Comcast would pay $16 million in proposed Internet settlement

One million Comcast Corp. high-speed Internet customers could be eligible for rebates under a $16 million proposed class-action settlement stemming from the cable company's disruption of peer-to-peer Web traffic. The rebates could be $16 per customer.

The settlement, disclosed in federal court in Philadelphia, still needs final approval by U.S. District Judge Legrome D. Davis. A hearing on the settlement is scheduled for June. Six individual suits were consolidated into one case in Philadelphia, court documents show. Plaintiffs' attorneys could claim up to $3 million from the $16 million in fees.

Comcast did not admit wrongdoing, and the company believes its Internet practices were correct - although Comcast dropped them under political pressure in 2008.

The number of 1 million Comcast customers is an estimate contained in court documents. Comcast Internet customers will have to say they used peer-to-peer software programs between 2006 and 2008 to collect the rebates or refunds. The most popular of these software programs was BitTorrent; others were Ares, eDonkey, FastTrack, and Gnutella.

Mark Todzo, a lawyer with the Lexington Law Group in San Francisco who represented plaintiff Jon Hart, said yesterday that he was pleased with the settlement. Hart, a California resident and Comcast Internet customer, contacted Todzo's law firm after he could not share video of Grateful Dead concerts, Todzo said.

Comcast said it disrupted the traffic of some heavy Internet users - so-called Internet hogs - to maintain speeds for millions of others. The Philadelphia cable giant, the nation's largest provider of residential Internet, called the practice "reasonable network management." But critics claimed that Comcast viewed peer-to-peer online video as competition for cable TV and was making the peer-to-peer software difficult to use.

In August 2008, the Federal Communications Commission, then with Kevin Martin as its chairman, ordered Comcast to give the agency more details of its Internet practices, submit a plan on how it intended to stop interfering with Internet traffic, and disclose the new Internet management practices to customers. No fine was levied.

Comcast has appealed the FCC enforcement action to a federal court. A hearing on the case is scheduled for Jan. 8. Comcast said the proposed $16 million settlement would end the class-action part of the controversy.

Claim Your Free Book "Make Real Money On the Internet"

Lowe's Companies Inc. (LOW) President & COO Larry D Stone sells 316,912 Shares

President & COO of Lowe's Companies Inc. (LOW) Larry D Stone sells 316,912 shares of LOW on 12/15/2009 at an average price of $24 a share.

Lowe's Companies Inc. is a retailer of home improvement products in the world, with specific emphasis on retail do-it-yourself and commercial business customers. Lowe's specializes in offering products and services for home improvement, home decor, home maintenance, home repair and remodeling and maintenance of commercial buildings. Lowe's principal customer groups are do-it-yourself retail customers and commercial business customers. Lowe's Companies Inc. has a market cap of $34.99 billion; its shares were traded at around $23.69 with a P/E ratio of 19.7 and P/S ratio of 0.7. The dividend yield of Lowe's Companies Inc. stocks is 1.5%. Lowe's Companies Inc. had an annual average earning growth of 21.4% over the past 10 years. GuruFocus rated Lowe's Companies Inc. the business predictability rank of 3.5-star.

LOW is in the portfolios of Wallace Weitz of Weitz Wallace R & Co, Richard Snow of Snow Capital Management, L.P., Robert Olstein of Olstein Financial Alert Fund, First Pacific Advisors of First Pacific Advisors, LLC, George Soros of Soros Fund Management LLC, David Dreman of Dreman Value Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Richard Pzena of Pzena Investment Management LLC, Tom Gayner of Markel Gayner Asset Management Corp, Jeremy Grantham of GMO LLC, Warren Buffett of Berkshire Hathaway, PRIMECAP Management, Paul Tudor Jones of The Tudor Group, Charles Brandes of Brandes Investment, Donald Yacktman of Yacktman Asset Management Co., John Buckingham of AL FRANK ASSET MANAGEMENT INC, Kenneth Fisher of Fisher Asset Management, LLC.

Claim Your Free Book "Make Real Money On the Internet"

IT Infrastructure: Iron Mountain Predicts 7 Records-Management Trends for 2010

Iron Mountain's track record of document and data security is hard to beat. The company has been building its storage safety reputation since 1951, and has been known for two generations for carting away physical and digital records on tapes and storing them in underground vaults. In recent years it has established the Iron Mountain Digital division, which supplies storage management software such as the Connected Backup for PC and LiveVault Server Backup packages, as well as online storage. In 2007, Iron Mountain acquired RMS Services-USA, a $27 million records management company and a major provider of file-room outsourcing services for hospitals.


Claim Your Free Book "Make real Money On the Internet"

Only the Strongest Retailers Will Survive in 2010 as U.S. Consumers Continue to Battle Back

The early returns on the 2009 holiday shopping season show a minor gain over last year's abysmal retail sales, and next year will affirm that retailers are successfully adapting to a consumer environment that's very different from years past.

However, 2010 will be difficult for retailers as they contend with high unemployment, tight credit, and aggressive competition.

Retail sales gained 3.6% year-on-year from Nov. 1 through Dec. 24, SpendingPulse, a unit of MasterCard Advisors (NYSE: MA) said earlier this week. But an extra day between Thanksgiving and Christmas this year may have skewed the data anywhere from 2% to 4%, SpendingPulse said. Sales in the same period last year declined 2.3% as consumers reeled from the financial meltdown that occurred in the fall.

"The latest holiday shopping season wasn't a rip-roaring success, but at least it met or slightly exceeded expectations," John Lonski, chief economist of Moody's Capital Markets Research Group (NYSE: MCO) told The Associated Press. "Consumer spending is indeed in a recovery mode, which brightens prospects for 2010."

Claim Your Free Book "Make Real Money On The Internet"

Four People Arrested For Home Depot Robbery

Two men and two women were arrested in connection with a robbery at the Home Depot near Goodman Road and Interstate 55.

It happened about 7:15 p.m. Police say there were a handful of customers inside at the time.

Horn Lake Police say the two male suspects went to the back of the store and flashed a gun at a manager and demanded money. They also pushed that manager to the ground. He was taken to the hospital for minor injuries.

The suspects took off with an undisclosed amount of cash. They sped away in a black Volvo, but didn't make it very far. Police say they got caught up in traffic, not far from the store.

They arrested two females inside the vehicle as well as a male who tried to run away. The second male suspect was caught hiding in a pick-up truck at a nearby hotel.

Police are getting conflicting reports, but they say there may be a fifth suspect on the run.

Claim Your Free Book "Make Real Money On The Internet"

NRG Energy Commences Commercial Operations at Langford Wind Power Project

NRG Energy has started its commercial operations at the Langford Wind Power Project. The 150-MW wind farm project is located 25 miles south of San Angelo, Texas. Padoma Wind Power, a subsidiary unit of NRG energy has developed the project that possesses the ability to supply clean power to more than 10,000 homes in Texas.

David Crane, President and CEO of NRG Energy, remarked that the company’s renewable portfolio will be expanded by the Langford Wind Power Project providing the company more emission-free generation capacity in Texas. This emission-free generation capacity according to Crane will bring about reductions in the total intensity of greenhouse gas of NRG’s fleet and it will enables the company to supply zero-emission energy to Reliant Energy.

More than 525,000 MW hours of wind energy are expected to be generated every year by the project’s 100 General Electric 1.5 MW turbine generators. This generated wind energy will be sold into the ERCOT system. This project had provided 200 jobs during construction. It will provide 10 full-time jobs during its operation.

Jan Paulin, Chief Executive and President of Padoma Wind Power, remarked that this project has invested a lot in the community through creation of jobs, land lease payments, investments in local materials and services.

NRG Energy had commenced production in two wind farms in the year 2008. The first wind farm is Sherbino I that is owned and operated in collaboration with BP Wind Energy. Sherbino I is a 150-MW wind project near Fort Stockton, Texas. Elbow Creek is the second wind farm owned by NRG Energy and Big Spring. Elbow Creek is a 122-MW wind farm near Big Spring, Texas. NRG owns a wind generating capacity of 350 MW in Texas along with Langford.

Langford is part of NRG’s repowering program to develop efficient and clean energy sources in order to meet the increasing energy demands. The clean energy sources include solar thermal and PV fields, nuclear power generation facilities and land-based and offshore wind farms.

Claim your Free Book "Make Real Money On The Internet"

GlaxoSmithKline receives positive EU opinion for Eltrombopag

GlaxoSmithKline has revealed that the European Medicines Agency's (EMA's) Committee for Medicinal Products for Human Use (CHMP) has issued a positive opinion for Revolade (eltrombopag) ? a drug intended to treat reduced platelet count, or thrombocytopenia, in adults with the blood disorder chronic immune thrombocytopenic purpura (ITP).

Marketing authorisation has been granted by the CHMP for eltrombopag in the EU for the treatment of ITP in adults who have had their spleen removed and later fail to respond to corticosteroids and immunoglobulins therapies.

The oral compound may also be considered as a second-line therapy for adult patients where surgery to remove their spleen is contraindicated, the firm added.

Paolo Paoletti, senior vice-president and global head of oncology research and development at GlaxoSmithKline, commented: "Eltrombopag is an innovative treatment for thrombocytopenia in patients with chronic ITP. This once-a-day tablet is able to stimulate platelet production and reduce the risk of bleeding in a difficult-to-treat disease."

Earlier this week, GlaxoSmithKline announced that it will work alongside NanoBio to develop the latter firm's over-the-counter cold sore treatment NB-001.

Claim Your Free Book "Make Real Money On the Internet"

Morgan Indicted for CDO Fraud

Morgan Stanley (MS) was reportedly accused by the Employees’ Retirement System of the Virgin Islands of swindling its investors by promoting $1.2 billion of risky low-quality mortgage-related notes in 2007 that it had already perceived to be non-profitable. The lawsuit filed on Dec 24, 2009 in Manhattan Federal Court stated that Morgan Stanley has deliberately raised the rating of the mortgage notes to fulfill the collateralized-debt obligation (CDO) known as Libertas.

According to the claim made by the Virgin Islands pension fund, Morgan marketed the fund on a CDO comprising subprime mortagages, which are known to have a larger-than-average risk of defaulting in the market. For this, the company teamed up with credit rating agencies such as Moody's Investors Service, a division of Moody’s Corp. (MCO) and Standard & Poor's (S&P), a division of McGraw-Hill (MHP) to obtain "triple-A" ratings for debt-securities marketed in 2007. The low-quality securities issued by subprime lenders included New Century Financial Corp., which quickly went bankrupt, and Option One Mortgage Corp, then owned by H&R Block Inc. (HRB).

CDO typically repackage bonds and other assets into new securities. According to the allegation, the Libertas CDO entered into credit-default swaps that referenced mortgage-backed securities without actually buying these mortgage-backed securities. Credit-default swaps are financial instruments that function as insurance for bondholders. As the credit-protection buyer, Morgan Stanley was recklessly shorting the securities in response to a decline in their market value.

It appears that the gradual market recovery may now unveil hidden deeds that the companies may have used in the past to paint an overall favorable picture of their business operations. The Libertas CDO matter has highlighted the arguably reckless strategies that investment banks might adopt. This is not the first instance; many banks have reportedly faced similar allegations of misleading investors by inflating or disguising securities that are actually tied to risky subprime mortgages.

We believe that issues like these could severely shatter investors’ confidence as a giant of the ilk of Morgan Stanley is believed to be well-positioned to realize the full benefits of its strategic cost-balancing initiatives and attractive business mix. However, if the CDO charges are proved justified, Morgan Stanley will have to initiate damage control. This could raise a furor in the company’s financials and its market reputation.

Claim Your Free Book "Make real Money On the Internet"

Wells Fargo Refinance Mortgage Rates – Time to Refinance is 2010?

Wells Fargo refinance mortgage rates have been on quite the roller coaster ride over the last two months. With this being the case many people are wondering if the time to refinance is in 2010. Over the last two month we have seen the 30 year fixed mortgage rate go from 4.49% to over 5.25%. This drastic increase comes as the 10 year treasury rate yield has moved much higher.

Since the beginning of December we have seen the 10 year treasury rate yield move from 3.2% up to 3.85%. The strong move higher is one of the main reasons that we have seen mortgage rates move above 5%. If you are hoping to refinance your home loan under 5% in 2010 then you better get it done early. If you continue to wait you could be looking at 6% or 7% interest rates before you know it.

The Federal Reserve Bank plans to stop buying mortgage-backed securities at the end of March of 2010. Many analysts have predicted that an increase of one full percentage point is likely to happen after mortgage-backed securities are not being purchased by the Fed. This may come on the heels of an increase in mortgage rates due to ten-year yields moving higher as well.

Wells Fargo has positioned themselves very well for low interest rate environment but no one knows what will happen as mortgage interest rates increase. There is no doubt that many of the big banks have benefited from this low interest environment because they have gained customers and have been allowed to borrow money at extremely low rates.

Wells Fargo continues to advertise mortgage rates around 5% but this may change very quickly. If you’ve been thinking about refinancing or locking in at a low mortgage interest rate then it might be time to get your mortgage application submitted now. If you continue to wait you may lose the opportunity at these near all-time low mortgage interest rates.

Work From Home: Just pay $1 for one money coaching from world's #1 internet marketeer, Stephen Pierce

Cadbury Gets Three-Day Extension to Post Results Amid Kraft Bid

Cadbury Plc, fighting a 10.7 billion-pound ($17 billion) hostile offer from Kraft Foods Inc., got a three-day extension from the U.K. takeover panel to publish material new information. Cadbury’s deadline to disclose “detailed estimated trading results” for 2009 is no later than Jan. 15, the takeover panel said in a Regulatory News Service statement today. ‪

“We note the decision of the Takeover Panel and are pleased that our shareholders will be given the opportunity to review the most up-to-date information available on our trading performance as they evaluate the Kraft offer,” Uxbridge, England-based Cadbury said in an e-mailed statement today.

‪ Shareholders of Cadbury, the maker of Dairy Milk chocolate, have until Jan. 5 to accept Kraft’s Dec. 4 offer, which currently values Cadbury at 748 pence a share. Kraft has until Jan. 19, or 46 days after the initial offer was made, to make a revised bid, the takeover panel repeated today. Kraft, the world’s second-largest foodmaker, has said its offer represents the best value to Cadbury, which also makes Trident chewing gum. Kraft, based in Northfield, Illinois, makes Ritz crackers and Oreo cookies.


Work From Home: Just pay $1 for one month coaching from world's #1 internet marketeer, Stephen Pierce

Johnson & Johnson expands voluntary recall of Tylenol Arthritis Pain caplets

Johnson & Johnson, the makers of Tylenol Arthritis Pain caplets, is expanding a voluntary recall of the product because of consumer complaints of a strange, moldy smell that has caused nausea and other ailments.

The health care company, based in New Brunswick, N.J., is now recalling all 100-count bottles of the arthritis caplets with the red E-Z Open Cap. Last month, Johnson & Johnson recalled five lots of the pain medicine after consumers complained of a mildew-like odor from the pills that produced nausea, vomiting, stomach pain and diarrhea.

The pills’ musty odor comes from trace amounts of a chemical known as 2, 4, 6-tribromoanisole, according to the company, which is believed to be from the breakdown of another chemical in wooden pallets used to transport and store the drugs.

To date, the health complaints have been “temporary and nonserious,” according to a press release by McNeil Consumer Health Care, the division of J&J that sells Tylenol, although the health effects of the chemical have not been studied.Johnson & Johnson will move production of the caplets to a new facility and return the product to the market by January.

Consumers are advised to stop using the product and call the company at (888) 222-6036 for a refund.

In September, Johnson & Johnson voluntarily recalled certain lots of Children's and Infants' Tylenol as a "precautionary measure" over concerns of a potential manufacturing problem.

Work From Home: Just pay $1 for one month coaching from world's #1 internet marketeer, Stephen Pierce

Conveyor problems halt coal shipments from Norfolk Southern terminal

Two mishaps at Norfolk Southern Corp.'s Lamberts Point Coal Terminal in Norfolk brought coal shipments to a halt over the weekend.

On Saturday, an overheated bearing ignited a fire on a couple of rollers on the coal conveyors, said Robin Chapman, a spokesman for the Norfolk-based railroad. The fire melted a hole in the rubber conveyor belt, shutting down that ship loader. Then Sunday, the conveyor belt on the second coal loader ripped apart, rendering that unit useless, Chapman said.

The company is repairing both conveyors and expects to restore service at both loaders by Thursday, he said. The mishaps came a week after winter storms in Kentucky, West Virginia and western Virginia slowed delivery of coal to the Lamberts Point terminal.

Norfolk Southern sent out a notice Tuesday morning that "force majeure" was still in effect on coal shipments, referring to a contractual clause that exempts the company from liability if weather or other natural events prevent delivery of coal.

Work From Home: Learn from world's #1 internet marketeer for one month for just $1

WellPoint To Hold Conference Call and Webcast To Discuss Fourth Quarter Results on January 27, 2010

WellPoint, Inc. (NYSE: WLP) will release fourth quarter 2009 financial results on January 27, 2010, at 6:00 a.m. Eastern Standard Time ("EST"). Management will review these results and its outlook during a conference call at 8:30 a.m. EST that same morning. The conference call should be accessed at least 15 minutes prior to its start with the following numbers:

         888-423-3268 (Domestic)        800-475-6701 (Domestic Replay)
        651-291-5254 (International)   320-365-3844 (International Replay)

An access code is not required for the January 27, 2010, conference call. The access code for the replay is 123543. The replay will be available from 1:45 p.m. EST on January 27, 2010, until the end of the day on February 10, 2010. The call will also be available through a live webcast at www.wellpoint.com under "Investor Info." A webcast replay will be available following the call.

About WellPoint, Inc.

WellPoint works to simplify the connection between Health, Care and Value. We help to improve the health of our communities, deliver better care to members, and provide greater value to our customers and shareholders. WellPoint is the nation's largest health benefits company, with approximately 34 million members in its affiliated health plans. As an independent licensee of the Blue Cross and Blue Shield Association, WellPoint serves members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri (excluding 30 counties in the Kansas City area), Nevada, New Hampshire, New York (as the Blue Cross Blue Shield licensee in 10 New York City metropolitan and surrounding counties and as the Blue Cross or Blue Cross Blue Shield licensee in selected upstate counties only), Ohio, Virginia (excluding the Northern Virginia suburbs of Washington, D.C.), and Wisconsin. In a majority of these service areas, WellPoint does business as Anthem Blue Cross, Anthem Blue Cross Blue Shield or Empire Blue Cross Blue Shield (in the New York service areas). WellPoint also serves customers throughout the country as UniCare. Additional information about WellPoint is available at www.wellpoint.com.

SOURCE WellPoint, Inc.

Morgan Stanley sued over failed $1.2 billion CDO

Morgan Stanley (MS.N) has been sued by a Virgin Islands pension fund that accused the Wall
Street bank of defrauding investors by marketing $1.2 billion of risky mortgage-related notes that it expected to fail.

The lawsuit filed Dec. 24 in Manhattan federal court said Morgan Stanley collaborated with credit rating agencies Moody's Investors Service and Standard & Poor's to obtain "triple-A" ratings for notes marketed in 2007 as part of a collateralized debt obligation (CDO) known as Libertas.

According to the complaint, the CDO was backed by low-quality assets, including securities issued by subprime lenders New Century Financial Corp, which quickly went bankrupt, and Option One Mortgage Corp, then owned by H&R Block Inc (HRB.N).

The complaint alleged Morgan Stanley knew the CDO's assets were far riskier than the ratings suggested, but was "highly motivated to defraud investors" with pristine ratings because it was simultaneously "shorting" almost all the assets. This was a bet that their value would fall, which they did in 2008.

"Morgan Stanley was betting the entire investment it was promoting would fail," according to the complaint, which was made available on Tuesday. "The firm achieved its objective."

Alyson Barnes, a Morgan Stanley spokeswoman, declined to comment. S&P spokesman Frank Briamonte had no immediate comment. Moody's did not immediately return a call seeking comment. Moody's, a unit of Moody's Corp (MCO.N), and S&P, a unit of McGraw-Hill Cos (MHP.N), were not named as defendants.

Many banks face lawsuits from investors who say they were misled into investing in securities they believed were safe but which were in fact tied to risky subprime mortgages.

Morgan Stanley is also a defendant in a closely watched case in the same Manhattan court that concerns whether rating agencies deserve free speech protection for their opinions.

The Dec. 24 complaint said Morgan Stanley knew securities in the Libertas CDO were suffering a dramatic rise in delinquencies, but provided a misleading "risk factor" in a prospectus that rising delinquencies "may" hurt values in the $1 trillion residential mortgage-backed securities market.

It called this representation "analogous to Captain Smith's telling passengers of the Titanic that some ships have 'recently sunk' in the Atlantic and therefore 'our ship may sink,' without mentioning the facts that his ship struck an iceberg, had a hole in it, and was filling with water."

The lawsuit seeks class-action status, and also seeks compensatory and punitive damages, among other remedies. It was filed by Coughlin Stoia Geller Rudman & Robbins LLP, a law firm specializing in securities class-action lawsuits.

NRG Energy To Provide Energy Services To New University Medical Center Of Princeton

NRG Energy, Inc., ( its subsidiary NRG Thermal signed a contract to provide comprehensive, high-efficiency energy services to the new University Medical Center of Princeton at Plainsboro, which is expected to open by the end of 2011.

Under the 13-year contract, NRG will provide services from its Combined Heat and Power Plus program that integrates conventional, proven energy sources and leverages them with leading efficiency and environmental technologies.

Costco Wholesale Corp. (COST) Chairman of the Board Jeffrey H Brotman sells 50,000 Shares

Chairman of the Board of Costco Wholesale Corp. (COST) Jeffrey H Brotman sells 50,000 shares of COST on 12/28/2009 at an average price of $60.54 a share.

Costco Wholesale Corp. operates membership warehouses based on the concept that offering members very low prices on a limited selection of nationally branded and selected private label products in a wide range of merchandise categories will produce high sales volumes and rapid inventory turnover. This rapid inventory turnover enables Costco to operate profitably at significantly lower gross margins than traditional wholesalers, discount retailers and supermarkets. Costco Wholesale Corp. has a market cap of $26.4 billion; its shares were traded at around $60.56 with a P/E ratio of 24.2 and P/S ratio of 0.4. The dividend yield of Costco Wholesale Corp. stocks is 1.2%. Costco Wholesale Corp. had an annual average earning growth of 8.3% over the past 10 years. GuruFocus rated Costco Wholesale Corp. the business predictability rank of 5-star.

COST is in the portfolios of Chris Davis of Davis Selected Advisers, Bill Gates of Bill & Melinda Gates Foundation Trust, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Bruce Kovner of Caxton Associates, Richard Aster Jr of Meridian Fund, PRIMECAP Management, Ruane Cunniff of Ruane & Cunniff & Goldfarb Inc, Warren Buffett of Berkshire Hathaway, Paul Tudor Jones of The Tudor Group, George Soros of Soros Fund Management LLC, Tom Russo of Gardner Russo & Gardner, Tom Gayner of Markel Gayner Asset Management Corp, Ron Baron of Baron Funds, Jeremy Grantham of GMO LLC.

Directors and Officers Recent Trades:

• Sell:: Executive VP Dennis R Zook sold 5,000 shares of COST stock on 12/16/2009 at the average price of 59.09, the price of the stock has increased by 2.49% since.


• Sell:: Principal Accounting Officer David S Petterson sold 3,689 shares of COST stock on 11/09/2009 at the average price of 60, the price of the stock has increased by 0.93% since.


• Sell:: Principal Accounting Officer David S Petterson sold 1,838 shares of COST stock on 10/29/2009 at the average price of 57.68, the price of the stock has increased by 4.99% since.


• Sell:: Principal Accounting Officer David S Petterson sold 7,500 shares of COST stock on 10/14/2009 at the average price of 58.64, the price of the stock has increased by 3.27% since.

Taiwanese solar panel company will buy GE plant slated for closureTaiwanese solar panel company will buy GE plant slated for closure

Motech Industries, a Taiwanese solar photovoltaic company, announced this week that it will buy General Electric's PV plant in Glasgow, Delaware.

GE decided earlier this year to shutter the crystalline silicon panel plant, citing high production costs. The company added that it will shift its solar development into thin-film technology, which is far cheaper to produce; it bought thin-film company PrimeStar Solar in 2008.

"We are pleased to announce this agreement to purchase the solar module operation from GE Energy," noted Motech chairman and CEO Dr. Simon Tsuo.

The Glasgow facility can produce 34 megawatts of solar panels each year. Seventy-five employees currently work there, Motech said. The Taiwanese firm will be able to use GE's module trademark for two years, and it will assume responsibility for warranty services on GE-produced panels.

In the last few decades, Western companies sought to produce goods in China. Now renewable energy companies are shifting production the other way: in November, Chinese solar PV maker Suntech said it would open a plant in Arizona.

Foreign firms are seeking to both bolster their image and avoid a potential tariff hike. Tariffs on solar panels may be increased 2.5 percent

American Express Adds British Airways as ‘Points Partner’

For the first time, U.S. American Express card members can transfer their membership rewards points into British Airways’ frequent flyer program for travel on BA and Oneworld partner airlines, AmEx has announced.

“With this added choice and flexibility, it is even easier for card members to redeem points for travel to the 150 destinations around the world serviced by British Airways – one of the leading global airlines,” American Express said in a statement.

British Airways, through its Executive Club Frequent Flyer program, is the 17th airline to join the growing roster of AmEx points transfer partners, which currently includes Delta, JetBlue and Continental.

The credit card giant has been boosting and heavily promoting its “points transfer” program, which gives card members the ability to transfer points directly into airline and/or hotel frequent flier/guest programs.

All major credit card issuers have been pumping up rewards programs and features in recent months ahead of reform laws set for full effect Feb. 22 that restricts when and how to raise interest rates or impose fees. Optional rewards credit card programs are not directly affected by language in the new legislation, although the Federal Reserve has yet to finalize rules for all fee provisions.

American Express card members can visit http://www.membershiprewards.com/ to redeem points for travel or transfer points.

If Burlington Northern Is 'Fully Valued', Is Berkshire Overvalued?

In an amended filing of the proxy for Berkshire Hathaway’s (BRK.A) proposed acquisition of Burlington Northern Santa Fe (BNI), new details have been provided regarding Burlington Northern’s management forecasts of future results based on a number of different macroeconomic assumptions. The restrained nature of the forecasts and the fact that management projections for 2010 net income are lower than Wall Street consensus forecasts, even under the most optimistic scenario, was the subject of an article in Barron’s over the weekend.

In addition, Warren Buffett’s comment during negotiations that Burlington Northern is worth approximately mid-$90s per share has attracted attention particularly given Berkshire’s use of stock to fund part of the transaction. Let’s take a brief look at some of the more interesting information in the latest proxy filing.

Excess Conservatism or Better Insights?

As the Barron’s article points out, Burlington Northern forecasts earnings per share of $5.04 in 2010 under its most optimistic scenario. This falls short of the Wall Street consensus of $5.50 for 2010 earnings per share. Furthermore, since Burlington Northern management indicates that they believe a 2011 recovery is more likely, earnings per share might be even lower. For full details regarding the four scenarios presented by Burlington Northern, please refer to pages 42 to 44 of the proxy document.

The Barron’s article implies that Burlington Northern’s management prepared the scenarios and estimates after the merger was proposed in November. However, the proxy statement indicates that the management cases were prepared in September prior to an annual board meeting devoted to a discussion of long term plans. These management cases were provided to Goldman Sachs and Evercore Group in late October as inputs into the independent valuation analysis these firms performed for Burlington Northern during the board’s deliberations on Berkshire’s proposed acquisition.

Management came up with four scenarios: 2010 Recovery, 2011 Recovery, No Recovery, and Deeper Recession. The Board instructed Goldman Sachs and Evercore to regard the 2011 Recovery case as the most probable. This scenario calls for earnings per share to increase from $4.41 in 2010 to $9.35 in 2014. The more optimistic 2010 Recovery case projects earnings per share to increase from $5.04 in 2010 to $10.96 in 2014. The No Recovery case calls for essentially flat earnings on average over the five year period while the Deeper Recession case obviously projects even worse results.

Does this imply that Burlington Northern’s management is being much more conservative than Wall Street analysts? It seems that the answer is yes given that the “most likely” scenario is the 2011 Recovery case rather than the 2010 Recovery case. As we have discussed in the past, railroads are a “derived demand” industry meaning that business trends can provide great insight into overall economic conditions. Since rail indicators continue to show relatively weak results, it seems prudent for management to exercise caution when making long term plans.

“Fair Value” for Burlington Northern: Mid-$90s Per Share?

On pages 36 to 39 of the proxy, a detailed account of the merger discussions is provided. One portion of the discussion is particularly interesting for Berkshire Hathaway shareholders:

Mr. Buffett expressed his belief that fair value for BNSF’s common stock was in the mid−$90s per share, and that therefore the $100 per share price he was contemplating was, in Mr. Buffett’s view, as high as Berkshire could pay.

If fair value for Burlington Northern was in the mid 90s per share, then why did Mr. Buffett agree to offer $100 per share? As he stated at the time, the transaction is obviously a major bet on the United States economy. This does not mean that a recovery is imminent in 2010 or even in 2011, but obviously Mr. Buffett believes that rail traffic will be substantially higher five to ten years from now.

One aspect of the transaction that troubles many Berkshire shareholders is the fact that stock is being used to fund 40% of the purchase price. As we discussed in coverage of the transaction at the time of the announcement, Mr. Buffett does not believe in issuing Berkshire stock unless Berkshire is receiving as much or more intrinsic value in return. If Burlington Northern shares are “fully valued” in the mid-$90s per share range and Berkshire is using stock to fund part of the $100 per share acquisition, then are Berkshire shares fairly valued or overvalued?

While it is certainly possible that Mr. Buffett regards Berkshire shares as fairly valued, two points must be made that could lead to a different conclusion: First, in any merger transaction, the acquirer is obviously not going to brag about obtaining terms that undervalue the acquisition target. While Mr. Buffett may regard Burlington Northern as worth no more than $100 share today as a stand alone publicly traded company, he apparently has a positive view of the United States economy that can support a much higher valuation for Burlington Northern five to ten years from now. Second, it is possible that Mr. Buffett believes that Burlington Northern is worth more as a Berkshire subsidiary than as a stand alone public company. The fact that Berkshire has significant cash flow from operations to invest each year along with the ability to borrow at very low cost is a great match for a business that requires steady capital investment.

The definitive answer to the question of whether Berkshire is overpaying for Burlington Northern will not be known for several years. However, use of Berkshire Hathaway stock as a funding source at a time when Berkshire’s share price is clearly “on sale” based on a number of measures we have discussed in the past is cause for legitimate concern. The stakes are high and macroeconomic factors, rather than the execution of Burlington Northern’s management, will play the predominant role in determining the outcome.

American Express: Time to Get Out?

As the financial markets collapsed in 2008, American Express(AXP Quote) fell further and faster than its big credit card competitors MasterCard(MA Quote) and Visa(V Quote). The company collected $3.4 billion in TARP funds amid concerns about rising defaults and debt.

This year, the company repaid the money it received from the Troubled Asset Relief Program, and the stock has quadrupled. As stores tally their holiday sales, investors are waiting to find out if American Express shares hit their peak or have room to grow.

Regardless of the outcome, American Express stock does not look like a bargain now. Investors who rode the recovery may do well to count their blessings and get out with sizable gains. Others looking to get into a credit card stock should consider MasterCard and Visa, which have less leverage and a wider appeal to merchants and customers.

New York-based American Express has warned investors that it probably won't be as profitable next year as it has in the past. The company usually aims for a return on equity of 34%, but recently forecast a rate closer to 20%. Its ROE is hovering around 13%, still far from the reduced target. Weak liquidity in the credit markets has made securitization difficult, hurting credit card companies who resell their loans.

While the three major credit card companies have price-to-earnings ratios in the high teens, MasterCard's ROE of 56% trounces American Express's return. While Visa's 10% ROE lags American Express's, Visa has a more attractive PEG ratio of 1.2 vs. American Express's lofty 2.66. MasterCard's PEG ratio is also 1.2, which suggests that analysts predict stronger growth rates for MasterCard and Visa than for American Express. It might mean there's little value left in the stock after this year's gain.

Berkshire Hathaway trims Moody’s stake further

Berkshire Hathaway on Friday offloaded nearly 88,000 shares of Moody’s Corp at $26.7682 apiece, a regulatory filing revealed, marking the sixth divestment in the ratings agency since July by Warren Buffett’s conglomerate.

The latest divestiture, which raised less than $2.4m (€1.7m), brought down Berkshire's stake in Moody’s to 13.4%, or almost 31.8 million shares.

Eaton's hybrid commercial truck system gets good review

UPS delivery trucks using Eaton Corp.'s hybrid system were significantly more fuel efficient than diesel models, and maintenance costs were lower, a new federal study reported this month.

The Department of Energy's National Renewable Energy Laboratory compared a fleet of Eaton hybrids to diesel trucks at two Arizona UPS delivery centers. With about 13 miles per gallon, the hybrids were 29 percent more fuel efficient than the lighter diesel models. Maintenance costs were about 8 percent lower for the hybrids.

In a news release, UPS director of maintenance and engineering Robert Hall said he hopes the test results will help popularize hybrid commercial vehicles.

The federal report said while the plain diesel and the hybrid fleets were used in the same market, UPS used the vehicles differently. UPS used the hybrids in urban routes where they were more likely to make frequent stops. It used the traditional diesel trucks for longer trips that included highway driving. Had the company used the diesel trucks on the more-demanding city routes, the fuel-economy differences would have been higher, the report said.

UPS bought 50 hybrid systems from Eaton in 2007. The parcel company has said several times that it liked the performance of the vehicles, and it ordered another 200 this year. The federal study also showed how much of a work-in-progress the hybrid systems are. While maintenance costs were low for the hybrids, the trucks were out of service for repairs longer than their diesel counterparts because it took more time to get replacement parts.

The vehicle recharges its batteries by capturing energy normally lost during braking.