February 25, 2021

Off the Charts: Five Years After Chaos, Shares of Many Big Banks Are Still Struggling

Two weeks later, Lehman Brothers failed and a panic began. The crisis demonstrated how interconnected the world financial system had become and how vulnerable even apparently healthy banks were when their competitors began to crumble. In the weeks that followed, most large banks around the world had to be bailed out. Their share prices plummeted.

Since then, however, some big banks have performed much better than others — a difference based to a significant extent on just how well, or badly, each bank had been run in the months and years leading up to the crisis.

The accompanying charts show the performance of 25 large banks around the world. As the crisis began, each of them ranked in the top 20 in the world in at least one of three measurements — market capitalization, book value or total assets.

In the weeks and months that followed, all but one of them lost at least half of their market value, as measured in the local currency of the bank’s primary market. The exception was a Chinese bank, the Industrial and Commercial Bank of China, whose shares lost less than a third of their value.

The charts also show the performance of the Bloomberg World Bank Index, which comprises more than 140 banks and has done better than most of the large bank stocks. This was a crisis where bigger was not necessarily better, and where some of the largest banks proved to be far from adequately capitalized, notwithstanding what their books had indicated before Lehman collapsed.

This spring, the world bank index got back to within 3 percent of its level at the end of August 2008, although it has since slipped back and is now 11 percent lower. Few of the large banks shown have done as well.

But a handful of banks turned out to be profitable long-term investments that August. Shares of both JPMorgan Chase and Wells Fargo in the United States are now more than 40 percent higher than they were. Shares of two of the three Chinese banks shown — Bank of China and China Construction Bank — are higher now than they were five years ago, while the third is approximately unchanged. In Britain, HSBC is up about 13 percent, a much better performance than was shown by other large European banks. It did not hurt that HSBC had a significant presence in many developing countries, most of which rode out the recession reasonably well even though some have stumbled this year.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

Article source: http://www.nytimes.com/2013/08/31/business/economy/some-big-banks-thrive-despite-chaos-of-2008.html?partner=rss&emc=rss

Bloomberg Media Recruits a New Chief From The Atlantic

On Monday, Bloomberg will announce that Mr. Smith, the president of Atlantic Media, will be named chief executive of the Bloomberg Media Group. He will report to Daniel L. Doctoroff, chief executive of Bloomberg. Andrew Lack, who managed the media division for five years, will become chairman.

After joining The Atlantic in 2007, Mr. Smith developed a reputation as an aggressive promoter of digital media who was able to reconfigure a 156-year-old magazine into a genuine multiplatform property.

In a letter to the staff about Mr. Smith’s departure, David Bradley, the owner of Atlantic Media, credited Mr. Smith with bringing the company to profitability for the first time under his ownership; doubling revenue; and creating a number of successful digital start-ups, including The Atlantic Wire and Quartz.

His quick results at the Atlantic Media Company drew the attention of executives at Bloomberg, who began talking to him at the end of last year.

“We know that every part of media is being disrupted by technology, and we need someone who understands that,” Mr. Doctoroff said. “Justin can drive things forward here because he has an incredibly digital sensibility with a unique understanding of the confluence of journalism and multiple platforms.”

The move will give Mr. Smith significant scale and a connection with Bloomberg’s lucrative terminal business, which produces revenue that allows the company to invest aggressively in media properties. The company has had success in moving from a linear television business to a more diverse model of video distribution, while the acquisition of Businessweek gave Bloomberg an editorial cachet it historically lacked.

Even with those successes, the media division has long been treated as a marketing amenity for subscribers to the terminal business. Despite its recent growth, the media division has struggled to gain a consumer base for its properties, which include television, print, radio, mobile, events and digital media.

The company was heavily criticized several months ago after revelations that some of its reporters had used the Bloomberg terminals to gain access to data about its users, prompting Eric T. Schneiderman, attorney general of New York, to begin looking into the practice, The Wall Street Journal reported.

The company’s assets — its success, its size and a hard-driving business culture — might make bringing about change difficult. But Mr. Smith said the fit was a natural one.

“If you look at the entrepreneurial roots of this company and its history of market disruption and innovation, I think it is the best positioned media company there is,” he said. The theory that large companies cannot innovate, he said, “has not been historically true at Bloomberg.” He added, “This is a company where you can take big risks with longer horizons.”

Before joining Atlantic Media, Mr. Smith opened the American edition of the British newsmagazine The Week in 2001. Before that, he was head of corporate strategy for The Economist in London, Hong Kong and New York. He also founded Breaking Media, a collection of Web sites that includes Above the Law, Dealbreaker and Fashionista.

Mr. Smith has no experience in the television business and said he would work closely with Mr. Lack in that area. He said he was interested in creating new products, including ones aimed at the global market, while bringing additional digital muscle to Bloomberg’s existing businesses.

Eric Schmidt, executive chairman of Google, met Mr. Smith at one of Atlantic Media’s conferences and they became friends.

“How many people have really managed to be successful in digital media?” Mr. Schmidt said in a phone call. “Everyone has tried and few have been successful. Justin is one of them. He is moving very fast, but this is the next logical step. It’s a serious gain for Bloomberg.”

This article has been revised to reflect the following correction:

Correction: July 28, 2013

An earlier version of this article incorrectly said that the New York attorney general was investigating how reporters at Bloomberg had gained access to customer data. There is no formal investigation as this time.

Article source: http://www.nytimes.com/2013/07/29/business/media/bloomberg-media-recruits-a-new-chief-from-the-atlantic.html?partner=rss&emc=rss

Bloomberg Begins Fund to Invest in Start-Ups

On Wednesday, Bloomberg will announce the formation of Bloomberg Beta, a $75 million venture capital fund, which has already begun using Bloomberg L.P.’s money to place bets on young start-ups like Codecademy, a Web site that provides online coding tutorials, and Newsle, a Web service that alerts users to news about friends.

It is not the first time that Bloomberg L.P. has put its money in technology companies. It is a limited partner in Andreessen Horowitz, a venture capital firm with investments in technology companies like Facebook and Twitter. And until shutting it down recently, Bloomberg also ran its own incubator, Bloomberg Ventures, which helped build new businesses that could later be folded into Bloomberg products.

But Bloomberg Beta is the first time that Bloomberg L.P. will reap profits from direct investments in some of the technology companies that its news operation covers.

It is already an awkward time for the company, which is under fire because its reporters used Bloomberg’s financial terminals to snoop on companies they covered, including Goldman Sachs, and the fund raises questions on journalism ethics.

“This puts Bloomberg News’s credibility at issue,” said Edward Wasserman, dean of the Graduate School of Journalism at the University of California, Berkeley. “Reporters will not only be held to standards of accuracy and the like, but scrutinized for evidence of self-dealing and self-interest, which can be toxic to a news organization.”

Bloomberg Beta’s partners say they will operate as a separate legal entity from their parent company, which is Bloomberg Beta’s sole investor. The firm will be based out of Bloomberg’s offices in San Francisco, where many of its technology reporters are also based.

Bloomberg has been aggressively expanding its technology news coverage in recent years, hiring technology reporters and editors from The Wall Street Journal and The New York Times, and last month it doubled programming hours for Bloomberg West, a television news show on tech that regularly hosts executives and start-up founders like Jack Dorsey, a co-founder of Twitter and the payment service Square, and Elon Musk, the co-founder of PayPal and Tesla.

A Bloomberg News official said the company would follow existing rules on conflicts of interest, which forbid the company to cover itself. In cases where reporters cover companies or investment firms in which Bloomberg has interests, investments will be disclosed in disclaimers.

The New York Times Company has invested in some technology start-ups, lists them online and discloses the stakes in related coverage.

Mr. Wasserman questioned whether Bloomberg Beta’s access to technology executives might give Bloomberg News a competitive advantage in its reporting, and whether those executives might be willing to accept an investment from the firm, over others, with the hope that they might get more positive coverage in exchange.

Similar concerns were raised after Michael Arrington, the founder of TechCrunch, a popular technology blog now owned by AOL, announced the formation of Crunchfund, a venture capital firm. Mr. Arrington subsequently resigned from TechCrunch (though he recently surfaced as a columnist).

Such worries also came up when a former TechCrunch writer, Sarah Lacy, announced that she was beginning a new blog, called PandoDaily, to cover start-ups using money from prominent start-up founders including Peter Thiel of PayPal and  Tony Hsieh of Zappos and venture funds including Accel Partners’ Seed Fund and SV Angel, a prolific investor in early stage start-ups.

Roy Bahat, the head of Bloomberg Beta, said the firm was set up as a separate legal entity in part to anticipate such fears.

“If an entrepreneur wants Bloomberg Beta’s money because they think they’ll have a higher chance of getting covered by a Bloomberg journalist, then they shouldn’t take our money,” Mr. Bahat said on Tuesday. “We were set up to have confidentiality protections, and we will only share when appropriate.”

“The way Bloomberg reporters look at me should be the same way they look at any other outside investor or entrepreneur,” he added. Mr. Bahat said he was first approached by Tom Secunda, Bloomberg L.P.’s co-founder, and Daniel L. Doctoroff, its chief executive, who, he said, “wanted a window into the world of start-ups.”

Mr. Bahat, who previously ran IGN Entertainment, an online media company previously owned by News Corporation, quickly began putting together a team of investors. He brought on Karin Klein, head of Bloomberg’s new initiatives, to run Bloomberg Beta’s East Coast operations, and James Cham, a former principal at Trinity Ventures, a Sand Hill Road venture capital firm.

Together, the three have already invested in Nodejitsu, a provider of cloud computing; Errplane, which monitors app performance, and ProsperWorks, which makes employee management software. It has also invested in MkII Ventures, a small venture capital firm run by Ron Palmeri, an early investor in the technology behind Google Voice.

“This would have been crazy a decade ago,” Mr. Bahat said. “But as companies try to figure out how to buy innovation, this is one experiment in which a company is trying to figure out a new way.”

Article source: http://www.nytimes.com/2013/06/05/technology/bloomberg-begins-fund-to-invest-in-start-ups.html?partner=rss&emc=rss

Diller Gives Bleak Assessment of Newsweek

Barry Diller, whose IAC/InterActiveCorp decided last year to turn Newsweek into a digital-only publication, on Monday gave a stark assessment of its chances to succeed.

“I don’t have great expectations,” Mr. Diller told Bloomberg TV at the Milken Global Conference in Beverly Hills, Calif. “I wish I hadn’t bought Newsweek. It was a mistake.”

He prefaced his comment by trying to be hopeful, “We’ve got a very, very, very solid newsroom and we’ll see.”

IAC’s involvement with Newsweek began in 2010, when it entered a partnership with Sidney Harman, the stereo mogul, who bought Newsweek for $1 from the Washington Post Company. The merger late that year between Newsweek and The Daily Beast, the IAC Web site edited by Tina Brown, was seen as a bold stroke at the time, returning Ms. Brown to magazine editing.

Shortly thereafter, the 92-year-old Mr. Harman died. His family announced in July 2012 that it would no longer invest in the magazine and Web site.

Asked by Bloomberg to look back at the acquisition, Mr. Diller called the idea of printing a single magazine “a fool’s errand,” especially “if that magazine is a newsweekly.”

Newsweek struggled financially even after the merger. In October, the magazine announced that it would end its print edition and become a digital publication that would still be edited by Ms. Brown. Mr. Diller has been frank about becoming involved in Newsweek, saying at the time of the announcement, “It was a mistake to take this one on.”

Earlier in the interview with Bloomberg, Mr. Diller was pressed about his investment in Aereo, the start-up Internet service that streams material from broadcast stations without compensating them. “This is not done because oh, here’s a gold mine and I can plant my little flag on it,’’ he said. “I’m doing it because to me, the ability to get the world to utilize the Internet for all its information, its entertainment, its news, its video is a big shift.” He said he had the law on his side — two court decision so far have gone in his favor — and he wasn’t surprised that the networks were objecting: “No incumbent wants anyone in.”

Article source: http://www.nytimes.com/2013/04/30/business/media/diller-gives-bleak-assessment-of-newsweek.html?partner=rss&emc=rss

European Lawmakers to Vote on Tougher Carbon Measure

LONDON — Efforts to put some bite into Europe’s toothless market for carbon-emission permits face a crucial vote Tuesday in the European Parliament.

Lawmakers will decide whether to let the European Commission take steps that would probably raise the price of emissions credits. At the current prices, polluters have little incentive to clean up their smokestacks.

The vote “is incredibly important,” said Anthony Hobley, head of the climate change practice at the law firm Norton Rose in London. “If it doesn’t go through it would send a very negative signal.”

Carbon emission permits are essentially licenses to release greenhouse gases — the emissions that scientists have linked to global warming. Lawmakers are considering a measure aimed at raising the price of those licenses. Permits are priced in units that allow the holders to emit a ton of greenhouse gases. Because a big user of coal-burning power plants might release millions of tons of greenhouse gases a year, the higher the prices for the permits, the higher the cost for polluting.

But the prices of these allowances, which are traded by manufacturers and financial institutions, have plummeted to about €5 a ton, compared with €7 a ton a year ago and around €25 per ton in 2008.

The European Union introduced its cap and trade program, known as the E.U. Emissions Trading System, in 2005, hoping to force utilities and manufacturers to reduce emissions and put money into low carbon technologies. But prices have dropped to a point at which they are too low to have much influence on investment decisions.

“At the moment the carbon price does not give any signal for investment,” Hans Bünting, chief executive at RWE, one of Germany’s largest utilities, said in a telephone interview. European investment in clean energy fell 25 percent in the first quarter this year from the first quarter of 2012, according to Bloomberg New Energy Finance, a market research group.

Under the European Trading System, companies are allocated permits or can buy them at auction, with each permit allowing for the emission of one ton of carbon dioxide each year. Companies that exceeded their permitted amount would risk heavy fines.

As the system was originally planned, the number of permits available was supposed to be gradually reduced, forcing emissions downward. Permits were also intended to be increasingly sold by auction to polluters rather than granted as allocations.

But persistent economic problems have sharply reduced both power generation and manufacturing, leading to a glut of carbon allowances. Last year, for instance, ArcelorMittal, the Luxembourg-based company that is the world’s biggest steel maker, had 86.9 million tons worth of allowances, but wound up selling about 22 million tons worth for $220 million because it did not produce enough to need them.

The glut of allowances on the market, estimated at about two billion tons, has brought the carbon price down to a level so low that it does little to deter pollution.

With the price of carbon permits so low, European power companies have been burning coal, which is cheap but a big source of emissions, while mothballing gas-fired plants, which are much cleaner. The use of coal for power generation in Britain increased last year by 31.5 percent, while gas use dropped by about 32 percent, according to the government.

A main reason coal is inexpensive in Europe is because it is being spurned by U.S. utilities, which are cashing in on the boom in low-cost shale gas.

Stig Scholset, an analyst at Thomson Reuters Point Carbon, a market research group in Oslo, said that prices of €35 to €40 were needed to encourage electricity generators to switch from coal to gas. Europe is likely to meet its goal of reducing emissions by 20 percent from 1990 levels by 2020, but that will largely be a result of reduced economic activity.

Article source: http://www.nytimes.com/2013/04/16/business/global/european-lawmakers-to-vote-on-tougher-carbon-measure.html?partner=rss&emc=rss

Bloomberg’s TV Blitz on Guns Puts Swing State Senators on the Spot

The man behind the advertisement is not known for his kinship with the gun crowd: Mayor Michael R. Bloomberg, the nation’s fiercest advocate of restrictions on firearms since the December rampage at Sandy Hook Elementary School in Newtown, Conn.

Determined to persuade Congress to act in response to that shooting, Mr. Bloomberg on Monday will begin bankrolling a $12 million national advertising campaign that focuses on senators who he believes might be persuaded to support a pending package of federal regulations to curb gun violence. The ads, in 13 states, will blanket those senators’ districts during an Easter Congressional recess that is to be followed by debate over the legislation.

In a telling sign of how much the white-hot demands for gun control have been tempered by political reality, Mr. Bloomberg’s commercials make no mention of an assault weapons ban once sought by the White House and its allies, instead focusing on the more achievable goal of universal background checks.

“You don’t want to lose everything in the interest of getting the perfect,” Mr. Bloomberg said in an interview, acknowledging his disappointment over the apparent unlikelihood of an assault weapons ban, but insisting he is resolved to push the legislation through at a time when its prospects are uncertain.

The mayor’s advertising blitz, which will saturate television screens in states including Ohio, Pennsylvania, North Carolina and Arizona, represents by far the biggest escalation of Mr. Bloomberg’s attempts to become a one-man counterweight to the National Rifle Association in the political clash over guns.

“The N.R.A. has just had this field to itself,” Mr. Bloomberg said. “It’s the only one that’s been speaking out. It’s time for another voice.”

After months of wrangling, the current package of Senate legislation would expand background checks for gun buyers, increase penalties for people who buy firearms for those barred from owning them and would give law enforcement new tools to combat illegal gun trafficking, a longtime goal of Mr. Bloomberg’s.

Given the mayor’s role in contributing to the ouster of an N.R.A.-backed candidate in an Illinois Congressional race a few weeks ago, his push carries an unmistakable threat to those who vote against the bills.

The ads are directed at Democratic and Republican senators in both swing states and partisan precincts. Among Mr. Bloomberg’s targets are some of the Senate’s most vulnerable Democrats, including Kay R. Hagan of North Carolina, Mary L. Landrieu of Louisiana and Mark L. Pryor of Arkansas, for whom the gun issue is particularly problematic because they will need Republican votes to win re-election.

Some of the senators, such as Dean Heller of Nevada, Rob Portman of Ohio and Patrick J. Toomey of Pennsylvania, all Republicans, represent swing states where voters are divided over guns. Other Republicans would seem to be out of reach for Mr. Bloomberg: Saxby Chambliss and Johnny Isakson of Georgia, Daniel Coats of Indiana and Jeff Flake of Arizona.

In each case, the commercials urge support for the measure requiring background checks for nearly all firearms purchases, not just those in gun stores, the most debated element of the legislation and a coveted goal of gun control advocates.

Mr. Bloomberg has singled out Mr. Flake, who already voted against the expansion of background checks in the Senate Judiciary Committee, by producing a special, scolding commercial aimed at Arizona. “Flake’s vote,” the ad declares, equals “no background checks for dangerous criminals.”

The mayor, who has spent tens of millions of dollars to support his favored candidates, intends to wield his “super PAC” to influence the midterm Congressional elections next year and beyond. He said he would prefer “candidates who will stop people from getting killed.”

Jennifer Steinhauer contributed reporting.

Article source: http://www.nytimes.com/2013/03/24/nyregion/bloombergs-tv-blitz-on-guns-puts-swing-state-senators-on-the-spot.html?partner=rss&emc=rss

Bits Blog: Facebook Tops One Billion Active Users

Facebook said Thursday that it had passed one billion active users.Craig Ruttle/Associated Press Facebook said Thursday that it had passed one billion active users.

10:28 a.m. | Updated Adding information on user activity and demographics.

A million users isn’t cool. You know what’s cool? A billion users.

Facebook on Thursday announced that it had topped one billion active users, meaning users who visited the site within a month. Although a few companies can claim to have had more than a billion customers, Facebook is the first social network to hit that number.

Mark Zuckerberg, Facebook’s chief executive and founder, made the announcement in a blog post on the company’s Web site.

“If you’re reading this: thank you for giving me and my little team the honor of serving you,” Mr. Zuckerberg wrote. “Helping a billion people connect is amazing, humbling and by far the thing I am most proud of in my life.”

In an interview with Bloomberg Businessweek, Mr. Zuckerberg said the company celebrated the milestone by watching a countdown clock in its offices.

“Well, just everyone came together and counted down,” he told the magazine. “Then we all went back to work. We have this ethos where we want to be a culture of builders, right?”

Facebook shared some information on what its billion users have been doing on the site. People have used the “Like” button more than 1.1 trillion times since it was added in February 2009. There have been more than 140 billion friend connections. And since the fall of 2005, nearly 220 billion photos have been uploaded to the site. Facebook also said it has 600 million mobile users.

For advertisers, those numbers might seem less important than the median age of Facebook’s one billion users who joined in the past week: 22. That is a prime market for advertisers and marketers. And those users are getting younger. Facebook said in 2008 that the median age was 26.

The Facebook story has been one for the ages: A Harvard University dropout who started a multibillion-dollar company in his dorm room that eventually became the largest social network on the planet. But the story has also had its share of troubles too.

Mr. Zuckerberg has been dragged through legal suits over the ownership and idea of Facebook. The company has also dealt with dozens of privacy issues and run-ins with the Federal Trade Commission.

One billion users might be more than just a nice badge to stick on the fridge. After Facebook’s lackluster initial public offering, showing that the company is still growing might help to lift Wall Street’s confidence in the company.

Mr. Zuckerberg concluded his announcement by saying, “I am committed to working every day to make Facebook better for you, and hopefully together one day we will be able to connect the rest of the world too.”

That leaves only six billion to go.

Article source: http://bits.blogs.nytimes.com/2012/10/04/facebook-passes-1-billion-active-users/?partner=rss&emc=rss

Bits Blog: Facebook Tops 1 Billion Active Users

Facebook said Thursday that it had passed one billion active users.Craig Ruttle/Associated Press Facebook said Thursday that it had passed one billion active users.

10:28 a.m. | Updated Adding information on user activity and demographics.

A million users isn’t cool. You know what’s cool? A billion users.

Facebook on Thursday announced that it had topped one billion active users, meaning users who visited the site within a month. Although a few companies can claim to have had more than a billion customers, Facebook is the first social network to hit that number.

Mark Zuckerberg, Facebook’s chief executive and founder, made the announcement in a blog post on the company’s Web site.

“If you’re reading this: thank you for giving me and my little team the honor of serving you,” Mr. Zuckerberg wrote. “Helping a billion people connect is amazing, humbling and by far the thing I am most proud of in my life.”

In an interview with Bloomberg Businessweek, Mr. Zuckerberg said the company celebrated the milestone by watching a countdown clock in its offices.

“Well, just everyone came together and counted down,” he told the magazine. “Then we all went back to work. We have this ethos where we want to be a culture of builders, right?”

Facebook shared some information on what its billion users have been doing on the site. People have used the “Like” button more than 1.1 trillion times since it was added in February 2009. There have been more than 140 billion friend connections. And since the fall of 2005, nearly 220 billion photos have been uploaded to the site. Facebook also said it has 600 million mobile users.

For advertisers, those numbers might seem less important than the median age of Facebook’s one billion users who joined in the past week: 22. That is a prime market for advertisers and marketers. And those users are getting younger. Facebook said in 2008 that the median age was 26.

The Facebook story has been one for the ages: A Harvard University dropout who started a multibillion-dollar company in his dorm room that eventually became the largest social network on the planet. But the story has also had its share of troubles too.

Mr. Zuckerberg has been dragged through legal suits over the ownership and idea of Facebook. The company has also dealt with dozens of privacy issues and run-ins with the Federal Trade Commission.

One billion users might be more than just a nice badge to stick on the fridge. After Facebook’s lackluster initial public offering, showing that the company is still growing might help to lift Wall Street’s confidence in the company.

Mr. Zuckerberg concluded his announcement by saying, “I am committed to working every day to make Facebook better for you, and hopefully together one day we will be able to connect the rest of the world too.”

That leaves only six billion to go.

Article source: http://bits.blogs.nytimes.com/2012/10/04/facebook-passes-1-billion-active-users/?partner=rss&emc=rss

Lockouts, Once Rare, Put Workers on the Defensive

From the Cooper Tire factory in Findlay, Ohio, to a country club in Southern California and sugar beet processing plants in North Dakota, employers are turning to lockouts to press their unionized workers to grant concessions after contract negotiations deadlock. Even the New York City Opera locked out its orchestra and singers for more than a week before settling the dispute last Wednesday.

Many Americans know about the highly publicized lockouts in professional sports — like last year’s 130-day lockout by the National Football League and the 161-day lockout by the National Basketball Association — but lockouts, once a rarity, have been used in less visible industries as well.

“This is a sign of increased employer militancy,” said Gary Chaison, a professor of industrial relations at Clark University. “Lockouts were once so rare they were almost unheard of. Now, not only are employers increasingly on the offensive and trying to call the shots in bargaining, but they’re backing that up with action — in the form of lockouts.”

The number of strikes has declined to just one-sixth the annual level of two decades ago. That is largely because labor unions’ ranks have declined and because many workers worry that if they strike they will lose pay and might also lose their jobs to permanent replacement workers.

Lockouts, on the other hand, have grown to represent a record percentage of the nation’s work stoppages, according to Bloomberg BNA, a Bloomberg subsidiary that provides information to lawyers and labor relations experts. Last year, at least 17 employers imposed lockouts, telling their workers not to show up until they were willing to accept management’s contract offer.

Perhaps nowhere is the battle more pitched than at American Crystal Sugar, the nation’s largest sugar beet processor.

Last summer, contract negotiations bogged down, with the company insisting that its workers agree to higher payments for health coverage, more outsourcing and many other concessions. Shortly after the 1,300 unionized workers — spread among five plants in North Dakota, Minnesota and Iowa — voted overwhelmingly to reject those demands, the company locked them out and hired replacement workers.

That was on Aug. 1, more than five months ago, and since then the workers and their families have been scrounging to make ends meet. Some face foreclosure and utility disconnection notices.

American Crystal has hired more than 900 replacement workers to keep its plants running. Federal law allows employers to hire such workers during a lockout, although they cannot permanently replace regular employees. Employers can pay the replacements lower wages, although as is the case with American Crystal, the companies sometimes need to offer higher wages and help pay for housing to attract replacements.

With many private-sector labor unions growing smaller and weaker, and with public-sector unions under attack in numerous states, some employers think the time is ideal to use lockouts, a forceful approach they were once reluctant to use.

Many employers, though, say they have little choice.

Robert Batterman, a labor lawyer who represents employers, said whether it was the N.F.L. or Sotheby’s, which locked out 43 art handlers in Manhattan last July, “the pendulum has swung too far toward the employees, and the employers are looking in these tight economic times to get givebacks.”

“Employers,” he continued, “are using lockouts because unions are reluctant to do what the employers consider reasonable in terms of compromising. Employers are looking to reset their collective bargaining relations.”

After being out of work since Aug. 1, Paul Woinarowicz, a warehouse foreman employed at American Crystal Sugar for 34 years, sees another rationale for lockouts.

Article source: http://feeds.nytimes.com/click.phdo?i=9225c0e919095efcb5a73ccbb7c63acd

DealBook: Bloomberg Suffers, Too, in Collapse of MF Global

Mac Budd, left, and Rich Bryant watched markets on Bloomberg terminals for MF Global before the firm's collapse. Bloomberg lost nearly $1 million a month in revenue when MF Global failed.Michael Falco for The New York TimesMac Budd, left, and Rich Bryant watched markets on Bloomberg terminals for MF Global before the firm’s collapse. Bloomberg lost nearly $1 million a month in revenue when MF Global failed.

The collapse of MF Global has wreaked havoc on farmers, ranchers and other investors who were clients of the brokerage firm, prompting a loud outcry over the disappearance of $1.2 billion in customer cash.

But they are not the only ones to suffer. The financial information giant Bloomberg L.P. lost about 600 subscriptions to its computer terminals — which translates to nearly $1 million in monthly revenue — after MF Global filed for bankruptcy on Oct. 31. The sudden loss of business caused Bloomberg employees to miss their target sales by 12 percent in 2011, people briefed on the matter said, a shortfall that could take a toll on the firm’s bonuses.

While $1 million sounds like a rounding error for Bloomberg, which generates nearly $7 billion in revenue a year, the hit underscores the symbiotic relationship between Wall Street and Bloomberg.

The terminals, with their orange type on black screens that spew real-time market quotes, news and data ranging from sports scores and horoscopes to hedge fund holdings and credit-default swaps, are ubiquitous on Wall Street. Bloomberg, which competes with Reuters, FactSet Research System and News Corporation’s Dow Jones, has more than 314,000 terminal subscriptions worldwide. The income from those subscriptions accounts for about 85 percent of the company’s revenue; each terminal subscription costs about $20,000 a year.

That income stream has enabled Bloomberg — which is still controlled by its founder, Mayor Michael R. Bloomberg of New York — to pay for a huge global news operation of nearly 2,300 journalists who produce some 5,000 reports a day.

Given its reliance on subscriptions, Bloomberg is susceptible to turbulence on Wall Street. Terminal subscriptions first declined during the financial crisis. Lehman Brothers, which collapsed in September 2008, alone had about 3,500 subscriptions.

Yet the damage was ultimately tempered. Some Lehman employees started hedge funds, which required their own terminals. When Barclays bought Lehman’s American operations, the British bank expanded its terminal outlay to accommodate a wave of new employees.

MF Global was a dream client for Bloomberg. For a modest-size brokerage firm, it had a surprisingly large number of subscriptions, according to former employees. Of its 2,500 employees, nearly one-third had subscriptions. (MF Global still has about 200 subscriptions as it continues to use terminals in bankruptcy.)

Wall Street firms often provide machines for only their traders, bankers and investment executives. At MF Global, however, terminals were distributed more broadly — for instance, a human resources employee had one, according to a former employee who spoke on the condition of anonymity.

Such costly expenses were being reined in before the firm’s collapse. Bradley Abelow, the firm’s chief operating officer, had ordered that some terminals be returned, the former employee said.

The close financial ties between the two companies were reflected, at least initially, in bankruptcy court. Bloomberg Finance was listed as a creditor in MF Global’s first bankruptcy filing on Oct. 31, which said it was owed roughly $276,000 for an undisclosed reason. In MF Global’s most recent filing this month, however, the company is no longer listed as a creditor.

“We are still a creditor of MF Global,” a representative for Bloomberg said Thursday, adding that she did not know why the company was omitted.

“Bloomberg had a good year in terms of sales of our core terminal product in a difficult market,” she said, adding that subscriptions over all rose by 14,000.

Bloomberg is not the only one touched by the bankruptcy of MF Global. Others that did business with the firm, as well as Wall Street lobbying firms and trade groups, like the Securities Industry and Financial Markets Association, that received regular fees, have been affected.

But those losses pale in comparison to many MF Global customers, who are out an estimated $1.2 billion that was supposed to be protected. As MF Global began to spiral downward, the firm raided client funds to meet its own obligations.

The Commodity Futures Trading Commission is leading the investigation into MF Global, while the Federal Bureau of Investigation and the United States attorney’s offices in New York and Chicago are exploring potential criminal wrongdoing.

Two months after it was found to be missing, no customer money has been recovered, though investigators have tracked where some of it went. About $200 million was transferred to JPMorgan Chase on the last business day before MF Global filed for bankruptcy, according to people close to the investigation. In addition, as the company was unwinding its balance sheet, customer money was funneled through a clearinghouse, the Depository Trust and Clearing Corporation, the people said.

James Giddens, the court-appointed trustee for MF Global.Mark Lennihan/Associated PressJames Giddens, the court-appointed trustee for MF Global.

The delay has outraged customers, some of whom need the cash to help make ends meet.

On Thursday, the trustee overseeing the return of customer money held a meeting to address the concerns of MF Global clients. More than 100 people were at the downtown Manhattan Marriott to hear about the state of the investigation from the trustee, James W. Giddens.

Mr. Giddens stressed that the inquiry was complex and meant combing through more than 100 terabytes of data — or the equivalent of 950 miles of pages stacked together.

But the clients seemed unimpressed. “It was a waste of time coming here,” Eric Brown, a broker affiliated with MF Global, said after the meeting.

Others looking for the trustee to take action against JPMorgan and Jon S. Corzine, MF Global’s former chief executive who was also the governor of New Jersey, found little satisfaction from the meeting. “Customers haven’t been made whole, and they’re in the toilet,” said one customer, Peter Suarez. “This is a joke.”

Michael J. de la Merced contributed reporting.

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