Finance and Economic

These Colorado attorneys have been named Colorado "Super Lawyers" for 2009 as announced by their firms.

Super Lawyers are selected annually by the legal journal Law & Politics based on 12 indicators of peer recognition and professional achievement. They represent the top 5 percent of attorneys in each state. The selections are drawn from peer nominations and evaluations and third-party research.

"Rising Stars" are outstanding young and new attorneys.

Practice areas given below are as provided by the attorney’s firm. Submit Super Lawyers lists by e-mail to denvernews@bizjournals.com .

Click here for the Super Lawyers home page .

Otten Johnson Robinson Neff + Ragonetti PC

• Douglas J. Becker (tax)
• William R. Neff (business corporate/tax)
• Thomas J. Ragonetti (land use/zoning, real estate, government/cities)
• Frank L. Robinson (real estate, business/corporate)
• Brad W. Schacht (business litigation, bankruptcy & creditor/debtor rights)
• John D payday loans in one hour. Sternberg (real estate)
• Darrell G. Waas (business litigation, bankruptcy & creditor/debtor rights, construction litigation)
• Michael Westover (real estate)
• Rising Star: Amy Hansen (real estate)

Fairfield and Woods PC

• Caroline C. Fuller (commercial bankruptcy, receivership, out-of-court debt restructuring)
• John A. Eckstein (corporate finance, securities)
• Robert L. Loeb Jr. (corporate attorney)
• Craig D. Joyce (litigation)
• Charles F. Brega (litigation)
• Thomas P. Kearns (real estate)
• Charlton H. Carpenter (real estate)
• J. Chris Kinsman (mixed-use development)
• Rising stars: Frank C. Debick, Rehan K. Hasan

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More than half of Texas business leaders interviewed in a new survey say they are under pressure to cut costs.

Fifty-eight percent of respondents to a survey released Thursday by Waco-based Profiles International said they would have to cut costs this year, with the same number saying the survival of their business would depend on successfully implementing change. Profiles International is an employment evaluation and human resources management assessment tools firm.

But while leaders say change must happen, 28 percent are finding it difficult to manage internal restructuring or reorganization, and 39 percent are more aware of competition threatening their business, the survey shows.

“It’s evident the economy is forcing Texas companies to do more with less,” Bud Haney, co-founder and president of Profiles International, said in a statement. “Smart companies are employing strategies to reorganize existing resources quick payday loan.”

Of business leaders who responded, 65 percent said one of their biggest staffing challenges this year will be to improve the performance of existing employees. Fifty three percent said they plan some level of hiring freeze, but if they did hire, 66 percent said they would choose a seasoned worker over a new graduate.

Leaders also thought other companies’ layoffs could be good for their own company. Sixty percent responded that the current economy made it easier to recruit top talent, while 57 percent said it was easier to retain top executives.

The Profiles International Texas Business Challenges Survey was administered as an online survey in partnership with Sam Houston State University College of Business, and 285 business leaders responded between Dec. 1, 2008 and Jan. 31, 2009.

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Oil fell more than $2 towards $34 a barrel on Monday as signs of a resolution of a gas dispute between Russia and Ukraine and after a cease-fire between Israel and Hamas in Gaza eased supply concerns.

The market remained under pressure from expectations the weakening global economy would erode oil demand. The International Energy Agency and other forecasters cut their 2009 demand forecasts last week.

"Right now the economy is dominating," said Harry Tchilinguirian, analyst at BNP Paribas. "The market is very volatile and the signs are that demand is weakening."

U.S. crude oil futures for February delivery dipped to a low of $34.08, down $2.43, before recovering to trade around $34.15 by 11:30 a.m. ET.

Traders said the February U.S. crude oil futures contract, which expires on Tuesday, also fell because of very high stocks at the delivery point for the U.S. futures contract.

Only just over 2,600 lots were traded on the February U.S. crude contract. The March contract was much more active as more than 21,000 lots changed hands.

London Brent crude for March fell to a low of $44.20, down $2.37, before edging up to $44.30.

Russia and Ukraine were aiming to sign an agreement on Monday to restart gas flows to Europe through Ukraine after finally agreeing a price for 2009 supplies instant payday advance.

Also easing concern about energy supplies, Israeli forces began to pull out of the Gaza Strip following a tentative truce with Hamas after the three-week war, easing tension in a region which pumps about a third of the world’s oil.

Prices came under pressure on Friday after the IEA, an adviser to industrialized countries, joined the ranks of forecasters predicting a fall in world oil demand in 2009.

OPEC, the oil exporters’ group, has cut production three times since September to try to stem falling prices. It might consider reducing output again, Algeria’s oil minister Chakib Khelil said on Saturday.

Oil has collapsed by more than $110 a barrel since reaching a record high of $147.27 a barrel in the summer as the global economic slowdown has eroded demand and consumer spending.

Still, some in the oil market think there is little room for prices to fall much further.

"It looks as if Brent will hold in the current $40-$50 range," said Christopher Bellew, a broker at Bache Commodities. "I do not anticipate new lows." 

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Sprint Nextel Corp plans to cut costs and use cash to pay back its $3 billion of debt due in 2009 and 2010, rather than raise new financing in tight capital markets, its finance chief said on Monday.

Chief Financial Officer Bob Brust plans to prepare a cost cutting plan for the board in January that may include layoffs, more outsourcing and a reduction in network expansion plans.

“The main focus for 2009 is cash, keeping the company completely liquid in this economy,” Brust told Reuters. “We’re going to carefully look at the cost structure …. Everything’s on the table.”

He said that Sprint, which has already been offering buyouts to employees, could cut jobs, eliminate expensive contractors, and outsource some information technology functions.

While the company will continue spending to maintain its network quality, it would likely hold back on any expansion until the economy starts to improve, Brust said.

“You can always postpone things until after the storm passes,” said Brust.

But he said the company would not be looking to sell assets because it would be difficult to find a buyer in the current credit squeeze.

SAVING

Brust took over as CFO in May after previous CFO Paul Saleh left in a management reshuffle a few months before. The No. 3 U.S. wireless service has been suffering from such losses because of weak network capacity and poor customer service since its 2005 purchase of Nextel Communications fast pay day loans.

The company has $600 million of debt due to be paid in May 2009 and another $2.4 billion in 2010, but it plans to avoid requiring new capital in the next two years, Brust said.

As well as paying down debt, he said the company, which has about $4 billion in cash, also needs to reallocate some savings to boost advertising and other efforts aimed at stemming customer losses.

While Chief Executive Dan Hesse will make the ultimate decision on such efforts, Brust said he would advise that Sprint not use cellphone service price cuts as part of its efforts to help retain users or attract new ones.

Brust said Sprint’s outlook was unchanged from November 7 even as the U.S. economic situation has deteriorated significantly.

“So far on the wireless side there’s been no mass disruption I can see,” he said. “So far we’re where we were when we did the announcement in November …. We’ve seen pressure from the recession but nothing crazy.”

Sprint on November 7 forecast downward pressure on average monthly revenue per user in the fourth quarter and continued pressure on postpaid subscriber numbers. However, it noted that gross customer additions would stabilize, with customer cancellations at a similar rate to that in the third quarter. 

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Rising corporate debt delinquencies and the first sovereign credit default in two years are kindling investor concerns that more emerging market borrowers could fail to repay their debt.

As the global credit crunch trundles past its first anniversary, some firms and governments are faltering on rising refinancing costs and heightened investor risk aversion.

Seychelles failed to service a privately placed 55 million euro note last month and now teeters on a default of its $230 million global bond due this October.

The tiny island-nation’s debt woes have emerged as sovereign default risk premiums for Argentina, Ecuador and Pakistan soar.

“With the deteriorating global growth environment, you have to believe some countries may get into trouble,” Angus Halkett, Deutsche Bank emerging markets strategist.

The level of distressed emerging sovereign debt — defined as bonds trading at spreads over U.S bad credit payday loans. Treasuries of above 1,000 basis points — remains relatively low.

By mid-August, it amounted to $3.3 billion or 2.1 percent of outstanding sovereign bonds versus 1.6 percent in June 2007 before the onset of the liquidity crunch.

Investors say sovereign debt default risks remain low. 

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Malaysian Premier Abdullah Ahmad Badawi cut taxes, promised free electricity for the poor and raised food subsidies in a budget designed to fight inflation and prevent the opposition from seizing power.

Announcing a 5.1 percent increase in next year's spending, Abdullah today pledged bonuses to civil servants, lowered duty on home purchases and doubled the number of households on state welfare. Higher spending in 2008 will reverse five years of shrinking budget deficits and create Malaysia's biggest overspend since 2003.

Abdullah, 68, is facing renewed calls from his own ruling National Front coalition to resign after leading the government in March to its worst election performance in half a century. Today's handouts may soften the impact of the fastest inflation in 26 years and stall a campaign by opposition leader Anwar Ibrahim to oust the government.

“These are populist measures,'' said Singapore-based Kelvin Miranda, an investment strategist at Blufire Asset Management Sdn., which manages $110 million in assets. “He's trying to buy time.''

The government will reduce the top personal tax rate to 27 percent in 2009 from 28 percent, Abdullah said in a speech to parliament. About 1.1 million lower-income households will be eligible for free electricity, while the premier allocated an extra 3.6 billion ringgit for food subsidies this year.

Suffering Poor

The handouts are “not commensurate with the vast increase in inflation and high costs,'' Anwar said after Abdullah's speech. “What is given does not actually alleviate the problems and sufferings of the poor.''

The government's 2008 budget shortfall will reach 34.5 billion ringgit, or 4.8 percent of gross domestic product, the Ministry of Finance said today. The deficit last grew in 2002.

Abdullah increased by 20 percent the tax on cigarettes sold by companies including British American Tobacco (Malaysia) Bhd. to help offset the widening gap between spending and revenue.

Voter anger over rising prices contributed to opposition gains in the March vote that deprived Abdullah's coalition of its two-thirds majority in parliament. Malaysia's inflation accelerated to 8.5 percent last month after the government raised fuel prices to lower subsidies as crude surged.

Malaysian stocks jumped the most in more than five months on speculation that the first cut to the personal income tax rate in seven years will spur consumer spending. Abdullah proposed a range of tax exemptions for employers, from medical costs to maternity expenses faxless payday loans.

Economic Growth

Abdullah needs Malaysians to spend more as exports slow to the U.S., Malaysia's largest trading partner. The Asian nation's economy expanded at the slowest pace in a year in the second quarter as manufacturing eased amid a global slowdown and faster inflation hurt consumer spending.

Southeast Asia's third-largest economy grew 6.3 percent in the three months ended June from a year earlier, down from a 7.1 percent gain in the first quarter, the central bank said today. Economic growth is forecast to ease to 5.7 percent this year and 5.4 percent in 2009, the weakest pace since 2005.

Anwar, who won a parliamentary by-election this week, has said he plans to lure enough lawmakers from the ruling coalition to form a new government next month. The former deputy premier has promised to reduce fuel prices should he seize power.

“The government is responsive to the concerns of the people and has taken measures to lighten the burden of all Malaysians,'' Abdullah said in his speech. “Efforts by certain parties to destabilize the country by attempting to seize power through illegitimate means, and without the mandate of the people, must be rejected.''

Gasoline Prices

Governments across Asia are spending more on subsidies to help the poor cope with higher oil and food costs. Inflation that the Asian Development Bank estimates may reach the highest in a decade in 2008 has stoked voter unrest in the region.

In response to public discontent over costlier fuel, Abdullah last week cut gasoline prices by 5.6 percent and lowered diesel costs by 3.1 percent, saying he wants to ease the burden of consumers and reduce inflationary pressure. The government will also spend 5 billion ringgit on cash rebates to car owners this year, is subsidizing gasoline for taxis and has allocated 2.5 billion ringgit for food security.

Malaysia's government subsidies on bread, cooking oil, fuel and programs to enhance food security will jump to 34.1 billion ringgit this year and total 33.8 billion ringgit in 2009, according to the finance ministry. Still, the ministry expects the budget deficit to narrow to 3.6 percent of GDP next year.

Inflation in Malaysia will remain high until early 2009 before “moderating towards mid-year,'' according to today's report by the Finance Ministry. The government will introduce new measures to boost its social assistance program, it said.

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Sales of previously owned U.S. homes fell in June to the lowest level in a decade as tumbling real- estate prices and consumer confidence signaled no end in sight to a housing recession now in its third year.

Resales dropped 2.6 percent to a lower-than-forecast 4.86 million annual rate from a 4.99 million pace the prior month, the National Association of Realtors said today in Washington. The median home price dropped 6.1 percent from June 2007.

The housing slump may deepen further after mortgage rates climbed to the highest in a year this month and turmoil engulfed Fannie Mae and Freddie Mac, which account for more than two- thirds of new home-loan financing. A record 18.6 million houses, apartments and condominiums stood empty in the last three months as the industry's recession reverberated through communities, separate figures showed today.

The NAR report “is, unfortunately, not telling us about an end'' to the slide, said David Resler, chief economist at Nomura Securities International Inc. in New York. “Housing is going to be a non-contributor, if not a drag, on the overall economy.''

The Standard & Poor's Supercomposite Homebuilding Index dropped 7.2 percent to 273.96 at 11:49 a.m. in New York. By comparison, the Standard & Poor's 500 Stock Index lost 1.1 percent, to 1,267.74.

Economists forecast home resales would fall to a 4.94 million pace, according to the median of 77 projections in a Bloomberg News survey. Estimates ranged from a 4.79 million pace to 5.1 million rate.

Jobless Claims

The Labor Department earlier today reported that first-time claims for unemployment benefits rose last week to the highest in almost four months, a sign the slowing economy is weakening the labor market. Applications increased by 34,000 to 406,000 in the week ended July 19.

Compared with a year earlier, existing home sales were down 16 percent in June. Purchases are down by about a third from a record of 7.25 million reached in September 2005.

The number of previously owned unsold homes on the market at the end of June rose to 4.49 million from 4.482 million in May. The total represented 11.1 months' supply at the current sales pace. The agents' group has said that a five-to-six month's supply reflects a balanced market.

“The biggest problem is that we've not yet seen inventories come down,'' Paul Puryear, managing director of Raymond James & Associates Inc. in St. Petersburg, Florida, said in an interview with Bloomberg Radio yesterday. The housing market isn't likely to recover until at least 2009 or 2010, he said.

Property Types

Sales of existing single-family homes declined 3.2 percent to an annual rate of 4.27 million. Purchases of condos and co- ops increased 1.7 percent to a 590,000 pace.

The median sales price fell to $215,100 from $229,000 in June 2007 http://abc-cashadvance.com. The median cost of a single-family home decreased 6.7 percent to $213,800, while that of condominiums and co-ops fell 2.2 percent to $224,200.

Purchases decreased in three of four regions, led by a 6.6 percent decline in the Northeast. Sales rose 1 percent in the West, which also showed a 17 percent drop in the median price, the biggest of any region.

The glut of homes may be even greater because not all foreclosed properties are counted by the Realtors group. The group only includes foreclosures that have been listed on the multiple listings service.

Vacant Properties

The number of vacant houses hit an all-time high in the second quarter as more properties were pushed into foreclosure. A total of 18.6 million U.S. houses, apartments and condominiums stood empty, more than at any time in history, as lenders seized a record number of properties. The figure was 6.9 percent higher than a year earlier, the U.S. Census Bureau said in a report today.

More Americans are walking away from their homes as property values slump and borrowing costs on adjustable-rate mortgages reset higher. Bank seizures increased a record 171 percent in June from a year ago and foreclosure filings rose 53 percent, RealtyTrac Inc., a seller of default data, reported this month.

Home prices nationwide have fallen 18 percent on average from their July 2006 peak, according to the S&P/Case-Shiller index of 20 metropolitan areas. The drop in values may be giving those buyers still able to get financing reason to hesitate.

Consumer sentiment dropped in June to the lowest level in 28 years, according to the Reuters/University of Michigan survey, and the economy lost jobs for a sixth straight month, adding to reasons home buyers are sidelined.

Fannie, Freddie

Concern over the ability of Fannie Mae and Freddie Mac, the largest U.S. purchasers of mortgages, to survive the meltdown in subprime lending has heightened the credit crisis and may further curtail access to loans.

There is “no sign of a recovery in housing'' this year, Caterpillar Inc., the world's largest maker of earthmoving equipment, said in a statement this week. The company said second-quarter profit climbed 34 percent, exceeding analysts' estimates, on demand for backhoes and mining tools in China and the Middle East.

Caterpillar's Chief Executive Officer Jim Owens said he expects the U.S. economy, including the housing market, to begin recovering next year.

“We will get this problem behind us,'' Owens said in a July 22 interview with Bloomberg Television. “It will probably take another six months to a year, but it will come back.''

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The Washington Post has named Marcus Brauchli, the former top editor of The Wall Street Journal, as its new executive editor, The Washington Post Co said on Monday.

Brauchli, 47, will oversee the operations of the Post and washingtonpost.com, a sign that the newspaper may be assuming more control over the website, which has been separately run. James Brady, executive editor of washingtonpost.com, will report to Brauchli, the Post said in a statement.

Brady was on vacation and not available for comment.

The newspaper, one of the largest dailies in the United States, has traditionally favored insiders who came up through the editorial ranks for its top editorial positions.

“Marcus has the ability to think strategically about our newsroom, about how to realign our resources in a way that is consistent with what readers want and expect and maintain the Post’s first-rate journalism,” Washington Post Publisher Katharine Weymouth, 42, said in the statement.

Weymouth took over as publisher in February and is a likely successor to her uncle, Post company Chairman Donald Graham cash advance today. Picking Brauchli is a clear sign that Weymouth is putting her own imprint on the Post as it strives to meet the needs of readers who are increasingly getting free news online.

Brauchli was managing editor of The Wall Street Journal until he resigned earlier this year to make way for new owner Rupert Murdoch’s candidate. Murdoch’s News Corp bought the Journal and parent company Dow Jones & Co last year.

In the past month, Post and Journal employees said that Brauchli was up for consideration as the Post’s executive editor once Leonard Downie, Jr., the current executive editor at The Washington Post, retired. 

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The European Central Bank’s interest rate rise sends a signal that it is serious about combating inflation, policymakers said as they staged a public relations offensive to justify Thursday’s increase.

A day after raising rates to a seven-year high of 4.25 percent, policymakers around the 15-nation region denied that the increase would choke economic growth and said soaring inflation was a bigger danger to consumers.

Luxembourg’s Yves Mersch said the ECB could do little to influence soaring international commodity prices but it could take steps to head off euro zone wage pressures. “We are sending a signal today which shows that we are determined to act against home-made inflation,” he told the Luxemburger Wort newspaper.

Inflation rose to a record 4 percent in June and policymakers have vowed to prevent these high rates from pushing up inflation expectations, prompting workers to demand big pay rises and firms to jack up their prices faxless cash advance.

Expectations calculated from yields on some inflation-linked bonds are at record highs and ECB Executive Board member Jose Manuel Gonzalez-Paramo said it was vital to keep these in check.

“If these expectations become permanent in the system, we are lost,” he told a seminar in San Sebastian, Spain.

The ECB raised rates by 25 basis points but President Jean-Claude Trichet said the Governing Council had no bias in favor of further rate moves, damping bets on another increase soon.

Other policymakers including Italy’s Mario Draghi, Germany’s Axel Weber, Cyprus’s Athanasios Orphanides and Austria’s Klaus Liebscher, gave little away about the future path of rates, but backed Trichet’s message of rising inflation worries. 

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There is little debate about whether the U.S. economy is in a recession. The question is how painful and long the downturn will be.

There is a growing fear among some economists that the recession will be particularly bad.

"We just can’t believe it’s going to be short. The question is how bad can it get? The situation is moving more towards severe than towards mild," said Allen Sinai, chief global economist for Decision Economics.

According to the National Bureau of Economic Research, the firm that officially determines when recessions begin and end, the last two recessions (2001 and 1990-1991) each lasted 8 months.

But Sinai and other economists cited numerous economic headwinds, including tight credit, falling home prices and mounting losses for banks, as reasons why this downturn could last longer and be more painful than seen in those last two recessions, with more job losses and a sharper drop in economic activity.

In addition to the drag on the economy from rising job losses, they also pointed to record high commodity prices and plunging confidence as factors that could cut into consumer spending.

Since consumer spending makes up nearly three-quarters of the nation’s economic activity, any decline in spending can create a downward spiral for the whole economy.

"We have a deadly combination of commodity price inflation and credit contraction," said University of Maryland economics professor Peter Morici. "It’s tough to imagine a worse combination. In a worst case scenario, the recession could last several years."

The Federal Reserve is still projecting modest growth for the U.S. economy in the second half of this year though, as are many economists. This is based on the belief that the economic stimulus package passed by Congress in February and a series of interest rate cuts by the Fed should lead to higher spending by consumers and businesses in the coming months.

But even Fed policymakers voiced worries of a worse downturn according to the minutes of their March 18 meeting released last week.

Many of the problems facing the economy will come into focus this week as many top bank and Wall Street firms report results and the government will give its latest update on inflation and housing starts.

Citibank (C, Fortune 500), Washington Mutual (WM, Fortune 500) and Merrill Lynch (MER, Fortune 500) are expected to announce additional losses.

Meanwhile, the Consumer Price Index and Producer Price Index, two of the government’s key inflation readings, are likely to show big jumps in March compared to February.

But it’s the crisis in housing that is of particular concern check cash advance.

Economists forecast that the Census Bureau will report building permits hit a 17-year low in March and that housing starts were anemic.

And during a conference call with investors Monday, Don Truslow, chief risk officer of banking giant Wachovia (WB, Fortune 500), said home prices should fall through 2008 before finally hitting bottom in the middle of 2009. (Wachovia, the No. 4 U.S. bank by assets, reported an unexpected loss Monday.)

Sinai argues that until housing prices turn around, there isn’t much hope for a pick-up in the economy because housing woes will continue be a drag on consumer spending and the credit markets.

"So much borrowing and lending was leveraged to [housing], that as long as values keep going down, the exposure of consumers, of financial institutions and of investors remains extremely high," he said.

Bill Hampel, chief economist for the Credit Union National Association, said the run-up in home prices in the middle of this decade led consumers to take on much higher levels of debt than in the past.

As long as home prices continued to rise, homeowners were able to tap into home equity lines of credit. But with home prices falling and credit suddenly tight, many households have lost this extra source of income. That could create a significant and long-lasting decline in consumer spending.

"What happened in the short space of the last five years was pretty scary — household debt rose to about 125% of income. It hadn’t ever been 100% before that. It took consumers a long time to get into these conditions; it’s going to take a long time to get that fixed," Hampel said.

At the same time, consumers are also facing rising prices at the grocery store and gas station. The Fed’s rate cuts have cut into the value of the dollar, further increasing the costs of commodities, which impacts the price of food and oil. This may only get worse if the dollar keeps falling.

"It seems to me the big wild card for the economy would be a sharp decline in the dollar, which in turn would cause U.S. inflation to spike up," said Paul Kasriel, chief economist with Northern Trust.

That would be a problem since it would force the Fed to start raising interest rates again in order to make sure inflation does not get out of hand, Kasriel said.

And rate hikes at a time when the economy is trying to rebound from this slowdown could kill any chances of a quick recovery.  

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