SkyIG

SKY News Summary 2-28-08

USA Today Snapshots® graph indicates that the purchase of individual life insurance policies has dropped from 14.7 million policies purchased in 2002 to 10.9 million policies purchased in 2006. USA Today

Berkshire Hathaway has more than the Gen Re scandal to worry about at the moment. Its subsidiary, International Dairy Queen, is requiring its franchisees to invest at least $255,000 to convert small restaurants (or ones with just window service) into either restaurants serving meals as well as desserts (DQ Grill & Chill), or stands selling desserts (DQ/Orange Julius Treat Center). Franchise owners are suing because pilot restaurants have not fared well. In fact, of the 105 test refurbished restaurants, some have performed poorly and two have failed. Franchises feel they have become less important than investors. HC
http://www.courant.com/business/hc-dqlawsuit0228.artfeb28,0,4970551.story

When talking about the housing problems yesterday, Federal Reserve Chairman, Ben Bernanke stated that, ‘It’s possible that by later this year it (housing) will stop being such a big drag directly” on the economy. But home prices probably will decline into next year.’ HC
http://www.courant.com/business/hc-bernanke0228.artfeb28,0,969337.story

The Federal Trade Commission Chairman, Deborah Platt Majoras, will resign next month to take a job as VP and general counsel at Procter & Gamble. Her departure will leave the FTC with two Republicans, an independent, and a Democrat, though there is not expected to be much derision, since most votes in recent years have been unanimous. The agency will be pursuing antitrust allegations against Intel, as well as allegations that Cephalon “bought off” its generic pill competitors. The FTC “enforces consumer-protection and antitrust laws and shares merger-review authority with the Justice Department.”
http://online.wsj.com/article/SB120415346489397857.html?mod=todays_us_page_one

The Office of Federal Housing Enterprise Oversight, which regulates both Fannie Mae and Freddie Mac, may relax the 30% capital requirement it imposed on the mortgage lenders during the past few years. Both Freddie and Fannie are unable to conform to recent legislation allowing for the purchase or guarantee of larger loans, up to $730,000 in high-cost housing areas because of the capital restraint. According to the Wall Street Journal, “losses in the third quarter forced the companies to raise a combined $13 billion through sales of preferred stock late last year.”
http://online.wsj.com/article/SB120411930796696727.html?mod=todays_us_page_one

Declining home prices have reduced the availability of home equity loans, so more people are borrowing from their 401(k) plan to pay down debt, or meet medical expenses. A study by Aegon Transamerica Life Insurance shows that 18% of workers had a 401 (k) loan outstanding in 2007, compared to 11% in 2006. An example from T. Rowe Price shows why this could be a bad idea. “A participant with a $20,000 account balance who contributes $100 a month and earns an annual return of 10% would have $624,681 after 30 years. But if that participant borrows $10,000 from his plan and repays the loan at 7% interest over five years, halting contributions while he repays the loan but making $100 monthly contributions for the next 25 years, he would have only $523,502 at the end of the 30-year period.” WSJ
http://online.wsj.com/article/SB120417048103899149.html?mod=todays_us_personal_journal

Medtronic announced the first human use of its investigational bifurcation stent. The new stent uses a Y-shaped design “to match the anatomy of lesions that form at the junctions of coronary arteries.” It is made of an advanced cobalt alloy, which allows the stent struts to be extremely thin while also providing sufficient strength to support the artery.
http://wwwp.medtronic.com/Newsroom/NewsReleaseDetails.do?itemId=1204126646755&lang=en_US

According to the Praxair web site, Praxair Distribution has acquired Kirk Welding Supply, of Kansas City, Missouri. Financial terms of the transaction were not disclosed. Kirk had sales of $28 million in 2007 and sells high-pressure industrial and specialty gases, welding equipment and related supplies and services. The company’s 85 employees will join Praxair Distribution’s 5000 employees in North America. This acquisition complements 11 other acquisitions and joint ventures Praxair Distribution has completed and integrated over the past 12 months in the U.S. and Canada.
http://www.praxair.com/praxair.nsf/AllContent/B683DD6B9D966AED852573E500587278?OpenDocument

There is a good article in Fortune Magazine about PepsiCo’s president, Indra Nooyi, and her achievements at the company.
http://money.cnn.com/2008/02/18/news/companies/morris_nooyi.fortune/index2.htm

Walgreens announced that its senior vice president and chief strategy officer John W. Gleeson, 61, is retiring on Feb. 29 after more than 45 years with the company. He was named to his current position in 2007. Robert G. Zimmerman, 56, vice president of corporate development, will replace Mr. Gleeson as leader of the strategy group. Zimmerman has 30 years of Walgreens experience and has held leadership roles in planning, strategy and administration, including 16 years at Walgreens Health Services, the company’s managed care division.
http://news.walgreens.com/article_display.cfm?article_id=4909

Sources: Hartford Courant, Wall Street Journal, USA Today, Medtronic web site, Praxair web site, Walgreens website, and Money.CNN.com.

SKY News Summary 2-26-08

Ice shrinkage at the polar cap is spawning new interest and investment in shipping. Now that it is possible, a straight line across the North Pole shaves 4,000 miles, 11 days, and about $800,000 off a freighter’s trip from Hamburg to Yokohama, Japan. Investment in reinforced vessels rose fivefold to $2.5 billion in 2006 from $500 million in 1999, according to a Bloomberg report by Hugo Miller. Bloomberg

Merrill Lynch has appointed Eugene McQuade vice chairman and president of the U.S. banking unit. Mr. McQuade’s impressive resume includes, most recently, being president and COO of Freddie Mac, president of Bank of America and FleetBoston Financial, controller of Manufacturers Hanover and an accountant at KPMG Peat Marwick. WSJ
http://online.wsj.com/article/SB120399977403893057.html?mod=todays_us_marketplace

Wal-Mart’s international sales rose 17.5% last year compared with 6% growth for its U.S. stores. $9 billion of its goods will come from China in 2008. WSJ
http://online.wsj.com/article/SB120400092038893179.html

IBM is launching its new mainframe computer line, Z10, which it says is more energy efficient and smaller. New hardware will drive software sales, although, according to Steve Mills, head of IBM’s software business, “more than half of IBM’s software products now run on other types of machines, but the mainframe “is still a large percentage of our software business.” The Z10 should lure new buyers in India and China where energy efficiency is an issue. Last year, hardware comprised 22%, or $21.31 billion, of IBM’s total revenue, down 3% from the prior year. WSJ
http://online.wsj.com/article/SB120399023001892449.html

The Centers for Medicare and Medicaid Services predict that the government’s health-care spending will grow annually by 6.7% over the next decade, to $4.3 trillion, due to rising medical prices and increased usage. The government’s spending on health care will nearly double, reaching $2 trillion by 2017. Medicare will account for 20.7% of national health spending. WSJ
http://online.wsj.com/article/SB120399640594392887.html
http://www.cms.hhs.gov/NationalHealthExpendData/downloads/proj2006.pdf

According to the Boston Globe, average daily gasoline consumption in the United States has decreased in each of the past four weeks from a year ago, according to data from the Energy Department. “In the past six months, average daily consumption slipped two-tenths of a percent from a year earlier, after growing 2.5 percent in the previous year.” The paper cites anecdotes of people carpooling and limiting their driving as reasons for the decline. Boston Globe
http://www.boston.com/business/personalfinance/articles/2008/02/24/gas_costs_forcing_drivers_to_cut_back/

Sources: Hartford Courant, Wall Street Journal, USAToday, Boston Globe, Bloomberg News

SKY News Summary 2-22-08

Muhtar Kent, who will become Coke’s CEO in July is being nominated to run for a board seat at the shareholder meeting in April. Mr.Kent succeeds Neville Isdell who is retiring in June. Mr. Kent holds dual U.S. and Turkish citizenship and was most recently president and COO of Coca-Cola International. In Nov. 1996, Mr. Kent says that, without his consent, his financial adviser sold 100,000 short Amatil shares (he was managing director at the time), before a profit warning. After an investigation by the Australian Securities Commission, he reached a civil settlement of the issue. WSJ
http://online.wsj.com/article/SB120365584475385417.html

Intel has changed its business model somewhat by designing and manufacturing a very small chip for low-end computers. The chip is smaller than a penny and because of its size, is expected to be less expensive to produce. Apparently, production costs of a chip are determined by how many steps are needed to add and remove layers of chemicals and metals on silicon wafers. Intel expects to manufacture 2,600 chips from a single 12-inch wafer, compared to 600 ordinary-sized chips. The bigger number of chips will mean a higher profit margin. WSJ
http://online.wsj.com/article/SB120360723783683021.html?mod=todays_us_marketplace

Yesterday’s SKY News reported that GE was trying to eliminate its consumer-finance unit in Japan. Citigroup is following suit, as the company closed 273 consumer-finance branches in Japan in 2006, then decided to leave the business altogether. Citigroup is looking to reduce its consumer-finance business in Mexico and the U.K. as well. It still retains about 2,200 consumer-finance branches outside the U.S. The company is hoping to reduce its presence in countries with slow growth or weak economies such as Japan, and increase its business in countries with a growing middle class, such as Thailand, Russia and the Middle East. WSJ
http://online.wsj.com/article/SB120344184522877119.html?mod=todays_us_money_and_investing

Wal-Mart has joined with India’s Bharti Enterprises to break into India’s $300 billion retail market by opening15 cash-and-carry stores in the next seven years. Indian law prohibits a foreign company from selling directly to consumers, so Wal-Mart will be selling to retailers, hotels, hospitals, and other businesses. WSJ
http://online.wsj.com/article/SB120351252535679893.html

Carbon offsets (one carbon offset equals one ton of CO2) are becoming big business. Almost 400 start-up companies are operating 600 carbon-mitigation projects in the U.S. with the number of companies tripling in the next two years, according to the USA Today. “The voluntary market for U.S. offsets is still meager, though it more than doubled last year to $150 million to $200 million, says research firm Ecosystem Marketplace.” That compares to $10 billion in Europe, where the Kyoto treaty places mandatory limits on carbon emissions. “Sales in the USA, the world’s biggest carbon emitter, could be as high as $175 billion by 2020 if a federal cap is approved, says research firm New Carbon Finance.” Offsets cost between $3 and $8 but are expected to be $25 by 2020, pushing electric rates up by 45% and gasoline prices up by 25 cents a gallon. American Electric Power, this county’s largest coal-fired power generator and biggest greenhouse emitter, agreed to buy 4.6 million carbon credits from Environmental Credit from 2010 to 2017. Environmental Credit will create these carbon offsets by burning methane produced by the manure of 400,000 cows at 200 farms. Methane, which is 21 times more harmful to the atmosphere than CO2, comprises 6.6% of U.S. greenhouse emissions. Environmental Credit will be spending $25 million on equipment for this project, while another carbon credit company, Blue Source, will spend $70 million to capture gases emitted from a Kansas fertilizer company and ship the gas to oil companies looking to increase the oil output from oil fields. Another company, Equator Environmental will plant trees at a cost of $1,000 per acre. Deforestation accounts for 20% of greenhouse emissions. USAToday
“Profit-minded companies get inventive to fix greenhouse gas problem”

Sources: The Wall Street Journal, The Hartford Courant, USA Today

SKY News Summary 2-21-08

In 2002, Applied Materials made a sizeable investment in its Mayden Technology Center in Sunnyvale, CA. That investment paid off yesterday when Spansion (www.spansion.com) a leading Flash memory provider in wireless, automotive and consumer electronics, chose Applied Materials’ joint venture, Sokudo to equip its new manufacturing facility. Spansion emphasized the proximity of its new facility to the Applied Materials Center, where Sokudo’s manufacturing is based, as a reason for their choice. (Applied Materials and Dainippon Screen Mfd. formed their joint venture, Sokudo, in 2006 to manufacture, sell and service coat/develop track equipment for semiconductor production). Applied Materials website
http://www.appliedmaterials.com/news/pr2008.html?menuID=6

UBS will propose that its Board members serve for one year. UBS website
http://www.ubs.com/1/e/about/newsalert?newsId=136796

Spectra Energy’s Texas Eastern project is committed to providing natural gas to the Northeast corridor. During the past six years, Texas Eastern Transmission has expanded its system there by 15% and is now able to move more than 4 billion cubic feet of gas per day from Ohio to the Northeast. Last Tuesday, Spectra signed a precedent agreement with shippers on its Northern Bridge project that expands the Texas Eastern project further by transporting up to 150 million cubic feet per day of Rocky Mountain natural gas to the Northeast. Spectra website
http://investors.spectraenergy.com/phoenix.zhtml?c=204494&p=irol-newsArticle_print&ID=1109942&highlight=

Proctor & Gamble and Reliance Products, based in Canada, announced a new, low-cost water treatment package available at U.S. retail stores. It is the only powdered water treatment product sold in the U.S. and is effective in killing bacteria, viruses and pollutants and would be useful in disaster relief packages. P&G website
http://phx.corporate-ir.net/phoenix.zhtml?c=104574&p=irol-newsArticle&ID=1025474&highlight=

Wholesale drug prices for the 50 top-selling branded drugs increased by 7.82% in 2007, after increasing 6.73% in 2006 and 6.22% in 2005. The Wall Street Journal quoted Anthony A. Barrueta, vice president at Kaiser Foundation Health Plan, as saying that, “branded drugs account for less than 20% of the large insurer’s prescriptions but more than 85% of its drug costs.” The price of Lipitor, made by Pfizer, increased 16%, while Ambien, made by Sanofi-Aventis rose 70.1% The Wall Street Journal reports, that “in some instances, drug makers are raising prices on medications that are due to lose patent protection so that customers will switch to-and continue to buy-similar, newer products that enjoy market exclusivity well into the future.” Ambien CR, for example, is a lower-cost replacement for Ambien which came off patent last year. WSJ
http://online.wsj.com/article/SB120355185318681367.html?mod=todays_us_marketplace

So far this year, 13 publicly-traded companies with assets of $7.7 billion have filed for bankruptcy protection. Fortunoff, Sharper Image, and Lillian Vernon are prime examples. The largest dollar value of bankruptcies ($64.9 billion) occurred in 2002. USA Today
http://www.usatoday.com/money/industries/retail/2008-02-20-sharper-image_N.htm

PepsiCo plans to buy back $4.3 billion shares in shares this year. The company also announced a 10-year ad deal,costing about $100 million, which includes a gigantic Ferris wheel sign at New Jersey’s Xanadu center. The company’s selection of an outdoor venue for advertising is indicative of renewed interest in ads that are not on TV. A new study found that, with the advent of digital video-recording and ad-zapping, television advertising has become less effective. According to the Wall Street Journal, “the study found that 62% of marketers believe TV ads have become less effective in the past two years. Nearly half said they have started experimenting with new ad formats that take advantage of emerging technologies and help blunt the effect of DVRs.” WSJ
http://online.wsj.com/article/SB120356123507581975.html
http://online.wsj.com/article/SB120356476124381949.html?mod=todays_us_marketplace

Arizona Public Service, a subsidiary of Pinnacle West Capital, announced its plans to build one of the world’s largest solar energy plants 70 miles southwest of Phoenix. Abengoa Solar will build the plant, which will not emit greenhouse gases and will provide more solar electricity per customer than any utility in the U.S. The plant should be completed by 2011. APS website
http://www.aps.com/general_info/newsrelease/newsreleases/NewsRelease_440.html

Pfizer agreed to buy Encysive Pharmaceuticals for $195 million, to acquire a drug, Thelin, which treats high blood pressure in the lungs, and is currently sold in Europe. Encysive applied for approval from the FDA three times, and now has Pfizer’s support in its efforts. HC
http://www.courant.com/business/hc-natbizdigbrf0221.art6feb21,0,1228135.story

GE expects to sell its Japanese consumer financing unit by the end of the third quarter. It also said that it recorded an after-tax loss of $908 million on the sale of GE Consumer Finance, closed on the sale of its U.S. mortgage business in December for $117 million in cash (after reporting an after-tax loss of $62 million on the sale for 2007) and announced its exit from the subprime mortgage business in July. HC
http://www.courant.com/business/hc-bizdigbrf0221.art1feb21,0,2360549.story

Sources: Viacom, Spectra Energy, UBS, Applied Materials, APS and Procter & Gamble websites, and The Hartford Courant, The Financial Times, USA Today, and The Wall Street Journal.

Market Thoughts 2-21-08

Market Ebbs and Flows

After sharp declines in the markets last month, the trends in February have shown more stability. Not that market volatility has greatly diminished, but month-to-date returns have been pretty flat following the 6% decline in January’s S&P 500 Index. This might suggest that the market’s worst days are behind us, or it might not. Such a debate is being seen in the stock market’s recent moves. On the one hand, we can argue (and happen to believe) that the lows in the market have already been seen, and that market growth will resume later this year. On the other hand, more write-offs are still likely in the financial sector and surprisingly large charges may put the markets into another tail spin. The markets are trying to digest the current news and chart a definitive direction.

Certainly, many are focused on a recession and the prospect that one may have already begun. But conflicting economic data is also raising questions. Recently released corporate earnings were actually very good if one excludes the sharp charges that were seen in the financial sector. The Federal Reserve has actively lowered interest rates, and further rate cuts are still predicted. Yet economic growth rates are being questioned, while export volumes and plant capacity utilization rates continue to remain healthy. Rates of inflation are also a point of concern as noted with the release of yesterday’s consumer price index.

Meanwhile the concerns about the mortgage markets continue, with weak trends being seen in both mortgage applications and housing starts. And the market for loan securitizations remains mostly closed. Accordingly, the weekly economic data is receiving much scrutiny as investors search for defining details and try to discern if the contraction in credit is impacting economic activity, particularly among consumers.

More information will be received, and market trends will bounce around accordingly. In three or four weeks, Wall Street’s investment banks will release earnings for their first quarter that ends in February. Investors will scrutinize their words and the mark to market impacts on their balance sheets. We at SKY will also be paying attention as we decide which stocks are worth buying and when. With volatility high, opportunities to accumulate quality companies at good prices will arise. We remain committed to using these opportunities to enhance client portfolios through a fundamental research and value driven wealth management process.

SKY News Summary 2-19-08

CBS purchased SignStorey Digital Media last October, renaming it CBS Outernet, to become a major player in the ‘out-of-home media’ category. This is the type of targeted media you see in WalMart stores, auto repair shops or on airplanes when they show you clips of ’60 Minutes’ followed by an ad for an item related to the environment you are currently in. CBS management claims that “research has shown that 30% of consumers make unplanned purchases because of an in-store television network.” The network is currently installed in over 1,400 stores nationwide, including Sears, Acme, Big Y and WalMart. This month, CBS strengthened its commitment to ‘out-of-home’ media by expanding its advertising opportunities through a partnership with Ripple. It is interesting to note that, “CBS’s mobile sports and news Web sites already produced close to 75 million page views and 5 million unique users in Q4 2007, making CBS Sports Mobile (wap.cbssports.com) one of the highest-traffic ad-supported mobile Web sites in the U.S.” CBS web site
http://www.cbscorporation.com/news/prdetails.php?id=17881&pe=1

Verizon doesn’t have enough HD TV high-definition set-top boxes and HD digital video recorders to meet demand in certain markets given the run on these products, which are made by Motorola, during Christmas and prior to the Super Bowl. Verizon is offering its new FiOS television service, highlighting the depth of its high-definition programming, to compete with cable companies that are now offering phone service. WSJ
http://online.wsj.com/article/SB120338661121776043.html?mod=todays_us_personal_journal

Medtronic reported third quarter earnings today. Their third quarter ended January 25th, 2008. Revenue was $3.405 billion, which was a 12% increase from the same time last year. Non-U.S. revenue grew 20%, due in part to a $117 million benefit from currency translation. Net earnings for the quarter were $77 million. The biggest growth came from its spinal division which had revenue of $808 million, up 35%. ($147 million of that came from the acquisition of Kyphon). Medtronic web site
http://wwwp.medtronic.com/Newsroom/NewsReleaseDetails.do?itemId=1203423740639〈=en_US

HP also reported earnings today. Net revenue for the 1Q, ended January 31 was $28.5 billion, up 13% from a year earlier and up 8% when adjusted for the effects of currency. Revenue from the Americas accounted for $11.2 billion, while revenue from Europe, the Middle East and Africa accounted for $12.3 billion. The fastest growth was from the Asia Pacific region which contributed $4.9 billion to revenue, a 22% increase from last year. Notebook revenue for the quarter grew 37%, while desktop revenue grew 15%. HP web site
http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-newsArticle&ID=1109844&highlight=

The world’s second-largest bond insurer, Ambac, is contemplating moves to help it retain its top credit rating. One of these moves may be to split itself into its municipal-bond business and its structured-finance business. As the Wall Street Journal points out, such a split “would pit policyholders and shareholders against both each other and regulators, and rankle investors, some of whom have been wagering through the credit-derivatives market that bond insurers would fail and default on debt.” WSJ
http://online.wsj.com/article/SB120338337001275813.html?mod=todays_us_money_and_investing

Fannie Mae and Freddie Mac will not be allowed to trade large loans in the market where mortgage-backed securities are traded before they are issued, the so-called “to be announced market”. Loans larger than $417,000 will be packaged and sold separately.
http://online.wsj.com/article/SB120339775049076439.html

Sources: The Wall Street Journal, The Hartford Courant, USA Today, the Hewlett Packard, Medtronic, and CBS web sites.

SKY News Summary 2-15-08

Non-petroleum imports, especially autos and consumer goods, fell by 1.1% in December, the first time in four months. At the same time, exports rose by 1.5% to $144.3 billion as a weaker dollar spurred foreign demand. (Since 2002, the dollar has lost 24.6% of its value against global currencies and 37.1% against the euro). Exports to China and South America reached record highs while civilian-aircraft exports rose 33.1% due mainly from sales at Boeing. Lower imports and higher exports resulted in the first reduction in the trade deficit since 2001. Imports exceeded exports by $711.6 billion in 2007, 6.2% less than in 2006.The U.S. trade deficit with China narrowed slightly to $18.8 billion in December from $18.9 billion a year earlier. Still, the U.S. trade gap with China was a record $256.3 billion for the whole year, and China replaced Canada as our number one source of imports. However, Canada and Mexico bought more U.S. goods than China did. WSJ USA Today
http://online.wsj.com/article/SB120299519095568409.html?mod=todays_us_page_onehttp://www.usatoday.com/money/economy/2008-02-14-trade_N.htm

New episodes of “The Office” air April 10, while ABC’s Grey’s Anatomy, and Ugly Betty air by the end of May. WSJ
http://online.wsj.com/article/SB120303589685370159.html?mod=todays_us_marketplace

Freddie Mac reported that the 30-year mortgage rate, fixed-rate mortgages averaged 5.72%, slightly higher than last week, and the highest in the past five weeks. The 15-year rate was 5.25%, up from 5.15% last week. The company expects to see a turnaround in home sales in the middle of the year, after the inventory of homes now on the market is reduced. USA Today
http://www.usatoday.com/money/economy/housing/2008-02-14-mortgage-rates_N.htm

Warren Buffett has made some portfolio changes in Berkshire Hathaway, now holding 132.4 million shares of Kraft and 1.5 million shares of GlaxoSmithKline as of Dec. 31, 2007. He also purchased more shares of Carmax and Wells Fargo. USA Today
http://www.usatoday.com/money/markets/2008-02-15-buffett-berkshire-kraft-glaxo_N.htm

Sources: The Wall Street Journal, The Hartford Courant, USA Today, The Financial Times

SKY News Summary 2-14-08

It seems global warming has some economic benefits. Shrinking ice caps have opened up shipping lanes and resource development that were previously unavailable. Who owns the development rights to these newly-accessible areas is being hotly disputed. The Law of the Sea gives a country rights to resources beyond the normal 200 nautical miles if the country can prove its continental shelf extends further. New mapping data from the National Oceanic and Atmospheric Administration seems to prove that a section of the Chukchi Sea falls within the U.S. claim although some of the shelf may overlap with Canada. The U.S. is the only Arctic nation that has not signed the Law of the Sea, although Bush is pushing for its approval. It is estimated that as much as 25% of the world’s undiscovered oil and gas are beneath the Arctic seabed.
http://www.msnbc.msn.com/id/23117418/print/1/displaymode/1098

A study by UBS Securities and the International Council of Shopping Centers found that 43% of individuals receiving stimulus package checks will use the money to pay off debt, and 26% will save the money. In the words of the ICSC chief economist, “Lenders will see the money before the retailers. But about $25 billion will head into the spending stream, and that is positive.” USA Today
http://www.usatoday.com/money/economy/2008-02-13-stimulus-effect_N.htm?loc=interstitialskip

Federal spending on benefits to seniors was 34.9% of 2007’s budget, compared with 20.2% for defense. USA Today reported that, “The cost of benefits per senior–not the growth in the elderly population—accounted for two-thirds of increased spending on Social Security, Medicare and Medicaid. The average benefit per senior grew 24% from 2000 to $27,289 in 2007.” “Medicare grew 55% in average payments per senior from 2000 to 2007 after adjusting for inflation.” USAToday
http://www.usatoday.com/news/nation/2008-02-14-senior-charticle_N.htm

Developing countries account for 21% of IBM’s sales, and the company has turned its focus to 50 of these countries that will provide for future growth. Mr. Palmisano, CEO of IBM, in an interview with the Wall Street Journal, says he looks for people getting credit cards, buying cellphones, and buying cars, as indications that the developing country is evolving a consumer class. Then, “we do infrastructure. We do back offices. We do banking systems. We do telco billing. We do call centers. It’s growth where there’s good profit opportunity – not low-margin areas…Egypt’s growing like crazy. We have a huge software laboratory in Egypt…Egypt is one of the largest populations in the Middle East and has a government that’s trying to modernize its economy.” WSJ
http://online.wsj.com/article/SB120294821421766713.html?mod=todays_us_marketplace

Jerker Johansson, is the new Chairman and Chief Executive of UBS’s securities and investment banking arm, making him responsible for overseeing the $18 billion write-downs of mortgage securities and other investments. He formerly headed institutional equities at Morgan Stanley. WSJ
http://online.wsj.com/article/SB120288400652165063.html?mod=todays_us_money_and_investing

Sources: The Wall Street Journal, The Hartford Courant, USA Today, The Financial Times

SKY News Summary 2-12-08

Target is pursuing “alternative ownership structures” for its credit card receivables (REDcards). The company is expected to make a decision within this quarter.
http://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=1088692&highlight=

Gilbarco Veeder-Root, a subsidiary of Danaher, has partnered with Google to provide local searches for businesses as well as directions, at gas pumps. Gilbarco’s Applause media system already provides promotions, advertisements and coupons at the fuel pumps.
http://www.danaher.com/pdf/Feature_Gilbarco_Applause_1107.pdf

Berkshire Hathaway and Berkshire Hathaway Finance Corporation announced, on February 5th, that they have begun a registered exchange offer of up to $750 million BHFC 5.125% senior notes due 2012 for 5.125% privately placed senior notes also due 2012. The new notes seem to be identical in terms as the original notes, but since the new notes are registered with the SEC, they can be traded.
http://www.berkshirehathaway.com/news/feb0508.pdf

Cincinnati Insurance Company entered the excess and surplus lines business last month through the company’s new subsidiary, The Cincinnati Specialty Underwriters Insurance Company. The new company received A.M. Best’s A (Excellent) rating in December after having been capitalized with $200 million from its parent. Excess and surplus insurance insures in excess of a certain amount, or covers businesses that cannot find insurance in the standard market due to market conditions, and can be a very profitable business.
http://phx.corporate-ir.net/phoenix.zhtml?c=110365&p=irol-newsArticle&t=Regular&id=1098263&

The retired EVP and CAO of Exelon, Pamela Strobel has been elected to ITW’s Board of Directors. She is also on the boards of State Farm Mutual Automobile Insurance Company, Domtar Corporation, and chairs the board of Ravinia Festival.
http://investor.itw.com/phoenix.zhtml?c=71064&p=irol-newsArticle&ID=1106226&highlight=

Exelon Chairman and CEO John Rowe gave a major energy policy speech at the Brookings Institution today. He stressed the need for a comprehensive government policy including a cap-and-trade system “to incorporate the costs of greenhouse gases into the marketplace”. He believes that nuclear energy is part of the solution, stating that “nuclear power today supplies the vast majority of low-carbon electric energy…and the U.S. will need at least 25-30 new reactors by 2030 if we are to succeed.” Rowe, who is the longest-serving chief executive in the energy industry, cautioned that, “the real ‘inconvenient truth’ of climate change is that addressing it won’t be cheap. He cited the Energy Information Administration estimates that the utility industry, the source of one-third of current carbon emissions, will have to invest $400 billion in new electric generation by 2030 to address climate change. $400 billion is almost as much as today’s market cap for the entire investor owned utility industry.”
http://www.exeloncorp.com/aboutus/news/pressrelease/corporate/Press+Release+-+021208.htm

Fifth Third Bank was notified on February 7 that First Horizon National Corporation will not be selling nine of its branches in Atlanta to Fifth Third. Details were not disclosed, but apparently First Horizon were not satisfied with the terms of the sale.
https://www.53.com/wps/portal/news/?New_WCM_Context=/wps/wcm/connect/FifthThirdSite/About+53/In+the+News/Press+Releases/2007/Press+Releases+020808

Halliburton announced today that it has acquired PSL Energy Services Limited, a five- year-old company, based in the U.K. that provides flange management and bolting, leak testing, hydrotesting, and pumping services with operational bases in Norway, Middle East, Azerbaijan, Algeria, and Asia-Pacific.
http://ir.halliburton.com/phoenix.zhtml?c=67605&p=irol-irhome

Sources: Target, Danaher, Berkshire Hathaway, Cincinnati Insurance, Illinois Tool Works, Exelon, Fifth Third Bancorp, and Halliburton websites, and The Hartford Courant, The Financial Times, USA Today, and The Wall Street Journal.

SKY News Summary 2-11-08

According to Men’s Fitness Magazine, the cities with the most fit people are Colorado Springs (which has the U.S. Olympic Training Center and several military bases), Minneapolis, Albuquerque, Denver and Portland, Oregon. The cities with the least fit people are Las Vegas, Arlington, San Antonio, and Fort Worth, Texas. USA Today
http://www.usatoday.com/news/health/2008-02-10-fattest-fittest-cities_N.htm

Microsoft agreed to by Danger Inc., the maker of the technology used in T-Mobile’s popular Sidekick phone. WSJ
http://online.wsj.com/article/SB120274323781658967.html?mod=hps_us_at_glance_technology

Sony Ericcson showcased its new cellphone which uses Microsoft’s Windows Mobile operating system at Spain’s Mobile World Congress telephone trade show. It follows Samsung and Motorola who also use the Microsoft software. WSJ
http://online.wsj.com/article/SB120269464485657905.html

Starbuck’s ended its relationship with T-Mobile and will begin using AT&T as its internet provider of Wi-Fi this spring. Starbuck’s card holders will have two hours of internet service free, while AT&T subscribers will have unlimited access. Other customers can sign up for wireless for $3.99 for two hours. WSJ
 http://online.wsj.com/article_print/SB120274236443758887.html

The Wall Street Journal had a great article in today’s paper, entitled, “Companies vs. Consumers: An Endgame” which pointed out that “corporate balance sheets are healthier than they have been in decades, but consumers appear to be retrenching under the weight of record levels of debt.” U.S. companies used 11.7% of their cash flow to service debt in the third quarter, the lowest level in decades, while 14% of consumer after-tax income went to pay interest and principal on debt, a record high. At the same time, the median price on homes dropped 6.5% last year. WSJ
http://online.wsj.com/article/SB120268721641057499.html

Glass used to make liquid-crystal displays for monitors and televisions is in short supply, according to Corning. There was a glut of glass panels in 2006. WSJ
In Brief -Glass Supply for LCDs Barely Meeting Demand

Some companies are rethinking their use of India as a back office in light increased costs of salaries and office space combined with a weak dollar. GE has spun off Genpact, a business-process outsourcing company, while Citigroup is rumored to be selling its Indian back office unit, Citigroup Global Services. This does not mean India will have less tech and business-process outsourcing, but rather that it will be managing its own outsourcing businesses. Outsourcing now accounts for 5.4% of the country’s GDP, up from 1.2% in 1998. WSJ
http://online.wsj.com/article/SB120268744437257531.html?mod=todays_us_page_one

In the ongoing saga of Exxon vs. Hugo Chávez, the Venezuelan President said yesterday, “If you end up freezing [Venezuelan assets] and it harms us, we’re going to harm you. Do you know how? We aren’t going to send oil to the United States.” Unfortunately, Petroleos de Venezuela relies on its U.S. refining subsidiary, Citco, to process the country’s thick crude oil. However, Mr. Chávez could be trying to spook the market, raising oil prices which would benefit his sagging political support. WSJ
http://online.wsj.com/article/SB120267713525157241.html?mod=todays_us_page_one

Netflix joins Blockbuster in announcing that it will only stock Sony’s Blu-ray HD disks, not Toshiba’s HD disks.
http://online.wsj.com/article/SB120274372837958977.html?mod=hps_us_at_glance_mm

Sources: The Wall Street Journal, The Hartford Courant, USA Today, The Financial Times