worst

The Most Dangerous Cities In America

by on May 25, 2011

Huffington Post…

Yesterday, the FBI trumpeted the news that violent crime dropped 5.5% in 2010 while reported property crimes fell 2.8% during the depths of the worst economic slowdown since the Great Depression. The news, though, is far from positive.

Continued here:
The Most Dangerous Cities In America

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

Tagged as: , , , , , , , , , , , , ,

{ 0 comments }

Rich Tafel: Nudge the Market, Change the World

by on May 20, 2011

Huffington Post…

“It’s sort of the worst of times and the worst of times.” This quote from Irv Katz, president of the National Human Services Assembly, a coalition of nonprofit organizations, sums up the state of nonprofit organizations’ funding cuts in the public policy arena. Nonprofit organizations that survived the budget cuts in 2011 are now developing a new campaign to combat far deeper reductions in 2012. Even if these entities are successful in staving off the worst, it is clear that the familiar ways of doing business with the government are over. To continue aiding their constituencies, nonprofit organizations must reconsider the “old-style advocacy” type of government funding requests and take a more creative, long-term approach. This “new normal” in economic matters requires a new perspective. In Nudge: Improving Decisions About Health, Wealth, and Happiness , Cass Sunstein and Richard H. Thaler discuss the power of choice architects, who shape incentives to advance the public good. The government is the largest choice architect in citizens’ lives; it incentivizes and nudges people in thousands of different ways toward what it considers to be the public good. Should a person buy or rent a home? This decision is often based on government tax incentives for home ownership. Should one purchase a hybrid or conventional car? Tax write-offs and privileges such as using fast lanes on highway can make the hybrid a better choice. I put more money in my retirement account because I get a tax break for doing the responsible thing, although this action resulted from prodding by the government. When the government taxes cigarettes, smoking decreases and tax revenues increase, which is another example of government nudging. Government incentives can allow greater freedom of choice and, unlike government grants, do not require an annual public request for funds. Home mortgage deductions total about $100 billion each year and silently drive our housing market. But, imagine if individual homeowners were required to lobby the government every year to grant them a mortgage refund. Their chances of success would likely be zero. Because it’s a nudge through our tax system, we hardly notice this $100 billion annual payout. Nonprofit organizations seeking to improve the lives of the voiceless should pay attention to this psychology. The truth for nonprofit organizations is that neither philanthropic nor government grants can provide the sustainable funding solutions required to meet the needs of those they seek to serve. Their cause might be popular this year, but popularity among funders and government can vanish when the newest, hottest social entrepreneur comes onto the scene. To be successful in the new normal, nonprofit organizations need to become policy choice architects, for those they serve, by answering this question: “What government policy, if changed, would incentivize those we seek to serve to come to us?” Let’s look at a real-world case study of Shifting Gears , a career transition pubic-private program in Michigan, to see how this approach might play out. As Diana Wong , the program’s creator, summed up, “This new fiscal environment has made us re-think our advocacy strategy.” This public-private program has been getting grants from donors and the government. It offers a focused career-coaching program, placing white-collar workers in second stage growth companies that need new talent after working through entrepreneurial start up stage. They have an amazing success rate, with over 75% of all participants landing a well-paying job. However, they spend a huge amount of their time chasing government and foundation funding. Following this, they spend more time recruiting unemployed workers into the program. They are thinking of a new advocacy strategy by asking this powerful question: “What government policy could we change that would incentivize the unemployed to use our successful career transition model?” They decided the best policy nudge with the greatest impact is the unemployment check sent by the government. They promoted the idea of having state governments extend unemployment benefits to those who enroll in their programs. Under this scenario, all stakeholders win. Workers win because more than 75% of those enrolled get new jobs. Government wins because this transforms the unemployed into taxpayers and prevents the brain drain the state is facing. In addition, given the program’s success rate, only a small percentage of those who seek such an extension will likely ever use it. Nonprofit organizations win as well. Rather than focusing on expensive, time-consuming lobbying campaigns to get government and philanthropic support every year, these organizations’ leaders can spend less time on fundraising and marketing these programs and more time implementing them. Changing incentives makes all stakeholders winners, which is the goal of all successful advocacy efforts. Nonprofit advocates can begin by envisioning themselves as choice architects for lasting world change and asking this simple question: What public policy could we change in order to nudge the world? Rich Tafel is President of Public Squared , an organization based in Washington, DC, that is dedicated to training nonprofits for success in the public policy arena. Tafel is also a board member of Michigan Corps . -a local and global network of leaders advancing education and entrepreneurship across Michigan. His email is rich@thepublicsquared.com.

View post:
Rich Tafel: Nudge the Market, Change the World

Find our Weekly Commercial Real Estate, Private Equity and Fund Newsletters at www.WeeklyBrief.net

Tagged as: , , , , , , , , , , , ,

{ 0 comments }

Sony Begins Restoring PlayStation Network

May 15, 2011

Following a data breach that exposed the personal information of 100 million users and shut down access to the PlayStation Network for weeks, Sony has announced that access to the PlayStation network is being restored. Sony wrote in a blog posted Saturday evening that the process of restoring access to the network would begin in a select number of countries, then expand further, with all locations worldwide back online by the end of May. The Americas, Europe, Australia, New Zealand, and the Middle East will see their access restored first, while users in Japan and other Asian countries will be forced to wait longer. “While we understand the importance of getting our services back online, we did not rush to do so at the expense of extensively and aggressively testing our enhanced security measures. Our consumers’ safety remains our number one priority,” said Sony executive deputy president Kazuo Hirai in a video released by the company (see below). “We want to assure our customers that their personal information is being protected with some of the best security technologies available today, so that everyone can feel comfortable enjoying all that PlayStation Network and Qriocity services have to offer.” Some states in the U.S. are seeing their access to the PlayStation network restored earlier than others, and Sony has posted a map that it will update as additional locations go back online. The company says all U.S. users should be able to get back online within several hours. Sony requires PS3 users to update their firmware prior to going back online, and also recommends that users change their passwords. Technologizer notes that in terms of the potential loss of data and the downtime suffered by users, Sony’s PlayStation outage seems likely to rank among the worst ever. “Okay, it’s close to three weeks later. The PlayStation Network outage continues, it involves the leakage of personal data, and we don’t know when it’ll end. Anyone want to argue that it’s not the single worst fiasco of this type ever?” writes Technologizer. Though the network is — according to Sony — secure, it remains to be seen whether it can recover from the lengthy outage and data breach in order to retain its users and prevent them from defecting to competing services. “It’s hard to say what’s worse for gamers: this lengthy outage – one of the worst on record – or the compromise of their personal data,” notes ReadWriteWeb . “Either way, Sony will have a long road ahead to win back the trust of gamers, who have a wide variety of options for other console or handhelds games.” According to Reuters , “some users have said the prolonged outage has prompted them to switch to rival Microsoft’s Xbox Live games service.” “Please know that we are doing everything we can to fully restore network services around the world and to regain your trust over the days weeks and months to come,” said Hirai. According to Joystiq , the Sony services that will be up and running by May 31 include the following: Sign-in for PlayStation®Network and Qriocity services, including the resetting of passwords Restoration of online game-play across PS3 and PSP Playback rental video content, if within rental period, of PlayStation Network Video Delivery Service on PS3, PSP and MediaGo Music Unlimited powered by Qriocity, for current subscribers, on PS3 and PC Access to 3rd party services such as Netflix, Hulu, Vudu and MLB.tv ‘Friends’ category on PS3, including Friends List, Chat Functionality, Trophy Comparison, etc PlayStation Home WATCH:

Read the full article →

CMBS Delinquencies Reveal Fragility of the Recovery

May 12, 2011

After three consecutive months in which the U.S. CMBS delinquency rate showed signs of leveling off, the rate re-accelerated in April, according to Trepp LLC and Fitch Ratings. In February and March, the CMBS delinquency rate posted its smallest rates of increase since mid 2009. Those statistics, along with the view that CMBS lending was beginning to pick up steam, led many to believe that the worst was behind the CMBS market. In April, however…

Read the full article →

Pain at the Pump: ‘Been There, Done That’

May 12, 2011

U.S. gas prices have again climbed above $4-plus/gallon this spring, as they did for the first time ever in the summer of 2008 when the increase was accompanied by an outcry from shopping malls to distribution center operators. Perhaps because the commercial real estate industry has been through this before, the business outlook has been less ruffled. Or maybe it is because it just been through the worst recession in a lifetime and it is used…

Read the full article →

‘Squatter Rent’ Savings May Help U.S. Spending

May 6, 2011

Millions of Americans have more money to spend since they fell delinquent on their mortgages amid the worst housing collapse since the Great Depression. They are staying in their homes for free about a year and a half on average, buying time to restructure their finances and providing an unexpected support for consumer spending, which makes up about 70 percent of the economy.

Read the full article →

Abebe Aemro Selassie: Confessions of a Dismal Scientist — Africa’s Resilience

May 3, 2011

Like many economists, I tend to fear the worst. I have witnessed phenomenal changes for the better in sub-Saharan Africa over the past 20 odd years. Part of me still worries that this trajectory will not endure. But, the more I see of the region’s economic performance and outlook , the more I’m changing my tune. Old anxieties set aside Until my latest source for anxiety took hold a few months ago (more on this in a moment), I’d worried about the impact of the global financial crisis on sub-Saharan Africa. The crisis hit just as many countries in the region were starting to enjoy a hard-earned period of economic growth, their best since at least the 1970s. I did not want this to be derailed by the crisis. Previous global economic slowdowns were unkind to the region. While other regions tended to recover quickly, recoveries in sub-Saharan Africa tended to be more protracted, looking more U- or even L-shaped. So, in the face of the worst period for the global economy in two-generations, what chance did the still fragile economies have? However, it soon became clear that this time would be different. And in fact, my initial fears were unfounded. This time the region’s recovery has been more V-shaped. Credit for that goes, in large part, to policymakers in the region. Good macroeconomic policies in many more countries the years before the crisis put them in good stead to weather the crisis relatively well. This allowed them to adopt strong counter-cyclical monetary and fiscal policies. And, looking ahead, the recovery to pre-crisis growth rates is well underway in most countries. As we report in our latest Regional Economic Outlook , output in sub-Saharan Africa looks set to expand by around 5½ this year and 6 percent in 2012. To be sure, the crisis has caused considerable dislocation. The 1 million or so jobs lost in South Africa are a case in point. Elsewhere, progress towards the poverty reduction Millennium Development Goal has also been delayed. But it could also have been much worse. In the face of the largest shock to the global economy, many sub-Saharan African countries have shown surprising resilience. Tackling worries My latest worry is the recent sharp increase in food and fuel prices on world markets. When food prices spiked in 2008, there was a prompt and pronounced increase in local prices in most African countries. So far, this time, we have seen a more diverse picture. In a number of countries, strong harvests have helped in limiting increases in local food price. But, in many other countries, prices have started to increase sharply. This will be particularly harmful for the urban poor and landless rural households. The surge in fuel prices will also test the resilience that the region has exhibited in recent years. For the region’s 37 oil importing countries, it will imply higher oil import costs, and higher fiscal deficits where the pass-through of international price to domestic price is delayed. And, across the region, it will imply higher inflation. To help minimize the dislocation that this shock may entail, countries should consider a two-pronged policy response: Wherever food price increases are pronounced, governments should consider targeted interventions–providing the poorest families with transfers from the budget or, less directly, by subsidizing food items they consume. In the case of fuel prices, however, we recommend that local prices should adjust in line with international prices. Fuel price subsidies tend to be highly regressive–the bulk of the benefits go to the richest households–and very costly. So, once again, I might fear the worst. But, witnessing how countries handled the global financial crisis gives me hope–hope that the appropriate policies will be adopted and will be as effective this time too. And that gives this dismal scientist cause for optimism. From iMFdirect blog

Read the full article →

Good News: Corporate Relocations Up; Bad News: Fewer Employees Want To Go

April 28, 2011

Relocation managers across the U.S. are expressing optimism that the worst of the recession is now in the rearview mirror. Responding to Atlas Van Lines’ 44th annual Corporate Relocation Survey, 72% of the relocation managers polled say they believe their respective companies will fare better in 2011. The optimism rate among large firms surveyed (more than 5,000 workers) jumps to 80%. “Our relocation research has served as a solid barometer of…

Read the full article →

Shutdown: Economic Support Systems Would Continue, Even As Housing, Small Businesses Take Hits

April 8, 2011

If the federal government shuts down tonight, much of the apparatus that has helped prop up the faltering economy will remain in place. The Federal Reserve will continue its $600 billion asset-purchase program, buying government debt from Wall Street banks in an effort to get money flowing through the economy. The Treasury, which, as of late March, owned $142 billion of mortgage securities, will continue to sell that portfolio, as it works to earn a profit on the taxpayers’ investment. The New York Fed will continue selling the toxic securities it bought from AIG during the height of the financial crisis. Even if thousands of workers are furloughed, and struggling families miss government checks , these economic support systems will continue. “We got ourselves in a situation by letting banks become too big to fail, that they’re now basically sucking at the tit of the government,” said Mark Blyth, a professor of international political economy at Brown University. “If we let them go, we harm ourselves.” Two and a half years after the worst financial crisis since the Great Depression, the broader economy remains on fragile ground. The unemployment rate is close to nine percent. Home prices are still falling. As fighting continues in the Middle East, oil prices are rising, pushing up energy costs and tearing precious resources from the American economy. During the last major government shutdown, from late 1995 to early 1996, the economy was stronger. Then, as now, the country was emerging from a recession. But at that point, the recovery was being felt throughout the broader economy. The unemployment rate was 5.6 percent. Nothing like today’s economic support system was in place back then. “The apparatus wasn’t in place because it wasn’t necessary,” said Gus Faucher, director of macroeconomics at Moody’s Analytics. A shutdown now would come at a time when the economy is relying on government support to a historic degree. Since the recent financial crisis, government programs have helped promote a recovery. But the progress has been uneven. Flush with the taxpayer bailout and confident in explicit and implicit government guarantees, big banks have seen their revenues and profits skyrocket. Pay at Wall Street firms last year hit a new record, while wages for middle class Americans stagnated. Since the Fed launched a second so-called “quantitative easing” program late last year, the central bank’s New York branch has been buying U.S. government debt from big banks, allowing those firms to reap easy profits. The policy is designed to lower interest rates throughout the economy in order to stimulate a broader recovery. The Federal Reserve, which relies on separate funding, would not be affected by a shutdown of the federal government. Similarly, the Treasury holds a massive portfolio of mortgage-backed securities, which it bought during the worst of the crisis in an effort to calm markets. It began the process of selling this $142 billion portfolio last month. Those operations will continue if the government shuts down, a Treasury spokesperson confirmed on Thursday. But other economic programs that aren’t explicitly tied to the current slump would halt. The Federal Housing Administration, which insures and guarantees nearly a third of U.S. mortgages, would stop its operations, potentially causing further slowdowns in the housing market. Since spring is normally peak home-buying season, the shutdown could present a further obstacle to an already weakened sector of the economy. Without the government insuring mortgages, some mortgage issuance will likely stop. JPMorgan Chase plans to stop making new FHA loans in the event of a shutdown, The New York Times reported. “This is the worst time that we could introduce that uncertainty into this fragile housing market,” Housing Secretary Shaun Donovan told a Senate subcommittee on Thursday. Small businesses, too, could suffer. The Small Business Association would stop approving applications for loan guarantees and direct loans to small businesses, potentially hampering these businesses’ growth. Small businesses pay 44 percent of the nation’s private payroll, according to the SBA. “We will continue to do our part, we just won’t be able to close loans,” said Dave Rader, head of SBA lending at Wells Fargo. A shutdown, he added, would hamper the bank’s ability to “provide access to capital for small business borrowers.” If the shutdown drags on for more than a few weeks, it could wither Americans’ confidence enough to provoke a relapse into recession , Mark Zandi, chief economist at Moody’s Analytics, said last week. But the real danger, experts say, is if the gridlock in Congress infects the debate on whether to raise the federal debt limit . The government must borrow money to finance its existing debt and other obligations. It will hit its ceiling in mid-May, Treasury Secretary Tim Geithner said this week before a Senate subcommittee. If the government were to default, U.S. interest rates would likely rise, potentially touching off an economic crisis that could send panic around the globe. “This is a symbolic exercise we’re going through,” said Robert Shapiro, a fellow at the Georgetown Center for Business and Public Policy and a former U.S. Under Secretary of Commerce for Economic Affairs. “If it goes a month, that means you’ve got much more serious problems. You’ve got problems with real political gridlock, at a real fundamental level. That begins to really worry markets.” Nathaniel Cahners Hindman contributed to this report.

Read the full article →

Even Jamie Dimon’s Not Immune to Brutal Real Estate Market

April 8, 2011

Among Jamie Dimon ’s many obvious talents, flipping real estate appears not to be one of them. The well-regarded chief executive of banking powerhouse JPMorganChase (NYSE:JPM) received $421,000 in moving expenses in 2010, as part of an overall compensation package of $20.8 million, according to a Securities and Exchange Commission filing. Those moving expenses were apparently tied to the sale of Dimon’s Chicago mansion last September, fully three years after he put the 13,500-square-foot, eight-bedroom, nine-bathroom home on the market and not until the asking price had been slashed by nearly 50%. Originally placed on the market at $13.5 million in April 2007, it sold last fall for $6.95 million. “That was a price point that the buyer found rather attractive,” said Fran Bailey, a Chicago–based real estate broker and blogger, who noted that it didn’t last long on the market at that amount. The four-story home, located on Chicago’s tony Gold Coast a block from Lake Michigan, was built around 1880 but has been renovated over the years to meet the most stringent requirements of a top-tier corporate executive, including a state of the art gym and media center. A slide show put together by selling agent Sudler Sotheby’s International Realty reveals an interior reminiscent of a palace at Versailles. Don’t worry, though. Dimon didn’t lose money on the deal. According to numerous accounts in the Chicago media, he paid $4.68 million for the home in 2000 when he moved his family to the Windy City to take the top job at Bank One Corp. He evidently decided to sell and return to New York City after Bank One merged with JPMorgan in 2004 and he was named CEO of the combined firm. Dimon is credited with guiding JPMorgan relatively unscathed through the worst financial crisis since the Great Depression. After accepting $25 billion in government funds during the worst of the crisis, JPMorgan was one of the first big banks to fully repay its bailout loan. Dimon has often been mentioned as a candidate for a high-level government appointment — possibly Treasury Secretary — but has recently been at odds with the Obama administration over the scope and reach of financial reforms intended to prevent another crisis. In any case, the $20.8 million he made in 2010 was a big jump from the $1.3 million he took home in 2009. He’ll probably want to keep his day job as a banker in lieu of going into real estate full-time.

Read the full article →

Banks Still Adding Jobs In London, Despite Taxes

March 23, 2011

Investment banks in Europe’s financial capital are adding jobs, helping to bolster headcounts at law and accounting firms across London, as the rest of Britain struggles to recover from the worst economic contraction since the 1930s. Chancellor of the Exchequer George Osborne, who delivers his budget today, has little alternative except to do all he can to keep companies such as Barclays Plc (BARC) and HSBC Holdings Plc (HSBA) from leaving London.

Read the full article →

The Consumerist Returns For Another Year Of ‘The Worst Company In America’ Contest

March 14, 2011

Hey everyone, it’s March Madness time! You know what that means, right? First of all, it’s the time of year where you loathe yourself for picking Duke, Ohio State, Notre Dame and BYU for your Final Four pool. Because, what? That’s crazy . Happily, it’s also a time where you can work out all of your frustrations with corporate America, as the good people at The Consumerist have once again rolled out their perennial March feature, the Worst Company In America brackets , now in its sixth year. Consumerist reports that this year was the best year ever for user submissions — thousands of companies were nominated, but only 32 were selected. Six slots were taken by banks, including bailout babies Bank of America, Citigroup, Wells Fargo and Chase. Reigning champion Comcast is also back in the mix, and your health care industry is well represented by United Health Group and Wellpoint. (One preexisting condition is that they will face one another in the first round.) Consumerist highlights some newcomers, including one very obvious one: Among the businesses new to this year’s tournament is BP, whose public image was tainted by its troubles in the Gulf of Mexico. And then there’s newcomer Johnson & Johnson, whose McNeill division must have set some kind of record for the sheer number and variety of brands recalled from store shelves in a single year. Voting begins tomorrow, so be sure to get in on the action. And, as always, it is recommended that you make The Consumerist one of your daily reads . Their self-described mission is to “highlight the persistent, shameless gaffes of modern consumerism – and the latest scams, rip-offs, hot deals and freebies.” And if you ever find yourself getting ground up in the gears of “modern consumerism,” their contributors — and their readership — can be your saving grace. RELATED: Here’s Your Lineup For Worst Company In America 2011! [The Consumerist] [Would you like to follow me on Twitter ? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here .]

Read the full article →

Jodie Levin-Epstein: Don’t Cut Off Your Knows

March 7, 2011

Federal Reserve Chairman Ben Bernanke knows it. Education and training are central to our nation’s economic competitiveness. In fact, he recently urged that budget deliberations recognize the benefits of programs that equip workers with needed skills — even when we must grapple with difficult decisions around balancing state and federal budgets. But House leadership is taking action that will cut off our nose to spite our face. The House-passed Continuing Resolution, which would fund the government through the remainder of FY 2011, includes drastic cuts to adult, dislocated worker and youth programs under the Workforce Investment Act (WIA). These cuts would sharply reduce or eliminate funding for summer jobs for youth, job and training assistance for unemployed and underemployed workers, and support for one-stop career centers. Chopping job training programs is counterproductive to an effective recovery, especially at a time when the number of unemployed and underemployed is at historically high levels and nearly 14 million people are struggling to find work. Dislocated workers and other unemployed and underemployed workers benefit from WIA by gaining valuable skills. In fact, during the worst of the economic recession in 2008 and 2009 more than two-thirds of adults and three-quarters of dislocated workers who completed training programs found jobs, according to the U.S. Department of Labor. In a new CLASP report , workforce development policy experts Neil Ridley and Evelyn Ganzglass look specifically at how the WIA Adult program in three states responded to the urgency of the Great Recession. In good economic times, a major barrier to upgrading skills is “opportunity cost” — or what economists describe as the trade-off between spending time in training and at work. During the recession, however, jobs were scarce and the opportunity cost of education and training was low, making it an ideal time for many unemployed and low-income adults to build skills and earn credentials. Even though unemployment has declined in recent months, it’s still significantly higher than it was before the start of the recession. Further, given the skills/jobs mismatch that many economists have noted, now is the worst possible time to cut investment in workforce development programs. Many signs point to a long road to pre-recession unemployment rates. Workforce programs are helping by providing opportunities for the unemployed and underemployed to prepare for jobs once the economy fully recovers. They help employers by providing workers with the skills to compete. Cutting jobs and training just doesn’t add up, and it’s hardly the way to out-compete the rest of the world in a changing global economy that increasingly relies on what a workforce knows and the skills it possesses. On its face, these facts should move Congress to act on what we know: that training our workers is fundamental to recovery and future competitiveness.

Read the full article →

Bernanke: I’d Defend Financial Crisis Decision To My ‘Deathbed’

February 15, 2011

“I will maintain to my deathbed, that we made every effort to save Lehman, but we were just unable to do so because of a lack of legal authority,” Bernanke said, referring to the 2008 failure that intensified a crisis that Bernanke said was the worst in history, according to an 89-page transcript of the interview by the Financial Crisis Inquiry Commission.

Read the full article →

Bouncing Hard Along the Bottom: Bankers’ Eye View of CRE

January 27, 2011

The nation’s banks, while still clearly unenthusiastic about commercial real estate, are finally acknowledging that CRE markets have hit a hard rocky bottom. A handful even says they are re-loaded and ready to resume lending. That is largely the view expressed in fourth quarter bank earnings statements and conference calls, including the nation’s nine largest banks. While their comments anecdotally substantiate that the worst of the recession for…

Read the full article →

Andrew Sum: Ringing Out the Lost Economic Decade of 2000-2010: Part Two

January 7, 2011

The long lasting economic troubles experienced by the Japanese economy in the 1990s have frequently been referred to by economists as the Lost Decade. In our previous blog, we argued that the past decade (2000-2010) was in many respects a “lost decade” for our nation’s economy. The performance of the U.S. economy in producing additional real output (GDP), new payroll employment opportunities, or any employment for workers (16+) over the past decade was the worst in the past 70 years. Total payroll employment in 2010 was below its level in 2000 for the first time since the Great Depression. These declining labor market opportunities for the vast majority of workers also were accompanied by very weak performance in raising the real weekly earnings of most employed workers, increasing real household income, or reducing poverty problems. There was, however, one area in which the U.S. economy performed well over the past decade. That area was the sharp gain in labor productivity in the nonfarm business sector of the economy. Between 2000 and 2010 (through the 3rd quarter), real output per hour of work in the nonfarm business sector increased by slightly more than 29%, its best record since the decade of the 1960s. Normally, this sharp gain in labor productivity would have been expected to substantially improve the real weekly earnings of many American workers. Unfortunately, this was not the case. A combination of very slack conditions in labor markets, especially at the beginning and end of the decade, increased international competition, and a declining union bargaining presence kept the increases in hourly and weekly earnings well below the strong gain in labor productivity. The median real weekly earnings of the nation’s full-time wage and salary workers rose by only slightly more than 2% over the decade. Among males, the increase in median real weekly earnings was only a little more than 1% while women’s weekly earnings rose more strongly by 7% over the decade. The youngest workers (those under 25 years of age) fared the worst, experiencing a three per cent decline in their median weekly earnings while 25-34 year olds’ and 45-54 year olds’ weekly earnings remained flat, and older workers (55+) gained 11%. The mean weekly earnings of the nation’s nearly 90 million private sector, production and non-supervisory workers increased by only 4% over the decade. In contrast, corporate profits (before tax) increased in real terms (in constant 1999 dollars) by $470 billion or 58%. The growth in the level of these pre-tax corporate profits was about five times higher than the total growth in the annual pre-tax earnings of the nation’s nearly 90 million production and non-supervisory workers. The declines in payroll employment, the steep rise in unemployment and underemployment, and limited wage gains for those in the bottom and middle of the weekly wage distribution helped push down the real annual incomes of nearly all U.S. households. The median real annual income of U.S. households declined over the decade by $2,600 or 5%. This was the first time since the end of World War II that median household income failed to grow over an entire decade. Real annual incomes of U.S. households fell all along the distribution from top to bottom; however, the relative sizes of these income losses were largest at the bottom and middle of the distribution. The real income of those at the 10th percentile fell by close to 10 per cent, those in the middle of the distribution by 5 per cent, and those at the near top of the distribution (90th and 95th percentiles) by only one per cent. These divergent trends in annual income losses generated an increase in the degree of inequality in the household income distribution of the nation. The share of aggregate household income captured by the top quintile increased over the decade, rising above 50% by 2001 and hitting 50.4% by the end of the decade (in 2009). Every other group’s share of the income pie declined over the decade. In 2009, the most affluent one-fifth of households received more income than the bottom 80 per cent of households combined. In his 1937 Inaugural Address to the nation, then President Franklin Roosevelt exclaimed that, “The test of our progress is not whether we add more to the abundance of those who have too much; it is whether we provide enough for those who have too little.” The economic results for the past decade clearly indicate that we have failed this test. The combination of declining real household incomes and a worsening degree of inequality combined to push up the incidence of official poverty problems by the end of the decade. In 2009, the overall poverty rate of the nation had increased to 14.3%, the highest person poverty rate since 1994. All of the increase in poverty problems took place among the nation’s non-elderly population under age 65, with the youngest members faring the worst. More than 1 of every 5 children under age 18 were living in poverty, with more than 38% of children in the nation’s youngest families (head under 30) being poor in that year. Among the nation’s 18-64 year olds, 13% were poor, the highest such poverty rate among this age group since the early years of the 1960s. The War on Poverty was being lost in the Lost Decade. One can only hope that this outcome will not be repeated in the new decade. But as Jose Saramago noted in The Double (2007), “It is a well known fact that no human being can live solely on hope”. Andrew Sum and Joseph McLaughlin, Center for Labor Market Studies, Northeastern University.

Read the full article →

FOREX CENTRAL BANK WATCH: RBA Interest Rate Expectations Dip on Worst Floods in 50 Years

January 5, 2011

FOREX CENTRAL BANK WATCH: RBA Interest Rate Expectations Dip on Worst Floods in 50 Years

Read the full article →

Video: Fabian Expects Muni Bond Issuance to Decline in 2011

December 29, 2010

Dec. 29 (Bloomberg) — Matt Fabian, managing director of Municipal Market Advisors, talks about the outlook for the U.S. municipal bond market in 2011. Tax-exempt muni bonds are heading for their worst quarterly performance in more than 16 years as yields soared amid a U.S. Treasury selloff and the looming expiration of Build America Bonds. Fabian speaks with Julie Hyman on Bloomberg Television’s “Bottom Line.” (Source: Bloomberg)

Read the full article →

The 10 Worst Predictions For 2010

December 25, 2010

If 2010 taught us anything, it’s that few people are able to accurately predict even the simplest events in the near-term future, let alone the big ones. From the price of gold, to unemployment, to Google Wave, prognosticators got more than a few major items wrong in their predictions lists. Here, in no particular order, are “ten for ten” — 10 of the worst predictions of 2010.

Read the full article →

Dave Johnson: Corporations Don’t Do Bad Things, People Do!

December 23, 2010

Are there “good” companies and “bad” companies? No, there are just companies, and companies don’t have moral characteristics any more than a chair does. Here is something to understand about the things companies “do.” If we LET a company “do” something, all companies HAVE TO do it. The misunderstanding of deregulation is that anything that CAN be done WILL be done. Anything. E. J. Dionne Jr., in Even progressives need CEOs writes that it is, … important to recognize that there is no single business class or corporate model. Obama doesn’t need to coddle CEOs so they will say warm things about him at parties in the Hamptons. He should figure out which parts of the private sector share an interest in reducing the dreadful inequalities that have metastasized over nearly four decades and in creating an economy that produces well-paying jobs. [. . .] Government policies, no matter how often we use the words “free enterprise,” through design or inadvertence, inevitably affect the private economy. Why not choose policies that specifically encourage sectors that create good jobs for Americans? The piece is well-worth reading because it points out that there are plenty of great business leaders who want to help the country address our problems and do better for our people. Mostly we hear today about the worst kind of self-interested, greed-driven business leaders because those seem to be the ones calling the shots for our economy and our political system. This is because we let the them get away with being the worst, so they rise to the top. We need strong regulations and tough laws so the good CEOs can do the right thing, and still remain competitive. Corporations Are A Good Idea Last year in Why I Am Pro-Corporate , I wrote about why corporations are a good thing The things that the corporate legal structure enables people to do are good for society. This is why We, the People decided to enact the laws that created corporations. If we want to be able to accomplish things on a large scale, like build a railroad or airports and airplanes or skyscrapers – or solar power plants to replace coal power plants – we want to enable people to more easily raise the necessary capital and amass the resources needed to get the job done. The legal structure of the corporate form of a business accomplishes this. Corporations are just an idea. They are just a bundle of contracts. They don’t do things, people do. Do Companies “Do”? Do They “Want”? It is the business leaders, not the companies, who make decisions and want things and do things. Companies are just things that don’t “want” any more than they “do.” They don’t “think.” They don’t “decide.” They don’t “respond.” Sentient entities want and do. It is the people who make decisions want and do things. Companies are not sentient entities any more than chairs are. And how we think about this affects the conclusions we reach. One reason we apply these characteristics to companies is because they want us to. (“They want.” There I go do it, too.) When the people who do marketing for companies (is that better?) try to make us think about companies this way, it is called “branding.” They try to make us believe that a company is somehow a sentient entity because then we can think they “are good or bad” and therefore form emotional attachments that cause us to be influenced into buying their products. This is really just a manipulation and a distraction but it affects our brains. It is so important to realize that we are dealing with individual people who run companies because then we can think clearly about how to deal with the problems that they cause. We have to understand the system, and what we are dealing with. We are dealing with people who run companies, not with companies. You can’t be “pro-business” or “anti-business” because business just is . But you can require that people do the right thing. We Need Very Strong Regulations And Tough Laws When we complain about Wal-Mart “doing” something we are misunderstanding the system. The people who run Wal-Mart will do what we don’t stop them from doing. They have to . They don’t necessarily want to. (Though some do.) That is what the system is. We set down rules, and they follow the rules. If something is not against a rule, then they don’t just do whatever it is, they have to . And if they do something that is against the rules but we let them get away with it, then they will continue and others will start doing that, too. Here is why: If Wal-Mart doesn’t then (the executives who run) Target or KMart or another company will, and then Target or KMart will have a competitive advantage, and after a while we’ll all be complaining about Target or KMart instead because Wal-Mart won’t be in the picture. They have to do everything we let them do. That is how the system works, and that is why we have to have strong regulations and tough law. Instead of complaining about the things the business leaders do, we have to make strong regulations and tough laws to stop them and we have to enforce them . Period. We, the People have to use government “interference” and use force and that is our job and our responsibility to each other and to all of the business leaders who want to do the right thing . It Is Not Fair To The Good, Responsible Leaders Not To Let’s say you are running Wal-Mart and you want to pay people more and want to provide good benefits. But the law does not require you to. If you do these things anyway, and your competitor doesn’t, you are putting your company at a disadvantage, and you are risking the livelihood of everyone in the company . Think about the conflict and pressure that creates in good people who want to do good things. They can’t do good things unless we make all the businesses do good things. Companies are forced by competitive pressure to do the things other companies do, whether they “want” to or not. There isn’t really a middle ground. Our system of competition forces companies to do everything they can get away with, and they will do that, and the only thing that will stop them is We, the People actually stopping them. So don’t complain about things companies are doing, and certainly don’t blame the companies. What do you have to do is change the rules. It just isn’t fair to good people who want to do good things to do anything else. We have been letting good people down by listening to and doing the bidding of the likes of the Chamber of Commerce and the others who are fronts for the worst among the business community, who are working to corrupt our business environment and our politics. Most Business Leaders Are Good People Almost all corporate leaders are good, responsible and well-intentioned. For this reason they want and need clear rules that let them operate their companies responsibly. This is why listening to the greedheads who are always complaining about government and regulations is such a mistake. Most business leaders want to do the right thing and good, strong regulations and laws that are enforced let them do that. The deregulation and lack of enforcement that we see all around us today forces them to do wrong things in the name of staying competitive. When you initially deregulate, good corporate leaders will try to be responsible and they will have every intent of doing so. They will live up to their promises. But along will come other corporate leaders who just want to make money for their companies,and more to the point, for themselves. They will do whatever we let them do to accomplish that. They will push up to and a bit beyond the exact wording of what they think they can get away with. The “good” CEOs will be at a disadvantage and will be forced to do the same. Clear And Strong Regulations When I ran a company I had a rule for agreements – get everything on paper and signed because the people talking about things today on both sides might get in a car wreck, or move to another company or forget or whatever and all that is left is the agreement and not the intent of the agreement. Similarly, we need to clearly lay out every little part of what can and cannot be done because that is what people will do in the end. Business leaders want and need a clear playing field with rules that are strong enough to enable them to do the right thing and remain competitive. Let’s help them out. This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture . I am a Fellow with CAF. Sign up here for the CAF daily summary .

Read the full article →

FOREX: Dollar Suffers its Worst Decline in Six Weeks as Risk Appetite Swells and the Euro Catches a Break

December 2, 2010

FOREX: Dollar Suffers its Worst Decline in Six Weeks as Risk Appetite Swells and the Euro Catches a Break

Read the full article →

Home Sales Up In September, But More Troubles Ahead

October 25, 2010

WASHINGTON — Sales of previously occupied homes rose last month after the worst summer for the housing market in more than a decade. And fears over flawed foreclosure documents could keep buyers on the sidelines in the final months of the year. Sales grew 10 percent in September to a seasonally adjusted annual rate of 4.53 million, the National Association of Realtors said Monday. Home sales have declined 37.5 percent from their peak annual rate of 7.25 million in September 2005. They have risen from July’s rate of 3.84 million, which was the lowest in 15 years. Most experts expect roughly 5 million homes to be sold through the entire year. That would be in line with last year’s totals and just above sales for 2008, the worst since 1997. Still, sales could fall further if potential lawsuits from former homeowners claiming that banks made errors when seizing their homes make consumers fearful of buying foreclosed properties. The Federal Reserve on Monday become the latest government regulator to announce it would be looking into whether mortgage companies cut corners on their own procedures when seizing homes. Chairman Ben Bernanke said the Fed would look intensively to see if policies, procedures or internal controls led lenders to improperly foreclosure on homeowners. Preliminary results of an in-depth report are expected to be released next month. “We take violation of proper procedures very seriously,” Bernanke said. In a survey taken by the Realtors group this month, about 23 percent of the 2,000 agents surveyed said they have a client who is no longer interested in purchasing a foreclosed property due to the foreclosure-document mess. “You’re going to see uncertainty on the part of homebuyers,” said Quinn Eddins, director of research at Radar Logic Inc., which tracks the housing market. Mortgage applications to purchase homes last week were 29 percent below the same week a year ago, according to the Mortgage Bankers Association. At that time, buyers were rushing to purchase homes to qualify for federal tax credits. Last month the inventory of unsold homes on the market fell about 2 percent to 4 million. That’s a 10.8 month supply at the current sales pace. It compares with a healthy level of about six months. Dubious mortgage practices and lax lending standards were blamed for contributing to a housing bubble that eventually burst and thrust the economy from 2007-2009 into the worst recession since the 1930s. Many Americans took out home loans that they didn’t understand and bought homes that they couldn’t afford. As a result, foreclosures have soared to record highs. It’s one of the negative forces restraining the economy’s ability to get back on sounder footing. Now more than 20 percent of borrowers owe more than their home is worth, and an additional 33 percent have equity cushions of 10 percent or less, putting them at risk should house prices decline much further, Bernanke said. “With housing markets still weak, high levels of mortgage distress may well persist for some time to come,” Bernanke warned.

Read the full article →

Robert Sutton: Bad Boss: 14 Horror Stories About The World’s Worst Bosses From The Author Of ‘Good Boss, Bad Boss’ (PHOTOS)

October 22, 2010

The best bosses are competent at the work they oversee and are in tune with what it feels like to work for them — that’s a central theme in my new book, “Good Boss, Bad Boss.” I show how the best bosses know when to push their people to work harder, when to praise versus criticize their people, and when the best management is no management at all. They are seen as in charge, but have the wisdom to listen to their people closely and to encourage them challenge the boss’s ideas in civilized and instructive ways. They treat their people with dignity and respect, and serve as “human shields,” who protecting their charges harm, distraction, and idiots and idiocy of every stripe. The good news is that, although no boss is perfect, a recent national survey found that 80% of employees feel respected by their bosses and believe their bosses value their work. But there is also strong evidence that the clueless and incompetent minority does massive damage to employee’s mental and physical health – a longitudinal study of Swedish workers found that those with crummy bosses had a 39% percent greater chance of having a heart attack than those with good bosses. And the evidence that bad bosses hamper productivity keeps growing: a recent survey by University Florida researchers found that people with abusive bosses more likely to arrive late, do less work, and to take days off when they aren’t sick. The hallmark of the worst bosses is that they suffer from power poisoning : They focus on satisfying their own needs and wants, devote little or no attention to the needs and wants of their followers, and they act like the rules don’t apply to them. This cluelessness manifests itself in many ways; for example, one study showed that people in power were more likely to grab more cookies and to eat like pigs. To give Huffington Post readers a sense of the horrific actions of the worst bosses and, to entertain you a bit too, I put out a call on my blog Work Matters for stories about “clueless and comical bosses.” Between comments on the blog and emails from readers, I received approximately about 200 examples; although many were funny, some were just plain sick and even downright cruel. Here are the 14 worst: I would love to hear more stories about clueless bosses from The Huffington Post readers — as well as tips and stories about how bosses can avoid living a fool’s paradise and, instead, stay in tune with what it feels like to work for them. Again, the following stories featured in the slide show were submitted by readers — some are ridiculous, some are scary and some might be downright offensive. But hopefully all are instructive.

Read the full article →

Foreclosure Problems Creating ‘Seismic Legal Clash’ Across The Country

October 21, 2010

That clash — expected to be played out in courtrooms across the country and scrutinized by law enforcement officials investigating possible wrongdoing by big lenders — leaped to the forefront of the mortgage crisis this week as big lenders began lifting their freezes on foreclosures and insisted the worst was behind them. Federal officials meeting in Washington on Wednesday indicated that a government review of the problems would not be complete until the end of the year.

Read the full article →

9 Companies Cashing In On Our Doomsday Fears (PHOTOS)

October 5, 2010

These days the apocalypse is a profitable business. There’s no shortage of companies marketing to our worst fears — whether they be a nuclear doomsday, a massive food shortage or even a return to the gold standard. In fact, as Zero Hedge noted today, Costco now sells a product called THRIVE, which includes full-year’s supply of canned food, or 5,011 servings, if you’re counting. For the bargain shopper planing for the end of the world, we’ve compiled some of the more prominent products and companies that are catering to your apocalyptic needs. Check them out below: (Ron Wilson contributed to this piece.)

Read the full article →

Green Premium Continues to Justify Implementation Costs for Building Owners

September 22, 2010

The economic payback for building owners from ‘going green’ has been tested in the crucible of the worst economy since the Great Depression, and while the premiums in rental rates, faster lease-up times and lower vacancy associated with green buildings…

Read the full article →

Video: Europe Debt Crisis Ebbs as Traders See Spreads Narrow: Video

September 20, 2010

Sept. 20 (Bloomberg) — Four months after a European Union-led bailout, Germany’s biggest bond dealers say the worst is over for the region’s most-indebted nations. Bloomberg’s Sara Eisen reports. (Source: Bloomberg)

Read the full article →

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.

Read the full article →

Dan Solin: An Investment Strategy for the Next Depression

August 31, 2010

You can’t avoid the predictions of the “inevitable” depression. There’s plenty of ammunition to support them, including a slower than anticipated economic recovery, high unemployment, record foreclosures, declining housing prices and the prospect of runaway inflation (or deflation). Every day I get calls from investors who are absolutely certain we are headed for a depression. They want to know if I agree and what they should do to prepare. I have no idea whether we are headed for a depression or a recovery. Neither do those who make predictions so confidently. In 1987, one of the bestselling books was The Great Depression of 1990 , by Ravi Batra. In 1929, Irving Fisher, Professor of Economics at Yale University, famously stated: “Stocks have reached what looks like a permanently high plateau.” Jim Cramer told his viewers shortly before Bear Stearns filed for bankruptcy: “Bear Stearns is fine.” Hank Paulson advised us on May 7, 2008 that “The worst is likely to be behind us.” My personal favorite comes from financial expert Donald Luskin. On September 14, 2008 he wrote an article in the Washington Post stating “…anyone who says we’re in a recession, or heading into one — especially the worst one since the Great Depression — is making up his own private definition of “recession.” And probably for his own political purposes.” But I digress. Let’s assume we are headed for a depression. How would it affect your investments and your investment strategy? The best data we have relates to the Great Depression of 1929. I looked at the worst rolling periods during that time to see how different portfolios were affected. The time period I selected was July 1, 1929 to June 30, 1932. A globally diversified portfolio consisting 100% of stocks lost more than 87% of its value. Ouch! At the other extreme, a portfolio consisting 100% of bonds had a positive return of more than 8%. Before you rush out and buy bonds, you should focus on basic principles of asset allocation. I would not permit my clients to invest in an all stock portfolio unless they confirmed they had a time horizon of at least fifteen years before they would need 20% or more of their invested funds. When I extend the end date from June 30, 1932 to June 30, 1944, the total return on the all stock portfolio is more than 23%. Investors are focused on the wrong issue. The critical question is not: Will there be a depression? That’s a question no one can reliably answer. The financial media has an interest in making dire predictions because fear means more readers and viewers and that translates into advertising dollars. The real question is: Am I in the right asset allocation? The focus on asset allocation is the same whether you are investing for a depression or a recovery. Here are some general guidelines: If your time horizon is less than 5 years, you should have no exposure to stock market risk; If your time horizon is 8 years, you should have no more than a 60% exposure to stock market risk; If your time horizon is 15 years or longer, you can have a 100% exposure to stock market risk (but I would still encourage you to have at least 10% of your portfolio in bonds). On average, an asset allocation of 60% stocks and 40% bonds is suitable for most investors. Historical data tells us those who had the right asset allocation and didn’t panic withstood the ravages of the Great Depression. Unfortunately, historical data is not necessarily predictive, but it’s far more reliable than the musings of “financial astrologers”. The views set forth in this blog are the opinions of the author alone and may not represent the views of any firm or entity with whom he is affiliated. The data, information, and content on this blog are for information, education, and non-commercial purposes only. Returns from index funds do not represent the performance of any investment advisory firm. The information on this blog does not involve the rendering of personalized investment advice and is limited to the dissemination of opinions on investing. No reader should construe these opinions as an offer of advisory services. Readers who require investment advice should retain the services of a competent investment professional. The information on this blog is not an offer to buy or sell, or a solicitation of any offer to buy or sell any securities or class of securities mentioned herein. Furthermore, the information on this blog should not be construed as an offer of advisory services. Please note that the author does not recommend specific securities nor is he responsible for comments made by persons posting on this blog. Here is the trailer for my new book, Timeless Investment Advice .

Read the full article →

September Stock Slump Coming? Investors Brace For A Traditionally Bad Month

August 31, 2010

CHICAGO — The economy is weakening, home sales are plunging and stocks are on a long slide. Now comes something even scarier for investors – the beginning of what is traditionally the worst month in the market. Could stocks be headed for another September swoon? “If history is any guide, for it’s never gospel, we may be in for another rough ride,” says Sam Stovall, chief investment strategist at Standard & Poor’s. Mutual fund managers tend to clean house after Labor Day, taking profits on winning stocks and weeding out portfolios before putting out the rosiest possible end-of-quarter reports for their clients. Workers coming back from summer breaks are also inclined to sell stocks as they get their financial affairs in order. Any festering issues with the economy or stocks during the summer, when trading volume is light, tend to get put off until fall. The result: September is usually a dog of a month for the market. It typically starts with solid market increases, then tails off, says Jeffrey Hirsch, editor-in-chief of the Stock Trader’s Almanac. “There’s just a general selling bias in the month of September,” he says. Four times in the past decade alone, the S&P 500 shed at least 5 percent in September. The average September decline since 1950 is 0.6 percent, according to the Stock Trader’s Almanac. February is the next worst, with an average 0.2 percent loss, and December and November are the best, averaging 1.6 percent gains. Of course, investors haven’t forgotten that the financial world collapsed in September just two years ago. And the Sept. 11 attacks, which delivered a devastating blow to the stock market, remain a painful memory. This year, there’s a lot to frown about. The S&P 500 index is down 14 percent from its high in April, and was down 5 percent for the month of August. Stocks have fallen because the economic recovery is faltering. The economy has slowed to anemic growth, home sales the last three months are the worst on record, consumer spending is lackluster and unemployment is stuck near 10 percent. The slew of weak economic data sapped the market of what little midsummer momentum it had and further shook the confidence of already wary investors. “I don’t think it would take a whole lot to get investors to start selling and consumers to start pulling back again,” says Mark Zandi, chief economist at Moody’s Economy.com. “The collective psyche is on edge.” Federal Reserve Chairman Ben Bernanke said last week that the central bank is ready to take additional steps to boost the economy, including buying more debt or mortgage securities in order to keep interest rates low. But with the benchmark interest rate already near zero, any Fed action is unlikely to provide the oomph of past measures. Congress doesn’t appear to have an appetite for another stimulus package. Also hanging over the market is an air of heightened uncertainty because the November elections will determine which party controls Congress for the next two years. The S&P 500 has declined an average 1.7 percent in the September before midterm elections since 1930. Not that September isn’t bad enough already without all of this year’s baggage. It’s one of only three months, along with February and June, when stock prices typically decline. The uncertainty is a serious consideration for financial advisers such as Dominick Vetrano of Fountainhead Financial in Chicago. He holds off putting more money into stocks beginning in August, even though he thinks the September market dips are usually psychological. “There is little to gain by investing right before September and a lot to lose, so why risk it?” he says. “The September effect is well-documented.” Some experienced market participants, however, dismiss the significance of the trend and say it would be a mistake to try to time market decisions based on seasonal data from past years. Investors ultimately should be guided by the financial health of the companies they’re considering investing in. Hirsch, the market historian, agrees that history shouldn’t guide investing alone. After all, the S&P 500 advanced 4 percent last September. But he maintains that the numbers are too meaningful to dismiss entirely. “You should have a general idea of what the market’s rhythm and tendencies are,” he says. “And you respond accordingly.”

Read the full article →

September Stock Slump Coming? Investors Brace For A Traditionally Bad Month

August 31, 2010

CHICAGO — The economy is weakening, home sales are plunging and stocks are on a long slide. Now comes something even scarier for investors – the beginning of what is traditionally the worst month in the market. Could stocks be headed for another September swoon? “If history is any guide, for it’s never gospel, we may be in for another rough ride,” says Sam Stovall, chief investment strategist at Standard & Poor’s. Mutual fund managers tend to clean house after Labor Day, taking profits on winning stocks and weeding out portfolios before putting out the rosiest possible end-of-quarter reports for their clients. Workers coming back from summer breaks are also inclined to sell stocks as they get their financial affairs in order. Any festering issues with the economy or stocks during the summer, when trading volume is light, tend to get put off until fall. The result: September is usually a dog of a month for the market. It typically starts with solid market increases, then tails off, says Jeffrey Hirsch, editor-in-chief of the Stock Trader’s Almanac. “There’s just a general selling bias in the month of September,” he says. Four times in the past decade alone, the S&P 500 shed at least 5 percent in September. The average September decline since 1950 is 0.6 percent, according to the Stock Trader’s Almanac. February is the next worst, with an average 0.2 percent loss, and December and November are the best, averaging 1.6 percent gains. Of course, investors haven’t forgotten that the financial world collapsed in September just two years ago. And the Sept. 11 attacks, which delivered a devastating blow to the stock market, remain a painful memory. This year, there’s a lot to frown about. The S&P 500 index is down 14 percent from its high in April, and was down 5 percent for the month of August. Stocks have fallen because the economic recovery is faltering. The economy has slowed to anemic growth, home sales the last three months are the worst on record, consumer spending is lackluster and unemployment is stuck near 10 percent. The slew of weak economic data sapped the market of what little midsummer momentum it had and further shook the confidence of already wary investors. “I don’t think it would take a whole lot to get investors to start selling and consumers to start pulling back again,” says Mark Zandi, chief economist at Moody’s Economy.com. “The collective psyche is on edge.” Federal Reserve Chairman Ben Bernanke said last week that the central bank is ready to take additional steps to boost the economy, including buying more debt or mortgage securities in order to keep interest rates low. But with the benchmark interest rate already near zero, any Fed action is unlikely to provide the oomph of past measures. Congress doesn’t appear to have an appetite for another stimulus package. Also hanging over the market is an air of heightened uncertainty because the November elections will determine which party controls Congress for the next two years. The S&P 500 has declined an average 1.7 percent in the September before midterm elections since 1930. Not that September isn’t bad enough already without all of this year’s baggage. It’s one of only three months, along with February and June, when stock prices typically decline. The uncertainty is a serious consideration for financial advisers such as Dominick Vetrano of Fountainhead Financial in Chicago. He holds off putting more money into stocks beginning in August, even though he thinks the September market dips are usually psychological. “There is little to gain by investing right before September and a lot to lose, so why risk it?” he says. “The September effect is well-documented.” Some experienced market participants, however, dismiss the significance of the trend and say it would be a mistake to try to time market decisions based on seasonal data from past years. Investors ultimately should be guided by the financial health of the companies they’re considering investing in. Hirsch, the market historian, agrees that history shouldn’t guide investing alone. After all, the S&P 500 advanced 4 percent last September. But he maintains that the numbers are too meaningful to dismiss entirely. “You should have a general idea of what the market’s rhythm and tendencies are,” he says. “And you respond accordingly.”

Read the full article →

Video: Home Prices Probably Cooled, House Inventories Rise: Video

August 31, 2010

Aug. 31 (Bloomberg) — The rebound in U.S. home prices probably slowed, indicating threats to the economic recovery are mounting, economists say. The home-price data from S&P/Case-Shiller is due today. Estimates range from increases of 2.5 percent to 4.2 percent. It would be the first time the measure failed to improve since a 19 percent drop in the year ended January 2009, which was the worst performance in records dating to 2001. Bloomberg’s Monica bertran reports. (Source: Bloomberg)

Read the full article →

Video: Rig Survivor Blames BP’s ‘Screwed-Up Plan’ for Blast: Video

August 24, 2010

Aug. 24 (Bloomberg) — BP Plc’s “screwed-up” well design caused the Gulf of Mexico explosion that killed 11 workers and created the worst oil spill in U.S. history, according to Buddy Trahan, a Transocean Ltd. rig supervisor who barely survived the disaster. Bloomberg’s Megan Hughes reports. (Source: Bloomberg)

Read the full article →

Video: Keegan Sees Food Prices Rising on Russia Wheat Trade Ban: Video

August 23, 2010

Aug. 23 (Bloomberg) — Matthew Keegan, a portfolio manager at Arlon Group, talks with Bloomberg’s Melissa Long about the impact of Russia’s ban on foreign sales of wheat on food prices. Russia, the world’s third-largest grower last year, banned exports amid the worst drought in at least half a century. (Source: Bloomberg)

Read the full article →

Video: Mubashar Says Over 6 Million People Need Aid in Pakistan: Video

August 17, 2010

Aug. 18 (Bloomberg) — Oxfam International’s Mubashar Hasan speaks from Islamabad about aid efforts for victims of Pakistan’s floods. More than 3 million children are at high risk of deadly water-borne diseases in Pakistan, making them the most vulnerable victims of one of the worst natural disasters in history, the United Nations Children’s Fund said. Mubashar speaks with Linzie Janis on Bloomberg Television’s “Global Connection.” (Source: Bloomberg)

Read the full article →

Video: Barclays’s Unnikrishnan Says Wheat Prices Haven’t Peaked: Video

August 12, 2010

Aug. 13 (Bloomberg) — Sudakshina Unnikrishnan, a commodities analyst at Barclays Capital, talks with Bloomberg’s Rishaad Salamat about the outlook for wheat and corn prices.¶ Wheat futures surged to the highest price in almost two years on Aug. 6, a day after Russia declared a ban on grain exports amid the worst drought in at least 50 years and the country’s Prime Minister Vladimir Putin proposed that Kazakhstan and Belarus follow suit. (Source: Bloomberg)

Read the full article →

Robert Reich: The Jobs Emergency

August 9, 2010

Washington’s latest answer to the worst jobs crisis since the Great Depression is $26 billion in aid to state and local governments. This still leaves the states and locales more than $62 billion in the hole this fiscal year. And because every state except Vermont has to balance its budget, the likely result is 600,000 to 700,000 more state and local jobs vanishing over the next 12 months (including private contractors and other businesses that depend on state and local governments) according to the Center on Budget and Policy Priorities. Say goodbye to even more of the teachers, firefighters, sanitary workers, and police officers we depend on. In July alone, state and local employment dropped 48,000. Not counting temporary census workers, the federal government shed 11,000. So with private payrolls increasing a paltry 71,000, July’s overall increase in payrolls was just 12,000. 12,000 new jobs in July — when 125,000 are needed monthly just to keep up with population growth, when more than 15 million Americans are out of work, and when more than a half million more state and local jobs are on the chopping block. With the worst jobs crisis since the Great Depression worsening, you might expect emergency action out of Washington. But the biggest upcoming debate there is whether to extend the Bush tax cuts for the richest 2 percent, or for everyone, or for no one. This is like debating whether or not to get a mousetrap when your home is sinking in quicksand. We need a response proportional to the crisis. Obama, Pelosi, and Reid should summon Congress back to Washington for action on the jobs emergency. First item on the agenda: establishing a federal bank that will provide states and locales zero-interest loans, to be repaid when their unemployment rates drop to 5 percent or below. Second item: eliminating payroll taxes on the first $20,000 of all incomes and make up the difference by subjecting all income above $250,000 to the payroll tax. (Remember, the wealthy save most of their after-tax income, lower-income Americans spend it.) Third item: recreating the WPA to hire Americans directly. The Works Progress Administration put Americans back to work during the Depression rebuilding the nation’s infrastructure. The jobs emergency requires no less. This post originally appeared at RobertReich.org .

Read the full article →

Video: Barratt Sees `Light at The End of The Tunnel’ for BP: Video

July 20, 2010

July 20 (Bloomberg) — Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, talks with Bloomberg’s Linzie Janis about the outlook for BP Plc. BP seeks cash to meet the costs of the worst oil spill in U.S. history. BP’s talks to sell half its stake in Alaska’s Prudhoe Bay oil field to Apache Corp. stalled twice over the weekend, raising doubts about whether the deal will be completed, said a person with knowledge of the matter.(Source: Bloomberg)

Read the full article →

Video: Barratt Sees `Light at The End of The Tunnel’ for BP: Video

July 20, 2010

July 20 (Bloomberg) — Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney, talks with Bloomberg’s Linzie Janis about the outlook for BP Plc. BP seeks cash to meet the costs of the worst oil spill in U.S. history. BP’s talks to sell half its stake in Alaska’s Prudhoe Bay oil field to Apache Corp. stalled twice over the weekend, raising doubts about whether the deal will be completed, said a person with knowledge of the matter.(Source: Bloomberg)

Read the full article →

Video: Long Beach’s Farrell Discusses Proposed Marijuana Tax: Video

July 9, 2010

July 9 (Bloomberg) — Lori Ann Farrell, director of financial management for the City of Long Beach, California, talks about the city council’s decision to pursue a 5 percent tax on medical marijuana dispensaries to bridge falling revenue from the worst recession since the 1930s. Long Beach’s plan also proposes a 10 percent tax on non-medicinal marijuana sales if a state-wide referendum to legalize limited marijuana possession passes in November. Farrell speaks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (Source: Bloomberg)

Read the full article →

Brian Clark Howard: World’s Worst Credit Cards (Infographic)

July 8, 2010

In these tumultuous times with high unemployment, mounting debts, and depressed home prices, the last thing you want is your credit score ruining your life. To make sure that you make the right decision when it comes to your plastic, we’ve picked out the worst cards we could find so at least you know what to avoid. Source: Credit Score EMBED THE IMAGE ABOVE ON YOUR SITE Via: Credit Score

Read the full article →

Video: McGinn Says BP Ads Not Right Idea, Scholarships Needed: Video

June 25, 2010

June 25 (Bloomberg) — Dan McGinn, chief executive officer at TMG Strategies, talks with Bloomberg’s Margaret Brennan about BP Plc’s media campaign in response to the worst oil spill in U.S. history. McGinn also discusses the public images of Goldman Sachs Group Inc. and Toyota Motor Corp. (Source: Bloomberg)

Read the full article →

Video: Sharp Says Hayward Hearing Only Surface of Investigation: Video

June 18, 2010

June 18 (Bloomberg) — Phil Sharp, president of Resources for the Future Inc. and a former Democratic U.S. House member from Indiana, talks with Bloomberg’s Lori Rothman about testimony by BP Plc Chief Executive Officer Tony Hayward before the House Energy Committee yesterday. Less than 24 hours after Hayward met President Barack Obama’s demand to set aside $20 billion to clean up and compensate victims of the worst oil spill in U.S. history, lawmakers yesterday accused the BP CEO of “stonewalling.” (Source: Bloomberg)

Read the full article →

Video: Browner Says BP May Pay More Than $20 Billion in Claims: Video

June 17, 2010

June 17 (Bloomberg) — Carol Browner, White House energy and climate adviser, talks with Judy Woodruff about prospects for BP Plc paying more than the $20 billion it has pledged to set aside for claims from the worst oil spill in U.S. history. Bloomberg’s Matt Miller also speaks. (This is an excerpt of the full interview which airs on “Conversations With Judy Woodruff” this weekend on Bloomberg Television. Source: Bloomberg)

Read the full article →

Video: Browner Says BP May Pay More Than $20 Billion in Claims: Video

June 17, 2010

June 17 (Bloomberg) — Carol Browner, White House energy and climate adviser, talks with Judy Woodruff about prospects for BP Plc paying more than the $20 billion it has pledged to set aside for claims from the worst oil spill in U.S. history. Bloomberg’s Matt Miller also speaks. (This is an excerpt of the full interview which airs on “Conversations With Judy Woodruff” this weekend on Bloomberg Television. Source: Bloomberg)

Read the full article →

U.S. Stocks Fluctuate as BP Oil-Fund Accord Offsets FedEx Profit Forecast

June 16, 2010

By Nikolaj Gammeltoft June 16 (Bloomberg) — U.S. stock fluctuated as BP Plc’s agreement to pay about $20 billion for claims from the Gulf of Mexico oil spill assuaged concern about the company’s future, helping the market recover most of an earlier drop. BP’s U.S. shares erased a loss of as much as 5.8 percent and energy shares in the Standard & Poor’s 500 Index turned higher as a person familiar with the talks said BP tentatively agreed to put the money into a fund to pay damages from the worst spill in U.S. history. FedEx, the largest U.S. air-cargo carrier, slid 2.3 percent as its full-year earnings forecast trailed analyst estimates on higher costs for health-care and pensions. The S&P 500 rose less than 0.1 percent to 1,115.26 at 12:38 p.m. in New York after tumbling as much as 0.7 percent earlier. The Dow Jones Industrial Average slipped 9.22 points, or less than 0.1 percent, to 10,395.55 after sliding 72 points earlier. “If anything it puts hard numbers around quantity,” said Evan Smith , who helps manage $2 billion at U.S. Global Investors Inc., including shares of Anadarko Petroleum Corp., the company that owns a 25 percent stake in BP’s well. “High estimates I’ve seen have been $30 or 40 billion and this is less than that. I’d imagine that’s incrementally positive. It’s putting a number around the liability.” U.S. equities slumped earlier after FedEx’s forecast and a drop in housing starts cast doubt on the economic recovery. The S&P 500 rallied 2.4 percent yesterday to 1,115.23, the highest close since May 18. The advance sent the index about 6.5 points above its average level in the past 200 days, a move considered significant by investors who base trading decisions on chart patterns. Recovery After Tumble The index tumbled 14 percent from a 19-month high on April 23 through June 7 as concern grew that Europe’s debt crisis will derail the economic recovery and BP’s leaking well triggered the worst oil spill in U.S. history. The S&P 500 has since rebounded 6.2 percent as concern over European budget deficits eased and investors speculated growth in China and the U.S. will bolster the global recovery. FedEx fell 2.3 percent to $81.07. The company expects a fiscal 2011 profit of $4.40 to $5 a share. The average estimate of analysts surveyed by Bloomberg was a profit of $5.07 a share. Home Depot lost 0.7 percent to $32.02. Housing starts fell 10 percent to a 593,000 annual rate last month, the lowest level this year, from a revised 659,000 pace in April that was less than previously estimated, Commerce Department figures showed today. Fannie, Freddie Sink Fannie Mae’s shares tumbled 45 percent to 50 cents and Freddie Mac’s plummeted 47 percent to 65 cents after their regulator told the mortgage-finance companies to delist their shares from the New York Stock Exchange. Fannie’s and Freddie’s common and preferred stock will be quoted on the Over-the- Counter Bulletin Board once they’re de-listed from the NYSE, the Federal Housing Finance Agency said in an e-mailed statement. The S&P 500’s Consumer Discretionary Sector Index dropped 0.6 percent for the biggest decline among 10 industry groups in the benchmark index for U.S. equities. General Electric Co. rose 1.5 percent to $16.03 as government data showed industrial production in the U.S. gained 1.2 percent in May, the most since August and beating the median estimate of 0.9 percent based on a survey 82 economists. To contact the reporter on this story: Nikolaj Gammeltoft in New York at ngammeltoft@bloomberg.net .

Read the full article →

The WORST Corporate Rebrandings Of The Last Decade (PHOTOS)

June 11, 2010

General Motors may have backed off a “poorly worded” memo demanding employees call Chevy by its more refined name, Chevrolet, but the company’s marketing ploy likely caused some damage to its brand. Brazen corporate rebranding or name changes during crisis often elicits ridicule, mocking, fury. But sometimes corporate rebranding is appropriate (like when Jerry’s Jerry’s Guide to the World Wide Web was re-named Yahoo). More often than not, it infuriates or confuses its loyal customers. Especially if they don’t understand why. Chevy — sorry, Chevrolet — definitely isn’t the first big company who has tried to lift sales or gloss of a scandal with a superficial name change. Whether its becoming gender-neutral or, in one bank’s case, a woman, check out some of the WORST corporate rebrandings of the last decade.

Read the full article →

The Regulation Crisis: James Surowiecki

June 9, 2010

These failures weren’t accidents. They were the all too predictable result of the deregulationary fervor that has gripped Washington in recent years, pushing the message that most regulation is unnecessary at best and downright harmful at worst. The result is that agencies have often been led by people skeptical of their own duties. This gave us the worst of both worlds: too little supervision encouraged corporate recklessness, while the existence of these agencies encouraged public complacency.

Read the full article →

Fed Finding Status Quo In Bank Pay

June 9, 2010

Federal regulators reviewing the compensation policies of major banks are finding that the industry has not adequately adjusted its pay practices to reduce risk-taking. The Federal Reserve, six months into a compensation review of the country’s 28 largest financial companies, has found that many of the bonus and incentive programs that economists say contributed to the worst financial crisis since the Great Depression remain in place, according to people briefed on the examinations.

Read the full article →

Exxon Valdez Lawyer: Louisianans, ‘To Use A Legal Term,’ Are ‘Just F–ked’

June 8, 2010

Long after oil stops spilling from the Gulf and the ecological catastrophe caused by the spill begins to be cleaned up, the process of determining the extent to which BP owes the afflicted will be litigated in the courts. And while the case against the oil company seems fairly clear-cut (BP admits, after all, to being responsible for the worst environmental disaster in U.S. history), a lawyer with perhaps the most relevant experience on the matter at hand is painting a depressing picture about the litigation ahead. “[I]f you were affected in Louisiana,” said Brian O’Neill, an attorney with the firm Faegre & Benson, “to use a legal term, you are just f–ked.” More than any attorney in the country, O’Neill personally understands the implications of that imprecise legal term. For more than two decades, he represented fishermen in civil cases related to the now second-most-damaging spill in U.S. history: the Exxon Valdez spill in 1989. And from it, he learned valuable lessons about how to sue an oil giant for the damages it has caused — above all, to push for the best and plan for the worst. “In Valdez we had 32,000 legitimate claims — that was a lot,” he said in an interview with the Huffington Post. “I think there will be more claims in this one.” “These big oil companies, they have a different view of time and politics than we do,” he added. “The fact that BP hard-asses it a little bit for 5 to 10 to 15 years, despite all the bad publicity there may be between segments of society and BP as a result [of this spill]. Exxon sure weathered it really well. The market went up the next day for Exxon stock [after the settlement]. They just thrived despite treating an entire state poorly. And there is a lesson there for BP, and that is: it really doesn’t matter whether you treat these people nicely or not. The only difference is if you extract oil. It sounds cynical but it might be true.” The similarities between the two crises are telling in many ways. When Exxon’s ship hit Prince William Sound’s Bligh Reef — in the process, releasing an estimated minimum of 10.8 million gallons of oil into the water — the company pledged (like BP has done now) that they would cover the entire cost of the cleanup and all legitimate claims of damages. Two decades of litigation and appeals resulted in punitive damages being reduced from $5 billion to $500 million. The irony, as O’Neill tells it, is that the law Congress passed in the wake of that spill — the Oil Pollution Act of 1990 — may end up hindering the type of relief that Gulf residents can expect currently. Under that legislation, a $75 million cap was placed on economic damages that an oil company can pay as a penalty for a spill (this isn’t true, O’Neill notes, in states that have passed their own liability caps — of which Louisiana isn’t one). Congress is currently trying to lift that cap. But there are constitutional questions about whether it can do so retroactively to cover BP. “Constitutionally, I don’t know whether you can do that. I don’t know whether it is ex post facto,” O’Neill said. “It will likely be challenged. I would, if I was representing BP.” There are other problems that the Exxon Valdez vet recognized when discussing the forthcoming courtroom battles for BP. There are questions, for starters, as to who actually can sue the oil company under the Oil Pollution Act law and whether, in fact, those 11 workers killed on the rig will have their settlements capped by the Death On the High Seas Act. Mainly, however, O’Neill is concerned over the pervasive influence that the oil industry has on all sector of governance — which he predicts will weigh heavily on the legal process. “This is more important than banks,” he said. “This is oil. And at some point in time, the administration and the states will resolve all their dealings and it will leave fisherman and the tourist industry to resolve their differences in the courts. It could be another 20 years till then because BP [is] going to defend this like Exxon did.”

Read the full article →

← Previous Entries