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Ecuador registered a budget surplus in the first half that will allow the government to keep investing, President Rafael Correa said.

Ecuador's central government had a surplus of $508 million and public-sector entities such as municipalities and state-run universities had a $2.17 billion surplus, he said today in his weekly television address.

“This surplus is excessive,'' Correa said. “We have to boost our efficiency in investing.''

On Sept. 28, Ecuador will hold a referendum on a new constitution that calls for raising spending on health and education payday loan. Correa this week replaced Finance Minister Wilma Salgado after she said that Ecuador faces a budget deficit of about $2.4 billion next year and recommended slowing the pace of spending.

“$3.9 billion in investments will be carried out this year,'' Correa said.

With high prices for crude oil, the OPEC member's main export, Ecuador has met its repayment schedule on its $3.9 billion in foreign debt during Correa's term.

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University of New Mexico researchers have received a $1.1 million grant from the W.M. Keck Foundation to build an optical scanning device to develop images at the nano level.

The device — being developed by scientists from the Department of Physics, the UNM Cancer Research and Treatment Center, and the Center for High Technology Materials — will provide real-time images of biological processes at nano- and pico-scale resolutions. That’s a feat never before achieved, said physics professor and lead investigator Jean Claude-Dieis in a news release.

“We’re building from scratch an instrument … that will make an optical image with a resolution of better than one nanometer,” Claude-Dieis said. “This is considerably less than the wavelength of light, which is generally considered to be the resolution limit for imaging.”

The instrument, called a scanning phase interactivity nanoscope, will be able to visualize the components of living cells instant payday loan. It will be capable of sampling any host material, water or tissue, with no sample preparation required, and with no harmful radiation such as X-rays or high-energy radiation particle beams, Dieis said.

“Seeing is understanding,” he said. “Therefore, we want to be able to see with our eyes what happens in the nanoscale in living organisms.”

The W.M. Keck Foundation in Los Angeles focuses primarily on pioneering efforts in the areas of medical research, science and engineering.

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Electric distribution company Oncor, a subsidiary of Energy Future Holdings Corp., said that 58,000 of its consumers in southeast Texas remain without power around noon on Monday, in the wake of Hurricane Ike.

Oncor said 3,000 employees are working in affected areas, primarily southeast Texas, and aim to restore power to customers by the end of this week. As of Saturday, about 108,000 homes and businesses in Oncor’s specific service area were without power. That figure has been cut in half over the last two days cashadvance.com.

According to the Public Utilities Commission, a total of 2.4 million consumers in the region lost power as a result of the devastating hurricane.

Although there were no power outages in Oncor’s Dallas-Fort Worth service area, the company says areas such as Lufkin, Nacogdoches and Tyler did take a hit.

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U.S. Global Investors Inc. recorded a sharp drop in net income and revenue during its recently completed fiscal fourth quarter. The decline is due, in part, to the current credit crunch affecting the markets in the wake of the subprime mortgage crisis, says Frank Holmes, CEO and chief investment officer of U.S. Global (NASDAQ: GROW). “There has been tremendous volatility in the financial sector, and GROW’s stock price has been dragged down by the problems in the sector, which has seen massive writedowns in the past year,” Holmes says. “The negative sentiment for financials across the board is another example of markets not behaving in a rational manner.” For the quarter ended June 30, U.S. Global reported net income of $3.84 million, or 25 cents per diluted share, on revenue of $16.96 million. That compares to net income of $6.41 million, or 42 cents per diluted share, on revenue of $21.83 million during the same period last year pay day loan. For fiscal year 2008, U.S. Global recorded net income of $10.84 million, or 71 cents per diluted share, on revenue of $56.04 million. The company reported net income of $13.76 million, or 90 cents per diluted share, on revenue of $58.60 million in fiscal year 2007. The company had $5.44 billion in average assets under management in fiscal year 2008, up 12.2 percent from the previous year. U.S. Global is a San Antonio-based registered investment advisor that manages domestic and international funds that offer a range of investment options. It specializes in emerging markets and natural resources.

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Alitalia’s (AZPIa.MI: Quote, Profile, Research, Stock Buzz) adviser will soon present its rescue plan for the airline to British Airways (BAY.L: Quote, Profile, Research, Stock Buzz), considered by Italy as a possible foreign partner for the bankrupt airline, an executive told a newspaper.

“Soon we will present the plan to British Airways as well,” an executive at Intesa Sanpaolo, (ISP.MI: Quote, Profile, Research, Stock Buzz) the Italian bank behind the plan, said in an interview published in business daily Il Sole 24 Ore on Saturday.

Gaetano Micciche, who heads the bank’s corporate and investment banking division, has already presented the plan to Air France-KLM (AIRF.PA: Quote, Profile, Research, Stock Buzz) and Lufthansa (LHAG.DE: Quote, Profile, Research, Stock Buzz), and he said he had got a positive response from both airlines.

British Airways, which has agreed to a tie-up with Iberia (IBLA.MC: Quote, Profile, Research, Stock Buzz) and American Airlines (AMR.N: Quote, Profile, Research, Stock Buzz), would not consider a partnership with Alitalia, an industry source earlier said cash advance loan no fax.

Air France-KLM, whose takeover of Alitalia fell apart this year over union opposition, however has said it is ready to take a minority stake in a revived carrier.

Lufthansa, which is also looking at Austrian Airlines (AUAV.VI: Quote, Profile, Research, Stock Buzz), has always said Italy was an important market for it.

Finding a foreign alliance for Alitalia after its restructuring is considered key for the success of the rescue plan, which foresees Italian investors buying its best parts and relaunching it as a smaller, more efficient carrier.

Intesa Sanpaolo’s chief executive on Saturday reiterated — as the government has also said — that a partnership would never lead to a foreign airline getting a majority stake. 

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Treasury Secretary Henry Paulson's response to the sinking fortunes of Fannie Mae and Freddie Mac might boil down to picking which investors get hurt and by how much.

At stake if Paulson does intervene: the fate of worldwide bondholders of $5.2 trillion of agency and mortgage-backed debt and scores of large banks, insurers and pension funds that own the firms' common and preferred shares.

Paulson's choices probably include buying Fannie's and Freddie's bonds, a special class of preferred shares or preferred shares convertible into common stock, analysts and investors said. The terms and conditions of any purchases would put the government ahead of other creditors and stockholders, while ensuring that bondholders are protected, they said.

“He's had zero clarity on this whole issue, and until the market knows where Hank's going to be in the capitalization structure, then it gets worse not better,'' said Paul McCulley, a fund manager at Pacific Investment Management Co., which has the world's largest bond fund.

“The presumption'' is that holders of the government- chartered companies' subordinated bonds “will be covered,'' McCulley said in an interview on Bloomberg Television from Jackson Hole, Wyoming. Common shareholders would be wiped out, he predicted.

Emergency Power

Paulson got the power to make purchases of the two companies' debt or equity in legislation enacted July 30 that was aimed at shoring up confidence in the beleaguered mortgage- finance companies.

The Treasury chief could also forego using that authority, and wait until Fannie Mae's and Freddie Mac's capital is so eroded that regulators can put them into receivership.

“I don't think they'll do half-measures if it means using taxpayer funds,'' said Andrew Laperriere, managing director at International Strategy & Investment Group, a money management and research firm in Washington.

“That requires steps including complete control,'' said Laperriere, who used to work as chief economic adviser to former Republican House Majority Leader Richard Armey.

Paulson telephoned Senate Banking Committee members this week to tell them the Treasury is closely monitoring the situation and, for now, doesn't plan to inject taxpayer funds, according to a Senate aide who spoke on condition of anonymity.

Assuring Lawmakers

“We are staying on top of the situation and communicating with the companies and their regulators,'' Treasury spokeswoman Jennifer Zuccarelli said.

Meanwhile, “top executives'' at Freddie Mac “have been talking with many potential investors this week,'' said Sharon McHale, a spokeswoman for the McLean, Virginia-based company.

Shares in Washington-based Fannie have dropped 60 percent and those of Freddie have lost 64 percent since July 30 quick payday loan.

“Private shareholders should be concerned,'' said Edwin Truman, a senior fellow at the Peterson Institute for International Economics in Washington and a former official at the Treasury and the Federal Reserve. Traders “will drive the price of the stocks down to nickels and dimes,'' at which point Paulson will step in, he predicted.

Truman forecast the Treasury would end Fannie and Freddie dividend payments, with officials taking over management.

Fannie, the largest mortgage-finance provider, was created in the 1930s and became a publicly owned company in 1968. Freddie was started in 1970. Designed to boost homeownership, the companies issued debt to finance purchases of mortgages and package home loans into bonds sold on to investors.

Banks at Risk

Their debt is held by companies including MetLife Inc., the largest U.S. life insurer, American Equity Investment Life Holding Co., and GE Asset Management Inc. Preferred shares are held by banks from Philadelphia-based Sovereign Bancorp to Frontier Financial Corp. of Everett, Washington.

As mortgage defaults climbed, concern mounted Fannie and Freddie lacked sufficient capital. Paulson asked Congress for emergency powers to shore up support for the firms.

If either company has trouble selling bonds to finance maturing debt, Paulson's hand may be pressed. They have about $20 billion of unsecured debt due on average every week, with more than $220 billion maturing by the end of next month.

A takeover could also be triggered if either company fails to meet its regulatory capital standards, to be released by the Federal Housing Finance Agency next month.

`Act Soon'

“Treasury might be forced to act soon to fight a market- psychology problem instead of being able to act on its own time,'' said Joshua Rosner, an analyst with independent research firm Graham Fisher & Co. in New York.

There's no consensus about how widespread the losses would be in an intervention. Pete Davis, president of Davis Capital Investment, an independent advisory firm in Washington, argued that both equity and subordinated bondholders wouldn't be protected, with owners of mortgage-backed securities and senior debt kept secure.

Davis wrote in a note yesterday that Paulson will probably aim to put off using taxpayer funds as long as Fannie and Freddie are still able to fund the U.S. mortgage market.

“Paulson does not want his legacy to be that he committed $50 billion or more of taxpayer money to bailing out the'' firms, Davis wrote.

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The chances of keeping Australia's inflation rate low over the medium term are good as the highest borrowing costs in 12 years cool the economy, Reserve Bank Governor Glenn Stevens said.

“This outlook does involve a period of significantly slower growth in demand in Australia,'' Stevens said in a speech to economists in Sydney today. “But controlling inflation has always involved being prepared to slow'' the economy, he said.

The Australian dollar and bond yields fell as Stevens' comments reinforced speculation he won't raise interest rates again following four increases since last August that boosted the benchmark to 7.25 percent. The economy grew at the weakest pace in almost two years in the first quarter as consumers cut spending to pay higher mortgage, fuel and food costs.

“Stevens is growing more confident the central bank's done enough to slow the economy and damp inflation,'' said Peter Jolly, head of research of National Australia Bank Ltd. in Sydney. “The bank has finished its series of interest-rate increases and is on hold for the rest of this year.''

The Australian dollar traded at 97.96 U.S. cents at 1:34 p.m. in Sydney from 98.08 cents before the speech was released. The two-year government bond yield fell 3 basis points, or 0.03 percentage point, to 6.53 percent.

“I think our chances of keeping inflation low over the medium term are good,'' Stevens said.

Inflation Goal

Stevens said the central bank remains committed to its goal of keeping inflation between 2 percent to 3 percent on average, even if annual price gains remain above that threshold for “a pretty long period.''

“We are of course fully aware of the possibility that people may fear that this temporary period of high inflation could, in fact, turn out to be persistent,'' he said.

Australia's annual consumer price index “might rise further before it starts to come down'' after gasoline costs surged above what the bank forecast in May, the governor said.

Annual core inflation accelerated to 4.4 percent in the first quarter, the fastest pace in almost 17 years. The government is due to publish second-quarter figures on July 23.

“We still expect inflation to fall back to 3 percent by mid-2010, and to continue declining gradually thereafter,'' Stevens said payday loans.

There is “pretty clear evidence'' that rising gasoline prices and higher borrowing costs are forcing consumers and businesses to cut spending, the governor said, adding “the extent of that slowing, and its duration, are uncertain.''

Slowing Economy

Consumer confidence slumped to the lowest level in 16 years in July, businesses were the most pessimistic since 2001 in June and home-loan approvals fell by the most in eight years in May, reports last week showed.

“It looks more likely now than it did a couple of months ago that this more moderate track for demand will continue,'' Stevens said. That will “in due course begin to exert downward'' pressure on inflation, he said.

Stevens suggested that the bank is comfortable with its forecast, made in May, that inflation will remain above the ceiling of its target range until the middle of 2010.

“If the May 2008 forecasts turn out to be right, then the current episode would entail nine quarters with year-ended inflation above 3 percent,'' he said.

Such an outcome “would still be consistent in every essential respect with the experience under inflation targeting since it began 15 years or so ago.''

`Exerting Restraint'

Today's comments echo minutes of the bank's July 1 policy meeting, published yesterday, which said interest rates are “exerting the appropriate degree of restraint'' on the economy, which has been expanding for 17 years.

Stevens said inflation is unlikely to be driven higher by wage growth, which has “to date been pretty well controlled.''

A record boom in the jobs market, which saw the unemployment rate fall to a three-decade low of 3.9 percent, ended in May when employers cut workers for the first time in 18 months. The jobless rate was 4.2 percent in June, a report showed last week.

“If the recent signs of moderation in demand for labor continue, which could be expected if overall demand remains on a slower track, that should help to contain any over-exuberance in wage setting,'' Stevens said.

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A new calorie-free natural sweetener being made by Cargill Inc. and Coca-Cola Co. will hit the store shelves this week.

The Business Journal previously reported that Minnetonka-based Cargill and Atlanta-based Coca-Cola developed a product derived from a South American herb called stevia, which also grows in China.

Marketed under the brand name Truvia, the sweetener will go on sale at select D'Agostino supermarkets in New York starting Wednesday. Cargill also is opening a tasting center for consumers at Rockefeller Center to coincide with the product launch. Called the "Truvia Greenhouse," the center, which will be open through Friday, features thousands of stevia plants, and offers consumers samples of beverages sweetened with the product, as well as table-top samples credit reports.