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Archive for May, 2010

Friday Stocks Climb a Day After Biggest Drop in a Year

Friday, May 21st, 2010

Dow Jones Industrial Average up 65 points at 10,130 so far this morning.

NEW YORK (AP) — Stocks turned higher a day after posting their biggest drops in more than a year.
Trading has been volatile Friday and there are still worries about Europe is handling its debt crisis. Analysts said a bounce back after the slide Thursday wasn’t surprising.
The Dow Jones industrial average rose about 115 points in midday trading after falling below 10,000 in morning trading.
The volatility comes after major indexes entered “correction” mode, having dropped more than 10 percent from their 2010 highs set last month.
Investors again looked to Europe for direction. The German parliament approved the country’s share of a $1 trillion plan to help contain debt problems in the European Union. Major stock indexes in Europe were mixed but pulled well off their lows. Traders have been worried that stronger countries like Germany and France will be saddled with heavy debts to help weaker EU countries.
The euro rose to $1.2543 from $1.2464. The 16-nation currency has been a big driver of trading for weeks but many traders have been skeptical that any advances will be short-lived.
World markets have been falling on concerns that European debt problems will slow or maybe even stop a global rebound. The fear is that huge deficits in countries including Greece and Portugal will cause a wave of bad debt to race through the world’s financial system. Even if that is prevented, the prospect of heavier borrowing and sluggish growth has traders concerned.
It’s impossible to know whether the market is in for more than a correction but analysts say that the fear hasn’t turned to panic like it did during the market’s slide in late 2008 and early 2009.
“The likelihood of a double dip here is, I think, being really exaggerated,” said Stu Schweitzer, global markets strategist at J.P. Morgan’s Private Bank in New York, referring to the prospect of another recession.
Schweitzer also expects the market will stabilize.
“It’s a very tough call to make, but I come down on the side that it’s more likely to be a correction,” he said.
In midday trading, the Dow rose 105.95, or 1.1 percent, to 10,174.42. The broader Standard & Poor’s 500 index rose 15.61, or 1.5 percent, to 1,087.20. The Nasdaq composite index rose 33.55, or 1.5 percent, to 2,237.56.
The Dow had last fallen below 10,000 on May 6 when it lost nearly 1,000 points in an afternoon rout that was the biggest ever intraday slide. Regulators have said they are still unclear on what caused the brief drop.
The Dow tumbled 376 points Thursday. The Dow and the S&P 500 index fell more than 3 percent, while the Nasdaq lost 4.1 percent. The drop has erased the gains major indexes had made in 2010.
Bond prices slipped after surging Thursday when investors dumped anything seen as risky, including stocks and commodities. The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 3.23 percent from 3.22 percent late Thursday.
Crude oil dropped 96 cents to $69.84 per barrel on the New York Mercantile Exchange.
The Chicago Board Options Exchange’s Volatility Index fell 14.5 percent. The VIX, which is known as the market’s fear gauge, closed Thursday at its highest level since March 2009. The jump signaled that traders were bracing for more drops in the market.
Even with the drop of 12 percent from its 2010 high, the S&P 500 index is still up 58 percent from the March 2009 bottom and is down 31.5 percent from its record close of 1,565 in October 2007.
Corrections can be scary but they can be good for markets. Analysts say major stock indexes had become overheated in their climb from a 12-year low in March 2009. Corrections also aren’t unusual. Drops of 10 percent occur in most years and don’t necessarily that stocks will keep sliding.
“We don’t think there is any predictability that just because we’ve had a 10 percent correction now that suddenly we’re in for another 10 percent drop,” said Bill Urban, principal with Bingham, Osborn & Scarborough, based in San Francisco.
Financial stocks also drew attention. The Senate late Thursday approved its version of a financial overhaul bill that contains the biggest regulatory changes for banks since the 1930s. The bill will now be reconciled with a version that passed the House.
Goldman Sachs Group Inc. rose $6.65, or 4.9 percent, to $142.75, while Wells Fargo & Co. rose $1.31, or 4.6 percent, to $30.
The Treasury Department said after the slide in world markets Thursday that Treasury Secretary Timothy Geithner would head to Europe next week to meet with finance officials in Britain and Germany on how to boost confidence in the financial system.
Britain’s FTSE 100 fell 0.9 percent and briefly dropped below the psychological threshold of 5,000. Germany’s DAX index slid 1.6 percent, and France’s CAC-40 fell 0.7 percent. Earlier, Japan’s Nikkei stock average fell 2.5 percent.
In corporate news, Dell Inc. reported after the closing bell Thursday that its first-quarter net income increased but the company’s gross profit margin fell from a year earlier. The stock fell 81 cents, or 5.7 percent, to $13.51.
Gap Inc. reported a 40 percent increase in first-quarter net income. The company boosted its profit forecast for the year but the outlook fell short of analysts’ forecasts. Gap rose 61 cents, or 2.8 percent, to $21.76.


Oyster Bay Inn Headed to Foreclosure

Friday, May 21st, 2010

By Rachel Pritchett
rpritchett@kitsapsun.com
BREMERTON
The Oyster Bay Inn and Restaurant is in foreclosure and is scheduled to go to auction June 11.
According to a notice of trustee’s sale filed with the Kitsap County Auditor’s Office, hotel owner MS & SK, Inc., owes $288,423 for four unpaid mortgage payments, along with late charges and interest fees.
It also is behind on its taxes, owing about $38,000 in 2009, according to the foreclosure papers. According to the auditor’s office, the total taxes past due including the first half of 2010 taxes totals $70,503.
Numerous attempts to reach Chong Suk Gibbs, president of MS & SK, were unsuccessful.
Dana Kercher, front-desk manager of the Oyster Bay Inn, hinted that the recession hasn’t spared the hotel, but said it remains open for business.
“At this point, we are up and running,” Kercher said.
Only a handful of vehicles were in the hotel’s parking lot during a visit this week. The premises appeared somewhat worn compared to 1984, when it began operating as an elegant new hotel with rooms slung over the hillside overlooking Oyster Bay.
Then, the restaurant’s new decor featured nature scenes exquisitely etched into glass room separators, stunning lighting and excellent food.
An earlier motel on the premises opened in 1973, according to Kitsap Sun archives. Today, the establishment has 77 units in three buildings on about 2.4 acres, according to Kitsap County Assessor records.
About $4.7 million is owed on the Oyster Bay Inn mortgage, first with failed City Bank of
Lynnwood and now with Whidbey Island Bank.
The property has had a series of sales transactions over the years that ranged from $2.1 million in 1994 to $5.4 million in 2008, according to assessor records. The current value of the property is about $4.2 million.
Prior owners since 2000 included Lee and Joung Corp., which purchased the hotel in 2006. Jin Soon Lee was that company’s president. Two years before, it was purchased by Kyung Kyu and Minja Kim.
In spite of the down economy, hotels have been coming online at a fast clip in Kitsap County. Newcomers include two large ones not far from the Oyster Bay Inn on the redeveloped Bremerton waterfront, the Fairfield Inn and Suites and the Hampton Inn and Suites.
They may have been among those siphoning off business from smaller hotels.
“I know that some of the small hotels have all been struggling,” said Patricia Graf-Hoke, executive director of the Kitsap Peninsula Visitor and Convention Bureau.
Graf-Hoke and visitor bureau board member Jack Edwards estimate that business at local hotels is down by an average of 25 percent in the first quarter of 2010 compared to the same period of 2009.
A few of the smaller hotels have found niches to weather the new competition and recession, Graf-Hoke said. The Midway Inn in Bremerton, for example, goes after clients coming to town for sports tournaments, she said.
Edwards, who also is director of sales and marketing for Comfort Inn and Suites in Bremerton, said that the first quarter of 2010 was disappointing for almost everyone in the local hotel industry.
“I can say recently everyone’s probably seen a downturn,” he said.
Properties in foreclosure proceedings sometimes don’t make it all the way to the auction block. The debt can be satisfied.
But if they do go that far and there is no successful buyer, the properties go to the banks. Often banks then attempt to sell them to recoup losses. Sometimes in the case of hotels, banks continue to operate them to generate income.
The auction of the Oyster Bay Inn is scheduled for 10 a.m. at the Kitsap County Courthouse.


What are Your Memories of the Oyster Bay Inn?

Thursday, May 20th, 2010

It is in the foreclosure process, and I’m writing a story. If you have any memories of staying, eating or celebrating there, call me or e-mail me this afternoon. Or, why not, just post here.

Thanks

Rachel Pritchett, 475-3783


Port Orchard, Port of Bremerton Confirm Pact for SKIA Sewer

Thursday, May 20th, 2010

PORT ORCHARD — City of Bremerton staff, including its attorney, sat poker-faced Thursday as elected officials from the port of Bremerton and the city of Port Orchard agreed their pact stood solid naming Port Orchard the sewer provider for the South Kitsap Industrial Area.
They meet in a rare informal session to go over a few items, this topping the list.
But that memorandum of intent was signed before SKIA was annexed into the city of Bremerton.
“Suddenly we’re being told, ‘Well, that may not be the case,’ ” Port Orchard Mayor Lary Coppola said. “Well, we disagree.”
He pointed to the $21 million his city has poured into sewer-system upgrades.
Port representatives agreed the memo still stands.
Coppola added, however, that should the city of Bremerton ever be interested in buying Port Orchard’s interest, his city would be willing to listen.
There wasn’t a peep from Bremerton on Thursday.
SKIA stands undeveloped, empty and unreachable today, until a road leading through it being built by the port is finished.

Port Orchard Garage
The other 800-pound gorilla in the room was Port Orchard’s desire to build a parking garage downtown.
“And we’re looking for funding help,” Coppola told port officials.
The proposed garage today calls for as many as 400 spaces, which proponents hope would make the waterfront more park-like with less parking.
A full range of funding options is being examined and Port Orchard is seeking partners in the project, Coppola told the group.
Port Commissioner Bill Mahan asked Coppola to get more information to the port so its leaders can decide what role the port will play.

Port Orchard Marina Park
The Bremerton port and Port Orchard have circled around and around on how to permanently designate free parking spaces for users of the Port Orchard Marina Park.
Park users compete with Port Orchard Marina users and commuters for the premium waterfront parking now.
Port Commissioner Larry Stokes has been a strong proponent for park users in this squabble. That was certainly the case Thursday as he convinced both sides to agree to find a way to designate 11 parking spaces just for park users.
The group tasked their staffs to come up with recommendations.


Listened in on the Port/Port Orchard Meeting this Morning …

Thursday, May 20th, 2010

They covered the waterfront on issues common to them. Both sides wanted money from the other. Look for more here soon.

Rachel Pritchett


Thursday Dow Tumbles 298 Points

Thursday, May 20th, 2010

Now at 10,146.


A Public Moment for a Private Actress

Thursday, May 20th, 2010

By Rachel Pritchett
rpritchett@kitsapsun.com
SEABECK
She was here, living among us, and we didn’t even know.
At 76, Erin O’Brien still has the luxurious voice, the soft, haunting eyes that made her a television mainstay in the ’50s and ’60s. With her long, black mane and hat with black rose, she still carries the bigger-than-life aura of Elizabeth, the coyness of Audrey, the intimacy of Natalie.
And though even the people on her street didn’t know, she’s been right here, first in Kingston for five years, now in Seabeck for another three. She likes the Northwest.
Her days are spent inside her tucked-away home, compiling photo albums for her five children, maybe venturing into the garden to tend to her irises, but not much farther.
The limelight was so bright for so many years.
“I stay home a lot,” said O’Brien, sitting in her living room thickly filled with rare Middle Eastern and European furniture pieces, intricate lace curtains, and Persian rugs and art. Framed album covers, photographs and news clippings line the walls. Each room has the sense of a Hollywood set.
O’Brien sang regularly on variety shows like The Steve Allen Show, and she was the beauty on Old West shows like “Maverick,” “Cheyenne,” “Bat Masterson,” “Laramie” and “Death Valley Days” opposite James Garner.
She was the beauty on “Girl on the Run,” the movie that led to hit TV series “77 Sunset Strip,” and in movies like “In Like Flint” with James Coburn.
She was a cover girl for Life magazine.
The Warner Brothers contract actress entertained the troops in Korea with Bob Hope in Korea, leaned over Liberace’s piano, but was dismissed by Gene Kelly as too tall for a role opposite him in the movie for a role in the 1958 movie “Marjorie Morningstar.”
National advertisers exploited her Irish heritage to make her “the Schlitz Girl” and later the face for Smirnoff vodka.
Along the way, she married what Hollywood columnists called at the time called a shiek, actor Kanan Abdullah Awni Al-Zaidy. They have been married 47 years.
O’Brien is not well.
She needs oxygen and tires easily. The diaphragm and vocal chords behind her sad, mellow voice no longer work.
“I’m not going to give up,” she said.
And so they are downsizing, finally going pubic just long enough to sell of a lifetime’s accumulation of treasured possessions. After that, they will move to the Tacoma area.
The public is invited to O’Brien’s sale, from 10 a.m. to 5 p.m. Friday, Saturday and Sunday at her Seabeck home. Prepare to see — and pay for — some exquisite furniture pieces and all her other house belongings.
The quiet, exceedingly polite actress will be on hand to greet her fans, if health permits.
The most satisfying string of songs O’Brien ever delivered at age 15, to Helen Keller, staying at a nunnery in Pasadena.
The girl sang three songs as attending nuns surrounded Keller’s bed.
Keller reached up and held her hand to O’Brien’s throat, so she could feel the vibrato.
Keller began crying.
“Afterward she kept kissing my hand again and again and again,” O’Brien said, approaching tears even now.
She had this advice for young starlets:
“In my honest hear of hearts … if you’re going to perform, study, for young girls, study.”
“That’s how you learn.”
Steve Allen described O’Brien like this in notes for one of her albums.
“She has a simplicity and quaint charm that sets her apart as an individual and as a singer.”
O’Brien said of her life, “It’s been interesting.”

Estate Sale
Fine furniture, rugs and other items belonging to singer/actress Erin O’Brien and husband Kanan Abdullah Awni Al-Zaidy are available in a public estate sale taking place at the couple’s home at 7231 Snapdragon Place, Seabeck, from 10 a.m. to 5 p.m. Friday, Saturday and Sunday. O’Brien will be on hand to greet visitors, her health permitting. A preview of some items is at www.mikewallandassociates.com.


I Need a Hotel Expert

Wednesday, May 19th, 2010

If you are an longstanding expert on the local hotel scene, please call my Thursday at (360) 475-3783.

Thank you.

Rachel Pritchett, reporter


Wednesday Stocks Slide, Europe Still the Problem

Wednesday, May 19th, 2010

Dow at 10,396 this morning, down 114 points.

NEW YORK (AP) — Stocks resumed their slide Wednesday after investors looked past a rising euro to still unanswered questions about Europe’s debt crisis.
The Dow Jones industrial average fell about 125 points at midday.
Stocks initially stabilized Wednesday after the euro bounced off of a four-year low, but soon turned lower as worries grew about Germany’s move to ban certain kinds of short-selling. The sudden announcement late Tuesday from Germany’s financial regulator was seen in the markets as another example of disarray in Europe’s financial system.
U.S. stocks have been tracking the movement of the 16-nation currency for weeks. A sliding euro indicates waning confidence in Europe’s ability to contain a debt crisis in Greece, which unsettles stock investors.
“People are still just very concerned about what’s going on overseas,” said Sam Stovall, chief investment strategist in U.S. equity research at Standard & Poor’s.
Germany enacted the new short-selling rule in hopes of curtailing sudden swings in European debt markets, like the ones that crippled Greece’s ability to borrow money after the rates on its bonds shot higher earlier this year.
European leaders agreed last week to a nearly $1 trillion bailout program to help countries like Greece that face mounting debt problems. The deal was initially embraced by financial markets, but traders quickly became concerned that the austerity measures tied to the rescue package would upend a rebound.
In midday trading, the Dow fell 122.50, or 1.2 percent, to 10,388.52. The broader Standard & Poor’s 500 index fell 13.08, or 1.2 percent, to 1,107.72. The Nasdaq composite index fell 33.67, or 1.5 percent, to 2,283.59.
U.S. stocks fell Tuesday after the euro slumped. The drop came after Germany said it had banned “naked” short selling, which occurs when traders bet on a stock or investment that they don’t own. The ban covers European government bonds, credit default swaps and the shares of several financial companies.
The euro immediately retreated after the ban was announced, which dragged down U.S. markets. The announcement came after the close of European markets and brought concerns that officials were having trouble blunting the debt crisis and waves of selling in European markets.
Bond prices were mixed. The yield on the benchmark 10-year Treasury note slipped to 3.34 percent from 3.35 percent late Tuesday. Bond yields have been falling in recent weeks as investors flock to safe investments.
U.S. investors haven’t been focusing on the U.S. economy but given the downbeat mood on Wall Street downbeat news drew some attention.
The Mortgage Bankers Association reported that the number of homeowners who missed at least one payment on their mortgage rose to a record in the first quarter. That signaled that foreclosures could rise and suggested that troubles in the U.S. housing sector are far from over.
Traders also focused on Washington. The Senate is scheduled to vote Wednesday to end debate on the biggest overhaul of financial regulation since the 1930s. The Senate could vote this week. The bill would then be reconciled with a House version.
The concern for some investors is that the new rules could hurt profits at financial companies.
About nine stocks fell for every one that rose on the New York Stock Exchange, where volume came to 665 million shares, compared with 517 million traded at the same point Tuesday.
The Russell 2000 index of smaller companies fell 13.16, or 1.9 percent, to 669.59.
Britain’s FTSE 100 dropped 2.7 percent, Germany’s DAX index fell 2.8 percent, and France’s CAC-40 dropped 2.9 percent. Japan’s Nikkei stock average fell 0.5 percent.


Kitsap Economy Picks Up, But Long Road Ahead

Wednesday, May 19th, 2010

About half of the 800 new jobs were in the private sector, including 300 in retail.
By Rachel Pritchett
rpritchett@kitsapsun.com
Kitsap County’s unemployment rate plummeted in April to 7.2 percent from 8.5 percent in March.
The state announced that 800 new jobs had been added here in April. Kitsap’s labor force rose to 82,700.
Half of the job gains were in the private sector. Within that, retail gained 300 jobs.
The gain reflected a rise in the national retail sales rate, which was half a percent higher in April than in March and 4.6 percent more than a year ago, according to the National Retail Federation.
Elizabeth Scott, local economist for the Washington Department of Employment Security, said that while the increase in retail jobs couldn’t be pinned on any single big store opening, consumers were starting to shop more.
Mindy Byers, marketing manager at Kitsap Mall, said Navy families already are starting to relocate to Bremerton in anticipation of the aircraft carrier USS Nimitz arriving in December.
She said the mall’s gross sales have increased 2 percent in the first quarter over the same period last year.
A clothing store, rue21, and Hale’s Alehouse both will open at the mall in July.
Also in the private sector, another 100 jobs were gained in the leisure and hospitality industry as travelers set out for the season.
Another 400 jobs were gained in government, and half of those were in state government, according to the new statistics.
Margaret Hess, manager of public employment office WorkSource of Kitsap County, is seeing fewer people come in for help.
“We’re seeing more people go to work across the different sectors,” she said.
Locally, that means the marine trades.
Hess expects at least
80 positions to become available between June and August in journeyman-level jobs for sand blasters, electricians and pipe fitters as defense contractors pick up speed.
The job listings are on the employment office’s website, www.go2worksource.com. Select “Bremerton,” then “Installation, Maintenance and Repair.”
The number of construction jobs in Kitsap County did not grow at all in April, but Hess said she’s seeing a few more listings go up in her office.
Kitsap’s unemployment rate peaked at 8.8 percent in February, the highest rate in at least two decades and probably longer.
Washington’s unemployment rate fell in April to 9.2 percent from 9.5 percent in March. The state has added 14,800 jobs so far this year, and in April the gains were in leisure and hospitality, government (including temporary Census jobs), construction and manufacturing.
“I’m pleased to see growth in the construction and manufacturing sectors, which suffered the biggest losses in the recession,” said Employment Security Commissioner Karen Lee.
But the local and state economy have a lot of ground to gain before any true recovery takes place.
Kitsap’s work force in April was still 3,600 jobs shy of what it was in April 2008.
Statewide, there were 173,000 fewer jobs this April compared with April 2008.