a-year-ago

Fuld: "I’ve Been Pummeled, I’ve Been Dumped On"

September 7, 2009

The man vilified for the collapse of Lehman Brothers (LEHMQ.PK) almost a year ago, a failure that triggered the global economic crisis, seemed burdened but not crushed by the pressure of the upcoming anniversary.

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Eric Schurenberg: It Just Ain’t Labor’s Day

September 4, 2009

So the headline number on unemployment is 9.7%. That alone might be enough to send people into the last weekend of summer with the sense that the economy has a long winter ahead of it. But ugly as that 0.3 percentage point jump in the closely watched number is, a look behind that number is uglier still. The decline in jobs wasn’t as bad as the leap in the unemployment rate suggested-but that’s not good news. Uncle Sam’s payroll survey showed 216,000 jobs lost, which University of California, Berkeley’s Brad DeLong thinks wasn’t too terrible . There are two problems with this, however. The first is, the headline unemployment rate leaped because many people who had been too discouraged to look for work came back into the labor force in August–drawn, no doubt, by the happier economic news of the summer — and found there still wasn’t any work for them. The second problem is, that 216,000 jobs lost per month is roughly the run rate of our two most recent recessions , as Arpitha Bykere, senior analyst of Nouriel Roubini’s RGE Monitor , points out. The sole reason the phrase ” only 216,000 jobs lost” doesn’t sound deluded is that we were losing 600,000 jobs a month after Lehman collapsed a year ago. But when you compare these job-loss numbers to those in previous downturns, it looks like we’re still in the middle of our labor recession. The broadest figure for unemployment took a big jump from 16.3% to 16.8% . This is the one that includes discouraged workers and those working part time because they couldn’t find full time work. Atlanta Fed president Dennis Lockhart thinks this is the real unemployment number . Hours worked went down. Economist Clair Brown of U.C. Berkeley points out that today’s unemployment numbers are artificially boosted by the number of people working reduced hours and sharing jobs — a recession-fighting tactic that American companies haven’t used for decades. You can see the effect in the sharp drop in hours worked, particularly in the good producing sector, where they’ve gone from over 40 a week a year ago to just over 33 in August. When the recovery eventually comes, employers can just boost people’s hours at first; they don’t have to re-hire. This all adds up to a heightened possiblity of a double-dip recession, an idea recently embraced by Morgan Stanly Asia head Stephen Roach as well as the perennially downbeat Nouriel Roubini. It also suggests that the recovery will be weak when it comes. Bykere talks about not just a jobless recovery but a “jobless, wageless recovery,” a phrase I hope never has cause to become widespread. Any silver lining? Well, Clair Brown says the “incredibly resilient” U.S. labor market will adapt. Eventually. But not for many Labor Days to come. Continue on CBS MoneyWatch .

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Africa Israel Investments Slumps in Tel Aviv on Plans to Restructure Debt

August 30, 2009

By David Wainer and Alisa Odenheimer Aug. 30 (Bloomberg) — Africa Israel Investments Ltd. , the real-estate company owned by diamond mogul Lev Leviev , said today it will start talks with its bondholders to restructure its debt. The Yehud, Israel-based company is “increasing its preparedness against the risks” that may continue to arise from the global recession, Africa Israel said in an e-mailed statement. The company has been selling property to meet its debt obligation and has paid off 3.3 billion shekels ($864 million) in loans since Jan. 2008, it said. “The company’s assets are not yielding enough to pay back their debt so they’re now facing up to the facts,” said Moti Berliner , an analyst at Meitav Investment House Ltd. in Tel Aviv. “They will be able to reorganize their debt because it is in the interest of the bondholders to see the company survive but there will be a higher cost.” Africa Israel also said its second-quarter loss widened to 1.32 billion shekels from 91 million shekels a year ago. The loss was due mainly to a drop in the value of property under construction and an increase in financing costs, it said. The company’s shares plummeted 91 percent last year as a decline in global property prices drove the value of its assets down, prompting concern it may be forced to default. Since the start of the year the company has focused on selling assets, including a stake in New York’s historic Clock Tower, and buying back bonds to increase liquidity. Africa Israel fell as much as 30.4 percent today, the most in nine months, and was down 26.1 percent to 51.10 shekels as of 10:21 a.m. in Tel Aviv trading. The yield on the company’s notes due 2014 jumped by 7.1 percentage points to 28.6 percent, pushing the price of the 4.8 percent securities down by 11.8 shekels to 44.27. To contact the reporter on this story: David Wainer in Tel Aviv at dwainer1@bloomberg.net

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FTC To Ban Most Telemarketing ‘Robocalls’

August 27, 2009

Americans tired of having their dinners interrupted by phone calls touting car warranties or vacation packages will soon get some relief. The Federal Trade Commission said Thursday it is banning many types of prerecorded telemarketing solicitations, known as robocalls. Currently, consumers must specifically join a do-not-call list to avoid them. Starting Sept. 1, telemarketers will first need written permission from the customer to make such calls. “American consumers have made it crystal clear that few things annoy them more than the billions of commercial telemarketing robocalls they receive every year,” said Jon Leibowitz, chairman of the FTC. Violators will face penalties of up to $16,000 per call. Don’t expect phone solicitations to disappear completely, though. Calls that are not trying to sell goods and services to consumers will be exempt, such as those that provide information like flight cancellations and delivery notices and those from debt collectors. Other calls not covered include those from politicians, charities that contact consumers directly, banks, insurers, phone companies, surveys and certain health care messages such as prescription notifications. The FTC said those don’t fall under its jurisdiction. And calls made by humans rather than automated systems will still be allowed, unless the phone number is on the National Do Not Call Registry. But the FTC said the ban should cover most robocalls, forcing marketers to turn to more expensive live calls, or ramp up efforts in direct mail, e-mail and TV ads. The ban is part of amendments to the FTC’s Telemarketing Sales Rule announced a year ago. Because the ban has been known, telemarketers already have been phasing out robocalls, said Tim Searcy, chief executive of the American Teleservices Association, a trade group whose members include telemarketers. He said the public won’t see much of a change. “For the consumer, the behavior is going to look the same Sept. 1 as it did Aug. 31,” he said. Searcy also said the ban will do little to stop calls touting illegal scams. People who get an unauthorized call can file complaints with the commission online or by calling 1-877-FTC-HELP. “If consumers think they’re being harassed by robocallers, they need to let us know, and we will go after them,” Leibowitz said. ___ On the Net: Complaint form: https://www.ftccomplaintassistant.gov Do Not Call registry: https://www.donotcall.gov

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Video: Robert Novak’s Life And Legacy

August 21, 2009

He was a regular on the show until a year ago when he began his courageous battle against brain cancer. (Political Capital)

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Christian Arens Joins Catalyst:SF as Partner; Will Head up All Client Services

August 20, 2009

SAN FRANCISCO, CA–(Marketwire – August 20, 2009) – Catalyst:SF ( www.catalystsf.com ), the “Marketing Capital” firm founded a year ago by John Durham and Cory Treffiletti, today announced that Christian Arens has joined the firm as a Partner and will head up all client services. “Chris is one of the most senior hires we have made since we launched,” says John Durham, Catalyst:SF’s CEO and Managing Partner. “He has over 12 years of experience in sales, marketing and advertising yet with an entrepreneurial perspective that will be invaluable to our rapidly growing client base. We are thrilled to have Chris in senior management.”

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QBE Insurance Profit Climbs 19% on Premiums, Currency Gains; Shares Surge

August 19, 2009

By Malcolm Scott Aug. 20 (Bloomberg) — QBE Insurance Group Ltd. , Australia’s biggest property and casualty insurer, said first- half profit climbed 19 percent on premium growth and foreign exchange gains. The shares rose the most in almost a year. Net income for the six months ended June 30 was A$1.02 billion ($846 million), from A$859 million a year ago, the Sydney-based company said today in a statement to the Australian stock exchange. QBE shares added 6.9 percent to A$22.18 at 12:10 p.m. in Sydney, paring the drop this year to 14 percent. “It seems to have weathered the storm very well,” said Hugh Dive , who helps manage about $3 billion at Investors Mutual Ltd. in Sydney including QBE shares. “It’s been a laggard and still looks reasonable value, so I wouldn’t be surprised if we see some upgrades after this.” Gross written premiums were up 22 percent to A$8.1 billion as a lower Australian dollar boosted the value of its U.S. earnings and acquisitions led by Chief Executive Officer Frank O’Halloran added to revenue. “We expect premium rate increases achieved in the first half of the year to continue for the majority of our insurance products,” the company said in the statement. The company had investment losses on equities of A$144 million and net foreign exchange gains of A$282 million, it said. It reported a first-half dividend of 62 Australian cents. Growth was assisted by acquisitions completed in 2008, particularly QBE Lenders’ Mortgage Insurance and ZC Sterling, the company said. Acquisitions “Our strategy to lock in distribution and reduce acquisition costs has proved successful as evidenced by the acquisition of eight agencies during 2008 which reduced the commissions paid to external intermediaries and also secured distribution of a number of niche products,” the company said. The acquisitions contributed A$160 million to underwriting profit, it said. Separately today, AMP Ltd. , Australia’s biggest provider of pension plans, said first-half profit fell 1 percent on lower management and performance fees at its Capital Investors unit. To contact the reporter on this story: Malcolm Scott in Sydney at Mscott23@bloomberg.net

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Deere Profit Drops 27%; Outlook Cut on Lower Construction-Equipment Demand

August 19, 2009

By Thomas Black Aug. 19 (Bloomberg) — Deere & Co. , the world’s largest maker of farm equipment, said third-quarter profit dropped 27 percent and lowered its 2009 sales forecast amid declining demand for lawn and construction machinery. Net income fell to $420 million, or 99 cents a share, in the three months ended July 31, from $575.2 million, or $1.32, a year ago, Moline, Illinois-based Deere said today in a statement. Revenue fell 24 percent to $5.89 billion. Deere’s quarterly sales dropped for the second consecutive quarter on a year-over-year basis as the global recession and construction slump reduced demand for machinery, including lawn tractors. Deere forecast fourth-quarter equipment sales will decline 34 percent. “The fourth quarter is weaker, and it’s uncertain what next year will be like,” Eli Lustgarten , an analyst with Longbow Securities in Independence, Ohio, said today in a telephone interview. Deere forecast 2009 equipment sales will drop 21 percent, down from an estimate on May 20 of a 19 percent decline. The company kept its forecast of 2009 net income at $1.1 billion, which Lustgarten said indicates the company will only break even in the fourth quarter. Deere fell $1.99, or 4.4 percent, to $43.10 at 8:52 a.m. in trading before the regular open of the New York Stock Exchange. The shares gained 18 percent this year before today. Profit Tops Estimates Third-quarter earnings topped the average estimate of 17 analysts in a Bloomberg survey of 56 cents a share, excluding some items. Lower taxes and tax credits added about 20 cents to earnings during the quarter, Lustgarten said. The company was helped by bumper U.S. crops, such as corn and soybeans, that spurred sales of large farm equipment. Corn production will rise 5.5 percent this year from 2008, and soybean output will climb 8.1 percent, according to the U.S. Department of Agriculture. “We have seen continued benefit from strength in the U.S. market for large farm machinery and from our efforts to keep a tight rein on costs and inventories,” Samuel Allen , who took over as chief executive officer on Aug. 1, said in the statement. Deere has responded to lower sales by cutting costs, partly through reducing its workforce. Deere said on June 30 that 800 salaried employees took a voluntary offer to leave the company. During the quarter, Deere concluded the combination of two units to form the Worldwide Agriculture and Turf Division. Total revenue during the quarter of $5.89 billion topped the $5.52 billion average analyst estimate. Agriculture and turf sales fell 21 percent to $4.65 billion, mostly on weak demand for lawn and garden equipment and a drop in sales outside the U.S. and Canada. Construction and forestry sales fell 47 percent to $632 million. To contact the reporter on this story: Thomas Black in Monterrey at tblack@bloomberg.net

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BHP Billiton Says `Business as Usual’ in China Amid Arrests of Rio Staff

August 16, 2009

By Robert Fenner Aug. 16 (Bloomberg) — BHP Billiton Ltd. , the world’s largest mining company, said it’s “business as usual” in China after the arrest of four employees of rival Rio Tinto Group. “Nothing has changed for us, we continue to sell into China and we’re committed to our customers there,” Chief Financial Officer Alex Vanselow told the Australian Broadcasting Corp. today. “For us it’s business as usual.” Stern Hu , an Australian citizen who heads Rio’s iron ore business in China, and three colleagues face charges of bribery and stealing commercial secrets from the nation’s steel industry. China is the destination for half of the world’s $52 billion global seaborne iron ore trade. “Both companies have very high standards of integrity in the way we do business,” Vanselow said. “In BHP we have a code of conduct that we take very closely and very dearly and it’s renewed every year.” Vanselow said staff from BHP’s China offices haven’t been requesting leave to return to Australia. BHP Billiton shares closed Aug. 14 at A$38.26 and have gained 26 percent this year. The company last week reported a 65 percent decline in second-half profit after metal prices and demand plunged during the global recession. Net income fell to $3.26 billion for the six months ended June 30, from $9.4 billion a year ago. Vanselow said more transparent global pricing for iron ore may limit the risk of breaching secrets rules in China and other countries. While many commodity prices are set through exchanges such as the London Metal Exchange, iron ore producers typically negotiate new contact prices directly with their major customers. “Nobody is asking how we are negotiating copper prices into China because there is a pricing mechanism that’s global,” Vanselow said. “I’m saying transparent prices are for everybody’s benefit and create a situation where this type of question wouldn’t even be possible.” To contact the reporter on this story: Robert Fenner in Melbourne rfenner@bloomberg.net

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Ginnie Mae’s President Murin Is Said to Resign After One Year in Position

August 13, 2009

By Dawn Kopecki Aug. 13 (Bloomberg) — Joseph Murin , the president of government-run mortgage bond insurer Ginnie Mae, will step down tomorrow after about 13 months on the job, according to two people familiar with his plans. Murin, who joined Ginnie Mae on July 1, 2008, plans to pursue private business opportunities, according to the people, who asked not to be named because an announcement has yet to be made. Before becoming Ginnie Mae’s president, Murin was president of Mortgage Settlement Network LLC, a Pittsburgh-based provider of loan settlement services and appraisals. His resignation would be the third departure this year of the top executive for the main companies responsible for the majority of U.S. mortgage financing. Freddie Mac CEO David Moffett resigned in March, and Herb Allison left Fannie Mae to help oversee a $700 billion bank rescue program. With the government seizure of Fannie Mae and Freddie Mac in September, and a greater reliance by mortgage borrowers on federal loan programs, Ginnie Mae has grown. Debt explicitly backed through Ginnie Mae, formally known as the Government National Mortgage Association, climbed to $680 billion as of June 30 from $360 billion two years earlier, agency data shows. Ginnie Mae, which helped to pioneer the mortgage-backed securities market in 1970, mainly guarantees payments on bonds backed by loans insured by the Federal Housing Administration , Veterans Affairs Department or Agriculture Department. The agency, which issues the only mortgage bonds to carry the “full faith and credit” of the U.S. government, packaged a record $43.5 billion in federally backed loans into securities in June. The agency’s mortgage bond volume almost doubled in the first half of this year, to $207 billion from $107 billion during the same timeframe a year ago, as the mortgage markets seized and borrowers turned to federally supported mortgage financing. To contact the reporter on this story: Dawn Kopecki in Washington at dkopecki@bloomberg.net .

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Home-Price Drops in U.S. Accelerated Last Quarter as Foreclosures Climbed

August 12, 2009

By Kathleen M. Howley and Brian Louis Aug. 12 (Bloomberg) — Home price declines in the U.S. accelerated in the second quarter, dropping by a record 15.6 percent from a year earlier, as foreclosure sales weighed on values. The median price of an existing single-family home dropped to $174,100, the National Association of Realtors said today. Total sales rose 3.8 percent to a seasonally adjusted annual rate of 4.76 million from the first quarter and dropped 2.9 percent from the second quarter of 2008. Prices fell in 129 out of 155 metropolitan areas from a year ago and 39 states experienced sales increases from the first quarter, the Chicago-based realtors group said. Sales in the U.S. housing market at the heart of the global recession are beginning to stabilize, said Patrick Newport , an economist for Lexington, Massachusetts-based IHS Global Insight. “Sales of new and existing homes are beginning to grow again,” Newport said in an interview. “The market may be past its bottom.” Home prices are tumbling even as mortgage rates remain near all-time lows. The average U.S. rate for a 30-year fixed home loan was to 5.22 percent last week, down from 5.25 percent the prior week, according to mortgage buyer Freddie Mac of McLean, Virginia. The rate dipped to 4.78 percent in April, the lowest ever recorded. U.S. foreclosure filings — notices of default, auction or bank seizure — rose to a record in 2009’s first half, according to RealtyTrac Inc., an Irvine, California-based seller of real estate data. More than 1.5 million properties, one in every 84 U.S. households, received a foreclosure filing, RealtyTrac said in a July 16 report. Default Discounts Homes in or near default typically sell for about 20 percent less than non-distressed property, according to the Realtors group. Those sales reduce the value of each surrounding home by an average $8,667 because the lower price is used by appraisers to set values for other properties in the area, according to the Center for Responsible Lending in Durham, North Carolina. The world’s largest economy will contract 1.3 percent this year, according to a July 10 forecast by Fannie Mae. The U.S. unemployment rate may climb to 9.9 percent in 2010, from 9.3 percent this year, according to the mortgage buyer controlled by the U.S. government. To contact the reporters on this story: Kathleen M. Howley in Boston at kmhowley@bloomberg.net ; To contact the reporter on this story: Brian Louis in Chicago at blouis1@bloomberg.net .

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PE fund raising in global infra space dries up in Q2 2009

August 8, 2009

Private equity fund raising in the infrastructure space literally dried up in the June quarter with no deals being announced, whereas an amount of USD 14 billion was raised in the same period a year ago.

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Tsingtao Net Rises 68% as Beer Sales Gain in China Rivalry With SABMiller

August 6, 2009

By Wing-Gar Cheng and Nicholas Olczak Aug. 7 (Bloomberg) — Tsingtao Brewery Co. , China’s second- biggest brewery by volume, said first-half profit rose 68 percent, the most in more than two years, as it sold more beer and the cost of barley fell. Net income in the six months to June rose to 639.8 million yuan ($94 million) from 381.1 million yuan a year ago, the company said in a statement to Hong Kong’s stock exchange. The profit growth is the fastest since the second half of 2006. Chairman Jin Zhiguo has been reorganizing management of the Chinese brewery, which was founded by German settlers more than a century ago. Sales by volume grew 12.9 percent, helping Tsingtao gain ground on SABMiller Plc ’s venture with China Resources Enterprise Ltd. , which makes the Snow brand. “Going into the second half of this year, the recovery of consumption will be more pronounced,” Olive Xia , a Shanghai- based analyst at Core Pacific-Yamaichi International, said before the earnings announcement. Tsingtao rose 0.8 percent to HK$26.90 in Hong Kong before the earnings announcement was released yesterday. That boosted its gain this year to 67 percent, beating the 45 percent climb of the benchmark Hang Seng Index. The Shanghai-listed shares fell 0.6 percent yesterday to 28.48 yuan, trimming the gain this year to 43 percent. The price of barley , one of the key ingredients in beer production, fell 35 percent to A$201.7 ($170) a metric ton in the 12 months to June, from a record A$312.3 a year ago, according to data from the Australian Bureau of Agricultural and Resource Economics. Canada and Australia are the biggest exporters of the grain to China, according to the Chinese customs bureau . Beer Consumption “Beer consumption in the second half of the year will continue to rise, especially under the government’s stimulus to boost domestic consumption,” Tsingtao said in its statement. “The company will also take measures to enhance its operations to control costs.” China’s beer production in the first six months rose 6 percent to 20.51 billion liters, the company said. The brewer’s beer sales volume from January through June rose 12.6 percent to 3.02 billion liters, driven by Tsingtao, which increased 29.5 percent to 1.4 billion liters. Tsingtao’s sales rose 15 percent to 9.1 billion yuan. Earnings per share rose to 0.489 yuan, compared with 0.2931 yuan a year ago. “This implies 18 percent sales volume growth” in the second quarter against 5 percent in the first three months of the year, Nomura Holdings Inc. analyst Christine Peng said in a note to clients late yesterday. Peng recommends buying Tsingtao shares. Budweiser, Miller Lite Tsingtao competes with Budweiser maker Anheuser-Busch InBev NV and SABMiller , the brewer of Grolsch and Miller Lite, in China. SABMiller owns 49 percent of China Resources Snow Breweries Ltd., its venture with China Resources Enterprise . AB InBev last year made 45.68 billion liters of beer, more than twice that of SABMiller’s 21 billion liters. China Resources Snow Breweries brewed 7.3 billion liters while Tsingtao’s production was 5.4 billion liters. Tsingtao was ranked eighth globally in 2007, with a 2.8 percent share of beer volume, according to a survey by Euromonitor International . In 2007 The total volume of beer sold in 2007 was 177 billion liters, the survey showed. A 355-milliliter can of Tsingtao costs 3.6 yuan, cheaper than Budweiser at 5 yuan or Carlsberg A/S’s eponymous beer at 5.2 yuan, according to the Web site of the retailer Carrefour China. Tsingtao is more expensive than some local brands, such as Xinlaoshanting at 1.8 yuan for a 355-milliliter can, according to the Web site. Snow sells for as low as 15.50 yuan for six 355-milliliter cans on the Internet shopping site Blemall.com To contact the reporters on this story: Nicholas Olczak in Hong Kong at nolczak@bloomberg.net ; Wing-Gar Cheng in Hong Kong at wgcheng@bloomberg.net

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Toyota’s U.S. Sales Drop Eases on `Cash for Clunkers’; Hyundai Gains Share

August 3, 2009

By Alan Ohnsman and Craig Trudell Aug. 4 (Bloomberg) — Toyota Motor Corp.

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Apple Profit Tops Estimates on IPhone, Mac Notebook Sales; Shares Advance

July 21, 2009

By Connie Guglielmo July 21 (Bloomberg) — Apple Inc. reported third-quarter sales and profit that exceeded analysts’ estimates after wooing customers with a faster iPhone and less-expensive Macintosh notebook computers. The stock rose 3.8 percent in late trading. Profit rose to $1.23 billion, or $1.35 a share, from $1.07 billion, or $1.19, a year ago, Apple said today in a statement

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Woods, Watson Save Bookies Millions at British Open

July 20, 2009

By Christopher Elser and Ben Martin July 20 (Bloomberg) — Tom Watson and Tiger Woods not only lost golf’s British Open, they cost gamblers millions of pounds. Woods was the pre-tournament favorite at 2-1 with U.K. bookmaker William Hill, while Watson, who was 1,000-1 at Ladbrokes at the outset of the event, closed to 7-1 going into the final round at Turnberry in Scotland

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