Financial thoughts

Qantas Airways was expected to resume flying Monday after an Australian court intervened in a labor dispute that led the airline to ground its entire fleet over the weekend.

By the time the labor-relations court acted, several hundred flights had been canceled and tens of thousands of passengers stranded around the world.

Some airline industry experts say Qantas’ surprise grounding of its entire fleet Saturday could cause many travelers to book future trips on other airlines.

Qantas CEO Alan Joyce said he had no choice but to order the lockout of union workers and end months of rolling strikes that led to canceled flights, $70 million in losses and a collapse in future bookings.

Joyce told the Australian Broadcasting Corp. that he expected some flights to resume by mid-afternoon Monday. It was unclear how long it would take for the airline to resume a full schedule. The airline had estimated that it would lose $20 million a day during the lockout.

The Australian labor-relations court issued its ruling ending the standoff early Monday morning _ midday Sunday in the United States _ after holding an emergency hearing that included testimony from company, labor union and government officials.

The president of the labor-arbitration panel, Geoffrey Giudice, said the group acted to protect Australia’s tourism and aviation industry.

The airline said 447 flights had been canceled in the first 24 hours of the lockout. Qantas did not immediately update that figure.

Qantas is the largest of Australia’s four national domestic airlines, carrying about 70,000 passengers a day on a fleet of 108 planes that operate in 22 countries. In 2010, it was the 16th largest airline in the world by passenger miles flown, according to the trade publication Air Transport World.

Its major international destinations include Singapore, Hong Kong and London. In the United States, Qantas flies to Los Angeles, Dallas, New York and Honolulu.

Travelers reported being ordered to leave planes that were already on the tarmac when the lockout began Saturday. More than 60 planes in mid-flight flew to their destinations, then were parked.

Qantas said it paid to rebook passengers on other airlines, including compensating those who had to pay higher last-minute fares to get home.

For several weeks, workers have carried out rolling strikes and refused to work overtime to demand higher pay and protest the airline’s plans to cut about 1,000 jobs. Qantas, which has about 32,500 employees, wants to reduce costs by creating new Asia-based airlines for international flying. International flights were a roughly $200 million drain on the company last year.

The company reported in August that annual profit had doubled. But it said the business climate was too turbulent _ partly because of labor turmoil _ to forecast future earnings.

Henry Harteveldt, an airline industry analyst in San Francisco, predicts the shutdown will do long-term damage to the Qantas name by hurting its reputation for reliability.

“A lot of travelers won’t take a chance and will book away to Virgin Australia, Air New Zealand and other airlines,” Harteveldt said. “Brand loyalty in the airline business is very low, and there is so much competition.”

Before the court ruling, Virgin Australia said it was scheduling extra flights and offering 20 percent fare discounts to help stranded Qantas passengers through Thursday.

If Qantas loses customers, that could also hurt partners in its alliance of global airlines, including American Airlines. A rival alliance that includes Air New Zealand and is led by United Continental Holdings Inc. could benefit. So could a third group of airlines that includes several major Asian carriers and is led by Delta Air Lines Inc. and Air France-KLM.

Other industry veterans said the lockout was a daring move that will pay off for Qantas, which wants to expand the low-cost, low-fare model that it uses at its Jetstar Airways subsidiary.

Jetstar has extensive routes to Southeast Asia and Japan, and lower costs than Qantas. But Qantas unions fear that expansion of low-cost airlines will result in Australian jobs being sent overseas. CEO Joyce hopes to bend the unions closer to the company’s vision for growth by tapping into Asian markets.

“It was a very shrewd move by their CEO to force the issue and stop the potential deterioration of the brand,” said Mo Garfinkle, an airline consultant who has worked for Qantas rival Virgin Australia. “In the end, it will benefit Qantas financially.”

Garfinkle said the short duration of the fleet grounding will help Qantas get back up to full speed quickly, cutting its losses.

Source

Today’s record-low mortgage rates are out of reach for millions of U.S. homeowners who would benefit from them most.

One in four homeowners with a mortgage _ 11 million people _ owe more than their home is worth. These “underwater” borrowers have virtually no shot at refinancing.

Their plight is a drag on the housing market and the broader economy.

The Obama administration is hoping at least 1 million of these borrowers will take advantage of its refinancing program under more lenient rules unveiled Monday. Homeowners who are current on their payments will be eligible to refinance no matter how much their home’s value has dropped.

Still, it’s unclear how many borrowers will benefit. Lenders will remain under no obligation to refinance a mortgage they hold.

A growing number of these people are missing mortgage payments and falling into foreclosure. And the higher rates they’re locked into limit how much they can contribute to a weak economy. If they were able to refinance at today’s rates, it could boost consumer spending by tens of billions of dollars, economists say.

Underwater homeowners are paying an average 30-year fixed mortgage rate of 5.7 percent, according to an analysis of mortgage data by CoreLogic and The Associated Press. That compares with today’s average rate of 4.11 percent on a 30-year fixed mortgage. For a homeowner with a $250,000 mortgage, the lower rate would save more than $200 a month.

For many Americans, a few hundred dollars each month would mean the difference between paying their mortgage on time and in full and losing, or walking away from, their home guaranteed online payday loans.

Underwater borrowers are the “most desperate population in the country today,” says Barry Bosworth, an economist at the Brookings Institution.

Dan and Maggie Micoff bought a two-bedroom home in the Detroit suburb of Marine City in 2003. They paid $119,000. Eight years later, they’re underwater with a 6 percent loan.

If they could refinance, the Micoffs, both 58, could shave at least $120 from their monthly bill.

“The banks won’t work with us,” Maggie Micoff said. “We helped bail them out, and now we can’t even get a personal loan to get by. We could rent something for a few hundred dollars cheaper.”

Even among homeowners who do have equity in their homes, few are refinancing. Many have already refinanced within the past year. Others can’t meet tighter lending standards. That’s why underwater borrowers represent the best chance for refinancing to unleash spending that’s otherwise going toward mortgage bills.

With millions locked into artificially high rates, foreclosures are rising. Mortgage default notices surged nationally last month.

Whether the administration’s revamped mortgage refinancing program will reach more Americans this time is unclear, said Mark Vitner, senior U.S. economist at Wells Fargo.

“No one knows if it will spur a lot more people to refinance, but it’s a start,” Vitner said.

Source

Former Wall Street Journal publisher Les Hinton is due to give evidence to British lawmakers investigating the tabloid phone-hacking scandal.

Hinton, who also was CEO of Dow Jones & Co., resigned in July after revelations of illegal eavesdropping by Rupert Murdoch’s News of the World tabloid.

He will testify to the House of Commons media committee Monday by video link.

Hinton was Murdoch’s right-hand man until the scandal, which has convulsed Britain’s media landscape business cards.

The tabloid stands accused of illegally hacking into the voice mails of celebrities, politicians and crime victims in search of scoops.

Hinton headed Murdoch’s British newspaper division during some of the years phone hacking took place, but has said he was unaware of the wrongdoing.

Source

Orders are now being taken for the Kobo Vox, a full-colour seven-inch tablet the same size as the BlackBerry PlayBook.

TORONTO — The Canadian ebook company Kobo is getting into the crowded tablet market and beating a major competitor to the punch.

Orders are now being taken for the Kobo Vox, a full-colour seven-inch tablet the same size as the BlackBerry PlayBook.

It’s selling for about $200 and shipping starts on Oct. 28.

It’s a Wi-Fi only device, runs on the Google Android operating system and has eight gigabytes of memory. Kobo says it has up to seven hours of battery life.

The Vox will compete against a long list of tablets on the market, including Apple’s bestselling iPads, the PlayBook, Samsung’s Galaxy Tabs, Motorola’s Xoom and a host of smaller rivals online payday loans. But the Vox is about 40 per cent cheaper than the most-inexpensive iPad.

Kobo’s largest ebook competitor, Amazon, also announced its own tablet recently with similar specifications.

Called the Fire, it’s not due for release until Nov. 15 and is also selling for $199 in the U.S. There’s no release date set for Canada.

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A new wrinkle of disagreement has emerged in Missouri’s special legislative session on business incentives: State lawmakers and Gov. Jay Nixon now apparently are at odds over the production of military fighter jets.

The dispute comes after the Missouri House took a roughly half hour break from its debate last week over a wide-ranging business-incentive bill to instead discuss and pass a resolution urging Congress to provide full funding for the F-35 Joint Strike Fighter program. Although the plane is made by Lockheed Martin Corp. in Texas, the House resolution notes that its supplying companies employ more than 500 people in Missouri.

Nixon responded with a written statement last week asserting that the House resolution “simply is not the position of the state of Missouri.” Instead, the governor emphasized Missouri’s support for Boeing Co., makes the F/A-18 jet in St. Louis. Boeing said it employs about 15,000 people in Missouri, including about 5,000 connected with the F/A-18.

Was the House resolution a slap to one of Missouri’s biggest employers? Or was Nixon overreacting to a symbolic gesture that has no real effect?

The resolution’s sponsor, state Rep. Caleb Jones, R-California, said Monday that he had not intended to stir up controversy.

“I’m a big fan of Boeing _ they’re one of our largest employers in the state and I strongly support them,” said Jones, the vice chairman of the House Economic Development Committee. “I also support different companies from throughout Missouri.”

Jones said he sponsored the resolution at the request of a representative of a supplier, though he said Monday that he could not recall the person or the company’s name.

“If this resolution was going to cost Missouri jobs, I wouldn’t have done it,” he said.

The resolution passed the House 127-7, with most of the discussion focused on whether lawmakers were wasting their time on a measure that carried little more importance than a greeting card to Congress, instead of debating their own economic development legislation. Among those voting for the resolution was Rep. Clem Smith, D-St. Louis, a machinist for Boeing.

Representatives ultimately also passed a business incentive bill that would cut corporate income taxes and create new tax credits for computer data centers and international exporters, among others.

Underlying Nixon’s opposition to the House fighter-jet resolution is a concern that Boeing and Lockheed Martin could be in competition to make fighter jets in the future and a desire to avoid more immediate budget cuts to either the F/A-18 or F-35 programs as President Barack Obama and Congress search for ways to reduce the national debt.

Nixon spokesman Sam Murphey on Monday reiterated the governor’s concern about the House’s action.

“This resolution passed by the House last week simply was not the position of the state of Missouri, and it was important for us to clarify the state’s position,” Murphey said.

A Boeing spokesman declined to say whether the company viewed the House resolution as detrimental to its business. Instead the company issued a written statement saying: “We commend Gov. Nixon for his strong commitment to business in the state of Missouri and appreciate his efforts on behalf of the men and women of Boeing.”

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The son of an assassinated Kurdish opposition leader in Syria says his father’s death will encourage more Kurds in Syria to protest against the regime there.

In a telephone interview Sunday with The Associated Press from Irbil, Faris Tammo called on Syrian Kurdish groups to take a more active role in the country’s nearly 7-month-old uprising against President Bashar Assad.

Tammo has been living in Iraq’s Kurdish autonomous region since 2008, when he fled Syria when his father was arrested instant credit report.

His father, Mashaal Tammo, was assassinated Friday by masked gunmen.

Kurds make up 15 percent of Syria’s 23 million people and have long complained of discrimination.

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Stocks edged higher Thursday as investors weighed stronger September retail sales in the U.S. against a decision by the European Central Bank not to lower interest rates.

Target, Nordstrom, Macy’s and other retailers reported September sales results that beat Wall Street’s expectations. While some of the sales were driven by deep discounts, analysts said higher sales figures suggested the U.S. economy was not falling into another recession.

“The market has been pricing in an out-and-out recession, but the fact that consumer spending is holding up shows that we’re more likely to continue muddling through at a 1 to 2 percent growth rate,” said Brain Gendreau, market strategist at Cetera Financial Group.

The Dow Jones industrial average gained 28 points, or 0.3 percent, to 10,967 as of 11:00 a.m. Eastern.

The S&P 500 rose 4, or 0.4 percent, to 1,148. The Nasdaq composite added 19, or 0.8 percent, to 2,480.

Consumer discretionary stocks led the market higher after the stronger retail sales reports. Target Corp. jumped 4 percent after its September sales beat Wall Street’s expectations.

Investors also remained focused on Europe’s debt problems. The European Central Bank offered new emergency loans to European banks. It also announced that it would buy bonds issued by banks, making it easier for them to lend.

Investors have been worried that major European banks could face big losses if Greece defaults on its debt, as many expect will happen Same day payday loans. That would likely cause the value of Greek debt held by those banks to fall sharply in value. If that causes a big enough shock to those banks they could stop lending to each other, causing another freeze in global credit markets, as happened following the collapse of Lehman Brothers in 2008.

The European Central Bank disappointed some investors, however, by announcing that it would keep interest rates unchanged. Analysts were hoping the bank would cut rates to encourage lending and give a boost to Europe’s sagging economy.

In the U.S., the Labor Department said the number of new applications for unemployment benefits rose slightly last month to 401,000. While that is a signal that the job market continues to be weak, the increase was slightly less than what Wall Street economists had predicted, a signs that layoffs are easing. Unemployment benefits typically need to fall below 375,000 to signal job growth.

Corning Inc. rose 3.1 percent after it said it would increase its dividend and buyback shares. Apple Inc. rose 1 percent. The company said company co-founder and former CEO Steve Jobs died Wednesday. Several analysts and large investors said Thursday they believe the company would continue to grow under new CEO Tim Cook.

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DETROIT

The head of the European Commission says more unification is critical to the EU’s survival.

Jose Manuel Barroso, president of the European Union’s executive arm, says without “more unification,” there will be “more fragmentation.” He is giving his state of the union address in Strasbourg, France, on Wednesday.

“I think this is going to be a baptism of fire for a whole generation,” Barroso says.

However, he asserts that the EU can summon the leadership and the political will to come up with overall solutions to its crises, which involve the common currency and the borderless travel area.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

BRUSSELS (AP) _ The head of the European Commission says more unification is critical to the EU’s survival cheap business cards.

Jose Manuel Barroso, president of the European Union’s executive arm, says without “more unification,” there will be “more fragmentation.” He is giving his state of the union address in Strasbourg, France, on Wednesday.

“I think this is going to be a baptism of fire for a whole generation,” Barroso says.

However, he asserts that the EU can summon the leadership and the political will to come up with overall solutions to its crises, which involve the common currency and the borderless travel area.

Source

The headline on this section says it all: 61,000.

Of all the numbers generated by the economic downturn, this one puts the enormity of the employment crisis for St. Louisans in context.

Neither percentage, forecast nor trend, it’s a simple head count of the toll exacted on our friends, neighbors and loved ones.

And they should be counted one at a time.

In the nearly three years I’ve spent covering employment, I’ve been able get to only about 500 area residents displaced by a recession that allegedly ended 27 months ago.

One by one, they’ve shared their stories.

Sixty-one thousand people could overflow Busch Stadium by half, fill the Scottrade Center three times over and nearly fill the 70,000-seat Edward Jones Dome. One, by one, by one, each of them bears the scars of a job crisis the likes of which we last endured during the Great Depression.

When all this started, we never expected we’d have to count so high.

As the economy headed down, my editors assigned me to cover an emerging and important story the experts predicted would dominate the economic conversation for maybe the next year.

That was three years ago; the story shows no signs of fading any time soon.

The mere fact that I have a full-time job covering jobs - even as the newspaper business has shed thousands of its own workers - underscores the degree to which job security has become the central focus of our lives. I used to cover education, a beat that spawned hundreds of stories on the benefits of a college degree. Now even an education doesn’t guarantee you a job.

My only comparable reference point to what I’ve encountered on this beat are the years I spent as a young police reporter, interviewing shocked relatives reeling from the homicides and accidents that stole the lives of loved ones.

George Batten, a laid-off area executive out of work three years, put it in perspective last week: “A lot of carnage comes with losing a career,” he said. “It carries into your family. It attacks your life.”

That was never more clear than on the morning a year or so ago that I wandered into a salon for job-hunters at the moment the facilitator was conducting a word association exercise.

“First word that pops into your head when I say,