German and French leaders meet this week to map out a revised plan for the euro as the Group of Eight exposed disagreement on a rescue strategy, Greece lurched toward a possible exit and Spain
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Treasuries fell for a second day on speculation record-low yields will curb demand when the U.S. auctions $99 billion of coupon-bearing debt beginning tomorrow.
The government plans to start the sales with $35 billion of two-year notes, followed by the same amount of five-year debt on May 23 and $29 billion of seven-year securities on May 24. Seven-year yields slid to 1.135 percent May 18, the least ever, raising concern U.S. bonds are becoming too costly. German and French finance ministers plan to meet today on the euro, after Europe
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General Motors said Tuesday that it will stop paid advertising on Facebook.
The automaker says it will still be on the social networking site, it just won’t be spending money to buy ads.
"We regularly review our overall media spend and make adjustments as needed," GM said in a statement. "This happens as a regular course of business and it’s not unusual for us to move things around various media outlets."
GM (, Fortune 500) has fan pages for its various brands, such as Buick, Chevrolet and Opel, as well as for General Motors itself. Those pages will continue to be updated, according to the company.
But the social media paid ads simply weren’t delivering the hoped-for buyers, according to a report in the Wall Street Journal Tuesday.
GM had been spending $10 million on paid Facebook ads, according to the Journal report.
A spokesman for GM would not confirm how much money GM spent on Facebook ads cash advance no faxing. Facebook, also, did not immediately respond to a request for comment.
GM’s advertising represents a tiny part of the $3.7 billion Facebook brought in in advertising revenue last year, but the move does indicate that ads placed on the site have proven disappointing for at least one major advertiser.
GM rival Ford (, Fortune 500), meanwhile, says it is accelerating its advertising efforts on Facebook and other social media platforms.
"We’ve found Facebook ads to be very effective when strategically combined with engagement, great content and innovative ways of storytelling," Ford spokeswoman Kelli Felker said in an e-mail.
Facebook will soon launch an initial public offering.
Greek President Karolos Papoulias will today take on the task of trying to persuade political leaders to form a government and avert a new election amid mounting concern the country may leave the euro area.
Evangelos Venizelos, the socialist Pasok leader, will return the third, and final, mandate to form a government to Papoulias at a meeting in Athens today, after Alexis Tsipras, the leader of the biggest anti-bailout party, Syriza, turned down an appeal to join a unity government.
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The number of people applying for U.S. unemployment benefits ticked down last week after dropping sharply the previous week, evidence hiring could pick up this month.
Weekly applications dropped 1,000 to a seasonally adjusted 367,000 in the week ending May 5, the Labor Department said Thursday. The previous week’s figure was revised up slightly.
The four-week average, a less volatile measure, fell 5,250 to 379,000.
Applications are a measure of the pace of layoffs. When they stay consistently below 375,000, it suggests job growth is strong enough to lower the unemployment rate.
Applications are falling again after rising for most of April. The spike in applications coincided with weaker hiring in March and April. That raised fears that the job market is sputtering after a strong winter.
From December through February, employers had created an average 252,000 jobs a month. That was the best three months of job growth since the recession ended in June 2009, not counting months thrown off by the hiring of temporary census workers in 2010.
The unemployment rate has dropped a full percentage point since August _ to 8.1 percent in April.
The recent jobs picture has been clouded by an unseasonably warm winter. That allowed construction firms and other companies to hire earlier than usual, effectively stealing jobs from the spring. Economists are puzzling out how much of the slower hiring in March and April was weather-related payback and how much reflects economic weakness.
More than 500,000 Americans have left the work force since February. That’s one reason _ and not a good one _ that unemployment has continued to fall. People who are out of work but not looking for jobs aren’t counted among the unemployed.
The economy grew at a disappointing 2.2 percent from January through March, a rate consistent with less than 110,000 new jobs a month.
There’s still has a long way to go. The United States has regained only about 3.8 million, or 43 percent, of the 8.8 million jobs lost during and immediately after the recession.
The number of people receiving unemployment benefits also dropped. That is partly because extended benefit programs are winding down. More than 6.4 million people received benefits during the week that ended April 21, down nearly 175,000 from the previous week.
The government did release some good news this week: In March, employers advertised 3.74 million job openings, the most since July 2008. The increase in U.S. job openings suggests that weaker hiring gains in March and April could be temporary. It usually takes one to three months for employers to fill openings.
The Empire State Building is on an energy diet.
The hulking building, a symbol of American power and, to some, excess, has cut its energy use by 20%.
And that’s just due to changes to the building’s exterior. Once retrofits are made to tenant spaces on the inside, the second tallest building in Manhattan will be nearly 40% more efficient.
The retrofits will cost $20 million once they’re complete, and are expected to save the owners $4.4 million in annual energy costs.
"After one year, we have proven that investing in energy efficiency gives building owners a dollars-and-cents advantage," said Dave Myers, a president at Johnson Controls, which conducted the retrofit.
The renovations are part of a $500 million rehab plan for the building. The building’s owners, Malkin Holdings LLC, filed for an initial public offering back in February which valued the building at $2.5 billion.
The changes to the Empire State include:
–Filling the existing windows with an energy saving gas and adding an additional plastic pane.
–Upgrading the building’s cooling system.
–Using computerized "smart" energy management technology that can adjust temperatures floor by floor.
–Provide tenants with detailed energy use in their space.
–Automatically shut off lights in unused areas.
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The move to make the Empire State Building more efficient was announced three years ago amid much fanfare — Bill Clinton and New York Mayor Michael Bloomberg were in attendance at a press conference from the building’s 80th floor.
Energy efficiency often gets less attention than oil drilling, wind turbines or solar panels when it comes to tackling America’s energy challenge.
Yet efficiency often offers the biggest energy saving opportunity, and at a fraction of the cost of new sources.
Buildings account for 40% of the country’s energy use, and an average home emits twice as much carbon dioxide as the average car.
But the country has made some impressive gains in the efficiency arena, both since the energy crisis of the 1970s and more recently amid high oil prices.
The average refrigerator today uses a quarter of the energy it did in the 1970s, said Lowell Ungar, policy director at the Alliance to Save Energy.
In the last couple of years the government has taken steps to make furnaces, air conditioners and refrigerators even more efficient, said Ungar. It has also begun the phase-out of the notoriously inefficient incandescent light bulb.
On the building front, recommended building codes for both commercial and residential structures are 30% more efficient today than they were in 2006, said William Fay, executive director of the Energy Efficient Codes Coalition. By 2015, building codes are expected to be 50% more efficient.
Not all the all states have adopted these stricter codes, said Fay, and that’s one of the challenges in saving even more energy.
Auto efficiency has made major strides in the last few years. George W. Bush famously raised fuel efficiency standards for the first time in decades during the last days of his administration, and Obama has accelerated the trend.
Fuel efficiency standards have gone from 27 miles per gallon in 2006 to a target of 35.5 miles per gallon in 2016. By 2025 vehicles are supposed to average nearly 55 miles per gallon.
That’s a doubling of fuel efficiency.
"We are twice as energy efficient as a county today as were were 20 or 30 years ago," Daniel Yergin, Chairman of the consultancy IHS CERA and one of the world’s foremost energy analysts, said in recent Senate testimony. "And we ought to become twice as efficient again."
Illumina urged its shareholders Monday to reject a sweetened buyout offer from the Swiss drugmaker Roche, saying that the $6.5 billion deal still undervalues the California maker of genetic analysis instruments.
Roche raised its proposed price for Illumina last week, but Illumina CEO Jay Flatley says the offer is still not good enough. He calls the deal “opportunistic” and says his San Diego-based company is poised to deliver better returns through higher sales and profits.
Roche Holding AG did not immediately provide comment on Illumina’s statement.
Illumina shares fell 88 cents, or 1.7 percent, to $51.73 after word of the latest rejection.
Swiss drug company Roche Holding AG proposed to buy Illumina in January for $44.50 per share, or about $5.7 billion. Roche said the deal would strengthen Roche’s position in life sciences diagnostics because its technologies are complementary with Illumina’s.
Illumina’s board unanimously turned down Roche’s offer, saying it was “grossly inadequate” and that shareholders should not tender their stock to Roche.
Last week, Roche raised its offer to $51 per share, or about $6.5 billion, an increase of almost 15 percent.
Earlier Monday, Illumina said that its first-quarter revenue will be about $270 million on strong demand for its research instruments. The estimate tops current Wall Street expectations.
The company also said that it expects its adjusted earnings for the quarter will match of beat current Wall Street expectations. Analysts expect earnings of 31 cents per share on revenue of $258 million, according to a survey by FactSet.
Illumina said the numbers could change by the time it reports its final earnings results later this month.
Illumina makes equipment that biotechnology researchers can use to sequence genes or do other tasks.
Flatley said that during the first quarter, the company’s “book-to-bill” ratio showed that customer orders were outpacing deliveries for the third consecutive quarter. He said more customers are “getting back to work,” and boosting demand.
Illumina’s shares rose sharply after Roche made its initial offer for the company, and the stock is up about 65 percent for the year.
The bailouts of Bear Stearns and AIG were "distasteful" but still necessary, Federal Reserve Chairman Ben Bernanke told students at George Washington University on Tuesday.
Meanwhile, the Fed was "helpless" when it came to saving Lehman Brothers, he said.
"Lehman Brothers was in itself probably too big to fail, in the sense that its failure had enormous negative impacts on the global financial system," Bernanke said. "But there we were helpless, because it was essentially an insolvent firm."
In a lecture about the Fed’s emergency efforts during the financial crisis, Bernanke explained that the central bank was willing to bail out AIG (, Fortune 500) and Bear Stearns because it expected both firms would eventually be able to pay back their loans. Bear Stearns was ultimately acquired by JPMorgan Chase (, Fortune 500).
Lehman Brothers, on the other hand, had no collateral to put up in exchange for the Fed’s assistance.
"It was very difficult and in many ways distasteful intervention that we had to do on the grounds that we needed to do that to prevent the system from collapsing," Bernanke said. " But clearly, it is something fundamentally wrong with a system in which some companies are ‘too big to fail.’"
Bernanke also told students that without the Fed’s emergency efforts, the U.S. economy could have tanked even deeper.
"I think the view is increasingly gaining acceptance that without the forceful policy response that stabilized the financial system in 2008 and early 2009, we could have had a much worse outcome in the economy," he said.
The lecture was the third section of a four-part series at George Washington University, to be continued on Thursday. The Federal Reserve posts Bernanke’s slides and full videos online.
TaxMasters, the Houston-based firm that advertises it can help consumers facing problems with taxes, filed for bankruptcy protection Sunday.
The firm, which had a prominent ad campaign featuring CEO Patrick Cox on numerous cable networks, has already been facing complaints from the attorneys general of Texas and Minnesota, which accused it of deceptive practices.
The complaint from Texas Attorney General Greg Abbott, first filed nearly two years ago, brought a slew of consumer accusations against TaxMasters (). The civil trial in that case finally got underway Monday afternoon when TaxMasters’ request for a continuance was denied.
The Texas charges included unlawfully misleading customers about their service contract terms, failing to disclose its no-refunds policy, and falsely claiming that the firm’s employees would immediately begin work on a case. Sometimes the fact that TaxMasters did not actually start to work on a case until customers paid in full meant that taxpayers missed significant IRS deadlines.
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The complaint from Minnesota Attorney General Lori Swanson, filed in December 2010, alleges TaxMasters got customers to pay advance fees of $2,000 to $8,000 by misstating the help it would provide people with unpaid tax bills. In some cases, the company claimed it could reduce people’s tax bills by up to 90%, but then delivered little or no help, according to the complaint, pocketing the non-refundable deposits.
This complaint was settled in August of last year, with TaxMasters denying any wrongdoing but agreeing to reform its business practices in the state and pay $500,000.
In addition, the Better Business Bureau says it has received more than 1,000 complaints about TaxMasters over the course of the last three years.
The bankruptcy filing said TaxMasters owes creditors between $1 million and $10 million, and that its assets total only $50,000 or less. It did not list its creditors but it said it owes money to between 1,000 and 5,000 people and businesses payday loan.
Robert McKenzie, a tax attorney and partner with Chicago firm Arnstein & Lehr, said this is the third such tax settlement service to go bankrupt recently, following the demise of Roni Deutch and another firm, JK Harris. All three had been actively advertising their services.
"There are certainly reputable people doing this work," said McKenzie. "The problem with the ones that are failing is they’ve budgeted large amounts for advertising, and the intake interviews are done not by tax professionals but by sales people working on commission, and thus making unrealistic promises."
The company’s most recent financial reports show it spent nearly $16 million on advertising in 2010, eating up about 37% of its revenue. Among the networks TaxMasters advertised on was CNN, one of the parents of CNNMoney.
TaxMasters recently restated results to show a $4.7 million loss in 2010, and essentially break-even results in the first quarter of 2011, the most recent quarter for which it has reported results.
McKenzie said that the Internal Revenue Service is willing to settle cases for less than the taxes owed, but that in almost all the cases they end up taking the taxpayer’s home and other assets, in addition to payments out of future earnings. He said almost three-quarters of taxpayers who apply to pay less than they owe have those applications rejected by the IRS.
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Calls to Taxmasters and its attorney for comments about the bankruptcy filing and complaints were not immediately returned.
The company’s Web site made no mention of the bankruptcy filing Monday, even though it had signaled a bankruptcy filing was planned in a filing with the Securities and Exchange Commission on Friday.
The bankruptcy filing was made in Houston.
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