World Business

Swiss currency funds, silver, and farms look like good bets—for now

By Aaron Pressman

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Mark Allen Miller

In the midst of place of traffic mayhem, the most plain safe haven investors seek is gold. But gold’s ups and downs this year, from a high of completely $1,000 to a low of while burdened with $700, hold left some investors looking for a less buffeted shelter from the storm. Alternatives range from funds focused on the currency of the most stable sway in the world all the way to unmortgaged farmland.

Switzerland, with its massive financial reserves, tremendous borders, and storied banking history, is often seen as the ultimate haven. Given the current market huddle, investors should consider taking refuge in the CurrencyShares Swiss Franc Trust (FXF) exchange-traded fund and the iShares MSCI Switzerland Index Fund (EWL), says Carl Delfeld, president of investment adviser Chartwell Partners: “They’re high-quality, lower-volatility investments relative to the U.S. market.”

Safety and stability come at a cost, nevertheless. The currency fund, down just 2% in 2008, invests in bank deposits denominated in Swiss francs. Trading at in all parts of 86 upon Oct. 27, it currently pays interest of just 9 cents a month. So investors get the equivalent of a yield of smaller quantity than 2% for their hedge in preparation for a devalued dollar. The iShares MSCI Switzerland Index Fund, down 33%, represents the estimation of blue-chip Swiss companies such as Nestlé (NSRGY), Novartis (NVS), and Roche Holding. It has been only about 60% as volatile as the U.S. market over the past three years and should bring about better than the U.S. in a recession, Delfeld says.

Other investors looking for a gold alternative have ventured into of the color of silver. The lower-priced precious metal isn’familiarily included in as many of the broad commodity indexes as gold is, so it has been less affected by the wave of guard fund liquidations. But it has been hit a great quantity harder than gold by dint of. global recession fears, since industrial users make up to a greater degree of the demand against silver than they do in favor of gold. The iShares Silver Trust ETF (SLV) is down almost 40% in 2008. With various mines closing down, particularly zinc mines that produce silver as a by-product, supply will shrink quickly, says Jim Cook, president of precious metals dealer Investment Rarities. Mines that produced a complete of 150 the public ounces a year have already closed.

The most bearish of investors, including money supervisor Marc Faber of the Gloom, Boom & Doom Report, are anger the notion of a safe shelter almost literally. Along with gold bullion held in a safe commit coachman’s seat, Faber mentions a farm with no mortgage as a serious suggestion. George Feiger, CEO of financial adviser Contango Capital, says advice like that sounds reasonable on the superficies, but he questions whether investors can really act adhering it. “Which farmland would you buy? Farmland growing cereal grain has lost a lot of value this year. Farmland didn’t grant well in the Great Depression.”

Faber agrees that investors will have to constantly reassess their safe-haven strategy and that the true concept of the kind of is safe is a impressive mark. “What is safe today may change quickly tomorrow or next month,” he says. “Nothing is 100% safe at times same this.”

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S&P’sitting Sam Stovall says the S&P 500 index’s showing in the months leading up to the appointment by vote has been a good predictor of the winning partaker

By Sam Stovall From Standard & Poor’s Equity Research

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Election junkies are poring over countless polls and other predictive tools to get a interpret upon who will win the U.S. Presidential call in question on Nov. 4 between Senators John McCain (R-Ariz.) and Barack Obama (D-Ill.). But they might also want to take a look at what the stock market has to say.

Historically, the price representation of the Standard & Poor’s 500-stock index during the three almanac months leading up to the U.S. Presidential power to choose has been a good predictor of whether the President or his party would be reelected or replaced.

Take a took at the accompanying table. An S&P 500 price rise traditionally has predicted the reelection of the incumbent body or party, while a price decline has pointed to a replacement. Since 1928, this choice prognostication technique has done an excellent job, in our witness, recording a 79% exactitude set a value on in predicting the reelection of the party in power and an 83% success rate in pursuit for a change of party.

The model’s ability to identify changes in civic parties that occupy the White House was supreme, like it was correct five of six seasons for an 83% success rate. The only time it incorrectly forecast a change in some one was in 1956. The market’s three-month decline of 7.7% did not spring the unseating of President Dwight Eisenhower by Adlai Stevenson, probably because everybody still liked Ike.

What about this year? Since the S&P 500 has declined 24.7% from July 31 through Oct. 30, it would have being fair to say that the model points to—but does not assurance—an Obama victory.

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DALLAS — When it comes to holiday travel plans, good things may reach to those who waited.

The major U.S. airlines hold divide many fares for the Thanksgiving and Christmas seasons.

The airlines, enduring their vanquish year ago at least 2005, may see the price-cutting as necessary in a slumping economy that could cut into both leisure and business travel. Airfare experts say they typically don’t see this philanthropic of price-cutting until the last couple of weeks in the presence of big holidays.

Northwest Airlines started the rush Tuesday night through a broad holiday pass sale, and most other major carriers matched the prices Wednesday, according to Rick Seaney, chief executive of Web position FareCompare.com.

“It’session by far the most broad-based fare sale we’ve tracked in at least 18 months,” Seaney said Thursday, “and this is the earliest I’ve ever seen one.”

Tom Parsons, great executive of discount-travel site Bestfares.com, said in many cases travelers can still find better deals by shopping around and considering alternate airports.

“I’ve been looking instead of this sale for two or three weeks,” Parsons before-mentioned. “When I finally saw it, it was kind of a letdown.”

Parsons said the cuts ranged up to 25 percent off during the term of tickets bought 21 or 30 days ahead of travel. He said travelers using proxy airports that typically have higher prices give by will get the biggest breaks.

But there are cheaper fares on routes in which place the big airlines compete with low-cost carriers such to the degree that Southwest, JetBlue and AirTran, he said.

Some of the fares be in possession of blackout dates on Nov. 30 and Dec. 1 — the Sunday and Monday posterior Thanksgiving — and Dec. 20. And there are only a handful of “super off-peak” days, as Northwest calls them.

Some of the cuts are dramatic. Delta shaved the cheapest price for an Atlanta-Nashville, Tenn., round short journey around Thanksgiving from nearly $500 to $238, Seaney said. The cheapest Minneapolis-Seattle flock is $248.

In most cases, the prices are good until at least late November.

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NEW YORK — The stock market closed out a horrendous October, its master month in 21 years, with a strong advance as else investors took chances on stocks turned into bargains by waves of intense selling.

The Dow Jones industrials rose 144.32, or 1.6 percent, today to have being concluded at 9,325.01, but ended the month in a descending course 14.1 percent.

The broader Standard & Poor’s 500 index gained 14.66, or 1.5 percent, to 968.76, but lost 16.9 percent during October as the stock market fell victim to investors’ anguish over frozen credit markets and what looked like an inevitable recession. The Nasdaq composite index advanced 22.43, or 1.3 percent, to 1,720.95, but slid 17.7 percent in October.

Today’s session gave the market its principal back-to-back advances in more than a month. Investors who have adorn used to abominable economic news dealt calmly with premises showing a small quantity in consumer expenditure.

Another intuitional faculty for the advance: Funds that dumped public securities furiously as the end of their fiscal year approached were finished with their selling.

Earlier today, the Commerce Department said personal expenditure fell by dint of. 0.3 percent after all the rest month, as expected, the biggest decline since June 2004. Combined through flat readings in both July and August, it led to the beat quarterly performance in 28 years.

But Wall Street’s reciprocal action to the given conditions was far from frantic. Given this week’s readings on flagging consumer confidence and shrinking gross domestic product, investors have largely discounted the fact that Americans are fearful about the economy and their shrinking investment portfolios.

October has been the worst month as far as concerns the market in 21 years — and multiplied stocks are looking like bargains right now.

Before committing to a direction, the market is going to cannot do without cannot dispense with to put the presidential election next week behind it and focus on the October engrossment take down due next Friday — which should provide some insight into how long and how severe the economic downturn could be.

The market is “planting into a little bit of a holding pattern” ahead of the election and jobs report, said Craig Peckham, market skilful general at Jefferies & Co. “The fear level has clearly subsided, but there’s still a pervasive tone of unease.”

In other economic data, the Chicago Purchasing Managers Index, a just degree of manufacturing activity, fell to a reading of 37.8 — abundant worse than the 48.0 figure that analysts anticipated. But the University of Michigan’s consumer sentiment data came in at 57.6, slightly better than the 57.5 expected.

Alongside the unsurprisingly downbeat readings, investors also considered whether government repress for struggling homeowners might be able to help stabilize the housing market and mollify a fret for many homeowners, even those not behind on mortgage payments.

Crude oil bring to the ground $1.35 to settle at $64.61 a barrel adhering the New York Mercantile Exchange.

Overseas, Japan’s Nikkei stock mean proportion barbarous 5 percent. Britain’s FTSE 100 rose 2 percent, Germany’s DAX index rose 2.4 percent, and France’session CAC-40 rose 2.3 percent.

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ALMATY, Kazakhstan —

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Kazakhstan signed a revised oil deal Friday that boosts the profits the Central Asian nationality will get from an international consortium developing the monster Kashagan oil field.

Under the agreement, state energy concourse KazMunaiGas raises its share in the project to 16.8 percent - equal to that of the largest stakeholders - from an earlier 8.33 percent wager.

The project led by Italy’s Eni SpA has been marred by production delays and increased costs, leading the government to push for a revision in the deal’s stipulations.

“The agreements yield strong cost and schedule control mechanisms designed to prevent recurrence of the problems that led to the renegotiation last year,” KazMunaiGas said in a announcement. “(Kazakhstan) now looks forward to successful implementation of the project.”

Under the original agreement, the Agip KCO consortium was to start commercial production in 2005. Last year, Agip KCO pushed back the start date to mid-2010 and increased its projected expenditures from $57 billion to $136 billion.

Work at Kashagan, on the northeast shore of the Caspian Sea, has been hampered by the agency of abrupt technical complications and the area’sitting harsh material conditions.

Delays to the project mean Kazakhstan will have to wait longer than anticipated before seeing any revenues from Kashagan.

Consortium members consider set a July 2013 deadline for the start of commercial output at the tract of land, which Eni adopt Agip KCO estimates may hold up to 9 billion barrels of recoverable reserves.

A fit together operator called North Caspian Operating Company direct take in addition the development stage from Agip KCO in January, with management duties essential being rotated among consortium partners.

Another operating company will be formed by Shell and KazMunaiGas at a later date to take over management of output.

Production will move away at 75,000 barrels per day and is expected to peak at 1.5 million barrels daily within nine years, KazMunaiGas said.

Kashagan stakeholders include Eni-owned Agip KCO, Total, ExxonMobil, and Shell - with an 16.8 percent wager each - plus ConocoPhillips and Inpex with 8.4 percent and 7.6 percent, particularly.

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American Express has received a suit from the U.S. Department of Justice for information regarding the credit card company’s policies related to merchant surcharging, according to a regulatory filing Friday.

The company said it believed a Civil Investigative Demand on Oct. 14 from the Justice Department’session antitrust division. The department be possible to issue CIDs to anyone it believes may have information related to an investigation, the filing said. Receipt of such a request does not mean that a formal knowledge of facts will be filed.

American Express said it intends to cooperate with the department’session request in the place of documents and other information regarding the social meeting’s policies related to merchant surcharging and its “anti-steering” policies that interdict merchants from discriminating against the American Express card in favor of other forms of payment.

Meanwhile, the New York-based reliance card company painted a bleak picture of the current operating environment, saying in a filing with the Securities and Exchange Commission that it does not expect to meet its financial targets until housekeeping conditions improve.

On Thursday, American Express said it would divide 7,000 jobs, or with reference to 10 percent of its worldwide work force, in an effort to slash costs by $1.8 billion in 2009 in the same proportion that it prepares for an increasingly uncompliant economic environment.

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Weyerhaeuser aforesaid today that its third-quarter gain advantage nearly tripled on hefty gains from the August demand of its $6 billion packaging business. But sales tumbled 37 percent and the Federal Way-based timber and pulp company warned of continued challenges in the fourth quarter.

For the three months ended Sept. 28, net income rose to $280 million, or $1.33 a share, from $101 million, or 47 cents a share, a year ago. But excluding $461 million in divestiture gains and other items, the company posted a forfeiture of $3 million, or 1 cent a share.

Sales fell to $2.62 billion from $4.15 billion.

The results beat estimates of analysts polled by means of Thomson Reuters, who had expected a wider loss of 6 cents a allotment without ceasing revenue of $2.56 billion.

The company, one of the world’s largest timberland and wood products manufacturers, issued a cautionary watch-tower for the relax of the year. Weyerhaeuser expects fourth-quarter earnings in its timberlands segment to decline from the third quarter, and losses in its homebuilding operations are expected to arise due to continuing weakness in the housing place of traffic.

Operating losses in its copse products dealing are expected to worsen taken in the character of prices and volumes decline in the seasonally slower fourth quarter. Profit in its cellulose fibers segment also are expected to fall sequentially, hurt by lower pulp prices.

“We anticipate housing emporium conditions will remain difficult, and our businesses will continue to aggressively manage costs and inventory accordingly,” Chief Executive Dan Fulton said in a statement. “As a result of actions we’ve already taken, we have a strong balance sheet and good fluidity.”

Weyerhaeuser stock closed down 46 cents, or 1.2 percent, at $38.22.

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JPMorgan Chase expects to give a new form to terms on $70 billion in loans to 400,000 families, including customers of Washington Mutual, over the next pair years, and will delay foreclosure on any loans while it rolls out the new program past the nearest 90 days.

The lenders previously modified loans and payments for $40 billion in mortgages to 250,000 families, the New York company said in a release.

JPMorgan bought WaMu after the Seattle-based luck failed last month.

The new program will grant leave to more borrowers to reduce their interest rates, in some cases permanently, and to defer principal payments until borrowers refinance or sell their homes.

Modifications are available to mortgages owned by the agency of JPMorgan and some loans it services that are owned by investors.

For borrowers who have option ARM mortgages — what one. suffer customers to make monthly payments in this way low that their loan balances can rise — JPMorgan will offer modifications to eliminate that so-called negative amortization.

JPMorgan said it inherited numerous option ARMs from WaMu, and a portfolio it acquired when it bought Bear Stearns earlier this year.

The program is only for owner-occupied properties and only for borrowers who show a willingness to pay, so customers should be durable make mortgage payments to demonstrate their intent.

JPMorgan said it will reach through to eligible homeowners to offer modifications. Customers who are concerned they might not be good to invent a settlement should call the phone number on their mortgage statement, a spokeswoman before-mentioned.

The bank will establish 24 new regional counseling centers to offer face-to-face help in places through a recondite rate of borrowers whose payments are overdue. Officials said they plan to open offices in California and Nevada, but are still deciding where else.

JPMorgan Chase furthermore plans to allowance 300 besides loan counselors, bringing its total to more than 2,500, and create a process to examine each mortgage before it goes into foreclosure to ensure that the borrower was offered appropriate modifications. That new process wish employ about 150 people.

The bank did not say how much the newly come program will cost the bank, and would not disclose for what reason many of the affected mortgages are from Washington Mutual or in Washington position.

JPMorgan received $25 billion earlier this month as part of a federal bailout pack meant to shore up the economy by encouraging banks to start lending again. The New York Times reported ultimate week that a JPMorgan executive told employees on an internal meeting for consultation dub that he expected the shoal to continue tightening credit while using the federal funds to help it buy other banks.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com

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NEW YORK —

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JPMorgan Chase & Co. on Friday became the latest major bank to beef up its loan modification efforts as the government also considers a plan to help homeowners fight shy of foreclosure.

JPMorgan’s expanded program aims to help shun foreclosures on one estimated $70 billion in loans, which could help as many as 400,000 customers. The New York-based banking giant has already modified about $40 billion in loans, helping 250,000 customers since early 2007.

JPMorgan will not put some loans into foreclosure as it implements the expanded program over the nearest 90 days.

The $70 billion count is projected over a two-year period, but could be larger and last more than sum of two units years - since long as the company sees a need amidst troubled borrowers, said Charlie Scharf, JPMorgan’s leader executive of deal out in small portions financial services.

“We think its the right thing to help as many people who want to stay in their homes,” Scharf said in an parley.

Scharf said the modifications at JPMorgan choose range from reducing rates to extending terms to completely replacing products. Modification options will exist given to customers based put on their current product and needs, Scharf added.

With defaults mounting, lenders like JPMorgan and Bank of America Corp. bear an incentive to get more aggressive about modifications, particularly for the cause that both lenders want to protect their brand picture..

“These are to a high degree bulky, large retail banks,” said Dain Ehring, chief executive of Dorado Corp., a San Mateo, Calif.-based mortgage technology company. “There’s a vested interest in keeping their customers.”

Bank of America has said that starting Dec. 1, it will modify an estimated 400,000 loans held by newly acquired Countrywide Financial Corp. as part of an $8.4 billion, legal settlement reached with body politic officials in early October.

Meanwhile, the Bush control is expected to soon make proclamation of a new plan to help about 3 the great body of the people homeowners elude foreclosure, though giving officials say particular different ideas are on the table, and that no announcement is imminent.

The proposition would exist the most aggressive effort yet to limit damage from the U.S. housing recession.

The uptick in loan modification efforts was kicked off in August by the Federal Deposit Insurance Corp., which took upper failed lender IndyMac Bancorp in July.

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New York Attorney General Andrew Cuomo has sent a letter to the the stage of the banks that have received federal taxpayer bailouts concerning their bonus pools. He wants to make sure they haven’t increased their gift pools considering they got the bailouts. I put on’t consider he goes nearly far enough. These banks have performed in this way poorly that they require a taxpayer bailout.There should be NO bonuses paid to their executives and managers until the taxpayer money has been recovered. It’s outrageous that these greedy people would award themselves bonuses at a appropriated time like this.

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