A diverse musical line-up featuring some familiar acts along new ones dot Buffalo Place’s annual Thursday at the Square and Buffalo Place Rocks the Harbor concerts.
The 18-show line-up was announced Thursday evening.
Among the highlights: a July 15 show featuring Umphrey’s McGee and G. Love & Special Sauce’s only summer show on July 22.
Favorites like Robert Randolph and the Family Band, Los Lobos and the Fabulous Thunderbirds are also slated to appear at Thursday at the Square shows.The Buffalo Place Rocks the Harbor concerts include a two-night stand by moe. and a rare appearance by jazz great Herbie Hancock.
The Thursday at the Square shows, which are held in Lafayette Square, are free. They begin on June 10 and run for 10 weeks through Aug. 12.
Buffalo Place Rocks the Harbor concerts are held along the Central Wharf area in the Canal Side footprint of downtown Buffalo. Those concerts have $10 advance fee and $20 at the door.
M&T Bank is the presenting sponsor.
Concerts at both venues begin at 5 p.m.
Buffalo Place has been presenting the concerts for 24 summer seasons as means to help attract visitors to downtown Buffalo. It is estimated the concerts have an estimated $4 million economic impact including more than $3 million that stays in the downtown Buffalo core.
“Besides the economic impact, the other value these shows have is by the number of people they bring to downtown,” said Anthony Colucci III, Buffalo Place Inc. president. “We hope the bars and restaurants do benefit.”
The Thursday at the Square line-up is:
• June 10: Alejandro Escovedo and the Sensitive Boys with special guest Tift Merritt
• June 17: Ingrid Michaelson
• June 24: Martin Sexton and Ryan Montbleau Band with Civil Twilight
• July 1: Ed Kowalczyk of Live
• July 8: Ozomatli with Rebelution
• July 15: Umphrey’s McGee with Tea Leaf Green
• July 22: G. Love & Special Sauce with Rogue Wave
• July 29: Robert Randolph & the Family Band
• Aug. 5: Los Lobos
Combined Austin Energy and Austin Water bonds totaling about $200 million garnered "AA-" ratings and are scheduled to sell next month, Fitch Ratings reported Friday.
The utility revenue refunding bonds were rated in two series of $98.8 million tax-exempt and $100.9 million in direct subsidy-build America bonds. The release said the bonds are expected to sell via negotiation early next month. They are secured through the utility company's net revenue.
The rating agency also reaffirmed grades for three city of Austin outstanding bonds: $498 million in outstanding combined utility system revenue bonds at "AA-"; $1 billion in outstanding city of Austin electric utility system revenue bonds at "AA-"; and $1.5 billion in outstanding water and wastewater system revenue bonds at "AA-."
Overall outlook was listed as stable cash advance companies. Fitch cited Austin Energy's stable service territory, diverse supply mix and competitive rates. The agency said rate increase delays could cause some concern to creditors and though Austin Energy has low debt, that could change as the company pursues 35 percent renewable energy by 2020.
"While rates are competitive and fuel adjustment charges are adjusted regularly, the utility's base rates have not been changed since 1994," Fitch said in the release. "Raising some concern about city council's willingness to raise rates in the face of declining financial performance"
Austin Energy powers more than 407,926 customers and Austin Water provides treated water and wastewater to about 209,994 and 196,842 customers, respectively.
A dubious distinction was reached during the first three months of 2010: More than 10% of all mortgage borrowers are now behind on their payments.
The delinquency rate hit a record of 10.06% in the first quarter, according to the Mortgage Bankers Association. The seasonally adjusted rate accounts for all mortgages on properties that have up to four units and that are at least one payment late.
The rate has been inching steadily toward this record, having ticked up almost a full point since a year go.
The report contained a sliver of good news, however. The non-seasonally adjusted delinquency rate dropped almost one point to 9.38% between the fourth quarter 2009 and first quarter 2010.
So while the seasonally adjusted number saw growth during that period, the non-seasonally adjusted number followed the traditional pattern. Rates usually peak in the fourth quarter, as holiday spending and heating bills kick in causing people to put off paying their loan. But then, when they get caught up in the first quarter, delinquencies fall again.
"The question is whether the drop represents anything more than a normal seasonal decline or a more fundamental improvement," said Jay Brinkmann, MBA’s chief economist. "The normal seasonal drop is coming right at the point where we believe delinquencies could potentially be declining and the problem for the statistical models is determining which is which."
The foreclosure inventory rate, which represents the percentage of mortgaged homes repossessed by lenders, was fairly flat quarter-over-quarter, inching up to 4.63% from 4.58%. But it jumped a lot from 12 months earlier, when the rate stood at 3.85%.
Nearly all varieties of loans suffered increased delinquencies compared with 12 months earlier. Prime fixed-rate loans hit 6.17%; prime adjustable-rate mortgages (ARMs) tipped 13.52%. Subprime fixed-rates jumped to 25.69%; and subprime ARMs are a whopping 29.09%.
The one bright spot was that delinquencies for FHA loans, the mortgages guaranteed by the Federal Housing Authority, dropped slightly to 13.15%.
The improvement is likely due to tighter FHA underwriting standards, which it adjusted after loans issued in 2007 and 2008 started souring. That should be a relief for taxpayers, who will be on the hook for any losses the FHA suffers.
Most of the overall rate increases are attributable to the seriously delinquent loans, Brinkmann said. Those loans, which are 90 days or more late, are going all the way through to foreclosure, but are not being foreclosed, keeping people in the system longer.
In the pre-housing-bust world, many borrowers would have already lost their homes and their delinquencies would no longer be counted in the survey.
Shift in problem-loan types
Lenders have slowed repossessions for various reasons: They may not have enough staff yet to handle the volume; the foreclosure prevention initiatives, such as the Home Affordable Modification Program, is postponing many foreclosures; and the banks themselves are trying to prevent defaults by approving more short sales.
There has been a fundamental change in the nature of the loans causing the most default problems, according to Brinkmann. And, he added, unemployment is the culprit. "Delinquencies are much more driven by the recession than by any one loan type now," he said.
Subprime ARMs accounted for nearly 30% of all delinquencies a year ago, but just under 15% now. Meanwhile, prime fixed-rate loans delinquencies have grown so much that they represent the single biggest bucket of delinquent mortgages: 37% up from 29% a year ago.
Some of the prime loan defaults stem from an increase in people deliberately "walking away" from mortgages. These are homeowners who can pay their loans but choose not to because their homes have dropped so much in value.
According to a recent report, as much as 31% of all defaults in March were strategic.
Brinkmann opined that many of these "strategic defaulters" may be underestimating the impact of walking away. It may take them much longer to repair their credit histories than they realize as lenders assess more than their credit ratings to determine whether to finance future home purchases.
Underwriting involves more than just checking credit scores, and if a lender sees a strategic default on their records, homebuyers may not qualify for loans.
"They may be able to repair their credit scores," he said, "but their ability to buy a home in the future may be negatively impacted for years to come."
Danny Ayala, head of global remittance at Wells Fargo & Co., has only to look at the numbers from Mother’s Day week to see improvement in the business of zipping money from country to country.
In a sign of an improving economy, the bank saw a 57 percent increase in volume during that week and an all-time daily high on May 10 — the day Mother’s Day is celebrated in Mexico.
"It shows that remitters have money to send," Ayala said in an interview Thursday. "Last year was a much different story."
Wells Fargo & Co. expects even bigger things from the remittance business, with the addition of eight new recipient countries at the end of last year and the gradual rollout of its "ExpressSend" service in Wachovia branches.
Wells started ramping up ExpressSend in 2003 and now offers service to 15 countries in Latin America and Asia. Customers can send money overseas from a branch, by phone or online. Wells is also looking to add mobile and ATM options.
In the first quarter, total transactions increased 36 percent to Mexico and 35 percent to all countries, compared with the same period a year earlier. The bank handles billions of dollars in remittance volume each year, but doesn’t provide specific volume or transaction figures.
With the business, Wells sees a way to help a growing immigrant population send money home — and an opportunity to sell them checking accounts and other banking products, Ayala said.
The remittance business is at the center of two hot issues lately: immigration and financial services. Many customers who use the product are in the U.S. legally, but Ayala acknowledges that some may not be. The company follows laws that require it to check customers’ identification, but not immigration status, he said.
"The immigration issue is an issue of public policy," he said. "We are here to provide financial services."
As part of financial reform legislation being debated in Congress, some lawmakers are pushing for more consumer protections for remittance customers. One proposal would require remittance providers to display fees in their storefronts and give the cost to customers upfront.
Ayala said the bank favored transparency but wasn’t comfortable with current proposals. The legislation could be difficult to implement because prices change frequently as exchange rates fluctuate, he said. According to World Bank figures, the remittance flow to developing countries fell 6 percent to $316 billion in 2009. As the world economy picks up, the World Bank expects remittances to increase by 6.2 percent in 2010.
Wells competes with money transfer giants such as Western Union Co. and MoneyGram International Inc., as well as other banks. Bank of America Corp. has a product that allows customers with checking accounts to send money to Mexico by phone. The bank also has an online wire transfer service.
German business software maker SAP AG has agreed to buy Sybase Inc. in a $5.8 billion deal that ratchets up SAP’s rivalry with database leader Oracle Corp.
The deal intensifies the battle between SAP and Oracle to run more of the programs that corporations use to manage their data.
Oracle is the world’s leading database maker a market where Sybase is a small player and has been on a buying binge in an attempt to take business in other areas from SAP.
Faisal Shahzad lived on the downslope side of affluence in the small Connecticut hamlet of Shelton. On Monday, while Shahzad sits in a jail cell in downtown New York City, a judge is scheduled to foreclose on his home, clipping Shahzad’s last attachment to the American dream.
Like many other homeowners across the U.S., he used his house as a piggy bank. Shahzad, who is accused of trying to detonate a Nissan Pathfinder in the center of Times Square last week, took out a second mortgage on the home just months before he left the country for what prosecutors say was a stretch of bomb-making training in Waziristan, Pakistan.
That second mortgage gave him access to a $65,000 credit line, secured by the tidy three-bedroom suburban house he bought in July 2004 for $273,000. Though the frothy real estate market was flinging around cheap money, Shahzad put down the traditional 20%, financing a mortgage balance of $218,400 at a 4% interest rate.
The 30-year-old had a steady job as a financial analyst at Affinion in Norwalk, Conn. He was trading up from a condo he had recently sold. He seemed like a good risk.
And for years, he was. Sure, he repeatedly tried to sell the house, listing it for the boom-time price of $399,000 just one year after buying it — but who didn’t try to hit the real-estate jackpot? And while others were draining their homes of equity, Shahzad stayed away from extra mortgages and loans for the first few years he owned the house. He married Huma Mian, added her name to the deed in December 2007, and kept mailing off his mortgage checks each month.
So when he approached Wachovia Bank in January 2009 for a $65,000 loan secured by his home, no red flags were raised. They approved the money, and he suddenly had a line of credit. Wachovia, now Wells Fargo, did not return calls requesting comment.
Three months later, Shahzad would become a U.S. citizen. Four months later he would leave his job. Five months later he would stop paying his mortgage and leave for Dubai and, eventually, Pakistan.
The house sat empty after he left. In September 2009, Chase (JPM, Fortune 500) initiated foreclosure proceedings, saying Shahzad owed them $200,673.49. Chase, and its local attorney, declined to comment on the case instant payday loan no telecheck.
Connecticut state marshal Mark Pesiri served the papers on the abandoned home, in accordance with Connecticut procedures.
"I don’t get too many up there," Pesiri said.
It’s true. There’s hardly a For Sale sign or foreclosure notice to be seen along the three-mile stretch of Long Hill Avenue that Shahzad lived on. His 7-year-old, grey-sided house is the noticeable exception. There’s a lockbox on the front door at #119, where the lawn is erratically mowed and trash has accumulated in front of the garage door.
Two days after the foreclosure papers were delivered, Chase hired appraiser Scott Iadarola to inspect the property. He valued it at $245,000, putting Shahzad $20,673.49 under water — meaning Shahzad owed the banks that much more than his property was worth.
Shahzad — listed as Faisal "Zhahzad" in the legal filings — never responded to any of these notices and or court actions. He was in Pakistan, where he has told investigators he was studying bomb making. When he returned in February 2010, without his wife or children, he didn’t make up his missing mortgage payments, or try to execute a short sale, or even return the keys. Instead, he rented an apartment 13 miles away in Bridgeport, Conn.
Two months later, he would allegedly drive a Nissan Pathfinder loaded down with fertilizer, propane tanks, gas cans, fireworks, clocks and wiring, and leave it smoking on a street in Times Square.
Meanwhile, the interest meter on his Shelton home kept ticking. And, as many American homeowners now understand far too well, home prices kept falling. When Shahzad house was reappraised on March 15, 2010, Iadarola declared the property to be worth just $240,000 — 12% less than Shahzad paid for it six years ago.
And so on Monday, when Shahzad’s case is scheduled to appear before a judge in Connecticut Superior Court, he will be just one more of the millions of American homeowners who hasn’t paid his mortgage in more than a year and is sitting on a debt — in this case, $37,870.38 — that outstrips the value of the home buried beneath it.
One of the nation’s top banking regulators has taken a swipe at what has become a signature piece of Senate Democrats’ Wall Street reform package: cracking down on complex financial products.
Federal Deposit of Insurance Corp. Chair Sheila Bair said she’s concerned that the Senate bill goes too far, in a letter sent Friday to the authors of the measure, Sens. Christopher Dodd, D-Conn., and Sen. Blanche Lincoln, D-Ark.
Bair is taking aim at a provision that blocks all banks from trading complex financial contracts called derivatives. The bill would force banks to spin off the desks that trade derivatives, known as swaps desks.
"One unintended outcome of this provision would be weakened, not strengthened, protection of the insured bank and the Deposit Insurance Fund, which I know is not the result any of us want," Bair wrote in the letter.
The provision in question is among key controversial hang-ups for lawmakers debating the Wall Street overhaul on the Senate floor this week.
Congress generally wants to get tougher on these complex financial products that are currently traded with no oversight, which were responsible for the taxpayer bailout at American International Group (AIG, Fortune 500). But lawmakers disagree about how much to regulate them.
The measure banning bank swaps goes farther than the so-called Volcker rule, named for former Federal Reserve Chairman Paul Volcker, which only blocks some banks from doing such trades for their own purposes and accounts, called "proprietary trading." The Dodd-Lincoln proposal blocks banks from all derivatives.
In the letter, Bair argued that banks have legitimate uses for derivatives, especially when it comes to locking in an interest rate in their financial dealings. She said that if Congress were to pass the legislation, such trading would continue "but in less regulated and more highly leveraged venues," according to the letter.
Many companies and Wall Street banks use derivatives, whose value is derived from another financial product, to cut the risk that they’ll lose money on a deal. Derivatives are also used to lock in the price of a commodity, the way farmers do with the corn they hope to sell after a harvest.
A House bill that passed in December would allow all banks to trade derivatives in a more transparent way. However that bill also allows some trades between some banks and certain companies, such as airlines, to continue without regulation.
But Senate Democrats are tougher on derivatives, in the aftermath of fraud charges that the Securities and Exchange Commission levied against Goldman Sachs (GS, Fortune 500) for selling a complex mortgage-related derivative to investors while failing to tell them that a hedge fund was betting against the product.
The bill says that banks can no longer make such complex financial trades and have access to emergency government-backed loans when they get in trouble.
However, Bair said in the letter that she believes that the Volcker rule goes far enough in accomplishing the same goal, ensuring that taxpayers won’t be stuck supporting unnecessarily risky bets.
"To be sure, there are certain activities, such as speculative derivatives trading, that should have no place in banks or bank holding companies," she wrote. "We believe the Volcker rule addresses that issue."
Spokesmen for Dodd and Lincoln didn’t return requests for comment on Monday.
Stocks ended mixed after a choppy session Wednesday, as differing profit reports from Apple and Yahoo weighed on the tech sector and investors remained wary following strong quarterly reports from Morgan Stanley and Wells Fargo.
The Dow Jones industrial average (INDU) added 8 points, or less than 0.1%, to end at 11,124.92. The S&P 500 index (SPX) fell 1 point, or 0.1%, to settle at 1,205.93, and the Nasdaq composite (COMP) rose 4 points, or 0.2%, to close at 2,504.61.
"As we get beyond earnings, attention is going to turn right back to the housing and job markets," said Dave Hinnenkamp, chief executive of KDV Wealth Management. "The downturn has left a really big scar, and investors who got burned will be cautious for some time."
Stocks finished Tuesday’s session in positive territory, thanks to better-than-expected earnings from Goldman Sachs and several consumer companies.
"Investors were holding their breath for this earnings season, and it looks like it’s going to be decent," Hinnenkamp said. "This makes people comfortable saying we’re in a recovery process, but it’s going to be a slow one."
Tech earnings: Late Tuesday, iPod and Mac maker Apple (AAPL, Fortune 500) posted a record quarter that blew past Wall Street’s estimates. Apple shares ended more than 6.1% higher.
Yahoo (YHOO, Fortune 500) also delivered earnings that beat expectations, but its sales came in below estimates. Shares closed down 4.9%.
"The tech sector leads out of the recession," Hinnenkamp said. "After that we’ll be looking for the industrial and material sectors to rise — and once we move forward, attention will turn to the energy sector."
Financial earnings: Earlier Wednesday, Morgan Stanley (MS, Fortune 500) said it swung to a $1.8 billion profit in the first quarter Wednesday before the bell, as strong trading revenue boosted the Wall Street firm’s latest results. Shares of Morgan ended 4.2% higher.
Wells Fargo (WFC, Fortune 500) reported a $2.5 billion profit before the bell, beating Wall Street expectations. The company said that credit conditions have "turned the corner" from the weakness of the financial crisis. Still, Wells shares fell almost 2% by the end of trading.
Overall, the finance sector ended 10.8% higher Wednesday.
"We’re not unreasonably priced at these levels, considering earnings," Hinnenkamp said, "but it’s not a deep-value market, either."
Other corporate results: In addition to banks, investors digested quarterly results from several Dow components:
– AT&T (T, Fortune 500) beat estimates on a boost from strong sales of Apple’s iPhone;
– Boeing (BA, Fortune 500)’s profit and revenue dropped amid fewer airplane deliveries;
– McDonalds (MCD, Fortune 500)’ earnings rose above predictions as sales rose across all its markets, especially Europe and Asia;
– United Technologies (UTX, Fortune 500) also beat estimates.
Also, Chrysler announced that it earned its first operating profit since exiting bankruptcy on June 10, 2009. The profit follows nearly $4 billion of losses logged by the automaker during that time.
The results continued after the markets closed, with Starbucks (SBUX, Fortune 500) and other major names reporting results after the bell. The coffee chain handily beat profit and sales estimates, and the company lifted 2010 guidance. Shares were up 2% in after-hours trade.
In other company news, General Motors announced Wednesday morning that it had made a final payment of $5.8 billion late Tuesday to the U.S. and Canadian governments, paying off the last of its $6.7 billion in loans.
Outlook: "Psychological issues will continue to drive the markets," said KDV’s Hinnenkamp.
He expects a slow but continued higher trend, with the S&P around 1,200 in the coming weeks, and the Dow around 11,250.
"The economy is improving, but slowly," Hinnenkamp said. "Thus recovery wont come as quickly hoped for, and a sustained bounceback can come only once housing and jobs kick in."
But even negative news outside of the real estate and employment sectors could put a damper on the uptick, Hinnenkamp added.
"Any piece of bad news, people worry there’s an Armageddon," he said. "But there’s always good and bad news out there — it depends where you choose to focus."
World markets: European shares, including the FTSE 100 in Britain, France’s CAC 40 and Germany’s DAX, ended lower.
Asian markets ended the session mixed. Japan’s Nikkei rallied 1.7% and the Shanghai Composite surged 1.8%. The Hang Seng in Hong Kong lost 0.5%.
Other markets: The dollar edged higher against the euro but remained weak versus the Japanese yen and the U.K. pound.
The price of oil fell 17 cents to settle at $83.68 a barrel. Wednesday marked the first day of the June contract.
COMEX gold for June delivery prices rose $9.60 to settle at $1,148.20 an ounce.
Treasury prices were higher, with the yield on the benchmark 10-year note at 3.78%. Bond prices and yields move in opposite directions.
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