Business and Finance

CRESTWOOD – The Macy’s store in Crestwood has gone dark.

Macy’s completed its liquidation sale and closed the store March 15, a spokeswoman for the Crestwood Court mall said today. The closure came just over two months after Macy’s announced plans to close the close the Crestwood store and 10 other underperforming stores around the country.

The closures are costing about 960 Macy’s workers their jobs. About 175 job cuts resulted from the store closing in Crestwood.

In addition, the city of Crestwood is taking a financial hit from the loss of sales tax revenue the Macy’s store provided payday loan no faxing.

Work is still under way to convert much of the former Crestwood Plaza into space for arts groups. A spokeswoman for the mall’s manager says arts groups should be using 65 store spaces by the middle of April. Whether the 150,000-square-foot Macy’s store might become part of the arts conversion is yet to be decided, the spokeswoman said.

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Malaysia’s economy may suffer a “significant” contraction in the first six months of this year before improving in the second half as other nations recover from the financial crisis, Central Bank Governor Zeti Akhtar Aziz said.

Southeast Asia’s third-largest economy may shrink 1 percent in 2009 or expand that amount at best, Bank Negara Malaysia said in its annual report in Kuala Lumpur today, reiterating a March 10 government forecast. Gross exports may plunge 25 percent as demand for electronics and palm oil falls, the central bank said.

“The Malaysian economy will experience the full impact of the global recession in 2009,” Zeti said in the report. The growth forecast “is dependent on stability being restored in the crisis-affected economies in the second half.”

Malaysia’s biggest export markets in the U.S., Japan, Singapore and Europe have entered recessions in a deepening slump in the global economy, forecast by the World Bank to shrink this year for the first time since World War II. Zeti said today the government and the central bank, which has already slashed interest rates to record lows, is able to take further action.

Asian governments have unveiled more than $700 billion in stimulus plans to counter tumbling exports. Zeti said she has reactivated a corporate debt-restructuring committee, used a decade ago in the Asian financial crisis, that’s ready to help companies weather the crisis.

Timely Spending

A “timely” implementation of 67 billion ringgit ($18 billion) of spending plans by Malaysia’s government is needed to achieve the higher end of the 2009 growth forecast, the central bank said. An annual contraction in the $181 billion economy this year would be the first since 1998.

“The financial and economic situations globally remain fluid,” said Suhaimi Ilias, chief economist at Maybank Investment Bank Bhd. “It remains to be seen whether global fiscal stimuli can lift the economy later this year.”

There are “significant uncertainties” to the global outlook, including the possibility the turmoil in financial markets may last beyond 2009, the central bank said.

“There is, at this stage, no visible sign that the global financial crisis has abated,” Zeti said payday loans in one hour. “Delays in addressing the financial sector problems in several of the advanced economies have increased the prospect of a more protracted and deeper economic downturn.”

Further Measures

Bank Negara Malaysia lowered its benchmark interest rate for a third straight meeting last month to 2 percent and reduced the amount of money lenders need to set aside as reserves.

While there’s room for further steps, including monetary measures, Zeti said the central bank is now focused on improving the flow of credit.

“Our focus is on access to financing,” she said. The cost of borrowing is “very favorable” and “very accommodative.”

Easing inflation has allowed the central bank to cut interest rates to support domestic demand. Consumer-price gains will slow this year, averaging 1.5 percent to 2 percent compared with 5.4 percent in 2008 as global commodity prices and local fuel and utility rates fall, the central bank estimated.

“With the risk of inflation abating considerably, the balance of risk has shifted from inflation to growth,” the central bank said. There’s little chance of deflation, Zeti said.

Manufacturing, Exports

Malaysia’s manufacturing industry is forecast to contract 8 percent this year after growing 1.3 percent in 2008, the central bank said, amid declining overseas demand for electronics made by semiconductor assemblers including Malaysian Pacific Industries Bhd. Agriculture and mining may also shrink, while services growth may slow to 4.5 percent.

The decline in exports in February was probably less than the 28 percent drop in January, Zeti said.

Private-sector wage growth may slow to 2.7 percent from 5.9 percent, the central bank said. About 24 percent of companies surveyed by Bank Negara plan to cut jobs in 2009, the bank said.

“The manufacturing sector and to a lesser extent, the mining sector, will bear the brunt of the global recession,” said Azrul Azwar Ahmad Tajudin, an economist at Bank Islam Malaysia Bhd. in Kuala Lumpur.

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Americans are in a collective state of financial depression as many admit they could cover their bills for only two months at most if they found themselves suddenly jobless, a nightmare more and more worry may come true.

The results of a bevy of surveys found a growing number of consumers are only a couple of paychecks away from a household collapse even as many scramble to shore up savings. Rainy-day funds appear to be a distant memory as households burn cash to cover food and energy bills as well as mortgage and car payments.

A large number of households say that even one missed paycheck would spell financial ruin. And even in households that remain well off, the surveys show a festering fear that financial problems are lurking.

"This is flashing so bright red," said Paul Ballew, senior vice president of Nationwide Insurance Co. "Roughly 60 percent of the population was ill-prepared (financially) before the meltdown."
A MetLife study released last week found that 50 percent of Americans said they have only a one-month cushion — roughly two paychecks — or less before they would be unable to fully meet their financial obligations if they were to lose their jobs. More disturbing is that 28 percent said they could not make ends meet for longer than two weeks without their jobs.

And it’s not just low-income earners who would find themselves financially challenged. Twenty-nine percent of those making $100,000 or more a year said they would have trouble paying the bills after more than a month of unemployment.

Meanwhile, more than four in 10 respondents told pollsters in a recent Pew Research Center study that job-related issues were the nation’s most important economic problem.

"Since October, mentions of other major economic issues have declined, as the public is increasingly focused on the job situation," according to the Pew study.

Since July, the study noted, there has been a striking spike in the numbers of families making $100,000 or more who said it was difficult to find local jobs — 73 percent compared with 40 percent eight months ago.

Not surprisingly, spending and savings patterns have shifted dramatically and across nearly all income levels payday loans. The Pew Center study found that, on average, 86 percent of consumers at all income levels have cut back spending, though the changes differ by wage level.

For example, lower-income Americans are likely to have cut back on vacations or put off big-ticket expenses, such as home improvements or purchasing a car.

The same is true even in eating behaviors, according to a recent Janney Montgomery Scott report. Consumers across the income spectrum are seeking more values, with lower-income households most likely to move to private-label brands and use coupons, while wealthier consumers were deciding to eat at home and not out, analyst Jonathan Feeney wrote in the report.

Most families, however, are paring spending because they’re worried about the future rather than the present, according to a Discover U.S. Spending Monitor monthly study. While only 30 percent said they’re cutting back on dining out, vacations, cars or home goods because their financial situation has become worse, 56 percent said they are making those changes because they’re anxious that their financial health will weaken considerably. That sentiment has held since December, the study found.

"Consumers don’t seem to be making any changes month to month," said Matt Towson, a spokesman for Discover. "The numbers indicate that people are being frugal and still planning to cut spending."

America’s Research Group found that nearly 57 percent of the consumers it polled said they would spend less this year while virtually no one plans to spend more.

But this is not just a one-year thing, according to consumers surveyed by BIGresearch. Nearly 91 percent said they see this crisis bearing down on their spending decisions — in effect, their lifestyles — over the next five years.

"American consumers are hunkered down, bracing for a depression," said Britt Beemer, chief executive of America’s Research Group.

"The dramatic drops in shopping levels have no match in our database in the last 30 years."
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DETROIT — A public tiff between Italian automaker Fiat SpA and Chrysler LLC apparently ended Friday when Chrysler rescinded a statement on its website that Fiat would be responsible for part of Chrysler’s debt if the two companies join forces.

Chrysler, in a Web video on Thursday explaining why an alliance for the two companies would be good for Chrysler and the country, said Fiat would be responsible for 35 percent of what Chrysler owed to the U.S. government.

But Fiat on Friday denied that it would be responsible for any of Chrysler’s debt.

The two companies are talking about an alliance in which Fiat would take a 35 percent stake in Chrysler in exchange for Fiat’s small-car technology.

Chrysler, in a statement issued Friday, reversed the claim and said Fiat would become an equity holder.

"To clarify, this does not mean Fiat would assume responsibility for any of Chrysler LLC’s debt," the statement said.

Fiat Group said Friday that it "intends to make absolutely clear that the proposed alliance will not entail the assumption of any current or future indebtedness to Chrysler fast payday loans."

The Chrysler video featured CEO Robert Nardelli saying that the company can be viable on its own, but a deal with Fiat would enhance that viability.

Fiat is discussing trading its small-car and small-engine technology for a 35 percent stake in Chrysler in a noncash deal. The deal would help Chrysler bring badly needed small cars to its showrooms while helping Fiat re-enter the American market with the Alfa Romeo brand and the update of the iconic Fiat 500.

In the video, Chrysler said an alliance with Fiat would help it leapfrog five or six years ahead in development of fuel-efficient and clean-air technology.

Any deal with Fiat is contingent upon the company gaining U.S. government approval of its viability plan and the release of additional government loan money to Chrysler.
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Standard & Poor's has given an A- long-term rating, and stable outlook, to Miami-Dade County’s series 2009A and 2009B aviation revenue bonds, issued for Miami International Airport.

The rating agency also affirmed its A- long-term rating, and underlying rating with a stable outlook, on the county's $4.5 billion of parity debt, also issued for the airport.

The agency said its rating “reflects our view of Miami International's status as a large connecting hub with a niche market dominance as a gateway to Latin America, balanced against an increasing debt burden and rising airline cost structure.”

In September, the U.S. Department of Transportation’s Bureau of Transportation Statistics named MIA the busiest U.S. airport for international travelers.

S&P analyst Laura Macdonald said the stable outlook is based on the expectation that American Airlines will continue to operate a major hub at MIA.

In addition, she noted that the Miami-Dade County Aviation Department needs to continue to work closely with the airlines in reviewing capital improvement projects.

The county took over the massive expansion of the airport's North Terminal from American Airlines in 2005 after questions were raised about construction oversight and cost overruns online cash advance.

Earlier this month, a groundbreaking was held for the MIA Mover, a $342 million light-rail people-mover system that, when completed, with connect the airport with the Miami Intermodal Center.

"Prudent implementation of the CIP to maintain current estimates of additional indebtedness will be an important rating factor," Macdonald wrote.

Competition for passengers from Fort Lauderdale-Hollywood International Airport and international passengers from other U.S. airports on routes to Latin America is a concern, according to the report.

The report noted that “net airport revenues secure the series 2009A and 2009B aviation revenue bonds, which the county is issuing for the purpose of refunding all of its outstanding commercial paper and help finance a portion of the CIP. After this issuance, the airport will have approximately $5.1 billion in total debt outstanding.”

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The pace of homebuilding stepped up in February, an unusual bit of good news in the devastated housing market. The number of housing permits issued and homes starting construction both rose at an annualized rate of 547,000 and 583,000, respectively. However, they were still off nearly 50% compared with February a year ago.

Meanwhile, the inventory of existing homes for sale is at a 10-month supply, and sales of both new and existing homes are at their lowest levels in years. So why are homes still being built at all?

"There’s a minimum level of building activity that goes on even in recessions," said David Crowe, chief economist for the National Association of Homebuilders (NAHB). "People are building their own homes or acting as general contractors and hiring our members to build them. That’s in the range of 200,000 to 300,000 homes a year."

One city’s story

The housing bust has hit hard in Tampa, Fla.

According to Zillow.com, the online real estate Web site, home prices in the city have fallen more than 34% from the peak they reached in early 2006. More than a quarter of all homes are underwater, with their owners owing more on their mortgages than their homes are worth. And foreclosures in the area more than doubled in 2008, climbing to one for every 25 households.

What little construction remains in Tampa is mostly of homes on single lots being built to order for their owners, according to John Barrios, manager of construction services for the city. "Construction of high-end, custom homes is still going well," he said. "But we’re not seeing green-field, tract-home development."

In the last three months of 2008, the city had 932 housing starts - 33% fewer than the last quarter of 2007

Residential construction is split evenly between single family homes and commercial developments, according to Cynthia Miller, the City of Tampa’s director of housing and building development. Many commercial developers have switched strategies over the past couple of years, though.

"We had a number of condo developments completed over the past 12 months that the builders have made into rentals instead," she said.

That’s a viable strategy for condo developers in down markets; the units can easily be switched to rentals, providing some income for the builders while they bide their time until prices recover.

No recovery near

Don’t put too much stock in the latest housing start numbers, advises Michael Larson, a real estate analyst with Weiss Research. They don’t mean a place like Tampa is about to see a glut of new homes rising out of earth.

In fact, the building might have been spurred into action recently because the costs of building new homes have dropped - not necessarily because there is newfound demand fast payday loan. The price of building materials is down, mortgage rates remain very low and contractors are sharpening their pencils to win jobs. Bargains abound.

Framing lumber, for example - the kind that is used to build floors, walls and ceilings - is about half the price it was three years ago. Asphalt, concrete, metals and most other building materials are either down or flat. All told, falling construction prices have whittled more than 10% of the cost of building a new home since the beginning of 2007, according to the Census Bureau.

Meanwhile, interest rates for 30-year, fixed-rate loans are have been in the low-to-mid-5% range for the past few months. They stand at 5.11% this week, according to Bankrate.com, about a percentage point below a year ago. That lowers the monthly mortgage payment on a $200,000 loan by about $125, an encouragement for potential homeowners.

In addition, a good portion of February’s national increase in building permits and housing starts was tied to multi-unit housing, which are very volatile. Just a few large projects getting launched can skew statistics upward.

Many of those multi-unit starts could have been long-planned projects that had been held up because of frozen credit markets. Those have eased a bit lately, according to Larson, enabling some developers to go forward. That’s especially true for more expensive buildings. The high end has held up comparatively well in most places, and there’s still demand for luxury housing.

Development of all varieties - especially big, single-family home projects - remains very slow, causing Larson to remain unenthusiastic about the near future. "Demand for new homes remains downright anemic," he said. "Sales dropped to an annual rate of just 309,000 in January, the lowest level in the 46 years the government has been keeping track."

At the same time, however, there were only 342,000 new homes on the market at the end of January. That is the lowest total since July 2003. In normal circumstances, so few homes would create a seller’s market, but at the current sales rate there is enough supply to meet demand for 13.3 months.

Nonetheless, the NAHB’s Crowe takes heart in the numbers. "There are some signs that we’re bottoming," he said. "I’m not ready to say we’re there. We’re still at an awful level, but at least we didn’t dip any further." 

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Canwest Global Communications Corp. is informally marketing its majority stake in Australia’s Ten television network to local investors, according to a report in an Australian newspaper.

The Australian Financial Review says Canwest has started the process with hopes of selling its 56.6 per cent stake in Ten to five or six investors with a goal of raising about $390 million.

Named on the list as a potential buyer was the Commonwealth Bank of Australia Ltd.

The report said Birketu, the network’s second-largest shareholder, has not been approached.

The report also said Canwest has asked Australia’s Securities and Investments Commission to be exempt from providing trading updates as part of the sales process free credit score.

Canwest spokesperson John Douglas declined comment on what he called speculation.

The Winnipeg-based company has considered selling Ten in the past and has recently explored the possibility of selling additional shares, but backed off when offers were too low.

Canwest, which has put its five E! television channels on the block, is trying to sell assets in an effort to pay down its $3.7 billion debt.

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The Bank of Japan is considering buying subordinated debt issued by banks, a move designed to spur lending by helping the nation’s financial institutions meet capital requirements, Nikkei English News said, citing unidentified central bank officials.

The purchases may help the banks offset losses caused by writedowns on shareholdings and bolster their capital, the report said. The details of the plan may be decided within the month, the Nikkei said.

The bank’s policy board will start a two-day board meeting tomorrow and announce its decisions by early afternoon the following day. Policy makers have made no decisions on whether to purchase subordinated debt, said Hitoshi Iwabuchi, a central bank press officer.

Japanese banks have traditionally had large equity holdings, making them vulnerable to the 38 percent drop in the Nikkei 225 Stock Average over the past year. That has made it more difficult for them to meet capital-adequacy ratios.

The plan to buy subordinated debt is being considered after government and central bank efforts to help maintain capital ratios failed to work, the Nikkei reported. Subordinated debt provides investors with higher yields than other bonds because they are given less priority in the case of a bankruptcy.

Boosting Capital

The government in December created a 12 trillion yen ($122 billion) program through which it could buy preferred stakes in banks in order to boost capital after stock prices plunged. Only three regional banks have applied for the funds. Lenders are reluctant to participate because of the perception that taking government money would damage credit ratings, according to Credit Suisse Group AG payday loans guaranteed no fax.

Bank of Japan efforts to shore up balance sheets have also come up short. The central bank on Feb. 23 said it would purchase up to 1 trillion yen ($10.2 billion) in stocks held by lenders. As of March 12, the central bank had bought only 112 million yen in those equities, about 0.01 percent of its target.

The central bank may also decide to increase purchases of long-term government bonds at its policy board meeting this week, the Nikkei reported. The central bank currently buys 1.4 trillion yen a month in government bonds from lenders as a means of injecting cash into the economy.

The Bank of Japan started buying commercial paper and corporate bonds this year. In December it began accepting lower- grade securities as collateral for loans to banks.

There are signs some of the bank’s programs have helped ease credit conditions. The spread on three-month commercial paper issued by companies rated A1 against government financing bills of the same maturity was unchanged at 29 basis points today from 141 before the bank’s Dec. 19 announcement that it would buy the debt.

The spread is still higher than the 12.5 basis points in September before the bankruptcy of Lehman Brothers Holdings Inc. In the U.S. a comparable spread is 152.25 basis points.

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Mortgage rates slipped last week, according to a weekly survey released Thursday.

The average 30-year fixed mortgage fell to 5.37% for the week ended March 11, according to Bankrate.com. Rates were little changed from four weeks ago, when they averaged 5.34%.

The average jumbo 30-year fixed rate rose to 6.99% from 6.77% in the prior week.

The average 15-year fixed rate mortgage slipped to 4.88% from 4.94% a week earlier.

Adjustable-rate mortgages were also mixed, with the 1-year ARM rising to 5.58% from 5.43%; the 5/1 adjustable-rate mortgage decreasing to 5.34% from 5.39%.

"Downward pressure on rates is certainly welcome news, but there’s no clear direction at the moment that we can discern," according to Keith Gumbinger, vice president of HSHAssociates.com, an online publisher of consumer loan information.

A year ago, the average 30-year fixed mortgage rate was 6.39%, meaning a $200,000 loan would have carried a monthly payment of $1,249.70, according to Bankrate.com. With the average rate now at 5.37%, the monthly payment for the same size loan would be $1,119.32, a savings of $130.38 per month.

The lack of private investment in the mortgage market has kept rates from climbing back toward those year-ago rates, Gumbinger said. Most of the mortgage financing is coming from government-backed institutions such as Fannie Mae (FNM, Fortune 500), Freddie Mac (FRE, Fortune 500) and the Federal Housing Administration.

"There are very few investors interested in investing in mortgage-backed securities," said Gumbinger.

Low mortgage rates spurred an 11 online payday advance.3% growth in applications last week, according to a report from the Mortgage Bankers Association. Most of them were from existing homeowners seeking refinancing.

However, many of the requirements that borrowers need to meet to obtain a home loan - such as a large down payment, good credit or home equity (for refinancing) - are increasingly difficult to meet. "A lot of borrowers find themselves unable to get over the hurdles to get today’s lower rates," Gumbinger said.

An increasing number of existing homeowners have found themselves owing more on their homes than what they are worth - a problem that led to an unexpected jump in foreclosures last month, according to a report released Thursday.

Congress is currently debating a bill that would allow bankruptcy judges to reduce mortgage debt for bankrupt homeowners as a last resort for preventing foreclosure.

Supporters say the bill will significantly reduce the foreclosure rate, but opponents say that mortgage modification could further pull investment out of the mortgage market.

Allowing judges to modify loans would add a new layer of risk for mortgage investors, which would drive up costs and thus mortgage rates, according to Gumbinger. "This is not a well-trodden path, nor is it well understood," he said.

Bankrate.com’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets. 

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WASHINGTON–With layoffs spreading, the number of initial claims for jobless benefits rose last week, while the total number of people continuing to receive benefits set a record high, the government said Thursday.

The Labour Department reported that first-time requests for unemployment insurance rose to 654,000 from the previous week's upwardly revised figure of 645,000, above analysts' expectations.

The number of people receiving benefits for more than a week increased by 193,000 to 5.3 million, the most on records dating back to 1967. That's the sixth time in the past seven weeks that the jobless claims rolls have set a record high.

The labor market has been hammered as employers, squeezed by cutbacks in consumer and business spending, cut jobs at a rapid pace. Some economists say the unemployment rate could reach 10 per cent by the end of this year, from its current level of 8.1 per cent.

The four-week average of new claims, which smooths out fluctuations, rose to 650,000, the highest in more than 26 years, though the work force has grown by about half since then.

Separately, the Commerce Department said retail sales fell by 0.1 per cent in February, though that drop was much less than the 0.5 per cent analysts expected. The government also revised January's performance to show a 1.8 per cent rise, the biggest increase in three years and stronger than the 1 percent gain that was originally reported.

Still, analysts don't expect any sustained rebound in consumer spending soon, given the severity of the recession quick cash. Consumers have sharply retrenched in the face of falling home and stock prices and soaring unemployment.

As a proportion of the work force, the tally of Americans receiving unemployment benefits is the highest since June 1983, the department said, when the economy was recovering from a steep recession.

The unemployment insurance rolls have risen sharply from a year ago, when only 2.8 million people were receiving benefits.

An additional 1.4 million people were receiving benefits under an extended unemployment compensation program approved by Congress last year, the department said. That tally was as of Feb. 21, the latest data available.

The rise in continuing claims is a sign that many newly laid-off workers are having difficulty finding jobs.

More job losses were announced this week. Computer maker Dell Inc. said Wednesday that it is laying off workers around the world but would not say where or how many. AMR Corp.'s American Airlines also said Wednesday it will lay off 323 flight attendants on April 1.

National Semiconductor Corp., meanwhile, said it will lay off 1,725 employees, more than one-quarter of its work force, after third-quarter profits fell 71 per cent.

Industrial conglomerate United Technologies Corp., which makes Otis elevators and Sikorsky helicopters, said Tuesday it will lay off 11,600 workers, or 5 per cent of its work force.

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