Finance news. My opinion.

The bankruptcy of Lehman Bros. Holdings (NYSE: LEH) is sending shockwaves through South Florida real estate circles.

The investment firm bankrolled close to $2 billion in South Florida real estate projects.

The Chapter 11 filing comes at a time when finding capital to bankroll commercial real estate transactions can be like looking for a needle in a haystack.

“Lehman provided a lot of liquidity,” said Paul Jones, president of Pyramid Realty Group, a Coral Gables-based real estate advisor, debt placement, restructuring and disposition firm. “The big fear is that they are going to dump their assets and devalue the rest of the market.”

While the investment bank’s financial problems have largely sidelined Lehman from funding deals in recent months, it still has stakes in many of South Florida’s priciest and highest profile projects.

According to published reports and press releases, Lehman backed $226.5 million for construction of Donald Trump’s condo tower in Hollywood, $47 million for the new Canyon Ranch Miami Beach resort, and was part of the private consortium that infused $565 million into the Fontainebleau in Miami Beach.

What will happen to these assets and others will ultimately be up to the bankruptcy court. But, some expect most to be liquidated to pay off Lehman’s $613 billion in debts and more than 100,000 creditors.

“I think that paper is going to get sold at whatever number buyers will pay,” said Phil Bloom, chief lending officer at CCR Cos. in Miami. “The residential side is basically nonperforming at this time.”

Bloom said the loss of Lehman signals the end an era of the big investment house’s risky real estate roulette.

“It is going to go back to the days when deposit banks and deposit institutions are doing most of the lending,” he said.

Lehman has been a financing force in the region for more than a decade, having backed a legacy of aggressive, highly entrepreneurial deals cash advance now. Among them: upstart Americas Capital Partners’ $323.2 million grab of Highwoods Properties’ entire South Florida portfolio in 1999 and Boca Raton-based T-Rex Capital’s $138.6 million acquisition of the former IBM campus in Boca Raton the following year.

“None of those deals would have gotten done today,” said Tom Mulroy, CEO of T-Rex Capital, which since has sold off the former IBM campus and land holdings.

He said would-be investors are still sitting on the sidelines waiting for the bottom of the market, which further restrains needed capital infusions into real estate.

And, available capital to buy commercial real estate is likely to remain at a trickle until next year, said Charles Foschini, vice chairman of South Florida markets at CB Richard Ellis.

“It is a difficult market to get deals done,” he said, but he noted that South Florida is well positioned for a speedy rebound once the money starts to flow.

“While the financial markets may be in decline, the fundamentals are very strong.”

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The good news for recent college graduates is that, despite the slumping economy, there are still several industries that are hiring young graduates at a brisk pace, according to a new study by MonsterTrak, the student division of Monster Worldwide Inc.

The top five industries for entry-level workers are sales and business development, which accounts for almost a quarter of all postings for entry-level workers and includes jobs in account management, real estate and advertising; accounting and finance; training and instruction; information technology and software development; and medical and health pay day advance.

Maynard, Mass.-based Monster (Nasdaq: MNST) also found that there was a 200 percent increase in entry-level postings related to the health care and medical fields.

Also, white collar entry-level jobs in sales and business development, as well as accounting and finance, still account for a large percentage of entry-level postings.

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China may cut interest rates again, ease limits on bank lending and boost spending to spur economic growth after lowering borrowing costs for the first time in six years.

“Policy makers will consider further interest-rate cuts in the coming month, in conjunction with a more proactive fiscal policy,'' said Jing Ulrich, chairwoman of China equities at JPMorgan Chase & Co. in Hong Kong. The central bank yesterday reduced the one-year lending rate and lowered the proportion of deposits that the nation's smaller banks must set aside.

The slowest inflation in 14 months gave China room to lower borrowing costs and protect jobs as the outlook for exports dims and the credit crisis deepens. The rate cut came as stock markets slumped globally after Lehman Brothers Holdings Inc. filed for bankruptcy and Bank of America Corp. agreed to buy Merrill Lynch & Co. for $50 billion.

“A gradual easing cycle has probably begun,'' said Alec Young, an international equity strategist at Standard & Poor's in New York. “The focus is no longer on inflation and is more on China's growth. The rest of the world is flirting with a recession and China's growth is slowing too.''

The People's Bank of China reduced the one-year lending rate to 7.20 percent from 7.47 percent, effective today. It lowered the reserve-requirement ratio for smaller banks to 16.5 percent from 17.5 percent.

`Important Problems'

The rate cut is “to help solve important problems in our economy for its continued stable and fast development,'' the central bank said in a statement on its Web site yesterday, when markets were closed for a holiday.

In July, the central bank reduced restrictions on how much banks can lend by raising 2008 loan quotas for national banks by 5 percent and regional lenders by 10 percent, according to reports by Goldman Sachs Group Inc., BNP Paribas SA, and China Merchants Bank Co.

It's likely those quotas, the main constraint on borrowers, will be eased again, said Mark Williams, a London- based economist with Capital Economics Ltd. The rate cut will have a limited impact on the economy because bank lending financed just 15 percent of fixed investment last year, Williams said.

The Shanghai Composite Index of stocks has fallen 60 percent this year, closing on Sept. 12 at 2,079.67, on concern that measures to tame inflation will erode company profits.

Stock Market's Drop

It's “suspicious'' that the central bank acted when the index seemed set to drop below 2,000, Williams said, adding that some people thought that level “was a floor at which the government would intervene to shore up the market.''

China last week released data indicating that the economy has slowed no fax payday loans.

Inflation cooled to 4.9 percent in August, export growth slowed and industrial production expanded by the least in six years. China's economy expanded 10.1 percent in the three months to June 30 from a year earlier, the fourth straight quarter of slower growth.

The weakness in China's asset markets is not just in stocks. Property could be headed for a “meltdown'' as home prices and sales decline, Morgan Stanley said Sept. 12.

“This is the beginning of an easing cycle in China,'' said Darius Kowalczyk, chief investment strategist at CFC Seymour Ltd. in Hong Kong.

China has already slowed gains by the yuan against the dollar to protect jobs at exporters of shoes, toys and clothes and raised export-tax rebates for garments and textiles.

Infrastructure Spending

Infrastructure spending is a possible tool for stimulating economic growth. Officials are working on a plan for as much as 400 billion yuan ($58 billion) of spending and tax cuts, according to economists and reports in domestic news media.

China's central bank pushed the reserve requirement for lenders to a record 17.5 percent in June. The biggest banks are excluded from the reduction. Those exempted are: Bank of China Ltd., Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank Corp., Bank of Communications Co. and Postal Savings Bank of China.

The requirement for smaller banks drops by 1 percentage point from Sept. 25. In areas affected by the Sichuan earthquake, the reduction is 2 percentage points.

The central bank left the key deposit rate unchanged at 4.14 percent, narrowing banks' margins on loans.

Zhu Baoliang, the chief economist at the State Information Center, a government research agency, said August's economic data probably prompted yesterday's moves, rather than events in the U.S.

In the U.S., banks including JPMorgan Chase & Co., Goldman Sachs Group Inc. and Citigroup Inc. formed a $70 billion fund to ensure market liquidity as Lehman filed for bankruptcy and Bank of America Corp. agreed to acquire Merrill. The Federal Reserve may reduce the benchmark interest rate today to 1.75 percent from 2 percent, according to the futures market.

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Financial giant Merrill Lynch & Co. agreed late Sunday to sell itself to Bank of America Corp. for about $44 billion, according to reports late on Sunday.

The Los Angeles Times reported that Merrill will get $29 a share in BofA stock (NYSE:BAC) — a 70 percent premium to Friday’s closing price of $17.05, but less than a third Merrill’s (NYSE:MER) all-time high of $97.53 reached in January 2007.The combination, if approved by shareholders, comes with the backing of federal officials worried thhat Merrill would follow Lehman Brothers Inc.(NYSE:LEH) to the brink of failure, the Times reported citing unnamed sources.

The Wall Street Journal reported that Bof A considered a bid for Lehman, but decided that Merrill was a better deal cheap payday loans. Barclays PLC was also considering buying Merrill, but both potential buyers backed off after it was clear there wasn't going to be government aid similar to what JPMorgan Chase & Co. got from the Federal Reserve when it bought Bear Stearns Cos. in March.

As a result, Lehman Bros. was reportedly preparing a bankruptcy filing that would would allow most of the firm’s units to continue operating as the business is wound down, the Journal reported.

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Central bank governors of five Gulf states will probably approve a new draft accord for monetary union at a meeting in Jeddah, Saudi Arabia, this week, the latest step toward a single currency for the region.

Gulf finance ministers will discuss the draft at the same meeting, scheduled for Sept. 15 and 16. Heads of state may give final approval at a meeting in Muscat, Oman, before the end of the year, said Salim Al Gudhea, head of the monetary union unit at the Gulf Cooperation Council Secretariat General, in an interview.

Progress toward a single currency eases pressure on Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and Bahrain to revalue their currencies or drop pegs to the dollar after inflation accelerated. The five agreed in 2001 to form a European Union-style monetary union by 2010 to boost regional trade.

Central bankers “are expected to pass the draft and that is a positive step,'' said Monica Malik, Dubai-based chief economist at EFG-Hermes Holding SAE, Egypt's largest investment bank. This week is “the easy part. The stages after that will be tricky.''

Contracts to buy dirhams in a year have fallen 3.1 percent since a March 18 high. Saudi riyal forwards dropped 2.2 percent in the same period.

The five states are pushing ahead with monetary union after Oman, the sixth Gulf Arab state, pulled out last year. The agreement allows for the creation of a monetary council, a precursor to the Gulf central bank, the location of which will be decided at the meeting this week http://paydayintime.com.

`Difficult Bit'

The council will be responsible for deciding the level at which the Gulf currency is pegged to the dollar, aligning interest rates, monetary tools and goals.

“Technical issues won't be tackled until the monetary council is set up, and that may be a long way into 2009, depending on how quickly it is ratified by national parliaments,'' said Malik. “That's going to be the difficult bit and is likely to result in much-greater delays.''

The central bank governors will also vote on whether to create the monetary council after three or five countries have ratified the agreement, Naser Al-Kaud, deputy assistant general for economic affairs at the GCC Secretariat, said by phone yesterday.

“We are suggesting it; I am not sure if they will agree,'' said Al-Kaud. “It may help start the council sooner.''

Last week, the seven Persian Gulf benchmarks tracked by Bloomberg declined last week. The Dubai Financial Market General Index slumped 9.2 percent. Oman's Muscat Securities Market 30 Index declined 7 percent and Saudi Arabia's Tadawul All-Share Index fell 4.4 percent.

Tamweel PJSC, the U.A.E.'s second-biggest mortgage lender by market value, tumbled 14 percent following the arrest of the company's deputy chief executive officer.

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Novell Inc. and Microsoft Corp. announced Thursday that it has developed technology that allows businesses to run Waltham, Mass.-based Novell’s open-source operating system on Microsoft servers.

The product is the first that allows companies to run a mixed Windows/Linux IT environment seamlessly, as the operating systems were designed to work, or interoperate, with each other cash till payday.

Microsoft (Nasdaq: MSFT) and Novell’s (Nasdaq: NOVL) interoperability lab in Cambridge will test and validate the technology, which will be supported by original equipment manufacturers like Dell Inc.

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Reynolds American Inc. and its subsidiary R.J. Reynolds Tobacco Co. said Tuesday they were cutting about 10% of their American work force as the company restructures its portfolio.

The nation’s second-largest tobacco company said it plans to lay off about 570 workers in Winston-Salem, N.C, where the two companies are based, or about 16% of the work force there.

The cuts are expected to begin in the third quarter and last through the end of 2009.

The company said it expects to record a $90 million pretax restructuring charge in the third quarter of 2008 because of the efforts.

Meanwhile, Reynolds said it was realigning its brands as it tries to "simplify programs and processes, reduce complexity and improve productivity" throughout the company while focusing on innovation and "maximizing trademark equity."

Among the changes: The company is scaling back marketing and promotional support for its Kool menthol brand cigarettes, while boosting the amount of money it spends on Camel brand menthol products.

"The company believes that Camel’s strength provides significant opportunities in the expanding premium-priced menthol category, in which the brand currently has a small but growing position," Reynolds said in a statement.

The Pall Mall label will also remain one of the company’s growth brands.

"Continued success demands that we fully align our plans, programs and people behind the things that matter most to our future performance," Daniel M payday loan online. Delen, chairman, president and chief executive officer of R.J. Reynolds, said in a statement. "The steps we are taking support R.J. Reynolds’ ongoing evolution to a ‘total tobacco’ business model that includes both cigarettes and innovative smokeless tobacco products."

Reynolds (RAI, Fortune 500) shares were unchanged at $51.57 in premarket trading Tuesday. 

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The European Commission cut its growth estimate for the euro area this year and signaled it may also lower its 2009 forecast as the U.S. and Asian economies cool.

The economy of the 15 nations that use the euro will probably expand 1.3 percent this year, the Brussels-based commission said today, revising down its April forecast of 1.7 percent. “Developments in the global economy seem to suggest a significant downward revision for 2009,'' it said, referring to forecasts it plans to publish in November.

Europe's economy shrank in the three months through June and Luxembourg Finance Minister Jean-Claude Juncker today said there is a “risk of a technical recession.'' Manufacturing and services activity contracted for a third month in August and confidence dropped to the lowest in more than five years. Even with a cooling economy, the European Central Bank has resisted cutting interest rates as it tries to combat inflation.

“Economic activity has slowed down considerably'' in recent months, Juncker, who leads the group of euro-area finance ministers, said in Brussels today. The EU report said growth “is expected to stall'' in the current quarter. A technical recession is defined as two consecutive quarters of economic contraction.

“We expect economic activity to be essentially stagnant across the region in the second half of 2008,'' said Howard Archer, chief European economist at Global Insight in London. He sees growth slowing to 0.8 percent next year from 1.2 percent this year.

Largest Economy

The commission left its growth forecast for Germany, Europe's largest economy, unchanged at 1.8 percent, and lowered those for France, Spain, Italy and the Netherlands.

“The continuation of the turmoil in the financial markets one year on, the near doubling of energy prices over the same period and the correction in some housing markets have had an impact on the economy,'' Economic and Monetary Affairs Commissioner Joaquin Almunia said in today's report.

While the commission raised its inflation forecast for 2008 to 3.6 percent from 3.1 percent, it said consumer-price growth “may be at a turning point'' after oil prices fell from a record and as past increases in food and energy costs “gradually fade in the coming months.'' The recent fall in commodity prices and the euro also “have provided some relief,'' Almunia said.

Oil Prices

Since reaching a record $1.6038 against the dollar on July 15, the currency has dropped around 12 percent to $1.4163 today. Oil prices have fallen almost 30 percent in the last two months to $103.84 a barrel.

Still, the euro's advance and the surge in energy prices have already taken their toll fastcash. Paris-based L'Oreal SA, the world's largest cosmetics maker, on Aug. 29 reported the slowest profit growth in three years. Stora Enso Oyj and UPM-Kymmene Oyj, Europe's largest papermakers, today said they will close unprofitable production lines as raw-material and energy costs have outpaced their ability to raise prices.

Banks including Amsterdam- and Brussels-based Fortis and Irish Life & Permanent Plc of Ireland have suffered due to writedowns, losses or increased funding costs related to the credit crisis. Credit Agricole SA, France's third-largest bank, today said it will eliminate about 500 jobs at its Calyon corporate- and investment-banking unit to rein in costs following three consecutive quarterly losses.

`Downside Risks'

“The main downside risks identified in the spring forecast have materialized, with the financial turmoil deepening, commodity prices soaring and the shocks to several housing markets spreading more widely,'' the commission said in the report. It sees a “marked deceleration'' ahead in most Asian economies and predicts that the effect of a tax rebate that boosted second-quarter U.S. growth will fade.

The ECB last week lowered its euro-region growth outlook and raised its inflation projections for this year and next. ECB President Jean-Claude Trichet said today in Brussels that inflation “is likely to remain high for quite some time, moderating only gradually during the course of 2009,''

The European Commission has backed the ECB's monetary- policy stance, with Almunia saying yesterday that policy makers are “doing a good job in difficult conditions and they deserve our full confidence and support.''

Some companies have tried to offset falling European and U.S. orders by expanding in Asia and oil-exporting countries. German exports to India more than tripled in the four years through 2007, according to figures from that nation's statistics office. Volkswagen AG, Europe's biggest carmaker, on Sept. 8 said emerging markets will provide the fastest growth in worldwide sales over the next 10 years, led by economic expansion in Asia and Russia.

“The risks to the growth outlook stay tilted to the downside. In particular, developments in commodity and financial markets will continue to be the key factors shaping the growth outlook,'' the commission said. “The risks to the inflation outlook appear somewhat more balanced, albeit they are still tilted to the upside.''

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The attorney general of New York is negotiating settlements with eight student loan companies to reform deceptive practices in the industry. A particular focus is the marketing of products so they appear to be federal loans, an official said Friday.

"Some of the seals [used by lenders] looked very similar to those of the federal government," said Alex Detrick, a spokesman for the attorney general’s office.

The distinction is important because federal loans have fixed interest rates that are often lower than private loans.

The student loan companies also misled consumers at times about the best loan options on the market, he said.

This group of direct-to-student lenders sends advertising material by mail or market to students online, but does not necessarily have a presence on campus. Students are sometimes offered iPods or gift cards as an incentive to sign up, Detrick said.

The attorney general’s office is also preparing to sue student lender Goal Financial LLC for deceptive practices, Detrick said. Unlike the lenders currently negotiating settlements, Detrick said Goal Financial did not signal a willingness to reform its practices. He did not know how many, if any, of the companies would reach a settlement.

Calls to Goal Financial’s headquarters in San Diego went to voicemail Friday and were not immediately returned. The company’s attorney, Lewis Rose of Kelley Drye & Warren, did not return requests for comment.

Goal Financial was the sixth largest lender of consolidated student loans in the country in 2006, according to Student Marketmeasure, which tracks the student loan industry. Goal Financial made 111,426 loans worth $2.5 billion that year, according to the group.

The attorney general’s office sent a letter to Goal Financial in July notifying the company of its intent to sue.

The letter said Goal Financial enlisted students to promote loans on campus and offered incentives for students who secured applicants.

The letter also said Goal Financial’s advertising materials gave misleading examples of monthly payment amounts and annual savings.

In addition, the company referred students to a comparison Web site, www.eStudentLoan.com, which is operated by a Goal subsidiary, according to the letter payday loan low fee. The site does not disclose that it only lists lenders that pay Goal Financial a fee, Detrick said.

Last year, Attorney General Andrew Cuomo’s office helped bring about reforms in the student lending industry when he investigated deals that gave colleges "kickbacks" in exchange for being listed as a preferred lender.

At least 22 schools agreed to adopt codes of conduct with regard to their financial relationships with lenders as a result of the investigation. Several of the lenders targeted in that investigation, including Sallie Mae (SLM, Fortune 500), formally SLM Corp., and Citibank, a unit of Citigroup Inc. (C, Fortune 500), agreed to reforms and to pay a combined $6.5 million into a national fund to educate families and students about loans.

The attorney general’s office is now investigating other possible conflicts of interest on college campuses - including deals with credit card, textbook and catering companies, Detrick said. 

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A study from research group FlightStats found that JetBlue Airways was one of the most-delayed airlines in August, while Northwest Airlines had one of the best track records for being on time.

JetBlue (JBLU) flights arrived on-time 64.7% of the time in August, FlightStats said on Wednesday. This was the worst percentage among the leading airlines.

Only one carrier had a worse record: Freedom Airlines, a subsidiary of Mesa Air Group (MESA), with an on-time arrival rate of 58.1%

Northwest Airlines (NWA, Fortune 500) was the top-performer among the leading carriers, with an on-time arrival record of 85.3% in August, FlightStats said. Four regional carriers had a better rate, with Hawaiian Airlines taking the lead with an on-time arrival record of 91%.

The industry average for being on-time was 77.3%, according to FlightStats.

Among airports in North America, FlightStats found that Salt Lake City International was the most efficient, with an on-time arrival rate of 87.3% in August. Detroit Metro was second-best, with a success rate of 86.4%

Three of the bottom four airports in terms of on-time arrivals were in the New York City area, according to the research group.

John F. Kennedy International came in dead last, with an on-time arrival rate of 55.2% payday advance. Newark Liberty International, with an on-time rate of 64.2%, and LaGuardia Airport, at 64.5%, were the third and fourth worst airports for timely arrivals. Miami International was the second worst, with 64% of flights arriving on time in August.

The on-time average for North American airports was 76.5%.

The Department of Transportation released similar findings on Wednesday for the month of July, pointing to the New York-area airports and JetBlue as having some of the worst rates for on-time flights.

New York City is a major hub for JetBlue, which is preparing to open a new terminal at JFK. When asked about the DOT report, JetBlue spokesman said the reliance on New York was part of the airline’s problem in terms of delays, but said that JetBlue has made improvements.

Pasquale DiFulco, spokesman for the Port Authority of New York and New Jersey, said his agency had made numerous requests to the Federal Aviation Authority and the DOT to alleviate the severely congested New York-area airports by adding capacity. 

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