Facebook Inc. has reportedly acquired online content publishing software start-up Chai Labs Inc.
The All Things Digital blog of the Wall Street Journal reported the deal on Sunday, saying it is likely to be in the $10 million range and is most likely a talent buy rather than a new product play by the Palo Alto social networking company.
Mountain View-based Chai Labs was founded by Gokul Rajaram, who is a former Google Inc. (NASDAQ:GOOG) AdSense executive.
Regulatory filings show that it raised $1.1 million in funding last year and $1.3 million in 2008. Among the advisers list on its website are Netscape Communications Corp. founder Marc Andreessen, LinkedIn Inc. founder Reid Hoffman and Excite co-founder Joe Kraus.
Chai Labs' technology helps publishers and journalists launch content websites.
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Maintenance and procedural problems at a Gilead Sciences Inc. manufacturing and distribution facility could land the HIV drug maker a warning letter from the Food and Drug Administration.
In a Securities and Exchange Commission filing Monday, Foster City-based Gilead (NASDAQ: GILD) said a routine FDA inspection of its San Dimas facility in February raised concerns from the agency about maintenance of aseptic processing conditions in the manufacturing area for its AmBisome anti-fungal product. The agency also cited environmental maintenance issues in the warehouse, batch sampling and the timeliness of completion of annual product quality reports.
Gilead, which said it has addressed all of the FDA’s concerns, learned in May that the agency “may be considering” issuing a warning letter as a result of the inspection, according to the SEC filing guaranteed payday loan.
A warning letter could hurt Gilead’s ability to receive export certificates or approvals of regulatory applications associated with “the products at issue,” the company said, and “decrease our revenues and harm our business.”
Gilead makes AmBisome and Cayston, a recently approved inhaled drug to treat cystic fibrosis symptoms, at San Dimas. It also fills and finishes Macugen, an injectable drug marketed by Eyetech Inc. to treat age-related macular degeneration, at the facility.
AmBisome had sales of $155.2 million in the first half, Gilead’s largest-selling drug outside of its antiviral products.
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Sales may have risen only slightly on Black Friday as U.S. shoppers sought deals on electronics, toys and clothes, but retailers appeared to have been better-prepared to protect margins against tepid results.
At the start of the U.S. holiday shopping season on Friday and through the weekend, both discount chains like Wal-Mart Stores Inc and higher-end stores like Saks Inc seemed to have lured more spending and avoided steep discounts, retail consultants and executives said on Sunday.
Specialty apparel chains, however, may face another tough year as they relied on heavy promotions to draw shoppers.
“Going through the mall on Friday, the stores that had not been doing as well — AnnTaylor, Limited, Gap — were very aggressively promoting,” said Jeff Edelman, director of retail and consumer advisory services at RSM McGladrey.
“Saks, which had low inventories, Bloomingdale’s, which had low inventories, were maybe 25 percent off or 30 percent off, and it was on selected items,” he said. “It’s not as if the entire store was on sale as it was last year.”
Edelman expects holiday sales to be flat this year, but he said he expected profits for most retailers to be higher.
For a graphic on U.S. holiday sales trends, click here
For a Reuters Insider segment on holiday sales, click on link.reuters.com/wuj63g
Data released on Saturday showed that sales rose a scant 0.5 percent on Black Friday, the day after Thanksgiving. Shoppers interviewed across the country said they were lured by bargains, but many said they would stick to their budgets and avoid purchases if they could not find a good deal.
Bill Taubman of Taubman Centers Inc said that anecdotally in his 24 malls, it appeared that traffic and spending rose in the high single-digit to low double-digit percentage range on Friday. On Saturday, business slowed, and it appeared to rise in the mid to low single-digit range.
“You’re seeing a little bit of a barbell — the low end of stores are clearly recovering and the high-end stores are also recovering against a low base,” he said.
That does not mean consumer spending is rebounding to levels in 2007, before a global financial crisis and recession.
“You’re clearly down on a two-year run rate,” Taubman said. But he added, “margins are going to be extremely good because (retailers) have been careful about what they bought.”
ShopperTrak said retail sales rose to $10.66 billion on Black Friday, which often is the single-busiest shopping day of the holiday season and can set the tone for the weeks leading up to Christmas on December 25.
In 2008, Black Friday sales measured by ShopperTrak rose 3 percent compared with the prior year’s Black Friday. Last year’s entire holiday season marked the worst performance in nearly 40 years. The firm stuck by its forecast for total holiday sales to rise 1.6 percent this year compared with 2008.
Gordon Brown and David Cameron will offer business leaders rival views of how to return the U.K. to economic growth after a poll showed the gap between their parties at its narrowest this year.
The prime minister and his Conservative Party rival will both address the Confederation of British Industry’s annual conference, starting at about 11 a.m. today in London. While Cameron said yesterday that the government needs to cut spending to avoid losing the confidence of bond investors, Brown will argue that such a course would put any recovery in danger.
“Choking off recovery by turning off the life support for our economies prematurely would be fatal to British jobs, British growth and British prosperity for years,” Brown will say, according to extracts released in advance by his office. “That’s why we will continue with our current plans to support our economy until the private sector recovery is established.”
With an election six months away at most and the country facing the biggest budget deficit since World War II, the question of when to cut spending is dominating political debate. Last month, the Conservatives pledged to freeze most public sector pay and make voters wait a year longer before they retire. Yesterday, an Ipsos-Mori poll showed their lead at six percent, putting them on course for a minority government.
Cameron told the BBC yesterday he was “working night and day” for a majority government pay day loans. “We’ve got to take some tough and difficult decisions and I’d rather have a government that could do that,” he said on the Andrew Marr show.
‘Emergency Budget’
Cameron pledged to deliver an “emergency budget” which “goes for growth” within 50 days of winning the election. The Organization for Economic Cooperation and Development last week urged Britain to do more to mend public finances as data showed the deficit in October was the worst for the month since records began in 1993.
While Brown will repeat the suggestion of a Tobin tax on banking that he aired at the Group of 20 finance ministers’ meeting earlier this month, he will say the idea could only work if adopted globally. The U.S. has rejected the proposal.
Brown will still tell bankers they must expect to pay for the costs of rescuing them.
“Make no mistake, we must agree international action to redress the balance of risk and reward between the public and the financial sector so that it reflects fully the potential damage of financial failure and the cost of preventing it,” the prime minister will say.
Home prices rose for the fourth month in a row during August and suffered a smaller-than-expected annual drop, according to a report issued Tuesday.
Prices in the S&P Case-Shiller Home Price index of 20 cities rose a non-seasonally adjusted 1.2% in August. It was the fourth consecutive monthly increase and followed a 1.6% gain in July.
Prices were down 11.3% versus August 2008, but that drop was less severe than expected. Analysts surveyed by Briefing.com had forecast an 11.9% year-over-year drop.
"Broadly speaking, the rate of annual decline in home price values continues to improve" said David Blitzer, chairman of Standard & Poor’s index committee.
While many U.S. markets remain down versus this time last year, the relative rate of decline "has shown some real improvement," Blitzer added.
Home prices improved on an annual basis in 19 of the 20 major metropolitan markets in the survey.
State by state. In California, home prices have recovered notably from depressed levels in recent months, according to the report.
Home prices rose 2.8% in San Francisco during August, while San Diego prices were up 2.5% and Los Angeles gained 1.8% in the month.
Minneapolis had the biggest increase, with home prices rising 3.2% from July to August.
But prices continued to slide in areas that have been hit hard by foreclosures payday advance low fees. Prices dropped 0.5% in Cleveland and 0.3% in Las Vegas during August.
A shaky recovery. Overall, the housing market has been stabilizing as low home prices and attractive mortgage rates, as well as government tax credits, have revived anemic home sales.
However, the market remains hampered by unemployment, which rose to a 26-year high last month. And real estate analysts warn that the expiration of a popular new homebuyer tax credit next month could stifle the rebound in home sales.
The improvement in home prices could also be hindered by a "wall of supply" coming to market this spring from private sellers and foreclosures, warned Ian Shepherdson, chief U.S. economist at High Frequency Economics.
Given the long-term challenges facing the housing market, the outlook for home prices remains grim.
Home values are predicted to drop in 342 out of 381 markets during the next year, according to a recent study by financial information and analysis firm Fiserv.
Fiserv expects the national median home price to drop 11.3% by June 30, 2010.
There will be no cost-of-living increase for 57 million Social Security beneficiaries next year because consumer prices have fallen, the Social Security Administration announced on Thursday.
It marks the first time that Social Security benefits have not been increased year over year since the cost-of-living adjustment was put into effect in 1975.
To help counterbalance the hit, President Obama is calling on Congress to send another $250 relief payment to seniors and other Americans to stem the economic strain.
"Even as we seek to bring about recovery, we must act on behalf of those hardest hit by this recession," Obama said in a statement Wednesday. "That is why I am announcing my support for an additional $250 in emergency recovery assistance to seniors, veterans, and people with disabilities to help them make it through these difficult times."
Last year, Social Security beneficiaries got a 5.8% cost-of-living adjustment, the largest since 1982, largely because of the spike in energy prices.
"This year, in light of the human need, we need to support President Obama’s call for us to make another $250 recovery payment for 57 million Americans," said Commissioner of Social Security Michael J. Astrue in a written statement.
Since there will be no COLA for benefits, the law also prohibits the Social Security Administration from increasing the maximum amount of earnings subject to the Social Security tax. This year and next, the first $106,800 of a worker’s earnings is subject to the 12.4% Social Security tax. Workers typically pay half of that and their employers pay the other half.
It’s still not clear yet what if any changes will be made to seniors’ Medicare Part B premiums for hospital care next year. The Social Security Administration said in its announcement that if there is an increase that a "hold harmless" provision in the law would protect 93% of Social Security beneficiaries from the increase.
New emergency payment similar to COLA
Obama’s proposed $250 payment is roughly equal to a 2% increase in benefits for the average Social Security beneficiary.
Congress approved a similar payment as part of the $787 billion economic recovery act enacted in February.
As with the first $250 recovery payment, the second one would be exempt from income tax, a senior administration official said in a call with reporters on Wednesday.
If approved by Congress, the payments would be sent out in 2010, most likely in the first half. "It wouldn’t be late in 2010," the administration official said.
The measure would cost $13 billion over 10 years, according to White House estimates.
The call for increased benefits for seniors is one of several proposals to expand stimulus benefits. Lawmakers are also considering extending unemployment benefits and the homebuyer tax credit, both of which were included in the economic stimulus bill passed in February.
In addition to the $250 emergency payments, the White House has also publicly supported the extension of jobless benefits as well as the extension of subsidies to help the unemployed purchase health insurance under Cobra. The president has not said yet whether he supports the expansion of the homebuyer tax credit.
Where the money will come from
The original $250 relief payment was paid out of general revenue. That would likely be the case for the second payment as well.
Obama specified that he "is committed to ensuring that the $13 billion cost of the proposal does not reduce the solvency of Social Security or other social insurance programs."
That means the $13 billion wouldn’t be deducted — on the balance sheet anyway — from the payroll taxes collected to pay for Social Security.
But it also won’t be paid for by reducing spending or raising revenue in other parts of the budget. Typically economic stimulus is exempt from rules requiring that new measures be paid for.
So if the proposal passes, it will add to the country’s annual deficit, which in 2009 was estimated by the Congressional Budget Office to have hit a record high of $1.4 trillion.
Chicago lost its bid to host the 2016 Summer Olympics Friday to Rio de Janeiro, Brazil.
The news was announced by Jacques Rogge, president of the International Olympic Committee, at a meeting in Copenhagen, Denmark.
"Like in every competition, there can be only one winner," said Rogge, just prior to announcing Rio as the host city.
With help from hometown heroes like the Obamas, the Windy City was aggressively lobbying to host the games. The upside to the rejection is that Chicago possibly saved money, as making the Olympics profitable would not have been an easy win.
Chicago was competing with Tokyo, Madrid, Spain and Rio de Janeiro in wooing the International Olympic Committee in Copenhagen.
The IOC also rejected Tokyo and Madrid Friday.
Chicago 2016, the organization leading the effort to host the games, had projected a cost of $3.8 billion, including a "rainy day" fund of $450 million in case of unforeseen increases if the city won the bid.
But there was good reason to be skeptical of that projection, said Robert Livingstone, producer of GamesBids.com and a leading expert in the Olympic selection process. Host cities routinely overrun their Olympic budgets, he said.
"It’s going to be more expensive than we think it’s going to be, because it typically is," Livingstone said, before the decision was made Friday. "I think every [host] city is going to lose money. It’s not an efficient event."
The bidding process alone cost Chicago about $100 million, Livingstone estimated.
An argument often made by host city advocates is that presenting the international spectacle is good for a local economy. But such "trickle-down effects," like benefits to local businesses, are "almost impossible to measure," Livingstone said.
"I think a lot of people look at the Olympics, and they try to justify it by how much money it adds to the economy," said Livingstone. "[But] if you’re in this to make money and improve your economy, you’re in it for the wrong reasons."
A Chicago 2016 spokesman, who asked not be named, had stood by the $3.8 billion projection. "Our numbers are completely feasible thanks to the infrastructure already in place, the number of venues already built and the temporary nature of the majority of those we’re planning to build," he wrote, in an e-mail prior to the IOC rejection.
The poverty rate rose last year to 13.2%, the highest level since 1997, said a report released Thursday.
That marks the first statistically significant annual increase since 2004, according to the annual Census Bureau report "Income, Poverty, and Health Insurance Coverage in the United States: 2008."
Last year, 39.8 million people lived below the poverty level, which is $22,025 for a family of four, according to the Office of Management and Budget. That’s up 3.9% from 2007, when 37.3 million people lived in poverty.
Regional changes. The West had 9.6 million people living in poverty in 2008, which represents 13.5% of that region’s population, up from a rate of 12% in 2007.
The Midwest had 8.1 million people living below the poverty line in 2008, which is a rate of 12.4%, up from 11.1% in 2007.
"Unfortunately, the regional numbers make perfect sense," said Heidi Shierholz, labor market economist at the Economic Policy Institute free instant credit report.
"The West was very hard hit by the housing bubble, and the industrial Midwest states are suffering in the manufacturing sector."
The poverty rates for the Northeast (11.6%) and the South (14.3%) were both statistically unchanged from 2007.
State-by-state. New Mexico had the highest poverty rate of any state– 19.3% — followed by Louisiana (18.2%), Mississippi (18.1%), Arizona (18%) and Kentucky (17.1%).
At 7% New Hampshire had the nation’s lowest poverty rate, followed by Utah (7.6%), Connecticut (8.1%), Alaska (8.2%) and Maryland (8.7%).
Forget about resting easy.
Target-date funds, billed as confidence-building vehicles that gradually shift your holdings into more conservative fixed-rate instruments as their date nears, have caused some sleepless nights.
Investors stashed money in these one-stop retirement plans so they didn’t have to worry about making their own allocation decisions. But it has become clear they need to better understand the basic concept of target-date funds and carefully scrutinize any fund under consideration.
The 2010 target-date funds designed for people who turn 65 years old next year lost an average of 25 percent of their value in 2008. Because many target-date funds are also the automatic default investment for enrollees in company 401(k) retirement accounts, the devastation was compounded.
As funds were drawing close to that target date, encouraged by a vibrant stock market, they kept a lot of stock in their portfolios. They were also competing for the best performance in order to attract new assets. But then the bull turned into a bear, and they paid a high price.
The average 2010 target-date fund had a 45 percent stock allocation at year-end 2008, according to Target Date Analytics LLC in Marina del Rey, Calif.
"The fund companies had expanded their investment strategy past the target date, using the rationale that people live 15 or 20 years past retirement, so they should keep a strong equity position," said Joseph Nagengast, principal with Target Date Analytics. "Target-date fund managers weren’t managing to the year 2010, as some investors assumed, but to some point well beyond it."
Investors must determine whether a target fund they’re considering is a "to" fund that manages the money to the target date or a "through" fund that manages it past the target date and into retirement, he said.
"Ask the fund company when the fund will reach its most conservative position," advised Nagengast. "If it’s a 2030 fund and they tell you 2029, you know they’re managing to the target date, but if they say 10 years after that date, you’ll know they’re managing well into retirement."
That means more responsibility than most target-date investors expected.
"You as the investor must define the target date and whether it represents when you plan to retire or some date beyond that," said Jack VanDerhei, research director for the Employee Benefits Research Institute in Washington. "A lot of people believe that by the target date they should be down to zero equities, which indicates their lack of understanding."
Some fund companies that were low on equities last year are now trumpeting their lack of negative performance, VanDerhei noted, while others are saying a certain percentage of equities must be in your portfolio to fight inflation if you have 20 years or more left in your retirement fast cash without a hassle.
"As the investor, you must know which strategy makes you feel most comfortable," he said, noting that reading the prospectus of the fund remains crucial. "Many people say target funds dated 2010 or close to that have too much equity in them, but this ignores the fact that the investor can look for a fund that holds a smaller percentage of equities."
Surveys have shown that some investors incorrectly believed they were getting a guaranteed payout when the target date was reached, another misconception. But despite all the fallout from poor performance and some murky comprehension, there can be a place for target-date funds in an individual’s planning if he or she clearly understands what the investment is all about.
"It still makes sense to have target-date funds and, like any other investment, there are good and bad ones," said Greg Carlson, fund analyst with Morningstar Inc. in Chicago. "They provide one-stop shopping for investors who don’t want to build their own portfolios, plus broad diversification over most asset classes."
The three biggest competitors in target-date funds are Fidelity Investments, Vanguard Group and T. Rowe Price, though such funds are offered by a host of investment companies.
Carlson especially likes the Vanguard Target Retirement Funds because they’re mostly index funds with broad diversification and low fees. He also likes T. Rowe Price Retirement because it has some excellent funds in its portfolio and "is one of the few companies that does a lot of things really well." Two examples of 2010 target-date funds Carlson finds noteworthy are Vanguard Target Retirement 2010 and T. Rowe Price Retirement 2010.
Other experts have caveats about even those fund groups.
"I think Vanguard and T. Rowe Price do a good job in long-dated funds that have more than 20 years until the target date," said Nagengast. "But in my view, they do a poor job of managing risk in short-dated funds of 15 years or less because they’re making investment decisions based on a date well past the actual target date."
Whatever fund company and fund is chosen, individual investors still bear the ultimate responsibility for the selection made. The buck stops with them.
"All the big fund companies are pretty competitive on fees, so I don’t think that will be the greatest factor making an investor choose one company over another," concluded VanDerhei. "It really comes down to asset allocation and which fund company you feel most comfortable with."
Bernard Madoff, convicted of swindling $65 billion through the biggest-ever Ponzi scheme, has told fellow prison inmates that he is dying of cancer, the New York Post reported on Monday, citing unnamed prison sources.
Madoff, 71, who since June has been serving a 150-year sentence at a North Carolina federal prison, has been telling fellow inmates he does not have much longer to live, the Post said, citing the unofficial and unusual sources.
The Post said there had been speculation that Madoff was suffering from pancreatic cancer earlier this year. Inmates said Madoff was taking “about 20 pills a day” and “not doing very well.”
The Post said Madoff’s lawyer did not return messages Sunday and had previously declined to answer questions about whether Madoff had cancer. Reuters could not reach Madoff lawyer Ira Sorkin immediately for comment.
The tabloid also reported Madoff has engaged in a number of surprising new activities with some unexpected social circles.
A shirtless Madoff has joined weekly “Native American religious purification ceremonies” that involve prayers, heated rocks to induce sweat and smoking from a ceremonial pipe, the paper said.
The paper also reported that various “gangs” at the prison are trying to recruit Madoff while some inmates regularly cook “sandwich wraps” for him at their cells.
(Reporting by Joseph A. Giannone, editing by Maureen Bavdek)
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