Finance news. My opinion.

New York Attorney General Andrew Cuomo is seeking information from the nine largest banks, including Charlotte-based Bank of America Corp, regarding their plans for paying bonuses.

The banks have agreed to accept $125 billion as part of a $700 billion financial bailout package approved by the U.S. Congress. Under the plan, the federal government will buy shares in the banks in a move designed to unfreeze the credit markets.

An additional $125 billion of the $700 billion has been set aside for other financial institutions creditreports.

In a letter sent to the nine banks, Cuomo also asks the boards to explain what mechanisms they have in place to protect taxpayer funds.

Cuomo also requested the information from New York-based Merrill Lynch & Co. Inc. (NYSE:MER), which BofA (NYSE:BAC) is buying in a $50 billion deal. The purchase is expected to close in the first quarter, pending shareholder approval.

Source

The Texas Workforce Commission has approved a $1 million training fund to provide skills training for veterans ending overseas active-duty military.

The fund will provide veterans returning from overseas the skills upgrades that employers identify as necessary for future Texas economic growth. Private state employers can apply to TWC for training grants by partnering with established training providers such as community colleges, apprenticeship training programs or community-based training programs.

Research shows that some active-duty service members exiting the military face challenges transitioning to civilian life and the workplace. To assist those veterans, TWC established the Texas Veterans Leadership Program, modeled on the successful Vietnam Veterans Leadership Program, which TWC Chairman Tom Pauken, himself a Vietnam veteran, established during the Reagan administration one hour cash. Some 28 veterans resource and referral specialists are based in local work force development areas across Texas to assist their fellow veterans with job-search activities, training opportunities and other resources.

“Veterans deserve our utmost appreciation, and we should honor their service by easing their re-entry into the Texas work force,” says Pauken. “Through these training funds, veterans — particularly those who have been deployed to Iraq or Afghanistan — will receive important skills training to meet the demands of Texas employers.”

Source

The U.S. economy shrank last quarter for the second time in a year as consumers and companies pulled back, reports this week may show.

Gross domestic product contracted at a 0.5 percent annual rate from July to September, the biggest drop since the 2001 recession, according to the median estimate in a Bloomberg News survey ahead of Commerce Department figures due Oct. 30.

Consumer spending, the biggest part of the economy, probably dropped by the most in almost two decades as job losses mounted, stock prices sank and property values plummeted. Federal Reserve policy makers, meeting this week, are forecast to lower interest rates for a second time this month to try to thaw frozen credit markets and prevent a deepening recession.

“I don't see how the consumer can do anything but retrench,'' Robert McTeer, former president of the Fed Bank of Dallas, said in an Oct. 24 Bloomberg Television interview. “If they all do it at the same time, it will really tank the economy.''

The projected economic contraction would follow a growth rate of 2.8 percent in the second quarter. The economy shrank at a 0.2 percent pace in the last three months of 2007.

Economists also forecast consumer spending dropped at a 2.4 percent pace last quarter, the first decline since 1991 and the biggest since 1990, according to the survey median.

Purchases fell 0.2 percent in the final month of the quarter after stalling in August, a Commerce report Oct. 31 is projected to show. Incomes likely grew 0.1 percent, a fifth of the gain in the prior month.

Growing Pessimism

Consumer sentiment probably plunged this month as stocks crashed, raising the risk the slump in spending will be even worse this quarter. The Conference Board's consumer confidence index, due on Oct internet payday loan. 28, probably fell to 52 from 59.8 in September, the survey median showed.

The International Council of Shopping Centers predicts the November-December holiday season, which brings in more than a third of some retailers' annual sales, will be the worst since 2002.

Wal-Mart Stores Inc., the world's biggest retailer, is seeing consumers use credit cards less often because they are “feeling the pain'' of the financial crisis, said Eduardo Castro-Wright, the company's U.S. stores chief. Americans feel “maxed out,'' he said in a speech in Los Angeles on Oct. 21.

Household wealth is disappearing as foreclosures drive down home prices. Home values in 20 U.S. cities fell in August at the fastest pace on record, economists forecast figures from S&P/Case-Shiller on Oct. 28 will show.

Fewer Sales

Sales are still dropping as stricter lending rules and concern that property values will keep plunging scare off prospective buyers. A Commerce report tomorrow may show purchases of new homes fell in September to a 17-year low, according to the Bloomberg survey median.

The squeeze on credit and faltering overseas demand is hurting U.S. manufacturers. The Commerce Department may report on Oct. 29 that orders for durable goods, those meant to last several years, fell in September for the second consecutive month, according to the Bloomberg survey.

Policy makers will likely focus on the risks to growth when they meet on Oct. 28-29 as the economic slowdown has depressed oil prices and eased concern about inflation.

Source

About one of every three Valley residents are looking at buying a new car in the next year, and 10 percent of them may be looking at hybrids.

A WestGroup Research study found 33 percent of Valley residents might be inclined to buy cars during the next 12 months. About 14 percent said they’d be looking for new cars, with 19 percent looking for used vehicles.

Ten percent of the potential buyers said they would consider hybrids, while 6 percent stated interest in their alternative-fuel brethren, hydrogen fuel-cell vehicles, which are not on the market yet free credit report .com. Only 4 percent said they would consider buying sport-utility vehicles.

The WestGroup study was conducted of a sample of 429 adults. It has a margin of error of 5 percent.

Source

With less than two weeks to go before the presidential election, Democratic nominee Barack Obama has a solid 13-point lead over Republican opponent John McCain in Pennsylvania, according to a new Quinnipiac University poll.

The poll found Obama ahead 53 percent to 40 percent in the Keystone State, compared with 54 percent to 39 percent in Quinnipiac's last poll Oct. 1

The economy is the most important issue for Pennsylvania voters, who trust Obama 54 percent to 36 percent to handle the issue, compared with 55 percent to 36 percent in the previous poll.

“Sen. Obama leads comfortably in Pennsylvania, mostly because he has pulled ahead in the four key suburban counties surrounding Philadelphia where Keystone State races are decided,” said Clay F. Richards, assistant director of the Quinnipiac University Polling Institute.

“Obama is leading among whites and blue collar workers, but white men and 15 percent of Sen. Hillary Clinton’s primary supporters are clinging to Sen. McCain, probably not enough to change the tide in the closing days of the campaign,” Richards added.

Obama also polled higher than McCain in key battleground states Florida and Ohio, the Quinnipiac poll found low fee cash advance. The Illinois senator is up 49 percent to 44 percent over his Republican counterpart in Florida, and leads McCain by an even wider margin — 52 percent to 38 percent —in Ohio.

According to Hamden, Conn.-based Quinnipiac, no one has been elected President since 1960 without taking two of these three states in the Electoral College.

Pennsylvania voters give higher approval ratings for the Democratic nominee for vice president, Joe Biden. Fifty-four percent of likely voters have a favorable opinion of Scranton native Biden, with 22 percent having an unfavorable opinion of him. Only 38 percent of likely Pennsylvania voters had an favorable opinion of Republican vice presidential nominee Sarah Palin; 43 percent had an unfavorable opinion of her, according to the poll.

One area where McCain scored higher than Obama in the Quinnipiac poll was the issue of foreign policy. Asked whom they trust more to handle foreign policy regardless of whom they supported for president, 47 percent said McCain, and 45 percent said Obama.

Source

BancorpSouth Inc.’s net income fell 22 percent in the third quarter as the company put more cash aside to cover expected loan losses.

The Tupelo, Miss.-based bank holding company (NYSE: BXS) posted net income of $28.3 million on $173 million in revenue, compared with net income of $36.3 million on $165 million in revenue in third quarter 2007.

Earnings were 34 cents a share, compared with earnings of 44 cents a share in the year-ago quarter.

A consensus of analysts had expected earnings of 43 cents on revenue of $181.6 million.

The company increased its provision for loan losses to $16 24 hour payday advances.3 million in the quarter, up from $11.2 million in the second quarter.

Non-performing loans, those that are 90 days or more past due and payment is no longer anticipated, increased to $65.2 million, or 0.68 percent of all loans and leases. That was up from $46 million, or 0.49 percent, at the end of the second quarter.

At the end of the third quarter, BancorpSouth had $13.3 billion in total assets.

Source

European Central Bank President Jean- Claude Trichet urged banks to start lending again after policy makers put them on to the “the path'' of recovery by pumping record amounts of cash into money markets.

“I expect the banks to normalize their relationships, meaning that they start lending to each other and that they lend to their clients,'' Trichet said in an interview on French radio RTL late yesterday. The banking system is “on the path to normalization,'' he said.

The cost of borrowing dollars in London fell last week for the first week since July after the ECB offered lenders as many euros as they wanted and joined counterparts in promising unlimited dollars as well. Central bankers and governments have stepped up efforts to end the 14-month-old credit crunch that's threatening to tip the global economy into recession.

“We're facing a very important market correction which is lasting,'' Trichet said, declining to say the credit crunch is over. “We are facing a very serious systemic liquidity crisis.''

As well as offering unlimited amounts of dollars and euros to banks, the ECB this month cut interest rates for the first time since 2003 and loosened rules on the collateral it will accept from banks when making loans. European governments including those in France, Germany and Spain committed 1.3 trillion euros ($1.7 trillion) to guarantee bank loans and take stakes in lenders.

Still, in a sign the crisis continues to reverberate, the Netherlands yesterday put 10 billion euros into ING Groep NV after the biggest Dutch financial-services company said it expects its first quarterly loss.

Lehman Collapse

Trichet said policy makers are acting to give banks the ability to refinance and boost their capital after September's collapse of Lehman Brothers Holdings Inc. prompted lenders to hoard cash. That sent the cost of credit surging, hurting the economy by choking off money to consumers and companies.

ECB council member George Provopoulos said the central bank “remains vigilant and will do what is needed'' to both reduce inflation and ensure stability in markets, according to an interview with To Vima newspaper published yesterday. Colleague Ewald Nowotny told Austrian state broadcaster ORF-TV that, while the crisis should be “under control'' by the middle of next year, the economy will suffer for longer.

Trichet criticized investors for creating the crisis by behaving with too much “short-termism,'' which he blamed for amplifying the rise and the decline of markets. He said that having mis-priced risk, financial markets should now be subjected to greater transparency and regulation to curb their volatility electronic check payday advance.

Review Financial System

“We said there was an underestimation of the risks and of the price to be paid for these risks,'' he said. The crisis “must force us to review the entire international financial system.''

ECB council member Erkki Liikanen told Finnish state broadcaster YLE TV1 yesterday that regulation will be strengthened across borders. “All national regulators of banks operating across borders must join forces,'' he said. “It will be a part of EU legislation and I'm sure it will even be agreed on a multinational level beyond that.''

While the ECB this month cut its benchmark rate by a half- point to 3.75 percent, with inflation still almost double its 2 percent limit, Trichet said its focus is “entirely oriented to ensure price stability.''

“We will always, at any moment, do what is necessary so that I can continue to say to our citizens `you can have confidence, you will have medium-term price stability','' Trichet said. Such a goal should lend confidence to financial markets as “there's now more than in the past the recognition of the fact that price stability'' helps expansion and hiring, he said.

`Important Slowdown'

The ECB president described his 15-nation euro-area economy as being in a “very, very important growth slowdown,'' driven by tighter credit and also by this year's record fuel and food costs. Nowotny predicted the growth rate next year “will be significantly below what we have in 2008.''

Such an outlook explains why investors expect the ECB to cut its benchmark rate to 3.25 percent by the end of the year, Eonia forward contracts show.

The ECB, which next releases economic forecasts in December, in September predicted growth of 1.4 percent this year and 1.2 percent in 2009. With the crisis worsening, the International Monetary Fund this month said it expects the euro-area to grow 0.2 percent next year, the weakest since the single currency began trading in 1999, after 1.3 percent in 2008.

Trichet acknowledged his own central bank had taken on risk by boosting liquidity and accepting lower-rated securities for loans.

“We're taking risks and we've made decisions that increased our risks, because we were facing a systemic liquidity crisis of first importance,'' he said. The ECB is an “inspirer of confidence,'' Trichet said.

Source

The redemption value of recyclable bottles in Oregon could raise to 10 cents under a plan proposed by a state task force.

The Joint Interim Bottle Bill Task Force, a group convened by the Legislature to consider changes to the state’s landmark bottle recycling legislation, on Monday released a draft of proposals it will recommend to lawmakers during the next session in January.

Perhaps most critical is a call to increase the nickel redemption value on all recyclable bottles to 10 cents. The task force noted that Michigan, the only state with a 10-cent refund value, has the nation’s highest redemption rate for beer and soda bottles at 90 percent.

Among the other recommendations:

— To further expand the Bottle Bill to include sports drinks, coffees, teas, juices, wines, liquors and other beverages (excluding milk or milk substitutes) effective Jan best payday advance. 1, 2013.

— To support a proposal by beverage distributors to create a network of bottle redemption centers. The distributors have proposed using the money from unredeemed bottle deposits for up to 90 redemption centers statewide.

— To have the state collect the value of unredeemed bottles if the industry-led plan for redemption centers is unsuccessful.

— To limit the redemption of beverage containers purchased out of state.

The draft recommendations are scheduled to be discussed during a Bottle Bill Task Force conference call on Tuesday.

Source

Bank of England Governor Mervyn King should stop giving banks “lessons in morality'' and focus on preventing financial collapse, said Patrick Minford, a former adviser to Margaret Thatcher.

“The bank has been detached and not got the point that we have serious disarray in financial markets,'' Minford, who is now an economics professor at Cardiff University, said today in an interview. “Its role is to get in there and sort it out, not make quasi-regulatory moralistic noises at this stage of the game.''

King will next week unveil a planned revamp of money-market operations to help the banking system weather the crisis. The Bank of England, which joined a global round of surprise rate cuts this week, has yet to reduce the penalty on emergency loans and the mortgage securities it accepts as collateral must have the highest credit rating.

“I think the bank has performed so badly it's asking a lot for people to trust them,'' said Minford. “The banks themselves must feel really let down. For the Bank of England to offer extra help in giving banks a good spanking is really offensive.''

The U.K. central bank has so far refrained from lowering the margin at which they set the so-called penalty rate. The European Central Bank halved the margin it charges banks hours after the coordinated rate cuts. The Bank of England's penalty rate is set at one percentage above the benchmark rate, currently 4.5 percent, double the margin set by the ECB.

`Lessons in Morality'

“It is really not King's job to read us lessons in morality at this stage,'' Minford said. “It's to get behind the banking system and avoid the consequences of collapse. That involves a scheme, very broadly drawn in terms of acceptable assets, the broadest range of assets to be accepted by the bank.''

The bank's emergency lending program accepts as collateral residential mortgage-backed securities issued in the U.K. or European Economic Area rated AAA, the highest level. On such securities with a maturity date more than a decade away, it will lend only 78 pounds ($134) for every 100 pounds in loan value, a “haircut'' of 22 percent, its strictest terms. The comparable discount for government debt of similar maturity is 5.5 percent, while government agency debt is discounted by 14 percent.

“The special liquidity scheme has one major flaw: they charge a huge fee to provide liquidity,'' Minford said. “They have been feeding the problem. They need liquidity at base rate, plus a small penalty rate.''

The U.S. Federal Reserve and other central banks on Oct. 8 delivered a coordinated round of interest-rate reductions to protect economies from the worst financial market crisis since the Great Depression. The Bank of England cut its rate by half a point after keeping it unchanged at 5 percent since April.

`Kicking and Screaming'

“The Bank of England's behavior has been a major contributor to the crisis,'' Minford said. “They've been dragged kicking and screaming into the role they've been forced to undertake.''

Former Bank of England policy makers have said more rate cuts will be needed. Christopher Allsopp, a member of the monetary policy committee from 2000 to 2003, said that the bank will probably need to follow the rate cut with “another big one.''

“The Bank of England is now faced with possible meltdown and deflation,'' said Minford. “The central bank needs to get behind the banking system and avoid the consequences of collapse.''

Source

Belgium and Luxembourg raced to find a buyer for troubled financial group Fortis (FOR.BR: Quote, Profile, Research, Stock Buzz) before markets opened on Monday and an industry source said BNP Paribas (BNPP.PA: Quote, Profile, Research, Stock Buzz) was negotiating for control.

In a second weekend of crisis talks, Belgian Prime Minister Yves Leterme told broadcasters on Sunday he hoped to keep the Belgian and Luxembourg operations of the group together after the Dutch nationalized most of Fortis’s Dutch units on Friday.

“There are contacts with private groups, several private groups. We are not going to decide in this situation with our backs to the wall,” he said. “The only thing certain is that we are going to send a clear and strong signal to the markets before they open tomorrow.

An industry source close to the situation confirmed reports in several Belgian media that BNP Paribas was negotiating to take up to 80 percent of Fortis banks in both countries, but said nothing had been agreed yet (fast cash).

Belgium and Luxembourg, which took 49 percent stakes in the Fortis banks in their countries last Sunday, would keep a 20 percent stake in each. BNP declined comment.

Luxembourg Budget Minister Luc Frieden told RTL television the governments were close to a solution for Fortis involving one of the Europe’s most solid banks.

“We are very close to an agreement for a clever combination of a strong state, taking responsibility in the bank, and one of the biggest international banking groups,” Frieden said.

He declined to name the group but said it would involve a public-private partnership in which the state would keep a veto right over strategic decisions. 

Read more