Finance news. My opinion.

June 28, 2010

Pinnacle Partners files Ch. 7

Filed under: finance — Tags: , — Professor @ 7:51 pm

Pinnacle Partners LLC of Quincy, Mass., filed Friday to liquidate under Chapter 7 of the U.S. bankruptcy code.

The company listed assets of less than $50,000 and liabilities in the range of $1 million to $10 million.

The major creditor with a secured claim — a pair of mortgages totaling $600,000 — is South Shore Savings Bank.

A major unsecured creditor is Pinncon LLC of Braintree, listed as holding a claim valued at $103,000.

Pinnacle is represented in the bankruptcy by David B. Madoff of Madoff and Khoury in Foxborough.


June 24, 2010

Foreclosure crisis hits minorities harder

Filed under: money — Tags: , , — Professor @ 2:57 am

The mortgage meltdown is hitting the African-American and Latino communities harder than whites, a new study has found.

Of borrowers who took out mortgages between 2005 and 2008, some 8% of both African-American and Latino borrowers have lost their homes to foreclosure, compared to 4.5% of non-Hispanic whites, according to a study by the Center for Responsible Lending, released Friday.

The racial and ethnic disparities continued even after controlling for income differences. The center’s research shows that African-American and Latino borrowers were about 30% more likely to get higher rate subprime loans than white borrowers with similar risk characteristics.

Of the total pool of homeowners, 17% of Latinos have lost their homes to foreclosure or are at imminent risk of losing their homes, while 11% of African-Americans are in that position. By comparison, 7% of non-Hispanic whites have lost their homes or are about to.

The reason for the disparity is that African-Americans and Latinos were marketed riskier, higher cost loans that became unaffordable during the mortgage and economic crisis, said Keith Ernst, the center’s director of research.

"These are more expensive mortgages," he said. "They are more likely to fail."

African-American and Latino communities are likely to lose $373 billion in declining property values between 2009 and 2012.

The report also found that an estimated 2.5 million foreclosures were completed between 2007 and the end of 2009. This is roughly one in every 20 mortgages outstanding at the time of the crisis.

More than eight in 10 of these foreclosures were on owner-occupied homes with mortgage originated between 2005 and 2008.

An estimated 5.7 additional foreclosures are imminent.

"This crisis still has a long way to go," Ernst said. 


June 19, 2010

Jobless claims higher than expected

Filed under: news — Tags: , — Professor @ 1:24 am

Initial claims for unemployment insurance climbed last week, the government reported on Thursday.

The Labor Department’s report showed that jobless claims jumped 12,000 in the week ended June 12, compared to the prior week’s revised total of 460,000 claims.

Economists were expected initial jobless claims of 450,000 for the week ended June 12, according to consensus.

The report took the wind out of gains in the U.S. futures market.

The report was released one day after Senate Democrats revised a jobs bill, scaling back unemployment benefits and Medicare physician reimbursement measures. This revision would eliminate a $25 weekly supplement for the jobless that had been part of last year’s stimulus act.

The cut will reduce the bill’s cost by $5.8 billion over the next decade. 


June 17, 2010

Goody Clancy lays out draft plan for downtown Wichita

Filed under: term — Tags: , — Professor @ 1:30 am

Local government in Wichita should establish a more stringent set of guidelines as it examines whether to support public-private development proposals in the city’s core, the city’s downtown development consultants said Monday.

As they laid out their draft master plan for downtown Wichita, Goody Clancy executives said the city should ensure that public dollars are spent on projects that have strong public-use components — such as parking garages and public parks. Government also should establish a point system to score potential projects and developers on whether their programs are viable and worth helping.

But the city should be ready with incentives to develop downtown sites, which often are plagues with land acquisition hurdles, environmental concerns and parking issues.

“If we don’t want to play that game, then we run the risk of stagnation and deterioration,” said Sarah Woodworth, a member of the Goody Clancy team.

The Boston-based consulting firm presented its draft plan on Monday during a public meeting at the Wichita Scottish Rite building. The meeting will be followed later this week with a series of public input sessions.

Goody Clancy executives said city capital should be used only for projects that have a strong public benefit so the money has a broader impact than just the private sector project itself.

The city also should establish a point system to rate projects, the consultants said. Criteria could be whether a developer has downtown development experience in the area, how financial solvent he is and whether his proposed development agreement would be fair to all parties.

On financing, Woodworth said, “We should not have any criteria that a bank would not have.”

The projects themselves would have to fit into the downtown master plan. The city should push for them to have a design and location that promotes downtown walkability — one of the key elements of Goody Clancy’s work. Projects also should include buildings at least two stories tall to fit with the character of downtown and shouldn’t come with surface parking lots.

“It doesn’t make for a very pleasant walking environment,” said Goody Clancy’s Ben Carlson.

Goody Clancy’s draft plan, which has been in the works for six months, also laid out a series of possibilities for different areas of town payday advance.

The consulting team laid out numerous potential development districts with their own identities, such as Old Town, Commerce Street Arts, Douglas-Delano, Douglas-Arkansas River, Century II-WaterWalk and the governmental center.

The consultants also made several proposals within some of those districts, offering up sketches for the sites to help people visualize what could happen there.

At the Broadview Hotel near Century II, the consultants suggested the city extend Water Street south to WaterWalk and create a new development site at Douglas and Water that could hold retail and dining. They also said a hotel could be established near the site. All of that would serve Century II and warm up a streetscape that today is wide and relatively unfriendly to pedestrians.

At Broadway and William, Goody Clancy consultants said the former Allis Hotel site could be converted to a park with a parking garage. The former Henry’s store could be converted to 50,000 square feet of office, and the Douglas building just north of there could be rehabbed as an apartment building. A parking garage could serve both the Henry’s and Douglas street buildings.

At Douglas and St. Francis, the consultants urged an improvement of the connection between Old Town and Intrust Bank Arena with more unique pavement styles for pedestrians. They also said Naftzger Park at that intersection could be improved and a hotel could be built just east of it near the Central Rail Corridor. New housing also could be built into existing buildings near that corner.

Just to the east, near Union Station, the city should install a stop light to make that intersection more pedestrian friendly, the consultants said. A parking lot on the northwest side of that intersection could be home to a new residential, office and retail building. The parking that currently is on that site could be moved south to a newly built parking garage.

The consulting team also had renderings for the site of the new public library, the site of the old Coleman factory near Old Town and the site of the 1st Street Bridge over the Arkansas River.

In some cases, the city owns land in those areas and could steer development in the way it chooses, the consultants said.


June 15, 2010

ABIM sanctions docs for sharing exam info

Filed under: term — Tags: , — Professor @ 2:30 am

The American Board of Internal Medicine sanctioned 139 physicians for soliciting or sharing confidential examination questions used to certify doctors in internal medicine and its subspecialties.

Officials at ABIM, which is based in Philadelphia, also said the board initiated legal action in the U.S. District Court for the Eastern District of Pennsylvania last week against five physicians who were among the most egregious offenders.

The sanctioned physicians participated in Arora Board Review, an independent test-preparation course provider based in Livingston, N.J., that purported to help physicians prepare for board certification exams. Participants in the course were allegedly encouraged to relay questions from memory to the company immediately after they took an ABIM examination. They were also allegedly provided with questions obtained by other physicians who had completed ABIM examinations.

Through an extensive investigation, ABIM established that the physicians being sanctioned shared or solicited actual ABIM examination questions — which it called a significant breach in the professional standards ABIM requires of all of its board-certified physicians and any physician taking the exam for certification bad credit payday advance. Hundreds of questions were compromised and immediately removed from the ABIM exam question pool.

“Physicians are, and should be, held to an exceptionally high standard of clinical skill and ethical behavior,” said Dr. Christine K. Cassel, ABIM’s president and CEO. “Board certification provides patients with assurance that the physicians they choose are competent and knowledgeable in their chosen field of practice. Through the actions we are taking today, we are telling patients that they can trust this process; and we are sending a very clear message to physicians. Anyone who seeks to compromise the integrity of our examinations will face swift and serious consequences.”


June 10, 2010

Elementary: Biggest gains

Filed under: online — Tags: , — Professor @ 12:57 am

Fletcher Elementary School in the City of Tonawanda registered a nice gain a year ago. It moved up nine places from 160th in 2008 to 151st in 2009.

But this year's jump makes last year's seem insignificant. Fletcher has vaulted 93 places to 58th, the strongest improvement by any elementary school in the region.

Buffalo's Elmwood Village Charter School is next with a gain of 84 places, followed by St. Mary's of Lancaster, which has moved up 76 places between 2009 and 2010.

The following are the 10 schools with the biggest gains in this year's standings:

• 1. Fletcher ES (Tonawanda), up 93 places

• 2. Elmwood Village CS (Buffalo), up 84 places

• 3. St. Mary's ES (Lancaster), up 76 places

• 4. St. John Vianney School (Orchard Park), up 72 places

• 5. St. Paul's School (Kenmore-Tonawanda), up 61 places

• 6. Ivers J. Norton ES (Olean), up 55 places

• 6. Windom ES (Orchard Park), up 55 places

• 8. Union Pleasant ES (Hamburg), up 54 places

• 9. Our Lady of Pompeii School (Lancaster), up 51 places

• 10. Newfane IS (Newfane), up 50 places


June 5, 2010

Turning abandoned shopping carts into sales

Filed under: online — Tags: , , — Professor @ 5:48 am

From the first day he launched his online skateboard store in 2002, Mike Duncan faced a problem that has plagued retailers since the dawn of online shopping: abandoned shopping carts.

That’s the term for customers loading merchandise into a virtual cart, then leaving the website without paying for anything. These customers aren’t stealing, but they drive merchants crazy. To them, every abandoned cart is a sale they failed to close.

"If you can get just a small fraction of customers to decide to make the purchase instead of leave, you’re talking about a business adding potentially thousands or hundreds of thousands of dollars a year in sales," says Duncan, who owns gear and apparel shop Warehouse Skateboards in Wilmington, N.C.

Last year, Duncan began using to tackle his abandoned-cart problem. LivePerson (LPSN) specializes in connecting subject-matter experts with online consumers, and draws most of its revenue from selling its services to online retailers. Merchants like Duncan can rent LivePerson’s software to connect their own customer-service staffers with potential buyers.

For browsers poking through a website, LivePerson’s instant messages — the equivalent of a salesperson approaching in a store and asking, "May I help you?" — can be unsettling. But customers can click a button to dismiss the LivePerson agent and ignore the chat feature.

"We may get two out of 10 customers who dismiss us," Duncan says. From the eight customers who don’t, Duncan gets a wealth of information about his site–and the potential to close sales that might otherwise slip away.

"Customers will ask us, ‘Why can’t I see my shipping rate?’ Well, it’s because at that particular moment of shopping, we hadn’t collected their address yet, but it’s good for us to know they’re wondering that," he says. "Once we started using, we’ve changed how our menus look, the content, the layout — it’s like we’ve been beta testing every day."

The service helps move more merchandise: "If you go into a store to buy a skateboard, the salesperson is going to say, ‘You need a helmet and some knee pads, right?’ We can upsell our average order value to the tune of $15 and $20," Duncan says. He’s also noticed a decrease in returns, because agents can guide customers — like parents holiday shopping for their kids — who don’t know the nuances of the latest skateboarding gear.

Duncan pays $99 a month for one LivePerson license, which shifts between two Warehouse Skateboard employees who staff the chat line from nine hours a day, Monday through Friday. During the holiday season, he ramps up to four licenses and expands the chat hours to 8 a.m. midnight, seven days a week. The staffers juggle their chat duties with their other customer interactions, using e-mail, fax, and the telephone to communicate

Duncan estimates that he’s been able to convert 1% of his abandoned shopping carts into sales. Sounds small, but for a company generates millions each year in sales (Warehouse Skateboards is privately held, and Duncan won’t divulge its revenue), small percentages add up fast. "It’s been very effective for us," Duncan says of the investment.

Francisco Bustos’, owner of two flower-delivery websites, took a different approach to the abandoned-cart problem. Using performance-monitoring technology from Gomez, he focused on shavings seconds off his sites’ page-load times.

Those seconds quickly add up to dollars: "You can just imagine for Mother’s Day, it’s very important. We can’t allow even two or three hours for the website to be slow or not working," says Bustos, who runs global retailers and RosesnBoxes from Miami. The business has 10 employees and annual revenue of $3 million.

Gomez helps Bustos zoom in on problem spots. Customers from Australia were abandoning DaFlores in droves. After analyzing the traffic with Gomez, Bustos made back-end changes to speed up local load times. "We’re getting 25% more orders from Australia than we used to," he says.

Gomez prices its service based on consumption, with the bill varying depending on how extensively a customer wants to deploy its testing tools. The rates start at around $4,400 per year.

Bustos says it’s worth the hundreds of dollars each month he pays. The value really hit home one sleepless night at 3 A.M., when Bustos — awake thanks to his newborn son — glanced at his Web stats. To his astonishment, he saw orders piling up, unprocessed. A component had broken in his site’s shopping-cat software. Before Gomez, he only would have noticed something amiss after hours of inaction. But now, he was able to alert his IT expert and get the problem solved just before dawn — a critical advantage, since morning is a florist’s busiest time of day for processing orders.

Duncan puts the plight of the abandoned online shopping cart this way: "It costs a lot of money for a business to drive people to your website. If they leave without buying something, you’ve lost not just a sale but quite possibly a repeat customer." 


June 4, 2010

Seven funds to help make investing BEARable

Filed under: technology — Tags: , , — Professor @ 4:42 pm

Investors are having a hard time getting a handle on the stock market lately. And many are getting worried.

The whipsaw returns are producing flashbacks to late 2008, when triple-digit swings in the Dow Jones industrial average were the norm.

Wall Street’s worry list is long: the European debt crisis, huge U.S. government deficits, saber-rattling between North and South Korea, and the shakiness of the economic recovery.

With so much unsettled, the urge to go on the defensive is understandable.

"We’ve had a big recovery," says Matt Berler, co-manager of the Osterweis Fund (OSTFX), which has a reputation as a haven in a falling market. "Now that it’s behind us, we could see markets gyrate, and really end up going nowhere."

If that’s not for you, your options aren’t limited to shifting more heavily into bonds or cash. You can stick with stocks, but take a more cautious approach.

A select group of mutual fund managers have shown they’re masters of defense, capable of picking the stocks most likely to emerge unscathed when trouble strikes. They can cushion the blow further by selling some of their riskier picks and shifting heavily into cash.

Below are seven funds with top records during two especially steep recent declines in the Dow Jones industrial average: Jan. 14, 2000, to Oct. 9 2002, when the dot-com bubble burst, and Oct. 9, 2007, to March 9, 2009, when subprime mortgage troubles spread throughout the financial system.

The seven, screened by Morningstar, are diversified stock funds that finished in the top 3 percent among their peers during both downturns.

But these funds are about more than just defense. They’ve held up in rising markets as well. All have 10-year records placing them in the top 10 percent among their peers.

The seven, in alphabetical order:

— American Century Equity Income (TWEIX) has one of strongest records among large value funds over the past 15 years, with low volatility no fax payday advances. Lately, the fund has bet heavily on utilities stocks, typically good defensive plays in times of trouble.

— Calamos Growth & Income (CVTRX) supplements its stock holdings with convertibles, stock-bond hybrids giving the holder the option to swap from a bond to a stock at a predetermined price. It’s a way to get more potential upside than with regular bonds, along with a steady income stream and reduced volatility.

— Forester Value (FVALX) was the lone U.S. stock fund to finish 2008 with a gain, up 0.4 percent, while nearly every other fund suffered a double-digit loss. Forester Value trailed 79 percent of its peers last year as the same defensive characteristics, that protected it in 2008, held it back when the market turned around.

— Parnassus Equity Income (PRBLX) emphasizes mature dividend-paying stocks that can ride out downturns. The strategy has landed the fund in the top 1 percent among its peers over the past 3- and 5-year periods.

— Royce Special Equity (RYSEX) buys stocks of small companies with clean balance sheets and steady cash flow, and rarely trades them. It’s helped the fund post an average 11.5 percent return per year over the last 10 years.

— Sequoia Fund (SEQUX), which typically holds just 10 to 25 favored stocks, and sticks with them for years. Its latest top holding, at 20 percent of the portfolio, is Berkshire Hathaway, Warren Buffett’s investment company.

— Yacktman Focused (YAFFX) focuses on large-company stocks. Its performance ranks in the top 1 percent of its peers over the last 3, 5- and 10-year periods. Lately, it has found safety in beverage stocks that aren’t buffeted by economic cycles.

If the recent slide extends into a bear market — defined as a drop of 20 percent or more — these funds should serve investors well.


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