December 22004

December 2, 2004

Fed View Shifting on Inflation; Rate Rises
Likely

A growing number of Federal Reserve officials believe inflation risks
are on the rise—a shift in sentiment that will likely keep the
central bank raising interest rates at its next few meetings, the
Wall Street Journal reported. Officials cite several
reasons for their newfound concern: slowing productivity growth, the
lower dollar, high energy and commodity prices, recent inflation data,
and anecdotal evidence of businesses raising prices, the online
newspaper reported.

Court Weighs IRA Bankruptcy Exemption

The U.S. Supreme Court heard argument on Wednesday on whether
individual retirement accounts are vulnerable to creditors after a
personal bankruptcy, UPI reported. The U.S. Bankruptcy Code makes some
pensions exempt from creditors. But IRA owners can withdraw money from
their accounts at any time, though if they withdraw the money before age
59 and a half, the withdrawals are subject to a 10 percent tax penalty.
At issue in the case before the Supreme Court is whether that level of
access disqualifies the accounts from the code exemption. Read the full
article at
href='http://washingtontimes.com/upi-breaking/20041201-103324-1164r.htm/'>washingtontimes.com/upi-breaking/20041201-103324-1164r.htm.

Delta Secures $1.1 Billion Financing, Borrows $830
Million

Delta Air Lines Inc. on Wednesday said it completed agreements with
General Electric Co.’s GE Commerce Finance and American Express
Co.’s American Express Travel Related Services Co. to obtain $1.1
billion of available financing, and immediately borrowed $830 million of
that amount, Reuters reported. Earlier on Wednesday, Delta’s
pilots union said 229 pilots retired by midnight Tuesday as a concession
package that cuts pay by 32.5 percent took effect. Of these pilots, 197
were younger than 60 and took early retirement. The financings and pilot
retirements are part of the carrier’s bid to avoid a potential
bankruptcy filing.

GMP Says No Further Plans to Pursue Bid for
Stelco

GMP Capital Corp. said on Wednesday it has no plans to make further
bids to restructure Stelco Inc. after a Canadian court approved another
offer as the benchmark earlier this week, Reuters reported. GMP and GE
Canada Finance had a joint C$1.1 billion ($932 million) bailout plan
that Canada’s biggest steelmaker did not support as the bid it
wanted as a benchmark for other potential suitors. The court approved a
C$900 million bailout plan from Deutsche Bank AG and said its decision
should encourage a very competitive bidding process that would benefit
Stelco and its stakeholders, the newswire reported.

US Airways Goes to Court to Void Labor
Contracts

US Airways goes to court today to void labor contracts and union
pension plans to save $750 million annually and survive past January,
Reuters reported. The airline said it would prefer to reach consensual
giveback agreements with flight attendants, mechanics reservation agents
and other ground workers, but months of talks have yielded no deals.
Only the pilots and some smaller unions have agreed to long-term
concessions to help the airline restructure and exit chapter 11 by July
with a cost-structure similar to that of discount airlines, the newswire
reported.

Wet Seal Third-Quarter Net Loss Widens

Struggling clothing retailer Wet Seal Inc. on Wednesday posted a
wider quarterly loss as lackluster demand for its teen-oriented fashions
forced the company to make bigger markdowns, Reuters reported. The
latest in a string of weak financial results for the retailer come after
Wet Seal’s chairman and CEO Peter Whitford resigned last month as
the company reached a deal to raise $40 million to avoid bankruptcy.