Friday, February 27, 2009


I am indebted to my fellow business journalists at many different organizations,who stream their information to me day and night.There is no way I could observe everything I need myself.I am particularly grateful to The Wall Street Journal,The Washington Post,The Associated Press,CNBC,Nightly Business Report,Bloomberg,The Washington Business Journal,the BBC and PBS for their assistance with matters of fact.

Health Uncle:Fighting Cancer

A recent study shows that eating apples and onions lower your risk of getting pancreatic cancer.Apples and onions contain a certain flavonoid,an antioxidant that protects cells from the disease.This effect was especially strong in smokers,though nonsmokers also benefited from apples and onions.Another basic way of protecting yourself from cancer is losing weight.About 67% of Americans are overweight.Eating right,eating less and exercising have all been proven to reduce your cancer risk.Consider skipping that extra donut.

Tuesday, February 24, 2009

Berkshire Hathaway Shuffles Stakes

Warren Buffett's holding company,Berkshire Hathaway,has been rearranging its portfolio.It unloaded about 9.5 million shares of staples behemoth Procter and Gamble,or about 9% of its holding.It also jettisoned more than half of its Johnson and Johnson shares,selling approximately 33.1 million shares.Berkshire's Anheuser Busch holding was liquidated after Belgian firm InBev purchased the American brewer in November 2008.Constellation Energy Group and NRG Energy were positions that Berkshire augmented,while Nalco Holding Company,a water treatment,equipment and services firm,was the only totally new purchase,at 8.7 million shares.The rearrangement took place over Q4 2008.

What Kraft Offers

Kraft Foods offers value with some of its products.We give value to the consumer with products such as Kraft cheese singles and mac and cheese,Ms.Rosenfeld believes.Kraft Velveeta cheese is a staple of backwoods cabins.I certainly think the economic stimulus plan is a step in the right direction,the executive stated.Kraft Foods is a holding of Warren Buffett's Berkshire Hathaway.It was spun off from tobacco titan Altria Group.

Kraft Prices Competitive

I feel very good about our prices relative to our competition,Irene Rosenfeld said.Our prices are up significantly in response to the high input costs,but we do expect to see our volume growth improve from Q2.Our stock has been hit less than many stocks in the Dow and the S and P 500.If we can continue to do what we do well,then our stock will follow,the Kraft CEO predicted.

Kraft Foods Keeping On

Consumers are eating at home more now,which helps Kraft Foods,CEO Irene Rosenfeld points out.We really haven't seen a significant effect on our products.The recession has been a boon to our business.I've been very pleased with the ability of our brands to hold up against the private labels.They are iconic brands,Ms.Rosenfeld noted.Nabisco,for instance,competes with store brand cookies and crackers.

Friday, February 20, 2009

Health Uncle:Vaccine Formulated

The flu vaccine for 2009-10 has been finalized by the Centers for Disease Control.The three-part vaccine will be nearly identical to that for 2008-09.The two Type A strains in the vaccine will be the same,but the Type B strain will be slightly modified.With the recent ramping-up of their capacities,the pharmaceutical companies will soon be able to produce a four-part vaccine,affording even more protection.Even if the pre-selected strains are not what actually occurs in a given season,those vaccinated are still better off than those who don't get the shot.They still have a degree of protection.If they get the flu,it may not be as severe a case as if they had not been vaccinated.Consider getting this potential lifesaver when it becomes available in the autumn-especially if you are over 50 or are in other high risk groups.

Tuesday, February 17, 2009

Pandit Defends Citi

Vikram Pandit,Citigroup CEO,says their Tier One ratio is 12%.That's a very,very strong ratio.We feel very well-capitalized as a company.It's well above what regulators consider well-capitalized.We understand that the old model of corporate behavior no longer works,Mr.Pandit explained,and that the old rules no longer apply.I get it,and I will see that Citi gets it,Mr.Pandit promised the U.S. Congress.

The Bitter Critics

In contrast to his G-8 peers,Mr.Geithner has been subjected to bitter criticism by commentators at home.Among remarks made about Mr.Geithner were that he isn't worthy of respect and that he was hiding out in Rome.The critics are dissatisfied with his deliberate,consultative style.Several of them have expressed anti-European sentiments in the past,while Mr.Geithner is intent on fostering international cooperation.His few weeks in office have disappointed a Wall Street crazed by the disastrous results of its own misbehavior and ignorance.As well,Mr.Geithner takes an intellectual approach to the crisis that is culturally at odds with the vociferous impatience of day traders and television personalities.What's important now is you have around the world a much greater sense of urgency and commitment,Mr.Geithner said in Rome.We all recognize that the power of what we do individually will be much more effective if we move together,the new Treasury Secretary related.

Ministers React to Geithner

The G-8 finance ministers seemed to appreciate U.S. Treasury Secretary Timothy Geithner's presentation in Rome.Alistair Darling,the British Chancellor of the Exchequer,said it was quite clear the new American administration is getting into its stride.It wants to make a difference,not just for Americans,but for the world.The G-8 ministers described Mr.Geithner as helpful in explaining President Obama's plans,especially the integration of the various initiatives and the operation of the public-private fund for troubled assets.

World Finance Ministers Meet

The G-8 finance ministers,which include the U.S.,U.K.,Germany,Italy,Spain,Russia,Japan and Canada,met over the weekend in Rome to discuss the financial crisis.It was an opportunity for the ministers to speak with Timothy Geithner,the new U.S. Treasury Secretary,and hear the Obama administration's plans for dealing with the crisis.The G-8 focused on what to do about the troubled assets held by many large banks,that are causing the low confidence at the root of the crisis.Mr.Geithner suggeted a new public-private fund to insure some banks from further losses caused by troubled assets.Other banks could be relieved by a direct purchase of the assets by the new fund.The new rescue fund,together with an exisiting rescue fund,could add up to more than two trillion dollars.The rescue funds are in addition to the 787 billion dollar economic stimulus package to be signed into law by President Obama today in Colorado.The response must be massive,Mr.Geithner said,because the crisis itself is massive.The response must be deep and broad enough to last as long as the severe recession does.

Friday, February 13, 2009

Health Uncle:Money for Health Care

The U.S. Congress is about to pass the economic stimulus package,which contains a considerable amount for health care.The 789 billion dollar measure allots 10 billion for medical research and 19 billion for digitizing medical records.It also gives aid to the states for their Medicaid programs,which provide insurance for the indigent.This is happening in the glow of the Lincoln Bicentennial,which began yesterday on the great president's 200th birthday.He was a man who knew many health problems,from his own depression to the illnesses of his boys.Yet his spirit was strong enough to get him to his destiny,the preservation of the Union and his ageless words that define and affirm democracy to this day.President Obama,a great admirer of Lincoln, is expected to sign the stimulus bill into law on Monday,Presidents Day.

Tuesday, February 10, 2009

Dubai Skyscraper Construction Stopped

Nakheel,a state-owned developer in the United Arab Emirates,has halted construction on a tower that is slated to become the world's tallest.The Dubai project is feeling the weight of the financial crisis,and is suspended for a year.A decline in real estate prices is pressuring banks in the U.A.E.,and the cratering of oil revenue is crimping business activity across the Middle East.So far,the building has reached more than 160 stories,and a height of 2559 feet,or 779.98 meters.Nakheel declines to reveal the skyscraper's ultimate height,which is a point of pride for Dubai,the U.A.E. financial centre.

The Particulars

Wyeth shareholders will receive 33 dollars plus 0.985 of a Pfizer share per Wyeth share.This is a 29% premium over the Wyeth share price before the talks began.We've spent the last two years getting into a position to do something like this,Mr.Kindler repeated.As a result of this transaction,over time we're gonna have tremendous financial strength and flexibility,and will continue to look for opportunities,the Pfizer executive stated.Wyeth owns drugs such as Enbrel,Effexor and Prednar.A consortium of five banks is underwriting the deal,which is to be half-cash,half-financed.Pfizer will cut its dividend in half to accomodate the deal.It is the biggest pharma deal in about 10 years,and the third biggest of all time.

A Position of Strength

Pfizer is in excellent financial shape,CEO Jeff Kindler maintains.We've achieved significant cost savings-even beyond our goals,Mr.Kindler said.Our dividend is part of a long term strategy that will increase growth.Pfizer and Wyeth have very similar cultures;they should be a good fit,Jeff Kindler observed.Bernard Poussat,Wyeth Chairman and CEO,added that it's possible the deal will start a wave of pharmaceutical consolidation.This deal makes sense,Mr.Poussat agreed.

Focus on Pharma:Inside the Pfizer-Wyeth Deal

Pfizer,the largest U.S. drugmaker,is acquiring rival Wyeth.Pfizer CEO Jeff Kindler says they've spent the last few years really strengthening Pfizer,and now they're in the position to do a really transformative transaction.It is to be financed through a combination of cash,debt and stock.This deal meaningfully addresses challenges like the patent expiration of Pfizer's blockbuster cholesterol drug Lipitor.The deal is for 68 billion dollars in cash and stock.Mr.Kindler believes Wyeth is a great fit for Pfizer.

Friday, February 6, 2009

Health Uncle:Legislation Update

President Obama has signed a bill into law that extends health insurance to four million more children,for a total of 11 million.The State Children's Health Insurance Program,SCHIP,has been renewed for 4.5 years.The program covers children who are ineligible for Medicaid,yet whose parents cannot afford private insurance.The cost of the program is an estimated 33 billion dollars.An increase in tobacco taxes,including a 61-cent increase on each pack of cigarettes,for a total of 1.00 per pack in federal excise taxes,will fund the program.Meanwhile,Congress continues to consider the economic stimulus plan,which includes funding for digitizing medical records and extending health insurance for laid-off workers.Governor Jennifer Granholm of Michigan has issued an impassioned plea for Congress to act now.Each day the situation in Michigan gets worse,she said.Just yesterday,she learned of 4,000 more layoffs.We can amend the bill later,the governor cajoled.There are 40 billion dollars' worth of shovel-ready projects in Michigan,Governor Granholm contended,visibly concerned about the citizens she serves.

Tuesday, February 3, 2009

Canadian Banks Grow Southward

Two large Canadian banks have been advertising on American television lately.Toronto Dominion Bank,known in the U.S. as TD Bank and TD Banknorth,and Royal Bank of Canada,which,despite its name,is not a government institution,are vying for U.S. depositors and investors.Toronto Dominion owns part of the TD Ameritrade brokerage,while Royal Bank of Canada owns the RBC Wealth Management brokerage.Both banks may be invested in through NYSE/Euronext.Royal Bank of Canada's investment banking and corporate banking arm is RBC Capital Markets,and its branches are under the name RBC Bank.

No Apologies Offered

Jeff Immelt continued to assess GE's Q4 performance.In his view,GE did well under the toughest conditions of his lifetime.We're not gonna apologize for our Q4 results,he stated.We have cash for mergers and acquisitions if conditions warrant.We're gonna lend money.We want to kind of stick it out and see what happens.Our businesses are good businesses:energy,health,aviation,lending.When the fog lifts someday,you've gotta like this company.We're good at things it pays to be good at.Nonetheless,the layoff cycle hasn't ended yet.You've got to count on that continuing in the coming months,Mr.Immelt cautioned.

A Sound Business Model

GE CEO Jeff Immelt says that he runs the company for investors.Our businesses generate cash even in this environment.My commercial paper's on the way down to fifty billion dollars.I get S and P's concern,but it's not gonna change the way we manage the company.We've got a business model in financial services that really works.We've de-risked the financial services business model.We did almost 40 billion of origination in Q4 of 2008.We will remain a significant player in the financial services market.One of the benefits of GE is we can take tax breaks from the financial services unit and apply them to the industrial sector,Mr.Immelt pointed out.

GE Delivers

General Electric delivered results in a very tough environment,CEO Jeff Immelt said.Our cash was very strong.Our liquidity was very strong at the end of the year.We've met or beat every cash number since the crisis began.We've got 48 billion of cash on hand.It makes me feel good about the dividend.We've got the cash and the operating model that's gonna secure the dividend in this environment.We've got a 100 billion revenue,Jeff Immelt noted.