Finance Blog number 1

Ready to embark on the quest for an 800 credit score?

You’ll have to start by getting your exact score by shelling out $16 at myfico.com. (The best free scoring tool, the report card at Credit.com, gives you only a letter grade and a range your score probably falls into.)

You actually have three credit scores, one for each of the three major credit bureaus: Equifax, Experian, and TransUnion. Mortgage lenders pull all three.

Though based on the same model, these scores can differ — typically by no more than 15 to 20 points, says FICO spokesman Crag Watts — depending on how lenders report to the bureaus and how the bureaus include that information in the report.

At myfico.com, you have the option of buying only your Equifax or Trans-Union score; Experian doesn’t sell its FICO score to consumers. If you’re shopping for a home loan, get the two available to you.

Scores change whenever your creditors report new information — like your credit card balance — so if you’re in the market for a big loan, start monitoring your number six to 12 months beforehand.

You might also find it useful to sign up for a tool like Equifax’s Score Watch, which for $13 a month will alert you when your score shifts. For those who aren’t loan shopping, there’s no need to check your number more than twice a year, says Wayne Sanford. owner of credit consulting firm New Start Financial Corp.

And if you find out you’re not in the promised land? Don’t worry. You don’t need to be fanatical to get to 780. Those in the know say these moves matter most:

1. Stay on top of your credit reports. You’re entitled to one free copy per year from each bureau. Get ‘em at annualcreditreport.com, and look for misreported delinquencies, over-reported loan amounts, and underreported credit limits business card design. Request corrections from the bureau in writing.

2. Pay bills within the grace period. Lenders report tardiness to the bureaus once you’re 30 days past due; if your score started at 780, it can go down to 680 after just one delinquency, says Watts. So set up payment reminders or have payments automatically deducted by a certain date.

3. Focus on paying off credit cards vs. other debt. Whittling down revolving debt will do a lot more for your score than erasing installment loans. Paying off a $250,000 mortgage when your score is already high will boost it by only five or 10 points, says Watts. But wiping away a few thousand bucks on plastic can add 100 points.

4. Stay under the magic 10%. Just paying credit card balances off every cycle doesn’t mean you have a 0% utilization; issuers report the total amount you charge each month to the bureaus. That suggests you should use credit cards sparingly, says Watts. Aim to spend no more than $2,000 on a $20,000 line; and put cards on ice a few months before applying for a loan.

5. Have a favorite credit card. The FICO model penalizes you for having multiple balances, so limit the bulk of your spending to one card. That said, issuers are closing inactive lines, which can hurt your utilization ratio. So make small charges to your other cards every three months or so.

6. Ask FICO what else will work for you. FICO offers a free Score Simulator tool to those who buy scores on myfico.com, and this allows you to see how your score would respond to certain actions, such as paying down debt or even taking on new loans.  

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Stocks are likely to face another choppy, downtrodden week, but that’s no big surprise.

It’s the end of the summer, trading volume is light, and even though company earnings are generally strong, dismal economic reports have been kicking fears of a second-half slowdown into higher gear.

Add a little uncertainty about Bush tax cuts, interest rates and the logistics of financial regulatory reform to the mix, and investors are jittery to say the least.

"We know the economy is not suffering from a lack of money or liquidity. What the economy is desperately short of is confidence and visibility and the willingness to take risk," said Adrian Cronje, chief financial officer of investment firm Balentine.

The markets are coming off two weeks of losses as traders have been struggling to find a balance between upbeat company news and downtrodden data on jobs, manufacturing, and other economic indicators.

On one hand, the positive: A slew of mergers and acquisitions announced last week shows companies are ramping up their capital spending, which is a sign that they’re preparing for better times.

Earlier this week, mining giant BHP Billiton’s (BHP) $43.8 billion unsolicited bid for Canadian fertilizer-maker Potash Corp. (POT) was the biggest deal this year, bringing weekly M&A volume to $89.8 billion.

And on Thursday, Intel (INTC, Fortune 500) agreed to buy security software maker McAfee (MFE) for $7.68 billion, in what would be the chipmaker’s biggest acquisition ever.

Historically, August is a slower month for M&A activity but last week’s total is the largest of any August week in four years, according to Thomson Reuters.

On the other hand, the negative: The headline economic indicator continues to be jobs, and the news there has been grim at best. The number of first-time filers for unemployment benefits surged to a 9-month high last week and has been stuck in the mid- to higher 400,000s since November.

Economists are looking to see that weekly number of first-time filers tick down to 400,000 or lower before they’re truly convinced a recovery is underway easy to get unsecured personal loans. They’ll be closely watching for the government’s most recent jobs data on Thursday.

Cronje is not predicting particularly bad or good news for jobs this week, but if the numbers disappoint, watch out: "Any sign of the job market getting even worse from here will be taken badly," he said.

On the docket

Monday: No economic reports are on tap.

Tuesday: The July report on existing homes sales from the National Association of Realtors is due during morning trading Tuesday. Sales of existing homes fell 5.1% in June to a 5.37 million-unit pace — a sign of renewed turbulence in the housing market. Economists polled by Briefing.com are expecting July to show another slowdown in sales, down to 5.14 million.

Wednesday: The Commerce Department reports data on durable goods orders — a measure of products meant to last at least three years, such as cars and computers.

Recovering after the recession, orders rallied more than 20% between March 2009 and April 2010. But the measure has posted back-to-back declines for the last two months. Economists are forecasting a 3.4% increase for July.

They’re also waiting for the latest figures on new home sales, which are expected to show a slight uptick to 338,000 in July, up from 330,000 the month before.

Thursday: The government releases its weekly numbers on first-time unemployment filers. Last week, stocks took a hit when the number increased dramatically to 500,000 initial claims.

Friday: The government’s revised reading on gross domestic product is due on Friday.

GDP is the broadest measure of the nation’s economic activity. Economists surveyed by Briefing.com are expecting the government to revise the number to 1.4%, showing a significant slowdown from its previous reading of 2.4%. 

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Mining giant BHP Billiton said Wednesday that it would take its $38.6 billion cash offer for Potash Corp. directly to the shareholders, a day after the world’s largest fertilizer producer rejected unsolicited takeover bid.

The Australian company’s offer remains valued at $130-per-share offer, representing a 16% premium to Monday’s closing price.

"We firmly believe that Potash Corp. shareholders will find the certainty of a cash offer, at a premium of 32% to the 30-trading day period average, very attractive, and we have therefore decided to make this offer directly to those shareholders," said BHP chairman Jac Nasser in a statement payday loan.

Shares of Potash (POT), which spiked almost 28% Tuesday following the rejection, gained 3% Wednesday.

Meanwhile, BHP’s (BHP) stock, which slipped 2.4% Tuesday, lost another 3% Wednesday. 

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Long-term care provider Assisted Living Concepts Inc. of Menomonee Falls continued to boost revenue in the second quarter by increasing occupancy at its assisted living homes by more profitable private-pay residents.

Total revenue increased to $58.3 million from $56.7 million over the second quarter of 2009.

Assisted Living Concepts (NYSE: ALC) reported a decline, however, in net income for the quarter with $2.9 million, or 25 cents per share, compared with $3.9 million, or 33 cents per share, in the same period the year before.

The decline is the result of one-time charges totaling $1.7 million related to income tax benefits and expenses associated with the realignment of divisions, said John Buono, senior vice president and chief financial officer.

Net income would have been $4.6 million, or 39 cents per share, without those one-time charges, Buono said during a conference call Tuesday with investors.

Staffing needs have decreased because of the lower number of Medicaid residents the company is accepting and general economic conditions have allowed Assisted Living to hire employees at lower wage rates, Buono said.

At the same time, general administrative costs increased $800,000 compared with the last year.

Assisted Living increased average private-pay occupancy by 122 and eight units over the second quarter of 2009 and the first quarter of 2010, respectively payday loan.

The company does not expect to renew Medicaid contracts in 2010, which will reduce Medicaid occupancy by about 40 people in the third quarter of 2010, Laurie Bebo, president and CEO, said in a conference call.

Assisted Living gets less money in reimbursements from Medicaid residents than it does from private-pay residents and has made a conscious decision to decrease the number of Medicaid residents and replace them with private-pay residents.

The company has been offering discounts such as no new residency fees or one-month free after six months to make its facilities more attractive to private-pay residents, Bebo said.

Private-pay residents increased from 92.3 percent in 2009 to 97.1 percent in 2010. Revenues from those residents increased from 93 percent to 98 percent in 2010.

“Our strategy of reducing our reliance on government funding continues to increase our margins,” Bebo said.

Assisted Living Concepts and its subsidiaries operate 211 senior living residences comprising 9,280 residents in 20 states.

The company is looking at the acquisition of other properties, but was not ready to discuss details, Buono said.

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Smurfit-Stone Container Corp. reported Tuesday adjusted net income of $2 million for the second quarter, compared with a loss of $21 million a year earlier, excluding $1.4 billion in income and tax benefits from the company's emergence from bankruptcy.

Including the impact of the bankruptcy income, Smurfi reported net income attributable to common stockholders of $1.41 billion for the second quarter, compared with a net income of $155 million a year earlier.

The company reported sales of $1.6 billion for the three months ended June 30, up 14 percent from $1.4 billion in the prior-year quarter.

Smurfit, which is dually headquartered in Creve Coeur, Mo., and Chicago, exited from Chapter 11 bankruptcy in June. Smurfit has nearly all of the firm’s executives based in St. Louis. The company operates corrugated container, folding carton, recovered paper and recycling services facilities. Smurfit-Stone has 30 recycling plants in the U.S. The company reported $5.57 billion in 2009 revenue.

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The CEOs of top performing local public companies received much bigger pay raises in 2009 than the CEOs of top performing companies in 10 major cities nationwide, according a new study.

The study by BDO USA LLP, a professional services firm, looked at the relationship between the change in total CEO compensation (including salary, bonus, stock options, etc.) between 2008 and 2009 and the total shareholder return of the company over the same year.

It found that the 25 top performing D.C.-area companies posted a median increase in shareholder returns of 85 percent, significantly lower than the median for top performing companies nationwide of 98 percent. Yet the CEOs of those local companies got a 37 percent increase in compensation, compared to just a 5.5 percent increase for CEOs of top performing companies nationwide. Local CEO pay hikes were second only to those of Atlanta CEOs, who received a 45 percent bump in compensation.

The CEOs at the 25 worst-performing public companies in the D.C. area also fared a bit better than their under-performing brethren nationwide.

Shareholder returns at the lowest-performing local companies decreased by a median of 5 percent, while their CEOs took a 4 percent pay cut — equivalent to 80 percent of the decline in shareholder returns. Nationally, the bottom-performing companies saw shareholder returns drop 10.5 percent, while CEO pay fell 9 percent — equivalent to 86 percent of the decline in shareholder returns. This means local under-performing CEOs didn’t receive as big a pay cut, relative to their performance, as underperforming CEOs nationwide.

“Tying pay to company performance is critical now more than ever given the increased scrutiny both from regulators and shareholders,” said Randy Ramirez, Northeast regional leader of the compensation and benefits practice at BDO in a statement. “Our analysis shows that top performing companies in Washington, D.C., are more rigorous than their poor performing counterparts when it comes to developing a performance-based strategy for CEO compensation. However, there are still some notable gaps. Performance cycles do not coincide with changes in company tactics and performance measures do not accurately reflect changes in operational focus.”

The Washington Business Journal conducted a smaller compensation study in May which found that CEO compensation at local financial services companies declined 39 percent in 2009, despite an improvement in company performance.

Here are the breakdowns on CEO pay for performance at companies in the 10 largest cities nationwide, according to the BDO study:

Top 25 performing companies

City / shareholder return / CEO pay increases

1. New York / 243 percent / 10 percent
2. San Francisco / 155 percent / -14 percent
3. Houston / 152 percent / 5 percent
4. Dallas / 135 percent / 6 percent
5. Miami / 109 percent / 2 percent
6. Boston / 86 percent / 1 percent
7. D.C. / 85 percent / 37 percent
8. Atlanta / 74 percent / 45 percent
9. Chicago / 63 percent / 4 percent
10. Los Angeles / 58 percent / 10 percent

Bottom 25 performing companies

City / shareholder return /CEO pay increases

1. San Francisco / 4 percent / -9 percent
2. Miami / -1 percent / 0 percent
3. D.C. / -5 percent / -4 percent
4. Atlanta / -7 percent / -25 percent
5. Chicago / -10 percent / -9 percent
6. LA / -11percent / 2 percent
7. Dallas / -13 percent / 0 percent
8. Boston / -13 percent / -10 percent
9. Houston / -19 percent / -10 percent
10. New York / -27 percent / -17 percent

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Epocrates Inc. said on Friday it plans to sell up to an estimated $75 million in an initial public offering.

This is second attempt at an IPO by the San Mateo mobile drug data company. It withdrew a previous effort in late 2008 amind the economic downturn that year.

Epocrates said it plans to trade on the Nasdaq Global Market with the EPOC symbol.

The company showed a loss in the three months ended March 31 of $855,000 as its revenue dropped 1.6 percent to $24.3 million. It showed a profit of $993,000 a year-earlier in the same quarter no faxing 1 hour payday loans.

Epocrates said it will use money raised through the IPO to pay dividends due to the holders of its Class B preferred stock and for general corporate purposes.

Epocrates said in its filing that about 40 percent of U.S. physicians use its mobile drug reference tools and interactive services, aout 1 million users.

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The iPhone 4 has arrived, but for some people the wait continues as Apple sprints to keep up with fierce demand for its latest gadget.

From Tokyo to St. Louis, some stores started selling out of Apple Inc.’s newest iPhone just hours after it went on sale Thursday. Some anticipated the demand and made sure they were in line early to get one.

Malinda Hagenhoff, of Jefferson City, stayed in her car in a parking lot overnight Wednesday to be among the first in line at West County Center in Des Peres on Thursday morning.

"I’m kind of a techy person who loves techy stuff," said Hagenhoff, who already owns an iPhone but wanted the newest model.
She was No. 30 in line when mall opened at 6 a.m., but that put her ahead of 120 others to await the Apple Store’s 7 a.m. opening.

As the line stretched farther and farther into the mall, other fanatics sought different sources.

Tyler Woods, 20, of south St. Louis, traveled with two friends to a Walmart store in Arnold.

"This has to be some kind of miracle," Woods said when he arrived in line at the Walmart store at 8:45 a.m. and was told he would get one of the 24 iPhones the store had in stock.

Similar stories were told around the globe. Thousands lined up outside stores in Tokyo, Berlin, New York and elsewhere. Some said they waited 11 hours to get through the lines.

Going into Thursday, concern was raised about limited supplies after more than 600,000 people rushed to pre-order iPhones on the first day they were available, prompting Apple and its U.S. carrier, AT&T Inc., to halt orders for shipment by Thursday’s launch. On Apple’s website, new orders weren’t promised for delivery until July 14.

Apple spokeswoman Natalie Harrison said demand was "off the charts," and that the company was working hard to get phones into customers’ hands as quickly as possible.

Some stores sold out within hours. Brian Marshall, an analyst for Gleacher & Co., said certain Apple stores likely had enough iPhones to last into today before selling out. A new shipment could be in stores as early as Saturday, he said, but more likely won’t arrive until early next week.

Apple is having a hard time getting enough of the new custom parts for the iPhone 4, such as its new higher-resolution screen, Marshall said.

Apple has said the white iPhone it plans to produce has been more challenging than expected and won’t be available until late July. Only black models went on sale Thursday.

The Associated Press and Robert Cohen, Kim Bell and Matthew Franck of the Post-Dispatch contributed to this report.

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New York state legislators have avoided a government shutdown—for now—by enacting another emergency spending plan for the state.

The state has funded bare-bones operations through a series of the one-week plans, which are necessary because the full budget is now 76 days past due. For weeks, negotiations have produced few results.

Legislators passed the 11th straight emergency spending plan on June 14, allotting money needed to keep the lights on through June 20.

The bill’s fate was never in doubt in the Assembly, where Democrats enjoy a wide 107-42 margin. But three Republicans, including two Capital Region legislators, were critical in ensuring the bill passed the Senate.

Rejection of any earlier spending bills would also have led to a government shutdown. But this time, the odds of a shutdown were larger than ever, since at least one Democrat voted against the bill, and others threatened to do so.

Government would have shut down had the bill failed. It would have meant the closure of state agencies, parks and construction projects. State workers, vendors and unemployment benefits would not have been paid, or received IOUs.

A bipartisan vote was necessary because Sen. Ruben Diaz Sr. (D-Bronx) voted against the bill, protesting the cuts it made to welfare and public assistance.

Democrats have just a 32-30 margin in the Senate, and at least 32 votes are needed to pass a bill.

Republican Sens. Hugh Farley (Niskayuna), Roy McDonald (Saratoga) and Charles Fuschillo Jr. (Long Island) voted in favor of the bill.

The final Senate tally was 34-27.

Farley and McDonald faced particular pressure, since thousands of state workers live in their districts.

“Fear was used as a weapon today,” McDonald said on the Senate floor payday loans for bad credit.

Farley said he could not vote to shut down state government, at least this time.

“It enables this dreadful, dreadful budget process to keep going on. It lets this dysfunctional process continue,” Farley said in an interview. “But you can’t shut down state government. That would be a calamity.”

Still, Farley said he likely would not vote for future emergency spending plans if they included new or higher levels of taxes, fees or borrowing.

Sen. John Sampson (D-Brooklyn), the top Democrat in the Senate, thanked the three Republicans for their “courage and leadership.”

By law, Gov. David Paterson authors the emergency spending plans, which court cases have established as all-or-nothing votes for legislators.

This time, Paterson forced legislators to lock in full fiscal year spending on public assistance and welfare programs, including $3.5 billion for the Office of Temporary and Disability Assistance, a slight decrease from the 2009-10 fiscal year.

The state is saving $327 million by cutting support of some welfare-related programs, while also budgeting increased attrition and revenue from audits. There are no tax increases in the bill.

Last week, Paterson used the emergency spending plan to force legislators to establish almost all of the state’s Medicaid budget for the fiscal year, totaling more than $50 billion of spending. Medicaid and school aid, which legislators have not yet voted on, together make up more than half of the state’s annual budget.

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One in five licensed drivers — some 38 million Americans — lack the knowledge necessary to pass a written driving test, and even more are distracted while driving, according to a survey released Thursday.

The annual GMAC Insurance National Drivers test polled 5,202 licensed drivers from 50 states and the District of Columbia with a 20-question test derived from state department of motor vehicles exams. A passing grade was 70% or better. The survey also asked additional questions about distracting habits such as texting while driving.

Overall scores dropped from a year ago. Licensed drivers posted an average score of 76.2% versus 76.6% in 2009.

"It’s discouraging to see that overall average test scores are lower than last year," said Wade Bontrager, senior vice president of GMAC Insurance, in a prepared statement.

Nearly three out of four couldn’t identify safe following distances and some 85% incorrectly responded to questions about what to do when approaching a steady yellow light. This signals that licensed drivers lack knowledge of fundamental road rules, GMAC Insurance said.

Test performance varied widely by region. Drivers in the Midwest scored 77.5% on average, the highest among all regions, and had the lowest failure rates at 11.9%. Conversely, the Northeast scored the worst with an average score of 74.9% and had the highest failure rate of 25.1%.

Drivers in Kansas topped the nation with an 82.3% average score, while New Yorkers were last on the list with a score of 70% faxless payday advance.

Even more alarming is that Americans are increasingly multi-tasking while behind the wheel, the study found. About 25% of those surveyed admitted to driving while talking on a cell phone, eating, or adjusting their radios or iPods.

While only 5% of drivers said they texted while driving, Bontrager said that the "surprisingly low" number is still higher than it ought to be, adding that drivers may not have responded honestly to this question.

"The really sad thing is that you see [texting while driving] more and more in young drivers," said Bontrager. "They are not only the least experienced, but also need to pay the most attention to the road."

According to Bontrager, historic data supports that women tend to have fewer accidents than men, but the survey found that they were more likely to engage in distracting activities while driving than their male counterparts. And women also scored nearly four percentage points lower on the overall test than men, who averaged a score of 78.1%.

Although complete knowledge of the rules of the road won’t shield drivers from all accidents, being informed helps to ensure that they are more prepared to deal with unexpected events, Bontrager said.

"An informed driver is a safer driver, period," he said.  

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