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Daniel Petrocelli, the lawyer for former Enron CEO Jeff Skilling, writes in to Fortune to complain about the coverage of the trial of Lay and Skilling.
His epistle reads in part:
"I am writing about FORTUNE's indefensible choice of Peter Elking and Bethany McLean to cover the trial here in Houston of my client Jeff Skilling and his co-defendant Ken Lay. No one has cashed in as handsomely form the public's rush to judgment of Mr. Skilling and Mr. Lay--and of other innocent men-as these two."
No one? Um, how about Petrocelli? Elkind, McLean, and Joe Nocera had to split the nice advance they got for Smartest Guys in the Room with one another, and with their agent(s). They probably wound up with several hundred thousand dollars each for their efforts to provide a non-fiction chronicle of the Enron saga. Petrocelli, by contast, will likely take home several million for his efforts to provide a largely fictional chronicle of the Enron saga.
Posted by dan at 01:40 PM
A great article by Barney Gimbel in Fortune on how Kevin Schieffer, a former aide to former Republican Senator Larry Pressler is trying to make a fortune building a railroad servicing Wyoming's coal fields--with cheap financing from Uncle Sam, and with help from his old friend Sen. John Thune. Yet another reminder of how the ruggedly individualistic economy of the highly Republican Great Plains is largely dependent on the federal government.
Posted by dan at 01:30 PM
There was a noteworthy oversight in my article on Slate earlier this week on the trend of 'gross-ups' in executive compensation. In the piece, I linked to an article by Gretchen Morgenson in Wednesday's New York Times on the details of North Fork Bancorp CEO John Kanas's egregious compensation deal.
I should have quoted from and cited the more-detailed article written by the two Wall Street Journal reporters who broke the story on Tuesday: Jesse Drucker and James Bandler. I will do so now.
"The top three executives at North Fork Bancorp, benefiting from a little-known but popular executive perk, stand to reap at least $288 million from the large New York regional bank's $14.6 billion acquisition by Capital One Financial Corp., including roughly $185 million for Chief Executive Officer John Kanas.While large payouts to executives are typical under many companies' change-of-control policies, the expected payouts to the North Fork executives, as estimated by executive-pay consultants, are big by recent standards. In a takeover of similar size last year, SBC Communications Inc.'s $16 billion acquisition of AT&T Corp. made AT&T CEO David Dorman eligible for roughly $32 million. Mr. Kanas's payout will rival one of the biggest ever: the more than $185 million that Gillette Co. CEO James Kilts will receive as a result of Procter & Gamble Co.'s acquisition last year of Gillette for $57 billion -- at least $95 million of which was tied directly to the merger.
The relative size of the North Fork payouts raised eyebrows among critics of high executive pay. "It's the highest golden parachute I've ever seen," said Paul Hodgson, a senior research associate at the Corporate Library, an independent corporate-governance research organization. The North Fork payments "appear to me at a level that would create an incentive for management to go looking for a change of control to trigger that payment."
A big portion of the payments to the North Fork executives will come in the form of a so-called tax gross-up -- a common fixture in executive compensation whereby a company covers the tax bill on perks and benefits of the job. In the case of the North Fork executives, most of the expected payouts will come from the accelerated vesting of restricted stock -- triggered by the merger -- plus gross-ups to cover taxes on that restricted stock.
The tax gross-up payments to Mr. Kanas alone could be as much as $111 million, according to an analysis done by Derrick Neuhauser, an executive-pay expert at BDO Seidman LLP, based on company filings. Meanwhile, the three top executives -- Mr. Kanas, Vice Chairman John Bohlsen and Chief Financial Officer Daniel M. Healy -- will also receive one-time payouts totaling about $26 million, according to Tim Ranzetta, chief operating officer at Equilar Inc., a pay consulting firm in San Mateo, Calif. Those payments are based on an average of the executives' previous annual taxable compensation.
"I know how the story looks, and it's an egregious amount of money," said Mr. Kanas, 59 years old, in an interview. . .
Posted by dan at 09:51 AM
The world may be flat, but its stomachs are getting less so. Frances Williams reports in the Financial Times:
Catherine Bertini, chair of the UN standing committee on nutrition, said obesity was no longer a problem only for rich countries. Poor nations were now facing both types of malnutrition and their associated health risks.While under-nutrition - which affects 170m children in the developing world - remains a leading cause of death and disease, obesity and related afflictions such as heart disease, strokes, cancer and diabetes are rising rapidly even in the poorest countries. Globally, some 300m adults are clinically obese, the UN estimates. . . .
Health experts say people who are underweight as infants are more at risk of being overweight as adults if their lifestyle later leads to a higher calorie intake and less exercise. They point to increased urbanisation as the prime cause behind the explosion of obesity in countries such as India, China and even Mozambique.
While the trend to "fast food" such as burgers and pizza has been blamed for rising obesity in China and India, in most poor countries obesity reflects a diet heavily dependent on staple carbohydrates such as maize, coupled with a more sedentary lifestyle.
Posted by dan at 09:46 AM
It's INSANE!!!!! David Rogers reports in the Wall Street Journal on the latest budget madness.
WASHINGTON -- Senate Republicans deserted President Bush's budget for the coming year, only hours after sending the White House a bill raising the Treasury's borrowing authority by $781 billion to cope with the mounting national debt.Party discipline broke on a series of votes adding $16 billion above the administration's proposed caps for appropriations for the fiscal year beginning Oct. 1. The increased spending -- together with promises of sharing energy royalties with Gulf Coast states -- helped the package win approval, but severely weakened the Republicans' five-year budget plan, which already forecast the national debt ballooning to $11.3 trillion by 2011.
The final Senate 51-49 roll call on the budget resolution came as a $91.9 billion emergency-spending bill, reflecting the added strain of the war in Iraq and Hurricane Katrina, cleared the House. . . .
But as lawmakers left for a week-long St. Patrick's Day recess, this final legislative bash, a trifecta of debt, budget and emergency-appropriation bills, dramatized the nation's fiscal straits. Speaker Dennis Hastert (R., Ill.) said the Senate budget votes will affect action in the House when it takes up its budget resolution in April.
"We're getting repercussions from our guys, the moderates, to do the same thing," he said smiling, "Action, reaction."
Hanging over the fight is the growing national debt, expected to reach at least $9.2 trillion by the end of next year. Yet going into November's election, Republicans have thus far shied away from finding savings in benefit programs such as Medicare. And the Senate budget rested on being able to impose a series of caps on discretionary appropriations, beginning with an $872.5 billion ceiling in 2007.
Chairman Judd Gregg (R., N.H.) held the line until yesterday, but his position quickly deteriorated after losing a 51-49 vote raising the caps by $3.3 billion to make room for spending to help low-income families pay household-energy costs. Later, on a 73-27 roll call, more than half his Republicans joined Democrats in adding $7 billion to fund education and health programs, and this opened the door to more spending add-ons.
The backbreaking $7 billion amendment was engineered by Sen. Arlen Specter (R., Pa.), who made an end-run around Mr. Bush by increasing the level of "advanced appropriations," a second category of spending often used to fund education programs ahead of a school year. "It's not sort of a gimmick," said the senator. "It is a gimmick."
Much as the White House is committed to capping appropriations, lawmakers complain that Mr. Bush goes around the limits himself by proposing a succession of supplemental spending bills wrapped in the mantle of "emergency" needs.
Posted by dan at 09:43 AM
Thomas Crampton reports in the New York Times on France's efforts to dictate industrial policy to Apple and the iPod. No truth to the rumor that the language in the bill requires the company to refer to the product henceforth as the Pomme moi-Pod.
Posted by dan at 09:14 AM
Leslie Wayne reports in the New York Times on the cheesy post-Washington lobbying career of former Attorney General John Ashcroft.
Posted by dan at 08:57 AM
Inflation in Zimbabwe hit 782 percent in February.
Wall Street economists suggested, however, that the situation wasn't so bad. The core rate, excluding volatile costs like food and energy, was only 650 percent.
Posted by dan at 09:29 AM
The Wall Street Journal editorial page says the massive trade deficit doesn't matter because, well, it's just a capital-import surplus.
Part of the problem here is simply one of accounting definition. In the national income accounts, the mirror image of a merchandise trade deficit is a capital-import surplus. When the U.S. investment climate improves -- through such policies as reducing the tax rate on capital gains -- global investment dollars flow into the U.S. Foreigners in turn earn the dollars to pay for those investments by selling Americans more goods and services than they buy from us.
And because the rest of the world is filled with a bunch of dumb investors while Americans are really smart ones.
Senators might also consult a new study by Ricardo Hausmann and Federico Sturzenegger, of Harvard's Kennedy School, who argue that these current-account deficits are in reality a statistical illusion. They found that the net return on the U.S. financial position in 2004 was roughly a positive $30 billion and not much different than it had been in 1982, despite 22 years of deficits.How can that be? "A correct descriptive explanation of this puzzle is that the rates of return of U.S. liabilities is significantly smaller than the return on its assets," Mr. Hausmann writes. Foreigners are willing to accept a lower rate of return on their U.S. investments, such as Treasury bills, because they are partly buying dollar currency stability, liquidity, and a safe haven against political and economic risk. Foreigners, for example, hold hundreds of billions of dollars of U.S. currency, which is the equivalent of a zero interest loan to Americans.
By contrast, American assets abroad earn higher than normal rates of return because of noncounted factors such as insurance, know-how, and the value of universally recognized brand names like McDonald's and Disney. When taking these into account, the authors conclude that America is a net creditor, not a net debtor, nation. Even more surprising, correctly measured, China is a net debtor to the U.S.
When we can start using brand names and know-how to pay the interest on the bonds held by China's central bank, I'll worry a lot less about the capital-import surplus.
Posted by dan at 09:19 AM
June Kronholz reports in the Wall Street Journal on the kabuki theater of the latest efforts to crack down on illegal immigrants. Large companies pretend to gather information and the government pretends to check it.
When Tyson Foods Inc. hires a new worker, it electronically sends his or her name, Social Security number and citizenship status to a fledgling worker-verification system run by the Department of Homeland Security. The prosaically named Basic Pilot system checks the worker's information against government databases, and either confirms that the new hire is eligible to work in the U.S. -- or cautions that something's amiss.Congress is so optimistic that Basic Pilot will stanch the flood of job-seeking illegal immigrants to the U.S. that it plans to require all employers to use it as part of the immigration-overhaul legislation it's now considering. Basic Pilot "works fairly well, as far as it goes," agrees Tyson spokesman Archie Schaffer.
But as far as it goes isn't yet very far. Basic Pilot can't detect whether a worker is using a stolen identity, for example. Only a handful of employers have volunteered to use it, and Homeland Security concedes that its technology isn't up to the job. All that explains why Basic Pilot is likely to set off a politically bruising battle when the issue reaches the Senate floor, and why employers could face grueling new regulation if it passes. . .
Basic Pilot was designed to make it harder to employ an illegal worker by making it easier to verify his documents. The system compares a new hire's information against the Social Security Administration's database to confirm that the worker is authorized to work in the U.S. . .
Basic Pilot began in 1997 by enlisting employers in a few high-immigrant states and industries but has since been expanded nationwide. Data that once were telephoned in now are sent via the Internet. Still, only 5,479 of the country's 8.5 million employers have signed on. Basic Pilot has just five employees, and its technology remains so elementary that some databases must be checked by hand."It has its imperfections," concedes Emilio Gonzalez, director of Homeland Security's Citizenship and Immigration Service, who will be charged with implementing any worker-verification plan that Congress passes.
But perhaps Basic Pilot's biggest flaw is that while it can detect a fake document by cross-checking databases, it can't detect a stolen identity -- when a new hire submits the name, address and Social Security number of a U.S. citizen or legal resident, for example. In 2004, only 208 of the 757,000 names submitted to Basic Pilot were what the government calls "employment unauthorized" -- a strong hint that at least some workers had found their way to beat the system.
Posted by dan at 09:14 AM
Excellent piece by Jonathan Chait in The New Republic on the exhaustion of Republican policy ideas.
Posted by dan at 09:10 AM
The Lord is my budget-scorer, I shall not want. He leadeth me to walk in pastures of red ink. From David Rogers's article in the Wall Street Journal on the latest budget shenanigans in the House of Representatives.
Election-year turmoil in Republican ranks burst into the open as the House leadership scrambled to tamp down divisions over two issues that threaten the party's control of Congress: spending and scandal.On a 218-200 procedural vote, the House cleared the way for the expected passage this week of a $91.8 billion emergency appropriations bill to fund the war in Iraq and continued Gulf Coast hurricane-recovery efforts. But it took the support of 22 Democrats to advance the White House-backed package and fill the gap left by the defection of 29 Republican conservatives upset with the cost. . . .
Indiana Rep. Mike Pence, chairman of the conservative Republican Study Committee, told colleagues that Tuesday night he prayed for divine guidance before deciding to oppose the leadership yesterday."
Posted by dan at 09:04 AM
Micheline Maynard reports in the New York Times on Chrysler's white-collar cram down, a certain prelude to the much larger blue-collar one in the offing.
Chrysler, which is trying to persuade union members to accept less-generous health care benefits, said Wednesday that most of its salaried employees would pay more for their health coverage beginning next year. . .Chrysler's annual health care bill is $2.3 billion, or the equivalent of $1,400 a vehicle. Its health care costs have risen 100 percent since 2000.
Chrysler was the only Detroit carmaker to earn a profit in North America last year, and the only one to increase its sales and its market share. That may be one reason that Chrysler and the United Automobile Workers union have not yet reached agreement on changes in their health care program. Workers at General Motors and Ford Motor approved changes last year, pending court approval, that would require them to pay a share of their health care coverage. All three automakers have essentially been paying their union workers' coverage in full.
In announcing Chrysler's health care changes for salaried workers on Wednesday, Mr. LaSorda said, "We all have to do our part going forward, and we have to do it in a way that is innovative, competitive, equitable and provides a long-term solution."
Chrysler estimates that its average health care cost per salaried employee is $11,000. Each nonunion employee already pays an average of $3,000 annually for health care coverage, or roughly 27 percent, with Chrysler picking up the rest.
Beginning next year, workers will pay an average of 31 percent of their health care coverage. Chrysler said premiums would be based on salary.
Executives, including Mr. LaSorda, will have to pay the entire amount of any increase in health care costs, which Chrysler estimated to be $1,500 more a year. Managers will pay an estimated $450 more a year, while administrative staff workers will not pay more, the company said.
Chrysler also said it was changing health care coverage for retirees. Starting in 2007, managers who retire early will pay 50 percent of their post-retirement health care premiums, while executives will pay the entire cost.
Posted by dan at 09:00 AM
Gretchen Morgenson of the New York Times is on the case of the obscene pay package for North Fork Bancorp CEO John Kanas.
The compensation adviser behind an estimated $135 million payout to the chief executive of North Fork Bancorporation has also received fees for other services from the bank in recent years, according to regulatory filings.The other business dealings the adviser, Mercer Human Resources Consulting, has had with North Fork raise questions among corporate governance experts about the pay recommendations it made to the bank's board, which has a duty to company shareholders, not to management. . .
When the same consulting firm that advises a board on pay practices generates revenue by providing other services to the company, questions can arise about which master the consultant is serving, corporate governance experts say. . .
If Capital One's proposed $14.6 billion acquisition of North Fork is completed, John A. Kanas, North Fork's chief executive, will receive an estimated $135 million, said Brian Foley, a pay expert in White Plains.
Other top executives at the bank will receive generous payouts as well, resulting in costs to the company of $350 million before taxes, according to North Fork calculations.
Mr. Kanas, who has worked at the bank since 1971 and has been chief executive since 1988, is the architect of its transformation from a Long Island bank to the nation's 16th-largest bank, with $58 billion in assets.
As a result of the merger, his payout includes $66 million in restricted stock, $15 million in severance that he will receive when he retires, $6 million in stock options and $4 million in stock-based units.
Mr. Kanas will also receive an estimated $44 million to cover personal income taxes generated by the gains in his restricted stock that will result from the North Fork sale. Such a payment is known as a tax gross-up.
Posted by dan at 09:19 AM
Mary Williams Walsh reports in the New York Times on the latest pension follies at Northwest Airlines. Money graphs:
The Labor Department is investigating whether Northwest Airlines systematically shortchanged its employee pension fund over three years, then avoided having to make a $65 million payment to the fund by filing for bankruptcy protection just one day before the payment was due.The government has subpoenaed voluminous and detailed information from Northwest going back to January 2002, when both the airline and its pension fund faced severe financial pressures after the terrorist attacks of 2001 and the bursting of the technology bubble in the stock market.
The investigators appear to be tracing the steps that led to the pension fund's recent shortfall of $5.8 billion, and whether Northwest violated any laws.
The investigation has implications for many businesses besides Northwest that have shaky pension plans. It suggests that the Labor Department is looking for a way to break an entrenched pattern, in which distressed companies quietly deplete their pension funds over a number of years, then declare bankruptcy and transfer huge obligations to the federal government.
Posted by dan at 09:17 AM
There's a great quote at the end of Joseph Preciphs's article in yesterday's Wall Street Journal on ballet proposals in several states to raise the minimum wages:
Public opinion surveys indicate that raising the minimum wage is a popular cause across the ideological spectrum. In a Gallup Poll in November, more than 80% of Americans surveyed said they were in favor of "Congress passing legislation that would raise the minimum wage," with only 14% saying they would disagree."This issue is so popular among the entire public that Republican voters don't even realize they're supposed to vote against these initiatives," says Kristina Wilfore, executive director of the Ballot Initiative Strategy Center, a left-leaning umbrella group backed by labor unions and financier George Soros.
Posted by dan at 08:30 AM
Caroline Daniel reports in the Financial Times that Sen. Richard Lugar has apparently woken up from a deep slumber and realized that the U.S. spends a lot of money buying energy from foreign sources:
In a speech in Washington, Dick Lugar warned: "No one who is honestly assessing the decline of American leverage around the world due to energy dependence can fail to see that energy is the albatross of US national security."His remarks highlight the extent to which energy security has moved rapidly up the US political agenda, driven by an unusual coalition of interests including national security specialists concerned about US reliance on foreign oil in troubled parts of the world, environmentalists and unions keen to create US jobs through alternative energy sources. . . .
As debate about Iran's nuclear ambitions shifts to the United Nations Security Council, Mr Lugar highlighted the dangers of transferring billions of dollars to unaccountable regimes and warned economic sanctions against Iran might not work.
"Iran has been anticipating a crisis by accumulating funds [from high oil prices], so if they shut off oil supplies it could have savings to draw down for a long period of time. That is not well recognised and allows Iran and other states a degree of invulnerability to economic sanctions," he said.
Mr Lugar noted that 77 per cent of the world's oil supply was controlled by foreign governments, and that the US paid 17 per cent more for its energy in 2005 than the year before. Energy costs now account for a third of the US trade deficit. He predicted the US would spend $320bn (£185bn) on oil imports this year.
To reduce US vulnerability he said he would introduce an Energy Diplomacy and Security Act this week to expand international co-operation to "enhance preparedness for major disruptions in oil supplies".
More controversially, he suggested there be a $35-a-barrel price floor for oil, to provide security for companies seeking to invest in alternative fuels. He admitted that he was still speaking to economists about how this could be achieved.
Posted by dan at 08:27 AM
Jeffrey Trachtenberg reports in yesterday's Wall Street Journal about the apparent disappointment of Lee Eisenberg's personal finance book, The Number.
Author Lee Eisenberg, a media-savvy former editor of Esquire, hit the road to promote it. The idea of the book -- helping aging baby boomers arrive at a "number" they would need to retire on -- appeared to target a crying need for a demographic that also happened to boast a lot of avid readers. CBS Corp.'s Free Press imprint was so confident it printed 125,000 copies.But "The Number: A Completely Different Way to Think About the Rest of Your Life" isn't hitting its numbers. It made a one-week appearance on the New York Times bestseller list, and since, sales have declined in each of the past four weeks. Retailers have sold an estimated 50,000 copies, a sell-through rate of just 40%. One experienced publisher predicted that the book will likely sell only another 10,000 to 15,000 in hardcover.
I don't know that this is entirely fair. Fifty thousand books sold in hardcover is an awful lot, in this day and age. For 99.9 percent of hardcover nonfiction, that would be a monster number. And the marginal cost of manufacturing a book is very small, say $1.50. So if the Free Press winds up having to write off entirely 60,000 copies of the hardcover that won't sell, that's a $90,000 hit. That's unfortunate, but that only amounts to a small portion of the revenues the publisher has realized from all the sales.
Posted by dan at 08:22 AM
It's not quite dropping buckets of dollars out of helicopters, but Washington Mutual is doing its part to fight whatever vestiges of deflationary forces might be running loose in New York. On 23rd St., teams of promoters are handing out $2 bills--encased in a brochure flogging the bank's free checking. I'm sorry to report to all my economist friends that many seemingly rational human beings declined the offer of free money.
Posted by dan at 02:17 PM
I will be appearing on the Al Franken show today @ 1:00.
Posted by dan at 11:52 AM
Katie Hafner had a good article in the New York Times on Saturday about people trying to flip houses on the internet.
On eBay, the biggest online marketplace, and dozens of other Web sites with names like Bid4Assets.com and Realestatesupermarket.com, sales involving tens of thousands of dollars can occur entirely online. EBay, for example, may have more than 1,800 residential properties listed on any given day — from multimillion-dollar vacation houses in Florida to thousand-dollar fixer-uppers in the rural Midwest.But now, with plenty of buyers eager to get in on the real estate boom, such online sites have become perfect places for unscrupulous sellers who have bought dilapidated houses at, say, foreclosure auctions, to resell, or flip, them quickly for inflated prices. Many of the deals sound too good to be true. But the gullible are lured by nice photos and a belief that online transactions on big Web sites are generally safe.
Online flipping is happening in economically distressed cities in New York, Ohio, Michigan and Pennsylvania. The practice, local government leaders say, is destabilizing already weakened urban neighborhoods by displacing legitimate investment.
Buffalo has been particularly hard hit by online flipping, as the city's persistent population decline and high foreclosure rates have created a glut of some 20,000 vacant houses.
"Ninety-nine percent of these online ads have some kind of fraud or lies," said Tracy Krug, a building inspector in Buffalo. "They paint a nice rosy picture: 'on a bus line, near a nice market.' They don't tell you you're going to be across the street from a crack house."
Safeguards that protect buyers, like state laws requiring disclosures about a property's condition, are rarely effective when the transaction is online. Although such laws apply to most transactions, online or not, a long-distance buyer will not necessarily know about them.
Posted by dan at 10:31 AM
Excellent article on the front page of the Wall Street Journal's special report section today by Stefan Fatsis about how the small-budget, small-market George Washington University basketball team manages to compete with the big boys. The bad news: it resides safely behind the WSJ's subscription wall.
The good news: Fatsis isn't the only writer putting GW's basketball program under the microscope. For excellent free coverage on GW's unlikely NCAA success story--and for wry observations on parenthood, pop culture, and Tony Kornheiser--check out Fitzfacts, a blog established and run by my friend Bill Fitzgerald.
Posted by dan at 10:15 AM
The latest Treasury Monthly statement is available. The good news: receipts rose in February by nearly 12 percent from a year ago. The bad news: spending rose 8 percent in February from a year ago. And since February isone of those months where tax receipts are low, that meant the deficit expanded. In absolute terms, revenues rose nearly $12 billion from a year ago, while spending rose nearly $18 billion from a year ago.
Posted by dan at 10:10 AM
Chris Caldwell is a very smart guy, and, on the whole, an excellent writer. But his column in the Financial Times on Saturday about Wal-Mart contained an extrarodinarily dumb sentence:
"Wal-Mart's excesses, on the other hand, are those of the 20th-century left: its shelves reflect a dictatorship of (the tastes of) the consumer proletariat."
Huh? Lets review some of Wal-Mart's excesses: a pathological opposition to unions; a hostility to the notion that corporations should pay a living wage or offer anything approaching comprehensive benefits; a passionate supporter of free trade and global sourcing; a zero-sum adversarial attitude toward suppliers; a pervasive sense that profits and economic efficiency trump virtually all other values. Now, here's a multiple choice question. Does this sound like the 20th century left, or the 20th century right?
Posted by dan at 10:02 AM
Dan Roberts reports in the Financial Times that more companies are hopping aboard the anti-earnings guidance bandwagon.
A consensus is forming among chief executives, regulators and analysts against the quarterly ritual that encourages management to pursue narrow, short-term targets at the expense of more sustainable growth.Pfizer is the latest big company preparing to join Citigroup, Intel, Motorola, Ford and General Motors by abandoning earnings guidance in favour of issuing more detail on underlying performance. Google and the New York Stock Exchange took the same approach when they went public recently
In Washington, the House financial services committee is understood to be planning a hearing on the dangers of guidance as part of a review of corporate disclosure.
Even on Wall Street, the mood is turning. Merrill Lynch recently urged its global research analysts to discount company guidance when preparing forecasts.
On Thursday, James Cayne, chief executive of Bear Stearns, also warned that earnings guidance was “not a good idea”.“It’s all part of a growing trend,” said David Chavern, chief of staff at the US Chamber of Commerce.
Hmmm. Pfizer, Intel, GM, Ford, Motorola, and Citigroup. You can understand why many of these companies may not want to offer earnings any longer. In recent years, they've had an awfully tough time meeting it, and investors have punished the stocks as a result. Here's a chart of these non-guiders vs. the S&P 500 over the past three years. All except Motorola are trailing the index.
Posted by dan at 09:58 AM
I feebly try to coin a new term--Selective Globalization Syndrome--in today's New York Times Week in Review,
Posted by dan at 07:39 AM