Tuesday, January 26, 2010
Two Big Printers Expected to Merge
Privately held Quad/Graphics Inc. of the U.S. is expected to acquire Canadian rival World Color Press Inc. for roughly $1.3 billion to $1.4 billion, said people familiar with the matter, in a deal that would create North America's second-largest commercial printer by sales, behind industry giant R.R. Donnelley & Sons Co.
Under the plan, these people said, shareholders of Toronto-listed World Color, which prints such magazines as Sports Illustrated and Rolling Stone, as well as the Crate & Barrel catalog and Yellow Book directory, would get a 40% stake in the newly combined company. The new company would then list on a U.S. stock exchange, they said, in effect bringing Quad/Graphics, whose clients include Newsweek, GQ and the L.L. Bean catalog, to the public market for the first time since its founding in 1971.
Quad/Graphics, based in Sussex, Wis., has 11,500 employees and 11 plants, most of them in the U.S. Its annual sales are around $2 billion. Montreal-based World Color, with a market capitalization of around $730 million, has about 18,000 employees and annual sales of around $3 billion, with about 30% of that coming from Canada and Latin America.
Under the plan, these people said, shareholders of Toronto-listed World Color, which prints such magazines as Sports Illustrated and Rolling Stone, as well as the Crate & Barrel catalog and Yellow Book directory, would get a 40% stake in the newly combined company. The new company would then list on a U.S. stock exchange, they said, in effect bringing Quad/Graphics, whose clients include Newsweek, GQ and the L.L. Bean catalog, to the public market for the first time since its founding in 1971.
Quad/Graphics, based in Sussex, Wis., has 11,500 employees and 11 plants, most of them in the U.S. Its annual sales are around $2 billion. Montreal-based World Color, with a market capitalization of around $730 million, has about 18,000 employees and annual sales of around $3 billion, with about 30% of that coming from Canada and Latin America.
Demand for Macs, iPhones Fuels Apple
Wall Street Journal - Two days before it's set to unveil a major new product, Apple Inc. reported a surge in quarterly profit and revenue that showed demand for its technology hasn't cooled off.
The Cupertino, Calif., company continued to power through the weak economy. Apple, after adjusting for a key accounting change, posted a 50% rise in profit and a 32% increase in revenue for its fiscal first quarter ended Dec. 26.
The growth was fueled by strong sales across most of Apple's product lines as iPhone shipments more than doubled and Macintosh computer sales climbed 33%.
"What this demonstrates is the strength of Apple's brand in good and bad times," said Bill Kreher, an analyst with Edward Jones.
Overall, Apple reported a quarterly profit of $3.38 billion, or $3.67 a share, up from $2.26 billion, or $2.50 a share, a year earlier. Revenue increased to $15.68 billion from $11.88 billion.
Saturday, January 23, 2010
One Third U.S. is Now Below the Poverty Line
A new study from the Brookings Institution tells us that the largest and fastest-growing population of poor people in the U.S. is in the suburbs. You don’t hear about this from the politicians who are always so anxious to tell you, in between fund-raisers and photo-ops, what a great job they’re doing. From 2000 to 2008, the number of poor people in the U.S. grew by 5.2 million, reaching nearly 40 million. That represented an increase of 15.4 percent in the poor population, which was more than twice the increase in the population as a whole during that period.
Job losses, stagnant or reduced wages over the past decade, and the loss of home equity when the housing bubble burst have combined to take a horrendous toll on families who thought they had done all the right things and were living the dream. A great deal of that bleeding is in the suburbs. The study, compiled by the Brookings Metropolitan Policy Program, said, “Suburbs gained more than 2.5 million poor individuals, accounting for almost half of the total increase in the nation’s poor population since 2000.”
Democrats in search of clues as to why voters are unhappy may want to take a look at the report. In 2008, a startling 91.6 million people — more than 30 percent of the entire U.S. population — fell below 200 percent of the federal poverty line, which is a meager $21,834 for a family of four.
http://www.nytimes.com/2010/01/23/opinion/23herbert.html
Job losses, stagnant or reduced wages over the past decade, and the loss of home equity when the housing bubble burst have combined to take a horrendous toll on families who thought they had done all the right things and were living the dream. A great deal of that bleeding is in the suburbs. The study, compiled by the Brookings Metropolitan Policy Program, said, “Suburbs gained more than 2.5 million poor individuals, accounting for almost half of the total increase in the nation’s poor population since 2000.”
Democrats in search of clues as to why voters are unhappy may want to take a look at the report. In 2008, a startling 91.6 million people — more than 30 percent of the entire U.S. population — fell below 200 percent of the federal poverty line, which is a meager $21,834 for a family of four.
http://www.nytimes.com/2010/01/23/opinion/23herbert.html
Friday, January 22, 2010
WSJ Top News Friday-Sat, Jan. 22-23, 2010
New Bank Rules Sink Stocks
WASHINGTON—President Barack Obama proposed new limits on the size and activities of the nation's largest banks, pushing a more muscular approach toward regulation that yanked down bank stocks and raised the stakes in his campaign to show he's tough on Wall Street. With former Federal Reserve Chairman Paul Volcker at his side, Mr. Obama said he wanted to toughen existing limits on the size of financial firms and force them to choose between the protection of the government's safety net and the often-lucrative business of trading for their own accounts or owning hedge funds or private-equity funds.
http://online.wsj.com/article/SB10001424052748703699204575016983630045768.html?mod=WSJ_hps_LEFTWhatsNews
GE Earnings Fall
General Electric Co. posted a 19% slump in fourth-quarter profit, dinged again by weakness at its finance arm and NBC Universal, but offered an upbeat outlook that foresees a return to growth in 2011.
Orders have improved since its investor update in December, with delinquencies in its problematic finance unit also trending down, though commercial real-estate remains a key concern.
http://online.wsj.com/article/SB10001424052748704509704575018672407762274.html?mod=WSJ_hps_LEFTWhatsNews
Birth Weights Fall in U.S.
Mothers are giving birth to lighter babies in the U.S., and no one is quite sure why.
The finding, published Thursday in the Journal of Obstetrics and Gynecology, has potentially troubling public-health implications, if the trend continues. Low-birth-weight babies are at higher risk for a host of health problems.
http://online.wsj.com/article/SB10001424052748704423204575017471267586344.html?mod=WSJ_hps_MIDDLEFifthNews
Court Kills Limits On Corporate Campaign Spending
WASHINGTON—A divided Supreme Court struck down decades-old limits on corporate political expenditures, potentially reshaping the 2010 election landscape by permitting businesses and unions to spend freely on commercials for or against candidates.President Barack Obama attacked the ruling and said it gave "a green light to a new stampede of special-interest money in our politics," particularly "big oil, Wall Street banks, health-insurance companies and the other powerful interests" that "drown out the voices of everyday Americans." He pledged to work with lawmakers to craft a "forceful response."
http://online.wsj.com/article/SB10001424052748703699204575016942930090152.html?mod=WSJ_hps_MIDDLEForthNews
Restaurants Begin to Count Calories
Restaurants from Applebee's to Starbucks are pushing new low-calorie menu items in an effort to attract customers who say they want healthier options.Chain restaurants, traditionally known for peddling fatty food and sugary drinks, hope that offering healthier fare will give them a competitive advantage, especially with the prospect of a federal nutrition labeling law looming.
http://online.wsj.com/article/SB10001424052748704381604575005530811257728.html?mod=WSJ_hps_MIDDLEFifthNews
Google Earnings Soar
Google Inc. reported its strongest revenue growth in a year and issued its firmest public statement saying it would like to continue doing business in China, a week after it said it may pull out of the country due to a sweeping cyber attack.The Mountain View, Calif., company said its revenue rose 17% in the fourth quarter to $6.67 billion from a year earlier, up from only 7% revenue growth in the third quarter and 3% growth in the second quarter.http://online.wsj.com/article/SB10001424052748703699204575017451974056226.html?mod=WSJ_hps_LEFTWhatsNews
Wednesday, January 20, 2010
Time to Sell Health-Care Stocks?
Aetna Inc. (AET)
Barron's - HEALTH-CARE STOCKS seemed to get a late Christmas gift last night in the form of a Republican victory in Massachusetts.
But as stunning as the final result might be coming from the liberal state, the market saw it coming.
The sector rallied in recent days, as a victory by Republican Scott Brown looked increasingly possible. Managed-care stocks were up significantly in the last five days, including 12% for UnitedHealth Group (ticker: UNH), 8% for Aetna (AET) and 7% for WellPoint (WLP). Pharmaceutical giant Pfizer (PFE) was up 7% and medical-device maker Boston Scientific (BSX) gained 5%. All of those returns are well ahead of the Standard & Poor's 500 index's 1% gain over the last week.
Given those impressive returns, we would "sell on the news" today. To be sure, analysts are generally dire in their predictions for health-care reform. "We think the Democratic push for the government takeover of health care is dead or effectively dead," David Maris, a well-respected health-care analyst for Calyon Securities wrote this morning.
Falling Beer Sales Have Brewery Mergers Over a Barrel
The Wall Street Journal - U.S. beer sales volumes fell 2.2% last year, the highest rate since the 1950s, with demand worsening late in the year in a sign of the pressures on big brewers to make their mergers pay off.
The decline, the industry's first since 2003, raises demands for industry leaders Anheuser-Busch InBev NV and MillerCoors LLC to come up with better advertising and to rethink recent price increases, said retailers and analysts.
But they must tread carefully, balancing price moves against a need to drive profits in the wake of the mergers that created the two.
The two giants increased prices by about 5% last year, fresh off InBev NV's acquisition of Anheuser-Busch Cos. and the move by SABMiller PLC and Molson Coors Brewing Co. to combine U.S. operations. Those increases, along with a weak job market and lackluster advertising, contributed to the sales drop, industry analysts said.
The decline, the industry's first since 2003, raises demands for industry leaders Anheuser-Busch InBev NV and MillerCoors LLC to come up with better advertising and to rethink recent price increases, said retailers and analysts.
But they must tread carefully, balancing price moves against a need to drive profits in the wake of the mergers that created the two.
The two giants increased prices by about 5% last year, fresh off InBev NV's acquisition of Anheuser-Busch Cos. and the move by SABMiller PLC and Molson Coors Brewing Co. to combine U.S. operations. Those increases, along with a weak job market and lackluster advertising, contributed to the sales drop, industry analysts said.
Starbucks Growth Revives, Perked by Via
Starbucks Corp. posted its first quarter of same-store sales growth since the end of 2008, citing the unexpected success of its Via instant coffee in the U.S. and strong holiday coffee sales in international markets.
U.S. same-store sales rose 4%, mainly due to a 4% increase in customers' average ticket that the company attributed mostly to Via.
"We expected a contribution from Via, but it was even more than we expected," said Starbucks Chief Financial Officer Troy Alstead in an interview. "We knew it fit perfectly for people on the go, but there was much bigger single-serve, at-home usage than we anticipated or hoped we could get in these early days."
U.S. same-store sales rose 4%, mainly due to a 4% increase in customers' average ticket that the company attributed mostly to Via.
"We expected a contribution from Via, but it was even more than we expected," said Starbucks Chief Financial Officer Troy Alstead in an interview. "We knew it fit perfectly for people on the go, but there was much bigger single-serve, at-home usage than we anticipated or hoped we could get in these early days."
New York Times to Charge for Web
New York Times Co. unveiled a plan to charge readers for unlimited access to the Web version of its flagship newspaper, a seminal—and risky—move in the industry's broader push to stem the free flow of proprietary news online.
Under the plan, to be launched in early 2011, people who read more than a certain number of articles in a month will be prompted to pay a flat monthly fee for additional access. Print subscribers will have full access to the site.
Most newspaper publishers are exploring options for charging for Web articles. But few papers have actually erected a so-called pay wall, reflecting concerns that readers will turn to countless other news sources before paying for something they are used to getting free. The Times is the most prominent newspaper so far to revise its Web strategy to cope with the recent flight of readers and advertisers from print.
Under the plan, to be launched in early 2011, people who read more than a certain number of articles in a month will be prompted to pay a flat monthly fee for additional access. Print subscribers will have full access to the site.
Most newspaper publishers are exploring options for charging for Web articles. But few papers have actually erected a so-called pay wall, reflecting concerns that readers will turn to countless other news sources before paying for something they are used to getting free. The Times is the most prominent newspaper so far to revise its Web strategy to cope with the recent flight of readers and advertisers from print.
Apple Sees New Money in Old Media
The Wall Street Journal - With the new tablet device that is debuting next week, Apple Inc. Chief Executive Steve Jobs is betting he can reshape businesses like textbooks, newspapers and television much the way his iPod revamped the music industry—and expand Apple's influence and revenue as a content middleman.
In developing the device, Apple focused on the role the gadget could play in homes and in classrooms, say people familiar with the situation. The company envisions that the tablet can be shared by multiple family members to read news and check email in homes, these people say.
For classrooms, Apple has been exploring electronic-textbook technology, these people add. The people familiar with the matter say Apple has also been looking at how content from newspapers and magazines can be presented differently on the tablet. Other people briefed on the device say the tablet will come with a virtual keyboard.
Apple has recently been in discussions with book, magazine and newspaper publishers about how they can work together. The company has talked with The New York Times Co., Conde Nast Publications Inc. and HarperCollins Publishers and its owner News Corp., which also owns The Wall Street Journal, over content for the tablet, say people familiar with the talks.
New York Times Chairman Arthur Sulzberger declined to comment in an interview Wednesday on its involvement in the new device except to say, "stay tuned."
Apple is also negotiating with television networks such as CBS Corp. and Walt Disney Co., which owns ABC, for a monthly TV subscription service, the Journal has reported. Apple is also working with videogame publisher Electronic Arts Inc. to show off the tablet's game capabilities, according to one person familiar with the matter.
Tuesday, January 19, 2010
WSJ Top News Tuesday, Jan 19
JAL Files for Bankruptcy
TOKYO -- Japan Airlines Corp launches Wednesday a painful three-year restructuring that will significantly shrink its operations to make it a viable financial concern, after the former flag carrier suffered the ignominy of filing one of the country's largest-ever bankruptcy protection petitions.
A pillar of Japan Inc. founded in 1951 to help the country rise out of the ashes of World War II, JAL Tuesday sought court protection for help in handling a crushing debt load of $25 billion, a level well above its cash flow.
http://online.wsj.com/article/SB10001424052748703837004575012323580338724.html?mod=WSJ_hps_LEFTWhatsNews
NBC To Pay Conan O'Brien $40 million
Conan O'Brien is close to signing a nearly $40 million deal to walk away from his dream job hosting NBC's "The Tonight Show," bringing down the curtain on one of the entertainment industry's biggest debacles in years.
The comedian's exit agreement, which could be completed as early as Tuesday, bars Mr. O'Brien from bad-mouthing his former NBC bosses, according to people familiar with the matter, but paves the way for him to land another television gig within a year.
The expected departure ends a nearly two-week public spectacle that engulfe
http://online.wsj.com/article/SB10001424052748704541004575011482898148788.html?mod=WSJ_hps_LEFTWhatsNews
Senate Race in Massachusetts Key to Health Bill
White House and Senate Democratic officials said Monday that they believed asking the House to pass the Senate health bill unchanged was likely to be their best hope if their party loses a Senate seat in Massachusetts. But House Speaker Nancy Pelosi's office signaled Monday that the House wouldn't go along with that, and the bill's fate dimmed.
A defeat in Massachusetts would not only deprive Democrats of their filibuster-proof majority in the Senate but also underscore the unpopularity of the health legislation and possibly lead some wavering party members to reverse their support.
Cadbury accepts Kraft's offer
Kraft Foods Inc. on Tuesday clinched a deal to acquire Cadbury PLC for £11.9 billion ($19.44 billion), in a trans-Atlantic tie-up that ends the nearly 200-year independence of Britain's most famous candy company.http://online.wsj.com/article/SB10001424052748703837004575012330202258818.html?mod=WSJ_hps_LEADNewsCollection
Sweden calls for EU to levy U.S.-style tax on banks
BRUSSELS--Swedish Finance Minister Anders Borg said Tuesday he is proposing to his European Union colleagues to apply a levy on banks similar to the one being discussed by the U.S. administration.
"The financial system should pay for the actual cost it incurs to society and the taxpayers in the form of implicit state guarantees for systemically important banks," Mr. Borg wrote in a letter to Spanish Finance Minister Elena Salgado, who chairs the two-day meeting of EU finance ministers in Brussels.
Detroit Pistons' owner asks $47 million for Snowmass estate
Roaming through her 10,000-square-foot, eight-bedroom vacation home, clad in a gray hooded sweatshirt, Karen Davidson said it was time for a change. "It's got everything but a post office," she said of her 10-acre property here, which in addition to the main house also has two guest houses, a former stable and two barns. "I just want to downsize."
On Dec. 29 Ms. Davidson—whose husband Bill Davidson, owner of the Detroit Pistons, died last March at age 86—put her property on the market. The asking price: $47 million, making the estate, called Stony Creek Ranch, one of the most expensive listings in the country, in a resort area that has been hard-hit by the housing bust. In 2006, four area homes priced at $20 million or more sold; in 2009, just one did. After more than a year on the market, the asking price of a $60 million home on 44 acres in West Buttermilk was cut earlier this month to $47.5 million.
http://online.wsj.com/article/SB10001424052748704586504574654431721393864.html?mod=WSJ_hps_sections_realestate
TOKYO -- Japan Airlines Corp launches Wednesday a painful three-year restructuring that will significantly shrink its operations to make it a viable financial concern, after the former flag carrier suffered the ignominy of filing one of the country's largest-ever bankruptcy protection petitions.
A pillar of Japan Inc. founded in 1951 to help the country rise out of the ashes of World War II, JAL Tuesday sought court protection for help in handling a crushing debt load of $25 billion, a level well above its cash flow.
http://online.wsj.com/article/SB10001424052748703837004575012323580338724.html?mod=WSJ_hps_LEFTWhatsNews
NBC To Pay Conan O'Brien $40 million
Conan O'Brien is close to signing a nearly $40 million deal to walk away from his dream job hosting NBC's "The Tonight Show," bringing down the curtain on one of the entertainment industry's biggest debacles in years.
The comedian's exit agreement, which could be completed as early as Tuesday, bars Mr. O'Brien from bad-mouthing his former NBC bosses, according to people familiar with the matter, but paves the way for him to land another television gig within a year.
The expected departure ends a nearly two-week public spectacle that engulfe
http://online.wsj.com/article/SB10001424052748704541004575011482898148788.html?mod=WSJ_hps_LEFTWhatsNews
Senate Race in Massachusetts Key to Health Bill
White House and Senate Democratic officials said Monday that they believed asking the House to pass the Senate health bill unchanged was likely to be their best hope if their party loses a Senate seat in Massachusetts. But House Speaker Nancy Pelosi's office signaled Monday that the House wouldn't go along with that, and the bill's fate dimmed.
A defeat in Massachusetts would not only deprive Democrats of their filibuster-proof majority in the Senate but also underscore the unpopularity of the health legislation and possibly lead some wavering party members to reverse their support.
Cadbury accepts Kraft's offer
Kraft Foods Inc. on Tuesday clinched a deal to acquire Cadbury PLC for £11.9 billion ($19.44 billion), in a trans-Atlantic tie-up that ends the nearly 200-year independence of Britain's most famous candy company.http://online.wsj.com/article/SB10001424052748703837004575012330202258818.html?mod=WSJ_hps_LEADNewsCollection
Sweden calls for EU to levy U.S.-style tax on banks
BRUSSELS--Swedish Finance Minister Anders Borg said Tuesday he is proposing to his European Union colleagues to apply a levy on banks similar to the one being discussed by the U.S. administration.
"The financial system should pay for the actual cost it incurs to society and the taxpayers in the form of implicit state guarantees for systemically important banks," Mr. Borg wrote in a letter to Spanish Finance Minister Elena Salgado, who chairs the two-day meeting of EU finance ministers in Brussels.
Detroit Pistons' owner asks $47 million for Snowmass estate
Roaming through her 10,000-square-foot, eight-bedroom vacation home, clad in a gray hooded sweatshirt, Karen Davidson said it was time for a change. "It's got everything but a post office," she said of her 10-acre property here, which in addition to the main house also has two guest houses, a former stable and two barns. "I just want to downsize."
On Dec. 29 Ms. Davidson—whose husband Bill Davidson, owner of the Detroit Pistons, died last March at age 86—put her property on the market. The asking price: $47 million, making the estate, called Stony Creek Ranch, one of the most expensive listings in the country, in a resort area that has been hard-hit by the housing bust. In 2006, four area homes priced at $20 million or more sold; in 2009, just one did. After more than a year on the market, the asking price of a $60 million home on 44 acres in West Buttermilk was cut earlier this month to $47.5 million.
http://online.wsj.com/article/SB10001424052748704586504574654431721393864.html?mod=WSJ_hps_sections_realestate
Sunday, January 17, 2010
JPMorgan Chase Earns $11.7 Billion
The New York Times - JPMorgan Chase kicked off what is expected to be a robust — and controversial — reporting season for the nation’s banks on Friday with news that its profit and pay for 2009 soared.
In a remarkable rebound from the depths of the financial crisis, JPMorgan earned $11.7 billion last year, more than double its profit in 2008, and generated record revenue. The bank earned $3.3 billion in the fourth quarter alone.
Those cheery figures were accompanied by news that JPMorgan had earmarked $26.9 billion to compensate its workers, much of which will be paid out as bonuses. That is up about 18 percent, with employees, on average, earning about $129,000.
Workers in JPMorgan’s investment bank, on average, earned roughly $380,000 each. Top producers, however, expect to collect multimillion-dollar paycheck.
http://www.nytimes.com/2010/01/16/business/16morgan.html
In a remarkable rebound from the depths of the financial crisis, JPMorgan earned $11.7 billion last year, more than double its profit in 2008, and generated record revenue. The bank earned $3.3 billion in the fourth quarter alone.
Those cheery figures were accompanied by news that JPMorgan had earmarked $26.9 billion to compensate its workers, much of which will be paid out as bonuses. That is up about 18 percent, with employees, on average, earning about $129,000.
Workers in JPMorgan’s investment bank, on average, earned roughly $380,000 each. Top producers, however, expect to collect multimillion-dollar paycheck.
http://www.nytimes.com/2010/01/16/business/16morgan.html
Taxing the Banks For the Bailout
The New York Times - WASHINGTON — President Obama laid down his proposal for a new tax on the nation’s largest financial institutions on Thursday, saying he wanted “to recover every single dime the American people are owed” for bailing out the economy.
With both anti-Wall Street sentiment and the budget deficit running high, Democratic leaders on Capitol Hill welcomed the proposal, which could ultimately raise up to $117 billion to cover projected bailout losses. Republicans were uncharacteristically silent, their instinctive opposition to tax increases apparently checked by their fear of defending big bankers. And the financial industry lobby seemed splintered, with small community banks happily exempted
http://www.nytimes.com/2010/01/15/us/15tax.html
WSJ News Jan. 16-17
Fed Stays the Course Despite Worries
Although Federal Reserve officials expect the economy to grow too slowly this year to bring the jobless rate down substantially, they are likely to conclude at their Jan. 26-27 meeting that there isn't much more they can do about it.
That means sticking to their stated plan to end purchases of mortgages at the end of March, roll back emergency lending programs in February and maintain the vow to keep interest rates exceptionally low for at least several more months.
http://online.wsj.com/article/SB10001424052748703657604575004961390797800.html?mod=WSJ_WSJ_US_News_5&mg=com-wsj
Paperwork Woes Plague Mortgage Plan
Thousands of homeowners participating in the Obama administration's foreclosure-prevention plan could miss a government deadline for completing necessary paperwork, putting them at risk of disqualification.
http://online.wsj.com/article/SB10001424052748703657604575005112496393670.html?mod=WSJ_hps_LEFTWhatsNew
Democrats plan tax to punish banks
WASHINGTON—Democrats' last-minute scramble to salvage the special U.S. Senate election in Massachusetts is offering the first test of a populist pitch that party strategists hope to take to other campaigns this year.
Central to the strategy is the new White House plan to tax big banks as punishment for their role in the financial crisis. President Barack Obama announced the proposal Thursday amid reports that financial institutions bailed out by the government are enjoying healthy profits and paying generous bonuses, and as a bipartisan commission began hearing testimony on banks' role in the economic crisis.
According to data released by the Treasury Department Friday, more than 900,000 borrowers have begun trial modifications under the program, but just 7% of them have received permanent changes so far.
http://online.wsj.com/article/SB10001424052748704381604575005361644727140.html?mod=WSJ_hps_LEFTWhatsNews s
MediaNews Group to seek bankruptcy protection
The holding company of MediaNews Group Inc., the publisher of dozens of newspapers including the Denver Post and San Jose Mercury News, said Friday that it plans to seek bankruptcy protection, the latest in a string of troubled newspaper companies to seek refuge from creditors amid unsustainable debt loads.
The holding company, Affiliated Media Inc., said it reached an agreement with its lenders for a streamlined bankruptcy that will hand a majority of new stock to creditors, a group led by Bank of America Corp. The company's existing equity will be canceled, the holding company said.
MediaNews Chairman and Chief Executive William Dean Singleton and company president Joseph Lodovic IV will control the restructured company through a special class of stock.
http://online.wsj.com/article/SB10001424052748703657604575005813195786280.html?mod=WSJ_hps_sections_business
Why Investors Keep Fooling Themselves
A nationwide survey last year found that investors expect the U.S. stock market to return an annual average of 13.7% over the next 10 years.
Robert Veres, editor of the Inside Information financial-planning newsletter, recently asked his subscribers to estimate long-term future stock returns after inflation, expenses and taxes, what I call a "net-net-net" return. Several dozen leading financial advisers responded. Although some didn't subtract taxes, the average answer was 6%. A few went as high as 9%.
We all should be so lucky. Historically, inflation has eaten away three percentage points of return a year. Investment expenses and taxes each have cut returns by roughly one to two percentage points a year. All told, those costs reduce annual returns by five to seven points.
So, in order to earn 6% for clients after inflation, fees and taxes, these financial planners will somehow have to pick investments that generate 11% or 13% a year before costs. Where will they find such huge gains? Since 1926, according to Ibbotson Associates, U.S. stocks have earned an annual average of 9.8%. Their long-term, net-net-net return is under 4%.
http://online.wsj.com/article/SB10001424052748704381604575005291706758502.html?mod=WSJ_hps_sections_markets
Although Federal Reserve officials expect the economy to grow too slowly this year to bring the jobless rate down substantially, they are likely to conclude at their Jan. 26-27 meeting that there isn't much more they can do about it.
That means sticking to their stated plan to end purchases of mortgages at the end of March, roll back emergency lending programs in February and maintain the vow to keep interest rates exceptionally low for at least several more months.
http://online.wsj.com/article/SB10001424052748703657604575004961390797800.html?mod=WSJ_WSJ_US_News_5&mg=com-wsj
Paperwork Woes Plague Mortgage Plan
Thousands of homeowners participating in the Obama administration's foreclosure-prevention plan could miss a government deadline for completing necessary paperwork, putting them at risk of disqualification.
http://online.wsj.com/article/SB10001424052748703657604575005112496393670.html?mod=WSJ_hps_LEFTWhatsNew
Democrats plan tax to punish banks
WASHINGTON—Democrats' last-minute scramble to salvage the special U.S. Senate election in Massachusetts is offering the first test of a populist pitch that party strategists hope to take to other campaigns this year.
Central to the strategy is the new White House plan to tax big banks as punishment for their role in the financial crisis. President Barack Obama announced the proposal Thursday amid reports that financial institutions bailed out by the government are enjoying healthy profits and paying generous bonuses, and as a bipartisan commission began hearing testimony on banks' role in the economic crisis.
According to data released by the Treasury Department Friday, more than 900,000 borrowers have begun trial modifications under the program, but just 7% of them have received permanent changes so far.
http://online.wsj.com/article/SB10001424052748704381604575005361644727140.html?mod=WSJ_hps_LEFTWhatsNews s
MediaNews Group to seek bankruptcy protection
The holding company of MediaNews Group Inc., the publisher of dozens of newspapers including the Denver Post and San Jose Mercury News, said Friday that it plans to seek bankruptcy protection, the latest in a string of troubled newspaper companies to seek refuge from creditors amid unsustainable debt loads.
The holding company, Affiliated Media Inc., said it reached an agreement with its lenders for a streamlined bankruptcy that will hand a majority of new stock to creditors, a group led by Bank of America Corp. The company's existing equity will be canceled, the holding company said.
MediaNews Chairman and Chief Executive William Dean Singleton and company president Joseph Lodovic IV will control the restructured company through a special class of stock.
http://online.wsj.com/article/SB10001424052748703657604575005813195786280.html?mod=WSJ_hps_sections_business
Why Investors Keep Fooling Themselves
A nationwide survey last year found that investors expect the U.S. stock market to return an annual average of 13.7% over the next 10 years.
Robert Veres, editor of the Inside Information financial-planning newsletter, recently asked his subscribers to estimate long-term future stock returns after inflation, expenses and taxes, what I call a "net-net-net" return. Several dozen leading financial advisers responded. Although some didn't subtract taxes, the average answer was 6%. A few went as high as 9%.
We all should be so lucky. Historically, inflation has eaten away three percentage points of return a year. Investment expenses and taxes each have cut returns by roughly one to two percentage points a year. All told, those costs reduce annual returns by five to seven points.
So, in order to earn 6% for clients after inflation, fees and taxes, these financial planners will somehow have to pick investments that generate 11% or 13% a year before costs. Where will they find such huge gains? Since 1926, according to Ibbotson Associates, U.S. stocks have earned an annual average of 9.8%. Their long-term, net-net-net return is under 4%.
http://online.wsj.com/article/SB10001424052748704381604575005291706758502.html?mod=WSJ_hps_sections_markets
A Window Opens on Pay for Bosses
The New York Times - Is it possible that shareholders will finally get a reliable view of what the bosses are getting paid? And that it will come this spring? Yes.
There is no doubt that pay consultants are now looking for ways to keep that from being the case, and it would be a risky wager to say they will not succeed. But it appears that new disclosure rules that take effect with this year’s proxies will provide the most accurate view ever.
Anger over executive pay, particularly at banks, is high. That may have been one reason the Securities and Exchange Commission moved to improve the rules this year, but it was something that would have needed doing even if business leaders were widely deemed to be geniuses. Shareholders need good information, and the disclosures required by the S.E.C. before made the figures unnecessarily confusing.
There is still one area where companies could play games to make their bosses look less well paid than they really are. That is in the area of performance-based awards, where the payout will depend on how well the executive or the company performs relative to undisclosed goals. A company that wants to do so may be able to obscure just how likely a rich reward is for an executive.
http://www.nytimes.com/2010/01/15/business/15norris.html
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