According to Robert Half’s most recent quarterly poll of CFO hiring plans (“Robert Half’s Most Recent Quarterly Poll of CFO Hiring Plans”), few finance chiefs are planning on adding additional staff members in the third quarter of the year. Said Max Messmer, CEO of Robert Half International: “While continued economic recovery is widely expected, many executives are waiting for evidence of further business growth before making substantial increases in hiring.”
What next? “New Research Reveals Accounting Gaffe Triggered Ice Age.”
(To see the full story on CFO hiring plans, click here.)
2. Round-trip Trades
It’s been a rough patch in the oil patch.
First, Enron goes down. Then, several companies say they may have to restate revenues. Then, this week, management teams at two energy sector companies, Reliant Resources and Dynegy, reported that they’d been slapped with subpoenas from the U.S. attorney’s office.
The reason for all the slapping: lawyers for the government want to know more about the two companies’ use of round-trip trades. Management at CMS, a counterparty to both Reliant and Dynegy, has reportedly acknowledged that the company conducted more than $4 billion in round-trip trades in an 18-month period.
In case you don’t know, round-trip trades are power trading transactions involving simultaneous purchases and sales with the same counterparty at the same price. In other sectors, they’re known variously as zero-balance trades, phantom-transaction trades, or trades-we-just-made up trades.
Seems like only yesterday that Ma Bell was the Bedrock of American business. Now, Bedrock is more like [your Hannah-Barbera reference here].
On Wednesday, Moody’s Investors Service downgraded the ratings on long-term securities of AT&T Corp. to the second lowest investment grade.
The rating agency cut the senior unsecured debt two notches to Baa2 from A3. Moreover, Moody’s added the rating outlook for AT&T is negative.
Moody’s said the negative outlook reflects the continuing price pressures for long distance voice and data carriers, as prices are expected to remain under pressure and volume will be subject to cyclical variability.
4. Management at CargoLifter
Not only did the German dirigible maker run out of steam, it ran out of money as well. On Wednesday, management at CargoLifter, whose project to build giant cargo-moving dirigibles never really took flight, said it can longer pay its bills. The company will have to declare bankruptcy unless it secures new investment.
CargoLifter’s management had sought to market modern versions of the zeppelin airship to transport oversized objects — things like turbines and oil rigs. But the company ran into two problems. First, it cost a lot more to build the giant airships than the company had first projected. Second, dirigibles are real slow.