B-school gurus say a President’s term has links to Fed actions and funds. Plus, the Old Boy network in mutual funds, and health-care beefs

by Maggie Gilmour

Watch full size video:

Stock indexes may be down 3% to 8% this year, but if history is any guide, there’s a heck of a rally around the quarter. In a recent paper in The Journal of Portfolio Management, Scott Beyer of the CFA Institute and business school professors Gerald Jensen and Robert Johnson statement public securities pay off the most at what time a President enters the second half of his designate, based forward analysis of Presidential terms from 1957 to 2004. The authors credit the pattern to the Federal Reserve, which they set down tends to sink interest rates once a President passes the midway point. True to form, the Fed began dropping rates in 2007. So how come the Russell 2000 fell 1.6% last year and a further 6.5% through Apr. 30? Jensen, a finance professor at Northern Illinois University, blames the honor crunch.

It seems the Old Boy network gets you more than an invitation to LinkedIn or the country club. A study published by Andrea Frazzini, an collaborator professor of finance at the University of Chicago Graduate School of Business, finds that mutual fund managers who invest in companies headed by dint of. the agency of fellow college alums get bigger returns. The study, co-written by Lauren Cohen at Yale School of Management and Christopher Malloy of Harvard Business School and submitted to The Journal of Political Economy, says investments in "connected firms" outdid nonconnected businesses by an average of 8.4% a year from 1980 to 2006.

Why? Frazzini has three hypotheses. One is that people exchange information more freely with people they know and have ties to. The second is that these connections accord artful info for the reason that favorably: "You cancel a golf date through me, I infer things are not going well with the business, I sell stock," he says. The third part theory is darker, suggesting some smudges under that white collar: "Insider trading was involved."

Health insurance companies have plenty of critics. Now they have one in greater numbers: Leemore Dafny, an collaborator professor at Northwestern University’s Kellogg School of Management. Insurers argue that because they compete in opposition to individual another, they keep prices down, saving everyone money. Not necessarily, says Dafny in a March paper, Are Health Insurance Markets Competitive? Dafny looked at facts from 1998 to 2005, on condition to her by a benefits consulting firm, that tracked the behavior of 200 major companies to see whether they shopped around to find the cheapest insurers. Dafny found that when these big companies made more money, their insurance providers raised their premiums. But in the room of dropping the carrier to procure a better deal, Dafny writes, companies as the world goes stuck by their freedom from disease insurers and paid more. "Carriers have power to and do take advantage of a firm’s increased profits and extract higher prices from them," she says.

Watch full size video:

SPOKANE

The body was noticed Monday afternoon, but neighbors tell KXLY Television the clean Nissan Pathfinder with license plates from nearby Kootenai County, Idaho, had been parked since about Friday.

Eighteen-year-old Kayla Snow tells The Spokesman-Review newspaper she and her friends spotted the body in the SUV space of time walking home. She says in that place were consume marks on the dead man’s hands.

Police Sgt. Joseph Peterson says the visible form was in every unusual position, and the death is considered suspicious.

The host of WineLibraryTV wants to use the Internet to make him bigger than Emeril Lagasse, Rachael Ray, and Oprah

by Catherine Holahan

View Slide Show

Watch replete size video:

Gary Vaynerchuk is still thirsty. The 32-year-old Internet celebrity has changed the way millions see wine with WineLibraryTV.com’s "Thunder Show," a popular video blog in which Vaynerchuk combines the palate of Robert Parker end the in-your-face passion of Mad Money’s Jim Cramer. He has transformed his father’s small Springfield (N.J.) wine shop, from which his make known takes its name, from a $4 million-a-year business to a $50 million-a-year willingness to make ventures that makes half of its sales through online orders. This month, Vaynerchuk even released a book, 101 Wines. But Vaynerchuk still wants other. "I want to own the New York Jets, that’s what I have need of," says Vaynerchuk. "And I absolutely believe I am going to own the Jets."

It’s big talk. But that’s Vaynerchuk’s trademark. Sitting on the arm of a high-backed leather chair in a large place of occupation atop his 40,000-square-foot wine store, declarations emanate from Vaynerchuk’s inlet like, um, wine. Wine is "awesome." He drinks from a "big-ass glass." His goal is to be the Emeril Lagasse (bigger!) of wine. "My personal brand has exploded," says Vaynerchuk. "I feel like quite this is going in a very big direction."

For Vaynerchuk, the Web was always about more than just selling wine. Vaynerchuk sees video blogs, friendly networks like Facebook, and microblogging services like Twitter and Pownce as tools for building a personal online brand. Once created, that brand can be used to sell anything from business advice to bottles of Bordeaux.

Tech entrepreneurs have long used the Web in the same proportion that a word-of-mouth marketing tool to build personality cults and audiences for their online projects. Digg founder Kevin Rose and noted technology blogger Robert Scoble are just two examples of techies turned online celebrities end social media tools that draw crowds to fresh projects. Vaynerchuk, who is known for eschewing wine galas in favor of tech events like as March’s South by Southwest digital conference, is the first to bring that business protoplast to wine. "When the tech geeks talk, I discharge one’s obligation to close attention," says Vaynerchuk.

Vaynerchuk before anything else reacted to the social Web after seeing a Saturday Night Live pare. It was 2005, and the SNL cast had released a music video online called "Lazy Sunday," featuring cast members rapping relative to erosive cupcakes and going to suffer a movie. Millions watched the digital short: e-mailing it to friends, posting it on video-sharing site YouTube (GOOG), and uploading it to peer-to-peer services. For Vaynerchuk, it was a revelation. Soon after that, he saw what video-bloggers Amanda Congdon and Ze Frank were doing—building large online cool communities around their content—and thinking he had to achieve in the game.

Initially he wasn’t infallible he wanted to do videos about wine. Vaynerchuk just wanted to get his name—his material grade—out in that place on a subject he was passionate about. His first thought was a sports video blog. Eventually, however, he realized a wine show played more to his strengths, giving him an opportunity to share his more than 16 years of industry knowledge and unique taste. "Everyone thought: ‘He’s doing WineLibraryTV to sell to a greater degree wine,’" says Vaynerchuk. "The day I started WineLibraryTV was the day I was out of the wine retail craft."

Watch full size video:

Say, a reporter with a microphone who could walk into a bar in rural Kentucky and ask some voters what was on their minds.

The night of political water-treading — commentators who had before that time declared the Barack Obama-Hillary Clinton stock over were declaring it again after the Kentucky and Oregon primaries — did little to repair the campaign’s punditry disconnect.

“It’s another one of those split-screen nights,” MSNBC’s Chris Matthews before-mentioned shortly before the networks called Oregon for Obama.

Clinton’s victory in Kentucky was massive, a “severe drubbing” in Fox News Channel anchor Brit Hume’s estimation, and exit polls showed the clear problem Obama had in attracting the votes of working class, white Democrats.

“The overall notice hither has been none more race and yet he is losing,” said Fox commentator Juan Williams.

When they addressed the under the lash, TV talkers spent much of their time debating whether this could change for the general election. MSNBC’s Joe Scarborough and Harold Ford theorized that Obama had spent small scale space of time courting these voters, and offered suggestions on how to do it.

What was lost was any real attempt by the networks to find out directly from these voters what their misgivings were, and for what cause they came to the polls to express those feelings despite being told that the nomination fight was essentially done.

“Some have said the campaign is excessively, your votes don’t matter,” Clinton told a Kentucky rally, in a part of her speech Tuesday that drew one of the strongest responses from the audience. “You know our political process is about in addition than candidates running or the pundits chattering.”

Fox News divide away from her speech before its close to go to commentating.

“I’m not sure who that works through,” Matthews said of Clinton’s reasoning.

Clinton had used the faces of Matthews and NBC News’ Keith Olbermann and Tim Russert this past week in an Oregon ad chiding the media as antidote to obsessing about the political horse race. Commentators likewise be seized of been second-guessed for essentially writing on the farther side John McCain endure year and nearly burying Clinton after her January loss in Iowa.

Because of his prominence, Russert’s declaration after the Indiana and North Carolina primaries that Obama was now the Democratic nominee was seen as a pivotal moment in the media closing the window on Clinton’s candidacy.

He didn’t back down on Tuesday.

“The pool (of up-for-grabs delegates) now is minimal, and there’s no way you can go into that lake and find enough votes to fall you over the top,” Russert said. “Everyone knows that.”

CNN’s Gloria Borger likened Clinton’s chances to those of a meteor falling aloud of the sky. Her assistant, Jeffrey Toobin, said he ground it interesting that Clinton’s poll poetry hadn’t diminished contempt so much media rumor that the pursuit had been beyond a doubt.

“People want to vote,” he aforesaid.

BOSTON The terrific diagnosis that Sen. Edward M. Kennedy has an almost certainly fateful brain tumor was “a real curveball” that left his family stunned smooth like he joked and laughed with them, his wife told her friends.

Watch full size video:

In her primary public comments adhering her husband’s diagnosis, Vicki Kennedy expressed pride in how well her husband of 15 years was handling the news.

“Teddy is leading us all, because usual, with his unruffled approach to getting the most excellent information possible,” she wrote in an e-mail Tuesday to friends.

“He’s also structure me crazy (and composition me cachinnation) by pushing to race in the Figawi this weekend,” she wrote, referring to the annual sailing race from Cape Cod to Nantucket.

An Associated Press photographer who was given access to the senator on Tuesday captured Kennedy, dressed in a gray sweater and gloomy slacks, joking and laughing by family members as he sat at a table in a family room at Massachusetts General Hospital.

Doctors discovered the cancerous tumor after the 76-year-old senator suffered a seizure over the weekend. Outside experts predicted he had not one more than three years - and perhaps in a great degree less - to live.

Family members with suitcases bunked by Kennedy overnight. Rep. Patrick Kennedy, D-R.I., was determined not to leave until doctors settled in succession a treatment plan.

“Obviously it’s tough news for any son to have an account,” said Robin Costello, a spokeswoman for Patrick Kennedy. “He’s comforted by the fact that his dad is like a fighter, and if anyone can get through a portion as challenging as this, it would be his father.”

The diagnosis cast a pall immersing Capitol Hill, where the Massachusetts Democrat has served since 1962, and came as a shock to a family all too accustomed to unforeseen, calamitous news.

“He’s had a biopsy, and we slip on’t yet have latest pathology or a plan or course of treatment. But I have to have being honest, we’ve been pitched a real curveball,” Vicki Kennedy wrote.

Doctors said the senator had a envious glioma in the left parietal lobe, a space of the brain that helps govern perception, movement and language. Malignant gliomas are diagnosed in about 9,000 Americans a year; in general, half of all patients die within a year.

“It’s treatable but not curable. You can put it into remission for a while but it’s not a curable tumor,” said Dr. Suriya Jeyapalan, a neuroncologist at Beth Israel Deaconess Medical Center in Boston.

S&P sees growth opportunities in the company’s retail and pharmacy benefit management businesses, and it ranks the stock a strong pervert by money

by the agency of Joseph Agnese From Standard & Poor’s Equity Research

Watch full size video:

We believe CVS Caremark (CVS; recent price, 43) is well positioned for market-share gains, following the acquisition of Caremark Rx in March, 2007, and the continued turnaround of recent drugstore acquisitions. We have a favorable long-term outlook on the U.S. drugstore labor, for example we expect an aging population to boost make inquiry with a view to prescription medications.

We see the March, 2007, acquisition of Caremark resulting in more than $700 million in synergies in 2008, meditative benefits from economies of lamina, including substantial purchasing savings and aloft cost reductions. In the longer term, we believe CVS’s ability to improve access and offer greater convenience through its mail and sell in small quantities businesses will help generate new customer wins, as the company leverages retail offerings to gain new clients. Additionally, we give faith to an improved merchandise batch thoughtful increased private-label goods and exclusive offerings, side by side with improved cause of satisfaction, will help CVS gain place of traffic have part.

The stock carries Standard & Poor’s highest investment recommendation of 5 STARS (strong buy).

Based in Woonsocket, R.I., CVS Caremark operates one of the largest drugstore chains in the U.S., based on revenues, net income, and store count. The company offers prescript drugs and a broad group of general merchandise, including OTC drugs, beauty products, cosmetics, film, photo finishing services, seasonal merchandise, expression of good-will cards, and convenience foods. As of December, 2007, net selling space in retail and specialty drugstores was 56.5 million square feet, with about two-thirds of its supplies opened or remodeled in the past five years. Most fresh stores being built range in size between 10,000 sq. ft. and 13,000 sq. ft. and typically include a drive-through pharmacy.

In March, 2007, CVS acquired Caremark Rx for about $26.5 billion in stock and a cash dividend. The acquisition combined two of the largest pharmacy benefit managers in the U.S. CVS’s pharmacy benefit management (PBM) segment provides a full range of services including mail-order pharmacy, specialty pharmacy services, plan design and administration, formulary management, and claims processing. Customers are primarily employers, insurance companies, unions, polity employee groups, managed-care organizations, and other sponsors of health-benefit plans and individuals throughout the U.S.

Between 1996 and 2004, the company experienced a compound plant living but a year growth rate (CAGR) as antidote to proceeds per share (EPS) of 15%, reflecting strong sales growing and slightly narrower margins, in our view. Total sales grew at an eight-year CAGR of 24%, onward an 18% CAGR in store count and higher comparable store sales. Margins narrowed over this revolution of time, resulting from to a make some change in. in the consequence mix becoming to increased sales of lower-margin pharmacy items and increased sales to third-party insurance plans despite greater sales leverage.

However, from 2005 to 2007, the company experienced a CAGR for revenues of 36% and an expansion in EBIT (earnings before interest and taxes) margins from 5.5% to 6.3%, reflecting, we believe, benefits from acquisitions and increased sales of wider-margin generic drugs. We think the company is well positioned to continue to impart positive sales and margin trends, based on one improving pipeline of new drugs expected to come to market in the next few years and benefits from the acquisition of Caremark in March, 2007.

CVS’s long-term strategy focuses on expanding its retail drug business in high-growth markets and increasing the size and product offerings of its PBM profession. Pharmacy operations are expected to be a elucidation focus, reflecting that which we see during the time that CVS’s ability to succeed in the rapidly growing managed-care arena and its ongoing gain of prescription files from independent pharmacies. Historically, the company has grown largely end acquisitions. In June, 2006, CVS acquired 700 stand-alone drugstores from Albertsons for $2.93 billion in cash.

Watch filled size video:

"This is nowhere niggardly over," Clinton before-mentioned at a rally in Maysville, Kentucky, distressing onward by her long shot call for the White House uniform in the manner that Obama focuses on November's general election match-up with Republican John McCain.

Despite Obama's almost unassailable lead in delegates who choose select the nominee at the August Democratic meeting., Clinton repeatedly has shrugged off calls to quit the race before the last of the voting concludes on June 3.

She warned the Illinois senator against premature triumph celebrations one day before Kentucky and Oregon cast ballots in the lengthy Democratic White House try the fortune of arms.

"None of us is going to have the number of delegates we're going to need to get to the nomination, although I understand my opponent and his supporters are going to claim that," Clinton, a New York senator, said in Maysville.

Obama expects to claim a majority of pledged delegates won in state-by-state races subsequent to Tuesday's returns, but he will still be adhering the point 75 short of the 2,026 needed to cramp the nomination without further help from superdelegates — party officials who are easy to back somewhat candidate.

Obama contends the remaining undecided superdelegates, who have been trending his habit heavily in recent weeks, should back him since he won the most delegates in rank voting.

Clinton says superdelegates should consider her argument that she will make a stronger total officer election foe for McCain, and her victories in big states allied Pennsylvania and Ohio give her a better base than Obama has managed.

Obama will track Tuesday's voting with a rally in Iowa, a general election battleground in which place he made his breakthrough with a huge win in the first Democratic contest on January 3. He told reporters in Oregon on Sunday, however, that he did not plan to declare victory on Tuesday.

NO VICTORY DECLARATION

"It doesn't mean we communicate victory because I won't be the nominee until we have enough — combination of pledged delegates and super delegates to be crowned by means of success the indication," Obama said.

Obama continued to converging-point on the general election fight with McCain, stepping up attacks on the influence of lobbyists in the Arizona senator's campaign.

"John McCain's campaign is being run by Washington lobbyists and paid for through their money," Obama said in Billings, Montana, a state with a June 3 primary.

McCain's general finance co-chairman, former Texas Rep. Thomas Loeffler, forswear on Sunday because of his lobbying ties, becoming the fifth person to leave his campaign because of links to lobbying. McCain's campaign manager last week asked staff to either forsake or cut their ties with lobbying groups.

McCain strategist Charles Black, criticized by Democrats for his allow lobbying activities, told reporters he had retired from his lobbying firm and he believed the McCain campaign had resolved the impression.

"I think everyone's complying equitable now," Black said.

In the Democratic race, Clinton said she had no intention of giving up the fight before the last two states, South Dakota and Montana, cast their votes.

"I'm going to make my case and I'm going to make it until we have a nominee, on the contrary we're not going to have one today and we're not going to have undivided tomorrow and we're not going to have person the next day," said Clinton, a former first lady.

"If Kentucky turns out tomorrow I will be closer to that nomination because of you," she said.

Obama is favored to win in Oregon, whither his lead in new polls ranges from 4 percentage points to double digits, and Clinton is a big favorite in Kentucky. The two states have a combined 103 delegates at stake on Tuesday.

All voting ends in Kentucky at 7 p.m. EDT (2300 GMT) and Oregon at 8 p.m. PDT/11 p.m. EDT (0300 GMT). Results are expected shortly after.

A delegate count by MSNBC gave Obama 1,901 delegates to Clinton's 1,724. He picked up five greater quantity superdelegates attached Monday, including Sen. Robert Byrd of West Virginia.

Obama has been cautious about pushing Clinton too hard to leave the race. Both candidates bear avoided criticizing each other since Obama's win in North Carolina two weeks ago moved him closer to claiming the nomination.

The Clinton campaign sent a memo to reporters saying any Obama attempt to declare himself the nominee on Tuesday would have being "a quickly in the face" to Clinton supporters.

"Premature victory laps and false declarations of victory are unwarranted. Declaring mission accomplished does not make it so," Clinton spokesman Howard Wolfson said.

(Additional reporting by Jeff Mason and Steve Holland; writing by John Whitesides; Editing through David Wiessler)

(To read more all over the U.S. political campaign, visit Reuters "Tales from the Trail: 2008" online at http:/blogs.reuters.com/trail08/)

CHENGDU, China (AFP) - Warnings of more strong earthquakes triggered panic in China on Tuesday, sending thousands of people running for safety and triggering a sharp drop on the stock emporium.