Citigroup Claims Progress Made

Citigroup,one of the world's largest financial institutions,claims it is making good progress towards recovery.CEO Vikram Pandit,in a letter to shareholders,summed up recent events,saying the company has been reorganized to best make use of its strengths.Citicorp focuses on providing best-in-class products and services to grow the franchise profitably,reduce volatility,and take advantage of its competitive advantages in more than 100 countries.We are making excellent progress divesting and exiting businesses from Citi Holdings,the non-core assets,Mr.Pandit indicates.We have significantly reduced our expenses and risk.Our balance sheet has been reduced by 25%.Our cost structure is also down by one quarter.We have also reduced our risky asset categories significantly.Our direct subprime exposure is down 65% year-over-year and highly leveraged financial commitments are down 75% year-over-year.
We still have a lot of work to do,Mr.Pandit admits,but we are continuing to build on the progress made in the past 18 months by focusing on our strategic priorities.We remain focused on managing costs and maintaining positive operating leverage and generating long-term profitability and growth from Citicorp,which comprises our core franchise,to benefit you,our shareholders,Vikram Pandit concluded.A reverse stock split may occur by June 30,2010,which means that several shares of Citigroup would be combined to form fewer,more highly-priced shares.The ratio of the split has not been determined yet.

Commercial Real Estate Needy

Dan Tischman,whose businesses are involved in construction,hospitality and realty,says it's refreshing the government is getting concerned about commercial real estate.The roll-over is going to have to be refinanced,and the capacity just isn't there.The Term Asset-backed securities Loan Facility,or TALF,needs to be extended.The total outstanding is 3.4 trillion dollars,while in a good year there was only about 40 billion available for lending.
Overall,Mr.Tischman observed,it's still a good time to build because of lower costs.Real estate investment trusts are actually doing quite well.Most of the major REITs have done money-raising to meet their obligations.I suspect there was a bubble of values created by an over-eagerness of lending.We're certainly not gonna see the values come back in a year or two or three,Mr.Tischman feels.

Aspirin May Prevent Diabetes

A study published in the American Journal of Medicine indicates that taking aspirin regularly may help prevent the onset of type 2 diabetes.In the study,22,000 men were followed for 22 years.Those who took aspirin were 14% less likely to contract type 2 diabetes.Men are up to 2.5 times more likely to develop type 2 diabetes than women.Consuming 25-38 grams of fiber a day may also ward off the disease,as well as cardiovascular problems.Cereal,whole grain bread and oatmeal are good sources of fiber.

Midwesterner Garners Barron's Distinction

Don Dewaay of Dewaay Capital Management in Clive,Iowa,was the first Iowan named to Barron's Top 100 Financial Advisors,coming in at #58.The competition for the honor was formidable,Mr.Dewaay noted,and Midwesterners are too often overlooked for recognition,which made this honor all the more special.Dewaay Capital Management provides wealth portfolio management services to affluent clients,corporations and charitable foundations,managing over 650 million dollars for clients throughout the U.S.Mr.Dewaay was one of only 10 independent advisors named to the list,which is dominated by large national wire house firms.Independent advisor firms are a breed apart,Mr.Dewaay said,and he believes they represent the future of the industry.Unlike the large wire house firms,these professionals are driven entrepreneurs who built their practices with personal vision,principals and passion.That is rare in an often stodgy industry.I'm extremely grateful for the opportunity to represent the universe of independent advisors across the country,Mr.Dewaay remarked.
Honors are nothing new to Don Dewaay.He was also named to Barron's Top Iowa Advisor list;was the only Iowan on Medical Economics Magazine's Top 150 Advisors for Doctors 2009;made the 2008 Forbes Magazine Goldline Research's Top 10 Most Dependable Advisors in the Midwest;and received the Better Business Bureau Integrity Award.

Money Manager Leans Private

In the view of Don Dewaay of Dewaay Capital Management,we've had two 45% declines in the past 10 years,and that's changing the way people save and invest.It's anyone's guess where this market is going in the next six months-or six years.Everything's been stress-tested,Mr.Dewaay observed.There's opportunity in the equity markets,but we focus on direct ownership of businesses and real estate.People have gotten farther away from their money,it seems to Mr.Dewaay.
Many investors are indeed taking advantage of the lower home prices,distressed properties and lower mortgage rates the financial crisis has resulted in.These will not last forever.KB Home,for instance,has resumed operations in the D.C. Metro area,feeling more optimistic than it has in some time.It had suspended construction and sales in late 2007,but plans to call construction workers and sales staff back to work,offering more moderately-priced homes for wary consumers.KB Home cited rising home prices and declining inventory levels as the reasons for its decision.

Stimulus Funds Cancer Projects

Some of the U.S. government's economic stimulus package will be used to fund four cancer projects by Science Applications International Corporation,or SAIC,for the National Cancer Institute in Fort Detrick,Maryland.The funding will be an estimated 302.5 million dollars for the Cancer Genome Atlas;Therapeutically Applicable Research to Generate Effective Treatments,or TARGET;NCI Community Cancer Centers Program;and the Cancer Human Biobank.These projects will further genomic research on tumor samples;create mini-cancer centers for clinical trials and research specimen collection and storage in local communities;and develop standardized procedures that are evidence-based for biospecimen collection and processing,storage and distribution for research,while creating a publicly-accessible database.
SAIC has been an NCI contractor for many years.It was founded in 1969 by a small group of scientists led by J. Robert Beyster,Ph.D.A FORTUNE 500 company,SAIC and its subsidiaries have about 45,000 employees in more than 150 cities worldwide.SAIC specializes in addressing complex and critical technology-related needs,such as national security,energy,the environment,health and critical infrastructure.

Coalition Fights Food Taxes

President Barack Obama has promised that health care reform will be deficit-neutral.A coalition of trade groups,businesses,unions and other organizations,as well as individuals,have banded together to resist proposed new taxes on food and beverages to partially fund the reform.In an open letter to the U.S. Congress,the coalition said they support the reform,but new taxes on food and beverages,especially those that single out a single product such as juice and soda,have no place in it.Such taxes,they say,will only burden working families already struggling in the trying economy.They will not make people healthier,teach children healthier lifestyles or change anyone's behavior.Only education and support for physical activity programs will do that.
Among those signing the letter were the National Taxpayers Union,the U.S. Chamber of Commerce,the League of United Latin American Citizens,the American Beverage Association,the National Retail Federation,Teamsters Local Union 812(New York,NY),the Pennsylvania Restaurant Association and the Wisconsin Grocers Association.The coalition,known as Americans Against Food Taxes,consists of nearly 400 groups,businesses and organizations,plus 60,000 individuals.

NYSE/Euronext Sheds Business

NYSE/Euronext,parent of the New York Stock Exchange,is selling its old AMEX options business to key liquidity providers,according to CEO Duncan Niederauer.NYSE/Euronext has an 8-9% share of options trading.Options are rights or obligations to buy or sell something,such as stocks,at a certain price,within a specific time frame.Mr.Niederauer says they see more initial public offerings,or IPOs,in the NYSE's future.The IPO pipeline is healthier than it's been in a while.IPO listing is considered an important indicator of economic vibrancy and the strength of a financial center such as New York.
On the other hand,we've had a 50% run-up in stocks since March,Mr.Niederauer pointed out,but the economy is not keeping up with the market right now.Every business leader he's spoken to said that.Is the market now ready to take on more supply in the form of these IPOs?Hopefully the market is the leader it always was.The challenge is,is there too much exchange consolidation?You're gonna see us do smaller deals in the next few months,Duncan Niederauer indicated.Mr.Niederauer had worked at Goldman Sachs for many years.

Prostate Cancer Awareness Month

Prostate cancer is highlighted in September.It is so prevalent,the numbers speak.In the U.S.,192,000 new cases will occur this year,and 27,000 men will die from it.One in six men will contract the disease in their lifetime;one in 35 will die of it.Of those who get it,63% are over 65.If men live to 60,6-7% of them will develop prostate cancer by the time they are 70.Those who contract the illness before age 65 are more likely to die from it.In older men,it grows so slowly,they will probably die of something else.
Obesity and heredity are factors in prostate cancer's occurrence.African American men are especially prone to it.Screening for prostate cancer consists of the PSA blood test,and possibly a digital rectal exam,or DRE.Ultrasound and biopsy are used to diagnose this cancer if the initial screening is positive.Treatments range from surgery to radiation to hormone therapy.Some choose not to treat it at all,but undergo a regimen of regular testing instead,to make sure it isn't getting out of hand.The treatments are less burdensome than they used to be,although considerable discomfort may be expected.

Philly Fed Chief Reflects

Charles Plosser,President and CEO of the Federal Reserve Bank of Philadelphia,has been analyzing the problems in the economy.Our survey in Philadelphia shows manufacturers are more optimistic,Mr.Plosser said.Unemployment is clearly the big problem.The other issue that we're waiting to worry about is commercial real estate.The exit strategy for the Federal Reserve is quite simple:we have to shrink our balance sheet,or we could be setting the fires of inflation in the next year or two.Monetary policy works with some fairly long lags,and that means we have to look toward the future,making some politically undesirable decisions,Mr.Plosser observed.
Credit is not flowing at the easy rate it was a few years ago.That's gonna take some time.It's a balancing act between the demand for credit,and the supply of credit.In 2010,we will see the economy gaining traction,but there are still some risks out there,such as commercial real estate-also with fiscal policy.
We've had a very massive shock to this economy.The idea it's going back to where it was before is probably not true.There will perhaps not be the strong rebound we sometimes see after a recession,Mr.Plosser suggested.He was formerly an economics professor at the University of Rochester and a visiting scholar at the Bank of England.

Early Edition:AmEx As An Investment

As of the close of trading Friday,American Express shares were at 32.84,down 1.40.Their 52-week range was 9.71-41.80,so they have made up a lot of lost ground since the market's March low.AmEx's price/earnings ratio was 26,which is relatively cheap for a credit card firm,while its dividend was comparatively high,at 2.2%.Barclays Capital favors it as being among those with a declining default rate and prospects for improved earnings over the medium term.
Besides its core credit card business,AmEx offers deposit accounts and prints checks.It has extensive ties with the travel industry as well,offering special deals with a number of cruise line partners.Its brand is among the most prominent and prestigious worldwide,which in itself gets AmEx on many portfolio short lists.

Health Uncle:Vaccination Update

Novartis has reported that its version of the H1N1 vaccine is very effective.It only requires one dose,rather than two as was anticipated.In any event,given the projected initial scarcity of the vaccines,a priority list for vaccination has been established by the Centers for Disease Control.The list is as follows:children 6 months to four years;children 5-18 years;those of any age who are pregnant,live with or care for children younger than 6 months,or are health care or emergency services workers.Once those groups have been vaccinated,everyone age 25-64 should be vaccinated.
Vaccination schedules for regular flu shots are already being posted,so check with your local health department for that information.

The Final Demand Question

Mohamed El-Erian,co-CEO and co-Chief Investment Officer of PIMCO,says what we have in the market right now is a sugar high.It is caused by 1.the impact of the inventory cycle,but will we get a hand-off to final demand by the consumer? and 2.a tremendous amount of liquidity missed the rally and is coming in now.When we get personal consumption and retail sales numbers-these are critical numbers.
Unfortunately,Mr.El-Erian noted,there is a lack of excitement about the upcoming G20 summit in Pittsburgh,which is concerning.I hope we're gonna jump-start this whole summit process.We at PIMCO have positioned ourselves more cautiously in higher quality assets around the world.Asset prices reflect a lot about this third hand-off to final demand,which the data don't reflect yet.Up till 2019,the debt-to-GDP ratio is gonna continue to go up.The dollar is gonna weaken.It's part of the global rebalancing.The question is whether it will do this in a disorderly fashion.Without intervention or coordination,the risk of this is high,Mohamed El-Erian cautioned.