It will be sufficient to introduce our April 2007 newsletter with a few announcements and get the publication out to you in good time.

Pete Deragon will be appearing at the CFA Career Development Expo in Los Angeles on April 17, at the Omni Los Angeles. Along with other industry leaders, Pete will present career enhancement advice during a resume-writing workshop.

Pete Deragon was quoted in the March 2007 issue of Registered Rep Magazine. 
http://registeredrep.com/mag/finance_sallies_back/index.html

Deragon Executive Search would like to formally welcome Sybil Johnson as the newest member of our Team. Sybil will be responsible for managing the Marketing and Research for our organization. Sybil recently moved to the Central Coast from Washington State, where she was a Financial Services Supervisor.  

Leonard Green & Partners Raise $5 Billion

Leonard Green & Partners have closed its fifth buyout fund, tapping U.S. and foreign investors to raise more than $5.3 billion. The fund is more than three times as big as the firm's most recent fund, which was raised five years ago, and accessed to invest in Petco Animal Supplies Inc. and Neiman Marcus Group Inc. among other companies. Leonard Green, founded in 1989, has invested in 42 different companies. The firm specializes in retail investments with a value between $500 million and $2 billion. John Danhakl, Peter Nolan and Jonathan Sokoloff are the firm’s managing partners.

Retained Executive Search Firm Rankings

The biggest global competitors in our space were recently profiled in the LA Business Journal:

By Rank – Company - L.A. Revenues - Top Local Executive

1. Korn/Ferry International - $20.7 - Caroline Nahas
2. Spencer Stuart - $16 - Michael Bruce
3. Heidrick & Struggles International Inc. - $14.2 - John Wasley

The top three firms held on to their leads on the list of retained executive search firms ranked by L.A. County revenues. No. 2, Spencer Stuart, saw the biggest increase in revenue last year -up $2.8 million over the previous year. No. 3, Chicago-based Heidrick & Struggles International Inc., saw local revenue increase by $2.7 million to $14.2 million, in part due to its acquisition in October of New York-based Highland Partners. Highland Partners had been ranked No. 5 on last year's list with 2005 revenues of $6.8 million.

Most firms on this year's list reported higher local revenues. Long Beach-based Executives Unlimited Inc. moved up three spots with $3.2 million in local revenue, up $700,000 from the previous year. Chicago-based DHR International did not move up on the list, although the company reported a $2.4 million jump in local revenues.  They employ 153 recruiters in local offices and were responsible for more than 1,000 executive placements in 2006.

AG Edwards Earnings

AG Edwards crushed estimates with earnings growth of 37%. Revenue increased 14% to $868 million.

Chinese Stock Market

Seven straight record closes were posted as earnings expectations continued to push Chinese stocks higher in early April.

IndyMac Executives Buying Stock

IndyMac Bancorp Inc. Chief Executive Michael Perry and Director Robert Hunt each bought more than $1 million worth of the struggling lender's shares over the past week in a likely show of support for the company. Perry purchased about 35,000 shares on March 23rd, for around $29.40 per share. Hunt, the Pasadena-based company’s former CEO, purchased the same amount between March 23 and 26 at between $29 and $29.50 per share.

IndyMac volatile stock has lost more than a 33 percent of its value so far this year, trading between $50.50 and $26.27 over the past year as investors react to escalating defaults in the mortgage industry, the collapse of the subprime market, and the slumping real estate market. More then two-dozen companies have been forced to close their doors or seek buyers since investors stopped investing in risky subprime mortgages that have seen defaults on hit record levels across the country. IndyMac has maintained that its exposure to the subprime market is relatively small, about 3 percent of its $90 billion lending portfolio.

City National Bank Acquisition

City National bought Lydian Wealth Management, a $7 billion asset subsidiary of Lydian Trust Co., which serves the ultra high-net worth and family office market. Lydian’s average client has $40 million in assets. Lydian will change its name to Convergent Wealth Advisors after the deal is completed in 30-45 days. The deal will increase City National’s assets under management to $35 billion.

2,400 Fremont Generals Relieved of Duty

In mid-March, Fremont General Corp. notified all 2,400 employees in its sub-prime lending unit that they may lose their jobs by May 18. The Santa Monica-based lender did not specify how many of the 2,400 jobs would be eliminated, saying only that “many” employees have been put on paid leave.

Earlier this month, Fremont was sent a federal cease-and-desist order from the Federal Deposit Insurance Corp., telling the company to tighten its credit policies. Fremont also said last week, that Credit Suisse AG extended its credit limit by $1 billion, in a move to shore up its finances and smooth the transition from the subprime sector. Fremont has said it will continue to operate its profitable commercial loan business and its retail banking division.

Citigroup Cuts

The largest U.S. bank will cut 15,000 jobs (5% of the workforce) in its consumer product and investment banking groups. With a goal of cutting operating expenses by $2 billion per year, some analysts say the cuts don’t go far enough. Countering that much will be achieved through natural attrition, the Private Banking and Smith Barney units have seen plenty of that in the past six months. Analysts don’t think it will be enough.

Initial Public Offerings

IPO’s were up 20% in the first quarter of 2007. 67 companies raised almost $12 billion ($11.9) vs. 56 IPO’s worth $10.7 billion in 2006. Financial firms led, with Fortress Investment group’s $729.4 million, which is the U.S.’s first U.S. Listed Hedge Fund. Fortress gained 68% on its first trading day.

ABN-Amro Bank

ABN was rumored to be entertaining a breakup of its businesses or a combination with Barclays Bank PLC.

Durable Goods

Consumer Confidence

Gross Domestic Product

New home sales and defaults

Delinquency Rates on Credit

Oil and Gas

Sales Reps in Demand

Sales representatives, teachers, and mechanics are the top three of the top ten hardest jobs to fill, according to Manpower. Sales reps topped for the second straight year, and 44% of employers reported challenges filling positions. Employers are also seeing more rejected job offers.

Los Angeles and the Middle Class

Digest of an article by Howard Fine of the L.A. Business Journal: This article highlighted that L.A.’s middle class “isn’t dead yet”. Los Angeles has added many middle-income jobs over the last six years, erasing some income inequality even as rising inequality nationwide is drawing growing attention. This is the conclusion of a study released by the UCLA Anderson Forecast, which looked at U.S. Census Bureau income data for the years 2000 through 2005. The common perception is that we lost middle-income jobs in the 1990’s, and that they haven’t been replaced. “That’s not entirely correct,” said study author Jerry Nickelsburg, senior economist with the Anderson Forecast.

To be sure, income inequality in L.A. remains more than 30 percent higher than the national average, and 20 percent higher than in 1990. Middle-income earners, while they might be growing in number, still make up a much smaller portion of the L.A. economy then they did in 1990. Middle-income workers are defined as those earning between $45,000 and $60,000 a year.

The perception of the disappearing middle-class has not changed. That’s primarily because sky-high housing prices between 2000 and 2005, and generally, the high cost of living has increasingly put a middle-class lifestyle out of reach for middle-income earners. “If you’re earning $50,000 a year, which is defined as a middle-income, you can barely afford to rent a decent apartment, and buying a home here is impossible,” said Daniel Flaming, president of the Economic Roundtable.

The recent trendline is noteworthy, given reports concluding that income inequality has continued to rise across the nation. An analysis of Internal Revenue Service data by University o California Berkeley economist Emmanuel Saez, showed that the average person in the top 1 percent income bracket earned 440 times as much as the average person in the bottom half, double the spread in 1980. Over the last 15 years, L.A. has been operating on its own set of dynamics. The huge loss in durable manufacturing jobs in the early 1990’s – primarily in the aerospace sector – led to a rapid “hollowing out” of L.A.’s middle class as laid off manufacturing workers left for greener pastures.

A flood of immigrants entered the labor market at the bottom of the income ladder, many earning less than the minimum wage. “Our peak years for new immigrant arrivals were in the early 1990’s,” Flaming said. Meanwhile, executive-level incomes were rising much more quickly, which was part of a national trend. This caused the average income for L.A. to rise, while the median, or mid-point, fell. The upshot was that income inequality in Los Angeles rose much more quickly than the rest of the nation. Indeed, the polarization in L.A. was so great and so obvious that the United Way of Greater Los Angeles produced a landmark report in 1999 called “A Tale of Two Cities.”
Economist Flaming stated, “The poverty rate really shot up at an alarming pace in the 1990’s, peaking at around 18 percent,” he said. Over the last five years, it has hovered around 16 percent, with the nationwide poverty rate staying between 10 percent and 15 percent, he added.

Chinese Labor Rates

McDonald’s in china pays employees a minimum of 73 cents an hour while KFC earn 83 cents an hour.

Employment

Jobless claims dropped at the end of March by 10,000 to 308,000, a two-month low.

Modern Communications Technology Leaders

The United States has fallen from Number 1, to seventh in the world ranking of countries adapting to modern communication technology, according to a report by the World Economic Forum. Dozens of factors were analyzed: from Internet penetration, to the price of mobile phone service to government regulations and available capital. Denmark, Sweden, Singapore and Finland edged the US.

Taxpayer’s Rights

“Service Science”

There is a new academic field in Technology and University circles called “Service Science”, which encompasses a sector comprising 80% of the United States economy. Service Science combines engineering, management, computing and social sciences to boost productivity and accelerate the offerings of services.

Fulfillment:

“I feel sorry for the person who can’t get genuinely excited about his work. Not only will he never be satisfied, but he will never achieve anything worthwhile.”
-Walter P Chrysler, founder of Chrysler Corp.

Leadership:

“A genuine leader is not a searcher for consensus but a molder of consensus.”
-ML King, Jr.

Persistence:

“None of us can be free of conflict and woe. Even the greatest men have had to accept disappointments…the art of living lies less in eliminating our troubles than in growing with them.”
-Bernard Baruch, businessman

Perspective:

“Age is mind over matter. If you don’t mind, it doesn’t matter.”
-Satchel Paige, baseball star

Obstacles

“The rock that is an obstacle in the path of one person becomes a stepping stone in the path of another.”
-Unknown

Benefits of Work:

“Every man’s occupation should be beneficial to his fellow man, as well as profitable to himself. All else is vanity and folly.”
-P.T. Barnum, entrepreneur

Winning:

“The will to conquer is the first condition of victory.”
-Ferdinand Foch, military strategist