Business and Finance

Jamaican police are investigating a bizarre allegation that a fictitious Facebook profile was created to defame the former head of the Bank of Nova Scotia’s Jamaican operations.

Toronto-based Scotiabank confirmed yesterday it is working with police after the Jamaica Observer newspaper reported that documents were taken from the bank’s information technology centre in Jamaica as part of the probe.

"We are going to cooperate with the police," said spokesperson Frank Switzer, adding "there has yet to be any confirmation that anything involving a fake Facebook site" came from within the bank. A police superintendent in charge of the case declined to comment yesterday.

The police investigation coincides with an ugly legal quarrel involving the bank and William (Bill) Clarke, the 59-year-old former chief executive officer of Scotiabank Jamaica. Clarke, who left the bank in 2008 after 40 years, is fighting in the courts for a plusher retirement package. The Court of Appeal in Jamaica is expected to issue a key ruling in the case in the coming months.

Police began their investigation after Clarke complained in July that someone purporting to be him had created a fake Facebook page in his name.

Clarke claims he has never been on Facebook and that friends alerted him to the fictitious profile. He maintains that the now-discontinued profile contained "all kinds of defamatory statements." As a result, some of his acquaintances were duped into responding to those comments.

"I mean, it is defamatory in one respect and it is identity theft in another respect," Clarke said in a telephone interview from Jamaica.

After being contacted by police, Facebook quickly shut down the page. According to Clarke, the social networking site balked at a request from his lawyers to disclose the IP addresses of the computers used to create the profile free credit report without a credit card.

Clarke eventually won a U.S. court order requiring Facebook to disclose the information. In due course, Jamaican police determined the IP addresses in question came from a local telecom provider.

"There were two IP addresses – one for the Bank of Nova Scotia, the IT centre. And one for a business premise, which is directly across the street from the IT centre of Scotiabank," Clarke said. None of those allegations has been proven in court.

"I’ve asked the police to vigorously prosecute the case and I’m also going to take civil legal action in the courts," Clarke said, noting the perpetrators would face civil charges of defamation of character and libel.

While he stopped short of making direct accusations, Clarke alleged that the Facebook incident is related to his separate legal dispute with the bank. "I believe that it is all a contrived and conducted scheme, without doubt," he said.

The Court of Appeal is expected to issue a key judgment regarding Clarke’s battle for a fatter retirement package later this year. Clarke – who is fighting to hang on to a four-bedroom house and two luxury cars provided to him by the bank – is pushing for arbitration.

Clarke alleges he was pushed out of the bank last year. He concedes that he eventually agreed to retire on the understanding that an arbitrator would determine the value of his retirement package if lawyers were unable to negotiate an amicable settlement.

Published reports peg the value of Clarke’s retirement package at $1 million, but Clarke said the actual price tag was "nebulous" and "totally unacceptable." He says he took legal action after the bank allegedly refused to pursue arbitration.

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NEW YORK–Best Buy Co., the largest U.S. electronics retailer, said Tuesday second-quarter results fell below expectations as sales at established stores fell.

Still, the retailer raised its guidance for the year based on stabilizing customer traffic.

Profit for the three months ended Aug. 29 fell 22 per cent to $158 million, or 37 cents per share, from $202 million, or 48 cents per share last year, hurt by higher expenses and the stronger dollar. Analysts polled by Thomson Reuters, on average, predicted a profit of 42 cents per share.

Revenue rose 12 per cent to $11 billion, boosted by gains from adding Best Buy Europe's revenue and the addition of 170 net new stores over the past 12 months. That was offset by a 3.9 per cent decline of sales at established stores and the drag of the stronger dollar, which hurts international revenue because sales translate back into fewer dollars.

Analysts had expected revenue of $10.79 billion.

Domestically, traffic rose "slightly," the Richfield, Minn.-based company said, but that was offset by a slight decrease in average ticket.

Top sellers were notebook computers, phones and flat-panel TVs, offset by weakness in gaming, digital cameras, music and movies.

The company has gained market share because of the closing of Circuit City stores but has been hurt by the cutback in consumer spending amid the recession. Best Buy said it added 2.7 percentage points of market share in the quarter.

The company said during the quarter profit was pressured by new initiatives to drive traffic into the stores "intended to capitalize on competitive opportunities." Its gross profit rate was also hurt by the launch of the new iPhone.

The company said that due to revenue growth that "modestly'' exceeded expectations for the first half of the year, along with indications traffic is stabilizing, it is raising its guidance for the year. It now expects earnings of $2.70 to $3 per share for the year, up from between $2.50 and $2.90. Analysts predict $2.87.

It expects revenue of $48 billion to $49 billion, from previous guidance of $46.5 billion to $48.5 billion, while analysts expect revenue of $47.8 billion. It predicts sales at established stores will be flat to down 2 per cent.

Best Buy said the guidance is balanced by the view that “overall consumer spending will remain under pressure given the expected continued softness in the economy and by the fact that most of our earnings are still ahead of us in the holiday selling season.''

Best Buy shares fell 22 cents to $40.19 in premarket trading.

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Facing dwindling sales, Chrysler is discovering that it is easier to reinvent a balance sheet than a line-up of cars and trucks.

Now the clock is ticking, analysts say, and the coming months will be crucial to the bid by Italy’s Fiat SpA to reinvent auto operations starved of investment in the run-up to Chrysler’s bankruptcy.

After a quick makeover in Chapter 11 and some $14 billion in U.S. government funding, Chrysler has been given a clean balance sheet and much-needed small car technology from its new partner.

But its sales remain under pressure and analysts caution that fixing Chrysler’s product difficulties will not be fast, easy or cheap.

“The ultimate heartbeat of a car company is the ability to bring out vehicles that will sell,” said Van Conway, a restructuring expert at Conway MacKenzie. “There is a large question mark for Chrysler out there.”

Chrysler’s U.S. sales fell 15 percent in August, when overall industry sales rose 5 percent. Equally troubling was that its market share fell to 7.4 percent in August — from 11 percent in 2008.

After freezing product development to conserve cash under former owner Cerberus Capital Management CBS.UL, Chrysler faces a dearth of new model launches, analysts say.

The result: Chrysler lacks small and fuel-efficient cars. Its truck-heavy lineup was called “woefully uncompetitive” by Consumer Reports in its latest issue.

With an average fuel economy of 28 miles per gallon for its fleet, Chrysler has the least fuel-efficient lineup among major automakers. General Motors’ GM.UL average is 31 mpg, Toyota Motor Corp 36 mpg, Honda Motor Co 37 mpg, according to U.S. government data.

Erich Merkle, an analyst at Autoconomy.com, said he expects Chrysler’s market share could drop as low as 4 percent by 2011. Merkle and other analysts said Chrysler will face a tough year in 2010 because it will feel pressure to drop unprofitable and slower-selling models like the Sebring.

At the same time, small cars from Fiat, including the 500, are not expected to arrive until early 2011.

“Fiat may have the products and powertrains that will add to Chrysler’s ability to do business. But 18 months is a lifetime in this industry,” said Gary Dilts, senior vice president of forecasting at J.D.Power & Associates.

“They don’t have the option to wait for new products. Timing is the key to its survival,” said Dilts, who headed Chrysler’s U.S. sales before joining J.D.Power in 2007.

DIFFERENT CHRYSLER

Chrysler Chief Executive Sergio Marchionne, who also heads Fiat, said last month that the U.S. automaker was still burning cash but the rate had slowed. 

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At 16, and with $640 billion in assets, the U.S. exchange-traded fund industry isn’t exactly wet behind the ears.

ETFs still lag far behind U.S. mutual funds’ more than $10 trillion in assets. But ETFs are gaining on their more established rivals, due in part to a selling point that’s been a big draw in volatile markets. ETFs can be traded like stocks throughout daily trading sessions, unlike mutual fund shares that change hands at end-of-the-day prices.

Clearly, investors are getting the ETF bug. Nearly $184 billion flowed into U.S. ETFs during the 12 months ended July 31, while stock and bond mutual funds saw $81 billion go out, according to the Investment Company Institute.

With more than 700 ETFs in the U.S., the offerings have become so diverse that you can gain exposure to everything from oil industry equipment suppliers to the movements of foreign currencies like Sweden’s krona. Most ETFs track a market index and focus on stocks, but actively managed ETFs and bond ETFs have also entered the fray.

Michael Latham is at the center of it all as U.S. head of Barclays’ iShares business, which commands about half the U.S. ETF market.

IShares’ leadership in a growing industry is a key reason why New York-based asset manager BlackRock Inc. is acquiring Barclays Global Investors, the investment arm of London-based Barclays. BlackRock announced plans three months ago to snap up BGI in a $13.5 billion deal expected to close by year end.

In a recent interview, Latham, 43, discussed growth prospects and challenges for San Francisco-based iShares and the ETF industry. Here are excerpts:

Do you expect any big changes after BlackRock becomes iShares’ new owner?

We really don’t expect any major change at all cheap credit report. We are going to continue to focus on educating financial advisers and investors about how ETFs work.

Many newer ETFs are narrow, tracking the performance of a single industry, overseas market or commodity. Do you see the niche trend continuing?

Some folks are getting into the market and realizing it’s not as simple as maybe they thought, and then are exiting.

We’re not looking for an investment fad. We’re looking to provide the building blocks of different asset classes for long-term investing.

In June we launched an ETF that focuses on Peru, the iShares MSCI All Peru Capped Index. It already has $70 million in assets. But we don’t evaluate product development based on assets gathered in the first year.

Any other new growth areas you see?

We’ll also be doing more bond ETFs because we think the fixed-income market is underserved. And we’ll be looking at more strategy-based products — it might be asset-allocation products, or more complex products.

What about actively managed ETFs?

We’re looking at it. But I think there is a lot of complexity around what you define as an active product. If you start with a true active stock selection, I find it hard to see how that works in a fully transparent ETF.

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Confidence among U.S. consumers rose more than forecast in September as the pace of job losses slowed and the economy showed signs of pulling out of the recession.

The Reuters/University of Michigan preliminary index of consumer sentiment increased to 70.2 this month from 65.7 in August. The index was forecast to rise to 67.5, according to a Bloomberg survey of economists. A government report Friday showed inventories at U.S. wholesalers fell in July as higher sales helped distributors reduce excess supply.

Americans are starting to grow more upbeat after suffering the biggest destruction of wealth on record from a slump in stocks and home prices and companies are ramping up production to replenish stockpiles. Consumers may still be wary of increasing the spending that makes up 70 percent of the economy as they focus on rebuilding savings and paying down debt.

"We can be encouraged that consumer sentiment is healing," said Jonathan Basile, an economist at Credit Suisse Holdings USA Inc. in New York.

"Good news continues to come through, bad news continues to diminish. It’s better, but it’s not good yet."

The University of Michigan measure of current conditions, which reflects Americans’ perceptions of their financial situation and whether it is a good time to buy big-ticket items like cars and homes, rose to 71.8 from 66.6.

The index of consumer expectations for six months from now, which more closely projects consumer spending, increased to 69.2 from 65 in August.

A Commerce Department report showed wholesalers’ stockpiles fell by a greater-than-forecast 1.4 percent in July, after a revised 2.1 percent drop in June. Wholesale inventories have had the longest series of declines since records began in 1987. Sales rose 0.5 percent, the third straight gain.

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FedEx Corp said profits in both the current and next quarters would be higher than Wall Street expected, citing an improving economy and stable fuel prices, and its shares jumped 6.8 percent to their best level in nearly a year.

Rivals United Parcel Service and Deutsche Post, parent of DHL, each rose about 4 percent.

FedEx said it now expected to report first-quarter earnings of 58 cents per share and second-quarter earnings of 65 cents to 95 cents per share.

That compares with analyst expectations of 43 cents and 70 cents for the first and second quarters, respectively.

The improved outlook “reflects the current outlook for fuel prices and a continued modest recovery in the global economy,” the company said in a statement. Its earlier forecast had called for fiscal first-quarter earnings of 30 cents to 45 cents per share.

“This company is very well positioned to benefit from any, even a very modest, economic recovery,” said Edward Jones analyst Daniel Ortwerth. “You’re talking about planes that are out there flying around and not very full. You put more packages on them and the margins improve.”

The news could bode well for FedEx’s main U.S. rival, UPS, he noted.

“This will benefit FedEx more than UPS because they’ve been the trend-setter in international delivery,” Ortwerth said credit scores for free.

IMPROVING ECONOMY

Wayne Titche, cHief investment officer at AMBS Investments in Grand Rapids Michigan, said FedEx has a competitive advantage against UPS in an economic recovery because its air shipping business is a bigger portion of the total, compared to its Ground trucking segment.

“They’ve had more leverage (than UPS),” Titche said. “Priority is bigger versus Ground, and that segment usually goes up faster when the economy improves.”

But Titche noted that FedEx’s second-quarter guidance range was relatively wide, and there is little concrete evidence as yet that the U.S. economy is improving, as opposed to merely stabilizing.

He added the company was also helped by lower fuel costs compared to a year ago.

“They had hedges in place before at higher prices so they’re benefiting,” he said. “The hedges are starting to come off and that’s going to the bottom line.”

Standard & Poor’s raised its price target on FedEx shares to $90, from $78. <RCH/US> 

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The number of U.S. workers filing new claims for jobless benefits fell last week to 550,000, according to a government report on Thursday that also showed the number of those collecting long-term aid tumbled.

Analysts polled by Reuters had expected initial claims to drop to 560,000, after reaching 576,000 the prior week, which had previously been reported as 570,000.

Continued claims fell to 6.088 million in the week ended August 29, the latest for which the data is available, from 6.247 million the prior week. That was the lowest level since the week ended April 4.

(Reporting by Lisa Lambert, Editing by Chizu Nomiyama)

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Palm Inc on Wednesday announced a lower-priced smartphone in the same family as its popular Palm Pre, although the move may be overshadowed by rival product launches by Motorola and Apple.

Palm said it will start sales of the Pixi, a candy bar-shaped multimedia handset with a full keyboard, ahead of the holiday shopping season. Like Palm’s popular Pre, Sprint Nextel Corp will be the exclusive provider in the United States.

The price will be revealed later, Palm said, adding that the smaller and lighter Pixi would cost less than the Pre, which will be marketed as a premium product. Several analysts predict the phone will sell for $99 after rebates.

Separately, Palm cut the price of the Pre by $50 to $149, after a $100 mail-in rebate, for new customers that sign a two-year service contract.

The announcements failed to buoy Palm’s shares, which fell about 5 percent after Credit Suisse analyst Deepak Sitaraman cut his rating on the shares to “neutral” from “outperform.”

He cited concerns about weaker-than-expected sales, and Palm’s decision to stick with Sprint, rather than AT&T or Verizon Wireless, and the dearth of information about when Palm’s new phones based on its “WebOS” operating system will make it to these carriers.

“With the announcement of the new Palm Pixi to be launched exclusively at Sprint toward year end (we expected the device to launch with AT&T or Verizon), we believe our previous estimate of 10 percent smartphone share for Palm in 2010 at each AT&T/Verizon may now prove optimistic, given Pre/Pixi are unlikely to be promoted aggressively when they land at these carriers next year,” he said in a client note.

OVERSHADOWED?

For Palm, whose executive ranks include former Apple brass, the new phone may have to fight for attention in a week when two bigger rivals, Motorola Inc and Apple Inc, are also introducing new products free credit report and score.

Apple on Wednesday will update its iPod line in its annual fall preview for the holiday season. While the event is not expected to focus on Apple’s iPhone, the event is likely to capture the attention of consumer electronics fans, including users of the iPhone.

That will be followed Thursday by Motorola’s hotly anticipated announcement of new phones — based on Google Inc’s Android mobile software.

Still, investors in Palm, a pioneer of handheld devices that has fallen well behind competitors like Apple and BlackBerry maker Research in Motion Ltd, may have reason for optimism.

The Pixi may provide reason to trust that, unlike previous management, Palm’s new bosses including Chief Executive Jon Rubinstein who helped create the iPod, can deliver on their promises to develop captivating products.

“The industry is watching them and asking ‘is Palm going to be able to deliver?’” said Michael Gartenberg, an analyst for market researcher Interpret. “They have done a very good job in doing so, and in capturing consumer mindshare” or attention, he added. “And mindshare, eventually, leads to market share.”

Palm earned its share of negative sentiment in years past with product mishaps, such as the ill-fated “Foleo” portable computer, which was introduced with much fanfare only to be canceled months later. Questions remain about its ability to ramp up supplies of the Pre and grow sales in a world where the iPhone and BlackBerry already have millions of loyal users. 

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Fast food giant McDonald’s on Tuesday lost an eight-year trademark battle against a Malaysian curry restaurant after the country’s highest court allowed the latter to use the prefix ‘Mc’.

Malaysia’s Federal Court dismissed an application by McDonald’s Corporation to appeal against an earlier Appeals Court judgment which allowed McCurry to use the prefix.

Chief Judge of Malaya Ariffin Zakaria, reading the verdict of the three-person Federal Court in the administrative capital, said McDonald’s had failed to properly frame its questions when applying to challenge the Appeals Court’s earlier verdict.

“It is unfortunate that we have to dismiss the application with costs,” Ariffin said.

McCurry, which is short for “Malaysian Chicken Curry,” serves Malaysian staples including fish head curry, according to the company website (www.mccurryrecipe.com).

“We feel great that this eight-year legal battle is finally over, and we can now go ahead with whatever we plan to do such as opening new branches,” McCurry owner P quick payday loan. Suppiah told Reuters after the court decision.

McDonald’s, which has 185 outlets in Malaysia, first sued the curry restaurant in 2001 and a High Court ruled in favor of the international fast food chain in 2006.

McCurry then took the matter up to the Court of Appeal, which ruled in favor of the Malaysian restaurant. McDonald’s subsequently took the matter to the Federal Court.

The McDonald’s operation in this country of 27 million people is run as a franchise by prominent businessman Vincent Tan.

(Reporting by Royce Cheah; Editing by Sugita Katyal)

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ST. CHARLES COUNTY — In the little towns of Defiance and Augusta, the great recession already ended last year.

The reason is the Katy Trail, which is showing a 50 percent increase in bikers, hikers and runners this year in St. Charles County. All that exercise makes people hungry and thirsty, meaning boom times for wineries, eateries and other little businesses along the trail.

"I’m up 22 percent for the year," says Todd White, owner of the Katy Trail Bike Rental in Defiance. "I think we’re benefiting from the down economy. Bicycling is a pretty affordable family-friendly activity."

White rents bikes for $5 per hour or $20 per day.

From January to July, 62,794 people hiked, jogged or biked the section of Katy Trail State Park between St. Charles and Weldon Spring, according to an estimate by the Missouri Department of Natural Resources. That’s up from the 41,661 users in the same period last year. By contrast, usage in the entire state park system is up only 5 percent this year.

This year’s Katy figures are more in line with the 56,800 recorded in the first seven months of 2007 and the 60,200 in 2006.

Rainy, dreary weekends catch the blame for 2008’s slump. Last year was the wettest year on record in St. Louis. But the cool, sunny summer of 2009 is bringing out the bikers.

Among them is Cathy Williams, an intelligence officer at the National Geospatial-Intelligence Agency in Arnold.

"This is like therapy for me," she says. "I feel safe here. I carry pepper spray, but I’ve never had to use it."

One day last week, she pedaled with her teenage daughter and a friend from near their home in Washington, Mo., to have lunch at the Tavern in Defiance, a 36-mile round trip.

Her friend, Whitney Narup, 20, has another motive. "It gets rid of this and this and this," she says, patting her belly, then her thighs, then pinching her upper arms.

Shayne Hummel will help put the pounds back on again. He bought the Tavern last year and has seen business rise by an "easy 20 percent."

The Tavern is part a local hangout and part a rendezvous for two kinds of bikers. Some arrive by pedal power. "I got groups that ride down from St. Charles (20 miles away) for breakfast," he says.

But on weekends, the Tavern and the bar across the street are haunts for motorcyclists who arrive by the pack after winding over the hilly country roads.

On a recent cloudy day, three preschool teachers from west St. Louis County were walking their bicycles up the steep hill that leads from the Katy to the Sugar Creek Vineyards & Winery.

At the top was Ken Miller, owner of the hilltop restaurant, with a view of the pretty Missouri river valley. Business — as measured by gallons of wine sold — is up 10 to 12 percent this year.

"We’re tracking on probably one of our best years," says Miller, who has run the winery since 1994.

Miller says his business is built on people from St. Charles and St. Louis counties who "want to relax a bit, get a bottle of wine and forget what they heard on the news that week."

A few miles down the trail, Steve Neukomm was thanking nature for the 20-percent boost in business at his Augusta Brewing Co. brew pub, which climbs a hillside between the trail and the town of Augusta.

"A good chunk of it is the weather," says Neukomm. But he also thinks the bad economy is persuading people to forgo expensive vacations and seek fun close to home.

Neukomm opened the restaurant 10 years ago, thinking he’d draw most of his customers from the town itself and tourists visiting area wineries.

"On our first day of business, every table we had was off the Katy Trail. I thought, ‘Wow, I didn’t see that coming,’ " he says.

At the Katy Trail Bike Rental shop, White says he hasn’t raised his rental price in seven years.

"It’s a business model that drives traffic," he says. The goal is to lure people in with a cheap bike rental and hope they’ll buy snacks or a bicycle shirt or something else. "If people are coming through the shop, you’ll make money," says White.

White’s shop is in an old general store built in 1898. He shares the building with his wife, Robin, who runs the Robin’s Nest gift shop. The two have developed a side business hauling bikes and bikers to various points on the trail, sometimes all the way to its beginning in Clinton in western Missouri.

Often, he picks those people up at Lambert-St. Louis International Airport.

"I get a lot of people from California and Colorado. They say the solitude is what’s so appealing," White says. Missouri has no beaches or mountains, but the quiet, rolling countryside contrasts with busy western parks, he says.Gait ad

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