Goldman Op-Ed Writer Got $150 for Unsolicited Critique

By Edmund Lee - Mar 17, 2012 2:38 AM GMT+0700

The New York Times (NYT), drawing criticism for running an op-ed by a former Goldman Sachs Group Inc. (GS) executive attacking the bank, said the piece was one of thousands of unsolicited submissions it receives weekly.

“We got it by e-mail,” New York Times editorial page editor Andrew Rosenthal said in a telephone interview. Smith was paid about $150 for his submission, a typical amount, said a person with direct knowledge of the situation who declined to be identified because the information isn’t public. The newspaper pays varying amounts for its op-eds, except to public figures or politicians, the person said.

Wall Street, including Morgan Stanley (MS) Chief Executive Officer James Gorman, has faulted the newspaper for publishing an op-ed piece based on the view of one among more than 30,000 Goldman Sachs employees. All the facts that could be checked were checked in Smith’s submission, Rosenthal said.

“The purpose of the op-ed page is to air an important position,” Rosenthal said. “We’re saying, ‘This is interesting,’ and by the way, ‘interesting,’ very often means it’ll make you crazy.”

In the March 14 op-ed that explained why he was quitting, Greg Smith called Goldman Sachs’s culture “toxic and destructive.”

Goldman Sachs Chairman and CEO Lloyd Blankfein rebutted Smith’s claims in a letter to employees the same day, saying his assertions didn’t reflect the New York-based bank’s values and how the “vast majority” of its employees think about their firm.

Piece Merited Publication

Morgan Stanley’s Gorman said he told staff not to circulate the op-ed.

“I was surprised that anyone would run an op-ed piece based upon the view of a single employee,” Gorman said today at an event in New York hosted by Fortune magazine.

Smith was identified by the newspaper as an executive director and head of the bank’s U.S. equity derivatives business in Europe. While Smith wasn’t among the most senior executives at Goldman Sachs, his screed against the firm’s culture merited publication, Rosenthal said.

Rosenthal declined to say when Smith’s letter was received and how long it took for the editorial staff to verify the submission. The majority of op-ed pieces are commissioned, or from writers who have previously written for the section, he said.

“Very few come over the transom queue,” Rosenthal said. “Some of them famously have -- this is one of them.”

To contact the reporter on this story: Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Ville Heiskanen at vheiskanen@bloomberg.net

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George Clooney Arrested at Sudan Protest in Washington

By Tom Schoenberg - Mar 17, 2012 11:01 AM GMT+0700

George Clooney, the Academy Award- winning movie actor, was arrested outside the Sudanese Embassy in Washington while protesting attacks by the African nation’s government on its southern regions and blocking of humanitarian aid.

Clooney, 50, was taken into custody yesterday and charged with crossing a police line, a misdemeanor, according to George Ogilvie, a Secret Service spokesman. He was taken to a police station for processing, Ogilvie said.

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Actor and activist George Clooney is handcuffed by a member of the US Secret Service for trespassing upon the Sudanese Embassy in Washington, D.C. on March 16, 2012. Photographer: Paul J. Richards/AFP/Getty Images

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March 16 (Bloomberg) -- Actor George Clooney was arrested today during a protest outside the Sudanese embassy in Washington. He’s been charged with crossing a police line, a misdemeanor, according to George Ogilvie, a Secret Service spokesman. (Source: Bloomberg)

He paid a $100 penalty and was released, according to Gwendolyn Crump, a police spokeswoman.

Sixteen others arrested in the group that was protesting included NAACP President Benjamin Jealous, Martin Luther King III and Democratic U.S. representatives Jim Moran and Jim McGovern, according to Ogilvie.

The Hollywood star testified March 14 before the Senate Foreign Relations Committee claiming the Sudanese government was killing its own people and blocking aid to the Nuba mountains and the Blue Nile regions.

That evening, he was among the guests invited by President Barack Obama to a state dinner honoring U.K. Prime Minister David Cameron.

Clooney, at the Senate hearing, described a visit this month to southern Sudan where he witnessed hundreds of people seeking to hide in caves from Sudanese bombings.

Senate Testimony

“The south has all of its oil and the north has the pipelines and refineries,” he told senators. “For years, the north has been taking the oil and keeping most of the profits, buying bombs and rockets and using them on Darfur, the Blue Nile, Abyei and the Nuba mountains.”

Clooney won the Oscar for best actor in a supporting role in 2005 for his performance in “Syriana.” He has been nominated once for directing, twice for screenwriting and three times for best actor in a leading role, according to the motion picture Academy.

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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Dow Halts Seven-Day Rally as Oil Gain Bolsters Concern

By Rita Nazareth - Mar 17, 2012 3:36 AM GMT+0700

The Dow Jones Industrial Average (INDU) snapped a seven-day gain after an increase in oil and consumer prices sparked inflation concern as the economy improves.

Energy (S5ENRS) shares had the biggest advance among 10 groups in the Standard & Poor’s 500 Index. Noble Corp. and Chesapeake Energy Corp. (CHK) increased more than 2.5 percent. The Bloomberg U.S. Airlines Index slumped 3 percent amid expectations about higher fuel prices. Bank of America Corp. jumped 6.1 percent, surging 23 percent in four days. Apple Inc. ended almost unchanged as the company started selling the new iPad.

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Traders work at the New York Stock Exchange (NYSE) on March 15, 2012. Photographer: Scott Eells/Bloomberg

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March 16 (Bloomberg) -- Bloomberg's Pimm Fox and Deborah Kostroun report on the performance of the U.S. equity market today. The Dow Jones Industrial Average snapped a seven-day gain after an increase in oil and consumer prices sparked inflation concern as the economy improves. (Source: Bloomberg)

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March 16 (Bloomberg) -- Robert Doll, chief equity strategist at BlackRock Inc., talks about the outlook for U.S. stocks and his investment strategy. He speaks with Trish Regan, Adam Johnson and Stephanie Ruhle on Bloomberg Television's "Street Smart." (Source: Bloomberg)

The S&P 500 advanced 0.1 percent to 1,404.17 at 4 p.m. New York time, capping a fifth week of gains. The benchmark measure has risen 2.4 percent since March 9, the biggest weekly advance in 2012. The Dow dropped 20.14 points, or 0.2 percent, to 13,232.62, after rallying to the highest level since December 2007. About 8.1 billion shares changed hands on U.S. exchanges today, or 21 percent above the three-month average.

“The bugaboo in the background is oil prices,” said Madelynn Matlock, who helps oversee about $14.6 billion at Huntington Asset Advisors in Cincinnati. “I filled up my car yesterday and it hurts. Things are improving at a slow, but steady pace. If oil prices pop up, it will be different story.”

Equities were little changed as the cost of living rose in February by the most in 10 months, reflecting a jump in gasoline. Confidence among consumers unexpectedly fell in March, a sign rising fuel costs may be starting to weigh on economic prospects. Treasury Secretary Timothy F. Geithner said yesterday rising oil prices show “we still face a dangerous and uncertain world” and there’s no easy way to lower gasoline costs.

Best Since 1998

The S&P 500 is still on pace for the best first quarter since 1998 (SPX), after rallying 12 percent, amid better-than- estimated economic and corporate reports. It trades at 14.5 times reported earnings, the highest valuation level since July while still below the average since 1954 of 16.4 times earnings.

“It’s a bit of acrophobia,” said John Manley, chief equity strategist for Wells Fargo Advantage Funds in New York, citing potential investors’ fear after the S&P 500 rose to the highest level since 2008. His firm oversees $209 billion. “The market has just gone up pretty quickly. Meantime, slow and slightly improving has been the way to look at the economy.”

Energy shares gained, while airlines slumped as oil traded above $107 a barrel. Noble (NE) surged 4.8 percent to $41.25. Chesapeake Energy added 2.5 percent to $25.06. Exxon Mobil Corp. (XOM) advanced 0.4 percent to $86.44. US Airways Group Inc. (LCC) lost 5.7 percent to $7.15. United Continental Holdings Inc. (UAL) declined 2.2 percent to $19.95.

Financial Shares

Financial (S5FINL) shares in the S&P 500 rose 0.3 percent as a group. The index surged 6.2 percent in four days following dividend increases by banks including JPMorgan Chase & Co. Bank of America jumped 6.1 percent, the most in the Dow, to $9.80. Wells Fargo & Co. lost 0.5 percent to $33.89.

American International Group Inc. (AIG) fell 0.2 percent to $28.03, after rising as much as 1.1 percent earlier today. The insurer’s repayment of $1.6 billion to the U.S. Treasury Department pushed the government’s portion of recouped financial-bailout money to 80 percent, said a Treasury official familiar with the matter.

Apple (AAPL) ended almost unchanged at $585.57, after briefly rising above $600 yesterday. The 9.7-inch iPad, unveiled on March 7, is the biggest upgrade yet to Apple’s tablet before Microsoft Corp. (MSFT) introduces new software for competing devices.

Generating demand with the model is important for Apple to fend off competition from devices using Google Inc. (GOOG)’s Android operating system and the $199 Kindle Fire from Amazon.com Inc. (AMZN) that’s popular among cost-conscious buyers.

Higher Forecasts

The S&P 500, which yesterday rose above 1,400 for the first time in almost four years amid better-than-estimated economic data, may extend its gain to 1,470, according to Credit Suisse Group AG’s Andrew Garthwaite. He lifted his forecast for the index at the end of 2012 from a previous projection of 1,400, citing increasing risks for bonds and momentum in global earnings.

“The prospects for economic growth are pretty good,” Michelle Gibley, director of international research at San Francisco-based Charles Schwab Corp., said in a telephone interview. Her firm has $1.81 trillion in client assets. “Near term, you could see some volatility in stocks because the run has been so strong. Longer term, the outlook looks good.”

The benchmark measure has “healthy intermediate-term momentum” that helped it recover from a slump at the beginning of the month and may drive it higher, MKM Partners LP’s chief market technician said.

‘Breakout’

The market may be staging a “breakout” after matching its 2011 highs last week, MKM Partners’ Katie Stockton said, citing the momentum indicator known as Moving Average Convergence/Divergence. A second-straight weekly close above 1,370 today would confirm the trend and open the way to an increase to 1,440, Stockton said in a phone interview yesterday.

“I’m bullish on the market from an intermediate perspective based largely on momentum and this breakout that appears to be under way,” Stockton said. “The fact that the S&P 500 has managed to exceed resistance at the 2011 high tells us that breakout should overrule any negative set-up otherwise.”

To contact the reporter on this story: Rita Nazareth in New York at rnazareth@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net

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Sears To Close 62 Stores by July to Reduce Costs

By Leslie Patton and Lauren Coleman-Lochner - Mar 17, 2012 3:32 AM GMT+0700

Sears Holdings Corp. (SHLD), the department-store chain controlled by hedge fund executive Edward Lampert, plans to close 62 retail stores in the first half of this year to reduce expenses.

The closings include 43 Sears Hometown stores, 10 Sears Hardware stores and 9 The Great Indoors stores, the Hoffman Estates, Illinois-based company said in a filing with the U.S. Securities and Exchange Commission on March 14. The company, which also owns the Kmart chain, had 4,010 stores as of Jan. 28.

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A customer enters a Sears store in Peru, Illinois. Photographer: Daniel Acker/Bloomberg

Lampert, who is Sears’s chairman and controls about 60 percent of its shares, is spinning off units to generate cash and closing stores after the company posted its largest quarterly loss in at least nine years. Sears said last month it planned to raise as much as $770 million by selling 11 store sites and separating some smaller-format businesses.

Chris Brathwaite, a Sears spokesman, declined to provide a list of the 62 stores to be closed or specify when the stores will shut down. Brathwaite said in an e-mail that he didn’t know how many jobs may be affected because most of the closing stores are independently owned and operated.

Sears fell 1.1 percent to $82.55 at the close in New York. The shares have more than doubled this year after plunging 56 percent in 2011.

Sears also disclosed in the filing that Lampert’s ESL Investments Inc. agreed with an undisclosed financial institution to buy a stake in contracts that pay suppliers for their accounts receivable with Sears should the company seek protection from creditors.

Planned Closings

The retailer last year announced a plan to close 120 Kmart and Sears full-line stores that would generate as much as $170 million in cash from sales of inventory and leasing or sales of the locations.

The company had $747 million in cash and near-cash items at the end of the fourth quarter, about 45 percent less than a year earlier.

To contact the reporters on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net; Lauren Coleman-Lochner in New York at llochner@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net

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Afghan Shooting Suspect Bales Arrives at U.S. Prison

By Gopal Ratnam and Tony Capaccio - Mar 17, 2012 11:20 AM GMT+0700

Spc. Ryan Hallock, 28th Public Affairs/U.S. Army

Staff Sgt. Robert Bales, 1st platoon sergeant, Blackhorse Company, 2nd Battalion, 3rd Infantry Regiment, 3rd Stryker Brigade Combat Team, 2nd Infantry Division, in 2011.

U.S. Army Staff Sergeant Robert Bales, the suspect in the killings of at least 16 Afghan civilians, arrived yesterday at the U.S. military’s prison in Kansas, the Army said.

The Pentagon for the first time named the 38-year-old sniper, without indicating he has yet to be charged in the case. After being held in Afghanistan and then Kuwait, Bales was flown to Fort Leavenworth in Kansas, where he will be placed in special housing in his own cell, according to an e-mailed Army statement.

Women and children were among the victims of the March 11 shootings in two villages in southern Afghanistan. The attacks threaten to erode U.S.-Afghan relations, drain remaining U.S. and European popular and political support for the war and add pressure to speed troop withdrawals.

Bales was on his first tour in Afghanistan after three in Iraq. He serves in the Army’s 2-3 Infantry, 3rd Stryker Brigade Combat Team of the 2nd Infantry Division, based at Joint Base Lewis-McChord in Washington state.

Bales served a total of 37 months during his three tours in Iraq and has been awarded three Army Good Conduct medals, six Army Commendation medals and two Meritorious Unit Commendations, according to the Army’s statement. He completed a two-year associate degree, qualified as a sniper in 2008, and also completed a Warrior Leaders Course that year, the Army said.

He arrived in Afghanistan on Dec. 3 after his last Iraq tour ended in June 4, 2010. His time at home was about average for troops who have deployed to Iraq and Afghanistan. Increasing such “dwell time” has been an Army goal since the Iraq war began.

Generally ‘Mild-Mannered’

The soldier’s Seattle lawyer, John Henry Browne, described his client at a news conference on March 15 without naming him. He portrayed a soldier who was “in general mild-mannered” with “a very strong marriage” and two children. Browne, who couldn’t be reached for comment yesterday, was quoted by the Associated Press as confirming that Bales is his client.

After sustaining a concussive head injury and losing part of a foot during his tours in Iraq, the soldier and his family were disappointed when he was sent to Afghanistan in December, Browne said.

“It would be fair to say that he and the family were not happy that he was going back,” Browne told reporters yesterday at his office in Seattle. “The brigade was told that they would not be redeployed.”

A soldier in the same unit in southern Afghanistan had been “gravely injured” a day before the shootings, an incident that affected everyone in the unit, Browne said.

The stress of a fourth combat deployment, a troubled marriage and alcohol use may have triggered the killing spree, according to a U.S. official briefed on the case who spoke on condition of anonymity during the investigation.

Browne denied that alcohol use or domestic discord played a role.

To contact the reporters on this story: Tony Capaccio in Washington at acapaccio@bloomberg.net; Gopal Ratnam in Washington at gratnam1@bloomberg.net

To contact the editor responsible for this story: John Walcott at jwalcott9@bloomberg.net

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