Personal Bankruptcy Filing Rate Up 250% from 2006

The number of bankruptcies filed by individuals in the first quarter of this year rose to an all-time high, up 2.5 times from the figure recorded over the same period last year. Furthermore, March alone recorded more individual bankruptcy applicants than any other month.

According to the Ministry of Finance and Economy and the Supreme Court on Sunday, a total of 45,057 individuals filed for bankruptcy in the first quarter, up 2.5 times from 17,679 and 7.4 times from 6,080 over the same period in 2006 and 2005, respectively.

The number of personal bankruptcy filings in March alone reached 16,232, up 2.6 times from 6,197 last March. At the current pace, the number of personal bankruptcies is likely to exceed last year’s total of 123,691, setting a new all-time high.

Bank interest rates on new loans are also constantly rising, adding to household burdens.

Annual variable interest rates on housing loans imposed by Kookmin Bank this week increased by 0.05 percentage points from last week’s to an annual 5.78 to 7.38 percent. In addition, the maximum interest rate soared by whopping 0.13 percentage points over the past month.

According to the Bank of Korea, savings bank interest rates on new household loans, including housing loans as of the end of March, were 6.32 percent, up by 0.64 percentage points from the same period last year.

Meanwhile, the prices of raw and processed materials in April rose by 3.9 percent compared to a year before, hitting an eight-month-high since last August’s 7.1 percent increase.

The Hyundai Research Institute said in a report, “This year’s economic growth rate will fall by 0.09 to 0.15 percentage points due to high raw materials prices which have been on the steep rise since last September.” [via]

Gas Prices Hit An All-Time High

(CBS) The national average price for a gallon of regular gasoline is $3.18, according to the latest Lundberg Survey. As CBS News correspondent Randall Pinkston reports, that is the highest average cost per gallon ever in the United States – even adjusting for inflation.

These days, every trip to the gas station is an experience in sticker shock. A gallon of regular gas costs $3.24 in New York. It's $3.45 in Milwaukee, and $3.59 in Chicago.

This weekend alone, from Friday to Sunday, the average price of gas went up another 5 cents per gallon.

A gallon of mid-grade gasoline averaged $3.29, and premium cost $3.40, according to the latest Lundberg Survey of seven-thousand gas stations across the country.

The price hikes are giving oil companies another banner year. First quarter profits for Exxon-Mobil totaled nearly $9.3 billion. Royal Dutch Schell picked up more than $6.9 billion. The number was $4.7 billion for Chevron.

In a December interview with CBS News, Shell's president defended the industry's high profits.

"The profits are high because the crude price is high, and the cost of producing that crude has not materially changed," John Hofmeister said. "Future investments cost more money."

Oil executives downplay the amount of fuel that can be produced from home grown sources like ethanol.

"I think independence is naive," Hoffmeister told CBS News.

U.S. inventories are at record lows for the pre-summer season – a sure fire formula for higher prices in the future. But many consumers are hurting right now.

To cope with climbing prices, commuters like Denise von Wilke are looking for every possible way to save. She drives more slowly and car pools with a co-worker for her 47-mile trip to work.

Von Wilke also uses the Internet to find bargains. She says she can find the lowest gas prices in all of New Jersey from her desk.

Across the country, the lowest price for regular fuel was $2.87 in Charleston, South Carolina, and the highest was in Chicago at $3.59 a gallon, according to the Lundberg Survey.

Higher fuel costs are driving many Americans to mass transit. The American Transportation Association reports more than 10 billion trips on trains and buses last year – the highest use of public transportation in 49 years. [via]

Wall Street Analysts Eye Undaunted Rise

By MADLEN READ

The stock market has been rising at an undaunted pace, and Wall Street is curious whether this week's readings on durable goods and home sales will cause anyone to flinch.

Recently, stocks, particularly those of large companies, have advanced even in the face of reports showing economic fragility. Robust data has been read as a good sign the consumer will keep spending, while weak data has been interpreted as a reason for the Federal Reserve to lower interest rates - a move that could lift the market further by freeing up more cash.

The Dow Jones industrial average has steadily advanced about 1,200 points since the beginning of April. Last week, it rose 1.73 percent, the Standard & Poor's 500 index rose 1.12 percent, and the Nasdaq composite index slipped 0.15.

The Commerce Department reports on durable goods orders Thursday. According to the median estimate of economists surveyed Friday by Thomson Financial, they are expected to have increased in April by 0.4 percent, a smaller gain than the 3.4 percent rise in March.

The department also reports on new home sales Thursday, while the National Association of Realtors releases data on existing home sales Friday. The market anticipates new home sales rose in April by 860,000, a slightly larger increase than in March, and existing home sales jumped by 6.115 million, a gain similar to that in March.

In many respects, economic data has taken a back seat to takeovers by big public companies like Microsoft Corp. (MSFT) and private equity firms such as Blackstone Group LP. The huge deals show that the marketplace is awash in cash, and investors will likely be awaiting another flood of deals this week.

Still, it's important to remember that negative data on durable goods and the housing market were two major factors behind the sell-off of late February and early March, so investors will be closely monitoring this week's releases.

OTHER ECONOMIC DATA

The schedule of economic reports is fairly slim ahead of the Memorial Day holiday May 28. The bond market will close early Friday.

On Monday, the Chicago Fed releases its April index of national manufacturing activity.

On Tuesday, Richmond Fed President Jeffrey Lacker makes a speech in New York.

EARNINGS REPORTS

This week brings quarterly profit results from several retailers, which could help investors gauge the financial health of U.S. consumers.

On Monday, home improvement goods chain Lowe's Cos. (LOW) releases its first-quarter earnings. Analysts surveyed by Thomson Financial are anticipating a profit of 49 cents per share. Lowe's closed at $32.67 Friday, at the upper end of its 52-week range of $26.15 to $35.74.

On Tuesday, BJ's Wholesale Club releases its first-quarter earnings, and analysts forecast a profit of 20 cents per share. The nation's third-largest retail warehouse club closed at $35.78 Friday, at the upper end of its 52-week range of $25.18 to $37.35.

Target Corp. (TGT) releases its first-quarter earnings Wednesday, and analysts predict the discount retailer will post a profit of 71 cents per share. Target closed at $58.15 Friday, in the upper half of its 52-week range of $44.70 to $64.74. [via]

Long Live the News Business

By Robert J. Samuelson
Newsweek

When I joined the Washington post as a reporter in 1969, hardly anyone I knew in the news business considered it a business. We belonged to a craft, a calling or maybe a profession. We didn't worry about the industry's "business model," a term we'd never heard. Economic realities occasionally intruded, usually involving salaries (always too low). But mostly we blissfully ignored the proposition that newspapers aimed to make money. We condescendingly thought that the moneymaking people—advertising salesmen, managers—toiled so that we could pursue our higher purpose, which was to inform the public. We were snobs.

We've been disabused of our naiveté and arrogance. All our business models (for newspapers, magazines, network news) are now in retreat, if not rout. The Internet is stealing our audiences and our ads. Few of us imagined ourselves as heirs to textile or steelworkers, disemployed by new competition and technology. But we are. From 2000 to 2006, editorial staffs at U.S. daily newspapers dropped 4,000, or about 7 percent, says the Project for Excellence in Journalism. Cuts continue at papers, as well as at magazines and in TV newsrooms.

Now, Rupert Murdoch's offer to buy The Wall Street Journal for $5 billion, or $60 a share (a 67 percent premium over the pre-off price), seems a further blow. On the one side is America's best news-paper, winner of 12 Pulitzers since 2000. But its costly news operations make it, at best, marginally profitable. (Dow Jones, the parent company, doesn't provide separate figures for the Journal.) On the other is Murdoch, a media buccaneer whose News Corp. owns the Fox News Channel, MySpace and the New York Post. The fear is that Murdoch would corrupt the Journal's news pages by installing editors who would peddle his conservative views and echo its already conservative editorials.

So it's journalistic integrity versus the almighty buck. The Bancroft family, which controls 64 percent of Dow Jones's voting stock, must decide. Well, not exactly. This conventional view, I think, vastly oversimplifies. Who wins may matter much less than we think.

Murdoch pledges to respect the Journal's independence, and why shouldn't he? He's 76. Does he want to be remembered for destroying a national treasure? Moreover, the Journal's main economic asset is its reputation. Ruin that, and its circulation and ads will shrink. Murdoch proposes an independent board to settle disputes with editors and to approve changes of the top two editors. He told The New York Times that he would invest more in the Journal. "[H]e spoke enthusiastically about opening new bureaus ... [and] says he is spoiling for a fight with the Financial Times," wrote the Times's Andrew Ross Sorkin.

What I think is occurring is that we news types are mourning our lost autonomy and power. We're angry that, like everyone else, we're subject to business and financial pressures. Editorial independence has subtly eroded. Decisions about what topics to cover (health, technology) are increasingly tailored to appeal to advertisers. Splintering media markets have weakened the economic base for newsgathering. In 2005 and 2006, Time magazine cut its news staff by 14 percent, says the Project for Excellence in Journalism; it reckons that NEWSWEEK's staff is half its 1983 level (though Web hiring has offset some losses). Even if the Journal rebuffs Murdoch, it cannot escape these pressures. It has already put ads on section fronts.

The changes involve more than economics. When I started, print journalism required two basic skills: reporting and writing. Now, journalists are expected to be multimedia utility players, feeding Web sites, posting videos and doing TV. Up to a point, this is valuable: finding new ways to engage and inform. But it's also time-consuming and detracts from reporting. Just what constitutes journalism is less clear. Hitwise, a survey firm, counts 8,001 news and media Web sites. The largest (Yahoo News) has only 7 percent of the traffic. The skills that are rewarded are shifting from diligent, curious and clear, to tech-savvy, quick and edgy.

If the Internet permanently crashed tomorrow, I'd be thrilled. Still, the sky-is-falling view of the news business is a triumph of heart over head. Parts of the news complex are expanding. Bloomberg News has 2,300 reporters and editors worldwide, up 300 from early 2006. Among most reporters and editors, journalistic norms—respect for facts, an effort to be fair—endure. Despite problems at individual news organizations, the public has access to more news than ever. People are no less informed. A poll by the Pew Research Center reports that in 2007, 69 percent of the public can identify the vice president, down from 74 percent in 1989; but 76 percent know which party controls Congress, up from 68 percent. "[T]he findings suggest little change in overall levels of public knowledge," says Pew. The real news about the news business is that it isn't collapsing. It's merely changing.
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Premier lauds ethnic business organizations

Emerging ethnic business organizations are helping this province strengthen its economic advantage over the competition, Ontario Premier Dalton McGuinty told the local Caribbean business community Thursday.

"By pulling together members of the Caribbean diasporas, you are helping to strengthen the economic advantage provided by our diversity," McGuinty told members of the Canada Caribbean Business Council at a dinner held at the Holiday Inn Select on Peel Centre Drive in Brampton. "By working with other people and organizations the CCBC is doing much to build opportunities for your community and indeed for all Ontarians. And that means you are positioning Ontario to build stronger ties including a stronger relationship with the Caribbean."

About 200 people attended the event, hosted by the CCBC in conjunction with the Brampton Board of Trade.

Among those present were numerous local and foreign dignitaries, including consular generals representing St. Vincent and the Grenadines, Guyana, Barbados and Trinidad and Tobago.

In his address, McGuinty said it is vital for governments and business leaders work together in order to generate success.

In the case of Ontario's various ethnic communities, it is essential for those who have found success to help pave the way for others by giving back, and by acting as role models.

"As business leaders you can show our young people the way as role models because when young people see someone who looks like them in a position like yours, they can start to see themselves there too," McGuinty said. "All of us who come here are obligated to bring honesty and a solid work ethic. And all of us who are already here are obligated to build opportunity for those who are arriving. That's the deal."

The CCBC was launched nearly a year ago with the intension of acting as a venue where business people of Caribbean origin can network and find support.

The aim of the group is also to spearhead change within their own community, in part by providing a means by which young people and women can find employment and gain business experience.

Prior to McGuinty's speech, a number of speakers addressed the crowd.

Bali Singh, CCBC chair, told the audience flat out the purpose of the event was to attract financial support for the organization.

He used the opportunity to ask for help and lay out exactly what the group intends to achieve.

"Many of best and brightest people immigrate to Ontario with their families, unable to find friendly business organizations in their community. These people end up getting lost in menial jobs," Singh told the crowd. "This is where the CCBC can help, by becoming that bridge that links those individuals with others to find meaningful jobs, to start their own business, to give them the opportunity to support their families and to become contributors to this great province."

Singh said the CCBC is geared to creating mentorship and sponsorship programs for youth, initiatives to increase the profile of Caribbean women and advocating on behalf of the community.

"There are three main things we want to see happen for our community. We want to see a sense of pride being reinstalled in our youth. By bringing our business people together, we believe that we can be that bridge between mentorship and job placement for them," Singh said. "We can set the example for our youth to emulate and surpass."

"Tonight you all have the opportunity to form pathways and make connections that will help you help each other and grow together," McGuinty added. "And I wish you every success because your success is Ontario's success."
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British business press - May 20

Marks & Spencer (MKS.L: Quote, Profile , Research) is this week expected to post annual profits of around 964 million pounds, the group's highest figure since 1998, when it reported 1.2 billion pounds. The group is also expanding its food business, and will within the next two years have 200 Simply Food outlets at BP (BP.L: Quote, Profile , Research) petrol stations and Moto service stations, the initiative forming part of chief executive Stuart Rose's strategy to place premium food in new markets. Rose is set to pocket a cash bonus of up to three million pounds as a reward for the group's impressive numbers.

TRAVELODGE IN 3.5 BILLION POUNDS PUSH TO DOUBLE SIZE

Travelodge is to announce a 3.5 billion pounds investment programme that will see it double in size, create 600 new British hotels, increase its number of hotel rooms by around 50,000, and create in the region of 10,000 jobs, giving it a ten percent share of the entire UK hotels market, chief executive Grant Hearn saying: "Mass market brands such as Tesco (TSCO.L: Quote, Profile , Research) would always aim for at least ten percent of market share. Travelodge's strategy is designed to deliver the same strong market position."

EX-BBC BOSS ON EMAP SHORTLIST
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Russia not to allow state companies to default

Russia will not allow indebted state companies to default, Economy Minister German Gref told reporters on Saturday.

"We have all the possibilities not to allow defaults of state controlled companies," Gref told reporters.

Russian state controlled companies such as Gazprom (GAZP.MM) and Rosneft (ROSN.MM) have been borrowing heavily abroad to go on a spending spree to expand their businesses.

"In order to pay back this debt we will have to sell parts of these companies which will eventually lead to bureaucrats having less influence in the economy," he said.

Gref said Russia "had every chance" of meeting its 8 percent inflation target for 2007.
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