Best financial sourse

With unemployment high and personal wealth diminished, how was it that strapped consumers were paying down their credit card debt last year?

It turns out they probably weren’t. The bulk of 2009’s drop in credit card debt instead came because banks were forced to write off loans consumers failed to pay, according to an analysis of Federal Reserve data instant credit report.

Loans are typically charged off by banks once they’re 180 days past due, under the assumption that the debt won’t be repaid.

Source

Compare health insurance plans and insurance rates on family and individual health insurance. Free health quotes and more.

European Union finance ministers are uniting to oppose President Barack Obama’s proposal to limit banks’ size and risk-taking, saying his plan may run counter to EU policy, according to a draft document.

Their position, which they will ratify at a two-day meeting starting today, comes after Obama last month urged the adoption of the so-called “Volcker rule,” named for former Federal Reserve Chairman Paul Volcker. The plan would bar commercial banks from owning hedge funds and limit how much they can trade for their own account.

The finance officials gathering in Brussels will express “their concern that the application of the ‘Volcker’ rule in the EU may not be consistent with the current principles of the internal market and universal banking,” the document obtained by Bloomberg News said. “Any policy choice should avoid pushing risks to other parts of the financial system.”

The resistance underscores political divisions over how to overhaul banking regulations to prevent a repeat of the crisis that forced taxpayers to prop up the financial system. While leaders have called for a Group of 20 initiative, the U.S., Britain, and France are forging their own policies to limit compensation and risks.

At a meeting this month in Canada, Group of Seven finance ministers signaled they are rallying around a plan to introduce a levy on banks if it can be applied worldwide business cards design.

The Feb. 10 draft, entitled “Issues note on the most recent proposals of the U.S. administration in respect of Systemically Important Financial Institutions and the introduction of a financial crisis responsibility fee,” was prepared by a committee of officials from finance ministries, the European Central Bank and the European Commission.

EU Proposals

The three-page memo also considered proposals including levying a stability fee on banks and creating national or pan- European funds for future bailouts.

Swedish Finance Minister Anders Borg last month presented a plan to create a fund for future banking crises. In contrast, the Netherlands’ Wouter Bos last month wrote a letter to his counterparts welcoming Obama’s proposals and calling for a “serious debate” on the U.S. plan at the meeting in Brussels.

Jean-Claude Juncker, who heads the group of euro-area finance ministers, last month voiced concern about a common approach on bank levies given that taxes are a matter dealt with at the national level of the 27-member bloc.

Source

Making it easy to find the right instant payday loan. No fax, hassle free cash advance loans from $100-$1500 in less than 1 hour.

Drugmaker Pfizer Inc., which just bought rival Wyeth in October, said Wednesday that it would scrap testing of roughly 100 experimental drugs from their combined research operations to focus more resources on its priority areas.

New York-based Pfizer said it would continue with about 500 research projects. About 70 percent of those — and 75 percent of its late-stage research — fall within what it calls "Invest to Win" areas because of the great need for better treatments.

They are Alzheimer’s, diabetes and metabolic disorders, pain, cancer, inflammatory disorders such as rheumatoid arthritis, and mental illnesses.

Pfizer will reduce the square footage of its R&D facilities by one-third, eliminating six research sites and an unspecified number of workers.

Pfizer maintains a research facility in Chesterfield, though the company is scaling back those operations. The company announced in November that it would eliminate 600 of the 1,000 jobs at the research center and sell the property to Monsanto.

Source

In another ominous sign for state budgets nationwide, state and local governments reported another drop in overall tax revenue on Tuesday.

General sales tax, individual income tax and corporate income tax were all down in the third quarter of 2009, resulting in an overall 6.7% drop in total tax revenue, compared to the same quarter in 2008, according to the U.S. Census Bureau.

This is the fourth consecutive quarter in which tax revenue collection has fallen.

The one bright spot was property tax collection, which showed a slight increase of 3.5%, compared to the same quarter in 2008.

Total taxes collected in the third quarter were $266.5 billion compared to $285.6 billion during the same quarter in 2008.

States are wrestling with some of the worst budget deficits since the Great Depression. Rising unemployment has wreaked havoc on their vital revenue streams of personal income, corporate profits and sales taxes.

Though governors and lawmakers are reluctant to raise taxes, particularly in bad economic times, the current fiscal situation has prompted some to turn to such measures.

Some 29 states enacted revenue hikes for fiscal 2010, which began on July 1 in nearly all states. Personal income tax hikes accounted for the largest portion, some $10.7 billion. Corporate levies declined by $202.2 million. 

Source

Wall Street is in for a quiet three and a half days of trading this week with many market participants on vacation and traders mostly focused on defending this year’s gains.

"There are a lot of lights out in investment management offices," said Lawrence Creatura, a portfolio manager with Federated Clover Investment Advisors. "It’s likely to be a quiet week."

The stock exchange will close early Thursday and will remain dark Friday for the Christmas Holiday. Many traders will take the entire week off.

And with the major indexes on track to post double-digit percentage gains for the year, those money managers who are on the clock next week will probably not be making any aggressive plays.

"Investors will have a very limited focus," said Doug Roberts, chief investment strategist for Channel Capital Research. "For the most part, people are trying to protect gains."

Still, traders will have to contend with a number of economic reports this week, including the final revision to third-quarter gross domestic product, data on personal income and spending, as well as weekly jobless claims numbers.

What’s more, the lack of participation means trading volumes could be low, which tends to amplify small moves and cause market volatility.

Meanwhile, investors continue to focus on the economic outlook for next year.

The Federal Reserve said last week that economic conditions continue to pick up, even as the central bank held interest rates at historic lows. It also noted that conditions in the financial markets have improved, and that it will allow most of its asset purchase programs, launched during the height of the financial crisis, to wind down on schedule.

"The consensus is for stepwise improvement in the economy in 2010," Creatura said. "Any deviation from that script will have pronounced effect on the market."

The market may also look to the dollar for direction. The greenback regained ground against the euro last week as concerns about the economic health of some major European economies weighed on the shared currency.

Greece’s credit rating was downgraded by Standard & Poors last week, and investors will be on the lookout for red flags from other euro zone economies.

"If we see further talk that S&P and Moody’s are going to look closer at Spain, another major economy, stocks here could take a hit," said Charlie Smith, an analyst at Fort Pitt Capital Group.

On the docket

Monday: Nothing scheduled

Tuesday: The Commerce Department will release its final revision of third-quarter Gross Domestic Product before the opening bell.

Economists surveyed by Briefing.com expect GDP, the broadest measure of economic activity, to have risen at an annual rate of 2.7% in the three months ending in September.

While that would be below the 3.5% growth rate the government projected in October, it still marks a substantial improvement over the previous four quarters, in which economic activity shrank.

Shortly after the market opens, the National Association of Realtors will release a report on existing home sales in November.

Wednesday: Government figures on personal income and spending in November come out in the morning.

Economists forecast a 0.5% increase in personal incomes, while spending is expected to be unchanged from the month before.

Reports on consumer confidence and new home sales are due out shortly after the opening bell.

The weekly crude oil inventories report is also due in the morning.

Thursday: A report on durable goods orders comes out before the start of trading.

Economists believe new orders for long-lasting manufactured goods rose 0.4% in November after a decline of 0.6% the month before. Excluding transportation, durable goods orders are expected to rise 1.0%.

The government’s weekly jobless claims report is also due in the morning, but no estimates were available yet.

The stock exchange will close at 1 p.m. ET and will remain dark Friday.  

Source

Builders in November probably broke ground on more U.S. homes, and gains in consumer prices were within the Federal Reserve’s long-term forecasts, economists said reports today may show.

Housing starts rose 8.5 percent to an annual rate of 574,000, according to the median forecast of 78 economists surveyed by Bloomberg News. A Labor Department report may show the cost of living climbed 0.4 percent last month.

Government tax credits, lower home prices and borrowing costs near record lows may stabilize sales and construction into the new year. A lack of inflation means Fed Chairman Ben S. Bernanke and his colleagues today will probably reiterate a pledge to keep the benchmark interest rate low for “an extended period” to ensure the economic recovery is sustained.

“The construction market is starting to come back,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts. “Residential construction is going to contribute to growth going forward.”

The Commerce Department’s housing report is due at 8:30 a.m. in Washington. Survey estimates ranged from 540,000 to 620,000.

Also at 8:30 a.m., the Labor Department’s report may show consumer prices compared with the same time last year rose 1.8 percent, according to the survey median.

Excluding food and energy costs, the so-called core index rose 0.1 percent after climbing 0.2 percent in October, according to the survey median. The gauge was probably up 1.8 percent in the 12 months to November, the survey showed.

Inflation Measure

Fed policy makers’ long-term forecast for their preferred measure of inflation, the Commerce Department index tied to consumer spending and excluding food and fuel, calls for gains in a range of 1.8 percent to 2 percent. That gauge, which is typically lower than the CPI, was up 1.4 percent in the 12 months to October guaranteed payday loans.

The housing report may also show building permits, a sign of future construction, increased 3.4 percent to a 570,000 annual pace, according to the survey.

Favorable weather probably also played a role in boosting construction last month, according to IHS Global Insight’s Newport. November was the third warmest in 115 years of record keeping, according to the National Climatic Data Center, giving builders an opportunity to keep working. By contrast, October was the wettest in the past century, contributing to the 11 percent drop in starts that month.

President Barack Obama’s extension last month of a first- time homebuyers’ tax credit of as much as $8,000 until April 30 will also give builders reason to speed up projects over the next couple of months.

Toll Brothers

Some companies are already seeing a turn. Toll Brothers Inc., the largest U.S. luxury homebuilder that reported a 42 percent surge in fiscal fourth-quarter orders, is anticipating a gradual recovery in the market, Chief Executive Officer Robert Toll said during a Bloomberg Television interview on Dec. 11.

“There is a pretty good reservoir of pent-up demand,” he said in New York City. “We don’t know how fast we’re coming back, but we do know we’re coming back.”

The Standard & Poor’s Homebuilder Supercomposite Index has gained 53 percent since March 9, compared with a 64 percent increase in the S&P 500 Index from a 12-year low reached that day.

Any sustained recovery will require gains in employment, economists said. The economy has lost 7.2 million jobs since the recession began, and economists surveyed by Bloomberg early this month forecast joblessness will average 10 percent next year.

Source

Fenton — It has been nearly six months since the last Dodge Ram rolled out of the massive Chrysler plant here.

Now, on a weekday morning, there are perhaps two dozen cars in parking lots meant for thousands. The neat rows of shiny new pickups are gone. The smokestacks stand cold.

And six months after the closure of vast twin auto plants along Interstate 44, there is a growing conversation about just what to do them, how to take this empty symbol of St. Louis’ old economy and use it to help the new one.

It’s a tough question.

There are, after all, few uses for a one-story building the size of 86 football fields, surrounded by acres and acres of asphalt. Throw in environmental question marks and a weak economy, and the options grow even fewer.

But local leaders want to take a hard look at what those options might be.

St. Louis County is applying for a federal grant of nearly $1.6 million to establish a commission to study the site. With cash from the state, the county and the city of Fenton, officials are ready to launch a two-year, $2 million effort to plan incentives, cleanup, marketing and more.

"There’s a lot of things that could happen here," said County Executive Charlie Dooley. "How do we use this land to attract the business we want?"

That question is being asked by many cities these days. At least 20 U.S. auto plants have closed in the last two years, from Delaware to Detroit to St. Louis, and most of them face the same daunting challenges of age, size and a highly specialized use that is no longer needed.

"We’re kind of new in this game right now," said Kim Hill, who heads the Automotive Communities Program at the Center for Automotive Research in Ann Arbor, Mich. "Obviously, there are a lot of facilities that shut. There’s a lot of head-scratching going on.

Chrysler alone shuttered eight plants when it filed for bankruptcy in April. It spun them off into a separate company and now must sell them one by one under court supervision. A spokesman for the automaker wouldn’t discuss any specifics about the two Fenton plants but said they were being actively marketed. He acknowledged it would take some "creativity to get them back into productive use."

So far, just one Chrysler plant has found a buyer.

Last month, the University of Delaware closed on a $24.3 million deal for the automaker’s assembly plant in Newark, Del. The 272-acre site is across the street from the university’s campus, and the school hopes to expand there, said spokesman Dave Brond.

"It provides generations of capacity for us to grow," he said. "It adds 22 percent to the size of our campus."

The university hopes to take advantage of an Amtrak line that runs by the plant to build offices and stores around a rail station, and to partner with a medical school and a nearby Army base on research and teaching facilities.

"It was an opportunity we couldn’t pass up," Brond said.

Still, he expected it would be three or four years before any buildings were complete. And Delaware officials knew the closure was coming and started talking with Chrysler 20 months ago, eight months before the plant actually closed. That’s a contrast with St. Louis, where local leaders had focused mainly on getting Chrysler to keep operating in Fenton almost until the day of the shutdown.

That may have been a long shot, but given the thousands of good-paying jobs Chrysler supported here, it was one worth taking, said U.S. Rep. Russ Carnahan, D-St. Louis.

"Unfortunately that didn’t work," he said. "Now we’re at Plan B."

Some, such as Carnahan, say Plan B might be a next-generation automaker’s moving into Fenton, something like Fisker Automotive’s decision to buy a GM plant in Wilmington, Del., to build plug-in hybrid vehicles.

But those opportunities are few, and the longer the plant sits empty, the less appealing it becomes payday loan.

So when it comes to finding a new use, Dooley said, pretty much everything is on the table.

He will have the commission study cleanup costs and potential incentives for a developer, the prospect of breaking the 5-million-square-foot building up for several tenants, or knocking the thing down and starting over.

"We will do everything we possibly can to make something happen there," Dooley said. "That’s too much space to leave undone."

But one thing that won’t happen is the county’s taking over the site itself. It’s just too complicated, Dooley said. A private company will have to lead any project.

That’s what has happened in Hazelwood, where Ford Motor Co. closed a plant in 2006. California-based Panattoni Development Co. bought it two years later and has since demolished the 3.5-million-square-foot structure. It plans to turn the 160-acre site into Aviator Business Park, an 11-building, $200 million complex of office and warehouse space.

Site work is basically complete, said Mark Branstetter, a senior vice president in Panattoni’s Clayton office, and the company will start marketing it to tenants in early 2010. It will have some nice things to offer, he said: a good location on Lindbergh Boulevard near Lambert-St. Louis International Airport and Interstate 270, a rail line, tremendous power and water connections, and a 25-year tax abatement negotiated with the city of Hazelwood.

Even with all that, Branstetter said, it made no sense for Panattoni to keep the old buildings in place. The plan was always to tear them down.

"These buildings really aren’t made for any sort of adaptive reuse," he said. "They’re simply an envelope around a bunch of equipment. And once that equipment goes out, it has no use."

Then there’s what lies beneath the envelope.

Most auto plants made cars for decades. The ground underneath may include metals, dangerous chemicals, all sorts of things. Often, no one is quite sure what is there, or who would be liable for pollutants two or three owners down the road.

If the concrete slab is taken up, cleanup costs could easily run $10 million or $20 million, Hill said. That makes buying one without some sort of insurance or cleanup fund a risky proposition.

"That is probably the No. 1 issue in moving these properties," he said.

In Hazelwood, Branstetter said, Panattoni did extensive testing when it took over the property. It thinks it knows what is in the ground. In Delaware, Brond said, the state took on the risk and factored it into the price.

In Fenton, that is still in the future. It will be part of the task of Dooley’s commission — if it gets funding. The county executive said he hoped to hear on that by the end of the year. Carnahan, who is supporting the application, said it might be January. Either way, they want to get started.

Meanwhile, the bankruptcy court is in the process of hiring a broker to market the site, and several people close to the process say a number of potential buyers are taking a close look.

"There’s been enough interest that (advisers for the bankruptcy court) believe it’s going to be sold, probably sooner rather than later," said Fenton Mayor Dennis Hancock.

If it is, the challenge will become what happens next, and how this place that may well have put out its last-ever vehicle six months ago can find a new reason for being.

"The obstacle is in people believing that something is going to go there," Dooley said. "To a lot of people, a church is a church and a school is a school and a plant is a plant. We’ve got to figure out how to turn it into something else."

Source

Boeing Co. defense chief Dennis Muilenburg said demand for helicopters, logistics support and cyber-security services will more than make up for recent losses of Army, missile defense and satellite programs.

"No question there’s downward pressure on our revenue profile," Muilenburg, 45, said in an interview Thursday in Bloomberg’s New York headquarters. "But what we are seeing is that upside opportunities are more than offsetting some of the visible program reductions."

Boeing, the second-largest defense contractor, was hurt in the Pentagon’s 2010 budget as programs such as a missile-defense laser and an $87 billion portion of the Army’s Future Combat Systems were canceled or curtailed.

Muilenburg said Boeing is speeding efforts to enter new markets such as energy grids and expects a boost from add-on orders for Chinook helicopters and F-18 Super Hornet fighters, along with increased demand as the U.S. places more troops in Afghanistan.

"I’m not sure I buy into growth, but I don’t have a precipitous drop forecast for Boeing’s defense business either," Howard Rubel, an analyst at Jefferies & Co. in New York, said in a phone interview. "They also need to work pretty hard to keep their current book sold and to get a couple of breaks in the international market."

In military airplanes, U.S. production of Boeing’s C-17 transport aircraft may be extended through at least 2012 if Congress approves a $2.5 billion plan to buy as many as 10 extra planes in the final 2010 budget and as international interest picks up, Muilenburg said. Foreign militaries also are seeking Chinook and Apache rotorcraft.

Defense accounted for about 52 percent of Chicago-based Boeing’s $60.9 billion in revenue and 76 percent of operating income in 2008. Boeing Integrated Defense Systems is based in Hazelwood.

The plan that President Barack Obama unveiled this week to increase U payday loans with no fax.S. forces in Afghanistan by 30,000 will mean higher usage of Boeing’s transport aircraft such as the C-17 and Chinooks, as well as increased deployment of the F-18 fighter, Muilenburg said.

That will lead to more revenue from support services and spare parts, he said.

Muilenburg said his first three months on the job have made it clear to him that the repositioning efforts the company began under Jim Albaugh, who was named head of Boeing’s commercial unit on Aug. 31, need to be accelerated as an offensive move.

Boeing is working on a "regional-scale, real-world demonstration" of the power-grid protection technology it hopes to transfer from defense projects to the commercial energy market. The company won an $8.6 million grant for the pilot project last month from the U.S. Department of Energy.

The company also sees opportunities to provide large-scale integration skills to improve security across multiple weapon systems and government agencies, as the U.S. government formulates an acquisition strategy for cyber-security programs, Muilenburg said.

Potential delays to Lockheed Martin Corp.’s F-35 Joint Strike Fighter may leave the Navy as many as 250 jets short of its war-fighting requirements, and Boeing will be ready to fill the gap with its F-18 Super Hornet, which is assembled in Hazelwood. Muilenburg said. Bethesda, Md.-based Lockheed Martin is Boeing’s only larger military-contracting rival.

Lockheed must "get it on cost, get it on schedule or I have to do something to mitigate" the potential gap that may arise from any delays of the F-35 plane, Vice Admiral Barry McCullough, deputy chief of naval operations for resources, said Thursday.

Source

China and other faster growing developing nations may lure more funds away from advanced economies for the next two decades, according to Goldman Sachs Group Inc.

Those flows will counter any impact on China’s capital markets from government measures aimed at curbing asset bubbles, said Thomas Deng, Goldman Sachs’ head of China strategy. Corporate profit growth in China, estimated at between 20 percent and 30 percent on average next year, will fuel an equity market rally, said Deng. He recommended buying shares in China’s auto and healthcare industries, and companies with large land reserves in Shanghai ahead of next year’s World Expo.

“Western countries’ money is moving to oriental countries, and that means developed world money is flowing into developing countries,” Deng told reporters in Hong Kong yesterday. “This will be a trend in the next 10 to 20 years.”

Developing economies will expand 5.1 percent in 2010 compared with 1.3 percent growth in advanced nations, according to the International Monetary Fund. Asia-excluding-Japan equity funds posted net inflows of $975 million in the week ended Nov. 25, bringing the total for the year to $18 billion, EPFR Global said on Dec. 1. Flows into China equity funds reached a year-to- date high of $827 million, according to EPFR, which tracks funds holding $10 trillion worldwide.

China Index Forecasts

Goldman Sachs forecasts Hong Kong’s Hang Seng China Enterprises Index will reach 17,000 by the end of next year, according to Deng. That’s higher than his previous forecast of 16,800 in an Oct. 29 report and the gauge’s closing level yesterday of 13,341.17.

China’s CSI 300 Index will hit 4,300 by the end of 2010, Deng said. Hong Kong’s Hang Seng Index will climb to about 27,000 next year, Timothy Moe, an analyst at the brokerage, said at the same media briefing. The CSI 300 closed at 3,957.33 and the Hang Seng at 22,289.57 yesterday.

An unprecedented $1.3 trillion of loans this year and a $586 billion stimulus package pushed China’s economy to record 8.9 percent growth in the third quarter, the fastest expansion in a year. The credit boom helped the Shanghai Composite Index rally 80 percent this year and Hong Kong’s H-share index surge 69 percent. Home prices in 70 major cities in China climbed at the fastest pace in 14 months in October, the government reported Nov. 10.

Real estate in China is “slightly expensive, but not a bubble,” Deng said. The nation needs a gradual exit strategy to prevent a bubble, he said.

Bubble Concerns

China is among the emerging markets facing risks of property and commodity market bubbles, central bank adviser Fan Gang said Nov. 18, echoing the World Bank, which said last month that the nation needs to tackle the “misallocation of resources.” China’s five largest banks have submitted plans to regulators for raising money after record lending eroded their capital, according to four people with knowledge of the matter.

China’s economy will expand 9 percent this year and 11 percent in 2010, mainly driven by domestic demand and will translate into corporate earnings, Deng said.

Investors should also favor companies that will sell shares in Shanghai for the first time next year, Deng said yesterday. China Mobile Ltd., Cnooc Ltd. and China Resources Enterprise Ltd. were named as examples of companies that would likely perform well in Hong Kong ahead of their mainland listings, Deng wrote in his Oct. 29 report.

“Liquidity is favorable to Chinese shares, particularly the Hong Kong-listed Chinese shares,” the analyst said.

Source

Wall Street’s image, battered by the financial crisis, may take years to recover as its executives themselves are the first to acknowledge.

Executives from a range of financial companies — both on and off Wall Street — told the Reuters Global Finance Summit in New York that the recent economic crisis has shaken outsiders’ faith in the industry.

It has also damaged high-profile executives’ reputations and spoiled what little goodwill others had for the industry, they said.

Repairing the damage will take time, executives said, and may be impossible in some cases.

“We had a saying that it takes years to build a reputation and you can lose it overnight,” said Joe Perella, CEO of Perella Weinberg Partners and a long-time Street veteran. “And it’s hard to repair it overnight after what’s happened.”

FAILURES

Critics — from Main Street to the halls of Congress — said the industry is out of touch and ignored significant risks in the pursuit of profit, placing the global economy at risk.

The broader financial sector’s failures, critics said, are widespread check cash advance.

Mortgage companies implemented too-loose lending standards, bolstered by Wall Street’s demand for mortgage-backed securities to bundle and sell across the globe.

Even ratings agencies often failed to identify the risks being created by a handful of industry professionals.

The crisis created the largest bank failure in U.S. history and six of the ten largest bank failures since 1934, as well as the largest recession since the Great Depression.

Merrill Lynch & Co did an eleventh hour deal with Bank of America at the depth of the crisis, in part to avoid a possible collapse.

CRITICISM DESERVED

Industry executives said the ongoing furor is at least somewhat justified.

“The criticism is definitely deserved,” said Lee Fensterstock, CEO of Broadpoint Gleacher Securities Group Inc, a New York-based boutique investment bank. “I don’t know what these guys were thinking about.” 

Read more