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Personal Finance Repairing that neglected nest egg, see Page B3.
www.bendbulletin.com/business
THE BULLETIN • THURSDAY, APRIL 14, 2011
MARKET REPORT
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2,761.52 NASDAQ CLOSE CHANGE +16.73 +.61%
STOC K S R E P O R T For a complete listing of stocks, including mutual funds, see Pages B4-5
B U S I N E SS IN BRIEF
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12,270.99 DOW JONES CLOSE CHANGE +7.41 +.06%
1,314.41 S&P 500 CLOSE CHANGE +.25 +.02%
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BONDS
Ten-year CLOSE 3.46 treasury CHANGE -1.14%
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$1454.90 GOLD CLOSE CHANGE +$2.00
Culver-based Earth2o will begin shipping bottled water on Friday to Japan, where radiation leaking from a tsunamidamaged nuclear power plant has caused shortages, the company said Wednesday. Earth2o expects to send 40,000 cases of bottled water a month to Japan, Steve Emery, president and CEO, said in a conference call with the head of the U.S. Small Business Administration. He expects the shipments to increase business about 15 percent and employment by about five workers. “We will be adding a full-time second shift for Japan,” he said.
Radiation leaks from the damaged nuclear power plant prompted warnings about radioactive iodine in drinking water in the weeks after the March 11 disaster, according to The Associated Press. The warnings led to a run on bottled water, which was still in short supply last week, the news agency reported. Emery credits Earth2o’s recent certification to the highest level of food-safety standards as one of the reasons it’s allowed to distribute in Japan. In March 2010 it became one of 49 plants worldwide to earn Level 3 Safe Quality Food certification from NSF International. The company also continues
to reduce its environmental impact, he said. Earth2o plans to start its own plastics company in Culver to produce nearly all its bottles out of 100-percent recycled plastic. Making the bottles in Culver will eliminate about 10 semitruck shipments a week from Olympia, Wash., Emery said, reducing pollution. The company expects to add about five employees to make bottles, he said. Previously, Earth2o eliminated cardboard in its packaging and replaced older mercury-vapor lights with T5 fluorescents, reducing energy costs about 60 percent. See Water / B6
Rob Kerr / The Bulletin ile photo
JPMorgan reports big jump in profit
The firm Neal Huston & Associates Architects Inc. will move from Bend’s Mount Bachelor Village office park to an office on Powerhouse Drive in Bend’s Old Mill District. The Old Mill spot is smaller than the current spot and is a better fit for the company, which has streamlined its processes in recent years, said Neal Huston, the owner. The move is likely to be complete by the end of June, he said.
By Eric Dash New York Times News Service
Labor markets improve, Fed says
Jerry Holt / Minneapolis Star Tribune
Scott Hughes, chief operating officer of Visiam, stands outside the company’s office in Blaine, Minn. Visiam supplies processing technology for municipal solid waste management groups. The $75,000 the company received through the angel tax credit program last year helped it save three full-time jobs, hire outside consultants and bring its technology to commercialization.
Angels fear to tread Some states looking to tax credits to encourage angel investors By Wendy Lee Star Tribune (Minneapolis)
MINNEAPOLIS — hey’re risk-takers, putting thousands of their own dollars into unproven ideas for the thrill of turning startups into successful businesses. Called angel investors, these wealthy individuals are the financial saviors who step in after entrepreneurs have raised all the cash they can from friends and family.
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The problem is, there aren’t enough of them. Wealthy individuals who finance startups around the country are cutting back because the deals have gotten less attractive. Several investors said they can make the same or more money without taking nearly so much risk. The number of active U.S. angel investors declined 11 percent to 125,100 people in the first half of 2010, compared with a year earlier, according to the Uni-
versity of New Hampshire’s Center for Venture Research. Those who remain are becoming more cautious, with the lowest percentage of angel investors funding startups at the idea or concept stage in at least 15 years. “If we don’t have the acorns, we’re not going to have the trees,” said Jeffrey Sohl, director for the University of New Hampshire’s Center for Venture Research. See Investors / B5
Borrowing rises Consumers borrowed more in February, taking out loans for new cars and financing purchases on their credit cards. Outstanding consumer debt
Senate report names culprits in financial crisis
Seasonally adjusted
By Gretchen Morgenson and Louise Story
$2.50 trillion
New York Times News Service
2.45
$2.42T
2.40
2.35 FMAMJ J ASOND J F ’10 ’11 Source: Federal Reserve AP
$40.235 SILVER CLOSE CHANGE +$0.177
Earth2o’s Steve Emery stands among stacks of recycled plastic water bottles at the company’s Culver location last fall. The company expects to send 40,000 cases of bottled water a month to Japan, which is experiencing shortages due to increased radiation levels from the damaged nuclear power plant.
Architecture firm moving to Old Mill
WASHINGTON — The Federal Reserve said Wednesday that the economy expanded at a “moderate” pace across much of the country in February and March, led by manufacturing, with labor markets showing improvements in most regions. “While many districts described the improvements as only moderate, most districts stated that gains were widespread across sectors,” the Fed said in its Beige Book report in Washington. While higher commodity costs compelled sellers to try to raise prices, pressures to increase wages were “weak or subdued.” The report may reinforce views this month from Chairman Ben Bernanke’s top two lieutenants, Janet Yellen and William Dudley, that the economy is recovering without enough strength to warrant withdrawing record monetary stimulus. The Fed, while keeping the benchmark interest rate close to zero since 2008, is aiming to boost growth by completing $600 billion of Treasury purchases through June. — From staff and wire reports
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Culver company expects to add about 5 employees The Bulletin
The Astro Lounge bar, located on Minnesota Avenue in downtown Bend, will move around the corner to the former Subway location on Bond Street, owner Josh Maquet said. Maquet said he will submit plans to the city of Bend for building permits to construct “an urban patio” behind the new space, which is twice as large as the current one. Maquet also envisions the addition of a small stage for concerts and a 30-foot-long bar at the new space, which will probably be open for lunch, he said. The current Astro Lounge will be vacant at the end of May, and the new site should be open for business in July, Maquet said.
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Earth2o to ship its water to Japan By Tim Doran
Astro Lounge plans move to Bond Street
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A voluminous report on the financial crisis by the U.S. Senate — citing internal documents and private communications of bank executives, regulators, credit ratings agencies and investors — describes business practices that were rife with conflicts during the mortgage mania and reckless activities that were ignored inside the banks and among their federal regulators.
The 650-page report, “Wall Street and the Financial Crisis: Anatomy of a Financial Collapse,” was released Wednesday by the Senate Permanent Subcommittee on Investigations, whose co-chairmen are Carl Levin, D-Mich., and Tom Coburn, R-Okla. The result of two years’ work, the report focuses on an array of institutions with central roles in the mortgage crisis: Washington Mutual, an aggressive mortgage lender that collapsed in 2008; the Office of Thrift Su-
pervision, a regulator; the credit ratings agencies Standard & Poor’s and Moody’s Investors Service; and the investment banks Goldman Sachs and Deutsche Bank. “The report pulls back the curtain on shoddy, risky, deceptive practices on the part of a lot of major financial institutions,” Levin said in an interview. “The overwhelming evidence is that those institutions deceived their clients and deceived the public, and they were aided and abetted by def-
erential regulators and credit ratings agencies who had conflicts of interest.” The bipartisan report includes 19 recommendations for changes to regulatory and industry practices. These include creating strong conflict-of-interest policies at the nation’s banks and requiring that banks hold higher reserves against risky mortgages. The report also asks federal regulators to examine its findings for violations of laws. See Report / B5
Even as JPMorgan Chase reported a 67 percent increase in first-quarter earnings on Wednesday, the problems in its troubled home lending unit kept piling up. Bad mortgages and home equity loans cost the bank $1 billion in the first quarter, bringing total residential real estate losses since the financial crisis began to more than $20 billion. To make matters worse, bank officials said they expected these high loss levels to persist, and acknowledged new mortgage lending had stalled. Mortgage originations fell 29 percent from the fourth quarter, as higher rates deflated the refinancing boom of 2010. Still, strong results from JPMorgan’s investment bank as well as the release of $2 billion that had been set aside earlier to cover credit card losses offset the mortgage mess and contributed to a record $5.6 billion quarterly profit. As the first of the major banks to report their first quarter results, JPMorgan is closely watched as a bellwether for both Wall Street and the broader banking industry. Analysts suggested there was an increasing divergence in performance between Wall Street activities like trading and investment banking and more traditional retail lending. Bank of America, Wells Fargo, Citigroup and other big financial institutions face a similar challenge as they report earnings this month. “There just is not enough economic strength to fuel loan growth,” David Trone, a banking analyst at JMP Securities, said. “That traditional part of banking is just very stagnant.” Revenue fell 8 percent to $25.8 billion, underscoring the challenge banks face as they try to expand their underlying businesses amid a still-sluggish economy and new government rules that restrict lucrative sources of income like overdraft fees. See Morgan / B2
“There just is not enough economic strength to fuel loan growth. That traditional part of banking is just very stagnant.” — David Trone, banking analyst, JMP Securities