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Does Being Ethical Pay?
By Remi Trudel & June Cotte - Wall Street Journal (12 May 2008)

After reading about the company and its coffee, the people told us the price they were willing to pay on an 11-point scale, from $5 to $15. The results? The mean price for the ethical group ($9.71 per pound) was significantly higher than that of the control group ($8.31) or the unethical group ($5.89).

Meanwhile, as the numbers show, the unethical group was demanding to pay significantly less for the product than the control group. In fact, the unethical group punished the coffee company’s bad behavior more than the ethical group rewarded its good behavior. The unethical group’s mean price was $2.42 below the control group’s, while the ethical group’s mean price was $1.40 above. So, negative information had almost twice the impact of positive information on the participants’ willingness to pay.

“Now previously we have said that we expect housing prices to fall at least 15% nationally, and today they [have fallen] about 9% through the measure we use which is relative to our market. We want to take a better look at the spring housing market to see whether or not the data is beginning to firm up. It is premature at this point from a data perspective to make a change in our formal estimate. However at this point we must say that the risk to the forecast are strongly weighted on the downside. Give the severity we have experienced, [we took] an increase in charge off in REO expenses associated with higher loan loss severities. As a result of this change, we raised our estimate for credit costs and increased our provision.” ~ Richard Syron, CEO, May 14, 2008 (emphasis added)

View full CalculatedRisk Blog Post (14 May 2008)

I am a great admirer of patience and fearlessness combined in a persistent person. I got a chance to see Man from Plains which chronicles President Jimmy Carter’s book tour across America to publicize his book, Palestine: “Peace Not Apartheid.” I recommend it.

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The Kaufman Foundation has an excellent mission. I always want to know
what Bob Litan is thinking about, so I have high hopes for Growthology, a new blog from the Kaufman Foundation.

I wonder what the Kaufman Foundation endowment is doing in terms of mission investing? It would be wonderful if their endowment could benefit from the knowledge they are growing about how to create more successful entrepreneurs.

Investors’ New Worry: “Auditor Risk”
By Robert Barker - Barker.Online (25 Jan 2002)

Thank heaven for Arthur Andersen.

You may think I’m nuts, given the hellfire now licking at the once-venerable Chicago-based accounting firm that signed its name to the annual financial audits of Enron. But in the stock market, every edge counts. And the Andersen situation is offering investors a fresh edge.

Call it “auditor risk.” Investors long ago learned to weigh a bunch of different threats to the value of their shares. Some financial-services stocks suffer “interest-rate risk”: When rates go up, their stocks tend to go down. Or take overall “market risk,” such as the plunge in value that took down most every stock when trading resumed post-September 11.

. . .

I was speaking with Dennis Bernstein of Flashpoints about our show, Community Business, which we do each Wednesday night. We were talking about Solari Audio seminar, “The REAL Economic Hit Men” I mentioned that one of the myths about economic hits is that such events are something that happen in poor countries or poor neighborhoods. The reality is that economic hits have been happening broadly in the U.S. and globally all along.
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I just saw an excellent presentation by Kathryn W. Mirree, J.D, called The Top Ten Charitable Planning Ideas for 2008. The seminar was presented by the Planned Giving Council of Greater Memphis and Community Foundation of Greater Memphis. Other than raising money long ago for the New York City Food Bank and my secondary school and university, I have traditionally shied away from philanthropy. The feisty author of GiftHub.org has persuaded me that an investment advisor should understand the state of philanthropy, the role of charitable giving in estate planning and how community foundations operate. I always welcome an opportunity to learn more about how life and money flow around me.

Before delving into the top ten ideas, Mirree gave an overview of the state of U.S. charitable giving. Here are a few points to chew on:

• Sources in 2007 totaled $295.02 billion, of which $222.89 (75.6%) came from individuals.
• Of this $295.02 billion, religious organizations received $96.82 billion or 32.8% and education received $40.98 billion, or 13.9%
• According to IRS statistics in 2005, only 31% percent of those filing tax returns claimed itemized charitable deductions, giving $181.6 billion to charity.
• The Boston College Social Welfare Research Institute estimates the intergenerational transfer of wealth expected to occur between 1998 and 2052 as a range from a low of $41 trillion to a high of $136 trillion.

Bernanke Lunched with Dimon, Rubin Before Bear Rescue
By Scott Lanman - Blomberg.com (12 May 2008)

Federal Reserve Chairman Ben S. Bernanke lunched on March 11 with a Who’s Who of Wall Street leaders, including JPMorgan Chase & Co.’s Jamie Dimon three days before the central bank rescued Bear Stearns Cos. from bankruptcy.

Other guests included Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein, Lehman Brothers Holdings Inc. CEO Richard Fuld, Morgan Stanley President James Gorman, Citigroup Inc.’s Robert Rubin, Blackstone Group CEO Stephen Schwarzman, and Merrill Lynch & Co. CEO John Thain. Alan Schwartz the CEO of Bear Stearns, was not listed among the attendees.

. . .

Investor Releases
Zurich / Basel, April 21, 2008, 07:00 AM

UBS announced today that it has issued a Shareholder Report detailing the key facts relating to the firm’s positions and losses in the U.S. subprime residential mortgage sector through December 31, 2007. This Report, which provides an overview of a report which was submitted earlier to the Swiss Federal Banking Commission (EBK), is available on UBS’ website at www.ubs.com/agm.

China is Hit by 7.8-Magnitude Earthquake Near Chengdu
By Aaron Sheldrick & Eugene Tang - Bloomberg.com (12 May 2008)

China Earthquake Information - USGS

From Wikipedia: http://en.wikipedia.org/wiki/Chengdu

Chengdu, located in southwest People’s Republic of China, is the capital of Sichuan provinces and a sub-provincial city. Chengdu is also one of the most important economic centers and transportation and communication hubs in China.

Financial Industry
Chengdu is now building itself to be the financial hub for Western People’s Republic of China and has successfully attracted major international financial institutions, including Citigroup, HSBC, Standard Chartered Bank, United Overseas Bank (Singapore). Oversea-Chinese Banking Corporation (Singapore), ABN AMRO, Bank of East Asia, BNP Paribas, etc.

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Chilean Volcano Erupts ~ View all photos in the series

Chile Volcano Forces Evacuations
BBC News (2 Jan 2008)