Archive for March, 2012|Monthly archive page

Jobless rates fall in 29 states

In Uncategorized on March 31, 2012 at 12:00 am

Improvements in hiring and unemployment were widespread across most states in February.

Improvements in hiring and unemployment were widespread across most states in February.

NEW YORK (CNNMoney) — Unemployment fell in 29 states in February and rose in only eight, the government reported Friday, in another sign of broad improvement in the U.S. labor market.

The improvement means there are only three states with unemployment above the 10% mark — Nevada with a 12.3% unemployment rate, Rhode Island, which has 11% unemployment, and California, where unemployment stood at 10.9%.

North Carolina and Mississippi dropped out of the states with double-digit unemployment.

As many as 19 states suffered 10% or more unemployment as a result of the recent recession. As recently as last September there had been 10 states with a jobless rate of 10% or more.

Despite suffering from the nation’s highest unemployment rate, Nevada did enjoy one of the biggest improvements in the month, as the 0.4 percentage point decline trailed only the 0.5 point improvement in Mississippi.

The overall national unemployment rate was 8.3% in February, as government figures show employers adding almost 250,000 jobs on average over each of the last three months. Friday’s report showed that the number of jobs increased in 42 different states in February.

There are now more states with unemployment rates under 5%, widely considered to be full-employment, than states above 10%. But the four states with low unemployment — North Dakota at 3.1%, Nebraska at 4%, South Dakota at 4.3%, and Vermont at 4.1%, are among the smallest in population.

I have jobs but no one wants them

Only one state — New York — has not had a drop in unemployment over the course of the last year. A 0.8 percentage point jump in unemployment in New York City in the face of Wall Street layoffs lifted unemployment statewide by 0.4 points to 8.5%.

But there have been some notable improvements in unemployment in many parts of the country, as the jobless rate has fallen by a percentage point or more in the last year in 17 different states.

The 100 best companies to work for

Michigan has achieved the greatest improvement, a 1.9 point drop to 8.8%, driven by a rebound in hiring in the auto industry. Nevada’s rate has fallen 1.3 points and California by 1.1 points, leaving only Rhode Island as a high unemployment state that has not enjoyed significant improvement. To top of page

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Will IBM’s Rometty join Augusta’s boys’ club?

In Uncategorized on March 31, 2012 at 12:00 am

Observers are wondering whether IBM CEO Ginni Rometty will become the first female member at the Augusta National golf club, home of The Masters.

2010 Masters champion Phil Mickelson presents the ceremonial Green Jacket to last year’s winner, Charl Schwartzel, at Augusta National Golf Club.

NEW YORK (CNNMoney) — Ginni Rometty has already shattered the glass ceiling of the corporate world. But can she break the green ceiling at Augusta National Golf Club?

That’s the question that has observers buzzing just a week before the Masters golf tournament returns to the famed Georgia club, following Rometty’s ascension to the top job at tournament sponsor IBM earlier this year.

Speaking to CNN on Friday, women’s rights activist Martha Burk said the time had come for the club to break its tradition of male-only membership and welcome Rometty, as it has done with the CEOs of other tournament sponsors.

She also pressured IBM to take a stand.

“The company has a huge responsibility here not to undermine its first female CEO, and if they accept anything less than a full membership … they’re going to undermine [her] and they’ll be making a statement that they don’t consider her equal to her predecessors,” Burk said.

“IBM can pull out and say, ‘We want nothing else to do with this, these are not the values of our company,’ or the club can relent and say, ‘We welcome women as members,’” she added. “Those are the only two options that are viable that are going to wash with the public.”

Bloomberg News pointed out this week that Augusta has traditionally invited the CEOs of tournament sponsors IBM (IBM, Fortune 500), ATT (T, Fortune 500) and Exxon Mobil (XOM, Fortune 500) to become members and don the club’s iconic green jackets.

But Augusta’s membership has been male-only since the club’s opening in 1932, creating a potentially awkward situation for an institution that has had to fight charges of sexism on numerous occasions in recent years.

In 2002, Burk began a movement aimed at forcing the prestigious club, which counts a number of titans of industry and finance as members, to open its ranks to women.

But the club’s then-chairman, Hootie Johnson, resisted these efforts, saying in a statement that gender integration would not come “at the point of a bayonet.”

In 2006, Burk was among a group of Exxon shareholders who accused the company of violating its discrimination policies by supporting the tournament.

Augusta did not welcome its first African-American member until 1990, when Gannett (GCI, Fortune 500) television division president Ron Townsend joined the club. Non-members can play on the course only when hosted by members.

Augusta is famously secretive about its membership, and the club declined to comment on the issue, as did IBM spokesman Chris Andrews.

“Augusta is a private club, and their personal membership is an internal matter,” Andrews said.

IBM runs the Masters website and media center, and has also developed mobile apps to help fans follow the tournament.

- CNN’s Moni Basu contributed to this story To top of page

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Ford’s Mulally earns $29.5 million

In Uncategorized on March 31, 2012 at 12:00 am

Ford CEO Alan Mulally got a $3 million pay raise last year to $29.5 million.

Ford CEO Alan Mulally got a $3 million pay raise last year to $29.5 million.

NEW YORK (CNNMoney) — Ford Motor CEO Alan Mulally received a pay package worth $29.5 million last year, according to a company filing Friday.

Mulally’s total compensation was up almost $3 million, or 11% from his 2010 package. While his base pay increased to $2 million last year from $1.4 million each of the previous two years, his cash bonus declined to $1.8 million from $3.2 million in 2010.

Most of his compensation came from stock and other deferred compensation. Ford (F, Fortune 500) shares are up 15.7% year to date.

A previous filing by Ford disclosed that Mulally received company stock worth $36.3 million after taxes in March. That stock was granted him as part of his 2009 pay package and gained in value by more than 500% since that time. That compensation was not included in the most recent filing.

Rival General Motors (GM, Fortune 500) has yet to file details of its executive pay. GM posted record profits in 2011, and reclaimed the title of world’s largest automaker.

Mulally is widely credited with helping to turnaround Ford. The company posted its biggest net income since 1999 in 2011, and the company was able to reinstate dividend payments to shareholders after a five-year hiatus.

Fortune: Mulally worth every penny

The automaker was widely seen as the weakest of the Big Three U.S. automakers when Mulally was hired away from Boeing (BA, Fortune 500) and named Ford CEO in September 2006.

But under his leadership it was the only major U.S. automaker that avoided a government bailout and a trip through bankruptcy court in 2009, and it has been steadily gaining U.S. market share in recent years.

But his large pay packages have sparked some criticism, with United Auto Workers union President Bob King calling his pay level “morally wrong.”

Detroit’s Big Three are (finally!) making profits

Still there is generally greater concern among Ford investors about reports that Mulally, 66, may be nearing retirement, than shareholder outcry over his pay package. To top of page

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Mega Millions: Betting on a blessing or a curse?

In Uncategorized on March 31, 2012 at 12:00 am

Mega Millions player Milton Smith showed off his lottery tickets in Hawthorne, Calif. on Thursday. He spent $1,080 on tickets, in the hope of scoring the $640 million jackpot.

Mega Millions player Milton Smith showed off his lottery tickets in Hawthorne, Calif., on Thursday. He spent $1,080 on tickets, in the hope of scoring the $640 million jackpot.

NEW YORK (CNNMoney) — Step right up, ladies and gentlemen. The clock is ticking on the Mega Millions lottery, the fattest jackpot in American history.

Just don’t end up like Hurley from “Lost.”

The jackpot currently stands at $640 million, with a possibility of growing even larger before Friday night’s drawing.

The largest Mega Millions jackpot before this was $390 million in 2007. It was split by two separate winners — a married couple in New Jersey and a truck driver from Georgia — who selected the same combination of numbers.

Jackpots are often split by multiple winners. One of the more extreme examples happens every year in Spain, which has the largest lottery jackpots in the world.

Spain’s annual Christmas lottery, known as El Gordo (the Fat One), is the largest of them all. El Gordo’s jackpot exceeded $900 million last year, but the winnings were divided by an entire village.

And, keep in mind that a winning ticket isn’t always what it’s cracked up to be. The curse of the lottery is that many winners have destroyed their lives with the sudden influx of cash.

What a lottery jackpot can buy

The most infamous example of a tainted winner is Andrew “Jack” Whittaker, the owner of a construction company in West Virginia. He was already a self-made millionaire when he scored a $315 million Powerball jackpot in 2002.

Whittaker opted to cash out, at $111.7 million, and pledged 10% of his winnings to the Church of God.

Whittaker said he was “blessed,” at the time. “It’s really going to excite my daughter and granddaughter,” he said. “They’re going to be spending the money.”

Things went quickly downhill. His life became a series of tragic mishaps, including reports of lawsuits, divorce, drunk driving and the untimely deaths of his daughter and granddaughter.

In one of his more infamous blunders, Whittaker reportedly took a briefcase stuffed with hundreds of thousands of dollars into a strip club. The briefcase was stolen after he got drunk and passed out.

The lottery curse was famously featured on the ABC television series “Lost.” Hurley, played by Jorge Garcia, worked at a fast food franchise and lived with his mother until he won the fictional Mega Lotto Jackpot, which prompted him to buy the franchise and move into a mansion.

But then the franchise was destroyed by a meteorite, his beloved uncle dropped dead from a heart attack, and Hurley caught a flight on the ill-fated Oceanic 815.

That hasn’t stopped people from playing Hurley’s winning combination of numbers: 4, 8, 15, 16, 23 and 42. More than 41,000 gamblers played those numbers during a Mega Millions drawing last year and got four of six numbers correct. They each won $150.

The lottery rewards those who pick some of the numbers correctly, even if they don’t get all six. Second-place winners of the Mega Millions jackpot, who pick the first five numbers out of six, will walk away with $250,000.

Tickets for the current drawing will be sold until 10:45 p.m. ET on Friday, for $1 apiece. In New York, $1.6 million worth of tickets were sold between 8 a.m. and 9 a.m.

The odds of winning are one in about 175 million, according to the Mega Millions website.

The winner, if there is one, will be announced at 11 p.m. ET. The winner can choose to take the jackpot in annual payments or in a lump sum of cash, which is $462 million for a $640 million jackpot.

If more than one winner picks the correct six-number combination, the jackpot will be divided among them. If no one picks correctly, the jackpot will increase to an estimated $975 million for a drawing on April 3. To top of page

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Why the lottery is not a good bet

In Uncategorized on March 31, 2012 at 12:00 am

Playing the lottery is for suckers.

Fewer lottery tickets, more money.

NEW YORK (CNNMoney) — You are not going to win the lottery.

Sure, somebody might cash in that $640 million Mega Millions golden ticket, but odds are, every single reader of this story will come away disappointed.

The odds of winning the jackpot are about one in 175 million. Talk about a low probability event!

“The odds are crazy if you think about it,” said Romel Mostafa, a professor at the Ivey School of Business. “Especially the mega lotteries. It’s just nuts.”

Playing the lottery is a massively popular $50-plus billion business. It is the most widespread form of gambling in the country. But it’s also an exceedingly bad bet.

Research shows that the lottery pays out at one of the lowest rates among commercial gambling games.

The curse of the lottery

In 2009, 42 states had lotteries, with total ticket sales of $52.3 billion, according to the Census Bureau. But prizes added up to only $32.3 billion, while states retained $17.7 billion as revenue.

Mega Millions aside, certain states are marginally better than others if you’re hoping to score.

According to data crunched by Bloomberg, Georgia residents are the biggest “suckers.” They spend an average of $471 per year on the lottery, or 1% of their average income, while receiving a payout of 63 cents on the dollar.

Massachusetts residents spend more, but their state lottery also provides bigger returns — 72 cents per dollar played.

States, many of which routinely face budget shortfalls, are happy to get the money. Depending on state law, the revenue raised from lottery sales is used to fund all kinds of government programs, including education.

Earmarking the money for popular causes makes the state look great, but as the National Gambling Impact Study Commission said in the late 1990s, it is not necessarily boosting budgets.

“There is reason to doubt if earmarked lottery revenues in fact have the effect of increasing funds available for the specified purpose,” the report said.

In other words, the money often acts as a stop-gap replacement, not a supplement.

How to divide the jackpot

Lotteries were once prohibited in the United States, but have spread like wildfire since they were introduced in the 1960s. In each case, state governments have maintained a monopoly over the game.

State governments often label lottery proceeds as “profit.” But another way to think about the lottery is as a tax.

After all, the government is collecting revenue from a population that willingly purchases a product — like a sales tax. The only difference is that the tax is built into the price of the lottery ticket, instead of tacked on at the end.

Another frequent complaint about lotteries is that they act as a regressive tax, as numerous studies have shown that lottery games are disproportionately consumed by the poor.

“The poor tend to spend more as a share of their income,” Mostafa said. “And that is sad. These are the people who are cash-strapped.” To top of page

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‘Massive’ credit card data breach involves all major brands

In Uncategorized on March 31, 2012 at 12:00 am

NEW YORK (CNNMoney) — A data breach at a payments processing firm has potentially compromised credit and debit card information from all of the major card brands.

Global Payments (GPN), a company that processes card transactions, confirmed late Friday that “card data may have been accessed.” It says it discovered the intrusion in early March and “promptly” notified others in the industry.

Global Payments did not say how many accounts were affected, or what kind of information was compromised. A law enforcement investigation is ongoing.

A Wall Street Journal report from earlier Friday saying that Global Payments had been hacked sent the company’s shares down 9% before trading was halted. The stock did not resume trading before the market closed on Friday.

Global Payments did not say which card companies were affected, but Visa released a statement saying that it was all of the big players.

“Visa Inc. is aware of a potential data compromise incident at a third party entity affecting card account information from all major card brands,” it said.

When a customer swipes a credit card, the data is sent to a payment processor like Global Payments, which then forwards the transaction information to card companies like Visa and MasterCard.

That’s a massive business: Global Payments processed $167.3 billion worth of transactions in its last fiscal year, which ended May 31, 2011. Global Payments specializing in serving small merchants, like mom-and-pop businesses and local retailers.

It emphasized that none of them were to blame for the data leak.

“It is crucial to understand that this incident does not involve our merchants or their relationships with their customers,” Global Payments said.

It plans to hold a conference call Monday morning to provide more details on the debacle.

‘Massive’ breach? News of the breach was first reported by the respected security blog Krebs on Security. The blog said the breach was “massive,” and could involve more than 10 million card numbers.

“I’ve spoken with folks in the card business who are seeing signs of this breach mushroom,” Gartner security analyst Avivah Litan wrote Friday in a blog post.

Her sources say the hackers have begun using some of the card data they stole, Litan added.

When payment processors get hacked, the shrapnel can spread far. The record holder for the largest-ever breach is believed to be a 2008 attack on Heartland Payment Systems (HPY), in which an estimated 130 million customer accounts were compromised.

Heartland eventually paid more than $110 million to Visa, MasterCard, American Express and other card associations to settle claims related to the breach.

In regard to the Global Payments breach, MasterCard (MA, Fortune 500) said it has alerted payment card issuers “regarding certain MasterCard accounts that are potentially at risk.”

Visa (V, Fortune 500) released a statement saying it too has provided card issuers with notifications about accounts that could be affected. The issuers “can take steps to protect consumers through independent fraud monitoring and, if needed, reissuing cards,” it said.

Both MasterCard and Visa emphasized that their own networks had not been penetrated.

Related story: How they’ve hacked you

Discover (DFS, Fortune 500) and American Express (AXP, Fortune 500) each released short statements saying they are aware of the situation and are monitoring customer accounts for suspicious activity.

In data breach situations, credit card companies generally offer affected customers fraud monitoring services at no cost — and customers aren’t on the hook for any fraudulent charges. The card issuers themselves are responsible for those costs.

Questions about industry standards: Several security researchers said the breach is a prime example of why the current Payment Card Industry Data Security Standard (PCI-DSS) is inadequate.

“Expect to see yet another round of almost religious fervor in the debate over the real value of PCI-DSS,” Geoff Webb, director of product marketing at data-protection company Credant Technologies, said in an email.

Cybercriminals “are constantly looking for opportunities to identify and attack sites where there is a weakness in security — just like a predator looks out for the weakest member of the herd,” he added.

Litan, the Gartner analyst, is skeptical about whether the credit card industry will invest the money and time required to switch to a more secure system, like “smart cards” embedded with chips, which are used in some foreign countries.

“It’s cheaper for them to deal with these breaches than to make all those chip cards,” Litan told CNNMoney. “We’ve had all of these breaches, but there have not been any significant attempts to change the situation. The information is easy to steal, and cards are easy to use, so it’s like free money for criminals.”  To top of page

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U.S. tightens oil sanctions on Iran

In Uncategorized on March 31, 2012 at 12:00 am

The Obama administration is expected to tighten sanctions against Iran. The move indicates it thinks the world will be able to cope with a loss of Iranian oil.

The Obama administration is expected to tighten sanctions against Iran. The move indicates it thinks the world will be able to cope with a loss of Iranian oil.

NEW YORK (CNNMoney) — President Obama ratcheted up the pressure on Iran Friday, deciding to implement previously announced sanctions that will be the toughest to date.

The decision declares that world oil markets can be adequately supplied even if a significant portion of Iran’s 2.2 million barrels a day in oil exports is taken off the table.

“There is a sufficient supply of petroleum and petroleum products from countries other than Iran to permit a significant reduction in the volume of petroleum and petroleum products purchased from Iran by or through foreign financial institutions,” Obama said in a statement.

The sanctions, announced late last year, are aimed at getting Iran to give up its nuclear program — a program Iran says is for peaceful purposes but many suspect is intended to produce a bomb.

The decision was widely expected.

“It’s hard to imagine the White House would have invited the political ramifications of stalling on Iran,” said Kevin Book, managing director at ClearView Energy Partners. That could have been “devastating for key voter blocs in battleground states.”

Saudi Arabia can’t save us from high oil prices

The sanctions target Iran’s central bank, which the country uses to facilitate its oil trade. They subject any bank, company or government that does business with Iran’s central bank to U.S. sanctions.

In effect, it forces people to choose between doing business with Iran and doing business with the United States.

The sanctions are slated to take full effect June 28, and a full embargo of Iranian oil from the European Union is set for July 1.

The sanctions had already begun ramping up, and analysts estimate Iranian’s exports dropped by about 300,000 barrels a day over the last few months.

Analysts cite that disruption, along with the potential for a full-blown conflict with Iran, as the main reason behind a 20% spike in oil and gasoline prices this year.

Inside Iran the sanctions have been taking a toll. Rampant inflation is underway as the nation’s currency devalues. There are reports Iranians are having hard time getting all manner of imported goods, including food.

China, India and Japan have been the largest buyers of Iranian crude, and the Obama administration has been leaning on those countries to find other sources of oil.

Earlier this month the State Department said Japan, the EU, and a number of other countries have reduced their purchases of Iranian oil enough to avoid sanctions. If China, India, South Korea and 10 other nations don’t follow suit by June 28, they could be sanctioned.

Saudi Arabia is thought to have offered more crude, but replacing Iran’s oil output isn’t easy.

Analysts say nearly a million barrels a day could ultimately be lost from Iran. The world is estimated to only have the ability to produce between 1.5 and 2 million extra barrels of oil a day, mostly from Saudi Arabia. If Saudi Arabia has to increase its production to cover Iran’s oil it would leave a razor-thin margin to cover for any other disruptions.

For world leaders, tightening sanctions on Iran while trying to find new supplies has been a delicate task. Oil prices could spike, which would actually benefit Iran.

Saudi Arabia isn’t the only source of replacement oil though. Some of it could come from the U.S. Strategic Petroleum Reserve and others like it in Europe and the United Kingdom.

There’s been increasing talk these nations could tap their reserves to prevent further run-ups in oil prices.

But tapping the SPR is a political challenge.

Politicians from the opposite side of the aisle always cry foul when the reserves are tapped, accusing the ruling government of simply pandering to voters by trying to lower gas prices.

Many contend the reserves should be used only in the event of an actual shortage. If a war breaks out with Iran, the world could suddenly find itself short not just one million barrels a day but the entire 17 million barrels a day that flow through the Strait of Hormuz — a fifth of the world’s total production could go missing.

The oil industry’s plan to lower gas prices

“Caution is still the word,” IHS CERA Chairman Daniel Yergin told a Senate panel Thursday when asked about tapping the SPR. “The whole system was set up to deal with disruptions, and there are a lot of uncertainties ahead.”

Iran has repeatedly threatened to close the Strait but analysts doubt its ability to do it.

“Whether or not tapping [the SPR is] needed depends on how hard the Administration wants to push Iran’s customers, how much the Saudis are willing to pump, and how much you need to keep in reserve should things really go south in the region,” said Trevor Houser, an oil analyst at research firm the Rhodium Group.  To top of page

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Senate eases financial regulator logjam

In Uncategorized on March 31, 2012 at 12:00 am

Senate confirmed 70 nominees to various posts, including key financial regulators who had lingered since last summer.

Senate confirmed 70 nominees to various posts, including key financial regulators who had lingered since last summer.

WASHINGTON (CNNMoney) — A logjam broke late Thursday night in the Senate, which confirmed 70 nominees to various posts, including key financial regulators whose appointments had lingered since last summer.

The recess appointment in January of Richard Cordray to the post of director of the Consumer Financial Protection Bureau had irked Republicans, who spent much of the previous year trying to block the president from making exactly that move.

For months, the Senate was unable to muster support for dozens of nominees, including on two chiefs nominated last summer: Thomas Curry to run the Office of the Comptroller of the Currency and Martin Gruenberg to run the Federal Deposit Insurance Corp.

But late Thursday, Senate leaders reached a deal that allowed most of the nominees to clear, although two more recent nominees to the Federal Reserve Board of Governors didn’t make the cut.

“It is vital that we have strong leaders in place at our financial regulators as we continue our economic recovery, continue implementation of the Wall Street Reform Act, and are faced with challenges from the crisis in Europe,” said Sen. Tim Johnson, a South Dakota Democrat who leads the Senate Banking committee. “I’m glad that the Senate was able to set aside partisan politics and approve these individuals.”

For the FDIC board, the Senate confirmed Gruenberg, Thomas Hoenig, former bank president of the Kansas City Fed, and Jeremiah Norton, a former chief atJ.P. Morgan Chase (JPM, Fortune 500). However, the Senate stopped short of confirming Gruenberg to the post of chairman, meaning he will continue to serve as acting FDIC board chief.

The Senate also confirmed Thomas Curry to be the Comptroller of the Currency for the next five years, a nomination many advocates for Wall Street reforms were watching.

Acting Comptroller of the Currency John Walsh has weathered criticism for being too bank-friendly, especially when it came to reforms. For example, Walsh, who joined the agency during the George W. Bush administration,criticized new rules mandating banks strengthen their capital cushions, saying they would threaten the economy.

Additionally, the Senate also confirmed Christy Romero as the new Special Inspector General for the Troubled Asset Relief Program, a job first held by Neil Barofsky. Romero had already made waves in Washington, overseeing some critical reports about the bailout program as the interim inspector.

The Senate also confirmed Mary John Miller to be the new Under Secretary for Domestic Finance at the Treasury Department.

The next federal agency awaiting key confirmations is the Federal Reserve, which is now operating with just five of its seven-member board. Jerome Powell and Jeremy Stein have been nominated to the Fed board.

The Senate didn’t include the Fed board nominees because they had only just been approved by the Senate Banking committee this week. Also, a few Republicans expressed concerns about the nominees, a congressional aide confirmed Friday. To top of page

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Harvard, Princeton post record low acceptance rates

In Uncategorized on March 31, 2012 at 12:00 am

NEW YORK (CNNMoney) — Your odds of getting into some of the nation’s most prestigious colleges are shrinking.

The country’s eight Ivy League institutions finished sending out their admission decisions to applicants late Thursday. And many of the elite schools — including Harvard, Princeton, Dartmouth and Cornell — are reporting that they accepted record low percentages of applicants for the upcoming school year.

While some schools were being more selective, other colleges had a bigger pool of applicants to choose from.

Harvard’s acceptance rate was the lowest of the Ivy Leagues, despite a slight decline in applications. The school admitted 2,032 of the 34,302 students who applied — amounting to an acceptance rate of 5.9%. That’s the lowest rate on record for the university and down from last year’s rate of 6.2%.

“We have always been conservative about the number of acceptances sent out at this time of year in order to avoid the possibility of overcrowding. Harvard’s high graduation rate — typically 97 to 98 percent — leaves little margin for error,” William Fitzsimmons, the dean of admissions and financial aid, said in a statement.

6 colleges’ quirky money tricks

Fitzsimmons added that more than 14,000 applicants boasted scores of 700 or higher (out of 800) on the SAT critical reading test, 17,000 applicants had scores of 700 or higher on the SAT math test and 15,000 scored a 700 or higher on the SAT writing test. Plus, 3,800 applicants were ranked first in their high school classes.

Princeton University accepted only 2,095 students of the 26,664 who applied this year, bringing its acceptance rate to a historic low of 7.9%. Cornell University admitted 16.2% of the record 37,812 applicants this year — its lowest acceptance rate ever.

Dartmouth College’s admittance rate was a record low 9.4%, while University of Pennsylvania accepted 12.3% — also the lowest level on record.

Meanwhile, Yale University admitted only 1,975 of the record high 28,974 students who applied this year — amounting to a 6.8% acceptance rate, down from a 7.4% rate last year.

“We had another extraordinary applicant pool, and another challenging selection process,” Jeffrey Brenzel, Yale’s dean of undergraduate admissions, said in a statement. “We could not make offers to a large number of immensely talented young men and women.”

Columbia University and Brown University were the only schools to accept a higher percentage of applicants this year. Columbia admitted 2,363 students, or 7.4%, of the 31,851 applicants this year — up from last year’s rate of 6.9%. Brown’s admittance rate rose to 9.6%, compared to a rate of 8.6% last year.

Admitted students typically have until May 1 to accept offers from Ivy League schools.  To top of page

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Groupon admits more accounting errors

In Uncategorized on March 31, 2012 at 12:00 am

groupon earnings refunds

NEW YORK (CNNMoney) — If you thought that going public would end Groupon’s parade of financial restatements, you’d be wrong.

In a double-bomb announcement on Friday, Groupon was forced to revise its fourth-quarter income and sales lower, thanks to a higher rate of customers asking for refunds.

Groupon (GRPN) said that its fourth-quarter offerings included a growing number of more expensive deals, for which more customers tend to demand a refund. The company had to go back and retroactively beef up its reserve fund, which cut its fourth-quarter sales and widened losses.

Now, Groupon is recording a loss of $65 million on sales of $492 million, a wider loss than the $43 million loss it previously reported on sales of $507 million.

The company said it has updated its refund model and thinks the new version will be more accurate.

Adding salt to the wound, Groupon revealed that its independent auditor uttered the dreaded phrase “material weakness.”

Ernst Young’s 2011 audit report report found that Groupon has a deficiency in its financial statement close process, which covers the steps companies go through at the end of each quarter to ensure that all of their financial transactions have been accurately recorded and reported.

Groupon said it is working on a fix, including hiring more financial staffers and developing “formal policies” and “documented procedures.”

Despite the setbacks, Groupon affirmed its guidance for the current quarter, saying it still expects first-quarter sales of $510 million to $550 million, and income from operations of $15 million to $35 million.

As soon as Groupon disclosed its financials in its June 2011 IPO filing, critics slammed the company for its unorthodox accounting measures. That led to several downward revisions of Groupon’s financials as it adopted more conventional metrics.

Those restatements effectively cut Groupon’s reported sales in half to $688 million for the first half of 2011, down from the $1.5 billion it initially claimed.

Despite all that, Groupon shares soared about 31% on their debut day, at one point topping $31 a share. Since then, they have fallen back, and finished trading Friday at $18.38.  To top of page

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