Business and Finance

The biggest tech IPO in history took off like a slightly-delayed rocket this morning, with Facebook shares rising more than $7 to $45 in the first few minutes of trading, before falling back down to its launch price of $38 in the first hour of trading. So will the company be a long-term high flyer or will it just soars briefly before fizzling out?

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Ally Financial’s ResCap mortgage unit filed for a prepackaged bankruptcy protection Monday, a move that the taxpayer-owned bank says will allow it to take another step to repay Treasury.

The ResCap unit, which operates under the GMAC Mortgage brand, was once one of the nation’s leading subprime lenders. Problems with those home loans for riskier borrowers and the sharp drop in the company’s core auto finance business forced Treasury to give it a $15.8 billion bailout in 2009, as part of its efforts to rescue the troubled auto industry and housing market.

The company, which started as the finance unit of automaker General Motors (, Fortune 500) under the GMAC name, changed its name to Ally following the bailout. Besides continuing its auto finance business, it now operates an online commercial bank.

Ally also said it is looking at a possible sale or other strategic alternatives for its international business.

The company said that it expects GMAC to continue to make and service mortgage loans while the bankruptcy process is completed. The portfolio of home loans it holds, now valued at less than half its original value, will be auctioned off as part of the bankruptcy process payday loan lenders.

GMAC said it will make a so-called "stalking horse" bid of $1.6 billion for those loans, but they are expected to draw a higher bid from investors.

"The action by ResCap will enable Ally to achieve a permanent solution to its legacy mortgage risks and put these issues behind us," said Ally Chief Executive Officer Michael A. Carpenter. "This action, along with pursuing alternatives for the international businesses, will allow Ally to focus 100 percent of its energies on further strengthening its already leading U.S. auto finance and direct banking franchises."

Treasury currently owns about 74% of its outstanding stock, and Ally has paid about $5.5 billion of the bailout back to Treasury through dividends and loan repayments. The company’s statement Monday said that upon successful completion of the bankruptcy auction and disposal of its international business, it should be able to have paid back about two-thirds of the government bailout. 

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Under no fax paydayloans, an applicant can apply for any amount between $100 and $1500, considering the importance of the ends.

Let Greece go: It’s a possibility that’s being considered more and more publicly in Europe.

There have been two and a half years of bailouts, on top of broken promises by Greece to reform. The result: a fifth year of recession and, this week, political chaos. Voters on Sunday favored parties that either oppose the terms of the country’s international bailout or want to renegotiate them. If it cannot get more rescue loans, Greece will go bankrupt and likely have to leave the eurozone, the currency union of 17 countries.

The question confronting leaders in Athens, Berlin and other eurozone capitals could soon be: What would happen if Greece left the euro? How much damage would that do?

Among the possible scenarios:

• GREEK CHAOS: Economists agree that Greece, where unemployment is 21.7 percent, would suffer even more if it left.

So Greeks would try to pull their euros out of their bank accounts — before they could be converted into a new currency worth far less. Owners of Greek stocks would sell. As markets plunged and deposits fled, banks would collapse.

To try to limit the drain, the government would probably have to close the banks while the new currency is introduced. It might also try to prevent people from moving euros out of the country.

Every Greek company that owes money in euros would see those debts grow much heavier. Many would go bankrupt.

• A BOUNCE-BACK: On the plus side, the weaker drachma would make Greek exports cheaper and more competitive and could help the economy start growing payday loans guaranteed no fax. Companies outside Greece might be attracted by the cheaper labor and real estate, encouraging them to move plants there.

Tourism would also get a boost: booking a room on a Greek island, for example, would become much cheaper for foreigners.

• CONTAGION: The great fear, some say, is that if Greece leaves, other troubled eurozone countries might do the same.

“The big danger is financial contagion,” said Dennis Snower, president of the Kiel Institute for the World Economy. “The question would be, what stops the Portuguese from doing something similar?” People might think “just in case, let me get my money out of the bank,” he said.

• MAYBE NOT: Not everyone agrees that a Greek exit would be a disaster. Greece is tiny, and it wouldn’t be a total surprise. The possibility of a euro exit has been hanging over markets since late 2009. Banks outside Greece have had time to write off their Greek investments — and not make any new ones.

“A year ago, I would have said it’s too risky, but the situation has changed,” said Commerzbank’s chief economist, Joerg Kraemer, citing the eurozone fund and ECB loans. “The combined fiscal and monetary shield is much higher than it was a year ago.”

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Stocks are opening sharply lower after a mostly strong start to the week, yanked down by concerns about the debt crisis in Europe.

The Dow Jones industrial average is down 75 points to 13,041 in the opening minutes of trading Wednesday, a day after soaring 194 points, its biggest this year.

The Standard & Poor’s 500 is down six at 1,384 and the Nasdaq composite index is down 11 points to 3,032.

Spain, which sent markets higher Tuesday after its successful bond sale, reported that the proportion of bad loans at the country’s banks rose to an 18-year high low fee payday loans.

In the U.S., Halliburton rose 3 percent after the oil services company posted a 23 percent jump in first-quarter profits.

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SATURDAY

Email marketing — SCORE St. Louis is holding a workshop on using email and search engines effectively to reach your customers.

— 9 a.m. at the St. Charles Economic Development Center, 5988 Mid Rivers Mall Drive, St. Peters.

— $30. Register: www.stlscore.org or 314-539-6600

MONDAY

Workplace wellness — Regional and national experts will discuss wellness trends and practical ideas for area employers in a “workplace wellness” summit.

— 7:30 a.m. at the Spencer Road Branch Library, 427 Spencer Road, St. Peters.

— Free. Register: 636-441-6880

TUESDAY

Corporate networking — The Jewish Federation of St. Louis will host a “meet and greet” corporate and professional networking session paperless payday loans.

— 9 a.m. at the Hard Rock Café, St. Louis Union Station.

— Free. Register: 314-442-3731 or kweintraub@jfedstl.org

THURSDAY

Business leadership — The Walker Speaker Series presents a panel discussion on “Leadership Lessons from the Corner Office.”

— 5:30 p.m. at the East Academic Building, Webster University, 545 Garden Avenue, Webster Groves.

— Free. Register: www.webster.edu/speakers or 314-246-5973

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UPDATED at 9:40 a.m. with St. Louis activity.

Apple’s latest iPad drew die-hard fans to stores in the U.S. and nine other countries Friday, many of whom lined up for hours to be among the first to buy one.

The third version of the iPad went on sale at 8 a.m. local time, with 25 other countries getting it a week later. The new model, at prices starting at $499 in the U.S., comes with a faster processor, a much sharper screen and an improved camera, though the changes aren’t as big as the upgrade to the iPad 2.

“I don’t think it’s worth the price but I guess I’m a victim of society,” Athena May said in Paris.

About 450 people lined up outside Apple’s Ginza store in downtown Tokyo. Some had spent the night sleeping outside the store. In Madison, Wis., people brought reclining lawn chairs for naps, while a few played games on older iPads.

Customers also gathered outside the two St. Louis-area Apple stores before they opened Friday. At the Galleria store, about 100 people were waiting when the store opened at 8 a.m., a sales specialist said.

“It was a party atmosphere,” said the specialist, who requested her name not be revealed because company policy does not allowed her to be quoted in the media.

The Galleria store opened two hours early to accommodate the anticipated rush of customers to buy the new iPad. An early opening also was scheduled for Saturday.

Apple customers also showed up early at the store at West County Center, a store representative said.

In London, Dipak Varsani, 21, got in line at 1 a.m. Thursday and said he was drawn by the new device’s better screen.

“You’ve got clearer movies and clearer games,” he said. “I use it as a multimedia device.”

In Hong Kong, a steady stream of buyers picked up their new devices at preset times at the city’s sole Apple store after entering an online lottery.

The system, which required buyers to have local ID cards, also helped thwart visitors from mainland China - Apple’s fastest growing market - who have a reputation for scooping up Apple gadgets to get them earlier and avoid sales tax at home. A release date in China has not yet been announced.

Kelvin Tsui, a 26-year-old hospital worker in Hong Kong, was allowed to buy two and planned to sell the second to make money.

Two years after the debut of the first iPad, the device’s launch has become the second-biggest “gadget event” of the year, after the annual iPhone release. Customers could have ordered iPads ahead of time to arrive at home Friday, but many came out in person for the atmosphere.

“People always stop to talk to us,” Harry Barrington-Mountford, 22, said in London. “I am exhausted though, I have only had about 45 minutes of sleep.”

Christos Pavlides got to a downtown Philadelphia store at 10 p.m. Thursday and was the first in line. He already owns the two previous iPad models and several iPhones and figures the new iPad was next.

Despite competition from cheaper tablet computers such as Amazon.com Inc.’s Kindle Fire, the iPad remains the most popular tablet computer. Apple Inc. has sold more than 55 million iPads since its debut in 2010.

For some customers, standing in line was the only chance to get a new iPad on Friday. Apple quickly ran out of supplies it set aside for advance orders. The company was telling customers Thursday to expect a two- to three-week wait for orders placed through its online stores. Some buyers feared even longer waits.

Tim Bryant of the Post-Dispatch contributed to this report.

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World stock markets were mixed Monday as fears of a Greek debt default dampened the euphoria from a stronger-than-expected increase in U.S. jobs.

Benchmark oil fell to near $97 per barrel while the dollar rose against the euro and the yen.

European stocks fell in early trading as Greece’s coalition government was facing another day of tough negotiations with international lenders to reach a deal for Athens to receive a euro130 billion ($171 billion) emergency bailout.

The deal is vital for Greece to avoid bankruptcy as it cannot cover a euro14.5 billion ($19.1 billion) bond repayment due March 20.

Britain’s FTSE 100 slipped 0.3 percent to 5,883.86. Germany’s DAX fell 0.4 percent to 6,739.95 and France’s CAC-40 lost 0.8 percent to 3,399.17. Wall Street also was headed for a lower opening, with Dow Jones industrial futures down 0.3 percent to 12,751 and S&P 500 futures shedding 0.4 percent to 1,333.20.

Asian shares closed higher on the heels of a data released Friday that showed U.S. unemployment had fallen to its lowest in three years, suggesting a stronger recovery in the world’s No. 1 economy that could benefit the region’s exporters.

Japan’s Nikkei 225 index rose 1.1 percent to close at 8,929.20, its highest closing in more than three months. South Korea’s Kospi was marginally higher at 1,973.13.

Hong Kong’s Hang Seng lost 0.2 percent to 20,709.94, slipping into negative territory as investors began to cash in some of their investments as the talks in Greece dragged on.

“We hit 21,000 and now there is profit-taking, because there is still potential bad news from Greece,” said Jackson Wong, vice president at Tanrich Securities in Hong Kong. “The Greek debt talks are still going on, and no one knows if significant bad news will come out of there.”

Australia’s S&P ASX/200 added 1.1 percent to 4,296 while benchmarks in Singapore, mainland China and the Philippines also rose. Taiwan’s and Indonesia’s main indexes fell.

On Friday, the Dow Jones industrial average was propelled to its highest close since May 2008 after the U.S. Labor Department said the economy added 243,000 new jobs in January, the strongest job growth in nine months.

That helped to push the unemployment rate down to 8.3 percent and the number of unemployed down to 12.8 million.

Noting that a similar gain occurred in April 2010, only to be followed by a negative trend, analysts at DBS in Singapore said, “Stay optimistic but keep a few grains of salt close at hand.”

Falling unemployment in the U.S. is likely to be good news for Asia, as it suggests stronger consumer demand for the region’s exports of clothing, cars, consumer electronics and other goods.

Among Japanese shares, Panasonic Corp. soared 6.3 percent and Mazda Motor Corp. jumped 6.9 percent. Camera maker Nikon Corp. shot up 11.2 percent after revising upward its net pretax profit for the current business year, Kyodo News reported.

Chinese shipping companies, which also stand to benefit from increasing exports, also rose. Hong Kong-listed China Shipping Container Lines rose 5.1 percent. China COSCO Holdings gained 4.9 percent.

Benchmark oil for March delivery was down 66 cents to $97.19 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $1.48 to finish at $97.84 per barrel on the Nymex on Friday.

In currencies, the euro fell to $1.3059 from $1.3153 late Friday in New York. The dollar rose to 76.66 yen from 76.55 yen.

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1901 • John F. Queeny sets up Monsanto Chemical Works in honor of his wife, Olga Monsanto, and begins making saccharin at a St. Louis plant.

1929 • Monsanto buys two companies to enter the rubber chemicals business. It also buys several other chemical companies.

1997 • Monsanto spins off its chemical group as Solutia Inc.

December 2003 • Solutia files for Chapter 11 bankruptcy.

May 2004 • Solutia promotes Jeffry Quinn to president and CEO after he joined the company in 2003.

May 2007 • Solutia buys the half of Brussels-based Flexsys NV, a supplier of chemicals to the rubber industry, that it didn’t own.

February 2008 • Solutia emerges from bankruptcy.

June 2009 • Solutia sells its nylon business unit.

January 2012 • Eastman Chemical announces plans to acquire Solutia.

Source: St. Louis Post-Dispatch research, Solutia

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General Motors Co. is on track to retake the title of world’s top-selling automaker, riding strong sales in the U.S. and China to beat Volkswagen and Toyota.

GM, which lost the crown to Toyota in 2008 after holding it for more than seven decades, won’t release global sales numbers until later this month, but it’s on pace to finish 2011 at around 9 million cars and trucks, at least 800,000 more than its German and Japanese rivals.

Volkswagen AG on Monday said it sold a record 8.156 million vehicles last year, a 14 percent rise over 2010. The company expects a tough 2012, though. Toyota, whose production suffered from the tsunami and Fukushima nuclear disaster, had earlier reported sales of 7.9 million vehicles in 2011.

GM, meanwhile, sold almost 7 million vehicles worldwide in the first three quarters and is expected to reach around 9 million for 2011.

GM has more appealing cars and trucks than in the past when Toyota took the crown away, says Jeff Schuster, senior vice president of forecasting for LMC Automotive, an industry consulting company in Troy, Michigan.

Other manufacturers have passed Toyota partly because its car production was paralyzed by Japan’s earthquake and nuclear disaster last year. But rivals also developed stylish vehicles that are drawing more customers.

“They’re not pushing their designs as much as others in terms of new looks and feel,” Schuster says of Toyota. “The market has changed.”

Volkswagen met its aggressive sales goals in the U.S. and throughout the world, and its products also have made it a strong global competitor, Schuster says.

In the U.S., VW sales rose 26 percent last year to top 324,000 vehicles, boosted by a new Jetta compact sedan and the Passat midsize sedan. That surpassed its goal of 300,000.

Schuster expects a tighter race for the global sales crown next year with Toyota recovering from Japan’s disasters and the Nissan-Renault venture challenging the leaders.

Volkswagen, whose brands include Audi, Skoda and Seat, has a goal of producing 10 million vehicles per year and passing Toyota and GM to become the world’s biggest automaker by 2018.

Volkswagen’s top sales and marketing executive, Christian Klingler, says that “all the company’s brands have shown increases in difficult conditions on volatile markets” and called the 2011 figures “an outstanding result.”

But he added that the coming year will be demanding. “In 2012 the risks are increasing above all on European markets.”

The 17 countries that use the euro are struggling with a financial crisis over too much government debt. Fears that a country may default and damage the banking system have weighed on the wider economy and many think the eurozone economy may have shrunk in the last three months of 2011.

But the 2011 figures underlined a strong year for German automakers, who have profited from strong sales and profits in emerging markets, especially China. Volkswagen, Daimler AG’s Mercedes-Benz, BMW, and Porsche all recorded record vehicle sales for the year.

Luxury carmaker BMW AG said Monday that it sold a record 1.67 million vehicles under its BMW, Mini and Rolls-Royce brands thanks to a 14.2 percent increase over 2010.

The BMW brand, the company’s mainstay, sold 12.8 percent more cars and SUVs _ a total of 1.38 million. Rolls-Royce increased unit sales by 30.5 percent with 3,538 cars sold worldwide, breaking a sales record from 1978.

Porsche on Monday reported a 22 percent sales increase to 118,867 vehicles.

Daimler AG on Jan. 5 reported record sales of 1.362 million for its Mercedes-Benz, smart and Maybach brands.

Some analysts have said that VW is the world’s biggest because GM’s figures include vehicles made by its Wuling joint venture in China. Many don’t count Wuling because GM doesn’t have controlling interest in the company, but GM includes it in global sales figures.

Including Wuling, GM will overtake Toyota and Volkswagen, says Schuster, senior vice president of forecasting for LMC Automotive, an industry consulting company in Troy, Michigan.

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AP Auto Writer Bree Fowler in Detroit contributed to this report.

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