Finance & Business World

The International Monetary Fund stands ready to help Ireland if needed, its managing director said, as market concern about the country’s debt crisis continues.

“Everybody knows that the situation with Ireland, it’s a difficult situation,” IMF Managing Director Dominique Strauss- Kahn told reporters today in Yokohama, Japan. “So far I haven’t received any kind of request. I think they can manage well. If at one point in time, tomorrow, in two months or two years, the Irish want support from the IMF, we will be ready.”

In a conference call of European Central Bank officials around noon Frankfurt time yesterday, Ireland was pressed to seek outside help within days, said a person briefed on the discussion who spoke on condition of anonymity.

Ireland could draw on the 60 billion euro ($82 billion) segment of the broader 750-billion-euro fund set up by the European Union and International Monetary Fund in May, Irish state broadcaster RTE said, without saying where it obtained the information. The smaller pool is funded directly by the European Commission, the EU’s Brussels-based executive branch.

Bailing out Ireland’s financial system could cost as much as 50 billion euros under a “stress case” scenario compiled by the Finance Ministry and central bank. The country’s gross funding need for 2011 will be 23.5 billion euros, falling to 18.6 billion euros in 2014, the nation’s debt agency said yesterday.

Irish bonds rose from a record low yesterday, gaining for the first time in 14 days as traders bet a bailout was near.

Strauss-Kahn, who is attending this weekend’s Asia-Pacific Economic Cooperation forum, also told reporters today that Ireland’s debt problems are mostly linked with “one big bank” and are different from those of Greece.

“It’s not the same thing as Greece’s problem,” which was caused by a lack of economic competitiveness in addition to fiscal woes, he said.

The Irish government nationalized Anglo Irish Bank Corp. in January 2009 as loan losses spiraled. The government also has taken a 36 percent stake in Bank of Ireland Plc and is preparing to take a majority stake in Allied Irish Banks Plc.

EU countries established the bailout fund in May to protect the euro area from the fallout of the Greek-led debt crisis. Speculation has grown that Ireland would need it after a housing-led recession and the need to save its biggest lenders plunged it into fiscal turmoil.

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Charles Schwab Corp. is buying a nine-acre parcel of land from the city of Phoenix that could help create 400 new jobs.

The new land will be used to facilitate job growth at Schwab’s main location near 24th Street and Lincoln Drive, dubbed the Peak Campus. The financial services company is paying $2.06 million for the land, according to Phoenix economic development program manager Bruce MacTurk.

The deal is expected to close in the spring and Schwab will use the land for surface parking. The new parking should be ready by third quarter 2011.

“We are at our capacity for parking. We’re running shuttles from temporary locations,” said Schwab Chief Financial Office Joe Martinetto.

Schwab has about 3,200 employees locally, making it one of the largest private employees in the Valley. The company intends to hire 200 employees by the end of the year and 400 more jobs in the next several years. About one-third of Schwab’s employees are located at a South Mountain campus near 48th Street and Baseline Road. The rest are at the 24th Street location.

Schwab’s operations in Phoenix are its largest in the country.

“We’ve found that Phoenix is a great place to fill jobs. It’s an educated, diverse work force. We’ve had great success there,” Martinetto said.

Currently a Phoenix police precinct is located on the land Schwab will acquire. The city is building a new precinct nearby, which should be ready in February. After the police move, the old precinct building will be razed and the sale will be consummated. The price of the land was based upon an independent appraisal, MacTurk said.

He said it’s a good deal for everyone, and should create new jobs in Phoenix.

“We’ve had a longstanding relationship with Schwab for some 18, 19 years,” MacTurk said.

The company opened a service center in Phoenix in 1992. It purchased the Peak Campus in 1995.

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Yahoo Inc. CEO Carol Bartz will be interviewed at the USA Today CEO Forum held at Georgia State University on Wednesday.

Bartz will be interviewed by David Lieberman, USA Today senior media reporter for the Money section, at 3 p.m. in the Student Center Ballroom. The event is free and open to the public.

Lieberman will have a 75-minute interview with Bartz, asking about her road to the top, key milestones in her career, thoughts on leadership and future plans for the road ahead. A question and answer session with the audience will follow the interview no fax payday loans.

“This is an excellent opportunity for our working professional students to hear one of the foremost CEOs in the nation interviewed by one of USA Today's best money reporters,” said H. Fenwick Huss, dean of the Robinson College of Business. "This interaction, coupled with audience questions, will provide our students with insights they can take back to the classroom and into the workplace.”

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Former Hewlett-Packard Co. CEO Mark Hurd is in talks with Oracle Corp. about taking a high-level executive position, it was widely reported Sunday. Hurd resigned last month under pressure, amid allegations of sexual harassment and falsified expenses. Oracle CEO Larry Ellison has been among his strongest supporters, saying in an earlier email to the newspaper that Hurd’s ouster “was the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago.”

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Commercial air traffic at Portland International Airport dipped .4 percent in June to 1.2 million over the same period a year earlier. For the year, traffic is off 2.7 percent.

International traffic is posting the biggest declines. The number of international passengers moving through PDX was down 5.7 percent in June and is off 19.1 percent for the year. Much of that can be attributed to Deutsche Lufthansa AG’s decision to ground its six-year-old Portland-to-Frankfurt nonstop service last September. Domestic traffic was down just .4 percent for June and is off 2.1 percent year-to-date.

Of PDX’s big three, only Alaska Airlines saw increased traffic from a year ago, with 179,280 passengers in June compared to 151,175 last year no faxing payday loan. Seattle-based Horizon Air, PDX’s busiest carrier, reported a 6.6 percent decline in year-over-year monthly traffic, while traffic on Southwest Airlines of Dallas dropped 4.1 percent.

Freight moved by PDX carriers was up 5 percent from a year ago to 16,204 in June, though for the year to date the number dropped 6.1 percent to 204,485.

Nationally, U.S. carriers are faring well. The Air Transport Association of America reports that passenger revenue was up 25 percent in June over a year earlier, the sixth consecutive month of revenue growth.

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The Epilepsy Foundation of the St. Louis Region is merging with the Epilepsy Foundation of Kansas and Western Missouri, which is based in Kansas City, Mo.

Both are affiliates of the national Epilepsy Foundation, which approved the merger.

The newly merged entity, named the Epilepsy Foundation of Missouri and Kansas, will have an administrative office in St. Louis and an office in Kansas City, with intention to expand into Kansas within the next two years, according to Darla Templeton.

Templeton, who was president and CEO of the St. Louis chapter, will take those roles in the new merged group.

Because of the economy, donations and funding are down, she said. “We thought if we merged, we could streamline and be more efficient and effective with just one executive director or CEO for both,” Templeton said.

She said the board of the Kansas City-based group had gone through a series of executive directors, and “from their perspective, without a very positive results.”

The Kansas City group has been without an executive director since April 2009.

In April, the Epilepsy Foundation of Kansas and Western Missouri sued its former executive director, Sean Taylor, claiming he diverted about $80,000 of foundation funds for his own use, according to the suit. Seema Chawla, an associate with Bryan Cave in Kansas City representing the foundation, confirmed Friday that the suit is pending.

David Gitt, formerly on the board of the St. Louis chapter, will chair the new, merged board, which will number 16.

The operating budget for the combined chapters is about $700,000, Templeton said.

The St. Louis affiliate is accredited by Commission for Accreditation of Rehabilitation Facilities and holds the seal of the Better Business Bureau, the group said. Both organizations are members of United Way.

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The developers of Salpare Bay, the failed luxury condominium project on Hayden Island, expect to file for bankruptcy by June 4.

The bankruptcy plan, disclosed in a federal lawsuit against the lenders on the $100 million project, would occur in time to stop a sheriff’s auction of the property to satisfy a $4.4 million judgment won by builder J.E. Dunn Northwest Inc. for its work on the project in 2007.

Attorney Christine Kosydar, who has represented majority owner Michael DeFrees and minority owner George Killian, revealed plans to file for bankruptcy on or before June 4 in papers disclosing a conflict between the pair. Kosydar sought court permission to withdraw as Killian’s legal counsel because of the dispute.

The document did not disclose whether the bankruptcy petition would be filed under Chapter 7 (liquidation) or Chapter 11 (reorganization) of the U.S. Bankruptcy code.

DeFrees and Killian are seeking $390 million from 40 lenders who brought the project to a halt when they declined to fund a $63.6 million loan.

A bankruptcy petition would add another legal wrinkle to a vast case that already has spawned what’s thought to be the largest legal negligence case ever filed in Oregon. The 40 lenders have sued law firm Sussman Shank LLP in Multnomah County Circuit Court for $447 million, saying its counsel led them to decline to fund the loan and exposed them to liability to DeFrees and Killian.

Sussman Shank counters that it represented the one bank that is not part of the case.

The Multnomah County Sheriff’s Department auction, which covers both the condominium property and associated marina, is currently scheduled for 10 a.m. June 4 on the courthouse steps.

Also pending on the Salpare Bay calendar: U.S. District Court Judge Michael Hogan has scheduled a mediation session in the developer-lender cases for 9 a.m. June 2 in his chambers.

Salpare Bay, 449 N.E. Tomahawk Island Drive, offered buyers the chance to live next to the Columbia River in luxurious condominiums and first-class marina accommodations. The 204-unit project has languished since mid-2007.

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Alan Greenspan acknowledged Thursday that U.S. regulators had failed to grasp the magnitude of the financial crisis, but the former Federal Reserve chairman argued that low interest rates were not to blame for inflating the housing bubble.

In a paper he is due to deliver at the Brookings Institution on Friday, Greenspan, who was Fed chairman from 1987 to 2006, examines the factors that caused the global financial crisis and plunged the U.S. economy into one of the worst recessions on record.

Greenspan said the relatively minimal fallout from the bursting of the dot.com bubble in 2000 led regulators to believe that future asset bubbles would pose a limited risk to the economy.

He also blamed financial firms for relying too heavily on the recomendations of ratings agencies and their own risk management offices during the boom years, when investment banks leveraged billions of dollars worth of assets, including mortgage backed securities, that later proved to be worthless.

"In the growing state of high euphoria, risk managers, the Federal Reserve, and other regulators failed to fully comprehend the underlying size, length, and impact of the negative tail of the distribution of risk outcomes," Greenspan wrote.

"For decades, with little to no data, most analysts, in my experience, had conjectured a far more limited tail risk," he continued. "This is arguably the major source of the critical risk management system failures."

But the former Fed chief was clear that the low interest rate policy the central bank maintained during his tenure did not inflate the housing bubble that ultimately precipitated the crisis, as many critics have argued.

"To my knowledge, that lowering of the federal funds rate nearly a decade ago was not considered a key factor in the housing bubble," he said. "The global house price bubble was a consequence of lower interest rates, but it was long term interest rates that galvanized home asset prices, not the overnight rates of central banks."

To explain the decline in long-term interest rates, Greenspan argues that the explosive growth of developing economies, particularly in Asia, in the aftermath of the Cold War led to global imbalances and a surplus of liquidity instant payday loan.

Despite his admission that regulators failed to adequately comprehend the crisis, Greenspan offered a word of caution when it comes to imposing new regulations aimed at preventing future crises.

"Inhibiting irrational behavior when it can be identified, through regulation, as recent history has demonstrated, could be stabilizing," he said. "But, there is an inevitable cost of regulation in terms of economic growth and standards of living when it imposes restraints beyond containing unproductive behavior."

The most important reforms that regulators could make, according to Greenspan, would be to limit the amount of risk financial institutions are allowed to take and increase banks’ capital requirements.

Greenspan also pointed to the risks posed by large, interconnected financial institutions to the overall economy. AIG, the giant insurance company, is perhaps the most famous of these "too-big-to-fail" institutions to have been bailed out by regulators because the company’s collapse could have caused major damage to an already fragile economy.

However, the Maestro, as Greenspan is known, had this to say about the too big to fail problem: "Systemically threatening institutions is among the major regulatory problems for which there are no good solutions."

"The notion that risks can be identified in a sufficiently timely manner to enable the liquidation of a large failing bank with minimum loss, has proved untenable during this crisis and I suspect in future crises as well," he said.

Still, Greenspan said banks with the potential to become too big to fail should be required to issue bonds that could be converted into equity stakes if capital levels fall below a certain threshold.

But if that fails to reign in excessive growth, "we should allow large institutions to fail," he said. If regulators determine that an institution is to big to liquidate quickly, it should be taken in to "a special bankruptcy facility" where it will be broken into smaller entities, Greenspan said.  

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The debate over gun control is heating up at Starbucks.

Gun owners bearing arms have been gathering at various Starbucks locations in states where it’s legal to do so in public. That’s sparked protests from gun-control advocates and kudos from pro-gun groups.

The coffee chain says that its stores simply abide by state laws, and it is legal to carry weapons in 43 states. But businesses have the right to prohibit customers from carrying guns in their establishments despite state laws, and that’s the crux of this particular dust-up.

"While we deeply respect the views of all of our customers, Starbucks’ long-standing approach to this issue remains unchanged," the company said in a statement. "We comply with local laws and statutes in all the communities we serve."

Starbucks (SBUX, Fortune 500) said the gun-toting gatherings first began at its stores in Northern California after two other chains, San Francisco-based Peet’s Coffee & Tea and California Pizza Kitchen, put policies in place to prevent gun owners from carrying firearms in their stores.

The Brady Campaign to Prevent Gun Violence then wrote a letter to Starbucks CEO Howard Schultz, urging Starbucks to enforce a similar policy. On its Web site, the Brady Campaign is soliciting supporters through an online petition that urges Starbucks to offer "espresso shots, not gunshots" and reverse its corporate policy.

On the other side of the debate, gun rights advocates are pleased with Starbucks’ decision. Forum members of OpenCarry.org, a pro-gun Internet community with nearly 28,000 members, are posting that they are "impressed" with Starbucks’ stance and will regularly buy the company’s coffee to show support.

Starbucks said if it were to adopt a policy prohibiting customers from carrying guns in states where it is legal to bear firearms, that would require its employees to ask law abiding customers to leave stores, putting them in an unfair and potentially unsafe position.

The company also said the gun-control debate belongs in the legislatures and courts, not at its stores.

"Advocacy groups from both sides of this issue have chosen to use Starbucks as a way to draw attention to their positions," the company said. "As the public debate continues, we are asking all interested parties to refrain from putting Starbucks or our partners in the middle of this divisive issue."  

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Don’t close the coffin on Saab just yet.

Spyker, a Dutch maker of exotic cars, said Sunday that it had made a new offer to General Motors for the Swedish car brand.

GM announced on Friday that it would let the brand die after it had failed to reach a deal with potential buyers, including Spyker and Swedish carmaker Koenigsegg.

Early Sunday, Spyker Chief Executive Victor Muller said the company had submitted a proposal that addresses the issues that had hung up a deal.

"Despite our collective 11th-hour set-back, we are returning to the table with a renewed offer, that addresses every known issue brought to light during the initial negotiations and that has the full backing of the Saab management," Muller said in a statement.

"Our efforts are based on our passion for saving an iconic brand that we would be honored to shepherd, and the jobs and livelihoods of thousands of loyal Saab employees, suppliers and dealers around the world," he added.

Some 3,400 employees globally would be directly affected by Saab’s closure, according to GM spokesman Chris Pruess.

In a statement on Sunday, GM said it had "received inquires from several parties" following Friday’s announcement. The company added that it would "evaluate each inquiry."

Spyker’s offer is set to expire Monday at 5 p.m. ET.

Saab has never been a big-selling car brand, but the recent global recession and news of the brand’s possible demise have driven sales down to crisis levels. Saab’s U.S. sales have fallen by more than half so far this year.

Sweden’s other major automaker, Volvo, is currently owned by Ford (F, Fortune 500), which is in the process of selling it to the Chinese automaker Geely.

What went wrong

GM previously said that the potential deals with both Spyker and Koenigsegg fell through because of unspecified issues that arose during negotiations.

As of Friday, GM was still planning to sell some Saab 9-3 and 9-5 technologies to the Chinese automaker Beijing Automotive Industry Holdings Co. Ltd. That deal was announced last week.

GM has owned a major stake in the Swedish automaker since 1989 and took full ownership in 2000; Saab has been making cars since 1949. GM will now begin winding down Saab production, but warranties will continue to be honored, and spare parts will still be available, the company said.

In the past two decades, GM has made every effort to turn Saab into a profitable car brand, Smith said. But recent global economic problems were simply too much for the still-weak automaker to survive.

As part of its government-sponsored bankruptcy restructuring, GM planned to sell of or wind down four of the eight brands it recently operated.

Pontiac is being wound down; a deal to sell the Saturn brand to Penske Automotive fell through in September; and a deal to sell the Hummer SUV brand to Chinese heavy equipment maker Sichuan Tengzhong is awaiting government approvals.

GM’s remaining brands are Chevrolet, Buick, GMC and Cadillac. 

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