Friday, May 17, 2002

BellSouth to Cut 5,000 "It's been a bad week to work for a phone company, with BellSouth (NYSE:BLS) announcing Friday staff cuts of nearly 5,000 in the coming months." "Executives don't expect to surprise employees with a pink slips, instead opting for a voluntary separation plan to both managers and non-managers. The Communications Workers of America union will oversee the non-management reductions. " 1:07:20 PM  Google It!  comment  []

Home Building Was Off in April "The construction of new homes fell in April to the lowest level in six months and the number of workers seeking unemployment benefits rose unexpectedly last week, two reports released today showed, pointing to a moderating economic expansion." "Builders started work at an annual rate of 1.56 million homes last month, down 5.4 percent from March, for the slowest pace since October, the Commerce Department said. Initial unemployment claims increased to 418,000 last week, and the number of people drawing benefits earlier this month, 3.9 million, was the highest in almost two decades, the Labor Department said." "'It will take some time for vigorous growth to extend to all industries and regions of the nation,' said Michael Moskow, president of the Federal Reserve Bank of Chicago, in a speech today." "The employment report reinforces the concern of central bankers that businesses are skeptical about increasing investment and hiring." 11:27:27 AM  Google It!  comment  []

America's Poor Standards "On Tuesday Standard & Poor's, the private bond rating agency, announced that it would do something unprecedented: It will try to impose accounting standards substantially stricter than those required by the federal government. Instead of taking corporate reports at face value, S.&P. will correct the numbers to eliminate what it considers the inappropriate treatment of "one-time" expenses, pension fund earnings and, above all, stock options — a major part of executive compensation that, according to federal standards, somehow isn't a business expense. S.&P.'s estimate of 'core earnings' for the 500 largest companies slashes reported profits by an astonishing 25 percent." "Why does S.&P. — along with Warren Buffett, Alan Greenspan and just about every serious financial economist — think that current accounting standards require a drastic overhaul? And if such an overhaul is needed, why doesn't the government do it? Why does S.&P. think that it must do the job itself?" "Options are only part of an accounting system in deep trouble. As David Blitzer, S.&P.'s chief investment strategist, recently wrote, 'Financial markets are as much a social contract as is democratic government.' Yet there is a growing sense that this contract is being broken, undermining the trust that is so essential to the operation of financial markets. Clearly, major reforms are needed. 11:01:18 AM  Google It!  comment  []