Daugherty Chevrolet on Fulton Avenue in Sacramento is closing its doors today and is expected to open next week as Kuni Chevrolet.
Kuni is the longtime owner of Hubacher Cadillac and Roseville Volkswagen.
Check this site later for more information.
Yahoo Japan Corp. said on Tuesday that it will begin to switch over to Google Inc.'s search and advertising technology in the future.
The move is expected to give Google and the Japanese company that is 35 percent owned by Yahoo Inc. (NASDAQ:YHOO) a near monopoly on search in Japan. Microsoft Corp. (NASDAQ:MSFT) has only about 3 percent of the search market in the world's second largest economy, with Yahoo Japan ( 57 percent) and Google (38 percent) making up the rest.
The Japanese telecom company Softbank Corp. owns 40 percent of Yahoo Japan.
Company officials said they began to contemplate a switch to Google (NASDAQ:GOOG) last year after Yahoo announced a partnership with Microsoft in which it is switching to the software giant's Bing search technology Low fee payday loans.
"We looked at this from many angles, but in the end we determined that Google was the better choice," Yahoo Japan CWO Masahiro Inoue said at a briefing in Tokyo.
Yahoo Japan also announced earnings, saying its net income rose 12.6 percent to $248 million in the three months ended June 30.
General Motors is paying $3.5 billion in cash to buy subprime auto lender AmeriCredit, a move that will once again give the automaker its own finance arm.
It is the first major acquisition for GM since it emerged from bankruptcy a year ago with the help of a $50 billion bailout by U.S. taxpayers.
GM will pay $24.50 a share for AmeriCredit (ACF), which represents a 24% premium over Wednesday’s closing price. The Fort Worth, Texas-based finance company typically finances low-mileage, late-model used cars to customers without good credit.
Shares of AmeriCredit shot up 22% in Thursday trading following the announcement.
Treasury owns 61% of the company. While GM completed repayment of a $7 billion loan from Treasury in April, recouping most of the bailout dollars will depend on the value of the company when it once again starts selling shares to the public.
GM is expected to go public again later this year or early in 2011.
An official with Treasury said that while the department was notified of the acquisition decision, GM is not required to seek the government’s approval for any investments, and that Treasury was not involved in negotiations. Treasury did not have any comment on the deal.
GM used to have its own finance arm, GMAC, which in addition to making auto loans and providing finance to its dealers was a major subprime mortgage lender. But it sold a majority stake in GMAC in 2006, partly because GM’s junk bond rating from credit agencies made it expensive for the finance firm to raise necessary capital.
GMAC’s problems with both auto finance and subprime mortgages ended up necessitating its own $17 billion bailout from the Treasury, which now owns 56% of its common stock as well as $10.1 billion in preferred shares.
GMAC, which recently changed its name to Ally Financial, makes loans to both customers and dealers of GM as well as Chrysler Group. But its own need to improve the quality of its loan portfolio has limited its willingness to make subprime auto loans and leases to car buyers of the two companies.
Tough market
The difficulty that potential car buyers with bad credit have getting loans is one of the factors that has kept auto sales depressed. Customers who want to use leasing to lower their payments have also had difficulties arranging that form of financing, since leasing requires the finance company to assume risks about the future value of the vehicle.
Industrywide sales in the first half of this year were up about 17% from a year ago, but they are still down 32% from the first half of 2008 — a period when sales were already being hit by the start of the recession and record high gasoline prices.
Just as easy financing created a bubble in home purchases, it led to a boom in car sales. But car sales are not likely to return to the peaks of the last decade any time soon no fax payday loans.
There has been talk in the industry that the lack of a private finance arm has put GM and Chrysler at a competitive disadvantage with Ford Motor (F, Fortune 500) and Toyota Motor (TM), which both still own and operate finance arms.
"Not having an in-house finance arm hurt our ability to finance certain loans and leases, which in turn hurt our sales," said GM Chairman and CEO Ed Whitacre in a conference call Thursday.
GM estimates that about 4% of its retail U.S. sales have been subprime loans, and 7% have been leases. Industrywide, roughly 7% of new car sales are through subprime loans and 21% are lease, according to figures from sales tracker Edmunds.com.
But there are risks involved with GM getting into the business of again making its own loans to less creditworthy buyers — especially since the market for investors buying those loans is still a fraction of what it was before the late 2008 crisis in financial markets.
Bill Visnic, senior editor for Edmunds, said that while there’s clearly a potential for increased sales for GM in subprime loans and leases, it shouldn’t be assumed that there will be an immediate spike in sales, especially since approval rates for subprime loans are still only a fraction of what they used to be.
"It’s wise to proceed with a little caution. We can’t all just declare this tight credit situation is over," he said. "Auto sales are still in sputtering stage."
Chris Whalen of Institutional Risk Analytics said in a note to clients Thursday that he saw the deal as a positive for GM but a negative for Ally.
"The GM business was not viable witthout a captive finance unit," he wrote. "Unfortunately for GMAC/Ally, GM has chosen to work with another credit provider. This suggests to us that GMAC will become just another provider of consumer credit in an already overbanked market."
Ally will continue to provide most of the auto loans to GM buyers with good credit, as well as the financing for its dealers, said GM spokeswoman Reneé Rashid-Merem. She said the AmeriCredit deal is designed to give GM additional financing offers for potential customers.
GM said its purchase of AmeriCredit "establishes the core of a new GM captive financing arm that will enable GM to provide customers with a more complete range of financing options." It pointed to the need to make loans to car buyers with subprime credit scores as well as offering leasing options.
The automaker’s balance sheet was greatly improved by the bankruptcy process it went through a year ago, leaving it with $23.5 billion in cash and only $5.3 billion of long-term debt.
Citigroup posted second-quarter earnings of $2.7 billion Friday, marking its second consecutive profit and beating Wall Street expectations, thanks to improving credit trends.
But the stock fell along with other banks as worries about the broader economy and financial reform continued to plague the markets.
Earnings for the banking giant came in at 9 cents per share. Analysts polled by Thomson Reuters expected the company to earn 5 cents for the quarter.
Citigroup (C, Fortune 500) shares slipped 4% Friday, however. Despite beating estimates, profits were 37% lower than the second quarter of 2009.
Revenue from the bank was weaker than expected, falling 33% to $22.1 billion. That was driven by a 26% decline in revenues from its securities and banking unit, which was widely expected as a result of increased market volatility.
During a conference call with analysts. Citigroup CEO Vikram Pandit said he isn’t too concerned about the sweeping Wall Street reform, which is expected to be signed into law by President Obama next week.
"I’ve been an advocate since the start of regulatory reform and am quite pleased we’re moving forward," he said. "The ultimate impact won’t be clear until we know all of the details, but we have been managing the business and selling assets in line with the principles of reform."
He added that the bill, which calls for most derivatives to be bought and sold on clearinghouses and exchanges, won’t have a major impact on much of its derivatives business.
Beyond the Wall Street side of Citigroup’s operations, the bank’s consumer businesses delivered strong performances during the quarter. Credit losses decreased by $422 million, or 5%, to $8 billion as fewer loans failed.
In a statement, Pandit noted that "credit improved for the fourth consecutive quarter" and that the bank was also helped by international growth in Latin America and Asia.
"In terms of credit quality, everything is moving in the right direction," said Amanda Larsen, analyst at Raymond James, highlighting that reserves for credit losses fell to the lowest level since the third quarter of 2007 and delinquencies on Citi-branded cards also edged lower.
"The market has been freaking out about the health of the consumer as of late, and bank earnings are giving us solace that it’s not as bad as the market is making it out to be," Larsen added.
The bank also continued to pare back its Citi Holdings division, which was created to house the firm’s so-called "troubled assets" and businesses it is looking to get rid of. Citi Holdings reduced its assets by $38 billion during the quarter, and those assets now represents less than quarter of Citigroup’s total.
Larsen said that at this pace, the bank is on track to shed a majority of its Citi Holdings over the next three years.
The latest results from New York City-based bank are further evidence that the bank is bouncing back after being one of the hardest hit institutions during the financial crisis. Last quarter, Citigroup reported $4.4 billion in earnings.
The Treasury Department, which took a sizeable stake in the bank as part of the government’s bailout of Citigroup, is continuing to trim its stake. Earlier this month, the government said it sold 1.1 billion shares of the bank and plans to unwind the remainder of its 5.1 billion shares by the end of the year.
Based on the average price of $4.03 that Treasury has been able to sell shares at, U.S. tax payers could make a profit of $2.03 billion from the controversial bailout.
Citigroup’s report also matches results from rivals JPMorgan Chase (JPM, Fortune 500), which raked in $4.8 billion last quarter, and Bank of America (BAC, Fortune 500), which earned $3.1 billion. Both banks beat forecasts and said that results were helped by improvement in consumer lending businesses.
But the report comes a day after the bank disclosed in an SEC filing how it made an accounting blunder that concealed billions of dollars in debt from investors by incorrectly identifying short-term trades as sales instead of borrowings.
"The impact of these transactions was never large enough to have a material impact on Citigroup’s financial statements or our published regulatory capital ratios, including our leverage ratios," Citigroup spokesman Jon Diat said.
The bank initially acknowledged the error in a filing in May.
For the fourth-straight week, gas price averages remained relatively flat, although different areas saw different price movement, according to the Automobile Club of Southern California’s Weekend Gas Watch.
According to the Auto Club, the average price of self-serve regular gasoline in the Los Angeles-Long Beach area is $3.113 per gallon, which is eight-tenths of a cent less than last week, six cents higher than last month, and 24 cents higher than last year.
On the Central Coast, the average price is $3.185, up one-tenth of a cent from last week, six cents higher than a month ago, and 23 cents above last year.
In the Inland Empire, the average per gallon price is $3 payday loan online.096, which is nine-tenths of a cent lower than last week, five cents higher than last month, and 23 cents more than last year.
"While the broader U.S. economic picture remains muddled, the past week showed a large crude oil inventory draw down which some analysts see as a hopeful sign for the economy. We’ll have to see if gas prices are affected in the coming weeks," Auto Club Spokesperson Jeffrey Spring said in a statement.
With a new mandate looming that will require business owners to file millions more tax forms, the Internal Revenue Service has begun the daunting process of figuring out how to turn the law’s sweeping demands into actual rules for taxpayers.
The new regulations, which kick in at the start of 2012, require any taxpayer with business income to issue 1099 forms to all vendors from whom they purchased more than $600 of goods and services that year. That promises to launch a fusillade of new paperwork: An estimated 40 million taxpayers will be subject to the requirement, including 26 million who run sole proprietorships, according to a report released this week by National Taxpayer Advocate Nina Olson.
Olson’s office, which operates independently within the IRS, flagged the new reporting requirements as one of its priority issues for the next year. Like many who have delved into the details of the new rules, Olson is concerned about their far-reaching scope and potential unintended consequences.
"The new reporting burden, particularly as it falls on small businesses, may turn out to be disproportionate as compared with any resulting improvement in tax compliance," the Taxpayer Advocate Service wrote in a report released this week.
The new rules are aimed at reducing the "tax gap" between what individuals and businesses owe and what they actually pay. The federal government misses out on estimated $300 billion each year from tax underpayment. The expanded reporting requirements, which Congress slipped into the landmark health care reform bill passed in March, are an attempt to create a paper trail of 1099s exposing business-to-business payments that might otherwise stay off the radar.
But the cost of that paper trail could swamp the small companies, sole proprietors freelancers forced to generate it. Pennsylvania business networking organization SMC Business Councils surveyed its members and found that they currently average 10 filings a year of 1099 forms. The new rules would push that average to more than 200 filings per year for a typical small business, the industry group estimates.
The IRS will have broad leeway to interpret the rules — and it’s already showing signs that it will look for ways to staunch the paperwork flood.
In a late May speech before the two payroll industry trade group, IRS Commissioner Douglas Shulman announced a major exception to the new rules: The IRS plans to exempt transactions made through credit and debit cards. A separate reporting requirement kicks in next year that will cover card transactions and help the IRS spot unreported payments made through those channels, "so there is no need for businesses to report them as well," Shulman said. "Whenever a business uses a credit or debit card, there will be no new burden under the new law."
How much of a sigh of relief you should breathe depends on what kind of purchases your business makes. Some big-ticket consumer items that are typically paid by card — airline tickets or hotel stays, for example — will be 1099-free. But SMC Business Councils President Tom Henschke, a vocal critic of the new law, estimates that exempting credit-card transactions would affect less than 10% of his members’ reporting requirements.
"Most of the small businesses out there that do small business [purchasing] don’t do it by credit card," he said. "One of the reasons is the transaction cost is very high — 2% to 3%."
Henschke thinks the main beneficiaries of the exemption are likely to be credit-card companies, which will gain an added hook to get small businesses to pay their fees pay day loans. Nolan Newman, a Seattle CPA who specializes in small-business needs, says it’s certainly possible that card usage will rise as a result: "If I’m a small business and I use my credit card moderately, would I try to increase my volume with which I pay vendors with it? Maybe."
Henschke foresees another unintended consequence of the new reporting provisions: that in order to cut down on tax forms to be filed, businesses will trim the number of vendors they do business with. "I’ve actually heard businesses talking about consolidating their purchases, going from 150, 200 vendors, down to less than 100," he said. "That will most certainly lead to some small businesses being swept under the door."
The taxpayer advocate’s office shares that concern. "Many large vendors already have computer systems that can track purchases by customer. They are likely to advertise that they will track each customer’s total purchases and send them a report at the end of the year that business customers can use to comply with the Form 1099 filing requirement," the office wrote in its report. "Small businesses that lack the capacity to track customer purchases may lose customers, leaving the economy with more large national vendors and less local competition."
That was just one of seven major pitfalls the Taxpayer Advocate Service foresees in the new rules. It also questions whether they will actually do much to close the tax gap. Because of product returns and other complications, the payments documented by the 1099 trail won’t match up cleanly against the revenue businesses report. "The IRS will face challenges making productive use of this new volume of information reports," Olson’s office concluded.
That could help explain one otherwise puzzling aspect of the new tax law, which is that despite the sweeping reporting requirements, the Joint Committee on Taxation — a nonpartisan Congressional committee that analyzes pending tax legislation — estimated that it would bring in only about $2 billion a year in new tax revenue. Committee staffers wouldn’t comment on the record.
"Judging from the estimate that the committee has made, they didn’t think it was that far-reaching," said Eric Toder of the Tax Policy Center, a nonpartisan think tank. "Does it close a lot of the tax gap? No."
The IRS did not return repeated calls and e-mails asking for clarification on its timeline for drafting the new regulations.
In his talk to accountants in May, Shulman put off questions about the expanded 1099 reporting, saying that even the idea of exempting credit-card transactions was just "an example of where we are headed, not as a complete implementation plan." The agency is currently seeking public comment on how it should implement the new rules.
The IRS has some leeway in implementing the new law — but only some. "The regulations are supposed to implement the intent of Congress; they’re not supposed to be independent policy-making," Toder said. "But obviously, there’s some discretion there."
Shulman himself hinted that it may take new legislation — not just IRS regs — to fix what Congress has wrought. "We won’t hesitate to consider alternate approaches," he said in his speech, "including working with Congress to address any potential implementation issues that may arise during this process."
Results of a Field Poll that measured voter awareness and sentiment toward four of 10 propositions slated to appear on the state’s November general election ballot were released Friday.
Voters are opposing Proposition 23, the initiative to suspend AB 32, California’s greenhouse gas reduction law, and Proposition 19, the marijuana legalization initiative, and supporting Propositions 25 and 18, the Field Poll said.
Proposition 25 would require a majority vote to approve the state budget while retaining a two-thirds vote to increase taxes, while Proposition 18 is an $11.1 billion bond measure to fund water supply and protection facilities.
Voter awareness of the measures varied widely, according to the survey. More than three in four likely voters (77 percent) report some familiarity with Proposition 19, the marijuana legalization initiative. Most voters (56 percent) also had heard of Proposition 25, which would change vote requirements needed to pass the state budget.
Fewer potential voters (39 percent) had heard of Proposition 23, which would suspend AB 32, or water bond measure Proposition 18 (24 percent).
According to the Field Poll:
The poll has a sampling error rate of plus or minus 3.2 percentage points for likely voters and a higher margin for subgroups. Pollsters surveyed 1,005 people by telephone between June 22 and July 6.
The Office of Thrift Supervision and U.S. Small Business Administration are among sponsors of two upcoming information-sharing sessions for small business owners and lenders.
The sessions, scheduled for July 14, will be held at BlueCross BlueShield building at 257 West Genesee Street in downtown Buffalo.
The first is for lenders and will run from 8:45 a.m. to 12:30 p.m. Participants will learn how to enhance small business lending, risk mitigation, alternate sourcing of business financing and about government programs. The second session starts at 1:00 p.m. and is geared toward small business owners. Among the topics it will cover are accessing credit, government-sponsored programs and tax issues. Lenders will be on hand to work with small business owners.
“We want to focus on best practices that financial institutions have in terms of lending to small businesses that typically do not qualify for banks’ regular small business programs,” said Office of Thrift Supervision spokesman Francis Baffour payday loans guaranteed no fax.
Other sponsors include New York State Banking Department, Federal Reserve Bank of New York and the Office of the Comptroller of the Currency.
“What we are trying to do is encourage institutions to become SBA guaranteed lenders,” Baffour said.
For more information, visit the Office of Thrift Supervision Web site at http://www.ots.treas.gov/index.cfm?p=InteragencySmallBusinessLendingForumWorkshop.
Fitch Ratings agency said it will have to downgrade Blockbuster’s ratings to “restricted default” or “default” if the company fails to make a $42.4 million payment to creditors next month.
The payment was originally due July 1, but Blockbuster received an extension from bondholders who hold 70 percent of the outstanding principal on the senior secured notes, which are due in 2014. Blockbuster now has until Aug. 13 to make a payment.
Fitch said Blockbuster’s ratings are okay for now, but will become a problem if they miss another payment when the extended deadline hits.
Fitch said it will downgrade Blockbuster’s issuer default rating to ‘RD’ from ‘C’ if the company ends up defaulting again or receiving another extension on Aug cash advance in one hour. 13. In the alternative, the ratings giant said it will downgrade the company’s issuer default rating from ‘C’ to ‘D’ if the company ends up filing for bankruptcy or entering into a similar procedure on or before Aug. 13.
New York-based ratings agency Standard & Poor’s also reacted to Blockbuster’s rough Thursday. The company lowered its corporate credit rating on Blockbuster to ‘SD’ from ‘CC’, and the company’s ratings on Blockbuster’s $675 million senior secured notes were downgraded to ‘D’ from ‘CC.’
As world leaders gather in Canada to discuss ways to strengthen the global economy, lawmakers in the United States finalized a bill Friday that would impose a $19 billion tax on financial institutions.
The tax, which is part of a sweeping overhaul of the U.S. financial system, comes after policymakers in the United Kingdom, France and Germany moved ahead with plans to impose new bank taxes this week.
Given those steps, analysts expect leaders to discuss bank taxes at the G-20 summit this weekend. In a Tuesday letter to fellow G-20 members, the leaders of France and Germany called for "an international agreement to introduce a levy or tax on financial institutions."
But plans to impose a global bank tax were scratched at the last G-20 meeting earlier this month in South Korea. Canada, Brazil and Japan opposed the idea, noting that banks in their countries did not require government aid during the financial crisis.
While the taxes vary from country to country, the reasoning behind them is basically the same: to ensure that banks are responsible for the risks they take and not taxpayers.
"The failures of the banks imposed a huge cost on the rest of society," said George Osborne, the U.K. Chancellor of the Exchequer. "I believe it is fair and it is right that in the future banks should make a more appropriate contribution, which reflects the many risks they generate."
Osborne made the remarks Tuesday in unveiling one of the most stringent budgets in decades lowest fee payday loans. The budget calls for a levy on bank liabilities that is expected to raise 2 billion British pounds annually.
In the United States, the proposed $19 billion tax would cover the cost of implementing financial reform. President Obama is expected to sign the bill in July.
The tax would apply to banks with more than $50 billion of assets and hedge funds with over $10 billion in assets. It would be assessed based on how much risk an institution takes and is expected to raise $4 billion a year over the next five years.
In addition, Congress is considering a $90 billion "financial crisis responsibility fee" as part of President Obama’s 2011 budget proposal. The so-called bailout tax would be paid largely by major financial institutions that contributed to the financial crisis, and were the biggest beneficiaries of extraordinary government actions.
While the banking industry supports some key principles of reform, bankers are concerned that certain regulations will hurt consumers, according to Edward Yingling, president of the American Bankers Association.
"The consequences involved are very real and will have a very negative impact on traditional banks, on consumers and on the broader economy," Yingling said in a statement.
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