Finance & Business World

Left- and right-wing lines in the sand, a partisan pre-vote speech by U.S. House Speaker Nancy Pelosi, overwhelming public distaste for helping Wall Street, lukewarm support from presidential candidates Barack Obama and John McCain and limited lobbying success from the Bush administration and business groups all doomed the $700 billion bank bailout Monday.

The $700 billion mortgage and bank bailout measure failed in the U.S. House of Representatives, pummeling economic confidence, as well as credit and financial markets.

The bill failed 228-205 with 133 Republicans and 95 Democrats opposing.

Only 65 Republicans voted in support, despite the bailout being engineered by the Bush White House and accompanied by dire economic warnings.

Many of the GOP critics, such as U.S. Rep. Tom Price of Roswell, Ga., had an underlying ideological opposition to the idea of the federal government taking on bad mortgages from lenders.

Price blasted the plan philosophically as an “egregious” undermining of American ideals and practically as an unacceptable hit on taxpayers.

“It is unfortunate that congressional Democrat leaders insisted on pushing through this fatally flawed plan instead of considering free market alternatives,” he said.

That free-market orthodoxy compelled a number of GOP “no” votes.

At the other end of the spectrum, Pelosi, D-Calif., is getting some of the blame for the defeat. Pelosi voted for the measure but House leaders, Democrat and Republican, didn’t put together a winning hand. The bailout defeat drowned financial markets Monday.

Pelosi also gave a charged speech before the House vote, blaming President Bush’s and Republican economic policies for the credit and finance disorder, saying they followed a “right-wing ideology” while hailing the Clinton administration. Banking deregulation and home ownership pushes blamed in part for the mortgage problems curently saddling banks, enjoyed support from the Clinton and Bush administrations, including some former Clinton economic aides now advising Barack Obama.

Pelosi also called the original plan forwarded by U.S. Treasury Secretary Henry Paulson and Federal Reserve Bank chairman Ben Bernanke “arrogant” and hammered home criticism of Wall Street executives’ compensation.

Despite supporting the bill, Pelosi spent much of her speech criticizing Bush policies and Wall Street and echoing some of the liberal criticisms of the bill online payday advance. She spent less time saying why she was supporting it.

Republicans said Pelosi’s speech and criticisms turned off some fence-sitting Republicans and emboldened more Democrats to vote “no” on the bill.

Ninety-five freshman, Hispanic and liberal Democratic lawmakers voted against the bill.

They have their own liberal laundry list they want in the bailout: more help for homeowners, money for community organizing groups that help distressed mortgage holders and a greater toll on Wall Street, including new taxes.

Public opinion polls and calls to congressional offices showed little backing for the bailout. Only two of the 13 Georgia representatives — Democrats Sanford Bishop of Albany and Jim Marshall of Macon– supported the plan. The other four Democrats in the delegation joined all seven Republicans in voting against it.

The partisan and orthodoxy-driven bailout failure prompted large stock market losses and increased worries of frozen credit rivers and more drowning banks and mortgage lenders.

“This legislation was a move that we believe would have restored confidence in the financial markets,” said Stephen E. Sandherr, CEO of the Associated General Contractors. The U.S. Chamber of Commerce and other business groups are also upset with the failed vote and its potential economic impact.

Democrats could return with a more liberal plan than the Bush proposal that was voted down Monday, including money for “community organizing groups,” new taxes on Wall Street and union membership guarantees on corporate boards.

Neither presidential rival, John McCain or Barack Obama, invested substantial political capital in support of the bailout. McCain somewhat sided with House Republican critics of the plan while Obama has used the mortgage and credit crisis to fault Bush’s economic plans on the campaign trail — a less strident echo of Pelosi.

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Embattled political leaders in Tokyo and London may end up coming to the aid of President George W. Bush in containing the economic fallout from the credit crisis as political self-preservation trumps nationalism.

Confronting a recession, Japan's new prime minister, Taro Aso, is likely to promise tax cuts and higher spending in a bid to win a parliamentary election as early as next month. British Prime Minister Gordon Brown, who faces unrest in his party over its and his sagging popularity, may also opt for budget-busting measures to turn around the weakest U.K. economy since the early 1990s.

That would be welcome news for Bush and Federal Reserve Chairman Ben S. Bernanke because the U.S. has become so dependent on exports to generate growth — gross domestic product, which expanded at a 2.8 percent annual rate in the second quarter, would have contracted were it not for trade — that anything foreign governments do to stimulate their own economies is likely to help.

“We're heading into a global recession,'' says Simon Johnson, former chief economist at the International Monetary Fund and now a senior fellow at the Peterson Institute for International Economics in Washington, who adds that “there's room'' for governments to do more.

Pull All Strings

Central bankers, meanwhile, are under pressure to ease credit, and investors are betting they'll do so within months. Traders see the Bank of England cutting its benchmark rate, currently 5 percent, in October, according to a financial-market index compiled by Credit Suisse Group. Economists surveyed by Bloomberg News expect the European Central Bank to do likewise early next year after keeping its rate unchanged at 4.25 percent at a meeting this week.

“Policy makers may soon be forced to pull all available strings, including rate cuts by all the major central banks,'' says Joachim Fels, co-chief economist at Morgan Stanley in London. The ECB, Bank of Japan and other central banks have already united with Bernanke to pump dollars into money markets.

Leaders in China and Russia, meanwhile, are stepping back from claims that the credit crisis is a U.S. problem and are moving to aid their countries' economies.

`I Told You So'

When the turbulence began more than a year ago, other countries let the U.S. take the lead in mitigating the impact. While policy makers in Washington cut interest rates at the fastest pace in two decades and adopted a $168 billion economic- stimulus package, their counterparts in other capitals held back.

Talk of decoupling — the seeming ability of the rest of the world to forge ahead while the U.S. faltered — was fashionable. Some commentary still has an “I told you so'' tone, suggesting that America is getting its comeuppance after years of lecturing the rest of the world on the benefits of unfettered capitalism.

German Chancellor Angela Merkel chided the U.S. and the U.K. for not listening when she called last year for stronger financial regulations. “Germany has always pointed out how necessary they are,'' she said in a Sept. 22 speech in Berlin.

But any schadenfreude is accompanied by a realization that other countries aren't immune to America's woes. “Like everywhere in the world, the French fear for their savings, their jobs, their purchasing power,'' President Nicolas Sarkozy said Sept. 25 in Toulon.

Bad Debts

Johnson says he expects global growth to fall “considerably'' below the 3 percent rate the IMF deems equivalent to a world recession. The international economy grew 4.9 percent last year.

Treasury Secretary Henry Paulson has called on other countries to follow the U.S. by setting up programs similar to his $700 billion plan to buy bad debts from banks. While none have done so, Japan and the U.K., among others, are shifting their policies by looking for ways to boost growth.

Japanese officials, who earlier this year were advising the U.S. on the lessons they learned bailing out their banks in the 1990s, now are focused on expansion. The world's second-largest economy contracted at a 3.3 percent rate in the second quarter quick payday loan.

Aso, 68, last week named Shoichi Nakagawa, an advocate of increased government spending, as finance minister, a sign the new prime minister wants to move quickly to turn the economy around. Aso's Liberal Democratic Party has historically used spending on bridges and other infrastructure to build support.

`Boost the Economy'

LDP officials predict Aso will call an early election to capitalize on any honeymoon period his government enjoys, rather than wait until lawmakers' terms expire next September. The LDP, which has ruled Japan for all but 11 months of the past half- century, trails the opposition Democratic Party of Japan in some polls.

Japan is going to be “spending money to boost the economy, ending the strong commitment to balance the budget by 2011,'' says Hideo Kumano, chief economist at Dai-Ichi Life Research Institute in Tokyo.

The U.K.'s Brown, 57, has his own political and economic problems seven months after his government nationalized mortgage lender Northern Rock Plc. With polls showing his Labour Party trailing the opposition Conservatives by 10 percentage points and more, Brown is already under pressure from restive party members to step down.

Meanwhile, a housing slump is pushing the British economy toward its first recession since 1991. Chancellor of the Exchequer Alistair Darling said last week he will put off action to curb the government's mounting budget deficit — 10.4 billion pounds ($19.2 billion) in August, the largest for that month since records began in 1993 — arguing that it isn't the “right time to be taking money out of the economy.''

Radical Steps

Brown's government today seized Bradford & Bingley Plc, the country's largest lender to landlords, after it struggled to find funding for its lending.

Jim O'Neill, head of global economic research at Goldman Sachs Group Inc. in London, says the government should follow the U.S. in taking radical steps to rescue the economy, perhaps by taking over the mortgage-lending activities of troubled banks.

“We need to consider some out-of-the-box things,'' O'Neill says. Leaders in emerging markets, until now the dynamos of the global economy, also are under pressure to offset the spreading economic troubles.

“Asia is not going to come out of this global crisis and slowdown unscathed,'' says Venkatraman Anantha-Nageswaran, head of research at Bank Julius Baer & Co. in Singapore. “People are on the edge, and there's political pressure to ease the burden.''

Slowing Growth

Chinese officials, who earlier this year were telling the U.S. to put its house in order, are now moving to counter a slowdown in their own economy.

China Investment Corp., the government's $200 billion sovereign-wealth fund, bought shares in leading banks to shore up a stock market that is down almost 60 percent in 2008, according to the official Xinhua News Agency. China's leaders are also working on a plan for as much as 400 billion yuan ($58 billion) of spending and tax cuts following four straight quarters of slowing economic growth.

Russian policy makers have little time for self- congratulation as they struggle to contain a crisis of confidence in the country's economy and markets.

President Dmitry Medvedev this month pledged 500 billion rubles ($19.6 billion) to ensure “the stability of the stock market.'' This was part of more than $100 billion the government said could become available through loans, tax cuts and other measures. Russia's dollar-denominated RTS Index is the second- worst performer this quarter among 88 markets tracked by Bloomberg.

“You're not seeing a lot of the gloating about the U.S. problems that you heard before,'' says Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts. “Instead, you're starting to see a lot of the countries starting to do some of the stuff that the U.S. has been doing.''

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U.K. Prime Minister Gordon Brown may have defused calls to step down, rallying lawmakers and union leaders with a pledge to crack down on excesses in Britain's banking industry.

Union leaders, who fund two-thirds of the ruling Labour Party's budget, praised Brown's criticism of “unbridled free- market forces'' and of bonuses “based on short-term speculative deals.'' Lawmakers including Foreign Secretary David Miliband said Brown had their support to stay in office.

“The speech has done the job for now, given him some breathing space,'' said Bill Jones, a professor of politics at the University of Manchester. “The international economic crisis has risen like a huge wave that has submerged Brown's own troubles.''

Brown is distancing himself from the pro-business agenda that brought Labour to power in 1997 after turmoil in financial markets forced governments in Britain and the U.S. to bail out banks. While 13 Labour lawmakers called on Brown, 57, to quit as his poll numbers slumped, the prime minister has shifted toward policies favored by traditional supporters.

“This is exactly the sort of agenda that people wanted to hear from their Labour government,'' said Dave Prentis, general secretary of the Unison union, which is the second biggest in Britain with 1.3 million members. “He set out clearly his vision for that fair society and an action plan.''

Praise From Ministers

Brown's 58-minute address to Labour's annual conference in Manchester, England, yesterday drew a four-minute standing ovation from the audience of party activists. Cabinet members and lawmakers lauded the speech, marking a contrast with the mounting criticism heaped on Brown since May when his party endured a record defeat in local elections.

“He connected with the way ordinary, hard-working, middle- income people feel right now,'' Liam Byrne, a Labour lawmaker who serves as immigration minister, said in an interview. “People will look at this and see a prime minister who is back in business.''

Brown, who succeeded Tony Blair in June 2007, urged voters to stick with his experience, rather than switch to the “novice'' David Cameron, leader of the opposition Conservative Party, which commands a 20-point lead in polls. Brown said the Conservatives remain ideologically opposed to tougher market regulation and the rescue plan that protected savings at Northern Rock Plc, the mortgage lender that sought government support a year ago.

Conservative View

The Conservatives said Brown is drawing political advantage from a banking industry crisis whose roots stretch back to his term as finance minister for a decade under Blair paydayloans.com.

“This was the same old Brown,'' said George Osborne, a Conservative lawmaker who speaks on finance. “No apology for the mess he's got the country into, no new ideas that show us how he's going to get out of it. Gordon Brown is retreating to the left to save his job.''

For now, Brown seems to have done well enough to quell concerns within his own party, according to Labour supporters and union officials. Paul Kenny, general secretary of GMB, the third- biggest union, said Brown's language was “very different to that which we have heard before'' and “welcome'' to his members.

“He has probably saved his skin,'' said Will Hutton, an author and director of the Work Foundation, which consults on policy. “He remains a problematic leader, but there is no one better in the wings.''

Miliband's Support

Miliband, 43, was accused by lawmakers of challenging Brown in July, and polls show that he is the favorite among Labour activists to take over if Brown were to step aside. He backed his leader yesterday.

“This was a strong message for David Cameron,'' Miliband told journalists after the speech, adding that Brown's “true voice came out in a very profound way today.''

Brown's trouble with his own party is by no means past.

Labour next month must fight to maintain its hold on a once- safe Parliament seat in Glenrothes, Scotland. Brown's legislation extending detention without charge for terrorism suspects faces opposition in the House of Lords. And the Treasury's autumn economic statement due by December will highlight the growing budget deficit.

Kelly May Leave

Transport Secretary Ruth Kelly may leave the Cabinet after telling Brown over the summer that she was not able to reconcile her job with her commitment to her family, the Guardian reported today.

Kelly is likely to leave in an imminent formal reshuffle of the Cabinet, at which point Chief Whip Geoff Hoon may also leave to replace Peter Mandelson as a European commissioner, according to the Guardian.

Former Home Secretary Charles Clarke, Brown's most vocal critic inside Labour, said the party can win a fourth term, though he refused to say whether that can happen under Brown.

“The immediate crisis for Brown is over, but there is another one looming,'' said Mark Wickham-Jones, a professor of politics at Bristol University. “He is not going to go this week. Nobody wants to wield the knife at the moment, and there is nobody who is clearly placed to take over.''

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Nearly 100 additional stocks, including Legg Mason Inc., were added Monday to the Securities and Exchange Commission’s list of publicly traded companies temporarily protected from short sales.

Baltimore-based Legg (NYSE: LM) joins the original list of 799 financial companies that contained several glaring omissions, which the SEC says was the result of an oversight.

“Difficulties with the classification criteria led to the omission of financial institutions falling within these categories,” the SEC said in a statement on its Website. The list now covers “banks, savings associations, broker-dealers, investment advisors, and insurance companies, whether domestic or foreign, and the owners of any of these entities.”

McLean, Va.-based Capital One Financial (NYSE: COF) was also added to the list on Monday cash advance.

Stocks temporarily barred from short sales are those that get a substantial portion of their revenue from lending, and it now also includes companies such as General Electric (NYSE: GE) and General Motors (NYSE: GM) as well.

The SEC’s emergency order barring short sales will expire Oct. 2 unless its commissioners vote to etend the rule.

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Randy Newman once famously sang that short people got no reason to live. Apparently, SEC chairman Christopher Cox feels the same way about short sellers.

The Securities and Exchange Commission’s plan to temporarily ban short selling in shares of 799 financial services companies is a bold - but highly flawed - move to try and restore confidence in Wall Street and the entire banking system.

I understand why the SEC is taking this step, but I think it sets a dangerous precedent, could create more problems than it solves and doesn’t address the fundamental problem facing bank stocks.

First off, this bet on declining stock prices is a healthy part of the financial markets. Short sellers borrow shares they don’t own and sell them, hoping to later buy them back at a lower price so they can pocket the difference.

The practice ensures an orderly functioning of the stock market - "longs" bet on the upside, "shorts" bet on the downside, and the markets move along.

Banning the practice could cause disruptions. "This is borderline insanity - if the SEC had set out specifically to make the liquidity problems worse, they couldn’t have done a better job," said William Fleckenstein, president of Fleckenstein Capital, a Seattle-based firm that specializes in short selling. "Guys that are short are like guys that are long. We’re just looking to make money."

Second, in the past few years, shorts have often identified fraudulent companies such as Enron, Tyco and WorldCom before many others saw the problems. You can argue that shorts were once again early in identifying banks that were in financial danger.

It is true that short selling may have exacerbated the problems plaguing banks. Rapidly plunging stock prices led to a crisis of confidence that fed on itself and sent prices even lower. And as I pointed out in a column last week, short sellers have been increasingly making bearish bets on banks that are not facing big credit-related problems.

But it’s not the fault of short sellers that Lehman Brothers (LEH, Fortune 500), AIG (AIG, Fortune 500), Washington Mutual (WM, Fortune 500), Wachovia (WB, Fortune 500), Merrill Lynch (MER, Fortune 500) and Citigroup (C, Fortune 500) - to name a few - have been bleeding red ink for the past few quarters.

The issue at hand is not that short selling is evil. It is that some short sellers engaged in illegal practices, manipulating the market by spreading rumors to push stocks lower.

It is such manipulation, not the practice of short selling itself, that the SEC should crack down on. The SEC’s statement about the ban lacked any mention of how the commission planned to fight fraud.

Instead, the SEC seemed to compare short sellers to kindergartners in need of a nap pay day loans. The statement Friday morning said that the temporary ban amounted to a "time-out."

What the SEC is doing is equivalent to a police department investigating a series of suspicious fires deciding that, rather than catching the crook, they’ll temporarily ban the sale of all matches in the hopes that after the ban is over, the arsonist will have decided to stop being a pyromaniac.

"What is the SEC gong to do next? Outlaw all selling?" asks Fleckenstein, who is also the author of the book Greenspan’s Bubbles.

The SEC’s ban creates a potential new problem. Between now and the end of the ban on Oct. 2, the value of many banks that deserve to be trading lower may become artificially inflated.

John Derrick, director of research at U.S. Global Investors, a money management firm based in San Antonio with about $5.4 billion in assets, said that while the SEC’s ban is a "prudent" idea for the short-term given how volatile the markets have been, he worries that there could be some very large unintended consequences.

After all, when the SEC first banned so-called "naked" short selling on a smaller group of financial stocks in July, that temporarily led to a big boost in bank stocks. That obviously didn’t last.

"Are we going to have a replay of July where we get a bounce for a few days and then you’re fighting the same battles a few months from now?" Derrick wondered.

For all the talk of capitalism now being dead given the government’s plan to likely assume much of the banking industry’s mortgage-related illiquid assets as well as the takeovers of Fannie Mae, Freddie Mac and AIG, the SEC’s action is far more ominous for those who believe in free markets.

There is ample historical precedent for the government stepping in to bailout companies deemed crucial to the nation’s economy: Penn Central Railroad, Chrysler and the Resolution Trust Corporation set up to help solve the savings and loan crisis all come to mind.

But what the SEC announced Friday is just a monumentally bad idea. Loyal readers of this column know that I am fairly optimistic about the chances for an economic and market rebound - and they often berate me for it.

However, one thing I am not is a market cheerleader or fan of excessive regulation. And at the end of the day, the SEC’s actions are highly hypocritical.

The SEC is attempting to curtail market manipulation. But it is doing so by manipulating the market. 

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As a local construction company, Alberici Corp. has benefitted greatly from the growth of St. Louis.

The company, started by an Italian immigrant, got its break renovating a Boatmen’s Bank branch office in 1918. The family’s name has been seen on cranes at countless local commercial projects, including the Edward Jones Dome and Scottrade Center.

In its 90th year of business, Alberici is riding a wave of strength. Last month, Alberici’s experience building and upgrading auto plants around St. Louis helped it win a $500 million deal to build Volkswagen Group of America’s auto plant in Tennessee.

The Overland-based company, which employs 450 people, has seen revenue growth in each of the last four years and is expecting record revenue of $1.3 billion this year.

But there are challenges on the horizon. The prospects for future construction activity are dimming with the slowing economy, and a legal dispute with St. Louis University has put into question the ownership of the company.

At any given time, Alberici is contracted or working on 125 to 150 projects in the United States, Canada and Mexico. But this year may represent the peak in the current cycle of commercial development.

"We’re seeing that projects haven’t gone away, but businesses aren’t rushing to invest in (buildings that create) productivity gains," said Greg Kozicz, the company’s chief executive and president.

Across the construction industry, demand for commercial projects is softening due to weak economic conditions. Beginning next year, the company expects its annual revenue to decline through 2011.

Alberici also has been dealing with the recent handover of the majority of its

ownership to a longtime friend of the company — St. Louis University — and a legal dispute resulting from this new relationship.

The school received a 70 percent ownership stake in the company when the company’s chairman, Gabe Alberici, died in December 2002.

After a lengthy IRS review of the gift was completed, the university declared it wanted to sell the shares. But the two sides have been unable to agree on the value of the shares and how much financial information SLU should be allowed to see.

As a result, SLU filed a lawsuit against Alberici in late April, claiming the company’s refusal to release certain financial data will keep the school from selling the shares. SLU would not comment on the suit or its relationship with Alberici.

Ideally, Alberici would prefer to buy the shares, Kozicz said. He said the company also would be comfortable if SLU were to retain ownership, which would only strengthen the long relationship between the entities.

In addition to building several projects on SLU’s campus, Gabe Alberici sat on the university’s board of trustees for 24 years and was a loyal Catholic, proudly displaying a picture of himself and the Pope in his office, according to a former colleague.

Gabe Alberici’s will did not stipulate what SLU could do with the shares or limit when they could be sold. To add to the complexity of the situation, while the 5 million shares represent 70 percent of the value of the company, they are nonvoting shares, so control of the company remains in the hands of the Alberici family and the school cannot force the company to buy back the shares.

Still, the potential for conflict with a new owner is a genuine concern for Kozicz.

"Our discomfort would be not knowing if the cultures are as good of a match as the Alberici and SLU cultures are," he said.

This is the kind of uncertainty no construction firm wants to deal with while competing for contracts in an already difficult economy, Kozicz said guaranteed payday loans.

"Our success is driven by our culture and ability to focus on what is a very challenging marketplace," Kozicz said. "To the degree there are non-core distractions that cause us not to focus on our day-to-day business, this (lawsuit) represents an additional challenge that’s not about moving the business forward."

In the spirit of moving forward, the company will not appeal the decision in the court case, Kozicz said. The lawsuit is pending in St. Louis County Circuit Court.

If the situation has been a distraction, at least one client said it has not been apparent in business dealings. For the last 18 months, Sherry Hausmann, president of SSM St. Clare Health Center, has attended weekly meetings with Alberici officials regarding the construction on the $146 million hospital the company is building near Fenton.

"I was unaware of it," Hausmann said of the suit. "They are very focused on St. Clare and providing a hospital to the community."

She added that if SSM were still hearing proposals for the hospital, the stability of the company’s ownership would be considered. Still, she said Alberici’s work on the project has been phenomenal.

The local construction community long has held Alberici in high regard. The company is a trendsetter, said Len Toenjes, president of Associated of General Contractors of St. Louis.

Specifically, Toenjes noted many of Alberici’s local jobs lead to projects in other regions and countries. Its work on local auto plants, for example, led it to set up offices in Detroit to work more closely with the Detroit Three.

That’s a model most major construction companies aim for.

"I think a lot of people here don’t realize they do way more work outside of St. Louis than in St. Louis," Toenjes said of Alberici.

Geographic diversity is the company’s safety net, Kozicz said. Alberici has developed relationships across North America to protect itself against economic slowdowns. For example, when U.S. manufacturers slowed their construction of factories and warehouses, the company found new work in Mexico, Kozicz said. Also, Canada’s booming mineral and commodity export business has created projects for Alberici in that nation.

Alberici’s current or planned projects range from a $65 million deal to build a chocolate factory for Hershey Co. in Mexico to the $1.2 billion Holcim Inc. cement plant in Ste. Genevieve County.

The company also was smart to switch from heavy dependence in construction of auto plants to develop expertise in the green building movement, Toenjes noted.

In 2005, the company established Vertegy, a subsidiary concentrated solely on designing, consulting and procuring environmentally friendly construction projects. Alberici’s goal is to employ the largest number of people certified to build projects to the highest environmental standard.

Only about six of Alberici projects in 2008 will utilize its green expertise, Kozicz said, but he noted that just five years ago, it had no such projects.

While Kozicz said the short-term prognosis for Alberici isn’t positive, he expressed confidence in the company’s historic ability to deal with adversity.

"I don’t think anybody can crystal ball the durations (of economic conditions), but all well-run companies know the boom cycles and the down cycles come and go, and you learn how to manage through them."

cboyce@post-dispatch.com | 314-340-8345

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Some Colorado-based financial institutions are among those whose stock can’t be shorted under a temporary emergency order issued Friday by the Securities and Exchange Commission.

The SEC’s action halts short-selling in 799 financial institutions until Oct. 2, in an effort to calm market turbulence. The order may be extended another 10 days past that date, the SEC said.

Denver-based bank holding companies CoBiz Financial (NASDAQ: COBZ), Guaranty Bancorp (NASDAQ: GBNK), United Western Bancorp cash advance loans. (NASDAQ: UWBK) and money manager Janus Capital Group (NYSE: JNS) are among the institutions on the list.

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The Federal Trade Commission charged five companies with making false and misleading claims for cancer cures and said Thursday that it has reached settlements with six others.

"As long as products have been sold there has been somebody out there selling snake oil to consumers," said Lydia Parnes, director of the FTC’s bureau of consumer protection.

She said the agency, along with the Food and Drug Administration and Canadian authorities, is launching a consumer education campaign warning about bogus claims for cures.

"There is no credible scientific evidence that any of the products marketed by these companies can prevent, cure, or treat cancer of any kind," said Parnes.

The products the companies marketed include essiac teas and other herbal mixtures, laetrile, black salve - a corrosive ointment - and mushroom extracts.

Douglas Stearn of the FDA said his agency is concerned that people may forego effective cancer treatments when choosing these products easy payday loans. In addition, he said, some of these unproven products may have dangerous interactions with other drugs.

"We would urge folks to talk to their doctors," said Stern.

Parnes said more than 100 warning letters were sent out and many advertisers dropped or changed their claims.

Of the complaints resolved by settlements, she said companies paid restitution ranging from $9,000 to $250,000.

The remaining five complaints of false and deceptive advertising will go before administrative law judges, she said.

Those cases are Omega Supply, San Diego, Calif.; Native Essence Herb Company, El Prado, N.M.; Daniel Chapter One, Portsmouth, R.I.; Gemtronics, Inc., Franklin, N.C., and Herbs for Cancer, Surprise, Ariz. 

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Hurricane Ike’s rampage over oil production facilities in the Gulf of Mexico and Texas did not seriously disrupt statewide petroleum inventories, but that hasn’t stopped numerous reports of price gouging and gas stations going dry.

On Wednesday, the pumps were dry at a BP station on South Congress Avenue in West Palm Beach. Handmade signs stuck to pumps read “No gas.”

The pumps at the nearby Mobil station went dry last Friday at 6 p.m. and didn’t come back online until 8 p.m. the following night.

“Everybody came and bought gas Friday morning,” said station employee

Christian Burgos.

Jim Smith, President and CEO of the Florida Petroleum Marketers and

Convenience Store Association, said panic buying resulted in an “unprecedented demand” for fuel from Sept. 11-13. Now fuel trucks can’t get gas from distribution points to gas stations fast enough.

“Everybody saw excessive demand from Pensacola to Key West,” he said, but he couldn’t offer specific data since his organization doesn’t track that.

“Stabilization is going to happen through the trucking companies, but you can’t run those guys 24 hours a day,” Smith added.

According to a spokeswoman for the Florida Department of Environmental Protection, which monitors statewide fuel inventories when extreme weather threatens, the fuel supply was adequate throughout the recent spate of storms.

At Port Everglades, which provides fuel to a 12-county area and is the only South Florida seaport with petroleum storage facilities, fuel shipments are at capacity, said port spokeswoman Ellen Kennedy. The port can handle four fuel tankers at once and that’s the number that was docked on Wednesday freecreditreport. Shipments should remain high in the coming days, too, she said.

Sixteen percent of the gas delivered to Port Everglades comes from Texas, Kennedy said. However, “what typically happens if there’s trouble in the Gulf or Texas is the oil companies make it up with foreign oil,” she added.

David Mica, executive director of the Florida Petroleum Council, said inventories have been adequate throughout Florida, although it’s been challenging to overcome the shortfall due to Gulf refineries going offline.

About 30 percent of domestic oil production and 27 percent of refining capacity comes from the Gulf region. Some of Florida’s disrupted supply can be made up from foreign sources such as Caribbean refineries, he said. However, Mica declined to comment on how this dynamic may impact fuel prices.

By late Wednesday afternoon, the state attorney general’s office had fielded approximately 5,500 calls related to gas issues and had forwarded just under 2,400 to its Economic Crimes Division to be scrutinized for possible price gouging. The number of calls coming in has remained steady since Friday morning, said Sandi Copes, spokeswoman for the attorney general.

Palm Beach topped the number of complaints in South Florida with 93. Broward had 63 and Miami-Dade had 58 as of Wednesday evening.

As part of its inquiry, the attorney general has issued subpoenas to four companies so far.

As part of an emergency order issued in advance of Hurricane Ike, the Florida Department of Transportation relaxed regulations for petroleum trucks, a move hoped to ease delivery problems.

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SanDisk Corp. said Tuesday it had rejected a $5.85 billion takeover offer from Samsung Electronics Co. Ltd after its board determined the deal was "inadequate in multiple respects."

SanDisk (SNDK)’s shares shot up $7.81, or 52%, to $22.85 in after-hours trading after ending the regular session up 63 cents at $15.04.

Samsung, in turn, said it had reiterated its $26-per-share cash offer for Milpitas-based SanDisk.

In letter to SanDisk’s board dated Sept. 15, Samsung Chief Executive Officer Yoon-Woo Lee said that after four months of negotiations, SanDisk "continues to cling to unrealistic expectations on both its standalone market value and an appropriate merger price."

But SanDisk shot back, saying the price offered by Samsung undervalues the maker of flash storage and memory cards used in digital cameras, cell phones and other electronics.

SanDisk said Samsung had indicated that "it might be willing to pay a significant premium" to SanDisk’s closing price of $28.75 per share on May 22, 2008, which it said was the date Samsung first approached SanDisk about a possible deal.

Samsung’s offer "is an opportunistic attempt to take advantage of SanDisk’s current stock price," the SanDisk statement said.

South Korea-based Samsung, however, noted that its $26-per-share offer represents a 93% premium over SanDisk’s closing share price of $13.46 on Sept free credit report instantly. 4, the day before media reports of a possible deal surfaced.

Samsung makes NAND flash memory used in digital devices such as cameras and music players, as well as DRAM, or dynamic random access memory, chips used in personal computers.

In his letter, Lee said a merger with Samsung would help insulate SanDisk from deteriorating market conditions in the flash memory market, which faces oversupply and deep pricing pressure, as well as weakening consumer spending. 

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