The last time I wrote about savings bonds, in May, plenty of readers thought my math had to be wrong because I reported the “earnings rate” on the Series I bond would be zero percent.

But no. Had you bought a Series I bond between May 1 and Sept. 30, the Treasury Department would pay you nothing for six months after the issue date. It was equivalent to sticking $50 in a shoe box for half a year.

Zero percent came as quite a shock for some, because in the previous six months they could have bought an I bond paying 5.64 percent.

Sales of savings bonds have fallen steadily. According to the Bureau of Public Debt, sales of Series I bonds went from $180 million in April, before the rate change, to a low of $52 million in September.

For the federal fiscal year ended Sept. 30, the U.S. government sold $1.66 billion in Series I bonds, down from $1.92 billion the previous year. An all-time high of $8.12 billion in Series I bonds were sold during the 2003 fiscal year.

As an investment, savings bonds tend to appeal more to the Greatest Generation than Generation Wired. The readers who called me had different reasons for buying them, but they had a common question: “Will the rate ever go back up?”

It was a good one because Series I bonds have a rate that adjusts with inflation. Given that more economists are worried about deflation right now, that didn’t bode well for a rebound in savings-bond rates.

But Monday, the Treasury Department set the rate at 3.36 percent for a Series I bond bought between Nov. 1 and April 30, 2010.

What accounted for the shift? First, Treasury raised the fixed portion of the I-bond rate from 0.1 percent to 0.3 percent. But also, the Consumer Price Index for all urban consumers rose from 212.709 to 215.969 from March 2009 through September 2009, according to the Bureau of Labor Statistics, which tracks inflation.

For the previous six months, the CPI was negative, but you can’t have a negative earnings rate on a savings bond. So Treasury set the Series I rate at zero for bonds bought between May 1 and Oct. 31.

Yesterday, Treasury also increased the earnings rate on Series EE bonds to 1.2 percent from 0.7 percent.

Even as major U.S. stock market indexes have risen more than 50 percent since their March 9 lows, few people are willing to go out on a limb and shout that they’re headed higher.

Few, that is, except Robert Froehlich, who recently joined Hartford Financial Services Group Inc. as a senior managing director. What’s he shouting? That the Dow Jones industrial average will close above 11,000 by the end of the year and rise 20 percent in 2010.

Froehlich, likely the most bullish man on Wall Street, has spent the last two days in Philadelphia talking to investment advisers, including those at Raymond James and Smith Barney. He freely admits to being “out in left field with my views.”

To Froehlich, the Dow’s climb from 6,547.05 on March 9 to close above 10,000 on Oct. 14 for the first time in more than a year represents a “taking back of an over-reaction” last fall.

He has five reasons why he thinks stocks will move higher even as others worry they’ve come too far too fast.

First, many companies are reporting revenue growth again, not just earnings growth fueled by cost-cutting.

Next, Froehlich sees global GDP in 2010 rising much faster than the current top-end projections of 5 percent.

Third, he believes “the U.S. consumer is not as bad off” as everyone else says.

Fourth, business spending will pick up in 2010 as corporations post higher earnings. And finally, most of the federal stimulus program will be spent over the next year.

There are two things that would cause the strategist who calls himself “Dr. Bob” to retreat from his bold call.

If the Federal Reserve were to begin raising interest rates before the mid-term elections next November, “that would hurt,” Froehlich said. The other X-factor is if crude oil were to spike into the triple digits again.

The Fed has kept the federal funds rate near zero for more than 10 months, but oil has risen 136 percent since dipping below $34 a barrel last December. Oil settled Thursday at $79.87.

Let’s give Froehlich some credit. In February, he wrote that the Dow would hit 10,000 by the end of ’09. His was a lonely call at the time, but I would expect nothing less from someone whose collection of essays, called A Bull for All Seasons, was published during the panic of September 2008.

From the time I was a kid, I’ve been a saver.

Passbook savings accounts, certificates of deposit, money market mutual funds - I’ve used them all over the years for different purposes. Now, cash accounts are where I keep the three months worth of expenses that the experts always say is the minimum we need on hand.

But until a couple of weeks ago, I hadn’t bought a CD since the mid-’90s. I’d let the last one mature shortly before buying my first house. Money market funds and my savings account with an Internet bank just seemed more flexible and convenient. No penalties for early withdrawal.

So why did I do it?

Well, I’m saving for a hefty planned expense coming next spring.

Remember the good old days of saving up for that new bike you wanted instead of reaching for a credit card? Nostalgia is nice, but I find I save better when I trick myself into doing it. For years, I had $25 a month automatically deposited from my checking into a savings account. (I didn’t miss such a small amount of money, so I upped it to $50 a couple of years ago.)

Sock away $50 a month over 10 years and you’ll have more than $6,000. Some would say that’s almost real money.

How am I tricking myself into saving for this expense? I “depleted” my emergency cash pile by a few thousand by putting it into a 6-month CD.

The money’s not gone. It’s not untouchable. But because I can only tap it by paying a penalty of 3 months’ interest, it feels like I have less of an emergency cash cushion.

So I adjusted the automatic deposit amount in my savings account with the goal of replacing the principal amount in the next six months. I’m hoping it won’t squeeze the household budget too much. So far, so good.

Reality check time: My CD carries an annual percentage yield of 1.55 percent. That’s better than the average 1.354 percent APY for 6-month CDs, according to Bankrate.com. And it’s better than the 1.3 percent yield on my savings account.

But I won’t yell “jackpot” anytime soon.

Still look at it this way: Every little bit helps.

Plus, six months from now, if I wind up not having to pay that expense, I will have just strengthened my household safety net.

Or I might buy a new bike.

Many public companies took advantage of September’s stock market rally to raise more capital.

According to Bloomberg News, there were 11 initial public offerings that raised $4.36 billion and 97 secondary offerings that raked in $19.21 billion. Compare that with only two IPOs and 37 secondary offerings in September 2008.

In the Philadelphia region, four companies completed secondary equity offerings, totaling more than $480 million, last month.

Incyte Corp., a Wilmington drug developer, raised $132 million from an offering of 20.7 million shares at $6.75 per share. (Incyte also raised $387.3 million in a convertible note offering.)

Auxilium Pharmaceuticals Inc., a Malvern biopharmaceutical company, raised $115.7 million from an offering of 3.45 million shares at $34.50 per share.

Penn Virginia Resource GP Corp., a Radnor company involved in coal and other natural resources, raised $102.7 million from an offering of 8.7 million common units at $12.30 per unit.

And National Penn Bancshares Inc., of Boyertown, boosted its capital by $133.1 million by issuing 26.7 million shares at $5.25 per share.

National Penn wasn’t the only bank with local ties to tap the public markets while the money was hot. First Niagara Financial Group Inc., which is acquiring Harleysville National Corp., raised $441.5 million by issuing 38.3 million shares at $12 per share. That was First Niagara third offering in a year.

Harrisburg-based Metro Bancorp Inc., which has agreed to acquire Philadelphia-based Republic First Bancorp Inc., netted $70.7 million by issuing 6.25 million shares at $12 per share.

Finally, US Airways Group Inc., the biggest airline at Philadelphia International Airport, received $137.3 million after issuing 29 million shares at $4.75 per share.

First Address

Rob Wonderling, who was named president and CEO of the Greater Philadelphia Chamber of Commerce in August, will outline his agenda at the group’s annual meeting Wednesday morning.

Expect the former Republican state senator who represented parts of Philadelphia’s northern suburbs to emphasize encouraging entrepreneurship and strengthening the region’s tech communities.

Also speaking at the Convention Center will be Comcast Corp. executive vice president David L. Cohen, who is chairman of the local chamber. He probably won’t be speaking about the odds of Comcast’s landing NBC Universal Inc.

And it might feel like a Sunday morning with ABC News’ George Stephanopoulos slated to give an address on the nation’s priorities.

New Wrinkle

There is no bigger day for a small drug company than when it goes before a Food and Drug Administration advisory panel to make its case for approval of its first product.

For the Exton company once known as Isolagen Inc., Friday is that day.

Plus, it steps into the regulatory spotlight with its experimental wrinkle treatment little more than a month after emerging from bankruptcy.

Now called Fibrocell Science Inc., the company is seeking approval of its Isolagen Therapy as a treatment for those skin folds that run from the sides of the nose to the corners of the mouth.

A year ago, I had little inclination to reflect on the stock market’s winners and losers for the third quarter.

With the financial crisis escalating and panic in the markets, it seemed like a worthless exercise when trillions of dollars of net worth were disappearing.

Today, the major equity indexes remain below their levels of a year ago. But they’ve come a long way back during 2009. The Standard & Poor’s 500 index is up 17 percent so far in 2009. It rose 15 percent in the third quarter.

Regionally, the pattern is similiar as reflected by the Inquirer/Bloomberg Philadelphia Index. The index of 193 companies either based in the region or with significant operations here has risen 12 percent in 2009 and 14 percent in the third quarter.

The top three gainers among local stocks that started the quarter with a price of more than $3 per share were: Kulicke & Soffa Industries Inc. (up 79 percent), Resource Capital Corp. (up 76 percent) and Quaker Chemical Corp. (up 68 percent.)

That’s an interesting group because it indicates stirring in the battered sectors of manufacturing and finance. Kulicke & Soffa, of Fort Washington, makes equipment used in the semiconductor industry. Resource Capital focuses on commercial real estate finance. Quaker Chemical, of Conshohocken, manufactures specialty chemicals.

At the other end of the scale, shares of Republic First Bancorp Inc. were down 41 percent - the biggest decline for any local stock in the third quarter. Cold-remedy maker Quigley Corp. sank 37 percent. Private-school operator Nobel Learning Communities Inc. fell 19 percent.

Yesterday was not only the end of the quarter but also the 15th anniversary of the Inquirer/Bloomberg Philadelphia Index. It began with 192 stocks and was set at 100 points based on their prices as of Sept. 30, 1994.

While the index today has about the same number of companies, there is a big difference: Financial stocks are no longer the driving force they once were. Now the giants are in pharmaceuticals (GlaxoSmithKline P.L.C.), technology (SAP AG), and media (Comcast Corp.)

Where financials once represented 34 percent of the weighting in the Inquirer Bloomberg index, they now account for only 8 percent.

Anyone who follows public companies should be familiar with the Securities and Exchange Commission’s EDGAR online database.

Earnings reports, acquisitions and stock offerings are all disclosed in various filings. But since mid-March, the online system has also been providing more information about the financings of privately held companies.

To protect investors, federal and state securities regulators require any company selling securities privately to register with them or to notify them that their offering is exempt from registration.

Companies raising money privately may file notice of an exempt offering using the SEC’s Form D. While companies have been filing them on paper with the SEC for years, it’s only been since mid-March that the agency has required that the form be submitted electronically, making it available over EDGAR for the world to see.

The capital raised by companies filing a Form D may come from venture capital or private-equity firms, or wealthy individuals. And the sums can be quite large.

A recent report by the SEC’s Inspector General’s office said 20,021 Form D filings were made in 2008. It estimated that those exempt offerings raised $609 billion of capital last year.

Among the local firms that have filed Form Ds recently are drug developer Avid Radiopharmaceuticals Inc., team-apparel maker Boathouse Sports, medical-device maker Neuronetics Inc. and Internet video provider RedLasso Corp.

Form D lists a company’s address, executives and directors, the industry sector in which it operates, and a range of its annual revenues. But the meat of the form is on Line 13 where a company discloses how much it raised.

The most recent Form D filing I read for a local company was by Xanitos Inc., of Radnor. Organized in 2008, the company is described as being in the business-services industry with revenues of $5 million to $25 million.

Xanitos’ Form D states it raised $4,175,525 from 17 investors in late July. I’d never heard of Xanitos, but I know of its CEO, Graeme Crothall, a serial entrepreneur who’s built three hospital housekeeping services companies.

I couldn’t reach Crothall by phone, but the Xanitos Web site describes the story of how he’s trying to build his fourth firm focused on keeping hospital rooms clean.

When a company has raised $22 million in venture capital and needs to raise $25 million more, what good is getting only $250,000?

It means a lot to Stephen Roth, chief executive officer of Immune Control Inc.

The West Conshohocken pharmaceutical company was one of seven area firms to receive a total $1.2 million in investment from Ben Franklin Technology Partners of Southeastern Pennsylvania. (See a related post on the PhillyInc blog for the other firms.)

Normally, the Ben Franklin program provides funds to young firms before they raise venture capital. But there’s been nothing normal about this down cycle for the venture-capital industry nationally.

“I’ve never seen it worse,” said Roth, who founded Neose Technologies Inc. in 1990 with intellectual property he’d developed at the University of Pennsylvania. He’d raised venture capital for Neose before it went public in 1996.

Many venture firms are choosing to fund only companies that have revenues, Roth said. “They’re taking the venture out of venture capital.”

Started in 2001, Immune Control is another homegrown start-up built around research from the Drexel University College of Medicine. In a nutshell, the firm is trying to control immune-cell activity using compounds that target serotonin receptors.

But as the Wall Street Journal first reported, it ran into a problem with its clinical trials of a multiple myeloma treatment: It could not find enough cancer patients.

The American Cancer Society estimates about 20,850 cases of multiple myeloma will be diagnosed this year, making it a “relatively uncommon cancer.” And Immune Control was competing for patients with Celgene Corp. and Millennium Pharmaceuticals Inc., which had ongoing studies of their own treatments.

So Immune Control halted work on multiple myeloma this summer and will pursue development of serotonin antagonists to treat asthma and psoriasis, Roth said.

But developing drugs remains an expensive process, and Immune Control will have to line up more funding, perhaps through a partnership with a large pharmaceutical company, Roth said.

Until then, Roth said he’s grateful for the support of the Ben Franklin program, which invested $500,000 in Immune Control in 2003.

An insider trading case The Inquirer and other news organizations wrote about in May 2008 got new attention today in a Wall Street Journal column.

The Game columnist Dennis K. Berman used a Securities and Exchange Commission case against an Ernst & Young partner in New York and a Philadelphia woman who worked at broker-dealer as an example of how the twists and turns in personal relationships can lead to inside tips on market-moving deals.

Berman reviewed transcripts from the trial in a New York federal court this May, and the tale he weaves leaves no one looking honorable.

Here's a link to his column.

Ex-Ernst & Partner James Gansman was convicted on six counts of securities fraud; he was acquitted on four other counts. Donna Murdoch, a managing director at Keystone Equities Group L.P., of Oaks, pleaded guilty to 15 counts of securities fraud and agreed to cooperate with prosecutors in Gansman's trial. Neither has been sentenced.

Here's another link to the original complaint.

Ernst & Young L.L.P. sees signs of more activity in the initial public offering market.

As of June 30, the accounting firm counted 28 companies that hope to go public by selling common shares. That’s down from 44 at the end of March, but that’s good because there were 10 successful IPOs in the second quarter, up from two in the first.

Just don’t look around here for an IPO revival. PRWT Services Inc., of Philadelphia, was trying to go public by way of being acquired by a public shell company. But both sides called it off last week.

If anything, the area’s ranks of public companies keep getting smaller. Acquisitions, like Dow Chemical’s purchase of Rohm & Haas, is one way we lose them. Sometimes, companies run out of cash, such as Genaera Corp., the small drug developer that is in the process of liquidating.

Other times, tiny companies simply don’t think the extra paperwork and scrutiny that come with being public is worth it.

That fits New Horizons Worldwide Inc., of Conshohocken, which is asking its shareholders to approve a 1-for-25 reverse stock split next week. Anyone holding fewer than 25 shares won’t be a New Horizons shareholder anymore, but will have the right to be paid $1.85 per share.

By doing that, the company will cut the number of its shareholders below 300, enabling it to stop filing documents with the Securities and Exchange Commission.

While the transaction will cost New Horizons about $100,000, the franchiser and operator of computer-training centers says it will save more money by being privately held. It estimates it will save about $125,000 in accounting and audit fees, $50,000 in fees for its securities counsel, and $50,000 from its directors’ and officers’ liability insurance policy.

Like other companies who choose to “go dark,” New Horizons cites the burdens, both in terms of cost and time spent by officers and staff, of the Sarbanes-Oxley Act, the corporate governance law passed in the wake of the Enron and WorldCom accounting scandals earlier this decade.

While Sarbanes-Oxley was enacted in 2002, small companies like New Horizons, which had $37.2 million in revenues in 2008, did not have to comply fully with the law until 2009.

Given that its directors and executive officers own 65 percent of shares, next week’s vote looks like a formality and New Horizons’ soon should be rebooting as a private company.