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U.S. and global economies will continue to grow
Special to the Times
The U.S. and global economies will expand strongly during the rest of 2004 and into next year, according to the latest analysis by The Conference Board. The passing of the early acceleration phase of the business cycle has led to the misperception that the U.S. and global economies are at risk, but this is not the case. “This phase is quite normal,” says Gail D. Fosler, The Conference Board’s Executive Vice President and Chief Economist, “we will see strong growth rates return shortly and continue in 2005.” Industrial growth has been rising at a 5.6 percent rate in the U.S. and a 5.2 percent rate globally. Growing from a near standstill in mid-2003, the sudden acceleration in economic growth rates in the past nine months has put tremendous pressure on the global supply chain, particularly in key industrial commodities like steel, copper, aluminum, and energy. Global energy markets and the U.S. labor market are also tight, and the strength in industrial activity is likely to spur higher inflation and higher interest rates in the U.S. and elsewhere. “Overall, there appears to be little risk of 1970s-style inflation that would cause the Federal Reserve Board to raise interest rates suddenly and substantially,” says Fosler in the latest issue of StraightTalk, her newsletter prepared exclusively for members of The Conference Board. “More likely is that both inflation and interest rates will rise slowly but persistently in the foreseeable future. The Conference Board forecast shows the core consumer price index staying close to 2.5 percent this year and heading toward 3.5 percent by the end of 2005.” Persistent inflationary pressures means the Federal
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U.S. District attorney to speak
Reserve does not have the same latitude it had in the 1990s to cut rates when the U.S. or the global economies ran into trouble. Prices and wages are not nearly as rigid as in the ‘70s, but many of the structural forces – the expanding global supply chain, information and communications technology, declining inflation rates in healthcare, etc. – are probably reaching the point of diminishing returns from the perspective of price stability.
Tight labor market conditions affect inflation because higher wages tend to drive up services prices, which constitute 60 percent of all consumer spending. Information and communications technology is an important source of productivity gains and will keep prices low. But a low unemployment rate this early in the recovery suggests that wage pressures, which are already beginning to build, will continue. The Conference Board’s
latest forecast shows that services prices will begin to pick up this wage pressure, moving from approximately a 3 percent annual increase currently to over 4 percent by mid to late 2005. These rates, when combined with goods prices in the 3 percent range, point to at least a 4 percent overall rate by late next year – an uncomfortable position for the Fed. The Conference Board, born out of a crisis in industry in 1916 is a group of concerned business leaders,
representing a variety of major industries, concluded that the time had arrived for an entirely new type of organization. The Conference Board is not another trade association or a propaganda machine. It is a respected, not-for-profit, nonpartisan organization that would bring leaders together to find solutions to common problems and objectively examine major issues having an impact on business and society.
Leadership Laredo taking applications
Special to the Times
Applications for the 20042005 class of Leadership Laredo are currently being accepted. A recruitment dinner has been scheduled for September 2, at the Executive Club of Laredo. The evening’s keynote speaker will be United States Attorney for the Southern District of Texas, Michael T. Shelby. In 1986, the Laredo Alumni of Leadership Texas, in conjunction with the Laredo Chamber of Commerce, established Leadership Laredo as a program to identify and train future leaders of our community. Leadership Laredo participants attend a series of several structured seminars and related events designed to focus on the most critical issues of our time. individual tickets for the general public. Contact the Laredo Chamber of Commerce at 956-722-9895 for more information. The evening’s keynote speaker, Michael T. Shelby, was born in Central Texas and raised in Houston. He attended Texas A&M University on a debate scholarship and graduated in l981 with a Bachelor of Science degree. He received his law degree in 1984 from the University of Texas School of Law, where he was the recipient of the Albert Pierson Jones Advocacy Scholarship and served as Chairman of the Board of Advocates. He was active in the Law School’s competitive Moot Court program, and he remains the only student to win the prestigious Hildebrand Moot Court Competition twice.
Laredo businesses gear-up for electricity ‘shopping” season
Staff reports
Businesses in Laredo were among the first to embrace the state’s electricity choice program in January 2001 by signing energy management contracts with newly formed retail electric providers. Now these same commercial and industrial customers, from manufacturers and office buildings to restaurants, churches and schools, may be faced with choosing to renew these contracts or switch to another service provider. “A business with an energy contract coming up for renewal should take a good, hard look at it to make sure the terms are best suited for its needs,” explains Chris Harwood with Constellation NewEnergy. According to Harwood, rising natural gas prices have made fixed-price contracts more attractive for commercial and industrial electricity users such as midsized office buildings, restaurants and small shopping centers. Under terms of a fixedprice contract, commercial and industrial customers pay the same rate for electricity throughout the contract term, regardless of market conditions. Harwood’s advice for businesses? “Do your homework. The monthly savings in lower electricity costs can add up over the course of the year,” he says. Commercial and industrial customers shopping their electricity use should consider the following: Ask About the Company’s Credit Rating. Of the 70-plus retail electric providers in Texas, only a handful operate with the stability of the highest level of investment-grade credit. Keep Your Options Open. In addition to offering multiyear terms, your retail electric provider should be open to terms as short as a few months. Use Technology to Your Advantage. Today’s business owners can access Internet-based energy tracking services to bring real-time energy information to their desktop, 24 hours a day, seven days a week. Ask For Referrals. Don’t hesitate to ask for customer references, particularly from businesses in your industry space.
Michael T. Shelby
Participants emerge from the program with an enhanced knowledge base as foundation for future community involvement. Applications may be downloaded at www.laredochamber.com/eve ntsandproject/leadership laredo/index.htm.laredo Table sponsorships for the recruitment dinner are available now, as well as
General Growth Properties to buy The Rouse Company merge
Times staff report
General Growth Properties Inc., the company that manages Mall del Norte, has announced that The Rouse Company will become a part of General Growth in a multibillion dollar deal. The Rouse Company developed and owns North Star Mall in San Antonio. Mall del Norte is owned by Enterprise Asset Management Inc. from New York. Under the terms of the agreement, which has been approved by each company’s board of directors, Rouse shareholders will receive $67.50 per share in cash. The total consideration will be about $12.6 billion including the assumption of about $5.4 billion of existing debt. “This transaction recognizes the extraordinary values that have been built by The Rouse Company since its founding in 1939,” said Anthony Deering, chairman and chief executive officer of Rouse. “The
August 30, 2004
This article was previously published as a daily article in the Laredo Morning Times combination of our premier retail properties with those of General Growth will create the most powerful portfolio of retail assets in the United States.” John Bucksbaum, chief executive officer of General Growth, agreed. “In the past, I have explained why our principal focus is to acquire, develop and manage regional shopping centers,” he said. “ We want to continue to build and enhance our existing national platform. In addition, I have always stressed that we strive to acquire centers that will continue to improve and be strong three, five and ten years from now. The Rouse Company offers all of this, and more.” The transaction is expected to close in the fourth quarter of 2004, and is subject to the approval of Rouse shareholders, as well as
customary closing conditions. Rouse became a public company in 1956. Through its affiliates, the company operates more than 150 properties, encompassing retail, office, research and development, and industrial space in 22 states. It owns or has ownership interests in 37 regional malls, four community centers and six mixed-use projects. The retail centers include Water Tower Place, Chicago, Ill.; Oakbrook Center, Oakbrook, Ill.; Fashion Show Mall, Las Vegas, Nev.; Park Meadows Mall, Denver, Colo.; and Faneuil Hall Marketplace, Boston, Mass. General Growth Properties is a publicly traded Real Estate Investment Trust. GGP and its predecessor companies have been in the shopping center business for fifty years. The second largest regional mall REIT, General Growth owns, develops, operates, and/or manages shopping malls in 41 states.
SBA to have meeting about fixed rate loan financing for small businesses
SAN ANTONIO — The U.S. Small Business Administration, San Antonio District Office will be conducting a one hour meeting for small business owners on September 9,. The meeting, “504 Fixed Rate Loan Financing for Long Term Growth,” will be from 12:15 p.m. to 1:15 p.m., and will be at the SBA office at the North Park Corporate Center, 17319 San Pedro Ave., Bldg. 2, San Antonio. Small business owners will have an opportunity to meet with SBA loan officers, participating SBAlenders, and Certified Development Companies and discuss fixed asset financing and other capital needs. The maximum 504/CDC loan is $1.3 million for qualifying businesses who meet a public policy goal. Through the SEA’s 504/CDC Loan Program, small businesses benefit from long-term, fixed-rate financing for major fixed assets such as land and buildings, and long-term machinery and equipment. There is no cost to attend. Call (210) 403-5917 to reserve a place at the meeting.
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August 30, 2004
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