Financial Week in Review: Nov. 9-13, 2009

Monday

Kraft (KFT) officially went hostile. The food conglomerate put out a hostile bid of $16.3 billion for Cadbury (CBY) on Monday. Cadbury rejected the offer as “derisory,” however. The company said the new proposal is “of less value and lower than the current Cadbury share price.”

Plummeting Dollar Dept.: The value of the U.S. dollar fell to a 15-month low, propelling the Dow Jones Industrial Average to a new 2009 high of 10227. The average rose 204 points. And following in its footsteps, crude oil hit $80 a barrel and gold rose to an all-time high, above $1100 an ounce.

Tuesday

AIG (AIG), making progress in its plan to restructure, will likely be able to repay its government aid, according to Moody’s. AIG recently posted a quarterly profit for the second time in a row; however, its business is still weak. The results do show stabilization, though, according to Moody’s, making it likely that taxpayers will see their investment in the company returned.

Meanwhile, two Bear Stearns hedge fund managers were acquitted by a jury Tuesday. The two senior executives, Ralph Cioffi and Matthew Tannin, were charged with lying to investors during the subprime mortgage crisis. The alleged fraud, according to prosecutors, cost investors roughly $1.6 billion and almost destroyed the investment bank itself, before JPMorgan Chase (JPM) bought it.

Wednesday

The Wall Street Journal reported that AIG CEO Robert Benmosche was considering leaving the company, just three months after taking the position, frustrated by the pay regulations being imposed on the insurer (as well as several other government aid-receiving institutions). Benmosche later in the day wrote a memo to his employees, reassuring them he is “committed” to the company.

Meanwhile, Hewlett-Packard (HPQ) said it plans to buy 3Com, a computer networking company, Wednesday. In a $2.7 billion deal that’s been approved by both companies’ boards, HP will pay $7.90 a share.

And the Dow hit another recent high Wednesday afternoon, rising 44 points to close at 10291, the highest level it’s been at in 13 months.

Thursday

Intel (INTC) and Advanced Micro Devices (AMD) hugged it out Thursday, ending their antitrust and patent disputes in a settlement from Intel. Intel will pay $1.25 billion to AMD, and AMD agreed to drop all outstanding litigation against Intel. However, this didn’t prevent New York Attorney General Andrew Cuomo from dropping his antitrust suit against Intel. He said his suit is on behalf of New Yorkers who he said have been hurt because of Intel’s alleged monopolistic abuses.

Credit Troubles Dept.: The Federal Housing Administration said its capital reserves have tanked, falling below the 2% requirement mandated by Congress to just 0.53%. Heavy loan losses have hurt the agency, but it said “under most economic scenarios” it would be able to maintain reserves “above zero.” Many worry that the administration could be next in line to receive a government bailout.

Friday

Friday began with a disappointing report on consumer sentiment from teh University of Michigan. The index fell to 66.0, its weakest level in over three months, amid pessimism for job opportunities. The reading was well below the 71.0 economists were expecting.

Two former employees of Bernie Madoff were arrested Friday on charges of falsifying records. Computer programmers Jerome O’Hara and George Perez allegedly created programs and altered account records in order to hide Madoff’s scheme. They both face a maximum of 30 years in prison and fines of over $5 million, if found guilty.

Copyright 2009 by FoxBusiness.com

Tech gizmo gifts for $299 or less

Consumers looking to buy electronics for holiday gifts won't have to break the bank this season.

Droid: $199, with 2-year contract

The Droid's "iDon't / Droid does" marketing campaign has raised quite a few eyebrows because of its seemingly preposterous suggestion that Verizon's new Motorola smartphone can hold its own against Apple's iconic iconic iPhone.

But the initial reviews are in, and they've been largely positive -- some testers have even said they were pleasantly surprised with the Droid's functionality. It's the first phone to use Google's new open-source Android 2 operating system; it has 10,000 apps and a pull-out physical keyboard.

Though no one expects the Droid to overtake the iPhone in sales or market share, the Droid could serve as a nice alternative to those who prefer Verizon's much stronger 3G network to the iPhone's shaky 3G network offered exclusively by AT&T.

Still, the Droid isn't for everyone. Despite a healthy collection of apps, the iPhone blows the Droid away with 100,000 applications. And the second generation iPhone 3G can be had for $99 for those looking for a less expensive smartphone.


HP Mini 110 series: $299

Laptops are sooo 2007. Their cheaper, smaller, lighter cousins -- netbooks -- are getting better, faster and more practical.

According to James Brehm, consumer electronics analyst with Frost & Sullivan, consumers bought about 500,000 netbooks in 2007, 12 million in 2008 and will likely buy 30 million in 2009.

Most netbooks are still priced at around $350 or more, but some are creeping down below $300 for the holiday season.

One powerful option in the sub-$300 range is the HP mini 110 series, which sports a 160 GB hard drive, 1 GB of memory, Intel Atom processor, built-in Web cam and microphone. Not bad for a 2.3 lb. computer.

But, as with all netbooks, there are a few drawbacks. The HP mini is definitely not a primary PC, and there's no optical drive, which means you can't use it to watch DVDs. And if you're looking for a netbook that can run Windows 7 Starter Edition, look elsewhere -- the HP Mini 110 series is stuck on Windows XP.


PlayStation 3 120GB: $299

The PlayStation 3 isn't the cheapest video game system out there, but its recent $100price cut made it the fastest-selling one.

Sony's third generation PlayStation has had a lot of things going for it since its late-2006 release: in addition to its high-definition graphics, and fantastic game selection, it also sports a Blu-ray disc player.

But the initial $599 price tag ($499 for the smaller version) was steep, even for the most passionate gamers. As a result, the Nintendo Wii and Microsoft XBox 360 left PS3 sales in the dust.

Now, a PS3 can be had for under $300. That's not bad for just a Blu-ray player, never mind a video game system.

If you're looking for something less expensive, the Wii and Xbox 360 Arcade Console are now both available for $199, after both recently sported price cuts.


Flip Ultra: $149

Video cameras have seemingly been added to every handheld device recently, but few cell phone cameras have the clarity and ease of use of a Flip video camera.

The cool new Flip cameras sport just a few buttons, enabling users to simply point, shoot, and start recording hours of video. Want that video in high definition? $50 more will get you a Flip Ultra HD.

When you're done, you can flip the USB connector, plug the camera into your computer, and load your videos onto your computer in minutes. As a result, consumer electronics analysts say the Flip will likely drive the nail into the coffin in what was once a popular camcorder market.

But the Flip hasn't yet won the battle for home movie making. With phone camera resolution steadily improving, multi-use devices like iPods now sporting video cameras, and smartphones gaining the ability to edit videos, it is still left to be seen whether consumers will continue to shell out funds for a separate device.
___________

Source: CNNMoney.com

Cybercrime: A secret underground economy

Cybercriminals are making a killing off of stolen identities, creating their own market for buying and selling credit card and bank account information on the cheap.

NEW YORK (CNNMoney.com) -- If the word 'cybercrime' conjures up images of computer geeks trying to crash computers from their mothers' basements, think again.

Cybercrime has become a rapidly growing underground business built by savvy criminals, who buy and sell valuable stolen financial information from millions of unsuspecting Internet users every year in an on online black market.

"Most cybercriminals are very, very interested in financial gain by compromising customer accounts," said FBI special agent Austin Berglas, who supervises the Bureau's New York Internet crimes squad. "Believe it or not, there are people who fall victim to their scams, and we see it every day."

Because cybercriminals are so skilled at hacking into thousands of computers every day, the crime is potentially a billion-dollar business. If every stolen credit card and bank account had been wiped clean last year, that would have netted cybercriminals some $8 billion, according to data from Symantec, maker of the Norton antivirus software.

As a result of the lucrative payout, more and more online criminals are entering the game. In fact, the number of new Internet security threats rose nearly three-fold last year to 1.7 million.

Those cyber attacks mostly come from malware, or malicious software, that hands control of your computer, and anything on it or entered into it, over to the bad guys without you even knowing it. The most common forms of malware include keystroke logging, spyware, viruses, worms and Trojan horses.

How the deed is done. Once your information has been stolen, cybercriminals go onto an invitation-only Internet Relay Chat (like a chat group) to do commerce with other online criminals. Cybercriminals will often set up a hacker channel for a matter of days, do business, and then take it down to avoid detection. When active, hacker IRCs can get upwards of 90,000 cybercriminals talking to one another at a given time, according to Dave Cole, senior director of product management at Symantec.

Online criminals use the IRCs to sell or trade your credit card or bank account information. Credit cards are some of the cheapest commodities sold on the Internet Black Market, averaging about 98 cents each when sold in bulk. A full identity goes for just $10.

Credit cards and bank account information made up 51% of the goods advertised on the underground economy last year, up from 38% in 2007. Credit cards are most popular because they're the cheapest stolen commodity. Cards with expiration dates, CVV2 numbers and names go for more than ones with numbers only, but there is no honor in the underground online crime world -- oftentimes hackers will sell the same credit card information to multiple users, and many have already been canceled.

As a result, buyers and sellers on IRC channels will often give the information to a trusted third party for a fee. The third party will test the card information, often by charging a very nominal amount or by posing as a charity, and then verify the goods to the buyer.

After the information is purchased by a secondary criminal, that person can use a machine to print out a fake credit card with your information. But many use yet another tertiary person to wire stolen money into an overseas bank account.

That third person in the chain is usually called a "mule," who often doesn't even know he or she is part of an underground organized crime scheme. Many mules respond to the "make money from home" schemes, where stolen money is sent to their accounts, and they subsequently wire that money to an overseas account for a 10% to 15% fee.

Other mules are given phony ATM cards and are asked to retrieve cash for a small fee. But there is substantial risk involved -- law enforcement usually comes knocking on mules' doors first.

To catch a thief. The FBI is working undercover in many of these IRC channels in an effort to thwart the cybercriminals. And in many cases, captured criminals agree to work for the government in exchange for reduced sentences.

"After we make an arrest for someone cashing out at ATM machines, I'll tell them they can go to jail for 10 years or they can come work for Team America," said Berglas.

The strategy doesn't always work. Albert Gonzalez, the infamous TJ Maxx (TJX, Fortune 500) thief who stole 45 million credit card numbers and private information of 450,000 customers in 2007, was an FBI informant. He helped bring down a massive credit card theft scheme, but double-crossed the FBI, using insider information to help fellow criminals evade detection and carry out the TJ Maxx theft.

Security software also helps, but it far from solves the problem. To avoid detection, many cybercriminals will send out just a handful of viruses before modifying the code and sending it out again.

"The truth is that 'fingerprint' security technology is no longer effective," said Rowan Trollope, senior vice president of product development at Symantec. "The bad guys that got involved are organized professionals, and they figured out how to get around our technology."

Though Trollope said the new version of Norton's antivirus software helps address the problem by scanning for files' reputations, he said that Internet consumers also need know how how to keep their identities safe online.

"We do products really well, but the next step is education," said Trollope. "We can't keep the Internet safe with antivirus software alone."

______________________

Resource:

David Goldman, CNNMoney.com staff writer

Excellent Job Prospects, No Qualified Candidates

NEW YORK (CNNMoney.com) -- Despite millions of unemployed job seekers desperate for work, many open positions are languishing unfilled. The reason? Not enough candidates.

With job openings largely concentrated in specialized industries like healthcare, green technology and energy, some employers say the problem is finding qualified workers, which are in short supply. Meanwhile, they are inundated with eager candidates from other industries who lack the skills and experience that the job requires.

According to a recent survey by Human Capital Institute and TheLadders, more than half of employers said "quality of candidates" or "availability of candidates" are their greatest challenges -- despite the recession.

Mary Willoughby, the director of human resources at the Center for Disability Rights in Rochester, New York, has been trying to hire registered nurses, home health aides and service coordinators for several of the agencies that she oversees.

Many of the positions, which require specific skills and offer salaries in the range of $30,000 to $45,000, have been vacant for six months or longer.

The job postings, which appear on CareerBuilder, Craigslist and some regional sites, garner a lot of attention, she says. "We get tons of résumés from people. We are just not getting highly qualified candidates."

The problem, according to Willoughby, is that they are bombarded by résumés from job seekers without the two years or more of healthcare experience necessary. "We're seeing a lot of people trying to break into the healthcare arena," she said.

As a result, human resources spends too much time sifting through résumés for people who aren't remotely qualified, and can't find many that are. "We've gotten close to 300 résumés for a service coordinator position. Out of that we brought in four people," she said.

Those that didn't make the cut included someone with previous experience as an office clerk and a job applicant with a bachelor's in mathematics, currently employed at a café.

Willoughby recently instituted a hiring incentive program to encourage existing employees to refer viable candidates. Those responsible for bringing in new hires are eligible to receive $2,500 to $5,000, depending on the position. She has also added in a signing bonus for the new employees.

Things are even worse on the higher end of the pay scale. At wireless leasing firm, Unison Site, a position for director of lead generation, which pays $90,000-$140,000, has been open for three months, with no candidates in sight.

"With the job market the way it is, we should be able to recruit really good people and it hasn't worked quite as well as we wanted," said Joe Songer, co-founder and chief financial officer. "My problem is when I put an ad out I just get bombarded with people that aren't qualified."

They're hiring!

Typically, the jobs that are the hardest to fill are those that require unique or extensive work experience, according to management professor Peter Cappelli of the University of Pennsylvania's Wharton School of Business.

For job seekers, applying to those types of positions may be worth the off chance that one responds with a request for an interview. "They think, I've got nothing to lose," Cappelli said.

Recruiters recommend that job seekers create a targeted list of companies with a clear match to their background and tailor their experience to the job they are applying for, rather than blanketing all available job openings with the same résumé.

"Eighty percent of jobs are being obtained on personal referrals so candidates that are spending the bulk of their time sending their resume out blindly are not being the most fruitful," said Carolyn Thompson, president of CMCS, a boutique staffing firm near Washington, D.C.

Thompson advises job seekers to network within those target companies, whether in person or through social networking sites.

Without a contact at the company, résumés should highlight and emphasize any relevant experience specific to the job opening, added Jennifer Becker, market director for Ajilon Professional Staffing. "You really want your résumé to very quickly and easily reflect your relevant skills and the value you can bring to the position."

"If the client has to look for it, you are probably going to get passed over."

Asian stock markets skid amidst US economy recovery

TOKYO (AP) — Asian stock markets fell Monday after grim news about American consumers sewed more doubts about the strength of the U.S. economic recovery and sent Wall Street tumbling last week.

Exacerbating investor worries was U.S. lender CIT Group's bankruptcy filing Sunday, which dragged financials sharply lower across the region.

Japan's key Nikkei 225 stock average led Asian declines, down 2.2 percent at 9,820.92 . Hong Kong's Hang Seng index lost 1.7 percent at 21,378.17, while Australia's S&P/ASX200 was down 2.2 percent.

Benchmarks in South Korea, New Zealand, Taiwan and Singapore also fell, though the region recovered some early losses on strength in mainland China. The Shanghai Composite index was the only major market in positive territory, up 1.5 percent at 3,040.95.

On Friday, U.S. markets sold off after government figures for September showed personal spending fell 0.5 percent and personal income remained flat compared to the previous month. A drop in a key measure of consumer sentiment added to the day's troubling signs that U.S. consumers, whose voracious spending helped drive global growth before the crisis, were unlikely to resume their spendthrift ways anytime soon.

More bad news followed Sunday with CIT filing for Chapter 11 protection after struggling for months to avert bankruptcy. It was one of the biggest filings in U.S. corporate history, following Lehman Brothers, Washington Mutual, WorldCom and General Motors.

The latest U.S. developments only add to the market's confusion over where exactly the world's biggest economy is headed, analysts said.

"People have been skeptical all along (of the U.S. economy)," said Francis Lun, general manager for Fullbright Securities in Hong Kong.

"That's why you have these wild gyrations all over, because you have good figures one day and then bad ones the next day."
Financials retreated in the wake of CIT's bankruptcy.

Mitsubishi UFJ Financial Group Inc., Japan's biggest bank, lost 1 percent, while brokerage Nomura Holdings Inc. fell 2.9 percent. In Sydney, National Australia Bank Ltd. slid 3.3 percent, while HSBC Holdings was down 1.5 percent in Hong Kong.

Concerns about the U.S. outlook and the strong yen hit Japanese exporters, including Sony Corp. The issue plunged 5.6 percent, despite the company reporting a smaller-than-expected 26.3 billion yen ($289 million) quarterly loss on Friday.

The Dow fell 249.85, or 2.5 percent, to 9,712.73 on Friday. It ended October with a meager gain of 0.005 percent.

The broader Standard & Poor's 500 index fell 29.92, or 2.8 percent, to 1,036.19, and the Nasdaq composite index dropped 52.44, or 2.5 percent, to 2,045.11.

U.S. markets were headed for a higher open. Dow futures rose 42 points, or 0.43 percent, to 9,706, while S&P futures climbed 5.50, or 0.5 percent, to 1,038.50.

Oil prices were higher after a big fall, with benchmark crude for December delivery up 51 cents to $77.51 a barrel. The contract dropped $2.87 to settle at $77.00 on Friday.

The dollar was trading higher at 89.97 yen from 89.67 yen late Friday. The euro edged up to $1.4763 from $1.4714.

Microsoft CEO: IT spending won't fully recover

SEOUL (AP) — Microsoft CEO Steve Ballmer said today (Nov. 2) corporate spending on information technology will not recover to levels seen in recent years before the global economic slowdown.

"The economy went through a set of changes on a global basis over the course of the last year which are, I think is fair to say, once in a lifetime," Ballmer told a meeting of South Korean executives in Seoul.

Spending on information technology, which accounted for about half of capital expenditures in developed countries before the crisis, was unlikely to rebound fully because capital was more scarce these days, he said.

"While we will see growth, we will not see recovery," Ballmer said.

Ballmer was in Seoul to meet corporate and government officials and tout the Redmond, Washington-based company's new Windows 7 operating system. The latest edition of Windows, the software that runs personal computers, was released last month.

He said company purchases of PCs and servers were down about 15 percent globally.

"It reflects the fact that CEOs have much more tightly constrained IT budgets," he said.

Separately, South Korean technology giant Samsung Electronics Co. said it will work with Microsoft to find ways to make computers more energy efficient.

The announcement followed a meeting between Ballmer and Samsung CEO Lee Yon-woo. The company also said it will upgrade its corporate PCs worldwide with Microsoft's new operating system next year.