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Historically, young women and men who sought to thrive in publishing made their way to Manhattan. Once there, they were told, they would work in marginal jobs for indifferent bosses doing mundane tasks and then one day, if they did all of that without whimper or complaint, they would magically be granted access to a gilded community, the large heaving engine of books, magazines and newspapers.
Beyond that, all it took to find a place to stand on a very crowded island, as E. B. White suggested, was a willingness to be lucky. Once inside that velvet rope, they would find the escalator that would take them through the various tiers of the business and eventually, they would be the ones deciding who would be allowed to come in.
As even casual readers of media news know, those assumptions now sound precious, preposterous even. Calvinistic ideals are no match for macromedia economics that have vaporized significant components of the business model that drives traditional publishing.
The most popular books of the holiday season have become cat toys in a price war between online and offline retailers. Newspapers still hang onto a portion of seasonal ads, but the retail chains that place them have consolidated into a much smaller cohort, and much of their spending is bifurcated between old and new media marketing. Magazines intended to help the reader primp for Christmas parties are, in many cases, half as big as they were just a few short years ago.
Pages are down, spending is down, revenues are down, and the biggest feature of this holiday season in the media kingdom has been layoffs and buyouts at Condé Nast, Time Inc., The Associated Press, and yes, The New York Times.
(And it’s not just Manhattan-centric endeavors. Published ambition has been diminished by new realities elsewhere, most recently in the announced closing of The Washington Post’s remaining domestic bureaus. Last week, in an interview with Howard Kurtz, the executive editor, Marcus Brauchli, said it plainly: “We are not a national news organization of record serving a general audience.” Yeow.)
That feeling of age, of a coming sunset, is tough to avoid in all corners of traditional publishing. Earlier in November, the New York comptroller said that employment in communications in New York had lost 60,000 jobs since 2000, a year when the media industry here seemed at the height of its powers.
I arrived in New York that same year as part of Inside.com, a digital news site conceived to cover a media space that was converging and morphing into something wholly new. The site covered the mainstream media’s efforts to come to grips with new realities and efforts by new players to cash in on emerging technology.
Few of us could have conceived that in the next decade some of the reigning titans of media would be routed. Profligate dot-com ad money that had fattened print went away in a digital wipeout, and when digital media came back, it was to dine on the mainstream media rather than engorge it. After 2000, jobs in traditional media industries declined at a rate of about 2.5 percent annually and then went into a dive in 2008 or so. (Inside.com, an idea before its time — hey, let’s charge for high-quality, business-oriented content — disappeared after about 18 months.)
That carnage has left behind an island of misfit toys, trains whose cabooses have square wheels and bird fish who are trying to swim in thin air. The skills that once commanded $4 for every shiny word are far less valuable at a time when the supply of both editorial and advertising content more or less doubles every year.
Where do all the burgeoning pixels come from? Everywhere, and cheap at that. An outfit called Demand Media now tests headlines for reader salience and cranks out thousands of articles and videos daily that it pays about $20 apiece for.
Web crawlers grab expensive content and replicate it far away from the organizations that produce it. Various media labs are now testing algorithms that assemble facts into narratives that deliver information, no writers required. The results would not be mistaken for literary journalism, but on the Web, pretty good — or even not terrible — is often good enough.
For those of us who work in Manhattan media, it means that a life of occasional excess and prerogative has been replaced by a drum beat of goodbye speeches with sheet cakes and cheap sparkling wine. It’s a wan reminder that all reigns are temporary, that the court of self-appointed media royalty was serving at the pleasure of an advertising economy that itself was built on inefficiency and excess. Google fixed that.
Certain stalwart brands will survive and even thrive because of a new scarcity of quality content for niche audiences that demand more than generic information. The chip that was implanted in me when I arrived at this newspaper — you might call it New York Times Exceptionalism — leads me to conclude that this organization will be one of those, but the insurgency continues apace.
Those of us who covered media were told for years that the sky was falling, and nothing happened. And then it did. Great big chunks of the sky gave way and magazines tumbled — Gourmet!? — that seemed as if they were as solid as the skyline itself. But to those of us who were here back in September of 2001, we learned that even the edifice of Manhattan itself is subject to perforation and endless loss.
So what do we get instead? The future, which is not a bad deal if you ignore all the collateral gore. Young men and women are still coming here to remake the world, they just won’t be stopping by the human resources department of Condé Nast to begin their ascent.
For every kid that I bump into who is wandering the media industry looking for an entrance that closed some time ago, I come across another who is a bundle of ideas, energy and technological mastery. The next wave is not just knocking on doors, but seeking to knock them down.
Somewhere down in the Flatiron, out in Brooklyn, over in Queens or up in Harlem, cabals of bright young things are watching all the disruption with more than an academic interest. Their tiny netbooks and iPhones, which serve as portals to the cloud, contain more informational firepower than entire newsrooms possessed just two decades ago. And they are ginning content from their audiences in the form of social media or finding ways of making ambient information more useful. They are jaded in the way youth requires, but have the confidence that is a gift of their age as well.
For them, New York is not an island sinking, but one that is rising on a fresh, ferocious wave.
E-mail: carr@nytimes.com http://twitter.com/carr2n
WASHINGTON (Reuters) – Leaders from top companies including Google (GOOG.O) , AT&T (ATT.N), Disney (DIS.N) and FedEx (FDX.N) will attend a jobs summit on December 3 at the White House, a White House spokeswoman said on Sunday.
The forum is meant to help devise ways to combat double-digit unemployment guaranteed approval payday loans.
(Reporting by Jeff Mason and Susan Heavey)
WASHINGTON (MarketWatch) -- A bill that would overhaul the U.S. health-care system should have a mechanism to control costs, a Democratic senator said Sunday, a day before the Senate is expected to begin debating the measure.
Appearing on "Fox News Sunday," Sen. Evan Bayh, D.-Ind., said it's encouraging that the Senate's health-care bill begins to shrink the federal deficit.
But he said, "I think we need to have an enforcement mechanism in there, as best we can, to ensure that future Congresses will have the backbone to put some of these efficiencies into place."
Bayh also said that covering those who now lack insurance shouldn't raise the price of coverage for those who have it.
Senators return to Washington on Monday from a week-long Thanksgiving break and are expected to begin debating Senate Majority Leader Harry Reid's health-care reform bill. Reid needs the support of all 58 Democrats and the Senate's two independents for the bill to pass.
Overhauling the U fast cash loans.S. health-care system is President Barack Obama's top domestic priority, and he is seeking to sign a bill this year.
Congressional Republicans have been almost unanimous in opposing the White-House-backed overhaul. Also appearing on "Fox News Sunday," Sen. Jon Kyl, R.-Ariz., said his party wants to "start over" on the legislation.
"There's no way to fix this bill," he said.
Reid's bill seeks to extend insurance coverage to 94% of Americans; requires most people to buy insurance or pay a fine; gives subsidies to poorer Americans to help them buy insurance, and sets up the public health-insurance option to compete with private insurers, among other features.
Bayh said he hopes to be able to vote for "a good bill.
"I don't think we can afford to do nothing," he said.
NANJING, China (Reuters) – A gradual, orderly rise in the yuan against all major floating currencies is in the interest both of China and of the world economy, senior euro zone officials said on Sunday.
Luxembourg Prime Minister Jean-Claude Juncker, who chairs the Eurogroup of euro zone finance ministers, said he understood why China had halted the appreciation of its currency during the global credit crunch.
Nor was there a need for a dramatic rise in the yuan's exchange rate from one day to the next, Juncker told a news conference in the eastern Chinese city of Nanjing.
But, speaking after a day of talks with Premier Wen Jiabao and other senior Chinese officials, he said it was tough to justify the yuan's recent depreciation against a basket of currencies in light of China's fast economic growth and bulging external surpluses.
European Central Bank Governor Jean-Claude Trichet said Chinese officials had promised to keep implementing the currency reforms launched in July 2005, when Beijing ended a peg to the dollar and said it would let the yuan float in a managed band with reference to a basket of currencies no fax pay day loan.
The yuan rose 21 percent in total against the dollar in the following three years until China effectively repegged the exchange rate last July around 6.83 per dollar to help its beleaguered exporters.
Juncker said Chinese officials had explained that it was tough to convince their domestic audience to back an immediate resumption of the yuan's rise. And Trichet said he did not read recent comments by the Chinese central bank as suggesting such a move was imminent.
But Joaquin Almunia, the EU's commissioner for economic and monetary affairs, said the euro zone delegation had been told that an eventual resumption of the yuan's appreciation would be part of China's strategy to pull back from the pro-growth policy stance it adopted a year ago.
(Reporting by Simon Rabinovitch and Chris Buckley; Writing by Alan Wheatley; Editing by Mike Nesbit)
NEW YORK (Reuters) – The Obama administration plans to announce on Monday a campaign to press mortgage companies to reduce payments for many more struggling homeowners, The New York Times reported in Sunday editions.
"The banks are not doing a good enough job," the Times quoted the Treasury Department's assistant secretary for financial institutions as saying in a Friday interview.
"Some of the firms ought to be embarrassed, and they will be," Michael Barr told the newspaper.
While lenders in recent months have stepped up the pace of mortgage payment cuts for financially troubled borrowers, the Times reported there was increasing evidence that the $75 billion taxpayer-funded effort to fight foreclosures was heading for trouble.
Most of the loans modified under the program remain in a trial stage, and only a small percentage have become permanent.
According to the report, Capitol Hill aides in close contact with senior Treasury officials say a consensus has emerged at the department that the program has proved inadequate one hour payday loans.
Barr told the newspaper that Washington would try to shame the lenders by publicly naming institutions that fail to move quickly enough to lower mortgage payments permanently. The Treasury Department also will not pay the lenders promised cash incentives until the payment cuts become permanent, he added.
"They're not getting a penny from the federal government until they move forward," he told the newspaper.
White House spokeswoman Jennifer Psaki told the Times the administration would continue to refine the mortgage program as needed. "We will not be satisfied until more program participants are transitioning from trial to permanent modifications," she was quoted as saying.
White House officials could not immediately be reached for comment.
(Writing by Chris Michaud; Editing by Peter Cooney)
WASHINGTON – The Obama administration, battling a foreclosure crisis that shows no signs of relenting, will step up pressure on mortgage companies to do more to help people remain in their homes, officials said Saturday.
The administration will announce its expanded program on Monday, Treasury spokeswoman Meg Reilly said.
"We are taking additional steps to enhance servicer transparency and accountability," Reilly said. She said the goal was to increase the rate that troubled home loans were converted into new loans with lower monthly payments.
Industry officials said the new effort would include increased pressure on mortgage companies to accelerate loan modifications by highlighting firms that are lagging in that area.
The Treasury is also expected to announce that it will wait until the loan modifications are permanent before paying cash incentives to mortgage companies that lower loan payments.
Under the $75 billion Treasury program, companies that agree to lower payments for troubled borrowers collect $1,000 initially from the government for each loan, followed by $1,000 annually for up to three years.
The government support, which is provided from the $700 billion financial bailout program, is aimed at providing cash incentives for mortgage providers to accept smaller mortgage payments rather than foreclosing on homes.
The program has come under heavy criticism for failing to do enough to attack a tidal wave of foreclosures. Analysts said the foreclosure crisis is likely to persist well into next year as high unemployment pushes more people out of their homes.
Rising foreclosures depress home prices and threaten the sustainability of the fledgling economic recovery.
A report last week from the Mortgage Bankers Association found that 14 percent of homeowners with mortgages were either behind on payments or in foreclosure at the end of September, a record level for the ninth straight quarter.
The Congressional Oversight Panel, a committee that monitors spending under Treasury's bailout program, concluded in a report last month that foreclosures are now threatening families who took out conventional, fixed-rate mortgages and put down payments of 10 to 20 percent on homes that would have been within their means in a normal market.
Treasury's program, known as the Home Affordable Modification Program, "is targeted at the housing crisis as it existed six months ago, rather than as it exists right now," the report said.
Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, said the industry supported many of the changes Treasury was proposing.
But he said the foreclosure problem, which began with heavy defaults on subprime mortgages, was expanding to more traditional types of mortgages because of unemployment which has now hit a 26-year high of 10.2 percent.
"The subprime problem has regrettably morphed into an unemployment problem," Talbott said. He said there was no government program to help the unemployed who are in danger of losing their homes but "many private lenders are modifying loans for the unemployed on their own."
Treasury's Reilly said the expanded program would, among other steps, make more aid available to struggling borrowers and expand the number of organizations providing help.
___
Associated Press writer Jim Kuhnhenn contributed to this report.
Opaque markets breed insider profits and abuse of investors. Sunshine can bring competition and lower costs even if regulators do little beyond letting the sunlight shine.
You might think that as Congress considers just how much regulation is needed for the shadow financial system — the one that largely escaped regulation in the past — letting in such light would be an easy and uncontroversial move.
But it is not proving to be easy at all, and is one part of the Obama administration’s financial reform package that is most in jeopardy.
Timothy Geithner, the secretary of the Treasury, will testify before the Senate Agriculture Committee next week in an effort to hold on to important provisions of the proposal that have come under attack by banks fearful of losing one of their most profitable franchises — the selling of customized derivatives to corporate customers. Remarkably, the banks have persuaded customers that keeping the market for those products secret is in their interest.
Last week, Gary Gensler, the chairman of the Commodities Futures Trading Commission, faced the same panel, and ran into questions that indicated at least some senators were sympathetic to efforts to keep large parts of the derivatives market in the dark.
Those markets allow companies to bet on — or, if you prefer, hedge themselves against losses from — changing interest rates and commodity prices. They also allow investors to use credit-default swaps to bet on whether a company will go broke. The administration wants to standardize those products when possible, and force the trading of them onto exchanges when possible.
Banks want to whittle away the reforms if they can, and to minimize the roles of the C.F.T.C. and the Securities and Exchange Commission, experienced market regulators who have been generally kept away from over-the-counter derivatives in the past. Instead, the banks would like to leave it to banking regulators to oversee the dealers, something regulators totally failed to do in the past. Unless Mr. Geithner can persuade legislators otherwise, one of the great bank lobbying campaigns will have succeeded, in large part because some companies that buy derivatives from banks have been persuaded that their costs will rise if needed reforms were made.
The opposite is probably true. The history of nearly all markets is that customers suffer if dealers are able to keep them ignorant of what is actually going on.
Until the beginning of this decade, that was true in the corporate bond market, where actual trades were kept confidential. That made it easy for bond dealers to charge big markups when they sold bonds to customers.
After regulators forced timely disclosures, the bid-ask spreads — the difference between what customers paid when they bought bonds and what they could get when selling them — declined significantly. The result was smaller profits for bond dealers, and better returns for bond investors.
“It is now time,” Mr. Gensler testified, “to promote similar transparency in the relatively new marketplace” for derivatives traded over the counter.
“Lack of regulation in these markets,” he added, “has created significant information deficits.”
He listed “information deficits for market participants who cannot observe transactions as they occur and, thus, cannot benefit from the transparent price discovery function of the marketplace; information deficits for the public who cannot see the aggregate scope and scale of the markets; and information deficits for regulators who cannot see and police the markets.”
In the listed markets for derivative securities, like futures, there are margins that must be posted every day if markets move against the buyer of the derivative. Corporate customers of over-the-counter derivatives fear that they might face similar margin requirements if their contracts were to be traded on exchanges, and have persuaded some legislators that would be horrible.
Of course, because prices aren’t made public, we can only hope that the banks currently are pricing the credit at reasonable levels. The banks say they are. Robert Pickel, the chief executive of the International Swaps and Derivatives Association, an industry group, assured me this week that “the cost of credit is taken into account in the collateral relationship and in the bid-ask spread.”
In layman’s terms, that means that customers with worse credit would face different prices than customers with excellent credit, which Mr. Pickel argued would make price disclosure of limited value.
Mr. Gensler, the C.F.T.C. chairman, argues that customers would be better off if the two markets — for the derivatives and for the credit — were separated and had clear pricing. “How else,” he asked in an interview, “can customers know if they are getting fair prices?”
Remarkably, big corporations like Boeing, Caterpillar and many others that use derivatives to hedge risk have been persuaded by bankers that they should not worry about that.
1 2 Next Page »Floyd Norris comments on finance and economics in his blog at nytimes.com/norris.
High & Low Finance: Keeping Derivatives in the Dark
Hot News: Business Briefing | Legal: Reader’s Digest Turnaround Plan AdvancesCHICAGO (Reuters) – A focus on bargains pulled U.S. shoppers into stores and onto websites over the Thanksgiving holiday weekend, but many said they would stick to their budgets and avoid purchases if they couldn't find a good deal.
Shoppers turned out in force on Black Friday, the day after U.S. Thanksgiving, and returned on Saturday for more.
Industry executives and analysts have predicted a tough holiday season that may only show a slight improvement over 2008, when retailers logged their worst holiday sales performance in nearly four decades, due to a weak economy and high unemployment.
"This will be the hardest holiday season ever to predict," said Eric Karson, associate professor of marketing at Villanova University's School of Business.
"We have this big game of chicken now evolving between the retailers and the customers," he said, referring to steep promotions on select items that were once intended to lure traffic and are now expected by shoppers. "The whole idea of the loss leader getting people into the store to buy other things may not work as well as it has in the past."
Some shoppers showed they were still relying on lessons learned from the 2008 season, which began just after a global financial crisis erupted. Armed with highly specific shopping lists, they would hunt for particular products or leave stores if they could not find the right item at the right price.
"The sales are good, but do they mark the things up beforehand? Sure, things are 25 percent, 40 percent off, but when you're starting out at $50 or $39 for a top, that's still some money," said Helene Mitauer, who shopped for herself at an Express store in Philadelphia on Friday.
An unemployment rate above 10 percent and other economic pressures also weighed on the minds of shoppers.
"I personally feel that there's a palpable difference, that it's changed," said Don Calvert, an international trade specialist at the Commerce Department, who was out by a Washington D.C. Filene's store a couple of blocks from the White House. "There are fewer people in clothing stores. There are even fewer people at electronics stores."
ONLINE SALES JUMP
More shoppers spent time online at the start of the 2009 holiday season used auto loans. They spent 35 percent more on Black Friday web purchases than a year earlier, with the average order value reaching $170.19, according to online retail analytics company Coremetrics. Those shoppers bought an average of 5.4 items per order, up from 4.6 items last year, Coremetrics said.
Coremetrics said people spent less time on each site, perhaps because they had done research ahead of time and knew where to find what they wanted. Shoppers also took a break from holiday festivities and went online on Thanksgiving.
Wal-Mart Stores Inc's site Walmart.com was the most popular retail site on Thanksgiving for the fifth year in a row, followed by Amazon.com Inc and the site for Best Buy Inc, according to tracking firm Hitwise.
"Online shopping really hurt the stores. I got so many coupons in my e-mail but you can only use them online. So people are like 'Why go to the stores?,'" said Yonaira Rodriguez, who shopped Friday at Liberty Place in Philadelphia.
Online sales are growing, but they still account for less than 4 percent of total retail sales, Karson said.
While luxury goods are expected to feel the biggest pinch this year, one jewelry store at Taubman's Cherry Creek mall in Denver said it sold a $30,000 watch on Black Friday.
Now that the Black Friday rush has passed, retailers are not letting Saturday's potential for shoppers pass them by.
Kohl's Corp, whose website shut down for a bit on Friday, advertised "Christmas Super Saturday" sales on its website and in stores.
Meanwhile, Wal-Mart hoped to lure shoppers with limited quantities of Samsung HDTVs, including a 32-inch model priced at $398. Wal-Mart also plans to host exclusive viewings of footage from Miley Cyrus's Wonder World Tour on Saturday afternoon, and said fans at some stores would get free pizza.
(Reporting by Jessica Wohl, additional reporting by Jessica Hall in Philadelphia, Nicole Maestri in San Francisco and Diane Bartz in Washington; Editing by Michele Gershberg)
Holiday shoppers keen on deals, online spending up
Hot News: Abu Dhabi to aid Dubai case by case: officialBOSTON -- D.R. Horton Inc. before Friday's opening bell reported a fiscal fourth-quarter loss of $231.9 million, or 73 cents a share, compared with $799.9 million, or $2.53 a share, in the year-ago period. The Ft. Worth, Texas-based home builder said the latest quarter's results included $192.6 million in pretax charges related to inventory and land. Home-building revenue for the September quarter dropped to $1 billion from $1.8 billion in the same quarter the previous year. D.R. Horton shares are up 73% for the year-to-date period.
Wall Street shares slid sharply on Thursday as a stronger dollar lured investors away from riskier stock markets and commodities like gold and oil.
Relatively bright economic reports did little to quell nervousness over the health of the broader economy, leaving traders wondering whether the momentum behind a remarkable stretch of gains, with the major indexes touching 13-month highs this week, was sustainable.
The losses were broad-based but most severe in financial, technology and energy stocks, which are subject to changes in the price of commodities like metals and petroleum.
In the last eight months, the weak dollar has helped propel a dazzling rally in the stock markets, as investors moved their assets into riskier equity markets in the hope of higher returns. Persistently low interest rates in the United States have made the dollar a less lucrative investment, but on Thursday, investors were snapping up the currency, sending stocks tumbling.
At the close of trading, the Dow Jones industrial average was down 93.87 points, or 0.9 percent, to 10,332.44. The Standard & Poor’s 500-stock index was down 14.9 points, or 1.34 percent, to 1,094.90 — its biggest drop this month.
The Nasdaq composite index also had its biggest decline of the month, falling 36.32 points, or 1.66 percent, to 2,156.82, after Bank of America Merrill Lynch downgraded its assessment of eight chip makers. Intel fell 4 percent and Texas Instruments fell 3.4 percent.
Jason D. Pride, director of research at Haverford Investments, said Thursday’s sell-off reflected deeper concern over the pace of economic recovery.
“Now we’re getting to the point where truly the market needs to see meat, more so than just a little bit of a flash of meat,” he said. “Any time a piece of information comes out that suggests that we don’t have a truly sustainable recovery yet, the market backs off.”
Thomas J. Lee, chief United States equity strategist at JPMorgan Chase, said traders were also looking to cash in on the year’s strong performance Low fee payday loans.
“It’s about a healthy and overdue profit-taking,” he said. “The hedge funds and investment managers are trying to move into hibernation mode from now to the year-end. A lot have had great years, and they really want to reduce risk.”
The dollar, which in recent weeks has dropped to 15-month lows, posted gains against world currencies, hovering above $1.49 against the euro.
The bond market benefited from the dollar’s gains, with the price of the benchmark 10-year note climbing 7/32 to 100 10/32. The yield was 3.34 percent, down from 3.36 percent late Wednesday.
Gold fell to $1,144.60 an ounce, down from $1,145.50 on Wednesday, and copper fell 3 cents, to $3.08 a pound. Oil dropped to $77.46 a barrel, from $79.58 on Wednesday.
Investors seemed indifferent to a Labor Department report suggesting the rate of layoffs in the United States was slowing as the number of people filing first-time claims for unemployment benefits last week held steady, meeting expectations.
Over all, the number of people continuing to claim benefits fell by 39,000 to 5.61 million the week before, slightly worse than expectations. Analysts cautioned that the drop did not necessarily mean more people were finding jobs — many Americans have exhausted unemployment benefits and are no longer included in the government’s tallies.
The relatively reassuring employment figures collided with news that AOL would reduce its work force by a third.
The Conference Board predicted economic growth over the next six months, but not at a fast enough rate to placate Wall Street. A report from the Federal Reserve Bank of Philadelphia showed manufacturing in the mid-Atlantic region grew in November at the fastest rate in two years.
MADRID -- Producer prices in Germany fell 7.6% on an annual basis in October, but were flat on the month, the Federal Statistics Office reported on Friday. In September, annual producer prices also fell 7.6%, and were 0.5% lower on a monthly basis.
German October Producer Prices Fall 7.6% Annually
Hot News: Stocks fall after weak housing data...TOKYO (MarketWatch) -- The chairman of South Korea's KDB Financial Group Inc. said Friday the state financial holding company plans to buy local banks, including Korea Exchange Bank, local news reports said.
KDB Financial has already said over the past few weeks that it was looking to acquire Korean banks or other lenders in elsewhere Asia, according to various news reports.
"We are open to various [takeover] opportunities at home and abroad, including KEB," KDB Financial chairman Min Euoo-sung was quoted as saying by Korean news agency Yonhap.
In Seoul, shares of Korea Exchange Bank, which is controlled by Lone Star Funds, climbed 1 personal loans.4% in late morning trading.
KDB Financial Group -- the holding company for the state-run Korea Development Bank and four other units -- was created in late October as part of a government plan to divest its stakes, the Yonhap report said.
Earlier this week, KDB Financial said it plans to list its shares on the New York Stock Exchange in 2012, according to Bloomberg News.
GRAPEVINE, Texas – GameStop Corp., the world's largest video game retailer, said Thursday that sales of new hot-selling games helped boost its third-quarter profit nearly 12 percent and offset a sales decline for video game hardware.
The profit narrowly beat Wall Street expectations, and shares edged up in morning trading as the broader markets sold off.
Net earnings for the quarter ended Oct. 13 were $52.2 million, or 31 cents per share, up from a profit of $46.7 million, or 28 cents per share, in the same quarter a year ago.
Excluding debt retirement costs that amounted to a penny per share, GameStop's operating profit of 32 cents per share beat the consensus estimate of analysts surveyed by Thomson Reuters, who forecast 30 cents per share, on average.
The latest quarter's profit was also near the upper end of a range of 27 to 33 cents per share that the company had forecast on Nov. 10.
Sales rose 8.2 percent to $1.83 billion — beating analysts' estimate of $1.73 billion — from $1.7 billion a year ago.
Sales of new software rose 9.4 percent, while used product sales jumped 19 percent. Those gains helped offset a decline in sales of new video game hardware. Sales at stores open at least a year — considered a key measure of a retailer's financial health — fell 7 free business cards.8 percent. That's in line with forecast the company offered last week, for a decline of 6 to 11 percent.
Shares rose 12 cents to $24.21 in morning trading.
The Grapevine, Texas-based chain, which owns 6,391 stores in 17 countries, has recently suffered from a dearth of hit games and cautious spending by consumers. But it said Thursday that new games in the latest quarter "were well-received by consumers and met or exceeded our initial sales expectations."
Those games include Electronic Arts' "Madden NFL 10," Microsoft's "Halo 3: ODST," Warner Home Video Games' "Batman: Arkham Asylum," 2K Sports' "NBA 2K10" and Nintendo's "Wii Sports Resort."
GameStop CEO Daniel DeMatteo said Activision's "Call of Duty: Modern Warfare 2" sold more than 2.5 million copies worldwide in its first 72 hours of release.
"We are optimistic that the huge success of this game will serve as a bellwether for what we can expect for the remainder of our holiday game sales," DeMatteo said.
For the fourth quarter, GameStop reaffirmed expectations for a profit of $1.47 to $1.65 per share, in line with analysts' consensus forecast of $1.57.
The Cabinet Office raised the composite index (CI) of coincident economic indicators, such as: personal income, GDP, industrial production and retail sales, from a preliminary estimate of 92.5 against 100 for the base year of 2005 to 92.7, an increase of 1.5 points from the previous month.
The office also made a slight upward revision to September's CI of lagging indicators, which measure economic performance over the recent past and track factors that change as the economy does as a whole, such as the unemployment rate and consumer confidence. It's initial forecast was upgraded from 84.5 to 84.6.
If the CI of coincident indicators rises in October the Cabinet Office will revise its economic assessment to "signaling improvements", according to the office's report Thursday low cost payday loans.
In the meantime however, its recent assessment based on the office's preliminary report, which described the index as "signaling a turning point", remains the official line from the Cabinet office.
The index of leading indicators, such as the stock market, which act as short-term predictions of the economic climate, were left unchanged by the Cabinet Office's preliminary estimate of 86.4.
The Cabinet Office with regard to future indicators concluded the economic outlook for small and medium-sized companies "suggested some improvement." Special Report: Global Financial Crisis
CHICAGO – Shoppers spent more money at low-price Old Navy stores in the third quarter, helping Gap Inc.'s profit climb 25 percent compared with last year, the retailer said Thursday.
Sales in Old Navy stores open at least a year rose 10 percent after sliding for at two years. A year earlier, for example, the figure — a key performance indicator for retailers — slipped 18 percent.
Meanwhile, the retailer said it would continue its recent marketing and advertising blitz during the holidays, including a new TV campaign for the Gap brand, its first since 2006. The company, whose other brands include Banana Republic, Athleta and Piperlime, said it will offer deep holiday discounts to lure shoppers away from competitors.
"We know the customer is really looking for value," Chief Financial Officer Sabrina Simmons told investors during a conference call Thursday. "So we're going to play hard and you'll see us really competing over Black Friday for those dollars."
Gap had seen sales dip as the recession forced shoppers to focus more on necessities and less on nonessentials like the company's long-popular jeans.
Already slimming its inventory as part of a turnaround it initiated before the economic turmoil began, Gap responded to shoppers' cutbacks by cutting even more in recent months and trimming the size and number of its stores.
It also retooled Old Navy to better cater to frugal moms and repositioned itself with new in-store marketing and more practical merchandise — and new advertising — to bring customers back to the chain.
So far, it seems to be working. The company posted its first quarterly sales increase since early 2007.
"Today the customer's psyche is, 'Give me a reason. Give me a reason to drive to the mall. Give me a reason to get out of my house,'" said CEO Glenn Murphy. "We have to find that reason."
The success of Old Navy helped Gap earn $307 million, or 44 cents per share, during the three-month period that ended Oct. 31. That compares with a profit of $246 million, or 35 cents per share, a year earlier.
The clothing chain's overall sales climbed 0.8 percent to $3.59 billion.
Analysts surveyed by Thomson Reuters expected Gap to earn 43 cents per share on sales of $3.59 billion.
Gap said Thursday that its board has authorized it to buy back $500 million in shares and that designer Stella McCartney will create a second line of children's and baby clothing for GapKids and babyGap stores. The line is to launch in March.
Gap is based in San Francisco and operates more than 3,100 stores around the globe.
Its shares fell 44 cents, or 2 percent, to $21.86 in trading Thursday.
Gap profit up 25 pct in 3Q as Old Navy recovers
Hot News: Korea Willing To Reopen Talks On Auto Free TradeWASHINGTON (Reuters) – U.S. Treasury Secretary Timothy Geithner said on Thursday that no financial firm should be able to escape regulation, and the largest institutions need oversight from a single, strong regulator.
"The regulation of the largest, most interconnected firms requires tremendous institutional capacity, clear lines of authority and single-point accountability. This is no place for regulation for council or by committee," Geithner said in testimony to the congressional Joint Economic Committee.
The Treasury, as part of sweeping Obama administration reform plans, has proposed that the Federal Reserve be given powers to oversee the largest financial firms. Geithner's comments signaled opposition to proposals favored by some lawmakers that would give this authority to a council of existing regulators.
"The stakes are simply too high to allow diffuse authorities and responsibilities to weaken accountability," Geithner added.
But Geithner did not mention the Fed by name for this role. Another plan proposed by Senate Banking Committee Chairman Christopher Dodd would create a single, overarching banking regulator.
The wide-ranging rewrite of financial rules aims to try to ensure a crisis like the one that nearly toppled the financial system last year does not happen again.
The U.S. House of Representatives Financial Services Committee has been working for weeks on a regulatory overhaul bill, and the Senate Banking Committee kicks off a similar effort on Thursday.
Geithner also said he expected U.S. economic growth to continue in the fourth quarter and into 2010, but America's long-term stability and strength could not be ensured without comprehensive regulatory reform.
"Unfortunately, the regulatory regime that failed so terribly leading up to the financial crisis is precisely the regulatory regime we have today," Geithner said in an excerpt of prepared testimony.
"That is why recovery alone is not enough. To ensure the vitality, the strength and the stability of our economy ... we must bring our system of financial regulation into the twenty-first century. We need comprehensive financial reform," Geithner said.
Geithner also said the reforms should protect consumers, allow the financial system to absorb shocks, and end the concept of institutions that are too big to fail.
(Editing by Padraic Cassidy)
Geithner: Largest firms need single regulator
Hot News: U.S. jobless claims steady last weekWASHINGTON (Reuters) – The U.S. economic recovery will be weaker than after previous deep recessions, and the high jobless rate will decline only slowly, the OECD said on Thursday.
In its twice-yearly economic outlook, the Organization for Economic Cooperation and Development said the U.S. Federal Reserve and the White House must begin to withdraw economic supports as growth becomes self-sustaining.
"Gauging the appropriate timing will not be a simple task, but prolonged stimulus risks unanchoring inflation expectations and destabilizing asset markets," the OECD said.
It pegged 2010 real gross domestic product growth at 2.5 percent, a sharp reversal from the 2.5 percent decline expected for 2009 but still not strong enough to put much of a dent in the unemployment rate, which is likely to remain above 9 percent through 2011.
After the deep U.S. recession in 1982, when GDP fell 1.9 percent, growth rebounded to 4.5 percent the following year and 7.2 percent the year after that, according to U.S. Commerce Department data.
This time, the OECD is forecasting a modest 2.8 percent rise in 2011 GDP, which would be well below the 3.2 percent average from 1997 through 2006.
Stubbornly high unemployment will keep wages down, which means household demand is not likely to increase strongly next year. The personal saving rate will probably stay well above pre-recession levels through 2011, the OECD said.
The OECD pointed out that much of the recent rebound in economic growth was a direct result of government policies, including the Fed's near-zero interest rates and a $787 billion fiscal stimulus package.
The consequence of that is a growing budget deficit that is likely to remain above 10 percent of GDP in 2010 banks issue payday loans. If persistently high budget deficits drive up long-term interest rates, that could compromise the recovery, the OECD said.
It also saw a risk that financial firms may incur greater losses than envisaged, notably on commercial real estate loans where defaults are on the rise.
On the plus side, rising stock markets and a turnaround in housing prices were helping to patch tattered household balance sheets, and that could lead to a stronger-than-expected rebound in consumer demand and a healthier economic recovery.
In Canada, the OECD said the recession seemed to have ended in the second half of 2009, although unemployment is likely to keep rising through the end of 2009.
The OECD said the Bank of Canada should hold the policy rate at its current level near zero until the end of June 2010, as it has committed, and probably beyond. But it said additional expansionary measures, including extending jobless benefits "should be resisted" to ease the budget burden.
"Instead, governments should be preparing detailed and credible medium-term fiscal consolidation plans to be announced soon and be implemented when the recovery is firmly under way," the OECD said.
As for Mexico, the OECD said its central bank will have little room to lower interest rates because of inflation pressure. It said fiscal stimulus should be gradually withdrawn if the recovery takes hold as projected. (Reporting by Emily Kaiser; Editing by Andrea Ricci)
NEW YORK (Reuters) – U.S. stocks broke three days of gains on Wednesday following worrisome outlooks from two major software makers and a surprising drop in home construction last month.
But stocks sharply cut the session's losses just before the closing bell as many investors pointed to a strong uptrend in equities that have pushed major indexes to 13-month highs in recent days. The S&P 500 has ended down only three times in the last two weeks
Business software maker Autodesk Inc (ADSK.O) was cautious about the outlook for the current quarter, while sector peer Salesforce.com Inc (CRM.N) reported a slowdown in new business. The news was a setback to investors looking for signs of a pickup in demand.
The government said housing starts declined to their lowest level in six months, weighed down by a sharp fall in construction activity for both single-family and multi-family dwellings, a sign the housing market is still under pressure.
Henry Smith, chief investment officer at Haverford Trust Co in Philadelphia, said that despite these setbacks, the equity market was experiencing tailwinds from low interest rates, government stimulus spending and signs of economic recovery.
"We are of the continued belief that right now, the tailwinds propelling the market are still outweighing the headwinds," he said.
The Dow Jones industrial average (.DJI) dropped 11.11 points, or 0.11 percent, to 10,426.31. The Standard & Poor's 500 Index (.SPX) dipped just 0.52 of a point, or 0.05 percent, to finish at 1,109.80. The Nasdaq Composite Index (.IXIC) lost 10.64 points, or 0.48 percent, to end at 2,193.14.
Autodesk shares slid 10.4 percent to $24.20 and weighed on the Nasdaq, a day after the company, which licenses software to companies on a per-user basis, warned its recovery could be hindered by more job losses. Meanwhile, Salesforce fell 3.1 percent to $63.61 on the New York Stock Exchange.
"Technology has been a strong area of the market, and those two results broke the momentum," said Nick Kalivas, vice president of financial research and senior equity index analyst at MF Global in Chicago no teletrack payday loans.
The Dow Jones U.S. Home Construction index (.DJUSHB) climbed 0.8 percent, bolstered by a Citigroup upgrade of Pulte Homes Inc (PHM.N) to "buy" from "hold." Pulte rose 4.6 percent to $10.04.
While the decline in new construction raised concerns about the recovery, it could bode well for removing remaining inventory from the market, something analysts say must happen for the housing sector to recover.
Losses were kept in check by advances in the financial sector. The S&P financial index (.GSPF) added 0.9 percent after hedge fund billionaire John Paulson said Bank of America Corp (BAC.N) stock could double in two years. Bank of America's shares rose 3.7 percent to $16.35.
Paulson made his comments in an investor note that was reported by Bloomberg News.
Analysts said the inverse correlation between the dollar and equities -- which has helped to boost natural resource stocks by lifting the price of dollar-denominated commodities -- appeared to break down.
A bevy of mining and energy shares declined, even as the dollar fell and gold hit a record high above $1,150 an ounce. Freeport McMoRan Copper & Gold Inc (FCX.N) was off 0.8 percent at $84.69, while ConocoPhillips (CVX.N) slipped 0.2 percent to $53.58.
Oil rose 0.7 percent, while the dollar fell 0.4 percent to a basket of currencies (.DXY).
Volume was light, with about 1.06 billion shares changing hands on the New York Stock Exchange, below last year's estimated daily average of 1.49 billion. On the Nasdaq, about 2 billion shares traded, below last year's daily average of 2.28 billion.
On the NYSE, declining stocks outnumbered advancers by about 8 to 7. On the Nasdaq, eight stocks fell for every five that rose.
(Reporting by Edward Krudy; Additional reporting by Leah Schnurr; Editing by Jan Paschal)
PARIS — Many people dread the moment the sommelier steps over to their table. A Bordeaux? A Burgundy? A Brunello? Or a big embarrassment in front of a group of friends or colleagues?
A new Web site set up by the promotional body for the Bordeaux wine region of France will allow wine drinkers to get a little practice the night before, in the privacy of their own homes. On the site, people can post questions to a panel of sommeliers, who answer via video chats.
The site, www.enjoybordeaux.com, is part of a €2 million, or $3 million, campaign by the Conseil Interprofessionel du Vin de Bordeaux that is aimed at lifting sales of the region’s wines in the United States, where they have fallen sharply during the recession. The campaign aims to introduce casual drinkers to wines priced at less than $35.
“Our biggest challenge is to persuade people that it’s an affordable wine,” said Arthur Ceria, the creative director at CreativeFeed, an online marketing agency that developed the campaign. “Social sippers in America have kind of an old perception of Bordeaux. They think it is expensive, hard to pronounce, hard to be educated on and only for special occasions.”
With its decorous chateaus, often depicted on the label, and complex hierarchies of quality, Bordeaux wine can indeed seem a bit stuffy. To try to overturn such perceptions, CreativeFeed, which has offices in New York and San Francisco, created a largely digital campaign aimed at appealing to younger consumers.
In addition to the Web chats, these include video ads in New York City taxis that use geographical positioning technology to show passengers the closest shops that sell Bordeaux wines.
The Bordeaux promotional board has also struck a partnership with Snooth.com, a social media site that allows consumers to score and review individual wines and helps users find them. Under the agreement, reviews and recommendations from Snooth about Bordeaux wines under $35 are being fed to the Bordeaux site.
Wine drinkers have embraced sites like Snooth, cellartracker.com and vinogusto.com in recent years, allowing ordinary fans to match spits with high-profile critics like Robert M. Parker Jr.
“We have been watching with great interest how the Internet is changing the world of wine, and the wine press,” said Pascal Loridon, marketing director of the Bordeaux wine body.
Because many people turn to the Internet before buying a bottle of wine, he said, a visible presence in these forums can translate into increased sales.
Elsewhere, a few wine producers have embraced the Web to considerable effect. Stormhoek, a South African winery, introduced its wines in the United States by sending cases to dinner parties where the hosts agreed to blog about them.
But the French wine business is highly fragmented, with thousands of small producers accounting for the majority of its output. Few of them have the financial means to mount elaborate marketing campaigns. In their domestic market, French vignerons have also faced tough legal restrictions on their ability to promote their wines online.
In the United States, French winemakers have been hurt by a weak dollar and the economic crisis. Volume exports of Bordeaux fell 26 percent in the 12 months through August, Mr. Loridon said. In terms of value, they fell 34 percent.
The plunge followed several years of recovery after the previous big decline, which coincided with anti-French sentiment in the United States during the buildup to the war in Iraq, which France opposed.
The United States remains an important market for Bordeaux — second to Britain in the value of exports, and fourth after Britain, Belgium and Germany in volume. Overall wine consumption in the United States has been on an upward trend in recent years, unlike in France and many other European markets, according to wine trade groups.
Faced with a glut of wine, even in famed regions like Bordeaux, the European Union has been taking steps to try to cut production and to increase exports. As part of that effort, it is financing half of the Bordeaux promotion in the United States.
While the campaign features some billboards, it will not include any magazine, newspaper or television ads, Mr. Ceria said, because the goal was to appeal to younger adults.
“We believe the next generation is what’s important, and we want to be where they are,” he said.
In one of the online chats last week, a visitor to the site asked one of the sommeliers, Mollie Battenhouse, to compare Bordeaux to wines from the Napa Valley of California. She gave a six-minute explanation of similarities and differences in grape varieties, climate and winemaking styles.
The format encourages people to ask wine-related questions that they might be afraid to broach at the dinner table, Mr. Ceria said.
“It’s about approachability, about not being afraid of mispronouncing a Bordeaux, without peer pressure,” he said.
The biennial Dubai Air Show is underway, with the global economy dampening expectations among those selling civilian planes. But regional tensions have led to some optimism among manufacturers of military aircraft.Emirati officials watch planes performing overhead during the Airshow in Dubai, United Arab Emirates, 15 Nov 2009Nearly 900 companies from about 50 countries have gathered in Dubai for the five-day show. Heavily-decorated military types from Western countries mingled with Arab sheikhs, while aircraft roared overhead.Orders for commercial airplanes are expected to be lower this year, as airlines cope with an expected $11 billion loss this year.America's Boeing executives in Dubai put on a brave face, saying that fulfilling back orders will keep their production lines busy. Europe's Airbus is faring better, and expects to end the show with carriers from Dubai and Ethiopia placing some much-needed orders. But increasingly this year, eyes seem focused on the show's military component.A U.S. Air Force spokesman described the maneuvers of pilots aboard its F-15e Strike Eagle."When flying low in combat, speed is life. Now, from the left, Captain Smith and Captain Cox return to show center at 300 feet and nearly the speed of sound," he said. "This capability allows the Strike Eagle to fly undetected, deep into enemy territory and deliver its ordinance."The exhibition, put on every two years in the United Arab Emirates, attracts regional buyers who have immediate and potential problems pay day loans."The problem is that the political situation in the region is still tense," said Louis Hobeika, a professor at Lebanon's Notre Dame University. "Of course, you have the Palestinian-Israeli situation, plus the Saudi-Yemen problem, plus all kinds of bilateral issues, wars or bilateral conflicts, let us say, which could really lead into war in the future."The military aspect of the show has been steadily growing, and this year is expected to make up about 40 percent of the orders.In sharp contrast to the military aspects of the show, some exhibitors appeared to revel in the pure joy of flight. The Italian display included tight formations of jets with contrails in the red, white and green of the nation's flag, the smoke forming hearts, crosses, spirals and more. "You know, Italy is famous for many things, but one of them is the wine," he said. "Try to see if you can recognize now a glass of good Italian wine.Look at them!"
As a military threat, the sight of enemy fighters taking the shape of a wine glass may not be much, but in showcasing style and finesse, the Italians delivered.
