A majority of businesses in New York are optimistic about the prospects for economic recovery — but it doesn’t meant they’ll be hiring soon.
So says a new survey from The Business Council of New York State, a 3,000-member lobby in Albany that includes many of the state’s largest employers.
"Our members believe their businesses will grow and their bottom lines will improve over the next 18 months," says Ken Adams, president and CEO of the Business Council. "They are not reaching for any champagne yet, but they see economic improvement ahead in 2011."
About 300 of the lobby’s members responded to the electronic survey done in July.
Of that group, 41 percent expect revenue to grow over the next six months. That figure jumps to 59 percent when asked about expectations over the next 12 to 18 months.
But it appears the revenue growth will not coincide with big jumps in new hires.
A full 60 percent of respondents said they will keep their workforces the same size over the next six months, compared with 27 percent who plan to hire.
Employers were also asked about hiring plans over the next 12 to 18 months. Just more than half said they will not expand their workforces during that time, compared with 40 percent who plan to increase their head counts.
Employers in The Business Council survey were unanimous in their opinion of state government.
No employers said they were satisfied with the way state government is operating. Thirteen percent said they were somewhat dissatisfied, while 87 percent said they were not satisfied at all.
Also, close to 80 percent of respondents said they’d seen an increase in state regulatory activities that come with fines, fees or penalties.
A majority of respondents said neither their state senators nor their state assembly members deserve re-election this fall.
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Core-Mark Holding Company Inc. said Friday it agreed to acquire Finkle Distributors Inc. for about $43 million.
South San Francisco-based Core-Mark (NASDAQ:CORE) is a marketer of packaged produce for convenience stores in North America.
FDI, which is based in Johnstown, N.Y., is a convenience wholesaler with customers in New York, Pennsylvania and surrounding states.
Dan Finkle, president of FDI, will join Core-Mark no fax payday loan.
Core-Mark expects to fund the transaction from a combination of cash and borrowings under its $200 million revolving credit facility. The deal is expected to close in August and be accretive in 2010 excluding approximately $2.6 million in start up and conversion costs.
Leafing through newspapers and magazines, I ran into these mutual fund ads.
From Janus: "100 percent of Janus equity funds have beaten their benchmarks since inception."
From T. Rowe Price: "Proven performance that has stood the test of time. For each 3-, 5- and 10-year period ended Dec. 31, 2009, over 75 percent of our funds beat their Lipper average." (That refers to the average performance of funds tracked by Lipper, a fund analysis firm.)
From Fidelity Investments: "In each of the past one-, five- and 10-year periods, at least 8 of the 10 Fidelity Select Portfolios broad-market sector funds beat their benchmark indexes." (This one refers to 10 Fidelity "Select" funds. Each invests in specific sectors of the economy.)
For many fund companies, performance sells (although some major firms, such as Vanguard, advertise low costs rather than performance, and others, such as Dodge and Cox, do not advertise at all). And when the fund’s "absolute," or actual return isn’t all that great, then "relative" performance, or how a fund did compared to others, is the thing to tout when you can.
For example, the Fidelity Select Technology fund did beat the so-called MSCI technology sector index for the 10 years ended March 31. But with technology stocks in the tank, the fund lost an average of 7.15 percent a year. It’s just that the index lost more, or 8 percent.
We need to read ads critically, including the tiny-print disclaimers in the footnotes. We also need to question how significant performance numbers are.
As the ads all say to comply with Securities and Exchange Commission rules, "past performance cannot guarantee future results." But even so, isn’t past performance a factor to consider?
Debate has been raging on that front for years, with a recent academic study suggesting fund performance advertisements are misleading investors payday advance low fees.
"A large body of studies has found little evidence that high past returns predict high future returns. In fact, advertised mutual funds even tend to underperform the market after being advertised," said Ahmed Taha, a professor at Wake Forest University School of Law and co-author of the study.
"We found that people viewing the advertisement with the current SEC disclaimer were just as likely to invest in a fund, and had the same expectations regarding a fund’s future returns" as people shown the ads without the disclaimer, said Alan Palmiter, another co-author and law professor at Wake Forest.
The study, also co-authored by Molly Mercer, an accounting professor at Arizona State University, suggests investors would be more likely to heed a more strongly worded disclaimer such as: "Do not expect the fund’s quoted past performance to continue in the future. Studies show that mutual funds that have outperformed their peers in the past generally do not outperform them in the future."
On the other hand, I can cite evidence that sectors in the market that have done well recently — and therefore, the funds that invest in them — continue to do well for a while.
That is, in fact, the basis of the "upgrading" strategy of moving incrementally into funds with superior near-term performance — a strategy that has led to strong absolute and relative long-term returns for DAL Investment Company of San Francisco, which publishes the NoLoadFundX newsletter and manages the FundX Upgrader mutual funds. (Disclaimer: I invest in some of these funds.) Overall, I consider many factors when choosing a fund, including performance in up and down markets, costs, manager tenure and sticking to a well-defined discipline.
Onward and upward forecasts for 401(k) employee retirement accounts often disregard the fact that financial markets carry some inherent risk, which means there will be periods in which asset values decline. If a sharp decline occurs close to retirement, it spells serious trouble for investors who counted their chickens before they were hatched.
That’s why ongoing asset allocation, low-expense selections and considering your 401(k) in the context of all your investments should be your game plan.
The good news is that 401(k) investors have continued to automatically invest six to seven percent of their income in these important retirement savings vehicles despite the market volatility of the past two years. In addition, the majority of companies that temporarily suspended their matching contributions to 401(k)s are expected to reinstate them by the end of this year.
The bad news is that the panicked moves by investors into more conservative portfolio choices amid the downturn seems to have frozen their investment confidence.
"At the peak of the stock market, 401(k) investors had 70 percent of their portfolios in equities and by the bottom of the market a year ago that number had fallen to 50 percent," said Pamela Hess, director of retirement research for Hewitt Associates in Lincolnshire, Ill. "Even though the market has rebounded, no money moved back into equities, and that means it has been locked into inferior-performing investments because they have no overall strategy."
Pin some of the blame on the 401(k) offerings of many employers. They began to offer a bushel of different investment choices that were more confusing than diversifying to the average worker. The large number of names and styles of mutual funds made many investors decide to stick with the simplest money-market type of choices. They didn’t want to invest in something that wasn’t prudent or wind up with overlapping funds.
A dramatic rise in the offering of target-date funds, which aim toward a date that’s usually retirement age, has been the strongest 401(k) trend in recent years. The problem is that, although these start out with an asset mix favoring equities and gradually ease into more fixed-rate choices as the end-date nears, they carry no guarantee.
Their asset allocation steps do not preclude a potential nosedive such as they took in the 2008 debacle. Results of various target funds also differed considerably.
"For many people, target-date funds may be the best option, but for others it is a terrible choice because age is not the most important criteria for investing," warned Harold Evensky, certified financial planner and president of Evensky & Katz, Coral Gables, Fla. "Two 60-year-olds with the same income, family and neighborhood may have radically different retirement needs, and each has to look at the risks and rewards of their particular portfolio."
Fewer 401(k) investors made an investment trade in the past year than in the five years that Hewitt Associates has been tracking such moves. Their balances have still not returned to their levels at the end of 2007, the consulting firm found.
"While the ’stay the course’ message has been heeded by 401(k) investors, the message now should be to do some realistic planning for their account," said David Wray, president of the Chicago-based Profit Sharing/401(k) Council of America. "They changed their allocation for new money to be more conservative, but they should be figuring out what they’re actually going to need to spend in retirement."
Wray encourages investors to look beyond the names of funds and examine their prospectuses to see what they’re really getting. For example, if you have a greater risk tolerance than your target fund, it may be too conservative.
"More employers are offering tools to make better investment decisions, and more companies are advertising that fact," said Hewitt’s Hess. "It’s a balancing act, in that companies want to give enough information but don’t want to be in a position of telling them what to invest in."
Some companies are trimming back their number of investment choices to make them clearer, while others are adding brokerage self-directed accounts in which investors opt for stocks or exchange-traded funds.
Investors who aren’t sure how to initiate a strategy could start with 60 percent stocks and 40 percent bonds, then adjust up or down from there, said Evensky. Stocks carry more market risk and bonds carry more inflation risk, so you must find the balance best for you, he said. Keep in mind all of your other investments when making your 401(k) decisions.
"Money in your personal account and money in your 401(k) should be treated holistically because all of it is your money," believes Evensky. "Some people have the same mutual funds in their 401(k) as in their taxable accounts, and that means a lot of redundancy."
With investment returns likely to be modest for an extended period of time, expenses become more important, he said. An extra percentage in annual cost could have an impact on how much return you keep. He often recommends stock index funds for his clients’ 401(k) accounts because their lack of active management means expenses are low and you’ll also be assured of market return.
By the time it marks its first year this May, Branson Airport will be reachable by air service from seven cities — compared with one today.
Earlier this month, Denver-based Frontier Airlines announced new flights between Denver and Branson beginning in April. Then last week, Branson Airport officials announced that scheduled charter flights will begin serving five new markets in May on the newly minted Branson AirExpress.
"Things are expanding and growing like we hoped they would," said Branson Airport Director Jeff Bourk.
The $155 million privately developed airport opened last May. AirTran Airways would not discuss passenger loads on its daily flights between Atlanta and Branson, but spokesman Christopher White said the airline was "very happy" with its first year of service.
Bourk said AirTran provided a link to the eastern United States through its Atlanta hub, and Frontier will provide low-cost flights to destinations west of the Ozark entertainment venue. The new charter service, by contrast, will be more of a regional feed from Houston; Austin, Texas; Terre Haute, Ind.; Des Moines, Iowa; and Shreveport, La.
"Scheduled public charters are not unique," Bourk said last week. "What makes it unique is the relationship between … our community here and their airports out there and their communities."
Introductory fares on Branson AirExpress will start at $39 one way for the Terre Haute, Shreveport and Des Moines markets, and $49 one way for Austin and Houston travelers. It will be operated by ExpressJet Airlines using 50-seat Embraer ERJ-145 jets.
Terre Haute, which has been without commercial air service for more than a decade, is looking forward to the business, said airport director Dennis Wiss.
"No. 1, it’s activity," Wiss said. "We need the activity at the airport. We stand to make a small amount of revenue. If this model works, we hope to expand and add more flights."
In Des Moines, airport officials helped put Branson AirExpress in touch with Prairie Meadows Racetrack and Casino, which will help "mitigate some risk," said Roy Criss, a spokesman at Des Moines International Airport payday loans with no fax.
Branson provided data showing about 1,200 Iowans visit the Missouri resort area each week during its peak season from May 17 to Dec. 11, Criss said. To make the air service profitable, he said, it would have to capture only one-sixth of that, or 200 passengers a week.
A secondary benefit is that travelers would be able to connect through Branson to cities such as Austin and Houston, he said.
If the Branson charter service demonstrates strong demand, Bourk said, a commercial airline could step in and take over one or more of the routes.
"We are not an airline," he said. "That is a very important distinction. We are trying to prove these routes to other airlines. If somebody wanted to come in and take the Houston route, a major airline, we would be happy to see that happen."
The Branson Airport opened during one of the worst commercial aviation slumps in U.S. history. But Bourk said the low fares and the affordable nature of Branson had helped offset the recessionary effects.
Branson airport officials expected as many as 300,000 passenger boardings in the first year of operation. Airport officials did not provide actual figures by late Friday.
Meantime, passenger numbers have climbed 55 miles away at Springfield-Branson National Airport.
In 2009, passenger numbers grew 4 percent at Springfield-Branson, despite an 11 percent cut in its flight schedule. No other airports in the region were seeing growth, said airport spokesman Kent Boyd.
Boyd credits low fares, the growth of Allegiant Air in the market, the relatively strong performance of the southwest Missouri economy and the heightened awareness of the new passenger terminal at the airport.
Bourk said Springfield-Branson served business travelers "very well," but it is not the type of service that will bring leisure travelers into the market.
He is hoping the new charter service will help to do that.
The government is expected to unveil a new program in the next couple of months that if approved may reimburse homeowners for up to half the cost of making their homes more efficient, but don’t start shopping for new kitchens just yet.
Homeowners will get the most return for the money in simple upgrades like caulking the windows, putting insulation in the attic, and changing the light bulbs - not new windows, refrigerators or dishwashers.
What’s on the table
The average American home wastes a lot of energy.
A complete energy retrofit - which could include caulking and insulation as well as new windows, appliances and boiler, could slice a home’s energy consumption in half, according to Lane Burt, manager of building energy policy at Natural Resources Defense Council.
But getting all that work done might run into the tens of thousands of dollars. And any new federal program - which is still being drafted and is not guaranteed to become law - would cap the government reimbursements at $12,000, said Burt.
Homeowners need not despair. There are some simple improvements that are relatively cheap and can pay for themselves quickly.
Just adding the insulation, caulking and lights might run an average homeowner $5,000 to $7,000, he said. That could shave about 30% off a home’s energy bill each month. And if the government picks up half the cost, the payback time for homeowners would be just a few years.
"It’s a win-win-win," said Burt. "It creates jobs, it saves energy, and it saves consumers money."
Consumer watchdog groups back up Burt’s claim.
"I don’t know of anyone who’s looked at them and said they are not a good idea," said Mark Cooper, director of research for the Consumer Federation of America. "The average consumer can save a big chunk of change by getting the work done."
What to look for
Experts say there are a few things to look for when getting an energy audit and retrofit work done.
First, find a contractor licensed by the Building Performance Institute or the Residential Energy Services Network. These contractors have been trained to first test a home and see how much energy it is losing, then make renovations on all the systems in the building instant payday loans.
As of now there are no incentives in the proposed program for do-it-yourselfers. That’s partly because the program is designed to create jobs by putting out-of-work contractors back on the job. But it’s also done to ensure the work is done right - a house that’s sealed up too tight could rot from mold or trap too much carbon monoxide.
Second, hire an energy contractor using the same diligence you would with any other contractor. Call around for price quotes and check references. If you have any problems report them to your state’s attorney general.
The big picture
The proposed program is part of a broader jobs initiative designed first and foremost to put people back to work.
The original proposal, which called for $23 billion to be spent on energy retrofits, was estimated to create over half a million jobs, according to CleanEdison, an association of green building professionals.
Those familiar with the proposal say the final bill may set aside $10 billion for energy retrofits. Still, it’s a lot more than is currently being done - while some states have reimbursement programs, there is no federal plan. The original stimulus bill contained $5 billion for low income homeowners and money to retrofit federal buildings, but nothing for middle income Americans. The new proposal has no income restriction.
But in addition to creating jobs and saving consumers money, it also lays the framework for an energy efficient economy and achieving the 80% reduction in greenhouse gases most scientists say is necessary to avoid the worst impacts of global warming.
That’s a target that can’t be hit with building wind farms and solar plants alone.
Some 40% of all energy used in this country goes to buildings, mostly in the form of heating, cooling and lighting.
"You don’t get an 80% reduction by 2050 without retrofitting nearly every building in the country," said Burt.
First Banks’ plan to sell its Texas banking operation fell through on Monday.
The Clayton-based bank and Sterling Bancshares announced that the deal was off. "This was a mutual decision by the parties after it was determined that the transaction could not be completed by Dec. 31," the banks said in a news release.
Troubled by large losses, largely in California development loans, First Banks has been trying to sell off assets in order to shore up its capital. First Banks, the holding company for First Bank, is based in Clayton.
The Texas deal involved 19 Texas branches, including $500 million in deposits and $230 million in loans. The sale represented 5.8 percent of the First Bank’s deposits and 2.8 percent of its loans. First Bank has also signed deals to sell its 24 Chicago bank branches and a St. Louis insurance operation.
Sterling Bancshares of Houston last month announced a $24 million loss for the third quarter as it sold off $51 million in troubled loans to investor groups.
First Banks lost $91 million in the third quarter, and $274 million through the first nine months of the year.
Sterling and First Banks said the sale of Texas branches "could still be beneficial." But they noted that the "current environment" makes regulatory approval a "longer than anticipated process."
No further details were disclosed.
The U.S. jobless rate continues to affect Cintas Corp.’s business, and the uniform maker saw drops in profits and revenues during its fiscal second quarter.
Cintas posted second-quarter net income of $57.2 million, or 37 cents per share, compared to $71.8 million or 47 cents per share in the year-ago quarter. Total revenue was $884.5 million versus $985.2 million in second-quarter 2008. Analysts on average had expected revenues of $890 million and earnings per share of 43 cents.
“While job losses have moderated recently, 1.2 million jobs were lost during the last six months and we do not know when positive job growth will return,” said CEO Scott Farmer in a news release.
For the first half of fiscal 2010, Cintas reported net income of $111.2 million, or 72 cents per share, versus $150.5 million, or 98 cents per share in the same 2009 period. Total revenue fell to $1.78 billion from $2 billion.
Cintas (NASDAQ: CTAS) manufactures and supplies corporate identity uniforms and provides ancillary products and services to businesses worldwide.
The Securities and Exchange Commission is in settlement talks with several large financial institutions to resolve investigations into the awarding of municipal investment contracts, the Wall Street Journal reported on Saturday.
UBS and Bank of America Corp are among a few firms negotiating settlements with the SEC, the Journal said, citing people familiar with the matter.
The report comes after the three-year investigation led to indictments on Thursday against CDR Financial Products Inc and some of its current and former executives, for bid-rigging and fraud related to municipal bond contracts.
The charges were the first to be filed in the U.S. Justice Department’s ongoing investigation into bid-rigging in the municipal bond industry fast payday loan no faxing.
The SEC had no immediate comment on Saturday. Officials at the Justice Department, Bank of America and UBS could not immediately be reached for comment.
Bank of America entered into a leniency agreement with the Justice Department in connection with a probe into bidding practices, the bank said in February 2007. In a leniency agreement, the Justice Department promises not to bring criminal charges in exchange for the company’s information about wrongdoing.
(Reporting by Tiffany Wu and Rachelle Younglai; Editing by Eric Beech)
Google will soon allow users to to listen to music and buy songs on its search results page, according to several news reports.
The search leader has partnered with streaming music sites Lala.com and iLike.com to give searchers the ability to stream music directly from Google. If a listener wants to purchase the song, links will take them to Apple’s (AAPL, Fortune 500) iTunes Store or Amazon.com (AMZN, Fortune 500) to buy the music, the reports said, citing sources.
Google (GOOG, Fortune 500) did not return requests for comment for this story.
The music results will appear at the top of Google’s search results page, displayed similarly to results for weather forecast searches and movie searches. The music search initiative is expected to launch next week.
All four major record labels — Warner Music Group (WMG), EMI Group, Sony Music Entertainment (SNE) and Universal Music Group — have licensed their music to Google for the music search results.
Google is not expected to get any direct revenue from the purchases or streams.
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