My finance view

Just a few months after putting its Buffalo headquarters up for sale, the Girl Scouts of Buffalo and Erie County have found a buyer for their Jewett Parkway complex.

The Hillside Family of Agencies, a not-for-profit that serves youth and others in Erie and Niagara Counties, has agreed to purchase the Girl Scouts headquarters. A formal announcement is due Friday afternoon.

The Girl Scouts, which is merging with three other regional Girl Scout councils, is relocating from Buffalo to a suburban site.

The Girl Scouts listed its Jewett Parkway headquarters, a 10,900-square-foot building located just a few blocks from the Darwin Martin House complex, for sale this winter with a $675,000 asking price. The building was listed by Paula Blanchard and Ed Woods from RealtyUSA.

The council has used the Jewett Parkway building as its headquarters since it bought the property in 1969, Approximately 40 people work in the building.

The decision to put the building on the real estate market was made as an outgrowth from the merger between the Girl Scouts of Buffalo and Erie County, Girl Scouts of Niagara County, Girl Scouts of Genesee Valley and Girl Scouts of Southwestern New York. The council now covers a jurisdictional area that covers nine counties and 6,700 square miles in a region that extends from Niagara and Erie Counties eastward towards Rochester.

The Girl Scouts of Western New York – the newly merged entity – serves more than 22,000 girls and a network of more than 10,000 volunteers.

Girl Scout officials said they needed a more central location.

Besides the 40 people who work in Buffalo, the council has more than 100 employees in offices it operates in Lockport, Jamestown, Rochester and Batavia.

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Wall Street’s key measure of volatility skyrocketed on Thursday, as all major stock indexes plummeted on concerns about the European debt crisis.

The CBOE Volatility (VIX) index, or the VIX, jumped 31.2% to 46.35, after surging as high as 46.37 earlier in the session.

Stocks fell sharply, with the Dow Jones industrial average (INDU) plunging more than 200 points, or 2.7%, after sinking as much as 328 points earlier in the session.

Year to date, the VIX has risen 114%. It’s up more than 73% over the past five days alone. Just four weeks ago, the VIX was at a three-year low.

A VIX reading higher than 30 is considered a sign that investors are getting worried. But even at Thursday’s highs, the VIX is still way below the peak level of almost 90 hit in October 2008 — after Lehman Brothers collapsed.

Concerns about European debt have battered global stocks and spilled over into U.S. markets. The European Union and International Monetary Fund hammered out a $1 trillion European aid package, but that has failed to assuage worries payday loan lenders in states.

Some investors fear that even the massive bailout won’t be enough to contain debt problems from spreading throughout Europe. Earlier this month, riots in Greece turned deadly with protesters enraged over severe new government austerity measures.

Other countries, including Portugal and Spain, also announced budget cuts to avoid problems seen in debt-choked Greece — but investors worry that could hamper fragile recovery. Those fears sent the euro spiraling to a four-year low, which set off alarm bells for market participants.

European shares also felt the blow Thursday, closing lower to extend the previous session’s sharp drop. Britain’s FTSE 100 was down 2%, France’s CAC 40 fell 4.2% and Germany’s DAX lost 2%. 

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Treasurys were little changed Wednesday, as investors looked for direction amid mixed signals out of Europe and the United States.

What prices are doing: Prices straddled the breakeven point much of Wedneday before dipping a bit after the afternoon release of the Federal Reserve’s upbeat minutes.

The benchmark 10-year note fell 2/32 to 101-7/32, pushing the yield up to 3.36%. Bond prices and yields move in opposite directions.

The 30-year bond dropped 3/32 to 102-12/32 and yielded 4.24%; the 2-year note inched lower to 100-14/32, with a 0.76% yield. The 5-year note was down 7/32 to 101-26/32, yielding 2.11%.

What’s moving the market: Treasurys struggled to find direction Wednesday as investors weighed mixed signals in Europe and the United States.

Germany announced it would ban some "naked" short selling and said its banks are not on the brink, which helped the euro rise against the dollar for the first time in several trading sessions. The euro hit a fresh four-year low on Tuesday, but rose 1.5% against the dollar Wednesday.

But this assurance from German officials did little to assuage investors, who are wary about the strength of Europe’s banks, and Treasurys rebounded.

The government-backed bonds turned lower, however, after the Fed raised its outlook for economic growth and reduced its estimate for the unemployment rate.

Investors view Treasurys as "safer" assets in times of economic uncertainty because they are backed by the U.S. government. In recent weeks, the euro zone’s debt concerns and worries about the sustainability of the shared currency have caused riskier assets, such as stocks traded in global markets, to plummet, boosting the government-backed bonds.

What analysts are saying: "Everyone’s focused on the euro problem," said William Larkin, a portfolio manager at Cabot Money Management. "The flight to quality has caused a lot of volatility in the treasury market."

Analysts have said that Germany’s ban on short-selling is an effort to protect banks from the damage of speculators can cause. But following the announcement, European stock markets fell and U.S. stock markets traded lower as investors continued to move money out of riskier assets, such as stocks and commodities, and into relatively safer ones.

"They would have been better off having a press release, detailing the rationale of the ban and its connection to the larger austerity plans," Larkin said. "It looks like a patch, panic. It doesn’t look coordinated."

At yields lower than 3.5% on the benchmark 10-year note, Treasurys are quite expensive, Larkin said. But the trend is unlikely to change in the near-term, as uncertainty clouds Europe.

"As long as fear is out there, Treasurys will trade expensively with very low yields," Larkin said. 

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The foreclosure plague may have finally reached its peak in April 2010 — but don’t expect delinquency statistics to plummet anytime soon.

The total number of foreclosure filings — notices of default, auction notices and bank repossessions — fell by 9% from March to April, and 2% compared with April 2009, according to data released Thursday by RealtyTrac, the online marketer of foreclosed properties.

This is the first time that has happened in the history of the report, which goes back to January 2006.

But the number of homes repossessed during April is at an all-time high of 92,432. That is a 45% increase over April 2009. If repossessions continue at this pace, more than 1.1 million homes will be lost in 2010.

"There were two important milestones in the April numbers that show foreclosure activity has begun to plateau, but at a very high level that will not drop off in the near future," said RealtyTrac CEO James Saccacio.

Saccacio said he expects the pattern to become the norm for many months, with the overall numbers of filings staying high, but not increasing, and repossessions remaining at record levels.

The reason that repossessions can rise while filings hold steady is that lenders are working through a backlog of delinquent properties, taking more of them through the entire process to repossession, rather than letting them linger in limbo.

Walkaways

The numbers of repossessed properties, also called real-estate owned or REOs, have been boosted by a spike in the number of homeowners voluntarily giving up their homes because their the value has dropped so precipitously.

These "strategic defaults" now account for nearly one in three foreclosures, according to a recent report from the University of Chicago Booth School of Business and Northwestern’s Kellogg School of Management. That’s up from 22% 12 months earlier.

Some homeowners walk away when they are "underwater," owing far more than the value of their home, because they realize that they will never recoup the losses. The further homeowners fall underwater, the more likely they are to leave.

About one in four U.S. homeowners is underwater, according to CoreLogic, a financial data provider. Nearly 5 million of those borrowers owe mortgage debt that exceeds their property values by 25% or more. The total of negative equity in these deeply underwater borrowers is a whopping $655 billion.

Foreclosure epicenters

Nevada continues to rank as the worst-hit foreclosure state, with one of every 69 households receiving some kind of filing. That’s nearly six times the national rate which is one household for every 387 receiving a filing.

Arizona had the second highest rate; Florida the third; and California the fourth. California, the largest state in the union, had nearly 70,000 filings, more than any other state. Michigan, where the vast number of foreclosures can be traced to job losses and economic turmoil, recorded more than 19,000.

The metro area market that recorded the highest rate of foreclosure filings in April was Las Vegas, where one of every 60 homes was delinquent, Second was Modesto, Calif., with one in 101, and neighboring Merced, where one in 104 homeowners was in some stage of default. 

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Actor Jimmy Smits and country music performer Reba McEntire are among celebrities lined up for this year's "A Capitol Fourth" show, broadcast live from the West Lawn of the U.S. Capitol.

This is the 30th anniversary broadcast of the show, which leads up to Washington's fireworks display on the Naitonal Mall.

Smits will host the broadcast. Other performers scheduled this year include Darius Rucker of Hootie & the Blowfish and classical pianist Lang Lang, who will perform with the National Symphony Orchestra.

McEntire will also receive the National Artistic Achievement Award during the show.

As in years past, the show will be broadcast live on PBS and heard live on NPR member radio stations.

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Regulators and Wall Street officials went through millions of trades one by one Friday and canceled thousands as they sought to explain a record plunge in the stock market, undo damage and keep it from happening again.

It wasn’t clear how long the laborious process would take or if it would even solve the mystery behind Thursday’s harrowing trading session that saw the Dow Jones industrial average fall hundreds of points and then recover, all in a matter of minutes. The chaotic slide — some stocks briefly fell to near zero — brought back memories of the darkest days of the financial crisis.

The Securities and Exchange Commission and Commodity Futures Trading Commission were investigating, but on the day after, there were more questions than answers:

— Did a single trader mistakenly punch the wrong number of shares when making a sell order, maybe mistyping "billion" instead of "million" and setting off a market-wide panic that at one point pulled the Dow down almost 1,000 points?

— Did high-speed computerized trading systems, supposed to make markets work smoothly, go haywire?

— Most important to anyone with money in the stock market: Could it happen again?

Maybe the scariest part was that no one could unravel what happened. That left executives at the major stock exchanges pointing fingers at one another, and the public wondering if the hidden world of high-frequency, computerized trading that fed the panic posed a threat to their 401(k)s.

"It could be awhile before they figure it out because they have to sift through everything trade by trade," said San Diego State University finance professor Dan Seiver, who has followed the markets for 52 years no fax pay day loan. "And humans are a lot slower than machines."

Market officials worked to cancel thousands of "clearly erroneous" trades made during the plunge.

New York Stock Exchange Euronext CEO Duncan Niederauer told CNBC that his exchange canceled 4,000 trades.

How did it happen? Speculation on trading floors initially centered on a computerized selloff possibly caused by a typographical error. One theory was that a trader trying to sell millions of shares accidentally sold billions, which would have triggered a wave of automatic selling.

The SEC is poring through trading data containing millions of transactions to try to identify what might have caused the disruption, according to two people familiar with the matter. The two major markets, the New York Stock Exchange and Nasdaq, were also examining audits of completed trades, according to the people, who spoke on condition of anonymity because the investigation is ongoing.

At Nasdaq, Thursday’s plunge set off MarketWatch, an internal system that alerts regulators to problems. Regulators are still sifting through the data for irregularities. A Nasdaq spokesman declined to comment.

NYSE spokesman Raymond Pellecchia said the Big Board is working with regulators but declined to comment further.

"Right now, there is no way to know what is happening in this marketplace," Kaufman said.

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The Pentagon is telling bidders for a major tanker project to be ready to start the contract on Nov. 12.

The contract is worth at least $35 billion to build 179 refueling jets. Bids are expected from Boeing Co. and European Aeronautic Defence and Space Co.

Pentagon spokesman Geoff Morrell said Tuesday that the Pentagon still hopes to award the contract in the fall, but that it set the Nov. 12 start date so that bidders could plan around it.

The request for proposals calls for the contract to be awarded on Aug. 12. That has appeared unlikely since the Pentagon extended the bidding deadline by two months, until July 9, so that EADS could bid.

The Nov. 12 date was set in an update on the tanker posted on a federal procurement website on Thursday. It includes a question about the estimated date the contract will be awarded. The answer says bidders should "prepare their proposals assuming a contract start date" of Nov. 12. Morrell said the contract start date is not the same as the date it will be awarded.

The Pentagon has said it will try to compress the time between when the bids come in and when it picks a winning bidder.

The Air Force needs to replace its KC-135 refueling tankers, which date to the 1950s. It has been trying to pick someone to make the new tanker since 2003.

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The Wichita school board on Monday will consider a list of more than $7.5 million in proposed budget cuts that would include laying off 117 workers.

USD 259 Superintendent John Allison announced the possible cuts Thursday as the district wrestles with cutting $25 million from its 2010-11 budget. The district has been notifying affected personnel this week of the possible jobs cuts.

“This has been difficult as we have informed employees that they may no longer have a job because it not only affects them, it affects their families and the economy,” Allison said in a statement. “We can’t make these kinds of cuts without cutting positions or affecting programs. Each cut that we make has a direct impact on students, teachers and our schools.”

The district is proposing to eliminate 44 learning services staff positions, 15 facilities staff members, five safety services personnel and three human resources positions, among others.

Other proposed cuts include eliminating the district’s drivers’ education program, eliminating job sharing positions at the elementary level and closing the Metro-Midtown Alternative High School, which was announced April 14 and could save $1 million.

To date, the district has recommended $14.2 million in cuts, which leaves another $10.7 million to slash.

Allison notified district employees of the proposed cuts in an e-mail Thursday afternoon.

“It is with great sadness that I share with you the next phase of budget reductions,” Allison wrote.

Allison said the proposed cuts were not taken lightly.

“I said from the beginning of this very difficult budget process that we would make necessary cuts as far away from the classroom as possible, and I can assure you we have worked to do just that,” Allison wrote. “However, we have now reached the point that people and classrooms are directly impacted.”

The district will be finalizing its list of cuts in the coming weeks as it prepares to adopt its budget for next year.

Proposed phase one budget cuts include changing start and end times at eight schools beginning next year, which represents $2.5 million in savings.

Phase two reductions include reducing overtime, eliminating the remaining four school resource officers at the district’s middle schools and suspending the Grow Your Own Teacher program. Those proposals equal $4.2 million.

Allison’s recommendations Thursday represent two additional phases of cuts, one totaling $5.2 million and the other $2.3 million.

Additional cuts will be shared in May, along with recommendations concerning the reductions schools must make. The district won’t know the total amount it has to cut until the Kansas Legislature finalizes its budget.

USD 259 is Wichita's third-largest employer with 9,343 employees district wide, according to a Wichita Business Journal list that published in January.

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