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VOL. 124 | NO. 106 | Tuesday, June 2, 2009

Daily Digest

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Eads Co. Buys G’Town Land, Files $1.1 Million Loan

An Eads-based company called Germantown Storage LLC has bought three parcels totaling 9.84 acres in Germantown for a combined $688,000 and subsequently filed a $1.1 million construction loan through Renasant Bank for the property. The seller was Grace Evelyn Griffin, trustee of the Grace N. Gower Marital Trust, and the trio of sales closed in mid-May.

Although approval was granted by the city-county Land Use Control Board in February for a storage facility on the site, a restrictive covenant also was signed stating that the 9.8 acres being sold to Germantown Storage LLC could not be used for a self-storage property.

Jack Johnson signed the trust deed as managing member of Germantown Storage LLC, whose address is 380 Falling Creek Lane in Eads. Johnson also is affiliated with Germantown Home Builders. A call to Johnson for comment on this transaction wasn’t returned by press time.

Germantown Storage filed its limited liability company documents in March. More recently, documents for the Germantown Storage Planned Development were filed, although they weren’t viewable at the Shelby County Register of Deeds Web site.

The property is part of the Germantown/Wolf River CP General Plan, an 18.71-acre parcel east of South Germantown Parkway, between Walnut Grove Road and Wolf River Boulevard. The Shelby County Assessor of Property’s 2009 appraisal of the entire 18.71-acre tract is $2 million.

Source: The Daily News Online & Chandler Reports

Manufacturing Index Beats Expectations

On the same day of manufacturing icon General Motors Corp.’s bankruptcy filing, reports on the industrial sector from around the globe seemed to show the sector on the mend.

The decline in U.S. manufacturing slowed in May, a trade group reported Monday, and the sector is faring better than analysts had expected. Similar reports from Asia and Europe also showed improvements in manufacturing.

Companies used up huge stocks of inventories in the first quarter, said Joshua Shapiro, chief U.S. economist at research firm MFR Inc., boosting new orders to manufacturers and pumping up production.

The Tempe, Ariz.-based Institute for Supply Management said its index on manufacturing came in at 42.8 – its highest level since September – compared to 40.1 in April. A reading below 50 still indicates contraction, but the measure has been shrinking more slowly every month since December.

Analysts polled by Thomson Reuters had expected the index to read 42 for May.

Still, even after the sector starts to grow again, it will be a “low-growth” scenario, said Norbert Ore, chair of the ISM’s manufacturing report.

“A low-growth scenario probably means a jobless recovery as far as manufacturing is concerned,” Ore said. The “overall spending level, debt level of the country isn’t going to support a high growth rate. I don’t see the drivers that would drive us to a high growth scenario” – namely, confident consumers and free-spending businesses.

Even though ISM noted that May’s decline was the 16th straight month of contraction in manufacturing, the report showed “signs of improvement” since last month and the 28-year low of 32.9 in December.

An index of new orders rose to 51.1 in May from 47.2 in April. It was the first month of growth in the new-orders index since November 2007, with nine of 18 industries reporting growth.

Growth in new orders from businesses and consumers means manufacturers will need to ramp up production. At the same time, an index of customer inventories fell below 50 for the second straight month, which means manufacturers’ clients will probably need to restock.

The production index clocked in at 46 from 40.4 in April – the ninth consecutive decline.

ISM said that while a reading below 50 indicates contraction in manufacturing, a level above 41.2, if sustained over time, has historically signaled an expansion of the overall economy. The ISM hadn’t been above 41.2 in seven months.

The data from ISM, made up of indicators including new orders, production, employment, inventories, prices, and export and import orders, comes on top of reports indicating an easing in the manufacturing crunch in China, Great Britain and the euro zone.

Tenet Healthcare Offers $450 Million in Notes

Hospital operator Tenet Healthcare Corp. – parent company of Saint Francis hospitals in Memphis and Bartlett – reported Monday it is privately offering $450 million in senior secured notes due to mature in 2019.

The company said the notes will rank with the company’s 9 percent senior secured notes due in 2015 and 10 percent senior secured notes due in 2018, which were issued in March.

Proceeds from the private offering will be used to buy Tenet’s 9.875 percent senior notes due in 2014 in a tender offer.

US Consumer Spending Dips, Savings Rate Surges

Frugal U.S. consumers trimmed spending in April – although by less than expected – as rising unemployment kept pocketbooks in check and motivated Americans to save.

With income growth far outpacing spending, Americans’ personal savings rate zoomed to 5.7 percent, the highest since February 1995, the U.S. Commerce Department reported Monday.

Consumer spending dipped 0.1 percent in April. That was slightly less than the 0.2 percent reduction economists were expecting, although it marked the second straight month that consumers cut back. The pullback came after a burst of buying at the start of the year as shoppers took advantage of deeply discounted merchandise and other promotions.

Americans’ incomes – the fuel for future spending – jumped by 0.5 percent, following two straight months of declines. The improvement in April was because of tax cuts and benefit payments flowing from President Barack Obama’s stimulus package, the government noted. Wages and salaries, however, were flat in April.

The growth in incomes – the most since May 2008 – surprised economists. They were forecasting a 0.2 percent decline.

Consumer spending accounts for roughly 70 percent of overall economic activity and is closely watched by economists.

In April, consumers trimmed spending on big-ticket “durable” goods such as cars and appliances, and on “nondurables” such as clothes and food, by 0.6 percent each. That was a little less than how much they reduced spending in those categories in March.

Consumers increased spending on services by 0.3 percent in April, up from 0.1 percent in March.

Most economists believe consumers in the April-to-June quarter will hold tighter to their wallets than they did in the first three months of this year.

In the first quarter, consumer spending rose at a 1.5 percent pace. It wasn’t a shopping spree by any means but it marked a big improvement from the final quarter of last year when recession-battered consumers slashed spending at a 4.3 percent pace, the most in 28 years.

Even with the expectation that consumers will be cautious, economists predict that the economy as a whole is not sinking nearly as much now as it was in the prior six months.

Forecasters at the National Association for Business Economics, or NABE, predict the economy will contract at a 1.8 percent pace in the April-June quarter.

Other analysts think the economic decline could be steeper – around a 3 percent pace. Some think it could be less – about a 1 percent pace.

Seven Tenn. Schools Receive Engineering Grants

Seven state universities will receive a share of $200,000 in grants from the Tennessee Board of Architectural and Engineering Examiners.

The money will be used to buy lab equipment, computers and other instructional materials for students studying architecture, engineering and interior design.

The grants went to Middle Tennessee State, Tennessee State, Tennessee Tech, the University of Memphis and the University of Tennessee campuses in Knoxville, Chattanooga and Martin.

4,200 Educators Ready For Training Sessions

Approximately 4,200 Tennessee educators will be attending training sessions this month.

It’s part of the Tennessee Diploma Project, an overhaul of standards and curricula designed to better prepare students for college and the work force.

The sessions begin today in Memphis, Knoxville and Montgomery County. Later sessions will be in Lexington, Grainger County, McMinn County, Nashville, Cookeville, Hamilton County, Dyersburg and Blountville.

First Tennessee to Present Seminar on Transitions

First Tennessee Bank’s personal trust and business transition services division will present a seminar on managing successful transitions Thursday at 5:30 p.m. at the bank’s Ron Terry Center at Oak Court, 4385 Poplar Ave.

Seminar presenters will be Richard Watson, vice president of business transition services for First Tennessee; Jave D. Ragan, principal of The Rainer Group; and A. Stephen McDaniel, managing partner of Williams, McDaniel, Wolfe & Womack PC.

Reservations should be made by contacting First Tennessee Senior Vice President and Trust Officer Lisa Cook at 681-2406 or lmcook@ftb.com by Wednesday.

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 57 57 1,266
MORTGAGES 48 48 964
FORECLOSURE NOTICES 11 11 162
BUILDING PERMITS 87 87 2,838
BANKRUPTCIES 34 34 652
BUSINESS LICENSES 10 10 286
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0