Business and Finance

Elizabeth Warren doesn’t look or sound scary. She’s a 61-year-old Harvard Law School professor from Oklahoma who has written personal finance books, some with her daughter.

But conservatives and some bankers are trying to kill any chance that Warren - a consistent critic of the financial sector before it was cool to be one - will run the consumer financial protection agency that’s part of the Wall Street reform measure just signed into law by President Obama.

Naysayers, such as Senate Minority Leader Mitch McConnell, R-Ky., say they just don’t trust her - although he doesn’t say why.

"I think there’s a lot of controversy around Elizabeth Warren’s services," McConnell said Tuesday in a media briefing. "It is an extraordinarily powerful position with an incredibly large budget and authority that is constrained by almost nothing. And, therefore, the person that does serve in that capacity is going to have to be trusted by everyone."

Warren, who chairs a congressionally appointed watchdog panel over the federal bailout, is not the only candidate for the job. But she is the one everyone is watching.

Her ideas for a regulator for financial products became the template for the new agency, which is tasked with regulating mortgages and credit cards, as well as making new rules for much of the financial industry and enforcing them at the largest banks.

Before the financial crisis, she was already the authority on mounting credit card debt. And her books about the financial decline of the middle class have been must-reads in the consumer advocacy community for years.

Warren’s nomination would send a strong signal that the White House is willing to stand behind an aggressive regulator who will emphasize consumer needs over bank needs. White House spokesman Robert Gibbs called her "very confirmable" on Monday.

Warren declined to be interviewed, through a spokesman.

While several banking lobbying groups declined to talk about Warren for publication, several academics point to her prolific record warning against banking industry "tricks and traps" to explain why she shouldn’t get the gig.

"Her first presumption is not that the markets work fine, but that the markets don’t work and we need to intervene," said former Republican Senate Banking staffer Mark Calabria of the Cato Institute, a libertarian think tank. "She argues that borrowers are tricked and mislead, and the credit system is predatory."

Conservatives also say they know she will be an aggressive advocate, and that tougher rules under her reign could come at the expense of credit availability and jobs.

"Cracking down on Wall Street means that some people won’t get a loan. There are jobs that won’t be created. Cars that won’t be sold," said Phillip Swagel, a visiting professor at Georgetown University, who was an assistant Treasury secretary during the George W. Bush administration. "Is she able to switch from advocacy to the thinking of the big picture of society?"

But consumer advocates and even some powerful lawmakers say a healthy distrust of the banking sector is what America needs right now after the last few decades, when regulators placed too much trust on banks.

"She’s a tenured Harvard law professor and she has an understanding of how out of balance the responsibilities and obligations are right now between lenders and borrowers," said Tamara Draut, vice president of policy and programs for Demos, left-leaning think tank in New York.

Watchdog panel acrimony

Another fear among those at federal agencies is that Warren would use the consumer regulator job as a bully pulpit to push ideas that go farther than what makes administration officials comfortable.

Warren runs the Congressional Oversight Panel, a congressionally appointed watchdog group of five who are charged with oversight of the 2008 financial crisis bailout.

When Treasury Secretary Timothy Geithner testified before the oversight panel last spring, Warren’s first question was why Treasury wasn’t asking for the same kind of management shake-ups at big banks as they were in the auto industry.

"Do you think the banks are better managed than the auto companies?" she asked.

Generally, most lawmakers like Warren’s tough questions and have praised her work - including Republicans such as Sen. Chuck Grassley, R-Iowa, and Sen. Olympia Snowe, R-Maine, who last year filed a failed amendment to attempt to get the panel subpoena power.

But on a few occasions her enthusiasm has irked fellow panel members, notably those who don’t share her views. Of the five original panel members, only the three appointed by Democrats have stayed put. Three Republicans have stepped down.

And a top complaint penned by those who resigned is that the panel sometimes steps beyond its primary role as a watchdog, especially when it offered "controversial" policy alternatives they believe stretch the panel’s defined mission.

"Good oversight may not always attract the same headlines as controversial policy proposals, but it is valuable; more important, this is the task assigned to the panel," wrote one of those who left, former Sen. John E. Sununu, last August. "The Panel is not, however, a policy-making body."

Rep. Jeb Hensarling, R-Texas, wrote in December that the main reason he was resigning was because the panel "too often focuses upon making policy recommendations to Congress in place of critical and badly needed oversight."

Sununu declined to be interviewed, and Hensarling didn’t return calls in time for publication.

In response, Congressional Oversight Panel spokesman Peter Jackson said that six of the committee’s last seven reports have been approved unanimously. He added that the panel is required, by law, to make policy recommendations.

The two Republicans currently serving on the oversight panel said in a statement that they’ve liked working with Warren. They found her "quite willing to modify her views if presented with well-reasoned cogent arguments," wrote J. Mark McWatters, a tax attorney, and Kenneth Troske, a University of Kentucky economics professor. 

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Most of Europe’s biggest banks passed stress tests aimed at shoring up confidence in the region’s economy, officials said Friday.

Officials led by the European Central Bank tested 91 banks, and all the major lenders passed. One state-owned German real estate bank, one Greek bank and five smaller Spanish banks failed and will have to raise new funds.

The test showed Europe’s banks could suffer 566 billion euros ($730 billion) in asset writedowns and trading losses over the next two years should the region suffer a recession and an interest rate spike tied to national solvency fears.

But officials said most banks would emerge from a downturn in good shape, with the regionwide bank capital level slipping by a point to 9%. The minimum safe level for the sake of the exercise was 6%.

Supervisors also said they would "welcome" individual banks’ publication of further information on the results of their individual examinations, which could afford investors further insight into lenders’ condition.

Policymakers published the test results in hopes of restoring confidence to European funding markets, which have been wracked by fears that a sovereign debt default will lead to another slew of bank failures.

The design of the test raised some eyebrows in the markets. Supervisors said they discounted the value of sovereign bonds held by banks, but only for those bonds held in the banks’ trading accounts paydayloans. Bonds that the banks plan to hold to maturity weren’t discounted under the test.

This leaves open the possibility that a bank holding Greek government bonds, for instance, could pass the test — and still suffer crippling losses in the case of a Greek default.

That’s a major weakness of the test, and will feed skepticism about whether the exercise actually accomplished anything.

Even so, the tests are likely to have at least a modestly positive effect on sentiment in the banking sector in Europe.

Stress tests conducted in the United States faced similar skepticism last year, with many observers contending they weren’t tough enough to show how banks might perform in a deep downturn.

A year later, banks are still under intense criticism for their failure to extend more loans to small businesses at a time of high unemployment. But few observers worry now about whether the biggest U.S. banks could withstand another economic downturn, which shows the stress tests worked much as backers like Fed chief Ben Bernanke promised. 

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Federal testimony on the Gulf of Mexico oil spill Friday revealed that an alarm system on the Deepwater Horizon rig had been “inhibited” for about a year before the rig exploded and sank in April.

Sensors that detect combustible or toxic gases were still active, relaying the message to the computer system, but the trigger for an audible or visual alarm was disabled.

According to numerous media reports, the platform’s chief electronics technician Mike Williams told the six-member federal inquiry panel that he had asked about the alarm being partially disabled about a year before the accident and was told by supervisors that it was done to prevent false alarms waking crews up at all hours of the night no faxing payday loan.

Williams told the committee that no audio or visual alarms were activated the night of the April 20 fire.

The joint hearing, held by the U.S. Coast Guard and the Bureau of Ocean Energy Management, Regulation and Enforcement, was held near New Orleans Friday.

The Houston Business Journal is providing continuous coverage of the Gulf oil spill.

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Rockville-based Emergent BioSolutions Inc., which supplies the government with the only regulator-approved vaccine for Anthrax, boosted its full-year forecast for sales and earnings based on rising sales of that vaccine.

The company now forecasts full-year revenue of between $275 million and $300 million, up from a forecast in May of between $235 million and $255 million. It expects 2010 net income of between $40 million and $50 million, compared to its previous forecast of between $20 million and $30 million.

As much as $190 million in 2010 revenue will come in the second half of the year, it says, after a contract modification that increases the number of doses of BioThrax the government will buy for its stockpile this year.

“We are extremely pleased with the results of our continuous process improvement program for BioThrax and expect this program to drive the maintenance of positive production metrics going forward,” said Emergent BioSolutions (NYSE: EBS) Chief Operating Officer Daniel Abdun-Nabi.

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Banking giants and a global search engine’s disappointing second-quarter earnings sent stocks tumbling Friday, ending a seven-day rally.

All three major stock indexes dropped at least 2.5 percent, with the Dow Jones industrial average falling 261 points to 10,097. Four of every five stocks lost, including large declines for three Sacramento-area stocks.

Shares of The McClatchy Co. (NYSE) — publisher of The Sacramento Bee and 29 other daily newspapers — dropped 32 cents, or 8.5 percent, to $3.44. The company’s stock has dropped 27 percent during the past month. The Sacramento-based company, which endured a disappointing second-quarter report by media giant Gannett Co. Inc. (NYSE: GCI), will release its earnings July 29.

Shares of SureWest Communications (Nasdaq: SURW) also dropped 32 cents — or 5.1 percent — to $5.99. The Roseville telecommunications company also will announce earnings July 29. And shares of GenCorp Inc no faxing 1 hour payday loans. (NYSE: GY) of Rancho Cordova fell 24 cents — or 4.6 percent — to $5.04.

Bank of America (NYSE: BAC) and Citigroup’s (NYSE: C) second-quarter performances disappointed investors, with both companies’ stock falling more than 5 percent. And Google (Nasdaq: GOOG) stock dropped 7 percent, after the search engine giant’s second-quarter earnings failed to find analyst estimates.

But the biggest concern was possibly a University of Michigan and Reuters twice-monthly consumer sentiment survey that fell to 66.5 in early July, from a previous 76. Analysts had expected much stronger showing, according to media reports.

The Nasdaq Composite Index lost 70.03 points, or 3.1 percent, while the Standard & Poor’s 500 index dropped 31.60 points, or 2.9 percent.

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Yet another claim is being made in court about how Facebook Inc. founder Mark Zuckerberg started the company, this time by a New York man who says he is owed 84 percent ownership of the company.

Paul Ceglia says in his lawsuit in an Allegheny County court that he has a signed contract with Zuckerberg in 2003 to design and develop thefacebook.com.

Ceglia said he was owed a $1,000 fee and ownership of 50 percent of Facebook, plus 1 percent for each day beyond the original terms until the site was finished, adding up to an 84 percent stake.

The judge in the case has put a temporary restraining order on Zuckerberg and Facebook, preventing the Palo Alto social networking company from transferring any of its assets online payday loans.

Facebook has denied the charges made by Ceglia and is attempting to move the case to a federal court.

Ceglia was sued last year by New York Attorney Gen. Andrew Cuomo for allegedly taking $200,000-worth in pre-orders for wood pellets and then failing to deliver them.

His lawsuit follows a more celebrated case involving ownership claims made by Zuckerberg's Harvard University classmates, the subject of a movie due for release this fall.

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A concrete panel on the facade of the O’Donnell Park parking structure has been ordered removed as a precautionary measure to ensure public safety.

The panel is adjacent to a spot from where a 30-foot, 27,000-pound concrete slab fell from the structure, killing a 15-year-old boy and injuring three others as the made their way to Summerfest.

The order came at the recommendation of County Executive Scott Walker, in conjunction with on-site engineers, the Sheriff’s Department, the District Attorney’s Office and Milwaukee County corporation counsel.

Since the June 24 accident, access to the parking structure has been limited and Milwaukee County has been inspecting the remaining facade panels to determine whether they are securely attached to the structure.

Based on the ongoing inspection, it has been determined that it is necessary to remove the concrete facade panel that is currently in place over the entrance into the parking structure from Lincoln Memorial Drive, according to a statement from the county no fax payday advance.

Steps have been taken to secure the precast concrete section until its removal, the county said. The facade removal will be done at the direction of the Milwaukee County District Attorney’s office. The date and time of the removal has not been determined, but will take place “as soon as arrangements can be made,” county officials said.

Once the piece is removed, it will be placed in secure storage as potential evidence in the ongoing investigation, according to the statement.

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Venrock has announced the closing of a $350 million diversified venture capital fund.

The fund will focus on investments in early-stage technology, health-care and energy companies.

With the close of Venrock VI, the firm has approximately $2.2 billion under management payday loan.

Venrock, which has an office in Palo Alto, was originally the venture capital arm of the Rockefeller family.

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U.S. Global Investors’ concluded Friday with a slight increase in the investment company’s stock price.

U.S. Global (NASDAQ: GROW) posted a 1.86 percent increase in its stock price to close at $5.49. The company was the only local stock to post an increase.

Eight San Antonio stocks recorded decreases in their prices on July 2, compared to the previous trading day.

Seven local stocks did not register any significant percentage increase or decrease over the previous trading day.

The Dow Jones Industrial Average fell 46 points to close at 9,686.

Friday’s closing tally:

• Abraxas Petroleum Corp.’s (NASDAQ: AXAS) — $2.72, down 1 percent.

• Alamo Group Inc.’s (NYSE: ALG) — $20.97, unchanged.

• CC Media Holdings’ (Pink Sheets: CCMO) — $6.65, unchanged.

• Cullen/Frost Bankers Inc.’s (NYSE: CFR) — $50.68, unchanged.

• GlobalSCAPE Inc.’s (AMEX: GSB) — $2.44, down 1.2 percent.

• Harte-Hanks Inc.’s (NYSE: HHS) — $10 check cash advance.72, down 4.54 percent.

• Kinetic Concepts Inc.’s (NYSE: KCI) — $35.92, unchanged.

• NuStar Energy LP’s (NYSE: NS) — $56.04, unchanged.

• NuStar GP Holdings LLC’s (NYSE: NSH) — $30.48, unchanged.

• Pioneer Drilling Co.’s (AMEX: PDC) — $5.74, unchanged.

• Rackspace Hosting’s (NYSE: RAX) — $17.15, down 5.35 percent.

• Rush Enterprises’ (NASDAQ: RUSHA) — Class A stock closed at $13.17, down 2.15 percent.

• Rush Enterprises’ (NASDAQ: RUSHB) — Class B stock closed at $11.24, down 2.35 percent.

• Tesoro Corp.’s (NYSE: TSO) — $10.75, down 2.8 percent.

• U.S. Global Investors’ (NASDAQ: GROW) — $5.49, up 1.86 percent.

• Valero Energy Corp.’s (NYSE: VLO) — $16.90, down 2 percent.

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Seeking to capitalize on the migration to Internet-based computing services, Town and Country-based Savvis Inc. released on Monday a new product that allows customers to better manage their information technology systems online.

The practice of moving away from hardware and software to programs and data storage on shared networks, known as cloud computing, is an accelerating trend.

A study commissioned by Savvis this year estimated that the number of companies that rely mostly on in-house IT infrastructure will drop to 49 percent in 2020 from 82 percent today.

However, many applications cannot easily communicate with one another in "the cloud," and customizing them so they can is often an expensive endeavor.
Savvis’ newest cloud computing product, the Symphony Virtual Private Data Center, lets customers ratchet up or down resources they need rather than buying a one-size-fits-all service.

It also lets customers easily combine applications within a cloud to organize their own data centers, Bryan Doerr, Savvis’ chief technology officer, said during a Monday conference call no teletrack payday loan.

For instance, a company could combine security, marketing and data-sharing applications within its own data cloud hosted by Savvis, Doerr said.

That type of application integration has not been readily accessible in cloud computing, said Steve Powell, president of Delta Systems, an IT, Internet and network hosting company in Columbia, Mo. Getting applications to communicate with each other on a cloud platform is generally expensive and hard to coordinate.

Savvis’ new offering is "definitely upping the ante," he said.

"If I were running an IT department in a medium to large company, I’d definitely give it a look," Powell said.

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