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VOL. 123 | NO. 244 | Monday, December 15, 2008

Daily Digest

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Permit Filed For Hickory Hill Warehouse

A building permit for $700,000 has been filed for property at 5265 Hickory Hill Road. The owner of the property is Panattoni Development Co. and the tenant is Ozburn-Hessey Logistics LLC. Grinder, Taber & Grinder Inc. is listed as the contractor for the project. No architect was listed as of yet.

The property is a 23.8-acre lot on the southwest corner of Hickory Hill and Holmes roads. It contains a 373,330-square-foot, one-story warehouse built in 2003. The Shelby County Assessor’s 2008 appraisal of the property is $11.3 million.

The building permit describes the project as a “tenant buildout” with no other specific details added.

A message left with Ozburn-Hessey Logistics LLC was not immediately returned.

Source: The Daily News Online & Chandler Reports

Railroad Shipments to Slow, Analyst Predicts

A Goldman Sachs analyst on Friday predicted that North American railroad shipments will continue to slow in 2009, and said historically high shipping prices may not be enough to balance out the shortfall.

Analyst David Feinberg also cut his rating on Burlington Northern Santa Fe Corp. and Canadian Pacific Railway Co. to “Sell” from “Neutral.”

He noted that shares of Fort Worth, Texas-based Burlington have outperformed other rails over the past year and he predicted lower coal demand and a slowdown in shipments from trucks will drag volume down next year.

Feinberg predicted Canadian Pacific will trade in line with the group but might be hurt by some required payouts related to coal volumes on an acquired rail.

Across the sector, Feinberg now expects shipments on the tracks to fall by 6.3 percent next year, compared with a previous prediction for a 2.5 percent decline. Dragging down next year’s prediction is an expected drop in coal demand – historically one of the few bright spots for railroads – as well as lower intermodal shipments as U.S imports slow.

Additionally, Feinberg said the railroads may have to concede some of their traditionally strong pricing power in 2009 as they resign contracts for next year.

Republican Ed Bryant Appointed Federal Magistrate

Republican Ed Bryant, a former congressman and federal prosecutor, has been appointed as a federal magistrate in Jackson, Tenn.

Bryant replaces District Judge S. Thomas Anderson after he was appointed to the federal bench by President George W. Bush earlier this year.

Magistrates are appointed to their eight-year terms by federal judges in the district. They handle pretrial matters and can be assigned to preside over civil and misdemeanor criminal trials.

Bryant made unsuccessful bids for the Republican nomination for the U.S. Senate in 2002 and 2006.

Bryant prosecuted then-U.S. Rep. Harold Ford Sr. on bank fraud charges in 1993, though Ford was acquitted of all charges. As a congressman, Bryant was one of the top House managers during President Bill Clinton’s 1998 impeachment trial.

Fitch Ratings Expects More Credit Card Defaults

Credit card delinquencies will likely further stress card issuers and retailers as more consumers find themselves unable to pay the debt in the coming months, according to a report issued Friday by Fitch Ratings.

With consumers cutting back on spending, retailers already are feeling the pinch, but accelerated credit card defaults will only complicate matters, said Mike Dean, managing director for Fitch Ratings, which issues a monthly credit card report.

He said the latest report indicates as many as one in every eight credit card holders could default on their store-issued card.

The latest Fitch Retail Credit Card Index shows 60-plus day delinquencies have risen nearly 24 percent since August, reaching 4.8 percent. Fitch expects chargeoffs, or debts deemed uncollectable, to exceed 12 percent in first half 2009 from current levels of 9.1 percent. While in line with historical averages, the current chargeoff index is more than 40 percent above 2007 levels.

Despite the bleak forecast, Fitch said retail credit card portfolios remain healthy because higher interest rates charged to cardholders so far continue to stay ahead of the chargeoff levels experienced by the card issuers. Ratings outlooks are not expected to be downgraded anytime soon.

Fitch’s Retail Credit Card index tracks more than $72 billion in principal receivables backing approximately $40 billion of retail or private label credit cards. The largest issuers in the index are Citibank Omni Master Trust and GE Private Label Master Trust.

Major retailers include Wal-Mart Stores Inc., Sears Holdings Corp., Home Depot. Inc., J.C. Penny Co. Inc. and Best Buy Co.

St. Jude’s Mullighan Honored For Hematology Research

Dr. Charles Mullighan is this year’s recipient of the Joanne Levy Memorial Award for Outstanding Achievement from the American Society of Hematology.

A native of Adelaide, Australia, he joined the St. Jude Children’s Research Hospital staff in 2004.

The award recognizes the American Society of Hematology scholar with the highest scoring abstract at the organization’s annual meeting. The organization’s mission is to further the understanding, diagnosis, treatment and prevention of disorders affecting blood, bone marrow and the immunologic, homeostatic and vascular systems.

MCS Selects Headsprout Early Reading

Memphis City Schools has selected the program Headsprout Early Reading for all of its 8,718 first grade students.

The program will involve more than 500 classrooms across 112 Memphis elementary schools and will include 80 online lessons and 80 printed stories that accompany the lessons, which each student will receive.

Headsprout is based in Seattle and was founded in 1999. Its mission is to help eliminate illiteracy by teaching literacy skills to young children through the Internet.

Oil Tumbles On Failed Auto Bailout

Oil prices fell sharply Friday as a proposed $14 billion bailout for U.S. automakers collapsed in the Senate. Also dragging down prices was another round of poor economic news, as consumers cut back on spending for a record fifth straight month.

Crude’s fall capped a volatile week in which prices surged on the back of a weakening dollar, and also the potential for severe production cuts from OPEC.

“We are being torn in a lot of different directions,” said Phil Flynn, an analyst at Alaron Trading Corp.

Oil prices fell 7 percent, or $3.38, to $44.60 a barrel on the New York Mercantile Exchange.

In London, January Brent crude fell $3.24 to $44.15 a barrel on the ICE Futures exchange.

A day after the dollar got crushed on the possibility of a bailout and sent oil prices 10 percent higher Thursday, the market seemed more worried about weak demand on Friday after bailout of the automakers failed, Flynn said.

General Motors Corp., Chrysler LLC and Ford Motor Co. failed to secure $14 billion in emergency loans after efforts collapsed in the Senate late Thursday. The Senate rejected the bailout 52-35 on a procedural vote.

President George W. Bush and the Treasury Department said Friday they were prepared to act to keep the Detroit Three from failing.

Most industry experts dismissed soaring crude prices last week as an aberration. Before a selloff Friday, crude had risen 7 percent last week despite a stream of dour economic reports and predictions of falling demand.

Oil analyst Stephen Schork said in his report Friday that “when you get a market that is oversold, which was the case for crude oil heading into this week, you get large, seemingly unexplainable spikes in the market. This is what we think we are witnessing this week. Therefore, we will stick to our guns and will maintain our bearish bias.”

Suspicious Letter At State Capitol Harmless

Preliminary tests of a suspicious powder sent to Tennessee Gov. Phil Bredesen in a letter were negative for harmful substances.

The letter addressed to the governor was spotted in the Capitol mailroom Thursday and a hazardous materials team from the Metro Nashville Fire Department was called to remove the envelope from the building.

The letter carried the same return address in Texas as similar letters received by other governors around the country last week.

Tennessee epidemiologist Tim F. Jones said Friday in a released statement that the powder sent to Bredesen “appears to be harmless.”

Jones didn’t name the substance, but officials in some of the other states that received the powder say it was flour, cornstarch or some other harmless food substance.

Arkansas Sets Deadline For Cashing Racino Vouchers

The Arkansas Racing Commission voted Thursday to adopt a new policy for cash vouchers/tickets issued by the state’s pari-mutuel establishments, including Southland Greyhound Park in West Memphis.

Beginning Jan. 1, 2010, tickets that are a year old or longer will no longer be honored.

The rule change is the result of an audit, said Ron Oliver, manager of the Arkansas Racing Commission.

“In our audit, they said you have a rule to the disbursement of uncashed pari-mutuel tickets, but you have never established one for EGS (electronic games of skill) tickets/vouchers,” Oliver said. “We have only had EGS since late 2006.”

Any money not claimed within a year of a ticket/voucher date will become part of a racino’s net win and distributed accordingly, Oliver said. He stressed that the rule does not take effect until 2010.

A racino is a combined racetrack and casino.

PROPERTY SALES 51 328 20,960
MORTGAGES 58 387 24,132
BUILDING PERMITS 170 842 43,435
BANKRUPTCIES 50 288 13,468