Global finance blog - news, jokes, life…

The McClatchy Co. is expected to announce a deal for its Real Cities Network early Thursday, ending months of rumors about the newspaper publisher selling the once-popular online network, according to a media report.

Chicago-based Centro, an online media buying company that connects media agencies and newspapers, will likely announce the purchase Thursday. Financial terms were not disclosed.

McClatchy executives confirmed discussions – and being close to a deal – several weeks ago, but said negotiations stalled. Company officials were not available for comment late Wednesday.

The Sacramento-based company – publisher of The Sacramento Bee, Miami Herald and 28 other daily newspapers – acquired Real Cities as part of its Knight Ridder Inc. purchase in June 2006. Knight Ridder, formerly the nation’s second-largest newspaper chain, created the Real Cities Network several years ago and reports 44 million monthly unique visitors per month, according to PaidContent.org, which first issued the report late Wednesday.

Cash-strapped McClatchy continues to cut costs – recently detailing the elimination of 10 percent of its work force – and looks to increase revenue.

Shares of McClatchy (NYSE: MNI) inched up 1 cent to $3.90 in trading Wednesday, much lower than its one-year peak of $24.05.

The U.S. Department of Labor has awarded the West Kentucky Workforce Investment Board a $250,000 regional innovation grant to establish plans for promoting economic growth for an area consisting of nine counties in Western Kentucky and one in Tennessee.

The grant will be implemented by the West Kentucky Workforce Investment Board’s Leadership, Education and Economic Development team, which includes representatives from 27 Kentucky and Tennessee organizations.

The organization is focused on the growth of the region’s energy, advanced manufacturing and health care sectors.

The project encompasses the Kentucky counties of Caldwell, Christian, Crittenden, Hopkins, Livingston, Lyon, Muhlenberg, Todd and Trigg, plus the Tennessee county of Montgomery.

Saudi Arabian inflation accelerated to a record 10.6 percent in June from 10.4 percent in May, led by a jump in food and housing costs, Saudi Press Agency reported.

Food and beverage prices rose 16 percent in June from a year earlier after gaining 15 percent in May, the state-owned news wire said today. Rent, fuel and water was 19 percent more expensive.

Inflation accelerated above 10 percent in five of the six Gulf Cooperation Council states as oil-fueled economic growth created shortages of housing and services. The weaker dollar and higher global food costs also made imports more expensive. All GCC countries except Kuwait peg their currencies to the dollar.

“Saudi inflation is still going to be rent and food driven for the rest of the year,'' said Monica Malik, chief economist at EFG-Hermes Holding SAE, Egypt's largest investment bank by market value in a telephone interview from Dubai. “We expect some stabilization in food prices'' toward the end of the year.

Saudi Arabia has raised the reserve requirement for banks in an attempt to slow money supply and lending growth, which have accelerated as the central bank cut interest rates to keep its peg to the dollar.

The kingdom's M1 money-supply growth, a gauge of future inflation, accelerated to 29 percent in June from 27 percent in May. Saudi commercial bank lending to the private sector, a contributor to money supply, increased 35 percent, after gaining 33 percent in May.

Inflation has been accelerating since the middle of last year, when the rate was at around 3 percent. It has been just over 10 percent in the past three months.

Easing Pressure

“The rate of inflation growth has been slower in the last two months, which makes me optimistic that price pressure are easing,'' said John Sfakianakis, chief economist at Saudi British Bank, the Riyadh-based lender 40 percent owned by HSBC Holding Plc, in a telephone interview from Riyadh today.

The GCC is an economic and political grouping of Saudi Arabia, the U.A.E., Kuwait, Qatar, Oman and Bahrain.

Qatar had the highest inflation in the GCC, at 14.8 percent in the first quarter, followed by 13.2 percent in Oman. The U.A.E., which reports inflation annually, said consumer prices rose 11.1 percent last year.

Kuwait reported that the inflation rate fell to 11.1 percent in May from 11.4 percent in April.

Sourse

Financial impact?

According to the most recent U.S. Census data, Atlanta has 500,000 workers who telecommute on an occasional basis, 297,000 who telecommute at least one day per week, and 350,000 who say they have jobs that are conducive to telecommuting and they would like to, but their employer doesn't offer it.

Mike Williams, director of programs and employers services for the Clean Air Campaign, is working on the 350,000 employees who say they want to telecommute but can't currently convince their employer. Here are some of the statistics he uses — culled from CAC's own case studies — to convince managers of the bottom-line benefits of teleworking:

• 88 percent of teleworkers report increased morale.
• 80 percent of managers agree.
• 65 percent of teleworkers say they're less likely to look for another job. More than half the managers agree.
• 74 percent of teleworkers report increased productivity.
• 85 percent of managers say productivity increased or stayed the same.
• 20 percent was the average increase in productivity reported.
• 96 percent of teleworkers say working remotely has not decreased their work quality.
• 91 percent of managers agree.

Source: Clean Air Campaign

Japan's credit rating was raised one level to Aa3 by Moody's Investors Service, which said the government will keep trying to restrain spending to reduce debt.

The increase on long-term, local-currency debt from A1 “was prompted by expectations of continued fiscal restraint and consolidation, coupled with an easing-out of the debilitating effects of deflation,'' Thomas Byrne, senior vice president of Moody's, said in a statement. “The government and ruling party is firmly committed to fiscal consolidation.''

Prime Minister Yasuo Fukuda last week reaffirmed his pledge to balance the budget by 2011 so that the government can cut the world's largest public debt. Economists say Japan hasn't done enough to pare its borrowings, which the Organization for Economic Cooperation and Development estimates stand at 182 percent of gross domestic product.

“I wonder why Moody's is upgrading now while Japan still faces a harsh fiscal environment,'' said Seiji Adachi, a senior economist at Deutsche Securities Inc. in Tokyo. “On the top of that, they probably downgraded too far before.''

The increase to the fourth-highest investment grade brings Moody's assessment in line with Fitch Ratings' AA- and one notch below Standard & Poor's AA, and puts Japan on a par with Taiwan and Cyprus. Moody's raised the rating to A1 eight months ago.

Moody's assigned Japan the top Aaa rating in 1993, and since 1998 made four cuts as the nation's borrowings swelled. Even with today's upgrade, Japan is still the lowest among the Group of Seven industrialized nations by Moody's measurement. Within the G-7 only Italy and Japan have ratings below Aaa.

Four Cuts

The yen traded at 106.01 per dollar at 2:04 p.m. in Tokyo from 106.28 before the announcement. The yield on Japan's 10- year bond fell 1.5 basis points to 1.595 percent.

“News on Moody's upgrade was a big surprise,'' said Yuji Saito, head of foreign-exchange sales at Societe Generale SA in Tokyo. “This is all because we Japanese think the Fukuda administration is reluctant to cut spending and the Japanese economy is slowing.''

Japan's budget deficit is set to widen for the first time in five years as social-security costs rise in one of the world's most rapidly aging societies.

Investors have purchased more default protection on Japan's debt this year to guard against the risk that the government will become unable to repay it. Credit-default swaps on Japanese government debt were at 16.5 basis points on June 27 compared with 8.5 at the end of 2007, according to CMA Datavision prices.

By comparison, contracts on South Korea were quoted at 106 basis points on June 27, indicating a higher risk of default.

Bank of Japan

Moody's said Japan's economy is “resilient'' to a global slowdown and added that it didn't expect any “preemptive'' interest-rate increases by the Bank of Japan because inflation in the world's second-largest economy is still lower than in other countries.

The central bank's benchmark overnight lending rate is 0.5 percent, the lowest in the industrialized world. Consumer prices excluding fresh food climbed 1.5 percent in May, the fastest pace in a decade.

Further improvement in the nation's debt rating hinges on government efforts toward “sustained fiscal consolidation'' and debt reduction, and a falling birthrate and rising welfare costs will be headwinds for Japan, Moody's added.

Japan's banks are “in a relatively favorable position,'' having avoided the worst of the subprime mortgage collapse that made financial institutions less willing to lend money in the U.S. and Europe, Moody's said.

Stable Financial System

“The Japanese financial system is stable, especially compared to U.S. and European markets,'' said Hidetoshi Ohashi, a credit analyst with Morgan Stanley in Tokyo. He said the higher rating may lead to upgrades at banks and public entities.

Moody's was criticized by the government and summoned to parliament in 2002, when it cuts its rating to A2, the sixth highest. Masajuro Shiokawa, then the nation's finance minister, called Moody's “out of touch with reality.''

Overseas investors held only 5.1 percent of outstanding government bonds as of the end of September 2006, according to the Ministry of Finance.

Sourse

Ontario's retail sector continues to grow, despite the loss of cross-border shoppers to Western New York.

A new Statistics Canada report says that Ontario's retail sales grew by 0.7 percent between March and April. That was slightly better than the nationwide increase of 0.6 percent.

It marked the second straight increase in retail activity in Ontario, essentially wiping out February's sharp decline. Ontario's retail sales have generally been on the upswing since hitting a low point in mid-2007.

That coincides with the period in which the Canadian dollar reached parity with the American dollar, inspiring Ontario bargain hunters to do more of their shopping on the New York side of the Niagara River.

Total retail sales amounted to $12.7 billion (Canadian) in Ontario in April — and $35.6 billion (Canadian) in all of Canada.

Sourse

A new state law establishes fines for unlicensed health care facilities that defy court orders to close and for health care providers who knowingly refer patients to unlicensed facilities.

The new law gives the Alabama Department of Human Resources authority to protect and represent residents of an unlicensed facility that is closed by court order. Fines collected will be used to create a fund to pay for the expense of relocating residents to a licensed health care facility.

"The health, welfare and safety of Alabama’s vulnerable seniors and disabled citizens have always been our number one concern," Alabama Nursing Home Association Executive Director Louis Cottrell said.

Sourse

Small business owners’ confidence in the economy has hit a five-year low, according to the Wells Fargo/Gallup Small Business Index (Index) survey conducted in April.

The index score fell to 48, the lowest level reported since the survey started in August 2003, when the score was 69. The results mark a 35-point drop from the previous survey in January 2008 and a 66-point drop from the Index’s highest score of 114 in December 2006.

"The nearly 50 percent drop in the index clearly reflects the intensified financial pressures small business owners have felt over the last three months," said Scott Anderson, Wells Fargo senior economist. "The decline in both the present situation and future expectations components doesn’t bode well for a swift recovery in small business conditions. However, as consumers begin to receive — and spend — their economic stimulus checks, this should soon begin easing the blow to small businesses in the third quarter of this year."

The Index score is compiled from small business owners’ views on their financial situation, cash flow, revenues, capital allocation, job hiring and credit availability.

Sourse