply tracks the market."
After an initial day-after 2% pop for Cramer's picks, the stocks "usually moved sideways or down for the following 30 trading days. This offered an opportunity to make money - 5% to 30% a year - by selling Cramer's selections short." Short selling is betting that a stock price will drop and profiting from that drop.
per show on Mad Money, but Barron's reports that Cramer's picks overall do not beat the S&P 500.From Barron's August 20th edition:
"Over the past two years, viewers holding Cramer's stocks would be up 12% while the Dow rose 22% and the S&P 500 16%, according to a record of 1,300 of the CNBC star's Buy recommendations compiled by YourMoneyWatch.com, a Website run by a retired stock analyst and loyal Cramer-watcher."
"We also looked at a database of Cramer's Mad Money picks maintained by his Website, TheStreet.com. It covers only the past six months, but includes an astounding 3,458 stocks - Buys mainly, punctuated by some Sells. These picks were flat to down in relation to the market. Count commissions and you would have been much better off in an index fund that simply tracks the market."
After an initial day-after 2% pop for Cramer's picks, the stocks "usually moved sideways or down for the following 30 trading days. This offered an opportunity to make money - 5% to 30% a year - by selling Cramer's selections short." Short selling is betting that a stock price will drop and profiting from that drop.
Wednesday, August 22, 2007
WAL-MART PET FOOD FROM CHINA FOUND TO HAVE MELAMINE
From USA Today:
Tests of two Chinese brands of dog treats sold at Wal-Mart stores found traces of melamine, a chemical agent that led to a previous, large-scale pet food recall in March, a spokeswoman said Tuesday.
Wal-Mart Stores stopped selling Chicken Jerky Strips from Import-Pingyang Pet Product and Chicken Jerky from Shanghai Bestro Trading in July, after customers said the products sickened their pets.
No recall was announced at that time, but Wal-Mart said in a statement Tuesday that customers who bought one of the products should return it to the nearest store for a refund.
Company spokeswoman Deisha Galberth said 17 sets of tests done on the products found melamine, a contaminant that's a byproduct of several pesticides.
The Delaware County (Pa.) Daily Times reported last week that a woman claimed her 2-year-old Chihuahua died after eating some of the products.
Tests of two Chinese brands of dog treats sold at Wal-Mart stores found traces of melamine, a chemical agent that led to a previous, large-scale pet food recall in March, a spokeswoman said Tuesday.
Wal-Mart Stores stopped selling Chicken Jerky Strips from Import-Pingyang Pet Product and Chicken Jerky from Shanghai Bestro Trading in July, after customers said the products sickened their pets.
No recall was announced at that time, but Wal-Mart said in a statement Tuesday that customers who bought one of the products should return it to the nearest store for a refund.
Company spokeswoman Deisha Galberth said 17 sets of tests done on the products found melamine, a contaminant that's a byproduct of several pesticides.
The Delaware County (Pa.) Daily Times reported last week that a woman claimed her 2-year-old Chihuahua died after eating some of the products.
Tuesday, August 21, 2007
NIKE WINS PITTANCE IN CHINESE COUNTERFEIT LAWSUIT
Think this is an isolated case of counterfeiting? Google "counterfeit Nike" and check out the results, or check out this link to an official Chinese customs site that details efforts to catch counterfeiters. The picture below is of 55,000 counterfeit goods confiscated in Tianjin, China.
From USA Today:
Nike has won lawsuits against two Chinese shoemakers and the local operations of a French supermarket chain over alleged illegal copying of its Air Jordan logo, a court official said Tuesday.
The Shanghai No. 2 Intermediate Court awarded Nike, the world's largest sports apparel company, a total of 350,000 yuan ($46,100) in damages from Jinjiang Longzhibu Shoe Co., Jinjiang Kangwei Shoe Co. and retailer Auchan, the official Xinhua News Agency and other reports said.
The case was the latest victory for foreign companies seeking protection from rampant theft of copyrights and other intellectual property in China. Regardless of laws against commercial piracy, counterfeit copies of most products can be easily found in Chinese stores and markets.
Nike said its employees found shoes made by the companies being sold for about 100 yuan ($13) a pair in outlets operated by the Auchan chain in Shanghai and the nearby city of Ningbo. Authentic Air Jordans sell for many times that amount.
From USA Today:
Nike has won lawsuits against two Chinese shoemakers and the local operations of a French supermarket chain over alleged illegal copying of its Air Jordan logo, a court official said Tuesday.
The Shanghai No. 2 Intermediate Court awarded Nike, the world's largest sports apparel company, a total of 350,000 yuan ($46,100) in damages from Jinjiang Longzhibu Shoe Co., Jinjiang Kangwei Shoe Co. and retailer Auchan, the official Xinhua News Agency and other reports said.
The case was the latest victory for foreign companies seeking protection from rampant theft of copyrights and other intellectual property in China. Regardless of laws against commercial piracy, counterfeit copies of most products can be easily found in Chinese stores and markets.
Nike said its employees found shoes made by the companies being sold for about 100 yuan ($13) a pair in outlets operated by the Auchan chain in Shanghai and the nearby city of Ningbo. Authentic Air Jordans sell for many times that amount.
Monday, August 20, 2007
JOB TIPS FOR RECENT GRADUATES
Please click the link to read the entire article.
From the Chicago Sun-Times:
From the Chicago Sun-Times:
- Don't be afraid to ask for help.
- Dress like a professional, not someone who just got out of college.
- Work on your written and spoken communication skills. No professional e-mail to a colleague or customer should start out with, "hey, dave ..." And capitalization is a beautiful thing.
- Be prepared for criticism.
- Respect deadlines.
CHINESE STATE TV DEFENDS CHINESE-MADE PRODUCTS
From USA Today:
Chinese state television has launched a week-long series of programs dedicated to defending the country's reputation as a safe maker of global goods, pushing forward its campaign to woo back international trust.
The first program was aired Sunday on China Central Television's economic channel and featured the head of a quality watchdog criticizing the recent furor over the quality of Chinese exports as "demonizing China's products."
"Personally, I believe it is new trend in trade protectionism. Although recalls are necessary, it is unfair to decide that all products made in China are unqualified," Li Changjiang, director of the General Administration of Quality Supervision, Inspection and Quarantine, said on the inaugural 90-minute show, titled "Believe in Made in China."
The programs are the latest in China's recent push to prove it is a safe manufacturer and exporter of goods amid discoveries of high levels of chemicals and toxins in Chinese products by countries around the world, from toothpaste to fish.
On Monday, New Zealand launched an investigation after children's clothes from China were found to contain dangerous levels of formaldehyde.
The government ordered the probe after scientists testing clothes for TV3's "Target" consumer watchdog program discovered formaldehyde concentrations up to 900 times above the safe level in woolen and cotton clothes.
The chemical gives a permanent press effect to clothes and is also used as an embalming fluid. It can cause problems ranging from skin rashes to cancer.
The television station says it will not release details of brand names or importers ahead of the show's airing on Tuesday.
Chinese state television has launched a week-long series of programs dedicated to defending the country's reputation as a safe maker of global goods, pushing forward its campaign to woo back international trust.
The first program was aired Sunday on China Central Television's economic channel and featured the head of a quality watchdog criticizing the recent furor over the quality of Chinese exports as "demonizing China's products."
"Personally, I believe it is new trend in trade protectionism. Although recalls are necessary, it is unfair to decide that all products made in China are unqualified," Li Changjiang, director of the General Administration of Quality Supervision, Inspection and Quarantine, said on the inaugural 90-minute show, titled "Believe in Made in China."
The programs are the latest in China's recent push to prove it is a safe manufacturer and exporter of goods amid discoveries of high levels of chemicals and toxins in Chinese products by countries around the world, from toothpaste to fish.
On Monday, New Zealand launched an investigation after children's clothes from China were found to contain dangerous levels of formaldehyde.
The government ordered the probe after scientists testing clothes for TV3's "Target" consumer watchdog program discovered formaldehyde concentrations up to 900 times above the safe level in woolen and cotton clothes.
The chemical gives a permanent press effect to clothes and is also used as an embalming fluid. It can cause problems ranging from skin rashes to cancer.
The television station says it will not release details of brand names or importers ahead of the show's airing on Tuesday.
Saturday, August 18, 2007
WEAK DOLLAR VERSUS EURO CAUSES DECLINE IN GERMAN CAR SALES
Remember, a weak dollar causes imported foreign goods to be more expensive for those using the dollar to make purchases, while U.S.-made goods exported to other countries, in this case Germany, a user of the Euro, are less expensive to those using the Euro.
From The New York Times:
This year, the dollar was down about 6 percent against the euro, which damaged German car sales in this country. Its auto trade surplus with the United States fell 30 percent.
The declining American trade deficit for the auto industry does not mean that this country is anywhere close to reaching a balance in the sector. During the second quarter, the United States imported $1.90 in automobiles and parts for every dollar of such goods it exported. That is the lowest ratio since 1998 and is down from $2.27 in the 2006 period. It is way below the record ratio of $4.22, reached in 1989.
But it still means that it would take a 31 percent increase in American auto exports, and a similar decrease in imports, to produce a balance in auto trade. That would require a much lower dollar — and a much weaker American economy.
From The New York Times:
This year, the dollar was down about 6 percent against the euro, which damaged German car sales in this country. Its auto trade surplus with the United States fell 30 percent.
The declining American trade deficit for the auto industry does not mean that this country is anywhere close to reaching a balance in the sector. During the second quarter, the United States imported $1.90 in automobiles and parts for every dollar of such goods it exported. That is the lowest ratio since 1998 and is down from $2.27 in the 2006 period. It is way below the record ratio of $4.22, reached in 1989.
But it still means that it would take a 31 percent increase in American auto exports, and a similar decrease in imports, to produce a balance in auto trade. That would require a much lower dollar — and a much weaker American economy.
Friday, August 17, 2007
FED LOWERS KEY DISCOUNT RATE HALF POINT
From USA Today:
Stocks soared Friday after the Federal Reserve did what Wall Street was clamoring for and cut its key discount rate a half percentage point.
The move quelled investors' credit worries at least for the time being and initially sent the Dow Jones industrials up more than 300 points before retreating some.
The Fed — which had resisted lowering rates despite weeks of market volatility, and instead added nearly $120 billion in liquidity into the banking system — cut its discount rate to 5.75% from 6.25%. The Fed acknowledged that the stock market turbulence that has pulled the Dow by hundreds of points a day was posing a risk to economic growth.
But the central bank made no mention of lowering its target for the federal funds rate, which has stood at 5.25% for more than a year. The fed funds rate determines the rates that banks charge each other for loans, while the discount rate only covers loans the Fed makes to banks. Many strategists believe the market won't settle down until the Fed lowers the fed funds rate target, considered a more significant benchmark.
Traders who bet on how the Fed might alter rates now expect the central bank will lower the benchmark fed funds rate at its next meeting on Sept. 18. Some investors are hoping for a cut in that benchmark rate even sooner.
"If the cut in the discount rate succeeds in restoring confidence, then perhaps there is no need for the Fed to cut rates at the Sept. 18 meeting," said John Lonski, chief economist of Moody's Investor Service. He added, though, that the key line in the Fed's statement Friday was its willingness to take more steps to prevent market volatility from harming the economy.
"That means the Fed is prepared to make a rate cut if stability doesn't come," Lonski said.
Stocks soared Friday after the Federal Reserve did what Wall Street was clamoring for and cut its key discount rate a half percentage point.
The move quelled investors' credit worries at least for the time being and initially sent the Dow Jones industrials up more than 300 points before retreating some.
The Fed — which had resisted lowering rates despite weeks of market volatility, and instead added nearly $120 billion in liquidity into the banking system — cut its discount rate to 5.75% from 6.25%. The Fed acknowledged that the stock market turbulence that has pulled the Dow by hundreds of points a day was posing a risk to economic growth.
But the central bank made no mention of lowering its target for the federal funds rate, which has stood at 5.25% for more than a year. The fed funds rate determines the rates that banks charge each other for loans, while the discount rate only covers loans the Fed makes to banks. Many strategists believe the market won't settle down until the Fed lowers the fed funds rate target, considered a more significant benchmark.
Traders who bet on how the Fed might alter rates now expect the central bank will lower the benchmark fed funds rate at its next meeting on Sept. 18. Some investors are hoping for a cut in that benchmark rate even sooner.
"If the cut in the discount rate succeeds in restoring confidence, then perhaps there is no need for the Fed to cut rates at the Sept. 18 meeting," said John Lonski, chief economist of Moody's Investor Service. He added, though, that the key line in the Fed's statement Friday was its willingness to take more steps to prevent market volatility from harming the economy.
"That means the Fed is prepared to make a rate cut if stability doesn't come," Lonski said.
Thursday, August 16, 2007
FAKE DIABETES TEST STRIPS TRACED TO CHINA
From the International Herald Tribune:
A global manhunt begun by Johnson & Johnson has traced to China counterfeit versions of an at-home diabetes test used by 10 million Americans to take sensitive measurements of blood sugar levels.
Potentially dangerous copies of the OneTouch Test Strip sold by Johnson & Johnson's LifeScan unit surfaced in U.S. and Canadian pharmacies last year, according to federal court documents unsealed in June but only recently discovered by Bloomberg News.
Court filings disclose, for the first time, that China is the source of about one million phony test strips, which have turned up in at least 35 states and in Canada, Greece, India, Pakistan, the Philippines, Saudi Arabia and Turkey.
Fake medicines are a $32 billion global business, said the World Health Organization, and the Food and Drug agency said it had run 54 counterfeit investigations in 2006, almost twice as many as in the year before.
Records seized from the importers show the counterfeit strips were bought from Henry Fu and his company, Halson Pharmaceutical, which, according to its Internet site, is based in Shanghai.
Halson's Web site says that the company distributes and manufactures medical supplies like syringes, and is run by Fu, who, according to a court order, is also known as Su Zhi Yong. Fu was arrested by the Chinese authorities and remains in prison in China, awaiting resolution of his case in the People's Court of Shanghai.
A global manhunt begun by Johnson & Johnson has traced to China counterfeit versions of an at-home diabetes test used by 10 million Americans to take sensitive measurements of blood sugar levels.
Potentially dangerous copies of the OneTouch Test Strip sold by Johnson & Johnson's LifeScan unit surfaced in U.S. and Canadian pharmacies last year, according to federal court documents unsealed in June but only recently discovered by Bloomberg News.
Court filings disclose, for the first time, that China is the source of about one million phony test strips, which have turned up in at least 35 states and in Canada, Greece, India, Pakistan, the Philippines, Saudi Arabia and Turkey.
Fake medicines are a $32 billion global business, said the World Health Organization, and the Food and Drug agency said it had run 54 counterfeit investigations in 2006, almost twice as many as in the year before.
Records seized from the importers show the counterfeit strips were bought from Henry Fu and his company, Halson Pharmaceutical, which, according to its Internet site, is based in Shanghai.
Halson's Web site says that the company distributes and manufactures medical supplies like syringes, and is run by Fu, who, according to a court order, is also known as Su Zhi Yong. Fu was arrested by the Chinese authorities and remains in prison in China, awaiting resolution of his case in the People's Court of Shanghai.
Wednesday, August 15, 2007
MATTEL CHINESE-MADE TOY RECALL UP TO NEARLY 19 MILLION
From CNN Money:Mattel Inc. Tuesday recalled more than 9 million toys made in China and sold in the United States, including "Polly Pocket" and "Batman" dolls and other popular figures, because of loose magnets and lead paint - its second major recall in less than a month.
The recall affects 9.58 million imported toys sold at toy stores, discount stores and other retailers nationwide dating back as far back as May 2003. Worldwide, Mattel said the recall includes nearly 19 million toys. The company said the recalls would cost about $30 million.
The recall is the latest development in the growing crisis over the safety of Chinese products. Chinese officials have gone out of their way to stress the safety and quality of its exports, blaming the problems on a small number of companies. Earlier this month, China's Commerce ministry blacklisted 400 export firms following the recent product safety scares.
Saturday, August 11, 2007
MOTOROLA PINS HOPES ON NEW RAZR
From Howard Wolinsky of the Chicago Sun-Times:Motorola said Friday the next generation of its hugely popular RAZR thin clamshell phone -- one of the Schaumburg company's great hopes to spark a turnaround -- will be available from all major mobile phone carriers within 60 days.
RAZR2 will be available starting in the next two weeks. Tracey Thiele, Motorola spokeswoman, said that by October, the new RAZR2 will be sold by AT&T, Sprint, T-Mobile and Verizon, the top national carriers, and Alltel and Chicago-based U.S. Cellular, the regional carriers.
RAZR2 is part of a new product lineup, which Motorola hopes can turn around the company. Motorola, which invented the cell phone in 1973, has suffered a series of setbacks, dropping in the last quarter to No. 3 in the industry.
MILK PRICES SOARING
From USA Today:
It's cheaper than oil and, barring a global mad cow crisis, we'll probably never run out of it. But milk has one thing in common with oil: It's trading at record highs.
Milk prices hit a record last month in the United States, where consumers paid an average $3.80 a gallon, compared to $3.29 in January, according to the U.S. Department of Agriculture. It forecasts prices will remain high throughout the year.
International dairy prices increased 46% between November 2006 and April 2007, with milk powder prices increasing even faster, according to the Food and Agriculture Organization.
The boom in biofuels is also pushing up corn prices and, as a result, making animal feed more expensive. Farmers have responded by raising milk prices. Corn futures indicate that the price of corn will remain high this year, according to the Washington-based International Dairy Foods Association. Prices have also risen for soybeans, another feed crop, it said.
It's cheaper than oil and, barring a global mad cow crisis, we'll probably never run out of it. But milk has one thing in common with oil: It's trading at record highs.
Milk prices hit a record last month in the United States, where consumers paid an average $3.80 a gallon, compared to $3.29 in January, according to the U.S. Department of Agriculture. It forecasts prices will remain high throughout the year.
International dairy prices increased 46% between November 2006 and April 2007, with milk powder prices increasing even faster, according to the Food and Agriculture Organization.
The boom in biofuels is also pushing up corn prices and, as a result, making animal feed more expensive. Farmers have responded by raising milk prices. Corn futures indicate that the price of corn will remain high this year, according to the Washington-based International Dairy Foods Association. Prices have also risen for soybeans, another feed crop, it said.
Friday, August 10, 2007
FEDERAL RESERVE PUSHES $38 BILLION INTO CIRCULATION
From Reuters:
The U.S. Federal Reserve provided the banking system with $38 billion on Friday, the largest amount of liquidity since the days after the September 11 attacks six years ago, adding ample funds for the second day running as financial markets fretted over credit conditions.
In its statement after Friday's first market operation, the Fed said it would provide liquidity as needed "to facilitate the orderly functioning of financial markets.
"In current circumstances, depository institutions may experience unusual funding needs because of dislocations in money and credit markets," it said.
The last time the central bank made a similar statement was after the September 11, 2001, terror attacks, when it also said it would do what was necessary to keep markets functioning normally. The Fed made a similar vow in October 1987 following a precipitous decline in U.S. stock markets.
Central banks worldwide have now injected at least $326.3 billion in the past 48 hours to prevent markets from spinning into a global liquidity squeeze. Short-term interest rates spiked in response to banks' decreased willingness to lend to each other.
The U.S. Federal Reserve provided the banking system with $38 billion on Friday, the largest amount of liquidity since the days after the September 11 attacks six years ago, adding ample funds for the second day running as financial markets fretted over credit conditions.
In its statement after Friday's first market operation, the Fed said it would provide liquidity as needed "to facilitate the orderly functioning of financial markets.
"In current circumstances, depository institutions may experience unusual funding needs because of dislocations in money and credit markets," it said.
The last time the central bank made a similar statement was after the September 11, 2001, terror attacks, when it also said it would do what was necessary to keep markets functioning normally. The Fed made a similar vow in October 1987 following a precipitous decline in U.S. stock markets.
Central banks worldwide have now injected at least $326.3 billion in the past 48 hours to prevent markets from spinning into a global liquidity squeeze. Short-term interest rates spiked in response to banks' decreased willingness to lend to each other.
Friday, April 27, 2007
U.S. GDP GROWTH SLOWS TO 1.3%
Many economists had predicted that first-quarter GDP growth would be 1.8%, but the data released this morning showed even slower growth coming in at 1.3%. That is the worst quarterly performance since Q1 2003.
From USA Today:
The fresh reading on gross domestic product, released by the Commerce Department on Friday, was even weaker than the 2.5% annual growth rate logged in the final three months of last year. The new figures underscored just how much momentum the economy has been losing as it copes with the strain of the troubled housing market, which has made some businesses more cautious in their spending.
A price gauge favored by the Federal Reserve — personal consumption expenditures excluding food and energy items — increased at a 2.2% annual rate in the first quarter, slightly ahead of forecasts for a 2.1% advance. That was up substantially from the fourth quarter's 1.8% annual rate and is likely to keep Fed policymakers wary about the potential for a pickup in inflation.
From USA Today:
The fresh reading on gross domestic product, released by the Commerce Department on Friday, was even weaker than the 2.5% annual growth rate logged in the final three months of last year. The new figures underscored just how much momentum the economy has been losing as it copes with the strain of the troubled housing market, which has made some businesses more cautious in their spending.
A price gauge favored by the Federal Reserve — personal consumption expenditures excluding food and energy items — increased at a 2.2% annual rate in the first quarter, slightly ahead of forecasts for a 2.1% advance. That was up substantially from the fourth quarter's 1.8% annual rate and is likely to keep Fed policymakers wary about the potential for a pickup in inflation.
Thursday, April 26, 2007
WENDY'S FOR SALE?
Wendy's has been in a slump for quite some time and the board is considering selling the company to the highest bidder.From WSJ.com:
The Dublin, Ohio, company said yesterday that its board formed a special committee of independent directors to investigate all strategic options for Wendy's. The company said the committee is weighing a possible sale, merger or other "business combination," and contemplating changing Wendy's strategic plan and capital structure. Chairman James V. Pickett will lead the committee. There has been previous speculation that Wendy's could be sold.
The Wendy's board review could make it more difficult for Chief Executive Kerrii Anderson to rally investors around the turnaround plan she has been pushing for the past year. Ms. Anderson has made numerous presentations to Wall Street touting Wendy's new strategy of stronger marketing, more new products, sharper store operations and better relationships with the franchisees who own Wendy's outlets. Her changes have helped lift Wendy's same-store sales, a key measure of the company's performance.
But Wall Street is concerned that her growth targets may be overly optimistic, and that the plan relies on succeeding in areas where Wendy's has failed before. For instance, executives have pinned some of Wendy's projected sales growth on a new breakfast menu that Wendy's wants to have in more than half of its North American locations by next year. Wendy's tried a breakfast menu in the 1980s and it flopped.
Wendy's said its first-quarter net income fell 71% to $14.7 million. Revenue rose 2%.
LASALLE BANK SALE TO BANK OF AMERICA STILL ON TRACK?
Dutch parent ABN entered into an agreement to sell Chicago-based LaSalle Bank to Bank of America Sunday (some reports list Monday), but that deal may be in jeopardy now that Royal Bank of Scotland has formed a consortium that offered $98.58 billion for all ABN banking assets, which is considerably higher than the $88.35 billion offered by Barclays. In an unusually restrictive contract clause ABN's sale of LaSalle to Bank of America will become permanent on May 7 and cannot be reversed, making consideration of the RBS offer an urgent matter.
From SunTimes.com:
The uncertainty centers on whether ABN Amro's surprise move Monday to sell LaSalle Bank Corp. to Bank of America Corp. for $21 billion, as part of its deal with Barclays, can be undone.
ABN Amro said Wednesday other banks have 14 days to submit superior bids for LaSalle. If any does, Bank of America then has five days to match that bid; if it fails to do so, it will receive a $200 million breakup fee.
WSJ.com
From SunTimes.com:
The uncertainty centers on whether ABN Amro's surprise move Monday to sell LaSalle Bank Corp. to Bank of America Corp. for $21 billion, as part of its deal with Barclays, can be undone.
ABN Amro said Wednesday other banks have 14 days to submit superior bids for LaSalle. If any does, Bank of America then has five days to match that bid; if it fails to do so, it will receive a $200 million breakup fee.
WSJ.com
Wednesday, April 25, 2007
TOYOTA #1 IN GLOBAL VEHICLE SALES IN 1ST QUARTER
There is a new leader in global car sales according to data from 2007 first quarter sales.From The Washington Post:
General Motors' 76-year reign as the world's largest automaker is over.
Fifty years after its cars first hit U.S. shores, Japanese automaker Toyota has surged past the 20th-century American colossus, selling more vehicles worldwide than GM during the first three months of this year.
The global sales benchmark had been looming for years, and its realization was only a matter of time, analysts said. In the United States, GM still sells the most vehicles, owning about 23 percent of the market, compared with Toyota's 16 percent.
GM had managed to hold on to its shrinking lead over Toyota in recent years, but the two companies are heading in opposite directions. GM has lost $12.4 billion over the past two years and plans to close 12 North American plants by the end of next year. By comparison, Toyota reported a profit of about $12 billion during its most recent fiscal year and expects to open its eighth North American factory in 2010.
For the first three months of 2007, Toyota sold 2.35 million vehicles worldwide, compared with 2.26 million for GM. Notably, Toyota's sales were up 9.2 percent over the first three months of 2006, while GM's were up 3 percent.
Last year, GM sold 9.1 million vehicles to Toyota's 8.8 million.
Toyota expects to sell 9.3 million cars in 2007; GM does not provide forecasts.
Saturday, April 21, 2007
VIOXX CASES ON HOLD IN TEXAS DUE TO NEW RULING
Merck, the manufacturer of Vioxx, is the beneficiary, if only temporarily, of a judge's ruling that the 1,000 personal injury lawsuits in Texas must be delayed or possibly even thrown out because of 2003 tort reform law in that state.
From the AP at Yahoo:
From the AP at Yahoo:
State District Judge Randy Wilson, based in Harris County, granted a motion by Merck & Co. Inc., the drug's manufacturer, to dismiss part of a lawsuit filed by Ruby Ledbetter.
Merck's attorneys argued a 2003 Texas law prevents Ledbetter from claiming she wasn't properly warned about Vioxx.
The law, passed as part of tort reform efforts, says a drug manufacturer is not liable in allegations it failed to provide sufficient warnings about its product if the drug in question came with warnings approved by the Food and Drug Administration.
The law, passed as part of tort reform efforts, says a drug manufacturer is not liable in allegations it failed to provide sufficient warnings about its product if the drug in question came with warnings approved by the Food and Drug Administration.
Friday's ruling put Ledbetter's case, which was set to go to trial in May, on hold.
But Travis Sales, one of Merck's attorneys, and Tommy Fibich, one of Ledbetter's attorneys, both said Wilson had previously told lawyers in the case that such a decision would put all Texas cases on hold until appeals courts rule on the issue.
Wilson, who is presiding over all Vioxx lawsuits filed in Texas, said in his ruling that virtually all the Texas cases allege that Merck failed to provide an adequate warning.Friday, April 20, 2007
CHINESE ECONOMY CONTINUES GROWING AT BRISK PACE
GDP data released by the Chinese National Bureau of Statistics Thursday shows that the Chinese economy continues to grow at an amazing pace, up 11.1% for the first quarter of 2007 compared to the same time-frame for 2006.From The New York Times:
The surge in growth is almost certain to force Beijing to step up efforts to cool the economy. Pressure is also mounting on officials to allow the value of the currency, the yuan, to appreciate more quickly.
Fueled by soaring exports and huge investments in infrastructure, factories and energy supplies, China could soon overtake Germany to become the world’s third-largest economy, behind those of the United States and Japan.
The burst of growth, one of the largest in a decade, came on the heels of four consecutive years of double-digit economic growth, including an increase last year of 10.7%, the fastest annual growth in a decade.
The statistics bureau said that retail sales rose 15%, industrial production was up 18% and exports jumped 28%.
CRIME DOES NOT PAY FOR QWEST'S NACCHIO
Former Qwest CEO Joe Nacchio was convicted yesterday on 19 insider trading counts of the 42 with which he had initially been prosecuted. Each charge carries with it a maximum of 10 years in prison and $1 million fine.From BusinessWeek:
In the latest in a series of convictions against corporate executives, one-time CEO Joe Nacchio was found guilty of illegally selling $52 million in stock amid an accounting scandal that nearly sank Qwest Communications.
Nacchio left the federal courthouse with his wife and son Michael after Thursday's verdict, declining to comment yet determined to appeal the 19 insider trading convictions, each of which carries a sentence of up to 10 years in prison and a $1 million fine.
Nacchio is one of a handful of former Qwest executives who have been convicted of criminal charges stemming from a multibillion-dollar scandal that forced the Denver-based telecommunications company to restate $2.2 billion of revenue.
He also is the latest to be convicted as part of the government's push to punish white-collar executives stemming from accounting fraud at companies from Enron to WorldCom.
"'Convicted felon Joe Nacchio' has a very nice ring to it," boasted Troy Eid, the U.S. attorney for Colorado.
The Justice Department has gone after a number of corporate executives in cases involving accounting and fraud scandals in the late 1990s and 2000 that sparked outrage among investors.
Former Cendant Corp. Chairman Walter Forbes is serving more than 12 years in prison and has been ordered to pay $3.28 billion in restitution. He was convicted of conspiracy to commit securities fraud and other charges in a massive fraud scheme that cost the travel and real estate company and its investors more than $3 billion.
Former WorldCom chief Bernard Ebbers is serving a 25-year prison sentence for his role in the fraud that drove that Clinton, Miss.-based company into bankruptcy in 2002.
Former Enron chief executive Jeffrey Skilling is serving 24 years and four months in prison for fraud and other crimes in the collapse of the former energy giant. Enron founder Ken Lay also was convicted, but a judge vacated that decision when Lay died of a heart attack last year.
HealthSouth Corp. founder Richard Scrushy was acquitted of all charges in a $2.7 billion fraud during his tenure at HealthSouth.
Thursday, April 19, 2007
TICKETMASTER SUES EBAY/STUBHUB
Ticketmaster has sued eBay, parent of StubHub, for violating its exclusive right to sell some tickets at certain venues. From WSJ.com:Intensifying its long-simmering battle with the burgeoning aftermarket in concert and sporting-events tickets, Ticketmaster yesterday sued eBay Inc. and its StubHub subsidiary, alleging that the reselling site interfered with the company's contractual rights.
While the StubHub lawsuit, filed in Los Angeles County Superior Court, focuses on a particular music tour, it signals Ticketmaster's growing impatience with the so-called secondary ticketing market that has blossomed in recent years as the Internet has made it easy for individuals and companies alike to buy and resell tickets originally generated by Ticketmaster.
The suit alleges that StubHub is currently selling "official premium tickets" to the coming Lynyrd Skynyrd/Hank Williams Jr. "Rowdy Frynds" tour. Sales of those tickets to the public, the lawsuit charges, violates Ticketmaster's exclusive right to sell tickets to events at the venues on the tour, including the Conseco Fieldhouse in Indianapolis and the Palace of Auburn Hills, Mich.
The suit further charges that StubHub, in conjunction with other, unnamed parties, effectively extracted tickets from various client venues by threatening that if tickets weren't made available, those venues "might not be considered as venues for future live-entertainment events."
The suit didn't specify how many tickets were involved. But it does allege that such practices were designed "as part of a larger scheme to diminish Ticketmaster's role in the sale of tickets." Ticketmaster controls the ticket inventory to the vast majority of high-profile concerts and sporting events. Its surcharges have long been the subject of anger on the part of fans.
Ticketmaster executives estimate that around 10% of the most desirable sports and concert tickets are bought by scalpers rather than fans.
Wednesday, April 18, 2007
THE WORLD ACCORDING TO LARRY SUMMERS
Lawrence H. Summers, the former Harvard president and chief economist at the World Bank, may not be overly popular in the United States right now, but he is the toast of Asia, giving keynote speeches at major conferences in China, India, Singapore, and Hong Kong, as well as serving as the only American on a panel mapping the future of the Asian Development Bank.From The New York Times:
In a series of visits to China, India, Singapore and Hong Kong since early 2006, Mr. Summers has reiterated several themes that have special resonance in Asia, but have yet to be widely accepted in the United States.
Among them are the idea that growth and changes in Asia are the most important thing to happen during our lifetimes, that the United States and Europe have not yet appreciated the impact of these changes and that the global imbalances from the United States’ current-account deficit — nearly $1 trillion in 2006 — could have severe consequences.
Mr. Summers has been sharply critical of current American fiscal policy and the way that Asia sustains borrowing by the United States by continuing to purchase government debt. During a visit to Mumbai in March last year, Mr. Summers warned the Reserve Bank of India of the United States’ “unsustainable and dangerous” current-account deficit.
In Beijing this January, he asked hundreds of economists and policy makers at a Global Development Network conference to consider the fact that $2 trillion from developing Asia, invested in United States Treasury bills, was making a “zero real return.” Imagine instead, he said “all the opportunities in these countries for productive investment.”
Mr. Summers also visited Singapore for the International Monetary Fund conference in September, then stopped in Hong Kong, where he told those attending an Asia Society dinner that 300 years from now, what will be seen as the most important event of these times will not be the end of the cold war, the terrorist attacks of Sept. 11, 2001, or the war in Iraq, but the “the rise of Asia and all that it meant for people in Asia and all that it meant for the world system.”
The controversy at Harvard, where Mr. Summers’s comments that “intrinsic aptitude” could explain why fewer women than men reach the top ranks in university math and science led to his resignation in February 2006, hardly registered in Asia.
“The gender issues didn’t get much play here,” Mr. Gokarn said.
SURVEY REVEALS MOST SATISFYING CAREERS
From LiveScience at Yahoo!:
Firefighters, the clergy and others with professional jobs that involve helping or serving people are more satisfied with their work and overall are happier than those in other professions, according to results from a national survey.
“The most satisfying jobs are mostly professions, especially those involving caring for, teaching and protecting others and creative pursuits,” said Tom Smith, director of the General Social Survey (GSS) at the National Opinion Research Center at the University of Chicago.
The 2006 General Social Survey is based on interviews with randomly selected people who collectively represent a cross section of Americans. In the current study, interviewers asked more than 27,000 people questions about job satisfaction and general happiness. Individuals' level of contentment affects their overall sense of happiness, Smith said.
Here are the Top 10 most gratifying jobs and the percentage of subjects who said they were very satisfied with the job:
Clergy—87 percent percent
Firefighters—80 percent percent
Physical therapists—78 percent percent
Authors—74 percent
Special education teachers—70 percent
Teachers—69 percent
Education administrators—68 percent
Painters and sculptors—67 percent
Psychologists—67 percent
Security and financial services salespersons—65 percent
Operating engineers—64 percent
Office supervisors—61 percent
Here are the 10 least gratifying jobs, where few participants reported being very satisfied:
Laborers, except construction—21 percent
Apparel clothing salespersons—24 percent
Handpackers and packagers—24 percent
Food preparers—24 percent
Roofers—25 percent
Cashiers—25 percent
Furniture and home-furnishing salespersons—25 percent
Bartenders—26 percent
Freight, stock and material handlers—26 percent
Waiters and servers—27 percent
Firefighters, the clergy and others with professional jobs that involve helping or serving people are more satisfied with their work and overall are happier than those in other professions, according to results from a national survey.
“The most satisfying jobs are mostly professions, especially those involving caring for, teaching and protecting others and creative pursuits,” said Tom Smith, director of the General Social Survey (GSS) at the National Opinion Research Center at the University of Chicago.
The 2006 General Social Survey is based on interviews with randomly selected people who collectively represent a cross section of Americans. In the current study, interviewers asked more than 27,000 people questions about job satisfaction and general happiness. Individuals' level of contentment affects their overall sense of happiness, Smith said.
Here are the Top 10 most gratifying jobs and the percentage of subjects who said they were very satisfied with the job:
Clergy—87 percent percent
Firefighters—80 percent percent
Physical therapists—78 percent percent
Authors—74 percent
Special education teachers—70 percent
Teachers—69 percent
Education administrators—68 percent
Painters and sculptors—67 percent
Psychologists—67 percent
Security and financial services salespersons—65 percent
Operating engineers—64 percent
Office supervisors—61 percent
Here are the 10 least gratifying jobs, where few participants reported being very satisfied:
Laborers, except construction—21 percent
Apparel clothing salespersons—24 percent
Handpackers and packagers—24 percent
Food preparers—24 percent
Roofers—25 percent
Cashiers—25 percent
Furniture and home-furnishing salespersons—25 percent
Bartenders—26 percent
Freight, stock and material handlers—26 percent
Waiters and servers—27 percent
Tuesday, April 17, 2007
NEW SCAM RIPS OFF ONLINE TAX FILERS OF REFUNDS
From ABC News:
Just before the deadline for personal income tax filings, the Internal Revenue Service is warning consumers of a scam that targets the majority of American taxpayers who file online.
The scheme is so new, the government has no idea how many taxpayers have been bilked. The scam takes advantage of the federal "Free File" program, in which the IRS partners with software makers to allow taxpayers who earn up to $52,000 in taxable income to file electronically for free.
It works like this: Internet grifters send e-mails, luring taxpayers to Web pages that look like IRS-approved sites where they can file their taxes electronically. The scam artists send in the tax returns after redirecting refunds to their own bank accounts instead of those of the taxpayers.
Steven Peisner runs a non-profit identity theft support organization called sellitSAFE.com. He said a 24-year-old Northern California woman contacted him recently after someone else pocketed her $4,000 refund.
"She's pretty much in shock," he said. "And I think that being April 15 is today, I think we have just scratched the surface. And this is just the first victim that I've come in contact with right now. I think in the next couple of months we are going to see hundreds, if not thousands, of victims start to surface. And I think it's going to be a much bigger problem in the next few months."
Monday, April 16, 2007
TOP EXECUTIVE PAY MUCH EASIER TO FIND
In the past, finding out what the CEO or any of the other top few executives of a company made required piecing together data from different documents into a sort of puzzle. It took time and patience, and you never felt certain that you had not missed something. Now, thanks to new laws that require clear disclosure of the pay of the top five executives of publicly traded companies, the information can be found easily and instantly. USA Today lists the total compensation for the CEOs of the largest 150 companies in a simple chart today.
Saturday, April 14, 2007
GOOGLE ACQUIRES DOUBLECLICK
From The New York Times:
Google agreed to its largest acquisition yesterday, reaching a deal to purchase DoubleClick, the online advertising company, from two private equity firms for $3.1 billion in cash, almost double what it paid for YouTube last year. And perhaps just as important, the deal kept DoubleClick from the hands of Microsoft.
For Google, the purchase is another step in its transformation from a search engine into an advertising powerhouse. DoubleClick, which is based in New York City, specializes in software for display advertising and has close relationships with Web publishers, advertisers and advertising agencies.
The sale of DoubleClick involved weeks of negotiation that included at one point Yahoo, AOL and, most prominently, Microsoft, which has been trying to position itself as an advertising rival to Google. Even though Microsoft has more cash on hand than Google, the company was ultimately outbid.
“Keeping Microsoft away from DoubleClick is worth billions to Google,” an analyst with RBC Capital Markets, Jordan Rohan, said. “Yet again, Microsoft is on the sidelines and away from the action.”
Friday, April 13, 2007
CARLOS SLIM HELU WORLD'S SECOND-RICHEST MAN
Carlos Slim Helu has passed Warren Buffett and now ranks just behind Bill Gates as the world's second-richest man. The Mexican telecom tycoon earned $4 billion in the past two months and is less than $3 billion away from taking the number one spot from Gate.DON IMUS FIRED FROM CBS RADIO
Don Imus raised over $1.3 million for charity today on CBS Radio-owned WFAN in New York, then was fired by the company for the inappropriate remarks he made last week.
From The New York Times:
For four and a half hours this morning, he turned his radio program into a live fundraiser for three charities — two benefiting children with cancer, and the other for families that have lost babies to sudden infant death syndrome — an endeavor he has undertaken each of the last 18 years.
Among the guests were children and parents who had been the beneficiaries of his efforts — particularly the Imus Cattle Ranch for Kids with Cancer, a program that the host founded on his New Mexico ranch along with his wife, Deirdre.
“It was an honor to be at your son’s funeral,” he said to one woman, whose cancer-stricken son had been a guest at what is essentially a western-themed camp for sick children.
At several points, he lashed out at the “hypocrisy” of the media coverage of the fallout from his remarks, and “the lack of support from people like Harold Ford,” the former Tennessee congressman who is black and whom the talk show host had touted repeatedly throughout his recent, failed bid for a Senate seat.
He also expressed bitterness that MSNBC had “pulled the plug” on televising his program less than 12 hours before the fundraiser was to begin. “They got their pound of flesh and made their decision,” he said.
And yet, Mr. Imus also emphasized that, ultimately, he alone was to blame for his predicament.
"I said a stupid, idiotic thing that hurt these kids,” he said of the Rutgers players. “If I hadn’t have said it, we wouldn’t be here. So let’s stop whining about it.”
From The New York Times:
For four and a half hours this morning, he turned his radio program into a live fundraiser for three charities — two benefiting children with cancer, and the other for families that have lost babies to sudden infant death syndrome — an endeavor he has undertaken each of the last 18 years.
Among the guests were children and parents who had been the beneficiaries of his efforts — particularly the Imus Cattle Ranch for Kids with Cancer, a program that the host founded on his New Mexico ranch along with his wife, Deirdre.
“It was an honor to be at your son’s funeral,” he said to one woman, whose cancer-stricken son had been a guest at what is essentially a western-themed camp for sick children.
At several points, he lashed out at the “hypocrisy” of the media coverage of the fallout from his remarks, and “the lack of support from people like Harold Ford,” the former Tennessee congressman who is black and whom the talk show host had touted repeatedly throughout his recent, failed bid for a Senate seat.
He also expressed bitterness that MSNBC had “pulled the plug” on televising his program less than 12 hours before the fundraiser was to begin. “They got their pound of flesh and made their decision,” he said.
And yet, Mr. Imus also emphasized that, ultimately, he alone was to blame for his predicament.
"I said a stupid, idiotic thing that hurt these kids,” he said of the Rutgers players. “If I hadn’t have said it, we wouldn’t be here. So let’s stop whining about it.”
MARCH SAME-STORE SALES REPORT
Same-store sales results are in for March and the results are mixed. Same-store sales are calculated only for stores that have been in business for more than one year. Here is a breakdown of some popular retailers.
March 2007
Nordstrom +15%
Target +12%
J.C. Penney +10.6%
Saks +10.1%
Limited +8%
Abercrombie & Fitch +7%
Costco +6%
Wal-Mart +4%
The Wal-Mart sales increase was better than expected, but the company has cautioned that April will likely be flat and that quarterly results may not meet expectations.
March 2007
Nordstrom +15%
Target +12%
J.C. Penney +10.6%
Saks +10.1%
Limited +8%
Abercrombie & Fitch +7%
Costco +6%
Wal-Mart +4%
The Wal-Mart sales increase was better than expected, but the company has cautioned that April will likely be flat and that quarterly results may not meet expectations.
Wednesday, April 11, 2007
IMUS DROPPED BY MSNBC
Just two days after suspending Don Imus for two weeks for inappropriate remarks, NBC announced today that MSNBC will no longer simulcast the "Imus in the Morning" radio program. Earlier Wednesday American Express, which spent $1.2 million advertising on the show, pulled their ads. General Motors had already stopped advertising on the show for unrelated reasons, but did indicate that they would no longer consider advertising on an Imus program. At this point, Imus is still employed by WFAN, a CBS radio station in New York, where his program brings in 25% of all advertising dollars for the station.The New York Times
EIA PREDICTS $2.87 AS HIGH FOR SUMMER GAS
The Energy Information Administration issued a report indicating the gasoline will average between $2.81 per gallon this summer. That compares favorably to the $2.84 Americans paid last summer. In addition, the group predicted that the summer high for gas will be $2.87 in May, but many analysts think that the EIA prediction is too low. Gas prices averaged $2.80 last week.USA Today
CITIGROUP CUTS 17,000 JOBS, SAVES $2.1 BILLION IN 2007
From WSJ.com:
Citigroup Inc., in what's considered its first major overhaul since its formation a decade ago, announced it will save $2.1 billion in 2007 by eliminating 17,000 positions.
The New York financial services giant's long-awaited restructuring will eliminate certain layers of management and reduce its corporate center. Back-office, middle-office and corporate functions will be consolidated, and more than 9,500 jobs will be moved to lower-cost locations, domestically and internationally.
Citigroup sees savings of $3.7 billion in 2008 and $4.6 billion in 2009. It will take a charge of $871 million in the first quarter and pretax charges of $200 million over the rest of 2007. The company will release its first-quarter results Monday.
Over the past year, Citigroup's stock has underperformed hometown rival J.P. Morgan and Bank of America Corp. Last summer, Citigroup's largest individual shareholder, Prince Alwaleed bin Talal, demanded that the company take "draconian" steps to reduce expenses.Tuesday, April 10, 2007
IMUS REMARKS IMPACT BOTTOM LINE
Last Wednesday radio and television personality Don Imus made inappropriate remarks on his "Imus in the Morning" radio program broadcast on radio throughout the country and on television on MSNBC. By Friday Al Sharpton and Jesse Jackson among others were calling on Mr. Imus to be fired from his broadcasting job. On Monday he was suspended for two weeks, but his employers reserve the right to take further action. Today at least three advertisers, including heavyweight Procter & Gamble, pulled their ads from his show.From WSJ.com:
The advertisers' reaction suggests fallout over Mr. Imus's remarks could persist. Marketers aren't saying whether their pullouts are permanent, and they are likely to watch carefully to see if the fuss dies down. But the withdrawal of more advertisers could potentially undercut support for Mr. Imus returning to the air. Civil-rights groups such as the NAACP have called for him to be fired, while the Rev. Al Sharpton is calling for advertisers and guests to boycott the program.
Mr. Imus has long been known for his irreverent humor, but he has come under intense criticism since referring to the Rutgers team, which lost to the University of Tennessee in the NCAA championship last week, as "nappy-headed hos" during his show. Mr. Imus went onto Mr. Sharpton's radio program on Monday to apologize, but the controversy hasn't let up. Talkers, a trade publication, estimates Mr. Imus has a radio audience of about 2.25 million, placing him among the nation's top 25 radio personalities.
Monday, April 02, 2007
EMI AND APPLE TO OFFER DRM-FREE SONGS
From USA Today:Apple and EMI Music shook up the music industry Monday by announcing plans to sell more than 150,000 digital songs without copy protection.
The songs — from Coldplay, Norah Jones, and other artists on the giant EMI record label — can be freely copied. They'll play on many different kinds of music players and can be easily burned to CD.
But music-lovers will pay more for them. iTunes, Apple's digital music store, plans to offer the songs in May for $1.29 each. Standard iTunes songs, which will still be available, cost 99 cents.
Apple CEO Steve Jobs says other record labels will be forced to follow EMI's lead. "I expect to have 2.5 million to 5 million (copy protection-free) songs by the end of the year," Jobs says.
CHICAGO TRIBUNE SOLD TO SAM ZELL
From ChicagoTribune.com:
In addition, the Tribune said it intends to sell the Chicago Cubs and its 25 percent stake in local sports cable channel Comcast SportsNet Chicago.
After an epic corporate drama, Chicago's Tribune Co. sold itself in a deal that puts the 159-year-old media conglomerate in the hands of the city's most iconoclastic entrepreneur, setting up a high-stakes bet that a pillar of the nation's old-media establishment can tug itself into the digital future without toppling over.
Early Monday, following a weekend of heated negotiations, the company's board accepted a revised $34-dollar-a-share proposal from Chicago real estate magnate Sam Zell to take the company private in a complex, $8.2 billion deal structured around an employee stock ownership plan.
In addition, the Tribune said it intends to sell the Chicago Cubs and its 25 percent stake in local sports cable channel Comcast SportsNet Chicago.
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