Best financial sourse

The Federal Reserve Board raised the discount rate charged to banks for direct loans by a quarter point to 0.75 percent and said the move will encourage financial institutions to rely more on money markets rather than the central bank for short-term liquidity needs.

“These changes are intended as a further normalization of the Federal Reserve’s lending facilities,” the central bank said today in a statement. “The modifications are not expected to lead to tighter financial conditions for households and businesses and do not signal any change in the outlook for the economy or for monetary policy.”

The dollar jumped and Treasuries extended losses as the Fed took another step in a gradual retreat from its unprecedented actions to halt the deepest financial crisis since the Great Depression. The Fed has provided hundreds of billions of dollars in backstop credit to banks, bond dealers, commercial paper borrowers and troubled financial institutions such as American International Group Inc.

“This is an unwinding of another unusual and exigent circumstance,” said David Zervos, visiting adviser to the Fed Board in 2009 who is now a managing director at Jeffries & Co. in New York. “They tried to go out of their way to tell people this doesn’t change their policy outlook at all.”

The dollar rose 0.7 percent to $1.3514 per euro at 5:19 p.m. in New York from $1.3607 yesterday. It touched $1.3502, the strongest level since May. The yield on the 10-year Treasury note rose seven basis points to 3.8 percent.

Maturity Shortened

The discount rate increase is effective on Feb. 19. The Board also said that effective March 18 “the typical maximum maturity for primary credit loans will be shortened to overnight.”

The Fed Board said the outlook for policy remains “about as it was at the January meeting of the Federal Open Market Committee.” The central bank also cited last month’s statement, which said economic conditions are likely to warrant “exceptionally low” levels of the federal funds rate “for an extended period.”

It was the first increase in the discount rate in more than three years, and the move widens the rate’s spread over the top range for the benchmark federal funds rate to 0.5 percentage point.

Backup Source

“The increase in the spread and reduction in maximum maturity will encourage depository institutions to rely on private funding markets for short-term credit and to use the Federal Reserve’s primary credit facility only as a backup source of funds,” the Fed Board said in a statement.

“The Federal Reserve will assess over time whether further increases in the spread are appropriate.”

Financial institutions’ reliance on Fed credit has waned as market liquidity improved. Discount window loans stood at $14.1 billion on Feb. 17, down from $65.1 billion about a year earlier.

Fed Chairman Ben S. Bernanke telegraphed the move in Feb. 10 testimony to Congress when he said investors should expect a “modest increase” in the rate “before long.” Using language similar to today’s statement, he said a move shouldn’t be interpreted as a change in policy.

The Fed’s lending programs and their May 2009 review of the capital needs of the 19 largest banks helped restore confidence and liquidity in interbank lending markets. The TED spread, the difference between what the Treasury and banks pay to borrow dollars for three months, has narrowed to 0.15 percentage point from as high as 4.64 percentage points in October 2008.

Emergency Facilities

The central bank closed four emergency lending facilities, including the Primary Dealer Credit Facility and Term Securities Lending Facility, on Feb. 1.

Primary dealer credit stood at $146.5 billion two weeks after the collapse of Lehman Brothers Holdings Inc. in September 2008. The facility had a zero balance when the Fed closed it in February.

The Federal Open Market Committee left the benchmark overnight lending rate in a range of zero to 0.25 percent at their meeting Jan. 27. Minutes from the meeting said officials “agreed it would soon be appropriate” to reduce the term of discount window loans to overnight and widen the spread over the federal funds rate.

The minutes also said that the discount window change didn’t signal an immediate change in the benchmark lending rate.

Normal Footing

Fed officials “generally agreed that such steps to return the Federal Reserve’s liquidity provision to a normal footing would be technical adjustments.”

Prior to the financial crisis, the Fed kept the primary credit discount rate 1 percentage point above the target for the federal funds rate.

The Fed increased the term on the loans to 90 days during market turmoil in March 2008, and reduced it 28 days on Jan. 14 this year.

Discount rate changes are requested by boards of directors at the 12 regional Fed banks. The Fed Board said it approved requests for the rate increase from all 12 regional Fed banks. Discount rate change requests are subject to final review and determination by the Board of Governors in Washington. Fed governors review discount rate requests about every two weeks.

Source

A online cash advance is a service provided by most credit card and charge card issuers.

Sterling Kozlowski, the region's top KeyBank N.A. executive since mid-2006, is leaving Western New York to become president of KeyBank's Maine district.

Kozlowski begins his new job Feb. 16, according to a release issued Monday by the bank. He will replaced retiring Maine district president Dick Lucas.

A search for the district's next president has begun, the bank said.

Kozlowski, a Syracuse native who grew up in Rochester, joined KeyBank in July 2006 after working 23 years at HSBC Bank USA N.A. In his current job, he has been responsible for 1,000 employees, 41 branches and 50 ATMs.

In Maine, he will focus on revenue, expense management, profitability and credit quality, the bank said. He will also work with sales managers to provide banking accessibility to low- to moderate-income individuals and communities.

Kozlowski earned an undergraduate degree in marketing management from Syracuse University. He also graduated from the advanced commercial lending program at the University at Buffalo and the Graduate School of Retail Bank Management at the University of Virginia.

Cleveland-based KeyBank, a subsidiary of KeyCorp, is the third largest bank in Western New York. Four new or renovated branches are expected to open locally within the next couple of years.

Nationwide, KeyBank has about $93 billion in assets and more than 1,000 branches.

Source

Apply for a payday loans today and as a first time customer, you can get up to $1000 directly to your account overnight.

In its first quarterly filing since splitting from Time Warner, AOL Inc. said Wednesday that it swung to a profit in the fourth quarter from a year earlier.

The New York-based company reported net income of $1.4 million, or 1 cent per share, in the three months ended Dec. 31. That compares with a loss of $1.9 billion, or $18.52 a share, in the year-ago quarter.

Excluding certain charges, including $107.4 million for restructuring, the company said it earned 71 cents per share.

Sales fell 17% to $809.7 million, led by sharp declines in AOL’s subscriber base. Subscription revenue plunged 28%, while advertising sales were down 8%.

The company continued to lose dial-up subscribers as users flock to higher speed Internet connections. AOL’s subscription base fell 27% to about 5 million from 6.9 million a year earlier.

But the results were better than expected. Analysts surveyed by Thomson Financial had forecast earnings per share of 63 cents on sales of $700 million.

"We have made significant progress in support of the long-term vision we see in the future of AOL," said AOL Chief Executive Tim Armstrong in a statement. "But today’s results continue to reflect the need for our focus and execution on the work required in the turnaround of the company."

Flying solo

The results reflect AOL’s performance since it regained its independence from media giant Time Warner in December. It is also AOL’s first report as a standalone firm since October 2000, when the company posted a quarterly profit of $350 million.

Time Warner (TWX, Fortune 500), which owns CNNMoney.com, spun AOL off to shareholders late last year, ending what many experts said was the most disastrous corporate marriage of all time.

AOL has been trying to reinvent itself as a content and advertising company as subscribers to its dial-up Internet access business have dwindled. But the company has lagged rivals Google (GOOG, Fortune 500) and Yahoo (YHOO, Fortune 500) in key areas such as display advertising.

AOL’s global display advertising revenue declined 3% to $176.4 million in the quarter. Revenue from international display advertising plunged 22%. On the bright side, revenue from U.S. display advertising rose 1%, marking the first quarter of year-over-year growth in two years.

"The financial results, in general, were as expected. Though there was a hint of improvement in domestic advertising," said Clayton Moran, an analyst at The Benchmark Company.

Search revenue, generated when users click on text-based ads on their screens, fell 19% to $145.4 million. AOL said it expects search revenue to continue to decline in 2010 as restructuring costs offset industry improvements.

As part of its turnaround plan, AOL said it will exit some overseas markets, do away with certain products and end unprofitable partnerships. The company has also laid off thousands of workers since it separated from Time Warner.

"2010 will be a year of transition," Artie Minson, AOL’s chief financial officer told analysts in a conference call. "But we will do so with the long term vision for AOL in mind."

Looking ahead, AOL said it will continue to focus on developing content that will attract consumers and advertisers to its properties.

"We have a content plan that’s based on hitting very specific audiences with content that’s important to them," Armstrong said.

Moran said AOL’s focus on targeted content makes strategic sense because the content business is fragmented, "which is to say that it isn’t dominated by Google." But the plan has yet to bear fruit and is "easier said than done," he added.  

Source

A $10 million project to build 40 town homes along a once-desolate stretch of Delmar Boulevard is headed toward foreclosure.

Consider the Delmar Place town home project a casualty of the housing slide that began in 2008, said Stephen Acree, chief executive of the Regional Housing and Community Development Alliance. The foreclosure, initiated by Truman Bank, is scheduled for next Thursday.

Acree’s organization and another nonprofit, West End Community Conference, had formed Delmar Place Land Development LLC to assist the project on what had been city-owned land in the 5300 and 5400 blocks of Delmar, just west of Union Boulevard.

Town & Country Homes Inc. began construction in late 2003, but built only 24 of the planned town homes before the project stalled in 2009. A company representative declined to discuss the project or the foreclosure.

Acree said Thursday that Truman, still owed about $180,000 on a loan guaranteed by Town & Country in 2006, will try to sell the foreclosed property, perhaps to another builder fast cash. Town & Country is going out of business, Acree said.

The foreclosure affects only the 20 Delmar Place lots that remain vacant. The 24 lots on which Town & Country built homes are unaffected. Acree had helped Town & Country structure the project’s financing.

"It was a hard one to make work because of the extra infrastructure cost involved and the unproven market for that kind of residential development on DeImar west of Union," he said.

Delmar Place was designed for two rows of town homes, one facing Delmar and the second behind the first. The project stalled after Town & Country built the row of homes closest to the street. Acree said if there is a "silver lining" to the project’s failure it’s the improvement to Delmar’s streetscape.

Previously on the site were derelict apartment buildings.

Source

UPS announced plans to cut 1,800 jobs as part of a restructuring plan intended to streamline the company’s domestic management structure.

The cuts will eliminate management and administrative positions across the country, UPS (UPS, Fortune 500) said in a statement Friday. Approximately 1,100 employees will be offered voluntary separation packages; other impacted workers will receive severance benefits and access to support programs.

"The decision to reduce our workforce is difficult and we appreciate the significant contributions of those who will be affected by this change," said Scott Davis, UPS chairman and chief executive. "But we believe this will allow us to sharpen our focus on profitable growth while being even more nimble in serving our customers."

UPS said the restructuring plan, which takes effect in April, will reduce the number of districts in the company’s small-package operation to three from five and the number of regions to 20 from 46. The consolidation does not involve closing operating facilities.

The announcement came the Atlanta-based company said its expects to beat its earnings estimate for the fourth quarter of 2009. The company previously projected it will earn between 58 cents and 65 cents per share during the final quarter of last year. Analysts polled by Thomson Reuters expect earnings per share to fall to 63 cents, a 24% decline compared to same period in 2008.

UPS said it expects to incur a charge in 2010 as a result of the restructuring plan, but said it will be offset by cost savings.

Shares of UPS were up more than 5% in early trading.  

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

Italian business confidence rose to the highest in 18 months in December on expectations by manufacturers that growing exports will boost the economy’s recovery from the worst recession since World War II.

The Isae Institute’s manufacturing sentiment index climbed to 82.6, the highest since June 2008, from a revised 79.4 in November, the Rome-based research center Isae said today. That compared with a median forecast of 79.7 in a Bloomberg News survey of 8 economists.

The survey showed “a strong recovery in production expectations and in the assessment on orders, the ones from abroad in particular,” Isae said in the report. “Inventories remain stable and below levels considered normal.”

The $2.3 trillion economy expanded 0.6 percent in the three months through September after five quarters of contraction as exports grew. The economy may grow 1.1 percent in 2010, employers’ lobby Confindustria forecast on Dec. 17. Exports to non-European Union countries rose 2.6 percent in November after falling 9.1 percent in October. Economic growth in France and Germany, which emerged from the recession in the second quarter, is also supporting Italian manufacturers.

The rise in confidence in Italy mirrored gains in optimism in Europe’s largest economy. Business confidence in Germany increased to the highest level in 17 months in December as the global recovery supported exports and manufacturing growth, the Munich-based Ifo institute said on Dec. 18.

French business confidence fell in December for the first time in nine months on concern that fading government-stimulus measures may slow the economy’s recovery from its worst slump in six decades, Paris-based statistics office Insee said last week.

Reduced Stimulus

Government incentives across Europe contributed to the recovery of auto and home appliance sales from a global decline caused by the recession. In Italy, they benefited Fiat SpA, whose Italian sales rose 28 percent in November from the previous year.

Italy’s government plans to reduce incentives to trade in old cars for newer models to 300 million euros ($432 million) next year, Il Sole 24 Ore reported on Dec. 27. Italy set aside about 400 million euros to spur sales of more fuel-efficient cars in 2009.

Manufacturers remain pessimistic about the job market on expectations that hiring will lag the economic recovery, today’s report showed. A sub-index measuring expectations on employment held at minus 18 in December.

The jobless rate climbed in the third quarter to the highest in four years, Istat said on Dec. 17. Rising unemployment and reduced stimulus may weigh on consumer spending in coming months.

Isae conducted its latest survey of 4,000 companies between Dec. 1 and Dec. 18. The research center revised its November reading from an initial 78.8.

Source

Arizona stock performance looks pretty good for the past quarter and since the start of 2009, but looking back to the start of the recession in late 2007 paints a gloomier picture.

Thirteen of the state’s billion-dollar public companies saw stock prices move up during the fourth quarter and 15 posted gains for the year as the market rallied following a recession low for stock indexes in March.

But for the period from Dec. 31, 2007, to Dec. 18, 2009, only four of the 21 companies posted gains, according to a Phoenix Business Journal analysis.

P.F. Chang’s China Bistro (Nasdaq:PFCB) outdistanced the other winners with a 69 percent gain despite the recession’s impact on many retail and restaurant chains.

Also posting gains since December 2007 were: Meritage Homes Corp. (NYSE:MTH), 19 percent; PetsMart Inc. (Nasdaq:PETM), 17 percent; and Tucson’s UniSource Energy Corp. (NYSE:UNS), 6.6 percent.

The recession’s impact has been very industry-specific said Chip Fisher, managing director and head of the Arizona office for Green Holcomb & Fisher. The pet industry has done well, but many in the restaurant industry have had a tough time.

P.F. Chang’s is among winners in the restaurant sector remaining profitable through the third quarter, although seeing profits shrink. The Asian restaurant chain chain has tightened its belt and closed underperforming locations while continuing modest growth, including new sites in the Middle East. In August, the Scottsdale chain announced a deal with consumer products giant Unilever to brand a line of frozen entrees.

Analysts expect to see its earnings per share hit $1.74 for 2009 and rise to $1.90 in 2010, compared with $1.45 in 2008.

But Barry Ziskin, president of Z Seven Fund in Mesa, says those earnings are significantly higher than the more conservative number reported to the IRS. And with the number of closures offsetting growth, the stock price may be ahead of itself.

He also cautions that PetsMart is feeling pressure from online retailers such as Petmed Express as well as veterinarians.

While Meritage Home Corp. stock moved up 19 percent since the end of 2007, it remains a long way from its peak during the housing boom, when it neared $100 a share in summer 2005 payday loans for bad credit.

The Scottsdale homebuilder continues to feel the sting of the industry implosion, with January-September revenue down from $1.1 billion in 2008 to $683 million this year. Net loss for the nine-month period, however, has tightened to $3.52 per share from $7.37 in 2008. Analysts see that number moving down to just 16 cents for all of 2010.

Leading the list on the negative side for the two-year period as well as for the past quarter and all of 2009 was Mesa Air Group Inc. (Nasdaq:MESA). The Phoenix-based short-hop airline’s stock ended 2007 at $3.09 per share but slipped to the penny-stock range a few months later and has not recovered, trading at just 11 cents as of Dec. 18. In 2006, shares had traded at more than $10.

Mesa has faced not only the recession’s tepid travel, but also a prolonged legal push from Delta Air Lines to sever ties and paid $52.5 million in 2008 to settle a dispute with Hawaiian Airlines.

Fisher said 2009 was a difficult year for most public companies, especially those with a limited stockholder base and analyst coverage.

The new year should bring more money into stock markets and improve values for small-cap as well as larger companies, he said, but not to 2007 levels.

“It’s going to be a long time until we return to those values,” said Fisher. A lot of small companies shouldn’t even be public, he said, adding his company has helped a number of those go private or delist from stock markets over the past year.

Green Holcomb has added staff in Phoenix, he said. “We expect the mergers and acquisitions market to be very active in 2010 and beyond.”

The two-year period saw the Dow Jones Industrial Average plummet from 13,265 to a March 2009 pit of 6,440 before starting a comeback to hit 10,329 Dec. 18. The Nasdaq Composite remains down nearly 17 percent for the two-year period closing at 2,212 Dec. 18.

As for the market in general, opinions vary from the nine-month rally topping off to a continued rise before a crash later in the year and worries about the impact of a major event somewhere in the world.

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

Bank of America Corp., the nation’s biggest lender, will repay $45 billion of government bailout funds, helping free the bank from U.S. curbs on executive pay that have hampered its search for a new leader.

The bank will repay the Troubled Asset Relief Program using $26.2 billion of "excess liquidity" and $18.8 billion from the sale of securities, according to a statement Wednesday. The firm plans to increase equity by $4 billion through asset sales and will issue $1.7 billion of restricted stock instead of year-end bonuses to some employees.

Bank of America’s two rounds of U.S. funding included $20 billion to help cushion losses tied to the takeover of Merrill Lynch & Co. The repayment will ease the bank’s effort to replace Chief Executive Kenneth D. Lewis, who announced his departure in September.

Dilution for shareholders will be "substantial," said William Fitzpatrick, an analyst at Optique Capital Management in Racine, Wis., which oversees $1 billion, including Bank of America shares. "It looks like this was done for the incoming chief executive," he said. "You take out the compensation restrictions and everything else that went along with the government ownership."

The repayment was negotiated by Chief Risk Officer Greg Curl and Chief Financial Officer Joe L. Price, a person familiar with the matter said. The two executives had approval from the board to close the deal once regulators including the Treasury, the Federal Reserve and the Office of the Comptroller of the Currency agreed to it, the person said, speaking anonymously because the details of the talks aren’t public payday loan lenders.

Curl, 61, is among candidates vying to replace Lewis. His role in negotiating the exit from TARP may enhance his prospects, according to a person familiar with the process.

The repayment saves $3.6 billion a year in dividend payments, the bank said. It also means Lewis, 62, can fulfill his vow to arrange the return of all bailout funds before his tenure ends at the end of the year. Lewis said Sept. 30 that he would step down on Dec. 31 after enduring criticism from lawmakers, regulators and shareholders about his handling of the Merrill Lynch purchase.

"We appreciate the critical role that the U.S. government played last fall in helping to stabilize financial markets, and we are pleased to be able to fully repay the investment, with interest," Lewis said in today’s statement.

Bank of America will also be able to better compete with rivals including JPMorgan Chase & Co., which already repaid its bailout funds, spokesman Robert Stickler said.

Source