Monday April 11 Housing and Economic stories

KeNosHousingPortal.blogspot.com

TOP STORIES:

Caterpillar CEO's letter talks of leaving Illinois - (www.pantagraph.com) The chairman and CEO of Peoria-based Caterpillar Inc. is raising the specter of moving the heavy equipment maker out of Illinois. In a letter sent March 21 to Gov. Pat Quinn, Caterpillar chief executive officer Doug Oberhelman said officials in at least four other states have approached the company about relocating since Illinois raised its income tax in January. "I want to stay here. But as the leader of this business, I have to do what's right for Caterpillar when making decisions about where to invest," Oberhelman wrote in the letter obtained Friday by the Lee Enterprises Springfield bureau. "The direction that this state is headed in is not favorable to business and I'd like to work with you to change that." Oberhelman said he's being actively courted to move. "I have been called, 'cornered' in meetings and 'wined and dined' -- the heat is on," Oberhelman wrote. "Before, I never really considered living anywhere else and certainly never considered the possibility of Caterpillar relocating. But I have to admit, the policymakers in Springfield seem to make it harder by the day."

Harry & David Nears Chapter 11 - (online.wsj.com) Harry & David Holdings Inc., a provider of fruit baskets and other gifts, is filing for Chapter 11 bankruptcy protection. The Medford, Ore.-based gift basket producer operates a distribution facility and small manufacturing operation in the Newark Industrial Park in Hebron. The company said Monday that it agreed with a majority of its senior noteholders on terms of a reorganization plan that will eliminate "substantial" debt and provide equity financing to restructure its balance sheet. Harry & David has been struggling as consumers cut back on their spending in the weak economy. It relies on discretionary spending that's often the first to get cut from household and business budgets.

Spain's Banco Base Asks for Funds - (online.wsj.com) Spanish savings bank Banco Base said Monday that it will ask for €1.45 billion ($2.04 billion) in state funds to meet new local capital requirements, a sign that some troubled cajas are struggling to attract much-needed private capital. Banco Base, Spain's third-largest savings bank by assets, abandoned the idea of holding an initial public offering and will ask Spain's Fund for Orderly Bank Restructuring, FROB, for the funds. FROB, in turn, will take a stake in Banco Base, the size of which is yet to be determined.

Goldman Making Money From Special Situation Seen at Risk With Volcker Rule - (www.bloomberg.com) For Goldman Sachs Group Inc.’s Special Situations Group, disasters can be a source of some of the biggest profits. Now the secretive investing operation faces its own potential calamity. Goldman Sachs already has shut two units that made bets with the company’s money because such proprietary trading by banks will be prohibited under the Volcker rule approved by Congress last year. Still, the Special Situations Group, known as SSG, continues to make investments and named a new global head last month. Executives have argued that SSG shouldn’t be affected because it’s more of a lending than a trading business. Created during the late 1990s, SSG invests the bank’s money in the debt and equity of troubled companies and makes loans to high-risk borrowers. The effort to defend it illustrates how important the business is to Goldman Sachs and may be a test of how flexible regulators will be in defining proprietary trading. “It is proprietary trading, but the business can also be modified if you had to,” said Brad Hintz, an analyst at Sanford C. Bernstein & Co. in New York. The question, he said, is “Where will the regulators draw the line?”

Madigan honored with "prevailing wage" award - (illinoisreview.typepad.com) So allied are the unions with Madigan, they honored her in Bloomington on Wednesday. As WJBC reported: Illinois Attorney General Lisa Madigan accepted an award from the state’s Building Trades Council in Bloomington for her previous pro-union legislation. The Reuben G. Soderstrom Prevailing Wage Award is given annually. Madigan says she’s honored and will continue with the same work. She says she’s now working on a bill to enhance penalties for criminal violations of the prevailing wage act. Madigan says under the law, violations would be a class four felony. Madigan says it would penalize people evading the law, and create a level playing field for those following the law. The bill also allows state, local and federal law enforcement agencies to get relevant documents from contractors and reduces the notice time contractors have before government inspection of documents.

OTHER STORIES:

Ireland Seeks to Share Bank-Loss Burdens With Bond Holders, Noonan Says - (www.bloomberg.com)

Merkel Loses Key German State on Nuclear Fears - (www.nytimes.com)

U.S. Consumer Spending Rose More Than Forecast in February - (www.bloomberg.com)

Fed Should Weigh Curtailing $600 Billion in Bond Purchases, Bullard Says - (www.bloomberg.com)

Is It a New Tech Bubble? Let’s See if It Pops - (www.nytimes.com)

As Japan shutdowns drag on, auto crisis worsens - (www.finance.yahoo.com)

Japan Fears Nuclear Reactor Is Leaking Contaminated Water - (www.nytimes.com)

Radiation Danger Stalls Efforts to Repair Damaged Japan Reactors - (www.bloomberg.com)