Investors

Confused? So are the best and brightest on Wall Street as they try to make sense of a housing recession and credit crunch that many experts failed to anticipate. The intense ups and downs in the stock market in recent weeks are a symptom of the confusion as the economic threats play out in a script analysts haven't read in the past. It doesn't help that even the Federal Reserve has had to amend its views. Fed Chairman Ben S. Bernanke, who previously estimated the subprime mortgage loss at $50 billion, recently pegged it at $150 billion.

En route to an 8-0 start, the New England Patriots scored points in remarkable bunches, and kept putting points on the board when the games were out of reach. Whether it was sports-talk radio, the post office, at school or just about anywhere, seemingly everyone was trying to define "running it up." In the middle of all of the discussions, it dawned on me that investors love running up the score, and don't recognize the problems it sometimes creates. In sports and investing, my definition of running up the score has less to do with points than attitude.

For years, investors have largely ignored the properties near the old American Brewery in East Baltimore, choosing to buy rundown real estate elsewhere in the city in hopes of capitalizing on appreciating values. But in recent months, interest has picked up. A former commercial laundry that has been vacant for nearly a decade has been sold to a Northern Virginia investor who says he wants to turn the nearly block-long building into a bakery or other business. Separately, two recently created corporations - one composed of a mother and daughter from Baltimore the other headed by an eye doctor in Prince George's County - have purchased a total of more than 80 discounted tax certificates from the city on vacant lots and rowhouses near the brewery and have begun foreclosure proceedings to take control of the properties.

Bruce Wasserstein, the chairman of Lazard Ltd., has agreed to sell The American Lawyer magazine and the rest of his legal and real estate publishing business to Incisive Media PLC of the United Kingdom for $630 million. Wasserstein, a former lawyer who built his career advising on acquisitions, and investors paid $63 million for American Lawyer and $200 million for National Law Publishing Co. in 1997 to form the company that is now ALM. Incisive said in a statement yesterday that it will pay cash for ALM, which publishes 33 U.S. magazines and newspapers for the legal and property professions.

Prosecutors and police say they wish their work were as simple, dramatic and conclusive as the TV show Law and Order. Journalists sometimes feel the same way. But reporting a story can be grueling - long, hard and sometimes tedious. It took Sun reporters June Arney and Fred Schulte months of exhaustive document research before they wrote a series of articles about ground rents - an obscure Colonial-era law that was being manipulated by lawyers and investors to seize homes or extract large fees from unwitting homeowners.

London's AstraZeneca PLC said yesterday that it will pay $15.6 billion in cash to acquire FluMist developer MedImmune Inc. in a deal that highlights how far the pharmaceutical industry is willing to go to shore up its future by tapping into biotechnology. The $58-per-share price tag is the highest paid for a Maryland-based company. And it's significantly more than most investors had predicted when MedImmune, whose headquarters is in Gaithersburg, announced this month that it was considering a sale.

NEW YORK -- MFS Investment Management, creator of the first U.S. mutual fund, and Bank One Corp. have agreed to settle lawsuits alleging they let favored investors reap unfair profits by improperly timing trades. MFS, the mutual fund unit of Canada's Sun Life Financial Inc., and Bank One, now owned by JPMorgan Chase & Co., said in court papers they agreed to resolve claims by investors and pension funds over the practice. Terms were not disclosed in letters to U.S. District Judge J. Frederick Motz in Baltimore.

Billionaire investor Carl C. Icahn dropped his plans to propose an opposing slate of directors for the board of Gaithersburg-based MedImmune Inc., noting the biotechnology company's decision to seek a buyer. Icahn, in an e-mail statement yesterday, said he urged MedImmune "several weeks ago" to put the company up for sale. He also said at the time that he intended to nominate directors at the 2007 annual meeting "whose intention it would be to accomplish this." In pulling back yesterday, Icahn said he reserved the right to pursue the proxy fight if MedImmune, Maryland's largest biotech company in sales and employment, fails to complete a sale.

Check your e-mail, and chances are it holds several get-rich-quick offers to buy a hot stock in a tiny, unknown company. The promotion of penny stocks, for years a staple of Internet spam and "boiler rooms" running illegal pump-and-dump schemes, has recently burst forth in splashy full-page ads in major daily newspapers. Penny stocks are volatile, risky, thinly traded securities issued by minuscule companies that are disproportionately known for having big losses, meager sales, cozy insider management and scant or unverifiable financial data.

A generation ago, ordinary folks showed up at annual auctions of properties that had unpaid taxes and fees, looking for a bargain or perhaps to help keep a neighbor from losing a home. But that homespun feel has given way to high-stakes online bidding by groups of deep-pocketed real estate investors who compete for the right to collect property liens. Three such groups paid a total of more than $8 million to buy up nearly three-quarters of the liens in Baltimore's 2006 auction. The tax sales are now dominated by investors "who have the capital to invest in dozens if not hundreds of properties," said Michael Sanderson, legislative director for the Maryland Association of Counties.

Pity the poor startup. Scores of technology startup companies in the Mid-Atlantic region have pitched their ideas to investors over the past year, only to come away with little or no funding. By many accounts, the recession and stock market losses have turned swashbuckling early-stage investors into penny-counting worrywarts. As a result, more entrepreneurs have relied on so-called bootstrapping - launching a business by funding it themselves along with help from friends and family, and keeping it as lean as possible until they can attract venture capital investment.

Wall Street greed and irresponsibility have nearly destroyed the U.S. economy. Big bonuses for bankers encourage reckless risk taking and were a principal cause of the credit crisis and Great Recession. Pay must be regulated to avoid another calamity. A generation ago, banks took deposits, made loans and collected payments. Bankers quickly felt the consequences of money loaned to folks unlikely to repay. During the 1980s, deregulation pushed up interest rates on deposits. Banks got caught with old mortgages on their books yielding less than they paid for deposits.

Another year, another disappointment for the industry that people keep calling the future of Maryland's economy. Last week, the best hope for one of the state's top biotechnology companies became a bust. Columbia-based Osiris Therapeutics disclosed that Prochymal, its stem-cell therapy for bone-marrow transplant patients, worked no better than a placebo in patient tests. Osiris stock fell by nearly half. The company founded in 1992 has never made money. It lost $150 million the last four years.

After a punishing 2008 and a poor first quarter, Maryland-based mutual funds bounced back in the spring as investors saw some good news amid the turbulence. All but one of the 166 Maryland-based stock funds tracked by The Baltimore Sun made money in the three months ended June 30, according to a Sun analysis of data provided by Bloomberg News. The exception was Ellicott City-based Hussman Strategic Growth fund, which lost less than 1 percent in the quarter. For the first half of the year, though, the fund gained 6.2 percent.

As stocks regain lost ground, financial planners say they're getting more calls from old and new clients asking much the same thing: Is it now time to dive back into the stock market? Some callers had bailed out of stocks last year in a panic and now have a bit of sellers' remorse. Others who uneasily stuck with stocks have found new courage to buy more since the widely followed Dow Jones industrial average has gone up nearly 30 percent since early March. David Berman, a financial planner with Berman McAleer Inc. in Timonium, says he has seen a shift in attitude within a matter of weeks.

Maryland start-up biotechnology companies began lining up Friday morning for a chance to apply for the state's generous, but limited, tax credit for luring investors to the industry - five days before the program can officially accept applications. As of 4:30 p.m., representatives from 11 companies had written their names on a whiteboard in a conference room at the University of Maryland's BioPark in Baltimore. The state will officially accept applications July 1 for the Biotechnology Investment Incentive Tax Credit - which allows for a 50 percent tax break, up to $250,000, per investor in a company.

This 1914 rowhouse will offer more green features than standard energy-efficient appliances. There will be bamboo floors, insulation made from old newspapers, a light-colored roof that reflects the sun and more. It's one of many area homes getting the eco-treatment, a movement growing in appeal with homeowners who want to lower utility bills and tread lightly on the planet. Only this house in Remington is being rehabbed by real estate investors. And when they put it on the market next month, it may illustrate just how far the trend has come - investors, lenders and construction companies of all sizes are joining governments, nonprofit groups and private owners in accepting that going green can make green, as in money.

The bankruptcy restructuring of General Motors and Chrysler threaten to crack the foundation of economic growth and development in this country. These two corporate restarts set new precedents, and how they are being handled has serious ramifications for the future of the U.S. economy and for Maryland. Now is not the time to be creating roadblocks to economic recovery - but that's precisely what this process may do, by scaring off potential investors. Ownership and control of GM will primarily be in the hands of the federal government and the United Auto Workers.

Even the sourpusses and Eeyores have lightened up. New York University economist Nouriel Roubini, who was talking about a "near depression" last fall and government takeovers of major banks as recently as April, now says "there is light at the end of the tunnel." Economist and New York Times columnist Paul Krugman said in speech last month that "GDP growth in the United States will be positive in the second half of the year," as if he had adjusted the fit of his underwear. Has the economy turned around?

It is the year of living cautiously for investors with individual retirement accounts. The economic problems that felled investments and job security have turned many formerly eager IRA investors into tentative souls. "We've seen a slight increase of a few hundred dollars per account in the IRA contributions made in 2009 compared to last year, which is the good news," said Ken Hevert, vice president of retirement savings products for Fidelity Investments. "However, we've also seen an overall decrease in the number of people actually making those IRA contributions."