Fitness equipment maker Nautilus Inc. conceded defeat Monday in its proxy battle with New York-based Sherborne Investors LP.
The Vancouver, Wash., company (NYSE: NLS) said in a joint statement with Sherborne that the investment firm had succeeded in replacing four of seven board members at a special shareholder meeting Dec. 18.
Nautilus had urged shareholders to reject the Sherborne bid for control of the company.
Sherborne partner Edward Bramson was elected chairman of Nautilus, replacing Robert Falcone. Falcone will stay on as president and CEO, according to the statement.
credited by: bizjournals.com
2007-12-07
Business Hall of Fame announces five honorees
Five business leaders were named Thursday to be inducted into the Colorado Business Hall of Fame in February.
The Hall of Fame is a joint project of the Denver Metro Chamber of Commerce and Junior Achievement-Rocky Mountain Inc.
The inductees are:
Samuel Addoms, who retired in 2002 as CEO of Frontier Airlines and who previously worked with more than 15 early-stage companies.
Louis "Lou" Clinton Jr., a pilot who became the first dealer for Cessna aircraft. He also was key in establishing what's now Centennial Airport.
Harry Frampton III, a real estate developer, served as president of Vail Associates in the early 1980s. He is now developing properties in Vail and Beaver Creek and in California and Utah.
J.K. Mullen, who died in 1929, operated the largest flour mill in the state. During an economic panic in 1893, Mullen pushed the state toward agriculture as its economic base instead of mining.
William Vollbracht, who moved to Colorado in 1960, started Land Title Company of Colorado seven years later. Today the business is one of the largest privately owned title companies in the United States.
The induction ceremony will be from 6-9 p.m. Feb. 7 at the Denver Marriott City Center in downtown Denver.
credited by: bizjournals.com
The Hall of Fame is a joint project of the Denver Metro Chamber of Commerce and Junior Achievement-Rocky Mountain Inc.
The inductees are:
Samuel Addoms, who retired in 2002 as CEO of Frontier Airlines and who previously worked with more than 15 early-stage companies.
Louis "Lou" Clinton Jr., a pilot who became the first dealer for Cessna aircraft. He also was key in establishing what's now Centennial Airport.
Harry Frampton III, a real estate developer, served as president of Vail Associates in the early 1980s. He is now developing properties in Vail and Beaver Creek and in California and Utah.
J.K. Mullen, who died in 1929, operated the largest flour mill in the state. During an economic panic in 1893, Mullen pushed the state toward agriculture as its economic base instead of mining.
William Vollbracht, who moved to Colorado in 1960, started Land Title Company of Colorado seven years later. Today the business is one of the largest privately owned title companies in the United States.
The induction ceremony will be from 6-9 p.m. Feb. 7 at the Denver Marriott City Center in downtown Denver.
credited by: bizjournals.com
First Financial moving HQ to Norwood
First Financial Bancorp will move its base from Hamilton to the Cornerstone at Norwood building near Rookwood Commons.
The bank already has several people at the location, which it opened in early 2006 as the base for its Cincinnati operations. The Hamilton bank hadn't made a significant push into Cincinnati and Hamilton County until then.
"This will allow us to get our core group together at one headquarters," CEO Claude Davis said. "People are spread out now."
First Financial (NASDAQ: FFBC) has most of its top executives at its Hamilton base, but others are in a Union Centre office in West Chester and at the Rookwood site.
The Rookwood location, located in Norwood near its border with Cincinnati, has fewer than 50 people now, but it will house 75 First Financial employees once the headquarters move is completed. That's expected by the end of the first quarter of 2008.
The move won't necessarily be permanent. The 25,000 square feet First Financial is leasing at Cornerstone can house up to 80 to 85 people. So as First Financial grows, it will need additional space. It will keep evaluating whether to eventually expand further at Cornerstone or relocate again, Davis said. That decision will likely be reached in the next two to three years.
The move also fits with First Financial's focus in recent years on growing in metropolitan areas. It's now aiming to grow in metro areas such as Cincinnati, Dayton, Northern Kentucky and the Indiana suburbs near Chicago.
Still, Davis said, First Financial isn't bailing out on Hamilton. Its bank subsidiary, First Financial Bank, will stay based in Hamilton. And the bank is renovating its Hamilton facility.
"Butler County is still our largest market," Davis said.
credited by: bizjournals.com
The bank already has several people at the location, which it opened in early 2006 as the base for its Cincinnati operations. The Hamilton bank hadn't made a significant push into Cincinnati and Hamilton County until then.
"This will allow us to get our core group together at one headquarters," CEO Claude Davis said. "People are spread out now."
First Financial (NASDAQ: FFBC) has most of its top executives at its Hamilton base, but others are in a Union Centre office in West Chester and at the Rookwood site.
The Rookwood location, located in Norwood near its border with Cincinnati, has fewer than 50 people now, but it will house 75 First Financial employees once the headquarters move is completed. That's expected by the end of the first quarter of 2008.
The move won't necessarily be permanent. The 25,000 square feet First Financial is leasing at Cornerstone can house up to 80 to 85 people. So as First Financial grows, it will need additional space. It will keep evaluating whether to eventually expand further at Cornerstone or relocate again, Davis said. That decision will likely be reached in the next two to three years.
The move also fits with First Financial's focus in recent years on growing in metropolitan areas. It's now aiming to grow in metro areas such as Cincinnati, Dayton, Northern Kentucky and the Indiana suburbs near Chicago.
Still, Davis said, First Financial isn't bailing out on Hamilton. Its bank subsidiary, First Financial Bank, will stay based in Hamilton. And the bank is renovating its Hamilton facility.
"Butler County is still our largest market," Davis said.
credited by: bizjournals.com
2007-12-04
T.J. Rodgers' Startup Strategy
T.J. Rodgers knows people often don't like what he has to say. The outspoken chief executive of Cypress Semiconductor (CY) has made enemies calling Social Security "a terrible scam" and describing government business subsidies as "corporate welfare." And he didn't win many friends by publicly arguing with a Catholic nun against diversifying Cypress' board with female and minority directors.
When he wants something, Rodgers doesn't stop talking until he gets it. In 2001 he wanted Cypress to invest in solar energy, though few people, least of all his board of directors, understood why.
At the time, the semiconductor industry was reeling from the collapse of the dot-com bubble. Rodgers, the man dubbed "The Bad Boy of Silicon Valley" in a 1991 BusinessWeek cover story, was presiding over red ink and layoffs. Yet he was demanding the board spend cash to buy a grad-school buddy's struggling solar energy company. "We were getting our ass kicked," recalls Rodgers. "And, oh, by the way, I want to invest in solar energy."
Fighting for Solar Power
Even if Cypress hadn't been losing money, the board's reticence would have been understandable. After all, Cypress was a semiconductor company. What did its employees know about alternative energy? More important, what did Rodgers know about it? In some respects, the solar energy business is exactly the sort he loathes: It is heavily subsidized by government funds, both in the U.S. and abroad, and it is a darling of the Green Party.
As a libertarian from Wisconsin, Rodgers' green leanings were in a very different direction: the Green Bay Packers and alma mater Dartmouth, "The Big Green." And he felt certain that solar technology developed by friend Richard Swanson's SunPower could make Cypress more green. But when Rodgers says "green," he's not referring to the environment; he's thinking of the currency made from smashing trees into pulp.
"If somebody says, 'I'll give you $100 dollars for the change in your left pocket,' you don't need to do a calculation," says Rodgers, who gave $750,000 of his own money to keep SunPower afloat while he was trying to convince the Cypress board to buy it. After 15 months of arguing, Rodgers had convinced the board of directors to invest $9 million in the struggling company, which makes solar panels that produce more power than rival products.
A few months later, Cypress bought majority control of SunPower and invested in additional plants and equipment for the business, bringing its total investment to $168 million. In November, 2005, SunPower (SPWR) held an initial public offering of stock at $18 per share. These days it trades at nearly $125, for a market value of $10.4 billion. Cypress owns more than 53% of the shares, a stake worth $5.54 billion -- more than Cypress' own market capitalization of $5.3 billion, suggesting some investors consider SunPower's shares overvalued.
Demand for Alternative Energy Is on the Rise
SunPower is a major reason Rodgers' 25-year-old company, largely a niche player in the mature semiconductor industry, ranks fourth in BusinessWeek.com's ranking of the top 75 high-growth tech companies [BusinessWeek.com, 12/3/07]. SunPower accounted for about half of the $450 million in total revenue Cypress pulled in during the third quarter of 2007.
SunPower's success is driven by soaring demand for alternative energy, with tensions in the Middle East boosting oil prices and raising doubts about reliable crude supplies. The U.S. market for solar power, which totaled about $500 million in 2005, is expected to reach $1.3 billion by 2010, according to Jennifer Mapes, an industry analyst at Freedonia, an Ohio-based research firm. The solar energy market is so hot even Google (GOOG) may want in. On Nov. 28 the king of Web search and advertising announced the creation of a research group dedicated to developing cheaper alternative energy sources such as solar and wind power. Google says it may spend hundreds of millions of dollars on the project.
Also on Nov. 28, SunPower announced a deal that may help the U.S. market expand even faster: SunPower secured $190 million in financing from Morgan Stanley (MS) to install solar panels on corporate and public buildings and then sell the resulting electricity to the building owners. The initiative's aim is to accelerate adoption of solar power by enabling building owners to purchase solar energy without an up-front investment in equipment.
Subsidies' Benefits Disputed
Such investments are a far cry from the forces that have driven the solar industry since its inception. The main source of funding has been government subsidies to partially or entirely offset the cost of solar panels in hopes of reducing pollution and easing the strain on local power grids. "The availability of [private] funds makes a big difference," says Mapes. But, she adds, "a lot of it [still] comes from government incentives."
How does that funding model square with Rodgers' vehement dislike of government subsidies? Although subsidies would appear to benefit Cypress, he argues they've hurt the solar industry. Without subsidies, he says, solar companies would have been forced to develop cheaper equipment sooner. But so long as the government is doling out subsidies, Rodgers won't hurt his company or shareholders by refusing them. "Certainly the subsidies have made it viable earlier," says Rodgers. "At the same time, I wish neither my company nor any other had them."
His determination to reduce expenses for the design, production, and installation of solar panels is evident on SunPower's Web site, where the company confidently promises to compete with retail electric rates by 2012, a move that would require it to reduce equipment costs by 50%.
New Markets Get the VC Treatment
But Cypress' successes include more than a winning solar bet. Rodgers' risk-taking spirit has produced other lucrative opportunities. "Love him or hate him, he is a very dynamic individual," says Chris Crotty, a former Cypress employee who is now a market analyst at research firm iSuppli.
Rodgers lauds Silicon Valley's venture capital model as the best entrepreneurial system in the world, and Cypress' approach to new markets is based on that model: Rather than create a new internal division, Cypress funds an existing startup or a brand-new company with outside staff. Each such venture has its own board of directors, which always includes Rodgers. Once a company is generating $10 million in quarterly sales, with profit margins of 25%, Cypress decides whether to keep it as a subsidiary or "turn it loose" by selling it or taking it public, says Rodgers.
Since founding Cypress, Rodgers has funded SunPower and six other startups with varying success. He prefers to run just one at a time. "They are crying babies," explains Rodgers, adding that startups often don't have the organizational systems in place to manage seemingly simple matters such as hiring and compensation changes. "You've got to get up every night at 3 in the morning." Of its six other startups, Cypress has sold one, microprocessor maker Ross Technology, to Toshiba for $23 million in 1993.
Reliable Chips and Ventures
The startup strategy has yielded another big win: Cypress' PSoC [for Programmable System-on-Chip], which Apple (AAPL) used in designing the iPod click wheel. The PSoC translates analog data, such as finger touches on the wheel, into commands a device can respond to, as in "turn up the volume."
Cypress recently shipped its 250 millionth PSoC. The PSoC unit has grown from a $16 million business in 2003 to $96 million in 2006. New PSoC designs have started to win Cypress contracts with other devicemakers, including Hewlett-Packard (HP), Lenovo, Nintendo (NTDOY), and Pentax.
Rodgers' latest venture is Cypress Systems, which he recruited Honeywell International (HON) executive Harry Sim to head in 2006. The company, which builds custom computer systems that rely on Cypress chips, is generating sales already. Without Cypress' infrastructure, Sim estimates it would have taken twice as long to bring in revenue. "It's the best of many, if not all, worlds," says Sim. "When you are a little startup, you struggle just to get your payroll and office set up. You have no brand. When you try to get loans, creditors won't sell to you. Now that we are part of Cypress, we are up and running right away."
With the PSoC and SunPower successes under his belt, Rodgers finds himself facing a different problem than he had in 2001, when he was trying to persuade the Cypress board to invest in SunPower. Today, Cypress' board of directors wants Rodgers to find, and fund, more startups. "I get the question, 'What's next?'" says Rodgers. The board wants to know "what the next miracle is."
credited by: BusinessWeek
When he wants something, Rodgers doesn't stop talking until he gets it. In 2001 he wanted Cypress to invest in solar energy, though few people, least of all his board of directors, understood why.
At the time, the semiconductor industry was reeling from the collapse of the dot-com bubble. Rodgers, the man dubbed "The Bad Boy of Silicon Valley" in a 1991 BusinessWeek cover story, was presiding over red ink and layoffs. Yet he was demanding the board spend cash to buy a grad-school buddy's struggling solar energy company. "We were getting our ass kicked," recalls Rodgers. "And, oh, by the way, I want to invest in solar energy."
Fighting for Solar Power
Even if Cypress hadn't been losing money, the board's reticence would have been understandable. After all, Cypress was a semiconductor company. What did its employees know about alternative energy? More important, what did Rodgers know about it? In some respects, the solar energy business is exactly the sort he loathes: It is heavily subsidized by government funds, both in the U.S. and abroad, and it is a darling of the Green Party.
As a libertarian from Wisconsin, Rodgers' green leanings were in a very different direction: the Green Bay Packers and alma mater Dartmouth, "The Big Green." And he felt certain that solar technology developed by friend Richard Swanson's SunPower could make Cypress more green. But when Rodgers says "green," he's not referring to the environment; he's thinking of the currency made from smashing trees into pulp.
"If somebody says, 'I'll give you $100 dollars for the change in your left pocket,' you don't need to do a calculation," says Rodgers, who gave $750,000 of his own money to keep SunPower afloat while he was trying to convince the Cypress board to buy it. After 15 months of arguing, Rodgers had convinced the board of directors to invest $9 million in the struggling company, which makes solar panels that produce more power than rival products.
A few months later, Cypress bought majority control of SunPower and invested in additional plants and equipment for the business, bringing its total investment to $168 million. In November, 2005, SunPower (SPWR) held an initial public offering of stock at $18 per share. These days it trades at nearly $125, for a market value of $10.4 billion. Cypress owns more than 53% of the shares, a stake worth $5.54 billion -- more than Cypress' own market capitalization of $5.3 billion, suggesting some investors consider SunPower's shares overvalued.
Demand for Alternative Energy Is on the Rise
SunPower is a major reason Rodgers' 25-year-old company, largely a niche player in the mature semiconductor industry, ranks fourth in BusinessWeek.com's ranking of the top 75 high-growth tech companies [BusinessWeek.com, 12/3/07]. SunPower accounted for about half of the $450 million in total revenue Cypress pulled in during the third quarter of 2007.
SunPower's success is driven by soaring demand for alternative energy, with tensions in the Middle East boosting oil prices and raising doubts about reliable crude supplies. The U.S. market for solar power, which totaled about $500 million in 2005, is expected to reach $1.3 billion by 2010, according to Jennifer Mapes, an industry analyst at Freedonia, an Ohio-based research firm. The solar energy market is so hot even Google (GOOG) may want in. On Nov. 28 the king of Web search and advertising announced the creation of a research group dedicated to developing cheaper alternative energy sources such as solar and wind power. Google says it may spend hundreds of millions of dollars on the project.
Also on Nov. 28, SunPower announced a deal that may help the U.S. market expand even faster: SunPower secured $190 million in financing from Morgan Stanley (MS) to install solar panels on corporate and public buildings and then sell the resulting electricity to the building owners. The initiative's aim is to accelerate adoption of solar power by enabling building owners to purchase solar energy without an up-front investment in equipment.
Subsidies' Benefits Disputed
Such investments are a far cry from the forces that have driven the solar industry since its inception. The main source of funding has been government subsidies to partially or entirely offset the cost of solar panels in hopes of reducing pollution and easing the strain on local power grids. "The availability of [private] funds makes a big difference," says Mapes. But, she adds, "a lot of it [still] comes from government incentives."
How does that funding model square with Rodgers' vehement dislike of government subsidies? Although subsidies would appear to benefit Cypress, he argues they've hurt the solar industry. Without subsidies, he says, solar companies would have been forced to develop cheaper equipment sooner. But so long as the government is doling out subsidies, Rodgers won't hurt his company or shareholders by refusing them. "Certainly the subsidies have made it viable earlier," says Rodgers. "At the same time, I wish neither my company nor any other had them."
His determination to reduce expenses for the design, production, and installation of solar panels is evident on SunPower's Web site, where the company confidently promises to compete with retail electric rates by 2012, a move that would require it to reduce equipment costs by 50%.
New Markets Get the VC Treatment
But Cypress' successes include more than a winning solar bet. Rodgers' risk-taking spirit has produced other lucrative opportunities. "Love him or hate him, he is a very dynamic individual," says Chris Crotty, a former Cypress employee who is now a market analyst at research firm iSuppli.
Rodgers lauds Silicon Valley's venture capital model as the best entrepreneurial system in the world, and Cypress' approach to new markets is based on that model: Rather than create a new internal division, Cypress funds an existing startup or a brand-new company with outside staff. Each such venture has its own board of directors, which always includes Rodgers. Once a company is generating $10 million in quarterly sales, with profit margins of 25%, Cypress decides whether to keep it as a subsidiary or "turn it loose" by selling it or taking it public, says Rodgers.
Since founding Cypress, Rodgers has funded SunPower and six other startups with varying success. He prefers to run just one at a time. "They are crying babies," explains Rodgers, adding that startups often don't have the organizational systems in place to manage seemingly simple matters such as hiring and compensation changes. "You've got to get up every night at 3 in the morning." Of its six other startups, Cypress has sold one, microprocessor maker Ross Technology, to Toshiba for $23 million in 1993.
Reliable Chips and Ventures
The startup strategy has yielded another big win: Cypress' PSoC [for Programmable System-on-Chip], which Apple (AAPL) used in designing the iPod click wheel. The PSoC translates analog data, such as finger touches on the wheel, into commands a device can respond to, as in "turn up the volume."
Cypress recently shipped its 250 millionth PSoC. The PSoC unit has grown from a $16 million business in 2003 to $96 million in 2006. New PSoC designs have started to win Cypress contracts with other devicemakers, including Hewlett-Packard (HP), Lenovo, Nintendo (NTDOY), and Pentax.
Rodgers' latest venture is Cypress Systems, which he recruited Honeywell International (HON) executive Harry Sim to head in 2006. The company, which builds custom computer systems that rely on Cypress chips, is generating sales already. Without Cypress' infrastructure, Sim estimates it would have taken twice as long to bring in revenue. "It's the best of many, if not all, worlds," says Sim. "When you are a little startup, you struggle just to get your payroll and office set up. You have no brand. When you try to get loans, creditors won't sell to you. Now that we are part of Cypress, we are up and running right away."
With the PSoC and SunPower successes under his belt, Rodgers finds himself facing a different problem than he had in 2001, when he was trying to persuade the Cypress board to invest in SunPower. Today, Cypress' board of directors wants Rodgers to find, and fund, more startups. "I get the question, 'What's next?'" says Rodgers. The board wants to know "what the next miracle is."
credited by: BusinessWeek
2007-12-03
PSC report lays out electric industry re-regulation options
A report released by the Maryland Public Service Commission late Monday calls for re-regulation of the state's electric industry, a move that could cost the state and ratepayers more in the future.
The study of the impacts of possible re-regulation, put together by Kay Scholer LLP, Levitan & Associates Inc., and Semcas Consulting Associates, was requested by state legislators during the 2007 regular session earlier this year.
Maryland deregulated its electric industry in 1999 in the hopes it would generate competition within the market and lower energy costs. But instead ratepayers have continued to see rising costs; rates by Baltimore Gas and Electric customers jumped 50 percent this summer.
The study presented five potential re-regulation options:
1. A full return to a regulated industry.
The state would have direct control over power production. The state could also construct new power generation sources to meet Maryland's needs. Constructing new generation plants could cost the state $18 to $24 billion. While this would help protect ratepayers from future market swings, it would also increase the immediate costs and risks to the state and the consumer, the report says.
2. The state could require utility companies to enter long-term contracts with new generation developers and use incentives to lower costs.
This move could help diversify Maryland's power sources, add low cost resources and stabilize and moderate retail prices for an extended period. The option could also help improve competition and lower wholesale market prices, according to the report.
3. The state could create an independent power authority to manage the state's energy programs.
4. The state could beef up the resource planning role it previously played under regulation.
This move would allow the state to direct new construction of power sources and form a unified plan.
5. The state could get more involved with the federal electricity market by constructing new power plants that could impact market prices.
In the report consultants said no one method would ease the state's rising energy costs. While ratepayers may not see immediate relief, they could see long-term benefits.
The study also looked at similar deregulation and re-regulation actions in Connecticut, Delaware, New Jersey and Illinois.
In a second report released by the Maryland Public Service Commission Monday, consultants also recommended the construction of a new nuclear reactor at BGE's Calvert Cliffs plant in Southern Maryland.
credited by: bizjournals.com
The study of the impacts of possible re-regulation, put together by Kay Scholer LLP, Levitan & Associates Inc., and Semcas Consulting Associates, was requested by state legislators during the 2007 regular session earlier this year.
Maryland deregulated its electric industry in 1999 in the hopes it would generate competition within the market and lower energy costs. But instead ratepayers have continued to see rising costs; rates by Baltimore Gas and Electric customers jumped 50 percent this summer.
The study presented five potential re-regulation options:
1. A full return to a regulated industry.
The state would have direct control over power production. The state could also construct new power generation sources to meet Maryland's needs. Constructing new generation plants could cost the state $18 to $24 billion. While this would help protect ratepayers from future market swings, it would also increase the immediate costs and risks to the state and the consumer, the report says.
2. The state could require utility companies to enter long-term contracts with new generation developers and use incentives to lower costs.
This move could help diversify Maryland's power sources, add low cost resources and stabilize and moderate retail prices for an extended period. The option could also help improve competition and lower wholesale market prices, according to the report.
3. The state could create an independent power authority to manage the state's energy programs.
4. The state could beef up the resource planning role it previously played under regulation.
This move would allow the state to direct new construction of power sources and form a unified plan.
5. The state could get more involved with the federal electricity market by constructing new power plants that could impact market prices.
In the report consultants said no one method would ease the state's rising energy costs. While ratepayers may not see immediate relief, they could see long-term benefits.
The study also looked at similar deregulation and re-regulation actions in Connecticut, Delaware, New Jersey and Illinois.
In a second report released by the Maryland Public Service Commission Monday, consultants also recommended the construction of a new nuclear reactor at BGE's Calvert Cliffs plant in Southern Maryland.
credited by: bizjournals.com
2007-12-02
UFCW, Safeway talk nonstop as contract deadline nears
With the current contract scheduled to expire at midnight Dec. 1, negotiations are continuing around the clock between Safeway Inc., the Pleasanton-based supermarket giant, and the United Food & Commercial Workers union.
Negotiators said some progress has been made in the contract talks, but there still remains a wide disparity on "economics" issues.
Safeway (NYSE: SWY) employs about 25,000 workers represented by four UFCW locals throughout Northern California.
If no agreement is reached, UFCW members may begin voting as early as this weekend to authorize a strike against Safeway. If workers vote to do so, a walkout against Safeway could begin shortly after the vote is tallied.
Negotiators could also decide to extend the current three-year contract so talks can continue.
The strike threat would involve only Safeway, since UFCW negotiators have already reached agreement on a new four-year contract with Raley's Inc., the West Sacramento-based company that operates Raley's and Nob Hill Foods supermarkets in the Bay Area; and Save Mart Supermarkets of Modesto, which operates Lucky and Save Mart stores throughout the region.
"Both parties are bargaining in earnest and are working hard to achieve an agreement before the contract expires," Ron Lind, president of UFCW Local 5, said in a statement also issued by his fellow UFCW local presidents throughout the region.
UFCW Local 5 represents unionized supermarket employees in Alameda, Contra Costa, Solano and Santa Clara counties, along with several neighboring counties in the Bay Area and Monterey Bay region.
credited by: bizjournals.com
Negotiators said some progress has been made in the contract talks, but there still remains a wide disparity on "economics" issues.
Safeway (NYSE: SWY) employs about 25,000 workers represented by four UFCW locals throughout Northern California.
If no agreement is reached, UFCW members may begin voting as early as this weekend to authorize a strike against Safeway. If workers vote to do so, a walkout against Safeway could begin shortly after the vote is tallied.
Negotiators could also decide to extend the current three-year contract so talks can continue.
The strike threat would involve only Safeway, since UFCW negotiators have already reached agreement on a new four-year contract with Raley's Inc., the West Sacramento-based company that operates Raley's and Nob Hill Foods supermarkets in the Bay Area; and Save Mart Supermarkets of Modesto, which operates Lucky and Save Mart stores throughout the region.
"Both parties are bargaining in earnest and are working hard to achieve an agreement before the contract expires," Ron Lind, president of UFCW Local 5, said in a statement also issued by his fellow UFCW local presidents throughout the region.
UFCW Local 5 represents unionized supermarket employees in Alameda, Contra Costa, Solano and Santa Clara counties, along with several neighboring counties in the Bay Area and Monterey Bay region.
credited by: bizjournals.com
CNA issues new 10-day strike notice to Sutter hospitals
The California Nurses Association has delivered a 10-day strike notice to Sutter Health hospitals in Northern California for a strike that could take place Dec. 13 and 14, reprising an earlier two-day walkout in October.
Strike notices were sent Friday to some of the biggest hospitals in the region, including California Pacific Medical Center in San Francisco, Alta Bates Summit Medical Center in Berkeley and Oakland, and Burlingame's Peninsula Medical Center, the CNA/National Nurses Organizing Committee said Nov. 30.
Since an earlier two-day strike in October, contract talks have been held at most of the hospitals, but while some progress has been made "a wide gap remains on the central areas in dispute," the union said. Talks are scheduled at CPMC on Monday, but no additional negotiations are on tap at other Sutter hospitals in the region, and two hospitals -- Sutter Delta in Antioch and Sutter Solano in Vallejo -- "have refused to hold any additional negotiations," according to CNA.
Earlier in the week, the Oakland-based union announced that RNs at 11 Sutter Health hospitals in the Bay Area would vote this week on whether to authorize a two-day strike against Sutter "over serious issues of patient safety, safe staffing, nurse health security, medical benefits, pension improvements, and the continued operation of much-needed community hospitals."
Kevin McCormack, a CPMC spokesman, said the hospital has been expecting a second strike. "We're not surprised," he told the San Francisco Business Times. "We've been planning for this strike since the last one."
McCormack said the CNA has shown little interest in holding negotiations over the last six months or so, and hasn't made any proposals involving patient safety or keeping endangered hospitals open, preferring to posture in the news media. "They've shown no inclination to sit down and talk to us and no inclination to reach a negotiated settlement," he said. "They haven't made one economic proposal in over six months. This shows they're not interested in debate."
Approximately 5,000 Sutter nurses at 13 hospitals walked off their jobs in October, in a strike that CNA described as the largest job action by nurses nationwide in a decade.
Nurses are protesting what they call "medical redlining" by Sutter, which has plans to shut down St. Luke's Hospital in San Francisco and its Sutter Santa Rosa facilities as acute-care centers, and possibly to close San Leandro Hospital as well. Compliance with nurse-staffing ratios, "meal-and-break relief" and health benefit and pension issues are also on the table, according to the union.
CNA, like Sutter Health bete noire SEIU United Healthcare Workers West, insists that other health-care systems and hospitals in Northern California, notably Kaiser Permanente, offers better retirement medical benefits than Sutter's hospitals do.
Sutter hospitals affected by the strike vote are St. Luke's and CPMC in San Francisco, San Leandro Hospital, Alta Bates-Summit, Peninsula, Castro Valley's Eden Medical Center, San Leandro Hospital, Sutter Delta, Sutter Solano, Sutter Medical Center of Santa Rosa, Greenbrae's Marin General Hospital and Novato Community Hospital.
"Their behavior continues to be abhorrent," CNA spokesman Chuck Idelson said.
credted by: bizjournals.com
Strike notices were sent Friday to some of the biggest hospitals in the region, including California Pacific Medical Center in San Francisco, Alta Bates Summit Medical Center in Berkeley and Oakland, and Burlingame's Peninsula Medical Center, the CNA/National Nurses Organizing Committee said Nov. 30.
Since an earlier two-day strike in October, contract talks have been held at most of the hospitals, but while some progress has been made "a wide gap remains on the central areas in dispute," the union said. Talks are scheduled at CPMC on Monday, but no additional negotiations are on tap at other Sutter hospitals in the region, and two hospitals -- Sutter Delta in Antioch and Sutter Solano in Vallejo -- "have refused to hold any additional negotiations," according to CNA.
Earlier in the week, the Oakland-based union announced that RNs at 11 Sutter Health hospitals in the Bay Area would vote this week on whether to authorize a two-day strike against Sutter "over serious issues of patient safety, safe staffing, nurse health security, medical benefits, pension improvements, and the continued operation of much-needed community hospitals."
Kevin McCormack, a CPMC spokesman, said the hospital has been expecting a second strike. "We're not surprised," he told the San Francisco Business Times. "We've been planning for this strike since the last one."
McCormack said the CNA has shown little interest in holding negotiations over the last six months or so, and hasn't made any proposals involving patient safety or keeping endangered hospitals open, preferring to posture in the news media. "They've shown no inclination to sit down and talk to us and no inclination to reach a negotiated settlement," he said. "They haven't made one economic proposal in over six months. This shows they're not interested in debate."
Approximately 5,000 Sutter nurses at 13 hospitals walked off their jobs in October, in a strike that CNA described as the largest job action by nurses nationwide in a decade.
Nurses are protesting what they call "medical redlining" by Sutter, which has plans to shut down St. Luke's Hospital in San Francisco and its Sutter Santa Rosa facilities as acute-care centers, and possibly to close San Leandro Hospital as well. Compliance with nurse-staffing ratios, "meal-and-break relief" and health benefit and pension issues are also on the table, according to the union.
CNA, like Sutter Health bete noire SEIU United Healthcare Workers West, insists that other health-care systems and hospitals in Northern California, notably Kaiser Permanente, offers better retirement medical benefits than Sutter's hospitals do.
Sutter hospitals affected by the strike vote are St. Luke's and CPMC in San Francisco, San Leandro Hospital, Alta Bates-Summit, Peninsula, Castro Valley's Eden Medical Center, San Leandro Hospital, Sutter Delta, Sutter Solano, Sutter Medical Center of Santa Rosa, Greenbrae's Marin General Hospital and Novato Community Hospital.
"Their behavior continues to be abhorrent," CNA spokesman Chuck Idelson said.
credted by: bizjournals.com
Kaiser Permanente hands out $1.3 million in HIV-AIDS grants
Kaiser Permanente is providing more than $1.3 million in grants to promote HIV-AIDS awareness, prevention, screening, support and treatment statewide -- including $100,000 to four nonprofit agencies in the East Bay -- local officials said Friday.
The announcement was timed to coincide with an international focus on the issue Dec. 1, World AIDS Day. Local grants of $25,000 each will go to:
Allen Temple Baptist Church's AIDS Ministry program in Oakland, which provides prevention education to teens and others.
California Prevention and Education Project, an Oakland-based program, providing HIV testing and screening to the city's high-risk African-American population.
The East Bay Community Law Center in Berkeley for its HIV-AIDS Immigration Law Project, counseling people with HIV-AIDS who encounter legal problems.
Planned Parenthood Shasta-Diablo for a program that provides food and acupuncture to people with HIV-AIDS in Richmond.
"While HIV-AIDS is present throughout all the communities Kaiser Permanente serves, the disease looks different from one community to the next and affects people in very different ways," Michael Allerton, HIV operations and policy leader for Kaiser's Northern California region, said in a prepared statement. "These grants ensure we help target underserved populations with an emphasis on culturally competent care."
credited by: bizjournals.com
The announcement was timed to coincide with an international focus on the issue Dec. 1, World AIDS Day. Local grants of $25,000 each will go to:
Allen Temple Baptist Church's AIDS Ministry program in Oakland, which provides prevention education to teens and others.
California Prevention and Education Project, an Oakland-based program, providing HIV testing and screening to the city's high-risk African-American population.
The East Bay Community Law Center in Berkeley for its HIV-AIDS Immigration Law Project, counseling people with HIV-AIDS who encounter legal problems.
Planned Parenthood Shasta-Diablo for a program that provides food and acupuncture to people with HIV-AIDS in Richmond.
"While HIV-AIDS is present throughout all the communities Kaiser Permanente serves, the disease looks different from one community to the next and affects people in very different ways," Michael Allerton, HIV operations and policy leader for Kaiser's Northern California region, said in a prepared statement. "These grants ensure we help target underserved populations with an emphasis on culturally competent care."
credited by: bizjournals.com
UFCW, Safeway talk nonstop as contract deadline nears
With the current contract scheduled to expire at midnight Dec. 1, negotiations are continuing around the clock between Safeway Inc., the Pleasanton-based supermarket giant, and the United Food & Commercial Workers union.
Negotiators said some progress has been made in the contract talks, but there still remains a wide disparity on "economics" issues.
Safeway (NYSE: SWY) employs about 25,000 workers represented by four UFCW locals throughout Northern California.
If no agreement is reached, UFCW members may begin voting as early as this weekend to authorize a strike against Safeway. If workers vote to do so, a walkout against Safeway could begin shortly after the vote is tallied.
Negotiators could also decide to extend the current three-year contract so talks can continue.
The strike threat would involve only Safeway, since UFCW negotiators have already reached agreement on a new four-year contract with Raley's Inc., the West Sacramento-based company that operates Raley's and Nob Hill Foods supermarkets in the Bay Area; and Save Mart Supermarkets of Modesto, which operates Lucky and Save Mart stores throughout the region.
"Both parties are bargaining in earnest and are working hard to achieve an agreement before the contract expires," Ron Lind, president of UFCW Local 5, said in a statement also issued by his fellow UFCW local presidents throughout the region.
UFCW Local 5 represents unionized supermarket employees in Alameda, Contra Costa, Solano and Santa Clara counties, along with several neighboring counties in the Bay Area and Monterey Bay region.
credited by: bizjournals.com
Negotiators said some progress has been made in the contract talks, but there still remains a wide disparity on "economics" issues.
Safeway (NYSE: SWY) employs about 25,000 workers represented by four UFCW locals throughout Northern California.
If no agreement is reached, UFCW members may begin voting as early as this weekend to authorize a strike against Safeway. If workers vote to do so, a walkout against Safeway could begin shortly after the vote is tallied.
Negotiators could also decide to extend the current three-year contract so talks can continue.
The strike threat would involve only Safeway, since UFCW negotiators have already reached agreement on a new four-year contract with Raley's Inc., the West Sacramento-based company that operates Raley's and Nob Hill Foods supermarkets in the Bay Area; and Save Mart Supermarkets of Modesto, which operates Lucky and Save Mart stores throughout the region.
"Both parties are bargaining in earnest and are working hard to achieve an agreement before the contract expires," Ron Lind, president of UFCW Local 5, said in a statement also issued by his fellow UFCW local presidents throughout the region.
UFCW Local 5 represents unionized supermarket employees in Alameda, Contra Costa, Solano and Santa Clara counties, along with several neighboring counties in the Bay Area and Monterey Bay region.
credited by: bizjournals.com
2007-11-30
Judge clears sale of Your Black Muslim Bakery property
A federal bankruptcy judge approved the $1.052 million sale of the Your Black Muslim Bakery property in Oakland to a corporation backing AIDS support center Vital Life Services.
Once the sale closes, the center will have its first permanent home at 5832 San Pablo Ave., Oakland. Founded in 1987, Vital Life Services has been operating in a rented 4,500-square-foot former Safeway building at 5720 Shattuck Ave.
The center provides services ranging from meals to counseling for about 400 East Bay residents living with AIDS, mostly in the Interstate 880 corridor, Executive Director Peggy Bush said. "It's just like heaven. It doesn't get any better than this."
U.S. Bankruptcy Court Judge Edward Jellen on Nov. 29 approved a motion by bankruptcy trustee Tevis Thompson to accept the high bid of $1,052,000 by NCK LLC, an entity formed by Vital Life Services benefactors. NCK representative Kurt Zimmerman declined to provide any further details about the corporation, citing the violent history associated with the bakery organization.
The ruling gave NCK has the right to purchase the two-story, 6,000-square-foot bakery property, with a second bidder, Paulette Arbuckle, a resident of the neighborhood, as backup purchaser at a bid of $1,051,000. According to news reports, Arbuckle was represented by a broker with ties to the family that founded Your Black Muslim Bakery.
The bids were entered during a four-round private auction at a lawyer's office Nov. 28. In court the following day, Thompson told Jellen he was confident the "overbid" process that started with an $899,000 offer from Arbuckle Sept. 10 resulted in the best possible price for a property with "a lot of warts and blemishes."
The trustee verified each bidder's ability to carry out an all-cash transaction for the property, Thompson said.
The bakery purchase price will go toward paying off more than 25 liens against the property totaling more than $900,000, said Equistone Partners broker Michael Harrison, who represented NCK.
NCK expects to spend another $800,000 to $1 million to renovate the building, using commercial interiors specialist R.N. Field Construction of San Francisco, where Zimmerman is a partner.
Zimmerman and Harrison bid on the bakery after spending months looking for a new home for Vital Life Services after Zimmerman received an unsolicited offer to buy the center's Shattuck Avenue location, Harrison said. The sale of that property was contingent on relocating Vital Life Services.
Once the centerpiece of a family-run, community-based string of businesses credited with creating job opportunities in an impoverished neighborhood, Your Black Muslim Bakery deteriorated in the past decade amid charges of violence and the deaths of its founder, Yusuf Bey, and the murders of two successors. A journalist investigating the business, Oakland Post Editor Chauncey Bailey, was shot to death Aug. 2 in Oakland, and Devaughndre Broussard, a handyman at the bakery, was charged with his murder.
The court moved Your Black Muslim Bakery into Chapter 7 bankruptcy proceedings in August after representatives of the business failed to file reports and pay fees required under Chapter 11 voluntary reorganization. The bankruptcy was one of the topics being researched by Bailey when he was killed.
credted by: bizjournals.com
Once the sale closes, the center will have its first permanent home at 5832 San Pablo Ave., Oakland. Founded in 1987, Vital Life Services has been operating in a rented 4,500-square-foot former Safeway building at 5720 Shattuck Ave.
The center provides services ranging from meals to counseling for about 400 East Bay residents living with AIDS, mostly in the Interstate 880 corridor, Executive Director Peggy Bush said. "It's just like heaven. It doesn't get any better than this."
U.S. Bankruptcy Court Judge Edward Jellen on Nov. 29 approved a motion by bankruptcy trustee Tevis Thompson to accept the high bid of $1,052,000 by NCK LLC, an entity formed by Vital Life Services benefactors. NCK representative Kurt Zimmerman declined to provide any further details about the corporation, citing the violent history associated with the bakery organization.
The ruling gave NCK has the right to purchase the two-story, 6,000-square-foot bakery property, with a second bidder, Paulette Arbuckle, a resident of the neighborhood, as backup purchaser at a bid of $1,051,000. According to news reports, Arbuckle was represented by a broker with ties to the family that founded Your Black Muslim Bakery.
The bids were entered during a four-round private auction at a lawyer's office Nov. 28. In court the following day, Thompson told Jellen he was confident the "overbid" process that started with an $899,000 offer from Arbuckle Sept. 10 resulted in the best possible price for a property with "a lot of warts and blemishes."
The trustee verified each bidder's ability to carry out an all-cash transaction for the property, Thompson said.
The bakery purchase price will go toward paying off more than 25 liens against the property totaling more than $900,000, said Equistone Partners broker Michael Harrison, who represented NCK.
NCK expects to spend another $800,000 to $1 million to renovate the building, using commercial interiors specialist R.N. Field Construction of San Francisco, where Zimmerman is a partner.
Zimmerman and Harrison bid on the bakery after spending months looking for a new home for Vital Life Services after Zimmerman received an unsolicited offer to buy the center's Shattuck Avenue location, Harrison said. The sale of that property was contingent on relocating Vital Life Services.
Once the centerpiece of a family-run, community-based string of businesses credited with creating job opportunities in an impoverished neighborhood, Your Black Muslim Bakery deteriorated in the past decade amid charges of violence and the deaths of its founder, Yusuf Bey, and the murders of two successors. A journalist investigating the business, Oakland Post Editor Chauncey Bailey, was shot to death Aug. 2 in Oakland, and Devaughndre Broussard, a handyman at the bakery, was charged with his murder.
The court moved Your Black Muslim Bakery into Chapter 7 bankruptcy proceedings in August after representatives of the business failed to file reports and pay fees required under Chapter 11 voluntary reorganization. The bankruptcy was one of the topics being researched by Bailey when he was killed.
credted by: bizjournals.com
Bernanke: Economic outlook murky
U.S. Federal Reserve Chairman Ben Bernanke gave no hint Thursday whether interest rates will continue to drop. But in a speech in Charlotte, he said the nation's economic outlook is murky, given ongoing stress from the credit crunch and rising fuel prices.
Bernanke discussed the economy during a presentation at the Charlotte Chamber's annual meeting. The chamber also honored him with the organization's Citizen of the Carolinas Award.
The chamber presents the award annually to an individual who has brought positive recognition to the Carolinas. Bernanke is a native of Dillon, S.C., about 120 miles southeast of Charlotte. He was sworn in as Fed chairman in early 2006, replacing Alan Greenspan.
About 2,400 people attended Thursday night's chamber event, held at the Charlotte Convention Center.
The Fed's Open Market Committee, which sets monetary policy and considers raising or lowering interest rates, will meet next on Dec. 11. The committee cut the federal funds rate to 4.75 percent in September and to 4.5 percent Oct. 31. Banks use the federal funds rate to determine the interest they charge on overnight loans to each other.
"How has the economic picture changed in the month since that meeting?" Bernanke said. "As is often the case, the incoming economic data have been mixed."
Several key indicators, such as home construction, remain weak, he said. Household income will continue to grow but at a slower rate.
A combination of high gas prices, the weak housing market, tight credit conditions and declines in stock prices seem likely "to create some headwinds for the consumer in the months ahead," Bernanke said.
On the bright side, the Fed chairman said the labor market remains solid, with the unemployment rate staying at 4.7 percent last month. That's important for maintaining the economic expansion, he said.
At the Fed panel's Dec. 11 meeting, the committee will "have to judge whether the outlook for the economy or the balance of risks have shifted materially," Bernanke said. The Fed will remain "exceptionally alert and flexible as we continue to assess how best to promote sustainable economic growth and price stability."
Bernanke also discussed the Charlotte region's growth and how the area has changed since the days when he would visit his paternal grandparents here 40 years ago. The couple lived on Cumberland Avenue in the Myers Park community.
He said Carolinians are facing the same challenge confronting other areas of the country: replacing jobs in old-line manufacturing industries by creating employment in services such as health care and hospitality. Meanwhile, the region is adapting to globalization and advancing technology, he said.
Work-force quality is the most important factor in an economy's success, Bernanke said. "In a rapidly changing world, economically valuable skills can be maintained only through learning that extends beyond traditional schooling to encompass training and retraining well into the middle years of life."
Charlotte has benefited from its emergence as a financial-services center during the last 10 years, he noted. And an average of 39,000 residents have moved here each year since 1997.
"Thus, like many other vibrant regions of the country, the Charlotte area has grown by developing a high-productivity service economy," Bernanke said.
He cited the construction of the N.C. Research Campus on the site of the former Pillowtex Inc. headquarters and manufacturing site in Kannapolis -- where more than 4,000 workers lost their jobs when the company closed in 2003 -- as an example of the transition.
While Charlotte will continue to woo highly educated and skilled employees from other regions, Bernanke said it remains crucial to improve the skills of other local workers, especially those displaced by declining industries such as textiles.
"Education and skills must be provided flexibly and to people of any age," he said.
Reflecting on his visits here as a child, Bernanke recalled how his "Grandpa Friedman" would take him to Freedom Park to feed the ducks. At the time, the youngster thought the area's name was "Friedman Park."
"I was suitably impressed by the honor the city authorities had apparently given my grandparents," he quipped.
credited by: bizjournals.com
Bernanke discussed the economy during a presentation at the Charlotte Chamber's annual meeting. The chamber also honored him with the organization's Citizen of the Carolinas Award.
The chamber presents the award annually to an individual who has brought positive recognition to the Carolinas. Bernanke is a native of Dillon, S.C., about 120 miles southeast of Charlotte. He was sworn in as Fed chairman in early 2006, replacing Alan Greenspan.
About 2,400 people attended Thursday night's chamber event, held at the Charlotte Convention Center.
The Fed's Open Market Committee, which sets monetary policy and considers raising or lowering interest rates, will meet next on Dec. 11. The committee cut the federal funds rate to 4.75 percent in September and to 4.5 percent Oct. 31. Banks use the federal funds rate to determine the interest they charge on overnight loans to each other.
"How has the economic picture changed in the month since that meeting?" Bernanke said. "As is often the case, the incoming economic data have been mixed."
Several key indicators, such as home construction, remain weak, he said. Household income will continue to grow but at a slower rate.
A combination of high gas prices, the weak housing market, tight credit conditions and declines in stock prices seem likely "to create some headwinds for the consumer in the months ahead," Bernanke said.
On the bright side, the Fed chairman said the labor market remains solid, with the unemployment rate staying at 4.7 percent last month. That's important for maintaining the economic expansion, he said.
At the Fed panel's Dec. 11 meeting, the committee will "have to judge whether the outlook for the economy or the balance of risks have shifted materially," Bernanke said. The Fed will remain "exceptionally alert and flexible as we continue to assess how best to promote sustainable economic growth and price stability."
Bernanke also discussed the Charlotte region's growth and how the area has changed since the days when he would visit his paternal grandparents here 40 years ago. The couple lived on Cumberland Avenue in the Myers Park community.
He said Carolinians are facing the same challenge confronting other areas of the country: replacing jobs in old-line manufacturing industries by creating employment in services such as health care and hospitality. Meanwhile, the region is adapting to globalization and advancing technology, he said.
Work-force quality is the most important factor in an economy's success, Bernanke said. "In a rapidly changing world, economically valuable skills can be maintained only through learning that extends beyond traditional schooling to encompass training and retraining well into the middle years of life."
Charlotte has benefited from its emergence as a financial-services center during the last 10 years, he noted. And an average of 39,000 residents have moved here each year since 1997.
"Thus, like many other vibrant regions of the country, the Charlotte area has grown by developing a high-productivity service economy," Bernanke said.
He cited the construction of the N.C. Research Campus on the site of the former Pillowtex Inc. headquarters and manufacturing site in Kannapolis -- where more than 4,000 workers lost their jobs when the company closed in 2003 -- as an example of the transition.
While Charlotte will continue to woo highly educated and skilled employees from other regions, Bernanke said it remains crucial to improve the skills of other local workers, especially those displaced by declining industries such as textiles.
"Education and skills must be provided flexibly and to people of any age," he said.
Reflecting on his visits here as a child, Bernanke recalled how his "Grandpa Friedman" would take him to Freedom Park to feed the ducks. At the time, the youngster thought the area's name was "Friedman Park."
"I was suitably impressed by the honor the city authorities had apparently given my grandparents," he quipped.
credited by: bizjournals.com
2007-11-28
Max Muscle looking to bulk up
Max Muscle, a seller of sports nutrition, weight loss and fitness products, is seeking franchisees to expand its presence nationwide.
The chain, founded Anaheim in 2003, operates more than 125 stores and is looking to add 500 additional locations over the next five years.
The company, which locates its stores near health and athletic clubs, is vying to grab a bigger piece of the $16 billion nutritional supplement market. Max Muscle sells such supplements, as well as athletic apparel and a private line of vitamins and other natural nutrient products under the name Max Nutraceuticals. But its target market is not just bodybuilders, but everyday people.
The chain is seeking regional directors as well as single- and multi-unit franchisees. Investment costs for a Max Muscle franchise range from $158,000 to $285,000 for a single unit, and $100,000 to $500,000 for area development agreements and master licenses.
The rollout coincides with a new store design that features flat-screen televisions, interactive libraries and online nutritional and exercise planning software.
credited by: bizjournals.com
The chain, founded Anaheim in 2003, operates more than 125 stores and is looking to add 500 additional locations over the next five years.
The company, which locates its stores near health and athletic clubs, is vying to grab a bigger piece of the $16 billion nutritional supplement market. Max Muscle sells such supplements, as well as athletic apparel and a private line of vitamins and other natural nutrient products under the name Max Nutraceuticals. But its target market is not just bodybuilders, but everyday people.
The chain is seeking regional directors as well as single- and multi-unit franchisees. Investment costs for a Max Muscle franchise range from $158,000 to $285,000 for a single unit, and $100,000 to $500,000 for area development agreements and master licenses.
The rollout coincides with a new store design that features flat-screen televisions, interactive libraries and online nutritional and exercise planning software.
credited by: bizjournals.com
Cessna Skycatcher -- made in China
Cessna Aircraft Co. says the Shenyang Aircraft Corp. will build the company's newest model airplane, the 162 Skycatcher light sport aircraft.
Cessna Chairman, President and CEO Jack Pelton says light sport aircraft need the latest avionics, light-weight equipment, must be safe and reliable and be competitively priced.
"Our solution is to partner with SAC, a company with excellent facilities, state-of-the-art technologies and a workforce highly experienced in aircraft manufacturing," Pelton says.
Cessna is a subsidiary of the Textron Co. (NYSE: TXT). SAC is a subsidiary of China Aviation Industry Corp. 1. It is a government-owned group of aviation manufacturers.
Cessna will design the Skycatcher. It will also conduct testing and send employees to the SAC plant to oversee the manufacturing process. The airplanes will be assembled at the SAC plant in China.
credited by: bizjournals.com
Cessna Chairman, President and CEO Jack Pelton says light sport aircraft need the latest avionics, light-weight equipment, must be safe and reliable and be competitively priced.
"Our solution is to partner with SAC, a company with excellent facilities, state-of-the-art technologies and a workforce highly experienced in aircraft manufacturing," Pelton says.
Cessna is a subsidiary of the Textron Co. (NYSE: TXT). SAC is a subsidiary of China Aviation Industry Corp. 1. It is a government-owned group of aviation manufacturers.
Cessna will design the Skycatcher. It will also conduct testing and send employees to the SAC plant to oversee the manufacturing process. The airplanes will be assembled at the SAC plant in China.
credited by: bizjournals.com
Judge upholds signature revocation law
Leon County Circuit Judge Charles A. Francis rejected Florida Hometown Democracy's challenge to a new law that allows voters to revoke petition signatures on ballot initiatives.
Political action committee Florida Hometown Democracy challenged the constitutionality of the law allowing revocation of petition signatures. Save Our Constitution, the primary opponent of the group's proposed amendment -- which would require local referendums on future land-use changes -- has used the new law to try to cut the number of signatures its supporters have collected to try to get on the November 2008 ballot.
Save Our Constitution, a committee backed by the Associated Industries of Florida and Florida Hometown Democracy's primary opponent, said the ability of voters to take back their signature is necessary, "especially in light of the tactics of the Hometown Democracy group and its mercenary signature-gatherers."
Florida Hometown Democracy and its leader, Leslie Blackner, did not immediately return calls for comment. The group has the option to appeal.
Supporters need 611,000 signatures to get on the ballot and had nearly 394,000 filed with the state as of Tuesday afternoon.
credited by: bizjournals.com
Political action committee Florida Hometown Democracy challenged the constitutionality of the law allowing revocation of petition signatures. Save Our Constitution, the primary opponent of the group's proposed amendment -- which would require local referendums on future land-use changes -- has used the new law to try to cut the number of signatures its supporters have collected to try to get on the November 2008 ballot.
Save Our Constitution, a committee backed by the Associated Industries of Florida and Florida Hometown Democracy's primary opponent, said the ability of voters to take back their signature is necessary, "especially in light of the tactics of the Hometown Democracy group and its mercenary signature-gatherers."
Florida Hometown Democracy and its leader, Leslie Blackner, did not immediately return calls for comment. The group has the option to appeal.
Supporters need 611,000 signatures to get on the ballot and had nearly 394,000 filed with the state as of Tuesday afternoon.
credited by: bizjournals.com
2007-11-27
European Indexes End Higher
London
The FTSE 100 closed well in the black on positive broker views on the pharma and life insurance sectors and M&A in mining and utilities. Wall Street was trading higher. VEDANTA [+7.16%] was firm on talk of bid interest from China. Also, India's Supreme Court barred Vedanta from mining bauxite in the eastern part of the country. WTI was at US$97.86/bbl. In broker moves, Citigroup upgraded AVIVA [+5.34%] to buy from hold, arguing it could be the best buying opportunity in the sector since 2003. Also, Deutsche Bank boosted pharma stocks by saying that there are 'few catalysts, but valuation finally grabs some attention'. In utilities, PE firms Montagu and HgCapital said BIFFA [+24.76%] had rejected their bid approach. In company updates: GCAP MEDIA [-14.24%] said first half pretax profit slipped to 5.6 million and that CEO Ralph Bernard is to leave. INFORMA [+3.48%] appointed Adam Walker as finance director, adding it is on course to meet expectations for the group for the full year. NATIONAL EXPRESS [+3.31%] says trading remains in line with expectations, with particularly strong revenue growth at UK Trains. The company added that Adam Walker is to step down from his post as finance director to join Informa.
Paris
The CAC 40 [+1.94%] closed higher, with Wall Street trading positively on Black Friday. In Paris, SANOFI [+2.02%] was firm following a positive sector note from Deutsche Bank. ARCELOR MITTAL [+3.55%] plans a listing in India, wrote The Times of India. Elsewhere, AREVA [+4.94%] could see billions of invested - Germany's Siemens is 'ready' to increase its 34% stake in Areva NP, its nuclear reactor arm, according to Les Echos. However, the paper added that Siemens would not be happy to share Areva's capital with its rival ALSTOM [+4.9%]. There has been much market murmuring over a possible grand tie-up involving Areva, Alstom and BOUYGUES [+2.56%]. The plot thickened as La Tribune cited a trade union source suggesting French state-funded nuclear body CEA may reduce its 79% stake in Areva. Among financials, AXA [+4.3%] is making moves for CNP ASSURANCES [+11.0%], Les Echos reported. NATIXIS [+4.05%] shot higher having been upgraded to hold by Citigroup. CREDIT AGRICOLE [+5.0%] is seeking permission to be able to take its stake in Spain's Bankinter up to 30%. EADS's [+0.52%] Airbus has slashed R&D budgets in response to fears over the weakening US$, the FT reported. REXEL [+4.84%] has sealed its 4.85/sh takeover of NL's Hagemeyer.
Frankfurt
Xetra-Dax [+0.62%] closed in the black, above the 7600 level, as Wall Street was trading in positive territory on Black Friday, the day retailers are traditionally said to turn a profit as shoppers go bargain hunting after Thanksgiving. The US closes early today at 18:00 GMT. On the local macro front, German import prices excluding oil for October were up 0.4% m/m and down 0.1% year-over-year. POSTBANK [+4.14%] remained the leading blue-chip gainer as COMMERZBANK's [+2.01%] CEO says it is interested. Commerzbank also still wants to make an acquisition in Russia after failing to acquire a majority stake in Promsvyazbank, Interfax reported. In other news, SIEMENS [+2.18%] is 'ready' to increase its 34% stake in Areva NP, Areva's nuclear reactor arm, according to Les Echos. Merger plans between LUFTHANSA's [+1.63%] Germanwings unit and TUI's [+0.06%] TUIfly division are set to include Eurowings too, people familiar with the matter told Reuters. Both companies would each hold 40% of a planned joint airline, Sueddeutsche Zeitung reported. BEIERSDORF [-0.15%] wants to divest Tesa, its adhesives unit, and may sell stock in the division to its shareholders, according to Manager Magazin. There was talk of Kuwait raising its stake in GEA [+8.51%] to 25%. Away from M&A, DEUTSCHE BOERSE's [+2.81%] supervisory board is likely to extend CEO Reto Francioni's contract until 2013.
Netherlands
The AEX [+1.19%] closed higher, with Wall Street in positive territory on Black Friday, the day retailers are traditionally said to turn a profit as shoppers go bargain hunting after Thanksgiving. PHILIPS [+4.93%] rose further as the Lower House of Dutch Parliament passed a bill which doubles the limit on the amount of tax-free share buybacks. The news was particularly positive for Philips as it has a large amount of cash for share buybacks available. Separately, Philips wants to sell its Lighting unit in Winschoten, according to local press reports. In other news, the EU has extended its deadline to review AKZO NOBEL's [+3.25%] takeover of ICI. Akzo still expects the deal to close in January. HAGEMEYER [+1.96%] has reached an agreement on a 4.85 per share bid by France's Rexel. ARCELOR-MITTAL [+3.35%] wants to list on the Indian stock exchanges, using the Indian Depository Receipts [IDR], The Times of India reported. The steelmaker announced today that it bought back 3 million shares for 143.3 million between 16 and 22 November. HEINEKEN [-0.74%] is in talks to acquire Czech beverage group Drinks Union, daily MF Dnes reported, citing two unnamed sector sources.
Switzerland
After a rather choppy week, the SLI finished at a lower level than it had done at the end of the previous week. On Friday, however, markets were in fine fettle as Wall Street enjoyed a minor post-Thanksgiving session rally, on a shortened trading day. Back in Zurich, pharmas and financials were among the outperformers. Deutsche Bank reiterated its overweight on the pharma sector based on attractive valuations; says that its top picks include NOVARTIS [+3.33%] and ROCHE [+0.37%]. Anglo-Swedish AstraZeneca is another top pick for the broker. Financials also fired up, as bargain hunters scooped up names like UBS [+3.41%]. JP Morgan thinks ZURICH FINANCIAL [+1.99%] offers a pricing anomaly which it believes could close in the short term. For this reason, highlighted the stock as a short term trading idea while not changing its fundamental recommendation of neutral or price target of CHF435. On the news front, Domtar said it has won a judgment by the Supreme Court of Canada in a claim against ABB [+2.19%] and Alstom Canada Inc. The two companies have to pay Domtar c.CAD38.7 million in damages and interest. UNIQUE ZURICH AIRPORT [+0.96%] named Thomas E. Kern to become new CEO as of 15 January 2008. The airport operator also says CFO Beat Spalinger will leave in April 2008. In broker action, Goldman downgraded SONOVA [-3.17%] to a conviction sell.
credited by: businessweek.com
The FTSE 100 closed well in the black on positive broker views on the pharma and life insurance sectors and M&A in mining and utilities. Wall Street was trading higher. VEDANTA [+7.16%] was firm on talk of bid interest from China. Also, India's Supreme Court barred Vedanta from mining bauxite in the eastern part of the country. WTI was at US$97.86/bbl. In broker moves, Citigroup upgraded AVIVA [+5.34%] to buy from hold, arguing it could be the best buying opportunity in the sector since 2003. Also, Deutsche Bank boosted pharma stocks by saying that there are 'few catalysts, but valuation finally grabs some attention'. In utilities, PE firms Montagu and HgCapital said BIFFA [+24.76%] had rejected their bid approach. In company updates: GCAP MEDIA [-14.24%] said first half pretax profit slipped to 5.6 million and that CEO Ralph Bernard is to leave. INFORMA [+3.48%] appointed Adam Walker as finance director, adding it is on course to meet expectations for the group for the full year. NATIONAL EXPRESS [+3.31%] says trading remains in line with expectations, with particularly strong revenue growth at UK Trains. The company added that Adam Walker is to step down from his post as finance director to join Informa.
Paris
The CAC 40 [+1.94%] closed higher, with Wall Street trading positively on Black Friday. In Paris, SANOFI [+2.02%] was firm following a positive sector note from Deutsche Bank. ARCELOR MITTAL [+3.55%] plans a listing in India, wrote The Times of India. Elsewhere, AREVA [+4.94%] could see billions of invested - Germany's Siemens is 'ready' to increase its 34% stake in Areva NP, its nuclear reactor arm, according to Les Echos. However, the paper added that Siemens would not be happy to share Areva's capital with its rival ALSTOM [+4.9%]. There has been much market murmuring over a possible grand tie-up involving Areva, Alstom and BOUYGUES [+2.56%]. The plot thickened as La Tribune cited a trade union source suggesting French state-funded nuclear body CEA may reduce its 79% stake in Areva. Among financials, AXA [+4.3%] is making moves for CNP ASSURANCES [+11.0%], Les Echos reported. NATIXIS [+4.05%] shot higher having been upgraded to hold by Citigroup. CREDIT AGRICOLE [+5.0%] is seeking permission to be able to take its stake in Spain's Bankinter up to 30%. EADS's [+0.52%] Airbus has slashed R&D budgets in response to fears over the weakening US$, the FT reported. REXEL [+4.84%] has sealed its 4.85/sh takeover of NL's Hagemeyer.
Frankfurt
Xetra-Dax [+0.62%] closed in the black, above the 7600 level, as Wall Street was trading in positive territory on Black Friday, the day retailers are traditionally said to turn a profit as shoppers go bargain hunting after Thanksgiving. The US closes early today at 18:00 GMT. On the local macro front, German import prices excluding oil for October were up 0.4% m/m and down 0.1% year-over-year. POSTBANK [+4.14%] remained the leading blue-chip gainer as COMMERZBANK's [+2.01%] CEO says it is interested. Commerzbank also still wants to make an acquisition in Russia after failing to acquire a majority stake in Promsvyazbank, Interfax reported. In other news, SIEMENS [+2.18%] is 'ready' to increase its 34% stake in Areva NP, Areva's nuclear reactor arm, according to Les Echos. Merger plans between LUFTHANSA's [+1.63%] Germanwings unit and TUI's [+0.06%] TUIfly division are set to include Eurowings too, people familiar with the matter told Reuters. Both companies would each hold 40% of a planned joint airline, Sueddeutsche Zeitung reported. BEIERSDORF [-0.15%] wants to divest Tesa, its adhesives unit, and may sell stock in the division to its shareholders, according to Manager Magazin. There was talk of Kuwait raising its stake in GEA [+8.51%] to 25%. Away from M&A, DEUTSCHE BOERSE's [+2.81%] supervisory board is likely to extend CEO Reto Francioni's contract until 2013.
Netherlands
The AEX [+1.19%] closed higher, with Wall Street in positive territory on Black Friday, the day retailers are traditionally said to turn a profit as shoppers go bargain hunting after Thanksgiving. PHILIPS [+4.93%] rose further as the Lower House of Dutch Parliament passed a bill which doubles the limit on the amount of tax-free share buybacks. The news was particularly positive for Philips as it has a large amount of cash for share buybacks available. Separately, Philips wants to sell its Lighting unit in Winschoten, according to local press reports. In other news, the EU has extended its deadline to review AKZO NOBEL's [+3.25%] takeover of ICI. Akzo still expects the deal to close in January. HAGEMEYER [+1.96%] has reached an agreement on a 4.85 per share bid by France's Rexel. ARCELOR-MITTAL [+3.35%] wants to list on the Indian stock exchanges, using the Indian Depository Receipts [IDR], The Times of India reported. The steelmaker announced today that it bought back 3 million shares for 143.3 million between 16 and 22 November. HEINEKEN [-0.74%] is in talks to acquire Czech beverage group Drinks Union, daily MF Dnes reported, citing two unnamed sector sources.
Switzerland
After a rather choppy week, the SLI finished at a lower level than it had done at the end of the previous week. On Friday, however, markets were in fine fettle as Wall Street enjoyed a minor post-Thanksgiving session rally, on a shortened trading day. Back in Zurich, pharmas and financials were among the outperformers. Deutsche Bank reiterated its overweight on the pharma sector based on attractive valuations; says that its top picks include NOVARTIS [+3.33%] and ROCHE [+0.37%]. Anglo-Swedish AstraZeneca is another top pick for the broker. Financials also fired up, as bargain hunters scooped up names like UBS [+3.41%]. JP Morgan thinks ZURICH FINANCIAL [+1.99%] offers a pricing anomaly which it believes could close in the short term. For this reason, highlighted the stock as a short term trading idea while not changing its fundamental recommendation of neutral or price target of CHF435. On the news front, Domtar said it has won a judgment by the Supreme Court of Canada in a claim against ABB [+2.19%] and Alstom Canada Inc. The two companies have to pay Domtar c.CAD38.7 million in damages and interest. UNIQUE ZURICH AIRPORT [+0.96%] named Thomas E. Kern to become new CEO as of 15 January 2008. The airport operator also says CFO Beat Spalinger will leave in April 2008. In broker action, Goldman downgraded SONOVA [-3.17%] to a conviction sell.
credited by: businessweek.com
Stocks Stage a Post-Holiday Rally
Just like ordinary Americans, with their Thanksgiving rituals of pumpkin pie and football viewing, the stock market has its own Turkey Day traditions. And one of them was observed Friday, much to the relief of equity investors.
The market, which fell Wednesday, historically rises on the day after Thanksgiving following pre-holiday loss, notes Standard & Poor's MarketScope. And that was the case for Friday's holiday-shortened session, when major indexes scored solid gains.
On Friday, the Dow Jones industrial average gained 181.84 points, or 1,42%, to 12,980.88. The broader S&P 500 index was up 23.93 points, or 1.69%, to 1,440.7. The index started 2007 at 1418, and is now in slightly positive territory for the year. The Nasdaq composite index was higher by 34.45 points, or 1.35%, to 2,596.6.
Financial and retailer stocks were pacesetters on bargain hunting and short covering. Trading was slow as market closed early. On the New York Stock Exchange, 26 issues advanced in price for every five that declined. Nasdaq breadth was 21-6 positive.
Peter Cardillo, chief market economist at Avalon Partners, said that Friday's market may have seen some bargain hunting after Wednesday's sharp declines. "I just think it's purely a technical bounce from Wednesday's sharp sell-off," he adds.
Indeed, when traders return to work Monday they will be facing the same factors that drove the market's recent weakness. Market players remain worried by the Federal Reserve's projections of sluggish GDP growth over the next 3 years.
There were no significant economic reports scheduled for release during Friday's shortened session. Many Fed officials are slated to speak next week, and the government will release third-quarter GDP results next Thursday, which are expected to be revised to the 5% growth level.
Credit concerns remained a focus on Wall Street. According to a Wall Street Journal report, Bank of America (BAC), Citigroup (C), and JPMorgan Chase (JPM) are drawing up a plan to ease the credit markets are expected to ask others in the industry to help out next week. The three are spearheading an effort to raise billions of dollars for a new fund that is supposed to help structured investment vehicles sell hard-to-value paper they hold without further unnerving already jittery credit markets.
The banks have asked BlackRock (BLK) to act as the lead asset manager for the $75 billion fund they are creating to support the asset-backed securities market, a source told Reuters. According to the Journal, bankers involved in assembling the plan have said they would like to get the superfund running by January.
The Federal Reserve's gloomier than expected projections for economic growth issued earlier in the week continued to reverberate on Wall Street Friday. Economist Jan Hatzius of Goldman Sachs (GS) wrote in a note Friday that although the FOMC minutes sounded quite hawkish, the firm expects the FOMC to change its mind on the need for further monetary easing -- partly because of deteriorating economic data and partly because of the tightening in financial conditions. But, according to Hatzius, "[t]he most important risk is not the decline in broad equity market indexes, but the increased risk of damage to the financial system signaled by the sharp downturn in financial sector stock prices."
"Our own views are even more bearish on the near-term growth outlook than those of the FOMC, but considerably more optimistic about the long-term picture," wrote Hatzius. Goldman expects real GDP to grow at close to a 3% trend in the longer term. "Consequently, we expect a higher unemployment rate and more room for monetary easing."
In the energy markets Friday, January West Texas Intermediate crude oil futures, which fell 74 cents Wednesday, climbed in late trading Friday to $97.96 per barrel. According to a Reuters report, Roy Mason of Oil Movements said that OPEC oil exports, excluding Angola, will rise by 720,000 barrels per day in the four weeks to Dec. 8.
December gold futures surged to $822.40 on Friday, even though the dollar index was higher and the euro tumbled from record highs on worries a world financial turmoil will cause a bigger-than-expected slowdown in the euro zone, prompting the single currency to tumble.
Among stocks in the news Friday, Arcelor Mittal (MT) confirmed it is in talks with controlling shareholders in China Oriental Group Limited about future co-operation and including increasing its stake in the company. Arcelor currently holds a 28% equity stake in China Oriental Group.
Bristol-Myers Squibb (BMY) and Pierre Fabre Medicament terminated their license agreement for the development of vinflunine, a chemotherapy agent under investigation for the treatment of advanced or metastatic bladder cancer and other tumor types.
Broadcom (BRCM) announced that a federal judge has let stand a jury verdict that found that Qualcomm (QCOM) infringes three Broadcom patents. Broadcom will now seek to enjoin Qualcomm from making, using, selling and developing third generation [3G] WCDMA and EV-DO cellular chips that infringe any of the patents.
CIBC World downgraded shares of Hecla Mining (HL) to sector underperform from sector perform.
Massey Energy (MEE) said a higher court overturned a $76 million judgment against the company.
European and Asian markets rose even though central bank officials worried economies slowing down.
In London, the FTSE 100 index gained 1.59% to 6,253.40. In Paris, the CAC 40 index added 1.51% to 5,497.95. Germany's DAX index rose 0.45% to 7,596.40.
Hong Kong's Hang Seng index advanced 2.06% to 26,541.09. Shanghai's benchmark index rose 0.96%.
Japan's markets were closed Friday for a holiday.
Treasury Market
Bonds, which surged Wednesday in a flight to safety from falling stocks, were a bit lower Friday morning as U.S. stocks moved higher. The 10-year note was lower at 101-27/32 for a yield of 4.029%, while the 30-year bond was higher at 109 for a yield of 4.453%.
credited by: BusinessWeek.com
The market, which fell Wednesday, historically rises on the day after Thanksgiving following pre-holiday loss, notes Standard & Poor's MarketScope. And that was the case for Friday's holiday-shortened session, when major indexes scored solid gains.
On Friday, the Dow Jones industrial average gained 181.84 points, or 1,42%, to 12,980.88. The broader S&P 500 index was up 23.93 points, or 1.69%, to 1,440.7. The index started 2007 at 1418, and is now in slightly positive territory for the year. The Nasdaq composite index was higher by 34.45 points, or 1.35%, to 2,596.6.
Financial and retailer stocks were pacesetters on bargain hunting and short covering. Trading was slow as market closed early. On the New York Stock Exchange, 26 issues advanced in price for every five that declined. Nasdaq breadth was 21-6 positive.
Peter Cardillo, chief market economist at Avalon Partners, said that Friday's market may have seen some bargain hunting after Wednesday's sharp declines. "I just think it's purely a technical bounce from Wednesday's sharp sell-off," he adds.
Indeed, when traders return to work Monday they will be facing the same factors that drove the market's recent weakness. Market players remain worried by the Federal Reserve's projections of sluggish GDP growth over the next 3 years.
There were no significant economic reports scheduled for release during Friday's shortened session. Many Fed officials are slated to speak next week, and the government will release third-quarter GDP results next Thursday, which are expected to be revised to the 5% growth level.
Credit concerns remained a focus on Wall Street. According to a Wall Street Journal report, Bank of America (BAC), Citigroup (C), and JPMorgan Chase (JPM) are drawing up a plan to ease the credit markets are expected to ask others in the industry to help out next week. The three are spearheading an effort to raise billions of dollars for a new fund that is supposed to help structured investment vehicles sell hard-to-value paper they hold without further unnerving already jittery credit markets.
The banks have asked BlackRock (BLK) to act as the lead asset manager for the $75 billion fund they are creating to support the asset-backed securities market, a source told Reuters. According to the Journal, bankers involved in assembling the plan have said they would like to get the superfund running by January.
The Federal Reserve's gloomier than expected projections for economic growth issued earlier in the week continued to reverberate on Wall Street Friday. Economist Jan Hatzius of Goldman Sachs (GS) wrote in a note Friday that although the FOMC minutes sounded quite hawkish, the firm expects the FOMC to change its mind on the need for further monetary easing -- partly because of deteriorating economic data and partly because of the tightening in financial conditions. But, according to Hatzius, "[t]he most important risk is not the decline in broad equity market indexes, but the increased risk of damage to the financial system signaled by the sharp downturn in financial sector stock prices."
"Our own views are even more bearish on the near-term growth outlook than those of the FOMC, but considerably more optimistic about the long-term picture," wrote Hatzius. Goldman expects real GDP to grow at close to a 3% trend in the longer term. "Consequently, we expect a higher unemployment rate and more room for monetary easing."
In the energy markets Friday, January West Texas Intermediate crude oil futures, which fell 74 cents Wednesday, climbed in late trading Friday to $97.96 per barrel. According to a Reuters report, Roy Mason of Oil Movements said that OPEC oil exports, excluding Angola, will rise by 720,000 barrels per day in the four weeks to Dec. 8.
December gold futures surged to $822.40 on Friday, even though the dollar index was higher and the euro tumbled from record highs on worries a world financial turmoil will cause a bigger-than-expected slowdown in the euro zone, prompting the single currency to tumble.
Among stocks in the news Friday, Arcelor Mittal (MT) confirmed it is in talks with controlling shareholders in China Oriental Group Limited about future co-operation and including increasing its stake in the company. Arcelor currently holds a 28% equity stake in China Oriental Group.
Bristol-Myers Squibb (BMY) and Pierre Fabre Medicament terminated their license agreement for the development of vinflunine, a chemotherapy agent under investigation for the treatment of advanced or metastatic bladder cancer and other tumor types.
Broadcom (BRCM) announced that a federal judge has let stand a jury verdict that found that Qualcomm (QCOM) infringes three Broadcom patents. Broadcom will now seek to enjoin Qualcomm from making, using, selling and developing third generation [3G] WCDMA and EV-DO cellular chips that infringe any of the patents.
CIBC World downgraded shares of Hecla Mining (HL) to sector underperform from sector perform.
Massey Energy (MEE) said a higher court overturned a $76 million judgment against the company.
European and Asian markets rose even though central bank officials worried economies slowing down.
In London, the FTSE 100 index gained 1.59% to 6,253.40. In Paris, the CAC 40 index added 1.51% to 5,497.95. Germany's DAX index rose 0.45% to 7,596.40.
Hong Kong's Hang Seng index advanced 2.06% to 26,541.09. Shanghai's benchmark index rose 0.96%.
Japan's markets were closed Friday for a holiday.
Treasury Market
Bonds, which surged Wednesday in a flight to safety from falling stocks, were a bit lower Friday morning as U.S. stocks moved higher. The 10-year note was lower at 101-27/32 for a yield of 4.029%, while the 30-year bond was higher at 109 for a yield of 4.453%.
credited by: BusinessWeek.com
Florida fares poorly in breast cancer report
Florida is among the "most restrictive" states for women seeking state help during breast cancer treatment, according to a new report from Susan G. Komen for the Cure.
The State of Breast Cancer Report released Monday says that Florida is one of 21 states that still determine a woman ineligible for Medicaid-funded treatment, unless she was screened through the state program.
That restricts access to care for those diagnosed elsewhere, according to a release from the Florida Suncoast Affiliate of Komen for the Cure, a network of breast cancer survivors and activists.
The affiliate plans to lobby the Florida Legislature to change laws affecting women seeking Medicaid-funded treatment for breast cancer, the release says.
In 2006, the affiliate says it provided 2,500 initial screening mammograms and 1,100 initial diagnostic procedures including biopsies, and 89 women were diagnosed and treated for breast cancer. In addition, the affiliate says it reached more than 60,000 people through educational and support programs, made possible through grants totaling $975,000 awarded to 20 local nonprofit organizations.
credited by: bizjournals.com
The State of Breast Cancer Report released Monday says that Florida is one of 21 states that still determine a woman ineligible for Medicaid-funded treatment, unless she was screened through the state program.
That restricts access to care for those diagnosed elsewhere, according to a release from the Florida Suncoast Affiliate of Komen for the Cure, a network of breast cancer survivors and activists.
The affiliate plans to lobby the Florida Legislature to change laws affecting women seeking Medicaid-funded treatment for breast cancer, the release says.
In 2006, the affiliate says it provided 2,500 initial screening mammograms and 1,100 initial diagnostic procedures including biopsies, and 89 women were diagnosed and treated for breast cancer. In addition, the affiliate says it reached more than 60,000 people through educational and support programs, made possible through grants totaling $975,000 awarded to 20 local nonprofit organizations.
credited by: bizjournals.com
Tech Data posts big gains in third quarter
Tech Data Corp. said third quarter net income was $40.9 million, or 73 cents a share, compared to net income of $9.6 million, or 18 cents a share, for the prior-year period.
The company said net sales for the three months ended Oct. 31 were $5.9 billion, an increase of 9.1 percent from $5.4 billion in the same three months a year earlier.
During the third quarter one year ago, the company had recorded $6.1 million in restructuring charges and $2.8 million in consulting costs related to its European restructuring program that was completed in October 2006, according to a release.
The European operations continue to strengthen and gain traction in the marketplace, although there is still work to do to improve execution and profitability, Robert Dutkowsky, chief executive, said in the release.
He said the just-completed third quarter's sales and income gains were due to steady market conditions, sales execution, a focus on the small and mid-sized business sector, and product and inventory management efforts.
For the nine months ended Oct. 31, Tech Data said sales were $16.9 billion, an increase of 10.6 percent from $15.3 billion in the year-earlier period. Net income was $58.1 million, or $1.05 a share, compared to a net loss of $133 million, or $2.41 a share, in the same period a year earlier.
For the fourth quarter ending Jan. 31, Tech Data expects net sales of $6.35 billion to $6.5 billion, the release said. The company said it expects double-digit year-over-year growth in the Americas but a mid-to-high single-digit decline in Europe, reflecting a reduction in retail business as well as a decision to exit operations in Israel and the United Arab Emirates, the release said.
Tech Data (NYSE: TECD), based in Clearwater, distributes IT products and is the largest publicly traded company based in the Tampa Bay area.
credited by: bizjournals.com
The company said net sales for the three months ended Oct. 31 were $5.9 billion, an increase of 9.1 percent from $5.4 billion in the same three months a year earlier.
During the third quarter one year ago, the company had recorded $6.1 million in restructuring charges and $2.8 million in consulting costs related to its European restructuring program that was completed in October 2006, according to a release.
The European operations continue to strengthen and gain traction in the marketplace, although there is still work to do to improve execution and profitability, Robert Dutkowsky, chief executive, said in the release.
He said the just-completed third quarter's sales and income gains were due to steady market conditions, sales execution, a focus on the small and mid-sized business sector, and product and inventory management efforts.
For the nine months ended Oct. 31, Tech Data said sales were $16.9 billion, an increase of 10.6 percent from $15.3 billion in the year-earlier period. Net income was $58.1 million, or $1.05 a share, compared to a net loss of $133 million, or $2.41 a share, in the same period a year earlier.
For the fourth quarter ending Jan. 31, Tech Data expects net sales of $6.35 billion to $6.5 billion, the release said. The company said it expects double-digit year-over-year growth in the Americas but a mid-to-high single-digit decline in Europe, reflecting a reduction in retail business as well as a decision to exit operations in Israel and the United Arab Emirates, the release said.
Tech Data (NYSE: TECD), based in Clearwater, distributes IT products and is the largest publicly traded company based in the Tampa Bay area.
credited by: bizjournals.com
EcoSystems opens Ward store
EcoSystems has opened its second boutique on Oahu.
Brothers Todd and Tedd Yamanaka have expanded to Ward Warehouse with their lines of trendy apparel and accessories for young men and women. The stores carry labels by popular surf and skate brands, including several local clothing companies.
EcoSystems opened its first store at Kahala Mall last November.
credited by: bizjournals.com
Brothers Todd and Tedd Yamanaka have expanded to Ward Warehouse with their lines of trendy apparel and accessories for young men and women. The stores carry labels by popular surf and skate brands, including several local clothing companies.
EcoSystems opened its first store at Kahala Mall last November.
credited by: bizjournals.com
Stadium prepares for Warriors-Huskies game
Extra security and parking and traffic control measures will be in place at Aloha Stadium in Honolulu for Saturday's sold-out college football game.
The undefeated, 12th-ranked University of Hawaii Warriors play the University of Washington Huskies.
The Warriors defeated Boise state Nov. 23 to become Western Athletic Conference champions.
For that game, stadium officials coordinated with the Honolulu Police Department, state and city transportation departments and other government agencies to ease traffic congestion and keep unruly fan behavior at a minimum.
Similar measures are in place for this week's game. Stadium officials say incidents at the Boise State game were nothing out of the ordinary.
If the Warriors defeat the Huskies, Hawaii could secure a Bowl Championship Series berth.
credited by: bizjournals.com
The undefeated, 12th-ranked University of Hawaii Warriors play the University of Washington Huskies.
The Warriors defeated Boise state Nov. 23 to become Western Athletic Conference champions.
For that game, stadium officials coordinated with the Honolulu Police Department, state and city transportation departments and other government agencies to ease traffic congestion and keep unruly fan behavior at a minimum.
Similar measures are in place for this week's game. Stadium officials say incidents at the Boise State game were nothing out of the ordinary.
If the Warriors defeat the Huskies, Hawaii could secure a Bowl Championship Series berth.
credited by: bizjournals.com
Kuakini Health System names CFO
Kuakini Health System has named Sharon Yoshida its new vice president and chief financial officer.
She will direct all of the hospital's fiscal departments including accounting, business services, revenue management, payroll and purchasing.
Yoshida previously worked at Ernst & Young, Bank of Hawaii, Central Pacific Bank and Centex Destination Properties.
credited by: bizjournals.com
She will direct all of the hospital's fiscal departments including accounting, business services, revenue management, payroll and purchasing.
Yoshida previously worked at Ernst & Young, Bank of Hawaii, Central Pacific Bank and Centex Destination Properties.
credited by: bizjournals.com
Genzyme, French firm collaborate on gene therapies
A Bay state biotech will work with a French company to develop gene therapies that prevent blindness.
Genzyme Corp. in Cambridge (Nasdaq: GENZ) said on Tuesday that it hat signed a collaboration deal with Fovea Pharmaceuticals SA in Paris.
Both companies declined to disclose financial terms. But as part of the partnership, Fovea will provide scientific, clinical and pharmaceutical know-how in retinal diseases. Genzyme will contribute its expertise in protein production and gene delivery.
The treatments will focus on identifying new potential treatments that could attack photoreceptor degeneration, a major cause of irreversible blindness.
The collaboration represents a continued expansion of Genzyme's product focus. It also shows how Genzyme is willing to turn to innovative startups to identify new concepts for treatments.
The publicly-traded Genzyme, which now generates more than $3 billion in annual revenue, is paired with a startup that launched in May 2005 and remains privately held.
credited by: bizjournals.com
Genzyme Corp. in Cambridge (Nasdaq: GENZ) said on Tuesday that it hat signed a collaboration deal with Fovea Pharmaceuticals SA in Paris.
Both companies declined to disclose financial terms. But as part of the partnership, Fovea will provide scientific, clinical and pharmaceutical know-how in retinal diseases. Genzyme will contribute its expertise in protein production and gene delivery.
The treatments will focus on identifying new potential treatments that could attack photoreceptor degeneration, a major cause of irreversible blindness.
The collaboration represents a continued expansion of Genzyme's product focus. It also shows how Genzyme is willing to turn to innovative startups to identify new concepts for treatments.
The publicly-traded Genzyme, which now generates more than $3 billion in annual revenue, is paired with a startup that launched in May 2005 and remains privately held.
credited by: bizjournals.com
2007-10-17
Gas prices up on Big Isle, down on Maui
Gas prices have increased on the Big Island, dropped on Maui, and remained steady in Honolulu.
The AAA daily fuel gauge report for Wednesday reports that a gallon of unleaded in Hilo on the Big Island was up 10 cents from Tuesday to $3.28
In Wailuku, Maui, unleaded was selling for $3.48, down 5 cents from the day before.
Honolulu gas prices averaged $3.08, roughly the same as on Tuesday.
The statewide average also remained virtually unchanged at $3.19 per gallon. A gallon of diesel, meanwhile, was selling for $3.66, down a penny from Tuesday.
The nationwide average for a gallon of unleaded was $2.77, while diesel was selling for $2.94. Both figures are up slightly from the day before.
credited by: bizjournals.com
The AAA daily fuel gauge report for Wednesday reports that a gallon of unleaded in Hilo on the Big Island was up 10 cents from Tuesday to $3.28
In Wailuku, Maui, unleaded was selling for $3.48, down 5 cents from the day before.
Honolulu gas prices averaged $3.08, roughly the same as on Tuesday.
The statewide average also remained virtually unchanged at $3.19 per gallon. A gallon of diesel, meanwhile, was selling for $3.66, down a penny from Tuesday.
The nationwide average for a gallon of unleaded was $2.77, while diesel was selling for $2.94. Both figures are up slightly from the day before.
credited by: bizjournals.com
2007-10-16
Pomeroy names new CEO
Pomeroy IT Solutions Inc. has named Keith Coogan as its president and CEO. He replaces Stephen Pomeroy, who was fired in July for undisclosed reasons.
Hebron-based Pomeroy (NASDAQ: PMRY) sells computer hardware and provides consulting and related services.
The company's CFO, Kevin Gregory, has been filling in as interim president and CEO.
Coogan, 55, most recently served as CEO of Software Spectrum Inc., a software reseller that was sold to Tempe, Ariz.-based Insight Enterprises Inc. last year.
Pomeroy also said Tuesday that one of its board members, Kenneth Waters, has been named non-executive chairman of the board. He replaces the company's founder, David Pomeroy, who retired shortly after his son's termination.
Waters, 56, has been a board member since 2004. He is president of KRW LLC, an IT consulting company, and is CEO of E-Seek Inc., a computer hardware company.
credited by: bizjournals.com
Hebron-based Pomeroy (NASDAQ: PMRY) sells computer hardware and provides consulting and related services.
The company's CFO, Kevin Gregory, has been filling in as interim president and CEO.
Coogan, 55, most recently served as CEO of Software Spectrum Inc., a software reseller that was sold to Tempe, Ariz.-based Insight Enterprises Inc. last year.
Pomeroy also said Tuesday that one of its board members, Kenneth Waters, has been named non-executive chairman of the board. He replaces the company's founder, David Pomeroy, who retired shortly after his son's termination.
Waters, 56, has been a board member since 2004. He is president of KRW LLC, an IT consulting company, and is CEO of E-Seek Inc., a computer hardware company.
credited by: bizjournals.com
2007-10-15
Stocks trim losses but still end session lower
Bailout fund spurs worries about number of bad loans in financial system
NEW YORK - Stocks pulled back sharply Monday as news that major U.S. banks will set up a fund to help bail out the credit markets stirred concerns about bad debt and as oil prices surged to $86 per barrel for the first time. The Dow Jones industrial average lost more than 100 points.
The stock market’s pullback comes not only amid concerns about debt and rising energy costs but as investors await third-quarter reports due this week from more than 80 components of the Standard & Poor’s 500 index.
The concerns about banking came after Citigroup Inc., the biggest U.S. bank, reported that third-quarter results fell 57 percent. The company said it lost more than $3 billion in mortgage-backed security losses, leveraged debt write-downs and fixed-income trading losses.
The bank — along with JPMorgan Chase & Co. and Bank of America Corp. — announced the creation of a fund used to help revive the asset-backed commercial paper market. The fund will buy assets from structured investment vehicles, also known as SIVs, which buy corporate bonds and subprime mortgage debt. The bailout was orchestrated by the Treasury Department to avoid a fire sale in the market.
“It’s a reminder that this problem never was entirely put to bed. There may be financial institutions out there than are in more trouble than we thought they were,” said Aaron Gurwitz, co-head of portfolio strategy at Lehman Brothers Investment Management, referring to concerns about bad debt. He also noted that Monday’s session wasn’t unusual given the back-and-forth moves in the major indexes in recent sessions.
According to preliminary calculations, the Dow fell 108.28, or 0.77 percent, to 13,984.80.
Broader stock indicators also declined. The S&P 500 index fell 13.09, or 0.84 percent, to 1,548.71, and the Nasdaq composite index fell 25.63, or 0.91 percent, to 2,780.05.
Bonds fell following a better-than-expected economic regional economic reading in New York. The yield on the benchmark 10-year Treasury note rose to 4.68 percent from 4.65 percent late Friday. The dollar was mixed against most other major currencies, while gold prices rose.
Light, sweet crude rose to record levels, crossing $85 per barrel for the first time and rising as high as $86.22 in trading. Oil settled up $2.44 at $86.13 per barrel on the New York Mercantile Exchange as after the Organization of Petroleum Exporting Countries said crude production by countries that aren’t OPEC members is probably falling despite rising demand.
The week’s economic calendar is light, putting more of the focus on quarterly results. On Monday, the New York Empire State Index — a regional economic indicator published by the Federal Reserve Bank of New York — came in better than expected for October. The index rose to 28.75 from September’s 14.70.
Investors are keeping tabs on corporate and economic data as they try to determine how well corporate profits will fare.
“All those guys are tempering their expectations because the economy is slowing,” said Thomas Nyheim, vice president and portfolio manager at Christiana Bank & Trust Co., referring to Wall Street’s estimation for moderate growth in third-quarter profits.
The concerns over soured loans drew comments from Treasury Secretary Henry Paulson, who said in a speech Monday that the troubles with SIVs might require regulators to step in to stave off future problems, according to Dow Jones Newswires.
Wall Street’s unease Monday follows a period of calm after worries about the credit markets roiled markets around the world over the summer. During August and into September, investors were concerned that mortgages made to borrowers with poor credit that had been bundled together and sold off as investments would resurface and cause widespread losses. Indeed, some hedge funds and other investment vehicles worldwide that held subprime debt succumbed to the soured loans. It wasn’t until the Fed stepped in with reductions in short-term interest rates and the rates it charges to loan to banks that the credit markets began to show signs of recovery.
Citigroup fell $1.63, or 3.4 percent, to $46.24 after the bank raised its loan-loss provisions by $2.24 billion — a higher amount than it estimated a week ago — amid expectations of further deterioration in consumer credit. The bank also said it would delay repurchases of its shares.
Medtronic Inc. fell $6.33, or 11 percent, to $50 after the company said it suspended sales of its Sprint Fidelis defibrillation leads because of risk they could break.
Biogen Idec Inc. jumped $13.08, or 19 percent, to $82.51 after the company said it may sell itself and that it has drawn interest from potential buyers.
Declining issues outnumbered advancers by about 8 to 3 on the New York Stock Exchange, where volume came to 1.29 billion shares compared with 1.06 billion shares traded Friday.
The Russell 2000 index of smaller companies fell 11.81, or 1.40 percent, to 829.36.
credited by: www.msnbc.msn.com
NEW YORK - Stocks pulled back sharply Monday as news that major U.S. banks will set up a fund to help bail out the credit markets stirred concerns about bad debt and as oil prices surged to $86 per barrel for the first time. The Dow Jones industrial average lost more than 100 points.
The stock market’s pullback comes not only amid concerns about debt and rising energy costs but as investors await third-quarter reports due this week from more than 80 components of the Standard & Poor’s 500 index.
The concerns about banking came after Citigroup Inc., the biggest U.S. bank, reported that third-quarter results fell 57 percent. The company said it lost more than $3 billion in mortgage-backed security losses, leveraged debt write-downs and fixed-income trading losses.
The bank — along with JPMorgan Chase & Co. and Bank of America Corp. — announced the creation of a fund used to help revive the asset-backed commercial paper market. The fund will buy assets from structured investment vehicles, also known as SIVs, which buy corporate bonds and subprime mortgage debt. The bailout was orchestrated by the Treasury Department to avoid a fire sale in the market.
“It’s a reminder that this problem never was entirely put to bed. There may be financial institutions out there than are in more trouble than we thought they were,” said Aaron Gurwitz, co-head of portfolio strategy at Lehman Brothers Investment Management, referring to concerns about bad debt. He also noted that Monday’s session wasn’t unusual given the back-and-forth moves in the major indexes in recent sessions.
According to preliminary calculations, the Dow fell 108.28, or 0.77 percent, to 13,984.80.
Broader stock indicators also declined. The S&P 500 index fell 13.09, or 0.84 percent, to 1,548.71, and the Nasdaq composite index fell 25.63, or 0.91 percent, to 2,780.05.
Bonds fell following a better-than-expected economic regional economic reading in New York. The yield on the benchmark 10-year Treasury note rose to 4.68 percent from 4.65 percent late Friday. The dollar was mixed against most other major currencies, while gold prices rose.
Light, sweet crude rose to record levels, crossing $85 per barrel for the first time and rising as high as $86.22 in trading. Oil settled up $2.44 at $86.13 per barrel on the New York Mercantile Exchange as after the Organization of Petroleum Exporting Countries said crude production by countries that aren’t OPEC members is probably falling despite rising demand.
The week’s economic calendar is light, putting more of the focus on quarterly results. On Monday, the New York Empire State Index — a regional economic indicator published by the Federal Reserve Bank of New York — came in better than expected for October. The index rose to 28.75 from September’s 14.70.
Investors are keeping tabs on corporate and economic data as they try to determine how well corporate profits will fare.
“All those guys are tempering their expectations because the economy is slowing,” said Thomas Nyheim, vice president and portfolio manager at Christiana Bank & Trust Co., referring to Wall Street’s estimation for moderate growth in third-quarter profits.
The concerns over soured loans drew comments from Treasury Secretary Henry Paulson, who said in a speech Monday that the troubles with SIVs might require regulators to step in to stave off future problems, according to Dow Jones Newswires.
Wall Street’s unease Monday follows a period of calm after worries about the credit markets roiled markets around the world over the summer. During August and into September, investors were concerned that mortgages made to borrowers with poor credit that had been bundled together and sold off as investments would resurface and cause widespread losses. Indeed, some hedge funds and other investment vehicles worldwide that held subprime debt succumbed to the soured loans. It wasn’t until the Fed stepped in with reductions in short-term interest rates and the rates it charges to loan to banks that the credit markets began to show signs of recovery.
Citigroup fell $1.63, or 3.4 percent, to $46.24 after the bank raised its loan-loss provisions by $2.24 billion — a higher amount than it estimated a week ago — amid expectations of further deterioration in consumer credit. The bank also said it would delay repurchases of its shares.
Medtronic Inc. fell $6.33, or 11 percent, to $50 after the company said it suspended sales of its Sprint Fidelis defibrillation leads because of risk they could break.
Biogen Idec Inc. jumped $13.08, or 19 percent, to $82.51 after the company said it may sell itself and that it has drawn interest from potential buyers.
Declining issues outnumbered advancers by about 8 to 3 on the New York Stock Exchange, where volume came to 1.29 billion shares compared with 1.06 billion shares traded Friday.
The Russell 2000 index of smaller companies fell 11.81, or 1.40 percent, to 829.36.
credited by: www.msnbc.msn.com
Home prices post steepest drop in 16 years
The decline is accelerating, with prices falling faster in every month since the start of the year.
By MSN Money staff with wire reports
The housing market just got even uglier.
A decline in U.S. housing prices in July was the steepest drop in 16 years, according to the nationwide S&P/Case-Shiller home price index released this morning.
The downturn in the U.S. housing market has been blamed for creating turbulence in international money markets and has kindled domestic concerns about a possible recession. Federal Reserve policymakers cut short-term interest rates by half a percentage point last week in an effort to bolster economic growth.
Home prices were lower in 15 of 20 metropolitan areas, the report showed. A subindex of 10 metropolitan areas fell 4.5% in July, the biggest drop since July 1991. The largest declines over the past year were in Detroit; Tampa, Fla.; and San Diego. Seattle and Charlotte, N.C., had the biggest increases.
Home prices have fallen by more every month since the beginning of the year.
David Blitzer, the chairman of the Standard & Poor's index committee, said the big declines may be done by the end of the year.
"Maybe the first stage is steep declines, and we're just about done with those," he said. "The second stage is not much gain, not much loss. The rest of the economy has to catch up to home prices."
Yale economist Robert Shiller, who helped create the indexes, said in a statement, "The further deceleration in prices is still apparent across the majority of regions." Shiller is also MacroMarkets' chief economist and perhaps is best known for predicting the dot-com bust.
Shiller told lawmakers in written comments last week that the loss of a boom mentality among consumers poses a "significant risk" of a recession within the next year.
credite by: msn.com
By MSN Money staff with wire reports
The housing market just got even uglier.
A decline in U.S. housing prices in July was the steepest drop in 16 years, according to the nationwide S&P/Case-Shiller home price index released this morning.
The downturn in the U.S. housing market has been blamed for creating turbulence in international money markets and has kindled domestic concerns about a possible recession. Federal Reserve policymakers cut short-term interest rates by half a percentage point last week in an effort to bolster economic growth.
Home prices were lower in 15 of 20 metropolitan areas, the report showed. A subindex of 10 metropolitan areas fell 4.5% in July, the biggest drop since July 1991. The largest declines over the past year were in Detroit; Tampa, Fla.; and San Diego. Seattle and Charlotte, N.C., had the biggest increases.
Home prices have fallen by more every month since the beginning of the year.
David Blitzer, the chairman of the Standard & Poor's index committee, said the big declines may be done by the end of the year.
"Maybe the first stage is steep declines, and we're just about done with those," he said. "The second stage is not much gain, not much loss. The rest of the economy has to catch up to home prices."
Yale economist Robert Shiller, who helped create the indexes, said in a statement, "The further deceleration in prices is still apparent across the majority of regions." Shiller is also MacroMarkets' chief economist and perhaps is best known for predicting the dot-com bust.
Shiller told lawmakers in written comments last week that the loss of a boom mentality among consumers poses a "significant risk" of a recession within the next year.
credite by: msn.com
Marcial: This Market Rally Has Legs
The stock market is far smarter than a lot of people think. When the Dow Jones industrial average surged to finish the third quarter with a 487-point gain, or 3.6%, to 13,895.63 -- and then went even higher -- many market watchers and media pundits were in total disbelief. They could attribute it only to what they described as a disconnect between economic reality and the market's optimism. Remember, however, the market has "fooled" a lot of people a lot of times, in both directions. It was just another of those times when the market, for reasons that admittedly are often hard to fathom, decided it liked what it saw ahead, beyond what most people observed.
There is a lot more to this market's advance than some may realize. And be prepared to ride with this rally, allowing for some speed bumps along the way, for the next 6 to 12 months. Some fearless forecasters predict that the Dow will streak to 16,000 and that the Standard & Poor's 500-stock index will go to 1,700 over the next 6 to 12 months. I agree with that forecast. Why? Let me be brief: It's the global economic boom.
The Market Is Over It Already
I'll give you a longer explanation. Through all the turbulence it has endured -- including the deep drop last summer resulting from the credit crisis -- the market returned with renewed vigor on Oct. 9 to score yet another record high. The Dow vaulted 120.8 points, or 0.9%, to 14,164.53 -- its 34th record close in 2007 and the 56th since the start of October, 2006. The S&P advanced nearly 1%, to 1,565.15, and the NASDAQ composite index jumped 0.6%, to 2,803.91.
The media attributed the gains to the Federal Reserve's nonincendiary comments at its Sept. 18 meeting that suggested the U.S. economy wasn't heading toward a recession. The decision by the Fed to cut interest rates in September was based on concerns that the credit turmoil could lead to slower growth at this time of extreme uncertainty. Such a conclusion was gleaned from recent Fed minutes, which also showed that the Fed members avoided language that could have suggested the U.S. economy will contract, as opposed to what some economists have been predicting.
But that was the excuse for the day. The real reason behind the market's continued rally, punctuated by some downswings, stems from its important role as a leading economic indicator. As such, the market has digested and moved beyond what many observers are now focusing on.
There is the disturbing plunge in home sales that has severely pulled down prices; fear that the credit crunch is not yet concluded, as major banks and financial houses are being crimped by huge losses and write-downs because of their involvement in the subprime mortgage mess. And there's more: skyrocketing crude oil prices; softening retail sales and slumping consumer confidence; weak industrial production and manufacturing activity; slowed durable-goods orders; and weakening corporate profits. And there's former Fed chieftain Alan Greenspan warning that the chances of a recession have increased. Of course, there is also the protracted war in Iraq, which is draining hundreds of billions of dollars from the national coffers. That's one big bundle of serious concerns.
No Classic Signs of a Recession
So what's there to be optimistic about, and what's the market suggesting? The market has factored in such fears and concerns early on -- and may do some further readjusting along the way. In the meantime, the market seems able to argue that the worldwide economic expansion is riding high and will benefit not only overseas markets but also U.S. companies that are broadly exposed to foreign markets' growing consumption of goods and services. It is true that the U.S. economy isn't in good fighting shape. But whereas the big worry not too long ago was inflation, now the concern has shifted to the possibility of a recession. Yet here's the good news: The traditional markers of a recession, including a fall in commodity prices, rising unemployment, and unemployment insurance claims, are nowhere to be found. And the subprime problem and its ramifications shouldn't lead to a recession, according to some market watchers.
"The stress in the housing sector alone will not trigger a recession," argues Stanley Nabi, vice-chairman of Silvercrest Asset Management Group in New York. The U.S. economy, he adds, will continue to draw strength from government outlays, capital spending, and increasing exports. An additional and major fillip is the Fed's stance of remaining "friendly," at least until 2008, in terms of managing the direction of interest rates, says Nabi. In sum, the stock market, predicts Nabi, will continue to "plod along irregularly higher even in the face of sluggish growth in the U.S. economy."
Ed Yardeni, president and chief executive officer of Yardeni Research, who has written often about the major economic problems, says he isn't concerned. What could be an issue, he says, is the question of whether the stock market will be able to continue rising into record territory if the financial and transportation groups languish. Financial and transportation, he notes, together account for 28% and 21.8% of the S&P 500's earnings and market-cap shares, respectively. The only way the market can continue advancing, says Yardeni, is if industries and stocks that benefit from the global boom continue to gain earnings and market-cap shares in the S"P 500. "It assumes that the global boom will continue, as I expect," says Yardeni.
Worldwide Growth Stays Strong
With respect to the worldwide economic boom, international experts suggest that the strong pace of growth is continuing. Basically, the robust global economic growth we are witnessing -- from China, India, and Latin America to Europe -- remains intact in spite of the repercussions of the subprime crisis, says Stephen Leeb, president and chief investment officer at Leeb Capital Management, which invests heavily in both U.S. and foreign stocks.
Leeb notes that the International Monetary Fund in a recent report said that its 5% gross world product [GWP] growth forecast through 2008 hasn't been impaired by the credit crisis. The biggest impact of the global boom, says Leeb, is on U.S. companies with investments in foreign markets that aren't yet richly valued. Companies with footprints in the developed economies overseas will be the next batch of growth stocks, he says. This is one major reason why the U.S. stock market and bourses in other parts of the world will continue to rise significantly. Leeb believes the Dow will hit 16,000 in a year and the S&P should rocket to 1,700.
In the U.S. market, the big-cap stocks with vast foreign exposure such as Coca-Cola (KO), Johnson & Johnson (JNJ), Schlumberger (SLB), Boeing (BA), ExxonMobil (XOM), General Electric (GE), and American Express (AXP) will be the big winners over the next few years as the global economic expansion continues, Leeb predicts.
Strategies for Investors
On the other hand, U.S. companies that are mainly dependent on the U.S. economy for their growth will suffer. Retailers, for instance, are among those facing growth difficulties. Another group to avoid, says Leeb: Chinese stocks, including the major companies that trade in the U.S., such as PetroChina (PTR). The sharp rise of stocks in China's stock market is a concern and could affect even the Chinese stocks that trade in the U.S., should the bubble burst in that country.
Sam Stovall, chief investment strategist at Standard & Poor's, recommends investors overweight their portfolios in energy and information technology stocks because he believes they will benefit from above-average earnings growth prospects and international revenue exposure. Consumer discretionary stocks, however, should underperform, he says, as a result of the deteriorating economic environment, continued housing weakness, and high relative valuations. What's Stovall's forecast for the S&P 500? He says S&P's equity analysts, using their 12-month target prices for the companies in the S&P 500 index, project the U.S. large-cap benchmark to advance nearly 12% by the end of September, 2008, near the 1,700 level. [S&P, like BusinessWeek, is a unit of the McGraw-Hill Companies (MHP).]
To ardent market watchers, Oct. 10 is a milestone marking the bull market's fifth birthday. On Oct. 9, 2002, the S&P 500 index closed at a low of 776.76. That ended the bear market, which started on Mar. 24, 2000, that had eliminated 49% of the market's value. Will it crash by the end of its sixth year in 2008? The good news, notes Yardeni, is that while sentiment indicators have turned more bullish, the headlines warn about the soaring stock market amid dark economic news. It could all burst again. As an old Wall Street adage says, a bull market climbs a wall of worries. To that I would add another: Buy on bad news and sell on good news.
credited by: BusinessWeek.com
There is a lot more to this market's advance than some may realize. And be prepared to ride with this rally, allowing for some speed bumps along the way, for the next 6 to 12 months. Some fearless forecasters predict that the Dow will streak to 16,000 and that the Standard & Poor's 500-stock index will go to 1,700 over the next 6 to 12 months. I agree with that forecast. Why? Let me be brief: It's the global economic boom.
The Market Is Over It Already
I'll give you a longer explanation. Through all the turbulence it has endured -- including the deep drop last summer resulting from the credit crisis -- the market returned with renewed vigor on Oct. 9 to score yet another record high. The Dow vaulted 120.8 points, or 0.9%, to 14,164.53 -- its 34th record close in 2007 and the 56th since the start of October, 2006. The S&P advanced nearly 1%, to 1,565.15, and the NASDAQ composite index jumped 0.6%, to 2,803.91.
The media attributed the gains to the Federal Reserve's nonincendiary comments at its Sept. 18 meeting that suggested the U.S. economy wasn't heading toward a recession. The decision by the Fed to cut interest rates in September was based on concerns that the credit turmoil could lead to slower growth at this time of extreme uncertainty. Such a conclusion was gleaned from recent Fed minutes, which also showed that the Fed members avoided language that could have suggested the U.S. economy will contract, as opposed to what some economists have been predicting.
But that was the excuse for the day. The real reason behind the market's continued rally, punctuated by some downswings, stems from its important role as a leading economic indicator. As such, the market has digested and moved beyond what many observers are now focusing on.
There is the disturbing plunge in home sales that has severely pulled down prices; fear that the credit crunch is not yet concluded, as major banks and financial houses are being crimped by huge losses and write-downs because of their involvement in the subprime mortgage mess. And there's more: skyrocketing crude oil prices; softening retail sales and slumping consumer confidence; weak industrial production and manufacturing activity; slowed durable-goods orders; and weakening corporate profits. And there's former Fed chieftain Alan Greenspan warning that the chances of a recession have increased. Of course, there is also the protracted war in Iraq, which is draining hundreds of billions of dollars from the national coffers. That's one big bundle of serious concerns.
No Classic Signs of a Recession
So what's there to be optimistic about, and what's the market suggesting? The market has factored in such fears and concerns early on -- and may do some further readjusting along the way. In the meantime, the market seems able to argue that the worldwide economic expansion is riding high and will benefit not only overseas markets but also U.S. companies that are broadly exposed to foreign markets' growing consumption of goods and services. It is true that the U.S. economy isn't in good fighting shape. But whereas the big worry not too long ago was inflation, now the concern has shifted to the possibility of a recession. Yet here's the good news: The traditional markers of a recession, including a fall in commodity prices, rising unemployment, and unemployment insurance claims, are nowhere to be found. And the subprime problem and its ramifications shouldn't lead to a recession, according to some market watchers.
"The stress in the housing sector alone will not trigger a recession," argues Stanley Nabi, vice-chairman of Silvercrest Asset Management Group in New York. The U.S. economy, he adds, will continue to draw strength from government outlays, capital spending, and increasing exports. An additional and major fillip is the Fed's stance of remaining "friendly," at least until 2008, in terms of managing the direction of interest rates, says Nabi. In sum, the stock market, predicts Nabi, will continue to "plod along irregularly higher even in the face of sluggish growth in the U.S. economy."
Ed Yardeni, president and chief executive officer of Yardeni Research, who has written often about the major economic problems, says he isn't concerned. What could be an issue, he says, is the question of whether the stock market will be able to continue rising into record territory if the financial and transportation groups languish. Financial and transportation, he notes, together account for 28% and 21.8% of the S&P 500's earnings and market-cap shares, respectively. The only way the market can continue advancing, says Yardeni, is if industries and stocks that benefit from the global boom continue to gain earnings and market-cap shares in the S"P 500. "It assumes that the global boom will continue, as I expect," says Yardeni.
Worldwide Growth Stays Strong
With respect to the worldwide economic boom, international experts suggest that the strong pace of growth is continuing. Basically, the robust global economic growth we are witnessing -- from China, India, and Latin America to Europe -- remains intact in spite of the repercussions of the subprime crisis, says Stephen Leeb, president and chief investment officer at Leeb Capital Management, which invests heavily in both U.S. and foreign stocks.
Leeb notes that the International Monetary Fund in a recent report said that its 5% gross world product [GWP] growth forecast through 2008 hasn't been impaired by the credit crisis. The biggest impact of the global boom, says Leeb, is on U.S. companies with investments in foreign markets that aren't yet richly valued. Companies with footprints in the developed economies overseas will be the next batch of growth stocks, he says. This is one major reason why the U.S. stock market and bourses in other parts of the world will continue to rise significantly. Leeb believes the Dow will hit 16,000 in a year and the S&P should rocket to 1,700.
In the U.S. market, the big-cap stocks with vast foreign exposure such as Coca-Cola (KO), Johnson & Johnson (JNJ), Schlumberger (SLB), Boeing (BA), ExxonMobil (XOM), General Electric (GE), and American Express (AXP) will be the big winners over the next few years as the global economic expansion continues, Leeb predicts.
Strategies for Investors
On the other hand, U.S. companies that are mainly dependent on the U.S. economy for their growth will suffer. Retailers, for instance, are among those facing growth difficulties. Another group to avoid, says Leeb: Chinese stocks, including the major companies that trade in the U.S., such as PetroChina (PTR). The sharp rise of stocks in China's stock market is a concern and could affect even the Chinese stocks that trade in the U.S., should the bubble burst in that country.
Sam Stovall, chief investment strategist at Standard & Poor's, recommends investors overweight their portfolios in energy and information technology stocks because he believes they will benefit from above-average earnings growth prospects and international revenue exposure. Consumer discretionary stocks, however, should underperform, he says, as a result of the deteriorating economic environment, continued housing weakness, and high relative valuations. What's Stovall's forecast for the S&P 500? He says S&P's equity analysts, using their 12-month target prices for the companies in the S&P 500 index, project the U.S. large-cap benchmark to advance nearly 12% by the end of September, 2008, near the 1,700 level. [S&P, like BusinessWeek, is a unit of the McGraw-Hill Companies (MHP).]
To ardent market watchers, Oct. 10 is a milestone marking the bull market's fifth birthday. On Oct. 9, 2002, the S&P 500 index closed at a low of 776.76. That ended the bear market, which started on Mar. 24, 2000, that had eliminated 49% of the market's value. Will it crash by the end of its sixth year in 2008? The good news, notes Yardeni, is that while sentiment indicators have turned more bullish, the headlines warn about the soaring stock market amid dark economic news. It could all burst again. As an old Wall Street adage says, a bull market climbs a wall of worries. To that I would add another: Buy on bad news and sell on good news.
credited by: BusinessWeek.com
The G7 Will Get an Earful About the Euro
Exchange rates are once again a primary focus in Europe, as the euro has risen to all-time highs vs. the dollar -- recently above US$1.40 -- and shows no signs of reversing anytime soon. Most finance officials have put on a brave face, but it is clear that there is growing concern that the strengthening euro will curtail European growth prospects.
Thus far there is no sign that the European Central Bank [ECB] is considering rate cuts to stem the currency's rise, despite political pressure from France. Coordinated intervention among major economic powers to drive down the currency's value does not seem to be on the agenda either, and it is clear that unilateral intervention in currency markets by the ECB has little chance of success. Nonetheless, central bankers and politicians in the euro zone -- the 12 nations that share the euro as their common currency -- will push for some form of verbal intervention and a joint statement at the meeting of the Group of Seven [G7] industrialized nations next week.
The euro has appreciated 8.1% vs. the dollar in the first nine months of the year, after already rising 8.2% in 2006. On a trade-weighted basis, the appreciation looks somewhat less dramatic, as the nominal trade-weighted index [TWI] rose just 3.7% year-over-year in September. Nevertheless, the TWI is also at the highest level since the start of European Monetary Union.
A stronger euro undermines the competitiveness of euro zone goods on international markets and could affect foreign demand, which has been a supporting factor for growth in the region. So far, low wage growth and larger productivity gains have cloaked the impact of the real exchange rate appreciation. Also, world growth has been robust, which helped to offset the impact of the stronger currency.
Euro Strength and World Growth
But while some companies have sufficient margins to tide them over in a period of extended euro strength, it is clear that many will come under pressure. Indeed, while European companies have, for a long time, remained relatively relaxed about the euro's rise, they are now increasingly voicing concern. The German exporters' federation, BGA, has cut its export forecast for next year on the back of the currency appreciation.
This is likely due both to the stronger currency as well as a potential slowing in Europe's major trading partners. In general, world growth is more important for export demand than the exchange rate. According to the European Union [EU] commission, a 10% drop in world demand cuts euro zone exports by 8%. And the fallout from the U.S. subprime crisis will have an impact on U.S. growth that could hit other major economies as well.
On Oct. 9 the International Monetary Fund [IMF] posted surprisingly large reductions in its 2008 growth forecast for major economies as a reaction to financial market turmoil. U.S. growth is now seen at just 1.9%, compared with 2.8% expected previously. And the forecast for world growth has been cut to 4.8% from 5.2%. Yet this is still relatively robust growth and, assuming the commission's estimate of the correlation between world growth and exports is symmetric, the positive impact from still-strong world growth would far outweigh even the impact of a 10% euro appreciation. So far, surveys suggest that confidence about the future for exports has peaked, but remains relatively strong.
Furthermore, a stronger euro also means lower import prices, which ultimately will have a downward effect on consumer price inflation. The stronger euro has helped to dampen the impact of a renewed rise in oil prices. Ultimately, the prolonged euro appreciation will improve purchasing power and may strengthen domestic demand.
Rate Hikes Or Cuts?
To the extent that the stronger euro has a positive impact on the medium-term inflation outlook, it also affects ECB policy. Earlier in the year, the ECB would clearly have preferred a tightening of monetary conditions via interest rate hikes rather than through the exchange rate channel. However, in the current situation of fragile growth and increased uncertainty about the growth outlook, a rate hike is increasingly difficult to sell and could further weigh on business sentiment. So for now, some tightening of monetary conditions from the exchange rate movement may indeed be welcome to dampen medium-term inflation risks.
This may help to explain why ECB officials have so far remained calm regarding the euro's strength. And with the exception of French President Nicolas Sarkozy, most politicians have also remained optimistic. Politicians continue to say that they prefer a strong euro to a weak currency. Nevertheless, it is clear that concern is creeping in, and with the euro appreciating further vs. the dollar there may be more support for Sarkozy's calls on the ECB to react to the strength of the currency. What options does the central bank have to stem the euro's rise?
Sarkozy has suggested the ECB may follow the Fed and cut rates to prevent currency appreciation. However, while the ECB seems to have shelved the next rate hike for now, it continues to stress that there are upside risks to price stability. ECB policy maintains a tightening bias, and overall growth would have to deteriorate further before the ECB will consider a rate cut. In the central scenario of slowing but still relatively robust growth, a rate hike remains much more likely.
Divine Intervention
The only alternative is intervention in currency markets. Currency management in the euro zone is split between politicians, who can issue general guidelines or enter global currency agreements, and the ECB, which is in charge of day-to-day management and interventions. Former ECB President Wim Duisenberg famously called himself "Mr. Euro," and the bank's current chief, Jean-Claude Trichet, has also stressed that he has the last word on exchange rates. So Sarkozy has little influence on this, and the ECB is not considering such an option.
In any case, it is clear that unilateral intervention has little chance of success, and even coordinated intervention is problematic if exchange rate movements are indeed driven by fundamentals. The fact is that euro zone growth has outstripped annual growth in Japan over the past year. And the IMF now expects 2007 euro zone growth to be stronger than U.S. growth as well. It is not surprising then that an ECB official said this week that coordinated intervention may not work.
What remains is verbal intervention and exercises in damage limitation. Officials have started to repeat the familiar G7 line that "excess volatility" in exchange markets is undesirable, and that exchange rates should reflect fundamentals. Officials will want to prevent a rapid overshooting of the currency, which does not give exporters time to adjust to a stronger currency. The ECB has also indicated that it will discuss the currency at the G7 meeting next week.
What Trichet will likely want to see is a public message to markets that the U.S. is interested in a strong currency and will not passively encourage an ongoing rapid depreciation of the dollar. The ECB will also look for allies in its attempt to persuade Asian countries to take more of a share in the ongoing dollar depreciation that is mostly driven by the large U.S. current account deficits -- largely with Asia -- that still leaves the dollar a generally overvalued currency. However, China has continued to indicate resistance to more than a gradual pace of yuan appreciation.
All in all, we are likely to see a currency statement at next week's G7 meeting that will once again stress that "excess volatility" is undesirable, and that exchange rates should reflect fundamentals, while calling for increased flexibility for Asian foreign exchange markets. Any reference to the desire for a stronger U.S. dollar is unlikely, however, given the fundamental driver of the large U.S. current account deficit. And in the unlikely event that the ECB was seeking support for intervention to cool the euro's strength, it is unlikely that Japan or the U.S. would be interested in coordinated action at the moment.
credited by: BusinessWeek.com
Thus far there is no sign that the European Central Bank [ECB] is considering rate cuts to stem the currency's rise, despite political pressure from France. Coordinated intervention among major economic powers to drive down the currency's value does not seem to be on the agenda either, and it is clear that unilateral intervention in currency markets by the ECB has little chance of success. Nonetheless, central bankers and politicians in the euro zone -- the 12 nations that share the euro as their common currency -- will push for some form of verbal intervention and a joint statement at the meeting of the Group of Seven [G7] industrialized nations next week.
The euro has appreciated 8.1% vs. the dollar in the first nine months of the year, after already rising 8.2% in 2006. On a trade-weighted basis, the appreciation looks somewhat less dramatic, as the nominal trade-weighted index [TWI] rose just 3.7% year-over-year in September. Nevertheless, the TWI is also at the highest level since the start of European Monetary Union.
A stronger euro undermines the competitiveness of euro zone goods on international markets and could affect foreign demand, which has been a supporting factor for growth in the region. So far, low wage growth and larger productivity gains have cloaked the impact of the real exchange rate appreciation. Also, world growth has been robust, which helped to offset the impact of the stronger currency.
Euro Strength and World Growth
But while some companies have sufficient margins to tide them over in a period of extended euro strength, it is clear that many will come under pressure. Indeed, while European companies have, for a long time, remained relatively relaxed about the euro's rise, they are now increasingly voicing concern. The German exporters' federation, BGA, has cut its export forecast for next year on the back of the currency appreciation.
This is likely due both to the stronger currency as well as a potential slowing in Europe's major trading partners. In general, world growth is more important for export demand than the exchange rate. According to the European Union [EU] commission, a 10% drop in world demand cuts euro zone exports by 8%. And the fallout from the U.S. subprime crisis will have an impact on U.S. growth that could hit other major economies as well.
On Oct. 9 the International Monetary Fund [IMF] posted surprisingly large reductions in its 2008 growth forecast for major economies as a reaction to financial market turmoil. U.S. growth is now seen at just 1.9%, compared with 2.8% expected previously. And the forecast for world growth has been cut to 4.8% from 5.2%. Yet this is still relatively robust growth and, assuming the commission's estimate of the correlation between world growth and exports is symmetric, the positive impact from still-strong world growth would far outweigh even the impact of a 10% euro appreciation. So far, surveys suggest that confidence about the future for exports has peaked, but remains relatively strong.
Furthermore, a stronger euro also means lower import prices, which ultimately will have a downward effect on consumer price inflation. The stronger euro has helped to dampen the impact of a renewed rise in oil prices. Ultimately, the prolonged euro appreciation will improve purchasing power and may strengthen domestic demand.
Rate Hikes Or Cuts?
To the extent that the stronger euro has a positive impact on the medium-term inflation outlook, it also affects ECB policy. Earlier in the year, the ECB would clearly have preferred a tightening of monetary conditions via interest rate hikes rather than through the exchange rate channel. However, in the current situation of fragile growth and increased uncertainty about the growth outlook, a rate hike is increasingly difficult to sell and could further weigh on business sentiment. So for now, some tightening of monetary conditions from the exchange rate movement may indeed be welcome to dampen medium-term inflation risks.
This may help to explain why ECB officials have so far remained calm regarding the euro's strength. And with the exception of French President Nicolas Sarkozy, most politicians have also remained optimistic. Politicians continue to say that they prefer a strong euro to a weak currency. Nevertheless, it is clear that concern is creeping in, and with the euro appreciating further vs. the dollar there may be more support for Sarkozy's calls on the ECB to react to the strength of the currency. What options does the central bank have to stem the euro's rise?
Sarkozy has suggested the ECB may follow the Fed and cut rates to prevent currency appreciation. However, while the ECB seems to have shelved the next rate hike for now, it continues to stress that there are upside risks to price stability. ECB policy maintains a tightening bias, and overall growth would have to deteriorate further before the ECB will consider a rate cut. In the central scenario of slowing but still relatively robust growth, a rate hike remains much more likely.
Divine Intervention
The only alternative is intervention in currency markets. Currency management in the euro zone is split between politicians, who can issue general guidelines or enter global currency agreements, and the ECB, which is in charge of day-to-day management and interventions. Former ECB President Wim Duisenberg famously called himself "Mr. Euro," and the bank's current chief, Jean-Claude Trichet, has also stressed that he has the last word on exchange rates. So Sarkozy has little influence on this, and the ECB is not considering such an option.
In any case, it is clear that unilateral intervention has little chance of success, and even coordinated intervention is problematic if exchange rate movements are indeed driven by fundamentals. The fact is that euro zone growth has outstripped annual growth in Japan over the past year. And the IMF now expects 2007 euro zone growth to be stronger than U.S. growth as well. It is not surprising then that an ECB official said this week that coordinated intervention may not work.
What remains is verbal intervention and exercises in damage limitation. Officials have started to repeat the familiar G7 line that "excess volatility" in exchange markets is undesirable, and that exchange rates should reflect fundamentals. Officials will want to prevent a rapid overshooting of the currency, which does not give exporters time to adjust to a stronger currency. The ECB has also indicated that it will discuss the currency at the G7 meeting next week.
What Trichet will likely want to see is a public message to markets that the U.S. is interested in a strong currency and will not passively encourage an ongoing rapid depreciation of the dollar. The ECB will also look for allies in its attempt to persuade Asian countries to take more of a share in the ongoing dollar depreciation that is mostly driven by the large U.S. current account deficits -- largely with Asia -- that still leaves the dollar a generally overvalued currency. However, China has continued to indicate resistance to more than a gradual pace of yuan appreciation.
All in all, we are likely to see a currency statement at next week's G7 meeting that will once again stress that "excess volatility" is undesirable, and that exchange rates should reflect fundamentals, while calling for increased flexibility for Asian foreign exchange markets. Any reference to the desire for a stronger U.S. dollar is unlikely, however, given the fundamental driver of the large U.S. current account deficit. And in the unlikely event that the ECB was seeking support for intervention to cool the euro's strength, it is unlikely that Japan or the U.S. would be interested in coordinated action at the moment.
credited by: BusinessWeek.com
Sizing Up the Next Crash
The following is an excerpt from the author's October, 2007 report, The Next Crash.
Wall Street and Main Street will remember and chronicle the 1990s for a variety of reasons: the emergence of the Internet, the dot.com boom and bubble, excessive valuations, and eventually a bear market. It was also a time of reform, as new rules, regulations, and practices led to what we might term the deregulation of financial services.
Somewhat like what had happened in telecommunications and the airlines, the landscape emerged far different than what had existed. Our focus and interest is on the equity markets, but the revolution on Wall Street has affected other markets as they became significantly larger, expanded their products, and introduced new measures and techniques. The new measures include: Regulation FD; Sarbanes Oxley; decimalization; extended trading hours, crossing networks; electronic, online trading; and ETFs and other instruments.
These measures were undertaken under the guise of protecting the individual investor from biased or prejudiced research, unsavory operators, scrupulous corporate officers, and accountants whose alleged objective was not to conform to "standard accounting practices" but rather to "what do you want it to be?" We were concerned at the time of their introduction that many of the proposals and measures were political, expedient reactions to real, but isolated or limited problems or circumstances.
Disenfranchising the Average
Our concern today is two-fold. First, the markets of the first decade of the 21st century are prone to systemic failure as a result of technological innovations and utilization, rapid growth of sophisticated, but not necessarily vetted, instruments, and other changes in the wide world of finance. We will readily note that this is not solely a function of Wall Street, but also reflects the quickened pace of the overall environment, lower cost of technology in all its forms, the continuing demise of the manufacturing/operating economy to one of finance and service, and so forth.
Secondly, we believe that the various structural reforms of the 1990s have not achieved the desired effect with regard to the individual and have in fact disenfranchised, even more so than before, the individual who might work 50 hours a week, have 2.5 children, and cut his lawn on weekends. Instead they have provided the affluent and institutional investor with even more of an opportunity to enrich himself.
On the first point, we're concerned about the large number of system failures and computer glitches that appear to receive little or cursory attention. For example, on Feb. 27, 2007, there was a 230-point drop in the Dow Jones industrial average because of "an error in the calculation." Again, on July 26, 2007, the Dow average was not calculated from 2:55 p.m. to 3:08 p.m. Eastern Time because the system was "overloaded." It should be disturbing that these events occur, and the implicit hope that this will not happen during a significant crisis or period of stress is naive.
Derivatives and Other Instruments
We are not alarmists and we are not predicting a market meltdown. Rather we are concerned about the potential for a major disruption, which would then be the subject of analysis, legislative hearings, and finger pointing.
An issue that could lead to another crash is that of derivatives and other instruments. We are admittedly negative about the subject in part because of our experience in 1994. At the end of 1993, our Wall Street Week picks included a put on the Hang Seng Index. The Hang Seng complied with our hopes and declined 30% that year but our put [in the form of a warrant; ETFs were unavailable] also declined 30%.
Derivatives concern us as several examples of seemingly innocuous instruments have had major impacts. The Japanese market, for example, might eventually have declined because of bad loans, inflated real estate, or some other fundamental factor, but the "smoking gun," inflection point, or pin prick, was -- we contend -- the introduction of put warrants, which were a huge success in terms of activity and performance virtually coincident with that market's peak. The warrants, available only offshore, allowed investors to both hedge and take a negative view of that market, which they surely did.
Quality of the Data
Financial futures, derivatives, and ETFs have benefited distributors, consumers, and, in some, but not all, instances, producers. The mortgage-backed, mortgage-related, and CDO issues of June and July, 2007 are other instances of the reality that it is a long way from the laboratory [or design lab] to the market place. As exchanges seek growth and new opportunities, our concern is that their basis or expected results will largely be on past events, which, as we all know in the stock market business, is often unrelated to future ones.
Our concern is that many strategies and packages are based on historical data, relationships, and analysis. Increasingly, we question the depth and quality of the data employed in so doing. For example, in 2004, S&P understated the total return of the S&P 500 by 37 basis points, a fact that S&P was reluctant to acknowledge. And we've found that virtually every story on stock buybacks understates the amount and extent of activity.
We believe that individual investors have not benefited from the various new regulations and products. It was the hope and intention of officials in the 1990s to take away the institutional advantage. We believe that the net effect has made life and investing more difficult and more complex for the individual.
Away From Paternal Corporate Relationships
For one, weighted fund returns, as many have pointed out, lagged average fund returns in the 1990s. From 1990 to the market peak in March, 2000, mutual funds returned 10% on average annually, vs. nearly 18% for the S&P 500 index. When we extend that analysis, we find the situation has not improved. From 1990 to April, 2007, mutual funds have gained 5.16% on average each year, vs. 11.4% for the S&P 500.
One of the discernible trends in American business has been the shift from a paternal corporate relationship to one where the employee is increasingly in charge of his own health and retirement benefits. In the case with retirement, the traditional, defined benefit plan has been replaced or augmented with 401[k]s, IRAs, and self-directed plans. Figures from the FRB report that the average balance for those between 55 and 64 in 401[k] plans is $60,000, far below what they will probably require upon retirement. At a time when financial advice and services are probably more critical than ever, the markets of the day are generally less responsive to individuals.
Stock research is becoming less valuable and visible. And there have been numerous stories questioning whether investors ultimately benefit from ETFs, long-short funds, and other new instruments.
We can proffer no detailed solutions, but investors should recognize the risks -- beginning with the regulatory void.
credited by: BusinessWeek.com
Wall Street and Main Street will remember and chronicle the 1990s for a variety of reasons: the emergence of the Internet, the dot.com boom and bubble, excessive valuations, and eventually a bear market. It was also a time of reform, as new rules, regulations, and practices led to what we might term the deregulation of financial services.
Somewhat like what had happened in telecommunications and the airlines, the landscape emerged far different than what had existed. Our focus and interest is on the equity markets, but the revolution on Wall Street has affected other markets as they became significantly larger, expanded their products, and introduced new measures and techniques. The new measures include: Regulation FD; Sarbanes Oxley; decimalization; extended trading hours, crossing networks; electronic, online trading; and ETFs and other instruments.
These measures were undertaken under the guise of protecting the individual investor from biased or prejudiced research, unsavory operators, scrupulous corporate officers, and accountants whose alleged objective was not to conform to "standard accounting practices" but rather to "what do you want it to be?" We were concerned at the time of their introduction that many of the proposals and measures were political, expedient reactions to real, but isolated or limited problems or circumstances.
Disenfranchising the Average
Our concern today is two-fold. First, the markets of the first decade of the 21st century are prone to systemic failure as a result of technological innovations and utilization, rapid growth of sophisticated, but not necessarily vetted, instruments, and other changes in the wide world of finance. We will readily note that this is not solely a function of Wall Street, but also reflects the quickened pace of the overall environment, lower cost of technology in all its forms, the continuing demise of the manufacturing/operating economy to one of finance and service, and so forth.
Secondly, we believe that the various structural reforms of the 1990s have not achieved the desired effect with regard to the individual and have in fact disenfranchised, even more so than before, the individual who might work 50 hours a week, have 2.5 children, and cut his lawn on weekends. Instead they have provided the affluent and institutional investor with even more of an opportunity to enrich himself.
On the first point, we're concerned about the large number of system failures and computer glitches that appear to receive little or cursory attention. For example, on Feb. 27, 2007, there was a 230-point drop in the Dow Jones industrial average because of "an error in the calculation." Again, on July 26, 2007, the Dow average was not calculated from 2:55 p.m. to 3:08 p.m. Eastern Time because the system was "overloaded." It should be disturbing that these events occur, and the implicit hope that this will not happen during a significant crisis or period of stress is naive.
Derivatives and Other Instruments
We are not alarmists and we are not predicting a market meltdown. Rather we are concerned about the potential for a major disruption, which would then be the subject of analysis, legislative hearings, and finger pointing.
An issue that could lead to another crash is that of derivatives and other instruments. We are admittedly negative about the subject in part because of our experience in 1994. At the end of 1993, our Wall Street Week picks included a put on the Hang Seng Index. The Hang Seng complied with our hopes and declined 30% that year but our put [in the form of a warrant; ETFs were unavailable] also declined 30%.
Derivatives concern us as several examples of seemingly innocuous instruments have had major impacts. The Japanese market, for example, might eventually have declined because of bad loans, inflated real estate, or some other fundamental factor, but the "smoking gun," inflection point, or pin prick, was -- we contend -- the introduction of put warrants, which were a huge success in terms of activity and performance virtually coincident with that market's peak. The warrants, available only offshore, allowed investors to both hedge and take a negative view of that market, which they surely did.
Quality of the Data
Financial futures, derivatives, and ETFs have benefited distributors, consumers, and, in some, but not all, instances, producers. The mortgage-backed, mortgage-related, and CDO issues of June and July, 2007 are other instances of the reality that it is a long way from the laboratory [or design lab] to the market place. As exchanges seek growth and new opportunities, our concern is that their basis or expected results will largely be on past events, which, as we all know in the stock market business, is often unrelated to future ones.
Our concern is that many strategies and packages are based on historical data, relationships, and analysis. Increasingly, we question the depth and quality of the data employed in so doing. For example, in 2004, S&P understated the total return of the S&P 500 by 37 basis points, a fact that S&P was reluctant to acknowledge. And we've found that virtually every story on stock buybacks understates the amount and extent of activity.
We believe that individual investors have not benefited from the various new regulations and products. It was the hope and intention of officials in the 1990s to take away the institutional advantage. We believe that the net effect has made life and investing more difficult and more complex for the individual.
Away From Paternal Corporate Relationships
For one, weighted fund returns, as many have pointed out, lagged average fund returns in the 1990s. From 1990 to the market peak in March, 2000, mutual funds returned 10% on average annually, vs. nearly 18% for the S&P 500 index. When we extend that analysis, we find the situation has not improved. From 1990 to April, 2007, mutual funds have gained 5.16% on average each year, vs. 11.4% for the S&P 500.
One of the discernible trends in American business has been the shift from a paternal corporate relationship to one where the employee is increasingly in charge of his own health and retirement benefits. In the case with retirement, the traditional, defined benefit plan has been replaced or augmented with 401[k]s, IRAs, and self-directed plans. Figures from the FRB report that the average balance for those between 55 and 64 in 401[k] plans is $60,000, far below what they will probably require upon retirement. At a time when financial advice and services are probably more critical than ever, the markets of the day are generally less responsive to individuals.
Stock research is becoming less valuable and visible. And there have been numerous stories questioning whether investors ultimately benefit from ETFs, long-short funds, and other new instruments.
We can proffer no detailed solutions, but investors should recognize the risks -- beginning with the regulatory void.
credited by: BusinessWeek.com
Lokey gives UO largest gift: $74.5M
Philanthropist Lorry I. Lokey has given the University of Oregon $74.5 million to benefit science teaching and research. The gift is the largest single academic donation in UO history.
The gift brings Lokey's total giving to the University of Oregon to $132 million over just the past four years. Lokey grew up in Portland and is a 1949 graduate of Stanford University.
Lokey founded Business Wire, an international news release wire service with 30 offices throughout the United States, Europe and Asia-Pacific. Last year, Business Wire, founded in 1961, was sold to Warren Buffett's Berkshire Hathaway.
The $74.5 million gift is the second largest single gift in UO history. Nike founder Phil Knight and his wife, Penny, gave UO $100 million this past August.
The bulk of the $74.5 million gift, about $50 million, will go toward the Lorry I. Lokey Science Advancement and Graduate Education Initiative, which features $20 million for endowed faculty support, $10 million for a quasi-endowment for additional faculty support, $10 million for endowed support for graduate students and a $10 million quasi-endowment for program support.
The funds will initially target areas of UO scientific research, including:
Fundamental genetic/molecular biology studies that advance understanding of cellular processes related to a wide range of diseases such as cancer.
Neuroscience programs that emphasize the study of cognition, behavior and brain adaptations for the use of artificial limbs, as well as rehabilitative approaches for learning disabilities and stress disorders.
Human physiology programs that will advance human performance, from the training of world-class athletes to the treatment of cardiovascular disorders.
Green nanotechnologies, which may help diagnose and treat disease.
In recognition of the gift, the university will dedicate the Lorry I. Lokey Science Complex, which will encompass the 10 existing science buildings and the two new facilities that Lokey has helped fund. The names of the individual buildings in the complex will remain the same.
The gift also includes:
$2 million for a new endowed chair in chemistry for materials science research.
$5 million support of the UO Science Library.
$3 million for an endowment supporting work at the intersection of the humanities and social sciences with the natural sciences.
$2 million for an endowed scholarship program in the School of Journalism and Communication.
$2 million for the new UO Alumni Center.
$5.5 for the President's Special Projects Fund.
Since 1990, Lokey has contributed more than $400 million to charity, with 98 percent going to universities and high schools. The largest amount has gone to the University of Oregon. For fiscal year 2006, Lokey was listed by the Chronicle of Philanthropy as one of 10 most generous donors in the country.
All of Lokey's gifts count toward "Campaign Oregon: Transforming Lives," the UO's $600 million fundraising campaign. With Lokey's most recent gift and the Knights' $100 million gift, the campaign has shot past the goal and now stands at $717.5 million. UO President Dave Frohnmayer says the campaign will continue until its scheduled end in 2008.
credited by: bizjournals.com
The gift brings Lokey's total giving to the University of Oregon to $132 million over just the past four years. Lokey grew up in Portland and is a 1949 graduate of Stanford University.
Lokey founded Business Wire, an international news release wire service with 30 offices throughout the United States, Europe and Asia-Pacific. Last year, Business Wire, founded in 1961, was sold to Warren Buffett's Berkshire Hathaway.
The $74.5 million gift is the second largest single gift in UO history. Nike founder Phil Knight and his wife, Penny, gave UO $100 million this past August.
The bulk of the $74.5 million gift, about $50 million, will go toward the Lorry I. Lokey Science Advancement and Graduate Education Initiative, which features $20 million for endowed faculty support, $10 million for a quasi-endowment for additional faculty support, $10 million for endowed support for graduate students and a $10 million quasi-endowment for program support.
The funds will initially target areas of UO scientific research, including:
Fundamental genetic/molecular biology studies that advance understanding of cellular processes related to a wide range of diseases such as cancer.
Neuroscience programs that emphasize the study of cognition, behavior and brain adaptations for the use of artificial limbs, as well as rehabilitative approaches for learning disabilities and stress disorders.
Human physiology programs that will advance human performance, from the training of world-class athletes to the treatment of cardiovascular disorders.
Green nanotechnologies, which may help diagnose and treat disease.
In recognition of the gift, the university will dedicate the Lorry I. Lokey Science Complex, which will encompass the 10 existing science buildings and the two new facilities that Lokey has helped fund. The names of the individual buildings in the complex will remain the same.
The gift also includes:
$2 million for a new endowed chair in chemistry for materials science research.
$5 million support of the UO Science Library.
$3 million for an endowment supporting work at the intersection of the humanities and social sciences with the natural sciences.
$2 million for an endowed scholarship program in the School of Journalism and Communication.
$2 million for the new UO Alumni Center.
$5.5 for the President's Special Projects Fund.
Since 1990, Lokey has contributed more than $400 million to charity, with 98 percent going to universities and high schools. The largest amount has gone to the University of Oregon. For fiscal year 2006, Lokey was listed by the Chronicle of Philanthropy as one of 10 most generous donors in the country.
All of Lokey's gifts count toward "Campaign Oregon: Transforming Lives," the UO's $600 million fundraising campaign. With Lokey's most recent gift and the Knights' $100 million gift, the campaign has shot past the goal and now stands at $717.5 million. UO President Dave Frohnmayer says the campaign will continue until its scheduled end in 2008.
credited by: bizjournals.com
East Valley Tribune debuts tab size, free distribution
The East Valley Tribune this week will debut major changes to its content and business model -- namely free distribution.
On Wednesday, the daily paper will introduce a new format that "prioritizes local news coverage," by moving all of its local news to the front section, officials said in a press release to media outlets.
Four local editions will be offered, as new editions for Gilbert and the SanTan region join the current East Valley and Scottsdale editions.
The Tribune also will be converting its front local news section to a compact size and offering it free in selected areas.
Paid subscribers will continue to get the full newspaper content, which also includes national and world news, sports, classifieds and the many weekly features in a premium package.
East Valley Tribune Publisher and Chief Executive Julie Moreno said the publication expanded its distribution to better serve readers and advertisers.
"Part of this process involves creating separate editions of the paper for the specific geographic areas we serve. That way we can bring you local news and advertising specific to where you live," she said.
Only the front local news section will be zoned, with the rest of the paper remaining the same. The full implementation of this zoning program will take several months and be launched in phases, officials said.
Executive Editor Jim Ripley emphasizes that the East Valley Tribune's commitment to local news is not changing, just it's presentation.
He said local business news, local government news, local lifestyle and entertainment news, and the local opinions and columns will be brought together in this new front section.
"Hyper-local" has been a common trait used among some daily newspapers around the country, as they face shrinking circulation and advertising revenue.
"The Tribune is one newspaper that is changing with the times by focusing on reader convenience and cleanly packing news close to home in a single section," Ripley said.
The most visible changes will be switching the front local news section to a compact size and making it available through free distribution five days a week, Wednesday through Sunday.
Officials said the compact size was chosen because it works best with the production requirements for multiple editions, and it is easy to handle and carry, and saves newsprint.
The switch will be phased in with Scottsdale on Oct. 17, followed by the Gilbert and SanTan editions Oct. 24.
The East Valley edition will continue in its broadsheet format and be converted at a later date. The free distribution will be done primarily through a network of street racks, and a list of locations will be available on the newspaper Web site, www.eastvalleytribune.com.
Arizona State University journalism professor Tim McGuire said it is a "fascinating approach," but it will have production and advertising issues.
"It's going to be really a challenge. There's going to have two different business, free and distribution. So this a very different model," said McGuire, the Frank Russell Chair for the Business of Journalism at ASU's Cronkite School of Journalism and Mass Communication.
In March, the East Valley Tribune's competitor, The Arizona Republic, underwent a major restructuring that resulted in key personnel departures and content changes to lure a younger demographics in the 24/7 multimedia news environment.
Among the changes: The Monday issue consolidated business, opinion and local items into its front-page section, however, that later was expanded back to two sections. It also included advertising on Page 1 and on the front page of the sports section, while combining classifieds and auto sales ads into a single section.
McGuire's biggest gripe is that newspapers aren't making changes, as they continue to lose readership and relevance in an increasingly digital age. He applauds the Tribune's move, but isn't guaranteeing success.
"It's really a bold move, he said. "If they pull it off without hiccups or burps, I'll be shocked."
credited by: bizjournals.com
On Wednesday, the daily paper will introduce a new format that "prioritizes local news coverage," by moving all of its local news to the front section, officials said in a press release to media outlets.
Four local editions will be offered, as new editions for Gilbert and the SanTan region join the current East Valley and Scottsdale editions.
The Tribune also will be converting its front local news section to a compact size and offering it free in selected areas.
Paid subscribers will continue to get the full newspaper content, which also includes national and world news, sports, classifieds and the many weekly features in a premium package.
East Valley Tribune Publisher and Chief Executive Julie Moreno said the publication expanded its distribution to better serve readers and advertisers.
"Part of this process involves creating separate editions of the paper for the specific geographic areas we serve. That way we can bring you local news and advertising specific to where you live," she said.
Only the front local news section will be zoned, with the rest of the paper remaining the same. The full implementation of this zoning program will take several months and be launched in phases, officials said.
Executive Editor Jim Ripley emphasizes that the East Valley Tribune's commitment to local news is not changing, just it's presentation.
He said local business news, local government news, local lifestyle and entertainment news, and the local opinions and columns will be brought together in this new front section.
"Hyper-local" has been a common trait used among some daily newspapers around the country, as they face shrinking circulation and advertising revenue.
"The Tribune is one newspaper that is changing with the times by focusing on reader convenience and cleanly packing news close to home in a single section," Ripley said.
The most visible changes will be switching the front local news section to a compact size and making it available through free distribution five days a week, Wednesday through Sunday.
Officials said the compact size was chosen because it works best with the production requirements for multiple editions, and it is easy to handle and carry, and saves newsprint.
The switch will be phased in with Scottsdale on Oct. 17, followed by the Gilbert and SanTan editions Oct. 24.
The East Valley edition will continue in its broadsheet format and be converted at a later date. The free distribution will be done primarily through a network of street racks, and a list of locations will be available on the newspaper Web site, www.eastvalleytribune.com.
Arizona State University journalism professor Tim McGuire said it is a "fascinating approach," but it will have production and advertising issues.
"It's going to be really a challenge. There's going to have two different business, free and distribution. So this a very different model," said McGuire, the Frank Russell Chair for the Business of Journalism at ASU's Cronkite School of Journalism and Mass Communication.
In March, the East Valley Tribune's competitor, The Arizona Republic, underwent a major restructuring that resulted in key personnel departures and content changes to lure a younger demographics in the 24/7 multimedia news environment.
Among the changes: The Monday issue consolidated business, opinion and local items into its front-page section, however, that later was expanded back to two sections. It also included advertising on Page 1 and on the front page of the sports section, while combining classifieds and auto sales ads into a single section.
McGuire's biggest gripe is that newspapers aren't making changes, as they continue to lose readership and relevance in an increasingly digital age. He applauds the Tribune's move, but isn't guaranteeing success.
"It's really a bold move, he said. "If they pull it off without hiccups or burps, I'll be shocked."
credited by: bizjournals.com
Tektronix can grow faster with Danaher, CEO says
The purchase of Oregon's largest homegrown technology company by a conglomerate 10 times its size will help accelerate the growth of Tektronix Inc.
That's the assessment of CEO Rick Wills, who came up through the ranks since joining Tektronix in 1979 to lead the company for the past seven years.
Tektronix (NYSE: TEK) has agreed to be acquired by $11 billion, Washington, D.C.-headquartered Danaher Corp. (NYSE: DHR), in an all-cash deal valued at $2.8 billion. That's $38 per share, including Tektronix's debt and net of its cash holdings -- a premium of 34 percent over last week's closing price.
Beaverton-headquartered Tektronix, at $1.1 billion in annual revenue, will now have access to much greater capital resources that could help the business make more acquisitions to round out its technology and product line. Tektronix has made several acquisitions in recent years.
Tektronix will become part of Danaher Electronics, comprised of Fluke and Fluke Networks, based in Washington, D.C. That business is about the same size as Tektronix.
While some of Fluke's tools compete with some of Tektronix's, there's only about a 5 percent overlap, said Wills. That gives plenty of room for distributors who now sell both companies' products to start selling more of each company's products.
Danaher intends to keep both brands, said CEO Larry Culp during an early-morning conference call on Friday.
The fact that Tektronix builds "bleeding-edge" test and measurement equipment, while Fluke makes lower-end instruments used by field technicians, gives the two companies a chance to collaborate on new products, said Wills.
These are likely to be mid-priced tools for engineers working in well-established applications, rather than in leading-edge, new technologies.
Tektronix has a strong presence in Asia, while Fluke does not, as yet. Danaher's management "found that attractive," said Wills.
Danaher, which is extremely profitable, has developed a system for running its operations, based on Japanese auto company Toyota's famous system for removing cost and continuous improvement. That system will help Tektronix improve and grow, said Wills.
"We have all kinds of quality and continuous improvement programs, but we don't have their 20-year toolset that makes them profitable, year after year," said Wills.
It's inevitable that Danaher will evaluate Tektronix's operations for places where it can cut costs, including cutting some employees.
Wills says he can't concern himself with whether he will have a place in the merged company.
"I want to take myself out of this personally, and do the right thing for customers, employees and shareholders," he said.
credited by: bizjournals.com
That's the assessment of CEO Rick Wills, who came up through the ranks since joining Tektronix in 1979 to lead the company for the past seven years.
Tektronix (NYSE: TEK) has agreed to be acquired by $11 billion, Washington, D.C.-headquartered Danaher Corp. (NYSE: DHR), in an all-cash deal valued at $2.8 billion. That's $38 per share, including Tektronix's debt and net of its cash holdings -- a premium of 34 percent over last week's closing price.
Beaverton-headquartered Tektronix, at $1.1 billion in annual revenue, will now have access to much greater capital resources that could help the business make more acquisitions to round out its technology and product line. Tektronix has made several acquisitions in recent years.
Tektronix will become part of Danaher Electronics, comprised of Fluke and Fluke Networks, based in Washington, D.C. That business is about the same size as Tektronix.
While some of Fluke's tools compete with some of Tektronix's, there's only about a 5 percent overlap, said Wills. That gives plenty of room for distributors who now sell both companies' products to start selling more of each company's products.
Danaher intends to keep both brands, said CEO Larry Culp during an early-morning conference call on Friday.
The fact that Tektronix builds "bleeding-edge" test and measurement equipment, while Fluke makes lower-end instruments used by field technicians, gives the two companies a chance to collaborate on new products, said Wills.
These are likely to be mid-priced tools for engineers working in well-established applications, rather than in leading-edge, new technologies.
Tektronix has a strong presence in Asia, while Fluke does not, as yet. Danaher's management "found that attractive," said Wills.
Danaher, which is extremely profitable, has developed a system for running its operations, based on Japanese auto company Toyota's famous system for removing cost and continuous improvement. That system will help Tektronix improve and grow, said Wills.
"We have all kinds of quality and continuous improvement programs, but we don't have their 20-year toolset that makes them profitable, year after year," said Wills.
It's inevitable that Danaher will evaluate Tektronix's operations for places where it can cut costs, including cutting some employees.
Wills says he can't concern himself with whether he will have a place in the merged company.
"I want to take myself out of this personally, and do the right thing for customers, employees and shareholders," he said.
credited by: bizjournals.com
Kapiolani building converted to condos
Realtor Abe Lee has put another condominium conversion project on the market, a 21-unit, three-building complex on Kapiolani Boulevard near Kaimuki High School.
The one- and two-bedroom units are priced from $209,000 to $259,000, with maintenance fees ranging from $148 to $245 a month. Current tenants are being given the first opportunity to purchase the fee-simple units.
The units are being sold as-is, in an effort to keep prices down. The original building was built in 1957 followed by the two surrounding buildings, which were built in 1965.
"This condo conversion offers simple, no-frills homeownership to people who want to live in town," said Lee, principal broker of Abe Lee Realty. "With pricing well below market comparisons, this is a perfect opportunity for first-time buyers."
Central Pacific HomeLoans is offering special financing.
credited by: bizjournals.com
The one- and two-bedroom units are priced from $209,000 to $259,000, with maintenance fees ranging from $148 to $245 a month. Current tenants are being given the first opportunity to purchase the fee-simple units.
The units are being sold as-is, in an effort to keep prices down. The original building was built in 1957 followed by the two surrounding buildings, which were built in 1965.
"This condo conversion offers simple, no-frills homeownership to people who want to live in town," said Lee, principal broker of Abe Lee Realty. "With pricing well below market comparisons, this is a perfect opportunity for first-time buyers."
Central Pacific HomeLoans is offering special financing.
credited by: bizjournals.com
Cyanotech adds two new products
Cyanotech Corp. (Nasdaq: CYAN) has added two new products to its line of microalgae and spirulina dietary supplements.
The Big Island company's new products are condition-specific. One is intended to support a healthy cardiovascular system, the other to strengthen joints and tendons.
Nearly 15,000 Cyanotech shares changed hands following the announcement Monday. Average daily volume for the stock is 6,300.
The company's stock, which hit a 52-week low of 75 cents per share on Oct. 9, closed at $1.06 Monday, up 6 percent from the previous trading day.
Also in the announcement, Cyanotech said it has received a Good Manufacturing Practices certification from the Natural Products Association, which regulates retailers and manufacturers in the United States.
credited by: bizjournals.com
The Big Island company's new products are condition-specific. One is intended to support a healthy cardiovascular system, the other to strengthen joints and tendons.
Nearly 15,000 Cyanotech shares changed hands following the announcement Monday. Average daily volume for the stock is 6,300.
The company's stock, which hit a 52-week low of 75 cents per share on Oct. 9, closed at $1.06 Monday, up 6 percent from the previous trading day.
Also in the announcement, Cyanotech said it has received a Good Manufacturing Practices certification from the Natural Products Association, which regulates retailers and manufacturers in the United States.
credited by: bizjournals.com
Review IDs ways to improve government efficiency
Colorado Gov. Bill Ritter said Monday that a review team has identified government efficiencies that could save the state as much as $145 million over the next five years.
Ritter, a Democrat who was sworn into office earlier this year, announced a series of reforms that he said were the result of surveying state employees about ways to save money.
The reforms outlined by the Governor's Government Efficiency and Management Performance Review Team include saving up to $47 million by using technology to prevent Medicaid fraud.
He also said the state could save $7.5 million over the five-year period by implementing a "preferred drug list" -- an executive order Ritter made earlier this year. Ritter signed the order in hopes of bringing down drug costs for the state's Medicaid program.
Other proposals include: Reducing the state's vehicle fleet, saving $2.2 million and reducing vehicle maintenance costs by $3.3 million doing repairs internally instead of contracting the work to private businesses.
In addition to those savings, Ritter said the state would improve its collections of tax dollars owed by out-of-state corporations -- an estimated benefit of $37.8 million.
credited by: bizjournals.com
Ritter, a Democrat who was sworn into office earlier this year, announced a series of reforms that he said were the result of surveying state employees about ways to save money.
The reforms outlined by the Governor's Government Efficiency and Management Performance Review Team include saving up to $47 million by using technology to prevent Medicaid fraud.
He also said the state could save $7.5 million over the five-year period by implementing a "preferred drug list" -- an executive order Ritter made earlier this year. Ritter signed the order in hopes of bringing down drug costs for the state's Medicaid program.
Other proposals include: Reducing the state's vehicle fleet, saving $2.2 million and reducing vehicle maintenance costs by $3.3 million doing repairs internally instead of contracting the work to private businesses.
In addition to those savings, Ritter said the state would improve its collections of tax dollars owed by out-of-state corporations -- an estimated benefit of $37.8 million.
credited by: bizjournals.com
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