9/15/05:
Inflation Isn't Getting Pumped Up By Rising Energy Prices
SUSIE GHARIB: Looks like inflation is under control despite
high energy prices. Today the government said consumer prices
in August rose less than expected, and excluding energy prices,
barely budged. But the data on the report does not reflect
the impact of hurricane Katrina. Erica Miller reports.
ERICA MILLER NIGHTLY BUSINESS REPORT CORRESPONDENT: At first
glance today's inflation report looked pretty scary. Prices
at the retail level rose a half percent in August after the
same increase in July. But nearly all of the gain came from
gasoline. Excluding food and energy, core inflation inched
up just a tenth of one percent.
JOSHUA FEINMAN, CHIEF ECONOMIST DEUTSCHE ASSET MANAGEMENT:
It was a little bit better than expected, and it is I think
four months in a row now that we've had only 1/10 on the core
CPI. Certainly encouraging, certainly reinforces the idea
that underlying inflation remains tame.
MILLER: Most economists warn the Consumer Price Index is
likely to post an even bigger increase in September -- also
because of rising gasoline prices. But inflation does not
appear to be spreading beyond energy.
JAMES GLASSMAN, SR. ECONOMIST, J.P. MORGAN CHASE: If you
look at what is going on with inflation, most of the pickup
we've seen is really related to energy. And so unless energy
prices keep doubling every year, this will get behind us pretty
soon.
MILLER: Today's data heightens the debate over what will
happen at the Federal Reserve's policy meeting Tuesday. Most
economists expect the central bank will boost rates by a quarter
of a percentage point as it has done the past ten meetings.
That will bring the federal funds rate to 3 ¾- percent.
But a minority think the Fed will hold off raising rates in
order to better assess the damage to the economy from hurricane
Katrina.
GLASSMAN: I think it is a close call. I, myself, would want
to get a little more information about what is going on. We
all think we know what is happening, but it's frankly an event
that we've never seen before.
MILLER: Even if the Fed does take a break at next week's
meeting, economists agree it would only be temporary. Most
expect short-term interest rates to be at least a half percentage
point higher by year end. Erica Miller, Nightly Business
Report, New York.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
09/15/05: Keeping Hurricane Katrina Contractors Honest
SUSIE GHARIB: The state of Mississippi sued five major insurance
companies today saying they're trying to cheat hurricane Katrina
survivors out of millions of dollars in homeowners' claims.
The state says the companies are having policyholders file
paperwork saying they sustained flood damage in order to get
immediate cash. The flood damage is not covered by homeowners
insurance. Mississippi fears the companies can use that paperwork
to refuse to pay claims. Nationwide Mutual, State Farm, Allstate,
Mississippi Farm Bureau Insurance and United Services Automobile
Association are the insurers being sued.
PAUL KANGAS: Businesses in some parts of New Orleans will
open up again next week. And residents of some areas will
be allowed to return to the city. President Bush and members
of Congress are vowing to help the region's reconstruction
effort with a comprehensive aid package. But as Darren Gersh
reports keeping tabs on the money spent by federal contractors
will not be easy.
DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: As members
of Congress call for tens of billions of dollars in new spending
to rebuild the Gulf Coast, many are also asking the Bush administration
to tell them more about where the money is going.
SEN. DAVID VITTER, R-LOUISIANA: I want to hear a new outside
the box way of assuring transparency and accountability.
GERSH: The calls to keep a close watch on government contracts
are increasingly bipartisan. While the contracts FEMA and
other agencies issue are public documents, trade secrets and
competitive information that might hurt a company's ability
to bid in the future are not released to the public. At an
oversight hearing on the government's response to Katrina,
a leading democrat also charged that complaints by government
auditors and whistle-blowers are being ignored.
REP. HENRY WAXMAN, D-CALIFORNIA: Under the administration,
the value of no-bid contracts has skyrocketed. Oversight of
federal contracts has been turned over to private companies
with blatant conflicts of interest.
GERSH: The administration has already issued no-bid contracts
to companies cleaning up the mess left from Katrina. Officials
argue bypassing the bidding process helps the government to
move more quickly in national emergencies, but companies often
get multiple federal contracts complicating the oversight
process.
SCOTT AMEY, PROJECT ON GOVERNMENT OVERSIGHT: It is very difficult
to track down the component parts of those federal government
contracts to figure out what all the puzzle pieces are that
make the whole entire amount.
GERSH: Scott Lilly worked in the congressional appropriations
process for 30 years . He says even members of congress are
now having trouble figuring out how taxpayer dollars are being
spent.
SCOTT LILLY, SR. FELLOW, CENTER FOR AMERICAN PROGRESS: Congress
is not going to get the information unless they are willing
to withhold money until that information is forthcoming. And
so far that hasn't happened.
GERSH: The Department of Homeland Security was supposed to
issue its first weekly report today, eetailing for Congress
the costs so far of the Katrina cleanup. Those costs are estimated
to be running $2 billion a day. Darren Gersh, Nightly
Business Report, Washington.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
09/15/05: One on One With UPS COO, John Beystehner
SUSIE GHARIB: The brown trucks of UPS are rolling again tonight
on the Gulf Coast. Twenty-two company buildings were damaged
by Katrina. All but three of them are now back in business
again. But UPS is still coping with big challenges, both logistical
and human. Today, I talked with John Beystehner, Chief Operating
Officer of UPS, and I began by asking him how his employees
are faring?
JOHN BEYSTEHNER, COO, UPS: Well, you know, clearly that's
our biggest concern when the storm hit was our people. We
have 2,200 people that that live and work in the impacted
area. And right at this time all but 1200 of the people are
working every day. And unfortunately, at this time, we still
have 138 employees that we have not heard from or been able
to contact.
GHARIB: Mr. Beystehner, of the people who are working, how
are they managing? How are they functioning? Do they have
homes to go to? And how are they just getting back and forth
to the UPS’s facilities where they work?
BEYSTEHNER: Well, you know, it really depends on the individual's
situation, Susie. And I think the key thing that we're trying
to do is to be as flexible as possible in terms of accommodating
the needs of the individual employee.
GHARIB: But is this a dangerous situation? Are you putting
your employees in a tough situation?
BEYSTEHNER: Absolutely not. That is the last thing that we
would ever do is put our employees in a situation that I would
never ask an employee to do something that I wouldn't do myself.
In terms of the safety of our people, in terms of the areas
where we are delivering, they are open to the public. And
you know, we have one facility that we did not get into yesterday
that we are going to need to do some decontamination work
in.
GHARIB: I understand that a lot of the businesses in Louisiana
and Mississippi are trying to open up and get back to normal.
In your case, this is pretty speedy recovery. Did you have
a disaster plan in place before Katrina?
BEYSTEHNER: Well, even before the storm hit we started working
on our contingency operations. And it's really one of the
things that we have to do as a service company is have active
contingency plans in place and be developing them before situations
develop. And really at this time, even, we are operating in
a contingency mode in terms of flowing volumes to different
buildings to ensure our ability to provide service to the
area.
GHARIB: Companies always talk about crisis management. I'm
wondering, what are the lessons that you learned from your
Katrina experience and any advice that you would give to other
companies on how to cope in a situation like this?
BEYSTEHNER: Well, I think the key thing that we did at UPS
and that we have in place is an active crisis team. In fact,
we run drills on a periodic basis. But we brought together
our crisis team immediately because we knew that there were
going to be, you know, it was a major disaster that was taking
place. And we knew that we had to deal with the concerns of
our people, of our customers as well as the communities. And
that's what the team then worked on was pulling that together.
And then maintaining the communications so everyone knows
what everyone else is doing as well as it allows us to marshal
our resources together to be more effective.
GHARIB: As you know President Bush will be addressing the
nation about his plans for reconstruction in the aftermath
of Katrina. What do you want to hear from him in terms of
helping businesses like UPS?
BEYSTEHNER: Well, you know, I think the key thing that really
needs to take place is getting the area safe for businesses
to get into the area. And then it's really taking the types
of steps probably that we're taking with our employees, trying
to find out what the needs are of the individual businesses.
Like with our employees, we're working in terms of a UPS or
hurricane relief fund for our people. We're providing our
people interest-free loans as well. I think we've got to find
out what the businesses need to get back up on their feet.
GHARIB: All right, well good luck to you. I hope it is quickly
that you are back to normal. Thank you so much. John Beystehner,
COO, UPS
BEYSTEHNER: Thank you.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
9/15/05: Airlines Are Warned Not To Let Pension Plans Crash With Bankruptcy Filing
SUSIE GHARIB: Northwest Airlines, in their first full day
in bankruptcy, got a strong warning today from the government
agency that ensures private pensions. The agency, the Pension
Benefit Guarantee Corporation told the carriers not to skip
their pension payments despite the fact they are bankrupt.
But as Stephanie Dhue explains, even though the PBGC already
faces a $23 billion shortfall, it will probably be forced
to take on those pension liabilities anyway.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Delta
Airlines says there is no guarantee on the future of its pension
plans. Northwest says it hopes to avoid terminating its pensions.
But observers say it will be nearly impossible for the airlines
to emerge from bankruptcy with those plans intact.
DOUGLAS ELLIOTT, CENTER ON FEDERAL FINANCIAL INSTITUTIONS:
Bankruptcies are very ugly things. You have all the creditors
fighting it out. And here is a big liability where there is
a legal mechanism for passing it to a federal insurer. It's
just the path of least resistance.
DHUE: In the past the Pension Benefit Guarantee Corporation
has been forced by the bankruptcy court to pick up airline
liabilities. Delta, Northwest and their unions don't want
that to happen now so they are lobbying Congress to relax
the rules and time frames for funding pensions.
CAPTAIN PAUL RICE, VP, AIRLINE PILOTS ASSOCIATION: If we
could get that through Congress, possibly that could save
the Delta and Northwest not only pilot but other employee
pensions.
DHUE: But it may be necessary to save the PBGC itself. US
Airways and United are already in the process of dumping their
own pension liabilities on the agency that now faces a $23
billion deficit. Add Delta and Northwest and you could have
another $11 billion worth of red ink. Experts say the government
is likely to have to step in.
ELLIOTT: The PBGC has been losing about $10 billion a year.
It looks like this will be the fourth in a row that that happens.
The numbers are starting to mount. And it's not hard to have
a scenario where there is $100 billion fix that is eventually
needed.
DHUE: The PBGC currently has enough invested to pay benefits
for the pensions it's assumed for the next 17 years. But it's
fighting to keep from taking on more from the airlines. The
agency says Delta and Northwest have a legal obligation to
meet their funding requirements. Stephanie Dhue, Nightly
Business Report, Washington.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
9/15/05: The Trusted Traveller System Takes Off At Orlando International Airport
SUSIE GHARIB: There is one thing you can usually count on
nowadays when you are traveling by air. It will probably take
you awhile to get through security check point before you
can get to your gate. But there may be a way to speed things
up. Jeff Yastine reports.
JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Life
at the airport: lots of waiting, long lines, and endless frustration.
But that's not the case if you are a member of what's called
"Clear," an experimental trusted traveler system
being tried out at Orlando's busy international airport and
designed to bypass all those crowds waiting in front of the
security check points by having its own express lane entrance.
You plug in your Clear card with an embedded secure memory
chip, undergo an instant fingerprint or eye scan to identify
you as you, go through the metal detectors and on to your
plane. No random body searches. And best of all, no waiting
in line. Clear is the brain child of this man, Steven Brill,
founder of Court TV and American Lawyer magazine.
STEVEN BRILL, CEO, VERIFIED IDENTITY PASS: If you take the
trouble once to go through this pre-screening, and you have
a biometric card that says you’re you, and you've gone
through the screening, then you can be expedited through security
and go through faster, and have a predictable experience at
the airport. You're not going to be singled out for a secondary
search or anything like that.
YASTINE: But there is a cost: $79.95 for a one-year membership.
And you have to undergo a background security check, which
means providing both your former and current address as well
as two forms of government-issued identification. And you
have to have an image scanned of your iris as well as your
fingerprint scanned into a computer. From there, your personal
data is reviewed by the Department of Homeland Security and
compared against its terrorism database. To some people that
is an invasion of privacy, but to others it is a welcome trade-off
-- especially for people who spend a lot of time in the air
like hotel industry executive Mike English.
MIKE ENGLISH, BUSINESS EXECUTIVE: There is a very distinct
difference. I'm walking in, I'm bypassing rows and queues
of customers, walking right to the front. I'm identified instantly
with one fingerprint, and the line is held as I go directly
to the scanning equipment and walk right through the security.
Travel already is a take-away from my family and so when I
can limit the amount of time I have to be out. And if that
means I have to be at the airport an hour ahead instead two
there is a big benefit for me.
YASTINE: Brill says Clear system was designed with the privacy
of personal data in mind.
BRILL: Our system doesn't allow us to track where you have
used the card. Unlike an Easy Pass system where if you watch
Law and Order, it seems every other episode there
is somebody getting nailed because he used his Easy Pass card
to go over the Tribourough Bridge. We can't do that.
YASTINE: Right now, Clear is an experiment available only
at Orlando's Airport and monitored by the Transportation Security
Administration. What Brill is hoping to expand Clear to other
airports once the TSA approves the National Trusted Traveler
Program, and that decision is expected this fall. Jeff Yastine,
Nightly Business Report, Orlando.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
09/14/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: Wall Street reacted to the consumer price report
with some modest blue chip gains at the start of the trading,
but stocks dipped at midday with the Dow off 20 points after
the Philadelphia Federal Reserve reported August factory activity
plunged while prices paid by manufacturers rose sharply. However,
inflation concerns were overshadowed by bargain-hunting and
a drop in oil prices. So the stock market ended on a mixed
note: the Dow Industrial Average was up 13.85 at 10,558.75,
the Nasdaq Composite fell 3.18 to 2146.15, the S&P 500
index rose a half-point to 1227.73.
In the bond market, the 10-year note fell 12/32 to par and
8/32, boosting the yield to 4.22%.
Big Board volume leader, 27.9 million shares traded, Time
Warner moving up 58 cents. The New York Post reported the
company is advanced talks with Microsoft’s MSN unit
to sell its stake in America Online.
Then Corning down another $1.24. Some more profit-taking
after the stock’s big run-up.
Motorola was down 20 cents. The company is considering the
sale of its automotive products unit, which has been a rather
poor performer.
Wal-Mart down 38 cents.
ExxonMobil dropped a penny. That was fifth in Big Board volume.
Then Pfizer losing 33 cents.
While GE gained that much.
EMC, 31 cent drop.
Disney was down 11 cents. Lehman Brothers cut Disney’s
4th quarter earnings estimate by 8 cents, down to 21 cents
a share, and cut 2006 earnings estimates by 4 cents to $1.46
a share.
News Corp. base stock gained a penny, was tenth in volume.
Bear Stearns losing $2.60, even though 3rd quarter earnings
jumped 34 percent to $2.69. That was 31 cents above the Street
estimate, but nowhere near as strong as the 74 percent in
Lehman’s 3rd quarter results, which were out yesterday,
and some investors were disappointed at the comparison.
UICI, this is a health and life insurance firm. Its board
has approved Blackstone Group’s $37 a share cash takeover
bid.
Then, Certegy Company, this is a credit and debit card processor.
It’s going to merge with a unit of Fidelity National
Financial for stock and loan 32 ½ percent of a new
firm to be called Fidelity National Information Services,
trading symbol will be FIS on the Big Board. In addition,
Certegy is going to pay $3.75 cents a share cash as a special
dividend to its shareholders prior this deal.
First National Financial stock was up $3.24 at $43 a share
even.
Clarcor, in the filtration business, up $3.50. Third quarter
earnings rose to 40 cents from 31 a year ago, and the company
boosted the high-end 4th quarter estimate from $1.38 to $1.42
a share. Standard and Poor’s repeated a “buy”
recommendation.
Dana Corporation, the automotive parts maker, cut its 2005
earnings guidance to 60-70 cents, way down from $1.38 previously.
And a Baird brokerage downgraded the stock from “neutral”
to “underperform.”
Media General “A” stock losing $5.50. August
revenues fell 1.1 percent, and the company sees 3rd quarter
earnings at 38-41 cents, well below the 66 cents it earned
a year ago.
And Valero Energy down $2.31. The company set a 2-for-1 stock
split, and the board is going to recommend a 20 percent boost
in the dividend, from 5-6 cents a share quarterly.
Google topped the active list, 38-cent drop. The company
priced its 14.1 million share secondary offering at $295 a
share even, and then completed it today.
Microsoft down 4 cents.
Intel, 6-cent gain.
Cisco, 19-cent rise.
Amgen up $1.21. Deutsche Bank Securities upgraded it to “buy”
because it sees the stock at a compelling valuation level.
Apple Computer up 26 cents.
Baidu.com up 68 cents after a huge drop yesterday.
eBay dropped a penny.
And a 4-cent loss for Siebel Systems.
Same story with Dell, down 4 cents.
Able Energy up $5.31, nice 44 percent gain there. A positive
reaction to the company’s plan to acquire Somerset Refinery
Inc. for $19.5 million.
Nightly
Business Report transcripts are available on-line post broadcast.
The program is transcribed by eMediaMillWorks. Updates may
be posted at a later date. The views of our guests and commentators
are their own and do not necessarily represent the views of
Community Television Foundation of South Florida, Inc. Nightly
Business Report, or WPBT. Information presented on Nightly
Business Report is not and should not be considered as investment
advice. Copyright (c) 2005 Community Television Foundation
of South Florida, Inc. ALL RIGHTS RESERVED. Terms of use.
09/15/05:
Market Stats
NET PERCENT
CLOSE CHANGE CHANGE
DOW CLOSE 10558.75 +13.85 + .1
HIGH 10582.07
LOW 10520.93
NASDAQ COMP. 2146.15 -3.18 -.2
HIGH 2155.75
LOW 2142.73
VOLUME 1,554.1
PREVIOUS 1,491.1
UP VOLUME 757.2
DOWN VOLUME 768.8
DOW TRANSPORTS 3596.99 +12.95 + .4
DOW UTILITIES 424.01 +4.23 + 1.0
CLOSING TICK +1127
S&P 500 1227.73 +.57 + .1
S&P 100 568.29 +.88 + .2
MIDCAP 400 712.44 -.16 - .0
REUTERS/CRB 319.71 -1.95 - .6
NYSE COMPOSITE 7583.14 +5.85 + .1
VALUE LINE 411.02 -.98 - .2
RUSSELL 2000 665.42 -.93 - .1
DJW 5000 12271.40 +.68 + .0
U.S. TREASURIES
5-YEAR NOTE 3.875%
Sept. 15,2010 99 15/32 -5/32 + 4.00
10-YEAR NOTE 4.25%
Aug. 15,2015 100 8/32 -12/32 + 4.22
30-YEAR NOTE 5.375%
Feb. 15, 2031 112 30/32 -1 2/32 + 4.52
LEHMAN BROS.
LONG BOND INDEX 1803.20 -4.33
DOW CLOSE 10558.75 +13.85 + .1
ADVANCES 1549
DECLINES 1715
NEW HIGHS 131
NEW LOWS 47
NET PERCENT
NYSE MOST ACTIVES 4PM CLOSE CHANGE CHANGE
TWX Time Warner 18.50 +.58 +3.2
GLW Corning 19.57 -1.24 -6.0
MOT Motorola 23.67 -.20 -.8
WMT Wal-Mart Stores 44.32 -.38 -.9
XOM Exxon Mobil 62.46 -.01 -.0
PFE Pfizer 25.70 -.33 -1.3
GE GE 34.38 +.33 +1.0
EMC EMC Corp 12.49 -.31 -2.4
DIS Disney 24.00 -.11 -.5
NWSa News Corp "A" 15.88 +.01 +.1
NASDAQ CLOSE 2146.15 - 3.18 - .2
VOLUME 1,752.3
PREVIOUS 1,734.8
ADVANCES 1263
DECLINES 1765
NASDAQ ACTIVES
GOOG Google 302.62 -.38 -.1
MSFT Microsoft 26.27 -.04 -.2
INTC Intel 24.55 +.06 +.2
CSCO Cisco Systems 18.03 +.19 +1.1
AMGN Amgen 83.58 +1.21 +1.5
AAPL Apple Computer 49.87 +.26 +.5
BIDU Baidu.com 82.00 +.68 +.8
EBAY eBay 37.65 -.01 -.0
SEBL Siebel Systems 10.32 -.04 -.4
DELL Dell 34.65 -.04 -.1
AMEX CLOSE 1710.13 + 1.25 + .1
INDEX SHARES
DIA DIAMONDS TRUST 105.66 +.09 +.1
QQQ NASDAQ 100 39.16 -.02 -.1
SPY S&P DEP.RECEIPTS 123.15 -.06 -.1
STOCKS IN THE NEWS
BSC Bear Stearns Cos 102.90 -2.60 -2.5
UCI UICI 36.11 +5.03 +16.2
CEY Certegy 38.80 +5.20 +15.5
CLC Clarcor 31.35 +3.50 +12.6
DCN Dana 9.86 -2.92 -22.9
MEG Media General 58.45 -5.50 -8.6
VLO Valero Energy 108.69 -2.31 -2.1
ABLE Able Energy 17.41 +5.31 +43.9
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