The U.K. government should aim to balance its budget two years earlier than currently planned to calm investor concerns the country could lose its top-notch credit rating, the Confederation for British Industry said.
The budget deficit should be eradicated by March 2016, the London-based employers’ group said in proposals submitted to Chancellor of the Exchequer Alistair Darling before his budget this month. This should be achieved through spending cuts and reforms to public services rather than tax increases, it said.
“There is a need to restore macro-economic stability and that depends on getting current levels of government borrowing down,” CBI Director General Richard Lambert told a press conference in London on March 4. “The government is not ambitious enough on that front. It hasn’t set out its spending plans in enough detail. The 2017 date is too far away.”
With an election due by June, the debate over how to tame a deficit equal to Greece’s has taken center stage as some investors and the opposition Conservatives warn Britain’s credit rating is at risk.
Prime Minister Gordon Brown has pledged to halve the gap, set to exceed 12 percent of economic output this year, by March 2014 and says Conservative plans to begin spending cuts this year risk plunging the economy into a “double-dip recession.”
“The economy is still in a very fragile shape,” Lambert said. While the CBI is not proposing “any silver bullets in the short-term,” the process of cutting the deficit “should get under way seriously in 2011.”
Poll Outlook
Polls suggest Britain may be heading for its first minority government since 1974, sparking concern that efforts to cut the deficit may be compromised.
“The scale of our budget deficit and the likely tightening we are going to need does look a lot more serious than in any other G-7 country,” Lambert says. “We are confident that the U.K.’s credit rating is sustainable. The big picture is to get credibility.”
A survey showed that 86 percent of U.K. business leaders said that current levels of public spending needed to be reduced, while 72 percent said cuts should start this year, the Institute of Directors said in a separate e-mailed report today. The lobby group, which questioned 1,500 people between Feb. 26 and March 4, also found that 71 percent said the deficit was a top priority of a new government in its first 100 days.
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Germany’s Axel Weber leads the race to succeed Jean-Claude Trichet as president of the European Central Bank and Portugal’s Vitor Constancio is likely to be his deputy, a survey of economists shows.
Of 27 economists in the Bloomberg News survey, 24 said Weber will be chosen to replace Trichet, whose term ends on Oct. 31 next year. Only three picked Italy’s Mario Draghi, Weber’s main rival for the job. Twenty economists said Constancio will succeed Lucas Papademos as vice president when his term expires on May 31 this year. Euro-region finance ministers are due to vote on the vice president post today.
Jockeying for the ECB presidency has already started as governments across the 16-nation euro region grapple with a fiscal crisis that has prompted investors to question the sustainability of the monetary union. Installing Weber at the ECB’s helm next year would give Europe an outspoken inflation fighter who has stressed the need for fiscal discipline to protect the euro.
“Weber has a very strong personality and will definitely give the euro a very powerful and visible face,” said Laurent Bilke, a former ECB economist now at Nomura International Plc in London, who expects Bundesbank President Weber to win. “He’s a recognized economist and will make a difference. Under him, the ECB may even grow in its international stature.”
Weber’s Influence
Weber, 52, has sped to the top of European policy making. Like Federal Reserve Chairman Ben S. Bernanke, he is a former academic. He joined the Bundesbank as president from the University of Cologne in 2004 after a scandal over hotel expenses forced predecessor Ernst Welteke to resign.
Weber quickly established himself as one of the most influential of the ECB’s 22 Governing Council members, often pre-empting policy shifts and moving currency and bond markets with his comments.
He landed on Trichet’s so-called “Black List” last November by revealing the ECB would tighten its lending to banks. The remarks breached ECB protocol that major announcements be made by the president and also came within a week of a council meeting, when officials are supposed to refrain from commenting on policy.
Weber is perceived by economists as one of the ECB’s toughest inflation-fighting “hawks” because of the emphasis he places on curbing risks to price stability.
Hawks and Doves
If Constancio wins the ECB vice presidency, he would strengthen Weber’s chances by lending balance to his ticket. Constancio, Portugal’s central bank chief, is known as a “dove” who pays more attention to economic growth. Between them they would also ensure representation from northern and southern Europe at the top of the ECB.
Luxembourg’s Yves Mersch and Belgium’s Peter Praet are also on the ballot for the vice presidency business cards design. If finance ministers pick Mersch, who like Weber has a reputation as an inflation hawk, Draghi’s chances of replacing Trichet would rise.
Draghi, 62, left Goldman Sachs Group Inc. to become governor of the Italian central bank in January 2006. He replaced Antonio Fazio, who resigned after a criminal investigation was opened into his handling of Italian bank mergers. A former economics professor like Weber, Draghi chairs the Financial Stability Board and has pushed for limits on bankers’ pay and stronger capital requirements.
A spokesman for Italian Prime Minister Silvio Berlusconi said last week that the government backs Draghi for the ECB job.
‘Neck and Neck’
German Chancellor Angela Merkel has won French President Nicolas Sarkozy’s support for Weber’s candidacy, German magazines Spiegel and WirtschaftsWoche reported this month.
“It will be a neck-and-neck race,” said Holger Sandte, chief European economist at WestLB Equity Markets in Dusseldorf, who expects Draghi to win. “Policy makers probably want someone who’s a bit more diplomatic than Weber,” he said, adding the ECB “resides in Frankfurt and it’s pretty much designed in a German way.”
Germany, Europe’s largest economy, hasn’t held a major European policy position since Walter Hallstein led the Commission of the European Economic Community from 1958 to 1967. It didn’t put up a candidate when the ECB’s first president was picked in 1998, pushing instead for Wim Duisenberg of the Netherlands in exchange for the ECB being headquartered in Frankfurt, Germany’s financial capital.
The decision on Trichet’s successor “ultimately comes down to politics,” said Nick Matthews, senior economist at Royal Bank of Scotland Group Plc in London, who believes Weber will prevail. “I would imagine the argument that ‘it’s Germany’s turn’ is being used in the discussion.”
Musical Chairs
Whoever takes over from Trichet, the ECB’s six-member Executive Board may need to be reconfigured to ensure one country doesn’t dominate it.
With Juergen Stark and Lorenzo Bini Smaghi, Germany and Italy are already represented on the board. Economists said one of them will probably have to step down before his term expires to make way for Weber or Draghi and avoid giving either country too much weight in the ECB’s decision making.
“Stark will be upgraded to Bundesbank president,” said Carsten Brzeski, senior economist at ING Group in Brussels, who believes Weber will win the race. “Stark is a good Prussian. He’s dutiful and does everything that’s good for his fatherland. He’ll clean his desk.”
Australia’s central bank said economic growth will continue to accelerate this year even if policy makers are forced to raise the benchmark interest rate by another three quarters of a percentage point.
The economy will be growing at an annual pace of 3.25 percent in the three months through December 2010, up from 2 percent last quarter, the bank said today in Sydney. Officials based their forecast on an assumption that the overnight cash rate target will climb to 4.5 percent this year, in line with market estimates.
Reserve Bank Governor Glenn Stevens unexpectedly kept borrowing costs unchanged this week, saying information about the impact of the bank’s record three increases last quarter “is still limited.” A report this week showed retail sales unexpectedly fell in December for the first time in five months and stock markets tumbled today amid increasing concern that the global recovery may falter.
“They are uncertain and waiting for more information,” said Su-Lin Ong, senior economist at RBC Capital Markets Ltd. in Sydney. “It looks like they need greater justification to tighten further. They need to see a broadening in global growth.”
The Australian dollar traded at 86.57 U.S. cents at 12:37 p.m. in Sydney from 86.90 cents before the statement was released. The two-year government bond yield fell 4 basis points to 4.05 percent. A basis point is 0.01 percentage point.
Stocks Fall
Australia’s S&P/ASX 200 Index dropped 2.8 percent to 4,493.40 at 12:05 p.m. in Sydney, setting the benchmark gauge on course for its lowest close in five months.
While interest rates are “no longer at exceptionally low levels,” it is “likely” that borrowing costs will be increased further over time to ensure inflation stays within Stevens’s target range of between 2 percent and 3 percent, the bank said in its quarterly monetary policy statement.
Stevens became the first central banker in the world to raise borrowing costs three times last year after Australia’s economy skirted the global recession, helped by A$20 billion ($17 billion) in cash handouts to consumers from Prime Minister Kevin Rudd and another A$22 billion in spending on roads, railways and schools.
U.S., Europe
By contrast, officials in the U.S., the U.K. and Europe have kept their benchmark lending rates at historic lows, partly on concern that recoveries in their economies will be hampered by high unemployment and weak consumer sentiment.
Australia’s economy will expand 2.5 percent in the June quarter of 2010 from a year earlier, and 3.5 percent in the year through June 30, 2011. Three months ago, the bank predicted growth rates of 2.25 percent and 3.25 percent respectively.
Core inflation will cool this year to an annual pace of 2.5 percent from 3.25 percent, before accelerating again to 2.75 percent in 2011.
The bank said those forecasts are based on the “technical assumption” of an increase in the cash rate, “with the assumed path broadly consistent with market expectations as the statement was finalized.”
Money market yields continue to reflect expectations for “further tightening, though at a slightly slower pace” than anticipated three months ago. “The cash rate is expected to reach around 4.5 percent by the end of the year,” today’s statement said.
“They’re being a little more specific and open about” their assumptions about future interest rates, said David de Garis, a senior economist at National Australia Bank Ltd. in Sydney. “They were probably always assuming something similar to the market.”
Rate Bets
Traders are betting there is only an 18 percent chance of a quarter-point increase in the overnight cash rate target when policy makers meet on March 2, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 12:33 p.m.
Today’s forecasts “represent a modest upward revision” to figures released in November, “with recent data suggesting that the economy starts the current upswing in activity with somewhat less spare capacity than earlier thought likely,” today’s statement said.
“It now looks likely that the unemployment rate has peaked at around 5.75 percent, a much better outcome than thought likely early last year,” when the government forecast the jobless rate would peak at 8.5 percent this year.
Australia’s unemployment rate dropped in December to an eight-month low of 5.5 percent after employers added 135,700 jobs between September and the end of 2009, the biggest four- month surge in hiring in more than three years.
Energy Demand
Increased demand for workers is being stoked by a surge in investment by companies such as Chevron Corp., which is expanding its Gorgon liquefied natural gas venture in Western Australia to meeting rising demand from Asia for energy.
“Mining investment is expected to increase further from its already very high level,” today’s statement said. Exports of resources will “grow strongly, reflecting capacity increases resulting from the high level of mining investment over recent years.
“However, growth outside of the mining sector is expected to be only modest, reflecting the reallocation of productive resources within the economy.”
This is partly due to the surge in Australia’s currency, “which has reduced the international competitiveness of import- competing and exporting sectors, including the manufacturing and tourism sectors,” the bank said.
Household Spending
While increased hiring and an annual 13.6 percent surge in house prices last quarter have helped stoke consumer confidence, which jumped in January by the most in six months, “households are still taking a more cautious approach to their spending than was the case a few years ago,” today’s statement said.
One risk to today’s forecasts is whether the nation’s recent economic performance was prompted by a “bring-forward” of spending by consumers and businesses amid last year’s earlier interest-rate cuts and government spending, the bank said.
“If so, underlying growth would be soft into 2010 as the effects of the temporary stimulus fade,” the bank said. This may be offset by “the improvement in the outlook in the resources sector” which is “clearly not due to temporary policy factors.”
There are also questions about the durability of recent growth in the world’s largest economies, which have been boosted by temporary fiscal measures and the restocking of inventories by companies, today’s statement said.
“For a sustained recovery to take hold, a substantially stronger pick-up in private demand than has been evident to date will be required,” the bank said. “Many of these countries also face very significant fiscal challenges that will need to be addressed over time.”
Kellwood Co., a privately held apparel company based in Town and Country, announced today that it has bought ISIS, an company that focuses on women’s outdoor apparel. Terms of the deal were not disclosed.
ISIS, which is based in Vermont, sells its clothes mostly through various outdoor retailers such as REI and the Alpine Shop.
Kellwood said in a news release that it has been impressed by ISIS’ consistent growth since its founding in 1998. Kellwood hopes to double ISIS’ sales over the next four years by continuing to aggressively expand its distribution channels through more speciality dealers and through its online business.
"In an otherwise challenging retail and fashion marketplace, ISIS continues to perform well, with solid operations, a loyal customer base, and a track record of growth," Michael Kramer, president and CEO of Kellwood, said in a statement.
Greece sold 2 billion euros ($2.9 billion) of floating-rate notes privately to banks, eight days after Fitch Ratings downgraded the nation’s debt as the government struggles to cut the European Union’s largest budget deficit, two bankers familiar with the transaction said.
The securities, which mature in February 2015, will yield 250 basis points, or 2.5 percentage points, more than the six- month euro interbank offered rate, or Euribor, they said. That’s 30 basis points higher than a similar-maturity Greek fixed-rate bond when converted into a floating rate of interest, according to data compiled by Bloomberg.
Greek bonds have fallen in the past week, with two-year note yields rising by the most in more than a decade on Dec. 8, when Fitch cut the nation’s credit rating to BBB+, the lowest in the euro region, citing the “vulnerability” of the nation’s finances. Prime Minister George Papandreou has been unable to convince investors he can reduce a deficit the government says will rise to 12.7 percent of gross domestic product this year, after the economy shrank 1.7 percent in the third quarter.
“Selling bonds via a private placement can be a double- edged sword at this point,” said Luca Cazzulani, a fixed-income strategist in Milan at UniCredit Markets & Investment Banking. “On the one hand, it shows that Greece can always find buyers for their bonds. But the market might take it as a sign that they only have this channel left.”
Widening Spread
Greek bonds rose snapped two days of declines today, with the yield on the 10-year note dropping 11 basis points to 5.62 percent as of 10:26 a.m. in London. It rose as much as 29 basis points yesterday to 5.76 percent, the highest since April 3.
Concern some countries may struggle to pay their debt was reignited after Dubai’s state-owned Dubai World said on Dec. 1 it wanted to restructure $26 billion of debt. The premium, or spread, investors demand to hold Greek 10-year bonds instead of German bunds, Europe’s benchmark government securities, rose as high as 250 basis points yesterday, the highest closing level since April 2. It narrowed to 239 basis points today guaranteed payday loans.
The participating banks in yesterday’s private placement were National Bank of Greece SA, Alpha Bank AE, EFG Eurobank Ergasias SA, Piraeus Bank SA and Banca IMI SpA, the bankers familiar with the transaction said. Italy’s Banca IMI was the only foreign-based in the group.
Worst Performers
The government paid “generous” terms, said Wilson Chin, a fixed-income strategist in Amsterdam at ING Groep NV.
“I guess you have to pay some liquidity premium, given the sale was done at the end of the year,” he said. “I would be very surprised if they continue to use this method into the first quarter of next year. That would probably be taken as a sign the market isn’t working for them.”
Greek bonds are the worst performers after Ireland among the debt of so-called peripheral euro-region countries this year, handing investors a 3.5 percent return, according to Bloomberg/EFFAS indexes.
In a private placement, issuers offer securities directly to chosen private investors as opposed to selling them through an auction or via a group of banks.
Papandreou pledged in a speech two days ago to begin reducing the nation’s debt, set to exceed 100 percent of GDP this year, from 2012. The European Commission estimates the ratio at 112.6 percent of GDP this year, second only to Italy.
‘Painful Decisions’
“In the next three months we will take those decisions which weren’t taken for decades,” Papandreou said in Athens. He said many choices will be “painful,” though he promised to protect poorer and middle-income Greeks.
Credit-default swaps on Greece rose 1 basis point to 238.5, according to CMA DataVision, after surging 25.5 basis points yesterday. Such swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should an issuer fail to adhere to its debt agreements. A basis point on a contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.
Treasury Secretary Timothy Geithner said the government is unlikely to recoup its investments in insurer American International Group Inc. or the automakers General Motors Co. and Chrysler Group LLC.
Geithner, in testimony today before the Congressional Oversight Panel, also said he chose to extend the $700 billion Troubled Asset Relief Program to give the Obama administration more time to unwind its bank-rescue efforts. The economy faces “significant headwinds,” and housing markets remain dependent on government support even as they are stabilizing, he said.
Still, U.S. financial and economic conditions have improved, Geithner told the panel in Washington. The Treasury now expects to make money on its banking investments, if not on its efforts to stabilize the automobile and insurance industries.
“It’s unlikely that we will be repaid for all of our investments in AIG, G.M. and Chrysler,” Geithner said.
The Government Accountability Office yesterday said that U.S. taxpayers will lose $30.4 billion from the auto-industry bailout, down from a prior estimate of $43.7 billion. The GAO report predicted a similar loss of $30.4 billion in AIG, down from a previous estimate of $31.5 billion.
Bank Repayment
Asked about future repayment by the largest banks still with government investments, Geithner said it is “generally desirable” that they raise all the money they need to repay in equity offerings.
“Cleaner exit is better than a staged exit,” he said. “I’m not sure that is going to be possible in every circumstance.”
While he didn’t discuss Citigroup Inc.’s efforts to extricate itself from the TARP, Geithner did note Bank of America Corp.’s repayment, which came yesterday. “I got a check for $45 billion,” he said, adding that was a “good thing.”
Under questioning by panelists, Geithner defended the government’s handling of last year’s AIG rescue, which has come under fire because banks were given the full value on credit- default swaps purchased from the New York-based insurer. Geithner was president of the New York Federal Reserve at the time and had a leading role in the bailout.
“You cannot selectively default on contractual obligations without courting collapse,” Geithner told the panel, explaining why the government paid banks 100 cents on the dollar. “There is no other way in the context of that storm to protect the economy from that failure.”
Extend TARP
The Treasury chief also faced skepticism about his decision to extend the TARP until next October.
The program is “essentially a blank check to finance any macroeconomic stimulus initiative that the executive branch can imagine, to the tune of hundreds of billions of dollars,” said panel member Paul Atkins, a former Republican member of the Securities and Exchange Commission easy payday loans.
“The economy would not be growing again without TARP,” Geithner said.
The U.S. economy expanded at a 2.8 percent annual rate in the third quarter after shrinking for a year. The economy will expand 2.6 percent in 2010, according to the median forecast of 58 economists surveyed by Bloomberg News this month. The jobless rate will average 10 percent next year.
Assisting AIG
While assisting AIG and the auto companies will cost taxpayers, the Treasury predicts a $19 billion profit on its banking investments, Geithner said.
Long-term TARP costs will be no higher than $140 billion, the Treasury said. The ultimate return will depend on how the economy fares, Geithner said.
The Treasury expects “substantial income” from sales of TARP warrants, received as part of the government’s investment in banks, in coming weeks, Geithner said. He said that auctions will often bring the highest returns for the government.
Banks that pay back their capital injections must also dispose of the warrants that the Treasury received, either by repurchasing them or allowing the department to sell them. Goldman Sachs Group Inc. redeemed its warrants for $1.1 billion, while JPMorgan Chase & Co. opted to allow the government to auction its warrants after the Treasury rejected an appraisal as too low.
Personnel Shift
Geithner appeared before the panel, led by Harvard law professor Elizabeth Warren, as it prepared for a personnel shift. Representative Jeb Hensarling, a Texas Republican, resigned yesterday.
Hensarling, who is being replaced by Dallas attorney Mark McWatters, has repeatedly criticized the bailout. George Rasley, a spokesman for the congressman, said Hensarling had agreed to stay on the panel for the expected duration of the TARP. The effort was set to expire Dec. 31 until Geithner extended it yesterday.
In his testimony, Geithner told the panel that the Treasury can’t force small banks to participate in initiatives aimed at stimulating small-business lending. He said these programs have been less successful than hoped because banks have been wary of submitting to the extra regulation that comes with taking TARP aid.
Geithner said parts of the securitization markets are “still impaired,” especially for securities backed by commercial mortgages. He also hailed improvements in the markets for asset-backed securities, which he said are no longer as dependent on publicly supported markets like the Federal Reserve’s Term Asset-Backed Securities Lending Facility.
Canadian Tire Corp., one of the nation’s most iconic retailers, introduced a dollar coin on Wednesday to complement its multi-hued, low-denomination stable of widely hoarded bills.
The move, first reported in the Star on Wednesday, puts an end to speculation that Canadian Tire was ready to eliminate its popular paper money loyalty program.
"Over the years the high-valued program has evolved to include electronic "Money" on Canadian Tire branded credit cards, as well as the addition of special promotions which now includes this limited edition $1 Canadian Tire coin," Canadian Tire Retail president Mike Arnett said in a release this morning.
The coin was created by the Royal Canadian Mint and will be given to customers who spend $25 or more at a Canadian Tire store on Dec. 5th or 6th.
The company held a press conference this morning to make the announcement, where Arnett also announced the company would develop and test a new rewards program throughout 2010.
However, a copy of a flyer destined for Canadian Tire stores in Quebec, obtained by the Star on Tuesday, shows an ad for a limited edition one-dollar coin. Images of the coin had also been posted on collectors’ websites, revealing it to look a bit like a quarter, with the Canadian Tire logo on one side and the beaming fictional Scotsman Sandy McTire on the other.
In a digital economy, Canadian Tire money is quite literally throwback to an era of physical cash and human interaction that scarcely exists in this online age of speedy and efficient consumption.
But a decision to cancel the paper money program would surely shock the nation - not least, the money’s ardent collectors - even if the retailer has already moved to a parallel electronic rewards program using a credit card and electronic Canadian Tire money.
"Whenever my dad went and got stuff for the house, he’d give me the money," said Roger Fox, 64, who has been collecting Canadian Tire bills since 1963, is a past-president of the Canadian Tire Coupon Collectors Club and wrote a chapter on the subject for a book published by the Royal Canadian Numismatic Association. The coin is a dramatic introduction for collectors such as Fox: Is it a heartbreakingly thrifty move away from paper money or a reassertion of the importance of the rewards program?
"They may be cutting back their printing costs while at the same time not eliminating Canadian Tire money altogether, but replacing say, the 50 cent, dollar, and two dollar (bills) with a coin," Fox said, adding, "I’m just thinking out loud, that’s all. I have no proof."
Canadian Tire has been making a gradual shift away from emphasizing its paper money.
The company’s exclusive credit card, Options Mastercard, introduced in 2000, lets shoppers accumulate Canadian Tire money wherever they shop, at a better rate than using cash.
In its promotions, the company refers to it as "Canadian Tire money rewards" - with quotation marks around money.
Customers now receive paper money only if they use cash or debit.
Jerome Fourre, a collector since 1985 from the Montreal area, said that after a golden age of 5 per cent Canadian Tire money returns - $5 for every $100 spent - the current return is more like 0.4 per cent, or 40 cents for every $100 spent.
The company does not release such details on the loyalty program and refused, not for the first time, to comment on Fourre’s calculations.
"Canadian Tire money was originally to get people to pay cash," said Fourre.
"In 2009, cash is not what they want."
For its part, the company said it has no immediate plans to cancel the beloved bills, though it is obviously trying to yank its rewards program into the modern era.
Collectors such as Fourre and Fox - part of a national subculture of clubs, meetings and exhibits devoted to Canadian Tire money - want to see the paper bills survive, though eliminating them would probably up the value of their stashes.
"When it’s on plastic it’s not something you have tangible in your hand," Fox said.
"It’s as if you’re getting something for free.
"Who doesn’t want something for nothing?"
Beth Daniels had a big problem.
Orders were coming in for her "Around the Table" conversation games, so she ordered a lot of inventory. Then she and her husband, Tom Daniels, looked at each other. "How are we going to come up with the money for this?" she asked. "We were in crisis mode for sure."
Daniels found the answer in the Missouri Small Business Loan program, run by the state Department of Economic Development.
Daniels, of Eureka, invented a series of games consisting of questions printed on cards. They are designed to get conversations started, with questions such as "What’s the funniest hair style ever?" Or "What’s the one thing you can’t live without?" There are varieties for families, grandparents, teens, camps and buddies.
Daniels, an occupational therapist turned work-at-home entrepreneur, just landed a contract with Cracker Barrel restaurants, and she expects sales of over $100,000 this year. But she has to pay to produce the games before she can sell them.
The Missouri Small Business Loan program provides loans of $2,500 to $25,000 to companies with five or fewer employees. The state allocated $2 million for the program this year, and less than half of it has been lent.
Daniels got a $25,000 loan at 3 percent interest. Problem solved.
More information on the loan program can be found at http://ded.mo.gov.
Wells Fargo Financial will close three stores on the Big Island and Kauai next week as part of a plan to consolidate its Hawaii operations.
The plan to close the Hilo, Kailua-Kona and Lihue stores is in response to the slow economy, a company spokesman said.
Customers on the Big Island and Kauai will be served by one of the company’s three remaining stores in Wailuku on Maui and in Aiea and Waipahu on Oahu.
The company, which offers home equity and auto loans and credit cards, has 40 employees in Hawaii low fee cash advance.
All of the employees on the Big Island and Kauai were offered the opportunity to transfer to one of the other Hawaii stores or the Mainland, the company said. Most chose to take the transfer offer, but seven employees turned it down and elected to receive a severance package, the company said.
Shares in Exxon Mobil Corp, the world’s largest publicly traded oil company, could rise more than 20 percent to $90 next year if energy prices increase as expected, Barron’s reported on Sunday.
Exxon shares have lagged rivals in the stock market rally this year, falling about 10 percent, but futures contracts anticipate higher energy prices next year that would be a major boost to the company, according to Barron’s November 16 edition.
The Irving, Texas-based company could earn $6.50 a share in 2010 if the higher oil and natural-gas prices materialize, compared to its expected 2009 profit of $4 a share, the newspaper said. Exxon earned a record $8.69 a share in 2008 when oil prices peaked.
Analysts have criticized Exxon for weak production growth, but it has an impressive record for getting a high return on its investments, according to Barron’s. It replaced more than 100 percent of its production in each of the last 15 years and, between 2004 and 2008, its finding costs of $7 a barrel on average were below its peers, Barron’s said.
In addition, Exxon has a relatively low dividend yield of 2.3 percent, which is below several of its rivals, but analysts estimate the dividend could rise another 5 percent or more in 2010, Barron’s reported.
Exxon shares closed at $72.47 on the New York Stock Exchange on Friday.
(Reporting by Elinor Comlay; Editing by Leslie Adler)
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