Actual finance blog

After Chris Scheid graduated from Queens’ Richmond Hill high school in 1982, he landed a lowly job in Manhattan as a futures exchange floor runner thanks to the brother of his Boy Scout troop den mother.

“Ninety-eight percent of the people on the floor got their job because they knew somebody,” he told Reuters after a day of trading in the frozen concentrated orange juice market. “I started at the bottom.”

Scheid, 43, learned the ropes and struck it big trading agricultural commodities like frozen concentrated orange juice, coffee, sugar, cocoa and cotton. But now, after 2-1/2 decades of yelling orders and flapping hands to buy and sell futures, he must change careers when more than a century of agricultural commodities futures trading in New York ends on March 3.

The IntercontinentalExchange’s ICE Futures US, which bought the NYBOT last year, will cease open outcry trading of all futures contracts and become wholly electronic.

Scheid will keep his hand in the market by trading orange juice options — the FCOJ options ring is not closing cash advance now. He is investing in a southern cooking-themed restaurant and an auction company. There is also a thriving antique business.

Hoarse from years of barking at each other, dozens of traders and brokers from New York City, Long Island, and New Jersey are assessing their skills. It will be tough to find a job that matches floor trading for its combination of great pay and a big adrenaline rush.

INTO THE PIT

Scheid’s story of a young man with a working class background carving out a career without the benefit of college is hardly unique on commodity exchanges in New York, Chicago or London. 

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The U.S. national security concerns that scuppered network gear maker 3Com Corp’s (COMS.O: Quote, Profile, Research) plan to bring in a Chinese investor could erase an already short list of foreign suitors for Motorola Inc’s (MOT.N: Quote, Profile, Research) handset business.

The largest U.S. mobile phone maker, which also supplies communications systems to governments and public safety groups, has seen no company yet emerge with a public bid for the unit, while analysts have said it could attract an offer from China’s Huawei Technologies Co Ltd HWT.UL or ZTE Corp (0763.HK: Quote, Profile, Research).

But Huawei and private equity firm Bain Capital Partners pulled their proposal to buy 3Com this week after failing to win approval from The Committee on Foreign Investment in the United States (CFIUS), a panel led by the U.S. Treasury Secretary that reviews corporate deals with foreign buyers.

So Huawei, or any foreign company from China to the Middle East, would likely think twice before talking to another firm such as Motorola with U.S. government contracts, analysts said.

“It’s definitely a risk factor,” said Stifel Nicolaus analyst Rebecca Arbogast, who was surprised the 3Com deal was not approved given that it had seemed ready to divest a sensitive unit that makes network protection systems for government agencies and large businesses.

Under Bain’s proposal, China’s top telecom equipment maker would not have had operational control of 3Com or access to sensitive U.S pay day advance. technology. But several U.S. lawmakers complained the deal threatened national security due to Huawei’s alleged ties to the Chinese military.

“There are definitely some extremely hawkish people in the Bush administration who see China as the enemy. A lot of Chinese companies don’t understand some of the fear that goes on in the everyday American and the government,” said Shaun Rein, managing director of China Market Research Group.

Fostering a more receptive U.S. attitude toward Chinese investment will take time, said Edward Yu, president of Beijing-based research firm Analysys International. 

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Professor of medicine, Washington University
Yes … ‘Safety movement’ and time-limited certification help safeguard patients.

Medical practice is fraught with complexity and uncertainty. Thus, medical malpractice is not defined by an unfortunate outcome or a patient’s death. Rather, medical malpractice refers to situations where patients are harmed because of mistreatment of a disease or injury through ignorance or carelessness.

Over the past decade a large number of physicians have been working hard to reduce malpractice by improving the safety and quality of medical care. One area of change has been the development of a "safety movement" in medical practice. The hallmark of this movement is the adaptation of a "systems analysis" of the care delivered by doctors and hospitals. Every process of care is scrutinized, even the tiniest detail, so that medical care can be made safer and more effective. One example of a recent "system change" is the marking of patients before surgery to avoid operating on the wrong side.

In addition, many specialty boards are now issuing time-limited certificates. For example, the internal medicine board now certifies physicians for 10 years rather than for life. Every decade an internist must pass an examination to maintain certification in the field. This policy represents more work for physicians, but most medical leaders feel that the resultant transparency and public trust warrant the effort.

One area where the profession needs to do better is in weeding out unfit physicians. Fewer than 5 percent of doctors account for more than 50 percent of malpractice suits. State boards are making progress detecting and expelling incompetent doctors, as well as drug abusers and insurance cheats, but more work needs to be done.

Since the time of Hippocrates, the ethic of medicine has been to "first do no harm." In recent years the profession has responded vigorously to more closely approximate this ideal.

Partner, Fox and Vuylsteke
Yes … but profit shouldn’t trump the safety of patients.

Almost every person or business entity may be sued if they carelessly or negligently cause injury to someone. Because our society highly values medical professionals, they have been granted numerous protections above those enjoyed by the average person or business. Caps limiting non-economic damages, shortened time to file a lawsuit, and onerous pre-filing restrictions have all served to significantly reduce the number of medical malpractice claims.

Particularly affected are children, the elderly and the unemployed; including stay-at-home parents. These non-wage earners may be blinded, maimed or even carelessly allowed to die; yet their lives are worth no more than $350,000 under the recently enacted Missouri law no fax payday loans. Given the prohibitively high cost of pursuing a medical malpractice claim, many of these patients and their survivors are being denied meaningful access to the civil justice system.

While the medical profession may applaud the resulting reduction in claims, we must face the moral issue of whether it is acceptable to value the life of wage-earners over other members of society.

As these restrictions play out in a medical marketplace increasingly controlled by large corporate interests, those concerned with patient safety find the trend toward devaluation of human life worrisome. Physicians believe in a creed, "To First Do No Harm." However, just as the Securities and Exchange Commission must call "foul" on corporate malfeasance, so must the civil justice system seek to ensure that profit does not trump the safety of patients.

President, St. Louis Metropolitan Medical Society
Yes … and now maybe doctors now will return to underserved Missouri regions.

The threat of frivolous lawsuits has a chilling effect on all aspects of patient care. Patient access to "high risk" physician services is becoming more and more restricted. Obstetricians, neurosurgeons and other doctors have been leaving areas like Madison County, where lawsuit abuse is especially acute. They are retiring, or moving to regions with balanced liability systems that eliminate the jackpot-type mentality that has allowed plaintiff’s lawyers to become multimillionaires at the expense of patients and doctors.

Less visible, but more insidious, has been the voluntary restrictions that doctors have been forced to make. Many obstetricians have stopped delivering babies. Some surgeons no longer perform complicated surgery, or avoid doing essential surgery on patients at higher risk.

Most of the costs associated with professional liability do not go to injured patients. Much of the money goes to attorneys, but the greatest cost is for the practice of defensive medicine. Countless MRIs, blood tests, specialty doctor visits, diagnostic tests, unnecessary Caesarian sections, etc., are done primarily to reduce risk of lawsuits. These costs, estimated at over $100 billion per year, could be far better used to provide health care for the uninsured and improve overall quality of care.

Fortunately, there is light at the end of the tunnel. Professional liability reform in Missouri in 2006 stabilized premiums. This will hopefully see a return of doctors to underserved areas of Missouri as in Texas where record numbers of physicians have been relocating since reform was passed there in 2003.

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Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) posted better-than-expected fourth quarter profit on Tuesday as penny-pinching U.S. shoppers scoured its discount stores for low prices on necessities like food to offset tough economic conditions.

The world’s largest retailer, which has cut prices to try to win sales in the tough environment, acknowledged that the economic situation remains “challenging,” and it gave a first-quarter and full-year earnings forecast that could come in below Wall Street’s expectations.

Joseph Feldman, an analyst with Telsey Advisory Group, said that given the tough climate, in which many U.S. retailers have cut their sales or earnings forecasts as shoppers rein in spending, providing a cautious earnings forecast near Wall Street’s expectations was “perfectly fine.”

“Wal-Mart is perfectly positioned for this type of environment,” he said. “They’ve got a lot of consumable items, like groceries, so they’re going to drive traffic and maybe even get additional traffic because of this environment.”

Net income rose 4 percent to $4.096 billion, or $1.02 per share, for its fiscal fourth quarter ended January 31, from $3.94 billion, or 95 cents per share, a year earlier cheap payday loans.

The most recent quarter’s results included charges of 3 cents per share for dropped real estate projects and a restructuring charge for its Japanese operations, and a 1 cent per share benefit from the sale of real estate properties.

Excluding the items, Wal-Mart reported earnings of $1.04 per share, above analysts’ average estimate of $1.02 per share, according to Reuters Estimates.

Revenue, which includes membership revenue for its Sam’s Club warehouses, where shoppers pay an annual fee to shop, rose to $107.43 billion from $99.08 billion. 

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St. Louis’ history may be tied to westward expansion, but Wells Fargo, a bank known for pioneering business in the West, sees it differently.

"The Arch for us isn’t the gateway to the West," says Paul D. Kalsbeek, executive vice president for the southeast region of San Francisco-based Wells Fargo. "It’s the gateway to the East."

From a handful of people about eight years ago, Wells Fargo’s presence in St. Louis has grown to about 260 employees, with more than 1,000 in Missouri. The bank occupies an upper floor of the Interco Tower in Clayton and needs more space. Other St. Louis-area offices are in Chesterfield and St. Peters.

Wells Fargo has 1,943 employees in 69 Illinois communities, with the biggest concentrations in Chicago and Springfield.
But you won’t see the Wells Fargo name on a bank branch here. In contrast to other big banks that have dotted the area with retail branches in recent years, Wells Fargo is going after businesses and other wholesale customers.

Kalsbeek was among the first hires when Wells Fargo began developing a St. Louis office about eight years ago. At one point, part of the office was being run out of Larry Kirschner’s living room in Ladue. Kirschner, a senior vice president, helps companies manage their exposure to foreign currencies.

Kalsbeek, formerly with Commerce Bank, manages a group of bankers who focus on serving middle-market companies, which can include some of the area’s public corporations as well as private firms. When he started with Wells, Kalsbeek was the only commercial banking officer not based in one of Wells Fargo’s retail banks.

But he now has bankers under him who are developing similar offices in Kansas City; Nashville, Tenn.; Richmond, Va.; and Tampa, Fla. David E. Wilsdorf has taken over Kalsbeek’s role of developing relationships with businesses in eastern Missouri and Arkansas.

Wilsdorf, a regional vice president, said Wells Fargo’s style is to work directly with business owners to assess and meet their needs, whether it’s financing commercial real estate, advising on corporate finance or providing insurance or foreign exchange services.

"There’s no need to flash the name all over the place," Wilsdorf said. "Advertising doesn’t do much for us. Our business grows by knocking on doors."

Wells Fargo encourages its banking managers to work across disciplines to serve customers and cement their relationship with the bank, Wilsdorf said. The Clayton office has experts in insurance, commercial real estate, corporate finance and foreign currency in addition to commercial bankers.

Kevin Sullivan recently joined Wells Fargo from A.G. Edwards & Sons, where he worked in mergers and acquisitions. He will work with the bank’s customers on corporate finance.

Kalsbeek said he believes Wells Fargo is showing that there’s no need to open a branch or buy a local bank to break into the St http://paydayintime.com. Louis market, known for its conservative approach to business.

With the growth of the Internet and online banking, clients are used to conducting business remotely, he said. Wells Fargo has an Internet-based offering, called Commercial Electric Office, which customers can use to access any bank service over the Internet.

On the other hand, business customers want to have a personal relationship with their banker, which is why Wells Fargo is opening more offices outside its traditional territory.

"People like the fact that they can look us in the eye," Wilsdorf said.

Kalsbeek added: "Clients want to meet with decision-makers who know them. We represent our clients to the institution. If problems arise, we can act on them very quickly."

Ed Dickinson, chief financial officer for LMI Aerospace Inc. in St. Charles, has been dealing with people in the Wells Fargo organization here since the 1990s, when Norwest Corp. opened a small office in Clayton. Norwest later bought Wells Fargo and adopted its name.

Dickinson likes Wells Fargo’s Web-based cash management product, and he has developed a good relationship with the people here. He said it was a bit of a leap to consolidate more business with a bank that lacked a branch, but he seldom went to his previous bank’s building anyway.

"It was more of a mental leap to make this shift than a real issue," he said.

Robert M. Pratzel, chief financial officer of HOK Group Inc., said he was a little nervous at first about using a bank without a branch. "It was a gigantic leap of faith," he said.

The architectural firm uses Wells Fargo’s remote deposit technology to deposit the few checks that come through the office, and he’s formed solid relationships with the bank’s commercial lending and investment personnel. The bank’s technology also has facilitated HOK’s dealings with clients and banks overseas.

"It’s worked," said Pratzel, who recently signed HOK’s third agreement with the bank. "We’ve been thrilled."

In a way, opening an office in St. Louis is a return to Wells Fargo’s roots. The Overland Mail Co., a joint venture with three other express companies, had an office in St. Louis as early as 1888, when the company began offering ocean-to-ocean deliveries between San Francisco and New York. The companies had been delivering mail from St. Louis westward since 1858 with stagecoaches and the Pony Express.

jerristroud@post-dispatch.com | 314-340-8384

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Comcast Corp (CMCSA.O: Quote, Profile, Research) said it would resume annual dividend payments and set a 2009 target to complete its $7 billion stock buyback program, addressing investors’ demands to boost its beleaguered share price.

Shares of the top U.S. cable operator rose nearly 8 percent on Thursday after it also reported a 54 percent rise in fourth-quarter profit and an increase in digital video, broadband Internet and phone subscribers.

“Investors were desperate for a sign that this company is ready to return cash to shareholders,” Bernstein Research analyst Craig Moffett said. “They got that in spades today.”

By putting a defined timeline on the buyback and repurchasing $1.25 billion in the fourth quarter, Moffett said, the company clearly signaled its confidence in future cash flow prospects.

Comcast set its annual dividend at 25 cents per share, totaling about $750 million, and will pay a quarterly installment on April 30 instant payday loan. The company, whose last dividend payment was in March 1999, told analysts on a conference call that the payout would rise over time.

At Wednesday’s close, shares of Comcast had lost 39 percent of their value from a high set last July, as subscriber growth slowed due to a weaker U.S. economy and increased competition from phone and satellite companies.

That’s why in January, investment advisory firm Chieftain Capital, which held about 2 percent of Comcast shares, wrote to the board calling for the ouster of Chief Executive Brian Roberts and for dividends to resume.

Chieftain Capital’s Glenn Greenberg was not immediately available for comment. 

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Countrywide Financial Corp (CFC.N: Quote, Profile, Research), facing heavy pressure to help more borrowers avoid foreclosure, on Monday announced an expanded program to help people stay in their homes, even if they have fallen behind on subprime mortgage payments.

The program was created by the largest U.S. mortgage lender and an advocacy group, the Association of Community Organizations for Reform Now, or ACORN.

It comes as hundreds of thousands of borrowers nationwide face rising borrowing costs as interest rates on their adjustable-rate mortgages reset higher. Economists have said the nation’s housing crisis may have already helped push the overall economy into recession.

“From a borrower’s perspective, any program to help people stay in their homes is a good idea,” said Jaime Peters, an analyst at Morningstar Inc. “Borrowers who can demonstrate they can afford lower payments will be most helped.”

The announcement was delayed more than three weeks, after Calabasas, California-based Countrywide agreed on January 11 to be acquired by Bank of America Corp (BAC.N: Quote, Profile, Research), the second-largest U.S payday loan online. bank.

Under the program, Countrywide and ACORN will work to provide options for subprime borrowers who have fallen behind on payments, such as interest-rate freezes and reductions, and well as short-term repayment plans.

Countrywide will also offer relief for borrowers with subprime “hybrid” ARMs, which carry low “teaser” rates that often jump after two or three years. Borrowers with strong payment records, but who have or may face difficulty with higher payments as rates reset, may be able to refinance into prime loans, or get a five-year rate freeze, Countrywide said.

“Countrywide and ACORN share the belief that no subprime borrower who has demonstrated the ability and willingness to make payments should face foreclosure,” said Maude Hurd, ACORN’s president, in a statement. 

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Finance leaders of the world’s top industrialized nations put on a show of solidarity on Saturday in the face of an economic slowdown and conceded that things could get even worse because of the crumbling U.S. housing market.

In a communique released after meetings in Tokyo, the Group of Seven said prospects for economic growth had worsened since they last met in October, although fundamentals remained solid and the U.S. economy was likely to escape a recession.

“There was a climate of much greater pessimism and worry than in October,” said Italian Economy Minister Tommaso Padoa-Schioppa.

Finance ministers and central bankers from Japan, the United States, Canada, Britain, Germany, Italy and France said that growth in their countries was expected to slow by “varying degrees” in the short term.

They pointed to serious risks from the U.S. property market slump and subsequent tightening of credit conditions, which has slowed the flow of money to the consumers and companies that drive the world’s economy.

Debt-laden banks have curbed lending as their losses, tied primarily to souring U.S fastcash. home loans, rise above $100 billion. That has raised the specter of a vicious cycle as consumer spending slows, prompting businesses to retrench and cut jobs.

Glenn Maguire, Asia Pacific chief economist with Societe Generale in Hong Kong, noted that the G7 offered little in the way of detail on coordination action to support the economy.

“This economic shock and the economic downturn is largely driven by domestic problems in the U.S. and it really can’t be remedied by a globally coordinated action plan,” he said. 

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Fitch Ratings said Friday it expects a spike in bad credit card debt and car loans in 2008 as the American consumer is besieged by heightened unemployment, mushrooming prices and a slumping housing market.

The credit-ratings agency anticipates credit card lenders could write off more than 7% of their portfolios this year, compared with the 5.21 percent pace of write-offs in 2007.

Car lenders catering to borrowers with blemished credit histories could write off 11% of their loans, which means write-offs will have more than doubled in two years. Lenders issuing loans to people with stellar credit will probably write off 2 percent of their portfolios, an increase of almost 50%, Fitch said.

Fitch tries to forecast losses on these types of loans because they are frequently bundled into bonds and sold to investors payday loan low fee. How much the bonds are worth pivots on how reliably the underlying loans are repaid.

With unemployment at 4.9%, prices ticking up, the housing market mired in a slump and people worried about growth in their wages, Fitch said the U.S. economy will saddle the American consumer more heavily in 2008.

"The U.S. economy is showing more cracks, which will continue to impact the performance of U.S. credit card and auto loan asset-backed securities," Fitch said.

Even assuming higher losses, Fitch said most of these bonds are still safe. Most bonds are structured to withstand greater losses than Fitch forecasts, the agency said. 

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AnnTaylor Stores Corp., the clothing retailer geared toward women ages 25-55, plans to close 117 underperforming stores and cut 13 percent of its headquarters staff to boost profit over the next three years.

The retailer, which has nine Ann Taylor and Ann Taylor Loft stores in the St payday advance. Louis area, didn’t identify which stores would be closing. The company operated 921 stores as of Nov. 3.

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