Finance news. My opinion.

Restaurant chain Saladworks has signed a franchise deal that will introduce the company’s salads, soups, wraps and Fusion sandwiches to the Triangle.

Conshocken, Pa.-based Saladworks said in a news release Tuesday that the father-and-son team of Baldev and Unmesh Patel will develop three Saladworks restaurants in Wake County. The company did not specify when or where in the county the restaurants would open.

The Patels are moving to the Triangle from southern New Jersey, where they own and manage locations for Dunkin Donuts, Hampton Inn, Comfort Inn, and Howard Johnson’s, Saladworks spokeswoman Erin Salvadore said No teletrak payday loan. The Saladworks locations will be the Patels’ first franchise locations in North Carolina, Salvadore said.

Saladworks operates more than 100 restaurants in 11 states, and the chain currently has another 60 locations in development.

Entrepreneur Magazine named Saladworks the nation’s top salad franchise for 2009 and 2010.

Source

Get quick cash with no faxing required!

The U.S. economy continued to grow during the second quarter, the government reported Friday. But the pace slowed more than economists were expecting, raising concern about growth - or even another recession - in the months ahead.

Gross domestic product, the broadest measure of the nation’s economic activity, rose at a 2.4% annual rate during the three months ended June 30, the Commerce Department said.

The sluggish pace was down from the upwardly revised 3.7% growth rate in the first quarter, and missed economists’ forecast for a 2.5% increase.

Still, the figure marked the fourth straight quarter of growth and gave credence to some economists’ views that the recession that began in December 2007 likely ended at some point in mid-2009.

"This solid rate of growth indicates that the process of steady recovery from the recession continues," said Christina Romer, chair of the White House Council of Economic Advisers, in a statement.

"Nevertheless, faster growth is needed to bring about substantial reductions in unemployment," she added. "Much work clearly remains to be done before the U.S. economy is fully recovered."

Most troubling to economists - particularly in the months ahead - was a slowdown in consumer spending, which accounts for 70% of economic activity.

Nigel Gault, chief U.S. economist at IHS Global Insight, said the subdued consumer spending, pressured by high unemployment and debt as well as a lack of income and credit access, could lead to slower growth - or even another downturn.

"People are continuing to cut back, and that could mean that third-quarter growth will be the worst since the end of the recession," Gault said. "The slowing growth path leaves the possibility of a double-dip recession on the table."

The report showed consumer spending rose at a modest 1.6% rate last quarter. That compares to a 1.9% rise during the first quarter, revised down from a previously reported 3%.

A surge in imports also weighed on domestic growth, the government said. Imports spiked 28.8% during the second quarter, up from an 11.2% hike in the previous quarter.

But that increase was mostly due to 17% jump in business investments, as business increased spending by 22% on software and equipment, which Gault said are primarily produced outside of the United States.

"Businesses reduced spending very sharply last year during the recession by cutting costs and employees," Gault said. "The pullback helped them prop up profits. Companies are sitting on huge piles of cash, which they’re now putting to work."

While they’re willing to refresh their technology equipment, Gault said businesses are still cautious when it comes to hiring, and that will continue to strain the economy.

He added that the quarter’s significant increases in housing and government spending were driven by temporary factors and will likely reverse into declines in the current quarter.

The report showed that residential investment climbed 28% during the second quarter, as Americans rushed to buy homes ahead of the expiration of the homebuyer tax credit.

And government spending rose 9.2% during the quarter, up from 1.8% in the first quarter. Gault attributed that growth to spending related to the decennial census.

Recession deeper than previously thought

Revisions to annual GDP rates also released Friday indicated that the economic downturn was worse than the government previously estimated, and the recovery was more slack.

Between the fourth quarter of 2007, when the recession officially began, and the second quarter of 2009, when many economists say it ended, GDP dropped by 4.1%, marking the deepest recession since 1947. The government’s prior estimate for the overall decline during the period was 3.7%.

"It now appears that the financial crisis may have affected production substantially more quickly than was previously reported or realized at the time," Romer said.

The most significant factor in the downward revisions was muted consumer spending, but the data also showed that the consumer savings rate is higher than expected.

Annual growth rates for 2007, 2008 and 2009 were all revised lower.

In 2007, the government said the economy grew at a rate of 1.9%, down from the 2.1% it reported earlier. In 2008, economic activity was flat instead of ticking up 0.4%. And in 2009, the economy shrank at a rate of 2.6%, weaker than the 2.4% rate previously estimated.

"While the recession was somewhat deeper than originally thought, the recovery was also much more tepid that previously thought and is slowing rather than accelerating," said Martin Regalia, chief economist for the U.S. Chamber of Commerce, which has been critical of Obama administration business policies.

Are you a state or city worker that has been furloughed over the past year? Is this causing you financial hardship? If so, send an email to realstories@cnnmoney.com and you could be profiled in an upcoming piece at CNNMoney.com. For the CNNMoney.com Comment Policy, click here.  

Source

The Food and Drug Administration is looking into reports of at least 775 serious side effects from drugs recalled by McNeil, a division of Johnson & Johnson, according to a source close to a Congressional investigation.

Included in the reports were 30 deaths, nearly all of which were found to not be tied to McNeil’s recall of Tylenol, Motrin and Benadryl drugs from Jan. 1, 2008 through April 30, 2010, according to another source close to the investigation.

The FDA is also investigating reports of several hundred serious side effects — or "adverse events" — and seven deaths since May 1, when McNeil recalled 50 children’s versions of these non-prescription medicines because of serious quality and safety concerns.

The FDA’s investigation into the recalls is ongoing and the agency would not comment on the matter.

Adverse event reports are consumer complaints of a serious side effect associated with the use of a medical product, according to the FDA. Adverse events could include death, hospitalization, disability and other health complications.

The House Committee on Oversight and Government Reform has scheduled a hearing on May 27 to examine the recall.

Following the most recent recall, Johnson & Johnson (JNJ, Fortune 500) has suspended production at McNeil’s facility in Fort Washington, Penn., that manufactured the children’s drugs.

McNeil’s latest recall is its fourth in the past seven months:

• In November 2009, five lots of Tylenol Arthritis Pain 100 count with the EZ-open cap were recalled for unusual odor leading to nausea, stomach pain, vomiting and diarrhea.
• In December, the recall was expanded to include all product lots of Tylenol Arthritis Pain caplet 100 count bottles with the red EZ-open cap.
• In January 2010, the recall was widened to an undisclosed number of Tylenol, Motrin and other over-the-counter drugs after complaints of consumers feeling sick from an odor.

McNeil has maintained that its recall of the children’s drugs was not "undertaken on the basis of adverse medical events" but as a precautionary measure.

"We track all adverse events and thoroughly investigate all serious adverse cases that are reported and, in turn, report these to the FDA, whether or not the event may be caused by our products," McNeil said in a statement Tuesday.

The FDA, which earlier this month issued a scathing 17-page inspection report listing 20 violations at the Fort Washington plant, also maintains that the recalled drugs pose a "remote" potential for serious health problems.

The House panel invited Johnson & Johnson Chief Executive William Weldon to testify but he declined to be present due to health reasons. The Committee said Colleen Goggins, worldwide chairman of Johnson & Johnson’s consumer group will testify at the hearings.

The FDA said Dr. Joshua Sharfstein, principal deputy Commissioner, Deborah Autor, Director of the office of compliance and Michael Chappell, acting commissioner for regulatory affairs, will testify on behalf of the agency. 

Source

The number of first-time filers for unemployment insurance fell last week for a fourth straight week, according to a weekly government report released Thursday.

There were 444,000 initial jobless claims filed in the week ended May 8, down 4,000 from an downwardly revised 448,000 the previous week, according to the Labor Department’s weekly report. The number of claims is the lowest since the 442,000 reported in the week ended March 27.

The number of claims was slightly higher than expected. Economists surveyed by Briefing.com had expected new claims to fall to 440,000.

The downward trend in initial claims continues to show general improvement in the economy, and is consistent with monthly reports that show employers are starting to add jobs, said Michael Hanson, senior economist with Bank of America Merrill Lynch.

The government’s latest monthly jobs report, released Friday, showed employers added 290,000 jobs in April, the best gain in four years.

The four-week moving average for weekly initial claims was 450,500, down 9,000 from the previous week. The Labor Department tracks the four-week moving average of the weekly figures, to smooth out the volatility of the measure.

Initial claims have been stuck in the mid- to upper 400,000s since November, but seem to be hitting some resistance once they drop around 450,000.

While the recent decline in the four-week average is encouraging, economists are really looking for the number to get below 400,000 to spur sustainable job growth, said Tim Quinlan, an economist with Wells Fargo Securities.

Quinlan said he expects to see gradual improvement in payrolls through the course of the year, but no dramatic increases in job growth until initial claims fall below 400,000.

Also showing some resistance, instead of a consistent trend, are continuing claims, the number tracking people who file for unemployment benefits for two weeks or more. The government said 4,627,000 people filed continuing claims in the week ended May 1, the most recent data available. That was up 12,000 from the preceding week, but overall is still much improved over the 6,389,000 continuing claims reported in the comparable week last year.

"If you just got laid off and trying to find a job, it’s still a really difficult environment, and the climb in continuing claims tells us it’s taking people a while to land their feet in a job," Quinlan said.

Standard unemployment benefits usually last 26 weeks. The continuing claims number does not include those who have moved into state or federal extensions, or people whose benefits have expired.  

Source

The snow storms that slammed the mid-Atlantic region this month shut down government agencies around Washington, D.C., long enough for the U.S. Food and Drug Administration to delay its review of Alkermes Inc.’s new drug application for diabetes therapy exenatide.

Waltham, Mass.-based Alkermes (Nasdaq: ALKS), which co-developed the drug with Amylin Pharmaceuticals Inc. and Eli Lilly and Co., said the FDA is adding five days to its review of exenatide, moving its action date out to March 12 cash advance payday loan.

Exenatide is intended to be an extended-release medication for Type 2 diabetes designed to deliver continuous therapeutic levels of exenatide in a single weekly dose. The application for exenatide’s once-weekly formula was submitted in May 2009 and accepted by the FDA in July 2009.

Source

General Electric Co and Vivendi SA have agreed in principle to value the French company’s 20 percent stake in NBC Universal at $5.8 billion, a source familiar with the matter said on Monday, paving the way for Comcast’s proposed deal with GE.

GE and Vivendi have spent weeks negotiating over the value of Vivendi’s stake in NBC Universal, holding up Comcast’s plan to buy a controlling stake in NBC Universal. Vivendi has to agree to sell its stake to GE to make the Comcast deal possible.

With the two sides reaching an agreement on valuation, an announcement on the Comcast-GE deal could come as early as the end of this week, a second source said.

(Reporting by Jui Chakravorty and Anupreeta Das; Editing by Richard Chang)

Read more

The Association of Southeast Asian Nations said it is “on track” to achieve its goal of eliminating tariffs on most goods traded within the region by the beginning of 2010.

The group aims to form a free-trade area by Jan. 1 that would remove tariffs on more than 87 percent of imports, according to a statement by Southeast Asian leaders, who are meeting in Cha-Am, Thailand this weekend. Six of the bloc’s 10 members will implement the tariff eliminations, while the rest, which are less developed, will follow later.

Asean is attempting to create an economic zone modeled after the European Union, without a common currency, by 2015. The group has said it needs to improve its competitiveness as China and India, the world’s two fastest-growing major economies, attract an increasing chunk of global investment.

“The effective implementation of this major milestone in the free-trade area brings Asean closer to the Asean Economic Community where free flow of goods is one of its major objectives,” the statement said.

The Southeast Asian nations are also planning to open industries including transportation and financial services. Meanwhile the group’s plan to implement a free-trade agreement in goods may be delayed amid disputes among some nations.

Thailand and the Philippines are arguing over tariffs on rice imports. Thailand has threatened not to approve the Asean Trade in Goods Agreement if the Philippines doesn’t lower import tariffs on rice, the Bangkok Post reported Oct. 20, citing Nuntawan Sakuntanaga, head of the Trade Negotiations Department.

“We urge member states to resolve the differences at the earliest opportunity,” the leaders said today.

As well as Thailand and the Philippines, Asean’s members are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore and Vietnam.

Source

Australian central bank Governor Glenn Stevens’s view that he can’t be “too timid” in raising borrowing costs is stoking speculation the benchmark interest rate will be increased next month by the most in a decade.

Experience “counsels against” an approach where policy makers who cut rates rapidly in response to a threat become “too timid to lessen that stimulus in a timely way when the threat has passed,” Stevens said in Perth yesterday.

The comments pushed Australia’s currency to a 14-month high and prompted investors to triple bets policy makers will increase the overnight cash rate target on Nov. 3 by half a percentage point to 3.75 percent. Stevens became the first Group of 20 central banker to increase borrowing costs when he unexpectedly boosted the rate last week by a quarter point.

“Stevens has put 50 basis-point moves on the table,” said Matthew Johnson, an interest-rate strategist at UBS AG in Sydney. “The safest time to raise rates quickly is when you know they are at the wrong level, and this is the first time a recession has ended with so little spare capacity.

“It’s not going to be long before the economy is running at full pelt again.”

Investors are certain Stevens will raise rates at least another quarter point next month as consumer confidence rises and unemployment falls, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange. Chances of a half-point increase next month rose to 36 percent from 10 percent prior to Stevens’s speech and 2 percent on Oct. 14, the futures showed at 9:09 a.m. today.

Currency Rises

The Australian dollar rose to as high as 92.11 U.S. cents after yesterday’s speech, the strongest since August 2008, and traded at 92.09 cents at 9:20 a.m. in Sydney today. The two-year government bond yield jumped to 4.81 percent at 9:20 a.m. today from 4.63 percent before yesterday’s speech.

“I’ve said it consistently, interest rates will go up because they’ve been brought to emergency lows,” Prime Minister Kevin Rudd told Melbourne radio station 3AW today. “I don’t see any point whatsoever in trying to be cute with people about that.”

Stevens slashed borrowing costs by a record 4.25 percentage points between September 2008 and April to cushion the nation’s economy against the global financial crisis. His cuts included 1 percentage point reductions in October, December and February, the biggest moves since 1992.

‘Too Timid’

“If we were prepared to cut rates rapidly, to a very low level, in response to a threat but then were too timid to lessen that stimulus in a timely way when the threat had passed, we would have a bias in our monetary policy framework,” Stevens said. “Experience here and elsewhere counsels against that approach.”

“The governor has made it clear he’s keen to get rates back to normal quickly,” said RBS Group Australia Ltd. Chief Economist Kieran Davies, who is tipping a half-point increase next month. The last time Australian policy makers raised borrowing costs by that much was in February 2000.

Davies is the only one of 19 economists surveyed by Bloomberg after Stevens’s speech to tip a half point increase. Sixteen expect a quarter-point move and two predict no change.

Australia is only the second country after Israel to raise borrowing costs since the height of the global financial crisis. Israel isn’t a member of the G-20. U.S. Federal Reserve Chairman Ben S. Bernanke said last week he and his colleagues at the Fed “believe that accommodative policies will likely be warranted for an extended period.”

Other Asian central banks may follow Stevens in raising rates.

‘Tightening Wave’

“The region could be at the leading edge of the monetary tightening wave, though we believe the pace will be measured and modest,” Lee Heng Guie, chief economist at CIMB Investment Bank Bhd. in Kuala Lumpur, part of Malaysia’s second-largest banking group, said yesterday in a note to clients. “India and Korea will probably be the first among the Asian central banks to raise rates in the first half of 2010.”

Evidence is mounting that Australia’s economy, which skirted the global recession, is strengthening. Recent reports show consumer confidence rose this month to the highest level in more than two years, the jobless rate unexpectedly fell to 5.7 percent in September from 5.8 percent in August, the first drop in five months, and retail sales gained.

Gross domestic product rose 1 percent in the first half of this year as consumers increased spending after the government distributed more than A$20 billion ($18 billion) in cash to households. The government is spending another A$22 billion on roads, railways and schools.

“The period of greatest weakness in the Australian economy is probably past,” Stevens said yesterday. “Barring another serious international setback, the economy is likely to continue on a path of gradual expansion during 2010.”

Source

World leaders announced the Group of 20 nations is replacing the G-8 as the main forum for global economic coordination, reflecting a shift in power from rich countries to emerging markets.

The decision, unveiled in a White House statement late yesterday, comes as President Barack Obama, Chinese President Hu Jintao and other leaders gather in Pittsburgh for their third summit in a year to reshape the governance of the world economy following the worst financial crisis since the Great Depression. The G-8 will still exist and focus on matters such as development and security matters, Prime Minister Stephen Harper told reporters today. Canada hosts the G-8 next year.

The transfer of influence to the broader group, whose membership ranges from the U.S. to China to Saudi Arabia, symbolizes the fact that the richest industrial nations now lack the sway to govern the world economy alone after their excesses sparked the turmoil that tipped the globe into recession.

“The G-20 needs to prove it can make the tough calls and implement agreed outcomes in a timely fashion,” said Tim Adams, who served as the U.S. Treasury’s top international official under former Secretaries John Snow and Henry M. Paulson, and is now managing director of the Lindsey Group. “I think it will succeed, but the G-20 must prove skeptics wrong, and that will take time and effort.”

‘Premier’ Economic Summit

The G-20 accounts for about 85 percent of global gross domestic product and was created after a spate of currency devaluations plagued emerging markets from Russia to Thailand in the 1990s. The G-8 oversees about two-thirds of global GDP.

Canada will host the first summit of leaders from the G-20 in June under the grouping’s new role as the “premier” global economic summit, Harper said, while a second summit will take place in South Korea in November.

Canada will also hold a summit of leaders from the smaller group at about the same time, Harper said.

“They will be distinctive summits,” Harper told reporters today in Pittsburgh in a joint press conference with South Korean President Lee Myung-Bak. “We are not replacing the G- 8.”

The G-8 meeting was already scheduled to take place June 25-27 in Muskoka, Ontario, where Harper said the G-20 summit will also take place.

A government official, on condition he not be identified, told reporters the two summits will be back-to-back. The official said talks on making the G-20 the main economic forum first began at the G-8 summit in L’Aquila, Italy, last July.

‘One Chance’

“What we are trying to do is create a system for economic cooperation across the world,” U.K. Prime Minister Gordon Brown said yesterday. “We have this one chance to make a huge success of international cooperation.”

Originally a forum for finance chiefs, G-20 leaders met for the first time in Washington last November and again in April in London as they sought to rescue the global economy from its deepest slump in seven decades.

The financial crisis has thrust greater responsibility on to the G-20. At the onset of the turmoil, central bankers used talks near Cape Town in November 2007 to hatch a plan to inject more dollars into markets.

The G-20’s newfound power reflects how the recent slump was led by housing and financial market busts in major economies and the recovery is now being driven by countries such as China. That’s a reversal from previous crises when the G-8 was in the driver’s seat of the recovery effort.

China’s Role

China has already overtaken Germany to become the world’s third-largest economy and may soon be named the biggest exporter. It passed Japan a year ago as the main foreign investor in U.S. government debt. China, Russia, Brazil and India together hold about 42 percent of international reserve assets, excluding gold.

“You can’t possibly have a mechanism” for sustaining global economic stability without including China, said Laura D’Andrea Tyson, an outside adviser to President Barack Obama and former chairman of the White House Council of Economic Advisers under President Bill Clinton. “It’s too big a player in trade and investment.”

Economists at JPMorgan Chase & Co. predict developed economies will shrink 3.3 percent this year and grow 2.8 percent in 2010, compared with emerging-market growth of 0.5 percent and 5.8 percent respectively.

G-20 leaders meeting today are discussing an agenda aimed at tackling global imbalances, restraining banker pay, raising capital at financial companies and revamping control of the International Monetary Fund.

Bretton Woods

The need for economic policy makers to convene regularly grew out of the turmoil that followed the abandonment of the Bretton Woods system of fixed currencies and the oil shock of the 1970s. In 1975, French President Valery Giscard d’Estaing gathered the leaders of West Germany, Italy, Japan, the U.K. and the U.S. at a summit in Rambouillet, France.

The group soon expanded to seven and its influence reached its zenith through the Louvre and Plaza currency accords of the 1980s and with its responses to financial crises in Asia, Latin America and Russia in the 1990s. It hasn’t intervened in foreign exchange markets since a rescue of the euro in September 2000.

Russia joined after the end of the Cold War to expand it to the G-8, although its officials are still not invited to finance and economic talks.

More Investor Attention?

The G-20’s new formal role may prompt some investors who had dismissed the G-7 as irrelevant to pay more attention to international gatherings.

“On G-7 meeting weekends now I go fishing, no reporters call and writing up summaries of the G-7 for the most part is pointless as there is no news,” David Gilmore, a partner at Foreign Exchange Analytics, wrote in a report to clients today.

The G-20 members are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the U.S., the U.K. and the European Union.

Source

Paul Volcker, a former Federal Reserve chairman and now a outside economic adviser to President Barack Obama, criticized the administration’s plan to give the Fed authority to supervise “systemically important” financial firms.

“I don’t know what systemically important institutions are,” Volcker said. “But I’m sure that if you picked them out, people will assume they’re going to be saved, that they’re too big to fail.”

Volcker’s remarks appeared in the form of a “conversation” with Gary Stern, who retired last month as president of the Fed Bank of Minneapolis, and published in “The Region,” the bank’s quarterly bulletin. Volcker, 81, is chairman of the Economic Recovery Advisory Board, a body created by Obama in February to recommend responses to the crisis.

Obama’s plan to give the Fed powers to monitor risks to the financial system is aimed at avoiding a repeat of the financial meltdown that led to $1.6 trillion of bank losses and writedowns and triggered a global recession. The Obama plan would label banks including Bank of America Corp. and Citigroup Inc. as “systemically important” and subject them to capital and liquidity requirements and stricter oversight.

Jen Psaki, a White House spokeswoman, declined to comment on Volcker’s remarks.

Council of Regulators

The plan has drawn criticism from lawmakers including Senate Banking Committee Chairman Christopher Dodd, who has said the central bank failed to use its existing supervisory powers to curb some of the lending practices that contributed to the crisis. Congressional leaders are leaning toward vesting authority over capital, liquidity and risk-management practices of big banks in a council of regulators.

The administration also wants the power to seize financial institutions if they run into trouble. And Obama’s regulatory framework would make it mandatory for large hedge funds, private-equity firms and venture-capital funds to register with the Securities and Exchange Commission.

Volcker said the central bank should instead oversee bank regulation carried out by an independent agency. The chairman of that agency could also be a vice chairman of the Fed, both to keep the central bank in the loop and increase accountability.

Volcker, who was Fed chairman from 1979 to 1987, said the central bank itself needs some reorganization “to more clearly focus responsibility for the regulatory side of the house.”

“There’s no doubt in my mind that the attention the Federal Reserve has paid to regulation has gone up and down over the years, depending upon both the intellectual and market environment, and the personalities involved.”

Hedge Funds

He also would limit regulation of non-bank financial institutions such as hedge funds.

“If they get big enough, then they’re going to need capital requirements and leverage requirements,” Volcker said. “But I don’t think that’s going to be many firms. I’d like to create the impression, to the extent you can, that there’s no automatic bailout of those institutions.”

Volcker said he has a different “regulatory philosophy” than the Treasury Department. Banks, he said, provide basic financial services, including payments and credit, and should have some government protection and support.

Hedge funds, private equity, and proprietary trading are different businesses, Volcker said, and should be kept separate from banking. He cited Goldman Sachs Group Inc., which became a bank holding company last September, took government aid, and yet has a large proprietary trading operation that is responsible for much of its profit.

Taxpayer Support

“There’s nothing wrong with making money,” Volcker said. “But I don’t want them to make money by taking risks with the support of the taxpayer.”

An industrial company such as General Electric Co. presents another problem, he said.

“It’s certainly not a bank in any traditional sense, but it’s a big financial business,” Volcker said. “Do you want to get into the business of directly or indirectly supporting General Electric?”

Volcker, who pushed the federal funds rate as high as 20 percent to throttle inflation in 1980, also took issue with the current Fed’s management of monetary policy. Its statements are confusing, he said: on the one hand they worry about inflation falling, on the other, the commit to price stability.

“I say, ‘Look, make up your mind,’” Volcker said.

He disagrees with Fed Chairman Ben S. Bernanke’s call for an inflation target. “I have not been in favor of inflation targeting,” Volcker told Stern. “I just don’t like it symbolically.”

In congressional testimony in February, before the administration released its financial-overhaul plan, Volcker said giving the Fed additional regulatory authority would distract members from their main job of making monetary policy.

Source