10/25/05:
South Florida Wakes Up To Wilma's Wrath
JEFF YASTINE: . South Floridians are dealing with a massive
mess left by hurricane Wilma tonight. It`s getting to be a
familiar sight,
people lining for food, water and fuel as three of Florida`s
most populous
counties are now in the dark with no power or phones. The
recovery is
expected to take weeks and cost billions of dollars.
After a record setting season of hurricanes, the latest images
are all
to familiar, glass-enclosed office high rise towers in Ft.
Lauderdale and
Miami turned into a checkerboard of broken windows, traffic
lights dangling
from cables over roadway intersections. Structures like this
marina boat
storage building crumpled into a mass of twisted steel and
aluminum. People
are massing too in front of retailers like this Wal-Mart which
managed to
reopen today. All over the region, relief efforts began in
earnest as
residents queued up for packages of food, water and ice, simple
things
taken for granted before the storm, but carrying the highest
value now.
MAJOR GENERAL DOUGLAS BURNETT, FLORIDA NATIONAL GUARD: There`s
water
trucks of food, water and ice and 65 trucks of food on the
stateside. It`s
about 250 but more is flowing in. That`s what was pre-stored.
Our partners
FEMA had that here before we got underway. The governor (INAUDIBLE)
so
it`s here for our citizens, so we`re prepared way ahead of
time.
YASTINE: Mindful of the delays seen after hurricane Katrina
eight
weeks ago, authorities at all levels sought to keep relief
efforts on fast
forward.
GOV. JEB BUSH (R) FLORIDA: The attitude is that we`ll take
a sledge
hammer to provide relief and worry about filling out the paperwork
later.
That`s kind of the attitude we have in Florida and we`re battle
tested, so
hopefully people will appreciate the kind of response that
they`ll see.
YASTINE: The region`s main electric provider, Florida Power
& Light,
says nearly six million south Floridians are without electricity
and the
process of restoring power will take weeks.
President Bush will be heading to Florida on Thursday to personally
survey the damage caused by hurricane Wilmer, Wilma. The president
has
already declared Florida a major disaster area with at least
17 counties in
the state now eligible for money to reimburse local governments
for
cleaning up the damage.
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.
10/25/05:
One On One With Robert Hartwig, Chief Economist, Insurance
Information Institute
PAUL KANGAS: Another damage concern, handling the huge insurance
claims
that will come from Wilma. The industry is already reeling
from a record
year of storms. For some analysis on the situation, New York
correspondent
Suzanne Pratt talked with Robert Hartwig from the Insurance
Information
Institute. She began by asking him to detail Wilma`s total
estimated
damage.
ROBERT HARTWIG, CHIEF ECONOMIST, INSURANCE INFORMATION INSTITUTE:
The
damage from hurricane Wilma was worse than anticipated. The
storm wound up
being a category three storm, instead of a weakening category
two or even a
category one storm and it was much larger than expected. And
so
consequently, the damages are more substantial than originally
anticipated,
probably $6 to $7 billion, but there are estimates up to $10
billion,
whereas originally we may have expected $3 to $4 billion in
insured losses
from Wilma.
SUZANNE PRATT, NIGHTLY BUSINESS REPORT CORRESPONDENT: How
does it
rank compared to other storms that we`ve seen this year and
last year?
HARTWIG: Wilma`s right up there. In fact, Wilma`s going to
make the
top 10 list of most expensive hurricanes to ever hit the United
States and
in fact, the most remarkable fact is, is that seven out of
the 10 most
expensive hurricanes ever to strike the U.S. have struck this
country
within the last 14 months alone.
PRATT: We`ve had Katrina. We`ve had Rita and now we`ve had
Wilma. How
over extended is the nation`s insurance industry do you think?
HARTWIG: It`s been a very busy year. Financially the industry
entered
the hurricane season from a position of financial strength
and so
fortunately these storms do not threaten the solvency or claims
paying
ability of the insurance industry. It is a strain on the human
resources of
course of the industry and we have tens of thousands of adjusters
operating
everywhere from the coast of Texas to Key West.
PRATT: What is your expectation in terms of what`s going to
happen to
premiums in the insured areas?
HARTWIG: Even before Wilma or Katrina or Rita hit, premiums
throughout
the southeast were in fact rising, both for homeowners and
in some cases
commercial property insurance coverage in coastal areas. That`s
likely to
continue and in fact the pace is likely to quicken.
PRATT: What about premiums outside of the insured areas? Can
those be
affected as well?
HARTWIG: Generally speaking, premiums outside of areas affected
by
hurricanes don`t have any risk of premiums rising. There are
some secondary
effects however. The highest cost of re-insurance, which is
insurance for
insurance companies, is a price that`s determined on a global
scale. And
also rebuilding costs, material costs and labor costs will
rise outside of
even those areas affected by the hurricane. So for example
if your house
burns down in Missouri, no coastline, but the price of lumber,
price of
roofing materials and concrete are determined on a national
scale, have
been driven up dramatically by the force of these three hurricanes.
PRATT: But is it likely to change the way that the industry
does
business? Are we likely to see policies not being written
in southern
Florida because of storms like this?
HARTWIG: Insurers will evaluate the losses for this year.
They`re
still evaluating the losses from last year in fact and what
insurers will
do is alter their strategies in disaster prone areas. Now
part of this yes
does involve higher rates. A part of it involves increasing
the proportion
of homeowners who have wind storm deductibles which might
be two, three,
four percent, rather than a fixed dollar deductible, but for
some companies
it means withdrawing or it means pulling back from these markets
to some
extent.
PRATT: And what about flood insurance? We`ve been hearing
a lot about
that lately, particularly in the wake of Katrina. Do you expect
that we`re
more likely to see flood insurance become mandatory?
HARTWIG: Well, flood insurance is supposedly mandatory for
people who
live in the highest risk flood areas, but as it turns out,
the NFIP, the
National Flood Insurance Program, has not done a particularly
good job of
enforcing that and what that means is that in fact as a result
of some
hearings held last week in Congress, I think there`s at least
some momentum
to creating a mandatory flood program for people who live
not just in one
in 100 year flood plains, but perhaps in one in 250 year flood
plains or
one in 500 year flood plains. So clearly, people who need
to buy flood
coverage are not doing it today. We need a mechanism for enforcing
that
they buy it and that they maintain it.
PRATT: Very interesting, thank you for joining us.
HARTWIG: Thank you.
KANGAS: Take hurricane Katrina, Rita and Wilma, add in soaring
gasoline prices and it shouldn`t come as a surprise that consumer
confidence took a dive this month. The Conference Board`s
index of consumer
sentiment fell 2 1/2 points to 85, its lowest level in two
years. Analysts
had expected that number to actually go up. The business research
group
said it`s not a good sign for the holiday shopping season
with high heating
bills expected to take a bite out of spending.
That number helped send stock lower at the outset of trading,
along
with profit taking from yesterday`s big gains. The Dow fell
15 points,
while the NASDAQ lost six. A late morning comeback was quashed
by
disappointing revenue forecasts from Texas Instruments and
a rise in oil
prices. The Dow to as much as a 60-point drop in the afternoon
but staged a
late rebound, closing off only 7.13 points at 10,377.87. The
NASDAQ
Composite was down 6.38 at 2109.45. Standard & Poor`s
500 fell 2.84,
ending at 1196.54. In the bond market, the 10-year note fell
22/32 to 97
24/32, putting the yield at 4.54 percent.
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.
10/25/05: The Real Estate Commission
Wars
JEFF YASTINE: The National Association of Realtors says
sales of existing
homes were flat last month and would have fallen if not for
a rise in
demand caused by hurricanes Katrina and Rita. While the real
estate market
may be showing signs of cooling, competition for customers
is red hot. As
Stephanie Dhue explains, that`s leading to a growing battle
over real
estate commissions.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Homeowner
Veronica Adams sees a new gas fireplace, hardwood floors and
ceiling fans
as selling points for her D.C. townhouse. But a bad experience
with a full
service realtor and paying thousands of dollars in commission
has Adams now
selling her property on her own.
VERONICA ADAMS, HOMEOWNER: I was kind of seeing the dark side
and I
just decided that I would do better selling it on my own.
I don`t think
it`s rocket science.
DHUE: Discount brokers help home sellers like Adams for a
flat fee or
reduced commission. They let home sellers buy only the services
wanted,
including a listing on the multiple listing service or MLS.
Full service
brokers are fighting to keep those listings exclusive. Several
states have
new minimum service laws that prohibit any broker from listing
homes on the
MLS without providing additional services. Full service brokers
argue these
laws protect the buyer and seller in a complicated legal transaction.
GEOFF LEWIS, SENIOR V. P., RE/MAX: There`s financing that
has to be
arranged, title insurance, homeowner`s insurance, a number
of different
steps that all have to come together in order to complete
the transaction
which is ultimately what the buyer and seller want.
DHUE: But discount firms say the laws make it more expensive
for
consumers.
COLBY SAMBROTTO, COO, FORSALEBYOWNER.COM: This idea that consumers
have to be given a minimum level of service is really kind
of disingenuous.
In my mind, it`s really an effort on the part of realtors
to prop up what
has become an antiquated commission structure.
DHUE: The Federal Trade Commission and the Justice Department
weighed
in today with a workshop on competition in the industry. Already
the
Justice Department has sued the National Association of Realtors
and both
agencies have urged state legislatures not to pass minimum
service laws.
THOMAS BARNETT, ACTING ASSISTANT ATTORNEY GENERAL, DEPT. OF
JUSTICE:
Ultimately the concern is consumers are forced to buy things
that they
don`t - services that they don`t want or need and they pay
too much for it.
DHUE: The battle over brokers make it even more heated. As
the real
estate market cools, sellers may be more eager to look for
bargains on
transaction costs if their homes are selling for less. 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.
10/25/05: Striking Oil in India
JEFF YASTINE: India now ranks sixth in the world in energy
consumption. By the year 2012, that consumption will have
grown so much it will need to import 92 percent of its requirement
for oil. South Asia`s
largest country is now shopping for energy in its own region,
in the middle east and even in the U.S. From New Delhi, Smita
Prakash reports.
SMITA PRAKASH, NIGHTLY BUSINESS REPORT CORRESPONDENT: South
Asia`s
rapid economic growth and soaring demand for energy is helping
to strain
energy resources worldwide. In India, with a projected economic
growth rate
of 8 percent per year, maintaining an adequate energy supply
is a major
challenge to the economy. India produces only 30 percent of
its oil
requirements. The rest is imported from the Gulf states at
a heavy cost of
nearly $20 billion per year.
By 2012, India will be importing three million barrels of
oil per day
compared to roughly one million barrels a day now. For India
and the rest
of south Asia, the hunt is on for cheaper oil and gas imports
and energy
security.
R. K. PACHAURI, DIR. GENERAL, THE ENERGY RESEARCH INSTITUTE:
I think
we really now have to think in terms of solutions on a much
wider
geographical scale and that`s why I suppose we`ve gone into
(INAUDIBLE) we
went into Sudan to get access to reserves that they have.
That`s certainly
a good step, but it`s not sufficient. We need to do much more.
So I think
we need to bring about a total change in the matter in which
we formulate
our energy policy for the future.
PRAKASH: For the first time since its independence 58 years
ago, India
is in the process of shaping a comprehensive energy policy
to raise
domestic production and encourage investments in overseas
oil fields.
Indian investments in oil fields abroad, like in the (INAUDIBLE)
island,
Sudan and Nigeria, are expected to reach $3 billion this year.
And to fuel
its growing energy demand, India is also willing to overcome
deep-rooted
suspicions with its neighbors Pakistan, Bangladesh, Miramar
and Iran to get
access to their oil and gas resources.
MANI SHANKAR AIYAR, MINISTER OF PETROLEUM & NATURAL GAS:
If we start
getting paranoid about Iran or Pakistan and say we will not
take it from
the source and then get paranoid about Afghanistan, saying
that we don`t
know whether the conditions are safe there to bring in the
gas from
(INAUDIBLE) and then we turn to Miramar and say to Bangladesh
(INAUDIBLE)
paranoid and therefore we won`t take it from there. Where
are you going to
get it from? Where are you going to get it from if you don`t
get it by
this pipeline? And even if you get everything by this pipeline,
there`s
still going to be demand over and above that.
PRAKASH: Indian scientists believe that developing alternate
fuels and
renewable sources of energy should be prioritized. India recently
signed a
deal with the U.S. on cooperation in civilian nuclear energy.
This will
provide the country access to civilian nuclear technology
and fuel from the
U.S.
K. SUBRAMANIUM, NUCLEAR SCIENTIST: The U.S. leadership is
now very
keen on reviving the nuclear industry and they have been (INAUDIBLE)
for
countries like United States, China and India who will have
very large
demands on energy, hydrocarbon solutions are not practical.
And therefore
they have been urging nuclear energy solutions for these three
countries
and in their view, that is the ultimate solution for the global
warming
problem.
PRAKASH: If India`s energy demand continues to grow at its
current
rate, its energy reserves will be exhausted by 2012. The Indian
government
sees that its biggest challenge over the next 20 years will
be to make
available reasonably priced energy on a sustainable basis
if its economy is
to maintain the current growth rate of 8 percent per year.
Smita Prakash,
NIGHTLY BUSINESS REPORT, New Delhi.
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.
10/25/05: "Commentary"-- Conglomerates
May Become A Thing Of The Past
JEFF YASTINE: Tonight`s commentator says bigger may not be
better when it comes to
Wall Street these days. Here`s Lionel Barber, U.S. managing
editor of the
"Financial Times."
LIONEL BARBER, U.S. MANAGING EDITOR, "FINANCIAL TIMES":
This week,
Cendant, the real estate and leisure services giant began
the latest
American conglomerate to unveil plans to split up. Henry Silverman,
Cendant`s boss and one of the highest paid CEOs in America,
says it`s an
artistic success, but a commercial failure. Great quote.
Grand designs are out. So is acquisition-led growth. Investors
are
increasingly disenchanted with conglomerates. These days,
they prefer
private equity deals, smaller cap stocks and Internet pioneers
such as
Google. The big cap blues spell trouble for companies such
as Citigroup,
the sprawling financial services conglomerate.
They also explain why General Electric, Microsoft and Wal-Mart,
rightly rated as business icons, are no longer in favor on
Wall Street.
Cendant`s move also tells us something about the economic
cycle.
Conglomerates come into fashion when times are hard and companies
need to
diversify their ranks. In the good times, that argument wins
fewer
converts.
So Mr. Silverman is betting on a brighter future and a higher
share
price in the short term, despite Fed fears about inflation
and the prospect
of higher interest rates. And just to show he`s putting his
money where his
mouth is, he`s giving up his salary too, one more sign that
the times
they`re a-changing. I`m Lionel Barber.
LAST WORD: Let's Do Lunch…. For A Price
JEFF YASTINE: And finally tonight, if you ever wanted to have
a meal with a
mogul, well, here`s your chance. Bidding will start on eBay
on November 3rd
and run for a week for a lunch date with NewsCorp Chairman
Ruppert Murdock.
The winner and three friends will lunch with Murdock at NewsCorp`s
headquarters in Manhattan. The proceeds from the auction go
to the
Jerusalem College of Technology. But be ready to dig deep
into your
pocketbook for that privilege. Paul, the bidding for the open
on that
starts at $25,000.
KANGAS: I couldn`t even afford the gratuity, believe me.
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.
10/25/05:
"Paul Kangas' Stocks In The News"
PAUL KANGAS: Take hurricane Katrina, Rita and Wilma, add
in soaring
gasoline prices and it shouldn`t come as a surprise that consumer
confidence took a dive this month. The Conference Board`s
index of consumer
sentiment fell 2 1/2 points to 85, its lowest level in two
years. Analysts
had expected that number to actually go up. The business research
group
said it`s not a good sign for the holiday shopping season
with high heating
bills expected to take a bite out of spending.
That number helped send stock lower at the outset of trading,
along
with profit taking from yesterday`s big gains. The Dow fell
15 points,
while the NASDAQ lost six. A late morning comeback was quashed
by
disappointing revenue forecasts from Texas Instruments and
a rise in oil
prices. The Dow to as much as a 60-point drop in the afternoon
but staged a
late rebound, closing off only 7.13 points at 10,377.87. The
NASDAQ
Composite was down 6.38 at 2109.45. Standard & Poor`s
500 fell 2.84,
ending at 1196.54. In the bond market, the 10-year note fell
22/32 to 97
24/32, putting the yield at 4.54 percent.
Big board volume leader today on 23.4 million shares, Texas
Instruments (TXN) dropping $2.37. Third quarter earnings higher,
$0.38
versus $0.32 a year ago, but the company`s revenue forecast
was clearly
disappointing to Wall Street.
Pfizer (PFE) an $0.11 gain.
Lucent Technology (LU) dropped a nickel.
There you see Cablevision Systems (CVC) down $3.54. The Dolan
family
withdrew its bid to take it private.
ExxonMobil (XOM) up $0.35, fifth in big board volume as oil
drifted
higher.
General Electric (GE) $0.22 loss.
Halliburton Co (HAL) fell $1.69 after the company said he
sees fourth
quarter - it sees fourth quarter earnings hurt by hurricanes
Katrina and
Rita.
DuPont Co (DD) gained $1.18, even though it reported a third
quarter
loss of $0.09 versus earnings last year, but the company plans
to buy back
up to $5 billion of its own stock and Merrill Lynch today
upgraded it from
"neutral" to a "buy."
Sprint Nextel (S) $0.09 gain there.
Wal-Mart Stores (WMT) tenth in volume, $0.82 loss.
IBM (IBM) fell $0.11 although the company said it plans to
buy back up
to $4 billion of its own stock, a number of companies doing
that these
days.
Lockheed Martin (LMT) down $1.12. Higher third quarter earnings
nonetheless, $0.96 versus $0.69 last year, $0.06 above the
Street estimate,
but the stock apparently down on growing concerns that the
defense budget
cuts will be larger than expected.
And that also hurt another defense contractor, Northrop Grumman
(NOC)
dropping $0.98, although Northrop`s third quarter earnings
of $0.80 were
$0.10 above the Street estimate, but here again, revenues
shy of Wall
Street estimates.
Coventry Health Care (CVH), $7.57 loss. Third quarter earnings
higher,
$0.81 versus $0.64 a year ago, but the company sees fourth
quarter about
the same, $0.81, flat earnings. Standard & Poor`s downgraded
it from "buy"
to just a "hold" today.
Lexmark Intl (LXK) dropped $2.77 a share. Third quarter earnings
sharply lower, $0.59 versus $1.17 and revenues actually fell
about 4
percent in that period.
Pentair (PNR) losing $5.46. Third quarter earnings higher,
$0.46
versus $0.32 last year, but the company sees fourth quarter
earnings
dropping to $0.40 to $0.42 and that`s about $0.10 below the
Wall Street
consensus.
Pactiv (PTV), which is in the specialties packaging business
up $3.19.
Third quarter earnings $0.28, down from $0.32 a year ago,
but the company
did not cut its full year guidance as largely as expected.
And also, it
plans to buy back 6 1/2 million of its own shares.
Then Dominos Pizza (DPZ) a gain of $2.30. Third quarter earnings
jumped to $0.30, versus only $0.02 a year ago, 1.1 percent
rise in domestic
same store sales, 4.5 percent rise in international same store
sales.
Google (GOOG) topped the active list down $1.74.
Intel (INTC) a penny gain.
Ebay (EBAY) fell $1.41.
Microsoft (MSFT) $0.07 drop there.
Apple Computer (AAPL) losing $0.69, fifth in dollar volume.
Cisco Systems (CSCO) $0.04 loss.
Research in Motion (RIMM) down $2.71.
Sandisk (SNDK) $0.61 loss.
Oracle (ORCL) managed to gain $0.15.
And tenth in volume, Qualcomm (QCOM) down $0.54.
Independence Community Bank (ICBC) up $7.45 on news Sovereign
Bancorp
will acquire it for $42 a share cash. Sovereign stock incidentally
fell
$1.93.
And then over on the American Exchange, Nabors Industries
Ltd (NBR) up
$3.75. Third quarter earnings jumped to $1.11 from $0.48 a
year ago.
Revenues up 54 percent and the stock begins trading on the
New York
exchange on the third of November. Standard & Poor`s today
repeated a
"strong buy."
And those are the stocks in the news tonight.
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.
10/25/05:
Market Stats
Due to Hurricane Wilma and the aftermath
of technical and logistical issues NBR faced on 10/25/05, we do not have market stats for this date. |
