Wednesday, October 14, 2009

“Today's Business | AIG told to hold off on bonuses - The Sun News” plus 4 more

“Today's Business | AIG told to hold off on bonuses - The Sun News” plus 4 more

Today's Business | AIG told to hold off on bonuses - The Sun News

Posted: 14 Oct 2009 06:19 AM PDT

The Obama administration's pay czar has asked American International Group to withhold some of the millions in bonuses promised to its employees.

Kenneth Feinberg, the special master for executive compensation, "has informally advised AIG not to pay the full $198 million" employees expect to receive, according to a report Tuesday from the special inspector general overseeing the $700 billion financial bailout.

Feinberg is locked in negotiations with the seven companies that received the most expensive taxpayer bailouts. AIG's was by far the largest. The government committed more than $180 billion to wind down the New York-based insurance and financial services conglomerate. Treasury now owns about 80 percent of AIG.

Investing

Investors fret, stocks slide

New York Investors grew cautious Tuesday after quarterly sales at Johnson & Johnson fell short of expectations and an influential analyst stirred worries that bank shares are overheated.

Most stocks posted modest losses Tuesday, a day after major indexes finished at their best levels in a year. The Dow Jones industrial average slipped 15 points, though the Nasdaq composite index edged higher.

Legal action

Bank ends disclosure fight

Charlotte, N.C. Bank of America Corp., giving up a months-long fight with regulators, plans to turn over documents revealing legal advice it received on its purchase of Merrill Lynch.

In a turnabout, the bank will waive attorney-client privilege that kept it from telling regulators about recommendations it received from outside attorneys over whether to disclose details to shareholders about Merrill's mounting troubles.

The bank's change of heart, which came almost two weeks after the company announced that CEO Ken Lewis planned to retire by Dec. 31, appeared to be the company's attempt to end the controversy that followed the Merrill deal.

Publishing

Business Week gets new owner

New York Bloomberg LP is buying BusinessWeek magazine in a deal that brings together a financial news service specializing in rapid-fire updates with a print publication struggling to adapt to the Internet's information whirlwind.

Terms were not disclosed.

Product safety

More Fords on recall list

Detroit Ford Motor Co. said Tuesday it will add 4.5 million older-model vehicles to the long list of those recalled because a defective cruise control switch could cause a fire.

The latest voluntary action pushes Ford's total recall due to faulty switches to 14.3 million registered vehicles over 10 years, capping the company's largest cumulative recall in history involving a single problem.

Mortgages

Foreclosures expected to peak

San Diego The chief economist for the Mortgage Bankers Association says foreclosures will peak by the end of next year as unemployment creeps above 10 percent.

The forecast by Jay Brinkmann was released Tuesday at the trade association's annual convention and expo in San Diego.

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Intel stokes hopes for PC recovery; shares jump - CNBC

Posted: 14 Oct 2009 07:38 AM PDT

SAN FRANCISCO - Intel Corp. has been asserting for months that the personal computer business is rebounding from its deepest slump in nearly a decade. Its stock surged Wednesday on signs that things are picking up faster than expected, despite a few lingering trouble spots.

Intel reported after the market closed Tuesday that its profit and sales both dipped 8 percent from July through September as spending by corporations remained weak, a trend that has dragged on throughout the recession and probably won't ease until next year.

The price for Intel's chips also fell. One reason is that "netbooks," little laptops that cost a few hundred dollars and have limited functions beyond surfing the Internet, have caught on but aren't big moneymakers. Another is that PC makers have slashed their prices on full-sized computers, and aren't willing to pay as much for the chips that go into them.

The results easily surpassed Wall Street's forecasts, however, and Intel's guidance for the October-December quarter of $9.7 billion to $10.5 billion in sales also topped projections.

Intel shares jumped 61 cents, or 3 percent, to $21.10 in morning trading Wednesday.

As the first major technology company to report third-quarter earnings, Intel's numbers lend insight into the strength or weakness of PC makers' demand for new chips. What the figures don't necessarily show, though, is whether PC companies are stocking up on chips to replenish low supplies, or whether they expect especially brisk sales of computers. That will begin to play out in the coming weeks, as the holiday season gets under way and a new edition of Windows is released Oct. 22.

Intel had bumped up Wall Street's expectations twice ahead of Tuesday's report.

In August, the company raised its guidance, and last month CEO Paul Otellini predicted that PC sales could defy predictions by growing in 2009, which would avert the first year-over-year sales decline since 2001. Intel has been more optimistic than even some of its biggest customers. Hewlett-Packard Co. and Dell Inc., the top PC makers, have been reluctant to call a bottom in the PC market, as Otellini did in April.

Intel's net income was $1.9 billion, or 33 cents per share, down from $2.0 billion, or 35 cents a share, a year ago. Sales totaled $9.4 billion. Analysts had expected profit of 28 cents per share on sales of $9.0 billion, according to a poll by Thomson Reuters.

Another important number was Intel's gross profit margin, which was 57.6 percent of revenue. In the second quarter, the figure was 50.8 percent. The boost shows Intel is making its microprocessors cheaper to produce, a technological feat that comes from pouring billions into research and upgrading factories.

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Sarkozy battles fallout from twin scandals - Himalayan Times

Posted: 14 Oct 2009 06:34 AM PDT

Agence Frace Presse

PARIS: Two scandals in a week, over a minister's sex tourist past and charges of nepotism towards his son, left French President Nicolas Sarkozy fighting Wednesday to contain backbencher anger in his camp.

The French leader has stepped up to defend his son Jean Sarkozy, saying the 23-year-old had been "thrown to the wolves" in the storm over his imminent appointment to manage France's top business district.

Top brass in Sarkozy's government and right-wing UMP party have closed ranks to defend his son and the law student's "right" to stand for chairman of the EPAD agency managing development in La Defense outside Paris.

But many in the rank-and-file are alarmed at what they see as an error of judgment, six months ahead of regional elections.

"People have been stopping me in the street, asking 'So, what's the scandal going to be next week?' or 'We voted Nicolas Sarkozy, now we're not sure we did the right thing,'" said UMP lawmaker Arlette Grosskost.

"And the worst thing is we don't know what to tell them."

The weekly meeting of UMP lawmakers was abruptly called short Tuesday after a deputy spoke out against Jean Sarkozy's contested appointment, prompting cheers from the room.

The Sarkozy junior scandal comes days after the culture minister, Frederic Mitterrand, was forced to defend himself on prime-time television over a 2005 novel describing his experiences as a sex tourist.

While Sarkozy did not personally defend Mitterrand -- and a poll showed two thirds of the French did not want him to resign -- the sex scandal wrong-footed the "values voters" in his core right-wing electorate, Braud said.

"There is a chasm opening up between the Paris elites and the man on the street," fumed UMP deputy Christian Vanneste.

"Nicolas Sarkozy is a remarkable political operator, but he is also capable of committing staggering mistakes, especially when he is acting on an emotional impulse," said the political analyst Philippe Braud.

"Without a doubt, this is going to damage the image of the president," who is stuck below 45 percent in the opinion polls as he positions himself for re-election in 2012, he said.

Opposition activists on Wednesday launched a tongue-in-cheek campaign to get struggling youths to seek adoption by the president -- ridiculing his campaign pledges in 2007 to turn France into a meritocracy and cut youth jobless rates.

Sarkozy has also been criticised for refusing to stand down as a plaintiff against his political rival Dominique de Villepin in the Clearstream dirty tricks scandal, despite concerns it could undermine the court's impartiality.

"When you are leader of a democratic nation, there are things you do not permit yourself," wrote Le Monde newspaper. "Whatever happened to the candidate Sarkozy who in 2007 spoke so convincingly of 'a republic above reproach'."

The French leader may yet bow to pressure and nudge his son away from the controversial post ahead of the final board decision in December, Braud suggested.

But UMP lawmaker Jacques Remiller, a longtime Sarkozy supporter, said right-wing voters were "upset."

He predicted the far-right -- at a historic low of three percent -- would bounce back in the March regional vote.

The National Front's deputy leader Marine Le Pen was first to dig out the compromising passages from Mitterrand's autobiographical novel.

"The Front National scored points, they sowed a seed," said Gael Sliman of the BVA polling institute. "And Nicolas Sarkozy will struggle to campaign on values in the regional elections."

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CEO Peek jumps from foundering CIT Group - Newark Star-Ledger

Posted: 14 Oct 2009 04:39 AM PDT

By The Associated Press

October 14, 2009, 7:30AM

by STEPHEN BERNARD
associated press
CIT, struggling as it continues efforts to restructure its debt, said yesterday chairman and CEO Jeffrey M. Peek will resign at the end of the year.


It is widely believed that the commercial lender, which has received $2.3 billion in federal bailout money, may be forced to seek bankruptcy court protection, and analysts said Peek's departure could be a sign that the company does plan a bankruptcy filing that would enable it to reorganize its operations and finances.

Sameer Gokhale, a senior analyst at Keefe, Bruyette & Woods Inc. said that if CIT plans to reorganize, it would make sense to bring in a new CEO to run a new capitalized firm, he said.
It provides a "fresh start for the company," Gokhale said.

CIT is one of the largest lenders to small and mid-sized companies, and its customers range from

Dunkin' Donuts franchisees to department store operator Dillards Inc. The company, which has offices in Livingston, has suffered billions of dollars in losses as its borrowing costs outstripped the income it generates from lending to customers. As CIT's customers have struggled amid the recession, they have fallen behind on repaying loans, putting the company in the same predicament as many other financial institutions.

Some experts have warned that a collapse of CIT would deal a blow to an economy struggling to recover. The retail sector would be hit especially hard because CIT serves as a short-term financier to about 2,000 vendors that supply merchandise to 300,000 stores, according to the National Retail Federation. Analysts have said 60 percent of the apparel industry depends on CIT for financing.

CIT had $54.09 billion in outstanding long-term borrowings as of June 30, including $13.85 billion due by June 30, 2010. The company is trying to reduce its near-term debt burden by $5.7 billion.
Peek, 62, who has been with CIT Group since 2003, said in a statement the debt restructuring CIT is currently attempting, its second in recent months, makes this "the appropriate time to focus on a transition of leadership."

Daniel Alpert, a managing partner at the investment bank Westwood Capital, said Peek, possibly fearing that the restructuring would fail, might have decided he had run out of options to help the company and wanted to turn it over to someone else.

CIT has asked its biggest debt holders to approve a prepackaged reorganization plan in case it is forced to file for bankruptcy protection. However, Alpert said, bondholders' conflicting demands could upend that plan, forcing the company into a protracted court-supervised reorganization.

The board of directors is creating a search committee to find a new CEO.

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IP Networks Growing as Business Platform, Report Says - eWeek

Posted: 14 Oct 2009 08:42 AM PDT

Businesses investing in Internet-protocol-based collaboration technologies are reaping a large return on investment (ROI), according to a report from Frost & Sullivan.

A report by Frost & Sullivan, sponsored by Verizon Communications and Cisco found organizations around the world that deploy the most advanced Internet-protocol-based collaboration technologies achieve more than twice the return on their collaboration investment and perform better than their less collaborative peers. The study examined how professionals in businesses and government agencies get their work done by using advanced collaboration tools such as voice over Internet protocol (VoIP), instant messaging or meeting via high-definition video or Cisco TelePresence.

"Meetings Around the World II: Charting the Course of Advanced Collaboration introduced a quantitative model for a return on collaboration investment called the Return on Collaboration index, which establishes a progressive impact of deploying advanced unified communications and collaboration (UC&C) technologies on business performance, and measures improvements in areas such as research and development, human resources, sales, marketing, investor relations and public relation.

The study found that businesses and government agencies deploying increasingly more sophisticated collaboration tools -- such as VOIP soft phones, immersive video and fixed mobile convergence -- saw a corresponding improvement in business results relative to the amount invested. The overall average Return on Collaboration (ROC) score was 4.2, meaning organizations received an average return of four times their investment in deploying collaboration technologies in terms of improvement across business-critical areas.

Nancy Gofus, senior vice president of global business products for Verizon, said based on the study, they see an era of advanced collaboration on the horizon. Organizations embracing unified communications and collaboration tools in an open, decentralized structure are enabling a more effective work style and cultivating a fertile ground for success, she said. As organizations aspire to become advanced collaborators, even small steps taken along the way can immediately pay off."

Nearly half (44 percent) of all organizations surveyed (3,662) have deployed UC&C tools -- such as user presence on a device, document sharing, immersive video or Cisco TelePresence for near-lifelike visual communications, integrated voice, e-mail and instant messaging, and telephone features and management capabilities on mobile devices and the desktop. The study also found that 40 percent of organizations that deploy UC&C plan to increase spending on this despite current economic conditions. In addition, more than 80 percent of organizations that have not deployed UC&C tools plan to deploy some form of them in the next two to three years.

The organizations surveyed by the study, ranging from small to medium-size businesses (SMBs) to enterprises, reported that advanced collaboration such as UC&C enhances their ability to produce positive results. For example, research and development managers in organizations deploying UC&C reported that advanced collaboration tools enable products and solutions to be developed more quickly, with an improved chance of market success, a higher degree of quality, and a lower overall cost of development.

"This latest research shows adopting progressively more advanced unified communications and collaboration tools can help organizations achieve a corresponding return on collaboration and improvement across all business functions, said vice president for information and communications technologies for Frost & Sullivan, Brian Cotton. This return was most dramatic in the areas of sales, marketing, and research and development."







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