1. Jamie Kennedy, 52
Famed Toronto restaurateur, an iconoclast champion of local food culture, has strained the patience of his suppliers and bankers as the recession cut sharply into business at Kennedy’s upscale eatery in the Gardiner Museum and cost overruns plagued a badly timed renovation of Jamie Kennedy Kitchens. The Gardiner outlet has been downsized, and Kennedy has offered to sell the Jamie Kennedy Wine Bar and his charcuterie at The Healthy Butcher.
2. Michael Jackson (1958–2009)
Last spring, the late pop superstar defaulted on a
$24.5 million (U.S.) loan backed by his Neverland Estate in Santa Barbara County, Calif., and was forced to sell control of the 1,053-hectare fantasy park. The singer’s debts stood at an estimated $500 million (U.S.) at the time of his death at age 50, reportedly of cardiac arrest, Thursday.
3. Bernie Kosar, 45, former NFL star
Star quarterback of the NFL Cleveland Browns for eight years beginning in 1985, Kosar filed for Chapter 11 bankruptcy June 20, undone by reversals in his real estate and restaurant businesses. His Bernie Kosar’s Steakhouse went out of business last year.
4. Victoria Gotti, 47, daughter of late Gambino family crime boss John Gotti
Daughter of the late crime boss John Gotti, she is behind $650,000 (U.S.) on the mortgage on her $4.2 million Long Island estate, used as the backdrop for her reality TV show, Growing Up Gotti.
5. Damon Dash, 38, co-founder of Rockafella Records
The hip-hop mogul and cofounder, with Jay-Z, of Rockafella Records, counts the likes of Beyonc? and Victoria Beckham as business associates, but faces foreclosure on his two Manhattan apartments worth a combined $7.3 million (U.S.).
6. Veronica Hearst, 64, widow of publishing magnate Randolph Hearst
The New York socialite, widow of publishing mogul Randolph Hearst, lost her $45 million (U insure car insurence.S.), 52-room second home, an oceanfront mansion near Palm Beach, to foreclosure in February 2008.
7. Lenny Dykstra, 46, former Phillies and Mets star
A potent threat to the 1993 World Series-winning Blue Jays, the former Philadelphia Phillies slugger-turned-investment guru lost heavily on The Players Club, a lifestyle magazine for pro athletes and faces foreclosure on his $18.5 million (U.S.) mansion in Thousand Oaks, Calif.
8. Martha Stewart, 67
Stock in the fashion maven’s Martha Stewart Living Omnimedia Inc. has tanked after a $16.8-million (U.S.) loss in this year’s first quarter due to falling magazine ad revenue and sluggish sales of Stewart-branded goods at Kmart. Stewart’s stake in her company has lost 92 per cent of its value since the stock’s 2005 high.
9. Kevin Bacon, 50
The Prominent actor is among the victims of Bernie Madoff’s colossal Ponzi scheme. "I need to work, for obvious reasons," says Bacon, who starred in JFK and Apollo 13.
10. Gordon Ramsay, 42, UK celebrity chef and restaurateur
Rottweiler-mannered TV chef has slashed staff at his restaurants and is reputed to have violated terms of a loan.
11. Annie Leibowitz, 59, Rolling Stone photographer
Veteran Rolling Stone photographer and pioneer in rock-star portraiture has put up her entire body of work as collateral for a multi-million loan to pay off mortgages and other obligations.
12. Lily Allen, 24, UK singing sensation
British singing sensation allowed overspending to catch up with her, and has had to part with her Beemer. "I was hit big time by the credit crunch," Allen says.
President Barack Obama signed an emergency war-funding bill late Wednesday that contains nearly $2.2 billion for eight more of Boeing’s C-17 transport planes.
While the additional C-17 Globemaster III planes and some international orders will allow Boeing to keep its production line going through the summer of 2011, the aerospace company and its supporters are pushing for as many as 15 additional C-17s in next year’s defense budget.
The C-17 supports 5,000 jobs at Boeing’s final assembly plant in Long Beach, Calif., and an additional 900 in St. Louis, where the plane’s cargo door, cargo ramp, landing-gear pods, nose and engine pylons are built. Boeing previously said its line would be shut down in January 2011 if it received no more U.S. orders.
"Boeing is grateful for the bipartisan congressional support the C-17 program continues to receive, along with the recognition that funding for additional C-17s is crucial at a time when America’s need for airlift is growing," the company said in a statement.
Boeing produces about 15 of the planes a year, and the C-17 line has been extended through similar supplemental defense spending measures since 2006.
But this year, Defense Secretary Robert Gates proposed capping production of C-17s at the 205 that are in the fleet and are in the pipeline.
Boeing spokesman Jerry Drelling said the U.S. Air Force orders help keep the price affordable for sale to international customers. Next month, Boeing will deliver the first of three C-17s this year to the NATO-led Strategic Airlift Capability consortium, he said paydayloans.
Qatar has ordered two of the aircraft, and the United Arab Emirates has announced its intent to buy some of the aircraft. Negotiations are under way, Drelling said.
U.S. Sen. Christopher "Kit" Bond, R-Mo., called the eight aircraft in the emergency funding bill a "win" for national security and St. Louis area defense workers.
"Looking forward, to preserve our nation’s only large airlift line in production, we will need a combination of foreign and Department of Defense sales," Bond said. "Our military and national security will be better served with a force mix of more C-17s and fewer of the obsolete and unreliable C-5As."
U.S. Senator Claire McCaskill, D-Mo., said the C-17 is "important to jobs in St. Louis and important to our national security," but she added that the program to fund more of the cargo jets faces significant headwinds in the future.
In signing the bill, Obama said the legislation "will make available the funding necessary to bring the war in Iraq to a responsible end, defeat terrorist networks in Afghanistan and further prepare our nation in the event of a continued outbreak of the H1N1 pandemic flu."
U.S. travel over the Independence Day holiday weekend will drop 1.9% this year compared to 2008, a casualty of higher fuel prices and economic worries, travel and auto group AAA projected Wednesday.
Approximately 37.1 million Americans will travel 50 miles or more away from home during the Fourth of July holiday weekend, typically the busiest time for auto travel in the U.S., down from 37.8 million last year.
"Many Americans remain cautious about the outlook for their personal finances and these attitudes are reflected in the slight decline in travel we are forecasting for the upcoming holiday weekend," said AAA Chief Executive Robert L. Darbelnet.
Ongoing fears about the state of the economy coupled with increasing joblessness and falling incomes are major factors in reducing Fourth of July travel, AAA said.
Auto travel will drop 2.6% from last year’s levels due to higher fuel prices. But air travel, which will account for just 5% of Fourth of July travel, will increase 4.9% due to lower fares and pent-up demand.
Gasoline prices are more than 30% lower than they were a year ago, but recent increases at the pump will steer Americans away from road trips, AAA said faxless payday loan.
On Tuesday, average U.S. retail gasoline prices were $2.68 a gallon, about 11% higher than a month ago, according to AAA.
Attractive airfares are also likely to contribute to less auto travel, AAA said.
AAA’s forecast for the July 4 weekend is the opposite of the forecast for the Memorial Day holiday weekend in May, when AAA predicted a 1.5% increase in travel from 2008 levels, with automobile trips increasing 2.7% and air travel dipping 1%.
Despite the gloomy news keeping more Americans at home this summer, those who do venture out on vacation will find some good bargains.
The lowest average published airfares over the holiday weekend are expected to decrease 16% from last year and hotel rates are also expected to be cheaper than last year.
"Those who do vacation this summer will find a plethora of attractive discounts," Darbelnet said. "If you can afford to go, this summer is a smart time to travel."
A committee of St. Louis aldermen will consider a plan today to help the city get more control over its thousands of privately owned vacant buildings.
The board’s Neighborhood Development subcommittee will hold a hearing on a bill to create a vacant building registry to charge owners of the buildings an annual fee and to make them provide local contact information to deal with problems at the property.
Some local real estate and development groups have criticized the bill, concerned about potentially having to pay fees for houses that take a long time to sell affordable health insurance with good benefits.
"It’s very frustrating to try and track down the owners of these buildings," said Alderman Kacie Starr Triplett. "We will now be able to hold people accountable."
The hearing starts at 1 p.m. in City Hall, Room 208.
(Tim Logan)
The Nasdaq surged Friday and the broader market struggled at the end of the first down week in a month for Wall Street.
The Dow Jones industrial average (INDU) lost 16 points, or 0.2%. The S&P 500 (SPX) index added 3 points or 0.3%. The Nasdaq composite (COMP) rose 20 points or 1.1%.
Blue chips posted slim gains Thursday after better-than-expected reports on the labor market and manufacturing helped counter a recent batch of mixed economic news. The revived optimism remained in play Friday.
But Friday was also under the influence of the quadruple options expiration, or "quadruple witching," a quarterly event in which stock index futures and options and individual stock futures and options all expire at the same time. It creates volatility in the underlying stocks, particularly toward the end of the session.
"We need to get past the quadruple witch and then next week we’ll see where we are," said Rick Bensignor, chief market strategist at Execution LLC.
"I think the highs we saw a week ago were probably the highs we’ll hold on to for the near term," he said.
Since bottoming March 9 at a 12-year low, the S&P 500 had run up 40% through last week. But stocks closed lower this week on worries that the rally may have outpaced any signs of recovery.
Bensignor said that the market is at a critical point technically and is vulnerable to a bigger pull back in the short term.
Next week brings reports on housing, durable goods orders and the labor market. The Federal Reserve holds a two-day meeting to discuss monetary policy.
Jobs: The jobless rate rose in nearly every state in the nation in May, the government reported. One state — Nebraska — registered a decline and Vermont saw no change.
Michigan led the nation with a 14.1% jobless rate, followed by Oregon with a 12.4% rate. For the full year, jobless rates were higher in all 50 states and the District of Columbia.
However, the labor market typically lags any other broader recovery in the latter stages of a recession, so the day’s jobless numbers didn’t seem to impact investors looking for signs of a broader stabilization.
A number of recent indicators have suggested the job market is starting to stabilize, but that hasn’t helped the millions of unemployed Americans looking for work.
iPhone: Apple (AAPL, Fortune 500)’s iPhone 3G S went on sale Friday, and was expected to sell as many as 500,000 copies this weekend, according to a Piper Jaffray analyst. The third generation of the iPhone features a better camera that includes video capturing and editing capabilities, a longer-lasting battery, voice-command control and a built-in digital compass cheap cash advance.
The 16-gigabyte version costs $199 with a new contract with AT&T (T, Fortune 500) and the 32-gigabyte version costs $299 with a new activation. Apple will also still sell an 8-gigabyte version for $99.
Apple shares gained 2.7% Friday.
On the move: Falling commodity prices dragged on the underlying stocks, keeping the blue chips in negative territory.
Dow oil components Chevron (CVX, Fortune 500) and Exxon Mobil (XOM, Fortune 500) slipped. Other Dow losers included Boeing (BA, Fortune 500), Caterpillar (CAT, Fortune 500), Coca-Cola (KO, Fortune 500), Procter & Gamble (PG, Fortune 500) and Wal-Mart Stores (WMT, Fortune 500).
Components Hewlett-Packard (HPQ, Fortune 500) and Microsoft (MSFT, Fortune 500) gained, offsetting the losses.
Microsoft was higher after Goldman Sachs added the software leader to its "conviction buy" list, according to reports.
JPMorgan Chase (JPM, Fortune 500), Bank of America (BAC, Fortune 500) and American Express (AXP, Fortune 500) all gained, along with the broader financial sector. The KBW Bank (BKX) sector index rose 2%.
Late Thursday, Research in Motion (RIMM) reported higher quarterly earnings that topped estimates and higher revenue that missed estimates. The BlackBerry maker also forecast current-quarter earnings that are above forecasts and sales at the low end of forecasts. Shares fell almost 5% Friday.
Market breadth was positive and volume was heavy because of the quadruple options expiration. On the New York Stock Exchange, winners topped losers three to two on volume of 2.13 billion shares. On the Nasdaq, advancers beat decliners three to two on volume of 3.01 billion shares.
Bonds: Treasury prices inched higher, lowering the yield on the benchmark 10-year note to 3.82% from 3.83% Thursday. Treasury prices and yields move in opposite directions.
Other markets: U.S. light crude oil for July delivery fell $1.82 to settle at $69.55 a barrel on the New York Mercantile Exchange.
COMEX gold for August delivery rose $1.60 to settle at $936.20 an ounce.
In currency trading, the dollar fell versus the euro and the yen.
In global trading, Asian markets ended mixed and European markets ended higher.
The children of baby boomers will eventually resuscitate the pummeled U.S. housing market, Harvard University said on Monday, but in the meantime, limits on income and credit are sustaining the three-year bust.
The highest unemployment in almost 26 years, record foreclosures and rigid lending threaten to overcome emerging home sales progress despite unprecedented efforts by the Obama administration, Harvard’s State of the Nation’s Housing 2009 report said.
Echo boomers, the children of the post-World War Two baby boomer generation, offer a massive source of support for housing, the study said. The generation is entering the peak home buying and renting ages of 25 to 44 and numbers over five million people more than did their parents’ record-sized group in the 1970s.
“Echo boomers are larger than the baby boomer population. Couple that with immigration and you have the seeds, the possibility of a housing recovery,” Nicolas Retsinas, director of Harvard’s Joint Center for Housing Studies, said in an interview.
The group will bolster demand for the next 10 years and beyond, supporting the sagging housing market even if immigration drops, the study said.
The challenges are myriad, however, said Retsinas, a widely followed housing industry expert and former senior official in the Department of Housing and Urban Development.
“We have to find a way to stabilize housing finance in this country,” he said businesscards.com.
A healthy housing market is integral to a growing economy. In the current cycle, the housing crash has propelled the economy into its longest recession since the Great Depression. Jobs lost to the recession have derailed any housing recovery.
“Seedlings of the housing recovery have to come through this thicket of job losses and foreclosures,” Retsinas said. “The housing market has not seen these challenges for over 60 years.”
Mortgage rates have risen from all-time lows in the past two months despite massive government steps to keep them down.
Foreclosures escalate as federal efforts to keep borrowers in their houses cannot keep pace with loan failures caused by job losses or punishing home price erosion.
THIN SILVER LININGS
Home sales have started to pick up, thanks mostly to a first-time buyer tax credit this year of up to $8,000 and demand for foreclosure properties at bargain-basement prices.
“While we do see some signs of stabilization, you can barely see those silver linings,” Retsinas said.
The lending pendulum swung vastly after the unsustainable five-year record home price surge early this decade. Lenders clamped down after lax conditions spawned record home sales and then fueled the torrent of foreclosures.
Accused by Monsanto Co. of patent infringement, DuPont fired back on Tuesday, claiming its Creve Coeur-based rival initiated the case to stifle competition by keeping new biotech trait combinations out of the hands of farmers.
The response from DuPont comes just more than a month after Monsanto sued the company in federal court in St. Louis.
The Monsanto lawsuit claims DuPont’s agricultural unit, Pioneer Hi-Bred International Inc., violated a license agreement by combining an herbicide resistance trait that it’s developing with Monsanto’s Roundup Ready trait.
In its answer, Wilmington, Del.-based DuPont challenged the validity of Monsanto’s patents and said the 2002 license agreement doesn’t prohibit it from combining the genetic traits.
DuPont says combining, or "stacking," genetic traits for herbicide tolerance would provide farmers with better weed control than Monsanto’s Roundup Ready technology can deliver by itself.
"We will vigorously defend our rights to bring valuable new technologies to the market," James C pay day loans. Borel, a DuPont vice president said in a statement.
Monsanto was the first company to develop a gene for herbicide resistance with its 1996 launch of Roundup Ready soybeans. Today, Pioneer and other seed companies pay Monsanto for the right to use the Roundup Ready trait.
DuPont says the technology is used in about 95 percent of soybean acres in U.S., and that Monsanto has used strict license agreements to exclude competition and raise prices to farmers.
Monsanto claims DuPont chose to combine the biotech traits in soybean seeds to "cover up" problems with a rival technology, Optimum GAT.
"DuPont’s filing today is yet another smoke screen to divert attention from its problem-plagued product," Scott Partridge, deputy general counsel for Monsanto, said in a statement.
Accused by Monsanto Co. of patent infringement, DuPont fired back on Tuesday, claiming its Creve Coeur-based rival initiated the case to stifle competition by keeping new biotech trait combinations out of the hands of farmers.
The response from DuPont comes just more than a month after Monsanto sued the company in federal court in St. Louis.
The Monsanto lawsuit claims DuPont’s agricultural unit, Pioneer Hi-Bred International Inc., violated a license agreement by combining an herbicide resistance trait that it’s developing with Monsanto’s Roundup Ready trait.
In its answer, Wilmington, Del.-based DuPont challenged the validity of Monsanto’s patents and said the 2002 license agreement doesn’t prohibit it from combining the genetic traits.
DuPont says combining, or "stacking," genetic traits for herbicide tolerance would provide farmers with better weed control than Monsanto’s Roundup Ready technology can deliver by itself.
"We will vigorously defend our rights to bring valuable new technologies to the market," James C faxless cash advances. Borel, a DuPont vice president said in a statement.
Monsanto was the first company to develop a gene for herbicide resistance with its 1996 launch of Roundup Ready soybeans. Today, Pioneer and other seed companies pay Monsanto for the right to use the Roundup Ready trait.
DuPont says the technology is used in about 95 percent of soybean acres in U.S., and that Monsanto has used strict license agreements to exclude competition and raise prices to farmers.
Monsanto claims DuPont chose to combine the biotech traits in soybean seeds to "cover up" problems with a rival technology, Optimum GAT.
"DuPont’s filing today is yet another smoke screen to divert attention from its problem-plagued product," Scott Partridge, deputy general counsel for Monsanto, said in a statement.
Japan’s government and central bank agree that the worst of the deepest postwar recession is over.
Demand is picking up even though “the economy is in a difficult situation,” the Cabinet Office said in Tokyo yesterday. The Bank of Japan said the world’s second-largest economy has “begun to stop worsening.”
Evidence the economy has turned a corner has mounted as companies bolstered industrial output at the fastest pace in 56 years in April and exports recovered from unprecedented declines. Central bank Governor Masaaki Shirakawa said this week he is “cautious” about the rebound because renewed demand may only be temporary.
“Policy makers are raising their economic assessments to reflect recent improvements, but they remain pretty cautious about the outlook,” said Junko Nishioka, chief Japan economist at RBS Securities Japan Ltd. in Tokyo. “Exports are starting to turn around, but that doesn’t guarantee production will keep rebounding and support employment.”
The Nikkei 225 Stock Average rose above 10,000 for the first time in eight months last week and consumer sentiment climbed to a 14-month high in May. The Nikkei fell 1.4 percent to 9,703.72 today, and has retreated 4.3 percent this week on concern a recovery in the U.S., Japan’s largest export market, isn’t a sure thing.
‘Bottomed Out’
“It seems clear the economy bottomed out between January and March,” Japan’s Finance Minister Kaoru Yosano told reporters at a press briefing yesterday. “There are signs the decline in personal spending on some items is ending.”
It may take some time before Americans start spending again. President Barack Obama said in an interview that unemployment may climb to 10 percent from the current 25-year high of 9.4 percent.
“You’re starting to see the engines of the economy turn,” Obama said. Still, he added that “it’s going to take a long time” for a full-fledged recovery as households work off the debt accumulated during the real-estate boom.
Japan’s export dependence has caused it to suffer the most from the global recession. Gross domestic product fell at an annual 14.2 percent pace in the three months ended March 31, the steepest contraction since records began half a century ago freecreditreport. Analysts surveyed by Bloomberg expect the economy to grow this quarter, which would be the first expansion in a year.
Postponed Recovery
“The upgrades by the BOJ and the government just mean the worst is over,” said Takahide Kiuchi, chief economist at Nomura Securities Co. in Tokyo. “The U.S. recovery will be postponed until the middle of next year so it’ll be impossible for Japan to have a solid recovery.”
Economists say the economy may stutter after recovering from its worst contraction on record as Prime Minister Taro Aso’s 25 trillion-yen ($260 billion) stimulus plans wear off. The government said in yesterday’s report that rising unemployment may also discourage consumer spending and damp growth in the coming months.
“The Japanese economy is still at a delicate stage,” said David Cohen, head of Asian forecasting at Action Economics in Singapore. “At the end of the day, much will remain dependent upon the outlook for global export demand.”
Optimism that the worst is over doesn’t mean the Bank of Japan is preparing to raise the key overnight lending rate, which has stayed at 0.1 percent since being cut in December.
Deflation Risk
“Given that employment and wages are deteriorating and deflation risk is rising, it’s difficult to expect a rate hike anytime soon,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “The central bank won’t likely raise rates until fiscal 2011 at the earliest,” he said, referring to the year ending March 2012.
Deteriorating prospects for consumers are also a risk, the Cabinet Office said in yesterday’s report. The unemployment rate rose to a five-year high of 5 percent in April and economists surveyed by Bloomberg expect it to climb to a record 5.8 percent next year. About two work seekers are competing for a single spot, the most severe job shortage on record.
“We aren’t in a recovery phase,” said Fumihira Nishizaki, director of macroeconomic analysis at the Cabinet Office. “There is a risk that Japan’s economy will deteriorate again.”
The stock market’s rally serves as "broad validation" of the Obama administration’s financial rescue efforts, Treasury Secretary Tim Geithner said Monday.
But Geithner also stressed that the economy faces "an enormously challenging period ahead" — a view that was vigorously seconded by a panel of economic skeptics headlined by Nouriel Roubini, the economist known as Dr. Doom.
The comments came at an economic discussion sponsored by Time Warner, which is the parent company of Fortune and CNNMoney.com.
All of the panelists agreed the nation’s financial regulatory apparatus is a mess, with Geithner calling the overlap among oversight agencies a "spectacle."
The administration is scheduled to outline its regulatory reform plan Wednesday. Geithner said the program, to be unveiled by President Obama, will result in a financial system that’s more stable and more efficient. He added that avoiding future crises should make the finance business "a little less exciting."
Geithner said the financial system is in "the early stages of repair" following a round of capital-raising at big banks and other financial institutions.
The flurry of stock and bond sales came on the heels of a rebound in major stock indexes and the release of the government’s bank stress test results. Geithner called the success of banks, ranging from Goldman Sachs (GS, Fortune 500) and Bank of America (BAC, Fortune 500) to KeyCorp (KEY, Fortune 500) and Fifth Third (KEY, Fortune 500), the "key test" of the system’s health.
He said that because of these stock offerings, programs the government put in place to facilitate the removal of toxic assets from banks may not be used as much as initially planned. The Federal Deposit Insurance Corp. recently delayed the debut of a plan to auction off troubled loans.
Skeptics think worst isn’t over for housing market
Not everyone shared Geithner’s optimism. Roubini, a New York University economist who has gained fame for his mostly prescient bearish forecasts, said the U.S. banking system is still awash in toxic assets.
Roubini said house prices are likely to fall another 15% to 20% nationwide from current levels, which would add to banks’ mortgage losses payday loan with bad credit.
Robert Shiller, the Yale economist who warned years ago of the danger of a housing bubble, also said further declines in house prices are highly likely.
And though the stock market’s rally has lifted hopes for a quick economic recovery, Shiller said the history of post-bubble recoveries doesn’t support the current level of optimism.
Meredith Whitney, the banking analyst who was among the first in 2007 to forecast a slew of writedowns, said even though the government’s support of troubled institutions such as Citigroup (C, Fortune 500) may have "taken the solvency card off the table," most large financial institutions still aren’t healthy.
Many observers attribute the explosive rally in bank stocks since March to federal policies ruling out wholesale bank takeovers, while promising that large institutions won’t be allowed to fail.
But Whitney cautioned that there are "multiple screws loose" in the banking industry’s profit picture, with rising unemployment and stagnant wages likely to keep a cap on consumer spending.
Geithner conceded that consumer debt rose during the boom to "extraordinary levels," and that a sustained change in behavior by consumers will be necessary to work off that burden.
In the meantime, Roubini said, private debts are being transferred to the government — which runs the risk of "creating another timebomb," he warned.
Roubini added that he believes the unemployment rate will hit 11% in the latter half of 2010 — well above the current rate of 9.4% and 10.3% peak jobless rate called for in the government’s stress tests.
This should cause more problems at banks still holding hundreds of billions of dollars of troubled leveraged buyout and commercial real estate loans, Roubini said.
With all that in mind, Roubini quipped that where some see "green shoots" of economic revival — referring to the metaphor frequently used by Federal Reserve chairman Ben Bernanke and others optimistic about a recovery — he sees "yellow weeds."
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