Business and Finance

After being skewered by Congress and lampooned on NBC’s Saturday Night Live, the CEOs of Detroit’s three automakers may make their return trip to Washington by car instead of private jets as they seek a federal government bailout.

The Detroit area’s auto industry, whose livelihood depends on the health of Chrysler LLC, Ford Motor Co. and General Motors Corp., spent the weekend and discussing how to set up a car caravan to D business cards online.C.

What’s for certain is GM CEO Rick Wagoner won’t go by corporate jet, although spokespeople for the Detroit Three wouldn’t comment on specific travel plans, citing security reasons.

Associated Press

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Canadians are increasingly gravitating to full-featured wireless devices such as the BlackBerry and iPhone, but are reluctant to sign up for the pricey monthly data plans that normally accompany them.

A recent survey of 15,000 Canadian wireless users by J.D. Power and Associates found 25 per cent of respondents currently own a smartphone, devices that combine voice calling with mobile Web browsing and multimedia functions, and that 65 per cent of those customers indicated they were keen on making a smartphone their next device.

The study comes during a year in which all-in-one devices were in the spotlight with the Canadian release of Apple Inc.’s popular iPhone and Research In Motion Ltd.’s BlackBerry Bold, both of which run on high-speed wireless networks.

But the survey also found the majority of respondents didn’t foresee themselves subscribing to monthly data plans that permit activities such as Web browsing or downloads, with roughly one-third of respondents citing cost as the main reason.

"Consumers are really fascinated by the functionality and the features of a smartphone, but they’re probably not ready to go to the next level given the higher data package cost," said Lubo Li, senior director of J.D. Power in Toronto.

"I mean if you look at the options on the market, many of them are quite expensive."

While 57 per cent of consumers also cited a lack of need for mobile Internet access, Li noted there are only a handful of devices currently on the market – particularly the iPhone – that offer a compelling mobile Web browsing experience.

In general, Li said Canadian wireless subscribers now cite cost as the main factor when deciding between devices and wireless providers, compared with call quality just a few years ago cash loan in one hour.

High wireless prices, particularly for data, were among the reasons the federal government cited when it decided to set aside wireless airwaves for new entrants in a recent auction.

The move was designed to boost competition in an industry dominated by Rogers Communications Inc., Bell Canada Inc. and Telus Corp.

The rising interest among Canadians in smartphones mirrors global findings that point to the category as a huge growth area for the mobile-phone industry.

It’s also among the reasons some analysts continue to be bullish on the prospects for Waterloo-based RIM, which has seen its share price plummet more than 60 per cent since July as investors expressed concern about the impact on handset sales of a faltering global economy. "Valuation has rarely been this attractive, the product portfolio has never been as compelling or diverse and finally, and most importantly, carrier support has never been as strong," Gus Papageorgiou, an analyst at Scotia Capital, stated in a recent note to clients.

He also cited the upcoming release of the BlackBerry Storm touch-screen device in the United States, Canada and elsewhere as a potential catalyst for sales.

"We believe the Storm has the ability to propel the company directly into the heart of the consumer market, and that an increased presence there will more than offset a slowdown in its traditional enterprise market."

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Japan sank into recession in the third quarter, even before it felt the full force of the financial crisis, and world leaders at a weekend summit gave investors little hope they could rescue the global economy.

With the euro zone also in recession, the U.S. economy shrinking in the third quarter and China slowing sharply, markets shrugged off pledges to stimulate growth from leaders of the Group of 20 nations.

The yen and U.S. dollar pressed higher as investors pulled cash away from emerging markets and riskier assets. Oil fell more than $1 to below $56 a barrel and stock markets slid in early Asian trading.

While the Japanese economy was weakening, the pace of the decline was unexpected. Analysts polled by Reuters had predicted the economy would expand 0.1 percent. Instead it shrank by 0.1 percent as exports crumbled faster than they had thought.

The third-quarter data did not capture the full impact of the crisis that exploded in September, destroying Wall Street banks and threatening to rupture the global financial system.

Japan had largely escaped the first shockwaves of the crisis triggered last year by U.S. mortgage defaults. It felt the first major tremors in October when the Tokyo stock market crashed forcing banks to try to replenish capital and the yen surged, sideswiping exporters facing their toughest markets in decades.

“I think that it is possible for the negative growth to continue in the second half of the fiscal year,” said Tatsushi Shikano, a senior economist at Tokyo’s Mitsubishi UFJ Securities free credit score.

“The economy abroad, especially the United States, is slowing down and it is likely that exports will remain weak,” he said.

FISCAL AND MONETARY STEPS

The euro zone is in its first recession and the U.S. economy only avoided one earlier this year because of a stimulus plan. Most economists say the United States is probably already in recession, although official data confirming that will not come until January.

Leaders of the world’s 20 largest economies, meeting in Washington over the weekend to address the worst financial crisis in 80 years, agreed on a host of fiscal and monetary steps to rescue the global economy.

But they left it to individual governments to tailor their response to their own circumstances and troubled industries.

“Taken as a whole, it does not appear that the outcome of the summit will be sufficient to stem the financial crisis. This was a high bar from the start,” said Marc Chandler, global head of currency strategy with Brown Brothers Harriman in New York.

MADE THINGS WORSE

The post-meeting statement from the group of major industrialized and developing countries contained a laundry list of reform pledges aimed at soothing volatile markets and calming consumers’ worries. 

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The Federal Reserve and other U.S. regulators told banks to maintain lending to “creditworthy'' borrowers, and warned against dividend levels that would cut funds available for loans, causing a deeper economic slump.

Supervisors “will take action when dividend policies are found to be inconsistent with sound capital and lending policies,'' the Fed, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and Office of Thrift Supervision said in a statement. Dividends shouldn't be at levels that would hurt the ability “to meet the needs of creditworthy borrowers.''

The message to lenders follows increasing pressure from Congress, where legislators have expressed concern that banks won't use the capital injections from the government's $700 billion rescue program toward reviving credit. Senate Banking Committee Chairman Christopher Dodd tomorrow holds a hearing with four of the biggest U.S. banks on their use of bailout funds.

Federal regulators also warned banks on executive- compensation levels and on helping homeowners keep their properties by modifying mortgages. Democratic lawmakers have pushed on both counts in recent weeks.

A record share of U.S. banks made it harder for companies to borrow, the Fed's latest quarterly survey of senior loan officers showed last month. About 85 percent of domestic banks surveyed tightened lending standards on commercial and industrial loans to large and mid-size firms, the most since the survey began in its current format in 1991.

`Appropriate Lending'

Regulators will encourage banks to “practice economically viable and appropriate lending activities'' to avoid deepening the economic downturn, the agencies said cash advance loans. “Regardless of their participation in particular programs, all banking organizations are expected to adhere to the principles in this statement.''

The agencies also urged lenders and servicers to adopt “systematic'' ways to modify troubled loans.

In addition, banks' executive compensation policies should “prevent short-term payments for transactions with long-term horizons,'' the agencies said.

Executives from JPMorgan Chase & Co., Goldman Sachs Group Inc., Bank of America Corp. and Wells Fargo & Co. are scheduled to testify in tomorrow's hearing.

All four banks are receiving billions of dollars of capital in the form of government stakes as part of the bailout program. Dodd, a Connecticut Democrat, said last month that “we need more than just begging'' to ensure that banks use the new funds to lend, rather than hoard the cash.

Senator Charles Schumer, a New York Democrat, wants firms to place limits on dividends and executive pay before getting capital under the financial-rescue program. House Financial Services Committee Chairman Barney Frank, a Massachusetts Democrat, has called for a moratorium on Wall Street bonuses.

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Citigroup Inc. is reportedly in talks to buy a regional bank that overlaps with its retail banking unit in the United States.

The Wall Steet Journal cited unnamed people familiar with the situation who said there could be an agreement by month's end but didn't name the target bank.

Citigroup (NYSE:C) has most of its branches in the Northeast, California and Texas. It is the fifth largest bank by deposit in Silicon Valley with 38 branches Faxless pay advances.

It lost out to Wells Fargo & Co. (NYSE:WFC) in bid to buy Wachovia Corp. last month that would have made it the third largest bank in the region.

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WASHINGTON – The number of out-of-work Americans continuing to draw unemployment benefits has surged to a 25-year high, while shoppers turned extra frugal, further proof of the damage from sinking economy, credit problems and financial stresses.

The Labor Department reported Thursday that the number of people continuing to draw unemployment benefits jumped by 122,000 to 3.84 million in late October. It was the highest level since late February 1983, when the country was struggling to recover from a long and painful recession.

New filings for jobless benefits last week dipped to 481,000, a still-elevated level that suggests companies are in a cost-cutting mode.

The work force was much smaller in February 1983, when the number of people continuing to claim benefits was 3.88 million.

At that time, about 87.2 million Americans were in the work force, compared to almost 134 million today. That's one reason the unemployment rate was 10.4 per cent in February 1983, compared to 6.1 per cent last month.

Still, the increase in people continuing to draw unemployment benefits is an indication that laid-off workers are having a harder time finding new jobs.

Democrats in Congress are pushing to include an extension of unemployment benefits in a new stimulus package, which could be taken up this month. Benefits typically last 26 weeks.

Congress approved a 13-week extension of benefits in June, and the department said about 773,000 additional people claimed benefits through that program for the week ending Oct. 18, the most recent data available. That extension is scheduled to end next June.

Americans hit by layoffs, shrinking nest eggs and other stresses are pulling back even more, sending sales at many big retailers down in what may have been the weakest October in decades. That further darkened the outlook for the holiday sales season.

Target Corp. and Costco were among the many retailers reporting sales declines last month. Wal-Mart Stores Inc., the world's largest retailer, however, logged a sales gain.

On Wall Street, stocks slumped. The Dow Jones industrials were down about 350 points in afternoon trading.

Hoping to prevent a deep recession, the Federal Reserve last week ratcheted down interest rates last week to 1 per cent and left the door open to further reductions.

The country's economic state has rapidly deteriorated in just a few months. The economy contracted at a 0.3 per cent pace in the July-September quarter, signalling the onset of a likely recession same day cash advances. It was the worst showing since the last recession, in 2001, and reflected a massive pull back by consumers.

With the economy sinking and consumers appetites flagging, employers have been slashing jobs. They are expected to cut around 200,000 jobs when the government releases the October employment report on Friday. The unemployment rate – now at 6.1 per cent – is expected to climb to 6.3 per cent in October.

As American consumers watch jobs disappear and their wealth shrink, they'll probably retrench even further.

That's why analysts predict the economy is still shrinking in the current October-December quarter and will continue to contract during the first quarter of next year. All that more than fulfills a classic definition of a recession: two straight quarters of contracting economic activity.

Yet another report out Thursday showed the efficiency of U.S. workers slowed sharply in the summer as overall production, or output, declined, reflecting the hit to consumers from housing, credit and financial troubles.

Productivity – the amount an employee produces for every hour on the job – grew at an annual pace of 1.1 per cent in the July-September quarter, down from a 3.6 per cent growth rate in the second quarter, the Labor Department reported.

With productivity growth slowing, labour costs picked up. Unit labour costs – a measure of how much companies pay workers for every unit of output they produce– increased at a 3.6 per cent pace in the third quarter, compared with a 0.1 per cent rate of decline in the prior period.

The 1.1 per cent productivity growth logged in the summer beat economists' expectations for a 0.8 per cent growth rate. The pickup in labour costs– while welcome to workers – was faster than the 2.8 per cent pace economists were forecasting.

Economists often look at labour compensation for clues about inflation. These days, however, the Federal Reserve and analysts are more concerned about the economy's feeble state. While the pick up in labour costs might raise some economists' eyebrows, the Fed is predicting inflation pressures will lessen as the economy loses traction.

The 1.1 per cent productivity gain was the smallest since the final quarter of last year, while the increase in labour costs was the biggest since that time.

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HOUSTON – Oil prices neared $60 (dollar figures U.S.) a barrel Thursday, their lowest point in about a year and a half, as a growing number of economic reports point to a long and painful recession.

The number of Americans continuing to draw unemployment benefits surged to a 25-year high, the Labor Department said Thursday, and the nation's retailers saw their sales plummet last month to the weakest October level since at least 1969.

When the economy slows, the demand for energy fades. One side effect: the price of gasoline has tumbled from summer highs, when a gallon cost more than $4. Experts say gasoline could cost half that by year's end.

Light, sweet crude for December delivery fell 7 per cent, or $4.53, to settle at $60.77 a barrel on the New York Mercantile Exchange. Prices tumbled as low as $60.16 at one point, a level last seen in March 2007.

Oil prices have now fallen nearly 60 per cent since peaking at $147.27 a barrel in mid-July. They surged above $70 Tuesday, but a crude sell-off began the following day when prices dipped 7.4 per cent.

Analyst and trader Stephen Schork said the sharp decline is fallout from a year-long bubble.

Some investors and lawmakers in Washington have blamed speculative traders for bidding up the price of oil.

"It's the old adage: markets fall faster than they rise. And this is exactly what we're seeing right now," Schork said. "We knew it was a bubble on the way up. People stopped acting rationally. High prices became the justification for high prices. Fundamentals be damned."

Also pressuring crude prices Thursday were interest rate cuts across Europe, where economic leaders were trying to spark growth.

Oil analyst Peter Beutel of Cameron Hanover said crude was falling because of a stronger dollar, renewed fears of recession and weaker equities markets.

"Oil prices … have been searching for a bottom for the last several days," a Cameron Hanover report said.

And despite a government report showing storage levels in the U.S. rose less than expected last week, prices for natural gas fell, too.

Meteorologist predictions of a cold winter have been pushing up natural gas prices recently.

In its weekly report, the Energy Department's Energy Information Administration said natural-gas inventories held in underground storage in the lower 48 states rose by 12 billion cubic feet to about 3.41 trillion cubic feet for the week ending Oct. 31.

Analysts had expected a boost of between 20 billion to 25 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

"The (EIA) report was kind of bullish actually and the market went the other way," said Phil Flynn, an analyst at Alaron Trading Corp. "It's just the overall malaise bad credit payday loans. Earnings today haven't been anything to write home about. We're readjusting commodities based on recessionary-like numbers.''

Wall Street slumped again Thursday, sending stocks lower for a second day after Cisco Systems Inc. reported crumbling demand. The Dow Jones industrial average fell 450 points.

The dollar strengthened after the European Central Bank cut its key rate by half a percentage point to 3.25 per cent Thursday, joining the Bank of England, Swiss and Czech central banks as they confront a looming recession.

The ECB announced the cut from 3.75 per cent shortly after the Bank of England lowered its key interest rate by a startling 1.5 percentage points to 3 per cent. The Bank of England's cut was more than the full percentage point that most analysts had predicted and the biggest cut in 27 years.

Commodities such as oil are used as a hedge against inflation and a weak dollar. When a central bank cuts interest rates, it tends to weaken that nation's currency, meaning the dollar typically trades higher against it.

When the dollar strengthens, it makes oil more expensive to buyers dealing in other currencies.

But the continuing parade of dim economic reports weighed on global markets and on the price of oil as well.

Retailers' October sales figures showed consumers pulling back spending sharply. A Labor Department report said the number of people continuing to draw unemployment benefits jumped by 122,000 to 3.84 million in late October. It was the highest level since late February 1983, when the country was struggling to recover from a long and painful recession.

Other economic indicators out of the U.S. this week suggest the world's largest economy may be heading for its worst recession in decades. A Commerce Department report Tuesday said factory orders fell 2.5 per cent in September from August, much worse than analysts had predicted.

On Monday, U.S. manufacturers reported poor figures for October, showing the worst reading in more than a quarter century.

Gasoline fell again overnight, dipping 2.5 cents to a national average of $2.34 for a gallon of regular unleaded, according to auto club AAA, the Oil Price Information Service and Wright Express. The average price has fallen nearly 33 per cent in the past month and, according to AAA, could be headed to $2 a gallon nationally by year's end.

In other Nymex trading, gasoline futures fell 8.8 cents to settle at $1.336 a gallon. Heating oil dropped 11 cents to settle at $1.942 a gallon while natural gas for December delivery fell 27 cents to settle at $6.979 per 1,000 cubic feet.

In London, December Brent crude fell $4.44 to settle at $57.43 on the ICE Futures exchange.

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OTTAWA–Just under 6.3 million taxfilers contributed to registered retirement savings plans in 2007, up 1.6 per cent from 2006.

Statistics Canada reports contributions rose 5.3 per cent to $34.1 billion.

The agency says the highest percentage increase in the number of RRSP investors was in Newfoundland and Labrador, up 5.3 per cent, while Quebec had the largest increase in number, at almost 25,700 contributors.

The largest increase in the value of contributions was in Saskatchewan, at 12.8 per cent.

Almost 88 per cent of taxfilers were eligible to contribute to an RRSP last tax year and of those 31 per cent actually made contributions.

The $34 bad credit pay day loans.1 billion in RRSP contributions in 2007 represented about six per cent of the total room available to eligible taxfilers.

The median contribution was $2,780.

The median is the point where half of the contributors contributed more than $2,780 and half less. The median was highest in the three territories, with Nunavut leading the way at $4,330 followed by the Northwest Territories at $3,600.

At $3,770, Calgary contributors had the highest median among cities, followed by Vancouver at $3,470 and Toronto at $3,300.

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Sugar cane stands at the intersection of food and fuel. It can end up in your morning coffee as table sugar, and at your local gas station in the form of ethanol.

In a bid to tap into growing demand for sugar and ethanol, Creve Coeur-based Monsanto will spend $290 million to buy a Brazilian company involved in breeding sugar cane.

Monsanto, one of the world’s biggest agricultural biotech companies, will acquire Aly Participacoes Ltda., which owns two key subsidiaries: CanaVialis, the world’s largest private sugar cane breeding company, and Alellyx, an applied genomics company focused on developing biotech traits for sugar cane. Monsanto wants to broaden its offerings of crops with biotech traits. Now, the company primarily focuses on corn, soybeans and cotton. Sugar could be a fourth leg of the stool.

"We consider the deal important as it signals Monsanto’s long-term commitment to sugar as a new, strategic growth platform," wrote Kevin McCarthy, a Banc of America Securities analyst.

Compared to Monsanto’s $2 billion in profits and $2.8 billion in cash flow from operations, the Brazil deal is modest. But it does show patience: The deal isn’t expected to add to earnings until the middle of the next decade, when Monsanto hopes to bring sugar cane traits to market.

Monsanto called sugar cane a "significant opportunity" to supplement the company’s involvement with corn as an ethanol feedstock. Like corn, sugar cane can be processed into fuel-grade ethanol, one of the leading forms of alternative energy.

Monsanto moved into Brazil’s sugar industry last year, when it signed an agreement with CanaVialis and Alellyx to develop ways to help Brazilian farmers protect their sugar cane from Monsanto’s Roundup pesticide.

Monsanto’s goal is to increase farmers’ yields when they grow sugar cane, while reducing the amount of resources needed to cultivate the crop and protecting the plants from herbicide and drought. Monsanto has a leg up: Much of the work to give sugar cane desired traits is already being done in corn programs.

Monsanto had earlier tipped off investors that it was looking for opportunities to use its vast cash supplies for international acquisitions. "Cash on hand gives you the ability to act quickly," Chief Executive Hugh Grant said recently.

Demand for raw sugar and biofuels are rising at a faster pace than sugar cane’s current production levels, Monsanto said advance cash loan month paid. It cited statistics showing that the world will consume 3.9 million tons more sugar than it will produce in 2008-2009, and that sugar consumption will outrun production over the next decade.

Both food and fuel are expected to play a role in sugar’s growing importance. More food-grade sugar is needed in China and India. Plus, global ethanol production is projected to reach 125 billion liters in 2017, twice the quantity produced last year, according to an agricultural outlook published by the Organisation for Economic Cooperation and Development and the U.N.’s Food and Agriculture Organization.

Sugar cane is key to meeting those demands and is a "significant-enough crop to warrant investment," said Carl Casale, executive vice president of global strategy and operations.

Grown in tropical climates, sugar cane is the world’s major source of sugar. The tall grass is planted on more than 50 million acres, more than 17 million of them in Brazil, according to Monsanto. Brazil is the world’s largest producer of sugar cane, the largest exporter of finished sugar, and the world’s second-largest producer of ethanol after the United States. It supplies one-third of the world’s ethanol.

Monsanto’s competitors are well aware of Brazil’s potential. Decatur, Ill.-based Archer Daniels Midland, the big ethanol processor, operates oilseed crushing plants, oilseed refineries and biodiesel plants in Brazil. Brazil also is the biggest market for the fertilizer division of Bunge Ltd. of White Plains, N.Y. Bunge entered the Brazilian fertilizer market in 1938; it mines phosphates and sells blended fertilizer there.

Casale said Monsanto is excited about Brazil, where sugar cane production is expected to rise 75 percent by 2017. There also are untapped acres that could be devoted to Monsanto’s soybean seeds. In addition, Monsanto likes the country’s improving support for intellectual property — crucial if the company is to make good on biotech investments.

"As the world needs more crops," Casale said, "I think Brazil will be a target."

jmcwilliams@post-dispatch.com

314-340-8372

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Mascoutah — As the sun rose early Thursday over MidAmerica St. Louis Airport, a rousing version of Reville blared over the public-address system.

The airport begins each day with a rendition of Reville, but on this day, the wake-up call added a little fanfare to a landing that was more than just a landing.

With an audience of about 60 people applauding, a DC-10 cargo plane carrying roughly 15 tons of flowers landed here from Bogot