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.

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

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.

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:

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.

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.

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.

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

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."

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.

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.”

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.

Forbes.com

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.”

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.

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.

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.

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:

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.