Monthly Archives: January 2009

Bremerton Port Floats a Boat Show at New Marina

By Rachel Pritchett

rpritchett@kitsapsun.com

BREMERTON

Now, in the depths of winter, could be time to think about spring and getting out on the water.

To help with that, a brand-new Bremerton Boat Show is scheduled this weekend at the Bremerton Marina. It features two dozen craft ranging from trailered recreational boats to at least one mega-yacht, which is on sale, no less. Add to that some fishing boats worth of envy like a couple Wellcraft Coastals, and, of course, some beautiful sailboats.

All are used, including that 78-foot big boy, owned by a multimillionaire who found an even bigger boat. This one was at $2.5 million but a million has been sliced off the price, said Scott Alprin, owner of Emerald Bay Yachts.

The boat show is free, and the public can board all the crafts. Boats are coming from brokerages from Kingston to Gig Harbor.

Steve Slaton of host and marina owner Port of Bremerton hopes 1,000 people will come to the show and get interested in visiting the marina and breakwater.

“It’s more than a place for rich people to park boats,” he said.

The temperature is expected to hit a balmy 52 degrees Saturday, which just may be enough to spur boat lovers to dream of Boating Day.

The show is being billed as having “affordable boats close to home,” and comes one week before the heralded Seattle Boat Show.

“But there isn’t a lot that you can buy there, and afford,” Alprin said.

Slaton, the port’s director of marine facilities, hopes the boat show will become an annual event.

Also in the works is the first-ever Kitsap Harbor Festival, slated for Memorial Day weekend. That event will straddle the Bremerton and Port Orchard marinas, and will offer boat shows, sailing regattas and “poker runs,” were boaters pick up playing cards at different destinations, and the highest hand wins.

The Lone Sailor statue at the Bremerton Marina will be dedicated that weekend.

Eventually, Slaton sees that festival incorporating other marinas in Kitsap — public and maybe even private.

The expanded Bremerton Marina opened last year and has about 220 permanent slips and an additional 100 slips for visitors. About 23 percent of the permanent slips are rented. Some tenants are local, some are from as far away as Minnesota, and some are from Seattle. The marina, on the redeveloped Bremerton waterfront near the Bremerton ferry terminal, also has room for 20 liveaboards, according to Slaton.

 

Bremerton Boat Show

What: New boat show featuring two dozen used boats, big and small, sail and motor

When: Friday, Saturday and Sunday

Hours: Noon to 6 p.m. Friday; 10 a.m. to 6 p.m. Saturday; 10 a.m. to 4 p.m. Sunday

Cost: Free

Information: www.bremertonboatshow.com, (360) 479-6060 or (360) 479-4100. For information on the upcoming Kitsap Harbor Festival, call (360) 377-3041 or e-mail ca@bremertonmsa.org.

Bremerton Port Approves Retooling of Openness Policy

By Rachel Pritchett

rpritchett@kitsapsun.com

BREMERTON

Port of Bremerton commissioners on Tuesday approved changes suggested by citizens to a new policy for port openness.

Whether the policy repairs bitterness about an earlier port tax to build the Bremerton Marina that caught many by surprise remains to be seen.

“I think we need to wait and see the effect,” said John Hanson, chair of a citizens’ committee that worked on the policy.

Commissioner Bill Mahan said, “This was all the result of the commission answering the upsetness (sic) in the community about how that was done, to make sure that that would never happen again.”

The policy can be read at the port’s Web site. It outlines ways the port plans to improve outreach to the public, including airing port commission meetings on the local cable-access station.

It also addresses improvements in notifying the public of port events and activities. The port wishes to take public notification steps that are beyond what the law requires, the policy states.

Still other tenants of the new policy address encouraging more public participation in port business. One states the public shall be given an opportunity to comment on any action at port meetings.

At Tuesday’s meeting, port attorney Gordon Walgren told commissioners that now that it’s policy, they’ll have to allow for input on any action item “no matter how difficult it might be for you to do that.”

The citizens’ panel — which also included Robert Moyer, Ardena Miller, Roger Jensen and Clarke Coulter — added a requirement for periodic reports to the community.

The panel also asked that port leaders meet regularly with representatives of port operations such as the airport, marinas and industrial park, Hanson said.

And, the panel stated, if commissioners decide to issue bonds to pay for projects, they must put out a press release and put information on the port Web site.

“You’re trying to avoid a taxpayer surprise,” Hanson said.

Mahan called the policy “one of the most comprehensive ones that you’ll find in the United States.”

Good Wednesday to You; Not So Good for Kitsap’s Kart Trax

By Rachel Pritchett

rpritchett@kitsapsun.com

EAST BREMERTON

The lights are off, the red-and-blue crash bumpers stand idle and the sign on the locked door at Kart Trax Formula Racing reads: 

“We are sorry for the inconvenience, but we have gone out of business. Thanks to all who supported us this past year.”

After a year running a go-cart track for both delighted youngsters and the young at heart, owners Shawn and Rick Wilson have called it quits.

The couple declined an invitation to talk with the Kitsap Sun, except to say the facility officially closed Dec. 15, on the first-year anniversary of the business.

According to a Kitsap Sun article written when the business opened, Rick Wilson’s love for the sport led the couple to open the track. It sat on 22,000 square feet of indoor space at a Wheaton Way strip mall across from K mart.

They even talked at the time of doubling their space, if the business warranted it.

The electric-driven go-carts were designed to look like famous racing cars belonging to drivers like Carl Edwards and Michael Waltrip.

The facility also had video games and other diversions.

Tuesday Dow Off 52 on Earning Jitters, at 8,426 at 11:18 Pacific

NEW YORK (AP) — Wall Street extended its losses Tuesday, sending the Dow Jones industrials down for a fifth straight session as worries about the recession’s impact on corporate profits dogged the market.

Investors shied away from placing big bets after aluminum giant Alcoa Inc. reported late Monday that it lost $1.19 billion during the fourth quarter as demand for aluminum plunged. Investors saw the report as a troubling example of the range of companies being hit hard by the recession.

“Alcoa is a harbinger of things to come,” said Jeff Buetow, senior portfolio manager at Portfolio Management Consultants. “It was a horrible report.”

The market got some upbeat news that lent support to stocks early in the day before sellers re-entered the market. The Commerce Department said the trade deficit fell to its lowest level in five years. The deficit narrowed 28.7 percent to $40.4 billion in November from $56.7 billion in October as demand for oil dropped by a record amount.

Though demand for imports has dropped, investors are more concerned by the waning need for American products overseas as economies around the world suffer. The fear is that as companies struggle with falling global demand, it will be more difficult for the economy to rebound.

Questions about corporate earnings are likely to dominate trading in the coming weeks. Investors are watching closely for companies’ expectations for business conditions in 2009. Computer chip maker Intel Corp. and drug company Genentech Inc. are among the companies reporting results this week.

The market also will get an earlier-than-expected reading on the financial sector this week when JPMorgan Chase & Co. reports earnings on Thursday — nearly a week ahead of schedule. Investors are fearful of another year of multibillion dollar losses among financial companies, as analysts forecast mounting problems in credit card and commercial real estate portfolios.

Meanwhile, Citigroup Inc. and Morgan Stanley are expected to announce a deal soon to combine their brokerage operations as Citi struggles to raise additional cash.

“We’re sort of in a wait-and-see mode,” said Carl Beck, partner at Harris Financial Group. “The optimism that we saw at the beginning of the year has sort of been put on hold as people await earnings reports over the next couple of weeks.”

In early afternoon trading, the Dow fell 75.66, or 0.89 percent, to 8,398.31.

Broader indexes also fell. The Standard & Poor’s 500 index fell 6.90, or 0.79 percent, to 863.36, while the Nasdaq composite index fell 8.26, or 0.54 percent, to 1,530.53.

The Russell 2000 index of smaller companies fell 0.16, or 0.03 percent, to 468.64.

Losing stocks outnumbered gainers by about 8 to 7 on the New York Stock Exchange, where volume came to 652.8 million shares.

Bond prices fell. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.32 percent from 2.31 percent late Monday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.12 percent from 0.06 percent late Monday.

The dollar was mixed against other major currencies, while gold prices advanced.

Light, sweet crude slipped 17 cents to $38.91 on the New York Mercantile Exchange after tumbling 8 percent Monday.

The Dow fell for a fourth straight session on Monday on fear that corporate profit reports will signal a recovery in the economy is further off than originally anticipated. The blue chips shed 125 points, and broader stock indexes fell more than 2 percent. The market’s retreat Monday followed its worst week since November. However, stocks are still up sharply from their lows of Nov. 20.

Beck said while investors know fourth-quarter earnings will be bad they remain skittish.

“You’ve got the lingering shroud of doubt in people’s minds, ‘Is it going to be worse than already lowered expectations?”’ he said.

On Tuesday, Federal Reserve Chairman Ben Bernanke said the stimulus package being crafted by President-elect Barack Obama and Congress could provide a “significant boost” to the sinking economy. During a speech in London, he also said “more capital injections and guarantees may become necessary” to stabilize financial markets and spur more lending. Obama is pushing for an economic stimulus that includes big tax cuts and has an estimated price tag of about $800 billion.

Also Tuesday, the House Financial Services Committee scheduled a hearing on the financial bailout fund in advance of legislation proposed by committee Chairman Barney Frank, D-Mass., that would place tough restrictions on recipients of the money and require spending to reduce mortgage foreclosures.

Obama on Monday asked President George W. Bush to request the money so that it can be at the ready when Obama takes office next week. Bush agreed to notify Congress. Obama said he would fundamentally change the way the remaining funds are allocated. He said some relief would be directed toward housing and small business.

Among energy stocks, Exxon Mobil Corp. rose $1.33 to $77.85, while Chevron Corp. rose $1.03 to $71.85.

Tech stocks also rose. Dell Inc. rose 9 cents to $10.74, while Microsoft Corp. rose 29 cents to $19.76.

Asian markets tumbled, hurt by reports that Sony Corp. is sinking into its first yearly operating loss in 14 years on declining sales for digital cameras, flat-panel TVs and other gadgets. Japan’s Nikkei stock average fell 4.79 percent. Hong Kong’s Hang Seng index dropped 2.17 percent.

Britain’s FTSE 100 fell 0.61 percent, Germany’s DAX index fell 1.75 percent, and France’s CAC-40 declined 1.49 percent.

Fed Deficit Highest Ever, and the Year’s Just Begun

WASHINGTON (AP) — The Treasury Department says the federal government already has run up a record deficit of $485.2 billion in just the first three months of the current budget year.

The deficit is on track to surpass $1 trillion for all of fiscal 2009 and some economists believe it could go much higher.

The Treasury says the deficit for December totaled $83.6 billion, a sharp deterioration from a year ago when the government managed a surplus of $48.3 billion.

All the red ink is occurring because of the massive spending on the $700 billion financial rescue program and a prolonged recession which has depressed tax revenues.

Stocks Tumble on Oil News

NEW YORK (AP) — So much for the Santa Claus rally.

A run-up at the end of the 2008 that had some investors hoping the worst was over is crumbling on fear that corporate profit reports arriving this week will signal a recovery in the economy is further off than Wall Street had hoped.

The Dow Jones industrial average fell for the fourth session Monday as oil prices tumbled and as worries about the financial sector grew. So far this year, the Dow is down 3.5 percent. Stocks are still up sharply from late November but investors are quick to look for even subtle shifts in the market after the terrible run for stocks last year.

A drop in oil added to the pessimism Monday. Crude fell 8 percent to a new low for the year as investors bet economic weakness would curb demand. Wall Street normally welcomes falling oil as a boost for consumers who pay less to put gas in their car, but steep drops can touch off deeper fears in the fragile psyche of the market: if oil falls too much it’s a sign that the global economy is showing no signs of improvement.

Stocks have lost ground since the Dow rose 19.6 percent from late November to the first part of 2009 — a year-end advance often referred to as a Santa Claus rally. With so many unknowns about when the economy might recover, analysts say most investors prefer to wait until they get a better read on companies’ quarterly numbers and, more important, their forecasts.

Wall Street is expecting fourth-quarter and full-year earnings will be particularly bleak, especially after several companies warned last week that they are being hit hard by the recession. Aluminum producer Alcoa Inc., which last week announced it would slash production, fell again Monday after an analyst lowered his rating on the stock. Alcoa said after the market closed that it lost $1.19 billion during its fourth quarter as demand for aluminum plunged.

Financial stocks also declined as investors looked to Citigroup Inc. and Morgan Stanley, which could announce a deal as soon as Wednesday to combine their brokerage operations. The potential tie-up underscores the troubles some banks are still having with tattered balance sheets, and a prominent analyst said Citigroup might still need to raise cash. Comments from President-elect Barack Obama that he would consider using some of the remaining money from the government’s $700 billion bailout fund added to investors’ nervousness about the financial industry.

“I think that the biggest concern right now is the economy and whether this thing is going to get worse or it’s going to get better,” said Bernie McGinn, chief executive of McGinn Investment Management.

The intensity of the fear that permeated the market and provoked the heavy selling of September, October and November has lessened, McGinn said, but investors are still hesitant to rush into the market. Monday’s decline came on light volume, indicating an absence of buyers, not a rush of sellers.

“The level of anxiety and the level of fear has moderated some, but it sure as heck hasn’t turned into optimism,” McGinn said.

The Dow Jones industrial average fell 125.21, or 1.46 percent, to 8,473.97 after being down as much as 178. It was the lowest close for the Dow since Dec. 24 and the blue chips are down 302 points for the year.

Broader stock indicators also declined. The Standard & Poor’s 500 index fell 20.09, or 2.26 percent, to 870.26, and the Nasdaq composite index fell 32.80, or 2.09 percent, to 1,538.79.

The Russell 2000 index of smaller companies fell 12.50, or 2.60 percent, to 468.80.

Declining issues outpaced advancers by more than 3 to 1 on the New York Stock Exchange, where consolidated volume came to 4.64 billion shares compared with 4.13 billion shares traded Friday.

The market’s decline Monday followed its worst week since November. The Dow slid 4.8 percent last week. Still, the index remains up 12.2 percent from Nov. 20 when it closed at its lowest level since 2003.

Stocks fell Friday after the Labor Department reported the nation’s unemployment rate jumped to a 16-year high of 7.2 percent in December. The rise in the number of people without work has raised concerns about the health of consumer spending, which accounts for more than two-thirds of the nation’s economic activity.

Bond prices were mixed Monday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 2.31 percent from 2.40 percent late Friday. The yield on the three-month T-bill, considered one of the safest investments, was slightly lower from Friday at 0.06 percent.

Light, sweet crude fell $3.24 to settle at $37.59 a barrel on the New York Mercantile Exchange.

The dollar rose against other major currencies, while gold prices fell below $820 an ounce for the first time in a month.

Many investors aren’t willing to place big bets on the market without a better read on companies’ expectations for the economy. Analysts predict more companies will be forced to reduce or withdraw their forecasts for the year given how much uncertainty remains about when the economy might recover.

“There will probably be some reductions in guidance or some watering down of guidance,” said Ken Mayland, president of ClearView Economics. “That is probably going to prove to be a bit unnerving.”

Wall Street also was anxious about comments from Obama. He said Monday he will fundamentally change the way the remaining $350 billion of the financial bailout fund is allocated. He said some relief would be directed toward housing and small business. That added to investors’ unease about financial stocks, analysts said.

“Anything that takes away from buying distressed securities is perceived as a negative for the financials,” said Richard Campagna, chief investment officer at 300 North Capital. “It’s just more uncertainty.”

Obama on Monday asked President George W. Bush to request the money so that it can be at the ready when Obama takes office next week. Bush agreed to notify Congress.

Investors are also awaiting more details of Obama’s stimulus package, which includes big tax cuts and has an estimated price tag of nearly $800 billion.

Among stocks, Alcoa fell 75 cents, or 6.9 percent, to $10.06. Chevron Corp. fell $2, or 2.8 percent, to $70.82 on the decline in oil.

Citigroup dropped $1.15, or 17 percent, to $5.60, after falling as much as 20 percent on the day. Oppenheimer & Co. analyst Meredith Whitney wrote in a note Monday that while the deal with Morgan Stanley will provide “some near-term capital relief, more likely will be needed.” Citi was by far the steepest decliner among the 30 stocks that make up the Dow industrials.

Morgan Stanley fell 27 cents, or 1.4 percent, to $18.79. Among the other big decliners, Bank of America fell $1.56, or 12 percent, to $11.43.

Overseas, Britain’s FTSE 100 fell 0.50 percent, Germany’s DAX index fell 1.34 percent, and France’s CAC-40 lost 1.62 percent. Hong Kong’s Hang Seng index dropped 2.83 percent. Markets in Japan were closed for a holiday.

Obama Team Promises Changes in Bailout Uses

WASHINGTON (AP) — Seeking to reassure wary lawmakers, President-elect Barack Obama’s top economic adviser told congressional leaders Monday that Obama intends to broaden the goals of the remaining $350 billion financial bailout and impose tougher restrictions and oversight on how the money is spent.

Larry Summers, Obama’s choice for National Economic Council director, told House and Senate leaders in a letter from the transition team that the need to tap the second half of the $700 billion fun is “imminent and urgent.”

The letter spells out how Obama intends to use the Troubled Asset Relief Program to help community banks, small businesses, consumers and homeowners as well as large financial institutions. He also specified that Obama intends to launch a “sweeping effort” to mitigate foreclosures.

Obama on Monday asked Bush to seek the remaining bailout money so that Obama can have it at his disposal promptly after taking office Jan. 20.

Summers’ letter included tacit acknowledgment of bipartisan congressional dissatisfaction with the manner in which the Bush administration has administered the first half of the funds.

“The president-elect also shares the frustration of the American people that we have seen too little effect from this rescue plan on jobs, incomes, and the ability of responsible homeowners to stay in their homes,” Summers wrote. “He believes the American people are right to be angry with the way this plan has been implemented.”

The White House said that Bush agreed to notify Congress after Obama requested the money. Congress has 15 days to reject the request, but efforts were afoot to have the money available for Obama much sooner.

The request would give Obama, who takes office Jan. 20, not only the opportunity to get quick access to the money, but also to change the program’s goals and conditions.

Obama’s request comes as Democrats in the House of Representatives prepared to act on legislation that has some of the same aims laid out in summers letter.

Earlier Monday, Bush told reporters that he would not request the money form Congress unless Obama “specifically asked me to make it.” Obama called Bush at 10:25 a.m., EST, after the news conference ended, Obama transition officials said.

Bush’s assertion that the decision to tap the money rests with Obama was an acknowledgment of what has been an extraordinary ceding of power to the incoming administration. In fact, when it comes to the economy, Bush in recent weeks has let Obama be the driving force behind most recovery efforts.

A vote in Congress is likely soon, possibly this week, several senators predicted after a briefing from Summers Sunday on the Wall Street bailout, as well as on Obama’s separate plan for roughly $800 billion in spending and tax breaks to spur the economy.

At his news conference, Bush said, “I readily concede I chucked aside some of my free market principles when I was told by chief economic advisers that the situation we were facing could be worse than the Great Depression.”

But he credited the program for improving the lending environment, saying that “lending is just beginning to pick up.”

Congress approved the program in October, authorizing $700 billion to assist the financial industry.

The current administration has already committed the first $350 billion, using it to inject capital into banks and to bail out ailing major companies considered too big to fail without further damage to the economy. Money from the program has gone to insurance giant American International Group Inc. and automakers General Motors Corp. and Chrysler LLC.

Lawmakers from both parties have criticized the administration’s handling of the fund, in part because the financial institutions that have received the unconditional sums of money have done little to account for it.

Treasury Secretary Henry Paulson originally promised the money would be used to buy up toxic mortgage-related securities whose falling values have clogged credit markets and brought many financial institutions to the brink of failure.

A request to Congress would force a vote within days on whether to block the funding, but the deck is stacked in favor of Bush and Obama winning release of the remaining $350 billion. Congress can pass a resolution disapproving the request, but the White House could veto the resolution; then, just one-third of either chamber would be needed to uphold the veto and win release of the money.

Oil Prices Tumble on Eve of Earnings Season

SIOUX FALLS, S.D. (AP) — Falling crude demand in the world’s largest consuming nation drove oil prices Monday to a new low for the year as the U.S. enters a corporate earnings season expected to be fraught with bad news.

The strained economy outweighed factors that would normally boost the market — Mideast tensions, signs that OPEC was implementing large-scale production cuts, the ongoing Gazprom-Ukraine gas dispute and a winter season expected to deliver the coldest weather in a decade.

“It’s amazing what the market’s ignoring,” said Phil Flynn, an analyst at Alaron Trading Corp. “That really tells you the story of how bearish this is.”

Light, sweet crude for February delivery fell 6.6 percent, or $2.71, to $38.12 a barrel on the New York Mercantile Exchange. The contract on Friday fell 87 cents to settle at $40.83.

After 10 straight days in which prices rose, the average cost for a gallon of retail gasoline finally fell overnight, catching up to crude markets that began to give way a week ago.

“Clearly, the focus this morning is back on the macroeconomics, and the concern that the demand for oil is just not going to be there any time soon, and there’s going to be plenty of oil out there,” Flynn said.

The Department of Energy last week reported bigger than expected inventories of oil, natural gas and gasoline, suggesting demand for energy continues to erode.

Traders are buying crude and putting into storage in hopes that it will be worth more at a later date. Oil tankers are being leased at sea. Storage space for crude became very hard to find at a key delivery point when the January contract expired a few weeks ago as unwanted oil flooded the market.

The contract price spread is creating an enormous incentive to build inventory, said oil trader and analyst Stephen Schork.

“Little wonder then why overall crude oil supplies have since jumped to a 35-week high,” Schork wrote in his daily publication, The Schork Report.

Demand, however, continues to be weak.

The nation’s largest manufacturers have slashed spending on fuel and last week, aluminum producer Alcoa said it was cutting 13,500 jobs and making deep production cuts.

Alcoa, chip maker Intel and biotech company Genentech will report fourth quarter results this week, giving investors a glimpse of how deep the current recession may be.

“Given that we’re likely to see quite a few rather poor fourth quarter earnings reports, downward pressure will continue to be exerted on oil,” said Victor Shum, an energy analyst with consultancy Purvin & Gertz in Singapore. “Worries about the macroeconomic outlook will continue to constrain oil.”

Oil prices fell 17 percent last week, weighed by fears that rising U.S. unemployment will undermine crude demand.

The Labor Department said Friday that employers slashed 524,000 jobs in December and 2.6 million jobs for all of 2008. The nation’s unemployment rate jumped to 7.2 percent, the highest since 1993.

Meanwhile, the national retail average price for a gallon of regular gas fell 0.2 cents to $1.79 a gallon overnight, according to auto club AAA, the Oil Price Information Service and Wright Express. That is about 13 cents a gallon above what it was a month ago and about $2.32 below last July when prices peaked at $4.11 per gallon.

Prices bottomed out at the end of 2008 around $1.61 a gallon.

Raymond James analyst Darren Horowitz said in an analyst note that while the recession is dominating short-term prices, Saudi Arabia’s weekend announcement that it would cut oil output by about 300 million barrels per day below its target may lend support in the long term.

There are signs that the Russia-Ukraine gas dispute could be nearing an end.

Gazprom, Russia’s gas company, said that Ukraine signed a deal Monday to allow independent monitors to track natural gas supplies from Russia to Europe with no additional conditions. The agreement could open the way for a resumption of gas shipments to Europe through pipelines that cross Ukraine.

In other Nymex trading, heating oil futures slid less than a penny to $1.4838 a gallon, while natural gas for February delivery rose 6.3 cents to $5.579 per 1,000 cubic feet. Gasoline futures dropped 2 cents to $1.09.

In London, February Brent crude fell 95 cents to $43.47 a barrel on the ICE Futures exchange.

Land Title of Kitsap Announces Dividend

By Kitsap Sun staff

SILVERDALE

Despite a dismal economy, Land Title Company made a profit in 2008 and is distributing a cash dividend of $2.50 per share.

“We appreciate all the business we have received over the years and we will continue to provide exceptional service with hopes for a prosperous 2009,” said Gene Kennedy, Land Title Company’s president and CEO.

Land Title Company recently celebrated its 40th year in business and has four offices located in two counties: Shelton and Belfair in Mason County and Port Orchard and Silverdale locations in Kitsap County.