Finance news. My opinion.

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.

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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.

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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.

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The U.S. housing slump probably showed no sign of ending and the trade deficit shrank in August, a month before the turmoil in financial markets came to a head, economists said before reports this week.

The number of Americans signing contracts to purchase previously owned homes probably fell 1.1 percent in August, according to the median estimate in a Bloomberg News survey ahead of Oct. 8 figures from the National Association of Realtors. The drop in oil prices caused imports to fall, narrowing the trade gap, a report two days later may show.

Job losses swelled last month, stock markets tumbled as commercial and investment banks collapsed, and money-market rates jumped to records as the credit crisis intensified. Passage of the government's $700 billion rescue plan failed to ease concern the economy will falter, signaling the Federal Reserve may need to lower interest rates.

“The economy was on the way down even before the latest tightening in the credit crunch,'' said Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts. “The economy's tailspin and the tightening of the credit noose argue strongly for interest-rate cuts'' by the Fed.

Pending home sales may have declined in August for a second month, the first back-to-back drop since March. A slowdown in demand will add to the glut of unsold houses, pushing property values down even more.

Home Prices

A private report last week showed home prices in 20 U.S. cities declined at the fastest pace on record in the year ended July. The S&P/Case-Shiller home-price index dropped 16.3 percent from July 2007.

Declining home prices threaten to throw more properties into foreclosure, prompting banks to keep reining in credit.

KB Home, the fifth-largest U.S. homebuilder by revenue, last month reported wider than forecast third-quarter losses after sales plummeted 56 percent compared with the same period a year earlier.

“Market fundamentals appear unlikely to improve significantly in the near term, as foreclosures continue to rise, housing inventory overhang remains at historically high levels and mortgages have become more difficult to obtain,'' Chief Executive Officer Jeffrey Mezger said in a statement Sept (instant payday loans). 26.

Congress last week passed the administration's rescue package that lets the government buy troubled assets from financial institutions damaged by the subprime crisis. President George W. Bush signed the measure into law Oct. 3.

Payrolls Drop

Employers cut 159,000 workers from payrolls in September, the most since 2003, and the unemployment rate was unchanged at a five-year high of 6.1 percent, the Labor Department said last week.

Odds the central bank will lower its benchmark rate, currently at 2 percent, by at least a half percentage point between now and its next meeting on Oct. 29 rose to 100 percent on Oct. 3 compared with no chance a month earlier.

The trade gap probably shrank 5.1 percent to $59 billion from $62.2 billion in July, according to the median estimate in a Bloomberg News survey ahead of Commerce Department figures on Oct. 10.

The cost of a barrel of crude oil averaged $119.77 in August, down from $132.04 in July. Prices have retreated further since then, dropping below $92 a barrel last week.

Exports, Growth

While the decline in the trade gap reflects forecasts for a drop in oil imports, economists will also be looking for evidence that American exports are starting to suffer as economies in the euro zone and Japan falter.

A stronger dollar is also making U.S. products less competitive. The dollar has gained nearly 7 percent since Aug. 1 against a trade-weighted basket of currencies of major trading partners.

Import prices are projected to drop 2.8 percent in September after a 3.7 percent drop the prior month, a Labor Department report Oct. 10 may show according to the Bloomberg survey.

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Kansas City Mayor Mark Funkhouser and Mayor Pro Tem Bill Skaggs lost another round in an attempt to hire a new city manager in place of Wayne Cauthen.

The Missouri Court of Appeals, Western District, ruled Tuesday that a city manager can be removed only with the mayor’s approval and the ratifying vote of six other council members, or, absent the mayor’s approval, with nine council members in favor of removing the city manager.

The city can’t remove a city manager merely by allowing the specific time period of the contract to expire, as Funkhouser tried to do in 2007.

“The expiration of the employment agreements did not serve to remove the city manager from office but merely signaled the end of the time period during which the compensation, management goals and performance guidelines set forth in the agreement were applicable,” the opinion stated.

Skaggs couldn’t immediately be reached for comment.

On Oct faxless payday loans. 18, the Kansas City Council passed an ordinance to begin negotiating a new contract for Cauthen. On Dec. 10, Funkhouser said in a memo that he wouldn’t sponsor a resolution for a new contract for Cauthen and wanted instead to find another city manager.

Three days later, the council passed an ordinance that authorized a new contract with Cauthen anyway.

Skaggs then sued the city on the claim that the council didn’t have the authority to enact ordinances for new contracts for city managers.

A trial court judge dismissed that case on summary judgement in favor of the city, leading to the appellate court ruling.

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Glen Terry, president and CEO of Tri-Valley Bank, resigned abruptly to take the president and CEO role at struggling Vineyard National Bancorp in Corona, the parent of Vineyard Bank N.A.

Terry left Tri-Valley Bank after just four months on the job.

John Rockwell, chief operating officer, and Eugene Jeanne, chief financial officer, will oversee Tri-Valley Bank during a transitional period as it undertakes a search for a new CEO. Rockwell served as interim chief financial officer after founding CEO Bill Nethercott left the bank earlier this year to help start another bank in San Francisco.

Having just gone through a CEO search several months ago, Tri-Valley already has a search firm and a list of potential candidates for the CEO position, said Jim Snell, chairman of Tri-Valley Bank, who added that Terry’s resignation, which he received via e-mail on Sept, 15, came as a surprise.

“I’m upset by it, but it’s not a devastating blow,” Snell said.

Three-year old Tri-Valley in August said its total assets topped $100 million. Near the end of the third quarter, the bank had $82 million in deposits and $78 million in loans, with a substantial amount of new loans in the pipeline, Snell said. The bank’s ratio of noncurrent loans to total loans stood at 0.63 percent at the end of the second quarter. While the bank has reported a net loss of $680,000 this year through June 30, Snell said that a noncash stock option expense that has hurt earnings goes away effective this month.

Vineyard announced Terry’s appointment, and the appointment of Lucilio Couto as executive vice president and chief credit officer, on Sept payday loan. 18. Terry's appointment was effective Sept. 12, according to Vineyard.

Terry, a Vineyard shareholder, was elected to Vineyard’s board of director at the bank’s annual meeting on Aug. 5. He was part of a alternate slate of directors proposed by the bank’s previous CEO, who was mounting a proxy fight.

Vineyard, with $2.2 billion in assets, has struggled amid huge losses from soured real estate loans. It is operating under a consent decree with the office of the Comptroller of the Currency, its regulator, that required the bank to establish a compliance committee, and name a new president and CEO and chief credit officer by Oct. 31. It must also maintain appropriate regulatory capital levels; just Friday it proposed raising as much as $250 million through a private placement of convertible debt and common stock in an effort to raise capital. Vineyard has offices in Los Angeles, Marin, Orange, Riverside, San Bernardino, San Diego, Santa Clara and Ventura counties.

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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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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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The public will be able to pick up pieces of memorabilia at an auction of Gold’s Gym equipment this weekend.

Everything is being sold at Saturday’s auction at the gym at 768 South St. in Honolulu— from treadmills and stairsteppers to free weights and circuit machines, according to auctioneer Joe Teipel.

Teipel said memorabilia includes pieces from the original Gold’s Gym in Venice Beach, Calif., and items with the distinctive Gold’s logo.

Teipel will hold auction previews on Friday and Saturday mornings; the auction begins at 10 a.m http://easy-quick-payday-loans.com. Saturday.

Gold’s Gym International announced last month that it would close the popular gym at the end of August. Approximately 1,500 active memberships were transferred to the Powerhouse Gym at 432 Keawe St. in Kakaako.

The gym has donated some of its equipment to local high schools, which also will be the beneficiary of any unsold items.

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