Finance & Business World

Intensifying friction over currencies and trade loomed Wednesday as leaders of major economies converged on Asia for back-to-back summits aimed at safeguarding the still fragile global recovery.

President Barack Obama and other top leaders were arriving in Seoul, South Korea, for a two-day Group of 20 summit with the ambitious agenda of remaking the world economy to nurture stable growth and prevent a repeat of the financial meltdown in 2008.

But that gathering, and a weekend summit of Pacific Rim leaders in the Japanese port city of Yokohama, are taking place as those nations struggle to reconcile conflicting strategies for achieving those aims.

G-20 officials _ whose countries comprise 85 percent of all economic activity _ have pledged not to use their currencies as trade weapons. But tensions reignited last week when the U.S. Federal Reserve announced a $600 billion bond buying plan that angered many trading partners.

Obama, wrapping up a brief visit to Indonesia after touring India, defended the Fed’s move as a way to hasten a narrowing of huge gaps in trade and investment by engineering a weaker U.S. dollar _ thus putting pressure on countries with large trade and foreign exchange surpluses.

Other countries complain excess cash may flood into their markets seeking higher returns, pushing their currency values higher, squeezing their exporters and inflating bubbles in stocks or other assets that could destabilize their financial systems.

G-20 financial officials made little headway Wednesday in resolving the currency standoff, a summit spokesman, Kim Yoon-kyung, told reporters in Seoul.

“Critical agendas, such as establishing a clear guideline on limiting current account surpluses and deficits to sustainable levels and recent moves by Washington to print more money, were put on the table, but only highlighted differences between member countries,” Kim said.

Such issues were left unresolved to allow work on other issues that must be included in a declaration at the summit’s end, he said.

The G-20 first convened a leaders summit two years ago and has since supplanted the Group of Seven advanced nations as countries like China and India gained economic and political stature in their own right.

The aim is to craft a new global economic order to replace one powered by the U.S. running huge trade deficits while countries like China, Germany and Japan accumulate vast surpluses. One U.S. proposal, for example, calls for setting guidelines for when such imbalances might become potentially destabilizing.

China announced Wednesday that its trade surplus surged to its second-highest level this year in October, raising pressure on Beijing over its currency, which the U payday lenders.S. and other trading partners say is kept artificially weak, making its exports more competitive overseas.

Beijing maintains that the focus on its currency policies is misplaced.

If either side “chooses a confrontational approach, I think everybody will come out as losers,” said Vice Foreign Minister Cui Tiankai, an envoy to the Seoul talks.

On less somewhat less confrontational issues, the G-20 leaders are expected to endorse beefing up supervision of financial institutions and to voice support for giving developing countries more say in the International Monetary Fund.

In Yokohama, trade and foreign ministers of the Asia-Pacific Economic Cooperation forum were mulling moves toward a Pacific-wide free trade zone that would encompass more than half the world’s economic output.

“We are quite committed to that. We believe that open trade is indispensable to overcome the financial crisis and the economic crisis,” Mexican foreign minister Patricia Espinosa said on the sidelines of the meetings.

A failure to cooperate, rather than renewed financial woes, is the biggest threat, warned a report issued Wednesday by the Pacific Economic Cooperation Council, an APEC advisory group.

Debt troubles in Europe, weak U.S. growth and tensions over trade are clouding the global outlook and contributing to an “unprecedented crisis atmosphere,” the report said, citing a survey of 422 regional opinion leaders.

The report urged APEC to carry though with reforms needed to ensure more balanced, sustainable and equitable growth as the group reviews its progress toward the still unfulfilled goal, set in 1994, of achieving free trade and investment among developed members by 2010.

A regionwide arrangement, dubbed the Free Trade Area of the Asia-Pacific, could help untangle a slew of bilateral and regional agreements, and by lowering trade barriers, could boost growth.

A building block of that plan is a U.S.-backed free trade agreement called the Trans-Pacific Partnership. It now includes only four small economies _ Brunei, Chile, New Zealand and Singapore _ but the U.S., Australia, Malaysia, Vietnam and Peru are in talks to join them.

Though such moves could hurt farmers in South Korea and Japan who are outraged at the prospect of losing protective high tariffs, host Tokyo says it favors moving toward freer trade.

“In many ways, Japan has fallen behind the wave of creating freer economies,” Japanese Prime Minister Naoto Kan said Tuesday. “I think it’s time to steer once again toward opening the country.”

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Albuquerque and Santa Fe are being allocated a total of $118,000 in federal grants to improve local farmers’ markets, and expand access to them by more low-income families.

The money is from the U.S. Department of Agriculture’s 2010 Farmers Market Promotion Program.

The city of Albuquerque will receive $63,914 to establish a sales and marketing organization to help create a permanent indoor/outdoor growers’ market in the city.

The Santa Fe Farmers Market Institute will get $54,086 to improve the Santa Fe Farmers Market with professional development workshops and consumer education. About $4,000 will be used to promote the existing electronic benefits program, which makes it possible for recipients of the Supplemental Nutrition Assistance Program and the Special Supplemental Nutrition Program for Women, Infants and Children to use assistance funds to purchase locally grown fresh fruits and vegetables.

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The foreclosure crisis has entered a new phase: The number of properties entering the foreclosure process has dropped, and now nearly matches the number of repossessions.

The number of homeowners falling enough behind on their loans to attract initial notices of default was down 30% in August, RealtyTrac said Thursday. Eventually, that should translate into fewer people losing their homes.

But lenders repossessed more than 95,000 homes — a record — and that was up from 76,000 a year ago.

RealtyTrac spokesman, Rick Sharga, said the initial default rate should be higher, given the numbers of borrowers who have missed one or two payments. Normally, when a third payment is missed, lenders take immediate action.

"It appears that lenders are allowing delinquencies to go on longer before they issue notices of default," he said.

Lenders may delay filing for a couple of reasons. In some cases, a notice of default puts lenders on the clock; regulations force them to foreclose within a certain time frame, sometimes before they want to.

Second, borrowers might vacate their homes when they receive default notices, leaving the houses empty, subject to vandalism, and forcing lenders to take over the expense of maintaining them.

However, once lenders have begun the initial foreclosure process, they are moving quickly to repossession.

That’s in part because as housing markets have improved, as it has in California, lenders are able to resell foreclosed homes more quickly and avoid further losses payday loans direct lenders.

In other markets, according to Sharga, they may take homes back but not necessarily put them on the market again right away. That may represent a deliberate effort to manage the flow of foreclosures to prevent further erosion of home prices.

Not only would a flood of properties and lower prices hurt lenders’ profits, it would leave more mortgage borrowers owing more than their homes are worth. As more homeowners plunge underwater, more would default, causing a new round of home price drops and still more foreclosures.

For the 44th straight month, Nevada led all states in the rate of foreclosure filings. One in every 84 households there received some kind of filing during the month, more than four times the national average.

The other "sand states," Florida (one in 155 households), Arizona (one in 165) and California (one in 194) followed in a familiar foreclosure pecking order.

All of the top 10 metro area hot spots recorded drops in foreclosure activity during August. In the worst hit city, Las Vegas, filings dropped 25% year-over-year but still came to one for every 73 households.

Modesto and Stockton, both medium-sized cities in California’s Central Valley, closely trailed Las Vegas in filing rate. Rounding out the first five metro areas were Cape Coral and Miami. 

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Top officials from National Fuel Gas Co. will be on Wall Street Wednesday, July 21 to ring the closing bell at the new York Stock Exchange.

The Williamsville-based energy company (NYSE: NFG) will celebrate 55 years as a listed company by ringing out the day’s trading at 4 p.m.

“The NYSE has long been a home to many of the world’s leading publicly traded companies and we are pleased to celebrate 55 years along side many of these respected businesses with a history as long as ours,” said a statement from CEO David Smith, who will lead the senior management team.

National Fuel was incorporated in 1902.

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As public outrage over Wall Street bonuses fades a bit in the United States, the European Parliament on Wednesday approved tough new rules that limit bankers’ bonuses and align compensation with long-term financial performance.

The new rules are more rigid than any steps the U.S. has taken to regulate pay practices within the financial industry and highlights a growing divide between U.S. and E.U. policy on this key issue.

Under the new rules, upfront cash bonuses to European bankers will be capped at 30% of the total bonus, and 20% for "particularly large" bonuses. The rules also require that up to 60% of any bonus be deferred for at least three years and allow for part of it to be recovered if investments underperform. At least half must be paid in "contingent capital" and shares.

The rules are subject to a vote by the European Council and would go into effect next year. They would apply to U.S. banks based in Europe as well.

"These tough new rules on bonuses will transform the bonus culture and end incentives for excessive risk taking," said Arlene McCarthy, a British member of the European Parliament who championed the rules. "Since banks have failed to reform we are doing it for them."

By contrast, the financial reform bill passed by the House last month does not contain provisions that would cap bankers’ bonuses. President Obama is expected to sign the bill into law this month assuming it also passes in the Senate.

The bill does require industry regulators to draft their own set of rules aimed at eliminating risky pay practice among banks and other financial firms. The Federal Reserve, in conjunction with other regulators, has already issued guidance along those lines.

In addition, the bill would impose new rules for how all publicly-traded companies pay top executives. Shareholders will be given a nonbinding advisory vote on how top executives are paid while in office. Shareholders also get a nonbinding advisory vote on executives’ outsized severance payments, or so-called "golden parachutes."

Critics say more needs to be done to limit the size of Wall Street bonuses, arguing that skewed compensation practices helped bring on the financial crisis pay day advance.

"The problem isn’t only how pay is structured," said Sara Anderson, an executive compensation expert at the Institute for Policy Studies. "It’s the size of pay that is still an issue."

Scott Talbott, head lobbyist for the Financial Services Round Table, supported steps to limit excessive risk taking, but said imposing uniform caps on bonuses across the industry is a mistake.

"Placing a hard cap on compensation is the wrong approach. The problem is that each employee and each company is different," he said. "One size doesn’t fit all. U.S. policymakers are right on this."

He added that many financial services companies in the United States and abroad have already taken steps to ensure that compensation practices are aligned with the interests of customers and shareholders.

Still, the piecemeal approach to regulating Wall Street bonuses in the United States is surprising given the wave of public anger that developed in the wake of the financial crisis.

The issue came to a head in March 2009 after AIG (AIG, Fortune 500) paid employees a total of $165 million in bonuses despite the fact that the giant insurance company had to be bailed out by taxpayers.

But the groundswell of anger and frustration gave way to a sense of "disempowerment" as the debate over Wall Street reform dragged on, Anderson said.

In addition, the health care reform bill and the massive oil spill in the Gulf of Mexico has also diverted some public rage from the financial services sector.

That could change, Anderson said, as the economic recovery falters and the gap between rich and poor Americans continues to widen.

"With the increasing disconnect between the people at the bottom and the people at the top, the public outrage factor could increase," she said. 

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As BP Plc’s costs to clean up the oil spill in the Gulf of Mexico rise to more than $3 billion, the company is asking partner Anadarko Petroleum Corp. to help foot the bill.

The London oil giant has so far billed The Woodlands-based Anadarko (NYSE: APC), which holds a 25 percent stake in the Macando well, for $272 million, according to the Associated Press. It also reportedly is charging Mitsui, which holds a 10 percent interest in the well, for $111 million.

In mid-June, Anadarko Chairman and Chief Executive Jim Hackett declared that the April 20 explosion on the Deepwater Horizon and subsequent oil spill was a preventable tragedy and “the direct result of BP’s reckless decisions and actions.”

IHe went on to say that Anadarko should not have to pay for BP’s failure to drill the well in a “good and workmanlike manner.”

Anadarko, according to AP, is evaluating the bill from BP and assessing its contractual remedies payday loan.

Anadarko, along with all the spill-related companies, has seen its stock plummet in the wake of the disaster. Shares closed on July 2 at $38.07, down sharply from $73.79 on April 20, the day of the explosion.

For its part, BP said on July 5 that the cost of the spill response to date now totals about $3.12 billion. A new ‘super skimmer’ is being tested in the Gulf but efforts have been hampered from rain and wind resulting largely from Hurricane Alex. To date, clean-up operations have recovered in total about approximately 673,497 barrels, or 23.5 million gallons, of oily liquid.

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

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Shoemaker K-Swiss Inc. has struck a two-year sponsorship deal to put its brand in about 100 high schools in the four markets, including Pittsburgh. That's according to a new report in Street & Smith's SportsBusiness Journal, a sibling publication of the Pittsburgh Business Times.

Home Team Marketing, a Cleveland-based agency that has aggregated high school rights across the country, sold the deal to K-Swiss. Specific terms were not released, but K-Swiss’ total spend is expected to approach $1 million over two years. The other markets included in the deal are Dallas, Houston and Los Angeles .

David Nichols, executive vice president at K-Swiss, described 2010 as a test program with about 100 schools. In 2011, the list of high schools will grow to about 1,000 in most every major U.S. market. The four markets were selected for the 2010 program to provide a variety of large and small markets that cover the East and West, he said.

The deal provides California-based K-Swiss with branding and signage in the schools’ athletic facilities and hallways. K-Swiss will make a donation of $600 to each school involved in the program this year. There’s also a fundraising component that allows 10 percent of K-Swiss sales to go back to the schools.

K-Swiss (Nasdaq:KSWS) has been known for its tennis shoes and apparel since its founding in 1966, when it made the first all-leather tennis shoe.

“We’ve remained in high-performance tennis shoes, but we’re not really in basketball or the cleats,” Nichols said. “As we’ve moved in the last few years into high-performance running and fitness shoes, we saw this as an opportunity to have an unfiltered voice straight into the high schools.”

For the full report, visit SportsBusinessJournal.com

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Valley diners can help the Southwest Center for HIV/AIDS as part of a statewide and national effort called 2010 Dining Out For Life.

Restaurants from downtown’s Carly’s Bistro and Cartel Coffee Lab to Fez, Over Easy and Trader Vic’s at the Hotel Valley Ho in Scottsdale, will participate in the event.

Dining Out for Life will be held April 29, and will take place across Arizona and nationally as part of the ongoing effort to fight HIV/AIDS.

Participating restaurants will donate a portion of the day’s proceeds to support efforts in fighting the disease.

In the Valley, efforts will benefit the Southwest Center for HIV/AIDS and Northland Cares in northern Arizona quick pay day loan.

Founded in 1991, the Dining Out For Life concept was created by an AIDS volunteer in Philadelphia.

Celebrity Ted Allen, host of Food Network’s “Chopped” and “Food Detectives" shows, as well as actress Pam Grier, are lending their support to help publicize the event. Since its inception, the effort has helped raised more than $3 million for HIV programs each year.

For more information, go to www.diningoutforlife.com or www.swhiv.org.

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Suspended Miami Commissioner Michelle Spence-Jones was not in circuit court Thursday for her arraignment. Instead, her attorney asked the judge to dismiss criminal charges against her.

Attorney Peter Raben told the court that the Miami-Dade state attorney’s office did not provide enough information in its indictment to allow his client to enter a plea.

Spence-Jones was indicted March 3 on a bribery charge for allegedly soliciting $25,000 from Miami developer Armando Codina. In 2006, Codina asked the city commission to extend Brickell Avenue to downtown Miami’s core. Codina’s company was managing office leasing for a mixed-use project in downtown Miami that would have benefited from the name change.

“The indictment doesn’t say who was solicited,” Raben told the Business Journal Thursday afternoon. “In the media advisory, it says it was [Armando] Codina. But, Codina said, ‘It wasn’t me.’ So give me some help here.”

Raben said Spence-Jones ultimately will plead not guilty

Some former prosecutors and defense attorneys say prosecutors will have a hard time making the bribery charge stick because Codina has denied he bribed Spence-Jones bad credit personal loan lenders. The former commissioner also has denied any wrongdoing.

Another March 3 indictment in a separate case alleges Spence-Jones misappropriated $50,000 in grant money meant for a private business. She also denied any wrongdoing in that case.

The state attorney’s office did not have time to prepare for Spence-Jones’ motion Thursday, so Circuit Court Judge Yvonne Colodny told both parties to come back and make their case on March 30.

Spence-Jones was suspended after winning re-election in November and again after a special election that followed to fill the seat she vacated as a result of the suspension. She is still fighting the suspension in circuit court.

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Aqua America Inc. posted nearly flat income on a revenue increase in the fourth quarter, as earnings per share met analysts’ estimates and revenue did not.

The Bryn Mawr, Pa.-based water and wastewater utility holding company earned $26.7 million, or 20 cents per fully diluted share, in the quarter. The average estimate of eight analysts polled by Thomson Reuters was that it would earn 20 cents per share in the quarter. It earned $25.7 million, or 19 cents per fully diluted share, in the fourth quarter of 2008.

Aqua America’s revenue in the quarter was $167.9 million, up from $159.8 million in the fourth quarter of 2008. The average revenue estimate of six analysts polled by Thomson Reuters was $176 cash advance america.2 million.

In all 2009, the company earned $104.4 million, or 77 cents per fully diluted share, on revenue of $670.5 million. All the figures were increases from 2008, when Aqua America (NYSE:WTR) earned $97.9 million, or 73 cents per share, on revenue of $627 million.

Nicholas DeBenedictis, the company’s chairman and CEO, said in Aqua America’s earnings press release that he expected its earnings to continue to rebound in 2010, supported by an improving economy, a return to normal weather patterns and the successful completion of rate cases it has pending.

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