Microsoft profit tops Wall St view on Vista sales

Microsoft Corp. (MSFT.O: Quote, Profile , Research) posted a 65 percent rise in quarterly profit on Thursday, topping Wall Street estimates due to better-than-expected demand for its new Windows Vista operating system.

Shares of Microsoft rose 5 percent after the announcement, in which the world's biggest software company also forecast 2008 profit at the mid-point of a range of analyst estimates.

"The strength of Vista is really driving this," said Kim Caughey, analyst at Fort Pitt Capital Group. She added that the company had set "manageable expectations for the full year 2008, which generally allows them some headroom."

Microsoft posted a net profit of $4.93 billion, or 50 cents per diluted share, in its fiscal third quarter ended March 31 versus a profit of $2.98 billion, or 29 cents per share, in the year-ago period.

Excluding tax benefits and a legal charge, Microsoft earned 49 cents per share, beating the average analyst forecast of 46 cents, according to Reuters Estimates.

Revenue rose 32 percent to $14.4 billion. Analysts, on average, had forecast revenue of $13.89 billion, with estimates ranging from $13.73 billion to $14.09 billion, according to Reuters Estimates.

Microsoft deferred about $1.7 billion in revenue from its second quarter to its third quarter to account for upgrade coupons given to customers prior to the January launch of Vista and Office 2007.

Microsoft expects the latest versions of its two flagship products to underpin profit growth over the next few years. Those two product lines alone account for more than half of Microsoft's total revenue and a majority of its profits.

Chief Financial Officer Chris Liddell said consumer sales of Vista surpassed the company's own expectations by $300 million to $400 million.

"There is very good acceptance from a launch perspective for the product. It's early days, but we're encouraged by it," Liddell said in an interview with Reuters.

FORECAST ALLAYS CONCERNS

The company's 2008 business year, which starts in July, will be the first full year of earnings to benefit from consumers buying new computers loaded with Vista and Office 2007, or companies upgrading computer systems.

Microsoft forecast diluted earnings per share of between $1.68 and $1.72 for the coming business year, on revenue of $56.5 billion to $57.5 billion.

Analysts had forecast earnings of $1.69 a share on sales of $56.34 billion, with sales estimates ranging from $55.3 billion to $59.6 billion, according to Reuters Estimates

"There was a lot of concern in the marketplace over Microsoft's 2008 outlook. We think this forecast should allay these concerns," said Andy Miedler, technology analyst at Edward Jones.

Microsoft Chief Executive Steve Ballmer gave investors a reason to pause in February when he said that some analysts' Vista sales estimates in fiscal 2008 were "overly aggressive."

For the current quarter, Microsoft said it expects to earn between 37 cents and 39 cents a share on revenue of $13.1 billion to $13.4 billion. Analysts, on average, were expecting earnings of 41 cents a share and revenue of $13.31 billion.

Liddell said the shortfall in its fourth-quarter forecasts was due to marketing expenses shifted to the current period, but emphasized that it will meet the company's full-year estimates for expenses.

Microsoft shares rose to $30.48 in extended trade. In regular Nasdaq trade, the stock closed up 11 cents at $29.10.

As of Thursday's close, the stock was down 3 percent since the start of 2007, while the S&P 500 had risen 5 percent. (Additional reporting by Sue Zeidler, Gina Keating, Nichola Groom and Lisa Baertlein in Los Angeles and Kenneth Li in New York)

Justices Raise Doubts on Campaign Finance

The Supreme Court put defenders of the McCain-Feingold campaign finance law on the defensive on Wednesday in a spirited argument that suggested the court could soon open a significant loophole in the measure.

At issue is a major provision of the five-year-old law that bars corporations and labor unions from paying for advertisements that mention the name of a candidate for federal office and that are broadcast 60 days before an election or 30 days before a primary. By a 5-to-4 vote in December 2003, the court held that the provision, on its face, passed First Amendment muster.

But a new majority may view more expansively the Constitution’s protection of political messages as free speech, and invite a flood of advertising paid for by corporations and unions as the 2008 elections move into high gear.

The argument on Wednesday was over whether, despite the 2003 blanket endorsement, the law would be constitutional if applied to three specific ads that an anti-abortion group sought to broadcast before the 2004 Senate election in Wisconsin.

The ads, sponsored by Wisconsin Right to Life Inc., mentioned the state’s two senators, both Democrats: Russell D. Feingold, a co-sponsor of the McCain-Feingold law, who was up for re-election, and Herb Kohl, who was not. The advertisements’ focus was a Democratic-led filibuster of some of President Bush’s judicial nominees. Viewers were urged to “contact Senators Feingold and Kohl and tell them to oppose the filibuster.” The ads provided no contact information, instead directing viewers to a Web site that contained explicit criticism of Mr. Feingold.

A special three-judge Federal District Court here ruled that because the text and images of the ads did not show that they were “intended to influence the voters’ decisions,” they were “genuine issue ads” that the government could not keep off the air.

Solicitor General Paul D. Clement, arguing on behalf of the Federal Election Commission, told the justices that if these ads qualified for an exception to the law’s ban on issue ads that mention a candidate for federal office right before an election, so would many or most others, leaving the statute “wide open.”

Describing the ads as typical of those the court had reviewed when it rejected the initial challenge to the law, Mr. Clement said that a finding that these could not be regulated “just seems inconsistent” with the earlier ruling.

Chief Justice John G. Roberts Jr. turned the solicitor general’s argument against him. It was Mr. Clement who was being inconsistent, the chief justice said, noting that in an earlier phase of this case a year ago, the Supreme Court ruled that the provision could be challenged “as applied” on a case-by-case basis.

If the Roberts court were writing on a clean slate, a broad declaration of unconstitutionality might well be the result. But the court’s 2003 decision in McConnell v. Federal Election Commission, upholding the law, is so recent as to make such a bold step unlikely. Instead, many election law experts believe the fate of the statute may depend on how broad an exception the court carves out through its handling of this or future “as applied” challenges.

The four dissenters from the 2003 decision were Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas, all of whom are still on the court, and Chief Justice William H. Rehnquist. Chief Justice Roberts appeared fully prepared to step into his predecessor’s shoes. So all eyes were on the court’s other newcomer, Justice Samuel A. Alito Jr., who as the successor to Justice Sandra Day O’Connor, a co-author of the 2003 decision, probably holds the balance.

For the first half-hour of the argument, Justice Alito said nothing, leaning forward in his seat at the end of the bench with an intense expression. He finally intervened during the argument by Seth P. Waxman, who was defending the law on behalf of a group of its Congressional supporters including Senator John McCain, the Arizona Republican who is the other lead sponsor.

What would happen, Justice Alito asked Mr. Waxman, if a group had been running an ad about an issue, “and let’s say a particular candidate’s position on the issue is very well known to people who pay attention to public affairs.” Suppose the blackout period established by the law was approaching — 30 days before a primary or 60 days before a general election — “and an important vote is coming up in Congress on that very issue.” Could the group be prohibited from continuing to broadcast the ad?

That would depend on the context, Mr. Waxman replied.

Justice Alito did not appear satisfied. “What do you make of the fact that there are so many groups that say this is really impractical?” he asked. His reference was to the impressive array of ideological strange-bedfellows that filed briefs in support of Wisconsin Right to Life’s challenge. These range from the American Civil Liberties Union to the National Rifle Association to the United States Chamber of Commerce to the A.F.L.-C.I.O.

“I love it!” Mr. Waxman replied energetically, as if he had been waiting for just such a question. He said that although these many groups opposed the law, they were living with it and contenting themselves with running advertisements that advocated their positions on issues without mentioning candidates. The only two as-applied challenges, he noted, have both been brought by Wisconsin Right to Life’s lawyer, James Bopp Jr., who also has another case pending before the court.

Chief Justice Roberts was unimpressed by this line of argument. “I think it’s an important part of their exercise of First Amendment rights to petition their senators and congressmen and to urge others to, as in these ads, contact your senators, contact your congressmen,” he said, adding, “Just because the A.C.L.U. doesn’t do that doesn’t seem particularly pertinent to me.”

The law’s most vigorous defense from the bench came from Justices Stephen G. Breyer and David H. Souter. “If we agree with you in this case, goodbye McCain-Feingold,” Justice Breyer told Mr. Bopp. His point was that there is an inextricable link between the law’s two major provisions: the advertising restriction and the ban on the receipt and expenditure by political parties of unregulated “soft money” from corporations and unions. If corporations can underwrite television ads, which are “the single best way to get somebody defeated or elected,” Justice Breyer said, then “forget the rule that corporations can’t contribute.”

The statute permits corporations and unions to pay for ads from segregated funds called political action committees, whose donors’ names are disclosed and whose contributions and spending are regulated, rather than directly from their treasuries. Mr. Bopp argued that this restriction was unduly burdensome.

The significance of the eventual ruling in this case, Federal Election Commission v. Wisconsin Right to Life Inc., No. 06-969, may depend on what standard the court sets for distinguishing genuine issue ads from the “electioneering communications” that the law seeks to regulate.

The district court’s decision said that judges should restrict themselves to examining the “four corners” of the ad itself: if its language does not exhort viewers to take action, it passes the test and must be permitted even if the message, seen in a broader context, is perfectly clear.

Mr. Bopp said this restriction was essential so that an ad’s validity would be “reasonably ascertainable” in advance and not depend “upon the varied understandings of the listener.” The only test is, “What do the words say?” he said.

The law’s supporters argue that many “sham” issue ads will escape regulation unless courts can evaluate them in the context in which voters will understand them. “The question is, What do the words mean?” Justice Souter told Mr. Bopp, adding, “It is impossible to know what the words mean without knowing the context in which they are spoken.”

Sales of existing homes plunge 8.4% in March

Sales of existing homes plunged at the fastest pace in 18 years in March, falling to the lowest sales pace in nearly four years, the National Association of Realtors reported Tuesday.
Sales of existing homes dropped 8.4% in March to a seasonally adjusted annual rate of 6.12 million, the lowest since June 2004. It was the biggest percentage decline since January 1989, at the start of a severe housing recession.

Economists said the report confirmed that the housing market is still weakening, though the sharp drop in March was likely overstated because of weather. Sales had risen for four of the previous five months before March's decline.



"Unusual seasonal patterns are catching up with the existing-home sales market, revealing the fundamental weakness that persists in housing activity," wrote Celia Chen, an economist for Moody's Economy.com.
"The U.S. housing correction has yet to reach bottom," wrote Sal Guatieri, an economist for BMO Nesbitt Burns. "The key risk remains that further declines in home prices will eventually undermine consumer spending, tipping the economy downwards."
The report was much weaker than expected. Economists surveyed by MarketWatch were expecting sales to fall to 6.45 million. See Economic Calendar.
The data helped push down stocks in early trades. See Market Snapshot.
The details of the report "paint a negative picture on the housing market, but not much different than should have been expected," wrote Tony Crescenzi, chief bond market strategist for Miller Tabak & Co. "In my eyes, nothing new was learned about the housing market today relative to lousy sentiment that already exists."
The report caught the eye of federal lawmakers, who've been debating what they should do, if anything, about the collapse of credit and housing markets. "With a brewing storm of subprime mortgage foreclosures on the horizon, the quickest way to instill more confidence in the overall housing market is to curb the wave of foreclosures," said Sen. Charles, Schumer, D-N.Y., chairman of the congressional Joint Economic Committee.

Median prices
The median price of an existing home fell 0.3% year-over-year to $217,000 in March. Prices have been lower year-over-year for eight straight months, the longest negative stretch in the 39-year history of the report.

One positive sign in the release: The inventory of unsold homes on the market fell 1.6% to 3.75 million, representing a 7.3-month supply, just below the high of 7.4 months reached in November. The inventory figures are not seasonally adjusted.
Sales of condos were unchanged at 800,000 while sales of single-family homes dropped 9.5% to 5.32 million, also the lowest since June 2003 and the biggest decline since 1989. Sales of single-family homes are down 11.9% in the past year.
The median sales price of a single-family home is down 0.9% in the past year.
In a separate report, the S&P/Case-Shiller price index showed home prices in 10 major cities are down 1.5% in the past year, the biggest drop since late 1993. For 20 major cities, prices are down 1% in the past year. See full story.
Regional declines
Existing-home sales fell in all four regions in March. Sales fell 10.9% in the Midwest, 9.1% in the West, 8.2% in the South and 6.2% in the Northeast.
"This number reflects subprime lending" as well as the cold weather in February, said David Lereah, chief economist for the real estate group.
Existing-home sales are counted when they close. Cold weather in February kept buyers away and reduced the number of closings in March. The weather had been unseasonably warm earlier in the winter, boosting sales.
Lereah said he expects sluggish sales in the second quarter, but he thought sales would pick up from March's low. "We're still looking for existing-home sales to gradually improve during the last half of 2007," he said.
In a separate report, the Conference Board said that consumer confidence fell in April to its lowest level since last August. It was the third straight drop in confidence. Consumers' plans to buy homes fell to a 10-year low

AstraZeneca in $16bn deal for MedImmune

AstraZeneca, the Anglo-Swedish pharmaceuticals group, is to pay $15.6bn in cash to acquire MedImmune, the US biotechnology business, in a fresh consolidation of the drugs sector.

The deal, which follows a competitive auction, marks the latest bid by AstraZeneca to strengthen its pipeline of experimental drugs, expanding biological products and extending into vaccines for the first time.

The transaction, at 12 times MedImmune's annual sales and representing a 21 per cent premium on its closing share price last Friday, depressed AstraZeneca's share price in London trading by more than 4 per cent to £28.32.

It came as AstraZeneca brought forward its first-quarter results, showing earnings per share up 14 per cent to 89 cents, and formally discontinued its investment in AGI-1067, an experimental late-stage cardiovascular drug. David Brennan, chief executive, said that MedImmune's "compelling" fit with his company justified the price paid, and added: "We are satisfied with the people and the products. It makes good sense."

He said the deal built on AstraZeneca's £702m acquisition last year of CAT, reinforcing the range of technologies and products in development by providing MedImmune's manufacturing and marketing capacity for biological products.

MedImmune reported pre-tax profits last year of $75m on sales of $1.3bn, with most income coming from Synagis, its monoclonal antibody to treat a lower respiratory tract infection. It is set to launch for the coming winter a refrigerated form of FluMist, a flu vaccine that is inhaled.

The sale followed growing criticism in recent months by some of the US company's shareholders, led by billionaire Carl Icahn and Matrix Asset Management, who lobbied for a sale. Merck of the US, which has a long-standing licensing agreement with MedImmune, is believed to have opened talks about buying the group this year, triggering a series of bids from rival pharmaceuticals companies.

Jonathan Symonds, AstraZeneca's chief financial officer, said the deal would cut the scope for other such large-scale deals in the short term and might diminish significant share buy-backs after this year's pledged $4bn.

Texas Instruments profit, outlook beat forecasts

Chipmaker Texas Instruments Inc. posted a smaller-than-expected fall in quarterly profit and said a broad recovery would help it beat expectations in the second quarter, sending its shares up 9 percent on Monday.

The world's biggest maker of chips for mobile phones said it saw a pick-up in demand from third-generation advanced phones toward the end of the first quarter and that demand for high-performance analog chips was at the high end of its expectations.

TI's outlook was based on improvement in orders across all products, Chief Financial Officer Kevin March told Reuters.

The company said it expected second-quarter earnings and revenue to rise as orders improve, because it has largely worked through an inventory correction that began last year.

Doug Freedman, an analyst at American Technology Research, said the strong guidance indicated that business had picked up materially toward the end of the first quarter.

"Clearly things turned around for the company. The commentary that they saw the end of the inventory correction is an impressive one," said Freedman.

TI, which makes chips for everything from calculators to televisions, said its first-quarter profit fell to $516 million, or 35 cents per diluted share, from $585 million, or 36 cents, in the year-ago quarter.

The result beat TI's own forecast for 29 to 33 cents per share and topped the average forecast from analysts of 31 cents, according to Reuters Estimates.

First-quarter revenue fell to $3.19 billion from $3.33 billion a year ago but was slightly above the $3.15 billion expected by Wall Street, according to Reuters Estimates.

The company forecast second-quarter earnings per share of 39 to 45 cents on revenue of $3.32 billion to $3.6 billion. That compared with forecasts of 37 cents on revenue of $3.36 billion, according to Reuters Estimates.

"We have our inventory now staged very well to handle a resumption of growth in the second quarter," March said.

TI's shares have risen about 12 percent since January as investors have bet on a recovery after the company posted disappointing results in the previous two quarters due to falling inventories and the skewing of growth toward low-priced phones.

The stock rose to $35.34 in late trading after closing at $32.41 on the New York Stock Exchange.

Medicare fund to run dry by 2019: trustees

The fiscal outlook for the Medicare and Social Security programs showed little change Monday, with trustees predicting in their annual report that key trust funds will run dry a year later than previously projected.

The trustees now project that Medicare's hospital-insurance trust fund will run dry by 2019 without changes in the popular entitlement program. Preventing depletion of the fund would require either a sharp rise in payroll taxes, or a cut in benefits covered by the program including inpatient hospital care, care in skilled-nursing facilities, hospice care and some home health care.
The Social Security system is projected to exhaust its trust fund in 2041 without changes. At that point, existing law would require the entitlement program to slash benefits across the board.
The Medicare hospital-insurance trust fund is fed through a 2.9% payroll tax split between employers and employees. A 12.4% payroll tax on income up to $97,500 -- also split between employers and employees -- fills the Social Security trust fund.
The Social Security trust fund is projected to continue running annual surpluses through 2017, unchanged from last year's projections.
The report underscores long-running concerns about the fiscal obligations presented by the popular entitlement programs, given the impending retirement of the baby-boom generation and rising health-care costs.
"Reforms to both Medicare and Social Security are urgently needed. The serious concerns raised by the trustees reports demand the attention of America's policy-makers and the public," said Treasury Secretary Henry Paulson, who serves as managing trustee of the programs.
The report also triggered for the first time a "Medicare funding warning" that will require President Bush to submit a proposal next year to cut costs. Congress must consider the proposal, but isn't bound to pass a new law.
Administration officials said the warning underscored a previous call by Bush to automatically cut payments to Medicare providers if the threshold were crossed.
"If Congress were to embrace the president's budget, we could not only eliminate this funding warning, [but] we could also extend the life of the hospital-insurance trust fund four years," said Health and Human Services Secretary Michael Leavitt, who is also a trustee.
Democrats and some advocacy groups for the elderly have criticized the funding warning, which is required as part of the 2003 law that created the Medicare prescription-drug program.
The threshold "is nothing less than another way to choke off funds to seniors who need help," said Sen. Charles Schumer, D-N.Y. "If there has to be a choice between preserving unnecessary tax cuts for the super-rich or keeping good on our promise to 42 million Medicare beneficiaries, I'd choose the latter every time."
The report comes as prospects for a major overhaul of the Social Security program, which Bush had once marked as a top priority of his second term, appear dim.
The president, who had made the overhaul his top domestic priority in the wake of his 2004 re-election, had outlined a plan in 2005 that would let workers born after 1950 divert a chunk of their Social Security payroll taxes into private investment accounts, while cutting future guaranteed benefits for all but poor beneficiaries.
Congressional Democrats were virtually united in opposing the approach, while Republicans, who then controlled both chambers of Congress, showed little enthusiasm.
Paulson has engaged in talks with top lawmakers in the Democratic-controlled Congress, but the efforts have generated few signs of progress.
In a news conference, the Treasury secretary acknowledged that little progress has yet been made on the political front.
"I'm getting tired of playing solitaire," Paulson said.
Democrats say the administration has been too reluctant to give up its call for diverting payroll taxes into private accounts.

Delta Air Lines Says Net Loss Narrows to $130 Million

Delta Air Lines Inc. said its first-quarter loss shrank by 93 percent as an increase in international flights helped the third-largest U.S. carrier prepare to exit bankruptcy this month.

The $130 million loss compared with a $2 billion deficit a year earlier, Delta said in a statement that didn't give per- share results. Excluding claims from Delta's regional partners and other reorganization costs, the loss was $6 million.

Delta is betting that adding higher-profit overseas flying will ensure a successful future after leaving court supervision. The Atlanta-based carrier is moving wide-body jets to trans- Atlantic and Latin American routes from Florida and other U.S. vacation markets.

``International vs. domestic is a bit like city miles vs. highway miles when you drive your car,'' said Bryson Monteleone at aviation consulting firm Morten Beyer Agnew Inc. in Arlington, Virginia. ``There are better economics when you are running for long distances.''

Sales rose 11 percent to $4.1 billion, and operating profit was $155 million, Delta said.

Delta offered 22 percent more seats on its trans-Atlantic flights and 32 percent more on flights to Latin America compared with a year earlier, while paring U.S. capacity by 5.4 percent. Delta expects overseas flights to make up 40 percent of its capacity within a few years, up from 31 percent now and double the level when it filed for bankruptcy in September 2005.

More Revenue, Lower Costs

Delta said it earned 10.6 cents in passenger revenue for each seat flown a mile, a gain of 7.1 percent. The airline's operating cost per mile declined 6.9 percent, with labor costs declining by more than a fifth.

Today's earnings announcement likely will be the last in bankruptcy for Delta, which has a hearing in two days to confirm its reorganization plan and expects to leave court protection April 30. The airline has shed $3 billion in annual costs during 19 months in Chapter 11.

The carrier was the first in the U.S. to report a loss for the quarter, after AMR Corp.'s American Airlines, Southwest Airlines Co. and Continental Airlines Inc. each posted profits last week.

Analysts expect four of the eight biggest carriers to report first-quarter losses, excluding special gains and costs, and push the industry to a collective first-quarter loss after winter storms forced cancellation of thousands of flights.

JetBlue Airways Corp. and United Airlines parent UAL Corp. may say they had losses when they announce results tomorrow and on April 25, respectively, according to analyst estimates compiled by Bloomberg. Northwest Airlines Corp., which expects to exit bankruptcy in June, also may post a loss, analyst Ray Neidl of Calyon Securities USA Inc. estimated.

Domestic Demand

Domestic demand isn't slowing, Delta said, drawing a contrast with the results reported last week by AMR and Continental.

Passenger revenue for each seat flown a mile on domestic flights increased 6.3 percent, Delta said, compared with a 0.7 percent decline at Continental and a 1 percent gain at AMR's American.

Delta is benefiting from a shrinking U.S. network and economic growth around its Atlanta and Salt Lake City hubs, Chief Operating Officer James Whitehurst told reporters on a conference call.

Full-Year Forecast

On March 27, Delta forecast net income of $456 million this year, following $10 billion of losses over the past two years. Pretax income will increase to $1.5 billion in 2008 and to almost $2 billion by 2010, according to the airline's plan of reorganization.

The carrier forecast an operating margin of 11 percent to 13 percent in the second quarter, which would be the highest among U.S. carriers with broad networks, Whitehurst said in an interview last week.

Delta expects to be the industry's most profitable carrier because its costs are the lowest of the large U.S. airlines, it is making more efficient use of its 440 jets, and it is offering more overseas flights, Whitehurst said.

Heathrow Service

Whitehurst told investors and analysts on a conference call today that Delta is optimistic about reaching an agreement to start service in March between the U.S. and London's Heathrow Airport, which accounts for 40 percent of trans-Atlantic business travel.

Delta is negotiating with its European partner airlines Air France and KLM Royal Dutch Airlines NV and other carriers for Heathrow access after the European Union last month approved an ``open skies'' agreement to boost trans-Atlantic competition.

``I don't want to say it is a formality, but we feel very confident we will get the slots we need,'' Whitehurst said. Delta would like to have three to six Heathrow slots, he said.

Monteleone, the aviation consultant, said Delta's projections don't forecast any potential upheaval in global air travel, which is historically sensitive to terrorism and health concerns.

``International traffic tends to be vulnerable because who knows what locust are coming down the path,'' he said.

Whitehurst said Delta's lower costs would shield the carrier if economic growth cools, damping air travel.

Most of Delta's $124 million in reorganization charges last quarter came from bankruptcy claims granted to its commuter affiliates Mesa Air Group Inc. and Republic Airways Holdings Inc., Delta said.

The $155 million operating profit compares with an operating loss of $485 million a year earlier. Fuel costs, the biggest expense, declined 1 percent.

Delta shares declined 2.5 cents to 18 cents at 4 p.m. New York time in over-the-counter trading. The company plans to cancel the stock when it leaves bankruptcy.

The airline's 8.3 percent note due in 2029 fell 1.7 cents to 60.1 cents on the dollar, according to Trace, the NASD's bond-pricing service.

Tribune announces 250 job cuts in Chicago and Los Angeles

Tribune Co. executives announced a total of about 250 job cuts in Chicago and Los Angeles on Monday as the Chicago-based media conglomerate continues to struggle with declining advertising and circulation revenues.

The Chicago Tribune Media Group will eliminate 100 jobs through a combination of buyouts and layoffs and the Los Angeles Times will cut between 100 and 150 positions using the same methods.


In both cases, executives said they would try to first accomplish their goals through buyouts that would give qualified employees one week of salary and benefits for every six-month period they have worked for the company.

Layoffs would follow to the extent they are needed. The Los Angeles Times will also consider letting employees switch to a four-day workweek for 80 percent of their pay and limited benefits.

Noting that the Chicago Tribune group's first-quarter revenue dropped 4 percent from a year ago, Scott Smith, president of Tribune Publishing and publisher of the Chicago Tribune, said in a memo to employees that full-year revenue will likely come in below last year's. Then he gave voice to a bind the entire industry finds itself in: "Therefore we need to achieve additional expense savings at the same time we focus on revenue growth," he said.

Doing more with less has become a fact of life in the newspaper industry. And it has taken on special urgency at Tribune Co. since earlier this month, when the company agreed to a complex deal with Chicago billionaire Sam Zell to take Tribune private through an employee stock ownership plan.

Smith sought to relieve anxiety about the deal, which will add $8.4 billion in new debt to the $5 billion already weighing down the company's balance sheet, by starting his memo with assurances that "current retirement benefits are protected and secure and eligible employees will have substantial future upside potential through the new ESOP."

Los Angeles Times Publisher David Hiller got right to the point. His memo began: "We're announcing today a series of actions…that will eliminate 100 and 150 jobs at the Los Angeles Times."

Hiller said that revenue in Los Angeles also fell 4 percent in the first quarter but that cash flow fell 13 percent, slightly worse than the company as a whole. Online revenue, he said, was growing at about 20 percent, "but the growth in new media is not yet big enough to offset the decline on the print side of the business."

Hiller and Times Editor James O'Shea had been publisher and managing editor respectively of the Chicago Tribune until last fall, when they replaced former Times Publisher Jeffrey Johnson and Editor Dean Baquet. Johnson and Baquet had fought back against further job cuts and were given folk-hero treatment in the press for standing up to the cost cutting that has been sweeping through the industry for several years as readers and advertisers defect to the Internet.

O'Shea, who made a point of saying he would fight to keep jobs at the Times, said in a memo to the staff of the paper, "I know this is not a happy day for people in the newsroom, including me."

"In a perfect world," O'Shea wrote, "I would prefer that every employee stay here. Unfortunately we don't live in a perfect world."

O'Shea said he is encouraged that Zell has said he "believes in the value of what we do" and that newspapers still represent a good business. "He is someone who can peer through clouds of doubt and see a different and better future. I welcome that kind of thinking and spirit," O'Shea wrote.

He also made no secret of his frustration with having to cut jobs in Los Angeles while executives in Chicago get bonuses for selling the company.

"A number of you have asked me how we could cut jobs to save millions of dollars at a time when a group of unnamed executives will reap bonuses and stock grants worth millions when the change of ownership is complete," O'Shea wrote. "I cannot - and will not - defend any such bonuses. Frankly, I understand why you are angry about these plans."

The Chicago Tribune published a long list of positions eligible for the buyouts. Those who are deemed eligible will receive one week of "separation pay" for ever six months of service, with a minimum of four weeks and a maximum of 52. Benefits will continue as long as the separation pay, with a minimum of three months for health care coverage. Employees will also be given outplacement assistance.

The package at the Los Angeles Times will be essentially the same but the unit will also offer employees a voluntary four-day work week at 80 percent pay.

O'Shea tried to end his memo on an upbeat note, challenging his staff to work through a very tought time. "Don' t let the doomsayers convince you otherwise," he said. "We have a future; it is out there for us to claim."

mdoneal@tribune.com

Google tops new list of world's most valuable brands

Google Inc. has knocked Microsoft Corp. from its perch as the world's top-ranked brand, according to findings released on Monday.

The rankings, compiled by market research firm Millward Brown, also put Google ahead of well-established brands like General Electric Co., No. 2; Coca-Cola Co., No. 4; Wal-Mart Stores, No. 7; and IBM, No. 9.

Some key factors seen this year in building brand recognition ranged from corporate responsibility to serving customers in emerging markets like Brazil and India, according to the study.

The top-ranked brand from a non-U.S.-based company was China Mobile, which dropped a spot but still came in at No. 5.

The rankings were based on publicly available financial data along with primary research, including interviews with a million consumers worldwide, Millward Brown said.

For Google, which ranked No. 7 a year ago, the jump to the top underscores how quickly the Web search leader has become an everyday name. The company uses relatively little advertising, instead relying on word-of-mouth promotion.

By contrast, Microsoft's slide down to third place from first comes even as the software company has been rolling out its new Windows Vista operating system with a massive global marketing blitz.

Eileen Campbell, global chief executive of Millward Brown, said the rankings showed "a blend of good business leadership, responsible financial management and powerful marketing ... can be leveraged to create and grow corporate wealth."

Some of the other big movers on the list included Apple Inc.. which rose 13 spots to No. 16 and Starbucks Corp., which rose 13 spots to No. 35. Those losing ground in the brand rankings included Intel Corp., Home Depot Inc. and Dell Inc.

Millward Brown is a unit of WPP Group and the findings were published in cooperation with the Financial Times.

UPDATE 2-U.S. trustees warn about rising Medicare costs

U.S. administration officials on Monday issued a dire warning about the rising costs of Medicare and Social Security, saying the two popular programs for elderly are rapidly driving up government spending and are in urgent need of change.

"Without change, rising costs will drive government spending to unprecedented levels, consume nearly all projected federal revenues and threaten America's future prosperity," Treasury Secretary Henry Paulson said as he released the annual trustees reports on the finances of the health and retirement programs.

The reports said the Medicare Hospital Insurance trust fund will exhaust its assets in 2019 instead of the 2018 date forecast last year. The change was due to bigger payroll tax collections, the report said. The Social Security trust fund also extended its exhaustion date by a year to 2041, but that was due primarily to a technical change in the calculations.

The Medicare report raised a "funding warning" that is meant to trigger congressional debate over trimming government spending on the health care program, which faces huge strains from rapidly rising costs and the aging baby boom generation.

U.S. Labor Secretary Elaine Chao, one of the trustees, said the warning will force lawmakers next year to debate reform of the health care program for the elderly.

"Under the law, the administration must propose and Congress must consider reform legislation next year," Chao said at a news conference.

It is unclear whether Congress will consider administration proposals to cut Medicare spending in a presidential election year when Democrats hope to capture the White House while solidifying their control over Congress.

Administration efforts to overhaul Social Security to create individual investment accounts failed and Paulson expressed frustration with a lack of progress even though both Democrats and Republicans believe reform is needed.

"There was a time when I was more optimistic than I am today. ... I'm getting a little bit tired of playing solitaire," Paulson said.

House Ways and Means Committee Chairman Charles Rangel, a New York Democrat, said lawmakers would do what was necessary to restore the financial health of the programs but the main question is whether Republicans and Democrats will be able to overcome deep divisions to produce a bipartisan plan.

"This report underscores the importance of rebuilding trust between the parties, so that we may work together to protect the guaranteed benefits provided by Social Security and Medicare," Rangel said.

The trustees projected Social Security outlays to outstrip tax income in 2017, the same date as forecast last year.

President George W. Bush hailed the results of the new Medicare prescription drug program, which relies mostly on private insurers to deliver the benefit to seniors. The cost of the new program were significantly lower than first estimated and Bush said that should serve as an example during the reform debate that "competition works, competition can lower price, and improve the quality" for beneficiaries.

But the report said the long range outlook is less rosy.

"In the long range, the outlay projections return to, and eventually exceed, the prior projected level," the report said.

Texas Instruments says wireless, analog helped Q1

Improved demand for chips used in advanced phones and for high-performance analog chips boosted revenue and profits at Texas Instruments Inc (TXN.N: Quote, Profile , Research) in the first quarter, Chief Financial Officer Kevin March said.

He said TI's projection for second quarter revenue and earnings growth was based on an uptick in demand across its product range.

"We saw orders begin to increase across all our products," March said in an interview with Reuters.

He said the company's semiconductor book-to-bill ratio increase to 0.99 from 0.89 in the fourth quarter, an indicator of improving orders.

Unexpected LaSalle sale seals ABN deal with Barclays

Barclays yesterday cemented its £95 billion merger with ABN Amro after the Dutch bank wrongfooted the rival Royal Bank of Scotland consortium by pulling off a spectacular side deal.

Barclays and ABN, announcing the long-awaited terms of their 52/48 agreed merger, stunned the City by revealing that a jewel in ABN’s crown, the Chicago-based LaSalle bank, had already provisionally been sold for a jaw-dropping $21 billion (£10.5 billion).

The sale of LaSalle to Bank of America enables a combined Barclays/ABN to promise a $12 billion share buyback and puts pressure on RBS, which regards LaSalle as the main prize.

RBS and its consortium partners, Banco Santander of Spain and Fortis of Belgium, responded by cancelling a planned meeting with ABN, saying that they needed to understand the circumstances under which the LaSalle deal could be halted. The LaSalle deal, which was negotiated in the space of a few days, does not require approval from ABN shareholders. Alternative bidders have just 12 days to top the BoA offer, which is regarded as a knockout price at 21 times after-tax profits.

Barclays and ABN hailed their agreed merger, which would create the fifth-biggest bank in the world, as one generating significant and sustained additional profits growth for both sets of shareholders.

Barclays is offering 3.225 new shares for each ABN share, valuing each share at €36.25 and ABN as a whole at €67 billion (£45.5 billion). The price is a 33 per cent premium to where ABN shares were trading ahead of the merger talks announcement on March 16.

ABN shares fell by €0.52 to €35.77, partly reflecting the falling Barclays share price and partly on the view that the RBS consortium may walk away.

Rijkman Groenink, the chairman of ABN, said that any rival approach would have to be “serious and compelling” to persuade the bank to open its books. A break fee of €200 million would also be triggered.

The combined operation would throw up cost savings and revenue gains of €3.5 billion a year through a widespread cull of Western staff and a shift of back-office work to India and other low-wage jurisdictions. Barclays and ABN announced plans to axe 12,800 jobs and to shift another 10,800 posts from high-wage economies of the West.

The two banks also announced that their lead regulator would be the UK’s Financial Services Authority and not the Dutch central bank, as they had originally envisaged. However, the combined bank’s headquarters would still be shifted to Amsterdam, even though almost all the most senior jobs will go to Barclays executives.

One major institutional shareholder in Barclays applauded the deal, while adding that the two banks had to deliver on the promised synergies. “It does now all seem to be falling into place,” he said.

However, some shareholders and analysts were sceptical about Barclays’s ability to achieve the savings envisaged without losing customers and revenues. There may also be a revolt from hedge funds and more activist investors in ABN, which have been campaigning for a full-blooded auction of the bank and threatening its board with legal action. Size matters, pages 44-45 Tempus, page 55

Building A Good Foundation For An Online Home Based Business Residual Income

An online home based business opportunity is a great way to earn a residual income. Not all online home based businesses succeed at creating a residual income, though. Many online home based businesses fail, but this does not have to be the case. It is possible to build a good home based business online and residual income. The way to do it is to build a good foundation for the online home based business.

The way to set up a good foundation for a residual income home based business online is to understand the basic way it works. A residual income business online has to be set up so that one sale keeps earning a person money over and over. If the online home based business is not set up to do that then it will not create a residual income. A really good example is an affiliate program. An affiliate program is created by giving each affiliate a website encoded with their affiliate ID. Every sale made off of their website is credited to their ID. Their ID is also linked to the ID's of the affiliates they have signed up. Every sale their affiliates make is also credited to them. This allows the person to earn income on every sale associated with the work they have done. Affiliate programs are not the only type of residual income home based opportunity online, but they are the most popular. Mainly this is because they are easy to get started with and easy to maintain.

Beside understanding how it works a person must also understand that it takes work to build a residual income home based business online. One of the biggest problems people encounter is the fact that they think residual income means they do not have to work at all. That is a huge misconception. Anyone who thinks this is true is destined for failure. It takes work at least initially. Nobody makes money doing nothing. A good residual income is built. It is all about a good start. If a person puts up an initial investment of time and work then they are building a good foundation for their home based business online. They should have all of their marketing in place. They should have a good training program for new team members in place. They need to have all their bases covered and know how they will handle everything. It is about having a good plan and that takes work.

Everything starts with a good foundation. A foundation offers a stable platform for the online home based business to stand upon. It provides the necessary basis for success. The foundation of an online home based business needs to be built. It has to be strong and it requires work. In order to build a good foundation a person must understand the basis of residual income and understand that it takes work to get started.

Web Hosting Provider JaguarPC Partners With Alstrasoft Software

Web hosting provider JaguarPC (http://www.jaguarpc.com) has become an official hosting partner of Alstrasoft Software (http://www.alstrasoft.com), it was announced recently. The company will provide “a customized set of high performance servers tailored to Alstrasoft software such as video sharing software and content management software that allows users to create their own version of community sites”.

JaguarPC plans are compatible with Alstrasoft and new subscribers can receive a $100 discount on Alstrasoft software. There are no set up fees and a range of packages are available including online video sharing capabilities, online social networking, dating, community-based scripts, image hosting services, live technical support service for web sites and an expert advice service.

"We've merged the full breadth of capabilities inherent in Alstrasoft's various modules with JaguarPC's hardware to allow every business the opportunity to tap into the power and performance of their software without having to buy a full dedicated server," explained JaguarPC’s President, Mr. Greg Landis. "What this does is really expand the opportunities for web sites to provide services that only much larger sites have had. Now anyone can create web sites that have advanced features such as video sharing or social networking. It opens up a whole new world of possibilities in terms of new services and new revenue opportunities."

"When we began our search for a web host partner, we were looking for a company that really did offer the holy grail of reliability, service and value to the end user," added Alstrasoft’s Chief Technology Officer, Mr. John Ross. "What really stood out about JaguarPC was the high number of satisfied customers that posted in their online forums, and the confidence they had in letting users post on message boards. We look forward to working together with JaguarPC as we continue to roll out innovative eBusiness solutions in the future."

JaguarPC is based in Houston Texas, USA and owned by Jaguar Technologies LLC. The company provides business hosting services and VPS and Windows dedicated services through its subsidiary dehe.com. The company’s Devpond subsidiary is a web software company.

Hopefuls bid for right to serve school district

Six candidates are vying to capture two seats on the Jackson Board of Education in the April 17 school election. Polls will be open from 11 a.m. to 9 p.m.

The candidates are Gus Acevedo, Nicolas Antonoff Jr., Sharon Dey, Sal Duscio, Linda Lackay and Scott Sargent.

Acevedo and Lackay are current members of the board.

Acevedo, 58, has lived in Jackson since 1959. A graduate of the Switlik School and Jackson Memorial High School, Acevedo was a member of the first graduating class at JMHS in 1966. Both of his children graduated from JMHS.

Acevedo has served as vice president and president of the board and has chaired the athletic and curriculum committees.

"I am running for the school board because I feel I owe a debt to my community to make certain that its schools are ones about which they can be proud," Acevedo said. "My years of experience in education as an Ocean County Vocational Technical School board member, a Jackson school board member, an educator, a parent and a small business [operator] allow me to make the sound decisions that improve our district."

He said he believes everyone should be concerned about all of the students at all levels in every school.

"We must always remember the important fact that academics come before athletics and that athletics enhance the educational experience," said Acevedo. "Another very important fact should be that people running for the board should not be enemies of the district. Partisan politics should never take over non-partisan school boards. Imagine if a political group controlled both budgets."

He said the district has made great strides forward and needs to keep getting better.

"Experience does matter," he said. "We cannot return to the past. Our eyes must be on the prize, a better-educated student being educated without misspending our tax dollars."

Antonoff, 73, a resident for eight years, has spent the last 30 years in project/program management and business development, overseeing the design, development, integration testing and fielding of secure, complex computer systems for applications in aerospace and the armed forces.

"I firmly believe it is time to redirect our public secondary education system to its primary mission, to prepare its graduates for successful competitive careers in the college and/or global economy workplace of their choosing," said Antonoff. "We must stop the manipulation of test scores and exploitation of students to increase state and federal funding, and bureaucratic bragging rights. We must rein in, freeze, galloping tax increases to stop creeping eminent domain abuse by home equity erosion."

Antonoff said he earned bachelors and master's degrees in physical chemistry.

"Effective business development/contract management requires conforming to, generating, evaluating well written, testable performance specifications, and adhering to cost realism, a practice the education system would be smart to adopt, along with zero base budgeting," said Antonoff.

If elected to the board, Antonoff said he would focus on "significant improvement of abysmal Jackson students' performance on national standardized tests."

Dey, 35, who has lived in Jackson for nine years, has a son in the first grade at the Johnson School and a daughter in preschool at the Crawford Rodriguez School. She works as a part-time accountant.

Dey said she is a member of the Special Education Advisory Council, the Parent to Parent Support Group and Parents for Educational Progress (PEP). She said she is also an advocate for autism awareness.

"I am running for the board because I am a parent and a taxpayer who cares about the future and quality of education for our children," Dey said, adding that there needs to be a more positive return on tax dollars. "Being an accountant, I am good at cost saving and working within a budget. We need to make changes and improvements to control spending, while providing the education our children deserve."

Taxpayer dollars must be spent in a student focused manner, she said.

"Construction costs, administrative costs and other expenses seem to rise faster than we can keep up. Yet, there's no measurable positive outcome in student performance," said Dey.

The candidate said she knows the formula that provides state aid to local schools is unfair and said there is a need to work together to help better a bad situation. But, she said, the average person is not receiving the same increase in salary that he is expected to pay in taxes.

"We cannot keep blaming others for our own lack of commitment to saving money while improving education," Dey said. "More community members need to be included in the decision making process. As a member of PEP, I want to challenge the Jackson School District to change."

Duscio, 78, said he is running for Jackson school board "because the problems that existed 12 years ago when I first started running for the board are still present: no accountability, no effort to economize, overpaid personnel, too much personnel and too many costly programs not related to education. Give our students the best education possible."

Duscio, who has been a Jackson resident since 1950, said being a taxpayer alone qualifies him and other citizens to get involved. He said he knows how the system works and said there is much to be corrected.

"The board should be composed with all kinds of citizens: housewives, blue collar workers, retired citizens, anyone but school teachers," said Duscio. "Board teachers think only one way. They understand three things, spend, spend and more spend.

"I'm very concerned about the senior citizen developments we have in Jackson. Ninety percent or better are immigrants from other states. They have paid their dues a long time ago. Thank goodness they are here in Jackson paying these crazy taxes. Without them, Jackson would be in one heck of a mess," he said.

He said it is not fair to ask these seniors or any seniors to pay for something they or their families are not enjoying.

"Living in Jackson is not very affordable," Duscio said.

A different view about who should pay for schools was expressed by Lackay, 45, who said "the education of our children is a responsibility every member of the Jackson community shares. This obligation exists regardless of one's stage in the family life cycle or economic circumstances."

Lackay said she is seeking a second term on the board because she recognizes the significant impact of providing a quality education for every child within the financial constraints of Jackson's community.

"As a 22-year resident of Jackson I have experienced the tremendous growth in town," she said. "In an effort to meet the variety of needs demanded by our swelling community, I have been an active member of numerous organizations including president and trustee of the Oakley Hill Association, president and treasurer of the Rosenauer PTA, active volunteer with the Jackson Soccer Club, Holbrook Little League, Jackson Jungle playground and Jackson Day."

Lackay has served on the school board as chair of the legislative committee and said she has established a positive working relationship with past and present local government officials, as well as state legislators on issues directly beneficial to Jackson.

"Equitable state funding based on current student population is the greatest issue facing Jackson," said Lackay. "As an experienced leader, I will continue to lobby local, state and federal legislators for fair educational support of our growing community."

Sargent, 43, a parent of two children who is employed at the Jackson Public Works Department as a laborer, said he thinks the school board needs a reality check.

"I am a taxpayer," said Sargent, a 17-year resident of the community. "There is an alarming trend of continual tax increases. The message is clear and concise, stabilize taxes and ensure more tax dollars are spent on our children."

He said that as a member of the Parents for Educational Progress team, he is asking for a chance to make some positive changes for Jackson.

"As a former manager at a firm which services retail and restaurant businesses, my strengths are in leadership, accountability and follow-up procedures," Sargent said. "I have the ability to listen to ideas and move forward with plans that would be helpful for the district."

Creating an atmosphere of open dialog for all parties is one area he said he had been aggressive in as a manager.

Sargent said the term "shared services" is a popular political phrase right now, but said the logic behind it concerns him.

"I believe if we had quality management in place there wouldn't be a need for shared services," he said. "The idea of shared services creates the ability to blame another for the shortcomings of the people, agency, or institution who should be liable to begin with."

He said that as a member of the board he would lobby his fellow board members to be accountable for their own decisions.

"Fault should never be lumped on any entity other than the school board itself," he said. "Otherwise no progress can be made."

Sargent said he will foster a plan where the school board will be accountable and responsible.

Singapore govt to partner with AP schools

HYDERABAD: Government of Singapore is considering an idea of partnering with some schools in the public and private sectors in Andhra Pradesh in terms of exchange of syllabi, curriculum, etc., through tie-ups and exchange programmes and business partnerships.

Disclosing this at a get-together organised by the Confederation of Indian Industry (CII) here on Monday, Minister for Education of Singapore Tharman Shanmugaratnam said this partnership could take off well as the medium of instruction was English even in Singapore. The structure of education, however, did not resemble that of the British. More ingredients were adopted from Japan, North European countries and the US, he said.

Stating that Singapore had achieved an expertise in polytechnics and vocational training, Mr. Shanmugaratnam said that the Government of Singapore was keen on partnering with such institutions in India to make youths employable with high quality technical skills.

He showcased Singapore as a hub between the East and the West and said that Singapore law could be adopted as a neutral law for arbitration. While partners of global companies were traditionally approaching law firms in the US and the UK for arbitration, Singapore recognised the need for Asian law to become globally acceptable, he observed.

Students from across India were seeking admission in SPJ School of Business in Singapore, located on Hyderabad Road in the city, and were recreating the deep link of historical relations between the nations, he said. The road was named after Hyderabad, as the Nizam had property there long ago.

Chairman of Satyam Computer Services and NASSCOM B. Ramalinga Raju said collaboration of strengths and opportunities by India and Singapore would enhance the synergy levels.

Two ballot questions posed in h.s. district

Voters who live in the Freehold Regional High School District's eight sending communities will answer two ballot questions in the April 17 school election.

The first question will ask voters to approve a general fund tax levy of $105.3 million to support a budget that totals $165.1 million for the 2007-07 school year.

The district's total debt service (payments on outstanding loans) for 2007-08 will be $7.6 million. The debt service tax levy will be $5 million. Residents do not vote on the debt service tax levy.

The district's total state aid for 2007-08 is $42.3 million.

The second question will ask voters to approve an additional tax levy of $1.3 million for freshman sports, auditorium renovations, roofing repairs, instructional and non-instructional equipment. The proposed second question expenditures are in addition to those necessary to achieve the state's Core Curriculum Content Standards.

According to Business Administrator Joan Nesenkar Saylor, "These programs [on the second question] could not fit in the budget. We will have them as a second question and if that question is approved that tax levy will become part of our base tax levy for the future. If the second question is not approved we can appeal [the outcome of the vote] to the governing bodies in the sending municipalities. They may reinstate [the second question items], but they do not have to."

Saylor said if freshman sports are approved in the second question they will remain in the budget for subsequent years.

According to Saylor, if the second question is approved, Freehold and Marlboro high schools will receive renovations to their auditoriums. In addition, Freehold and Manalapan high schools and the district's administration building in Englishtown will receive roofing repairs.

Funds raised for district security will be used for the "extension of cameras and other equipment to keep our schools safer," Saylor said.

The FRHSD Board of Education adopted its budget for the 2007-08 school year following a public hearing on March 26.

Saylor said the 2007-08 budget can be best described as austere. She said subsequent district funding will be impacted by what voters decide to do with this year's second ballot question.

"This is probably our one and only chance to try to get this money back into our base to maintain these programs. This is the last year that a second question is going to be a viable option. Next year if there is a second question in the budget, it not only has to be passed by the voters, but it has to be passed by 60 percent of those voting. Therefore, you would need a super majority and if it happens to be defeated there will be no appeal," Saylor said.

Regardless of how people vote, Superintendent of Schools James Wasser said he would like to see residents come out in record numbers.

"I would love to see 20,000 voters come out and exercise their vote. Taxpayers should get the information, make sure it's factual, understand it and vote," Wasser said.

In addition to encouraging residents to exercise their right to vote, Wasser also commented on a tuition increase the district will have to pay to the Monmouth County Vocational School District for students from the FRHSD who attend the vocational district on a full-time or part-time basis.

Several weeks ago administrators in the vocational district asked for a $245,000 increase in tuition, according to FRHSD administrators. By the time the

public hearing on the FRHSD budget was held, the tuition increase had been lowered to $71,800.

"You are allowed to have a spending growth adjustment rate in tuition and raise additional taxes to cover that amount of money. Therefore, the $71,800 would be raised in taxes," Saylor said.

Wasser said if the vocational school district wants a tuition increase in the future he wants more notice than the FRHSD received this year.

The tax impact of the two budget questions will be spread among the district's eight sending municipalities in the following manner:

+ Colts Neck - Taxpayers will be responsible for paying $10.8 million of the $105.3 million general fund tax levy. They will be responsible for paying $139,122 of the second question tax levy of $1.3 million. If both questions are approved, the FRHSD tax rate will increase 4.6 cents per $100 of assessed valuation (an increase of $138 to the owner of a home assessed at $300,000).

+ Englishtown - Taxpayers will be responsible for paying $626,697 of the $105.3 million general fund tax levy. They will be responsible for paying $8,054 of the second question tax levy of $1.3 million. If both questions are approved, the FRHSD tax rate will decrease 3.6 cents per $100 of assessed valuation (a decrease of $72 to the owner of a home assessed at $200,000).

+ Farmingdale - Taxpayers will be responsible for paying $542,368 of the $105.3 million general fund tax levy. They will be responsible for paying $6,970 of the second question tax levy of $1.3 million. If both questions are approved, the FRHSD tax rate will decrease 4.7 cents per $100 of assessed valuation (a decrease of $94 to the owner of a home assessed at $200,000).

+ Freehold Borough - Taxpayers will be responsible for paying $3.8 million of the $105.3 million general fund tax levy. They will be responsible for paying $48,852 of the second question tax levy of $1.3 million. If both questions are approved, the FRHSD tax rate will decrease 0.3 cents per $100 of assessed valuation (a decrease of $6 to the owner of a home assessed at $200,000).

+ Freehold Township - Taxpayers will be responsible for paying $20.4 million of the $105.3 million general fund tax levy. They will be responsible for paying $262,912 of the second question tax levy of $1.3 million. If both questions are approved, the FRHSD tax rate will increase 3.8 cents per $100 of assessed valuation (an increase of $114 to the owner of a home assessed at $300,000).

+ Howell - Taxpayers will be responsible for paying $22.8 million of the $105.3 million general fund tax levy. They will be responsible for paying $293,459 of the second question tax levy of $1.3 million. A property revaluation in Howell precludes an exact estimate of the new FRHSD tax rate. Based on last year's property values, Howell would have increased by 1.2 cents per $100 of assessed valuation.

+ Manalapan - Taxpayers will be responsible for paying $21 million of the $105.3 million general fund tax levy. They will be responsible for paying $270,715 of the second question tax levy of $1.3 million. A property revaluation in Manalapan precludes an exact estimate of the new FRHSD tax rate. Based on last year's property values, Manalapan would have increased by 3.6 cents per $100 of assessed valuation.

+ Marlboro - Taxpayers will be responsible for paying $25.1 million of the $105.3 million general fund tax levy. They will be responsible for paying $322,693 of the second question tax levy of $1.3 million. If both questions are approved, the FRHSD tax rate will increase 1.6 cents per $100 of assessed valuation (a $48 increase to the owner of a home assessed at $300,000).

The FRHSD school tax is one portion of a property owner's overall tax bill. The tax bill also includes municipal taxes, elementary school taxes, Monmouth County taxes and several other assessments.

The FRHSD is made up of eight sending municipalities and operates six high schools. The present total enrollment is about 11,800 students.

Schools seek remedy for labour force ills

The City Vocational College was expected to be able to supply the city’s workforce with many more skilled workers when it received a licence to operate eight years ago, but after a five- year wait the project was granted just VND22 billion ($1.37 million) to invest in capital construction and equipment.

The college is still in dire need of money and continues looking for further grant to implement its second growth phase with a proposed VND45 billion ($2.81 million).
“We have no idea how much money the municipal government would allocate us, but to start business seriously to become a key vocational school, able to train workers in a variety of skills, the college needs about VND100 billion ($6.25 million) in capital,” said Nguyen Tran Nghia, principal of the City Vocational College.
In a similar case, the Southern Saigon Technical High School project in District 8 recently received VND54 billion ($3.37 million) to implement the first phase of a school project after three years of desperately longing for the cash injection. However, land clearance compensation had already eaten into the project capital by as much as VND20 billion ($1.25 million).
Principal Tran Ngoc Trinh said: “We do not know when this training school would be completed. For phase one, we had waited for three years and, for phase two, we still do not know how long the wait would be.”
“For the moment, in order to maintain the normal running of the school, a row of old houses must be converted into classrooms and old equipment must be used on a temporary basis pending the completion of the new school,” Trinh added.
Cu Chi Technical Workers School Hua Van Nhon principal said: “We waited for five years to be allocated capital to start construction work on the school. Finally in 2006 the city government granted VND21 billion for the school project.
But, when the capital reached us it was found to be smaller than the size of capital actually needed to cover the costs of construction and equipment, because an interval of five years means a lot of differences in prices.”
A quick survey of the city’s vocational school investment projects showed that all of the projects had to wait for three to five years before receiving investment capital which was always smaller than the total actual expenses.
Ho Chi Minh City Department of Labour, Invalids and Social Affairs’ Vocational Training Office head Nguyen Thanh Hiep said to satisfactorily meet the demand for the training technical workers, each training school needed at least VND80-VND100 billion ($5-$6.25 million), but very few schools were granted investment capital more than VND50 billion ($3.12 million). Most investment capital allocated by the city was mainly for capital construction and not for equipment and workshops.

IT spend in the education secto

Spending on IT in the education sector is very low in comparison with the cross-industry UK average. Smaller educational establishments spend...

... an average of £915 per desktop, compared with a UK-wide average of £3,132 among small and medium-sized enterprises. Larger educational institutions spend an average of £1,839, compared with £8,455 across all industries.

The numbers may come as a surprise to some, given the various initiatives to improve IT use in schools and the growth in e-learning at a vocational and professional level.

A report by Becta, the government agency in charge of education and vocational training, estimated that the cost of upgrading every school IT desktop in the UK could be as much as £160m.

However, the uniformity of requirements across the country does mean that the sector is able to benefit from competitive centralised agreements with software and hardware suppliers.

Despite the lure of open source software, Becta said it was committed to a licensing agreement it has with Microsoft, which gives schools discounts on much of its software.

Becta said the licensing agreement establishes significant savings for those schools across the UK that use Microsoft products.

"Depending on the mix of products purchased, schools should be spending between 20% and 37% less than might have been expected in the absence of the Becta Microsoft Memorandum of Understanding," it said.

Housing Bubble and Real Estate Market Tracker

Here's our summary of articles and data points on the housing market. It's part of Seeking Alpha's coverage of the real estate market and homebuilder stocks. Like all other topics and stock coverage from Seeking Alpha, you can get this sent to your Blackberry or desktop email by signing up for our no-spam free email subscription service.

Quote of the Day- "From the House's Mouth"

"Frankly, we've seen macroeconomic headwinds, including higher energy prices, slower housing sales, impact of the volatility in subprime lending rates and declining consumer confidence that we believe -- in combination with our internal changes -- will contribute to a significant loss in the first half." - Circuit City CEO Phil Schoonover. (Circuit City F4Q07 (Qtr End 2/28/07) Earnings Call Transcript in Seeking Alpha, Apr. 4th)

Real Estate Sales and House Prices

* Homebuilding Figures Skid (Dallas News, Apr. 10th): "Metrostudy: Dallas-Fort Worth Q1 [homebuilding] starts down almost 35%. Local housing production totaled less than 8,000 single-family units – the lowest quarterly total since 2001… Pre-owned home sales dropped 5%... Purchases of new houses were down 7% from a year ago… Inventories of homes for sale have been rising, forcing builders to cut prices and curtail starts… The median home sales price last month was $149,000, up 2% from a year ago… There were 11% more pre-owned homes on the market in March than a year earlier… about a 7 ½ -month supply."

* High-Rise Condos to Go on Auction Block (WFAA.com, Apr. 10th): "Dallas: "Thirty-four [luxury] living units… were purchased in late 2005 by Centennial Real Estate Corp. of Dallas and GEM Realty Capital of Chicago. The rental units were converted into condominiums and have sold for more than $500,000 to almost $3 million… Five of the units will be sold without a minimum bid… Suggest[ed] opening bids for the high- rise properties start between $250,000 and $500,000 for the condominiums, which range from 1,362 sf to 5,164 sf… Dallas housing analyst Mike Puls: "The planned auction is a sign that the high-rise condo market has softened."

* East Coast Condo Prices Falling (RIS Media, Apr. 9th): "The Warren Group: Rhode Island's statewide median price of a condo in February was down nearly 15%, to $219,500, compared with $258,000 a year earlier… Condo sales since January have fallen nearly 9% during the same period... In February, the statewide median price of a single-family house fell about 4%, to $249,250, compared with $260,000 during the same month last year. Meanwhile, single-family house sales were up about 4% in February — and nearly 8.5% so far this year."

* Median Home Prices Rise (Poughkeepsie Journal, Apr. 9th): "Ulster County Board of Realtors: The median home prices in Dutchess and Ulster Counties rose in March compared to a year ago for all types of homes. Attached homes in Dutchess saw a median price of $345,000 in March 2007, up 1.5% from a year ago while detached homes saw their median price rise to $235,000 — a 27% increase…. In Ulster, the median price climbed 8.4% from $237,450 to $257,450… Dutchess saw 138 detached homes sell and 45 attached homes sell in March, down 8% and up 28.6% respectively."

* Experts: Record Housing Inventory Temporary, Not Sign of Impending Slump (Henry Daily Herald, Apr. 8th) Atlanta: "Job losses, like the closing of Hapeville’s Ford plant…have led to a [housing] cooling in some areas, particularly the south side, where many of those workers live…The cooling has led some builders to offer considerable buying incentives, particularly in high-priced homes in areas where inventories are at a peak. One Henry builder, for example, is offering a $20,000 incentive on a $390,000 home… In Henry, there’s nearly a 10-month supply of homes in the $201,000-225,000 range. In Clayton, it’s nearly 18 months. Metro Atlanta’s average inventory for homes in the same range is about eight months."

Real Estate Investing and Sentiment

* Yonkers To Explore Limits On 'McMansions' (Westchester.com, Apr. 10th): "Moving to address a "growing" phenomenon in neighborhoods across Yonkers, Mayor Phil Amicone has proposed tightening local zoning codes in order to curb the influx of so-called “McMansions”—large new homes that appear inconsistent with the size and architectural character of surrounding homes… A dearth of buildable land and consumer desire for bigger houses have made McMansions more and more common in older suburban communities across the country. The results are often new homes built on previously vacant lots that literally dwarf other houses on the same block."

* Homebuyers Hit By $100B in Crazy Fees Each Year (TPM Café, Apr.9th): "Real estate agents tend to charge a flat percent of the sale price of a home, typically about 6%. This figure is the same regardless of how much work the agent does or the results he or she achieves. Instead it is largely determined by the prevailing property prices in the area... Double pay for the same work? For buyers, this is fee structure is particularly senseless, since it incentivizes the agent to get the highest possible sale price, which is directly contrary to her customer's interests."

Mortgates and Real Estate Lending

* Citigroup Tightens Mortgage Lending Standards (Reuters, Apr. 9th): "Citigroup Inc. (C), the largest U.S. bank and one of the largest U.S. mortgage lenders, is telling brokers that on Monday it will stop making some riskier home loans… The move follows decisions by Countrywide Financial Corp. (CFC), Wells Fargo & Co. (WFC) and other major mortgage lenders to tighten their underwriting standards as homeowner delinquencies and defaults increase… The changes at Citigroup's main home loan unit, CitiMortgage Inc., would limit no-money-down second mortgages and raise the minimum credit scores needed to obtain them. Borrowers take out second mortgages when they cannot get 100% financing from a single lender."

* Subprime Crisis Shines Light on Mortgage Brokers (Market Watch, Apr. 9th): "A controversial fee called a Yield Spread Premium, which is paid by the lender to the broker [and often not revealed to the borrower], has come in for particular criticism and is the subject of a class-action lawsuit against NovaStar Financial (NFI) one of the largest subprime mortgage originators… As the housing market boomed, mortgage brokers' influence grew as they became involved in arranging the majority of home loans. Now the broking business should bare some of the blame for the ensuing crisis, say critics, including some who are brokers themselves… The YSP… averages almost $2,000."

Subprime Turmoil Spreading?

* Defaults Rise in Next Level of Mortgages (NY Times, Apr. 10th): "Alt-A loans… made up about 10% of all mortgages outstanding at the end of 2006 and made up about 18% of home loans written last year, according to Moody’s Economy.com. Together, subprime and Alt-A loans account for about 21% of loans outstanding and 39% of mortgages made in 2006. The delinquency rate for Alt-A mortgages… has been rising. In February, 2.6% of Alt-A loans were delinquent by 60 or more days, up from 1.22% a year before, according to FirstAmerican Loan Performance. By comparison, 12.44% of subprime loans were delinquent by more than two months, up from 7.84%."

* Mortgage Fallout Hits Area's Largest Bank (Evening Sun, Apr. 9th): "Buffalo, N.Y.-based M&T Bank, which has 23 branches in the county, Friday reported that it expects a $7 million decrease in its first-quarter earnings even though it is not in the subprime lending business…When M&T took its Alternative-A loans to the secondary market to sell to investors, there was "very little interest" and bids for the mortgages were lower than anything the bank had seen in the past, M&T spokesman Michael Zabel said… M&T officials believe secondary-market pricing for its Alternative-A loans are irrational and a result of subprime turbulence."

* Sector Snap: Mortgage Lenders (Business Week, Apr. 9th): "Shares of mortgage lenders sank Monday…A week after M&T Bank Corp. said it was having trouble selling its Alt-A loans, American Home Mortgage Investment Corp. said yesterday it faced far fewer buyers bidding materially lower prices in an auction of Alt-A mortgage debt last month… IndyMac Bancorp Inc., which generated $70.2 billion in Alt-A loans in 2006 representing 78% of total volume, fell $0.67, or 2.1%, to $31.13 on the NYSE… Impac Mortgage Holdings Inc., which issued $11.6b in Alt-A loans last year representing 92% of total volume, fell $0.31, or 6.4%, to $4.54 on the NYSE."

* HSBC Mortgage Services to Close its Call Center in Orlando (Bradenton Herald, Apr. 9th): "HSBC Mortgage Services plans to close its collections call center in Orlando, eliminating about 110 local jobs… HSBC's local cutback is the latest corporate downsizing in central Florida this year related to the turmoil in the subprime-mortgage business… "That market has virtually ceased to exist," said William Weaver, a real estate professor at the University of Central Florida. HSBC, the nation's biggest subprime lender as of late last year, has survived so far - but only after increasing its bad-debt reserves to $10.6 billion in February, a 125% increase from 2006, to cover anticipated losses in its subprime portfolio."

* Mortgage Market Dries Up For American Home (Forbes, Apr. 9th): "Along with the rising defaults, an interest rate increase by the Bank of Japan may have discouraged hedge funds from borrowing in yen and then reinvesting in dollar-denominated assets, putting added pressure on the mortgage-backed securities market. In February, the Japanese central bank raised its overnight lending rate to 0.5% from 0.25%; up until last summer, the rate had been near zero. While the yen rate remains low by absolute and relative standards, the idea that it might rise further could be encouraging so-called carry-trade investors to begin unwinding their positions or at least to limit new ones."

Subprime Fallout and Foreclosure Impact

* MLN Gone, Site Work Goes On (Hartford Courant, Apr. 10th): "When Mortgage Lenders filed for bankruptcy Feb. 5, it left the building's Michigan-based developer, Workstage, with a 300,000 sf building that was about a quarter complete and without a tenant… Cushman & Wakefield of Connecticut: Workstage may still lease the building to one tenant, and it has received some "very preliminary" inquiries from two potential tenants that could lease the entire building… Workstage has also drawn interest from six smaller tenants that might want to lease 60,000 to 100,000 sf… The project's construction cost, once pegged at $100 million, has shrunk to about $60 million."

* Bankruptcy Trustee Opposes New Century’s Sale of Mortgages (NY Times, Apr. 10th): "New Century Financial (NEWC) should not be allowed to sell about 2,000 mostly defaulted mortgages, or [$50 million worth to Greeenwich Capital,] a subsidiary of the Royal Bank of Scotland, U.S. trustee Joseph J. McMahon said yesterday… Before the sale is approved, NEWC should be forced to eliminate or reduce a $1 million breakup fee associated with the deal and to say how it will protect consumer financial data… NEWC said Carrington Capital Management had offered about $133 million for [NEWC's] loan servicing unit, which collects and manages mortgage payments."

* Subprime Fallout: Good For Countrywide, Bad For Choicepoint, Bankrate (Faisal Laljee in Seeking Alpha, Apr. 9th): "I believe Bankrate's EPS for Q1 will come in closer to the lower end of analyst estimates… The stock will be in the 20's before year end… I am of the opinion that Choicepoint (CPS) was very heavily levered towards subprime. In fact, I believe over 75% of their business in the financial services sector… was biased towards the subprime market… I recommend shorting the stock ahead of earnings… One company that has been oversold as a result of the knee-jerk reaction to the subprime headlines is Countrywide (CFC)… Over 90% of Countrywide's business is prime…While competition falls… Countrywide stands to gain market share as one of the few players that will be left standing."

* House Schedules Hearing on Subprime Lending (Inman News, Apr. 9th): "The House Financial Services Committee will hold a hearing this month on subprime mortgage lending, Chairman Barney Frank announced Friday. Frank said the April 17 hearing will "explore possible responses to recent increases in home mortgage foreclosure rates" and include representatives from Fannie Mae, Freddie Mac, the Federal Housing Administration, the mortgage industry and consumer organizations. Frank, D-Mass., told lawmakers in a March 29 letter that the committee was drafting legislation to address predatory lending that will be introduced later this session."

* Jobs, Not Subprime, Continue To Drive Foreclosure Rates (Investors.com, Apr. 9th): "So far, the Golden State has avoided the spike in foreclosures gripping Midwest states such as Michigan and Ohio and those in the South such as Louisiana that were hit by Hurricane Katrina. California's new foreclosure rate was just 0.43%. But Indiana, Michigan and Ohio all topped 1%. Subprime foreclosures and delinquency data tell a similar story. Economists say the reason is clear. California's economy continues to create jobs. That helps people keep their homes, propping up prices and letting homeowners with adjustable rate mortgages refinance before rate increases boost their payments."

* California Foreclosure Auctions Reach Record High (Default Servicing News, Apr. 9th): "Foreclosure Radar, a foreclosure listings and software company, says… California has experienced a 264% increase in the number of foreclosed homes sold at auction in just the last six months. “Foreclosures sold at auction now account for 15% of all home sales in California and continue to rise,” said Sean O'Toole, CEO, Foreclosure Radar… "At the current pace, foreclosures will be a significant part of the real estate economy." The company also said 5,316 foreclosures were auctioned in March — a 27% increase when compared to a month prior."

* Number of Yorkers in Mortgage Trouble Rises (York Dispatch, Apr. 9th) Buffalo: "The number of residents in York County and across the state asking for government help with mortgage payments increased by about 10% last year… In York County, the number of requests increased from 268 in 2005 to 298 last year. The number of requests statewide jumped from 9,081 in 2005 to 9,929 last year."

* MMNEWS-ABX Subprime Mortgage Index Little Changed (Reuters, Apr. 9th): "The benchmark ABX derivatives index opened mostly unchanged on Monday, a trader said. The ABX 2006-2 "BBB-minus" index, which references home loans made to risky borrowers in 2006's first half, ended Friday's session at 70.34, according to Markit.com. The index remains about 24% lower than where it began the year."

* Foreclosures on the Rise in Suburbs of Baltimore (Baltimore Sun, Apr. 8th): "Foreclosure filings rose four times faster last year in Baltimore's suburbs than in Baltimore - up 15% versus less than 4% in the city, court records show. To the south in Montgomery, one of the nation's wealthiest counties, filings were up more than 30%... Suburban Baltimore foreclosure cases are increasing even more quickly this year... Statewide, nearly 45,000 mortgages had late payments at the end of last year, according to the Mortgage Bankers Association. The share of delinquent loans rose more than 10% from 2005, the biggest y/o/y jump since the last recession."

* Few Homeowners are Immune to Detroit Area's Foreclosure Pain (Seattle Times, Apr. 7th) :"Detroit is evidence that even borrowers with good credit aren't immune to the risk of default. Mortgage Bankers Association: The percentage of prime loans in Michigan that were overdue by at least 90 days was 0.67% in Q4'06… A year ago, the Michigan rate was 0.59%. About 78% of Michigan mortgages are prime, given to the most creditworthy borrowers, just above the 77% national rate… The Detroit median home price fell 5.8% in the past three years… The median price of a house in the Detroit area was $154,600 in Q4, trailing the U.S. median of $219,300."

Global Alternatives To The Housing Slump

* U.S. Investors Bullish on Indian Real Estate (Little India, Apr.9th): "At last count, international funds had reportedly invested some $2.5b in Indian real estate. Nearly two dozen domestic funds have raised another $3.5b for similar investments, including Wall Street powerhouses such as J. P. Morgan, Warburg Pincus, Morgan Stanley Real Estate Funds, Merrill Lynch, Lehman Brothers, Warren Buffett's Berkshire Hathaway, the Blackstone Group, Colony Capital, Starwood Capital, etc."

Macro Impact, And Will The Housing Slump Cause A Recession?

* Subprime Mess Hurts Even Harley-Davidson (Blogging Stocks, Apr. 9th): "Even Harley-Davidson (HOG) is having trouble with bad loans… Harley has a credit subsidiary, HDFS, which makes about half of the loans to new customers. Delinquencies on loan payments at HDFS are on the rise. In the first quarter of 2005, delinquencies were 3.6% of outstanding loans. By the fourth quarter, delinquencies had risen to 5.18%. This increase in delinquencies looks a lot like the situation in the mortgage market. And just like mortgages, loans made by the HOG are packaged and sold to investors. So bad loans will hurt more than Harley."

* Mortgage Lenders, Builders Pick up Pace of Job Cuts (Inman News, Apr. 9th): "Challenger, Gray & Christmas, a New York-based outplacement job consulting firm: Announced job cuts in the real estate industry totaled 1,149 during Q1, about the same as the 1,152 tracked during Q1'06. There were 3,490 announced job cuts in real estate in 2006… Mortgage lenders announced 6,138 job cuts in Q1'07, compared with 3,497 in the same period last year… There were 12,874 announced job cuts in mortgage lending last year. Announced job cuts in housing construction totaled 13,958 during Q1 -- more than double the 6,450 positions eliminated in all of 2006. Announced Q1 job cuts in all three housing related industries -- real estate, mortgage lending and construction -- totaled 21,245, rivaling the 22,814 jobs lost in all of 2006."

* Copper Rises on Expectations That U.S. Demand Will Strengthen (Bloomberg, Apr. 9th): "Copper prices in New York rose to a five-month high on expectations that demand in the U.S., the world's second-biggest user after China, will strengthen as inventories decline. Labor Department: U.S. employers added more workers than forecast in March and the jobless rate matched a five-year low... U.S. homebuilders, major copper users, increased hiring. Inventories… fell 2.6% in Q1… Prudential Equity Group LLP: The U.S. buys about 13% of the 17 million metric tons of copper sold annually, while China accounts for about 20% of global demand... Copper prices have surged 26% in the past month."

Homebuilders And Housing Stocks

* UK's Largest Construction Company Completes Acquisition of Centrex Construction (AZO Build, Apr. 10th): "Balfour Beatty plc, UK's largest construction company, has completed the acquisition of Centex Construction… a leading U.S. construction-management company… from the Centex Corporation, a leading-U.S. homebuilder… for… $367 million… The addition of Centex Construction to Balfour Beatty's portfolio gives the company now total annual U.S. revenues of approximately $3.5 billion... Centex is also a major player in the military-housing market. Centex Construction will have total revenues of over $2.2 billion this year, with backlog at record levels and profits growing… Balfour Beatty has a nearly 100-year history focused on commercial- and institutional-building construction."

* KB Faces Suit Alleging ERISA Violations (NWI.com, Apr. 10th): "KB Home Inc. disclosed Monday that a lawsuit was filed against it alleging violations of the Employee Retirement Income Security Act, related to option backdating… The Los Angeles-based homebuilder announced last year that it had found errors in options granted between 1998 and 2005, and that it will have to restate its past results to record up to $41 million in additional non-cash compensation expense."

* Ten Stock Picks From Barbara Marcin of Gamco Investors (Forbes Investor Advisory Institute in Seeking Alpha, Apr. 9th): "The housing companies were talking two months ago about possibly seeing a bottoming out. But, within the last few weeks, all reissued outlooks saying that things still look bad and that the upturn is not in sight… maybe that won’t be until 2008 or 2009. Nevertheless, these stocks typically bottom out in price a year before the worst outlook for the housing industry. A year before their own operations begin to pick up. So, if you think we're within 12 months of the bottom of housing, which I feel very confident we are, even though I think things will continue to get worse, these are very good buys here. We could have a 50% return over the next year or two. The ones I like best there are D.R. Horton (DHI), Ryland (RYL) and Centex (CTX)."

* Jim Cramer Stock Picks, April 9 (Miriam Metzinger in Seeking Alpha, Apr. 10th): "D.R. Horton (DHI) and Pulte (PHM): Cramer praised Ivy Zelman of Credit Suisse for her downgrade of DHI and PHM and called her report "eye opening." In brief, her research indicated DHI and PHM "could go much lower, and book value seems to mean nothing." Zelman predicts a 15%-20% decline for homebuilders who haven't sufficiently reduced their land holdings."

* Homebuilder CCI Files for Bankruptcy (Southwest Florida Herald Tribune, Apr. 9th): " Construction Compliance Inc., the failed St. Petersburg-based homebuilder that left hundreds of unfinished homes across Southwest Florida and contributed to the recent huge losses at Bradenton's Coast Bank of Florida, has filed for bankruptcy protection from its creditors in a Tampa Federal Court says Alan Tannenbaum, an attorney for about 150 CCI customers from around the nation. The Chapter 11 petition was filed on April 3."

* Looking To Short Real Estate Via ETF (Trade Radar Operator in Seeking Alpha, Apr. 9th): "The real estate mess is not yet spilling over into the general economy. If we can't find significant impact in the ETFs most closely associated with real estate then we are probably not going to see real estate as the cause of the next recession… Using various shorting strategies with XHB since the beginning of February would have yielded the best return. Directly shorting the ETF or using options would both have produced winning trades. Unfortunately, these are not the easiest techniques for the individual investor."

* Alt-A Reality and the Subprime Rescue Mission (Blogger News Network, Apr.9th): "Beazer Homes (BZH) built a great many low income starter homes in Mecklenburg County, North Carolina. The county with the highest foreclosure rate in the state…In March, the Charlotte Observer… analyzed county records, showing “35 Mecklenburg developments of low-priced homes built in the last decade with foreclosure rates of 20% or higher”. Ten Beazer subdivisions had a rate of 20 to 34%... [In] Southern Chase, a Beazer subdivision of 406 homes in Cabarrus County [where] most of the homes were financed through Beazer. Of a total of 75 homes in foreclosure, 45 were FHA-insured. To date, the FHA has paid out $5 million to cover foreclosures in Southern Chase alone."

Commercial Real Estate and REITs

* Florida REIT Buys Wild Waves in Seven-Park Deal (Puget Sound Business News, Apr. 9th) Seattle: "CNL Income Properties Inc. has completed its acquisition of Wild Waves & Enchanted Village in Federal Way as part of a seven-park deal worth $312 million, the company disclosed in regulatory filings Monday. CNL, a REIT based in Orlando, Fla., on April 6 bought the parks from an affiliate of PARC Management LLC. CNL then leased the properties back to PARC Management, which will operate the facilities, according to CNL filings with the Securities and Exchange Commission… Earlier this year… Six Flags Inc. sold the seven parks to PARC Management of Jacksonville, Fla."

* Farallon offers $1.84 billion for Englewood REIT (Denver Post, Apr. 9th): "Farallon Capital Management LLC today said it offered to buy Affordable Residential Communities Inc.'s home community business for $1.84 billion in cash. Affordable Residential is an Englewood, Colo.-based REIT... Farallon, a San Francisco-based investment firm, also reported today that it holds a 10% stake in Affordable Residential. Farallon beneficially owns 5.7 million shares of Affordable Residential, up from a previously reported 4.6m-share stake in the REIT. Farallon said its offer doesn't include Affordable Residential's property and casualty holding company, NLASCO Inc."