Finance Blog number 1

Solutia Inc. announced Wednesday that its Flexsys subsidiary is evaluating sites to build its eighth Crystex brand insoluble sulfur manufacturing facility, this time in the Asia-Pacific region. Crystex is a vulcanizing agent used in making tires.

Flexsys currently has seven plants that produce Crystex, including facilities in Kuantan, Malaysia, and Kashima, Japan.

Jim Voss, president of Flexsys and senior vice president of Solutia, said in a statement that Asia continues to be a rapidly growing market for Flexsys, specifically China and India. Those countries see most of the growth in the Asian tire production market, according to the company’s release paydayloans.

Flexsys makes products used in making tires and other rubber goods, such as belts, hoses, seals and footwear. It has annual sales of more than $650 million, about two-thirds of which is outside the U.S. The subsidiary is in the process of shutting down a facility in Wales by 2011 and exiting the market for three product lines produced there.

St. Louis-based Solutia Inc. (NYSE: SOA) develops specialty chemicals, fibers, fluids and other performance products.

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Orders for U.S. durable goods probably fell last month as companies trimmed investment plans and consumers bought fewer cars and televisions, economists said before a report today.

Bookings for goods meant to last several years fell 1.5 percent, according to a Bloomberg survey of 72 economists before the Commerce Department report. Orders excluding transportation equipment, which tend to be volatile, fell 0.5 percent, the economists said.

Businesses are reacting to slower sales and record fuel prices by scaling back on hiring and spending. A slowdown in purchases of equipment, combined with a worsening housing slump and weakening consumer spending on expensive items like autos, may bring an end to the six-year economic expansion.

“There is more weakness to come,'' said Lena Komileva, chief economist at Tullett Prebon Plc in London. “Manufacturers remain under pressure from a recession in housing, high commodity costs and soft labor markets which are spreading housing weakness to the rest of the economy.''

Economists' forecasts ranged from a decline of 5 percent to a gain of 0.6 percent. The report from Commerce is due at 8:30 a.m. in Washington.

So far, manufacturing has done better than in past economic downturns. While the Institute for Supply Management's factory index fell to a five-year low of 48.3 in February and moved up to 48.6 in the following two months, it was still well above the 42.1 reading reached in February 2001, a month before the start of the 2001 recession online payday loan. A figure of 50 is the dividing line between growth and contraction.

Auto Cutbacks

In addition to weakness in housing-related industries, automakers have led the factory downturn as consumers retrench.

Ford Motor Co., the second-largest U.S. carmaker, last week said its U.S. sales fell 9.8 percent this year through April as gasoline prices approached $4 a gallon. Ford said it would pare North American production 15 percent from a year earlier this quarter, and would cut third-quarter output as much as 20 percent.

“There is no doubt the slowing economy here in the United States presents a challenge for us,'' Chief Executive Officer Alan Mulally said at the company's annual shareholders meeting earlier this month. “We are taking further cost-reduction actions.''

Increases in fuel costs are among the biggest concerns. Oil rose to more than $135 a barrel last week, the highest ever.

Companies that export have fared better, continuing to grow during the slowdown. A shrinking trade gap added 0.2 percentage point to first-quarter economic growth, according to Commerce Department figures.

Still, Federal Reserve officials, in minutes of their April 30 policy meeting released last week, lowered their 2008 economic growth projection by about a full percentage point to 0.3 percent to 1.2 percent.

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SuccessFactors Inc. plans to sell about 7.5 million shares of its common stock in an underwritten offering, the company said Tuesday.

San Mateo-based SuccessFactors (NASDAQ:SFSF), which focuses on on-demand performance and talent management, said the offering includes shares to be sold by SuccessFactors and shares to be sold by existing stockholders fast cash payday loan.

SuccessFactors and the selling stockholders have not yet made a final determination regarding the aggregate size of the offering, but will do so based on market conditions and other factors at the time of the offering.

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Federal Reserve Bank of New York President Timothy Geithner said the world economy is coping with the U.S. slowdown.

“The world is much better positioned to deal with consequences of the slowdown in the United States,'' Geithner said at a news conference in Jerusalem today. “It's looking, at least for now, very resilient to the broad pressures you see, particularly concentrated in the United States.''

The Federal Reserve has cut interest rates seven times since mid-September to fend off a recession amid a housing slump that's driven up credit costs worldwide. Geithner, with Fed Chairman Ben S. Bernanke, orchestrated the March rescue of Bear Stearns Cos. from bankruptcy and opened lending to Wall Street securities firms to prevent a financial-market meltdown.

Geithner defended the U.S. Fed's rate cuts, saying they were “absolutely correct.''

“The U.S. is going through a necessary but difficult adjustment process,'' he said. “The circumstances in each country are different and the policy responses are going to have to be different.''

In contrast to the Fed, the European Central Bank has held interest rates at a six-year high since June to fight inflation even as market turbulence threatens growth.

ECB President Jean-Claude Trichet, speaking at the same news conference as Geithner, said the market correction is “ongoing.'' Trichet also reiterated the “concern'' of the Group of Seven nations about “sharp fluctuations in major currencies'' after the euro rose to a record against the dollar payday loans.

G-30 Meeting

Otherwise, Trichet and Geithner declined to address questions relating to monetary policy. They were attending an event in Jerusalem hosted by the Group of 30, a private group mainly of current and former central bankers.

The world economy is better able to cope oil shocks today than it was in the 1970s, said Jacob Frenkel, the G-30's chairman and vice chairman of American International Group. “The lesson is that we need to make economies more flexible,'' Frenkel said.

Oil surged above $130 a barrel last week.

The rise in world commodity prices isn't a speculative “bubble,'' said Tommaso Padoa-Schioppa, who was finance minister in Italy's previous government. “The price movements are due to increasing pressure of demand and improved living standards in vast areas of the world,'' he said.

Geithner said the world's biggest central banks and financial regulators are making an “impressive effort'' to build an “early consensus'' about reducing the vulnerability of the world economy to financial crises. Still, regulators need to find a “better balance'' between supervision and relying on market discipline, he said.

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Thailand's economic growth accelerated in the first quarter as the first elected government since a coup in 2006 took office, underpinning a rebound in consumer confidence and spending.

Gross domestic product in Southeast Asia's second-biggest economy expanded 6 percent in the three months to March 31 from a year earlier, the government said today in Bangkok. That was faster than the 5.7 percent in the fourth quarter.

Prime Minister Samak Sundaravej's government came to power in February, pledging to spur economic growth by spending on trains and buses traffic clogged Bangkok and on irrigation to boost farm production in rural areas. Templeton Asset Management Ltd.'s Mark Mobius said increased government spending this year will buoy Thailand's economy and boost stocks.

“We are starting to see accelerated investment and consumption,'' Ampon Kittiampon, secretary general of the government's National Economic and Social Development Board, said today. “The government's economic stimulus measures are taking effect.''

The quarterly expansion from last year matched the median estimate of 15 economists in a Bloomberg survey.

Consumption Climbs

Private consumption rose 2.6 percent from a year earlier, after gaining a revised 1.8 percent in the fourth quarter. Consumer confidence started rising in November from a five-year low amid anticipation that a democratically elected government would pursue policies more designed to promote growth than those of the military junta it replaced.

Total investment in the first quarter rose 5.4 percent from a year earlier, accelerating from 4 percent in the previous three months, today's report showed.

The baht gained about 7 percent against the dollar in the first three months of this year and Thailand's SET Index of stocks fell 4.8 percent.

“The new government has policies which are very positive toward businesses,'' Mobius, who oversees about $47 billion of emerging-market equities at Templeton in Singapore, said in an interview on May 24 in Bangkok 500 fast cash.

GDP expanded 1.4 percent in the first quarter from the previous three months, when it grew a revised 1.7 percent, seasonally adjusted.

Manufacturing expanded 9.7 percent following a revised 8 percent pace in the previous three months. Private construction expanded 0.4 percent after contracting 8.5 percent in the fourth quarter.

Boosting Spending

Finance Minister Surapong Suebwonglee said May 20 that the government will increase spending to counter cooling economic growth as rising oil prices spur inflation and constrain consumer spending. Consumer prices gained 6.2 percent in April from a year earlier, the fastest pace since 2005.

“Higher fuel prices will increase inflation,'' said Mobius. “That in turn will dampen growth and consumption.''

The government plans to spend 1.84 trillion baht ($57 billion) in its fiscal year starting Oct. 1, a 12 percent increase from the forecast 1.64 trillion baht expenditure this year, it said on May 20. The spending will help the government meet its target of expanding the economy by 6 percent this year from 4.8 percent in 2007, Surapong said.

Surging Imports

Imports grew 34.5 percent in the first quarter, more than double the prior three months. Overseas purchases will surge 25.5 percent this year, compared with 9.6 percent in 2007 the central bank forecasts.

Exports, which make up 70 percent of the economy, slowed to 21 percent in the first quarter from 24 percent in the previous three months, according the Bank of Thailand. Still, soaring rice prices, which breached $1,000 a metric ton for the first time this month, helped buoy the value of shipments to a record in March.

“Thailand is a very vibrant exporter of agricultural commodities and manufacturing products,'' Mobius said at a Thai stock market conference in Bangkok on May 24. “This is another reason why we want to invest in Thailand.''

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European Central Bank President Jean- Claude Trichet said the shocks to Europe's economy from financial market turmoil and rising food and commodity prices aren't over, the Wall Street Journal reported, citing an interview.

Europe is facing a protracted period of high inflation rates, the newspaper quoted Trichet as saying. Trichet also said the ECB would deliver price stability in the medium term, the newspaper said.

The ECB has refrained from following the U.S. Federal Reserve and Bank of England in lowering interest rates to shore up growth after an increase in borrowing costs cash advance loan. While euro-region inflation slowed to 3.3 percent in April from a 16-year high of 3.6 percent in March, it's still above the ECB's 2 percent limit.

Trichet also called for a single European market for financial services in order to optimize the central bank's policy instruments and to improve the cohesion of European monetary union, the newspaper reported.

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Legislation providing Hawaii residents with more protection from identity theft became law Wednesday.

Act 80 limits the amount of personal information that must be filed with the state Bureau of Conveyances to the last four digits of a person's Social Security number. The old law required an individual's full Social Security number, state tax identification number and federal employer number for documents such as judgments, orders or liens filed with the bureau.

The Lingle-Aiona Administration introduced the measure based on recommendations by the Anti-Phishing Task Force.

"This new law recognizes that the public has the right to inspect and use records filed with the Bureau of Conveyances in accordance with public records laws, but personal data should be reduced to the bare minimum to protect against identity theft," Gov. Linda Lingle said in a prepared statement upon signing the bill.

Lingle also signed into law a bill that she says will make it easier for biofuel producers to directly lease public lands quick payday loans.

A law passed in 2002 allowed the Board of Land and Natural Resources to lease public land to renewable energy producers through direct negotiation, but did not consider that biofuel production does not require its facility to be at the same location as the fuel source.

The new law, Act 90, expands the definition of renewable energy producer to include growers and producers of organic material used primarily to produce biofuels. This will allow energy producers to enter into direct negotiations to lease public lands where they may grow their crops or raise livestock, then transport the materials to a biofuel conversion facility in an industrial or commercial zone.

The bill also notes that the byproducts can be used for other purposes such as mulch, feed or feedstock.

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Longs Drug Stores has joined with Internet powerhouse Google Inc. to launch a new service that will enable customers to import their prescription information, share it with their doctors and streamline the dispensing of their prescriptions.

The service, called Google Health, essentially links Longs’ pharmacy customers with doctors and health-care providers of their choice through the use and management of electronic medical records.

Longs officials said Monday their customers will have complete control of the medical records they keep on their Google Health accounts free instant credit score estimator.

"With patients having more options and better access to their medical records and medication history, they can better coordinate their care with their doctors and health-care providers," said Mike Laddon, Longs’ senior vice president and chief information officer, in a prepared statement.

Walnut Creek-based Longs operates 514 pharmacies.

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Congress sent the White House a huge election-year farm bill Thursday that includes a boost in farm subsidies and more money for food stamps amid rising grocery prices.

Bush has threatened to veto the $290 billion bill, saying it is fiscally irresponsible and too generous to wealthy corporate farmers in a time of record crop prices.

But Congress disagreed, passing the bill by overwhelming margins in both chambers - enough to override a veto. The Senate vote was 81-15, a day after the House approved it with 318 "yes" votes.

About two-thirds of the bill would pay for domestic nutrition programs such as food stamps and emergency food aid for the needy. An additional $40 billion is for farm subsidies, while almost $30 billion would go to farmers to idle their land and to other environmental programs.

Agriculture Secretary Ed Schafer again criticized the bill after Tuesday’s House vote, saying it has the wrong priorities.

"It does not target help for the farmers who really need it, and it increases the size and cost of government while jeopardizing the future of legitimate farm programs by damaging the credibility of farm bills in general," he said.

Congress has only overridden one veto, on a water projects bill, during Bush’s two terms.

Congressional negotiators met for weeks in an effort to come closer to the White House on the amount of money to be paid to wealthy farmers — one of the chief sticking points with the administration. But drastic cuts to subsidies were not possible, lawmakers said, because of the clout of Southern lawmakers who represent rice and cotton farms that are more expensive to run.

"This bill has reform in it," said Senate Majority Leader Harry Reid. "Could we have done more? Perhaps. But if we’d done more we wouldn’t have gotten a bill."

The legislation would make small cuts to direct payments that are distributed to some farmers no matter how much they grow. The farm bill also would eliminate some federal payments to individuals with more than $750,000 in annual farm income - or married farmers who make more than $1.5 million.

Individuals who make more than $500,000 or couples who make more than $1 million jointly in nonfarm income also would not be eligible for subsidies.

Under current law, there is no income limit for farmers receiving subsidies, and married couples who make less than one-fourth of their income from farming will not receive subsidies if their joint income exceeds $5 million.

The administration originally proposed a cap for those who make more than $200,000 in annual gross income, but later indicated it could accept a limit of $500,000 free credit report online. Previously, negotiators were considering a $950,000 income cap on farm income.

The bill would also:

- Boost nutrition programs, including food stamps and emergency domestic food aid, by more than $10 billion over 10 years. It would expand a program to provide fresh fruits and vegetables to schoolchildren.

- Increase subsidies for certain crops, including fruits and vegetables excluded from previous farm bills.

- Extend and expand dairy programs.

- Increase loan rates for sugar producers.

- Urge the government to buy surplus sugar and sell it to ethanol producers for use in a mixture with corn.

- Cut a per-gallon ethanol tax credit for refiners from 51 cents to 45 cents. The credit supports the blending of fuel with the corn-based additive. More money would go to cellulosic ethanol, made from plant matter.

- Require that meats and other fresh foods carry labels with their country of origin.

- Stop allowing farmers to collect subsidies for multiple farm businesses.

- Reopen a major discrimination case against the Agriculture Department. Thousands of black farmers who missed a deadline would get a chance to file claims alleging they were denied loans or other subsidies.

- Pay farmers for weather-related farm losses from a new $3.8 billion disaster relief fund.

- Provide the first-ever infusion of federal farm dollars - more than $400 million - to clean up the Chesapeake Bay.

The bill also includes a few home-state provisions inserted by lawmakers, including tax breaks for Kentucky racehorse owners and additional aid for salmon fishermen in the Pacific Northwest.

Despite the overwhelming vote, the bill does have some farm-state critics.

Indiana Sen. Richard Lugar, a former Republican chairman of the Senate Agriculture Committee, voted against the bill.

"I do not believe our nation is best served by this farm bill that continues to make payments that defy common sense, snubs our trading partners, and balloons taxpayer spending," Lugar said. 

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CareFirst BlueCross BlueShield and the YMCA of Metropolitan Washington have formed a partnership to help prevent childhood obesity in the Washington area, where one in four children are overweight or obese and more than half between the ages of 5 and 10 have at least one risk factor leading to cardiovascular disease.

The 5-year-old Physical, Healthy, Driven (PHD) program, offered as part of the YMCA's child care and camp programs and at local schools lacking physical education programs, received a $1 million donation from the Owings Mills, Md.-based nonprofit health care company.

The contribution, the largest the PHD program has received, will fund after-school events and YMCA's Kids Health Mobile. The mobile physical education program will start cruising D.C. next week, stocked with an interactive gym, rock climbing wall, health assessment equipment and nutrition corner. It will be used throughout the year at schools, health fairs and special events.

With the contribution, the PHD program is expected to reach 10,000 Washington-area children over the next year, compared with 3,500 last year pay day loans.

"The program was started because we noticed that D.C. kids coming into our after-school programs had a very poor level of fitness," said Janice Williams, senior vice president of program development and at the YMCA of Metropolitan Washington and founder of PHD. "They had difficulty walking up a flight of stairs. At school systems eliminating PE to concentrate more on academics, we knew its kids were suffering."

YMCA of Metropolitan Washington operates 16 centers and off-site locations throughout the area.

CareFirst serves 3.2 million individuals and groups in Maryland, D.C. and Northern Virginia. It gave $4.5 million to local charities and community programs last year.

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