U.S. INCOME GAP GETS WIDER IN 2005

This is from a New York Times article describing a data analysis by Professor Emmanuel Saez of the University of California Berkeley and Professor Thomas Piketty of the Paris School of Economics:

• Income inequality grew significantly in 2005, with the top 1 percent of Americans — those with incomes that year of more than $348,000 — receiving their largest share of national income since 1928.
  
• The top 10 percent, roughly those earning more than $100,000, also reached a level of income share not seen since before the Depression.
  
• While total reported income in the United States increased almost 9 percent in 2005, the most recent year for which such data is available, average incomes for those in the bottom 90 percent dipped slightly compared with the year before, dropping $172, or 0.6 percent.
  
• The gains went largely to the top 1 percent, whose incomes rose to an average of more than $1.1 million each, an increase of more than $139,000, or about 14 percent.
  
• The top 300,000 Americans collectively enjoyed almost as much income as the bottom 150 million Americans.
  
• Per person, the top 300,000 Americans received 440 times as much as the average person in the bottom half earned, nearly doubling the gap from 1980.
  
• The top 10 percent of Americans collected 48.5 percent of all reported income in 2005. That is an increase of more than 2 percentage points over the previous year and up from roughly 33 percent in the late 1970s. The peak for this group was 49.3 percent in 1928.
  
• The top 1 percent received 21.8 percent of all reported income in 2005, up significantly from 19.8 percent the year before and more than double their share of income in 1980. The peak was in 1928, when the top 1 percent reported 23.9 percent of all income.
  
• The top tenth of a percent reported an average income of $5.6 million, up $908,000, while the top one-hundredth of a percent had an average income of $25.7 million, up nearly $4.4 million in one year.

NORTH KOREA ISSUING COUNTERFEIT U.S. CURRENCY

Bloomberg is reporting today that one of the problems holding up the six-party talks over North Korea's nuclear weapons program is the accusation that the North Korean government is printing counterfeit U.S. $100 bills. The United States has known of the fake $100 bills which are often called "supernotes" since 1989 and has confiscated approximately $50 million of the counterfeit bills. A Korean newspaper/website doing research on a story about the supernotes was able to obtain one, which is pictured below. The bills can be purchased for $70 each and are very difficult to detect. The United States has frozen North Korean assets held in at least one bank due to concerns that the bank is helping to launder money for the North Korean government. Many have speculated since 1989 that the United States will issue new and different $100 bills and might require that all old $100 bills be exchanged and destroyed, rendering the counterfeits worthless.

Daily NK

MERCK WINS ILLINOIS VIOXX TRIAL

An Illinois jury ruled today that Merck's drug Vioxx was not responsible for the deadly heart attack of a 52-year-old woman in 2003. Merck had argued that the woman's weight and other health issues were the primary reason for her death. The victory for the drug maker was the 10th out of 15 trials. There are now over 27,000 personal injury lawsuits and another 265 potential class-action lawsuits filed against Merck all stemming from the formerly popular drug Vioxx. Merck has set aside $1.64 billion to fight the cases.

USA Today

VONAGE MUST STOP USING VERIZON PATENTS

A federal judge issued a permanent injunction against Vonage forcing the VoIP phone company to stop using Verizon's patented technology. From The New York Times:

Judge Claude Hilton said an injunction, which followed a jury decision that Vonage had infringed on three Verizon patents, is required because simply providing monetary damages ''does not prevent continued erosion of the client base of the plaintiff.''

Hilton said he will not formally enter the injunction for another two weeks while he considers Vonage's request to stay the injunction. Vonage is requesting a stay of either 120 days or until its appeal is heard.

But Verizon lawyer Dan Webb said any of Vonage's business difficulties should not be a factor in determining a stay. Webb said a stay will cause irreparable damage to Verizon because Vonage will continue to lock up the marketplace of Voice over Internet Protocol, or VoIP.

Vonage stock lost nearly 26% of its value today as investors worried that the company may not be able to continue to provide service without the use of Verizon's technology.

NEW DETAILS ON SIRIUS/XM PRICING AFTER MERGER

Newly filed FCC documents show that IF, and that is a big IF, the merger between Sirius and XM is approved, prices for some services will increase, others will remain the same, and some will be lower. Here is the breakdown from an AP story at The New York Times.

Lower Price
For customers who choose to receive fewer channels than they currently receive, prices will decrease from the $12.95 monthly rate. Which channels and how much the price will drop is not detailed. Currently, customers can choose to block certain channels like the Playboy channel, but they do not receive a discount for doing so.

Same Price
For customers who choose to keep their same service, expect the price to remain the same.

Higher Price
Customers who choose a "best-0f" service from both providers can expect to pay a "modest premium" above the regular $12.95 fee.

Also from the article:

Sirius and XM were explicitly forbidden from merging when their licenses were granted a decade ago, but the companies are arguing that much has changed since then, and that the companies now face increased competition in audio entertainment from iPods and Internet radio, as well as traditional terrestrial radio.

On Tuesday, a group of six consumer and advocacy groups asked the Senate panel to call for a tough regulatory review of the transaction, which would eliminate one of the only two competitors in the emerging satellite radio business.

The statement from Consumers Union, the Consumer Federation of America and others said that the deal would reduce competition, decrease choices for consumers and possibly lead to higher prices.

BALLY TOTAL FITNESS TO SEEK CHAPTER 11 BANKRUPTCY PROTECTION?

Shares of Chicago-based Bally Total Fitness sank 60% in trading today as the company announced it may file for Chapter 11 reorganization soon. The company has $827 million in outstanding debt with $300 million more coming due in October and only $45 million in cash.

AP at Yahoo!

HALLIBURTON MOVING HEADQUARTERS TO DUBAI

Oil services and defense contractor Halliburton announced on Sunday that they will relocated corporate headquarters from Houston to Dubai in the United Arab Emirates. Halliburton will maintain its legal registration in the United States and will keep some offices in Houston, but the CEO and other top executives will transfer to Dubai.

Halliburton has been the target of criticism as some have alleged that the company benefits unfairly because of its relationship with Vice President Dick Cheney, the former CEO of Halliburton. Also, last month federal investigators alleged that Halliburton was responsible for $2.7 billion in contractor waste and overcharging in Iraq.

GreatDreams.com
USA Today

WAL-MART SAME-STORE SALES DISAPPOINTING

On Thursday Wal-Mart reported weak same-store sales for February, continuing its sales slump that began last year.

From USA Today:

Also Thursday, Wal-Mart's board approved a 31% increase in the company's dividend, bringing the annual payout to 88 cents a share from 67 cents a share. The world's largest retailer said it plans to return more than $3.6 billion to its shareholders in the form of dividends during fiscal 2008, based on the expected dividend increase.

Same-Store Sales February 2007
Wal-Mart +0.4%
Sam's Club +3.9%
Target +5.7%
Costco +4.0%

VONAGE VIOLATES VERIZON PATENTS - MUST PAY $58 MILLION FINE

From USA Today:

Internet phone provider Vonage must pay Verizon $58 million in damages for infringing on three of the phone giant's technology patents, a jury ruled on Thursday. The U.S. District Court in Virginia has scheduled a March 23 hearing to determine whether Vonage can continue to use the patented technology — which goes to the heart of how it provides low-cost Internet telephone service to more than 2 million customers. If the court lets Vonage use the technology, then it must pay Verizon 5.5% of total revenue on an ongoing basis, the jury ruled. That could tack an additional $47 million to $50 million onto Vonage's tab this year.

GATES AND BUFFETT STILL TOP FORBES RICHEST LIST

Bill Gates is the world's richest man for the 13th year in a row and his pal Warren Buffett is second once again, but Mexican businessman Carlos Slim Helu is quickly gaining ground on both men and may be poised to take the crown next year. Helu gained an amazing $19 billion last year and now sits only $7 billion below Gates and $3 billion below Buffett.

From USA Today:

After a 20-year reign, Japan is no longer Asia's top spot for billionaires: India has 36, worth a total of $191 billion, followed by Japan with 24, worth a combined $64 billion. India's rich are also marching toward the top of our rankings. Brothers Mukesh and Anil Ambani, who split up their family's conglomerate in 2005, join Lakshmi Mittal, who heads the world's biggest steel company, Arcelor Mittal, among the world's 20 wealthiest. India now has three in the upper echelons, second only to the U.S.

Ingenuity, not industry, is the common characteristic; these folks made money in everything from media and real estate to coffee, dumplings and ethanol. Two-thirds of last year's billionaires are richer. Only 17% are poorer, including 32 who fell below the billion-dollar mark. The billionaires' combined net worth climbed by $900 billion to $3.5 trillion. That equates to $3.6 billion apiece.

The average billionaire is 62 years old, two years younger than in 2005. This year's new billionaires are seven years younger than that. Of list members' fortunes, 60% made theirs from scratch.

Forbes pinned down a record 946 billionaires. There were 178 newcomers, including 19 Russians, 14 Indians, 13 Chinese and 10 Spaniards, as well as the first billionaires from Cyprus, Oman, Romania and Serbia.

SENATOR CLINTON EXPRESSES CONCERN ABOUT FOREIGN-OWNED U.S. DEBT

Senator Hillary Clinton expressed concern about the "economic vulnerabilities" posed by foreign interests owning large amounts of U.S. debt. On the Senate floor, and in letters to Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson, Senator Clinton said that President Bush's economic policies have contributed to an "erosion of U.S. economic sovereignty" and added that it is "undeniable that the exponential growth of foreign debt in the last six years has undermined our economic standing."

From The Wall Street Journal:

Currently, the U.S. imports more goods than it exports from places like China, resulting in a trade deficit, and it borrows heavily from abroad to finance its domestic investment. Foreign interests own about $2.2 trillion of U.S. Treasury securities -- or about 52% of the public debt not held by the U.S. government, compared with about 20% in the early 1990s, during the Clinton administration. The U.S. has come to rely on foreign capital because Americans don't save enough to finance the nation's domestic investment.

...there is broad concern that the growing reliance on foreign investors puts the U.S. at risk, and some say the way to address it is to begin saving money at home by erasing the current $248 billion budget deficit, moving into a surplus and putting money aside to pay for costly obligations like Social Security and Medicare.

BARRON'S PICKS TD AMERITRADE AS #1 ONLINE BROWSER-BASED BROKER

In the March 5th Barron's, TD Ameritrade rates as the #1 online broker in the 12th annual ratings. Baron's broke firms into two categories, browser-based and software-based online brokers. While TD Ameritrade won the browser-based category, thinkorswim took first place in the software-based contest.

WORST WEEK FOR U.S. STOCKS IN MORE THAN FOUR YEARS

The Dow Jones Industrial Average fell 4.2% this week, the S&P 500 dropped 4.4%, and Nasdaq was down a whopping 5.9%. For the DJIA and S&P 500 it was the worst week points-wise since July of 2002 and the Nasdaq experienced its biggest points decline since September of 2001. Overall, U.S. stocks had experienced 45 consecutive months without a drop of 2% in a single trading session, that is until Tuesday of this week when the slide began.

SIRIUS CEO TESTIFIES BEFORE THE HOUSE JUDICIARY COMMITTEE

Sirius Satellite Radio CEO Mel Karmazin testified Wednesday before the House Judiciary Committee in a review of the proposed merger between XM and Sirius. In his testimony, Karmazin vowed not to raise subscription fees, but rather to lower them, which at least one member of the committee found unbelievable. From The Wall Street Journal:

Rep. John Conyers (D., Mich.), chairman of both the Judiciary Committee and the task force, was skeptical. "We don't have too good a record of satellite companies keeping their promises," Mr. Conyers said. "'Trust me' isn't going to work here, not just today, but in the longer-term examinations you will be going through."

Other members thought the deal might receive approval, but only if Sirius and XM agree to:

1. allow customers to choose stations on a channel-by-channel basis or a tiered format similar to cable TV.



2. make 5% of the channel capacity available for noncommercial, educational purposes.



3. freeze prices for at least three years.

Karmazin did not seem to think that it would be possible to allow channel-by-channel or tiered subscriptions, and was noncommittal on how long rates could be frozen, suggesting a possible maximum of four years.