Finance Blog number 1

Bank of Japan board members said there are few signs that rising commodity prices will prompt companies to increase wages and fan inflation, minutes show.

“Many members said that wages had not risen markedly in Japan and to date there had been no sign of second-round effects from the rise in prices of petroleum products and food,'' the minutes of the July 14-15 meeting released today in Tokyo said.

Rising fuel and food costs are sapping corporate profits and household income, putting a strain on an economy that may already be in a recession. The bank this week described growth as “sluggish'' for the first time in a decade, indicating it won't raise the key interest rate from 0.5 percent anytime soon.

“The BOJ is more concerned about growth than inflation as it becomes clearer that Japan is in a recession,'' said Seiji Shiraishi, chief economist at HSBC Securities Japan Ltd. in Tokyo. “The monetary policy gridlock will continue for a while.''

The yen traded at 108.98 per dollar as of 12:39 p.m. in Tokyo from 108.48 before the minutes were published.

Japan's inflation is outstripping gains in wages. Consumer prices excluding fresh fruit, fish and vegetables climbed 1.9 percent in June from a year earlier, the fastest pace in a decade. Average paychecks increased 0.4 percent.

`Restraining Wages'

Companies will probably keep “restraining wages for the time being'' because profits are declining, some of the policy board's seven members said at the July meeting.

Central bank Governor Masaaki Shirakawa said this week that inflation isn't spreading because “the pace of wage increases is weak.'' He said the economy's recovery may be delayed because of the rise in food and fuel costs and weakening exports.

Minutes published from other central banks this week show the difficulties policy makers are facing as economic growth slows and inflation accelerates faxless cash advance.

The Bank of England was split three ways in August, with one member arguing for higher rates to tame prices and another voting for a cut to stave off a recession. Australia's central bank said it may soon cut rates for the first time in seven years to avoid a deeper slowdown, after increasing borrowing costs to a 12-year high of 7.25 percent in March to quell inflation.

Japan's economy, the world's second largest, shrank at an annual 2.4 percent pace in the three months ended June 30. Economists surveyed say the nation will grow an annualized 0.6 percent this quarter and some predict a second contraction.

May `Shrink Again'

The economy may “shrink again in the current quarter and that would mark a technical recession,'' said Jan Lambregts, head of Asia research at Rabobank International in Hong Kong. “For the reminder of the year, the BOJ's expected to be on hold.''

Still, the Bank of Japan also said this week that the economy should eventually resume expanding as global prices ease and overseas economies recover.

Some board members said the bank should be wary that keeping rates low for a long time could overstimulate the economy once growth picks up, according to the minutes.

Japan has kept the key rate, the lowest among major economies, unchanged since doubling it to 0.5 percent in February 2007. The U.S. Federal Reserve's benchmark is 2 percent and the European Central Bank raised its rate to 4.25 percent this month.

The central bank began releasing the minutes sooner than previously this month as part of measures announced in July to improve policy transparency. Minutes are now published after they are approved by the board members at the next meeting. Previously, they were sometimes approved two meetings later.

Source

Investment in Denver-area commercial real estate was down in all categories except apartment properties for the 12 months through the second quarter, according to LoopNet Inc.

In the biggest purchase category — office buildings — investors acquired $2.5 billion in properties for that period, down from $4.54 billion for the same period a year ago. It should be pointed out that metro Denver had its largest commercial real estate deal ever in 2007¹s first quarter, with the $770 million sale of five downtown Denver office buildings to Callahan Capital Partners LLC by The Blackstone Group LP.

Average selling price for office space per square foot also decreased, to $146 from $174.

Downtown Denver office space in the last year sold for $184 per square foot on average, compared to $232 for the same period a year earlier. Most buyers — 57 percent — were institutions or foreign investors. Office space capitalization, or "cap," rate averaged 7.3 percent, up from 7 percent. Cap rate is the rate of return used to calculate the capital value of an income stream.

Based in San Francisco, LoopNet (NASDAQ: LOOP) provides commercial real estate information.

Other investment data for metro Denver, for the previous 12 months through June compared to the same period a year earlier, includes:

• Apartment investment — Up to $1.59 billion from $1.46 billion overnight payday loans. Average price per unit decreased to $95,008 from $96,713. Most buyers — 59 percent — were private. Cap rate rose to 6.9 percent from 6 percent.
• Retail investment — Down to $616 million from $1.28 billion. Selling price per square foot down to $168 on average, from $182. The largest category of buyer, at 54 percent, was private investors. Cap rate increased to 7 percent from 6.7 percent.
• Industrial investment — Down to $615 million, or $68 per square foot on average, from $674 million, or $71 a foot. Warehouse space led the way in sales, with $389 million, compared to $226 million for flex space, which combination of types of space including office, laboratory and warehouse footage. Most buyers — 57 percent — were private. Cap rate roughly flat at 7.1 percent.

Miami supply company Tiles and Stones has filed for Chapter 11 bankruptcy protection.

The company declared more than 200 creditors, many of them local companies, including Travertino Trading Co with $417,244, and EPC of Miami at $943,895.

The top 20 creditors are owed more than $6.6 million, according to court filings.

It also listed stone suppliers from Italy, Spain, Turkey and Canada, such as Marmoles Novelda of Spain at $1.57 million.

Company president Joso Tomas is listed as the president; the bankruptcy was filed by attorney Robert Charbonneau, of Ehrenstein Charbonneau Calderin in Miami faxless payday advance.

Also filing Chapter 11’s on Monday were Tile and Stones Showroom, and Tile and Stones of Stuart.

The city of Groveland is poised to become home to one of the largest concentrations of biodiesel plants in the U.S., should plans to operate three facilities there by early next year come to fruition.

Only Houston, with two in operation and another two planned later this year, would exceed that. In fact, the National Biodiesel Board lists only four plants total in Florida.

Biodiesel plants make biodiesel fuel with used fryer grease, animal fats and grease collected in restaurant grease traps.

Together, the three Groveland plants — CleanFuel LLC, Southern Energy Holdings Inc. and Summit Biodiesel — represent a significant investment in the area: Southern Energy estimates its operation alone cost

$5 million — and the three firms could create up to 100 jobs, paying a minimum of $15 an hour.

Dottie Keedy, director of the Lake County Department of Economic Growth & Redevelopment, said the jobs being created through the biodiesel companies are significant for the area.

The companies also have ambitious 2009 sales targets for their operations: Summit Biodiesel, $3.8 million; Southern Energy Holdings, $9 million; and CleanFuel, $120 million.

CleanFuel, Groveland’s first biodiesel plant, was founded by commercial and retail real estate developer Lee Maher.

CleanFuel bought Silver Bullet Energy Inc., an existing biodiesel operation at 7432 E. State Road 50, last November for several million dollars. CleanFuel invested another several million in improvements, said Maher, who declined to give specific figures.

CleanFuel now produces 1 million gallons of biodiesel a year and plans to increase that to 5 million-6 million gallons annually. To do so, the plant — which now has 20 workers — eventually will add 10 more.

Maher, who has his sights set on becoming the largest biodiesel producer in the Southeast with his CleanFuel operation, has invested $20 million thus far in the industry cash till payday. He is building another plant near Allentown, Pa., and plans to buy two other plants next year.

Meanwhile, Southern Energy Holdings will start its operation next month, initially producing 350,000 gallons a month and, over time, increase to 1 million gallons a month. The $2.5 million plant, being built at 15380 County Road 565A, will employ 10 to 12 people.

It chose to open in Groveland due to a partnership the firm has with INX Eco, a Groveland company that’s supplying the raw material for the biodiesel operation.

The plant could be the first of three, said Sean Murphy, Southern Energy Holdings president. The University of Central Florida mechanical engineering graduate who now builds custom homes on Long Island, N.Y., said the company also wants to open plants on Long Island and maybe Jacksonville. "We plan to be in it as long as the U.S. is dependent on foreign oil."

Then there’s Summit Biodiesel, which now produces 1 million gallons annually at a small building on West Pine Street in Orlando. It will open a plant in Groveland early next year capable of producing 1 million gallons of biodiesel a year.

Its $1.1 million Groveland plant, which will have four workers, will be in a leased 4,000-square-foot building at 241 Sampey Road. The equipment for the operation should arrive in October, and the plant will open in January.

China's industrial-output growth cooled in July to the slowest pace since February 2007 on weaker export orders and factory shutdowns to clear the air for the Olympic Games.

Production rose 14.7 percent in July from a year earlier, the statistics bureau said today, after gaining 16 percent in June. That was less than the 15.9 percent median estimate of 20 economists surveyed by Bloomberg News.

“This slowdown may indicate that export growth will be lower in coming months,'' said Ma Jun, chief China economist at Deutsche Bank AG in Hong Kong. “Factory closures before the Olympic Games played a small part.''

Weakness in economies around the world pared orders for goods, while higher fuel and raw-material prices deterred some companies from expanding. The slowdown, exacerbated by attempts to prevent pollution in Beijing during the Olympics, suggests an acceleration in China's July export growth is unlikely to be sustained.

The yuan fell to 6.8602 against the dollar as of 11:46 a.m. in Beijing after closing at 6.8570 yesterday.

The nation needs an emergency plan to stoke investment should export demand suddenly collapse as the global economy weakens, the government's State Information Center said in a report published yesterday.

Stronger Currency

A government-backed survey of purchasing managers published Aug. 1 suggested that manufacturing contracted last month for the first time since the data began in 2005, with an index of export orders falling to a record low. Exports unexpectedly surged 26.9 percent last month.

Export weakness played a key role in July's output slowdown, Zhu Baoliang, chief economist at the State Information Center, said in the government statement, citing a stronger Chinese currency and the cooling of the global economy as factors. The yuan has climbed more than 10 percent in the past year, making China's exports more expensive and less appealing abroad.

Higher costs, including those of oil and iron ore, have restrained output and some companies in the electricity, steel and automobile industries, are “in difficulty'' and unwilling to produce, Zhu said fast payday loan no faxing.

Power is being rationed in Shandong, Hubei, Shanxi, Henan and Liaoning provinces. Shandong Xinfa Aluminum and Electricity Group, an aluminum maker, said Aug. 8 that a coal shortage is threatening power supplies for its plants.

`Tough Challenges'

China's economy expanded 10.1 percent in the second quarter from a year earlier, down from 11.9 percent in all of 2007.

This quarter, the government has eased bank lending quotas, raised tax rebates on exports of garments and textiles and halted gains by the yuan against the dollar, shifting emphasis to protecting jobs from fighting inflation.

“China's manufacturing sector is facing tough challenges due to the global slowdown, rising production costs, tight credit conditions, power shortages and currency appreciation,'' said Sun Mingchun, an economist at Lehman Brothers Holdings Inc. in Hong Kong.

Factory closures ahead of the Olympics played a “limited'' role in restraining July's production, Sun said.

Producer prices jumped 10 percent in July from a year earlier, the fastest pace since 1996. Wages in Chinese urban areas rose 18 percent in the first half to 12,964 yuan ($1890). Improved environmental and safety standards and higher energy prices are also pushing up costs.

Still, rising domestic demand may help sustain industrial production. Retail sales jumped 23.3 percent in July from a year earlier, the quickest gain since 1999 when Bloomberg data began.

For the first seven months of 2008, industrial production rose 16.1 percent from a year earlier, the statistics bureau said.

Source

Woodbridge Holdings Corp., formerly known as Levitt Corp., narrowed its loss in the second quarter, but it is battling to stay on the New York Stock Exchange.

On Monday, it received a notice from the NYSE that its closing share price has averaged below $1 for 30 consecutive trading days. Woodbridge said it would seek to cure the deficiency, which could otherwise lead to delisting from the exchange.

The Fort Lauderdale-based company said it intends to seek a reverse stock split in the third or fourth quarter that could boost its share price to meet listing requirements. The move would combine a certain number of Woodbridge’s Class A common stock and Class B common stock into one share of Class A common stock and Class B common stock, respectively.

Woodbridge, which owns stakes in time-share operator Bluegreen Corp. and developer Core Communities, lost $8.9 million, or 9 cents per share, in the second quarter. That’s an improvement from the $58.1 million loss it suffered in the second quarter of 2007 – before its homebuilding subsidiary Levitt and Sons declared bankruptcy and was cut off from its parent.

Woodbridge (NYSE: WDG) recorded just $3.2 million in revenue in the second quarter, a steep dive from its $127.1 million in sales during the same period of last year. Real estate sales went from comprising nearly 99 percent of the company’s revenue a year ago to about 75 percent in the most recent quarter.

Woodbridge made it up by cutting back on expenses.

On July 21, Bluegreen announced that it issued a letter of intent to sell all of its outstanding common stock for $15 per share. Woodbridge owned 9.5 million shares – or 31 percent of Bluegreen outstanding common stock – on June 30. It assigned a $117.4 million book value to its investment in Bluegreen, which would amount to $12.36 per share.

Woodbridge owns an equity stake in Office Depot, of Delray Beach. It sold nearly 1.6 million of those shares for an average price of $12.08 in June easy fast cash. Woodbridge gained $1.2 million from that transaction. It still owned 1.4 million Office Depot shares on June 30.

The company noted that it intends to make acquisitions and investments both within and outside the real estate industry.

“We are also exploring strategic initiatives that have the potential of enhancing liquidity and shareholders’ equity,” Woodbridge stated in its filing. “These initiatives include the consideration of alternatives to monetize a portion of our interests in core assets, including through possible joint ventures or other strategic relationships.”

Woodbridge also noted that it could be responsible for up to $12 million, plus costs and expenses, of the $33.3 million in surety bonds that Levitt and Sons had entered into. The company has already logged $1.1 million in accrual for this reason.

“It is unclear, given the uncertainty involved in the Chapter 11 cases, whether and to what extent the remaining outstanding surety bonds of Levitt and Sons will be drawn and the extent to which Woodbridge may be responsible for additional amounts beyond this accrual,” Woodbridge stated in its filing. “It is unlikely that Woodbridge would have the ability to receive any repayment, assets or other consideration as recovery of any amounts it is required to pay.”

Shares of Woodbridge traded down 6 cents, or 5.8 percent, to 96 cents on Tuesday morning. The 52-week high was $4.46 on Aug. 13 last year. The 52-week low was 60 cents on July 15.