Archive for April, 2010

30
Apr
10

Samsung Electronics posts record Q1, says optimistic on Q2

NEWS
Samsung Electronics posts record Q1, says optimistic on Q2

Friday, April 30, 2010

Samsung Electronics says net profit has surged in the first quarter of this year amid higher sales.

The company said on Friday that it earned 3.99 trillion won ($3.58 billion) in the three months ended March 31. It had net profit of 580 billion won ($520.26 million) the year before.

Samsung said sales in the first quarter totalled 34.64 trillion won ($31.07 billion). That was 20.8 percent higher than the 28.67 trillion won ($25.72 billion) reported a year earlier.

Samsung is the world’s largest manufacturer of computer memory chips, flat screen televisions and liquid crystal displays. It ranks No.2 in mobile phones behind Finland’s Nokia Corp.

Samsung Electronics said yesterday that it plans to significantly increase its investment in both chips and flat-screens in 2010, giving a bullish outlook for the remainder of this year.

Samsung posted a historic high operating profit of 4.41 trillion won ($3.9 billion) in the first quarter, mainly driven by the stellar performance of its chip business, which reported 1.96 trillion won in operating profits. Its operating profits are slightly higher than its earlier forecast of 4.3 trillion won ($3.88 million). Samsung’s first-quarter sales reached 3.99 trillion won, compared with its guidance of 34 trillion won.

Samsung expected its earnings to further improve in the second quarter, and said it was “cautiously optimistic” about the second half as well, expecting strong demand for memory and LCDs, and a sales increase for handsets and TVs.

Samsung is the world’s top maker of memory chips, LCD panels and LCD TVs, and the No. 2 handset vendor.

“In order to address the increased demand in the market, we are planning to substantially increase the capital expenditure from the initial guidance, which was 5.5 trillion ($4.93 billion) for memory and 3 trillion ($2.69 billion) for LCDs,” Robert Yi, Samsung’s head of investor relations, said at an earnings conference call yesterday.

Media and analysts have speculated that Samsung may expand its chip investment to more than 7.5 trillion won ($6.73 billion) and its LCD spending to 4.5 trillion won ($4.04 billion) this year.

As for the memory market, Samsung expected supply and demand to remain tight for both DRAM and NAND in the current quarter, saying that a supply increase may not be enough to catch up with robust demand.

However, Samsung’s LCD division posted a lower-than-expected operating profit of 490 billion won ($439.53 million), ceding its top position in terms of profitability to its rival LG Display. LG, the world’s No. 2 LCD maker by sales, reported first-quarter operating profit of 789.4 billion won ($708.09 million), which beat market forecasts.

Samsung said the fall was mainly caused by depreciation costs, and expected an improved profit in the current quarter.

Samsung faces an increasing threat from LG Display, which seeks to catch up not only in profit but sales, with aggressive investment plans. To cope with the challenge, Samsung may spend an additional 1.5 trillion won ($1.35 billion) in expanding its eighth-generation LCD line, on top of the already earmarked 3 trillion won ($2.69 billion), market watchers say.

Yi said that a revision of its investment may be announced before the second-quarter earnings results will be announced in July.

Samsung’s mobile operating profit beat expectations, reaching 1.1 trillion won ($986.7 million). Samsung’s telecommunications division, which includes its handset business, posted a 12 percent operating profit margin, which Samsung ascribed to a reduction in marketing costs and strong sales of mid-end and high-end devices, especially touchscreen phones and messaging phones. Samsung expects a double-digit operating margin for its handset business this year, according to Yi.

A Samsung executive also said during the conference call that the company aims to achieve handset sales that would exceed its initial target of 270 million units this year. Samsung also expected that Android phones would account for more than half of its smartphones this year, while models based on its proprietary Bada platform will make up one third of its total smartphone models.
Yi said Samsung was developing a tablet-like PC which would challenge Apple’s iPad, and said the new model would hit the market after the first half of this year.

Samsung’s Digital Media division, which includes its TV business, saw its operating profit increase 11 percent to 520 billion won ($466.44 million) this year. Its TV sales reached a record high of 8.4 million units in the January to March period, up by nearly 50 percent from a year ago, driven by the growth of shipments to both advanced and developing markets, the company said.

Samsung shares jumped 2.9 percent at yesterday’s close, while the broader market rose 0.8 percent.

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30
Apr
10

Microsoft sidelines ‘Courier’ tablet project

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Microsoft sidelines ‘Courier’ tablet project

Friday, April 30, 2010

Microsoft has sidelined a ‘Courier’ project said to be focused on building a twin-screen tablet computer that could be used for entertainment and work.

‘At any given time, across any of our business groups, there are new ideas being investigated, tested, and incubated,’ Microsoft spokesman Frank X. Shaw (Corporate Vice President, Corporate Communications) said in a message posted on Thursday on the U.S. software giant’s blog.

‘The Courier project is an example of this type of effort and its technologies will be evaluated for use in future Microsoft offerings.’

Microsoft has kept details of the project secret, declining to confirm or deny what it is about.

Leaked reports of the table described it as opening like a book to reveal two screens operated by touch.

Shaw said he posted his brief comments in response to ‘a tonne of speculation’ about Courier.

A Microsoft tablet computer was expected to debut in January at the Consumer Electronics Show, which features the debuts of many of the tech-world’s latest devices.

Microsoft chief executive Steve Ballmer instead touted a Hewlett-Packard tablet computer during his on-stage presentation.

Industry insiders were expecting Courier to rival Apple’s freshly-launched iPad tablet computer.

The Wi-Fi-only model of the latest device from the maker of the Macintosh computer, the iPod and the iPhone went on sale in the United States on April 3.

The company sold over 500,000 iPads the first week.

Apple promised that its iPad models featuring 3G cellular connectivity will hit U.S. stores on Friday.

Apple has said that heavy US demand has forced it to delay the international release of the iPad by a month, until late May.

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29
Apr
10

Protesters enter NYC bank buildings before rally

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Protesters enter NYC bank buildings before rally

Thursday, April 29, 2010

Noisy protesters with signs took over three bank building lobbies on Thursday in a prelude to a Wall Street rally by workers and union leaders angry over lost jobs, the taxpayer-funded bailout of financial institutions and questionable lending practices by big banks.

Hours before the scheduled rally, more than 100 people entered a midtown Manhattan building housing JPMorgan Chase offices. They handed a bank executive a letter requesting a meeting with the CEO, and chanted ‘Bust up big banks!’ and ‘People power!’
A half-hour later, they were calmly escorted outside by officers, who remained expressionless as the protesters chanted, ‘The police need a raise.’

They then walked a few blocks down Park Avenue and crowded into a Wells Fargo and Wachovia building lobby. Police arrived on horseback as curious office workers watched the scene unfold from their windows.
‘We’re here today to stop the corporate greed that is ruining our neighbourhoods,’ said Andrea Goldman, 59, who’s part of a group called Alliance to Develop Power.

Sign slogans included: ‘Save Our Jobs’ and ‘Save Our Homes’.

The banks did not immediately respond to requests for comment.

Thousands of workers and union members were expected at the rally, organised by the AFL-CIO, the largest federation of North American labour unions, and an association of community groups.

The Securities Industry and Financial Markets Association, which includes many Wall Street financial institutions, declined to comment.

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29
Apr
10

Google ranked world’s most valuable brand

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Google ranked world’s most valuable brand

Thursday, April 29, 2010

Google was crowned the world’s most valuable brand on Wednesday by a research firm that found technology firms dominate when it comes to how much a name is worth in today’s markets.

Google, IBM, Apple and Microsoft topped global stalwarts Coca-Cola, McDonald’s, and Marlboro in a Top Ten brand value list packed with seven technology companies.

Google’s brand was worth more than $114 billion, a 14 percent climb from 2009, according to the annual Millward Brown Optimor ‘BrandZ Top 100 Most Valuable Global Brands’ report.
U.S. technology titan IBM saw its ‘brand value’ surge 30 percent to $86 billion while the worth of Apple’s name climbed 32 percent to $83 billion, according to the report.

Factors taken into consideration in the ranking include customer loyalty and opinions regarding brands and how they influence earnings.

Microsoft ranked fourth with its brand valued at slightly more than $76 billion, just ahead of the nearly $68 billion that Coca-Cola’s brand was said to be worth.

China Mobile, General Electric, and Vodafone claimed the eighth through tenth spots respectively.

Social-networking powerhouse Facebook made it onto a separate Top Twenty technology brands list for the first time with its company name value at $5.5 billion.

Electronics powerhouse Samsung saw the largest jump in brand value, soaring 80 percent from the previous year to $11.3 billion.

‘Technology brands demonstrated their pervasiveness in our daily lives,’ Millward Brown said in a release. ‘Use of social media was a key trend across many of the successful brands.’

The overall value of the Top 100 brands rose four per cent to more than two trillion dollars, according to Millward Brown, which specialises in advertising, marketing communications, media and brand equity research.

‘This ranking has elevated the importance of building brands among some of the world’s most successful companies,’ said Millward Brown global chief executive Eileen Campbell.

‘CEOs and CFOs around the world should be asking their brand and marketing teams how they can leverage brand to both protect and grow the business.’

An investor who put their money into a Brandz portfolio five years ago would have earned a double-digit return as opposed to losing cash with a set of stocks based on the SP 500 index, according to Millward Brown.

‘In the past, many companies were quick to cut their marketing spend during a down economy,’ said Joanna Seddon, head of Millward Brown Optimor.

‘A new trend has emerged in the wake of the recession as more companies realised the importance of maintaining and even increasing budgets to support brand loyalty and engagement.’
• Source(s): Millward Brown
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28
Apr
10

Toyota Recalls 50,000 Sequoia SUVs

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Toyota Recalls 50,000 Sequoia SUVs

Wednesday, April 28, 2010

••• Toyota Motor Corp will recall about 50,000 2003-year Sequoia sport utility vehicles in the United States and Canada to fix a problem in their vehicle stability control system, the company’s U.S. sales unit said Wednesday. Toyota Motor Sales U.S.A. Inc. said the recall will be conducted to adjust the VSC system, which is designed to control a loss of traction in turns as a result of front or rear tire slippage during cornering.

Without the adjustment, the VSC system could activate at low speed for a few seconds after acceleration from a stopped position, Toyota said. As a result, the vehicle may not accelerate as quickly as the driver expects, the company said, adding there have been no reported injuries or accidents as a result of this condition.

Detailed information and answers to questions are available to customers at www.toyota.com/recall and at the Toyota Customer Experience Center at 1-800-331-4331.
» See: Toyota Announces Voluntary Recall on 2003 Model-Year Sequoia to Upgrade Program Logic in Vehicle Stability Control System

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28
Apr
10

Goldman’s defense? We’re misunderstood

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Goldman’s defense? We’re misunderstood

Wednesday, April 28, 2010

Goldman Sachs on Tuesday denied reaping vast profits from the collapse of the U.S. housing market as its top executive and a star trader faced hostile questions in Congress over the 2008 financial meltdown.

In angry exchanges before a Senate investigative committee, the storied Wall Street firm was accused of fuelling a crisis that forced thousands of Americans from their homes and continues to ravage the U.S. economy.

Top Goldman Sachs officials have defended their conduct in the financial crisis, flatly disputing the government’s fraud allegations against the giant financial house. I did not mislead investors, insisted a trading executive at the heart of the government’s case.

But they ran into a wall of bipartisan wrath before a Senate panel investigating Goldman’s role in the financial crisis and the Securities and Exchange Commission fraud suit against it and one of its traders. Sen. Carl Levin (D-Mich.) accused Goldman on Tuesday of making risky financial bets.

About a half dozen protesters were in the committee room, dressed in prison stripes with names on signs around their necks of Fabrice Tourre, the only company official directly accused in the SEC suit, and Goldman CEO Lloyd Blankfein, who was also scheduled to testify.

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27
Apr
10

Goldman Sachs: Lloyd Blankfein Says Firm Doesn’t Need to Disclose Position

NEWS
Goldman Sachs: Lloyd Blankfein Says Firm Doesn’t Need to Disclose Position

Tuesday, April 27, 2010

Goldman Sachs on Tuesday denied reaping vast profits from the collapse of the U.S. housing market as its top executive and a star trader faced hostile questions in Congress over the 2008 financial meltdown.

In angry exchanges before a Senate investigative committee, the storied Wall Street firm was accused of fuelling a crisis that forced thousands of Americans from their homes and continues to ravage the U.S. economy.

Democratic Senator Carl Levin, the panel’s chairman, assailed Goldman as representative of Wall Street’s ‘unbridled greed,’ drawing them into a raging political battle over financial reform.

The Senate was expected to vote later on Tuesday on whether to proceed with debate about the most sweeping financial reforms in a generation, a day after Republicans successfully blocked a similar move.

Against this caustic backdrop executives battled to salvage the firm’s reputation, rejecting charges – recently filed by a U.S. watchdog – that Goldman sold clients a complex financial product devised by some who bet against it.

Levin demanded to know why Goldman had been ‘trying to sell a shitty deal’ to investors, fuming that ‘as we speak, lobbyists fill the halls of Congress hoping to weaken or kill reforms that would end these abuses.’
French trader Fabrice Fabulous Fab Tourre, who is at the centre of the Securities and Exchange Commission’s case against the firm, was among the first to be dragged before the committee.

He denied any wrongdoing: ‘I deny – categorically – the SEC’s allegation. And I will defend myself in court against this false claim,’ said Tourre.

‘I have been the target of unfounded attacks on my character and motives.’

If Goldman executives hoped to get an easier ride from Republicans, they may have been disappointed. Former Republican presidential candidate John McCain was scathing.

‘I don’t know if Goldman Sachs has done anything illegal,’ he said, adding that ‘from the reading of these emails and the information that this committee has uncovered there is no doubt their behaviour was unethical and the American people will render a judgment as well as the courts.’

Goldman chief executive Lloyd Blankfein was due to appear later in the day, but in prepared testimony said there was nothing wrong with Goldman hedging its bets by holding ”short” positions that would benefit the firm if housing prices collapsed.

‘(We) didn’t have a massive short (position) against the housing market and we certainly did not bet against our clients,’ he said.

‘If our clients believe that we don’t deserve their trust, we cannot survive,’ he said. ‘We believe that we managed our risk as our shareholders and our regulators would expect.’

Blankfein also said that, ‘while profitable overall,’ Goldman lost about $1.2 billion from investments tied to the residential housing market.
In the hearing, Levin pointed to Goldman email messages he said refuted the firm’s claims.

In one November 2007 message from Blankfein, he says: ‘Of course we didn’t dodge the mortgage mess. We lost money, then made more than we lost because of shorts,’ which are essentially bets that the market will drop.

Goldman Sachs on Tuesday denied reaping vast profits from the collapse of the U.S. housing market as its top executive and a star trader faced hostile questions in Congress over the 2008 financial meltdown.

In angry exchanges before a Senate investigative committee, the storied Wall Street firm was accused of fuelling a crisis that forced thousands of Americans from their homes and continues to ravage the U.S. economy.

Democratic Senator Carl Levin, the panel’s chairman, assailed Goldman as representative of Wall Street’s ‘unbridled greed,’ drawing them into a raging political battle over financial reform.

The Senate was expected to vote later on Tuesday on whether to proceed with debate about the most sweeping financial reforms in a generation, a day after Republicans successfully blocked a similar move.

Against this caustic backdrop executives battled to salvage the firm’s reputation, rejecting charges – recently filed by a U.S. watchdog – that Goldman sold clients a complex financial product devised by some who bet against it.

Levin demanded to know why Goldman had been ‘trying to sell a shitty deal’ to investors, fuming that ‘as we speak, lobbyists fill the halls of Congress hoping to weaken or kill reforms that would end these abuses.’

French trader Fabrice Fabulous Fab Tourre, who is at the centre of the Securities and Exchange Commission’s case against the firm, was among the first to be dragged before the committee.
He denied any wrongdoing: ‘I deny – categorically – the SEC’s allegation. And I will defend myself in court against this false claim,’ said Tourre.

‘I have been the target of unfounded attacks on my character and motives.’

If Goldman executives hoped to get an easier ride from Republicans, they may have been disappointed. Former Republican presidential candidate John McCain was scathing.

‘I don’t know if Goldman Sachs has done anything illegal,’ he said, adding that ‘from the reading of these emails and the information that this committee has uncovered there is no doubt their behaviour was unethical and the American people will render a judgment as well as the courts.’

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27
Apr
10

Hugh Hefner saves iconic Hollywood sign

NEWS
Hugh Hefner saves iconic Hollywood sign

Tuesday, April 27, 2010

Entertainment

Developers won’t be building anything behind the landmark Hollywood sign.

The Trust for Public Land says Playboy founder Hugh Hefner’s $900,000 donation completes the conservation group’s $12.5 million fundraising drive to protect the 56ha behind the Hollywood sign.

Governor Arnold Schwarzenegger said Monday that Hefner was the final donor, calling it ‘the Hollywood ending we hoped for’.

Hefner’s gift caps a yearlong effort by conservationists to keep developers out of the area behind the sign. Aileen Getty, a billionaire daughter of oil baron J. Paul Getty, and The Tiffany and Co Foundation earlier contributed $1 million.

In a statement, Hefner says the sign is ‘Hollywood’s Eiffel Tower’.

It means 56ha around the hillside sign will be protected from developers, who wanted to turn the land into high-price housing estates.

“It’s a symbol of dreams and opportunity,” Gov Schwarzenegger said.

The investors had planned to sell the land to developers, but agreed to sell to the trust for $12.5 million if the money could be raised.

Hefner said: “My childhood dreams and fantasies came from the movies, and the images created in Hollywood had a major influence on my life and Playboy.”

Donations came from all 50 states, 10 countries and celebrities, including actor Tom Hanks and director Steven Spielberg.

In February, the sign was draped with a banner which read “Save the Peak”, to raise awareness of the campaign.

The Hollywood sign itself, which is set high up in the hills, was initially created in 1923 as an advert for a real estate development called Hollywoodland.

It never faced demolition, but campaigners were worried the famous vista would be ruined by the sight of properties towering over the four-storey high letters.

27
Apr
10

Ford Recalling 33,000 Vehicles Over Front Seat Defects

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Ford Recalling 33,000 Vehicles Over Front Seat Defects

Tuesday, April 27, 2010

••• Ford is recalling 33,256 cars to make their front seats comply with federal safety standards, according to a notice on the U.S. transportation department’s Office of Defects Investigation website.

Models affected include the 2010 Fusion (above), Explorer, Explorer SportTrac and Mercury Mountaineer and Milan vehicles made between Dec. 15, 2009, and Feb. 3, 2010, and equipped with manual front-seat recliners.

According to the safety agency, “The recliner gear plate teeth may be out of dimension specification, which could result in limited pawl to gear plate tooth engagement.”

“In the event of a crash,” the department said, “the seatback and head restraint may move rearward, increasing the risk of injury.”

A Ford spokesman told the Associated Press that no accidents or injuries have been reported due to the issue.

Dealers are expected to begin remedying the issue for free on or before April 30. If you own one of these cars and want additional information, Ford has a help line set up at 866-436-7332.

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27
Apr
10

NHTSA Announces Recall on 2010 Porsche Panamera

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NHTSA Announces Recall on 2010 Porsche Panamera

Tuesday, April 27, 2010

••• Porsche is recalling models of its new Panamera four-door sports car due to an issue that can cause the front seat belts to not work, according to a notice by the National Highway Traffic Safety Administration.

The recall affects 3,176 Panamera S, 4S and Turbo sedans, all from model-year 2010.

According to NHTSA, “If the front seats are adjusted towards an extreme position, resulting in unfavorable tolerance of the mating components, it is possible that the function of the locking mechanism of the seat belt mount can no longer be guaranteed. The seat belt mount could detach from the anchoring system when the seat belt is fastened or opened.”

In the event of a crash, the seat belts “may not provide adequate protection for the seat occupant,” the notice said.


To remedy the situation, Porsche dealers will for free install an additional locking device in both front seats. Porsche has not said when owners would start to receive notice with further instructions, but if you own one of these cars and are concerned, you can call the German automaker’s hot line at 800-545-8039.

» See The NHTSA Porxche Panamera Recall Notice

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27
Apr
10

Google Acquires LabPixies

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Google Acquires LabPixies
Google Acquires LabPixies For $25 Million

Tuesday, April 27, 2010

Google has bought an Israeli company that develops mini-programs for the web known as widgets in the latest in a string of acquisitions.

The Mountain View, California-based Google announced the purchase of LabPixies in a blog post. Terms of the transaction were not disclosed.

LabPixies already makes widgets for iGoogle, Google’s personalised homepage service.

‘We decided that we could do more if we were part of the same team, and as such, we’re thrilled to announce the acquisition of Labpixies,’ Don Loeb, a member of the iGoogle team said.

‘The team will be based in our ever-growing Tel Aviv office and will anchor our iGoogle efforts across Europe, the Middle East, and Africa,’ Loeb said.

‘We are looking forward to working with Labpixies to develop great web apps and leverage their knowledge and expertise to help developers and improve the ecosystem overall,’ he said.

Besides iGoogle, LabPixies has also developed widgets for Google’s Android mobile phone operating system and the iPhone.

Widgets developed by LabPixies include calendars, news feeds, to-do lists and games.

Google has been on a buying spree for the past few months, snapping up a number of small startups including DocVerse, Picnik, Aardvark and Plink.

Chief executive Eric Schmidt said in a conference call with analysts in January that Google planned to acquire about one company a month this year.

● Ran Ben – Yair, CEO LabPixies, said, “We deal with Google to see a golden opportunity for our team to fit in workspace sharing with us the same desire – to millions of users the ultimate online experience.'”

● Prof. Yossi Matias, director of Google R & D Center in Israel, said, “We believe that the combination of LabPixies center staff will allow us to continue strengthening the web platform, and make it attractive than ever for developers and users around the world.” He added that “Google believes in innovation and creativity Israel, and will continue to pursue collaboration with – for start-ups in the future local.”
• Source(s): Google Inc. & LabPixies

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26
Apr
10

Republicans block debate of finance rules reform

NEWS
Republicans block debate of finance rules reform

Monday, April 26, 2010

U.S. lawmakers on Monday failed to pass a test vote of the widely watched financial regulatory reform bill in a sharply divided Senate.

The lawmakers voted 57 – 41, falling short of the 60 votes that Democrats needed to proceed on the regulatory overhaul in the Senate. All 41 Republican senators said that they oppose the bill.

Two Democrats voted against the bill and two Republicans did not vote.

The legislation, which has become President Barack Obama’s top domestic priority after the completion of the healthcare reform, aims to reset the rules of the U.S. financial sector.

The bill, proposed by Senate Banking Committee Chair Chris Dodd (D-Conn.), would map a way to dissolve the so-called “too big to fail” firms in a bid to avoid massive taxpayer-funded “bailouts” introduced in late 2008 amid the financial crisis.

It will also tighten regulations on the giant market in derivatives – complex, privately traded instruments tied to the underlying value of a commodity and seen as vehicles for dangerous speculation.

There has been a consensus that the country must tighten regulations on Wall Street after the collapse of Lehman Brothers in September 2008, which triggered the fresh round of global financial crisis and a deep recession.

But wide disagreements exist between the two parties.

Republicans say the Dodd bill will add new burden to the U.S. taxpayers and may not prevent future crisis.

President Obama said earlier this month that he urged the bill to pass the Senate in weeks. But analysts say that given the escalating political pressure, it will take longer time for the sweeping financial overhaul to complete.

Obama said on Monday he was “deeply disappointed” that Senate Republicans had blocked the test vote.

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26
Apr
10

Goldman Sachs and “War Profiteering”

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Goldman Sachs and “War Profiteering”

Monday, April 26, 2010

Embattled Wall Street investment giant Goldman Sachs has hit back at claims it used the U.S. sub-prime mortgage crisis to make tens of millions of dollars in profit.

The financial giant, already facing fraud charges, found itself in the middle of a new firestorm on Saturday after emails released by a U.S. Senate panel suggested Goldman executives made huge profits out of the 2007 crisis.

Goldman fired back on Sunday, accusing the Senate Permanent Subcommittee on Investigations of having ‘cherry-picked just four emails from the 20 million pages of documents and emails provided to it’.

‘It is concerning that the subcommittee seems to have reached its conclusion even before holding a hearing,’ added Goldman Sachs spokesman Lucas van Praag.

The emails come at a bad time for Goldmans Sachs.

Earlier this month, the U.S. Securities and Exchange Commission announced it was charging the company with fraud, accusing it of ‘defrauding investors by misstating and omitting key facts’ about a product based on subprime, or higher-risk mortgage-backed securities.

On Saturday, subcommittee chairman Democratic Senator Carl Levin said Goldman Sachs and other investment banks had acted as ‘self-interested promoters of risky and complicated financial schemes that helped trigger the crisis’.

He said the bank had bundled toxic mortgages into complex financial instruments, got credit rating agencies to label them as AAA securities, and then sold them to investors, magnifying and spreading risk throughout the financial system.

In addition, Levin said, the bank often bet against the instruments it sold and rolled in profits as a result.

Van Praag said on Sunday the company had net losses of over $1.2 billion in residential mortgage-related products in 2007 and 2008.

‘This demonstrates conclusively that we did not make a significant amount of money in the mortgage market,’ he said.

But the four emails released by the subcommittee suggest that the company was able to make massive profits by shorting products including residential mortgage-backed securities and collateralised debt obligations (CDOs).

In one email, Goldman Sachs chairman and chief executive officer Lloyd Blankfein appeared to gloat about the strategy in an exchange with other top Goldman executives.

‘Of course we didn’t dodge the mortgage mess. We lost money, then made more than we lost because of shorts,’ the message said.

In another, a Goldman Sachs manager noted that the firm had bet against 32 billion dollars in mortgage-related securities that had been downgraded by credit rating agencies, causing losses for many investors.

‘Sounds like we will make some serious money,’ the manager wrote.

‘Yes, we are well positioned,’ his colleague responded.

In a third email, Goldman employees discussed securities that were underwritten and sold by the company and tied to mortgages issued by Washington Mutual Bank’s subprime lender, Long Beach Mortgage.

One employee reported the ‘wipeout’ of one Long Beach security and the ‘imminent’ collapse of another as ‘bad news’ that would cost the firm $2.5 million.

The ‘good news,’ the employee wrote, was that Goldman had bet against the very securities it had assembled and sold, meaning the failure would net the company five million dollars.

Blankfein and other current and former company personnel are scheduled to testify before the subcommittee on Tuesday.

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26
Apr
10

Mississippi tornado leaves 10 dead amid destruction

NEWS
Mississippi tornado leaves 10 dead amid destruction

Monday, April 26, 2010

Earth

••• Rescuers spread out to find any survivors in the Mississippi countryside hit hard by a tornado that killed 10 people, while residents returned to demolished homes to salvage what they could and bulldoze the rubble.

About 40 National Guard soldiers on Sunday patrolled the devastated Yazoo City, some in Humvees and others in a Blackhawk helicopter.

Dozens of volunteer state troopers and other law enforcement officers also came from far-flung parts of the state to help.

The high winds on Saturday ripped roofs off buildings in Yazoo County, a county of about 28,000 people known for blues, catfish and cotton.

Governor Haley Barbour described ‘utter obliteration’ among the picturesque hills rising from the flat Mississippi Delta.

‘This tornado was enormous,’ he said, adding there are about 100 homes in Yazoo County and another 38 in Choctaw County that are uninhabitable.

State emergency officials are still trying to determine how many people have been left homeless after Saturday’s storm and it’s unlikely the final tally of damage and other figures will be done before Tuesday.

Mississippi Emergency Management Agency spokesman Greg Flynn said on Sunday that at least three dozen people were hurt and nearly 200 homes damaged in Attala, Holmes, Monroe and Warren Counties.

Officials were still working to assess the total damage in Choctaw and Yazoo counties.

On Sunday, many people were focused on cleanup, with the buzz of chainsaws and tractors rumbling across the region as people tried to salvage what they could.

Utility workers in cherry-pickers hovered over police officers directing traffic on a two-lane highway busy with relief workers and volunteers arriving to help.

About three dozen members of Hillcrest Baptist Church prayed among warped metal and broken boards, all that remained of their church building. They dug through the rubble to pull out a few chairs and other items.

Dale Thrasher, 60, the only church member in the building when the tornado hit, told the congregation he climbed under the communion table and prayed to God for protection.

‘The whole building caved in,’ he said. ‘But me and that table were still there.’
Meteorologists said it was too soon to tell whether a single long-lasting tornado – or multiple shorter ones – carved the path of destruction from northeastern Louisiana to east-central Mississippi.

Hundreds were still without power on Sunday, and officials said some may be without power until Tuesday or even Wednesday.

The same storm front spawned heavy thunderstorms that raked across the Southeast, snapping trees, damaging rooftops and scattering hail.
Tornadoes also were reported in Louisiana, Arkansas and Alabama, and the severe weather continued to track northeastward early on Sunday as gusty winds also downed trees crossing northwest Georgia.

The severe weather began in Louisiana when a tornado destroyed 12 homes and warehouses at Complex Chemical Co., which makes antifreeze and other automotive fluids.

The storm system moved east, with the twister hitting nearby Yazoo County, Mississippi, killing four people.

In adjacent Holmes County, another person was killed.

A little farther northeast, a tornado hit Choctaw County, where another five victims were reported, including children ages three months, nine and 14.

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25
Apr
10

Mitt Romney: GOP Big Gun for 2012

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Mitt Romney: GOP Big Gun for 2012

Sunday, April 25, 2010

The report has analyst Teddy Davis saying Mitt Romney is “the big gun” because he has money and name recognition, and the GOP has a history of choosing the previous “runner-up.” Romney has been campaigning for other Republicans around the country and built a lot of good will. Davis says “Romney is considered the front-runner. Sarah Palin is the big question mark, as to whether she will run or not.

Newly-elected GOP Sen. Scott Brown is unlikely to run, even though he has become an overnight star with his win in Massachusetts. Davis points out that Brown is not pro-Life, which would hurt him in GOP primaries.
President Barack Obama’s prospective 2012 Republican rivals are investing heavily in the Internet, looking to cut into what was an overwhelming advantage for Obama in the 2008 campaign.

Through the first three months of the year, the political groups started by Mitt Romney, Tim Pawlenty, Sarah Palin, Newt Gingrich and Mike Huckabee have spent a total of nearly $600,000 building their web operations, according to reports filed this month with the Federal Election Commission and the Internal Revenue Service.

The online competition has taken a variety of forms. Palin has hired the two young founders of a fan site that zealously defends her honor and upbraids her critics. Pawlenty has hired online consultants from the 2008 presidential campaigns of Romney and Ron Paul. Gingrich has developed a sophisticated in-house micro-targeting operation. And Huckabee has deployed volunteers to man social networks.

And, though each potential candidate insists the efforts – online and otherwise – are intended to boost conservatives headed into the 2010 midterm elections, their web operations suggest a keen awareness of the Internet’s importance for organizing, messaging and raising money – and certainly could help lay the groundwork for their own prospective bids in 2012.

“Anyone thinking about running for president – or even local dog catcher – needs to have an effective online strategy from day one, because it will be the most determining factor of early-, mid- and possibly late support,” said David All, an online political consultant who founded the blog TechRepublican.com, which tracks the use of Internet applications by Republican candidates and groups.

It’s not enough to simply have grassroots energy on the web, All says, because it takes infrastructure to channel online enthusiasm into engagement – and donations. “You have to be willing to put resources into online politics to do it right,” he said.

The biggest investment in online operations belongs to Romney, the former Massachusetts governor whose losing 2008 campaign for the Republican presidential nomination had the most advanced online operation in the field, and Gingrich, the former GOP House Speaker from Georgia who flirted with running in 2008 and is already hinting about 2012.

Gingrich’s political group, American Solutions for Winning the Future has a major fundraising advantage over the others, because – as a so-called 527 group – it can accept unlimited contributions from people and corporations.

The groups started by Palin, Romney, Huckabee and Pawlenty, on the other hand, are federal leadership political action committees subject to contribution limits of $5,000 per-person-per-year and barred from taking corporate cash. They are, however able to give donations to candidates (which 527s are barred from doing), though such donations typically constitute only a fraction of expenditures.

American Solutions has used its cash advantage to fund a $600,000-a-year online operation. It includes outside contractors specializing in building membership lists and donor rolls through targeted web ads and building databases, such as ACF Solutions (which received $28,000 in the first quarter, according to an American Solutions IRS filing), and a three-person in-house team that has built a sophisticated micro-targeting system that breaks down the group’s email list into issue interests, level of engagement, congressional districts and zip codes.

“One of the things we’re really big on here at American Solutions is sending the right message to the right people,” said Tim Cameron, the group’s director of digital operations. “We put a lot of money into our back-end infrastructure.”

Though neither PACs nor 527s are permitted to spend their cash or assets directly on a presidential campaign, or any other type of campaign (by their chairmen or chairwomen), for that matter, they are often used to build staffs that can quickly transfer to campaigns payrolls, as well as donor or e-mail lists that can be rented, swapped or purchased by a presidential campaign.

Romney’s leadership PAC, Free & Strong America, spent nearly $264,000 in the first three months of the year on Web services, consulting, fundraising and data management, according to its FEC filings.

The lion’s share of that – $185,500 – went to Targeted Victory, the Alexandria, Va.-based firm headed partly by former Republican National Committee official Zac Moffatt, who runs Romney’s Web operation.

“His mission is to ensure that the PAC is constantly engaging and expanding its community online,” said Free & Strong America spokesman Eric Fehrnstrom, who — like many employees and consultants paid by the PAC – worked on Romney’s 2008 campaign.

But a key member of Romney’s vaunted 2008 online team, Mindy Finn, signed on to work for the PAC chaired by Pawlenty, Freedom First, which has drawn praise from the tech community for its hires and use of the Internet.

Pawlenty, the Minnesota governor who’s not as well-known as some of the other prospective 2012 candidates, has deployed technology in innovative ways to close the gap, including hosting a Facebook town hall this month that drew 1,100 people.

“We put a high premium on new media and online outreach,” said Freedom First spokesman Alex Conant.

In the first quarter, FEC records show Freedom First spent about $103,000 on its Web operation, almost one-third of which went to a firm run by Finn and Patrick Ruffini. An additional $37,000 went to a California firm called Terra Eclipse, which built the website for Paul’s tech-savvy 2008 presidential run, while $5,000 went to the firm of Pat Hynes and Liz Mair, which did outreach to conservative bloggers for McCain’s presidential bid and the RNC, respectively.

To All, the TechRepublican.com blogger, Palin is an example of unfulfilled online potential.

“It would be fun to see her use that potential to its fullest,” he said, but, he added, “it’s pretty clear to me that there are people who are making decisions about what Sarah Palin does online who probably don’t have a deep understanding of the interactive channel.”

For example, All pointed out that, after Palin resigned as Alaska governor, she terminated a Twitter account with a so-called handle identifying her as governor, which had thousands of followers and started assembling a following from scratch using a new account with the handle @SarahPalinUSA.

“All she had to do was go in and change her user name and setting, and she could have kept all her supporters,” All said.

But Rebecca Mansour, who helps run Palin’s Internet operation, said Palin had to hand over her previous Twitter account to the state of Alaska because it was “regarded as state property,” so she couldn’t merely convert it to keep her followers.

Nonetheless, Palin’s new Twitter feed has nearly 135,000 followers – more than the accounts maintained by Romney, Pawlenty and Huckabee combined (though Gingrich’s is in a category by itself with 1.3 million followers), while Palin’s 1.5 million friends on Facebook laps the field many times over.

Though Palin’s leadership political action committee Sarah PAC boasts upward of 200,000 addresses on its e-mail list, Palin’s online operation centers more than the others on Twitter and Facebook, which require less overhead but don’t allow for as much data collection – a crucial consideration for fundraising.

In all, Sarah PAC spent less than $52,000 on its online operations in the first three months of the year.

To help manage online content, Sarah PAC late last year began paying Mansour and Joseph Russo, political neophytes who had started a blog called Conservatives4Palin, which became extremely popular among Palin supporters for its impassioned defenses of the former governor and attacks onmedia outlets deemed unfair to her.

Mansour, 36, a former screenwriter from Los Angeles, and Russo, a 23-year-old New Jersey resident, left the blog last summer and formed separate consulting firms, which have received a combined $46,000 in payments from Sarah PAC, according to FEC records.

“The idea online is to be able to get [Palin’s] messages out to as many of her supporters as possible,” said Sarah PAC Treasurer Tim Crawford.

The technical work of maintaining Sarah PAC’s website and online donation interface is being done by an Austin, Texas, firm called Upstream Communications, which ran Rudy Giuliani’s 2008 presidential campaign website and has received $88,000 from the PAC. Upstream took over from an online company run by Becki Donatelli, who had raised money online for the presidential campaign of Palin presidential running mate Sen. John McCain, but who reportedly butted heads with Palin’s Alaska inner circle.

Huckabee’s Huck PAC, meanwhile, spent only $31,000 on Web-related operations in the first quarter. But its executive director, J. Hogan Gidley, said the PAC offsets its relatively modest cash flow by deputizing a volunteer in every state to run a state-specific account for it on Facebook, Twitter and Ning, a smaller social-networking site popular with grass-roots political activists.

“Our strategy means a broad nationwide net of supporters and fewer resources required for day-to-day operations,” he said.

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25
Apr
10

U.K.: Foreign Office sorry for insult to Pope Benedict XVI

NEWS
U.K.: Foreign Office sorry for insult to Pope Benedict XVI

Sunday, April 25, 2010

The Government has apologised to the Pope over official documents that mocked his forthcoming visit to Britain by suggesting he should bless a gay marriage and even launch Papal-branded condoms.

The astonishing proposals, leaked to The Sunday Telegraph, were contained in secret papers drawn up earlier this month by civil servants following a ‘brainstorm’.

The ideas, included in a memo headed ‘The ideal visit would see …’, ridiculed the Catholic Church’s teachings including its opposition to abortion, homosexual behaviour and contraception. Many appeared to be deliberately provocative rather than a serious attempt to plan an itinerary for the September visit.

The proposals, which were then circulated among key officials in Downing Street and Whitehall, also include the Pope opening an abortion ward; spending the night in a council flat in Bradford; doing forward rolls with children to promote healthy living; and even performing a duet with the Queen.

In reference to the hugely sensitive issue of child abuse engulfing the Catholic Church, the Government document suggests that the Pope should take a “harder line on child abuse – announce sacking of dodgy bishops” and “launch helpline for abused children”.

The document was sent out by a junior Foreign Office civil servant with a covering note admitting that some of the plans were “far-fetched”.

Recipients of the memo were furious at its content and an investigation was launched. One senior official was found responsible and has been transferred to other duties.

• Go here to read the rest:
» Pope ‘could cancel UK visit’ over ‘offensive’ Foreign Office memo
» Ministers apologise for insult to Pope
• Source(s): Telegraph Media Group Ltd. & ITN
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24
Apr
10

Recalls? Toyota Still Showing Profit

NEWS
Recalls? Toyota Still Showing Profit

Saturday, April 24, 2010

••• Results from Toyota Motor to be released next month are expected to show the auto giant returning to profit in the year to March, despite a massive recall scandal, news reports say.

The Japanese automaker is expected to post a group operating profit of up to 50 billion yen ($531.75 million), reversing a 461 billion yen ($4.90 billion) operating loss for the previous year, the Nikkei business daily said on Saturday.

The uptick is mainly due to cost-cutting and a weak yen, which offset the costs of the global recalls, the daily said.

The company has recalled around 10 million vehicles worldwide since late last year due to accelerator and brake defects, but nevertheless expected to see a ‘good earnings situation’ a Toyota executive told Kyodo News.

Toyota had earlier forecast an operating loss of 20 billion yen ($212.7 million) for the year to the end of March.

Sales were expected to show a five percent fall to 7.2 million units, Nikkei said. The better-than-expected sales were partially due to strong demand for its new Prius hybrid car in Japan.

A Toyota spokesman was not immediately available to comment on the report.

The firm is due to announce its earnings results in early May.

On Monday the company agreed to pay a $16.4 million fine, the largest for an automaker in the United States, for hiding for at least four months accelerator pedal defects blamed in more than 50 U.S. deaths.

Toyota faces at least 97 U.S. lawsuits seeking damages for injury or death linked to sudden acceleration and 138 class action lawsuits from American customers suing to recoup losses in the resale value of Toyota vehicles.

The company overtook General Motors in 2008 as the world’s top automaker, but the safety recalls raised questions over whether it sacrificed quality to become number one.
• Source(s): Toyota Motor Corporation & Nikkei Inc.
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24
Apr
10

Goldman Sachs e-mails show bank sought to profit from housing downturn

NEWS
Goldman Sachs e-mails show bank sought to profit from housing downturn

Saturday, April 24, 2010

In late 2007 as the mortgage crisis gained momentum and many banks were suffering losses, Goldman Sachs executives traded e-mail messages saying that they would make “some serious money” betting against the housing markets.

The e-mails, released Saturday morning by the Senate Permanent Subcommittee on Investigations, appear to contradict some of Goldman’s previous statements that left the impression that the firm lost money on mortgage-related investments.

In the e-mails, Lloyd C. Blankfein, the bank’s chief executive, acknowledged in November of 2007 that the firm indeed had lost money initially. But it later recovered from those losses by making negative bets, known as short positions, enabling it to profit as housing prices fell and homeowners defaulted on their mortgages. “Of course we didn’t dodge the mortgage mess,” he wrote. “We lost money, then made more than we lost because of shorts.”

In another message, dated July 25, 2007, David A. Viniar, Goldman’s chief financial officer, remarked on figures that showed the company had made a $51 million profit in a single day from bets that the value of mortgage-related securities would drop. “Tells you what might be happening to people who don’t have the big short,” he wrote to Gary D. Cohn, now Goldman’s president.

The messages were released Saturday ahead of a Congressional hearing on Tuesday in which seven current and former Goldman employees, including Mr. Blankfein, are expected to testify. The hearing follows a recent securities fraud complaint that the Securities and Exchange Commission filed against Goldman and one of its employees, Fabrice Tourre, who will also testify on Tuesday.

Actions taken by Wall Street firms during the housing meltdown have become a major factor in the contentious debate over financial reform. The first test of the administration’s overhaul effort will come Monday when the Senate majority leader, Harry Reid, is to call a procedural vote to try to stop a Republican filibuster.

Republicans have contended that the renewed focus on Goldman stems from Democrats’ desire to use anger at Wall Street to push through a financial reform bill.

Carl Levin, Democrat of Michigan and head of the Permanent Subcommittee on Investigations, said that the e-mail messages contrast with Goldman’s public statements about its trading results. “The 2009 Goldman Sachs annual report stated that the firm ‘did not generate enormous net revenues by betting against residential related products,’?” Mr. Levin said in a statement Saturday when his office released the documents. “These e-mails show that, in fact, Goldman made a lot of money by betting against the mortgage market.”

A Goldman spokesman did not immediately respond to a request for comment.

The Goldman messages connect some of the dots at a crucial moment of Goldman history. They show that in 2007, as most other banks hemorrhaged losses from plummeting mortgage holdings, Goldman prospered.

At first, Goldman openly discussed its prescience in calling the housing downfall. In the third quarter of 2007, the investment bank reported publicly that it had made big profits on its negative bet on mortgages.

But by the end of that year, the firm curtailed disclosures about its mortgage trading results. Its chief financial officer told analysts at the end of 2007 that they should not expect Goldman to reveal whether it was long or short on the housing market. By late 2008, Goldman was emphasizing its losses, rather than its profits, pointing regularly to write-downs of $1.7 billion on mortgage assets and leaving out the amount it made on its negative bets.

Goldman and other firms often take positions on both sides of an investment. Some are long, which are bets that the investment will do well, and some are shorts, which are bets the investment will do poorly. If an investor’s positions are balanced – or hedged, in industry parlance – then the combination of the longs and shorts comes out to zero.

Goldman has said that it added shorts to balance its mortgage book, not to make a directional bet that the market would collapse. But the messages released Saturday appear to show that in 2007, at least, Goldman’s short bets were eclipsing the losses on its long positions. In May 2007, for instance, Goldman workers e-mailed one another about losses on a bundle of mortgages issued by Long Beach Mortgage Securities. Though the firm lost money on those, a worker wrote, there was “good news”: “we own 10 mm in protection.” That meant Goldman had enough of a bet against the bond that, over all, it profited by $5 million.

Documents released by the Senate committee appear to indicate that in July 2007, Goldman’s daily accounting showed losses of $322 million on positive mortgage positions, but its negative bet – what Mr. Viniar called “the big short” – came in $51 million higher.

As recently as a week ago, a Goldman spokesman emphasized that the firm had tried only to hedge its mortgage holdings in 2007 and said the firm had not been net short in that market.

The firm said in its annual report this month that it did not know back then where housing was headed, a sentiment expressed by Mr. Blankfein the last time he appeared before.

“We did not know at any minute what would happen next, even though there was a lot of writing,” he told the Financial Crisis Inquiry Commission in January.

It is not known how much money in total Goldman made on its negative housing bets. Only a handful of e-mail messages were released Saturday, and they do not reflect the complete record.

The Senate subcommittee began its investigation in November 2008, but its work attracted little attention until a series of hearings in the last month. The first focused on lending practices at Washington Mutual, which collapsed in 2008, the largest bank failure in American history; another scrutinized deficiencies at several regulatory agencies, including the Office of Thrift Supervision and the Federal Deposit Insurance Corporation.

A third hearing, on Friday, centered on the role that the credit rating agencies – Moody’s, Standard & Poor’s and Fitch – played in the financial crisis. At the end of the hearing, Mr. Levin offered a preview of the Goldman hearing scheduled for Tuesday.

“Our investigation has found that investment banks such as Goldman Sachs were not market makers helping clients,” Mr. Levin said, referring to testimony given by Mr. Blankfein in January. “They were self-interested promoters of risky and complicated financial schemes that were a major part of the 2008 crisis. They bundled toxic and dubious mortgages into complex financial instruments, got the credit-rating agencies to label them as AAA safe securities, sold them to investors, magnifying and spreading risk throughout the financial system, and all too often betting against the financial instruments that they sold, and profiting at the expense of their clients.”

The transaction at the center of the S.E.C.’s case against Goldman also came up at the hearings on Friday, when Mr. Levin discussed it with Eric Kolchinsky, a former managing director at Moody’s. The mortgage-related security was known as Abacus 2007-AC1, and while it was created by Goldman, the S.E.C. contends that the firm misled investors by not disclosing that it had allowed a hedge fund manager, John A. Paulson, to select mortgage bonds for the portfolio that would be most likely to fail. That charge is at the core of the civil suit it filed against Goldman.

Moody’s was hired by Goldman to rate the Abacus security. Mr. Levin asked Mr. Kolchinsky, who for most of 2007 oversaw the ratings of collateralized debt obligations backed by subprime mortgages, if he had known of Mr. Paulson’s involvement in the Abacus deal.

“I did not know, and I suspect – I’m fairly sure that my staff did not know either,” Mr. Kolchinsky said.

Mr. Levin asked whether details of Mr. Paulson’s involvement were “facts that you or your staff would have wanted to know before rating Abacus.” Mr. Kolchinsky replied: “Yes, that’s something that I would have personally wanted to know.”

Mr. Kolchinsky added: “It just changes the whole dynamic of the structure, where the person who’s putting it together, choosing it, wants it to blow up.”

The Senate announced that it would convene a hearing on Goldman Sachs within a week of the S.E.C.’s fraud suit. Some members of Congress questioned whether the two investigations had been coordinated or linked.

Mr. Levin’s staff said there was no connection between the two investigations. They pointed out that the subcommittee requested the appearance of the Goldman executives and employees well before the S.E.C. filed its case.

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24
Apr
10

Weekly Address: Good News from the Auto Industry

NEWS
Weekly Address: Good News from the Auto Industry

President Obama Says Promising News From the Auto Industry Doesn’t Reduce Need for Wall Street Reform

Saturday, April 24, 2010

In his weekly address, President Obama said that while the government is ending many of emergency programs put in place to stabilize the financial sector and restart lending, Wall Street reform remains urgently needed. General Motors announced that it has repaid its loan to taxpayers with interest five years ahead of schedule, and Chrysler Financial has already fully repaid with interest its loan as well. While this is good news, it is also a reminder that the crisis in the auto industry was caused in part by problems in the financial sector. To help prevent another crisis, Congress needs to enact reforms to hold Wall Street accountable and protect consumers.

It was little more than one year ago that our country faced a potentially devastating crisis in our auto industry. Over the course of 2008, the industry shed 400,000 jobs. In the midst of a financial crisis and deep recession, both General Motors and Chrysler – two companies that for generations were a symbol of America’s manufacturing might – were on the brink of collapse. The rapid dissolution of these companies – followed by the certain failure of many auto parts makers, car dealers, and other smaller businesses – would have dealt a crippling blow to our already suffering economy. The best estimates are that more than one million American workers could have lost their jobs.

The previous administration extended temporary loans to both companies. Even so, when I took office, the situation remained dire. We had to determine whether or not we could justify additional taxpayer assistance. After all, many of the problems in the auto industry were a direct result of poor management decisions over decades. So it wasn’t an easy call. But we decided that while providing additional assistance was a risk, the far greater risk to families and communities across our country was to do nothing. We agreed to additional help, but only if the companies and their stakeholders were willing to break with the past. They had to fundamentally reorganize, with new management that would reexamine the decisions that led to this mess and chart a path toward viability. I knew this wasn’t a popular decision. But it was the right one.

So, GM and Chrysler went through painful restructurings: ones that required enormous sacrifices on the part of all involved. Many believed this was a fool’s errand. Many feared we would be throwing good money after bad: that taxpayers would lose most of their investment and that these companies would soon fail regardless. But one year later, the outlook is very different. In fact, the industry is recovering at a pace few thought possible.

Just this week we received some encouraging news. Since General Motors emerged from bankruptcy, the auto industry has actually added 45,000 jobs – the strongest growth in a decade. And Chrysler announced an operating profit in the first three months of this year. This is the first time Chrysler has reported a profit since the beginning of the economic crisis. What’s more, GM announced that it paid back its loans to taxpayers with interest, fully five years ahead of schedule. It won’t be too long before the stock the Treasury is holding in GM can be sold, helping to reimburse the American people for their investment.

In addition, Chrysler Financial has already fully repaid with interest the loans it received to support auto financing. And we are closing the books on the temporary program that helped parts suppliers weather this storm – returning this investment to the Treasury in full, with interest, as well. Finally, we are bringing to an end many of the emergency programs designed to stabilize the financial sector and restart lending so folks could finance cars and trucks – as well as homes and small businesses.

On Friday, in fact, the Treasury Department informed Congress that this financial rescue – which was absolutely necessary to prevent an even worse economic disaster – will end up costing taxpayers a fraction of what was originally feared. This is a direct result of the careful management of the investments made by the American people so that we could recoup as many tax dollars as possible – and as quickly as possible.

These steps, as well as others we’ve taken, have meant that millions of people are working today who might otherwise have lost their jobs. But these steps were never meant to be permanent. As I’ve said many times, I did not run for president to get into the auto business or the banking business. As essential as it was that we got in, I’m glad to see that we’re getting out.

At the same time, even as we have come a long way, we still have a ways to go. The auto industry is more stable today. And the economy is on a better footing. But people are still hurting. I hear from them just about every day in letters I read and in the towns and cities that I visit. No matter what the economic statistics say, I won’t be satisfied until folks who need work can find good jobs. After a recession that stole 8 million jobs, this is gonna take some time. And this will require that we continue to tackle the underlying problems that caused this turmoil in the first place. In short, it’s essential that we learn the lessons of this crisis – or we risk repeating it.

Now, part of what led to the crisis in our auto industry – and one of the main causes of the economic downturn – were problems in our financial sector. In the absence of common-sense rules, Wall Street firms took enormous, irresponsible risks that imperiled our financial system – and hurt just about every sector of our economy. Some people simply forgot that behind every dollar traded or leveraged, there is a family looking to buy a house, pay for an education, open a business, or save for retirement.

That’s why I went to New York City this week and addressed an audience that included leaders in the financial industry. And once again I called for reforms to hold Wall Street accountable and to protect consumers. These reforms would put an end – once and for all – to taxpayer bailouts. They would bring greater transparency to complex financial dealings. And they will empower ordinary consumers and shareholders in our financial system. Folks will get clearer and more concise information when they make financial decisions – instead of having to worry about deceptive fine print. And shareholders and pension holders will have a stronger voice in the boardrooms of companies in which they invest their savings.

That’s how we’ll restore trust and confidence in our markets. That’s how we’ll help to put an end to the cycle of boom and bust that we’ve seen. And that’s how – after two very difficult years – we will not only revive the economy, but help to rebuild it stronger than ever before.

Thanks.

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24
Apr
10

Apple Market Cap Bigger Than Microsoft? Not Quite Yet, It Isn’t

NEWS
Apple Market Cap Bigger Than Microsoft? Not Quite Yet, It Isn’t

Saturday, April 24, 2010

Boosted by upbeat investor reaction to its strong earnings report this week, Apple on yesterday became the second largest company on the S&P 500 Index in terms of market capitalization, surpassing software giant Microsoft.
Revenge, they say, is a dish that is best served cold. And if this is true, then Apple must be pleased as punch to see itself in the second spot in the S&P 500, second only to Exxon Mobil.

While coming second is in itself notable – with the notable exception of coming first – what must be especially pleasing to Apple is the company it has replaced – Microsoft.

To understand this, you must travel back in time to 1988. In that year, Apple filed a case against Microsoft, claiming that the Windows graphical user interface (GUI) infringed upon the Mac’s “look and feel.” Of course, since Apple had itself borrowed the Mac’s look and feel by looking at products from Xerox and feeling that the GUI is a good thing, the judges of the United States Court of Appeals for the Ninth Circuit ruled that Apple cannot get patent-like protection for the idea of a GUI.

What is more humiliating than being beaten by an opponent? Running back to the same opponent for help when you are down. And Apple was forced to do this in 1997, when Steve Jobs announced that Apple would join Microsoft to release new versions of Microsoft Office for the Macintosh, and that Microsoft made a $150 million investment in non-voting Apple stock. The money made a huge difference to Apple because in 1997 Apple was in deep trouble and was facing a huge finance crunch.

Enough history. Cut to the here and now. Apple is on top and has ousted Microsoft to become the No 2 company on the S&P index. It would be wrong to say that its iPod, iPhone and iPads are selling like hot cakes – it would perhaps be better to say that hot cakes are selling like iPads.

Purists may argue that the S&P 500 represents merely float-adjusted market cap. In fact, as Marco Tabini posted on macworld.com, “Microsoft’s full market cap still outstrips Apple’s by $275 billion to $241 billion.”

True, Microsoft’s market cap is still higher, but Apple has one psychological advantage that was once enjoyed by Microsoft in the PC era – the ability to drive the direction of the market. Now, Apple decides what happens.

Want proof? The iPad now accounts for 26 per cent of all of the mobile traffic on wired.com. The site is so impressed that they are making their Flash-heavy pages iPad compatible. “We are aware of the irony that the majority of wired.com’s videos, which use an Adobe Flash-based player, don’t play on the iPad. We’re working on that, starting with our homepage,” wrote Dylan F. Tweney in an article that appeared on the site.

Many many moons ago, when Steve Jobs hired John Sculley from Pepsi, he is reputed to have asked him, “Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?” Scully didn’t change the world. In fact, during his regime, Microsoft threatened to discontinue Office for the Mac if Apple did not licence parts of the Mac GUI for use with Windows. And those days, Microsoft got what it wanted. But it looks like iPad has just turned the tables.

• What is S&P 500?
The S&P 500 is a free-float capitalization-weighted index published since 1957 of the prices of 500 large-cap common stocks actively traded in the United States. After the Dow Jones Industrial Average, the S&P 500 is the most widely followed index of large-cap American stocks. It is considered a bellwether for the American economy.

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