Archive for ‘Business’

2011/02/26

US Home Prices Could Fall Another 25%

Real estate prices declined in nearly every city and region of the US in December, according to the Case-Shiller Home Price Index, pushing US home prices back down to near their lowest levels since the crash began.

The Case-Shiller Home Price Index is within a percentage point of the 2009 low, with 11 of the 20 cities surveyed showing home prices below the lows of the 2009 trough.

As of the fourth quarter of 2010, “average home prices across the United States are at similar levels to what they were in the first quarter of 2003,” according to the report.

While some analysts believe that the worst is behind American homeowners, others are becoming increasingly concerned that so-called “double-dip” scenario market has definitively begun.

This week, Yale economist Robert Shiller, the co-creator of the Case-Shiller Home Price Index and who predicted the looming housing crash in 2006, noted in an interview with CNBC that “price[s] may go down substantially.” In a subsequent conference call, Shiller defined “substantially” as being in the 15% – 25% range.

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2011/02/25

Roubini: US, Global Recession Ahead

By Nouriel Roubini

In recent weeks, the global liquidity and credit crunch that started last August has become more severe. This is easy to show: in the United States, the euro zone, and the United Kingdom, spreads between Libor interest rates (at which banks lend to each other) and central bank interest rates – as well as government bonds – are extremely high, and have grown since the crisis began. This signals risk aversion and mistrust of counter-parties.

To be sure, major central banks have injected dozens of billions of dollars of liquidity into the commercial banking sector, and the US Federal Reserve, the Bank of England, and the Bank of Canada have lowered their interest rates. But worsening financial conditions prove that this policy response has failed miserably.

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2011/02/25

Penny’s Made Millions Tricking Google

Someone types the word “dresses” into Google and hits enter. What will be the very first result?

There are a lot of possibilities. Macy’s comes to mind. Maybe J. Crew or the Gap. Perhaps a Wikipedia entry on the history of hemlines.

How about the word “bedding”? Bed Bath & Beyond seems a candidate. Or Wal-Mart, or perhaps the bedding section of Amazon.com.

“Area rugs”? Crate & Barrel is a possibility. Home Depot, too, and Sears, Pier 1 or any of those Web sites with “area rug” in the name, like arearugs.com.

But in the last several months, one name turned up, with uncanny regularity, in the No. 1 spot for each and every term:  J. C. Penney.

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2011/02/23

Bill Gross: Investment Outlook 02.11

Devil’s Bargain by Bill Gross

There are lots of ways to describe money: moolah, lean green, dinero … I memorized one definition of “money” from an economic textbook way back in 1966: “A medium of exchange and a store of value,” it said. Well, yes, I suppose, although it failed miserably in the latter capacity in subsequent years. My primer also neglected to mention the increasingly dominant function that money was to assume in a finance-oriented, capitalistic system: Money can be used to make money. Not that interest rates and biblical usury aren’t millenniums old. I remember a story from Sidney Homer’s history of finance that described how a BC-era borrower would be forced to turn over his wife as collateral upon default – wondering at the time whether that might be an incentive for a future Mesopotamian debt bubble! Still, my textbook was nowhere near contemplating the half century of financial “innovation” that was ahead and how money and its levering was to be the foundation for much of America’s prosperity.

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2011/02/20

Rents In Rio Now Beat New York

Prime office space in Rio de Janeiro has overtaken that of New York for the first time as the most expensive in the Americas on the back of Brazil’s growing economy and its strong currency, according to US realty firm Cushman & Wakefield.

The cost of prime office rentals and associated costs in downtown Rio shot up by to $1,321 per square meter in 2010, compared with $1,260 in midtown New York.

Complete article via Financial Times.

2011/02/17

Why Isn’t Anyone From Wall St. In Jail?


Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them.

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2011/02/16

Borders Books Gets To Chapter 11

Borders, the bookstore that helped pioneer superstores that put countless mom-and-pop bookshops out of business, filed for bankruptcy protection today, sunk by crushing debt and sluggishness in adapting to a rapidly changing industry.

The 40-year-old company plans to close about 200 of its 642 stores over the next few weeks.

A spokeswoman said that the company plans to operate normally and honor gift cards and its loyalty program as it reorganizes.

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2011/02/16

Madoff Speaks: ‘Funds and Bankers Knew’

In his first interview since his arrest in December 2008, Bernie Madoff maintained that family members knew nothing about his crimes.

But during a private two-hour interview , and in earlier e-mail exchanges, he asserted that banks and hedge funds were “complicit” in his elaborate fraud.

He spoke with great intensity and fluency about his dealings with various banks and hedge funds. In asserting the complicity of others, Madoff pointed to the “willful blindness” of many banks and hedge funds who dealt with his investment advisory business and their failure to examine discrepancies between his regulatory filings and other information available to them.

“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’”

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2011/02/15

McWeddings Now On Hong Kong Menu

Blushing brides can now celebrate their big day with a Big Mac at their very own McWedding as wedding ceremonies are now on the menu at McDonald’s in Hong Kong, complete with apple pie wedding cakes, dresses made of party balloons and a McDonald’s buffet.

Couples tying the knot at the fast food chain will be most likely waiting in line with Ronald McDonald than walking down the aisle, as the restaurant will remain open as usual.

Wedding toasts will be alcohol free – it’s banned in the restaurants. Perhaps a chocolate shake will suffice.

2011/02/11

How SEO Makes You Stoopid

The Huffington Post has hired veteran journalists to beef up its news coverage. But a significant chunk of its readers come instead for articles like one published this week: “Chelsy Davy & Prince Harry: So Happy Together?”

The two-sentence article was just a vehicle for a slide show of photographs of the couple and included no actual news. But “Chelsy Davy” was one of the top searches on Google that day, and soon after the article was published it became one of the first links that popped up in Google’s search results.

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2011/02/11

Bernanke Interview Will Stay Secret


The Financial Crisis Inquiry Commission, created by Congress to investigate and report on the causes of the market meltdown late last decade, won’t publicly release its full 2009 interview with Federal Reserve Chairman Ben Bernanke, a commission spokesman said.

The FCIC is withholding records when there is “legal or proprietary information in those interviews that meant they could not be made public,” or no audio, transcript or summary exists, Tucker Warren, the FCIC’s spokesman, said after the panel yesterday released more than 300 witness interviews. He declined to elaborate on Bernanke. The interview is among records being transferred to the National Archives that will be made public in five years, Warren said.

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2011/02/11

Swiss Move To Freeze Mubarak Loot

Switzerland’s government moved Friday to freeze any assets in the country’s banks that might belong to former Egyptian President Hosni Mubarak or his family, the Swiss Federal Department of Foreign Affairs said Friday.

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2011/02/10

FaceBook, Google <3 Twitter

The Wall Street Journal is reporting today that FaceBook and Google are among the suitors engaged in discussions to purchase Twitter. The messaging service is said to have a valuation in the $8 – $10 billion range, despite estimated earnings last year of just $45 million. Twitter executives, according to the report, believe the company can grow to $100 billion.

Complete article via Wall Street Journal

2011/02/09

Big Bucks Leaving Arab Bank

Daily News Egypt

A senior official at the Arab International Bank, which operates outside the jurisdiction of the Central Bank of Egypt, said Tuesday that the bank saw large amounts of money transferred out of the country before January 25.

This was before the CBE closed banks nationwide for a week as a result of the ongoing mass protests. The unnamed official however denied that significant transfers had taken place during the current week starting Sunday, when bank reopened.

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2011/02/09

HuffPo’s Achilles’ Heel

Slate

Search engine optimization won’t work forever.

Are you wondering, “will AOL’s acquisition of the Huffington Post be successful?” I bet you are, as that’s been a common search engine query since the announcement earlier this week that AOL will buy the Huffington Post. Other ways you might phrase the question include, “AOL Huffington Post will work?” or “AOL and Arianna good idea?” But some people can’t spell, so it’s likely that a few are searching for things like, “AOL do I need dial-up to read HyffPo now?” or “Ariana Hiffington evil genius or just evil?” Well, any way you search for it, you’re in luck, because you’ve arrived at the best page on the Web to tell you all you need to know about AOL acquiring the Huffington Post—or should I say, AOL acquiring HuffPo. Or, that is to say, AOL buying HuffPo. (HuffPo being the short name for Arianna Huffington’s site, the Huffington Post, which has just been bought by AOL.)

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2011/02/07

What Will Come After Capitalism?

Ed. Note: Over the past 1200 years, the world’s system of economic organization has evolved from Feudalism to Mercantilism to Capitalism. But is capitalism the end of the line?

In a highly thought-provoking commentary, Life After Capitalism, Robert Skidelsky, member of the British House of Lords, Professor Emeritus of Political Economy at Warwick University, board member of the Moscow School of Political Studies, and author of a prize-winning biography of economist John Maynard Keynes, postulates what may come next and why.

Project Syndicate

Life After Capitalism, by Robert Skidelsky

London – In 1995, I published a book called The World After Communism. Today, I wonder whether there will be a world after capitalism. That question is not prompted by the worst economic slump since the 1930’s. Capitalism has always had crises, and will go on having them. Rather, it comes from the feeling that Western civilization is increasingly unsatisfying, saddled with a system of incentives that are essential for accumulating wealth, but that undermine our capacity to enjoy it. Capitalism may be close to exhausting its potential to create a better life – at least in the world’s rich countries.

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2011/02/07

Custom Domain Suffixes On The Way

Washington Post

The pillar of the basic Web address – the trusty .com domain – is about to face vast new competition that will dramatically transform the Web as we know it. New Web sites, with more subject-specific, sometimes controversial suffixes, will soon populate the online galaxy, such as .eco, .love, .god, .sport, .gay or .kurd.

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2011/02/06

Now Playing For The Mets…

ESPN

The trustee seeking to recover funds for victims of convicted swindler Bernard Madoff’s Ponzi scheme wants $1 billion from the owners of the New York Mets, according to The New York Times.

On Friday, US Bankruptcy Court judge Burton Lifland unsealed a lawsuit originally filed in December naming Mets owners Fred Wilpon, Jeff Wilpon and Saul Katz as defendants.

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