October 2009

Chip Conley: Is Conscious Capitalism an Oxymoron?

October 30, 2009

Unconscious Capitalism…we’ve witnessed that. Even Drunk Capitalism may sound more accurate than Conscious Capitalism. But, the truth is we can’t afford to have Capitalism be anything but Conscious given the stakes involved and the power wielded by the world of business. I’ve just come back from the 2nd annual Conscious Capitalism conference in the hill country of Austin. This gathering of CEO’s, entrepreneurs, financiers, and academics gave me some encouragement that those handling the machinery of industry have come to realize that they can’t operate this delicate and powerful equipment while inebriated on short-term ambition and unconscious plundering. What does it mean to be a conscious capitalist? Here’s my stab at a list of 5 basic rules (fueled by some of the discussions at the conference): Focus on the Long-Term . While short-term profits are the milk, smart investors and business execs understand that building a relationship with the cow is far more valuable in the long-term. Warren Buffett asks his CEO’s to operate their businesses as if they were never to be sold or merged for 100 years. And, the academic authors of “Firms of Endearment” have proven that long-term minded companies outperform the S&P 500 by eight times over a ten year period. Bow at the Altar of Purpose . An expansive Purpose that addresses the needs of a broad definition of stakeholders – employees, customers, vendors, the community, the environment, not just investors – provides an animating and attracting force for a company. Proctor & Gamble’s new CEO recently remade the company’s business plan so that it is purely focused on how P&G delivers on its Purpose to all of its broad definition of stakeholders. And, great companies from Southwest (“freedom to fly”) to Apple (“a bicycle for your brain”) have great Purposes that energize those who come into contact with them. Think of Business as a Practice. Few of us see businesspeople as “practicing” their craft like a doctor, lawyer, athlete, musician, or spiritual leader. But, this new generation of leaders at companies like Patagonia (which is now teaching Wal-Mart how to green their supply chain), Whole Foods Markets, and PepsiCo are approaching their work with a level of conscious practice that suggests that they understand there’s a systemic effect in the decisions they make. Kip Tindell, CEO of the Container Store, says that leaders need to understand the size of the “wake” they create based upon the decisions they make. Business leaders can no longer afford to take an unconscious “just do it” approach to how they make decisions. Redefine what “Winning” means . Life and business are all about where you pay your attention. MBA’s have been taught to “manage what you can measure,” but unfortunately, what’s most measurable in life and in business isn’t usually what’s most valuable (think Mastercard’s “Priceless” commercial). Conscious capitalists recognize that intangibles like brand value, culture, and intellectual property are making a mockery of the 500-year old tradition of the balance sheet where these valuable assets can’t be found as line items. The good news is that “valuing intangibles” has become the hottest topic on American business school campuses. Jack Welch’s traditional bottom-line definition of “Winning” has lost its luster. Leverage Loyalty. Leverage has been a dirty word this decade and we’ve even created new recessionary phrases like “America is de-levering herself” (that just sounds painful). Yet, the ultimate leverage in a downturn is loyalty. In today’s “word of mouse” era in which social media and Web 2.0 sites are the primary means that people use to tell their friends and colleagues about their favorite (or least favorite) products or companies, reputation and loyalty have become the primary sustainable competitive advantage for companies. Tech-savvy leaders like Tony Hsieh at Zappos (who has tens of thousands of followers on Twitter) have created an evangelical collection of customers that is leveraged into market share momentum. We may be entering an era of Karmic Capitalism when business realizes what goes around, comes around. Let’s hope that the captains of industry realize that noblesse oblige (nobility is obligated) – a century’s old concept – should be applied to the business world. Since corporations are treated as if they are a body, they should also have some of the obligations of citizenry in terms of what they give back and contribute to the good of society. And, they should be held accountable for operating in this fashion. Chip Conley is the Founder and CEO of Joie de Vivre Hospitality and the author of PEAK: How Great Companies Get Their Mojo From Maslow.

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Silicon Valley’s distressed real estate lowest in country

October 30, 2009

Houston-area commercial property sales down 83 percent Debts loom as Hawaii hotels cut rates deeper The Silicon Valley real estate market has the least amount of distressed real estate in all of the 50-plus regions across the country tracked by Real

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Silicon Valley’s distressed real estate lowest in country

October 30, 2009

Houston-area commercial property sales down 83 percent Debts loom as Hawaii hotels cut rates deeper The Silicon Valley real estate market has the least amount of distressed real estate in all of the 50-plus regions across the country tracked by Real

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Video: Goldfarb Says Most Real Estate Rents May Have Stabilized: Video

October 30, 2009

Oct. 30 (Bloomberg) — Alexander Goldfarb, an analyst at Sandler O’Neill & Partners LP, talks with Bloomberg’s Lori Rothman about the outlook for the commercial real estate market. Goldfarb also discusses real-estate investment trusts (REIT) and the outlook for Vornado Realty Trust. (Source: Bloomberg)

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UK: Paperboy, 13, Offered $11 Severance Package

October 30, 2009

A 13-year-old paperboy in Bedfordshire who earns 6.53 pounds a week could have been one of the youngest people in the UK to be offered a redundancy package.

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Video: Holtz-Eakin Discusses Stimulus Impact on U.S. Job Market: Video

October 30, 2009

Oct. 30 (Bloomberg) — Douglas Holtz-Eakin, a former director of the Congressional Budget Office who was Republican presidential candidate John McCain’s top economic adviser in 2008, talks about the impact of the Obama administration’s stimulus package on the U.S. labor market. President Obama’s Recovery Board will report today that the $787 billion stimulus passed in February is directly responsible for saving or creating about 640,329 jobs so far, Vice President Joe Biden said. (This is an excerpt of the full interview. Source: Bloomberg)

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7141 Clearbrook Way (KTVU Classifieds) $204,900

October 30, 2009

Beautiful 4 bedroom 3 bath home! Has high vaulted ceilings, fireplace & formal dining room. Has 3 car garage and in a great neighborhood. You dont want to miss this one!

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7526 La Mancha Way (KTVU Classifieds) $92,000

October 30, 2009

4 bedroom 2 bath home! This is a corner lot with large front and back yard.

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Uninsured Women Negotiates With Hospital, Pays Less Than She Would Have For COBRA

October 30, 2009

As part of its Bearing Witness 2.0 project, the Huffington Post is rounding up a few of the best local stories of the day. Tammy Compton of the Wayne Independent reports that a Waymart, Pa., woman managed to save money on health care costs by foregoing insurance. Carol (she withheld her last name) recently quit her job of six years at a utility company because of high stress, which made her ineligible for unemployment benefits. She opted to quit her employer’s health insurance plan instead of extending it via COBRA, figuring she’d stay healthy enough to do without. But she wound up in the hospital twice, first because of kidney stones, then a breathing problem. Her bill was $6,900. After talking to a representative from the hospital in person, though, the bill was dropped down to $2,350 — less than she would have paid for five months COBRA, which she said would have cost $538 a month. ********* Andy Parker of the Oregonian writes about students enrolled in a late-night welding class, which does not finish until 2 am. Many are taking the class in addition to long work days, and the trend is growing: an extra section was added this semester to meet student demand. ********* Peggy Lowe of the OC Register highlights a local man, Leslie Carldera, who used to love to ride his bike to work every day. He was laid off two years ago, after 23 years on the job, and has been unable to get a new one since. “As time has gone by, it’s kind of like the frog-in-the-boiling water syndrome,” he said. “So much time has gone by and day-to-day, I don’t really notice a difference. But it really has become a major concern and a dire situation.” ********* A cobbler couple in Kempsville, Va., is helping laid-off neighbors put their best feet forward by providing free shoe shines, reports Staci Dennis of the Virginia-Pilot . “I thought about what we had to offer and that’s when I came up with the free shoeshines,” said Danita Pierce, who has owned a shoe repair shop with her husband, Vincent, for 20 years. “This is our resource and how we can help.” ********* Sign of the times: Almost 3,000 land plots in Mahoning County, Ohio, are late on taxes for the first time, reports WYTV . The county treasurer, Lisa Antonini chalks it up to high unemployment, but is nonetheless calling on landowners to pay their taxes, which add up to $3,300,000. HuffPost readers: Seen a good local story? Know of a neighbor going to bizarre lengths to get through the recession? Tell us about it! Email jmhattem@gmail.com .

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Video: Rupkey Says U.S. `Very Close’ to Unemployment Rate Peak: Video

October 30, 2009

Oct. 30 (Bloomberg) — Christopher Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd., talks with Bloomberg’s Mark Crumpton and Lori Rothman about the U.S. economy, consumer spending and the stimulus package. Spending by U.S. consumers fell in September for the first time in five months after the government’s auto-rebate program expired. (This report is an excerpt. Source: Bloomberg)

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7411 Court Parkway (KTVU Classifieds) $137,900

October 30, 2009

Beautiful 3 bedroom 2 bath home! Has updated kitchen and bathrooms.Has a built in swimming pool.This is a must see!

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David Adkins: Ending the Great Recession: It’s Going to Take More Than Just Stimulus

October 30, 2009

With $150 billion spent to date, the White House estimates that the Recovery Act has saved or created roughly one million jobs. This figure includes 650,000 direct jobs saved or created by state governments and contractors as well as an estimate prepared by the White House’s Council of Economic Advisers that stimulus spending created another 350,000 indirect jobs. Citizens across the country will soon be able to log on to www.recovery.gov to see how many of these jobs have come to their states and neighborhoods. Unfortunately, this data provides only an incomplete picture on where we have come so far in addressing the Great Recession, while offering little guidance on where we need to go next. State leaders have already begun to release their own estimates on the role the stimulus has played in combating unemployment. Maryland Governor Martin O’Malley reports that 14,000 Marylanders owe their jobs to stimulus spending. However, two-thirds of these jobs are the result of indirect effects of stimulus spending in the state rather than direct positions created or saved from specific projects. No matter how the data is diced, it will not end the political debate over the merits of what amounts to the largest domestic spending program in American history. Proponents will assert that with just a fifth of the spending and tax cuts in the stimulus out the door we are well on our way to creating or saving the 3.5 million jobs promised by the president. Opponents will point to the modest numbers of direct jobs created by the stimulus and the mounting federal deficit. Both camps make good arguments, but in debating the point we risk losing sight of a bigger challenge. Congressional Quarterly reported this week that job growth in America has been stagnant for almost a decade. The big unemployment numbers we are now posting are as much a product of an economy that is failing to come up with new engines of growth as they are about layoffs in construction firms or manufacturing plants. While the Recovery Act has made some important investments in economic sectors, such as green energy and biotechnology, that may ultimately prove to be strong engines of job growth, it is increasingly clear that exports will also need to be a big part of the picture. The traditional growth path for start-up companies has been to start selling locally, expand into regional or national markets, and only then turn your attention to markets overseas. Meanwhile similar start-ups in Europe or Canada focus internationally from the moment they set up shop — often with substantial government help. As we debate what government’s response should be to combating a still-growing unemployment rate we might want to take a page from our international competitors. According to a recent World Bank study, governments that invest in export promotion — programs designed to help small businesses find markets for their product overseas — generate as much as 40 dollars in new exports for every dollar they spend. This message has not been lost on America’s state governments who collectively spend almost $100 million each year on export promotion and investment attraction. This is a significant sum when you consider both the dire budget challenges faced by states and the fact that the entire budget for the U.S. Foreign and Commercial Service — the federal government’s global marketing arm — is just $240 million. The ultimate solution to the Great Recession may lie in growing the pie at home by building markets abroad. Fortunately, the costs involved in helping small businesses succeed in the global market place are a drop in the bucket compared to the eye popping price tag of the Recovery Act.

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Federal Reserve announces temporary exemption to the limitations in section 23A of the Federal Reserve Act will expire on October 30, 2009

October 30, 2009

Federal Reserve announces temporary exemption to the limitations in section 23A of the Federal Reserve Act will expire on October 30, 2009

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DebtX promotes Bill Looney to the role of president of US loan sales

October 30, 2009

DebtX has announced that Bill Looney has been promoted to the position of president of US loan sales . Looney, who was previously executive vice president of DebtX , will continue to be responsible for managing all of DebtX’s loan sale …

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Video: Bank of America’s Bianco Discusses U.S. Stocks, Earnings: Video

October 30, 2009

Oct. 30 (Bloomberg) — David Bianco, head of U.S. equity strategy at Bank of America Corp., talks with Bloomberg Television about the U.S. stock market and corporate earnings. (This report is an excerpt. Source: Bloomberg)

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Yankees, Giants Descend Upon Philadelphia at Once as Transit Strike Looms

October 30, 2009

By Chris Dolmetsch Oct. 30 (Bloomberg) — A World Series showdown and a National Football League meeting featuring rivals from Philadelphia and New York, staged on opposite sides of the street, is just the start of what’s facing the City of Brotherly Love this weekend. Add two rock concerts, two hockey matches and a basketball game in the same sports complex , then throw in a possible transit-workers strike, and things could get really interesting at the corner of Broad Street and Pattison Avenue. The Philadelphia Eagles host the New York Giants at 1 p.m. on Nov. 1 in a battle of NFL division foes. Seven hours later, the New York Yankees and the Philadelphia Phillies begin Game 4 of the World Series, capping a sports tale of two cities. The day “will be a celebration of all things Philadelphia,” said Steven Binswanger, 26, a graduate student at the Wharton School of the University of Pennsylvania, who plans to attend both the Eagles game and the fourth game of the World Series. “I expect to eat a decent amount of cheesesteaks, drink a few Yuenglings and boo the Giants and Yankees.” The Phillies play at Citizens Bank Park, the Eagles at Lincoln Financial Field. Those venues stand astride the Spectrum, a dying hockey and basketball venue where Pearl Jam is playing gigs tonight and tomorrow night before the arena is torn down. Just next door is the Wachovia Center, where the city’s basketball and hockey teams now play. Altogether, events at the South Philadelphia sites likely will attract some 300,000 spectators over four days. Lincoln Financial Field The biggest single crowd will be for the Eagles-Giants game at 67,594-seat Lincoln Financial Field. The game’s start was moved up three hours to avoid a conflict with the fourth game of the World Series, scheduled for 8:20 p.m. at 43,500-seat Citizens Bank Park across Pattison Avenue. “Many of the Eagles fans have tickets to the World Series,” said Laura Tortella, director of operations for Total Traffic Network, a division of Clear Channel Communications Inc. “The ones who don’t will stay in the parking lots with their TVs.” The Phillies are seeking their second consecutive championship. Last year’s World Series Most Valuable Player, Cole Hamels , is scheduled to start Saturday’s game. The Eagles have won four of six games so far this season, with the Giants 5-2 and trying to snap a two-game losing streak. Most of the city’s major entertainment and sports events are held at the complex. The baseball stadium, known locally as “the Bank,” is across the street from the Eagles’ home, known as “the Linc.” To the west is the 22,000-seat Wachovia Center, which hosts Flyers National Hockey League games and 76ers National Basketball Association games and which sits just south of the 18,000-seat Spectrum. Pearl Jam The activity begins tonight when the 76ers host the Milwaukee Bucks in their home opener at the Wachovia Center while Pearl Jam , known for songs such as “Dissident” and “Yellow Ledbetter,” plays the third of four concerts at the Spectrum. The concerts are to be the last events at the 42-year- old arena. Tomorrow, the Flyers play the Carolina Hurricanes at 1 p.m., about seven hours before the Phillies take the field for the third game of the World Series and Pearl Jam closes out the Spectrum. The next day, it’s a football-and-baseball battle of teams separated by 100 miles of the New Jersey Turnpike. ‘Quite the Crowd’ “Sunday should be quite the crowd because the Eagles tend to get near 60,000,” and the game is expected to end about 4 p.m., Lieutenant Frank Vanore, a spokesman for the Philadelphia Police Department , said in a telephone interview. “The Phillies gates open at 5:20 p.m., and most of those people won’t be out of there by then. The traffic plan is going to be real important.” Mike Goldberg, 44, an investment adviser for BBR Partners and an Eagles season ticket holder from Bucks County, Pennsylvania, has tickets for both games and plans to spend the entire day in the parking lots outside the stadiums. “It’s going to be a raucous crowd,” said Goldberg, who was a bat boy for the Phillies in 1983, when the team won the National League pennant before losing to the Baltimore Orioles in the World Series. “We did the same thing last year, when the Eagles played and then the Phillies played Tampa. The four hours between games went like lightning.” The following night, the Flyers are hosting the Tampa Bay Lightning, about three hours before the fifth game of the World Series. The Phillies are encouraging fans to carpool or take public transportation and not come to the complex if they don’t have tickets. Possible Strike Workers for the Southeastern Pennsylvania Transportation Authority are threatening a strike that could shut down the sixth-largest U.S. city’s transit system. Transport Workers Union Local 234 , which represents about 5,500 bus, subway and trolley workers, voted Oct. 25 to walk off the job if negotiations don’t produce a new contract. “We’re hoping that Septa will be with us at that point, which will be a big relief,” Vanore said. “Any unforeseen stoppage would be problematic.” Septa’s buses, subways and trolleys carry about 500,000 riders on an average weekday in the city of 1.45 million people. About 9,400 people on average used Septa’s Broad Street Line, which carries passengers between Center City and the sports complex, traveled to and from the World Series games in Philadelphia last year, Septa spokesman Andrew Busch said. About 8,000 use the subway after Eagles games, he said. “It will shut down the Broad Street Line and that’s what takes you right down to the ballpark,” Tortella said of the possible strike. “People coming from New York on the train still need to get to the ballpark and that could be a problem, so they would have to drive or take a cab.” 1,000 More Cars The city expects about 1,000 additional cars to come into South Philadelphia if there is a transit strike, and has told police officers to be prepared for canceled vacations in case additional personnel are needed, said Everett Gillison, deputy mayor for public safety. “If it wasn’t for the possibility of a strike, this would just be another event,” Gillison said in a telephone interview. “We do these events in this area pretty easily.” To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net .

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F-1′s Raikkonen, Dropped by Ferrari, Stuck With $21.5 Million Luxury Home

October 30, 2009

By Kati Pohjanpalo Oct. 30 (Bloomberg) — Kimi Raikkonen , the world’s second- highest paid athlete before being dropped by the Ferrari Formula One team, is having trouble selling a 14.5 million-euro ($21.5 million) second home in his native Finland. “The potential clientele for this price range is very small,” Pasi Saari, the realtor for the property , said in an interview. “It’s the most expensive home for sale in Finland.” Raikkonen’s house in the Nordic nation’s capital of Helsinki has been on the market for about a year, said Saari, whose company, Westatus Oy, is a franchise of a Finnish real estate unit of Danske Bank A/S. So far, about ten potential buyers have balked at the asking price, he said. Raikkonen, who won the Formula One title for Ferrari in 2007, earned $45 million in 2008, second only to golfer Tiger Woods , Forbes business magazine reported June 17. The 30-year- old Raikkonen , known as “Iceman” for his calm nerves, is without a team for the 2010 season that starts in March after Ferrari dumped him for Fernando Alonso . Raikkonen, who currently lives in Switzerland, started in Formula One in 2001. Raikkonen’s spokesman Riku Kuvaja didn’t return calls and a text message sent to his mobile phone. The three-story mansion, completed in 2006, boasts a walled garden, sun-deck, basketball court and deep boat dock. Its eight rooms are decorated in a minimalist, modern style with leather and hardwood. An animal skin rug adorns the black and white master bedroom. The price, 16,111 euros per square meter, compares with the mean price of 2,614 euros per square meter for new one-family homes in the Helsinki metropolitan area, according to second- quarter data published by Statistics Finland on Sept. 11. Bridges to Island Bridges lead to the island where the house, previously owned by Finnish millionaire Jussi Salonoja, is located, 6.3 kilometers (3.9 miles) from the city center. The next-door neighbor is Mika Hakkinen , the 1998 and 1999 Formula One world champion, and across the bay are the residences of Finland’s President Tarja Halonen and Prime Minister Matti Vanhanen . The house has an underground garage for eight vehicles and the sea glimmers through the windows into the sauna area with a wood-paneled hot tub. Black leather sofas line the adjacent room with speakers built into the gray stone wall of the fireplace. The 900 square-meter (9,690 square-foot) home also has a wine cellar, a German kitchen fitted for a professional chef and a lift between floors. “It’s fit for entertaining,” said Saari. “Still, it’s more of a family home than an official residence.” To contact the reporter on this story: Kati Pohjanpalo in Helsinki at kpohjanpalo@bloomberg.net

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Frank Says Charging for Overdraft Protection Without Asking Isn’t a Favor

October 30, 2009

By Jeff Plungis Oct. 30 (Bloomberg) — Bank overdraft fees as high as $39 on debit-card transactions aren’t “favors” for consumers if they haven’t asked for them, House Financial Services Committee Chairman Barney Frank said. “We wouldn’t be in a situation where we’re considering legislation if you would have had an opt-in regime from the beginning,” Frank, a Massachusetts Democrat, said at a hearing in Washington today. “Don’t do people favors without asking them.” Overdraft programs allow consumers to make purchases even if there’s not enough money in their accounts. Lawmakers have criticized banks for enrolling customers in the programs, and charging fees, without their consent. Legislation under consideration in the House would prohibit financial companies from levying more than one overdraft fee a month or six per a year, according to Representative Carolyn Maloney , a New York Democrat who sponsored the bill. The programs “maximize fees while jeopardizing the financial stability” of customers, said Jean Ann Fox , director of financial services at the Consumer Federation of America . Consumers don’t apply for them, and they’re not warned at the point of sale when they’re about to incur a fee, Fox said. The median overdraft fee at the largest U.S. banks is $35, Fox said. “Rather than competing by offering lower costs and truly beneficial overdraft products and services, many financial institutions are hiding behind a smokescreen of misleading terms and opaque practices that promote costly overdrafts,” Fox said. Senate Banking Committee Chairman Christopher Dodd , a Connecticut Democrat, introduced similar overdraft-fee legislation Oct. 19, saying “banks should not be trying to bolster their profits at the expense of their customers.” Opt-In The House and Senate bills have an “opt-in” requirement prohibiting banks from punishing customers who don’t enroll. Customers would have to be warned at an ATM or by a bank teller if they’re about to overdraw their accounts and be given the chance to cancel the transaction. Fees related to overdrawn U.S. accounts may rise to $38.5 billion this year from $36.7 billion in 2008, according to research firm Moebs Services Inc . in Lake Bluff, Illinois. The legislation would require retooling that would raise the cost of checking accounts, said Nessa Feddis, vice president and senior counsel at the American Bankers Association in Washington. Consumers have come to expect payments to go through to “avoid embarrassment and inconvenience,” Feddis told the committee. Most consumers can easily avoid the fees by keeping track of their balances, she said. Debit Cards Customers are shifting to debit transactions from credit cards as credit lines have been lowered and banks have closed inactive accounts. Debit cards will be used in 60.2 percent of purchases in 2010, or about $40 billion, up from 58.2 percent in 2008, according to the Nilson Report , an industry newsletter in Carpinteria, California. Banks are relying more than ever on the overdraft-fee revenue, said Eric Halperin , Washington director for the Center for Responsible Lending . The average overdraft fee was $29 in 2007, up from $16.50 in 1997, Halperin said. In 2004, about 80 percent of banks denied debit-card transactions for insufficient funds. Now, 80 percent approve the transactions and charge a fee, he said. To contact the reporter on this story: Jeff Plungis in Washington at jplungis@bloomberg.net .

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Senator Kerry Signals Renewed Confidence in Afghanistan’s President Karzai

October 30, 2009

By Viola Gienger Oct. 30 (Bloomberg) — Senator John Kerry said Afghan President Hamid Karzai is willing to make Cabinet changes to bolster his government’s credibility, and expressed skepticism the beleaguered leader’s brother has links to the CIA. Kerry, who spoke to Karzai by telephone this morning and had lunch with CIA Director Leon Panetta yesterday, said he doesn’t believe the president’s brother has a “direct relationship” with the CIA, as reported earlier this week in the New York Times. Kerry expressed confidence in Karzai’s ability to recover from allegations that his government is corrupt and engaged in fraud in the first round of elections Aug. 20. “I think he is prepared to embrace reforms,” Kerry, 65, said in an interview for Bloomberg Television’s “Political Capital With Al Hunt ,” airing this weekend. The Massachusetts Democrat also distanced himself from Secretary of State Hillary Clinton’s public questioning of whether some Pakistani officials know the whereabouts of al- Qaeda during her visit to the country this week. The Obama administration has said a central question is whether the Afghan government can be a capable partner and take over the country’s security and manage its development after eight years of war. President Barack Obama is weighing strategy on Afghanistan and whether to send as many as 40,000 more troops that his top commander there, General Stanley McChrystal , has requested. ‘Too Far, Too Fast’ Kerry said he didn’t know what Obama would decide and couldn’t confirm whether the decision might veer close to the senator’s position. In addition to linking U.S. aid to the Afghan government’s performance, Kerry has left open the possibility of sending more U.S. troops while saying McChrystal’s approach “reaches too far, too fast.” Kerry, the 2004 Democratic nominee for the U.S. presidency and chairman of the Senate Foreign Relations Committee, said he doesn’t know when Obama will announce his decision on the strategy. Obama is scheduled to leave for a trip to Asia within days after Afghan voters go to the polls Nov. 7 for a presidential runoff election. Kerry helped persuade Karzai to agree to the rematch during a visit to Afghanistan last week, and the president is favored to defeat his challenger, former Foreign Minister Abdullah Abdullah . Credibility Question The timing of a decision on strategy depends in part on whether Obama feels he has enough information to judge the prospects for an Afghan government that can govern with credibility and handle civilian development efforts, Kerry said. “I suspect he will make the decision sometime very soon,” Kerry said. “What’s important to us is that we get legitimacy out of this election at the highest level, and then we can work downwards and deal with the issues of individual governors or individual relationships.” Kerry cited “serious questions” about links between Karzai’s brother, Ahmed Wali Karzai, and the Central Intelligence Agency. The New York Times reported this week that he has received regular payments from the agency for much of the past eight years in exchange for services including helping recruit an Afghan paramilitary force. Ahmed Wali Karzai said that, while he cooperated with American civilian and military officials, he didn’t receive payments from the CIA. He also denied allegations that he was involved in the drug trade. Lunch With Panetta “We’re asking questions,” Kerry said, citing his lunch with Panetta and a group of other senators. “I’m not at liberty to talk about it, but I don’t believe there is a direct relationship” with the CIA. Hamid Karzai is prepared to confront “reasonable” issues where evidence indicates joint efforts to stabilize Afghanistan are at risk, Kerry said. Still, Karzai questioned whether the news reports related to his brother indicate an effort in Washington to undermine him, the senator said. Repairing such rifts with leaders in Afghanistan and Pakistan will be essential to a successful effort to defeat al- Qaeda, Kerry said. The war in Afghanistan can’t distract the U.S. from a simultaneous focus on Pakistan, he said. “Pakistan is the center of the al-Qaeda presence,” Kerry said, citing the danger of rising extremism and the country’s nuclear weapons. “If we keep our eye on Pakistan, I believe Afghanistan will flow more easily out of that.” He said he couldn’t judge Clinton’s timing for raising the question of Pakistani officials’ knowledge of the whereabouts of al-Qaeda militants, which U.S. officials believe are hiding near the Afghan border. “How you raise those issues, where you raise those issues is obviously a matter of personal preference or I suppose diplomatic policy,” Kerry said. “I think that, at this particular moment, what we’re trying to do is build our relationship and trust with the Pakistanis.” To contact the reporter on this story: Viola Gienger in Washington at vgienger@bloomberg.net .

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Chicago Purchasing Managers’ Index Unexpectedly Climbed to 54.2 in October

October 30, 2009

By Shobhana Chandra Oct. 30 (Bloomberg) — Business activity in the U.S. unexpectedly expanded in October, a sign the economic recovery that began in the third quarter will persist in coming months. The Institute for Supply Management-Chicago Inc. said today its business barometer increased to 54.2, the highest level in 13 months and exceeding the median forecast of economists surveyed by Bloomberg News, from 46.1 the prior month. Readings below 50 signal a contraction. Companies are gearing up to meet demand after the economy grew in the July to September period after four consecutive quarters of contraction. A slower pace of inventory reduction and rising sales abroad due to more than $2 trillion in global government stimulus also signal more production. “The manufacturing rebound is a lot broader than just ‘cash for clunkers,’” said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York, referring to the government’s auto-incentive plan that helped boost sales and production. “This improvement will show through in the national numbers as well.” Economists projected the Chicago-ISM index would rise to 49, based on the median estimate of 58 economists in a Bloomberg News survey. Forecasts ranged from 47 to 52.5. Other reports today showed consumer sentiment fell this month, personal spending dropped in September after the “cars- for-clunkers” program expired and wage gains decelerated, reflecting mounting unemployment. Sentiment Falls The Reuters/University of Michigan final index of consumer sentiment decreased to 70.6 from 73.5 in September, which was the highest in more than a year. The index was forecast to fall to 70, the median in a Bloomberg survey of 60 economists. Household purchases dropped 0.5 percent last month after jumping i.4 percent in August, the Commerce Department reported today. The decrease was the first in five months and the biggest since December. Employment expenses rose 0.4 percent in the third quarter and wages had the smallest 12-month gain since 1982, figures from the Labor Department also showed today. The increase in the employment-cost index was the same as the gain in the second quarter and followed a 0.3 percent increase in the first quarter was the smallest since records began in 1996. Stocks were down following the reports and Treasury securities climbed. The Standard & Poor’s 500 Index fell 0.7 percent to 1,059.1 at 10:18 a.m. in New York, extending a second consecutive weekly drop. The yield on the benchmark 10- year note fell to 3.44 percent from 3.50 percent late yesterday. Orders Jump The Chicago purchasers’ new orders gauge jumped to 61.4, the highest level since June 2007, from 46.3 the previous month and the production index climbed to 63.9 from 47.2. The employment index decreased to 38.3 from 38.8, the report showed. A measure of prices paid for raw materials decreased to 48.6 from the prior month’s reading of 51.3, while a gauge of delivery times rose to 50.7 from 49.3. The index of order backlogs increased to 41.9 from 36.7 and the inventories gauge decreased to 32.2 from 38.9. Economists watch the Chicago index for an early reading on the outlook for overall U.S. manufacturing, which makes up about 12 percent of the economy. The Supply Management group’s nationwide manufacturing index probably rose this month to 53, the highest level since August 2006, from 52.6 in September, according to the Bloomberg survey median. The figures are due on Nov. 2. Recovery Begins The world’s largest economy expanded at a 3.5 percent pace from July through September after a yearlong contraction as government incentives spurred consumers to spend more on cars, figures from the Commerce Department showed yesterday in Washington. Housing also rebounded as the first-time buyer tax credit boosted construction. Businesses seeing steadier demand include Caterpillar, the world’s largest maker of bulldozers and excavators, which issued a full-year profit forecast exceeding the highest prediction from analysts. Peoria, Illinois-based Caterpillar is considered a bellwether for its ties to construction and mining and its overseas presence. “We are seeing encouraging signs that indicate a recovery may be under way,” Chief Executive Officer Jim Owens said in a statement on Oct. 20. “We’ve already started planning for an upturn.” To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

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Kerry Signals Renewed Confidence in Karzai, Downplays Brother’s CIA Link

October 30, 2009

By Viola Gienger Oct. 30 (Bloomberg) — Senator John Kerry said Afghan President Hamid Karzai is willing to make Cabinet changes to bolster his government’s credibility, and expressed skepticism the beleaguered leader’s brother has links to the CIA. Kerry, who spoke to Karzai by telephone this morning and had lunch with CIA Director Leon Panetta yesterday, said he doesn’t believe the president’s brother has a “direct relationship” with the CIA, as reported earlier this week in the New York Times. Kerry expressed confidence in Karzai’s ability to recover from allegations that his government is corrupt and engaged in fraud in the first round of elections Aug. 20. “I think he is prepared to embrace reforms,” Kerry, 65, said in an interview for Bloomberg Television’s “Political Capital With Al Hunt ,” airing this weekend. The Massachusetts Democrat also distanced himself from Secretary of State Hillary Clinton’s public questioning of whether some Pakistani officials know the whereabouts of al- Qaeda during her visit to the country this week. The Obama administration has said a central question is whether the Afghan government can be a capable partner and take over the country’s security and manage its development after eight years of war. President Barack Obama is weighing strategy on Afghanistan and whether to send as many as 40,000 more troops that his top commander there, General Stanley McChrystal , has requested. ‘Too Far, Too Fast’ Kerry said he didn’t know what Obama would decide and couldn’t confirm whether the decision might veer close to the senator’s position. In addition to linking U.S. aid to the Afghan government’s performance, Kerry has left open the possibility of sending more U.S. troops while saying McChrystal’s approach “reaches too far, too fast.” Kerry, the 2004 Democratic nominee for the U.S. presidency and chairman of the Senate Foreign Relations Committee, said he doesn’t know when Obama will announce his decision on the strategy. Obama is scheduled to leave for a trip to Asia within days after Afghan voters go to the polls Nov. 7 for a presidential runoff election. Kerry helped persuade Karzai to agree to the rematch during a visit to Afghanistan last week, and the president is favored to defeat his challenger, former Foreign Minister Abdullah Abdullah . Credibility Question The timing of a decision on strategy depends in part on whether Obama feels he has enough information to judge the prospects for an Afghan government that can govern with credibility and handle civilian development efforts, Kerry said. “I suspect he will make the decision sometime very soon,” Kerry said. “What’s important to us is that we get legitimacy out of this election at the highest level, and then we can work downwards and deal with the issues of individual governors or individual relationships.” Kerry cited “serious questions” about links between Karzai’s brother, Ahmed Wali Karzai, and the Central Intelligence Agency. The New York Times reported this week that he has received regular payments from the agency for much of the past eight years in exchange for services including helping recruit an Afghan paramilitary force. Ahmed Wali Karzai said that, while he cooperated with American civilian and military officials, he didn’t receive payments from the CIA. He also denied allegations that he was involved in the drug trade. Lunch With Panetta “We’re asking questions,” Kerry said, citing his lunch with Panetta and a group of other senators. “I’m not at liberty to talk about it, but I don’t believe there is a direct relationship” with the CIA. Hamid Karzai is prepared to confront “reasonable” issues where evidence indicates joint efforts to stabilize Afghanistan are at risk, Kerry said. Still, Karzai questioned whether the news reports related to his brother indicate an effort in Washington to undermine him, the senator said. Repairing such rifts with leaders in Afghanistan and Pakistan will be essential to a successful effort to defeat al- Qaeda, Kerry said. The war in Afghanistan can’t distract the U.S. from a simultaneous focus on Pakistan, he said. “Pakistan is the center of the al-Qaeda presence,” Kerry said, citing the danger of rising extremism and the country’s nuclear weapons. “If we keep our eye on Pakistan, I believe Afghanistan will flow more easily out of that.” He said he couldn’t judge Clinton’s timing for raising the question of Pakistani officials’ knowledge of the whereabouts of al-Qaeda militants, which U.S. officials believe are hiding near the Afghan border. “How you raise those issues, where you raise those issues is obviously a matter of personal preference or I suppose diplomatic policy,” Kerry said. “I think that, at this particular moment, what we’re trying to do is build our relationship and trust with the Pakistanis.” To contact the reporter on this story: Viola Gienger in Washington at vgienger@bloomberg.net .

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Ford’s Bid to Obtain UAW Concessions Dims as Rejections Mount at Factories

October 30, 2009

By Keith Naughton and Mike Ramsey Oct. 30 (Bloomberg) — Ford Motor Co. hourly employees at three factories rejected union contract concessions granted to other U.S. automakers as the United Auto Workers moves toward a Nov. 1 deadline to finish the balloting. The results mean that workers at 11 factories representing 16,300 UAW members have turned down the deal, compared with votes to accept the givebacks at 4 plants with 6,100 hourly employees. Ford has 41,000 workers represented by the UAW. A Taurus factory in Chicago with about 1,278 hourly workers rejected the contract yesterday, said Gary Walkowicz , a Local 600 official. A second Chicago plant, which employs about 690 union workers making metal stampings, voted 430 to 107 against the offer, Walkowicz said. A parts plant in Saline, Michigan, with about 1,500 workers voted 75 percent against the deal yesterday, Local 892 President Mark Caruso said in an e-mail. Ford, the only major U.S. automaker to avoid bankruptcy, is seeking concessions similar to those secured this year by General Motors Co. and Chrysler Group LLC. The contract changes, which won UAW local leaders’ support on Oct. 13, include a six- year ban on strikes over wages and benefits and freezing wages of new hires until 2015. Voting began at the Dearborn, Michigan-based automaker’s plants on Oct. 22. Most union locals aren’t releasing details of the balloting. Ford fell 8 cents, or 1.1 percent, to $7.22 at 9:54 a.m. in New York Stock Exchange composite trading. To contact the reporter on this story: Keith Naughton in Southfield, Michigan at Knaughton3@bloomberg.net

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CIT Reaches Agreement With Carl Icahn to Back Lender’s Restructuring Plan

October 30, 2009

By Linda Shen and Pierre Paulden Oct. 30 (Bloomberg) — CIT Group Inc., the 101-year-old commercial lender seeking to avert collapse, reached an agreement with billionaire investor Carl Icahn to support its restructuring plan. Icahn will supply a $1 billion credit line to provide “supplemental liquidity” for CIT’s restructuring, the New York- based company said today in a statement distributed by Business Wire. The $1 billion line can be used as bankruptcy financing, CIT said. A deadline passed last night for CIT to solicit votes in support of an out-of-court debt exchange, or pre-packaged bankruptcy plan. Icahn, who says he owns $2 billion of CIT debt and is its largest bondholder, initially opposed the plan, contending the investments are worth more in a traditional bankruptcy. To contact the reporter on this story: Linda Shen in New York at lshen21@bloomberg.net

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Frank Reverses Course, Says He’ll Support Prepayment to Unwind Large Firms

October 30, 2009

By Alison Vekshin Oct. 30 (Bloomberg) — Barney Frank , chairman of the U.S. House Financial Services Committee , reversed course and will support requiring financial firms to prepay into a fund the government will use to unwind large firms after they fail. Legislation Frank crafted with the Treasury Department and unveiled this week will be amended to create an assessment on institutions with more than $10 billion of assets, he said today in an interview on Bloomberg Television’s “Political Capital with Al Hunt ” being broadcast this weekend. The Obama administration is seeking fees after a firm fails. “The fear that the administration had, that I shared, was if you put it out there beforehand, that will be announcement to people that it’s available and they might behave irresponsibly,” said Frank, a Massachusetts Democrat. “It turns out that doesn’t have any impact because everybody thinks it’s going to be there anyway.” Federal Deposit Insurance Corp. Chairman Sheila Bair supported a requirement that financial companies with more than $10 billion of assets contribute to the fund in advance, while the financial services industry was opposed. The proposal is aimed at preventing a repeat of last year’s taxpayer-funded bailouts of U.S. firms, including New York-based American International Group Inc. and Citigroup Inc. To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net .

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Wilbur Ross Sees `Huge’ Commercial Real Estate Crash Ahead for U.S. Assets

October 30, 2009

By John Gittelsohn and Thomas R. Keene Oct. 30 (Bloomberg) — Billionaire investor Wilbur L. Ross Jr . said today that the U.S. is at the beginning of a “huge crash in commercial real estate.” “All of the components of real estate value are going in the wrong direction simultaneously,” said Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. “Occupancy rates are going down. Rent rates are going down and the capitalization rate — the return that investors are demanding to buy a property — are going up.” U.S. commercial property sales are forecast to fall to the lowest in almost two decades as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to the property research firm Real Capital Analytics Inc. The Moody’s/REAL Commercial Property Price Indices already have fallen almost 41 percent since October 2007, Moody’s Investors Service said Oct. 19. Ross, chairman and chief executive officer of WL Ross & Co. LLC, said in an interview on Bloomberg Radio that he would use “extreme caution” before putting money into commercial real estate, especially office space, because properties are losing tenants. U.S. office vacancies hit a five-year high of almost 17 percent in the third quarter, while shopping center vacancies climbed to their highest since 1992, according to the property research firm Reis Inc. “I think it’s going to take quite a while to work itself out,” Ross said. Ross and PPIP As of Oct. 15, Ross said he had spent less than $100 million of at least $1.5 billion available to him under the Public-Private Investment Program, an investment pool of private and government money for purchasing distressed assets from financial institutions. Ross used the funds to purchase mortgage-backed securities tied to retail properties, he said in a Bloomberg Television interview. In 2007, Ross ventured into the declining residential real estate market, winning an auction for the home-loan servicing unit of Melville, New York-based American Home Mortgage Investment Corp. He agreed to pay between $435 million and $500 million for the right to collect payments and maintain escrow on about $45.3 billion of home mortgages. Dubbed the King of Bankruptcy by clients during his quarter century at the Rothschild investment bank, Ross, 71, entered the U.S. home mortgage business as an increasing number of borrowers quit making payments and profits sank in loan servicing. To contact the reporter on this story: John Gittelsohn in New York at johngitt@bloomberg.net .

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VIX Jumps Most in Year as Drop in U.S. Stocks Spurs Demand for Protection

October 30, 2009

By Jeff Kearns Oct. 30 (Bloomberg) — The benchmark index for U.S. stock options rose the most in a year as consumer confidence and personal spending fell and CIT Group Inc. worked to avert collapse. The VIX, also known as Wall Street’s “fear gauge,” surged 25 percent to 30.97 at 1:39 p.m. in New York as a plunge in stocks spurred demand for options as protection against further declines.

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Stocks in U.S. Extend Weekly Decline on Economic Reports, Concern Over CIT

October 30, 2009

By Rita Nazareth Oct. 30 (Bloomberg) — U.S. stocks tumbled the most since July after declines in personal spending and consumer confidence and the threat of a CIT Group Inc. bankruptcy raised concern over the durability of the economic recovery. The dollar and Treasuries gained, while commodities retreated. CIT, the 101-year-old commercial lender, plunged as investor Carl Icahn agreed to support its prepackaged bankruptcy plan and supply a $1 billion credit line. American Express Co. and Walt Disney Co. slid as Commerce Department data showed a 0.5 percent drop in purchases and the Reuters/University of Michigan sentiment index retreated. MetLife Inc. lost 7 percent after posting a third straight quarterly loss. The Standard & Poor’s 500 Index sank 2.5 percent to 1,039.72 at 1:50 p.m. in New York, erasing yesterday’s 2.3 percent surge triggered by government data showing the economy returned to growth after the worst slump in seven decades. The Dow Jones Industrial Average sank 228.69 points, or 2.3 percent, to 9,733.89. The VIX, the benchmark for U.S. stock options, jumped the most in a year on demand for loss protection. “It’s all about momentum and sustainability,” said Alan Gayle , the Richmond, Virginia-based senior investment strategist at Ridgeworth Investments, which manages $60 billion. “The glass may be half full, but it’s filling slowly. Consumer sentiment is far from strong. Companies have yet to show a sustainable growth plan. I see additional volatility for stocks.” The advance yesterday ended four sessions of losses spurred by growing concern that a 56 percent rally in the S&P 500 since March 9 had overtaken the outlook for earnings and economic growth. Today’s pullback came as the Commerce Department figures also showed incomes were unchanged in September. The report showed inflation was lower than the Federal Reserve’s long-term projection, indicating policy makers can keep rates low. Confidence Slumps Equities also fell today as the consumer confidence data signaled job losses may continue to restrain household spending. The final Michigan index of consumer sentiment decreased to 70.6 from 73.5 in September, which was the highest in more than a year. The index was forecast to fall to 70, the median in a Bloomberg survey of 60 economists. Billionaire investor George Soros said the global economic recovery is “liable to run out of steam” and a “double dip” may follow in 2010 or 2011. He was speaking in Budapest today, in a lecture organized by the Central European University. The dollar and yen rose against most major currencies on concern central banks around the world may be moving too fast to scale back measures designed to haul their economies out of the recession. Central banks are signaling they are ready to withdraw stimulus measures even as economic reports show the recovery from the worst global recession since World War II may be tepid. MetLife Slides MetLife fell 7 percent to $34.25 after posting a third- quarter net loss of $620 million, or 79 cents a share, as revenue declined. Operating earnings, which exclude some investment and derivative results, were 87 cents a share, beating by a penny the average analyst estimate in a survey. McAfee Inc. declined 6.7 percent to $40.84 after the second-biggest maker of security software reported third-quarter sales that fell short of some analysts’ estimates. NYSE Euronext dropped 2.1 percent to $26.99. The world’s largest owner of stock exchanges reported a 28 percent decline in third-quarter profit as revenue from equity trading dropped and European competitors took market share. Excluding some costs, profit was 53 cents a share, beating the 46 cent average of 17 analysts surveyed by Bloomberg. Commodities, Dollar Gauges of energy and raw-materials producers lost at least 1.4 percent. Crude oil, copper and gold fell as the dollar rose, reducing the appeal of commodities as an alternative investment. Exxon Mobil Corp. , the world’s largest company by market value, dropped 2 percent to $72.45, while Freeport-McMoRan Copper & Gold Inc. , the biggest publicly traded copper producer, retreated 2.4 percent to $76.27. The Dollar Index , which IntercontinentalExchange Inc. uses to track the currency against those of some of the U.S.’s biggest trading partners, gained 0.4 percent. The S&P 500 Financials Index fell 2 percent for the biggest decline among 10 industries after surging the most since July yesterday. JPMorgan Chase & Co., Bank of America Corp. and Morgan Stanley fell at least 2.1 percent. CIT Group was halted as it said that it has entered into an agreement with Carl Icahn to support its restructuring plan and secured an incremental $1 billion committed line of credit from Icahn Capital LP to provide supplemental liquidity for CIT as it pursues that plan. ‘Big Drag’ “News that CIT is likely filing for bankruptcy is acting as a big drag on financials,” said Michael Nasto , the senior trader at U.S. Global Investors Inc., which manages about $2 billion in San Antonio. “If they’re having trouble getting funding to keep the company afloat, then you’ve got to wonder about other financial companies. There might be other shoes to drop.” The market for initial public offerings, hurt by the worst returns in at least 14 years, suffered another setback after AEI pulled its sale. Enron Corp.’s former international energy business postponed its IPO yesterday, citing “market conditions” after underwriters earlier cut it by 58 percent to 21 million shares and lowered the forecast price range. The expected size of the offering had fallen to under $300 million from $800 million after Ashmore Group Plc , the London-based fund manager that controls the company, withdrew. Las Vegas Sands Corp. rallied 2.9 percent to $15.19. The casino company run by billionaire Sheldon Adelson said Las Vegas convention business is recovering, after collapsing during the recession. Genworth Gains Genworth Financial Inc. added 2.8 percent to $10.46. The life insurer and mortgage guarantor reported its first profit in six quarters and beat analysts’ estimates. Operating income available to common shareholders, which excludes some investment results, was 18 cents a share, beating by 15 cents the average estimate of 16 analysts surveyed by Bloomberg. So far, earnings-per-share have topped estimates at 81 percent of the companies in the S&P 500 that posted third- quarter results, which would be a record proportion for a full quarter, according to Bloomberg data going back to 1993. Deutsche Bank AG boosted its estimates for economic growth in the second half of 2009 and 2010, citing a “noticeable pickup in demand” following yesterday’s third-quarter report. Gross domestic product growth estimates were raised to 4 percent in the current quarter, 4.5 percent in the first quarter of 2010, 3.5 percent in the second quarter, 3.7 percent in the third quarter and 3.8 percent in the fourth quarter. The previous forecasts were 2.5 percent, 2.6 percent, 3.1 percent, 3.3 percent and 3.8 percent. To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net ; Rita Nazareth in New York at rnazareth@bloomberg.net

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Video: Paliwal Says Harman on `Very Good Path’ to Profitability: Video

October 30, 2009

Oct. 30 (Bloomberg) — Dinesh Paliwal, chief executive officer of Harman International Industries Inc., talks with Bloomberg’s Lori Rothman and Zahra Burton about the company’s profitability outlook.¶ Harman makes audio systems for homes and vehicles. (Source: Bloomberg)

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E&Y: Plan to Survive or Plan to Thrive

October 30, 2009

NEW YORK CITY-Real estate companies globally have put themselves into one of two camps: those that intend to survive the downturn and those that intend to thrive in it. So says Ernst & Young

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E&Y: Plan to Survive or Plan to Thrive

October 30, 2009

NEW YORK CITY-Real estate companies globally have put themselves into one of two camps: those that intend to survive the downturn and those that intend to thrive in it. So says Ernst & Young

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Distressed-Asset Volume Slows in September

October 30, 2009

NEW YORK CITY-The good new is that the industry is seeing a decrease in volume of distressed assets on the landscape. The bad news is that there’s still a whole lot of distress out there. The total number of distressed properties increased just 1% in

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Distressed-Asset Volume Slows in September

October 30, 2009

NEW YORK CITY-The good new is that the industry is seeing a decrease in volume of distressed assets on the landscape. The bad news is that there’s still a whole lot of distress out there. The total number of distressed properties increased just 1% in

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Video: Federated’s Balestrino Discusses Fed Monetary Policy: Video

October 30, 2009

Oct. 30 (Bloomberg) — Joseph Balestrino, a fixed income market strategist at Federated Investors Inc., talks with Bloomberg Television about the outlook for the Federal Reserve monetary policy. (This is an excerpt of the full interview. Source: Bloomberg)

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Video: Tokyo-Mitsubishi’s Rupkey Discusses U.S. Stimulus Plan: Video

October 30, 2009

Oct. 30 (Bloomberg) — Christopher Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd., talks with Bloomberg Television about the U.S. economy, consumer spending and the stimulus package. Spending by U.S. consumers fell in September for the first time in five months after the government’s auto-rebate program expired. (This report is an excerpt. Source: Bloomberg)

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Protective Capital Structures Corp Seeks to Name New President

October 30, 2009

WILMINGTON, DE–(Marketwire – October 30, 2009) – Protective Capital Structures Corp ( PINKSHEETS : PCSO ) seeks to name a new President to manage the day-to-day operations of the company. The new President will be expected to run the finance company that operates as non-depository financial institution to arrange financing for its proprietary financial product, the BCLOC, for businesses that qualify based on the Company’s criteria.

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Asian distressed debt tipped for a comeback

October 30, 2009

Extract not available.

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Asian distressed debt tipped for a comeback

October 30, 2009

Extract not available.

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Virtual Staging Brings Empty Homes to Life

October 30, 2009

Since many buyers today narrow their choices based on online photos, virtual staging is an economical way to show the potential of a vacant property.

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Federal Reserve adopts policy statement supporting prudent commercial real estate (CRE) loan workouts

October 30, 2009

Federal Reserve adopts policy statement supporting prudent commercial real estate (CRE) loan workouts

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WSJ Roundup: Blackstone, Germans, and a Tenant’s Market

October 30, 2009

Blackstone’s Hilton Deal The LBO market was torrid during 2006-2007. So was commercial real estate. Combine the two, and you have the Blackstone/Hilton deal. In the Hilton negotiations, Blackstone is considering contributing $800 million of new equity to buy back debt at a discount. It also is seeking to extend debt maturing in 2013 to 2016, while

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Video: Dear Says Private Equity Needed to Meet Calpers’s Target: Video

October 30, 2009

Oct. 30 (Bloomberg) — Joseph Dear, chief investment officer of the California Public Employees’ Retirement System (Calpers), talks with Bloomberg’s Margaret Brennan about the fund’s investment strategy and asset allocation. Dear also discusses Calpers’s review of management fees and the fund’s business relationship with Apollo Management LP. (Source: Bloomberg)

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Video: Hamermesh Sees U.S. Labor Market Starting `Turnaround’: Video

October 30, 2009

Oct. 30 (Bloomberg) — Daniel Hamermesh, a labor economist at the University of Texas at Austin, talks with Bloomberg’s Margaret Brennan about the outlook for the U.S. labor market. Hamermesh also discusses prospects for economic recovery and the impact of the $787 billion government stimulus on job creation. (Source: Bloomberg)

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Video: EU Prepares to Crack Down on Hidden Bank Account Charges: Video

October 30, 2009

Oct. 30 (Bloomberg) — Bloomberg’s Chris Burns reports on the European Union’s bid to crack down on hidden bank fees. (Source: Bloomberg)

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Video: Blackstone’s Peterson Discusses Executive Pay, Dollar: Video

October 30, 2009

Oct. 30 (Bloomberg) — Peter Peterson, senior chairman and co-founder of Blackstone Group LP, talks with Bloomberg’s Margaret Brennan about the likely effect of government pay caps on executives at taxpayer-rescued firms. Peterson, speaking on Oct. 28, also discussed a “dollar crisis” facing the U.S. and the outlook for the private-equity industry. (This is an excerpt of the full interview. Source: Bloomberg)

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Robin Pellish, founder and ceo, Rocaton Investment Advisors

October 30, 2009

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Robin Pellish, founder and ceo, Rocaton Investment Advisors

October 30, 2009

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Stocks in U.S. Extend Weekly Decline on Personal Spending, Confidence Data

October 30, 2009

By Rita Nazareth Oct. 30 (Bloomberg) — U.S. stocks fell, extending a second straight weekly drop for the Standard & Poor’s 500 Index , after personal spending dropped for the first time in five months and consumer confidence decreased. The dollar and Treasuries gained, while commodities retreated. American Express Co. , Home Depot Inc. and DuPont Co. declined after Commerce Department figures showed a 0.5 percent decrease in purchases last month and the Reuters/University of Michigan consumer sentiment index retreated. MetLife Inc. tumbled 5 percent after the biggest U.S. life insurer posted a third straight loss. The S&P 500 slid after surging the most since July yesterday as the government said the economy returned to growth following the worst contraction in seven decades. The S&P 500 declined 0.8 percent to 1,057.94 at 10:24 a.m. in New York . The Dow Jones Industrial Average fell 75.12, or 0.8 percent, to 9,887.46. Five stocks retreated for each that rose on the New York Stock Exchange. “The stock market got a little tired after a rally of that magnitude yesterday,” said Malcolm Polley , chief investment officer at Stewart Capital Advisors in Indiana, Pennsylvania, which manages $1 billion. “Third-quarter GDP numbers were good, the worst is behind us, but consumer spending is not sustainable yet. Valuations are probably ahead of where they should be.” The advance yesterday ended four sessions of losses spurred by investor concern that a rally since March had overtaken the outlook for economic growth. Since March 9, the S&P 500 has surged 58 percent. Consumer Concern Today’s pullback came as the Commerce Department figures also showed that incomes were unchanged in September, while the savings rate climbed. The report showed inflation was lower than the Federal Reserve’s long-term projection, indicating the policy makers can keep rates low. Equities also fell today as the consumer confidence data signaled job losses may continue to restrain household spending. The final Michigan index of consumer sentiment decreased to 70.6 from 73.5 in September, which was the highest in more than a year. The index was forecast to fall to 70, the median in a Bloomberg survey of 60 economists. Billionaire investor George Soros said the global economic recovery is “liable to run out of steam” and a “double dip” may follow in 2010 or 2011. He was speaking in Budapest today, in a lecture organized by the Central European University. Dollar, Yen Strengthen The dollar and yen rose against most major currencies on concern central banks around the world may be moving too fast to scale back measures designed to haul their economies out of the recession. Central banks are signaling they are ready to withdraw stimulus measures even as economic reports show the recovery from the worst global recession since World War II may be tepid. MetLife fell 5 percent to $35.01 after posting a third- quarter net loss of $620 million, or 79 cents a share, as revenue declined. Operating earnings, which exclude some investment and derivative results, were 87 cents a share, beating by a penny the average analyst estimate in a survey. McAfee Inc. declined 8.4 percent to $40.06 after the second-biggest maker of security software reported third-quarter sales that fell short of some analysts’ estimates. Gauges of energy and raw-materials producers lost at least 0.8 percent. Crude oil, copper and gold fell as the dollar rose, reducing the appeal of commodities as an alternative investment. Exxon Mobil Corp., the world’s largest company by market value, dropped 1.2 percent to $73.06, while Freeport-McMoRan Copper & Gold Inc., the biggest publicly traded copper producer, retreated 1.5 percent to $76.98. Dollar Gains The Dollar Index, which IntercontinentalExchange Inc. uses to track the currency against those of some of the U.S.’s biggest trading partners, gained 0.3 percent. “The beta rally will abate,” said Gunnar Miller , Frankfurt-based global head of equity research at RCM, which oversees $80 billion in assets. “The bounce off the bottom has been almost unprecedented. We’ve already had a pretty good year so we’re expecting things to grind sideways for a while.” The market for initial public offerings, hurt by the worst returns in at least 14 years, suffered another setback after AEI pulled its sale. Enron Corp.’s former international energy business postponed its IPO yesterday, citing “market conditions” after underwriters earlier cut it by 58 percent to 21 million shares and lowered the forecast price range. The expected size of the offering had fallen to under $300 million from $800 million after Ashmore Group Plc , the London-based fund manager that controls the company, withdrew. Las Vegas Sands Jumps Las Vegas Sands Corp. rallied 8.6 percent to $16.03. The casino company run by billionaire Sheldon Adelson said Las Vegas convention business is recovering, after collapsing during the recession. Genworth Financial Inc. surged 10 percent to $11.23. The life insurer and mortgage guarantor reported its first profit in six quarters and beat analysts’ estimates. Operating income available to common shareholders, which excludes some investment results, was 18 cents a share, beating by 15 cents the average estimate of 16 analysts surveyed by Bloomberg. So far, earnings-per-share have topped estimates at 81 percent of the companies in the S&P 500 that posted third- quarter results, which would be a record proportion for a full quarter, according to Bloomberg data going back to 1993. Deutsche Bank AG boosted its estimates for economic growth in the second half of 2009 and 2010, citing a “noticeable pickup in demand” following yesterday’s third-quarter report. Gross domestic product growth estimates were raised to 4 percent in the current quarter, 4.5 percent in the first quarter of 2010, 3.5 percent in the second quarter, 3.7 percent in the third quarter and 3.8 percent in the fourth quarter. The previous forecasts were 2.5 percent, 2.6 percent, 3.1 percent, 3.3 percent and 3.8 percent. To contact the reporters on this story: Sarah Jones in London at sjones35@bloomberg.net ; Rita Nazareth in New York at rnazareth@bloomberg.net

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Video: Ablin Says `Upside Potential’ in Stocks Is More Limited: Video

October 30, 2009

Oct. 30 (Bloomberg) — Jack Ablin, chief investment officer at Harris Private Bank, talks with Bloomberg’s Francine Lacqua, Adam Johnson and Jon Erlichman about the performance of equities. Ablin also discusses the outlook for the U.S. dollar, and investment strategy. (Source: Bloomberg)

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Tree.com Reports Q309 Results and Adds New Warehouse Line

October 30, 2009

CHARLOTTE, N.C., Oct. 30, 2009 (GLOBE NEWSWIRE) — Tree.com, Inc. (Nasdaq:TREE) today announced that it has added a new $75 million warehouse line as well as its financial results for its third quarter ended September 30, 2009. Tree’s Q309 revenue was $50.7 million, which was a slight improvement over Q308 revenue of $50.3 million. Tree reported a GAAP loss of $0.68 per share on a net loss of $7.4 million, both improved over the Q308 levels of a $2.41 loss per share and a $22.6 million net loss. Q309 Adjusted EBITDA was a loss of $3.5 million, which was a $4.8 million improvement year-over-year, from a Q308 Adjusted EBITDA loss of $8.3 million.

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Tree.com Adds New Mortgage Warehouse Line

October 30, 2009

CHARLOTTE, N.C., Oct. 30, 2009 (GLOBE NEWSWIRE) — Tree.com, Inc. (Nasdaq:TREE) today announced that it has added a new $75mm mortgage warehouse line at its LendingTree Loans mortgage operation in Irvine, CA. The new facility is made available by Chase Mortgage Warehouse Finance (a unit of JPMorgan Chase Bank, N.A.), has a term running through October 29, 2010, is available for funding newly originated Agency and FHA loans and has customary financial covenants.

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