Finance Blog number 1

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. 

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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.

Greenest states to own an electric car

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." 

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Voters in Greece and France challenged austerity as Europe

U.S. job growth slumped in April for a second straight month. It pointed to a steadily growing but still sluggish economy that could tighten the presidential race.

A drop in the unemployment rate wasn’t a necessarily a healthy sign for the job market. The rate fell from 8.2 percent in March to 8.1 percent in April. But that was mainly because more people gave up looking for work.

People who aren’t looking for jobs aren’t counted as unemployed.

The 115,000 jobs added in April were fewer than the 154,000 jobs created in March, a number the government revised up from its first report a month ago of 120,000. It also marked a sharp decline from December through February, when the economy averaged 252,000 jobs per month.

The percentage of adults working or looking for work has fallen to its lowest level in more than 30 years. Many have become discouraged about their prospects.

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Here’s what The Associated Press’ reporters are finding:

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TEPID ECONOMY, TEPID HIRING

Over time, strong economic growth is vital for strong job growth.

But early this year, hiring accelerated much faster than economic growth did. Job gains averaged a strong 229,000 in the first three months. But the economy grew at a sluggish annual rate of 2.2 percent.

Economists began to wonder: Would growth catch up with hiring? Or would hiring slow to match economic growth (as measured by gross domestic product, or GDP)?

Some economists say April’s disappointing job growth suggests an answer, and it’s not a cheerful one:

“It now appears that jobs have decelerated into line with GDP, rather than GDP accelerating to catch up with jobs,” said Nigel Gault, an economist at IHS Global Insight.

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REVISING HISTORY

The job market seems to look better with hindsight.

The Labor Department has revised job growth upward for 10 straight months _ and for 18 of the past 21. Over the past 10 months, it’s added 413,000 jobs to the original estimates.

The job figures are revised twice. They’re updated in the two months after they first come out. And they’re revised again in an annual update meant to capture updated employment data from the states.

History shows that the updated totals typically follow the trend in job creation: When the economy is creating jobs consistently, the revisions tend to be positive. Months of job losses typically lead to negative revisions.

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THE POLITICAL DEBATE

A falling unemployment rate would seem to be good news for President Barack Obama’s re-election hopes. Dating to 1956, no incumbent president has lost when unemployment fell in the two years leading to an election.

On Election Day, unemployment will almost surely be less than it was two years earlier: 9.8 percent in November 2010.

But for the past two months, the rate has fallen for the wrong reason: More than 500,000 Americans have stopped looking for jobs and are no longer counted as unemployed business card. Job growth averaged a healthy 252,000 from December through February. It slowed to 135,000 in March and April.

The question is whether voters will focus more on the falling unemployment rate (good for Obama) or the modest job growth (not so good).

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A JAB FROM ROMNEY

Mitt Romney seized on the latter. He noted that the declining number of people seeking work explains the drop in the unemployment rate.

“This is way off from what should be happening in a normal recovery,” Romney said on Fox & Friends. “You have more people dropping out of the work force than you have getting jobs.”

“This is not progress,” Romney said.

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DISAPPEARING WORKERS

The percentage of Americans 16 and older working or looking for work is now 63.6 percent, the lowest since 1981. For men, the so-called “labor force participation rate” is 70 percent. That’s the lowest since the government started keeping records in 1948.

The rate peaked at 67.3 percent in early 2000 as women poured into the workplace. Since then, it’s turned south. Demographic and social trends help explain the drop: Baby boomers are aging and retiring.

And more women, especially in upper-income families, are staying at home. The drop in participation accelerated after the economy slid into recession in late 2007. The tough job market led many to give up looking for work.

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   SOUR INVESTORS

The stock market didn’t take Friday’s news well.

The Dow Jones industrial average sank 132 points, or 1 percent, in late-morning trading. The broader Standard & Poor’s 500 index fell 1.4 percent.

   Investors were a lot happier earlier this week. They sent the Dow to its highest close since December 2007.

   Technology stocks and banks led the market lower Friday. Utility companies were the only broad category of stock in the S&P 500 index trading higher. They tend to fare well when investors grow nervous about the economy.

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NO SURPRISE TO BERNANKE

One person not likely surprised by the sluggish hiring in April: Ben Bernanke.

The Federal Reserve chairman has cautioned for months that the spike in hiring at the start of the year didn’t match the economy’s more modest growth.

His Fed colleagues probably agree. Their latest forecasts show that even under a best-case scenario, unemployment will be at least 7.3 percent in late 2013. Historically, a normal rate would range between 5 percent and 6 percent.

Most analysts expect the Fed to keep its key interest rate at a record low near zero well into 2013, if not later. But few think hiring has weakened enough to trigger a third round of bond buying to help lower long-term rates and encourage more lending.

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Switzerland’s biggest bank UBS AG reported a 54 percent drop in first-quarter net profit for 2012 that it blamed Wednesday on a loss at the investment bank, an accounting charge on its debt and difficult market conditions.

First-quarter net profit fell to 827 million francs ($910 million) from 1.81 billion francs in the same period last year, the bank reported before trading opened in Zurich. The results did not meet analysts’ average estimate for a net profit of 1.2 billion Swiss francs ($1.32 billion).

UBS also offered a somewhat grim outlook for the second quarter of 2012, owing to Europe’s sovereign debt crisis, the U.S. federal deficit and continuing global uncertainties.

“Failure to make progress on these key issues would make further improvements in prevailing market conditions unlikely and would have the potential to continue the headwinds for revenue growth, net interest margins and net new money,” the bank reported.

Chief Executive Officer Sergio P. Ermotti said despite the “challenging market conditions” the bank had performed well.

“We improved operational performance across all our businesses, strengthened our leading capital ratios further, reduced risk-weighted assets and remained vigilant on costs,” he said in a statement. “The strong net new money inflows in our wealth management businesses provide further clear evidence of the trust our clients place in UBS.”

It was just the second quarter for the bank under the leadership of Ermotti, who took over in September with the aim of restoring clients’ trust following a case of alleged rogue trading in its investment bank that cost UBS $2 billion. Ermotti pledged to tighten oversight at UBS and restructure the ailing investment banking unit where the trading scandal occurred.

Last month, the specter of a damaging tax evasion case rose again. After resolving a long-running tax probe in the United States with a $780 million fine and the handover of thousands of client files, UBS now faces allegations by former staff in France that it also helped French clients cheat on their taxes.

The bank strenuously denies the allegations and says it will defend itself using “appropriate legal means.”

The first-quarter results for 2012 also were a turnaround from the last quarter of 2011 when the bank, Switzerland’s biggest by market capitalization, posted a net profit of 319 million francs.

Rival Credit Suisse reported a 95 percent drop in first-quarter net profit last week due to writedowns, staff severance costs, bonus payments and the strong Swiss franc.

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Iraq’s oil ministry said Thursday that the U.S. oil giant Exxon Mobil Corp. is not allowed to bid in the May energy auction because of its oil deals with the northern self-ruled Kurdish region in Iraq.

The Texas-based Exxon signed six deals with the Kurds last October to search for oil in six areas, bypassing the Baghdad government, which maintains that it must ratify all deals. Some of the deals cover areas located in a land claimed by both Kurds and Arabs.

Deputy head of the Oil Ministry’s Licensing and Petroleum Contracts Department, Sabah al-Saidi, told The Associated Press that the reason for the move was Exxon’s refusal to abandon its controversial deals with Kurds.

“Exxon has been removed from the list of qualified companies because it refused to abandon the deals with the Kurdish region as requested by the Ministry of Oil,” al-Saidi said.

The Kurds and Arab-led government in Baghdad have been at loggerheads over who has the final say in resources development. They have unilaterally signed scores of oil deals, mostly with mid-sized companies which Baghdad considers illegal and has blacklisted the companies involved.

Baghdad recently said that Exxon sent two letters, assuring that it would freeze the deals until the central government and the Kurds resolve their differences. But the Kurds have maintained the deals are still valid and that Exxon is committed to them.

Thursday’s announcement came as the Oil Ministry published the final list of 47 oil companies that are qualified to bid in the May 30-31 bidding round for 12 exploration blocs nationwide.

Nearly 70 percent of the blocs on offer hold natural gas blocs and the rest a combination of oil and gas. They are expected to add about 29 trillion cubic feet of natural gas to the current 126.7 trillion cubic feet in reserves, and about 10 billion barrels of oil to the current 143.1 billion barrels of oil.

Since 2008, Iraq has awarded 15 oil and gas deals to international energy companies, the first major investments in the country’s energy industry in more than three decades.

Under a previous deal with Baghdad, Exxon and Shell are developing one of Iraq’s biggest oil fields, the 8.6 billion-barrel West Qurna Stage 1 field in southern Basra province.

Baghdad aims to raise the daily output to 12 million barrels by 2017 _ a level that would put it nearly on par with Saudi Arabia’s current production capacity.

Many analysts say that target is unrealistic, because of the degraded state of the industry’s infrastructure after wars and an international embargo that lasted more than a decade.

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President Barack Obama is returning to his familiar agenda of righting the U.S. economy and winning a second term, wrapping up three days of Latin American summitry that yielded mixed results and were clouded by a Secret Service scandal.

Domestic issues are immediately on tap, with the Senate scheduled to vote Monday on Obama’s proposal to increase taxes on millionaires. The proposal stands little chance of passing Congress, but Obama has cast it as an election-year theme as he seeks to paint sharp contrasts between himself and his likely Republican challenger, Mitt Romney.

Obama returned to Washington late Sunday with a key free trade deal with Colombia ready to be fully enforced next month and with important face time with Latin American leaders that cannot hurt his diplomatic outreach.

But the weekend trip to Cartagena, Colombia, for the sixth Summit of the Americas also underscored old and new fissures that exist between the United States and its southern neighbors, from the U.S. isolation of Cuba to calls by some Latin American leaders to defang the violent drug cartels by legalizing drugs.

The trip was clouded by unseemly allegations against Secret Service personnel and military service members working on security in Cartagena ahead of Obama’s arrival. Obama, at a press conference in Cartagena, said that if the accusations, proved true “of course I’ll be angry.”

The Secret Service sent 11 agents home and placed them on leave for misconduct as the agency investigates what happened. Five members of the military working with the Secret Service were confined to quarters, pending an investigation into an alleged prostitution scandal.

“I expect that investigation to be thorough, and I expect it to be rigorous,” Obama said. “We are representing the people of the United States, and when we travel to another country, I expect us to observe the highest standards.”

The story could also be kept alive in Congress where at least one Republican committee chairman suggested the scandal may not be an isolated incident.

Obama began moving forward to domestic issues even as he was still wrapping up business in Cartagena. At the news conference, with Colombian President Juan Manuel Santos at his side, Obama mounted a vigorous defense of his tax proposals.

“I want everybody to remember, I’m going to say this repeatedly: This is not an argument about taking from A to give to B. This is not a redistributionist argument that we’re making. We’re making an argument about how do we grow the economy so that it’s going to be prospering in this competitive 21st century environment,” Obama said.

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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. 

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