Chinese Premier Wen Jiabao said the government will focus more on bolstering economic growth, indicating policies may be loosened further as inflation moderates.
Avon shares are plunging in premarket trading after Coty dropped its $10.7 billion takeover bid for the cosmetics company.
Coty Inc., a privately held rival, had raised its original offer last week by about 6.5 percent, but set a deadline of Monday for the New York company to accept the bid.
Avon asked for more time to consider the bid over the weekend, but it appears that Coty is having none of it. It slammed that door shut on the troubled company Monday and investors are following suite even before the markets open Tuesday in some heavy trading.
If the current prices hold, Avon shares will be worth less than when Coty made its original offer back in April.
Shares are down 14 percent to $18 in premarket trading.
Biotech firm Human Genome Sciences announced Thursday that it had rejected a takeover bid from pharmaceutical giant GlaxoSmithKline that valued it at just over 80% of its closing price Wednesday.
HGS () said the offer — at $13 per share, or $2.6 billion — "does not reflect the value inherent" in the company. It added, however, that it was reviewing "strategic alternatives" including the possible sale of the company, and that Glaxo () had been invited to participate in the process.
HGS shares jumped on the news, opening at $14.21, nearly double Wednesday’s closing price of $7.17.
Glaxo CEO Andrew Witty said in a statement that his firm was "disappointed that Human Genome Sciences has rejected our offer without discussion and are confident that our offer is in the best interest of shareholders of both companies."
Hostile takeovers are back
The two firms, Witty noted, have collaborated for nearly 20 years, including on the lupus drug Benlysta, a joint venture.
HGS shares traded around $30 just a year ago, but have dropped sharply since then as the company has reported heavy losses. In February, HGS reported a net loss for 2011 of $381 million.
The announcement comes a day after Swiss pharmaceutical company Roche () announced that it was abandoning its bid for U.S. biotech firm Illumina ().
HGS has attracted controversy in the past with its attempts to patent genetic sequences, which have raised questions about whether such information can be subject to intellectual property laws.
Treasury Secretary Timothy Geithner said on Wednesday that fallout from the European debt crisis along with fears of Iran and higher oil prices posed the biggest threats to the U.S. economy.
“Europe is still facing a very difficult, very challenging period. They are likely to have weak growth,” Geithner said in an interview with Fox Business TV.
“You have, obviously, the fear of Iran and oil prices, even though that is not hurting the economy today, people can still feel that in their pocketbook today,” he said.
In the city of St. Louis, there is no bigger land-owner than the city of St. Louis.
Over the past four decades, the city has accumulated more than 11,000 parcels of real estate that no one else wants, long-empty houses and thousands of vacant lots, big downtown buildings and even a 30-acre cemetery. It sells some parcels every month and accumulates more after five annual tax sales. But most of the land just sits, waiting.
Last week’s deal to sell more than 1,200 parcels on the near north side to developer Paul McKee highlights the potential for this “land-banking.” McKee, who already owns 800 parcels in the area, will be able to market more and larger sites to potential tenants for his massive NorthSide Regeneration project under the deal. It’s progress, says the city.
But as land banks bloom from New York to Nebraska, St. Louis’ experience illustrates two simple facts: That this practice is no panacea for blight and that any real progress requires lots of patience.
St. Louis has been banking land since 1971. Residents and businesses were fleeing for the suburbs, leaving behind crumbling buildings with unpaid taxes. The city wanted a central repository to hold that property, clear the title, maintain it, and sell it to someone to redevelop. The Land Reutilization Authority — the nation’s first city-run land bank — was born.
LRA started taking properties that went unsold at St. Louis sheriff’s office tax sales, and its inventory quickly ballooned into the thousands. Despite a constant churn of sales, inventory has stayed high ever since. Today, the LRA and two smaller land banks own 11,136 parcels, more than two square miles of ground; they’ll still own 9,900 after the NorthSide sale closes. Mowing and maintaining all this costs $2.7 million a year.
The authority has some success stories, such as the old City Hospital — now high-end condos — and large-scale rebuilding in the Gate District and Gaslight Square. But it still has vast holdings, especially in battered sections of north St. Louis, neighborhoods such as The Ville, Hyde Park and Wells Goodfellow, where as much as one-fifth of all real estate is owned by LRA. Much of the land is vacant lots, but there are also plenty of empty buildings, with crumbling roofs, patchy walls and the LRA’s trademark dark red boards over the doors.
The trouble, said Otis Williams, who oversees the authority for St. Louis Development Corp., is that there just isn’t much interest in these properties, even at a price tag of just a few thousand dollars.
“The goal is to get each of them back on the tax rolls,” Williams said. “The problem we have is the market. There’s a real lack of demand.”
But some say the LRA holds on to too much property for too long.
Every month, at a meeting in a downtown office building, the LRA considers offers. Typically it receives dozens. Some are from people who want to buy the plot next to their house for a sideyard. Some come from rehabbers who want to turn a shell into apartments, or people looking for an affordable way to purchase a home.
In a report last year, free-market thinktank the Show-Me Institute combed through eight years of LRA records, and found that the agency rejected more than 40 percent of purchase offers, often saying the land was being held for “future development.” In some cases, LRA turned down offers for the same property several times.
That seems to run counter to the goal of putting property back on the tax rolls and getting it redeveloped, said Audrey Spalding, the Show-Me policy analyst who led the study.
“When you turn down an offer to purchase property today in the hopes of a future, better development tomorrow, you are turning down a certain offer, and property tax revenue, in the hopes that a future offer will materialize,” Spalding said. “In this economy, such a bet is ill-advised.”
Williams said the LRA weighs a number of factors, including the potential for future development and whether the buyer’s plan for the site fits the city’s plan for the area no fax pay day loan. But, he said, a major reason why sales get turned down is because the buyer doesn’t have the resources to redevelop the property.
“We’re not going to sell to just anybody,” he said. “They’ve got to be able to do something with it.
If not, he said, it’s quite possible that the land will just wind up back with LRA a few years down the road, maybe in worse shape than it is now. The LRA has changed policies in one regard, though. Williams said it has tried to sell more land as side yards, and to neighborhood groups that want to create community gardens and parks.
‘BANKING’ TREND
In the meantime, new land banks — often with more powers than the LRA — are sprouting up across the country.
Michigan now has 41 land banks, and Ohio has expanded its land-banking programs. New York is readying to launch them in five cities this year, proposals are before state lawmakers now in Pennsylvania, Georgia and Nebraska, and Kansas City officials are asking the Missouri General Assembly to create one there.
“More states are really recognizing that vacant and abandoned properties impose tremendous costs on their cities and their neighborhoods,” said Frank Alexander, a law professor at Emory University in Atlanta who works on land bank legislation. “(Land banks) can step in where there’s no market.”
Most of these new banks would be more powerful than the LRA, with access to more funds to rehab or demolish buildings and clean up sites for reuse. New York law gives land banks the right to all land that is seized for unpaid property taxes, not just the sites left over after investors have picked over sheriff auctions — which is how St. Louis’ LRA accumulates most of its land.
That’s huge, said Dan Kildee, who developed the land bank in Genesee County, Mich. — home of Flint — because it means land banks get some good properties to work with, too.
“The land bank gets to be the smartest and luckiest speculator,” Kildee said. Then they can market the properties or partner with nonprofit groups or developers to rebuild them. And more sales means more money for demolition of properties that can’t be rebuilt.
Funding demolition has been a challenge in St. Louis. It costs about $8,000 for LRA to knock down a structure, and it owns roughly 2,000. In recent years, the agency has demolished 200 to 240 buildings a year, though that number plunged to 142 in 2010 because of budget cuts. Other cities — most notably Detroit — have used federal money designed for foreclosure relief to knock down thousands of houses. St. Louis used most of that money on rehab work. The LRA does, though, plan to spend much of the $3.2 million its getting from McKee on much-needed demolition.
Take the 3300 block of Blair Avenue in Hyde Park, where the shells of three LRA-owned brick four-families sit crumbling in a row, their roofs gone and brick walls caving in. Across the street, another LRA house, this one of blue shingles, sits empty, its roof rotting. On a recent afternoon, a boy played in a fort built of mattresses in the yard. Otherwise the street was dead.
Just a few blocks away, construction crews are working, rehabbing 27 buildings scattered across several blocks in a project called Hyde Park South. When they’re done, there will be 50 affordable apartments.
Most of the buildings were bought from the LRA, said Michele Duffe, a development consultant who is working on the project, and the former LRA director herself. Duffe’s firm and the development arm of nearby Bethlehem Lutheran Church have built 206 units of housing in the neighborhood, with 40 more in the pipeline.
Buying all those parcels from individual owners, instead of a land bank, said Duffe, would have been impossible.
Spain’s three top banks said Tuesday they will set aside an additional euro6.1 billion ($8 billion) to meet a new government demand for all banks to boost their buffers against troubled real estate assets.
Banco Santander, Europe’s biggest bank by market capitalization, said it would make allowance for an extra euro2.3 billion ($3 billion) buffer to meet the government requirement. It said the amount will be partially covered through anticipated capital gains, including euro900 million ($1.2 billion) from the sale of Banco Santander Colombia.
Banco Santander SA said in a statement the new reserve comes on top of euro1.8 billion ($2.4 billion) charged against the bank’s 2011 financial results.
Spain last week ordered banks to raise euro50 billion ($65.6 billion) to protect themselves against troubled real estate assets from a domestic construction boom that went bust business cards.
The country’s second bank, Banco Bilbao Vizcaya Argentaria SA, said it would be setting aside euro1.4 billion ($1.8 billion) to boost its cover of toxic assets. BBVA said it would be able to absorb the total sum in 2012 thanks to its strong results.
CaixaBank SA, Spain’s No. 3 bank, will designate euro2.4 billion ($3.2 billion) in additional reserves.
Spanish banks have about euro175 billion ($229.5 billion) in troubled holdings. The bank reform require institutions to increase provisions for troubled assets from 30 percent to up to 80 percent of book value, creating the incentive for them to sell them off.
FRANKLIN COUNTY • The wound left when Chrysler shuttered its plants in 2008 and 2009 hasn’t healed in nearby Franklin County, where residents for years relied on those paychecks.
The county has seen the sharpest rise in poverty in the metro region since the recession, according to recently released census figures. In 2006, a year before the recession officially began, 10.3 percent of residents lived below the poverty level. That figure hit 17 percent in 2010, the most recent statistics available.
When asked why the county was hit so hard, those who work with the poor unanimously cite the Chrysler closure in Fenton and its lingering effects on jobs.
“I think disproportionately we were hit harder than other areas, and that showed in our unemployment rate,” said Presiding County Commissioner John Griesheimer.
Many in the county haven’t found a way to replace good-paying jobs, and the county is about to be dealt another blow with ties to the auto industry.
Harman-Becker Automotive Systems plans to start shutting its plant in Washington, Mo., as soon as this month, leaving nearly 300 people without jobs, said Sandy Lucy, the city’s mayor.
Most of those jobs are in manufacturing. Many workers earn $40,000 to $60,000 a year assembling auto accessories such as car radios and navigation systems. The company supplied parts to the Chrysler plant.
Harman-Becker’s closure was announced more than a year ago but wasn’t supposed to begin until summer. The plant is now expected to be shuttered by spring.
The plant is an example of efforts to create county jobs. The state and city bent over backward to lure Harman-Becker to Washington in 2005, with incentives worth nearly $3 million.
The company has repaid the state almost $540,000 under a “clawback provision,” which allows the state to recover tax money from businesses that fail to meet economic commitments, according to the Missouri Department of Economic Development.
The company did not have to repay nearly $40,000 it received through the Missouri Quality Jobs program because it created and maintained jobs for three years. Harman-Becker did not respond to an email request for comment.
The pending closure worries Sandy Crider, executive director of Loving Hearts Outreach food pantry in Washington. She sees people coming to the pantry who lost jobs in the auto industry that paid $25 or $30 an hour with health benefits and retirement plans, and who have continued to struggle after those jobs disappeared.
“Now they’re working two part-time jobs for minimum wage and no health insurance,” Crider said. “They’re embarrassed because they can’t find jobs to bring them back to the point where they were in the past.”
A 58-year-old freelance Web developer standing in line recently at the Agape House food pantry in St. Clair said the loss of the plants has crippled the county and sent ripples beyond the auto industry. His own workload is down 40 percent from before the recession, said the man, who asked to be identified only by his first name, Bill, so his customers wouldn’t know his financial situation.
“I could see if you’re a bad person, you’re not going to hold a job,” he said. “But I see a lot of good, hardworking people who want a job and there’s nothing for them.”
Crider said more families are becoming homeless and must move in with other family members, also on fixed incomes.
“That’s what the homelessness looks like in Franklin County,” she said.
Ellen Dietrich, director of community relations of the Jefferson Franklin Community Action Corp., has seen the uptick in poverty, too.
Not long ago, a woman who used to donate came into the social service agency’s office. Instead of writing a check, she asked for help.
“People come in and give us résumés and say if we know of anyone hiring, please pass it along,” said Tammy Stowe, executive director of the Union Chamber of Commerce.
Franklin County government relies heavily on sales tax, but collections hit a low of $4.9 million in 2009. Since then, sales tax revenue has been on a slight upswing, said county Auditor Tammy Vemmer.
To help balance the budget the last couple of years, county employees have been required to clean their own offices to save on janitorial services. This year, unelected, full-time county employees will get a $700 boost in pay. They have not seen raises since 2008, Vemmer said.
Griesheimer, the presiding county commissioner, said the county had been able to avoid layoffs, unlike the private sector.
From January 2009 through March 2011, unemployment in Franklin County topped 10 percent for all but two months, and peaked at 13.4 percent in February 2010. The rate dipped to 8.8 percent in November, the most recent data available.
Christie Bean, of Gerald, has searched for a full-time job for more than five years. “I call the temp service every day,” she said.
Bean lost her assembly-line position when the Daisy BB bullet factory shut down in Salem, Mo. She’d like a permanent factory job but knows she can’t be picky.
“People who are getting jobs are holding onto them,” said Bean, 42.
Her husband sells scrap metal and fixes cars, but work has dried up. He has resorted to selling firewood door to door.
“He’s working hard and he’s not getting anywhere,” said Bean. He once had a good factory job, too, she said, but he lost it because of back problems.
Last month, Bean and her sister stopped at the Loving Hearts Outreach food pantry in Washington. Bean packed a basket of pasta, tuna, tomato soup, applesauce and red beans and rice into the back seat of her car and was grateful for it.
Other county residents are slowly digging their way out. Cody Sansom, 27, once made $20 an hour working construction jobs. When the demand for new houses dried up, so did work. He became homeless three years ago and moved to the Agape House shelter three months ago.
He recently landed a job as a cashier and pizza cook at a convenience store, where he earns minimum wage.
“It’s the lowest I’ve ever made,” said Sansom, who will start classes at East Central College in Union next month. “But it’s a job.”
Federal health experts said Thursday that drug labeling for Yaz and other widely-used birth control pills should be updated to emphasize recent data suggesting a higher risk of blood clots with the drugs than older contraceptive pills.
The Food and Drug Administration’s panel of experts voted 21-5 Thursday that labeling on the popular drugs made by Bayer is inadequate and needs more information about the potential risk of blood clots in the legs and lungs.
Yaz, its predecessor Yasmin and related prescriptions use a manmade hormone called drospirenone, which mimics the naturally occurring female hormone progesterone. Approved in 2006, Yaz grew into the best-selling birth control pill in the U.S. by 2008, backed by hundreds of millions of dollars in TV and magazine advertising that emphasized its ability to clear up acne and other hormonal side effects. But prescriptions have fallen more than 80 percent in the last two years amid safety concerns.
Panelists spent more than nine hours discussing often conflicting data on the blood clot risk of drospirenone-containing drugs compared with older medications. While the group disagreed on the quality of the evidence, the overwhelming majority said it should be clearly stated in the label, including the potentially fatal nature of blood clots.
“Clearly the wording is inadequate and incomplete,” said Dr. Richard Bockman of New York’s Hospital for Special Surgery. “Adverse events have to be made graphic so physicians and patients are aware of the consequences.”
In an earlier vote, panelists voted 15-11 that the pills remain a beneficial option for preventing pregnancy. The majority ruling amounts to a vote of confidence for keeping the drugs on the market, though well over a third of panelists voted against the drug’s overall benefit, citing numerous alternatives available.
“I can see no real group of patients that this drug benefited over existing alternatives,” said Mark Woods of New York University School of Medicine. “Without any clear benefit, and given the potentially catastrophic risk, I voted no.”
Two large studies conducted by German drugmaker Bayer have shown no difference in blood clots between patients taking the company’s drugs and patients taking older medications.
But since 2009, five large studies have suggested drospirenone-containing pills carry a slightly higher risk of blood clots than older birth control pills, though events in both groups are very rare. Even a slightly higher risk can be critical because blood clots can trigger heart attacks, strokes and blockages in lungs or blood vessels.
The most recent study by the FDA found women taking Yasmin had a 75 percent higher chance of suffering a blood clot than patients taking a combination of older drugs. The absolute risk of a blood clot is still far less than a fraction of a percent.
FDA scientists noted shortcomings with all the recent studies of Yaz and Yasmin, including missing information about patient weight and smoking status, which can increase the risk of blood clots. While not definitive, panelists said the information should be explained clearly in the labeling for physicians and patients no fax pay day loan.
“I think we can do a much better job than labels I have seen,” said Dr. Valerie Montgomery Rice, of the Morehouse School of Medicine.
Panelists said future studies must take into account patients’ lifestyle, race and family history to accurately capture blood clot risk.
With the slogan, “beyond birth control,” Bayer’s advertisements pitched Yaz to women in their 20s as drug with “lifestyle” benefits over older contraceptives. One advertisements featured young women singing the Twisted Sister anthem, “We’re Not Gonna Take It,” while popping balloons labeled “moodiness,” “bloating” and “acne.”
Within two years of its marketing approval, Yaz had grown into the best-selling birth control pill in the U.S. with peak sales of $781 million in 2009, according to data from IMS Health. But sales plummeted from one million per month to about 200,000 per month after the company added information about studies that found a heightened risk of blood clots. Additionally, Bayer was forced to run corrective advertisements after the FDA said the company’s marketing campaign overstated Yaz’s effectiveness in treating premenstrual mood disorders, and used distracting music and visuals to downplay the drug’s side effects.
Earlier in the day, panelists heard more than a half-dozen patients or their family members who blame Yaz or Yasmin for sometimes deadly blood clots.
Cindy Rippee spoke about her last conversation with her 20-year-old daughter Elizabeth Rippee, who died Christmas Eve 2008 when a blood clot traveled to her lung. Rippee said her daughter had been taking Yasmin for about two months, after taking another birth control pill, Tri-Sprintec, for a year previously.
“My daughter was a very smart young woman. If Elizabeth had been clearly told that Yasmin had more risk, maybe twice as much risk, as other pills she never would have switched to Yasmin and would be here today,” said Rippee, of Escondido, Calif.
Rippee is among 4,000 to 6,000 plaintiffs suing Bayer in personal injury lawsuits pending throughout the U.S. court system.
Yaz and other drospirenone-containing pills accounted for 16 percent of the hormonal contraceptives used in the U.S. last year, behind Warner Chilcott’s Loestren, Johnson & Johnson’s Ortho Tri-Cyclen and several other oral contraceptives.
The FDA has not set a timetable for any changes in Yaz’s labeling. For now, many doctors say they don’t expect to stop prescribing the drugs anytime soon. They point out that the risk of blood clots with any birth control pill is still far lower than that associated with pregnancy and birth, when surging hormone levels and reduced blood flow dramatically increase the chances of clotting.
Studies suggest that 10 in 10,000 women taking the newer birth control pills will experience a blood clot, compared with 20 in 10,000 women who are pregnant or have just given birth.
Clayton-based Brown Shoe Co. said today that it will close a distribution center in Sun Prairie, Wis. next year to reduce excess capacity in its network as part of its ongoing portfolio realignment.
The facility will be closed in phases with the process beginning in January and ending in April, the company said.
“This decision was based on the result of changes in our industry and our continued portfolio realignment efforts, which are focused on shifting resources to our strategic consumer platforms,” Mike Kauffman, the company’s senior vice president of global supply chain management, said in a statement.
Brown Shoe chief executive Diane Sullivan launched a portfolio review when she took over the company earlier this year. As part of that process, the company also recently sold the basketball brand AND 1.
From Europe to the Bank of Canada to Bay Street, investors can expect a week of announcements and forecasts that could provide a clearer picture of where the economy is headed.
Bank of Canada: On Tuesday, the central bank will give its latest decision on interest rates. Governor Mark Carney is expected to leave rates unchanged for the ninth consecutive time. But the statement that accompanies the decision will be closely scrutinized for discussion of where the world economy is headed, as well as inflation in Canada.
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