memory

Lexr Media Introduces First 128GB Secure Digital Memory Card

by on January 4, 2011

Lexr Media Introduces First 128GB Secure Digital Memory Card

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Lexr Media Introduces First 128GB Secure Digital Memory Card

Wendy N. Powell: The Career Hangover: What Do You Do?

by on October 21, 2010

You find yourself at the end of a chapter in life — you chose a career and all of a sudden there is no longer room for you in the company. My friend, you are not alone. It feels remarkably like a hangover, hurting and hoping that it will end soon. No longer part of the company “family,” you are one of the newly “orphaned” children and you wondering where to go and what to do. Shake yourself off and get rid of the hopelessness. You can mourn for a few days, but get to work on your new goals as soon as you can. Most people sit in front of their computers for countless hours or even months, searching for the same jobs that multitudes of people are applying for. You must concentrate not only on job opportunities, but take more active steps in improving the applicant — you. You have the unique opportunity to reinvent yourself. Critically review your strengths, make a decision about your personal brand, and follow through. Identify what sets you apart and make it your best asset. Conduct a SWOT analysis to help market yourself. To refresh your memory, SWOT stands for your personal strengths and weaknesses , and the outside opportunities and threats . • Make a critical list of your strengths. Think it through; go back to it on occasion to revise. What activities do you enjoy? What do you do well? What makes you most effective? Brainstorm ways to turn these strengths into possibilities for your personal and professional growth. • It is equally important to assess your weaknesses. Be realistic about what careers may not be for you, and honest about what skills you do not have. • Finding and weighing the opportunities can be the most difficult. The current job market may have limited career choices, but you need to brainstorm potential creative opportunities from the pool of your chosen strengths. Of course, keep apprised of the industries that are hiring in your area, but also be aware of the possibility of relocating. If you want to start your own business, invest with your eyes open wide. • Threats to your success are unfortunately abundant and occasionally out of your control. Don’t get in your own way, think positively, and push through the obstacles and threats that may appear. It is likely that you will have more time on your hands, so spend it wisely by re-acquainting yourself with your chosen field of work. Many industries are changing with technology and media, so stay aware of what’s new in your world, and be able to hold informed conversations with prospective employers or lenders so you can prove that you would add to the bottom line. If possible, get fresh work experience by volunteering your time or applying for temporary work. You don’t know what opportunities will surface. You also need to get out of the house. The natural tendency is to avoid people who ask about your job search. These may be the very individuals to lead you to your new job. I know one unemployed person who refused to be around friends and family for fear of hearing the dreaded question, “New job yet?” After getting out and about, he realized that his new career opportunity was there for the taking from a former colleague. He was hired into his new career after networking. Years later, he returned the favor for the very person who helped him. There are countless stories of reinvention where people have picked themselves up by the proverbial bootstraps and soared in their careers with fresh choices. These people are critically thinking risk-takers, and they are just what we need to make our economy soar. Among them, the computer technician who invested his severance pay in workout centers, the human resource director who realized her strength in teaching and writing, the financial manager who became a cupcake mogul, and the retiree who created the best recipe for pâté and is marketing it. There is life outside of the comfort zone. You actually might like it there.

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Wendy N. Powell: The Career Hangover: What Do You Do?

Charles Gasparino: Oliver Stone’s Wall Street Sequel Sure to Be a Day Late and a Dollar Short

September 15, 2010

Last week, it was reported that director Oliver Stone dined with a New York Times columnist at the Four Seasons restaurant; a place where the top executives on Wall Street (the same guys who caused the financial crisis exactly two years ago and it’s fair to say the Great Recession that followed) love to hang out and shoot the shit about their unsavory business. Stone, as everyone should know by now, is putting out the long-awaited sequel to his mega hit movie Wall Street . This one is called Wall Street: Money Never Sleeps . It is, of course, a fictionalized account of the financial crisis (if you know anything about Oliver Stone, you know that even his attempts at non-fiction are pretty fictionalized), and based on the various interviews Stone has given (including this one to the Times ) he views the movie has one of those teachable moments. On the two year anniversary of the bankruptcy of Lehman Brothers and the broader collapse of the financial system that followed, it is supposed to help us all understand something about the men who led us into the abyss; namely what drove them in their pursuit of greed at all costs. Don’t bet on it. I haven’t seen the movie yet (I’m supposed to go to the premier next week) but based on some of Stone’s own commentary, I may just wait for the DVD. In his interview with the Times , Stone reminds us that, “Wall Street’s gone crazy. It’s banking on steroids.” (Not exactly news, Oliver.) He fears that many of the Wall Street titans he’s dining with that afternoon think that “Stone must be a communist here, a liberal; a liberal is worse than a communist.” (That’s an interesting conclusion since as I show in my new book, Bought and Paid For , it was the Wall Street brass who helped elect Barack Obama, his Liberal fellow traveler, as president). And just so we all don’t think that the new Oliver Stone is that same guy who came up with the most bizarre conspiracy theory to account for JFK’s assassination (and one of the most bizarre Joe Pesci performances ever), he reminds the Times columnist that, “It’s silly to be simplifying and say Wall Street is evil,” even if “Goldman Sachs is evil, maybe.” (I wonder what he thinks about Al-Queda?) During the interview, Stone comes back to earth a bit with this little gem: “Most of the people I know on Wall Street are good people. Like my father. He really would like to make some money, yeah, but they would also like to do good for society.” The only thing worse than a goofy, washed up director trying to reclaim his greatness with a teachable-moment movie is a columnist like this one, who rather than portraying Stone in his schizophrenic best, just sucked it all in without once questioning Stone’s sanity. The new Wall Street movie might be entertaining, but given its hype and the bizarre mindset of its director, I’m sticking with the old one. The fact of the matter is, we don’t really need another teachable moment about the financial crisis. At least, not one that flows through the brain cells of Oliver Stone or someone from the New York Times who can’t get enough of a washed-up director’s illogical view of the world, and it is my guess that after the initial hype has passed, most movie goers will think the same. Two years after the financial crisis, Americans face nearly 10 percent unemployment, mountains of debt, businesses that make money but won’t hire, and a president who found it part of his job description to opine about a Mosque near Ground Zero while the economy is falling apart. Wall Street greed, which seems to be Stone’s obsession, much like the rest of the media, is, to coin a journalistic cliché, yesterday’s news. Note to Stone: We know these guys are assholes, and we probably don’t need to be reminded of it again during a 133 minute film. What we don’t know is how they became such assholes, and I’m pretty certain Oliver Stone won’t be shedding much light on that either. Jimmy Cayne being “out of touch” with reality (Stone’s description) cannot fully explain why trillions of dollars of stocks, bonds, and financial instruments derived from stocks and bonds were created and held by his bank Bear Stearns with little regard that someday they might be worth nothing. Yes, some people on Wall Street are “good people” (like we really need Stone to point that out); but what is it that allows good, well- educated people to do stupid things? Remember, when Jimmy Cayne was CEO, the guy running Bear’s bond department which was loading up on toxic debt was a man named Warren Spector, one of the most intellectually gifted traders on Wall Street. The guy taking charge at the risk committee meetings was the legendary trader and risk expert Alan “Ace” Greenberg. Cayne may have been a goofy, pot-smoking slouch who would rather play golf than tend to the firm’s needs, but what about Spector and Greenberg? What made them think that buying mortgage debt in the quantity they were buying it at as a massive housing bubble was raging was such a good thing? In other words, it can’t be just greed–why would anyone, even the most greedy Wall Street type, simply bet the ranch if the end result could be the demise of their gravy train? They wouldn’t of course. That’s because it wasn’t just greed that motivated the Wall Street bankers to behave as if they were on “steroids;” no matter how many movies in the next year (I hear there are nonfictional accounts of the financial crisis being shot as I write this) tell you so. In fact, I bet if you can get a straight answer from either Greenberg or Spector, or any other of the fallen Wall Street titans (like Dick Fuld, the former head of Lehman Brothers) they would tell you that the real reason they felt compelled to gamble as they did is because based on past experience, they were all involved in a no lose operation. Wall Street would never implode because the government wouldn’t let it happen. Lehman Brothers failed in 2008, but it was bailed out in 1994 and 1998 by various government policies that inflated the financial system with cheap money and turned losses into gains; same with Merrill Lynch, Citigroup and the rest of the big firms. And that’s what all these movies and many of the books written about the greed merchants Stone was dining with at the Four Seasons leave out: That it was next to impossible for the financial system to accept so much risk as the norm without the government approving of it all along the way. This approval went beyond lax regulation that allowed firms like Lehman and Bear to borrow more than 30 times the amount of capital they had on hand to make market bets. It’s an approval that comes only from a partnership between government and Wall Street that dates back decades. It may surprise Oliver Stone to learn that most of those guys in the Four Seasons aren’t quite as right-wing as he thinks. They most probably share his world view about government and business; namely how bureaucrats like the former Fed President and current Treasury Secretary Tim Geithner and his ilk (think Robert Rubin, Hank Paulson, and Larry Summers to name just three) can make the world a better place by working with Wall Street–protecting the markets when times get rough as they have countless times during the past 30 years by bailing out Wall Street with taxpayer money when it screwed up — including the ultimate screw up in 2008. Those bailouts gave Jimmy Cayne the confidence he could play golf and leave the heavy lifting to Spector and Greenberg. Those bailouts gave Spector and Greenberg the security to know if they bet wrong, the Fed and the Treasury would come to their rescue by handing out cheap money or free money to make things better. Full disclosure: While I was at CNBC I spent a few minutes with one of the stars of the new Wall Street film, Shia Lebeouf, who looked me up through an acquaintance and wanted my take on what makes the typical trader on Wall Street banker or trader tick. Unlike most of the people he spoke with, I actually covered the financial crisis on daily basis since its beginning and I reported on both the implosion and the massive profits that began to be showered on Wall Street following the bailouts as the government flooded Wall Street with guarantees and benefits as it had done in the past. If my memory serves me right, I told him it was the typical Wall Streeters sense of entitlement that stands out the most in my mind. I implored him to go to bars and restaurants around New York City where they all hang out. Not just the places where their bosses dine and are on their best behavior, but the places where the traders and bankers who are not as polished take clients and watch them in action. “Now that the bonuses are flowing they will act as if the whole financial crisis didn’t happen,” I remember saying. My point being: For them, losing money, getting bailed by the government, and making money on the backs of taxpayers is the way the system is supposed to work because it has always worked that way. Why should this time be any different? LeBeouf just listened intently. We spoke for about 15 minutes more and he thanked me for my time. I’m not sure he understood what I meant by all that, and I’m pretty certain his boss wouldn’t either.

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Robert Reich: The Real Lesson of Labor Day

September 5, 2010

Welcome to the worst Labor Day in the memory of most Americans. Organized labor is down to about 7 percent of the private work force. Members of non-organized labor — most of the rest of us — are unemployed, underemployed or underwater. The Labor Department reported on Friday that just 67,000 new private-sector jobs were created in August, which, when added to the loss of public-sector (mostly temporary Census worker jobs) resulted in a net loss of over 50,000 jobs for the month. But at least 125,000 net new jobs are needed to keep up with the growth of the potential work force. Face it: The national economy isn’t escaping the gravitational pull of the Great Recession. None of the standard booster rockets are working. Near-zero short-term interest rates from the Fed, almost record-low borrowing costs in the bond market, a giant stimulus package, along with tax credits for small businesses that hire the long-term unemployed have all failed to do enough. That’s because the real problem has to do with the structure of the economy, not the business cycle. No booster rocket can work unless consumers are able, at some point, to keep the economy moving on their own. But consumers no longer have the purchasing power to buy the goods and services they produce as workers; for some time now, their means haven’t kept up with what the growing economy could and should have been able to provide them. The Origin of the Crisis This crisis began decades ago when a new wave of technology — things like satellite communications, container ships, computers and eventually the Internet — made it cheaper for American employers to use low-wage labor abroad or labor-replacing software here at home than to continue paying the typical worker a middle-class wage. Even though the American economy kept growing, hourly wages flattened. The median male worker earns less today, adjusted for inflation, than he did 30 years ago. But for years American families kept spending as if their incomes were keeping pace with overall economic growth. And their spending fueled continued growth. How did families manage this trick? First, women streamed into the paid work force. By the late 1990s, more than 60 percent of mothers with young children worked outside the home (in 1966, only 24 percent did). Second, everyone put in more hours. What families didn’t receive in wage increases they made up for in work increases. By the mid-2000s, the typical male worker was putting in roughly 100 hours more each year than two decades before, and the typical female worker about 200 hours more. When American families couldn’t squeeze any more income out of these two coping mechanisms, they embarked on a third: going ever deeper into debt. This seemed painless — as long as home prices were soaring. From 2002 to 2007, American households extracted $2.3 trillion from their homes. Eventually, of course, the debt bubble burst — and with it, the last coping mechanism. Now we’re left to deal with the underlying problem that we’ve avoided for decades. Even if nearly everyone was employed, the vast middle class still wouldn’t have enough money to buy what the economy is capable of producing. Where have all the economic gains gone? Mostly to the top. The economists Emmanuel Saez and Thomas Piketty examined tax returns from 1913 to 2008 . They discovered an interesting pattern. In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation’s total income; by 2007, the top 1 percent took in 23.5 percent of total income. It’s no coincidence that the last time income was this concentrated was in 1928. I do not mean to suggest that such astonishing consolidations of income at the top directly cause sharp economic declines. The connection is more subtle. The rich spend a much smaller proportion of their incomes than the rest of us. So when they get a disproportionate share of total income, the economy is robbed of the demand it needs to keep growing and creating jobs. What’s more, the rich don’t necessarily invest their earnings and savings in the American economy; they send them anywhere around the globe where they’ll summon the highest returns — sometimes that’s here, but often it’s the Cayman Islands, China or elsewhere. The rich also put their money into assets most likely to attract other big investors (commodities, stocks, dot-coms or real estate), which can become wildly inflated as a result. Meanwhile, as the economy grows, the vast majority in the middle naturally want to live better. Their consequent spending fuels continued growth and creates enough jobs for almost everyone, at least for a time. But because this situation can’t be sustained, at some point — 1929 and 2008 offer ready examples — the bill comes due. What We Learned and Didn’t Learn From the Great Depression of the 1930s This time around, policymakers had knowledge their counterparts didn’t have in 1929; they knew they could avoid immediate financial calamity by flooding the economy with money. But, paradoxically, averting another Great Depression-like calamity removed political pressure for more fundamental reform. We’re left instead with a long and seemingly endless Great Jobs Recession. The Great Depression and its aftermath demonstrate that there is only one way back to full recovery: through more widely shared prosperity. In the 1930s, the American economy was completely restructured. New Deal measures — Social Security, a 40-hour work week with time-and-a-half overtime, unemployment insurance, the right to form unions and bargain collectively, the minimum wage — leveled the playing field. In the decades after World War II, legislation like the G.I. Bill, a vast expansion of public higher education and civil rights and voting rights laws further reduced economic inequality. Much of this was paid for with a 70 percent to 90 percent marginal income tax on the highest incomes. And as America’s middle class shared more of the economy’s gains, it was able to buy more of the goods and services the economy could provide. The result: rapid growth and more jobs. By contrast, little has been done since 2008 to widen the circle of prosperity. Health-care reform is an important step forward but it’s not nearly enough. What Else Should Be Done What else could be done to raise wages and thereby spur the economy? I don’t pretend to have all the answers but some initiatives seem worthwhile. [Pause for a commercial announcement. These points, and others, are developed at length in my upcoming book, Aftershock: The Next Economy and America's Future , out in two weeks from Alfred Knopf.] We might consider, for example, extending the earned income tax credit all the way up through the middle class, and paying for it with a tax on carbon. The carbon tax would raise the prices of goods and services especially dependent on carbon-based fuels, which is appropriate given that the social costs of carbon-based fuels should be included in their prices. Consider how much our society now spends on such things as foreign wars designed to secure our sources of oil, as well as oil cleanups. But the wage subsidies would more than make up for these price rises, at least for most Americans in the middle and below. Another step would be to exempt the first $20,000 of income from payroll taxes and paying for it with a payroll tax on incomes over $250,000. This, too, seems reasonable, given that under current law only the first $106,000 of income is subject to the Social Security portion of the payroll tax – a particularly regressive system. Most higher-income people, who get good medical care, live longer and collect far more in Social Security benefits, than do lower-income people. In the longer term, Americans must be better prepared to succeed in the global, high-tech economy. Early childhood education should be more widely available, paid for by a small 0.5 percent fee on all financial transactions. Public universities should be free; in return, graduates would then be required to pay back 10 percent of their first 10 years of full-time income. Another step: workers who lose their jobs and have to settle for positions that pay less could qualify for “earnings insurance” that would pay half the salary difference for two years; such a program would probably prove less expensive than extended unemployment benefits. These measures would not enlarge the budget deficit because they would be paid for. In fact, such moves would help reduce the long-term deficits by getting more Americans back to work and the economy growing again. Here’s the point. Policies that generate more widely shared prosperity lead to stronger and more sustainable economic growth — and that’s good for everyone. The rich are better off with a smaller percentage of a fast-growing economy than a larger share of an economy that’s barely moving. That’s the Labor Day lesson we learned decades ago; until we remember it again, we’ll be stuck in the Great Recession. This post originally appeared at RobertReich.org .

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Robert Reich: How To End The Great Recession

September 3, 2010

THIS promises to be the worst Labor Day in the memory of most Americans. Organized labor is down to about 7 percent of the private work force. Members of non-organized labor — most of the rest of us — are unemployed, underemployed or underwater. The Labor Department reported on Friday that just 67,000 new private-sector jobs were created in August, while at least 125,000 are needed to keep up with the growth of the potential work force.

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Violin Memory Names Ken Hoppe as Vice President of Channels

August 3, 2010

MOUNTAIN VIEW, CA–(Marketwire – August 3, 2010) –  Violin Memory, Inc., provider of the world’s fastest and most scalable memory appliances, today announced Ken Hoppe has joined the company’s executive team as Vice President of Channels. Hoppe will aggressively grow Violin Memory’s robust network of partnerships with leading VARs and systems integrators.

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Violin Memory Names Ken Hoppe as Vice President of Channels

August 3, 2010

MOUNTAIN VIEW, CA–(Marketwire – August 3, 2010) –  Violin Memory, Inc., provider of the world’s fastest and most scalable memory appliances, today announced Ken Hoppe has joined the company’s executive team as Vice President of Channels. Hoppe will aggressively grow Violin Memory’s robust network of partnerships with leading VARs and systems integrators.

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Ken Markman: The Advent of Brand Culture

July 29, 2010

Recognizing the Need for Reinvention Whether you work with brands every day or want to develop your own brand, your success lies in a different place than most experts would have you look. We have a tendency to travel the same road, again and again. We talk incessantly about the same problems: The trade, the economy, the licensor, the licensee, the deal. It’s an endless, circuitous, chain of circumstances with little time or effort directed toward understanding the changing consumer. Who is The New Consumer? They are Millennials. They are your strongest advocates. We’re not the first, nor the last to mention them. But, if you don’t know who they are…the short answer is they’re your future. Their values, attitudes and demographic characteristics are different than all previous generations. They are driving digital technologies that are changing media habits; enabling consumers to self-edit, while at the same time, by choice, become advocates of what is meaningful to them. It’s causing brand-marketers and licensors to reconsider how they are reaching the right audience at the right time with the right message in the right place. Like it or not, they are tethered to technology. Successful products offerings enable Millennials to participate in their own experiences. It is tribal; technology is the acoustic rhythm to their narrative. As a result, the convergence of technology (xbox 360 Kinetic, Apple iPad) and the interplay of mobile phones (apps), immersive retail experiences and location based (touch-screen) venues are the new brand media mix. Millennials Millennials, there are about 80 million of them born between 1980 and 19951. They are the prize. They are who you must embrace. They are not just consumers, they are the owners of your brand. They are advocates who dictate purchase patterns and are the voice of authority. Millennials are setting the new social agenda, in a context called BrandCultureTM. We are just beginning to witness the nuances and shifts of their consumer behavior. The real ah-ha will arrive when we unlock the coding of this generation and the hardwiring of their brains. If you know a Cognitive Scientist, hire them; they’ll be your most trusted resource when unraveling the mysteries of your new consumer and the behavior that is driving businesses, brands and culture in the 21st Century. Consumer Attributes They think in pictures: Images are the narrative of culture. 32,000 years ago the earliest of cave paintings served the same purpose. They’re hard wired into our brain. They work like semeiotic messages. Meaning, the images are the language of story-telling. It’s the earliest form of personal and cultural brand messaging. (Consider: Facebook, Flickr and the iPhone). They remember stories; so, don’t repeat facts: Brands are emotional stories. They are experiences, merging interest with intent by igniting curiosity and inviting consumption. “Your brain didn’t retrieve a fact about an experience,” says Douglas Merrill, former Chief Information Officer of Google, “….your brain retrieved the story.” Their brand is their message: Messages are everywhere. They work as reoccurring themes that bond culture. They establish a context and work like scaffolding in your brain. They function in a setting of story-telling and myth-making where symbols are language and images are text. They embrace the “authentic” power of Social Media: Okay. I get it. We know Social Media is important. But, do you really know why? It’s not because of its instantaneous reach or ubiquitous use. Social Media dominates all other media because of its relevance. It’s your story, shared with others, that touches the same core emotions. They use technology: “It’s not just their gadgets, it’s the way technology has been fused into their social lives.” This is the new “collective -connective,” a social dynamic requiring participation — real, authentic participation. It’s that simple. Why We Believe In What We Create? We remember things that are important when they are experienced as stories. Our brains take notice of them. We become conscious of them. They become relevant, take on a purpose and meaning and move to our memory. Cognitive scientists call this process encoding, which means something is being converted from one format into another. Cultural Myth, Story Telling And Recurring Themes Bond Culture It is based upon the uniquely human capacity to symbolically classify experiences, link and then to share them…the process through which an older generation induces and compels a younger generation to reproduce the established lifestyle, consequently a culture that is embedded in a person’s way of life. This multi-generational social condition is called the “Cultural Evolution Theory” which states, “that traits have a certain meaning in the context of evolutionary stages, and they look at relationships between material culture and social institutions and beliefs.” The importance of realism amid such heightened realities in worlds of fantasy make characters, specifically heroes and their powers, when stripped away, real to an audience that wants to believe they really exist. This transformation is a blurring of “reality’s” fantasy. Captured in symbols and an extremely evolved iconography, popular, recurring themes understood completely or not, become folklore…create a suspended disbelief: a new reality for a new generation… borrowing from the past and making them their own…a form of branded history, with its own images indelibly marked on the minds of a new global audience. The images they represent, from myth to folklore, become the legacy that defines a brand. Central to this process is the concept and arch of the Brand…or as we will call it: BrandCulture KKMBRANDS.COM

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Bill Singer: Moffat’s Sex. Nietzsche’s Memory.

July 12, 2010

It used to be sex, drugs, and rock ‘n roll — now it’s sex, drugs, rock ‘n roll, politics and Wall Street. For some reason, a lot of folks just get hung up about that sex thing. For example, consider the recent revelations about Robert Moffat, Jr., the former IBM vice President who was snared in the ongoing Galleon insider trading case. In a March 29, 2010 press release from the United States Attorney for the Southern District of New York: ” Former IBM Senior Vice President Pleads Guilty in Manhattan Federal Court to Insider Trading ,” we were told in matter-of-fact style that: From August to October 2008, MOFFAT engaged in an insider trading scheme in which MOFFAT obtained material,nonpublic information (“Inside Information”) relating to IBM,Advanced Micro Devices, Inc. (“AMD”) and Lenovo Group Ltd.(“Lenovo”), and provided it to DANIELLE CHIESI, a friend who worked during the relevant time period for New Castle Partners,an equity hedge fund group affiliated with JP Morgan Chase & Co. At the time of the conspiracy, MOFFAT was a Senior Vice President and Group Executive in IBM’s Systems and Technology Group. In addition, MOFFAT also served as a non-voting member of Lenovo’s Board of Directors. From August to October 2008, MOFFAT engaged in an insider trading scheme in which MOFFAT obtained material,nonpublic information (“Inside Information”) relating to IBM,Advanced Micro Devices, Inc. (“AMD”) and Lenovo Group Ltd.(“Lenovo”), and provided it to DANIELLE CHIESI, a friend who worked during the relevant time period for New Castle Partners,an equity hedge fund group affiliated with JP Morgan Chase & Co. . . [S]pecifically, in September 2008, MOFFAT provided Chiesi with Inside Information relating to IBM’s and Lenovo’s performance in the companies’ respective fiscal quarters ending in September 2008. In addition, in August and September 2008, MOFFAT provided CHIESI with Inside Information relating to a business deal pursuant to which AMD would spin off its manufacturing business into a separate entity. . . Ah yes, Danielle Chiesi was merely “a friend who worked during the relevant time period.” Frankly, there appears to have been quite a bit more to this story than what was disclosed in the criminal plea. Fortune magazine just published a compelling article: ” Dangerous liaisons at IBM: Inside the biggest hedge fund” insider-trading ring (By James Bandler with Doris Burke, July 6, 2010). In addition to the details of Moffat’s descent into the criminal conduct of insider trading, we are presented with a nuanced glimpse into his personal life — which includes his wife dealing with multiple sclerosis and a sexual relationship with Danielle Chiesi that began in 2003. Except, well, if you believe Moffat, it wasn’t really a sexual relationship — it wasn’t really about sex. No…not really. Consider this provocative paragraph from the Fortune article: In an interview with Fortune, Moffat came across as emotional, repentant, and chastened. He wept describing the embarrassment he’d brought upon IBM, his colleagues, and family. While he showed little self-pity, he rebuffed the notion that he hadn’t paid a price for his crimes, noting that by leaving IBM he was giving up an estimated $65 million in lost stock options and pension that he would have collected when he retired at 60. “The biggest thing I’ve lost,” he said, “is my reputation.” Moffat was not allowed by his lawyer to discuss his case or his relationship with Chiesi, but when told that Fortune intended to write about the affair, he said this: “Everyone wants to make this about sex. Danielle had an extensive network of business people. And she added clarity about what was going on in the business world…I know in my heart what this relationship was about: clarity in the business environment.” He may even believe that. I recently authored a column: ” Eliot Spitzer Leaves The Farm For Wall Street ” in which I considered yet another individual whose career arc descended into the abyss, and that figure also was embroiled in a sexual relationship outside his marriage. Frankly, it seems as if we’re faced with a pandemic of sexual affairs involving politicians — if memory serves me correct, in recent years we have had allegations of sexual affairs made against President Bill Clinton, Governor Eliot Spitzer, Governor Mark Sanford, Governor Jim McGreevey, Senator John Ensign, Senator David Vitter, Representative Mark Foley, Representative Vito Fossella, Mayor Kwame Kilpatrick, Mayor Gavin Newsome, and Mayor Antonio Villaraigosa and I’m sure that I’ve missed a number of other public figures, so, go ahead, fill in the blanks. Don’t get me wrong, I’m no prude. Sex is often as much about power as anything else and some folks are adrenaline junkies. Nonetheless, if it’s just about sex, then why won’t any of these folks just come out and say it, from day one, when they’re caught? Why is it always necessary to drag the humiliated spouse into the glare of the spotlight? Why is your downfall just another opportunity to stage a media event and to deliver a faux -sincere speech about your failure? I mean, seriously, can’t one of these jerks just stand before the cameras and say “I wanted to get laid. I got laid. I enjoyed it. I didn’t mean to hurt anyone. I’m sorry that I got caught.” All of which leads me back, albeit via a somewhat tortured path, to Mr. Moffat and his explanation in Fortune about his sexual affair with Ms. Chiesi. Frankly, I don’t understand Moffat’s explanation, the whole clarity in the business environment thing. Is he serious? Of course it was about sex. When things sound silly, they usually are. When desperate men seek justification for their stupidity, the explanations that they offer to us rarely ring true. Consider Bill Clinton’s now infamous January 26, 1998, statement that said, in part: [I] want you to listen to me. I’m going to say this again: I did not have sexual relations with that woman, Miss Lewinsky. I never told anybody to lie, not a single time; never. These allegations are false. And I need to go back to work for the American people. Thank you. Imagine how much more absurd that same statement would now seem, if the former President offered this version: [I] want you to listen to me. I’m going to say this again: I did not have sexual relations with that woman, Miss Lewinsky. Our relationship was about clarity in the business environment. I never told anybody to lie, not a single time; never. These allegations are false. And I need to go back to work for the American people. Thank you. Perhaps Nietzsche said it better: “I did that,” says my memory. “I could not have done that,” says my pride, and remains inexorable. Eventually — the memory yields. Aphorism 68, Beyond Good and Evil

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Asian Stocks Rise on Speculation Global Recovery Still Intact Canon Gains

June 10, 2010

By Anna Kitanaka June 11 (Bloomberg) — Asian stocks advanced for a second straight day as investor appetite for riskier assets rose on speculation Europe’s debt crisis won’t derail global growth. Canon Inc. , which receives 31 percent of its sales from Europe, gained 2.5 percent in Tokyo after the European Central Bank raised its euro-region economic growth forecast for this year. Samsung Electronics Co. increased 2.2 percent in Seoul after an industry group forecast chip sales to rise. BHP Billiton Ltd. , the world’s biggest mining company, jumped 2 percent after commodity prices advanced yesterday. The MSCI Asia Pacific Index rose 1.4 percent to 112.55 as of 11:58 a.m. in Tokyo, paring its drop this week to 0.8 percent. The gauge has retreated 13 percent from this year’s high on April 15 on concern debt problems in Europe and Chinese measures to curb property prices will hurt global growth. The gauge’s stocks are trading near the cheapest levels in 18 months. “Perhaps people have been too pessimistic in estimating the impact of the European debt crisis on global growth,” said Tim Schroeders , who helps manage about $1.1 billion at Pengana Capital Ltd. in Melbourne. “Overall the signs are encouraging. Investors generally are prepared to take more risk today.” Japan’s Nikkei 225 Stock Average advanced 2 percent while Australia’s S&P/ASX 200 Index increased 1.3 percent. South Korea’s Kospi Index gained 0.9 percent. China’s Shanghai Composite Index rose 0.5 percent and Hong Kong’s Hang Seng Index gained 1.2 percent after government reports showed Chinese industrial output, retail sales and fixed-asset investment climbed. ECB Projections Futures on the Standard & Poor’s 500 Index lost 0.2 percent. The gauge gained 3 percent yesterday as economic reports from China, Japan and Australia boosted optimism about growth worldwide. The ECB yesterday raised its euro-region growth forecast for this year and cut it for 2011. The central bank expects the economy will expand around 1 percent this year compared with a previous forecast of around 0.8 percent. It will grow about 1.2 percent in 2011, lower than an earlier projection of around 1.5 percent because of weaker domestic demand, European Central Bank president Jean-Claude Trichet said. Canon , which counts Europe as its biggest market, gained 2.5 percent to 3,735 yen in Tokyo. Fanuc Ltd. , a maker of industrial robots that got 17 percent of its revenue in Europe in its last fiscal year, rose 2.2 percent to 10,450 yen. Japanese exporters also rose as the euro strengthened to as much as 111.28 yen today from as low as 108.98 yesterday, boosting the value of sales from the region when repatriated. The euro traded near a one-week high against the dollar. Commodity Prices Samsung Electronics, which receives 24 percent of its revenue from Europe, advanced 2.2 percent to 790,000 won. Elpida Memory Inc. gained 1.6 percent to 1,726 yen in Tokyo. Chip-related stocks climbed after the Semiconductor Industry Association raised its forecast for global microchip sales this year to 28 percent, up from a November forecast of 10 percent growth. China, India and other emerging markets are fueling demand for semiconductors, the association said. Taiwan Semiconductor Manufacturing Co. ’s Chairman Morris Chang said the European crisis has had a limited impact on the chip industry, the Central News Agency reported yesterday. TSMC shares climbed 1.4 percent to NT$60.20 after the company reported a 38 percent jump in May revenue from a year earlier. “People are now optimistic about the global economy,” said Juichi Wako , a senior strategist at Tokyo-based Nomura Holdings Inc. “Investors who had avoided risk assets have started buying them.” Growth Hopes Optimism over economic growth has put the MSCI Asia Pacific Index on course for its highest close since June 4. Government reports yesterday showed Australian employers hired more people in May than economists predicted, while Japan’s economy grew faster than estimated in the three months ended March 31. The slide in the MSCI Asia Pacific Index since April has dragged the price of stocks in the gauge to 14.4 times estimated earnings on average, near the lowest level since January 2009. “Valuations are looking attractive following recent declines,” said Monika Yang , who helps oversee $2 billion at Hamon Asset Management Ltd. in Hong Kong. “Investors are waiting to see how earnings will pan out later this year.” In Taipei, Hon Hai Precision Industry Co. , the maker of Apple Inc. iPhones, advanced 2.1 percent to NT$120 after the company said May revenue surged 78 percent from a year earlier. Bond Risk Declines A gauge of raw-materials producers rose 1.6 percent, the second-biggest advance of the MSCI Asia Pacific Index’s 10 industry groups after technology. The London Metal Exchange Index of six metals including copper and zinc rose 0.9 percent yesterday to the highest since June 3. Crude oil for July delivery rose 1.5 percent in New York yesterday, the highest level in four weeks. BHP Billiton increased 2 percent to A$38.36 in Sydney. Mitsubishi Corp. , which gets about 40 percent of sales from commodities, added 0.4 percent to 1,893 yen in Tokyo. Posco, Asia’s third-biggest steelmaker, advanced 2.2 percent to 458,500 won in Seoul. Financial shares were the biggest contributor to the MSCI Asia Pacific Index’s gain today as the cost of protecting Asia- Pacific corporate and sovereign bonds from default declined. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan fell 9 basis points to 142 basis points. Mitsubishi UFJ Financial Group Inc. , Japan’s biggest bank by market value, which increased 3.4 percent to 430 yen. Commonwealth Bank of Australia , the country’s largest lender, gained 1.7 percent to A$52.24 in Sydney and Westpac Banking Corp., Australia’s second-biggest lender, rose 2.3 percent to A$23.15. To contact the reporter on this story: Anna Kitanaka in Tokyo at akitanaka@bloomberg.net .

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Japan’s First-Quarter Growth Revised Higher on Consumer Spending, Housing

June 9, 2010

By Keiko Ujikane June 10 (Bloomberg) — Japan’s economy expanded more than initially estimated in the first quarter as consumer spending and housing investment rose at a faster pace. Gross domestic product rose at an annual 5 percent rate in the three months ended March 31, quicker than the 4.9 percent reported in preliminary figures last month, the Cabinet Office said today in Tokyo. The median estimate of 18 economists surveyed by Bloomberg News was for 4.2 percent. None of the analysts predicted quicker growth. Companies from Elpida Memory Inc. to JFE Holdings Inc. are benefiting from rebounding demand in Asia, particularly China, the world’s fastest-growing major economy and Japan’s biggest overseas market. The export-led rebound has begun to encourage companies and consumers to spend, boosting optimism that the recovery may be sustained even as prices keep falling at home. “As long as the global rebound is driven by booming Asian economies, Japan’s export-led revival should be sustained,” Ryutaro Kono , chief economist at BNP Paribas in Tokyo, said before the report. “The pace of economic growth may slow in coming quarters, but Japan’s economy will likely expand around 2 percent, which is well above potential growth.” The yen traded at 91.32 per dollar at 9:02 a.m. in Tokyo from 91.24 before the report. The Nikkei 225 Stock Average opened 0.4 percent higher. Public Debt Faster growth may make it easier for new Prime Minister Naoto Kan to tackle the nation’s public debt , the largest in the world, without derailing the economic recovery. His government will compile a plan to address fiscal constraints by the end of the month as Japan bids to avoid comparisons with Greece and the European Union. Japanese manufacturers are tapping Asian demand. Elpida Memory , the country’s sole maker of computer memory chips, plans to build factories in Taiwan and China, President Yukio Sakamoto said this week. The company expects record profit and revenue this fiscal year, he said. JFE Holdings , Japan’s second-largest steelmaker, said last month that it plans to spend 1 trillion yen ($11 billion) over three fiscal years to tap rising demand in Asia as profitability increases. To contact the reporters on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net ;

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Elpida Plans China, Taiwan Plants as It Heads for Record Profit, CEO Says

June 6, 2010

By Jason Clenfield and Mikako Nakajima June 7 (Bloomberg) — Elpida Memory Inc. , Japan’s sole maker of computer-memory chips, plans to build factories in Taiwan and China to meet demand and reduce tax payments, President Yukio Sakamoto said. The company will “definitely go into” China with a Taiwanese chipmaker by as early as 2012 and seek support from the Chinese government, Sakamoto said in a June 4 interview. Elpida is also accelerating plans to add a second manufacturing plant at its Taiwanese unit, Rexchip Electronics Corp. , he said. “Products that are going to be consumed in China probably have to be made in China,” Sakamoto, 62, said at the company’s Tokyo headquarters. Elpida expects record profit and sales this fiscal year as computer sales rebound and mobile devices require more memory to process programs, Sakamoto said. Samsung Electronics Co. announced last month plans to invest $8.9 billion on chips and Hynix Semiconductor Inc. raised its spending budget. Global sales of dynamic random access memory, chips that serve as short-term memory inside computers or smartphones such as Apple Inc.’s iPhone, will surge 78 percent this year, Stamford, Connecticut-based Gartner Inc. said last week. That’s more than double the 27 percent growth the research firm estimates for the overall semiconductor industry. “Demand is increasing for high performance DRAM,” Sakamoto said. “The amount of DRAM used in an iPhone will probably double next year.” Elpida fell 2.9 percent to 1,694 yen at the midday trading break on the Tokyo Stock Exchange, while the benchmark Nikkei 225 Stock Average dropped 4 percent. Shares of the chipmaker have risen 12 percent this year. Record Profit If chip prices remain at current levels, Elpida will post operating profit of more than 160 billion yen ($1.8 billion) on sales of about 700 billion yen in the year ending March 2011, Sakamoto said. Those projections exceed the average of analyst estimates compiled by Bloomberg. While Elpida’s rivals are increasing investment this year, Sakamoto said he doesn’t plan to boost the company’s capital spending budget from 115 billion yen this fiscal year. Instead, the company will focus on shrinking the circuitry of its chips to 45 nanometers from 65 nanometers to boost production, he said. Suwon, South Korea-based Samsung , the world’s biggest maker of computer memory, said last month it will spend 11 trillion won ($8.9 billion) to increase its chip manufacturing capacity. Two weeks later, Hynix, the second-largest maker of computer- memory chips, raised its 2010 investment plan more than 30 percent to 3.05 trillion won. Chip Prices The price of the benchmark 1-gigabit DRAM chip fell as much as 15 percent as Samsung’s capital spending plan raised concern rivals will follow suit and flood the market with chips. DRAM prices more than tripled last year after tumbling 62 percent to a record in 2008, according to prices at Taipei-based DrameXchange Technology Inc. Elpida will start construction on its first Chinese factory by as early as 2012, Sakamoto said. Rising demand in the market, which is poised this year to pass Japan as the world’s No. 2 economy, tariffs and currency risks make manufacturing in China a necessity, he said. Sakamoto said he would look to limit Elpida’s investment in the project. The company, which has lost money in the last two years, had about 600 billion yen in liabilities as of March 31. Sakamoto said Elpida will decide on China by December and draw up a plan within the next four months to build a second Rexchip factory in Taiwan. The plant would cost about $1.8 billion and “we’d like to get as much as half of the funding from our customers,” said Sakamoto. Sakamoto also said the company aims to begin mass production of NAND flash memory chips next year, Sakamoto said. The company began tests two months ago at Elpida’s Hiroshima factory using technology bought in March from bankrupt chipmaker Spansion Inc. To contact the reporter on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Mikako Nakajima in Tokyo at mikako@bloomberg.net

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German President Koehler Unexpectedly Quits After Criticism on Afghanistan

May 31, 2010

By Patrick Donahue and Brian Parkin May 31 (Bloomberg) — German President Horst Koehler unexpectedly announced his resignation with immediate effect, citing public criticism of remarks he made about Germany’s military mission in Afghanistan. Koehler, a former managing director of the International Monetary Fund, becomes the first German head of state to quit in post-World War II history. He suggested in a May 22 radio interview that military engagement is necessary to protect Germany’s economic interests, prompting calls by opposition lawmakers for him to withdraw his remarks. “I regret that my comments could lead to misunderstanding for a question that’s important and difficult for our nation,” Koehler said as he announced his resignation in Berlin today. The criticism “lacks any foundation” because it “goes so far as to accuse me of favoring military operations” not covered by Germany’s constitution. “It undermines the necessary respect for my office.” While Koehler’s role is mainly ceremonial, his decision to quit adds to pressure on Chancellor Angela Merkel as support for her coalition plunges over her efforts to stem Europe’s debt crisis and backstop the euro. Roland Koch , a deputy leader of Merkel’s Christian Democrats, unexpectedly announced his decision to quit as prime minister of Hesse state six days ago. ‘Deep Fissures’ Koehler’s resignation “is a huge blow to Merkel, sending a signal of national disunity at home and abroad,” Jochen Staadt, a politics professor at Berlin’s Free University, said in a phone interview. “Koehler has thrown off his responsibility as head of state at a critical moment. Such a step shows how deep fissures are in Germany’s political caste.” Merkel canceled a planned visit to the German national soccer team’s training camp in northern Italy following the announcement. She had been due to inspect the team’s preparations for next month’s World Cup in South Africa, her first engagement after welcoming Germany’s win in the Eurovision song contest by Lena Meyer-Landrut . Koehler called Merkel to inform her of his decision at noon and announced his resignation two hours later, she told reporters. “I was of course surprised by this phone conversation and attempted to change his mind,” Merkel said. “This was unfortunately not successful. I very deeply regret this decision but of course told him that I respect it.” Special Assembly Koehler, 67, a member of Merkel’s Christian Democrats who suspended his party membership to run for office, was re-elected to a second four-year term only in May last year after backing from the Christian Democrats and the Free Democrats led by Guido Westerwelle , now foreign minister. Koehler defeated the Social Democratic candidate Gesine Schwan by 613 votes to 503 votes at a special assembly of lawmakers and state delegates. Merkel said at the time that Kohler is “exactly the right president we need during these times of crisis.” His duties, which include signing bills into law after they clear both houses of parliament, will now be transferred to Jens Boehrnsen , current head of the upper house and mayor of the city of Bremen, pending a presidential election next month by the special assembly, the president’s office said in a statement. Koehler, in the interview with Deutschlandradio, said an export-oriented country like Germany “must also understand that in certain cases, in an emergency, military operations are necessary to protect our interests.” He cited as examples maintaining free trade routes and settling regional instability that could have a “negative” impact on Germany’s “trade, jobs and income .” ‘Dangerously Wrong’ While Koehler later pushed back on his initial comments, saying he referred more specifically to the anti-piracy mission off the Horn of Africa rather than Afghanistan, Merkel’s government was forced to field questions on his remarks at a regular press briefing on May 28. The president’s comments “expose a dangerously wrong understanding of missions abroad,” Frithjof Schmidt, a lawmaker from the opposition Green Party, said in a statement the same day. “He should correct his statements as quickly as possible.” Waning support for Koehler was highlighted when Germany’s Der Spiegel magazine in this week’s edition dubbed the president “Horst Luebke,” alluding to Heinrich Luebke, Germany’s second postwar president who stepped down in 1969. Luebke was widely recognized as a poor public speaker and a frequent target of ridicule, especially toward the end of his term when his failing health started to affect his memory, Spiegel said. Koehler “has apparently got a very thin skin,” Hugo Mueller-Vogg, who published a biography of the president in 2005, said on N24 television. “He really thought he could change something in this country. But then he realized that his office is largely ceremonial.” To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net ; Patrick Donahue at pdonahue1@bloomberg.net

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Samsung May Become `Uncatchable’ With $15.6 Billion Capital-Spending Plan

May 17, 2010

By Kevin Cho May 18 (Bloomberg) — Samsung Electronics Co. ’s record 18 trillion won ($15.6 billion) capital spending plan may widen its lead in the memory-chip and flat-screen industries to the extent rivals can’t catch up, investors and analysts said. Samsung will invest 11 trillion won this year expanding its capacity to manufacture chips, 5 trillion won on liquid-crystal displays and 2 trillion won on televisions and mobile-phones, the Suwon, South Korea-based company said yesterday. Combined with research and development, spending will increase to 26 trillion won, 67 percent more than in 2009. Samsung, which posted record profit last quarter, may avoid accelerating the typical shortage-to-glut cycles in the chip and LCD industries as competitors can’t afford boosting outlays, analysts at Meritz Securities Co. and NH Investment & Securities Co. said. The investments may push spending in the memory-chip industry to the highest since 2007, a boon for equipment manufacturers such as Applied Materials Inc. “Who can catch up to Samsung? No one,” said Choi Min Jai , a fund manager at Seoul-based KTB Asset Management Co., which manages about $9.3 billion in assets, including Samsung shares. “If others invest together, then the industry may fall apart but there’s no one able to race with Samsung right now.” Samsung fell 3.2 percent to close at 784,000 won on the Korea Exchange yesterday, compared with the benchmark Kospi index’s 2.6 percent decline. The company’s investment budget, the largest in the technology industry, exceeds those of Intel Corp., International Business Machines Corp. and Sony Corp. combined. Have Difficulty Smaller rivals will have difficulty in keeping up with Samsung, which had about 20 trillion won in cash , equivalents and short-term investments at the end of March, because they are still recovering from the industry’s three-year slump, said Lee Sun Tae , a Seoul-based analyst at Meritz. The computer-memory chip industry posted losses for 10 consecutive quarters before returning to a profit last year, El Segundo, California-based researcher ISuppli Corp. said this month. The global slump prompted manufacturers to cut production and investment plans, helping ease the industry glut. “The benefits of the current up-cycle will be distributed unevenly as the gap between first tiers and second tiers has widened, in terms of both capability to add capacity and technology,” Chung Chang Won , an analyst at Nomura Holdings Inc., wrote in a report last month. DRAM Leader Samsung had a 32.3 percent share of the global dynamic random access memory market in the first quarter, compared with second-ranked Hynix’s 21.5 percent, according to Dramexchange Technology Inc., operator of Asia’s biggest spot market for semiconductors. Japan’s Elpida Memory Inc. had a 17.4 percent share, while Micron Technology Inc. had 14.1 percent. While investments by memory chipmakers will more than double to $18.8 billion this year, it’s still 41 percent less than that of 2007, according to Merrill Lynch & Co. “Previously, when Samsung increased its investment others followed, but under current circumstances, they don’t have the potential and may be conservative in their spending plans,” said Seo Won Seok , an analyst at NH Investment. Global revenue for DRAM, which temporarily holds data and helps computer processors run multiple programs simultaneously, will probably climb 40 percent to $31.9 billion this year, ISuppli said in February. Flat Screens Samsung, the world’s largest LCD maker, is also boosting spending on flat screens to meet rising demand. LG Display Co. , the second-largest, last month raised its budget by about 38 percent to 5.5 trillion won for 2010. Global shipments of LCD TVs may rise 24 percent to more than 180 million units in 2010, Austin, Texas-based DisplaySearch said in March. Analysts predict Samsung’s earnings growth will probably extend until the third quarter, and higher memory-chip and flat- panel prices will help the company post record profit in 2010. “This massive amount of spending during tough times will cement Samsung’s leadership,” said Kim Young Joon , who oversees $932 million of stocks at NH-CA Asset Management in Seoul as head of equity investment. “The investments could pressure competitors to follow suit, which could be a burden for smaller rivals that aren’t as financially strong as Samsung.” To contact the reporters on this story: Kevin Cho in Seoul at kcho2@bloomberg.net

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Jill S. Brown: As Seen On TV: How to Make the Next Big Thing

May 17, 2010

I think that old adage about the American dream being a house with a white picket fence is pretty stale. If you ask me, I think the new American dream is coming up with a great idea and making it a profitable success… then the house, the fence and if you’re a humanitarian, even a 501c3 may follow. Inventors are a special breed of person obsessed with solving problems and believing they can create the next big thing every person or household will need, want and use. The goal of most every inventor is to land a licensing deal and obtain manufacturing capital to turn their gizmo, gadget or concept into an overnight sensation. Products like Oxi-Clean, Sham Wow, Magic Jack, the Magic Bullet and the Snuggie have made a lucky few many millions of dollars. Who knew an airline blanket with sleeves would become all the rage amongst college kids or a mini blender-food processor would become the hottest selling small home appliance? Well, someone had the prescience to know this and put the money up to market these products. This past week in San Diego a couple of dozen inventors were hoping to get discovered by the people who make the next big things happen. They were exhibiting their inventions in the Inventors Pavillion at Response Expo , which is one of the main conventions geared toward the Direct Response industry. What’s direct response? Basically any ad that asks you to “call now” or visit a website for more information. Infomercials fall into the category of direct response, and it’s an industry that can take you from rags to riches. John Yarrington, publisher of Response Magazine, says, “if you’re an inventor with a great idea sitting around in Iowa, how are you going to get your invention in front of the best marketers in the world?” You come to a convention like this where you can meet the players from the companies who made products like Topsy Turvy (the upside down tomato planter), PedEgg, PediPaws , SpaceBag , and LifeLock household names. Some of these inventors have been in the game for years, but most were new to the pitching game. All of these inventors have one thing in common. They are all looking for licensing deals and help with manufacturing. Here are a few of the items that might catch your attention some night when you’re flipping channels at two in the morning. The VertaCore, by veteran inventor Eliot James Geeting (EJG Product Development) has already licensed around 20 different products, and this was far from his first rodeo. This time around he was showing off his three latest inventions, one of which is a new fitness device that trains your core standing up rather than lying down. The problem Eliot says he was trying to solve was how to get a good core workout without lying down on the floor. Cathi Reyes, a stay at home mom who likes to stay fit, came up with the Aqua Bag , an insulated bottle holder, wallet and purse all in one cute little bag you can sling over your shoulder. A semiconductor engineer named Chris Anatasi is hoping his Quick Kut will be the next tool no household can do without. He created it for cutting open those frustrating factory sealed plastic encasings that your scissors are no match for. Did anyone see that Larry David scene against plastic packaging on Curb Your Enthusiasm ? It could have been the commercial for this product. Here’s a product that’s a real head-scratcher. Need a better memory and a clean head of hair at the same time? Be on the lookout for “Brain Wash” shampoo and conditioner containing ginkgo biloba. The sales person I spoke to claims this product is able to get the memory-improving herb right into your blood stream while making your hair smell like grapefruit and pina colada! The same company, Evergreen Research was also hocking their Appetite Control Button (an aromatherapy button you wear that supposedly makes you less hungry) and an insect repelling bracelet. Some inventors have spent a lifetime working on one pet project. Perhaps the cutest, crowd-pleasing invention was Elisa Nardulli’s “Lace Replace.” It’s a shoelace replacement system that puts cute little novelty buttons in the eyelets and has a zipper in between so there’s no more lacing up your shoes – you simply zip them up. She came up with idea 18 years ago when trying to teach her daughter how to lace her shoes. Also works for your grandma with arthritis! She doesn’t have a website but you can inquire at LaceReplace@yahoo.com. But you don’t need to spend decades on an idea. The Gas Mileage Doubler created by Paul Dieges, a civil engineer, supposedly came up with his concept 6 weeks before the show. It’s supposed to be like a small generator on wheels that you tow behind your car, only you’re not really towing it…rather it’s pushing your car. Just plug it in overnight and, they say, voila! You’re just paying one cent per mile according to the Dr. Tom Swift, a history professor and wannabe capitalist. How much would you pay for a product like this? They say it’ll be offered for $39.97, but I think they’d better leave the numbers to direct response capitalists who figure out price points for a living. Green inventions are gold. The “Instant Organic Garden” wasn’t quite ready for prime time (no website or official name yet), but I suspect an easy to use organic garden planting product could be a hit. For more info you can contact jmellesmoen@gmail.com. Also in the green camp was an invention to keep your kitchen clear of recycling clutter. A Canadian realtor came up with a prototype for a mini trash compactor called the Duzall . Finally, one was right up my alley. How would you like a clip bag that yells at you when you’re about to dive into a bag of potato chips? A cross between a hallmark greeting card and a bag clip, the Record O Clip lets you record messages to yourself like, “step away from the Cheetos you lard ass and go the gym.” If only it came with a private trainer that actually threw you in the car and took you to the gym too. Now that would be a valuable feature for one low price of $9.99!

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Samsung Electronics to Invest $22.6 Billion in 2010 to Build Lead in Chips

May 17, 2010

By Kevin Cho May 17 (Bloomberg) — Samsung Electronics Co. plans to outspend Intel Corp., International Business Machines Corp. and Sony Corp. combined to widen its lead as the world’s largest maker of memory chips and flat-panel displays. Capital expenditure will jump to 18 trillion won ($15.6 billion) this year from 8 trillion won in 2009, Suwon, South Korea-based Samsung Electronics said in a statement today. Including research and development, spending will increase to 26 trillion won, it said. The largest spending budget in the technology industry may help Samsung build on its market lead and force smaller competitors to boost investments to keep up. Samsung’s purchases may be a boon for equipment makers including Applied Materials Inc. as the industry recovers from the global recession. “I believe this massive amount of spending during tough times will cement Samsung’s leadership,” said Kim Young Joon , who oversees $932 million of stocks at NH-CA Asset Management in Seoul as head of equity investment, including Samsung shares. “The investments could pressure competitors to follow suit, which could be a burden for smaller rivals that aren’t as financially strong as Samsung.” Samsung fell 3.2 percent to close at 784,000 won on the Korea Exchange, compared with the benchmark Kospi index’s 2.6 percent decline. ‘Substantial’ Increase Samsung, which said last month it would “substantially” increase its 2010 spending budget, plans to invest 9 trillion won in the memory-chip business, compared with an earlier budget of 5.5 trillion won. Spending on liquid-crystal displays will rise to 5 trillion won from 3 trillion won, it said. Investments for semiconductors will include a new production line for memory chips and adding capacity to an existing manufacturing facility, Samsung said. The company also plans to build a new production line for LCDs on so-called eighth-generation technology to meet rising demand. Today’s decision “was made to address indications of improving market conditions throughout the global consumer electronics and IT industries, while further strengthening Samsung’s leadership in memory semiconductors and LCD panels,” Samsung said in the statement. Samsung, which had about 20 trillion won in cash , equivalents and short-term investments at the end of March, is able to spend “aggressively” compared with rivals who are still recovering from the industry’s three-year slump, according to Lee Sun Tae , a Seoul-based analyst at Meritz Securities Co. Return to Profit The computer-memory chip industry posted net losses for 10 consecutive quarters before returning to a profit last year, El Segundo, California-based researcher, ISuppli Corp. said this month. Weaker demand amid the economic downturn prompted manufacturers to cut production and investment plans, helping ease the industry glut. Samsung posted losses at its semiconductor division in the fourth quarter of 2008 and the following three-month period after chip prices declined. That compared with seven consecutive quarterly losses for Hynix between 2007 and 2009 and Micron’s three years of losses. Samsung said last month it would “substantially” increase spending in 2010 after first-quarter net income jumped almost sevenfold to a record. Samsung’s investment in chip-making technology has helped the company reduce manufacturing costs and make faster semiconductors. Demand for personal computers, projected to increase 20 percent this year by researcher Gartner Inc. , is also driving up computer-memory prices. “Distributed Unevenly” “The benefits of the current up-cycle will be distributed unevenly as the gap between first tiers and second tiers has widened, in terms of both capability to add capacity and technology,” Chung Chang Won , an analyst at Nomura Holdings Inc., wrote in a report last month. Samsung had a 32.3 percent share of the global dynamic random access memory, or DRAM, market in the first quarter, compared with second-ranked Hynix’s 21.5 percent, according to Dramexchange Technology Inc., operator of Asia’s biggest spot market for semiconductors. Japan’s Elpida Memory Inc. had a 17.4 percent share, while Micron had 14.1 percent. While investment by computer-memory chipmakers will almost double to $8.4 billion this year, it’s still 32 percent less than 2008, according to Taipei-based Dramexchange. Don’t Have Potential Samsung’s spending isn’t a sign that the market “is going to fall apart,” according to Song Myung Sup , an analyst at HI Investment & Securities Co. “If the smaller companies join and increase investment together, then that can be a danger signal. But right now, the others don’t seem to have the potential.” Global revenue for DRAM, which temporarily holds data and helps computer processors run multiple programs simultaneously, will probably climb 40 percent to $31.9 billion this year, ISuppli Corp. said in February. Samsung, the world’s largest LCD maker, is also boosting spending for the flat screens to meet rising demand. LG Display Co. , the second-largest, last month raised its budget by about 38 percent to 5.5 trillion won for 2010. Global shipments of LCD TVs may rise 24 percent to more than 180 million units in 2010, Austin, Texas-based DisplaySearch said in March. Samsung in April forecast profit , which exceeded that of rival, iPhone-maker Apple , in the latest quarter, will probably rise in the current period on sales of chips, flat-screens, TVs and mobile phones. Analysts predict Samsung’s earnings growth will probably extend until the third quarter, while higher memory-chip and flat-panel prices will help the company post record profit in 2010. To contact the reporters on this story: Kevin Cho in Seoul at kcho2@bloomberg.net

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Samsung Electronics Profit Rises Seven-Fold to $3.6 Billion on Chip Prices

April 29, 2010

By Kevin Cho April 30 (Bloomberg) — Samsung Electronics Co. , Asia’s biggest maker of semiconductors, flat screens and mobile phones, reported record profit after rebounding demand for personal computers drove up chip prices. First-quarter net income rose almost seven-fold to 3.99 trillion won ($3.6 billion) in the three months ended March 31, from 582.2 billion won a year earlier, the Suwon, South Korea- based company said in a statement today. Sales, including those of overseas affiliates, increased 21 percent to 34.64 trillion won. Samsung said it expects to boost spending and earnings growth to extend into this quarter, joining technology companies including Intel Corp. and Apple Inc. in signaling a revival in demand for electronics ranging from televisions to PCs. Analysts predict Samsung’s earnings growth will probably extend until the third quarter, while higher memory-chip and flat-panel prices will help the company post record profit this year. The likelihood of increased spending “reflects a confidence in demand,” said Chang In Whan , president of Seoul- based KTB Asset Management Co., which manages the equivalent to $10 billion in assets. “I think overall the company will post stronger earnings than we previously anticipated.” Samsung , which climbed 77 percent last year, rose 1.6 percent to 838,000 won at 10:58 a.m. in Seoul trading, while the benchmark Kospi index gained 0.8 percent. The shares have climbed 4.9 percent this year, compared with the 3.6 percent advance by the Kospi. Cautiously Optimistic The company said it’s “cautiously optimistic” second- quarter earnings will rise, citing demand for products across all of Samsung’s major product categories. Samsung also expects capital spending this year to be substantially higher than it projected, though the electronics maker can’t currently disclose specific figures, said Robert Yi , head of investor relations. “We will continue to widen the gap with competitors in the memory business, improve profitability in the LCD business, and strengthen our competiveness and market dominance in the handset and TV businesses,” Yi said. Operating profit, or sales minus the cost of goods sold and administrative expenses, jumped to a record 4.41 trillion won from 593 billion won, Samsung said. The year-earlier results were revised following Samsung’s adoption of International Financial Reporting Standards from this year, the company said. Chip Division First-quarter profit at Samsung’s semiconductor division was 1.96 trillion won, compared with a loss a year earlier, as prices rose. Micron Technology Inc. and Hynix Semiconductor Inc. , which compete against Samsung in computer memory, both reported quarterly profit that beat analysts’ estimates. Intel , the biggest chipmaker, this month forecast record profit margins for 2010 and said sales will rise this quarter. Samsung, the world’s largest maker of computer-memory chips, said last month it expects prices to remain “stable” in the second half of the year, buoyed by strong demand. The company said in January it plans to spend 5.5 trillion won in capital investment on semiconductors this year, compared with 4.5 trillion won in 2009. Kwon Oh-Hyun , head of Samsung’s chip division, said March 16 a decision on raising capital spending for chips will be taken in the second quarter. Flat-Screen TV Demand At the flat-screen business, Samsung reported a profit of about 490 billion won, compared with a year-earlier loss, driven by higher TV demand. LG Display Co. , the second-largest liquid- crystal display maker after Samsung, last week reported its fourth straight quarterly profit after prices increased. Prices of most panels used in computer monitors, notebooks and TVs rose in the second half of March from a year earlier, according to Taipei-based researcher WitsView Technology Corp. Panel prices will probably remain flat in the current period and rebound in the third quarter, James Kim , an analyst at Nomura Holdings Inc., wrote in a report this month. A shortage of components for LCDs will continue throughout this year, which will help limit supply growth, he wrote. Samsung’s digital media division, which makes TVs, posted a profit of about 520 billion won from 470 billion won, as the company increased sales of more expensive models using light- emitting diodes as screen backlights. Global shipments of LCD TVs may rise 24 percent to more than 180 million units in 2010, Austin, Texas-based DisplaySearch said last month. Samsung, the world’s largest TV maker, said in January it expects to sell 35 million LCD sets this year. Mobile Phones LG Electronics Inc. , the second-ranked TV maker, this week posted a quarterly profit compared with a year-earlier loss, helped by sales of TVs and appliances. LG said its first-quarter LCD TV shipments increased 62 percent to 5.2 million sets. Samsung, also the world’s second-largest mobile-phone maker, said profit from the telecommunications division fell to 1.1 trillion won from 1.12 trillion won. First-quarter handset shipments climbed 40 percent to 64.3 million, Samsung said. The company said in February its handset shipments may grow 19 percent to more than 270 million units, helped by demand for smartphones. Samsung has said it plans to triple shipments of the devices this year from 6 million in 2009. Nokia, Apple Nokia Oyj , the world’s biggest maker of mobile phones, last week cut its margin forecast and posted profit that missed analysts’ estimates because of competition from Apple’s iPhone. Apple said last week its second-quarter iPhone sales more than doubled and profit increased 90 percent. LG Electronics, the world’s third-largest handset maker, this week said earnings from its mobile phones fell 89 percent as the company fell behind in introducing new models in the smartphone market, the fastest growing segment. Worldwide sales of smartphones will increase 36 percent to 247 million in 2010 and expand 30 percent next year, ISuppli said last month. The total mobile-phone industry shipments will probably rise 11 percent to 1.28 billion units this year, according to ISuppli. To contact the reporters on this story: Kevin Cho in Seoul at kcho2@bloomberg.net

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Liz Ryan: Don’t Give Me That "I’ve Got No Accomplishments" Baloney

April 28, 2010

Dear Liz, I have seven years of work experience but no accomplishments. I did my job every day and that was it. I didn’t make any huge deals for the company or win any awards or anything like that. What do I put down for my resume bullets? Thanks, Malina Liz Replies: Dear Malina, You’re not used to thinking about your background through an ‘accomplishments’ lens. If you’re like most of us, you’re used to thinking about your past jobs like this: “I created the X-10 report every Friday for our CFO, and I reconciled return authorizations and processed credits for our clients. I took care of calls from Sales and answered questions for product managers.” That’s the way most of us are used to thinking about our backgrounds. If we step back and think about it, that’s a very strange way to talk about a job history. It’s like you’re standing outside the room watching yourself work, watching the action through a glass window. You’re telling us what was happening, without telling us why you did any of these things or why they mattered. We describe our work backgrounds the way a primate specialist describes the behavior of great apes in the wild: “Male grooms female, female pushes him away to nurse infant. Juvenile reaches for a branch and swats a fly.” What’s missing from these sterile descriptions is the blood and guts of the story. We need the punchline: why you built that report every Friday, what the CFO did with it once she got it, and why either of you bothered to look at the dang thing in the first place. We need to know why salespeople were calling you, and what you said to them, and what happened as a result. What did you do exactly for those Product Managers, as you answered their questions? What did the information you provided for them enable them to do? We want the story, Malina. Mini dramas play out in every department of every company every day, but those human stories seldom make it onto a resume. If they did, prospective employers would get a better sense of our power! We’re not going to say in a resume: “This wench Tamrin had always hated me, and one Friday she got her revenge when she saw a chance to shank me in the staff meeting.” That’s a good opener, but it has nothing to do with your qualifications for your next Accounting job. (Too bad.) However, we might say: “We were under the gun to create sales forecasts for our JV partner and a major investor, so I merged three existing spreadsheets to create a simple forecasting model over a weekend.” You’ve got accomplishments Malina, but you may have to work a bit, first to recall them and then to frame them into bullets for your resume. Here’s an accomplishment-jogging cheat sheet to get you started on digging those accomplishments out of your memory banks and claiming them: Think of a time when you changed a process that wasn’t working very well, to make it smoother, faster or more logical. Think of a time when you got two groups (or two people) that weren’t working well together, to sit down and hash things out. Think of a time when you got a customer or a decision-maker inside the company over a philosophical hurdle, by arguing your case and marshalling evidence. Think of a time when you calmed a crisis situation. Think of a time when you started a new system, a meeting, or a report that made a positive difference. Think of a time when you came up with a new communication vehicle – perhaps a memo or an event or a podcast or a presentation – that made a complicated issue clearer. Think of a time when you trained or mentored someone, even if it wasn’t in your job description. Think of a time when you took care of an important customer or partner. Think of a time when you purchased something in a smarter way or for less money, or you negotiated an important matter on the company’s behalf. Think of a time when you sold one of your big ideas to the leaders in your company. Think of a time when you convinced a customer to buy, or a job applicant to join the company, or someone to partner with your firm. Think of a time when you wrote a white paper or report or flowchart or built a spreadsheet that helped someone make an important decision more thoughtfully. Cheers — Liz

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Greece, Portugal Lead Stock Declines on Contagion Concern; Yen Strengthens

April 27, 2010

By Justin Carrigan April 27 (Bloomberg) — Stocks fell, led by declines in Greece, Portugal and Spain, on concern Europe’s debt crisis is spreading. China’s benchmark index dropped to a six-month low, oil and metals retreated and the yen strengthened. The Stoxx Europe 600 Index slid 0.9 percent at 10:19 a.m. in London as Greece’s ASE Index dropped 1.3 percent, its fifth day of losses and the longest losing streak in seven weeks. The Shanghai Composite Index slumped 2.1 percent on concern that government measures to cool the property market will curb growth in the third-largest economy. Futures on the Standard & Poor’s 500 Index lost 0.1 percent. The yen gained versus all 16 of its most-traded counterparts. Oil fell for a second day and copper declined for the first time in three days. “The contagion is definitely spreading and spreading quite rapidly to Portugal, Spain, Ireland and Italy,” Mehernosh Engineer , a credit strategist at BNP Paribas SA in London, wrote in a report today. “The market has been in a show-me-the-money mode for well over three months and the lack of guidance is slowly and steadily sowing the seeds of a double-dip.” German Chancellor Angela Merkel said yesterday she won’t release funds to help Greece shore up its finances until the nation has a “sustainable” plan to reduce its budget deficit. China Vanke Co., that country’s biggest developer, said first- quarter profit plunged 53 percent from the previous three months amid government steps to prevent a property bubble. Improved Earnings The 78 percent gain in the MSCI World Index of 23 developed nations’ stocks since March last year may already reflect predictions for improved earnings, as results from companies today including BP Plc and Royal KPN NV beat analysts’ estimates. About 74 percent of companies in the benchmark gauge that have reported quarterly results since April 12 topped forecasts, according to Bloomberg data. Bank stocks were among the biggest decliners today before Goldman Sachs Group Inc., Wall Street’s most profitable firm, faces a U.S. Senate subcommittee in a hearing that could have repercussions for the future of the financial industry. Deutsche Bank AG, Germany’s biggest lender, slipped 2 percent in Frankfurt even after reporting a 48 percent increase in first- quarter profit. Basic resources stocks posted the largest losses among 19 industry groups in the Stoxx 600. BHP Billiton Ltd. , the world’s biggest mining company, fell 1.3 percent in London. Antofagasta Plc, which owns copper mines in Chile, retreated 2.7 percent. Banco Popular Espanol SA declined 4.9 percent in Madrid after the Spanish lender said first-quarter profit slipped. Credit Suisse The MSCI Asia Pacific Index dropped 0.2 percent. CSL Ltd., the world’s second-biggest maker of treatments made from blood, slipped 4.2 percent in Sydney after Credit Suisse Group AG downgraded the stock. Elpida Memory Inc. retreated 1.8 percent in Tokyo as memory-chip prices declined. U.S. futures fluctuated after the S&P 500 yesterday declined 0.3 percent. The S&P/Case-Shiller index of property values in 20 cities climbed 1.3 percent from February 2009, the first year-over-year gain since December 2006, according to the median forecast of 22 economists surveyed by Bloomberg News before the report, scheduled for 9 a.m. New York time. A separate report from the Conference Board at 10 a.m. may show sentiment improved for a second month. Thirty-eight companies on the S&P 500 will report earnings today, including Newmont Mining Corp., United Parcel Service Inc. and Ford Motor Co. before the start of trading in New York. Two-Year Note Portugal’s PSI-20 Index slumped 1.3 percent while Spain’s IBEX 35 fell 1.6 percent. Ireland’s ISEQ Overall Index also declined 1.6 percent. The ASE Index tumbled 19 percent this year and the yield on Greece’s benchmark two-year note has more than tripled to 14.47 percent on concern the nation will default. Speculation a 45 billion-euro ($60 billion) European Union- led bailout will get delayed is causing some investors to dump the bonds of countries with rising budget deficits. Portugal’s two-year notes fell for an 11th day, driving the yield up by 9 basis points to 4.27 percent. Spain’s two-year notes slipped, pushing the yield 3 basis points higher to 1.98 percent after the nation sold 2.6 billion euros of three- and six-month bills at a higher yield than the previous auction on March 23. Treasuries advanced, sending the 10-year note yield 2 basis points lower to 3.79 percent before the U.S. sells $44 billion of two-year notes today, the second of four auctions this week totaling a record $129 billion. Emerging Markets The yen and the dollar rose as investors sought a haven from falling equity markets. The Japanese currency climbed 0.3 percent versus the euro and 0.1 percent against the dollar. South Korea’s won slid 0.6 percent from a 19-month high against the dollar after the government said gains in the currency were “excessive” and signaled it may take action to curb the appreciation. The MSCI Emerging Markets Index fell for the first time in three days. China Vanke dropped to a 13-month low after predicting “rapid” house-price gains will end as the government curbs real-estate loans. China may use capital requirements for developers as a policy tool to restrain the property market, Ba Shusong , deputy director general of the State Council’s Development Research Center, told Shanghai Securities News in an interview. Russia’s Micex Index declined 0.9 percent. Brent crude oil for June delivery fell 0.3 percent to $86.54 a barrel on London’s ICE Futures Europe exchange. Copper fell for the first time in three days, retreating 0.9 percent to $7,739 a metric ton on the London Metal Exchange. Aluminum, nickel and zinc also dropped. To contact the reporter for this story: Justin Carrigan in London at jcarrigan@bloomberg.net

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Bank of Japan Inflation Forecast May Fall Short of Finance Minister’s Goal

April 22, 2010

By Mayumi Otsuma and Masahiro Hidaka April 23 (Bloomberg) — Signs of a sustained Japanese economic recovery may spur the central bank to raise its growth projections and discuss predicting an end to deflation at a meeting next week, a survey of economists indicated. Bank of Japan board members release semiannual economic forecasts after their April 30 gathering in Tokyo. Their median prediction may show an inflation rate of at least zero for the year to March 2012, up from a 0.2 percent drop, according to 14 of 16 economists surveyed by Bloomberg News. The new projection may reinforce politicians’ calls for the central bank to expand stimulus measures after Finance Minister Naoto Kan said he wants an inflation rate of as high as 2 percent. The International Monetary Fund this week echoed the government’s concern, saying the BOJ may need to do more. A recovery in prices “would be fragile, and Japan could tip back into deflation with changes in the foreign-exchange rate or oil price conditions,” said Takehiro Sato , chief Japan economist at Morgan Stanley in Tokyo. Political pressure “makes it all the more unlikely the BOJ would embark on an exit strategy,” he said. Japan, the only Group of Seven nation still reporting consumer-price declines, has been easing policy just as its counterparts in Asia begin to tighten credit as their economies drive the global recovery. The BOJ doubled a lending program for banks to 20 trillion yen ($215 billion) last month and has kept interest rates at 0.1 percent since December 2008. The survey indicated that Governor Masaaki Shirakawa and his colleagues will hold off on further action next week, with 13 of the 16 economists predicting no change in policy. More Upbeat Shirakawa has become more upbeat about the economy. He said this month that the risk of another recession has “pretty much gone” and he sees “positive signs” for prices. Deputy Governor Kiyohiko Nishimura said this week that “beams of light” are visible in overcoming deflation. Both policy makers have said they will keep monetary policy “accommodative,” a pledge that’s likely to be affirmed in next week’s semiannual outlook, according to Ryutaro Kono , chief economist at BNP Paribas in Tokyo. The central bank will reinforce that “it won’t hesitate to provide more liquidity if needed,” Kono said. Any forecast by the central bank for consumer prices to stop falling next fiscal year would put it at odds with economists, whose own projections are for a 0.1 percent decline, based on the median estimate in the Bloomberg survey. Prices excluding fresh food, the bank’s key gauge, slid 1.2 percent in February from a year earlier, the 12th straight drop. Chronic Deflation “Sure, the economy is recovering, but growth still depends on exports, domestic demand hasn’t gained momentum, and Japan is stuck in chronic deflation,” said Yasunari Ueno , chief market economist at Mizuho Securities Co. in Tokyo, who sees prices sliding 0.2 percent next fiscal year. The analysts surveyed said prices will slip 1.1 percent in the current year ending March 2011, more than the 0.5 percent decrease forecast by the central bank in January. The policy board will also review its economic growth forecasts at the meeting. Gross domestic product will expand 2 percent in the current fiscal year and 1.7 percent in the year ending March 2012, according to the median estimate of the 16 economists. In January, the central bank forecast growth of 1.3 percent this year and 2.1 percent in fiscal 2011. Elpida Memory Elpida Memory Inc. is among Japanese exporters benefiting from a resurgence in global demand, led by Asia. Japan’s biggest maker of computer memory chips this week reported its first annual profit in three years.      Still, politicians are putting pressure on the central bank to spur the economy as record public debt constrains the government’s ability to provide support. Fitch Ratings said yesterday that “in the absence of sustained economic recovery and fiscal consolidation, government debt will continue to rise.” Prime Minister Yukio Hatoyama plans to release a plan by June to repair the public finances. Finance Minister Kan this week told parliament the central bank should aim for inflation of as high as 2 percent. The ruling Democratic Party of Japan this week said it plans to include an inflation target in its platform for the July upper house elections.      “The BOJ board will probably stand pat this time,” said Masaaki Kanno , a 25-year veteran of the central bank who is now chief economist at JPMorgan Chase & Co. in Tokyo. “But it’s highly likely that the bank will ease policy further to signal its cooperation with the government in June, when the government plans to reveal its fiscal rehabilitation plans and growth strategy.” To contact the reporters on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net ; Masahiro Hidaka in Tokyo at mhidaka@bloomberg.net

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Asia Stocks, Currencies Gain on Earnings Optimism; Euro Weakens

April 21, 2010

By Rocky Swift and Shani Raja April 21 (Bloomberg) — Asian stocks jumped the most in five weeks and regional currencies rose as better-than-forecast earnings at Apple Inc. and Elpida Memory Inc. bolstered the global outlook for higher demand of goods and services. The euro weakened ahead of talks on conditions for Greece’s aid package. The MSCI Asia Pacific Index surged 1.1 percent, the most since March 26, to 127.37 at 4:10 p.m. in Tokyo. The Stoxx Europe 600 increased 0.3 percent to 270.61. Futures on the U.S. Standard & Poor’s 500 Index rose 0.2 percent. South Korea’s won climbed versus all major counterparts, and oil rose a second day as European airports reopened after volcanic ash forced closures. U.S. stocks gained for a second day yesterday as about 82 percent of S&P 500 companies that have reported first-quarter results beat the average analyst earnings estimate, according to Bloomberg data. Apple and Goldman Sachs Group Inc. yesterday posted quarterly earnings that almost doubled. Apple soared as much as 8.3 percent in extended trading after the U.S. close. “The earnings that have so far been released have, as a whole, been way ahead of expectations,” said Paul Xiradis , who manages more than $10 billion as chief executive officer of Ausbil Dexia Ltd. in Sydney. “The recovery has really taken hold now and will continue to roll out, despite some of the concerns around sovereign risk.” Japan’s Nikkei 225 Stock Average and South Korea’s Kospi index advanced 1.7 percent. Elpida Memory , Japan’s biggest maker of computer memory, jumped 3.3 percent to 2,076 yen in Tokyo after its first annual profit in three years beat analyst expectations. Chipmakers Gain Japanese chip stocks also gained after Citigroup Inc. raised its rating on the industrial electronics and semiconductors sector to “moderately bullish” from “neutral.” Advantest Corp. , the world’s largest maker of memory-chip testers, gained 3.4 percent to 2,433 yen. Toshiba Corp. rose 3.3 percent to 529 yen. In Seoul, Samsung Electronics Co. , Asia’s biggest maker of chips, flat screens and mobile phones, increased 2.8 percent. Hynix Semiconductor Inc. , the world’s second-largest computer- memory chipmaker, gained 5.6 percent, while LG Display Co. , the world’s second-largest liquid-crystal display maker, advanced 3.4 percent. LG Chem Ltd. , South Korea’s biggest maker of chemicals, advanced 5.3 percent, the most in almost five months, after reporting a 73 percent increase in first-quarter profit. China Stocks Most China shares rose, spurred by higher profit for commodity producers. Huaneng Power International Inc. rose 2.4 percent, leading gains among power suppliers after reporting higher first-quarter profit. “Good first-quarter earnings should provide a boost to stocks and valuations of particularly big-cap stocks are attractive,” said Zhang Qi , an analyst at Haitong Securities Co. in Shanghai. The euro weakened against all 16 of its major counterparts as Greece starts talks today on activating a 45 billion-euro ($60 billion) rescue package and as European regulators consider probes into Goldman Sachs, now fighting allegations of fraud in the U.S. “The Greece issue is not something we’ll see improvement in today or tomorrow,” said Kazuyuki Kato , treasury department manager in Tokyo at Mizuho Trust & Banking Co. “I expect the euro to test lower prices.” Greek officials will negotiate with the International Monetary Fund, the European Central Bank and the other nations using the euro on deficit-cutting measures the nation must accept to tap the funds. Greece’s government needs to raise about 10 billion euros before the end of May and its soaring financing costs are lending urgency to the talks. Goldman and U.K. The U.K.’s Financial Services Authority said in a statement yesterday it will begin a formal probe after the U.S. Securities and Exchange Commission filed a lawsuit over Goldman Sachs’s marketing of a collateralized debt obligation. German and French regulators also said they would review whether to take action. Palladium gained as much as 1.2 percent to $558 an ounce, the highest price since March 6, 2008, on speculation that rising vehicle sales will boost demand as the global economy recovers. The metal is mostly used in auto-exhaust catalysts. Gold and platinum also climbed. “The economic expansion is whetting consumer appetite for new vehicles and as a result, palladium and platinum are faring better than gold, which relies on jewelry demand,” said Hwang Il Doo, a senior trader with KEB Futures Co. in Seoul. Three-month copper futures reversed earlier losses to rise as much as 0.2 percent to $7,809 a metric ton, extending yesterday’s 1.2 percent advance. Lead and aluminum futures also gained on the London Metal Exchange. Oil Rises Oil for June delivery gained 0.7 percent to $84.46 a barrel on the New York Mercantile Exchange after the American Petroleum Institute said crude inventories declined 741,000 barrels and distillate fuel, a category that includes heating oil and diesel, fell 3.1 million barrels. “The main catalyst for the rise was the sharp draws in the API inventories data across all the categories,” said Ben Westmore , a minerals and energy economist at National Australia Bank Ltd. in Melbourne. Oil built on gains made yesterday as European airspace began to reopen, restoring some demand for jet fuel, which had dropped by two-thirds in Europe as ash from a volcano in Iceland grounded flights. The cost of protecting Asia-Pacific corporate and sovereign bonds from default declined, according to traders of credit- default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 3.5 basis points to 92.5 basis points in Sydney, Deutsche Bank AG prices show. The Markit iTraxx Australia index retreated by 2 basis points to 78.5 basis points in Sydney, according to Deutsche Bank. The Markit iTraxx Japan index fell 3.5 basis points to 87.5 in Tokyo, according to Morgan Stanley prices. Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality. An increase suggests deteriorating perceptions of credit quality and a drop shows improvement. The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails meet its debt agreements. A basis point is 0.01 percentage point. To contact the reporters for this story: Rocky Swift in Tokyo at rswift5@bloomberg.net ; Shani Raja in Sydney at sraja4@bloomberg.net .

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Stocks, Currencies Gain on Earnings Optimism; Euro Weakens on Greece Talks

April 21, 2010

By Rocky Swift and Shani Raja April 21 (Bloomberg) — Asian stocks jumped the most in five weeks and regional currencies rose as better-than-forecast earnings at Apple Inc. and Elpida Memory Inc. bolstered the global outlook for higher demand of goods and services. The euro weakened ahead of talks on conditions for Greece’s aid package. The MSCI Asia Pacific Index surged 1.1 percent, the most since March 26, to 127.37 at 4:10 p.m. in Tokyo. The Stoxx Europe 600 increased 0.3 percent to 270.61. Futures on the U.S. Standard & Poor’s 500 Index rose 0.2 percent. South Korea’s won climbed versus all major counterparts, and oil rose a second day as European airports reopened after volcanic ash forced closures. U.S. stocks gained for a second day yesterday as about 82 percent of S&P 500 companies that have reported first-quarter results beat the average analyst earnings estimate, according to Bloomberg data. Apple and Goldman Sachs Group Inc. yesterday posted quarterly earnings that almost doubled. Apple soared as much as 8.3 percent in extended trading after the U.S. close. “The earnings that have so far been released have, as a whole, been way ahead of expectations,” said Paul Xiradis , who manages more than $10 billion as chief executive officer of Ausbil Dexia Ltd. in Sydney. “The recovery has really taken hold now and will continue to roll out, despite some of the concerns around sovereign risk.” Japan’s Nikkei 225 Stock Average and South Korea’s Kospi index advanced 1.7 percent. Elpida Memory , Japan’s biggest maker of computer memory, jumped 3.3 percent to 2,076 yen in Tokyo after its first annual profit in three years beat analyst expectations. Chipmakers Gain Japanese chip stocks also gained after Citigroup Inc. raised its rating on the industrial electronics and semiconductors sector to “moderately bullish” from “neutral.” Advantest Corp. , the world’s largest maker of memory-chip testers, gained 3.4 percent to 2,433 yen. Toshiba Corp. rose 3.3 percent to 529 yen. In Seoul, Samsung Electronics Co. , Asia’s biggest maker of chips, flat screens and mobile phones, increased 2.8 percent. Hynix Semiconductor Inc. , the world’s second-largest computer- memory chipmaker, gained 5.6 percent, while LG Display Co. , the world’s second-largest liquid-crystal display maker, advanced 3.4 percent. LG Chem Ltd. , South Korea’s biggest maker of chemicals, advanced 5.3 percent, the most in almost five months, after reporting a 73 percent increase in first-quarter profit. China Stocks Most China shares rose, spurred by higher profit for commodity producers. Huaneng Power International Inc. rose 2.4 percent, leading gains among power suppliers after reporting higher first-quarter profit. “Good first-quarter earnings should provide a boost to stocks and valuations of particularly big-cap stocks are attractive,” said Zhang Qi , an analyst at Haitong Securities Co. in Shanghai. The euro weakened against all 16 of its major counterparts as Greece starts talks today on activating a 45 billion-euro ($60 billion) rescue package and as European regulators consider probes into Goldman Sachs, now fighting allegations of fraud in the U.S. “The Greece issue is not something we’ll see improvement in today or tomorrow,” said Kazuyuki Kato , treasury department manager in Tokyo at Mizuho Trust & Banking Co. “I expect the euro to test lower prices.” Greek officials will negotiate with the International Monetary Fund, the European Central Bank and the other nations using the euro on deficit-cutting measures the nation must accept to tap the funds. Greece’s government needs to raise about 10 billion euros before the end of May and its soaring financing costs are lending urgency to the talks. Goldman and U.K. The U.K.’s Financial Services Authority said in a statement yesterday it will begin a formal probe after the U.S. Securities and Exchange Commission filed a lawsuit over Goldman Sachs’s marketing of a collateralized debt obligation. German and French regulators also said they would review whether to take action. Palladium gained as much as 1.2 percent to $558 an ounce, the highest price since March 6, 2008, on speculation that rising vehicle sales will boost demand as the global economy recovers. The metal is mostly used in auto-exhaust catalysts. Gold and platinum also climbed. “The economic expansion is whetting consumer appetite for new vehicles and as a result, palladium and platinum are faring better than gold, which relies on jewelry demand,” said Hwang Il Doo, a senior trader with KEB Futures Co. in Seoul. Three-month copper futures reversed earlier losses to rise as much as 0.2 percent to $7,809 a metric ton, extending yesterday’s 1.2 percent advance. Lead and aluminum futures also gained on the London Metal Exchange. Oil Rises Oil for June delivery gained 0.7 percent to $84.46 a barrel on the New York Mercantile Exchange after the American Petroleum Institute said crude inventories declined 741,000 barrels and distillate fuel, a category that includes heating oil and diesel, fell 3.1 million barrels. “The main catalyst for the rise was the sharp draws in the API inventories data across all the categories,” said Ben Westmore , a minerals and energy economist at National Australia Bank Ltd. in Melbourne. Oil built on gains made yesterday as European airspace began to reopen, restoring some demand for jet fuel, which had dropped by two-thirds in Europe as ash from a volcano in Iceland grounded flights. The cost of protecting Asia-Pacific corporate and sovereign bonds from default declined, according to traders of credit- default swaps. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 3.5 basis points to 92.5 basis points in Sydney, Deutsche Bank AG prices show. The Markit iTraxx Australia index retreated by 2 basis points to 78.5 basis points in Sydney, according to Deutsche Bank. The Markit iTraxx Japan index fell 3.5 basis points to 87.5 in Tokyo, according to Morgan Stanley prices. Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality. An increase suggests deteriorating perceptions of credit quality and a drop shows improvement. The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails meet its debt agreements. A basis point is 0.01 percentage point. To contact the reporters for this story: Rocky Swift in Tokyo at rswift5@bloomberg.net ; Shani Raja in Sydney at sraja4@bloomberg.net .

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Petters Should Get 335 Years for $3.5 Billion Fraud, Prosecutors Recommend

March 9, 2010

By Bob Van Voris March 8 (Bloomberg) — Petters Group Worldwide LLC founder Thomas Petters , convicted of running a $3.5 billion fraud, should be sentenced to 335 years in prison, U.S. prosecutors recommended. Petters, 52, was convicted in December of 20 criminal counts in what prosecutors said is the biggest fraud in Minnesota history. In a sentencing memorandum filed today, they asked U.S. District Judge Richard Kyle in St. Paul to give Petters the maximum sentence, more than twice the 150-year prison term given to Bernard Madoff . “The defendant’s fraud is staggering and unprecedented in size and impact on victims and the community,” prosecutors argued in the court filing. Petters ran a Minnetonka, Minnesota-based business empire that bought companies including Sun Country Airlines Inc. and Polaroid Corp. until federal agents raided his home and offices on Sept. 24, 2008. Petters used one of his companies, Petters Co. Inc., or PCI, in an illegal scheme that raised cash to support his money-losing businesses and lavish personal lifestyle, prosecutors said at his trial last year. Petters was convicted of all of the counts against him, including fraud, conspiracy and money laundering, by a federal jury in St. Paul. ‘Not Evil’ “Petters is imperfect, yes, but not evil,” said Paul Engh, one of Petters’s lawyers, in court papers also filed today, urging Kyle to sentence his client to less than 13 years. Prosecutors claim Petters used PCI to lure hedge funds and other investors into giving him money to finance non-existent deals to buy shipments of consumer goods. Government lawyers argued in their papers today that Petters defrauded his best friend, his father-in-law and a long- time business partner to keep his illegal scheme afloat. Other victims included “at least 10 pastors, three missionaries and dozens of retired, elderly individuals,” they said. Petters, who testified in his own defense, claimed he was innocent and that the fraud was committed without his knowledge by former company Vice President Deanna Coleman and Robert White , the company’s former chief financial officer. Petters also told jurors that the 2004 murder of his son forced him to rely on Coleman instead of paying attention to the affairs of his company. Secret Tapes During the trial, prosecutors played tape-recorded conversations secretly made by Coleman, who turned in Petters to the authorities and testified against him. “That Mr. Petters sprinted out from St. Cloud and a small stereo store, that his reach would exceed his grasp, that he over-promised and underperformed, that he loved his life and his family and his employees and the memory of his murdered son, that he gave millions away, that he acted as a mentor, bought businesses and was visible in the community are all true,” Engh said, in papers quoting Albert Camus , F. Scott Fitzgerald , Walt Whitman and Joan Didion . Engh said Petters has a tumor on his pituitary gland and described him as a “marked man in prison” based on the notoriety of his case. Engh also cited the non-violent nature of the crimes, Petters’s philanthropy and the demands by his hedge- fund victims for unreasonable rates of return. “The victims’ conduct contributed to the loss,” Engh said. “By requiring inordinate returns, the hedge funds and their investors assured themselves a failed business model.” Petters is scheduled to be sentenced April 8. Madoff, 71, pleaded guilty last year to running the biggest Ponzi scheme in history. He is serving his 150-year sentence in a federal prison in North Carolina. The case is U.S. v. Thomas Joseph Petters, 08-00364, U.S. District Court, District of Minnesota (St. Paul). To contact the reporters on this story: Bob Van Voris in St. Paul, Minnesota, at rvanvoris@bloomberg.net .

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Yanukovych’s Inauguration Sets Stage for Parliamentary Battle With Premier

February 25, 2010

By Daryna Krasnolutska and Kateryna Choursina Feb. 25 (Bloomberg) — Viktor Yanukovych today will be sworn in as Ukraine’s fourth president since the collapse of the Soviet Union two decades ago, eradicating the memory of his first bid for the post in 2004 that triggered the Orange Revolution. Yanukovych, 59, will receive a blessing at the Kyiv Pechersk Lavra monastery and will be inaugurated in the parliament at about 10 a.m. He’ll later meet foreign guests including U.S. National Security Adviser James L. Jones and European Union foreign policy chief Catherine Ashton . Russia will be represented by parliamentary speaker Boris Gryzlov and President Dmitry Medvedev ’s chief of staff Sergei Naryshkin . The new president beat Prime Minister Yulia Tymoshenko in the Feb. 7 runoff election and, unlike five years ago, survived a court challenge against the result. He now must piece together a majority to remove his rival from the premiership. As president, he can replace the foreign and defense ministers and with the backing of 300 deputies would also be able to oust the central bank governor. Tymoshenko yesterday reiterated her refusal to form a coalition with lawmakers loyal to Yanukovych. “Tymoshenko is now doing her best to hamper Yanukovych’s attempts to set up a new majority,” said Anastasia Golovach , an analyst at Renaissance Capital in Kiev. “It is difficult to predict when Yanukovych will be able to set up a new coalition. I think it will be next week. If by the end of next week he has reached a dead end, he will try to push early parliamentary elections.” The prime minister has refused to concede she was beaten by her rival in the Feb. 7 presidential election and claims the results were falsified. The premier retracted an appeal to the Higher Administrative Court after a one-day hearing, accusing it of being biased. New Majority Yanukovych said on Feb. 21 he hopes a new majority will be created this week. The current coalition of 244 seats includes Tymoshenko’s bloc, outgoing President Viktor Yushchenko ’s bloc and parliamentary speaker Volodymyr Lytvyn ’s party. Yanukovych, with 171 seats, will need to secure 27 seats from the communist party, 20 seats from Lytvyn’s party and at least 8 lawmakers from Tymoshenko or Yushchenko’s blocs for a majority. The parliamentary tussle is a far cry from the demonstrations that characterized the Orange Revolution. Yanukovych was initially declared winner in the 2004 election, provoking millions to take to the streets in protest at what they considered falsified results . The Supreme Court canceled the outcome and called a third round, which brought Viktor Yushchenko into office with Tymoshenko as his partner and first prime minister. Yanukovych has campaigned to erase his reputation as favoring Russia over the West and stressed that he is as enthusiastic about integration into the European Union as Tymoshenko. He also pledged to set up a stable government. Ukraine’s economy needs political stability to combat an economic recession, which is the deepest since 1994, and restore investor confidence. The hryvnia lost 42 percent against the dollar since September 2008 and was the world’s second worst performer after the Venezuelan Bolivar. The yield on Ukraine’s 2016 Eurobond fell 18 basis points to 10.07 percent at 8:33 a.m. in Kiev. The credit default swap spread on the country’s five-year debt narrowed to 936 basis points yesterday from 944 the previous day, according to Bloomberg data. A narrower CDS spread signals improved investor perceptions of credit risk. Ukraine’s benchmark index of stocks is up 23 percent this year, and soared 90 percent in 2009. To contact the reporters on this story: Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net ; Kateryna Choursina in Kiev at kchoursina@bloomberg.net

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Asia Stocks Slump, Euro Drops on Rising Greek Deficit, U.S. Unemployment

January 28, 2010

By James Poole and Satoshi Kawano Jan. 29 (Bloomberg) — Asia stocks declined, with the regional benchmark posting its biggest weekly loss since March, the euro fell and corporate default risk increased on concern about Greece’s swelling deficit and U.S. unemployment. The MSCI Asia Pacific Index slumped 1 percent to 117.85 at 12:25 p.m. in Tokyo, set for a 3.8 percent drop for the week, the most since March 6. The euro fell to the lowest level in nine months against the yen and the cost of protecting Asia-Pacific bonds from default climbed. Investors are more skittish after Germany and France denied a report that European Union nations are examining ways to help Greece and as credit-default swaps tied to Greece traded at about the same level as Dubai when it got a $10 billion bailout in December. The Federal Reserve may be preparing to remove some stimulus and emerging market equity funds posted the first net outflow in 12 weeks as China is set to do more to curb lending. “People are getting wary about the outlook for the U.S. economy,” said Juichi Wako , a senior strategist at Tokyo- based Nomura Holdings Inc. “Central banks globally have little room to further loosen policies. We can’t expect excess liquidity to continue to flow into markets and drive up share prices.” About seven stocks declined for each one that advanced on the MSCI Asia Pacific Index . Gauges of material producers and technology companies posted the biggest drops. Futures on the Standard & Poor’s 500 Index were little changed. The U.S. benchmark index slumped 1.4 percent yesterday after the government said initial jobless applications fell less than economists had estimated. Japan, Korea Japan’s Nikkei 225 Stock Average sank 1.6 percent and South Korea’s Kospi Index slid 1.7 percent. Rio Tinto Group, the world’s third-largest mining company, slumped 3.2 percent to A$69.18. BHP Billiton Ltd. , Rio’s biggest competitor, sank 2.3 percent to A$39.76. A gauge of six metals, including copper and nickel, tumbled 3.6 percent in London yesterday, the most since Sept. 1. Elpida Memory Inc. , Japan’s biggest computer-memory maker, sank 6.6 percent to 1,643 yen after reporting profit that missed analyst forecasts. Advantest Corp. , the world’s biggest maker of memory-chip testers, fell 8.6 percent to 2,294 yen after forecasting a wider full-year loss than analysts estimated. The companies plunged as the yen climbed, threatening to reduce the value of overseas sales at Japanese companies. Advantest and Elpida generate at least 10 percent of their revenues in the Americas and Europe. ‘Lingering Concern’ “Lingering concerns in the euro-zone are putting selling pressure on cross currencies against the yen,” said Akira Hoshino , chief manager of the foreign-exchange trading department in Tokyo at Bank of Tokyo-Mitsubishi UFJ Ltd. “Economic fundamentals are also weak and leading to stock losses, causing the yen and the dollar to be bought.” The yen advanced to 124.82 per euro, the strongest since April 28, before trading at 125.47 in Tokyo and compared with 125.62 yesterday in New York. The dollar climbed as high as $1.3913 against the European currency, the highest level since July 14, before trading at $1.3941. The retreat from risk hurt the Korean won, which fell as much as 0.7 percent to 1,161.70 per dollar as concern China will curb loans and Greece struggle to pay its debt prompted investors to favor safer bets than emerging-market assets. Investors pulled $608.5 million from funds investing in developing nations’ shares in the week ended Jan. 27, the first outflows in 12 weeks, according to Cambridge, Massachusetts-based research firm EPFR Global. Australian Dollar Australia’s dollar slid 0.2 percent to 89.29 cents, as prices for commodities, which make up more than 50 percent of the nation’s exports, dropped. Copper for three-month delivery has plunged 6.1 percent this week on the London Metal Exchange. The euro slumped against 13 of its 16 most-traded counterparts as the cost to protect Greece’s bonds from default climbed. Prime Minister George Papandreou said the country doesn’t need to borrow from European nations. The nation’s government bonds are the world’s worst performers in January, losing 4.19 percent in local currency terms and extending their decline over the past three months to 10 percent, Bloomberg/EFFAS indexes show. The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan rose 4 basis points to 108.5 basis points, Citigroup Inc. prices show. The index is set to record its ninth daily increase in the past 10 trading days and is at the highest level since Dec. 2, prices from CMA DataVision in New York show. To contact the reporters on this story: James Poole in Singapore on jpoole4@Bloomberg.net Satoshi Kawano in Tokyo skawano1@bloomberg.net .

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Chilean Stock Index Gains on Speculation Billionaire Pinera to Spur Growth

January 18, 2010

By James Attwood Jan. 18 (Bloomberg) — Chile’s main stock index rose, heading for the biggest gain in a week, after billionaire Sebastian Pinera won the nation’s presidential election. Pinera, 60, defeated former President Eduardo Frei 52 percent to 48 percent in yesterday’s runoff, ending the Concertacion coalition’s two-decade rule. The Harvard University-educated economist has vowed to increase investment and create 1 million jobs by awarding concessions to build infrastructure such as schools, cutting taxes for small businesses and making government more efficient. The Ipsa added 0.8 percent to 3,786.02 at 9:26 a.m. New York time, the steepest gain on a closing basis since Jan. 8. The index has climbed 10 percent to a record since Pinera won a first-round election on Dec. 13. The MSCI EM Latin America Index is little changed over the same period. “We expect the significant foreign capital flow into the local bourse seen after the first round in December to intensify after this election,” BCI Corredor de Bolsa SA analysts including Pamela Auszenker wrote in a note to clients. Net investments in American depositary receipts of Chilean companies almost tripled in December to $72.5 million from $25.5 million in November, according to Banchile Inversiones estimates. Citigroup Inc. boosted its rating of Chilean stocks to “overweight” from “underweight” on Nov. 23, citing a likely Pinera victory. Moving Beyond Pinochet Pinera’s March 11 inauguration will mark the first transition between democratically elected opponents since Salvador Allende took office in 1970. Pinera must now fulfill his promise to exorcise the memory of military dictator Augusto Pinochet, move beyond the divisions left by the 1973 to 1990 dictatorship and spur economic growth. The change in government probably will have a “small” effect on markets, according to BNP Paribas SA. Pinera’s win, which was widely anticipated, is likely to support business activity, economists including Rafael de la Fuente wrote in an e-mailed note distributed today. “The market will also focus on the new president’s tax policies and on his commitment to Chile’s structural surplus rule,” de la Fuente wrote. Chile’s peso, the world’s best-performing currency in the last three months with an 11 percent advance against the dollar, fell 0.5 percent to 491.65 per U.S. dollar. The yield for a basket of Chile’s 10-year peso bonds in inflation-linked currency units, called unidades de fomento, rose three basis points, or 0.03 percentage point, to 3.19 percent, according to Bloomberg composite prices. More Expensive Valuations Bill Rudman , who helps oversee about $3 billion at Blackfriars Asset Management in London, said Pinera’s victory probably won’t make him more bullish on Chilean stocks, which he said are more expensive than those in other emerging markets. The Ipsa trades at 23.39 times earnings, the most expensive level since October 2007 and compared with the MSCI EM Latin America Index’s ratio of 19.64, according to weekly data compiled by Bloomberg. “Politics in Chile is so aligned around the center that we’ve always taken the view that there isn’t much of a difference between the various parties,” Rudman said in an interview. “I cannot see it changing our view of Chile — great companies but on the expensive side.” To contact the reporters on this story: James Attwood in Santiago at jattwood3@bloomberg.net

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Jim Randel: WANT TO BE MORE PERSUASIVE? PREPARATION IS THE KEY

January 13, 2010

I started out my legal career as a litigator. For years I read every book I could find on trial practice and technique. One message kept coming to me loud and clear: to be effective in a courtroom, you need to prepare … and then prepare again. I have carried this message with me into my career as a business attorney and businessman. Like trial lawyers, we business people are also always trying to persuade someone to our point of view. And, our effectiveness, in my view, has a lot to do with how we prepare for persuasive events. What is a persuasive event? It is any encounter – by e-mail, by phone, in person – when you are trying to convince someone to see things your way. It could be a long meeting or even a short phone call. All that matters is that you have an opportunity, perhaps a need, to move someone’s mind a little closer to yours. Recently I was trying to get 5 minutes with the CEO of a company. I had a scheduled meeting at the company offices with a senior executive, and I figured if I got there early and hung around the lobby, I had a 50-50 chance of bumping into the CEO. We had met once before so I knew if I saw him he would say hello to me. So, with the hope that I would bump into him, I spent 15 minutes the night before thinking through (and in fact writing down) exactly what I would say in my 5-minute window. As luck had it (well not entirely luck), I did bump into him. And I did ask for 5 minutes of his time. And he gave it to me. And, in that five minutes I quickly got out all my points – since I was well prepared. As it happened, that chance encounter turned out quite well. My point is that you need to prepare for any situation where you might be able to persuade someone. Sending an important e-mail? Do it in draft form first. About to get on a critical conference call? Consider in advance what you want to accomplish … consider how others might respond … prepare your comments in rebuttal. In other words, do not rely on your ability to ad lib … do not rely on your memory … do not rely on your ability to think quickly. The fact is that no one thinks on their feet, no one thinks spontaneously, as well as they think in the quiet of their own room. I propose that if you just take a few minutes of reflective time to prepare in advance for important persuasive events, you will increase the probability of achieving your objectives with these events. Next week’s message- knowing when to stop talking Jim Randel is the founder of The Skinny On book series. These books are receiving enormous critical acclaim from educators, bloggers, journalists and reviewers. Jeff Kindler, CEO/Chmn of Pfizer had this to say about Randel’s latest book, The Skinny on Success : “as far as reading goes, this book is as good as it gets.”

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Asian Stocks Gain on U.S. Manufacturing Report, Commodities; STX Advances

January 4, 2010

By Masaki Kondo Jan. 5 (Bloomberg) — Asian stocks rose, lifting the MSCI Asia Pacific Index to the highest level in 16 months, after U.S. manufacturing expanded at the fastest pace in more than three years and commodities gained. Sony Corp., Japan’s biggest exporter of televisions, rose 1.2 percent. Mitsubishi Corp. , a Japanese trading company that gets 39 percent of its sales from commodities, added 3.6 percent on higher oil and metal prices. STX Pan Ocean Co. , South Korea’s biggest bulk carrier, climbed 4 percent after a gauge of rates to ship commodities advanced. The MSCI Asia Pacific Index advanced 1 percent to 123.29 as of 11:41 a.m. in Tokyo, set to close at the highest level since Aug. 29, 2008. The gauge climbed 34 percent last year as lower interest rates and stimulus measures dragged the global economy out of the worst slowdown since World War II. “What we had last year were expectations for a better economy,” said Naoki Fujiwara , chief fund manager at Shinkin Asset Management Co., which oversees the equivalent of $3.86 billion in Tokyo. “This year, I’m expecting to see a firm economic recovery to shore up demand, which will be confirmed by better company earnings.” Japan’s Nikkei 225 Stock Average added 1 percent. Elpida Memory Inc. , the country’s biggest computer-memory chipmaker, surged 7.8 percent after a newspaper reported the company’s Taiwanese unit will double output. Hong Kong’s Hang Seng Index climbed 1.1 percent, while the S&P/ASX 200 Index gained 1.1 percent in Sydney. Risky Assets Malaysia’s FTSE Bursa Malaysia KLCI Index rose 1.1 percent, set for the highest close since May 2008. Emerging-market equity and bond funds closed 2009 with record annual inflows as a recovery from the global financial crisis boosted demand for riskier assets, EPFR Global said. Futures on the Standard & Poor’s 500 Index fell 0.1 percent. The gauge rose 1.6 percent in New York yesterday, the most since Nov. 9, after the Institute for Supply Management said its factory index rose to 55.9, the highest level since April 2006. The median estimate by economists was 54.3. Readings greater than 50 signal expansion. Stocks around the world rallied last year on signs economies were recovering from the credit crisis. The MSCI Asia Pacific Index ’s 2009 advance outpaced gains of 23 percent by the S&P 500 and 28 percent for Europe’s Dow Jones Stoxx 600 Index. Stocks in the gauge are valued at an average of 20 times estimated earnings, compared with 18 times for the S&P and 13 for the Stoxx. Sony, Nikon Sony, the maker of the PlayStation 3 game machine, added 1.2 percent to 2,763 yen. Nikon Corp. , a camera maker that counts North America as its biggest market by revenue, rose 3.1 percent to 1,891 yen. Electronics makers contributed the most to Japan’s Topix index, which rose 1.2 percent. Raw-material producers and energy companies accounted for a quarter of the MSCI Asia Pacific Index’s advance today. Mitsubishi, Japan’s biggest trading company by market value, gained 3.6 percent to 2,401 yen. Korea Zinc Co., which produces gold and silver, jumped 2 percent to 205,500 won. Crude oil for February delivery rose 2.7 percent to $81.51 a barrel in New York yesterday, the highest settlement since October 2008, as freezing weather and improving global economies bolstered the outlook for fuel demand. Gold prices surged the most in two months, or 2 percent, and copper futures for March delivery climbed 1.8 percent. “We can see from the positive U.S. economic data and rising commodity prices that there is a strong anticipation of a global self-sustaining recovery,” said Fumiyuki Nakanishi , a strategist at Tokyo-based SMBC Friend Securities Co. Baltic Dry In Seoul, STX Pan Ocean climbed 4 percent to 11,750 won after the Baltic Dry Index , a measure of shipping costs for commodities, jumped 4.5 percent in London yesterday, the first gain since Dec. 4. Nippon Yusen K.K., Japan’s biggest shipping line, gained 3.9 percent to 297 yen. Elpida climbed 7.8 percent to 1,625 yen and was the second- biggest winner on the MSCI Asia Pacific Index. Rexchip Electronics Corp., Elpida’s Taiwanese subsidiary, will invest about 40 billion yen ($433 million) to convert all its production lines to Elpida’s new 45-nanometer chip technology and double production in fiscal 2010, the Nikkei newspaper reported today, without citing anyone. To contact the reporters for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net .

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Japan’s Exports Fall at Slowest Pace in 14 Months as Asian Demand Recovers

December 20, 2009

By Keiko Ujikane Dec. 21 (Bloomberg) — Japan’s exports fell at the slowest pace in 14 months in November as demand from Asia supported the nation’s recovery from its worst postwar recession. Shipments abroad slid 6.2 percent from a year earlier, the smallest drop since September 2008, the Finance Ministry said today in Tokyo. From a month earlier, exports rose a seasonally adjusted 4.9 percent, the biggest advance since November 2002. Worldwide government spending has spurred demand for cars and electronics goods made by companies including Fuji Heavy Industries Ltd. and Elpida Memory Inc. The improvement in shipments may ease concern Japan’s economic recovery will stall after reports this month showed confidence among large manufacturers rose the least in three quarters and companies plan deeper spending cuts. “Economic growth may slow in the months ahead as domestic demand remains weak,” said Yoshiki Shinke , senior economist at Dai-Ichi Life Research Institute in Tokyo. “But exports are looking solid, so Japan should at least be able to avoid another recession.” The improvement in exports is partly due to a favorable year-on-year comparison, economists including Shinke said. In November 2008, shipments abroad tumbled 26.8 percent as global trade froze following the collapse of Lehman Brothers Holdings Inc. The median estimate of 17 economists surveyed by Bloomberg News was for exports to drop 6.8 percent from a year earlier. Imports Decline Imports slid 16.8 percent in November from a year earlier, the slowest decline in 12 months, the ministry said. Japan posted a trade surplus for a 10th straight month, totaling 373.9 billion yen ($4.1 billion). Exports are mending even as the strengthening yen erodes the value of profits companies earn abroad and makes their products less competitive. Japan’s currency traded at 90.41 per dollar at 9:57 a.m. in Tokyo from 90.46 before the report. It has weakened since hitting a 14-year high of 84.83 on Nov. 27. The Nikkei 225 Stock Average rose 0.6 percent. Fuji Heavy, the maker of Subaru cars, expects to boost sales in the U.S. and China next year by 15,000 vehicles in each market, Chief Executive Officer Ikuo Mori said in an interview on Dec. 16. Elpida Memory, Japan’s largest computer-memory chipmaker, may return to profit for the first time in three years, thanks to higher demand, Chief Executive Officer Yukio Sakamoto said this month. China Growth Exports to China and Asia both rose for the first time since September 2008. Shipments to Asia advanced 4.7 percent from a year earlier, compared with a 15 percent drop in October. Exports to China, Japan’s biggest overseas customer, climbed 7.8 percent, compared with a 14.4 percent decline the previous month. Asian economies are benefiting from a global trade rebound that’s being driven by interest-rate cuts and more than $2 trillion in government spending worldwide. Growth in China will accelerate to 9.4 percent next year, according to the median estimate of economists surveyed by Bloomberg News. “Exports to Asia are strong so Japan will be able to avoid a double-dip recession even though a slowdown in domestic demand is unavoidable,” said Azusa Kato , an economist at BNP Paribas in Tokyo. “Demand in Asia is strong enough to offset the adverse impact of the yen’s gain.” U.S. Sales Sales to the U.S. fell 7.9 percent, easing from October’s 27.6 percent decrease and automobile shipments to the nation rose for the first time since April 2008, the Finance Ministry said. Exports to Europe slid 15.9 percent after declining 29 percent. “Exports to the U.S. have hit bottom and are starting to gradually rise,” Dai-Ichi Life’s Shinke said. “Even though it’s not as strong as Asia, it’s positive for Japan’s economy.” Some companies are coping with the rising currency by trimming costs. Toyota Motor Corp. may avoid an annual loss if the yen trades around 90 per dollar because the automaker will postpone investments and cut costs, the Asahi newspaper reported on Dec. 16. Japanese policy makers are trying to sustain a recovery that’s under threat from the currency’s gains and deflation. Prime Minister Yukio Hatoyama unveiled a 7.2 trillion yen economic stimulus package on Dec. 8, a week after the Bank of Japan released a 10 trillion yen credit program. The central bank said last week that it “does not tolerate” falling prices. Export Revival The export revival has yet to spread to the domestic economy. Large companies plan to cut spending 13.8 percent in the year ending March 2010, the second-worst projection on record, the Bank of Japan’s Tankan survey showed last week. Economic growth slowed to an annualized 1.3 percent in the third quarter, about half the pace of the previous three months. Household confidence fell in November for the first time this year and wages have slumped for 17 months. “Even though exports are strong, domestic demand is weaker than people expected earlier this year as employment has worsened rapidly,” said Junko Nishioka , chief economist at RBS Securities Japan Ltd. in Tokyo. “That signals the recovery in external demand and the stimulus effects won’t be enough to sustain growth.” To contact the reporter on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net

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Japan Tankan Sentiment Rises at Slower Pace as Yen’s Gains Threaten Profit

December 13, 2009

By Keiko Ujikane Dec. 14 (Bloomberg) — Confidence among Japan’s largest manufacturers rose the least since the economy emerged from its worst postwar recession as companies become more concerned the yen’s gains will erode profits. The Tankan index of sentiment among big makers of products including cars and electronics climbed nine points to minus 24 in December, the Bank of Japan said in Tokyo today. The median forecast of 19 economists surveyed by Bloomberg News was minus 27. A negative number means pessimists outnumber optimists. Sentiment has been tempered by the yen’s rise to a 14-year high against the dollar, which threatens profit and market share for companies including Sony Corp. Prime Minister Yukio Hatoyama and central bank Governor Masaaki Shirakawa , fresh from unveiling emergency measures to fight deflation, will look at the report for hints of corporate optimism at a time when global stimulus spending is running out. “Japan’s economy probably won’t fall into a double-dip recession, but it may slip into a standstill,” said Hiroshi Watanabe , an economist at Daiwa Institute of Research in Tokyo. “The current recovery is supported by global stimulus measures, so it could gradually lose momentum.” The index improved 15 points in September and 10 points in June, when it climbed from a record low of minus 58. The economy grew for the first time in five quarters in the April to June period. Yen’s Gains The yen traded at 89.29 per dollar at 8:54 a.m. in Tokyo from 89.31 before the report was published. Japan’s currency surged to 84.83 on Nov. 27, the highest since July 1995. The Nikkei 225 Stock Average has dropped more than 3 percent since the end of August. Shirakawa said this month the yen’s advance and falling stock prices may have “adverse effects” on corporate sentiment. The central bank released a 10 trillion yen ($113 billion) credit program on Dec. 1, a move that Deputy Prime Minister Naoto Kan said helped weaken the yen. Hatoyama unveiled a 7.2 trillion yen stimulus package on Dec. 8, his first since coming to power in September. The plan includes employment subsidies, loan guarantees and incentives to buy energy-efficient products. Protect Earnings Some companies are trying to protect earnings by cutting jobs and slashing investment. Sony, forecasting its first consecutive annual loss since its listing in 1958, said last month that it will eliminate jobs, close a factory in Miyagi Prefecture and transfer some of its touch-panel production to China. Even amid a resurgence in export demand thanks to some $2 trillion in global stimulus spending, more than a third of the country’s factory capacity is sitting idle, giving firms less reason to expand purchases of plant and equipment. Recent reports have also pointed to slower growth. Gross domestic product rose an annualized 1.3 percent last quarter, a third lower than the government’s initial report and consumer confidence fell for the first time this year in November. Falling prices have been squeezing profit at home, prompting the government to declare last month that the country is back in deflation and push the Bank of Japan to do more to spur the economy. Asian Demand Not all analysts say the outlook is dim for companies, as demand from Asia helps exports and production . Reports last week showed the recovery in China, Japan’s biggest market, gathered pace: Factory output grew more than economists estimated in November and exports fell the least in more than a year. Elpida Memory Inc. Chief Executive Officer Yukio Sakamoto said last week the chipmaker may return to profit for the first time in three years thanks to higher demand. Tokyo Electron Ltd. Chairman Tetsuro Higashi said on Dec. 3. orders at the world’s second-largest maker of chip-manufacturing equipment will exceed the company’s forecast this quarter. “We see low probability that the economy will go back to a recession,” said Yoshiki Shinke , senior economist at Dai-Ichi Life Research Institute in Tokyo. “Asian economies, especially China, are showing stronger resilience than we thought, and that may continue to boost exports.” To contact the reporter on this story: Keiko Ujikane in Tokyo at kujikane@bloomberg.net

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Germany’s Top Nazi-Hunter Finds `Best Break’ in Years in Brazilian Archive

November 27, 2009

By Patrick Donahue and Brian Parkin Nov. 27 (Bloomberg) — German investigators trying to track down Nazi criminals before they die may have had their “best break” in years after discovering a trove of Brazilian immigration files more than half a century old. Kurt Schrimm , the top German justice official hunting Nazi fugitives, said his team stumbled on archives identifying “several hundred” Germans who moved to Brazil in the decade after World War II and who may be linked to Nazi crimes. Though only a fraction is still likely to be alive, Schrimm plans to follow up on the lead with Brazilian officials. “The discovery will probably be our most important find in recent times,” Schrimm said in an interview Nov. 24 from his office in the southwestern German city of Ludwigsburg. Schrimm kicked off research in Brazil in July and will report again on findings after his team returns there in March. The trial starting Nov. 30 of alleged death-camp guard John Demjanjuk in Munich underscores Schrimm’s effort to hunt down remaining Nazi criminals even if the search yields “order- takers, not givers” 76 years after Adolf Hitler took power. Demjanjuk, who is charged with aiding in the murder of 27,900 inmates in the Sobibor Nazi death camp in 1943, is the biggest catch yet for Schrimm, who took his job nine years ago expecting to close shop. Instead, Schrimm, 60, a senior prosecutor in Stuttgart, doubled staff at the Central Office of State Judiciaries for the Investigation of National Socialist Crimes from four to eight investigators — now down to seven. As the number of clues filed to the office dwindled through the 1990s, Schrimm pressed the Central Office to seek new leads. Soviet Archives Those leads included sifting through 1945 war trial documents from Soviet archives involving German prisoners of war and Soviet collaborators. A military-history archive in Prague was found to contain complete files on the Nazi Waffen-SS up to 1943. In 1990, Italian court documents on SS atrocities were discovered after having disappeared in the 1950s. The Brazilian files focus on suspected Nazi criminals entering on provisional passports. Schrimm and his team followed up leads from a Brazilian source who came across letters warning the authorities of Nazis trying to slip into the country with travel documents issued by the Red Cross . Little was done to bar their entry, Schrimm said. South American Refuge South America became the refuge of several high-ranking Nazi officers after the Third Reich’s collapse, including Holocaust architect Adolf Eichmann, death-camp doctor Josef Mengele and Gestapo member Klaus Barbie. While Eichmann and Barbie were caught and tried, Mengele died in Brazil in 1979. Eichmann, captured in Argentina, was hanged in Israel in 1962; Barbie, extradited by Bolivia, died in a French jail in 1991. “As hopeful as we are about the Brazil findings, just 5 percent of the suspects may still be alive and able to stand trial,” Schrimm said. “The Nazi commanders are all dead, but that doesn’t make the crimes of their younger subordinates any less prosecutable.” The Central Office conducts pre-investigations that are then handed over to state prosecutors once evidence is sufficient for a formal probe. Schrimm’s unit currently has about 20 investigations open. Efforts Graded Schrimm’s Central Office works alongside such organizations as the Los Angeles-based Simon Wiesenthal Center . The Wiesenthal Center graded Germany with a “B” in its 2009 ranking of efforts to bring Nazi criminals to justice. The U.S. received an “A.” Schrimm dismissed the rating, saying his Central Office doesn’t like “being graded like a school kid.” “As long as there’s a possibility that these people are alive, we’ll continue our work,” Schrimm said in an earlier, Aug. 21 interview in his office, a baroque structure built in 1790 to house a prison. “I never would have thought it’d be nine years already — and it will still be some time in the future.” Schrimm, whose team taps on computers in two work rooms, gave a tour of one of the dusty file spaces piled to the ceiling with dog-eared documents detailing Nazi crimes that took place more than six decades ago. The quiet setting was a far cry from the 1960s and 1970s, when the unit was at its busiest tracking down Nazis. Since its foundation in 1958, the Central Office has conducted more than 7,400 investigations. The case against Demjanjuk came about after an investigator accidentally stumbled on a report on the Internet that the U.S. was seeking to revoke his passport. Demjanjuk’s name was known because he had been convicted in 1988, charged with being the Treblinka death-camp guard known as “Ivan the Terrible” –only to be acquitted in 1993 by Israel’s Supreme Court after doubt about his identity emerged. The Central Office, suspicious about his true identity, followed up on clues gained from already scheduled visits to Israel and the U.S. Once Schrimm’s team assembled what it thought was enough information to convict, they turned it over to state prosecutors. “A few years ago nobody talked about Demjanjuk any more — he fell into the memory hole,” Schrimm said. To contact the reporter on this story: Patrick Donahue in Berlin at at pdonahue1@bloomberg.net , or Brian Parkin in Berlin at at bparkin@bloomberg.net .

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Japanese Machinery Orders Rise 10.5%, More Than Twice as Much as Estimated

November 10, 2009

By Jason Clenfield and Tatsuo Ito Nov. 11 (Bloomberg) — Orders for Japanese machinery rose more than economists estimated in September, signaling that a recovery in corporate profits may be encouraging firms to start spending on plant and equipment. Orders , an indicator of business investment in three to six months, climbed 10.5 percent from a month earlier, the Cabinet Office said today in Tokyo. The median estimate of 25 economists surveyed by Bloomberg was for a 4.1 percent gain. Today’s report suggests that Japanese companies are becoming confident enough to increase spending as their earnings recover since plunging in the first quarter of the year. Companies from Toshiba Corp. to Elpida Memory Inc. have announced plans to build new factories or increase capacity in the past month after beating their own earnings estimates. “The bottom is probably behind us for capital spending,” said Masamichi Adachi , a senior economist at JPMorgan Chase & Co. in Tokyo. “The retrenchment phase is over and the corporate sector as a whole should gradually pick up in a self-sustained way.” The yen traded at 89.75 per dollar at 8:54 a.m. in Tokyo from 89.76 before the report was published. A report due Nov. 16 will probably show Japan’s economy grew at a 2.9 percent annualized pace last quarter, according to the median estimate of economists surveyed by Bloomberg. It will be the second consecutive expansion since the economy emerged from its worst postwar recession and the first since Prime Minister Yukio Hatoyama’s government took power in September. Add to Growth Business investment may add to growth for the first time since the first three months of 2008, analysts predict. An increase in capital spending, which accounted for about a third of the economy’s growth during the six-year expansion that ended in 2007, would lend stability to a recovery that has depended on temporary factors including government stimulus and a rebound in production spurred by run down inventories. Improved earnings have provided companies with money to invest, while economic growth in Japan’s overseas markets has rekindled demand. Exports grew 10.4 percent last quarter from the previous period, according to Cabinet Office trade figures measured by volume. Pretax profit at the more than 900 Japanese companies that had announced earnings as of Nov. 10 doubled in the quarter ended Sept. 30 from the previous three months, according to data compiled by Bloomberg News. Even after the gain, profit was still 40 percent below the same period last year. More Spending Better earnings are already encouraging companies to spend. Toshiba, Japan’s biggest maker of semiconductors, said last month it will spend 25 billion yen ($277 million) to build a new lithium-ion battery plant in Niigata, northern Japan. Cost cuts last quarter helped the company narrow its loss to 200 million yen from 27 billion yen during the same period last year. Elpida Memory , Japan’s largest computer memory-chip maker, last week raised its estimate for capital spending in the fiscal year by 50 percent to 60 billion yen, citing increased orders for gear to make more advanced semiconductors. Shares of machinery makers have risen this year, with Fanuc Ltd. up 21 percent and Advantest Corp. climbing 41 percent. “Executives feel that we’ve escaped the crisis and now we have to think about a more normal situation,” said JPMorgan’s Adachi. “It’s less benign than in the five years through 2007, but there’s still going to be positive growth and you have to compete with competitors in Asia.” To contact the reporters on this story: Jason Clenfield in Tokyo at jclenfield@bloomberg.net ; Tatsuo Ito in Tokyo at tito@bloomberg.net .

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Schottenfeld `Prop Shop’ at Center of Inside-Trading Ring, Prosecutors Say

November 6, 2009

By James Sterngold, Cristina Alesci and Saijel Kishan Nov. 6 (Bloomberg) — Schottenfeld Group LLC, the firm where three of the people arrested yesterday on insider-trading charges worked, said it was “deeply troubled and shocked” by the allegations against its former employees. It wasn’t the first time the New York-based company has had to react to allegations of impropriety by its traders. In April 2008, former employee Paul Berliner settled charges he spread false rumors that private-equity firm Blackstone Group LP was about to cut its offer for Alliance Data Systems Corp. “There is no place at our firm for individuals who violate the securities laws,” Schottenfeld’s chairman, Richard Schottenfeld , said in an April 2008 statement. Zvi Goffer , a Schottenfeld trader from January 2007 through December 2007, is at the center of the government’s latest charges in a case that has so far ensnared six firms and at least 20 people allegedly involved in insider trading. He was known within the ring as “the Octopussy ,” a reference to the 1983 James Bond film starring Roger Moore , “because he had arms in so many sources of information,” according to a U.S. Securities and Exchange Commission complaint. Schottenfeld is a “prop shop,” or proprietary-trading firm, where about 50 traders buy and sell stocks daily using company money. They keep a portion of any profits they make. Unlike a hedge fund, there is no unified strategy or investment committee; each trader makes his own decisions. The firm was started in 2003, and at least three of those named by the government yesterday spent some time working there together: Goffer, 32, David Plate , 32, and Gautham Shankar , 35, according to civil and criminal complaints filed yesterday. High Turnover Turnover at Schottenfeld, on the 10th floor of 800 Third Ave. in Midtown, was high, as traders who lost money left within days or weeks, according to a former employee, who asked that his name not be used. In January 2008, Goffer moved to Galleon Group LLC, helped by one of his co-conspirators, Craig Drimal , 53, a professional trader. Drimal had previously worked at Galleon, a hedge-fund firm that managed $7 billion in 2008. Drimal continued to work out of Galleon’s offices on New York’s Madison Avenue after ending his employment there. Drimal walked away with the largest share of the profits earned by Goffer’s insider-trading ring, according to the government’s complaint. U.S. prosecutors last month charged Galleon co-founder Raj Rajaratnam , 52, and five others in what the government said was the largest hedge fund insider-trading ring ever prosecuted. Rajaratnam, who is free on bail, has said he is innocent. Wiretaps In that case, and in yesterday’s arrests, the government investigators relied on phone taps and cooperating witnesses, some of whom wore hidden recording devices. “Why do we have to resort to wiretaps and other methods traditionally reserved for the mob and narcotics traffickers,” U.S. Attorney Preet Bharara said at a news conference in Manhattan yesterday. “Some of the defendants, taking a page from the drug dealers playbook, deliberately used anonymous, hard-to-trace, prepaid cell phones to avoid law enforcement detection.” The defendants also discussed falsifying company records and taking other steps to avoid getting caught, he said. “When sophisticated business people begin to adopt the methods of common criminals, we have no choice but to treat them as such,” said Bharara. The FBI’s phone taps in the case started on Nov. 16, 2007, and ran until March 6, 2008, according to the complaint. In addition, an unnamed cooperating witness, referred to as CS-1, held meetings with Goffer and others wearing a hidden recording device, the complaint said. Link to Lawyer Prosecutors and the SEC said Goffer’s network of co- conspirators traded on information that originated in several instances with Arthur Cutillo , a lawyer at Ropes & Gray LLP . The Boston-based law firm represented private-equity firms TPG Inc. and Silver Lake in their 2007 leveraged buyout of Basking Ridge, New Jersey-based Avaya Inc., the world’s largest maker of equipment for corporate phone networks. It also represented Bain Capital LLC in its attempt to acquire 3Com Corp., a Marlborough, Massachusetts-based network-equipment maker, in 2007. Cutillo provided his tips to Jason Golfarb, 31, an attorney in private practice in Brooklyn, who passed the information to Goffer, prosecutors say. Goffer allegedly shared the information with five people, including his brother Emmanuel Goffer , 31, a trader at Spectrum Trading, Shankar, Plate, 34, who worked at Schottenfeld, Michael Kimelman , 38, a trader at Lighthouse Financial Group and later Echotrade LLC and Incremental Capital LLC. Of the people named who worked together at Schottenfeld, Shankar, 35, agreed to plead guilty to securities fraud on Oct. 20. Kickbacks Declining to comment were Kimelman’s attorney Michael Sommer, Emmanuel Goffer’s lawyer Matthew Levine, Goldfarb’s attorney Harvey Greenberg, and Plate’s lawyer Frank Handleman. Drimal’s attorney JaneAnne Murray didn’t return a call seeking comment. Plate also tipped off an unnamed relative who earned $97, 502, according to the criminal complaint, which says that all the trades earned $11 million in profits. In return for the tips, the conspirators paid kickbacks, according to prosecutors. FBI agents observed Goffer as he received a packet, believed to be cash, from Drimal in an exchange near the corner of First Avenue and 63rd Street on the upper east side of Manhattan, according to the complaint. Goffer then met Goldfarb nearby and passed him the packet, which was about the size of a VHS tape, according to the complaint. The exchanges took place in November 2007. Hilton Hotels The complaint alleges that they traded in five stocks involved in takeovers, Avaya, 3Com, Axcan Pharma Inc., Kronos Inc. and Hilton Hotels Corp. It mentions that there were discussions about another stock, Dallas-based Alliance Data Systems , which was involved in a takeover. No details of any possible trades in the stock are provided in the complaint. That was the same stock involved in an unrelated complaint last year against a different Schottenfeld trader. Paul Berliner paid $156,000 in April 2008 to settle claims that he spread false rumors by messaging traders at brokerages and hedge funds in November 2007 about Blackstone’s bid for Alliance Data Systems. Berliner sought to profit by claiming Alliance Data’s board was meeting to discuss a reduced offer by New York-based Blackstone because of problems in Alliance Data’s credit-card bank, according to the SEC. After yesterday’s arrests, Schottenfeld released a statement that said none of the people involved in the criminal case were current employees. Schottenfeld itself is a defendant in the SEC’s civil suit. ‘Deeply Troubled’ “We are deeply troubled and shocked by the criminal allegations made today against former employees of our firm,” Schottenfeld’s statement said. “These individuals have not been affiliated with the firm for nearly two years.” Prosecutors said that after the 3Com deal was done, and the traders had made their money, that Zvi Goffer removed the SIM card from his disposable cell phone and destroyed it by biting it in half. “There should be a moment — hopefully before you’re holding a bag of cash delivered to you by somebody codenamed ‘the Octopussy’ — that causes anyone in a position to tip or trade on inside information to think twice before taking such a misguided step,” SEC Enforcement Director Robert Khuzami said at a press conference yesterday. “And if you find yourself chewing the memory card in your cell phone to destroy any record of your misconduct, something has gone terribly wrong with your character.” The criminal case is U.S. v. Zvi Goffer et al, 1:09-cv- 09208-LAK, U.S. District Court, Southern District of New York (Manhattan). To contact the reporters on this story: James Sterngold in New York at Jsterngold2@bloomberg.net ; Cristina Alesci in New York at Calesci2@bloomberg.net ; Saijel Kishan in New York at skishan@bloomberg.net

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John Hope Bryant: The Problem With Short-Termism

October 20, 2009

In my new book, LOVE LEADERSHIP: The New Way to Lead in a Fear Based World (Jossey-Bass), I make the case that there are only two things in the world: Love and fear, and what you don’t love, you fear. I go on to say that the reason our world seems all screwed up is that “most of our so-called leaders have led by fear.” Fear may seem to work in the short term, but over the long-term fear flat out fails (The Second of Five Law of Love Leadership in my book is entitled “Fear Fails”). Worse, I say that “fear is the ultimate prosperity killer.” If you want to paralyze an organization, your family, your community, or your own life, insert a culture of fear. So you say, “If this is the case, and if fear is so corrosive and so bad for us,” as I state over and over again in Love Leadership , “then why, John Hope Bryant has fear seemingly done so well in our little world?” The answer is the feel-good, me-based, immediate gratification disease called “short-termism.” Fear Leads to Short-Termism The problem is that the entire business world seems to have come down with a case of A.D.D. (Attention Deficit Disorder). The disease goes by another name: short-termism. Short-termism is similar to fear and laziness, in that it relies on shortcuts to achieve results. For most people looking for a short-term fix, fear-based leadership wins out, hands down. If you’re satisfied with flash-in-the-pan, short-term thinking, there’s no better way than to lead based on fear. With luck, your business will take off like a rocket, for a while. Eventually, however, it will implode. My friend and mentor Quincy Jones says “it takes 20 years to change a culture.” Well, over the past 20 or so years we have made dumb sexy. We have dumbed down and celebrated it. Over the next 20 years, we need to make “smart sexy again” (see www.5MK.org for our initiative to make “smart sexy again” with our youth, helping to break the high-school dropout epidemic and encouraging kids to stay in school). A Perfect Storm In Love Leadership, I say that the first cousin of fear is short-termism, and short-term’s best friend is laziness, the roommate of laziness is greed, and the most popular word ever uttered by fear, short-term-ism, laziness or greed, is “me.” Translation: What do I get? But in a world seemingly obsessed with only one question, which is “What do I get,” in order for us to succeed over the long-term, we must ask ourselves an entirely different question, which is “What do I have to give?” Fear is a lazy bastard. It comes from the most primitive part of what evolutionary psychologists call the reptilian brain, the part of the brain that governs instincts, heartbeat and breathing. It takes no work and no intelligence. Even a lizard can be afraid. Love though, comes from the most advanced part of the mammalian brain — the forebrain — the region that thinks, remembers and finds meaning. Fear is a feeling and nothing more. Love, in contrast, is feeling plus thought. It’s an emotion that stays in your memory forever. That’s why love survives, long after fear dies. Love is so strong that it’s the only real reason the human race is still here, after all the opportunities we’ve had to destroy ourselves . This crisis is not about some sophisticated or complex failure of free enterprise and capitalism as we know it, but the rather simple-minded failure of greed itself. In other words, this is an example of short-termism taken to its most fundamental and core inner-flaw: An expediency and immediately, strictly for one’s own individual benefit, over any sense of (higher) purpose. As I have said, and will continue to say, as I tour the nation in my “Conversation on Leadership” series, this crisis is more a crisis of virtues and values, than any sort of classic economic crisis. No doubt you are feeling this crisis economically, but this is no different than when you have a cold, you feel or sense it when you sneeze. As I state in Love Leadership, “the basic cause of the original mortgage crisis was a fundamental lack of a relationship with customers. The broker and the borrower in the mortgage deal were not really connected or committed in a real way; the broker and the banker were not really connected or committed; and this is key: the banker and the borrower were not connected or committed. Likewise, the banker and Wall Street were not connected or committed, and fatally, Wall Street securitization firms and the investors around the world to whom they sold these complex products were not connected or committed. There was no real relationship between any of these channels (other than the financial transaction itself).” I continued, “Put even more simply, as long as the broker, the banker, the Wall Street player and others in the deal got their fee, they were happy — or so they thought. This behavior was further supercharged by shareholder pressure for firms to hit aggressive quarterly profit targets, a short-term focus that conveniently translated into huge performance bonuses for executives.” Finally, I summarize in this section, “I am all for free enterprise and capitalism. Without a clearly defined profit motivation, a business simply will not be viable for long. My problem is that the relationship between all these various individuals and groups was simply the financial transaction. The concern was for the buck, not for the borrower.” Everyone needs to have an enlightened self-interest in the outcome of a business transaction, and it should start with a genuine understanding of and concern with what’s best for the client, the customer, the borrower. That concern — what I call love — was fundamentally absent during the events that led up to this economic crisis. There simply was no relationship with the borrower. An Example And Examination of Doing It Right Richard C. Hartnack, an Operation HOPE board member, understands well this problem of the transactional approach. He is in charge of consumer banking as vice chairman of US Bancorp, the Minneapolis-based parent company of US Bank, the sixth-largest commercial bank in America. Prior to that he served as vice chairman of Union Bank of California from 1991 to 2005. US Bank was roundly criticized in 2006 and 2007 for having slower revenue growth than many of its peer banks. A big reason was its decision to largely ignore the mortgage market, except for the prime loans that it had mostly specialized in. Hartnack recalls that when the financial crisis hit in 2007, US Bank took a hard look at its adjustable rate mortgage (ARM) loans. The bank didn’t make these loans with the intention that they were going to be a problem, but it saw in September, 2007, that interest rates at that time were expecting to go up. The bank did the math and knew that the change in the rates would be a big shock to its mortgage holders. US Bank had a choice: It could try to deal individually with thousands of households and figure out the exact right loan for each one, and while it was doing that, could watch people get into serious trouble paying their loans (and simultaneously watch their reputation take a hit in similar fashion). Or the bank could simply not raise the rates. Hartnack knew that the bank was either going to have to deal with a lot of bad loans, or it could make this concession, and see a set of problems just go away. The bank opted for love leadership. It held the interest steady, and told customers they had to opt out of their ARM into a fixed rate loan. And as you would expect, a large percentage of the bank’s clients accepted the offer. Hartnack’s decision turned out to be prescient, one that did well for the bank and did good for its customers. It helped people stay in affordable mortgages, and it avoided foreclosures, where everyone loses. He says: This example is proof that a short-term focus has a lot of temptations. It’s a rare set of circumstances — combining the board of directors, CEO, top management, investors, analysts, the culture and everything else — that creates an environment in which people are willing to look at the long haul and avoid short-term temptations. When you’re operating for the short-term, there are a thousand little trade-offs where you find yourself faced with choices that are terribly uncomfortable. And it takes a huge amount of character on the part of a management team to stand up to those. In the end, all you really have is your reputation, when you’re dead and buried, they’re not going to bury your money with you. When you’re dead and gone, what people are going to look back on is your reputation, and people are going to judge if you’re a leader in business with your customers, your community, your employees and your shareholders. Your reputation depends on something greater than making money. It depends on creating prosperity for all. Where We Go From Here My friend Daniel Sachs, CEO of Proventus, a $750 million private investment company in Stockholm, Sweden, said in an interview for my book, “It’s up to the people who believe in markets and believe in globalization and believe in free trade, to make the case for an open society as appealing as can to the many. Because if it’s not good for the many — if it’s only good for the few — then it’s not going to win. It’s up to us who believe in markets and in capitalism to devise a model of capitalism that is more long term.” As Sachs has shown, if you want to still be in charge a year from now — or five, 10 or 20 years from now — you’ve got to build something that lasts. To perpetuate your power into the future, whether you’re growing a business, leading a government, nurturing a family, or running a team, you need to earn the love and respect of those around you, and you need to love and respect them back. If you lead with love for the long term, people will follow you forever, wherever — for their own good as well as yours — and you will be remembered as a person of greatness. John Hope Bryant is the founder, chairman and CEO of Operation HOPE, vice chairman of the U.S. President’s Advisory Council on Financial Literacy as well as chairman of the Council Committee on the Under-Served, financial literacy advisor to the World Economic Forum Global Agenda Council, a Young Global Leaders for the World Economic Forum, and author of LOVE LEADERSHIP; A New Way to Lead in a Fear-Based World (Jossey-Bass), which debuted in August, 2009, #8 in the CEO Reads Top 10 Best Seller List.

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Ostrom, Williamson Share Nobel Prize in Economics for Work on Governance

October 12, 2009

By Niklas Magnusson Oct. 12 (Bloomberg) — Elinor Ostrom and Oliver Williamson of the U.S. won the Nobel Economics Prize for their work on economic governance and the organization of cooperation. “Ostrom has demonstrated how common property can be successfully managed by user associations,” while Williamson “developed a theory where business firms serve as structures for conflict resolution,” the Royal Swedish Academy of Sciences, which selects the winner, said today in Stockholm. They will share 10 million Swedish kronor ($1.4 million) in prize money. “Over the last three decades these seminal contributions have advanced economic governance research from the fringe to the forefront of scientific attention,” the academy said. Williamson, 77, is a professor emeritus at the University of California at Berkeley. Ostrom teaches at Indiana University in Bloomington. Alfred Nobel , the Swede who invented dynamite, established awards for achievements in physics, chemistry, medicine, peace and literature in his will in 1896. The economics prize was set up by Sweden’s central bank in 1968. Past winners include Milton Friedman , Amartya Sen and James Tobin . The award’s official name is “The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel.” The money, a gold medal and a diploma will be handed out at a ceremony in Stockholm on Dec. 10, the anniversary of Nobel’s death. The economics prize last year was awarded to Paul Krugman , a professor at Princeton University and a columnist for The New York Times, for his theories on world trade. From 1969 to 2008, the Nobel Prize for economics was awarded to 42 Americans, eight Britons, three Norwegians and two Swedes. Economists from Germany, France, the Netherlands, India, Israel, Canada and the former Soviet Union each won once. To contact the reporter on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net

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Americans Ostrom, Williamson Share Nobel Prize in Economics for Governance

October 12, 2009

By Niklas Magnusson Oct. 12 (Bloomberg) — Elinor Ostrom and Oliver Williamson of the U.S. won the Nobel Economics Prize for their work on economic governance and the organization of cooperation. “Ostrom has demonstrated how common property can be successfully managed by user associations,” while Williamson “developed a theory where business firms serve as structures for conflict resolution,” the Royal Swedish Academy of Sciences, which selects the winner, said today in Stockholm. They will share 10 million Swedish kronor ($1.4 million) in prize money. “Over the last three decades these seminal contributions have advanced economic governance research from the fringe to the forefront of scientific attention,” the academy said. Williamson, 77, is a professor emeritus at the University of California at Berkeley. Ostrom teaches at Indiana University in Bloomington. Alfred Nobel , the Swede who invented dynamite, established awards for achievements in physics, chemistry, medicine, peace and literature in his will in 1896. The economics prize was set up by Sweden’s central bank in 1968. Past winners include Milton Friedman , Amartya Sen and James Tobin . The award’s official name is “The Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel.” The money, a gold medal and a diploma will be handed out at a ceremony in Stockholm on Dec. 10, the anniversary of Nobel’s death. The economics prize last year was awarded to Paul Krugman , a professor at Princeton University and a columnist for The New York Times, for his theories on world trade. From 1969 to 2008, the Nobel Prize for economics was awarded to 42 Americans, eight Britons, three Norwegians and two Swedes. Economists from Germany, France, the Netherlands, India, Israel, Canada and the former Soviet Union each won once. To contact the reporter on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net

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Broadcom CIO Joins Violin Memory Industry Advisory Board

October 6, 2009

Semiconductor Industry Leader Kenneth Venner Provides Guidance to Promote Adoption of High-Performance Memory Appliances in Corporate Data Centers

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Factory Orders in U.S. Unexpectedly Drop 0.8%; Ex-Transport Increase 0.4%

October 2, 2009

By Courtney Schlisserman Oct. 2 (Bloomberg) — Orders placed with U.S. factories fell unexpectedly in August, restrained by long-lasting items such as commercial aircraft, construction machinery and electrical equipment. Bookings fell 0.8 percent after a revised 1.4 percent increase in July that was larger than previously estimated, the Commerce Department said today in Washington. Excluding transportation equipment, orders rose 0.4 percent. Today’s report follows others this week that showed manufacturing contracted or slowed in September. With excess capacity close to a record, companies have less reason to ramp up production until they see stronger gains in demand. While the “cash for clunkers” program boosted automakers’ output in August, it’s now expired, pointing to an uneven rebound. “We could have a choppy recovery,” Benjamin Reitzes, an economist at BMO Capital Markets in Toronto, said before the report. “Employment is still falling, and until that turns around the economy is going to have trouble gaining any momentum.” Factory orders were forecast to be unchanged, after an originally estimated 1.3 percent gain in June, according to the median of 65 estimates in a Bloomberg News survey. Projections ranged from a decrease of 1.7 percent to an increase of 2.1 percent. Employers cut more jobs than forecast last month and the unemployment rate rose to a 26-year high, Labor Department data showed today, calling into question the sustainability of the economic recovery. Durable Goods The unemployment rate rose to 9.8 percent, the highest since 1983, from 9.7 percent in August. Payrolls fell by 263,000, following a revised 201,000 decline the prior month that was less than previously reported. Orders for durable goods, which make up 47 percent of total factory demand, fell 2.6 percent, the biggest drop since January. The government last week estimated they had dropped 2.4 percent. Demand for transportation equipment, which tends to be volatile, fell 9.1 percent, led by a 43 percent decline in commercial aircraft and parts. Autos increased 2 percent. Ford Motor Co, General Motors Co. and Honda Motor Co. are among automakers that cited the popularity of the cash-for- clunkers plan as they announced production increases for the coming months. Clunkers Program The program, which ended Aug. 24, offered auto buyers discounts of as much as $4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles. The plan produced almost 700,000 auto sales before it ended, the Transportation Department said Aug. 26. Auto sales fell 35 percent in September from the previous month to a 9.2 million annual rate, after the clunkers plan expired, according to Bloomberg data. Sales had reached the highest level in more than year a month earlier. Bookings for capital goods excluding aircraft and military equipment, a measure of future business investment, fell 0.9 percent after dropping 1.3 percent in July. Shipments of those goods, used in calculating gross domestic product, decreased 2 percent. Economists earlier this week said the end of the clunkers incentive may have helped fuel a weaker-than-forecast September reading for the Institute for Supply Management- Chicago’s business survey, which found activity dropped. The Chicago group is not affiliated with the national Institute for Supply Management. Factory Stockpiles The Institute for Supply Management yesterday said its factory gauge edged down to 52.6, from 52.9 in August. Readings above 50 signal expansion. Another Commerce Department report this week showed the record drop in stockpiles in the second quarter was even larger than previously estimated, paving the way for gains in manufacturing in the second half of the year. Today’s report showed factory stockpiles fell 0.8 percent in August, the smallest drop since May, after falling a revised 0.9 percent a month earlier. Manufacturers had enough goods on hand to last 1.38 months — the lowest since October — at the current sales pace, down from 1.39 months in July. Micron Technology Inc., the biggest U.S. producer of computer-memory chips, this week reported a narrower loss after an industry glut eased and product prices rebounded. Bankruptcies and factory shutdowns have helped the memory industry pare an oversupply of chips, pushing up prices closer to the cost of production. Micron makes dynamic random access memory, or DRAM, for personal computers, as well as Nand flash chips, which store data in devices such as Apple Inc.’s iPhone. Job Cuts Timothy Main, chief executive officer of Jabil Circuit Inc., the Florida electronics manufacturer, said this week that the worst of the recession had likely passed. Even so, the company stepped up a job-cutting program. Jabil now expects to eliminate 4,500 positions, up from the 3,000 already planned. Today’s factory report showed orders of non-durable goods gained 0.8 percent. The increase may have been influenced by an 8 percent gain in wholesale energy costs in August, according to Labor Department figures released Sept. 15. To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net .

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Asian Stocks Advance for Second Day on NGK Profit Forecast, Micron Results

September 29, 2009

By Shani Raja Sept. 30 (Bloomberg) — Asian stocks rose for a second day, led by automakers and technology companies, after NGK Insulators Ltd. raised its profit forecast and Micron Technology Inc. reported a narrower loss. NGK Insulators surged 8.1 percent in Tokyo after citing growing demand for products related to cars and electronics for its higher forecast. Hynix Semiconductor Inc. gained 2.6 percent in Seoul as Micron’s results boosted optimism a glut in the memory-chip industry is easing. Billabong International Ltd., Australia’s biggest surfwear maker, climbed 3.6 percent on a greater-than-estimated retail sales report. The MSCI Asia Pacific Index added 0.5 percent to 117.33 as of 11:38 a.m. in Tokyo. The gauge is set for its second-straight quarterly advance, having climbed 14 percent in the past three months as economies around the world emerged from recession. “The recovery is moving from being supported by governments and central banks to being a bit more self-sustained,” said Nader Naeimi , a Sydney-based strategist at AMP Capital Investors, which manages about $75 billion. “Across Asia we’re seeing strong private demand as well as a strong pick-up in actual measures of economic activity.” The Shanghai Composite Index climbed 1 percent in China, where markets are closed from tomorrow for a week-long holiday. South Korea’s Kospi Index gained 0.6 percent, while Taiwan’s Taiex Index added 0.7 percent. Japan’s Nikkei 225 Stock Average was little changed. Hai-O Enterprise Bhd., a Malaysian seller of Chinese wines, herbs and medicines, rose 4.9 percent to a record after first- quarter profit climbed 36 percent. U.S. Home Prices Futures on the U.S. Standard & Poor’s 500 Index were little changed. The gauge fluctuated between gains and losses yesterday before finishing down 0.2 percent. The S&P/Case-Shiller home- price index climbed 1.2 percent in July from the previous month, the most since October 2005, according to an S&P report . In Tokyo, NGK Insulators surged 8.1 percent to 2,065 yen after boosting its profit forecast for the year ending March 31, 2010, by 14 percent to 12.5 billion yen ($139 million). Hynix climbed 3.1 percent to 20,150 won, while Samsung Electronics Co., the world’s largest maker of computer memory, lost 1.4 percent to 823,000 won. Taiwan Semiconductor Manufacturing Co., the world’s largest maker of customized chips, gained 1.9 percent to NT$64.90. Technology companies accounted for 20 percent of the MSCI Asia Pacific Index’s gain today after Micron said its fourth- quarter net loss narrowed to $88 million from $344 million a year earlier. The loss in the period of 10 cents a share beat the 19 cents estimated by analysts in a Bloomberg survey. Memory Chips Bankruptcies and factory shutdowns have helped the memory industry pare an oversupply of chips, pushing up prices closer to the cost of production. Micron makes dynamic random access memory, or DRAM , for personal computers, as well as Nand flash chips, which store information. The MSCI Asia Pacific Index has added 3.4 percent in September, set for a seventh monthly advance, its longest stretch of gains since the 10 months ended July 2007. Japan’s Topix index and the Nikkei 225 are the worst performers this month among 88 global equity indexes tracked by Bloomberg, amid uncertainties over policies from the nation’s new government. The MSCI index’s gain in the past three months is lower than the second quarter’s 28 percent as concerns emerged the stock rally may have overvalued company earnings prospects. The average price of the gauge’s shares rose to 1.6 times book value on Sept. 17, up from 1 at the measure’s five-year low on March 9. Australian Retail Sales The climb in equities in the past seven months has been fueled by better-than-estimated economic and earnings reports. Australian retail sales climbed 0.9 percent in August, the first gain in three months, the country’s statistics bureau reported today. The median forecast of economists surveyed by Bloomberg News was for a 0.5 percent gain. Billabong rose 3.6 percent to A$11.95 in Sydney, while Harvey Norman Holdings Ltd., Australia’s largest furniture and electrical retailer, added 1.4 percent to A$4.33. In Kuala Lumpur, Hai-O Enterprise advanced 4.9 percent to a record 5.97 ringgit after first-quarter profit climbed 36 percent. OSK Research Sdn. upgraded the stock to “buy” from “neutral.” To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net .

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Stephen Gyllenhaal: The Shock and Awe of a Second Financial Meltdown

September 22, 2009

What happened to trying to unravel last fall’s financial meltdown, for that matter what happened to the meltdown altogether? The stock market is back to almost pre-meltdown levels. The bonuses continue to be spread around the boardrooms. The high-end restaurants have filled back up to bursting here in LA and in NY. The media’s excited about the economy again. Where did it all go right? And why do I have this nasty feeling that on the right, the big boys are happier than ever — not just because trillions of untraceable dollars from the US Treasury have come their way, but that perhaps this was exactly where they were hoping Obama and the Democrats would be about now — no reforms, no meddling in the existing structure except a few articulate words and the memory fast fading of who caused that last meltdown, namely eight years of Bush, Cheney and those big boys on the right (not to mention a peppering of the Clintons, Daddy Bush with Granddaddy Reagan handsomely bringing up the rear). But what happens if a second meltdown hits? What if those boys with all those trillions go short in the market, pull enough of their money out to leave the rest of us holding the bag? Then won’t Obama and his Democrat’s take the full hit? Won’t the right wing boys walk away clean this time, not to mention lugging a windfall from all that short selling, plus all that untraceable taxpayer’s cash? “Survival of the fittest.” Although many on the right claim not to believe in Darwin, I don’t buy it. Isn’t “survival of the fittest” the driving mantra of capitalism? Or maybe it’s better to trace it back to Calvinism — the concept that those who were to go to heaven were proving it by getting rich in this material world. Either way the screwing of the “little guy” while you become as rich as Midas has been the American Way from the very start so why shouldn’t it be playing out now? And what about that quote “to get government down to the size where we can drown it in a bathtub”? Do we really believe those guys have gone away — the Karl Roves, the Cheneys, the Norquists and so on? Our government’s treasury is being drained at an unimaginable rate. War rumbles on in the Middle East unabated with Afghanistan now desperately in need of more troops. Now…imagine a second meltdown, say, around the midterm elections or, perhaps even better, a year or so before the next Presidential Election. I want to be wrong — very, very wrong. But I remember Bush’s brutal and conniving eight years. I remember that awful couple of weeks when he and his people stole that first Presidential Election in 2000 with the help of a tragically immoral Supreme Court and a simpering Al Gore. I remember 9/11 and that nasty second election victory focusing on Ohio, not to mention torture and Iraq. Today I watch the calculated stoking of rage around the health care debate. I watch the lies and spin from the shadows of the right wing and it gives me serious pause. I don’t want to be unprepared for the kind of end game that could well be executed by the people who brought us shock and awe. I don’t ever want to be shocked or awed again, which is why thinking the worst today seems to me so important for what may well come our way tomorrow.

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Asian Stocks Rise on Confidence Economy Is Recovering; Alumina, NTT Climb

August 6, 2009

By Shani Raja Aug. 6 (Bloomberg) — Asian stocks rose as Alumina Ltd. posted a smaller-than-estimated underlying loss and Australian employers unexpectedly added jobs, boosting confidence the global economy is recovering. Alumina , partner in the world’s biggest producer of the material used to make aluminum, surged 9.8 percent in Sydney. Nippon Telegraph & Telephone Corp. , Japan’s biggest phone operator, climbed 2.5 percent after saying profit at its fixed- line units rose. Chinese stocks declined, led by Citic Securities Co. ’s 2.1 percent drop in Shanghai, on concern the nation’s central bank may rein in lending. The MSCI Asia Pacific Index gained 0.8 percent to 112.81 as of 3:50 p.m. in Tokyo, with five stocks advancing for every four that declined. The measure had fallen 1 percent in the previous two days. The gauge has climbed 60 percent from a five-year low on March 9 on speculation the global economy is recovering. “The market is ostensibly in a bit of a sweet spot,” said Tim Schroeders , who helps manage $1 billion at Pengana Capital Ltd. in Melbourne. “The momentum in economic fundamentals is improving in terms of global growth. We’ll need to see continued upgrades to earnings estimates to ensure the market continues its momentum higher.” Japan’s Nikkei 225 Stock Average rose 1.3 percent. Elpida Memory Inc. climbed 7.2 percent in Tokyo after JPMorgan Chase & Co. upgraded the stock. Australia’s S&P/ASX 200 Index added 1.5 percent as builder Leighton Holdings Ltd. gained 3.4 percent after predicting a rebound in Asian demand for resources. Nikon, Cathay Pacific Among stocks that fell today, Nikon Corp. , which makes equipment used to produce semiconductors, tumbled 10 percent in Tokyo after forecasting a record loss. Cathay Pacific Airways Ltd. , Hong Kong’s biggest carrier, dropped 3.6 percent after its chief executive said the global recession might require “fundamental changes” to its business model. Futures on the Standard & Poor’s 500 Index were little changed. The gauge dropped 0.3 percent yesterday after data from ADP Employer Services showed American businesses cut more workers from pay rolls last month than economists estimated. The Institute for Supply Management’s index of non-manufacturing businesses also declined in July. Alumina rose 9.8 percent to A$1.795. The company reported an underlying loss of A$15 million ($12.6 million) in the six months ended June 30, beating the A$22 million median estimate of three analysts compiled by Bloomberg. “It appears that the worst is over,” said Ben Potter , an analyst at IG Markets in Melbourne. “The headline numbers were certainly stronger than expected.” Metals Prices BHP Billiton Ltd. , the world’s biggest mining company, gained 1.7 percent to A$38.79 after a gauge of six metals in London climbed 3.3 percent yesterday to a level not seen since Sept. 30. Aluminum prices jumped 4 percent, while copper added 2.5 percent. Rio Tinto Group , the world’s third-largest mining company, rose 1.9 percent to A$61.90. NTT climbed 2.5 percent to 4,070 yen. The company said yesterday operating profits at its fixed-line units NTT East Corp. and NTT West Corp. grew at least 76 percent in the three months to June 30. The results of these subsidiaries tend to influence NTT’s share price, Hitoshi Hayakawa , an analyst at Credit Suisse Group AG, wrote in a report yesterday. Elpida, Japan’s largest maker of computer-memory chips, gained 7.2 percent to 1,195 yen after JPMorgan Chase & Co. upgraded the stock to “overweight” from “neutral” on signs that earnings will “break even” in the December quarter. Rising Valuations Thirty-four percent of the 369 companies in the MSCI Asia Pacific Index that have reported quarterly results so far have beaten analysts’ profit estimates, while 18 percent have missed, according to data compiled by Bloomberg. Better-than-expected earnings and economic reports worldwide have driven stocks higher since March, lifting the average valuation of the MSCI Asia Pacific Index’s companies to a four-month high of 25 times estimated profit on July 28. “The market is at the near-term ceiling,” said Mitsushige Akino , who oversees the equivalent of $632 million at Ichiyoshi Investment Management Co. “People are optimistic but don’t have enough catalysts to make them even more optimistic.” In Sydney, Leighton , Australia’s biggest construction company, gained 3.4 percent to A$30 after Chief Executive Officer Wal King said the past 18 months represented only a “bump” in the minerals-demand cycle. The number of Australians employed rose 32,200 from June, the country’s statistics bureau said in Sydney today. The median estimate of 18 economists surveyed by Bloomberg was for a decline of 18,000. The jobless rate held at 5.8 percent. Fine Tuning Citic Securities, China’s largest brokerage by market value, slumped 2.1 percent to 35.60 yuan after the People’s Bank of China said it will fine-tune monetary policy and ensure “appropriate” lending growth. Haitong Securities Co. sank 1.1 percent to 18.52 yuan. The Shanghai Composite Index lost 1 percent, posting its first back-to-back drop in three weeks. The gauge has gained every month this year as record bank lending and government stimulus spending spur a rebound in the economy. Companies in the measure are valued at an average 36 times estimated profit, twice the level of stocks in the MSCI Emerging Market Index . “The ‘fine-tune tone’ is spooking investors who are worried that the central bank will follow up with tightening measures, such as hiking the reserve ratio,” said Wang Zheng , a fund manager at Jingxi Investment Management Co. in Shanghai. “With the market at a high-flying level, investors are very sensitive to any news related to liquidity.” Record Loss Nikon sank 10 percent to 1,690 yen. The company said its net loss will probably be 28 billion yen ($295 million) in the year ending March 2010, compared with a May projection of 17 billion yen. The deficit would be the largest for the company, according to financial records stretching back to 1992. Cathay Pacific fell 3.6 percent to HK$11.74. The carrier said it was considering ripping out some premium-class seats and installing more economy seating as the recession forces companies to slash their travel budgets. “We’re going to have to make fundamental changes to our business” if premium and cargo demand doesn’t return, Tony Tyler , the airline’s chief executive officer, said in a Bloomberg TV interview today. To contact the reporter for this story: Shani Raja in Sydney at sraja4@bloomberg.net .

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