Kenneth continues to strengthen in the eastern Pacific Ocean, with forecasters predicting the rare late-season tropical storm will become a hurricane.
The U.S. National Hurricane Center in Miami said Monday that Kenneth had maximum sustained winds near 65 mph (100 kph). The storm was centered about 740 miles (1,190 kilometers) south of the southern tip of Baja California, Mexico, but was moving away from the coast.
It is moving west at 14 mph (22 kph)
Projections show Kenneth moving west out to sea, away from land. There are no coastal watches or warnings in effect.
The eastern Pacific hurricane season ends Nov. 30.
Patricia Ranzini was appointed executive director of St. Anthony’s Charitable Foundation at St. Anthony’s Medical Center.
She will be responsible for strategic direction, oversight and implementation of the foundation’s fund-raising programs and long-range planning.
Ranzini has worked for 12 years in the development field, most recently for the Herbert Hoover Boys & Girls Club payday advance online. She is a member of the Association of Hospital Philanthropy, the Association of Fundraising Professionals and the Women’s Leadership Council of the Humane Society of Missouri.
The deputy supreme commander of the United Arab Emirates’ armed forces says France is seeking unacceptable terms for the sale of up to 60 Rafale fighter jets.
The comments Wednesday by Sheik Mohammed bin Zayed Al Nahyan could signal a final blow to the bid by France’s Dassault Aviation, which has been in talks with UAE officials for several years.
The official WAM news agency quotes Sheik Mohammed _ who is also the highly influential crown prince of Abu Dhabi _ as saying Dassault was offering noncompetitive and “unworkable” terms. He gave no other details.
He made the comments after touring the Dubai Airshow, where the Rafale and others, including American-made F-15, F-16 and F-18 fighters, performed flight demonstrations,
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
DUBAI, United Arab Emirates (AP) _ Airbus says its customers are committed to buy 1,420 of its new A320neo after less than a year of sales savings account payday advance.
Chief Operating Officer John Leahy said on Wednesday that the brisk business shows there’s strong demand for fuel-efficient planes despite some economic “storm clouds on the horizon.”
Leahy spoke as Airbus wrapped up its order announcements at the Dubai Airshow, where it scored 130 firm orders for the single-aisle plane.
Airbus says it now has 1,268 firm orders for the A320neo, which promises a smaller fuel bill than older A320 models. It ended the Dubai show with $13.7 billion worth of firm orders.
Its rival Boeing snagged the show’s biggest deal _ an $18 billion order for 50 777s from Dubai’s Emirates airline.
UPDATED AT 6:50 p.m. with more details.
Die-hard bargain shoppers might want to opt for some coffee after Thanksgiving dinner this year.
Not only are a number of big box and department stores opening at midnight on Thanksgiving, but now most of the shopping malls in the St. Louis region are following suit as well.
“Everybody wants to join the party,” said Marshal Cohen, retail analyst with consulting firm NPD Group. “It’s going to be midnight madness.”
Chesterfield Mall, Mid Rivers Mall, South County Center, St. Clair Square, and West County Center will all open their doors at midnight to accommodate stores that have asked to open at that hour, mall operator CBL & Associates announced Monday.
Victoria’s Secret, Aeropostale, The Limited, Bath and Body Works, and American Eagle are some of the stores that have said they will open at midnight. It will put a complete list of stores that will open at midnight at area malls on its website next week, CBL said.
“It seems to be growing as time goes on,” Sean Phillips, CBL’s regional marketing director, said of the list. “I think everyone feels they need to be open at midnight to be competitive.”
The rest of the stores in CBL malls will open at 5 a.m. Friday - an hour earlier than last year. Some eateries and coffee shops may also open in the middle of the night, too. For example, the Starbucks at West County Center has already said it would open at midnight.
The St. Louis Galleria will officially open at 6 a.m. - also an hour earlier than last year, said Earl Dorsett, manager of the St. Louis Galleria. But the Galleria will unlock the doors and turn on the lights in the mall so stores that want to open at midnight can do so, which is a first for that mall payday loans.
The mall has never opened this early - or been open on Thanksgiving Day - with the exception of the movie theaters, he said.
In recent weeks, a number of big retailers such as Target, Best Buy, Macy’s, and Kohl’s have said they will open at midnight this year to kick off Black Friday, one of the biggest shopping events of the year.
Walmart will roll out its first round of doorbusters at 10 p.m. Thanksgiving Day. And Toys R Us, which is trying to stay ahead of the pack, said Monday that it will open its stores at 9 p.m.
However, the midnight openings are not sitting well with some employees. A Target employee from Nebraska has started an online petition that has garnered thousands of signatures asking Target to open at 5 a.m. on Black Friday instead of at midnight.
“A midnight opening robs the hourly and in-store salary workers of time off with their families on Thanksgiving Day,” the petition says.
But Cohen said he thinks that in this economy, there are a number of employees out there who would be willing to volunteer to work the extra hours to make overtime pay.
He expects the midnight opening to be popular among shoppers who would be up then anyway and would prefer to shop at that hour than to have to wake up before dawn to get the best deals.
Besides, he added, shopping is not necessarily at odds with the spirit of the Thanksgiving, which is a family-oriented holiday.
“Guess what - shopping to some people is a family-centric activity,” he said.
In nearly every category from real estate loans to small business loans to consumer loans, banks in the St. Louis area are lending less than a year ago, according to data released from the Federal Reserve Bank of St. Louis.
The Federal Reserve, which tracks more than 70 banks chartered in the St. Louis area, released its third quarter report from locally chartered banks. The figures do not include financial services firm Stifel Financial or banks that are headquartered outside of St. Louis, such as Bank of America or M&I.
The number of locally chartered banks, 73, dropped by one in the quarter as Citizens State Bank of Shipman, Ill., merged in July with Carlinville National Bank in Carlinville Ill., creating the newly named CNB Bank and Trust.
Locally chartered banks’ loans for the third quarter that ended Sept. 30 totaled $20.04 billion, down from $22.2 billion in the third quarter of 2010. The third quarter loans are up slightly from the second quarter of this year, when locally chartered banks had $20.03 billion in total loans.
“What we’re seeing is that lending standards have changed from prior to the economic crisis,” said Julie Stackhouse, senior vice president of the Federal Reserve Bank of St. Louis. “Banks have plenty of cash to lend. The disconnect is finding borrowers that have the demand and the credit record to support a loan.”
Some borrowers are sitting on the sidelines waiting for the economy to improve before they expand their businesses. Construction and industrial, or C&I, loans, which go to pay for equipment upgrades and inventory, fell in the third quarter to $3.3 billion, down from $3.6 billion a year ago. Many banks in the St. Louis area have targeted growing C&I loans to replace construction and land development loans, which had high default rates during and following the recession payday loans direct lenders.
Small business loans have also declined, to $3.6 billion in the third quarter, down from $3.9 billion a year ago.
“At this point, so much is dependent on confidence in the economy, and demand for loans is flat,” Stackhouse said. “Businesses don’t want to gear up until (consumer) spending is up.”
Not all banks are seeing slowdowns in loan activity. Clayton-based Enterprise Bank & Trust grew its loans, both organically and through acquisitions, with its fastest growth category in C&I loans.
“Overall, most business owners are careful about adding more people or equipment, but some segments are growing, such as health care and manufacturing,” said Enterprise Bank & Trust’s Chief Executive and President Stephen Marsh.
Nonperforming loans, or those that are at least 90 days past due, totaled $855 million for all St. Louis-chartered banks in the third quarter, down from $1.1 billion a year ago. Banks are also setting aside less for loan loan provisions, which fell to $545.1 million in the third quarter compared to $614.3 million a year ago.
“Credit quality is a slow, steady improvement,” Marsh said.
Another positive trend is that profitability is improving. Banks chartered in the St. Louis area had a combined profit of $104. 8 million for the year through Sept. 30, compared with a $50 million loss in the same time period last year. Of the 10 largest locally chartered banks, only two posted a loss for the first nine months of the year, First Bank and Reliance Bank.
First National Bank of St. Louis posted a $14.6 million profit for the first nine months of the year, up 8 percent from the comparable period a year earlier.
“Our customer base has seen some improvement in their businesses in the last 12 months, but this is still the worst economic downturn I’ve seen in 35 years,” said President Rick Bagy.
More U.S. homes entered the foreclosure process in October than in the previous month, with Florida, Pennsylvania and Indiana registering among the largest monthly increases, new data show.
Some 77,733 properties received an initial default notice last month, up 10 percent from September, foreclosure listing firm RealtyTrac Inc. said Thursday.
The number of homes scheduled to be auctioned or repossessed by lenders also posted monthly increases.
All told, notices of default, scheduled auctions and bank repossessions _ warnings that can eventually lead to a home being lost to foreclosure _ hit a seven-month high in October.
The numbers are further evidence foreclosure activity is picking up.
The activity slowed a year ago after problems surfaced with the way many lenders were handling foreclosure documentation, namely shoddy mortgage paperwork comprising several shortcuts known collectively as robo-signing. Many of the nation’s largest banks reacted by temporarily ceasing all foreclosures, re-filing previously filed foreclosure cases and revisiting pending cases to prevent errors.
But banks appear to be moving past those problems now and starting to tackle a swelling backlog of homes with mortgages that have gone unpaid _ something that lenders are seeing more of as the economy struggles and unemployment remains high.
The rate that homeowners were 60 or more days late on their mortgage payment rose in the June-to-September period for the first time since the last three months of 2009, according to TransUnion.
The credit reporting agency said 5.88 percent of homeowners missed two or more payments, an early sign of possible foreclosure. That was up from 5.82 percent in the second quarter of 2011.
The number of U.S. homeowners underwater on their mortgage, or owe more than their homes are worth, represent another potential source of trouble for lenders.
As of June 30, some 22.5 percent of all U.S. homes had a mortgage that was under water, according to CoreLogic. That’s 10.9 million properties. Another 2.4 million borrowers had less than 5 percent equity in their home, the firm said.
Industry experts say a housing market turnaround isn’t likely to occur as long as there remains a glut of potential foreclosures hovering over the market, so October’s increase in foreclosure activity means a potentially faster revival for housing.
“We all know that there is an underlying amount of properties that need to go into foreclosure and the sooner we clear that the sooner we can get housing to a normal level,” said RealtyTrac CEO James Saccacio.
In some states, the number of homeowners put on notice by banks for missing payments far exceeded the national average for October.
Florida posted a 28 percent jump in October from September in homes receiving an initial default notice. Pennsylvania saw a 50 percent increase and Indiana registered a 61 percent gain, according to RealtyTrac.
In some cases, though, government intervention is slowing lenders down.
Take Nevada, where a law went into effect Oct. 1 requiring that foreclosure documents must be filed in the county where a property is located and a lender must provide a notarized affidavit detailing their legal right to proceed.
Saccacio said the law helped cause a 75 percent drop in initial default notices in Nevada last month versus September, bringing defaults to the lowest level since June 2006 at the peak of the housing boom.
“It’s like a rain delay,” Saccacio said. “We’ll eventually see foreclosure processing go up.”
Despite registering a 34 percent drop in foreclosure activity overall, Nevada still registered the highest foreclosure rate in the nation for October, with one in every 180 households receiving a foreclosure-related notice, RealtyTrac said.
In all, 230,678 U.S. homes received a foreclosure-related warning last month, up 7 percent from September, but down nearly 31 percent from October 2010.
Foreclosure auctions rose 8 percent from September, but climbed by more than 35 percent in several states, including Florida, Minnesota and Illinois.
Lenders took back 67,624 properties in October, up 4 percent from the previous month, but down 27 percent from a year earlier.
Bank repossessions increased by a far larger margin in several states. In Oregon they climbed 45 percent, while in New Jersey they posted a 48 percent jump. Indiana registered a 73 percent increase.
First the dot.coms popped, then mortgages. Are student loans and higher education the next bubble, the latest investment craze inflating on borrowed money and misplaced faith it can never go bad?
Some experts have raised the possibility. Last summer, Moody’s Analytics pronounced fears of an education spending bubble “not without merit.” Last spring, investor and PayPal founder Peter Thiel called attention to his claims of an education bubble by awarding two dozen young entrepreneurs $100,000 each NOT to attend college.
Recent weeks have seen another spate of “bubble” headlines _ student loan defaults up, tuition rising another 8.3 percent this year and finally, out Thursday, a new report estimating that average student debt for borrowers from the college class of 2010 has passed $25,000. And all that on top of a multi-year slump in the job-market for new college graduates.
So do those who warn of a bubble have a case?
The hard part, of course, is that a bubble is never apparent until it bursts. But the short answer is this: There are worrisome trends. A degree is an asset whose value can change over time. Borrowing to pay for it is risky, and borrowing is way up. The stakes are high. You can usually walk away from a house. Not so a student loan, which can’t even be discharged in bankruptcy.
But there are also important differences between a potential “student loan bubble” and an “education bubble.” Furthermore, many economists think the whole concept of a bubble is a misleading way to think about what’s happening, and may actually distract from the real problems. College affordability is a serious issue, but it’s a different one. Borrowing for college and borrowing for, say, a house, are fundamentally different in important ways.
To be sure, there are some classic bubble warning signs:
_Everybody wants in. The idea that higher education is the only way to get ahead has become widely held. College enrollment has surged one-third in a decade. With rising demand, college tuition and fees have more than doubled over that time, outstripping inflation in every other major sector of the economy _ energy, health care and housing, even when housing was bubbling itself.
_Those bills are paid with borrowed money. The volume of outstanding student loans is rising rapidly and now exceeds credit card debt, though recent reports of it crossing $1 trillion may be premature. Moody’s Analytics puts the number at around $750 billion. But while credit card debt is declining, student loan debt keeps going up.
_Just like housing, many student loans were made with little or no research into whether borrowers were fit. Federal Stafford loans are basically automatic for college students, and government backing for other types of loans gave other student lenders little reason to be picky.
_Defaults on federal student loans jumped from 7 percent to 8.8 percent in the most recent fiscal year. That measures just recent borrowers who were already behind within two years of their first payments coming due.
Those numbers are all alarming. But putting them in context requires thinking separately about the ideas of a “student loan bubble” and an “education bubble.”
First, one thing that’s important about the possible student loan bubble is that it poses much less of a threat than housing debt did to drag down the entire economy. Yes, many individual borrowers may find themselves in trouble. But total student loans probably amount to less than 10 percent of outstanding mortgages. Every single student loan could default and it still probably wouldn’t match total mortgage defaults during the recent downturn. More importantly, unlike mortgages, Wall Street isn’t knee-deep in securities comprised of bundled student loans, as it was with mortgages. (It also helps that it’s also harder to speculate in student loans; an investor can flip a house, but not a brain.)
The other big difference with student loans is the dominant role the federal government has assumed in the market in the last few years: it accounts for roughly 85 percent of student debt.
That matters for several reasons.
First, the government is answerable to voters and not shareholders, so it’s more likely than private investors to take steps such as those announced by President Barack Obama to try to relieve student debt burdens.
Second, notes Mark Kantrowitz of the website Finaid.org, it’s important to remember what actually causes a bubble to burst. It’s not simply a run-up in prices. What bursts the bubble is a liquidity crisis, when borrowers suddenly can’t get the money they need pay day loan lenders. Even during the depths of the 2008 financial crisis, when private student loans dried up, the government’s dominant role kept student loans flowing.
That doesn’t guarantee the bubble won’t slowly and painfully deflate over time. But it insures against the chaos of a “crash” where suddenly students can’t get loans at all _ a scenario that could shut down untold numbers of colleges whose students rely on financial aid.
None of that, however, changes the fundamental risk for individual student borrowers: they could borrow heavily to pay for a college education and find the return much less than expected.
It’s here, looking at the debate from an individual borrower’s point of view as opposed to the entire economy, that the debate over the term “bubble” gets tricky. Can an education lose value?
Certainly a college degree can.
A key measure is the wage premium for bachelor’s degree recipients over those with just high school diploma, and there are various ways to measure it. All show the wage premium is substantial, though after rising steadily for years it appears to have slipped some lately. Wages for the median bachelor’s degree recipient are roughly $55,292, compared to $34,813 for those with only high school, according to the latest data from Georgetown University’s Center on Education and the Workforce.
That reflects a premium that has fallen from roughly 67 percent a few years ago to 59 percent (the latest Bureau of Labor Statistics data put the 2010 premium at 65 percent for weekly wages). Still, all told, estimates for the lifetime earnings advantage of a college degree range from a conservative $500,000 to more than $1 million, according to the Census Bureau. Even with recent price increases, for the average student loan borrower that remains a very high return on investment.
It’s true the unemployment rate for new college graduates is more than 10 percent. But unemployment for college graduates overall is 4.2 percent, compared to 9.7 percent for those with a high school degree.
Could college prices rise so much, and the premium fall so far, that a degree is no longer worth it? Of course, for some degrees. But in a modern economy, it’s difficult to imagine that happening across the board. Here’s where a degree is truly unlike other assets _ most should correlate at least somewhat with skills that are useful in the world. Particular degrees may prove bad bets, but to imagine the premium on education itself dropping off a cliff is to imagine a world where things have gone so wrong that job skills no longer matter.
Or, as Kent Smetters, an economist at the University of Pennsylvania’s Wharton School, puts it: “In that case, nobody’s worried about paying back their loans. Everyone’s heading for bunkers in Idaho and canned goods and that kind of stuff.”
Here’s the rub: Nobody earns a generic “college degree.” Degrees are earned from different schools, with different reputations, and in different majors with much different payoffs. What counts most, says Georgetown’s Anthony Carnevale, are the courses you take and your major. Roughly 30 percent of associate’s degree recipients earn more than people with bachelor’s degrees. A graduate with a mere certificate in engineering will earn roughly 20 percent more than the average bachelor’s recipient.
That suggests there isn’t one big bubble, but many smaller but significant ones stretching across different sectors _ certain liberal arts grads, artists, lawyers who borrow six figures for law school and can’t find a job, and students at for-profit colleges. The signs of a bubble at for-profits are unmistakable: Enrollment has tripled in a decade, roughly 96 percent of graduates have loans and borrowing is substantially higher than at other types of institutions. Default rates recently jumped to 15 percent.
But what’s most important is the huge numbers who never earn a degree at all. At community colleges and for-profit schools, roughly one in five aiming for a bachelor’s degree fail to secure it. Even at four-year public universities, the failure rate within six years is almost half. Anyone who borrows a large amount of money and then fails to complete a degree is in a world of hurt _ quite possibly worse off than if they’d never even tried to go to college in the first place.
Markets plunged Tuesday on fears that Europe’s plan to save the euro was already unraveling after the decision by Greece’s leader to call a referendum on the country’s latest rescue package.
Should the Greek government lose the referendum vote _ and opinion polls say it’s going to have real trouble getting enough support _ then the implications for Greece and Europe are massive. The vote could end up deciding whether Greece remains in the 17-nation euro currency union.
Markets, it seems, are taking the view that Greek Prime Minister George Papandreou won’t be able to pull off a come-from-behind victory _ assuming that his government holds together. Papandreou saw his parliamentary majority cut to 2 seats Tuesday after one lawmaker defected, and at least seven more Socialist deputies have called for the formation of a cross-party, national unity government.
“Talk about your all-time bonehead moves,” said Benjamin Reitzes, an analyst at BMO Capital Markets. “It would reintroduce the risk that Greece could face a disorderly default and potentially be forced to leave the euro.”
Papandreou stunned investors, as well as his own citizens and his partners in the eurozone, by announcing late Monday that a plebiscite will be held in what he called “a supreme act of democracy and of patriotism for the people to make their own decision.” A confidence vote in the Socialist government will also take place at the end of this week.
The announcement came as the shine from last week’s European deal appeared to be wearing off.
On Monday, sentiment was already turning sour after U.S. brokerage firm MF Global filed for bankruptcy amid reports that it had bought too much bad European debt and fears over the public finances of Italy, the eurozone’s third-largest economy. Italy’s debts dwarf the euro1 trillion ($1.4 trillion) that Europe’s bailout fund will have at its disposal if last week’s commitments are delivered.
“The 6-8 percent falls over two days have now effectively given back all the gains from the post Brussels meeting rally,” said Louise Cooper, markets analyst at BGC Partners.
The plan presented last week by eurozone leaders was intended to be Europe’s comprehensive solution to a debt crisis that’s already seen three countries, including Greece, bailed out.
The three-pronged strategy of boosting the bailout fund, getting private creditors to take a bigger hit on their Greek debt holdings and forcing the banks to raise more capital was largely viewed favorably by the markets, although details need to be ironed out faxless cash advance.
In Europe, the FTSE 100 index of leading British shares fell 2.7 percent to 5,398, while Germany’s DAX slid 4.6 percent to 5,859. The CAC-40 in France was 4.7 percent lower at 3,090.
Italy’s stock market fared even worse, trading 6.7 percent lower as its borrowing costs spiked in the bond markets. The yield on Italy’s 10-year bonds was up another 0.30 percentage point to 6.30 percent, not far below the 7 percent level many investors think is unsustainable.
Unsurprisingly, Greek shares led the retreat with the main exchange in Athens down 7.3 percent.
The euro was 1.4 percent lower at $1.3652.
Wall Street suffered a big retreat at the open _ the Dow Jones industrial average was down 2 percent at 11,713 while the broader Standard & Poor’s 500 index slid 2.3 percent to 1,224.
As well as the events in Europe, investors have a raft of economic news to digest this week, culminating in Friday’s monthly U.S. jobs report.
The Federal Reserve and the European Central Bank also meet to decide on their monetary policies this week. The new ECB chief, Mario Draghi, will hold his first meeting and press conference Thursday. Investors will be looking for signs that the ECB is considering cutting interest rates and that it will continue its program of buying the bonds of troubled eurozone nations, especially Italy and Spain.
Earlier in Asia, stocks fell sharply.
Japan’s Nikkei 225 index retreated 1.7 percent to close at 8,835.53. Hong Kong’s Hang Seng lost 2.5 percent to 19,369.96 and Australia’s S&P/ASX 200 shed 1.5 percent to 4,232.90. Benchmarks in Singapore, India, Indonesia and Thailand were also down.
South Korea’s Kospi gained marginally to 1,909.63 and China’s Shanghai Composite Index added 0.1 percent to 2,470.02.
Oil prices tracked equities sharply lower. Benchmark crude for December delivery was down $2.54 at $90.65 a barrel in electronic trading on the New York Mercantile Exchange.
____
Pamela Sampson in Bangkok contributed to this report.
Barclays PLC reported a 7 percent rise in net profit in the first nine months on Monday, largely on the back of a one-time boost from investment banking.
The bank reported a net profit of 2.65 billion pounds ($4.25 billion) compared to 2.48 billion pounds a year earlier.
Revenue was up 10 percent to 25.2 billion pounds in part due to a 3 billion pounds credit gain in the third quarter.
The bank said the gain came from widening spreads on Barclays Capital’s structured products, a range of investment products which typically include complex derivatives.
For the third quarter, pretax profit was up from 327 million pounds a year ago to 2.4 billion pounds, again reflecting the one-off gain. Adjusted pretax profit for the quarter was up 5 percent to 1.34 billion pounds, broadly in line with the market consensus.
The adjusted figure excludes the own credit, a 1.8 billion pounds writedown on its stake in the investment firm BlackRock Inc. and other one-time items.
Barclays Capital third-quarter income excluding the gain was down 15 percent to 2.25 billion pounds.
Barclays shares were up 2.9 percent to 207 pence in early trading on the London Stock Exchange.
“Overall, these results are slightly better than we had expected,” said Gary Greenwood, analyst at Shore Capital, who nonetheless rates the shares as “sell.”
The bank reported that it had reduced its exposure to sovereign debt in Spain, Italy, Portugal, Ireland and Greece by 31 percent in the quarter to 8 billion pounds, with about half of the remaining exposure in Italy.
MADISON COUNTY
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