Marketplace Features

Series Program Segments

A primer on hostile takeovers Remember those corporate raiders of the ‘80s that were practicing a business maneuver that was all the rage? Well, the hostile takeover is making a comeback. A hostile takeover goes against the wishes of the company’s management and board of directors. When the board turns down an offer; the would-be buyer goes to the shareholders and offers them more for their shares than the market value, thereby gaining a controlling share of the company. But companies can have a “poison pill” written into their bylaws: a way to change stock prices to make the company unattractive to a buyer. And, if they’re lucky, a “white knight” can come in to save the day with a friendly, better offer. Hostile takeovers represent fewer than 5% of acquisitions. Friday, July 25, 2003 Reporter: Amy Scott What's a hostile takeover anyway?: Take our takeover pop quiz Books about hostile takeovers: "Resisting Hostile Takeovers" by Rita Ricardo-Campbell "The Titans of Takeover" by Robert Slater, Jeffrey A. Krames Articles/Recent news on hostile takeovers: www.cfo.com: "T. Boone and the Raiders," on CFO.com www.fortwayne.com: "Dana rejects hostile takeover bid" www.canada.com: “Alcan boss says hostile takeover bid for Pechiney too good to turn down” www.channel4000.com: "HP To Take 'Poison Pill' In Takeover Fight" Definition of hostile takeover: www.investorwords.com

A Primer on Bonds With the stock market showing new signs of life, bond markets have been moving the other direction. And, it’s common to hear people say bonds are a fairly safe investment. So, what’s the deal? Well, bonds are I.O.U.s that Uncle Sam and major companies alike use to get cash in exchange for repaying your loan by a specified date. And, they usually pay you interest along the way. How much interest you get depends on the risk involved in getting you your money back. Low-risk bonds from the Treasury are safe because they’re backed by the U.S. government, but they have the lowest rate of return. High-risk bonds from companies that need cash now and may not last, offer better returns. And, it can be safer to be a bondholder than a stockholder if a company goes under because bonds are secured. Retirees like bonds because they’re a relatively worry-free stream of fixed income. Friday, July 18, 2003 Reporter: Bob Moon How much do you know about bonds? Take our bond pop quiz Related media "Bond Song": lyrics by Andy Prieboy, former lead vocalist of the band 'Wall of Voodoo'. Song lyrics

What’s the Trade Deficit? The U.S. trade deficit is huge, but what is it really and why should we care? Today, the Commerce Department said the trade deficit expanded to about $42 billion in May. Is this a number that helps us track America’s competitiveness as we keep score against our economic rivals? Well, trade deficits occur when a country spends more than it produces. But some economists believe it actually tells us very little about U.S. competitiveness and that there’s nothing wrong with the U.S. living “beyond its means.” They say that as long as the economy is growing, then the U.S. can sustain a high level of debt increase every year. At almost $500 billion annually, the trade deficit now accounts for about 5% of our GDP. But others say that by not selling U.S. goods, we are really losing jobs, and that foreign investors might lose confidence and stop funding our debt. Friday, July 11, 2003 Reporter: Jeff Tyler More info. about trade deficits www.freetrade.org: article: "America's Maligned and Misunderstood Trade Deficit" www.cato.org: article: "The Causes and Consequences of the U.S. Trade Deficit" www.tradealert.org: article: "U.S. Trade Deficit Endangers the American Economy" archive.epinet.org: article: "Low growth accompanies record trade deficit" www.moneychimp.com: Trade deficit definition www.epinet.org: Economic Policy Institute www.iie.com: Institute for International Economics

The Fed & Interest Rates The phrase "cutting interest rates" is a slightly fudged shorthand for a peculiar process What are interest rates, and how exactly are they adjusted? The immense reserves of the Federal Reserve -- amassed, in part, by the required contributions of state and national banks -- are the tool it uses to stabilizing the economy. The Fed’s Open Market Committee, which meets eight times a year to discuss the economy and decide if any action is needed, is now looking into whether to lower interest rates. It does so by setting a target. In essence, it’s saying, "We've determined that it would be best for interest rates to be X." The Fed then sets in motion a series of transactions designed to create that targeted outcome. Though that system is pretty efficient, there is no magic lever that can be pulled to ensure that the target is met. Tuesday, June 24, 2003 Reporter: Bob Moon How much do you know about the Federal Reserve? Take our Federal Reserve pop quiz

Freddie Mac Primer What exactly does Freddie Mac do? How's it tied to the U.S. government? If you own a house, chances are it’s in the hands of Freddie Mac or Fannie Mae. The two companies own or guarantee three out of four mortgages in this country. In 1938, the government created the Federal National Mortgage Association (“Fannie Mae”) to buy mortgages from banks. In 1970, the Federal Home Loan Mortgage Corporation (“Freddie Mac”) was created to inject more money into the housing market. Today, they operate as virtually identical government-sponsored companies, with an extra mandate to foster low-income homeownership. But they don’t get any funding from the government -- it’s all from Wall Street. Wednesday, June 18, 2003 Reporter: Amy Scott How much do you know about Freddie Mac? Take our Freddie Mac pop quiz Learn more www.freddiemac.com/: Company Web site