Disney Co. said Wednesday it has nominated Sheryl Sandberg, chief operating officer for the popular social networking site Facebook, to serve on its board of directors.
Sandberg, 40, has served as Facebook's COO since March 2008.
Before that, she was a vice president at Google Inc., where she managed global advertising sales. Sandberg is also a former chief of staff for the U.S. Treasury Department, and has been a management consultant with McKinsey & Co. and a World Bank economist. She serves as a director for Starbucks Corp.
Sandberg "brings great expertise in the online world, considerable international experience and a deep understanding of consumer behavior," said John E. Pepper Jr., Disney's chairman, in a statement.
Shares of Disney added 12 cents to $32.43 in afternoon trading.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
miércoles, 23 de diciembre de 2009
Ford expects Volvo deal with Geely in Q1
Motor Co. said it is moving closer to selling its Swedish Volvo brand, even though the U.S. automaker is in far better financial shape than it was when it put the brand up for sale last year.
The Dearborn, Mich., automaker said Wednesday that it expects to finalize the sale of Volvo to China's Geely Group early next year if financing and government approvals fall into place.
Ford did not reveal the amount of Geely's offer. Auto analyst Matts Carlson estimated the price tag for Volvo at between $2 billion and $2.3 billion.
Ford officially put Volvo on the market in December 2008, at the close of a year in which Ford was in desperate need of cash. Last year, the company lost $14.6 billion, the worst performance in its 106-year history. At the time, Ford had mortgaged its factories to borrow $23.5 billion, and CEO Alan Mulally joined his counterparts from Chrysler and General Motors in requesting U.S. government aid.
It turned out the company, unlike GM and Chrysler, didn't need the government aid, and it has managed to repay $10 billion in debt, reducing its total to $27 billion. Ford posted a $1 billion third-quarter profit, it stopped spending more cash than it took in, and it predicted a return to sustained profits in 2011. Ford's U.S. sales through November are down 19 percent from the same period last year, but that's a smaller drop than the overall market's 24 percent decline.
Ford decided to sell Volvo in order to focus its management resources on the Ford, Lincoln and Mercury brands, and that continues to be its mission, company spokesman Mark Truby said Wednesday. Ford acquired Volvo in 1999 for $6.45 billion.
"This was never really about Volvo — which we recognize is a very strong brand — but more about the direction we've decided to take with Ford," Truby said.
If the sale goes through it would be another step in the U.S. auto industry's sell-off of acquisitions made when it was flush with cash from truck and sport utility vehicle sales in the 1980s and 90s.
Ford sold its Jaguar and Land Rover brands to India's Tata Motors Ltd. in June 2008 for $1.7 billion, a third of what it paid for them. General Motors Co. is selling its rugged Hummer brand to construction machinery maker Sichuan Tengzhong Heavy Industrial Machinery Corp., and China's Beijing Automotive Industry Holdings has agreed to buy some powertrain technology from GM's Swedish Saab unit, which is being closed down unless a buyer is found by year end.
Work remains on financing and government approvals for the Volvo deal, Ford said in a statement, adding it expects to sign the pact in the first quarter of 2010 and close it in the second quarter.
Ford's Truby said the company has worked out details for sharing technology, engineering and parts with Geely, but Ford will not keep a stake in Volvo. For 10 years Ford and Volvo have shared safety and other technology. For instance, Ford's Taurus sedan is based on Volvo underpinnings.
Ford also is "comfortable" with provisions that stop Ford from having to compete with its own technology, especially in China, which has become the world's largest auto market.
"We're comfortable that we've spent enough time on those issues to ensure that they work for both sides," he said.
Ford said in a statement that the deal ensures Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise.
In a separate statement, Geely said its negotiations with Ford had deepened since October and that it had also held "constructive" talks with Volvo's management and Swedish union and government officials.
"If a final purchase agreement is signed, as a world famous Swedish car brand, Volvo will continue to lead the trend of world auto technology in safety and environmental protection, and will quickly increase its unique competitive status in the Chinese market," Geely said.
Auto analyst Carlson, of the Goteborg Management Institute, said a Geely takeover would be good for Volvo.
"Volvo gets a new owner with a lot of money and which I expect will mostly leave it alone because it knows more about vehicle development, vehicle sales and vehicle distribution," said Carlson.
The Dearborn, Mich., automaker said Wednesday that it expects to finalize the sale of Volvo to China's Geely Group early next year if financing and government approvals fall into place.
Ford did not reveal the amount of Geely's offer. Auto analyst Matts Carlson estimated the price tag for Volvo at between $2 billion and $2.3 billion.
Ford officially put Volvo on the market in December 2008, at the close of a year in which Ford was in desperate need of cash. Last year, the company lost $14.6 billion, the worst performance in its 106-year history. At the time, Ford had mortgaged its factories to borrow $23.5 billion, and CEO Alan Mulally joined his counterparts from Chrysler and General Motors in requesting U.S. government aid.
It turned out the company, unlike GM and Chrysler, didn't need the government aid, and it has managed to repay $10 billion in debt, reducing its total to $27 billion. Ford posted a $1 billion third-quarter profit, it stopped spending more cash than it took in, and it predicted a return to sustained profits in 2011. Ford's U.S. sales through November are down 19 percent from the same period last year, but that's a smaller drop than the overall market's 24 percent decline.
Ford decided to sell Volvo in order to focus its management resources on the Ford, Lincoln and Mercury brands, and that continues to be its mission, company spokesman Mark Truby said Wednesday. Ford acquired Volvo in 1999 for $6.45 billion.
"This was never really about Volvo — which we recognize is a very strong brand — but more about the direction we've decided to take with Ford," Truby said.
If the sale goes through it would be another step in the U.S. auto industry's sell-off of acquisitions made when it was flush with cash from truck and sport utility vehicle sales in the 1980s and 90s.
Ford sold its Jaguar and Land Rover brands to India's Tata Motors Ltd. in June 2008 for $1.7 billion, a third of what it paid for them. General Motors Co. is selling its rugged Hummer brand to construction machinery maker Sichuan Tengzhong Heavy Industrial Machinery Corp., and China's Beijing Automotive Industry Holdings has agreed to buy some powertrain technology from GM's Swedish Saab unit, which is being closed down unless a buyer is found by year end.
Work remains on financing and government approvals for the Volvo deal, Ford said in a statement, adding it expects to sign the pact in the first quarter of 2010 and close it in the second quarter.
Ford's Truby said the company has worked out details for sharing technology, engineering and parts with Geely, but Ford will not keep a stake in Volvo. For 10 years Ford and Volvo have shared safety and other technology. For instance, Ford's Taurus sedan is based on Volvo underpinnings.
Ford also is "comfortable" with provisions that stop Ford from having to compete with its own technology, especially in China, which has become the world's largest auto market.
"We're comfortable that we've spent enough time on those issues to ensure that they work for both sides," he said.
Ford said in a statement that the deal ensures Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise.
In a separate statement, Geely said its negotiations with Ford had deepened since October and that it had also held "constructive" talks with Volvo's management and Swedish union and government officials.
"If a final purchase agreement is signed, as a world famous Swedish car brand, Volvo will continue to lead the trend of world auto technology in safety and environmental protection, and will quickly increase its unique competitive status in the Chinese market," Geely said.
Auto analyst Carlson, of the Goteborg Management Institute, said a Geely takeover would be good for Volvo.
"Volvo gets a new owner with a lot of money and which I expect will mostly leave it alone because it knows more about vehicle development, vehicle sales and vehicle distribution," said Carlson.
Synta Pharma starts midstage study of cancer drug
Synta Pharmaceuticals Corp. on Wednesday said it started a mid-stage trial of a cancer drug candidate as a treatment for cancers of the digestive tract.
Synta will study the drug, called STA-9090, in patients who have not responded to treatment with two other cancer drugs, Novartis AG's Gleevec and Pfizer Inc.'s Sutent.
It is testing the drug as a treatment for a rare type of cancer called gastrointestinal stromal tumors, which usually occur in the stomach or small intestine but can also be found in the liver, colon, esophagus or rectum.
The company said 4,500 to 6,000 people are diagnosed with the cancers in the U.S. each year.
About 55 subjects with metastatic or inoperable tumors will be enrolled in the trial. The participants will receive one dose of STA-9090 per week, and those who tolerate the drug will be treated until their cancer begins to progress.
Synta said STA-9090 blocks a protein that activates other proteins that cancer cells need to grow. When the protein is blocked, other proteins degrade and the cancer cells die. Synta said the protein, called Hsp90, also aids the growth of proteins that make some tumors resistant to drugs like Gleevec and Sutent.
STA-9090 is also being studied as a treatment for non-small cell lung cancer, solid tumors and blood cancers. Synta said it plans to start other studies in early 2010.
Gleevec also is approved as a treatment for a type of leukemia, while Sutent is also used against advanced kidney cancer.
In afternoon trading, Synta shares rose 26 cents, or 4.7 percent, to $5.75.
Synta will study the drug, called STA-9090, in patients who have not responded to treatment with two other cancer drugs, Novartis AG's Gleevec and Pfizer Inc.'s Sutent.
It is testing the drug as a treatment for a rare type of cancer called gastrointestinal stromal tumors, which usually occur in the stomach or small intestine but can also be found in the liver, colon, esophagus or rectum.
The company said 4,500 to 6,000 people are diagnosed with the cancers in the U.S. each year.
About 55 subjects with metastatic or inoperable tumors will be enrolled in the trial. The participants will receive one dose of STA-9090 per week, and those who tolerate the drug will be treated until their cancer begins to progress.
Synta said STA-9090 blocks a protein that activates other proteins that cancer cells need to grow. When the protein is blocked, other proteins degrade and the cancer cells die. Synta said the protein, called Hsp90, also aids the growth of proteins that make some tumors resistant to drugs like Gleevec and Sutent.
STA-9090 is also being studied as a treatment for non-small cell lung cancer, solid tumors and blood cancers. Synta said it plans to start other studies in early 2010.
Gleevec also is approved as a treatment for a type of leukemia, while Sutent is also used against advanced kidney cancer.
In afternoon trading, Synta shares rose 26 cents, or 4.7 percent, to $5.75.
CVS will sell swine flu shots at more pharmacies
CVS Caremark Corp. said Wednesday it will start making swine flu shots available at pharmacies around the country starting as early as this week.
The shots cost $15 each. The company said it will offer the shots at more locations as public health authorities distribute more supplies of the vaccine.
CVS currently sells the shots at some retail pharmacies in nine states and Washington, D.C., and at walk-in MinuteClinics in 20 states.
The retail pharmacies are in Arizona, Florida, Georgia, Illinois, Maryland, Missouri, North Carolina, Rhode Island, and Texas. The clinics are in Arizona, California, Florida, Georgia, Illinois, Indiana, Kansas, Maryland, Michigan, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, and Texas.
CVS runs more than 7,000 drugstores around the U.S. About 500 stores have MinuteClinics. In afternoon trading, its shares slipped 21 cents to $32.10.
The shots cost $15 each. The company said it will offer the shots at more locations as public health authorities distribute more supplies of the vaccine.
CVS currently sells the shots at some retail pharmacies in nine states and Washington, D.C., and at walk-in MinuteClinics in 20 states.
The retail pharmacies are in Arizona, Florida, Georgia, Illinois, Maryland, Missouri, North Carolina, Rhode Island, and Texas. The clinics are in Arizona, California, Florida, Georgia, Illinois, Indiana, Kansas, Maryland, Michigan, Missouri, Nevada, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, and Texas.
CVS runs more than 7,000 drugstores around the U.S. About 500 stores have MinuteClinics. In afternoon trading, its shares slipped 21 cents to $32.10.
Sharp drop in dollar lifts commodities
A sharp drop in the dollar pushed prices for gold, oil and other commodities higher Wednesday.
A new report showing a sharp falloff in new home sales last month sapped investors' optimism about the economy, driving the dollar lower after four days of gains.
The Commerce Department says sales of new homes plunged 11.3 percent in November to their lowest level since March, a reminder that the recovery will be slow. That means that interest rates will likely remain low for some time, which will keep the dollar in check.
The ICE Futures U.S. dollar index, which measures the dollar against other currencies, tumbled 0.5 percent following the report. As the dollar retreated, gold gained $7.30 to $1,094 an ounce on the New York Mercantile Exchange.
Commodities have traded inversely with the dollar for much of this year, and the trend was firmly in place on Wednesday. Commodities become cheaper for foreign buyers when the dollar falls. Gold also benefits as a hedge against a weak greenback.
Record-low interest rates have sent the dollar falling since March. But in recent weeks investors have been buying dollars on the belief that the Federal Reserve might be forced to raise interest rates sooner than expected as the economy improves. That has put pressure on commodities prices.
The housing report was a reminder that the economic recovery will like be slow, keeping short-term interest rates about where they are now, near zero.
Other metals followed gold higher Wednesday. March silver jumped 16 cents to $17.19 an ounce, while March copper futures added 6.55 cents to $3.2035 a pound.
January platinum rallied $29.90 to $1,426.80 an ounce. Palladium also rose.
Oil prices soared more than 3 percent, boosted by the weaker dollar and a government report showing a drop in last week's crude supplies.
The government said crude in storage fell by 5 million barrels, more than twice what was expected. At the same time, the amount of crude being imported into the U.S. is down 17 percent from year-ago levels.
Light, sweet crude for February delivery jumped $2.27 to $76.67 a barrel.
Elsewhere on the Nymex, gasoline futures rose 7.78 cents to $1.9666 a gallon, while heating oil futures rose 6.32 cents to $2.0118 a gallon.
On the Chicago Board of Trade, March wheat futures rose 6 cents to $5.29 a bushel. March corn also rose 6 cents to $4.0475 a bushel.
March soybeans gained 10.5 cents to $10.09 a bushel.
Among other soft commodities, March cocoa futures fell $14 to $3,251 a ton, while coffee for March delivery added 0.2 cent to $1.4265 a pound.
A new report showing a sharp falloff in new home sales last month sapped investors' optimism about the economy, driving the dollar lower after four days of gains.
The Commerce Department says sales of new homes plunged 11.3 percent in November to their lowest level since March, a reminder that the recovery will be slow. That means that interest rates will likely remain low for some time, which will keep the dollar in check.
The ICE Futures U.S. dollar index, which measures the dollar against other currencies, tumbled 0.5 percent following the report. As the dollar retreated, gold gained $7.30 to $1,094 an ounce on the New York Mercantile Exchange.
Commodities have traded inversely with the dollar for much of this year, and the trend was firmly in place on Wednesday. Commodities become cheaper for foreign buyers when the dollar falls. Gold also benefits as a hedge against a weak greenback.
Record-low interest rates have sent the dollar falling since March. But in recent weeks investors have been buying dollars on the belief that the Federal Reserve might be forced to raise interest rates sooner than expected as the economy improves. That has put pressure on commodities prices.
The housing report was a reminder that the economic recovery will like be slow, keeping short-term interest rates about where they are now, near zero.
Other metals followed gold higher Wednesday. March silver jumped 16 cents to $17.19 an ounce, while March copper futures added 6.55 cents to $3.2035 a pound.
January platinum rallied $29.90 to $1,426.80 an ounce. Palladium also rose.
Oil prices soared more than 3 percent, boosted by the weaker dollar and a government report showing a drop in last week's crude supplies.
The government said crude in storage fell by 5 million barrels, more than twice what was expected. At the same time, the amount of crude being imported into the U.S. is down 17 percent from year-ago levels.
Light, sweet crude for February delivery jumped $2.27 to $76.67 a barrel.
Elsewhere on the Nymex, gasoline futures rose 7.78 cents to $1.9666 a gallon, while heating oil futures rose 6.32 cents to $2.0118 a gallon.
On the Chicago Board of Trade, March wheat futures rose 6 cents to $5.29 a bushel. March corn also rose 6 cents to $4.0475 a bushel.
March soybeans gained 10.5 cents to $10.09 a bushel.
Among other soft commodities, March cocoa futures fell $14 to $3,251 a ton, while coffee for March delivery added 0.2 cent to $1.4265 a pound.
viernes, 2 de octubre de 2009
Allergan suing FDA over off-label policy
Allergan Inc., the maker of the Botox wrinkle treatment, challenged the government's ban on off-label drug marketing to doctors, saying it violates the company's right to freedom of speech.
The company contends in a lawsuit filed Thursday that it should be able to educate doctors about the risks and benefits of using treatments for unapproved uses.
Botox is approved for several uses by the Food and Drug Administration. In addition to its use as a wrinkle treatment, it is approved for eye muscle disorders and excessive underarm sweating. But physicians often use it for unapproved, or off-label, indications including muscle-spasm conditions.
While physicians can legally prescribe a drug for unapproved uses, companies are forbidden from marketing the product, especially to physicians, for any use not sanctioned by the FDA.
A call to the FDA for comment on Friday was not immediately returned. The lawsuit was filed in U.S. District Court for the District of Columbia against the U.S. government and the FDA.
The catalyst for the lawsuit is a requirement that the company provide new risk information education to physicians on Botox as a therapeutic treatment.
"Our reason for seeking action now relates to the fact that we have recently been required by FDA to initiate a REMS (Risk and Mitigation) program for Botox to ensure that physicians are equipped to evaluate the risks and benefits of treatment," Allergan spokeswoman Caroline Van Hove said in a statement.
Drug developers often walk a tight line with off-label drug practices and getting caught on the wrong side can be expensive. New York-based Pfizer Inc. paid a $2.3 billion settlement last month over allegations it marketed drugs for off-label use.
Part of the logic behind the FDA rule is this: the agency has reviewed detailed clinical trial data, spanning years, before approving a drug's use for a specific purpose. That same level of scientific, controlled review has not gone into unapproved uses.
In a statement Thursday, Allergan said some of Botox's off-label uses are medically accepted and commonly prescribed.
"Once a drug is approved, physicians may exercise their informed medical judgment to prescribe the drug for any use, including off-label uses," the company said, estimating that about 20 percent of Botox use is off-label.
The ban on off-label marketing to doctors is particularly difficult for Allergan, the company said, since the FDA has required safety updates to Botox's label.
In April, health officials warned doctors and patients about potentially deadly risks of using Botox and similar drugs for unapproved uses to treat certain types of muscle spasms. The drugs carried risks of rare botulism symptoms, particularly when given to children to help relax uncontrollable muscle movements.
In general, the new labeling urges physicians to tell patients about the risks of botulin-based drugs and to seek medical care if they develop any symptoms.
"To ensure that physicians are equipped to treat patients as safely and successfully as possible, Allergan believes it is important to proactively provide comprehensive information to physicians about these off-label uses, such as dosing guidelines, patient selection criteria and proper injection technique," the company said. "Without judicial relief, Allergan is unable to engage in a truthful and relevant information exchange with the medical community for fear of prosecution."
The Irvine, Calif., company stressed that the lawsuit doesn't challenge the government's ability to prohibit pharmaceutical companies from lying or distributing misleading information. Rather, the company said, it seeks to permit Allergan to proactively provide the medical community with truthful, important information about common off-label uses of Botox.
Allergan is represented in its lawsuit by Paul D. Clement, a partner at King & Spalding LLP in Washington, D.C., and formerly the Solicitor General of the United States.
Allergan shares fell $1.58, or 2.8 percent, to $54.37 in morning trading Friday.
Stocks dip as September jobs report disappoints
U.S. stocks fell Friday after the government reported that more jobs were lost in September than had been expected.
Major indexes were off their lows by midmorning as investors looked for bargains after four straight days of losses.
The day's news continued a drumbeat of bad indicators for the economy, especially the still-struggling job market. The Labor Department reported that employers cut 263,000 jobs last month, up from 201,000 in August and worse than the 180,000 losses economists were expecting. The unemployment rate rose to 9.8 percent, in line with forecasts.
Unemployment has been one of the market's biggest concerns throughout the recession because lost jobs mean trouble for nearly every part of the economy, from consumers defaulting on loans, cutting back their spending and getting forced into foreclosure on their homes. Most economists expect the rate to surpass 10 percent by early next year.
A surprise decline in factory orders Friday was also troubling investors. The Commerce Department said factory orders fell 0.8 percent in August following a 1.4 percent gain in July. Analysts had been expecting a 0.7 percent increase.
The decline in stocks was more moderate than the previous day's big drop, when the Dow tumbled more than 200 points after a disappointing report on manufacturing activity dealt another blow to optimism that had been emerging about a recovery in the industrial sector.
A spate of bad economic news this week has led to even more doubts that the 50 percent surge in stocks over the past six months can be sustained. After coming within 82 points of the 10,000 level last week, the Dow has pulled back about 4.5 percent.
"Pullbacks are going to constantly be used as opportunities to get into the market," said Hank Smith, chief investment officer of equity at Haverford Investments in Radnor, Pa.
In late morning trading, the Dow fell 29.55, or 0.3 percent, to 9,479.73, after earlier falling as much as 79 points. The Standard & Poor's 500 index fell 3.43, or 0.3 percent, to 1,026.42, and the Nasdaq composite index fell 2.85, or 0.1 percent, to 2,054.63.
About 3 stocks fell for every one that rose on the New York Stock Exchange, where volume came to 456.3 million shares, compared with 358 million at the same time on Thursday.
In other trading, the Russell 2000 index of smaller companies lost 3.66, or 0.6 percent, to 580.09.
Government bonds reversed early gains and moved lower. The yield on the benchmark 10-year Treasury note rose to 3.20 percent from a five-month low of 3.18 percent late Thursday. Yields on bonds move opposite to their prices.
The dollar was mixed against other currencies. Gold prices rose.
In corporate news, struggling small business lender CIT Group Inc. said late Thursday it launched a debt restructuring program it hopes will trim at least $5.7 billion from its balance sheet. CIT is asking bondholders to approve a prepackaged reorganization plan in case it is forced to file for bankruptcy protection.
Letterman creates brilliant hour of TV from woes
It was business as usual for David Letterman and CBS' "Late Show." The band played. The host, dapper as always in a well-tailored suit, recited his monologue; some jokes hit, some missed.
Then Letterman proceeded to take viewers, and television, on an extraordinary journey that was part confessional, part entertainment and wholly, if jarringly, hypnotic.
The medium has come close to moments like this before — Hugh Grant's prostitute mea culpa on "Tonight" is the familiar example of recent years — but never achieved the merger of farce and drama that Letterman finessed.
"I'm glad you folks are here tonight," he told his "Late Show" New York studio audience Thursday. "I'm glad you're in such a pleasant mood, because I have a little story that I would like to tell you and the home viewers as well."
"Do you feel like a story?" Letterman asked amiably, as if making sure a child was ready for a cozy bedtime tale.
The audience got much more than that from a man acknowledged to be a master of the art of broadcasting.
By turns raffish, somber, self-effacing, blunt and coyly, comically manipulative, Letterman wove a mystery tale of his own behavior and that of a CBS' "48 Hours" employee arrested in an alleged multimillion-dollar extortion plot against him.
Letterman took his time — 10 minutes, a TV eternity these days for one topic — to slowly reel in viewers.
President Richard Nixon's famed "Checkers" speech, so old-school in its clumsy sentiment as he fought to remain on the GOP ticket as vice president, had nothing on this.
Even the 21st-century pipelines that allow the famous to control their message, whether Twitter or Facebook or you name it, looked like amateur hour.
Opening his tale, the 62-year-old Letterman said it all started with a letter and package left in his car.
"I know that you do some terrible, terrible things and that I can prove you do some terrible things," the letter warned, with proof enclosed, he recounted.
The audience, expecting the comedy that's reliably delivered by Uncle Dave, played along. They laughed.
They laughed about the man who allegedly threatened to put this "terrible stuff" about Letterman's life in a screenplay and a book. They laughed when he recalled the district attorney's office telling him, "Hellooo, this is blackmail."
The first break in the levity came when Letterman finally disclosed how much allegedly was demanded for silence, a princely $2 million. Real money, even for a well-paid late-night host.
"Oooooh," breathed a respectful studio audience.
Letterman started to edge away from the light and into darkness. He feared being harmed, he said.
"I want to reiterate how terrifying this is," he said, almost plaintively, a private man forced to bare his soul. "I'm motivated by nothing but guilt. I'm a towering mass of Lutheran Midwestern guilt."
The audience, sensing its cue, applauded.
He had them on the hook, ready to deliver the big plot twist that would wow them — or turn them against him. Viewers knew there was something "creepy" that Letterman had done, because he kept saying that was part of the goods someone had on him. Letterman, a careful wordsmith, repeated "creepy" enough to make sure it stuck.
Even a devoted fan could easily summon the specter of the most awful transgressions. Then Letterman dropped his bombshell: There were allegations that he had sex with women who worked for him.
Finally cowed by an unvarnished, unfunny remark, by the suggestion of improper behavior, the nasty whiff of sexual harassment in the workplace, the studio audience murmured uneasily.
Letterman made his final, brilliant move. He was honest.
"My response to that is, yes, I have. I have had sex with women who work on this show," he said. Married since March to a girlfriend of many years, and the father of a son born in 2003, Letterman didn't say when the encounters occurred.
The comedian, who has mocked so many celebrities for such transgressions, suddenly was himself a target. But the audience was back on his side and erupting in applause and cheers.
Letterman moved gracefully into the role of victim.
He invoked his need to protect the women involved, his family and himself. He ended with — shades of Nixon — his hope that he can "protect his job."
"Thank you for letting me bend your ears," he said. Then, back to the business at hand with guest Woody Harrelson.
"Good to be here on this auspicious night," the actor said with a sly but good-natured smile. All was well with "Late Show" and its host.
But what happens when the TV bubble bursts and people take another look?
As local food gains, local planners face decisions
Chickens finally can roost legally in Bozeman, Mont.
And it's thanks largely to a group of food-minded locals calling itself the Community Led Urban Chicken movement — that's right, CLUC — that persuaded city officials to lift restrictions on the increasingly popular practice of keeping backyard birds for eggs or meat.
Such encounters between so-called locavores (people who strive to eat locally produced foods) and bureaucrats are increasingly common as more people try to bring a taste of the farm to the city.
As the popularity of eating local has moved from the high-end restaurant scene to the mainstream, local food has become a priority issue for more mayors, city planners and zoning officials who must make decisions about everything from chicken coops and farmers markets to more expansive policies designed to boost consumption of fresh food.
"All across the country, city officials are beginning to realize that the food system isn't merely like other businesses — office supplies or electronics," said Nevin Cohen, an assistant professor of urban studies at The New School in New York City. "Food is something different that affects cities in a different way. So there's a role for government in figuring out how to get the food system right for a city."
Local food is a tiny part of the overall U.S. food market, but it's growing fast as consumers become more discerning about the quality of their food and where it comes from. The market research firm Packaged Facts estimates demand for local food will grow to $7 billion in 2011, up from around $4 billion in 2002.
Americans' growing taste for local food is most apparent in the farmers markets sprouting up nationwide like corn stalks in summer. The 4,900 farmers markets counted by the U.S. Department of Agriculture is double the number tallied in 1996.
But even something as benign-sounding as a place for local farmers to sell lettuce and apples can pose zoning or planning issues. Markets need variances if they're to be set up in noncommercial areas. Impacts on the neighborhoods need to be considered: Are there enough parking spaces? Will unsold vegetables will be left to rot on the curb? Will it be too noisy?
"People think it's going to be a two-week process, and it ends up being a six-month process," said Rob Sentner, a member of the local planning commission and open space committee in Upper Milford, Pa., near Allentown.
Sentner said behind-the-scenes work for a market in Upper Milford included tweaking local regulations to define what a farmers market is and demonstrating that it met state health and agricultural standards.
It's not any easier in bigger cites. Los Angeles Councilwoman Jan Perry, who has helped land four farmers markets in her district, said it takes tenacity and working around logistical issues. She recently helped launch Los Angeles' Food Policy Task Force, which will take a more systemic approach to bringing local produce across the city.
Those kinds of citywide efforts, many aimed at fighting obesity among poor people, are becoming common. San Francisco Mayor Gavin Newsom in July issued the city's first comprehensive food policy, which places an emphasis on regional food. New York City's Planning Commission in September approved a proposal to offer tax incentives to land more grocery stores that devote shelf space to fresh produce, meats and dairy.
Kimberley Hodgson, manager of the American Planning Association's Planning and Community Health Research Center, said more municipalities are starting to consider plans that take into account whole regions — city and country — as they consider the entire food chain from production to disposal.
"This is the new trend because planners are realizing that there is such an urban-rural linkage to the food system," Hodgson said. "So to just focus on the city or county food system really ignores the other parts of the system."
This is not always simple. Local officials sometimes must balance the desire for fresh food with the nuisance factor. New York City officials asked to legalize bee keeping within the city limits this year were essentially being asked to favor urban beekeepers and local honey lovers over residents who fear getting stung.
Then there is the chicken issue. It's illegal in many cities because of the noise and the mess. But with more people agitating to raise chickens in their back yards, a lot of municipal officials are rethinking their laws.
"People came up and said, 'Hey we like the idea of knowing where our food comes from. We like the idea of having a sustainable food source in our back yard,'" said Brit Fontenot, assistant to the Bozeman city manager. "'Why can't we look at removing this restriction?'"
Chapel Hill in North Carolina gave the OK to chicken keeping earlier this year, as did Buffalo, N.Y. The Iowa City Council is considering a backyard chicken ordinance, and officials in Washington — which in September opened a new farmers market just blocks from the White House — are considering easing restrictions on raising chickens within 50 feet of homes, which would allow more residents to raise the birds.
But officials in some other towns have balked. The Denver Suburb of Aurora, Colo., declined to allow it in June. Aurora Neighborhood Support Division manager Ron Moore said given factors like noise and sanitary concerns, city council member simply saw little reason to change the law.
In Bozeman, chicken keeping can officially commence on Oct. 29. CLUC organizer Alison Sweeney said she can't wait to move her chicks from a friend's house to within the city limits.
"I'm so excited," she said. "They're so precious."
Electric cars tax credit now eligible in Oklahoma
The Oklahoma Tax Commission on Thursday withdrew a rule that had blocked certain electrically powered vehicles from being eligible for a state tax credit.
It comes one week after an electric vehicle dealer sued the commission to block enforcement of the rule.
"They made a step in the right direction," said Roger Gaddis, owner of Ada Electric Cars, which sued the Tax Commission and its three commissioners to prevent enforcement of the rule.
Gaddis said the rule would prohibit buyers of his vehicles from claiming the electric car tax credit.
"They are going to make hundreds, if not thousands, of taxpayers in Oklahoma happy that they've taken the proper course of action and not tried to change the rules in the middle of the game," Gaddis said.
An existing state tax credit allows purchasers of electric vehicles to claim an income tax credit totaling 50 percent of the purchase price that can be spread over five years.
But the Tax Commission passed an emergency rule on Sept. 17 that excluded electric vehicles whose bodies are similar to a golf cart or go-cart instead of a traditional passenger automobile. Also excluded were vehicles designed and manufactured primarily for sporting or recreational purposes.
Commission spokeswoman Paula Ross said the purpose of the emergency rule was to clarify the standards for qualifying for the income tax credit. However, commissioners felt it had not achieved its purpose.
Ross said applications for the income tax credit will be reviewed according to guidelines that were in place before the rule was adopted.
Gaddis said the rule would have prohibited owners of the golf cart-like electric vehicles he sells from claiming the tax credit this year and in subsequent years, despite the vehicles exceeding federal highway standards for street-legal cars.
The vehicles, manufactured by Tomberlin, have been licensed with the Oklahoma Motor Vehicle Commission for more than three years and were engineered to be street-legal, low-speed vehicles, Gaddis said. The most popular model with no accessories sells for about $8,500, he said.
"We are extremely pleased that they have reversed course and put back in place what legislators intended," Gaddis said.
He said he will meet with his attorney before deciding whether to pursue the lawsuit, which was filed Sept. 23 in Garfield County District Court in Enid.
Entergy files plan to recover storm damage
Entergy Corp. is proposing the use of revenue bonds backed by surcharges on Louisiana customers' bills to pay for about $420 million in costs for restoring power following hurricanes Gustav and Ike last year, according to a regulatory filing.
Entergy Louisiana is asking the Louisiana Public Service Commission to recover $267.4 million in costs, plus another $200 million to replenish its storm reserve. Entergy Gulf States Louisiana wants $152.6 million and another $90 million for its storm reserve.
In its initial PSC filing in May, the two Entergy units said the reserve funds — established after hurricanes Katrina and Rita in 2005 — had kicked in $229.5 million to help with damage from Gustav and Ike.
If the full amount is approved by the PSC, Entergy Louisiana customers would see an increase of about $2.41 per 1,000 kilowatt hours, while Entergy Gulf States Louisiana customers would pay about $1.86 per 1,000 kilowatt hours, Entergy said.
By using bonds, Entergy Louisiana customers would save $49.5 million to $139.7 million, while Entergy Gulf States Louisiana customers would save $25.7 million to $88.5 million, Entergy said. Savings would depend upon interest rates when the bonds are placed.
Customers of the two Entergy units already are paying about $1 billion over 10 years as the result of Katrina and Rita. Those restorations also are being paid through revenue bonds. Under the law, power companies are entitled to recover any storm restoration costs determined by the PSC to have been incurred properly.
At the height of Gustav, which hit Sept. 1, 2008, there were 829,000 Entergy customers in Louisiana without power. At the height of Ike, which struck 13 days later, power had been cut to 141,378 customers.
If the PSC approves, the bonds would be issued by the Louisiana Public Facilities Authority and the proceeds loaned to a state entity known as the Louisiana Utilities Restoration Corp. Customer surcharges would go to the LURC to repay the bonds.
The use of such bonds have been used in other states for utilities to recover storm costs and reduce interest costs for customers.
lunes, 21 de septiembre de 2009
Potash shares drop after company cuts forecast
Shares of Potash Corp. of Saskatchewan Inc. fell Monday, days after the Canadian fertilizer company slashed its third-quarter and full-year 2009 profit forecast.
The company said Friday it lowered the forecast because of lagging sales volume, and that demand continued to be slow and fertilizer distributors had limited their restocking orders.
Potash lowered its 2009 profit estimate to a range of $3.25 to $3.75 per share, lower than a $4.16 per share consensus estimate of analysts on Wall Street. In July, the company predicted $4 to $5 per share for the year.
The company also lowered its third-quarter estimate to the low end of a range of 80 cents to $1.20 per share. Analysts surveyed by Thomson Reuters expect 93 cents per share.
On Monday, Citi Investment Research analyst P.J. Juvekar wrote in a client note that his firm was lowering its 2009 estimates for Potash by 55 cents, to $3.70 per share, on weak volumes. Its 2010-11 estimates remain largely unchanged, however.
He noted that Potash had significantly cut its 2009 earnings guidance for the third time this year on weaker-than-expected potash volumes.
Last week, Citi downgraded fertilizer stocks because of a late harvest that may reduce the fall application of fertilizer and lower farm profitability, among other factors.
"Buyers are waiting, producer inventories are at historic highs, and retailers are living hand-to-mouth," Juvekar wrote.
Potash shares sank $5.86, or 6 percent, to $91.28 in morning trading.
The company said Friday it lowered the forecast because of lagging sales volume, and that demand continued to be slow and fertilizer distributors had limited their restocking orders.
Potash lowered its 2009 profit estimate to a range of $3.25 to $3.75 per share, lower than a $4.16 per share consensus estimate of analysts on Wall Street. In July, the company predicted $4 to $5 per share for the year.
The company also lowered its third-quarter estimate to the low end of a range of 80 cents to $1.20 per share. Analysts surveyed by Thomson Reuters expect 93 cents per share.
On Monday, Citi Investment Research analyst P.J. Juvekar wrote in a client note that his firm was lowering its 2009 estimates for Potash by 55 cents, to $3.70 per share, on weak volumes. Its 2010-11 estimates remain largely unchanged, however.
He noted that Potash had significantly cut its 2009 earnings guidance for the third time this year on weaker-than-expected potash volumes.
Last week, Citi downgraded fertilizer stocks because of a late harvest that may reduce the fall application of fertilizer and lower farm profitability, among other factors.
"Buyers are waiting, producer inventories are at historic highs, and retailers are living hand-to-mouth," Juvekar wrote.
Potash shares sank $5.86, or 6 percent, to $91.28 in morning trading.
Budget mess likely to resurface in Pa.'s '10 races
Campaign considerations are never far from the minds of Pennsylvania's state lawmakers, and these days they have a new worry — the budget standoff that has sunk their poll numbers.
Next year, when all 203 House seats and half the 50-member Senate will be up for election, voters will issue their verdict on the process that has shown in vivid relief just how hard it can be for a divided government to find common ground.
The backlash could encourage more challengers and prompt a slew of retirements, as occurred following widespread public disgust over passage of the 2005 pay raise law. Some voters will be eager to punish legislators who voted for higher taxes, or even for simply floating them. Some will consider program cuts draconian, while others will think they did not go far enough.
Gov. Ed Rendell and senior lawmakers did finally announce a breakthrough deal late Friday, but their constituents will be not be asking them to repeat the drawn-out process next year.
"They understand that the founding fathers could go to Philadelphia in the middle of summer and write a document that endured for over two centuries, and that the state Legislature should be able to go to their air-conditioned offices and get a budget done — and the same with the governor," veteran Republican political consultant John Brabender said.
Next year's elections have loomed over the negotiations, because the atmosphere for raising new taxes will be even more hostile, but the downward economic pressure that devastated revenues and produced the current deficit are unlikely to suddenly disappear.
"If we have this situation next year, it would be harmful to the Democrats, the Democratic governor and the Democratic majority in the House, and that's why it's important to get it right now for Pennsylvanians, and get it right for the party," said Rep. Mike Gerber, D-Montgomery, who heads up his caucus' campaign efforts.
Many Republicans are licking their chops over the tax issue, and the House Republicans were so adamantly opposed to the deal's new taxes and the overall size of the budget that their leadership withdrew from the endgame negotiations.
House Minority Leader Sam Smith, R-Jefferson, said he felt he could not, in good faith, be a party to discussions of tax increases that his members strictly oppose.
"If you're in the room and you're debating what taxes to raise and what taxes not to raise, and then you turn around and say, 'I'm not voting for that,' that's kind of negotiating in bad faith, and I'm not going to do that," he said.
House Democrats maintain that voters will harshly judge the Republicans' disengagement during the late-in-the-game budget talks.
"When you don't come to the table and you don't represent your concerns, they're underrepresented," said Majority Leader Todd Eachus, D-Luzerne. "For me, on a personal level, it's the wrong decision."
Senate President Joe Scarnati, R-Jefferson, said campaign researchers will be looking back much farther than just this year when it comes to tax votes.
"We can pick out somebody who's adamantly opposed to taxes this year that voted for a bunch of taxes years ago," he said.
Democrats will be trying to sell voters on their efforts to preserve funding for human services, education, environmental initiatives, economic development and other programs, Gerber said.
"There are Pennsylvanians whose jobs and lives are on the line, and our actions will have a very serious impact on those Pennsylvanians," he said.
Republicans can take encouragement by the likelihood that Pennsylvania's electorate will probably look a lot different in November 2010 than the one that handed President Barack Obama the state by a 10.4 percentage-point margin last year.
"It'll be a) whiter, and b) older, and probably more conservative and that will probably benefit Republicans," said Franklin & Marshall College political scientist Terry Madonna.
He said that although it may be a good season to run against incumbents, he warned that the level of anti-Harrisburg sentiment is not like it was in 2006, and that incumbents have built-in protections.
They also have 13 months to try to change the subject.
Next year, when all 203 House seats and half the 50-member Senate will be up for election, voters will issue their verdict on the process that has shown in vivid relief just how hard it can be for a divided government to find common ground.
The backlash could encourage more challengers and prompt a slew of retirements, as occurred following widespread public disgust over passage of the 2005 pay raise law. Some voters will be eager to punish legislators who voted for higher taxes, or even for simply floating them. Some will consider program cuts draconian, while others will think they did not go far enough.
Gov. Ed Rendell and senior lawmakers did finally announce a breakthrough deal late Friday, but their constituents will be not be asking them to repeat the drawn-out process next year.
"They understand that the founding fathers could go to Philadelphia in the middle of summer and write a document that endured for over two centuries, and that the state Legislature should be able to go to their air-conditioned offices and get a budget done — and the same with the governor," veteran Republican political consultant John Brabender said.
Next year's elections have loomed over the negotiations, because the atmosphere for raising new taxes will be even more hostile, but the downward economic pressure that devastated revenues and produced the current deficit are unlikely to suddenly disappear.
"If we have this situation next year, it would be harmful to the Democrats, the Democratic governor and the Democratic majority in the House, and that's why it's important to get it right now for Pennsylvanians, and get it right for the party," said Rep. Mike Gerber, D-Montgomery, who heads up his caucus' campaign efforts.
Many Republicans are licking their chops over the tax issue, and the House Republicans were so adamantly opposed to the deal's new taxes and the overall size of the budget that their leadership withdrew from the endgame negotiations.
House Minority Leader Sam Smith, R-Jefferson, said he felt he could not, in good faith, be a party to discussions of tax increases that his members strictly oppose.
"If you're in the room and you're debating what taxes to raise and what taxes not to raise, and then you turn around and say, 'I'm not voting for that,' that's kind of negotiating in bad faith, and I'm not going to do that," he said.
House Democrats maintain that voters will harshly judge the Republicans' disengagement during the late-in-the-game budget talks.
"When you don't come to the table and you don't represent your concerns, they're underrepresented," said Majority Leader Todd Eachus, D-Luzerne. "For me, on a personal level, it's the wrong decision."
Senate President Joe Scarnati, R-Jefferson, said campaign researchers will be looking back much farther than just this year when it comes to tax votes.
"We can pick out somebody who's adamantly opposed to taxes this year that voted for a bunch of taxes years ago," he said.
Democrats will be trying to sell voters on their efforts to preserve funding for human services, education, environmental initiatives, economic development and other programs, Gerber said.
"There are Pennsylvanians whose jobs and lives are on the line, and our actions will have a very serious impact on those Pennsylvanians," he said.
Republicans can take encouragement by the likelihood that Pennsylvania's electorate will probably look a lot different in November 2010 than the one that handed President Barack Obama the state by a 10.4 percentage-point margin last year.
"It'll be a) whiter, and b) older, and probably more conservative and that will probably benefit Republicans," said Franklin & Marshall College political scientist Terry Madonna.
He said that although it may be a good season to run against incumbents, he warned that the level of anti-Harrisburg sentiment is not like it was in 2006, and that incumbents have built-in protections.
They also have 13 months to try to change the subject.
Helix shares fall as analyst downgrades stock
Shares of Helix Energy Solutions Group Inc. fell on Monday as an analyst lowered his rating on the oil services provider's stock, citing significant share price appreciation and a lack of near-term growth drivers.
Helix shares fell 48 cents, or 3.1 percent, to $14.95 in morning trading. Shares are still well above their 2009 low of $2.70 per share in February.
The stock has had a great run, said Raymond James analyst J. Marshall Adkins, who said that was why he downgraded his rating to "Outperform" from "Strong Buy."
Helix recently sold its remaining stake in Cal Dive International Inc., a contractor for services to offshore energy companies, in three separate transactions, raising over $500 million of cash, a move Adkins believes is its last significant near-term balance sheet-related catalyst.
"Although we expect that its production facilities and exploration and production assets will eventually be monetized as well, this is not a seller's market and Helix is no longer under any pressure to have to sell immediately," Adkins said.
Looking ahead, Adkins sees long term value in the company's assets. He believes the company could one day be worth as much as $25 to $30 per share. Adkins raised his 12-month target price to $17.50 from $15.50.
Helix shares fell 48 cents, or 3.1 percent, to $14.95 in morning trading. Shares are still well above their 2009 low of $2.70 per share in February.
The stock has had a great run, said Raymond James analyst J. Marshall Adkins, who said that was why he downgraded his rating to "Outperform" from "Strong Buy."
Helix recently sold its remaining stake in Cal Dive International Inc., a contractor for services to offshore energy companies, in three separate transactions, raising over $500 million of cash, a move Adkins believes is its last significant near-term balance sheet-related catalyst.
"Although we expect that its production facilities and exploration and production assets will eventually be monetized as well, this is not a seller's market and Helix is no longer under any pressure to have to sell immediately," Adkins said.
Looking ahead, Adkins sees long term value in the company's assets. He believes the company could one day be worth as much as $25 to $30 per share. Adkins raised his 12-month target price to $17.50 from $15.50.
Lennar posts wider loss in 3Q, but market improves
Homebuilder Lennar Corp. reported a wider loss in its fiscal third quarter as it continued to write down the value of land and unsold homes, but executives say the company will be profitable next year assuming the economy remains stable.
Orders for new homes were down 8 percent from a year earlier, but they increased each month during the quarter ending Aug. 31. Another positive sign: the Miami-based company had more sales in the works at the end of last month than any time since August 2008.
"We're gaining confidence that we're getting much closer to the end of this housing-led downturn," Stuart Miller, Lennar's president and CEO, said in a conference call, noting that consumers are feeling much more confident about purchasing a home.
While the housing market and economy are still tentative, Miller said the market "feels materially better than the absolute hopelessness that had existed for so long."
Still, homebuilders like Lennar face big unknowns. A tax credit of up to $8,000 for first-time homebuyers expires Nov. 30, and lawmakers have yet to decide whether to extend it. While the Federal Reserve has been able to keep mortgage rates near historic lows, it's unclear how long that will last.
Lennar, which caters to first-time homeowners, sold 2,691 homes, down 29 percent from year-ago levels. The average sales price was $239,000, down 11 percent, but stronger demand allowed Lennar to reduce the incentives it offered homebuyers to $42,200 per home, down from $45,900 a year ago, and markedly better than the $52,600 in offered during the second fiscal quarter.
The company reported Monday that it lost $171.6 million, or 97 cents per share, in the three months ended in August. That includes 76 cents per share in write-downs and tax adjustments, and compares with a loss of $89 million, or 56 cents per share, a year earlier.
Revenue fell 35 percent to $720.7 million from $1.11 billion.
Analysts were expecting a loss of 46 cents a share on revenue of $774.4 million, and appeared disappointed with the company's results. Lennar's stock was off 58 cents at $15.96 in late-morning trading.
The Miami-based builder raised $99 million through a stock offering in the period and ended the quarter with a cash cushion of $1.34 billion and no outstanding borrowings under its credit facility.
Lennar sells homes in 17 states and was ranked the fourth-largest homebuilder last year by Builder magazine.
Orders for new homes were down 8 percent from a year earlier, but they increased each month during the quarter ending Aug. 31. Another positive sign: the Miami-based company had more sales in the works at the end of last month than any time since August 2008.
"We're gaining confidence that we're getting much closer to the end of this housing-led downturn," Stuart Miller, Lennar's president and CEO, said in a conference call, noting that consumers are feeling much more confident about purchasing a home.
While the housing market and economy are still tentative, Miller said the market "feels materially better than the absolute hopelessness that had existed for so long."
Still, homebuilders like Lennar face big unknowns. A tax credit of up to $8,000 for first-time homebuyers expires Nov. 30, and lawmakers have yet to decide whether to extend it. While the Federal Reserve has been able to keep mortgage rates near historic lows, it's unclear how long that will last.
Lennar, which caters to first-time homeowners, sold 2,691 homes, down 29 percent from year-ago levels. The average sales price was $239,000, down 11 percent, but stronger demand allowed Lennar to reduce the incentives it offered homebuyers to $42,200 per home, down from $45,900 a year ago, and markedly better than the $52,600 in offered during the second fiscal quarter.
The company reported Monday that it lost $171.6 million, or 97 cents per share, in the three months ended in August. That includes 76 cents per share in write-downs and tax adjustments, and compares with a loss of $89 million, or 56 cents per share, a year earlier.
Revenue fell 35 percent to $720.7 million from $1.11 billion.
Analysts were expecting a loss of 46 cents a share on revenue of $774.4 million, and appeared disappointed with the company's results. Lennar's stock was off 58 cents at $15.96 in late-morning trading.
The Miami-based builder raised $99 million through a stock offering in the period and ended the quarter with a cash cushion of $1.34 billion and no outstanding borrowings under its credit facility.
Lennar sells homes in 17 states and was ranked the fourth-largest homebuilder last year by Builder magazine.
Moody's: Commercial real estate prices falling
Prices for commercial real estate suffered steep declines in July and the volume of transactions remained low, according to a report issued Monday by Moody's Investors Service.
The Moody's/REAL Commercial Property Price Indices (CPPI) was down 5.1 percent from June after slipping just 1 percent the previous month.
The index is now 30.8 percent below its year-ago level and 38.7 percent below its peak in October 2007.
Transaction volume remains anemic as well. For the first seven months of the year, the market averaged about 375 sales per month, Moody's said. That compares to about 1,100 a month over the same time last year.
Prices for apartments in the East fared better than in other regions, falling just 6 percent in the past year. Nationally, apartment prices tumbled 24.4 percent in the past year. Apartments in the South posted the steepest drop, at 44.2 percent.
Florida apartments have also seen dramatic declines, with prices now 49.8 percent below their peak levels.
The Moody's/REAL Commercial Property Price Indices (CPPI) was down 5.1 percent from June after slipping just 1 percent the previous month.
The index is now 30.8 percent below its year-ago level and 38.7 percent below its peak in October 2007.
Transaction volume remains anemic as well. For the first seven months of the year, the market averaged about 375 sales per month, Moody's said. That compares to about 1,100 a month over the same time last year.
Prices for apartments in the East fared better than in other regions, falling just 6 percent in the past year. Nationally, apartment prices tumbled 24.4 percent in the past year. Apartments in the South posted the steepest drop, at 44.2 percent.
Florida apartments have also seen dramatic declines, with prices now 49.8 percent below their peak levels.
Raytheon gets $42M Navy deal for pod systems
MCKINNEY, Texas (AP) - Raytheon Co. received a $42 million contract from the Navy to provide 14 infrared pod systems and spares to the Swiss Air Force, the company said Monday.
The advanced targeting forward looking pod system, ATFLIR, will be delivered in 2010 to the Swiss government for use on their F/A-18 Hornet aircraft.
The additional pods will give the Swiss Air Force advanced sensor and laser-tracking capability, according to Raytheon.
Shares of the Waltham, Mass.-based company fell 66 cents to $47.67 in morning trading.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
The advanced targeting forward looking pod system, ATFLIR, will be delivered in 2010 to the Swiss government for use on their F/A-18 Hornet aircraft.
The additional pods will give the Swiss Air Force advanced sensor and laser-tracking capability, according to Raytheon.
Shares of the Waltham, Mass.-based company fell 66 cents to $47.67 in morning trading.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
martes, 25 de agosto de 2009
Kan. lawmakers to discuss unemployment trust fund
TOPEKA, Kan. (AP) - Kansas legislators are planning to look into the health of the state fund paying benefits to unemployed workers.
The House Appropriations Committee was scheduled to take testimony Tuesday from state Labor Secretary Jim Garner.
The Department of Labor announced earlier this month that it might have to borrow money from the federal government to continue paying unemployment benefits.
The state's Unemployment Insurance Trust Fund started the year with a balance of $566 million and saw it slip below $350 million this month. Department of Labor officials worry the fund could run out of money by November.
An advisory council plans to meet Sept. 3 to discuss long-term plans for shoring up the fund, which could lead to higher unemployment taxes on businesses.
The House Appropriations Committee was scheduled to take testimony Tuesday from state Labor Secretary Jim Garner.
The Department of Labor announced earlier this month that it might have to borrow money from the federal government to continue paying unemployment benefits.
The state's Unemployment Insurance Trust Fund started the year with a balance of $566 million and saw it slip below $350 million this month. Department of Labor officials worry the fund could run out of money by November.
An advisory council plans to meet Sept. 3 to discuss long-term plans for shoring up the fund, which could lead to higher unemployment taxes on businesses.
Burger King 4Q profit rises despite sales drop
CHICAGO (AP) - Burger King Holdings Inc.'s fiscal fourth-quarter profit rose despite a drop in sales as costs fell in the United States, the company said Tuesday.
The nation's No. 2 hamburger chain earned $58.9 million, or 43 cents per share, in the three months that ended June 30. That compares with a profit of $50.6 million, or 37 cents per share, in the same period a year earlier.
The earnings beat Wall Street's estimate of 33 cents per share.
Revenue fell 2.4 percent to $629.9 million. Analysts had expected revenue of $632 million.
Same-store sales, or sales at locations open at least a year, slid 2.4 percent in the quarter.
The profit increase came even as sales at U.S. and Canadian restaurants open at least a year fell 4.5 percent, adjusted for currency fluctuations, because of the poor economy that's prompting more people to eat at home and promotions by competitors.
"Our financial fundamentals are solid and our cash flow continues to be strong," Chief Financial Officer Ben Wells said in a statement.
Miami-based Burger King said it added 115 net new restaurants during the period.
The company also said margins at its restaurants in the U.S. and Canada improved to 13.5 percent from 12.2 percent a year before.
For the year, Burger King's profit rose 6 percent to $200.1 million, or $1.46 per share, from $189.6 million, or $1.38 per share, in 2008. Adjusted 2009 profit of $1.48 per share beat analysts' forecast of $1.38 per share.
Annual revenue rose 3 percent to $2.54 billion from $2.45 billion, matching analyst estimates.
Burger King became a publicly traded company in 2006. The IPO, which at the time was one of the largest for the restaurant sector, raised nearly $400 million in net proceeds.
Since then, shares climbed to more than $30, up from the IPO price of $17, but then fell back to near their original offering price. Meanwhile, its No. 1 rival, McDonald's Corp., has seen its share price climb almost 62 percent in the same period while posting consistently strong results.
On Tuesday, Burger King shares climbed $1.67, or 9.5 percent, to $19.33 in morning trading.
The nation's No. 2 hamburger chain earned $58.9 million, or 43 cents per share, in the three months that ended June 30. That compares with a profit of $50.6 million, or 37 cents per share, in the same period a year earlier.
The earnings beat Wall Street's estimate of 33 cents per share.
Revenue fell 2.4 percent to $629.9 million. Analysts had expected revenue of $632 million.
Same-store sales, or sales at locations open at least a year, slid 2.4 percent in the quarter.
The profit increase came even as sales at U.S. and Canadian restaurants open at least a year fell 4.5 percent, adjusted for currency fluctuations, because of the poor economy that's prompting more people to eat at home and promotions by competitors.
"Our financial fundamentals are solid and our cash flow continues to be strong," Chief Financial Officer Ben Wells said in a statement.
Miami-based Burger King said it added 115 net new restaurants during the period.
The company also said margins at its restaurants in the U.S. and Canada improved to 13.5 percent from 12.2 percent a year before.
For the year, Burger King's profit rose 6 percent to $200.1 million, or $1.46 per share, from $189.6 million, or $1.38 per share, in 2008. Adjusted 2009 profit of $1.48 per share beat analysts' forecast of $1.38 per share.
Annual revenue rose 3 percent to $2.54 billion from $2.45 billion, matching analyst estimates.
Burger King became a publicly traded company in 2006. The IPO, which at the time was one of the largest for the restaurant sector, raised nearly $400 million in net proceeds.
Since then, shares climbed to more than $30, up from the IPO price of $17, but then fell back to near their original offering price. Meanwhile, its No. 1 rival, McDonald's Corp., has seen its share price climb almost 62 percent in the same period while posting consistently strong results.
On Tuesday, Burger King shares climbed $1.67, or 9.5 percent, to $19.33 in morning trading.
Pa. Senate panel OKs municipal pension reform plan
HARRISBURG, Pa. (AP) - A Senate panel has unanimously endorsed a bill to reform Pennsylvania's municipal pension laws and allow the state's largest city to increase taxes to help fix its ailing retirement system.
An amendment the Senate Finance Committee approved Monday night would overhaul the pension law, setting new financial standards for the thousands of municipal funds in the state and providing a combination of relief and regulatory intervention for those that run into trouble.
The amendment, which could go to the floor for a full Senate vote as early as Wednesday, also would allow Philadelphia to raise its sales tax to 8 percent from 7 percent for five years. The tax hike would raise an estimated $580 million that would be used to pay off pension contributions that the city has deferred.
The House has approved legislation that includes a different set of pension reforms as well as the Philadelphia tax authorization. Both chambers would have to approve identical legislation before any reforms could take effect.
Nutter, who has said the tax increase is necessary to avert the layoffs of thousands of Philadelphia city employees in a matter of weeks, attended Monday's committee meeting and was circumspect after the vote.
"This is one step closer" to passing the bill, Nutter said, noting that he had not reviewed the final version of the Senate amendment.
The worst-case scenario would be "an unending series of actions" by the two chambers, Nutter said.
Under the amendment, Philadelphia would have to freeze pension benefits for current employees and adopt revised benefits for new employees that cost no more than 75 percent of the existing plan.
Sen. Patrick Browne, the committee chairman and main sponsor of the amendment, said 40 percent of Philadelphia's payroll goes into pension contributions in contrast with 4 percent for state government.
"They're paying an enormous amount of the city resources to pay their pension costs, and we need to recognize that and do something about that," the Lehigh County Republican said.
The amendment also would allow the Pennsylvania Municipal Retirement System to take over municipal funds whose liabilities exceed their assets by more than 50 percent.
Pittsburgh is among the roughly three dozen municipalities in that category. The amendment also would dedicate 6.75 percent of the money Pittsburgh collects from parking to help pay the city's minimum pension obligation. It would allow the city to increase the tax if it sells or leases its parking garages.
The amendment also would bar elected officials from participating in plans that allow employees eligible to retire to pick a retirement date four years in the future, then amass pension payments at a 4.5 percent interest while continuing to work and collect their salaries.
An amendment the Senate Finance Committee approved Monday night would overhaul the pension law, setting new financial standards for the thousands of municipal funds in the state and providing a combination of relief and regulatory intervention for those that run into trouble.
The amendment, which could go to the floor for a full Senate vote as early as Wednesday, also would allow Philadelphia to raise its sales tax to 8 percent from 7 percent for five years. The tax hike would raise an estimated $580 million that would be used to pay off pension contributions that the city has deferred.
The House has approved legislation that includes a different set of pension reforms as well as the Philadelphia tax authorization. Both chambers would have to approve identical legislation before any reforms could take effect.
Nutter, who has said the tax increase is necessary to avert the layoffs of thousands of Philadelphia city employees in a matter of weeks, attended Monday's committee meeting and was circumspect after the vote.
"This is one step closer" to passing the bill, Nutter said, noting that he had not reviewed the final version of the Senate amendment.
The worst-case scenario would be "an unending series of actions" by the two chambers, Nutter said.
Under the amendment, Philadelphia would have to freeze pension benefits for current employees and adopt revised benefits for new employees that cost no more than 75 percent of the existing plan.
Sen. Patrick Browne, the committee chairman and main sponsor of the amendment, said 40 percent of Philadelphia's payroll goes into pension contributions in contrast with 4 percent for state government.
"They're paying an enormous amount of the city resources to pay their pension costs, and we need to recognize that and do something about that," the Lehigh County Republican said.
The amendment also would allow the Pennsylvania Municipal Retirement System to take over municipal funds whose liabilities exceed their assets by more than 50 percent.
Pittsburgh is among the roughly three dozen municipalities in that category. The amendment also would dedicate 6.75 percent of the money Pittsburgh collects from parking to help pay the city's minimum pension obligation. It would allow the city to increase the tax if it sells or leases its parking garages.
The amendment also would bar elected officials from participating in plans that allow employees eligible to retire to pick a retirement date four years in the future, then amass pension payments at a 4.5 percent interest while continuing to work and collect their salaries.
France seeks curbs on bankers' bonuses
French President Nicolas Sarkozy was meeting Tuesday with banking chiefs as he sought to curb the risk-taking bonus culture that fueled the global financial crisis.
The hot-button issue of bonuses, for years debated among French leftists, was rekindled three weeks ago by reports that BNP Paribas SA has set aside around euro1 billion ($1.43 billion) for bonuses in its investment banking division.
The government injected euro5.1 billion into France's largest bank to keep it lending during the crisis. French banks Societe Generale, Credit Agricole and the parent company of Natixis were also helped by the government's euro22 billion scheme.
French government spokesman Luc Chatel said Tuesday that banks "mustn't act as if nothing has happened," adding that the crisis has shown the banks must change the way they operate and become more transparent.
Sarkozy has argued since the crash for a stricter regulation of financial markets, and he wants world leaders to agree on global guidelines on bonuses at the G-20 summit of leading nations in Pittsburgh in September.
In an interview Tuesday with France-2 television, Chatel called on banks that received government help to grant loans to small businesses and individuals.
The debate echoes public outrage in the United States, where banks have been criticized for paying out big bonuses while accepting taxpayer money.
Citigroup, which is now one-third owned by the U.S. government as a result of the bailout, gave 738 of its employees bonuses of at least $1 million even after it lost $18.7 billion during the year.
In contrast, the outcry over 2009 bonus payments at BNP Paribas, which was profitable last year, came as it announced a net profit of euro1.6 billion ($2.3 billion) in the second quarter. The reported funds set aside for bonuses is about euro59,000 ($85,000) per employee, although payments will depend on the bank's performance over the rest of the year.
Jean-Claude Mailly, head of the Force Ouvriere workers union, called Tuesday for stricter rules over bonuses, according to the Le Figaro newspaper.
Meanwhile, Paris Europlace, an organization that promotes Paris as a financial center, sought to ensure France remains competitive.
"It is essential that the new measures which may be applied to French banks are also applicable simultaneously at the international level, otherwise Paris risks loosing competitiveness and seeing activities and jobs shift to competing financial centers," said Gerard Mestrallet, the GDF Suez CEO who is also president of Paris Europlace.
At the G-20 summit in April, world leaders agreed that banks should ensure that their "compensation structures are consistent with firms' long-term goals and prudent risk taking."
The hot-button issue of bonuses, for years debated among French leftists, was rekindled three weeks ago by reports that BNP Paribas SA has set aside around euro1 billion ($1.43 billion) for bonuses in its investment banking division.
The government injected euro5.1 billion into France's largest bank to keep it lending during the crisis. French banks Societe Generale, Credit Agricole and the parent company of Natixis were also helped by the government's euro22 billion scheme.
French government spokesman Luc Chatel said Tuesday that banks "mustn't act as if nothing has happened," adding that the crisis has shown the banks must change the way they operate and become more transparent.
Sarkozy has argued since the crash for a stricter regulation of financial markets, and he wants world leaders to agree on global guidelines on bonuses at the G-20 summit of leading nations in Pittsburgh in September.
In an interview Tuesday with France-2 television, Chatel called on banks that received government help to grant loans to small businesses and individuals.
The debate echoes public outrage in the United States, where banks have been criticized for paying out big bonuses while accepting taxpayer money.
Citigroup, which is now one-third owned by the U.S. government as a result of the bailout, gave 738 of its employees bonuses of at least $1 million even after it lost $18.7 billion during the year.
In contrast, the outcry over 2009 bonus payments at BNP Paribas, which was profitable last year, came as it announced a net profit of euro1.6 billion ($2.3 billion) in the second quarter. The reported funds set aside for bonuses is about euro59,000 ($85,000) per employee, although payments will depend on the bank's performance over the rest of the year.
Jean-Claude Mailly, head of the Force Ouvriere workers union, called Tuesday for stricter rules over bonuses, according to the Le Figaro newspaper.
Meanwhile, Paris Europlace, an organization that promotes Paris as a financial center, sought to ensure France remains competitive.
"It is essential that the new measures which may be applied to French banks are also applicable simultaneously at the international level, otherwise Paris risks loosing competitiveness and seeing activities and jobs shift to competing financial centers," said Gerard Mestrallet, the GDF Suez CEO who is also president of Paris Europlace.
At the G-20 summit in April, world leaders agreed that banks should ensure that their "compensation structures are consistent with firms' long-term goals and prudent risk taking."
lunes, 9 de marzo de 2009
$5M Castroneves never got key to tax evasion trial
To this day, race car driver and "Dancing With the Stars" winner Helio Castroneves hasn't seen a single dime of $5 million in licensing money he was promised under a 1999 contract with Penske Racing. It's either been parked at Penske or is still idling in a Dutch investment account.
But the Internal Revenue Service says Castroneves owes U.S. income taxes on the money anyway, contending the 33-year-old driver can't avoid tax by simply refusing cash to which he's entitled. A complex concept known as "constructive receipt" is at the heart of the prosecution's case against the two-time Indianapolis 500 winner.
Testimony resumes Tuesday in the tax trial of Castroneves, his business-manager sister Katiucia Castroneves — both originally from Sao Paulo, Brazil — and his lawyer Alan Miller of Birmingham, Mich. All are charged in a seven-count federal indictment with conspiracy and tax evasion from 1999 to 2004.
The three defendants are facing more than six years behind bars if convicted. Trial is expected to last about a month.
Experts say jurors will have to decide if the Castroneves deal was real or contrived to make it appear he didn't have control of his Penske money.
"What the government is saying is, if you are entitled to some cash, and you leave it in your mother's bank account, it's still your cash," said Chas Roy-Chowdrey, a tax expert with the global industry group Association of Chartered Certified Accountants.
Castroneves is a top Indy Racing League driver, winning the Indy 500 in 2001 and 2002 and finishing second in 2003. In 2007, he gained even greater fame by winning TV's "Dancing With The Stars" competition.
Issues at trial have their origins in the final event of1999 of the Championship Auto Racing Teams, or CART — at the time a rival of the Indy Racing League. On Oct. 31 of that year in Fontana, Calif., Castroneves was driving in the final race for his soon-to-be-disbanded Hogan team and Greg Moore was about to sign a lucrative new contract with Penske Racing.
Moore crashed and was killed. In less than a week, Penske signed Castroneves, using Moore's contract by simply crossing out the old names and amounts and replacing them in handwritten notations. Miller negotiated that deal for $6 million — $1 million paid directly to Castroneves and $5 million to license Castroneves' name and image.
At first, the $5 million was supposed to flow to a Panamanian corporation called Seven Promotions.
In mid-December 1999, Miller sent a letter to Penske asking that the transaction be halted, according to trial testimony. Penske's general counsel, Lawrence Bluth, said the company held onto the Castroneves cash until January 2003, when it was invested with Netherlands firm Fintage Licensing B.V., where it remains today.
"We were ready to make payments to Seven Promotions. We were told not to," Bluth testified.
The IRS and federal prosecutors charge that arrangement was a tax dodge.
They contend Castroneves secretly controlled Seven Promotions — disputed vigorously by the defense — and should have paid U.S. taxes under the "constructive receipt" doctrine as soon as Penske was ready to start cutting checks.
"The individual's wishes do not control," said Assistant U.S. Attorney Matt Axelrod. "A taxpayer may not deliberately turn his back upon income and thereby select the year for which he will report it."
Miller, a former professional football player and architect of the Castroneves contract, contends the IRS is wrong. In court papers, Miller attorney Robert Bennett said Castroneves never had control of the $5 million and therefore owes no tax.
Castroneves planned to pay the IRS when the "deferred royalty agreement" — a way of delaying income described as similar to a 401(k) — at Fintage comes due to him in May of this year, defense lawyers say. It's not unusual for athletes to receive some compensation at later dates, they say.
"Athletes ordinarily have a short period of economic productivity in their youth, and they may not be responsible enough to manage the money for a lifetime if they receive it all at once," Bennett said.
Axelrod, however, said the whole arrangement is fictional, with Castroneves' ultimate goal to move out of the U.S. to a tax haven such as Monaco where he would eventually get the Penske money tax-free.
Castroneves attorney Roy Black said the driver, who lives in a $2.2 million home in Coral Gables, never schemed to hide money from the IRS. He said in opening statements that the driver knows nothing about U.S. tax laws and relied on experts to handle his finances.
"They've come up with a fiction," Black said.
As W.Va. coal companies expand, graves go missing
Walter Young can't find his great-grandmother's grave. The coal company that had it moved doesn't know where the remains ended up.
"It always looked like a safe, good place nobody would bother," the 63-year-old retiree said of the cemetery along Pigeon Creek where his relative, Martha Curry, was buried. "It was up on a hill."
But that hill was in West Virginia's southern coalfields, and over the years, it changed hands. The land around and under the cemetery passed from one coal company to another as mines grew up around it. Now, no one is sure where Young's great-grandmother was ultimately laid to rest.
The loss is a problem that resonates across West Virginia as small family cemeteries and unmarked graves get in the way of mining, timbering and development interests. Advocates are asking state lawmakers this year to enact regulations that would require better tracking of the graves and protect families who believed that their loved ones wouldn't be disturbed.
"We just keep hearing about more and more cases of it," said Carol Warren, a project coordinator with the Ohio Valley Environmental Coalition.
Young hadn't visited his great-grandmother's grave regularly since the 1970s, but wanted to check up on it when he realized the cemetery, near Delbarton in the southwestern corner of the state, was near a site being built to store coal waste. When he called for permission to cross company property, he was dumbfounded by the response. The company that now operates the site didn't know where the grave had been relocated.
"I wanted to secure in my mind that this cemetery was OK. I found out it wasn't OK. It was gone," Young said.
The graves get lost because sometimes, because of nearby mining, families have trouble gaining access to burial grounds. Sometimes, companies don't give proper public notice before removing or disturbing the graves.
One measure being pushed by the coalition would triple the no-disturbance buffer zone around cemeteries from 100 feet to 300 feet. Another would delete seemingly contradictory language in a law intended to protect human remains, grave artifacts and markers. Currently the law says it isn't meant to "interfere" with normal activities by landowners, whether they be farmers, developers or coal operators.
The current law is vague and allows individuals to waive any responsibility, said House Health and Human Resources Chairman Don Perdue, a co-sponsor on two measures.
"The more vague a law is, the less likely it is to be enforced," said Perdue, D-Wayne. "I really believe that we have to make sure that hallowed ground is not hollowed ground or harrowed ground."
A third proposal would require coal companies to explain ahead of time how proposed surface mines would affect nearby cemeteries. And a fourth would allow West Virginia University's extension service to use Global Positioning System to map and plot small cemeteries near mountaintop removal mines.
"Let's begin the process of trying to document where all these small cemeteries are located," said Delegate Robert Beach, D-Monongalia.
The legislation was prompted by a fly over Beach took last year of mountaintop removal mines. The mining method involves blowing up ridgelines to expose several coal seams.
A lot of people living near the expanding surface mines are afraid family cemeteries are "just going to be covered over and become nonexistent," Beach said.
Bill Raney, president of the West Virginia Coal Association, says coal operators follow the law and try to be sensitive when cemeteries get in the way, treating families with dignity. However, he can't say how often such disputes arise.
International Coal Group's Patriot Mining Co. is currently in court in northern West Virginia, seeking approval to relocate a cemetery where the last burial occurred more then 70 years ago. Patriot received permission last year to move a nearby cemetery.
Patriot estimates there is 7,000 tons of coal beneath the 22 graves it now wants to move. Because of buffer zone and blasting laws, Patriot technical services manager Tom Jones said 80,000 to 100,000 tons of coal would be lost if the cemetery isn't relocated. At today's spot market prices, the coal would be worth at least $5.2 million.
Patriot says it will treat the remains with respect and move them to a public cemetery with perpetual care where descendants can visit. Eight of 12 descendants have agreed, but one is challenging the move.
Ohio Valley Environmental Coalition organizer Robin Blakeman doesn't know how much coal is beneath her family cemetery in Brier Branch Hollow. The Harless-Bradshaw Cemetery had been used by her family and the nearby community since the mid-1800s, and contains the grave of a Civil War cavalry corporal. The last burial was in 2001 and the area is now overgrown by trees.
In the past five years, Blakeman has watched Ravencrest Contracting slowly encircle the wooden knoll where the cemetery is located. The former farm passed out of her family's hands more then 50 years ago. The family now relies on state law and an agreement with the coal operator to reach the cemetery on a gravel roadway used to haul coal out of the mine.
On a recent Saturday, Blakeman planted Gladiolus bulbs near several of the stones. As she worked, the sound of heavy mining machinery and trucks drifted across the narrow valley.
"Sometimes in the midst of all this destruction, sometimes the only thing you can do is try and add a little bit of beauty," Blakeman said. "I'm also thinking these flowers will at least alert somebody to the fact that somebody cares."
THE INFLUENCE GAME: Lobbyists defend earmarks
What's it like to be at Washington's political ground zero? Ask Dave Wenhold, who trudges to work with two bull's-eyes pinned to his back.
He's a lobbyist and he earns part of his living fighting for special-interest earmarks, those prized pots of money that lobbyists vie for and critics decry.
"It's frustrating because 99.9 percent of us are doing the right thing for our clients all the time," said Wenhold, one of more than 14,000 registered lobbyists in a trade demonized by President Barack Obama and many members of Congress. "I'm proud of what I do. I'm extremely proud of it," said Wenhold, president of the American League of Lobbyists, his profession's trade group.
Even before Obama, the profession was reeling from the influence-peddling scandal surrounding Jack Abramoff, the now-imprisoned former lobbyist famously photographed in his black hat. Congress' battle over a $410 billion spending bill has trained a new spotlight on earmarks.
Barring last-minute changes, the bill contains 8,570 such pet projects for lawmakers' home states and districts worth $7.7 billion, according to Taxpayers for Common Sense, a conservative group that abhors the practice. They and other critics ridicule projects such as $819,000 for catfish genetics research in Alabama and $95,000 to help the state of New Mexico locate a dental school.
Often, there's a lobbyist who helped get those projects into the bill. Wenhold, a 16-year lobbying veteran, can take credit for $175,000 for Career Gear, a New York City-based nonprofit that provides business clothes and other help to recently released prisoners and other men seeking jobs.
Under pressure from conservatives who have made earmarks a symbol of Washington's gluttony amid unprecedented federal deficits, Obama and Democratic leaders have pledged to curb the practice.
"This is a political muscle system," said Steve Ellis, vice president of the taxpayers group. He argues that influential lawmakers or those in tight re-election races are awarded more earmarks by party leaders, making the projects not only wasteful but unfair. "This is not a meritocracy by any stretch of the imagination."
The criticism hasn't stopped Wenhold and thousands of others from pursuing the projects, which retain overwhelming support from lawmakers because they are ravenously sought by colleges, mayors and other constituents.
"We're not evil by any stretch," said John Sanful, Career Gear's executive director. "We're committed to doing public good."
In the latest demonstration of earmarks' appeal, the Senate last week easily rejected an effort by Sen. John McCain, R-Ariz., to strip the projects from the spending bill. It also batted down a proposal by Sen. Tom Coburn, R-Okla., to kill 13 of them sought by the PMA Group, which is disbanding its lobbying business after coming under federal investigation.
"I think earmarks will be around as long as members of Congress are elected by people," said Michael Fulton, a 20-year lobbyist who worked on Capitol Hill for a decade.
Wenhold, one of two partners at Miller/Wenhold Capitol Strategies, and other earmark defenders note that such projects make up less than 2 percent of the spending bill's total cost. Besides, they say, lawmakers understand their districts' needs better than federal officials who often make questionable spending decisions.
"You're asking people who are sometimes career-long bureaucrats who've been in Washington 20 years to make decisions on what's going to happen in Portsmouth, N.H.? That doesn't make any sense," Wenhold said.
Wenhold and Fulton say their earmark work is a year-round task. It includes helping clients pitch their plans, filling out detailed applications from members of Congress, arranging letters and visits to lawmakers from hometown supporters — all to coax the House and Senate Appropriations committees to put the projects into spending bills.
By tradition, about 60 percent of the money for earmarks goes to members of the majority party, currently the Democrats. Fulton estimates that 95 percent of congressional offices he approaches accept earmark requests.
Yet it's highly competitive, with only a small percentage of proposals surviving.
Though Wenhold helped win $175,000 for Career Gear, the group had requested $475,000. And $1 million Wenhold sought for a different nonprofit group didn't make it into the bill at all.
Fulton, who works at the larger GolinHarris International, said the firm had 15 earmarks in the bill. That included $381,000 for a hospital in Carthage, Ill., and $197,000 for California State University at Dominguez Hills. He said he pushed an additional 10 projects that did not make the cut.
"These will stand the test of any third-party group picking them apart," Fulton said.
In a typical year, both men work on a handful of earmarks. Larger powerhouse lobbying firms such as Cassidy & Associates, Van Scoyoc Associates and The Livingston Group usually handle far more.
Fulton said that two years ago, he was working with two Illinois clients and was getting support from Obama's staff when he was still a senator from that state. That help ended when Obama began running for president, Fulton said.
"He polls, and lobbyists don't poll well," Fulton said. "I don't take it personally."
Southwest sticking with 4 percent capacity cut
Southwest Airlines Co. CEO Gary Kelly sees twin risks ahead, one if the economy gets worse, one if it gets better.
A worsening economy will keep Southwest cautious even as it adds routes like Minneapolis-to-Chicago, he said.
But he's also worried about another fuel price spike, especially if a recovering economy brings more demand for jet fuel, he said on Monday in Minneapolis to promote Southwest's new service to Chicago that began on Sunday.
Southwest is adding routes like Minneapolis and (later this year) service in Boston and New York-LaGuardia, even as it reduces overall capacity 4 percent this year. To make up for the new service, it's reducing flights elsewhere. Kelly said the carrier made the cuts on its least-used routes.
Speculation has been rising that as the recession continues, airlines will make deeper capacity cuts than they've already announced. But Kelly said the 4 percent capacity cut is "still about the right number."
"It's still early in the year. If anything I think the economic outlook has gotten worse, as we've gotten further into the year. So we're going to continue to be very cautious," he said.
Meanwhile he has his eye on fuel prices. Bets that fuel prices would rise saved Southwest's bottom line during the fuel price runup that peaked last summer. But like other carriers it lost money on those hedges as fuel prices dropped, and in January it said it had closed out most of its hedges.
But on Monday Kelly said oil prices in future months are running higher than the spot price, suggesting fear of another price runup. Fuel is the biggest expense at most carriers.
"We need to make sure that we protect against a fuel price spike. I think in this environment that would be pretty deadly. We'll just have to be very cautious about adding any new capacity at all in an environment where the overall market is shrinking."
Still, Southwest has about 10 percent of its 2009 fuel needs hedged, "which is considerably wound down from the previous position," spokesman Chris Mainz said.
Kelly said Southwest hasn't yet parked any of its Boeing 737s, but it could.
Northwest Airlines, now a part of Delta Air Lines Inc., had a reputation for fierce protection of its hubs, including Minneapolis, where it flew 76.6 percent of scheduled departures last year. Rather than barging in, Southwest has stuck more of a foot in the door, coming to Minneapolis with Chicago as its only destination, eight times a day.
"We purposefully only offered service for now to Chicago to limit the risk in this economic environment," but other destinations — especially to the West — might make sense in the future, he said.
Southwest shares rose 5 cents to $5.18 in afternoon trading.
Palm to remarket $49 million in shares
Smartphone maker Palm Inc. said Monday it will remarket more than $49 million of shares acquired by venture-capital firm Elevation Partners to improve its working capital and finance the launch of the Palm Pre and product development.
The Sunnyvale, Calif., company said it will remarket about 18.5 million shares and underwriters may purchase an additional 2.8 million common shares from Palm to cover over-allotments, if any.
The stock sale between now and March 31 would yield about $113.8 million based on Palm's closing price Friday. Elevation Partners will recoup $49 million from a $100 million investment it made in Palm in December, and expects to use the money to buy shares of Palm's common stock at the public offering price.
Palm will keep the remainder, or about $64.8 million.
Standard & Poor's Ratings Services on Wednesday lowered its creditworthiness rating on Palm one notch further into junk territory, citing significant declines in revenue and liquidity. It dropped its rating to 'CCC' — three levels above default — from 'CCC+'. The outlook is negative.
The professional-grade "Pre" smartphone has not launched, but is expected to be available in the next few months on Sprint Nextel Corp.'s network.
It's the first of a series of new phones based on an updated architecture, and is the core of Palm's anticipated rejuvenation.
Analysts have expressed concern about the company's cash flow, expecting Palm to look for more capital as it ramps up marketing for the Pre.
The company said Tuesday it expects a steep slide in fiscal third-quarter revenue, hurt by flagging demand for its older-model phones. It expects sales of $85 million to $90 million, well below the average Wall Street projection of $115 million, according to a Thomson Reuters poll.
Shares of Palm fell 13 cents, or 2.1 percent, to $6.02 in late afternoon trading Monday.
HEALTHBEAT: What's the best medicine -- really?
Think your doctor knows which drug — or surgery or even diagnostic test — works best? Think again. Half the time, there's little if any good evidence comparing one to another. And one of medicine's little secrets is that brand-new drugs don't have to work any better than cheap old ones to be approved for sale.
Now the government has a $1.1 billion down payment to start unraveling that problem, money provided in the economic stimulus package to better determine which test or treatment works best, when and for whom so that patients don't waste time and money on poor choices.
But which ailments go to the top of a very long wish list? And perhaps most important, how to make sure the results get into doctors' and patients' hands but not overly limit what therapies people can choose?
"There's a lot of clamor ... that this is going to deprive people of the choice to basically have every treatment they want. That's based on a false premise," Dr. Harold Sox, past president of the American College of Physicians, told The Associated Press. Last week, Sox was chosen to lead a panel of the prestigious Institute of Medicine to help guide what comparisons the government makes.
"If people had a good explanation of why a test that they wanted was more likely to hurt them than to help them, they might of their free choice say, 'You know, I was clearly wrong. I shouldn't want that test and now I don't.'"
At issue is what's called "comparative effectiveness." Should you have open-heart bypass surgery or far less invasive stents to open severely clogged heart arteries? Which of two hot treatments best prevents stroke from a clogged neck artery, surgically rooting out the clog or pushing it aside with a stent?
Does arthroscopic surgery work any better than painkillers for knee arthritis? Of all the competing pills, which is best to start with in treating Type 2 diabetes or high blood pressure? Is there really any difference between Prevacid and Prilosec for heartburn, or between Fosamax and hormone treatments for bone-weakening osteoporosis?
Those winners-and-losers questions drive fierce opposition to comparison effectiveness research from drug makers and others who have a financial stake in the outcome and fear that insurers will use the results to make coverage decisions. Back surgeons once lobbied to kill the federal Agency for Healthcare Research and Quality after it found "insufficient evidence" supporting certain spine operations — not that they didn't work, just that more evidence was needed.
The result: The nation has a scattershot method for determining best medicine. The little-known AHRQ spends about $30 million a year reviewing evidence of select tests and treatments. The National Institutes of Health occasionally compares contested therapies in expensive, years-long studies involving thousands of patients, like the stroke trial now under way.
So an extra $1.1 billion for the government to start spending on such comparisons this year marks a huge jump. By June's end, the Institute of Medicine panel will provide a priority list of up to 50 vexing medical questions to help the feds determine where to start.
Don't expect easy answers. Federal scientists are acutely aware that many of today's studies don't account for wide variations in responses to treatments by minorities or other subgroups.
"We have not yet seen a report or an assessment that says, 'Option A thumbs up, Option B forget it,'" says AHRQ Director Dr. Carolyn Clancy. The goal is "to figure out what's the right choice for me."
"Medical decision-making is rarely black-and-white," adds the NIH's heart chief Dr. Elizabeth Nabel. "We see certainly helping to provide additional evidence that really guides physicians and individuals in sorting through the shades of gray."
The bypass-versus-stent question for severe heart disease is a good example. Last week's New England Journal of Medicine published a comparison suggesting bypass recipients fare slightly better. But Nabel notes that in fact the study found tradeoffs that mean people may legitimately choose the easier recovery of a stent.
A bigger question is how to ensure that patients get the opportunity to consider such findings. AHRQ has begun translating its jargon-filled comparisons into easy-to-understand consumer brochures.
But the most-used comparative effectiveness research may come from a unique program in Oregon called the "Drug Effectiveness Review Project" that evaluates the evidence behind competing drugs.
One example: Two years before the painkiller Vioxx was pulled off the market because of heart side effects, the project declared it riskier than its equally effective cousins, says project director Mark Gibson at Oregon Health and Science University.
The reports don't weigh drug costs but they are used primarily by the Medicaid directors of 14 states in coverage decisions. A wider audience sees them thanks to the influential Consumers Union, which does add price to evaluations done by both the Oregon project and AHRQ to create its free Web-based "Best Buy Drugs" guides.
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P&G's Arnold steps down as president
The Procter & Gamble Co. said Susan E. Arnold stepped down Monday as president, which leaves Chief Operating Officer Robert A. McDonald as the current front-runner to be the next CEO of the world's largest consumer products maker.
Arnold, who has been P&G's highest-ranking female executive, and McDonald were both promoted in 2007 in a move some analysts perceived as setting up a succession for Chairman and CEO A.G. Lafley. Both McDonald and Arnold are 55 and have been with the company since 1980.
But Lafley, P&G's CEO since 2000 and now 61, has dismissed suggestions that he is ready to retire anytime soon. He told analysts in December: "The rumors of my passing are greatly exaggerated."
Arnold, who was president for global business units, helped lead the growth of P&G's beauty operations. McDonald is a veteran executive for the Asian emerging markets where the company increasingly sees its future growth.
Arnold, who could also emerge as a candidate for a top position at another company, wasn't immediately available for comment. P&G said she will retire Sept. 1 after 29 years with the company. The announcement said it has long been her intention to step down when she turned 55 — her birthday was Sunday.
Wendy Nicholson, a Citi Investment Research analyst, scoffed at that reason, writing in a note Monday that it "sounds like baloney to us."
She pointed out that Arnold was promoted less than two years ago, and also said the beauty and health businesses Arnold led have underperformed lately.
"Whether an internal decision about succession, or simply a change in enthusiasm about her current role or about PG, prompted her departure, with Arnold gone, we think it is pretty clear that McDonald will succeed Lafley," Nicholson wrote.
Ali Dibadj, a senior analyst for New York-based Sanford C. Bernstein & Co., said he wasn't entirely surprised and had already considered McDonald the leader in the succession race.
Dibadj said that while Arnold was a key architect in the growth of P&G's beauty business, other executives have been taking on increasing roles.
"I would say the bench strength in that business is strong," said Dibadj.
However, Nicholson expressed concern about the loss of another key executive — Clayton C. Daley Jr. had stepped down as chief financial officer Jan. 1 — at a time when P&G and other companies are battling the tough economic conditions.
P&G shares fell $1, or 2 percent, to $44.71 in trading Monday, just above their 52-week low of $44.63. They traded as high as $73.57 in the last year.
Arnold will be on "special assignment" to Lafley until retirement. Her job won't immediately be filled. The company said three vice chairmen who had reported to her will now report directly to Lafley, "reducing a layer of management as part of the company's ongoing simplification effort."
Lafley praised Arnold as a role model and credited her with helping P&G's beauty business to nearly triple in size, from $7 billion in 1999 to $20 billion in sales behind such brands as Olay skin care, Pantene shampoo and Head & Shoulders shampoo. She's also been a major contributor to global sustainability goals.
Arnold, whose P&G firsts included first female president and the first vice chairwoman, is frequently ranked among the most powerful women in U.S. business. She was named vice chair for P&G Beauty in 2004, then vice chair for Beauty and Health in 2006. She also serves on several boards of directors, including McDonald's Corp. and Walt Disney Co., and will continue those roles, P&G said.
Moody's cuts Clear Channel Communications ratings
Moody's Investors Service said Monday it cut its ratings on Clear Channel Communications Inc. further into junk status, citing a "high probability" that the radio station operator will not comply with a debt agreement this year and be forced to restructure its debt.
Clear Channel is a unit of CC Media Holdings Inc. The company was taken private last July by Bain Capital Partners and Thomas H. Lee Partners.
Moody's lowered the company's corporate family rating and probability-of-default rating to "Caa3" from "B2."
In February, Moody's lowered its expectations for radio broadcasting stations and outdoor advertising, predicting deeper revenue declines for both.
Moody's now expects Clear Channel's radio revenue will decline in the upper teens percentage range and outdoor advertising revenue will drop by about 15 percent.
Based on the new estimates, Moody's said Clear Channel is likely to violate its secured debt leverage covenants in 2009.
"With a capital structure that was highly speculative from its inception, the company's ability to continue as a going concern is completely dependent upon remaining in compliance with its covenants," said Moody's Senior Vice President Neil Begley in a statement. "But in the current economic environment, compliance will be very challenging, and as a result, such a capital structure will not likely be sustainable."
Moody's also cut its ratings on Clear Channel's senior secured credit facilities to "Caa2" from "B1" and its senior unsecured notes ratings to "Ca" from "Caa1." In addition, Moody's downgraded Clear Channel's speculative grade liquidity rating to "SGL-4" from "SGL-2."
The ratings outlook was lowered to "Negative."
About $23 billion of rated debt is affected by the action, Moody's said.
Merck buying Schering-Plough in a $41.1B deal
Merck & Co. is buying Schering-Plough Corp. for $41.1 billion in a deal that gives Merck key new businesses, access to a promising pipeline of new products and the chance to further cut costs, including eliminating about 16,000 jobs.
Merck hopes the cash-and-stock deal helps it better compete in a drug industry facing slumping sales, tough generic competition and intense pricing pressures.
The deal announced Monday would unite the maker of asthma drug Singulair with the maker of allergy medicine Nasonex and form the world's second-largest prescription drugmaker. Merck and Schering are already partners in a pair of popular cholesterol fighters, Vytorin and Zetia, although concerns about safety and effectiveness have hurt sales.
Shares of the two companies traded furiously after the announcement, with Schering's shares skyrocketing and Merck's dropping, typical for a company doing a big acquisition. In early afternoon trading, Schering shares jumped $2.63, or 15 perent, to $20.26, and Merck shares fell $2.19, or 9.6 percent, to $20.55.
The deal comes only a few weeks after Lipitor maker Pfizer Inc. agreed to pay $68 billion for drugmaker Wyeth.
Merck and Schering-Plough, along with most of their rivals, are eliminating thousands of jobs and restructuring operations to cut costs.
"There'll be no immediate changes" in staffing, Merck spokeswoman Amy Rose told The Associated Press. "Eventually, we anticipate an approximate 15 percent reduction in the combined company's headcount," implying nearly 16,000 fewer jobs.
The deal also would let Merck do the same thing Pfizer is trying to do with its acquisition — diversify into a more broad-based health care company.
Merck is a top maker of pills and vaccines, and acquiring Schering-Plough will add strength in the prized area of biologic drugs, which are made from living cells. It will also give Merck one of the world's biggest animal health businesses and a sizable consumer health division that includes products such as allergy pill Claritin, Dr. Scholl's foot products and the Coppertone sun-care line.
Merck Chairman and CEO Richard Clark told The Associated Press the company will be "well-positioned for sustainable growth through scientific innovation."
Big drugmakers are facing slumping sales as the blockbuster drugs of the 1990s lose patent protection, complicated by a dearth of new drugs. Schering-Plough, however, has patent protection for key products until the middle of the next decade and what is considered one of the best product pipelines.
Still, analyst Steve Brozak of WBB Securities said the deal is mainly about Merck "buying revenue and buying earnings."
"It's a good short-term fix, but it unfortunately makes it more complicated for the long term," Brozak said.
He said it will now be more difficult for Merck to continue its strategy of buying or licensing the few promising experimental compounds available from small biotech companies, many of which are on the verge of shutting down amid the recession and credit crunch.
Brozak said he thinks the next big move likely will be a large drugmaker, perhaps J&J itself, acquiring a medical device maker. J&J already has a huge business in that field and lost a heated battle three years ago to acquire heart implant maker Guidant to Boston Scientific.
Merck and Schering-Plough said the deal will save them about $3.5 billion per year after 2011 and will boost earnings in the first full year after the deal closes. Combined with their current restructuring, they expect a total of $5.95 billion in annual savings after 2011.
"We'll double Merck medicines in (late-stage development) to 18," Clark added.
Schering-Plough CEO Fred Hassan, 63, said in an interview that Nasonex, Pegintron for hepatitis, cancer drug Temodar, the Nuvaring contraceptive and the two cholesterol drugs all have patent protection until 2014 or later.
The two companies had a combined $47 billion in revenue in 2008, nearly as much at the largest drugmaker, Pfizer Inc., which posted $48.42 billion last year. Pfizer expects late this year to acquire Wyeth, which would add more than $20 billion in revenue.
Merck has about 55,200 employees and Schering-Plough, which grew significantly with its November 2007 acquisition of Dutch biopharmaceutical company Organon BioSciences NV, has about 50,800.
Schering-Plough shareholders will get $10.50 in cash and 0.5767 Merck shares for each Schering-Plough share they own. That's a 34 percent premium to Schering-Plough's closing stock price Friday.
Stock would cover 56 percent of the deal's funding, with the other 44 percent in cash: $9.8 billion in existing cash balances and $8.5 billion in financing committed by JPMorgan Chase & Co., the companies said. The small amount being borrowed — barely 20 percent of the price — is a sign of the credit crunch's effects.
Clark, 63, will lead the combined company, which will be a dominant player in treatment areas including cholesterol, respiratory, infectious disease and women's drugs, as well as vaccines.
Schering sells the arthritis drug Remicade outside the U.S. and also has some rights to another in late-stage development, golimumab, under a partnership with Johnson & Johnson, which makes Remicade.
Because Schering has been making roughly $2 billion a year from that deal, Merck's acquisition of Schering-Plough is structured as a reverse merger to avoid triggering provisions in the J&J deal that might cost the new company that revenue.
As a result, Schering-Plough will be the surviving corporation but will take the Merck name and will be based at Merck's headquarters in Whitehouse Station, N.J.
Hassan said the three companies have a good relationship and that he "had a cordial conversation with Bill Weldon," New Brunswick, N.J.-based J&J's CEO, Monday morning.
Brozak, the analyst, said "it's always possible" J&J could throw a wrench in the deal, but it's too soon to say.
Johnson & Johnson spokesman Bill Price said the company is not commenting on whether it might protest or try to block the deal. Any dispute between J&J and Schering-Plough would be decided by binding arbitration, under their deal, according to Merck General Counsel Bruce Kuhlik.
Stock analysts have long pressured Clark to do a major deal to address falling sales, as blockbusters including Fosamax and Zocor for high cholesterol have seen generic competition hammer sales in the past 2 1/2 years.
Hassan will participate in planning how to combine the companies until the deal closes, expected in the fourth quarter.
Merck's sales fell 3 percent in the fourth quarter, at $6 billion, while Schering-Plough's rose 17 percent to $4.35 billion, mainly because of Organon's products.
Moody's Investors Service backed its Aa3 credit rating for Merck but revised its outlook on the rating to negative from stable. Standard & Poor's reaffirmed Merck's 'AA,' long-term rating. Both are high grades. Both Moody's and S&P put Schering-Plough's ratings on review for possible upgrade.
Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
miércoles, 4 de febrero de 2009
Survey: Banks tighten lending
The majority of banks in the United States have tightened their lending standards, ranging from consumer credit account limits to business loans, according to the Federal Reserve’s quarterly survey of senior loan officers.
Approximately 60 percent of banks have decreased credit limits on commercial construction; 30 percent have reduced the account limit on business credit cards; and 50 percent have reduced credit lines to financial firms.
Approximately 65 percent of banks said they are tightening lending standards and reducing the size and maturity of credit on commercial and industrial loans to middle- to large-market companies.
Part of the reason for the drop is a reduction in demand for commercial and industrial-related funding.
Banks that noted an increase in business said their customers had left other sources of funding in favor of banks, according to the Federal Reserve’s survey.
Oil up above $41 after OPEC hints of cuts
Oil rose to over $41 a barrel on Wednesday despite expectations that weekly U.S. data would show a build in crude stockpiles as demand for energy in the world's biggest oil consumer declines.
The move was supported by signals from the Organization of the Petroleum Exporting Countries that it may cut oil production further in an attempt to bolster the market.
U.S. light crude for March delivery jumped more than a dollar at one point, trading at a high of $41.79, up $1.01, before slipping back to trade around $41.45 at 1113 GMT.
Brent crude was 72 cents up at $44.80 a barrel.
Despite the rally, the market is still down more than 50 percent from a year ago. Oil has plummeted by more than $100 since hitting a record near $150 a barrel in July last year as the global downturn has weighed on demand for fuel.
OPEC is deeply worried by the impact the global economic downturn is having on oil demand and has promised to reduce oil production by a total of 4.2 million barrels per day (bpd) from levels seen in September.
OPEC President Jose Botelho de Vasconcelos, who is also Angola's oil minister, told Reuters on Tuesday the 12-member group could remove more oil from the market if needed to boost prices.
OPEC in January met only two thirds of its pledge to lower oil output as several members of the producer group continued to pump above target levels, a Reuters survey showed.
There is little sign of an improvement in oil demand.
SEVERE, SYNCHRONISED RECESSION
On Tuesday, weak retail sales in the United States and Germany, as well as a jump in Spanish unemployment, provided the latest evidence of a severe, synchronized global recession.
"The economic context remains very weak and the market is waiting for U.S. oil data later today," said Harry Tchilinguirian, oil analyst at BNP Paribas in London.
"Surprise builds in product inventories will only validate assessments of underlying weak oil demand."
The U.S. Energy Information Administration will release its oil data at 10:30 a.m. EST (1530 GMT).
A Reuters poll of analysts forecast the report would show that U.S. inventories of crude oil rose for the sixth straight time last week as refinery utilization was curbed by seasonal maintenance, rising imports and falling demand.Ryder profit beats Wall St view
Truck leasing and logistics company Ryder System Inc (R.N) forecast quarterly and full-year profit well below analysts' forecasts and said it expected no economic recovery in 2009, sending its shares down nearly 5 percent.
The downbeat outlook came as the company reported better-than-expected fourth-quarter profit.
"Clearly we face challenging headwinds that are directly related to global economic and market conditions," Chief Executive Greg Swienton said in a statement. "Chief among them is a significant increase in pension expense driven by poor performance in the overall stock market in 2008."
Ryder posted a fourth-quarter net profit of $10.6 million, or 19 cents per share, down from $71.9 million, or $1.24 a share, a year earlier.
Excluding one-time items, Ryder earned $1.09 per share, 6 cents ahead of analysts' forecasts, according to Reuters Estimates.
Sales fell 18 percent to $1.37 billion. Analysts had expected $1.55 billion.
Miami-based Ryder said it expected lower commercial rental and used vehicle sales this year and that lower auto production would also hurt results, partly offset by cost and job reductions.
In a presentation to analysts, the company said further contraction of the U.S. economy was possible. It expects total revenue for 2009 to be down 10 percent to 16 percent.
For the first quarter, Ryder said it expected to earn 40 cents to 50 cents per share. Analysts were expecting 57 cents.
Ryder also said higher pension expenses would reduce 2009 profit. Its 2009 earnings-per-share forecast of $2.60 to $3.30 includes a pension expense of 69 cents and restructuring costs of about 10 cents. The analysts' average outlook was $4.06.
Shares of Ryder were down 5.2 percent at $32.72 in early New York Stock Exchange trade.
Jonas Brothers visiting CW with concert film peek
LOS ANGELES (AP) - Love them or not, the Jonas Brothers just keep popping up.
The CW network says the singers will host a night of programming Feb. 10 that includes the dramas "90210" and "Privileged." They'll provide a sneak peek of their new 3-D concert film based on their "Burning Up" tour.
Fans looking for a musical performance will get a clip of the group performing the hit song "Tonight."
Last month, the Jonas Brothers performed at the White House for presidential daughters Malia and Sasha Obama and at a children's inaugural concert.
The CW is a joint venture between Time Warner Inc.'s Warner Bros. unit and CBS Corp.
Britain's Brown in depression slip of the tongue
LONDON (AP) - British Prime Minister Gordon Brown made a slip of the tongue Wednesday when suggesting the world is in the midst of a depression, his spokesman said.
During rowdy exchanges in the weekly Prime Minister's questions, Brown told lawmakers that "we should agree, as a world, on a monetary and fiscal stimulus that will take the world out of depression."
A Downing Street spokeswoman said that the slip "was not deliberate, and is not what he thinks."
Though there is no standard definition of what a depression is, most economists think that a recession — a normal downturn in the business cycle — becomes a depression when output contracts over a long period of time and by over 10 percent.
The Conservative Party's spokesman for economic matters George Osborne swiftly demanded clarification of the Prime Minister's comment.
"The Prime Minister must personally and urgently clarify whether his statement today that the world is in 'depression' was a slip of the tongue, or whether he knows something that we don't know," he said outside Parliament.
"For the sake of confidence he should clear up this confusion. Prime Ministers in particular need to be very careful about their use of language to ensure they don't undermine confidence," Osborne said.
Official statistics have already shown that Britain is confronting its worst recession since 1980, with the economy shrinking 1.5 percent in the fourth quarter. Forecasters, such as the IMF, have also indicated that Britain will likely contract more than any other leading industrialized country in 2009.
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