Money world

Bank of Montreal officially kicks off the banks’ fourth-quarter reporting season today, but a string of dour earnings previews and last-minute manoeuvring by its bigger rivals has already given the period an inauspicious start.

Royal Bank of Canada and Toronto Dominion Bank helped fuel that foreboding yesterday. RBC warned its fourth-quarter profit would likely tumble by 15 per cent to about $1.1 billion from $1.3 billion a year ago because of escalating trading losses. It later said it would raise $225 million by selling 9 million preferred shares for $25 each to plump its regulatory capital.

TD, meanwhile, said it would bolster its capital position by selling about $1.2 billion in common stock. Confirmation of the stock sale comes just days after it disclosed about $350 million in credit trading losses for the fourth quarter. The sale of 30.4 million common shares for $39.50 apiece is a discount to yesterday’s closing price of $42.90 on the TSX.

TD chief executive officer Ed Clark said the move was meant to quell "investor concern" about TD’s capital position by providing extra assurance.

"We’re in a world where the market is very skittish, very nervous. They have low visibility about what’s coming in the future," Clark said in an interview. "What it is going to say is that we’ve got an extra layer of security. We really, clearly have bulked up so that we can take whatever the world brings us going forward."

TD’s Tier 1 capital ratio was 8.3 per cent as of Nov.1. That key financial measure would likely rise to 9 per cent following the $1.2 billion common equity issue and a previously announced $220 million offering of preferred shares. Banks are required to maintain a Tier 1 capital ratio of at least 7 per cent.

For its part, RBC said its Tier 1 capital ratio would decline to 9 per cent from 9.5 per cent at the end of the third quarter. Its new $225 million preferred share offering follows a recent $300 million preferred share sale. The moves are expected to add $525 million to Tier 1 capital.

RBC also warned its profits for the three months ending Oct. 31 would be hurt by about $670 million in pre-tax trading losses.

"These are challenging times, with extreme volatility in the global financial markets and an uncertain outlook," stated CEO Gord Nixon businesscards. "However, RBC continues to be in a strong financial position. We are focused on prudently managing our balance sheet, while continuing to provide our clients with excellent financial advice and service."

RBC is the third bank to preannounce partial results. Last week, TD said its fourth-quarter profit would be pinched by $350 million in credit trading losses, while the Bank of Nova Scotia will absorb about $890 million in pre-tax writedowns related to trading and souring investments.

Analysts say writedowns from the "Strong 3" are casting a pall over other banks. "The lack of pre-announcements by the remaining banks is puzzling from our perspective," John Aiken, an analyst with Dundee Capital Markets, wrote in a note.

"However, we cannot believe that arguably three strongest banks operationally incurred significant charges in the fourth quarter while BMO, CIBC and National were unscathed."

Aiken upgraded RBC’s stock rating to "neutral, medium risk" but other analysts were more pessimistic. Robert Sedran of National Bank Financial downgraded RBC to "underperform," citing its "proportionately greater exposure" to capital markets.

Moody’s Investors Service affirmed RBC’s ratings, but changed its outlook to "negative," due to the "potential for further charges."

RBC lost about $1 billion on various securities during the fourth quarter. That was partly offset by a $330 million gain on the change in fair value of its liabilities and a $540 million reduction of its litigation provision related to Enron Corp. Moody’s noted the $1 billion in new losses "come in addition to $1.8 billion incurred up to the third quarter of 2008."

Analysts are also concerned about deteriorating credit quality in RBC’s operations in the United States.

Overall, RBC expects its fourth-quarter provision for credit losses to be about $620 million, nearly double the $334 million taken in the third quarter, partly because of "deterioration in U.S. portfolios" and a weaker loonie.

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Oil prices slipped further Wednesday, dipping below $54 on fears of global economic weakness that have sent crude down more than 60% in four months.

But analysts suggested that prices might be bottoming out as they moved closer to the psychologically significant $50 mark.

Light, sweet crude for December delivery was down 60 cents at $53.79 a barrel by noon in Europe. The contract Tuesday fell 56 cents to settle at $54.39, the lowest since January 2007.

"Market sentiment is still bearish, but not as bearish as a week ago," said Clarence Chu, a trader with market maker Hudson Capital Energy in Singapore. "Volatility has come down and the market is consolidating a bit."

Stock markets have served for the past few months as a barometer of investor perceptions about the health of the global economy. The Dow Jones industrial average rose 1.8% Tuesday as Hewlett-Packard Co. said fourth quarter and 2009 results will exceed analyst expectations.

Most Asian stocks, however, fell Wednesday. Japan’s benchmark Nikkei index fell 0.7%, Hong Kong’s Hang Seng index dropped 0.5% and the Korea Composite Stock Price Index slid 1.9%. European markets also opened lower.

Oil investors have already priced in a recession in developed countries and only evidence of an especially severe or prolonged slowdown may push prices down further, Chu said.

Prices have fallen 63% since reaching a record $147.27 a barrel in mid-July.

"I don’t see oil falling below $50," Chu said. "It should be above $60 in a couple weeks."

Investors will be watching for signs of slowing U.S. demand in the weekly oil inventories report to be released Wednesday by the U.S. Energy Department’s Energy Information Administration cash in 1 hour.

The report is expected to show that oil stocks rose 1.2 million barrels last week, according to the average of estimates in a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

The Platts survey also projects that gasoline inventories rose 700,000 million barrels and distillates increased 900,000 barrels last week.

Trader and analyst Stephen Schork noted that past report patterns reflected supply outstripping demand.

"Over the last six reports stocks have bounced back by 7 1/2 percent," he wrote in his Schork Report. "Meanwhile, year-on-year demand for total oil products fell for the 41st week (out of 45) this year, i.e. 10 out of every 11 weeks."

The Organization of Petroleum Exporting Countries is holding an informal meeting later this month ahead of an official meeting next month. OPEC President Chakib Khelil has signaled the group may announce production cuts at the December meeting, but some members, such as Iran, have called for earlier cuts.

"Expect crude to nudge near $50 with moves below sure to inspire strong statements and calls for an early meeting by the hawkish OPEC members," brokerage Kim Eng said in a report.

In other Nymex trading, gasoline futures were slipped more than 2 cents to $1.12 a gallon. Heating oil was down less then a penny at $1.75, a gallon while natural gas for December delivery fell by more than a cent to $6.51 per 1,000 cubic feet.

In London, December Brent crude fell 36 cents to $51.48 on the ICE Futures exchange. 

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A potential solution to Air Canada’s cash woes could lie in its former frequent flier program Aeroplan.

Rupert Duchesne, the loyalty program’s chief executive, said yesterday he isn’t ruling out the possibility of a deal with Air Canada that could see it buy additional reward seats in order to help inject some liquidity into the airline.

"We’re a significant partner of theirs and, if asked, I’m sure that we would look at any and all options," Duchesne told analysts during a conference call to discuss an 8.4 per cent increase in Aeroplan’s third-quarter earnings.

The loyalty program also announced that it would "simplify" its fee structure by raising the cost of rebooking reward flights by 64 per cent to $90 from $55 previously and lowering the fee charged for cancelled flights by 33 per cent to $90 from $135.

Unlike Air Canada, Aeroplan is comparatively flush with cash. It currently has about $627 million worth of cash and short-term investments, including $400 million that’s held in reserve to fund redemptions of members’ Aeroplan Miles.

As it heads into a seasonally weak period, analysts have been concerned the country’s largest airline could run low on money if Canadians curtail their flying in the face of an economic slump. As well, the airline is facing increased pension costs because of the market downturn and payments related to fuel hedges that are "out-of-the-money" because of the recent slide in oil prices credit score.

While the airline might normally be expected to borrow money to get it through a tough period, the credit crunch has effectively frozen traditional sources of lending and left executives scrambling for alternatives.

Air Canada has already inked an agreement with its former maintenance arm, part of which was sold off by parent ACE Aviation Holdings Inc., and executives are talking about selling and leasing back aircraft.

Duchesne described the loyalty program’s business as recession-resistant because its partner companies tend to use points as incentives to boost sales during slower periods while consumers become increasingly focused on bargain hunting.

Aeroplan said third-quarter income rose to $34.9 million, or 18 cents a share, from $32 million, or 16 cents, in the year-earlier period. Total revenue, meanwhile, rose to $334.9 million compared to $219.2 million a year-earlier, while the costs associated with redemptions increased 50 per cent to $191 million.

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U.S. Secretary Henry Paulson plans to use the second half of the $700 billion financial rescue program to help relieve pressures on consumer credit, scrapping an effort to buy devalued mortgage assets.

“Illiquidity in this sector is raising the cost and reducing the availability of car loans, student loans and credit cards,'' Paulson said today in a speech at the Treasury in Washington. “This is creating a heavy burden on the American people and reducing the number of jobs in our economy.''

Treasury and Federal Reserve officials are exploring a new “facility'' to bolster the market for securities backed by assets, Paulson said. Officials are considering using a portion of the bailout money to “encourage private investors to come back to this troubled market,'' he said.

The Treasury chief said the department is also considering having companies that accept new taxpayer funding get matching private capital.

Buying “illiquid'' mortgage-related assets — the reason the Troubled Asset Relief Program was established a month ago — is no longer being considered, he said.

“Our assessment at this time is that this is not the most effective way to use TARP funds, but we will continue to examine whether targeted forms of asset purchase can play a useful role,'' he said.

Paulson has committed all but $60 billion of the initial $350 billion allocated by Congress to take equity stakes in banks and in insurer American International Group Inc short term cash loans. Lawmakers, who could reject Treasury requests for the remaining $350 billion, are pushing for aid to automakers including General Motors Corp. Paulson is resisting.

With less than three months left in the Bush administration, demands for assistance from foundering companies will likely escalate. The Treasury two days ago took a $40 billion stake in AIG. American Express Co. this week converted into a bank-holding company, making it eligible for funds.

Democrat Barack Obama assumes the U.S. presidency on Jan. 20. Obama last week said his economic team will “review the implementation'' of the rescue plan, suggesting he may have different priorities for its use.

In his remarks today, Paulson said that the Bush administration “has taken the necessary steps to prevent a broad systemic event.''

Still, the secretary said that conditions remain “fragile'' and that the stability of the financial system continues to be his highest priority.

Paulson also said that the Treasury will continue to look for strategies to help homeowners avoid foreclosure.

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For 42,000 Ontario government employees who started contract talks last week, negotiations likely couldn’t have come at a worse time.

The global financial crisis that has laid waste to stock markets and brought banking giants to their knees also is hitting government coffers.

In an economic update last month, Ontario Finance Minister Dwight Duncan projected a $500 million deficit for the current fiscal year, after several years of balanced budgets, forcing the province to delay or slow down some new spending.

"It’s hard to say where it’s going to go," said Smokey Thomas, president of the Ontario Public Service Employees Union, or OPSEU. "Who would have figured the world would go egg-shaped the way it did?"

Not surprisingly, the economic downturn is expected to dampen union wage increases. Late last month, the Conference Board of Canada said average wage increases for unionized employees in 2009 would be 3.2 per cent – 3.5 per cent in the public sector and 3.1 per cent in the private sector – down from an average of 3.5 per cent this year. But the survey was taken between June and August, before the full impact of the financial crisis became clear.

However the numbers play out, one thing is virtually certain: unions trying to bargain new contracts over the coming months will face a difficult slog as they negotiate with employers struggling to come to grips with new economic realities. Some, like the 3,350 York University contract faculty and teaching assistants who set up picket lines Thursday after rejecting an offer that would have given them a 9.25 per cent raise over three years, are still willing to take their chances.

The economic downturn could have a significant impact on bargaining, depending on geographic region and sector, said Prem Benimadhu, vice-president of governance and human resources management at the Conference Board.

In the private sector, he said, manufacturing unions "have lost all bargaining clout because of the recession in the United States and because of globalization," he said.

On the other hand, he added, wage increases in the oil patch will remain healthy because, while some companies are postponing investments, there is still a lot of activity Faxless pay advance.

The government’s deteriorating fiscal picture will also lead to bargaining pressures.

Ontario, for example, "is going through some significant financial difficulties, and that definitely will have an impact on wage settlements in the public sector there because the money is simply not there unless the taxpayers want to cough up additional taxes," Benimadhu said.

Ontario is still trying to reach deals with some of its teachers after their contract expired Aug. 31.

English public high school and elementary teachers are not at the provincial table, despite a Nov. 30 deadline set by Queen’s Park to agree to the province’s offer – or accept a 2 per cent increase in each of the next two years. Both holdout unions say their decision has to do with factors beyond wages.

The province is standing firm. "We’ve put forward a package that has good provisions, especially given our economy, and we would seriously hope they would take a look at that and come back to the table … knowing the provincial coffers aren’t what they were, even a year ago," said Michelle Despault, a spokesperson for Education Minister Kathleen Wynne.

Robert Hickey, an assistant professor of industrial relations at Queen’s University, says his impression "is that the public sector tends to react more slowly to changes in the economy than the private sector." That’s partly because governments have the option of going into deficit, a choice that is less viable for private-sector companies.

"Many observers have commented to me … saying unions that have 3 per cent on the table should take the money and run," Hickey said. "Now, whether or not that’s accurate strategic advice, I don’t know, but certainly it’s indisputable that the bargaining environment will be changed for some time due to the current economic conditions. I’ll be surprised if some of the recession effects don’t get worse before they get better."

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Two of Canada's well-known independent brokerages cut payments to investors and reported poor financial results Thursday, as they continue to be pummelled by turmoil in global capital markets.

Vancouver-based Canaccord Capital Inc. (TSX: CCI), Canada's largest independent brokerage, suspended its dividend to shareholders while reporting a summer-quarter net loss of $5.4 million, down from year-ago earnings of $15.3 million.

Meanwhile, second-ranked GMP Capital Trust (TSX: GMP.UN) of Toronto announced it's cutting distributions by more than half, eliminating 37 employees and trimming senior executive salaries by 10 per cent.

The moves at GMP come after a 43 per cent slide in third-quarter revenue from a year ago.

Canaccord, which disclosed a week ago that it is laying off 170 people, or 10 per cent of its workforce, and is cutting senior executive base salaries by 10 to 20 per cent, said Thursday that revenue was $110.8 million in its second quarter ended Sept. 30.

That was down 30 per cent from $158.9 million a year earlier.

The latest quarter's loss was 11 cents per share, down from earnings of 26 cents per share in the year-ago period.

Analysts had expected a per-share profit of 12 cents.

"With the credit markets effectively shut down and volatility reaching unprecedented levels, most investors stayed on the sidelines, waiting for a more rational order to reassert itself," Canaccord stated in its earnings release.

"It is likely that the challenges the financial services industry faces are far from resolved and may continue for another 12 to 24 months. Preserving Canaccord's capital base during what could be a prolonged downturn must be our primary concern."

At GMP, the monthly distribution is being cut to five cents a unit, from 10.42 cents after a huge drop in profits.

Net income fell by 82 per cent to $6.9 million as revenue slumped to $74.8 million, "reflecting the challenging business environment currently facing all financial services participants," GMP stated cash advance usa.

"During third quarter 2008, the markets experienced extraordinary volatility resulting in the most difficult market conditions we have ever seen, particularly during the month of September," said GMP chief executive Kevin Sullivan.

"However, unlike most of our North American peer group, we continued to generate positive quarterly earnings during this period."

Canaccord and GMP have both been hurt by the plunge in stock prices, which has made it more difficult for small to mid-sized oil and gas, mining and technology companies to issue shares to raise capital.

Brokers and investment dealers are finding it harder to generate fees from arranging mergers or stock issues and are trading far less volume of shares on the stock market for their investment clients.

At GMP, Sullivan said the company's streamlining efforts, "along with our variable compensation model, will allow us to better withstand the current business environment."

"We believe our businesses remain fundamentally strong and we have taken prudent steps to position them well for when the markets ultimately improve."

Canaccord meanwhile, said it expects to post restructuring charges of about $14.3 million or 22 cents a share in the third quarter linked to its streamlining efforts and other moves.

In Thursday trading on the Toronto Stock Exchange, Canaccord shares fell 45 cents to $5.90, a drop of more than seven per cent.

GMP, meanwhile, rose 12 cents to $5.04, a gain of 2.4 per cent.

GMP Capital Trust, with about 250 current employees, carries on business through GMP Securities L.P., Griffiths McBurney Corp. and other units in Canada, the United States and Europe.

Canaccord, with about 1,600 employees, is a full services investment dealer with private client services and capital markets operations.

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Editor’s note: Read more beer coverage at our new "Lager Heads" blog at http://www.stltoday.com/blogzone/lager-heads/

InBev of Belgium will dramatically shake up the top ranks of St. Louis-based Anheuser-Busch Cos. when it takes over the biggest U.S. brewer. InBev announced a slate of executives who will lead InBev’s North American zone when the $52 billion takeover closes, expected later this year.

Eight top executives at Anheuser-Busch will leave the company when the St. Louis-based brewer is bought by InBev of Belgium, the Post-Dispatch has learned.

The executives include: W. Randolph Baker, chief financial officer; Tom Santel, president and chief executive of Anheuser-Busch’s international division; Doug Muhleman, group vice president of brewing operations and technology; Keith Kasen, head of A-B’s theme park division; Joe Castellano chief information officer; Mike Owens, vice president of business operations for A-B’s domestic brewing unit; Mike Harding, chief executive and president of A-B’s packaging group; and Tim Farrell, vice president of corporate human resources.
According to a document obtained by the Post-Dispatch, InBev named members of the future management team for North America, reporting to Luiz Fernando Edmond. The team will have a mix of Anheuser-Busch and InBev veterans to lead the North American zone. InBev reiterated that the two companies will operate separately until closing.

Here is the team:

Peter J. Kraemer will be vice president of supply. He will lead all brewery operations, quality assurance, raw materials, logistics and product innovation responsibilities. Kraemer is a 19-year employee of Anheuser-Busch and is currently vice president of operations for all of A-B’s breweries. A fifth-generation brewmaster and a native of St. Louis, Kraemer was once resident brewmaster of the St. Louis brewery.

Thomas J. Adamitis will be vice president of procurement, retaining a job he holds at Anheuser-Busch. He will oversee purchasing strategies and activities, including energy, packaging, raw materials and capital expenditures. Adamitis is a 16-year veteran of Anheuser-Busch. A native of Granite City, Ill. Adamitis joined A-B in 1992 as a management trainee.

Kirk Norris will lead the Anheuser-Busch packaging group subsidiaries, including Metal Container Corp., Longhorn Glass Corp., Anheuser-Busch Recycling Corp. and Eagle Packaging Inc. A 24-year A-B veteran, Norris is currently group vice president of operations for the subsidiaries and has been with the packaging group in leadership roles since 2004 everyone approved 1 hour payday loans. He has worked at A-B’s breweries in Houston and Newark, N.J. and also worked in international brewing, helping the Wuhan brewery start-up in China.

David Almeida will be vice president of finance, responsible for all budgeting, business performance, risk and control and tax matters. A native of Brazil, Almeida joined InBev in 1998 after working at Salomon Brothers in New York. He is one of InBev’s M&A whiz kids. In 2001, he became head of mergers and acquisitions at AmBev, a Brazilian brewer that is now part of InBev. He moved to Belgium in 2004 to help with the creation of InBev. He has worked as InBev’s vice president of finance for the Asia-Pacific Zone and, most recently, Vice President External Growth.

Odilon Queiroz will be vice president of information and business services. He is currently vice president of finance for the North American zone.

James G. Brickey will be vice president of people, leading the team responsible for compensation, benefits, talent management, risk management, diversity, security, building services, corporate events and food services. Now, Brickey is responsible for Anheuser-Busch’s human resource for corporate and U.S. beer subsidiary personnel, and manages all compensation and benefit programs companywide. Brickey joined A-B in

1989 as a compensation analyst. He is a native of St. Louis.

Gary L. Rutledge will be vice president and zone general counsel, keeping a job he holds now at Anheuser-Busch. He will be responsible for corporate, commercial and labor law, intellectual property, litigation, and labor relations. Rutledge joined Anheuser-Busch in 1997, leaving the Armstrong Teasdale law firm in St. Louis, where he was a partner specializing in litigation. He is a native of St. Louis

James Villeneuve will be vice president of corporate affairs, and will lead the team responsible for government and regulatory affairs, external communications, public relations, corporate social responsibility and foundation and donation management. Villeneuve is currently InBev’s vice president of global corporate affairs. He is a Canadian citizen.

Jim Atchison will continue leading the Busch Entertainment Corp. theme-park subsidiary, which runs SeaWorld and Busch Gardens. Atchison has been running the group’s operations for a year. He is a native of Jersey City, N.J.

jmcwilliams@post-dispatch.com | 314-340-8372

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WASHINGTON–To the victor goes the mess.

Barack Obama's presidential election victory comes with an albatross of a prize – an economy beset by a stubborn housing slump and the worst financial crisis in 70 years.

Consumers and businesses are sharply reducing their spending and the government is awash in red ink.

"He will inherit an economy that is in recession and … is likely to get worse before it gets better," said Stuart Hoffman, chief economist for PNC Financial Services.

The government said Wednesday it will sell $55 billion in bonds next week as part of a massive borrowing to pay for its financial rescue programs. Borrowing is expected to reach a record $550 billion in the final three months of the year.

The Treasury Department said it is bringing back its three-year notes, selling them monthly to help cover the increased borrowing needs, and will auction $25 billion of them on Monday. The government also will offer $20 billion in 10-year notes next Wednesday, and $10 billion in 29 3/4-year bonds on Thursday.

Officials project the government will need to borrow an additional $368 billion in the first quarter of 2009.

Stocks were down in early trading Wednesday as investors, focused on the economy rather than the election, cashed in some of their gains from Tuesday's rally that sent the Dow Jones industrials up more than 300 points. The Dow was down about 160 points in morning trading, and broader market indexes also were down about 2 per cent.

Asian stocks rallied Wednesday as investors there were hopeful Obama would tackle the U.S. financial crisis with renewed vigor, although some voiced concerns that a Democratic president and Congress might turn more protectionist. Japan's Nikkei 225 stock average climbed 4.5 per cent, while Hong Kong's Hang Seng index rose 3.2 per cent.

Earlier Tuesday, the another poor report on the state of the U.S. economy was released. The Commerce Department reported factory orders dropped 2.5 per cent in September from August, more than three times as much as analysts had expected. Excluding autos and aircraft, orders fell 3.7 per cent, the steepest drop since 1992, when the department began tracking sector-specific changes.

The weakness was led by a heavy drop in nondurable goods orders, which fell 5.5 per cent. That included a 17 per cent drop in the value of petroleum and coal products, reflecting the decline in oil and gas prices in September.

Analysts said the report wasn't as bad as it looked, because much of the decline was driven by the drop in the value of oil and gas orders low fee pay day loans.

But orders for non-defense capital goods excluding aircraft, considered a good indication of business investment plans, fell 1.5 per cent. That follows a 2.3 per cent drop in August and indicated companies are cutting back on their investments.

"Corporate America is buying into the recession story, and they are paring their investment spending accordingly," said Ken Mayland, president of ClearView Economics.

The Institute of Supply Management on Wednesday will release its gauge of activity in the U.S. services sector for October. That index is expected to fall, though not as steeply as its sister manufacturing index did Monday, when it dropped to its lowest level since the country's last deep recession, the 1981-82 downturn.

Automakers also reported terrible October sales figures on Monday, with sales down 45 per cent at General Motors Corp., 30 per cent at Ford Motor Co., 25 per cent at Honda Motor Co. and 23 per cent at Toyota Motor Corp.

The government reported last week that the overall economy, as measured by the gross domestic product, shrank at an annual rate of 0.3 per cent in the July-September quarter. Two straight quarters of lower GDP generally mean a recession, and many economists expect the fourth quarter to be worse than the third.

The nonpartisan Committee for a Responsible Budget estimates all the government economic and rescue initiatives, starting with the $168 billion in stimulus checks issued earlier this year, total an eye-popping $2.6 trillion.

Besides the borrowing numbers, Treasury on Monday released estimates by major Wall Street bond firms projecting that total borrowing for this budget year, which began Oct. 1, will total $1.4 trillion, nearly double the previous record.

Major Wall Street firms projected the deficit will hit $988 billion for the current budget year, more than twice the record. In July, the administration projected a deficit for this year of $482 billion, but that was before the financial crisis erupted in September.

Supporters of the government rescue packages argue that the ultimate cost to taxpayers should end up being a lot smaller, partly because the Federal Reserve is extending loans to banks that should be paid back.

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CLAYTON — The developers of a proposed $568 million mixed-use project that would include a new Brown Shoe Co. global headquarters said Monday they are scaling back the project.

Bob Clark, chairman and CEO of Clayco and one of the co-developers, informed city officials that the Clayton School District appeared no longer to want school property included in the project. The developers have been negotiating to build on district-owned property adjacent to the Brown Shoe property along Maryland Avenue.

USECH — a joint venture of Clayco, U.S. Equities and Hutkin Properties Group — is developing the retail, commercial, office and residential project.

Chris Tennill, spokesman for the Clayton School District, said Monday night that district officials had expressed some concerns but were surprised by the announcement. He said the district officials had signed a confidentiality agreement with the developers not to discuss details of the negotiations.

"We really support the project and the impact it will have on the Clayton community and the jobs it will bring to the area," Tennill said bad credit cash loan. "We always felt there was a way to collaborate."

The developers made their announcement 1

Six U.S. governors and a group of chief executives on Thursday urged the Bush administration in a letter to aid the embattled auto industry while the White House rebuffed a request for direct support of a merger between GM and Chrysler.

An administration official said the focus instead would be on speeding of $25 billion of low-interest loans for factory retooling, a step the industry’s allies say does not go far enough to reverse a deepening industry crisis.

Meanwhile, auto parts makers worried that a merger would eliminate vehicles that they supply, and a prominent industry consultant said GM could up to 40,000 Chrysler jobs and 16 of its 26 models.

GM and Chrysler-owner Cerberus Capital Managementhave been in talks for weeks over a merger that would combine struggling automakers hit by a sales downturn that started in the United States and has spread globally.

GM had been lobbying for up to $10 billion in government support in advance of a merger that analysts have said would likely result in thousands of job cuts across the white-collar and blue-collar work forces with plant closings.

GM, Chrysler and Ford Motor Co — the potential odd-man out if GM and Chrysler get together — have focused on maintaining cash to withstand the sales downturn and U.S. market share losses.

U.S. auto sales have fallen 13 percent through September and automakers expect to report October monthly auto sales on Monday that reflect the continued downturn.

All three automakers face increased scrutiny from creditors and investors over whether they have the financial strength to ride out the slump, which is now seen continuing through 2009 creditreport.

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The governors of Michigan, New York, Ohio, Kentucky, Delaware and South Dakota sought an immediate response to an auto industry crisis that puts at risk “the financial well-being of other major industries and millions of American citizens.

“The auto industry; their network of suppliers, vendors, dealers and other businesses and the communities that rely on those businesses face unimaginable challenges — challenges we urge you to address,” the letter said.

Michigan Gov. Jennifer Granholm, told reporters that quick loans were needed for the industry to get through the next six to 12 months.

“The bottom line is that all three automakers need some liquidity, some assistance with cash and they need it right now,” Granholm said.

“The alternative is worse,” Granholm said. “The alternative is the industry doesn’t have access to funds and we lose a company or two. We don’t want to do that.”

The Business Roundtable, a group of chief executives of some of the largest companies in the United States, supported Treasury providing direct capital injections to automakers and their finance companies. 

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