Friday, October 30, 2009

Berlusconi Contracts Scarlet Fever

Italian Prime Minister Silvio Berlusconi has been diagnosed with scarlet fever-an illness typically associated with children.He probably caught it from his grandchild.Scarlet fever is characterized by a sore throat,fever and a scarlet rash.It is caused by a hemolytic streptococcus bacterium,meaning one which damages blood cells,causing the red protein hemoglobin to leak into the surrounding fluid.
Treatment for scarlet fever is by antibiotics,just as it is for strep throat,which is also caused by streptococcus bacteria.The infection is usually not dangerous if treated properly.Mr.Berlusconi reportedly felt very sick and canceled all his appointments this week,including a European Union summit.Some 25,000 Italians catch scarlet fever each year.

Tuesday, October 27, 2009

What Bothers Dennis Gartman

Money manager Dennis Gartman,founder and editor of The Gartman Letter,a leading financial website,says the stock market is telling you the recession is ending.Oil is up because of the weak dollar.If you start to get up to 80-85 dollars a barrel,you start to bring new technologies into play.New methods become profitable.
The Federal Reserve can be destroyed by congressional edict,Mr.Gartman observed.You have a left-leaning administration that will not tolerate rising interest rates.
Hedge fund misbehavior is probably widespread,in Mr.Gartman's view.This insider trading bothers him.I am a hedge fund manager,he said.We match wits with what the market's doing.This is sad,not a good thing for our business.
I got hurt in 19 October,1987,Mr.Gartman recalled.You had a stock market that had been going down for four months.My strategy was dead-spot on,but it just didn't work.Each time,the market is completely different,Mr.Gartman explained.
The Gartman Letter is accessible to subscribers only.Dennis Gartman is a frequent guest on business television,however.

Monday, October 26, 2009

AmEx Scores Double Beat

American Express beat Wall Street expectations in Q3 for both earnings per share and revenue.AmEx earned 0.54 cents per share,versus the estimate of 0.38;its revenue was 6.0 billion,versus an estimate of 5.92.Still,this represents a year over year drop of 22% in earnings per share,and a 17% drop in revenue.Loan losses were up,but at a slower rate.AmEx set aside 1.8 billion to cover bad loans,which is 13% lower,and its expenses fell 17%.
Overall,CEO Ken Chenault was pleased with the company's performance.He said it showed significant progress.Billings have stabilized over the last few months.It is the most difficult environment they have ever seen.AmEx's priorities are:1.staying liquid;2.staying profitable;and 3.investing selectively for growth.As a bank holding company,it offers a number of depositary accounts,as well as travel services,and publishes checks and day planners.The company's prudent management and affluent lifestyle branding make it one of the soundest financials over the long term.

Friday, October 23, 2009

Ad Council Thanks Donors

Ad Council,a non-profit group that sponsors health and safety messages by such icons as Smokey the Bear and McGruff the Crime Dog,has published a list of its 2009 donors.The President's Circle($150,000+):Coca-Cola,Google,Johnson&Johnson,Microsoft Advertising,PepsiCo,Time Warner and Yahoo;The Leadership Circle($100,000-149,999):Ad Council Board of Directors and Staff,Alcoa Foundation,Comcast,GE,Hearst Communications,NBC Universal and Procter&Gamble.Other donors include:National Football League,Bloomberg,Advertising Age,The Wall Street Journal,Univision Communications,Black Enterprise Magazine,Martha Stewart Living Omnimedia,United States Tennis Association and Facebook.
The Ad Council said its public service campaigns enrich,educate and improve the lives of Americans.Its health and safety campaigns include anti-steroids,diabetes management,H1N1 flu prevention and emergency preparedness themes.
Ad Council is profoundly grateful to its generous donors.Its website is at Interested companies should call Nina West at 212 922 1500.

Tuesday, October 20, 2009

Small Business,Big Problem

Parts of the financial system are still very damaged,Treasury Secretary Timothy Geithner says.Access to credit for small business is still very constrained.We need to keep getting capital to banks and the Small Business Administration for small businesses.A recovery that's gonna work requires that it be led by private demand,if it's gonna be sustainable.We're not gonna make the mistake of putting on the brakes too early.If you look at the cost of credit,there's been a really dramatic improvement in the system as a whole.Generally the system today is in a much better position to provide the credit the country needs.
Private capital is more valuable than public capital,Mr.Geithner emphasized.The financial markets are open for capital,as they have been since spring.Regulatory reform must provide 1.much stronger protection for consumers and investors,and 2.a less fragile system,where the government can take action without putting the people at risk.
Getting growth on track led by the private sector is our number one priority,Mr.Geithner asserted.The big source of uncertainty now is how strong private demand is gonna be.Uncertainty is bad for business.When health care reform is settled,the certainty will be a very good thing for businesses across this country,Secretary Geithner believes.His speech becomes slurred at times as his mind races ahead of his tongue.He repeatedly returns to the importance of the private sector and small business.

Monday, October 19, 2009

Citigroup Tagged By Credit

Credit losses weighed down Citigroup's Q3 earnings.The company lost 0.27 cents a share.CEO Vikram Pandit said that,while consumer credit trends are improving internationally,the U.S. environment is still challenging.Citigroup experienced eight billion dollars in net credit losses.There was some improvement in late stage delinquencies,but there was still some stress in early stage delinquencies.Citi wrote down losses in leveraged loans,and it is likely that toxic asset losses will never be recovered.
The U.S. government owns a one-third stake in Citi,and Citi must pay the government and other investors dividends on preferred stock holdings.Prince Alwaleed bin Talal of Saudi Arabia,one of Citi's major shareholders,has urged the government to divest its position as soon as possible.This is unlikely to happen for some time,however,out of an abundance of caution.
Despite Citi's problems,Deutsche Bank has initiated coverage of the stock with a buy rating,and a target price of 5.50 a share.Citi did realize a Q3 profit of 101 million-much better than last year's Q3 loss of 2.8 billion dollars.An independent evaluation approved of Citigroup's management.

Friday, October 16, 2009

Medical Research Means Business

A professor at University of Maryland, Baltimore's School of Medicine is showing that he is a businessman as well as a scholar.Dr.J. Marc Simard,M.D.,PhD.,receieved the Research Lecturer of the Year Award from the university in 2007 for discovering a new use of the diabetes drug glyburide.An intravenous form of the drug may be used for treating strokes,head or spinal cord injuries.The drug can reduce brain cell death,swelling and hemorrhaging.In 2008,Dr.Simard received the university's Entrepreneur of the Year Award for his effort to market his discovery.This involved setting up a company,Remedy Pharmaceuticals,which aims to raise enough capital for extensive clinical trials on the way to Food and Drug Administration approval of the new use for glyburide.The company raised its initial goal of 22 million dollars,but more needs to be done.
Dr.Simard has spent many hours pitching his discovery to investors,explaining the complex science and outlining the business implications as well.He has known success as an inventor in the past,with 30 patents issued or pending to his name.Dr.Simard said he's happy to do the legwork for the benefit of patients with untreatable diseases.
University of Maryland, Baltimore has six professional schools,plus a graduate school.It is a world-class research institute and seed-bed for business.

Tuesday, October 13, 2009

Commercial Real Estate Check

The CEO of Vornado Realty Trust,Steven Roth,has been analyzing the sector's prospects.After a vicious,very sharp downdraft,Mr.Roth says,we are in the process of seeking a bottom.That will take 3-5 years.There's no doubt that commercial real estate has re-priced lower.Brokers and tenants now feel that we're in a bottom.We want two-year leases;tenants want long term.This is the traditional sign of a bottom.
The last cycle,in the 1990s,lasted 10 years peak-to-peak.From 1988-91,there was a vicious downdraft.We're exactly on track with the historic 90's cycle.That downdraft lasted three years,with re-equitizing and base-building for the next 3-6 years.That's the best time to do acquisitions and load up on capital,which is what Vornado is doing now,Mr.Roth pointed out.
The government's TALF program is going to finance the AAA portion of a real estate loan.By historical standards,that's a fairly low amount.Vornado is in the TALF queue for refinancing.It's a very slow process,Mr.Roth observed.

Monday, October 12, 2009

Gift Card Good News

American Express is going beyond what the new credit card law will require in its gift card provision.As of August 2010,the law forbids fees on gift cards held less than 12 months.AmEx is abolishing all such fees immediately,without exception.It used to charge two dollars a month on gift cards held a year or longer.To sum up:anyone who has an AmEx gift card,or plans to purchase one,should stop worrying that fees will eat up the balance.That won't happen anymore.It will be interesting to see if competitors will match AmEx's new policy.
AmEx stock rose 2.45 last week,closing at 34.94.It had a dividend yield of 2.1% at that price.The stock was up this morning in early European trading.

Friday, October 9, 2009

Coca-Cola Takes Health Tack

Coca-Cola says it is taking steps to help Americans realize their health goals.First,it is adding calories per serving and servings per container information on the front of all U.S. packages.To further help people manage their caloric intake,Coke is introducing 90-calorie slim cans in 2010.The company also points out that,since 2006,Coke has not sold full-calorie sparkling beverages in schools,in accordance with national school beverage guidelines.Since that time,total beverage calories in schools have decreased more than 58%,Coca-Cola reports.
All that being said,Coke goes on to admit that they know more needs to be done.Childhood obesity,and obesity generally,are major health concerns in America today.

Tuesday, October 6, 2009

Sears Holdings' Christmas Strategy

Sears Holdings got an early and shrewd start on the holiday shopping season.Noticing that many of its Sears stores were in malls that had lost KB Toys stores when that chain was liquidated,Sears decided to take up the slack and start selling toys itself at these malls.Since August 15,Sears has been selling toys at 20 locations in the Chicago,New York,Los Angeles and San Francisco areas.The Toy Shops are stocking private label toys such as My First Craftsman,My First Kenmore and Just Kidz,as well as Fisher Price,VTech,Hasbro,LeapFrog and Bakugan.Specialty brands Schylling,Gund Plush and Thomas Wooden Railway are also being sold at the Sears stores.

Monday, October 5, 2009

Saudi Aramco's Long View

Saudi Aramco,Saudi Arabia's state oil firm,sees its prospects from a long term perspective.Oil demand in the West is currently very sluggish,according to Khalid al-Fallih,CEO of Saudi Aramco,but Saudi Arabia can survive on lower prices than others can,given the scale of its production.The world has 9-10 trillion barrels of oil.If we look at history, says,the industry has been able to replace its reserves and more.Our expectations in technology,both in discovery and production,have been very,very bullish.It's gonna take decades to shift from oil in any meaningful way.There is a happy medium, assures us,where consumers will not be hurt and investors will support exploration.

Friday, October 2, 2009

Study Shows Exercise Benefit

Twenty minutes of moderate exercise lifts the spirits for up to 12 hours,a University of Vermont study indicates.This significant positive effect was noted in all participants.Fitness level,gender and age didn't matter.The work-outs by the subjects were at 60% maximum aerobic capacity,which is the equivalent of a brisk walk.Exercise affects body chemistry,provides a change of pace and results in social interactions,all of which may induce a brighter outlook in participants.Perhaps mood medication isn't as necessary as was previously thought.