Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to businesses, depriving even healthy companies...
Banks struggling to recover from multibillion-dollar losses on real estate are curtailing loans to businesses, depriving even healthy companies of money for growth and hiring.
Commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral, jointly dropped almost 3 percent over the last year, to $3.27 trillion from $3.36 trillion, Federal Reserve data show. That’s the largest annual drop since the credit tightening that began with the last recession, in 2001.
The impact has intensified the strains on the economy by withholding capital from many companies, just as joblessness grows and consumers pull back from spending.
“The second half of the year is shot,” said Michael T. Darda, chief economist at the trading firm MKM Partners in Greenwich, Conn.
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Earlier this year, credit extended to companies and consumers was still growing at double-digit rates compared with three months earlier, an analysis of Federal Reserve data by Goldman Sachs shows.
By mid-June, bank credit was declining at an annualized pace of more than 6 percent.
iPhone problems still plague Apple
Apple’s experiencing serious growing pains with its launch of the new iPhone that went on sale two weeks ago.
It can’t satisfy demand, and a longer process to activate the iPhone is making the in-store buying system much longer, causing customers to fume.
“It’s a nightmare,” said Grace Ciurluini, in line at a Los Angeles Apple Store on Sunday.
By 11:30 a.m., 30 minutes after opening, the store had sold its daily iPhone allotment.
Apple Stores in New York, Seattle, Charlotte, N.C., Cincinnati, Nashville, Tenn., Atlanta and Arlington, Va., all said Sunday they were sold out of the $199 iPhone.
Saturday, Apple altered its store hours to try to handle demand, saying it would open daily except Sunday at 8 a.m. to serve iPhone buyers.
Qwest can’t charge more for using lines
Qwest Communications International won’t be allowed to charge higher rates to communications companies that use its lines in four metropolitan areas, including Seattle, under a Federal Communications Commission order issued Friday night.
Qwest also filed forbearance petitions for Denver, Minneapolis-St. Paul and Phoenix.
Qwest was seeking relief from rules that don’t apply to competitor Verizon Communications. The rules include limits on prices Qwest charges other telecommunications companies for using its lines.
Best Buy to sell musical instruments
Hoping to cater to everyone from the garage guitarist to a recording musician, Best Buy is announcing Tuesday an initiative that sets aside store space for musical instruments and gear in dozens of sites nationwide.
The nation’s largest consumer-electronics retailer plans to open as many as 85 of the music centers inside its stores by the end of the year, and it could add more locations later.
Each site will use about 2,500 square feet of retail space and include roughly 1,000 different products with well-known brand names such as Fender, Gibson, Drum Workshop and Roland.
When the rollout is completed, Richfield, Minn.-based Best Buy will become the second-largest instrument seller in the country based on locations.
Results positive in Amgen drug trial
Amgen’s experimental drug for the bone-thinning disorder osteoporosis prevented spinal and hip fractures in a study.
The three-year trial of 7,800 women with osteoporosis found the medicine, denosumab, strengthened bones and reduced broken bones in the spine, hip and other locations more than a placebo, the Thousand Oaks, Calif., biotechnology company said.
“This is the best outcome Amgen could have hoped for, and assures denosumab’s blockbuster status,” said analyst Michael King, of Rodman & Renshaw in New York.
Amgen’s price plunged 32 percent in 2007 as its best-selling anemia therapies, Aranesp and Epogen, were linked to heart attacks.
Amgen has operations in Seattle and Bothell.
Compiled from Bloomberg News, USA Today, The New York Times and The Associated Press