PhillyInc

Hemispherx Biopharma Inc. announced a round of executive bonuses New Year's Eve, totalling more than $400,000. The Philadelphia drug development firm said the bonuses amounted to 25 percent of base salary for the five execs. In the case of CEO William A. Carter it meant a tidy $166,156. The more than 30-year-old company has no significant product sales and is unprofitable. But its compensation committee and board determined that "significant progress" had been made in five areas, including preparing a new drug application for its Ampligen drug to file with the FDA and developing a global marketing strategy.

Lists of '07's worst stocks are filled with home builders, mortgage lenders and other financials who have gotten hammered with the subprime/housing bubble/credit crisis. The Inquirer/Bloomberg Philadelphia Index is no different. But just because a stock is a mutt one year doesn't mean it can't become a show dog the next. Case in point: SunCom Wireless Inc., this year's best-performing local stock. In 2006, SunCom shares lost 75 percent of their value. That year, the Berwyn company had posted widening losses, CEO Michael Kalogris was severely injured in a car crash, and its shares were delisted by the New York Stock Exchange. The wireless service provider's finances improved in 2007, but the stock popped in September, thanks to a buyout launched by T-Mobile.

Vanguard Group, run by Jack Brennan, picked up a lot more money to manage in 2007. According to data from Financial Research Corp., Vanguard raked in $70.6 billion in assets for the first 11 months compared with $37.5 billion for same period of 2006. California-based American Funds attracted $67.6 billion during that same time period vs. $64.8 billion in 2006.

Try not to be surprised, but a survey of financial advisors picked a "Democrat in the White House" as their greatest economic worry for 2008. "Recession" came in fourth behind "Global unrest" and "U.S. economic growth." Berwyn-based Brinker Capital's latest quarterly survey had 236 respondents.

Sometimes it's the deals you don't do that provoke food for thought. Since late July, Wayne-based Ascend Acquisition Corp. (OTC.BB:ASAQ), has had plans to acquire an Austin, Texas company called ePak International Ltd.

An amended registration statement recounts the litany of businesses that Ascend considered before choosing ePak: an industrial pipe maker, a snack food retailer, a home-building materials supplier, a document storage firm, medical-service billing company, several oil-field services businesses, a temp agency, a foam fabricator, a provider of voting machines, an infrastructure repair company, a media firm focused on the Hispanic radio market, a propane fuel supplier, an urban for-profit day care school, and a freight forwarding business. (No names, of course.)

As for ePak, it can be seen as a high-tech China play, given its huge semiconductor-related products factory in Shenzhen. Ascend, a special-purpose acquisition company, has been advised by Arthur Spector, a Philadelphia-area M&A and finance executive.

Three men from the region's business and economic development communities have been tapped for three-year terms on the board of the Federal Reserve Bank of Philadelphia. An honor, yes, but anyone serving on the nine-member board is in a position to throw in their two cents about economic conditions and try to influence monetary policy. The new board members are:

* Keith S. Campbell, chairman of Mannington Mills, the flooring maker in Salem, N.J. (His local paper has a lot of background here);

* Ted T. Cecala, chairman and CEO of Wilmington Trust (NYSE:WL) , the big Delaware bank;

* Jeremy Nowak, president and CEO of The Reinvestment Fund, the Philadelphia organization that finances neighborhood revitalization.

Debt-ridden Centro Properties Group, the big Australian shopping center owner, says it is looking to shed most, if not all, of its 700 U.S. shopping centers. As the 5th-largest mall owner, Centro was bound to have a presence locally. Remember three years ago Centro bought Kramont Realty Trust? Today, it owns about 25 shopping centers in the region, including Pilgrim Gardens Shopping Center in Drexel Hill, the Marlton Shopping Center in Marlton, and County Line Plaza in Souderton. And Centro maintains its mid-Atlantic regional office in Plymouth Meeting.

Philadelphia commercial real estate lawyer Robert D. Lane Jr. has joined fast-growing Stevens & Lee P.C. to "help build the firm's real estate and project finance practice" around Philadelphia. Lane will reprise his earlier role building similar practices at Morgan Lewis (1998-2005) and Pepper Hamilton (1989-97) before detouring to join onetime Philadelphia GOP mayoral candidate Sam Katz in an attempt to build a Chinese infrastructure development company. The partners had set up deals in Fuzhou and Tianjin, but were unable to convert them into paying propositions, especially after a 2006 Chinese law restricted international joint ventures. Lane said the partners did develop "relationships with major global real estate companies and equity funds," which Lane expects will prove useful in representing corporate tenants in "diverse transactions." Lane's past clients include Albert Einstein Healthcare, Amoco, Forest City, IBM, McDonald's, and Towers Perrin, among others.

- Joseph N. DiStefano

Independence Blue Cross has many subsidiaries and investments. A registration statement by California-based Cord Blood America Inc. (OTC-BB:CBAI) notes that the nonprofit Philadelphia health insurer owned 17,132,624 of its shares as of Dec. 14. But before you write your state representative to complain, consider that Cord Blood shares closed at less than 2 cents per share on Friday. That makes Blue Cross’ holdings worth a whopping $325,520.

Motorola Inc. (NYSE:MOT) , which has a cable-TV equipment business in Horsham, disclosed specifics on the cost of job cuts in 2007. It took charges of $311 million for the severance of about 5,100 employees during the first nine months of the year. Now it plans to take a net pre-tax charge of $90 million for the severance of an additional 1,600 workers.

Checkpoint Systems Inc. (NYSE:CKP) announced a change in CEOs two days after Christmas. But it wasn't the only company to switch CEOs in the merry month. Liberum, which tracks changes in CEOs and other C-level execs, said 224 changes were recorded in the CEO position during December, including Citigroup and Coca-Cola. For the fourth quarter, 664 changes were made at the top, compared with 611 for the same period of 2006.

China's WuXi PharmaTech has agreed to buy AppTec Laboratory Services Inc., which is based in St. Paul, Minn. and has a 75,000-square-foot lab and manufacturing operation at the Philadelphia Navy Yard. Deal is valued at $151 million.

The Rendell administration proudly announced 43 economic development projects on Friday that it claimed would create more than 2,000 jobs in three years. And it included helpful links in its news release to specify how it was spending $35 million. But when hackers from China brought down the state government's Web site on Friday you couldn’t learn that XL Capital Ltd. plans to move its 428 employees into a 140,000-square-foot building in Uwchlan Township and create 92 jobs. Or that Auxilium Pharmaceuticals Inc. intends to upgrade its 50,000-square-foot lab in Horsham to not only retain 27 people but also create 60 life-science jobs. For XL's $10 million project, Pennsylvania will provide the insurer with $684,000, which is composed of a $400,000 grant, $100,000 in job training funds and $184,000 in job-creation tax credits. Auxilium will get $255,000 for its $7 million expansion.
But the big winner locally was Exton-based Advanced Automation L.P., which will get a $2 million low-interest loan plus $300,000 in other funding to lease or buy a new headquarters. This Chester County information-technology company has 78 workers and says it would create at least 77 new jobs within three years.

Think Merck executives were surprised to hear pitcher Roger Clemens bring up his eating Vioxx "like it was Skittles" during a 60 Minutes' grilling by Mike Wallace? Probably not. The Cy Young award winner, who was named as a steroid user in the Mitchell report, talked at length with the New York Times in 2005 about his use of the pain reliever that Merck pulled in 2004.

Whenever any member of the Federal Open Market Committee or president of the various Federal Reserve banks speaks, the markets listen and trade on the interpretation of those words.

How’s the economy and where are interest rates headed?

Today it was Charles I. Plosser’s turn at the Main Line Chamber of Commerce. And the Philly Fed president’s message was delivered in typical Fedspeak: “I think the U.S. economy will experience several quarters of sluggish growth in 2008 before returning to a sustained expansion over the next two years.”

Plosser indicated further rate cuts may be necessary but would not say whether he would call for a cut Jan. 30. But today’s econo-spiel was a little different for him: It was his first speech as a voting member of the FOMC.

Inquirer staff writer Harold Brubaker, who covered the speech, said he’d never seen so many media outlets at a chamber of commerce meeting. He also said it was striking that “I didn’t say that” was Plosser’s response several times during a question-and-answer session after the speech. His new status as a Man Whose Opinion Really Counts will mean his comments will be dissected more closely.

Economic worries have not unsettled the upscale female shoppers at Urban Outfitters, Anthropologie, and Free People stores, Dick Hayne, chairman of Urban Outfitters Inc. , said this morning at the Greater Philadelphia Chamber of Commerce's annual Economic Outlook Breakfast.
"I do think she is feeling optimistic and will continue spending in 2008," said Hayne in the Grand Ballroom at the Park Hyatt in Center City.
Hayne said that even in areas that have been hardest hit by the housing downturn - such as Southwest Florida - the company is experiencing "reasonable growth."
"I'm feeling very optimistic. I guess I'm feeling apologetically so," he said, referring to the tough forecast for the national economy given by economist Mark Zandi at the meeting.

- Harold Brubaker

If you want to get a clue about consumer spending, follow a 49-year-old with a 19-year-old living at home and see how they spend.

That's the advice Mark Zandi, chief economist of Moody's Economy.com, gave the 460 people at this morning's Greater Philadelphia Chamber of Commerce's economic outlook breakfast.

Why?

Because those two ages account for the largest population groups in the United States. Zandi, who is 48, said he's not quite in that demographic sweet spot, but he invited the crowd to watch him spend.

Another panelist wasn't buying the entertainment value of watching Zandi decide how to part with his monetary gains. "I can't think of anything more exciting than following a 48-year-old economist around to see what he does," said Walt D'Alessio, with tongue firmly in cheek. "Mark, I don't think the line is going to be very long."

But the chairman of Brandywine Realty Trust wasn't done. After hearing Urban Outfitters founder Dick Hayne talk about the spending resilience of his stores' female customers, D'Alessio said: "I think I want to follow one of Dick's upscale women around."

- Michael W. Armstrong

Here on The Inquirer's business news desk, we like to play a game that I call "Stump Mike." It happens when a reporter or editor encounters some local firm we've never seen or heard of before. The head-scratching journalist then approaches Deputy Business Editor Michael W. Armstrong.

"Yo, Mike. You ever heard of this outfit?"

Almost always, Mike answers with a confident yes. Often, he'll go on to name several board members and the companies they work for, plus any challenges the enterprise faces in the marketplace or the courts.

He hardly ever draws a blank. It's really quite stunning. I've been working with Mike for most of the nearly 10 years he's been here, and while I've probably seen more than a hundred efforts to stump him, I've seen him stumped just once. I'm pretty sure that outfit turned out to be a scam.

As his formal title implies, Mike's job is to keep the business editor -- that would be me -- from injuring himself or others. Mike is very good at his job.

So, I felt like I was shooting myself in the foot when I asked him to consider doing something completely different. He agreed, and this week he began trying his hand at that new role: full-time writer of this blog and the PhillyInc column that appears on the front page of The Inquirer's weekday business sections.

Since the blog and column debuted in May, they have been under the direction of Assistant Business Editor Tom Ginsberg. Tom has done a great job of giving PhillyInc an entertaining and provocative voice, even as it reflected the many different voices of the newsroom's business staff and other contributors.

That's a lot like herding cats.

Tom and I began to understand why people say that a blog needs a single voice. And we immediately thought of Mike Armstrong, a walking Philadelphia business encyclopedia with a sense of humor and a relentless dedication to accuracy. Tom, an award-winning journalist who has reported from around the globe and was our pharmaceutcal industry reporter before taking on PhillyInc, will now oversee our Sunday and Monday business sections.

The good news for me is that while Mike is making PhillyInc his own, he'll still be close enough to keep me out of trouble.

Right, Mike?

Mike?

-- Tony Gnoffo, Inquirer Business Editor

More than 20 years ago, "Divest Now!" was rallying cry on college campuses as activists implored companies to shed ties with South Africa. The Rendell administration has announced it is organizing a trade mission to the post-apartheid nation Feb. 18-22 to encourage Pennsylvania companies to establish contacts to boost exports. As of Sept. 30, Pennsylvania was the seventh-largest U.S. exporting state to South Africa. Keystone State firms exported more than $180 million of products to South Africa in 2006.

- Mike Armstrong

Gamblers lost $4.92 billion in Atlantic City in 2007, but that doesn't make the 11 casinos there winners.

The New Jersey Casino Control Commission released December stats that show the casino industry posted the first decline in gambling revenue in Atlantic City since it was legalized there.
In 2006, a dozen Atlantic City casinos generated $5.2 billion in revenues. With a 10.6 percent drop in December revenues, casinos saw their top line for 2007 down 5 percent to $4.92 billion.

The reasons for the drop? New Jersey's smoking ban was one factor as was the closure of the Sands Hotel Casino in November 2006. But the biggest had to be those slots parlors that have opened at Pennsylvania racetracks. At year's end, six slots parlors were open in Pennsylvania, including Philadelphia Park and Harrah's Chester Downs in the Philadelphia suburbs. Combined, revenues for all of them totaled $1.04 billion in 2007. Which casino hauled in the most? Harrah's Chester at $285.98 million, slightly more than Philly Park at $285.03 million.
Still those slots parlors pale compared to the gambling juggernaut that is Atlantic City's Borgata. Once again, the Borgata grabbed a bigger share of the Jersey market. Its revenues topped $750 million, up from $739 million in 2006.

- Mike Armstrong

When the CEO of a public company leaves, it's easy to measure what he or she meant to it: Watch the stock price. If it goes down, investors may be worried they lost a good manager. If it rises, they're often betting a new regime will turn things around.

Target Corp. named a new CEO Wednesday, and the retailer's stock price rose. Starbucks switched top barristas Monday night and its shares spiked 8 percent the next day during a down trading session.

Yesterday, Teva Pharmaceutical Industries Ltd.'s top U.S. exec left to take a senior post at Cardinal Health Inc.

Both companies operate in the Philadelphia area. Teva, the world's biggest generic drug maker, has its North American headquarters in North Wales and a manufacturing plant in Sellersville. Cardinal has a drug distribution center in South Jersey.

The reaction? Teva's American depositary receipts fell 4.5 percent, or $2.24, to $47.41. Cardinal shares rose 3.6 percent, or $2.12, to $60.69.

This morning, Bank of America agreed to rescue Countrywide Financial from the widening hole that is the credit crisis. The huge Charlotte, N.C. bank says it will operate Countrywide as a separate brand so don't look for those loan origination offices to change nameplates.
The deal also won't affect Bank of America's rank as the sixth-largest in the Philadelphia area by local deposits. Countrywide, which holds a savings and loan charter, doesn't have deposits in the region.

Most shareholders won't come out ahead on this transaction. Certainly those who bought at Countrywide's 52-week high of $45.03 last February and held through the August global credit crisis won't be happy. But something (shares of Bank of America) is better than zero.
Another group not happy about the deal is the Service Employees International Union which calls it "bad for consumers, bad for business, and bad for America." Did they leave anyone out of that?

- Mike Armstrong

Newtown Square-based Catholic Health East will acquire three hositals in Newark, N.J., from a hospital system affiliated with the Archidiocese of Newark.
Catholic Health East, which operates the Mercy Health System in the Philadelphia area, would close Saint James and Columbus hospitals in Newark, but keep Saint Michael's Medical Center open.

"We are pleased to have the opportunity to extend our healing ministry into the greater Newark area," said Bob Stanek, president and CEO of Catholic Health East in a statement.

Catholic Health East operates 33 acute-care hospitals and dozens of other health-care facilities in 11 eastern states. The nonprofit firm said it was approached by Cathedral Healthcare System about a deal involving its financial struggling Newark hospitals in early 2007. The Delaware County-based hospital network said it would spend $130 million on new technology and capital improvements at Saint Michael's.

- Mike Armstrong

After Cardinal Health Inc. announced it was hiring local executive George Barrett from Teva Pharmaceutical Industries Ltd. last week, it was clear from Cardinal's Web site that it did not have as many operations in the Philadelphia area as it once did.

That's because last April Cardinal sold off its Pharmaceutical Technologies & Services business to the hedge fund Blackstone Group for $3.3 billion. That business had its roots in a Philadelphia company called PCI Services Inc. Cardinal acquired PCI for about $200 million in 1996 and proceeded to expand it in a series of other deals.

Now called Catalent Pharma Solutions Inc. and based in Somerset, N.J., the business has quite a footprint in the region. It has a 583,624-square-foot building involved in packaging services on Red Lion Road in Philadelphia. It has two similar operations in smaller facilities in Moorestown and Pennsauken. Cardinal still operates one of its 25 pharmaceutical distribution centers in Swedesboro.

- Mike Armstrong

In a rough week for the stock market, at least one local company put together a decent run higher. ViroPharma Inc. said 2007 sales of its biggest product, Vancocin, will be between $202 million and $208 million. That's 21 percent higher than 2006. The Exton drug developer's shares rose 21 percent to $9.96 last week.

- Mike Armstrong

When Vijai Gupta arrived in Canada from his native India in 1959 to study chemical engineering at McGill University, he soon realized there wasn't a morsel of Indian food to be found. He quickly became a gastronomic adventurer, sampling cheap delicacies he could afford on a student budget that he had never tried before, such as Hungarian goulash.

Fast-forward to the 1970s. His wife, Jyoti, wanted to start a home-based business to use her nutrition degree while watching over their two children, Anjali and Anuj. So in 1979, while living in Houston, the couple founded JYOTI Cuisine India, named after his wife, and began outsourcing the canning of foods based on Jyoti's recipes. A year later, Gupta, then a scientist at Atlantic Richfield Co., was transferred to the Philadelphia area and brought the food business along. In Their food business took off and by 1997, they moved from his house to the site of a former mushroom cannery.

The road to profitability hasn't been easy. JYOTI was sued after people found pebbles in with their chickpeas and other beans. To solve the problem, Gupta invented bean-cleaning technology that since has been patented and licensed to other food processors.

Last year, Gupta said sales at his Berwyn, Pa.-based company rose 50 percent to $3 million. (It's now owned by the couple's holding company, Gourmail Inc., with Jyoti listed as president.) Now the company, called JYOTI Natural Foods, which provides vegetarian meals to US Airways and British Airways, is launching its first meat product, chicken curries to compliment its vegetarian products.

Q: When you arrived in Canada as a student in 1959, was there any Indian food to be found?
A: There were no restaurants, no Indian grocery stores, and so on. ... I would go all over Montreal to find cheap, good food like Hungarian goulash, for $1.25 (for) the whole meal. ... I went to an Italian restaurant and tried to put some sugar in a cup of tea. ... It turned out it was Parmesan cheese.

The nonprofit hospital world can seem sleepy to those fed a daily diet of earnings calls and stock price moves. But two very different announcements from two local hospital systems last week bear watching.

On Friday, Newtown Square-based Catholic Health East said it would be buying three hospitals in Newark, N.J., from an affiliate of the Archdiocese of Newark.

The week before, Radnor-based Jefferson Health System and Albert Einstein Healthcare Network in Philadelphia agreed to part ways after 10 years.

Because the Philadelphia economy depends so much on health-care and educational institutions, shifts in strategy have implications for all of their suppliers, employees and customers (read: patients or students).

Jefferson, the mightiest of all of the local health systems, was created in 1995. It has 27,895 employees and 3,761 hospital beds. Consider it a minor surprise that Einstein and Jefferson are moving to separate by mid-year. Could losing Einstein, very much a city health system, be a sign of a more suburban tilt for Jefferson? It has always been a collection of other systems, held together by affiliation agreements rather than outright purchases.

After buying Merck & Co. Inc.'s central Pennsylvania manufacturing plant, PRWT Services Inc. today is expected to introduce the management team that will lead it. PRWT chairman and CEO Willie F. Johnson has grown his Philadelphia company into one of the nation's largest African-American-owned businesses over the last 20 years. With a supply contract in hand from Merck, the new venture has the potential to triple PRWT's annual revenue, which was $76 million in 2007.

- Mike Armstrong

It's not often that a service company evolves into a manufacturing company. Think of the computer industry. IBM, which once was synomous with "computer," is an information services company, having sold its PC manufacturing business long ago.

But then along comes a company like PRWT Services Inc., the Center City provider of business services, that is suddenly finding itself making bulk chemicals for the pharmaceutical industry.

This morning, the management of the African-American-owned company was celebrating its purchase of a former Merck & Co. Inc. factory in the central Pennsylvania town of Riverside, which is indeed on the side of the Susquehanna River across from Danville. Armed with a five-year supply contract from Merck, PRWT is now a manufacturer and has jumped into the life-sciences business with both feet.

Harold Epps, who was promoted to PRWT's president as of today, said this one acquisition and contract effectively quadruples the revenue base of the 20-year-old company. It is in negotiations with St. Louis-based Sigma-Aldrich for another contract that would expand those revenues even more, he said.

Andrew Witty, the incoming new CEO of GlaxoSmithKline P.L.C. apparently will run the drug giant from London, rather than Philadelphia, as J.P. Garnier has done. The Times of London reports that Witty who lives in London will do so for family reason. Read the report in the Times of London.

Inquirer staff writer Stacey Burling's story Sunday on the ethics of and current practice in how medical experts and insurance professionals hash out when someone tells a patient "no" to treatment or payment has produced a variety of reader reaction.

The case involves a 17-year-old named Nataline Sarkisyan, who died while awaiting a liver transplant that insurer Cigna Corp. initially declined to pay for. Shortly after Cigna officials changed their minds, she died.

I'll post comments once I get OKs from those readers.

- Mike Armstrong

Had enough depressing news about the housing slump?
Let's check in with the commercial real estate sector for a moment.
CB Richard Ellis Inc. offered its fourth-quarter review of the Philadelphia regional office market and found that vacancy rates are down, leasing rates are up and things don't look too bad for the first part of 2008.
Surprised?
Well, remember that Philadelphia isn't exactly a Las Vegas or a Phoenix. No one will confuse us with a boom town. But by CB Richard Ellis' calculations, the vacancy rate in Center City's biggest submarket dipped to a healthy 9.2 percent. In part, that's related to small amount of true "trophy" buildings available in the blocks west of City Hall. (The Comcast Center, which recently opened, wasn't counted in the research.)
Things improved in the suburbs too. The Radnor area had been reporting vacancy rates of over 20 percent after Wyeth had moved operations to Montgomery County several years ago. But Lincoln National Corp.'s move into two office buildings on Radnor-Chester Road in the fourth quarter reduced the vacancy rate in what CB calls the Main Line submarket to 13.7 percent from 20.2 percent in the third quarter. - Mike Armstrong

The National Venture Capital Association says that 235 venture firms raised $34.7 billion in 2007, the most since 2001. And the fourth quarter proved to be the most lucrative for them when 63 firms - including two from the Philadelphia area - raised $11 billion.
Locally, LLR Partners raised $600 million for its third venture fund. LLR is the private-equity firm in Center City focused on later-stage company. It was started by Ira M. Lubert and several other financial wizards. Today, Lubert presides over a family of funds with more than $3.3 billion in committed capital.
Also, seed- and early-stage investor NextStage Capital L.P. raised $20 million in the fourth quarter to bring the amount under management for its first fund to $25 million. The firm is based in Audubon, Pa., and was started by Terry Williams, Robert Adams and Dan McKinney. Williams was the founder of a recruitment and talent management firm that he later sold to Comsys IT Partners. Adams and McKinney are both former Safeguard Scientifics Inc. executives. - Mike Armstrong

Mayor Michael Nutter's honeymoon extends to the out-of-town business press. Forbes magazine has an interview in the Jan. 28 issue. In it, he repeats many of the stump statements that helped him get elected. But Forbes' writer David Whelan paraphrases as follows:

He argues that earlier city policies to spur job growth, which amounted to coddling the biggest employers with incentive packages, have failed.

And in case your small business in the city has kept you too busy to read what Nutter has been promising to do to help, there's this:

Nutter intends to start out slowly, first by eliminating the 0.15% tax on business revenue. Then, during his first term, he plans to trim the corporate profits tax from 6.5% to 4.4%. Some day, he hopes, new businesses will pay no taxes for the first two or three years.

(Thanks to Brett Mandel's Philadelphia Forward newsletter for the head's up.)

- Mike Armstrong

PR Newswire, one of the primary pipelines for press releases, has been scrambling to apologize for a gaffe committed by one of its staffers yesterday.

Huge numbers of press releases from companies, governments and nonprofit organizations flow through the PR Newswire system each day. Editors and reporters often judge a press release by its name, or "slug" in journalism-ese. Most barely warrant a raised eyebrow.

However, on Monday, the service sent out a press release about a rally at Broad and Snyder in the city today at noon by a coalition of homeless advocacy organizations.

The slug? "loony-bin-rally."

At 10 this morning, PR Newswire issued the following:

PR Newswire deeply regrets an error that occurred yesterday in a news release, re-sent below. A PR Newswire staff member incorrectly slugged the release "loony bin rally." PR Newswire understands that such terminology feeds the prejudice and discrimination associated with mental illnesses and will take steps to ensure that nothing like this occurs in the future.

Dan Gross, of the Philadelphia Daily News, says the female staffer was fired.

All of which brings up the question: Have you seen similar instances of lack of judgment in your workplaces? Career-ending lack of judgment? If so, send a comment.

- Mike Armstrong

For Merck & Co. Inc., midnight can't come soon enough.

The intervening hours are all that's left for former users of its pain-reliever Vioxx to register to accept payment from a $4.85 billion settlement reached between plaintiffs attorneys and the big drug maker in November.

For the deal to go forward, 85 percent of those who have sued Merck over their health problems associated with use of Vioxx must sign up. Merck is confident that will happen, but as of Monday, little more than half of the 60,800 people who have sued have registered.

Don't look for an answer tomorrow on how many actually did register. Merck is saving that cliffhanger for a Jan. 18 federal court hearing.

- Mike Armstrong

Last Thursday, landscaper Joe Shiber joined half a dozen other landscaping contractors at the office of International Personnel Resources Inc. in West Chester to grouse about the H-2B problem. In a nutshell, the landscapers have come to rely on a workforce of laborers on temporary seasonal visas, but those visas aren't available this year.

Landscapers are definitely worried about having enough bodies to mulch, mow and weed wack this summer. The reason they had turned to foreign laborers in the first place is because, they say, they can't get good help here for the $7 to $14 an hour they are willing to pay. (Some say they'd get the help if they paid more, but that's another argument.) You can read the Inquirer story about it here:

After the meeting, Joe, an official at J. Downend Landscaping Inc. in Crum Lynne, Delaware County, was standing around chit-chatting and he told this story: The day before the meeting, a man had walked into his office, which always has a help wanted sign, and said, "I need a job. I'm the best worker in Delaware County."

Fine, Joe said. You can start tomorrow. Show up at 7:30 am. I'll be there, the guy said, but first he bummed a cigarette and five bucks to buy a pack off Joe.

Let's let Joe pick up the story -- this is from an email.

"I also wanted to update you on the employee that I hired on Wed before our meeting. If you remember I told you about a man who walked into my office and asked for a job on Wed. night. Because I am short people to do Fall Clean-up operations I hired him and instructed him to come in on Thurs. morning. He did show up on Thurs but lasted three hours and then simply walked off of the job. This type of thing unfortunately happens all the time and is a prime example of why our companies have turned in part to foreign labor. That is not to say that we do not hire local labor, we do and try to as much as we can. We simply cannot find enough labor to do the work."

- Jane M. Von Bergen

Susan Rogers, of the Mental Health Association of Southeastern Pennsylvania, wants to make sure everyone understands that PR Newswire was immediately responsive after being made aware of the use of "loony-bin-rally" in a slug line.

In an e-mail, Rogers says:

Besides issuing the apology and re-running the press release, they are not charging us the $295 that the press release would normally have cost to send out. They also said they would consider our recommendation that they develop policies spelling out acceptable language and to possibly institute staff sensitivity training and education around mental health issues, which I said we would be happy to help with. So they have done everything they could to make up for the actions of the fired staffer.

Rogers said PR Newswire told Mental Health Association officials that the business provides "extensive training on appropriate workplace standards." She said that they circulate an in-house newsletter that deals with "a wide range of health issues, including mental health."

The association has worked with the press release delivery service for "many years, and this is the first time anything like this has happened," Rogers said.

- Mike Armstrong

One more little tidbit out of that H-2B visa story -- the one about landscapers who have come to rely on a foreign workforce for temporary seasonal help, but won't be getting it this year.

It used to be that college and high school students had the corner on summer landscaping jobs, landscapers said at a recent meeting. But now the season is longer than their summer vacations and the students are still hitting the books when the landscapers need them most.

Guess why? Mulch! Who even knew about mulch 20 years ago? Now it's ubiquitous -- the brown carpet under every bush. March and April are mulch months, as landscapers spread it by the truckload, making it the busiest time for landscapers, even busier than the mowing and weeding months that follow.

- Jane M. Von Bergen

Prince Charming these investors are not, but en garde, a proxy fight has begun.

A group of investors in Charming Shoppes Inc. has nominated three people for election to the board of the Bensalem-based apparel retailer this spring. In response, Charming Shoppes issued a statement saying its current board will not be distracted by the "threat of a proxy contest from a dissident shareholder group."

And dissidents they are, led by Crescendo Partners L.P., a New York investment firm headed by Eric Rosenfeld. Described by Barron's as an activist hedge fund, Crescendo began buying Charming Shoppes shares in early December. Together with some other investors, the group now controls 9,276,805 shares, or about 8 percent of the shares outstanding.

Crescendo agitated the board of Topps Co., the baseball card maker last spring, when it was in a deal to be acquired by private-equity funds. And Crescendo is currently pressuring O'Charley's Inc., a restaurant chain, by nominating four people for election to its board.

On Monday, the group, calling itself the Charming Shoppes Full Value Committee (rolls right off the tongue), notified the company it was nominating:

* Michael Appel, a managing director of Quest Turnaround Advisors
* Arnaud Ajdler, a managing director of Crescendo Partners II L.P.
* Robert Frankfurt, president of Myca Partners.

Then today, the committee sent a letter to the board blistering its current strategy, how it allocates capital and its low stock price. The dissidents say they would encourage exploring the sale of real estate, credit card operations and Charming's catalog business; slow its store expansion; cut overhead; and buy back shares.

On a day packed with releases of government statistics on the economy, one to watch will be the 2 p.m. release of the Federal Reserve's 'beige book' report. The Fed publishes it eight times a year.

It is a compilation of anecotal information about current economic conditions in the 12 districts that make up the Federal Reserve system.

So yes, we'll be getting a snapshot of how Philadelphia is faring during this economic slowdown. Check back this afternoon for details.

In the meantime, if you want to do like I am, check out the Fed's beige book page and read up on last year's reports. It ain't poetry:

Business activity expanded modestly in the Third District in October and early November.

But you can limit your scanning to the Philadelphia portions. I'll be looking for a change in the bank lending environment.

- Mike Armstrong

The Scientist, a trade publication based in Center City, has long dubbed itself the "magazine of the life sciences."

Its January issue contains a supplement that focuses on the Philadelphia-area's biotechnology and life sciences industries. It's also available on the Scientist's Web site.

Some of the stats tossed around sound familiar ("home to 15 leading pharmaceutical companies"), but others seem to have been statistically forged by BIO ("top life science cluster" behind Boston and San Francisco). Still, the Scientist has covered a lot of what a business reporter wants to know about an industry. I have my reading cut out for me ...

- Mike Armstrong

Got a spare 3 minutes?

Staff writer Suzette Parmley was interviewed by WDEL-AM's Allan Loudell on his newshour on Monday about the first decline in gambling revenue in Atlantic City since New Jersey legalized casinos.

You can hear the clip on the Wilmington radio station's podcast page. Just search for "parmley" to reach the right link.

- Mike Armstrong

Hate to be a killjoy on the doom-and-gloom scene, but the Federal Reserve's "beige book" report finds that business activity "increased slightly" in December in the Philadelphia region.

Manufacturers? "Modest increases in new orders and shipments."

And those banks I wondered about this morning? "Overall bank lending has been rising slowly, with better growth in business lending than in consumer and real estate lending."

Retail was soft and residential real estate sales were lower than last year. But the big service sector reports business has been "expanding steadily."

And the overall forecast? Continued growth, but companies have "scaled back their forecasts for 2008."

- Mike Armstrong

The monthly survey of Philadelphia-area manufacturers indicates that sector weakened in January, according to the Federal Reserve Bank of Philadelphia.

The report says that its indexes of new orders and "general activity" fell sharply. That's the indexes show that. This survey, called the Business Outlook Survey and released the third Thursday of the month, is presented as a diffusion index.

The footnotes to the Philly Fed's survey say this:

"Diffusion indexes represent the percentage of respondents indicating an increase minus the percentage indicating a decrease."

While it sounds more esoteric than saying that new orders fell by 2 percent last month, for example, there's no ignoring how gloomy this Fed survey is. The current general activity index touched a level not seen since 2001.

It noted that price pressures were elevated. More manufacturers recorded increases in their "input" prices and passed on price increases for their own goods.

The outlook for manufacturing growth over the next six months was also less optimistic than in December.

- Mike Armstrong

The son of the late founder of Airtrax Inc. has resigned from the board of a small Blackwood maker of specialized vehicles.

Peter L. Amico Jr., in a letter dated Jan. 10, said he no longer sees his participation on the board of directors as "productive."

"My father, the Founder, biggest believer and hardest working man I knew would be proud that I served in his company," Amico writes in his letter, filed with the Securities and Exchange Commission Wednesday. "Airtrax was his concept. A concept that took years to bring to fruition."

That concept was a wheel that can move in all directions. The "omni-directional technology" was designed and manufactured by Airtrax via a technology transfer deal with the U.S. Navy. The company has developed military and commercial vehicles that use the wheel technology, but has struggled to complete orders.

Airtrax was started in 1997 by Peter Amico Sr., who died Aug. 25, 2006. The company said in another regulatory filing that Amico's death, which was unexpected, has limited production and sales.

Why did the younger Amico quit the board? His letter offers this: "The disagreement with the family estate is concerning, and will only create conflict, which would impede with the business of Airtrax ...."

He concludes saying that the Amico family wants Airtrax to succeed and "wishes the best of the Company and its employees."

- Mike Armstrong

Carl Dranoff has rescued and transformed former industrial buildings such as the RCA Victor building in Camden and the GE building in West Philadelphia. Now the developer looks to be part of the rescue of Newark, N.J.

The New Jersey Performing Arts Center and Dranoff Properties Inc. will announce today that they have a deal to develop a mixed-use residential and retail project in the North Jersey city that has lagged Jersey City and Hoboken, which have emerged as real alternatives for Manhattanites. Called Two Center Street, the $200 million development would include a 250-unit luxury-apartment tower of between 30 and 40 stories, 30,000 square feet of retail space and parking.

The arts center opened in 1997 and has had aspirations to be the development engine for Newark. Two Center Street would be the first new building on the 12 acres that the nonprofit group controls.

Lawrence P. Goldman, president and chief executive officer of the arts center, said Dranoff Properties was selected from a short list of five developers. Technically, what Dranoff has won is a letter of intent giving him a nine-month period of exclusivity to reach a development agreement.

A financial Web site has found a hot investment in Philadelphia: houses in the Society Hill neighborhood.

Forbes.com calculated a 184 percent increase in the median sale price of a Society Hill house between 1990 and 2006. Noting how Philadelphia real estate tends to be "some of the most stable in the country," the Web site said:

"In this otherwise affordable city, more than 10% of the homes in this neighborhood command more than $1.5 million."

(From a map on Forbes.com, it looks as if the magazine considered the boundaries of Society Hill as the area between Walnut and South streets and Seventh and Front streets.)

Matt Woolsey's full story on America's most lucrative neighborhoods also features Boston's Charlestown, Chicago's Wicker Park, downtown Minneapolis, and the Sweet Auburn/Grant Park area of Atlanta.

Woolsey writes:

The most obvious trend in the neighborhoods here: many of them weren't valuable in 1990. That's good news for those who invested.

Remember: This is a backward-looking indicator. Past performance is no guarantee of future gains.

- Mike Armstrong

After you read Joseph N. DiStefano's story on Friday morning's protest by the SEIU over a speech the head of the Carlyle Group, take a gander at the New York Times' DealBook site which has a post on the action outside the Park Hyatt hotel.

Another rough week for investors in Radian Group Inc. as its shares slumped 33 percent to close at $6.00 Friday. The Philadelphia provider of mortgage and other financial guarantee insurance really didn’t make any news. But shares of all such specialty insurers fell after credit-rating agencies said they may downgrade competitor Ambac Financial Group Inc.
- Mike Armstrong

As a teen-ager, Kirk Harman loved watching buildings go up. Today at 52, he is riding a boom in casino construction as president of the Harman Group of King of Prussia, the only structural engineering firm in Pennsylvania with significant gaming experience.

In 2001, his firm landed the coveted Borgata Casino Hotel & Spa project in Atlantic City, a towering Las Vegas-style mega-casino. Now its credits include the Mount Airy Casino Resort in the Poconos, Mohegan Sun at Pocono Downs in Wilkes Barre, the parking garage at Harrah’s Chester Casino and Racetrack, and the Majestic Star Casino and Valley View Downs, both in Pittsburgh.

Harman has landed the Foxwoods and SugarHouse accounts in Philadelphia. In New Jersey, it is working on the $2.5 billion Revel Entertainment Group casino on the Boardwalk and is wrapping up work on the new hotel towers at the Borgata and Trump Taj Mahal.

A graduate of Lafayette College and Drexel University, Harman started a firm with Jim Cagley in 1984, then in 2004 bought out Cagley and created the Harman Group, now with three other shareholders -- Janis Vacca, Malcolm Bland and Cliff Schwinger.

Q: Why did you get into this line of work?
A: When I was in high school I worked for a residential contractor in the summers, and I was completely thrilled with the whole prospect of building things. Although after a couple of summers digging ditches and cleaning out completed homes and all that labor-type work, it was clear it’d be a really good idea to go to college and do something in the construction process.

There are a number of times in a small drug company's development that it faces crucial tests.

Exton-based Adolor Corp. confronts one this week when it goes before a panel of advisors to the Food and Drug Administration over its compound to treat constipation after bowel surgery. That panel will vote Wednesday on whether Entereg should be approved.

Entereg would be Adolor's first drug, and it has been working on it with GlaxoSmithKline, which bought the rights to co-develop and market Entereg for as much as $270 million in 2002.

Shares of Adolor rose 22 cents, or 5.5 percent, to $4.25 Friday on news that FDA reviewers found the drug to be effective. There are currently no drugs approved for this condition. However, the 103-page briefing document also indicates the FDA has questions about the safety of Entereg, including serious heart problems.

Should reporters serve on boards of directors? Or editors, for that matter?

Pennsylvania American Water Co. in Hershey thought its board could use the outside perspective that a Pittsburgh television reporter would bring. So it named Jon Delano of KDKA-TV on Wednesday to its nine-member board. And the subsidiary of Voorhees-based American Water e-mailed a press release detailing the career path of Delano, “the station’s award-winning money and politics editor.”

KDKA's Web site says Delano joined the station full time in 2001 with a special emphasis on political analysis. He also hosts a weekly public affairs program called the KDKA Sunday Business page and writes a nightly feature called Money Minutes about financial tips.

All journalists are concerned with conflicts of interest or even the appearance of a conflict. In all the years of reading announcements of new board members of for-profit companies, I couldn't remember seeing a reporter serving on one.

After sending the water utility's announcement to KDKA to check its policy, I got an e-mailed response from news director John Verrilli, in which he said that station management was not consulted in advance of the board appointment:

"After Jon was made aware of the Station's concerns about the appearance of a conflict of interest, Jon has made the decision to resign from the PAW board effective today."

Catching up on regulatory filings from Friday:

AmerisourceBergen Corp. , the wholesale drug distributor, issued its proxy statement Friday for its upcoming shareholders meeting.

The company, with its headquarters in the Chesterbrook Corporate Center in Chester County, is one of the nation's three biggest drug distributors behind Cardinal Health Inc. and McKesson Corp. So naturally, AmerisourceBergen would compare itself, and the pay of its top executives, with those companies.

But the compensation committee casts a wider in assembling a 13-member "peer group" for benchmarking purposes. Besides Cardinal and McKesson, AmerisourceBergen believes it competes with the following for executive talent:

Costco Wholesale Corp., CVS Caremark Corp., Home Depot, Inc., Ingram Micro Inc., Kroger Co., Safeway Inc., Supervalu Inc., Sysco Corp., Target Corp., United Parcel Service Inc. and Walgreen Co.

No, those aren't all health care-related. Names like Target, Home Depot and Supervalu (parent of Acme Markets Inc.) might seem odd to benchmark against. But think of it this way: all of these companies have in common national distribution systems and spend heavily on information technology to keep themselves at or near the top of their respective fields.

The president and CEO of Starwood Hotels & Resorts Worldwide Inc. says he will not stand for re-election to the board of Bensalem-based Jones Apparel Group Inc.

Frits van Paasschen, who joined the Jones board in November 2006, cites "heightened time and travel demands" from his current job, which he got in September. When he joined the Jones board, he had been the CEO of Coors Brewing Co., which was acquired by Canadian brewer Molson.

Jones' annual shareholders meeting likely will occur in June as it has in previous years.

- Mike Armstrong

True Product ID Inc. , a tiny Philadelphia company working on anti-counterfeiting technology, has hired as the head of the China Trade Center of Philadelphia.

KeKe Wang, 47, who organized the first two trade missions for the city of Philadelphia to China in 2001 and 2006, will be president of True Product. A regulatory filing says he will earn no less than $150,000 per year.

Wang founded the China Trade Center in 1992, according to the document filed with the Securities and Exchange Commission. He also helped start Pennsylvania's first trade office in China in 1993 and was appointed in 1996 to represent the state in Tianjin, China's fourth-largest city.

- Mike Armstrong

Asian markets have sold off for the second straight day, and the futures market in the U.S. indicate a deep drop at the open. Dow futures were down more than 500 points around 6 a.m.

Now usually comes the caution that futures activity is not a good predictor for how a particular trading day will unfold. But today could the exception because the world markets have sold off so heavily.

Will the activity trip the "circuit breakers" that the New York Stock Exchange has in place to handle days when panic selling occurs?

It would take a 1,350-point drop in the Dow Jones industrial average to do that. No one's predicting that. But hold on tight, just in case.

- Mike Armstrong

So never mind about "panic" on the Street.
The Federal Open Market Committee launched a pre-emptive strike this morning against what was looking like a huge downdraft in the U.S. markets: It will lower the federal funds rate 75 basis points to 3.5 percent.
That's a cut coming before its scheduled two-meeting at the end of this month.
It's happened before, but an interest rate cut coming between meetings is a rare event.
Was it the right move? Is it coming too late to head off a recession?
- Mike Armstrong

Don Gayhardt, president of Dollar Financial Inc. , will resign as of May 31.

The Berwyn operator of check-cashing stores said that Gayhardt, who's been an executive there since 1990, will be pursuing "opportunities in the private equity industry."

In a news release, Dollar Financial CEO Jeff Weiss says:

"While it is with great regret that we announced Don's resignation, I look forward to continuing to benefit from Don's counsel on company matters relating to corporate strategy, acquisitions, and regulation."

Weiss says he and Gayhardt built Dollar Financial from a small chain with $14 million in annual revenue to one with more than 1,400 locations and revenues of $409.9 million for its fiscal year ended June 30.

Gayhardt, who will also step down from the board of directors, will not be replaced. A filing with the SEC says that he will be paid "an amount equal to his base salary" and contribute to the cost of his health insurance premiums for one year.

According to Dollar Financial's most recent proxy statement, Gayhardt earned a salary of $475,000 for its most recent fiscal year.

Shares of Dollar Financial were down about 3 percent, or 84 cents, to $22.23 shortly after noon.

- Mike Armstrong

Latest PhillyInc videocast is here.

(Clicks takes you to Philly.com's multimedia page.)

Given yesterday's market gyrations and Fed rate cut, it wouldn't be a surprise if many people missed these news items yesterday.

DuPont Co. and Johnson & Johnson, two companies that employ 14,400 people in the Philadelphia region, issued fourth-quarter earnings results on Tuesday. DuPont reported lower net income, but managed to beat analysts' estimates. Johnson & Johnson's earnings were 10 percent higher.

These are giants in the chemicals and health-care industries. But their conference calls were drowned out by the wail of worry emanating from the world's stock markets.

At any other time, a 10 percent increase in the worldwide sales of Remicade, the drug developed by Horsham-based Centocor Inc. , would warrant a second look. At $3.33 billion in sales, Remicade is one of the most lucrative drugs to emerge from Philadelphia's life-sciences sector.

Perhaps on another day, investors might have paid attention when DuPont chief executive officer Charles O. Holliday Jr. explained how the Wilmington company has benefited from compound annual sales growth rates of 18 percent in Asia's emerging markets.

It's hard to focus on tales of growth when so many are nervous about recession.

- Mike Armstrong

Delaware, the state where many corporations are born and die, is host to the Chapter 11 bankruptcy case of Buffets Holdings Inc.

The Eagan, Minn., company is probably not familiar to many Philadelphians. If you're a fan of all-you-can-eat dining, you've probably bellied up to the 12 Old Country Buffets in the region.

Nothing will change at those buffets as the 626-store chain reorganizes after swallowing a big competitor, Ryan’s Restaurant Group Inc., more than a year ago. Among the unsecured creditors is Westville's J. Ambrogi Foods, which is owned $185,594.

View this bankruptcy as the treatment for a bad case of corporate indigestion rather than reflecting any change in the eating habits of Americans.

- Mike Armstrong

Another "vote" for Arbitron's electronic ratings service.

Entercom Communications Corp. , the Bala Cynwyd-based owner of 64 radio stations around the United States, has signed a contract to use the New York company Portable People Meter service that measures listenership.

While advertisers favor the electronic system over the traditional paper diaries, the system has been controversial. Radio station operators, especially those in large markets, have complained about both the size of the sample audiences being measured and their diversity.

People meters have been used in the Philadelphia market for more than a year. Entercom does not own any stations locally.

- Mike Armstrong

After getting pressure to split up the company, Unisys Corp. is talking with the hedge fund that has been pushing for change.

To enable the Blue Bell computer services company to continue those discussions with MMI Investments LLP, of New York, Unisys said today that it is postponing a deadline for advance notice of director nominations and shareholder proposals to Feb. 19.

Unisys issued the following in a statement this morning:

Like MMI, the Unisys Board and management believe that Unisys shares are substantially undervalued and that the company's current share price does not appropriately relfect the value of the significant improvements achieved in the company's operating performance and profitability.

MMI, which is run by Millbrook Capital Management Inc., made its call for a breakup of Unisys earlier this month.

Unisys hit its high of $9.60 on July 5. Shares were trading at $3.34, down 6 cents, early today.

- Mike Armstrong

Think the 2002 Sarbanes-Oxley Act is toothless?

Met-Pro Corp. this morning disclosed that it would restate its financial results for each quarter since Jan. 31, 2007, after discovering errors made by a non-officer level sales employee.

The errors center on the premature recognition of net sales and net income. The Harleysville company had this to say:

The financial statement errors were the result of unauthorized actions by one non-officer level sales employee, in violation of the Company's policies, including its revenue recognition policy. The employee has since been placed on administrative leave pending further investigation.

Shares of Met-Pro were down 10 percent, or $1.06, to $9.96 around noon.

By a 9-6 vote, a panel of advisers to the Food and Drug Administration has approved Adolor Corp.'s first drug this afternoon. The next step for the Exton drug company is to await a decision by the FDA, which usually follows the advice of its expert panels.

Adolor shares never traded on Wednesday. Trading was halted pending the decision by the Gastrointestinal Drugs Advisory Committee. Adolor shares closed at $4.59 on Tuesday. Look for a small pop in the price on Thursday.

- Mike Armstrong

Investigations by the Office of the Comptroller of the Currency led the board of Commerce Bancorp Inc. to oust Vernon W. Hill II, its chairman and CEO last year, according to a federal lawsuit filed by Hill last week.

Now, the regulator who oversaw that investigation just got a promotion. Tim Long was named senior deputy controller for bank supervision policy. (He's succeeding a 42-year veteran of the agency who's retiring in April.)

- Mike Armstrong

Doctors are voting with their prescription pads: They're writing fewer scrips for Vytorin and Zetia.

A Mount Laurel, N.J., company that tracks physician prescribing behavior said that primary-care doctors use of Vytorin, a drug marketed by Merck & Co. Inc. and Schering-Plough, has declined from 15 percent of new treatment decisions to 5 percent.

Cardiologists tracked by ImpactRX Inc. reported a decline from 15 percent of new treatment decisions to 8 percent.

Those drops shouldn't be surprised coming 10 days after the release a study by Merck and Schering-Plough that Vytorin, which combines simvastatin, one of the first cholesterol-lowering drugs developed, with Zetia, a newer generation cholesterol fighter, was not more effective than the generic simvastatin alone in lowering reducing build-up of plaque in the carotid artery.

But John Cain, vice president of marketing at ImpactRx, called the declines "puzzling" given that the American College of Cardiology recommended that doctors and patients do no make "major clinical decisions" solely on the basis of the recently released study.

In a statement he says:

The College specifically noted, 'There should be no reason for patients to panic,' but the data certainly indicate a change in attitude towards these drugs has occurred.

A spokesman for Merch and Schering-Plough told the Associated Press the companuies have pulled the "people who look like food" ads that have been running on television. Advertising Age said the latest turns in the Vytorin tale are "fanning the flames of public mistrust for the $5 billion direct-to-consumer drug industry."

- Mike Armstrong

Citibank opened its latest branch in Center City at 1211 Walnut St., its first this year in the Philadelphia region where it has 13 branches.

But a story in this morning's Wall Street Journal indicates parent company Citigroup Inc. is "abandoning a push to open as many as 100 branches a year in the U.S."

Why? The new top management isn't convinced Citibank can leapfrog competitors who have dominant shares in various markets. Philadelphia, the Journal says, could be one of the markets where Citibank retreats. Market leader Wachovia has 207 branches in Philadelphia area, while Bank of America has 117 branches.

Journal reporter David Enrich writes that Citigroup executives are:

... pleased with with Boston branches, but are less impressed with the Philadelphia experiment, according to one person familiar with the situation.

The news release from this morning's branch opening in Philadelphia quotes William E. Brown, Citibank's market leader here, as saying:

Philadelphia is a priority market for Citi and we are committed to expanding our presence here.

A call is in to a Citibank spokesman.

- Mike Armstrong

Denying a report in today's Wall Street Journal, the Citibank official in charge of the Philadelphia market says that the big bank is here to stay.

William E. Brown said in an interview this afternoon that Citibank, which has opened 21 full-service branches in the region in the last 15 months, is committed to Philadelphia.

"Citigroup recognizes this is a region that we want to be in," Brown said.

He would not specify how many branches the bank intends to open here in 2008, saying only that two branches are under construction: one in Doylestown and the other in Plymouth Meeting.

Citigroup executives have expressed "no disappointment with how the branches are performing," Brown said.

- Mike Armstrong

Claymont Steel Holdings Inc.'s brief turn as a public company is over.

Evraz Group S.A. , a steelmaker owned in part by Russian billionaire Roman Abramovich, completed its purchase of Claymont Steel in a deal valued at $564.8 million, or $23.50 per share.

Claymont Steel manufactures plate steel out of scrapped railroad cars, automobiles, and other sources of scrapped steel at its mini-mill in New Castle County, Delaware.

The operation has had a string of owners in recent years following the bankruptcy of Phoenix Steel in the '80s. First, a Chinese company bought the operation out of bankruptcy. A Miami hedge fund bought Claymont Steel in June 2005 for $75 million. It took the company public in an offering completed Jan. 23, 2007.

Evraz is a steel and mining company that owns three huge steel plants in Russia, one is Italy and one in the Czech Republic. It also owns Evraz Oregon Steel Mills, in Portland.

- Mike Armstrong

With Pennsylvania's attorney general seeking to freeze the assets of Pure Weight Loss, a now-defunct diet chain based in Horsham, and of its owner Vahan Karian, what are former employees to do?

Pure Weight Loss operated more than 400 locations across the country, including 47 in Pennsylvania. It announced on Dec. 14 that it was closing Jan. 4. The company filed for Chapter 7 protection Jan. 11 in U.S. Bankruptcy Court in Philadelphia.

The attorney general told Inquirer staff writer Stacey Burling that Pure Weight Loss employees who are owed money by the company can file complaints with the Pennsylvania Department of Labor and Industry. To find the complaint form for unpaid wages, go to the department's Web site.

Under the Quick Links section on the righthand part of the homepage, click "Labor Law Compliance". On the next page, choose "wage payment and collection law". That's where you'll find the complaint form.

Companies that do not pay employees properly face civil penalties of 10 percent of the money due and criminal penalites of $300 per offense plus jail time of 90 days per offense, said Justin Fleming, spokesman for the department.

- Mike Armstrong

Thank the Fed for making Radian Group Inc. the local non-penny stock that moved the most last week.

Yes, the Philadelphia provider of mortgage and other financial guarantee insurance was the big loser the previous week. But this week, it rose 28 percent to close at $8.18 after the surprise cut in the federal funds rate and talk of a possible bailout for the bond insurance industry.

- Mike Armstrong

GSI Commerce Inc. chief executive and founder Michael Rubin made his first business deal before he could shave, at 12, and owned a chain of ski stores by the time he graduated high school in 1990.

Then he really got to work. Skipping a college degree, Rubin, raised in Lafayette Hill, started KPR Sports International Inc. (his parents initials), a maker of off-priced athletic footwear and apparel. He grew it into a $100 million publicly traded company, renamed it Global Sports, sold off the sportswear side, then renamed it again to GSI Commerce at the height of the dot-com bubble.

Shares in his King of Prussia, Pa.-based company that designs, builds and runs Web sites for retailers closed at an eight-year high last October, but since have slipped on concerns about the economy. Its clients have included Toys "R" US, the NFL and Gordon's Jewelers. It employs about 3,500 in nine states, Spain and the U.K. Last week, it announced a deal to acquire e-mail-based marketing firm e-Dialog Inc. of Lexington, Mass., for $157 million.

Q: You started a ski store at age 12. How did you persuade your parents to support you?
A: I always had a passion for both business and skiing. For me it was a natural. ... (My mother) said it wasn't the best idea (she) ever heard. So, I went to my father, who said he would be supportive as long as I did well in school.

The lousy January start for the U.S. stock market is giving activist hedge funds plenty of company in the misery they see.

You don't have to look far for local examples.

Comcast Corp. and its chairman and CEO Brian L. Roberts have come under withering criticism from a hedge fund that owns about 2 percent of the cable company’s shares.

Chieftain Capital Management Inc. sent a letter to Comcast's board of directors in which it called for the ouster of Brian Roberts as CEO. It also wants the board to change the company's voting structure, under which the founding Roberts family keeps control with 33 percent of the voting power while owning about 1 percent of the shares.

Corporate-governance issues tend to make many people shrug their shoulders. Everyone's a critic, right? But Comcast's shares, which closed at $17.22 Friday, are trading below where they were when the Philadelphia cable company launched its failed effort to capture Walt Disney Co. in 2004.

Even a patient investor like Microsoft Corp., which has owned more than 7 percent of Comcast for years, might listen to what Chieftain has to say.

As we all look for signs of a U.S. recession, don't ignore what the consumer with disposable income does when the going gets tough.

A story in this morning's New York Times discusses research that suggests that "pinching pennies on everything from toilet paper to yoga classes" in times of economic stress makes consumers feel better, even if it's not saving that much money.

It quotes Wharton School marketing professor Robert Meyer on "dollar-stretching consumers":

They’re seeing all this news media saying the value of your house has gone down, the value of your portfolio has gone down. Well, none of it is relative to their day-to-day spending. Nevertheless it creates a feeling of poverty, which feels bad. The way they can undo that is their daily savings perks, which make them feel richer.

Yes, these also are not people living paycheck to paycheck. But the next time you're at your daughter's indoor soccer game, ask some of the other parents how they've trimmed household expenses. Rib-eye instead of filet mignon? Kmart bobos instead of Nike Air running shoes?

Is thrift coming back in vogue?

- Mike Armstrong

Manuel Worcel, who was named president and CEO of the tiny Cardiokine Inc. in Philadelphia last week, was the prime mover behind an unusual drug development and marketing effort.

Worcel founded NitroMed Inc. in 1993. Like Cardiokine, Nitromed was focused on developing drugs to treat heart failure. Nitromed won approval from the Food and Drug Administration in 2005 for BiDil, which was the first drug approved for a single racial group.

BiDil was marketed as a treatment for heart failure in black patients, but sales have been lackluster. Total sales for the nine months ended Sept. 30 were $11 million. NitroMed halted marketing of BiDil earlier this month, laying off 70 of its 90 employees.

Worcel stepped down at NitroMed, where he was most recently chief medical officer, on Jan. 17. Cardiokine announced Worcel's hiring Jan. 22.

Cardiokine's former CEO, David Brand, stepped down in September. The company, which has raised $87 million in venture capital, signed an agreement with Biogen Idec Inc., of Cambridge, Mass., last July to jointly develop Cardiokine's lixivaptan, a treatment for congestive heart failure. Biogen Idec paid Cardiokine $50 million up front; the deal calls for the biotech giant to pay Cardiokine up to $170 million more based on reaching other goals.

- Mike Armstrong

PMC Group, of Mount Laurel, is involved in the biggest acquisition in its 14-year history.

The privately held maker of specialty chemicals and plastics has agreed to buy the oleochemical business of Chemtura Corp., of Middlebury, Conn. Neither side would release the terms of the transaction.

PMC is not a household name among the Philadelphia region's chemical companies. Founded in 1994, PMC was started by Paritosh M. Chakrabarti, former chief of technology at PPG Industries. He led the acquisition of PPG's polymer products business; his initials gave PMC its name.

Spokeswoman Patti Griggs said that the pending acquisition of the Chemtura business would be PMC's largest acquisition to date. The deal covers a factory in Memphis, Tenn., that employs 275 people. The oleochemicals business had revenues of about $175 million in 2007.

Both Chemtura and PMC expect the transaction to close by March 31.

PMC employs a total of about 200 people at two factories in Pennsylvania: Crystal Inc.-PMC in Lansdale and Polymer Products Co. Inc. in Stockertown. It also owns the only producer of audio cassettes (remember them?) in the United States. That would be Lenco Inc., with operations in Nebraska.

A global company, PMC has operations in France, India and Canada.

- Mike Armstrong

Another Philadelphia-area company that named a new CEO is TargetRx Inc.

The Horsham company tapped Craig H. Scott as president and CEO, succeeding Michael J. Luby. Scott had been president of the Catalina Health Resource division of Catalina Marketing Corp. He left following the $1.7 billion buyout of St. Petersburg, Fla.-based Catalina in October.

Catalina Health has offices in Blue Bell.

Luby, who founded TargetRx, will remain on the board of directors and a full-time employee.

The small privately held company has developed a database to help pharmaceutical companies better under how physicians prescribe drugs. Drug companies use the information in an effort to make their sales and marketing programs more efficient.

Since June 2000, TargetRx has raised $37 million in venture capital from New Enterprise Associates, Domain Associates L.L.C., Acacia Venture Partners, Quaker BioVentures, Montagu Newhall Associates and Wasatch Advisors.

- Mike Armstrong

Vanguard Group captured the title of best-selling fund group for 2007.

Financial Research Corp., which tracks the mutual fund industry, calculated that the Malvern-based mutual fund firm attracted $76.2 billion last year, compared with $42.7 billion the year before.

Vanguard squeaked past American Funds, which saw $74.7 billion flow into its funds in 2007. In contrast, American Funds attracted $74.0 billion in 2006.

American Funds still has more assets than any other mutual fund family at $1.15 trillion at the end of December. Vanguard's assets totaled $1.08 trillion.

And what was Vanguard's best-selling fund last year? Investors poured $16.9 billion into its Total Stock Market Index fund. That fund had assets of $104.7 billion as of the end of December.

- Mike Armstrong

A Plymouth Meeting company that involved in distributing pharmaceuticals in China will ask shareholders to approve a new name.

Beijing Med-Pharm Corp. wants to be known as BMP Sunstone Corp.

Why? It turns out to be a condition of one of the many acquisitions Beijing Med-Pharm has done over the last few years. In September, it agreed to buy the remaining 51 percent of Hong Kong Health Care, which owns a unit called Sunstone.

Beijing Med-Pharm management tells shareholders in its annual proxy statement that taking the Sunstone name "will better identify the Company and its subsidiaries in" China.

No change for its stock symbol, which will remain BJGP.

- Mike Armstrong

This being earnings season, there are a lot of investor conference calls held by management.

They tend to be very dry, even for reporters who love to dive into financial statements. The presentations by top managers is scripted, and the question-and-answer session often provides more questions than answers.

And the calls can be lengthy. Sometimes, we just wait for the transcript to be filed with the Securities and Exchange Commission.

So it brought a smile to read the last question of most recent call by National Penn Banchares Inc., of Boyertown. The following is an exchange by Michelle Debkowski, who handles investor relations for the bank, and Glenn Moyer, the bank's CEO:

Michelle Debkowski: Thank you, Mike and one last question for you, Glenn, who will win the Super Bowl?

Glenn Moyer: You know, there you are. This is the one that's closest, is a clear forward-looking statement, but I've got to go with perfection in New England, but it could be close.

You heard from the banking sector: The Patriots in a close game.

- Mike Armstrong

Regular readers of this blog know that one way to measure the worth of an executive to a publicly held company is to watch the stock price.

After the market closed Monday, Endo Pharmaceuticals Holdings Inc. announced that its president and CEO, Peter A. Lankau, would resign as of March 1.

A spokesman had told Inquirer staff writer Linda Loyd last night that Lankau and the board "weren't in total sync." Looks like the market agrees.

Endo shares were up 9 percent, or $2.28, to $26.44 in afternoon trading. So Lankau's decision to resign is adding $300 million to the Chadds Ford drug maker's market value.

- Mike Armstrong

For the second time in less than a year, Neose Technologies Inc. is cutting employees. This time it will eliminate 35 percent of its staff, including its general counsel.

The Horsham biopharmaceutical company is in a cash crunch. Neose also said it was halting development of its key experimental anemia drug, NE-180. Not for reasons of safety or lack of efficacy. Rather, Neose hasn't been able to line up a partner to help it during mid-stage clinical trials.

"This decision allows us to forego $60 to $80 million of incremental spending over the next two years," said George J. Vergis, Neose president and CEO, in a statement.

Last March, Neose launched a restructuring, cutting its 78-person workforce by 40 percent.

Neose said it will focus its research and development operations on two projects with BioGeneriX and Novo Nordisk.

- Mike Armstrong

With so much economic news expected today, Inquirer staff writer Joseph N. DiStefano asked a local institutional money manager for his thoughts. The following are e-mailed responses from Michael Hogan, head of equity investments at Delaware Investments, a $150 billion money manager based in Center City. Please note that his responses were sent before the release of the fourth-quarter gross domestic product report which showed the U.S. economy grew by 0.6 percent.

Question: What do you expect from today's GDP release?

Answer: We believe [today's] report will show that US economic growth slowed significantly in the fourth quarter. We expect the range to be between 0.5% and 1.5%. It is likely that the positive economic momentum experience earlier in 2007 did continue into the fourth quarter but that the strains within the housing sector and the US financial sector are causing a sharp deceleration in growth. The GDP report will likely continue to point in the direction of continued Fed easings.

Q: Do you expect the Fed will cut 50 basis points from the Federal Funds rate this afternoon? What will happen next?

A: Although we believe that the there is a better than 50/50 chance the US economy will remain out of recession - the severity of a downturn - if one should in fact happen, could be exacerbated as financial distress in one part of the economy spills over into other parts of the economy. If left unchecked - it would likely lead to a rapid deterioration in financial conditions within the economy as a whole and deepen the recession.

Because of this potential - we expect the Federal Reserve to remain particularly aggressive with monetary policy until there are strong signs that the health of the financial sector has begun to improve. We expect a further rate cut tomorrow of between 25 [basis points] to 50 bp.

Because of the complexion of the current economic weakness, it is also likely that Fed actions in the next several months are going to be far more driven by conditions in banking sector and other parts of the financial system than would be normal even if other economic indicators are producing conflicting signals.

Gov. Rendell will be giving a speech today at 4:30 p.m. to the membership of the Greater Philadelphia Chamber of Commerce.

The chamber calls it a "Conversation with the Governor."

One thing small businesses will want to know is how the Rendell administration's plans for health-care reform are changing.

Will small companies who don't offer health insurance to their employees have to contribute to a state-run or -sponsored program? If so, how will that be assessed? Will small companies that now offer health insurance dump their plans if that calculation proves to cost less than what they're paying currently?

And with California's Senate nixing major health-care reform in that state, what are the chances that Keystone state legislators will go forward with Rendell's Prescription for Pennsylvania plan?

If you're a chamber member, check out the Rendell address at the Kimmel Center's Perelman Theater, 260 S. Broad St. If not, it looks like WHYY-FM will broadcast it on Feb. 1.

- Mike Armstrong

Peter A. Lankau will receive a payment of $1.94 million in connection with his resignation as CEO of Endo Pharmaceuticals Holdings Inc.

The Chadds Ford drug maker announced Monday evening that Lankau would resign as of March 1. A document filed with the Securities and Exchange Commission Wednesday contains the terms of the "separation agreement" between Endo and its CEO.

The lump sum payment amounts to two times Lankau's base salary of $606,000 and the target incentive compensation for 2008, which is 60 percent of his salary.

The company agreed to accelerate the vesting of 131,379 stock options that it had granted Lankau during 2004 and 2005.

(Those options, which will vest March 1, carry strike prices of either $16.47 or $20.22. At Endo's stock price of $25.79 shortly after noon, those options would be worth more than $755,000 if the options had vested today.)

An additional 256,250 stock options awarded to Lankau that have not vested will lapse. Lankau also has options totaling 168,750 shares that have vested. As of today, those options are underwater, meaning their strike prices are higher than the current market price.

- Mike Armstrong

Thanks to Merck & Co. Inc.'s earnings report Wednesday, we now know the 2007 sales of Vytorin and Zetia, the drugs at the center of the latest episode to roil the pharmaceutical industry.

Merck/Schering-Plough Pharmaceuticals recorded sales of $2.78 billion for Vytorin in 2007 compared with $1.96 billion in 2006. Sales of Zetia were $2.41 billion in 2007 vs. $1.93 billion the previous year.

- Mike Armstrong

The only member of the Federal Open Market Committee to vote against Wednesday's 50-basis point cut in the federal funds rate was Richard W. Fisher, president and CEO of the Federal Reserve Bank of Dallas.

Fisher gave a speech in Philadelphia earlier this month at an event organized by the Global Interdependence Center. Yes, it was about monetary policy - all the rage now.

But he began with a nice anecdote about what Philadelphia and the Girard Trust means to him:

First, a word about Philadelphia. I spent a tad more than my Fed per diem last night and stayed at the Ritz Carlton at Broad and Chestnut. Before it became a hotel, that monumental building housed the old Girard Trust Company. True Philadelphians know the rock-solid financial legacy of Stephen Girard. In 1811, he bought the remaining shares in the First Bank of the United States and renamed it Girard's Bank. History footnotes Girard's Bank as the key financial backer of the U.S. during the War of 1812. According to one estimate, the value of Girard's net worth at his death in 1831 was roughly $2 trillion in today's dollars. Imagine: Girard made Warren Buffett look like a piker! He and his bank were so financially solid that the saying "In Girard we trust" was later morphed into the Girard Trust Company.

The CEO of Capital BlueCross testified before a Pennsylvania Senate panel Wednesday and told legislators that approval of the merger between Independence Blue Cross and Highmark could "forever close the door on a competitive statewide health-insurance marketplace."

Anita M. Smith appealed to the senators not to permit the merger of the two nonprofit health insurance giants without conditions that might permit her Camp Hill-based insurer to compete statewide using the Blue brand.

Read her testimony at Capital BlueCross' Web site.

- Mike Armstrong

Bank of America has finally tapped a new executive to replace Daniel K. Fitzpatrick, who jumped over to Citizens Bank last November.

Thomas C. Woodward was named Pennsylvania state president and Philadelphia market president today. He had been and will remain senior risk manager for Bank of America's commercial banking division handling Pennsylvania, New Jersey and Delaware.

Woodward, 51, joined Bank of America in 2006 from Wachovia. He's a Philadelphian, born in Coatesville. His 25-year career in banking began at the Industrial Valley Bank in 1979. (Raise your hand if you remember IVB!) He later worked at the Philadelphia-based banks that preceded Wachovia here.

Fun fact of the day: Woodward took a leave of absence from Wachovia in 2002 and 2003 to be chief operating officer of the Historical Society of Pennsylvania. That was when the nonprofit group merged with the Balch Institute for Ethnic Studies.

Fitzpatrick had been Bank of America's top commercial-banking executive in the Philadelphia region. He moved to Citizens in December to succeed Stephen D. Steinour, who had been promoted to CEO of Citizens Financial Group Inc., of Providence, R.I.

- Mike Armstrong

Who says that having one of the oldest populations in the nation is bad for the economy?

Senior citizens love the slots and are showing up in droves at Pennsylvania's new slot parlors, Gov. Rendell said at the Greater Philadelphia Chamber of Commerce event on Wednesday night. Pennsylvania is dominating Atlantic City and other East Coast gambling venues, he added.

"Having the second-oldest population in the nation is paying off for us big-time," Rendell told the crowd.

- Bob Fernandez

The stereotype of business and Republicans being joined at the hip is getting shaken in New Jersey.

An Associated Press story today has this comment by a Republican legislator on the New Jersey Chamber of Commerce's support for Gov. Corzine's plan to raise tolls on the state's highways:

It's a sad day when folks who claim to represent businesses support a plan that will hike the E-ZPass bills of every business and their customers by 800 percent.

That quote came from Sen. Anthony Bucco (R., Morris), who also urged members - those would be businesses - to leave the chamber.

Here's what chamber president Joan Verplanck gave as her group's rationale for supporting the efforts of Corzine - a Democrat - to get the Garden State back on solid financial footing:

The Governor's proposal represents a new way of thinking in Trenton and his out-of-the-box approach must be commended and seriously considered as an important first step. Let me make it clear that much thought - and spirited debate - went into the formulation of our position. This was not simply an easy yes or no decision - or a rubber stamp of all that has been proposed to date. Countless hours went into analyzing the minute details of an extremely complex plan.

Read the chamber's official statement on its Web site.

Corzine may be a few years from his days heading Goldman Sachs, but obviously the state chamber's leaders are voicing confidence that New Jersey's chief executive can financially engineer a turnaround.

- Mike Armstrong