Stores look to week after Christmas for sales

Bargain-hungry Americans will need to go on a post-Christmas spending binge to salvage this holiday shopping season.
Despite the huge discounts and other incentives that stores offered leading up to Christmas, U.S. holiday sales so far this year have been the weakest since 2008, when the nation was in a deep recession.
So stores now are depending on the days after Christmas to make up lost ground: The final week of December can account for about 15 percent of the month's sales, and the day after Christmas is typically one of the biggest shopping days of the year.
Stores, which don't typically talk about their plans for sales and other promotions during the season, are known for offering discounts of up to 70 percent after the holiday. This year, they're hoping to lure more bargain hunters who held off on shopping because they wanted to get the best deals of the season.
Still, a powerful winter storm, which pounded the nation's midsection on Wednesday and is heading toward the Northeast, could hurt post-Christmas shopping. The storm is bringing high winds and heavy snow that disrupted holiday travel, knocked out power to thousands of homes and were blamed in at least six deaths.
The Macy's location in Herald Square in New York was bustling with shoppers on Wednesday. There were a variety of deals throughout the store: candy dispensers for 70 percent off, various men's clothes were "buy one get one free," belts for 50 percent off, a bin of ties for $9.99.
Ulises Guzman, 30, a social worker, was shopping in the store. He said he waited to shop until the final days before Christmas, knowing that the deals would get better as stores got more desperate. He said he was expecting discounts of at least 50 percent.
The strategy worked. He saw a coat he wanted at Banana Republic for $200 in the days before Christmas but decided to hold off on making a purchase; on Wednesday, he got it for $80.
"I'm not looking at anything that's original price," he said.
Lenox Square Mall in Atlanta was also crowded by midday on Wednesday. Laschonda Pitluck, 18, a student in Atlanta, was shopping after Christmas because she wanted to get the best deals. Last year she spent over $100 on gifts but this year she's keeping it under $50.
Pitluck said she found items for 50 percent off, including a hoodie and jeans for herself at American Eagle and a shirt at Urban Outfitters. She said she would have bought the clothes if they hadn't been 50 percent off.
"I wasn't looking for deals before Christmas," said Pitluck, who also bought boxers for her boyfriend.
The shopping rush after Christmas illustrates just how important holiday sales are. Consumer spending accounts for 70 percent of economic activity, and many retailers can make up to 40 percent of their annual revenue during the two-month holiday shopping period at the end of the year.
So far, holiday sales of electronics, clothing, jewelry and home goods in the two months before Christmas increased 0.7 percent compared with last year, according to the MasterCard Advisors SpendingPulse report that was released on Tuesday. SpendingPulse, which tracks spending, said that's the weakest holiday performance since 2008 when sales dropped sharply, although the company did not know by how much.
The SpendingPulse data, which captures sales from Oct. 28 through Dec. 24 across all payment methods, is the first major snapshot of holiday retail sales. A clearer picture will emerge next week as retailers like Macy's and Target report monthly sales.
In the run-up to Christmas, analysts blamed bad weather for putting a damper on shopping. In late October, Superstorm Sandy battered the Northeast and mid-Atlantic states, which account for 24 percent of U.S. retail sales. That coupled with the presidential election, hurt sales during the first half of November.
Shopping picked up in the second half of November, but then the threat of the country falling off a "fiscal cliff" gained strength, throwing consumers off track once again. Lawmakers have yet to reach a deal that would prevent tax increases and government spending cuts set to take effect at the beginning of 2013. If the cuts and tax hikes kick in and stay in place for months, the Congressional Budget Office says the nation could fall back into recession.
Still, The National Retail Federation, the nation's largest retail trade group, said Wednesday that it's sticking to its forecast for total sales for November and December to be up 4.1 percent to $586.1 billion this year. That's more than a percentage point lower than the growth in each of the past two years, and the smallest increase since 2009 when sales were up just 0.3 percent.
Kathy Grannis, a spokeswoman for the group, noted that the trade group's definition of holiday sales not only includes clothes and electronics, but also food and building supplies.
"Stores have a big week ahead, and it's still too early to know how the holiday season fared, at this point," she said.

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US Treasury to take steps to avoid borrowing limit

The U.S. Treasury Department will begin taking steps on Friday to delay hitting the government's $16.4 trillion borrowing limit on Dec. 31.
Treasury Secretary Timothy Geithner said in a letter Wednesday to congressional leaders that the department will use accounting measures to save approximately $200 billion. That could keep the government from reaching the limit for about two months.
The move comes as President Barack Obama and the GOP congressional leadership resume negotiations over how to avoid a series of tax increases and spending cuts, known as the "fiscal cliff," that are scheduled to take effect in the new year.
Obama has sought to include an increase in the borrowing limit in any agreement to avoid the cliff. But Speaker John Boehner and other Republican leaders have demanded concessions in return. The negotiations hit a stalemate last week. Obama and lawmakers are returning to Washington this week to try again.
Geithner says the negotiations over tax and spending policies make it difficult to predict how long he can delay reaching the borrowing limit. The absence of a specific timeframe may be intended to pressure Republicans to allow a debt limit increase in a potential budget deal.
For now, Treasury will take several steps to delay reaching the limit. Geithner said it will stop selling Treasury securities used by state and local governments to support their own sales of tax-exempt bonds. That will keep the department from accumulating more debt.
And the department will stop investing in government retirement funds.
The borrowing limit is the amount of debt the government can pile up. The government accumulates debt two ways: It borrows money from investors by issuing Treasury bonds, and it borrows from itself, mostly from Social Security revenue.
In 2011, Congress raised the limit to nearly $16.4 trillion from $14.3 trillion. Three decades ago, the national debt was $908 billion. But Washington spent more than it took in, and the debt rose steadily — surpassing $1 trillion in 1982, then $5 trillion in 1996. It reached $10 trillion in 2008 as the financial crisis and recession dried up tax revenue and as the government spent more on unemployment benefits and other programs.
In August 2011, the rating agency Standard & Poor's stripped the U.S. government of its prized AAA bond rating because it feared that America's dysfunctional political system couldn't deliver credible plans to reduce the federal government's debt. S&P decried American "political brinksmanship" and concluded that "the differences between political parties have proven to be extraordinarily difficult to bridge."
A year and a half later, the two political parties are still as deadlocked as ever.
Despite S&P's warnings and the political stalemate, investors still want U.S. Treasurys. Given economic turmoil in Europe and uncertainty elsewhere, U.S. government debt and U.S. dollars look like the safest bet around.
That is why the interest rate, or yield, on 10-year Treasury notes has fallen from 2.58 percent on Aug. 5, 2011 to 1.75 percent Wednesday.

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Wall Street drops in thin session, led by retailers

Stocks fell for a third straight day on Wednesday, dragged lower by retail stocks after a report showed consumers spent less in the holiday shopping season than last year.
Trading was light, with volume at a mere 4.01 billion shares traded on the New York Stock Exchange, the Nasdaq and NYSE MKT, well below the daily average so far this year of about 6.48 billion shares. The day's volume was the lightest full day of trading so far in 2012. Many senior traders were still on vacation during this holiday-shortened week and major European markets were closed for the day.
Many investors said concerns about the "fiscal cliff" kept shoppers away from stores, suggesting markets may struggle to gain any ground until that issue is resolved. The CBOE Volatility Index <.vix> or VIX, Wall Street's favorite barometer of investor anxiety, rose 4.46 percent, closing above 19 for the first time since November 7.
A number of 2012's strongest performers advanced, a sign that portfolio managers may be engaging in "window dressing," a practice where market participants buy securities with big gains to improve the appearance of their holdings before presenting the results to clients. Bank of America Corp , which has more than doubled in 2012, added 2.6 percent to $11.54 on Wednesday.
Holiday-related sales rose 0.7 percent from October 28 through December 24, compared with a 2 percent increase last year, according to data from MasterCard Advisors SpendingPulse. The Morgan Stanley retail index <.mvr> skidded 1.8 percent while the SPDR S&P Retail Trust slipped 1.7 percent.
"With the 'fiscal cliff' hanging over our heads, it was hard to convince people to shop, and now it's hard to convince investors that there's any reason to buy going into year-end," said Rick Fier, director of trading at Conifer Securities in New York, which has about $12 billion in assets under administration.
President Barack Obama is due back in Washington early Thursday for a final effort to negotiate a deal with Congress to bridge a series of tax increases and government spending cuts set to begin next week, the so-called "fiscal cliff" many economists worry could push the U.S. economy into recession if it takes effect.
Coach Inc fell 5.9 percent to $54.13 as the S&P 500's biggest decliner, followed by Amazon.com , down 3.9 percent at $248.63, and Abercrombie & Fitch , off 3.5 percent at $45.44. Ralph Lauren Corp , Limited Brands and Gap Inc also ranked among the S&P 500's biggest decliners.
The Dow Jones industrial average <.dji> slipped 24.49 points, or 0.19 percent, to 13,114.59 at the close. The Standard & Poor's 500 Index <.spx> shed 6.83 points, or 0.48 percent, to 1,419.83. The Nasdaq Composite Index <.ixic> dropped 22.44 points, or 0.74 percent, to 2,990.16.
J.C. Penney Co was a notable exception to the weakness in retail stocks, surging 4.4 percent to $20.75 as the S&P 500's biggest gainer. It was followed closely by Bank of America and Genworth Financial , which each gained nearly 3 percent for the day.
"People want to show they own names like these, making them prime 'window dressing' candidates," said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.
"Bank of America keeps going up even though it's overbought and you'd expect a pullback at these levels. No one wanted it when it was under $10 a share, but they want it now."
The S&P 500 has fallen 1.5 percent over the past three sessions, the worst three-day decline since mid-November. The Dow Jones Transportation Average <.djt>, viewed as a proxy for business activity, fell 0.6 percent.
A Republican plan that failed to gain traction last week triggered the S&P 500's recent drop, highlighting the market's sensitivity to headlines centered on the budget talks.
During the last five trading days of the year and the first two of next year, it's possible for a "Santa rally" to occur. Since 1928, the S&P 500 has averaged a gain of 1.8 percent during that period and risen 79 percent of the time, according to data from PrinceRidge.
"While it's unlikely there could be a budget deal at any time, no one wants to get in front of that trade," said Conifer's Fier. "Investors can easily make up for any gains when there's more action in 2013."
Data showed U.S. single-family home prices rose in October, reinforcing the view that the domestic real estate market is improving, as the S&P/Case-Shiller composite index of 20 metropolitan areas gained 0.7 percent in October on a seasonally adjusted basis.
Decliners outnumbered advancers on the New York Stock Exchange by a ratio of about 2 to 1, while on the Nasdaq, more than five stocks fell for every three that rose.

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Wall Street sinks after election as "fiscal cliff" eyed

The Dow industrials lost more than 300 points in a sell-off on Wednesday that drove all major stock indexes down over 2 percent in the wake of the presidential election as investors' focus shifted to the looming "fiscal cliff" debate and Europe's economic troubles. The Standard & Poor's 500 Index posted its biggest daily percentage drop since June, with all 10 S&P sectors solidly lower and about 80 percent of stocks on both the New York Stock Exchange and the Nasdaq ending in negative territory. Both the Dow and the S&P 500 closed at their lowest levels since early August. Financial stocks and energy shares, two sectors that could face increased regulation after President Barack Obama's re-election, were the weakest on the day. The S&P financial index (.GSPF) lost 3.5 percent, while the S&P energy index (REU:^GSPEI) fell 3.1 percent. An S&P index of technology shares (.GSPT) slid 2.8 percent as the stock of Apple Inc (AAPL) entered bear market territory. Obama's victory had been anticipated, though many polls indicated a close race between the president and Mitt Romney, his Republican challenger, going into election day. The election was considered a major source of uncertainty for the market, but now the focus turns to the fiscal cliff, with investors worrying that if no deal is reached over some $600 billion in spending cuts and tax increases due to kick in early next year, it could derail the economic recovery. The Republican Party retained control of the U.S. House of Representatives, while the Senate remained under Democratic control. David Joy, chief market strategist at Ameriprise Financial in Boston, said this kind of divided government was disappointing "since that configuration has resulted in gridlock and there's no clear path towards unlocking that. "It holds implications for how quickly we resolve the fiscal cliff issue, or whether it gets resolved at all," said Joy, who helps oversee $571 billion in assets. The market's losses were broad, with pessimism exacerbated by overseas concerns after the European Commission said the region would barely grow next year, dashing hopes for improvement in the short term. Still, some viewed the day's slide as a buying opportunity, saying it was unlikely that no deal would be reached on the fiscal cliff and arguing that Europe's troubles were already priced into markets. "There's no question that Europe is lagging the rest of the developed and emerging world, but stocks will find a base soon, when investors start seeing through some of the smoke over the region and cliff," said Richard Weiss, who helps oversee about $120 billion in assets as a senior money manager at American Century Investments in Mountain View, California. The Dow Jones industrial average (^DJI) slid 312.95 points, or 2.36 percent, to close at 12,932.73. The Standard & Poor's 500 Index (^GSPC) fell 33.86 points, or 2.37 percent, to 1,394.53. The Nasdaq Composite Index (^IXIC) lost 74.64 points, or 2.48 percent, to close at 2,937.29. The S&P 500 closed below the key 1,400 level for the first time since August 30, while the Dow ended under 13,000 for the first time since August 2. About 7.81 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, slightly below last year's daily average of 7.84 billion, though Wednesday's volume did surpass that of many recent sessions. Contributing to the Nasdaq's decline, Apple shares fell 3.8 percent to $558, off 20.8 percent from an all-time intraday high of $705.07 set on September 21. That slump puts the stock of the world's most valuable publicly traded company in bear market territory. Despite Wednesday's sell-off, all three major U.S. stock indexes were still up for the year. At Wednesday's close, the Dow was up 5.9 percent for 2012 so far, while the S&P 500 was up 10.9 percent and the Nasdaq was up 12.8 percent. Wednesday's plunge was a reversal from Tuesday's rally when voting was under way. Defense and energy shares were among the market leaders that day, causing speculation that some investors were betting on a Romney win. On Wednesday, an index of defense shares (.DFX) fell 2.9 percent, its biggest one-day drop in a year. Shares of United Technologies (UTX) dropped 2.9 percent to $77.68 while Lockheed Martin (LMT) sank 3.9 percent to $91.15. Energy shares fell as investors bet that the industry may see increased regulation in Obama's second term, with less access to federal lands and water. Crude oil shed more than 4 percent while an index of coal companies (.DJUSCL) plunged 8.8 percent. Coal firms Peabody Energy (BTU) lost 9.6 percent to $26.24 and Arch Coal (ACI) sank 12.5 percent to $7.58. Among financials, JPMorgan Chase & Co (JPM) fell 5.6 percent to $40.46 and Goldman Sachs (GS) dropped 6.6 percent to $117.98. "The notion that you may have gotten a respite on the financial services side (with regulation) if Romney had been elected is obviously being unwound," said Mike Ryan, chief investment strategist at UBS Wealth Management Americas in New York. Healthcare stocks were mixed as President Obama's re-election rules out the possibility of a wholesale repeal of his healthcare reform law, though questions remain as to what parts of the domestic policy will be implemented. The S&P health care index (REU:^GSPAI) shed 1.9 percent. In contrast, Tenet Healthcare (THC) was the S&P 500's biggest percentage gainer, up 9.6 percent at $27.34. In 2008, stocks also rallied on election day, but then fell by the largest margin on record for a day following the vote, with each of the three major U.S. stock indexes posting losses ranging from 5 percent to 5.5 percent. After the bell, both Qualcomm Inc (QCOM) and Whole Foods Market Inc (WFM) reported results. Qualcom's revenue beat expectations, sending shares up 8 percent to $62.75 in extended trading, while Whole Foods dropped 3.3 percent to $92.75 after the bell. In the regular session, Qualcomm slid 3.7 percent to close at $58.12, while Whole Foods dropped 2.1 percent to $95.93.

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Coal company announces layoffs in response to Obama win

A coal company headed by a prominent Mitt Romney donor has laid off more than 160 workers in response to President Obama's election victory. Murray Energy said Friday that it had been "forced" to make the layoffs in response to the bleak prospects for the coal industry during Obama's second term. In a prayer circulated by the company, CEO Robert Murray said Americans had voted "in favor of redistribution, national weakness and reduced standard of living and lower and lower levels of personal freedom." "The American people have made their choice. They have decided that America must change its course, away from the principals of our Founders," Murray said in the prayer, which was delivered in a meeting with staff members earlier this week. "Lord, please forgive me and anyone with me in Murray Energy Corporation for the decisions that we are now forced to make to preserve the very existence of any of the enterprises that you have helped us build." Murray cited pending regulations from the Environmental Protection Agency and the possibility of a carbon tax as factors that could lead to the "total destruction of the coal industry by as early as 2030." In August, Murray shuttered an operation in Ohio, again blaming the Obama Administration and its alleged "war on coal." Mitt Romney echoed this line on the campaign trail, accusing Obama of undermining the country's energy security. Administration officials responded to these attacks by affirming that Obama supports "clean coal." They also pointed out that more coal miners were on the job in the U.S. this year than at any time since 1997, and that U.S. coal exports have risen 31%. Domestically, however, coal production has dropped sharply, falling roughly 15% in 2011 versus years prior, according to the National Mining Association. But the industry's woes go way beyond Obama's policies. Utility companies are increasingly ditching coal in favor of cheaper, cleaner natural gas. In addition, the recession and improved energy efficiency have crimped demand for power. Looking ahead, the coal industry faces a rule going into effect in 2015 that tightens the amount of mercury coal plants can emit, as well as regulations on mountain-top mining. Both will make coal production and coal-fired power plants more expensive. The rules themselves are not Obama's doing, although he has implemented them fairly quickly. Most stem from the Clean Air Act, which was signed by Richard Nixon and strengthened during the first Bush presidency. CNNMoney's Steve Hargreaves contributed reporting.

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U.S. to Pass Saudi Arabia in Energy Production, IEA Says: Huge Foreign Policy, Economic Implications

A new report by the International Energy Association says the U.S. will become the world's largest oil producer by 2017, overtaking current leaders Saudi Arabia and Russia. U.S. energy policies initiated by the George W. Bush administration and implemented by President Barack Obama have moved the U.S. toward energy independence and away from Middle East energy sources. U.S. oil production has risen rapidly since 2008 and oil imports are at their lowest level in two decades. "North America is at the forefront of a sweeping transformation in oil and gas production that will affect all regions of the world, yet the potential also exists for a similarly transformative shift in global energy efficiency," says IEA Executive Director Marian von der Hoeven in a statement. The IEA also says the U.S. could become self-sufficient in energy by 2035 and a net exporter of natural gas by 2020. The Obama administration's push to develop and grow domestic natural gas capabilities has led to a natural gas drilling boom. Production has jumped 15% in four years but the glut in natural gas supplies have also caused the price of natural gas to plummet. According to the White House, the U.S. holds a 100-year supply of natural gas and domestic production is at an all-time high. The Daily Ticker's Aaron Task and Henry Blodget both agree that the explosion in domestic energy production could alter the geopolitical landscape and U.S. labor market. "The foreign policy implications are maybe even bigger than the economic ones," says Task. "For 50 years or more we have been just addicted and coupled to a region of the world where so many people hate us," Blodget adds. Oil and petroleum imports have fallen an average of more than 1.5 million barrels per day and domestic crude oil production has increased by an average of more than 720,000 barrels per day since 2008. As domestic drilling has expanded so has the number of oil and gas production jobs. According to the Federal Reserve Bank of St. Louis, job growth in these industries has risen 25% since January 2010. Related: The Fracking Revolution: More Jobs and Cheaper Energy Are Worth the "Manageable" Risks, Yergin Says President Obama says natural gas production could support 600,000 jobs by the end of the decade. Most of these positions are highly desirable from a financial standpoint. Drilling and support jobs pay about $34.50 an hour, 50% more than the national average according to The New York Times. Cheap natural gas and the administration's eagerness to expand U.S. energy production has shifted resources away from green energy technologies like solar and wind. Related: Robert F. Kennedy Jr.: Renewable Energy Is Key to U.S. Growth The method of extracting natural gas from shale rock formations has come under intense scrutiny. Many local cities and communities have already banned the practice. Hydraulic fracturing, more commonly referred to as hydrofracking or fracking, involves injecting large amounts of sand, water and chemicals into the ground at high pressures. Critics of fracking say this process produces millions of gallons of wastewater that contain highly corrosive salts and carcinogens. These radioactive elements could pollute water sources such as rivers and underground aquifers and pose serious dangers to the environment and individuals.

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Eurozone back in recession in Q3

The 17-country eurozone has bowed to the inevitable and fallen back into recession for the first time in three years as a sprawling debt crisis took its toll on the region's stronger economies. And with surveys pointing to increasingly depressed conditions across the eurozone at a time of high unemployment in many countries, there are fears that the recession will deepen, and make the debt crisis even more difficult to handle. Official figures Thursday showed that the eurozone contracted by 0.1 percent in the July to September period from the quarter before as economies including Germany and the Netherlands suffer from falling demand. The decline reported by Eurostat, the EU's statistics office, was in line with market expectations and follows on from the 0.2 percent fall recorded in the second quarter. As a result, the eurozone is officially in recession, commonly defined as two straight quarters of falling output. "We can dispense with the euphemisms and equivocation, and openly proclaim that the euro area economy is indeed in technical recession," said James Ashley, senior European economist at RBC Capital Markets. Because of the eurozone's grueling three-year debt crisis, the region has the focus of concern for the world economy. The eurozone's economy is worth around €9.5 trillion, or $12.1 trillion, which puts it on a par with the U.S. economy. The region, with its 332 million population, is the U.S.'s largest export customer, and any fall-off in demand will hit order books. While the U.S has managed to bounce back from its own savage recession in 2008-09, albeit inconsistently, and China continues to post still-strong growth, Europe's economies have been on a downward spiral — and there is little sign of any improvement in the near-term. The eurozone has managed to avoid returning to recession for the first time since the financial crisis following the collapse of U.S. investment bank Lehman Brothers, mainly thanks to the strength of its largest single economy, Germany. But even that country is struggling now as confidence wanes and exports drain in light of the debt problems afflicting large chunks of the eurozone. Germany's economy grew a muted 0.2 percent in the third quarter, down from a 0.3 percent increase in the previous quarter. Over the past year, Germany's annual growth rate has more than halved to 0.9 percent from 1.9 percent. Perhaps the most dramatic decline among the eurozone's members was seen in the Netherlands, whose economy shrank 1.1 percent on the previous quarter. Five eurozone countries are in recession — Greece, Spain, Italy, Portugal and Cyprus. Those five are also at the center of Europe's debt crisis and are imposing austerity measures, such as cuts to pensions and increases to taxes, in an attempt to stay afloat. As well as hitting workers' incomes and living standards, these measures have also led to a decline in economic output and a sharp increase in unemployment. Spain and Greece have unemployment rates of over 25 percent. Their young people are faring even worse with every other person out of work. As well as being a cost to governments who have to pay out more for benefits, it carries a huge social and human cost. Protests across Europe on Wednesday highlighted the scale of discontent and with economic surveys pointing to the downturn getting worse, the voices of anger may well get louder still. "The likelihood is that this anger will continue to grow unless European leaders and policymakers start to act as if they have a clue as to how to resolve the crisis starting to unravel before their eyes," said Michael Hewson, markets analyst at CMC Markets. The wider 27-nation EU, which includes non-euro countries, avoided the same fate. It saw output rise 0.1 percent during the quarter, largely on the back of an Olympics-related boost in Britain. The EU's output as a whole is greater than the U.S. It is also a major source of sales for the world's leading companies. Forty percent of McDonald's global revenue comes from Europe - more than it generates in the U.S. General Motors, meanwhile, sold 1.7 million vehicles in Europe last year, a fifth of its worldwide sales.

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Are We Regulating Ourselves Back Into Recession?

Let us put an end to self-inflicted wounds," President Gerald Ford told Congress in 1975. "And let us remember that our national unity is a most priceless asset." While Ford was talking about the scars from the Vietnam War, his words seem relevant today. Our nation grapples with not one divisive issue, but a basket of them, each pulling and undermining our already battered confidence, while testing our resolve and straining the limits of logic. What are we doing to ourselves, America? In just two short weeks, instead of closing the books after a bruising election, we've not only kept the rancor alive but have doubled down on it. In this morning's papers alone, I easily counted a dozen different areas of discourse before growing tired of it all. As my colleague Mike Santoli and I discuss in the attached video, with so much going on — and with so much wrong — is it any wonder stocks are moving in reverse at a fast clip since the second quarter correction. "It feels like a particularly heavy round of one of these anti-business — or at least calling business to task — moments," Santoli says in the face of my long and growing list of negatives, which include higher taxes, the fiscal cliff, the Benghazi aftermath, turnover at the CIA, federal probes of FedEx and UPS over mail-order medicine, BP's record fine, further investigation into banks for money laundering, as well as another round of mandatory stress testing. Before you go off and call me some kind of zero-regulation advocate or pessimist, all I am saying is that it strikes me as slightly counterproductive to be building up and and tearing down the banks at the same time. And Santoli seems to agree, saying that it is alarming to see how much banks have to spend on compliance, legal and regulatory issues, calling it a "massive weight." As much as we had recently been gaining some degree of comfort over the economy, housing and jobs, it suddenly seems as if we're doing everything wrong. ''Is it ever going to be a good time to cinch up tax rates?" Santoli questions. Obviously the answer is no, and yet the markets cling to the belief that our elected officials will break ranks and reach some sort of last-minute grand bargain solution. Maybe I am just being cynical, but I am of the mind that no major changes will emerge without first going through a period of calamity. Santoli is a smidge more optimistic, however, clinging to a ''residual hope'' that the President has a ''Nixon-to-China moment" and that his second term is not about fighting individual, ideological fight. "That is the distant hope you have to hold," he says. How about you? Have you given up hope in the face of so much negativity

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Judge asks Hostess to mediate with union

WHITE PLAINS, N.Y. (AP) -- Twinkies won't die that easily after all. Hostess Brands Inc. and its second largest union will go into mediation to try and resolve their differences, meaning the company won't go out of business just yet. The news came Monday after Hostess moved to liquidate and sell off its assets in bankruptcy court citing a crippling strike last week. The bankruptcy judge hearing the case said Monday that the parties haven't gone through the critical step of mediation and asked the lawyer for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which has been on strike since Nov. 9, to ask his client, who wasn't present, if the union would agree to participate. The judge noted that the bakery union, which represents about 30 percent of Hostess workers, went on strike after rejecting the company's latest contract offer, even though it never filed an objection to it. "Many people, myself included, have serious questions as to the logic behind this strike," said Judge Robert Drain, who heard the case in the U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. "Not to have gone through that step leaves a huge question mark in this case." Hostess and the union agreed to mediation talks, which are expected to begin the process on Tuesday. In an interview after the hearing on Monday, CEO Gregory Rayburn said that the two parties will have to agree to contract terms within 24 hours of the Tuesday since it is costing $1 million a day in overhead costs to wind down operations. But even if a contract agreement is reached, it is not clear if all 33 Hostess plants will go back to being operational. "We didn't think we had a runway, but the judge just created a 24-hour runway," for the two parties to come to an agreement, Rayburn said. Hostess, weighed down by debt, management turmoil, rising labor costs and the changing tastes of America, decided on Friday that it no longer could make it through a conventional Chapter 11 bankruptcy restructuring. Instead, the company, which is based in Irving, Texas, asked the court for permission to sell assets and go out of business. It's not the sequence of events that the maker of Twinkies, Ding Dongs and Ho Ho's envisioned when it filed for bankruptcy in January, its second Chapter 11 filing in less than a decade. The company, who said that it was saddled with costs related to its unionized workforce, had hoped to emerge with stronger financials. It brought on Rayburn as a restructuring expert and was working to renegotiate its contract with labor unions. But Rayburn wasn't able to reach a deal with the bakery union. The company, which had been contributing $100 million a year in pension costs for workers, offered workers a new contract that would've slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduction in health benefits. But the bakery union decided to strike. By that time, the company had reached a contract agreement with its largest union, the International Brotherhood of Teamsters, which urged the bakery union to hold a secret ballot on whether to continue striking. Although many bakery workers decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels. Rayburn said that Hostess was already operating on razor thin margins and that the strike was the final blow. The company's announcement on Friday that it would move to liquidate prompted people across the country to rush to stores and stock up on their favorite Hostess treats. Many businesses reported selling out of Twinkies within hours and the spongy yellow cakes turned up for sale online for hundreds of dollars. Even if Hostess goes out of business, its popular brands will likely find a second life after being snapped up by buyers. The company says several potential buyers have expressed interest in the brands. Although Hostess' sales have been declining in recent years, the company still does about $2.5 billion in business each year. Twinkies along brought in $68 million so far this year.

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Just Explain It: What is the Strategic Petroleum Reserve?

Eliminating America's dependency on foreign oil has been a policy goal for at least the last two U.S. Presidents. According to the International Energy Agency, by 2020, the U.S. will overtake Saudi Arabia as the world's number one oil producer. However, there's still some work to do. The United States Energy Information Administration reported that 45% of the petroleum consumed by the U.S. in 2011 was from foreign countries. Even though the country is well on its way to becoming self reliant, there's always a chance we could hit a major bump in the road. The good thing is we have protection. It's called the Strategic Petroleum Reserve or S.P.R. So here's how the S.P.R. works: The reserve was created after the 1973 energy crisis when an Arab oil embargo halted exports to the United States. As a result, fuel shortages caused disruptions in the U.S. economy. The reserves are located underground in four man-made salt domes in Texas and Louisiana. All four locations combined hold a total of 727 million barrels of oil. The inventory is currently at 695 million barrels. That's around 80 days of import protection. It's the largest emergency oil supply in the world -- it's worth about $63 billion. Only the President has the ability to tap the reserves in case of severe energy supply interruption. It's happened three times. Twice within the last decade. In 2005, President Bush ordered the emergency sale of 11 million barrels when Hurricane Katrina shutdown 25 percent of domestic production. In 2011, President Obama ordered the release of 30 million barrels to help offset disruptions caused by political upheaval in the Middle East. Following the release order, the reserve issues a notice of sale to solicit competitive offers. In the most recent sale involving the Obama administration, the offers resulted in contracts with 15 companies for delivery of 30.6 million barrels of oil. To put that in context, last year the U.S. consumed almost seven billion barrels of oil — that's 19 million per day -- or about 22% of the world's consumption. Related Link: Using the Strategic Petroleum Reserve Like a Spigot The release in 2011 had little effect on the price of gas at the pump. Consumers paid about 2% less for a week before the prices began to climb again. Related link: Just Explain It: Why Social Security is Running Out of Money Did you learn something? Do you have a topic you'd like explained? Give us your feedback in the comments below or on Twitter using #justexplainit.

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Apple to produce line of Macs in the US next year

NEW YORK (AP) -- Apple CEO Tim Cook says the company will move production of one of its existing lines of Mac computers from China to the United States next year. Industry watchers said the announcement is both a cunning public-relations move and a harbinger of more manufacturing jobs moving back to the U.S. as wages rise in China. Cook made the comments in part of an interview taped for NBC's "Rock Center," but aired Thursday morning on "Today" and posted on the network's website. In a separate interview with Bloomberg Businessweek, he said that the company will spend $100 million in 2013 to move production of the line to the U.S. from China. "This doesn't mean that Apple will do it ourselves, but we'll be working with people and we'll be investing our money," Cook told Bloomberg. That suggests the company could be helping one of its Taiwanese manufacturing partners, which run factories in China, to set up production lines in the U.S. devoted to Apple products. Research firm IHS iSuppli noted that both Foxconn Technology Group, which assembles iPhones, and Quanta Computer Inc., which does the same for MacBooks, already have small operations in the U.S. Apple representatives had no comment Thursday beyond Cook's remarks. Like most consumer electronics companies, Apple forges agreements with contract manufacturers to assemble its products overseas. However, the assembly accounts for a fraction of the cost of making a PC or smartphone. Most of the cost lies in buying chips, and many of those are made in the U.S., Cook noted in his interview with NBC. The company and Foxconn have faced significant criticism this year over working conditions at the Chinese facilities where Apple products are assembled. The attention prompted Foxconn to raise salaries. Cook didn't say which line of computers would be produced in the U.S. or where in the country they would be made. But he told Bloomberg that the production would include more than just final assembly. That suggests that machining of cases and printing of circuit boards could take place in the U.S. The simplest Macs to assemble are the Mac Pro and Mac Mini desktop computers. Since they lack the built-in screens of the MacBooks and iMacs, they would likely be easier to separate from the Asian display supply chain. Analyst Jeffrey Wu at IHS iSuppli said it's not uncommon for PC makers to build their bulkier products close to their customers to cut down on delivery times and shipping costs. Regardless, the U.S. manufacturing line is expected to represent just a tiny piece of Apple's overall production, with sales of iPhones and iPads now dwarfing those of its computers. Apple is latching on to a trend that could see many jobs move back to the U.S., said Hal Sirkin, a partner with The Boston Consulting Group. He noted that Lenovo Group, the Chinese company that's neck-and-neck with Hewlett-Packard Co. for the title of world's largest PC maker, announced in October that it will start making PCs and tablets in the U.S. Chinese wages are raising 15 to 20 percent per year, Sirkin said. U.S. wages are rising much more slowly, and the country is a cheap place to hire compared to other developed countries like Germany, France and Japan, he said. "Across a lot of industries, companies are rethinking their strategy of where the manufacturing takes place," Sirkin said. Carl Howe, an analyst with Yankee Group, likened Apple's move to Henry Ford's famous 1914 decision to double his workers' pay, helping to build a middle class that could afford to buy cars. But Cook's goal is probably more limited: to buy goodwill from U.S. consumers, Howe said. "Say it's State of the Union 2014. President Obama wants to talk about manufacturing. Who is he going to point to in the audience? Tim Cook, the guy who brought manufacturing back from China. And that scene is going replay over and over," Howe said. "And yeah, it may be only (public relations), but it's a lot of high-value PR." Cook said in his interview with NBC that companies like Apple chose to produce their products in places like China, not because of the lower costs associated with it, but because the manufacturing skills required just aren't present in the U.S. anymore. He added that the consumer electronics world has never really had a big production presence in the U.S. As a result, it's really more about starting production in the U.S. than bringing it back, he said. But for nearly three decades Apple made its computers in the U.S. It started outsourcing production in the mid-90s, first by selling some plants to contract manufacturers, then by hiring manufacturers overseas. It assembled iMacs in Elk Grove, Calif., until 2004. Some Macs already say they're "Assembled in USA." That's because Apple has for years performed final assembly of some units in the U.S. Those machines are usually the product of special orders placed at its online store. The last step of production may consist of mounting hard drives, memory chips and graphics cards into computer cases that are manufactured elsewhere. With Cook's announcement Thursday, the company is set to go much further in the amount of work done in the U.S. The news comes a day after Apple posted its worst stock drop in four years, erasing $35 billion in market capitalization. Apple's stock rose $8.45, or 1.6 percent, to close at $547.24 Thursday.

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US economy adds 146K jobs, rate falls to 7.7 pct.

WASHINGTON (AP) -- The pace of U.S. hiring remained steady in November despite disruptions from Superstorm Sandy and employers' concerns about impending tax increases from the year-end "fiscal cliff." Companies added 146,000 jobs, and the unemployment rate fell to 7.7 percent — the lowest in nearly four years — from 7.9 percent in October. The rate declined mainly because more people stopped looking for work and weren't counted as unemployed. The government said Superstorm Sandy had only a minimal effect on the figures. The Labor Department's report Friday was a mixed one. But on balance, it suggested that the job market is gradually improving. November's job gains were roughly the same as the average monthly increase this year of about 150,000. Most economists are encouraged by the job growth because it's occurred even as companies have reduced investment in heavy machinery and other equipment. "The good news is not that the labor market is improving rapidly — it isn't — but that employment growth is holding up despite all the fears over the fiscal cliff," said Nigel Gault, an economist at IHS Global Insight. Still, Friday's report included some discouraging signs. Employers added 49,000 fewer jobs in October and September combined than the government had initially estimated. And economists noted that the unemployment rate would have risen if the number of people working or looking for work hadn't dropped by 350,000. The government asks about 60,000 households each month whether the adults have jobs and whether those who don't are looking for one. Those without a job who are looking for one are counted as unemployed. Those who aren't looking aren't counted as unemployed. A separate monthly survey seeks information from 140,000 companies and government agencies that together employ about one in three nonfarm workers in the United States. Many analysts thought Sandy would hold back job growth significantly in November because the storm forced restaurants, retailers and other businesses to close in late October and early November. It didn't. The government noted that as long as employees worked at least one day during a pay period — two weeks for most people — its survey would have counted them as employed. Yet there were signs that the storm disrupted economic activity in November. Construction employment dropped 20,000. And weather prevented 369,000 people from getting to work — the most for any month in nearly two years. These workers were still counted as employed. All told, 12 million people were unemployed in November, about 230,000 fewer than the previous month. That's still many more than the 7.6 million who were out of work when the recession officially began in December 2007. Investors appeared pleased with the report, though the market gave up some early gains. The Dow Jones industrial average was up 53 points in mid-day trading. The number of Americans who were working part time in November but wanted full-time work declined. And a measure of discouraged workers — those who wanted a job but hadn't searched for one in the past month — rose slightly. Those two groups, plus the 12 million unemployed, make up a broader measure that the government calls "underemployment." The underemployment rate fell to 14.4 percent in November from 14.6 percent in October. It's the lowest such rate since January 2009. Since July, the economy has added an average of 158,000 jobs a month. That's a modest pickup from an average of 146,000 in the first six months of the year. In November, retailers added 53,000 positions. Temporary-help companies added 18,000. Education and health care also gained 18,000. Auto manufacturers added nearly 10,000 jobs. Still, overall manufacturing jobs fell 7,000. That was pushed down by a loss of 12,000 jobs in food manufacturing that likely reflects the layoff of workers at Hostess. Paul Ashworth, an economist at Capital Economics, noted that hiring by private companies was actually better in October than the government first thought. The overall job figures were revised down for October because governments themselves cut about 38,000 more jobs than was first estimated. The U.S. economy grew at a solid 2.7 percent annual rate in the July-September quarter. But many economists say growth is slowing to a 1.5 percent rate in the October-December quarter, largely because of the storm and threat of the fiscal cliff. The storm held back consumer spending and income, which drive economic growth. Consumer spending declined in October, the government said. And work interruptions caused by Sandy reduced wages and salaries that month by about $18 billion at an annual rate. Still, many say economic growth could accelerate next year if the fiscal cliff is avoided. The economy is also expected to get a boost from efforts to rebuild in the Northeast after the storm.

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Just Explain It: Why the Fiscal Cliff May Trigger a Recession

Lawmakers in Washington appear to be making little to no progress in avoiding the impending so-called fiscal cliff. House Speaker John Boehner, R-Ohio, said Friday the negotiations are "almost nowhere." On Thursday Boehner rejected a proposal from the Obama administration saying that the Democrats need to "get serious about real spending cuts." President Obama's offer continues to call for higher taxes on the wealthy and an extension of the payroll tax cut. But Republicans say they will not agree to a plan that raises taxes. As the country continues to head toward the fiscal cliff, this Just Explain It helps to make sense of what it is. On December 31st, most of us would like to be thinking about a prosperous new year ahead…drinking bubbly and singing Auld Lang Syne with friends. But there's a chance we could be singing a different tune if President Obama and Congress don't agree on measures to avoid the fiscal cliff. First, let me explain what the fiscal cliff is. The fiscal cliff refers to the potentially disastrous situation the U-S faces at the end of this year. At midnight on December 31st, a number of laws are set to expire. If the President and the Republicans don't reach an agreement before then, Americans could face broad government spending cuts and tax increases on January 1st. The combined amount would total over 500 billion dollars. Those 500 billion dollars equal about three to four percent of the nation's entire gross domestic product. This is what's referred to as the fiscal cliff. If there isn't a resolution, here are the specifics of what will happen. Taxes would go up for almost every taxpayer and many businesses. The Bush-era tax cuts, which tax relief for middle and upper-class tax payers, would be a thing of the past. So would President Obama's payroll tax cut which added about a thousand dollars a year to the average worker's income. Government spending would be slashed. That means less money for most military, domestic and federal programs. $26 billion in emergency unemployment-compensation would be gone. Medicare payments to doctors would be reduced by $11 billion. Federal programs would take the biggest hit. They stand to lose a total of $65 billion. If the fiscal cliff isn't avoided, some investors will be hit hard. Those who receive qualified dividends could see the tax rate on those dividends go from 15% to almost 40% in 2013. Many business owners believe going over the fiscal cliff will cripple the economy, triggering a deep recession. They fear demand for their products or services will decrease because consumers will have less money to spend. It also means that they won't be able to afford new hires or expand their businesses. Since most Americans would be paying more in taxes, they'd be less inclined to make big purchases, like a home or a new car. None of this is set in stone, but that's part of the problem. Markets, businesses and people in general hate uncertainty. The fear of the unknown facing us at the beginning of next year is exactly why so many people are so worked up over the fiscal cliff. Did you learn something? Do you have a topic you'd like explained? Give us your feedback in the comments below or on twitter using #justexplainit.

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Just Explain It: Why the Fiscal Cliff May Trigger a Recession

Lawmakers in Washington appear to be making little to no progress in avoiding the impending so-called fiscal cliff.  House Speaker John Boehner, R-Ohio, said Friday the negotiations are "almost nowhere."  On Thursday Boehner rejected a proposal from the Obama administration saying that the Democrats need to "get serious about real spending cuts."

President Obama's offer continues to call for higher taxes on the wealthy and an extension of the payroll tax cut.   But Republicans say they will not agree to a plan that raises taxes.

As the country continues to head toward the fiscal cliff, this Just Explain It helps to make sense of what it is.

On December 31st, most of us would like to be thinking about a prosperous new year ahead…drinking bubbly and singing Auld Lang Syne with friends.  But there's a chance we could be singing a different tune if President Obama and Congress don't agree on measures to avoid the fiscal cliff.

First, let me explain what the fiscal cliff is.

The fiscal cliff refers to the potentially disastrous situation the U-S faces at the end of this year.  At midnight on December 31st, a number of laws are set to expire.  If the President and the Republicans don't reach an agreement before then, Americans could face broad government spending cuts and tax increases on January 1st.   The combined amount would total over 500 billion dollars. Those 500 billion dollars equal about three to four percent of the nation's entire gross domestic product.  This is what's referred to as the fiscal cliff.

If there isn't a resolution, here are the specifics of what will happen.

Taxes would go up for almost every taxpayer and many businesses. The Bush-era tax cuts, which tax relief for middle and upper-class tax payers, would be a thing of the past.  So would President Obama's payroll tax cut which added about a thousand dollars a year to the average worker's income.

Government spending would be slashed.  That means less money for most military, domestic and federal programs.  $26 billion in emergency unemployment-compensation would be gone. Medicare payments to doctors would be reduced by $11 billion. Federal programs would take the biggest hit.  They stand to lose a total of $65 billion.

If the fiscal cliff isn't avoided, some investors will be hit hard.  Those who receive qualified dividends could see the tax rate on those dividends go from 15% to almost 40% in 2013.

Many business owners believe going over the fiscal cliff will cripple the economy, triggering a deep recession.  They fear demand for their products or services will decrease because consumers will have less money to spend.  It also means that they won't be able to afford new hires or expand their businesses.   Since most Americans would be paying more in taxes, they'd be less inclined to make big purchases, like a home or a new car.

None of this is set in stone, but that's part of the problem.  Markets, businesses and people in general hate uncertainty. The fear of the unknown facing us at the beginning of next year is exactly why so many people are so worked up over the fiscal cliff.

Did you learn something? Do you have a topic you'd like explained?  Give us your feedback in the comments below or on twitter using #justexplainit.

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overnment says it is investigating data brokers

WASHINGTON (AP) — The government says it will investigate companies that collect and sell personal information about consumers to determine whether they need to improve their privacy practices.

The Federal Trade Commission said Tuesday that it ordered nine data brokers to provide the agency with details about their sources of information, how they use the information they gather and whether consumers have access to the data.

The consumer profiles assembled by data brokers allow advertisers and retailers to tailor marketing campaigns to specific customers.

The nine companies are: Acxiom of Little Rock, Ark.; Corelogic of Irvine, Calif.; Datalogix of Westminster, Colo.; eBureau of St. Cloud, Minn.; ID Analytics of San Diego; Intelius of Bellevue, Wash.; Peekyou of New York; Rapleaf of Chicago; and Recorded Future of Cambridge, Mass

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Amgen to pay $762M settlement over drug marketing

Amgen Inc.  has agreed to pay $762 million to resolve federal litigation accusing the drugmaker of marketing the anemia treatment Aranesp for unapproved uses.

The Thousand Oaks, Calif., company pleaded guilty Tuesday to illegally introducing a misbranded drug into interstate commerce and will pay a $136 million fine and a $14 million forfeiture, according to the U.S. Attorney's Office for the Eastern District of New York.

It also agreed to a $612 million civil settlement according to a law firm connected to the case.

But the U.S. attorney's office declined to comment on that because the civil settlement won't be unsealed until a Wednesday court hearing, when a federal judge also will decide whether to accept the plea and sentence in the criminal case.

Amgen said in an email that if the court accepts the plea and sentence, it will immediately resolve civil and criminal matters for which it had set aside $780 million last year. A company representative declined further comment on the plea agreement.

Amgen develops biologic medicines, or drugs produced by living cells rather than by mixing chemicals. Aranesp is approved for treating patients with anemia caused by chronic renal failure and chemotherapy.

The Food and Drug Administration approved the drug to be administered once a week or once every two or three weeks, depending on the patient. But prosecutors accused Amgen, among other things, of promoting a once-a-month dose to help Aranesp compete with Johnson & Johnson's Procrit, which was well-established in the market, according to federal court documents.

Amgen sales representative created a "Freedom Time" chart to show both doctors and patients how much time they could save if the drug was administered less frequently, the documents said. Sales representatives also used clinical studies to support the dosing, even though the FDA had found the studies insufficient to support its safety and effectiveness.

The guilty plea sends a message to the drug industry that "if you introduce misbranded drugs into interstate commerce, we will find you, prosecute you and hold you accountable," said Marshall Miller, who served as acting U.S. attorney for the Eastern District of New York for this case.

The agreement is the latest between the Justice Department and a drugmaker over allegations of improper marketing. Pharmaceutical companies aren't allowed to market drugs for unapproved uses, but the issue is far from clear cut.

Doctors can prescribe drugs for unapproved uses, and they say these prescriptions play a crucial role in treating patients, especially those with deadly illnesses and few treatment options.

And while drug companies can't market for off-label uses, their sales representatives can distribute copies of scientific journal articles that discuss off-label uses.

Amgen's settlement pales compared to what other big drugmakers have paid as the U.S. government has cracked down on industry tactics in recent years. In July, British drugmaker GlaxoSmithKline PLC said it will pay $3 billion in fines for criminal and civil violations involving 10 drugs as part of the largest health care fraud settlement in U.S. history

In 2009, federal prosecutors hit Pfizer Inc., the world's largest drugmaker, with $2.3 billion in penalties tied to violations of federal drug rules.

The large settlements are smaller than the annual sales top blockbuster drugs can generate, but they generate bad publicity that drugmakers want to avoid, said Dr. Adriane Fugh-Berman, a Georgetown University professor. Fugh-Berman has served as a paid witness in court cases over drug marketing and started the watchdog website pharmedout.org, which details industry tactics.

"I like to think (settlements and fines) have some mitigating effect, but it's hard to gauge," she said.

Amgen shares fell 21 cents to close at $89.29 Tuesday, while the broader markets rose higher.

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Oracle 2Q earnings rise 18 pct to top Street view

SAN FRANCISCO (AP) — Snapping out of a summertime lull, Oracle's latest quarter demonstrated that companies have been splurging on software and other technology as the year comes to a close, despite uncertainty about the economy's prospects.

The results announced Tuesday are an improvement from Oracle's previous quarter, when the business-software maker's revenue dipped slightly from a year earlier.

The most recent quarter spanned September through November. That makes Oracle the first technology bellwether to provide insights into corporate spending since the Nov. 6 re-election of President Barack Obama. It's also the first to report since negotiations to avoid the so-called fiscal cliff began to heat up in Washington.

The solid performance by one of the world's biggest technology suppliers suggests corporate decision makers aren't fretting too much about the economy falling off the cliff. The fiscal cliff refers to the combination of wide-ranging increases in taxes and cuts in government spending that will be automatically triggered Jan. 1 unless the White House and Congress can reach an agreement on how to soften the impact.

"As can see in our numbers, folks wanted to spend their budgets, continue to want to spend their budgets," Safra Catz, Oracle's chief financial officer, said in a conference call with analysts. "We are having an absolutely wonderful December so far."

Forrester Research analyst Andrew Bartels described Oracle's performance as encouraging, but said it's still too early to conclude other major technology vendors catering to big companies have been recording similar late-year gains. "This is good news, but it's not definitive," he said.

Oracle Corp. earned $2.6 billion, or 53 cents per share, in its fiscal second quarter. That's an 18 percent increase from net income of $2.2 billion, or 43 cents per share, a year ago.

If not for charges for past acquisitions and certain other costs, Oracle said it would have earned 64 cents per share. On that basis, Oracle topped the average earnings estimate of 61 cents per share among analysts surveyed by FactSet.

Revenue increased 3 percent from last year to $9.1 billion — about $900 million more than analysts had projected.

In a particularly heartening sign, Oracle said sales of new software licenses and subscriptions to its online services climbed 17 percent from last year to outstrip the most optimistic predictions issued by management three months ago. Bartels said the increase isn't quite as good as it looks because it includes contributions from two online subscription services, RightNow Technologies and Taleo, that Oracle didn't own at the same time last year. Oracle bought RightNow for $1.5 billion in January and acquired Taleo for about $2 billion in April.

The flow of new licenses and subscriptions, which represent about a quarter of Oracle's revenue, is closely tracked by investors because they spawn more revenue in the future from upgrades.

In the current quarter, which ends in February, Oracle expects software licenses and subscriptions to increase in the range of 3 percent to 13 percent from the previous year. The company, based in Redwood Shores, Calif., predicted its adjusted earnings in the current quarter will range from 64 cents to 68 cents per share on revenue ranging from $9.1 billion to $9.5 billion. That would be a 1 percent to 5 percent increase from the prior year.

Analysts are forecasting adjusted net income of 66 cents a share on revenue of $9.44 billion.

Oracle's stock added 52 cents to $33.40 in extended trading after the numbers came out. If that gain holds in Wednesday's regular trading session, it will mark a new 52-week high for the stock.

The specter of higher taxes prompted Oracle to make the unusual decision to bunch the next three quarters of stock dividends into a single payment that will be made before the end of the year. The move, announced earlier this month, is designed to ensure that Oracle CEO Larry Ellison, who owns a 23.5 percent stake in the company, and his fellow shareholders don't get hit with a higher tax bill on dividend income next year. The accelerated payment schedule will distribute about $206 million to Ellison, already one of the world's richest people, and will lower his tax bill by tens of millions, if the rates on dividend income rise next year.

Oracle would have fared even better if it could find a way to sell more computer servers and other hardware, something it has been unsuccessfully trying to do since completing its $7.3 billion acquisition of Sun Microsystems Inc. in 2010. The company's hardware revenue plunged 16 percent from last year.

In Tuesday's conference call, Ellison said some of the erosion in the hardware division has been by design as Oracle weeds out some of the less-profitable equipment. He assured analysts that hardware revenue will start increasing in the final quarter of Oracle's fiscal year — the period spanning from March through May. Sun's Java programming language already has been paying off for the software side of Oracle's business, according to Ellison.

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Facebook users hit 'like,' stores jump into action

NEW YORK (AP) — Facebook  isn't just for goofy pictures and silly chatter. Whether shoppers know it or not, their actions online help dictate what's in stores during this holiday season.

After polling customers on the social media site, Macy's decided to carry denim jeans in bright neon hues rather than pastels. Wal-Mart for the first time decided to let customers vote on which toys they want discounted. And to better plan orders for the decorative flags she sells, a small business owner in Mississippi is running a contest that encourages customers to chime in about how they're decorating their homes this winter.

The impact of social media on a company's bottom line is tough to quantify, with no hard data on how millions of Facebook fans and Twitter followers translate into sales for stores. But during the holiday shopping season, a roughly two-month period when retailers can make up to 40 percent of their annual revenue, stores are uncovering a valuable use for all the seemingly useless online muttering: market research.

The result is that whenever folks press the "like" button to give their seal of approval for a particular company's page or make a comment on how much they like the leather boots they just bought, they're helping everyone from independently-owned small shops to the nation's biggest retailers make decisions about what products to stock up on, what to play up on the sales floor and what promotions to offer online.

For the first time this year, one of Macy's Inc.'s apparel buyers suggested the company solicit feedback on Facebook on which colors it should stock for "Else" brand jeans in the fall ahead of the holiday shopping season. Several weeks later, with about 2,500 "likes" and 750 comments, "Very Vivid" colors in bright blue, orange and red were declared the victor over softer shades such as baby pink and baby blue.

The company, which has more than 9 million "likes" on Facebook, followed up with another poll in July on whether it should carry a "Kensie" brand dress in a bird or floral print. About 4,000 people issued their verdicts within 48 hours, and the department store plans to carry the floral print this February.

Rather than simply using social media to tout promotions and new products, companies are just now realizing the value of making customers feel as though they're part of the decision making process, said Jennifer Kasper, who heads digital media at Macy's. In addition to making customers feel like insiders, she said it helps businesses better tailor their offers as well.

Matt Cronin, a founding partner of Web Liquid Group, a digital marketing agency, agreed that companies are still in the early stages of figuring out how to put their social media profiles to use. Until now, he noted that social media strategies have primarily been about capturing as many followers or fans as possible without really knowing where to go from there.

One hurdle for major retailers is that it's difficult to take the information they learn online and put it to use while the trends are still relevant, said Nicolas Franchet, head of retail e-commerce at Facebook.

That's one of the trickier aspects of Wal-Mart Store Inc.'s new "Toyland Tuesday" contest, which lets fans vote on which of two toys will be discounted on the following Tuesday. Once a winner is declared on Thursday, the retailer acts quickly to inform its 4,000 stores of how to adjust pricing and displays, says Wanda Young, senior director of social media for Wal-Mart, which has more than 25 million likes on Facebook.

Although it's the first time Wal-Mart is letting shoppers have a direct say in what merchandise gets discounted, the retailer is learning to use social media in more discreet ways as well. Last year, Wal-Mart, based in Bentonville, Ark., acquired an analytics company called Kosmix that monitors online chatter to try and predict what products might suddenly become popular.

The unit, now called (at)Walmartlabs, suggested that the retailer give juicers prominent display for the holidays last year, after a movie about an obese man who lost weight on a juice diet started trending online. Wal-Mart declined to give examples of how it used online chatter this holiday season but said it's slowly playing a bigger role in product decisions.

That's critical because companies are realizing shopping behavior is often more influenced by what's happening in pop culture, rather than their own past shopping patterns, said Shernaz Daver, a spokeswoman for (at)Walmartlabs.

"Social media has enabled us to understand intent," she said.

Melinda Vitale Shaw, owner of the two-store MeLinda's Fine Gifts in Picayune, Miss., is using the same concepts as the world's biggest retailer. Since setting up a Facebook page in 2010, she's used it as a sounding board for what to stock in her stores.

In the south, for example, it's common for people to change the decorative flags outside their homes depending on the season or the holiday. To get a better sense of what type of decorative flags might sell well next year, Vitale Shaw recently asked fans to post about the designs they were currently flying, or what they wished they were flying.

She was surprised to see several comments about snowman flags, since it doesn't snow much in the south. Even though Facebook sometimes proves her business instincts wrong, she called the site "a true retailer's friend."

In a more unusual case, the outdoor retailer Gander Mountain is handing the reins over to fans on social media. The chain, based in St. Paul, Minn., is running a promotion that lets customers determine the price of its products.

Every Thursday during the holiday season, customers can push down the price on five selected items by sharing them on Facebook or Twitter. The more shares an item gets, the lower the price goes; discounts start at 10 percent but can go as high as 50 percent. Shoppers can jump in and buy the items at any point, or wait for a lower discount but risk that the store will run out of the items.

"The customer has to decide. Do I buy it at 25 percent off or do I risk that Gander runs out of the jacket?" said Steve Uline, executive vice president of marketing of Gander Mountain, which has more than 500,000 "likes" on Facebook. "It makes it interesting for the consumer."

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Sekjen KAHMI dari Kalangan Politisi?

Munas Korps Alumni Himpunan Mahasiswa Islam (KAHMI) di Riau telah memilih 9 presidium untuk Majelis Nasional KAHMI periode 2012-2017. Mahfud MD terpilih sebagai ketua presidium karena meraih suara terbanyak. Lantas, siapakah yang akan menjadi Sekjen KAHMI? "Munas sudah memilih Mahfud sebagai Ketua Presidium KAHMI. Namun untuk urusan Sekjen, hal itu tidak dipilih oleh peserta Munas," kata Ketua Pelaksana Daerah, Johar Firdaus kepada detikcom, Minggu (2/12/2012). Menurut Johar, hasil Munas menyepakati bahwa posisi Sekjen akan ditentukan sendiri oleh 9 presidium terpilih, dan penentuan itu akan dilakukan melalui rapat internal para presidium. "Jadi untuk Sekjen bukan peserta Munas yang memilihnya. Melainkan 9 orang presidium yang akan menentukan posisi tersebut," kata Johar. Ketika disinggung siapa yang akan mengisi posisi Sekjen dari 9 presidium, Johar mengaku belum mengetahui. "Saya sendiri belum dapat bocoran. Tapi paling tidak, saat memiilih ketua umum presidium ada semangat bersama agar KAHMI tidak dipimpin seorang politikus. Nah, kalau melihat kacamata yang sama, ya mungkin bisa jadi Sekjen juga dari kalangan birokrasi, akademi dan tentunya bukan politisi," kata Johar. Berdasarkan Munas tersebut, terpilih 9 orang presidium yang menjadi anggota Majelis Nasional KAHMI. Berikut hasil pemilihan dalam Munas KAHMI ke-IX: 1. Mahfud MD (347 suara) 2. Viva Yoga Mauladi (334 suara) 3. Anas Urbaningrum (320 suara) 4. Muhammad Marwan (313 suara) 5. Anis Baswedan (308 suara) 6. Bambang Soesatyo (260 suara) 7. Dr Hj Reni Marlina (192 suara) 8. Ms Kaban (156 suara) 9. Taufiq Hidayat (153 suara) Dari 9 presidium terpilih tersebut, hanya tiga yang berlatar belakang akademisi dan birokrat, yaitu Mahfud MD (MK), Muhammad Marwan (Birokrat), dan Anis Baswedan (Akademisi). Sementara 6 presidium lainnya berlatar belakang politisi. Munas KAHMI ke-IX digelar sejak Jumat (30/11) hingga Minggu (2/12) dini hari di Kabupaten Kampar, Riau. Selain dihadiri 1.000 anggota KAHMI dari seluruh Indonesia, Munas ini juga dihadiri Jusuf Kalla.

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Polda Metro Jaya Turunkan Berat Badan Polisi Gendut

Polda Metro Jaya akan melakukan program penurunan berat badan bagi polisi bertubuh tambun di Jakarta. Progam ini akan dilakukan secara bertahap untuk seluruh Polsek dan Polres yang ada. "Kita lakukan secara bertahap, kita lihat juga kondisinya seperti apa. Apa di wilayahnya banyak kasus atau unjuk rasa ini jadi pertimbangan," kata Kabid Humas Polda Metro Jaya Kombes Rikwanto kepada detikcom, Minggu (2/12/2012). Rikwanto mengatakan, langkah ini merupakan permintaan Kapolda Metro Jaya Irjen Putut Eko Bayuseno yang ingin melihat anggotanya memiliki performa yang lebih baik. "Kapolda memang mencanangkan ini. Hal ini diambil agar di lapangan lebih simpatik dan salah satu wujudnya adalah dengan postur yang ideal," katanya. Rikwanto mengatakan, program penurunan berat badan ini dilakukan dengan cara lari dan senam seminggu dua kali. Selanjutnya penurunan berat badan polisi-polisi ini juga akan dicek. "Nanti ada yang mengecek penurunan berat badannya seperti apa," katanya. Rikwanto mengatakan, penurunan berat badan ini dilakukan agar pada petugas memiliki kinerja yang lebih baik. Selain itu petugas juga lebih lincah dan gampang jika digerakkan. "Kalau gedut bagaimana, jalan saja susah," katanya. Sebelumnya, 118 polisi gendut di wilayah Jakarta Timur harus menjalani program penurunan berat badan. Program menurunkan berat badan ini dilakukan dengan kegiatan senam di TMII. Para petugas yang memiliki kelebihan berat badan ini menjalani senam dan juga joging untuk menurunkan berat badannya. Polres Tangerang juga sudah melakukan langkah pengurusan anggotanya yang kegendutan. Polres Tangerang pernah menggelar 'razia' polisi bertubuh tambun. Polisi gendut dan berperut buncit diharuskan berolahraga 4 kali dalam seminggu.

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