Actual finance blog

The gentleman seated next to me at a monthly dinner meeting of local human resources professionals inquired about my beat at the newspaper. I cover jobs, I responded.

Or, times being what they are, I added quickly, the lack there-of.

That got Phil Berg’s attention.

"We have jobs," proclaimed Berg, a recruiter for Life Skills, a nonprofit that provides services, including home care, for the developmentally disabled. "If anything, we have a problem filling them."

And that got my attention.

I’ve picked up on a couple of recurring themes since moving into the jobs beat. Displaced workers, frustrated by job searches that turn up few if any leads, grouse, "there’s nothing out there."

To which career counselors and recruiters counter that there are, indeed, jobs to be had — especially for people who are flexible and willing to move in a different direction until the recession passes.

For those so inclined, Life Skills awaits.

As of this past Monday, the St. Louis County agency, which already employees 510 full-time and 240 part-time employees, had between 30 to 35 openings.

And depending on how much state aid it receives during the next budget year, there could be as many as 150 more opportunities available during the 12 months beginning July 1.

The question is, why — if times are really that desperate — aren’t more of the unemployed snapping these jobs up?

Wendy Sullivan, the organization’s president, has a theory.

"A lack of understanding and experience," she ventured.

Most people, Sullivan explained, have no idea what is required to live, or work, with someone with Down syndrome, autism, cerebral palsy or other impairments payday loan lender.

The average person, encountering the developmentally disabled in public, averts their eyes and moves on. In terms of personal enrichment, Sullivan says, we don’t know what we’re missing.

At the same time, she doesn’t sugarcoat what Life Skills offers a potential employee.

The hours for full-time direct care workers that assist clients in their homes often aren’t the best. The needs of the disabled don’t begin at 9 a.m. and end at 5 p.m.

Nor do those needs take a break on nights and weekends.

And here’s a big surprise:

No one is ever going to get rich working in direct care.

A full-time "direct support professional" currently earns $9.25 an hour (plus a perk rarely offered in other low-salary jobs: benefits).

If someone is interested in money, Sullivan says, "then we’re probably not interested in them."

Sullivan made $4 an hour when she signed on with Life Skills, figuring she’d hang on for one summer and leave.

That was in 1981.

Since then, Sullivan has seen her fair share of friends and colleagues come and go. Turnover is a fact of life in any organization, and Life Skills is no exception. But when it’s a fit, she’s noticed, her employees become much more than direct support professionals.

They are, in every way, the friends and confidantes of those in their care.

And what kind of price tag can you put on that?

The organization’s fifth annual "Walk, Run ‘n Roll" fundraiser gets under way at 9 a.m. Saturday in Tower Grove Park.

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Logitech, the world’s largest computer mouse maker, disappointed markets by posting a wider-than-expected fourth-quarter loss as the global economic downturn dampened consumers’ appetite for its products.

By 1053 GMT (6:53 a.m. EDT), shares in the group had plunged 11 percent to 12.19 Swiss francs, underperforming a near flat Swiss index .SLI.

The group painted a gloomy outlook for the first quarter, but Chief Executive Gerald Quindlen told Reuters this could be the turning point in the year for Logitech.

“Although we expect Q1 to be the low point in operating results there are signs that demand is stabilizing,” Gerald Quindlen told Reuters in an interview.

The fourth-quarter net loss of $35 million fell well short of analysts’ forecasts and compared with a year-earlier profit of $60.3 million.

“The historic (sales) growth levels of 15 percent are certainly not a thing of the past,” Quindlen said, adding that it was “just a question of time” before Logitech returned to a profit margin of 32 to 34 percent.

Consumers are reining in spending as their savings portfolios tumble in value and many worry about their jobs. Retailers are also reluctant to build up stock in the face of sluggish demand as the economic crisis bites.

“Logitech’s results are very disappointing,” Sal. Oppenheim analyst Nicolas von Stackelberg said, adding the worst was probably yet to come instant payday loan.

Logitech sees first-quarter sales of $300 million to $320 million and an operating loss of $40 million to $50 million. The first quarter is traditionally the group’s weakest period.

Fourth-quarter sales fell 32 percent to $408 million as a stronger dollar weighed, but Logitech said its market share was largely stable, and in some product categories it had even managed to grow.

“It seems that Logitech had to, and will, clean out old inventory with high discounts,” said Helvea analyst Tomas Hilfing. “As we had assumed, retailers seem to be keeping low inventory levels currently.”

Logitech said it will reduce shipments of its products and push promotional activities to help lower stock levels at shops.

Quindlen said further job cuts were unlikely after the group said in January it was cutting 15 percent of its salaried workforce — or around 500 jobs.

Analysts had expected Logitech to post a net loss of $3 million, according to the average estimate in a Reuters poll of 11 analysts.

(Additional reporting by Andrew Thompson in Zurich and Jennifer Robin Raj in Bangalore; Writing by Katie Reid; Editing by Jon Loades-Carter)

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Senior Federal Deposit Insurance Corp officials privately discussed who might replace Citigroup Inc Chief Executive Vikram Pandit if the bank needed more government aid, the Financial Times reported on its website late on Monday.

Successors being discussed by FDIC officials include Ned Kelly, Citigroup’s chief financial officer, Gary Crittenden, his predecessor and chairman of the division containing the New York company’s non-core assets, and one of Citi’s new board members, the paper said, citing people close to the situation.

The FDIC did not return a Reuters email seeking comment that was sent outside of normal business hours.

The paper said the FDIC is one of the regulators which has a say on whether Pandit steps down if the government bails out Citi for the fourth time in six months faxless payday loan online.

A Citigroup spokesman in Hong Kong declined to comment on the report.

Last week, Citigroup, reported better-than-expected results as an accounting benefit for distressed companies, cost-cutting and improved trading results helped offset red ink from consumer lending and credit cards.

The bank, bailed out with $45 billion of taxpayer money, joined Goldman Sachs Group Inc, JPMorgan Chase & Co and Wells Fargo & Co in signaling that massive government efforts to jump-start the ailing economy are helping boost bank earnings.

(Reporting by Ajay Kamalakaran in Bangalore; Editing by Anshuman Daga)

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General Motors Corp has told U.S. dealers it is accelerating its timetable for closing about 1,700 dealerships as it rushes to meet a June 1 deadline to restructure under U.S. government oversight, people with knowledge of the discussions said.

In a series of meetings with key dealers including representatives of the National Automobile Dealers Association, GM executives also said about 200 dealerships had closed in the first quarter, according to people briefed on those talks.

The sources asked not to be named because of the sensitive nature of GM’s discussions with its cash-strapped dealers.

Dealer representatives met on Tuesday in Detroit with GM Chief Executive Fritz Henderson and on Wednesday with GM sales chief Mark LaNeve, the sources said.

A GM spokesman confirmed that the meetings had taken place but declined to comment on the closed-door discussions.

Separately, Chrysler LLC executives, including sales chief Jim Press, held a conference call for dealers on Tuesday and met with key dealers on Wednesday, sources said.

“The message was that all the balls are in the air, but they were committed to trying to reach a deal with Fiat,” one Chrysler dealer who participated in the briefing said.

Chrysler could not be immediately reached for comment.

Both embattled automakers were meeting with dealers, with just weeks remaining to hammer out new concessionary deals with creditors and their major union under the threat of a government-sponsored bankruptcy instant cash loans.

Chrysler has until the end of April to conclude a deal with Italy’s Fiat SpA and win other needed concessions. GM has been given until June 1 to attempt its own out-of-court restructuring by U.S. officials.

GM dealers who met with executives in Detroit this week were told that the automaker has several interested potential investors in its troubled Hummer SUV brand and expected to have an offer that would keep the brand running, one of the people familiar with the discussions said.

GM’s Henderson had said in late March that a decision on Hummer could come within weeks. Henderson took over as CEO when the government ousted Rick Wagoner amid criticism he had moved too slowly on the automaker’s restructuring.

HOT BUTTON ISSUE

The issue of how many U.S. dealerships GM can support has been one of the hot-button issues for U.S. officials as they drive GM toward a stepped-up restructuring that many observers have now concluded will include a bankruptcy filing.

GM ended 2008 with over 6,200 dealers in the United States and had presented a plan to the U.S. autos task force, run by former investment banker Steve Rattner, that would have cut that by about 25 percent to near 4,100 over the next five years as dealers shut down or merged. 

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Europe’s largest bank, HSBC Holdings(), confirmed on Monday it was considering selling three of its major office buildings and said it had received interest from potential buyers.

HSBC, which recently raised nearly $19 billion in a rights issue, said it may sell and lease-back office buildings in New York, Paris and London, including its headquarters at Canary Wharf.

London’s Sunday Telegraph reported that HSBC was considering selling three of its biggest office buildings to raise 2.7 billion pounds ($3.98 billion).

“We are taking a look at the market, yes,” spokesman David Hall said in Hong Kong.

“There are people interested in buying at an appropriate price,” Hall said.

He declined to give further details.

HSBC bought back its building at Canary Wharf for 838 million pounds from ailing Spanish property firm Metrovacesa at the end of last year after the Spanish firm failed to refinance a loan secured on the building.

Globally, banks battered by the financial crisis have been looking to shed non-core assets in order to raise capital and improve their balance sheets.

“HSBC has just raised funds from a rights issue and the possible sale of offices could further boost its cash level and thus benefit the bank in its future acquisitions,” said Alex Tang, head of research at Core Pacific-Yamaichi International cash till payday advance.

The bank, which planned to shut most of its U.S. consumer lending business, said last month that it was ready for acquisitions in its traditional stronghold of Asia where many banks are pulling out to focus on core markets.

Tang said HSBC shares had been undervalued and the news should be positive to the stock and there were signs that the U.S. housing market was stabilizing.

HSBC’s Hong Kong shares have gained more than 66 percent from its multi-year lows of around HK$30.5 March 9, spurred by improved U.S. data and an easing of accounting rules.

The stock finished up 5.3 percent at HK$50.9 on Thursday before the Easter holidays. But it was still 25 percent below its close of 2008 and underperformed the blue chip Hang Seng Index .HSI, which has risen 3.6 percent this year.

(Reporting by Tony Munroe and Alison Leung; Editing by Muralikumar Anantharaman)

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The Federal Reserve’s decision last month to plow $1.2 trillion into the economy reflected growing concerns about a vicious economic cycle in which rising unemployment will curtail consumer spending, potentially into 2010.

Documents released Wednesday provided insights into the Fed’s decision to revive the economy by buying long-term government debt and boosting purchases of mortgage-backed securities from Fannie Mae and Freddie Mac. Projections for economic activity in the second half of 2009 and in 2010 "were revised down" by the Fed’s staff, who did not provide updated forecasts.

"Most participants viewed downside risks as predominating in the near term," according to minutes of the Fed’s closed-door meeting on March 17-18.

And with the economy likely to stay fragile, the unemployment rate — now at a quarter-century high of 8 totally free credit score.5 percent — will probably "rise more steeply into early next year before flattening out at a high level over the rest of the year," the minutes said.

The bleak outlook stems mainly from a cycle where rising joblessness prompted cutbacks by consumers, which in turn led to more layoffs and reduced production by businesses. Such forces would weaken the economy even more, triggering further credit tightening and additional losses at financial institutions.

The economy had deteriorated more than Fed policymakers expected from their previous meeting in January. Of particular concern was the sharp drop in demand overseas, which was hurting sales of U.S. exports, the Fed said.

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Americans have grown more optimistic about the economy and the direction of the country since President Barack Obama took office in January, according to the latest New York Times/CBS News poll Monday.

Two-thirds of respondents said they approved of Obama’s overall job performance.

Just 31% said they had a favorable view of the Republican Party, the lowest in the 25 years the question has been asked in the poll, The New York Times said.

The number of people who said they thought the United States was headed in the right direction jumped from 15% during the final days of Republican President George W. Bush’s administration in mid-January, before the inauguration, to 39% today, the newspaper said faxless payday loan guaranteed.

The number of respondents who said the country was headed in the wrong direction dropped to 53% from 79%.

Thirty-four percent said the economy, already contracting, was getting worse, down from 54% just before Obama took office.

According to the poll, 20% of Americans now think the economy is getting better, compared with 7% in mid-January.

The national telephone poll of 998 adults was conducted Wednesday through Sunday. It has a margin of sampling error of plus or minus three percentage points. 

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If the government is hoping for a coordinated response from the banking sector with its latest toxic asset plan, it better not hold its breath.

A little more than a week after the ambitious program was launched, there are already signs that the industry is struggling to reach a consensus opinion on the issue.

Some institutions have publicly endorsed the so-called "Public-Private Investment Program," including Wells Fargo (WFC, Fortune 500). In a statement, the San Francisco-based bank said it supported any plan by the Treasury Department that helps financial institutions sell troubled assets.

And following last week’s meeting between financial industry leaders and President Obama at the White House, Citigroup (C, Fortune 500) CEO Vikram Pandit called it "constructive."

Experts point out that JPMorgan Chase (JPM, Fortune 500) and Wells Fargo could both be big winners from the program since they may use it to ditch some of the problematic loans they inherited through their acquisitions of Washington Mutual and Wachovia respectively.

Such a move would help the pair book gains on these assets, Barclays Capital analyst Jason Goldberg wrote in a note to clients last week.

Chase did not respond to calls for comment. A Wells Fargo spokesperson said it was premature to comment on their own plans to participate in the Treasury program.

Pricing still a big issue

Still, other banks have grumbled privately about the program, particularly the thorny issue of pricing, which stalled the launch of the plan earlier this year.

All participating banks risk additional writedowns by selling chunks of their loan portfolio or existing investment securities on their books.

But banks that have already drastically written down the value of some of these assets may be particularly reluctant to sell now since there are signs the housing market and the broader economy will eventually find its footing.

"I don’t see at this point that these banks have a strong motive to sell unless they think the price is right," said Gary Gorton, professor of finance at Yale School of Management car insurance.

Complicating things further is Thursday’s move by the Financial Accounting Standards Board to relax the rules as to how banks value some of their assets.

That might lead bankers to think that their troubled assets may now be worth a whole lot more than they were just a few weeks ago since they are no longer required to value them at distressed prices.

Nonetheless, experts seem to agree that some banks will probably be willing to quickly sell their most complex securities — including residential and commercial-mortgage-backed securities — even though they may be reluctant to part with some of their loans.

But industry regulators, including the Federal Deposit Insurance Corp., have indicated that they may push banks to sell more assets on their books to help generate much-needed capital.

That decision may very likely be tied to the results of the so-called "stress test" that the Treasury Department is currently conducting on the nation’s 19 largest banks, said Jess Varughese, managing partner at the New York City-based consultancy Milestone, which recently rolled out a program aimed at assisting banks shed such troubled assets.

Banks that ace their regulatory test, which may very likely include the Wall Street giants Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500), may not have a big impetus to sell, he said, knowing they have the government’s seal of approval. Those that don’t do well on the stress test may not have a choice.

"My suspicion is for a bank on the edge of the stress test there is going to be pressure to clean up their balance sheet," he said. 

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Solutia Inc. has agreed to sell its nylon business to a New York-based private equity firm, the Town and Country company said today.

At the closing of the sales, which is expected by the end of June, Solutia will receive $50 million in cash and a two percent equity stake in a new company formed by the private-equity firm SK Capital Partners II LP.

Solutia said it also will receive $4 million in deferred cash payments, paid annually in $1 million increments starting in 2011.

With the money from the sale, the company said, it plans to pay down some debt.

Solutia makes a range of products, including chemicals and window films free business card templates. On June 30, it announced it would review the nylon business and possibly sell it.

"We do not believe the operations, product profitability and long-term strategy of Integrated Nylon are aligned with our specialty businesses," Solutia said in a regulatory filing on Feb. 19.

The sale includes all five of the nylon business’ manufacturing plants in: Alvin, Texas; Decatur, Ala.; Foley, Ala.; Greenwood, S.C.; and Pensacola, Fla.

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Asian policymakers are preoccupied with China’s “war of nerves” over the U.S. dollar’s global status rather than the impact of the Fed’s debt buying on their vast dollar-linked savings, officials told Reuters.

The Federal Reserve’s decision earlier this month to buy more than $1 trillion in long-term U.S. debt to push down rates drove the dollar sharply lower, though Asian officials said the actions were unsurprising given how much private lending has slowed.

Much more unanticipated was China’s unusually aggressive push last week to replace the U.S. dollar as the top central bank reserve currency, they said.

Officials with direct knowledge of reserve management issues in Japan, India and South Korea, which together hold some $1.5 trillion in currency reserves, were skeptical that such an overhaul of the global monetary system could happen soon.

They acknowledge, however, that the sheer size of their dollar holdings made their substantial reduction problematic.

In contrast, Malaysia and Indonesia, which have smaller reserve stockpiles and hold a combined $145 billion, were already gearing for a change in the reserve currency regime.

China, with the world’s largest reserves at $2 trillion — the bulk of it widely believed to be in U.S. Treasuries — demonstrated last week that it is confident about using economic might to protect its interests, Asian officials said cash loans in 1 hour.

NO DRASTIC SHIFT

“China is engaging in a war of nerves with the U.S. as it is trying to see what move the new U.S. administration makes, and the recent comments have been made in that context,” said a Japanese government official.

“But it won’t make a drastic shift, given its massive holdings of U.S. Treasuries,” the official, who was not authorized to speak to the media, said.

It will try, however, to protect the value of its dollar holdings by reminding the United States about the need to preserve fiscal health, the official said.

Japan has $1 trillion in foreign exchange reserves, the world’s second-largest stockpile. Nearly two thirds of the total were invested in U.S. Treasuries, according to January data, and Tokyo has said it will continue to invest the majority of its reserves in U.S. government debt.

(For a graphic click here)

SYMPATHETIC BUT PRACTICAL

A senior financial official in South Korea, which has $201 billion in foreign reserves, sympathized with Beijing’s concerns about the dollar’s value. 

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